<PAGE>
PHOENIX INVESTMENT PARTNERS
JUNE 30, 1999
SEMIANNUAL REPORT
Phoenix Strategic
Allocation Fund
[LOGO]
PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
We are pleased to provide this semiannual financial summary for the Phoenix
Strategic Allocation Fund for the six months ended June 30, 1999.
If you have any questions, please contact your financial advisor or call us at
1-800-243-1574 (option 0), between 8:00 a.m. and 6:00 p.m. Eastern Time, Monday
through Friday.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
JUNE 30, 1999
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.
1
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
INVESTMENTS AT JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--20.0%
U.S. TREASURY BONDS--1.1%
U.S. Treasury Bonds 6.125%, 11/15/27.... AAA $ 1,250 $ 1,239,956
U.S. Treasury Bonds 5.25%, 2/15/29...... AAA 2,520 2,261,094
-------------
3,501,050
-------------
U.S. TREASURY NOTES--18.9%
U.S. Treasury Notes 5.375%,
1/31/00(f).............................. AAA 8,000 8,015,290
U.S. Treasury Notes 5.50%, 2/29/00...... AAA 6,000 6,015,055
U.S. Treasury Notes 4.50%, 9/30/00...... AAA 1,525 1,508,706
U.S. Treasury Notes 5%, 2/28/01......... AAA 8,000 7,941,558
U.S. Treasury Notes 6.25%, 6/30/02...... AAA 1,250 1,268,353
U.S. Treasury Notes 5.50%, 1/31/03...... AAA 5,000 4,956,590
U.S. Treasury Notes 5.75%, 4/30/03...... AAA 1,250 1,248,189
U.S. Treasury Notes 5.25%, 8/15/03...... AAA 2,503 2,453,180
U.S. Treasury Notes 4.25%, 11/15/03..... AAA 10,000 9,413,066
U.S. Treasury Notes 4.75%, 2/15/04...... AAA 8,750 8,389,062
U.S. Treasury Notes 5.50%, 2/15/08...... AAA 2,275 2,211,075
U.S. Treasury Notes 5.625%, 5/15/08..... AAA 2,831 2,771,995
U.S. Treasury Notes 4.75%, 11/15/08..... AAA 5,375 4,931,095
-------------
61,123,214
-------------
- -----------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $66,192,197) 64,624,264
- -----------------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--0.2%
GNMA 6.50%, 6/15/28..................... AAA 575 553,265
- -----------------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $571,726) 553,265
- -----------------------------------------------------------------------------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------------- -------------
<S> <C> <C> <C>
MUNICIPAL BONDS--4.8%
CALIFORNIA--1.7%
Kern County Pension Obligation Revenue
Taxable 7.26%, 8/15/14.................. AAA $ 1,700 $ 1,723,375
Long Beach Pension Obligation Taxable
6.87%, 9/1/06........................... AAA 950 960,688
San Bernardino County Pension Obligation
Revenue Taxable 6.87%, 8/1/08........... AAA 455 456,706
San Bernardino County Pension Obligation
Revenue Taxable 6.94%, 8/1/09........... AAA 1,240 1,247,750
Ventura County Pension Obligation
Taxable 6.54%, 11/1/05.................. AAA 1,100 1,101,375
-------------
5,489,894
-------------
FLORIDA--2.0%
Miami Beach Special Obligation Revenue
Taxable 8.60%, 9/1/21................... AAA 3,600 3,915,000
Tampa Solid Waste System Revenue Taxable
Series A 6.23%, 10/1/05................. Aaa(c) 1,800 1,773,000
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20(e)....... AAA 595 604,669
-------------
6,292,669
-------------
NEW YORK--0.5%
Long Island Power Authority Electrical
Systems Revenue Series A 5.50%,
12/1/10................................. AAA 360 373,050
New York State Dormitory Authority
Revenue Taxable 6.90%, 4/1/03........... BBB+ 600 606,000
</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>
NEW YORK--CONTINUED
New York State Environmental Facilities
Corp. Revenue Taxable 6.70%, 3/15/08.... AAA $ 600 $ 595,500
-------------
1,574,550
-------------
PENNSYLVANIA--0.3%
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A 5.79%,
