<PAGE>
Phoenix Investment Partners
October 31, 1998
ANNUAL REPORT
- Phoenix
Balanced 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>
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>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
PHILIP MCLOUGHLIN
We are pleased to provide this annual report for the Series Fund for the
fiscal year ended October 31, 1998.
The past six months have been a remarkable time for the financial markets. As
a result of the growing economic crises in Russia, Japan and global emerging
markets that began in the summer, investors flocked to the most highly liquid
and "lowest risk" investments available.
The Lehman Brothers Government Bond Index(1) gained 11% for the 12 months
through October 31, 1998, while the J.P. Morgan Emerging Market Bond Index
Plus(2) was down 10% for the same period. The largest U.S. stocks widely
outperformed smaller capitalization companies. For the year, the S&P 500
Index(3) was up 22%, while the Russell 2000 Index(4), a measure of small stocks'
performance, lost 12%.
During such market extremes, it is important to keep a long-term perspective.
We believe that by remaining true to our investment discipline, we will continue
to add value for our shareholders over the long term. Of course, past
performance is no guarantee of future results.
On the following pages, your Fund managers discuss their investment strategy
and provide their outlook for the next six months. We hope you find their
comments informative. If you have any questions, please contact your financial
advisor or call us at 1-800-243-1574.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
December 9, 1998
(1) THE LEHMAN BROTHERS GOVERNMENT BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF TOTAL RETURN PERFORMANCE FOR GOVERNMENT BONDS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
(2) THE J.P. MORGAN EMERGING MARKET BOND INDEX PLUS IS AN UNMANAGED, COMMONLY
USED MEASURE OF EMERGING-MARKET DEBT TOTAL RETURN PERFORMANCE. THE INDEX IS
NOT AVAILABLE FOR DIRECT INVESTMENT.
(3) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(4) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE FOR SMALL-CAPITALIZATION COMPANIES. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Balanced Fund Series.................................................. 3
The Growth Fund Series.................................................... 16
The Aggressive Growth Fund Series......................................... 24
The High Yield Fund Series................................................ 32
The U.S. Government Securities Fund Series................................ 43
The Money Market Fund Series.............................................. 50
Notes to Financial Statements............................................. 58
</TABLE>
2
<PAGE>
PHOENIX BALANCED FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix Balanced Fund is appropriate for investors seeking long-term capital
appreciation, current income and conservation of capital from a balanced
portfolio of stocks, bonds and cash equivalents. Investors should note that the
Fund may hold foreign bonds, and these foreign investments pose additional
risks, such as currency fluctuation, less public disclosure, and political and
economic uncertainty.
Q: HOW DID THE FUND PERFORM FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998?
A: For the last 12 months, Class A shares returned 8.68% and Class B shares
earned 7.91% compared with a return of 16.38% for the Fund's benchmark.(1) The
average one-year return for a universe of 395 balanced funds was 9.13%,
according to Lipper Analytical Services, Inc. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
Q: OVER THE PAST 12 MONTHS, WHAT FACTORS CONTRIBUTED POSITIVELY TO THE BALANCED
FUND'S PERFORMANCE? WHAT FACTORS NEGATIVELY IMPACTED RESULTS?
A: During this latest fiscal year ended October 31, 1998, positive contributors
to our equity performance included our decision to overweight the health-care
and technology sectors--two areas that performed exceptionally well over the
last 12 months. Strong stock selection, most notably in the consumer staples and
capital goods sectors, also enhanced overall results. Factors that hindered
performance over this period included the portfolio's exposure to the energy
group as well as some of our individual holdings in the consumer cyclical and
technology sectors.
On the fixed-income side, performance was held back as a result of our
underweighted allocation to Treasuries. The global liquidity crisis had a
significant negative impact on every sector of the bond market except U.S.
government securities. As the crisis spread, even AAA-rated mortgage-backed
securities came under pressure.
Q: GIVEN THE RECENT CORRECTION IN THE STOCK MARKET, HAVE YOU MADE ANY ASSET
ALLOCATION CHANGES IN THE BALANCED FUND?
A: No. As part of our investment philosophy, we do not believe in trying to time
the market. Our mandate with the Balanced Fund is to remain approximately 60%
invested in equities and 40% in fixed income.
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS AND HOW IS THE BALANCED FUND
POSITIONED TO REFLECT THESE VIEWS?
A: Our outlook for the U.S. economy and the stock market has not changed all
that dramatically since the beginning of the year. While the United States is
still considered the global "safe haven," evidence continues to mount supporting
our case that the domestic economy is slowing. We do not believe a recession is
likely over the next six months, but we have positioned the portfolio for a less
robust economy and a challenging earnings environment.
(1) THE BENCHMARK IS A COMPOSITE INDEX MADE UP OF 55% OF THE S&P 500 INDEX
RETURN, 35% OF THE LEHMAN BROTHERS AGGREGATE BOND INDEX RETURN AND 10% OF
THE 90-DAY TREASURY BILL RETURN. THE BENCHMARK IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
3
<PAGE>
PHOENIX BALANCED FUND SERIES (CONTINUED)
Our stock selection is heavily biased toward large-cap, stable growth
companies that have minimal revenue exposure to Asia and other emerging markets.
Health-care, technology and communications services are still our favorite
sectors in the market, while basic materials and capital goods stocks currently
have limited appeal given the cyclicality of their earnings.
With regard to the fixed-income portion, we expect market volatility to
continue over the next six to 12 months at current levels, driven by the
uncertainty surrounding the length and depth of the global liquidity crisis. We
believe our duration-neutral, value-driven management style is well-suited for
these types of market conditions. We are confident that our disciplined approach
and past experience in investing during difficult markets will help lead us to
the most attractive opportunities in the bond market. Of course, past
performance is no guarantee of future results.
NOVEMBER 16, 1998
4
<PAGE>
Phoenix Balanced Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 10/31/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 8.68% 9.94% 11.94% -- --
Class A Shares at POP(3) 3.53 8.87 11.39 -- --
Class B Shares At NAV(2) 7.91 -- -- 11.85 7/15/94
Class B Shares With CDSC(4) 4.44 -- -- 11.53% 7/15/94
Balanced Benchmark(7) 16.38 14.74 13.68 17.67 Note 5
S&P 500 Stock Index(8) 22.02 21.38 17.89 25.53 7/15/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period.
(5) Index information from 7/31/94 to 10/31/98
(6) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(7) The Balanced Benchmark is a composite index made up of 55% of the S&P 500
Index return, 35% of the Lehman Brothers Aggregate Bond Index return and 10%
of the 90-day Treasury bill return. The index's performance does not reflect
sales charges.
(8) The S&P 500 Index is an unmanaged but commonly used measure of stock
total return performance. The S&P 500's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of future
performance. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<TABLE>
<CAPTION>
GROWTH OF $10,000 PERIODS ENDING 10/31
Phoenix Balanced Fund Balanced
Series Class A(6) Benchmark(7) S&P 500 Index(8)
<S> <C> <C> <C>
10/31/88 $9,523.44 $10,000.00 $10,000.00
10/30/89 $11,485.39 $11,942.00 $12,621.29
10/30/90 $12,026.49 $11,811.00 $11,672.02
10/30/91 $15,184.17 $14,687.00 $15,582.84
10/29/92 $16,667.20 $16,078.00 $17,134.23
10/28/93 $18,320.16 $18,114.00 $19,687.15
10/30/94 $17,719.60 $18,345.00 $20,461.52
10/30/95 $20,469.03 $22,097.00 $25,865.90
10/30/96 $22,931.81 $25,553.00 $32,125.48
10/30/97 $27,069.11 $30,960.00 $42,510.43
10/29/98 $29,419.44 $36,030.00 $51,869.72
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
10/31/88 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less
than that shown based on differences in inception dates, fees and sales
charges.
SECTOR WEIGHTINGS 10/31/98
As a percentage of equity holdings
Technology 22%
Health-Care 19%
Consumer Staples 18%
Financials 15%
Communication Services 8%
Capital Goods 6%
Energy 5%
Other 7%
5
<PAGE>
Phoenix Balanced Fund Series
TEN LARGEST EQUITY HOLDINGS AT OCTOBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET
ASSETS)
<TABLE>
<C> <S> <C>
1. International Business Machines Corp. 2.4%
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
2. Intel Corp. 2.2%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
3. Pfizer, Inc. 1.9%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
4. AirTouch Communications, Inc. 1.8%
PROVIDES WIRELESS TELECOMMUNICATIONS AND PAGING SERVICES
5. Warner-Lambert Co. 1.8%
MAKES CONSUMER HEALTH-CARE PRODUCTS
6. Microsoft Corp. 1.8%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
7. Bristol-Myers Squibb Co. 1.7%
COMPREHENSIVE HEALTH-CARE COMPANY
8. Schering-Plough Corp. 1.6%
DEVELOPS, MAKES AND MARKETS PHARMACEUTICAL AND HEALTH-CARE PRODUCTS
9. General Electric Co. 1.6%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
10. Freddie Mac 1.5%
GOVERNMENT AGENCY MORTGAGE ISSUER
</TABLE>
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--6.2%
U.S. TREASURY NOTES--6.2%
U.S. Treasury Notes 4.50%,
9/30/00....................... AAA $ 70,650 $ 70,994,249
U.S. Treasury Notes 5.25%,
8/15/03....................... AAA 26,336 27,470,394
- ----------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $98,754,276) 98,464,643
- ----------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--4.5%
GNMA 6.50%, '23-'26........... 69,130 70,295,394
- ----------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $67,225,771) 70,295,394
- ----------------------------------------------------------------------
MUNICIPAL BONDS--8.2%
CALIFORNIA--3.0%
California State Department of
Water Resources Series S
Revenue 5%, 12/1/29........... AA 3,155 3,139,225
Fresno County Pension
Obligation Taxable 6.21%,
8/15/06....................... AAA $ 4,645 $ 4,819,187
Kern County Pension Obligation
Taxable 7.26%, 8/15/14........ AAA 6,830 7,641,062
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Long Beach Pension Obligation
Taxable 6.87%, 9/1/06......... AAA $ 2,865 $ 3,090,619
Los Angeles County Public
Works Lease Revenue PJ V-B
5.125%, 12/1/29............... AAA 5,340 5,386,725
Orange County General
Obligation Revenue Taxable
7.62%, 9/1/08................. AAA 9,085 10,345,544
San Bernardino County Pension
Obligation Revenue Taxable
6.87%, 8/1/08................. AAA $ 1,530 $ 1,656,225
San Bernardino County Pension
Obligation Revenue Taxable
6.94%, 8/1/09................. AAA 4,170 4,545,300
Sonoma County Pension
Obligation Revenue Taxable
6.625%, 6/1/13................ AAA 3,665 3,857,412
Ventura County Pension Taxable
6.58%, 11/1/06................ AAA 3,560 3,778,050
-------------
48,259,349
-------------
FLORIDA--1.2%
Florida State Department of
Transportation Series A 5%,
7/1/27........................ AA+ 4,275 4,216,219
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
FLORIDA--CONTINUED
Miami Beach Special Obligation
Taxable 8.60%, 9/1/21......... AAA $ 11,675 $ 13,367,875
University of Miami Series A
Revenue Taxable 7.65%,
4/1/20........................ AAA 2,120 2,292,250
-------------
19,876,344
-------------
MASSACHUSETTS--0.5%
Massachusetts State Port
Authority Revenue Taxable
Series C 6.05%, 7/1/02........ AA- 3,340 3,436,025
Massachusetts State Water
Resources Authority Series D
5%, 8/1/24.................... AAA $ 4,275 $ 4,216,219
-------------
7,652,244
-------------
NEW YORK--0.9%
Metropolitan Transportation
Authority Series A 5%,
4/1/23........................ AAA 4,575 4,523,531
New York State Taxable Series
C 6.35%, 3/1/07............... AAA 9,675 10,086,187
-------------
14,609,718
-------------
PENNSYLVANIA--1.0%
Pittsburgh Pension Obligation
Taxable Series C 6.50%,
3/1/17........................ AAA 9,245 9,707,250
Pittsburgh Water & Sewer
Authority
First Lien, Series A 5.05%,
9/1/25........................ AAA 5,475 5,468,156
-------------
15,175,406
-------------
TEXAS--1.1%
Dallas-Fort Worth
International Airport Taxable
6.50%, 11/1/09................ AAA 1,900 2,006,875
Dallas-Fort Worth
International Airport Taxable
6.50%, 11/1/12................ AAA 5,750 6,030,313
Houston Water & Sewer System
Revenue Refunding Jr. Lien
Series D 5%, 12/1/25.......... AAA 4,975 4,931,469
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
TEXAS--CONTINUED
Texas State Taxable Veterans
Limited Series B 6.10%,
12/1/03....................... AA $ 3,995 $ 4,164,788
-------------
17,133,445
-------------
VIRGINIA--0.2%
Newport News Taxable Series B
7.05%, 1/15/25................ AA 3,250 3,371,875
WASHINGTON--0.3%
Washington State Series E
Taxable 5%, 7/1/22............ AA+ 4,225 4,214,438
- ----------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $123,627,269) 130,292,819
- ----------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.6%
AESOP Funding II LLC 144A
97-1, A2 6.40%, 10/20/03(c)... AAA 9,250 9,617,110
Associates Manufactured
Housing Pass Through 97-2, A6
7.075%, 3/15/28............... AAA 3,000 3,028,125
Capita Equipment Receivables
Trust 97-B1, B 6.45%,
8/15/02....................... A+ 5,020 5,131,381
Copelco Capital Funding Corp.
98-A, A3 5.78%, 8/15/01....... AAA 5,000 5,043,750
Fleetwood Credit Corp. Grantor
Trust 96-B, A 6.90%,
3/15/12....................... AAA 2,340 2,394,739
Green Tree Financial Corp.
96-2, M1 7.60%, 4/15/27....... AA- 9,250 9,755,859
Green Tree Home Improvement
Loan Trust 96-C, HIA2 6.90%,
7/15/21....................... AAA 277 278,434
Premier Auto Trust 98-1, A4
5.70%, 10/6/02................ Aaa(d) 5,250 5,308,242
- ----------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $39,423,206) 40,557,640
- ----------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
CORPORATE BONDS--4.2%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.3%
CSC Holdings, Inc. 7.25%,
7/15/08....................... BB+ $ 4,840 $ 4,706,900
COMPUTERS (SOFTWARE & SERVICES)--0.2%
Computer Associates
International, Inc. 6.375%,
4/15/05....................... A- 3,270 3,245,475
GAMING, LOTTERY & PARIMUTUEL COMPANIES--0.2%
Station Casinos, Inc. 10.125%,
3/15/06....................... B+ 3,000 2,977,500
HEALTH CARE (DIVERSIFIED)--0.4%
Tenet Healthcare Corp 144A
8.125%, 12/1/08(c)............ BB- 6,250 6,195,312
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.5%
Boston Scientific Corp.
6.625%, 3/15/05............... BBB 7,000 6,991,250
MANUFACTURING (DIVERSIFIED)--0.4%
Tyco International Group SA
6.375%, 6/15/05............... A- 6,700 6,859,125
PAPER & FOREST PRODUCTS--0.3%
Buckeye Cellulose Corp. 9.25%,
9/15/08....................... BB- 4,410 4,470,637
RETAIL (FOOD CHAINS)--0.4%
Meyer (Fred), Inc. 7.45%,
3/1/08........................ BB+ 5,800 6,090,000
SERVICES (COMMERCIAL & CONSUMER)--0.2%
United Rentals, Inc. 144A
9.50%, 6/1/08(c).............. BB- 1,570 1,542,525
United Rentals, Inc. 144A
8.80%, 8/15/08(c)............. BB- 1,570 1,450,288
-------------
2,992,813
-------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.3%
Comcast Cellular Holdings,
Inc. Series B 9.50%, 5/1/07... BB+ 4,840 4,997,300
TELECOMMUNICATIONS (LONG DISTANCE)--0.3%
Qwest Communications
International, Inc.
144A 7.50%, 11/1/08(c)........ BB+ 4,935 5,009,025
TEXTILES (HOME FURNISHINGS)--0.3%
Westpoint Stevens, Inc.
7.875%, 6/15/05............... BB 5,000 5,062,500
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
TRUCKERS & MARINE--0.2%
Teekay Shipping Corp. 8.32%,
2/1/08........................ BB+ $ 3,075 $ 2,963,531
TRUCKS & PARTS--0.2%
Cummins Engine, Inc. 6.45%,
3/1/05........................ BBB+ 3,850 3,797,063
- ----------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $65,490,762) 66,358,431
- ----------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--8.1%
CS First Boston Corp. 97-SPCE,
D 144A 7.332%, 4/20/08(c)..... NR 4,039 4,097,061
CS First Boston Mortgage
Securities Corp. 97-C2, B
6.72%, 11/17/07............... Aa(d) 9,000 9,101,250
CS First Boston Mortgage
Securities Corp. 95-AEW1, B
7.182%, 11/25/27.............. AA- 6,450 6,468,141
Case Equipment Loan Trust
98-A, A4 5.83%, 2/15/05....... AAA 11,600 11,785,716
DLJ Mortgage Acceptance Corp.
96-CF1, A1B 144A 7.58%,
2/12/06(c).................... AAA 6,550 6,891,828
EQCC Home Equity Loan Trust
97-3, A4 6.28%, 5/15/12....... AAA 725 734,033
First Union Lehman Brothers
97-C1, B 7.43%, 4/18/07....... Aa(d) 8,807 9,324,411
G.E. Capital Mortgage
Services, Inc. 96-8, M 7.25%,
5/25/26....................... AA 5,307 5,318,435
GMAC Commercial Mortgage
Securities, Inc. 97-C2, B
6.703%, 12/15/07.............. Aa(d) 5,000 4,989,062
Lehman Large Loan 97-LLI, B
6.95%, 3/12/07................ AA 10,825 11,331,558
Merrill Lynch Mortgage
Investors, Inc. 96-C2, A3
6.96%, 11/21/28............... AAA $ 5,000 $ 5,204,688
Nationslink Funding Corp.
