As filed with the Securities and Exchange Commission on October 8, 1999
Registration No. 2-14069
File No. 811-810
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 89 |X|
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 37 |X|
(CHECK APPROPRIATE BOX OR BOXES.)
----------
PHOENIX SERIES FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
----------
101 MUNSON STREET, GREENFIELD, MA 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O PHOENIX EQUITY PLANNING CORPORATION--CUSTOMER SERVICE
(800) 243-1574
REGISTRANT'S TELEPHONE NUMBER
----------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT
AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
|X| IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
[ ] ON PURSUANT TO PARAGRAPH (B), OR
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(I)
[ ] ON PURSUANT TO PARAGRAPH (A)(I)
[ ] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(II)
[ ] ON PURSUANT TO PARAGRAPH (A)(II) OF RULE 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
================================================================================
<PAGE>
PHOENIX SERIES FUND
CROSS REFERENCE SHEET PURSUANT TO RULE 495(A)
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
- - ----------------------------- ------------------
<S> <C> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies, Investment Risk and Return Summary; Investment
and Related Risks........................................ Strategies; Risks Related to Investment Strategies
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things to Know When Selling Shares; Account
Policies; Investor Services; Tax Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
- - ----------------------------- -------------------------------------------
<S> <C> <C>
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund................................... Management of the Trust
14. Control Persons and Principal Holders of Securities...... Management of the Trust
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER THE
APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
<PAGE>
Phoenix Investment Partners
Prospectus
October 8, 1999
- - -------- DUFF & PHELPS
Phoenix-Duff & Phelps
Core Bond Fund
- - -------- ENGEMANN
Phoenix-Engemann
Aggressive Growth Fund
Phoenix-Engemann
Capital Growth Fund
- - -------- GOODWIN
Phoenix-Goodwin
High Yield Fund
Phoenix-Goodwin
Money Market Fund
- - -------- OAKHURST
Phoenix-Oakhurst
Balanced Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or disapproved
of these securities or determined if this
prospectus is truthful or complete. Any
representation to the contrary is a
criminal offense.
This prospectus contains important
information that you should know before
investing in the Phoenix-Duff & Phelps
Core Bond Fund, the Phoenix-Engemann
Aggressive Growth Fund, the Phoenix-
Engemann Capital Growth Fund, the
Phoenix-Goodwin High Yield Fund, the
Phoenix-Goodwin Money Market Fund,
and the Phoenix-Oakhurst Balanced Fund.
Please read it carefully and retain it for
future reference.
[logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
Table of Contents
- - --------------------------------------------------------------------------------
Phoenix-Duff & Phelps Core Bond Fund
Investment Risk and Return Summary............... 1
Fund Expenses.................................... 4
Management of the Fund........................... 5
Phoenix-Engemann Aggressive Growth Fund
Investment Risk and Return Summary............... 7
Fund Expenses.................................... 9
Investment Strategies............................ 10
Risks Related to Investment Strategies........... 11
Management of the Fund........................... 12
Phoenix-Engemann Capital Growth Fund
Investment Risk and Return Summary............... 15
Fund Expenses.................................... 18
Investment Strategies............................ 19
Risks Related to Investment Strategies........... 21
Management of the Fund........................... 24
Phoenix-Goodwin High Yield Fund
Investment Risk and Return Summary............... 26
Fund Expenses.................................... 29
Investment Strategies............................ 30
Risks Related to Investment Strategies........... 32
Management of the Fund........................... 35
Phoenix-Goodwin Money Market Fund
Investment Risk and Return Summary............... 37
Fund Expenses.................................... 40
Investment Strategies............................ 41
Risks Related to Investment Strategies........... 42
Management of the Fund........................... 44
Phoenix-Oakhurst Balanced Fund
Investment Risk and Return Summary............... 45
Fund Expenses.................................... 48
Investment Strategies............................ 49
Risks Related to Investment Strategies........... 50
Management of the Fund........................... 54
Pricing of Fund Shares.............................. 56
Sales Charges....................................... 57
Your Account........................................ 59
How to Buy Shares................................... 60
How to Sell Shares.................................. 61
Things You Should Know When Selling Shares.......... 61
[arrow]Phoenix Account Policies.................................... 63
Series Investor Services................................... 64
Fund Tax Status of Distributions......................... 65
Financial Highlights................................ 66
Additional Information.............................. 73
<PAGE>
PHOENIX-DUFF & PHELPS CORE BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Duff & Phelps Core Bond Fund has an investment objective to seek both
current income and capital appreciation. There is no guarantee that the fund
will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, the fund will invest at least 65% of its
total assets in investment grade debt securities of U.S. issuers.
[arrow] The fund intends to maintain an average credit quality of investments
of "A" or better as rated by Moody's Investors Services, Inc. or
Standard & Poors.
[arrow] The fund may invest in corporate bonds, short-term instruments, U.S.
Government securities, mortgage-backed and asset-backed securities,
Collateralized Mortgage Obligations (CMOs) and municipal securities.
[arrow] Using a top-down investment process, the adviser formulates an economic
outlook, which leads to forecasted behavior of interest rates. To
select securities for portfolio investment, the adviser seeks to
identify those securities that offer an attractive yield while
maintaining high credit quality. For buy and sell decisions, the
adviser utilizes fundamental economic and credit research. Within the
mortgage-backed and Treasury sectors, the buy and sell discipline
relies on the use of financial models to ascertain relative value.
[arrow] Debt securities selected for investment may be of any maturity.
However, fund investments will have an average maturity of 5 to 10
years.
PRINCIPAL RISKS
If you invest in this fund you risk that you may lose your investment.
GENERAL
The market value of your shares and the level of income you receive are subject
to risks associated with the types of securities selected for fund investment,
including interest rate risk and credit risk. Neither the fund nor the adviser
can assure you that a particular level of income will consistently be achieved.
INTEREST RATE RISK
The market value of your shares will be directly affected by trends in interest
rates. If interest rates rise, the value of debt securities generally will fall.
Because the fund may hold securities
Phoenix-Duff & Phelps Core Bond Fund 1
<PAGE>
with longer maturities, the net asset value of the fund may experience greater
price fluctuations in response to changes in interest rates than funds that hold
only securities with short-term maturities. Prices of longer-term securities are
affected more by interest rate changes than prices of shorter-term securities.
CREDIT RISK
Credit risk pertains to the issuers ability to make scheduled interest or
principal payments. Generally, securities rated in the lower rating categories
have a greater chance that the issuer will be unable to make such payments when
due.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, agencies, authorities
and instrumentalities only guarantee principal and interest will be timely paid
to holders of the securities. They do not guarantee that the value of fund
shares will increase.
MORTGAGED-BACKED AND ASSET-BACKED SECURITIES AND CMOS
Early payoffs on the underlying loans in mortgage-backed and asset-backed
securities and CMOs may result in the fund receiving less income than originally
anticipated. The variability in prepayments will tend to limit price gains when
interest rates drop and exaggerate price declines when interest rates rise. In
the event of high prepayments, the fund may be required to invest the proceeds
at lower interest rates, causing the fund to earn less than if the prepayments
had not occurred.
MUNICIPAL SECURITIES
Principal and interest payments on municipal securities may not be guaranteed by
the issuing body and may be payable only from monies derived from a particular
source (so called "revenue bonds"). If the source does not perform as expected,
principal and income payments may not be made on time or at all.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Duff & Phelps Core Bond Fund. The bar chart shows changes in the
fund's Class A Shares
2 Phoenix-Duff & Phelps Core Bond Fund
<PAGE>
performance from year to year over a 10-year period.(1) The table below shows
how the fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index. The fund's past performance is
not necessarily an indication of how the fund will perform in the future.
CORE BOND FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 11.73
1990 8.20
1991 14.04
1992 8.02
1993 7.95
1994 -3.34
1995 17.24
1996 1.93
1997 9.19
1998 6.56
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 6.91% (quarter ending June 30,
1989) and the lowest return for a quarter was (2.73)% (quarter ending March 31,
1994). Year-to-date performance (through September 30, 1999) was (2.58)%.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years -----------------------------------
Class A Class B Class C
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares 1.54% 5.05% 7.48% 6.60% -- --
- - -----------------------------------------------------------------------------------------------------------------
Class B Shares 1.97% N/A N/A -- 5.25% --
- - -----------------------------------------------------------------------------------------------------------------
Class C Shares(3) N/A N/A N/A N/A N/A N/A
- - -----------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond
Index(4) 8.69% 7.27% 9.26% 8.51%(5) 7.61%(6) N/A
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since March 9, 1987 and Class B Shares since February 24,
1994.
(3) Class C Shares will be offered as of the effective date of this prospectus.
(4) The Lehman Brothers Aggregate Bond Index is an unmanaged but commonly used
measure of bond performance. It is a combination of several Lehman Brothers
fixed income indices. The index's performance does not reflect sales charges.
(5) The Lehman Brothers Aggregate Bond Index does not calculate performance
daily; therefore, the return shown is since February 28, 1987.
(6) The Lehman Brothers Aggregate Bond Index does not calculate performance
daily; therefore, the return shown is since February 28, 1994.
Phoenix-Duff & Phelps Core Bond Fund 3
<PAGE>
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES (b)
------ ------ ----------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (a) 1% (c)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-----------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES (b)
------ ------ ----------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.45% 0.45% 0.45%
Distribution and Service (12b-1) Fees (d) 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.00% 1.75% 1.75%
==== ==== ====
</TABLE>
- - --------------------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Class C Shares to be offered as of the effective date of this prospectus.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
4 Phoenix-Duff & Phelps Core Bond Fund
<PAGE>
- - --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - --------------------------------------------------------------------------------
Class A $572 $778 $1,001 $1,641
- - --------------------------------------------------------------------------------
Class B $578 $751 $949 $1,864
- - --------------------------------------------------------------------------------
Class C $278 $551 $949 $2,062
- - --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- - --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - --------------------------------------------------------------------------------
Class B $178 $551 $949 $1,864
- - --------------------------------------------------------------------------------
Class C $178 $551 $949 $2,062
- - --------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
- - --------------------------------------------------------------------------------
THE ADVISER
Duff & Phelps Investment Management Co. ("Duff & Phelps") is the investment
adviser to the fund and is located at 55 East Monroe Street, Suite 3600,
Chicago, Illinois 60603. Duff & Phelps also acts as investment adviser to eight
other mutual funds and as adviser to institutional clients. As of December 31,
1998, Duff & Phelps had approximately $15.2 billion in assets under management
on a discretionary basis.
Subject to the direction of the fund's Board of Trustees, Duff & Phelps is
responsible for managing the fund's investment program and the day-to-day
management of the fund's portfolio. Duff & Phelps manages the fund's assets to
conform with the investment policies as described in this prospectus. The fund
pays Duff & Phelps a monthly investment management fee that is accrued daily
against the value of the fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.45% 0.40% 0.35%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$833,864. The ratio of management fees to average net assets for the fiscal year
ended October 31, 1998 was 0.45%. Prior to October 8, 1999, Phoenix Investment
Counsel, Inc. ("Phoenix") served as the fund's investment adviser. Duff & Phelps
and Phoenix are subsidiaries of Phoenix Investment Partners, Ltd.
Phoenix-Duff & Phelps Core Bond Fund 5
<PAGE>
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of fixed income
investment professionals.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. However, if the problem is not fully addressed,
the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
6 Phoenix-Duff & Phelps Core Bond Fund
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Engemann Aggressive Growth Fund has an investment objective of capital
appreciation. There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, the fund will invest at least 65% of its
total assets in common and preferred stocks, and securities convertible
into common stocks.
[arrow] The adviser is responsible for managing the fund's investment program
and the general operation of the fund. The subadviser manages the
fund's portfolio using a top-down sector approach based upon economic
and market conditions. Securities are then analyzed from a bottom-up
approach focusing on the issuing company's:
[bullet] high, sustainable earnings growth,
[bullet] solid brand, or franchise, identity and its ability to ward
off competition,
[bullet] quality management, and
[bullet] financial strength.
[arrow] The fund may expand its investments by obtaining fixed interest loans
from a bank in amounts up to one-third the value of its net assets.
PRINCIPAL RISKS
If you invest in this fund you risk that you may lose your investment.
The fund will seek to increase the value of your shares by investing in
securities the subadviser expects to increase in value. Most of the fund's
investments will be in common and preferred stocks. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected. As a result, the value of your shares may decrease.
The fund may be subject to greater risks than a fund that does not invest in
securities with growth characteristics.
The fund may borrow money to purchase additional securities. If these securities
decrease in value or do not increase enough to cover interest and other
borrowing costs, the fund will suffer greater losses than it would if no
borrowing took place.
Phoenix-Engemann Aggressive Growth Fund 7
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Engemann Aggressive Growth Fund. The bar chart shows changes in
the fund's Class A Shares performance from year to year over a 10-year
period.(1) The table below shows how the fund's average annual returns for one,
five and ten years compare to those of a broad-based securities market index.
The fund's past performance is not necessarily an indication of how the fund
will perform in the future.
AGGRESSIVE GROWTH FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 21.55
1990 -5.57
1991 29.56
1992 7.66
1993 11.58
1994 -3.92
1995 51.71
1996 11.09
1997 19.37
1998 30.44
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 40.23% (quarter ending
December 31, 1998) and the lowest return for a quarter was (19.55)% (quarter
ending September 30, 1998). Year-to-date performance (through September 30,
1999) was 20.82%.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years -----------------------------
Class A Class B
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 24.26% 19.15% 15.68% 17.42% --
- - ------------------------------------------------------------------------------------------------------------------
Class B Shares 25.76% N/A N/A -- 22.82%
- - ------------------------------------------------------------------------------------------------------------------
Russell 2000 Growth Index(3) 1.23% 10.52% 11.54% 12.79%(4) 13.86%
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since December 31, 1975 and Class B Shares since July 21,
1994.
(3) 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.
(4) Since inception of the Russell 2000 Growth Index on December 31, 1978.
8 Phoenix-Engemann Aggressive Growth Fund
<PAGE>
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.70% 0.70%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.26% 0.26%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.21% 1.96%
==== ====
</TABLE>
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Engemann Aggressive Growth Fund 9
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $592 $841 $1,108 $1,871
- - -----------------------------------------------------------------------------------------------------------------
Class B $599 $815 $1,057 $2,091
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $199 $615 $1,057 $2,091
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of capital appreciation. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund contracts with an adviser, Phoenix Investment Counsel, Inc. to manage
the fund's investment program and to be responsible for the general operation of
the fund, and a subadviser, Roger Engemann and Associates, Inc., to manage the
investments of the fund. The subadviser manages the fund's portfolio from a
top-down sector focus based upon economic and market conditions. Securities are
then analyzed from a bottom-up approach focusing on the basic fundamentals of
each individual company. Securities selected are those that the subadviser
believes have:
[bullet] Superior, sustainable earnings growth,
[bullet] Solid brand identity, or franchise, and the ability to ward
off competition,
[bullet] Quality management, with a strong focus on its shareholders,
and
[bullet] Financial strength and a favorable long-term outlook.
The subadvisor's portfolio selection method may result in a higher portfolio
turnover rate. High portfolio turnover rates may increase costs to the fund, may
negatively affect fund performance, and may increase capital gains
distributions, resulting in greater tax liability to you.
10 Phoenix-Engemann Aggressive Growth Fund
<PAGE>
Under normal circumstances, the fund intends to invest at least 65% of its total
assets in common and preferred stocks or securities convertible into common
stocks or other equity securities that the subadviser believes have a
substantial potential for capital growth.
A convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock of the issuer at predetermined time(s), price(s) or price formula.
Convertible securities have several unique investment characteristics such as:
[bullet] Higher yields than common stocks but lower yields than
comparable non-convertible securities;
[bullet] Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts;
[bullet] The potential for capital appreciation if the market price
of the underlying common stock increases.
Temporary Defensive Strategy. If the adviser believes that market conditions are
not favorable to the fund's principal strategies, the fund may invest in fixed
income securities with or without warrants or conversion features and it may
hold on to its cash or invest without limit in cash equivalents. When this
happens, the fund may not achieve its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
RISKS RELATED TO INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in value of many or
most investments. Particular industries can face poor market conditions for
their products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they may worsen prospects
for others. To the extent that the fund's investments are affected by general
economic declines, declines in industries, and interest rate changes that
negatively affect the companies in which the fund invests, fund share values may
decline. Share values can also decline if the specific companies selected for
fund investment fail to perform as the subadviser expects, regardless of general
economic trends, industry trends, interest rates and other economic factors.
Phoenix-Engemann Aggressive Growth Fund 11
<PAGE>
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
GROWTH STOCKS
Typically, growth stocks make little or no dividend payments to shareholders.
Investment return is based upon the stocks' capital appreciation, making return
more dependent on market increases and decreases as compared to stocks that
provide dividend payments. Growth stocks also tend to rise faster when markets
advance, and drop more sharply when markets fall. Should a market decline occur,
the fund's price may fall more than that of other funds.
LEVERAGE
If the fund borrows money to make additional investments, it must pay interest
on the borrowed funds. The interest paid will decrease the fund's net investment
income. The subadvisor will borrow funds to make additional investments
expecting that those investments will increase in value sufficient to cover
borrowing costs and produce additional gain for the fund. If those investments
decrease in value or do not increase in value sufficient to cover borrowing
costs, the fund will suffer greater losses than would take place if no borrowing
took place. In addition, because the fund must maintain a three-to-one ratio of
net assets to debt, in a declining market, the fund may have to sell securities
under poor market conditions to maintain the required ratio.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
MANAGEMENT OF THE FUND
- - --------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser
12 Phoenix-Engemann Aggressive Growth Fund
<PAGE>
for 14 other mutual funds, as subadviser to three mutual funds and as adviser to
institutional clients. As of December 31, 1998, Phoenix had $23.9 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Roger Engemann & Associates, Inc. ("Engemann") is the investment subadviser to
the fund and is located at 600 North Rosemead Boulevard, Pasadena, California
91107. Engemann acts as adviser to six mutual funds, as subadviser to four other
mutual fund and acts as investment adviser to institutions and individuals. As
of December 31, 1998, Engemann had $5.9 billion in assets under management.
Engemann has been an investment adviser since 1969.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
funds. Engemann, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Engemann manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of
that fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
$1+ billion
1st billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.70% 0.65% 0.60%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix pays Engemann a subadvisory fee at the following rates:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Up to $262 million $1+ billion
$262 million through $1 billion through $2 billion $2+ billion
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Subadvisory Fee 0.20% 0.35% 0.325% 0.30%
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$1,847,122. The ratio of management fees to average net assets for the fiscal
year ended October 31, 1998 was 0.70%.
PORTFOLIO MANAGEMENT
Roger Engemann, James E. Mair and John S. Tilson head the team that is primarily
responsible for the day-to-day management of the fund. Each is a Managing
Director, Equities of Phoenix. Mr. Engemann has been President of Engemann since
its inception in 1969. Messrs. Mair and Tilson are both Executive Vice
Presidents of Portfolio Management of Engemann and both have been with Engemann
since 1983. Messrs. Engemann and Mair have been Chartered Financial Analysts
("CFAs") since 1972, and Mr. Tilson has been a CFA since 1974.
Phoenix-Engemann Aggressive Growth Fund 13
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. However, if the problem is not fully addressed,
the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
14 Phoenix-Engemann Aggressive Growth Fund
<PAGE>
PHOENIX-ENGEMANN CAPITAL GROWTH FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Engemann Capital Growth Fund has an investment objective of long-term
capital appreciation. There is no guarantee that the fund will achieve its
objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, the fund will invest at least 65% of its
total assets in common stocks.
[arrow] The adviser first determines which industries it believes have the
greatest growth potential and then identifies the amount and proportion
of assets to be invested in each. Quantitative and fundamental analysis
is then used to determine which securities to buy and sell.
Approximately 950 large cap stocks go through a quantitative screening
process where they are ranked on a number of factors including earnings
acceleration, earning revisions, relative strength and valuation. From
these, the top 10% are analyzed for potential fund investment.
Companies that the adviser believes are capable of producing long-term,
sustainable above-average earnings growth relative to their cost are
then selected for fund investment. Securities that have dropped 15% or
more in value relative to the S&P 500 Index, that are in the bottom 20%
of their quantitative ranking or that have reached the adviser's target
sell price are analyzed for potential sale out of the fund's portfolio.
[arrow] The fund may invest any amount of its assets in any class or type of
security believed by the adviser to offer the potential for capital
appreciation over the intermediate and long term, including preferred
stocks, investment grade bonds, convertible preferred stocks and
convertible debentures. Distribution of investment income, such as
dividends and interest, is incidental in the selection of investments.
[arrow] Diversification among market sectors will be a factor in selecting
securities for the fund. However, the adviser will put greater emphasis
on selecting securities it believes have good potential for
appreciation rather than upon wide diversification.
[arrow] The fund may invest 25% of its total assets in foreign securities,
including emerging market securities.
[arrow] The fund may invest in small companies as well as large companies.
Phoenix-Engemann Capital Growth Fund 15
<PAGE>
PRINCIPAL RISKS
If you invest in this fund you risk that you may lose your investment.
The fund will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value. Most of the fund's
investments will be in common stocks. Conditions affecting the overall economy,
specific industries or companies in which the fund invests can be worse than
expected. As a result, the value of your shares may decrease.
The value of bonds and other fixed income securities in which the fund may
invest is inversely related to interest rate changes. If interest rates rise,
generally the value of these securities will fall. This may also cause the value
of your shares to decrease.
Smaller companies may be affected to a greater extent than larger companies by
changes in general economic conditions and conditions in particular industries.
Smaller companies may also be relatively new and not have the same operating
history and "track record" as larger companies. This could make future
performance of smaller companies more difficult to predict.
Political and economic uncertainty in foreign countries including "emerging
market" countries (countries with markets that are not fully developed) as well
as less public information about investments may negatively impact the fund's
portfolio. Some investments may be made in currencies other than U.S. dollars
that will fluctuate in value as a result of changes in the currency exchange
rate. Foreign markets and currencies may not perform as well as U.S. markets.
Emerging market countries and companies doing business in emerging markets may
not have the same range of opportunities as countries and their companies in
developed nations. They may also have more obstacles to financial success.
16 Phoenix-Engemann Capital Growth Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Engemann Capital Growth Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table below shows how the fund's average annual returns for one, five and
ten years compare to those of a broad-based securities market index. The fund's
past performance is not necessarily an indication of how the fund will perform
in the future.
CAPITAL GROWTH FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 27.47
1990 6.05
1991 28.01
1992 4.29
1993 4.35
1994 -1.60
1995 33.98
1996 14.68
1997 23.30
1998 29.65
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 22.29% (quarter ending
December 31, 1998) and the lowest return for a quarter was (8.83)% (quarter
ending September 30, 1998). Year-to-date performance (through September 30,
1999) was 1.86%.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years -----------------------------
Class A Class B
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 23.51% 18.15% 15.80% 17.19% --
- - ------------------------------------------------------------------------------------------------------------------
Class B Shares 24.85% N/A N/A -- 21.36%
- - ------------------------------------------------------------------------------------------------------------------
S&P 500 Stock Index(3) 28.76% 24.15% 19.22% 16.23% 27.72%
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since December 31, 1975 and Class B Shares since July 15,
1994.
(3) 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.
Phoenix-Engemann Capital Growth Fund 17
<PAGE>
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.66% 0.66%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.17% 0.17%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.08% 1.83%
==== ====
</TABLE>
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $580 $802 $1,042 $1,730
- - -----------------------------------------------------------------------------------------------------------------
Class B $586 $776 $990 $1,951
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
18 Phoenix-Engemann Capital Growth Fund
<PAGE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
Class B $186 $576 $990 $1,951
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of long-term capital appreciation. There is
no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund invests primarily in a portfolio of common stocks. Under normal
circumstances the fund intends to invest at least 65% of its total assets in
common stocks.
To select securities for fund investment, the adviser first determines which
industries, such as health care, technology, and energy, it believes have the
greatest growth potential given the adviser's future economic outlook. The
adviser will then identify the amount and proportion of assets to be invested in
each such industry. The adviser will then use quantitative and fundamental
analysis to determine which securities to buy and sell within each industry
given its asset allocation. Approximately 950 large cap stocks go through a
quantitative screening process where they are ranked on a number of factors,
including earnings acceleration, earning revisions, relative strength and
valuation. From these, the top 10% are analyzed for potential fund investment.
The adviser's analysis includes such activities as developing earnings models,
visiting companies, analyzing industry information and seeking information from
other research firms. Companies that the adviser believes are capable of
producing long-term and above-average sustainable earnings growth relative to
their cost are then selected for fund investment.
Understanding the importance of a strong sell discipline, the adviser's
investment process also incorporates three separate sell indicators.
Specifically, if any holding:
[bullet] drops 15% or more in value relative to the S&P 500 Index,
[bullet] falls into the bottom 20% of their quantitative ranking, or
[bullet] reaches the adviser's target sell price,
it is reviewed by the adviser for potential sale.
Phoenix-Engemann Capital Growth Fund 19
<PAGE>
The adviser selects common stocks of companies that it believes have the
potential to appreciate. However, since common stocks do not always afford the
greatest promise for capital appreciation, the fund may invest any amount of its
assets in any class or type of security believed by the adviser to offer the
potential for capital appreciation over both the intermediate and long terms,
including preferred stocks and investment grade bonds. When interest rates fall,
generally the value of bonds rises. Distribution of income, such as dividends
and interest, is incidental in the selection of investments for the fund. The
adviser will monitor portfolio securities to determine whether they are
contributing to the fund's objective. Diversification among market sectors will
also be a factor in selecting securities for the fund. However, the adviser will
put greater emphasis on selecting securities it believes have good potential for
appreciation rather than upon wide diversification.
The fund may also invest in convertible securities. A convertible security is a
bond, debenture, note, preferred stock or other security that may be converted
into or exchanged for a prescribed amount of common stock of the issuer at
predetermined time(s), price(s) or price formula. Convertible securities have
several unique investment characteristics such as:
[bullet] Higher yields than common stocks but lower yields than
comparable non-convertible securities;
[bullet] Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts;
[bullet] The potential for capital appreciation if the market price
of the underlying common stock increases.
The fund may invest up to 25% of its net assets in securities of foreign
(non-U.S.) issuers. The fund may invest in a broad range of foreign securities
including equity, debt and convertible securities and foreign government
securities. Issuers may be in established market countries and emerging market
countries.
Temporary Defensive Strategy. If the adviser believes that market conditions are
not favorable to the fund's principal strategies, the fund may invest in fixed
income securities with or without warrants or conversion features and it may
hold on to its cash or invest without limit in cash equivalents. When this
happens, the fund may not achieve its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
20 Phoenix-Engemann Capital Growth Fund
<PAGE>
RISKS RELATED TO INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in value of many or
most investments. Particular industries can face poor market conditions for
their products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. To the extent that the fund's
investments are affected by general economic declines and declines in industries
that negatively affect the companies in which the fund invests, fund share
values may decline. Share values can also decline if the specific companies
selected for fund investment fail to perform as the adviser expects, regardless
of general economic trends, industry trends, and other economic factors.
Likewise, if interest rates rise, generally the value of fixed income
investments will fall which may result in the decrease of share values.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
SMALL MARKET CAPITALIZATION INVESTING
Companies with small capitalization are often companies in industries that have
recently emerged due to cultural, economic, regulatory or technological
developments. Such developments can have a significant positive or negative
effect on small capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental prospects, investment
returns from smaller capitalization companies can be highly volatile. Smaller
companies may find their ability to raise capital impaired by their size or lack
of operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
FOREIGN INVESTING
Investing in the securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include:
[bullet] differences in accounting, auditing and financial reporting
standards,
[bullet] generally higher commission rates on foreign portfolio
transactions,
[bullet] differences and inefficiencies in transaction settlement
systems,
[bullet] the possibility of expropriation or confiscatory taxation,
Phoenix-Engemann Capital Growth Fund 21
<PAGE>
[bullet] adverse changes in investment or exchange control
regulations,
[bullet] political instability, and
[bullet] potential restrictions on the flow of international capital.
Political and economic uncertainty as well as less public information about
investments may negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the fund.
Many of the foreign securities held by the fund will not be registered with, nor
will the issuers of those securities be subject to the reporting requirements
of, the U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
FOREIGN CURRENCY
Changes in foreign exchange rates will affect the value of those securities
denominated or quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine exchange rates and
these forces are in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can affect the fund's
net asset value (share price) and dividends either positively or negatively
depending upon whether foreign currencies are appreciating or depreciating in
value relative to the U.S. dollar. Exchange rates fluctuate over both the long
and short terms.
On January 1, 1999, eleven European countries began converting from their
sovereign currency to the European Union common currency called the "Euro." This
conversion may expose the fund to certain risks, including the reliability and
timely reporting of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect specific securities
in the fund's portfolio:
[bullet] Known trends or uncertainties related to the Euro conversion
that an issuer reasonably expects will have a material impact
on revenues, expenses or income from its operations;
[bullet] Competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
22 Phoenix-Engemann Capital Growth Fund
<PAGE>
[bullet] Issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
[bullet] Currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
[bullet] Potential tax consequences.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual companies
in developing countries may impose limitations on foreign ownership to prevent,
among other concerns, violation of foreign investment limitations.
The economies of developing countries generally are heavily dependent upon
international trade. And accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
Phoenix-Engemann Capital Growth Fund 23
<PAGE>
MANAGEMENT OF THE FUND
- - --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Roger Engemann & Associates, Inc. ("Engemann") is the investment subadviser to
the fund and is located at 600 North Rosemead Boulevard, Pasadena, California
91107. Engemann acts as adviser to six mutual funds, as subadviser to four other
mutual funds and acts as investment adviser to institutions and individuals. As
of December 31, 1998, Engemann had $5.9 billion in assets under management.
Engemann has been an investment adviser since 1969.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
funds. Engemann, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Engemann manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of
that fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
$1+ billion
1st billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.70% 0.65% 0.60%
- - -----------------------------------------------------------------------------------------------------------------
Phoenix pays Engemann a subadvisory fee at the following rates:
- - ------------------------------------------------------------------------------------------------------------------
Up to
$3 billion $3+ billion
- - ------------------------------------------------------------------------------------------------------------------
Subadvisory Fee 0.10% 0.30%
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$17,237,170. The ratio of management fees to average net assets for the fiscal
year ended October 31, 1998 was 0.66%.
24 Phoenix-Engemann Capital Growth Fund
<PAGE>
PORTFOLIO MANAGEMENT
Roger Engemann, James E. Mair and John S. Tilson head the team that is primarily
responsible for the day-to-day management of the fund. Each is a Managing
Director, Equities of Phoenix. Mr. Engemann has been President of Engemann since
its inception in 1969.
Messrs. Mair and Tilson are both Executive Vice Presidents of Portfolio
Management of Engemann and both have been with Engemann since 1983. Messrs.
Engemann and Mair have been Chartered Financial Analysts ("CFAs") since 1972,
and Mr. Tilson has been a CFA since 1974.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. However, if the problem is not fully addressed,
the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
Phoenix-Engemann Capital Growth Fund 25
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin High Yield Fund has a primary investment objective to seek high
current income and a secondary objective of capital growth. There is no
guarantee that the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, at least 80% of the fund's total assets
will be invested in fixed income securities and preferred stock,
including:
[bullet] debt obligations,
[bullet] certificates of deposit,
[bullet] commercial paper,
[bullet] bankers acceptances,
[bullet] government obligations, issued or guaranteed by federal,
state or municipal governments, their agencies or
instrumentalities,
[bullet] loan participations in secured and unsecured corporate loans,
and
[bullet] convertible debt securities, preferred stock and convertible
preferred stock.
[arrow] The fund intends to invest at least 65% of its total assets in a
diversified portfolio of high yield, high risk fixed income securities
(commonly referred to as "junk bonds").
[arrow] To select securities for portfolio investment, the adviser first seeks
to identify the types of high yield securities for investment. The
adviser will analyze the various types of high yield securities to
determine those that the adviser believes have attractive values based
on risk as compared to other high yield security types. The adviser
will then analyze specific issues within the types of securities
selected seeking those that are undervalued based on factors such as
management of the company, company strategy, earnings coverage of
interest, cash flow, liquidity and financial flexibility. The fund may
invest in securities of any maturity as it seeks to maintain interest
rate risk similar to that of its benchmark index.
[arrow] The fund may invest 35% of its total assets in foreign securities,
including emerging market securities.
26 Phoenix-Goodwin High Yield Fund
<PAGE>
PRINCIPAL RISKS
If you invest in this fund you risk that you may lose your investment.
The adviser intends to select investments that it believes will provide high
current income. If the adviser misjudges the return potential, or the ability of
issuers to make scheduled principal and interest payments, the fund's returns
may be lower than prevailing returns and the fund's income available for
distribution maybe less than that of other funds. Neither the fund nor the
adviser can assure you that a particular level of income will consistently be
achieved.
Junk bonds present a greater risk that the issuer will not be able to make
interest or principal payments on time. If interest and principal payments are
not made, the fund would lose income and could expect a decline in the market
value of the securities. Analysis of junk bonds is also more complex than for
higher rated securities, making it more difficult for the adviser to accurately
predict return and risk. The value of junk bonds is inversely related to
interest rate changes. If interest rates rise, generally the value of junk bonds
will decline.
Securities with longer maturities may be subject to greater price fluctuations
due to interest rates, tax laws and other general market factors than securities
with shorter maturities.
Unrated securities may not have as broad a market as rated securities making
them more difficult to sell. This could cause the security to lose value.
Obligations issued or guaranteed by federal, state, and municipal governments,
agencies, authorities and instrumentalities only guarantee principal and
interest will be timely paid to holders of the securities. The
entities do not guarantee that the value of fund shares will increase.
Political and economic uncertainty in foreign countries including "emerging
market" countries (countries with markets that are not fully developed) as well
as less public information about investments may negatively impact the fund's
portfolio. Some investments may be made in currencies other than U.S. dollars
that will fluctuate in value as a result of changes in the currency exchange
rate. Foreign markets and currencies may not perform as well as U.S. markets.
Emerging market countries and companies doing business in emerging markets may
not have the same range of opportunities as countries and their companies in
developed nations. They may also have more obstacles to financial success.
Phoenix-Goodwin High Yield Fund 27
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin High Yield Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table below shows how the fund's average annual returns for one, five and
ten years compare to those of a broad-based securities market index. The fund's
past performance is not necessarily an indication of how the fund will perform
in the future.
HIGH YIELD FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 -0.95
1990 -1.08
1991 24.67
1992 16.96
1993 21.48
1994 -7.97
1995 17.72
1996 17.23
1997 13.61
1998 -6.72
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 10.35% (quarter ending June
30, 1995) and the lowest return for a quarter was (13.86)% (quarter ending
September 30, 1998). Year-to-date performance (through September 30, 1999) was
4.65%.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years -----------------------------
Class A Class B
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares (11.17)% 5.09% 8.33% 10.34% --
- - ------------------------------------------------------------------------------------------------------------------
Class B Shares (10.71)% N/A N/A -- 4.70%
- - ------------------------------------------------------------------------------------------------------------------
CS First Boston High Yield Index(3) 0.58% 8.16% 10.74% 11.99%(4) 8.01%(5)
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares July 28, 1980 and Class B Shares since February 16, 1994.
(3) The CS First Boston High Yield Index is an unmanaged but commonly used index
that tracks the returns of all new publicly offered debt of more than $75
million rated below BBB or BBB/BB+. The index's performance does not reflect
sales charges.
(4) Since inception of the CS First Boston High Yield Index on
December 31, 1982.
(5) The CS First Boston High Yield Index is not calculated
daily; the return shown is since February 28, 1994, the closest date to
inception for which data is available.
28 Phoenix-Goodwin High Yield Fund
<PAGE>
Performance information for Class C Shares is not included because the Class has
not had annual returns for at least one calendar year.
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of 1% (b)
the lesser of the value redeemed or the amount invested) None 5% (a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees (c) 0.25% 1.00% 1.00%
Other Expenses 0.22% 0.22% 0.22%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.12% 1.87% 1.87%
==== ==== ====
</TABLE>
- - --------------------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Goodwin High Yield Fund 29
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $584 $814 $1,063 $1,773
- - -----------------------------------------------------------------------------------------------------------------
Class B $590 $788 $1,011 $1,995
- - -----------------------------------------------------------------------------------------------------------------
Class C $290 $588 $1,011 $2,190
- - -----------------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
Class B $190 $588 $1,011 $1,995
- - -----------------------------------------------------------------------------------------------------------------
Class C $190 $588 $1,011 $2,190
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has a primary investment objective to seek high current income and a
secondary objective of capital growth. The fund will consider capital growth
when it is consistent with the objective of high current income. There is no
guarantee that the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, at least 80% of the fund's total assets will be
invested in fixed income securities and preferred stock, including:
[bullet] debt obligations,
[bullet] certificates of deposit,
[bullet] commercial paper,
[bullet] bankers acceptances,
[bullet] government obligations, issued or guaranteed by federal,
state or municipal governments, their agencies or
instrumentalities,
[bullet] loan participations in secured and unsecured corporate loans,
and
[bullet] convertible debt securities, preferred stock and convertible
preferred stock.
30 Phoenix-Goodwin High Yield Fund
<PAGE>
To select securities for portfolio investment, the adviser first seeks to
identify the types of high yield securities for investment. The adviser will
analyze the various types of high yield securities including asset-backed,
corporate bonds, foreign government, foreign corporate bonds and preferred
stocks to determine those that the adviser believes have relative value as
compared to other high yield security types. Determining relative value involves
ranking security types based on the difference between the price paid to
purchase the security type as compared to the cost of a U.S. Treasury security.
The price difference is caused by the increased risk of investing in non-U.S.
Treasury securities. Security types are then compared to each other to determine
those that have attractive valuations. The adviser will then analyze specific
issues within the types of securities selected seeking those that are
undervalued based on certain company factors including:
[bullet] management,
[bullet] company strategy,
[bullet] earnings coverage of interest,
[bullet] cash flow measurements,
[bullet] liquidity, and
[bullet] financial flexibility.
The fund may invest in securities of any maturity as it seeks to maintain
interest rate risk similar to that of its benchmark index.
The fund intends to invest at least 65% of its total assets in high yield, high
risk securities (so called "junk bonds"). The high yields on these securities
often reflect the greater risks associated with investing in these types of
securities. High yield, high risk securities are in the lower rating categories,
or if unrated, of comparable, limited quality. Credit ratings are established by
nationally recognized statistical rating organizations (NRSROs). The fund will
only invest in securities in an NRSRO's lowest rating category when the adviser
believes that the financial condition of the issuer or protections afforded to
the securities is stronger than the rating indicates. The value of junk bonds is
inversely related to interest rates.
The fund may invest in securities in higher rating categories when the adviser
believes the investment is consistent with the fund's investment objective.
Please see the Statement of Additional Information for a detailed list of rating
categories.
The fund may invest up to 35% of its net assets in securities of foreign
(non-U.S.) issuers. The fund may invest in a broad range of foreign securities,
including equity, debt and convertible securities and foreign government
securities. Issuers may be in established market countries and emerging market
countries.
The fund may also invest in convertible securities. A convertible security is a
bond, debenture, note, preferred stock or other security that may be converted
into or exchanged for a prescribed
Phoenix-Goodwin High Yield Fund 31
<PAGE>
amount of common stock of the issuer at predetermined time(s), price(s) or price
formula. Convertible securities have several unique investment characteristics
such as:
[bullet] Higher yields than common stocks but lower yields than
comparable nonconvertible securities;
[bullet] Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts;
[bullet] The potential for capital appreciation if the market price of
the underlying common stock increases.
The adviser will seek to minimize risk through diversification and continual
evaluation of current developments in interest rates and economic conditions.
This may cause the fund to experience a high portfolio turnover rate as compared
to other mutual funds. High portfolio turnover rates may result in higher costs
to the fund, may negatively affect performance and could increase the amount of
capital gain distributions, resulting in greater tax liability to you.
Temporary Defensive Strategy. If the adviser believes that market conditions are
not favorable to the fund's principal strategies, the fund may hold on to its
cash or invest with out limit in cash equivalents or other fixed income
securities. When this happens, the fund may not achieve its investment
objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
RISKS RELATED TO INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
GENERAL
The adviser intends to select investments that provide returns that are higher
than prevailing returns on most fixed income securities. If the adviser
misjudges the return potential of selected investments, the fund's returns may
be lower than prevailing returns, and the fund's income available for
distribution to shareholders may be less, on a relative basis, than other fixed
income opportunities. Similarly, if the adviser misjudges the ability of the
issuer of a portfolio security to make scheduled interest or other income
payments to the fund, the fund's income available for distribution to
shareholders may decrease. Neither the fund nor the adviser can assure you that
a particular level of income will consistently be achieved.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
32 Phoenix-Goodwin High Yield Fund
<PAGE>
HIGH RISK-HIGH YIELD SECURITIES
Although high risk, high yield securities provide greater income and opportunity
for capital appreciation than investments in higher grade securities, they also
typically entail greater price volatility and principal and interest risk. There
is a greater risk that an issuer will not be able to make principal and interest
payments on time. Lower rated securities may not trade as often and may be less
liquid than higher rated securities. Fund expenses could increase if the fund
were to pursue recovery of missed income payments. Achievement of fund goals
will be more dependent on the adviser's ability than if the fund invested in
securities in higher rating categories because analysis of the creditworthiness
of issuers of below investment grade securities may be more complex than for
higher grade securities, making it more difficult for the adviser to accurately
predict risk.
