PHOENIX TOTAL RETURN FUND, INC.
- -------------------------------------------------------------------------------
Investment Environment
By any measure, the financial markets' returns for 1995 were outstanding. The
combination of double-digit earnings per share growth and nearly a 200
basis-point decline in long-term interest rates proved to be a powerful
combination. Over the last twelve months, the Standard & Poor's 500 Composite
Index, a commonly used, unmanaged indicator of stock performance, returned
37.51% and the Lehman Brothers Aggregate Bond Index, an unmanaged gauge of
bond market performance, posted a total return of 18.48%.
Portfolio Review & Outlook
Phoenix Total Return Fund posted strong absolute gains over this reporting
period. For the 1995 calendar year, Class A shares returned 18.23% and Class
B shares returned 17.31%. In contrast, its peer group's average--the 145
flexible funds tracked by Lipper Analytical Services--earned 24.98%. As with
the broad market returns noted above, all of these figures assume
reinvestment of any distributions, but exclude the effect of sales charges.
Overall, the Fund's relative underperformance resulted from the portfolio's
conservative overweighting for most of the year in cash reserves. In
addition, the portfolio's focus on consumer cyclicals in lieu of technology
stocks caused the equity portion to lag the market throughout the summer and
early fall months.
In September, the bond position was increased to 40% and enhanced through
diversifying the dominate U.S. Treasury position into other fixed-income
sectors that offer greater total-return potential. In addition, the duration
of the bonds was extended to benefit from the expected strength in the bond
market. These actions proved beneficial to results during the fourth quarter.
At year end, the portfolio was positioned in anticipation of a stable bond
market and greater volatility in the stock market, as corporate earnings are
expected to show disappointments throughout 1996. As of December 31, 1995,
the portfolio's asset allocation mix was 53% stocks, 27% bonds and 20% cash
reserves.
1
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
Phoenix Total Lipper Analytical
Return Fund-- S&P 500 Services Flexible
Class A Stock Index* Fund**
12/31/85 $ 9525 $10000 $10000
12/31/86 10976 11821 11511
12/31/87 12186 12433 12346
12/31/88 12594 14485 13310
12/31/89 14913 19038 15606
12/31/90 15573 18429 15643
12/31/91 20035 24059 19554
12/31/92 22102 25909 21112
12/31/93 24421 28500 23762
12/31/94 23870 28877 23208
12/31/95 28223 39708 29005
Average Annual Total Returns for Periods Ending 12/31/95
<TABLE>
<CAPTION>
From Inception
10/24/94 to
1 Year 5 Years 10 Years 12/31/95
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge 12.61% 11.51% 10.92% --
- --------------------------------------------------------------------------------------
Class A at net asset value 18.23% 12.60% 11.46% --
- --------------------------------------------------------------------------------------
Class B with CDSC 12.31% -- -- 10.95%
- --------------------------------------------------------------------------------------
Class B at net asset value 17.31% -- -- 14.24%
- --------------------------------------------------------------------------------------
S&P 500 Stock Index* 37.51% 16.59% 14.79% 28.32%
- --------------------------------------------------------------------------------------
Lipper Analytical Services Flexible Fund** 24.98% 13.15% 11.24% 24.16%
- --------------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial gross investment of $10,000 made on 12/31/85
for Class A shares. The total return for Class A shares reflects the maximum
sales charge of 4.75% on the initial investment and assumes reinvestment of
dividends and capital gains. Class B share performance will be greater or
less than that shown based on differences in inception date, fees and sales
charges. The total return for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed
during the 1st year after purchase and 4% for all shares redeemed during the
2nd year after purchase (scaled down to 3%--3rd year; 2%--4th and 5th year
and 0% thereafter). Returns indicate past performance, which is not
predictive of future performance. Investment return and net asset value will
fluctuate, so that your shares, when redeemed, may be worth more or less than
the original cost.
*The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P 500's performance does not reflect
sales charges.
**The Lipper Analytical Services Flexible Fund category is an average
composed of 145 funds; the 5 and 10 year returns are derived from compounding
the yearly returns. Performance is based on the reinvestment of all
distributions and does not reflect the effects of sales charges.
