<PAGE>
APRIL 30, 1998
P H O E N I X
F U N D S
SEMIANNUAL REPORT
- - PHOENIX BALANCED FUND
- - PHOENIX CONVERTIBLE FUND
- - PHOENIX GROWTH FUND
- - PHOENIX AGGRESSIVE GROWTH FUND
- - PHOENIX HIGH YIELD FUND
- - PHOENIX U.S. GOVERNMENT SECURITIES FUND
- - PHOENIX MONEY MARKET FUND
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Equity Funds
The Balanced Fund Series......................................................................... 2
The Convertible Fund Series...................................................................... 12
The Growth Fund Series........................................................................... 19
The Aggressive Growth Fund Series................................................................ 26
Fixed Income Funds
The High Yield Fund Series....................................................................... 32
The U.S. Government Securities Fund Series....................................................... 40
The Money Market Fund Series....................................................................... 46
Notes to Financial Statements...................................................................... 52
Fund Features and General Information.............................................................. 56
</TABLE>
Mutual funds are not insured by the FDIC; are
not deposits or other obligations of a bank
and are not guaranteed by a bank; and are
subject to investment risks, including
possible loss of the principal invested.
<PAGE>
CHAIRMAN'S
MESSAGE
Dear Phoenix Funds Shareholder:
I'm pleased to make you aware that we recently changed
our corporate name to Phoenix Investment Partners, Ltd. We
feel this new name better fits the growing investment
management firm we have been building and reflects our
commitment to partnership and excellence in serving the
financial needs of investors like you.
Over the past year, we have added several of the
industry's most experienced and talented money managers to
our team to provide you with a wider variety of quality
investment products. Phoenix Investment Partners offers you
access to the distinct investment styles of independent
money managers across the U.S. and around the world:
Aberdeen Fund Managers, Inc.
Duff & Phelps Investment Management Co.
Phoenix Investment Counsel, Inc.
Roger Engemann & Associates, Inc.
Seneca Capital Management LLC
Classic Value group, led by Chris Bertelsen
Quantitative Value group, led by Steve Colton and Dong Hao
Zhang
As always, we are committed to providing you with sound
investments and outstanding service--now with even more
choices, including value-style mutual funds. To learn more
about our new partners and their distinctive investment
styles, contact your financial adviser or call a marketing
specialist at 1-800-243-4361.
Sincerely,
[SIGNATURE]
Philip R. McLoughlin
PRESIDENT, PHOENIX FUNDS
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
INVESTOR PROFILE
Phoenix Balanced Fund is designed for investors seeking to supplement current
income while maintaining the potential for future growth and conservation of
capital.
INVESTMENT ADVISER'S REPORT
Aided by a strong U.S. equity market, the Phoenix Balanced Fund posted strong
gains over this latest fiscal reporting period. For the six-month reporting
cycle ended April 30, 1998, Class A shares returned 11.62% and Class B shares
earned 11.23%. During the same period, the Fund's benchmark index* provided a
total return of 13.59%, and the average return for 392 balanced funds was
11.55%, according to Lipper Analytical Services Inc. All performance figures
assume reinvestment of dividends and exclude the effect of sales charges.
COMMON STOCK SUMMARY
Positive contributors to equity performance during this latest reporting cycle
included the Fund's overweighted position in the "red-hot" health-care sector as
well as strong stock selection in capital goods, consumer staples and financial
services. Individual stocks which produced stellar gains included such names as
Pfizer, HBO & Company, Gillette, BMC Software and Tyco International. On the
other side of the equation, negative contributors over the last six months
included the portfolio's exposure to the poorly performing energy group and
weakness in some of our technology and consumer cyclical holdings.
FIXED-INCOME SUMMARY
The fixed-income portion of the portfolio is managed by a fixed-income team,
using a multi-sector approach. Sector holdings have been opportunistically
shifted over the past six months into the most undervalued sectors and out of
sectors determined to be overvalued. Early in the year we were increasing our
exposure to U.S. Treasuries due to historically tight credit spreads. Over the
past six months, the Asian crisis has caused spreads to widen across all credit
sensitive sectors. We took advantage of this spread widening, increasing our
exposure to investment-grade corporates, taxable municipals, commercial
mortgage-backed securities and emerging markets.
OUTLOOK
Looking ahead, we expect economic growth to moderate later in the year as the
impact of the Asian crisis begins to take hold in the United States. Although we
expect the U.S. economy to slow, we do not foresee a recession on the immediate
horizon. As it relates to corporate profits, we believe earnings growth will
continue to slow, creating a challenging environment for investors and further
fueling the volatility and rotation in the market.
Specific to the equity portion of the Fund, we are maintaining our
overweighted positions in health care and technology, and are pleased with the
recent strong performance we received from these two sectors. Because of the
current speculative merger and acquisition environment in the financial services
arena, we believe that some of the group has become overbought and have elected
to selectively take profits in this sector. Lastly, given the attractive
risk/reward opportunities in the energy group, it is our intention to add to
these stocks as crude oil prices begin to show further signs of stabilization.
The fixed-income segment of the portfolio is positioned well for the new
fiscal year. The average credit quality is A+ and the duration is 4.8 years,
approximately equal to the Lehman Brothers Aggregate Bond Index. The credit
quality assigned to the Fund is based solely on the creditworthiness of the
investments in the portfolio and does not apply to the stability or safety of
the Fund. The sector allocation is well balanced with exposure to the
conventional core sectors, such as, investment-grade corporates and agency
mortgage-backed securities, and enhanced core sectors, such as taxable
municipals, commercial mortgage-backed securities, non-agency residential
mortgage-backed securities, and emerging-market debt.
As of April 30, 1998, the Phoenix Balanced Fund's asset allocation was 57%
equities, 38% fixed-income and 5% cash equivalents.
* The benchmark index is a composite of 55% S&P 500 Index, 35% Lehman
Brothers Aggregate Index, and 10% 90-day Treasury bills. This composite index is
not available for direct investment.
2
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ----------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--3.7%
U.S. TREASURY NOTES--3.7%
U.S. Treasury Notes 5.375%, 1/31/00....................... AAA $ 62,000 $ 61,794,774
U.S. Treasury Notes 6.875%, 3/31/00....................... AAA 2,900 2,967,715
--------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $65,019,076)........................................................... 64,762,489
--------------
AGENCY MORTGAGE-BACKED SECURITIES--4.2%
GNMA 6.50%, '23-'26....................................... AAA 72,947 72,753,753
--------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $70,789,985)........................................................... 72,753,753
--------------
MUNICIPAL BONDS--6.7%
CALIFORNIA--2.7%
California State Department Water System Series S 5%,
12/1/29................................................. AA 3,460 3,282,675
Fresno County Pension Taxable 6.21%, 8/15/06.............. AAA 5,150 5,104,937
Kern County Pension Obligation Taxable 7.26%, 8/15/14..... AAA 6,830 7,239,800
Long Beach Pension Obligation Taxable 6.87%, 9/1/06....... AAA 3,090 3,209,737
Los Angeles County Public Works 5.125%, 12/1/29........... AAA 5,250 5,053,125
Orange County General Obligation Revenue Taxable 7.62%
9/1/08.................................................. AAA 9,545 10,404,050
San Bernardino County Obligation Revenue Taxable 6.87%,
8/1/08.................................................. AAA 1,480 1,528,100
San Bernardino County Obligation Revenue Taxable 6.94%,
8/1/09.................................................. AAA 4,035 4,196,400
Sonoma County Pension Obligation 6.625%, 6/1/13........... AAA 3,600 3,613,500
Ventura County Pension Taxable 6.58%, 11/1/06............. AAA 3,560 3,631,200
--------------
47,263,524
--------------
FLORIDA--1.1%
Florida State Department of Transportation 5%, 7/1/27..... AA+ 4,200 4,011,000
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ----------- --------------
<S> <C> <C> <C>
FLORIDA--CONTINUED
Miami Beach Special Obligation Taxable 8.60%, 9/1/21...... AAA $ 11,675 $ 13,061,406
University of Miami Exchangeable Revenue Series A Taxable
7.65%, 4/1/20........................................... AAA 1,940 2,027,300
--------------
19,099,706
--------------
MASSACHUSETTES--0.4%
Massachusetts State Port Authority Revenue 6.05%,
7/1/02.................................................. AA- 3,280 3,263,600
Massachusetts State Water Authority 5%, 8/1/24............ AAA 4,200 3,990,000
--------------
7,253,600
--------------
NEW YORK--0.6%
New York State Taxable Series C 6.35%, 03/01/07 (e)....... AAA 10,055 10,080,138
--------------
PENNSYLVANIA--0.5%
Pittsburgh Pension Taxable 6.50%, 3/1/17.................. AAA 9,245 8,979,206
--------------
TEXAS--1.0%
Dallas-Fort Worth Texas International Taxable 6.50%,
11/1/09................................................. AAA 1,900 1,900,000
Dallas-Fort Worth Texas International Taxable 6.60%,
11/1/12................................................. AAA 6,250 6,281,250
Houston Texas Water & Sewer Refunding Jr Series D 5%,
12/1/25................................................. AAA 5,250 4,994,063
Texas State Taxable - Veterans Limited Series B 6.10%,
12/1/03................................................. AA 4,500 4,455,000
--------------
17,630,313
--------------
VIRGINIA--0.1%
Newport News Taxable Series B 7.05%, 1/15/25 (e).......... AA 2,500 2,503,125
--------------
WASHINGTON--0.3%
Washington State Series E Taxable 5%, 7/1/22.............. AA+ 5,250 4,954,688
--------------
TOTAL MUNICIPAL BONDS
(Identified cost $116,322,719).......................................................... 117,764,300
--------------
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
ASSET-BACKED SECURITIES--2.5% ---------- ----------- --------------
<S> <C> <C> <C>
AESOP Funding II LLC 144A 97-1, A2 6.40%, 10/20/03 (c).... AAA $ 8,500 $ 8,603,594
Associates Manufactured Housing Pass Through 97-2 A6
7.075%, 3/15/28......................................... AAA 3,000 3,043,125
Capital Equipment Receivables Trust 97-1B, 6.45%,
8/15/02................................................. A+ 4,900 4,958,187
Chase Credit Card Master Trust 97-2A 6.30%, 4/15/03....... AAA 9,000 9,050,976
Fleetwood Credit Corp. 96-B, A 6.90%, 3/15/12............. AAA 2,716 2,741,223
Green Tree Financial Corp. 96-2, M1 7.60%, 4/15/27........ AA- 9,150 9,513,141
Green Tree Financial Corp. 96-4, A6 7.40%, 6/15/27........ AAA 4,500 4,673,672
Green Tree Home Improvement Loan 6.90%, 7/15/21........... AAA 886 893,620
--------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $42,691,942)........................................................... 43,477,538
--------------
CORPORATE BONDS--4.0%
BANKS (MONEY CENTER)--0.8%
IBJ Preferred Capital Co. 144A 8.79%, 12/29/49 (c)........ BBB- 6,680 6,332,453
SB Treasury Co. 9.125%, 12/29/49.......................... BBB- 6,680 6,780,200
--------------
13,112,653
--------------
COMMUNICATIONS EQUIPMENT--0.4%
Panamsat Corp 144A 6.125%, 1/15/05 (c).................... A- 7,000 6,833,750
--------------
CONSUMER FINANCE--0.4%
Ford Motor Credit 6%, 1/14/03............................. A 6,900 6,848,250
--------------
DISTRIBUTORS (FOOD & HEALTH)--0.4%
McKesson Corp. 144A 6.40%, 3/1/08 (c)..................... A- 7,100 7,011,250
--------------
HEALTH CARE (DIVERSIFIED)--0.3%
Buckeye Cellulose Corp. 9.25%, 9/15/08.................... BB- 4,185 4,425,637
--------------
INVESTMENT BANKING/BROKERAGE--0.4%
Merrill Lynch & Co., 6%, 2/12/03.......................... AA- 7,000 6,947,500
--------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ----------- --------------
<S> <C> <C> <C>
MEDICAL PRODUCTS & SUPPLIES--0.4%
Boston Scientific Corp. 6.625%, 3/15/05................... A- $ 7,000 $ 7,017,500
--------------
RETAIL (FOOD CHAINS)--0.3%
Fred Meyer 7.45%, 3/1/08.................................. BB+ 5,800 5,785,500
--------------
TELEPHONE--0.4%
Century Telephone Enterprises Series F 6.30%, 1/15/08..... BBB+ 7,000 6,895,000
--------------
TRUCKERS & MARINE--0.1%
Teekay Shipping Corp. 8.32%, 2/1/08....................... BB 1,675 1,735,719
--------------
TRUCKS & PARTS--0.1%
Cummins Engine 6.45%, 3/1/05.............................. BBB+ 2,350 2,332,375
--------------
TOTAL CORPORATE BONDS
(Identified cost $69,233,676)........................................................... 68,945,134
--------------
NON-AGENCY MORTGAGE BACKED SECURITIES--8.2%
CS First Boston Mortgage 95-AE, B 7.182%, 11/25/27........ AA- 6,260 6,299,125
CS First Boston Mortgage Securities Corp. 97-C2, B 6.72%,
11/17/07................................................ AA(d) 9,000 9,118,125
CS First Boston Corp. 97-SPCE, D 144A 7.332%, 3/15/09
(c)..................................................... NR 4,039 4,066,768
Case Equipment Loan Trust 98-A A4, 5.83% 2/15/05.......... AAA 11,600 11,572,044
DLJ Mortgage Acceptance Corp. 96-CF1, A1B 144A 7.58%,
3/13/28 (c)............................................. AAA 6,475 6,883,734
Equicredit Home Equity Loan Trust 6.28%, 5/15/12.......... AAA 725 725,131
First Union Lehman Bros. 97-C1, B 7.43%, 4/18/07.......... AA(d) 8,532 8,961,266
G.E. Capital Mortgage Services, Inc. 96-8, M 7.25%,
5/25/26................................................. AA 5,093 5,204,420
GMAC Commercial Mortgage Securities, Inc. 97-B, C2 6.70%,
12/15/07................................................ AA(d) 5,000 5,045,312
Lehman Large Loan LL1, B 6.95%, 3/12/07................... AA 10,500 10,795,312
Nationslink Funding Corp. 96-1, B 7.69%, 12/20/05......... AA 5,907 6,246,632
New Century Home Equity Loan Trust 6.78%, 8/25/25......... AAA 9,000 9,022,500
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
NON-AGENCY MORTGAGE BACKED SECURITIES--CONTINUED ---------- ----------- --------------
<S> <C> <C> <C>
Newcourt Receivables Asset Trust 97-1 A3 6.11%, 5/20/01... AAA $ 2,100 $ 2,104,594
Premier Auto Trust 98-1, A4 5.70%, 1/6/03................. Aaa(d) 4,000 3,976,250
Prudential Home Mortgage Securities 93-L, 2B3 144A 6.641%,
12/25/23 (c)............................................ A(d) 5,000 4,935,938
Residential Asset Securitization Trust 96-A8, A1 8%,
12/25/26................................................ AAA 2,273 2,286,704
Residential Funding Mortgage Securities I 96-S1, A11
7.10%, 1/25/26.......................................... AAA 7,000 7,052,500
Residential Funding Mortgage Securities I 96-S4, M1 7.25%,
2/25/26................................................. AA 5,890 5,939,834
Residential Funding Mortgage Securities, I 96-S8, A4
6.75%, 3/25/11.......................................... AAA 2,607 2,637,588
Securitized Asset Sales 93-J 2B 6.808%, 11/28/23.......... A(d) 7,237 7,252,811
Structured Asset Securities Corp. 93-C1, B 6.60%,
10/25/24................................................ A+ 4,415 4,347,753
Structured Asset Securities Corp. 95-C4, B 7%, 6/25/26.... AA 5,000 5,040,625
Triangle Funding Ltd. 97-3A, 1B 5.846%, 10/15/05.......... AA 6,000 5,988,750
Wings Commercial Loan Master Trust I, 98-AA, AZ, 144A
5.905%, 3/20/06 (c)..................................... AAA 8,000 8,007,500
--------------
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(Identified cost $140,771,336).......................................................... 143,511,216
--------------
FOREIGN GOVERNMENT SECURITIES--6.9%
ARGENTINA--0.9%
Republic of Argentina Bearer FRB 6.25%, 3/31/05 (f)....... BB 11,210 10,299,187
Republic of Argentina 9.75%, 9/19/27...................... BB 5,080 4,904,740
--------------
15,203,927
--------------
BRAZIL--0.6%
Republic of Brazil NMB-L 6.75%, 4/15/09 (f)............... BB- 12,625 10,644,453
--------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ----------- --------------
<S> <C> <C> <C>
BULGARIA--0.3%
Bulgaria FLIRB Bearer Series A Euro 2.25%, 7/28/12 (f).... B(d) $ 8,350 $ 5,615,375
--------------
COLOMBIA--0.6%
Republic of Colombia Global Bond 7.25%, 2/15/03........... BBB- 8,950 8,703,875
Republic of Colombia Global Bond 7.25%, 2/23/04........... BBB- 1,750 1,653,750
--------------
10,357,625
--------------
CROATIA--0.6%
Croatia Series B 6.50%, 7/31/06 (f)....................... BBB- 5,084 4,668,174
Croatia Series A 6.625%, 7/31/10 (f)...................... BBB- 6,100 5,417,562
--------------
10,085,736
--------------
ECUADOR--0.3%
Ecuador Bearer PDI Euro, PIK interest capitalization
6.625%, 2/27/15 (f)..................................... B(d) 8,122 5,195,856
--------------
KOREA--0.2%
Republic of Korea 8.875%, 4/15/08......................... BB+ 3,130 3,086,180
--------------
MEXICO--0.9%
United Mexican States Global Bond 11.50%, 5/15/26......... BB 12,575 15,168,594
--------------
PANAMA--0.8%
Republic of Panama 8.875%, 9/30/27........................ BB+ 15,470 15,152,865
--------------
PERU--0.3%
Peru PDI 4%, 3/7/17 (f)................................... BB 7,850 5,362,531
--------------
POLAND--0.8%
Poland Bearer PDI 4%, 10/27/14 (f)........................ BBB- 16,000 14,640,000
--------------
RUSSIA--0.3%
Russia Ian Principal Loans 144A 6.719%, 12/15/15 (c)(f)... NR 7,585 5,465,941
--------------
VENEZUELA--0.3%
Republic of Venezuela 9.25%, 9/15/27...................... B+ 5,695 5,031,532
--------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $116,131,478).......................................................... 121,010,615
--------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
VENEZUELA--CONTINUED ---------- ----------- --------------
<S> <C> <C> <C>
FOREIGN CORPORATE BONDS--0.4%
ARGENTINA--0.2%
Telefonica de Argentina 9.125%, 5/7/08.................... BBB- $ 3,850 $ 3,869,250
--------------
CHILE--0.2%
Petropower I Funding Trust 144A 7.36%, 2/15/14 (c)........ BBB 2,900 2,876,945
--------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $6,725,938)............................................................ 6,746,195
--------------
<CAPTION>
SHARES
-----------
<S> <C> <C> <C>
PREFERRED STOCKS--1.1%
REITS--1.1%
Home Ownership Funding 2, Step-down Pfd. 144A 13.338%
(c)..................................................... 20,000 19,353,780
--------------
TOTAL PREFERRED STOCKS
(Identified cost $18,772,330)........................................................... 19,353,780
--------------
</TABLE>
<TABLE>
<S> <C> <C>
COMMON STOCKS--54.1%
AEROSPACE/DEFENSE--1.1%
Boeing Co.............................................................. 379,300 18,988,706
--------------
BANKS (MAJOR REGIONAL)--2.6%
Banc One Corp.......................................................... 171,370 10,078,698
BankBoston Corp........................................................ 70,100 7,566,419
Mellon Bank Corp....................................................... 67,400 4,852,800
NationsBank Corp....................................................... 140,700 10,658,025
U.S. Bancorp........................................................... 102,400 13,004,800
--------------
46,160,742
--------------
BANKS (MONEY CENTER)--1.3%
BankAmerica Corp....................................................... 100,600 8,551,000
Citicorp............................................................... 49,100 7,389,550
NDB Bancorp, Inc....................................................... 82,600 7,671,475