4/15/09................................. AAA 1,175 1,086,875
TEXAS--0.3%
Dallas Civic Center Revenue 5.25%,
8/15/08................................. AAA 375 383,906
Houston Water & Sewer System Revenue
Refunding, Jr. Lien,
Series D 5%, 12/1/25.................... AAA 495 457,875
Texas State General Obligation Series B
5.25%, 10/1/08.......................... AA 200 206,250
-------------
1,048,031
-------------
- -----------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $15,700,007) 15,492,019
- -----------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--1.5%
AESOP Funding II LLC 97-1, A2 144A
6.40%, 10/20/03(d)...................... AAA 1,600 1,599,775
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ A+ 600 599,466
Ford Credit Auto Owner Trust 99-B, A4
5.80%, 6/15/02.......................... AAA 500 496,836
Green Tree Financial Corp. 96-2, M1
7.60%, 4/15/27.......................... AA- 1,150 1,165,174
Nations Bank Auto Owner Trust 96-A, B2
6.875%, 5/15/03......................... A 500 511,198
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------------- -------------
<S> <C> <C> <C>
Premier Auto Trust 98-3, B 6.14%,
9/8/04.................................. A+ $ 500 $ 499,328
- -----------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $4,864,218) 4,871,777
- -----------------------------------------------------------------------------------
CORPORATE BONDS--1.8%
BUILDING MATERIALS--0.1%
Nortek, Inc. Series B 9.125%, 9/1/07.... B+ 400 399,000
COMPUTERS (SOFTWARE & SERVICES)--0.1%
Computer Associates International, Inc.
Series B 6.375%, 4/15/05................ A- 435 413,250
HEALTH CARE (HOSPITAL MANAGEMENT)--0.2%
Tenet Healthcare Corp. 8%, 1/15/05...... BB+ 600 588,000
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.2%
Boston Scientific Corp. 6.625%,
3/15/05................................. BBB 515 491,825
INSURANCE (MULTI-LINE)--0.1%
Willis Corroon Corp. 144A 9%,
2/1/09(d)............................... B+ 425 412,250
MANUFACTURING (DIVERSIFIED)--0.2%
Tyco International Group SA 6.375%,
6/15/05................................. A- 750 723,750
METALS MINING--0.1%
Level 3 Communications, Inc. 9.125%,
5/1/08.................................. B 350 345,625
PAPER & FOREST PRODUCTS--0.1%
Buckeye Technologies, Inc. 9.25%,
9/15/08................................. BB- 350 368,812
PUBLISHING--0.1%
Charter Communications Holdings LLC 144A
8.625%, 4/1/09(d)....................... B+ 450 433,125
RETAIL (FOOD CHAINS)--0.2%
Meyer (Fred), Inc. 7.45%, 3/1/08........ BBB- 525 534,188
TELECOMMUNICATIONS (LONG DISTANCE)--0.2%
Nextlink Communications, Inc. 10.75%,
11/15/08................................ B 590 606,225
</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>
TEXTILES (APPAREL)--0.1%
Collins & Aikman Corp. 11.50%,
4/15/06................................. B $ 400 $ 408,000
TRUCKS & PARTS--0.1%
Cummins Engine Co., Inc. 6.45%,
3/1/05.................................. BBB+ 240 228,600
- -----------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $6,125,394) 5,952,650
- -----------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED SECURITIES-- 5.0%
CS First Boston Mortgage Securities
Corp. 97-C2, A3 6.55%, 11/17/07......... AAA 2,750 2,679,102
CS First Boston Mortgage Securities
Corp. 95-AEW1, B 7.182%, 11/25/27....... AA- 311 310,143
DLJ Commercial Mortgage Corp. 99-CG1,
A1B 6.46%, 1/10/09...................... Aaa(c) 2,000 1,932,500
DLJ Commercial Mortgage Corp. 98-CF2,
A1B 6.24%, 11/12/31..................... Aaa(c) 2,550 2,442,023
First Union Commercial Mortgage Trust
99-C1, A2 6.07%, 10/15/08............... AAA 2,000 1,881,875
First Union-Lehman Brothers Commercial
Mortgage 97-C1, B 7.43%, 4/18/07........ Aa(c) 600 612,593
G.E. Capital Mortgage Services, Inc.