2
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
INVESTMENTS AT DECEMBER 31, 1995
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ----- -----------
U.S. GOVERNMENT SECURITIES--12.3%
U.S. Treasury Notes--9.4%
U.S. Treasury Notes 7.25%, '96 AAA $ 8,400 $ 8,546,244
U.S. Treasury Notes 7.375%, '97 AAA 8,400 8,714,664
U.S. Treasury Notes 7.50%, '97 AAA 17,000 17,404,600
---------
34,665,508
---------
Agency Mortgage-Backed Securities --2.9%
GNMA 6.50%, '23-'24 AAA 10,825 10,747,498
---------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $44,328,883) 45,413,006
---------
SHARES
------
COMMON STOCKS--49.4%
Advertising--2.3%
Interpublic Group Co., Inc. 87,600 3,799,650
Omnicom Group, Inc. 130,000 4,842,500
---------
8,642,150
---------
Aerospace & Defense--3.0%
Boeing Company 85,000 6,661,875
United Technologies Corp. 48,000 4,554,000
---------
11,215,875
---------
Airlines--0.6%
Delta Airlines, Inc. 30,000 2,216,250
---------
Banks--3.6%
Bank America Corp. 25,000 1,618,750
Bank of Boston Corp. 40,000 1,850,000
Bankers Trust New York Corp. 50,000 3,325,000
Barnett Banks, Inc. 30,000 1,770,000
Chase Manhattan Corp. 25,000 1,515,625
Citicorp 50,000 3,362,500
---------
13,441,875
---------
Chemical--1.9%
IMC Global, Inc. 50,000 2,043,750
Monsanto Co. 40,000 4,900,000
---------
6,943,750
---------
Computer Software & Services--3.3%
First Data Corp. 72,800 4,868,500
Informix Corp. (b) 115,000 3,450,000
Oracle Systems Corp. (b) 92,500 3,919,688
---------
12,238,188
---------
Cosmetics & Soaps--0.1%
Colgate Palmolive Co. 5,000 351,250
---------
Diversified Financial Services--2.3%
Donaldson Lufkin & Jenrette, Inc. 22,000 687,500
Morgan Stanley Group, Inc. 29,000 2,338,125
Paine Webber Group, Inc. 100,000 2,000,000
Travelers Group, Inc. 55,000 3,458,125
---------
8,483,750
---------
SHARES VALUE
------ -----------
Electrical Equipment--3.0%
Emerson Electric Co. 48,000 $ 3,924,000
General Electric Co. 50,000 3,600,000
Honeywell, Inc. 75,000 3,646,875
---------
11,170,875
---------
Electronics--1.9%
Altera Corp. (b) 30,000 1,492,500
Applied Materials, Inc. (b) 10,000 393,750
Integrated Device Technology, Inc. (b) 130,000 1,673,750
LSI Logic Corp. (b) 40,000 1,310,000
Oak Technology, Inc. (b) 20,000 845,000
S3, Inc. (b) 30,000 528,750
Texas Instruments, Inc. 15,000 776,250
---------
7,020,000
---------
Engineering & Construction--1.2%
Fluor Corp. 65,000 4,290,000
---------
Entertainment, Leisure & Gaming--1.8%
Gaylord Entertainment Co. 97,250 2,698,687
Walt Disney Co. 65,000 3,835,000
---------
6,533,687
---------
Food--0.5%
Nabisco Holdings Corp. 60,000 1,957,500
---------
Healthcare--Diversified--0.8%
American Home Products Corp. 29,000 2,813,000
---------
Healthcare--Drugs--4.6%
Amgen, Inc. (b) 60,000 3,562,500
Ergo Science Corp. (b) 35,000 498,750
Genzyme Corp. (b) 25,000 1,559,375
Merck & Co., Inc. 75,000 4,931,250
Schering-Plough Corp. 70,000 3,832,500
Watson Pharmaceuticals, Inc. (b) 50,000 2,450,000
---------
16,834,375
---------
Hospital Management & Services--0.5%
Manor Care, Inc. 50,000 1,750,000
---------
Insurance--2.3%
Allstate Corp. 101,000 4,153,625
American International Group, Inc. 20,000 1,850,000
Cigna Corp. 25,000 2,581,250
---------
8,584,875
---------
Medical Products & Supplies--1.9%
Cordis Corp. (b) 5,000 502,500
Empi, Inc. (b) 50,000 1,275,000
Johnson & Johnson 20,000 1,712,500
Medtronic, Inc. 60,000 3,352,500
---------
6,842,500
---------
Natural Gas--1.1%
