AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 2000.
REGISTRATION NOS. 33-9069
811-1442
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 20 [X]
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 21 [X]
(CHECK APPROPRIATE BOX OR BOXES)
------------
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)
C/O PHOENIX EQUITY PLANNING CORPORATION
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER)
------------
Pamela S. Sinofsky
Assistant Vice President and
Assistant Counsel
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph a)(1)
[ ] on pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
================================================================================
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
CROSS REFERENCE SHEET PURSUANT TO RULE 495(A)
<TABLE>
<CAPTION>
PART A
INFORMATION REQUIRED IN PROSPECTUS
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
- ----------------------------- ------------------
<S> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies,
and Related Risks...................................... Investment Risk and Return Summary; Additional
Investment Techniques
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things to Know When Selling Shares; Account
Policies; Investor Services; Tax Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
<TABLE>
<CAPTION>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ----------------------------- -------------------------------------------
<S> <C>
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund................................... Management of the Fund
14. Control Persons and Principal Holders of Securities...... Management of the Fund
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER THE
APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
<PAGE>
Phoenix Investment Partners
Prospectus
May 1, 2000
- -------- Oakhurst
Phoenix-Oakhurst
Strategic Allocation Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or
disapproved of these securities or
determined if this prospectus is
truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus contains important
information that you should know
before investing in the Phoenix-Oakhurst
Strategic Allocation Fund, Inc.
[logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
TABLE OF CONTENTS
================================================================================
Investment Risk and Return Summary........................................ 1
Fund Expenses............................................................. 5
Additional Investment Techniques.......................................... 6
Management of the Fund.................................................... 7
Pricing of Fund Shares.................................................... 8
Sales Charges............................................................. 9
Your Account.............................................................. 11
How to Buy Shares......................................................... 13
How to Sell Shares........................................................ 13
Things You Should Know When Selling Shares................................ 14
Account Policies.......................................................... 15
Investor Services......................................................... 17
Tax Status of Distributions............................................... 17
Financial Highlights...................................................... 18
Additional Information.................................................... 20
[arrow] PHOENIX-
OAKHURST
STRATEGIC
ALLOCATION
FUND, INC.
<PAGE>
INVESTMENT RISK AND RETURN SUMMARY
================================================================================
INVESTMENT OBJECTIVE
Phoenix-Oakhurst Strategic Allocation Fund, Inc. has an investment objective to
provide the highest total return consistent with reasonable risk. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund invests principally in stocks, bonds and other debt securities
with a credit rating within the four highest rating categories,
including obligations issued by corporations, governments and
municipalities, and money market instruments. The fund may invest any
amount or proportion of assets in each of these three types of
securities and the adviser may adjust the mix of investments when, in
the adviser's opinion, an adjustment will enable the fund to capitalize
on perceived variations in return potential based upon changes in
economic and market conditions.
[arrow] Equity securities are selected based on both quantitative and
fundamental factors. Price to earnings, price to sales, cash flow
ratios and a company's earnings and revenue growth rates are some of
the quantitative criteria considered. The adviser also considers
current industry conditions and a company's future growth prospects.
The adviser then attempts to construct an equity portfolio that seeks
to outperform the Standard and Poor's 500 Composite Stock Price Index
("S&P 500").
[arrow] Fixed-income securities are selected using a "sector rotation"
approach. The adviser seeks to adjust the portion of fund investment in
various "sectors" (such as municipals, asset-backeds and corporate high
yields) and the selections within sectors to obtain higher relative
returns. The adviser selects those sectors that it believes offer
attractive values. Securities within sectors are selected based on
general economic and financial conditions and the issuer's business,
management, cash, assets, earnings and stability. Securities selected
for investment are those that the adviser believes offer the best
potential for total return based on risk-to-reward tradeoff.
[arrow] Interest rate risk is managed by a duration neutral strategy. The
adviser attempts to maintain the duration of the fixed income portion
of the fund at a level similar to that of its benchmark. Duration
measures the interest rate sensitivity of a fixed income security by
assessing and weighting the present value of the security's payment
pattern. Generally, the longer the maturity the greater the duration
and therefore the greater effect interest rate changes have on the
price of the security. By maintaining the duration of the fund at a
level similar to that of the fund's fixed income benchmark, the Lehman
Brothers Aggregate Bond Index, the adviser believes that the fund's
exposure to interest rate risk is less than that of a fund that
attempts to predict future interest rate
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 1
<PAGE>
changes. On March 31, 2000 the modified adjusted duration of the Lehman
Brothers Aggregate Bond Index was 4.93 years.
[arrow] Fixed income securities selected for fund investment may be of any
maturity. However, the adviser attempts to maintain a maturity
composition similar to that of its benchmark in an effort to reduce the
portfolio's exposure to interest rate risk. Maturity composition refers
to the percentage of securities within specific maturity ranges as well
as the aggregate weighted average portfolio maturity. On March 31, 2000
the maturity of the Lehman Brothers Aggregate Bond Index was 8.88
years.
[arrow] Stocks that have dropped 15% or more in value relative to the S&P 500,
that are in the bottom 20% of their quantitative ranking or that have
reached the adviser's target sell price are analyzed for potential sale
out of the fund's portfolio. Bonds are generally sold when the adviser
believes the issue has realized its value or to take advantage of
attractive values in other types of securities.
[arrow] The fund's investment strategies may lead to a high portfolio turnover
rate. High portfolio turnover rates may increase costs to the fund, may
negatively affect fund performance, and may increase capital gains
distributions, resulting in greater tax liability to you.
Temporary Defensive Strategy: When, in the belief of the adviser, adverse market
conditions warrant, the fund may invest a significant portion of fund assets in
U.S. Government securities. When this happens, the fund may not achieve its
investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer
2 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
maturities, the net asset value of the fund may experience greater price
fluctuations in response to changes in interest rates than funds that hold only
securities with short-term maturities. Prices of longer-term securities are
affected more by interest rate changes than prices of shorter-term securities.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating the greater
chance the issuer will be unable to make such payments when due.
LONG-TERM MATURITIES
Fixed income securities with longer maturities may be subject to greater price
fluctuations due to interest rate, tax law and general market changes.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee principal and interest will be
timely paid to holders of the securities. The entities do not guarantee that the
value of fund shares will increase. In addition, not all U. S. Government
securities are backed by the full faith and credit of the United States.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Oakhurst Strategic Allocation Fund, Inc. The bar chart shows
changes in the fund's Class A Shares performance from year to year over a
10-year period.(1) The table below shows how the fund's average annual returns
compare to those of a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 3
<PAGE>
STRATEGIC ALLOCATION FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN(%)
1990 4.45
1991 28.62
1992 10.32
1993 10.49
1994 -2.26
1995 18.23
1996 8.78
1997 20.68
1998 20.38
1999 10.97
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 16.05% (quarter ending
December 31, 1998) and the lowest return for a quarter was (5.66)% (quarter
ending September 30, 1998). Year-to-date performance (through March 31, 2000) is
1.88%.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
(for the periods ending 12/31/99)(1) One Year Five Years Ten Years Class A Class B
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares(3) 4.59% 14.34% 12.08% -- --
- ------------------------------------------------------------------------------------------------------------------
Class B Shares 6.14% 14.83% -- -- 14.23%
- ------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite 21.14% 28.66% 18.25% -- 27.54%
Stock Price Index(4)
- ------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond 11.55% 18.82% 13.34% -- 7.57%(6)
Index(5)
- ------------------------------------------------------------------------------------------------------------------
Balanced Benchmark(7) 11.55% 18.82% 13.34% -- 17.92%
- ------------------------------------------------------------------------------------------------------------------
Lipper Analytical Services Flexible 9.83% 16.47% 12.28% -- 15.48%
Portfolio Index(8)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class B Shares since October 24, 1994.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The S&P 500 Composite Stock Price Index is a measure of stock market total
return performance. The S&P 500's performance does not reflect sales charges.
(5) The Lehman Brothers Aggregate Bond Index is an unmanaged but commonly used
measure of bond performance. It is a combination of several Lebman Brothers
fixed income indices. The Index's performance does not reflect sales charges.
(6) Index performance since 10/31/94.
(7) The Balanced Benchmark is a composite index made up of 55% of the S&P 500
Composite Stock Price Index return, 35% of the Lehman Brothers Aggregate Bond
Index return and 10% of the 90-day U.S. Treasury bill return. The index's
performance does not reflect sales charges.
(8) The Lipper Analytical Services Flexible Portfolio Index is an average of the
largest mutual funds within the flexible portfolio category; the 5- and 10-year
returns are derived from compounding the yearly returns. Performance is based on
the reinvestment of all distributions and does not reflect the effects of sales
charges.
4 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
FUND EXPENSES
================================================================================
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM
YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
----------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.65% 0.65%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.30% 0.30%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.20% 1.95%
===== =====
</TABLE>
- ----------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 5
<PAGE>
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $690 $934 $1,197 $1,946
- --------------------------------------------------------------------------------
Class B $598 $812 $1,052 $2,080
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $198 $612 $1,052 $2,080
- --------------------------------------------------------------------------------
ADDITIONAL INVESTMENT TECHNIQUES
================================================================================
In addition to the Principal Investment Strategies and Principal Risks, the fund
may engage in the following investment techniques:
FOREIGN INVESTING
The fund may invest up to 25% of its net assets in securities of foreign
(non-U.S.) issuers. Foreign markets and currencies may not perform as well as
U.S. markets and dividends and other income payable on foreign securities may be
subject to foreign taxes.
FINANCIAL FUTURES AND RELATED OPTIONS
The fund may use financial futures contracts and related options for hedging
purposes. Futures and options involve market risk in excess of their value and
may not be as liquid as other securities.
DERIVATIVES
The fund may write exchange traded, covered call options and purchase put and
call options on securities and securities indices, and may enter into futures
contracts and related options. Up to 100% of the value of the total assets of
the fund may be subject to written call options. The fund may also enter into
swap agreements relating to interest rates and securities indices. The funds may
use these techniques to hedge against changes in interest rates, foreign
currency exchange rates, changes in securities prices or other factors affecting
the value of their investments, or as part of their overall investment
technique. If the adviser fails to correctly predict these changes, the funds
can lose money. Derivatives transactions may be less liquid than other
securities and the counterparty to such transaction may not perform as expected.
In addition, purchasing call or put options involves the risk that a fund may
lose the premium it paid plus transaction costs. Futures and options involve
market risk in excess of their value.
6 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
The fund may also invest in mortgage-backed and asset-backed securities. Early
payoffs on the underlying loans in mortgage-backed and asset-backed securities
may result in the fund receiving less income than originally anticipated. The
variability in prepayments will tend to limit price gains when interest rates
drop and exaggerate price declines when interest rates rise. In the event of
high prepayments, the fund may be required to invest proceeds at lower interest
rates, causing the fund to earn less than if the prepayments had not occurred.
REPURCHASE AGREEMENTS
The fund may invest up to 10% of its assets in repurchase agreements. Default or
insolvency of the other party presents risks to the fund.
ILLIQUID SECURITIES
The fund may invest up to 15% of its net assets in illiquid securities. Illiquid
securities may include repurchase agreements with maturities of greater than
seven days. The inability of the fund to dispose of illiquid securities in a
timely manner and at a fair price at a time when it might be necessary or
advantageous to do so may harm the fund.
SECURITIES LENDING
The fund may lend up to 25% of its market or fair value of its total assets. If
the borrower is unwilling or unable to return the borrowed securities when due,
the fund can suffer losses.
The fund may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the fund.
MANAGEMENT OF THE FUND
================================================================================
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 fund companies totaling 38 mutual funds, as
subadviser to two fund companies totaling three mutual funds and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program, the general operations, and the
day-to-day management of the fund. Phoenix manages the fund's assets to conform
with the investment policies as described
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 7
<PAGE>
in this prospectus. The fund pays Phoenix a monthly investment management fee
that is accrued daily against the value of the fund's net assets at the
following rates.
- --------------------------------------------------------------------------------
$1+ billion
$1st billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.65% 0.60% 0.55%
- --------------------------------------------------------------------------------
During the fund's last fiscal year, the fund paid total management fees of
$2,080,156. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1999 was 0.65%.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the Fund are made by a team of equity
investment professionals and a team of fixed income investment professionals.
PRICING OF FUND SHARES
================================================================================
HOW IS THE SHARE PRICE DETERMINED?
The fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, the fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing by the total number of outstanding shares of the fund.
Asset Value: The fund's investments are valued at market value. If market
quotations are not available, the fund determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
8 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities that are deducted for the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class' net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
The net asset value per share of each class of the fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the NYSE is closed for trading. If
the fund holds securities that are traded on foreign exchanges that trade on
weekends or other holidays when the fund does not price its shares, the net
asset value of the fund's shares may change on days when shareholders will not
be able to purchase or redeem the fund's shares.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of fund distributions will be in full and fractional shares that
are purchased at the closing net asset value on the next business day on which
the fund's net asset value is calculated following the dividend record date.
SALES CHARGES
================================================================================
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
The fund presently offers two classes of shares. Each class of shares has
different sales and distribution charges (see "Fund Expenses" previously in this
prospectus). The fund has adopted distribution and service plans allowed under
Rule 12b-1 of the Investment Company Act of 1940 that authorize the fund to pay
distribution and service fees for the sale of its shares and for services
provided to shareholders.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 9
<PAGE>
sales charges of one class may be more or less than the initial sales charge and
accumulated distribution and service fees of another class of shares bought at
the same time. Because distribution and service fees are paid out of the fund's
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 5.75% of the offering price (6.10% of the amount
invested). The sales charge may be reduced or waived under certain conditions.
Class A Shares are not subject to any charges by the fund when redeemed. Class A
Shares have lower distribution and service fees (0.25%) and pay higher dividends
than any other class.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first 5
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B Shares" below.
This charge declines to 0% over a period of 5 years and may be waived under
certain conditions. Class B shares have higher distribution and service fees
(1.00%) and pay lower dividends than Class A Shares. Class B Shares
automatically convert to Class A Shares eight years after purchase. Purchase of
Class B Shares may be inappropriate for any investor who may qualify for reduced
sales charges of Class A Shares and anyone who is over 85 years of age. The
underwriter may decline purchases in such situations.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Sales Charges: Combination Purchase Privilege" in the Statement
of Additional Information). Shares purchased based on the automatic reinvestment
of income dividends or capital gains distributions are not subject to any sales
charges. The sales charge is divided between your investment dealer and the
fund's underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
SALES CHARGE AS
A PERCENTAGE OF
------------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
- --------------------------------------------------------------------------------
Under $50,000 5.75% 6.10%
$50,000 but under $100,000 4.75 4.99
$100,000 but under $250,000 3.75 3.90
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
10 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES
Class B Shares are purchased without an initial sales charge; however, shares
sold within a specified time period are subject to a declining contingent
deferred sales charge ("CDSC") at the rates listed below. The sales charge will
be multiplied by the then current market value or the initial cost of the shares
being redeemed, whichever is less. No sales charge will be imposed on increases
in net asset value or on shares purchased through the reinvestment of income
dividends or capital gains distributions. To minimize the sales charge, shares
not subject to any charge will be redeemed first, followed by shares held the
longest time. To calculate the amount of shares owned and time period held, all
Class B Shares purchased in any month are considered purchased on the last day
of the preceding month.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
YEAR 1 2 3 4 5 6+
CDSC 5% 4% 3% 2% 2% 0%
YOUR ACCOUNT
================================================================================
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
o $500 for all other accounts.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 11
<PAGE>
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
STEP 2.
Your second choice will be what class of shares to buy. The fund offers three
classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
o Receive dividends in additional shares and capital gain
distributions in cash;
o Receive dividends in cash and capital gain distributions in
additional shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
12 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
HOW TO BUY SHARES
================================================================================
- ------------------------------------ -------------------------------------------
TO OPEN AN ACCOUNT
- ------------------------------------ -------------------------------------------
Through a financial advisor Contact your advisor. Some advisors may
charge a fee and may set different minimum
investments or limitations on buying
shares.
- ------------------------------------ -------------------------------------------
Through the mail Complete a New Account Application and send
it with a check payable to the fund. Mail
them to: State Street Bank, P.O. Box 8301,
Boston, MA 02266-8301.
- ------------------------------------ -------------------------------------------
By Federal Funds wire Call us at (800)243-1574 (press 1, then 0).
- ------------------------------------ -------------------------------------------
Through express delivery Complete a New Account Application and send
it with a check payable to the fund. Send
them to: Boston Financial Data Services,
Attn: Phoenix Funds, 66 Brooks Drive,
Braintree, MA 02184.
- ------------------------------------ -------------------------------------------
By Investo-Matic Complete the appropriate section on the
application and send it with your initial
investment payable to the fund. Mail them
to: State Street Bank, P.O. Box 8301,
Boston, MA 02266-8301.
- ------------------------------------ -------------------------------------------
By telephone exchange Call us at (800)243-1574 (press 1, then 0).
----------------------------------- -------------------------------------------
HOW TO SELL SHARES
================================================================================
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. In the case of a Class B Share redemption, you will be
subject to the applicable deferred sales charge, if any, for such shares.
Subject to certain restrictions, shares may be redeemed by telephone or in
writing. In addition, shares may be sold through securities dealers, brokers or
agents who may charge customary commissions or fees for their services. The fund
does not charge any redemption fees. Payment for shares redeemed is made within
seven days; however, redemption proceeds will not be disbursed until each check
used for purchases of shares has been cleared for payment by your bank, which
may take up to 15 days after receipt of the check.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 13
<PAGE>
- ------------------------------------ -------------------------------------------
TO SELL SHARES
- ------------------------------------ -------------------------------------------
Through a financial advisor Contact your advisor. Some advisors may
charge a fee and may set different minimums
on redemptions of accounts.
- ------------------------------------ -------------------------------------------
Through the mail Send a letter of instruction and any share
certificates (if you hold certificate
shares) to: State Street Bank, P.O. Box
8301, Boston, MA 02266-8301. Be sure to
include the registered owner's name, fund
and account number, number of shares or
dollar value you wish to sell.
- ------------------------------------ -------------------------------------------
Through express delivery Send a letter of instruction and any share
certificates (if you hold certificate
shares) to: Boston Financial Data Services,
Attn: Phoenix Funds, 66 Brooks Drive,
Braintree, MA 02184. Be sure to include the
registered owner's name, fund and account
number.
- ------------------------------------ -------------------------------------------
By telephone For sales up to $50,000, requests can be
made by calling (800)243-1574.
- ------------------------------------ -------------------------------------------
By telephone exchange Call us at (800)243-1574 (press 1, then 0).
- ------------------------------------ -------------------------------------------
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
================================================================================
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by anyone but the shareholder(s)
of record. Transfers between broker-dealer "street" accounts are governed by the
accepting broker-dealer. Questions regarding this type of transfer should be
directed to your financial advisor. Redemption requests will not be honored
until all required documents in proper form have been received. To avoid delay
in redemption or transfer, shareholders having questions about specific
requirements should contact the fund's Transfer Agent at (800) 243-1574.
REDEMPTIONS BY MAIL
[arrow] If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instructions if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address on
record.
14 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
Send a clear letter of instructions with a signature guarantee when any
of these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last 60
days.
o You want the proceeds to go to a different name or address than on
the account.
[arrow] If you are selling shares held in a corporate or fiduciary account,
please contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature on your request must be made by an eligible
guarantor institution as defined by the fund's Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
ACCOUNT POLICIES
================================================================================
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A or Class B shares, you can purchase
Class A Shares of any fund at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not more. Send your written
request to State Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call
us at (800)243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B shareholders who have had the
contingent deferred sales charge waived because they are in the Systematic
Withdrawal Program are not eligible for this reinstatement privilege.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 15
<PAGE>
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should carefully read the prospectus of the fund into which you want to
exchange before deciding to make an exchange. You can obtain a prospectus from
your financial advisor or by calling us at (800)243-4361 or accessing our Web
site at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of shares;
e.g., Class A for Class A.
o Exchanges may be made by phone ((800)243-1574) or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
o Because excessive trading can hurt fund performance and harm other
shareholders, the fund reserves the right to temporarily or
permanently end exchange privileges or reject an order from anyone
who appears to be attempting to time the market, including investors
who request more than one exchange in any 30-day period. The fund's
underwriter has entered into agreements with certain timing firms
permitting them to exchange by telephone. These privileges are
limited, and the fund distributor has the right to reject or suspend
them.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800)243-4361.
16 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
INVESTOR SERVICES
================================================================================
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
TAX STATUS OF DISTRIBUTIONS
================================================================================
The fund plans to make distributions from net investment income at least
annually and to distribute net realized capital gains, if any, at least
annually. Distributions of short-term capital gains and net investment income
are taxable to shareholders as ordinary income. Long-term capital gains, if any,
distributed to shareholders and which are designated by the fund as capital
gains distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 17
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
These tables are intended to help you understand the fund's financial
performance for the past five years. Certain information reflects financial
results for a single fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment in the fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, independent accountants. Their
report, together with the fund's financial statements, are included in the
fund's most recent Annual Report, which is available upon request.
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.03 $15.43 $15.52 $15.98 $14.82
INCOME FROM INVESTMENT OPERATIONS(2)
Net investment income (loss) 0.32 0.25 0.30 0.31 0.45
Net realized and unrealized gain 1.51 2.80 2.81 1.10 2.22
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.83 3.05 3.11 1.41 2.67
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.35) (0.24) (0.30) (0.29) (0.52)
Dividends from net realized gains (0.95) (1.21) (2.90) (1.58) (0.99)
------ ------ ------ ------ ------
Total distributions (1.30) (1.45) (3.20) (1.87) (1.51)
------ ------ ------ ------ ------
Change in net asset value 0.53 1.60 (0.09) (0.46) 1.16
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $17.56 $17.03 $15.43 $15.52 $15.98
====== ====== ====== ====== ======
Total return(1) 10.97% 20.38% 20.68% 8.78% 18.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $307,130 $318,847 $308,524 $309,678 $361,526
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.20%(4) 1.17%(3) 1.17% 1.21% 1.21%
Net investment income 1.75% 1.51% 1.68% 1.78% 2.67%
Portfolio turnover 69% 144% 355% 275% 184%
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) 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.
(3) For the year ended December 31, 1998, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(4) For the year ended December 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would be 1.19% for Class A.
18 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
================================================================================
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.87 $15.30 $15.43 $15.89 $14.79
INCOME FROM INVESTMENT OPERATIONS(3)
Net investment income (loss) 0.18 0.12 0.18 0.19 0.30(2)
Net realized and unrealized gain 1.50 2.78 2.77 1.09 2.22
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.68 2.90 2.95 1.28 2.52
LESS DISTRIBUTIONS ------ ------ ------ ------ ------
Dividends from net investment income (0.24) (0.12 ) (0.18) (0.16) (0.43)
Dividends from net realized gains (0.95) (1.21 ) (2.90) (1.58) (0.99)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.19) (1.33 ) (3.08) (1.74) (1.42)
------ ------ ------ ------ ------
Change in net asset value 0.49 1.57 (0.13) (0.46) 1.10
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $17.36 $16.87 $15.30 $15.43 $15.89
====== ====== ====== ====== ======
Total return(1) 10.14% 19.53 % 19.74% 7.95% 17.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $12,114 $11,673 $10,931 $9,594 $8,046
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.95%(5) 1.92 %(4) 1.92% 1.96% 1.97%
Net investment income 1.01% 0.75 % 0.92% 1.01% 1.88%
Portfolio turnover 69% 144 % 355% 275% 184%
</TABLE>
- ----------
(1) Maximum sales load is not reflected in the total return calculation.