96-8, 1M 7.25%, 5/25/26................. AA 242 239,174
LB Commercial Conduit Mortgage Trust
98-C4, A1B 6.21%, 10/15/08.............. AAA 2,000 1,902,592
Lehman Large Loan 97-LLI, B 6.95%,
3/12/07................................. AA 725 722,642
Nationslink Funding Corp. 96-1, B 7.69%,
12/20/05................................ AA 325 332,414
Residential Asset Securitization Trust
96-A8, A1 8%, 12/25/26.................. AAA 2 1,880
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------------- -------------
<S> <C> <C> <C>
Residential Funding Mortgage Securities
I 96-S1, A11 7.10%, 1/25/26............. AAA $ 1,500 $ 1,492,500
Residential Funding Mortgage Securities
I 96-S4, M1 7.25%, 2/25/26.............. AA 481 478,889
Structured Asset Securities Corp. 93-C1,
B 6.60%, 10/25/24....................... A+ 1,275 1,268,779
- -----------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $16,486,075) 16,297,106
- -----------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--3.4%
BULGARIA--0.4%
Republic of Bulgaria FLIRB Series A
Bearer Euro 2.50%, 7/28/12(e)........... B(c) 580 354,162
Republic of Bulgaria IAB Series PDI Euro
5.875%, 7/28/11(e)...................... B(c) 1,400 966,875
-------------
1,321,037
-------------
COLOMBIA--0.2%
Republic of Colombia 10.875%, 3/9/04.... BBB- 750 720,000
COSTA RICA--0.4%
Republic of Costa Rica 144A 9.335%,
5/15/09(d).............................. BB 1,190 1,163,225
CROATIA--0.3%
Croatia Series B 5.813%, 7/31/06(e)..... BBB- 562 470,713
Croatia Series A 5.813%, 7/31/10(e)..... BBB- 655 524,000
-------------
994,713
-------------
KOREA--0.3%
Republic of Korea 8.875%, 4/15/08....... BBB- 735 780,019
MEXICO--0.5%
United Mexican States Global Bond
11.50%, 5/15/26......................... BB 1,400 1,564,500
PANAMA--0.5%
Republic of Panama 8.875%, 9/30/27...... BB+ 915 763,567
</TABLE>
4 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>
PANAMA--CONTINUED
Republic of Panama 9.375%, 4/1/29....... BB+ $ 1,000 $ 955,000
-------------
1,718,567
-------------
PHILIPPINES--0.0%
Republic of Philippines 9.875%
1/15/19................................. BB+ 125 122,969
POLAND--0.8%
Poland Bearer PDI 5%, 10/27/14(e)....... BBB 2,720 2,420,800
- -----------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $10,994,349) 10,805,830
- -----------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--0.8%
ARGENTINA--0.2%
Compania de Radiocomunicaciones Moviles
SA 144A 9.25%, 5/8/08(d)................ BBB- 200 177,000
Telecom Argentina - France Telecom SA
EMTN WI 144A 9.75%, 7/12/01(d).......... BBB- 450 451,125
-------------
628,125
-------------
CHILE--0.2%
Compania Sud Americana de Vapores SA
RegS 7.375%, 12/8/03.................... BBB 200 188,250
Petropower I Funding Trust 144A 7.36%,
2/15/14(d).............................. BBB 489 416,590
-------------
604,840
-------------
JAPAN--0.3%
IBJ Preferred Capital Co. LLC 144A
8.79%, 12/29/49(d)(e)................... Ba(c) 620 520,152
SB Treasury Co. LLC Series A 144A 9.40%,
12/29/49(d)(e).......................... BB+ 620 599,362
-------------
1,119,514
-------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- ------------- -------------
<S> <C> <C> <C>
POLAND--0.1%
TPSA Finance BV 144A 7.75%,
12/10/08(d)............................. BBB $ 240 $ 234,000
- -----------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $2,809,540) 2,586,479
- -----------------------------------------------------------------------------------
<CAPTION>
SHARES
-------------
<S> <C> <C> <C>
COMMON STOCKS--57.3%
