As filed with the Securities and Exchange Commission on October 29, 1996
Registration Nos. 2-16590
811-945
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 62 [X]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 62
(Check appropriate box or boxes.)
-------------
Phoenix Worldwide Opportunities Fund
(Exact Name of Registrant as Specified in Declaration of Trust)
-------------
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)
c/o Phoenix Equity Planning
Corporation -- Shareholder Services
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
-------------
Philip R. McLoughlin
Vice Chairman and Chief Executive Officer
Phoenix Duff & Phelps Corporation
56 Prospect Street
Hartford, Connecticut 06115-0479
(name and address of Agent for Service)
-------------
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on October 30, 1996 pursuant to paragraph (b) of Rule 485
[ ] 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.
Registrant has registered an indefinite number of shares under the Securities
Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940. A
Rule 24f-2 Notice for the fiscal year ended on June 30, 1996 was filed by
Registrant with the Commission on August 27, 1996.
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
Cross Reference Sheet Pursuant to Rule 404
PART A
<TABLE>
<CAPTION>
Part I of Form N-1A Prospectus Caption
- ----------------------------------------------- ------------------------------------------------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Introduction; Fund Expenses
3. Condensed Financial Information Financial Highlights; Performance Information
4. General Description of Registrant Introduction; Investment Objectives and Policies;
Investment Techniques and Related Risks; Additional
Information
5. Management of the Fund Introduction; Management of the Fund; Distribution Plans
6. Capital Stock and Other Securities Introduction; Investment Restrictions; Dividends,
Distributions and Taxes; Additional Information; Investor
Accounts and Services Available
7. Purchase of Securities Being Offered How to Buy Shares; The Underwriter; How to Obtain Reduced
Sales Charges; Net Asset Value; Investor Accounts and
Services Available
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceeding Not Applicable
PART B
Part I of Form N-1A Statement of Additional Information
- ----------------------------------------------- -----------------------------------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Cover Page; The Fund
13. Investment Objectives and Policies Cover Page; Investment Objective and Policies; Other
Investment Techniques; Investment Restrictions
14. Management of the Fund Services of the Adviser; Trustees and Officers
15. Control Persons and Principal Holders of
Securities Not Applicable
16. Investment Advisory & Other Services Trustees and Officers
17. Brokerage Allocation and Other Practices Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities Not Applicable
19. Purchase, Redemption and Pricing of How to Buy Shares; Alternative Purchase Arrangements;
Securities Exchange Privileges; Redemption of Shares; Net Asset Value;
Reinstatement Privilege
20. Tax Status Dividends, Distributions and Taxes
21. Underwriter Distribution Plans
22. Calculation of Performance Data Performance Information
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
PHOENIX
FUNDS
Phoenix Worldwide Opportunities Fund
PROSPECTUS
OCTOBER 30, 1996
[Phoenix Duff & Phelps Logo]
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
October 30, 1996
Phoenix Worldwide Opportunities Fund (the "Fund") is a diversified open-end
investment management company which invests in domestic and non-U.S. issuers,
including companies, governments, governmental agencies and international
organizations with the investment objective of capital appreciation. Equity
securities are the major portion of the Fund's investments. Securities will be
selected primarily for growth potential, and any income dividends derived from
portfolio holdings will be considered incidental to the Fund's investment
objective. There can be no assurance that the Fund's objective will be achieved.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. No dealer, salesperson or any
other person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Fund, Adviser, or Distributor. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state in which or to any person to whom it is
unlawful to make such offer. Neither the delivery of this Prospectus nor any
sale hereunder shall, under any circumstances, create any implication that
information herein is correct at any time subsequent to its date. Investors
should read and retain this Prospectus for future reference. Additional
information about the Fund is contained in the Statement of Additional
Information, dated October 30, 1996, which has been filed with the Securities
and Exchange Commission (the "Commission") and is available upon request at no
charge by calling (800) 243-4361 or by writing to Phoenix Equity Planning
Corporation at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut
06083-2200. The Statement of Additional Information is incorporated herein by
reference.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, credit union, or affiliated entity, and are not federally
insured or otherwise protected by the Federal Deposit Insurance Corporation
(FDIC), the Federal Reserve Board, or any other agency and involve investment
risk, including possible loss of principal.
================================================================================
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS/EXCHANGES: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION 3
FUND EXPENSES 4
FINANCIAL HIGHLIGHTS 5
PERFORMANCE INFORMATION 6
INVESTMENT OBJECTIVE AND POLICIES 6
INVESTMENT TECHNIQUES AND RELATED RISKS 7
INVESTMENT RESTRICTIONS 9
MANAGEMENT OF THE FUND 9
DISTRIBUTION PLANS 10
HOW TO BUY SHARES 11
INVESTOR ACCOUNTS AND SERVICES AVAILABLE 16
NET ASSET VALUE 18
HOW TO REDEEM SHARES 18
DIVIDENDS, DISTRIBUTIONS AND TAXES 19
ADDITIONAL INFORMATION 20
2
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of
Phoenix Worldwide Opportunities Fund (the "Fund"). The Fund is a diversified,
open-end management investment company established as a Massachusetts
business trust. The Fund's investment objective is capital appreciation. The
Fund invests in domestic and non-U.S. issuers.
Investment Adviser
National Securities & Research Corporation (the "Adviser" or "National") is
the investment adviser of the Fund. The Adviser is a subsidiary of Phoenix Duff
& Phelps Corporation and prior to November 1, 1995 was an indirect subsidiary of
Phoenix Home Life Mutual Insurance Company. See "Management of the Fund" for a
description of the Investment Advisory Agreement and management fees.
Distribution Plans and Distributor
Phoenix Equity Planning Corporation ("Equity Planning" or "Distributor")
serves as national distributor of the Fund's shares. See "Distribution Plans"
and the Statement of Additional Information. Equity Planning also acts as
financial agent of the Fund and as such receives a quarterly fee based on the
average of the aggregate daily net asset values of the Fund at an annual rate of
$300 per $1 million. Equity Planning also serves as the Fund's transfer agent.
The Fund has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940 as amended (the "1940 Act") for all classes.
Pursuant to the distribution plan adopted for Class A Shares, the Fund shall
reimburse the Distributor up to a maximum annual rate of 0.30% of the Fund's
average daily Class A Share net assets for distribution expenditures incurred in
connection with the sale and promotion of Class A Shares and for furnishing
shareholder services. Although the Class A shares Plan continues to provide for
a 0.30% distribution fee, the Distributor has voluntarily agreed to limit the
Rule 12b-1 fee charged to Class A Shares to 0.25% for the fiscal year 1997.
Pursuant to the distribution plan adopted for Class B Shares, the Fund shall
reimburse the Distributor up to a maximum annual rate of 1.00% of the Fund's
average daily Class B Share net assets for distribution expenditures incurred in
connection with the sale and promotion of Class B Shares and for furnishing
shareholder services. See "Distribution Plans."
Purchase of Shares
The Fund offers two classes of shares which may be purchased at a price equal
to their net asset value per share plus a sales charge which, at the election of
the purchaser, may be imposed (i) at the time of the purchase (the "Class A
Shares") or (ii) on a contingent deferred basis (the "Class B Shares").
Completed applications for the purchase of shares should be mailed to the
Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301, Boston,
MA 02266-8301.
Class A Shares are offered to the public at the next determined net asset
value after receipt of the order by State Street Bank and Trust Company plus a
maximum sales charge of 4.75% of the offering price (4.99% of the amount
invested) on single purchases of less than $50,000. The sales charge for Class A
Shares is reduced on a graduated scale on single purchases of $50,000 or more
and subject to other conditions stated below. See "How to Buy Shares", "How to
Obtain Reduced Sales Charges on Class A Shares" and "Net Asset Value."
Class B Shares are offered to the public at the next determined net asset
value after receipt of an order by State Street Bank and Trust Company, with no
sales charge. Class B Shares are subject to a sales charge if they are redeemed
within five years of purchase. See "How to Buy Shares" and "Deferred Sales
Charge Alternative--Class B Shares."
Shares of each Class represent an identical interest in the investment
portfolio of the Fund and have the same rights, except that Class B Shares bear
the cost of the higher distribution fees which cause the Class B Shares to have
a higher expense ratio and to pay lower dividends than Class A Shares. See "How
to Buy Shares."
Minimum Initial and Subsequent Investments
The minimum initial investment is $500 ($25 if using the bank draft
investment program designated "Investo-Matic") and the minimum subsequent
investment is $25. Exceptions to the minimum and subsequent investment
amounts are available under certain circumstances. See "How to Buy Shares."
Redemption Price
Class A Shares may be redeemed at any time at the net asset value per share
next computed after receipt of a redemption request by Equity Planning, the
Fund's transfer agent. Class B shareholders redeeming shares within five years
of the date of purchase will normally be assessed a contingent deferred sales
charge. See "How to Redeem Shares."
Risk Factors
There can be no assurance that the Fund will achieve its investment
objectives. The Fund is intended for long-term investors who can accept the
risks involved in investments in non-U.S. securities. Investing in such
securities involves different risk considerations from those associated with
investing solely in U.S. securities. In addition, investors should consider
risks inherent in an international portfolio, including foreign exchange rate
fluctuations and exchange controls, and certain of the investing policies which
the Fund may employ, including the entering into of forward foreign currency
exchange contracts and option transactions. Investors should be aware that the
Fund's net asset value will fluctuate as the fair market value of the securities
in which the Fund invests fluctuates. In addition, special risks may be
presented by the particular types of securities in which the Fund may invest.
See "Investment Objective and Policies."
3
<PAGE>
FUND EXPENSES
The following table illustrates all fees and expenses a shareholder will
incur. The fees and expenses set forth in the table were for fiscal year ended
June 30, 1996.
<TABLE>
<CAPTION>
Class A Class B
Shares Shares
----------- --------------------------
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price) 4.75% None
Maximum Sales Load Imposed on Reinvested Dividends None None
Deferred Sales Load 5% during the first
year, decreasing 1%
annually to 2%
during the fourth
and fifth years;
thereafter decreasing
None to 0% after the fifth year.
Redemption Fee None None
Exchange Fee None None
Annual Fund Expenses
(as a percentage of net assets for the year ended June 30, 1996)
Management Fees 0.75% 0.75%
12b-1 Fees (a) 0.25% 1.00%
Other Operating Expenses 0.60% 0.60%
----- -----
Total Fund Operating Expenses 1.60% 2.35%
===== =====
</TABLE>
(a) "Rule 12b-1 Fees" represent an asset based sales charge that, for a
long term shareholder, may be higher than the maximum front-end sales charge
permitted by the National Association of Securities Dealers, Inc. ("NASD").
While the Class A Share Distribution Plan continues to provide for a 0.30%
distribution fee, the Distributor has voluntarily agreed to limit the fee to
0.25% for the fiscal year 1997. Rule 12b-1 fees stated for Class B Shares
include a service fee. See "Distribution Plans."
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------ -------- --------- --------- -----------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment assuming, (1) a 5% annual return and (2) redemption at the end of
each time period:
Class A Shares 63 $ 96 $130 $228
Class B Shares 74 $103 $146 $250
An investor would pay the following expenses on the same $1,000
investment assuming no redemption at the end of each time
period:
Class A Shares $63 $ 96 $130 $228
Class B Shares $24 $ 73 $126 $250
</TABLE>
*The purpose of the table above is to help the investor understand the
various costs and expenses the investor will bear directly or indirectly. The
example should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown. See "Management of
the Fund," "Distribution Plans," and "How to Buy Shares."
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth certain financial information for respective
fiscal years of the Fund. The financial information has been audited by Price
Waterhouse LLP, independent accountants. Financial statements and notes thereto
are incorporated by reference in the Statement of Additional Information. The
Statement of Additional Information and the Fund's most recent Annual Report
(containing the report of Independent Accountants and additional information
relating to Fund performance) are available at no charge upon request by calling
(800) 243-4361.
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
Year Ended June 30,
------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- -------- --------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 9.04 $ 10.17 $ 8.00 $ 7.18 $ 6.82 $ 7.56
Income from investment
operations:
Net investment income (loss) (0.02)(3) 0.01(3) 0.01 0.03 0.01(2) 0.23(1)
Net realized and unrealized
gain (loss) 1.87 0.56 2.19 0.79 0.36 (0.67)
-------- ------- ------- ------ ------- -------
Total from investment
operations 1.85 0.57 2.20 0.82 0.37 (0.44)
-------- ------- ------- ------ ------- -------
Less distributions:
Dividends from net investment
income -- -- (0.03) -- (0.01) (0.30)
Dividends from net realized
gains (0.60) (1.37) -- -- -- --
In excess of net realized
gains -- (0.33) -- -- -- --
-------- ------- ------- ------ ------- -------
Total distributions (0.60) (1.70) (0.03) -- (0.01) (0.30)
-------- ------- ------- ------ ------- -------
Change in net asset value 1.25 (1.13) 2.17 0.82 0.36 (0.74)
-------- ------- ------- ------ ------- -------
Net asset value, end of period $ 10.29 $ 9.04 $ 10.17 $ 8.00 $ 7.18 $ 6.82
======== ======= ======= ====== ======= =======
Total return(4) 21.39% 6.53% 27.46% 11.42% 5.43% (5.27%)
Ratios/supplemental data:
Net assets, end of period
(thousands) $146,052 $126,481 $118,707 $88,870 $63,354 $59,874
Ratio to average net assets of:
Operating expenses 1.60% 1.80% 1.50% 1.88% 2.15%(2) 1.75%(1)
Net investment income (loss) (0.19)% 0.16% 0.09% 0.61% 0.16% 3.46%
Portfolio turnover 245% 277% 259% 95% 51% 76%
</TABLE>
<TABLE>
<CAPTION>
Class B
-------------------
Class A From
-------------------------------------------- Inception
Year Ended June 30, Year 7/15/94
-------------------------------------------- Ended to
1990 1989 1988 1987 6/30/96 6/30/95
--------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 7.49 $ 8.00 $ 10.14 $ 12.36 $ 8.98 $ 10.40
Income from investment
operations:
Net investment income (loss) 0.19(1)(3) 0.16 0.14 0.07 (0.08)(3) (0.02)(3)
Net realized and unrealized
gain (loss) (0.02) (0.53) (0.61) 0.48 1.84 0.30
-------- ------- ------- ------ ------- -------
Total from investment
operations 0.17 (0.37) (0.47) 0.55 1.76 0.28
-------- ------- ------- ------ ------- -------
Less distributions:
Dividends from net investment
income (0.10) (0.14) (0.13) (0.09) -- --
Dividends from net realized
gains -- -- (1.54) (2.68) (0.60) (1.37)
In excess of net realized
gains -- -- -- -- -- (0.33)
-------- ------- ------- ------ ------- -------
Total distributions (0.10) (0.14) (1.67) (2.77) (0.60) (1.70)
-------- ------- ------- ------ ------- -------
Change in net asset value 0.07 (0.51) (2.14) (2.22) 1.16 (1.42)
-------- ------- ------- ------ ------- -------
Net asset value, end of period $ 7.56 $ 7.49 $ 8.00 $ 10.14 $ 10.14 $ 8.98
======== ======= ======= ====== ======= =======
Total return(4) 2.19% (4.62%) (6.49%) 8.56% 20.50% 3.54%(5)
Ratios/supplemental data:
Net assets, end of period
(thousands) $70,388 $33,881 $45,207 $52,631 $5,709 $2,849
Ratio to average net assets of:
Operating expenses 1.33%(1) 1.40% 1.23% 1.20% 2.34% 2.61%(6)
Net investment income (loss) 2.44% 1.83% 1.81% 0.73% (0.86)% (0.33)%(6)
Portfolio turnover 119% 87% 144% 180% 245% 277%
</TABLE>
(1) Net investment income would have been $.22 and $.17 and the ratio of
operating expenses to average net assets would have been 1.89% and 1.64% for
the years ended June 30, 1991 and 1990, respectively, had the Manager not
reimbursed a portion of its management fees, pursuant to the then applicable
expense limitations.
(2) Net investment income would have been the same $.01 and the ratio of
operating expenses to average net assets would have been 2.18% for the year
ended June 30, 1992, had the subadviser not reimbursed a portion of its
management fees.
(3) Computed using average shares outstanding.
(4) Maximum sales load is not reflected in the total return calculation.
(5) Not annualized
(6) Annualized
5
<PAGE>
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in advertisements or
reports to shareholders or prospective investors. Total return figures are
computed separately for Class A and Class B Shares in accordance with formulas
specified by the Securities and Exchange Commission and are based on historical
earnings and are not intended to indicate future performance.
Standardized quotations of average annual total return for Class A and Class B
Shares will be expressed in terms of the average annual compounded rate of
return of a hypothetical investment in either Class A or Class B Shares over a
period of 1, 5 and 10 years (or up to the life of the class of shares).
Standardized total return quotations reflect the deduction of a proportional
share of each Class's expenses (on an annual basis), deduction of the maximum
initial sales load in the case of Class A Shares and the maximum contingent
deferred sales charge applicable to a complete redemption of the investment in
the case of Class B Shares, and assume that all dividends and distributions on
Class A and Class B Shares are reinvested when paid. It is expected that the
performance of Class A Shares will be better than that of Class B Shares as a
result of lower distribution fees paid by Class A Shares. The Fund may also
quote supplementally a rate of total return over different periods of time by
means of aggregate, average, and year-by-year or other types of total return
figures. In addition, the Fund may from time to time publish materials citing
historical volatility for shares of the Fund.
The 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 Morningstar, Inc.
Additionally, the 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, 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
& Poor's The Outlook, and Personal Investor. The 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 against certain widely
acknowledged outside standards or indices for stock and bond market performance,
such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones
Industrial Average, Europe Australia Far East Index (EAFE), Consumer's Price
Index, Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P
500 is a commonly quoted market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 common stocks relative to the base
period 1941-43. The S&P 500 is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of a
few companies listed on the American Stock Exchange or traded over the counter
are included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P 500 represents about
80% of the market value of all issues traded on the New York Stock Exchange.
Advertisements, sales literature and communications may contain information
about the Fund or Adviser's current investment strategies and management style.
Current strategies and style may change to allow the Fund to respond quickly to
a changing market and economic conditions. From time to time the Fund may
include specific portfolio holdings or industries in such communications. To
illustrate components of overall performance, the Fund may separate its
cumulative and average annual returns into income results and capital gains or
losses; or cite separately as a return figure the equity or bond portion of the
Fund's portfolio; or compare the Fund'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, Morgan Stanley Capital International
World (net) Index, First Boston High Yield Index and Salomon Brothers Corporate
and Government Bond Indices.
Performance information for the Fund reflects only the performance of a
hypothetical investment in Class A or Class B Shares of the Fund during the
particular time period on which the calculations are based. Performance
information should be considered in light of the Fund's investment objective and
policies, characteristics and quality of the portfolio, and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future. For a description of the
methods used to determine total return for the Fund, see the Statement of
Additional Information.
The Fund's Annual Report, available upon request and without charge, contains
a discussion of the performance of the Fund and a comparison of that performance
to a securities market index.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is capital appreciation. Any current income
that is earned will be considered incidental to the achievement of capital
appreciation. There can be no assurance that the Fund will achieve its
investment objective. The Fund's investment objective is a fundamental policy
and may not be changed without shareholder approval.
The Fund invests in a diversified portfolio of securities of companies and
governments located throughout the world. The Fund will not limit its
investments to any particular regions of the world or to issuers of any
particular size. The Adviser will seek to identify opportunities for capital
appreciation in developed countries and in countries whose economies are still
emerging and developing.
Under normal circumstances, at least 65% of the total assets of the Fund will
be invested in the securities of issuers located in at least three different
countries, one of which will be the
6
<PAGE>
United States. The Fund will invest primarily in equity securities (common
stocks, preferred stocks, securities convertible into common stocks, warrants
and any rights to purchase common stocks). The Fund may also invest up to 35% of
its assets in non- convertible fixed-income securities of U.S. and non-U.S.
issuers (described below) when it is determined by the Adviser that such
securities are appropriate for achievement of the Fund's investment objective.
The market value of fixed-income securities can be expected to vary inversely to
changes in prevailing interest rates, therefore investing in such fixed-income
securities can provide an opportunity for capital appreciation when interest
rates are expected to decline. The Fund may invest up to 5% of its net assets in
fixed income securities rated below investment grade (commonly referred to as
"junk bonds").
The non-convertible fixed-income securities referred to above will consist of
(1) corporate notes, bonds and debentures of U.S. issuers that are rated high
grade (i.e., rated within the three highest rating categories by a nationally
recognized statistical rating organization ("NRSRO")) or, if unrated, are deemed
by the Adviser to be of comparable quality to those securities that are rated
high grade, (2) corporate notes, bonds, debentures and other securities (such as
Euro-currency instruments) of non-U.S. issuers that are rated within the three
highest rating categories of rating services chosen by the Adviser to rate
foreign debt obligations or, if unrated, are deemed by the Adviser to be of
comparable credit quality to rated securities that may be purchased and (3)
Treasury bills, notes and bonds issued by the United States Government or its
agencies or instrumentalities and securities issued by foreign governments and
supranational agencies (such as the World Bank).
The Fund may, for daily cash management purposes, invest in the
non-convertible fixed-income securities described above or in high quality money
market securities. In addition, the Fund may invest, without limit, in any
combination of the U.S. government securities and money market securities
referred to above when, in the opinion of the Adviser it is determined that a
temporary defensive position is warranted based upon current market conditions.
In such instances, the Fund will not be achieving its stated investment
objective.
The percentage of the Fund's assets invested in particular geographic sectors
will shift from time to time in accordance with the judgment of the Adviser.
INVESTMENT TECHNIQUES AND RELATED RISKS
Covered Call Options
The Fund may write covered call option contracts on U.S. securities which the
Fund owns if such options are listed on an organized securities exchange and the
Adviser determines that it is consistent with the Fund's investment objective.
Forward Foreign Currency Exchange Contracts
In order to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward foreign currency exchange contracts
("forward currency contracts") for the purchase or sale of a specified currency
at a specified future date. Such contracts may involve the purchase or sale of a
foreign currency against the U.S. dollar or may involve two foreign currencies.
The Fund may enter into forward currency contracts either with respect to
specific transactions or with respect to the Fund's portfolio positions. For
example, when the Fund anticipates making a purchase or sale of a security, it
may enter into a forward currency contract in order to set the rate (either
relative to the U.S. dollar or another currency) at which a currency exchange
transaction related to the purchase or sale will be made. Further, when the
Adviser believes that a particular currency may decline compared to the U.S.
dollar or another currency, the Fund may enter into a forward contract to sell
the currency that the Adviser expects to decline in an amount approximating the
value of some or all of the Fund's portfolio securities denominated in that
currency. For a discussion of the risks associated with such contracts, see
"Risk Factors and Special Considerations."
Futures Contracts on Foreign Currencies and Options on Futures Contracts
The Fund may engage in futures contracts on foreign currencies and options on
these futures transactions as a hedge against changes in the value of the
currencies to which the Fund is subject or to which the Fund expects to be
subject in connection with future purchases, in accordance with the rules and
regulations of the Commodity Futures Trading Commission (the "CFTC"). The Fund
also may engage in such transactions when they are economically appropriate for
the reduction of risks inherent in the ongoing management of the Fund.
The Fund may buy and sell futures contracts on foreign currencies and groups
of foreign currencies. The Fund will engage in transactions in only those
futures contracts and options thereon that are traded on a commodities exchange
or a board of trade. A "sale" of a futures contract means the assumption of a
contractual obligation to deliver the specified amount of foreign currency at a
specified price in a specified future month. A "purchase" of a futures contract
means the assumption of a contractual obligation to acquire the currency called
for by the contract at a specified price in a specified future month. At the
time a futures contract is purchased or sold, the Fund must allocate cash or
securities as a deposit payment (initial margin). Thereafter, the futures
contract is valued daily and the payment of "variation margin" may be required,
resulting in the Fund's providing or receiving cash that reflects any decline or
increase in the contract's value, a process known as "marking to market."
Options on Foreign Currencies
The Fund may purchase and write put and call options on foreign currencies
traded on securities exchanges or boards of trade (foreign and domestic) for
hedging purposes in a manner similar to that in which forward currency contracts
and futures contracts on foreign currencies will be employed. Options on foreign
currencies are similar to options on stock, except that the Fund has the right
to take or make delivery of a specified amount of foreign currency, rather than
stock.
The Fund may purchase and write options to hedge the Fund's portfolio
securities denominated in foreign currencies. If there is a
7
<PAGE>
decline in the dollar value of a foreign currency in which the Fund's portfolio
securities are denominated, the dollar value of such securities will decline
even though foreign currency value remains the same. See "Risk Factors and
Special Considerations." To hedge against the decline of the foreign currency,
the Fund may purchase put options on such foreign currency. If the value of the
foreign currency declines, the gain realized on the put option would offset, in
whole or in part, the adverse effect such decline would have on the value of the
portfolio securities. Alternatively, the Fund may write a call option on the
foreign currency. If the value of the foreign currency declines, the option
would not be exercised and the decline in the value of the portfolio securities
denominated in such foreign currency would be offset in part by the premium the
Fund received for the option.
If, on the other hand, the Adviser anticipates purchasing a foreign security
and also anticipates a rise in the value of such foreign currency (thereby
increasing the cost of such security), the Fund may purchase call options on the
foreign currency. The purchase of such options could offset, at least partially,
the effects of the adverse movements of the exchange rates. Alternatively, the
Fund could write a put option on the currency and, if the exchange rates move as
anticipated, the option would expire unexercised.
Other Policies
The Fund is authorized to invest in the securities of other investment
companies subject to the limitations contained in the 1940 Act. In certain
countries, investments by the Fund may only be made through investments in other
investment companies that, in turn, are authorized to invest in the securities
that are issued in such countries. Investors should recognize that the Fund's
purchase of the securities of such other investment companies results in the
layering of expenses such that investors indirectly bear a proportionate part of
the expenses for such investment companies including operating costs, and
investment advisory and administrative fees.
The Fund generally invests for the long-term; however, it may attempt to take
advantage of short-term trends in the market occasioning more trading. In such
cases, the Fund's annual portfolio turnover rate may exceed 100%. The annual
portfolio turnover rate indicates changes in a fund's portfolio. Higher
portfolio turnover in any given year will result in the payment by a fund of
increased amounts of brokerage commissions and will result in the acceleration
of realization of capital gains or losses for tax purposes.
Risk Factors and Special Considerations
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 differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, differences
and inefficiencies in transaction settlement systems, the possibility of
expropriation or confiscatory taxation, adverse changes in investment or
exchange control regulations, political instability which could affect U.S.
investments in foreign countries, and potential restrictions on the flow of
international capital. Additionally, dividends payable on foreign securities may
be subject to foreign taxes withheld prior to distribution. Foreign securities
often trade with less frequency and volume than domestic securities and
therefore may exhibit greater price volatility. Investment in less-developed
countries whose markets are still emerging generally presents 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. Foreign ownership limitations also may be imposed by the
charters of individual companies in developing countries 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.