(2) Computed using average shares outstanding.
(3) 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.
(4) For the year ended December 31, 1998, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(5) For the year ended December 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would be 1.94% for Class B.
Phoenix-Oakhurst Strategic Allocation Fund, Inc. 19
<PAGE>
ADDITIONAL INFORMATION
================================================================================
STATEMENT OF ADDITIONAL INFORMATION
The fund has filed a Statement of Additional Information about the fund, dated
May 1, 2000, with the Securities and Exchange Commission. The Statement contains
more detailed information about the fund. It is incorporated into this
prospectus by reference and is legally part of the prospectus. You may obtain a
free copy of the Statement:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
[arrow] through its internet site (http://www.sec.gov),
[arrow] by visiting its Public Reference Room in Washington, DC,
[arrow] by writing to its Public Reference Section, Washington, DC 20549-0102
(a fee may be charged), or
[arrow] by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the fund's performance from January 1 through December
31. You may request a free copy of the fund's Annual and Semiannual Reports:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 33-9069 and 811-1442 [recycle logo] Printed on recycled paper
using soybean ink
20 Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
For more information about
Phoenix mutual funds, please call
your financial representative or
contact us at 1-800-243-4361 or
www.phoenixinvestments.com
PXP 453 (5/00)
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix-Oakhurst Strategic Allocation Fund, Inc. (the "Fund"), dated May 1,
2000, and should be read in conjunction with it. The Fund's Prospectus may be
obtained by calling Phoenix Equity Planning Corporation ("Equity Planning") at
(800) 243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
The Fund .................................................................. 1
Investment Objectives and Policies ........................................ 1
Investment Restrictions ................................................... 6
Performance Information.................................................... 8
Performance Comparisons ................................................... 8
Portfolio Turnover ........................................................ 9
Portfolio Transactions and Brokerage....................................... 9
The Investment Adviser .................................................... 10
Net Asset Value ........................................................... 11
How to Buy Shares ......................................................... 11
Alternative Purchase Arrangements ......................................... 12
Investor Account Services ................................................. 14
How to Redeem Shares ...................................................... 15
Tax Sheltered Retirement Plans ............................................ 16
Dividends, Distributions and Taxes ........................................ 17
The Distributor ........................................................... 18
Distribution Plans......................................................... 19
Management of the Fund..................................................... 20
Additional Information .................................................... 26
Appendix................................................................... 28
Customer Service: (800)243-1574
Marketing: (800)243-4361
Telephone Orders: (800)367-5877
Telecommunication Device (TTY): (800)243-1926
PXP458 (5/00)
<PAGE>
THE FUND
Phoenix-Oakhurst Strategic Allocation Fund, Inc. (the "Fund") is an open-end
management investment company which was organized under Massachusetts law in
1966 as a Massachusetts corporation.
The Fund's Prospectus describes the investment objectives of the
Phoenix-Oakhurst Strategic Allocation Fund, Inc. (the "Fund") and summarizes the
investment policies and investment techniques that the Fund will employ in
seeking to achieve its investment objective. The following discussion
supplements the description of the Fund's investment policies and investment
techniques in the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fund is deemed to be a fundamental policy and
may not be changed without the approval of the shareholders of the Fund.
Investment restrictions described in this Statement of Additional Information
are fundamental policies of the Fund and may not be changed as to the Fund
without the approval of the Fund's shareholders.
WRITING AND PURCHASING OPTIONS ON SECURITIES AND SECURITIES INDICES
Call options on securities and securities indices written by the Fund
normally will have expiration dates between three and nine months from the date
written. The exercise price of a call option written utilizing this investment
technique may be below, equal to or above the current market value of the
underlying security or securities index at the time the option is written.
During the option period, the Fund may be assigned an exercise notice by the
broker-dealer through which the call option was sold, requiring the Fund to
deliver the underlying security (or cash in the case of securities index calls)
against payment of the exercise price. This obligation is terminated upon the
expiration of the option period or at such earlier time as the Fund effects a
closing purchase transaction. A closing purchase transaction cannot be effected
with respect to an option once the Fund has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/Silver Index.
The Mid Cap and International Funds may write call options and purchase call and
put options on these and any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by the Fund, to prevent an underlying
security from being called, or to enable the Fund to write another call option
with either a different exercise price or expiration date or both. The Fund may
realize a net gain or loss from a closing purchase transaction, depending upon
whether the amount of the premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. If a call option
written by the Fund expires unexercised, the Fund will realize a gain in the
amount of the premium on the option less the commission paid.
The option activities of the Fund may increase its portfolio turnover rate
and the amount of brokerage commissions paid. The Fund will pay a commission
each time it purchases or sells a security in connection with the exercise of an
option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
LIMITATIONS ON OPTIONS ON SECURITIES AND SECURITIES INDICES
The Fund may write call options only if they are covered and remain covered
for as long as the Fund is obligated as a writer. Thus, if the Fund writes a
call option on an individual security, the Fund must own the underlying security
or other securities that are acceptable for a pledged account at all times
during the option period. The Fund will write call options on indices only to
hedge in an economically appropriate way portfolio securities which are not
otherwise hedged with options or financial futures contracts. Call options on
securities indices written by the Fund will be "covered" by identifying the
specific portfolio securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance with
clearing corporation and exchange rules. In the case of an index call option
written by the Fund, the Fund will be required to deposit qualified securities.
A "qualified security" is a security against which the Fund has not written a
call option and which has not been hedged by the Fund by the sale of a financial
futures contract. If at the close of business on any day the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts, the Fund will deposit an amount of
cash or liquid assets equal in value to the difference. In addition, when the
Fund writes a call on an index which is "in-the-
1
<PAGE>
money" at the time the call is written, the Fund will pledge with its custodian
bank any asset, including equity securities and non-investment grade debt so
long as the asset is liquid, unencumbered and marked to market daily equal in
value to the amount by which the call is "in-the-money" times the multiplier
times the number of contracts to collateralize fully the position and thereby
ensure that it is not leveraged. Any amount pledged may be applied to the Fund's
obligation to segregate additional amounts in the event that the market value of
the qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts.
The Fund may invest up to 5% of its total assets in exchange-traded call and
put options on securities and securities indices. The Fund may sell a call
option or a put option which it has previously purchased prior to the purchase
(in the case of a call) or the sale (in the case of a put) of the underlying
security. Any such sale of a call option or a put option would result in a net
gain or loss, depending on whether the amount received on the sale is more or
less than the premium and other transaction costs paid.
In connection with the Fund's qualifying as a regulated investment company
under the Internal Revenue Code of 1986, other restrictions on the Fund's
ability to enter into option transactions may apply from time to time. See
"Dividends, Distributions and Taxes."
RISKS RELATING TO OPTIONS ON SECURITIES
During the option period, the writer of a call option has, in return for the
premium received on the option, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline. The writer has no control over the time within the
option period when it may be required to fulfill its obligation as a writer of
the option.
The risk of purchasing a call option or a put option is that the Fund may
lose the premium it paid plus transaction costs, if the Fund does not exercise
the option and is unable to close out the position prior to expiration of the
option.
An option position may be closed out on an exchange only if the exchange
provides a secondary market for an option of the same series. Although the Fund
will write and purchase options only when PIC believes that a liquid secondary
market will exist for options of the same series, there can be no assurance that
a liquid secondary market will exist for a particular option at a particular
time and that the Fund, if it so desires, can close out its position by
effecting a closing transaction. If the writer of a covered call option is
unable to effect a closing purchase transaction, it cannot sell the underlying
security until the option expires or the option is exercised. Accordingly, a
covered call writer may not be able to sell the underlying security at a time
when it might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options in
general or of particular options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. PIC believes that the position limits established by
the exchanges will not have any adverse impact upon the Fund.
RISKS OF OPTIONS ON SECURITIES INDICES
Because the value of an index option depends upon movements in the level of
the index rather than movements in the price of a particular security, whether
the Fund will realize a gain or loss on the purchase or sale of an option on an
index depends upon movements in the level of prices in the market generally or
in an industry or market segment (depending on the index option in question)
rather than upon movements in the price of an individual security. Accordingly,
successful use by the Fund of options on indices will be subject to PIC's
ability to predict correctly movements in the direction of the market generally
or in the direction of a particular industry. This requires different skills and
techniques than predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, the Fund would not be able
to close out options which it had written or purchased and, if restrictions on
exercise were imposed, might be unable to exercise an option it purchased, which
would result in substantial losses to the Fund. However, it is the Fund's policy
to write or purchase options only on indices which include a sufficient number
of securities so that the likelihood of a trading halt in the index is
minimized.
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Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Fund will write call options only on indices which meet the
interim described above.
Price movements in securities held by the Fund will not correlate perfectly
with movements in the level of the index and, therefore, the Fund bears the risk
that the price of the securities held by the Fund might not increase as much as
the level of the index. In this event, the Fund would bear a loss on the call
which would not be completely offset by movements in the prices of the
securities held by the Fund. It is also possible that the index might rise when
the value of the securities held by the Fund does not. If this occurred, the
Fund would experience a loss on the call which would not be offset by an
increase in the value of its portfolio and might also experience a loss in the
market value of its portfolio securities.
Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, the Fund will be required to liquidate
securities in order to satisfy the exercise. Because an exercise must be settled
within hours after receiving the notice of exercise, if the Fund fails to
anticipate an exercise, it may have to borrow from a bank (in an amount not
exceeding 50% of the Fund's total assets) pending settlement of the sale of
securities in its portfolio and pay interest on such borrowing.
When the Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell its securities. As with options
on its securities, the Fund will not learn that a call has been exercised until
the day following the exercise date but, unlike a call on a security where the
Fund would be able to deliver the underlying security in settlement, the Fund
may have to sell some of its securities in order to make settlement in cash, and
the price of such securities may decline before they can be sold.
If the Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" the Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although the Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may use financial futures contracts and related options to hedge
against changes in the market value of its portfolio securities or securities
which it intends to purchase. Hedging is accomplished when an investor takes a
position in the futures market opposite to the investor's cash market position.
There are two types of hedges--long (or buying) and short (or selling) hedges.
Historically, prices in the futures market have tended to move in concert with
(although in inverse relation to) cash market prices, and prices in the futures
market have maintained a fairly predictable relationship to prices in the cash
market. Thus, a decline in the market value of securities or the value of
foreign currencies may be protected against to a considerable extent by gains
realized on futures contracts sales. Similarly, it is possible to protect
against an increase in the market price of securities which the Fund may wish to
purchase in the future by purchasing futures contracts.
The Fund may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange- or
board-traded put and call options on financial futures contracts as a hedge
against anticipated changes in the market value of its portfolio securities or
securities which it intends to purchase. Financial futures contracts consist of
interest rate futures contracts and securities index futures contracts. A public
market presently exists in interest rate futures contracts covering long-term
U.S. Treasury bonds, U.S. Treasury notes, three-month U.S. Treasury bills and
GNMA certificates. Securities index futures contracts are currently traded with
respect to the Standard & Poor's 500 Composite Stock Price Index and such other
broad-based stock market indices as the New York Stock Exchange Composite Stock
Index and the Value Line Composite Stock Price Index. A clearing corporation
associated with the exchange or board of trade on which a financial futures
contract trades assumes responsibility for the completion of transactions and
also guarantees that open futures contracts will be performed.
In contrast to the situation in which the Fund purchases or sells a security,
no security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract (although an obligation to deliver or receive the
underlying security in the future is created by such a contract). Initially,
when it enters into a financial futures contract, the Fund will be required to
deposit in a pledged account with the Fund's custodian bank an amount of cash or
U.S. Treasury bills. This amount is known as an initial margin and is in the
nature of a performance bond or good faith deposit on the contract. The current
initial margin deposit required per contract is approximately 5% of the contract
amount. Brokers may establish deposit requirements higher
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than this minimum. However, subsequent payments, called variation margin, will
be made to and from the account on a daily basis as the price of the futures
contract fluctuates. This process is known as marking to market.
The writer of an option on a futures contract is required to deposit a margin
balance pursuant to requirements similar to those applicable to futures
contracts. Upon exercise of an option on a futures contract, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
The Fund will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly, and will be in addition to
those paid for direct purchases and sales of securities.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may not engage in transactions in financial futures contracts or
related options for speculative purposes but only as a hedge against anticipated
changes in the market value of portfolio securities or securities which it
intends to purchase or foreign currencies. The Fund may not purchase or sell
financial futures contracts or related options if, immediately thereafter, the
sum of the amount of initial margin deposits on the Fund's existing futures and
related options positions and the premiums paid for related options would exceed
5% of the market value of the Fund's total assets after taking into account
unrealized profits and losses on any such contracts. At the time of purchase of
a futures contract or a call option on a futures contract, any asset, including
equity securities and non-investment-grade debt so long as the asset is liquid,
unencumbered and marked to market daily equal to the market value of the futures
contract minus the Fund's initial margin deposit with respect thereto will be
deposited in a pledged account with the Fund's custodian bank to collateralize
fully the position and thereby ensure that it is not leveraged.
The extent to which the Fund may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal Revenue
Code of 1986 for qualification as a regulated investment company. See
"Dividends, Distributions and Taxes."
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS
Positions in futures contracts and related options may be closed out on an
exchange if the exchange provides a secondary market for such contracts or
options. The Fund will enter into a futures or futures related option position
only if there appears to be a liquid secondary market. However, there can be no
assurance that a liquid secondary market will exist for any particular option or
futures contract at any specific time. Thus, it may not be possible to close out
a futures or related option position. In the case of a futures position, in the
event of adverse price movements the Fund would continue to be required to make
daily margin payments. In this situation, if the Fund has insufficient cash to
meet daily margin requirements it may have to sell portfolio securities to meet
its margin obligations at a time when it may be disadvantageous to do so. In
addition, the Fund may be required to take or make delivery of the securities
underlying the futures contracts it holds. The inability to close out futures
positions also could have an adverse impact on the Fund's ability to hedge its
positions effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also limit a hedger's opportunity to benefit fully from
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause the Fund to incur additional brokerage
commissions and may cause an increase in the Fund's turnover rate.
The successful use of futures contracts and related options depends on the
ability of the Adviser to forecast correctly the direction and extent of market
movements within a given time frame. To the extent market prices remain stable
during the period a futures contract or option is held by the Fund or such
prices move in a direction opposite to that anticipated, the Fund may realize a
loss on the hedging transaction which is not offset by an increase in the value
of its portfolio securities. As a result, the Fund's total return for the period
may be less than if it had not engaged in the hedging transaction.
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Utilization of futures contracts by the Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities or currencies which are being hedged. If the price of
the futures contract moves more or less than the price of the securities or
currency being hedged, the Fund will experience a gain or loss which will not be
completely offset by movements in the price of the securities or currency. It is
possible that, where the Fund has sold futures contracts to hedge against
decline in the market, the market may advance and the value of securities held
in the Fund may decline. If this occurred, the Fund would lose money on the
futures contract and would also experience a decline in value in its portfolio
securities. Where futures are purchased to hedge against a possible increase in
the prices of securities before the Fund is able to invest its cash (or cash
equivalents) in securities (or options) in an orderly fashion, it is possible
that the market may decline; if the Fund then determines not to invest in
securities (or options) at that time because of concern as to possible further
market decline or for other reasons, the Fund will realize a loss on the futures
that would not be offset by a reduction in the price of the securities
purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such cases,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities or
currencies rather than to engage in closing transactions because such action
would reduce the liquidity of the futures market. In addition, because, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the underlying securities market,
increased participation by speculators in the futures market could cause
temporary price distortions. Because of the possibility of price distortions in
the futures market and of the imperfect correlation between movements in the
prices of securities or foreign currencies and movements in the prices of
futures contracts, a correct forecast of market trends may still not result in a
successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for the Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund (i.e., the loss
of the premium paid) while the purchase or sale of the futures contract would
not have resulted in a loss, such as when there is no movement in the price of
the underlying securities.
REPURCHASE AGREEMENTS
Repurchase agreements will be entered into only with commercial banks,
brokers and dealers considered by the Fund to be creditworthy. The Directors of
the Fund will monitor the Fund's repurchase agreement transactions periodically
and with the Adviser will consider standards which the Adviser will use in
reviewing the creditworthiness of any party to a repurchase agreement with the
Fund. No more than an aggregate of 10% of the Fund's total assets, at the time
of investment, will be invested in repurchase agreements having maturities of no
more than seven days. In addition, the Fund may invest up to 15% of its net
assets in illiquid securities including repurchase agreements having maturities
greater than seven days and other investments subject to legal or contractual
restrictions on resale, or for which there are not readily available market
quotations.
The use of repurchase agreements involves certain risks. For example, if the
seller under a repurchase agreement defaults on its obligation to repurchase the
underlying instrument at a time when the value of the instrument has declined,
the Fund may incur a loss upon its disposition. If the seller becomes insolvent
and subject to liquidation or reorganization under bankruptcy or other laws, a
bankruptcy court may determine that the underlying instrument is collateral for
a loan by the Fund and therefore is subject to sale by the trustee in
bankruptcy. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying instrument. While the Fund's
Directors acknowledge these risks, it is expected that they can be controlled
through careful monitoring procedures.
BELOW-INVESTMENTS GRADE SECURITIES
The Fund may invest up to 5% of its total assets in below-investment grade
securities. Investments in below-investment grade securities (see Appendix for
an explanation of the various ratings) generally provide greater income (leading
to the name "high-yield" securities) and opportunity for capital appreciation
than investments in higher quality securities, but they also typically entail
greater price volatility and principal and income risk. These securities are
regarded as predominantly speculative as to the issuer's continuing ability to
meet principal and interest payment obligations. The markets for these
securities are relatively new and many of the outstanding high-yield securities
have not endured a major business recession. A long-term track record on default
rates, such as that for investment-grade corporate bonds, does not exist for
these securities. Analysis of the creditworthiness of issuers of lower-quality
debt securities may be more complex than for issuers of higher-quality debt
securities.
High-yield securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment-grade securities.
The prices of high-yield securities have been found to be less sensitive to
interest-rate changes than higher-quality investments, but more sensitive to
adverse economic developments or individual corporate developments. A
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projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in high-yield securities prices because the
advent of a recession could lessen the ability of a highly-leveraged company to
make principal and interest payments. If an issuer of high-yield securities
defaults, in addition to risking payment of all or a portion of interest and
principal, the Funds may incur additional expenses to seek recovery. Market
prices of high-yield securities structured as zero-coupon or pay-in-kind
securities are affected to a greater extent by interest rate changes, and
therefore tend to be more volatile than securities that pay interest
periodically and in cash.
The secondary market on which high-yield securities are traded may be less
liquid than the market for higher-grade securities. Less liquidity could
adversely affect the price at which a Fund could sell a high-yield security and
could adversely affect the daily net asset value of the Fund's shares. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high-yield securities,
especially in a thinly-traded market. When secondary markets for these
securities are less liquid than the market for higher-grade securities, it may
be more difficult to value the high-yield securities because the valuation may
require more research and judgment may play a greater role in valuation because
of the lack of reliable, objective data.
LENDING PORTFOLIO SECURITIES
The Fund may lend portfolio securities to broker-dealers and other financial
institutions in amounts up to 25% of the market or other fair value of its total
assets, provided that such loans are callable at any time by the Fund and are at
all times secured by collateral held by the Fund at least equal to the market
value, determined daily, of the loaned securities. The Fund will continue to
receive any income on the loaned securities, and at the same time will earn
interest on cash collateral (which will be invested in short-term debt
obligations) or a securities lending fee in the case of collateral in the form
of U.S. Government securities. A loan may be terminated at any time by either
the Fund or the borrower. Upon termination of a loan, the borrower will be
required to return the securities to the Fund, and any gain or loss in the
market price during the period of the loan would accrue to the Fund. If the
borrower fails to maintain the requisite amount of collateral, the loan will
automatically terminate, and the Fund may use the collateral to replace the
loaned securities while holding the borrower liable for any excess of the
replacement cost over the amount of the collateral.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, to permit the exercise of such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan. The Fund may pay reasonable finders,
administrative and custodial fees in connection with loans of its portfolio
securities.
As with any extension of credit, there are risks of delay in recovery of the
loaned securities and in some cases loss of rights in the collateral should the
borrower of the securities fail financially. However, loans of portfolio
securities will only be made to firms considered by the Fund to be creditworthy
and when the consideration to be earned justifies the attendant risks.
FOREIGN SECURITIES
The Fund may purchase foreign securities, including those issued by foreign
branches of U.S. banks. In any event, such investments in foreign securities
will be less than 25% of the Fund's net assets. Investments in foreign
securities, particularly those of non-governmental issuers, involve
considerations which are not ordinarily associated with investing in domestic
issues. These considerations include changes in currency rates, currency
exchange control regulations, the possibility of expropriation, the
unavailability of financial information, the difficulty of interpreting
financial information prepared under foreign securities markets, the impact of
political, social or diplomatic developments, difficulties in invoking legal
process abroad and the difficulty of assessing economic trends in foreign
countries.
The Fund may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of a
foreign custodian. The amount of cash or cash equivalents maintained in the care
of eligible foreign custodians will be limited to an amount reasonably necessary
to effect the Fund's foreign securities transactions. The use of a foreign
custodian invokes considerations which are not ordinarily associated with
domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign custodian,
inability to recover assets that are lost while under the control of the foreign
custodian, and the impact of political, social or diplomatic developments.
INVESTMENT RESTRICTIONS
The investment restrictions described below are fundamental policies and may
not be changed as to the Fund without the approval of the lesser of (i) a
majority of the Fund's outstanding shares or (ii) 67% of the Fund's shares
represented at a meeting of Fund shareholders at which the holders of 50% or
more of the Fund's outstanding shares are present. The Fund may not:
(1) Make short sales of securities, unless at the time of sale the Fund owns
an equal amount of such securities.
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(2) Purchase securities on margin, except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities. The deposit or payment by the Fund of initial or
maintenance margin in connection with financial futures contracts or
related options transactions is not considered the purchase of a security
on margin.
(3) Write, purchase or sell puts, calls or combinations thereof, except that
the Fund may (a) write exchange-traded covered call options on portfolio
securities and enter into closing purchase transactions with respect to
such options, (b) purchase exchange-traded call options and put options,
provided that the premiums on all outstanding call and put options do not
exceed 5% of its total assets, and enter into closing sale transactions
with respect to such options, and (c) engage in financial futures
contracts and related options transactions, provided that the sum of the
initial margin deposits on the Fund's existing futures and related
options positions and the premiums paid for related options would not
exceed 5% of its total assets.
(4) Borrow in excess of 5% of the market or other fair value of its total
assets, or pledge its assets to an extent greater than 5% of the market
or other fair value of its total assets. Any such borrowings shall be
from banks and shall be undertaken only as a temporary measure for
extraordinary or emergency purposes. Deposits in escrow in connection
with the writing of covered call options, or the purchase or sale of
financial futures contracts and related options are not deemed to be a
pledge or other encumbrance.
(5) Underwrite the securities of other issuers, except to the extent that in
connection with the disposition of its portfolio securities, the Fund may
be deemed to be an underwriter.