BANKS (MAJOR REGIONAL)--2.3%
Mellon Bank Corp........................ 43,400 1,578,675
Wells Fargo Co.......................... 140,600 6,010,650
-------------
7,589,325
-------------
BANKS (MONEY CENTER)--1.8%
Bank of America Corp.................... 78,493 5,754,483
BEVERAGES (NON-ALCOHOLIC)--1.1%
PepsiCo, Inc............................ 90,000 3,481,875
BIOTECHNOLOGY--0.6%
Genzyme Corp. (b)....................... 37,200 1,804,200
Genzyme Surgical Products(b)............ 6,659 29,342
-------------
1,833,542
-------------
BROADCASTING (TELEVISION, RADIO & CABLE)--3.8%
AT&T Corp.- Liberty Media Group Class
A(b).................................... 197,900 7,272,825
CBS Corp.(b)............................ 43,200 1,876,500
Chancellor Media Corp.(b)............... 36,100 1,990,012
Clear Channel Communications, Inc.(b)... 19,000 1,309,812
-------------
12,449,149
-------------
COMMUNICATIONS EQUIPMENT--1.7%
General Motors Corp. Class H(b)......... 19,800 1,113,750
Motorola, Inc........................... 12,000 1,137,000
Tellabs, Inc.(b)........................ 46,000 3,107,875
-------------
5,358,625
-------------
COMPUTERS (HARDWARE)--4.3%
Dell Computer Corp.(b).................. 75,900 2,808,300
International Business Machines Corp.... 70,000 9,047,500
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C> <C>
COMPUTERS (HARDWARE)--CONTINUED
Sun Microsystems, Inc.(b)............... 31,800 $ 2,190,225
-------------
14,046,025
-------------
COMPUTERS (NETWORKING)--2.2%
Cisco Systems, Inc.(b).................. 110,100 7,101,450
COMPUTERS (SOFTWARE & SERVICES)--4.2%
America Online, Inc.(b)................. 24,400 2,696,200
Microsoft Corp.(b)...................... 109,400 9,866,512
Yahoo!, Inc.(b)......................... 6,100 1,050,725
-------------
13,613,437
-------------
CONSUMER FINANCE--1.1%
Capital One Financial Corp.............. 66,600 3,708,787
DISTRIBUTORS (FOOD & HEALTH)--0.8%
Cardinal Health, Inc.................... 40,400 2,590,650
ELECTRICAL EQUIPMENT--1.8%
General Electric Co..................... 51,900 5,864,700
ELECTRONICS (SEMICONDUCTORS)--1.8%
Intel Corp.............................. 100,500 5,979,750
FINANCIAL (DIVERSIFIED)--4.1%
Citigroup, Inc.......................... 116,925 5,553,938
Freddie Mac............................. 40,800 2,366,400
Morgan Stanley Dean Witter & Co......... 51,700 5,299,250
-------------
13,219,588
-------------
HEALTH CARE (DIVERSIFIED)--2.0%
American Home Products Corp............. 31,700 1,822,750
Bristol-Myers Squibb Co................. 66,800 4,705,225
-------------
6,527,975
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--2.3%
Pfizer, Inc............................. 32,900 3,610,775
Schering-Plough Corp.................... 70,300 3,725,900
-------------
7,336,675
-------------
HEALTH CARE (GENERIC AND OTHER)--0.3%
Mylan Laboratories, Inc................. 38,100 1,009,650
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.1%
Bard (C.R.), Inc........................ 21,000 1,004,063
Baxter International, Inc............... 42,100 2,552,313
-------------
3,556,376
-------------
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C> <C>
HOUSEHOLD PRODUCTS (NON-DURABLE)--1.2%
Procter & Gamble Co. (The).............. 45,200 $ 4,034,100
INSURANCE (LIFE/HEALTH)--0.3%
ReliaStar Financial Corp................ 24,100 1,054,375
INSURANCE (MULTI-LINE)--1.3%
American International Group, Inc....... 35,400 4,144,013
LODGING-HOTELS--0.7%
Carnival Corp........................... 45,300 2,197,050
MANUFACTURING (DIVERSIFIED)--2.0%