Significant portions of the Fund's assets will be invested in securities
denominated in foreign currencies. Changes in foreign exchange rates will affect
the value of those securities which are denominated or quoted in currencies
other than the U.S. dollar. Exchange rates are determined by forces of supply
and demand in the foreign exchange markets, 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 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 short and long term.
Many of the foreign securities held by the Fund will not be registered with,
nor the issuers thereof 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 United States economy in such respects as growth of Gross
National Product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
The Fund's use of forward currency contracts involves certain investment
risks and transaction costs to which it might not otherwise be subject. These
include: (1) the Adviser may not always be able to accurately predict movements
within currency
8
<PAGE>
markets, (2) the skills and techniques needed to use forward currency contracts
are different from those needed to select the securities in which the Fund
invests and (3) there is no assurance that a liquid secondary market will exist
that would enable the Adviser to "close out" existing (current) contracts when
doing so is desirable. The Fund's successful use of forward currency contracts,
options on foreign currencies, futures contracts on foreign currencies and
options on such contracts depends upon the Adviser's ability to predict the
direction of the market and political conditions, which require different skills
and techniques than predicting changes in the securities markets generally. For
instance, if the value of the securities being hedged moves in a favorable
direction, the advantage to the Fund would be wholly or partially offset by a
loss in the forward contracts or futures contracts. Further, if the value of the
securities being hedged does not change, the Fund's net income would be less
than if the Fund had not hedged since there are transactional costs associated
with the use of these investment practices. These practices are subject to
various additional risks. The correlation between movements in the price of
options and futures contracts and the price of the currencies being hedged is
imperfect. The use of these instruments will hedge only the currency risks
associated with investments in foreign securities, not market risks. In
addition, if the Fund purchases these instruments to hedge against currency
advances before it invests in securities denominated in such currency and the
currency market declines, the Fund might incur a loss on the futures contract.
The Fund's ability to establish and maintain positions will depend on market
liquidity. The ability of the Fund to close out a futures position or an option
depends upon a liquid secondary market. There is no assurance that liquid
secondary markets will exist for any particular futures contract or option at
any particular time. The loss from investing in futures contracts is potentially
unlimited.
Lower rated securities have speculative characteristics and changes in
economic conditions or other circumstances are more likely to weaken the
issuer's capacity to make principal and interest payments. In addition, the Fund
does not have a policy requiring the sale of a security whose rating drops below
investment grade. See "Special Considerations and Risk Factors" in the Statement
of Additional Information.
INVESTMENT RESTRICTIONS
The Fund may not invest more than 25% of its total assets in any one industry.
In addition, the Fund will not purchase any securities (excluding U.S.
government securities) if by reason thereof more than 5% of its total assets
(taken at current value) would then be invested in securities of a single
issuer. See the Statement of Additional Information for a detailed description
of all of the Fund's investment restrictions.
MANAGEMENT OF THE FUND
The Fund is a mutual fund, technically known as an open-end management
investment company. The Trustees of the Trust are responsible for the overall
supervision of the operations of the Fund and perform the various duties imposed
on Trustees by the 1940 Act and of Massachusetts business trust law.
The Adviser
The investment adviser to the Fund is National, which is located at 56
Prospect Street, Hartford, CT 06115-0486. National is a direct subsidiary of
Phoenix Duff & Phelps Corporation. National also acts as the investment adviser
or manager for Phoenix Multi-Sector Short Term Bond Fund, Phoenix California Tax
Exempt Bonds, Inc., Phoenix Income and Growth Fund, Phoenix Equity Opportunities
Fund Series of Phoenix Strategic Equity Series Fund, and Phoenix Multi- Sector
Fixed Income Fund, Inc. The Adviser currently has approximately $1.7 billion in
assets under management. The Adviser has acted as an investment adviser for over
sixty years.
As compensation for its services, the Adviser receives a fee which is accrued
daily against the value of the Fund's net assets and is paid monthly by the
Fund. The fee is computed at the annual rate of 0.75% of the Fund's average
daily net assets up to $1 billion, 0.70% of the Fund's average daily net assets
between $1 billion and $2 billion, and 0.65% of the Fund's average daily net
assets in excess of $2 billion. The total advisory fee of 0.75% of the aggregate
net assets of the Fund is greater than that for most mutual funds; however, the
Trustees have determined that it is similar to fees charged by other mutual
funds whose investment objectives are similar to those of the Fund.
The ratio of management fees to average net assets for the fiscal year ended
June 30, 1996 for Class A Shares and Class B Shares was 0.75%.
The Portfolio Managers
Ms. Jeanne H. Dorey and Mr. David Lui are the co-portfolio managers of the
Fund and as such are primarily responsible for the day-to-day management of
the Fund's investments. Ms. Dorey is also Portfolio Manager of the
International Portfolio of Phoenix Multi-Portfolio Fund and the International
Series of The Phoenix Edge Series Fund, both advised by Phoenix Investment
Counsel, Inc. ("PIC"), an affiliate of National. Ms. Dorey has served as
Managing Director, Equities of National and PIC since September 1996 and
previously as Vice President of National and the Fund since May 1995 and of
PIC since April 1993. She has served as Portfolio Manager of the Fund,
Phoenix International Portfolio and Phoenix International Series since
February 1993. From 1990 to 1992, Ms. Dorey was an Investment Analyst and
Portfolio Manager with Pioneer Group, Inc. Mr. Lui is also Co-Portfolio
Manager of the International Portfolio of Phoenix Multi-Portfolio Fund and
the International Series of The Phoenix Edge Series Fund. Mr. Lui previously
served as Associate Manager of such funds since June 1995. He has served as
Portfolio Manager, Equities of National and PIC since September 1996. From
1993 to 1995, Mr. Lui was Vice President of Asian Equities at Alliance
Capital Management and from 1990 to 1993, he was an Associate, Capital
Markets, at Bankers Trust.
The Financial Agent
Equity Planning acts as financial agent of the Fund and, as such, performs
administrative, bookkeeping and pricing functions for the Fund. As compensation,
Equity Planning receives a quarterly fee based on the average of the aggregate
9
<PAGE>
daily net asset values of the Fund at the annual rate of $300 per $1 million.
For its services during the Fund's fiscal year ended June 30, 1996, Equity
Planning received $41,495 or 0.03% of average net assets.
The Custodian and Transfer Agent
The Custodian of the assets of the Fund is Brown Brothers Harriman & Co., 40
Water Street, Boston, Massachusetts 02109 (the "Custodian").
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Fund (the "Transfer Agent") for
which it is paid $14.95 plus out of pocket expenses for each designated
shareholder account. The Transfer Agent engages sub-agents to perform certain
shareholder servicing functions from time to time for which such agents shall be
paid a fee by Equity Planning.
Brokerage Commissions
Although the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. prohibit its members from seeking orders for the execution of
investment company portfolio transactions on the basis of their sales of
investment company shares, under such Rules, sales of investment company shares
may be considered in selecting brokers to effect portfolio transactions.
Accordingly, some portfolio transactions are, subject to such Rules and to
obtaining best prices and executions, effected through dealers (excluding Equity
Planning) who sell shares of the Fund.
DISTRIBUTION PLANS
The offices of Equity Planning, the national distributor of the Fund's
shares, are located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200. Philip R. McLoughlin is a Trustee and President of
the Fund and a director and officer of Equity Planning. David R. Pepin, a
Director and officer of Equity Planning, is an officer of the Fund. Michael
E. Haylon, a director of Equity Planning, is an officer of the Fund. G.
Jeffrey Bohne, Nancy G. Curtiss, William R. Moyer, William J. Newman, Leonard
J. Saltiel and Thomas N. Steenburg are officers of the Fund and officers of
Equity Planning.
Equity Planning and the Fund have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Fund shares sold subject to an initial sales charge and those sold subject to a
contingent deferred sales charge. The Fund has granted Equity Planning the
exclusive right to purchase from the Fund and resell, as agent, shares needed to
fill unconditional orders for Fund shares. Equity Planning may sell Fund shares
through its registered representatives or through securities dealers with whom
it has sales agreements. Equity Planning may also sell Fund shares pursuant to
sales agreements entered into with banks or bank-affiliated securities brokers
who, acting as agent for their customers, place orders for Fund shares with
Equity Planning. Although the Glass-Steagall Act prohibits banks and bank
affiliates from engaging in the business of underwriting, distributing or
selling securities (including mutual fund shares), banking regulators have not
indicated that such institutions are prohibited from purchasing mutual fund
shares upon the order and for the account of their customers. If, because of
changes in law or regulations, or because of new interpretations of existing
law, it is determined that agency transactions of banks or bank-affiliated
securities brokers are not permitted under the Glass-Steagall Act, the Trustees
will consider what action, if any, is appropriate. It is not anticipated that
termination of sales agreements with banks or bank-affiliated securities brokers
would result in a loss to their customers or a change in the net asset value per
share of the Fund.
The sale of Fund shares through a securities broker affiliated with a
particular bank is not expected to preclude the Fund from borrowing from such
bank or from availing itself of custodial or transfer agency services offered by
such bank.
The Trustees have adopted separate distribution plans under Rule 12b-1 of the
1940 Act for each class of shares of the Fund (the "Class A Plan", the "Class B
Plan", and collectively the "Plans"). The Plans permit the Fund to reimburse the
Distributor for expenses incurred in connection with the sale and promotion of
Fund shares and the furnishing of shareholder services. Pursuant to the Class A
Plan, the Fund may reimburse the Distributor for actual expenses of the
Distributor up to 0.30% annually of the average daily net assets of the Fund's
Class A Shares. However, the Distributor has voluntarily agreed to limit the
maximum amount of reimbursement under the Class A Plan for the fiscal year 1997
to 0.25% annually of the average daily net assets of the Fund's Class A Shares.
Under the Class B Plan, the Fund may reimburse the Distributor monthly for
actual expenses of the Distributor up to 1.00% annually of the average daily net
assets of the Fund's Class B Shares.
Expenditures incurred under the Plans may consist of: (i) commissions to
sales personnel for selling shares of the Fund (including underwriting
commissions and finance charges related to the payment of commissions for sales
of Class B Shares); (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
for services rendered in connection with the sale and distribution of shares of
the Fund; (iv) payment of expenses incurred in sales and promotional activities,
including advertising expenditures related to the Fund; (v) the costs of
preparing and distributing promotional materials; (vi) the costs of printing the
Fund's Prospectus and Statement of Additional Information for distribution to
potential investors; and (vii) such other similar services that the Trustees
determine are reasonably calculated to result in the sale of shares of the Fund;
provided, however, that a portion shall be equal to or less than 0.25% annually
of the average daily net assets of the Fund shares, may be paid for reimbursing
the costs of providing services to 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
10
<PAGE>
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.
In order to receive payments under the Plans, participants must meet such
qualifications as are to be established in the sole discretion of the
Distributor, such as services to the Fund's shareholders; or services providing
the Fund with more efficient methods of offering shares to groups of clients;
members or prospects of a participant; or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by computerized
tape or other electronic equipment; or other batch processing.
Under the Class A Plan, reimbursement or payment of expenses may not be made
unless such payment or reimbursement occurs prior to the earliest of (a) the
last day of the one-year period commencing on the last day of the calendar
quarter during which the specific service or activity was performed, or (b) the
last day of the one-year period commencing on the last day of the calendar
quarter during which payment for the service or activity was made by a third
party on behalf of the Fund. The Class B Plan, however, does not limit the
reimbursement of distribution-related expenses to expenses incurred in specified
time periods.
For the fiscal year ended June 30, 1996, the Fund paid $335,903 under the
Class A Plan and $39,567 under the Class B Plan. The fees were used to
compensate unaffiliated broker-dealers for servicing shareholder's accounts,
compensating sales personnel and reimbursing the Distributor for commission
expenses and expenses related to preparation of the marketing material. On a
quarterly basis, the Fund's Trustees review a report on expenditures under each
Plan and the purposes for which expenditures were made. The Trustees conduct an
additional, more extensive review annually in determining whether each Plan will
be continued. By its terms, continuation of each Plan from year to year is
contingent on annual approval by a majority of the Fund's Trustees and by a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) and who have no direct or indirect financial interest in the operation
of either Plan or any related agreements (the "Plan Trustees"). Each Plan
provides that it may not be amended to increase materially the costs which the
Fund may bear without approval of the applicable class of shareholders of the
Fund and that other material amendments must be approved by a majority of the
Plan Trustees by vote cast in person at a meeting called for the purpose of
considering such amendments. Each Plan further provides that while it is in
effect, the selection and nomination of Trustees who are not "interested
persons" shall be committed to the discretion of the Trustees who are not
"interested persons." Each Plan may be terminated at any time by vote of a
majority of the Plan Trustees or a majority of the applicable class of
outstanding shares of the Fund.
The Trustees have concluded that there is a reasonable likelihood that the
Plans will benefit the Fund and all classes of shareholders. The Class A Plan
was approved by Class A shareholders of the Fund at a special meeting of
shareholders held on May 7, 1993. The Class B Plan was adopted by the Trustees
(including a majority of independent Trustees) on May 25, 1994.
The National Association of Securities Dealers ("NASD") regards certain
distribution fees as asset-based sales charges subject to NASD sales load
limits. The NASD's maximum sales charge rule may require the Trustees to suspend
distribution fees or amend either or both Plans.
HOW TO BUY SHARES
The Fund currently issues two classes of shares. Class A Shares are sold to
investors choosing the initial sales charge alternative. Class B Shares are sold
to investors choosing the deferred sales charge alternative. The minimum initial
purchase is $500, and the minimum subsequent investment is $25. Both the minimum
initial and subsequent investment amounts are $25 for investments pursuant to
the "Investo-Matic" plan, a bank draft investing program administered by Equity
Planning, or pursuant to the Systematic Exchange Privilege (see Statement of
Additional Information).Completed applications for the purchase of shares should
be mailed to The Phoenix Funds, c/o State Street Bank and Trust Company, P.O.
Box 8301, Boston, MA 02266-8301.
Each class of shares represents an interest in the same portfolio of
investments of the Fund, has the same rights, and is identical to the other in
all respects, except that Class B Shares bear the expenses of the deferred sales
arrangement and any expenses (including the higher distribution services fee and
any incremental transfer agency costs) resulting from such sales arrangement.
Each class has exclusive voting rights with respect to provisions of the Rule
12b-1 distribution plan pursuant to which its distribution services fee is paid
and each class has different exchange privileges. Only the Class B Shares are
subject to a conversion feature. The net income attributable to Class B Shares
and the dividends paid on Class B Shares will be reduced by the amount of the
higher distribution services fee and incremental expenses associated with such
distribution services fee; likewise, the net asset value of the Class B Shares
will be reduced by such amount to the extent the Fund has undistributed net
income.
Subsequent investments for the purchase of full and fractional shares in
amounts of $25 or more may be made through an investment dealer or by sending a
check to Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301,
Boston, MA 02266-8301. Share certificates representing any number of full shares
will be issued only on request, and subject to certain conditions. A fee may be
incurred by the shareholder for a lost or stolen share certificate. Sales
personnel of broker-dealers distributing the Fund's shares may receive differing
compensation for selling Class A or Class B Shares.
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvest-
11
<PAGE>
ment and exchange privileges. Certain privileges may not be available in
connection with Class B Shares. Shares of the Fund or shares of any other
Phoenix Fund (except Phoenix Money Market Fund Series Class A Shares and Phoenix
Multi- Sector Short-Term Bond Fund Class A Shares held less than 6 months), may
be exchanged for shares of the same class on the basis of the relative net asset
values per share at the time of the exchange. Exchanges are subject to the
minimum initial investment requirement of the designated Phoenix Fund, except if
made in connection with the Systematic Exchange Privilege. Shareholders may
exchange shares held in book-entry form for an equivalent number (value) of the
same class of shares from any other Phoenix Fund. On Class B Share exchanges,
the contingent deferred sales charge schedule of the original shares purchased
is not taken and continues to apply.
Alternative Sales Arrangements
The alternative sales arrangements permit an investor to choose the method of
purchasing shares that is most beneficial given the amount of the purchase, the
length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Fund, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution fee and contingent deferred sales charges on Class B Shares prior
to conversion would be less than the initial sales charge and accumulated
distribution fee on Class A Shares purchased at the same time, and to what
extent such differential would be offset by the higher yield of Class A Shares.
In this regard, Class A Shares will be more beneficial to the investor who
qualifies for certain reduced initial sales charges. For this reason, the
Distributor intends to limit sales of Class B Shares sold to any shareholder to
a maximum total value of $250,000. Class B Shares sold to unallocated qualified
employer sponsored plans will be limited to a maximum total value of $1,000,000.
Class B Shares sold to allocated qualified employer sponsored plans,
including 401(k) plans, will be limited to a maximum total value of $250,000 for
each participant. The Distributor reserves the right to decline the sale of
Class B Shares to allocated qualified employer sponsored plans not utilizing an
approved participant tracking system. In addition, Class B Shares will not be
sold to any qualified employee benefit plan, endowment fund or foundation if, on
the date of the initial investment, the plan, fund or foundation has assets of
$10,000,000 or more or at least 100 eligible employees. Class B Shares will also
not be sold to investors who have reached the age of 85 because of such persons'
expected distribution requirements.
Class A Shares are subject to a lower distribution fee and, accordingly, pay
correspondingly higher dividends per share. However, because initial sales
charges are deducted at the time of purchase, such investors would not have all
their funds invested initially and, therefore, would initially own fewer shares.
Investors not qualifying for reduced initial sales charges who expect to
maintain their investment for an extended period of time might consider
purchasing Class A Shares because the accumulated continuing distribution
charges on Class B Shares may exceed the initial sales charge on Class A Shares
during the life of the investment. Again, however, such investors must weigh
this consideration against the fact that, because of such initial sales charge,
not all their funds will be invested initially. However, other investors might
determine that it would be more advantageous to purchase Class B Shares to have
all their funds invested initially, although remaining subject to higher
continuing distribution charges and, for a five-year period, being subject to a
contingent deferred sales charge.
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares is the net asset value plus a
sales charge, as set forth below. Offering prices become effective at the close
of the general trading session of the New York Stock Exchange. Orders received
by dealers prior to such time are confirmed at the offering price effective at
that time, provided the order is received by State Street Bank & Trust Company
prior to its close of business.
The sales charge varies with the size of the purchase and reduced charges
apply to the aggregate of purchases of the Fund made at one time by "any
person," which term includes an individual, an individual and his/her spouse and
their children under the age of 21, or a trustee or other fiduciary purchasing
shares for a single trust, estate or fiduciary account although more than one
beneficiary is involved.
Class A Shares of the Fund are offered to the public at the net asset value
next computed after the purchase order is received by State Street Bank and
Trust Company, plus a maximum sales charge of 4.75% of the offering price (4.99%
of the amount invested) on single purchases of less than $50,000. The sales
charge is reduced on a graduated scale on single purchases of $50,000 or more as
shown below.
Sales Charge Sales Charge Dealer Discount
Amount of as Percentage as Percentage or Agency Fee
Transaction of Offering of Amount as Percentage of
at Offering Price Price Invested Offering Price*
- --------------------------------------------------------------------------------
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under
$100,000 4.50% 4.71% 4.00%
$100,000 but under
$250,000 3.50% 3.63% 3.00%
$250,000 but under
$500,000 3.00% 3.09% 2.75%
$500,000 but under
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None**
*Equity Planning will sponsor sales contests, training and educational meetings
and provide to all qualifying dealers, from its own profits and resources,
additional compensation in the form of trips, merchandise or expense
reimbursement. Brokers and dealers other than Equity Planning may also make
customary additional charges for their services in effecting purchases, if they
notify the Fund of their intention to do so. Equity Planning shall
12
<PAGE>
also pay service and retention fees, from its own profits and resources, to
qualified wholesalers in connection with the sale of shares of Phoenix Funds
(exclusive of Class A Shares of Phoenix Money Market Series) by registered
financial institutions and related third party marketers.
**In connection with Class A Share purchases by an account held in the name of a
qualified employee benefit plan with at least 100 eligible employees, Equity
Planning may pay broker/dealers, from its own resources, an amount equal to 1%
on the first $3 million of purchases, 0.50% on the next $3 million, plus 0.25%
on the amount in excess of $6 million.
In connection with Class A Share purchases of $1,000,000 or more (or
subsequent purchases in any amount), excluding purchases by qualified employee
benefit plans as described above, Equity Planning may pay broker/dealers, from
its own profits and resources, a percentage of the net asset value of any shares
sold as set forth below:
Purchase Amount Payment to Broker/Dealer
------------------------------ ------------------------------
$1,000,000 to $3,000,000 0.75 of 1%
$3,000,001 to $6,000,000 0.50 of 1%
$6,000,001 or more 0.25 of 1%
If part or all of such investment, 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.
How To Obtain Reduced Sales Charges on Class A Shares
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. No sales charge will be imposed on sales of shares to:
(1) any Phoenix Fund trustee, director or officer; (2) any director or officer,
or to any full-time employee or sales representative (who has acted as such for
at least 90 days) of the Adviser or of Equity Planning; (3) registered
representatives and employees of securities dealers with whom Equity Planning
has sales agreements; (4) any qualified retirement plan exclusively for persons
described above; (5) any officer, director or employee of a corporate affiliate
of the Adviser or Equity Planning; (6) any spouse, child, parent, grandparent,
brother or sister of any person named in (1), (2), (3) or (5) above; (7)
employee benefit plans for employees of the Adviser, Equity Planning and/or
their corporate affiliates; (8) any employee or agent who retires from Phoenix
Home Life or Equity Planning; (9) any account held in the name of a qualified
employee benefit plan, endowment fund or foundation if, on the date of initial
investment, the plan, fund or foundation has assets of $10,000,000 or more or at
least 100 eligible employees; (10) any person with a direct rollover transfer of
shares from an established Phoenix Fund qualified plan; (11) any Phoenix Home
Life separate account which funds group annuity contracts offered to qualified
employee benefit plans; (12) any state, county, city, instrumentality,
department, authority or agency prohibited by law from paying a sales charge;
(13) any fully matriculated student in a U.S. service academy; (14) any
unallocated accounts 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 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: or (16)
any accounts established by financial institutions, broker/dealers or registered
investment advisers for which an account management fee or transaction fee is
charged and, provided such entity has entered into an agreement with the
Distributor for this program; provided that sales made 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.
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains distributions are not subject to any sales charges. The Fund
receives the entire net asset value of its Class A Shares sold to investors. The
Distributor's commission is the sales charge shown above less any applicable
discount or commission "re-allowed" to selected dealers and agents. The
Distributor will re-allow discounts to selected dealers and agents in the
amounts indicated in the table above. In this regard, the Distributor may elect
to re-allow the entire sales charge to selected dealers and agents for all
sales with respect to which orders are placed with the Distributor. A selected
dealer who receives re-allowance in excess of 90% of such a sales charge may be
deemed to be an "underwriter" under the Securities Act of 1933.
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Phoenix Fund,
(including Class B Shares and excluding Money Market Fund Series Class A Shares)
if made at a single time by a single purchaser, will be combined for the purpose
of determining whether the total dollar amount of such purchases entitles the
purchaser to a reduced sales charge on any such purchases of Class A Shares.
Each purchase of Class A Shares will then be made at the public offering price,
as described in the then current Prospectus relating to such shares, which at
the time of such purchase is applicable to a single transaction of the total
dollar amount of all such purchases. The term "single purchaser" includes an
individual, or an individual, his spouse and their children under the age of
majority purchasing for his or their own account (including an IRA account)
including his or their own trust, commonly known as a living trust; a trustee or
other fiduciary purchasing for a single trust, estate or single fiduciary
account, although more than one beneficiary is involved; multiple trusts or
403(b) plans for the same employer; multiple accounts (up to 200) under a
qualified employee benefit plan or administered by a third party administrator;
or trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary
13
<PAGE>
investment authority and which are held in a fiduciary, agency, custodial or
similar capacity, provided all shares are held in record in the name, or nominee
name, of the entity placing the order.
Letter of Intent. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares and excluding Money Market Fund Series Class A Shares)
may be purchased by a "single purchaser" (as defined above) within a period of
thirteen months pursuant to a Letter of Intent, in the form provided by Equity
Planning, stating the investor's intention to invest in such shares during such
period an amount which, together with the value (at their maximum offering
prices on the date of the Letter) of the Class A Shares of the Fund or Class A
or Class B Shares of any other Phoenix Fund then owned by such investor, equals
a specified dollar amount. Each purchase of shares made pursuant to a Letter of
Intent will be made at the public offering price, as described in the then
current Prospectus relating to such shares, which at the time of purchase is
applicable to a single transaction of the total dollar amount specified in the
Letter of Intent.
An investor's Letter of Intent is not a binding commitment of the investor to
purchase or a binding obligation of the Fund or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment (valued at the purchase price thereof) is held in escrow in the form
of shares registered in the investor's name until he completes his investment,
at which time escrowed shares are deposited to his account. If the investor does
not complete his investment and does not within 20 days after written request by
Equity Planning or his dealer pay the difference between the sales charge on the
dollar amount specified in his Letter of Intent and the sales charge on the
dollar amount of actual purchases, the difference will be realized through the
redemption of an appropriate number of the escrowed shares and any remaining
escrowed shares will be deposited to his account.
Right of Accumulation. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Fund, or any other Phoenix Fund, made over time.
Reduced sales charges are offered to investors whose shares, in the aggregate,
are valued (i.e., the dollar amount of such purchases plus the then current
value (at the public offering price as described in the then current prospectus
relating to such shares) of shares of all Phoenix Funds owned) in excess of the
threshold amounts described in the section entitled "Initial Sales Charge
Alternative--Class A Shares." To use this option, the investor must supply
sufficient information as to account registrations and account numbers to permit
verification that one or more of his purchases qualifies for a reduced sales
charge.
Associations. A group or association may be treated as a "single purchaser"
and qualify for reduced initial sales charges under the Combination Purchase
Privilege and Right of Accumulation if the group or association (1) has been in
existence for at least six months; (2) has a legitimate purpose other than to
purchase mutual fund shares at a reduced sales charge; (3) gives its
endorsements or authorization to the investment program to facilitate
solicitation of the membership by the investment dealer, thus effecting
economies of sales effort; and (4) is not a group whose sole organizational
nexus is that the members are credit card holders of a company, policyholders of
an insurance company, customers of a bank or a broker-dealer or clients of an
investment adviser.
Deferred Sales Charge Alternative--Class B Shares
Investors choosing the deferred sales charge alternative purchase Class B
Shares at net asset value per share without the imposition of a sales charge at
the time of purchase. The Class B Shares are being sold without an initial sales
charge, but are subject to a sales charge if redeemed within five years of
purchase.