(6) Concentrate its assets in the securities of issuers which conduct their
principal business activities in the same industry. This restriction does
not apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
(7) Make any investment in real estate, real estate limited partnerships,
commodities or commodities contracts, except that the Fund may (a)
purchase or sell readily marketable securities which are secured by
interests in real estate, or issued by companies which deal in real
estate, including real estate investment and mortgage investment trusts,
and (b) engage in financial futures contracts and related options
transactions, provided that the sum of the initial margin deposits on the
Fund's futures and related options positions and the premiums paid for
related options would not exceed 5% of the Fund's total assets.
(8) Make loans, except that the Fund may (a) invest up to 10% of its total
assets in repurchase agreements of a type regarded as "liquid" which are
fully collateralized as to principal and interest and which are entered
into only with commercial banks, brokers and dealers considered by the
Fund to be creditworthy and (b) loan its portfolio securities in amounts
up to one-third of the market or other fair value of its total assets.
(9) Purchase securities of other investment companies, except that the Fund
may make such a purchase (a) in the open market involving no commission
or profit to a sponsor or dealer (other than the customary broker's
commission), provided that immediately thereafter (i) not more than 10%
of the Fund's total assets would be invested in such securities and (ii)
not more than 3% of the voting stock of another investment company would
be owned by the Fund, or (b) as part of a merger, consolidation, or
acquisition of assets.
(10) Invest more than 5% of its total assets in the securities of any one
issuer (except the U.S. Government or purchase more than 10% of the
outstanding voting securities or more than 10% of the securities of any
class of any one issuer.
(11) Invest in securities of any issuer if any officer or Director of the Fund
or any officer or director of the Adviser owns more than 1/2 of 1% of the
outstanding securities of such issuer and all such persons own in the
aggregate more than 5% of the securities of such issuer.
(12) Invest in the aggregate more than 5% of its total assets in the
securities of any issuers which have (with predecessors) a record of less
than three years of continuous operations.
(13) Invest in warrants or rights except where acquired in units or attached
to other securities.
(14) Purchase an illiquid security such as a restricted security (including
repurchase agreements of a type regarded as "illiquid") or a security for
which market value quotations are not readily available if as a result of
such purchase more than 15% of the Fund's net assets would be invested in
such securities.
(15) Invest in interests in oil, gas, or other mineral exploration or
development programs.
(16) Issue senior securities as defined in the Investment Company Act of 1940
except to the extent that it is permissible to borrow money from banks
pursuant to the Fund's investment restrictions regarding the borrowing of
money.
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If a percentage restriction on investment or utilization of assets as set
forth is adhered to at the time an investment is made, a later change in the
percentage resulting from a change in the value or costs of the Fund's assets
will not be considered a violation of the restriction except as provided in (11)
above.
PERFORMANCE INFORMATION
Performance information for the Fund (and Class of Fund) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature may
be expressed as "average annual total return" and "total return."
The Fund's average annual total return quotation is computed in accordance
with a standardized method prescribed by rules of the Securities and Exchange
Commission. The average annual total return for the Fund for a specific period
is found by first taking a hypothetical $1,000 investment ("initial investment")
in the Fund's shares on the first day of the period, adjusting to deduct the
maximum sales charge, and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Fund have been reinvested at net asset value
on the reinvestment dates during the period.
Calculation of a Fund's total return is subject to a standardized formula.
Total return performance for a specific period is calculated by first taking an
investment ("initial investment") in the Fund's shares on the first day of the
period, either adjusting or not adjusting to deduct the maximum sales charge,
and computing the "redeemable value" of that investment at the end of the
period. The total return percentage is then determined by subtracting the
initial investment from the redeemable value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends by the Fund have been
reinvested at net asset value on the reinvestment dates during the period. Total
return may also be shown as the increased dollar value of the hypothetical
investment over the period. Total return calculations that do not include the
effect of the sales charge would be reduced if such charge were included.
The manner in which total return will be calculated for public use is
described above. The following table illustrates average annual total return for
the Fund for the 1, 5 and 10 year periods ended December 31, 1999.
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
PERIODS ENDED
---------------------------------------------------
SINCE INCEPTION
FUND 1 YEAR 5 YEAR 10 YEAR 10/24/94 TO 12/31/99
---- ------ ------ ------- --------------------
Class A 4.59% 14.34% 12.08% N/A
Class B 6.14% 14.83% N/A 14.23%
Performance information reflects only the performance of a hypothetical
investment in each class during the particular time period on which the
calculations are based. Performance information should be considered in light of
the Fund's investment objectives and policies, characteristics and quality of
the portfolio, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
The Fund also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Fund, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
PERFORMANCE COMPARISONS
The Fund or Class of Fund may, from time to time, include in advertisements
containing total return the ranking of those performance figures relative to
such figures for groups of mutual funds having similar investment objectives as
categorized by ranking services such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Weisenberger Financial Services, Inc., and rating
services such as Morningstar, Inc. Additionally, the Fund may compare its
performance results to other investment or savings vehicles (such as
certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week, Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's Investment
Adviser, The Wall Street Journal, New York Times, Consumer Reports, Registered
Representative, Financial Planning, Financial Services Weekly, Financial World,
U.S. News and World Report, Standard and Poor's The Outlook, Investor's Daily
and Personal Investor. The total return may be used to compare the performance
of the Fund against certain widely acknowledged outside standards or indices for
stock and bond market performance, such as the Standard & Poor's 500 Composite
Stock Price
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Index (the "S&P 500"), Dow Jones Industrial Average, Europe Australia Far East
Index ("EAFE"), Consumer Price Index, Lehman Brothers Corporate Index and Lehman
Brothers T-Bond Index. The S&P 500 is a commonly quoted measure of stock market
performance and represents common stocks of companies of varying sizes segmented
across 90 different industries which are listed on the New York Stock Exchange,
the American Stock Exchange and traded over the NASDAQ National Market System.
PORTFOLIO TURNOVER
The Fund pays brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by the Fund and thus indirectly by its shareholders. It
may also result in the realization of larger amounts of short-term capital
gains, which are taxable to shareholders as ordinary income. If such rate of
turnover exceeds 100%, the Fund will pay more in brokerage commissions than
would be the case if it had lower portfolio turnover rates. Historical turnover
rates can be found under the heading "Financial Highlights" located in the
Fund's Prospectus.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In effecting fund transactions for the Fund, each adviser adheres to the
Fund's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The determination of
what may constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations including, without
limitation, the overall direct net economic result to the Fund (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, availability of the broker to stand ready
to execute possibly difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by each adviser and the Subadviser in determining the overall
reasonableness of brokerage commissions paid by the Fund.
The adviser may cause the Fund to pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission which
another broker or dealer would have charged for effecting that transaction if
such adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker. As provided in Section 28(e) of the Securities Exchange
Act of 1934, "brokerage and research services" include advising as to the value
of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and research
services provided by brokers to the Fund are considered to be in addition to and
not in lieu of services required to be performed by each adviser under its
contract with the Fund and may benefit both the Fund and other accounts of such
adviser. Conversely, brokerage and research services provided by brokers to
other accounts of an adviser may benefit the Fund.
Some fund transactions are, subject to the Conduct Rules of the National
Association of Securities Dealers, Inc. and subject to obtaining best prices and
executions, effected through dealers (excluding Equity Planning) who sell shares
of the Fund.
The Fund has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Fund. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs share pro rata based on the
Fund's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Directors will annually review these procedures or as frequently as shall appear
appropriate.
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The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Funds, to buy and sell securities for the Funds, provided they
have the execution capability and that their commission rates are comparable to
those of other unaffiliated broker/dealers. Directors of PXP Securities Corp. or
its affiliates receive benefits from the Funds as a result of its usual and
customary brokerage commissions that PXP Securities Corp. may receive for acting
as broker to the Funds in the purchase and sale of portfolio securities. The
investment advisory agreement does not provide for a reduction of the advisory
fee by any portion of the brokerage fees generated by portfolio transactions of
the Funds that PXP Securities Corp. may receive.
For the fiscal years ended December 31, 1997, 1998 and 1999 brokerage
commissions paid by the Fund on Fund transactions totaled $1,346,891, $577,648
and $191,959, respectively. In the fiscal year ended December 31, 1999, no
brokerage commissions were paid to affiliates for portfolio transactions.
Brokerage commissions of $169,447 paid during the fiscal year ended December 31,
1999, were paid on fund transactions aggregating $209,153,518 executed by
brokers who provided research and other statistical and factual information.
THE INVESTMENT ADVISER
The investment adviser to the Fund is Phoenix Investment Counsel, Inc.
("PIC"), which is located at 56 Prospect Street, Hartford, Connecticut
06115-0480. PIC also acts as the investment adviser for 14 other mutual funds,
as subadviser to three mutual funds, and as adviser to institutional clients.
PIC has acted as an investment adviser for over sixty years. PIC was originally
organized in 1932 as John P. Chase, Inc. As of December 31, 1999, PIC had
approximately $25.7 billion in assets under management. Philip R. McLoughlin, a
Director and officer of the Fund, is a director of PIC. All other executive
officers of the Fund are officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). PXP is a New York Stock Exchange traded
company that provides investment management and related services to
institutional investors, corporations and individuals through operating
subsidiaries. Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life")
of Hartford, Connecticut is a majority shareholder of PXP. Phoenix Home Life is
in the business of writing ordinary and group life and health insurance and
annuities. Its principal offices are located at One American Row, Hartford,
Connecticut, 06115-2520. Equity Planning, a mutual fund distributor, acts as the
national distributor of the Fund's shares and as Financial Agent of the Fund.
The principal office of Equity Planning is located at 100 Bright Meadow
Boulevard, Enfield, Connecticut, 06082.
Phoenix Investment Partners, Ltd., is a publicly-traded independent
registered investment advisory firm and has served investors for over 70 years.
As of December 31, 1999, PXP had over $64.6 billion in assets under management
through its investment partners: Aberdeen Fund Managers, Inc. (Aberdeen) in
Aberdeen, London, Singapore and Fort Lauderdale; Duff & Phelps Investment
Management Co. (Duff & Phelps) in Chicago and Cleveland; Roger Engemann &
Associates, Inc. (Engemann) in Pasadena; Seneca Capital Management LLC (Seneca)
in San Francisco; Zweig/Glaser Advisers (Zweig) in New York; and Phoenix
Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in
Hartford, Sarasota and Scotts Valley, CA, respectively.
The contract between the Fund and the Adviser provides that the Adviser shall
furnish the Fund investment advice, certain administrative services, office
space and facilities, and shall pay the compensation of all officers and
employees of the Fund. All expenses (other than those specifically referred to
as being borne by the Adviser) incurred in the operation of the Fund, including,
among others, taxes, brokerage fees and commissions, fees of Directors who are
not full-time employees of the Adviser or any of its affiliates, charges of
custodians, transfer and dividend disbursing agents and registrars, bookkeeping,
auditing and legal expenses, expenses of insurance premiums for fidelity and
other coverage and extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to, the reasonable and proportionate cost
of any reorganization or acquisition of assets and the cost of legal proceedings
to which the Fund is a party, will be borne by the Fund.
The contract between the Fund and the Adviser provides that, as compensation
for its services to the Fund, the Adviser is entitled to a fee, payable within
five days after the end of each fiscal month, at the annual rate of 0.65% of the
average of the aggregate daily net asset values of the Fund up to $1 billion;
0.60% of such value between $1 billion and $2 billion; and 0.55% of such value
in excess of $2 billion. It also provides that the Fund will reimburse the
Adviser on a cost basis in the event the Adviser provides any services
(excluding printing) involved in maintaining registrations of the Fund and of
its shares with the Securities and Exchange Commission or involved in the
preparation of shareholder reports.
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For the fiscal years ended December 31, 1997, 1998 and 1999 the Adviser
received fees totaling, $2,109,677, $2,049,531 and $2,080,156, respectively, and
it was not necessary that the Adviser reimburse ordinary operating expenses of
the Fund.
The contract between the Fund and the Adviser continues from year to year so
long as (1) such continuance is specifically approved at least annually by the
Board of Directors of the Fund or by a vote of a majority of the outstanding
shares of the Fund and (2) such continuance or any renewal and the terms of such
contract have been approved by the vote of a majority of Directors of the Fund
who are not interested persons, as that term is defined in the Investment
Company Act of 1940, of the Fund or the Adviser, cast in person at a meeting
called for the purpose of voting on such approval. It may be terminated without
penalty at any time on sixty days written notice, either by the Board of
Directors of the Fund, by a vote of a majority of the outstanding shares of the
Fund or by the Adviser, and automatically terminates upon its assignment (within
the meaning of said Investment Company Act).
The Fund, its Adviser and Distributor have each adopted a Code of Ethics
pursuant to Rule 17-j1 under the Investment Company Act of 1940. Personnel
subject to the Codes of Ethics may purchase and sell securities for their
personal accounts, including securities that may be purchased, sold or held by
the Fund, subject to certain restrictions and conditions. Generally, personal
securities transactions are subject to preclearance procedures, reporting
requirements and holding period rules. The Codes also restrict personal
securities transactions in private placements, initial public offerings and
securities in which the Fund has a pending order.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of the Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Fund. The net asset value per share of the Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Directors or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place if the Fund invests in foreign
securities contemporaneously with the determination of the prices of the
majority of the portfolio securities. All assets and liabilities initially
expressed in foreign currency values will be converted into United States dollar
values at the mean between the bid and ask quotations of such currencies against
United States dollars as last quoted by any recognized dealer. If an event were
to occur after the value of an investment was so established but before the net
asset value per share was determined, which was likely to materially change the
net asset value, then the instrument would be valued using fair value
considerations by the Directors or their delegates. If at any time the Fund has
investments where market quotations are not readily available, such investments
are valued at the fair value thereof as determined in good faith by the
Directors although the actual calculations may be made by persons acting
pursuant to the direction of the Directors.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Fund
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Fund's net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
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ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange are confirmed at the offering price
effective at that time, provided the order is received by the Authorized Agent
prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Fund, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
Shares would be less than the initial sales charge and accumulated distribution
services fee on Class A Shares purchased at the same time.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to ongoing distribution and services fees at an annual rate
of 0.25% of the Fund's aggregate average daily net assets attributable to the
Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted, in the circumstances and subject to the qualifications described
in the Fund's Prospectus. The purpose of the conversion feature is to relieve
the holders of the Class B Shares that have been outstanding for a period of
time sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fees. Such
conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The five ways in which sales charges may be avoided or reduced are described
below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual fund advised, subadvised or distributed
by the Adviser, Distributor or any of their corporate affiliates (an "Affiliated
Phoenix Fund"); (2) any director or officer, or any full-time employee or sales
representative (for at least 90 days) of the Adviser or Distributor; (3)
registered representatives and employees of securities dealers with whom
Distributor has sales agreements; (4) any qualified retirement plan exclusively
for persons described above; (5) any officer, director or employee of a
corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who
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retires from Phoenix Home Life, Distributor and/or their corporate affiliates;
(9) any account held in the name of a qualified employee benefit plan, endowment
fund or foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund qualified plan; (11)
any Phoenix Home Life separate account which funds group annuity contracts
offered to qualified employee benefit plans; (12) any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge; (13) any fully matriculated student in any U.S. service academy; (14)
any unallocated account held by a third party administrator, registered
investment adviser, Fund company, or bank Fund department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity, if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds, Phoenix-Engemann Fund or
Phoenix-Seneca Fund if, in connection with the purchases or redemption of the
redeemed shares, the investor paid a prior sales charge provided such investor
supplies verification that the redemption occurred within 90 days of the Phoenix
Fund purchase and that a sales charge was paid; (16) any deferred compensation
plan established for the benefit of any Phoenix Fund, Phoenix-Engemann Fund or
Phoenix-Seneca Fund trustee or director; provided that sales to persons listed
in (1) through (15) above are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund; (17) purchasers of Class A
Shares bought through investment advisers and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for their
own accounts or the accounts of their clients; (18) retirement plans and
deferred compensation plans and trusts used to fund those plans (including, for
example, plans qualified or created under sections 401(a), 403(b) or 457 of the
Internal Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the
Distributor for such purchases; (19) 401(k) participants in the Merrill Lynch
Daily K Plan (the "Plan") if the Plan has at least $3 million in assets or 500
or more eligible employees; or (20) clients of investment advisors or financial
planners who buy shares for their own accounts but only if their accounts are
linked to a master account of their investment advisor or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of the investors
described in (17) through (20) may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix Money Market Fund
Series Class A Shares), if made at the same time by the same "person," will be
added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b) plans
for the same employer; (d) multiple accounts (up to 200) under a qualified
employee benefit plan or administered by a third party administrator; or (e)
trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority and
which are held in a fiduciary, agency, custodial or similar capacity, provided
all shares are held of record in the name, or nominee name, of the entity
placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of this or any other Affiliated Phoenix Fund (other than Phoenix Money
Market Fund Series Class A Shares), if made by the same person within a 13-month
period, will be added together to determine whether you are entitled to an
immediate reduction in sales charges. Sales charges are reduced based on the
overall amount you indicate that you will buy under the Letter of Intent. The
Letter of Intent is a mutually non-binding arrangement between you and the
Distributor. Since the Distributor doesn't know whether you will ultimately
fulfill the Letter of Intent, shares worth 5% of the amount of each purchase
will be set aside until you fulfill the Letter of Intent. When you buy enough
shares to fulfill the Letter of Intent, these shares will no longer be
restricted. If, on the other hand, you do not satisfy the Letter of Intent, or
otherwise wish to sell any restricted shares, you will be given the choice of
either buying enough shares to fulfill the Letter of Intent or paying the
difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you do
not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A Shares before
Class C or B Shares, respectively. Oldest shares will be redeemed before selling
newer shares. Any remaining shares will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
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ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B Shares if the
redemption is made (a) within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint tenant
is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to
Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, on
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B
Shares of this or any other Affiliated Phoenix Fund; (g) based on any direct
rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program. If,
as described in condition (a) above, an account is transferred to an account
registered in the name of a deceased's estate, the CDSC will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain subject to the applicable CDSC.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same
Portfolio eight years after they are bought. Conversion will be on the basis of
the then prevailing net asset value of Class A and B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Fund were unable to obtain such assurances, it
might continue to make distributions if doing so would assist in complying with
its general practice of distributing sufficient income to reduce or eliminate
federal taxes otherwise payable by the Fund.
INVESTOR ACCOUNT SERVICES
The Fund offers accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
Broker/dealers may impose their own restrictions and limits on accounts held
through the broker/dealer. Please consult your broker/dealer for account
restriction and limit information.
EXCHANGES. Under certain circumstances, shares of any Phoenix Fund may be
exchanged for shares of the same Class of another Phoenix Fund or any other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Series or Fund, except if made in
connection with the Systematic Exchange privilege. Shareholders may exchange
shares held in book-entry form for an equivalent number (value) of the same
class of shares of any other Affiliated Phoenix Fund, if currently offered. On
exchanges with share classes that carry a contingent deferred sales charge, the
CDSC schedule of the original shares purchased continues to apply. The exchange
of shares is treated as a sale and purchase for federal income tax purposes (see
also "Dividends, Distributions and Taxes").
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund or any other Affiliated Phoenix
Fund automatically on a monthly, quarterly, semiannual or annual basis or may
cancel this privilege at any time. If you maintain an account balance of at
least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated
on the basis of the net asset value of the shares held in a single account), you
may direct that shares be automatically exchanged at predetermined intervals for
shares of the same class of another Affiliated Phoenix Fund. This requirement
does not apply to Phoenix "Self Security" program participants. Systematic
exchanges will be executed upon the close of business on the 10th day of each
month or the
14
<PAGE>
next succeeding business day. Systematic exchange forms are available from the
Distributor. Exchanges will be based upon each Fund's net asset value per share
next computed after the close of business on the 10th day of each month (or next
succeeding business day), without sales charge.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS. If you maintain an account balance of
at least $5,000, or $2,000 for tax qualified retirement benefit plans
(calculated on the basis of the net asset value of the shares held in a single
account), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of one
of the other Phoenix Funds or any other Affiliated Phoenix Fund at net asset
value. You should obtain a current prospectus and consider the objectives and
policies of each Fund carefully before directing dividends and distributions to
another Fund. Reinvestment election forms and prospectuses are available from
Equity Planning. Distributions may also be mailed to a second payee and/or
address. Requests for directing distributions to an alternate payee must be made
in writing with a signature guarantee of the registered owner(s). To be
effective with respect to a particular dividend or distribution, notification of
the new distribution option must be received by the Transfer Agent at least
three days prior to the record date of such dividend or distribution. If all
shares in your account are repurchased or redeemed or transferred between the
record date and the payment date of a dividend or distribution, you will receive
cash for the dividend or distribution regardless of the distribution option
selected.
INVEST-BY-PHONE. This expedited investment service allows a shareholder to
make an investment in an account by requesting a transfer of funds from the
balance of their bank account. Once a request is phoned in, Equity Planning will
initiate the transaction by wiring a request for monies to the shareholder's
commercial bank, savings bank or credit union via Automated Clearing House
(ACH). The shareholder's bank, which must be an ACH member, will in turn forward
the monies to Equity Planning for credit to the shareholder's account. ACH is a
computer based clearing and settlement operation established for the exchange of
electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to 3:00 p.m. (New York time) to place their purchase
request. Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact the
shareholder's bank via ACH with appropriate instructions. The purchase is
normally credited to the shareholder's account the day following receipt of the
verbal instructions. The Fund may delay the mailing of a check for redemption
proceeds of Fund shares purchased with a check or via Invest-by-Phone service
until the Fund has assured itself that good payment has been collected for the
purchase of the shares, which may take up to 15 days. The Fund and Equity
Planning reserve the right to modify or terminate the Invest-by-Phone service
for any reason or to institute charges for maintaining an Invest-by-Phone
account.
SYSTEMATIC WITHDRAWAL PROGRAM. The Systematic Withdrawal Program allows you
to periodically redeem a portion of your account on a predetermined monthly,
quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations stated
below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any applicable
contingent deferred sales charge on all shares redeemed. Accordingly, the
purchase of Class B Shares will generally not be suitable for an investor who
anticipates withdrawing sums in excess of the above limits shortly after
purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during
15
<PAGE>
periods when trading on the Exchange is restricted or during any emergency which
makes it impracticable for the Fund to dispose of its securities or to determine
fairly the value of its net assets or during any other period permitted by order
of the Securities and Exchange Commission for the protection of investors.
Furthermore, the Transfer Agent will not mail redemption proceeds until checks
received for shares purchased have cleared, which may take up to 15 days or more
after receipt of the check. See the Funds' current Prospectus for further
information.
The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B shareholders will be subject to the applicable
deferred sales charge, if any.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Fund which has been in existence for at least
one year and has a value of less than $200 may be redeemed upon the giving of
not less than 30 days written notice to the shareholder mailed to the address of
record. During the 60-day period the shareholder has the right to add to the
account to bring its value to $200 or more. See the Fund's current Prospectus
for more information.
BY MAIL
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Fund redeem the shares. See the Fund's current
Prospectus for more information.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Fund's current Prospectus for
additional information.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Fund may make
payment of the redemption price either in cash or in kind. However, the Fund has
elected to pay in cash all requests for redemption by any shareholder of record,
limited in respect to each shareholder during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of such
period. This election has been made pursuant to Rule 18f-1 under the Investment
Company Act of 1940 and is irrevocable while the Rule is in effect unless the
Securities and Exchange Commission, by order, permits the withdrawal thereof. In
case of a redemption in kind, securities delivered in payment for shares would
be readily marketable and valued at the same value assigned to them in computing
the net asset value per share of the Fund. A shareholder receiving such
securities would incur brokerage costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Fund's current Prospectus for more information.