Anadarko Petroleum Corp. 75,000 4,059,375
---------
See Notes to Financial Statements
3
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
SHARES VALUE
------ -----------
Office & Business Equipment--2.3%
Digital Equipment Corp. (b) 80,000 $ 5,130,000
Hewlett Packard Co. 24,000 2,010,000
Silicon Graphics, Inc. (b) 48,000 1,320,000
---------
8,460,000
---------
Oil--1.2%
Mobil Corp. 40,000 4,480,000
---------
Oil Service & Equipment--3.1%
Halliburton Co. 85,000 4,303,125
Schlumberger Ltd. 60,000 4,155,000
Tidewater, Inc. 100,000 3,150,000
---------
11,608,125
---------
Publishing, Broadcasting, Printing & Cable--0.7%
Evergreen Media Corp. (b) 20,000 640,000
Lin Television Corp. (b) 70,000 2,082,500
---------
2,722,500
---------
Retail--0.3%
OfficeMax, Inc. (b) 40,000 895,000
---------
Telecommunications Equipment--2.4%
3Com Corp. (b) 32,000 1,492,000
Ascend Communications, Inc. (b) 12,000 973,500
Bay Networks, Inc. (b) 40,000 1,645,000
Cisco Systems, Inc. (b) 60,000 4,477,500
Gandalf Technologies, Inc. (b) 15,000 255,000
---------
8,843,000
---------
Tobacco--1.0%
Philip Morris Companies, Inc. 42,000 3,801,000
---------
Utility--Telephone--1.7%
AT&T Corp. 30,000 1,942,500
Bellsouth Corp. 100,000 4,350,000
---------
6,292,500
---------
TOTAL COMMON STOCKS
(Identified cost $162,334,695) 182,491,400
---------
FOREIGN COMMON STOCKS--3.8%
Chemical--1.9%
Potash Corp. of Saskatchewan, Inc. (Canada) 98,000 6,945,750
---------
Oil--0.8%
British Petroleum PLC ADR (United Kingdom) 30,000 3,063,750
---------
Telecommunications Equipment--1.1%
Ericsson L.M. Telephone Co. Class B ADR (Sweden) 209,000 4,075,500
---------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $11,647,518) 14,085,000
---------
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ------ -----------
<S> <C> <C> <C>
MUNICIPAL BONDS--5.1%
California--2.0%
Kern County Pension Obligation 7.26%, '14 AAA $1,700 $ 1,777,435
Long Beach Pension Obligation 6.87%, '06 AAA 950 977,921
Los Angeles County Series B Rev. 5.25%, '23 AAA 250 243,645
N. California Power Agency Rev. Ser. A 5.50%, '24 AAA 1,715 1,716,612
San Bernardino County Obligation Revenue 6.87%, '08 AAA 455 468,140
San Bernardino County Obligation Revenue 6.94%, '09 AAA 1,240 1,279,854
Ventura County Pension 6.54%, '05 AAA 1,100 1,111,418
-----------
7,575,025
-----------
Florida--1.6%
Florida Board of Education Series E 5.25%, '23 AA 1,870 1,825,326
Florida State Turnpike Authority Sinker 5%, '19 AAA 150 144,595
Miami Beach Spec. Obligation Taxable 8.60%, '21 AAA 3,600 4,084,308
-----------
6,054,229
-----------
Georgia--0.1%
De Kalb County Water & Sewer Sinker 5.25%, '23 AA 215 211,354
-----------
Massachusetts--0.1%
Massachusetts Bay Transit Authority Series B 5.375%, '25 AAA 250 245,197
-----------
Michigan--0.1%
Michigan Public Power Agency Sinker 5.25%, '18 AAA 250 245,523
-----------
New York--0.2%
New York State Power Rev. Series CC 5.25%, '18 AA- 860 843,514
-----------
South Carolina--0.5%
South Carolina Public Service Rev. C 5.125%, '21 A+ 685 641,523
South Carolina Public Service
Series C 5%, '25 AAA 1,425 1,352,168
-----------
1,993,691
-----------
Utah--0.4%
Intermountain Power Series A 5%, '23 AA- 1,685 1,570,942
-----------
Washington--0.0%
Seattle Drain & Wastewater Sinker 5.25%, '25 AAA 150 145,617
-----------
Other Territories--0.1%
Puerto Rico Commonwealth Sinker 5.375%, '22 AAA 175 174,438
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $18,298,466) 19,059,530