Proceeds from the contingent deferred sales charge are paid to the
Distributor and are used in whole or in part by the Distributor to defray the
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of the Class B Shares, such as the
payment of compensation to selected dealers and agents for selling Class B
Shares. The combination of the contingent deferred sales charge and the
distribution fee facilitates the ability of the Fund to sell the Class B Shares
without a sales charge being deducted at the time of purchase.
Contingent Deferred Sales Charge. Class B Shares which are redeemed within
five years of purchase will be subject to a contingent deferred sales charge at
the rates set forth below charged as a percentage of the dollar amount subject
thereto. The charge will be assessed on an amount equal to the lesser of the
current market value or the cost of the shares being redeemed. Accordingly, no
sales charge will be imposed on increases in net asset value above the initial
purchase price. In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.
The Distributor intends to pay investment dealers a sales commission of 4% of
the sale price of Class B Shares sold by such dealers, subject to future
amendment or termination. The Distributor will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by shareholders
on the redemption of shares to finance the 4% commission plus interest and
related marketing expenses.
The amount of the contingent deferred sales charges, if any, will vary
depending on the number of years from the time of payment for the purchase of
Class B Shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchases of shares, all payments during a month will be aggregated and deemed
to have been made on the last day of the previous month.
14
<PAGE>
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
- ------------------------- ------------------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
In determining whether a contingent deferred sales charge is applicable to a
redemption, it will be assumed that any Class A Shares are being redeemed first,
Class B Shares held for over five-years and shares acquired pursuant to
reinvestment of dividends or distributions are redeemed next. Any Class B Shares
held longest during the five-year period are redeemed next unless the
shareholder directs otherwise. The charge will not be applied to dollar amounts
representing an increase in the net asset value since the time of purchase.
To provide an example, assume in 1990, an investor purchased 100 Class B
Shares. In 1993, the investor purchased another 100 Class B Shares at $12 per
share. In 1995, the investor purchased 100 Class A Shares. Assume that in 1996,
the investor owns 225 Class B Shares (15 Class B Shares resulting from dividend
reinvestment and distributions upon the Class B Shares purchased in 1990 and 10
Class B Shares resulting from dividend reinvestment and distributions upon the
Class B Shares purchased in 1993) as well as 100 Class A Shares. If the investor
wished to then redeem 300 shares and had not specified a preference in redeeming
shares: first, 100 Class A Shares would be redeemed without charge. Second, 115
Class B Shares purchased in 1990 (including 15 shares issued as a result of
dividend reinvestment and distributions) would be redeemed next without charge.
Finally, 85 Class B Shares purchased in 1993 would be redeemed resulting in a
deferred sales charge of $27 [75 shares (85 shares minus 10 shares resulting
from dividend reinvestment) x $12 (original price or current NAV if less than
original) x 3% (applicable rate in the third year after purchase)].
The contingent deferred sales charge is waived on redemptions of shares (a)
if redemption is made within one year of death (i) of the sole shareholder on an
individual account, (ii) of a joint tenant where the surviving joint tenant is
the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to Minors
Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial account;
(b) if redemption is made within one year of disability, as defined in Section
72(m)(7) of the Code; (c) in connection with mandatory distributions upon
reaching age 70-1/2 under any retirement plan qualified under Sections 401, 408
or 403(b) of the Code or any redemption resulting from the tax-free return of an
excess contribution to an IRA; (d) in connection with redemptions by 401(k)
plans using an approved participant tracking system for: participant hardships,
death, disability or normal retirement, and loans which are subsequently repaid;
(e) in connection with the exercise of certain exchange privileges among Class B
Shares of the Fund and Class B Shares of other Phoenix Funds; (f) in connection
with any direct rollover transfer of shares from an established Phoenix Fund
qualified plan into a Phoenix Fund IRA by participants terminating from the
qualifying plan; and (g) in accordance with the terms specified under the
Systematic Withdrawal Program. If, upon the occurrence of a death as outlined
above, the account is transferred to an account registered in the name of the
deceased's estate, the contingent deferred sales charge will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain Class B Shares and be subject to the applicable contingent deferred sales
charge when redeemed.
Class B Shares of the Fund will automatically convert to Class A Shares
without a sales charge at the relative net asset values of each of the classes
after eight years from the acquisition of the Class B Shares, and as a result,
will thereafter be subject to the lower distribution fee under the Class A Plan.
Such conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge. The
purpose of the conversion feature is to relieve the holders of Class B Shares
that have been outstanding for a period of time sufficient for the Distributor
to have been compensated for distribution-related expenses from the burden of
such distribution related expenses.
For purposes of conversion to Class A Shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) are converted to Class A Shares, an equal
pro rata portion of the Class B Shares in the sub-account will also be converted
to Class A Shares.
The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of an opinion of counsel or a ruling from the Internal
Revenue Service ("IRS") to the effect: (i) that the conversion of shares does
not constitute a taxable event under federal income tax law; and (ii) the
assessment of higher distribution fees and transfer agency costs with respect to
Class B Shares does not result in dividends or distributions constituting
"preferential dividends" under the Code. The conversion of Class B Shares to
Class A Shares may be suspended if such an opinion or ruling is no longer
available. In that event, no further conversion of Class B Shares would occur,
and shares might continue to be subject to the higher distribution fee for an
indefinite period which may extend beyond the period ending eight (8) years
after the end of the month in which affected Class B Shares were purchased. If
the Fund were unable to obtain such assurances with respect to the assessment of
distribution fees and transfer agent costs relative to the Class B Shares it
might make additional distributions if doing so would assist in complying with
the Fund's general practice of distributing sufficient income to reduce or
eliminate U.S. federal taxes.
15
<PAGE>
INVESTOR ACCOUNTS
AND SERVICES AVAILABLE
An account will be opened for the investor after the investor makes an initial
investment. Shares purchased will be held in the shareholder's account by the
Transfer Agent which will forward a statement each time there is a change in the
number of shares in the account. At any time, a shareholder may request that a
certificate be issued, subject to certain conditions, representing any number of
full shares held in his or her account.
The Fund mails periodic reports to its shareholders. In order to reduce the
volume of mail, to the extent possible, only one copy of most Fund reports will
be mailed to households for multiple accounts with the same surname at the same
household address. Please contact Equity Planning to request additional copies
of shareholder reports.
Shareholder inquiries should be directed to the Fund at (800) 243-1574.
Bank Draft Investing Program (Investo-Matic Plan)
By completing the Investo-Matic Section of the New Account Application, a
shareholder may authorize the bank named in the form to draw $25 or more from
his/her personal checking account on or about the 15th day of the month, to be
used to purchase additional shares for his account. The amount the shareholder
designates will be made available, in form payable to the order of the Transfer
Agent by the bank on the date the bank draws on his/her account and will be used
to purchase shares at the applicable offering price. The shareholder or his or
her registered representative may, by telephone or written notice, cancel or
change the dollar amount being invested pursuant to the Investo-Matic Plan
unless the shareholder has notified the Fund or Transfer Agent that his or her
registered representative shall not have this authority.
Distribution Option
The Fund currently declares all income dividends and all capital gain
distributions, if any, payable in shares of the Fund at net asset value or, at
the option of the shareholder, in cash. By exercising the distribution option, a
shareholder may elect to: (1) receive both dividends and capital gain
distributions in additional shares; or (2) receive dividends in cash and capital
gain distributions in additional shares; or (3) receive both dividends and
capital gain distributions in cash. If a shareholder elects to receive dividends
and/or distributions in cash and the check cannot be delivered or remains
uncashed by the shareholder due to an invalid address, then the dividend and/or
distribution will be reinvested after the Transfer Agent has been informed that
the proceeds are undeliverable. Additional shares will be purchased for the
shareholder's account at the then current net asset value. Shareholders who
maintain an account balance of at least $5,000, or $2,000 for tax qualified
retirement benefit plans (calculated on the basis of the net asset value of the
shares held in a single account), may direct that any dividends and
distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Phoenix Funds at net asset
value. Shareholders should obtain a current prospectus and consider the
objectives and policies of each such Fund carefully before directing dividends
and distributions to the other Fund. Reinvestment election forms and
prospectuses are available from Equity Planning. Distributions may also be
mailed to a second payee and/or address. Dividends and capital gain
distributions received in shares are taxable to the shareholder and credited to
the shareholder's account in full and fractional shares and are computed at the
closing net asset value on the next business day after the record date. A
distribution option may be changed at any time by notifying Customer Service by
telephone at (800) 243-1574 or sending a letter signed by the registered
owner(s) of the account. 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 the shareholder's account are repurchased or
redeemed or transferred between the record date and the payment date of a
dividend or distribution, he/she will receive cash for the dividend or
distribution regardless of the distribution option selected.
Systematic Withdrawal Program
The Systematic Withdrawal Program allows shareholders to periodically redeem a
portion of their account on a predetermined monthly or quarterly, semiannual or
annual basis. A sufficient number of full and fractional shares shall therefore
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 the
shareholder's bank account. In addition to the limitations stated below,
withdrawals may not be less than $25 and minimum account balance requirements
shall continue to apply. See "Redemption of Small Accounts."
Class A shareholders participating in the Systematic Withdrawal Program must
own shares of the Fund worth $5,000 or more, as determined by the then-current
net asset value per share.
To participate in the Systematic Withdrawal Program, Class B shareholders
must initially own shares of the Fund worth $5,000 or more and elect to have all
dividends reinvested in additional Class B Shares of the Fund. Through the
Program, Class B shareholders may withdraw up to 1% of their aggregate net
investments (purchases, at initial value, to date net of non-Program
redemptions) each month or up to 3% of their aggregate net investments each
quarter without incurring otherwise applicable contingent deferred sales
charges.
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
same 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.
16
<PAGE>
Class B shareholders redeeming more shares than the percentage permitted by
the withdrawal program shall be subject to any applicable contingent deferred
sales charge. 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.
Tax-Sheltered Retirement Plans
Shares of the Fund are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, Profit-Sharing and Money
Purchase Pension Plans which can be adopted by self-employed persons ("Keogh")
and by corporations, and 403(b) Retirement Plans. Write or call Equity Planning
(800) 243-4361 for further information about the plans.
Exchange Privileges
Shareholders may exchange Class A or Class B Shares held in book-entry form
for shares of the same class of other Phoenix Funds, (except Phoenix
Multi-Sector Short Term Bond Fund Class A Shares held less than 6 months and
Class A Shares of Phoenix Money Market Series), provided the following
conditions are met: (1) the shares that will be acquired in the exchange (the
"Acquired Shares") are available for sale in the shareholder's state of
residence; (2) the Acquired Shares are the same class as the shares to be
surrendered (the "Exchanged Shares"); (3) the Acquired Shares will be registered
to the same shareholder account as the Exchanged Shares; (4) the account value
of the Fund whose shares are to be acquired must equal or exceed the minimum
initial investment amount required by that Fund after the exchange is
implemented; and (5) if a shareholder has elected not to utilize the Telephone
Exchange Privilege (see below), a properly executed exchange request must be
received by Phoenix Funds c/o State Street Bank and Trust Company.
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B Shares of the Fund exchanged for the same class of shares of
another Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel the privilege ("Systematic Exchange").
Shareholders who maintain an account balance in the Fund of at least $5,000,
or $2,000 for tax qualified retirement benefit plans (calculated on the basis of
the net asset value of the shares held in a single account), may direct that
shares of the Fund be automatically exchanged at predetermined intervals for
shares of the same class of another Phoenix Fund. If the shareholder is
participating in the Self Security program offered by Phoenix Home Life, it is
not necessary to maintain the above account balances in order to use the
Systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and subsequent
amount that may be exchanged under the Systematic Exchange is $25. Systematic
Exchange forms are available from Equity Planning.
Exchanges will be based upon each Fund's net asset value per share next
computed following receipt of a properly executed exchange request, without
sales charge. On Class B share exchanges, the contingent deferred sales charge
schedule of the original shares purchased continues to apply.
The exchange of shares from one fund to another is treated as a sale of the
Exchanged Shares and a purchase of the Acquired Shares for Federal income tax
purposes. The shareholder may, therefore, realize a taxable gain or loss. See
"Dividends, Distributions and Taxes" for information concerning the Federal
income tax treatment of the disposition of shares.
It is the policy of the Adviser to discourage and prevent frequent trading by
shareholders among the Fund and other Phoenix Funds in response to market
fluctuations. The Fund reserves the right to refuse exchange purchases by any
person or broker/dealer if, in the Fund's or Adviser's opinion, the exchange
would adversely affect the Fund's ability to invest according to its investment
objectives and policies, or otherwise adversely affect the Fund and its
shareholders. The Fund reserves the right to terminate or modify its exchange
privileges at any time upon giving prominent notice to shareholders at least 60
days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
Telephone Exchanges
Telephone Exchange privileges are only available in states where the shares to
be acquired may be legally sold. (See the Statement of Additional Information.)
Unless a shareholder elects in writing not to participate in the Telephone
Exchange Privilege, shares for which certificates have not been issued may be
exchanged by calling (800) 367-5877 provided that the exchange is made between
accounts with identical registrations. Under the Telephone Exchange Privilege,
telephone exchange orders may also be entered on behalf of the shareholder by
his or her legal representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. In addition to requiring identical
registrations on both accounts, the Transfer Agent will require address
verification and will record telephone instructions on tape. All exchanges will
be confirmed in writing with the shareholder. To the extent that procedures
reasonably designed to prevent unauthorized telephone exchanges are not
followed, the Fund and/or the Transfer Agent may be liable for following
telephone instructions for exchange transactions that prove to be fraudulent.
Broker/dealers other than Equity Planning have agreed to bear the risk of any
loss resulting from any unauthorized telephone exchange instructions from the
firm or its registered representatives. However, the shareholder would bear the
risk of loss resulting from instructions entered by an unauthorized third party
that the Fund and/or the Transfer Agent reasonably believe to be genuine. The
Telephone Exchange Privilege may be modified or terminated at any time on 60
days' notice to shareholders. In addition, during times of drastic economic or
market changes, the Telephone Exchange Privilege may be difficult to exercise or
may be suspended
17
<PAGE>
temporarily. In such event an exchange may be effected by following the
procedure outlined for tendering shares represented by certificate(s).
If a shareholder elects not to use the Telephone Exchange Privilege or if the
shares being exchanged are represented by a certificate or certificates, in
order to exchange shares the shareholder must submit a written request to
Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box 8301, Boston,
MA 02266-8301. If the shares are being exchanged between accounts that are not
registered identically, the signature on such request must be guaranteed by an
eligible guarantor institution as defined by the 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. Any outstanding certificate or certificates for the
tendered shares must be duly endorsed and submitted.
Purchase and withdrawal plans and reinvestment and exchange privileges are
described more fully in the Statement of Additional Information. For further
information, call Equity Planning at (800) 243-1574.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading.
The net asset value per share of the Fund is computed by dividing the value of
the Fund's securities, plus any cash and other assets less all liabilities
(including accrued expenses) by the number of shares of the Fund outstanding.
The total liability allocated to a class, plus that class' distribution fee and
any other expenses specifically allocated to that class, are deducted from the
proportionate interest of such class in the Fund's assets, and the resulting
amount for each class is divided by the number of shares of that class to
produce the net asset value per share. A security listed or traded on an
exchange is valued at its last sale price on the exchange where it is
principally traded. Lacking any sales on the exchange where it is principally
traded on the day of valuation prior to the time as of which assets are valued,
the security is valued at the last bid price on that exchange. Short-term
investments having a remaining maturity of sixty days or less are valued at
amortized cost when the Board of Trustees has determined that amortized cost
would equal fair market value. All other equity securities for which
over-the-counter market quotations are readily available are valued at the last
bid price. Other assets are valued at fair value as determined in good faith by
the Trustees of the Fund.
Generally, trading in foreign securities, as well as trading in corporate
bonds, U.S. Government securities and money market instruments is substantially
completed each day at various times prior to the close of the general trading
session of the Exchange. The values of such securities used in computing the net
asset value of the Fund are determined as of such times. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the general trading session which will not be reflected in the
computation of the Fund's net asset value. If events occur which materially
affect the value of such securities, the securities will be valued at fair
market value as determined in good faith by the Trustees.
HOW TO REDEEM SHARES
Shareholders have the right to have the Fund buy back shares at the net asset
value next determined after receipt of a redemption request and any other
required documentation in proper form by Phoenix Funds, c/o State Street Bank
and Trust Company, P.O. Box 8301, Boston, MA 02266-8301 (see "Net Asset Value").
In the case of Class B Share redemptions, investors will be subject to the
applicable deferred sales charge, if any, for such shares (see "Deferred Sales
Charge Alternative--Class B Shares", above). To redeem, any outstanding share
certificates in proper form for transfer must be received by Phoenix Funds, c/o
State Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301. To be
in proper form to redeem shares, the signature of the shareholder(s) on the
certificate or stock power must be signed exactly as registered, including any
fiduciary title, on a written instruction letter, certificate, or accompanying
stock power, such signatures being guaranteed by an eligible guarantor
institution as determined in accordance with the standards and procedures
established by the Transfer Agent (please contact the Fund at (800) 243-1574
with any questions regarding eligible guarantors).
If no certificate has been issued, the Transfer Agent requires a written
request with signature guarantee. The Transfer Agent may waive the signature
guarantee requirement in the case of shares registered in the names of
individuals singly, jointly, or as custodian under the Uniform Gifts to Minors
Act, if the proceeds do not exceed $50,000, and the proceeds are payable to the
registered owner(s) at the address of record. Such requests must be signed by
each person in whose name the account is registered. In addition, a shareholder
may sell shares back to the Fund through securities dealers who may charge
customary commissions for their services. The redemption price in such case will
be the price as of the close of the general trading session of the New York
Stock Exchange on that day, provided the order is received by the dealer prior
thereto, and is transmitted to the Distributor prior to the close of its
business. No charge is made by the Fund on redemptions, but shares tendered
through investment dealers may be subject to a service charge by such dealers.
Payment for shares redeemed is made within seven days; provided, however, that
redemption proceeds will not be disbursed until each check used for purchase of
shares has been cleared for payment by the investor's bank, which may take up to
15 days after receipt of the check.
Additional documentation may be required for redemptions by corporations,
partnership or other organizations, executors, administrators, trustees,
custodians, guardians, or from IRAs or other retirement plans, or if redemption
is requested by
18
<PAGE>
anyone but the shareholder(s) of record. To avoid delay in redemption or
transfer, shareholders having questions about specific requirements should
contact the Fund at (800) 243-1574. Redemption requests will not be honored
until all required documents in proper form have been received.
Telephone Redemptions
Unless a shareholder elects in writing not to participate in the Telephone
Redemption privilege, shares for which certificates have not been issued may be
redeemed by telephoning (800) 367-5877 and telephone redemptions will also be
accepted on behalf of the shareholder from his or her registered representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. Address and bank account information
will be verified, the telephone redemption instructions will be recorded on
tape, and all redemptions will be confirmed in writing to the shareholder. If
there has been an address change within the past 60 days, a telephone redemption
will not be authorized. To the extent that procedures reasonably designed to
prevent unauthorized telephone redemptions are not followed, the Fund and/or the
Transfer Agent may be liable for following telephone instructions for redemption
transactions that prove to be fraudulent. Broker/dealers other than Equity
Planning have agreed to bear the risk of any loss resulting from any
unauthorized telephone redemption instruction from the firm or its registered
representatives. However, the shareholder would bear the risk of loss resulting
from instructions entered by an unauthorized third party that the Fund and/or
the Transfer Agent reasonably believe to be genuine. The Telephone Redemption
Privilege may be modified or terminated at any time on 60 days' notice to
shareholders. In addition, during times of drastic economic or market changes,
the Telephone Redemption Privilege may be difficult to exercise and a
shareholder should submit a written redemption request, as described above.
If the amount of the redemption is over $500, the proceeds will be wired to
the shareholder's designated U.S. commercial bank account. If the amount of the
redemption is less than $500, the proceeds will be sent by check to the address
of record on the shareholder's account.
Telephone redemption requests must be received by the Transfer Agent by the
close of trading on the New York Stock Exchange on any day when the Transfer
Agent is open for business. Requests made after that time or on a day when the
Transfer Agent is not open for business cannot be accepted by the Transfer
Agent. The proceeds of a telephone redemption will normally be sent on the first
business day following receipt of the redemption request. However, with respect
to the telephone redemption of shares purchased by check, such requests will
only be effected after the Fund has assured itself that good payment has been
collected for the purchase of shares, which may take up to 15 days. This
expedited redemption privilege is not available to HR-10, IRA and 403(b)(7)
Plans.
Reinvestment Privilege
Shareholders have the privilege of using redemption proceeds to purchase Class
A Shares of any Phoenix Fund with no sales charge (at the net asset value next
determined after the request for reinvestment is made). For Federal income tax
purposes, a redemption and reinvestment will be treated as a sale and purchase
of shares. Special rules may apply in computing the amount of gain or loss in
these situations. (See "Dividends, Distributions and Taxes" for information on
the Federal income tax treatment of a disposition of shares.) A written request
for reinvestment must be received by the Distributor within 180 days of the
redemption, accompanied by payment for the shares (not in excess of the
redemption value). Class B shareholders who have had the contingent deferred
sales charge waived through participation in the Systematic Withdrawal Program
are not eligible to use the Reinvestment Privilege.
Redemption of Small Accounts
Due to the relatively high cost of maintaining small accounts, the Fund
reserves the right to redeem, at net asset value, the shares of any shareholder
whose account has a value, due to redemptions, of less than $200. Before the
Fund redeems these shares, the shareholder will be given notice that the value
of the shares in the account is less than the minimum amount and will be allowed
30 days to make an additional investment in an amount which will increase the
value of the account to at least $200.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Fund has no specific procedures
governing such account transfers.
DIVIDENDS, DISTRIBUTIONS
AND TAXES
The Fund intends to continue to qualify annually as a regulated investment
company under Subchapter M of the Code and to distribute annually to
shareholders all or substantially all of its net investment income and net
realized capital gains, after utilization of any capital loss carryovers. If the
Fund so qualifies, it generally will not be subject to Federal income tax on the
income it distributes. The discussion below is based on the assumption that the
Fund will continue to qualify as a regulated investment company.
The Fund intends to make distributions from net investment income
semi-annually, and intends to distribute net realized capital gain, if any, at
least annually.
The Fund will be subject to a nondeductible 4% excise tax if it fails to meet
certain annual distribution requirements. In order to prevent imposition of the
excise tax, it may be necessary for the Fund to make distributions more
frequently than described in the previous paragraph.
Unless a shareholder elects to receive distributions in cash, dividends and
capital gain distributions will be paid in additional shares of the Fund
credited at the net asset value per share on the ex-date. Dividends and
distributions, whether received in cash or in additional shares of the Fund,
generally are subject to Federal income tax and may be subject to state, local
and other taxes. Shareholders will be notified annually about the amount and
character of distributions made to them by the Fund.
19
<PAGE>
Long-term capital gains, if any, distributed to shareholders and which are
designated by the Fund as capital gain distributions, are taxable to
shareholders as long-term capital gain distributions regardless of the length of
time shares of the Fund have been held by the shareholder. Distributions of
short-term capital gains and net investment income, if any, are taxable to
shareholders as ordinary income.
Dividends and distributions generally will be taxable to shareholders in the
taxable year in which they are received. However, dividends and distributions
declared by the Fund in October, November or December of any calendar year, with
a record date in such a month, and paid during the following January will be
treated as if they were paid by the Fund and received by shareholders on
December 31 of the calendar year in which they were declared.
A redemption or other disposition (including an exchange) of shares of the
Fund generally will result in the recognition of a taxable gain or loss, which
will be a long- or short-term capital gain or loss (assuming the shares were a
capital asset in the hands of the shareholder), depending upon the shareholder's
holding period for his or her shares. A capital loss realized on a disposition
of Fund shares held six months or less will be treated as a long-term capital
loss to the extent of capital gain distributions received with respect to such
shares. In addition, if shares of the Fund are disposed of at a loss and are
replaced (either through purchases or through reinvestment of dividends) within
a period commencing thirty days before and ending thirty days after the
disposition of such shares, the realized loss will be disallowed and appropriate
adjustments to the tax basis of the new shares will be made.
Investment income received by the Fund from sources within foreign countries
may be subject to foreign income taxes withheld at the source. If the Fund
should have more than 50% of the value of its assets invested in securities of
foreign corporations at the close of its taxable year, which is the Fund's
present intention, the Fund may elect to permit its shareholders to take, either
as a credit or a deduction, their proportionate share of the foreign income
taxes paid.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS regulations, the Fund may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gain distributions
or share redemption proceeds, for any account which does not have a taxpayer
identification number or social security number and certain required
certifications.
The Fund reserves the right to refuse to open an account for any person
failing to provide a taxpayer identification number along with the required
certifications.
The Fund sends to all shareholders, within 31 days after the end of the
calendar year, information which is required by the Internal Revenue Service for
preparing Federal income tax returns. Investors are urged to consult their
attorney or tax adviser regarding specific questions as to Federal, foreign,
state or local taxes.
ADDITIONAL INFORMATION
Organization of the Fund
The Fund was initially incorporated as Fairfield Fund, Inc. in New York in
1956 and has operated as an open-end, diversified management investment company
since May of 1960. On December 14, 1990, the name of the Fund was changed to
National Worldwide Opportunities Fund, Inc. in connection with certain changes
adopted in various investment policies and restrictions, which enabled the Fund
to take advantage of investment opportunities outside of the United States in
pursuit of its investment objective of capital appreciation.
On January 13, 1992 the shareholders of the Fund approved a reorganization
whereby the Fund converted from a New York corporation to a Massachusetts
business trust. In connection therewith, the shareholders approved the adoption
of new management and advisory agreements and a distribution plan which are in
substance identical to those which were in existence for the Fund. At the
effective time of the reorganization (January 15, 1992), the Fund's name changed
to National Worldwide Opportunities Fund. On June 30, 1993, the Trustees voted
to change the name of the Fund to "Phoenix Worldwide Opportunities Fund" to
reflect the purchase of the Adviser by Phoenix Home Life and the affiliation
with other Phoenix Funds.
The Declaration of Trust provides that the Trustees are authorized to create
an unlimited number of series and, with respect to each series, to issue an
unlimited number of full and fractional shares of beneficial interest of one or
more classes and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in the
series. All shares have equal voting rights, except that only shares of the
respective series or separate classes within a series are entitled to vote on
matters concerning only that series or class. At the date of this Prospectus,
there is only one existing series of the Fund, which has two classes of shares.