96-1, B 7.69%, 12/20/05....... AA 6,157 6,574,501
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
Prudential Home Mortgage
Securities 93-L, 2B3 144A
6.641%, 12/25/23(c)........... A(d) $ 5,000 $ 4,814,063
Residential Asset
Securitization Trust 96-A8, A1
8%, 12/25/26.................. AAA 1,075 1,076,865
Residential Funding Mortgage
Securities I 96-S8, A4 6.75%,
3/25/11....................... AAA 2,809 2,805,088
Residential Funding Mortgage
Securities I 96-S1, A11 7.10%,
1/25/26....................... AAA 7,500 7,650,000
Residential Funding Mortgage
Securities I 96-S4, M1 7.25%,
2/25/26....................... AA 5,855 5,958,873
Securitized Asset Sales 93-J,
2B 6.807%, 11/28/23........... A(d) 7,223 6,963,368
Structured Asset Securities
Corp. 93-C1, B 6.60%,
10/25/24...................... A+ 4,550 4,605,821
Structured Asset Securities
Corp. 95-C4, B 7%, 6/25/26.... AA 5,000 5,046,875
Triangle Funding Ltd. 98-2A, 3
7.163%, 10/15/04.............. BBB $ 8,000 $ 8,013,750
- ----------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $125,921,057) 128,755,387
- ----------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--2.0%
COLOMBIA--0.6%
Republic of Colombia 7.70%,
7/14/03....................... NR 9,140 7,700,450
Republic of Colombia 7.25%,
2/23/04....................... BBB- 1,750 1,408,750
-------------
9,109,200
-------------
CROATIA--0.5%
Croatia Series B 6.5625%,
7/31/06(e).................... BBB- 4,727 3,876,525
Croatia Series A 6.5625%,
7/31/10(e).................... BBB- 5,805 4,527,900
-------------
8,404,425
-------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -------------
<S> <C> <C> <C>
POLAND--0.9%
Poland Bearer PDI 4%,
10/27/14(e)................... BBB- $ 15,430 $ 14,050,944
- ----------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $33,297,636) 31,564,569
- ----------------------------------------------------------------------
FOREIGN CORPORATE BONDS--1.2%
ARGENTINA--0.3%
Compania de
Radiocomunicaciones Moviles SA
9.25%, 5/8/08................. BBB 2,200 1,936,000
Telefonica de Argentina 144A
9.125%, 5/7/08(c)............. BBB- 3,475 3,075,375
-------------
5,011,375
-------------
CHILE--0.2%
Petropower I Funding Trust
144A 7.36%, 2/15/14(c)........ BBB $ 2,600 $ 2,197,000
JAPAN--0.7%
IBJ Preferred Capital Co. LLC
144A 8.79%, 12/29/49(c)....... Baa(d) 6,800 5,449,724
SB Treasury Co. LLC 144A
9.40%, 12/29/49(c)............ BBB 6,800 6,131,098
-------------
11,580,822
-------------
- ----------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $21,708,077) 18,789,197
- ----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C> <C>
PREFERRED STOCKS--0.6%
REITS--0.6%
Home Ownership Funding 2, Step-down Pfd. 144A
13.338%(c)..................................... 10,000 9,805,110
- --------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $9,086,565) 9,805,110
- --------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
COMMON STOCKS--58.3%
BANKS (MAJOR REGIONAL)--2.3%
Bank One Corp.................................. 474,566 $ 23,194,413
Mellon Bank Corp............................... 113,500 6,824,187
U.S. Bancorp................................... 155,000 5,657,500
-------------
35,676,100
-------------
BANKS (MONEY CENTER)--0.8%
BankAmerica Corp............................... 229,340 13,172,716
BEVERAGES (ALCOHOLIC)--0.6%
Anheuser-Busch Companies, Inc.................. 168,700 10,027,106
BEVERAGES (NON-ALCOHOLIC)--0.9%
PepsiCo, Inc................................... 409,900 13,834,125
BROADCASTING (TELEVISION, RADIO & CABLE)--2.8%
CBS Corp....................................... 200,600 5,604,262
Chancellor Media Corp.(b)...................... 136,000 5,219,000
Clear Channel Communications, Inc.(b).......... 183,200 $ 8,347,050
Liberty Media Group(b)......................... 246,400 9,378,600
Tele-Communications, Inc.(b)................... 390,700 16,458,237
-------------
45,007,149
-------------
COMPUTERS (HARDWARE)--2.4%
International Business Machines Corp........... 251,800 37,376,562
COMPUTERS (NETWORKING)--0.7%
Cisco Systems, Inc.(b)......................... 185,137 11,663,631
COMPUTERS (PERIPHERALS)--1.1%
EMC Corp.(b)................................... 264,600 17,033,625
COMPUTERS (SOFTWARE & SERVICES)--6.4%
America Online, Inc.(b)........................ 94,200 11,969,287
BMC Software, Inc.(b).......................... 289,000 13,890,062
Compuware Corp.(b)............................. 346,000 18,748,875
Edwards (J.D.) & Co.(b)........................ 134,900 4,417,975
HBO & Co....................................... 365,300 9,589,125
Microsoft Corp.(b)............................. 265,300 28,088,637
Oracle Corp.(b)................................ 231,900 6,855,544
Sterling Commerce, Inc.(b)..................... 141,800 4,998,450
Yahoo!, Inc.(b)................................ 19,300 2,525,284
-------------
101,083,239
-------------
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
CONSUMER FINANCE--0.6%
Capital One Financial Corp..................... 97,500 $ 9,920,625
DISTRIBUTORS (FOOD & HEALTH)--0.9%
Cardinal Health, Inc........................... 145,400 13,749,387
ELECTRICAL EQUIPMENT--1.6%
General Electric Co............................ 286,800 25,095,000
ELECTRONICS (SEMICONDUCTORS)--2.2%
Intel Corp..................................... 395,000 35,229,062
FINANCIAL (DIVERSIFIED)--3.3%
Citigroup, Inc................................. 324,300 15,262,369
Freddie Mac.................................... 420,300 24,167,250
Morgan Stanley Dean Witter & Co................ 194,900 12,619,775
-------------
52,049,394
-------------
HEALTH CARE (DIVERSIFIED)--3.5%
Bristol-Myers Squibb Co........................ 236,200 $ 26,114,862
Warner-Lambert Co.............................. 367,700 28,818,487
-------------
54,933,349
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--4.3%
Pfizer, Inc.................................... 278,300 29,865,069
Schering-Plough Corp........................... 252,400 25,965,650
Watson Pharmaceuticals, Inc.(b)................ 215,200 11,970,500
-------------
67,801,219
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.2%
Baxter International, Inc...................... 159,800 9,578,012
Becton, Dickinson and Co....................... 108,500 4,570,563
Genzyme Corp.(b)............................... 109,100 4,589,019
Medtronic, Inc................................. 245,100 15,931,500
-------------
34,669,094
-------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.4%
Clorox Co. (The)............................... 35,600 3,889,300
Colgate-Palmolive Co........................... 54,600 4,825,275
Procter & Gamble Co. (The)..................... 156,300 13,891,163
-------------
22,605,738
-------------
INSURANCE (LIFE/HEALTH)--0.3%
UNUM Corp...................................... 124,200 5,519,138
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
INSURANCE (MULTI-LINE)--1.2%
American International Group, Inc.............. 159,300 $ 13,580,325
ReliaStar Financial Corp....................... 108,700 4,762,419
-------------
18,342,744
-------------
INSURANCE (PROPERTY-CASUALTY)--0.4%
Allstate Corp.................................. 166,600 7,174,213
MANUFACTURING (DIVERSIFIED)--1.2%
Tyco International Ltd......................... 308,300 19,095,331
OIL (DOMESTIC INTEGRATED)--0.8%
USX-Marathon Group............................. 399,500 13,058,656
OIL (INTERNATIONAL INTEGRATED)--1.6%
Amoco Corp..................................... 353,100 19,817,738
Conoco, Inc.(b)................................ 191,700 4,768,538
-------------
24,586,276
-------------
OIL & GAS (DRILLING & EQUIPMENT)--1.4%
Halliburton Co................................. 266,100 $ 9,562,969
Schlumberger Ltd............................... 133,200 6,993,000
Transocean Offshore, Inc....................... 136,000 5,023,500
-------------
21,579,469
-------------
RETAIL (BUILDING SUPPLIES)--0.9%
Home Depot, Inc................................ 338,200 14,711,700
RETAIL (COMPUTERS & ELECTRONICS)--0.3%
Tandy Corp..................................... 104,300 5,169,369
RETAIL (DRUG STORES)--2.2%
CVS Corp....................................... 390,700 17,850,106
Rite Aid Corp.................................. 439,300 17,434,719
-------------
35,284,825
-------------
RETAIL (FOOD CHAINS)--2.3%
Meyer (Fred), Inc.(b).......................... 278,290 14,836,336
Safeway, Inc.(b)............................... 489,800 23,418,563
-------------
38,254,899
-------------
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
RETAIL (SPECIALTY)--1.4%
Amazon.com, Inc.(b)............................ 21,400 $ 2,705,763
Borders Group, Inc.(b)......................... 225,300 5,716,988
Staples, Inc.(b)............................... 321,450 10,487,306
-------------
18,910,057
-------------
SERVICES (COMMERCIAL & CONSUMER)--0.3%
ServiceMaster Co. (The)........................ 215,800 4,558,775
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.8%
AirTouch Communications, Inc.(b)............... 514,200 28,795,200
TELECOMMUNICATIONS (LONG DISTANCE)--2.0%
AT&T Corp...................................... 241,200 15,014,700
MCI WorldCom, Inc.(b).......................... 290,699 16,061,144
-------------
31,075,844
-------------
TELEPHONE--1.2%
BellSouth Corp................................. 132,200 10,551,213
SBC Communications, Inc........................ 183,700 8,507,606
-------------
19,058,819
-------------
WASTE MANAGEMENT--1.0%
Waste Management, Inc.......................... 354,500 $ 15,996,813
- --------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $768,935,591) 922,099,249
- --------------------------------------------------------------------------
FOREIGN COMMON STOCKS--0.5%
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.5%
Elan Corp. PLC Sponsored ADR (Ireland)(b)...... 102,800 7,202,425
- --------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $5,922,385) 7,202,425
- --------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.4%
(IDENTIFIED COST $1,359,392,595) 1,524,184,864
- --------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix Balanced Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.3%
COMMERCIAL PAPER--2.3%
Donnelley (R.R.) & Sons 5.60%,
11/2/98............................. A-1 $ 5,395 $ 5,394,155
Enterprise Funding Corp. 5.60%,
11/3/98............................. A-1 7,170 7,167,769
Enterprise Funding Corp. 5.20%,
11/5/98............................. A-1 1,739 1,734,479
Private Export Funding Corp. 5.10%,
11/5/98............................. A-1+ 2,000 1,997,733
Lexington Parker Capital Co. 5.45%,
11/6/98............................. A-1 4,010 4,006,965
Albertson's, Inc. 5.15%, 11/9/98.... A-1 $ 300 $ 299,657
General Electric Capital Corp.
5.25%, 11/9/98...................... A-1+ 3,000 2,996,500
Greenwich Funding Corp. 5.25%,
11/9/98............................. A-1+ 4,135 4,130,175
Dupont (E.I.) de Nemours & Co.
5.07%, 11/13/98..................... A-1+ 3,480 3,478,039
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- -------------
<S> <C> <C> <C>
COMMERCIAL PAPER--CONTINUED
General Electric Capital Corp.
5.45%, 11/13/98..................... A-1+ $ 100 $ 99,818
Associates Corp. 5.75%, 11/15/98.... A-1+ 330 329,270
AlliedSignal, Inc. 5.40%,
11/18/98............................ A-1 3,500 3,491,074
Private Export Funding Corp. 5.25%,
11/20/98............................ A-1+ 1,000 997,229
Lexington Parker Capital Co. LLC
5.45%, 12/9/98...................... A-1 450 447,664
-------------
36,570,527
-------------
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $36,571,002) 36,570,527
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.7%
(IDENTIFIED COST $1,395,963,597) 1,560,755,391(a)
Cash and receivables, less liabilities--1.3% 20,707,648
----------------
NET ASSETS--100.0% $ 1,581,463,039
----------------
----------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $186,272,236 and gross
depreciation of $24,771,471 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$1,399,254,626.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998, these securities amounted to a value of $66,275,519 or 4.2% of net
assets.
(d) As rated by Moody's, Fitch or Duff & Phelps
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
12 See Notes to Financial Statements
<PAGE>
Phoenix Balanced Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $1,395,963,597) $1,560,755,391
Short-term investments held as collateral for loaned
securities 38,154,870
Receivables
Investment securities sold 32,172,697
Interest and dividends 6,926,602
Fund shares sold 919,423
--------------
Total assets 1,638,928,983
--------------
LIABILITIES
Payables
Custodian 464,971
Investments securities purchased 15,221,288
Fund shares repurchased 1,580,197
Collateral on securities loaned 38,154,870
Investment advisory fee 688,954
Transfer agent fee 553,762
Distribution fee 340,561
Trustees' fee 3,722
Financial agent fee 920
Accrued expenses 456,699
--------------
Total liabilities 57,465,944
--------------
NET ASSETS $1,581,463,039
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $1,351,989,963
Undistributed net investment income 6,718,980
Accumulated net realized gain 57,962,302
Net unrealized appreciation 164,791,794
--------------
NET ASSETS $1,581,463,039
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,548,474,997) 95,034,932
Net asset value per share $16.29
Offering price per share $16.29/(1-4.75%) $17.10
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $32,988,042) 2,029,635
Net asset value and offering price per share $16.25
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 47,934,281
Dividends 8,837,160
Security lending 217,227
Foreign taxes withheld (78,019)
-------------
Total investment income 56,910,649
-------------
EXPENSES
Investment advisory fee 8,930,936
Distribution fee, Class A 4,134,578
Distribution fee, Class B 323,532
Financial agent fee 426,940
Transfer agent 2,276,942
Printing 198,328
Custodian 197,276
Professional 54,228
Registration 38,214
Trustees 16,465
Miscellaneous 38,627
-------------
Total expenses 16,636,066
-------------
NET INVESTMENT INCOME 40,274,583
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 66,036,415
Net change in unrealized appreciation (depreciation) on
investments 40,037,609
-------------
NET GAIN ON INVESTMENTS 106,074,024
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 146,348,607
-------------
-------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Balanced Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 40,274,583 $ 47,448,167
Net realized gain 66,036,415 250,161,443
Net change in unrealized appreciation
(depreciation) 40,037,609 404,566
--------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 146,348,607 298,014,176
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (38,891,099) (48,278,671)
Net investment income, Class B (547,088) (561,622)
Net realized gains, Class A (250,194,981) (194,038,812)
Net realized gains, Class B (4,587,560) (2,800,356)
--------------- ---------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (294,220,728) (245,679,461)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(4,154,476 and 4,597,468 shares,
respectively) 68,017,312 78,630,179
Net asset value of shares issued from
reinvestment of distributions
(17,381,042 and 13,753,866 shares,
respectively) 266,854,723 223,224,574
Cost of shares repurchased (20,727,390
and 32,162,386 shares, respectively) (343,685,337) (548,027,979)
--------------- ---------------
Total (8,813,302) (246,173,226)
--------------- ---------------
CLASS B
Proceeds from sales of shares (375,257
and 319,964 shares, respectively) 6,251,773 5,480,183
Net asset value of shares issued from
reinvestment of distributions
(309,117 and 189,697 shares,
respectively) 4,734,129 3,074,179
Cost of shares repurchased (329,841
and 329,164 shares, respectively) (5,437,703) (5,630,228)
--------------- ---------------
Total 5,548,199 2,924,134
--------------- ---------------
DECREASE IN NET ASSETS FROM SHARE
TRANSACTIONS (3,265,103) (243,249,092)
--------------- ---------------
NET DECREASE IN NET ASSETS (151,137,224) (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
$6,718,980 AND $4,441,011,
RESPECTIVELY] $ 1,581,463,039 $ 1,732,600,263
--------------- ---------------
--------------- ---------------
</TABLE>
14 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
------------------------------------------------------------------
YEAR ENDED OCTOBER 31
------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.07 $ 17.56 $ 17.04 $ 15.23 $ 16.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.42 0.48 0.48 0.52 0.48
Net realized and unrealized gain
(loss) 0.90 2.38 1.46 1.80 (1.01)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 1.32 2.86 1.94 2.32 (0.53)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.40) (0.48) (0.49) (0.51) (0.49)
Dividends from net realized gains (2.70) (1.87) (0.93) -- (0.39)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (3.10) (2.35) (1.42) (0.51) (0.88)
----- ----- ----- ----- -----
Change in net asset value (1.78) 0.51 0.52 1.81 (1.41)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 16.29 $ 18.07 $ 17.56 $ 17.04 $ 15.23
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 8.68% 18.04% 12.03% 15.52% (3.28)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $1,548,475 $1,702,385 $1,897,306 $2,345,440 $2,601,808
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.97% 0.98% 1.01% 1.02% 0.96%
Net investment income 2.41% 2.65% 2.74% 3.27% 3.03%
Portfolio turnover 138% 206% 191% 197% 159%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
---------------------------------------------------- 7/15/94 TO
1998 1997 1996 1995 10/31/94
<S> <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 0.30 0.35 0.35 0.40 0.09
Net realized and unrealized gain
(loss) 0.90 2.37 1.47 1.80 (0.04)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 1.20 2.72 1.82 2.20 0.05
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.29) (0.35) (0.36) (0.42) (0.09)
Dividends from net realized gains (2.70) (1.87) (0.93) -- --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (2.99) (2.22) (1.29) (0.42) (0.09)
----- ----- ----- ----- -----
Change in net asset value (1.79) 0.50 0.53 1.78 (0.04)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 16.25 $ 18.04 $ 17.54 $ 17.01 $ 15.23
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 7.91% 17.13% 11.24% 14.68% (0.34)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $32,988 $30,216 $26,209 $16,971 $4,629
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.72% 1.73% 1.76% 1.78% 1.65%(2)
Net investment income 1.66% 1.90% 1.96% 2.46% 2.36%(2)
Portfolio turnover 138% 206% 191% 197% 159%
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
See Notes to Financial Statements 15
<PAGE>
PHOENIX GROWTH FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix Growth Fund is appropriate for investors seeking long-term capital
appreciation through investments in common stocks.
Q: HOW DID THE FUND PERFORM FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998?
A: Both Class A shares and Class B shares outperformed their peer universe,
returning 12.26% and 11.41%, respectively, compared with an average return of
9.61% for a universe of 945 growth funds, according to Lipper Analytical
Services, Inc. In contrast, the S&P 500 Index earned 22.02% for the same
period.(1) All performance figures assume reinvestment of distributions and
exclude the effect of sales charges.