-----------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ------ -------------
NON-CONVERTIBLE BONDS--5.8%
Non-Agency Mortgage-Backed Securities--5.8%
CS First Boston Mtg. 95-AE1, B
7.182%, '27 AA- $1,775 $ 1,793,304
DLJ Mtg. 95-T10, A 144A 6.955%, '23
(e) Aa((d)) 6,000 5,868,750
Lehman Commercial Conduit 95-C2, B
7.18%, '05 (c) AA 1,850 1,932,094
Merrill Lynch Mortgage, Inc. 95-C2,
B 7.53%, '21 (c) Aa((d)) 994 1,024,878
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa((d)) 1,750 1,828,102
Resolution Trust Corp. 95-C2, B
6.80%, '27 Aaa((d)) 1,035 1,032,516
Resolution Trust Corp. 95-C1, A5
6.0205%, '27 (c) Aaa((d)) 2,045 2,035,722
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa((d)) 2,125 2,143,594
Resolution Trust Corp. 95-2, M1
7.15%, '29 Aa((d)) 1,793 1,806,594
SASC 1995-C4, B 7%, '26 AA 1,850 1,877,750
-------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $21,048,621) 21,343,304
-------------
FOREIGN NON-CONVERTIBLE BONDS--4.1%
Colombia--2.0%
Financiera Energ. Nacional EMTN
144A 9%, '99 (e) BBB- 3,600 3,775,500
Republic of Colombia Yankee 7.25%,
'04 BBB- 3,900 3,744,000
-------------
7,519,500
-------------
Poland--2.1%
Poland Global Reg. Par Euro 2.75%,
'24 (c) Baa((d)) 8,300 3,911,375
Poland PDI B 3.75%, '14 (c) Baa((d)) 5,800 3,755,500
-------------
7,666,875
-------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $14,806,675) 15,186,375
-------------
TOTAL LONG-TERM INVESTMENTS--80.5%
(Identified cost $272,464,858) 297,578,615
-------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ------ -------------
SHORT-TERM OBLIGATIONS--18.9%
Commercial Paper--14.0%
GTE North, Inc. 5.71%, 1-8-96 A-1+ $5,000 $ 4,994,449
Amoco Corp. 5.75%, 1-10-96 A-1+ 5,000 4,992,812
BellSouth Capital Funding Corp.
5.95%, 1-12-96 A-1+ 3,055 3,049,446
General Electric Capital Corp.
5.76%, 1-12-96 A-1+ 2,860 2,860,000
Pfizer, Inc. 5.70%, 1-12-96 A-1+ 3,500 3,493,904
General Electric Capital Corp.
5.75%, 1-18-96 A-1+ 6,304 6,304,000
Gannett, Inc. 5.75%, 1-19-96 A-1 3,695 3,684,377
TDK USA Corp. 5.65%, 1-22-96 A-1+ 3,640 3,628,003
Shell Oil Co. 5.60%, 1-24-96 A-1+ 4,365 4,349,383
Gannett, Inc. 5.80%, 1-25-96 A-1 3,200 3,187,627
Wisconsin Electric Power Co. 5.80%,
1-30-96 A-1+ 2,440 2,428,600
H.J. Heinz Co. 5.72%, 2-2-96 A-1 3,240 3,223,526
Ameritech Capital Funding Corp.
5.65%, 2-16-96 A-1+ 2,500 2,481,046
Warner-Lambert Co. 5.42%, 5-20-96 A-1+ 3,000 2,935,410
-------------
51,612,583
-------------
Federal Agency Securities--2.0%
Federal Home Loan Banks
6.10%, 1-2-96 4,545 4,544,230
Federal Farm Credit Bank
5.61%, 1-18-96 3,000 2,991,475
-------------
7,535,705
-------------
Federal Agency Securities--Variable--2.9% (c)
Federal National Mortgage
Assn. 5.15%, 2-16-96 2,000 2,000,000
Student Loan Marketing Assn.
5.25%, 1-11-96 8,500 8,500,000
-------------
10,500,000
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $69,651,127) 69,648,288
-------------
TOTAL INVESTMENTS--99.4%
(Identified cost $342,115,985) 367,226,903(a)
Cash and receivables, less liabilities--0.6% 2,344,614
-------------
NET ASSETS--100.0% $369,571,517
=============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $29,991,683 and gross
depreciation of $4,880,765 for income tax purposes. At December 31, 1995,
the aggregate cost of securities for federal income tax purposes was
$342,115,985.
(b) Non-income producing.
(c) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(d) Moody's rating.