The shares of the Fund, when issued, will be fully paid and non-assessable,
have no preference, preemptive, or similar rights, and will be freely
transferable. There will normally be no meetings of shareholders for the purpose
of electing Trustees unless and until such time as less than a majority of the
Trustees holding office have been elected by shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Shareholders may, in accordance with the Declaration of Trust, as
amended, cause a meeting of shareholders to be held for the purpose of voting on
the removal of Trustees. Meetings of the shareholders may be called upon written
request of shareholders holding in the aggregate not less than 10% of the
outstanding shares having voting rights. Except as set forth above and subject
to the 1940 Act, the Trustees will continue to hold office and appoint successor
Trustees. Shares do
20
<PAGE>
not have cumulative voting rights and the holders of more than 50% of the shares
of the Fund voting for the election of Trustees can elect all of the Trustees of
the Trust if they choose to do so and in such event the holders of the remaining
shares would not be able to elect any Trustees. Shareholders are entitled to
redeem their shares as set forth under "How to Redeem Shares".
The Declaration of Trust establishing the Fund (a copy of which, together
with all amendments thereto, is on file in the office of the Secretary of the
Commonwealth of Massachusetts), provides that the Fund's name refers to the
Trustees under the Declaration of Trust collectively as Trustees, but not as
individuals or personally; and no Trustee, shareholder, officer, employee or
agent of the Fund shall be held to any personal liability, nor shall resort be
had to their private property for the satisfaction of any obligation or claim of
said Fund, but the "Trust Property" only shall be liable.
Registration Statement
This Prospectus omits certain information included in the Statement of
Additional Information and Part C of the Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of 1933 and the 1940
Act. A copy of the Registration Statement may be obtained from the Securities
and Exchange Commission in Washington, D.C.
21
<PAGE>
BACKUP WITHHOLDING INFORMATION
Step 1. Please make sure that the social security number or taxpayer
identification number (TIN) which appears on the Application complies
with the following guidelines:
<TABLE>
<CAPTION>
Account Type Give Social Security Number or Tax Identification Number of:
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Individual Individual
- ------------------------------------------------------------------------------------------------------------
Joint (or Joint Tenant) Owner who will be paying tax
- ------------------------------------------------------------------------------------------------------------
Uniform Gifts to Minors Minor
- ------------------------------------------------------------------------------------------------------------
Legal Guardian Ward, Minor or Incompetent
- ------------------------------------------------------------------------------------------------------------
Sole Proprietor Owner of Business (also provide owner's name)
- ------------------------------------------------------------------------------------------------------------
Trust, Estate, Pension Plan Trust Trust, Estate, Pension Plan Trust (not personal TIN of fiduciary)
- ------------------------------------------------------------------------------------------------------------
Corporation, Partnership,
Other Organization Corporation, Partnership, Other Organization
- ------------------------------------------------------------------------------------------------------------
Broker/Nominee Broker/Nominee
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Step 2. If you do not have a TIN, you must obtain Form SS-5 (Application for
Social Security Number) or Form SS-4 (Application for Employer
Identification Number) from your local Social Security or IRS office and
apply for one. Write "Applied For" in the space on the
application.
Step 3. If you are one of the entities listed below, you are exempt from
backup withholding.
(bullet) A corporation
(bullet) Financial institution
(bullet) Section 501(a) exempt organization (IRA, Corporate Retirement
Plan, 403(b), Keogh)
(bullet) United States or any agency or instrumentality thereof
(bullet) A State, the District of Columbia, a possession of the
United States, or any subdivision or instrumentality thereof
(bullet) International oganization or any agency or instrumentality
thereof
(bullet) Registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
(bullet) Real estate investment trust
(bullet) Common trust fund operated by a bank under section 584(a)
(bullet) An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1)
(bullet) Regulated Investment Company
If you are in doubt as to whether you are exempt, please contact the Internal
Revenue Service.
Step 4. IRS Penalties--If you do not supply us with your TIN, you will be
subject to an IRS $50 penalty unless your failure is due to reasonable
cause and not willful neglect. If you fail to report interest, dividend
or patronage dividend income on your federal income tax return, you will
be treated as negligent and subject to an IRS 5% penalty tax on any
resulting underpayment of tax unless there is clear and convincing
evidence to the contrary. If you falsify information on this form or
make any other false statement resulting in no backup withholding on an
account which should be subject to a backup withholding, you may be
subject to an IRS $500 penalty and certain criminal penalties including
fines and imprisonment.
This Prospectus sets forth concisely the information about the Phoenix Worldwide
Opportunities Fund (the "Fund") which you should know before investing. Please
read it carefully and retain it for future reference.
The Fund has filed with the Securities and Exchange Commission a Statement of
Additional Information about the Fund, dated October 30, 1996. The Statement
contains more detailed information about the Fund and is incorporated into
this Prospectus by reference. You may obtain a free copy of the Statement by
writing the Fund c/o Phoenix Equity Planning Corporation, 100 Bright Meadow,
P.O. Box 2200, Enfield, Connecticut 06083-2200.
Financial information relating
to the Trust is contained in the Annual Report to Shareholders for the year
ended June 30, 1996 and is incorporated into the Statement of Additional
Information by reference.
(Recycled Logo) Printed on recycled paper using soybean ink
<PAGE>
Phoenix Worldwide Opportunities Fund
PO Box 2200
Enfield CT 06083-2200
BULK RATE MAIL
U.S. POSTAGE
PAID
SPRINGFIELD, MA
PERMIT NO. 444
[logo]
PHOENIX
DUFF & PHELPS
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
Statement of Additional Information
Dated October 30, 1996
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Worldwide Opportunities Fund (the "Fund"), dated October 30, 1996, and
should be read in conjunction with it. The Fund's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
THE FUND (20) 1
INVESTMENT OBJECTIVE AND POLICIES (6) 1
INVESTMENT RESTRICTIONS (9) 1
PERFORMANCE INFORMATION (6) 4
PORTFOLIO TRANSACTIONS AND BROKERAGE 5
SERVICES OF THE ADVISER (9) 6
NET ASSET VALUE (18) 7
HOW TO BUY SHARES (11) 7
ALTERNATIVE PURCHASE ARRANGEMENTS (11) 7
EXCHANGE PRIVILEGES (17) 9
REDEMPTION OF SHARES (18) 9
DIVIDENDS, DISTRIBUTIONS AND TAXES (19) 10
TAX SHELTERED RETIREMENT PLANS 12
THE DISTRIBUTOR (10) 12
PLANS OF DISTRIBUTION (10) 12
TRUSTEES AND OFFICERS 13
OTHER INFORMATION (20) 19
Numbers appearing in parentheses correspond to related disclosures in the Fund's
Prospectus.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders/Exchanges: (800) 367-5877
TTY: (800) 243-1926
<PAGE>
THE FUND
The Fund was originally incorporated in New York in 1956, and on January 13,
1992, the Fund was reorganized as a Massachusetts business trust. The Fund has
operated as an open-end, diversified management investment company since May
1960. On June 30, 1993, the Trustees voted to change the name of the Fund to
"Phoenix Worldwide Opportunities Fund" to reflect the purchase of the Adviser by
Phoenix Home Life Mutual Insurance Company and the affiliation with other
Phoenix Funds.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is capital appreciation. The Fund's
investment objective is a fundamental policy and may not be changed without
shareholder approval.
Under normal circumstances, at least 65% of the total assets of the Fund will
be invested in the securities of issuers located in at least three different
countries, one of which will be the United States. The Fund will invest
primarily in equity securities (common stocks, preferred stocks, securities
convertible into common stocks, warrants and any rights to purchase common
stocks). The Fund may also invest up to 35% of its assets in non-convertible
fixed-income securities of U.S. and non-U.S. issuers (described below) when the
Adviser has determined that such securities are appropriate for the achievement
of the Fund's investment objective. Because the market value of fixed-income
securities can be expected to vary inversely to changes in prevailing interest
rates, investing in such fixed-income securities can provide an opportunity for
capital appreciation when interest rates are expected to decline.
The non-convertible fixed-income securities referred to above will consist of
(1) corporate notes, bonds and debentures of U.S. issuers that are rated high
grade (i.e. within the three highest rating categories of Standard & Poor's or
Moody's Investors Service) or, if unrated, are deemed by the Adviser to be of
comparable quality to those securities that are rated high grade, (2) corporate
notes, bonds, debentures and other securities (such as Euro-currency
instruments) of non-U.S. issuers that are rated within the three highest rating
categories of rating services chosen by the Adviser to rate foreign debt
obligations or, if unrated, are deemed by the Adviser to be of comparable credit
quality to rated securities that may be purchased and (3) Treasury bills, notes
and bonds issued by the United States Government or its agencies or
instrumentalities and securities issued by foreign governments and supranational
agencies (such as World Bank).
The Fund may, for daily cash management purposes, invest in the
non-convertible fixed income securities described above or in high quality money
market securities. In addition, the Fund may invest, without limit, in any
combination of the U.S. Government securities and money market instruments
referred to above when, in the opinion of the Adviser, it is determined that a
temporary defensive position is warranted based upon current market conditions.
In such instances, the Fund will not be achieving its stated investment
objective.
The percentage of the Fund's assets invested in particular geographic sectors
will shift from time to time in accordance with the judgment of the Adviser. The
Adviser will advise the Fund with respect to all other investments for the Fund.
Capital appreciation will more often than not be sought through long-term
holdings but the Fund may attempt to take advantage of apparent short-term
trends, and such operations will occasion more trading, and hence, more than
normal brokerage commissions and other expenses. Investments are selected for
the Fund in such proportions and amounts as deemed advisable, subject to the
investment restrictions set forth herein (see "Investment Restrictions"), in
accordance with the Adviser's judgment of investment opportunities and the
general economic outlook.
INVESTMENT RESTRICTIONS
Fundamental Policies
The following investment restrictions are fundamental policies that cannot be
changed without the approval of the holders of a majority of the Fund's
outstanding voting securities (which means the lesser of (a) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented or (b) more than 50% of the outstanding shares).
The Fund may not:
1. Borrow money, except from a bank and then only if there is an asset
coverage of at least 300%; provided, however, that the Fund may not purchase
securities while outstanding borrowings exceed 5% of the Fund's total assets.
2. Underwrite the sale of securities of restricted securities.
3. Purchase or sell real estate.
4. Purchase or sell commodities or commodity contracts; provided, however,
that the terms commodities and commodity contracts shall not be deemed to
include (i) forward foreign currency exchange contracts (ii) futures contracts
on foreign currencies, (iii) options on futures contracts or (iv) options on
foreign currencies.
5. Lend money, except in connection with the acquisition of a portion of an
issue of publicly distributed bonds, debentures or other corporate obligations.
1
<PAGE>
6. Issue senior securities except to the extent that it is permitted (a) to
borrow money from banks pursuant to the Fund's investment restriction regarding
the borrowing of money, and (b) to enter into transactions involving forward
foreign currency exchange contracts, foreign currency futures contracts and
options thereon, and options on foreign currencies as described in the Fund's
Prospectus and this Statement of Additional Information.
7. Invest more than 25% of its total assets in any one industry. For purposes
of this policy, foreign governments and supranational agencies shall be deemed
to be separate industries.
8. Make short sales unless at the time of the sale the Fund owns, or by
virtue of ownership of other securities, has the right to obtain, at least an
equal amount of the securities sold short.
9. Issue bonds, debentures, or senior equity securities.
10. Issue any of its securities other than for cash or securities (including
securities of which the Fund is the issuer), except as a dividend or
distribution or in connection with a reorganization.
11. Purchase securities on margin, except as may be permitted under the
Investment Company Act of 1940 (the "1940 Act"), and except that, for purposes
of this restriction, the deposit or payment of initial or variation margin in
connection with the entry into or use of futures contracts will not be deemed to
be a purchase of securities on margin.
12. Invest in companies for the purpose of exercising control or
management.
13. Invest in securities of other investment companies except to the
extent permitted by the 1940 Act.
Other Policies
The following investment restrictions do not constitute fundamental policies
and may, therefore, be changed without shareholder approval.
The Fund intends to comply with the Statement of Policy on investment
companies approved by certain state securities commissioners. Additional
investment restrictions currently imposed by the Statement of Policy are as
follows: The Fund will not
1. Purchase any securities (excluding government securities) if by reason
thereof more than 5% of the Fund's total assets (taken at current value) would
then be invested in securities of a single issuer.
2. Purchase any securities if, as a result, the Fund would then have more
than 5% of its total assets (taken at current value) invested in securities of
companies (including their predecessors) with less than three years of operating
history.
3. Invest more than 5% of its total assets in puts, calls, straddles,
spreads, and/or any combination thereof; and
4. Invest in interests in oil, gas, or other mineral exploration or
development programs.
5. Invest more than 15% of its net assets in illiquid securities, comprised
of assets which may not be sold or disposed of in the ordinary course of
business within seven days at approximately the value at which the Fund has
valued the investment.
In addition, the Fund has given undertakings to certain state securities
commissioners to the effect that (a) the Fund will not purchase warrants (except
warrants acquired by the Fund in units or attached to securities which may be
deemed to be without value) in amounts in excess of 5% of the Fund's net assets,
and (b) the Fund may purchase put or call options or combinations thereof
written by others, provided the aggregate premiums paid for all such options
held do not exceed 2% of the Fund's net assets.
Writing Covered Call Options
The Fund may write covered call option contracts, which are options on
securities that the Fund owns, if such options are listed on an organized
securities exchange and the Adviser determines that such activity is consistent
with the Fund's investment objective. Regulations of certain state securities
commissions currently limit the aggregate value of the securities underlying the
calls to not more than 25% of the net assets of the Fund. A call option gives
the purchaser of the option the right to buy the underlying security from the
writer at the exercise price at any time prior to the expiration of the
contract, regardless of the market price of the security during the option
period. The premium paid to the writer is the consideration for undertaking the
obligations under the option contract. The writer forgoes the opportunity to
profit from an increase in the market price of the underlying security above the
exercise price except insofar as the premium represents such a profit. The
writing of option contracts is a highly specialized activity which involves
investment techniques and risks different from those ordinarily associated with
investment companies, and the restrictions listed above would tend to reduce
such risks.
Securities for the Fund's portfolio will continue to be bought and sold on
the basis of investment considerations and appropriateness to the fulfillment of
the Fund's investment objective. In order to close out a position, the Fund will
normally make a "closing purchase transaction"--the purchase of a call option on
the same security with the same exercise price and expiration date as the call
option which it has previously written on any particular security. When a
security is sold from the Fund's portfolio, the Fund will effect a closing
purchase transaction so as to close out any existing call option on that
security.
2
<PAGE>
Forward Foreign Currency Exchange Contracts
In order to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward foreign currency exchange contracts
("forward currency contracts") for the purchase or sale of a specified currency
at a specified future date. Such contracts may involve the purchase or sale of a
foreign currency against the U.S. dollar or may involve two foreign currencies.
The Fund may enter into forward currency contracts either with respect to
specific transactions or with respect to the Fund's portfolio positions.
Futures Contracts on Foreign Currencies and Options on Futures Contracts
The Fund may engage in futures contracts on foreign currencies and options on
these futures transactions as a hedge against changes in the value of the
currencies to which the Fund is subject or to which the Fund expects to be
subject in connection with future purchases, in accordance with the rules and
regulations of the Commodity Futures Trading Commission (the "CFTC"). The Fund
also may engage in such transactions when they are economically appropriate for
the reduction of risks inherent in the ongoing management of the Fund.
The Fund may buy and sell futures contracts on foreign currencies and groups
of foreign currencies. The Fund will engage in transactions in only those
futures contracts and options thereon that are traded on a commodities exchange
or a board of trade. A "sale" of a futures contract means the assumption of a
contractual obligation to deliver the specified amount of foreign currency at a
specified price in a specified future month. A "purchase" of a futures contract
means the assumption of a contractual obligation to acquire the currency called
for by the contract at a specified price in a specified future month. At the
time a futures contract is purchased or sold, the Fund must allocate cash or
securities as a deposit payment (initial margin). Thereafter, the futures
contract is valued daily and the payment of "variation margin" may be required,
resulting in the Fund's providing or receiving cash that reflects any decline or
increase in the contract's value, a process known as "marking to market".
Options on Foreign Currencies
The Fund may purchase and write put and call options on foreign currencies
traded on securities exchanges or boards of trade (foreign and domestic) for
hedging purposes in a manner similar to that in which forward currency contracts
and futures contracts on foreign currencies will be employed. Options on foreign
currencies are similar to options on stock, except that the Fund has the right
to take or make delivery of a specified amount of foreign currency, rather than
stock.
The Fund may purchase and write options to hedge the Fund's portfolio
securities denominated in foreign currencies. If there is a decline in the
dollar value of a foreign currency in which the Fund's portfolio securities are
denominated, the dollar value of such securities will decline even though
foreign currency value remains the same. See "Special Considerations and Risk
Factors". To hedge against the decline of the foreign currency, the Fund may
purchase put options on such foreign currency. If the value of the foreign
currency declines, the gain realized on the put option would offset, in whole or
in part, the adverse effect such decline would have on the value of the
portfolio securities. Alternatively, the Fund may write a call option on the
foreign currency. If the value of the foreign currency declines, the option
would not be exercised and the decline in the value of the portfolio securities
denominated in such foreign currency would be offset in part by the premium the
Fund received for the option.
If, on the other hand, the Adviser anticipates purchasing a foreign security
and also anticipates a rise in the value of such foreign currency (thereby
increasing the cost of such security), the Fund may purchase call options on the
foreign currency. The purchase of such options could offset, at least partially,
the effects of the adverse movements of the exchange rates. Alternatively, the
Fund could write a put option on the currency and, if the exchange rates move as
anticipated, the option would expire unexercised.
Segregated Accounts
At the time of purchase of a futures contract, option on futures contract or
forward foreign currency exchange contract, an amount of cash, U.S. Government
securities or other appropriate high-grade debt obligations equal to the
contract's market value minus initial margin deposit will be deposited in a
segregated account with the Fund's custodian bank to fully collateralize the
position.
Other Policies
The Fund is authorized to invest in the securities of other investment
companies subject to the limitations contained in the 1940 Act. In certain
countries, investments by the Fund may only be made through investments in other
investment companies that, in turn, are authorized to invest in the securities
that are issued in such countries. Investors should recognize that the Fund's
purchase of the securities of such other investment companies results in the
layering of expenses such that investors indirectly bear a proportionate part of
the expenses for such investment companies including operating costs and
investment advisory and administrative fees.
Special Considerations and Risk Factors
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include: differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries, and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to
3
<PAGE>
foreign taxes withheld prior to distribution. Foreign securities often trade
with less frequency and volume than domestic securities and therefore may
exhibit greater price volatility, and changes in foreign exchange rates will
affect the value of those securities which are denominated or quoted in
securities which are denominated or quoted in currencies other than the U.S.
dollar. Many of the foreign securities held by the Fund will not be registered
with, nor the issuers thereof 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 for the United States economy in such respects as growth of Gross
National Product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
The Fund's use of forward currency contracts involves certain investment
risks and transaction costs to which it might not otherwise be subject. These
include: (1) the Adviser may not always be able to accurately predict movements
within currency markets, (2) the skills and techniques needed to use forward
currency contracts are different from those needed to select the securities in
which the Fund invests and (3) there is no assurance that a liquid secondary
market will exist that would enable the Adviser to "close out" existing forward
contracts when doing so is desirable. The Fund's successful use of forward
currency contracts, options on foreign currencies, futures contracts on foreign
currencies and options on such contracts depends upon the Adviser's ability to
predict the direction of the market and political conditions, which require
different skills and techniques than predicting changes in the securities
markets generally. For instance, if the value of the securities being hedged
moves in a favorable direction, the advantage to the Fund would be wholly or
partially offset by a loss in the forward contracts or futures contracts.
Further, if the value of the securities being hedged does not change, the Fund's
net income would be less than if the Fund had not hedged since there are
transaction costs associated with the use of these investment practices.
These practices are subject to various additional risks. The correlation
between movements in the price of options and futures contracts and the price of
the currencies being hedged is imperfect. The use of these instruments will
hedge only the currency risks associated with investments in foreign currency
advances before it invests in securities denominated in such currency and the
currency market declines, the Fund might incur a loss on the futures contract.
The Fund's ability to establish and maintain positions will depend on market
liquidity. The ability of the Fund to close out a futures position or an option
depends upon a liquid secondary market. There is no assurance that liquid
secondary markets will exist for any particular futures contract or option at
any particular time.
The Fund may invest up to 5% of its net assets in fixed income securities
rated below investment grade (commonly referred to as "junk bonds"). Fixed
income securities rated below investment grade are deemed to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. Fixed income
securities rated below investment grade may involve a substantial risk of
default or may be in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of the issuers of such securities to make principal and
interest payments than is the case for higher grade debt securities. An economic
downturn affecting the issuer may result in an increased incidence of default
and a decline in prices of the issuer's lower-rated securities. The market for
fixed income securities rated below investment grade may be thinner and less
active than for higher-rated securities. The secondary market in which fixed
income securities rated below investment grade are traded is generally less
liquid than the market for higher grade debt securities.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in advertisements
or reports to shareholders or prospective investors. Performance information in
advertisements and sales literature may be expressed as a yield of a class of
shares and as a total return of a class of shares.
Standardized quotations of average annual total return for Class A or Class B
Shares will be expressed in terms of the average annual compounded rate of
return for a hypothetical investment in either Class A or Class B Shares over
periods of 1, 5 and 10 years or up to the life of the class of shares),
calculated for each class separately pursuant to the following formula: P(1+T)n
= ERV (where P = a hypothetical initial payment of $1,000, T = the average
annual total return, n = the number of years, and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the period). All
total return figures reflect the deduction of a proportional share of each
Class's expenses (on an annual basis), deduction of the maximum initial sales
load in the case of Class A Shares and the maximum contingent deferred sales
charge applicable to a complete redemption of the investment in the case of
Class B Shares, and assume that all dividends and distributions on Class A and
Class B Shares are reinvested when paid.
Performance information for the Fund may be compared, in reports and
promotional literature, to: (i) the EAFE (European, Australian, and Far Eastern)
Index, the Europac Index, or other unmanaged indices so that investors may
compare the Fund's results with those of a group of unmanaged securities widely
regarded by investors as representative of the securities markets in general;
(ii) other groups of mutual funds tracked by Lipper Analytical Services, Inc., a
widely used independent research firm which ranks mutual funds by overall
performance, investment objectives, and assets, or tracked by other services,
companies, publications, or persons who rate or rank mutual funds on overall
performance or other criteria; and (iii) the Consumer Price Index
4
<PAGE>
(measure for inflation) to assess the real rate of return from an investment in
the Fund. Unmanaged indices may assume the reinvestment of dividends but
generally do not reflect deductions for administrative and management costs and
expenses.
The 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 Morningstar, Inc.
Additionally, the 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, 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
& Poor's The Outlook, and Personal Investor. The 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 against certain widely
acknowledged outside standards or indices for stock and bond market performance,
such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones
Industrial Average, Europe Australia Far East Index (EAFE), Morgan Stanley
Capital International World (net) Index, Consumer's Price Index, Shearson Lehman
Corporate Index and Shearson Lehman T-Bond Index. The S&P 500 is a commonly
quoted market value-weighted and unmanaged index showing the changes in the
aggregate market value 500 common stocks relative to the base period 1941-43.
The S&P 500 is composed almost entirely of common stocks of companies listed on
the New York Stock Exchange, although the common stocks of a few companies
listed on the American Stock Exchange or traded over the counter are included.
The 500 companies represented include 400 industrial, 60 transportation and 40
financial services concerns. The S&P 500 represents about 80% of the market
value of all issues traded on the New York Stock Exchange.
Advertisements, sales literature and other communications may contain
information about the Fund and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Fund to
respond quickly to changing market and economic conditions. From time to time
the Fund may include specific portfolio holdings or industries, in such
communications. To illustrate components of overall performance, the Fund 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 Fund's portfolio; or compare the Fund's equity or bond return future to
well-known indices of market performance, including, but not limited to: the S&P
500 Index, Dow Jones Industrial Average, First Boston High Yield Index and
Salomon Brothers Corporate Bond and Government Bond Indices.
For the 1, 5 and 10 year periods ended June 30, 1996, the average annual
total return of the Class A was 15.63%, 13.02% and 5.62%, respectively. For the
one year ended June 30, 1996 and, since inception, 7/15/94 for class B Shares,
the average annual total return was 15.50% and 10.16%, respectively. Performance
information reflects only the performance of a hypothetical investment in each
class during the particular time period on which the calculations are based.
Performance information should be considered in light of the Fund's investment
objectives and policies, characteristics and quality of the portfolio, and the
market condition during the given time period, and should not be considered as a
representation of what may be achieved in the future.
The Fund may also compute aggregate total return for specified periods based
on a hypothetical Class A or Class B account with an assumed initial investment
of $10,000. The aggregate total return is determined by dividing the net asset
value of this account at the end of the specified period by the value of the
initial investment and is expressed as a percentage. Calculation of aggregate
total return reflects payment of the Class A Shares's maximum sales charge of
4.75% and assumes reinvestment of all income dividends and capital gain
distributions during the period. Based on the foregoing, the Class A Share's
aggregate total return quotation for the period commencing May 13, 1960 and
ending June 30, 1996 was 2,011%.
The Fund also may quote annual, average annual and annualized total return
and aggregate total return performance data, for both classes of shares of the
Fund, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted above. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities, supervises
their execution and negotiates brokerage commissions on behalf of the Fund. It
is the practice of the Adviser to seek the best prices and execution of orders
and to negotiate brokerage commissions which in its opinion are reasonable in
relation to the value of the brokerage services provided by the executing
broker. Brokers who have executed orders for the Fund are asked to quote a fair
commission for their services. If the execution is satisfactory and if the
requested rate approximates rates currently being quoted by the other brokers
selected by the Adviser, the rate is deemed by the Adviser to be reasonable.
Brokers may ask for higher rates of commission if all or a portion of the
securities involved in the transaction are positioned by the broker, if the
broker believes it has brought the Fund an unusually favorable trading
opportunity, or if the broker regards its research services as being of
exceptional value. Payment of such
5
<PAGE>
commissions is authorized by the Adviser after the transaction has been
consummated. If the Adviser more than occasionally differs with the broker's
appraisal of opportunity or value, the broker would not be selected to execute
trades in the future.