--------------
23,612,025
--------------
BROADCASTING (TELEVISION, RADIO & CABLE)--1.7%
CBS Corp............................................................... 510,200 18,175,875
Chancellor Media Corp. (b)............................................. 245,500 11,645,906
--------------
29,821,781
--------------
CHEMICALS--0.9%
Monsanto Co............................................................ 284,900 15,064,087
--------------
CHEMICAL (SPECIALTY)--0.4%
Solutia, Inc........................................................... 265,200 7,525,050
--------------
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C>
COMMUNICATIONS EQUIPMENT--0.4%
Ciena Corp. (b)........................................................ 112,200 $ 6,255,150
--------------
COMPUTERS (HARDWARE)--3.0%
International Business Machines Corp................................... 454,000 52,607,250
--------------
COMPUTERS (NETWORKING)--0.6%
Cisco Systems, Inc. (b)................................................ 132,025 9,670,831
--------------
COMPUTERS (PERIPHERALS)--0.4%
EMC Corp. (b).......................................................... 164,600 7,592,175
--------------
COMPUTERS (SOFTWARE & SERVICES)--4.6%
America Online, Inc. (b)............................................... 38,700 3,093,581
BMC Software, Inc. (b)................................................. 232,200 21,725,212
Comdisco, Inc.......................................................... 127,000 5,619,750
Computer Associates International, Inc................................. 292,600 17,135,387
Compuware Corp. (b).................................................... 419,500 20,503,062
Edwards (J.D.) & Co. (b)............................................... 183,300 6,530,062
Sterling Commerce...................................................... 118,400 5,039,400
--------------
79,646,454
--------------
CONSUMER FINANCE--0.7%
American Express Co.................................................... 50,200 5,120,400
Household International, Inc........................................... 58,600 7,702,237
--------------
12,822,637
--------------
DISTRIBUTORS (FOOD & HEALTH)--0.7%
Cardinal Health, Inc................................................... 128,100 12,329,625
--------------
ELECTRICAL EQUIPMENT--0.9%
General Electric Co.................................................... 194,900 16,590,862
--------------
ELECTRONICS (INSTRUMENTATION)--0.3%
Linear Technology Corp................................................. 75,000 6,037,500
--------------
ELECTRONICS (SEMICONDUCTORS)--0.6%
Intel Corp............................................................. 127,100 10,271,269
--------------
FINANCIAL (DIVERSIFIED)--1.0%
American General Corp.................................................. 34,600 2,305,225
FHLMC.................................................................. 337,800 15,644,363
--------------
17,949,588
--------------
HEALTH CARE (LONG TERM CARE)--0.9%
HEALTHSOUTH Corp. (b).................................................. 511,100 15,428,831
--------------
HEALTH CARE (DIVERSIFIED)--2.6%
Bristol-Myers Squibb Co................................................ 224,600 23,779,525
Warner-Lambert Co...................................................... 117,900 22,305,206
--------------
46,084,731
--------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
HEALTH CARE (DRUGS--MAJOR PHARMACEUTICALS)--2.6%
<S> <C> <C>
Pfizer, Inc............................................................ 192,400 $ 21,897,525
Schering Plough Corp................................................... 128,500 10,296,062
Watson Pharmaceuticals, Inc. (b)....................................... 306,100 13,162,300
--------------
45,355,887
--------------
HEALTH CARE (HOSPITAL MANAGEMENT)--1.6%
HBO & Co............................................................... 330,700 19,779,994
Tenet Healthcare Corp.................................................. 203,400 7,614,788
--------------
27,394,782
--------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.4%
Guidant Corp........................................................... 155,900 10,425,813
Medtronic, Inc......................................................... 252,900 13,308,863
--------------
23,734,676
--------------
HOUSEHOLD FURN. & APPLIANCES--0.1%
Sunbeam Corp., Inc..................................................... 50,500 1,268,813
--------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--0.8%
Colgate-Palmolive Co................................................... 157,200 14,098,875
--------------
INSURANCE (LIFE/HEALTH)--0.4%
UNUM Corp.............................................................. 146,000 7,847,500
--------------
INSURANCE (MULTI-LINE)--1.6%
American International Group, Inc...................................... 82,200 10,814,438
Reliastar Financial Corp............................................... 108,700 4,959,438
Travelers Group, Inc................................................... 204,000 12,482,250
--------------
28,256,126
--------------
INSURANCE (PROPERTY-CASUALTY)--0.8%
Allstate Corp.......................................................... 137,700 13,253,625
--------------
MACHINERY (DIVERSIFIED)--0.8%
Deere & Co............................................................. 164,600 9,618,813
Thermo Electron Corp................................................... 126,600 5,040,262
--------------
14,659,075
--------------
MANUFACTURING (DIVERSIFIED)--0.9%
Tyco International Ltd................................................. 279,700 15,243,650
--------------
OIL (DOMESTIC INTEGRATED)--1.0%
Tosco Corp............................................................. 484,500 17,260,313
--------------
OIL & GAS (DRILLING & EQUIPMENT)--2.7%
Cooper Cameron Corp. (b)............................................... 81,900 5,441,231
Diamond Offshore Drilling, Inc......................................... 174,400 8,829,000
Halliburton Co......................................................... 196,700 10,818,500
Schlumberger Ltd....................................................... 158,600 13,143,975
Transocean Offshore, Inc............................................... 155,400 8,682,975
--------------
46,915,681
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C>
PAPER & FOREST PRODUCTS--0.5%
International Paper Co................................................. 161,200 $ 8,412,625
--------------
PERSONAL CARE--1.1%
Gillette Co............................................................ 162,300 18,735,506
--------------
RETAIL (BUILDING SUPPLIES)--0.8%
Home Depot, Inc........................................................ 197,400 13,743,975
--------------
RETAIL (DRUG STORES)--2.1%
CVS Corp............................................................... 238,500 17,589,375
Rite Aid Corp.......................................................... 601,100 19,310,338
--------------
36,899,713
--------------
RETAIL (FOOD CHAINS)--1.4%
Safeway, Inc. (b)...................................................... 621,800 23,783,850
--------------
RETAIL (GENERAL MERCHANDISE)--2.4%
Borders Group, Inc. (b)................................................ 225,300 7,237,763
Consolidated Stores Corp. (b).......................................... 394,300 15,772,000
Fred Meyer, Inc. (b)................................................... 184,390 8,262,977
Staples, Inc. (b)...................................................... 414,050 10,221,859
--------------
41,494,599
--------------
RETAIL (SPECIALTY-APPAREL)--0.4%
TJX Companies, Inc..................................................... 144,500 6,394,125
--------------
TELECOMMUNICATIONS (LONG DISTANCE)--2.3%
MCI Communications Corp................................................ 195,300 9,826,031
AT&T Corp.............................................................. 505,900 30,385,619
--------------
40,211,650
--------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--2.6%
Airtouch Communications, Inc. (b)...................................... 560,200 29,760,625
Tele-Comm Liberty Media Group (b)...................................... 463,400 15,379,088
--------------
45,139,713
--------------
WASTE MANAGEMENT--1.1%
U.S.A. Waste Services, Inc. (b)........................................ 401,500 19,698,594
--------------
TOTAL COMMON STOCKS
(Identified cost $775,309,150).......................................................... 944,262,647
--------------
FOREIGN COMMON STOCKS--3.0%
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.4%
Elan PLC Sponsored ADR (Ireland) (b)................................... 102,900 6,392,662
--------------
HOUSEHOLD FURN. & APPLIANCES--1.6%
Philips Electronics NV ADR NY Registered (Netherlands)................. 317,100 28,539,000
--------------
TELECOMMUNICATIONS EQUIPMENT--0.3%
Telefonaktiebolaget LM Ericsson ADR (Sweden)........................... 95,800 4,927,713
--------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------
<S> <C> <C>
TELEPHONE--0.7%
Telecom Brasil ADR (Brazil)............................................ 99,900 $ 12,169,069
--------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $46,721,977)........................................................... 52,028,444
--------------
TOTAL LONG-TERM INVESTMENTS --94.8%
(Identified cost $1,468,489,607)........................................................ 1,654,616,111
--------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
---------- -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--4.6%
COMMERCIAL PAPER--4.6%
Campbell Soup Co. 5.47%, 5/1/98........................... A-1+ $ 4,324 4,320,058
Corporate Receivables Capital 5.50%, 5/1/98............... A-1+ 900 900,000
Exxon Imperial U.S., Inc. 5.50%, 5/4/98................... A-1+ 5,000 4,997,708
Preferred Receivables Funding Corp. 5.60%, 5/4/98......... A-1 4,300 4,297,993
Deutsche Bank Financial 5.51%, 5/6/98..................... A-1+ 5,000 4,996,174
Greenwich Funding Corp. 5.55%, 5/6/98..................... A-1 5,155 5,151,026
Campbell Soup Co. 5.47%, 5/7/98........................... A-1+ 5,076 5,071,372
Kimberly-Clark Corp., 5.51% 5/7/98........................ A-1+ 1,720 1,718,421
AlliedSignal, Inc., 5.52%, 5/8/98......................... A-1 5,000 4,994,633
Merrill Lynch Co. 5.52%, 5/12/98.......................... A-1+ 4,140 4,133,017
Corporate Financial 5.51%, 5/13/98........................ A-1 2,500 2,495,408
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ----------- --------------
<S> <C> <C> <C>
Corporate Receivables Corp. 5.50%, 5/13/98................ A-1+ $ 1,855 $ 1,851,568
Potomac Electric Power Co. 5.52%, 5/14/98................. A-1 3,890 3,882,246
BellSouth Capital Funding Corp. 5.50%, 5/15/98............ A-1+ 4,510 4,500,354
Private Export Funding Corp. 5.50%, 5/15/98............... A-1+ 4,500 4,490,377
Private Export Funding Corp. 5.48%, 5/21/98............... A-1+ 10,464 10,432,142
Greenwich Funding Corp. 5.52%, 5/22/98.................... A-1+ 3,800 3,787,764
CXC, Inc. 5.41%, 6/15/98.................................. A-1+ 5,000 4,992,500
Private Export Funding Corp. 5.36%, 8/3/98................ A-1+ 2,405 2,402,836
CXC, Inc. 5.47%, 9/16/98.................................. A-1+ 1,000 976,753
--------------
80,392,350
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $80,336,823)........................................................... 80,392,350
--------------
TOTAL INVESTMENTS--99.4%
(Identified cost $1,548,826,430)........................................................ 1,735,008,461(a)
Cash and receivables, less liabilities--0.6%............................................ 10,726,492
--------------
NET ASSETS--100.0%........................................................................ $1,745,734,953
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $194,269,019 and gross
depreciation of $8,086,988 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$1,548,826,430.
(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 April 30,
1998, these securities amounted to a value of $80,371,653 or 4.6% of net
assets.
(d) As rated by Moody's, Fitch or Duff & Phelps
(e) Segregated as collateral.
(f) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
8 See Notes to Financial Statements
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $1,548,826,430) $ 1,735,008,461
Short-term investments held as collateral for loaned
securities 7,069,900
Cash 5,048
Receivables
Investment securities sold 23,645,731
Interest and dividends 7,497,769
Fund shares sold 238,428
----------------
Total assets 1,773,465,337
----------------
LIABILITIES
Payables
Investments securities purchased 16,255,119
Fund shares repurchased 2,637,040
Collateral on securities loaned 7,069,900
Investment advisory fee 761,089
Transfer agent fee 255,797
Distribution fee 380,907
Financial agent fee 32,006
Trustees' fee 9,300
Accrued expenses 329,226
----------------
Total liabilities 27,730,384
----------------
NET ASSETS $ 1,745,734,953
----------------
----------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 1,450,603,541
Undistributed net investment income 3,533,725
Accumulated net realized gain 105,415,656
Net unrealized appreciation 186,182,031
----------------
NET ASSETS $ 1,745,734,953
----------------
----------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,712,082,369) 100,988,830
Net asset value per share $16.95
Offering price per share
$16.95/(1-4.75%) $17.80
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $33,652,584) 1,990,896
Net asset value and offering price per share $16.90
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 23,906,772
Dividends 5,044,907
Security lending 143,555
--------------
Total investment income 29,095,234
--------------
EXPENSES
Investment advisory fee 4,529,453
Distribution fee-Class A 2,101,588
Distribution fee-Class B 156,637
Financial agent fee 191,391
Transfer agent 1,037,019
Printing 142,580
Custodian 69,830
Professional 27,066
Registration 19,219
Trustees 10,674
Miscellaneous 42,149
--------------
Total expenses 8,327,606
--------------
NET INVESTMENT INCOME 20,767,628
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 107,757,123
Net change in unrealized appreciation (depreciation) on
investments 61,427,846
--------------
NET GAIN ON INVESTMENTS 169,184,969
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 189,952,597
--------------
--------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
---------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 20,767,628 $ 47,448,167
Net realized gain 107,757,123 250,161,443
Net change in unrealized appreciation (depreciation) 61,427,846 404,566
---------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 189,952,597 298,014,176
---------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (21,388,908) (48,278,671)
Net investment income--Class B (286,006) (561,622)
Net realized gains--Class A (245,758,798) (194,038,812)
Net realized gains--Class B (4,498,006) (2,800,356)
---------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (271,931,718) (245,679,461)
---------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,479,573 and 4,597,468
shares, respectively) 40,323,199 78,630,179
Net asset value of shares issued from reinvestments of
distributions
(16,161,592 and 13,753,866 shares, respectively) 246,831,649 223,224,574
Cost of shares repurchased (11,879,139 and 32,162,386
shares, respectively) (196,942,009) (548,027,979)
---------------- -----------------
Total 90,212,839 (246,173,226)
---------------- -----------------
CLASS B
Proceeds from sales of shares (181,625 and 319,964 shares,
respectively) 3,051,430 5,480,183
Net asset value of shares issued from reinvestments of
distributions
(289,442 and 189,697 shares, respectively) 4,411,570 3,074,179
Cost of shares repurchased (155,273 and 329,164 shares,
respectively) (2,562,028) (5,630,228)
---------------- -----------------
Total 4,900,972 2,924,134
---------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 95,113,811 (243,249,092)
---------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS 13,134,690 (190,914,377)
---------------- -----------------
NET ASSETS
Beginning of period 1,732,600,263 1,923,514,640
---------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF
$3,533,725 AND $4,441,011, RESPECTIVELY) $ 1,745,734,953 $ 1,732,600,263
---------------- -----------------
---------------- -----------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
PHOENIX BALANCED FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 18.07 $ 17.56 $ 17.04 $ 15.23 $ 16.64 $ 15.92
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.21 0.48 0.48 0.52 0.48 0.46
Net realized and unrealized
gain (loss) 1.54 2.38 1.46 1.80 (1.01) 1.08
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.75 2.86 1.94 2.32 (0.53) 1.54
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.22) (0.48) (0.49) (0.51) (0.49) (0.46)
Dividends from net realized
gains (2.65) (1.87) (0.93) -- (0.39) (0.36)
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (2.87) (2.35) (1.42) (0.51) (0.88) (0.82)
--------- --------- --------- --------- --------- ---------
Change in net asset value (1.12) 0.51 0.52 1.81 (1.41) (0.72)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 16.95 $ 18.07 $ 17.56 $ 17.04 $ 15.23 $ 16.64
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 11.62%(3) 18.04% 12.03% 15.52% (3.28)% 9.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $1,712,082 $1,702,385 $1,897,306 $2,345,440 $2,601,808 $3,126,014
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 0.96%(2) 0.98% 1.01% 1.02% 0.96% 0.95%
Net investment income 2.44%(2) 2.65% 2.74% 3.27% 3.03% 2.88%
Portfolio turnover 82%(3) 206% 191% 197% 159% 130%
Average commission rate
paid(4) $0.0487 $0.0541 $0.0546 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 7/15/94
4/30/98 YEAR ENDED OCTOBER 31, TO
(UNAUDITED) 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 18.04 $ 17.54 $ 17.01 $ 15.23 $ 15.27
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.15 0.35 0.35 0.40 0.09
Net realized and unrealized
gain (loss) 1.52 2.37 1.47 1.80 (0.04)
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.67 2.72 1.82 2.20 0.05
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.16) (0.35) (0.36) (0.42) (0.09)
Dividends from net realized
gains (2.65) (1.87) (0.93) -- --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (2.81) (2.22) (1.29) (0.42) (0.09)
--------- --------- --------- --------- ---------
Change in net asset value (1.14) 0.50 0.53 1.78 (0.04)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 16.90 $ 18.04 $ 17.54 $ 17.01 $ 15.23
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(1) 11.23%(3) 17.13% 11.24% 14.68% (0.34)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $33,653 $30,216 $26,209 $16,971 $4,629
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.75%(2) 1.73% 1.76% 1.78% 1.65%(2)
Net investment income 1.65%(2) 1.90% 1.96% 2.46% 2.36%(2)
Portfolio turnover 82%(3) 206% 191% 197% 159%
Average commission rate
paid(4) $0.0487 $0.0541 $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,
mark-downs, or spreads on shares traded on a principal basis.
See Notes to Financial Statements 11
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
INVESTOR PROFILE
Phoenix Convertible Fund is designed for an investor seeking to supplement
current income while maintaining the potential for growth.
INVESTMENT ADVISER'S REPORT
For the six-month period ended April 30, 1998, Phoenix Convertible Fund Class
A and B shares posted solid returns of 6.74% and 6.42%, respectively, compared
with a 9.12% return for the CS First Boston Convertible Securities Index*. All
performance figures assume reinvestment of dividends and exclude the effect of
sales charges.
During this latest reporting cycle, speculative-grade convertibles
outperformed investment-grade issues. The portfolio's underperformance versus
the benchmark resulted primarily from our energy holdings and from our
relatively conservative investment posture in a rapidly rising market. Consumer
cyclical and staples stocks registered strong gains over the last six months and
our heavy exposure to these sectors benefited performance. Top contributors
included U.S. West, Media Group, Time Warner, Cablevision Systems and Office
Depot.