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping
Service Agreement, the Plan has $3 million or more in assets invested in
broker/dealer funds not advised or managed by Merrill Lynch Asset
Management L.P. ("MLAM") that are made available pursuant to a Service
Agreement between Merrill Lynch and the fund's principal underwriter or
distributor and in funds advised or managed by MLAM (collectively, the
"Applicable Investments");
16
<PAGE>
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs
the Merrill Lynch Recordkeeping Service Agreement, the Plan has $3
million or more in assets, excluding money market funds, invested in
Applicable Investments; or
(iii)the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
QUALIFICATION AS A REGULATED INVESTMENT COMPANY ("RIC")
It is the policy of the Fund to comply with provisions of the Internal
Revenue Code relieving investment companies which distribute substantially all
of their net income (both net investment income and net realized capital gains)
from Federal income tax on the amounts distributed.
To qualify for treatment as a regulated investment company ("RIC") for tax
purposes, the Fund must: (a) derive in each taxable year at least 90% of its
gross income from dividends, interest, payments with respect to security loans
and gains from the sale or other disposition of stock or securities or foreign
currencies and other income (including but not limited to gains from options,
futures and forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; and (b) meet certain diversification
requirements imposed under the Internal Revenue Code at the end of each quarter
of the taxable year.
Income dividends and short-term capital gain distributions, whether received
in shares or in cash, are treated by shareholders as ordinary income for Federal
income tax purposes.
Distributions which are designated by the Fund as long-term capital gains,
whether received in shares or in cash, are taxable to shareholders as long-term
capital gains (regardless of how long the distributee has been a shareholder).
Any loss from the sale of shares held for six months or less will be treated as
long-term capital loss to the extent of any capital gain distributions paid with
respect to such shares.
Any taxable distribution which is declared in December payable to
shareholders of record on any date in December and paid before the next February
1 will be taxable to shareholders in the year declared.
The Fund is required to withhold, for income taxes, 31% of dividends,
distributions and redemption payments if any of the following circumstances
exist: (i) a shareholder fails to provide the Fund with a correct taxpayer
identification number ("TIN"); (ii) the Fund is notified by the Internal Revenue
Service that the shareholder furnished an incorrect TIN; or (iii) the Fund is
notified by the Internal Revenue Service that withholding is required because
the shareholder failed to report the receipt of dividends or interest from other
sources. Withholding may also be required with respect to accounts where the
shareholder fails to certify that (i) the TIN provided is correct and (ii) the
shareholder is not subject to such withholding. However, withholding will not be
required in the case of certain exempt entities nor in the case of those
shareholders who comply with the procedures as set forth by the Internal Revenue
Service. If incorrect information is provided by the shareholder and the
Internal Revenue Service consequently assesses the Fund a penalty, this penalty
will be passed on to the shareholder.
Dividends paid from net investment income and net realized short-term capital
gains to a shareholder who is a non-resident alien individual, a foreign trust
or estate, a foreign corporation or a foreign partnership (a "foreign
shareholder") will be subject to United States withholding tax at a rate of 30%
unless a reduced rate of withholding or a withholding exemption is provided
under applicable treaty law. Foreign shareholders are urged to consult their own
tax advisors concerning the applicability of the United States withholding tax
and any foreign taxes.
The information included in the Prospectus with respect to Dividends,
distributions and Taxes, in conjunction with the foregoing, is a general and
abbreviated summary of applicable provisions of the Internal Revenue Code and
Treasury regulations now in effect as currently interpreted by the courts and
the Internal Revenue Service. The Code and these Regulations, as well as the
current interpretations thereof, may be changed at any time by legislative,
judicial, or administrative action.
17
<PAGE>
Shareholders ordinarily will also be subject to state income taxes on the
dividends and distributions they receive from the Fund. Shareholders are urged
to consult counsel or other competent tax advisers regarding specific questions
as to Federal, state or local taxes.
THE DISTRIBUTOR
Equity Planning, a registered broker-dealer which is an indirect less than
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company, serves as
Distributor of the Fund's shares. Philip R. McLoughlin, a Director and President
of the Fund, is a director and officer of Equity Planning. Michael E. Haylon, an
officer of the Fund, is a director of Equity Planning; and G. Jeffrey Bohne,
Nancy G. Curtiss and William R. Moyer, officers of the Fund, are officers of
Equity Planning.
The Fund and Equity Planning have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Fund shares and the Fund has granted to Equity Planning the exclusive right to
purchase from the Fund and resell, as principal, shares needed to fill
unconditional orders for Fund shares. Equity Planning may sell Fund shares
through its registered representatives or through securities dealers with whom
it has sales agreements. Equity Planning may also sell Fund shares pursuant to
sales agreements entered into with bank-affiliated securities brokers who,
acting as agent for their customers, place orders for Fund shares with Equity
Planning. It is not anticipated that termination of sales agreements with banks
and bank affiliated securities brokers would result in a loss to their customers
or a change in the net asset value per share of the Fund.
For its services under the distribution agreements, Equity Planning receives
sales charges on transactions in Fund shares and retains such charges less the
portion thereof allowed to its registered representatives and to securities
dealers and securities brokers with whom it has sales agreements. In addition,
Equity Planning may receive payments from the Fund pursuant to the Distribution
Plans described below. For the fiscal years ended December 31, 1997, 1998 and
1999, Equity Planning's gross commissions on sales of Fund shares totalled
$186,575, $168,306 and $131,280, respectively, of which the principal
underwriter received net commissions of $133,928, $36,753 and $32,897,
respectively, for its services, the balance being paid to dealers. For the
fiscal year ended October 31, 1999, the Distributor received net commissions of
$12,242 for Class A Shares and deferred sales charges of $20,655 for Class B
Shares.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as described below.
<TABLE>
<CAPTION>
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10% 5.25%
$50,000 but under $100,000 4.75 4.99 4.25
$100,000 but under $250,000 3.75 3.90 3.25
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares sold by such dealers. This sales commission will
not be paid to dealers for sales of Class B Shares purchased by 401(k)
participants of the Merrill Lynch Daily K Plan due to a waiver of the CDSC for
these Plan participants' purchases. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Fund and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Fund
through distribution fees, service fees or transfer agent fees or in some cases,
the Distributor may pay certain fees from its own profits and resources. From
its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time, pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an
18
<PAGE>
account held in the name of a qualified employee benefit plan with at least 100
eligible employees, 0.50% on the next $3 million, plus 0.25% on the amount in
excess of $6 million; and (d) excluding purchases as described in (c) above, pay
broker/dealers an amount equal to 1% of the amount of Class A Shares sold above
$1 million but under $3 million, 0.50% on the next $3 million, plus 0.25% on the
amount in excess of $6 million. If part or all of such investment, including
investments by qualified employee benefit plans, is subsequently redeemed within
one year of the investment date, the broker/dealer will refund to the
Distributor such amounts paid with respect to the investment. In addition, the
Distributor may pay the entire applicable sales charge on purchases of Class A
Shares to selected dealers and agents. From its own resources, the Distributor
intends to pay the following additional compensation to Merrill Lynch, Pierce,
Fenner & Smith, Incorporated: 0.25% on sales of Class A and B Shares, 0.10% on
sales of Class A shares sold at net asset value, and 0.10% annually on the
average daily net asset value of fund shares on which Merrill Lynch is broker of
record and which such shares exceed the amount of assets on which Merrill Lynch
is broker of record as of July 1, 1999. Any dealer who receives more than 90% of
a sales charge may be deemed to be an "underwriter" under the Securities Act of
1933. Equity Planning reserves the right to discontinue or alter such fee
payment plans at any time.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Fund and as such
performs administrative, bookkeeping and pricing functions for the Fund. For its
services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented costs to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Fund, at the following incremental
annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Fund, PFPC, Inc. also charges minimum fees and additional fees to each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for the fund which Equity Planning serves as administrative agent. PFPC, Inc.
agreed to a modified fee structure and waived certain charges. Because PFPC,
Inc.'s arrangement would have favored smaller funds over larger funds, Equity
Planning reallocates PFPC, Inc.'s overall asset-based charges among all funds
for which it serves as administrative agent on the basis of the relative net
assets of each fund. As a result, the PFPC, Inc. charges to the Fund are
expected to be slightly less than the amount that would be found through direct
application of the table illustrated above. For services to the Fund during the
fiscal years ended December 31, 1997, 1998 and 1999, the Financial Agent
received fees of $149,370, $205,260 and $252,080, respectively.
DISTRIBUTION PLANS
The Fund has adopted separate amended and restated distribution plans under
Rule 12b-1 of the 1940 Act for each class of shares of the Fund (the "Class A
Plan," the "Class B Plan," and collectively the "Plans"). The Plans permit the
Fund to pay for services and to reimburse the Distributor for expenses incurred
in connection with activities intended to promote the sale of shares of each
class of shares of the Fund.
Pursuant to the Plans, the Fund shall pay the Distributor for actual expenses
of the Distributor of 0.25% of the average daily net assets of the Fund's
average daily net assets for providing services to shareholders, including
assistance with inquiries related to shareholder accounts (the "Service Fee").
Pursuant to the Class B Plan, the Fund may reimburse the Distributor monthly for
actual expenses of the Distributor up to 0.75% annually of the average daily net
assets of the Fund's Class B Shares.
Expenditures under the Plans shall consist of: (i) commissions to sales
personnel for selling shares of the Fund (including underwriting fees and
financing expenses incurred in connection with the payment of commissions); (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
which have entered into agreements with the Distributor in the form of the
Dealer Agreement for Phoenix Funds for services rendered in connection with the
sale and distribution of shares of the Funds; (iv) payment of expenses incurred
in sales and promotional activities, including advertising expenditures related
to the Funds; (v) the costs of preparing and distributing promotional materials;
(vi) the cost of printing the Fund's Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Directors determine are reasonably calculated to
result in the sale of shares of the Fund.
19
<PAGE>
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
Each Plan requires that at least quarterly the Directors of the Fund review a
written report with respect to the amounts expended under the Plans and the
purposes for which such expenditures were made. While the Plans are in effect,
the Fund will be required to commit the selection and nomination of candidates
for Directors who are not interested persons of the Fund to the discretion of
other Directors who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is approved annually in advance
by votes of the majority of both (a) the Board of Directors of the Fund and (b)
the Rule 12b-1 Directors, cast in person at a meeting called for the purpose of
voting on the Plan and any agreements related to the Plan.
For the fiscal year ended December 31, 1999 the Fund paid Rule 12b-1 Fees in
the amount of $889,293, of which the Distributor received $200,357, unaffiliated
broker-dealers received $640,715 and W.S. Griffith & Co., Inc., an affiliate,
received $48,221. The Rule 12b-1 payments were used for (1) compensating
dealers, $743,314; (2) compensating sales personnel, $208,731; (3) advertising,
$199,413; (4) printing and mailing of prospectuses to other than current
shareholders, $1,918; (5) service costs, $57,867; and (6) other, $173,488. The
Distributor's expenses from selling and servicing Class B Shares may be more
than the payments received from contingent deferred sales charges collected on
redeemed shares and from the Fund under the Class B Plan. Those expenses may be
carried over and paid in future years. At December 31, 1999, the end of the last
Plan year, Distributor had incurred unreimbursed expenses under the Class B Plan
of $672,835 (equal to 0.21% of the Fund's net assets) which have been carried
over into the present Class B Plan year.
No interested person of the Fund and no Director who is not an interested
person of the Fund, as that term is defined in the Investment Company Act of
1940, had any direct or indirect financial interest in the operation of the
Plans.
MANAGEMENT OF THE FUND
The Fund is an open-end management investment company known as a mutual fund.
The Directors of the Fund ("Directors") are responsible for the overall
supervision of the Fund and perform the various duties imposed on Directors by
the Investment Company Act of 1940 and Massachusetts General Corporation Law.
DIRECTORS AND OFFICERS
The Directors and Officers of the Fund and their business affiliations for
the past five years are set forth below and, unless otherwise noted, the address
of each Director and executive officer is 56 Prospect Street, Hartford,
Connecticut, 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
Robert Chesek (65) Director Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Wethersfield, CT 06109 Institutional Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present).
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
E. Virgil Conway (70) Director Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present), Union
Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage Securities
Fund (Advisory Director) (1990-present), Centennial Insurance Company
(1974-present), Josiah Macy, Jr., Foundation (1975-present), The Harlem
Youth Development Foundation (1987-present) and New York Housing
Partnership Development Corp. (1981-present). Director, Accuhealth
(1994-present), Trism, Inc. (1994-present), Realty Foundation of New
York (1972-present), Vice Chariman, The Academy of Political Science
(1985-present). Director/Trustee, Phoenix Funds (1993-present).
Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, Duff & Phelps Utilities Tax-Free Income Inc.
and Duff & Phelps Utility and Corporate Bond Trust Inc. (1995-present).
Member, Audit Committee of the City of New York (1981-1996). Advisory
Director, Blackrock Fannie Mae Mortgage Securities Fund (1989-1996) and
Fund Directions (1993-1998). Chairman, Financial Accounting Standards
Advisory Council (1992-1995).
Harry Dalzell-Payne (70) Director Director/Trustee, Phoenix Funds (1993-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Apartment 29G Mutual Funds (1996-present). Director, Duff & Phelps Utilities Tax-Free
New York, NY 10016 Income Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Trustee, Phoenix-Seneca Funds (1999-present). Formerly
a Major General of the British Army.
*Francis E. Jeffries (69) Director Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series, and Phoenix Duff & Phelps Institutional Mutual
#902 Funds (1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Naples, FL 34108 Duff & Phelps Utilities Income Inc. (1987-present), Duff & Phelps
Utilities Tax-Free Income Inc. (1991-present) and Duff & Phelps Utility
and Corporate Bond Trust Inc. (1993-present). Director, The Empire
District Electric Company (1984-present). Director (1989-1997),
Chairman of the Board (1993-1997), President (1989-1993), and Chief
Executive Officer (1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (61) Director Chairman (1995-present) and Chief Executive Officer (1995-1999), Carson
Chairman Products Company. Director/Trustee, Phoenix Funds (1980-present).
Carson Product Company Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
64 Ross Road Institutional Mutual Funds (1996-present) and Phoenix-Seneca Funds
Savannah, GA 30750 (2000-present). Director, Equifax Corp. (1991-present) and Evergreen
International Fund, Inc. (1989-present). Trustee, Evergreen Liquid
Trust, Evergreen Tax Exempt Trust, Evergreen Tax Free Fund, Master
Reserves Tax Free Trust, and Master Reserves Trust.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
*Philip R. McLoughlin (53) Director and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-present), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive Vice
President, Investments (1988-present), Phoenix Home Life Mutual
Insurance Company. Director/Trustee and President, Phoenix Funds
(1989-present). Trustee and President, Phoenix-Aberdeen Series Fund and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc. (1995-present)
and Duff & Phelps Utility and Corporate Bond Trust Inc. (1995-present).
Trustee, Phoenix-Seneca Funds (1999-present). Director (1983-present)
and Chairman (1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990- present), Phoenix Equity Planning
Corporation. Chairman and Chief Executive Officer, Zweig/Glaser
Advisers, LLC (1999-present). Director, Phoenix Realty Group, Inc.
(1994-present), Phoenix Realty Advisors, Inc. (1987-present), Phoenix
Realty Investors, Inc. (1994-present), Phoenix Realty Securities, Inc.
(1994-present), PXRE Corporation (Delaware) (1985-present) and World
Trust Fund (1991-present). Director and Executive Vice President,
Phoenix Life and Annuity Company (1996-present). Director and Executive
Vice President, PHL Variable Insurance Company (1995-present).
Director, Phoenix Charter Oak Trust Company (1996-present). Director
and Vice President, PM Holdings, Inc. (1985-present). Director and
President, Phoenix Securities Group, Inc. (1993-1995). Director
(1992-present) and President (1992-1994), W.S. Griffith & Co., Inc.
Director, Townsend Financial Advisers, Inc. (1992-present), Director,
PHL Associates, Inc. (1995-present).
Everett L. Morris (71) Director Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen
Colts Neck, NJ 07722 Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present).
*James M. Oates (54) Director Chairman, IBEX Capital Markets, Inc. (formerly, IBEX Capital Markets
Managing Director LLC) (1997-present). Managing Director, Wydown Group (1994-present).
The Wydown Group Director, Phoenix Investment Partners, Ltd. (1995-present).
IBEX Capital Markets, Inc. Director/Trustee, Phoenix Funds (1987-present). Trustee,
60 State Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Suite 950 Mutual Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Boston, MA 02109 Director, AIB Govett Funds (1991-present), Investors Financial Service
Corporation (1995-present), Investors Bank & Trust Corporation
(1995-present), Plymouth Rubber Co. (1995-present), Stifel Financial
(1996-present), Command Systems, Inc. (1998-present), Connecticut River
Bancorp (1998-present) and Endowment for Health (1999-present). Vice
Chairman, Massachusetts Housing-Partnership (1998-2000). Director, Blue
Cross and Blue Shield of New Hampshire (1994-1999).
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
*Calvin J. Pedersen (58) Director Director (1986-present), President (1993-2000) and Executive Vice
Phoenix Investment President (1992-1993), Phoenix Investment Partners, Ltd. Director/
Partners, Ltd. Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen Series
55 East Monroe Street Fund and Phoenix Duff & Phelps Institutional Mutual Funds
Suite 3600 (1996-present). President and Chief Executive Officer, Duff & Phelps
Chicago, IL 60603 Utilities Tax-Free Income Inc. (1995-present), Duff & Phelps Utilities
Income Inc. (1994-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present).
Herbert Roth, Jr. (71) Director Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
P.O. Box 909 Mutual Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Sherborn, MA 01770 Director, Boston Edison Company (1978-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./ Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries (diversified
manufacturer) (1985-present). Member, Directors Advisory Council,
Phoenix Home Life Mutual Insurance Company (1998-present). Director,
Phoenix Home Life Mutual Insurance Company (1972-1998).
Richard E. Segerson (54) Director Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (68) Director Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present) and Phoenix-Seneca Funds (2000-present).
Director, UST Inc. (1995-present), HPSC Inc. (1995-present), Duty Free
International, Inc. (1997-present) and Compuware (1996-present) and
Burroughs Wellcome Fund (1996-present). Visiting Professor, University
of Virginia (1997-present). Chairman, Dresing, Lierman, Weicker
(1995-1996). Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (42) Executive Director and Executive Vice President-Investments, Phoenix Investment
Vice Partners, Ltd. (1995-present). Executive Vice President, Phoenix Funds
President (1993-present) and Phoenix-Aberdeen Series Fund (1996-present).
Executive Vice President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds. Director
(1994-present), President (1995-present), Executive Vice President
(1994-1995), Vice President (1991-1994), Phoenix Investment Counsel,
Inc. Director, Phoenix Equity Planning Corporation (1995-present).
Senior Vice President, Securities Investments, Phoenix Home Life Mutual
Insurance Company (1993-1995). Various other positions with Phoenix
Home Life Mutual Insurance Company (1990-1993).
John F. Sharry (47) Executive President, Retail Division (1999-present), Executive Vice President,
Vice Retail Division (1997-1999), Phoenix Investment Partners, Ltd.
President President, Retail Division (1999-present), Managing Director, Retail
Distribution, Phoenix Equity Planning Corporation (1995-1999).
Executive Vice President, Phoenix Funds and Phoenix-Aberdeen Series
Funds (1998-present). Managing Director, Director and National Sales
Manager, Putnam Mutual Funds (until 1995).
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
James D. Wehr (42) Senior Vice Senior Vice President (1998-present), Managing Director, Fixed Income
President (1996-1998), Vice President (1991-1996), Phoenix Investment Counsel,
Inc. Senior Vice President (1997-present), Vice President (1988-1997)
Phoenix Multi-Portfolio Fund; Senior Vice President (1997-present),
Vice President (1990-1997) Phoenix Series Fund; Senior Vice President
(1997-present), Vice President (1991-1997) The Phoenix Edge Series
Fund; Senior Vice President (1997-present), Vice President (1993-1997)
Phoenix California Tax Exempt Bonds, Inc., and Senior Vice President
(1997-present), Vice President (1996-1997) Phoenix Duff & Phelps
Institutional Mutual Funds. Senior Vice President (1997-present)
Phoenix Multi-Sector Fixed Income Fund, Inc., Phoenix Multi-Sector
Short Term Bond Fund, Phoenix Income and Growth Fund and Phoenix
Strategic Allocation Fund, Inc. Managing Director, Public Fixed Income,
Phoenix Home Life Insurance Company (1991-1995).
Steven L. Colton (41) Managing Director, Value Equities, Phoenix Investment Counsel, Inc.
(1997-present). Vice President, The Phoenix Edge Series Fund, Phoenix
Series Fund, and Phoenix Equity Series Fund (1997-present). Vice
President, Phoenix-Oakhurst Income & Growth Fund and Phoenix-Oakhurst
Strategic Allocation Fund, Inc. (1998-present). Vice President/Senior
Portfolio Manager, American Century Investment Management (1987-1997).
Portfolio Manager, American Century/Benham Equity Growth Fund
(1991-1996) and American Century/Benham Utilities Income Fund
(1993-1997).
Robert S. Driessen(52) Vice President and Compliance Officer, Phoenix Investment Partners,
Ltd. (1999-present) and Phoenix Investment Counsel, Inc.
(1999-present). Vice President, Phoenix Funds, Phoenix-Aberdeen Series
Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1999-present). Compliance Officer (2000-present) and Associate
Compliance Officer (1999), PXP Securities Corporation. Vice President,
Risk Management Liaison, Bank of America (1996-1999). Vice President,
Securities Compliance, The Prudential Insurance Company of America
(1993-1996). Branch Chief/Financial Analyst, Securities and Exchange
Commission, Division of Investment Management (1972-1993).
Christopher J. Kelleher (43) Vice Managing Director, Fixed Income (1996-present), Vice President
President (1991-1996), Phoenix Investment Counsel, Inc. Vice President, Phoenix
Series Fund (1989-present), The Phoenix Edge Series Fund (1989-1997 and
1998-present) and Vice President, Phoenix-Oakhurst Income & Growth
Fund. Phoenix Duff & Phelps Institutional Mutual Funds (1996-1998).
Portfolio Manager, Public Bonds, Phoenix Home Life Insurance Company
(1991-1995).
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
- --------------------- ------------- -----------------------
<S> <C> <C>
William R. Moyer (55) Vice Executive Vice President and Chief Financial Officer (1999-present),
100 Bright Meadow Blvd. President Senior Vice President (1995-1999), Phoenix Investment Partners, Ltd.
PO Box 2200 Director (1998-present), Senior Vice President, (1990-present), Chief
Enfield, CT 06083-2200 Financial Officer (1996-present), Finance (until 1996) and Treasurer
(1994-1996 and 1998-present), Phoenix Equity Planning Corporation.
Director (1998-present), Senior Vice President (1990-present), Chief
Financial Officer (1996-present) and Treasurer (1994-present), Phoenix
Investment Counsel, Inc. Senior Vice President and Chief Financial
Officer, Duff & Phelps Investment Management Co. Vice President,
Phoenix Funds (1990-present), Phoenix-Aberdeen Series Fund and Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present). Vice
President, Investment Products Finance, Phoenix Home Life Mutual
Insurance Company (1990-1995). Senior Vice President, Chief Financial
Officer and Treasurer, W.S. Griffith & Co., Inc. (1992-1995) and
Townsend Financial Advisers, Inc. (1993-1995).