Tyco International Ltd.................. 67,400 6,386,150
OIL & GAS (DRILLING & EQUIPMENT)--0.8%
Halliburton Co.......................... 25,500 1,153,875
Schlumberger Ltd........................ 16,800 1,069,950
Transocean Offshore, Inc................ 20,000 525,000
-------------
2,748,825
-------------
OIL (INTERNATIONAL INTEGRATED)--0.7%
Conoco, Inc. Class A.................... 79,600 2,218,850
PERSONAL CARE--0.7%
Gillette Co. (The)...................... 57,200 2,345,200
RETAIL (BUILDING SUPPLIES)--1.2%
Home Depot, Inc. (The).................. 62,400 4,020,900
RETAIL (COMPUTERS & ELECTRONICS)--0.6%
Tandy Corp.............................. 38,400 1,876,800
RETAIL (FOOD CHAINS)--0.9%
Kroger Co. (The)(b)..................... 60,520 1,690,778
Safeway, Inc.(b)........................ 26,400 1,306,800
-------------
2,997,578
-------------
RETAIL (GENERAL MERCHANDISE)--1.6%
Wal-Mart Stores, Inc.................... 104,400 5,037,300
RETAIL (SPECIALTY)--0.9%
Staples, Inc.(b)........................ 88,875 2,749,570
SERVICES (COMMERCIAL & CONSUMER)--0.3%
ServiceMaster Co. (The)................. 46,900 879,375
TELECOMMUNICATIONS (LONG DISTANCE)--4.1%
AT&T Corp............................... 159,966 8,928,102
MCI WorldCom, Inc.(b)................... 48,402 4,174,699
-------------
13,102,801
-------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C> <C>
TELEPHONE--1.1%
SBC Communications, Inc................. 59,200 $ 3,433,600
WASTE MANAGEMENT--1.6%
Waste Management, Inc................... 94,600 5,084,750
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $138,117,946) 185,333,299
- -----------------------------------------------------------------------------------
FOREIGN COMMON STOCKS--3.4%
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.7%
Elan Corp. PLC Sponsored ADR
(Ireland)(b)............................ 84,800 2,353,200
OIL (INTERNATIONAL INTEGRATED)--1.7%
BP Amoco PLC Sponsored ADR (United
Kingdom)................................ 50,353 5,463,300
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.0%
Vodafone AirTouch PLC Sponsored ADR
(United Kingdom)........................ 16,100 3,171,700
- -----------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $8,762,103) 10,988,200
- -----------------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C> <C>
WARRANTS--0.0%
FOREIGN GOVERNMENT--0.0%
Republic of Argentina Warrants
(Argentina)(b).......................... 755 868
- -----------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 868
- -----------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.2%
(IDENTIFIED COST $270,623,555) 317,505,757
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- --------- --------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.7%
COMMERCIAL PAPER--1.7%
CXC, Inc. 5.75%, 7/1/99............. A-1+ $ 5,410 $ 5,410,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $5,410,000) 5,410,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.9%
(IDENTIFIED COST $276,033,555) 322,915,757(a)
Cash and receivables, less liabilities--0.1% 467,614
--------------
NET ASSETS--100.0% $ 323,383,371
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $51,299,022 and gross
depreciation of $5,401,530 for federal income tax purposes. At June 30,
1999, the aggregate cost of securities for federal income tax purpose was
$277,018,265.
(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, 1999,
these securities amounted to a value of $6,006,604 or 1.9% 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.
