<PAGE>
JUNE 30, 1998
- -------------------------------------------------------------------------------
PHOENIX
FUNDS
- -------------------------------------------------------------------------------
SEMIANNUAL REPORT
PHOENIX STRATEGIC
ALLOCATION FUND, INC.
[LOGO]PHOENIX
INVESTMENT PARTNERS
<PAGE>
Mutual Funds are not insured by the FDIC; are
not deposits or other obligations of a bank and
are not guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
<PAGE>
PRESIDENT'S MESSAGE
- ------------------------------------------------------
Dear Strategic Allocation Fund Shareholder:
At Phoenix Investment Partners (formerly Phoenix Duff & Phelps), we are
creating a new kind of investment company, one that strengthens and supports the
independent, distinct investment processes of each of our partners.
Over the past year, we have added some of the industry's most experienced and
talented money management teams to provide you with a wider array of high
quality investment products. Through Phoenix Investment Partners, you have
access to seven distinct, independent money managers across the U.S. and around
the world:
<TABLE>
<CAPTION>
OUR PARTNERS THEIR DISTINCTIVE STYLES THEIR LOCATIONS
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Aberdeen Fund Managers, Inc. International equity Scotland,
Singapore,
London, and
Ft. Lauderdale, FL
Duff & Phelps Investment Management Core equity Chicago, IL and
Co. Cleveland, OH
Phoenix Investment Counsel, Inc. Classic value Sarasota, FL
Quantitative value Scotts Valley, CA
Large-cap growth equity Hartford, CT
Multi-sector fixed income Hartford, CT
Roger Engemann & Associates, Inc. Classic growth equity Pasadena, CA
Seneca Capital Management LLC Earnings-driven growth San Francisco, CA
equity
Value-driven fixed income
</TABLE>
Experience has shown that investment professionals perform best when they
remain focused, disciplined, and distanced from activities that distract them
from managing your investments. At Phoenix Investment Partners, we have enabled
our money managers to do just that--manage your money.
To learn more about our partners and their distinctive investment styles,
contact your financial advisor or call the Phoenix Investment Partners National
Sales Desk at 1-800-243-4361.
Sincerely,
[LOGO]
For more information on the other Phoenix mutual funds, including charges and
expenses, please obtain a current prospectus from your financial advisor or call
the Phoenix Investment Partners National Sales Desk at 1-800-243-4361. Please
read it carefully before you invest or send money.
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ---------------------------------------------------------
INVESTOR PROFILE
Phoenix Strategic Allocation Fund is appropriate for investors seeking capital
appreciation with less volatility than an all-equity fund.
INVESTMENT ADVISER'S REVIEW
For the six-month reporting cycle ended June 30, 1998, Class A shares returned
9.97% and Class B shares earned 9.62%. During the same period, the average
return of a peer group of 211 flexible portfolio funds was 10.13% according to
Lipper Analytical Services, Inc. The return for the S&P 500 Index was 17.75%.*
All performance figures assume reinvestment of dividends and exclude the effect
of sales charges.
The U.S. stock market continued to reward equity investors handsomely over the
last six months, with the S&P 500 Index posting another double-digit gain.
Technology, health-care, and consumer cyclical stocks led the market during this
latest reporting period, while the energy and transportation sectors brought up
the rear. The divergence between large- and small-cap performance continued to
widen as investors craved the earnings stability and liquidity of blue-chip
companies. As measured by the Russell 2000 Index,** small-company stocks
returned a relatively disappointing 4.9% over this semiannual reporting cycle.
Aided by a strong U.S. equity market, the Phoenix Strategic Allocation Fund
posted a gain over the latest fiscal reporting period. Positive contributors to
performance included the Fund's overweighted position in the health-care sector
as well as strong stock selection in capital goods, consumer staples and
communication services. Individual stocks that produced exceptional gains
included such names as PFIZER, AIRTOUCH COMMUNICATIONS, CISCO SYSTEMS, BMC
SOFTWARE, STAPLES and TYCO INTERNATIONAL. On the other side of the equation,
negative contributors over the last six months included the portfolio's exposure
to the poorly performing energy group and weakness in some of our technology
holdings.
The fixed-income portion of the Strategic Allocation Fund benefited from the
trend of falling interest rates. Performance was also helped by our high-quality
government securities.
OUTLOOK
Moving into the second half of 1998, we have not made any dramatic revisions
to our outlook for the U.S. economy and its financial markets. Although recent
economic data has been rather robust, we believe that growth will slow later
this year as the impact of the "Asian flu" begins to take hold in the United
States. In fact, corporate earnings growth has already begun decelerating and we
expect this trend may continue for the remainder of 1998. While we are not
forecasting the end to this long bull market or the start of the next recession,
we would not be surprised to see the stock market take a well-deserved rest over
the near term.