Nancy G. Curtiss (47) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer, Phoenix
Funds (1994-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1995-present) and Phoenix-Aberdeen Series Fund (1996-present). Second
Vice President and Treasurer, Fund Accounting, Phoenix Home Life Mutual
Insurance Company (1994-1995). Various positions with Phoenix Home Life
Insurance Company (1987-1994).
G. Jeffrey Bohne (52) Secretary and Clerk Vice President and General Manager, Phoenix Home Life Mutual Insurance
101 Munson Street Co. (1993-present). Vice President, Transfer Agent Operations
Greenfield, MA 01301 (1993-1996), Senior Vice President, Mutual Fund Customer Service
(1999-present) and Vice President, Mutual Fund Customer Service
(1996-1999), Phoenix Equity Planning Corporation. Secretary/Clerk,
Phoenix Funds (1993-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Aberdeen Series Fund
(1996-present).
</TABLE>
- ----------------
*Directors identified with an asterisk are considered to be interested persons
of the Fund (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation or Phoenix Investment Partners, Ltd.
For services rendered to the Fund for the fiscal year ended December 31, 1999,
the Directors received an aggregate of $12,195. For services on the Boards of
Directors/Trustees of the Phoenix Funds, each Director who is not a full-time
employee of the Adviser or any of its affiliates currently receives a retainer
at the annual rate of $40,000 and a fee of $2,500 per joint meeting of the
Boards. Each Director who serves on the Audit Committee receives a retainer at
the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee meeting
attended. Each Director who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Director who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of
Directors. Director fee costs are allocated equally to each of the Funds and the
Funds within the Phoenix Funds complex. The foregoing fees do not include
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of the Adviser who are not interested persons are
compensated for their services by the Adviser and receive no compensation from
the Fund.
25
<PAGE>
For the Fund's last fiscal year, the Directors received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (14 FUNDS)
NAME FROM FUND OF FUND EXPENSES UPON RETIREMENT PAID TO DIRECTORS
- ------------- --------- ---------------- --------------- -----------------
<S> <C> <C>
Robert Chesek $1,155* $63,750
E. Virgil Conway+ $1,500 $83,250
Harry Dalzell-Payne+ $1,355 $95,000
Francis E. Jeffries $1,100* $61,000
Leroy Keith, Jr. $1,155 None None $63,750
Philip R. McLoughlin+ 0 for any for any 0
Everett L. Morris+ $1,000 Director Director $57,750
James M. Oates+ $1,300 $72,250
Calvin J. Pedersen 0 0
Herbert Roth, Jr.+ $1,080 $59,250
Richard E. Segerson $1,300 $72,000
Lowell P. Weicker $1,250 $68,750
</TABLE>
- ----------
*This compensation (and the earnings thereon) was deferred pursuant to the
Deferred Compensation Plan. At December 31, 1999, the total amount of deferred
compensation (including interest and other accumulation earned on the original
amounts deferred) accrued for Messrs. Jeffries, Morris, Roth and Segerson was
$432,136.70, $179,151.26, $174,057.08 and $80,254.57, respectively. At
present, by agreement among the Fund, the Distributor and the electing
director, director fees that are deferred are paid by the Fund to the
Distributor. The liability for the deferred compensation obligation appears
only as a liability of the Distributor.
[dagger] Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
At April 5, 2000, the Directors and officers as a group owned less than 1% of
the then outstanding shares of the Fund.
PRINCIPAL SHAREHOLDERS
As of April 5, 2000, no shareholder owns of record or is known by the Fund to
own of record or beneficially own 5% or more of any class of the Fund's equity
securities.
ADDITIONAL INFORMATION
CAPITAL STOCK
The Fund was originally organized on March 21, 1967 as a Massachusetts
corporation under the name of "Income and Capital Shares, Inc." The Directors
have designated the authorized capital stock of the Fund as 50,000,000 shares of
Class A Common Stock, $1 par value and 50,000,000 shares of Class B Common
Stock, $1 par value. Shareholders of the Fund are entitled to one full vote for
each full share owned and a fractional vote for any fractional share. Shares
will participate equally in dividends and distributions declared by the Fund and
in the Fund's net assets on liquidation, except as otherwise described in this
Prospectus. Shares are fully paid and non-assessable when issued and are
transferable and redeemable. Shares have no preemptive or conversion rights
(other than as described herein).
FINANCIAL STATEMENTS
The Financial Statements for the Fund's fiscal year ended December 31, 1999,
appearing in the Fund's 1999 Annual Report to Shareholders, are incorporated
herein by reference.
REPORTS TO SHAREHOLDERS
The fiscal year of the Fund ends on December 31. The Fund will send financial
statements to its shareholders at least semiannually. An annual report
containing financial statements audited by the Fund's independent accountants,
will be sent to shareholders each year.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Fund. PricewaterhouseCoopers LLP audits
the Fund's annual financial statements and expresses an opinion thereon.
26
<PAGE>
CUSTODIANS AND TRANSFER AGENT
The custodian of the assets is State Street Bank and Trust Company, P.O. Box
351, Boston, Massachusetts, 02101. The Fund has authorized the custodians to
appoint one or more subcustodians for the assets of the Fund held outside the
United States. The securities and other assets of the Fund are held by each
Custodian or any subcustodian separate from the securities and assets of each
other Fund.
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Fund (the "Transfer Agent") for
which it is paid $17.95 for each designated shareholder account plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents shall be paid a fee by the Transfer Agent.
27
<PAGE>
APPENDIX
A-1 AND P-1 COMMERCIAL PAPER RATINGS
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt-edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they compromise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate
and thereby not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.
AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small
degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
28
<PAGE>
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and
interest for bonds in this category than for bonds in the A category.
BB, B,
CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to issuer's capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
D: Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.
The D rating also will be used upon the filing of a bankruptcy
petition if debt service payments are jeopardized.
29
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--14.2%
U.S. TREASURY BONDS--2.9%
U.S. Treasury Bonds 6.125%, 11/15/27.... AAA $ 1,250 $ 1,163,365
U.S. Treasury Bonds 5.25%, 2/15/29...... AAA 515 426,344
U.S. Treasury Bonds 6.125%, 8/15/29..... AAA 8,000 7,622,281
---------------------
9,211,990
---------------------
U.S. TREASURY NOTES--11.3%
U.S. Treasury Notes 5.50%, 2/29/00...... AAA 500 500,220
U.S. Treasury Notes 5%, 2/28/01......... AAA 7,000 6,912,392
U.S. Treasury Notes 6.25%, 6/30/02...... AAA 30 29,979
U.S. Treasury Notes 5.50%, 1/31/03...... AAA 5,000 4,883,996
U.S. Treasury Notes 5.75%, 4/30/03...... AAA 1,250 1,226,980
U.S. Treasury Notes 5.25%, 8/15/03...... AAA 1,203 1,159,615
U.S. Treasury Notes 4.25%, 11/15/03..... AAA 10,000 9,286,219
U.S. Treasury Notes 4.75%, 2/15/04...... AAA 7,250 6,833,125
U.S. Treasury Notes 5.25%, 5/15/04...... AAA 500 478,776
U.S. Treasury Notes 5.875%, 11/15/04.... AAA 450 441,032
U.S. Treasury Notes 5.50%, 2/15/08...... AAA 2,275 2,130,272
U.S. Treasury Notes 5.625%, 5/15/08..... AAA 1,100 1,034,469
U.S. Treasury Notes 6%, 8/15/09......... AAA 1,240 1,201,308
---------------------
36,118,383
---------------------
- - ---------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $47,435,852) 45,330,373
- - ---------------------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
AGENCY MORTGAGE-BACKED SECURITIES--0.2%
GNMA 6.50%, 6/15/28..................... AAA $ 538 $ 504,892
- - ---------------------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $534,916) 504,892
- - ---------------------------------------------------------------------------------------
AGENCY NON-MORTGAGE-BACKED
SECURITIES--1.8%
Fannie Mae 6.625%, 9/15/09.............. AAA 5,990 5,825,275
- - ---------------------------------------------------------------------------------------
TOTAL AGENCY NON-MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $5,982,536) 5,825,275
- - ---------------------------------------------------------------------------------------
MUNICIPAL BONDS--5.0%
CALIFORNIA--1.9%
Kern County Pension Obligation Revenue
Taxable 7.26%, 8/15/14.................. AAA 1,700 1,615,000
Long Beach Pension Obligation Taxable
6.87%, 9/1/06........................... AAA 950 921,500
Los Angeles County Metropolitan
Transportation Authority Revenue Taxable
Series C 5.0%, 07/01/23................. AAA 1,000 866,250
San Bernardino County Pension Obligation
Revenue Taxable 6.87%, 8/1/08........... AAA 455 436,231
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
San Bernardino County Pension Obligation
Revenue Taxable 6.94%, 8/1/09........... AAA $ 1,240 $ 1,185,750
Ventura County Pension Obligation
Taxable 6.54%, 11/1/05.................. AAA 1,100 1,057,375
---------------------
6,082,106
---------------------
FLORIDA--1.9%
Miami Beach Special Obligation Revenue
Taxable 8.60%, 9/1/21................... AAA 3,600 3,771,000
Tampa Solid Waste System Revenue Taxable
Series A 6.23%, 10/1/05................. AAA 1,800 1,685,250
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20(e)....... AAA 595 558,556
---------------------
6,014,806
---------------------
MASSACHUSETTS--0.3%
Massachusetts State Turnpike Authority
Metropolitan Highway System Revenue
Series A 5%, 1/1/39..................... AAA 1,000 813,750
NEW YORK--0.6%
New York City Municipal Water Finance
Authority Water & Sewer System Revenue
Series B 5%, 6/15/29.................... AAA 1,000 832,500
New York State Dormitory Authority
Revenue Taxable 6.90%, 4/1/03........... A- 600 590,250
New York State Environmental Facilities
Corp. Revenue Taxable 6.70%, 3/15/08.... AAA 600 570,000
---------------------
1,992,750
---------------------
PENNSYLVANIA--0.3%
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A 5.79%,
4/15/09................................. AAA 1,175 1,035,469
- - ---------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $16,777,895) 15,938,881
- - ---------------------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES--3.0%
AESOP Funding II LLC 97-1A, A2 6.40%,
10/20/03(f)............................. AAA $ 1,600 $ 1,572,345
AESOP Funding II LLC 98-1, A 6.14%,
5/20/06(f).............................. AAA 1,000 954,471
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ A+ 600 591,654
Discover Card Master Trust I 98-7, A
5.60%, 5/16/06.......................... AAA 1,500 1,428,750
Ford Credit Auto Owner Trust 99-B, A4
5.80%, 6/15/02.......................... AAA 500 494,668
Green Tree Financial Corp. 96-2, M1
7.60%, 4/15/27.......................... AA- 1,150 1,113,328
Honda Auto Lease Trust 99-A, A5 6.65%,
7/15/05................................. AAA 1,500 1,489,687
Nations Bank Auto Owner Trust 96-A, B2
6.875%, 5/15/03......................... A 500 500,625
Premier Auto Trust 97-2, B 6.53%,
12/6/03................................. AA 1,000 988,575
Premier Auto Trust 98-3, B 6.14%,
9/8/04.................................. A+ 500 491,043
---------------------
9,625,146
---------------------
- - ---------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $9,766,487) 9,625,146
- - ---------------------------------------------------------------------------------------
CORPORATE BONDS--2.1%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.1%
Charter Communications Holdings LLC
8.625%, 4/1/09.......................... B+ 450 417,375
BUILDING MATERIALS--0.1%
Nortek, Inc. 9.125%, 9/1/07............. B+ 400 388,000
COMPUTERS (SOFTWARE & SERVICES)--0.1%
Computer Associates International, Inc.
Series B 6.375%, 4/15/05................ BBB+ 435 402,375
ENTERTAINMENT--0.5%
Capitol Records, Inc. 144A 8.375%
8/15/09(d).............................. BBB+ 1,600 1,534,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
HEALTH CARE (HOSPITAL MANAGEMENT)--0.2%
Tenet Healthcare Corp. 8%, 1/15/05...... BB+ $ 600 $ 579,000
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.2%
Boston Scientific Corp. 6.625%,
3/15/05................................. BBB 515 475,087
INSURANCE (MULTI-LINE)--0.1%
Willis Corroon Corp. 9%, 2/1/09......... B+ 425 354,875
METALS MINING--0.1%
Level 3 Communications, Inc. 9.125%,
5/1/08.................................. B 350 330,750
PAPER & FOREST PRODUCTS--0.1%
Buckeye Technologies, Inc. 9.25%,
9/15/08................................. BB- 350 357,438
RETAIL (FOOD CHAINS)--0.2%
Fred Meyer, Inc. 7.45%, 3/1/08.......... BBB- 525 511,219
TELECOMMUNICATIONS (LONG DISTANCE)--0.2%
Nextlink Communications, Inc. 10.75%,
11/15/08................................ B 590 613,600
TEXTILES (APPAREL)--0.1%
Collins & Aikman Corp. 11.50%,
4/15/06................................. B 400 396,000
TRUCKS & PARTS--0.1%
Cummins Engine Co., Inc. 6.45%,
3/1/05.................................. BBB+ 240 223,800
- - ---------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $6,969,624) 6,583,519
- - ---------------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--4.5%
CS First Boston Mortgage Securities
Corp. 97-C2, A3 6.55%, 11/17/07......... AAA 2,750 2,602,187
DLJ Commercial Mortgage Corp. 99-CG1,
A1B 6.46%, 1/10/09...................... Aaa(c) 2,000 1,862,500
DLJ Commercial Mortgage Corp. 98-CF2,
A1B 6.24%, 11/12/31..................... Aaa(c) 2,550 2,347,594
First Union - Lehman Brothers Commercial
Mortgage 97-C1, B 7.43%, 4/18/07........ Aa(c) 600 584,048
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
First Union Commercial Mortgage Trust
99-C1, A2 6.07%, 10/15/08............... AAA $ 2,000 $ 1,823,828
G.E. Capital Mortgage Services, Inc.
96-8, 1M 7.25%, 5/25/26................. AA 240 232,789
LB Commercial Conduit Mortgage Trust
98-C4, A1B 6.21%, 10/15/08.............. AAA 2,000 1,821,743
Lehman Large Loan 97-LLI, B 6.95%,
3/12/07................................. AA+ 725 689,152
Nationslink Funding Corp. 96-1, B 7.69%,
12/20/05................................ AA 325 323,642
Residential Funding Mortgage Securities
I 96-S1, A11 7.10%, 1/25/26............. AAA 1,500 1,431,562
Residential Funding Mortgage Securities
I 96-S4, M1 7.25%, 2/25/26.............. AA 477 456,973
- - ---------------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $14,951,124) 14,176,018
- - ---------------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--5.4%
BULGARIA--0.7%
Repulic of Bulgaria IAB Series PDI
6.50%, 07/28/11(e)...................... B(c) 1,750 1,384,688
Republic of Bulgaria FLIRB Bearer Series
A 2.75%, 7/28/12(e)..................... B(c) 1,380 997,050
---------------------
2,381,738
---------------------
COLOMBIA--0.4%
Republic of Colombia 10.875%, 3/9/04.... BB+ 750 770,625
Republic of Colombia 9.75%, 4/23/09..... BB+ 500 467,500
---------------------
1,238,125
---------------------
COSTA RICA--0.4%
Republic of Costa Rica 144A 9.335%,
5/15/09(d).............................. BB 1,190 1,210,825
CROATIA--0.3%
Croatia Series B 6.50%, 7/31/06(e)...... BBB- 550 506,964
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
CROATIA--CONTINUED
Croatia Series A 6.50%, 7/31/10(e)...... BBB- $ 655 $ 560,025
---------------------
1,066,989
---------------------
EL SALVADOR--0.4%
Republic of El Salvador 144A 9.50%,
8/15/06(d).............................. BB+ 1,300 1,290,250
MEXICO--1.1%
United Mexican States Global Bond
11.375%, 9/15/16........................ BB 1,000 1,135,000
United Mexican States Global Bond
11.50%, 5/15/26......................... BB 2,000 2,392,500
---------------------
3,527,500
---------------------
PANAMA--0.2%
Republic of Panama 9.375%, 4/1/29....... BB+ 500 476,875
PHILIPPINES--0.5%
Republic of Philippines 8.875%,
4/15/08................................. BB+ 1,500 1,471,875
Republic of Philippines 9.875%,
1/15/19................................. BB+ 125 123,906
---------------------
1,595,781
---------------------
POLAND--0.8%
Poland Bearer PDI 6%, 10/27/14(e)....... BBB 2,970 2,635,875
SOUTH KOREA--0.4%
Republic of Korea 8.875%, 4/15/08....... BBB 1,235 1,306,013
TURKEY--0.2%
Republic of Turkey 12.375%, 6/15/09..... B 500 539,375
- - ---------------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $16,696,500) 17,269,346
- - ---------------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--0.5%
ARGENTINA--0.0%
Compania de Radiocomunicaciones Moviles
SA 144A 9.25%, 5/8/08(d)................ BBB- 200 174,000
CHILE--0.2%
Compania Sud Americana de Vapores SA
RegS 7.375%, 12/8/03.................... BBB 200 192,726
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
<S> <C> <C> <C>
CHILE--CONTINUED
Petropower I Funding Trust 144A 7.36%,
2/15/14(d).............................. BBB $ 478 $ 425,502
---------------------
618,228
---------------------
LUXEMBOURG--0.2%
Tyco International Group SA 6.375%,
6/15/05................................. A- 750 699,375
POLAND--0.1%
TPSA Finance BV 144A 7.75%,
12/10/08(d)............................. BBB 240 223,800
- - ---------------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $1,859,986) 1,715,403
- - ---------------------------------------------------------------------------------------
<CAPTION>
SHARES
--------
COMMON STOCKS--55.4%
<S> <C> <C> <C>
BANKS (MAJOR REGIONAL)--0.3%
Mellon Financial Corp................... 29,000 987,812
BANKS (MONEY CENTER)--2.9%
Bank of America Corp.................... 73,493 3,688,406
Wells Fargo Co.......................... 140,600 5,685,512
---------------------
9,373,918
---------------------
BEVERAGES (NON-ALCOHOLIC)--1.0%
PepsiCo, Inc............................ 90,000 3,172,500
BROADCASTING (TELEVISION, RADIO & CABLE)--4.6%
AMFM, Inc.(b)........................... 36,100 2,824,825
AT&T Corp.-Liberty Media Group Class
A(b).................................... 128,000 7,264,000
CBS Corp.(b)............................ 43,200 2,762,100
Clear Channel Communications, Inc.(b)... 19,000 1,695,750
---------------------
14,546,675
---------------------
COMMUNICATIONS EQUIPMENT--2.1%
General Motors Corp. Class H(b)......... 19,800 1,900,800
Motorola, Inc........................... 12,000 1,767,000
Tellabs, Inc.(b)........................ 46,000 2,952,625
---------------------
6,620,425
---------------------
COMPUTERS (HARDWARE)--4.7%
Dell Computer Corp.(b).................. 75,900 3,870,900
International Business Machines Corp.... 58,000 6,264,000
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
COMPUTERS (HARDWARE)--CONTINUED
Sun Microsystems, Inc.(b)............... 61,000 $ 4,723,688
---------------------
14,858,588
---------------------
COMPUTERS (NETWORKING)--3.3%
Cisco Systems, Inc.(b).................. 97,000 10,391,125
COMPUTERS (SOFTWARE & SERVICES)--4.8%
America Online, Inc.(b)................. 48,800 3,681,350
Microsoft Corp.(b)...................... 98,400 11,488,200
---------------------
15,169,550
---------------------
CONSUMER FINANCE--0.3%
Capital One Financial Corp.............. 21,600 1,040,850
DISTRIBUTORS (FOOD & HEALTH)--0.6%
Cardinal Health, Inc.................... 40,400 1,934,150
ELECTRIC COMPANIES--0.3%
Duke Energy Corp........................ 17,000 852,125
ELECTRICAL EQUIPMENT--2.5%
General Electric Co..................... 51,900 8,031,525
ELECTRONICS (INSTRUMENTATION)--0.3%
Waters Corp.(b)......................... 20,000 1,060,000
ELECTRONICS (SEMICONDUCTORS)--2.5%
Intel Corp.............................. 98,500 8,107,781
FINANCIAL (DIVERSIFIED)--4.9%
Citigroup, Inc.......................... 116,925 6,496,645
Freddie Mac............................. 40,800 1,920,150
Morgan Stanley Dean Witter & Co......... 51,700 7,380,175
---------------------
15,796,970
---------------------
HEALTH CARE (DIVERSIFIED)--1.3%
Bristol-Myers Squibb Co................. 66,800 4,287,725
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--1.7%
Pfizer, Inc............................. 78,700 2,552,831
Schering-Plough Corp.................... 70,300 2,965,781
---------------------
5,518,612
---------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.2%
Bard (C.R.), Inc........................ 21,000 1,113,000
Baxter International, Inc............... 42,100 2,644,406
---------------------
3,757,406
---------------------
HOUSEHOLD PRODUCTS (NON-DURABLE)--1.9%
Fort James Corp......................... 9,700 265,538
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
HOUSEHOLD PRODUCTS (NON-DURABLE)--CONTINUED
Kimberly-Clark Corp..................... 10,800 $ 704,700
Procter & Gamble Co. (The).............. 45,200 4,952,225
---------------------
5,922,463
---------------------
INSURANCE (MULTI-LINE)--1.5%
American International Group, Inc....... 44,250 4,784,531
LODGING-HOTELS--0.7%
Carnival Corp........................... 45,300 2,165,906
MANUFACTURING (DIVERSIFIED)--1.6%
Tyco International Ltd.................. 134,800 5,240,350
OIL & GAS (DRILLING & EQUIPMENT)--0.9%
Halliburton Co.......................... 25,500 1,026,375
Schlumberger Ltd........................ 16,800 945,000
Transocean Offshore Inc................. 23,252 783,318
---------------------
2,754,693
---------------------
OIL & GAS (EXPLORATION & PRODUCTION)--0.3%
Anadarko Petroleum Corp................. 30,000 1,023,750
OIL (DOMESTIC INTEGRATED)--0.6%
Conoco, Inc. Class A.................... 79,600 1,970,100
PAPER & FOREST PRODUCTS--0.2%
Georgia-Pacific Group................... 3,700 187,775
International Paper Co.................. 9,400 530,513
---------------------
718,288
---------------------
RETAIL (BUILDING SUPPLIES)--1.9%
Home Depot, Inc. (The).................. 90,600 6,211,763
RETAIL (FOOD CHAINS)--0.3%
Safeway, Inc.(b)........................ 26,400 938,850
RETAIL (GENERAL MERCHANDISE)--2.3%
Wal-Mart Stores, Inc.................... 104,400 7,216,650
RETAIL (SPECIALTY)--0.4%
Staples, Inc.(b)........................ 58,875 1,221,656
TELECOMMUNICATIONS (LONG DISTANCE)--2.5%
AT&T Corp............................... 91,966 4,667,275
MCI WorldCom, Inc.(b)................... 65,103 3,454,553
---------------------
8,121,828
---------------------
TELEPHONE--0.9%
SBC Communications, Inc................. 59,200 2,886,000
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
TEXTILES (APPAREL)--0.1%
<S> <C> <C> <C>
Tommy Hilfiger Corp.(b)................. 11,000 $ 256,438
- - ---------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $113,726,491) 176,941,003
- - ---------------------------------------------------------------------------------------
FOREIGN COMMON STOCKS--3.6%
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.5%
Elan Corp. PLC Sponsored ADR
(Ireland)(b)............................ 54,800 1,616,600
OIL (INTERNATIONAL INTEGRATED)--1.9%
BP Amoco PLC Sponsored ADR (United
Kingdom)................................ 100,706 5,973,125
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.2%
Vodafone AirTouch PLC Sponsored ADR
(United Kingdom)........................ 80,500 3,984,750
- - ---------------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $7,532,932) 11,574,475
- - ---------------------------------------------------------------------------------------
UNIT INVESTMENT TRUSTS--1.2%
S&P 500 Depository Receipts............. 26,400 3,877,500
- - ---------------------------------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $3,468,207) 3,877,500
- - ---------------------------------------------------------------------------------------
WARRANTS--0.0%
FOREIGN GOVERNMENT--0.0%
Republic of Argentina Warrants(b)....... 755 1,604
- - ---------------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 1,604
- - ---------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.9%
(IDENTIFIED COST $245,702,550) 309,363,435
- - ---------------------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------------
SHORT-TERM OBLIGATIONS--2.7%
<S> <C> <C> <C>
COMMERCIAL PAPER--1.9%
American Home Products Corp. 4.50%,
1/3/00.................................. A-1+ $ 1,275 $ 1,274,681
Anheuser Busch Cos., Inc. 4.50%,
1/3/00.................................. A-1+ 4,075 4,073,981
Receivables Capital Corp. 6%, 1/10/00... A-1+ 620 619,070
---------------------
5,967,732
---------------------
FEDERAL AGENCY SECURITIES--0.8%
FMC 5.54%, 2/24/00...................... 2,500 2,479,225
- - ---------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $8,446,957) 8,446,957
- - ---------------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.6%
(IDENTIFIED COST $254,149,507) 317,810,392(a)
Cash and receivables, less liabilities--0.4% 1,433,391
---------------------
NET ASSETS--100.0% $ 319,243,783
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $70,038,922 and gross
depreciation of $7,190,146 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purpose was
$254,961,616.