See Notes to Financial Statements
7
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $276,033,555) $ 322,915,757
Cash 2,445
Short-term investments held as collateral for loaned
securities 2,469,900
Receivables
Interest and dividends 1,871,527
Investment securities sold 1,095,377
Fund shares sold 109,676
Prepaid expenses 6,733
--------------
Total assets 328,471,415
--------------
LIABILITIES
Payables
Collateral on securities loaned 2,469,900
Investment securities purchased 1,986,691
Fund shares repurchased 154,680
Investment advisory fee 168,463
Transfer agent fee 112,085
Distribution fee 72,133
Financial agent fee 20,989
Directors' fee 6,535
Accrued expenses 96,568
--------------
Total liabilities 5,088,044
--------------
NET ASSETS $ 323,383,371
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of common stock $ 259,479,219
Undistributed net investment income 1,059,010
Accumulated net realized gain 15,962,940
Net unrealized appreciation 46,882,202
--------------
NET ASSETS $ 323,383,371
--------------
--------------
CLASS A
Shares of common stock, $1 par value,
50,000,000 shares authorized (Net Assets $311,097,360) 17,809,404
Net asset value per share $17.47
Offering price per share $17.47/(1-4.75%) $18.34
CLASS B
Shares of common stock, $1 par value,
50,000,000 shares authorized (Net Assets $12,286,011) 711,016
Net asset value and offering price per share $17.28
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 3,751,589
Dividends 736,729
Security lending 47,268
Foreign taxes withheld (6,747)
-------------
Total investment income 4,528,839
-------------
EXPENSES
Investment advisory fee 1,050,418
Distribution fee, Class A 389,277
Distribution fee, Class B 58,921
Financial agent fee 119,754
Transfer agent 199,533
Printing 58,232
Custodian 21,105
Registration 16,129
Professional 11,999
Directors 7,875
Miscellaneous 3,122
-------------
Total expenses 1,936,365
-------------
NET INVESTMENT INCOME 2,592,474
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 16,888,026
Net change in unrealized appreciation (depreciation) on
investments (7,051,961)
-------------
NET GAIN ON INVESTMENTS 9,836,065
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,428,539
-------------
-------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Allocation Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
6/30/99 Year Ended
(Unaudited) 12/31/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 2,592,474 $ 4,664,553
Net realized gain (loss) 16,888,026 16,549,036
Net change in unrealized appreciation
(depreciation) (7,051,961) 37,970,099
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 12,428,539 59,183,688
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (2,121,097) (4,386,234)
Net investment income, Class B (54,113) (82,422)
Net realized gains, Class A (1,820,608) (21,922,429)
Net realized gains, Class B (72,385) (803,938)
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (4,068,203) (27,195,023)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (184,273
and 1,803,964 shares, respectively) 3,192,615 29,452,632
Net asset value of shares issued from
reinvestment of distributions
(194,439 and 1,395,511 shares,
respectively) 3,332,677 22,778,819
Cost of shares repurchased (1,292,268
and 4,476,479 shares, respectively) (22,341,485) (72,799,537)
------------- -------------
Total (15,816,193) (20,568,086)
------------- -------------
CLASS B
Proceeds from sales of shares (73,239
and 83,659 shares, respectively) 1,250,823 1,329,444
Net asset value of shares issued from
reinvestment of distributions
(6,502 and 50,302 shares,
respectively) 110,286 813,797
Cost of shares repurchased (60,737 and
156,318 shares, respectively) (1,041,217) (2,499,565)
------------- -------------
Total 319,892 (356,324)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS (15,496,301) (20,924,410)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (7,135,965) 11,064,255
NET ASSETS
Beginning of period 330,519,336 319,455,081
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$1,059,010 AND $641,746,
RESPECTIVELY] $ 323,383,371 $ 330,519,336
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 9
<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 YEAR ENDED DECEMBER 31,
6/30/99 -------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.03 $ 15.43 $ 15.52 $ 15.98 $ 14.82 $ 15.48
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.15 0.25 0.30 0.31 0.45 0.34
Net realized and unrealized gain
(loss) 0.51 2.80 2.81 1.10 2.22 (0.69)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.66 3.05 3.11 1.41 2.67 (0.35)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.12) (0.24) (0.30) (0.29) (0.52) (0.31)
Dividends from net realized gains (0.10) (1.21) (2.90) (1.58) (0.99) (0.001)