LONG-TERM MATURITIES
Securities with longer maturities may be subject to greater price fluctuations
due to interest rates, tax laws and other general market factors than securities
with shorter maturities.
FOREIGN INVESTING
Investing in the securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include:
[bullet] differences in accounting, auditing and financial reporting
standards,
[bullet] generally higher commission rates on foreign portfolio
transactions,
[bullet] differences and inefficiencies in transaction settlement
systems,
[bullet] the possibility of expropriation or confiscatory taxation,
[bullet] adverse changes in investment or exchange control
regulations,
[bullet] political instability, and
[bullet] potential restrictions on the flow of international capital.
Political and economic uncertainty as well as less public information about
investments may negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the fund.
Many of the foreign securities held by the fund will not be registered with, nor
will the issuers of those securities be subject to the reporting requirements
of, the U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may
Phoenix-Goodwin High Yield Fund 33
<PAGE>
differ favorably or unfavorably from the U.S. economy in such respects as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
FOREIGN CURRENCY
Changes in foreign exchange rates will affect the value of those securities
denominated or quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine exchange rates and
these forces are in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can affect the fund's
net asset value (share price) and dividends either positively or negatively
depending upon whether foreign currencies are appreciating or depreciating in
value relative to the U.S. dollar. Exchange rates fluctuate over both the long
and short terms.
On January 1, 1999, eleven European countries began converting from their
sovereign currency to the European Union common currency called the "Euro." This
conversion may expose the fund to certain risks, including the reliability and
timely reporting of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect specific securities
in the fund's portfolio:
[bullet] Known trends or uncertainties related to the Euro conversion
that an issuer reasonably expects will have a material impact
on revenues, expenses or income from its operations;
[bullet] Competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
[bullet] Issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
[bullet] Currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
[bullet] Potential tax consequences.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual companies
in developing countries may impose limitations on foreign ownership to prevent,
among other concerns, violation of foreign investment limitations.
34 Phoenix-Goodwin High Yield Fund
<PAGE>
GOVERNMENT SECURITIES
Obligations issued or guaranteed by federal, state, and municipal governments,
agencies, authorities and instrumentalities only guarantee principal and
interest will be timely paid to holders of the securities. The entities do not
guarantee that the value of fund shares will increase.
DEFERRED COUPON AND ZERO COUPON BONDS
The market prices of deferred coupon and zero coupon bonds generally are more
volatile than the market prices of securities that pay interest on a regular
basis. Because the fund will not receive cash payments earned on these
securities on a current basis, the fund may have to distribute cash obtained
from other sources in order to satisfy distribution requirements. This may
require that certain securities be sold to supply cash for distributions at a
time that is less favorable than if the fund were not required to sell such
securities, and such sales may adversely affect the fund's turnover rate.
UNRATED SECURITIES
Unrated securities may not be lower in quality then rated securities but due to
their perceived risk they may not have as broad a market as rated securities.
Analysis of unrated securities is more complex than for rated securities, making
it more difficult for the adviser to accurately predict risk.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
MANAGEMENT OF THE FUND
- - --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional
Phoenix-Goodwin High Yield Fund 35
<PAGE>
clients. As of December 31, 1998, Phoenix had $23.9 billion in assets under
management. Phoenix has acted as an investment adviser for over sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.65% 0.60% 0.55%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$3,942,021. The ratio of management fees to average net assets for the fiscal
year ended October 31, 1998 was 0.65%.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of fixed income
professionals lead by Timothy P. Norman, Managing Director, Fixed Income, of
Phoenix. Mr. Norman is also Executive Vice President of Duff & Phelps Investment
Management Co., an affiliate of Phoenix, where he serves as a senior member of
the fixed income management group responsible for the management of
approximately $10 billion. Mr. Norman is a Chartered Financial Analyst and has
held various investment management positions with Duff & Phelps Investment
Management Co. since 1987.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. However, if the problem is not fully addressed,
the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
36 Phoenix-Goodwin High Yield Fund
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin Money Market Fund has an investment objective of seeking as high
a level of current income as is consistent with the preservation of capital and
maintenance of liquidity. There is no guarantee that the fund will achieve the
objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund seeks to maintain a stable $1.00 per share price.
[arrow] The fund will invest in a diversified portfolio of high quality money
market instruments with maturities of 397 days or less. The average
maturity of the fund's portfolio securities, based on their dollar
value, will not exceed 90 days.
[arrow] The fund will invest exclusively in the following instruments:
[bullet] Obligations issued or guaranteed by the U.S. government,
agencies, authorities and instrumentalities;
[bullet] Obligations issued by banks and savings and loan
associations, including dollar-denominated obligations of
foreign branches of U.S. banks and U.S. branches of foreign
banks;
[bullet] Dollar-denominated obligations guaranteed by banks or
savings and loan associations;
[bullet] Federally insured obligations of other banks or savings and
loan associations;
[bullet] Commercial paper;
[bullet] Short-term corporate obligations; and
[bullet] Repurchase agreements.
[arrow] At least 95% of the fund's total assets will be invested in securities
in the highest short-term rating category. Generally, investments will
be limited to securities in the two highest short-term rating
categories.
[arrow] The fund may invest more than 25% of its assets in the domestic banking
industry.
[arrow] The fund may forego purchasing securities with the highest available
yield due to considerations of liquidity and safety of principal.
[arrow] The adviser will buy, sell and trade securities in anticipation of, or
in response to, changing economic and money market conditions and
trends. This, and the short-term nature of money market instruments,
may result in a high portfolio turnover rate.
Phoenix-Goodwin Money Market Fund 37
<PAGE>
PRINCIPAL RISKS
An investment in the 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 your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
The adviser intends to select investments that optimize the fund's yield while
preserving capital and maintaining liquidity. Because market conditions and
interest rates determine portfolio security yields, neither the fund nor the
adviser can assure you that the fund's yield will remain constant or that a
particular level of income will be achieved. Generally, when interest rates
rise, the value of debt securities falls.
A security's short-term investment rating may decline, increasing the chances
the issuer may not be able to make principal and interest payments on time. This
may reduce the fund's stream of income and decrease the fund's yield.
Obligations issued or guaranteed by the U.S. government, its agencies,
authorities and instrumentalities, or guaranteed or insured by banks only
guarantee or insure principal and interest will be timely paid to holders of the
securities. The entities do not guarantee that the value of fund shares will
increase.
If the seller of a repurchase agreement does not repurchase the underlying
securities, the fund may incur a loss.
Because the fund may concentrate more than 25% of fund assets in the banking
industry, conditions which negatively affect the banking industry generally will
have a greater impact on this fund as compared to funds that do not so
concentrate their assets.
38 Phoenix-Goodwin Money Market Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Money Market Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table below shows the fund's average annual returns for one, five and ten
years and the life of the fund. The fund's past performance is not necessarily
an indication of how the fund will perform in the future.
MONEY MARKET FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 8.80
1990 7.82
1991 5.70
1992 3.28
1993 2.53
1994 3.54
1995 5.44
1996 4.73
1997 4.92
1998 4.94
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 2.30% (quarter ending June 30,
1989) and the lowest return for a quarter was 0.60% (quarter ending June 30,
1993). Year-to-date performance (through September 30, 1999) was 3.28%.
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years Life of the Fund(2)
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares 4.94% 4.71% 5.15% 7.16%
- - ------------------------------------------------------------------------------------------------------------------
Class B Shares 0.31% N/A N/A 3.77%
- - ------------------------------------------------------------------------------------------------------------------
Class C Shares(3) N/A N/A N/A N/A
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for a full redemption in the fund's Class B Shares.
(2) Class A Shares since July 15, 1980 and Class B Shares since July 15, 1994.
(3) Class C Shares will be offered as of the effective date of this prospectus.
The fund's 7-day yield on December 31, 1998 was 4.6% for Class A Shares and 3.8%
for Class B Shares.
Phoenix-Goodwin Money Market Fund 39
<PAGE>
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES (b)
------ ------ ----------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) None None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (a) 1% (c)
Maximum Sales Charge (load) Imposed on Reinvested None
Dividends None None
Redemption Fee None None None
Exchange Fee None None None
--------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES (b)
------ ------ ----------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.40% 0.40% 0.40%
Distribution and Service (12b-1) Fees (d) None 0.75% 1.00%
Other Expenses 0.33% 0.33% 0.33%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.73% 1.48% 1.73%
==== ==== ====
</TABLE>
- - ------------------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Class C Shares to be offered as of the effective date of this prospectus.
(c) The deferred sales charge is imposed on Class C shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
40 Phoenix-Goodwin Money Market Fund
<PAGE>
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $75 $233 $406 $906
- - ------------------------------------------------------------------------------------------------------------------
Class B $551 $668 $808 $1,565
- - ------------------------------------------------------------------------------------------------------------------
Class C $276 $545 $939 $2,041
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $151 $468 $808 $1,565
- - ------------------------------------------------------------------------------------------------------------------
Class C $176 $545 $939 $2,041
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of seeking as high a level of current
income as is consistent with the preservation of capital and maintenance of
liquidity. There is no guarantee that the fund will achieve the objective.
PRINCIPAL INVESTMENT STRATEGIES
The adviser will seek a high level of return relative to the market by selecting
securities for the fund's portfolio in anticipation of, or in response to,
changing economic conditions and money market conditions and trends. The adviser
may not purchase securities with the highest available yield if the adviser
believes that such an investment is inconsistent with the fund objectives of
preservation of capital and maintenance of liquidity.
The fund will invest in a diversified portfolio of high quality money market
instruments with maturities of 397 days or less. The average maturity of the
fund's portfolio securities, based on their dollar value, will not exceed 90
days.
The following money market instruments are the only investments the fund will
have in its portfolio at any time:
[bullet] Obligations issued or guaranteed by the U.S. government,
agencies, authorities and instrumentalities, including U.S.
Treasury obligations, securities issued by the Government
National Mortgage Association (GNMA), the Federal Home Loan
Mortgage Corporation (FHLMC), the Federal National Mortgage
Association
Phoenix-Goodwin Money Market Fund 41
<PAGE>
(FNMA), the Student Loan Marketing Association (SLMA) and
other federal agencies;
[bullet] Obligations issued by banks and savings and loan
associations, including dollar-denominated obligations of
foreign branches of U.S. banks and U.S. branches of foreign
banks, including certificates of deposits and bankers
acceptances ;
[bullet] Dollar-denominated obligations guaranteed by banks or savings
and loan associations;
[bullet] Federally insured obligations of other banks or savings and
loan associations;
[bullet] Commercial paper;
[bullet] Short term corporate obligations; and
[bullet] Repurchase agreements. A repurchase agreement is a
transaction where a fund buys a security from a seller and
the seller agrees to buy that same security back at an agreed
upon date and price. The adviser will only enter into
repurchase agreements with those sellers that it deems
creditworthy.
Investments in the fund will generally be limited to securities in the two
highest short-term rating categories with at least 95% of the fund's total
assets invested in securities in the highest rating category. Securities in the
highest rating category carry the smallest degree of investment risk.
The fund may invest more than 25% of its assets in the domestic banking
industry.
The short-term nature of money market instruments and the fund's strategies may
result in a higher turnover rate as compared to other types of mutual funds.
High portfolio turnover rates may result in higher costs to the fund, may
negatively affect performance and could increase the amount of capital gain
distributions, resulting in greater tax liability to you.
RISKS RELATED TO INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
GENERAL
If the adviser misjudges the return potential of fund investments, the fund's
returns may be lower than prevailing returns, and the fund's income available
for distribution to shareholders may be less. Similarly, if the adviser
misjudges the ability of the issuer of a portfolio security to make scheduled
interest or other income payments to the fund, the fund's income available for
distribution to shareholders may decrease. Neither the fund nor the adviser can
assure you that a particular level of income will consistently be achieved.
The adviser intends to select investments that optimize the fund's yield while
preserving capital and maintaining liquidity. Because market conditions and
interest rates determine portfolio
42 Phoenix-Goodwin Money Market Fund
<PAGE>
security yields, neither the fund nor the adviser can assure you that the fund's
yield will remain constant or that a particular level of income will be
achieved.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
INVESTMENTS NOT GUARANTEED
Unlike cash held in a bank, investments in the fund are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
NET ASSET VALUE LESS THAN $1.00
If the net asset value drops below $1.00 per share, you could lose money.
CREDIT RATING DECREASE
A security's short-term investment rating may decline, increasing the chances
the issuer may not be able to make principal and interest payments on time. This
may reduce the fund's stream of income and decrease the fund's yield.
INTEREST RATE RISK
Generally, when interest rates rise, the value of debt securities falls.
BANKING INDUSTRY CONCENTRATION
Because the fund may concentrate more than 25% of fund assets in the banking
industry, conditions which negatively affect the banking industry generally will
have a greater impact on this fund as compared to funds that do not so
concentrate their assets.
REPURCHASE AGREEMENTS
If a seller of a repurchase agreement defaults and does not repurchase the
underlying securities, the fund may incur a loss if the value of the underlying
securities declines. Disposition costs may be incurred in connection with
liquidating the underlying securities. If the seller enters into bankruptcy, the
fund may never receive the purchase price or it may be delayed or limited.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
Phoenix-Goodwin Money Market Fund 43
<PAGE>
Management of the Fund
- - --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.40% 0.35% 0.30%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$786,202. The ratio of management fees to average net assets for the fiscal year
ended October 31, 1998 was 0.40%.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. However, if the problem is not fully addressed,
the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
44 Phoenix-Goodwin Money Market Fund
<PAGE>
PHOENIX-OAKHURST BALANCED FUND
INVESTMENT RISK AND RETURN SUMMARY
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Oakhurst Balanced Fund has investment objectives of reasonable income,
long-term capital growth and conservation of capital. There is no guarantee that
the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The adviser will use four criteria to select investments for the fund:
risk, income, capital enhancement and protection of capital value. The
adviser will select securities believed to have potential for the
production of current income, with emphasis on securities that also
have the potential for capital growth as this is a balanced fund that
has as its objectives both income and growth. Fixed income securities
are selected using a multi-sector approach. The adviser may adjust the
mix of investments in each sector based upon financial market and
economic conditions. Holdings are shifted into sectors believed by the
adviser to be undervalued and out of sectors determined by the adviser
to be overvalued. Fixed income securities may be of any maturity.
[arrow] Under normal circumstances, the fund will invest at least 65% of its
total assets in common stocks of companies of any size and fixed income
securities.
[arrow] The fund may invest up to 35% of its net assets in high yield, high
risk fixed income securities (commonly referred to as "junk bonds").
[arrow] At least 25% of fund assets will be invested in fixed income securities
that are rated within the four highest rating categories.
[arrow] The fund may invest 25% of its total assets in foreign securities,
including emerging market securities and foreign government securities.
[arrow] The fund may also invest in mortgage- and asset-backed securities.
PRINCIPAL RISKS
If you invest in this fund you risk that you may lose your investment.
The value of the fund's investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decrease, you will lose money.
Conditions affecting the overall economy, or specific industries or companies in
which the fund invests can be worse than expected. As a result, the value of
your shares may decrease. If the adviser misjudges the return potential of fixed
income securities, or the ability of issuers to make scheduled principal and
interest
Phoenix-Oakhurst Balanced Fund 45
<PAGE>
payments, the fund's returns may be lower than prevailing returns, and
the fund's income available for distribution may be less than other funds.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved. The value of fund investments is inversely
related to interest rate changes. If interest rates rise, generally the value of
investments will fall.
Junk bonds present a greater risk that the issuer will not be able to make
interest or principal payments on time. If this happens, the fund would lose
income and could expect a decline in the market value of the securities.
Likewise, if interest rates rise, generally the value of junk bonds will
decline.
Political and economic uncertainty in foreign countries including "emerging
market" countries (countries with markets that are not fully developed) as well
as less public information about investments may negatively impact the fund's
portfolio. Some investments may be made in currencies other than U.S. dollars
that will fluctuate in value as a result of changes in the currency exchange
rate. Foreign markets and currencies may not perform as well as U.S. markets.
Emerging market countries and companies doing business in emerging markets may
not have the same range of opportunities as countries and their companies in
developed nations. They may also have more obstacles to financial success.
Unrated securities may not have as broad a market as rated, investment grade
securities making them more difficult to sell. This could cause the security to
lose value.
Smaller companies may be affected to a greater extent than larger companies by
changes in general economic conditions and conditions in particular industries.
Smaller companies may also be relatively new and not have the same operating
history and "track record" as larger companies. This could make future
performance of smaller companies more difficult to predict.
A portion of the cash flow from mortgage-backed and asset-backed securities may
be from early payoff of some of the underlying loans. In the event of very high
prepayments, the fund may be required to invest the proceeds at a lower interest
rate, causing the fund to earn less than if the prepayments had not occurred. In
addition, if interest rates rise the value of securities will fall.
46 Phoenix-Oakhurst Balanced Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Oakhurst Balanced Fund. The bar chart shows changes in the fund's
Class A Shares performance from year to year over a 10-year period.(1) The table
below shows how the fund's average annual returns for one, five and ten years
compare to those of a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.
BALANCED FUND
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1989 24.93
1990 7.31
1991 25.94
1992 6.74
1993 6.41
1994 -4.55
1995 23.39
1996 8.58
1997 18.33
1998 18.52
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 13.52% (quarter ending
December 31, 1998) and the lowest return for a quarter was (5.53)% (quarter
ending September 30, 1998). Year-to-date performance (through September 30,
1999) was 1.09%.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares 12.87% 11.30% 12.60%
- - -----------------------------------------------------------------------------------------------------------------
Class B Shares 13.81% N/A N/A
- - -----------------------------------------------------------------------------------------------------------------
Balanced Benchmark(2) 19.67% 16.29% 14.46%
- - -----------------------------------------------------------------------------------------------------------------
S&P 500 Consumer Stock Price Index(3) 28.76% 24.15% 19.22%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares
and a full redemption in the fund's Class B Shares.
(2) 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 U.S. Treasury bill return. The index's performance does not
reflect sales charges.
(3) The S&P 500 Index is a measure of stock market total return performance. The
S&P 500's performance does not reflect sales charges.
Phoenix-Oakhurst Balanced Fund 47
<PAGE>
FUND EXPENSES
- - --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.53% 0.53%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.19% 0.19%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.97% 1.72%
==== ====
</TABLE>
- - ----------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
48 Phoenix-Oakhurst Balanced Fund
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $569 $769 $986 $1,608
- - -----------------------------------------------------------------------------------------------------------------
Class B $575 $742 $933 $1,831
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $175 $542 $933 $1,831
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has investment objectives of reasonable income, long-term capital
growth and conservation of capital. There is no guarantee that the fund will
achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in a portfolio of common stocks and fixed income securities.
Under normal circumstances the fund intends to invest at least 65% of its total
assets in these securities. At least 25% of assets will be invested in fixed
income securities that are rated within the four highest rating categories. The
fund may invest in foreign and domestic companies of all sizes. Fixed income
securities in which the fund may invest include, U.S. and foreign government
securities, corporate bonds, municipals, and mortgage- and asset-backed
securities. Credit ratings for fixed income securities are established by
nationally recognized statistical rating organizations. Please see the Statement
of Additional Information for a detailed list of rating categories.
The adviser will use four criteria to select investments for the fund: risk,
income, capital enhancement, and protection of capital value. The adviser will
select securities believed to have potential for the production of current
income, with emphasis on securities that also have the potential for capital
growth as this is a balanced fund that has as its objectives both income and
growth. Fixed income securities are selected using a multi-sector approach.
Holdings are shifted into sectors (areas of the bond market) believed by the
adviser to be undervalued and out of sectors determined by the adviser to be
overvalued. The amount of fund assets which may be invested in common stocks and
fixed income securities is not fixed. The adviser may adjust the mix of
investments based upon financial market and economic conditions.
Phoenix-Oakhurst Balanced Fund 49
<PAGE>
The adviser's portfolio selection method may result in a higher portfolio
turnover rate. High portfolio turnover rates may increase costs to the fund, may
negatively affect fund performance and may increase capital gains distributions,
resulting in greater tax liability to you.
Up to 35% of fund assets may be invested in "junk bonds." The actual percentage
of junk bonds held in the portfolio will be determined by the adviser. If, in
the advisor's opinion, market conditions warrant, the fund may increase its
holdings of junk bonds subject to the 35% limit. The price of junk bonds will
generally decline when interest rates rise, and increase when interest rates
fall.
The fund may invest up to 25% of its net assets in securities of foreign
(non-U.S.) issuers. The fund may invest in a broad range of foreign securities
including equity, debt and convertible securities and foreign government
securities. Issuers may be in established market countries and emerging market
countries.
The fund may also invest in convertible securities. A convertible security is a
bond, debenture, note, preferred stock or other security that may be converted
into or exchanged for a prescribed amount of common stock of the issuer at
predetermined time(s), price(s) or price formula. Convertible securities have
several unique investment characteristics such as:
[bullet] Higher yields than common stocks but lower yields than
comparable non-convertible securities;
[bullet] Typically less fluctuation in value than the "underlying"
common stock, that is, the common stock that the investor
receives if he converts;
[bullet] The potential for capital appreciation if the market price of
the underlying common stock increases.
Temporary Defensive Strategy. If the adviser believes that market conditions are
not favorable to the fund's principal strategies, the fund may hold on to its
cash or invest without limit in cash equivalents, such as U.S. government
securities and high grade commercial paper. When this happens, the fund may not
achieve its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
RISKS RELATED TO INVESTMENT STRATEGIES
- - --------------------------------------------------------------------------------
GENERAL
The value of your shares is based on the market value of the fund's investments.
However, the value of the fund's investments that support your share value can
decrease as well as increase. If between the time you purchase shares and the
time you sell shares the value of the fund's investments decreases, you will
lose money. The value of the fund's
50 Phoenix-Oakhurst Balanced Fund
<PAGE>
investments can decrease for a number of reasons. For example, changing economic
conditions may cause a decline in the value of many or most investments.
Particular industries can face poor market conditions for their products or
services so that companies engaged in those businesses do not perform as well as
companies in other industries. Interest rate changes may improve prospects for
certain types of businesses and they may worsen prospects for others. Share
values can also decline if the specific companies selected for fund investment
fail to perform as the adviser expects, regardless of general economic trends,
industry trends, interest rates and other economic factors.
In the case of fixed income securities, the value of the security will be
directly affected by trends in interest rates and the overall condition of
credit markets. For example, in times of rising interest rates, the value of
these types of securities tends to decrease. When interest rates fall, the value
of these securities tends to rise. Income distribution will also affect the
fund's return. If the adviser misjudges the ability of the issuer of a portfolio
security to make scheduled interest or other income payments to the fund, the
fund's income available for distribution to shareholders may decrease.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
HIGH RISK-HIGH YIELD SECURITIES
Although high risk, high yield securities provide greater income and opportunity
for capital appreciation than investments in higher grade securities, they also
typically entail greater price volatility and principal and interest risk. The
value of high risk, high yield securities is inversely related to interest rate
changes. If interest rates rise, generally the value of investments will fall.
There is also a greater risk that an issuer will not be able to make principal
and interest payments on time. Analysis of the creditworthiness of issuers of
below investment grade securities may be more complex than for higher grade
securities, making it more difficult for the adviser to accurately predict risk.
FOREIGN INVESTING
Investing in the securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include:
[bullet] differences in accounting, auditing and financial reporting
standards,
[bullet] generally higher commission rates on foreign portfolio
transactions,
[bullet] differences and inefficiencies in transaction settlement
systems,
[bullet] the possibility of expropriation or confiscatory taxation,
Phoenix-Oakhurst Balanced Fund 51
<PAGE>
[bullet] adverse changes in investment or exchange control regulations,
[bullet] political instability, and
[bullet] potential restrictions on the flow of international capital.
Political and economic uncertainty as well as less public information about
investments may negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the fund.
Many of the foreign securities held by the fund will not be registered with, nor
will the issuers of those securities be subject to the reporting requirements
of, the U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
FOREIGN CURRENCY
Changes in foreign exchange rates will affect the value of those securities
denominated or quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine exchange rates and
these forces are in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can affect the fund's
net asset value (share price) and dividends either positively or negatively
depending upon whether foreign currencies are appreciating or depreciating in
value relative to the U.S. dollar. Exchange rates fluctuate over both the long
and short terms.
On January 1, 1999, eleven European countries began converting from their
sovereign currency to the European Union common currency called the "Euro." This
conversion may expose the fund to certain risks, including the reliability and
timely reporting of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect specific securities
in the fund's portfolio:
[bullet] Known trends or uncertainties related to the Euro conversion
that an issuer reasonably expects will have a material impact
on revenues, expenses or income from its operations;
[bullet] Competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
52 Phoenix-Oakhurst Balanced Fund
<PAGE>
[bullet] Issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
[bullet] Currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
[bullet] Potential tax consequences.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual companies
in developing countries may impose limitations on foreign ownership to prevent,
among other concerns, violation of foreign investment limitations.
The economies of developing countries generally are heavily dependent upon
international trade. And accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.
SMALL MARKET CAPITALIZATION INVESTING
Companies with small capitalization are often companies in industries that have
recently emerged due to cultural, economic, regulatory or technological
developments. Such developments can have a significant positive or negative
effect on small capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental prospects, investment
returns from smaller capitalization companies can be highly volatile. Smaller
companies may find their ability to raise capital impaired by their size or lack
of operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
UNRATED SECURITIES
Unrated securities may not be lower in quality than rated securities, but due to
their perceived risk, they may not have as broad a market as rated securities.
Analysis of unrated securities is more complex than for rated securities, making
it more difficult for the adviser to accurately predict risk.
Phoenix-Oakhurst Balanced Fund 53
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
MANAGEMENT OF THE FUND
- - --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
1st billion $1+ billion through $2 billion $2+ billion
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.55% 0.50% 0.45%
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$8,930,936. The ratio of management fees to average net assets for the fiscal
year ended October 31, 1998 was 0.53%.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of equity
professionals and a team of fixed-income professionals.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into
54 Phoenix-Oakhurst Balanced Fund
<PAGE>
Year 2000 compliance. Based upon its assessments, Phoenix determined that it
would be required to modify or replace portions of its software so that its
computer systems would properly utilize dates beyond December 31, 1999. Phoenix
management believes that the majority of these systems are already Year 2000
compliant. Phoenix believes that with modifications to existing software and
conversions to new software, the Year 2000 issue will be mitigated. However, if
the problem is not fully addressed, the fund may be negatively impacted.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
Phoenix-Oakhurst Balanced Fund 55
<PAGE>
PRICING OF FUND SHARES
- - --------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
The fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, the fund calculates net asset value by:
[arrow] adding the values of all securities and other assets of the fund,
[arrow] subtracting liabilities, and
[arrow] dividing by the total number of outstanding shares of the fund.
Asset Value: The fund's investments are valued at market value. If market
quotations are not available, the fund determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities that are deducted for the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class's net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class's net asset value per
share.
The net asset value per share of each class of the fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the NYSE is closed for trading.
Trading of securities held by the fund in foreign markets may negatively or
positively impact the value of such securities on days when the fund neither
trades securities nor calculates its net asset values (i.e., weekends and
certain holidays).
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of fund distributions will be in
56 Phoenix Series Fund
<PAGE>
full and fractional shares that are purchased at the closing net asset value on
the next business day on which the fund's net asset value is calculated
following the dividend record date.
SALES CHARGES
- - --------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
The fund presently offers two classes of shares of each fund, and one additional
class of shares of the Core Bond Fund, the High Yield Fund and the Money Market
Fund. Each class of shares has different sales and distribution charges (see
"Fund Expenses" previously in this prospectus). The fund has adopted
distribution and service plans allowed under Rule 12b-1 of the Investment
Company Act of 1940 that authorize the fund to pay distribution and service fees
for the sale of its shares and for services provided to shareholders. The
distribution and service fees represent an asset-based sales charge that for a
long term shareholder, may be higher than the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc. ("NASD").
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 4.75% of the offering price (4.99% of the amount
invested). You will not pay a sales charge on purchases of Class A Shares of the
Money Market Fund. The sales charge may be reduced or waived under certain
conditions. Class A Shares are not subject to any charges by the fund when
redeemed. Class A Shares have lower distribution and service fees (0.25%) and
pay higher dividends than any other class.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first 5
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and C Shares"
below. This charge declines to 0% over a period of 5 years and may be waived
under certain conditions. Class B shares have higher distribution and
Phoenix Series Fund 57
<PAGE>
service fees (1.00% (0.75% for the Money Market Fund)) and pay lower dividends
than Class A Shares. Class B Shares automatically convert to Class A Shares
eight years after purchase. Purchase of Class B Shares may be inappropriate for
any investor who may qualify for reduced sales charges of Class A Shares and
anyone who is over 85 years of age. The underwriter may decline purchases in
such situations.
CLASS C SHARES. (Core Bond Fund, High Yield Fund and Money Market Fund only) If
you purchase Class C Shares, you will not pay a sales charge at the time of
purchase. If you sell your Class C Shares within the first year after they are
purchased, you will pay a sales charge of 1%. See "Deferred Sales Charge
Alternative--Class B and C Shares" below. Class C Shares have the same
distribution and service fees (1.00%) and pay comparable dividends as Class B
Shares. Class C Shares do not convert to any other class of shares of the fund.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Sales Charges: Combination Purchase Privilege" in the Statement
of Additional Information). Shares purchased based on the automatic reinvestment
of income dividends or capital gains distributions are not subject to any sales
charges. The sales charge is divided between your investment dealer and the
fund's underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
SALES CHARGE AS
A PERCENTAGE OF
-----------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
- - ------------------------------------------------------------------------------
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 3.00 3.09
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND C SHARES
Class B and C Shares are purchased without an initial sales charge; however,
shares sold within a specified time period are subject to a declining contingent
deferred sales charge ("CDSC") at the rates listed below. The sales charge will
be multiplied by the then current market value or the initial cost of the shares
being redeemed, whichever is less. No sales charge will be imposed on increases
in net asset value or on shares purchased through the reinvestment of income
dividends or capital gains distributions. To minimize the sales charge, shares
not subject to any charge will be redeemed first, followed by shares held the
longest time. To calculate the amount of shares owned and time period held, all
Class B Shares purchased in any month are
58 Phoenix Series Fund
<PAGE>
considered purchased on the last day of the preceding month, and all Class C
Shares are considered purchased on the trade date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
<TABLE>
<CAPTION>
YEAR 1 2 3 4 5 6+
- - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CDSC 5% 4% 3% 2% 2% 0%
</TABLE>
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES (CORE BOND FUND, HIGH
YIELD FUND AND MONEY MARKET FUND ONLY)
YEAR 1 2+
- - ----------------------------------------
CDSC 1% 0%
YOUR ACCOUNT
- - --------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
[arrow] $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the Investo-Matic
program (see below for more information on the Investo-Matic program).
[arrow] There is no initial dollar requirement for defined contribution plans,
profit-sharing plans, or employee benefit plans. There is also no
minimum for reinvesting dividends and capital gains into another
account.
[arrow] $500 for all other accounts.
Minimum ADDITIONAL investments:
[arrow] $25 for any account.
[arrow] There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
Phoenix Series Fund 59
<PAGE>
STEP 2.
Your second choice will be what class of shares to buy. The fund offers three
classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
[bullet] Receive both dividends and capital gain distributions in
additional shares;
[bullet] Receive dividends in additional shares and capital gains
distribution in cash;
[bullet] Receive dividends in cash and capital gain distributions in
additional shares; or
[bullet] Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
TO OPEN AN ACCOUNT
- - -----------------------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
- - -----------------------------------------------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
- - -----------------------------------------------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
- - -----------------------------------------------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
- - -----------------------------------------------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
- - -----------------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
60 Phoenix Series Fund
<PAGE>
HOW TO SELL SHARES
- - --------------------------------------------------------------------------------
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. In the case of a Class B or C Share redemption, you will be
subject to the applicable deferred sales charge, if any, for such shares.
Subject to certain restrictions, shares may be redeemed by telephone or in
writing. In addition, shares may be sold through securities dealers, brokers or
agents who may charge customary commissions or fees for their services. The fund
does not charge any redemption fees. Payment for shares redeemed is made within
seven days; however, redemption proceeds will not be disbursed until each check
used for purchases of shares has been cleared for payment by your bank, which
may take up to 15 days after receipt of the check.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
TO SELL SHARES
- - -----------------------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
- - -----------------------------------------------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301. Be sure to include the registered owner's name, fund and
account number, number of shares or dollar value you wish to sell.
- - -----------------------------------------------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix
Funds, 66 Brooks Drive, Braintree, MA 02184. Be sure to include the
registered owner's name, fund and account number.
- - -----------------------------------------------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
- - -----------------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
- - -----------------------------------------------------------------------------------------------------------------
By Check (High Yield Fund, Money If you selected the checkwriting feature, you may write checks for amounts
Market Fund and of $500 or more. Checks may not be used to close an account.
U.S. Government Securities Fund
only.)
- - -----------------------------------------------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
- - --------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the
Phoenix Series Fund 61
<PAGE>
fund's net assets. Additional documentation will be required for redemptions by
organizations, fiduciaries, or retirement plans, or if redemption is requested
by anyone but the shareholder(s) of record. Transfers between broker-dealer
"street" accounts are governed by the accepting broker-dealer. Questions
regarding this type of transfer should be directed to your financial advisor.
Redemption requests will not be honored until all required documents in proper
form have been received. To avoid delay in redemption or transfer, shareholders
having questions about specific requirements should contact the fund's Transfer
Agent at (800) 243-1574.
REDEMPTIONS BY MAIL
[arrow] If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instructions if all of these apply:
[bullet] The proceeds do not exceed $50,000.
[bullet] The proceeds are payable to the registered owner at the
address on record.
Send a clear letter of instructions with a signature guarantee when any
of these apply:
[bullet] You are selling more than $50,000 worth of shares.
[bullet] The name or address on the account has changed within the
last 60 days.
[bullet] You want the proceeds to go to a different name or address
than on the account.
[arrow] If you are selling shares held in a corporate or fiduciary account,
please contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be by an eligible
guarantor institution as defined by the fund's Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
62 Phoenix Series Fund
<PAGE>
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or be temporarily suspended.
ACCOUNT POLICIES
- - --------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, B or C shares, you can purchase Class
A Shares of any fund at net asset value, with no sales charge, by reinvesting
all or part of your proceeds, but not more. Send your written request to State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call us at (800)
243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B shareholders who have had the
contingent deferred sales charge waived because they are in the Systematic
Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should read the prospectus carefully before deciding to make an exchange.
You can obtain a prospectus from your financial advisor or by calling us at
(800) 243-4361 or accessing our Web site at www.phoenixinvestments.com.
[bullet] You may exchange shares for another fund in the same class of
shares; e.g., Class A for Class A.
[bullet] Exchanges may be made by phone ((800) 243-1574) or by mail
(State Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
[bullet] The amount of the exchange must be equal to or greater than
the minimum initial investment required.
[bullet] The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
[bullet] Because excessive trading can hurt fund performance and harm
other shareholders, the fund reserves the right to temporarily
or permanently end exchange privileges or reject an order from
anyone who appears to be attempting to time the market,
Phoenix Series Fund 63
<PAGE>
including investors who request more than one exchange in any
30-day period. The fund's underwriter has entered into
agreements with certain timing firms permitting them to
exchange by telephone. These privileges are limited, and the
fund distributor has the right to reject or suspend them.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
INVESTOR SERVICES
- - --------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
64 Phoenix Series Fund
<PAGE>
TAX STATUS OF DISTRIBUTIONS
- - --------------------------------------------------------------------------------
The fund plans to make distributions from net investment income at intervals
stated on the table below and to distribute net realized capital gains, if any,
at least annually.
- - --------------------------------------------------------------------------------
FUND DIVIDEND PAID
- - --------------------------------------------------------------------------------
Aggressive Growth Fund Semiannually
- - --------------------------------------------------------------------------------
Balanced Fund Quarterly
- - --------------------------------------------------------------------------------
Capital Growth Fund Semiannually
- - --------------------------------------------------------------------------------
Core Bond Fund Monthly
- - --------------------------------------------------------------------------------
High Yield Fund Monthly
- - --------------------------------------------------------------------------------
Money Market Fund Daily
- - --------------------------------------------------------------------------------
Distributions of short-term capital gains and net investment income are taxable
to shareholders as ordinary income. Long-term capital gains, if any, distributed
to shareholders and which are designated by the fund as capital gains
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix Series Fund 65
<PAGE>
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
These tables are intended to help you understand the funds' financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited, except as noted, by PricewaterhouseCoopers LLP, independent
accountants. Their report, together with the funds' financial statements, are
included in the funds' most recent Annual Report, which is available upon
request.
Class C Shares of the Core Bond Fund and Money Market Fund are a new class of
shares for those funds and as such have no financial performance to report as of
the effective date of this prospectus.
PHOENIX-DUFF & PHELPS CORE BOND FUND
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.83 $9.66 $9.47 $9.60 $8.88 $9.87
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26(4) 0.59 0.55 0.52 0.55 0.64
Net realized and unrealized gain (loss) (0.33) 0.18 0.17 (0.15) 0.72 (1.02)
----- ---- ---- ----- ---- -----
TOTAL FROM INVESTMENT OPERATIONS (0.07) 0.77 0.72 0.37 1.27 (0.38)
----- ---- ---- ---- ---- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.31) (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 (0.31) (0.60) (0.53) (0.50) (0.55) (0.61)
----- ----- ----- ----- ----- -----
Change in net asset value (0.38) 0.17 0.19 (0.13) 0.72 (0.99)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $9.45 $9.83 $9.66 $9.47 $9.60 $8.88
===== ===== ===== ===== ===== =====
Total return(1) (0.71)%(3) 8.16% 7.85% 4.05% 14.81% (3.98)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $166,173 $180,628 $182,250 $208,552 $235,879 $262,157
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.03%(2) 1.00% 0.98% 1.03% 0.99% 0.98%
Net investment income 5.44%(2) 5.46% 5.63% 5.55% 6.01% 5.92%
Portfolio turnover 81%(3) 290% 377% 379% 178% 101%
</TABLE>
- - ----------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4)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.
66 Phoenix Series Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-DUFF & PHELPS CORE BOND FUND
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 2/24/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ----- ----- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.77 $9.60 $9.45 $9.58 $8.86 $9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.22(5) 0.52 0.47 0.44 0.48 0.39
Net realized and unrealized gain (loss) (0.33) 0.18 0.17 (0.14) 0.72 (0.75)
----- ---- ---- ----- ---- -----
TOTAL FROM INVESTMENT OPERATIONS (0.11) 0.70 0.64 0.30 1.20 (0.36)
----- ---- ---- ---- ---- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.28) (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 (0.28) (0.53) (0.49) (0.43) (0.48) (0.39)
----- ----- ----- ----- ----- -----
Change in net asset value (0.39) 0.17 0.15 (0.13) 0.72 (0.75)
----- ---- ---- ----- ---- -----
NET ASSET VALUE, END OF PERIOD $9.38 $9.77 $9.60 $9.45 $9.58 $8.86
===== ===== ===== ===== ===== =====
Total return(1) (1.12)(3) 7.48% 6.94% 3.39% 13.82% (3.83)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $12,644 $12,902 $5,321 $4,875 $3,655 $1,238
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.78%(2) 1.75% 1.71% 1.78% 1.73% 2.00%(2)
Net investment income 4.69%(2) 4.74% 4.91% 4.79% 5.23% 4.49%(2)
Portfolio turnover 81%(3) 290% 377% 379% 178% 101%(3)
</TABLE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------ ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.72 $17.20 $16.84 $16.51 $13.33 $14.56
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.04)(5) (0.03) (0.08)(4) (0.13)(4) 0.06(4) 0.27
Net realized and unrealized gain (loss) 6.81 0.04 2.95 2.64 4.21 (0.21)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 6.77 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 6.77 (3.48) 0.36 0.33 3.18 (1.23)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $20.49 $13.72 $17.20 $16.84 $16.51 $13.33
====== ====== ====== ====== ====== ======
Total return(1) 49.34%(3) 0.38% 19.67% 17.43% 35.14% 0.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $318,251 $222,149 $246,002 $233,488 $180,288 $140,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.20%(2)(6) 1.21 1.20% 1.20% 1.29% 1.26%
Net investment income (loss) (0.48)%(2) (0.18)% (0.53)% (0.81)% 0.43% 1.97%
Portfolio turnover 82%(3) 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.
(6) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratios would be 1.21% and 1.96%
for Class A and Class B, respectively.