With regard to stock selection, we remain strongly biased toward large-cap
growth companies that have limited Asian exposure and whose earnings are less
economically sensitive. The Portfolio is currently overweighted (versus the S&P
500 Index) in such traditional growth sectors as health-care and technology, and
to a lesser degree, communication services. Because of the present speculative
M&A environment in the financial services arena, we believe that some of this
group has become overbought and have elected to selectively take profits in this
sector. Given their value and/or cyclical orientation, the Fund also has little
or no exposure to basic materials, transportation and utilities.
The bond market is likely to remain volatile as the market continues to
question whether the economy and low unemployment will ultimately lead to higher
inflation or whether the effects of the Asian turmoil will result in slower
domestic growth, which could keep inflation in check.
As of June 30, 1998, the Phoenix Strategic Allocation Fund's asset allocation
was 71% equities, 24% fixed-income and 5% cash equivalents.
*The S&P 500 Index is an unmanaged, commonly used measure of common stock total
return performance. The Index is not available for direct investment.
**The Russell 2000 Index is an unmanaged, commonly used measure of small company
total return performance. The Index is not available for direct investment.
1
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
- ------------------------------------------------------
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--7.7%
U.S. TREASURY BONDS--0.3%
U.S. Treasury Bonds 6.125%, 11/15/27............ AAA $1,000 $ 1,071,510
------------
U.S. TREASURY NOTES--7.4%
U.S. Treasury Notes 5.375%, 1/31/00............. AAA 8,000 7,980,959
U.S. Treasury Notes 5.50%, 2/29/00.............. AAA 7,000 6,998,319
U.S. Treasury Notes 5.50%, 1/31/03.............. AAA 5,300 5,292,103
U.S. Treasury Notes 5.75%, 4/30/03.............. AAA 1,250 1,261,137
U.S. Treasury Notes 5.50%, 2/15/08.............. AAA 2,275 2,271,724
------------
23,804,242
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $24,829,470)..................................... 24,875,752
------------
AGENCY MORTGAGE-BACKED SECURITIES--0.2%
GNMA 6.50%, 7/15/28 (g)......................... AAA 600 597,750
------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $596,813)........................................ 597,750
------------
MUNICIPAL BONDS--4.4%
CALIFORNIA--2.0%
California State Department Water Resources
Revenue Series S 5%, 12/1/29.................. AA 325 316,062
Kern County Pension Obligation Revenue Taxable
7.26%, 8/15/14................................ AAA 1,700 1,867,875
Long Beach Pension Obligation Revenue Taxable
6.87%, 9/1/06 (f)............................. AAA 950 992,750
Los Angeles County Public Works Lease Revenue PJ
V-B 5.125%, 12/1/29........................... AAA 495 487,882
San Bernardino County Pension Obligation Revenue
Taxable 6.87%, 8/1/08......................... AAA 455 477,181
San Bernardino County Pension Obligation Revenue
Taxable 6.94%, 8/1/09......................... AAA 1,240 1,309,750
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Ventura County Pension Obligation Taxable 6.54%,
11/1/05....................................... AAA $1,100 $ 1,127,500
------------
6,579,000
------------
FLORIDA--1.6%
Florida State Department of Transportation
Series A 5%, 7/1/27........................... AA+ 400 390,500
Miami Beach Pension Obligation Revenue Taxable
8.60%, 9/1/21................................. AAA 3,600 4,090,500
University of Miami Exchangeable Revenue Series
A Taxable 7.65%, 4/1/20....................... AAA 595 635,163
------------
5,116,163
------------
MASSACHUSETTS--0.1%
Massachusetts State Water Authority Revenue
Series D 5%, 8/1/24 (f)....................... AAA 400 389,000
------------
NEW YORK--0.4%
New York State Dormitory Authority Revenue
Taxable 6.90%, 4/1/03......................... BBB+ 600 615,000
New York State Environmental Facilities Corp.