Q: OVER THE PAST 12 MONTHS, WHAT FACTORS CONTRIBUTED POSITIVELY TO THE GROWTH
FUND'S PERFORMANCE? WHAT FACTORS NEGATIVELY IMPACTED RESULTS?
A: During this latest fiscal year ended October 31, 1998, positive contributors
to the Growth Fund's performance included our decision to overweight the
health-care and technology sectors--two areas that performed exceptionally well
over the last 12 months. Strong stock selection, most notably in the consumer
staples and capital goods sectors, also enhanced overall results. Factors that
hindered performance over this period included the portfolio's exposure to the
energy group as well as some of our individual holdings in the consumer cyclical
and technology sectors.
Q: GIVEN THE RECENT CORRECTION IN THE STOCK MARKET, HAVE YOU MADE ANY ASSET
ALLOCATION CHANGES IN THE FUND?
A: No. As part of our investment philosophy, we do not believe in trying to time
the market. Our mandate with the Growth Fund is to remain fully invested in
equities and concentrate our resources on finding the best long-term growth
opportunities that the stock market has to offer. Instead of attempting to raise
cash during this summer's market correction, we focused our attention on bargain
hunting for high-quality growth companies that were at long last, trading at
more attractive valuations. Although it is never a comfortable feeling to be
buying in a declining market, historically, we believe it has been a sound
strategy for long-term investors.
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS, AND HOW IS THE GROWTH FUND
POSITIONED TO REFLECT THESE VIEWS?
A: Our outlook for the U.S. economy and the stock market has not changed all
that dramatically since the beginning of the year. While the United States is
still considered the global "safe haven," evidence continues to mount,
supporting our case that the domestic economy is slowing. We do not believe a
recession is likely over the next six months, but we have positioned the
portfolio for a less robust economy and a challenging earnings environment.
Our stock selection is heavily biased toward large-cap, stable growth
companies that have minimal revenue exposure to Asia and other emerging markets.
Health-care, technology and communications services are still our favorite
sectors in the market, while basic materials and capital goods stocks currently
have limited appeal given the cyclicality of their earnings.
NOVEMBER 16, 1998
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
16
<PAGE>
Phoenix Growth Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 10/31/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 12.26% 15.57% 14.50% -- --
Class A Shares at POP(3) 6.92 14.45% 13.94% -- --
Class B Shares at NAV(2) 11.41 -- -- 17.91% 7/15/94
Class B Shares with CDSC(4) 8.00 -- -- 17.64 7/15/94
S&P 500 Index(6) 22.02 21.38 17.89 25.53 7/15/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of
any sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period.
(5) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(6) The S&P 500 Index in an unmanaged but commonly used measure of stock
total return performance. The S&P 500's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of future
performance. The investment return and principal value of an investment "will
fluctuate so that an investor's shares, when redeemed, " may be worth more or
less than their original cost.
<TABLE>
<CAPTION>
GROWTH OF $10,000 PERIODS ENDING 10/31
Phoenix Growth Fund
Series Class A(5) S&P 500 Index(6)
<S> <C> <C>
10/31/88 $9,524.09 $10,000.00
10/31/89 $11,565.72 $12,621.29
10/31/90 $11,918.82 $11,672.02
10/31/91 $15,610.24 $15,582.84
10/31/92 $16,694.64 $17,134.23
10/31/93 $17,896.71 $19,687.15
10/31/94 $18,265.76 $20,461.52
10/31/95 $22,632.73 $25,865.90
10/31/96 $26,330.93 $32,125.48
10/31/97 $32,863.04 $42,510.43
10/31/98 $36,891.86 $51,869.72
</TABLE>
This Growth of $10,p00 chart assumes an initial ""investment of $10,000 made
on 10/31/88 in " Class A shares and reflects the maximum sales charge of
4.75% on the initial investment. Performance assumes dividends and capital
gains are reinvested. The performance of other share classes will be greater
or less than that shown based on differences in "inception dates, fees and
sales charges.
SECTOR WEIGHTINGS 10/31/98
As a percentage of equity holdings
Technology 22%
Health-Care 19%
Consumer Staples 18%
Financials 15%
Communication Services 9%
Capital Goods 6%
Energy 6%
Other 5%
17
<PAGE>
Phoenix Growth Fund Series
TEN LARGEST HOLDINGS AT OCTOBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. International Business Machines Corp. 4.0%
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
2. Intel Corp. 3.7%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
3. Pfizer, Inc. 3.1%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
4. AirTouch Communications, Inc. 3.0%
PROVIDES WIRELESS TELECOMMUNICATIONS AND PAGING SERVICES
5. Warner-Lambert Co. 3.0%
MAKES CONSUMER HEALTH-CARE PRODUCTS
6. Microsoft Corp. 2.9%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
7. Schering-Plough Corp. 2.8%
DEVELOPS, MAKES AND MARKETS PHARMACEUTICAL AND HEALTH-CARE PRODUCTS
8. Bristol-Myers Squibb Co. 2.7%
COMPREHENSIVE HEALTH-CARE COMPANY
9. General Electric Co. 2.6%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
10. Freddie Mac 2.5%
GOVERNMENT AGENCY MORTGAGE ISSUER
</TABLE>
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
COMMON STOCKS--97.2%
BANKS (MAJOR REGIONAL)--3.7%
Bank One Corp........................... 1,210,058 $ 59,141,585
Mellon Bank Corp........................ 307,300 18,476,412
U.S. Bancorp............................ 417,500 15,238,750
-------------
92,856,747
-------------
BANKS (MONEY CENTER)--1.4%
BankAmerica Corp........................ 600,869 34,512,413
BEVERAGES (ALCOHOLIC)--1.1%
Anheuser-Busch Companies, Inc........... 455,700 27,085,669
BEVERAGES (NON-ALCOHOLIC)--1.4%
PepsiCo, Inc............................ 1,077,200 36,355,500
BROADCASTING (TELEVISION, RADIO & CABLE)--4.8%
CBS Corp................................ 535,100 14,949,356
Chancellor Media Corp.(b)............... 361,400 13,868,725
Clear Channel Communications, Inc.(b)... 488,600 22,261,837
Liberty Media Group(b).................. 657,200 25,014,675
Tele-Communications, Inc.(b)............ 1,062,400 44,753,600
-------------
120,848,193
-------------
COMPUTERS (HARDWARE)--4.0%
International Business Machines Corp.... 671,500 99,675,781
COMPUTERS (NETWORKING)--1.2%
Cisco Systems, Inc.(b).................. 495,600 31,222,800
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
COMPUTERS (PERIPHERALS)--1.8%
EMC Corp.(b)............................ 696,300 $ 44,824,312
COMPUTERS (SOFTWARE & SERVICES)--10.6%
America Online, Inc.(b)................. 243,800 30,977,837
BMC Software, Inc.(b)................... 727,600 34,970,275
Compuware Corp.(b)...................... 922,700 49,998,806
Edwards (J.D.) & Co.(b)................. 361,200 11,829,300
HBO & Co................................ 960,000 25,200,000
Microsoft Corp.(b)...................... 698,200 73,921,925
Oracle Corp.(b)......................... 619,200 18,305,100
Sterling Commerce, Inc.(b).............. 383,100 13,504,275
Yahoo!, Inc.(b)......................... 49,800 6,516,019
-------------
265,223,537
-------------
CONSUMER FINANCE--1.0%
Capital One Financial Corp.............. 249,100 25,345,925
DISTRIBUTORS (FOOD & HEALTH)--1.5%
Cardinal Health, Inc.................... 392,500 37,115,781
ELECTRICAL EQUIPMENT--2.6%
General Electric Co..................... 758,100 66,333,750
ELECTRONICS (SEMICONDUCTORS)--3.7%
Intel Corp.............................. 1,038,500 92,621,219
FINANCIAL (DIVERSIFIED)--5.4%
Citigroup, Inc.......................... 849,750 39,991,359
Freddie Mac............................. 1,107,300 63,669,750
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Phoenix Growth Fund Series
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
FINANCIAL (DIVERSIFIED)--CONTINUED
Morgan Stanley Dean Witter & Co......... 516,800 $ 33,462,800
-------------
137,123,909
-------------
HEALTH CARE (DIVERSIFIED)--5.6%
Bristol-Myers Squibb Co................. 603,000 66,669,187
Warner-Lambert Co....................... 949,800 74,440,575
-------------
141,109,762
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--7.1%
Pfizer, Inc............................. 732,600 78,617,137
Schering-Plough Corp.................... 672,300 69,162,862
Watson Pharmaceuticals, Inc.(b)......... 569,000 31,650,625
-------------
179,430,624
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--3.6%
Baxter International, Inc............... 423,700 25,395,519
Becton, Dickinson and Co................ 279,300 11,765,512
Genzyme Corp.(b)........................ 294,800 12,400,025
Medtronic, Inc.......................... 645,300 41,944,500
-------------
91,505,556
-------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--2.4%
Clorox Co. (The)........................ 93,800 10,247,650
Colgate-Palmolive Co.................... 143,700 12,699,488
Procter & Gamble Co. (The).............. 411,300 36,554,288
-------------
59,501,426
-------------
INSURANCE (LIFE/HEALTH)--0.6%
UNUM Corp............................... 310,600 13,802,288
INSURANCE (MULTI-LINE)--1.9%
American International Group, Inc....... 406,200 34,628,550
ReliaStar Financial Corp................ 292,100 12,797,631
-------------
47,426,181
-------------
INSURANCE (PROPERTY-CASUALTY)--0.8%
Allstate Corp........................... 442,800 19,068,075
MANUFACTURING (DIVERSIFIED)--2.0%
Tyco International Ltd.................. 819,700 50,770,169
OIL (DOMESTIC INTEGRATED)--1.4%
USX-Marathon Group...................... 1,079,300 35,279,619
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
OIL (INTERNATIONAL INTEGRATED)--2.6%
Amoco Corp.............................. 945,400 $ 53,060,575
Conoco, Inc.(b)......................... 506,800 12,606,650
-------------
65,667,225
-------------
OIL & GAS (DRILLING & EQUIPMENT)--2.3%
Halliburton Co.......................... 709,700 25,504,844
Schlumberger Ltd........................ 351,000 18,427,500
Transocean Offshore, Inc................ 368,000 13,593,000
-------------
57,525,344
-------------
RETAIL (BUILDING SUPPLIES)--1.5%
Home Depot, Inc......................... 891,000 38,758,500
RETAIL (COMPUTERS & ELECTRONICS)--0.6%
Tandy Corp.............................. 281,100 13,932,019
RETAIL (DRUG STORES)--3.9%
CVS Corp................................ 1,038,000 47,423,625
Rite Aid Corp........................... 1,246,600 49,474,438
-------------
96,898,063
-------------
RETAIL (FOOD CHAINS)--4.1%
Meyer (Fred), Inc.(b)................... 739,880 39,444,853
Safeway, Inc.(b)........................ 1,322,900 63,251,156
-------------
102,696,009
-------------
RETAIL (SPECIALTY)--2.0%
Amazon.com, Inc.(b)..................... 61,000 7,712,688
Borders Group, Inc.(b).................. 610,000 15,478,750
Staples, Inc.(b)........................ 849,600 27,718,200
-------------
50,909,638
-------------
SERVICES (COMMERCIAL & CONSUMER)--0.5%
ServiceMaster Co. (The)................. 592,800 12,522,900
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--3.0%
AirTouch Communications, Inc.(b)........ 1,357,200 76,003,200
TELECOMMUNICATIONS (LONG DISTANCE)--3.4%
AT&T Corp............................... 655,900 40,829,775
MCI WorldCom, Inc.(b)................... 793,235 43,826,234
-------------
84,656,009
-------------
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Phoenix Growth Fund Series
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
TELEPHONE--2.0%
BellSouth Corp.......................... 348,300 $ 27,798,694
SBC Communications, Inc................. 468,500 21,697,406
-------------
49,496,100
-------------
WASTE MANAGEMENT--1.7%
Waste Management, Inc................... 42,500 42,530,313
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,999,917,072) 2,440,634,556
- --------------------------------------------------------------------------------
FOREIGN COMMON STOCKS--0.8%
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.8%
Elan Corp. PLC Sponsored ADR
(Ireland)(b)............................ 273,000 19,127,062
- --------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $12,835,602) 19,127,062
- --------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.0%
(IDENTIFIED COST $2,012,752,674) 2,459,761,618
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
<S> <C> <C> <C>
MEDIUM-TERM NOTES--0.1%
Associates Corporation of North America
5.65%, 6/15/99.......................... A-1+ $ 2,000 2,009,936
- --------------------------------------------------------------------------------
TOTAL MEDIUM-TERM NOTES
(IDENTIFIED COST $1,997,985) 2,009,936
- --------------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.5%
COMMERCIAL PAPER--0.5%
Cargill, Inc. 5.60%, 11/2/98............ A-1+ $ 3,650 $ 3,649,432
Goldman, Sachs & Co. 5.25%, 12/11/98.... A-1+ 805 800,227
Greenwich Funding Corp. 5.35%, 1/8/99... A-1+ 2,000 1,981,202
Coca-Cola Co. 4.89%, 1/11/99............ A-1+ 3,000 2,999,090
Minnesota Mining and Manufacturing Co.
4.95%, 1/21/99.......................... A-1+ 3,000 2,978,871
-------------
12,408,822
-------------
FEDERAL AGENCY SECURITIES--0.0%
FFCB 6.02% 1/22/99...................... AAA 1,500 1,503,591
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $13,872,329) 13,912,413
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.6%
(IDENTIFIED COST $2,028,622,988) 2,475,683,967(a)
Cash and receivables, less liabilities--1.4% 34,592,998
----------------
NET ASSETS--100.0% $ 2,510,276,965
----------------
----------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $493,154,553 and gross
depreciation of $48,550,269 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$2,031,079,683.
(b) Non-income producing.
20 See Notes to Financial Statements
<PAGE>
Phoenix Growth Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $2,028,622,988) $2,475,683,967
Short-term investments held as collateral for loaned
securities 8,735,352
Cash 1,657
Receivables
Investment securities sold 67,163,681
Dividends and interest 1,561,000
Fund shares sold 294,205
--------------
Total assets 2,553,439,862
--------------
LIABILITIES
Payables
Investment securities purchased 26,434,454
Collateral on securities loaned 8,735,352
Fund shares repurchased 4,842,897
Investment advisory fee 1,325,349
Distribution fee 544,354
Transfer agent fee 782,012
Financial agent fee 46,507
Trustees' fees 3,600
Accrued expenses 448,372
--------------
Total liabilities 43,162,897
--------------
NET ASSETS $2,510,276,965
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest 1,828,160,596
Accumulated net realized gain 235,055,390
Net unrealized appreciation 447,060,979
--------------
NET ASSETS $2,510,276,965
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,434,217,136) 97,558,058
Net asset value per share $24.95
Offering price per share $24.95/(1-4.75%) $26.19
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $76,059,829) 3,116,622
Net asset value and offering price per share $24.40
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 19,305,439
Interest 3,019,397
Security lending 190,319
------------
Total investment income 22,515,155
------------
EXPENSES
Investment advisory fee 17,237,170
Distribution fee, Class A 6,370,432
Distribution fee, Class B 746,966
Financial agent fee 550,750
Transfer agent 3,356,949
Printing 256,437
Custodian 142,270
Registration 60,398
Professional 59,978
Trustees 16,343
Miscellaneous 41,230
------------
Total expenses 28,838,923
------------
NET INVESTMENT LOSS (6,323,768)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 240,243,310
Net change in unrealized appreciation (depreciation) on
investments 75,013,694
------------
NET GAIN ON INVESTMENTS 315,257,004
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $308,933,236
------------
------------
</TABLE>
See Notes to Financial Statements 21
<PAGE>
Phoenix Growth Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (6,323,768) $ 12,828,128
Net realized gain 240,243,310 499,286,602
Net change in unrealized appreciation
(depreciation) 75,013,694 37,069,225
--------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 308,933,236 549,183,955
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A -- (17,472,939)
Net investment income, Class B -- (64,123)
Net realized gains, Class A (489,479,916) (395,993,712)
Net realized gains, Class B (13,875,674) (8,267,051)
--------------- ---------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (503,355,590) (421,797,825)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(15,305,754 and 10,576,129 shares,
respectively) 379,717,014 270,447,275
Net asset value of shares issued from
reinvestment of distributions
(20,640,114 and 16,237,740 shares,
respectively) 454,706,097 381,717,419
Cost of shares repurchased (28,881,261
and 23,676,500 shares, respectively) (730,281,016) (604,530,141)
--------------- ---------------
Total 104,142,095 47,634,553
--------------- ---------------
CLASS B
Proceeds from sales of shares (825,152
and 938,817 shares, respectively) 20,213,833 23,549,010
Net asset value of shares issued from
reinvestment of distributions
(585,412 and 325,555 shares,
respectively) 12,698,430 7,574,359
Cost of shares repurchased (766,812
and 493,546 shares, respectively) (18,666,026) (12,629,905)
--------------- ---------------
Total 14,246,237 18,493,464
--------------- ---------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 118,388,332 66,128,017
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (76,034,022) 193,514,147
NET ASSETS
Beginning of period 2,586,310,987 2,392,796,840
--------------- ---------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 2,510,276,965 $ 2,586,310,987
--------------- ---------------
--------------- ---------------
</TABLE>
22 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
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.83 $ 26.87 $ 24.92 $ 21.24 $ 21.53
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.06)(4) 0.14(4) 0.20(4) 0.26 0.26
Net realized and unrealized gain
(loss) 2.73 5.62 3.63 4.53 0.17
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.67 5.76 3.83 4.79 0.43
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income -- (0.21) (0.25) (0.30) (0.24)
Dividends from net realized gains (5.55) (4.59) (1.63) (0.81) (0.48)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (5.55) (4.80) (1.88) (1.11) (0.72)
----- ----- ----- ----- -----
Change in net asset value (2.88) 0.96 1.95 3.68 (0.29)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 24.95 $ 27.83 $ 26.87 $ 24.92 $ 21.24
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 12.26% 24.81% 16.34% 23.91% 2.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $2,434,217 $2,518,289 $2,347,471 $2,300,251 $2,140,458
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.08% 1.10% 1.17% 1.20% 1.19%
Net investment income (loss) (0.22)% 0.53% 0.80% 0.92% 1.22%
Portfolio turnover 110% 196% 116% 109% 118%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
------------------------------------------------------- 7/15/94 TO
1998 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) (0.24)(4) (0.06)(4) --(4) --(4) 0.01
Net realized and unrealized gain
(loss) 2.68 5.57 3.61 4.60 0.70
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.44 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 (5.55) (4.59) (1.63) (0.81) --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (5.55) (4.63) (1.72) (1.05) --
----- ----- ----- ----- -----
Change in net asset value (3.11) 0.88 1.89 3.55 0.71
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 24.40 $ 27.51 $ 26.63 $ 24.74 $ 21.19
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 11.41% 23.89% 15.48% 23.02% 3.47%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $76,060 $68,022 $45,326 $20,111 $2,966
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.83% 1.85% 1.93% 1.97% 1.87%(2)
Net investment income (loss) (0.97)% (0.25)% 0.01% 0.01% 0.32%(2)
Portfolio turnover 110% 196% 116% 109% 118%
</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.