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.22) (1.45) (3.20) (1.87) (1.51) (0.311)
----- ----- ----- ----- ----- -----
Change in net asset value 0.44 1.60 (0.09) (0.46) 1.16 (0.66)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 17.47 $ 17.03 $ 15.43 $ 15.52 $ 15.98 $ 14.82
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) 3.92%(4) 20.38% 20.68% 8.78% 18.23% (2.26)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $311,097 $318,847 $308,524 $309,678 $361,526 $335,177
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.17%(3) 1.17%(6) 1.17% 1.21% 1.21% 1.24%
Net investment income 1.63%(3) 1.51% 1.68% 1.78% 2.67% 2.18%
Portfolio turnover 50%(4) 144% 355% 275% 184% 225%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED DECEMBER 31, INCEPTION
6/30/99 ----------------------------------------------------- 10/24/94 TO
(UNAUDITED) 1998 1997 1996 1995 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.87 $ 15.30 $ 15.43 $ 15.89 $ 14.79 $ 14.98
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.08 0.12 0.18 0.19 0.30(2) 0.07
Net realized and unrealized gain
(loss) 0.51 2.78 2.77 1.09 2.22 (0.09)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.59 2.90 2.95 1.28 2.52 (0.02)
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.08) (0.12) (0.18) (0.16) (0.43) (0.17)
Dividends from net realized gains (0.10) (1.21) (2.90) (1.58) (0.99) --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.18) (1.33) (3.08) (1.74) (1.42) (0.17)
----- ----- ----- ----- ----- -----
Change in net asset value 0.41 1.57 (0.13) (0.46) 1.10 (0.19)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 17.28 $ 16.87 $ 15.30 $ 15.43 $ 15.89 $ 14.79
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) 3.52%(4) 19.53% 19.74% 7.95% 17.31% (0.12)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $12,286 $11,673 $10,931 $9,594 $8,046 $1,328
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.92%(3) 1.92%(6) 1.92% 1.96% 1.97% 2.26%(3)
Net investment income 0.89%(3) 0.75% 0.92% 1.01% 1.88% 1.74%(3)
Portfolio turnover 50%(4) 144% 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.
(6) For the year ended December 31, 1998, the ratios of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratios would not significantly
differ.
10
See Notes to Financial Statements
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED)
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.
11
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED) (CONTINUED)
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.
G. LOAN AGREEMENTS:
The Fund may invest in direct debt instruments which are interests in amounts
owed 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, 1999, the
Fund had loaned securities with a market value of $22,927,822 and received
collateral of $23,447,931 of which $2,469,900 is cash collateral.
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.
2. INVESTMENT ADVISORY FEE 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;
0.60% of such value between $1 billion and $2 billion; and 0.55% of such value
in excess of $2 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 $7,771 for Class A shares and deferred sales
charges of $7,939 for Class B shares for the six months ended June 30, 1999. 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, 1999, $100,617 was retained by the
Distributor, $322,838 was paid to unaffiliated participants and $24,743 was paid
to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, 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, 1999, transfer
agent fees were $199,533 of which PEPCO retained $91,159 which is net of the
fees paid to State Street.
At June 30, 1999, PHL and affiliates held 66 Class A shares and 10,949 Class B
shares of the Fund with a combined value of $190,352.
3. PURCHASE AND SALE OF SECURITIES
During the six months ended June 30, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $101,784,824 and $145,584,747, respectively. Purchases and sales of
long-term U.S. Government and agency securities amounted to $55,480,188 and
$20,931,777, respectively.
12
<PAGE>
PHOENIX STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED) (CONTINUED)
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.
This report is not authorized for distribution to prospective investors in the
Phoenix Strategic Allocation 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.
13
<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
Steven L. Colton, Vice President
Robert S. Driessen, Vice President
Christopher J. Kelleher, 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
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
World Wide Web Address:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
PRSRT STD
U.S. Postage
PAID
Springfield, MA
Permit No 444
[LOGO]
PHOENIX
INVESTMENT PARTNERS
PXP 462(8/99)