(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 December 31,
1999, these securities amounted to a value of $4,858,377 or 1.5% of net
assets.
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(f) Private placement.
See Notes to Financial Statements
11
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $254,149,507) $ 317,810,392
Cash 6,424
Short-term investments held as collateral for loaned
securities 1,644,000
Receivables
Interest and dividends 2,078,235
Fund shares sold 62,405
Investment securities sold 531
Prepaid expenses 5,038
--------------
Total assets 321,607,025
--------------
LIABILITIES
Payables
Collateral on securities loaned 1,644,000
Fund shares repurchased 216,244
Investment advisory fee 175,274
Transfer agent fee 87,972
Distribution fee 75,085
Financial agent fee 22,963
Trustees' fee 9,455
Accrued expenses 132,249
--------------
Total liabilities 2,363,242
--------------
NET ASSETS $ 319,243,783
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of common stock $ 253,477,436
Undistributed net investment income 42,206
Accumulated net realized gain 2,063,256
Net unrealized appreciation 63,660,885
--------------
NET ASSETS $ 319,243,783
==============
CLASS A
Shares of common stock, $1 par value,
50,000,000 shares authorized (Net Assets $307,130,235) 17,492,092
Net asset value per share $17.56
Offering price per share $17.56/(1-4.75%) $18.44
CLASS B
Shares of common stock, $1 par value,
50,000,000 shares authorized (Net Assets $12,113,548) 697,923
Net asset value and offering price per share $17.36
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 7,897,311
Dividends 1,477,647
Security lending 74,990
Foreign taxes withheld (14,420)
-------------
Total investment income 9,435,528
-------------
EXPENSES
Investment advisory fee 2,080,156
Distribution fee, Class A 770,315
Distribution fee, Class B 118,978
Financial agent fee 252,080
Transfer agent 439,900
Printing 113,929
Custodian 49,523
Registration 30,914
Professional 28,148
Trustees 16,445
Miscellaneous 13,220
-------------
Total expenses 3,913,608
Custodian fees paid indirectly (5,355)
-------------
Net expenses 3,908,253
-------------
NET INVESTMENT INCOME 5,527,275
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 17,640,962
Net change in unrealized appreciation (depreciation) on
investments 9,726,722
-------------
NET GAIN ON INVESTMENTS 27,367,684
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 32,894,959
=============
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 5,527,275 $ 4,664,553
Net realized gain (loss) 17,640,962 16,549,036
Net change in unrealized appreciation
(depreciation) 9,726,722 37,970,099
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 32,894,959 59,183,688
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (5,970,351) (4,386,234)
Net investment income, Class B (162,442) (82,422)
Net realized gains, Class A (15,905,859) (21,922,429)
Net realized gains, Class B (633,776) (803,938)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (22,672,428) (27,195,023)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (295,140
and 1,803,964 shares, respectively) 5,133,893 29,452,632
Net asset value of shares issued from
reinvestment of distributions
(1,109,473 and 1,395,511 shares,
respectively) 19,126,265 22,778,819
Cost of shares repurchased (2,635,481
and 4,476,479 shares, respectively) (45,843,205) (72,799,537)
------------ ------------
Total (21,583,047) (20,568,086)
------------ ------------
CLASS B
Proceeds from sales of shares (102,439
and 83,659 shares, respectively) 1,753,996 1,329,444
Net asset value of shares issued from
reinvestment of distributions
(41,804 and 50,302 shares,
respectively) 712,883 813,797
Cost of shares repurchased (138,332
and 156,318 shares, respectively) (2,381,916) (2,499,565)
------------ ------------
Total 84,963 (356,324)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS (21,498,084) (20,924,410)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (11,275,553) 11,064,255
NET ASSETS
Beginning of period 330,519,336 319,455,081
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$42,206 AND $641,746, RESPECTIVELY] $319,243,783 $330,519,336
============ ============
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.03 $ 15.43 $ 15.52 $ 15.98 $ 14.82
INCOME FROM INVESTMENT OPERATIONS(3)
Net investment income (loss) 0.32 0.25 0.30 0.31 0.45
Net realized and unrealized gain
(loss) 1.51 2.80 2.81 1.10 2.22
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.83 3.05 3.11 1.41 2.67
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.35) (0.24) (0.30) (0.29) (0.52)
Dividends from net realized gains (0.95) (1.21) (2.90) (1.58) (0.99)
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (1.30) (1.45) (3.20) (1.87) (1.51)
--------- --------- --------- --------- ---------
Change in net asset value 0.53 1.60 (0.09) (0.46) 1.16
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $17.56 $ 17.03 $ 15.43 $ 15.52 $ 15.98
========= ========= ========= ========= =========
Total return(1) 10.97% 20.38% 20.68% 8.78% 18.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $307,130 $318,847 $308,524 $309,678 $361,526
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.20%(5) 1.17%(4) 1.17% 1.21% 1.21%
Net investment income 1.75% 1.51% 1.68% 1.78% 2.67%
Portfolio turnover 69% 144% 355% 275% 184%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.87 $ 15.30 $ 15.43 $ 15.89 $ 14.79
INCOME FROM INVESTMENT OPERATIONS(3)
Net investment income (loss) 0.18 0.12 0.18 0.19 0.30(2)
Net realized and unrealized gain
(loss) 1.50 2.78 2.77 1.09 2.22
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.68 2.90 2.95 1.28 2.52
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.24) (0.12) (0.18) (0.16) (0.43)
Dividends from net realized gains (0.95) (1.21) (2.90) (1.58) (0.99)
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (1.19) (1.33) (3.08) (1.74) (1.42)
--------- --------- --------- --------- ---------
Change in net asset value 0.49 1.57 (0.13) (0.46) 1.10
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $17.36 $ 16.87 $ 15.30 $ 15.43 $ 15.89
========= ========= ========= ========= =========
Total return(1) 10.14% 19.53% 19.74% 7.95% 17.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $12,114 $11,673 $10,931 $9,594 $8,046
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.95%(5) 1.92%(4) 1.92% 1.96% 1.97%
Net investment income 1.01% 0.75% 0.92% 1.01% 1.88%
Portfolio turnover 69% 144% 355% 275% 184%
</TABLE>
(1) Maximum sales load is not reflected in total return calculation.
(2) Computed using average shares outstanding.
(3) 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.
(4) For the year ended December 31, 1998, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(5) For the year ended December 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratios would be 1.19% and 1.94%
for Class A and Class B, respectively.
14
See Notes to Financial Statements
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Oakhurst 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 accounting principles
generally accepted in the United States 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.
15
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (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 December 31, 1999, the
Fund had loaned securities with a market value of $22,167,373 and received
collateral of $22,931,239 of which $1,644,000 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 $12,242 for Class A shares and deferred
sales charges of $20,655 for Class B shares for the year ended December 31,
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 year ended December 31, 1999, $200,357 was retained by
the Distributor, $640,715 was paid to unaffiliated participants and $48,221 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 year ended December 31, 1999 transfer
agent fees were $439,900 of which PEPCO retained $189,399 which is net of the
fees paid to State Street.
At December 31, 1999, PHL and affiliates held 70 Class A shares and 11,597
Class B shares of the Fund with a combined value of $202,553.
3. PURCHASE AND SALE OF SECURITIES
During the year ended December 31, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $144,499,576 and $196,051,906,
16
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
respectively. Purchases and sales of long-term U.S. Government and agency
securities amounted to $67,541,148 and $51,022,367, respectively.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is considered to be
more informative to the shareholder. As of December 31, 1999, the Fund increased
undistributed net investment income and decreased accumulated net realized gain
by $5,978.
TAX INFORMATION NOTICE (UNAUDITED)
LONG-TERM CAPITAL GAINS
The Fund hereby designates $9,840,357 as a long-term capital gain dividend.
For federal income tax purposes 10.11% of the ordinary income dividends paid
by the Fund qualify for the dividends received deduction for corporate
shareholders.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Board of Directors and Shareholders
of Phoenix-Oakhurst Strategic Allocation Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Oakhurst Strategic Allocation Fund, Inc. (formerly Phoenix Strategic
Allocation Fund, Inc.) (hereafter referred to as the "Fund") at December 31,
1999, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 2000
18
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
a.1 Articles of Organization effective November 22, 1966
previously filed and filed via EDGAR as Exhibit 1.1 with
Post-Effective Amendment No. 15 on April 24, 1997 and
incorporated herein by reference.
a.2 Restated Articles of Organization effective March 21, 1967
previously filed and filed via EDGAR as Exhibit 1.2 with
Post-Effective Amendment No. 15 on April 24, 1997 and
incorporated herein by reference.
a.3 Amendment to Restated Articles of Organization effective March
31, 1982 previously filed and filed via EDGAR as Exhibit 1.3
with Post-Effective Amendment No. 15 on April 24, 1997 and
incorporated herein by reference.
a.4 Amendment to Restated Articles of Organization effective July
9, 1986 filed with Amendment No. 10 and filed via EDGAR as
Exhibit 1.4 with Post-Effective Amendment No. 15 on April 24,
1997 and incorporated herein by reference.
a.5 Amendment to Restated Articles of Organization effective July
22, 1986 and filed with Amendment No. 10 and filed via EDGAR
as Exhibit 1.5 with Post-Effective Amendment No. 15 on April
24, 1997 and incorporated herein by reference.
a.6 Amendment to Restated Articles of Organization effective
September 15, 1987 and filed with Post-Effective Amendment No.
2 and filed via EDGAR as Exhibit 1.6 with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
a.7 Amendment to Restated Articles of Organization effective July
5, 1994 and filed via EDGAR as Exhibit 1.7 with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
a.8 Amendment to Restated Articles of Organization effective
October 12, 1994 and filed with Post-Effective Amendment No.
12 and filed via EDGAR as Exhibit 1.8 with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
a.9 Amendment to Restated Articles of Organization effective
November 14, 1996 and filed via EDGAR as Exhibit 1.9 with
Post-Effective Amendment No. 15 on April 24, 1997 and
incorporated herein by reference.
a.10* Amendment to Restated Articles of Organization effective
October 29, 1999 and filed via EDGAR herewith.
b. By-Laws: Filed as Exhibit 2 to Amendment No. 10 (filed on Form
N-1A) to Registrant's Registration Statement on Form N-8B-1
(File No. 811-1442) and filed via EDGAR with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
c. Reference is made to Article XXI of Registrant's By-Laws filed
with Amendment No. 10 and also Post-Effective Amendment Nos. 8
and 12 and filed via EDGAR as Exhibit 4 with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
C-1
<PAGE>
d.1 Management Agreement dated January 1, 1994 between Registrant
and Phoenix Investment Counsel, Inc. filed with Post-Effective
Amendment No. 12 on June 30, 1994 and filed via EDGAR as
Exhibit 5.2 with Post-Effective Amendment No. 15 on April 24,
1997 and incorporated herein by reference.
e.1 Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation dated November 19, 1997 filed via EDGAR
as Exhibit 6.1 with Post-Effective Amendment No. 16 on April
21, 1998 and incorporated herein by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers filed via EDGAR as Exhibit 6.2 with
Post-Effective Amendment No. 16 on April 21, 1998 and
incorporated herein by reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement
filed via EDGAR as Exhibit 6.3 with Post-Effective Amendment
No. 16 on April 21, 1998 and incorporated herein by reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix
Family of Funds filed via EDGAR as Exhibit 6.4 with
Post-Effective Amendment No. 16 on April 21, 1998 and
incorporated herein by reference.
f. Not applicable.
g.1 Custodian Contract between Registrant and State Street Bank
and Trust Company dated May 1, 1997 filed via EDGAR as Exhibit
8.1 with Post-Effective Amendment No. 16 on April 21, 1998 and
incorporated herein by reference.
h.1 Amended and Restated Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation dated
November 19, 1997 filed via EDGAR as Exhibit 9.1 with
Post-Effective Amendment No. 16 on April 21, 1998 and
incorporated herein by reference.
h.2 Form of Transfer Agency and Service Agreement between
Registrant and Phoenix Equity Planning Corporation filed as
Exhibit 9.2b to Post-Effective Amendment No. 12 on June 30,
1994 and filed via EDGAR as Exhibit 9.2 with Post-Effective
Amendment No. 15 on April 24, 1997 and incorporated herein by
reference.
h.3 Sub-Transfer Agency Agreement between Registrant and Phoenix
Equity Planning Corporation dated June 1, 1994 filed via EDGAR
as Exhibit 9.2c to Post-Effective Amendment No. 15 on April
24, 1997 and incorporated herein by reference.
h.4 First Amendment to the Amended and Restated Financial Agent
Agreement between Registrant and Phoenix Equity Planning
Corporation effective as of February 27, 1998 filed via EDGAR
as Exhibit 9.4 with Post-Effective Amendment No. 16 and
incorporated herein by reference.
h.5 Second Amendment to the Amended and Restated Financial Agent
Agreement between Registrant and Phoenix Equity Planning
Corporation effective as of June 1, 1998 filed via EDGAR with
Post-Effective Amendment No. 17 on February 26, 1999 and
incorporated herein by reference.
i. Opinion and Consent of Counsel covering shares of the Fund
filed via EDGAR as Exhibit 10 with Post-Effective Amendment
No. 14 on May 1, 1996 and incorporated herein by reference.
j.* Consent of Independent Accountants.
C-2
<PAGE>
k. Not applicable.
l. Not applicable under rules relating to the filing of exhibits
in effect at date of original filing in 1966.
m.1 Amended and Restated Distribution Plan for Class A shares
filed via EDGAR as Exhibit 15.1 with Post-Effective Amendment
No. 16 on April 21, 1998 and incorporated herein by reference.
m.2* Amended and Restated Distribution Plan for Class B shares
filed via EDGAR herewith.
n.27 Financial Data Schedule.
o.1* Amended and Restated Rule 18f-3 Multi-Class Distribution Plan
effective January 1, 1999 filed via EDGAR herewith.
o.2* First Amendment to the Amended and Restated Rule 18f-3
Multi-Class Distribution Plan filed via EDGAR herewith.
p.1.* Codes of Ethics of the Fund, the Adviser and the Distributor
filed via EDGAR herewith.
q.1. Powers of Attorney filed via EDGAR as Exhibit p.1. with
Post-Effective Amendment No. 17 on February 26, 1999 and
incorporated herein by reference.
- ----------
*filed herewith
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None.
ITEM 25. INDEMNIFICATION
Under the Registrant's By-Laws any present or former director or officer of
the Registrant is indemnified to the fullest extent permitted by law against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with any
action, suit or proceeding to which he may be made a party by reason of being or
having been a director or officer of the Registrant, provided he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Registrant and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
By-Laws do not authorize indemnification of any director or officer who is
liable to the Registrant or its shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Fund" in the Prospectus and "The Investment Adviser"
in the Statement of Additional Information for information regarding the
business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of the
Adviser, reference is made to the
C-3
<PAGE>
Adviser's current Form ADV (SEC file No. 801-5995) filed under the Investment
Advisers Act of 1940, incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Equity Planning also serves as the principal underwriter for the following
other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities Fund,
Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix Equity Series Fund, Phoenix-Euclid Funds, Phoenix-Goodwin California Tax
Exempt Bonds Inc., Phoenix-Goodwin Multi-Sector Fixed Income Fund Inc.,
Phoenix-Goodwin Multi-Sector Short Term Bond Fund, Phoenix Investment Trust 97,
Phoenix Multi-Portfolio Fund, Phoenix-Oakhurst Income & Growth Fund,
Phoenix-Seneca Funds, Phoenix Series Fund, Phoenix Strategic Equity Series Fund,
Phoenix-Zweig Trust, Phoenix Home Life Variable Universal Life Account, Phoenix
Home Life Variable Accumulation Account, PHL Variable Accumulation Account,
Phoenix Life and Annuity Variable Universal Life Account and PHL Variable
Separate Account MVA1.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
Name and Principal Positions and Offices Positions and Offices
Business Address with Distributor with Registrant
---------------- ---------------- ---------------
Michael E. Haylon Director Executive
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Director and
56 Prospect Street President
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Executive Vice Vice President
100 Bright Meadow Blvd. President, Chief
P.O. Box 2200 Financial Officer and
Enfield, CT 06083-2200 Treasurer
John F. Sharry President, Executive
100 Bright Meadow Blvd. Retail Division Vice President
P.O. Box 1900
Enfield, CT 06083-2200
Barry Mandinach Executive Vice President None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President None
100 Bright Meadow Blvd. Chief Sales Officer,
P.O. Box 2200 Retail Division
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President, Mutual Fund Secretary and Clerk
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
C-4
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address with Distributor with Registrant
---------------- ---------------- ---------------
Robert S. Dreissen Vice President, Compliance Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter AssistantVice President, Assistant Treasurer
56 Prospect St. Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include Registrant's Clerk;
Registrant's Secretary; Registrant's investment adviser, Phoenix Investment
Counsel, Inc.; Registrant's financial agent and principal underwriter, Phoenix
Equity Planning Corporation; Registrant's dividend disbursing agent, State
Street Bank and Trust Company; and Registrant's custodian, State Street Bank and
Trust Company. The address of the Secretary and Clerk is 101 Munson Street, P.O.
Box 810, Greenfield, MA 01302-0810; the address of the investment adviser is 56
Prospect Street, Hartford, Connecticut 06115-0480; the address of the transfer
agent and the financial agent is 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083-2200; the address of the dividend disbursing agent is State
Street Bank and Trust Company, P.0. Box 8301, Boston, Massachusetts 02266-8301
Attention: Phoenix Funds; and the address of the custodian is State Street Bank
and Trust Company, P.0. Box 351, Boston, Massachusetts 02101.
ITEM 29. MANAGEMENT SERVICES
The information required by this Item is included in the Statement of
Additional Information.
ITEM 30. UNDERTAKINGS
Not applicable.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Fund certifies that it meets all of the requirements for
effectiveness of this registration statement under rule 485(b) of the Securities
Act and has duly caused this amendment to the registration statement to be
signed on its behalf by the undersigned, duly authorized, in the City of
Hartford, and the State of Connecticut on the 1st day of May, 2000.
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
ATTEST: /S/ PAMELA S. SINOFSKY BY: /S/ PHILIP R. MCLOUGHLIN
---------------------- ---------------------------
PAMELA S. SINOFSKY PHILIP R. MCLOUGHLIN,
ASSISTANT SECRETARY PRESIDENT
Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed below by the following persons in the
capacities indicated, on this 1st day of May, 2000.
SIGNATURE TITLE
--------- -----
- -------------------------------------------------- Director
Robert Chesek*
- -------------------------------------------------- Director
E. Virgil Conway*
/s/ Nancy G. Curtiss
- -------------------------------------------------- Treasurer (principal
Nancy G. Curtiss financial and
accounting officer)
- -------------------------------------------------- Director
Harry Dalzell-Payne*
- -------------------------------------------------- Director
Francis E. Jeffries*
- -------------------------------------------------- Director
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin President and Director
- -------------------------------------------------- (principal executive
Philip R. McLoughlin officer)
- -------------------------------------------------- Director
Everett L. Morris*
- -------------------------------------------------- Director
James M. Oates*
- -------------------------------------------------- Director
Calvin J. Pedersen*
- -------------------------------------------------- Director
Herbert Roth, Jr.*
- -------------------------------------------------- Director
Richard E. Segerson*
- -------------------------------------------------- Director
Lowell P. Weicker, Jr.*
*By /s/ Philip R. McLoughlin
--------------------------------------------------
*Philip R. McLoughlin, Attorney-in-fact pursuant to powers of attorney.
S-1
Exhibit a.10
Restated Articles of Organization
<PAGE>
FEDERAL IDENTIFICATION
NO. 04-2400797
<TABLE>
<CAPTION>
<S> <C>
- ------------ THE COMMONWEALTH OF MASSACHUSETTS
Examiner WILLIAM FRANCIS GALVIN
SECRETARY OF THE COMMONWEALTH
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108-1512
- ------------
Name
Approved We, John F. Sharry , *Senior Vice President,
----------------------------------------------------
and Frances J. Crisafulli , *Assistant Clerk,
----------------------------------------------------------
of Phoenix Strategic Allocation Fund, Inc. ,
------------------------------------------------------------------------------
(Exact name of corporation)
located at 101 Munson Street, Greenfield, MA 01301 ,
----------------------------------------------------------------------
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment affecting articles numbered:
1
--------------------------------------------------------------------------------
(Number those articles 1, 2, 3, 4, 5 and/or 6 being amended)
of the Articles of Organization were duly adopted at a meeting held on
October 27, 1999, by vote of:
9,492,300,487 shares of common stock of 18,100,054,110 shares outstanding
------------- ---------------- -----------------
(type, class & series, if any)
shares of of shares outstanding and
------------- ---------------- -----------------
(type, class & series, if any)
shares of of shares outstanding
------------- ---------------- -----------------
C [ ] (type, class & series, if any)
P [ ]
M [ ] (1) being at least a majority of each type, class or series outstanding and
R.A. entitled to vote thereon:/or (2)
Change name to: Phoenix-Oakhurst Strategic Allocation Fund, Inc.
*Delete the inapplicable words. **Delete the inapplicable shares.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
(2) For amendments adopted pursuant to Chapter 1508, Section 71.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8 1/2 x 11
sheets of paper with a left margin of at least 1 inch. Additions to more than
one article may be made on a single sheet so long as each article requiring each
P.C. addition is clearly indicated.