See Notes to Financial Statements 23
<PAGE>
PHOENIX AGGRESSIVE GROWTH FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ROGER ENGEMANN, CFA, JIM MAIR,
CFA AND JOHN TILSON, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for aggressive long-term investors willing to assume
above-average risk in return for above-average capital growth potential. The
Fund may invest in smaller capitalization companies, and investors should note
that small company investing involves added risks, including greater price
volatility, less liquidity and increased competitive threat.
Q: HOW HAS THE FUND PERFORMED OVER THE PAST YEAR THROUGH OCTOBER 31, 1998?
A: For the year, Class A shares returned 0.38% and Class B shares were down
(0.28)% compared with a loss of (15.86)% for the Russell 2000 Growth Index.(1)
Q: SINCE ROGER ENGEMANN & ASSOCIATES, INC. TOOK OVER MANAGEMENT OF THE FUND ON
JANUARY 8, 1998, COULD YOU DESCRIBE THE CHANGES THAT HAVE BEEN MADE TO THE
PORTFOLIO AND COMMENT ON YOUR INVESTMENT PHILOSOPHY?
A: We utilize a top-down approach to sector allocation, combined with a
bottom-up approach to stock selection. Additionally, we employ a lower turnover
style than the previous manager, which may result in the Fund being more tax
efficient than in the past.
We also changed a significant portion of the portfolio in January 1998 and
have concentrated assets into a handful of larger positions (4-5%) as well as
smaller positions. The larger positions are a fundamental focus on strong,
mid-cap companies, whereas the smaller positions tend to be groups of small-cap
companies in select sectors.
Due to extreme volatility, the Fund operated with an above-average cash
position for much of the year. We are targeting a normal cash position of 5%-8%
to take advantage of opportunities arising in the market. During the market
volatility of August through early October, when the Russell 2000 dropped by
approximately 34%, we began aggressively deploying the Fund's cash, mainly into
technology stocks. As a result, technology stocks increased from 32.0% of the
portfolio on July 31, 1998, to 47.0% on October 31, 1998. At the end of October,
the Fund's cash position stood at 11.4% versus 7.4% on July 31, 1998.
Q: WHAT IS YOUR OUTLOOK FOR THE FUTURE?
A: We expect to continue emphasizing technology as a major part of the portfolio
due to the outstanding growth characteristics exhibited by the sector and our
experience investing in the sector. We will continue to focus on fast growing
sectors and companies and will purchase these stocks when market opportunities
are present.
We feel the global economy remains tenuous. However, there are signs of
improvement that account for the recent rebound in the markets. Interest rates
remain near their 30-year lows, which bodes well for investing in equities. We
continue to be bullish on the long-term prospects of equities versus other
available investment instruments.
Our thanks go to the shareholders of the Fund for their patience during
these turbulent times. And we encourage investors to view markets as we do--with
a long-term perspective. An investment in the Phoenix Aggressive Growth Fund
should be consistent with the investor's long-term goals and risk profile. We
look forward to serving you again next year.
DECEMBER 2, 1998
(1) THE RUSSELL 2000 GROWTH INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF
TOTAL RETURN PERFORMANCE OF SMALL-CAPITALIZATION GROWTH-ORIENTED STOCKS. THE
INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
24
<PAGE>
Phoenix Aggressive Growth Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 10/31/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 0.38% 13.86% 12.91% -- --
Class A Shares at POP(3) (4.40) 12.75 12.37 -- --
Class B Shares at NAV(2) (0.28) -- -- 15.92% 7/21/94
Class B Shares with CDSC(4) (3.30) -- -- 15.63 7/21/94
Russell 2000 Growth Index(6) (15.86) 6.66 9.85 10.21 7/21/94
S&P 500 Index(7) 22.02 21.38 17.89 25.75 7/21/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
re-investment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period.
(5) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(6) The Russell 2000 Growth Index is an unmanaged, commonly used measure of
total return performance of small-capitalization growth-oriented stocks. The
Index's performance does not reflect sales charges.
(7) The S&P 500's Index is an unmanaged but commonly used measure of stock
total return performance. The S&P 500's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of future
performance. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<TABLE>
<CAPTION>
GROWTH OF $10,000 PERIODS ENDING 10/31
Phoenix
Aggressive Growth Russell 2000 S&P 500
Fund Series Class A(5) Growth Index(6) Index(7)
<S> <C> <C> <C>
10/31/88 $9,527.49 $10,000.00 $10,000.00
10/31/89 $11,298.46 $11,872.00 $12,621.29
10/31/90 $9,798.75 $8,745.00 $11,672.02
10/31/91 $13,716.89 $14,563.00 $15,582.84
10/30/92 $14,660.27 $14,511.00 $17,134.23
10/29/93 $16,771.57 $18,526.00 $19,687.15
10/31/94 $16,834.21 $18,357.00 $20,461.52
10/31/95 $22,749.37 $22,136.00 $25,865.90
10/31/96 $26,714.49 $25,086.00 $32,125.48
10/31/97 $31,968.17 $30,397.00 $42,510.43
10/30/98 $32,090.30 $25,576.00 $51,869.72
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
10/31/88 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less
than that shown based on differences in inception dates, fees, and sales
charges.
SECTOR WEIGHTINGS 10/31/98
As a percentage of equity holdings
Technology 47%
Communication Services 10%
Consumer Cyclicals 10%
Financials 10%
Consumer Staples 9%
Health Care 7%
Other 7%
25
<PAGE>
Phoenix Aggressive Growth Fund Series
TEN LARGEST HOLDINGS AT OCTOBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Cendant Corp. 5.7%
FRANCHISES HOTELS, RENTAL CAR AGENCIES, AND REAL ESTATE BROKERAGE
OFFICES
2. MCI WorldCom, Inc. 4.8%
COMPREHENSIVE TELECOMMUNICATIONS SERVICE PROVIDER
3. America Online, Inc. 3.8%
MAJOR PROVIDER OF ONLINE SERVICES TO CONSUMERS
4. Intel Corp. 3.6%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
5. HBO & Co. 3.3%
DEVELOPS MANAGEMENT SOFTWARE SOLUTIONS FOR THE HEALTH-CARE INDUSTRY
6. Tellabs, Inc. 3.0%
MAKES AND SERVICES VOICE, DATA AND VIDEO NETWORK ACCESS SYSTEMS
7. Cambridge Technology Partners, Inc. 2.8%
PROVIDES MANAGEMENT CONSULTING AND SYSTEMS INTEGRATION
8. Philip Morris Companies, Inc. 2.5%
MAKES TOBACCO PRODUCTS AND PACKAGED GROCERY PRODUCTS
9. AirTouch Communications, Inc. 2.4%
PROVIDES WIRELESS TELECOMMUNICATIONS AND PAGING SERVICES
10. Ascend Communications, Inc. 2.3%
DEVELOPS, MAKES AND SELLS WIDE-AREA NETWORKING SOLUTIONS
</TABLE>
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------
<S> <C> <C> <C>
COMMON STOCKS--88.8%
BANKS (MONEY CENTER)--1.9%
BankAmerica Corp........................ 35,000 $ 2,010,312
Morgan (J.P.) & Co., Inc. .............. 25,000 2,356,250
-------------
4,366,562
-------------
BEVERAGES (NON-ALCOHOLIC)--0.7%
PepsiCo, Inc............................ 50,000 1,687,500
BROADCASTING (TELEVISION, RADIO & CABLE)--2.5%
Clear Channel Communications, Inc.(b)... 60,000 2,733,750
Univision Communications, Inc. Class
A(b).................................... 105,000 3,097,500
-------------
5,831,250
-------------
COMMUNICATIONS EQUIPMENT--8.2%
Ascend Communications, Inc.(b).......... 115,000 5,548,750
Com21, Inc.(b).......................... 62,000 930,000
Global Crossing Ltd.(b)................. 30,000 862,500
Lucent Technologies, Inc................ 36,000 2,886,750
McLeod USA, Inc.(b)..................... 20,000 731,250
Tellabs, Inc.(b)........................ 130,000 7,150,000
Terayon Communications Systems,
Inc.(b)................................. 100,000 1,200,000
-------------
19,309,250
-------------
COMPUTERS (HARDWARE)--3.4%
Compaq Computer Corp. .................. 75,000 $ 2,371,875
Maxtor Corp.(b)......................... 250,000 2,656,250
<CAPTION>
SHARES VALUE
---------- -------------
<S> <C> <C> <C>
COMPUTERS (HARDWARE)--CONTINUED
Sun Microsystems, Inc.(b)............... 50,000 $ 2,912,500
-------------
7,940,625
-------------
COMPUTERS (NETWORKING)--1.1%
Cisco Systems, Inc.(b).................. 40,000 2,520,000
COMPUTERS (PERIPHERALS)--1.2%
EMC Corp.(b)............................ 45,000 2,896,875
COMPUTERS (SOFTWARE & SERVICES)--20.2%
America Online, Inc.(b)................. 70,000 8,894,375
BMC Software, Inc.(b)................... 60,000 2,883,750
Cambridge Technology Partners,
Inc.(b)................................. 300,000 6,637,500
Compuware Corp.(b)...................... 90,000 4,876,875
Edwards (J.D.) & Co.(b)................. 60,000 1,965,000
HBO & Co................................ 300,000 7,875,000
Legato Systems, Inc.(b)................. 37,000 1,447,625
Mastech Corp.(b)........................ 150,000 3,525,000
Network Associates, Inc.(b)............. 75,000 3,187,500
New Era of Networks, Inc.(b)............ 23,000 1,132,750
Sapient Corp.(b)........................ 30,000 1,351,875
VERITAS Software Corp.(b)............... 40,000 2,005,000
Whittman-Hart, Inc.(b).................. 100,000 1,987,500
-------------
47,769,750
-------------
CONSUMER FINANCE--2.8%
American Express Co. ................... 25,000 $ 2,209,375
</TABLE>
26 See Notes to Financial Statements
<PAGE>
Phoenix Aggressive Growth Fund Series
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------
<S> <C> <C> <C>
CONSUMER FINANCE--CONTINUED
Countrywide Credit Industries, Inc...... 103,000 $ 4,448,312
-------------
6,657,687
-------------
DISTRIBUTORS (FOOD & HEALTH)--1.0%
Cardinal Health, Inc. .................. 25,000 2,364,062
ELECTRONICS (INSTRUMENTATION)--3.0%
Jabil Circuit, Inc.(b).................. 60,000 2,778,750
Micrel, Inc.(b)......................... 75,000 2,465,625
Sanmina Corp.(b)........................ 45,000 1,845,000
-------------
7,089,375
-------------
ELECTRONICS (SEMICONDUCTORS)--6.9%
Intel Corp.............................. 95,000 8,472,812
Texas Instruments, Inc.................. 40,000 2,557,500
Uniphase Corp.(b)....................... 50,000 2,475,000
Vitesse Semiconductor Corp.(b).......... 90,000 2,902,500
-------------
16,407,812
-------------
FINANCIAL SERVICES-MISCELLANEOUS--0.7%
Federal Home Loan Mortgage.............. 30,000 1,725,000
HEALTH CARE (DIVERSIFIED)--2.3%
McKesson Corp. ......................... 20,000 1,540,000
Mylan Laboratories, Inc................. 70,000 2,410,625
Warner-Lambert Co. ..................... 20,000 1,567,500
-------------
5,518,125
-------------
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS)--4.1%
Forest Laboratories, Inc.(b)............ 35,000 1,463,438
Merck & Co., Inc........................ 35,000 4,733,750
Pfizer, Inc............................. 20,000 2,146,250
Watson Pharmaceuticals, Inc.(b)......... 25,000 1,390,625
-------------
9,734,063
-------------
INVESTMENT BANKING/BROKERAGE--3.5%
Donaldson, Lufkin & Jenrette, Inc....... 85,000 3,038,750
Lehman Brothers Holdings, Inc........... 77,000 2,921,188
Paine Webber Group, Inc. ............... 70,000 2,340,625
-------------
8,300,563
-------------
<CAPTION>
SHARES VALUE
---------- -------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--1.4%
Tyco International Ltd.................. 8 $ 496
United Technologies Corp................ 35,000 3,333,750
-------------
3,334,246
-------------
OIL & GAS (DRILLING & EQUIPMENT)--0.8%
Transocean Offshore, Inc................ 50,000 $ 1,846,875
OIL & GAS (REFINING & MARKETING)--0.4%
Sun Co., Inc............................ 30,000 1,029,375
RAILROADS--1.3%
Kansas City Southern Industries,
Inc. ................................... 80,000 3,090,000
RETAIL (DRUG STORES)--1.7%
Walgreen Co............................. 80,000 3,895,000
RETAIL (GENERAL MERCHANDISE)--2.4%
Bed, Bath & Beyond, Inc.(b)............. 130,000 3,583,125
Kmart Corp. ............................ 150,000 2,118,750
-------------
5,701,875
-------------
SERVICES (COMMERCIAL & CONSUMER)--5.7%
Cendant Corp.(b)........................ 1,175,000 13,439,063
SERVICES (DATA PROCESSING)--0.6%
i2 Technologies, Inc.(b)................ 80,000 1,490,000
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--2.4%
AirTouch Communications, Inc.(b)........ 100,000 5,600,000
TELECOMMUNICATIONS (LONG DISTANCE)--4.8%
MCI WorldCom, Inc.(b)................... 205,000 11,326,250
TELEPHONE--1.3%
Qwest Communications International,
Inc.(b)................................. 80,000 3,130,000
TOBACCO--2.5%
Philip Morris Companies, Inc............ 113,000 5,777,125
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $185,514,104) 209,778,308
- -------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--88.8%
(IDENTIFIED COST $185,514,104) 209,778,308
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Phoenix Aggressive Growth Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--11.4%
COMMERCIAL PAPER--11.4%
Allied Signal, Inc. 5.42%, 11/2/98...... A-1 $ 610 $ 609,908
Coca-Cola Co. 5.57%, 11/2/98............ A-1+ 2,000 1,999,691
Ford Motor Credit Co. 5.39%, 11/4/98.... A-1 2,155 2,154,032
Lexington Parker Capital Co. LLC 5.22%,
11/6/98................................. A-1 2,040 2,038,521
Koch Industries, Inc. 5.00%, 11/12/98... A-1 2,000 1,996,944
Beta Finance, Inc. 5.30%, 11/17/98...... A-1+ 1,840 1,835,666
Wisconsin Electric Power 5.05%,
11/20/98................................ A-1 4,000 3,989,339
Goldman Sachs & Co. 5.15%, 11/23/98..... A-1+ 5,395 5,378,021
Enterprise Funding Corp. 5.18%,
11/30/98................................ A-1 1,070 1,065,535
General Electric Capital Corp. 5.05%,
12/1/98................................. A-1+ 1,500 1,493,687
Du Pont (E.I.) de Nemours & Co. 5.03%,
12/7/98................................. A-1+ 4,455 4,432,591
-------------
26,993,935
-------------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $26,993,935) 26,993,935
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $212,508,039) 236,772,243(a)
Cash and receivables, less liabilities--(0.2%) (465,733)
--------------
NET ASSETS--100.0% $ 236,306,510
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $39,630,515 and gross
depreciation of $15,764,978 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$212,906,706.
(b) Non-income producing.