OUTLOOK
Looking ahead, we expect economic growth to moderate later in the year as the
impact of the Asian crisis begins to take hold in the United States. Although
our forecast calls for a slowdown in the U.S. economy, we do not foresee a
recession on the immediate horizon. As it relates to the stock market, we
believe that corporate profit growth will continue to slow, creating a
challenging earnings environment for investors and further fueling the
volatility and rotation in the market. As always, we remain committed to the
Fund's overall objective of providing low-risk equity exposure. The portfolio's
asset allocation as of April 30, 1998 was 80% convertible securities, 4% common
stock and 16% cash equivalents.
* The CS First Boston Convertible Index includes issues rated "B-" or better
by Standard & Poor's, with a minimum issue size of $50 million. The Index is not
available for direct investment.
12
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ----------- ------------------
<S> <C> <C> <C>
CONVERTIBLE BONDS--53.9%
COMMUNICATIONS EQUIPMENT--0.7%
BBN Corp. Cv. 6%, 4/1/12......... B $ 1,500 $ 1,455,000
------------------
COMPUTER (SOFTWARE & SERVICES)--1.2%
System Software Association Cv.
7%, 9/15/02.................... NR 2,750 2,378,750
------------------
DIVERSIFIED MISCELLANEOUS--2.1%
Berkshire Hathaway Cv. 1%,
12/2/01........................ AA 2,325 4,286,719
------------------
ELECTRICAL EQUIPMENT--2.8%
Itron, Inc. Cv. 6.75%,
3/31/04........................ NR 1,850 1,720,500
Thermo Electron Corp. Cv. 144A
4.25%, 1/1/03 (c).............. A- 3,500 4,020,625
------------------
5,741,125
------------------
ELECTRONICS (SEMICONDUCTORS)--1.0%
Xilinx, Inc. Cv. 5.25%,
11/1/02........................ B 1,850 1,981,813
------------------
HEALTH CARE (DIVERSIFIED)--1.5%
Chiron Corp. Cv. 144A 1.90%,
11/17/00 (c)................... BBB+ 3,250 3,022,500
------------------
HEALTH CARE (LONG TERM CARE)--0.5%
Atria Communities, Inc. Cv. 144A
5%, 10/15/02 (c)............... B- 1,000 996,250
------------------
HOUSEHOLD FURN. & APPLIANCES--1.2%
Sunbeam Corp. Cv. 0%, 3/25/18.... NR 7,800 2,437,500
------------------
LEISURE TIME PRODUCTS--5.8%
Imax Corp. Cv. 5.75%, 4/1/03..... B 4,250 5,838,437
Time Warner, Inc. Cv. 0%,
6/22/13........................ BBB- 10,135 6,119,006
------------------
11,957,443
------------------
METALS MINING--5.3%
Coeur d'Alene Cv. 144A 7.25%,
10/31/05 (c)................... NR 7,500 6,993,750
Coeur d'Alene Euro Cv. 6%,
6/10/02........................ CCC+ 1,000 765,000
Stillwater Mining Co. Cv. 7%,
5/1/03......................... NR 2,800 3,125,500
------------------
10,884,250
------------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ----------- ------------------
<S> <C> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)--9.1%
Baker Hughes, Inc. Cv. 0%,
5/5/08......................... A- $ 2,100 $ 1,722,000
Diamond Offshore Drilling, Inc.
Cv. 3.75%, 2/15/07............. BBB+ 1,500 2,002,500
Halter Marine Group, Inc. Cv.
4.50%, 9/15/04................. B+ 3,550 3,092,937
Halter Marine Group, Inc. Cv.
144A 4.50%, 9/15/04 (c)........ NR 2,175 1,894,969
Key Energy Group Cv. 144A 5%,
9/15/04 (c).................... NR 2,000 1,660,000
Nabors Industries, Inc. Cv. 5%,
5/15/06........................ BBB- 4,605 6,901,744
Offshore Logistic Cv. 144A 6%,
12/15/03 (c)................... B+ 1,000 1,197,500
------------------
18,471,650
------------------
PUBLISHING--1.2%
Hollinger, Inc. Cv. 0%,
10/5/13........................ BB- 6,000 2,407,500
------------------
PUBLISHING (NEWSPAPERS)--0.7%
Times Mirror Co. Cv. 144A 0%,
4/15/17 (c).................... A 3,500 1,513,750
------------------
RETAIL (DRUG STORES)--2.8%
Rite Aid Corp. Cv. 144A 5.25%,
9/15/02 (c).................... BBB 5,175 5,808,938
------------------
RETAIL (GENERAL MERCHANDISE)--4.9%
Home Depot, Inc. Cv. 3.25%,
10/1/01........................ A+ 1,250 1,945,313
Office Depot, Inc. Cv. 0%,
11/1/08........................ BB- 2,500 1,959,375
Pep Boys Cv. 0%, 9/20/11......... BBB 7,775 4,169,344
Saks Holdings, Inc. Cv. 5.50%,
9/15/06........................ B 1,250 1,084,375
Sports Authority, Inc. (The) Cv.
144A 5.25%, 9/15/01 (c)........ B 1,000 913,750
------------------
10,072,157
------------------
SERVICES (ADVERTISING/MARKETING)--3.4%
Interpublic Group (The) Cv. 144A
1.80%, 9/16/04 (c)............. NR 2,500 2,381,250
Omnicom Group, Inc. Cv. 144A
2.25%, 1/6/13 (c).............. NR 4,000 4,580,000
------------------
6,961,250
------------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ----------- ------------------
SERVICES (COMMERCIAL & CONSUMER)--0.5%
<S> <C> <C> <C>
Metamor Worldwide, Inc. Cv.
2.94%, 8/15/04................. NR $ 1,000 $ 1,036,250
------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--2.0%
Premiere Technology Cv. 144A
5.75%, 7/1/04 (c).............. NR 1,500 1,732,500
U.S. Cellular Corp. Cv. 0%,
6/15/15........................ BBB- 6,000 2,287,500
------------------
4,020,000
------------------
WASTE MANAGEMENT--7.2%
Chemical Waste Management, Inc.
Cv. 0%, 8/16/10................ BBB+ 14,150 6,919,350
U.S.A. Waste Services, Inc. Cv.
4%, 2/1/02..................... BBB- 2,650 3,259,500
WMX Technologies, Inc. Cv. 2%,
1/24/05........................ BBB+ 4,710 4,521,600
------------------
14,700,450
------------------
TOTAL CONVERTIBLE BONDS
(Identified cost $106,453,167).............................. 110,133,295
------------------
FOREIGN CONVERTIBLE BONDS--5.0%
SINGAPORE--1.1%
APP Finance VII Mauritius Cv.
144A 3.50%, 4/30/03 (c)........ NR 2,300 2,294,250
------------------
SWITZERLAND--3.9%
Roche Holdings, Inc. Cv. 144A 0%,
5/6/12 (c)..................... NR 7,800 3,597,750
Sandoz Capital BVI Ltd. Cv. 2%,
10/6/02........................ Aaa(b) 1,500 2,343,750
Sandoz Capital BVI Ltd. Cv. 144A
2%, 10/6/02 (c)................ Aaa(b) 1,330 2,078,125
------------------
8,019,625
------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $9,566,443)................................ 10,313,875
------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--21.3%
AIRLINES--1.5%
Trans World Air Cv. Pfd. 8%.................. 82,900 3,025,850
------------------
BROADCASTING (TELEVISION, RADIO & CABLE)--0.5%
Cablevision Systems Corp. Cv. Pfd. 8.50%..... 21,000 1,008,000
------------------
COMMUNICATIONS EQUIPMENT--0.9%
Merrill Lynch & Co. Series Cox (STRYPES) Cv.
Pfd. 6%.................................... 26,100 975,487
TCI Pacific Communications Cv. Pfd. 5%....... 4,800 876,000
------------------
1,851,487
------------------
<CAPTION>
SHARES VALUE
----------- ------------------
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--0.4%
Microsoft Corp. Series A Cv. Pfd. $2.196..... 8,500 $ 791,562
------------------
HEALTH CARE (DIVERSIFIED)--0.6%
McKesson Corp. Cv. Pfd. 144A $2.50 (c)....... 11,600 1,122,300
------------------
HOUSEHOLD FURN. & APPLIANCES--3.6%
Newell Financial Trust I Cv. Pfd. 5.25%,
Series 144A (c)............................ 129,900 7,355,588
------------------
INSURANCE (MULTI-LINE)--3.0%
American General Delaware Series A Cv. Pfd.
6%......................................... 24,600 2,091,000
St. Paul Capital LLC MIPS Cv. Pfd. 6%........ 56,000 4,088,000
------------------
6,179,000
------------------
METALS MINING--1.5%
Timet Capital Trust I Cv. Pfd. 144A 6.625%
(c)........................................ 20,000 960,000
USX Corp. Cv. Pfd. 6.75%..................... 97,800 2,004,900
------------------
2,964,900
------------------
NATURAL GAS--2.7%
El Paso Energy Capital Cv. Pfd. 4.75%........ 104,000 5,466,500
------------------
OIL & GAS (DRILLING & EQUIPMENT)--1.6%
EVI, Inc. Cv. Pfd. 144A, 5% (c).............. 69,500 3,266,500
------------------
OIL & GAS (EXPLORATION & PRODUCTION)--1.5%
Belco Oil & Gas Cv. Pfd. 6.50%............... 40,000 1,035,000
Lomak Petroleum Cv. Pfd. 144A 5.75% (c)...... 50,000 2,106,250
------------------
3,141,250
------------------
PAPER & FOREST PRODUCTS--1.0%
International Paper Co. Cv. Pfd. 5.25%....... 38,600 2,084,400
------------------
RAILROADS--1.0%
Union Pacific Capital Trust Cv. Pfd. 144A
6.25% (c).................................. 40,000 2,085,000
------------------
TELEPHONE--0.5%
US West, Inc. Series D Cv. Pfd. 4.50%........ 12,700 968,375
------------------
TEXTILES (APPAREL)--1.0%
Designer Finance Cv. Pfd. 6%................. 46,700 2,101,500
------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $39,721,128)............................... 43,412,212
------------------
COMMON STOCKS--4.2%
AEROSPACE/DEFENSE--0.5%
Boeing Co.................................... 20,400 1,021,275
------------------
ALUMINUM--0.5%
Kaiser Aluminum Corp......................... 36,800 384,100
Reynolds Metals Co........................... 9,200 607,200
------------------
991,300
------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
METALS MINING--0.3% -------- ------------------
<S> <C> <C>
Stillwater Mining Co......................... 22,900 $ 605,418
------------------
OIL & GAS (DRILLING & EQUIPMENT)--1.9%
Friede Goldman International, Inc............ 30,400 1,223,613
Marine Drilling Companies, Inc............... 31,900 775,569
Noble Drilling Corp.......................... 30,393 982,074
Varco International, Inc..................... 29,000 891,750
------------------
3,873,006
------------------
RETAIL (GENERAL MERCHANDISE)--0.5%
Consolidated Stores Corp..................... 25,700 1,028,000
------------------
TELECOMMUNICATIONS (LONG DISTANCE)--0.5%
AT&T Corp.................................... 16,300 979,019
------------------
TOTAL COMMON STOCKS
(Identified cost $6,993,758)....................................... 8,498,018
------------------
TOTAL LONG-TERM INVESTMENTS--84.4%
(Identified cost $162,734,496)..................................... 172,357,400
------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--16.3%
COMMERCIAL PAPER--15.5%
Enterprise Funding Corp. 5.54%,
5/1/98......................... A-1 $2,000 2,000,000
Marsh & McLennan Companies 5.52%,
5/1/98......................... A-1+ 4,460 4,460,000
SBC Communications, Inc. 5.52%,
5/4/98......................... A-1+ 2,500 2,498,850
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ----------- ------------------
<S> <C> <C> <C>
COMMERCIAL PAPER--CONTINUED
Kimberly-Clark Corp. 5.51%,
5/7/98......................... A-1+ $3,945 $ 3,941,377
AlliedSignal, Inc. 5.52%
5/8/1998....................... A-1 2,165 2,162,676
Procter & Gamble Co. 5.53%,
5/8/98......................... A-1+ 3,500 3,496,236
AlliedSignal, Inc. 5.53%,
5/11/98........................ A-1 3,590 3,584,485
Anheuser-Busch Cos., Inc. 5.50%,
5/11/98........................ A-1+ 850 848,702
Associates Corp. of North America
5.50%, 5/13/98................. A-1+ 3,750 3,750,000
Dupont (E.I.) de Nemours & Co.
5.50%, 5/27/98................. A-1+ 3,355 3,341,673
Corporate Receivables Corp.
5.50%, 6/12/98................. A-1+ 1,525 1,508,536
------------------
31,592,535
------------------
FEDERAL AGENCY SECURITIES--0.8%
FHLMC 5.43%, 5/22/98.......................... 1,670 1,664,710
------------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $33,263,925)............................... 33,257,245
------------------
TOTAL INVESTMENTS--100.7%
(Identified cost $195,998,421).............................. 205,614,645(a)
Cash and receivables, less liabilities--(0.7%).............. (1,455,142)
------------------
NET ASSETS--100.0%............................................ $204,159,503
------------------
------------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $14,412,435 and gross
depreciation of $4,796,211 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$195,998,421.
(b) As rated by Moody's.
(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 qualified institutional buyers. At April 30,1998,
these securities amounted to a value of $61,581,545 or 30.2% of net assets.
See Notes to Financial Statements 15
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $195,998,421) $ 205,614,645
Short-term investments held as collateral for loaned
securities 2,493,800
Cash 2,299,831
Receivables
Investment securities sold 1,128,489
Dividends and interest 876,474
Fund shares sold 62,557
--------------
Total assets 212,475,796
--------------
LIABILITIES
Payables
Collateral on securities loaned 2,493,800
Investment securities purchased 5,372,974
Fund shares repurchased 192,274
Investment advisory fee 109,892
Distribution fee 47,575
Transfer agent fee 35,742
Trustees' fee 9,301
Financial agent fee 7,582
Accrued expenses 47,153
--------------
Total liabilities 8,316,293
--------------
NET ASSETS $ 204,159,503
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 181,862,456
Undistributed net investment income 662,970
Accumulated net realized gain 12,017,853
Net unrealized appreciation 9,616,224
--------------
NET ASSETS $ 204,159,503
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $195,551,146) 10,372,087
Net asset value per share $18.85
Offering price per share
$18.85/(1-4.75%) $19.79
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $8,608,357) 458,660
Net asset value and offering price per share $18.77
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 3,441,584
Dividends 1,032,127
Security lending 8,539
-------------
Total investment income 4,482,250
-------------
EXPENSES
Investment advisory fee 664,404
Distribution fee--Class A 245,175
Distribution fee--Class B 41,458
Financial agent fee 50,810
Transfer agent 116,929
Professional 16,105
Registration 11,489
Custodian 10,954
Trustees 10,674
Printing 7,956
Miscellaneous 10,086
-------------
Total expenses 1,186,040
-------------
NET INVESTMENT INCOME 3,296,210
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 11,980,932
Net change in unrealized appreciation (depreciation)
on investments (2,063,945)
-------------
NET GAIN ON INVESTMENTS 9,916,987
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,213,197
-------------
-------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 3,296,210 $ 6,453,569
Net realized gain 11,980,932 26,030,582
Net change in unrealized appreciation (depreciation) (2,063,945) 1,273,001
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 13,213,197 33,757,152
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (2,955,442) (6,482,244)
Net investment income--Class B (99,832) (177,737)
Net realized gains--Class A (24,998,912) (13,252,457)
Net realized gains--Class B (1,017,432) (398,476)
-------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (29,071,618) (20,310,914)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (458,449 and 701,929 shares, respectively) 9,024,073 13,664,448
Net asset value of shares issued from reinvestment of distributions
(1,344,937 and 854,224 shares, respectively) 23,720,050 16,093,284
Cost of shares repurchased (1,239,660 and 2,904,061 shares, respectively) (23,083,139) (56,421,242)
-------------- -----------------
Total 9,660,984 (26,663,510)
-------------- -----------------
CLASS B
Proceeds from sales of shares (52,708 and 131,986 shares, respectively) 976,268 2,562,597
Net asset value of shares issued from reinvestment of distributions
(55,240 and 21,826 shares, respectively) 969,980 410,540
Cost of shares repurchased (43,892 and 68,900 shares, respectively) (822,321) (1,343,541)
-------------- -----------------
Total 1,123,927 1,629,596
-------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 10,784,911 (25,033,914)
-------------- -----------------
NET DECREASE IN NET ASSETS (5,073,510) (11,587,676)
NET ASSETS
Beginning of period 209,233,013 220,820,689
-------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$662,970 AND $422,034, RESPECTIVELY) $204,159,503 $ 209,233,013
-------------- -----------------
-------------- -----------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
PHOENIX CONVERTIBLE FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.51 $ 19.26 $ 18.23 $ 17.56 $ 19.34 $ 18.86
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.32 0.61(4) 0.70(4) 0.87 0.78 0.68
Net realized and unrealized gain (loss) 0.85 2.54 1.68 1.04 (1.06) 1.53
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 1.17 3.15 2.38 1.91 (0.28) 2.21
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.29) (0.64) (0.77) (1.05) (0.69) (0.73)
Dividends from net realized gains (2.54) (1.26) (0.58) (0.19) (0.81) (1.00)
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (2.83) (1.90) (1.35) (1.24) (1.50) (1.73)
--------- --------- --------- --------- --------- ---------
Change in net asset value (1.66) 1.25 1.03 0.67 (1.78) 0.48
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 18.85 $ 20.51 $ 19.26 $ 18.23 $ 17.56 $ 19.34
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 6.74%(3) 17.40% 13.55% 11.45% (1.48)% 12.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $195,551 $ 201,170 $ 214,874 $ 219,384 $ 226,294 $ 252,072
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.13%(2) 1.12% 1.17% 1.18% 1.14% 1.15%
Net investment income 3.26%(2) 3.11% 3.75% 4.78% 4.27% 3.70%
Portfolio turnover 75%(3) 152% 141% 79% 91% 94%
Average commission rate paid(5) $0.0585 $0.0661 $0.0619 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 7/15/94
4/30/98 YEAR ENDED OCTOBER 31, TO
(UNAUDITED) 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.43 $ 19.20 $ 18.17 $ 17.55 $ 17.59
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26 0.46(4) 0.55(4) 0.70(4) 0.15
Net realized and unrealized gain (loss) 0.85 2.52 1.68 1.07 (0.06)
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 1.11 2.98 2.23 1.77 0.09
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.23) (0.49) (0.62) (0.96) (0.13)
Dividends from net realized gains (2.54) (1.26) (0.58) (0.19) --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (2.77) (1.75) (1.20) (1.15) (0.13)
--------- --------- --------- --------- ---------
Change in net asset value (1.66) 1.23 1.03 0.62 (0.04)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 18.77 $ 20.43 $ 19.20 $ 18.17 $ 17.55
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(1) 6.42%(3) 16.49% 12.72% 10.59% 0.49%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $8,608 $8,063 $5,947 $3,715 $856
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.88%(2) 1.87% 1.92% 1.95% 1.83%(2)
Net investment income 2.50%(2) 2.33% 2.95% 3.92% 3.29%(2)
Portfolio turnover 75%(3) 152% 141% 79% 91%
Average commission rate paid(5) $0.0585 $0.0661 $0.0619 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in 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.