(e) 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 December 31,
1995, these securities amounted to a value of $9,644,250 or 2.61% of net
assets.
ADR--American Depository Receipt
See Notes to Financial Statements
5
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
Assets
Investment securities at value
(Identified cost $342,115,985) $367,226,903
Cash 15,869
Receivables
Investment securities sold 1,647,125
Fund shares sold 127,422
Dividends and interest 1,978,877
-----------
Total assets 370,996,196
-----------
Liabilities
Payables
Investment securities purchased 830,125
Fund shares repurchased 116,482
Investment advisory fee 203,941
Transfer agent fee 123,276
Distribution fee 42,209
Financial agent fee 9,412
Directors fee 3,135
Accrued expenses 96,099
-----------
Total liabilities 1,424,679
-----------
Net Assets $369,571,517
===========
Net Assets Consist of:
Capital paid in on shares of common stock $342,581,785
Accumulated net realized gain 1,878,814
Net unrealized appreciation 25,110,918
-----------
Net Assets $369,571,517
===========
Class A
Shares of common stock, $1 par value,
50,000,000 shares authorized,
(Net Assets $361,525,611) 22,628,531
Net asset value per share $15.98
Offering price per share
$15.98/(1-4.75%) $16.78
Class B
Shares of common stock, $1 par value,
50,000,000 shares authorized,
(Net Assets $8,045,906) 506,242
Net asset value and offering price per
share $15.89
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
Investment income
Dividends $ 2,844,743
Interest 11,328,991
---------
Total investment income 14,173,734
---------
Expenses
Investment advisory fee 2,371,629
Distribution fee--Class A 899,895
Distribution fee--Class B 49,080
Financial agent fee 109,460
Transfer agent 709,373
Printing 123,679
Custodian 78,289
Professional 67,063
Registration 14,937
Directors 14,274
Miscellaneous 24,424
---------
Total expenses 4,462,103
---------
Net investment income 9,711,631
---------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 30,662,489
Net realized loss on foreign currency
transactions (5,102)
Net unrealized appreciation on investments 20,305,509
---------
Net gain on investments 50,962,896
---------
Net increase in net assets resulting from
operations $60,674,527
=========
See Notes to Financial Statements
6
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
December 31, 1995 December 31, 1994
------------- ---------------
<S> <C> <C>
From Operations
Net investment income $ 9,711,631 $ 7,628,600
Net realized gain (loss) 30,657,387 (6,819,841)
Net unrealized appreciation (depreciation) 20,305,509 (9,156,278)
----------- -------------
Increase (decrease) in net assets resulting from
operations 60,674,527 (8,347,519)
----------- -------------
From Distributions to Shareholders
Net investment income--Class A (11,137,166) (6,940,527)
Net investment income--Class B (157,249) (11,271)
Net realized gains--Class A (21,046,512) (22,463)
Net realized gains--Class B (460,526) --
----------- -------------
Decrease in net assets from distributions to
shareholders (32,801,453) (6,974,261)
----------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (2,327,216 and
2,828,232 shares, respectively) 36,428,108 43,064,141
Net asset value of shares issued from reinvestment
of distributions (1,767,069 and 379,765 shares,
respectively) 27,891,041 5,644,131
Cost of shares repurchased (4,076,035 and 4,522,562
shares, respectively) (65,751,129) (68,660,072)
----------- -------------
Total (1,431,980) (19,951,800)
----------- -------------
Class B
Proceeds from sales of shares (418,716 and 89,097
shares, respectively) 6,684,860 1,328,138
Net asset value of shares issued from reinvestment
of distributions (34,447 and 717 shares,
respectively) 539,518 10,580
Cost of shares repurchased (36,705 and 30 shares,
respectively) (599,012) (446)
----------- -------------
Total 6,625,366 1,338,272
----------- -------------
Increase (decrease) in net assets from share
transactions 5,193,386 (18,613,528)
----------- -------------
Net increase (decrease) in net assets 33,066,460 (33,935,308)
Net Assets
Beginning of period 336,505,057 370,440,365
----------- -------------
End of period (including undistributed net
investment income of $0 and $1,495,064,
respectively) $369,571,517 $336,505,057
=========== =============
</TABLE>
See Notes to Financial Statements
7
<PAGE>
Phoenix Total Return Fund, Inc.