28 See Notes to Financial Statements
<PAGE>
Phoenix Aggressive Growth Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $212,508,039) $ 236,772,243
Short-term investments held as collateral for loaned
securities 3,240,490
Cash 2,471
Receivables
Fund shares sold 124,787
Dividend 18,705
--------------
Total assets 240,158,696
--------------
LIABILITIES
Payables
Collateral on securities loaned 3,240,490
Fund shares repurchased 227,803
Investment advisory fee 127,904
Transfer agent fee 87,222
Distribution fee 53,474
Financial agent fee 18,827
Trustees' fee 3,745
Accrued expenses 92,721
--------------
Total liabilities 3,852,186
--------------
NET ASSETS $ 236,306,510
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 218,566,485
Accumulated net realized loss (6,524,179)
Net unrealized appreciation 24,264,204
--------------
NET ASSETS $ 236,306,510
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $222,149,315) 16,192,889
Net asset value per share $13.72
Offering price per share $13.72/(1-4.75%) $14.40
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $14,157,195) 1,074,302
Net asset value and offering price per share $13.18
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 1,534,364
Dividends 1,076,950
Security lending 108,844
--------------
Total investment income 2,720,158
--------------
EXPENSES
Investment advisory fee 1,847,122
Distribution fee, Class A 623,341
Distribution fee, Class B 145,242
Financial agent fee 166,926
Transfer agent 368,426
Printing 35,702
Professional 30,157
Custodian 27,220
Registration 27,216
Trustees 12,765
Miscellaneous 8,918
--------------
Total expenses 3,293,035
--------------
NET INVESTMENT LOSS (572,877)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (6,139,764)
Net change in unrealized appreciation (depreciation) on
investments 9,270,385
--------------
NET GAIN ON INVESTMENTS 3,130,621
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,557,744
--------------
--------------
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Phoenix Aggressive Growth Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (572,877) $ (1,405,570)
Net realized gain (loss) (6,139,764) 54,155,507
Net change in unrealized appreciation
(depreciation) 9,270,385 (8,722,108)
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 2,557,744 44,027,829
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (48,960,572) (33,833,409)
Net realized gains, Class B (2,784,524) (1,733,847)
In excess of net realized gains, Class
A (369,101) --
In excess of net realized gains, Class
B (20,991) --
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (52,135,188) (35,567,256)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,468,365 and 4,764,191 shares,
respectively) 36,742,199 76,429,442
Net asset value of shares issued from
reinvestment of distributions
(3,397,433 and 2,152,050 shares,
repectively) 45,837,639 31,462,960
Cost of shares repurchased (3,976,755
and 6,476,002 shares, respectively) (59,756,494) (103,491,166)
------------- -------------
Total 22,823,344 4,401,236
------------- -------------
CLASS B
Proceeds from sales of shares (561,461
and 787,300 shares, respectively) 8,094,162 12,236,599
Net asset value of shares issued from
reinvestment of distributions
(194,011 and 104,653 shares,
respectively) 2,530,269 1,500,729
Cost of shares repurchased (493,541
and 711,043 shares, respectively) (7,177,346) (10,939,843)
------------- -------------
Total 3,447,085 2,797,485
------------- -------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 26,270,429 7,198,721
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (23,307,015) 15,659,294
NET ASSETS
Beginning of period 259,613,525 243,954,231
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 236,306,510 $ 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
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.20 $ 16.84 $ 16.51 $ 13.33 $ 14.56
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.03) (0.08)(4) (0.13)(4) 0.06(4) 0.27
Net realized and unrealized gain
(loss) 0.04 2.95 2.64 4.21 (0.21)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.01 2.87 2.51 4.27 0.06
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income -- -- (0.02) (0.19) (0.22)
Dividends from net realized gains (3.46) (2.51) (2.16) (0.90) (1.07)
In excess of net realized gains (0.03) -- -- -- --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (3.49) (2.51) (2.18) (1.09) (1.29)
----- ----- ----- ----- -----
Change in net asset value (3.48) 0.36 0.33 3.18 (1.23)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 13.72 $ 17.20 $ 16.84 $ 16.51 $ 13.33
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 0.38% 19.67% 17.43% 35.14% 0.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $222,149 $246,002 $233,488 $180,288 $140,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.21% 1.20% 1.20% 1.29% 1.26%
Net investment income (loss) (0.18)% (0.53)% (0.81)% 0.43% 1.97%
Portfolio turnover 176% 518% 401% 331% 306%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
------------------------------------------------------- 7/21/94 TO
1998 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) (0.12) (0.20)(4) (0.25)(4) (0.12)(4) 0.02
Net realized and unrealized gain
(loss) 0.03 2.90 2.60 4.26 0.20
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS (0.09) 2.70 2.35 4.14 0.22
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- (0.17) --
Dividends from net realized gains (3.46) (2.51) (2.16) (0.90) --
In excess of net realized gains (0.03) -- -- -- --
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (3.49) (2.51) (2.16) (1.07) --
----- ----- ----- ----- -----
Change in net asset value (3.58) 0.19 0.19 3.07 0.22
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 13.18 $ 16.76 $ 16.57 $ 16.38 $ 13.31
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) (0.28)% 18.70% 16.52% 34.15% 1.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $14,157 $13,611 $10,466 $2,393 $330
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.96% 1.96% 1.95% 2.04% 1.81%(2)
Net investment income (loss) (0.93)% (1.28)% (1.57)% (0.83)% 1.45%(2)
Portfolio turnover 176% 518% 401% 331% 306%
</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.
See Notes to Financial Statements 31
<PAGE>
PHOENIX HIGH YIELD FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, TIM NORMAN, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for aggressive investors who desire high current
income or who wish to diversify their equity portfolios. Investors should note
that high-yield bonds generally are subject to greater market fluctuations and
risk of loss of income and principal than are lower-yielding bonds. In addition,
foreign investing involves special risks, such as currency fluctuation, less
public disclosure, as well as economic and political risks.
Q: HOW DID THE FUND PERFORM OVER THE FISCAL YEAR ENDED OCTOBER 31, 1998?
A: Class A shares of the Fund returned (8.97)% and Class B shares returned
(9.61)% compared with a return of (2.49)% for the CS First Boston High Yield
Index. Since their inception on February 27, 1998, Class C shares returned
(14.09)% compared with (6.39)% for the CS First Boston High Yield Index.(1) All
performance figures assume reinvestment of distributions and exclude the effect
of sales charges.
Q: WHY WAS PERFORMANCE DISAPPOINTING FOR THIS PERIOD?
A: Performance for the last 12 months was adversely impacted by the Fund's
exposure to international high-yield markets in both emerging and non-emerging
countries. The investments outside the U.S. continue to be consistent with our
global high-yield strategy. The portfolio had an approximate 30% exposure to the
international sector, which underperformed the domestic high-yield sector for
the period April through September. August and September were particularly poor
performing months for the higher risk fixed-income sectors as the fear of global
recession and a significant drop in liquidity caused a sharp decline in prices
for domestic high-yield and emerging-markets bonds.
However, the Fund had strong relative performance in October due to the
recovery in the international sector as those markets stabilized and bond prices
rose from oversold levels. In addition, performance in October was helped by the
recovery in the domestic high-yield market in the second half of the month,
which continued in the first two weeks of November, the time period in which
this was written. The strength in the international bond markets and the U.S.
equity markets provided some comfort that a recession in the U.S., which was
being discounted in high-yield bond prices, was not imminent, and money flowed
back into the market through mutual funds.
Q: HAVE ANY CHANGES BEEN MADE TO THE PORTFOLIO?
A: There have not been any significant changes made to the portfolio with
respect to sector allocation or sector weightings. The 30% exposure to the
international markets was maintained as the price deterioration in August and
September was, in our view, excessive and not reflective of underlying
fundamentals. The top three sector weightings continue to be telecommunications,
cable/media and energy. During the weakness in August and September, we made a
number of changes to individual holdings in order to better position the
portfolio for a period of recovery, which benefited performance in October and
thus far into November.
(1) THE CS FIRST BOSTON HIGH YIELD INDEX IS AN UNMANAGED, COMMONLY USED MEASURE
OF TOTAL RETURN PERFORMANCE FOR HIGH-YIELD BONDS. THE INDEX IS NOT AVAILABLE
FOR DIRECT INVESTMENT AND IS CALCULATED MONTHLY RATHER THAN DAILY. THE
INCEPTION TO DATE RATE OF RETURN IS FOR THE PERIOD 2/28/98 THROUGH 10/31/98.
32
<PAGE>
PHOENIX HIGH YIELD FUND SERIES (CONTINUED)
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A: Our outlook is positive for high-yield bonds, and we believe they are poised
to rise from their depressed levels. High-yield bonds have been trading at
historically high yields relative to U.S. Treasuries due to concerns about the
declining availability of credit and a slowing economy. Although we are
anticipating a general slowing in economic growth in the U.S., we are not
expecting the recession that appears to be reflected in current high-yield bond
prices. We believe our conclusions are supported by the responsive interest rate
policy of the Federal Reserve and the current fiscal budget surplus, which
should provide support for the economy as needed. Under this scenario, yields
currently available in the high-yield bond sector appear overly generous
compared with U.S. Treasury benchmarks, and the extra yield cushion should
offset any near-term volatility.
NOVEMBER 16, 1998
33
<PAGE>
Phoenix High Yield Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 10/31/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) (8.97)% 5.63% 8.49% -- --
Class A Shares at POP(3) (13.27) 4.62 7.97 -- --
Class B Shares at NAV(2) (9.61) -- -- 4.12% 2/16/94
Class B Shares with CDSC(4) (12.80) -- -- 3.83 2/16/94
Class C Shares at NAV(2) -- -- -- (14.09) 2/27/98
Class C Shares with CDSC(4) -- -- -- (14.89) 2/27/98
CS First Boston High Yield Index(7) (2.49) 7.68 10.32 -- Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period. CDSC charges for C shares are 1% in the first year and 0% thereafter.
(5) The CS First Boston High Yield Index is 7.22% for Class B (since 2/28/94)
and (6.39)% for Class C (since 2/28/98), respectively.
(6) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B and C Shares will vary due to differing sales charges.
(7) Index performance is an unmanaged, commonly used measure of total return
performance for high-yield bonds. The index's performance does not reflect
sales charges.
All returns represent past performance which may not be indicative
of future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
GROWTH OF $10,000 PERIODS ENDING 10/31
Phoenix High Yield CS First Boston
Class A(6) High Yield Index(7)
<S> <C> <C>
10/31/88 $9,525.86 $10,000.00
10/31/89 $9,586.83 $10,151.00
10/31/90 $9,108.72 $9,248.00
10/31/91 $11,547.02 $13,421.00
10/30/92 $13,426.74 $15,487.00
10/29/93 $16,363.88 $18,436.00
10/31/94 $15,943.67 $18,740.00
10/31/95 $17,727.54 $21,596.00
10/31/96 $20,555.22 $23,857.00
10/31/97 $23,645.13 $27,376.00
10/30/98 $21,523.52 $26,694.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
10/31/88 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less
than that shown based on differences in inception dates, fees and sales
charges.
SECTOR WEIGHTINGS 10/31/98
As a percentage of bond holdings
Corporate 71%
Foreign Corporate 22%
Non-Agency Mortgage 3%
Foreign Government 3%
Foreign Convertible 1%
34
<PAGE>
Phoenix High Yield Fund Series
TEN LARGEST HOLDINGS AT OCTOBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. WAM!NET, Inc. 2.4%
COMPUTER INDUSTRY CORPORATE BOND
2. Poland Communications, Inc. 2.4%
BROADCASTING INDUSTRY CORPORATE BOND
3. CBS Radio, Inc. 2.4%
BROADCASTING INDUSTRY CORPORATE BOND
4. Global Crossing Holding Ltd. 2.1%
TELEPHONE INDUSTRY CORPORATE BOND
5. RCN Corp. 2.0%
LONG DISTANCE TELECOMMUNICATIONS INDUSTRY CORPORATE BOND
6. Portola Packaging, Inc. 2.0%
CONTAINER INDUSTRY CORPORATE BOND
7. Sprint Spectrum L.P. 2.0%
CELLULAR TELECOMMUNICATIONS INDUSTRY CORPORATE BOND
8. Republic of Panama 1.9%
FOREIGN GOVERNMENT SECURITY
9. Esprit Telecom Group PLC 1.8%
FOREIGN CORPORATE BOND
10. United Rentals, Inc. 1.8%
SERVICES INDUSTRY CORPORATE BOND
</TABLE>
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
CORPORATE BONDS--65.9%
AEROSPACE/DEFENSE--0.4%
Stellex Industries, Inc. Series B 9.50%,
11/1/07................................. Caa $ 2,000 $ 1,850,000
AUTO PARTS & EQUIPMENT--0.9%
Collins & Aikman Products 11.50%,
4/15/06................................. B 4,440 4,595,400
BROADCASTING (TELEVISION, RADIO & CABLE)--9.0%
CBS Radio, Inc. PIK 11.375%, 1/15/09.... NR 10,002 11,551,974
Fox Kids Worldwide, Inc. 0%,
11/1/07(d).............................. B 13,100 7,860,000
Fox/Liberty Networks LLC 0%,
8/15/07(d).............................. B 13,000 8,417,500
Fox/Liberty Networks LLC 8.875%,
8/15/07................................. B 5,000 4,862,500
Poland Communications, Inc. Series B
9.875%, 11/1/03......................... B 12,200 11,635,750
-------------
44,327,724
-------------
COMPUTERS (SOFTWARE & SERVICES)--3.4%
Splitrock Services, Inc. 11.75%,
7/15/08(f).............................. NR 5,000 4,575,000
WAM!NET, Inc. Series B 0%, 3/1/05(d).... NR 21,000 11,681,250
-------------
16,256,250
-------------
CONTAINERS (METAL & GLASS)--2.0%
Portola Packaging, Inc. Sr. Note 10.75%,
10/1/05................................. B 10,000 9,800,000
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION)--3.7%
Anacomp, Inc. Series B 10.875%,
4/1/04.................................. B $ 7,000 $ 6,982,500
Anacomp, Inc. Series D 10.875%,
4/1/04.................................. B 5,200 5,187,000
Samsung Electron America 144A 9.75%,
5/1/03(b)............................... Ba 2,000 1,747,500
Samsung Electronics Co. 144A 7.45%,
10/1/02(b).............................. Ba 5,000 4,156,250
-------------
18,073,250
-------------
ENTERTAINMENT--0.4%
Loews Cineplex Entertainment Corp. 144A
8.875%, 8/1/08(b)....................... B 2,000 1,940,000
GAMING, LOTTERY & PARIMUTUEL COMPANIES--2.0%
Horseshoe Gaming LLC Series B 12.75%,
9/30/00................................. B 5,530 5,861,800
Majestic Star Casino LLC 12.75%,
5/15/03................................. B 4,000 4,120,000
-------------
9,981,800
-------------
HEALTH CARE (DIVERSIFIED)--1.3%
Global Health Sciences 11%, 5/1/08...... Caa 6,900 6,451,500
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.8%
Schein Pharmaceutical, Inc. 8.467%,
12/15/04(d)............................. B 4,800 4,080,000
MANUFACTURING (DIVERSIFIED)--0.8%
Polymer Group, Inc. Series B 8.75%,
3/1/08.................................. B 4,000 3,760,000
</TABLE>
See Notes to Financial Statements 35
<PAGE>
Phoenix High Yield Fund Series
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
MANUFACTURING (SPECIALIZED)--1.4%
Nortek, Inc. 9.875%, 3/1/04............. B $ 6,850 $ 6,747,250
METALS MINING--0.4%
NSM Steel, Ltd. 144A 12.25%,
2/1/08(b)............................... Ca 8,750 1,750,000
OFFICE EQUIPMENT & SUPPLIES--0.6%
U.S. Office Products Co. 144A 9.75%,
6/15/08(b).............................. B 3,800 2,964,000
OIL & GAS (DRILLING & EQUIPMENT)--0.8%
Hvide Marine, Inc. 8.375%, 2/15/08...... B 5,500 4,235,000
OIL & GAS (EXPLORATION & PRODUCTION)--5.4%
Bellwether Exploration Co. 10.875%,
4/1/07.................................. B 8,000 7,600,000
Benton Oil & Gas Co. 11.625%, 5/1/03.... B 9,800 8,134,000
Benton Oil & Gas Co. 9.375%, 11/1/07.... B 2,750 1,925,000
Flores & Rucks, Inc. 9.75%, 10/1/06..... B 2,250 2,314,688
Forcenergy, Inc. Series B 8.50%,
2/15/07................................. B 7,000 4,908,750
Lomak Petroleum, Inc. 8.75%, 1/15/07.... B 2,000 1,802,500
-------------
26,684,938
-------------
PAPER & FOREST PRODUCTS--1.4%
Buckeye Technologies, Inc. 8%,
10/15/10................................ Ba 7,365 7,125,637
PERSONAL CARE--1.7%
Bally Total Fitness Holding Corp. Series
B 9.875%, 10/15/07...................... B 2,300 2,116,000
Revlon Consumer Products 8.625%,
2/1/06.................................. B 7,050 6,362,625
-------------
8,478,625
-------------
PUBLISHING--1.4%
Outdoor Communications, Inc. 9.25%,
8/15/07................................. B 6,500 6,695,000
RAILROADS--0.9%
American Commercial Lines LLC 144A
10.25%, 6/30/08(b)...................... B 4,600 4,467,750
SERVICES (COMMERCIAL & CONSUMER)--4.9%
Park 'N View, Inc. 13%, 5/15/08(f)...... B 4,000 3,580,000
United Rentals, Inc. 144A 9.50%,
6/1/08(b)............................... B 9,125 8,988,125
Sea Containers 7.875%, 2/15/08.......... Ba 8,000 7,570,000
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)--CONTINUED
Williams Scotsman, Inc. 9.875%, 6/1/07.. B $ 3,700 $ 3,727,750
-------------
23,865,875
-------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--6.1%
American Cellular Corp. 144A 10.50%,
5/15/08(b).............................. Caa 4,500 4,275,000
Comcast Cellular Holdings, Inc. Series B
9.50%, 5/1/07........................... Ba 5,500 5,692,500
Orion Network Systems, Inc. 0%,
1/15/07(d).............................. B 8,000 4,640,000
Sprint Spectrum L.P. 0%, 8/15/06(d)..... Baa 10,950 9,581,250
Vanguard Cellular Systems 9.375%,
4/15/06................................. B 5,000 5,550,000
-------------
29,738,750
-------------
TELECOMMUNICATIONS (LONG DISTANCE)--7.3%
KMC Telecom Holdings, Inc. 0%,
2/15/08(d).............................. NR 8,000 3,840,000
NTL, Inc. Series B 0%, 2/1/06(d)........ B 7,000 5,416,250
NTL, Inc. Series B 10%, 2/15/07(d)...... B 8,000 7,680,000
RCN Corp. 0%, 10/15/07(d)............... B 17,250 8,970,000
RCN Corp. Series B 0%, 2/15/08(d)....... B 20,525 9,852,000
-------------
35,758,250
-------------
TELEPHONE--7.8%
Global Crossing Holding Ltd. 144A
9.625%, 5/15/08(b)...................... NR 10,730 10,515,400
ICG Holdings, Inc. 0%, 9/15/05(d)....... NR 6,000 4,620,000
InterAmericas Communication Corp. 144A
14%, 10/27/07(b)(g)..................... NR 12,000 6,300,000
Intermedia Communications, Inc. Series B
0%, 7/15/07(d).......................... B 6,850 4,623,750
Pathnet, Inc. 12.25%, 4/15/08........... NR 5,825 4,354,188
Teligent, Inc. 11.50%, 12/1/07.......... Caa 5,000 4,150,000
Teligent, Inc. Series B 0%, 3/1/08(d)... Caa 8,000 3,520,000
-------------
38,083,338
-------------
</TABLE>
36 See Notes to Financial Statements
<PAGE>
Phoenix High Yield Fund Series
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
WASTE MANAGEMENT--1.1%
Allied Waste Industries, Inc. 0%,
6/1/07(d)............................... B $ 7,500 $ 5,625,000
- ---------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $361,955,236) 323,335,337
- ---------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--2.9%
First Chicago/Lennar Trust 97-CHL1, E
144A 8.129%, 2/28/11(b)................. B(c) 9,825 8,077,992
Salomon Brothers Mortgage Securities VII
95-C, 1 144A 6.804%, 9/30/08(b)......... B 7,330 5,938,787
- ---------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $13,206,802) 14,016,779
- ---------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--2.4%
DOMINICAN REPUBLIC--0.3%
Dominican Republic 6.625%, 8/30/24(d)... B+(c) 2,500 1,562,500
PANAMA--1.9%
Republic of Panama 8.875%, 9/30/27...... Ba 10,000 9,225,000
RUSSIA--0.2%
Russia IAN Series US 6.625%,
12/15/15(d)............................. Ca 497 48,492
Russia Principal Loan PIK interest
capitalization 6.625%, 12/15/20(d)...... NR 14,350 1,130,063
-------------
1,178,555
-------------
- ---------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $21,782,013) 11,966,055
- ---------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--21.4%
ARGENTINA--1.3%
Disco SA 144A 9.875%, 5/15/08(b)........ Ba 6,230 4,345,425
Imasac SA 144A 11%, 5/2/05(b)........... B 3,230 1,857,250
-------------
6,202,675
-------------
BAHAMAS--1.3%
Sun International Hotels 9%, 3/15/07.... Ba 6,000 6,120,000
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
BERMUDA--0.3%
AES China Generating Co. Yankee 10.125%,
12/15/06................................ Ba $ 2,880 $ 1,627,200
BRAZIL--2.4%
Arisco Produtos Alimenticios 144A
10.75%, 5/22/05(b)...................... NR 3,750 2,100,000
Globo Communicacoes Participacoes
10.50%, 12/20/06........................ B 8,000 4,480,000
Globo Communicacoes Co. 144A 10.625%,
12/5/08(b).............................. B 3,500 1,903,125
Localiza Rent a Car 10.25%, 10/1/05..... B 8,000 3,200,000
-------------
11,683,125
-------------
CANADA--2.7%
Call-Net Enterprises, Inc. 0%,
8/15/08(d).............................. B 5,000 2,850,000
Hurricane Hydrocarbons 144A 11.75%,
11/1/04(b).............................. B 8,000 3,360,000
Metronet Communications Corp. 12%,
8/15/07................................. B 4,000 4,280,000
Metronet Communications Corp. 0%,
6/15/08(d).............................. B 4,700 2,632,000
-------------
13,122,000
-------------
CHINA--0.1%
Greater Beijing 144A 9.50%,
6/15/07(b).............................. Ba 1,650 726,000
CYPRUS--1.6%
American Reefer Co. Ltd. 10.25%,
3/1/08.................................. B 10,000 7,800,000
GREECE--1.6%
Fage Dairy Industries 9%, 2/1/07........ B 10,000 7,762,500
INDONESIA--0.9%
APP Finance VII Mauritius, Ltd. 12%,
12/29/49................................ Caa 7,900 4,522,750
JAPAN--0.3%
IBJ Preferred Capital Co. LLC 144A
8.79%, 12/29/49(b)(d)................... Baa 1,645 1,318,352
</TABLE>
See Notes to Financial Statements 37
<PAGE>
Phoenix High Yield Fund Series
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
MEXICO--2.7%
Altos Hornos de Mexico Series B 11.875%,
4/30/04................................. B $ 7,000 $ 3,543,750
Copamex Industrias SA Series B 11.375%,
4/30/04................................. NR 8,000 6,900,000
Innova S DE R.L. 12.875%, 4/1/07........ B 5,000 2,825,000
-------------
13,268,750
-------------
NETHERLANDS--1.0%
Netia Holdings BV Series B 0%,
11/1/07(d).............................. B 9,750 4,875,000
POLAND--0.9%
Poland Telecom Finance Series B 14%,
12/1/07................................. B 5,000 4,500,000
UNITED KINGDOM--4.3%
Bridas Corp 12.50%, 11/15/99............ Ba 6,500 6,597,500
Esprit Telecom Group PLC 11.50%,
12/15/07................................ Caa 10,000 9,000,000
RSL Communications PLC 0%, 3/1/08(d).... B 6,775 3,252,000
Telewest Communications PLC 9.625%,
10/1/06................................. B 2,500 2,450,000
-------------
21,299,500
-------------
- ---------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $141,707,850) 104,827,852
- ---------------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--0.6%
RUSSIA--0.6%
Lukinter Finance Lukoil Cv. 3.50%,
5/6/02.................................. CC(c) 1,000 345,000
Lukinter Finance Lukoil Cv. 144A 1%,
11/3/03(b).............................. CC(c) 9,500 2,422,500
- ---------------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $10,111,383) 2,767,500
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-- -------------
<S> <C> <C>
PREFERRED STOCKS--0.7%
PAPER & FOREST PRODUCTS--0.7%
SD Warren Co. Series B Pfd. PIK 14%........ 115,000 $ 3,477,748
- ---------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $2,421,900) 3,477,748
- ---------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--0.2%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.2%
Granite Broadcasting Corp. Cv. Pfd.