18 See Notes to Financial Statements
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
INVESTOR PROFILE
Phoenix Growth Fund is designed for investors seeking long-term capital
appreciation.
INVESTMENT ADVISER'S REPORT
Aided by a strong U.S. equity market, the Phoenix Growth Fund posted
double-digit gains over this latest fiscal reporting period. For the six-month
reporting cycle ended April 30, 1998, Class A shares returned 17.05% and Class B
shares earned 16.65%. During the same period, the Standard & Poor's 500
Composite Index* returned 22.47%, and the average return for 951 growth funds
was 17.35%, according to Lipper Analytical Services, Inc. All performance
figures assume reinvestment of dividends and exclude the effect of sales
charges.
Positive contributors to performance during this latest reporting cycle
included the Fund's overweighted position in the "red-hot" health-care sector as
well as strong stock selection in capital goods, consumer staples, and financial
services. Individual holdings that produced stellar gains included such names as
Pfizer, HBO & Company, Gillette, BMC Software and Tyco International. On the
other side of the equation, negative contributors over the last six months
included the portfolio's exposure to the poorly performing energy group and
weakness in some of our technology and consumer cyclical holdings.
OUTLOOK
Looking ahead, we expect economic growth to moderate later in the year as the
impact of the Asian crisis begins to take hold in the United States. Although we
expect a slowdown in the U.S. economy, we do not foresee a recession on the
immediate horizon. As it relates to the stock market, we believe that corporate
profit growth will continue to slow, creating a challenging earnings environment
for investors and further fueling volatility and rotation in the market.
Specific to the Phoenix Growth Fund, we are maintaining our overweighted
positions in health-care and technology and are pleased with the recent strong
performance we received from these two sectors. Because of the current
speculative merger and acquisition environment in the financial services arena,
we believe that some in the group have become overbought, and we have elected to
selectively take profits in this sector. Lastly, given the attractive
risk/reward opportunities in the energy group, it is our intention to add to
these stocks as crude oil prices begin to show further signs of stabilization.
* The S&P 500 Index is an unmanaged, commonly used measure of stock market
performance. The Index is not available for direct investment.
19
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
------------- ----------------
<S> <C> <C> <C>
COMMON STOCKS--90.8%
AEROSPACE/DEFENSE--1.8%
Boeing Co....................................................... 1,018,000 $ 50,963,625
----------------
BANKS (MAJOR - REGIONAL)--4.4%
Banc One Corp................................................... 458,920 26,990,232
BankBoston Corp................................................. 189,400 20,443,362
Mellon Bank Corp................................................ 182,600 13,147,200
NationsBank Corp................................................ 375,900 28,474,425
U.S. Bancorp.................................................... 276,700 35,140,900
----------------
124,196,119
----------------
BANKS (MONEY CENTER)--2.4%
BankAmerica Corp................................................ 304,300 25,865,500
Citicorp........................................................ 132,700 19,971,350
NDB Bancorp, Inc................................................ 223,100 20,720,412
----------------
66,557,262
----------------
BROADCASTING (TELEVISION, RADIO, & CABLE)--2.7%
CBS Corporation................................................. 1,305,700 46,515,562
Chancellor Media Corp. (b)...................................... 639,900 30,355,256
----------------
76,870,818
----------------
CHEMICALS--1.4%
Monsanto Co..................................................... 765,600 40,481,100
----------------
CHEMICALS (SPECIALTY)--0.7%
Solutia, Inc.................................................... 684,200 19,414,175
----------------
COMMUNICATIONS EQUIPMENT--0.6%
Ciena Corp. (b)................................................. 301,400 16,803,050
----------------
COMPUTERS (HARDWARE)--5.0%
International Business Machines Corp............................ 1,204,400 139,559,850
----------------
COMPUTERS (NETWORKING)--0.9%
Cisco Systems, Inc. (b)......................................... 341,400 25,007,550
----------------
COMPUTERS (PERIPHERALS)--0.8%
EMC Corp. (b)................................................... 480,500 22,163,062
----------------
COMPUTERS (SOFTWARE & SERVICES)--7.6%
America Online, Inc. (b)........................................ 103,800 8,304,000
BMC Software, Inc. (b).......................................... 625,900 58,560,769
Comdisco, Inc................................................... 327,900 14,509,575
Computer Associates International............................... 776,100 45,450,356
Compuware Corp. (b)............................................. 1,166,900 57,032,237
Edwards (J.D.) & Co. (b)........................................ 460,500 16,405,312
Sterling Commerce............................................... 319,700 13,607,231
----------------
213,869,480
----------------
<CAPTION>
SHARES VALUE
------------- ----------------
<S> <C> <C> <C>
CONSUMER FINANCE--1.2%
American Express Co............................................. 135,600 $ 13,831,200
Household International, Inc.................................... 158,300 20,806,556
----------------
34,637,756
----------------
DISTRIBUTORS (FOOD & HEALTH)--1.2%
Cardinal Health, Inc............................................ 347,500 33,446,875
----------------
ELECTRICAL EQUIPMENT--1.6%
General Electric Co............................................. 516,900 44,001,112
----------------
ELECTRONICS (INSTRUMENTATION)--0.6%
Linear Technology Corp.......................................... 196,100 15,786,050
----------------
ELECTRONICS (SEMICONDUCTORS)--1.0%
Intel Corp. (b)................................................. 345,600 27,928,800
----------------
ENTERTAINMENT--1.5%
Liberty Media Group (b)......................................... 1,240,600 41,172,413
----------------
FINANCIAL (DIVERSIFIED)--1.7%
American General Corp........................................... 92,600 6,169,475
FHLMC........................................................... 902,500 41,797,031
----------------
47,966,506
----------------
HEALTH CARE (DIVERSIFIED)--4.4%
Bristol-Myers Squibb Co......................................... 603,000 63,842,625
Warner-Lambert Co............................................... 316,600 59,896,763
----------------
123,739,388
----------------
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS)--4.3%
Pfizer, Inc..................................................... 523,000 59,523,937
Schering Plough Corp............................................ 347,900 27,875,488
Watson Pharmaceuticals, Inc. (b)................................ 789,700 33,957,100
----------------
121,356,525
----------------
HEALTH CARE (HOSPITAL MANAGEMENT)--2.6%
HBO & Co........................................................ 887,700 53,095,556
Tenet Healthcare Corp........................................... 532,700 19,942,956
----------------
73,038,512
----------------
HEALTH CARE (LONG TERM CARE)--1.5%
Healthsouth Corp. (b)........................................... 1,380,700 41,679,881
----------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.3%
Guidant Corp.................................................... 421,100 28,161,063
Medtronic, Inc.................................................. 681,700 35,874,463
----------------
64,035,526
----------------
HOUSEHOLD FURN. & APPLIANCES--0.1%
Sunbeam Corp., Inc.............................................. 130,900 3,288,863
----------------
</TABLE>
20 See Notes to Financial Statements
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------------- ----------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.3%
<S> <C> <C> <C>
Colgate-Palmolive Co............................................ 405,400 $ 36,359,313
----------------
INSURANCE (LIFE/HEALTH)--0.8%
UNUM Corp....................................................... 397,000 21,338,750
----------------
INSURANCE (MULTI-LINE)--2.7%
American International Group, Inc............................... 221,000 29,075,313
Reliastar Financial Corp........................................ 292,100 13,327,063
Travelers Group, Inc............................................ 551,300 33,732,669
----------------
76,135,045
----------------
INSURANCE (PROPERTY - CASUALTY)--1.3%
Allstate Corp................................................... 370,200 35,631,750
----------------
MACHINERY (DIVERSIFIED)--1.5%
Deere & Co...................................................... 489,900 28,628,531
Thermo Electron Corp............................................ 338,100 13,460,606
----------------
42,089,137
----------------
MANUFACTURING (DIVERSIFIED)--1.5%
Tyco International Ltd.......................................... 750,700 40,913,150
----------------
OIL & GAS (DRILLING & EQUIPMENT)--4.5%
Cooper Cameron Corp. (b)........................................ 222,800 14,802,275
Diamond Offshore Drilling, Inc.................................. 474,000 23,996,250
Halliburton Co.................................................. 534,900 29,419,500
Schlumberger Ltd................................................ 431,100 35,727,413
Transocean Offshore, Inc........................................ 422,400 23,601,600
----------------
127,547,038
----------------
OIL & GAS (REFINING & MARKETING)--1.6%
Tosco Corp...................................................... 1,249,800 44,524,125
----------------
PAPER & FOREST PRODUCTS--0.8%
International Paper Co.......................................... 428,600 22,367,563
----------------
PERSONAL CARE--1.9%
Gillette Co..................................................... 462,700 53,412,931
----------------
RETAIL (BUILDING SUPPLIES)--1.4%
Home Depot, Inc................................................. 578,700 40,291,988
----------------
RETAIL (DRUG STORES)--3.7%
CVS Corp........................................................ 674,700 49,759,125
Rite Aid Corp................................................... 1,679,100 53,941,088
----------------
103,700,213
----------------
RETAIL (FOOD CHAINS)--2.3%
Safeway, Inc.................................................... 1,728,500 66,115,125
----------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------- ----------------
<S> <C> <C> <C>
RETAIL (GENERAL MERCHANDISE)--4.0%
Borders Group, Inc. (b)......................................... 610,000 $ 19,596,250
Consolidated Stores Corp. (b)................................... 1,038,400 41,536,000
Fred Meyer, Inc. (b)............................................ 492,680 22,109,015
Staples, Inc. (b) .............................................. 1,119,000 27,625,313
----------------
110,866,578
----------------
RETAIL (SPECIALTY-APPAREL)--0.6%
TJX Co., Inc.................................................... 365,200 16,160,100
----------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--2.9%
Airtouch Communications, Inc. (b)............................... 1,524,200 80,973,125
----------------
TELECOMMUNICATIONS (LONG DISTANCE)--3.9%
AT&T Corp....................................................... 1,367,300 82,123,456
MCI Communications Corp......................................... 521,400 26,232,938
----------------
108,356,394
----------------
WASTE MANAGEMENT--1.8%
U.S.A. Waste Services Inc. (b).................................. 1,044,800 51,260,500
----------------
TOTAL COMMON STOCKS
(Identified cost $2,063,290,360)............................................................ 2,546,007,123
----------------
FOREIGN COMMON STOCKS--4.9%
BIOTECHNOLOGY--0.6%
Elan PLC Sponsored ADR (Ireland) (b)............................ 265,900 16,519,037
----------------
HOUSEHOLD FURN. & APPLIANCES--2.7%
Philips Electronics NV ADR NY Registered (Netherlands).......... 849,500 76,455,000
----------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.5%
Telefonaktiebolaget LM Ericsson ADR (Sweden).................... 257,300 13,234,869
----------------
TELEPHONE--1.1%
Telecom Brasil ADR (Brazil)..................................... 268,400 32,694,475
----------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $97,335,197)............................................................... 138,903,381
----------------
TOTAL LONG-TERM INVESTMENTS--95.7%
(Identified cost $2,160,625,557)............................................................ 2,684,910,504
----------------
</TABLE>
See Notes to Financial Statements 21
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------------- ----------------
SHORT-TERM OBLIGATIONS--3.2%
<S> <C> <C> <C>
COMMERCIAL PAPER--3.1%
Deutsche Bank Financial 5.50%, 5/1/98..................... A-1+ $ 5,415 $ 5,415,000
AlliedSignal, Inc. 5.50%, 5/4/98.......................... A-1 1,827 1,826,163
SBC Communications Inc. 5.50%, 5/4/98..................... A-1+ 11,150 11,144,890
AlliedSignal, Inc. 5.51%, 5/5/98.......................... A-1 10,991 10,981,052
Anheuser-Busch Cos., Inc. 5.45%, 5/6/98................... A-1 7,885 7,879,031
Cargill, Inc. 5.48%, 5/7/98............................... A-1+ 10,000 9,990,867
Procter & Gamble Co. 5.53%, 5/8/98........................ A-1+ 6,010 6,003,537
Private Export Funding Corp. 5.50%, 5/15/98............... A-1+ 7,000 6,985,028
General Electric Capital Corp. 5.51%, 5/18/98............. A-1+ 15,000 15,000,000
Greenwich Funding Corp. 5.52%, 5/22/98.................... A-1+ 2,872 2,862,752
General Re Corp. 5.5%, 6/4/98............................. A-1+ 5,000 4,974,028
Corporate Asset Funding Co., Inc. 5.50%, 6/11/98.......... A-1+ 1,650 1,650,000
CXC, Inc. 5.52%, 6/12/98.................................. A-1+ 3,700 3,676,172
----------------
88,388,520
----------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000) VALUE
------------- ----------------
<S> <C> <C> <C>
FEDERAL AGENCY SECURITIES--0.1%
FFCB 6.02%, 1/22/99....................................... $ 1,500 $ 1,504,026
----------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $89,883,183)................................................................... 89,892,546
----------------
TOTAL INVESTMENTS--98.9%
(Identified cost $2,250,508,740)................................................................ 2,774,803,050(a)
Cash and receivables, less liabilities--1.1%.................................................... 29,605,160
----------------
NET ASSETS--100.0%................................................................................ $2,804,408,210
----------------
----------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $536,161,491 and gross
depreciation of $11,867,181 for federal income tax purposes. At April 30,
1998, the aggregate cost of securities for federal income tax purposes was
$2,250,508,740.
(b) Non-income producing.
22 See Notes to Financial Statements
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $2,250,508,740) $ 2,774,803,050
Short-term investments held as collateral for loaned
securities 18,382,410
Cash 929
Receivables
Investment securities sold 37,627,030
Dividends and interest 2,211,946
Fund shares sold 465,965
----------------
Total assets 2,833,491,330
----------------
LIABILITIES
Payables
Collateral on securities loaned 18,382,410
Investment securities purchased 4,430,347
Fund shares repurchased 3,302,390
Investment advisory fee 1,498,211
Distribution fee 621,460
Transfer agent fee 468,274
Financial agent fee 44,811
Trustees' fees 9,301
Accrued expenses 325,916
----------------
Total liabilities 29,083,120
----------------
NET ASSETS $ 2,804,408,210
----------------
----------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 2,012,033,625
Undistributed net investment loss (1,093,928)
Accumulated net realized gain 269,174,203
Net unrealized appreciation 524,294,310
----------------
NET ASSETS $ 2,804,408,210
----------------
----------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,724,718,194) 104,546,666
Net asset value per share $26.06
Offering price per share
$26.06/(1-4.75%) $27.36
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $79,690,016) 3,114,359
Net asset value and offering price per share $25.59
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 11,011,413
Interest 2,044,135
Security lending 102,257
--------------
Total investment income 13,157,805
--------------
EXPENSES
Investment advisory fee 8,548,066
Distribution fee--Class A 3,162,529
Distribution fee--Class B 356,961
Financial agent fee 258,084
Transfer agent 1,674,032
Printing 90,098
Custodian 65,603
Professional 27,575
Registration 21,983
Trustees 10,674
Miscellaneous 36,128
--------------
Total expenses 14,251,733
--------------
NET INVESTMENT LOSS (1,093,928)
--------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on securities 269,652,886
Net change in unrealized appreciation on investments 152,247,025
--------------
NET GAIN ON INVESTMENTS 421,899,911
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 420,805,983
--------------
--------------
</TABLE>
See Notes to Financial Statements 23
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
---------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (1,093,928) $ 12,828,128
Net realized gain 269,652,886 499,286,602
Net change in unrealized appreciation (depreciation) 152,247,025 37,069,225
---------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 420,805,983 549,183,955
---------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- (17,472,939)
Net investment income--Class B -- (64,123)
Net realized gains--Class A (484,983,916) (395,993,712)
Net realized gains--Class B (13,740,399) (8,267,051)
---------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (498,724,315) (421,797,825)
---------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (9,084,861 and 10,576,129 shares, respectively) 222,514,713 270,447,275
Net asset value of shares issued from reinvestment of distributions
(20,476,785 and 16,237,740 shares, respectively) 450,490,561 381,717,419
Cost of shares repurchased (15,508,431 and 23,676,500 shares, respectively) (391,022,230) (604,530,141)
---------------- -----------------
Total 281,983,044 47,634,553
---------------- -----------------
CLASS B
Proceeds from sales of shares (401,311 and 938,817 shares, respectively) 9,716,175 23,549,010
Net asset value of shares issued from reinvestment of distributions
(580,369 and 325,555 shares, respectively) 12,570,786 7,574,359
Cost of shares repurchased (340,191 and 493,546 shares, respectively) (8,254,450) (12,629,905)
---------------- -----------------
Total 14,032,511 18,493,464
---------------- -----------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 296,015,555 66,128,017
---------------- -----------------
NET INCREASE IN NET ASSETS 218,097,223 193,514,147
NET ASSETS
Beginning of period 2,586,310,987 2,392,796,840
---------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) OF
($1,093,928) AND $0, RESPECTIVELY) $ 2,804,408,210 $ 2,586,310,987
---------------- -----------------
---------------- -----------------
</TABLE>
24 See Notes to Financial Statements
<PAGE>
PHOENIX GROWTH FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.83 $ 26.87 $ 24.92 $ 21.24 $ 21.53 $ 20.76
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.01)(4) 0.14(4) 0.20(4) 0.26 0.26 0.32
Net realized and unrealized gain (loss) 3.74 5.62 3.63 4.53 0.17 1.15
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 3.73 5.76 3.83 4.79 0.43 1.47
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.21) (0.25) (0.30) (0.24) (0.32)
Dividends from net realized gains (5.50) (4.59) (1.63) (0.81) (0.48) (0.38)
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (5.50) (4.80) (1.88) (1.11) (0.72) (0.70)
--------- --------- --------- --------- --------- ---------
Change in net asset value (1.77) 0.96 1.95 3.68 (0.29) 0.77
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 26.06 $ 27.83 $ 26.87 $ 24.92 $ 21.24 $ 21.53
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 17.05%(3) 24.81% 16.34% 23.91% 2.06% 7.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,724,718 $2,518,289 $2,347,471 $2,300,251 $2,140,458 $2,563,442
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.08%(2) 1.10% 1.17% 1.20% 1.19% 1.18%
Net investment income (loss) (0.07%)(2) 0.53% 0.80% 0.92% 1.22% 1.55%
Portfolio turnover 68%(3) 196% 116% 109% 118% 176%
Average commission rate paid(6) $0.0500 $0.0518 $0.0534 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 7/15/94
4/30/98 YEAR ENDED OCTOBER 31, TO
(UNAUDITED) 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.51 $ 26.63 $ 24.74 $ 21.19 $ 20.48
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.10)(4) (0.06)(4) --(4) --(4) 0.01
Net realized and unrealized gain (loss) 3.68 5.57 3.61 4.60 0.70
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 3.58 5.51 3.61 4.60 0.71
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.04) (0.09) (0.24) --
Dividends from net realized gains (5.50) (4.59) (1.63) (0.81) --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (5.50) (4.63) (1.72) (1.05) --
--------- --------- --------- --------- ---------
Change in net asset value (1.92) 0.88 1.89 3.55 0.71
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 25.59 $ 27.51 $ 26.63 $ 24.74 $ 21.19
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(1) 16.65%(3) 23.89% 15.48% 23.02% 3.47%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $79,690 $68,022 $45,326 $20,111 $2,966
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.83%(2) 1.85% 1.93% 1.97% 1.87%(2)
Net investment income (loss) (0.81%)(2) (0.25%) 0.01% 0.01% 0.32%(2)
Portfolio turnover 68%(3) 196% 116% 109% 118%
Average commission rate paid(6) $0.0500 $0.0518 $0.0534 N/A N/A
</TABLE>
(1) Maximum sales load is not reflected in 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>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------------
INVESTOR PROFILE
Phoenix Aggressive Growth Fund is designed for long-term investors who are
willing to assume above-average risk in return for above-average capital growth
potential.