</TABLE>
<PAGE>
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
- ----------------------------------- ----------- --------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ----------------------------------- ----------- --------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ------------ ---------------------- ----------- ------------------- ------------
Common: Common:
- ------------ ---------------------- ----------- ------------------- ------------
Preferred: Preferred:
- ------------ ---------------------- ----------- ------------------- ------------
- ------------ ---------------------- ----------- ------------------- ------------
Change the total authorized to:
- ----------------------------------- ----------- --------------------------------
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
- ----------------------------------- ----------- --------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- ------------ ---------------------- ----------- ------------------- ------------
Common: Common:
- ------------ ---------------------- ----------- ------------------- ------------
Preferred: Preferred:
- ------------ ---------------------- ----------- ------------------- ------------
- ------------ ---------------------- ----------- ------------------- ------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No.20 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 11, 2000, relating to the financial
statements and financial highlights appearing in the December 31, 1999 Annual
Report to Shareholders of the Phoenix-Oakhurst Strategic Allocation Fund, Inc.,
which are also incorporated by reference into the Registration Statement. We
also consent to the reference to us under the heading "Financial Highlights" in
the Prospectus and under the heading "Other Information - Independent
Accountants" in the Statement of Additional Information.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 26, 2000
Exhibit m.2
Amended and Restated Distribution Plan for Class B Shares
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
(the "Fund")
CLASS B SHARES
AMENDED AND RESTATED DISTRIBUTION PLAN
PURSUANT TO RULE 12b-1
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
The Fund and Phoenix Equity Planning Corporation (the "Distributor"), a
broker-dealer registered under the Securities Exchange Act of 1934, have entered
into a Distribution Agreement pursuant to which the Distributor will act as
principal underwriter of each class of shares of the Fund for sale to the
permissible purchasers. The Trustees of the Fund have determined to adopt this
Distribution Plan (the "Plan"), in accordance with the requirements of Section
12b-1 of the Investment Company Act of 1940, as amended (the "Act") with respect
to Class B shares of the Fund and have determined that there is a reasonable
likelihood that the Plan will benefit the Fund and its Class B shareholders.
2. Rule 12b-1 Fees
The Fund shall reimburse the Distributor, at the end of each month, up
to a maximum on an annual basis of 0.75% of the average daily value of the net
assets of the Fund's Class B shares, subject to any applicable restrictions
imposed by rules of the National Association of Securities Dealers, Inc., for
distribution expenditures incurred by Distributor subsequent to the
effectiveness of this Plan, in connection with the sale and promotion of the
Class B shares of the Fund and the furnishing of services to Class B
shareholders of the Fund.(the "Distribution Fee") Such expenditures shall
consist of: (i) commissions to sales personnel for selling Class B shares of the
Fund (including underwriting commissions and finance charges related to the
payment of commissions); (ii) compensation, sales incentives and payments to
sales, marketing and service personnel; (iii) payments to broker-dealers and
other financial institutions which have entered into selling agreements with the
Distributor for services rendered in connection with the sale and distribution
of Class B shares of the Fund; (iv) payment of expenses incurred in sales and
promotional activities, including advertising expenditures related to the Class
B shares of the Fund; (v) the costs of preparing and distributing promotional
materials; (vi) the cost of printing the Fund's Prospectus and Statement of
Additional Information for distribution to potential investors; and (vii) such
other similar services that the Trustees of the Fund determine are reasonably
calculated to result in the sale of Class B shares of the Fund. The Fund shall
also pay the Distributor, at the end of each month, an amount on an annual basis
equal to 0.25% of the average daily value of the net assets of the Fund's Class
B shares, as compensation for providing personal service to shareholders,
including assistance in connection with inquiries relating to shareholder
accounts, and for maintaining shareholder accounts (the "Service Fee").
<PAGE>
Any reduction to amounts payable under this Plan shall first be to the
extent of the Service Fee, and then from the balance of the 12b-1 Fee.
Amounts paid or payable by the Fund under this Plan or any agreement
with any person or entity relating to the implementation of this Plan ("related
agreement") shall only be used to pay for, or reimburse payment for, the
distribution expenditures described in the preceding paragraph and shall, given
all surrounding circumstances, represent charges within the range of what would
have been negotiated at arm's length as payment for the specific sales or
promotional services and activities to be financed hereunder and any related
agreement, as determined by the Trustees of the Fund, in the exercise of
reasonable business judgment, in light of fiduciary duties under state law and
Sections 36(a) and (b) of the Act and based upon appropriate business estimates
and projections.
Any Distribution Agreement in respect of Class B shares may provide
that (I) the Distributor in respect of such Distribution Agreement will be
deemed to have fully earned its Allocable Portion (as hereinafter defined) of
the Distribution Fee in respect of Class B shares of such series upon the sale
of each "Initial Issue Commission Share" (as hereinafter defined) of such series
taken into account in determining the Distributor's Allocable Portion of such
Distribution Fee; (II) except as provided in (III) below, the Fund's obligation
to pay such Distributor its Allocable Portion of the Distribution Fee payable in
respect of the Class B shares of the Fund shall be absolute and unconditional
and shall not be subject to dispute, offset, counterclaim or any defense
whatsoever (it being understood that such provision is not a waiver of the
Fund's right to pursue the Distributor and enforce such claims against the
assets of the Distributor other than its right to the Distribution Fees in
respect of the Class B shares of the Fund); (III) the Fund's obligation to pay
the Distributor its Allocable Portion of the Distribution Fee in respect to
Class B shares of the Fund shall not be terminated or modified except to the
extent required by a change in the Act or the Rules of Conduct enacted or
promulgated after November 17, 1999 (a"Change-in-Applicable-Law"), or in
connection with a Complete Termination (as hereinafter defined) of this Plan in
respect of the Class B shares of such series: (IV) the Trust will not waive or
change any CDSC in respect of the Class B shares of such series, except as
provided in the Trust's Prospectus or statement of additional information
without the consent of the Distributor (or its assigns); (V) except to the
extent required by a Change-in-Applicable-Law, neither the termination of such
Distributor's role as distributor of the Class B shares of such series, nor the
termination of such Distribution Agreement nor the termination of this Plan will
terminate such Distributor's right to its Allocable Portion of the CDSC's in
respect of Class B shares of such series sold prior to such termination; (VI)
except as provided in the Trust's Prospectus and statement of additional
information, until such Distributor has been paid its Allocable Portion of the
Distribution Fee in respect of the Class B shares of such series, the Trust will
not adopt a plan of liquidation in respect of such series without the consent of
such Distributor (or its assigns); and (VII) such Distributor may sell and
assign its right to its Allocable Portion of the Distribution Fees and CDSCs
(but not such Distributor's obligations to the Trust under the Distribution
Agreement) to raise funds to make the expenditures related to the distribution
of Class B shares of such series and in connection therewith, upon receipt of
notice of such sale and assignment, the Trust shall pay to the purchaser or
assignee such portion of the Distributor's Allocable Portion
<PAGE>
of the Distribution Fees in respect of the Class B shares of such series so sold
or assigned.
For purposes of this Plan, the term "Allocable Portion" means, in respect of
Distribution Fees payable in respect of the Class B shares of any series as
applied to any Distributor, the portion of such Distribution Fees and CDSCs
allocated to such Distributor in accordance with the Allocation Schedule (as
hereinafter defined). For purposes of this Plan, the term "Complete Termination"
of this Plan means, in respect of any series, a termination of this Plan
involving the cessation of payments of Distribution Fees hereunder in respect of
Class B shares of such series and the cessation of payments of distribution fees
pursuant to every other rule 12b-1 plan of the Trust in respect of such series
for every future class of shares which, in the good faith determination of the
Board of Trustees of the Trust , has substantially similar economic
characteristics to the Class B shares taking into account the total sales
charge, contingent deferred sales charge and other similar charges, it being
understood that the existing Class A shares and existing Class C shares do not
have substantially similar economic characteristics to the Class B shares. For
purposes of this Plan, the term "Allocation Schedule" means, in respect of the
Class B shares of any series, a schedule which shall be approved in the same
manner as this Plan as contemplated by Section 4 hereof for assigning to each
Distributor of Class B shares of such series the portion of the total
Distribution Fees payable by the Trust in respect of the Class B shares of such
series which has been earned by such Distributor, which shall be attached to and
become a part of any Distribution Agreement in respect of Class B shares
provided that where there is only one Distributor at any given time, the
Allocation Schedule shall mean all of the total Distribution Fees payable by the
Trust in respect of the Class B shares of such series which has been earned by
such Distributor. For purposes of clause (I) of the first sentence of this
Section 2, the term "Initial Issue Commission Share" shall mean, in respect of
any series, a Class B share which is a Commission Share issued by such series
under circumstances other than in connection with a permitted free exchange with
another fund. For purposes of the foregoing definition, a "Commission Share"
shall mean, in respect of any series, each Class B share of such series which is
issued under circumstances which would normally give rise to an obligation of
the holder of such Class B share to pay a CDSC upon redemption of such share,
including, without limitation, any Class B share of such Fund issued in
connection with a permitted free exchange, and any such Class B share shall not
cease to be a Commission Share prior to the redemption (including a redemption
in connection with a permitted free exchange) or conversion even though the
obligation to pay the CDSC shall have expired or conditions for thereof still
exist.
3. Reports
At least quarterly in each year this Plan remains in effect, the Fund's
Principal Accounting Officer or Treasurer, or such other person authorized to
direct the disposition of monies paid or payable by the Fund, shall prepare and
furnish to the Trustees of the Fund for their review, and the Trustees shall
review, a written report complying with the requirements of Rule 12b-l under the
Act regarding the amounts expended under this Plan and the purposes for which
such expenditures were made.
<PAGE>
4. Required Approval
This Plan shall not take effect until it, together with any related
agreement, has been approved by a vote of at least a majority of the Fund's
Trustees as well as a vote of at least a majority of the Trustees of the Fund
who are not interested persons (as defined in the Act) of the Fund and who have
no direct or indirect financial interest in the operation of this Plan or in any
related agreement (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on this Plan or any related agreement and this
Plan shall not take effect with respect to the Fund until it has been approved
by a vote of at least a majority of the outstanding voting Class B shares (as
such phrase is defined in the Act).
5. Term
This Plan shall remain in effect for one year from the date of its
adoption and may be continued thereafter if specifically approved at least
annually by a vote of at least a majority of the Trustees of the Fund as well as
a majority of the Disinterested Trustees. This Plan may be amended at any time,
provided that (a) the Plan may not be amended to increase materially the amount
of the distribution expenses provided in Paragraph 2 hereof (including the
Service Fee) without the approval of at least a majority of the outstanding
voting securities (as defined in the Act) of the Class B shares of the Fund and
(b) all material amendments to this Plan must be approved by a majority vote of
the Trustees of the Fund and of the Disinterested Trustees cast in person at a
meeting called for the purpose of such vote.
<PAGE>
6. Selection of Disinterested Trustees
While this Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the Act) of the Fund shall be
committed to the discretion of the Disinterested Trustees then in office.
7. Related Agreements
Any related agreement shall be in writing and shall provide that (a)
such agreement shall be subject to termination, without penalty, by vote of a
majority of the outstanding voting securities (as defined in the Act) of the
Class B shares of the Fund on not more than 60 days' written notice to the other
party to the agreement and (b) such agreement shall terminate automatically in
the event of its assignment.
8. Termination
This Plan may be terminated at any time by a vote of a majority of the
Disinterested Trustees or by a vote of a majority of the outstanding voting
securities (as defined in the Act) of the Class B shares of the Fund. In the
event this Plan is terminated or otherwise discontinued, no further payments
hereunder will be made hereunder.
9. Records
The Fund shall preserve copies of this Plan and any related agreements
and all reports made pursuant to Paragraph 3 hereof, and any other information,
estimates, projections and other materials that serve as a basis therefor,
considered by the Trustees of the Fund, for a period of not less than six years
from the date of this Plan, the agreement or report, as the case may be, the
first two years in an easily accessible place.
[Adopted at a duly held meeting of the Board of Trustees on November
17,1999]
Exhibit o.1
Amended and Restated Rule 18f-3 Multi-Class Distribution Plan
<PAGE>
PHOENIX FUNDS
(the "Funds")
AMENDED AND RESTATED
PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
1. Introduction
------------
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Funds,
including the separate classes of shares' arrangements for distribution, the
method for allocating expenses to those classes and any related conversion or
exchange privileges applicable to these classes.
Upon the original effective date of this Plan, the Funds shall offer
multiple classes of shares, as described herein, pursuant to Rule 18f-3 and this
Plan.
2. The Multi-Class Structure
-------------------------
Each of the portfolios of the Funds (each a "Multi-Class Portfolio" and
collectively the "Multi-Class Portfolios") listed on Schedule A hereto shall
offer up to three classes of shares as indicated on Schedule A: Class A, Class
B, and Class C Shares of the Multi-Class Portfolios shall represent an equal pro
rata interest in the respective Multi-Class Portfolio and, generally, shall have
identical voting, dividend, liquidation, and other rights, preferences, powers,
restrictions, limitations, qualifications and terms and conditions, except that:
(a) each class shall have a different designation; (b) each class shall bear any
Class Expenses, as defined by Section 2(b), below; (c) each class shall have
exclusive voting rights on any matter submitted to shareholders that relates
solely to its distribution arrangement; and (d) each class shall have separate
voting rights on any matter submitted to shareholders in which the interests of
one class differ from the interests of any other class. In addition, Class A,
Class B, and Class C shares shall have the features described in Sections a, b,
c and d, below.
a. Distribution Plans
------------------
The Funds have adopted Distribution Plans pursuant to Rule 12b-1 with
respect to each Multi-Class Portfolio containing substantially the following
terms:
i. Class A shares of each Multi-Class Portfolio shall
reimburse Phoenix Equity Planning Corporation (the "Distributor") for costs and
expenses incurred in connection with distribution and marketing of shares
thereof, as provided in the Class A Distribution Plan and any supplements
thereto, subject to an annual limit of 0.25% of the average daily net assets of
a Multi-Class Portfolio's Class A shares.
<PAGE>
ii. Class B shares of each Multi-Class Portfolio shall
reimburse the Distributor for costs and expenses incurred in connection with
distribution and marketing of shares thereof, as provided in the Class B
Distribution Plan and any supplements thereto, subject to an annual limit of
1.00% of the average daily net assets of a Multi-Class Portfolio's Class B
shares.
iii. Class C shares of each Multi-Class Portfolio shall
reimburse the Distributor for costs and expenses incurred in connection with
distribution and marketing of shares thereof, as provided in the Class C
Distribution Plan and any supplements thereto, subject to an annual limit of
1.00%, or in some cases 0.50%, of the average daily net assets of a Multi-Class
Portfolio's Class C shares.
b. Allocation of Income and Expenses
---------------------------------
i. General.
--------
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of each
Multi-Class Portfolio shall be allocated to each class on the basis of its net
asset value relative to the net asset value of the Multi-Class Portfolio.
Expenses to be so allocated include expenses of the Funds that are not
attributable to a particular Multi-Class Portfolio or class of a Multi-Class
Portfolio but are allocated to a Multi- Class Portfolio ("Fund Expenses") and
expenses of a particular Multi-Class Portfolio that are not attributable to a
particular class of that Multi-Class Portfolio ("Portfolio Expenses"). Fund
Expenses include, but are not limited to, trustees' fees, insurance costs and
certain legal fees. Portfolio Expenses include, but are not limited to, certain
state registration fees, custodial fees, advisory fees and other expenses
relating to the management of the Multi-Class Portfolio's assets.
ii. Class Expenses.
---------------
Expenses attributable to a particular class ("Class Expenses")
shall be limited to: (1) transfer agency fees; (2) stationery, printing,
postage, and delivery expenses relating to preparing and distributing
shareholder reports, prospectuses, and proxy statements; (3) state Blue Sky
registration fees; (4) SEC registration fees; (5) expenses of administrative
personnel and services to the extent related to another category of
class-specific expenses; (6) trustees' fees and expenses; (7) accounting
expenses, auditors' fees, litigation expenses, and legal fees and expenses; and
(8) expenses incurred in connection with shareholder meetings. Expenses
described in subsection (a) (i),(ii) and (iii) above of this paragraph (12b-1
Expenses) must be allocated to the class for which they are incurred. All other
expenses described in this paragraph will be allocated as Class Expenses, if a
Fund's President and Treasurer have determined, subject to Board approval or
ratification, which of such categories of expenses will be treated as Class
Expenses, consistent with applicable legal principles under the 1940 Act and the
Internal Revenue Code of 1986, as amended ("Code"). The difference between the
Class Expenses (other than 12b-1 Expenses) allocated to each share of a class
during a year and the Class Expenses allocated to each share of any other class
during such year shall at all times be less than .50% of the average daily net
asset value of the class of shares with the smallest average net asset value.
2
<PAGE>
The afore-described description of Class Expenses and any amendment thereto
shall be subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that any such allocation
of expenses or the assessment of higher distribution fees and transfer agency
costs on any class of shares does not result in any dividends or distributions
constituting "preferential dividends" under the Code.
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense or Portfolio Expense as applicable, and in the event a Fund Expense or
Portfolio Expense becomes allocable as a Class Expense, it shall be so
allocated, subject to compliance with Rule 18f-3 and Board approval or
ratification.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto as set forth in this Plan
shall be reviewed by the Board of Trustees and approved by such Board and by a
majority of the Trustees who are not "interested persons" of the Fund, as
defined in the 1940 Act ("Independent Trustees").
iii. Waivers or Reimbursements of Expenses.
--------------------------------------
Investment Advisor may waive or reimburse its management fee
in whole or in part provided that the fee is waived or reimbursed to all shares
of the Fund in proportion to the relative average daily net asset values.
Investment Advisor or a related entity who charges a fee for a
Class Expense may waive or reimburse that fee in whole or in part only if the
revised fee more accurately reflects the relative cost of providing to each
Multi-Class Portfolio the service for which the Class Expense is charged.
Distributor may waive or reimburse a Rule 12b- 1 Plan fee
payment in whole or in part.
c. Exchange Privileges
-------------------
Shareholders of a Multi-Class Portfolio may exchange shares of a
particular class for shares of the same class in another Multi-Class Portfolio,
or in another portfolio of an open-end investment company managed by the
Investment Advisor or an affiliate of the Investment Advisor that permits
corresponding exchanges, at the relative net asset values of the respective
shares to be exchanged and with no sales charge, provided the shares to be
acquired in the exchange are, as may be necessary, qualified for sale in the
shareholder's state of residence and subject to the applicable requirements, if
any, as to minimum amount. Each Multi-Class
3
<PAGE>
Portfolio reserves the right to temporarily or permanently terminate exchange
privileges, impose conditions upon the exercise of exchange privileges, or
reject any specific order for any dealer, shareholder or person whose
transactions seem to follow a timing pattern, including those who request more
than one exchange out of a Multi-Class Portfolio within any thirty (30) day
period. Each Multi-Class Portfolio reserves the right to terminate or modify
these exchange privileges at any time upon giving prominent notice to
shareholders at least 60 days in advance.
d. Conversion Feature
------------------
Class B Shares of a Multi-Class Portfolio will automatically convert to
Class A Shares of that portfolio, without sales charge, at the relative net
asset values of each such classes, not later than eight years from the
acquisition of the Class B Shares. The conversion of Class B Shares to Class A
Shares is subject to the continuing availability of an opinion of counsel or a
ruling from the Internal Revenue Service to the effect that the conversion of
shares does not constitute a taxable event under federal income tax law.
3. Board Review
------------
a. Approval of Amended and Restated Plan
-------------------------------------
The Board of Trustees, including a majority of the Independent
Trustees, at a meeting held on November 17,1999 approved the Amended and
Restated Plan based on a determination that the Plan, including the expense
allocation, is in the best interests of each class and Multi-Class Portfolio
individually and of the Funds. Their determination was based on their review of
information furnished to them which they deemed reasonably necessary and
sufficient to evaluate the Plan.
b. Approval of Amendments
----------------------
The Plan may not be amended materially unless the Board of Trustees,
including a majority of the Independent Trustees, have found that the proposed
amendment, including any proposed related expense allocation, is in the best
interests of each class and Multi-Class Portfolio individually and of the Funds.
Such funding shall be based on information required by the Board and furnished
to them that the Board deems reasonably necessary to evaluate the proposed
amendment.
c. Periodic Review
---------------
The Board shall review reports of expense allocations and such other
information as they request at such times, or pursuant to such schedule, as they
may determine consistent with applicable legal requirements.
4
<PAGE>
4. Contracts
---------
Any agreement related to the Multi-Class System shall require the
parties thereto to furnish to the Board of Trustees, upon their request, such
information as is reasonably necessary to permit the Trustees to evaluate the
Plan or any proposed amendment.
5. Effective Date
--------------
The Amended and Restated Plan, having been reviewed and approved by the
Board of Trustees and the Independent Trustees, shall take effect as of the
first day of each Fund's current fiscal year.
6. Amendments
----------
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in Section 3(b) of this
Plan.
C:/Docs/Mutual Fund Agreements/Rule 18f3 Plans Nov 1999
5
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
(Updated as of November 17, 1999)
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
PHOENIX-GOODWIN CALIFORNIA TAX-EXEMPT BONDS, INC. X X -
PHOENIX EQUITY SERIES FUND:
PHOENIX-DUFF & PHELPS CORE EQUITY FUND X X X
PHOENIX-OAKHURST GROWTH AND INCOME FUND X X X
PHOENIX-OAKHURST INCOME AND GROWTH FUND X X X
PHOENIX INVESTMENT TRUST 97:
PHOENIX-HOLLISTER SMALL CAP VALUE FUND X X X
PHOENIX-HOLLISTER VALUE EQUITY FUND X X X
PHOENIX MULTI-PORTFOLIO FUND:
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND X X X
PHOENIX-ABERDEEN INTERNATIONAL FUND X X X
PHOENIX-SENECA MID-CAP FUND X X -
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND X X -
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND X X -
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND X X X
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC. X X X
PHOENIX GOODWIN MULTI-SECTOR SHORT TERM BOND FUND X X X
PHOENIX SERIES FUND:
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND X X -
PHOENIX-OAKHURST BALANCED FUND X X -
PHOENIX-ENGEMANN CAPITAL GROWTH FUND X X -
PHOENIX-GOODWIN HIGH YIELD FUND X X X
PHOENIX-GOODWIN MONEY MARKET FUND X X X
PHOENIX-DUFF & PHELPS CORE BOND FUND X X X
PHOENIX STRATEGIC EQUITY SERIES FUND:
PHOENIX-SENECA EQUITY OPPORTUNITIES FUND X X -
PHOENIX-ENGEMANN SMALL CAP FUND X X -
PHOENIX-SENECA STRATEGIC THEME FUND X X X
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC. X X -
PHOENIX-ABERDEEN WORLDWIDE OPPORTUNITIES FUND X X X
</TABLE>
Exhibit o.2
First Amendment to the Amended and Restated
Rule 18f-3 Multi-Class Distribution Plan
<PAGE>
PHOENIX FUNDS
(the "Funds")
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
That certain Amended and Restated Plan Pursuant to Rule 18f-3 under the
Investment Company Act of 1940 duly adopted by the Board of Directors/Trustees
of the Funds on November 17, 1999, is hereby amended as follows:
The Board of Directors/Trustees has granted authority for the following
additional Fund to issue Class C Shares:
Phoenix Strategic Equity Series Fund: Phoenix-Seneca Equity
Opportunities Fund
Additionally, the Board of Directors/Trustees has granted authority for the
following Funds to issue Class X Shares:
Phoenix Multi-Portfolio Fund: Phoenix-Seneca Tax Sensitive Growth Fund
Phoenix Strategic Equity Series Fund: Phoenix-Seneca Equity
Opportunities Fund
Accordingly, Schedule A is amended as attached hereto.