$1.938..................................... 30,000 870,000
- ---------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $2,025,000) 870,000
- ---------------------------------------------------------------------------------
COMMON STOCKS--0.0%
PUBLISHING--0.0%
Sullivan Holdings, Inc. Class C(e)......... 76 0
- ---------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $357,881) 0
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
WARRANTS--0.1%
KMC Telecom Holdings, Inc. 144A
Warrants(b)(e).......................... 8,000 20,000
Metronet Communications 144A Warrants
(Canada)(b)(e).......................... 4,000 154,805
Orion Network Systems, Inc.
Warrants(e)............................. 8,000 48,000
Pathnet, Inc. 144A Warrants(b)(e)....... 5,825 5,825
- ----------------------------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $106,429) 228,630
- ----------------------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--94.2%
(IDENTIFIED COST $553,674,494) 461,489,901
- ----------------------------------------------------------------------------------------------------
</TABLE>
38 See Notes to Financial Statements
<PAGE>
Phoenix High Yield Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--3.2%
COMMERCIAL PAPER--3.2%
Donnelley (R.R.) & Sons Co. 5.60%
11/2/98................................. A-1 $ 8,180 $ 8,178,728
Lexington Parker Capital Co. LLC 5.60%,
11/2/98................................. A-1 2,750 2,749,560
Du Pont (E.I.) de Nemours & Co. 5.15%,
11/13/98................................ A-1+ 3,000 2,994,850
Receivables Capital Corp. 5.20%,
11/13/98................................ A-1+ 1,977 1,973,573
------------
15,896,711
------------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $15,896,711) 15,896,711
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--97.4%
(IDENTIFIED COST $569,571,205) 477,386,612(a)
Cash and receivables, less liabilities--2.6% 12,967,629
--------------
NET ASSETS--100.0% $ 490,354,241
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $5,588,720 and gross
depreciation of $99,658,747 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$571,456,639.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998, these securities amounted to a value of $79,334,086 or 16.2% of net
assets.
(c) As rated by Standard & Poor's, Duff & Phelps or Fitch.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Non-income producing.
(f) Warrants incorporated as a unit.
(g) Rights incorporated as a unit.
See Notes to Financial Statements 39
<PAGE>
Phoenix High Yield Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $569,571,205) $ 477,386,612
Cash 4,283,169
Receivables
Interest and dividends 13,871,623
Investment securities sold 3,750,361
Fund shares sold 867,926
--------------
Total assets 500,159,691
--------------
LIABILITIES
Payables
Investment securities purchased 8,207,773
Fund shares repurchased 802,426
Investment advisory fee 267,963
Transfer agent fee 180,433
Distribution fee 142,403
Financial agent fee 25,307
Trustees' fee 3,598
Accrued expenses 175,547
--------------
Total liabilities 9,805,450
--------------
NET ASSETS $ 490,354,241
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 644,444,747
Undistributed net investment income 2,545,859
Accumulated net realized loss (64,451,772)
Net unrealized depreciation (92,184,593)
--------------
NET ASSETS $ 490,354,241
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $427,659,329) 56,613,494
Net asset value per share $7.55
Offering price per share $7.55/(1-4.75%) $7.93
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $61,025,552) 8,112,928
Net asset value and offering price per share $7.52
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,669,360) 221,337
Net asset value and offering price per share $7.54
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 60,651,872
Dividends 1,599,300
--------------
Total investment income 62,251,172
--------------
EXPENSES
Investment advisory fee 3,942,021
Distribution fee, Class A 1,347,936
Distribution fee, Class B 664,341
Distribution fee, Class C 8,299
Financial agent fee 268,620
Transfer agent 773,200
Printing 115,257
Registration 91,674
Professional 42,353
Custodian 40,963
Trustees 16,341
Miscellaneous 14,523
--------------
Total expenses 7,325,528
--------------
NET INVESTMENT INCOME 54,925,644
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (2,965,994)
Net change in unrealized appreciation (depreciation) on
investments (98,402,826)
--------------
NET LOSS ON INVESTMENTS (101,368,820)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (46,443,176)
--------------
--------------
</TABLE>
40 See Notes to Financial Statements
<PAGE>
Phoenix High Yield Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 54,925,644 $ 49,787,651
Net realized gain (loss) (2,965,994) 43,737,254
Net change in unrealized appreciation
(depreciation) (98,402,826) (14,877,655)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (46,443,176) 78,647,250
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (48,737,532) (47,205,499)
Net investment income, Class B (5,729,283) (3,142,933)
Net investment income, Class C (77,895) --
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (54,544,710) (50,348,432)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(14,608,985 and 19,095,734 shares,
respectively) 131,624,797 171,457,073
Net asset value of shares issued from
reinvestment of distributions
(2,974,231 and 2,704,031 shares,
respectively) 26,360,963 24,329,132
Cost of shares repurchased (19,613,171
and 21,233,985 shares, respectively) (175,549,018) (191,152,369)
------------- -------------
Total (17,563,258) 4,633,836
------------- -------------
CLASS B
Proceeds from sales of shares
(4,637,394 and 4,404,860 shares,
respectively) 41,776,158 39,804,503
Net asset value of shares issued from
reinvestment of distributions
(251,098 and 142,554 shares,
respectively) 2,210,523 1,286,205
Cost of shares repurchased (2,529,603
and 1,757,872 shares, respectively) (22,197,043) (15,793,311)
------------- -------------
Total 21,789,638 25,297,397
------------- -------------
CLASS C
Proceeds from sales of shares (276,001
and 0 shares, respectively) 2,487,472 --
Net asset value of shares issued from
reinvestment of distributions
(3,918 and 0 shares, respectively) 33,626 --
Cost of shares repurchased (58,582 and
0 shares, respectively) (495,138) --
------------- -------------
Total 2,025,960 --
------------- -------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 6,252,340 29,931,233
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (94,735,546) 58,230,051
NET ASSETS
Beginning of period 585,089,787 526,859,736
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$2,545,859 AND $1,920,695,
RESPECTIVELY] $ 490,354,241 $ 585,089,787
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 41
<PAGE>
Phoenix High Yield Fund Series
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.09 $ 8.63 $ 8.17 $ 8.11 $ 9.11
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.83 0.80 0.78 0.80 0.76
Net realized and unrealized gain
(loss) (1.56) 0.46 0.46 0.04 (0.97)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.73) 1.26 1.24 0.84 (0.21)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.81) (0.80) (0.78) (0.78) (0.76)
Tax return of capital -- -- -- -- (0.03)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.81) (0.80) (0.78) (0.78) (0.79)
----- ----- ----- ----- -----
Change in net asset value (1.54) 0.46 0.46 0.06 (1.00)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 7.55 $ 9.09 $ 8.63 $ 8.17 $ 8.11
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) (8.97)% 15.03% 15.95% 11.19% (2.57)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $427,659 $532,906 $501,265 $507,855 $531,773
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.12% 1.11% 1.17% 1.21% 1.19%
Net investment income 9.13% 8.76% 9.21% 10.01% 9.01%
Portfolio turnover 103% 167% 162% 147% 222%
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------------------------- ----------
FROM FROM
YEAR ENDED OCTOBER 31 INCEPTION INCEPTION
------------------------------------------------------- 2/16/94 TO 2/27/98 TO
1998 1997 1996 1995 10/31/94 10/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.07 $ 8.63 $ 8.19 $ 8.13 $ 9.38 $ 9.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.76 0.73 0.71 0.72 0.54 0.50
Net realized and unrealized gain
(loss) (1.55) 0.46 0.45 0.07 (1.25) (1.76)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.79) 1.19 1.16 0.79 (0.71) (1.26)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.76) (0.75) (0.72) (0.73) (0.52) (0.51)
Tax return of capital -- -- -- -- (0.02) --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.76) (0.75) (0.72) (0.73) (0.54) (0.51)
----- ----- ----- ----- ----- -----
Change in net asset value (1.55) 0.44 0.44 0.06 (1.25) (1.77)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 7.52 $ 9.07 $ 8.63 $ 8.19 $ 8.13 $ 7.54
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) (9.61)% 14.18% 14.88% 10.44% (7.67)%(3) (14.09)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $61,026 $52,184 $25,595 $12,331 $6,056 $1,669
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.88% 1.86% 1.92% 1.97% 1.80%(2) 1.88%(2)
Net investment income 8.46% 8.00% 8.47% 9.18% 9.12%(2) 8.94%(2)
Portfolio turnover 103% 167% 162% 147% 222% 103%
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
42 See Notes to Financial Statements
<PAGE>
PHOENIX U.S. GOVERNMENT SECURITIES FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ANDREW SZABO, CFA AND
CHRISTOPHER SANER, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for investors seeking current income and conservation
of capital. Investors should note that while the Fund invests primarily in
securities guaranteed by the U.S. government to provide timely payment of
interest and principal, shares of the Fund itself are not insured or guaranteed.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: For the fiscal year ended October 31, 1998, Class A shares earned 8.16% and
Class B shares returned 7.48% compared with a return of 11.28% for the Lehman
Brothers Government Bond Index.(1) All performance figures assume reinvestment
of distributions and exclude the effect of sales charges.
Q: WHAT FACTORS AFFECTED PERFORMANCES?
A: Performance was held back as a result of our underweighted allocation to
Treasuries, which outperformed all other sectors of the bond market during 1998.
Risk aversion, or the "flight to quality," after Russia's debt moratorium and
the bailout of Long-Term Capital drove the bond market, as investors began
selling all but the most liquid Treasuries. Our decision to deemphasize
Treasuries and maintain positions in other spread sectors led to the
underperformance.
Q: HOW WILL YOU POSITION THE PORTFOLIO GOING FORWARD?
A: We will emphasize an allocation of Treasuries and other high-quality spread
sectors. This will allow the portfolio to earn incremental income while
maintaining the investment objective of capital preservation. The portfolio's
duration will remain in line with the Lehman Brothers Government Bond Index.
NOVEMBER 19, 1998
(1) THE LEHMAN BROTHERS GOVERNMENT BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF GOVERNMENT BOND TOTAL RETURN PERFORMANCE. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
43
<PAGE>
Phoenix U.S. Government Securities Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/98
<TABLE>
<CAPTION>
INCEPTION TO INCEPTION
1 YEAR 5 YEARS 10 YEARS 10/31/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 8.16% 6.00% 7.82% -- --
Class A Shares at POP(3) 3.04 4.98 7.30 -- --
Class B Shares at NAV(2) 7.48 -- -- 5.78% 2/24/94
Class B Shares with CDSC(4) 3.64 -- -- 5.53 2/24/94
Lehman Brothers Government
Bond Index(7) 11.28 6.98 9.05 7.82 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the time
of purchase. CDSC charges for B shares decline from 5% to 0% over a five year
period.
(5) Index information from 2/28/94 to 10/31/98.
(6) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(7) The Lehman Brothers Government Bond Index is an unmanaged but commonly
used measure of government bond total return performance. The index's
performance does not reflect sales charges.
All returns represent past performance which may not be indicative
of future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
"GROWTH OF $10,000" PERIODS ENDING 10/31
Phoenix U.S.
Government Securities
Fund Series Lehman Brothers
Class A(6) Government Bond Index(7)
<S> <C> <C>
10/31/88 $9,526.26 $10,000.00
10/31/89 $10,341.33 $11,203.00
10/31/90 $10,943.32 $11,868.00
10/31/91 $12,501.43 $13,601.00
10/30/92 $13,719.45 $15,004.00
10/29/93 $15,116.30 $16,975.00
10/31/94 $14,514.56 $16,218.00
10/31/95 $16,664.51 $18,710.00
10/31/96 $17,339.91 $19,667.00
10/31/97 $18,701.68 $21,370.00
10/30/98 $20,227.84 $23,781.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000
made on 10/31/88 in Class A shares and reflects the maximum sales charge
of 4.75% on the initial investment. Performance assumes dividends and
capital gains are reinvested. The performance of other share classes
will be greater or less than that shown based on differences in inception
dates, fees and sales charges.