INVESTMENT ADVISER'S REPORT
For the six months ended April 30, 1998, Phoenix Aggressive Growth Fund Class
A shares returned 16.53% and Class B shares earned 16.20% compared with 9.95%
for the Russell 2000 Growth Index.* All performance figures assume reinvestment
of dividends and exclude the effect of sales charges. Small company investing
involves added risks, including greater price volatility, less liquidity, and
increased competitive threat.
In the final two months of 1997, there was a "flight to quality" as the market
reacted to events in Southeast Asia. The Fund's performance was held back during
this time by its small- to mid-cap focus as well as its overweighted position in
oil service stocks.
In January, a management change was made to a team approach led by Roger
Engemann. The team uses a top-down approach to identify attractive sectors of
the market and a bottom-up approach to stock selection.
During 1998, the Fund's oil service holdings were liquidated, and the proceeds
used to increase the portfolio's weighting in the health-care sector,
communication services, and consumer cyclicals. We also reduced our weightings
in financial services, energy, and basic materials. As a result, our cash
position is currently higher than average as we continue to opportunistically
look for attractive values.
OUTLOOK
We expect the market to continue to be volatile due to uncertainties over the
impact the Asian "crisis" will have, particularly on technology stocks. Our
emphasis will be on sectors of the economy and individual firms that have
minimal exposure to Asia and the aftereffects.
Stock selection will center on companies with a domestic focus, a high degree
of earnings predictability, and fast-growing earnings and revenue streams.
Industries with these characteristics include retailers, telecommunication
equipment and service, and information technology service. Health-care is also
an attractive sector, particularly pharmaceuticals and medical technology
companies.
* The Russell 2000 Growth Index is an unmanaged, commonly used measure of
performance of small-capitalization stocks with above- average growth
orientation. The Index is not available for direct investment.
26
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------
<S> <C> <C>
COMMON STOCKS--95.6%
AEROSPACE/DEFENSE--0.9%
Boeing Co.............................................. 50,000 $ 2,503,125
---------------
AIRLINES--0.4%
Southwest Airlines Co.................................. 45,000 1,234,687
---------------
BANKS (MAJOR REGIONAL)--2.0%
Firstar Corp........................................... 35,000 1,305,937
Huntington Bancshares, Inc............................. 40,000 1,422,500
NationsBank Corp....................................... 40,000 3,030,000
---------------
5,758,437
---------------
BANKS (MONEY CENTER)--2.3%
Chase Manhattan Corp................................... 25,000 3,464,062
Morgan (J.P.) & Co., Inc............................... 25,000 3,281,250
---------------
6,745,312
---------------
BEVERAGES (NON-ALCOHOLIC)--2.1%
PepsiCo, Inc........................................... 150,000 5,953,125
---------------
BIOTECHNOLOGY--1.5%
Centocor, Inc. (b)..................................... 100,000 4,218,750
---------------
BROADCASTING (TELEVISION, RADIO, & CABLE)--4.9%
Clear Channels Communications, Inc. (b)................ 60,000 5,655,000
Univision Communications, Inc. Class A (b)............. 160,000 6,130,000
USA Networks, Inc. (b)................................. 100,000 2,456,250
---------------
14,241,250
---------------
COMMUNICATIONS EQUIPMENT--6.9%
Ascend Communications, Inc. (b)........................ 70,000 3,049,375
Ciena Corp. (b)........................................ 55,000 3,066,250
MRV Communications, Inc. (b)........................... 100,000 2,687,500
Nextel Communications, Inc. Class A (b)................ 100,000 2,868,750
Pairgain Technologies, Inc. (b)........................ 250,000 4,609,375
Tellabs, Inc. (b)...................................... 55,000 3,898,125
---------------
20,179,375
---------------
COMPUTERS (PERIPHERALS)--0.5%
Seagate Technology, Inc. (b)........................... 55,000 1,467,812
---------------
COMPUTERS (SOFTWARE & SERVICES)--11.0%
America Online, Inc. (b)............................... 40,000 3,200,000
Aspect Development, Inc. (b)........................... 30,000 1,899,375
Cambridge Technology Partners, Inc. (b)................ 60,000 3,135,000
Computer Associates International, Inc................. 50,000 2,928,125
Edwards (J.D.) & Co. (b)............................... 75,000 2,681,250
HNC Software, Inc. (b)................................. 80,000 3,120,000
Manugistics Group, Inc. (b)............................ 35,000 2,100,000
Mastech Corp. (b)...................................... 225,000 5,962,500
Network Associates, Inc. (b)........................... 50,000 3,425,000
PeopleSoft, Inc. (b)................................... 75,000 3,487,500
---------------
31,938,750
---------------
<CAPTION>
SHARES VALUE
---------- ---------------
<S> <C> <C>
CONSUMER FINANCE--1.5%
American Express Co.................................... 25,000 $ 2,550,000
Providian Financial Corp............................... 30,000 1,805,625
---------------
4,355,625
---------------
ELECTRONICS (INSTRUMENTATION)--1.1%
Vitesse Semiconductor Corp. (b)........................ 55,000 3,172,812
---------------
ELECTRONICS (SEMICONDUCTORS)--5.6%
Etec Systems, Inc. (b)................................. 30,000 1,702,500
Intel Corp............................................. 45,000 3,636,562
Micron Technology, Inc. (b)............................ 75,000 2,329,687
Texas Instruments, Inc................................. 65,000 4,164,062
Uniphase Corp (b)...................................... 40,000 2,170,000
Xilinx, Inc. (b)....................................... 50,000 2,287,500
---------------
16,290,311
---------------
ENTERTAINMENT--0.9%
Royal Caribbean Cruises Ltd............................ 40,000 2,735,000
---------------
FINANCIAL (DIVERSIFIED)--3.9%
Countrywide Credit Industries, Inc..................... 65,000 3,144,375
FHLMC.................................................. 115,000 5,325,938
FNMA................................................... 50,000 2,993,750
---------------
11,464,063
---------------
HEALTH CARE (DIVERSIFIED)--2.9%
American Home Products Corp............................ 30,000 2,793,750
Johnson & Johnson...................................... 40,000 2,855,000
Warner-Lambert Co...................................... 15,000 2,837,813
---------------
8,486,563
---------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--5.5%
Lilly (Eli) & Co....................................... 80,000 5,565,000
Merck & Company, Inc................................... 40,000 4,820,000
Pfizer, Inc............................................ 50,000 5,690,625
---------------
16,075,625
---------------
HEALTH CARE (HOSPITAL MANAGEMENT)--3.6%
HBO & Co............................................... 175,000 10,467,188
---------------
HEALTH CARE (LONG TERM CARE)--0.2%
Balanced Care Corp. (b)................................ 75,000 618,750
---------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.9%
Guidant Corp........................................... 65,000 4,346,875
Medtronic, Inc......................................... 75,000 3,946,875
---------------
8,293,750
---------------
HOUSEHOLD FURN. & APPLIANCES--1.0%
Pier 1 Imports, Inc.................................... 115,000 3,033,125
---------------
INVESTMENT BANKING/BROKERAGE--0.6%
Merrill Lynch & Co., Inc............................... 20,000 1,755,000
---------------
</TABLE>
See Notes to Financial Statements 27
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------
MANUFACTURING (DIVERSIFIED)--2.3%
<S> <C> <C>
AlliedSignal, Inc...................................... 75,000 $ 3,285,938
United Technologies Corp............................... 35,000 3,445,313
---------------
6,731,251
---------------
OIL & GAS (DRILLING & EQUIPMENT)--1.0%
Transocean Offshore, Inc............................... 50,000 2,793,750
---------------
RAILROADS--1.2%
Kansas City Southern Industries, Inc................... 80,000 3,615,000
---------------
RESTAURANTS--0.7%
CKE Restaurants, Inc................................... 55,000 1,904,375
---------------
RETAIL (BUILDING SUPPLIES)--1.2%
Lowe's Companies, Inc.................................. 50,000 3,496,875
---------------
RETAIL (DRUG STORES)--1.0%
Walgreen Co............................................ 80,000 2,760,000
---------------
RETAIL (GENERAL MERCHANDISE)--5.1%
Bed, Bath & Beyond, Inc. (b)........................... 65,000 3,201,250
Consolidated Stores Corp. (b).......................... 120,000 4,800,000
Kmart Corp. (b)........................................ 300,000 5,231,250
Sears Roebuck & Co..................................... 25,000 1,482,813
---------------
14,715,313
---------------
SERVICES (ADVERTISING/MARKETING)--0.6%
Ziff-Davis, Inc. (b)................................... 101,400 1,825,200
---------------
SERVICES (COMMERCIAL & CONSUMER)--5.4%
Cendant Corp. (b)...................................... 625,000 15,625,000
---------------
SERVICES (COMPUTER SYSTEMS)--0.9%
Brightstar Information Technology Group, Inc. (b)...... 175,000 2,734,375
---------------
SERVICES (DATA PROCESSING)--2.1%
First Data Corp........................................ 180,000 6,097,500
---------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.8%
Airtouch Communications, Inc. (b)...................... 100,000 5,312,500
---------------
TELECOMMUNICATIONS (EQUIPMENT)--2.6%
Lucent Technologies, Inc............................... 100,000 7,612,500
---------------
TELECOMMUNICATIONS (LONG DISTANCE)--3.4%
Intermedia Communications, Inc. (b).................... 45,000 3,284,297
Pacific Gateway Exchange, Inc. (b)..................... 40,000 2,280,000
Star Telecommunication, Inc. (b)....................... 164,000 4,438,250
---------------
10,002,547
---------------
<CAPTION>
SHARES VALUE
---------- ---------------
<S> <C> <C>
TELEPHONE--3.2%
ICG Communications, Inc. (b)........................... 150,000 $ 5,250,000
Qwest Communications International, Inc. (b)........... 80,000 3,085,000
US LEC Corp. (b)....................................... 35,000 848,750
---------------
9,183,750
---------------
TOBACCO--0.9%
Philip Morris Companies, Inc........................... 73,000 2,723,813
---------------
TOTAL COMMON STOCKS
(Identified cost $227,187,172).......................................... 278,122,184
---------------
FOREIGN COMMON STOCKS--0.4%
COMPUTER (SOFTWARE & SERVICES)--0.4%
CBT Group PLC (b) (Ireland)............................ 25,000 1,271,875
---------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,382,644)............................................ 1,271,875
---------------
TOTAL LONG-TERM INVESTMENTS --96.0%
(Identified cost $228,569,816........................................... 279,394,059
---------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
-------------- ----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--4.9%
COMMERCIAL PAPER--4.8%
Marsh & McLennan Cos., Inc. 5.52%,
5/1/98................................... A-1+ $ 6,390 6,390,000
AlliedSignal, Inc. 5.50%, 5/4/98........... A-1 1,855 1,854,150
Goldman Sachs & Co. 5.50% 5/5/98........... A-1+ 655 654,596
Procter & Gamble Co. 5.53%, 5/8/98......... A-1+ 4,985 4,979,640
---------------
13,878,386
---------------
FEDERAL AGENCY SECURITIES--0.1%
FHLMC 5.43%, 5/7/98........................................ 430 429,610
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $14,307,996).............................................. 14,307,996
---------------
TOTAL INVESTMENTS --100.9%
(Identified cost $242,877,812)............................................. 293,702,055(a)
Cash and receivables, less liabilities--(0.9%)............................. (2,711,458)
---------------
NET ASSETS--100.0%........................................................... $290,990,597
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $54,218,530 and gross
depreciation of $3,394,287 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$242,993,148.
(b) Non-income producing.
28 See Notes to Financial Statements
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $242,877,812) $ 293,702,055
Short-term investments held as collateral for loaned
securities 9,420,640
Cash 4,162
Receivables
Investment securities sold 1,026,434
Fund shares sold 207,763
Dividend and interest 96,687
--------------
Total assets 304,457,741
--------------
LIABILITIES
Payables
Collateral on securities loaned 9,420,640
Investment securities purchased 3,148,993
Fund shares repurchased 538,210
Investment advisory fee 169,036
Distribution fee 70,172
Financial agent fee 11,467
Transfer agent fee 2,129
Trustees' fee 1,760
Accrued expenses 104,737
--------------
Total liabilities 13,467,144
--------------
NET ASSETS $ 290,990,597
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 234,450,650
Undistributed net investment loss (157,270)
Accumulated net realized gain 5,872,974
Net unrealized appreciation 50,824,243
--------------
NET ASSETS $ 290,990,597
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $274,831,065) 17,254,688
Net asset value per share $15.93
Offering price per share
$15.93/(1-4.75%) $16.72
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $16,159,532) 1,052,831
Net asset value and offering price per share $15.35
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 953,605
Dividends 460,125
Securitiy lending 63,550
-------------
Total investment income 1,477,280
-------------
EXPENSES
Investment advisory fee 938,425
Distribution fee--Class A 317,288
Distribution fee--Class B 71,456
Financial Agent Fee 64,534
Transfer agent 118,666
Custodian 67,161
Professional 20,639
Registration 13,565
Printing 11,978
Trustees 9,674
Miscellaneous 1,164
-------------
Total expenses 1,634,550
-------------
NET INVESTMENT LOSS (157,270)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 6,209,733
Net change in unrealized appreciation on investments 35,830,424
-------------
NET GAIN ON INVESTMENTS 42,040,157
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,882,887
-------------
-------------
</TABLE>
See Notes to Financial Statements 29
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (157,270) $ (1,405,570)
Net realized gain 6,209,733 54,155,507
Net change in unrealized appreciation (depreciation) 35,830,424 (8,722,108)
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 41,882,887 44,027,829
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains--Class A (49,279,463) (33,833,409)
Net realized gains--Class B (2,802,392) (1,733,847)
-------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (52,081,855) (35,567,256)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sale of shares (1,335,815 and 4,764,191 shares, respectively) 20,017,189 76,429,442
Net asset value of shares issued from reinvestment of distributions
(3,394,334 and 2,152,050 shares, repectively) 45,790,717 31,462,960
Cost of shares repurchased (1,779,307 and 6,476,002 shares, respectively) (27,421,916) (103,491,166)
-------------- -----------------
Total 38,385,990 4,401,236
-------------- -----------------
CLASS B
Proceeds from sale of shares (310,246 and 787,300 shares, respectively) 4,504,106 12,236,599
Net asset value of shares issued from reinvestment of distributions
(193,821 and 104,654 shares, respectively) 2,527,426 1,500,729
Cost of shares repurchased (263,607 and 711,043 shares, respectively) (3,841,482) (10,939,843)
-------------- -----------------
Total 3,190,050 2,797,485
-------------- -----------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 41,576,040 7,198,721
-------------- -----------------
NET INCREASE IN NET ASSETS 31,377,072 15,659,294
NET ASSETS
Beginning of period 259,613,525 243,954,231
-------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT LOSS OF
($157,270) AND $0, RESPECTIVELY) $290,990,597 $ 259,613,525
-------------- -----------------
-------------- -----------------
</TABLE>
30 See Notes to Financial Statements
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.20 $ 16.84 $ 16.51 $ 13.33 $ 14.56 $ 13.56
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.01)(4) (0.08)(4) (0.13)(4) 0.06(4) 0.27 0.22
Net realized and unrealized gain (loss) 2.22 2.95 2.64 4.21 (0.21) 1.62
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 2.21 2.87 2.51 4.27 0.06 1.84
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- (0.02) (0.19) (0.22) (0.23)
Dividends from net realized gains (3.48) (2.51) (2.16) (0.90) (1.07) (0.61)
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (3.48) (2.51) (2.18) (1.09) (1.29) (0.84)
--------- --------- --------- --------- --------- ---------
Change in net asset value (1.27) 0.36 0.33 3.18 (1.25) 1.00
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 15.93 $ 17.20 $ 16.84 $ 16.51 $ 13.33 $ 14.56
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 16.53%(3) 19.67% 17.43% 35.14% 0.37% 14.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $274,831 $246,002 $233,488 $180,288 $140,137 $143,035
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.18%(2) 1.20% 1.20% 1.29% 1.26% 1.17%
Net investment income (loss) (0.08)%(2) (0.53)% (0.81)% 0.43% 1.97% 1.58%
Portfolio turnover 472%(3) 518% 401% 331% 306% 192%
Average commission rate paid(6) $0.0549 $0.0586 $0.0655 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 7/21/94
4/30/98 YEAR ENDED OCTOBER 31, TO
(UNAUDITED) 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.76 $ 16.57 $ 16.38 $ 13.31 $ 13.09
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.06)(4) (0.20)(4) (0.25)(4) (0.12)(4) 0.02
Net realized and unrealized gain (loss) 2.13 2.90 2.60 4.26 0.20
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 2.07 2.70 2.35 4.14 0.22
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- (0.17) --
Dividends from net realized gains (3.48) (2.51) (2.16) (0.90) --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (3.48) (2.51) (2.16) (1.07) --
--------- --------- --------- --------- ---------
Change in net asset value (1.41) 0.19 0.19 3.07 0.22
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 15.35 $ 16.76 $ 16.57 $ 16.38 $ 13.31
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(1) 16.20%(3) 18.70% 16.52% 34.15% 1.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $16,160 $13,611 $10,466 $2,393 $330
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.93%(2) 1.96% 1.95% 2.04% 1.81%(2)
Net investment income (loss) (0.83)%(2) (1.28)% (1.57)% (0.83)% 1.45%(2)
Portfolio turnover 472%(3) 518% 401% 331% 306%
Average commission rate paid(6) $0.0549 $0.0586 $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 31
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ----------------------------------------------------------------
INVESTOR PROFILE
Phoenix High Yield Fund is designed for aggressive investors seeking high
current income as well as the potential for long-term capital appreciation.
INVESTMENT ADVISER'S REPORT
The Phoenix High Yield Fund continued to provide investors with above-average
returns versus the high yield universe. For the six months ended April 30, 1998,
Class A shares returned 7.56% and Class B shares earned 7.25% compared with a
return of 5.47% for the CS First Boston High Yield Index.* All performance
figures assume reinvestment of dividends and exclude the effect of sales
charges. High yielding fixed-income securities generally are subject to greater
market fluctuations and risk of loss of income and principal than are
investments in lower yielding fixed-income securities. Foreign investing
involves special risks, such as currency fluctuation, less public disclosure,
and economic and political risks.
The Fund's positive performance in late 1997 and early 1998 was driven by its
overweighted position in telecommunications, energy, and media/entertainment. We
have maintained close to 35% exposure to the international sector, with an
emphasis on higher quality companies in non-emerging countries, particularly
companies domiciled in Europe. We avoided much of the turmoil in the emerging
markets due to a lack of exposure in the Asian countries.