The Adviser believes that the Fund benefits with a securities industry
comprised of many diverse firms and that the long-term interests of shareholders
of the Fund are best served by their brokerage policies which include paying a
fair commission rather than seeking to exploit their leverage to force the
lowest possible commission rate. The primary factors considered in determining
the firms to which brokerage orders are given are the Adviser's appraisal of:
the firm's ability to execute the order in the desired manner, the value of
research services provided by the firm, and the firm's attitudes toward and
interest in mutual funds in general including those managed and sponsored by the
Adviser. The Adviser does not offer or promise to any broker an amount or
percentage of brokerage commissions as an inducement or reward for the sale of
shares of the Fund. Over-the-counter purchases and sales are transacted directly
with principal market-makers except in those circumstances where, in the opinion
of the Adviser, better prices and executions are available elsewhere. In the
over-the-counter market, securities are usually traded on a "net" basis with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security usually contains a profit to the dealer. The
Fund also expects that securities will be purchased at time in underwritten
offerings where the price includes a fixed amount of compensation, usually
referred to as the underwriter's concession or discount. The foregoing
discussion does not relate to 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 Fund.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor Federal,
state, local, and foreign political developments. Many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers, as a group, tend
to monitor a broader universe of securities and other matters than the Adviser's
staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of the information will be used in connection with the Fund. While this
information may be useful in varying degrees and may tend to reduce the
Adviser's expense, it is not possible to estimate its value and in the opinion
of the Adviser it does not reduce the Adviser's expenses in a determinable
amount. The extent to which the Adviser makes use of statistical research and
other services furnished by brokers is considered by the Adviser in the
allocation of brokerage business but there is no formula by which such business
is allocated. The Adviser does so in accordance with its judgment of the best
interests of the Fund and its shareholders.
During the fiscal years ended June 30, 1994, 1995, and 1996, brokerage
commissions paid by the Fund totalled $1,204,612, $1,792,000, and $1,279,610,
respectively.
SERVICES OF THE ADVISER
The Adviser provides certain services and facilities required to carry on the
day-to-day operations of the Fund (for which it receives a management fee) other
than the costs of printing and mailing proxy materials, reports and notices to
shareholders; outside legal and auditing accounting services, regulatory filing
fees and expenses of printing the Fund's registration statements (but the
Distributor purchases such copies of the Fund's prospectuses and reports and
communication to shareholders as it may require for sales purposes), insurance
expense, association membership dues, brokerage fees, and taxes.
The Adviser is an indirect wholly-owned subsidiary of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life"). Phoenix Home Life's principal
place of business is located at One American Row, Hartford, Connecticut, where
the Company manages combined assets of approximately $12 billion through
advisory accounts and mutual funds. The Adviser also serves as investment
adviser to Phoenix Multi-Sector Short Term Fund, Phoenix California Tax Exempt
Bonds, Inc., Phoenix Income and Growth Fund, Phoenix Multi-Sector Fixed Income
Fund, Inc. and Phoenix Strategic Equity Series Fund. The Adviser currently has
approximately $1.7 billion in assets under management. The Adviser has acted as
an investment adviser for over sixty years.
The current Management Agreement was approved by the Trustees of the Fund on
March 16, 1993 and by the shareholders of the Fund on May 7, 1993. The
Management Agreement became effective on May 14, 1993, and it will continue in
effect until lapsed or terminated. The Management Agreement will continue in
effect from year to year if specifically approved annually by a majority of the
Trustees who are not interested persons of the parties thereto, as defined in
the 1940 Act, and by either (a) the Trustees of the Fund or (b) the vote of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act). The Agreement may be terminated without penalty at any time by the
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund or by the Adviser upon 60 days' written notice and will automatically
terminate in the event of its "assignment" as defined in Section (2)(a)(4) of
the 1940 Act.
6
<PAGE>
The Management Agreement provides that the Adviser is not liable for any act
or omission in the course of, or in connection with, rendering services under
the Agreement in the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties under the Agreement. The
Agreement permits the Adviser to render services to others and to engage in
other activities.
As compensation for its services, the Adviser receives a fee, which is
accrued daily against the value of the Fund's net assets and is paid by the Fund
monthly. The fee is computed at an annual rate of .75% of the Fund's average
daily net assets of up to $1 billion, .70% of the Fund's average daily net
assets from $1 billion to $2 billion, and .65% of the Fund's average net assets
in excess of $2 billion. Total management fees for the fiscal years ended June
30, 1994, 1995, and 1996 amounted to $813,237, $972,771, and 1,037,386,
respectively.
The Adviser makes its personnel available to serve as officers and
"interested" Trustees of the Fund. The Fund has not directly compensated any of
its officers or Trustees for services in such capacities except to pay fees to
the Trustees who are not otherwise affiliated with the Fund. The Fund reimburses
all Trustees for their out-of-pocket expenses. The Trustees of the Fund are not
prohibited from authorizing the payment of salaries to the officers pursuant to
the Management Agreement, including out-of-pocket expenses, at some future time.
In addition to the management fee, expenses paid by the Fund include: fees of
Trustees who are not "interested persons," interest charges, taxes, fees and
commissions of every kind, including brokerage fees, expenses of issuance,
repurchase or redemption of shares, expenses of registering or qualifying shares
for sale (including the printing and filing of the Fund's registration
statements, reports and prospectuses excluding those copies used for sales
purposes which the Distributor purchases at printer's over-run cost), accounting
services fees, insurance expenses, association membership dues, all charges of
custodians, transfer agents, registrars, auditors and legal counsel, expenses of
preparing, printing and distributing all proxy material, reports and notices to
shareholders, and, all costs incident to the Fund's existence as a Massachusetts
business trust.
The Adviser has agreed, under the terms of the Management Agreement, to
reimburse the Fund to the extent that, in any fiscal year, aggregate annual
expenses of the Fund, exclusive of taxes, interest, brokerage fees, payments
made pursuant to a Rule 12b-1 distribution plan, and extraordinary charges such
as litigation costs, exceed the most restrictive expense limitations imposed by
any state in which the Fund's shares are qualified for sale. Currently, the most
restrictive expense limitation currently applicable to the Fund, which provides
that aggregate annual expenses of an investment company (which excludes
interest, taxes, certain annual distribution plan expenses, litigation costs,
and capital items such as brokerage costs) shall not normally exceed 2.5% of the
first $30,000,000 of the Fund's average net assets, 2% of the next $70,000,000
of the Fund's average net assets, and 1.5% of the remaining average net assets
of the investment company for any fiscal year. To the extent that the Fund's
expenses exceed this limitation, the Adviser would be required to reduce or
rebate its management fee. The Adviser would not be required to absorb any other
Fund expenses in excess of its fees. See the "Fund Expenses" Table in the Fund's
current Prospectus for further information.
NET ASSET VALUE
The net asset value per share of each class of shares of the Fund will be
determined at the close of the general trading session of the New York Stock
Exchange (the "Exchange"), on each business day the Exchange is open for regular
trading. The net asset value per share of each class of shares of the Fund is
computed by dividing the value of the Fund's securities, plus any cash and other
assets (including dividends and interest accrued but not collected) less all
liabilities (including accrued expenses) attributable to such class, by the
number of shares of the class outstanding. See the Fund's current Prospectus for
more information.
HOW TO BUY SHARES
Shares may be purchased from investment dealers having sales agreements with
the Distributor at the public offering price (the net asset value next computed
following receipt by State Street Bank and Trust Company of a purchase
application in proper form, plus the applicable sales charge). The minimum
initial investment is $500 ($25 if using the bank draft investing program
designated "Investo-Matic") and the minimum subsequent investment amount is $25.
In the case of employee payroll deduction plans, organized group plans and other
benefit programs or arrangements offered by certain dealers, the minimum initial
investment may be fixed from time to time at such lesser amounts as the Adviser
in its sole discretion may determine, and may in all cases, be waived from time
to time by the Adviser, in its sole discretion. See the Fund's current
Prospectus for additional information.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares of the Fund may be purchased from investment dealers at a price equal
to their net asset value per share, plus a sales charge which, at the election
of the purchaser, may be imposed either (i) at the time of the purchase (the
"initial sales charge alternative"), or (ii) on a contingent deferred basis (the
"deferred sales charge alternative").
Class A Shares
An investor who elects the initial sales charge alternative acquires 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
7
<PAGE>
subject to an ongoing distribution services fee at an annual rate of up to 0.30%
of the Fund's aggregate average daily net assets attributable to the Class A
Shares. However, for the fiscal year 1997, the Distributor has voluntarily
agreed to limit the distribution services fee for Class A Shares to 0.25%. In
addition, certain purchases of Class A Shares qualify for reduced initial sales
charges. See the Fund's current Prospectus for additional information.
Class B Shares
An investor who elects the deferred sales charge alternative acquires Class B
Shares. Class B Shares do not incur a sales charge when they are purchased, but
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. See the Fund's current Prospectus for additional
information.
Class B Shares are subject to an ongoing distribution services fee at an
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 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 Fund's
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. See "Conversion Feature," below.
The alternative purchase arrangement permits 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 Fund, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution services fee and contingent deferred sales charges on Class B
Shares prior to conversion would be less than the initial sales charge and
accumulated distribution services fee on Class A Shares purchased at the same
time, and to what extent such differential would be offset by the lower expenses
attributable to Class A Shares.
Class A Shares are subject to a lower distribution services fee and,
accordingly, pay correspondingly higher dividends, to the extent any dividends
are paid, per share. However, because initial sales charges are deducted at the
time of purchase, such investors would not have all their funds invested
initially and, therefore, would initially own fewer shares. Investors not
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class A
Shares because the accumulated continuing distribution charges on Class B Shares
may exceed the initial sales charge on Class A Shares during the life of the
investment. Again, however, such investors must weigh this consideration against
the fact that, because of such initial sales charges, not all their funds will
be invested initially. However, other investors might determine that it would be
more advantageous to purchase Class B Shares to have all their funds invested
initially, although remaining subject to higher continuing distribution charges
and, for a five-year period, being subject to a contingent deferred sales
charge.
The distribution expenses incurred by the Distributor in connection with the
sale of the shares will be paid, in the case of Class A Shares, from the
proceeds of the initial sales charge and the ongoing distribution services fee
and, in the case of Class B Shares, from the proceeds of the ongoing
distribution services fee and the contingent deferred sales charge incurred upon
redemption within five years of purchase. Sales personnel of broker-dealers
distributing the Fund's shares may receive differing compensation for selling
Class A or Class B Shares. Investors should understand that the purpose and
function of the contingent deferred sales charge and ongoing distribution
services fee with respect to the Class B Shares are the same as those of the
initial sales charge and ongoing distribution services fees with respect to the
Class A Shares.
Dividends paid by the Fund, if any, with respect to Class A and Class B
Shares will be calculated in the same manner at the same time on the same day,
except that the higher distribution services fee and any incremental transfer
agency costs relating to Class B Shares will be borne exclusively by that class.
See "Dividends, Distributions and Taxes."
The Trustees of the Fund have determined that currently no conflict of
interest exists between the Class A and Class B Shares. On an ongoing basis, the
Trustees of the Fund, pursuant to their fiduciary duties under the 1940 Act and
state laws, will seek to ensure that no such conflict arises.
Conversion Feature
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were 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 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. The
purpose of the conversion feature is to relieve the holders of Class B Shares
that have been outstanding for a period of time sufficient for the Underwriter
to have been compensated for distribution expenses related to the Class B Shares
from most of the burden of such distribution-related expenses.
8
<PAGE>
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Shares in the sub-account will also convert to Class A.
EXCHANGE PRIVILEGES
Subject to limitations, shareholders may exchange Class A or Class B Shares
held in book-entry form for shares of the same class of other Phoenix Funds
(except Phoenix Multi-Sector Short Term Bond Fund Class A Shares held less than
6 months and Class A shares of Phoenix Money Market Series), provided the
following conditions are met: (1) the shares that will be acquired in the
exchange (the "Acquired Shares") are available for sale in the shareholder's
state of residence; (2) the Acquired Shares are the same class as the shares to
be surrendered (the "Exchanged Shares"); (3) the Acquired Shares will be
registered to the same shareholder account as the Exchanged Shares; (4) the
account value of the Fund whose shares are to be acquired must equal or exceed
the minimum initial investment amount required by that Fund after the exchange
is implemented; and (5) if a shareholder has elected not to utilize the
Telephone Exchange Privilege (see below), a properly executed exchange request
must be received by Equity Planning.
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B Shares of the Fund exchanged for the same class of shares of
another Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel the privilege ("Systematic Exchange").
Shareholders who maintain an account balance in the Fund of at least $5,000,
or $2,000 for tax qualified retirement benefit plans (calculated on the basis of
the net asset value of the shares held in a single account), may direct that
shares of the Fund be automatically exchanged at predetermined intervals for
shares of the same class of another Phoenix Fund. If the shareholder is
participating in the Self Security program offered by Phoenix Home Life, it is
not necessary to maintain the above account balances in order to use the
Systematic Exchange Privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and subsequent
amount that may be exchanged under the Systematic Exchange is $25. Systematic
Exchange forms are available from Equity Planning.
Exchanges will be based upon each Fund's net asset value per share next
computed following receipt of a properly executed exchange request, without
sales charge. On Class B Share exchanges, the contingent deferred sales charge
schedule of the original shares purchased continues to apply.
The exchange of shares from one fund to another is treated as sale of the
Exchanged Shares and a purchase of the Acquired Shares for Federal income tax
purposes. The shareholder may, therefore, realize a taxable gain or loss. See
"Dividends, Distributions and Taxes" of the Prospectus for information
concerning the Federal income tax treatment of a disposition of shares. It is
the policy of the Adviser to discourage and prevent frequent trading by
shareholders among the Fund and other Phoenix Funds in response to market
fluctuations. The Fund reserves the right to terminate or modify its exchange
privileges at any time upon giving prominent notice to shareholders at least 60
days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
REDEMPTION OF 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 Fund 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 after receipt of the
check. See the Fund's current Prospectus for further information.
Redemptions by Class B shareholders will be subject to the applicable
deferred sales charge, if any.
Each shareholder account in the Fund 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 60 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. See the Fund's current Prospectus
for more information.
9
<PAGE>
Telephone Redemptions
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Fund's current Prospectus for
additional information.
Reinvestment Privilege
Shareholders who may have overlooked features of their investment at the time
they redeemed have the privilege of reinvesting their investment at net asset
value. See the Fund's current Prospectus for more information and conditions
attached to this privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to remain qualified as a regulated investment company under
certain provisions of the Code. Under such provisions, the Fund will not be
subject to Federal income tax on such part of its ordinary income and net
realized capital gains which it distributes to shareholders provided it meets
certain distribution requirements. To qualify for treatment as a regulated
investment company, the Fund generally must, among other things (a) derive in
each taxable year at least 90% of its gross income from (i) dividends, (ii)
interest, (iii) payments with respect to securities loans, (iv) gains from the
sale or other disposition of stock or securities or foreign currencies, and (v)
other income derived with respect to its business of investing in such stock,
securities or currencies; and (b) derive in each taxable year less than 30% of
its gross income from gains (without deduction for losses) from the sale or
other disposition of securities held for less than three months, and meet
certain diversification requirements imposed under the Code at the end of each
quarter of the taxable year.
Dividends paid by the Fund will be taxable to shareholders as ordinary
income, except for (a) such portion as may exceed a shareholder's ratable share
of the Fund's earnings and profits, which excess will be applied against and
reduce the shareholder's cost or other tax basis for his shares, and (b) amounts
representing a distribution of net capital gains, if any, which are designated
by the Fund as capital gain distributions. If the amount described in (a) above
exceeds the shareholder's tax basis for his shares, the excess over basis will
be treated as gain from the sale or exchange of such shares. The excess of any
net long-term capital gains over net short-term capital losses recognized and
distributed by the Fund and designated by the Fund as a capital gain
distribution, will be taxable to shareholders as a long-term capital gain
regardless of the length of time a particular shareholder may have held his
shares in the Fund. Dividends and distributions are taxable as described,
whether received in cash or reinvested in additional shares of the Fund.
Under certain circumstances, the sales charge incurred in acquiring shares of
the Fund may not be taken in account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of the Fund are
disposed of within 90 days after the date on which they were acquired and new
shares of a regulated investment company are acquired without a sales charge or
at a reduced sales charge. In that case, the gain or loss realized on the
disposition will be determined by excluding from the tax basis of the shares
disposed all or a portion of the sales charge incurred in acquiring those
shares. This exclusion applies to the extent that the otherwise applicable sales
charge with respect to the newly acquired shares is reduced as a result of the
shareholder having incurred a sales charge initially. The portion of the sales
charge affected by this rule will be treated as a sales charge paid for the new
shares.
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to the declaration of a dividend or
distribution, but the dividend or distribution generally would be taxable to
them.
Some shareholders may be subject to withholding of Federal income tax on
dividends and redemption payments from the Fund ("backup withholding") at the
rate of 31%. Corporate shareholders and certain other shareholders specified in
the Code generally are exempt from such backup withholding. Generally,
shareholders subject to backup withholding will be (i) those for whom a
certified taxpayer identification number is not on file with the Fund, (ii)
those about whom notification has been received (either by the shareholder or
the Fund) from the Internal Revenue Service that they are subject to backup
withholding or (iii) those who, to the Fund's knowledge, have furnished an
incorrect taxpayer identification number. Generally, to avoid backup
withholding, an investor must, at the time an account is opened, certify under
penalties of perjury that the taxpayer identification number furnished is
correct and that he or she is not subject to backup withholding.
It is anticipated that the Fund will receive dividends from its investments,
in which case dividends paid by the Fund from net investment income may qualify
for the 70% corporate dividends received deduction, but only to the extent that
such income is derived from dividends of domestic corporations.
The Code imposes a 4% nondeductible excise tax on a regulated investment
company, such as the Fund, if it does not distribute to its shareholders during
the calendar year an amount equal to at least 98% of the Fund's capital gains
net income for the 12-month period ending on October 31 of each calendar year.
In addition, an amount equal to any undistributed investment company taxable
income or capital gain net income from the previous calendar year must also be
distributed to avoid the excise tax. The excise
10
<PAGE>
tax is imposed on the amount by which the regulated investment company does not
meet the foregoing distribution requirements. If the Fund has taxable income
that would be subject to the excise tax, the Fund generally intends to
distribute such income so as to avoid payment of the excise tax.
Under another provision of the Code, any dividend declared by the Fund to
shareholders of record in October, November, and December of any calendar year
will be deemed to have been received by, and will be taxable to shareholders as
of December 31 of such calendar year, provided that the dividend is actually
paid by the Fund before February 1 of the following year.
Based on the foregoing, the Fund's policy is to distribute to its
shareholders at least 90% of net investment company taxable income, as defined
above and in the Code, and any net realized capital gains for each year and,
consistent therewith, to meet the distribution requirements of Part I of
subchapter m of the Code. The Fund intends to meet the other requirements of
Part I of subchapter m, including the requirements with respect to
diversification of assets and sources of income, so that the Fund will continue
to qualify as a regulated investment company. Because of the requirements that
less than 30% of the Fund's gross income must be derived from gains from the
sale or other disposition of securities held for less than three months, the
Fund may be restricted in the following activities, all of which produce such
gains: writing of options on securities which have been held less than three
months, writing of options which expire in less than three months, and effecting
closing purchase transactions with respect to options which have been written
less than three months prior to such transactions.
Equity options written by the Fund (covered call options on portfolio stock)
will be subject to the provisions under Section 1234 of the Code. If the Fund
writes a call option, no gain is recognized upon its receipt of a premium. If
the option lapses or is closed out, any gain or loss is treated as a short-term
capital gain or loss. If a call option is exercised, any resulting gain or loss
is a short-term or long-term capital gain or loss depending on the holding
period of the underlying stock.
Many futures contracts entered into by the Fund and all listed non-equity
options written or purchased by the Fund (including covered call options written
on debt securities and options written or purchased on futures contracts) will
be governed by Section 1256 of the Code. Absent a tax election to the contrary,
gain or loss attributable to the lapse, exercise or closing out of any such
position will be treated as 60% long-term and 40% short-term capital gain or
loss, and on the last trading day of the Fund's fiscal year (and, generally on
October 31 for purposes of the 4% excise tax), all outstanding Section 1256
positions will be marked to market (i.e. treated as if such positions were
closed out at their closing price on such day), with any resulting gain or loss
recognized as 60% long-term and 40% short-term capital gain or loss. Under
certain circumstances, entry into a futures contract to sell a security may
constitute a short sale for Federal income tax purposes, causing an adjustment
in the holding period of the underlying security or a substantially identical
security in the Fund's portfolio.
Positions of the Fund which consist of at least one stock and at least one
stock option or other position with respect to a related security which
substantially diminishes the Fund's risk of loss with respect to such stock
could be treated as a "straddle" which is governed by Section 1092 of the Code,
the operation of which may cause deferral of losses, adjustments in the holding
periods of stock or securities and conversion of short-term capital losses into
long-term capital losses. An exception to these straddle rules exists for any
"qualified covered call options" on stock options written by the Fund.
If the Fund invests in stock of certain passive foreign investment companies,
the Fund may be subject to U.S. Federal income taxation on a portion of any
"excess distribution" with respect to, or gain from the disposition of, such
stock. The tax would be determined by allocating such distribution or gain
ratably to each day of the Fund's holding period for the stock. The
distributions or gain so allocated to any taxable year of the Fund, other than
the taxable year of the excess distribution or disposition, would be taxed to
the Fund at the highest ordinary income rate in effect for such year, and the
tax would be further increased by an interest charge to reflect the value of the
tax deferral deemed to have resulted from the ownership of the foreign company's
stock. Any amount of distribution or gain allocated to the taxable year of the
distribution or disposition would be included in the Fund's investment company
taxable income and, accordingly, would not be taxable to the Fund to the extent
distributed by the Fund as a dividend to its shareholders. The Fund may elect to
mark to market (i.e., treat as if sold at their closing market price on same
day), its investments in passive foreign investment companies and avoid any tax
and or interest charge on excess distributions.
The foregoing discussion of U.S. Federal income tax law relates solely to
the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and foreign tax
consequences of ownership of shares of the Fund, including the possibility
that such a shareholder may be subject to a U.S. withholding tax at a rate of
31% (or at a lower rate under an applicable income tax treaty) on amounts
constituting ordinary income received by him or her, where such amounts are
treated as income from U.S. sources under the Code.
The Fund furnishes all shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing federal income tax returns.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS Regulations, the Fund may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gains distributions
or share redemption proceeds, for an account which does not have a taxpayer
identification
11
<PAGE>
number or social security number and certain required certifications. The Fund
reserves the right to refuse to open an account for any person failing to
provide a taxpayer identification number along with the required certifications.
The Fund furnishes all shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing income tax returns.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund and other Phoenix Funds may be offered in connection with
employer-sponsored 401(k) plans. National and its affiliates may provide
administrative services to these plans and to their participants, in addition to
the services that National and its affiliates provide to the Phoenix Funds, and
receive compensation therefor. For information on the terms and conditions
applicable to employee participation in such plans, including information on
applicable plan administrative charges and expenses, prospective investors
should consult the plan documentation and employee enrollment information which
is available from participating employers.
THE DISTRIBUTOR
Phoenix Equity Planning Corporation, ("Equity Planning"), acts as the
Distributor of the Fund and as such will conduct a continuous offering pursuant
to a "best efforts" arrangement requiring it to take and pay for only such
securities as may be sold to the public. Equity Planning is an indirect less
than wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company and
an affiliate of National. Shares of the Fund may be purchased through investment
dealers who have sales agreements with the Distributor. During the fiscal years
1994, 1995, and 1996, purchasers of shares of the Fund paid aggregate sales
charges of $92,395, $149,157, and $132,820, respectively, of which the principal
underwriter received net commissions of $12,138, $22,744, and $21,894,
respectively, for its services, the balance being paid to dealers.
The Underwriting Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Distributor, by vote
of a majority of the outstanding voting securities of the Fund, or by vote of a
majority of the Fund's Trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of the
Distribution Plan or in any related agreements. The Underwriting Agreement will
terminate automatically in the event of its assignment.
Dealers with whom the Distributor has entered into sales agreements receive
sales charges in accordance with the commission table set forth in the
Prospectus. The Distributor may from time to time pay, from its own resources or
pursuant to the Plan of Distribution described below, a bonus or other incentive
to dealers (other than the Underwriter) which employ a registered representative
who sells a minimum dollar amount of the shares of the Fund during a specific
period of time. Such bonus or other incentive may take the form of payment for
travel expenses, including lodging, incurred in connection with trips taken by
qualifying registered representatives and members of their families to places
within or without the United States or other bonuses such as gift certificates
or the cash equivalent of such bonuses. The Distributor may, from time to time,
reallow the entire portion of the sales charge 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.
PLANS OF DISTRIBUTION
The Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each class of shares of the Fund (the "Class A Plan", the "Class B
Plan", and collectively the "Plans"). The Plans permit the Fund to reimburse the
Underwriter for expenses incurred in connection with activities intended to
promote the sale of shares of each class of shares of the Fund. For the fiscal
year 1997, the Underwriter has voluntarily agreed to limit the Rule 12b-1 fee
for Class A Shares to 0.25%.
Pursuant to the Class A Plan, the Fund may reimburse the Distributor for
actual expenses of the Distributor up to .30% of the average daily net assets of
the Fund's Class A Shares. Under the Class B Plan, the Fund may reimburse the
Distributor monthly for actual expense of the Distributor up to 1.00% of the
average daily net assets of the Fund's Class B Shares. Expenditures under the
Plans shall consist of: (i) commissions to sales personnel for selling shares of
the Fund (including underwriting fees and financing expenses incurred in
connection with the sale of Class B Shares); (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 Fund; (iv) payment of expenses incurred in sales and promotional
activities, including advertising expenditures related to the Fund; (v) the
costs of preparing and distributing promotional materials; (vi) the cost of
printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; and (vii) such other similar services that
the Trustees of the Fund determines are reasonably calculated to result in the
sale of shares of the Fund;
12
<PAGE>
provided however, a portion of such amount paid to the Distributor, which
portion shall be equal to or less than 0.25% annually of the average daily net
assets of the Fund shares may be paid for reimbursing the costs of providing
services to the shareholders, including assistance in connection with inquiries
related to shareholder accounts (the "Service Fee").
In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor, such
as services to the Fund's shareholders; or services providing the Fund with more
efficient methods of offering shares to coherent groups of clients, members or
prospects of a participant; or services permitting bulking of purchases or
sales, or transmission of such purchases or sales by computerized tape or other
electronic equipment; or other processing.
The fee received by the Distributor under the early years of the Plans is not
likely to reimburse the Distributor for the total distribution expenses it will
actually incur as a result of the Fund having fewer assets and the Distributor
incurring greater promotional expenses during the start-up phase. No amounts
paid or payable by the Fund under the Plan for Class A Shares may be used to pay
for, or reimburse payment for, sales or promotional services or activities
unless such payment or reimbursement takes place prior to the earliest of (a)
the last day of the one year period commencing on the last day of the calendar
quarter during which the specific service or activity was performed, or (b) the
last day of the one year period commencing on the last day of the calendar
quarter during which payment for the services or activity was made by a third
party on behalf of the Fund. If the Plans are terminated in accordance with
their terms, the obligations of the Fund to make payments to the Distributor
pursuant to the Plans will cease and the Fund will not be required to make any
payments past the date on which each Plan terminates.