SECTOR WEIGHTINGS 10/31/98
As a percentage of bond holdings
U.S. Government 41%
Non-Agency Mortgage 33%
Municipal 17%
Agency Mortgage-Backed 6%
Corporate 3%
44
<PAGE>
Phoenix U.S. Government Securities Fund Series
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--36.3%
U.S. TREASURY BONDS--10.6%
U.S. Treasury Bonds 5.50%, 8/15/28...... AAA $ 19,500 $ 20,519,852
U.S. TREASURY NOTES--25.7%
U.S. Treasury Notes 4.50%, 9/30/00...... AAA 1,500 1,507,309
U.S. Treasury Notes 5.375%, 6/30/03..... AAA 31,750 33,155,592
U.S. Treasury Notes 5.625%, 5/15/08..... AAA 14,000 15,077,346
-------------
49,740,247
-------------
- ---------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $71,516,217) 70,260,099
- ---------------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--5.3%
Fannie Mae 10%, 5/25/04................. AAA 1,950 2,043,545
Fannie Mae 5.50%, 10/25/04.............. AAA 820 816,260
Fannie Mae 6.75%, 5/25/19............... AAA 1,000 1,023,380
Fannie Mae 6.75%, 6/25/21............... AAA 1,000 1,020,352
GNMA 8%, 9/15/05........................ AAA 104 107,876
GNMA 8%, 9/15/06........................ AAA 20 20,547
GNMA 8.50%, '01-'22..................... AAA 266 270,926
GNSF 6%, 9/15/28........................ AAA 5,014 4,968,155
- ---------------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $10,171,614) 10,271,041
- ---------------------------------------------------------------------------------
MUNICIPAL BONDS--15.1%
CALIFORNIA--3.5%
San Francisco City & County
Redevelopment Agency Revenue Taxable
9.75%, 6/1/13(c)(h)..................... AAA 4,800 6,642,000
GEORGIA--2.9%
Atlanta Downtown Development Authority
Lease Revenue Taxable 6.875%,
2/1/21(e)(h)............................ AAA 5,100 5,680,125
ILLINOIS--3.3%
Chicago Public Building Commission
Special Obligation Taxable 6.25%,
1/1/99(c)............................... AAA 2,000 2,004,520
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
ILLINOIS--CONTINUED
Chicago Public Building Commission
Special Obligation Taxable 6.65%,
1/1/01(c)............................... AAA $ 1,000 $ 1,033,750
Chicago Public Building Commission
Special Obligation Taxable 7%,
1/1/06(c)............................... AAA 2,000 2,177,500
Chicago Public Building Commission
Special Obligation Taxable 7%,
1/1/07(c)............................... AAA 1,050 1,145,812
-------------
6,361,582
-------------
MASSACHUSETTS--1.4%
Massachusetts Port Authority Revenue
Taxable 6.35%, 7/1/06................... AA- 1,000 1,052,500
Massachusetts Port Authority Revenue
Taxable 6.45%, 7/1/09................... AA- 1,575 1,681,313
-------------
2,733,813
-------------
PENNSYLVANIA--4.0%
Harristown Development Corporation
Special Obligation Taxable 6.15%,
2/1/16(h)............................... Aaa(f) 5,000 5,018,750
Pittsburgh Pension Taxable Series A
6.25%, 3/1/11........................... AAA 2,665 2,754,944
-------------
7,773,694
-------------
- ---------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $26,942,135) 29,191,214
- ---------------------------------------------------------------------------------
CORPORATE BONDS--2.9%
GAMING, LOTTERY & PARIMUTUEL COMPANIES--2.9%
Mashantucket Pequot Revenue 144A 6.91%,
9/1/12(b)(h)............................ AAA 5,100 5,508,000
- ---------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $5,170,074) 5,508,000
- ---------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 45
<PAGE>
Phoenix U.S. Government Securities Fund Series
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
NON-AGENCY MORTGAGE-BACKED
SECURITIES--28.5%
CS First Boston Corp. 97-C2, D 6.55%,
11/17/07................................ AAA $ 5,000 $ 5,088,281
CS First Boston Corp. 144A 97-SPCE, D
7.332%, 4/20/08(b)...................... BBB(f) 4,928 4,998,840
CS First Boston Corp. 98-C1, A1B 6.48%,
5/17/08................................. AAA 1,500 1,522,031
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29(h)............... BBB- 1,470 1,479,188
IMPAC CMB Trust 98-2, M3 7.25%,
4/25/28(g).............................. A(f) 2,080 2,112,891
Merrill Lynch Mortgage Investors, Inc.
96-C2, C 6.96%, 11/21/28(h)............. A(f) 9,000 9,167,344
Morgan Stanley Capital I 98-WF2, C
6.77%, 6/15/08.......................... A(f) 7,000 6,847,969
Mortgage Capital Funding, Inc. 96-MC2,
A3 7.008%, 9/20/06(c)(h)................ Aaa(f) 8,550 8,926,735
PNC Mortgage Securities Corp. 96-3, A5
8%, 12/25/26............................ Aaa(f) 4,544 4,631,839
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -------------
<S> <C> <C> <C>
Residential Funding Mortgage Securities
I 96-S3, A5 7.25%, 1/25/26.............. AAA $ 5,362 $ 5,458,879
Residential Funding Mortgage Securities
I 96-S4, A13 7.25%, 2/25/26............. AAA 4,853 4,945,900
- ---------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $55,336,387) 55,179,897
- ---------------------------------------------------------------------------------
<CAPTION>
SHARES
--------
<S> <C> <C> <C>
PREFERRED STOCKS--10.5%
REITS--10.5%
Home Ownership Funding 2, Step-down Pfd.
144A 13.338%(b)(d)(h)................... 20,722 20,318,149
- ---------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $19,291,060) 20,318,149
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.6%
(IDENTIFIED COST $188,427,487) 190,728,400(a)
Cash and receivables, less liabilities--1.4% 2,801,873
--------------
NET ASSETS--100.0% $ 193,530,273
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,980,591 and gross
depreciation of $1,689,834 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$188,437,643.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998 these securities amounted to a value of $30,824,989 or 15.9% 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.
(g) Variable or step coupon security; interest rate shown reflects rate
currently in effect.
(h) All or a portion segregated as collateral.
46 See Notes to Financial Statements
<PAGE>
Phoenix U.S. Government Securities Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $188,427,487) $ 190,728,400
Cash 1,422,920
Receivables
Interest and dividends 2,180,306
Investment securities sold 53,347,295
Fund shares sold 102,615
--------------
Total assets 247,781,536
--------------
LIABILITIES
Payables
Investment securities purchased 53,779,383
Fund shares repurchased 171,780
Transfer agent fee 77,798
Investment advisory fee 74,863
Distribution fee 49,620
Financial agent fee 13,620
Trustees' fee 3,655
Accrued expenses 80,544
--------------
Total liabilities 54,251,263
--------------
NET ASSETS $ 193,530,273
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 199,063,044
Undistributed net investment income 503,407
Accumulated net realized loss (8,337,091)
Net unrealized appreciation 2,300,913
--------------
NET ASSETS $ 193,530,273
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $180,628,092) 18,375,931
Net asset value per share $9.83
Offering price per share $9.83/(1-4.75%) $10.32
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $12,902,181) 1,321,128
Net asset value and offering price per share $9.77
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 10,755,728
Dividends 1,206,985
Security lending 8,752
--------------
Total investment income 11,971,465
--------------
EXPENSES
Investment advisory fee 833,864
Distribution fee, Class A 444,995
Distribution fee, Class B 73,051
Financial agent fee 127,170
Transfer agent 297,689
Printing 33,695
Custodian 29,911
Professional 27,997
Registration 18,457
Trustees 12,675
Miscellaneous 9,030
--------------
Total expenses 1,908,534
--------------
NET INVESTMENT INCOME 10,062,931
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 4,600,713
Net change in unrealized appreciation (depreciation)
on investments (337,053)
--------------
NET GAIN ON INVESTMENTS 4,263,660
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 14,326,591
--------------
--------------
</TABLE>
See Notes to Financial Statements 47
<PAGE>
Phoenix U.S. Government Securities Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 10,062,931 $ 11,039,672
Net realized gain 4,600,713 517,260
Net change in unrealized appreciation
(depreciation) (337,053) 2,715,533
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 14,326,591 14,272,465
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (10,374,488) (10,634,100)
Net investment income, Class B (383,148) (259,835)
In excess of net investment income,
Class A (466,829) --
In excess of net investment income,
Class B (17,241) --
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (11,241,706) (10,893,935)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(4,455,347 and 2,629,037 shares,
respectively) 43,833,411 24,689,395
Net asset value of shares issued from
reinvestment of distributions
(659,479 and 639,861 shares,
respectively) 6,426,680 6,046,315
Cost of shares repurchased (5,613,314
and 6,412,210 shares, respectively) (54,907,874) (60,334,761)
------------- -------------
Total (4,647,783) (29,599,051)
------------- -------------
CLASS B
Proceeds from sales of shares
(1,026,865 and 165,395 shares,
respectively) 10,046,636 1,565,869
Net asset value of shares issued from
reinvestment of distributions
(23,348 and 16,313 shares,
respectively) 226,393 153,651
Cost of shares repurchased (283,214
and 143,485 shares, respectively) (2,751,425) (1,354,825)
------------- -------------
Total 7,521,604 364,695
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS 2,873,821 (29,234,356)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 5,958,706 (25,855,826)
NET ASSETS
Beginning of period 187,571,567 213,427,393
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $503,407
AND $694,705, RESPECTIVELY] $ 193,530,273 $ 187,571,567
------------- -------------
------------- -------------
</TABLE>
48 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
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.66 $ 9.47 $ 9.60 $ 8.88 $ 9.87
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.59 0.55 0.52 0.55 0.64
Net realized and unrealized gain
(loss) 0.18 0.17 (0.15) 0.72 (1.02)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.77 0.72 0.37 1.27 (0.38)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.57) (0.53) (0.50) (0.55) (0.45)
Dividends from net realized gains -- -- -- -- (0.02)
In excess of net investment income (0.03) -- -- -- --
Tax return of capital -- -- -- -- (0.14)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.60) (0.53) (0.50) (0.55) (0.61)
----- ----- ----- ----- -----
Change in net asset value 0.17 0.19 (0.13) 0.72 (0.99)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.83 $ 9.66 $ 9.47 $ 9.60 $ 8.88
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 8.16% 7.85% 4.05% 14.81% (3.98)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $180,628 $182,250 $208,552 $235,879 $262,157
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.00% 0.98% 1.03% 0.99% 0.98%
Net investment income 5.46% 5.63% 5.55% 6.01% 5.92%
Portfolio turnover 290% 377% 379% 178% 101%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------
YEAR ENDED OCTOBER 31 FROM INCEPTION
------------------------------------------------------- 2/24/94 TO
1998 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 0.52 0.47 0.44 0.48 0.39
Net realized and unrealized gain
(loss) 0.18 0.17 (0.14) 0.72 (0.75)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.70 0.64 0.30 1.20 (0.36)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.51) (0.49) (0.43) (0.48) (0.30)
Dividends from net realized gains -- -- -- -- --
In excess of net investment income (0.02) -- -- -- --
Tax return of capital -- -- -- -- (0.09)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.53) (0.49) (0.43) (0.48) (0.39)
----- ----- ----- ----- -----
Change in net asset value 0.17 0.15 (0.13) 0.72 (0.75)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.77 $ 9.60 $ 9.45 $ 9.58 $ 8.86
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 7.48% 6.94% 3.39% 13.82% (3.83)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $12,902 $5,321 $4,875 $3,655 $1,238
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.75% 1.71% 1.78% 1.73% 2.00%(2)
Net investment income 4.74% 4.91% 4.79% 5.23% 4.49%(2)
Portfolio turnover 290% 377% 379% 178% 101%
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
See Notes to Financial Statements 49
<PAGE>
PHOENIX MONEY MARKET FUND SERIES
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, JULIE L. SAPIA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for conservative investors who want competitive money
market yields with minimal risk to principal. Investors should note that an
investment in this Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of an investor's investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
Q: WHAT FACTORS MOST AFFECTED HOW THE FUND WAS POSITIONED DURING THIS REPORTING
PERIOD?
A: The growing economic crisis and unstable global markets were the most
important factors during this reporting period. Safety and liquidity concerns
caused an inflow of cash into the Fund. A very evident liquidity crisis prompted
the Federal Reserve to lower rates on September 26 and once again on October 15,
1998, resulting in a total rate cut of 50 basis points. The Fund maintained a
very competitive yield in this environment. As of the end of the fiscal year on
October 31, 1998, the current yield on Class A shares was 4.59% and 3.82% for
Class B shares.(1)
Q: WHAT IS THE FUND'S MATURITY?
A: The Fund's weighted average maturity as of October 31, 1998 was 58 days. The
Federal Reserve has adopted a bias towards lower interest rates due to the
liquidity crisis. The portfolio is continuously monitored and adjusted based on
current market conditions.
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A: The domestic fundamentals in the economy remain moderately strong with
historically low inflation. The breadth of the liquidity crisis and the impact
it has on the financial markets will be a focus going forward. The market will
continue to question the real strength in the domestic economy and whether we
will see further deterioration in the financial markets, which we believe will
ultimately prompt the Federal Reserve to lower rates once again.(2)
NOVEMBER 2, 1998
(1) 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.
(2) AFTER THIS WAS WRITTEN, THE FED AGAIN LOWERED RATES BY 25 BASIS POINTS ON
NOVEMBER 17, 1998.
50
<PAGE>
Phoenix Money Market Fund Series
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MONTHLY YIELD COMPARISON
Phoenix
Money Market
Fund Series IBC Money
Class A(1) Fund Report(2)
<S> <C> <C>
11/30/97 4.92% 4.97%
12/31/97 4.96% 5.05%
1/31/98 4.88% 5.03%
2/28/98 4.94% 4.96%
3/31/98 4.94% 4.93%
4/30/98 4.93% 4.91%
5/29/98 4.92% 4.91%
6/30/98 4.92% 4.92%
7/31/98 4.79% 4.92%
8/31/98 4.88% 4.91%
9/30/98 4.94% 4.90%
10/31/98 4.74% 4.72%
</TABLE>
(1) This chart illustrates the period from October 31, 1997 to October 31,
1997. The results are not indicative of the rate of return which may be
realized from an investment made in the Money Market Fund today. The Money
Market Fund Series is neither insured nor "guaranteed by the U.S. Government,
and there can be no assurance that the Fund will be able to maintain a stable
Net Asset Value at $1.00 per share.
(2) Average monthly yield of taxable Money Market Funds as reported by IBC's
Money Fund Report.
51
<PAGE>
Phoenix Money Market Fund Series
INVESTMENTS AT OCTOBER 31, 1998
<TABLE>
<CAPTION>
FACE
VALUE INTEREST RESET
(000) DESCRIPTION RATE DATE VALUE
- -------- ---------------------------------------- -------- --------- -------------
<C> <S> <C> <C> <C>
FEDERAL AGENCY SECURITIES--VARIABLE(b)--25.5%
4,500 FFCB (final maturity 4/1/99)............ 4.793% 11/1/98 $ 4,500,000
10,500 FFCB (final maturity 7/24/00)........... 5.29 11/1/98 10,502,048
408 SBA (final maturity 1/25/21)............ 5.75 11/1/98 407,108
3,000 Fannie Mae (final maturity 4/9/99)...... 4.64 11/3/98 2,999,347
5,000 SLMA (final maturity 2/8/99)............ 4.38 11/3/98 5,000,000
2,000 SLMA (final maturity 2/22/99)........... 4.37 11/3/98 2,000,000
3,000 SLMA (final maturity 3/7/01)............ 4.43 11/3/98 3,000,000
3,000 Fannie Mae (final maturity 11/9/98)..... 4.67 11/9/98 2,999,981
3,500 SLMA (final maturity 11/10/98).......... 4.36 11/10/98 3,499,954
3,000 Fannie Mae (final maturity 12/14/98).... 5.137 12/14/98 2,999,806
4,000 Fannie Mae (final maturity 9/17/99)..... 5.32 12/17/98 3,997,896
592 SBA (final maturity 5/25/21)............ 5.75 1/1/99 590,872
2,969 SBA (final maturity 4/15/22)............ 5.75 1/1/99 2,968,840
2,811 SBA (final maturity 10/25/22)........... 5.75 1/1/99 2,807,595
2,973 SBA (final maturity 2/25/23)............ 5.75 1/1/99 2,973,186
3,598 SBA (final maturity 9/25/23)............ 5.625 1/1/99 3,594,500
- -----------------------------------------------------------------------------------------
54,841,133
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S
RATING MATURITY
(Unaudited) DATE
------------ ---------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER--60.4%
1,383 Albertson's, Inc........................ A-1 5.12 11/2/98 1,382,803
1,900 Du Pont (E.I.) de Nemours & Co.......... A-1+ 5.23 11/3/98 1,899,448
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ---------------------------------------- ------------ -------- --------- -------------
<C> <S> <C> <C> <C> <C>
1,700 Preferred Receivables Funding Corp...... A-1 5.26 % 11/3/98 $ 1,699,503
2,000 AlliedSignal, Inc....................... A-1 5.35 11/4/98 1,999,108
3,000 Corporate Receivables Corp.............. A-1+ 5.51 11/4/98 2,998,622
500 Coca-Cola Co............................ A-1+ 5.47 11/5/98 499,696
3,250 Corporate Receivables Corp.............. A-1+ 5.50 11/5/98 3,248,014
2,725 Exxon Imperial U.S., Inc................ A-1+ 5.13 11/5/98 2,723,447
3,000 Exxon Imperial U.S., Inc................ A-1+ 5.18 11/6/98 2,997,842
3,500 Lexington Parker Capital Co. LLC........ A-1 5.30 11/6/98 3,497,424
2,000 SBC Communications, Inc................. A-1+ 5.70 11/6/98 1,998,417
1,000 AlliedSignal, Inc....................... A-1 5.45 11/9/98 998,789
2,500 Asset Securitization Corp............... A-1+ 5.35 11/12/98 2,495,913
2,300 Associates Corporation of North
America................................. A-1+ 5.52 11/13/98 2,300,000
2,500 Albertson's, Inc........................ A-1 5.12 11/16/98 2,494,667
2,000 Enterprise Funding Corp................. A-1+ 5.47 11/16/98 1,995,442
1,325 Preferred Receivables Funding Corp...... A-1 5.25 11/17/98 1,321,908
1,795 Receivables Capital Corp................ A-1+ 5.21 11/17/98 1,790,844
2,500 AlliedSignal, Inc....................... A-1 5.45 11/18/98 2,493,566
1,405 AlliedSignal, Inc....................... A-1 5.45 11/19/98 1,401,171
</TABLE>
52 See Notes to Financial Statements
<PAGE>
Phoenix Money Market Fund Series
<TABLE>
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ---------------------------------------- ------------ -------- --------- -------------
<C> <S> <C> <C> <C> <C>
2,275 Preferred Receivables Funding Corp...... A-1 5.48 % 11/19/98 $ 2,268,766
1,000 General Re Corp......................... A-1+ 5.27 11/20/98 997,219
2,220 General Re Corp......................... A-1+ 5.47 11/20/98 2,213,591
3,735 Colgate-Palmolive Co.................... A-1 5.41 11/25/98 3,721,529
3,500 Corporate Asset Funding Co., Inc........ A-1+ 5.51 11/25/98 3,487,143
3,500 Enterprise Funding Corp................. A-1+ 5.50 11/27/98 3,486,097
2,200 AlliedSignal, Inc....................... A-1 5.43 11/30/98 2,190,377
775 Private Export Funding Corp............. A-1+ 5.18 12/3/98 771,431
3,500 General Electric Capital Corp. (final
maturity 6/4/99)(c)..................... A-1+ 5.459 12/4/98 3,500,223
2,500 Goldman, Sachs & Co..................... A-1+ 5.30 12/11/98 2,485,278
2,500 General Electric Capital Corp........... A-1+ 5.21 12/15/98 2,500,000
300 Preferred Receivables Funding Corp...... A-1 5.20 12/21/98 297,833
1,300 Minnesota Mining and Manufacturing
Co...................................... A-1+ 5.35 12/22/98 1,290,147
3,281 Greenwich Funding Corp.................. A-1+ 5.52 12/31/98 3,250,815
3,650 Greenwich Funding Corp.................. A-1+ 5.50 1/4/99 3,614,311
2,790 Preferred Receivables Funding Corp...... A-1 5.25 1/8/99 2,762,332
2,500 Corporate Asset Funding Co., Inc........ A-1+ 5.33 1/11/99 2,473,720
2,500 Corporate Asset Funding Co., Inc........ A-1+ 5.15 1/12/99 2,474,250
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ---------------------------------------- ------------ -------- --------- -------------
<C> <S> <C> <C> <C> <C>
4,710 Citigroup Co............................ A-1+ 5.20 % 1/14/99 $ 4,659,655
2,000 Greenwich Funding Corp.................. A-1+ 5.36 1/14/99 1,977,964
3,000 Corporate Receivables Corp.............. A-1+ 5.22 1/21/99 2,964,765
3,410 Lexington Parker Capital Co. LLC........ A-1 5.26 1/22/99 3,369,144
2,500 Lexington Parker Capital Co. LLC........ A-1 5.42 1/27/99 2,467,254
2,345 Associates Corporation of North
America................................. A-1+ 5.04 1/29/99 2,315,781
2,500 Merrill Lynch & Co., Inc................ A-1+ 5.10 1/29/99 2,468,479
3,000 Marsh & McLennan Co..................... A-1+ 5.50 2/8/99 2,954,625
1,500 Corporate Receivables Corp.............. A-1+ 5.15 2/10/99 1,478,327
2,500 Beta Finance, Inc....................... A-1+ 5.27 2/18/99 2,460,109
2,500 Goldman, Sachs & Co..................... A-1+ 5.08 2/24/99 2,459,431
3,000 Goldman, Sachs & Co..................... A-1+ 5.18 2/24/99 2,950,358
3,500 Goldman, Sachs & Co..................... A-1+ 5.24 2/26/99 3,440,395
1,275 Enterprise Funding Corp................. A-1+ 5.22 3/15/99 1,250,227
2,500 Beta Finance, Inc....................... A-1+ 5.73 3/16/99 2,499,992
2,000 Corporate Asset Funding Co., Inc........ A-1+ 5.45 4/15/99 1,950,042
2,500 Private Export Funding Corp............. A-1+ 4.68 5/6/99 2,439,550
- --------------------------------------------------------------------------------------------------------
130,127,784
TOTAL COMMERCIAL PAPER
- --------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 53
<PAGE>
Phoenix Money Market Fund Series
<TABLE>
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ---------------------------------------- ------------ -------- --------- -------------
<C> <S> <C> <C> <C> <C>
MEDIUM-TERM NOTES--4.9%
575 General Electric Capital Corp........... A-1+ 8.10 % 1/26/99 $ 577,942
2,750 Associates Corporation of North
America................................. AA- 6.25 3/15/99 2,755,491
1,500 General Electric Capital Corp........... A-1+ 5.98 3/19/99 1,501,373
3,500 Associates Corporation of North
America................................. A-1+ 5.65 6/15/99 3,496,474
1,550 AT&T Capital Corp....................... A-1+ 6.58 9/3/99 1,561,302
600 Associates Corporation of North
America................................. A-1+ 6.75 10/15/99 610,036
- --------------------------------------------------------------------------------------------------------
10,502,618
TOTAL MEDIUM-TERM NOTES
- --------------------------------------------------------------------------------------------------------
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ---------------------------------------- ------------ -------- --------- -------------
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT--2.8%
3,000 Deutsche Bank Financial, Inc............ A-1+ 5.75 % 3/5/99 $ 2,999,515
3,000 Chase Manhattan Bank.................... A-1+ 4.86 4/21/99 3,000,000
- --------------------------------------------------------------------------------------------------------
5,999,515
TOTAL CERTIFICATES OF DEPOSIT
- --------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS--93.6%
(IDENTIFIED COST $201,471,050) 201,471,050(a)
13,798,629
Cash and receivables, less liabilities--6.4%
--------------
$ 215,269,679
NET ASSETS--100.0%
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: At October 31, 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.