The domestic high yield market remains relatively attractive compared with
other fixed-income alternatives, given continued support from a strong economy
and demand for higher yields by investors. In addition, the high yield investor
base continues to expand with increased interest from institutional and European
investors. However, yields offered by the domestic high yield market are near
historic lows and part of our current strategy is to position the credit quality
of the portfolio above that of the general high yield market.
OUTLOOK
Our competitive advantage continues to be a global approach to the high yield
market. We currently find more compelling values in the international sector of
the market and, therefore, are maintaining the maximum exposure of 35%.
Importantly, the international portion of the portfolio remains well diversified
by country. The 65% allocation to the domestic high yield sector is diversified
by industry, with overweighted positions in telecommunications, energy, and
media/entertainment.
* The CS First Boston High Yield Index is an unmanaged, commonly used measure
of performance of the high yield sector of the bond market. The Index is not
available for direct investment.
32
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- --------- ------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES--0.5%
DLJ Mortgage Acceptance Corp.
94-MF4, B2 8.50%, 4/18/01...... BB(d) $ 3,000 $2,992,500
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $2,849,491).................................. 2,992,500
------------
CORPORATE BONDS--61.5%
BROADCASTING (TELEVISION, RADIO, & CABLE)--8.8%
Fox Kids Worldwide 144A 0%,
11/1/07 (b)(f)................. B 39,000 24,911,250
Fox/Liberty Networks LLC 0%,
8/15/07 (f).................... B 13,000 8,905,000
Fox/Liberty Networks LLC 8.875%,
8/15/07........................ B 5,000 5,125,000
Lin Holdings Corp. 144A 0% 3/1/08
(b)(f)......................... B 10,000 6,287,500
Poland Communications, Inc.
Series B 9.875%, 11/1/03....... B 12,200 12,108,500
------------
57,337,250
------------
COMPUTER SOFTWARE & SERVICES--0.8%
PSINET, Inc. 144A 10%, 2/15/05
(b)............................ B 3,400 3,502,000
Verio, Inc. 144A 13.50%, 6/15/04
(b)(e)......................... NR 1,000 1,460,000
------------
4,962,000
------------
CONTAINERS (METAL & GLASS)--1.7%
Portola Packaging, Inc. Sr. Note
10.75%, 10/1/05................ B 10,000 10,762,500
------------
COSMETICS/PERSONAL CARE--1.7%
Revlon Worldwide Corp. Series B
0%, 3/15/01.................... B 14,000 10,780,000
------------
DIVERSIFIED MISCELLANEOUS--0.2%
IBJ Preferred Cap Co. 144A 8.79%,
12/29/49 (b)(f)................ A 1,645 1,559,414
------------
DRUGS--MAJOR PHARMACEUTICALS--1.5%
Fountain View, Inc. 144A 11.25%,
4/15/08 (b).................... Caa 5,000 5,112,500
Schein Pharmaceutical, Inc. 144A,
8.727%, 12/15/04 (b)(e)(f)..... B 4,800 4,800,000
------------
9,912,500
------------
ELECTRONICS (INSTRUMENTATION)--1.9%
Anacomp, Inc. Series B 10.875%,
4/1/04......................... B 7,000 7,455,000
Samsung Electron America 144A
9.75%, 5/1/03 (b).............. Ba 5,000 5,012,500
------------
12,467,500
------------
ENGINEERING & CONSTRUCTION--0.4%
Octel Developments Sr. Notes 144A
10%, 5/1/06 (b)................ B 2,500 2,500,000
------------
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- --------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY, PARIMUTUEL COS.--2.2%
Trump Atlantic City Assoc.
11.25%, 5/1/06................. B $14,000 $14,000,000
------------
HEALTH CARE--DIVERSIFIED--1.1%
Global Health Sciences 144A 11%,
5/1/08 (b)..................... Caa 6,900 7,003,500
------------
INDUSTRIAL--2.4%
Stellex Industries, Inc. 144A
9.50%, 11/1/07 (b)............. NR 2,000 2,047,500
Wam!net, Inc. 144A 13.25%, 3/1/05
(b)(f)......................... NR 21,000 13,282,500
------------
15,330,000
------------
LEASING/RENTAL--0.6%
Williams Scotsman, Inc. 9.875%,
6/1/07......................... B 3,700 3,922,000
------------
MACHINERY (DIVERSIFIED)--0.3%
Newcor, Inc. 144A 9.875%, 3/1/08
(b)............................ B 2,000 2,047,500
------------
MANUFACTURING (DIVERSIFIED)--0.6%
Polymer Group, Inc. 144A 8.75%,
3/1/08 (b)..................... B 4,000 4,070,000
------------
MANUFACTURING (SPECIALIZED)--0.6%
Phillips Van-Heusen 144A 9.50%,
5/1/08 (b)..................... B 4,000 4,005,000
------------
METALS MINING--1.3%
NSM Steel Ltd. 144A 12.25%,
2/1/08 (b)..................... Caa 8,750 8,487,500
------------
OFFICE EQUIPMENT & SUPPLIES--0.5%
United Stationers, Inc. Sr. Sub.
Notes 144A 8.375%, 4/15/08
(b)............................ B 3,000 3,022,500
------------
OIL & GAS (EXPLORATION & PRODUCTION)--10.0%
Nuevo Energy Co. 9.50%,
4/15/06........................ B 13,500 14,310,000
Bellwether Exploration Co.
10.875%, 4/1/07................ B 8,000 8,400,000
Benton Oil & Gas Co. 11.625%,
5/1/03......................... B 9,800 10,584,000
Benton Oil & Gas Co. 9.375%,
11/1/07........................ B 2,750 2,756,875
Ocean Energy, Inc. 9.75%,
10/1/06........................ B 5,000 5,500,000
Forcenergy, Inc. 8.50%,
2/15/07........................ B 7,000 7,087,500
Lomak Petroleum, Inc. 8.75%,
1/15/07........................ B 2,000 2,045,000
Ocean Energy, Inc. Series B
8.875%, 7/15/07................ B 7,000 7,367,500
Snyder Oil Corp. 8.75%,
6/15/07........................ B 6,750 6,918,750
------------
64,969,625
------------
</TABLE>
See Notes to Financial Statements 33
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
PUBLISHING--1.6% --------- --------- ------------
<S> <C> <C> <C>
Hollinger International
Publishing, Inc. 9.25%,
3/15/07........................ B $ 3,400 $3,561,500
Outdoor Communications, Inc.
9.25%, 8/15/07................. B 6,500 6,800,625
------------
10,362,125
------------
TELECOMMUNICATIONS (LONG DISTANCE)--6.7%
Hermes Europe Railtel B.V. 144A
11.50%, 8/15/07 (b)............ B 6,500 7,393,750
NTL, Inc. Series B 0%, 2/1/06
(f)............................ B 7,000 5,608,750
NTL, Inc. Series B 10%,
2/15/07........................ B 8,000 8,640,000
RCN Corp 144A 0%, 2/15/08
(b)(f)......................... B 20,525 12,879,437
RSL Communications PLC 144A 0%,
3/1/08 (b)(f).................. B 14,750 9,145,000
------------
43,666,937
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--5.9%
Bell Technology Group 144A 13%,
5/1/05 (b)(g).................. NR 4,400 4,444,000
Comcast Cellular Series B 9.50%,
5/1/07......................... Ba 10,500 10,972,500
Orion Network Systems, Inc. 0%,
1/15/07 (f).................... B 8,000 6,160,000
Sprint Spectrum L.P. 0%, 8/15/06
(f)............................ B 19,950 16,558,500
------------
38,135,000
------------
TELEPHONE--7.6%
InterAmericas Communication Corp.
Unit 144A 14%, 7/15/07
(b)(g)......................... NR 12,000 12,600,000
Intermedia Communication Series B
0%, 7/15/07 (f)................ B 12,850 9,428,688
Pathnet, Inc. 144A 12.25%,
4/15/08 (b)(g)................. NR 5,825 5,970,625
RNC Corp. 144A 0%, 10/15/07
(b)(f)......................... B 17,250 11,471,250
Teligent, Inc. 11.50%, 12/1/07... NR 5,000 5,212,500
Teligent, Inc. 144A 0%, 3/1/08
(b)(f)......................... NR 8,000 4,570,000
------------
49,253,063
------------
TRUCKERS & MARINE--2.2%
Global Ocean Carriers 144A
10.25%, 7/15/07 (b)............ B 4,000 3,690,000
Hvide Marine, Inc. 144A 8.375%,
2/15/08 (b).................... B 5,500 5,376,250
Sea Containers 144A 7.875%,
2/15/08 (b).................... Ba 5,000 4,943,750
------------
14,010,000
------------
WASTE MANAGEMENT--0.9%
Allied Waste Industries 0%,
6/1/07 (f)..................... B 7,500 5,503,125
------------
TOTAL CORPORATE BONDS
(Identified cost $385,650,614)................................ 398,069,039
------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- --------- ------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--2.4%
<S> <C> <C> <C>
First Chicago/Lennar Trust 144A
8.11%, 2/28/11 (b)(f).......... B(d) $ 9,825 $8,636,789
Salomon Brothers Mortgage
Securities VII 95-C, 1 144A
6.80%, 9/30/08(b).............. B 7,861 6,623,266
------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $13,526,530)................................. 15,260,055
------------
FOREIGN GOVERNMENT SECURITIES--4.6%
ARGENTINA--0.4%
Imasac SA 144A 11%, 5/2/05 (b)... B 2,500 2,506,250
------------
DOMINICAN REPUBLIC--0.3%
Dominican Republic 6.875%,
8/30/24 (f).................... B+(d) 2,500 1,987,500
------------
INDONESIA--1.1%
Asia Pulp & Paper Co. 12%,
12/29/49 (f)................... Caa 7,900 6,873,000
------------
RUSSIA--2.8%
Russia Principal Loans, PIK
interest capitalization,
6.719%, 12/15/20 (f)........... NR 28,350 17,949,093
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $31,573,168)................................. 29,315,843
------------
FOREIGN CORPORATE BONDS--24.5%
BAHAMAS--1.0%
Sun International Hotels 9%,
3/15/07........................ Ba 6,000 6,270,000
------------
BERMUDA--1.1%
AES China Generating Co. Yankee
10.125%, 12/15/06.............. Ba 8,220 7,767,900
------------
BRAZIL--2.8%
Arisco Prod Alimenticios 144A
10.75%, 5/22/05 (b)............ NR 3,750 3,656,250
Globo Communicacoes Participacoes
144A 10.625%, 12/15/08 (b)..... B 2,380 2,418,675
Localiza Rent a Car 144A 10.25%,
10/1/05 (b).................... B 8,000 7,120,000
RBS Participacoes SA 144A 11%,
4/1/07 (b)..................... BB-(d) 5,000 5,025,000
------------
18,219,925
------------
CANADA--2.3%
Hurricane Hydrocarbons 144A
11.75%, 11/1/04 (b)............ B- 8,000 8,060,000
International Utility Sr. Sub.
PIK Notes 144A 10.75%, 2/1/08
(b)............................ Caa 2,250 2,340,000
Metronet Communications 12%,
8/15/07........................ NR 4,000 4,600,000
------------
15,000,000
------------
CHINA--0.2%
Greater Beijing 144A 9.50%,
6/15/07 (b)(e)................. Ba 1,650 1,311,750
------------
CYPRUS--1.6%
American Reefer 144A 10.25%,
3/1/08 (b)..................... B 10,000 10,075,000
------------
</TABLE>
34 See Notes to Financial Statements
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
GERMANY--1.8% --------- --------- ------------
<S> <C> <C> <C>
Kabelmedia Holding 0%, 8/1/06
(f)............................ B $15,000 $11,700,000
------------
GREECE--2.2%
Antenna TV SA Sr. Notes 9%,
8/1/07......................... BB(d) 4,250 4,335,000
Fage Dairy Industries SA 9%,
2/1/07......................... B 10,000 9,700,000
------------
14,035,000
------------
HONG KONG--0.2%
Road King Infrastructure 144A
9.50%, 7/15/07 (b)............. BB(d) 2,000 1,580,000
------------
MEXICO--4.4%
Copamex Industries SA Series B
11.375%, 4/30/04 .............. NR 8,000 8,730,000
Ispat Mexicana SA Euro 10.375%,
3/15/01........................ NR 12,000 12,360,000
Pemex Onc. 9.50%, 9/15/27........ BB(d) 2,000 2,002,500
Petroleos Mexicanos 144A 9.25%,
3/30/18 (b).................... BB(d) 5,500 5,410,625
------------
28,503,125
------------
NETHERLANDS--1.1%
Netia Holdings 144A 0%, 11/1/07
(b)(f)......................... B 9,750 6,946,875
------------
PANAMA--1.5%
Republic of Panama 8.875%,
9/30/27........................ Ba 10,000 9,795,000
------------
POLAND--0.9%
Poland Telecom Finance 144A 14%,
12/1/07 (b)(e)................. NR 5,000 5,625,000
------------
UNITED KINGDOM--3.4%
Bridas Corp. 12.50%, 11/15/99.... Ba 6,500 6,922,500
Esprit Telecom Group PLC 11.50%,
12/15/07....................... Caa 10,000 11,000,000
Telwest Communications PLC 0%,
10/1/07 (f).................... B 5,000 4,050,000
------------
21,972,500
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $155,795,045)................................ 158,802,075
------------
FOREIGN CONVERTIBLE BONDS--1.4%
RUSSIA--1.4%
Lukinteer Finance Lukoil 144A,
1%, 11/3/03 (b)................ NR 10,500 8,977,500
------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $9,777,270).................................. 8,977,500
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C>
PREFERRED STOCKS--2.6%
BROADCASTING (TELEVISION, RADIO, & CABLE)--1.8%
American Radio Systems Series B Pfd. PIK
11.375%....................................... 100,017 $ 11,827,021
------------
PAPER & FOREST PRODUCTS--0.6%
SD Warren Co. Series B Pfd. PIK 14%............. 115,000 4,042,377
------------
UTILITY-ELECTRIC POWER--0.2%
International Utility Structures 144A Pfd. PIK
(b)........................................... 1,000 1,062,500
------------
TOTAL PREFERRED STOCKS
(Identified cost $13,523,141)................................ 16,931,898
------------
CONVERTIBLE PREFERRED STOCKS--0.2%
BROADCASTING (TELEVISION, RADIO, & CABLE)--0.2%
Granite Broadcasting Corp. CV. Pfd. $1.938...... 30,000 1,792,500
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $2,025,000)................................. 1,792,500
------------
COMMON STOCKS--0.0%
PUBLISHING--0.0%
Sullivan Holdings, Inc. Class C (c)............. 76 0
------------
TOTAL COMMON STOCKS
(Identified cost $357,880)................................... 0
------------
WARRANTS--0.0%
Orion Network Systems, Inc. Warrants (c)........ 8,000 80,000
Metronet Communications 144A Warrants (b)(c).... 4,000 192,500
------------
TOTAL WARRANTS
(Identified cost $106,429)................................... 272,500
------------
TOTAL LONG-TERM INVESTMENTS--97.7%
(Identified cost $615,184,568)............................... 632,413,910
------------
TOTAL INVESTMENTS--97.7%
(Identified cost $615,184,568)............................... 632,413,910(a)
Cash and receivables, less liabilities--2.3%................. 14,796,909
------------
NET ASSETS--100.0%............................................. $647,210,819
------------
------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $26,218,966 and gross
depreciation of $9,082,426 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$615,277,370.
(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 April 30,
1998, these securities amounted to a value of $269,163,206 or 41.6% of net
assets.
(c) Non-income producing.
(d) As rated by Standard & Poor's, Duff and Phelps or Fitch.
(e) Rights incorporated as a unit.
(f) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(g) Warrants incorporated as a unit.