Phoenix Series Fund 67
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 7/21/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.18 $16.76 $16.57 $16.38 $13.31 $13.09
INCOME FROM INVESTMENT OPERATIONS(5)
(0.11)(4) (0.12) (0.20)(4) (0.25)(4) 0.12(4) 0.02
Net realized and unrealized gain (loss) 6.54 0.03 2.90 2.60 4.26 0.20
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 6.43 (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 6.43 (3.58) 0.19 0.19 3.07 0.22
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.61 $13.18 $16.76 $16.57 $16.38 $13.31
====== ====== ====== ====== ====== ======
Total return(1) 48.79%(3) (0.28)% 18.70% 16.52% 34.15% 1.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $20,880 $14,157 $13,611 $10,466 $2,393 $330
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.95%(2)(6) 1.96% 1.96% 1.95% 2.04% 1.81%(2)
Net investment income (loss) (1.22)(2) (0.93)% (1.28)% (1.57)% (0.83)% 1.45%(2)
Portfolio turnover 82%(3) 176% 518% 401% 331% 306%(3)
</TABLE>
PHOENIX-ENGEMANN CAPITAL GROWTH FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.95 $27.83 $26.87 $24.92 $21.24 $21.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.03) (0.06) 0.14(4) 0.20(4) 0.26 0.26
Net realized and unrealized gain (loss) 5.05(5) 2.73(4) 5.62 3.63 4.53 0.17
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 5.02 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 (2.39) (5.55) (4.59) (1.63) (0.81) (0.48)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (2.39) (5.55) (4.80) (1.88) (1.11) (0.72)
------ ------ ------ ------ ------ ------
Change in net asset value 2.63 (2.88) 0.96 1.95 3.68 (0.29)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $27.58 $24.95 $27.83 $26.87 $24.92 $21.24
====== ====== ====== ====== ====== ======
Total return(1) 20.86%(3) 12.26% 24.81% 16.34% 23.91% 2.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,762,808 $2,434,217 $2,518,289 $2,347,471 $2,300,251 $2,140,458
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.07%(2)(6) 1.08% 1.10% 1.17% 1.20% 1.19%
Net investment income (loss) (0.20)%(2) (0.22)% 0.53% 0.80% 0.92% 1.22%
Portfolio turnover 60%(3) 110% 196% 116% 109% 118%
</TABLE>
- - ----------------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(6) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
68 Phoenix Series Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-ENGEMANN CAPITAL GROWTH FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $24.40 $27.51 $26.63 $24.74 $21.19 $20.48
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.13)(4) (0.24)(4) (0.06)(4) --(4) --(4) 0.01
Net realized and unrealized gain (loss) 4.93 2.68 5.57 3.61 4.60 0.70
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 4.80 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 (2.39) (5.55) (4.59) (1.63) (0.81) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (2.39) (5.55) (4.63) (1.72) (1.05) --
------ ------ ------ ------ ------ ------
Change in net asset value 2.41 (3.11) 0.88 1.89 3.55 0.71
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $26.81 $24.40 $27.51 $26.63 $24.74 $21.19
====== ====== ====== ====== ====== ======
Total return(1) 20.40%(3) 11.41% 23.89% 15.48% 23.02% 3.47%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $94,974 $76,060 $68,022 $45,326 $20,111 $2,966
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.82%(2)(6) 1.83% 1.85% 1.93% 1.97% 1.87%(2)
Net investment income (loss) (0.95)%(2) (0.97)% (0.25)% 0.01% 0.01% 0.32%(2)
Portfolio turnover 60%(3) 110% 196% 116% 109% 118%(3)
</TABLE>
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------ ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.55 $9.09 $8.63 $8.17 $8.11 $9.11
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.37(5) 0.83 0.80 0.78 0.80 0.76
Net realized and unrealized gain (loss) 0.49 (1.56) 0.46 0.46 0.04 (0.97)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.86 (0.73) 1.26 1.24 0.84 (0.21)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.41) (0.81) (0.80) (0.78) (0.78) (0.76)
Tax return of capital -- -- -- -- -- (0.03)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.41) (0.81) (0.80) (0.78) (0.78) (0.79)
----- ----- ----- ----- ----- -----
Change in net asset value 0.45 (1.54) 0.46 0.46 0.06 (1.00)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $8.00 $7.55 $9.09 $8.63 $8.17 $8.11
===== ===== ===== ===== ===== =====
Total return(1) 11.60%(3) (8.97)% 15.03% 15.95% 11.19% (2.57)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $476,173 $427,659 $532,906 $501,265 $507,855 $531,773
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.14%(2)(6) 1.12% 1.11% 1.17% 1.21% 1.19%
Net investment income 9.55%(2) 9.13% 8.76% 9.21% 10.01% 9.01%
Portfolio turnover 44%(3) 103% 167% 162% 147% 222%
</TABLE>
- - ----------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(6) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
Phoenix Series Fund 69
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 2/16/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.52 $9.07 $8.63 $8.19 $8.13 $9.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.34(5) 0.76 0.73 0.71 0.72 0.54
Net realized and unrealized gain (loss) 0.49 (1.55) 0.46 0.45 0.07 (1.25)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.83 (0.79) 1.19 1.16 0.79 (0.71)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.39) (0.76) (0.75) (0.72) (0.73) (0.52)
Tax return of capital -- -- -- -- -- (0.02)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.39) (0.76) (0.75) (0.72) (0.73) (0.54)
----- ----- ----- ----- ----- -----
Change in net asset value 0.44 (1.55) 0.44 0.44 0.06 (1.25)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $7.96 $7.52 $9.07 $8.63 $8.19 $8.13
===== ===== ===== ===== ===== =====
Total return(1) 11.21%(3) (9.61)% 14.18% 14.88% 10.44% (7.67)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $68,243 $61,026 $52,184 $25,595 $12,331 $6,056
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(2)(4) 1.88% 1.86% 1.92% 1.97% 1.80%(2)
Net investment income (loss) 8.78%(2) 8.46% 8.00% 8.47% 9.18% 9.12%(2)
Portfolio turnover 44%(3) 103% 167% 162% 147% 222%
</TABLE>
- - ----------------
PHOENIX-GOODWIN HIGH YIELD FUND
CLASS C
---------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 2/27/98 TO
(UNAUDITED) 10/31/98
----------- ------------
Net asset value, beginning of period $7.54 $9.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.35(5) 0.50
Net realized and unrealized gain (loss) 0.48 (1.76)
----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.83 (1.26)
----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.39) (0.51)
Tax return of capital -- --
----- -----
TOTAL DISTRIBUTIONS (0.39) (0.51)
----- -----
Change in net asset value 0.44 (1.77)
----- -----
NET ASSET VALUE, END OF PERIOD $7.98 $7.54
===== =====
Total return(1) 11.20%(3) (14.09)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,918 $1,669
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(2)(4) 1.88%(2)
Net investment income (loss) 8.69%(2) 8.94%(2)
Portfolio turnover 44%(3) 103%(3)
- - ----------------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(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.
70 Phoenix Series Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-GOODWIN MONEY MARKET FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.022 0.049 0.048 0.047 0.053 0.032
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.022 0.049 0.048 0.047 0.053 0.032
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.022) (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 $1.00
===== ===== ===== ===== ===== =====
Total return 2.20%(2) 5.00% 4.76% 4.67% 5.32% 3.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $193,944 $195,292 $188,695 $192,859 $193,534 $196,566
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.74%(1)(3) 0.73% 0.79% 0.84% 0.71% 0.85%
Net investment income 4.41%(1) 4.90% 4.76% 4.68% 5.31% 3.19%
</TABLE>
PHOENIX-GOODWIN MONEY MARKET FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.018 0.041 0.040 0.039 0.046 0.007
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.018 0.041 0.040 0.039 0.046 0.007
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.018) (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 $1.00
===== ===== ===== ===== ===== =====
Total return 1.82%(2) 4.22% 4.02% 3.93% 4.63% 0.70%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $15,870 $19,978 $15,013 $10,223 $8,506 $2,086
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.49%(1)(3) 1.48% 1.55% 1.59% 1.44% 1.60%(1)
Net investment income 3.61%(1) 4.15% 4.02% 3.92% 4.62% 3.46%(1)
</TABLE>
- - ----------
(1) Annualized.
(2) Not Annualized.
(3) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
Phoenix Series Fund 71
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- - --------------------------------------------------------------------------------
PHOENIX-OAKHURST BALANCED FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/99 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996 1995 1994
------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.29 $18.07 $17.56 $17.04 $15.23 $16.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.18(4) 0.42 0.48 0.48 0.52 0.48
Net realized and unrealized gain (loss) 1.95 0.90 2.38 1.46 1.80 (1.01)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.13 1.32 2.86 1.94 2.32 (0.53)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment (income) (0.21) (0.40) (0.48) (0.49) (0.51) (0.49)
Dividends from net realized gains (0.63) (2.70) (1.87) (0.93) -- (0.39)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.84) (3.10) (2.35) (1.42) (0.51) (0.88)
------ ------ ------ ------ ------ ------
Change in net asset value 1.29 (1.78) 0.51 0.52 1.81 (1.41)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $17.58 $16.29 $18.07 $17.56 $17.04 $15.23
====== ====== ====== ====== ====== ======
Total return(1) 13.34%(3) 8.68% 18.04% 12.03% 15.52% (3.28)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,633,385 $1,548,475 $1,702,385 $1,897,306 $2,345,440 $2,601,808
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.96%(2) 0.97% 0.98% 1.01% 1.02% 0.96%
Net investment income 2.10%(2) 2.41% 2.65% 2.74% 3.27% 3.03%
Portfolio turnover 44%(3) 138% 206% 191% 197% 159%
</TABLE>
PHOENIX-OAKHURST BALANCED FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 YEAR ENDED OCTOBER 31, 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
----------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.25 $18.04 $17.54 $17.01 $15.23 $15.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.12(4) 0.30 0.35 0.35 0.40 0.09
Net realized and unrealized gain (loss) 1.94 0.90 2.37 1.47 1.80 (0.04)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.06 1.20 2.72 1.82 2.20 0.05
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.15) (0.29) (0.35) (0.36) (0.42) (0.09)
Dividends from net realized gains (0.63) (2.70) (1.87) (0.93) -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.78) (2.99) (2.22) (1.29) (0.42) (0.09)
------ ------ ------ ------ ------ ------
Change in net asset value 1.28 (1.79) 0.50 0.53 1.78 (0.04)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $17.53 $16.25 $18.04 $17.54 $17.01 $15.23
====== ====== ====== ====== ====== ======
Total return(1) 12.92%(3) 7.91% 17.13% 11.24% 14.68% (0.34)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $37,893 $32,988 $30,216 $26,209 $16,971 $4,629
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.71%(2) 1.72% 1.73% 1.76% 1.78% 1.65%(2)
Net investment income 1.35%(2) 1.66% 1.90% 1.96% 2.46% 2.36%(2)
Portfolio turnover 44%(2) 138% 206% 191% 197% 159%(3)
</TABLE>
- - ----------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) 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.
72 Phoenix Series Fund
<PAGE>
ADDITIONAL INFORMATION
- - --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The fund has filed a Statement of Additional Information about the fund, dated
October 8, 1999 with the Securities and Exchange Commission. The Statement
contains more detailed information about the fund. It is incorporated into this
prospectus by reference and is legally part of the prospectus. You may obtain a
free copy of the Statement:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
[arrow] through its internet site (http://www.sec.gov),
[arrow] by visiting its Public Reference Room in Washington, DC or
[arrow] by writing to its Public Reference Section, Washington, DC 20549-6009
(a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330.
SHAREHOLDER REPORTS
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the fund's performance from November 1 through October
31. You may request a free copy of the fund's Annual and Semiannual Reports:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 2-14069 and 811-810 Printed on recycled paper using soybean ink
Phoenix Series Fund 73
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 393 (10/99)
<PAGE>
PHOENIX-DUFF & PHELPS CORE BOND FUND
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
PHOENIX-ENGEMANN CAPITAL GROWTH FUND
PHOENIX-GOODWIN HIGH YIELD FUND
PHOENIX-GOODWIN MONEY MARKET FUND
PHOENIX-OAKHURST BALANCED FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
October 8, 1999
This Statement of Additional Information is not the Prospectus but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Series Fund (the "Trust"), dated October 8, 1999 and should be read in
conjunction with it. The Trust's Prospectus may be obtained by calling Phoenix
Equity Planning Corporation ("Equity Planning") at (800) 243-4361, or by writing
to Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box 8301, Boston,
MA 02266-8301.
TABLE OF CONTENTS
PAGE
Investment Policies......................................................... 1
Investment Restrictions..................................................... 7
Performance Information..................................................... 9
Performance Comparisons..................................................... 10
Portfolio Turnover.......................................................... 10
Portfolio Transactions and Brokerage........................................ 11
The Investment Adviser...................................................... 12
Net Asset Value............................................................. 13
How to Buy Shares........................................................... 14
Alternative Purchase Arrangements........................................... 14
Purchases of Shares of the Money Market Fund............................. 15
Investor Account Services................................................... 17
How to Redeem Shares........................................................ 18
Tax-Sheltered Retirement Plans.............................................. 19
Dividends, Distributions And Taxes.......................................... 20
The Distributor............................................................. 21
Distribution Plans.......................................................... 23
Management of the Trust..................................................... 24
Other Information........................................................... 31
Customer Service: (800) 243-1574
Sales Information: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device TTY: (800) 243-1926
PXP427B (10/99)
<PAGE>
THE TRUST
Phoenix Series Fund (the "Trust") is a diversified open-end management
investment company that was organized under Massachusetts law in 1958 a business
trust. The trust presently comprises six series: the Phoenix-Duff & Phelps Core
Bond Fund (the "Bond Fund"), Phoenix-Engemann Aggressive Growth Fund (the
"Aggressive Growth Fund"); Phoenix-Engemann Capital Growth Fund (the "Growth
Fund"); Phoenix-Goodwin High Yield Fund (the "High Yield Fund"); Phoenix-Goodwin
Money Market Fund (the "Money Market Fund"); and Phoenix-Oakhurst Balanced Fund
(the "Balanced Fund"); each a "Fund" and, collectively, the "Funds."
INVESTMENT POLICIES
The investment objectives and policies of each Fund are described in the
Prospectus. The following information supplements the information contained in
the Prospectus.
MONEY MARKET INSTRUMENTS. Certain money market instruments used extensively
by the Money Market Fund, and to a lesser extent by the other Funds, are
described below.
REPURCHASE AGREEMENTS. Repurchase Agreements are agreements by which a Fund
purchases a security and obtains a simultaneous commitment from the seller (a
member bank of the Federal Reserve System or, to the extent permitted by the
Investment Company Act of 1940, a recognized securities dealer) that the seller
will repurchase the security at an agreed upon price and date. The resale price
is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security.
A repurchase transaction is usually accomplished either by crediting the
amount of securities purchased to the account of the custodian of the Trust
maintained in a central depository of book-entry system or by physical delivery
of the securities to the Trust's custodian in return for delivery of the
purchase price to the seller. Repurchase transactions are intended to be
short-term transactions with the seller repurchasing the securities, usually
within seven days.
Even though repurchase transactions usually do not impose market risks on the
purchasing Fund, if the seller of the repurchase agreement defaults and does not
repurchase the underlying securities, the Fund might incur a loss if the value
of the underlying securities declines, and disposition costs may be incurred in
connection with liquidating the underlying securities. In addition, if
bankruptcy proceedings are commenced regarding the seller, realization upon the
underlying securities may be delayed or limited, and a loss may be incurred if
the underlying securities decline in value.
CERTIFICATES OF DEPOSIT. Certificates of deposit are generally short-term,
interest-bearing negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
TIME DEPOSITS. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.
BANKER'S ACCEPTANCES. A bankers' acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.
COMMERCIAL PAPER. Commercial paper refers to short-term, unsecured promissory
notes issued by corporations to finance short-term credit needs. Commercial
paper is usually sold on a discount basis and has a maturity at the time of
issuance not exceeding nine months.
CORPORATE DEBT SECURITIES. Corporate debt securities with a remaining
maturity of less than one year tend to become extremely liquid and are traded as
money market securities.
U.S. GOVERNMENT OBLIGATIONS. Securities issued or guaranteed as to principal
and interest by the United States Government include a variety of Treasury
securities, which differ only in their interest rates, maturities, and times of
issuance. Treasury bills have maturities of one year or less. Treasury notes
have maturities of one to ten years, and Treasury bonds generally have
maturities of greater than ten years.
Agencies of the United States Government which issue or guarantee obligations
include, among others, Export-Import Banks of the United States, Farmers Home
Administration, Federal Housing Administration, Government National Mortgage
Association, Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Obligations of instrumentalities of the United
States Government include securities issued or guaranteed by, among others, the
Federal National Mortgage Association, Federal Home Loan Banks, Federal Home
Loan Mortgage Corporation, Federal Intermediate Credit Banks, Banks for
Cooperatives, and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Government; others are
1
<PAGE>
supported by the right of the issuer to borrow from the Treasury, while still
others are supported only by the credit of the instrumentality.
SECURITIES AND INDEX OPTIONS. All Funds, except the Money Market Fund and
Bond Fund, may write covered call options and purchase call and put options.
Options and the related risks are summarized below.
WRITING AND PURCHASING OPTIONS. The exercise price of a call option written
by a Fund may be below, equal to or above the current market value of the
underlying security or securities index at the time the option is written. Call
options written by a Fund normally will have expiration dates between three and
nine months from the date written. During the option period a Fund may be
assigned an exercise notice by the broker-dealer through which the call option
was sold, requiring the Fund to deliver the underlying security (or cash in the
case of securities index calls) against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at such
earlier time as the Fund effects a closing purchase transaction. A closing
purchase transaction cannot be effected with respect to an option once the Fund
has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/ Silver Index.
A Fund may write call options and purchase call and put options on any other
indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by a Fund, to prevent an underlying
security from being called, or to enable a Fund to write another call option
with either a different exercise price or expiration date or both. A Fund may
realize a net gain or loss from a closing purchase transaction, depending upon
whether the amount of the premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. If a call option
written by a Fund expires unexercised, a Fund will realize a gain in the amount
of the premium on the option less the commission paid.
The option activities of a Fund may increase its portfolio turnover rate and
the amount of brokerage commissions paid. A Fund will pay a commission each time
it purchases or sells a security in connection with the exercise of an option.
These commissions may be higher than those which would apply to purchases and
sales of securities directly.
LIMITATIONS ON OPTIONS. A Fund may write call options only if they are
covered and if they remain covered so long as a Fund is obligated as a writer.
If a Fund writes a call option on an individual security, a Fund will own the
underlying security at all times during the option period. A Fund will write
call options on indices only to hedge in an economically appropriate way
portfolio securities which are not otherwise hedged with options or financial
futures contracts. Call options on securities indices written by a Fund will be
"covered" by identifying the specific portfolio securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance with
clearing corporation and exchange rules. In the case of an index call option
written by a Fund, a Fund will be required to deposit qualified securities. A
"qualified security" is a security against which a Fund has not written a call
option and which has not been hedged by a Fund by the sale of a financial
futures contract. If at the close of business on any day the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts, a Fund will deposit an amount of cash
or liquid assets equal in value to the difference. In addition, when a Fund
writes a call on an index which is "in-the-money" at the time the call is
written, a Fund will segregate with its custodian bank cash or liquid assets
equal in value to the amount by which the call is "in-the-money" times the
multiplier times the number of contracts. Any amount segregated may be applied
to a Fund's obligation to segregate additional amounts in the event that the
market value of the qualified securities falls below 100% of the current index
value times the multiplier times the number of contracts.
A Fund may invest up to 2% of its total assets in exchange-traded call and
put options. A Fund may sell a call option or a put option which it has
previously purchased prior to the purchase (in the case of a call) or the sale
(in the case of a put) of the underlying security. Any such sale of a call
option or a put option would result in a net gain or loss, depending on whether
the amount received on the sale is more or less than the premium and other
transaction costs paid.
In connection with a Fund qualifying as a regulated investment company under
the Internal Revenue Code, other restrictions on a Fund's ability to enter into
option transactions may apply from time to time. See "Dividends, Distributions
and Taxes."
RISKS RELATING TO OPTIONS. During the option period, the writer of a call
option has, in return for the premium received on the option, given up the
opportunity for capital appreciation above the exercise price should the market
price of the underlying
2
<PAGE>
security increase, but has retained the risk of loss should the price of the
underlying security decline. The writer has no control over the time when it may
be required to fulfill its obligation as a writer of the option.
The risk of purchasing a call option or a put option is that a Fund may lose
the premium it paid plus transaction costs. If a Fund does not exercise the
option and is unable to close out the position prior to expiration of the
option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Fund will write
and purchase options only when the Adviser believes that a liquid secondary
market will exist for options of the same series, there can be no assurance that
a liquid secondary market will exist for a particular option at a particular
time and that a Fund if it so desires, can close out its position by effecting a
closing transaction. If the writer of a covered call option is unable to effect
a closing purchase transaction, it cannot sell the underlying security until the
option expires or the option is exercised. Accordingly, a covered call writer
may not be able to sell the underlying security at a time when it might
otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options or
impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. The Adviser believes that the position limits
established by the exchanges will not have any adverse impact upon a Fund or all
of the Funds, in the aggregate.
RISKS OF OPTIONS ON INDICES. Because the value of an index option depends
upon movements in the level of the index rather than movements in the price of a
particular security, whether a Fund will realize a gain or loss on the purchase
or sale of an option on an index depends upon movements in the level of prices
in the market generally or in an industry or market segment rather than upon
movements in the price of an individual security. Accordingly, successful use by
a Fund of options on indices will be subject to the Adviser's ability to predict
correctly movements in the direction of the market generally or in the direction
of a particular industry. This requires different skills and techniques than
predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, a Fund would not be able to
close out options which it had written or purchased and, if restrictions on
exercise were imposed, might be unable to exercise an option it purchased, which
would result in substantial losses to a Fund. However, it is the Trust's policy
to write or purchase options only on indices which include a sufficient number
of securities so that the likelihood of a trading halt in the index is
minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, a Fund will write call options on indices only subject to the
limitations described above.
Price movements in securities in a Fund's portfolio will not correlate
perfectly with movements in the level of the index and, therefore, a Fund bears
the risk that the price of the securities held by the Fund may not increase as
much as the level of the index. In this event, the Fund would bear a loss on the
call which would not be completely offset by movements in the prices of a Fund's
portfolio securities. It is also possible that the index may rise when the value
of a Fund's portfolio securities does not. If this occurred, the Fund would
experience a loss on the call which would not be offset by an increase in the
value of its portfolio and might also experience a loss in the market value of
portfolio securities.
Unless a Fund has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, a Fund will be required to liquidate portfolio
securities in order to satisfy the exercise. Because an exercise must be settled
within hours after receiving the notice of exercise, if a Fund fails to
anticipate an exercise, it may have to borrow from a bank (in an amount not
exceeding 10% of a Fund's total assets) pending settlement of the sale of
securities in its portfolio and pay interest on such borrowing.
When a Fund has written a call on an index, there is also a risk that the
market may decline between the time a Fund has the call exercised against it, at
a price which is fixed as of the closing level of the index on the date of
exercise, and the time a Fund is able to sell securities in its portfolio. As
with options on portfolio securities, a Fund will not learn that a call has been
exercised until the day following the exercise date but, unlike a call on a
portfolio security where a Fund would be able to deliver the underlying security
in settlement, a Fund may have to sell part of its portfolio securities in order
to make settlement in cash, and the price of such securities might decline
before they could be sold.
3
<PAGE>
If a Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" a Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although a Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS. All of the Funds except the
Money Market Fund and the Bond Fund may use financial futures contracts and
related options to hedge against changes in the market value of its portfolio
securities or securities which it intends to purchase. Hedging is accomplished
when an investor takes a position in the futures market opposite to his cash
market position. There are two types of hedges, long (or buying) and short (or
selling) hedges. Historically, prices in the futures market have tended to move
in concert with cash market prices, and prices in the futures market have
maintained a fairly predictable relationship to prices in the cash market. Thus,
a decline in the market value of securities in a Fund's portfolio may be
protected against to a considerable extent by gains realized on futures
contracts sales. Similarly, it is possible to protect against an increase in the
market price of securities which a Fund may wish to purchase in the future by
purchasing futures contracts.
A Fund may purchase or sell any financial futures contracts which are traded
on a recognized exchange or board of trade. Financial futures contracts consist
of interest rate futures contracts and securities index futures contracts. A
public market presently exists in interest rate futures contracts covering
long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S. Treasury
bills and GNMA certificates. Securities index futures contracts are currently
traded with respect to the Standard & Poor's 500 Composite Stock Price Index and
such other broad-based stock market indices as the New York Stock Exchange
Composite Stock Index and the Value Line Composite Stock Price Index. A clearing
corporation associated with the exchange or board of trade on which a financial
futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.
In contrast to the situation when a Fund purchases or sells a security, no
security is delivered or received by a Fund upon the purchase or sale of a
financial futures contract. Initially, a Fund will be required to deposit in a
pledged account with its custodian cash, U.S. Government obligations or fully
paid marginable securities. This amount is known as initial margin and is in the
nature of a performance bond or good faith deposit on the contract. The current
initial margin deposit required per contract is approximately 5% of the contract
amount. Brokers may establish deposit requirements higher than this minimum.
Subsequent payments, called variation margin, will be made to and from the
account on a daily basis as the price of the futures contract fluctuates. This
process is known as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts. Upon
exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
A Fund will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS. A Fund may not engage
in transactions in financial futures contracts or related options for
speculative purposes but only as a hedge against anticipated changes in the
market value of its portfolio securities or securities which it intends to
purchase. A Fund may not purchase or sell financial futures contracts or related
options if, immediately thereafter, the sum of the amount of initial margin
deposits on a Fund's existing futures and related options positions and the
premiums paid for related options would exceed 2% of the market value of a
Fund's total assets after taking into account unrealized profits and losses on
any such contracts. At the time of purchase of a futures contract or a call
option on a futures contract, any asset, including equity securities and
non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily, equal to the market value of the futures contract minus
the Fund's initial margin deposit with respect
4
<PAGE>
thereto will be deposited in a pledged account with the Fund's custodian bank to
collateralize fully the position and thereby ensure that it is not leveraged.
The extent to which a Fund may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal Revenue
Code of 1986 for qualification as a regulated investment company. See
"Dividends, Distributions and Taxes."
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS. Positions in futures
contracts and related options may be closed out only on an exchange which
provides a secondary market for such contracts or options. A Fund will enter
into an option or futures position only if there appears to be a liquid
secondary market. However, there can be no assurance that a liquid secondary
market will exist for any particular option or futures contract at any specific
time. Thus, it may not be possible to close out a futures or related option
position. In the case of a futures position, in the event of adverse price
movements a Fund would continue to be required to make daily margin payments. In
this situation, if a Fund has insufficient cash to meet daily margin
requirements it may have to sell portfolio securities to meet its margin
obligations at a time when it may be disadvantageous to do so. In addition, a
Fund may be required to take or make delivery of the securities underlying the
futures contracts it holds. The inability to close out futures positions also
could have an adverse impact on a Fund's ability to hedge its portfolio
effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also limit a hedger's opportunity to benefit fully from
a favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause a Fund to incur additional brokerage
commissions and may cause an increase in a Fund's portfolio turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements, interest rates and other market factors within a given time
frame. To the extent market prices remain stable during the period a futures
contract or option is held by a Fund or such prices move in a direction opposite
to that anticipated, a Fund may realize a loss on the hedging transaction which
is not offset by an increase in the value of its portfolio securities. Options
and futures may also fail as a hedging technique in cases where the movements of
the securities underlying the options and futures do not follow the price
movements of the hedged portfolio securities. As a result, a Fund's total return
for the period may be less than if it had not engaged in the hedging
transaction. The loss from investing in futures transactions is potentially
unlimited.
Utilization of futures contracts by a Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities which are being hedged. If the price of the futures
contract moves more or less than the price of the securities being hedged, a
Fund will experience a gain or loss which will not be completely offset by
movements in the price of the securities. It is possible that, where a Fund has
sold futures contracts to hedge its portfolio against a decline in the market,
the market may advance and the value of securities held in the Fund's portfolio
may decline. If this occurred, a Fund would lose money on the futures contract
and would also experience a decline in value in its portfolio securities. Where
futures are purchased to hedge against a possible increase in the prices of
securities before a Fund is able to invest its cash (or cash equivalents) in
securities (or options) in an orderly fashion, it is possible that the market
may decline; if a Fund then determines not to invest in securities (or options)
at that time because of concern as to possible further market decline or for
other reasons, a Fund will realize a loss on the futures that would not be
offset by a reduction in the price of the securities purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through off-setting
transactions rather than to meet margin deposit requirements. In such case,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities rather than
to engage in closing transactions because such action would reduce the liquidity
of the futures market. In addition, from the point of view of speculators,
because the deposit requirements in the futures markets are less onerous than
margin requirements in the cash market, increased participation by speculators
in the futures market could cause temporary price distortions. Due to the
possibility of price distortions in the futures market and because of the
imperfect correlation between movements in the prices of securities and
movements in the prices of futures contracts, a correct forecast of market
trends may still not result in a successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to a Fund while the purchase
or sale of the futures contract would not have resulted in a loss, such as when
there is no movement in the price of the underlying securities.
LEVERAGE. The Trust may from time to time increase the Aggressive Growth
Fund's ownership of securities holdings above the amounts otherwise possible by
borrowing from banks at fixed amounts of interest and investing the borrowed
funds. The Trust will borrow only from banks, and only if immediately after such
borrowing the value of the assets of a Fund (including the amount borrowed) less
its liabilities (not including any borrowings) is at least three times the
amount of funds borrowed for investment purposes. The effect of this provision
is to permit the Trust to borrow up to 25% of the total assets of a Fund,
including the proceeds of any such borrowings. However, the amount of the
borrowings will be dependent upon the availability and cost of credit from time
to time. If, due to market fluctuations or other reasons, the value of such
Fund's assets computed as provided above becomes at any
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time less than three times the amount of the borrowings for investment purposes,
the Trust, within three business days, is required to reduce bank debt to the
extent necessary to meet the required 300% asset coverage.
Interest on money borrowed will be an expense of the Fund with respect to
which the borrowing has been made. Because such expense would not otherwise be
incurred, the net investment income of such Fund is not expected to be as high
as it otherwise would be during periods when borrowings for investment purposes
are substantial.
Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing must also be made subject to an agreement by the
lender that any recourse is limited to the assets of the Fund with respect to
which the borrowing has been made.
Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of a Fund's shares to rise faster
than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the monies borrowed) to the Fund, the net asset
value of the Fund will decrease faster than would otherwise be the case.
FOREIGN SECURITIES. Each of the Funds, except the Money Market Fund and the
Bond Fund may purchase foreign securities, including those issued by foreign
branches of U.S. banks. In any event, such investments in foreign securities
will be limited to 25% of the total net asset value of the Balanced Fund and
Growth Fund. The Aggressive Growth Fund may invest up to 10% of its total net
asset value in foreign securities and the High Yield Fund may invest up to 35%
of its total net asset value in foreign securities. The Bond Fund may invest up
to 5% of its total net asset value in Yankee Bonds. Investments in foreign
securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in domestic
issues. These considerations include changes in currency rates, currency
exchange control regulations, the possibility of expropriation, the
unavailability of financial information, the difficulty of interpreting
financial information prepared under foreign securities markets, the impact of
political, social or diplomatic developments, difficulties in invoking legal
process abroad and the difficulty of assessing economic trends in foreign
countries.
The Trust may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of a
foreign custodian. The amount of cash or cash equivalents maintained in the care
of eligible foreign custodians will be limited to an amount reasonably necessary
to effect the Trust's foreign securities transactions. The use of a foreign
custodian invokes considerations which are not ordinarily associated with
domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign custodian,
inability to recover assets that are lost while under the control of the foreign
custodian, and the impact of political, social or diplomatic developments.
YANKEE BONDS. Yankee Bonds are issued in the United States by foreign
governments or companies. Since they are dollar-denominated, they are not
affected by variations in currency exchange rates. Yankee Bonds are influenced
primarily by interest rate levels in the United States, and by the financial
condition of the issuer. Because the issuers are foreign, the issuers may be
subject to levels of risk that differ from the domestic bond market.
MORTGAGE-BACKED SECURITIES. Securities issued by Government National Mortgage
Association ("GNMA") are, and securities issued by Federal National Mortgage
Association ("FNMA") include, mortgage-backed securities representing part
ownership of a pool of mortgage loans.
In the case of GNMA, the mortgages are insured by the Federal Housing
Administration or Farmers' Home Administration or guaranteed by the Veteran's
Administration. In the case of FNMA, the mortgages are not insured by an agency
of the U.S. Government.
The prices of mortgage-backed securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Mortgage-backed securities issued by GNMA and FNMA currently offer
yields which are higher than those available on other securities of the U.S.
Government and its agencies and instrumentalities, but may be less effective
than these other securities as a means of "locking in" attractive long-term
interest rates. This is a result of the need to reinvest prepayment of principal
and the possibility of significant unscheduled prepayments resulting from
declines in mortgage interest rates. As a result, these securities have less
potential for capital appreciation during periods of declining interest rates
than other investments of comparable risk of decline in value during periods of
rising rates.
NONPUBLICLY OFFERED DEBT SECURITIES. The High Yield Fund may purchase
securities which cannot be sold in the public market without first being
registered with the Securities and Exchange Commission ("SEC") provided that the
Adviser has determined that such securities meet prescribed standards for being
considered as "liquid" securities. See "Investment Restrictions." Liquid
restricted securities may offer higher yields than comparable publicly traded
securities. Such securities ordinarily can be sold by the Trust in secondary
market transactions to certain qualified investors pursuant to rules established
by the SEC, in privately negotiated transactions to a limited number of
purchasers or in a public offering made pursuant to an effective registration
statement under governing law. Private sales of such securities may involve
significant delays and expense. Private sales often require negotiation with one
or more purchasers and may produce less favorable prices than the sale of
similar unrestricted securities. Public sales of previously restricted
securities generally involve the time and expense of the preparation and
processing
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of a registration statement (and the possible decline in value of the
securities during such period) and may involve the payment of underwriting
commissions. In some instances, the Trust may have to bear certain costs of
registration in order to sell such shares publicly.
DEFERRED COUPON DEBT SECURITIES. The High Yield Fund may invest in debt
obligations that do not make any interest payments for a specified period of
time prior to maturity ("deferred coupon" obligations). Because the deferred
coupon bonds do not make interest payments for a certain period of time, they
are purchased by the Fund at a deep discount and their value fluctuates more in
response to interest rate changes than does the value of debt obligations that
make current interest payments. The degree of fluctuation with interest rate
changes is greater when the deferred period is longer. Therefore, there is a
risk that the value of the Fund shares may decline more as a result of an
increase in interest rates than would be the case if the Fund did not invest in
deferred coupon bonds.
LENDING PORTFOLIO SECURITIES. In order to increase its return on investments,
the Trust may make loans of the portfolio securities of any Fund, as long as the
market value of the loaned securities does not exceed 25% of the value of that
Fund's total assets. Loans of portfolio securities will always be fully
collateralized at no less than 100% of the market value of the loaned securities
(as marked to market daily) and made only to borrowers considered to be
creditworthy. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities and possibly the loss of the collateral if the
borrower fails financially.
LOAN PARTICIPATIONS. The High Yield Fund may invest up to 5% of its net
assets, determined at the time of investment, in loan participations. A loan
participation agreement involves the purchase of a share of a loan made by a
bank to a company in return for a corresponding share of the borrower's
principal and interest payments. Loan Participations of the type in which the
Fund may invest include interests in both secured and unsecured corporate loans.
In the event that a corporate borrower failed to pay its scheduled interest or
principal payments on Participations held by the Fund, the market value of the
affected participation would decline, resulting in a loss of value of such
investment to the Fund. Accordingly, such Participations are speculative and may
result in the income level and net assets of the Fund being reduced. Moreover,
loan participation agreements generally limit the right of a participant to
resell its interest in the loan to a third party and, as a result, loan
Participations will be deemed by the Trust to be illiquid investments.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
securities that are not liquid. The Funds consider investments that the adviser
is not likely to be able to sell within seven days as not liquid. These
securities can include repurchase agreements with maturities of more than seven
days and private placements. Repurchase agreements are contracts under which the
fund will buy securities and simultaneously agree to resell them at a later date
for an agreed, higher price. Private placements are securities that are not sold
to investors through a public offering but instead are sold in direct, private
transactions. Illiquid securities may have a lower value than comparable
securities that have active markets for resale, and they can lose their value
more quickly under unfavorable conditions.
INVESTMENT RESTRICTIONS
The Trust's fundamental policies as they affect any Fund cannot be changed
without the approval vote of a majority of the outstanding shares of such Fund,
which is the lesser of (i) 67% or more of the voting securities of such Fund
present at a meeting if the holders of more than 50% of the outstanding voting
securities of such Fund are present or represented by proxy or (ii) more than
50% of the outstanding voting securities of such Fund. A proposed change in
fundamental policy or investment objective will be deemed to have been
effectively acted upon with respect to any Fund if a majority of the outstanding
voting securities of that Fund votes for the approval of the proposal as
provided above, notwithstanding (1) that such matter has not been approved by a
majority of the outstanding securities of any other Fund affected by such matter
and (2) that such matter has not been approved by a majority of the outstanding
voting securities of the Trust.
The following investment restrictions are fundamental policies of the Trust
with respect to all Funds and may not be changed except as described above. The
Trust may not:
1. Purchase for any Fund securities of any issuer, other than obligations
issued or guaranteed as to principal and interest by the United States
Government or its agencies or instrumentalities, if immediately thereafter (i)
more than 5% of such Fund's total assets (taken at market value) would be
invested in the securities of such issuer or (ii) more than 10% of the
outstanding securities of any class of such issuer would be held by such Fund or
by all Funds of the Trust in the aggregate.
2. Concentrate the portfolio investments of any Fund in any one industry. To
comply with this restriction, no security may be purchased for a Fund if such
purchase would cause the value of the aggregate investment of such Fund in any
one industry to exceed 25% of that Fund's total assets (taken at market value).
However, the Money Market Fund may invest more than 25% of its assets in the
domestic banking industry.
3. Act as securities underwriter except as it technically may be deemed to be
an underwriter under the Securities Act of 1933 in selling a portfolio security.
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4. Purchase securities on margin, but it may obtain short-term credit as may
be necessary for the clearance of purchases and sales of securities.
5. Make short sales of securities or maintain a short position.
6. Make cash loans, except that the Trust may (i) purchase bonds, notes,
debentures or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not, and (ii) enter into
repurchase agreements, provided that no more than 10% of any Fund's net assets
(taken at market value) may be subject to repurchase agreements maturing in more
than seven days.
7. Make securities loans, except that the Trust may make loans of the
portfolio securities of any Fund, provided that the market value of the
securities subject to any such loans does not exceed 25% of the value of the
total assets (taken at market value) of such Fund.
8. Make investments in real estate or commodities or commodity contracts,
although (i) the Trust may purchase securities of issuers which deal in real
estate or commodities and may purchase securities which are secured by interests
in real estate, specifically, securities issued by real estate investment trusts
and (ii) any Fund (excluding the Money Market Fund and the Bond Fund) may engage
in transactions in financial futures contracts and related options, provided
that the sum of the initial margin deposits on such Fund's existing futures
positions and the premiums paid for related options would not exceed in the
aggregate 2% of such Fund's total assets.
9. Invest in oil, gas or other mineral exploration or development programs,
although the Trust may purchase securities of issuers which engage in whole or
in part in such activities.
10. Invest in puts, calls, straddles and any combination thereof, except that
any Fund (excluding the Money Market Fund and the Bond Fund) may (i) write
(sell) exchange-traded covered call options on portfolio securities and on
securities indices and engage in related closing purchase transactions and (ii)
invest up to 2% of its total assets in exchange-traded call and put options on
securities and securities indices.
11. Purchase securities of companies for the purpose of exercising management
or control.
12. Participate in a joint or joint and several trading account in
securities.
13. Purchase securities of any other investment company except in the open
market at customary brokers' commission rates or as a part of a plan of merger
or consolidation.
14. Purchase for any Fund securities of any issuer which together with
predecessors has a record of less than three years' continuous operation, if as
a result more than 5% of the total net assets (taken at market value) of such
Fund would then be invested in such securities.
15. Purchase or retain securities of any issuer if any officer or Trustee of
the Trust, or officer or director of its investment adviser, owns beneficially
more than 1/2 of 1% of the outstanding securities or shares, or both, of such
issuer and all such persons owning more than 1/2 of 1% of such securities or
shares together own beneficially more than 5% of such securities or shares.
16. Borrow money, except that the Trust may (i) borrow money for any Fund for
temporary administrative purposes provided that any such borrowing does not
exceed 10% of the value of the total assets (taken at market value) of such Fund
and (ii) borrow money for any Fund for investment purposes, provided that any
such borrowing for investment purposes with respect to any such Fund is (a)
authorized by the Trustees prior to any public distribution of the shares of
such Fund or is authorized by the shareholders of such Fund thereafter, (b) is
limited to 25% of the value of the total assets (taken at market value and
including any borrowings) of such Fund, and (c) is subject to an agreement by
the lender that any recourse is limited to the assets of that Fund with respect
to which the borrowing has been made. With the exception of the Aggressive
Growth Fund, no Fund may invest in portfolio securities while the amount of
borrowing of the Fund exceeds 5% of the total assets of such Fund. Borrowing for
investment purposes has not been authorized for any Fund (except the Aggressive
Growth Fund) whose shares are offered by the Trust.
17. Pledge, mortgage or hypothecate the assets of any Fund to an extent
greater than 10% of the total assets (taken at market value) of such Fund to
secure borrowings made pursuant to the provisions of item 16 above.