Revenue Taxable 6.70%, 3/15/08................ AAA 600 624,000
------------
1,239,000
------------
TEXAS--0.1%
Houston Water & Sewer System Revenue Refunding,
Jr. Lien, Series D 5%, 12/1/25................ AAA 495 483,244
------------
WASHINGTON--0.2%
Washington State Series E 5%, 7/1/22............ AA+ 495 485,100
------------
TOTAL MUNICIPAL BONDS
(Identified cost $13,737,462)..................................... 14,291,507
------------
ASSET-BACKED SECURITIES--1.7%
AESOP Funding II LLC 97-1, A2 144A 6.40%,
10/20/03 (d).................................. AAA 1,600 1,627,000
</TABLE>
2 See Notes to Financial Statements
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES--CONTINUED
Capita Equipment Receivables Trust 97-1, B
6.45%, 8/15/02................................ A+ $ 600 $ 607,687
Chase Credit Card Master Trust 97-2, A 6.30%,
4/15/03....................................... AAA 1,500 1,516,950
Fleetwood Credit Corp. Grantor Trust 96-B, A
6.90%, 3/15/12................................ AAA 620 626,875
Green Tree Financial Corp. 96-2, M1 7.60%,
4/15/27....................................... AA- 1,150 1,208,578
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $5,476,337)...................................... 5,587,090
------------
CORPORATE BONDS--2.9%
BANKS (MONEY CENTER)--0.4%
First Union Corp. 6.40%, 4/1/08................. A- 1,300 1,304,875
------------
COMPUTERS (SOFTWARE & SERVICES)--0.5%
Computer Associates International 144A 6.375%,
4/15/05 (d)................................... A- 925 930,781
Equifax, Inc. 6.30%, 7/1/05..................... A- 550 545,875
------------
1,476,656
------------
CONSUMER FINANCE--0.1%
Ford Motor Credit Co. 6%, 1/14/03............... A 480 477,000
------------
HEALTH CARE (DIVERSIFIED)--0.7%
McKesson Corp. 6.40%, 3/1/08.................... A- 1,300 1,295,125
Tenet Healthcare Corp 144A 8.125%, 12/1/08
(d)........................................... BB- 900 906,750
------------
2,201,875
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.2%
Boston Scientific Corp. 6.625%, 3/15/05......... A- 650 645,937
------------
INVESTMENT BANKING/BROKERAGE--0.2%
Merrill Lynch & Co. 6%, 2/12/03................. AA- 650 647,563
------------
MANUFACTURING (DIVERSIFIED)--0.2%
Tyco International Group 6.375%, 6/15/05........ A- 750 750,938
------------
PAPER & FOREST PRODUCTS--0.1%
Buckeye Cellulose Corp. 9.25%, 9/15/08.......... BB- 350 368,375
------------
RETAIL (FOOD CHAINS)--0.2%
Meyer (Fred), Inc. 7.45%, 3/1/08................ BB+ 525 528,281
------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
TELEPHONE--0.1%
Century Telephone Enterprises 6.30%, 1/15/08.... BBB+ $ 450 $ 445,500
------------
TRUCKS & PARTS--0.2%
Cummins Engine, Inc. 6.45%, 3/1/05.............. BBB+ 475 479,156
------------
TOTAL CORPORATE BONDS
(Identified cost $9,281,296)...................................... 9,326,156
------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--3.2%
CS First Boston Mortgage Securities Corp.
95-AEW1, B 7.182%, 11/25/27................... AA- 1,775 1,789,977
First Union-Lehman Bros. 97-C1, B 7.43%,
4/18/07....................................... Aa(c) 600 639,000
G.E. Capital Mortgage Services, Inc. 96-8, M
7.25%, 5/25/26................................ AA 246 252,612
Lehman Large Loan 97-LL1, B 6.95%, 3/12/07...... AA 725 754,227
Nationslink Funding Corp. 96-1, B 7.69%,
12/20/05...................................... AA 325 346,226
Navistar Financial Corp. Owner Trust 98-A, A
5.94%, 11/15/04............................... AAA 974 974,435
Residential Asset Securitization Trust 96-A8, A1
8%, 12/25/26.................................. AAA 391 393,001
Residential Funding Mortgage Securities I 96-S1,
A11 7.10%, 1/25/26............................ AAA 1,500 1,526,484
Residential Funding Mortgage Securities I 96-S4,
M1 7.25%, 2/25/26............................. AA 489 499,297
Structured Asset Securities Corp. 93-C1, B
6.60%, 10/25/24............................... A+ 1,275 1,266,737
Structured Asset Securities Corp. 95-C4, B 7%,
6/25/26....................................... AA 1,850 1,867,922
------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $10,115,652)..................................... 10,309,918
------------
FOREIGN GOVERNMENT SECURITIES--2.6%
ARGENTINA--0.3%
Republic of Argentina Bearer 6.625%, 3/31/05
(e)........................................... BB 789 697,330
Republic of Argentina 9.75%, 9/19/27............ BB 340 314,925
------------
1,012,255
------------
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
BRAZIL--0.2%
Republic of Brazil NMB-L 6.688%, 4/15/09 (e).... BB- $ 875 $ 668,281
------------
BULGARIA--0.1%
Republic of Bulgaria FLIRB Series A Bearer Euro
2.25%, 7/28/12 (e)............................ B 580 358,150
------------
COLOMBIA--0.2%
Republic of Colombia 7.25%, 2/23/04............. BBB- 750 693,750
------------
CROATIA--0.3%
Croatia Series B 6.50%, 7/31/06 (e)............. BBB- 370 334,650
Croatia Series A 6.50%, 7/31/10 (e)............. BBB- 420 365,400
------------
700,050
------------
ECUADOR--0.1%
Ecuador Bearer PDI Euro, PIK interest
capitalization 6.625%, 2/27/15 (e)............ B(c) 618 355,884
------------
KOREA--0.2%
Republic of Korea 8.875%, 4/15/08............... BB+ 735 672,525
------------
MEXICO--0.3%
United Mexican States Global Bond 11.50%,