See Notes to Financial Statements 35
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $615,184,568) $ 632,413,910
Receivables
Investment securities sold 11,240,342
Dividends and interest 11,407,648
Fund shares sold 834,028
--------------
Total assets 655,895,928
--------------
LIABILITIES
Payables
Custodian 4,150,149
Investment securities purchased 2,500,000
Fund shares repurchased 1,335,322
Investment advisory fee 352,596
Distribution fee 180,245
Transfer agent fee 58,654
Financial agent fee 19,562
Trustees' fee 9,476
Accrued expenses 79,105
--------------
Total liabilities 8,685,109
--------------
NET ASSETS $ 647,210,819
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 701,971,215
Undistributed net investment income 1,822,125
Accumulated net realized loss (73,811,863)
Net unrealized appreciation 17,229,342
--------------
NET ASSETS $ 647,210,819
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $573,701,218) 61,283,155
Net asset value per share $9.36
Offering price per share
$9.36/(1-4.75%) $9.83
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $72,487,436) 7,763,816
Net asset value and offering price per share $9.34
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,022,165) 109,238
Net asset value and offering price per share $9.36
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 30,069,459
Dividends 964,974
-------------
Total investment income 31,034,433
-------------
EXPENSES
Investment advisory fee 2,044,672
Distribution fee--Class A 707,365
Distribution fee--Class B 315,383
Distribution fee--Class C 801
Financial agent fee 112,201
Transfer agent 323,889
Registration 50,078
Professional 21,334
Printing 18,299
Custodian 14,116
Trustees 10,850
Miscellaneous 6,187
-------------
Total expenses 3,625,175
-------------
NET INVESTMENT INCOME 27,409,258
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 7,475,424
Net change in unrealized appreciation on investments 11,011,109
-------------
NET GAIN ON INVESTMENTS 18,486,533
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 45,895,791
-------------
-------------
</TABLE>
36 See Notes to Financial Statements
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 27,409,258 $ 49,787,651
Net realized gain 7,475,424 43,737,254
Net change in unrealized appreciation (depreciation) 11,011,109 (14,877,655)
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 45,895,791 78,647,250
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (24,885,385) (47,205,499)
Net investment income--Class B (2,613,743) (3,142,933)
Net investment income--Class C (8,700) --
-------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (27,507,828) (50,348,432)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (9,887,985 and 19,095,734 shares, respectively) 91,479,086 171,457,073
Net asset value of shares issued from reinvestment of distributions
(1,467,366 and 2,704,031 shares, respectively) 13,563,680 24,329,132
Cost of shares repurchased (8,715,645 and 21,233,985 shares, respectively) (80,899,210) (191,152,369)
-------------- -----------------
Total 24,143,556 4,633,836
-------------- -----------------
CLASS B
Proceeds from sales of shares (2,796,356 and 4,404,860 shares, respectively) 25,851,201 39,804,503
Net asset value of shares issued from reinvestment of distributions
(114,149 and 142,554 shares, respectively) 1,053,743 1,286,205
Cost of shares repurchased (900,728 and 1,757,872 shares, respectively) (8,341,129) (15,793,311)
-------------- -----------------
Total 18,563,815 25,297,397
-------------- -----------------
CLASS C
Proceeds from sales of shares (110,396 and 0 shares, respectively) 1,036,529 --
Net asset value of shares issued from reinvestment of distributions
(524 and 0 shares, respectively) 4,913 --
Cost of shares repurchased (1,682 and 0 shares, respectively) (15,744) --
-------------- -----------------
Total 1,025,698 --
-------------- -----------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 43,733,069 29,931,233
-------------- -----------------
NET INCREASE IN NET ASSETS 62,121,032 58,230,051
NET ASSETS
Beginning of period 585,089,787 526,859,736
-------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$1,822,125 AND $1,920,695, RESPECTIVELY) $647,210,819 $ 585,089,787
-------------- -----------------
-------------- -----------------
</TABLE>
See Notes to Financial Statements 37
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.09 $ 8.63 $ 8.17 $ 8.11 $ 9.11 $ 8.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.40 0.80 0.78 0.80 0.76 0.74
Net realized and unrealized gain (loss) 0.27 0.46 0.46 0.04 (0.97) 0.97
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.67 1.26 1.24 0.84 (0.21) 1.71
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.40) (0.80) (0.78) (0.78) (0.76) (0.74)
Tax return of capital -- -- -- -- (0.03) --
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.40) (0.80) (0.78) (0.78) (0.79) (0.74)
--------- --------- --------- --------- --------- ---------
Change in net asset value 0.27 0.46 0.46 0.06 (1.00) 0.97
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 9.36 $ 9.09 $ 8.63 $ 8.17 $ 8.11 $ 9.11
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 7.56%(3) 15.03% 15.95% 11.19% (2.57)% 21.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $573,701 $532,906 $501,265 $507,855 $531,773 $182,333
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.06%(2) 1.11% 1.17% 1.21% 1.19% 1.04%
Net investment income 8.73%(2) 8.76% 9.21% 10.01% 9.01% 8.46%
Portfolio turnover 62%(3) 167% 162% 147% 222% 157%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/98 YEAR ENDED OCTOBER 31, 2/16/94 TO
(UNAUDITED) 1997 1996 1995 10/31/94
------------ --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.07 $ 8.63 $ 8.19 $ 8.13 $ 9.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.38 0.73 0.71 0.72 0.54
Net realized and unrealized gain (loss) 0.27 0.46 0.45 0.07 (1.25)
------------ --------- --------- --------- ------------
TOTAL FROM INVESTMENT OPERATIONS 0.65 1.19 1.16 0.79 (0.71)
------------ --------- --------- --------- ------------
LESS DISTRIBUTIONS
Dividends from net investment income (0.38) (0.75) (0.72) (0.73) (0.52)
Tax return of capital -- -- -- -- (0.02)
------------ --------- --------- --------- ------------
TOTAL DISTRIBUTIONS (0.38) (0.75) (0.72) (0.73) (0.54)
------------ --------- --------- --------- ------------
Change in net asset value 0.27 0.44 0.44 0.06 (1.25)
------------ --------- --------- --------- ------------
NET ASSET VALUE, END OF PERIOD $ 9.34 $ 9.07 $ 8.63 $ 8.19 $ 8.13
------------ --------- --------- --------- ------------
------------ --------- --------- --------- ------------
Total return(1) 7.25%(3) 14.18% 14.88% 10.44% (7.67)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $72,487 $52,184 $25,595 $12,331 $6,056
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.81%(2) 1.86% 1.92% 1.97% 1.80%(2)
Net investment income 8.09%(2) 8.00% 8.47% 9.18% 9.12%(2)
Portfolio turnover 62%(3) 167% 162% 147% 222%
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
38 See Notes to Financial Statements
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
CLASS C
-------------
FROM
INCEPTION
2/27/98 TO
4/30/98
(UNAUDITED)
-------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.11
Net realized and unrealized gain (loss) 0.07
------
TOTAL FROM INVESTMENT OPERATIONS 0.18
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.13)
Tax return of capital --
------
TOTAL DISTRIBUTIONS (0.13)
------
Change in net asset value 0.05
------
NET ASSET VALUE, END OF PERIOD $ 9.36
------
------
Total return(1) 1.89%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 1,022
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.81%(2)
Net investment income 8.52%(2)
Portfolio turnover 62%(3)
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
See Notes to Financial Statements 39
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ------------------------------------------------------------------------
INVESTOR PROFILE
Phoenix U.S. Government Securities Fund is designed for conservative investors
seeking current income and conservation of capital. The U.S. Government
Securities Fund invests in securities guaranteed by the U.S. Government as to
the timely payment of interest and principal, however, shares in the Fund are
not insured nor guaranteed.
INVESTMENT ADVISER'S REPORT
For the six months ended April 30, 1998, Phoenix U.S. Government Securities
Fund Class A shares returned 3.43% and Class B shares returned 3.09% compared
with 3.56% for the Lehman Brothers Government Bond Index.* All performance
figures assume reinvestment of dividends and exclude the effect of sales
charges.
As spreads between Treasuries and mortgage-backed securities began to widen,
we shifted our emphasis away from U.S. Treasuries and gradually increased our
weighting in mortgage-backed issues from about 10% of the Fund in December to
approximately 40% at the end of the reporting period. In addition, we
selectively added commercial mortgage-backed credits when we found attractive
values.
OUTLOOK
The bond market is likely to continue to be quite volatile as the market
continues to question whether the strong economy and low unemployment will
ultimately lead to higher inflation. In addition, the market seems to have mixed
views on whether the effects of the Asian turmoil will result in slower domestic
growth, which could help keep inflation in check.
The Fund's duration will be maintained in line with its benchmark index to
minimize interest rate surprises. It is currently 5.3 years. We will continue to
conservatively manage the Fund, emphasizing those sectors that we believe offer
the best risk/reward tradeoff.
* The Lehman Brothers Government Bond Index is an unmanaged, commonly used
performance measure of government securities. The Index is not available for
direct investment.
40
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -----------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--15.2%
U.S. TREASURY BONDS--2.8%
U.S. Treasury Bonds 6.125%, 11/15/27................. AAA $ 4,950 $ 5,069,641
-----------
U.S. TREASURY NOTES--12.4%
U.S. Treasury Notes 5.625%, 10/31/99................. AAA 7,470 7,475,826
U.S. Treasury Notes 5.625%, 12/31/99................. AAA 5,700 5,706,212
U.S. Treasury Notes 5.375%, 2/15/01.................. AAA 9,000 8,947,529
-----------
22,129,567
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $27,169,041)...................................................... 27,199,208
-----------
AGENCY MORTGAGE-BACKED SECURITIES--24.8%
FNMA 10%, 5/25/04.................................... AAA 2,453 2,591,563
FNMA 6.75%, '99-'21.................................. AAA 2,000 2,037,182
GNMA 8%, '99-'06..................................... AAA 134 139,006
GNMA 8.50%, '99-'22.................................. AAA 301 314,378
GNSF 6.50%, '99-'28.................................. AAA 39,730 39,369,879
-----------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $44,521,165)...................................................... 44,452,008
-----------
MUNICIPAL BONDS--16.7%
Atlanta Downtown Development Authority Lease Revenue
Taxable 6.875%, 2/1/21 (e)......................... AAA 5,100 5,310,375
Chicago Public Building Taxable 6.25%, 1/1/99 (c).... AAA 2,000 2,005,640
Chicago Public Building Taxable 6.65%, 1/1/01 (c).... AAA 1,000 1,017,500
Chicago Public Building Taxable 7%, 1/1/06 (c)....... AAA 2,000 2,107,500
Chicago Public Building Taxable 7%, 1/1/07 (c)....... AAA 1,050 1,109,063
Harristown Development Corporation PA Special
Obligation Taxable 6.15%, 2/1/16................... AAA 5,000 4,831,250
Long Beach CA Pension Obligation Taxable 7.09%,
9/1/09............................................. Aaa(f) 1,940 2,039,425
Massachusetts Port Authority Revenue Taxable 6.35%,
7/1/06............................................. AA- 1,000 1,007,500
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS--CONTINUED
Massachusetts Port Authority Revenue Taxable 6.45%,
7/1/09............................................. AA- $ 1,575 $ 1,586,812
Pittsburgh PA Pension Taxable Series A 6.25%,
3/1/11............................................. AAA 2,665 2,615,031
San Francisco City & County Redevelopment Agency
Revenue Taxable 9.75%, 6/1/13...................... AAA 4,800 6,396,000
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $29,016,324)...................................................... 30,026,096
-----------
ASSET-BACKED SECURITIES--6.8%
ContiMortgage Home Equity Loan Trust 98-1B 7.86%,
4/15/29............................................ BBB- 1,470 1,484,011
Saxon Asset Securities Trust 1997-3 MF1 6.935%,
2/25/27............................................ Aa(f) 5,333 5,301,335
Delta Funding Home Equity Loan Trust 97-2 A4 7.03%,
8/25/24............................................ AAA 4,250 4,284,531
IMC Home Equity Loan 98-1 M2 Trust 7.38%, 6/20/29.... A 1,130 1,142,713
-----------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $12,274,237)...................................................... 12,212,590
-----------
CORPORATE BONDS--2.4%
GAMING, LOTTERY, PARIMUTUEL COS.--2.4%
Mashantucket Pequot Revenue 144A 6.91%, 9/01/12
(b)(c)............................................. AAA 4,200 4,347,000
-----------
TOTAL CORPORATE BONDS
(Identified cost $4,200,000)....................................................... 4,347,000
-----------
</TABLE>
<TABLE>
<S> <C> <C> <C>
NON-AGENCY MORTGAGE BACKED SECURITIES--21.2%
Imperial CMB Trust 1998-2 M1 6.95%, 4/25/28.......... AAA(f) 1,634 1,629,480
PNC Mortgage Securities Corp. 96-3, A5 8%,
12/25/26........................................... Aaa(f) 4,565 4,791,705
Residential Funding Securities l 1996-S3 A5 7.25%,
1/25/26............................................ AAA 5,390 5,431,753
Residential Funding Mortgage Securities l 1996-S4 A13
7.25%, 2/25/26..................................... AAA 4,894 4,933,954
Merrill Lynch Mortgage 1996-C2, C Investors, Inc.
6.96%, 11/21/28.................................... A 9,000 9,163,125
</TABLE>
See Notes to Financial Statements 41
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -----------
<S> <C> <C> <C>
CS First Boston Corp. 97-SPCE, D 144A 7.332%,
04/20/08 (b)(c).................................... BBB(f) $ 4,928 $ 4,961,880
MCFI 1996-MC2 C., 7.224% 9/20/06..................... A(f) 7,000 7,194,687
-----------
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(Identified cost $38,151,385)...................................................... 38,106,584
-----------
<CAPTION>
SHARES
-----------
<S> <C> <C> <C>
PREFERRED STOCKS--9.7%
REITS--9.7%
Home Ownership Funding 2, Step-down Pfd. 144A 13.338%(b)(d).......
18,000 17,418,402
-----------
TOTAL PREFERRED STOCKS
(Identified cost $17,212,105)...................................................... 17,418,402
-----------
TOTAL LONG-TERM INVESTMENTS--96.8%
(Identified cost $172,544,257)..................................................... 173,761,888
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000) VALUE
----------- -----------
<S> <C> <C>
SHORT-TERM OBLIGATIONS--1.0%
FEDERAL AGENCY SECURITIES--1.0%
FHLM 5.45%, 5/1/98.............................................. $ 1,865 $ 1,865,000
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,865,000)...................................................... 1,865,000
-----------
TOTAL INVESTMENTS--97.8%
(Identified cost $174,409,257).................................................... 175,626,888(a)
Cash and receivables, less liabilities--2.2%...................................... 3,860,072
-----------
NET ASSETS--100.0%.................................................................. $179,486,960
-----------
-----------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,709,877 and gross
depreciation of $492,246 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$174,409,257.
(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 April 30, 1998
these securities amounted to a value of $26,727,282 or 14.9% of net assets.
(c) These bonds are fully defeased by U.S. Government Treasury Obligations.
(d) Dividend payments backed by FHLMC ("Freddie Mac") Participation
Certificates.
(e) The revenue from this security is backed by the U.S. Government.
(f) As rated by Moody's, Fitch or Duff & Phelps.
42 See Notes to Financial Statements
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ----------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $174,409,257) $ 175,626,888
Cash 6,762
Receivables
Investment securities sold 2,742,292
Interest and dividends 1,552,509
Fund shares sold 78,435
--------------
Total assets 180,006,886
--------------
LIABILITIES
Payables
Fund shares repurchased 299,352
Investment advisory fee 67,121
Transfer agent fee 47,824
Distribution fee 41,141
Trustees' fee 9,300
Financial agent fee 7,775
Accrued expenses 47,413
--------------
Total liabilities 519,926
--------------
NET ASSETS $ 179,486,960
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 186,754,538
Undistributed net investment loss (188,480)
Accumulated net realized loss (8,296,729)
Net unrealized appreciation 1,217,631
--------------
NET ASSETS $ 179,486,960
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $173,309,797) 17,901,531
Net asset value per share $9.68
Offering price per share
$9.68/(1-4.75%) $10.16
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $6,177,163) 641,810
Net asset value and offering price per share $9.62
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 5,390,192
Dividends 514,220
Security lending 2,619
-----------
Total investment income 5,907,031
-----------
EXPENSES
Investment advisory fee 414,701
Distribution fee - Class A 223,025
Distribution fee - Class B 29,460
Financial agent fee 47,772
Transfer agent 151,779
Professional 16,187
Registration 11,580
Trustees 10,673
Custodian 9,008
Printing 7,812
Miscellaneous 3,688
-----------
Total expenses 925,685
-----------
NET INVESTMENT INCOME 4,981,346
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 2,821,677
Net change in unrealized appreciation (depreciation) on
investments (1,420,335)
-----------
NET GAIN ON INVESTMENTS 1,401,342
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 6,382,688
-----------
-----------
</TABLE>
See Notes to Financial Statements 43
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 4,981,346 $ 11,039,672
Net realized gain 2,821,677 517,260
Net change in unrealized appreciation (depreciation) (1,420,335) 2,715,533
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,382,688 14,272,465
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (5,695,866) (10,634,100)
Net investment income--Class B (168,665) (259,835)
-------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (5,864,531) (10,893,935)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (727,907 and 2,629,037 shares, respectively) 7,073,707 24,689,395
Net asset value of shares issued from reinvestment of distributions
(344,650 and 639,861 shares, respectively) 3,345,404 6,046,315
Cost of shares repurchased (2,045,445 and 6,412,210 shares, respectively) (19,872,415) (60,334,761)
-------------- -----------------
Total (9,453,304) (29,599,051)
-------------- -----------------
CLASS B
Proceeds from sales of shares (174,686 and 165,395 shares, respectively) 1,691,214 1,565,869
Net asset value of shares issued from reinvestment of distributions
(10,578 and 11,893 shares, respectively) 102,094 153,651
Cost of shares repurchased (97,583 and 143,485 shares, respectively) (942,768) (1,354,825)
-------------- -----------------
Total 850,540 364,695
-------------- -----------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (8,602,764) (29,234,356)
-------------- -----------------
NET DECREASE IN NET ASSETS (8,084,607) (25,855,826)
NET ASSETS
Beginning of period 187,571,567 213,427,393
-------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) OF ($188,480) AND
$694,705, RESPECTIVELY) $179,486,960 $ 187,571,567
-------------- -----------------
-------------- -----------------
</TABLE>
44 See Notes to Financial Statements
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
- ----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.66 $ 9.47 $ 9.60 $ 8.88 $ 9.87 $ 9.91
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26 0.55 0.52 0.55 0.64 0.62(1)
Net realized and unrealized gain (loss) 0.07 0.17 (0.15) 0.72 (1.02) 0.34
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.33 0.72 0.37 1.27 (0.38) 0.96
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.31) (0.53) (0.50) (0.55) (0.45) (0.62)
Dividends from net realized gains -- -- -- -- (0.02) (0.38)
Tax return of capital -- -- -- -- (0.14) --
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.31) (0.53) (0.50) (0.55) (0.61) (1.00)
--------- --------- --------- --------- --------- ---------
Change in net asset value 0.02 0.19 (0.13) 0.72 (0.99) (0.04)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 9.68 $ 9.66 $ 9.47 $ 9.60 $ 8.88 $ 9.87
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(2) 3.43%(4) 7.85% 4.05% 14.81% (3.98)% 10.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $173,310 $182,250 $208,552 $235,879 $262,157 $57,072
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.98%(3) 0.98% 1.03% 0.99% 0.98% 0.75%
Net investment income 5.43%(3) 5.63% 5.55% 6.01% 5.92% 6.19%
Portfolio turnover 159%(4) 377% 379% 178% 101% 264%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 2/24/94
4/30/98 YEAR ENDED OCTOBER 31, TO
(UNAUDITED) 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.60 $ 9.45 $ 9.58 $ 8.86 $ 9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.23 0.47 0.44 0.48 0.39
Net realized and unrealized gain (loss) 0.06 0.17 (0.14) 0.72 (0.75)
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.29 0.64 0.30 1.20 (0.36)
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.27) (0.49) (0.43) (0.48) (0.30)
Dividends from net realized gains -- -- -- -- --
Tax return of capital -- -- -- -- (0.09)
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.27) (0.49) (0.43) (0.48) (0.39)
--------- --------- --------- --------- ---------
Change in net asset value 0.02 0.15 (0.13) 0.72 (0.75)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 9.62 $ 9.60 $ 9.45 $ 9.58 $ 8.86
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return(2) 3.09%(4) 6.94% 3.39% 13.82% (3.83)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,177 $5,321 $4,875 $3,655 $1,238
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.73%(3) 1.71% 1.78% 1.73% 2.00%(3)
Net investment income 4.70%(3) 4.91% 4.79% 5.23% 4.49%(3)
Portfolio turnover 159%(4) 377% 379% 178% 101%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.03.
(2) Maximum sales load is not reflected in the total return calculation.
(3) Annualized
(4) Not annualized
See Notes to Financial Statements 45
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
INVESTOR PROFILE
Phoenix Money Market Fund is designed for conservative investors seeking high
current income with minimal risk of capital.
INVESTMENT ADVISER'S REPORT
Phoenix Money Market Fund continued to perform well during this six-month
reporting period. As of April 30, 1998, current yield was 4.92% for Class A
shares and 4.16% for Class B shares compared with an average money market yield
of 4.91% as reported in IBC's Money Market Fund Insight.* Current yield is a
seven-day annualized yield computed by dividing the average net income earned
per share during the seven days preceding the date of calculation by the average
daily net asset value per share for the same period, multiplied by 365. The Fund
is neither insured nor guaranteed by the U.S. government, and there can be no
assurance the Fund will maintain a stable net asset value of $1.00 per share.
Ongoing concerns about the turmoil in Southeast Asia and unstable markets
globally have persisted over the reporting period. As a result, short-term money
markets continued to experience high volatility. Moderate to strong domestic
growth in the fourth quarter of 1997 and the first quarter of 1998 has led to
ongoing confusion over the impact that the foreign markets will have on domestic
markets. The Federal Reserve has moved from a neutral policy position to a bias
toward tightening rates.
During this time, we continued to maintain a market neutral strategy given the
ongoing volatility in the markets, while looking for trading opportunities in
variable-rate and corporate securities. We continue to emphasize high-quality
commercial paper and variable-rate securities to enhance yield. The Fund's
average credit quality remained A1/P1. The Fund's credit quality is based solely
on the creditworthiness of the investments in the portfolios and does not apply
to the stability or safety of the Fund.