In addition to the amount paid to dealers pursuant to the sales charge table
in the Prospectus, the Distributor may from time to time pay, from its own
resources or pursuant to the Plans, a bonus or other incentive to dealers (other
than the Distributor) which employ a registered representative who sells a
minimum dollar amount of the shares of the Fund during a specific period of
time. Such bonus or other incentive may take the form of payment for travel
expenses, including lodging, incurred in connection with trips taken by
qualifying registered representatives and members of their families to places
within or without the United States or other bonuses such as gift certificates
or the cash equivalent of such bonuses. 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.
For the fiscal year ended June 30, 1996 the Fund paid Rule 12b-1 Fees in the
amount of $375,470 of which the Distributor received $134,244 and unaffiliated
broker-dealers received $241,266. The Rule 12b-1 payments were used for (1)
compensating dealers ($338,342), (2) Compensation to Sales and Shareholder
Services Personnel ($25,803), (3) Marketing Material ($5,381), (4) Promotion
Expenses ($5,945).
On a quarterly basis, the Fund's Trustees review a report on expenditures
under the Plans and the purposes for which expenditures where made. The Trustees
conduct an additional, more extensive review annually in determining whether the
Plans will be continued. By its terms, continuation of the Plans from year to
year is contingent on annual approval by a majority of the Fund's Trustees and
by a majority of the Trustees who are not "interested persons" (as defined in
the 1940 Act) and who have no direct or indirect financial interest in the
operation of the Plans or any related agreements (the "Plan Trustees"). The
Plans provide that they may not be amended to increase materially the costs
which the Fund may bear pursuant to the Plans without approval of the
shareholders of the Fund and that other material amendments to the Plans must be
approved by a majority of the Plan Trustees by vote cast in person at a meeting
called for the purpose of considering such amendments. The Plans further
provides that while it is in effect, the selection and nomination of Trustees
who are not "interested persons" shall be committed to the discretion of the
Trustees who are not "interested persons". The Plans may be terminated at any
time by vote of a majority of the Plan Trustees or a majority of the outstanding
shares of the Fund.
The National Association of Securities Dealers (the "NASD"), recently
approved certain amendments to the NASD's mutual fund maximum sales charge rule.
The amendments would, under certain circumstances, regard distribution fees to
be asset-based sales charges subject to NASD sales load limits. An amendment to
the NASD's maximum sales charge rule may require the Trustees to amend the Plan.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the Trustees and
executive officers of the Fund, including their principal occupations during the
past five years. Unless otherwise noted, the address of each executive officer
and Trustee is One American Row, Hartford, Connecticut, 06115. On November 15,
1995, the Trustees voted to increase the number of Trustees to fourteen and to
appoint Francis E. Jeffries, Everett C. Morris and Calvin J. Pedersen to fill
the vacancies caused by the increase. The Trustees and executive officers are
listed below:
13
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ----------------------------- --------------------------------------------------------------------------
<S> <C> <C>
C. Duane Blinn (69) Trustee Partner in the law firm of Day, Berry & Howard.
Day, Berry & Howard Director/Trustee, Phoenix Funds (1980-present).
CityPlace Trustee, Phoenix Duff & Phelps Institutional Mutual
Hartford, CT 06103 Funds (1996-present). Director/ Trustee, the National
Affiliated Investment Companies (until 1993).
Robert Chesek (62) Trustee Trustee/Director, Phoenix Funds (1981-present) and
49 Old Post Road Chairman (1989-1994). Director/Trustee, the National
Wethersfield, CT 06109 Affiliated Investment Companies (until 1993). Vice
President, Common Stock, Phoenix Home Life Mutual
Insurance Company (1980-1994). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present).
E. Virgil Conway (67) Trustee Trustee/Director, Consolidated Edison Company of New
9 Rittenhouse Road York, Inc. (1970-present), Pace University
Bronxville, NY 10708 (1978-present), Atlantic Mutual Insurance Company
(1974-present), HRE Properties (1989-present), Greater
New York Councils, Boy Scouts of America
(1985-present), Union Pacific Corp. (1978-present),
Blackrock Fund for Freddie Mac Mortgage Securities
(Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr.,
Foundation (1995-present), and The Harlem Youth
Development Foundation (1987-present), Chairman
(1987-present), Metropolitan Transportation Authority
(1992-1995). Chairman, Audit Committee of the City of
New York (1981-1996). Director/Trustee, the National
Affiliated Investment Companies (until 1993).
Director/Trustee, Phoenix Funds (1993-present).
Trustee, Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present).
Director, Accuhealth (1994-present), Trism, Inc.
(1994-present), Realty Foundation of New York
(1972-present) and Chairman New York Housing
Partnership Development Corp. (1981-present). Advisory
Director, Fund Direction (1995-present).
Harry Dalzell-Payne (67) Trustee Director/Trustee, Phoenix Funds (1983-present).
330 East 39th Street Director, Duff & Phelps Utilities Tax-Free Income Inc.
Apartment 29G (1995-present), Duff & Phelps Utility and Corporate
New York, NY 10016 Bond Trust Inc. (1995-present). Trustee, Phoenix Duff
& Phelps Institutional Mutual Funds (1996-present).
Director, Farragut Mortgage Co., Inc. (1991-1994).
Director/Trustee, the National Affiliated Investment
Companies (1983-1993). Formerly a Major General of the
British Army.
*Francis E. Jeffries (66) Trustee Director and Chairman of the Board, Phoenix Duff &
Phoenix Duff & Phelps Phelps Corporation (1995-present). Director/Trustee,
Corporation Phoenix Funds (1995-present). Trustee, Phoenix Duff &
55 East Monroe Street Phelps Institutional Mutual Funds (1996-present).
Suite 3600 Director, Duff & Phelps Utilities Income Fund
Chicago, IL 60603 (1987-present), Duff & Phelps Utilities Tax-Free
Income Inc. (1991-present), Duff & Phelps Utility and
Corporate Bond Trust Inc. (1993-present) and The
Empire District Electric Company (1984-present).
Director (1989-1995), Chairman of the Board
(1993-1995), President (1989-1993), and Chief
Executive Officer (1989-1995), Duff & Phelps Corporation.
14
<PAGE>
Leroy Keith, Jr. (57) Trustee Chairman and Chief Executive Officer, Carson Products
Chairman and Chief Company (1995-present). Director/Trustee, Phoenix
Executive Officer Funds (1980-present). Trustee, Phoenix Duff & Phelps
Carson Product Company Institutional Mutual Funds (1996-present). Director
64 Ross Road Equifax Corp. (1991-present), and Keystone
Savannah, GA 30750 International Fund, Inc. (1989-present). Trustee,
Keystone Liquid Trust, Keystone Tax Exempt Trust,
Keystone Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust. Director/Trustee,
the National Affiliated Investment Companies (until
1993). Director, Blue Cross/Blue Shield (1989-1993)
and First Union Bank of Georgia (1989-1993).
President, Morehouse College (1987-1994). Chairman and
Chief Executive Officer, Keith Ventures (1992-1995).
*Philip R. McLoughlin (50) Trustee and Director, Vice Chairman and Chief Executive Officer,
One American Row President Phoenix Duff & Phelps Corporation (1995-present).
Hartford, CT 06102 Director (1994-present) and Executive Vice President,
Investments, (1987-present) Phoenix Home Life Mutual
Insurance Company. Director/Trustee and President,
Phoenix Funds (1989-present). Trustee, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present).
Director, (1983-present) and Chairman (1995-present)
Phoenix Investment Counsel, Inc. Director (1984-
present) and President (1990-present), Phoenix Equity
Planning Corporation. Director, Phoenix Realty Group,
Inc. (1994-present), Phoenix Realty Advisors, Inc.
(1987-present), Phoenix Realty Investors, Inc.
(1994-present), Phoenix Realty Securities, Inc.
(1994-present), Phoenix Funds, Inc. (1985-present),
PXRE Corporation (Delaware) (1985-present), Phoenix Re
Corporation (Delaware) (1985-present) and World Trust
Fund (1991-present). Director/Trustee, the National
Affiliated Investment Companies (until 1993).
Director, Chairman and Chief Executive Officer,
National Securities & Research Corporation
(1993-present) and Director and President, Phoenix
Securities Group, Inc. (1993-present). Director
(1992-present) and President (1992-1994), W.S.
Griffith & Co., Inc. (1992-present) and Director
(1992-present) and President (1992-1994), Townsend
Financial Advisers, Inc. (1992-present). Director and
Vice President, PM Holdings, Inc. (1985-present).
Everett L. Morris (68) Trustee Vice President, W.H. Reaves and Company
164 Laird Road (1993-present). Director/Trustee, Phoenix Funds
Colts Neck, NJ 07722 (1995-present). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), and
Trustee, Duff & Phelps Mutual Funds (1994-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present). Duff & Phelps Utility and Corporate
Bond Trust Inc. (1993-present), and Public Service
Enterprise Group, Incorporated (1986-1993). President
and Chief Operating Officer, Enterprise Diversified
Holdings Incorporated (1989-1993). Senior Executive
Vice President and Chief Financial Officer. Public
Service Electric and Gas Company (1986-1992).
Director, First Fidelity Bank, N.A., N.J. (1984-1991).
15
<PAGE>
James M. Oates (50) Trustee Director, Phoenix Duff & Phelps Corporation
Managing Director (1995-present). Director/Trustee, Phoenix Funds
The Wydown Group (1987-present) Trustee, Phoenix Duff & Phelps
50 Congress Street Institutional Mutual Funds (1996-present). Director,
Suite 1000 Govett Worldwide Opportunity Funds, Inc. (1991-present),
Boston, MA 02109 Blue Cross and Blue Shield of New Hampshire
(1994-present). Investors Financial Service Corporation
(1995-present), Investors Bank & Trust Corporation
(1995-present) and Plymouth Rubber Co. (1995-present).
Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director and President
(1984-1994) and Chief Executive Officer (1986-1994),
Neworld Bank.
*Calvin J. Pedersen (54) Trustee Director and President, Phoenix Duff & Phelps
Phoenix Duff & Phelps Corporation (1995-present). Director/Trustee, Phoenix
Corporation Funds (1995-present). Trustee, Phoenix Duff & Phelps
55 East Monroe Street Institutional Mutual Funds (1996-present). President
Suite 3600 and Chief Executive Officer, Duff & Phelps Utilities
Chicago, IL 60603 Tax-Free Income Inc. (1995-present), Duff & Phelps
Utilities Income Fund (1995-present), and Duff &
Phelps Utility and Corporate Bond Trust Inc. (1995-
present). Trustee, Chairman and Chief Executive
Officer, Phoenix Duff & Phelps Mutual Funds (since
inception). Director (1986-1995), President
(1993-1995) and Executive Vice President (1992-1993),
Duff & Phelps Corporation.
Philip R. Reynolds (69) Trustee Director/Trustee, Phoenix Funds (1984-present) and
43 Montclair Drive Trustee, Phoenix Duff & Phelps Institutional Mutual
West Hartford, CT 06107 Funds (1996-present). Director, Vestaur Securities,
Inc. (1972-present). Trustee and Treasurer, J. Walton
Bissell Foundation, Inc. (1988-present).
Director/Trustee, the National Affiliated Investment
Companies (until 1993).
Herbert Roth, Jr. (68) Trustee Director/Trustee, Phoenix Funds (1980-present).
134 Lake Street Trustee, Phoenix Duff & Phelps Institutional Mutual
P.O. Box 909 Funds (1996-present). Director, Boston Edison Company
Sherborn, MA 01770 (1978-present), Phoenix Home Life Mutual Insurance
Company (1972-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./Sevcon, Inc.
(electronic controllers) (1987-present), Key Energy
Group (oil rig service) (1988-1993), and Mark IV
Industries (diversified manufacturer) (1985-present).
Director/Trustee, the National Affiliated Investment
Companies (until 1993).
Richard E. Segerson (50) Trustee Director/Trustee, Phoenix Funds, (1993-present).
102 Valley Road Trustee, Phoenix Duff & Phelps Institutional Mutual
New Canaan, CT 06840 Funds (1996-present). Managing Director, Mallin
Associates (1993-present). Vice President and General
Manager, Coats & Clark, Inc. (previously Tootal
American, Inc.) (1991-1993). Director/Trustee, the
National Affiliated Investment Companies (1984-1993).
Lowell P. Weicker, Jr. (65) Trustee Trustee/Director, the Phoenix Funds (1995-present).
Dresing Lierman Weicker Trustee, Phoenix Duff & Phelps Institutional Mutual
6931 Arlington Road Funds (1996-present). Chairman, Dresing, Lierman,
Suite 501 Weicker (1995-present). Director, UST Inc.
Bethesda, MD 20814 (1995-present) and HPSC Inc. (1995-present). Governor
of the State of Connecticut (1991-1995). President
and Chief Executive Officer, Research!America
(1989-1990).
16
<PAGE>
Michael E. Haylon (38) Executive Vice Executive Vice President--Investments. Phoenix Duff &
President Phelps Corporation (1995-present). Executive Vice
President. Phoenix Funds (1993-present). Director
(1994-present) and President (1995-present). Executive
Vice President (1994-1995). Vice President
(1991-1994), Phoenix Investment Counsel, Inc. Director
(1994-present), President (1996-present) Executive
Vice President (1994-1996), Vice President
(1993-1994). National Securities & Research
Corporation. Director, Phoenix Equity Planning
Corporation (1995-present). Vice President, Phoenix
Duff & Phelps Institutional Mutual Funds
(1996-present). Senior Vice President. Securities
Investments. Phoenix Home Life Mutual Insurance
Company (1993-1995). Various other positions with
Phoenix Home Life Mutual Insurance Company
(1990-1993).
David R. Pepin (52) Executive Executive Vice President, Phoenix Funds
Vice (1996-present). Executive Vice President and General
President Manager, Mutual Fund Marketing and Operations, Phoenix
Duff & Phelps Corporation (1995-present). Managing
Director, Phoenix-Aberdeen International Advisers, LLC
(1996-present). Director and Executive Vice President,
Phoenix Equity Planning Corp. (1996-present).
Director, Phoenix Investment Counsel, Inc. and
National Securities & Research Corporation (1996-
present). Various positions with Phoenix Home Life
Mutual Insurance Company (1994-1995). Vice President
and General Manager, Finance and Health, Digital
Equipment Corporation (1980-1994).
William J. Newman (57) Senior Vice Executive Vice President, Phoenix Investment Counsel,
President Inc. (1995-present). Executive Vice President
(1996-present). Senior Vice President (1995-1996)
National Securities & Research Corporation. Senior
Vice President, Phoenix Equity Planning Corporation
(1995-1996), Phoenix Strategic Equity Series Fund
(1996-present). Senior Vice President, The Pheonix
Edge Series Fund (1995-present), Phoenix
Multi-Portfolio Fund (1995-present), Phoenix Income
and Growth Fund (1996-present), Phoenix Series Fund
(1996-present). Phoenix Total Return Fund, Inc.
(1996-present) and Phoenix Worldwide Opportunities
Fund (1996-present). Vice President, Common Stock and
Chief Investment Strategist. Phoenix Home Life Mutual
Insurance Company (April 1995-November 1995). Chief
Investment Strategist, Kidder, Peabody Co., Inc.
(1993-1994). Managing Director, Equities, Bankers
Trust Company (1991-1993).
Jeanne H. Dorey (35) Vice President Managing Director, Equities, Phoenix Investment
Counsel, Inc. (1993-present) and National Securities &
Research Corporation (1993-present). Portfolio
Manager, International, Phoenix Home Life Mutual
Insurance Company (until 1995). Vice President,
Phoenix Multi-Portfolio Fund (1993-present), and
Phoenix Worldwide Opportunities Fund (1993-present).
Investment Analyst and Portfolio Manager, Pioneer
Group, Inc. (1990-1992).
17
<PAGE>
David Lui (37) Vice President Portfolio Manager, Equities, Phoenix Investment
Counsel, Inc. and National Securities & Research
Corporation (1996-present). Vice President, The
Phoenix Edge Series Fund and Phoenix Multi-Portfolio
Fund (1996-present). Associate Portfolio Manager,
International Portfolios, Phoenix Home Life Mutual
Insurance Company (1995-1996). Vice President, Asian
Equities, Alliance Capital Management (1993-1995).
Associate, Global Markets, Bankers Trust (1990-1993).
William R. Moyer (52) Vice President Senior Vice President and Chief Financial Officer,
100 Bright Meadow Blvd. Phoenix Duff & Phelps Corporation (1995-present).
P.O. Box 2200 Senior Vice President, Finance (1990-present), Chief
Enfield, CT 06083-2200 Financial Officer (1996-present) and Treasurer
(1994-1996), Phoenix Equity Planning Corporation.
Senior Vice President (1990-present), Chief Financial
Officer (1996-present) and Treasurer (1994-present)
Phoenix Investment Counsel, Inc. Senior Vice
President, Finance (1993-present), Chief Financial
Officer (1996-present), and Treasurer (1994-1996),
National Securities & Research Corporation. Vice
President, Phoenix Funds (1990-present). Senior Vice
President, Finance, PHL Mutual Funds Holdings, Inc.
(1993-present). Senior Vice President and Chief
Financial Officer, W. S. Griffith & Co., Inc.
(1992-1995) and Townsend Financial Advisers, Inc.
(1993-1995). Vice President, the National Affiliated
Investment Companies (until 1993). Vice President,
Investment Products Finance, Phoenix Home Life Mutual
Insurance Company (1990-1995).
Leonard J. Saltiel (42) Vice President Managing Director (1996-present), Senior Vice
President (1994-1996), Phoenix Equity Planning
Corporation. Vice President, Phoenix Funds
(1994-present), National Securities & Research
Corporation (1994-1996), and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-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).
Nancy G. Curtiss (43) Treasurer Vice President, Fund Accounting (1994-present) and
Treasurer (1996-present), Phoenix Equity Planning
Corporation. Treasurer, Phoenix Investment Counsel,
Inc. and National Securities & Research Corporation
(1996-present). Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Treasurer, Phoenix Funds
(1994-present) and 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 (48) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street Mutual Insurance Co. (1993-present). Vice President,
Greenfield, MA 01301 Transfer Agent Operations, Phoenix Equity Planning
Corporation (1993-present). Secretary, the Phoenix
Funds (1993-present). Clerk, Phoenix Total Return
Fund, Inc. (1994-present). Secretary, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Vice
President, Home Life of New York Insurance Company
(1984-1992).
</TABLE>
*Indicates that the Trustee is an "interested person" of the Trust within the
meaning of the definition set forth in Section 2(a)(19) of the Investment
Company Act of 1940.
18
<PAGE>
For services rendered to the Fund for the fiscal year ended June 30, 1996,
the Directors receive aggregate renumeration of $20,063. For his services on the
Boards of the Phoenix Funds and the mutual funds managed by the Adviser, each
Director who is not a full-time employee of the Adviser or any of its affiliates
currently receives a retainer at the annual rate of $36,000 and $2,000 per joint
meeting of the Boards. Each Director who serves on the Audit Committee receives
a retainer at the annual rate of $2,000 and $2,000 per joint Audit Committee
meeting attended. Each Director who serves on the Nominating Committee receives
a retainer at the annual rate of $1,000 and $1,000 per joint Nominating
Committee meeting attended. The foregoing fees do not include the reimbursement
of expenses incurred in connection with meetings attended. Officers are
compensated for their services by the Adviser and receive no compensation from
the Fund.
For the Fund's last fiscal year ending June 30, 1996, the Trustees
received the following compensation:
<TABLE>
<CAPTION>
Total
Compensation
Pension or From Fund and
Aggregate Retirement Benefits Estimated Fund Complex
Compensation Accrued as Part Annual Benefits (15 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Directors
- ------------------------ -------------- ------------------- ---------------- ------------------
<S> <C> <C> <C> <C>
C. Duane Blinn $1,885 $53,000
Robert Chesek $1,768 $49,750
E. Virgil Conway $2,123 $81,000
Harry Dalzell-Payne $1,778 $50,000
Leroy Keith, Jr. $1,698 None None $48,000
Philip R. McLoughlin $ 0 for any for any $ 0
James M. Oates $2,045 Trustee Trustee $57,000
Philip R. Reynolds $1,778 $50,000
Herbert Roth, Jr. $2,230 $62,000
Richard E. Segerson $2,045 $57,000
Lowell P. Weicker, Jr. $1,945 $54,500
Everett L. Morris $ 770 $66,000
Francis E. Jeffries $ 0 $ 0
Calvin J. Pedersen $ 0 $ 0
</TABLE>
*This compensation (and the earnings thereon) was deferred pursuant to the
Trustees' Deferred Compensation Plan.
On June 30, 1996, the Trustees and officers of the Fund beneficially owned
less than 1% of the outstanding shares of the Fund.
OTHER INFORMATION
Independent Public Accountant
Price Waterhouse LLP serves as independent accountants for the Fund (the
"Accountants"). The Accountants audit the Fund's annual financial statements
and express an opinion thereon.
Custodian and Transfer Agent
Brown Brothers Harriman & Co., having its principal place of business at 40
Water Street, Boston, Massachusetts 02109, serves as custodian of the Fund's
assets (the "Custodian"). Equity Planning acts as Transfer Agent (the "Transfer
Agent").
Report to Shareholders
The fiscal year of the Fund ends on June 30. The Fund will send financial
statements to its shareholders at least semi-annually. An annual report,
containing financial statements audited by the Fund's independent accountants,
will be sent to shareholders each year.
Financial Statements
The Financial Statements for the Fund's fiscal year ended June 30, 1996,
appearing in the Fund's 1996 Annual Report to Shareholders, are incorporated
herein by reference.
19
<PAGE>
Phoenix Worldwide Opportunities Fund
SCHEDULE OF INVESTMENTS
June 30, 1996
SHARES VALUE
------ -------------
COMMON STOCKS--87.6%
Belgium--0.6%
Barco Industries NV (Electronics) 6,000 $ 961,413
-----------
Brazil--1.3%
Telebras Sponsor ADR
(Utility--Telephone) (b) 28,600 1,991,275
-----------
Finland--0.6%
UPM-Kymmene Corp. (Paper & Forest
Products) (b) 43,200 893,588
-----------
France--4.4%
BIC SA (Entertainment, Leisure &
Gaming) (b) 12,000 1,703,963
Christian Dior SA (Conglomerates) 10,000 1,301,476
Rexel (Electrical Equipment) 5,150 1,422,552
SGS-Thomson Microelectronics ADR
(Electrical Equipment) (b) 38,700 1,388,363
SGS-Thomson Microelectronics NV
(Electrical Equipment) (b) 3,013 105,935
Usinor Sacilor (Metals-Steel) 54,000 778,846
-----------
6,701,135
-----------
Germany--5.3%
Adidas AG (Textile & Apparel) 25,500 2,142,730
Degussa AG (Conglomerates) 1,900 644,984
Hoechst (Chemicals) 46,000 1,559,424
Mannesmann AG (Conglomerates) 3,800 1,313,186
SGL Carbon AG (Chemicals) (b) 19,800 2,315,485
-----------
7,975,809
-----------
Hong Kong--4.8%
Cheung Kong Holdings Ltd. (Real
Estate) 251,000 1,807,797
Dao Heng Bank Group Ltd. (Banks) 190,000 733,932
First Pacific Co. (Conglomerates) 949,082 1,459,089
Guoco Group Ltd. (Diversified
Financial Services) 242,000 1,153,646
Henderson China Holdings Ltd.
(Real Estate) 768 1,716
Henderson Land Development Co. Ltd.
(Real Estate) 96,000 719,333
Hutchison Whampoa (Conglomerates) 36,000 226,497
New World Development (Real Estate) 251,500 1,166,443
-----------
7,268,453
-----------
Indonesia--0.9%
PT Semen Gresik (Building & Materials) 332,500 967,888
Wicaksana Overseas (Wholesale &
Distribution) 158,000 434,472
-----------
1,402,360
-----------
Italy--2.5%
Fila Holding SPA ADR (Textile &
Apparel) 9,500 $ 819,375
Gucci Group NV-NY (Textile & Apparel) 21,000 1,354,500
Mediolanum SPA (Insurance) (b) 50,000 497,407
Telecom Italia Mobile DRNC
(Utility--Telephone Cellular) 747,500 1,019,129
Telecom Italia Mobile SPA
(Utility--Telephone Cellular) 44,000 98,307
-----------
3,788,718
-----------
Japan--12.8%
Bank of Tokyo--Mitsubishi (Banks) 42,000 972,635
Circle K Japan Co. Ltd. (Retail--Food) 28,000 1,450,018
DDI Corporation (Utility--Telephone
Cellular) 200 1,743,231
Jusco Co. (Retail--Food) 49,000 1,603,827
Keyence Corp. Ltd. (Electronics) 9,000 1,222,632
Mitsubishi Estate Co. Ltd. (Real
Estate) 67,000 922,399
Mitsubishi Heavy Industries Ltd.
(Machinery) 125,000 1,086,100
Nippon Television Network (Publishing,
Broadcasting, Printing & Cable) 5,000 1,549,944
NKK Corp. (Metals & Mining) (b) 493,000 1,492,286
OSG Corp. (Machinery) 125,000 958,458
Sony Corp. (Conglomerates) 27,000 1,774,868
TDK Corporation (Electronics) 24,000 1,431,054
Toyoda Machine Works (Machinery ) 149,000 1,603,006
Toyota Motor Corp. (Autos & Trucks) 62,000 1,548,850
-----------
19,359,308
-----------
Mexico--1.5%
Grupo Televisa SA GDR (Publishing,
Broadcasting, Printing & Cable) (b) 54,700 1,682,025
Panamerican Beverages, Inc.
(Beverages) 13,500 604,125
-----------
2,286,150
-----------
Netherlands--3.6%
Ahrend Groep NV (Office & Business
Equipment) 28,347 1,270,458
Heineken NV (Beverages) 4,800 1,072,541
IHC Caland NV (Oil Service &
Equipment) 37,000 1,820,845
Oce-Van der Grinten NV-Venlo (Office &
Business Equipment) 12,000 1,271,076
-----------
5,434,920
-----------
Norway--1.2%
Smedvig (Energy) 80,000 1,853,363
-----------
Peru--0.8%
CPT B Pen (Utility--Telephone) 617,014 1,253,539
-----------
See Notes to Financial Statements
3
<PAGE>
Phoenix Worldwide Opportunities Fund
SHARES VALUE
------ -------------
Portugal--1.1%
Portugal Telecom SA
(Utility--Telephone) 65,400 $ 1,708,301
-----------
Singapore--0.9%
Far East Levingston Shipbuilding Ltd.
(Oil Service & Equipment) 242,000 1,337,395
-----------
South Korea--3.4%
Daegu Bank (Banks) 63,060 913,591
Hana Bank (Banks) 46,789 827,832
Korea First Bank (Banks) (b) 147,500 1,218,296
Korea Mobile Telecommunications
(Utility--Telephone Cellular) 1,730 1,979,156
Samsung Electronics Ltd. GDR 144A
(Electronics) (c) 167 8,517
Samsung Electronics Voting GDR 144A
(Electronics) (c) 555 28,028
Shinhan Bank (Banks) 9,610 219,170
-----------
5,194,590
-----------
Spain--0.9%
Telefonica De Espana Ord.