18. Issue senior securities as defined in the Investment Company Act of 1940,
except to the extent that it is permissible to (a) borrow monthly from banks
pursuant to the Trust's investment restrictions regarding the borrowing of
money, and (b) enter into transactions involving forward foreign currency
contracts, foreign currency contracts and options thereon, as described in the
Trust's Prospectus and this Statement of Additional Information.
The Trust may purchase illiquid securities including repurchase agreements
providing for settlement more than seven days after notice and restricted
securities (securities that must be registered with the Securities and Exchange
Commission before they can be sold to the public) deemed to be illiquid provided
such securities will not constitute more than 15% (or 10% in the
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case of the Money Market Fund) of each Fund's net assets. The Board of Trustees,
or the Adviser acting at its direction, values these securities, taking into
consideration quotations available from broker-dealers and pricing services and
other information deemed relevant.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values of portfolio securities or amount of net assets shall not be
considered a violation of the restrictions.
PERFORMANCE INFORMATION
Performance information for each Fund (and Class of a Fund) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature may
be expressed as yield and effective yield of the Money Market Fund, as yield of
the other Funds offered, or any Class of such Fund, and as total return of any
Fund or Class thereof.
The current yield for the Money Market Fund will be based on the change in
the value of a hypothetical investment (exclusive of capital changes) over a
particular 7-day period, less a hypothetical charge reflecting deductions for
expenses during the period (the "base period"), and stated as a percentage of
the investment at the start of the base period (the "base period return"). The
base period return is then annualized by multiplying by 365/7, with the
resulting yield figure carried to at least the nearest hundredth of one percent.
"Effective yield" for the Money Market Fund (and each Class of such Fund)
assumes that all dividends received during an annual period have been
reinvested. Calculation of "effective yield" begins with the same "base period
return" used in the calculation of yield, which is then annualized to reflect
weekly compounding pursuant to the following formula:
Effective Yield = [(Base Period Return) + 1) (365/7)] -1
For the 7-day period ending October 31, 1998, the yield of the Money Market
Fund was 4.92% for Class A Shares and 4.16% for Class B Shares; the effective
yield of this Fund was 4.92% for Class A Shares and 4.16% for Class B Shares.
Quotations of yield for the High Yield, Bond and Balanced Funds will be based
on all investment income per share earned during a particular 30-day period
(including dividends and interest), less expenses (including pro rata Trust
expenses and expenses applicable to each particular Fund or Class of a Fund)
accrued during the period ("net investment income"), and are computed by
dividing net investment income by the value of a share of the Fund or Class on
the last day of the period, according to the following formula:
YIELD = 2[(a-b)+ 1)(6) -1]
---
cd
where a = dividends and interest earned during the period by the Fund,
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the period.
For the period ended October 31, 1998, the yield of the Class A Shares of the
Funds were as follows: 11.02% for the High Yield Fund; 4.13% for the Bond Fund;
and 3.68% for the Balanced Fund. For the same period, the yield of the Class B
Shares of the Funds were as follows: High Yield Fund, 10.69%; Bond Fund, 3.63%;
and Balanced Fund, 3.42%.
Total return is a measure of the change in value of an investment in a Fund,
or Class thereof, over the period covered. The formula for total return used
herein includes four steps: (1) adding to the total number of shares purchased
by a hypothetical $1,000 investment in the Fund or a Class of a Fund; (2)
calculating the value of the hypothetical initial investment of $1,000 as of the
end of the period by multiplying the total number of shares of a class owned at
the end of the period by the net asset value on the last trading day of the
period; (3) assuming maximum sales charge deducted and reinvestment of all
dividends at net asset value and (4) dividing this account value for the
hypothetical investor by the initial $1,000 investment. Total return will be
calculated for one year, five years and ten years or the time period during
which the registration statement including the Fund was in effect if a Fund has
not been in existence for at least ten years.
The manner in which total return will be calculated for public use is
described above. The following table summarizes the calculation of total return
for each Fund, where applicable, through October 31, 1998.
AVERAGE ANNUAL TOTAL RETURN AS OF OCTOBER 31, 1998
PERIODS ENDED
-----------------------------------------------
10 YEAR OR
FUND 1 YEAR 5 YEAR SINCE INCEPTION*
---- ------ ------ ----------------
Aggressive Growth (Class A) (4.40)% 12.75% 12.37%
Aggressive Growth (Class B) (3.30)% N/A 15.63%
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Balanced (Class A) 3.53% 8.87% 11.39%
Balanced (Class B) 4.44% N/A 11.53%
Bond (Class A) 3.04% 4.98% 7.30%
Bond (Class B) 3.64% N/A 5.53%
Growth (Class A) 6.92% 14.45% 13.94%
Growth (Class B) 8.00% N/A 17.64%
High Yield (Class A) (13.27)% 4.62% 7.97%
High Yield (Class B) (12.80)% N/A 3.83%
High Yield (Class C) N/A N/A (14.89)%
* Since inception, July 15, 1994 for Class B Balanced and Growth; July 21,
1994 for Class B Aggressive Growth; February 16, 1994 for Class B High
Yield; February 24, 1994 for Bond; and February 27, 1998 for Class C High
Yield.
NOTE: Average annual total return assumes a hypothetical initial payment of
$1,000. At the end of each period, a total redemption is assumed. The
ending redeemable value is divided by the original investment to
calculate total return.
Performance information for any Fund or Class reflects only the performance
of a hypothetical investment in the Fund or Class during the particular time
period on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the particular Fund, and the market conditions during the given
time period, and should not be considered as a representation of what may be
achieved in the future.
PERFORMANCE COMPARISONS
Each Fund or Class of a Fund may from time to time include in advertisements
containing total return the ranking of those performance figures relative to
such figures for groups of mutual funds having similar investment objectives as
categorized by ranking services such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Weisenberger Financial Services, Inc. and rating
services such as Morningstar, Inc. Additionally, a Fund or Class of a Fund may
compare its performance results to other investment or savings vehicles (such as
certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week and Investor's Daily, Stanger's Mutual Fund Monitor, The Stanger Register,
Stanger's Investment Adviser, The Wall Street Journal, The New York Times,
Consumer Reports, Registered Representative, Financial Planning, Financial
Services Weekly, Financial World, U.S. News and World Report, Standard and Poors
The Outlook, and Personal Investor. A Fund may, from time to time, illustrate
the benefits of tax deferral by comparing taxable investments to investments
made through tax-deferred retirement plans. The total return may also be used to
compare the performance of the Fund or the Class of a Fund against certain
widely acknowledged outside standards or indices for stock and bond market
performance, such as the Standard & Poor's 500 Composite Stock Price Index (the
"S&P 500"), Dow Jones Industrial Average, Europe Australia Far East Index
(EAFE), Consumer Price Index, Lehman Brothers Corporate Index and Lehman
Brothers T-Bond Index. The S&P 500 is a commonly quoted measure of stock market
performance and represents common stocks of companies of varying sizes segmented
across 90 different industries which are listed on the New York Stock Exchange,
the American Stock Exchange and traded over the NASDAQ National Market System.
Advertisements, sales literature, and other communications may contain
information about the Adviser's current investment strategies and management
style. Current strategies and style may change to allow the Trust to respond
quickly to changing market and economic conditions. From time to time the Trust
may include specific portfolio holdings or industries. To illustrate components
of overall performance, the Trust may separate its cumulative and average annual
returns into income and capital gains components; or cite separately as a return
figure the equity or bond portion of the Trust's portfolio; or compare the
Trust's equity or bond return figure to well-known indices of market
performance, including but not limited to: the S&P 500 Index, Dow Jones
Industrial Average, Russell 2000 Growth Index, Salomon Brothers 90-Day Treasury
Bill Index, CS First Boston High Yield Index and Salomon Brothers Corporate Bond
and Government Bond Indices.
PORTFOLIO TURNOVER
Each Fund has a different expected annual rate of portfolio turnover, which
is calculated by dividing the lesser of purchases or sales of portfolio
securities during the fiscal year by the monthly average of the value of the
Funds' securities (excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year or less). A high
rate of portfolio turnover generally involves correspondingly greater brokerage
commission expenses, which must be borne directly by the Fund. Turnover rates
may vary greatly from year to year as well as within a particular year and may
also be affected by cash requirements for redemptions of each Fund's shares and
by requirements which enable the Trust to receive certain favorable tax
treatment (see "Taxes"). Historical annual rates of portfolio turnover for all
Funds except the Money Market Fund (which for this purpose does not calculate a
portfolio turnover rate) are set forth in the prospectus.
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PORTFOLIO TRANSACTIONS AND BROKERAGE
In effecting portfolio transactions for the Trust, the Adviser and/or
Subadviser (throughout this section, the "Adviser") adheres to the Trust's
policy of seeking best execution and price, determined as described below,
except to the extent it is permitted to pay higher brokerage commissions for
"brokerage and research services" as defined herein. The Adviser may cause the
Trust to pay a broker an amount of commission for effecting a securities
transaction in excess of the amount of commission which another broker or dealer
would have charged for effecting the transaction if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or that any
offset of direct expenses of a Fund yields the best net price. As provided in
Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research
services" include giving advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the availability of
securities; furnishing analyses and reports concerning issuers, industries,
economic factors and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Brokerage and research services
provided by brokers to the Trust or to the Adviser are considered to be in
addition to and not in lieu of services required to be performed by the Adviser
under its contract with the Trust and may benefit both the Trust and other
clients of the Adviser. Conversely, brokerage and research services provided by
brokers to other clients of the Adviser may benefit the Trust.
If the securities in which a particular Fund of the Trust invests are traded
primarily in the over-the-counter market, where possible the Fund will deal
directly with the dealers who make a market in the securities involved unless
better prices and execution are available elsewhere. Such dealers usually act as
principals for their own account. On occasion, securities may be purchased
directly from the issuer. Bonds and money market instruments are generally
traded on a net basis and do not normally involve either brokerage commission or
transfer taxes. In addition, transactions effected on foreign securities
exchanges which do not permit the negotiation of brokerage commissions and where
the Adviser would, under the circumstances, seek to obtain best price and
execution on orders for the Trust.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Trust (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future and the financial strength and stability of
the broker. Such considerations are judgmental and are weighed by the Adviser in
determining the overall reasonableness of brokerage commissions paid by the
Trust. Some portfolio transactions are, subject to the Conduct Rules of the
National Association of Securities Dealers, Inc. and subject to obtaining best
prices and executions, effected through dealers (excluding Equity Planning) who
sell shares of the Trust.
The Trust has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Trust. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs shared pro rata based on the
Trust's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
For the fiscal years ended October 31, 1996, 1997 and 1998, brokerage
commissions paid by the Trust on portfolio transactions totaled $9,322,374,
$13,168,358 and $6,306,652, respectively. Brokerage commissions of $5,779,984
paid during the fiscal year ended October 31, 1998, were paid on portfolio
transactions aggregating $5,548,454,620 executed by brokers who provided
research and other statistical and factual information. In fiscal year 1998, W.
S. Griffith & Co., Inc., a broker-dealer subsidiary of Phoenix Home Life Mutual
Insurance Company, received $21,996, or .28% of total brokerage commission paid
by the Trust in fund related commissions attributed to a clearing arrangement
with an unaffiliated broker-dealer.
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THE INVESTMENT ADVISER
The investment adviser to the Bond Fund is Duff & Phelps Investment
Management Co. ("Duff & Phelps"), which is located at 55 East Monroe Street,
Chicago, Illinois 60603. The investment adviser to each of the other funds is
Phoenix Investment Counsel, Inc. ("PIC" or "Adviser"), which is located at 56
Prospect Street, Hartford, Connecticut 06115-0480.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). PXP is a New York Stock Exchange traded
company that provides investment management and related services to
institutional investors, corporations and individuals through operating
subsidiaries. Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life")
of Hartford, Connecticut is a majority shareholder of PXP. Phoenix Home Life is
in the business of writing ordinary and group life and health insurance and
annuities. Its principal offices are located at One American Row, Hartford,
Connecticut, 06115-2520. Equity Planning, a mutual fund distributor, acts as the
national distributor of the Fund's shares and as Financial Agent of the Fund.
The principal office of Equity Planning is located at 100 Bright Meadow
Boulevard, Enfield, Connecticut, 06082.
PXP is a publicly-traded independent registered investment advisory firm and
has served investors for over 70 years. It manages over $57 billion in assets
(as of March 31, 1998) through its investment partners: Aberdeen Fund Managers,
Inc. (Aberdeen) in Aberdeen, London, Singapore and Fort Lauderdale; Duff &
Phelps Investment Management Co. (Duff & Phelps) in Chicago and Cleveland; Roger
Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca Capital Management
LLC (Seneca) in San Francisco; Zweig/Glaser Advisers (Zweig) in New York; and
Phoenix Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in
Hartford, Sarasota and Scotts Valley, CA, respectively.
PIC also acts as the investment adviser for 14 other mutual funds, as
subadviser to three mutual funds, and as adviser to institutional clients. PIC
has acted as an investment adviser for over sixty years. PIC was originally
organized in 1932 as John P. Chase, Inc. As of December 31, 1998, PIC had
approximately $23.9 billion in assets under management. Philip R. McLoughlin, a
Trustee and officer of the Fund, is a director of PIC. All other executive
officers of the Fund are officers of PIC.
Duff & Phelps also acts as investment adviser to eight other mutual funds and
as adviser to institutional clients. As of December 31, 1998, Duff & Phelps had
approximately $15.2 billion in assets under management on a discretionary basis.
Roger Engemann & Associates, Inc. ("Engemann") is the investment subadviser
to the Aggressive Growth Fund and Capital Growth Fund and is located at 600
North Rosemead Boulevard, Pasadena, California 91107. Engemann acts as adviser
to six mutual funds, as subadviser to four other mutual funds and acts as
investment adviser to institutions and individuals. As of December 31, 1998,
Engemann had $5.9 billion in assets under management. Engemann has been an
investment adviser since 1969.
All costs and expenses (other than those specifically referred to as being
borne by the Adviser) incurred in the operation of the Trust are borne by the
Trust. Each Fund pays expenses incurred in its own operation and also pays a
portion of the Trust's general administration expenses allocated on the basis of
the asset size of the respective Fund, except where allocation of direct
expenses to each Fund or an alternative allocation method can be more fairly
made. Such expenses include, but shall not be limited to, all expenses incurred
in the operation of the Trust and any public offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions, fees of Trustees
who are not fulltime employees of the Adviser or any of its affiliates, expenses
of Trustees' and shareholders' meetings, including the cost of printing and
mailing proxies, expenses of insurance premiums for fidelity and other coverage,
expenses of repurchase and redemption of shares, expenses of issue and sale of
shares (to the extent not borne by Equity Planning under its agreement with the
Trust), expenses of printing and mailing stock certificates representing shares
of the Trust, association membership dues, charges of custodians, transfer
agents, dividend disbursing agents and financial agents, bookkeeping, auditing,
and legal expenses. The Trust will also pay the fees and bear the expense of
registering and maintaining the registration of the Trust and its shares with
the Securities and Exchange Commission and registering or qualifying its shares
under state or other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders.
The investment advisory agreement provides that the Adviser shall not be
liable to the Trust or to any shareholder of the Trust for any error of judgment
or mistake of law or for any loss suffered by the Trust or by any shareholder of
the Trust in connection with the matters to which the investment advisory
agreement relates, except a loss resulting from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of the Adviser in the
performance of its duties thereunder.
As full compensation for the services and facilities furnished to the Trust,
the Adviser is entitled to a fee, payable monthly, as described in the
Prospectus. There is no assurance that the Trust will reach net asset levels
high enough to realize reductions in the rates of the advisory fees.
The agreement continues in force from year to year for all Funds, provided
that, with respect to each Fund, the agreement must be approved at least
annually by the Trustees or by vote of a majority of the outstanding voting
securities of the Funds. In addition, and in either event, the terms of the
agreement and any renewal thereof must be approved by the vote of a majority of
the Trustees who are not parties to the agreement or interested persons (as that
term is defined in the Investment Company Act of 1940) of any such
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party, cast in person at a meeting called for the purpose of voting on such
approval. The agreement will terminate automatically if assigned and may be
terminated at any time, without payment of any penalty, either by the Trust or
by the Adviser, on sixty (60) days written notice. The investment advisory
agreement provides that upon termination of the agreement, or at the request of
the Adviser, the Trust will eliminate all reference to Phoenix from its name,
and will not thereafter transact business in a name using the word Phoenix.
For services to the Trust during the fiscal years ended October 31, 1996,
1997, and 1998, the Adviser received fees of $33,927,182, $33,051,667 and
$33,577,315, respectively, under the investment advisory agreements in effect.
Of these totals, the Adviser received fees from each Fund as follows:
1996 1997 1998
---- ---- ----
Aggressive Growth Fund $1,537,430 $1,735,384 $1,847,122
Balanced Fund 11,281,357 9,489,765 8,930,936
Bond Fund 1,016,243 885,257 833,864
Growth Fund 15,914,996 16,439,785 17,237,170
High Yield Fund 3,366,120 3,713,370 3,942,021
Money Market Fund 811,036 788,106 786,202
NET ASSET VALUE
The net asset value per share of each Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Trust does not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Trust. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Fund which invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of such Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Trustees or their delegates. If at
any time a Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
MONEY MARKET FUND
The assets of the Money Market Fund are valued on the basis of amortized cost
absent extraordinary or unusual market conditions. Under the amortized cost
method of valuation, securities are valued at cost on the date of purchase.
Thereafter the value of a security is increased or decreased incrementally each
day so that at maturity any purchase discount or premium is fully amortized and
the value of the security is equal to its principal amount. Due to fluctuations
in interest rates, the amortized cost value of the Money Market Fund securities
may at times be more or less than their market value. By using amortized cost
valuation, the Money Market Fund seeks to maintain a constant net asset value of
$1.00 per share despite minor shifts in the market value of its portfolio
securities.
The yield on a shareholder's investment may be more or less than that which
would be recognized if the Fund's net asset value per share was not constant and
was permitted to fluctuate with the market value of the Fund's portfolio
securities. However, as a result of the following procedures, it is believed
that any difference will normally be minimal. The deviation is monitored
periodically by comparing the Fund's net asset value per share as determined by
using available market quotations with its net asset value per share as
determined through the use of the amortized cost method of valuation. The
Adviser makes such comparisons at
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least weekly and will advise the Trustees promptly in the event of any
significant deviation. If the deviation exceeds 1/2 of l%, the Trustees will
consider what action, if any, should be initiated to provide fair valuation of
the Fund's portfolio securities and prevent material dilution or other unfair
results to shareholders. Such action may include redemption of shares in kind,
selling portfolio securities prior to maturity, withholding dividends or
utilizing a net asset value per share as determined by using available market
quotations. Furthermore, the assets of the Fund will not be invested in any
security with a maturity of greater than 397 days, and the average weighted
maturity of its portfolio will not exceed 90 days. Portfolio investments will be
limited to U.S. dollar-denominated securities which present minimal credit risks
and are of high quality as determined either by a major rating service or, if
not rated, by the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by the Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which (except Class A Shares of the
Money Market Fund), at the election of the purchaser, may be imposed either (i)
at the time of the purchase (the "initial sales charge alternative") or (ii) on
a contingent deferred basis (the "deferred sales charge alternative"). Orders
received by dealers prior to the close of trading on the New York Stock Exchange
are confirmed at the offering price effective at that time, provided the order
is received by the Authorized Agent prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or C Shares would be less than the initial sales charge and accumulated
distribution and services fees on Class A Shares purchased at the same time.
Note, only the Bond Fund, High Yield Fund and Money Market Fund offer Class C
Shares.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to an ongoing distribution and services fees at an annual
rate of 0.25% of the Fund's aggregate average daily net assets attributable to
the Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B Shares are subject to an ongoing distribution and services fee at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fee paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted, in the circumstances and subject to the qualifications described
in the Funds' Prospectus. The purpose of the conversion feature is to relieve
the holders of the Class B Shares that have been outstanding for a period of
time sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
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Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fee. Such
conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
subaccount. Each time any Class B Shares in the shareholder's Fund account
(other than those in the subaccount) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the subaccount will also convert to
Class A Shares.
CLASS C SHARES--BOND FUND, HIGH YIELD FUND AND MONEY MARKET FUND ONLY
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase. The deferred
sales charge may be waived in connection with certain qualifying redemptions.
Shares issued in conjunction with the automatic reinvestment of income
distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to an ongoing distribution and services fee
at an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares.
PURCHASES OF SHARES OF THE MONEY MARKET FUND
The minimum initial investment and the minimum subsequent investment for the
purchase of shares of the Money Market Fund are set forth in the Prospectus.
Shares of the Money Market Fund are sold through registered representatives of
Equity Planning or through brokers or dealers with whom Equity Planning has
sales agreements. (See "Distribution Plans"). Initial purchases of shares may
also be made by mail by completing an application and mailing it directly to
Phoenix Funds c/o State Street Bank and Trust Company, P.O. Box 8301, Boston, MA
02266-8301. Subsequent purchases should be sent to State Street Bank and Trust
Company. An investment is accepted when funds are credited to the purchaser.
Investments are credited not later than the second business day after receipt by
the Trust of checks drawn on U.S. banks payable in U.S. funds. Shares purchased
begin earning dividends the day after funds are credited. Certified checks are
not necessary.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual fund advised, subadvised or distributed
by the Adviser, Distributor or any of their corporate affiliates; (2) any
director or officer, or any full-time employee or sales representative (for at
least 90 days), of the Adviser or Distributor; (3) registered representatives
and employees of securities dealers with whom Distributor has sales agreements;
(4) any qualified retirement plan exclusively for persons described above; (5)
any officer, director or employee of a corporate affiliate of the Adviser or
Distributor; (6) any spouse, child, parent, grandparent, brother or sister of
any person named in (1), (2), (3) or (5) above; (7) employee benefit plans for
employees of the Adviser, Distributor and/or their corporate affiliates; (8) any
employee or agent who retires from Phoenix Home Life, Distributor and/or their
corporate affiliates; (9) any account held in the name of a qualified employee
benefit plan, endowment fund or foundation if, on the date of the initial
investment, the plan, fund or foundation has assets of $10,000,000 or more or at
least 100 eligible employees; (10) any person with a direct rollover transfer of
shares from an established Phoenix Fund, Phoenix-Engemann Fund or Phoenix-Seneca
Fund qualified plan; (11) any Phoenix Home Life separate account which funds
group annuity contracts offered to qualified employee benefit plans; (12) any
state, county, city, department, authority or similar agency prohibited by law
from paying a sales charge; (13) any fully matriculated student in any U.S.
service academy; (14) any unallocated account held by a third party
administrator, registered investment adviser, trust company, or bank trust
department which exercises discretionary authority and holds the account in a
fiduciary, agency, custodial or similar capacity, if in the aggregate such
accounts held by such entity equal or exceed $1,000,000; (15) any person who is
investing redemption proceeds from investment companies other than the Phoenix
Funds, Phoenix-Engemann Fund or Phoenix-Seneca Fund if, in connection with the
purchases or redemption of the redeemed shares, the investor paid a prior sales
charge provided such investor supplies verification that the redemption occurred
within 90 days of the Phoenix Fund purchase and that a sales charge was paid;
(16) any deferred compensation plan established for the benefit of any Phoenix
Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund trustee or director; provided
that sales to persons listed in (1) through (15) above are made upon the written
assurance of the purchaser that the purchase is made for investment purposes and
that the shares so acquired will not be resold except to the Fund; (17)
purchasers of Class A Shares bought through investment advisers and financial
planners who charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients; (18)
retirement plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections 401(a),
403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy shares
for their own accounts, in each case if those purchases are made through a
broker or agent or other financial intermediary that has made special
arrangements with the Distributor for such purchases; (19) 401(k) participants
in the Merrill Lynch Daily K Plan (the "Plan") if the Plan has at least $3
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million in assets or 500 or more eligible employees; or (20) clients of
investment advisors or financial planners who buy shares for their own accounts
but only if their accounts are linked to a master account of their investment
advisor or financial planner on the books and records of the broker, agent or
financial intermediary with which the Distributor has made such special
arrangements (each of the investors described in (17) through (20) may be
charged a fee by the broker, agent or financial intermediary for purchasing
shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix Money Market Fund
Series Class A Shares), if made at the same time by the same "person," will be
added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b) plans
for the same employer; (d) multiple accounts (up to 200) under a qualified
employee benefit plan or administered by a third party administrator; or (e)
trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority and
which are held in a fiduciary, agency, custodial or similar capacity, provided
all shares are held of record in the name, or nominee name, of the entity
placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of this or any other Affiliated Phoenix Fund (other than Phoenix Money
Market Fund Series Class A Shares), if made by the same person within a
thirteen-month period, will be added together to determine whether you are
entitled to an immediate reduction in sales charges. Sales charges are reduced
based on the overall amount you indicate that you will buy under the Letter of
Intent. The Letter of Intent is a mutually nonbinding arrangement between you
and the Distributor. Since the Distributor doesn't know whether you will
ultimately fulfill the Letter of Intent, shares worth 5% of the amount of each
purchase will be set aside until you fulfill the Letter of Intent. When you buy
enough shares to fulfill the Letter of Intent, these shares will no longer be
restricted. If, on the other hand, you do not satisfy the Letter of Intent, or
otherwise wish to sell any restricted shares, you will be given the choice of
either buying enough shares to fulfill the Letter of Intent or paying the
difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you do
not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A or M Shares
before Class C or B Shares, respectively. Oldest shares will be redeemed before
selling newer shares. Any remaining shares will then be deposited to your
account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and C Shares if the
redemption is made (a) within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint tenant
is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to
Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, on
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B and C
Shares of this or any other Affiliated Phoenix Fund; (g) based on any direct
rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program
(Class B Shares only). If, as described in condition (a) above, an account is
transferred to an account registered in the name of a deceased's estate, the
CDSC will be waived on any
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redemption from the estate account occurring within one year of the death. If
the Class B or C Shares are not redeemed within one year of the death, they will
remain subject to the applicable CDSC when redeemed.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same Fund
eight years after they are bought. Conversion will be on the basis of the then
prevailing net asset value of Class A and B Shares. There is no sales load, fee
or other charge for this feature. Class B Shares acquired through dividend or
distribution reinvestments will be converted into Class A Shares at the same
time that other Class B Shares are converted based on the proportion that the
reinvested shares bear to purchased Class B Shares. The conversion feature is
subject to the continuing availability of an opinion of counsel or a ruling of
the Internal Revenue Service that the assessment of the higher distribution fees
and associated costs with respect to Class B Shares does not result in any
dividends or distributions constituting "preferential dividends" under the Code,
and that the conversion of shares does not constitute a taxable event under
federal income tax law. If the conversion feature is suspended, Class B Shares
would continue to be subject to the higher distribution fee for an indefinite
period. Even if the Funds were unable to obtain such assurances, it might
continue to make distributions if doing so would assist in complying with its
general practice of distributing sufficient income to reduce or eliminate
federal taxes otherwise payable by the Funds.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges as described in the Funds' current Prospectus. Certain
privileges may not be available in connection with all classes. In most cases,
changes to account services may be accomplished over the phone. Inquiries
regarding policies and procedures relating to shareholder account services
should be directed to Shareholder Services at (800) 243-1574.
EXCHANGES. Under certain circumstances, shares of any Phoenix Fund (except
Class A Shares of the Money Market Fund) may be exchanged for shares of the same
Class of another Phoenix Fund or any other Affiliated Phoenix Fund on the basis
of the relative net asset values per share at the time of the exchange.
Exchanges are subject to the minimum initial investment requirement of the
designated Fund, Series, or Portfolio, except if made in connection with the
Systematic Exchange privilege. Shareholders may exchange shares held in
book-entry form for an equivalent number (value) of the same class of shares of
any other Phoenix Fund, if currently offered. On exchanges with share classes
that carry a contingent deferred sales charge, the CDSC schedule of the original
shares purchased continues to apply. The exchange of shares is treated as a sale
and purchase for federal income tax purposes (see also "Dividends, Distributions
and Taxes").
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund or any other Affiliated Phoenix
Fund automatically on a monthly, quarterly, semi-annual or annual basis or may
cancel this privilege at any time. If you maintain an account balance of at
least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated
on the basis of the net asset value of the shares held in a single account), you
may direct that shares be automatically exchanged at predetermined intervals for
shares of the same class of another Phoenix Fund. This requirement does not
apply to Phoenix "Self Security" program participants. Systematic exchanges will
be executed upon the close of business on the 10th day of each month or the next
succeeding business day. Systematic exchange forms are available from the
Distributor. Exchanges will be based upon each Fund's net asset value per share
next computed after the close of business on the 10th day of each month (or next
succeeding business day), without sales charge.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS. If you maintain an account balance of
at least $5,000, or $2,000 for tax qualified retirement benefit plans
(calculated on the basis of the net asset value of the shares held in a single
account), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of one
of the other Phoenix Funds or any other Affiliated Phoenix Fund at net asset
value. You should obtain a current prospectus and consider the objectives and
policies of each Fund carefully before directing dividends and distributions to
another Fund. Reinvestment election forms and prospectuses are available from
Equity Planning. Distributions may also be mailed to a second payee and/or
address. Requests for directing distributions to an alternate payee must be made
in writing with a signature guarantee of the registered owner(s). To be
effective with respect to a particular dividend or distribution, notification of
the new distribution option must be received by the Transfer Agent at least
three days prior to the record date of such dividend or distribution. If all
shares in your account are repurchased or redeemed or transferred between the
record date and the payment date of a dividend or distribution, you will receive
cash for the dividend or distribution regardless of the distribution option
selected.
INVEST-BY-PHONE. This expedited investment service allows a shareholder to
make an investment in an account by requesting a transfer of funds from the
balance of their bank account. Once a request is phoned in, Equity Planning will
initiate the transaction by wiring a request for monies to the shareholder's
commercial bank, savings bank or credit union via Automated Clearing House
(ACH). The shareholder's bank, which must be an ACH member, will in turn forward
the monies to Equity Planning for credit to the shareholder's account. ACH is a
computer-based clearing and settlement operation established for the exchange of
electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to
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<PAGE>
3:00 p.m. (New York time) to place their purchase request. Instructions as to
the account number and amount to be invested must be communicated to Equity
Planning. Equity Planning will then contact the shareholder's bank via ACH with
appropriate instructions. The purchase is normally credited to the shareholder's
account the day following receipt of the verbal instructions. This service may
also be used to request redemption of shares of the Money Market Fund, the
proceeds of which are transferred to the shareholder's bank the second day
following receipt of the verbal request. The Trust may delay the mailing of a
check for redemption proceeds of Trust shares purchased with a check or via
Invest-by-Phone service until the Trust has assured itself that good payment has
been collected for the purchase of the shares, which may take up to 15 days.
The Trust and Equity Planning reserve the right to modify or terminate the
Invest-by-Phone service for any reason or to institute charges for maintaining
an Invest-by-Phone account.
SYSTEMATIC WITHDRAWAL PROGRAM. The Systematic Withdrawal Program allows you
to periodically redeem a portion of your account on a predetermined monthly,
quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations stated
below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal program must own
shares of a Series worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. Participants
in the Program redeeming Class C Shares will be subject to any applicable
contingent deferred sales charge. The purchase of shares while participating in
the withdrawal program will ordinarily be disadvantageous to the Class A Shares
investor since a sales charge will be paid by the investor on the purchase of
Class A Shares at the time as other shares are being redeemed. For this reason,
investors in Class A Shares may not participate in an automatic investment
program while participating in the Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investment each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any applicable
contingent deferred sales charge on all shares redeemed. Accordingly, the
purchase of Class B Shares will generally not be suitable for an investor who
anticipates withdrawing sums in excess of the above limits shortly after
purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Funds' current Prospectus for further information.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the giving
of not less than 30 days written notice to the shareholder mailed to the address
of record. During the 60 day period the shareholder has the right to add to the
account to bring its value to $200 or more.
BY MAIL
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Trust redeem the shares. See the Funds' current
Prospectus for more information.
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<PAGE>
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
BY CHECK (BOND FUND, HIGH YIELD FUND AND MONEY MARKET FUND ONLY)
Any shareholder of these Funds may elect to redeem shares held in his Open
Account by check. Checks will be sent to an investor upon receipt by Equity
Planning of a completed application and signature card (attached to the
application). If the signature card accompanies an individual's initial account
application, the signature guarantee section of the form may be disregarded.
However, the Trust reserves the right to require that all signatures be
guaranteed prior to the establishment of a check writing service account. When
an authorization form is submitted after receipt of the initial account
application, all signatures must be guaranteed regardless of account value.
Checks may be drawn payable to any person in an amount of not less than $500,
provided that immediately after the payment of the redemption proceeds the
balance in the shareholder's Open Account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient number
of full and fractional shares in the shareholder's Open Account will be redeemed
to cover the amount of the check. The number of shares to be redeemed will be
determined on the date the check is received by the Transfer Agent. Presently
there is no charge to the shareholder for the check writing service, but this
may be changed or modified in the future upon two weeks written notice to
shareholders. Checks drawn from Class B and Class C accounts are subject to the
applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables a shareholder to receive
income accruing on the shares to be redeemed until such time as the check is
presented to Equity Planning for payment. Inasmuch as canceled checks are
returned to shareholders monthly, no confirmation statement is issued at the
time of redemption.
Shareholders utilizing withdrawal checks will be subject to Equity Planning's
rules governing checking accounts. A shareholder should make sure that there are
sufficient shares in his Open Account to cover the amount of any check drawn. If
insufficient shares are in the account and the check is presented to Equity
Planning on a banking day on which the Trust does not redeem shares (for
example, a day on which the New York Stock Exchange is closed), or if the check
is presented against redemption proceeds of an investment made by check which
has not been in the account for at least fifteen calendar days, the check may be
returned marked "Non-sufficient Funds" and no shares will be redeemed. A
shareholder may not close his account by a withdrawal check because the exact
value of the account will not be known until after the check is received by
Equity Planning.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Funds may make
payment of the redemption price either in cash or in kind. However, the Funds
have elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Funds at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 Act and is irrevocable while the Rule is in
effect unless the Securities and Exchange Commission, by order, permits the
withdrawal thereof. In case of a redemption in kind, securities delivered in
payment for shares would be readily marketable and valued at the same value
assigned to them in computing the net asset value per share of the Funds. A
shareholder receiving such securities would incur brokerage costs when he sold
the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information and conditions
attached to this privilege.
TAX-SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
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<PAGE>
(ii) The Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set for in (i) through (iii) above but either does not meet the
$3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
As stated in the Prospectus, it will be the policy of the Trust and of each
Fund that each comply with provisions of the Internal Revenue Code (the "Code")
relieving investment companies which distribute substantially all of their net
income from Federal income tax on the amounts distributed.
The Federal tax laws also impose a four percent nondeductible excise tax on
each regulated investment company with respect to an amount, if any, by which
such company does not meet distribution requirements specified in such tax laws.
The Trust intends that each Fund will comply with such distribution requirements
and thus does not expect to incur the four percent nondeductible excise tax.
As stated in the Prospectus, the Trust believes that each of its Funds will
be treated as a single entity. Prior to November 1, 1986, the Trust was treated
as a single entity.
To qualify for treatment as a regulated investment company ("RIC") each Fund
must, among other things: (a) derive in each taxable year at least 90% of its
gross income from dividends, interest and gains from the sale or other
disposition of securities; and (b) meet certain diversification requirements
imposed under the Code at the end of each quarter of the taxable year. Under
certain state tax laws, each Fund must also comply with the "short-short" test
to qualify for treatment as a RIC for state tax purposes. Under the
"short-short" test the Fund must derive less than 30% of its gross income each
taxable year as gains (without deduction for losses) from the sale or other
disposition of securities for less than three months. If in any taxable year
each Fund does not qualify as a regulated investment company, all of its taxable
income will be taxed at corporate rates. In addition, if in any tax year the
Fund does not qualify as a RIC for state tax purposes a capital gain dividend
may not retain its character in the hands of the shareholder for state tax
purposes.
Income dividends and short-term capital gains distributions, whether received
in shares or in cash, are treated by shareholders as ordinary income for Federal
income tax purposes. Prior to January 1, 1987, income dividends were eligible
for the dividends received exclusion of $100 ($200 for a joint return) available
to individuals and the 85% dividends received deduction available to corporate
shareholders, subject, in either case, to reduction, for various reasons,
including the fact that dividends received from domestic corporations in any
year were less than 95% of the distributing Fund's gross income, in the case of
individual distributees, or 100% of the distributing Fund's gross income, in the
case of corporate distributees. Any income dividends received after December 31,
1987 do not qualify for dividend exclusion on an individual tax return but
corporate shareholders are eligible for a 70% dividends received deduction (80%
in the case of a 20% shareholder) subject to a reduction for various reasons
including the fact that dividends received from domestic corporations in any
year are less than 100% of the distributing Fund's gross income. Gross income
includes the excess of net short-term capital gains over net long-term capital
losses.
Distributions which are designated by the Trust as long-term capital gains,
whether received in shares or in cash, are taxable to shareholders as long-term
capital gains (regardless of how long such person has been a shareholder) and
are not eligible for the dividends received exclusion. Any loss from the sale of
shares held for six months or less will be treated as long-term capital loss to
the extent of any capital gain distributions paid with respect to such shares.
Individuals are entitled to deduct "miscellaneous itemized deductions"
specified in the Code only to the extent they exceed two percent of the
individuals' "adjusted gross income." Effective January 1, 1988, included within
the miscellaneous itemized deductions subject to the two percent "floor" are
indirect deductions through certain pass-through entities such as the Funds. The
Secretary of the Treasury is authorized to prescribe regulations relating to the
manner in which the floor will be applied with respect to indirect deductions
and to the manner in which pass-through entities such as the Funds will report
such amounts to the individual shareholders. Individual shareholders are advised
that, pursuant to these rules, they may be required to report as income amounts
in excess of actual distributions made to them.
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<PAGE>
The Trust is required to withhold for income taxes, 31% of dividends,
distributions and redemption payments, if any of the following circumstances
exist: i) a shareholder fails to provide the Trust with a correct taxpayer
identification number ("TIN"); ii) the Trust is notified by the Internal Revenue
Service that the shareholder furnished an incorrect TIN; or iii) the Trust is
notified by the Internal Revenue Service that withholding is required because
the shareholder failed to report the receipt of dividends or interest from other
sources. Withholding may also be required for accounts with respect to which a
shareholder fails to certify that i) the TIN provided is correct and ii) the
shareholder is not subject to such withholding. However, withholding will not be
required from certain exempt entities nor those shareholders complying with the
procedures as set forth by the Internal Revenue Service. A shareholder is
required to provide the Trust with a correct TIN. The Trust in turn is required
to report correct taxpayer identification numbers when filing all tax forms with
the Internal Revenue Service. Should the IRS levy a penalty on the Trust for
reporting an incorrect TIN and that TIN was provided by the shareholder, the
Trust will pass the penalty onto the shareholder.
Dividends paid by a Fund from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien individual,
a foreign trust or estate, a foreign corporation or a foreign partnership (a
"foreign shareholder") will be subject to United States withholding tax at a
rate of 30% unless a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Foreign shareholders are urged to consult
their own tax advisors concerning the applicability of the United States
withholding tax and any foreign taxes.
This discussion of "Dividends, Distributions and Taxes" is a general and
abbreviated summary of applicable provisions of the Code and Treasury
regulations now in effect as currently interpreted by the courts and the
Internal Revenue Service. The Code and these Regulations, as well as the current
interpretations thereof, may be changed at any time by legislative, judicial, or
administrative action.
Shareholders ordinarily will also be subject to state income taxes on the
dividends and distributions they receive from each Fund. Shareholders are urged
to consult counsel or other competent tax advisers regarding specific questions
as to Federal, state or local taxes.
THE DISTRIBUTOR
Phoenix Equity Planning Corporation ("Equity Planning"), which has undertaken
to use its best efforts to find purchasers for shares of the Trust, serves as
the national distributor of the Trust's shares. Shares of each Fund are offered
on a continuous basis. Pursuant to distribution agreements for each class of
shares or distribution method, the Distributor will purchase shares of the Trust
for resale to the public, either directly or through securities dealers or
agents, and is obligated to purchase only those shares for which it has received
purchase orders. Equity Planning may also sell Trust shares pursuant to sales
agreements entered into with bank-affiliated securities brokers who, acting as
agent for their customers, place orders for Trust shares with Equity Planning.
Although the Glass-Steagall Act prohibits banks and bank affiliates from
engaging in the business of underwriting, distributing or selling securities
(including mutual fund shares), banking regulators have not indicated that such
institutions are prohibited from purchasing mutual fund shares upon the order
and for the account of their customers. In addition, state securities laws on
this issue may differ from the interpretations of federal law and banks and
financial institutions may be required to register as dealers pursuant to state
law. If, because of changes in law or regulations, or because of new
interpretations of existing law, it is determined that agency transactions of
bank-affiliated securities brokers are not permitted, the Trustees will consider
what action, if any, is appropriate. It is not anticipated that termination of
sales agreements with bank-affiliated securities brokers would result in a loss
to their customers or a change in the net asset value per share of a Fund.