5/15/26....................................... BB 870 990,495
------------
PANAMA--0.2%
Republic of Panama 8.875%, 9/30/27.............. BB+ 715 675,854
------------
PERU--0.1%
Peru PDI 4%, 3/7/17 (e)......................... BB 540 334,125
------------
POLAND--0.3%
Poland PDI Bearer 4%, 10/27/14 (e).............. BBB- 1,125 1,014,961
------------
RUSSIA--0.2%
Russia IAN Series U.S. 144A 6.625%, 12/15/15
(d)(e)........................................ NR 524 291,736
Russia Principal Loan 6.625%, 12/15/20 (e)...... NR 550 261,250
------------
552,986
------------
VENEZUELA--0.1%
Republic of Venezuela 9.25%, 9/15/27............ B+ 395 306,816
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $8,588,330)...................................... 8,336,132
------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ ------------
<S> <C> <C> <C>
FOREIGN CORPORATE BONDS--0.6%
ARGENTINA--0.0%
Movicom 144A, 9.25%, 5/8/08 (d)................. BBB- $200 $ 192,000
------------
CHILE--0.2%
Compania Sud Americana de Vapores SA 7.375%,
12/08/03...................................... BBB 200 194,000
Petropower I Funding Trust 144A, 7.36%, 2/15/14
(d)........................................... BBB 500 453,160
------------
647,160
------------
JAPAN--0.4%
IBJ Preferred Capital Co. LLC 144A 8.79%,
12/29/49 (d)(e)............................... Baa(c) 620 567,608
SB Treasury Co. LLC 144A 9.40%, 12/29/49
(d)(e)........................................ BBB- 620 611,089
------------
1,178,697
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $2,141,185)...................................... 2,017,857
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<S> <C> <C>
COMMON STOCKS--67.8%
AEROSPACE/DEFENSE--0.7%
Boeing Co.............................................. 52,200 2,326,162
------------
BANKS (MAJOR REGIONAL)--3.0%
Banc One Corp.......................................... 39,320 2,194,547
BankBoston Corp........................................ 30,400 1,691,000
Mellon Bank Corp....................................... 27,300 1,900,762
U.S. Bancorp........................................... 87,700 3,771,100
------------
9,557,409
------------
BANKS (MONEY CENTER)--2.8%
BankAmerica Corp....................................... 34,500 2,982,094
Citicorp............................................... 10,100 1,507,425
First Chicago NBD Corp................................. 25,000 2,215,625
NationsBank Corp....................................... 32,400 2,478,600
------------
9,183,744
------------
BROADCASTING (TELEVISION, RADIO & CABLE)--3.0%
CBS Corp. (b).......................................... 111,400 3,536,950
Capstar Broadcasting Corp. (b)......................... 15,800 396,975
Chancellor Media Corp. (b)............................. 54,700 2,716,197
Clear Channel Communications, Inc. (b)................. 26,700 2,913,637
------------
9,563,759
------------
CHEMICALS (DIVERSIFIED)--1.2%
Monsanto Co............................................ 69,200 3,866,550
------------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMPUTERS (HARDWARE)--4.1%
Compaq Computer Corp................................... 73,400 $ 2,082,725
International Business Machines Corp................... 97,300 11,171,256
------------
13,253,981
------------
COMPUTERS (NETWORKING)--0.9%
Cisco Systems, Inc. (b)................................ 29,700 2,734,256
------------
COMPUTERS (PERIPHERALS)--0.6%
EMC Corp. (b).......................................... 39,500 1,770,094
------------
COMPUTERS (SOFTWARE & SERVICES)--5.8%
America Online, Inc. (b)............................... 15,000 1,590,000
BMC Software, Inc. (b)................................. 64,500 3,349,969
Comdisco, Inc.......................................... 30,000 570,000
Computer Associates International, Inc................. 76,900 4,272,756
Compuware Corp. (b).................................... 86,800 4,437,650
Edwards (J.D.) & Co. (b)............................... 37,500 1,610,156
Microsoft Corp. (b).................................... 13,700 1,484,737
Sterling Commerce, Inc. (b)............................ 26,600 1,290,100
------------
18,605,368
------------
CONSUMER FINANCE--1.4%
Household International, Inc........................... 32,700 1,626,825
MBNA Corp.............................................. 84,100 2,775,300
------------
4,402,125
------------
CONTAINERS (METAL & GLASS)--0.4%
Owens-Illinois, Inc. (b)............................... 30,700 1,373,825
------------
DISTRIBUTORS (FOOD & HEALTH)--0.9%
Cardinal Health, Inc................................... 32,500 3,046,875
------------
ELECTRICAL EQUIPMENT--1.2%
General Electric Co.................................... 43,900 3,994,900
------------
ELECTRONICS (INSTRUMENTATION)--0.3%
Linear Technology Corp................................. 15,300 922,781
------------
ELECTRONICS (SEMICONDUCTORS)--1.0%
Intel Corp............................................. 41,600 3,083,600
------------
ENTERTAINMENT--1.8%
Liberty Media Group (b)................................ 102,450 3,976,341
Walt Disney Co. (The).................................. 18,800 1,975,175
------------
5,951,516
------------
FINANCIAL (DIVERSIFIED)--1.1%
FHLMC.................................................. 73,700 3,468,506
------------
HEALTH CARE (DIVERSIFIED)--3.4%