(Utility--Telephone) 76,000 1,398,945
-----------
Sweden--2.7%
Astra AB Series A (Health Care--Drugs) 29,000 1,280,556
Frontec AB (Computer Software &
Services) (b) 88,000 1,080,869
Svedala Industri AB (Machinery) 88,000 1,664,406
-----------
4,025,831
-----------
Switzerland--2.6%
Sandoz AG (Health Care--Drugs) 2,200 2,515,340
Swiss Reinsurance-Reg. (Insurance) (b) 1,320 1,355,225
-----------
3,870,565
-----------
Taiwan--2.1%
China Bills Finance Corp. (Commercial
Finance) 135,000 148,152
Evergreen Marine (Transportation) 128,800 259,761
Fuh Hwa Securities Finance
(Broker--Dealers) 163,000 325,774
Taiwan Semiconductor (Electronics) (b) 276,800 578,362
Ton Yi Industrial Corp. (Building &
Materials) (b) 625,000 997,035
Yang Ming Marine Transport
(Transportation) 633,000 933,890
-----------
3,242,974
-----------
Thailand--0.7%
Krung Thai Bank Public Co. Ltd.
(Banks) 121,000 566,908
Land & House Co. Ltd. (Real Estate
Development) 38,500 485,055
-----------
1,051,963
-----------
United Kingdom--9.6%
British Aerospace Ord. (Aerospace &
Defense) 109,700 $ 1,665,531
British Airways PLC (Airlines) 61,000 525,159
Carlton Communications PLC
(Publishing, Broadcasting, Printing &
Cable) 196,000 1,577,747
Compass Group PLC (Lodging &
Restaurants) 147,000 1,345,501
Granada Group PLC (Entertainment,
Leisure & Gaming) 87,000 1,165,408
Hays PLC (Professional Services) 160,000 1,126,340
Next PLC (Retail) 148,000 1,294,856
Orange PLC (Utility--Telephone
Cellular) (b) 330,000 1,156,410
Standard Chartered PLC (Diversified
Financial Services) 176,000 1,753,162
Vodafone Group PLC (Utility--Telephone
Cellular) 215,000 800,194
WPP Group (Advertising) 658,000 2,198,446
-----------
14,608,754
-----------
United States--23.3%
ACC Corporation (Utility--
Telephone) (b) 53,000 2,577,125
Bio-Rad Laboratories, Inc. (Medical
Products & Supplies) (b) 55,500 1,991,063
Capstone Pharmacy Services (Health
Care--Drugs) (b) 110,000 1,416,250
Check Point Software Technologies,
Ltd. (Computer Software & Services)
(b) 20,000 480,000
Chesapeake Energy Corp. (Energy) (b) 14,000 1,258,250
Cliffs Drilling Company (Oil Service &
Equipment) (b) 65,000 2,210,000
Digital Microwave Corp.
(Telecommunications Equipment) (b) 55,000 914,375
Donna Karan International, Inc.
(Textile & Apparel) (b) 15,000 420,000
Ensco International, Inc. (Oil Service
& Equipment) (b) 80,000 2,600,000
Falcon Drilling Company, Inc. (Oil
Service & Equipment) (b) 31,000 840,875
Gemstar International Group Limited
(Electronics) 55,900 1,677,000
Home Shopping Network (Retail) (b) 100,000 1,200,000
IntelCom Group, Inc.
(Utility--Telephone) (b) 50,000 1,250,000
Latin American Discovery Fund, Inc.
(Multi-Industry) 110,000 1,388,750
Microsoft Corp. (Computer Software &
Services) (b) 15,000 1,801,875
Newbridge Networks Corp.
(Telecommunications Equipment) (b) 17,500 1,146,250
Orion Network Systems, Inc.
(Telecommunications Equipment) (b) 100,000 1,075,000
Panamsat Corp. (Telecommunications)
(b) 80,000 2,320,000
See Notes to Financial Statements
4
<PAGE>
Phoenix Worldwide Opportunities Fund
SHARES VALUE
------ -------------
United States--(continued)
P-Com, Inc. (Telecommunications
Equipment) (b) 30,000 $ 945,000
Pride Petroleum Services, Inc.
(Oil Service & Equipment) (b) 125,000 1,781,250
Reading & Bates Corp. (Oil Service &
Equipment) (b) 34,000 752,250
RMI Titanium Co. (Metals & Mining) (b) 100,000 2,350,000
Sawtek, Inc. (Electronics) (b) 35,000 1,207,500
Teleport Communications Group, Inc.
(Utility--Telephone) (b) 35,000 669,375
Transition Systems, Inc. (Computer
Software & Services) (b) 40,000 1,140,000
-----------
35,412,188
-----------
TOTAL COMMON STOCKS
(Identified cost $116,548,900) 133,021,537
-----------
PREFERRED STOCKS--0.5%
Germany
Wella AG Preferred (Cosmetics & Soaps) 1,250 730,898
-----------
TOTAL PREFERRED STOCKS
(Identified cost $736,210) 730,898
-----------
RIGHTS--0.0%
South Korea
Hana Bank-Rights (Banks) 46,789 43,433
-----------
TOTAL RIGHTS
(Identified cost $0) 43,433
-----------
TOTAL LONG-TERM INVESTMENTS--88.1%
(Identified cost $117,285,110) 133,795,868
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
-------------- ----- -------------
SHORT-TERM OBLIGATIONS--9.9%
Commercial Paper--7.1%
GTE North 5.35%,
7-2-96 A-1+ $2,970 $ 2,969,559
Bellsouth
Telecommunications,
Inc. 5.34%, 7-10-96 A-1+ 4,200 4,194,393
Corporate
Receivables (CRC)
5.34%, 7-12-96 A-1 2,000 1,996,737
Abbott Laboratories
5.33%, 7-25-96 (d) A-1+ 1,670 1,664,066
--------
10,824,755
--------
Federal Agency Securities--2.8%
Federal National
Mortgage Assoc.
5.25%, 7-3-96 4,155 4,153,788
--------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $14,978,543) 14,978,543
-----------
TOTAL INVESTMENTS--98.0%
(Identified cost $132,263,653) 148,774,411(a)
Cash and receivables, less
liabilities--2.0% 2,986,621
-----------
NET ASSETS--100.0% $151,761,032
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $19,549,284 and gross
depreciation of $3,060,921 for federal income tax purposes. At June 30,
1996, the aggregate cost of securities for federal income tax purposes
was $132,286,048.
(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 June 30,
1996 these securities amounted to a value of $36,545 or 0.02% of net
assets.
(d) Segregated as collateral for forward currency contracts.
See Notes to Financial Statements
5
<PAGE>
Phoenix Worldwide Opportunities Fund
INDUSTRY DIVERSIFICATION
As a percentage of Total Long-Term Investments
(Unaudited)
Advertising 1.6%
Aerospace & Defense 1.2
Airlines 0.4
Autos & Trucks 1.2
Banks 4.1
Beverages 1.3
Broker--Dealers 0.2
Building & Materials 1.5
Chemicals 2.9
Commercial Finance 0.1
Computer Software & Services 3.4
Conglomerates 5.0
Cosmetics & Soaps 0.6
Diversified Financial Services 2.2
Electrical Equipment 2.2
Electronics 5.3
Energy 2.3
Entertainment, Leisure & Gaming 2.1
Health Care--Drugs 3.9
Insurance 1.4
Lodging & Restaurants 1.0
Machinery 4.0
Medical Products & Supplies 1.5
Metals & Mining 2.9
Metals--Steel 0.6
Multi-Industry 1.0
Office & Business Equipment 1.9
Oil Service & Equipment 8.5
Paper & Forest Products 0.7
Professional Services 0.8
Publishing, Broadcasting, Printing & Cable 3.6
Real Estate 3.8
Retail 1.9
Retail--Food 2.3
Telecommunications 1.7
Telecommunications Equipment 3.0
Textile & Apparel 3.5
Transportation 0.9
Utility--Telephone 8.1
Utility--Telephone Cellular 5.1
Wholesale & Distribution 0.3
----
100.0%
====
See Notes to Financial Statements
6
<PAGE>
Phoenix Worldwide Opportunities Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
Assets
Investment securities at value
(Identified cost $132,263,653) $148,774,411
Foreign currency at value
(Identified cost $1,952,073) 1,942,154
Cash 1,058
Receivables
Investment securities sold 1,109,454
Fund shares sold 2,175,757
Dividends and interest 187,363
Tax reclaim 74,978
Net unrealized appreciation on
forward currency contracts 510,817
-----------
Total assets 154,775,992
-----------
Liabilities
Payables
Investment securities purchased 2,372,434
Fund shares repurchased 171,653
Closed foreign currency contracts 84,170
Transfer agent fee 114,337
Investment advisory fee 91,937
Distribution fee 33,968
Trustees' fee 6,009
Financial agent fee 3,677
Accrued expenses 136,775
-----------
Total liabilities 3,014,960
-----------
Net Assets $151,761,032
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $125,105,128
Undistributed net investment income 85,217
Accumulated net realized gains 9,570,265
Net unrealized appreciation 17,000,422
-----------
Net Assets $151,761,032
===========
Class A
Shares of beneficial interest outstanding, $1 par
value, unlimited authorization (Net Assets
$146,052,477) 14,189,700
Net asset value per share $10.29
Offering price per share
$10.29/(1-4.75%) $10.80
Class B
Shares of beneficial interest outstanding, $1 par
value, unlimited authorization (Net Assets
$5,708,555) 563,077
Net asset value and offering price per share $10.14
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996
Investment Income
Dividends (net of $129,651 foreign withholding tax) $ 1,334,934
Interest 610,333
---------
Total investment income 1,945,267
---------
Expenses
Investment advisory fee 1,037,386
Distribution fee--Class A 335,903
Distribution fee--Class B 39,567
Financial agent fee 41,495
Transfer agent 438,735
Custodian 201,521
Registration 44,955
Professional 31,532
Printing 29,742
Trustees 21,285
Miscellaneous 14,531
---------
Total expenses 2,236,652
---------
Net investment loss (291,385)
---------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 21,371,140
Net realized gain on foreign currency transactions 1,164,870
Net change in unrealized appreciation (depreciation)
on investments 3,713,171
Net change in unrealized appreciation (depreciation)
on foreign currency and foreign currency
transactions 956,591
---------
Net gain on investments 27,205,772
---------
Net increase in net assets resulting from operations $26,914,387
=========
See Notes to Financial Statements
7
<PAGE>
Phoenix Worldwide Opportunities Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
June 30, 1996 June 30, 1995
--------------- ----------------
<S> <C> <C>
From Operations
Net investment income (loss) $ (291,385) $ 193,728
Net realized gain (loss) 22,536,010 (536,147)
Net change in unrealized appreciation (depreciation) 4,669,762 7,441,668
------------- ---------------
Increase in net assets resulting from operations 26,914,387 7,099,249
------------- ---------------
From Distributions to Shareholders
Net realized gains--Class A (7,904,822) (18,002,670)
Net realized gains--Class B (220,021) (246,667)
Distributions in excess of net realized gains--Class A -- (4,263,176)
Distributions in excess of net realized gains--Class B -- (58,340)
------------- ---------------
Decrease in net assets from distributions to shareholders (8,124,843) (22,570,853)
------------- ---------------
From Share Transactions
Class A
Proceeds from sales of shares (9,725,785 and 5,285,785
shares, respectively) 94,334,086 52,416,520
Net asset value of shares issued from reinvestment of
distributions (764,481 and 2,202,325 shares, respectively) 6,849,750 18,851,905
Cost of shares repurchased (10,285,880 and 5,169,653
shares, respectively) (99,875,851) (48,268,641)
------------- ---------------
Total 1,307,985 22,999,784
------------- ---------------
Class B
Proceeds from sales of shares (318,603 and 348,307 shares,
respectively) 3,048,479 3,376,929
Net asset value of shares issued from reinvestment of
distributions (20,140 and 25,057 shares, respectively) 178,437 213,734
Cost of shares repurchased (92,969 and 56,061 shares,
respectively) (893,724) (495,588)
------------- ---------------
Total 2,333,192 3,095,075
------------- ---------------
Increase in net assets from share transactions 3,641,177 26,094,859
------------- ---------------
Net increase in net assets 22,430,721 10,623,255
Net Assets
Beginning of period 129,330,311 118,707,056
------------- ---------------
End of period (including undistributed net investment
income and distributions in excess of net investment
income of $85,217 and ($870,783), respectively) $151,761,032 $129,330,311
============= ===============
</TABLE>
See Notes to Financial Statements
8
<PAGE>
Phoenix Worldwide Opportunities Fund
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------
Year Ended June 30,
1996 1995 1994 1993 1992
- ------------------------------------ --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.04 $10.17 $8.00 $7.18 $6.82
Income from investment operations:
Net investment income (loss) (0.02)((1)) 0.01((1)) 0.01 0.03 0.01((5))
Net realized and unrealized gain 1.87 0.56 2.19 0.79 0.36
------- ------- ------- ------- ---------
Total from investment operations 1.85 0.57 2.20 0.82 0.37
------- ------- ------- ------- ---------
Less distributions:
Dividends from net investment
income -- -- (0.03) -- (0.01)
Dividends from net realized gains (0.60) (1.37) -- -- --
In excess of net realized gains -- (0.33) -- -- --
------- ------- ------- ------- ---------
Total distributions (0.60) (1.70) (0.03) -- (0.01)
------- ------- ------- ------- ---------
Change in net asset value 1.25 (1.13) 2.17 0.82 0.36
------- ------- ------- ------- ---------
Net asset value, end of period $10.29 $9.04 $10.17 $8.00 $7.18
======= ======= ======= ======= =========
Total return (2) 21.39% 6.53% 27.46% 11.42% 5.43%
Ratios/supplemental data:
Net assets, end of period
(thousands) $146,052 $126,481 $118,707 $88,870 $63,354
Ratio to average net assets of:
Operating expenses 1.60% 1.80% 1.50% 1.88% 2.15%((5))
Net investment income (loss) (0.19)% 0.16% 0.09% 0.61% 0.16%
Portfolio turnover 245% 277% 259% 95% 51%
</TABLE>
Class B
---------------------------
From
Year Inception
Ended 7/15/94 to
6/30/96 6/30/95
----------- -------------
Net asset value, beginning of period $8.98 $10.40
Income from investment operations:
Net investment income (loss) (0.08)((1)) (0.02)((1))
Net realized and unrealized gain 1.84 0.30
--------- -----------
Total from investment operations 1.76 0.28
--------- -----------
Less distributions:
Dividends from net investment
income -- --
Dividends from net realized gains (0.60) (1.37)
In excess of net realized gains -- (0.33)
--------- -----------
Total distributions (0.60) (1.70)
--------- -----------
Change in net asset value 1.16 (1.42)
--------- -----------
Net asset value, end of period $10.14 $8.98
========= ===========
Total return (2) 20.50% 3.54%((3))
Ratios/supplemental data:
Net assets, end of period
(thousands) $5,709 $2,849
Ratio to average net assets of:
Operating expenses 2.34% 2.61%((4))
Net investment income (loss) (0.86)% (0.33)%((4))
Portfolio turnover 245% 277%
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) Not annualized
(4) Annualized
(5) Net investment income would have been the same $0.01 and the ratio of
operating expenses to average net assets would have been 2.18% for the
year ended June 30, 1992, had the subadviser not reimbursed a portion of
its management fees.
See Notes to Financial Statements
9
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Worldwide Opportunities Fund ("the Fund") 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. The Fund's investment objective is capital appreciation by investing
in equity securities of domestic and non-U.S. issuers. The Fund offers both
Class A and Class B shares. Class A shares are sold with a front-end sales
charge of up to 4.75%. Class B shares are sold with a contingent deferred
sales charge which declines from 5% to zero depending on the period of time
the shares are held. Both classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. Income and expenses of the Fund
are borne pro rata by the holders of both classes of shares, except that each
class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. 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 listed or traded on a national securities exchange or
foreign exchange are valued at the last sale price, or if there had been no
sale of the security on that day and if no active market exists, at the bid
price. Short-term investments having a remaining maturity of less than 61
days 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.
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. Realized gains and losses from
investment transactions are reported on the identified cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code"), applicable to regulated investment companies, and
to distribute substantially all of its taxable income to its shareholders. In
addition, the 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 to shareholders are recorded 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 and 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
Fund does not separate that portion of the results of operations arising from
changes in exchange rates and that portion arising from changes in the market
prices of securities.
F. Forward currency contracts:
The 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 and to manage the Fund's currency exposure.
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-
10
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Continued)
to-market daily and the change in market value is recorded by the Fund as an
unrealized gain (or loss). When the contract is closed or offset with the
same counterparty, 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 or offset.
2. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect, majority owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.75% of the average daily net assets of the
Fund for the first $1 billion.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp.
("PEPCO"), an indirect majority owned subsidiary of PHL, has advised the Fund
that it retained net selling commissions of $13,954 for Class A shares and
deferred sales charges of $7,940 for Class B shares for the year ended June
30, 1996. In addition, the Fund pays PEPCO a distribution fee at an annual
rate of 0.25% for Class A shares and 1.00% for Class B shares of the average
daily net assets of the Fund. The Distribution Plan for Class A shares
provides for fees to be paid up to a maximum on an annual basis of 0.30%; the
Distributor has voluntarily agreed to limit the fee to 0.25%. The Distributor
has advised the Fund that of the total amount expensed for the year ended
June 30, 1996, approximately $134,244 was retained by the Distributor and
$241,226 was paid to unaffiliated participants.
As Financial Agent of the Fund, PEPCO receives a fee at an annual rate of
0.03% of the average daily net assets of the Fund for bookkeeping,
administration and pricing services. PEPCO serves as the Fund's Transfer
Agent with State Street Bank and Trust Company as sub-transfer agent. For the
year ended June 30, 1996, transfer agent fees were $438,735 of which PEPCO
retained $141,495 which is net of the fees paid to State Street.
At June 30, 1996, PHL and affiliates held 158 Class A shares and 1 Class B
share of the Fund with a combined value of $1,635.
3. PURCHASE AND SALE OF SECURITIES
Portfolio purchases and sales of investments, excluding short-term
securities, for the year ended June 30, 1996, aggregated $307,768,111 and
$321,101,621, respectively. There were no purchases or sales of long-term
U.S. Government securities.
4. FORWARD CURRENCY CONTRACTS
As of June 30, 1996, the Fund had entered into the following forward
currency contracts which contractually obligate the Fund to deliver
currencies at specified dates:
<TABLE>
<CAPTION>
Net
Contracts In Unrealized
to Exchange Settlement Appreciation
Deliver For Date Value (Depreciation)
-------------------- ------------------ -------- --------- -------------
<S> <C> <C> <C> <C>
DM 9,000,000 USD 6,016,043 8/1/96 $5,922,197 $ 93,846
FF 14,600,000 USD 2,829,457 8/1/96 2,841,065 (11,608)
FL 10,000,000 USD 5,871,991 8/1/96 5,870,479 1,512
SF 4,700,000 USD 3,821,138 8/2/96 3,762,741 58,397
YEN 670,000,000 USD 6,268,126 8/1/96 6,127,016 141,110
YEN 1,018,000,000 USD 9,582,980 9/3/96 9,355,420 227,560
-------------
$510,817
=============
</TABLE>
DM = German Deutsche Mark SF = Swiss Franc
FF = French Franc YEN = Japanese Yen
FL = Dutch Florin USD = U.S. Dollar
As of June 30, 1996, the Fund had $1,664,066 in short-term securities
segregated as collateral to cover the open forward currency contracts.
5. CAPITAL LOSS CARRYOVERS
Under current tax law, capital losses realized after October 31, 1995 may be
deferred and treated as occurring on the first day of the following fiscal
year. For the year ended June 30, 1996, the Fund did not defer any losses;
however, the Fund was able to utilize losses deferred in the prior year
against current year capital gains in the amount of $4,850,059.
6. RECLASS OF CAPITAL ACCOUNTS
The Fund has recorded several reclassifications in the capital accounts.
These reclassifications have no impact on the net asset value of the Fund 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.
For the year ended June 30, 1996, the Fund has increased undistributed net
investment income by $1,247,385 and decreased accumulated net realized gains
by $1,247,385.
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended June 30, 1996, the Fund distributed long-term
capital gains dividends of $3,552,516.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Price Waterhouse LLP logo]
To the Trustees and Shareholders of
Phoenix Worldwide Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule 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 Phoenix Worldwide Opportunities Fund (the "Fund") at June 30,
1996, the results of its operations for the year then ended, the changes in
its 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 June
30, 1996 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Boston, Massachusetts
August 8, 1996
12
<PAGE>
PHOENIX WORLDWIDE OPPORTUNITIES FUND
PART C--OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A: Financial Highlights
Included in Part B: Financial Statements and Notes thereto, and Report
of Independent Accountants are included in the Annual
Report to Shareholders for the year ended June 30, 1996,
incorporated by reference
(b) Exhibits:
1.1 Declaration of Trust of the Registrant, previously filed, and herein
incorporated by reference.
1.2 Amendment to Declaration of Trust designating Classes of Shares, filed
via Edgar with Post-Effective Amendment No. 61 on October 30, 1995 and
incorporated herein by reference.
2.1 By-laws of the Registrant, previously filed, and herein incorporated by
reference.
3. Not Applicable.
4. Reference is made to Article V of Registrant's Declaration of Trust, as
amended, and filed with the Registration Statement referred to in Exhibit
1.1.
5.1 Management Agreement between Registrant and National Securities & Research
Corporation dated May 14, 1993, previously filed with Post-Effective
Amendment No. 58 on August 30, 1993, and herein incorporated by reference.
5.2 Amendment to Management Agreement between Registrant and National Securities
& Research Corporation, dated January 1, 1994, filed via Edgar with
Post-Effective Amendment No. 61 on October 30, 1995 and incorporated herein
by reference.
6.1 Underwriting Agreement between Registrant and Phoenix Equity Planning
Corporation ("Equity Planning") dated May 14, 1993, previously filed with
Post-Effective Amendment No. 58 on August 30, 1993, and herein incorporated
by reference.
6.2 Form of Underwriting Agreement for Class B Shares between Registrant and
Equity Planning, previously filed with Post-Effective Amendment No. 59 on
May 4, 1994, and incorporated herein by reference.
7. None.
8. Custody Agreement between Registrant and Brown Brothers Harriman & Co.
dated August 11, 1994, previously filed with Post-Effective Amendment No.
60 on October 26, 1994 and incorporated herein by reference.
9.1 Transfer Agency and Service Agreement between Registrant and Phoenix Equity
Planning Corporation dated June 1, 1994, previously filed with
Post-Effective Amendment No. 60 on October 26, 1994 and incorporated herein
by reference.
9.2 Form of Sales Agreement, previously filed with Post-Effective Amendment
No. 59 on May 4, 1994 and incorporated herein by reference.
10. Opinion as to legality of the shares previously filed via Edgar with Post
Effective Amendment No. 61 on October 30, 1995 and incorporated herein by
reference.
11. Consent of Independent Accountant filed herewith.
12. Not applicable.
13. None
14. None.
15.1 Distribution Plan dated May 14, 1993, previously filed with Post-Effective
Amendment No. 58 on August 30, 1993, and herein incorporated by reference.
15.2 Form of Distribution Plan for Class B Shares, previously filed with
Post-Effective Amendment No. 59 on May 4, 1994, and incorporated herein
by reference.
16. Schedule for computation of total return, previously filed with
Post-Effective Amendment No. 60 on October 26, 1994, and incorporated
herein by reference.
17. Financial Data Schedule filed herewith and reflected on EDGAR as Exhibit
27.
18.1 Rule 18f-3 Dual Distribution Plan effective November 15, 1995 filed via
Edgar herewith.
18.2 Amended and Restated Rule 18f-3 Dual Distribution Plan effective July 1,
1996 filed via Edgar herewith.
19. Powers of attorney filed herewith.
C-1
<PAGE>
Item 25. Persons Controlled by or Under Common Control With Registrant No
person is controlled by, or under common control, with the Registrant.
Item 26. Number of Holders of Securities
As of September 30, 1996, the number of record holders of each class of
securities of the Registrant was as follows:
Title of Class
Shares of Beneficial Interest--Class A
Shares of Beneficial Interest--Class B Number of Record-holders
14,740
880
Item 27. Indemnification
Registrant's indemnification provision is set forth in Post-Effective
Amendment No. 58 filed with the Securities and Exchange Commission on
June 30, 1993, and is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Adviser See
"Management of the Fund" in the Prospectus and "Services of the
Adviser" and "Trustees and Officers" of the Statement of Additional
Information which is included in this Post-Effective Amendment.
The directors and officers of National Securities & Research
Corporation (the "Adviser") and their business and other connections
are as follows:
<TABLE>
<CAPTION>
Name and Position with
National Securities &
Research Corporation Other Business, Profession, Vocation or Employment
- ------------------------------------ ----------------------------------------------------------------
<S> <C>
Michael E. Haylon Executive Vice President--Investments, Phoenix Duff & Phelps
Director and President Corporation. Executive Vice President, Phoenix Funds. Director
and President, Phoenix Investment Counsel, Inc. Director,
Phoenix Equity Planning Corporation. Vice President, Phoenix
Duff & Phelps Institutional Mutual Funds. Senior Vice
President, Securities Investments, Phoenix Home Life Mutual
Insurance Company.
Philip R. McLoughlin Director, Vice Chairman and Chief Executive Officer, Phoenix
Director and Chairman Duff & Phelps Corporation. Director and Executive Vice
President, Investments, Phoenix Home Life Mutual Insurance
Company. Director and President, Phoenix Equity Planning
Corporation. Director and Chairman, Phoenix Investment Counsel,
Inc., Trustee and President, Phoenix Duff & Phelps
Institutional Mutual Funds. Director, Phoenix Realty Group,
Inc., Phoenix Realty Advisors, Inc., Phoenix Realty Investors,
Inc., Phoenix Realty Securities, Inc., Phoenix Founders, Inc.,
and World Trust Fund; Director and Vice President, PM Holdings,
Inc. Director/Trustee/President of the Phoenix Funds; Director,
W.S. Griffith & Co., Inc.
David R. Pepin Executive Vice President and General Manager, Mutual Fund
Director Marketing and Operations, Phoenix Duff & Phelps Corporation.
Managing Director, Phoenix-Aberdeen International Advisors,
LLC. Director, Phoenix Investment Counsel, Inc. Director and
Executive Vice President, Phoenix Equity Planning Corporation.
Various positions with Phoenix Home Life Mutual Insurance
Company.
C-2
<PAGE>
William J. Newman Executive Vice President, Phoenix Investment Counsel, Inc.