For the fiscal years ended October 31, 1996, 1997, and 1998, Equity
Planning's gross commissions on sales of Trust shares totaled $6,512,356,
$5,398,731 and $4,783,475, respectively, of which the principal underwriter
received net commissions of $912,483, $1,156,623 and $1,048,347, respectively,
for its services, the balance being paid to dealers. For the fiscal year ended
October 31, 1998, the Distributor received net commissions of $461,952 for Class
A Shares and deferred sales charges of $586,395 for Class B and C Shares.
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<PAGE>
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as set forth below.
<TABLE>
<CAPTION>
DEALER DISCOUNT
SALES CHARGE SALES CHARGE OR AGENCY FEE
AMOUNT OF TRANSACTION AS PERCENTAGE AS PERCENTAGE AS PERCENTAGE OF
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED OFFERING PRICE
----------------- ----------------- ------------------ --------------
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50% 4.71% 4.00%
$100,000 but under $250,000 3.50% 3.63% 3.00%
$250,000 but under $500,000 3.00% 3.09% 2.75%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan due to a waiver of the CDSC for these Plan
participants' purchases. Your broker, dealer or investment adviser may also
charge you additional commissions or fees for their services in selling shares
to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Funds and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Funds
through distribution fees, service fees or transfer agent fees or in some cases,
the Distributor may pay certain fees from its own profits and resources. From
its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6 million. If part or all of
such investment as described in (c) and (d) above, including investments by
qualified employee benefit plans, is subsequently redeemed within one year of
the investment date, the broker-dealer will refund to the Distributor such
amounts paid with respect to the investment. In addition, the Distributor may
pay the entire applicable sales charge on purchases of Class A Shares to
selected dealers and agents. From its own resources, the distributor intends to
pay the following additional compensation to Merrill Lynch, Pierce, Fenner &
Smith, Incorporated: 0.25% on sales of Class A and B Shares, 0.10% on sales of
Class C Shares, 0.10% on sales of Class A shares sold at net asset value, and
0.10% annually on the average daily net asset value of fund shares on which
Merrill Lynch is broker of record and which such shares exceed the amount of
assets on which Merrill Lynch is broker of record as of July 1, 1999. Any dealer
who receives more than 90% of a sales charge may be deemed to be an
"underwriter" under the Securities Act of 1933. Equity Planning reserves the
right to discontinue or alter such fee payment plans at any time.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Funds and as such
performs administrative, bookkeeping and pricing functions for the Funds. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC Inc.,
as subagent, plus (2) the documented cost of Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC Inc. is based upon the average of the aggregate
daily net asset values of the Funds, at the following incremental annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Funds. PFPC Inc. also charges minimum fees and additional fees for each
additional class of fund shares. Equity Planning retains PFPC Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC Inc. agreed to a modified fee structure and waived certain charges. Because
PFPC Inc.'s arrangement would have favored smaller funds over larger funds,
Equity Planning reallocates PFPC Inc.'s
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<PAGE>
overall asset-based charges among all funds for which it serves as
administrative agent on the basis of the relative net assets of each fund. As a
result, the PFPC Inc. charges to the Fund are expected to be slightly less than
the amount that would be found through direct application of the table
illustrated above. For its services during the Fund's fiscal year ended October
31, 1998, Equity Planning received $1,675,974.
DISTRIBUTION PLANS
The Funds have adopted separate amended and restated distribution plans under
Rule 12b-1 of the 1940 Act for each class of shares of the Funds other than
Class A Shares of the Money Market Fund (the "Class A Plan," the "Class B Plan,"
the "Class C Plan," and collectively the "Plans"). The Plans permit the Funds to
reimburse the Distributor for expenses incurred in connection with activities
intended to promote the sale of shares of each class of shares of the Funds.
Pursuant to the Class B and Class C Plans, each Fund may reimburse the
Distributor monthly for actual expense of the Distributor up to 0.75% (0.50% for
the Class B Plan for the Money Market Fund) of the average daily net assets of
the Class B and Class C Shares, respectively. Expenditures under the Plans shall
consist of: (i) commissions to sales personnel for selling shares of the Funds;
(ii) compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
which have entered into agreements with the Distributor in the form of the
Dealer Agreement for Phoenix Funds for services rendered in connection with the
sale and distribution of shares of the Funds; (iv) payment of expenses incurred
in sales and promotional activities, including advertising expenditures related
to the Funds; (v) the costs of preparing and distributing promotional materials;
(vi) the cost of printing the Funds' Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Trustees of the Funds determine are reasonably
calculated to result in the sale of shares of the Funds. In addition, the Funds
will pay the Distributor 0.25% annually of the average daily net assets of the
Funds' shares for providing services to the shareholders, including assistance
in connection with inquiries related to shareholder accounts (the "Service
Fee").
From the Service Fee, the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
Each Plan requires that at least quarterly the Trustees of the Trust review a
written report with respect to the amounts expended under the Plan and the
purposes for which such expenditures were made. While each Plan is in effect,
the Trust will be required to commit the selection and nomination of candidates
for Trustees who are not interested persons of the Trust to the discretion of
other Trustees who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is approved annually in advance
by votes of the majority of both (a) the Board of Trustees of the Trust and (b)
the Rule 12b-1 Trustees, cast in person at a meeting called for the purpose of
voting on the Plan and any agreements related to each Plan. No interested person
of the Trust and no Trustee who is not an interested person of the Trust, as
that term is defined in the Investment Company Act of 1940, has any direct or
indirect financial interest in the operation of the Plans.
For the fiscal year ended October 31, 1998, the Funds paid Rule l2b-l Fees in
the amount of $14,990,674, of which the principal underwriter received
$3,050,942; W.S. Griffith & Co., Inc., an affiliate, received $1,390,286; and
unaffiliated broker-dealers received $10,549,446. Distributor expenses under the
Plans consisted of: (1) advertising, $1,098,449; (2) printing and mailing of
prospectuses to other than current shareholders, $58,667; (3) compensation to
dealers, $13,966,641; (4) compensation to sales personnel, $2,229,632; (5)
service costs, $697,216, and (6) other, $426,887. The Distributor's expenses
from selling and servicing Class B Shares may be more than the payments received
from contingent deferred sales charges collected on redeemed shares and from the
Fund under the Class B Plan. Those expenses may be carried over and paid in
future years. At October 31, 1998, the end of the last Plan year, Distributor
had incurred unreimbursed expenses under the Class B Plan of $4,459,578 (equal
to 0.09% of the Fund's net assets) which have been carried over into the present
Class B Plan year.
23
<PAGE>
MANAGEMENT OF THE TRUST
The Trustees of the Trust are responsible for the overall supervision of the
operations of the Trust and perform the various duties imposed on Trustees by
the 1940 Act and Massachusetts business trust law.
TRUSTEES AND OFFICERS
The trustees and executive officers of the Trust and their principal
occupations for at least the last five years are set forth below. Unless
otherwise noted, the address of each executive officer and trustee is 56
Prospect Street, Hartford, Connecticut 06115-0480.
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
Robert Chesek (65) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present). Vice President,
Common Stock, Phoenix Home Life Mutual Insurance Company
(1980-1994).
E. Virgil Conway (70) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac
Mortgage Securities Fund (Advisory Director) (1990-present),
Centennial Insurance Company (1974-present), Josiah Macy, Jr.,
Foundation (1975-present), The Harlem Youth Development
Foundation (1987-present (Chairman) (1998-present)), Accuhealth
(1994-present), Trism, Inc. (1994-present), Realty Foundation of
New York (1972-present), and New York Housing Partnership
Development Corp. (Chairman) (1981-present). Director/Trustee,
Phoenix Funds (1993-present). Trustee, Phoenix-Aberdeen Series
Fund and Phoenix Duff & Phelps Institutional Mutual Funds (1996-
present). Director, Duff & Phelps Utilities Tax-Free Income Inc.
and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Advisory Director, Fund Directions (1993-1998).
Chairman/Member, Audit Committee of the City of New York
(1981-1996). Advisory Director, Blackrock Fannie Mae Mortgage
Securities Fund (1989-1996). Chairman, Financial Accounting
Standards Advisory Council (1992-1995).
Harry Dalzell-Payne (70) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff &
New York, NY 10016 Phelps Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Director, Farragut Mortgage
Co., Inc. (1991-1994). Formerly a Major General of the British Army.
*Francis E. Jeffries (69) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps
Apt. 1601 Institutional Mutual Funds (1996-present). Director, Duff &
Naples, FL 33963 Phelps Utilities Income Inc. (1987-present), Duff & Phelps
Utilities Tax-Free Income Inc. (1991-present) and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1993-present). Director,
The Empire District Electric Company (1984-present). Director
(1989-1997), Chairman of the Board (1993- 1997), President
(1989-1993), and Chief Executive Officer (1989- 1995), Phoenix
Investment Partners, Ltd.
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
Leroy Keith, Jr. (60) Trustee Chairman and Chief Executive Officer, Carson Products Company
Chairman and Chief (1995-present). Director/Trustee, Phoenix Funds (1980-present).
Executive Officer Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Carson Product Company Institutional Mutual Funds (1996-present). Director, Equifax
64 Ross Road Corp. (1991-present) and Evergreen International Fund, Inc.
Savannah, GA 30750 (1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust. President, Morehouse College
(1987-1994). Chairman and Chief Executive Officer, Keith Ventures
(1992-1994).
*Philip R. McLoughlin (52) Trustee and Chairman (1997-present), Vice Chairman (1995-1997) and
President Chief Executive Officer (1995-present), Phoenix Investment
Partners, Ltd. Director (1994-present) and Executive Vice
President, Investments (1988-present), Phoenix Home Life Mutual
Insurance Company. Director/Trustee and President, Phoenix Funds
(1989-present). Trustee and President, Phoenix-Aberdeen Series Fund
and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990- present), Phoenix Equity
Planning Corporation. Director (1993-present), Chairman
(1993-present) and Chief Executive Officer (1993-1995), National
Securities & Research Corporation. Director, Phoenix Realty Group,
Inc. (1994-present), Phoenix Realty Advisors, Inc. (1987-present),
Phoenix Realty Investors, Inc. (1994-present), Phoenix Realty
Securities, Inc. (1994-present), PXRE Corporation (Delaware)
(1985-present), and World Trust Fund (1991-present). Director and
Executive Vice President, Phoenix Life and Annuity Company
(1996-present). Director and Executive Vice President, PHL Variable
Insurance Company (1995-present). Director, Phoenix Charter Oak
Trust Company (1996-present). Director and Vice President, PM
Holdings, Inc. (1985-present). Director and President, Phoenix
Securities Group, Inc. (1993-1995). Director (1992-present) and
President (1992-1994), W.S. Griffith & Co., Inc. Director
(1992-present). Director, PHL Associates Inc. (1995-present).
Everett L. Morris (71) Trustee Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen
Colts Neck, NJ 07722 Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1991-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1993-present).
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
*James M. Oates (53) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC), (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets LLC (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present). Director, AIB Govett
Boston, MA 02109 Funds (1991-present), Blue Cross and Blue Shield of New Hampshire
(1994-present), Investors Financial Service Corporation
(1995-present), Investors Bank & Trust Corporation
(1995-present), Plymouth Rubber Co. (1995-present), Stifel
Financial (1996-present), Command Systems, Inc. (1998-present),
Connecticut River Bancorp (1998-present). Vice Chairman,
Massachusetts Housing-Partnership (1998-present). Member, Chief
Executives Organization (1996-present). Director (1984-1994),
President (1984-1994) and Chief Executive Officer (1986-1994),
Neworld Bank.
*Calvin J. Pedersen (57) Trustee Director (1986-present), President (1993-present) and Executive
Phoenix Duff & Phelps Vice President (1992-1993), Phoenix Investment Partners, Ltd.
Corporation Director/ Trustee, Phoenix Funds (1995-present). Trustee,
55 East Monroe Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 3600 Institutional Mutual Funds (1996-present). President and Chief
Chicago, IL 60603 Executive Officer, Duff & Phelps Utilities Tax-Free Income Inc.
(1997-present), Duff & Phelps Utilities Income Inc.
(1994-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1995-present).
Herbert Roth, Jr. (71) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company (1978-present), Landauer, Inc. (medical services)
(1970-present), Tech Ops./Sevcon, Inc. (electronic controllers)
(1987-present), and Mark IV Industries (diversified manufacturer)
(1985-present). Member, Directors Advisory Council, Phoenix Home
Life Mutual Insurance Company (1998-present). Director, Key
Energy Group (oil rig service) (1988-1994) and Phoenix Home Life
Mutual Insurance Company (1972-1998).
Richard E. Segerson (53) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/ Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Managing Director,
Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (68) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present). Director, UST Inc.
(1995-present), HPSC Inc. (1995-present), Compuware (1996-present) and
Burroughs Wellcome Fund (1996-present). Visiting Professor, University
of Virginia (1997-present). Director, Duty Free International, Inc.
(1997). Chairman, Dresing, Lierman, Weicker (1995-1996). Governor
of the State of Connecticut (1991-1995).
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
Michael E. Haylon (41) Executive Vice Director and Executive Vice President--Investments, Phoenix
President Investment Partners, Ltd. (1995-present). Executive Vice
President, Phoenix Funds (1993-present) and Phoenix-Aberdeen
Series Fund (1996-present). Executive Vice President
(1997-present), Vice President (1996-1997), Phoenix Duff & Phelps
Institutional Mutual Funds. Director (1994-present), President
(1995-present), Executive Vice President (1994-1995), Vice
President (1991-1994), Phoenix Investment Counsel, Inc. Director,
Phoenix Equity Planning Corporation (1995-present). Senior Vice
President, Securities Investments, Phoenix Home Life Mutual
Insurance Company (1993-1995).
John F. Sharry (47) Executive Vice President, Retail Division (1999-present), Executive Vice
President President, Retail Division (1997-1999), Phoenix Investment
Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-present). Executive Vice
President, Phoenix Funds and Phoenix-Aberdeen Series Funds
(1998-present). Managing Director, Director and National Sales
Manager, Putnam Mutual Funds (until 1995).
Roger Engemann (59) Senior Vice President and Director (1969-present), Roger Engemann &
600 North Rosemead Blvd. President Associates, Inc. Vice President, Phoenix Series Fund, Phoenix
Pasadena, CA 91107 Strategic Equity Series Fund and Phoenix Investment Counsel, Inc.
(1998-present). Chairman, Owner (1996-present), Pasadena National
Trust Company. Chairman, President and Director (1988-present),
Pasadena Capital Corporation. Chairman of the Board, President and
Trustee (1986-present), Phoenix-Engemann Funds. Chairman,
President and Director (1985-present), Roger Engemann Management
Co., Inc.
James D. Wehr (42) Senior Vice Senior Vice President, Fixed Income (1998-present), Managing
President Director, Fixed Income (1996-1998), Vice President (1991-1996),
Phoenix Investment Counsel, Inc. Senior Vice President (1997-present),
Vice President (1988-1997) Phoenix Multi-Portfolio Fund; Senior Vice
President (1997-present), Vice President (1990-1997) Phoenix Series
Fund; Senior Vice President (1997-present), Vice President (1991-1997)
The Phoenix Edge Series Fund; Senior Vice President (1997-present),
Vice President (1993-1997) Phoenix-Goodwin California Tax Exempt Bonds,
Inc., and Senior Vice President (1997-present), Vice President
(1996-1997) Phoenix Duff & Phelps Institutional Mutual Funds. Senior
Vice President (1997-present) Phoenix-Goodwin Multi-Sector Fixed Income
Fund, Inc., Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Oakhurst Income & Growth Fund and Phoenix Strategic Allocation
Fund, Inc. Senior Vice President and Chief Investment Officer, Duff &
Phelps Utilities Tax Free Income Inc. (1997-present). Managing
Director, Public Fixed Income, Phoenix Home Life Insurance Company
(1991-1995).
David L. Albrycht (38) Vice Managing Director, Fixed Income (1996-present) and Vice President
President (1995-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix-Goodwin Multi-Portfolio Fund (1993-present),
Phoenix-Goodwin Multi-Sector Short Term Bond Fund (1993-present),
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
(1994-present), The Phoenix Edge Series Fund (1997-present) and
Phoenix Series Fund (1997-present). Portfolio Manager, Phoenix
Home Life Mutual Insurance Company (1995-1996).
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
Steven L. Colton (40) Vice Managing Director, Value Equities, Phoenix Investment Counsel,
President Inc. (1997-present). Vice President, The Phoenix Edge Series
Fund, Phoenix Series Fund, Phoenix Equity Series Fund (1997-present).
Vice President/Senior Portfolio Manager, American Century Investment
Management (1987-1997). Portfolio Manager, American Century/Benham
Income and Growth Fund (1990-1997), American Century/Benham Equity
Growth Fund (1991-1996) and American Century/Benham Utilities Income
Fund (1993-1997).
Christopher J. Kelleher (44) Vice Managing Director, Fixed Income (1996-present), Vice President
President (1991-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Series Fund (1989-present), The Phoenix Edge Series Fund
(1989-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present), Phoenix-Oakhurst Income & Growth Fund (1998-present)
and Phoenix Strategic Allocation Fund (1998-present). Portfolio
Manager, Public Bonds, Phoenix Home Life Insurance Company (1991-1995).
James E. Mair (57) Vice Executive Vice President (1994-present) and Senior Vice President
600 North Rosemead Blvd. President (1983-1994), Roger Engemann & Associates, Inc. Vice President,
Pasadena, CA 91107 Phoenix Series Fund (1998-present). Managing Director, Equities,
Phoenix Investment Counsel, Inc. (1998-present). Executive Vice
President (1994-present) and Security Analyst (1983-1994), Roger
Engemann Management Co., Inc. Executive Vice President and
Director (1994-present), Senior Vice President and Director
(1990-1994), Pasadena Capital Corporation. Director
(1989-present), Pasadena National Trust Company.
William R. Moyer (55) Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial Officer
P.O. Box 2200 (1995-present), Phoenix Investment Partners, Ltd. Director
Enfield, CT 06083-2200 (1998-present). Senior Vice President, Finance (1990-present),
Chief Financial Officer (1996-present), and Treasurer (1994-1996
and 1998-present), Phoenix Equity Planning Corporation. Director
(1998-present). Senior Vice President (1990-present), Chief
Financial Officer (1996-present) and Treasurer (1994-present),
Phoenix Investment Counsel, Inc. Director (1998-present). Senior
Vice President and Chief Financial Officer, Duff & Phelps
Investment Management Co. (1996-present). Vice President, Phoenix
Funds (1990-present), Phoenix-Duff & Phelps Institutional Mutual
Funds (1996-present) and Phoenix-Aberdeen Series Fund
(1996-present). Senior Vice President and Chief Financial
Officer, W. S. Griffith & Co., Inc. (1992-1995) and Townsend
Financial Advisers, Inc. (1993-1995). Vice President, Investment
Products Finance, Phoenix Home Life Mutual Insurance Company
(1990-1995).
Timothy P. Norman (45) Vice Managing Director, Fixed Income, Phoenix Investment Counsel, Inc.
President (1998-present). Vice President, Phoenix Series Fund (1998-present).
Executive Vice President (1995-present), Senior Vice President
(1993-1995), Duff & Phelps Investment Management Co.
Leonard J. Saltiel (45) Vice Managing Director, Operations and Service (1996-present), Senior
President Vice President (1994-1996), Phoenix Equity Planning Corporation.
Vice President, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Aberdeen
Series Fund (1996-present). Senior Vice President, Phoenix
Investment Partners, Ltd. (1999-present). Vice President,
Investment Operations, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Home Life Insurance Company and
Phoenix Home Life Mutual Insurance Company (1987-1994).
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) WITH PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE THE TRUST DURING PAST FIVE YEARS
- - --------------------- --------- ----------------------
<S> <C> <C>
Christopher J. Saner (39) Vice Managing Director, Fixed Income, Phoenix Investment Counsel, Inc.
President (1997-present). Vice President, Phoenix Duff & Phelps
Institutional Mutual Funds (1998-present) and Phoenix Series Fund
(1998-present). Director Corporate Portfolio Management, Phoenix
Home Life Mutual Insurance Company (1992-1997).
Julie L. Sapia (42) Vice Director, Money Market Trading (1997-present), Head Money Market
President Trader (1997), Money Market Trader (1995-1997), Phoenix
Investment Counsel, Inc. Vice President (1997-present), The
Phoenix Edge Series Fund, Phoenix Series Fund, Phoenix Duff &
Phelps Institutional Mutual Funds and Phoenix-Aberdeen Series
Fund. Various positions with Phoenix Home Life Mutual Insurance
Company (1985-1995).
Andrew Szabo (35) Vice Managing Director, Fixed Income, Phoenix Investment Counsel, Inc.
President (1997-present). Vice President, Phoenix Series Fund
(1998-present) and Phoenix Duff & Phelps Institutional Mutual
Funds (1998-present).
John S. Tilson (55) Vice Executive Vice President (1994-present), Senior Vice President
600 North Rosemead Blvd. President (1983-1994), Roger Engemann & Associates, Inc. Vice President,
Pasadena, CA 91107 Phoenix Series Fund (1998-present). Managing Director Equities,
Phoenix Investment Counsel, Inc. (1998-present), Executive Vice
President and Director (1994-present), Senior Vice President and
Director (1990-1994), Pasadena Capital Corporation. Executive
Vice President (1994-present) and Security Analyst (1983-1994),
Roger Engemann Management Co., Inc. Chief Financial Officer and
Secretary (1988-present), Phoenix-Engemann Funds.
Nancy G. Curtiss (46) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1995-present) and Phoenix-Aberdeen Series Fund
(1996-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Phoenix Home Life Insurance
Company (1987-1994).
G. Jeffrey Bohne (51) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Vice President, Mutual Fund
Greenfield, MA 01301 Customer Service (1996-present), Vice President, Transfer Agent
Operations (1993-1996). Phoenix Equity Planning Corporation,
Secretary/Clerk, Phoenix Funds (1993-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Aberdeen Series
Fund (1996-present).
</TABLE>
- - -----------------------
*Trustees identified with an asterisk are considered to be interested persons of
the Trust (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
Phoenix Equity Planning Corporation or Phoenix Investment Partners, Ltd.
For services rendered to the Trust during the fiscal year ended October 31,
1998, the Trustees received an aggregate of $117,685 from the Trust as Trustees'
fees. For services on the Board of Trustees of the Phoenix Funds, each Trustee
who is not a full-time employee of the Adviser or any of its affiliates
currently receives a retainer at the annual rate of $40,000 and $2,500 per joint
meeting of the Boards. Each Trustee who serves on the Audit Committee receives a
retainer at the annual rate of $2,000 and a fee of $2,000 per joint Audit
Committee meeting attended. Each Trustee who serves on the Nominating Committee
receives an annual retainer at the annual rate of $1,000 and a fee of $1,000 per
joint Nominating Committee meeting attended. Each Trustee who serves on the
Executive Committee and who is not an interested person of the Trust receives a
retainer at the annual rate of $2,000 and $2,000 per joint Executive Committee
meeting attended. The function of the Executive Committee is to serve as a
contract review, compliance review and performance review delegate of the full
Board of Trustees. Trustee costs are allocated equally to each
29
<PAGE>
of the Series and the Funds within the Phoenix Fund complex. The foregoing fees
do not include reimbursement of expenses incurred in connection with meeting
attendance. Officers and employees of the Adviser who are not interested persons
are compensated for their services by the Adviser and receive no compensation
from the Trust.
For the Trust's last fiscal year ending October 31, 1998, the Trustees
received the following compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (14 FUNDS)
NAME FROM FUND OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- --------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Robert Chesek $ 9,747 $59,750
E. Virgil Conway[dagger] $12,727 $78,000
Harry Dalzell-Payne[dagger] $11,340 $69,500
Francis E. Jeffries $ 9,752* $60,000
Leroy Keith, Jr. $10,154 None None $62,250
Philip R. McLoughlin[dagger] 0 for any for any 0
Everett L. Morris[dagger] $10,938* Trustee Trustee $68,000
James M. Oates[dagger] $10,938 $67,250
Calvin J. Pedersen 0 0
Herbert Roth, Jr.[dagger] $13,129* $79,500
Richard E. Segerson $11,541 $70,750
Lowell P. Weicker, Jr. $11,541 $70,000
</TABLE>
*This compensation (and the earnings thereon) was deferred pursuant to the
Deferred Compensation Plan. At December 31, 1998, the total amount of deferred
compensation (including interest and other accumulation earned on the original
amounts deferred) accrued for Messrs. Jeffries, Morris and Roth was $175,029,
$151,807 and $147,653, respectively. At present, by agreement among the Fund,
the Distributor and the electing director, director fees that are deferred are
paid by the Fund to the Distributor. The liability for the deferred
compensation obligation appears only as a liability of the Distributor.
[dagger] Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
At September 30, 1999, the Trustees and officers as a group owned less than
1% of the then outstanding shares of the Trust.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of September 30, 1999 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially own 5% or more of any class of the Trust's equity
securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER NAME OF FUND NUMBER OF SHARES PERCENT OF CLASS
- - ------------------- ------------ ---------------- ----------------
<S> <C> <C> <C>
Trustees of Phoenix Savings and Aggressive 990,210.7750 6.51%
Investment Plan Growth Fund
100 Bright Meadow Blvd Class A
PO Box 1900
Enfield, CT 06083-1900
MLPF&S for the sole benefit of its Bond Fund 385,011.8690 28.88%
customers* Class B
ATTN: Fund Administration Aggressive Growth Fund 61,657.6580 5.39%
4800 Deer Lake Dr E 3rd Fl Class A
Jacksonville, FL 32246-6484 High Yield Fund
Class B 1,601,674.3400 20.51%
Class C 116,187.7460 30.52%
</TABLE>
*Record owner only for its individual customers. To the Trust's knowledge, no
customer beneficially owned 5% or more of the total outstanding shares of any
Class of any Fund.
30
<PAGE>
OTHER INFORMATION
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Funds and different classes of those Funds. Holders of shares of a Fund have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Fund. Shareholders of all Funds vote on the
election of Trustees. On matters affecting an individual Fund (such as approval
of an investment advisory agreement or a change in fundamental investment
policies) and on matters affecting an individual class (such as approval of
matters relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Fund or Class is required. Regular shareholder meetings
are held every third calendar year for the purpose of electing the Trustees. In
addition, the Trustees will call a meeting when at least 10% of the outstanding
shares so request in writing. If the Trustees fail to call a meeting after being
so notified, the Shareholders may call the meeting. The Trustees will assist the
Shareholders by identifying other shareholders or mailing communications, as
required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability, which is considered remote, is limited
to circumstances in which the Trust itself would be unable to meet its
obligations.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company ("State Street"), P.O. Box 351, Boston,
MA 02101, serves as custodian of the Trust's assets (the "Custodian"). Equity
Planning, 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, CT 06083-2200,
acts as Transfer Agent for the Trust (the "Transfer Agent"). As compensation,
Equity Planning receives a fee equivalent to $17.95 for each designated
shareholder account, plus out-of-pocket expenses. Transfer Agent fees are also
utilized to offset costs and fees paid to subtransfer agents employed by Equity
Planning. State Street Bank and Trust Company serves as a subtransfer agent
pursuant to a Subtransfer Agency Agreement.
REPORT TO SHAREHOLDERS
The fiscal year of the Trust ends on October 31. The Trust will send
financial statements to its shareholders at least semiannually. An Annual Report
containing financial statements audited by the Trust's independent accountants
will be sent to shareholders each year.
FINANCIAL STATEMENTS
The Fund's audited Financial Statements for the fiscal year ended October 31,
1998, appearing in the Fund's 1998 Annual Report to Shareholders, and the Fund's
unaudited Financial Statements for the six months ended April 30, 1999,
appearing in the Fund's Semi-Annual Report dated April 30, 1999, are
incorporated herein by reference.
31
<PAGE>
APPENDIX
A-1 AND P-1 COMMERCIAL PAPER RATINGS
The Money Market Fund will only invest in commercial paper which at the date
of investment is rated A-l by Standard & Poor's Corporation or P-1 by Moody's
Investors Services, Inc., or, if not rated, is issued or guaranteed by companies
which at the date of investment have an outstanding debt issue rated AA or
higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
AAA--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
32
<PAGE>
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
33
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
COMMON STOCKS--89.0%
BANKS (MONEY CENTER)--1.0%
Morgan (J.P.) & Co., Inc...... 25,000 $ 3,368,750
BANKS (REGIONAL)--1.3%
First Tennessee National
Corp.......................... 40,000 1,725,000
Marshall & Ilsley Corp........ 40,000 2,800,000
------------
4,525,000
------------
BIOTECHNOLOGY--0.6%
Biogen, Inc.(b)............... 20,000 1,901,250
BROADCASTING (TELEVISION, RADIO & CABLE)--6.7%
Clear Channel Communications,
Inc.(b)....................... 190,000 13,205,000
Infinity Broadcasting Corp.
Class A(b).................... 125,000 3,460,937
Univision Communications, Inc.
Class A(b).................... 105,000 6,076,875
------------
22,742,812
------------
COMMUNICATIONS EQUIPMENT--5.6%
Ciena Corp.(b)................ 155,000 3,642,500
Com21, Inc.(b)................ 62,000 1,929,750
Tellabs, Inc.(b).............. 100,000 10,956,250
Terayon Communication Systems,
Inc.(b)....................... 65,000 2,624,375
------------
19,152,875
------------
COMPUTERS (NETWORKING)--2.5%
Ascend Communications,
Inc.(b)....................... 85,000 8,213,125
Extreme Networks, Inc.(b)..... 4,000 221,750
------------
8,434,875
------------
COMPUTERS (PERIPHERALS)--1.8%
EMC Corp.(b).................. 35,000 3,812,812
Network Appliance, Inc. (b)... 45,000 2,264,062
------------
6,076,874
------------
COMPUTERS (SOFTWARE & SERVICES)--16.1%
America Online, Inc.(b)....... 130,000 18,557,500
At Home Corp. Series A(b)..... 40,000 5,757,500
BMC Software, Inc.(b)......... 175,000 7,535,937
Citrix Systems, Inc.(b)....... 80,000 3,402,500
Compuware Corp.(b)............ 130,000 3,168,750
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--CONTINUED
Launch Media, Inc.(b)......... 9,400 $ 237,350
Legato Systems, Inc.(b)....... 50,000 2,021,875
Marimba, Inc.(b).............. 4,700 285,525
Mastech Corp.(b).............. 150,000 2,203,125
New Era of Networks,
Inc.(b)....................... 100,000 3,756,250
Proxicom, Inc.(b)............. 18,800 421,825
Sapient Corp.(b).............. 90,000 5,647,500
VERITAS Software Corp.(b)..... 25,000 1,775,000
------------
54,770,637
------------
CONSUMER FINANCE--1.4%
Countrywide Credit Industries,
Inc........................... 103,000 4,667,187
DISTRIBUTORS (FOOD & HEALTH)--0.7%
Cardinal Health, Inc.......... 37,500 2,242,969
ELECTRICAL EQUIPMENT--3.2%
Jabil Circuit, Inc.(b)........ 120,000 5,587,500
Sanmina Corp.(b).............. 80,000 5,310,000
------------
10,897,500
------------
ELECTRONICS (SEMICONDUCTORS)--7.0%
Micrel, Inc.(b)............... 60,000 3,532,500
Texas Instruments, Inc........ 35,000 3,574,375
Uniphase Corp.(b)............. 50,000 6,068,750
Vitesse Semiconductor
Corp.(b)...................... 70,000 3,241,875
Xilinx, Inc.(b)............... 160,000 7,300,000
------------
23,717,500
------------
EQUIPMENT (SEMICONDUCTOR)--1.9%
Applied Materials, Inc.(b).... 60,000 3,217,500
Teradyne, Inc.(b)............. 70,000 3,303,125
------------
6,520,625
------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.3%
Mirage Resorts, Inc.(b)....... 190,000 4,263,125
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.5%
Forest Laboratories, Inc.
Class A(b).................... 35,000 1,557,500
HEALTH CARE (GENERIC AND OTHER)--0.8%
Mylan Laboratories, Inc....... 125,000 2,835,937
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.8%
Guidant Corp.(b).............. 50,000 $ 2,684,375
INVESTMENT BANKING/BROKERAGE--3.2%
Donaldson, Lufkin & Jenrette,
Inc........................... 65,000 4,545,938
Lehman Brothers Holdings,
Inc........................... 55,000 3,055,938
Paine Webber Group, Inc....... 70,000 3,285,625
------------
10,887,501
------------
INVESTMENT MANAGEMENT--0.9%
Price (T. Rowe) Associates,
Inc........................... 80,000 3,015,000
MANUFACTURING (DIVERSIFIED)--4.5%
AlliedSignal, Inc............. 85,000 4,993,750
Tyco International Ltd........ 65,000 5,281,250
United Technologies Corp...... 35,000 5,070,625
------------
15,345,625
------------
OIL & GAS (DRILLING & EQUIPMENT)--1.4%
Baker Hughes, Inc............. 115,000 3,435,625
Transocean Offshore, Inc...... 50,000 1,484,375
------------
4,920,000
------------
OIL & GAS (REFINING & MARKETING)--0.3%
Sunoco, Inc................... 30,000 1,072,500
RAILROADS--1.4%
Kansas City Southern
Industries, Inc............... 80,000 4,765,000
RETAIL (BUILDING SUPPLIES)--0.5%
Lowe's Companies, Inc......... 32,000 1,688,000
RETAIL (DISCOUNTERS)--1.3%
Consolidated Stores
Corp.(b)...................... 125,000 4,296,875
RETAIL (GENERAL MERCHANDISE)--0.7%
Kmart Corp.(b)................ 150,000 2,231,250
RETAIL (SPECIALTY)--1.8%
Bed, Bath & Beyond, Inc.(b)... 130,000 4,639,375
Staples, Inc.(b).............. 52,500 1,575,000
------------
6,214,375
------------
SAVINGS & LOAN COMPANIES--2.1%
Charter One Financial, Inc.... 90,000 2,812,500
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
SAVINGS & LOAN COMPANIES--CONTINUED
Golden State Bancorp,
Inc.(b)....................... 180,000 $ 4,421,250
------------
7,233,750
------------
SERVICES (ADVERTISING/MARKETING)--1.0%
Interpublic Group of
Companies, Inc. (The)......... 45,000 3,490,313
SERVICES (COMMERCIAL & CONSUMER)--5.6%
Cendant Corp.(b).............. 925,000 16,650,000
Corporate Executive Board Co.
(The)(b)...................... 80,000 2,250,000
------------
18,900,000
------------
SERVICES (COMPUTER SYSTEMS)--0.8%
Whittman-Hart, Inc.(b)........ 100,000 2,825,000
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.1%
Sprint Corp................... 85,000 3,601,875
TELECOMMUNICATIONS (LONG DISTANCE)--8.6%
Global Crossing Holdings
Ltd.(b)....................... 60,000 3,240,000
MCI WorldCom, Inc.(b)......... 100,000 8,218,750
McLeodUSA, Inc. Class A(b).... 20,000 1,121,250
Qwest Communications
International, Inc.(b)........ 145,000 12,388,438
WinStar Communications,
Inc.(b)....................... 85,000 4,133,125
------------
29,101,563
------------
TELEPHONE--0.6%
Frontier Corp................. 35,000 1,931,563
- - - -------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $202,090,678) 301,879,981
- - - -------------------------------------------------------------------
UNIT INVESTMENT TRUSTS--2.2%
AMEX Basic Industries Select
Sector Depository Receipts.... 270,000 7,323,750
- - - -------------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $6,937,245) 7,323,750
- - - -------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--91.2%
(IDENTIFIED COST $209,027,923) 309,203,731
- - - -------------------------------------------------------------------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- --------- ------------
SHORT-TERM OBLIGATIONS--8.1%
<S> <C> <C> <C>
COMMERCIAL PAPER--8.1%
Corporate Asset Funding Corp.
4.92%, 5/3/99................. A-1+ $ 760 $ 759,793
Enterprise Funding Corp.
4.95%, 5/3/99................. A-1+ 650 649,821
Pitney Bowes Credit Corp.
5.05%, 5/3/99................. A-1+ 3,115 3,114,126
Merrill Lynch & Co., Inc.
4.85%, 5/4/99................. A-1+ 5,000 4,997,979
Receivables Capital Corp.
4.80%, 5/4/99................. A-1+ 10,312 10,307,875
Ford Motor Credit Co. 4.82%,
5/6/99........................ A-1+ 6,985 6,980,324
Lexington Parker Capital Co.
LLC 4.82%, 5/20/99............ A-1 800 797,965
------------
27,607,883
------------
- - - --------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $27,607,883) 27,607,883
- - - --------------------------------------------------------------------
</TABLE>
TOTAL INVESTMENTS--99.3%
(IDENTIFIED COST $236,635,806) 336,811,614(a)
Cash and receivables, less liabilities--0.7% 2,319,738
------------
NET ASSETS--100.0% $339,131,352
------------
------------
(a) Federal Income Tax Information: Net unrealized appreciation securities is
comprised of gross appreciation of $106,745,361 and gross depreciation of
$6,569,553 for federal income tax purposes. At April 30, 1999, the
aggregate cost of securities for federal income tax purposes was
$236,635,806.
(b) Non-income producing.
See Notes to Financial Statements
5
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $236,635,806) $ 336,811,614
Short-term investments held as collateral for loaned
securities 15,329,804
Cash 4,411
Receivables
Investment securities sold 7,084,154
Fund shares sold 4,451,920
Dividends 4,725
Prepaid expenses 6,400
--------------
Total assets 363,693,028
--------------
LIABILITIES
Payables
Collateral on securities loaned 15,329,804
Investment securities purchased 8,443,030
Fund shares repurchased 313,356
Investment advisory fee 197,230
Distribution fee 83,086
Transfer agent fee 76,530
Financial agent fee 14,869
Trustees' fee 7,586
Accrued expenses 96,185
--------------
Total liabilities 24,561,676
--------------
NET ASSETS $ 339,131,352
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 207,110,611
Undistributed net investment loss (790,826)
Accumulated net realized gain 32,635,759
Net unrealized appreciation 100,175,808
--------------
NET ASSETS $ 339,131,352
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $318,250,985) 15,529,794
Net asset value per share $20.49
Offering price per share $20.49/(1-4.75%) $21.51
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $20,880,367) 1,064,774
Net asset value and offering price per share $19.61
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 602,170
Dividends 394,835
Security lending 93,020
--------------
Total investment income 1,090,025
--------------
EXPENSES
Investment advisory fee 1,058,038
Distribution fee, Class A 355,511
Distribution fee, Class B 89,440
Financial agent fee 110,184
Transfer agent 165,222
Printing 50,411
Custodian 18,687
Professional 16,295
Registration 15,333
Trustees 7,554
Miscellaneous 4,521
--------------
Total expenses 1,891,196
Custodian fees paid indirectly (10,345)
--------------
Net expenses 1,880,851
--------------
NET INVESTMENT LOSS (790,826)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 39,159,938
Net change in unrealized appreciation (depreciation) on
investments 75,911,604
--------------
NET GAIN ON INVESTMENTS 115,071,542
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 114,280,716
--------------
--------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
10/31/98 Year Ended
(Unaudited) 10/31/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (790,826) $ (572,877)
Net realized gain (loss) 39,159,938 (6,139,764)
Net change in unrealized appreciation
(depreciation) 75,911,604 9,270,385
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 114,280,716 2,557,744
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A -- (48,960,572)
Net realized gains, Class B -- (2,784,524)
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)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,711,776 and 2,468,365 shares,
respectively) 52,468,490 36,742,199
Net asset value of shares issued from
reinvestment of distributions
(0 and 3,397,433 shares,
respectively) -- 45,837,639
Cost of shares repurchased (3,374,871
and 3,976,755 shares, respectively) (64,021,516) (59,756,494)
------------- -------------
Total (11,553,026) 22,823,344
------------- -------------
CLASS B
Proceeds from sales of shares (228,412
and 561,461 shares, respectively) 4,262,571 8,094,162
Net asset value of shares issued from
reinvestment of distributions
(0 and 194,011 shares, respectively) -- 2,530,269
Cost of shares repurchased (237,940
and 493,541 shares, respectively) (4,165,419) (7,177,346)
------------- -------------
Total 97,152 3,447,085
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (11,455,874) 26,270,429
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 102,824,842 (23,307,015)
NET ASSETS
Beginning of period 236,306,510 259,613,525
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($790,826) AND $0, RESPECTIVELY] $ 339,131,352 $ 236,306,510
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 --------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $13.72 $ 17.20 $ 16.84 $ 16.51 $ 13.33 $ 14.56
INCOME FROM INVESTMENT
OPERATIONS(5)
Net investment income (loss) (0.04)(4) (0.03) (0.08)(4) (0.13)(4) 0.06(4) 0.27
Net realized and unrealized gain
(loss) 6.81 0.04 2.95 2.64 4.21 (0.21)
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 6.77 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 6.77 (3.48) 0.36 0.33 3.18 (1.23)
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $20.49 $ 13.72 $ 17.20 $ 16.84 $ 16.51 $ 13.33
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 49.34%(3) 0.38% 19.67% 17.43% 35.14% 0.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $318,251 $222,149 $246,002 $233,488 $180,288 $140,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.20%(2)(6) 1.21% 1.20% 1.20% 1.29% 1.26%
Net investment income (loss) (0.48)%(2) (0.18)% (0.53)% (0.81)% 0.43% 1.97%
Portfolio turnover 82%(3) 176% 518% 401% 331% 306%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ---------------------------------------------------- 7/21/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $13.18 $ 16.76 $ 16.57 $ 16.38 $ 13.31 $ 13.09
INCOME FROM INVESTMENT
OPERATIONS(5)
Net investment income (loss) (0.11)(4) (0.12) (0.20)(4) (0.25)(4) (0.12)(4) 0.02
Net realized and unrealized gain
(loss) 6.54 0.03 2.90 2.60 4.26 0.20
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 6.43 (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 6.43 (3.58) 0.19 0.19 3.07 0.22
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $19.61 $ 13.18 $ 16.76 $ 16.57 $ 16.38 $ 13.31
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 48.79%(3) (0.28)% 18.70% 16.52% 34.15% 1.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $20,880 $14,157 $13,611 $10,466 $2,393 $330
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.95%(2)(6) 1.96% 1.96% 1.95% 2.04% 1.81%(2)
Net investment income (loss) (1.22)%(2) (0.93)% (1.28)% (1.57)% (0.83)% 1.45%(2)
Portfolio turnover 82%(3) 176% 518% 401% 331% 306%(3)
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(6) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratios would be 1.21% and 1.96%
for Class A and Class B, respectively.