(c) Variable rate commercial paper. The interest rate shown reflects the rate
currently in effect.
54 See Notes to Financial Statements
<PAGE>
Phoenix Money Market Fund Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $201,471,050) $ 201,471,050
Cash 229,586
Receivables
Fund shares sold 16,668,993
Interest 850,306
Investment securities sold 15,202
--------------
Total assets 219,235,137
--------------
LIABILITIES
Payables
Fund shares repurchased 3,515,023
Dividend distributions 131,778
Transfer agent fee 98,888
Investment advisory fee 77,102
Financial agent fee 16,701
Distribution fee 13,920
Trustees' fee 3,600
Accrued expenses 108,446
--------------
Total liabilities 3,965,458
--------------
NET ASSETS $ 215,269,679
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of benefical interest 215,269,679
--------------
NET ASSETS $ 215,269,679
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $195,291,918) 195,291,918
Net asset value and offering price per share $1.00
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $19,977,761) 19,977,761
Net asset value and offering price per share $1.00
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 11,079,045
--------------
Total investment income 11,079,045
--------------
EXPENSES
Investment advisory fee 786,202
Distribution fee, Class B 107,961
Financial agent fee 135,568
Transfer agent 359,360
Registration 57,682
Custodian 33,642
Printing 30,878
Professional 21,832
Trustees 16,344
Miscellaneous 2,020
--------------
Total expenses 1,551,489
--------------
NET INVESTMENT INCOME $ 9,527,556
--------------
--------------
</TABLE>
See Notes to Financial Statements 55
<PAGE>
Phoenix Money Market Fund Series
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/98 10/31/97
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 9,527,556 $ 9,307,014
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (8,931,102) (8,890,389)
Net investment income, Class B (596,454) (416,625)
--------------- ---------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (9,527,556) (9,307,014)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,101,598,303 and
732,054,689 shares, respectively) 1,101,598,303 732,054,689
Net asset value of shares issued from
reinvestment of distributions
(7,964,222 and 8,138,566 shares, respectively) 7,964,222 8,138,566
Cost of shares repurchased (1,102,965,310 and
744,357,959 shares, respectively) (1,102,965,310) (744,357,959)
--------------- ---------------
Total 6,597,215 (4,164,704)
--------------- ---------------
CLASS B
Proceeds from sales of shares (46,229,441 and
35,539,707 shares, respectively) 46,229,441 35,539,707
Net asset value of shares issued from
reinvestment of distributions
(482,065 and 329,335 shares, respectively) 482,065 329,335
Cost of shares repurchased (41,747,121 and
31,078,203 shares, respectively) (41,747,121) (31,078,203)
--------------- ---------------
Total 4,964,385 4,790,839
--------------- ---------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 11,561,600 626,135
--------------- ---------------
NET INCREASE IN NET ASSETS 11,561,600 626,135
NET ASSETS
Beginning of period 203,708,079 203,081,944
--------------- ---------------
END OF PERIOD $ 215,269,679 $ 203,708,079
--------------- ---------------
--------------- ---------------
</TABLE>
56 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
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<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 0.049 0.048 0.047 0.053 0.032
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.049 0.048 0.047 0.053 0.032
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.049) (0.048) (0.047) (0.053) (0.032)
---------- ---------- ---------- ---------- ----------
Change in net asset value -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total return 5.00% 4.76% 4.67% 5.32% 3.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $195,292 $188,695 $192,859 $193,534 $196,566
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.73% 0.79% 0.84% 0.71% 0.85%
Net investment income 4.90% 4.76% 4.68% 5.31% 3.19%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
------------------------------------------------------- 7/15/94 TO
1998 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 0.041 0.040 0.039 0.046 0.007
---------- ---------- ---------- ---------- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.041 0.040 0.039 0.046 0.007
---------- ---------- ---------- ---------- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.041) (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 4.22% 4.02% 3.93% 4.63% 0.70%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $19,978 $15,013 $10,223 $8,506 $2,086
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.48% 1.55% 1.59% 1.44% 1.60%(1)
Net investment income 4.15% 4.02% 3.92% 4.62% 3.46%(1)
</TABLE>
(1) Annualized
(2) Not annualized
See Notes to Financial Statements 57
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998
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 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 date income is accrued and paid,
is treated as a gain or loss on foreign currency. The Trust does not
58
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (CONTINUED)
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 and Money Market 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
October 31, 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................... $ 38,154,870 $ 37,386,038
Growth Fund Series..................... 8,735,352 8,557,518
Aggressive Growth Fund Series.......... 3,240,490 3,093,113
U.S. Government Securities Fund
Series............................... 32,061,250 31,426,711
</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, may 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. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
59
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (CONTINUED)
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 $2+
Series Billion Billion Billion
- ---------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Growth Fund Series...................... 0.70% 0.65% 0.60%
Aggressive Growth Fund Series........... 0.70% 0.65% 0.60%
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.
Effective June 25, 1998, Roger Engemann & Associates, Inc. ("REA") was
appointed subadvisor to the Aggressive Growth Fund Series. For its services, REA
is paid a fee by the Adviser equal to 0.20% of the average daily net assets of
the Aggressive Growth Fund Series up to $262 million, 0.35% of such value
between $262 million and $1 billion, 0.325% of such value between $1 billion and
$2 billion and 0.30% of such value in excess of $2 billion. REA is a
wholly-owned subsidiary of Pasadena Capital Corporation which in turn is a
wholly-owned subsidiary of Phoenix Investment Partners, Ltd., an indirect,
majority-owned subsidiary of PHL.
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 $461,952
for Class A shares, deferred sales charges of $585,576 for Class B shares and
$819 for Class C shares, for the year ended October 31, 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 year ended October 31, 1998,
$3,050,942 was earned by the Distributor, $10,549,446 was earned by unaffiliated
participants, and $1,390,286 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 through May 31, 1998, 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 applied.
Effective June 1, 1998, PEPCO receives a financial agent fee equal to the sum
of (1) the documented cost of fund accounting and related services provided by
PFPC Inc. (subagent to PEPCO), plus (2) the documented cost to PEPCO to provide
financial reporting, tax services and oversight of subagent's performance. The
current fee schedule of PFPC Inc. ranges from 0.085% to 0.0125% of the average
daily net asset values of the Fund. Certain minimum fees and fee waivers may
apply.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended October 31, 1998, transfer
agent fees were $7,432,566 of which PEPCO retained $2,980,578 which is net of
fees paid to State Street.
At October 31, 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... 14,432 $ 190,209
High Yield Fund Series Class A.......... 434 3,281
High Yield Fund Series Class C.......... 11,295 85,166
U.S. Government Securities Fund Series
Class A............................... 318 3,130
Money Market Fund Series Class A........ 14,514,769 14,514,769
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended October 31, 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.................. $1,837,877,310 $1,784,926,037
Growth Fund Series.................... 2,803,419,498 3,091,877,488
Aggressive Growth Fund Series......... 410,813,935 452,277,666
High Yield Fund Series................ 574,905,274 581,157,427
U.S. Government Securities Fund
Series.............................. 26,677,065 29,082,445
</TABLE>
60
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (CONTINUED)
Purchases and sales of U.S. Government and agency securities during the year
ended October 31, 1998, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------- -------------
<S> <C> <C>
Balanced Fund Series.................. $ 374,060,649 $ 507,271,649
High Yield Fund Series................ 27,908,752 48,306,172
U.S. Government Securities Fund
Series.............................. 504,383,698 488,337,773
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. CAPITAL LOSS CARRYOVERS
The following Series have capital loss carryforwards which may be used to
offset future capital gains.
<TABLE>
<CAPTION>
U.S.
Aggressive Government
Growth High Yield Securities
Expiration Date Fund Series Fund Series Fund Series
- --------------------- -------------- ----------- -------------
<S> <C> <C> <C>
2002................. -- $14,103,053 $ 5,893,108
2003................. -- 46,929,335 --
2004................. -- -- 2,433,827
2006................. $6,125,512 1,533,950 --
-------------- ----------- -------------
Total.............. $6,125,512 $62,566,338 $ 8,326,935
-------------- ----------- -------------
-------------- ----------- -------------
</TABLE>
For the fiscal year ended October 31, 1998, the following Series had losses
deferred in prior years which were utilized or expired in the current year.
<TABLE>
<CAPTION>
U.S.
Government
High Yield Securities
Fund Series Fund Series
----------- -------------
<S> <C> <C>
Utilized............................. -- $ 4,607,775
Expired.............................. $66,472,552 --
</TABLE>
6. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Series have recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Series and are designed generally to
present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of October 31, 1998,
the Series recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Undistributed Accumulated Capital paid
net net realized in on shares
investment gain of beneficial
income (loss) (loss) interest
------------- ---------------- ----------------
<S> <C> <C> <C>
Balanced Fund Series...... $ 1,441,573 $ (1,206,909) $ (234,664)
Growth Fund Series........ 6,323,768 (77,962) (6,245,806)
Aggressive Growth
Fund Series............. 572,877 5,677 (578,554)
High Yield Fund
Series.................. 244,230 19,801,509 (20,045,739)
U.S. Government
Securities Fund
Series.................. 987,477 (1,819,398) 831,921
</TABLE>
7. OTHER
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 transferred 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 distributed the shares of the Income and Growth Fund to its
shareholders pro rata, in liquidation of the Convertible Fund.
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended October 31, 1998, the following Series distributed
long-term capital gain dividends as follows:
<TABLE>
<CAPTION>
Total
Long-Term 28% Rate-Gain
Distributions Distributions
------------- -------------
<S> <C> <C>
Balanced Fund Series................. $ 77,591,526 $ 69,226,270
Growth Fund Series................... 353,560,785 251,587,362
Aggressive Growth Fund Series........ 2,846,700 2,283,272
</TABLE>
For federal income tax purposes, 16.5% of the ordinary income dividends paid
by the Balanced Fund Series qualify for the dividends received deduction for
corporate shareholders.
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.
61
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Shareholders and Trustees of
Phoenix Series Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Balanced Fund Series, the Growth Fund Series, the Aggressive Growth Fund
Series, the High Yield Fund Series, the U.S. Government Securities Fund Series
and the Money Market Fund Series (constituting the Phoenix Series Fund,
hereinafter referred to as the "Fund") at October 31, 1998, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 17, 1998
62
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Aggressive Growth Fund Series of
Phoenix Series Fund was held on October 7, 1998 to approve the following matter:
1. Approval of a subadvisory agreement with Roger Engemann & Associates.
On the record date for this meeting there were 17,668,445 shares outstanding and
50.05% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Approval of investment subadvisory
agreement 7,756,143 529,914 556,800
</TABLE>
63
<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
John F. Sharry, Executive Vice President
J. Roger Engemann, Senior Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
Steven L. Colton, Vice President
John D. Kattar, Vice President
William E. Keen, III, Vice President
Christopher J. Kelleher, Vice President
James E. Mair, Vice President
William R. Moyer, Vice President
Timothy P. Norman, Vice President
Leonard J. Saltiel, Vice President
Christopher J. Saner, Vice President
Julie L. Sapia, Vice President
Andrew Szabo, Vice President
John S. Tilson, Vice President
Pierre G. Trinque, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
Internet access:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
--------------
PHOENIX EQUITY PLANNING CORPORATION Bulk Rate Mail
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 PAID
Springfield, MA
[LOGO] PHOENIX Permit No. 444
INVESTMENT PARTNERS --------------
PXP 394 (12/98)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000019469
<NAME> PHOENIX SERIES FUND
<SERIES>
<NUMBER> 011
<NAME> PHOENIX BALANCED FUND SERIES-CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 1395963
<INVESTMENTS-AT-VALUE> 1560755
<RECEIVABLES> 40019
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 38155
<TOTAL-ASSETS> 1638929
<PAYABLE-FOR-SECURITIES> 15221
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 42245
<TOTAL-LIABILITIES> 57466
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1351990
<SHARES-COMMON-STOCK> 95035
<SHARES-COMMON-PRIOR> 94227
<ACCUMULATED-NII-CURRENT> 6719
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 57962
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 164792
<NET-ASSETS> 1581463
<DIVIDEND-INCOME> 8759
<INTEREST-INCOME> 48152
<OTHER-INCOME> 0
<EXPENSES-NET> (16636)
<NET-INVESTMENT-INCOME> 40275
<REALIZED-GAINS-CURRENT> 66036
<APPREC-INCREASE-CURRENT> 40038
<NET-CHANGE-FROM-OPS> 146349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (38891)
<DISTRIBUTIONS-OF-GAINS> (250195)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4154
<NUMBER-OF-SHARES-REDEEMED> (20727)
<SHARES-REINVESTED> 17381
<NET-CHANGE-IN-ASSETS> (153910)
<ACCUMULATED-NII-PRIOR> 4441
<ACCUMULATED-GAINS-PRIOR> 247915
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8931
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16636
<AVERAGE-NET-ASSETS> 1686185
<PER-SHARE-NAV-BEGIN> 18.07
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 0.90
<PER-SHARE-DIVIDEND> (0.40)
<PER-SHARE-DISTRIBUTIONS> (2.70)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.29
<EXPENSE-RATIO> 0.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000019469
<NAME> PHOENIX SERIES FUND
<SERIES>
<NUMBER> 012
<NAME> PHOENIX BALANCED FUND SERIES-CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 1395963
<INVESTMENTS-AT-VALUE> 1560755
<RECEIVABLES> 40019
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 38155
<TOTAL-ASSETS> 1638929
<PAYABLE-FOR-SECURITIES> 15221
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 42245
<TOTAL-LIABILITIES> 57466
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1351990
<SHARES-COMMON-STOCK> 2030
<SHARES-COMMON-PRIOR> 1675
<ACCUMULATED-NII-CURRENT> 6719
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 57962
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 164792
<NET-ASSETS> 1581463
<DIVIDEND-INCOME> 8759
<INTEREST-INCOME> 48152
<OTHER-INCOME> 0
<EXPENSES-NET> (16636)
<NET-INVESTMENT-INCOME> 40275
<REALIZED-GAINS-CURRENT> 66036
<APPREC-INCREASE-CURRENT> 40038
<NET-CHANGE-FROM-OPS> 146349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (547)
<DISTRIBUTIONS-OF-GAINS> (4588)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 376
<NUMBER-OF-SHARES-REDEEMED> (330)
<SHARES-REINVESTED> 309
<NET-CHANGE-IN-ASSETS> 2772
<ACCUMULATED-NII-PRIOR> 4441
<ACCUMULATED-GAINS-PRIOR> 247915
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8931
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16636
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