Bristol-Myers Squibb Co................................ 49,400 5,677,912
Warner-Lambert Co...................................... 77,400 5,369,625
------------
11,047,537
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--3.9%
Pfizer, Inc............................................ 44,200 $ 4,803,987
Schering-Plough Corp................................... 56,000 5,131,000
Watson Pharmaceuticals, Inc. (b)....................... 59,700 2,787,244
------------
12,722,231
------------
HEALTH CARE (HOSPITAL MANAGEMENT)--1.6%
HBO & Co............................................... 150,600 5,308,650
------------
HEALTH CARE (LONG TERM CARE)--0.9%
HEALTHSOUTH Corp. (b).................................. 114,400 3,053,050
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.2%
Medtronic, Inc......................................... 62,800 4,003,500
------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.6%
Colgate-Palmolive Co................................... 33,200 2,921,600
Procter & Gamble Co.................................... 25,400 2,312,987
------------
5,234,587
------------
INSURANCE (LIFE/HEALTH)--0.4%
UNUM Corp.............................................. 20,600 1,143,300
------------
INSURANCE (MULTI-LINE)--1.8%
American International Group, Inc...................... 23,300 3,401,800
ReliaStar Financial Corp............................... 25,400 1,219,200
Travelers Group, Inc................................... 18,300 1,109,438
------------
5,730,438
------------
INSURANCE (PROPERTY-CASUALTY)--0.7%
Allstate Corp.......................................... 22,800 2,087,625
------------
MANUFACTURING (DIVERSIFIED)--1.6%
Thermo Electron Corp. (b).............................. 30,400 1,039,300
Tyco International Ltd................................. 68,400 4,309,200
------------
5,348,500
------------
OIL & GAS (DRILLING & EQUIPMENT)--2.8%
Cooper Cameron Corp. (b)............................... 16,900 861,900
Diamond Offshore Drilling, Inc......................... 16,900 676,000
Global Industries, Ltd. (b)............................ 28,800 486,000
Halliburton Co......................................... 42,200 1,880,538
Schlumberger Ltd....................................... 50,800 3,470,275
Transocean Offshore, Inc............................... 35,900 1,597,550
------------
8,972,263
------------
OIL & GAS (REFINING & MARKETING)--1.0%
Tosco Corp............................................. 104,500 3,069,688
------------
RETAIL (BUILDING SUPPLIES)--1.3%
Home Depot, Inc........................................ 49,100 4,078,369
------------
RETAIL (COMPUTERS & ELECTRONICS)--0.4%
Tandy Corp............................................. 23,100 1,225,744
------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
RETAIL (DISCOUNTERS)--0.6%
Consolidated Stores Corp. (b).......................... 56,000 $ 2,030,000
------------
RETAIL (DRUG STORES)--2.8%
CVS Corp............................................... 112,500 4,380,469
Rite Aid Corp.......................................... 122,600 4,605,163
------------
8,985,632
------------
RETAIL (FOOD CHAINS)--2.4%
Meyer (Fred), Inc. (b)................................. 42,260 1,796,050
Safeway, Inc. (b)...................................... 145,500 5,920,031
------------
7,716,081
------------
RETAIL (GENERAL MERCHANDISE)--2.1%
Borders Group, Inc. (b)................................ 51,800 1,916,600
Sears, Roebuck & Co.................................... 37,200 2,271,525
Staples, Inc. (b)...................................... 96,750 2,799,703
------------
6,987,828
------------
RETAIL (SPECIALTY-APPAREL)--0.5%
TJX Companies, Inc. (The).............................. 64,600 1,558,475
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--2.1%
Airtouch Communications, Inc. (b)...................... 115,000 6,720,313
------------
TELECOMMUNICATIONS (LONG DISTANCE)--3.2%
AT&T Corp.............................................. 113,700 6,495,113
MCI Communications Corp................................ 63,500 3,690,938
------------
10,186,051
------------
WASTE MANAGEMENT--1.3%
USA Waste Services, Inc. (b)........................... 86,400 4,266,000
------------
TOTAL COMMON STOCKS
(Identified cost $198,894,770)..................................... 218,581,313
------------
FOREIGN COMMON STOCKS--3.4%
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.4%
Elan Corp. PLC Sponsored ADR (Ireland) (b)............. 21,800 1,402,012
------------
HOUSEHOLD FURN. & APPLIANCES--1.8%
Royal Philips Electronics NV NY Registered Shares
(Netherlands)........................................ 67,900 5,771,500
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.4%
Telefonaktiebolaget LM Ericsson Sponsored ADR
(Sweden)............................................. 43,000 $ 1,230,875
------------
TELEPHONE--0.8%
Telecomunicacoes Brasileiras SA Sponsored ADR
(Brazil)............................................. 22,800 2,489,475
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $10,971,292)...................................... 10,893,862
------------
TOTAL LONG-TERM INVESTMENTS--94.5%
(Identified cost $284,632,607)..................................... 304,817,337
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
-------- ------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--5.3%
COMMERCIAL PAPER--4.5%