8 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--6.2%
U.S. TREASURY BONDS--0.5%
U.S. Treasury Bonds 5.25%,
11/15/28...................... AAA $ 9,000 $ 8,322,235
U.S. TREASURY NOTES--5.7%
U.S. Treasury Notes 4.50%,
9/30/00....................... AAA 64,650 64,169,249
U.S. Treasury Notes 5.25%,
8/15/03....................... AAA 21,836 21,820,429
U.S. Treasury Notes 4.25%,
11/15/03...................... AAA 10,250 9,838,597
------------
95,828,275
------------
- - - ----------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $106,736,776) 104,150,510
- - - ----------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--3.9%
GNMA 6.50%, '23-'28........... AAA 64,527 64,532,090
- - - ----------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $62,873,326) 64,532,090
- - - ----------------------------------------------------------------------
MUNICIPAL BONDS--7.5%
CALIFORNIA--2.5%
Fresno County Pension
Obligation Taxable 6.21%,
8/15/06....................... AAA 3,645 3,622,219
Kern County Pension Obligation
Revenue Taxable 7.26%,
8/15/14....................... AAA 6,830 7,239,800
Long Beach Pension Obligation
Taxable 6.87%, 9/1/06......... AAA 2,865 2,958,112
Los Angeles County Public
Works Lease Revenue PJ V-B
5.125%, 12/1/29............... AAA 5,340 5,319,975
Orange County Pension
Obligation Revenue Taxable
Series A 7.62%, 9/1/08........ AAA 9,085 9,879,937
San Bernardino County Pension
Obligation Revenue Taxable
6.87%, 8/1/08................. AAA 1,530 1,583,550
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
San Bernardino County Pension
Obligation Revenue Taxable
6.94%, 8/1/09................. AAA $ 4,170 $ 4,336,800
Sonoma County Pension
Obligation Revenue Taxable
6.625%, 6/1/13................ AAA 3,665 3,678,744
Ventura County Pension Taxable
6.58%, 11/1/06................ AAA 3,560 3,617,850
------------
42,236,987
------------
FLORIDA--1.0%
Miami Beach Special Obligation
Revenue Taxable 8.60%,
9/1/21........................ AAA 11,675 12,973,844
Tampa Solid Waste System
Revenue Taxable Series A
6.23%, 10/1/05................ Aaa(d) 1,970 1,972,462
University of Miami
Exchangeable Revenue Taxable
Series A 7.65%, 4/1/20........ AAA 2,120 2,212,750
------------
17,159,056
------------
MASSACHUSETTS--0.4%
Massachusetts State Port
Authority Revenue Taxable
Series C 6.05%, 7/1/02........ AA- 3,340 3,360,875
Massachusetts State Water
Resources Authority Revenue
Series D 5%, 8/1/24........... AAA 2,750 2,660,625
------------
6,021,500
------------
NEW YORK--1.1%
Long Island Power Authority
Electrical Systems Revenue
Series A 5.50%, 12/1/10....... AAA 3,850 4,191,687
Metropolitan Transportation
Authority Series A 5%,
4/1/23........................ AAA 4,575 4,489,219
New York State Taxable Series
C 6.35%, 3/1/07............... AAA 9,290 9,290,000
------------
17,970,906
------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
PENNSYLVANIA--1.0%
Philadelphia Authority For
Industrial Development Pension
Funding Retirement Systems
Revenue Taxable Series A
5.79%, 4/15/09................ AAA $ 8,500 $ 8,117,500
Pittsburgh Pension Obligation
Taxable Series C 6.50%,
3/1/17........................ AAA 9,245 9,013,875
------------
17,131,375
------------
TEXAS--1.3%
Dallas Civic Center Revenue
5.25%, 8/15/08................ AAA 2,340 2,492,100
Dallas-Fort Worth
International Airport Revenue
Taxable 6.50%, 11/1/09........ AAA 1,900 1,914,250
Dallas-Fort Worth
International Airport Revenue
Taxable 6.60%, 11/1/12........ AAA 5,750 5,778,750
Houston Water & Sewer System
Revenue Refunding, Jr. Lien,
Series D 5%, 12/1/25.......... AAA 4,975 4,813,313
Texas State General Obligation
Series B 5.25%, 10/1/08....... AA 1,715 1,837,194
Texas State Taxable Veterans
Limited Series B 6.10%,
12/1/03....................... AA 3,995 4,014,975
------------
20,850,582
------------
VIRGINIA--0.2%
Newport News General
Obligation Taxable Series B
7.05%, 1/15/25................ AA 3,250 3,233,750
- - - ----------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $123,380,509) 124,604,156
- - - ----------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.6%
AESOP Funding II LLC 97-1, A2
144A 6.40%, 10/20/03(c)....... Aaa(d) 9,250 9,418,973
Associates Manufactured
Housing Pass Through 97-2, A6
7.075%, 3/15/28............... AAA 3,000 3,029,531
Capita Equipment Receivables
Trust 97-1, B 6.45%,
8/15/02....................... A+ 5,020 5,033,454
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
Case Equipment Loan Trust
98-A, A4, 5.83%, 2/15/05...... AAA $ 11,600 $ 11,534,692
Copelco Capital Funding Corp.
99-A, A4 5.80%, 4/15/03....... Aaa(d) 5,000 5,002,344
Fleetwood Credit Corp. Grantor
Trust 96-B, A 6.90%,
3/15/12....................... AAA 1,919 1,933,404
Green Tree Financial Corp.
96-2, M1 7.60%, 4/15/27....... AA- 9,250 9,614,687
Premier Auto Trust 98-3, B
6.14%, 9/8/04................. A+ 4,000 4,050,273
Triangle Funding Ltd. 98-2A, 3
144A 6.85%, 10/15/04(c)(e).... BBB 8,000 7,965,000
Wachovia Credit Card Master
Trust 99-1, A 5.081%,
8/15/06....................... AAA 3,000 2,999,063
- - - ----------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $60,100,708) 60,581,421
- - - ----------------------------------------------------------------------
CORPORATE BONDS--5.0%
AUTO PARTS & EQUIPMENT--0.3%
Federal-Mogul Corp. 7.50%,
144A 01/15/09(c).............. BB+ 5,725 5,610,500
BANKS (MAJOR REGIONAL)--0.3%
U.S. Bank of Minnesota N.A.
6.30%, 7/15/08................ A 3,000 2,970,000
Wachovia Corp. 5.625%,
12/15/08...................... A+ 3,000 2,838,750
------------
5,808,750
------------
BROADCASTING (TELEVISION, RADIO & CABLE)--0.3%
CSC Holdings, Inc. 7.25%,
7/15/08....................... BB+ 4,565 4,633,475
COMPUTERS (SOFTWARE & SERVICES)--0.2%
Computer Associates
International, Inc. Series B
6.375%, 4/15/05............... A- 3,270 3,175,988
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--0.5%
Harrahs Operating Co., Inc.
7.875%, 12/15/05.............. BB+ 4,695 4,753,688
</TABLE>
10 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--CONTINUED
Station Casinos, Inc. 10.125%,
3/15/06....................... B+ $ 3,000 $ 3,202,500
------------
7,956,188
------------
HEALTH CARE (HOSPITAL MANAGEMENT)--0.3%
Tenet Healthcare Corp. 8%,
1/15/05....................... BB+ 5,225 5,198,875
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.3%
Boston Scientific Corp.
6.625%, 3/15/05............... BBB 4,525 4,417,531
INSURANCE (MULTI-LINE)--0.1%
Willis Corroon Corp. 144A 9%,
2/1/09(c)..................... B+ 1,840 1,872,200
LEISURE TIME (PRODUCTS)--0.2%
Bally Total Fitness Holding
Corp. 144A 9.875%,
10/15/07(c)................... B- 2,900 2,976,125
MANUFACTURING (DIVERSIFIED)--0.4%
Tyco International Group SA
6.375%, 6/15/05............... A- 6,700 6,741,875
PAPER & FOREST PRODUCTS--0.2%
Buckeye Technologies, Inc.
9.25%, 9/15/08................ BB- 3,765 3,995,606
PERSONAL CARE--0.1%
Revlon Consumer Products Corp.
9%, 11/1/06................... B 2,500 2,556,250
PUBLISHING--0.1%
Charter Communications
Holdings LLC 144A 8.625%,
4/1/09(c)..................... B+ 2,000 2,055,000
RETAIL (FOOD CHAINS)--0.1%
Meyer (Fred), Inc. 7.45%,
3/1/08........................ BB+ 1,625 1,706,250
SERVICES (COMMERCIAL & CONSUMER)--0.2%
United Rentals, Inc. Series B
9.50%, 6/1/08................. BB- 1,295 1,327,375
United Rentals, Inc. 8.80%,
8/15/08....................... BB- 1,570 1,550,375
------------
2,877,750
------------
SERVICES (RENTALS)--0.2%
Budget Group, Inc. 144A
9.125%, 4/1/06(c)............. BB- 2,750 2,743,125
TELECOMMUNICATIONS (LONG DISTANCE)--0.4%
Nextlink Communications, Inc.
144A 10.75%, 11/15/08(c)...... B 2,000 2,155,000
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--CONTINUED
Qwest Communications
International, Inc. 144A
7.50%, 11/1/08(c)............. BB+ $ 4,660 $ 4,893,000
------------
7,048,000
------------
TELEPHONE--0.2%
Century Telephone Enterprises,
Inc. Series F 6.30%,
1/15/08....................... BBB+ 3,000 2,962,500
TEXTILES (HOME FURNISHINGS)--0.3%
WestPoint Stevens, Inc.
7.875%, 6/15/05............... BB 4,725 4,866,750
TRUCKERS--0.2%
Teekay Shipping Corp. 8.32%,
2/1/08........................ BB+ 2,640 2,620,200
TRUCKS & PARTS--0.1%
Cummins Engine Co., Inc.
6.45%, 3/1/05................. BBB+ 2,060 2,011,075
- - - ----------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $82,823,764) 83,834,013
- - - ----------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--8.0%
CS First Boston Mortgage
Securities Corp. 97-C2, A3
6.55%, 11/17/07............... AAA 9,800 9,812,250
CS First Boston Mortgage
Securities Corp. 97-C2, B
6.72%, 11/17/07............... Aa(d) 9,000 9,016,875
CS First Boston Mortgage
Securities Corp. 97-SPCE, D
144A 7.332%, 4/20/08(c)....... BBB 4,039 3,948,122
CS First Boston Mortgage
Securities Corp. 98-C1, A1B
6.48%, 5/17/08................ AAA 10,000 9,948,438
CS First Boston Mortgage
Securities Corp. 95-AEW1, B
7.182%, 11/25/27.............. AA- 4,552 4,547,842
DLJ Mortgage Acceptance Corp.
96-CF1, A1B 144A 7.58%,
2/12/06(c).................... AAA 6,550 6,809,953
First Union-Lehman Brothers
Commercial Mortgage 97-C1, B
7.43%, 4/18/07................ Aa(d) 11,807 12,435,491
G.E. Capital Mortgage
Services, Inc. 96-8, 1M 7.25%,
5/25/26....................... AA 5,282 5,380,995
</TABLE>
See Notes to Financial Statements 11
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
GMAC Commercial Mortgage
Securities, Inc. 97-C2, B,
6.703%, 12/15/07.............. Aa(d) $ 5,000 $ 4,985,050
Lehman Brothers Commercial
Conduit Mortgage Trust 98-C4,
A1B 6.21%, 10/15/08........... AAA(d) 10,545 10,429,608
Lehman Large Loan 97-LLI, B
6.95%, 3/12/07................ AA 10,825 11,118,611
Nationslink Funding Corp.
96-1, B 7.69%, 12/20/05....... AA 6,157 6,482,147
Prudential Home Mortgage
Securities 93-L, 2B3 144A
6.641%, 12/25/23(c)........... A(d) 5,000 4,937,500
Residential Asset
Securitization Trust 96-A8, A1
8%, 12/25/26.................. AAA 156 156,120
Residential Funding Mortgage
Securities I 96-S8, A4 6.75%,
3/25/11....................... AAA 1,950 1,958,709
Residential Funding Mortgage
Securities I 96-S1, A11 7.10%,
1/25/26....................... AAA 6,600 6,703,125
Residential Funding Mortgage
Securities I 96-S4, M1 7.25%,
2/25/26....................... AA 5,805 5,829,031
Securitized Asset Sales, Inc.
93-J, 2B 6.808%, 11/28/23..... AA(d) 9,980 9,875,777
Structured Asset Securities
Corp. 93-C1, B 6.60%,
10/25/24...................... A+ 4,550 4,530,802
Structured Asset Securities
Corp. 95-C4, B 7%, 6/25/26.... AA 5,000 5,010,596
- - - ----------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $132,680,109) 133,917,042
- - - ----------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--2.4%
COLOMBIA--0.6%
Republic of Colombia 144A
7.70%, 7/14/03(c)............. NR 9,140 8,317,400
Republic of Colombia 7.25%,
2/23/04....................... BBB- 1,750 1,592,500
------------
9,909,900
------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- --------- ------------
<S> <C> <C> <C>
CROATIA--0.5%
Croatia Series B 5.813%,
7/31/06(e).................... BBB- $ 4,625 $ 3,792,254
Croatia Series A 5.813%,
7/31/10(e).................... BBB- 5,805 4,542,413
------------
8,334,667
------------
POLAND--0.9%
Poland Bearer PDI 5%,
10/27/14(e)................... BBB- 15,430 14,301,681
URUGUAY--0.4%
Republic of Uruguay 7.25%,
5/4/09........................ BBB- 6,900 6,798,570
- - - ----------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $40,193,673) 39,344,818
- - - ----------------------------------------------------------------------
FOREIGN CORPORATE BONDS--1.9%
ARGENTINA--0.2%
Compania de
Radiocomunicaciones Moviles SA
144A 9.25%, 5/8/08(c)......... BBB- 2,200 2,123,000
Telefonica de Argentina 144A
9.125%, 5/7/08(c)............. BBB- 1,750 1,693,125
------------
3,816,125
------------
BAHAMAS--0.2%
Sun International Hotels Ltd.
8.625%, 12/15/07.............. B+ 3,000 3,120,000
CANADA--0.3%
Imax Corp. 7.875%, 12/1/05.... BB- 5,295 5,281,762
CHILE--0.2%
Compania Sud Americana de
Vapores 144A 7.375%,
12/8/03(c).................... BBB 2,000 1,900,000
Petropower I Funding Trust
144A 7.36%, 2/15/14(c)........ BBB 2,545 2,366,476
------------
4,266,476
------------
JAPAN--0.8%
IBJ Preferred Capital Co. LLC
144A 8.79%, 12/29/49(c)(e).... Baa(d) 6,800 6,071,387
SB Treasury Co. LLC Series A
144A 9.40%, 12/29/49(c)(e).... BB+ 6,800 6,820,883
------------
12,892,270
------------
POLAND--0.2%
TPSA Finance BV 144A 7.75%,
12/10/08(c)................... BBB- 3,095 3,125,950
- - - ----------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $33,369,586) 32,502,583
- - - ----------------------------------------------------------------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
PREFERRED STOCKS--0.6%
<S> <C> <C> <C>
REITS--0.6%
Home Ownership Funding 2,
Step-down Pfd. 144A
13.338%(c).................... 10,000 $ 9,151,940
- - - -------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $8,786,965) 9,151,940
- - - -------------------------------------------------------------------
COMMON STOCKS--57.6%
BANKS (MAJOR REGIONAL)--2.3%
Mellon Bank Corp.............. 108,300 8,048,044
Wells Fargo Co................ 702,400 30,334,900
------------
38,382,944
------------
BANKS (MONEY CENTER)--1.7%
Bank of America Corp.......... 392,340 28,248,480
BEVERAGES (NON-ALCOHOLIC)--1.6%
PepsiCo, Inc.................. 720,500 26,613,469
BIOTECHNOLOGY--0.4%
Genzyme Corp. (b)............. 166,600 6,289,150
BROADCASTING (TELEVISION, RADIO & CABLE)--3.5%
AT&T Corp.- Liberty Media
Group Class A(b).............. 493,900 31,547,862
CBS Corp.(b).................. 215,700 9,827,831
Chancellor Media Corp.(b)..... 180,500 9,904,937
Clear Channel Communications,
Inc.(b)....................... 99,800 6,936,100
------------
58,216,730
------------
COMMUNICATIONS EQUIPMENT--1.4%
General Motors Corp. Class
H............................. 99,000 5,482,125
Motorola, Inc................. 60,000 4,807,500
Tellabs, Inc.(b).............. 119,500 13,092,719
------------
23,382,344
------------
COMPUTERS (HARDWARE)--4.7%
Dell Computer Corp.(b)........ 377,700 15,556,519
International Business
Machines Corp................. 194,900 40,770,644
Sun Microsystems, Inc.(b)..... 373,000 22,310,062
------------
78,637,225
------------
COMPUTERS (NETWORKING)--1.9%
Cisco Systems, Inc.(b)........ 273,837 31,234,533
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--4.2%
America Online, Inc.(b)....... 126,800 $ 18,100,700
Microsoft Corp.(b)............ 547,000 44,477,937
Novell, Inc.(b)............... 138,600 3,083,850
Yahoo!, Inc.(b)............... 30,400 5,310,500
------------
70,972,987
------------
CONSUMER FINANCE--1.2%
Capital One Financial Corp.... 115,500 20,060,906
DISTRIBUTORS (FOOD & HEALTH)--0.7%
Cardinal Health, Inc.......... 210,900 12,614,456
ELECTRICAL EQUIPMENT--1.7%
General Electric Co........... 277,300 29,255,150
ELECTRONICS (SEMICONDUCTORS)--1.9%
Intel Corp.................... 530,800 32,478,325
FINANCIAL (DIVERSIFIED)--3.9%
Citigroup, Inc................ 377,500 28,406,875
Freddie Mac................... 172,000 10,793,000
Morgan Stanley Dean Witter &
Co............................ 255,900 25,382,081
------------
64,581,956
------------
HEALTH CARE (DIVERSIFIED)--1.8%
American Home Products
Corp.......................... 158,400 9,662,400
Bristol-Myers Squibb Co....... 333,800 21,217,162
------------
30,879,562
------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--2.4%
Pfizer, Inc................... 187,400 21,562,712
Schering-Plough Corp.......... 369,300 17,841,806
------------
39,404,518
------------
HEALTH CARE (GENERIC AND OTHER)--0.3%
Mylan Laboratories, Inc....... 198,800 4,510,275
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.4%
Bard (C.R.), Inc.............. 100,000 4,900,000
Baxter International, Inc..... 210,500 13,261,500
Becton, Dickinson and Co...... 135,000 5,020,313
------------
23,181,813
------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.3%
Procter & Gamble Co. (The).... 225,700 $ 21,173,481
INSURANCE (LIFE/HEALTH)--0.3%
ReliaStar Financial Corp...... 120,600 4,432,050
INSURANCE (MULTI-LINE)--1.2%
American International Group,
Inc........................... 176,400 20,715,975
LODGING-HOTELS--0.6%
Carnival Corp................. 233,100 9,615,375
MANUFACTURING (DIVERSIFIED)--1.7%
Tyco International Ltd........ 351,300 28,543,125
OIL & GAS (DRILLING & EQUIPMENT)--0.8%
Halliburton Co................ 134,400 5,728,800
Schlumberger Ltd.............. 87,300 5,576,288
Transocean Offshore, Inc...... 100,000 2,968,750
------------
14,273,838
------------
OIL (INTERNATIONAL INTEGRATED)--0.7%
Conoco, Inc. Class A.......... 419,700 11,384,363
PERSONAL CARE--0.9%
Gillette Co. (The)............ 286,500 14,951,719
RETAIL (BUILDING SUPPLIES)--1.2%
Home Depot, Inc. (The)........ 327,000 19,599,563
RETAIL (COMPUTERS & ELECTRONICS)--0.4%
Tandy Corp.................... 100,900 7,308,944
RETAIL (DEPARTMENT STORES)--0.3%
Nordstrom, Inc................ 132,700 4,669,381
RETAIL (FOOD CHAINS)--1.7%
Meyer (Fred), Inc.(b)......... 380,890 20,615,671
Safeway, Inc.(b).............. 131,700 7,103,569
------------
27,719,240
------------
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
RETAIL (GENERAL MERCHANDISE)--1.4%
Wal-Mart Stores, Inc.......... 518,000 $ 23,828,000
RETAIL (SPECIALTY)--0.8%
Staples, Inc.(b).............. 466,275 13,988,250
SERVICES (COMMERCIAL & CONSUMER)--0.3%
ServiceMaster Co. (The)....... 246,600 4,685,400
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.9%
AirTouch Communications,
Inc.(b)....................... 160,000 14,940,000
TELECOMMUNICATIONS (LONG DISTANCE)--3.6%
AT&T Corp..................... 798,034 40,300,717
MCI WorldCom, Inc.(b)......... 253,399 20,826,266
------------
61,126,983
------------
TELEPHONE--0.9%
SBC Communications, Inc....... 262,300 14,688,800
WASTE MANAGEMENT--1.6%
Waste Management, Inc......... 473,100 26,730,150
- - - -------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $718,652,297) 963,319,460
- - - -------------------------------------------------------------------
FOREIGN COMMON STOCKS--2.3%
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.6%
Elan Corp. PLC Sponsored ADR
(Ireland)(b).................. 189,800 9,774,700
OIL (INTERNATIONAL INTEGRATED)--1.7%
BP Amoco PLC Sponsored ADR
(United Kingdom).............. 258,893 29,303,451
- - - -------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $33,717,741) 39,078,151
- - - -------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.0%
(IDENTIFIED COST $1,403,315,454) 1,655,016,184
- - - -------------------------------------------------------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- --------- ------------
SHORT-TERM OBLIGATIONS--0.8%
<S> <C> <C> <C>
COMMERCIAL PAPER--0.8%
Ciesco L.P. 4.93%, 5/3/99..... A-1+ $ 8,460 $ 8,457,683
General Electric Capital Corp.
4.75%, 5/6/99................. A-1+ 155 154,898
General Electric Capital Corp.
4.82%, 5/6/99................. A-1+ 2,630 2,628,239
Private Export Funding Corp.
4.80%, 6/16/99................ A-1+ 2,500 2,485,239
------------
13,726,059
------------
- - - ----------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $13,725,487) 13,726,059
- - - ----------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--99.8%
(IDENTIFIED COST $1,417,040,941) 1,668,742,243(a)
Cash and receivables, less liabilities--0.2% 2,536,097
----------------
NET ASSETS--100.0% $ 1,671,278,340
----------------
----------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $272,777,373 and gross
depreciation of $22,591,748 for federal income tax purposes. At April 30,
1999, the aggregate cost of securities for federal income tax purpose was
$1,418,556,618.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1999, these securities amounted to a value of $96,954,659 or 5.8% 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.
See Notes to Financial Statements
15
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $1,417,040,941) $1,668,742,243
Cash 21,859
Receivables
Interest and dividends 8,292,399
Investment securities sold 5,088,680
Fund shares sold 258,782
Prepaid expenses 38,087
--------------
Total assets 1,682,442,050
--------------
LIABILITIES
Payables
Investments securities purchased 7,899,304
Fund shares repurchased 1,324,250
Investment advisory fee 742,645
Transfer agent fee 501,433
Distribution fee 374,493
Financial agent fee 30,359
Trustees' fee 3,846
Accrued expenses 287,380
--------------
Total liabilities 11,163,710
--------------
NET ASSETS $1,671,278,340
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $1,314,432,582
Undistributed net investment income 4,154,057
Accumulated net realized gain 100,990,399
Net unrealized appreciation 251,701,302
--------------
NET ASSETS $1,671,278,340
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,633,385,187) 92,885,372
Net asset value per share $17.58
Offering price per share $17.58/(1-4.75%) $18.46
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $37,893,153) 2,161,165
Net asset value and offering price per share $17.53
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 21,421,627
Dividends 3,944,868
Security lending 127,569
Foreign taxes withheld (17,346)
-------------
Total investment income 25,476,718
-------------
EXPENSES
Investment advisory fee 4,413,358
Distribution fee, Class A 2,037,787
Distribution fee, Class B 179,677
Financial agent fee 224,014
Transfer agent 1,146,692
Printing 53,407
Custodian 48,345
Professional 25,970
Trustees 7,174
Miscellaneous 18,757
-------------
Total expenses 8,155,181
-------------
NET INVESTMENT INCOME 17,321,537
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 103,453,339
Net change in unrealized appreciation (depreciation) on
investments 86,909,508
-------------
NET GAIN ON INVESTMENTS 190,362,847
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 207,684,384
-------------
-------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/99 Year Ended
(Unaudited) 10/31/98
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 17,321,537 $ 40,274,583
Net realized gain (loss) 103,453,339 66,036,415
Net change in unrealized appreciation
(depreciation) 86,909,508 40,037,609
--------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 207,684,384 146,348,607
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (19,577,885) (38,891,099)
Net investment income, Class B (308,575) (547,088)
Net realized gains, Class A (59,145,470) (250,194,981)
Net realized gains, Class B (1,279,772) (4,587,560)
--------------- ---------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (80,311,702) (294,220,728)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,029,999 and 4,154,476 shares,
respectively) 35,158,133 68,017,312
Net asset value of shares issued from
reinvestment of distributions
(4,331,556 and 17,381,042 shares,
respectively) 72,847,163 266,854,723
Cost of shares repurchased (8,511,115
and 20,727,390 shares, respectively) (147,796,390) (343,685,337)
--------------- ---------------
Total (39,791,094) (8,813,302)
--------------- ---------------
CLASS B
Proceeds from sales of shares (230,425
and 375,257 shares, respectively) 3,988,419 6,251,773
Net asset value of shares issued from
reinvestment of distributions
(87,430 and 309,117 shares,
respectively) 1,466,660 4,734,129
Cost of shares repurchased (186,325
and 329,841 shares, respectively) (3,221,366) (5,437,703)
--------------- ---------------
Total 2,233,713 5,548,199
--------------- ---------------
DECREASE IN NET ASSETS FROM SHARE
TRANSACTIONS (37,557,381) (3,265,103)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS 89,815,301 (151,137,224)
NET ASSETS
Beginning of period 1,581,463,039 1,732,600,263
--------------- ---------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$4,154,057 AND $6,718,980,
RESPECTIVELY] $ 1,671,278,340 $ 1,581,463,039
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
PHOENIX-GOODWIN BALANCED FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 --------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.29 $ 18.07 $ 17.56 $ 17.04 $ 15.23 $ 16.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.18 0.42 0.48 0.48 0.52 0.48
Net realized and unrealized gain
(loss) 1.95 0.90 2.38 1.46 1.80 (1.01)
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.13 1.32 2.86 1.94 2.32 (0.53)
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.21) (0.40) (0.48) (0.49) (0.51) (0.49)
Dividends from net realized gains (0.63) (2.70) (1.87) (0.93) -- (0.39)
---------- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.84) (3.10) (2.35) (1.42) (0.51) (0.88)
---------- ----- ----- ----- ----- -----
Change in net asset value 1.29 (1.78) 0.51 0.52 1.81 (1.41)
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 17.58 $ 16.29 $ 18.07 $ 17.56 $ 17.04 $ 15.23
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 13.34%(3) 8.68% 18.04% 12.03% 15.52% (3.28)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $1,633,385 $1,548,475 $1,702,385 $1,897,306 $2,345,440 $2,601,808
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.96%(2) 0.97% 0.98% 1.01% 1.02% 0.96%
Net investment income 2.10%(2) 2.41% 2.65% 2.74% 3.27% 3.03%
Portfolio turnover 44%(3) 138% 206% 191% 197% 159%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ---------------------------------------------------- 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.25 $ 18.04 $ 17.54 $ 17.01 $ 15.23 $ 15.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.12 0.30 0.35 0.35 0.40 0.09
Net realized and unrealized gain
(loss) 1.94 0.90 2.37 1.47 1.80 (0.04)
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.06 1.20 2.72 1.82 2.20 0.05
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.15) (0.29) (0.35) (0.36) (0.42) (0.09)
Dividends from net realized gains (0.63) (2.70) (1.87) (0.93) -- --
---------- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.78) (2.99) (2.22) (1.29) (0.42) (0.09)
---------- ----- ----- ----- ----- -----
Change in net asset value 1.28 (1.79) 0.50 0.53 1.78 (0.04)
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 17.53 $ 16.25 $ 18.04 $ 17.54 $ 17.01 $ 15.23
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 12.92%(3) 7.91% 17.13% 11.24% 14.68% (0.34)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $37,893 $32,988 $30,216 $26,209 $16,971 $4,629
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.71%(2) 1.72% 1.73% 1.76% 1.78% 1.65%(2)
Net investment income 1.35%(2) 1.66% 1.90% 1.96% 2.46% 2.36%(2)
Portfolio turnover 44%(3) 138% 206% 191% 197% 159%(3)
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
18 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN GROWTH FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
COMMON STOCKS--93.3%
BANKS (MAJOR REGIONAL)--3.8%
Mellon Bank Corp........................ 306,500 $ 22,776,781
Wells Fargo Co.......................... 1,988,900 85,895,619
-------------
108,672,400
-------------
BROADCASTING (TELEVISION, RADIO & CABLE)--3.3%
AT&T Corp.- Liberty Media Group Class
A(b).................................... 739,200 47,216,400
CBS Corp.(b)............................ 608,500 27,724,781
Clear Channel Communications, Inc.(b)... 277,800 19,307,100
-------------
94,248,281
-------------
COMMUNICATIONS EQUIPMENT--3.3%
Lucent Technologies, Inc................ 980,000 58,922,500
Tellabs, Inc.(b)........................ 334,300 36,626,744
-------------
95,549,244
-------------
COMPUTERS (HARDWARE)--7.8%
Dell Computer Corp.(b).................. 1,073,300 44,206,544
International Business Machines Corp.... 551,800 115,429,662
Sun Microsystems, Inc.(b)............... 1,056,200 63,173,962
-------------
222,810,168
-------------
COMPUTERS (NETWORKING)--3.1%
Cisco Systems, Inc.(b).................. 778,100 88,752,031
COMPUTERS (PERIPHERALS)--1.8%
EMC Corp.(b)............................ 476,400 51,897,825
COMPUTERS (SOFTWARE & SERVICES)--7.9%
America Online, Inc.(b)................. 374,200 53,417,050
BMC Software, Inc.(b)................... 281,300 12,113,481
Compuware Corp.(b)...................... 761,300 18,556,687
Microsoft Corp.(b)...................... 1,544,800 125,611,550
Yahoo!, Inc.(b)......................... 85,600 14,953,250
-------------
224,652,018
-------------
CONSUMER FINANCE--2.0%
Capital One Financial Corp.............. 321,400 55,823,162
DISTRIBUTORS (FOOD & HEALTH)--1.2%
Cardinal Health, Inc.................... 588,750 35,214,609
ELECTRICAL EQUIPMENT--2.8%
General Electric Co..................... 758,100 79,979,550
ELECTRONICS (SEMICONDUCTORS)--5.2%
Intel Corp.............................. 1,508,400 92,295,225
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
ELECTRONICS (SEMICONDUCTORS)--CONTINUED
Texas Instruments, Inc.................. 555,000 $ 56,679,375
-------------
148,974,600
-------------
FINANCIAL (DIVERSIFIED)--6.9%
American Express Co..................... 108,000 14,114,250
Citigroup, Inc.......................... 1,059,050 79,693,512
Freddie Mac............................. 481,600 30,220,400
Morgan Stanley Dean Witter & Co......... 724,500 71,861,344
-------------
195,889,506
-------------
HEALTH CARE (DIVERSIFIED)--3.0%
American Home Products Corp............. 448,400 27,352,400
Bristol-Myers Squibb Co................. 941,500 59,844,094
-------------
87,196,494
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--6.6%
Merck & Co., Inc........................ 585,000 41,096,250
Pfizer, Inc............................. 841,000 96,767,562
Schering-Plough Corp.................... 1,065,200 51,462,475
-------------
189,326,287
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.3%
Guidant Corp.(b)........................ 159,300 8,552,419
Medtronic, Inc.......................... 810,000 58,269,375
-------------
66,821,794
-------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--2.1%
Procter & Gamble Co. (The).............. 638,100 59,861,756
INSURANCE (MULTI-LINE)--2.1%
American International Group, Inc....... 500,000 58,718,750
INVESTMENT BANKING/BROKERAGE--1.1%
Merrill Lynch & Co., Inc................ 390,000 32,735,625
LODGING-HOTELS--1.0%
Carnival Corp........................... 663,600 27,373,500
MANUFACTURING (DIVERSIFIED)--2.8%
Tyco International Ltd.................. 995,800 80,908,750
OIL & GAS (DRILLING & EQUIPMENT)--0.6%
Schlumberger Ltd........................ 251,700 16,077,338
PERSONAL CARE--1.5%
Gillette Co. (The)...................... 805,400 42,031,813
RESTAURANTS--1.0%
McDonald's Corp......................... 645,000 27,331,875
</TABLE>
See Notes to Financial Statements 19
<PAGE>
PHOENIX-GOODWIN GROWTH FUND
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
RETAIL (BUILDING SUPPLIES)--2.8%
Home Depot, Inc. (The).................. 891,000 $ 53,404,313
Lowe's Companies, Inc................... 505,000 26,638,750
-------------
80,043,063
-------------
RETAIL (DRUG STORES)--1.1%
Walgreen Co............................. 1,190,000 31,981,250
RETAIL (FOOD CHAINS)--2.7%
Meyer (Fred), Inc.(b)................... 1,079,780 58,443,093
Safeway, Inc.(b)........................ 372,200 20,075,538
-------------
78,518,631
-------------
RETAIL (GENERAL MERCHANDISE)--4.3%
Dayton Hudson Corp...................... 430,000 28,944,375
Wal-Mart Stores, Inc.................... 2,019,200 92,883,200
-------------
121,827,575
-------------
RETAIL (SPECIALTY)--1.3%
Staples, Inc.(b)........................ 1,274,400 38,232,000
SERVICES (ADVERTISING/MARKETING)--0.4%
Interpublic Group of Companies, Inc.
(The)................................... 159,400 12,363,463
TELECOMMUNICATIONS (LONG DISTANCE)--7.5%
AT&T Corp............................... 1,920,997 97,010,349
MCI WorldCom, Inc.(b)................... 1,416,535 116,421,470
-------------
213,431,819
-------------
- - - --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $2,053,222,381) 2,667,245,177
- - - --------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS --93.3%
(IDENTIFIED COST $2,053,222,381) 2,667,245,177
- - - --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- -----------
<S> <C> <C> <C>
MEDIUM-TERM NOTES--0.1%
Associates Corporation of North America
5.65%, 6/15/99.......................... AA- $ 2,000 2,001,216
- - - -----------------------------------------------------------------------------------
TOTAL MEDIUM-TERM NOTES
(IDENTIFIED COST $1,999,575) 2,001,216
- - - -----------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--6.9%
COMMERCIAL PAPER--4.3%
Ciesco L.P. 4.75%, 5/3/99............... A-1+ 25,000 24,993,403
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ----------- -------------
<S> <C> <C> <C>
COMMERCIAL PAPER--CONTINUED
Ciesco L.P. 4.93%, 5/3/99............... A-1+ $ 6,355 $ 6,353,259
Enterprise Funding Corp. 4.98%,
5/3/99.................................. A-1 350 349,903
Enterprise Funding Corp. 5.95%,
5/3/99.................................. A-1 350 349,904
Preferred Receivables Funding Corp.
4.82%, 5/3/99........................... A-1 4,020 4,018,924
Merrill Lynch & Co., Inc. 4.85%,
5/4/99.................................. A-1+ 5,000 4,997,979
Pitney Bowes Credit Corp. 4.72%,
5/5/99.................................. A-1 30,000 29,984,267
Ford Motor Credit Co. 4.83%, 5/6/99..... A-1 3,450 3,447,686
General Electric Capital Corp. 4.77%,
5/6/99.................................. A-1+ 4,390 4,387,092
Cargill, Inc. 4.85%, 5/7/99............. A-1+ 5,000 4,995,958
Enterprise Funding Corp. 4.82%,
5/11/99................................. A-1 4,860 4,853,493
Abbott Laboratories 4.75%, 5/18/99...... A-1+ 4,285 4,275,388
Albertson's. Inc. 4.77%, 5/18/99........ A-1 20,000 19,954,950
Donnelley (R.R.) & Sons Co. 4.79%,
5/24/99................................. A-1 10,000 9,969,397
-------------
122,931,603
-------------
FEDERAL AGENCY SECURITIES--2.6%
FHLB Discount Corp. 4.67%, 5/7/99.................... 31,500 31,475,482
FMC Discount Note 4.68%, 5/12/99..................... 20,000 19,971,400
FHLB Discount Corp. 4.67%, 5/14/99................... 11,071 11,052,330
FMC Discount Note 4.71%, 5/17/99..................... 5,950 5,937,545
FMC Discount Note 4.69%, 5/20/99..................... 6,472 6,455,980
-------------
74,892,737
-------------
- - - -----------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $197,824,340) 197,824,340
- - - -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--100.3%
(IDENTIFIED COST $2,253,046,296) 2,867,070,733(a)
Cash and receivables, less liabilities--(0.3%) (9,288,700)
----------------
NET ASSETS--100.0% $ 2,857,782,033
----------------
----------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $650,094,348 and gross
depreciation of $37,380,640 for federal income tax purposes. At April 30,
1999, the aggregate cost of securities for federal income tax purposes was
$2,254,357,025.
(b) Non-income producing.