Executive Vice President Senior Vice President, Phoenix Strategic Equity Series Fund,
The Phoenix Edge Series Fund, Phoenix Multi-Portfolio Fund,
Phoenix Income and Growth Fund, Phoenix Series Fund, Phoenix
Total Return Fund, Inc., Phoenix Worldwide Opportunities Fund
and Phoenix Duff & Phelps Institutional Mutual Funds. Vice
President, Common Stock and Chief Investment Strategist,
Phoenix Home Life Mutual Insurance Company.
William R. Moyer Senior Vice President and Chief Financial Officer, Phoenix
Senior Vice President, Duff & Phelps Corporation. Senior Vice President and Chief
Chief Financial Officer and Financial Officer, Phoenix Equity Planning Corporation. Senior
Treasurer Vice President, Chief Financial Officer and Treasurer, Phoenix
Investment Counsel, Inc. Vice President, the Phoenix Funds and
Phoenix Duff & Phelps Institutional Mutual Funds. Senior Vice
President, Chief Financial Officer, and Treasurer, W.S.
Griffith & Co., Inc. Vice President, Investment Products
Finance, Phoenix Home Life Mutual Life Insurance Company.
Rosemary Strekel Senior Vice President and Managing Private Director,
Senior Vice President and Placements, Phoenix Investment Counsel, Inc.
Managing Director,
Private Placements
Eugene A. Charon Vice President and Controller, Phoenix Equity Planning
Vice President and Controller Corporation and Phoenix Investment Counsel, Inc.
Thomas N. Steenburg Vice President, Counsel and Secretary, Phoenix Duff & Phelps
Vice President, Counsel and Corporation, Phoenix Investment Counsel, Inc. and Phoenix
Secretary Equity Planning Corporation. Assistant Secretary, The Phoenix
Funds and Phoenix Duff & Phelps Institutional Mutual Funds.
David L. Albrecht Managing Director, Fixed Income, Phoenix Investment Counsel,
Managing Director, Fixed Income Inc. Vice President, Phoenix Multi-Portfolio Fund, Phoenix
Multi-Sector Short Term Bond Fund, Phoenix Multi-Sector Fixed
Income Fund.
Michael K. Arends Vice President, Phoenix Series Fund and Phoenix Strategic
Managing Director Equity Series Fund. Managing Director, Phoenix Investment
Counsel, Inc. Portfolio Manager, Phoenix Home Life Mutual
Insurance Company.
Curtiss O. Barrows Vice President, Phoenix Series Fund, Phoenix Multi- Portfolio
Managing Director Fund, The Phoenix Edge Series Fund. Managing Director, Phoenix
Investment Counsel, Inc. Portfolio Manager, Public Bonds,
Phoenix Home Life Mutual Insurance Company.
Sandra L. Becker Managing Director, Private Placements, Phoenix Investment
Managing Director, Counsel, Inc. Managing Director, Venture Capital and Private
Private Placements Placements, Phoenix Home Life Mutual Insurance Company.
C-3
<PAGE>
David Byerly Managing Director, Fixed Income, Phoenix Investment Counsel,
Managing Director, Inc.
Fixed Income
Mary E. Canning Managing Director and Investment Strategies, Equities, Phoenix
Managing Director and Investment Investment Counsel, Inc. Vice President, Phoenix Series Fund,
Strategies, Equities The Phoenix Edge Series Fund, Phoenix Total Return Fund.
Paul M. Chute Managing Director, Private Placements, Phoenix Investment
Managing Director, Counsel, Inc. Managing Director, Phoenix Home Life Mutual
Private Placements Insurance Company.
Nelson Correa Managing Director, Private Placements, Phoenix Investment
Managing Director, Counsel, Inc. and Phoenix Home Life Mutual Insurance Company.
Private Placements
Jeanne H. Dorey Vice President, The Phoenix Edge Series Fund, Phoenix
Managing Director, Equities Multi-Portfolio Fund and Phoenix Worldwide Opportunities Fund.
Managing Director, Equities, Phoenix Investment Counsel, Inc.
Portfolio Manager, International, Phoenix Home Life Mutual
Insurance Company.
Christopher J. Kelleher Vice President, Phoenix Series Fund, The Phoenix Edge Series
Managing Director, Fund and Phoenix Duff & Phelps Institutional Mutual Funds.
Fixed Income Managing Director, Fixed Income, Phoenix Investment Counsel,
Inc. Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
Insurance Company.
Thomas S. Melvin, Jr. Managing Director, Equities, Phoenix Investment Counsel, Inc.
Managing Director, Equities Vice President, Phoenix Multi-Portfolio Fund, and Phoenix Duff
& Phelps Institutional Mutual Funds. Portfolio Manager, Common
Stock, Phoenix Home Life Mutual Insurance Company.
C. Edwin Riley Managing Director, Equities, Phoenix Investment Counsel, Inc.
Managing Director, Equities Vice President, Phoenix Series Fund, The Phoenix Edge Series
Fund, Phoenix Total Return Fund, Inc. Director of Equity
Management, NationsBanc.
Amy L. Robinson Managing Director, Equity Trading, Phoenix Investment Counsel,
Managing Director, Equity Trading Inc. Vice President, The Phoenix Edge Series Fund and Phoenix
Series Fund. Managing Director, Trading, Common Stocks,
Phoenix Home Life Mutual Insurance Company.
James D. Wehr Managing Director, Phoenix Investment Counsel, Inc. Vice
Managing Director President, Phoenix Series Fund, The Phoenix Edge Series Fund,
Phoenix Multi-Portfolio Fund, Phoenix California Tax-Exempt
Bonds, Inc. and Phoenix Duff & Phelps Institutional Mutual
Funds. Managing Director, Public Fixed Income, Phoenix Home
Life Mutual Insurance Company.
</TABLE>
C-4
<PAGE>
The respective principal addresses of the companies or other entities
named above are as follows:
National Securities & Research Corporation }One American Row
}Hartford, CT 06115
Phoenix Duff & Phelps Corporation }56 Prospect Street
}Hartford, CT 06115
Phoenix Duff & Phelps Institutional Mutual Funds }101 Munson Street
}Greenfield, MA 01301
Phoenix Equity Planning Corporation }100 Bright Meadow Boulevard
}P.O. Box 2200
}Enfield, CT 06083-2200
Phoenix Home Life Mutual Insurance Company }One American Row
}Hartford, CT 06115
Phoenix Investment Counsel, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Advisors, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Group, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Investors, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Securities, Inc. }One American Row
}Hartford, CT 06115
PM Holdings, Inc. }One American Row
}Hartford, CT 06115
The Phoenix Funds }101 Munson Street
}Greenfield, MA 01301
W. S. Griffith & Co., Inc. }100 Bright Meadow Boulevard
}P.O. Box 2200
}Enfield, CT 06083-2200
Item 29. Principal Underwriter
(a) See "Distribution Plans" and "How to Buy Shares" in the Prospectus and
"Distributor" and "Plans of Distribution" in the Statement of Additional
Information, both of which are included in this Post-Effective Amendment to
the Registration Statement.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
Name and Position and Offices Position and Offices
Principal Address with Underwriter with Registrant
---------------------------- ----------------------------------- ------------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Trustee and President
One American Row
Hartford, CT 06115
C-5
<PAGE>
David R. Pepin Director and Executive None
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Paul Atkins Senior Vice President and Sales None
56 Prospect Street Manager
P.O. Box 150480
Hartford, CT 06115-0480
Maris Lambergs Senior Vice President, Insurance None
100 Bright Meadow Blvd. and Independent Division
P.O. Box 2200
Enfield, CT 06083-2200
William R. Moyer Senior Vice President and Chief Vice President
100 Bright Meadow Blvd. Financial Officer
P.O. Box 2200
Enfield, CT 06083-2200
Leonard J. Saltiel Managing Director Vice President
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
John F. Sharry Managing Director, Mutual Fund None
100 Bright Meadow Blvd. Distribution
P.O. Box 2200
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
Greenfield, MA 01301
Eugene A. Charon Vice President and Controller None
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Nancy G. Curtiss Vice President and Treasurer, Fund Treasurer
56 Prospect Street Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Elizabeth R. Sadowinski Vice President, Administration Assistant Secretary
100 Bright Meadow Blvd.
Enfield, CT 06083-2200
Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
56 Prospect Street Secretary
Hartford, CT 06115
</TABLE>
(c) Equity Planning received the following commissions or other compensation
from the Registrant during the fiscal year ending June 30, 1996:
C-6
<PAGE>
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Name of Principal Discounts and Redemption and Brokerage Other
Underwriter Commissions Repurchase Commissions Compensation
----------------- ---------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Equity Planning $13,954 $7,940 $0 $41,495
</TABLE>
Item 30. 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
Registrant's investment adviser, National Securities & Research
Corporation; Registrant's financial agent, transfer agent and principal
underwriter, Phoenix Equity Planning Corporation; Registrant's dividend
disbursing agent, State Street Bank and Trust Company; and Registrant's
custodian, Brown Brothers Harriman & Co. The address of the Secretary
of the Trust is 101 Munson Street, Greenfield, Massachusetts 01301; the
address of National Securities & Research Corporation is One American
Row, Hartford, Connecticut 06115-2520; the address of Phoenix Equity
Planning Corporation is 100 Bright Meadow Boulevard, P.O. 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 for the custodian is 40 Water Street,
Boston, Massachusetts 02109.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of Registrant's latest annual report to
shareholders upon request and without charge.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, and State of
Connecticut on the 28 day of October, 1996.
PHOENIX WORLDWIDE OPPORTUNITIES FUND
ATTEST: /s/ Richard J. Wirth By: /s/ Philip R. McLoughlin
-------------------- ---------------------
Richard J. Wirth Philip R. McLoughlin
Assistant Secretary President
By: /s/ Philip R. McLoughlin
Philip R. McLoughlin
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 28 day of October, 1996.
Signature Title
- ------------------------------------ ---------------------------
- ------------------------------------
C. Duane Blinn* Trustee
- ------------------------------------
Robert Chesek* Trustee
- ------------------------------------
E. Virgil Conway* Trustee
- ------------------------------------
Nancy G. Curtiss* Treasurer (principal
financial and
accounting officer)
- ------------------------------------
Harry Dalzell-Payne* Trustee
- ------------------------------------
Francis E. Jeffries* Trustee
- ------------------------------------
Leroy Keith, Jr.* Trustee
/s/ Philip R. McLoughlin
- ------------------------------------
Philip R. McLoughlin Trustee and President
- ------------------------------------
Everett L. Morris* Trustee
- ------------------------------------
James M. Oates* Trustee
- ------------------------------------
Calvin J. Pedersen* Trustee
- ------------------------------------
Philip R. Reynolds* Trustee
- ------------------------------------
Herbert Roth, Jr.* Trustee
- ------------------------------------
Richard E. Segerson* Trustee
- ------------------------------------
Lowell P. Weicker, Jr.* Trustee
*By: /s/ Philip R. McLoughlin
- ------------------------------------
*Philip R. McLoughlin pursuant to powers of attorney filed
herewith.
S-1(c)
Exhibit 11
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. 62 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated August 8, 1996, relating to the financial
statements and financial highlights appearing in the June 30, 1996 Annual Report
to Shareholders of the Phoenix Worldwide Opportunities Fund, which is also
incorporated by reference into the Registration Statement. We also consent to
the reference to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Independent Public Accountant" in the Statement of
Additional Information.
PRICE WATERHOUSE LLP
Boston, Massachusetts
October 24, 1996
PHOENIX FUNDS
(the "Funds")
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the effective date of this Plan, the Funds shall offer multiple
classes of shares, as described herein, pursuant to Rule 18f-3 and this Plan.
2. The Multi-Class Structure
The portfolios of the Funds listed on Schedule A hereto shall offer two
classes of shares, Class A and Class B ("Multi-Class Portfolios"). Shares of the
Multi-Class Portfolios shall represent an equal pro rata interest in the
respective Portfolio and, generally, shall have identical voting, dividend,
liquidation, and other rights, preferences, powers, restrictions, limitations,
qualifications and terms and conditions, except that: (a) each class shall have
a different designation; (b) each class shall bear any Class Expenses, as
defined by Section B, below; (c) each class shall have exclusive voting rights
on any matter submitted to shareholders that relates solely to its distribution
arrangement; and (d) each class shall have separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. In addition, Class A and Class B shares shall have
the features described in Sections a, b, c and d, below.
1. Distribution Plan
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 with
respect to Class B shares for each Multi-Class Portfolio, containing
substantially the following terms:
Class B shares of each Portfolio shall reimburse Phoenix Equity
Planning Corporation (the "Distributor") for costs and expenses incurred in
connection with distribution and marketing of shares of the Fund, as provided in
the Distribution Plan and any supplements thereto, subject to an annual limit of
1.00% of the average daily net assets of a Portfolio's Class B shares.
<PAGE>
2. Allocation of Income and Expenses
1. General.
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of each
Portfolio shall be allocated to each class on the basis of its net asset value
relative to the net asset value of the Portfolio. Expenses to be so allocated
include expenses of the Fund that are not attributable to a particular Portfolio
or class of a Portfolio but are allocated to a Portfolio ("Fund Expenses") and
expenses of a particular Portfolio that are not attributable to a particular
class of that Portfolio ("Portfolio Expenses"). Fund Expenses include, but are
not limited to, Trustees' fees, insurance costs and certain legal fees.
Portfolio Expenses include, but are not limited to, certain state registration
fees, custodial fees, advisory fees and other expenses relating to the
management of the Portfolio's assets.
2. Class Expenses.
Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (a) payments pursuant to the Distribution Plan for that
class; (b) transfer agent fees attributable to a specific class, (c) printing
and postage expenses related to preparing and distributing material such as
shareholder reports, prospectuses and proxy materials to current shareholders of
the class; (d) registration fees for shares of the class (other than those set
forth in Section b.i. above); (e) the expense of administrative personnel and
services as required to support the shareholders of a specific class; (f)
litigation or other legal expenses relating solely to one class of shares; and
(g) Trustees' fees incurred as a result of issues relating to a class of shares.
Expenses described in (a) of this paragraph must be allocated to the class for
which they are incurred. All other expenses described in this paragraph may be
allocated as Class Expenses, if the Fund's President and Treasurer have
determined, subject to Board approval or ratification, which of such categories
of expenses will be treated as Class Expenses, consistent with applicable legal
principles under the 1940 Act and the Internal Revenue Code of 1986, as amended
("Code").
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense or
Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 18f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto as set forth in this Plan
shall be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees")
<PAGE>
3. Waivers or Reimbursements of Expenses
Expenses may be waived or reimbursed by the Funds' investment
adviser(s), their principal underwriters, or any other provider of services to a
Portfolio or Fund without the prior approval of the Board of Trustees.
3. Exchange Privileges
Shareholders of a Multi-Class Portfolio may exchange shares of a
particular class for shares of the same class in another Multi-Class Portfolio,
at the relative net asset values of the respective shares to be exchanged and
with no sales charge, provided the shares to be acquired in the exchange are, as
may be necessary, qualified for sale in the shareholder's state of residence and
subject to the applicable requirements, if any, as to minimum amount.
d. Conversion Feature
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each of such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that (i) the assessment
of the higher distribution fees and transfer agency costs with respect to Class
B Shares does not result in any dividends or distributions constituting
"preferential dividends" under the Internal Revenue Code of 1986, as amended,
and (ii) that the conversion of shares does not constitute a taxable event under
federal income tax law.
3. Board Review
4. Initial Approval
The Board of Trustees, including the Independent Trustees at a
meeting held on November 15, 1995, initially approved the Plan based on a
determination that the Plan, including the expense allocation, is in the best
interests of each class and Portfolio individually and of the Funds.
5. Approval of Amendments
The Plan may not be amended materially unless the Board of
Trustees, the Independent Trustees, have found that the proposed amendment,
including any proposed related expense allocation, is in the best interests of
each class and Portfolio individually and of the Fund.
<PAGE>
6. Periodic Review
The Board shall review reports of expense allocations and such
other information as they request at such times, or pursuant to such schedule,
as they may determine consistent with applicable legal requirements.
4. Contracts
Any agreement related to the Multi-Class System shall require the
parties thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
The Plan, having been reviewed and approved by the Board of Trustees
and the Independent Trustees, shall take effect as of March 15, 1996.
6. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3.b. of this
Plan.
PHOENIX FUNDS
(the "Funds")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the original effective date of this Plan, the Funds shall offer
multiple classes of shares, as described herein, pursuant to Rule 18f-3 and this
Plan.
2. The Multi-Class Structure
The portfolios of the Funds listed on Schedule A hereto shall offer two
classes of shares, Class A and Class B ("Multi-Class Portfolios"). Shares of the
Multi-Class Portfolios shall represent an equal pro rata interest in the
respective Multi-Class Portfolio and, generally, shall have identical voting,
dividend, liquidation, and other rights, preferences, powers, restrictions,
limitations, qualifications and terms and conditions, except that: (a) each
class shall have a different designation; (b) each class shall bear any Class
Expenses, as defined by Section B, below; (c) each class shall have exclusive
voting rights on any matter submitted to shareholders that relates solely to its
distribution arrangement; and (d) each class shall have separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of any other class. In addition, Class A and Class B
shares shall have the features described in Sections a, b, c and d, below.
1. Distribution Plans
The Funds have adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi-Class Portfolio, containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall reimburse
Phoenix Equity Planning Corporation (the "Distributor") for costs and expenses
incurred in connection with distribution and marketing of shares thereof, as
provided in the Class A Distribution Plan and any
<PAGE>
supplements thereto, subject to an annual limit of 0.25%, or in some cases
0.30%, of the average daily net assets of a Multi-Class Portfolio's Class A
shares.
ii. Class B shares of each Multi-Class Portfolio shall reimburse the
Distributor for costs and expenses incurred in connection with distribution and
marketing of shares thereof, as provided in the Class B Distribution Plan and
any supplements thereto, subject to an annual limit of 1.00% of the average
daily net assets of a Multi-Class Portfolio's Class B shares.
2. Allocation of Income and Expenses
1. General.
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of each
Multi-Class Portfolio shall be allocated to each class on the basis of its net
asset value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Funds that are not
attributable to a particular Multi-Class Portfolio or class of a Multi-Class
Portfolio but are allocated to a Multi-Class Portfolio ("Fund Expenses") and
expenses of a particular Multi-Class Portfolio that are not attributable to a
particular class of that Multi-Class Portfolio ("Portfolio Expenses"). Fund
Expenses include, but are not limited to, trustees' fees, insurance costs and
certain legal fees. Portfolio Expenses include, but are not limited to, certain
state registration fees, custodial fees, advisory fees and other expenses
relating to the management of the Multi-Class Portfolio's assets.
2. Class Expenses.
Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (1) transfer agency fees; (2) stationery, printing,
postage, and delivery expenses relating to preparing and distributing
shareholder reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of administrative
personnel and services to the extent related to another category of
class-specific expenses; (6) trustees' fees and expenses; (7) accounting
expenses, auditors' fees, litigation expenses, and legal fees and expenses; and
(8) expenses incurred in connection with shareholder meetings. Expenses
described in subsection (a) of this paragraph must be allocated to the class for
which they are incurred. All other expenses described in this paragraph may be
allocated as Class Expenses, if a Fund's President and Treasurer have
determined, subject to Board approval or ratification, which of such categories
of expenses will be treated as Class Expenses, consistent with applicable legal
principles under the 1940 Act and the Internal Revenue Code of 1986, as amended
("Code"). The difference between the Class Expenses allocated to each share of a
class during a year and the Class Expenses allocated to each share of any other
class during such year shall at all times be less than .50% of the average daily
net asset value of the class of shares with the smallest average net asset
value. The afore-described description of Class Expenses and any amendment
thereto shall be subject to the continuing availability of an opinion of counsel
or a ruling from the Internal Revenue Service to the effect that any such
allocation of expenses or the assessment of higher
<PAGE>
distribution fees and transfer agency costs on any class of shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense or
Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 18f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto as set forth in this Plan
shall be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees")
3. Waivers or Reimbursements of Expenses
Expenses may be waived or reimbursed by the Fund's investment
adviser(s), its principal underwriters, or any other provider of services to a
Multi-Class Portfolio without the prior approval of the Board of Trustees.
3. Exchange Privileges
Shareholders of a Multi-Class Portfolio may exchange shares of a
particular class for shares of the same class in another Multi-Class Portfolio,
at the relative net asset values of the respective shares to be exchanged and
with no sales charge, provided the shares to be acquired in the exchange are, as
may be necessary, qualified for sale in the shareholder's state of residence and
subject to the applicable requirements, if any, as to minimum amount.
d. Conversion Feature
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
4. Approval of Amended and Restated Plan
The Board of Trustees, including the Independent Trustees, at
a meeting held on August 21, 1996, approved the Amended and Restated Plan based
on a determination that the
<PAGE>
Plan, including the expense allocation, is in the best interests of each class
and Multi-Class Portfolio individually and of the Funds.
5. Approval of Amendments
The Plan may not be amended materially unless the Board of
Trustees, the Independent Trustees, have found that the proposed amendment,
including any proposed related expense allocation, is in the best interests of
each class and Multi-Class Portfolio individually and of the Funds.
6. Periodic Review
The Board shall review reports of expense allocations and such
other information as they request at such times, or pursuant to such schedule,
as they may determine consistent with applicable legal requirements.
4. Contracts
Any agreement related to the Multi-Class System shall require the
parties thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
The Amended and Restated Plan, having been reviewed and approved by the
Board of Trustees and the Independent Trustees, shall take effect as of the
first day of each Fund's current fiscal year.
6. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
<PAGE>
SCHEDULE A
PHOENIX CALIFORNIA TAX -EXEMPT BONDS, INC.
PHOENIX INCOME AND GROWTH FUND
PHOENIX MULTI-PORTFOLIO FUND:
DIVERSIFIED INCOME PORTFOLIO
EMERGING MARKETS BOND PORTFOLIO
INTERNATIONAL PORTFOLIO
MID CAP PORTFOLIO
REAL ESTATE SECURITIES PORTFOLIO
TAX-EXEMPT BOND PORTFOLIO
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES
BALANCED FUND SERIES
CONVERTIBLE FUND SERIES
GROWTH FUND SERIES
HIGH YIELD FUND SERIES
MONEY MARKET FUND SERIES
U.S. GOVERNMENT SECURITIES FUND SERIES
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND
MICRO CAP FUND
STRATEGIC THEME FUND
SMALL CAP FUND
PHOENIX TOTAL RETURN FUND, INC.
PHOENIX WORLDWIDE OPPORTUNITIES FUND
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ C. Duane Blinn
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Robert Chesek
<PAGE>
POWER OF ATTORNEY
I, the undersigned Treasurer and Principal Accounting Officer of Phoenix
Worldwide Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin
and Thomas N. Steenburg or either of them as my true and lawful attorneys and
agents with full power to sign for me in the capacity indicated below, any or
all Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Worldwide Opportunities Fund, provided that this
revocation shall not affect the exercise of such powers prior to the date
hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Nancy G. Curtiss
-----------------------------
Nancy G. Curtiss
Treasurer
Principal Financial and
Accounting Officer
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ E. Virgil Conway
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Francis E. Jeffries
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Leroy Keith, Jr.
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Everett L. Morris
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ James M. Oates
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Harry Dalzell-Payne
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Calvin J. Pederson
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Philip R. Reynolds
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Herbert Roth, Jr.
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Richard E. Segerson
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Worldwide
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Thomas N. Steenburg or either of them as my true and lawful attorneys and agents
with full power to sign for me in the capacity indicated below, any or all
Registration Statements or amendments thereto filed with the Securities and
Exchange Commission under the Securities Act of 1933 and/or the Investment
Company Act of 1940 relating to Phoenix Worldwide Opportunities Fund, and hereby
ratify and confirm my signature as it may be signed by said attorneys and
agents.
I hereby further revoke any and all powers of attorney previously given
by me with respect to said Phoenix Worldwide Opportunities Fund, provided that
this revocation shall not affect the exercise of such prior powers prior to the
date hereof.
WITNESS my hand and seal on the date set forth below.
February 21, 1996 /s/ Lowell P. Weicker, Jr.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> PHOENIX WORLDWIDE OPPORTUNITIES FUND CL A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 132264
<INVESTMENTS-AT-VALUE> 148774
<RECEIVABLES> 3548
<ASSETS-OTHER> 2454
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 154776
<PAYABLE-FOR-SECURITIES> 2372
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 643
<TOTAL-LIABILITIES> 3015
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 125105
<SHARES-COMMON-STOCK> 14190
<SHARES-COMMON-PRIOR> 13985
<ACCUMULATED-NII-CURRENT> 85
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9570
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17001
<NET-ASSETS> 151761
<DIVIDEND-INCOME> 1335
<INTEREST-INCOME> 611
<OTHER-INCOME> 0
<EXPENSES-NET> (2237)
<NET-INVESTMENT-INCOME> (291)
<REALIZED-GAINS-CURRENT> 22536
<APPREC-INCREASE-CURRENT> 4670
<NET-CHANGE-FROM-OPS> 26915
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (7905)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9726
<NUMBER-OF-SHARES-REDEEMED> (10286)
<SHARES-REINVESTED> 765
<NET-CHANGE-IN-ASSETS> (19571)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 871
<OVERDIST-NET-GAINS-PRIOR> 3594
<GROSS-ADVISORY-FEES> 1037
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2237
<AVERAGE-NET-ASSETS> 138318
<PER-SHARE-NAV-BEGIN> 9.04
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 1.87
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.6)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.29
<EXPENSE-RATIO> 1.6
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> PHOENIX WORLDWIDE OPPORTUNITIES FUND CL B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 132264
<INVESTMENTS-AT-VALUE> 148774
<RECEIVABLES> 3548
<ASSETS-OTHER> 2454
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 154776
<PAYABLE-FOR-SECURITIES> 2372
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 643
<TOTAL-LIABILITIES> 3015
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 125105
<SHARES-COMMON-STOCK> 563
<SHARES-COMMON-PRIOR> 317
<ACCUMULATED-NII-CURRENT> 85
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9570
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17001
<NET-ASSETS> 151761
<DIVIDEND-INCOME> 1335
<INTEREST-INCOME> 611
<OTHER-INCOME> 0
<EXPENSES-NET> (2237)
<NET-INVESTMENT-INCOME> (291)
<REALIZED-GAINS-CURRENT> 22536
<APPREC-INCREASE-CURRENT> 4670
<NET-CHANGE-FROM-OPS> 26915
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (220)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 319
<NUMBER-OF-SHARES-REDEEMED> (93)
<SHARES-REINVESTED> 20
<NET-CHANGE-IN-ASSETS> (2859)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 871
<OVERDIST-NET-GAINS-PRIOR> 3594
<GROSS-ADVISORY-FEES> 1037
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2237
<AVERAGE-NET-ASSETS> 138318
<PER-SHARE-NAV-BEGIN> 8.98
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> 1.84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.6)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.14
<EXPENSE-RATIO> 2.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