Potomac Electric Power Co. 5.60%, 7/7/98........ A-1 $4,495 4,490,805
Du Pont (E. I.) de Nemours & Co. 5.50%,
7/8/98........................................ A-1+ 5,185 5,179,455
Vermont American Corp. 5.52%, 7/16/98........... A-1+ 1,770 1,765,929
Asset Securitization Cooperative Corp. 6%,
8/13/98....................................... A-1+ 2,500 2,480,238
Beta Finance Corp. Ltd. 5.44%, 9/24/98.......... A-1+ 750 740,296
------------
14,656,723
------------
</TABLE>
<TABLE>
<S> <C> <C>
FEDERAL AGENCY SECURITIES--0.8%
FHLB 5.575%, 3/2/99....................................... 2,500 2,502,350
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $17,160,042)..................................... 17,159,073
------------
TOTAL INVESTMENTS--99.8%
(Identified cost $301,792,649).................................... 321,976,410(a)
Cash and receivables, less liabilities--0.2% 495,768
------------
NET ASSETS--100.0%.................................................. $322,472,178
------------
------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $25,737,157 and gross
depreciation of $5,668,749 for income tax purposes. At June 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$301,908,002.
(b) Non-income producing.
(c) As rated by Moody's, Fitch, or Duff & Phelps.
(d) 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, 1998,
these securities amounted to a value of $5,580,124 or 1.7% of net assets.
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(f) All or a portion segregated as collateral.
(g) When issued.
6 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $301,792,649) $ 321,976,410
Short-term investments held as collateral
for loaned securities 2,130,951
Receivables
Investment securities sold 2,806,117
Interest and dividends 1,442,262
Fund shares sold 103,287
--------------
Total assets 328,459,027
--------------
LIABILITIES
Payables
Custodian 117,389
Investment securities purchased 2,961,686
Collateral on securities loaned 2,130,951
Fund shares repurchased 220,387
Investment advisory fee 171,148
Transfer agent fee 123,870
Distribution fee 72,532
Financial agent fee 20,587
Directors' fee 8,488
Accrued Expenses 159,811
--------------
Total Liabilities 5,986,849
--------------
NET ASSETS $ 322,472,178
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of common stock $ 278,340,971
Undistributed net investment income 338,081
Accumulated net realized gain 23,609,365
Net unrealized appreciation 20,183,761
--------------
NET ASSETS $ 322,472,178
--------------
--------------
CLASS A
Shares of common stock, $1 par value,
50,000,000 shares authorized
(Net Assets $311,333,745) 18,956,444
Net asset value per share $16.42
Offering price per share
$16.42/(1-4.75%) $17.24
CLASS B
Shares of common stock, $1 par value,
50,000,000 shares authorized
(Net Assets $11,138,433) 684,137
Net asset value and offering price per share $16.28
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 3,862,802
Dividends 797,698
Security lending 23,819
-------------
Total investment income 4,684,319
-------------
EXPENSES
Investment advisory fee 1,042,119
Distribution fee--Class A 387,212
Distribution fee--Class B 54,411
Financial agent fee 82,298
Transfer agent 241,157
Printing 64,472
Professional 23,284
Custodian 22,504
Registration 18,095
Directors 10,969
Miscellaneous 7,797
-------------
Total expenses 1,954,318
-------------
NET INVESTMENT INCOME 2,730,001
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 23,937,367
Net change in unrealized appreciation (depreciation) on
investments 4,219,697
-------------
NET GAIN ON INVESTMENTS 28,157,064
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 30,887,065
-------------
-------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
----------------- -------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 2,730,001 $ 5,377,989
Net realized gain 23,937,367 55,056,093
Net change in unrealized appreciation (depreciation) 4,219,697 166,401
----------------- -------------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 30,887,065 60,600,483
----------------- -------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (2,773,915) (5,272,416)
Net investment income--Class B (63,188) (110,138)
Net realized gains--Class A (7,214,496) (50,054,070)
Net realized gains--Class B (259,410) (1,756,759)
----------------- -------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (10,311,009) (57,193,383)
----------------- -------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,435,352 and 609,276 shares, respectively) 23,408,205 10,117,463
Net asset value of shares issued from reinvestment of distributions
(528,650 and 3,143,046 shares, respectively) 8,553,554 47,891,238
Cost of shares repurchased (3,007,522 and 3,705,438 shares, respectively) (49,037,986) (62,577,057)
----------------- -------------------
Total (17,076,227) (4,568,356)
----------------- -------------------
CLASS B
Proceeds from sales of shares (42,211 and 85,000 shares, respectively) 678,590 1,421,465
Net asset value of shares issued from reinvestment of distributions
(18,698 and 112,967 shares, respectively) 299,910 1,704,113
Cost of shares repurchased (91,141 and 105,293 shares, respectively) (1,461,232) (1,781,004)
----------------- -------------------
Total (482,732) 1,344,574