20
See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $2,253,046,296) $2,867,070,733
Cash 4,410,044
Receivables
Dividends and interest 1,667,663
Fund shares sold 864,291
Prepaid expenses 62,236
--------------
Total assets 2,874,074,967
--------------
LIABILITIES
Payables
Investment securities purchased 6,769,681
Fund shares repurchased 6,089,984
Investment advisory fee 1,578,645
Transfer agent fee 681,143
Distribution fee 664,583
Financial agent fee 48,657
Trustees' fees 3,847
Accrued expenses 456,394
--------------
Total liabilities 16,292,934
--------------
NET ASSETS $2,857,782,033
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $1,896,217,135
Undistributed net investment loss (3,186,476)
Accumulated net realized gain 350,726,937
Net unrealized appreciation 614,024,437
--------------
NET ASSETS $2,857,782,033
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,762,808,183) 100,184,722
Net asset value per share $27.58
Offering price per share $27.58/(1-4.75%) $28.96
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $94,973,850) 3,542,005
Net asset value and offering price per share $26.81
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 10,522,884
Interest 1,561,531
Security lending 87,726
------------
Total investment income 12,172,141
------------
EXPENSES
Investment advisory fee 9,172,949
Distribution fee, Class A 3,401,552
Distribution fee, Class B 442,315
Financial agent fee 308,862
Transfer agent 1,655,614
Printing 206,382
Custodian 76,521
Registration 38,284
Professional 35,593
Trustees 8,297
Miscellaneous 13,881
------------
Total expenses 15,360,250
Custodian fees paid indirectly (1,633)
------------
Net expenses 15,358,617
------------
NET INVESTMENT LOSS (3,186,476)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 353,178,218
Net change in unrealized appreciation (depreciation) on
investments 166,963,458
------------
NET GAIN ON INVESTMENTS 520,141,676
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $516,955,200
------------
------------
</TABLE>
See Notes to Financial Statements 21
<PAGE>
PHOENIX-GOODWIN GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/99 Year Ended
(Unaudited) 10/31/98
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (3,186,476) $ (6,323,768)
Net realized gain (loss) 353,178,218 240,243,310
Net change in unrealized appreciation
(depreciation) 166,963,458 75,013,694
--------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 516,955,200 308,933,236
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (230,029,485) (489,479,916)
Net realized gains, Class B (7,477,186) (13,875,674)
--------------- ---------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (237,506,671) (503,355,590)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(4,794,252 and 15,305,754 shares,
respectively) 129,570,845 379,717,014
Net asset value of shares issued from
reinvestment of distributions
(8,345,619 and 20,640,114 shares,
respectively) 213,732,510 454,706,097
Cost of shares repurchased (10,513,207
and 28,881,261 shares, respectively) (286,106,484) (730,281,016)
--------------- ---------------
Total 57,196,871 104,142,095
--------------- ---------------
CLASS B
Proceeds from sales of shares (471,811
and 825,152 shares, respectively) 12,529,745 20,213,833
Net asset value of shares issued from
reinvestment of distributions
(276,169 and 585,412 shares,
respectively) 6,893,198 12,698,430
Cost of shares repurchased (322,597
and 766,812 shares, respectively) (8,563,275) (18,666,026)
--------------- ---------------
Total 10,859,668 14,246,237
--------------- ---------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 68,056,539 118,388,332
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS 347,505,068 (76,034,022)
NET ASSETS
Beginning of period 2,510,276,965 2,586,310,987
--------------- ---------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($3,186,476) AND $0, RESPECTIVELY] $ 2,857,782,033 $ 2,510,276,965
--------------- ---------------
--------------- ---------------
</TABLE>
22 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN GROWTH FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 ------------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 24.95 $ 27.83 $ 26.87 $ 24.92 $ 21.24 $ 21.53
INCOME FROM INVESTMENT
OPERATIONS(5)
Net investment income (loss) (0.03)(4) (0.06)(4) 0.14(4) 0.20(4) 0.26 0.26
Net realized and unrealized gain
(loss) 5.05 2.73 5.62 3.63 4.53 0.17
------------ ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 5.02 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 (2.39) (5.55) (4.59) (1.63) (0.81) (0.48)
------------ ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (2.39) (5.55) (4.80) (1.88) (1.11) (0.72)
------------ ----- ----- ----- ----- -----
Change in net asset value 2.63 (2.88) 0.96 1.95 3.68 (0.29)
------------ ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 27.58 $ 24.95 $ 27.83 $ 26.87 $ 24.92 $ 21.24
------------ ----- ----- ----- ----- -----
------------ ----- ----- ----- ----- -----
Total return(1) 20.86%(3) 12.26% 24.81% 16.34% 23.91% 2.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $2,762,808 $2,434,217 $2,518,289 $2,347,471 $2,300,251 $2,140,458
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.07%(2)(6) 1.08% 1.10% 1.17% 1.20% 1.19%
Net investment income (loss) (0.20)%(2) (0.22)% 0.53% 0.80% 0.92% 1.22%
Portfolio turnover 60%(3) 110% 196% 116% 109% 118%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ------------------------------------------------------- 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 24.40 $ 27.51 $ 26.63 $ 24.74 $ 21.19 $ 20.48
INCOME FROM INVESTMENT
OPERATIONS(5)
Net investment income (loss) (0.13)(4) (0.24)(4) (0.06)(4) --(4) --(4) 0.01
Net realized and unrealized gain
(loss) 4.93 2.68 5.57 3.61 4.60 0.70
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 4.80 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 (2.39) (5.55) (4.59) (1.63) (0.81) --
---------- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (2.39) (5.55) (4.63) (1.72) (1.05) --
---------- ----- ----- ----- ----- -----
Change in net asset value 2.41 (3.11) 0.88 1.89 3.55 0.71
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 26.81 $ 24.40 $ 27.51 $ 26.63 $ 24.74 $ 21.19
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 20.40%(3) 11.41% 23.89% 15.48% 23.02% 3.47%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $94,974 $76,060 $68,022 $45,326 $20,111 $2,966
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.82%(2)(6) 1.83% 1.85% 1.93% 1.97% 1.87%(2)
Net investment income (loss) (0.95)%(2) (0.97)% (0.25)% 0.01% 0.01% 0.32%(2)
Portfolio turnover 60%(3) 110% 196% 116% 109% 118%(3)
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the time of share purchases and redemptions.
(6) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets exclude the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
See Notes to Financial Statements
23
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
CORPORATE BONDS--65.1%
AUTO PARTS & EQUIPMENT--0.8%
Cambridge Industries, Inc. Series B
10.25%, 7/15/07......................... B $ 5,000 $ 4,350,000
BROADCASTING (TELEVISION, RADIO & CABLE)--7.5%
Adelphia Communications Corp. 144A
8.375%, 2/1/08(b)....................... B 4,150 4,274,500
CBS Radio, Inc. 11.375%, 1/15/09........ Ba 5,002 5,852,097
CSC Holdings, Inc. 7.625%, 7/15/18...... Ba 4,000 4,025,000
Century Communications Corp. Series B
0%, 1/15/08............................. Ba 9,000 4,320,000
Fox/Liberty Networks LLC 8.875%,
8/15/07................................. B 5,000 5,475,000
Poland Communications, Inc. Series B
9.875%, 11/1/03......................... B 12,200 11,544,250
United International Holdings, Inc.
Series B 0%, 2/15/08(d)................. B 8,000 5,380,000
------------
40,870,847
------------
BUILDING MATERIALS--1.3%
K.Hovnanian Enterprises, Inc. 9.125%,
5/1/09.................................. Ba 4,000 4,020,000
Nortek, Inc. Series B 9.125%, 9/1/07.... B 3,000 3,142,500
------------
7,162,500
------------
COMMUNICATIONS EQUIPMENT--5.2%
Metromedia Fiber Network, Inc. 144A 10%,
11/15/08(b)............................. B 3,880 4,209,800
Park N View, Inc. Series B 13%,
5/15/08................................. B 4,000 1,820,000
Rhythms NetConnections, Inc. 144A
12.75%, 4/15/09(b)...................... NR 1,500 1,500,000
Splitrock Services, Inc. Series B
11.75%, 7/15/08......................... NR 9,000 9,157,500
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
COMMUNICATIONS EQUIPMENT--CONTINUED
Stellex Industries, Inc. Series B 9.50%,
11/1/07................................. Caa $ 8,500 $ 7,756,250
TeleCorp PCS, Inc. 144A 0%,
4/15/09(b)(d)........................... B 7,000 3,955,000
------------
28,398,550
------------
COMPUTERS (SOFTWARE & SERVICES)--5.6%
Anacomp, Inc. Series B 10.875%, 4/1/04.. B 5,200 5,473,000
Anacomp, Inc. Series D 10.875%, 4/1/04.. B 7,000 7,367,500
ICG Holdings, Inc. 0%, 9/15/05(d)....... NR 9,200 8,395,000
PSINet, Inc. 11.50%, 11/1/08............ B 1,400 1,561,000
PSINet, Inc. Series B 10%, 2/15/05...... B 1,000 1,050,000
WAM!NET, Inc. Series B 0%, 3/1/05(d).... CCC+(c) 11,000 6,710,000
------------
30,556,500
------------
CONTAINERS & PACKAGING (PAPER)--0.6%
Packaging Corporation of America 144A
9.625%, 4/1/09(b)....................... B 3,000 3,127,500
CONTAINERS (METAL & GLASS)--1.3%
Portola Packaging, Inc. 10.75%,
10/1/05................................. B 7,000 7,297,500
ELECTRIC COMPANIES--1.0%
CalEnergy Co., Inc. 7.52%, 9/15/08...... Baa 5,000 5,275,000
ENTERTAINMENT--1.1%
SFX Entertainment, Inc. Series B 9.125%,
2/1/08.................................. B 2,500 2,593,750
SFX Entertainment, Inc. 144A 9.125%,
12/1/08(b).............................. B 3,500 3,631,250
------------
6,225,000
------------
FOODS--1.3%
Shoppers Food Warehouse 9.75%,
6/15/04................................. B 6,500 7,109,375
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--2.1%
Hollywood Casino Corp. 12.75%,
11/1/03................................. B 3,349 3,683,900
</TABLE>
24 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--CONTINUED
Isle of Capri Casinos, Inc. 144A 8.75%,
4/15/09(b).............................. B $ 3,250 $ 3,241,875
Majestic Star Casino LLC 12.75%,
5/15/03................................. B 4,000 4,495,000
------------
11,420,775
------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--1.6%
Global Health Sciences, Inc. 11%,
5/1/08.................................. Caa 6,900 4,416,000
Schein Pharmaceutical, Inc. 8.001%,
12/15/04(d)............................. B 4,800 4,488,000
------------
8,904,000
------------
HOMEBUILDING--0.5%
Beazer Homes USA, Inc. 9%, 3/1/04....... Ba 3,000 3,007,500
INSURANCE (MULTI-LINE)--0.7%
Willis Corroon Corp. 144A 9%,
2/1/09(b)............................... Ba 4,000 4,070,000
LEISURE TIME (PRODUCTS)--1.2%
Bally Total Fitness Holding Corp. 144A
9.875%, 10/15/07(b)..................... B 3,400 3,489,250
Bally Total Fitness Holding Corp. Series
B 9.875%, 10/15/07...................... B 3,300 3,386,625
------------
6,875,875
------------
MANUFACTURING (DIVERSIFIED)--0.7%
Polymer Group, Inc. Series B 8.75%,
3/1/08.................................. B 4,000 4,070,000
METALS MINING--0.1%
NSM Steel Ltd. Sr. 144A 12%, 2/1/06(b).. Caa 975 197,438
NSM Steel Ltd. Sub. 144A 12.25%,
2/1/08(b)(e)(f)......................... Ca 7,500 375,000
------------
572,438
------------
OIL & GAS (EXPLORATION & PRODUCTION)--3.2%
Bellwether Exploration Co. 10.875%,
4/1/07.................................. B 8,000 7,200,000
Benton Oil & Gas Co. 11.625%, 5/1/03.... B 9,800 6,566,000
Benton Oil & Gas Co. 9.375%, 11/1/07.... B 2,750 1,842,500
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
OIL & GAS (EXPLORATION & PRODUCTION)--CONTINUED
Lomak Petroleum, Inc. 8.75%, 1/15/07.... B $ 2,000 $ 1,680,000
------------
17,288,500
------------
OIL (DOMESTIC INTEGRATED)--1.0%
RBF Finance Co. 144A 11.375%,
3/15/09(b).............................. Ba 5,000 5,275,000
PAPER & FOREST PRODUCTS--1.4%
Buckeye Technologies, Inc. 8%,
10/15/10................................ Ba 7,365 7,475,475
PERSONAL CARE--1.4%
Revlon Consumer Products Corp. 9%,
11/1/06................................. B 3,000 3,067,500
Revlon Consumer Products Corp. 8.625%,
2/1/08.................................. B 4,650 4,475,625
------------
7,543,125
------------
PUBLISHING--1.6%
American Lawyer Media, Inc. Series B
9.75%, 12/15/07......................... B 3,250 3,388,125
Charter Communications Holdings LLC 144A
8.625%, 4/1/09(b)....................... B 5,000 5,137,500
------------
8,525,625
------------
RETAIL (HOME SHOPPING)--0.5%
U.S. Office Products Co. 9.75%,
6/15/08................................. Caa 3,800 2,641,000
RETAIL (SPECIALTY)--0.9%
Musicland Group, Inc. 9%, 6/15/03....... B 3,900 3,939,000
Musicland Group, Inc. Series B 9.875%,
3/15/08................................. B 1,000 1,017,500
------------
4,956,500
------------
SERVICES (ADVERTISING/MARKETING)--1.3%
Outdoor Communications, Inc. 9.25%,
8/15/07................................. B 6,500 6,938,750
SERVICES (COMMERCIAL & CONSUMER)--2.8%
Fisher Scientific International, Inc.
9%, 2/1/08.............................. B 4,000 4,055,000
United Rentals, Inc. Series B 9.50%,
6/1/08.................................. B 9,125 9,353,125
</TABLE>
See Notes to Financial Statements 25
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)--CONTINUED
United Rentals Inc. 144A 9.25%,
1/15/09(b).............................. B $ 2,000 $ 2,035,000
------------
15,443,125
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.0%
Nextel Commmunications, Inc. 0%,
10/31/07(d)............................. B 7,500 5,775,000
TELECOMMUNICATIONS (LONG DISTANCE)--10.6%
EchoStar DBS Corp. 144A 9.375%,
2/1/09(b)............................... B 5,000 5,225,000
Global Crossing Holdings Ltd. 9.625%,
5/15/08................................. B 5,730 6,417,600
IXC Communications, Inc. 9%, 4/15/08.... CCC+(c) 3,000 3,045,000
Interamericas Communications Corp. 14%,
10/27/07................................ NR 12,000 8,220,000
KMC Telecom Holdings, Inc. 0%,
2/15/08(d).............................. NR 8,000 4,660,000
NTL, Inc. Series A 0%, 4/15/05(d)....... B 12,000 11,535,000
NTL, Inc. Series B, 0%, 2/1/06(d)....... B 1,709 1,506,056
NTL, Inc. Series B 10%, 2/15/07......... B 8,000 8,660,000
RCN Corp. 0%, 10/15/07(d)............... B 7,750 5,405,625
RCN Corp. Series B 0%, 2/15/08(d)....... B 5,525 3,625,781
------------
58,300,062
------------
TELEPHONE--1.5%
Pathnet, Inc. 12.25%, 4/15/08........... NR 5,825 3,203,750
Teligent, Inc. 11.50%, 12/1/07.......... Caa 5,000 5,000,000
------------
8,203,750
------------
TEXTILES (APPAREL)--1.1%
Collins & Aikman Corp. 11.50%,
4/15/06................................. B 5,440 5,834,400
TRUCKERS--3.3%
American Commercial Lines LLC Series B
10.25%, 6/30/08......................... B 6,600 6,814,500
Hvide Marine, Inc. 8.375%, 2/15/08...... Caa 5,500 3,355,000
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
TRUCKERS--CONTINUED
Sea Containers Ltd. 7.875%, 2/15/08..... Ba $ 8,000 $ 7,880,000
------------
18,049,500
------------
WASTE MANAGEMENT--0.9%
Allied Waste North America, Inc. Series
B 7.625%, 1/1/06........................ Ba 5,000 4,900,000
- - - ---------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $376,707,109) 356,443,172
- - - ---------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--2.4%
First Chicago/Lennar Trust 97-CHL1, E
144A 8.053%, 2/28/11(b)(d).............. B(c) 10,000 7,100,000
Salomon Brothers Mortgage Securities VII
95-C, 1 144A 6.795%, 9/30/08(b)(d)...... B 6,850 6,043,286
- - - ---------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $13,058,911) 13,143,286
- - - ---------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--2.0%
DOMINICAN REPUBLIC--0.3%
Dominican Republic 6.063%, 8/30/24(d)... B+(c) 2,500 1,650,000
PANAMA--1.7%
Republic of Panama 8.875%, 9/30/27...... Ba 10,000 9,492,500
- - - ---------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $11,509,390) 11,142,500
- - - ---------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--22.3%
ARGENTINA--1.4%
Disco SA 9.875%, 5/15/08................ Ba 6,230 5,591,425
Imasac SA 144A 11%, 5/2/05(b)........... B 3,230 2,277,150
------------
7,868,575
------------
BAHAMAS--1.7%
Sun International Hotels Ltd. 9%,
3/15/07................................. Ba 6,000 6,285,000
Sun International Hotels Ltd. 8.625%,
12/15/07................................ Ba 3,000 3,120,000
------------
9,405,000
------------
</TABLE>
26 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
BRAZIL--2.3%
Globo Communicacoes e Participacoes SA
RegS 10.50%, 12/20/06................... B $ 5,000 $ 4,050,000
Globo Communicacoes e Participacoes SA
144A 10.625%, 12/5/08(b)................ B 3,500 2,800,000
Localiza Rent a Car 10.25%, 10/1/05..... B 8,000 6,000,000
------------
12,850,000
------------
CANADA--5.7%
Clearnet Communications, Inc. 0%,
12/15/05(d)............................. B 5,000 4,712,500
Clearnet Communications, Inc. 0%,
5/1/09(d)............................... B 5,500 3,423,750
Cott Corp. 8.50%, 5/1/07................ B 2,000 1,905,000
Hurricane Hydrocarbons Ltd. 144A 11.75%,
11/1/04(b).............................. Caa 8,000 2,400,000
Imax Corp. 7.875%, 12/1/05.............. Ba 4,000 3,990,000
MetroNet Communications Corp. 12%,
8/15/07................................. B 4,000 4,750,000
MetroNet Communications Corp. 0%,
6/15/08(d).............................. B 4,700 3,677,750
Rogers Cantel, Inc. 9.375%, 6/1/08...... Ba 5,500 6,077,500
------------
30,936,500
------------
CHINA--0.2%
Greater Beijing First Expressways Ltd.
9.50%, 6/15/07.......................... Ba 1,650 940,500
CYPRUS--1.2%
American Reefer Co. Ltd. 10.25%,
3/1/08.................................. B 10,000 6,300,000
GREECE--2.1%
Eletson Holdings, Inc. 9.25%, 11/15/03.. Ba 2,500 2,412,500
Fage Dairy Industries SA 9%, 2/1/07..... B 10,000 9,000,000
------------
11,412,500
------------
INDONESIA--0.7%
APP Finance II Mauritius Ltd. 12%,
12/29/49(d)............................. Caa 7,900 3,979,625
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
----------- ---------- ------------
<S> <C> <C> <C>
MEXICO--2.5%
Altos Hornos de Mexico Series B 11.875%,
4/30/04(e)(f)........................... Caa $ 5,000 $ 2,100,000
Copamex Industrias SA Series B 11.375%,
4/30/04................................. NR 3,000 2,805,000
Innova S de R.L. 12.875%, 4/1/07........ B 5,000 4,400,000
Nacional Financiera SNC EMTN 144A 9.75%,
3/12/02(b).............................. Ba 4,500 4,574,250
------------
13,879,250
------------
NETHERLANDS--1.3%
Netia Holdings BV Series B 0%,
11/1/07(d).............................. B 9,750 6,922,500
POLAND--0.8%
Poland Telecom Finance Series B 14%,
12/1/07................................. NR 5,000 4,500,000
UNITED KINGDOM--2.4%
Esprit Telecom Group PLC 11.50%,
12/15/07................................ Caa 10,000 10,975,000
RSL Communications PLC 0%, 3/1/08(d).... B 3,000 1,965,000
------------
12,940,000
------------
- - - ---------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $139,772,044) 121,934,450
- - - ---------------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--0.9%
RUSSIA--0.9%
Lukinter Finance Cv. RegS 3.50%,
5/6/02.................................. CCC-(c) 1,000 675,000
Lukinter Finance Cv. 144A 1%,
11/3/03(b).............................. CCC-(c) 9,500 4,132,500
- - - ---------------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $10,439,576) 4,807,500
- - - ---------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 27
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
PREFERRED STOCKS--2.0%
<S> <C> <C> <C>
PAPER & FOREST PRODUCTS--0.7%
SD Warren Co. Pfd. Series B PIK 14%.................. 115,000 $ 3,752,808
TELECOMMUNICATIONS (LONG DISTANCE)--1.3%
Global Crossing Holdings Ltd. PIK 10.50%............. 62,500 7,250,000
- - - ---------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $8,659,400) 11,002,808
- - - ---------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--0.2%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.2%
Granite Broadcasting Corp. Cv. Pfd. $1.938........... 30,000 1,185,000
- - - ---------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $2,025,000) 1,185,000
- - - ---------------------------------------------------------------------------------
COMMON STOCKS--0.0%
SPECIALTY PRINTING--0.0%
Sullivan Holdings, Inc. Class C(e)................... 76 0
- - - ---------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $357,881) 0
- - - ---------------------------------------------------------------------------------
WARRANTS--0.5%
FirstCom Corp. Warrants(e)........................... 420,000 1,050,000
KMC Telecom Holdings, Inc. 144A Warrants(b)(e)....... 8,000 8,000
Loral Space & Communications, Inc. Warrants(e)....... 8,000 40,000
Metronet Communications 144A Warrants
(Canada)(b)(e)....................................... 4,000 381,548
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C> <C>
NSM Steel, Inc. 144A Warrants(b)(e).................. 4,748,195 $ 47,482
Park N View Warrants(e).............................. 4,000 8,000
Pathnet, Inc. 144A Warrants(b)(e).................... 6,000 60,000
Splitrock Services, Inc. Warrants(e)................. 6,000 510,000
WAM!NET, Inc. Warrants(e)............................ 33,000 750,750
- - - ---------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $148,190) 2,855,780
- - - ---------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--95.4%
(IDENTIFIED COST $562,677,501) 522,514,496
- - - ---------------------------------------------------------------------------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- ----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.7%
COMMERCIAL PAPER--0.7%
Ford Motor Credit Co. 4.84%, 5/4/99..... A-1 $ 480 479,806
Albertson's, Inc. 4.84%, 5/11/99........ A-1 1,005 1,003,649
AlliedSignal, Inc. 4.80%, 6/30/99....... A-1 2,100 2,083,794
- - - ---------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $3,566,655) 3,567,249
- - - ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--96.1%
(IDENTIFIED COST $566,244,156) 526,081,745(a)
Cash and receivables, less liabilities--3.9% 21,252,913
--------------
NET ASSETS--100.0% $ 547,334,658
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $23,282,687 and gross
depreciation of $63,540,597 for federal income tax purposes. At April 30,
1999, the aggregate cost of securities for federal income taax purposes was
$566,339,655.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1999, these securities amounted to a value of $79,568,329 or 14.5% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate reflects the rate currently
in effect.
(e) Non-income producing.
(f) Security in default.
28
See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $566,244,156) $ 526,081,745
Cash 2,912
Receivables
Interest and dividends 14,802,672
Fund shares sold 11,646,828
Investment securities sold 3,781,763
Prepaid expenses 13,094
--------------
Total assets 556,329,014
--------------
LIABILITIES
Payables
Investment securities purchased 5,439,671
Fund shares repurchased 2,780,144
Investment advisory fee 292,833
Transfer agent fee 164,860
Distribution fee 156,304
Financial agent fee 21,228
Trustees' fee 3,846
Accrued expenses 135,470
--------------
Total liabilities 8,994,356
--------------
NET ASSETS $ 547,334,658
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 671,120,538
Undistributed net investment loss (70,925)
Accumulated net realized loss (83,552,544)
Net unrealized depreciation (40,162,411)
--------------
NET ASSETS $ 547,334,658
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $476,173,306) 59,514,791
Net asset value per share $8.00
Offering price per share $8.00/(1-4.75%) $8.40
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $68,242,888) 8,576,333
Net asset value and offering price per share $7.96
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,918,464) 365,851
Net asset value and offering price per share $7.98
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 28,250,947
Dividends 372,127
--------------
Total investment income 28,623,074
--------------
EXPENSES
Investment advisory fee 1,739,631
Distribution fee, Class A 585,473
Distribution fee, Class B 323,614
Distribution fee, Class C 10,849
Financial agent fee 160,293
Transfer agent 400,369
Printing 57,090
Professional 17,525
Custodian 14,021
Trustees 8,601
Miscellaneous 6,678
--------------
Total expenses 3,324,144
Custodian fees paid indirectly (12,186)
--------------
Net expenses 3,311,958
--------------
NET INVESTMENT INCOME 25,311,116
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (19,100,772)
Net change in unrealized appreciation (depreciation) on
investments 52,022,182
--------------
NET GAIN ON INVESTMENTS 32,921,410
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 58,232,526
--------------
--------------
</TABLE>
See Notes to Financial Statements 29
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/99 Year Ended
(Unaudited) 10/31/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 25,311,116 $ 54,925,644
Net realized gain (loss) (19,100,772) (2,965,994)
Net change in unrealized appreciation
(depreciation) 52,022,182 (98,402,826)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 58,232,526 (46,443,176)
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (24,586,078) (48,737,532)
Net investment income, Class B (3,232,246) (5,729,283)
Net investment income, Class C (109,576) (77,895)
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (27,927,900) (54,544,710)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(14,525,490 and 14,608,985 shares,
respectively) 113,090,361 131,624,797
Net asset value of shares issued from
reinvestment of distributions
(1,786,835 and 2,974,231 shares,
respectively) 13,983,577 26,360,963
Cost of shares repurchased (13,411,028
and 19,613,171 shares, respectively) (105,148,588) (175,549,018)
------------- -------------
Total 21,925,350 (17,563,258)
------------- -------------
CLASS B
Proceeds from sales of shares
(1,757,585 and 4,637,394 shares,
respectively) 13,701,768 41,776,158
Net asset value of shares issued from
reinvestment of distributions
(153,765 and 251,098 shares,
respectively) 1,197,574 2,210,523
Cost of shares repurchased (1,447,945
and 2,529,603 shares, respectively) (11,286,907) (22,197,043)
------------- -------------
Total 3,612,435 21,789,638
------------- -------------
CLASS C
Proceeds from sales of shares (193,438
and 276,001 shares, respectively) 1,516,644 2,487,472
Net asset value of shares issued from
reinvestment of distributions
(5,168 and 3,918 shares,
respectively) 40,392 33,626
Cost of shares repurchased (54,092 and
58,582 shares, respectively) (419,030) (495,138)
------------- -------------
Total 1,138,006 2,025,960
------------- -------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 26,675,791 6,252,340
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 56,980,417 (94,735,546)
NET ASSETS
Beginning of period 490,354,241 585,089,787
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($70,925) AND $2,545,859,
RESPECTIVELY] $ 547,334,658 $ 490,354,241
------------- -------------
------------- -------------
</TABLE>
30 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 --------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.55 $ 9.09 $ 8.63 $ 8.17 $ 8.11 $ 9.11
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.37 0.83 0.80 0.78 0.80 0.76
Net realized and unrealized gain
(loss) 0.49 (1.56) 0.46 0.46 0.04 (0.97)
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.86 (0.73) 1.26 1.24 0.84 (0.21)
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.41) (0.81) (0.80) (0.78) (0.78) (0.76)
Tax return of capital -- -- -- -- -- (0.03)
---------- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.41) (0.81) (0.80) (0.78) (0.78) (0.79)
---------- ----- ----- ----- ----- -----
Change in net asset value 0.45 (1.54) 0.46 0.46 0.06 (1.00)
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 8.00 $ 7.55 $ 9.09 $ 8.63 $ 8.17 $ 8.11
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) 11.60%(3) (8.97)% 15.03% 15.95% 11.19% (2.57)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $476,173 $427,659 $532,906 $501,265 $507,855 $531,773
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.14%(2)(4) 1.12% 1.11% 1.17% 1.21% 1.19%
Net investment income 9.55%(2) 9.13% 8.76% 9.21% 10.01% 9.01%
Portfolio turnover 44%(3) 103% 167% 162% 147% 222%
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
See Notes to Financial Statements
31
<PAGE>
PHOENIX-GOODWIN HIGH YIELD FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ---------------------------------------------------- 2/16/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $7.52 $ 9.07 $ 8.63 $ 8.19 $ 8.13 $9.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.34 0.76 0.73 0.71 0.72 0.54
Net realized and unrealized gain
(loss) 0.49 (1.55) 0.46 0.45 0.07 (1.25)
---------- ----- ----- ----- ----- ------------
TOTAL FROM INVESTMENT
OPERATIONS 0.83 (0.79) 1.19 1.16 0.79 (0.71)
---------- ----- ----- ----- ----- ------------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.39) (0.76) (0.75) (0.72) (0.73) (0.52)
Tax return of capital -- -- -- -- -- (0.02)
---------- ----- ----- ----- ----- ------------
TOTAL DISTRIBUTIONS (0.39) (0.76) (0.75) (0.72) (0.73) (0.54)
---------- ----- ----- ----- ----- ------------
Change in net asset value 0.44 (1.55) 0.44 0.44 0.06 (1.25)
---------- ----- ----- ----- ----- ------------
NET ASSET VALUE, END OF PERIOD $7.96 $ 7.52 $ 9.07 $ 8.63 $ 8.19 $8.13
---------- ----- ----- ----- ----- ------------
---------- ----- ----- ----- ----- ------------
Total return(1) 11.21%(3) (9.61)% 14.18% 14.88% 10.44% (7.67)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $68,243 $61,026 $52,184 $25,595 $12,331 $6,056
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(2)(4) 1.88% 1.86% 1.92% 1.97% 1.80%(2)
Net investment income 8.78%(2) 8.46% 8.00% 8.47% 9.18% 9.12%(2)
Portfolio turnover 44%(3) 103% 167% 162% 147% 222%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS C
---------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/99 2/27/98 TO
(UNAUDITED) 10/31/98
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 7.54 $ 9.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.35 0.50
Net realized and unrealized gain
(loss) 0.48 (1.76)
----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.83 (1.26)
----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.39) (0.51)
Tax return of capital -- --
----- -----
TOTAL DISTRIBUTIONS (0.39) (0.51)
----- -----
Change in net asset value 0.44 (1.77)
----- -----
NET ASSET VALUE, END OF PERIOD $ 7.98 $ 7.54
----- -----
----- -----
Total return(1) 11.20%(3) (14.09)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $2,918 $1,669
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(2)(4) 1.88%(2)
Net investment income 8.69%(2) 8.94%(2)
Portfolio turnover 44%(3) 103%(3)
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
32
See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
VALUE INTEREST RESET
(000) DESCRIPTION RATE DATE VALUE
- - - -------- ------------------------------------ ------- --------- ------------
<C> <S> <C> <C> <C> <C>
FEDERAL AGENCY SECURITIES--VARIABLE(b)--16.3%
$ 10,500 FFCB (final maturity 7/24/00)....... 5.04% 5/1/99 $ 10,501,460
403 SBA (final maturity 1/25/21)........ 5.25 5/1/99 402,260
2,995 SBA (final maturity 3/25/24)........ 5.125 5/1/99 2,993,141
3,000 SLMA (final maturity 3/7/01)........ 4.717 5/4/99 3,000,000
1,000 SLMA (final maturity 8/19/99)....... 4.887 5/4/99 1,000,000
4,000 FNMA (final maturity 9/17/99)....... 4.82 6/17/99 3,999,086
2,635 SBA (final maturity 10/25/22)....... 5.25 7/1/99 2,631,551
2,943 SBA (final maturity 2/25/23)........ 5.25 7/1/99 2,943,456
2,801 SBA (final maturity 2/25/23)........ 5.25 7/1/99 2,801,442
447 SBA (final maturity 5/25/21)........ 5.25 7/1/99 446,573
3,510 SBA (final maturity 9/25/23)........ 5.125 7/1/99 3,510,198
- - - ----------------------------------------------------------------------------------------------------
34,229,167
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE
- - - ----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S MATURITY
RATING DATE
-------- ---------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER--70.9%
10,000 Corporate Asset Funding Co., Inc...... A-1+ 5.00 5/3/99 9,997,222
2,500 Enterprise Funding Corp............... A-1 4.81 5/3/99 2,499,332
1,835 Pitney Bowes Credit Corp.............. A-1+ 4.80 5/3/99 1,834,511
8,040 Pitney Bowes Credit Corp.............. A-1+ 5.05 5/3/99 8,037,744
3,500 Exxon Imperial Funding U.S., Inc...... A-1+ 4.82 5/4/99 3,498,594
2,500 Merrill Lynch & Co., Inc.............. A-1+ 4.87 5/4/99 2,498,985
2,500 AT&T Corp............................. A-1 4.82 5/5/99 2,498,661
1,000 American Home Products Corp........... A-1 4.84 5/5/99 999,462
3,000 Greenwich Funding Corp................ A-1+ 4.90 5/5/99 2,998,367
5,000 Merrill Lynch & Co., Inc.............. A-1+ 4.82 5/6/99 4,996,653
2,500 Private Export Funding Corp........... A-1+ 4.68 5/6/99 2,498,375
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- - - -------- -------------------------------------- -------- ------- --------- ------------
<C> <S> <C> <C> <C> <C>
$ 1,682 Enterprise Funding Corp............... A-1 4.82% 5/7/99 $ 1,680,649
3,000 Kimberly-Clark Corp................... A-1+ 4.79 5/7/99 2,997,605
2,850 Marsh & McLennan Cos., Inc............ A-1+ 4.79 5/7/99 2,847,725
2,500 Donnelley (R.R.) & Sons Co............ A-1 4.84 5/10/99 2,496,975
500 Dupont (E.I.) de Nemours & Co......... A-1+ 4.80 5/10/99 499,400
3,500 Kimberly-Clark Corp................... A-1+ 4.83 5/10/99 3,495,774
1,225 Preferred Receivables Funding Corp.... A-1 4.82 5/10/99 1,223,524
3,000 Albertson's, Inc...................... A-1 4.84 5/11/99 2,995,967
2,500 Ameritech Corp........................ A-1+ 4.79 5/11/99 2,496,674
2,500 Ciesco L.P............................ A-1+ 4.80 5/11/99 2,496,667
3,000 General Electric Capital Corp......... A-1+ 4.84 5/12/99 2,995,563
415 Asset Securitization Corp............. A-1+ 4.85 5/14/99 414,273
5,000 Receivables Capital Corp.............. A-1+ 4.80 5/14/99 4,991,333
2,980 Beta Finance, Inc..................... A-1+ 5.01 5/17/99 2,973,365
2,330 Ciesco L.P............................ A-1+ 4.80 5/17/99 2,325,029
2,670 Lexington Parker Capital Co. LLC...... A-1 4.82 5/18/99 2,663,923
5,000 AT&T Corp............................. A-1+ 4.79 5/19/99 4,988,025
1,135 Albertson's, Inc...................... A-1 4.80 5/20/99 1,132,125
2,045 Lexington Parker Capital Co. LLC...... A-1 4.82 5/20/99 2,039,798
2,825 Lexington Parker Capital Co. LLC...... A-1 4.82 5/21/99 2,817,435
500 AlliedSignal, Inc..................... A-1 4.84 5/24/99 498,454
5,000 Donnelley (R.R.) & Sons Co............ A-1 4.79 5/24/99 4,984,699
1,916 Greenwich Funding Corp................ A-1+ 4.81 5/24/99 1,910,112
900 Dupont (E.I.) de Nemours & Co......... A-1+ 4.84 5/25/99 897,096
</TABLE>
See Notes to Financial Statements 33
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
<TABLE>
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- - - -------- -------------------------------------- -------- ------- --------- ------------
<C> <S> <C> <C> <C> <C>
$ 4,331 Vermont American Corp................. A-1+ 4.80% 5/26/99 $ 4,316,563
3,925 Albertson's, Inc...................... A-1 4.80 5/27/99 3,911,393
3,000 Private Export Funding Corp........... A-1+ 4.81 5/27/99 2,989,578
2,000 Shell Oil Co.......................... A-1+ 4.80 5/27/99 1,993,067
3,920 AlliedSignal, Inc..................... A-1 4.85 5/28/99 3,905,741
800 Shell Oil Co.......................... A-1+ 4.82 6/4/99 796,358
1,000 Dupont (E.I.) de Nemours & Co......... A-1+ 4.79 6/8/99 994,944
800 General Electric Capital Corp......... A-1+ 4.82 6/10/99 795,716
600 General Electric Capital Corp......... A-1+ 4.82 6/11/99 596,706
1,489 Enterprise Funding Corp............... A-1 4.82 6/14/99 1,480,228
3,058 Greenwich Funding Corp................ A-1+ 4.82 6/15/99 3,039,576
1,200 Shell Oil Co.......................... A-1+ 4.80 6/25/99 1,191,200
3,500 AlliedSignal, Inc..................... A-1 4.80 6/30/99 3,472,000
2,500 Greenwich Funding Corp................ A-1+ 4.84 7/1/99 2,479,497
4,000 Private Export Funding Corp........... A-1+ 4.80 7/12/99 3,961,600
1,000 Enterprise Funding Corp............... A-1 4.84 8/26/99 984,270
1,625 Lexington Parker Capital Co. LLC...... A-1 4.87 9/3/99 1,597,522
500 Beta Finance, Inc..................... A-1+ 4.83 9/8/99 491,279
2,500 Preferred Receivables Funding Corp.... A-1 4.87 9/13/99 2,454,344
2,500 Preferred Receivables Funding Corp.... A-1 4.85 9/13/99 2,454,531
1,261 Enterprise Funding Corp............... A-1 4.87 9/17/99 1,237,289
2,500 Campbell Soup Co...................... A-1+ 4.85 4/13/00 2,382,792
- - - ----------------------------------------------------------------------------------------------------
148,746,290
TOTAL COMMERCIAL PAPER
- - - ----------------------------------------------------------------------------------------------------
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
- - - -------- -------------------------------------- -------- ------- --------- ------------
<C> <S> <C> <C> <C> <C>
MEDIUM-TERM NOTES(e)--9.8%
$ 2,500 Associates Corporation of North
America............................... AA- 4.808% 5/20/99 $ 2,498,470
3,500 General Electric Capital Corp.(c)..... AAA 4.899 6/4/99 3,499,689
3,500 Associates Corporation of North
America............................... AA- 5.65 6/15/99 3,499,256
1,550 AT&T Corp............................. AA- 6.58 9/3/99 1,554,709
1,225 Associates Corporation of North
America............................... AA- 6.68 9/17/99 1,232,077
600 Associates Corporation of North
America............................... AA- 6.75 10/15/99 604,863
2,500 Beta Finance, Inc..................... AAA 5.35 3/9/00 2,500,000
2,500 Associates Corporation of North
America............................... AA- 9.125 4/1/00 2,586,248
2,500 Dupont (E.I.) de Nemours & Co......... AA- 5.079 4/3/00 2,498,449
- - - ----------------------------------------------------------------------------------------------------
20,473,761
TOTAL MEDIUM-TERM NOTES
- - - ----------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--8.6%
1,000 Deutsche Bank Financial, Inc.......... AA+ 5.67 6/18/99 1,000,608
3,500 Canadian Imperial Funding Corp........ AA- 6.475 1/24/00 3,536,328
2,500 Deutsche Bank Financial, Inc.......... AA+ 4.97 2/2/00 2,497,530
2,500 Canadian Imperial Funding Corp........ AA- 5.01 2/7/00 2,499,627
2,500 Deutsche Bank Financial, Inc.......... AA+ 5.10 2/17/00 2,499,422
2,500 Canadian Imperial Funding Corp........ AA- 5.12 2/23/00 2,499,213
3,500 ABN AMRO Bank(d)...................... AA 4.88 4/20/00 3,497,998
- - - ----------------------------------------------------------------------------------------------------
18,030,726
TOTAL CERTIFICATES OF DEPOSIT
- - - ----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--105.6%
(IDENTIFIED COST $221,479,944) 221,479,944(A)
---------------------------------------------------------------------------------------------------
Cash and receivables, less liabilities--(5.6%) (11,666,263)
------------
NET ASSETS--100.0% $209,813,681
------------
------------
</TABLE>
(a) Federal Income Tax Information: At April 30, 1999, 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 medium term note. The interest rate shown reflects the rate
currently in effect.
(d) Variable rate certificate of deposit. The interest rate shown reflects the
rate currently in effect. The next reset date is 7/20/99.
(e) The interest rate shown is the coupon rate.