OUTLOOK
Volatility in the short-term markets is likely to continue as the market
questions whether the strong economy and low unemployment will ultimately lead
to higher inflation. In addition, the market seems to have mixed views on
whether the effects of the Asian turmoil will result in slower domestic growth,
alleviating the need for any move by the Federal Reserve to tighten rates.
* The Donoghue Money Fund Average is an average of all major first-tier
government money market funds as reported in IBC's Money Market Fund Insight.
46
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
VALUE INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
- --------- ----------------------------------- --------- --------- -----------
<C> <S> <C> <C> <C>
FEDERAL AGENCY SECURITIES--5.5%
$ 7,500 SLMA................................. 6.00% 6/30/98 $ 7,500,000
850 FNMA................................. 9.40 8/10/98 857,891
250 FFCB................................. 5.70 9/2/98 249,989
500 FFCB................................. 5.60 10/1/98 499,852
-----------
9,107,732
TOTAL FEDERAL AGENCY SECURITIES.........................................
-----------
</TABLE>
<TABLE>
<CAPTION>
RESET
DATE
---------
<C> <S> <C> <C> <C>
FEDERAL AGENCY SECURITIES--VARIABLE--32.2% (B)
4,500 FFCB (final maturity 4/1/99)......... 5.44 5/1/98 4,500,000
10,500 FFCB (final maturity 7/24/00)........ 5.79 5/1/98 10,502,645
702 SBA (final maturity 1/25/21)......... 6.00 5/1/98 701,415
3,000 FNMA (final maturity 4/9/99)......... 5.54 5/5/98 2,998,590
3,000 FNMA (final maturity 11/9/98)........ 5.57 5/5/98 2,999,542
5,000 SLMA (final maturity 11/9/98)........ 5.28 5/5/98 5,000,000
2,000 SLMA (final maturity 2/22/99)........ 5.27 5/5/98 2,000,000
3,000 SLMA (final maturity 3/7/01)......... 5.33 5/5/98 3,000,000
3,500 SLMA (final maturity 11/10/98)....... 5.26 5/5/98 3,499,022
3,000 FNMA (final maturity 12/14/98)....... 5.32 6/14/98 2,998,975
2,500 FNMA (final maturity 6/19/98)........ 5.60 6/19/98 2,500,239
3,000 FHLMC (final maturity 6/22/98)....... 5.44 6/22/98 2,999,789
3,000 SBA (final maturity 4/25/22)......... 6.00 7/1/98 3,000,000
967 SBA (final maturity 5/25/21)......... 6.00 7/1/98 966,125
2,982 SBA (final maturity 10/25/22)........ 6.00 7/1/98 2,978,663
3,000 SBA (final maturity 2/25/23)......... 6.00 7/1/98 3,000,000
-----------
53,645,005
TOTAL FEDERAL AGENCY SECURITIES-- VARIABLE..............................
-----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S MATURITY
RATING DATE
--------- ---------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER--55.6%
448 Receivables Capital
Corp..................... A-1+ 5.59 5/1/98 448,000
5,000 Goldman, Sachs & Co...... A-1+ 5.55 5/5/98 4,996,917
4,500 Private Export Funding
Corp..................... A-1+ 5.56 5/6/98 4,496,525
6,000 Preferred Receivables
Funding Corp............. A-1 5.55 5/7/98 5,994,451
3,000 AlliedSignal Inc......... A-1 5.50 5/8/98 2,996,780
2,210 Ciesco L.P............... A-1+ 5.57 5/8/98 2,207,606
1,092 BellSouth
Telecommunications,
Inc...................... A-1+ 5.57 5/11/98 1,090,310
550 Potomac Electric Power
Co....................... A-1 5.52 5/11/98 549,157
</TABLE>
<TABLE>
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- --------- ------------------------- --------- --------- --------- -----------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER--CONTINUED
$ 150 General Electric Capital
Corp..................... A-1+ 5.58% 5/12/98 $ 149,744
900 Enterprise Funding
Corp..................... A-1+ 5.55 5/14/98 898,196
3,190 BellSouth Capital Funding
Corp..................... A-1+ 5.50 5/15/98 3,183,177
2,730 Goldman, Sachs & Co...... A-1+ 5.50 5/15/98 2,724,150
3,080 Greenwich Funding
Corp..................... A-1+ 5.53 5/18/98 3,071,957
1,450 Deutsche Bank Financial
Corp..................... A-1+ 5.52 5/22/98 1,445,331
2,105 General Re. Corp......... A-1+ 5.50 5/22/98 2,098,222
730 Enterprise Funding
Corp..................... A-1+ 5.53 5/26/98 727,196
2,500 Merrill Lynch & Co.,
Inc...................... A-1+ 5.52 5/26/98 2,490,417
5,000 General Electric Capital
Corp..................... A-1+ 5.51 5/28/98 5,000,000
2,885 Cargill, Inc............. A-1+ 5.49 6/1/98 2,871,361
3,000 Enterprise Funding
Corp..................... A-1+ 5.52 6/8/98 2,982,520
1,500 Corporate Asset Funding
Co., Inc................. A-1+ 5.50 6/11/98 1,491,979
3,000 Corporate Asset Funding
Co., Inc................. A-1+ 5.50 6/11/98 2,981,208
1,300 General Re. Corp......... A-1+ 5.53 6/11/98 1,291,813
3,738 Receivables Capital
Corp..................... A-1+ 5.52 6/11/98 3,714,500
1,670 Corporate Receivables
Corp..................... A-1+ 5.50 6/12/98 1,659,284
3,500 CXC, Inc................. A-1+ 5.52 6/12/98 3,477,460
3,500 Corporate Receivables
Corp..................... A-1+ 5.54 6/15/98 3,475,763
1,500 CXC, Inc................. A-1+ 5.45 6/15/98 1,489,781
1,305 Enterprise Funding
Corp..................... A-1+ 5.40 6/19/98 1,295,408
2,500 Greenwich Funding
Corp..................... A-1+ 5.54 6/19/98 2,481,148
1,500 CXC, Inc................. A-1+ 5.54 6/25/98 1,487,304
1,099 Enterprise Funding
Corp..................... A-1+ 5.44 7/15/98 1,086,600
2,500 Private Export Funding
Corp..................... A-1+ 5.48 7/17/98 2,470,697
</TABLE>
See Notes to Financial Statements 47
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
<TABLE>
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- --------- ------------------------- --------- --------- --------- -----------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER--CONTINUED
$ 1,410 Enterprise Funding
Corp..................... A-1+ 5.50% 7/29/98 $ 1,390,827
2,160 Private Export Funding
Corp..................... A-1+ 5.36 8/3/98 2,129,770
2,050 Preferred Receivables
Funding Corp............. A-1 5.42 8/10/98 2,018,828
2,500 CXC, Inc................. A-1+ 5.47 9/16/98 2,447,579
3,000 Beta Finance, Inc........ A-1+ 5.44 9/24/98 2,933,813
3,000 Beta Finance, Inc........ A-1+ 5.48 9/30/98 2,930,840
-----------
92,676,619
TOTAL COMMERCIAL PAPER..................................................
-----------
MEDIUM-TERMS NOTES--9.1%
3,500 Associates Corporation of
North America............ AA- 5.51 7/20/98 3,497,298
3,100 Associates Corporation of
North America............ AA- 6.375 8/15/98 3,103,915
3,000 Associates Corporation of
North America............ AA- 6.50 9/9/98 3,006,576
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- --------- ------------------------- --------- --------- --------- -----------
<C> <S> <C> <C> <C> <C>
MEDIUM-TERMS NOTES--CONTINUED
$ 2,500 Pitney Bowes Credit
Medium Term Note......... A-1+ 6.305% 9/23/98 $ 2,504,944
575 General Electric Capital
Corp..................... A-1+ 8.10 1/26/99 584,121
2,500 Beta Finance Inc......... A-1+ 5.73 3/16/99 2,499,981
-----------
15,196,835
TOTAL MEDIUM TERM NOTES.................................................
-----------
CERTIFICATES OF DEPOSIT--1.8%
3,000 Deutsche Bank Financial,
Inc...................... A-1+ 5.75 3/5/99 2,998,789
-----------
2,998,789
TOTAL CERTIFICATES OF DEPOSIT...........................................
-----------
173,624,980(a)
TOTAL INVESTMENTS--104.2%
(Identified cost $173,624,980)........................................
(7,043,846)
Cash and receivables, less liabilities--4.2%..........................
-----------
$166,581,134
NET ASSETS--100.0%......................................................
-----------
-----------
</TABLE>
(a) Federal Income Tax Information: At April 30, 1998, the aggregate cost of
securities was the same for book and tax purposes.
(b) Variable rate demand notes. The interest rates shown reflect the rates
currently in effect.
48 See Notes to Financial Statements
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $173,624,980) $ 173,624,980
Cash 104,851
Receivables
Interest 976,272
Fund shares sold 712,613
--------------
Total Assets 175,418,716
--------------
LIABILITIES
Payables
Fund shares repurchased 8,456,614
Dividend distributions 151,988
Transfer agent fee 86,817
Investment advisory fee 58,533
Trustees' fee 9,123
Financial agent fee 7,662
Distribution fee 7,557
Accrued expenses 59,288
--------------
Total liabilities 8,837,582
--------------
NET ASSETS $ 166,581,134
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of benefical interest $ 166,581,134
--------------
NET ASSETS $ 166,581,134
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $154,222,543) 154,222,543
Net asset value and offering price per share $1.00
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $12,358,591) 12,358,591
Net asset value and offering price per share $1.00
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 5,181,230
-----------
Total investment income 5,181,230
-----------
EXPENSES
Investment advisory fee 365,139
Distribution fee--Class B 44,944
Financial agent fee 47,423
Transfer agent 197,890
Registration 19,173
Professional 14,879
Custodian 13,443
Printing 11,448
Trustees 10,497
Miscellaneous 866
-----------
Total expenses 725,702
-----------
NET INVESTMENT INCOME $ 4,455,528
-----------
-----------
</TABLE>
See Notes to Financial Statements 49
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 4,455,528 $ 9,307,014
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (4,205,545) (8,890,389)
Net investment income--Class B (249,983) (416,625)
-------------- -----------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (4,455,528) (9,307,014)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (460,482,893 and 732,054,689 shares, respectively) 460,482,893 732,054,689
Net asset value of shares issued from reinvestment of distributions
(3,781,171 and 8,138,566 shares, respectively) 3,781,171 8,138,566
Cost of shares repurchased (498,736,224 and 744,357,959 shares, respectively) (498,736,224) (744,357,959)
-------------- -----------------
Total (34,472,160) (4,164,704)
-------------- -----------------
CLASS B
Proceeds from sales of shares (14,919,342 and 35,539,707 shares, respectively) 14,919,342 35,539,707
Net asset value of shares issued from reinvestment of distributions
(202,594 and 329,335 shares, respectively) 202,594 329,335
Cost of shares repurchased (17,776,721 and 31,078,203 shares, respectively) (17,776,721) (31,078,203)
-------------- -----------------
Total (2,654,785) 4,790,839
-------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (37,126,945) 626,135
-------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS (37,126,945) 626,135
NET ASSETS
Beginning of period 203,708,079 203,081,944
-------------- -----------------
END OF PERIOD $166,581,134 $ 203,708,079
-------------- -----------------
-------------- -----------------
</TABLE>
50 See Notes to Financial Statements
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
UNAUDITED 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<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 0.024 0.048 0.047 0.053 0.032 0.025(1)
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.024 0.048 0.047 0.053 0.032 0.025
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.024) (0.048) (0.047) (0.053) (0.032) (0.025)
--------- --------- --------- --------- --------- ---------
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 2.47%(3) 4.76% 4.67% 5.32% 3.20% 2.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $154,223 $188,695 $192,859 $193,534 $196,566 $170,334
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.75%(2) 0.79% 0.84% 0.71% 0.85% 0.85%
Net investment income 4.93%(2) 4.76% 4.68% 5.31% 3.19% 2.53%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------
SIX FROM
MONTHS INCEPTION
ENDED 7/15/94
4/30/98 YEAR ENDED OCTOBER 31, TO
UNAUDITED 1997 1996 1995 10/31/94
--------- --------- --------- --------- ---------
<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 0.020 0.040 0.039 0.046 0.007
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.020 0.040 0.039 0.046 0.007
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.020) (0.040) (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
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Total return 2.09%(3) 4.02% 3.93% 4.63% 0.70%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 12,359 $ 15,013 $ 10,223 $ 8,506 $ 2,086
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.50%(2) 1.55% 1.59% 1.44% 1.60%(2)
Net investment income 4.17%(2) 4.02% 3.92% 4.62% 3.46%(2)
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.0001.
(2) Annualized
(3) Not annualized
See Notes to Financial Statements 51
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED)
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 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 and, additionally, High
Yield Fund Series offers Class C 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. Class C shares are sold with a 1% contingent deferred
sales charge if redeemed within one year of purchase. All classes of shares have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. Income and
expenses of each Series are borne pro rata by the holders of all classes of
shares, except that each class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at 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.
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 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.
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
52
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) (CONTINUED)
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. 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 April
30, 1998, 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............... $ 10,481,900 $ 10,527,055
Convertible Fund Series............ 2,493,800 2,349,844
Growth Fund Series................. 18,382,410 18,492,109
Aggressive Growth Fund Series...... 9,420,640 9,198,168
U.S. Government Securities Fund
Series........................... 15,583,250 15,080,999
Money Market Fund Series........... 1,020,000 999,350
</TABLE>
H. 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.
I. OPTIONS:
The Trust, except for U.S. Government and Money Market Series, may write
covered options or purchase options contracts for the purpose of hedging against
changes in the market value of the underlying securities or foreign currencies.
The Series will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
Each Series, except for U.S. Government and Money Market Series, any purchase
options which are included in the Series' Schedule of Investments and
subsequently marked-to-market to reflect the current value of the option. When a
purchased option is exercised, the cost of the security is adjusted by the
amount of premium paid. The risk associated with purchased options is limited to
the premium paid.
J. 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.
53
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) (CONTINUED)
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 $1-2
SERIES BILLION BILLION $2+ 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 Trust that it retained selling commissions of $274,420
for Class A shares and deferred sales charges of $318,977 for Class B shares and
$0 for Class C shares, for the six months ended April 30, 1998. In addition,
each Series except the Money Market Fund Series pays PEPCO a distribution fee at
an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00%
for Class C shares of the High Yield Fund Series 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 Trust that of the total amount expensed for the six months ended
April 30, 1998, $1,676,861 was earned by the Distributor, $5,381,202 was earned
by unaffiliated participants, and $716,007 was paid to W.S. Griffith, an
indirect subsidiary of PHL.
As Financial Agent of the Trust, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.05% of average daily
net assets up to $100 million, 0.04% of average daily net assets of $100 million
to $300 million, 0.03% of average daily net assets of $300 million through $500
million, and 0.015% of average daily net assets greater than $500 million; a
minimum fee may apply. PEPCO serves as the Trust's Transfer Agent with State
Street Bank and Trust Company as sub-transfer agent. For the six months ended
April 30, 1998, transfer agent fees were $3,620,204 of which PEPCO retained
$1,570,783 which is net of fees paid to State Street.
At April 30, 1998, PHL and affiliates held Phoenix Series Fund shares which
aggregated the following:
<TABLE>
<CAPTION>
AGGREGATE
NET ASSET
SHARES VALUE
--------- -----------
<S> <C> <C>
Aggressive Growth Fund Series Class
B.................................... 14,429 $ 221,625
High Yield Fund Series Class A......... 414 3,876
High Yield Fund Series C............... 10,741 100,537
U.S. Government Securities Fund Series
Class A.............................. 309 2,993
Money Market Fund Series Class A....... 434,569 434,569
</TABLE>
NOTE 3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the six months ended April 30, 1998
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
Balanced Fund Series............ $1,134,399,927 $ 972,644,429
Convertible Fund Series......... 141,145,829 155,786,710
Growth Fund Series.............. 2,031,015,770 1,752,209,706
Aggressive Growth Fund Series... 1,173,868,928 1,158,223,197
High Yield Fund Series.......... 394,130,020 342,287,577
U.S. Government Securities Fund
Series........................ 52,930,303 22,595,164
</TABLE>
Purchases and sales of U.S. Government and agency securities during the six
months ended April 30, 1998, aggregated the following:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
Balanced Fund Series............ $ 201,496,809 $ 385,930,552
High Yield Fund Series.......... 22,927,502 43,315,547
U.S. Government Securities Fund
Series........................ 227,697,755 260,286,321
</TABLE>
NOTE 4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
54
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) (CONTINUED)
NOTE 5. CAPITAL LOSS CARRYOVERS
The following Series have capital loss carryforwards which may be used to
offset future capital gains.
<TABLE>
<CAPTION>
U.S. GOVERNMENT
HIGH YIELD SECURITIES
EXPIRATION DATE FUND SERIES FUND SERIES
- ---------------------------- ----------- ----------------
<S> <C> <C>
1998........................ $66,472,552 $ 1,816,304
2002........................ 14,103,053 8,684,579
2003........................ 46,929,335 --
2004........................ -- 2,433,827
----------- ----------------
Total..................... $127,504,940 $ 12,934,710
----------- ----------------
----------- ----------------
</TABLE>
Included in the High Yield Fund Series amount expiring in 1998, $46,426,813
was acquired in connection with the merger of the National Bond Fund.
NOTE 6. SUBSEQUENT EVENT DISCLOSURE
On May 27, 1998, the Board of Trustees of Phoenix Series Fund unanimously
approved an Agreement and Plan of Reorganization relating to the proposed
combination of the Phoenix Convertible Fund Series and Phoenix Income and Growth
Fund.
Pursuant to the Agreement, the Convertible Fund will transfer all or
substantially all of its assets to the Income and Growth Fund in exchange for
shares of the Income and Growth Fund and the assumption by the Income and Growth
Fund of certain identified liabilities of the Convertible Fund. Following the
exchange, the Convertible Fund will distribute the shares of the Income and
Growth Fund to its shareholders pro rata, in liquidation of the Convertible
Fund. The effectiveness of these transactions is subject to the satisfaction of
a number of conditions, including approval by shareholders of the Convertible
Fund.
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.
55
<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 AND IRA?
Just call us at 800-243-4361.
HOW MUCH CAN I INVEST INTO AN IRA?
Individuals may invest up to $2,000 or 100% or earned income, whichever is
less. If you have an unemployed spouse, the maximum contribution could increase
to $2,250.
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.
56
<PAGE>
PHOENIX SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
J. Roger Engemann, Senior Vice President
James E. Mair, Senior Vice President
William J. Newman, Senior Vice President
John S. Tilson, Senior Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
Steven L. Colton, Vice President
John M. Hamlin, Vice President
John D. Kattar, Vice President
William E. Keen, III, Vice President
Christopher J. Kelleher, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Christopher J. Saner, Vice President
Julie L. Sapia, Vice President
Andrew Szabo, Vice President
Pierre G. Trinque, Vice President
Nancy C. 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, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
<PAGE>
---------------
PHOENIX FUNDS BULK RATE MAIL
P.O. Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
---------------
[LOGO] PHOENIX
INVESTMENT PARTNERS