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------------- -----------------------------
Year
Year Ended December 31, Ended From Inception
December 31, 10/24/94 to
1995 1994 1993 1992 1991 1995 12/31/94
------- ------- ------- ------ ------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $14.82 $15.48 $14.89 $15.22 $13.43 $14.79 $14.98
Income from investment
operations
Net investment income 0.45 0.34 0.06((2)) 0.24 0.36 0.30((2)) 0.07
Net realized and
unrealized gain (loss) 2.22 (0.69) 1.49 1.32 3.45 2.22 (0.09)
----- ----- ----- ---- ---- --------- ------------
Total from investment
operations 2.67 (0.35) 1.55 1.56 3.81 2.52 (0.02)
----- ----- ----- ---- ---- --------- ------------
Less distributions
Dividends from net
investment income (0.52) (0.31) (0.11) (0.25) (0.37) (0.43) (0.17)
Dividends from net
realized gains (0.99) (0.001) (0.85) (1.64) (1.65) (0.99) --
----- ----- ----- ---- ---- --------- ------------
Total distributions (1.51) (0.311) (0.96) (1.89) (2.02) (1.42) (0.17)
----- ----- ----- ---- ---- --------- ------------
Change in net asset value 1.16 (0.66) 0.59 (0.33) 1.79 1.10 (0.19)
----- ----- ----- ---- ---- --------- ------------
Net asset value, end of
period $15.98 $14.82 $15.48 $14.89 $15.22 $15.89 $14.79
===== ===== ===== ==== ==== ========= ============
Total return( (1)) 18.23% -2.26% 10.49% 10.32% 28.62% 17.31% -0.12%((4))
Ratios/supplemental data:
Net assets, end of period
(thousands) $361,526 $335,177 $370,440 $58,006 $35,209 $8,046 $1,328
Ratio to average net
assets of:
Operating expenses 1.21% 1.24% 1.29% 1.36% 1.58% 1.97% 2.26%((3))
Net investment income 2.67% 2.18% 1.26% 2.06% 2.51% 1.88% 1.74%((3))
Portfolio turnover 184% 225% 246% 322% 249% 184% 225%
</TABLE>
((1)) Maximum sales load is not reflected in total return calculation.
((2)) Computed using average shares outstanding.
((3)) Annualized
((4)) Not annualized
See Notes to Financial Statements
8
<PAGE>
PHOENIX TOTAL RETURN FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Total Return Fund, Inc. ("the Fund") 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 to achieve the
highest total return consistent with reasonable risk by investing in stocks,
bonds and money market instruments. 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 are
valued at the last sale price or, if there has been no recent sale, at the last
bid price. Securities traded in the over-the-counter market are valued at the
last bid price. Debt securities (other than short-term obligations) are valued
on the basis of broker quotations or valuations provided by a pricing service
when such prices are believed to reflect the fair value of such securities.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices and take into account appropriate factors such as
institution-size trading in similar groups of securities, yield, quality, coupon
rate, maturity, type of issue, trading characteristics and other market data.
Use of pricing services has been approved by the Directors. Short-term
investments having a remaining maturity of less than 60 days are valued at
amortized cost which approximates market. All other securities and assets are
valued at fair value as determined in good faith by or under the direction of
the Directors.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign
securities, as soon as the Fund is notified. Interest income is recorded on
the accrual basis. The Fund does not amortize premiums but does amortize
discounts using the effective interest method. Realized gains or losses are
determined 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 the
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, 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 date of settlement. 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.
9
<PAGE>
PHOENIX TOTAL RETURN FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 (Continued)
F. Security lending:
The Fund loans securities to qualified brokers through an agreement with
State Street Bank and Trust Company (State Street). Under the terms of the
agreement, the Fund receives collateral with a market value not less than
100% of the market value of loaned securities. Collateral consists of cash,
securities issued or guaranteed by the U.S. Government or its agencies and
the sovereign debt of foreign countries. Interest earned on the collateral
and premiums paid by the borrower are recorded as interest income by the Fund
net of fees charged by State Street for its services in connection with this
securities lending program. Lending portfolio securities involves a risk of
delay in the recovery of the loaned securities or in the foreclosure on
collateral. At December 31, 1995, the Fund had loaned securities with a
market value of $540,039 and received collateral of $549,795.