----------------- -------------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (17,558,959) (3,223,782)
----------------- -------------------
NET INCREASE IN NET ASSETS 3,017,097 183,318
NET ASSETS
Beginning of period 319,455,081 319,271,763
----------------- -------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $338,081 AND $445,183, RESPECTIVELY) $ 322,472,178 $ 319,455,081
----------------- -------------------
----------------- -------------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.43 $ 15.52 $ 15.98 $ 14.82 $ 15.48 $ 14.89
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.15 0.30 0.31 0.45 0.34 0.06(2)
Net realized and unrealized gain (loss) 1.38 2.81 1.10 2.22 (0.69) 1.49
----------- --------- --------- --------- ----------- ---------
TOTAL FROM INVESTMENT OPERATIONS 1.53 3.11 1.41 2.67 (0.35) 1.55
----------- --------- --------- --------- ----------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.15) (0.30) (0.29) (0.52) (0.31) (0.11)
Dividends from net realized gains (0.39) (2.90) (1.58) (0.99) (0.001) (0.85)
----------- --------- --------- --------- ----------- ---------
TOTAL DISTRIBUTIONS (0.54) (3.20) (1.87) (1.51) (0.311) (0.96)
----------- --------- --------- --------- ----------- ---------
Change in net asset value 0.99 (0.09) (0.46) 1.16 (0.66) 0.59
----------- --------- --------- --------- ----------- ---------
NET ASSET VALUE, END OF PERIOD $ 16.42 $ 15.43 $ 15.52 $ 15.98 $ 14.82 $ 15.48
----------- --------- --------- --------- ----------- ---------
----------- --------- --------- --------- ----------- ---------
Total return(1) 9.97%(4) 20.68% 8.78% 18.23% (2.26)% 10.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $311,334 $308,524 $309,678 $361,526 $335,177 $370,440
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.19%(3) 1.17% 1.21% 1.21% 1.24% 1.29%
Net investment income 1.73%(3) 1.68% 1.78% 2.67% 2.18% 1.26%
Portfolio turnover 103%(4) 355% 275% 184% 225% 246%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/98 YEAR ENDED DECEMBER 31, 10/24/94 TO
(UNAUDITED) 1997 1996 1995 12/31/94
----------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.30 $ 15.43 $ 15.89 $ 14.79 $ 14.98
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.08 0.18 0.19 0.30(2) 0.07
Net realized and unrealized gain (loss) 1.39 2.77 1.09 2.22 (0.09)
----------- --------- --------- --------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.47 2.95 1.28 2.52 (0.02)
----------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
Dividends from net investment income (0.10) (0.18) (0.16) (0.43) (0.17)
Dividends from net realized gains (0.39) (2.90) (1.58) (0.99) --
----------- --------- --------- --------- -----------
TOTAL DISTRIBUTIONS (0.49) (3.08) (1.74) (1.42) (0.17)
----------- --------- --------- --------- -----------
Change in net asset value 0.98 (0.13) (0.46) 1.10 (0.19)
----------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 16.28 $ 15.30 $ 15.43 $ 15.89 $ 14.79
----------- --------- --------- --------- -----------
----------- --------- --------- --------- -----------
Total return(1) 9.62%(4) 19.74% 7.95% 17.31% (0.12)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $11,138 $10,931 $9,594 $8,046 $1,328
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.94%(3) 1.92% 1.96% 1.97% 2.26%(3)
Net investment income 0.98%(3) 0.92% 1.01% 1.88% 1.74%(3)
Portfolio turnover 103%(4) 355% 275% 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
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
See Notes to Financial Statements 9
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Strategic Allocation 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. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at 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 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 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. OPTIONS:
The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Fund may purchase options which are included in the Fund's Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
10
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED) (CONTINUED)
G. LOAN AGREEMENTS:
The Fund may invest in direct debt instruments which are interests in amounts
owned by a corporate, governmental, or other borrower to lenders or lending
syndicates. The Fund's investments in loans may be in the form of participations
in loans or assignments of all or a portion of loans from third parties. A loan
is often administered by a bank or other financial institution (the lender) that
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. When investing in a loan participation, the
Fund has the right to receive payments of principal, interest and any fees to
which it is entitled only from the lender selling the loan agreement and only
upon receipt by the lender of payments from the borrower. The Fund generally has
no right to enforce compliance with the terms of the loan agreement with the
borrower. As a result, the Fund may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. When the Fund
purchases assignments from lenders it acquires direct rights against the
borrower on the loan. Direct indebtedness of emerging countries involves a risk
that the government entities responsible for the repayment of the debt may be
unable, or unwilling to pay the principal and interest when due.