34
See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $221,479,944) $ 221,479,944
Cash 31,041
Receivables
Fund shares sold 7,358,462
Interest 638,925
Investment securities sold 58,319
Prepaid expenses 4,472
--------------
Total assets 229,571,163
--------------
LIABILITIES
Payables
Fund shares repurchased 19,442,573
Dividend distributions 96,837
Investment advisory fee 68,892
Transfer agent fee 26,534
Financial agent fee 16,241
Distribution fee 10,351
Trustees' fee 3,847
Accrued expenses 92,207
--------------
Total liabilities 19,757,482
--------------
NET ASSETS $ 209,813,681
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest 209,813,681
--------------
NET ASSETS $ 209,813,681
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $193,943,751) 193,943,751
Net asset value and offering price per share $1.00
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $15,869,930) 15,869,930
Net asset value and offering price per share $1.00
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 5,422,292
--------------
Total investment income 5,422,292
--------------
EXPENSES
Investment advisory fee 421,620
Distribution fee, Class B 69,288
Financial agent fee 96,303
Transfer agent 167,968
Printing 28,153
Registration 23,198
Custodian 18,442
Professional 14,961
Trustees 8,601
Miscellaneous 4,169
--------------
Total expenses 852,703
Custodian fees paid indirectly (2,362)
--------------
Net expenses 850,341
--------------
NET INVESTMENT INCOME $ 4,571,951
--------------
--------------
</TABLE>
See Notes to Financial Statements 35
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/99 Year Ended
(Unaudited) 10/31/98
--------------- ---------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 4,571,951 $ 9,527,556
--------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (4,238,129) (8,931,102)
Net investment income, Class B (333,822) (596,454)
--------------- ---------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (4,571,951) (9,527,556)
--------------- ---------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (744,133,014 and
1,101,598,303 shares, respectively) 744,133,014 1,101,598,303
Net asset value of shares issued from
reinvestment of distributions
(3,852,064 and 7,964,222 shares, respectively) 3,852,064 7,964,222
Cost of shares repurchased (749,333,245 and
1,102,965,310 shares, respectively) (749,333,245) (1,102,965,310)
--------------- ---------------
Total (1,348,167) 6,597,215
--------------- ---------------
CLASS B
Proceeds from sales of shares (30,712,228 and
46,229,441 shares, respectively) 30,712,228 46,229,441
Net asset value of shares issued from
reinvestment of distributions
(272,859 and 482,065 shares, respectively) 272,859 482,065
Cost of shares repurchased (35,092,918 and
41,747,121 shares, respectively) (35,092,918) (41,747,121)
--------------- ---------------
Total (4,107,831) 4,964,385
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS (5,455,998) 11,561,600
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS (5,455,998) 11,561,600
NET ASSETS
Beginning of period 215,269,679 203,708,079
--------------- ---------------
END OF PERIOD $ 209,813,681 $ 215,269,679
--------------- ---------------
--------------- ---------------
</TABLE>
36 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 --------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.022 0.049 0.048 0.047 0.053 0.032
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.022 0.049 0.048 0.047 0.053 0.032
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.022) (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 $ 1.00
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return 2.20%(2) 5.00% 4.76% 4.67% 5.32% 3.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $193,944 $195,292 $188,695 $192,859 $193,534 $196,566
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.74%(1)(3) 0.73% 0.79% 0.84% 0.71% 0.85%
Net investment income 4.41%(1) 4.90% 4.76% 4.68% 5.31% 3.19%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ---------------------------------------------------- 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.018 0.041 0.040 0.039 0.046 0.007
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.018 0.041 0.040 0.039 0.046 0.007
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.018) (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 $ 1.00
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return 1.82%(2) 4.22% 4.02% 3.93% 4.63% 0.70%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $15,870 $19,978 $15,013 $10,223 $8,506 $2,086
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.49%(1)(3) 1.48% 1.55% 1.59% 1.44% 1.60%(1)
Net investment income 3.61%(1) 4.15% 4.02% 3.92% 4.62% 3.46%(1)
</TABLE>
(1) Annualized
(2) Not annualized
(3) For the six months ended April 30, 1999, the ratio of operating expenses to
average net assets exclude the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
See Notes to Financial Statements
37
<PAGE>
PHOENIX-GOODWIN U.S. GOVERNMENT SECURITIES FUND
INVESTMENTS AT APRIL 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--6.8%
U.S. TREASURY BONDS--4.0%
U.S. Treasury Strip P.O. 0%, 2/15/25.... AAA $ 4,000 $ 879,701
U.S. Treasury Bonds 5.50%, 8/15/28...... AAA 6,500 6,186,966
------------
7,066,667
------------
U.S. TREASURY NOTES--2.8%
U.S. Treasury Notes 5.75%, 4/30/03...... AAA 5,000 5,083,565
- - - ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $13,240,879) 12,150,232
- - - ----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--59.1%
Fannie Mae 10%, 5/25/04................. AAA 1,515 1,587,635
Fannie Mae 5.50%, 10/25/04.............. AAA 83 83,055
Fannie Mae 6.75%, 5/25/19............... AAA 1,000 1,012,867
Fannie Mae 6.75%, 6/25/21............... AAA 1,000 1,015,023
GNMA 6%, 1/15/29........................ AAA 34,747 33,661,219
GNMA 6.50%, 9/15/28..................... AAA 34,758 34,540,120
GNMA 7%, 1/15/28........................ AAA 8,824 8,958,866
GNMA 7%, 3/15/28........................ AAA 10,445 10,605,046
GNMA 7.50%, 12/15/25.................... AAA 5,969 6,155,880
GNMA 7.50%, 10/15/26.................... AAA 4,880 5,029,780
GNMA 7.50%, 1/15/29..................... AAA 2,673 2,755,335
GNMA 8%, 9/15/05........................ AAA 94 98,085
GNMA 8%, 9/15/06........................ AAA 15 15,613
GNMA 8.50%, '01-'22..................... AAA 228 231,998
- - - ----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $107,129,354) 105,750,522
- - - ----------------------------------------------------------------------------
MUNICIPAL BONDS--19.3%
CALIFORNIA--3.5%
San Francisco City & County
Redevelopment Agency Revenue Taxable
9.75%, 6/1/13(c)........................ AAA 4,800 6,300,000
CONNECTICUT--2.9%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.91%,
9/1/12(b)............................... AAA 5,100 5,170,125
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- -------- ------------
<S> <C> <C> <C>
GEORGIA--2.9%
Atlanta Downtown Development Authority
Lease Revenue Taxable 6.875%,
2/1/21(e)............................... AAA $ 5,100 $ 5,112,750
ILLINOIS--2.3%
Chicago Public Building Commission
Special Obligation Taxable 6.65%,
1/1/01(c)............................... AAA 1,000 1,017,500
Chicago Public Building Commission
Special Obligation Taxable 7%,
1/1/06(c)............................... AAA 2,000 2,087,500
Chicago Public Building Commission
Special Obligation Taxable 7%,
1/1/07(c)............................... AAA 1,050 1,095,938
------------
4,200,938
------------
MASSACHUSETTS--1.5%
Massachusetts Port Authority Revenue
Taxable Series C 6.35%, 7/1/06.......... AA- 1,000 1,005,000
Massachusetts Port Authority Revenue
Taxable Series C 6.45%, 7/1/09.......... AA- 1,575 1,588,781
------------
2,593,781
------------
PENNSYLVANIA--6.2%
Harristown Development Corporation
Special Obligation Taxable 6.15%,
2/1/16.................................. Aaa(f) 5,000 4,656,250
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A 5.79%,
4/15/09................................. AAA 4,000 3,820,000
Pittsburgh Pension Taxable Series A
6.25%, 3/1/11........................... AAA 2,665 2,615,031
------------
11,091,281
------------
- - - ----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $34,121,318) 34,468,875
- - - ----------------------------------------------------------------------------
</TABLE>
38 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN U.S. GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- -------- ------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES--0.8%
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. BBB- $ 1,470 $ 1,405,688
- - - ----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $1,478,727) 1,405,688
- - - ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<S> <C> <C> <C>
PREFERRED STOCKS--10.6%
REITS--10.6%
Home Ownership Funding 2, Step-down Pfd.
144A 13.338%(b)(d)(g)................... 20,722 18,964,650
- - - ----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $18,670,228) 18,964,650
- - - ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.6%
(IDENTIFIED COST $174,640,506) 172,739,967
- - - ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000) VALUE
-------- ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.9%
FEDERAL AGENCY SECURITIES--2.9%
FHLB 4.90%, 5/3/99...................... $ 5,215 $ 5,213,580
- - - ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $5,213,580) 5,213,580
- - - ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--99.5%
(IDENTIFIED COST $179,854,086) 177,953,547(a)
Cash and receivables, less liabilities--0.5% 863,002
--------------
NET ASSETS--100.0% $ 178,816,549
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $1,110,124 and gross
depreciation of $3,098,976 for federal income tax purposes. At April 30,
1999, the aggregate cost of securities for federal income tax purpose was
$179,942,399.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1999, these securities amounted to a value of $24,134,775 or 13.5% 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 the rate
currently in effect.
See Notes to Financial Statements
39
<PAGE>
PHOENIX-GOODWIN U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $179,854,086) $ 177,953,547
Cash 3,781
Receivables
Interest 1,269,215
Fund shares sold 63,892
Prepaid expenses 4,418
--------------
Total assets 179,294,853
--------------
LIABILITIES
Payables
Fund shares repurchased 220,764
Investment advisory fee 67,513
Transfer agent fee 66,192
Distribution fee 45,599
Financial agent fee 13,491
Trustees' fee 4,249
Accrued expenses 60,496
--------------
Total liabilities 478,304
--------------
NET ASSETS $ 178,816,549
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 191,770,289
Undistributed net investment loss (481,027)
Accumulated net realized loss (10,572,174)
Net unrealized depreciation (1,900,539)
--------------
NET ASSETS $ 178,816,549
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $166,172,571) 17,589,456
Net asset value per share $9.45
Offering price per share $9.45(1-4.75%) $9.92
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $12,643,978) 1,348,332
Net asset value and offering price per share $9.38
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 5,185,037
Dividends 761,119
Security lending 88,019
--------------
Total investment income 6,034,175
--------------
EXPENSES
Investment advisory fee 419,470
Distribution fee, Class A 216,701
Distribution fee, Class B 65,351
Financial agent fee 89,830
Transfer agent 154,128
Printing 20,644
Professional 18,273
Custodian 8,363
Trustees 7,644
Registration 2,697
Miscellaneous 6,862
--------------
Total expenses 1,009,963
--------------
NET INVESTMENT INCOME 5,024,212
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (2,235,083)
Net change in unrealized appreciation (depreciation)
on investments (4,201,452)
--------------
NET LOSS ON INVESTMENTS (6,436,535)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ (1,412,323)
--------------
--------------
</TABLE>
40 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/99 Year Ended
(Unaudited) 10/31/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 5,024,212 $ 10,062,931
Net realized gain (loss) (2,235,083) 4,600,713
Net change in unrealized appreciation
(depreciation) (4,201,452) (337,053)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,412,323) 14,326,591
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (5,621,427) (10,374,488)
Net investment income, Class B (387,219) (383,148)
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 (6,008,646) (11,241,706)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,649,892 and 4,455,347 shares,
respectively) 25,650,415 43,833,411
Net asset value of shares issued from
reinvestment of distributions
(351,191 and 659,479 shares,
respectively) 3,377,599 6,426,680
Cost of shares repurchased (3,787,558
and 5,613,314 shares, respectively) (36,591,307) (54,907,874)
------------- -------------
Total (7,563,293) (4,647,783)
------------- -------------
CLASS B
Proceeds from sales of shares (344,713
and 1,026,865 shares, respectively) 3,295,942 10,046,636
Net asset value of shares issued from
reinvestment of distributions
(18,692 and 23,348 shares,
respectively) 178,508 226,393
Cost of shares repurchased (336,201
and 283,214 shares, respectively) (3,203,912) (2,751,425)
------------- -------------
Total 270,538 7,521,604
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (7,292,755) 2,873,821
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (14,713,724) 5,958,706
NET ASSETS
Beginning of period 193,530,273 187,571,567
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($481,027) AND $503,407,
RESPECTIVELY] $ 178,816,549 $ 193,530,273
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 41
<PAGE>
PHOENIX-GOODWIN U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/99 --------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.83 $ 9.66 $ 9.47 $ 9.60 $ 8.88 $ 9.87
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.26 0.59 0.55 0.52 0.55 0.64
Net realized and unrealized gain
(loss) (0.33) 0.18 0.17 (0.15) 0.72 (1.02)
---------- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.07) 0.77 0.72 0.37 1.27 (0.38)
---------- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.31) (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 (0.31) (0.60) (0.53) (0.50) (0.55) (0.61)
---------- ----- ----- ----- ----- -----
Change in net asset value (0.38) 0.17 0.19 (0.13) 0.72 (0.99)
---------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.45 $ 9.83 $ 9.66 $ 9.47 $ 9.60 $ 8.88
---------- ----- ----- ----- ----- -----
---------- ----- ----- ----- ----- -----
Total return(1) (0.71)%(3) 8.16% 7.85% 4.05% 14.81% (3.98)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $166,173 $180,628 $182,250 $208,552 $235,879 $262,157
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.03%(2) 1.00% 0.98% 1.03% 0.99% 0.98%
Net investment income 5.44%(2) 5.46% 5.63% 5.55% 6.01% 5.92%
Portfolio turnover 81%(3) 290% 377% 379% 178% 101%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/99 ---------------------------------------------------- 2/24/94 TO
(UNAUDITED) 1998 1997 1996 1995 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.77 $ 9.60 $ 9.45 $ 9.58 $ 8.86 $ 9.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.22 0.52 0.47 0.44 0.48 0.39
Net realized and unrealized gain
(loss) (0.33) 0.18 0.17 (0.14) 0.72 (0.75)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.11) 0.70 0.64 0.30 1.20 (0.36)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.28) (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 (0.28) (0.53) (0.49) (0.43) (0.48) (0.39)
----- ----- ----- ----- ----- -----
Change in net asset value (0.39) 0.17 0.15 (0.13) 0.72 (0.75)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.38 $ 9.77 $ 9.60 $ 9.45 $ 9.58 $ 8.86
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) (1.12)%(3) 7.48% 6.94% 3.39% 13.82% (3.83)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $12,644 $12,902 $5,321 $4,875 $3,655 $1,238
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.78%(2) 1.75% 1.71% 1.78% 1.73% 2.00%(2)
Net investment income 4.69%(2) 4.74% 4.91% 4.79% 5.23% 4.49%(2)
Portfolio turnover 81%(3) 290% 377% 379% 178% 101%(3)
</TABLE>
(1) Maximum sales load is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
42
See Notes to Financial Statements
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED)
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 Fund has distinct
investment objectives. The Aggressive Growth Fund seeks appreciation of capital
through the use of aggressive investment techniques. The Balanced Fund seeks to
provide reasonable income, long-term capital growth and conservation of capital.
The Growth Fund seeks long-term appreciation of capital. The High Yield Fund
seeks to provide high current income. The Money Market Fund seeks to provide as
high a level of current income consistent with capital preservation and
liquidity. The U.S. Government Securities Fund seeks a high level of current
income by investing in U.S. Government guaranteed or backed securities.
Each Fund offers both Class A and Class B shares and, additionally, High Yield
Fund 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 Fund are borne pro rata by the holders of all classes of
shares, except that each class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. 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 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 Fund is notified. Interest income is recorded on the accrual
basis. The Trust does not amortize premiums except for the Money Market Fund,
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 Funds is treated as a separate taxable entity. It is the policy of
each Fund in the Trust to comply with the requirements of the Internal Revenue
Code (the Code), applicable to regulated investment companies, and to distribute
all of its taxable income to its shareholders. In addition, each Fund intends to
distribute an amount sufficient to avoid imposition of any excise tax under
Section 4982 of the Code. Therefore, no provision for federal income taxes or
excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, 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 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.
43
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED) (CONTINUED)
F. FORWARD CURRENCY CONTRACTS:
Each of the Funds, except U.S. Government and Money Market Fund, may enter
into forward currency contracts in conjunction with the planned purchase or sale
of foreign denominated securities in order to hedge the U.S. dollar cost or
proceeds. Forward currency contracts involve, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of assets and
liabilities. Risks arise from the possible movements in foreign exchange rates
or if the counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Fund as an unrealized gain (or loss). When the
contract is closed, the Fund records a realized gain (or loss) equal to the
change in the value of the contract when it was opened and the value at the time
it was closed.
G. SECURITY LENDING:
The Trust loans securities to qualified brokers through an agreement with
State Street Bank & Trust (the Custodian). Under the terms of the agreement, the
Trust receives collateral with a market value not less than 100% of the market
value of loaned securities. Collateral is adjusted daily in connection with
changes in the market value of securities on loan. Collateral consists of cash,
securities issued or guaranteed by the U.S. Government or its agencies and the
sovereign debt of foreign countries. Interest earned on the collateral and
premiums paid by the borrower are recorded as income by the Trust net of fees
charged by the Custodian for its services in connection with this securities
lending program. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities or in the foreclosure on collateral. At April
30, 1999, the Aggressive Growth Fund and the Balanced Fund had securities on
loan with market values of $15,976,596 and $14,282,704, respectively and
collateral values of $16,432,948 and $14,581,000, respectively.
H. EXPENSES:
Expenses incurred by the Trust with respect to any two or more Funds are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
I. OPTIONS:
The Trust, except for U.S. Government and Money Market Fund, may write covered
options or purchase options contracts for the purpose of hedging against changes
in the market value of the underlying securities or foreign currencies.
The Funds will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
Each Fund, except for U.S. Government and Money Market Fund, may purchase
options which are included in the Funds' Schedule of Investments and
subsequently marked-to-market to reflect the current value of the option. When a
purchased option is exercised, the cost of the security is adjusted by the
amount of premium paid. The risk associated with purchased options is limited to
the premium paid.
J. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
Each Fund may engage in when-issued or delayed delivery transactions. The
Funds 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.
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+
Fund Billion Billion Billion
- - - ---------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Aggressive Growth Fund.................. 0.70% 0.65% 0.60%
Balanced Fund........................... 0.55% 0.50% 0.45%
Growth Fund............................. 0.70% 0.65% 0.60%
High Yield Fund......................... 0.65% 0.60% 0.55%
Money Market Fund....................... 0.40% 0.35% 0.30%
U.S. Government Securities Fund......... 0.45% 0.40% 0.35%
</TABLE>
The Adviser has agreed to assume expenses and reduce the advisory fee for the
benefit of the Money Market Fund 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. For
44
<PAGE>
PHOENIX SERIES FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED) (CONTINUED)
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 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 $227,516
for Class A shares, deferred sales charges of $339,733 for Class B shares and
$858 for Class C shares, for the six months ended April 30, 1999. In addition,
each Fund except the Money Market Fund pays PEPCO a distribution fee at an
annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00% for
Class C shares of the High Yield Fund applied to the average daily net assets of
each Fund; the distribution fee for the Money Market Fund is 0% and 0.75% for
Class A and Class B, respectively. The distributor has advised the Trust that of
the total amount expensed for the six months ended April 30, 1999, $1,637,299
was retained by the Distributor, $5,414,753 was earned by unaffiliated
participants, and $725,506 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Trust, 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 six months ended April 30, 1999, transfer
agent fees were $3,689,993 of which PEPCO retained $1,559,982 which is net of
fees paid to State Street.
At April 30, 1999, 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 Class B.......... 14,432 $ 283,004
High Yield Fund Class A................. 456 3,649
High Yield Fund Class C................. 11,972 95,540
Money Market Fund Class A............... 11,360,408 11,360,408
U.S. Government Securities Fund Class
A..................................... 328 3,100
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the six months ended April 30, 1999
(excluding U.S. Government and agency securities and short-term securities)
aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
-------------- --------------
<S> <C> <C>
Aggressive Growth Fund................ $ 228,481,457 $ 244,069,598
Balanced Fund......................... 540,979,894 609,157,886
Growth Fund........................... 1,653,028,873 1,965,612,427
High Yield Fund....................... 248,987,438 225,463,871
U.S. Government Securities Fund....... 4,000,000 53,824,003
</TABLE>
Purchases and sales of U.S. Government and agency securities during the six
months ended April 30, 1999, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Balanced Fund............................ $ 80,596,047 $ 71,980,828
U.S. Government Securities Fund.......... 143,958,288 103,106,940
</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 Funds 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 Fund Fund
- - - --------------------- -------------- ----------- -------------
<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>
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.
45
<PAGE>
PHOENIX BALANCED 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--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
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
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
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
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
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>
PHOENIX SERIES FUND
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a.1 Agreement and Declaration of Trust, as amended, filed via EDGAR as
Exhibit 1.1 with Post-Effective Amendment No. 84 on February 27,
1997, and incorporated herein by reference.
a.2 Amendments dated May 25, 1994 and August 24, 1994 to Agreement and
Declaration of Trust, as amended, filed via EDGAR as Exhibit 1.2
with Post-Effective Amendment No. 84 on February 27, 1997, and
incorporated herein by reference.
a.3 Amendment dated November 15, 1995 to Agreement and Declaration of
Trust, as amended, filed via EDGAR as Exhibit 1.3 with
Post-Effective Amendment No. 83 on February 28, 1996, and
incorporated herein by reference.
a.4 Amendment dated May 22, 1996 to Agreement and Declaration of Trust,
as amended, filed via EDGAR as Exhibit 1.4 with Post-Effective
Amendment No. 84 on February 27, 1997, and incorporated herein by
reference.
b. None.
c. Reference is made to Article IV of the Registrant's Declaration of
Trust, as amended, and filed with the Registration Statement
referred to in Exhibit a.1.
d.1 Investment Advisory Agreement between the Registrant and Phoenix
Investment Counsel, Inc. dated January 1, 1994 covering the
Aggressive Growth Fund Series, Balanced Fund, Growth Fund, High
Yield Fund, Money Market Fund, and Bond Fund, filed via EDGAR as
Exhibit 5 with Post-Effective Amendment No. 84 on February 27,
1997, and incorporated herein by reference.
d.2 Subadvisory Agreement between Phoenix Investment Counsel, Inc. and
Roger Engemann & Associates, Inc. dated June 26, 1998 covering the
Aggressive Growth Fund, filed via EDGAR with Post-Effective
Amendment No. 87 on March 1, 1999, and incorporated herein by
reference.
d.3* Subadvisory Agreement between Phoenix Investment Counsel, Inc. and
Roger Engemann & Associates dated August 6, 1999, covering the
Capital Growth Fund, to be filed by amendment.
e.1 Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation, dated November 19, 1997, filed via EDGAR as
Exhibit 6.1 with Post-Effective Amendment No. 85 on December 29,
1997, and incorporated herein by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning Corporation
and dealers, filed via EDGAR as Exhibit 6.2 with Post-Effective
Amendment No. 85 on December 29, 1997, and incorporated herein by
reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement,
filed via EDGAR as Exhibit 6.3 with Post-Effective Amendment No. 85
on December 29, 1997, and incorporated herein by reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix Family
of Funds, filed via EDGAR as Exhibit 6.4 with Post-Effective
Amendment No. 85 on December 29, 1997, and incorporated herein by
reference.
f. None.
g.1 Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997, filed via EDGAR as Exhibit 8.1
with Post-Effective Amendment No. 85 on December 29, 1997, and
incorporated herein by reference.
h.1 Transfer Agency and Service Agreement between Registrant and
Phoenix Equity Planning Corporation dated June 1, 1994, filed via
EDGAR as Exhibit 9.1 with Post-Effective Amendment No. 84 on
February 27, 1997, and incorporated herein by reference.
h.2 Amended and Restated Financial Agent Agreement between Registrant
and Phoenix Equity Planning Corporation dated November 19, 1997,
filed via EDGAR as Exhibit 9.2 with Post-Effective Amendment No. 85
on December 29, 1997, and incorporated herein by reference.
h.3 Sub-Transfer Agent Agreement Between Phoenix Equity Planning
Corporation, and State Street Bank & Trust Company, dated July 21,
1994, filed via EDGAR as Exhibit 9.3 with Post-Effective Amendment
No. 85 on December 27, 1997, and incorporated herein by reference.
C1
<PAGE>
h.4 First Amendment to the Amended and Restated Financial Agent
Agreement between Registrant and Phoenix Equity Planning
Corporation, effective as of February 27, 1998, filed via Edgar
with Post-Effective Amendment No. 87 on March 1, 1999, and
incorporated herein by reference.
h.5 Second Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning Corporation, dated
July 31, 1998 filed via Edgar with Post-Effective Amendment No. 87
on March 1, 1999, and incorporated herein by reference.
i. Opinion of Counsel as to legality of the shares, filed with
Post-Effective Amendment No. 82 on March 1, 1995, and filed via
EDGAR as Exhibit 10 with Post-Effective Amendment No. 84 on
February 27, 1997, and incorporated by reference. (Consent or new
opinion of counsel to be filed by amendment.)
j.* Written Consent of PricewaterhouseCoopers LLP.
k. Not Applicable.
l. None.
m.1 Class A Shares Amended and Restated Distribution Plan pursuant to
Rule 12-b 1 under the Investment Company Act of 1940, filed via
EDGAR as Exhibit 15.1 with Post-Effective Amendment No. 85 on
December 29, 1997, and incorporated herein by reference.
m.2 Class B Shares Amended and Restated Distribution Plan pursuant to
Rule 12-b 1 under the Investment Company Act of 1940, filed via
EDGAR as Exhibit 15.2 with Post-Effective Amendment No. 85 on
December 29, 1997, and incorporated herein by reference.
m.3 Form of Class C Shares Amended and Restated Distribution Plan
pursuant to Rule 12-b 1 under the Investment Company Act of 1940,
filed via EDGAR as Exhibit 15.3 with Post-Effective Amendment No.
85 on December 29, 1997, and incorporated herein by reference.
o.1 Amended and Restated Rule 18f-3 Multi-Class Distribution Plan
effective November 19, 1997, filed via EDGAR as Exhibit 18.1 with
Post-Effective Amendment No. 85 on December 29, 1997, and
incorporated herein by reference.
o.2 First Amendment to Amended and Restated Plan pursuant to Rule
18f-3, effective August 26, 1998 filed via EDGAR with
Post-Effective Amendment No. 87 on March 1, 1999, and incorporated
herein by reference.
p.1 Powers of Attorney for Ms. Curtiss and Messrs. Chesek, Conroy,
Dalzell-Payne, Jeffries, Keith, Morris, Oates, Pedersen, Roth,
Segerson and Weicker, filed via EDGAR with Post-Effective Amendment
No. 86 on December 30, 1998, and incorporated herein by reference.
----------
*Filed herewith
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None.
ITEM 25. INDEMNIFICATION
Incorporated herein by reference is Post-Effective Amendment No. 53 to
Registrant's Registration Statement (No. 2-14069) under the Securities Act
of 1933.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Funds" in the Prospectus and "Services of the Adviser"
and "Management of the Fund" in the Statement of Additional Information, each of
which is included in this Post-Effective Amendment to the Registration
Statement.
For information as to the business, profession, vocation or employment of a
substantial nature of director and officers of the Advisers reference is made to
the Adviser's current Form ADV (PIC: SEC File No. 801-5995 and Duff & Phelps:
SEC File No. 801-14813) filed under the Investment Advisers Act of 1940, and
incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Equity Planning also serves as the principal underwriter for the
following other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities
Fund, Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann
Funds, Phoenix Equity Series Fund, Phoenix-Euclid Funds, Phoenix-Goodwin
California Tax Exempt Bonds, Inc., Phoenix-Goodwin Multi-Sector Fixed
Income Fund, Inc., Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix Investment Trust 97, Phoenix Multi-Portfolio Fund,
Phoenix-Oakhurst Income & Growth Fund, Phoenix Strategic Allocation Fund,
Inc., Phoenix-Seneca Funds Phoenix Strategic Equity Series Fund,
C2
<PAGE>
Phoenix-Zweig Trust, Phoenix Home Life Variable Universal Life Account,
Phoenix Home Life Variable Accumulation Account, PHL Variable
Accumulation Account, Phoenix Life and Annuity Variable Universal Life
Account and PHL Variable Separate Account MVAl.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Trustee and President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Senior Vice President Vice President
100 Bright Meadow Blvd. and Chief Financial Officer
P.O. Box 1900
Enfield, CT 06083-1900
John F. Sharry Executive Vice President, Executive Vice President
56 Prospect St. Retail Distribution
P.O. Box 150480
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director, Vice President
56 Prospect St. Operations and Service
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect St. Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
55 East Monroe Street Secretary
Suite 3600
Chicago, IL 60603
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an
affiliated person of the Registrant or an affiliated person of such
affiliated person, directly or indirectly, from the Registrant during the
Registrant's last fiscal year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include herein described
Series' investment adviser, Phoenix Investment Counsel, Inc.; Registrant's
financial agent, transfer agent and principal underwriter, Phoenix Equity
Planning Corporation; Registrant's dividend disbursing agent and custodian,
State Street Bank and Trust Company. The address of the Secretary of the Trust
is 101 Munson Street, Greenfield, Massachusetts 01301; the address of Phoenix
Investment Counsel, Inc. is 56 Prospect Street, Hartford, Connecticut 06115; the
address of Duff & Phelps Investment Management Co. is 55 East Monroe Street,
Chicago, Illinois 60603; the address of Phoenix Equity Planning Corporation is
100 Bright Meadow Boulevard, P.0. Box 2200, Enfield, Connecticut 06083-2200; the
address of the dividend disbursing agent is P.O. Box 8301, Boston, Massachusetts
02266-8301, Attention: Phoenix Funds, and the address of the custodian is P.O.
Box 351, Boston, Massachusetts 02101.
C3
<PAGE>
ITEM 29. MANAGEMENT SERVICES
All management-related service contracts are discussed in Part A or B of this
Registration Statement.
ITEM 32. UNDERTAKINGS
Not applicable.
C4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund certifies that it meets all of the requirements
for effectiveness of this registration statement under rule 485(b) of the
Securities Act and has duly caused this amendment to the registration statement
to be signed on its behalf by the undersigned, duly authorized, in the City of
Hartford and the State of Connecticut on the 8th day of October, 1999.
PHOENIX SERIES FUND
ATTEST: /s/ Pamela S. Sinofsky BY: /s/ Philip R. McLoughlin
------------------------- ------------------------
Pamela S. Sinofsky Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities indicated, on this 8th day of October, 1999.
SIGNATURE TITLE
--------- -----
- - ---------------------------------------- Trustee
Robert Chesek*
- - ---------------------------------------- Trustee
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer (Principal
- - ---------------------------------------- Financial and
Nancy G. Curtiss Accounting Officer)
- - ---------------------------------------- Trustee
Harry Dalzell-Payne*
- - ---------------------------------------- Trustee
Francis E. Jeffries*
- - ---------------------------------------- Trustee
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and President
- - ---------------------------------------- (Principal Executive Officer)
Philip R. McLoughlin
- - ---------------------------------------- Trustee
Everett L. Morris*
- - ---------------------------------------- Trustee
James M. Oates*
- - ---------------------------------------- Trustee
Calvin J. Pedersen*
- - ---------------------------------------- Trustee
Herbert Roth, Jr.*
- - ---------------------------------------- Trustee
Richard E. Segerson*
- - ---------------------------------------- Trustee
Lowell P. Weicker, Jr.*
By /s/ Philip R. McLoughlin
---------------------------------
* Philip R. McLoughlin Attorney-in-fact pursuant to powers of attorney
filed previously.
S-1
EXHIBIT d.3
SUBADVISORY AGREEMENT
<PAGE>
PHOENIX SERIES FUND
SUBADVISORY AGREEMENT
---------------------
August 6, 1999
Roger Engemann & Associates, Inc.
600 North Rosemead Boulevard
Pasadena, California 91107-2101
RE: SUBADVISORY AGREEMENT
Gentlemen:
Phoenix Series Fund (the "Trust") is a diversified open-end investment company
of the series type registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder. The
shares of the Trust are offered or may be offered in several series, including
the Phoenix-Goodwin Growth Fund (hereafter referred to as the "Fund").
Phoenix Investment Counsel, Inc. (the "Adviser") evaluates and recommends series
advisers for the Trust and is responsible for the day-to-day management of the
Fund.
1. Employment as a Subadviser. The Adviser, being duly authorized, hereby
employs Roger Engemann & Associates, Inc. (the "Subadviser") as a
subadviser to invest and reinvest the assets of the Fund on the terms
and conditions set forth herein. The services of the Subadviser
hereunder are not to be deemed exclusive; the Subadviser may render
services to others and engage in other activities which do not conflict
in any material manner in the Subadviser's performance hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a subadviser to the Adviser and agrees to use
its best professional judgment to make investment decisions for the
Fund in accordance with the provisions of this Agreement.
3. Services of Subadviser. The Subadviser shall provide the services set
forth herein and in Schedule A attached hereto and made a part hereof.
In providing management services to the Fund, the Subadviser shall be
subject to the investment objectives, policies and restrictions of the
Trust as they apply to the Fund and as set forth in the Trust's
then-current Prospectus and Statement of Additional Information (as the
same may be modified from time to time), and to the Trust's Agreement
and Declaration of Trust and By-Laws, to the investment and other
restrictions set forth in the Act, the Securities Act of 1933 and the
Internal Revenue Code and the rules and regulations thereunder, and to
the supervision and control of the Trustees of the Trust (the
"Trustees"). The Subadviser shall not, without the Adviser's prior
approval, effect any transactions which would cause the Fund at the
time of the transaction to be out of compliance with any of such
restrictions or policies.
4. Expenses. The Subadviser shall furnish at its own expense, or pay the
expenses of the Adviser, for the following:
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(a) Office facilities, including office space, furniture and
equipment utilized by its employees, in the fulfillment
of Subadviser's responsibilities hereunder;
(b) Personnel necessary to perform the functions required to
manage the investment and reinvestment of each Fund's
assets (including those required for research,
statistical and investment work), and to fulfill the
other functions of the Subadviser hereunder;
(c) Personnel to serve without salaries for the Trust as
officers or agents of the Trust. The Subadviser need not
provide personnel to perform, or pay the expenses of the
Adviser for, services customarily performed for an
open-end management investment company by its national
distributor, custodian, financial agent, transfer agent,
auditors and legal counsel; and
(d) Compensation and expenses, if any, of the Trustees who
are also full-time employees of the Subadviser.
5. Transaction Procedures. All transactions for the Fund will be
consummated by payment to, or delivery by, the Custodian(s) from time
to time designated by the Trust (the "Custodian"), or such depositories
or agents as may be designated by the Custodian pursuant to its
agreement with the Trust (the "Custodian Agreement"), of all cash
and/or securities due to or from the Fund. The Subadviser shall not
have possession or custody of such cash and/or securities or any
responsibility or liability with respect to such custody. The
Subadviser shall advise the Custodian and confirm in writing to the
Trust all investment orders for the Fund placed by it with brokers and
dealers at the time and in the manner set forth in the Custodian
Agreement and in Schedule B hereto (as amended from time to time). The
Trust shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction
initiated by the Subadviser. The Trust shall be responsible for all
custodial arrangements and the payment of all custodial charges and
fees, and, upon giving proper instructions to the Custodian, the
Subadviser shall have no responsibility or liability with respect to
custodial arrangements or the acts, omissions or other conduct of the
Custodian.
6. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Fund transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Fund securities for
the Trust, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
cost to the Trust, so long as the Subadviser reasonably believes that
the broker or dealer selected by it can be expected to obtain "best
execution" on the particular transaction and determines in good faith
that the commission cost is reasonable in relation to the value of the
brokerage and research services (as defined in Section 28(e)(3) of the
Securities Exchange Act of 1934) provided by such broker or dealer to
the Subadviser, viewed in terms of either that particular transaction
or of the Subadviser's overall responsibilities with respect to its
clients, including the Trust, as to which the Subadviser exercises
investment discretion, notwithstanding that the Trust may not be the
direct or exclusive beneficiary of any such services or that another
broker may be willing to charge the Trust a lower commission on the
particular transaction.
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B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to require that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Adviser and the
Subadviser, shall be executed by brokers and dealers that provide
brokerage or research services to the Trust or that will be of value to
the Trust in the management of its assets, which services and
relationship may, but need not, be of direct or exclusive benefit to
the Fund. In addition, subject to paragraph A above, the applicable
Conduct Rules of the National Association of Securities Dealers, Inc.
and other applicable law, the Trust shall have the right to request
that transactions be executed by brokers and dealers by or through whom
sales of shares of the Trust are made.
C. The Subadviser shall not execute any transactions for the Fund with
a broker or dealer that is an "affiliated person" (as defined in the
Act) of the Trust, the Subadviser or the Adviser without the prior
written approval of the Trust.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule C. Pursuant to the Investment
Advisory Agreement between the Trust and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Trust, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Fund and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act,
other federal or state securities laws or common law).
9. Confidentiality. Subject to the duty of the Subadviser to comply with
applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Fund and the actions of
the Subadviser and the Trust in respect thereof.
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Adviser in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Adviser to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur and to
take the steps it deems necessary.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "investment adviser" under the
Investment Advisers Act of 1940 ("Advisers Act").
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B. It will maintain, keep current and preserve on behalf of
the Trust, in the manner required or permitted by the Act and
the Rules thereunder, the records identified in Schedule D (as
amended from time to time). The Subadviser agrees that such
records are the property of the Trust, and will be surrendered
to the Trust or to the Adviser as agent of the Trust promptly
upon request of either.
C. It has a written code of ethics complying with the
requirements of Rule 17j-l under the Act and will provide the
Adviser with a copy of the code of ethics and evidence of its
adoption. Subadviser acknowledges receipt of the written code
of ethics adopted by and on behalf of the Trust (the "Code of
Ethics"). Within 10 days of the end of each calendar quarter
while this Agreement is in effect, a duly authorized
compliance officer of the Subadviser shall certify to the
Trust and to the Adviser that the Subadviser has complied with
the requirements of Rule 17j-l during the previous calendar
quarter and that there has been no violation of its code of
ethics, or the Code of Ethics, or if such a violation has
occurred, that appropriate action was taken in response to
such violation. The Subadviser shall permit the Trust and
Adviser to examine the reports required to be made by the
Subadviser under Rule 17j-l(c)(1) and this subparagraph.
D. Reference is hereby made to the Declaration of Trust dated
July 28, 1980, establishing the Trust, a copy of which has
been filed with the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed with the
Secretary of the Commonwealth of Massachusetts and elsewhere
as required by law. The name Phoenix Series Fund refers to the
Trustees under said Declaration of Trust, as Trustees and not
personally, and no Trustee, shareholder, officer, agent or
employee of the Trust shall be held to any personal liability
in connection with the affairs of the Trust; only the trust
estate under said Declaration of Trust is liable. Without
limiting the generality of the foregoing, neither the
Subadviser nor any of its officers, directors, partners,
shareholders or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had
directly or indirectly to any personal, statutory, or other
liability of any shareholder, Trustee, officer, agent or
employee of the Trust or of any successor of the Trust,
whether such liability now exists or is hereafter incurred for
claims against the trust estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, and the Adviser, which
amendment, other than amendments to Schedules B and D, is subject to
the approval of the Trustees and the Shareholders of the Trust as and
to the extent required by the Act.
13. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement. Unless terminated as
hereinafter provided, this Agreement shall remain in full force and
effect until December 31, 1999, and thereafter only so long as its
continuance has been specifically approved at least annually by the
Trustees in accordance with Section 15(a) of the Act, and by the
majority vote of the disinterested Trustees in accordance with the
requirements of Section 15(c) thereof.
14. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise, upon sixty (60) days' written notice to the other parties,
but any
<PAGE>
such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
15. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
<PAGE>
16. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
PHOENIX INVESTMENT COUNSEL, INC.
By:/s/ Michael E. Haylon
---------------------
Michael E. Haylon
President
ACCEPTED:
ROGER ENGEMANN & ASSOCIATES, INC.
By:/s/ Roger Engemann
- - ---------------------------------
Name: J. Roger Engemann
Title: President
SCHEDULES: A. Subadviser Functions
B. Operational Procedures
C. Fee Schedule
D. Record Keeping Requirements
<PAGE>
SCHEDULE A
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SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the Fund
assets, the Subadviser shall provide, at its own expense:
(a) An investment program for the Fund consistent with its
investment objectives based upon the development, review and
adjustment of buy/sell strategies approved from time to time
by the Board of Trustees and Adviser;
(b) Implementation of the investment program for the Fund based
upon the foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the
Adviser, with respect to: i) compliance with the Code of
Ethics and the Subadviser's code of ethics; ii) compliance
with procedures adopted from time to time by the Trustees of
the Trust relative to securities eligible for resale under
Rule 144A under the Securities Act of 1933, as amended; iii)
diversification of Fund assets in accordance with the
then-prevailing prospectus and statement of additional
information pertaining to the Fund and governing laws; iv)
compliance with governing restrictions relating to the fair
valuation of securities for which market quotations are not
readily available or considered "illiquid" for the purposes of
complying with the Fund limitation on acquisition of illiquid
securities; v) any and all other reports reasonably requested
in accordance with or described in this Agreement; and, vi)
the implementation of the Fund investment program, including,
without limitation, analysis of Fund performance;
(d) Attendance by appropriate representatives of the Subadviser at
meetings requested by the Adviser or Trustees at such time(s)
and location(s) as reasonably requested by the Adviser or
Trustees; and
(e) Participation, overall assistance and support in marketing the
Fund, including, without limitation, meetings with pension
fund representatives, broker/dealers who have a sales
agreement with Phoenix Equity Planning Corporation, and other
parties requested by the Adviser.
<PAGE>
SCHEDULE B
----------
OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank and Trust Company (the
"Custodian"), the custodian for the Trust.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Trust, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Trust. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
<PAGE>
SCHEDULE C
----------
SUBADVISORY FEE
For services provided to the Trust pursuant to paragraph 3 hereof, the
Adviser will pay to the Subadviser, on or before the 10th day of each month, a
fee, payable in arrears, at the annual rate of 0.10% of the average daily net
assets of the Phoenix-Goodwin Growth Fund up to $3 billion and 0.30% of such
value in excess of $3 billion. The fees shall be prorated for any month during
which this agreement is in effect for only a portion of the month. In computing
the fee to be paid to the Subadviser, the net asset value of the Trust and each
Fund shall be valued as set forth in the then-current registration statement of
the Trust.
<PAGE>
SCHEDULE D
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RECORDS TO BE MAINTAINED BY THE SUBADVISER
1. (Rule 31a-1(b)(5)) A record of each brokerage order, and all other
series purchases and sales, given by the Subadviser on behalf of the
Trust for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications
or cancellations thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of
the Trust.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of series securities to named broker or dealers was effected, and
the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Trust by brokers or dealers.
(ii) The supplying of services or benefits by brokers or
dealers to:
(a) The Trust,
(b) The Adviser (Phoenix Investment Counsel, Inc.)
(c) The Subadviser, and
(d) Any person other than the foregoing.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made
available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. The name of the person responsible for making the
determination of such allocation and such division of
brokerage commissions or other compensation.
3. (Rule 3la-(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of series securities. Where an authorization is made
by a committee or group, a record shall be kept of the names of its
members who participate in the authorization. There shall be retained
as part of this record: any memorandum, recommendation or instruction
supporting or authorizing the purchase or sale of series securities and
such other information as is appropriate to support the authorization.*
- - ------------------
* Such information might include: current financial information, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or subadviser review.
<PAGE>
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisers by rule
adopted under Section 204 of the Investment Advisers Act of 1940, to
the extent such records are necessary or appropriate to record the
Subadviser's transactions for the Trust.
2
Exhibit j
CONSENT OF INDEPENDENT ACCOUNTANTS
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 89 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 17, 1998, relating to the financial
statements and financial highlights appearing in the October 31, 1998 Annual
Report to Shareholders of the Phoenix Series Fund, which is also incorporated by
reference into the Registration Statement. We also consent to the reference to
us under the heading "Financial Highlights" in the Prospectus and under the
heading "Other Information -- Independent Accountants" in the Statement of
Additional Information.
PricewaterhouseCoopersLLP
Boston, Massachusetts
October 8, 1999