NOTE 2. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
Phoenix Investment Counsel, Inc., an indirect, less than wholly-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.65% 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, less than wholly-owned subsidiary of PHL, has advised
the Fund that it retained net selling commissions of $51,647 for Class A
shares and deferred sales charges of $7,844 for Class B shares for the year
ended December 31, 1995. 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 Distributor has advised the
Fund that of the total amount expensed for the year ended December 31, 1995,
$235,553 was retained by the Distributor and $713,422 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 as sub-transfer agent. For the year ended December
31, 1995, transfer agent fees were $709,373 of which PEPCO retained $260,134
which is net of the fees paid to State Street.
At December 31, 1995, PHL and affiliates held 44 Class A shares and 7,440
Class B shares of the Fund with a combined value of $118,992.
NOTE 3. PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1995, purchases and sales of investments,
excluding short-term securities and U.S. Government securities, amounted to
$459,515,500 and $373,585,918, respectively. Purchases and sales of long-term
U.S. Government securities amounted to $79,342,613 and $105,210,948,
respectively.
NOTE 4. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, 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. During the year ended
December 31, 1995 the Fund reduced capital paid in on shares of common stock
by $15,267, increased undistributed net investment income by $87,720 and
decreased accumulated net realized gains by $72,453.
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Price Waterhouse LLP logo]
To the Board of Directors and Shareholders of
Phoenix Total Return Fund, Inc.
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 Total Return Fund, Inc. (the "Fund") at December 31,
1995, the results of its operations, the changes in its net assets 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
December 31, 1995 by correspondence with the custodian and brokers, (and the
application of alternative auditing procedures where confirmations from
brokers were not received), provide a reasonable basis for the opinion
expressed above.
/s/Price Waterhouse LLP
Boston, Massachusetts
February 12, 1996
11
<PAGE>
RESULTS OF SHAREHOLDER MEETING (Unaudited)
A special meeting in lieu of the Annual Meeting of shareholders of the
Phoenix Total Return Fund was held on July 27, 1995 to approve the following
matters:
1. Fix the number of directors at eleven and elect such number as detailed
below.
2. Ratify selection of Price Waterhouse LLP, independent accountants, as
auditors for the fiscal year ending December 31, 1995.
Subsequently, and in accordance with the provision in the Fund's By-laws, the
Directors voted to increase the number of Directors to fourteen and to
appoint three additional Directors to fill the vacancies caused by the
increase.
On the record date for this meeting, there were 22,735,209 shares outstanding
and 54.45% of the shares outstanding and entitled to vote were present by
proxy.
Number of votes: For Against Abstain
--------- ------ --------
1. Election of Directors
C. Duane Blinn 11,934,083 0 445,030
Robert Chesek 11,942,660 0 436,454
E. Virgil Conway 11,929,268 0 449,846
Harry Dalzell-Payne 11,935,194 0 443,920
Leroy Keith, Jr. 11,942,666 0 436,447
Philip R. McLoughlin 11,945,852 0 433,261
James M. Oates 11,947,774 0 431,340
Philip R. Reynolds 11,939,385 0 439,728
Herbert Roth, Jr. 11,937,476 0 441,637
Richard E. Segerson 11,948,592 0 430,522
Lowell P. Weicker, Jr. 11,851,328 0 527,786
2. Price Waterhouse LLP 11,790,387 107,711 481,015
12
<PAGE>
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<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
PHOENIX TOTAL RETURN FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
Directors
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael E. Haylon, Executive Vice President
William J. Newman, Senior Vice President
James M. Dolan, Vice President
William R. Moyer, Vice President
C. Edwin Riley, Jr., Vice President
Leonard J. Saltiel, Vice President
Philip Stekl, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary and Clerk
Investment Adviser
Phoenix Investment Counsel, Inc.
56 Prospect St.
Hartford, CT 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Attention: Phoenix Funds
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Legal Counsel
Sullivan & Worcester
One Post Office Square
Boston, MA 02109
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
This report is not authorized for distribution to prospective investors in
the Phoenix Total Return Fund, Inc. unless preceded or accompanied by an
effective prospectus which includes information concerning the sales charge,
the Fund's record and other pertinent information.
<PAGE>
Phoenix Funds
Phoenix Total Return
Fund, Inc.
Annual Report
December 31, 1995
[photo of old money]
[Phoenix Duff & Phelps logo]
Phoenix Total Return Fund, Inc.
P.O. Box 2200
Enfield, CT 06083-2200
[Phoenix Duff & Phelps logo]
PDP 454 (2/96)
Bulk Rate Mail
U.S. Postage
PAID
Springfield, MA
Permit No. 444
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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