H. 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 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 June 30, 1998, the
Fund had loaned securities with a market value of $5,453,749 and received
collateral of $5,577,732.
I. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
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 majority-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 majority-owned subsidiary of PHL, has advised the Fund that it
retained net selling commissions of $10,306 for Class A shares and deferred
sales charges of $11,299 for Class B shares for the six months ended June 30,
1998. 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 six months ended June 30, 1998, $95,319 was retained by
the Distributor, $320,659 was paid to unaffiliated participants and $25,645 was
paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services through May 31, 1998 at an annual rate of
0.05% of average daily net assets up to $100 million, 0.04% of average daily net
assets of $100 million to $300 million, 0.03% of average daily net assets of
$300 million through $500 million, and 0.015% of average daily net assets
greater than $500 million; a minimum fee applied. Effective June 1, 1998, PEPCO
receives a financial agent fee equal to the sum of (1) the documented cost of
fund accounting and related services provided by PFPC, Inc. (subagent to PEPCO),
plus (2) the documented cost to PEPCO to provide financial reporting, tax
services and oversight of subagent's performance. The current fee schedule of
PFPC, Inc. ranges from 0.085% to 0.0125% of the average daily net asset values
of the Fund. Certain minimums and waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the six months ended June 30, 1998, transfer
agent fees were $241,157 of which PEPCO retained $86,835 which is net of the
fees paid to State Street.
At June 30, 1998, PHL and affiliates held 62 Class A shares and 10,296 Class B
shares of the Fund with a combined value of $168,634.
NOTE 3. PURCHASES AND SALES OF SECURITIES
During the six months ended June 30, 1998, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $225,222,454 and $252,244,035, respectively. Purchases and sales of
long-term
11
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED) (CONTINUED)
U.S. Government and agency securities amounted to $59,982,019 and $44,455,745,
respectively.
NOTE 4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
12
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
DIRECTORS
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
John F. Sharry, Executive Vice President
James D. Wehr, Senior Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary and Clerk
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
<TABLE>
<CAPTION>
HOW TO CONTACT US
<S> <C>
Toll-Free Numbers
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy
Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
World Wide Web address:
www.phoenixinvestments.com
</TABLE>
<PAGE>
Phoenix Funds ---------------
PO Box 2200 BULK RATE MAIL
Enfield CT 06083-2200
U.S. POSTAGE
PAID
SPRINGFIELD, MA
PERMIT NO. 444
---------------
[LOGO]PHOENIX
INVESTMENT PARTNERS
PXP 462 (8/98)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000049999
<NAME> PHOENIX STRATEGIC ALLOCATION FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 301793
<INVESTMENTS-AT-VALUE> 321976
<RECEIVABLES> 4352
<ASSETS-OTHER> 2131
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 328459
<PAYABLE-FOR-SECURITIES> 2962
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3025
<TOTAL-LIABILITIES> 5987
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 278341
<SHARES-COMMON-STOCK> 18956
<SHARES-COMMON-PRIOR> 20000
<ACCUMULATED-NII-CURRENT> 338
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 23609
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 20184
<NET-ASSETS> 322472
<DIVIDEND-INCOME> 798
<INTEREST-INCOME> 3863
<OTHER-INCOME> 23
<EXPENSES-NET> (1954)
<NET-INVESTMENT-INCOME> 2730
<REALIZED-GAINS-CURRENT> 23937
<APPREC-INCREASE-CURRENT> 4220
<NET-CHANGE-FROM-OPS> 30887
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2774)
<DISTRIBUTIONS-OF-GAINS> (7214)
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