This Amendment was approved by the Board of Directors/Trustees at a
meeting held on February 24, 2000.
/s/ Pamela S. Sinofsky
-----------------------------
Assistant Secretary
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
(Updated as of February 25, 2000)
Class A Class B Class C Class X
------- ------- ------ -------
<S> <C> <C> <C> <C>
PHOENIX-GOODWIN CALIFORNIA TAX-EXEMPT BONDS, INC. X X -
PHOENIX EQUITY SERIES FUND:
PHOENIX-DUFF & PHELPS CORE EQUITY FUND X X X
PHOENIX-OAKHURST GROWTH AND INCOME FUND X X X
PHOENIX-OAKHURST INCOME AND GROWTH FUND X X X
PHOENIX INVESTMENT TRUST 97:
PHOENIX-HOLLISTER SMALL CAP VALUE FUND X X X
PHOENIX-HOLLISTER VALUE EQUITY FUND X X X
PHOENIX MULTI-PORTFOLIO FUND:
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND X X X
PHOENIX-ABERDEEN INTERNATIONAL FUND X X X
PHOENIX-SENECA MID-CAP FUND X X -
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND X X -
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND X X -
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND X X X X
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC. X X X
PHOENIX GOODWIN MULTI-SECTOR SHORT TERM BOND FUND X X X
PHOENIX SERIES FUND:
PHOENIX-ENGEMANN AGGRESSIVE GROWTH FUND X X -
PHOENIX-OAKHURST BALANCED FUND X X -
PHOENIX-ENGEMANN CAPITAL GROWTH FUND X X -
PHOENIX-GOODWIN HIGH YIELD FUND X X X
PHOENIX-GOODWIN MONEY MARKET FUND X X X
PHOENIX-DUFF & PHELPS CORE BOND FUND X X X
PHOENIX STRATEGIC EQUITY SERIES FUND:
PHOENIX-SENECA EQUITY OPPORTUNITIES FUND X X X X
PHOENIX-ENGEMANN SMALL CAP FUND X X -
PHOENIX-SENECA STRATEGIC THEME FUND X X X
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC. X X -
PHOENIX-ABERDEEN WORLDWIDE OPPORTUNITIES FUND X X X
</TABLE>
Exhibit p.1
Code of Ethics of the Fund
<PAGE>
PHOENIX FUNDS
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
PHOENIX-ABERDEEN SERIES FUND
PHOENIX EQUITY PLANNING CORP.
AMENDED AND RESTATED
CODE OF ETHICS
1. Statement of Ethical Principles
-------------------------------
When Fund Access Persons covered by the terms of this Code of Ethics
engage in personal securities transactions, they must adhere to the
following general principles as well as to the Code's specific
provisions:
A. At all times, the interests of Fund shareholders must be
paramount;
B. Personal transactions must be conducted consistent with
this Code of Ethics in a manner that avoids any actual or
potential conflict of interest; and
C. No inappropriate advantage should be taken of any
position of trust and responsibility.
2. Definitions
-----------
A. "Fund" means each and every investment company, or series
thereof, or other institutional account managed by the
Adviser, individually and collectively.
B. "Access Person" means any Trustee (other than a
Disinterested Trustee who does not obtain information
concerning recommendations made to the Fund regarding the
purchase or sale of a security), officer, general partner,
Portfolio Manager or Advisory Person of the Fund or (i) any
temporary or permanent employee of the Fund or of any company
in a control relationship to the Fund, who, in connection with
his regular functions or duties, makes, participates in or
obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making
of any recommendations with respect to such purchases or
sales; and (ii) any natural person in a control relationship
to the Fund who obtains information concerning recommendations
made to the Fund with regard to the purchase or sale of a
security. The Compliance Officer of each Fund shall maintain a
list of the Fund's Access Persons.
C. "Advisory Person" means any Portfolio Manager or other
investment person, such as an analyst or trader, who provides
information and advice to a Portfolio Manager or assists in
the execution of the investment decisions. For purposes of
Section 4, "Advisory Person" shall not include Portfolio
Managers.
p.1
<PAGE>
D. A security is "being considered for purchase or sale"
when a recommendation to purchase or sell a security has been
made and communicated and, with respect to the Advisory Person
making the recommendation, when such person seriously
considers making such a recommendation.
E. "Beneficial ownership" shall be interpreted in the same
manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder,
except that the determination of direct or indirect beneficial
ownership shall apply to all securities which an Access Person
has or acquires.
F. "Control" shall have the same meaning as that set forth
in Section 2(a)(9) of the Investment Company Act, as amended.
G. "Disinterested Trustee" means a Trustee of a Fund who is
not an "interested person" of the Fund within the meaning of
Section 2(a)(19) of the Investment Company Act, as amended.
H. "Initial Public Offering" means a public sale of an issue
not previously offered to the public.
I. "Managed Fund" shall mean those Funds, individually and
collectively, for which the Portfolio Manager makes buy and
sell decisions.
J. "Portfolio Manager" means the person entrusted to make
the buy and sell decisions for a Fund.
K. "Private Placement" shall have the same meaning as that
set forth in Section 4(2) of the Securities Exchange Act.
L. "Purchase or sale of a security" includes inter alia, the
writing of an option or the purchase or sale of a security
that is exchangeable for or convertible into, a security that
is held or to be acquired by a Fund.
M. "Security" shall have the meaning set forth in Section
2(a)(36) of the Investment Company Act, as amended, except
that it shall not include securities issued by the Government
of the United States, bankers' acceptances, bank certificates
of deposit, commercial paper and shares of registered open-end
investment companies.
3. Exempted Transactions
---------------------
The prohibitions of Section 4 of this Code shall not apply to:
A. Purchases or sales effected in any account over which the
Access Person has no direct or indirect influence or control
in the reasonable estimation of the Compliance Officer.
p.2
<PAGE>
B. Purchases or sales of securities (1) not eligible for
purchase or sale by the Fund; or (2) specified from time to
time by the Trustees, subject to such rules, if any, as the
Trustees shall specify.
C. Purchases or sales which are non-volitional on the part
of either the Access Person or the Fund.
D. Purchases of shares necessary to establish an automatic
dividend reinvestment plan or pursuant to an automatic
dividend reinvestment plan, and subsequent sales of such
securities.
E. Purchases effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired.
4. Prohibited Activities
---------------------
A. IPO Rule: No Advisory Person or Portfolio Manager may
purchase securities in an Initial Public Offering, except with
the prior approval of the Compliance Officer of the Fund.
B. Private Placement Rule: No Advisory Person or Portfolio
Manager may purchase securities in a Private Placement unless
such purchase has been approved by the Compliance Officer of
the Fund. Any such approved purchase should be disclosed to
the Fund if that issuer's securities are being considered for
purchase or sale by the Fund.
C. Preclearance Rule: No Access Person, Advisory Person nor
Portfolio Manager may purchase or sell a security unless such
purchase or sale has been precleared by the Compliance Officer
of the Fund. Preclearance is shall be valid through the
business day next following the day preclearance is given.
Exceptions: The following securities transactions are exempt
from the pre-clearance requirement:
1. Purchases or sales of up to 1,000 shares of
securities of issuers ranked within the top
200 Standard & Poor's 500 Composite Stock
Index (S&P 500) ("Large Cap List") at the
time of purchase or sale. The Compliance
Officer of the Fund shall distribute an
updated list of such securities quarterly.
2. Purchase orders sent directly to the issuer
via mail (other than in connection with a
Private Placement) or sales of such
securities which are redeemed directly by
the issuer via mail.
p.3
<PAGE>
NOTE: THE COMPLIANCE OFFICER OF THE FUND MAY DENY APPROVAL OF
ANY TRANSACTION REQUIRING PRECLEARANCE UNDER THIS PRECLEARANCE
RULE, EVEN IF NOMINALLY PERMITTED UNDER THIS CODE OF ETHICS,
IF HE/SHE REASONABLY BELIEVES THAT DENYING PRECLEARANCE IS
NECESSARY FOR THE PROTECTION OF A FUND. ANY SUCH DENIAL MAY BE
APPEALED TO THE FUND'S COUNSEL. THE DECISION OF COUNSEL SHALL
BE FINAL.
D. Open Order Rule: No Access Person, Advisory Person or
Portfolio Manager may purchase or sell, directly or
indirectly, any security in which he has, or by reason of such
transaction acquires, any direct or indirect beneficial
ownership, when a Fund has a pending "buy" or "sell" order for
that security of the same type (i.e. buy or sell) as the
proposed personal trade, until the Fund's order is executed or
withdrawn.
Exceptions: The following securities transactions are exempt
from the Open Order Rule:
1. Purchases or sales of up to 1,000 shares of
securities of issuers on the Large Cap List at
the time of the transaction.
2. Purchases or sales approved by the Compliance
Officer of the Fund in his/her discretion.
ANY PROFITS REALIZED ON A PERSONAL TRADE IN VIOLATION OF THIS
SECTION 4D MUST BE DISGORGED.
E. Blackout Rule: If a Portfolio Manager's Managed Fund
holds a security that is the subject of a proposed personal
trade by that Portfolio Manager, such personal trade may be
permitted only as follows:
1. If the proposed personal trade is on the same
side as the last Managed Fund transaction in
that security, the personal trade cannot occur
within two days of such Managed Fund
transaction (i.e. neither at T nor T + 1
calendar day).
2. If the proposed personal trade is on the
opposite side of the last Managed Fund
transaction in that security, the personal
trade cannot occur unless (a) it is more than
two days after the Managed Fund transaction
(i.e. T + 2 calendar days or later) AND (b) the
Preclearance Request, if required for such
personal transaction (i.e. it is not eligible
for The Large Cap List exception to the
Preclearance Rule) sets forth, to the
reasonable satisfaction of the Compliance
Officer, an explanation of the reasons the
Managed Fund is not effecting a similar
transaction.
Transactions permitted under the Blackout Rule must also
satisfy the Open Order Rule and the Preclearance Rule if and
to the extent the transaction is not covered by exceptions to
those rules.
ANY PROFITS REALIZED BY A PORTFOLIO MANAGER ON A PERSONAL
TRADE IN VIOLATION OF THIS SECTION 4E MUST BE DISGORGED.
p.4
<PAGE>
F. Holding Period Rule: Access Persons, Advisory Persons
and Portfolio Managers must hold each Security, other than
those described in Section 3B, (securities (1) not eligible
for purchase or sale by the Fund; or (2) specified from time
to time by the Trustees, subject to such rules, if any, as the
Trustees shall specify) for a period of not less than six (6)
months, whether or not the purchase of such Security was an
exempt transaction under any other provision of Section 4.
ANY PROFITS REALIZED ON TRADING IN CONTRAVENTION OF THIS
POLICY MUST BE DISGORGED.
G. No Advisory Person shall annually accept any gift or
other item of more than de minimis value from any person or
entity that does business with or on behalf of the Fund.
H. No Advisory Person shall serve on the board of
directors of a publicly traded company without prior
authorization by the President or the Compliance Officer of
the Fund. If board service is authorized, such Advisory Person
shall have no role in making investment decisions with respect
to the publicly traded company.
5. Compliance Procedures
---------------------
A. All Access Persons shall direct their brokers to
supply, at the same time that they are sent to the Access
Person, a copy of the confirmation for each personal
securities trade and a copy of each periodic account statement
to the Fund's Compliance Officer.
B. Every Access Person shall report to the Fund the
information described in Section 5D of this Code with respect
to transactions in any security in which such Access Person
has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership in the security; provided,
however, that an Access Person shall not be required to make a
report with respect to transactions effected for any account
over which such person does not have any direct or indirect
influence.
C. A Disinterested Trustee of the Fund need only report a
transaction in a security if such Trustee, at the time of that
transaction knew or, in the ordinary course of fulfilling his
official duties as a Trustee of the Fund, should have known
that, (1) during the 7-day period immediately preceding or
after the date of the transaction by the Trustee, such
security was purchased or sold by the Fund or (2) such
security was being considered for purchase or sale by the
Fund.
D. Every report required pursuant to Section 5B above
shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report
relates was effected, and shall contain the following
information:
(i) The date of the transaction, the title and the
number of shares, and the principal amount of each
security involved;
(ii) The nature of the transaction (i.e., purchase,
sale, or any other type of acquisition or disposition);
(iii) The price at which the transaction was effected;
p.5
<PAGE>
(iv) The name of the broker, dealer or bank with or
through whom the transaction was effected; and
(v) The date of approval of the transaction and the
person who approved it as required by Section 4B or C
above.
E. Each Access Person shall submit a report listing all
personal securities holdings to the Compliance Officer upon
the commencement of service and annually thereafter. This
annual report shall be and include a certification by the
Access Person that he or she has read and understood the Code
of Ethics and has complied with the Code's requirements.
F. Any report made under this Section 5 may contain a
statement that the report shall not be construed as an
admission by the person making such report that he or she has
any direct or indirect beneficial ownership in the security to
which the report relates.
G. The Compliance Officer shall submit an annual report to
the Fund's Board of Trustees that summarizes the current Code
of Ethics procedures, identifies any violations requiring
significant remedial action, and recommends appropriate
changes to the Code, if any.
H. Any Access Person or Disinterested Trustee shall
immediately report any potential violation of this Code of
which he or she becomes aware to the Fund's Compliance
Officer.
6. Sanctions
---------
Upon discovering a violation of this Code, the Board of Trustees of the
Fund may impose such sanctions as it deems appropriate, including inter
alia, a letter of censure or suspension or termination of employment,
or suspension of personal trading privileges for such period as it may
deem appropriate.
p.6
<PAGE>
PHOENIX FUNDS
PHOENIX DUFF & PHELPS INSTITUTIONAL MUTUAL FUNDS
PHOENIX-ABERDEEN SERIES FUND
AMENDED AND RESTATED
CODE OF ETHICS
ADDENDUM
As stated in Section 3B(2) of the Code of Ethics, the Trustees/Directors may
specify from time to time, EXEMPTED TRANSACTIONS, which are purchases or sales
of securities which are exempt from Section 4 of the Code.
The following transactions have been specified as EXEMPT TRANSACTIONS by the
Trustees/Directors:
1. Purchases or sales of securities trading at less than $5.00 per share at the
time of the trade. (Nov. '96)
2. Purchases or sales of securities issued by Phoenix Investment Partners, Ltd.
(Aug. '97)
3. Purchases or sales by Directors or Trustees who are not employees of the
adviser or distributor of a fund or any affiliates thereof provided such
Director or Trustee does not obtain information concerning recommendations
to the Fund regarding the purchase or sale of a security. (Nov.'97)
p.7
<PAGE>
PHOENIX INVESTMENT COUNSEL, INC.
AMENDED AND RESTATED
CODE OF ETHICS
1. Statement of Ethical Principles
-------------------------------
When Fund Access Persons covered by the terms of this Code of Ethics
engage in personal securities transactions, they must adhere to the
following general principles as well as to the Code's specific
provisions:
A. At all times, the interests of Fund shareholders must be
paramount;
B. Personal transactions must be conducted consistent with
this Code of Ethics in a manner that avoids any actual or
potential conflict of interest; and
C. No inappropriate advantage should be taken of any position
of trust and responsibility.
2. Definitions
-----------
A. "Fund" means each and every investment company, or series
thereof, or other institutional account managed by the
Adviser, individually and collectively.
B. "Access Person" means any Trustee (other than a
Disinterested Trustee who does not obtain information
concerning recommendations made to the Fund regarding the
purchase or sale of a security), officer, general partner,
Portfolio Manager or Advisory Person of the Fund or (i) any
temporary or permanent employee of the Fund or of any company
in a control relationship to the Fund, who, in connection with
his regular functions or duties, makes, participates in or
obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making
of any recommendations with respect to such purchases or
sales; and (ii) any natural person in a control relationship
to the Fund who obtains information concerning recommendations
made to the Fund with regard to the purchase or sale of a
security. For purposes of Section 4, "Access Person" shall not
include Advisory Persons nor Portfolio Managers. The
Compliance Officer of each Fund shall maintain a list of the
Fund's Access Persons.
p. 1
<PAGE>
C. "Advisory Person" means any Portfolio Manager or other
investment person, such as an analyst or trader, who provides
information and advice to a Portfolio Manager or assists in
the execution of the investment decisions. For purposes of
Section 4, "Advisory Person" shall not include Portfolio
Managers.
D. A security is "being considered for purchase or sale" when
a recommendation to purchase or sell a security has been made
and communicated and, with respect to the Advisory Person
making the recommendation, when such person seriously
considers making such a recommendation.
E. "Beneficial ownership" shall be interpreted in the same
manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder,
except that the determination of direct or indirect beneficial
ownership shall apply to all securities which an Access Person
has or acquires.
F. "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Investment Company Act, as amended.
G. "Disinterested Trustee" means a Trustee of a Fund who is
not an "interested person" of the Fund within the meaning of
Section 2(a)(19) of the Investment Company Act, as amended.
H. "Initial Public Offering" means a public sale of an issue
not previously offered to
the public.
I. "Managed Fund" shall mean those Funds, individually and
collectively, for which the Portfolio Manager makes buy and
sell decisions.
J. "Portfolio Manager" means the person entrusted to make the
buy and sell decisions for a Fund.
K. "Private Placement" shall have the same meaning as that
set forth in Section 4(2) of the Securities Exchange Act.
L. "Purchase or sale of a security" includes inter alia, the
writing of an option or the purchase or sale of a security
that is exchangeable for or convertible into, a security that
is held or to be acquired by a Fund.
M. "Security" shall have the meaning set forth in Section
2(a)(36) of the Investment Company Act, as amended, except
that it shall not include securities issued by the Government
of the United States, bankers' acceptances, bank
p. 2
<PAGE>
certificates of deposit, commercial paper and shares of
registered open-end investment companies.
N. "Short term trading" is buying and then selling or selling
and then buying the same (or equivalent) securities within
seven (7) calendar days (e.g. opening transaction at "T" and
closing transaction at T + 6 calendar days or less).
3. Exempted Transactions
---------------------
The prohibitions of Section 4 of this Code shall not apply to:
A. Purchases or sales effected in any account over which the
Access Person has no direct or indirect influence or control
in the reasonable estimation of the Compliance Officer.
B. Purchases or sales of securities (1) not eligible for
purchase or sale by the Fund; or (2) specified from time to
time by the Trustees, subject to such rules, if any, as the
Trustees shall specify.
C. Purchases or sales which are non-volitional on the part of
either the Access Person or the Fund.
D. Purchases of shares necessary to establish an automatic
dividend reinvestment plan or pursuant to an automatic
dividend reinvestment plan, and subsequent sales of such
securities.
E. Purchases effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its
securities, to the extent such rights were acquired from such
issuer, and sales of such rights so acquired.
4. Prohibited Activities
---------------------
A. IPO Rule: No Advisory Person or Portfolio Manager may
purchase securities in an Initial Public Offering,
except with the prior approval of the Compliance Officer of
the Fund.
B. Private Placement Rule: No Advisory Person or Portfolio
Manager may purchase securities in a Private Placement unless
such purchase has been approved by the Compliance Officer of
the Fund. Any such approved purchase should be disclosed to
the Fund if that issuer's securities are being considered for
purchase or sale by the Fund. Such consideration for purchase
or sale shall be conducted by a person other than the
interested Advisory Person or Portfolio Manager.
p. 3
<PAGE>
C. Preclearance Rule: No Access Person, Advisory Person nor
Portfolio Manager may purchase or sell a security unless such
purchase or sale has been precleared by the Compliance Officer
of the Fund. Preclearance shall be valid through the business
day next following the day preclearance is given.
Exceptions: The following securities transactions are exempt
from the pre-clearance requirement:
1. Purchases or sales of up to 1,000 shares of
securities of issuers ranked within the top
200 of the Standard & Poor's 500 Composite
Stock Index (S&P 500) (the "Large Cap List")
at the time of purchase or sale. The
Compliance Officer of the Fund shall
distribute an updated list of such
securities quarterly.
2. Purchase orders sent directly to the issuer
via mail (other than in connection with a
Private Placement) or sales of such
securities which are redeemed directly by
the issuer via mail.
NOTE: THE COMPLIANCE OFFICER OF THE FUND MAY DENY APPROVAL OF
ANY TRANSACTION REQUIRING PRECLEARANCE UNDER THIS PRECLEARANCE
RULE, EVEN IF NOMINALLY PERMITTED UNDER THIS CODE OF ETHICS,
IF HE/SHE REASONABLY BELIEVES THAT DENYING PRECLEARANCE IS
NECESSARY FOR THE PROTECTION OF A FUND. ANY SUCH DENIAL MAY BE
APPEALED TO THE FUND'S COUNSEL. THE DECISION OF COUNSEL SHALL
BE FINAL.
D. Open Order Rule: No Access Person, Advisory Person or
Portfolio Manager may purchase or sell, directly or
indirectly, any security in which he has, or by reason of such
transaction acquires, any direct or indirect beneficial
ownership, when a Fund has a pending "buy" or "sell" order for
that security of the same type (i.e. buy or sell) as the
proposed personal trade, until the Fund's order is executed or
withdrawn.
Exceptions: The following securities transactions are exempt
from the Open Order Rule:
1. Purchases or sales of up to 1,000 shares of
securities of issuer on the Large Cap List at the
time of the transaction.
2. Purchases or sales approved by the Compliance
Officer of the Fund in his/her discretion.
ANY PROFITS REALIZED ON A PERSONAL TRADE IN VIOLATION OF THIS
SECTION 4D MUST BE DISGORGED.
p. 4
<PAGE>
E. Blackout Rule: If a Portfolio Manager's Managed Fund holds
a security that is the subject of a proposed personal trade by
that Portfolio Manager, such personal trade may be permitted
only as follows:
1. If the proposed personal trade is on the same side as
the last Managed Fund transaction in that security, the
personal trade cannot occur within two days of such
Managed Fund transaction (i.e. neither at T nor T + 1
calendar day).
2. If the proposed personal trade is on the opposite side
of the last Managed Fund transaction in that security, the
personal trade cannot occur unless (a) it is more than two
days after the Managed Fund transaction (i.e. T + 2
calendar days or later) AND (b) the Preclearance Request,
if required for such personal transaction (i.e. it is not
eligible for the Large Cap List exception to the
Preclearance Rule) sets forth, to the reasonable
satisfaction of the Compliance Officer, an explanation of
the reasons the Managed Fund is not effecting a similar
transaction.
Transactions permitted under the Blackout Rule must also
satisfy the Short Term Trading Rule, the Open Order Rule, and
the Preclearance Rule if and to the extent the transaction is
not covered by exceptions to those rules.
Note: Read together, the Short Term Trading Rule and the
Blackout Rule generally will require that a Portfolio Manager
must hold a position in a security until the LATER of (a) T +
7 calendar days ( T = his/her Opening Transaction); and (b) T
+ 2 (T = the Managed Fund's last transaction in that
security).
ANY PROFITS REALIZED BY A PORTFOLIO MANAGER ON A PERSONAL
TRADE IN VIOLATION OF THIS SECTION 4E MUST BE DISGORGED.
F. Short Term Trading Rule: No Advisory Person or Portfolio
Manager may engage in Short Term Trading for profit.
Exceptions:
----------
1. Advisory Persons may effect Closing Transactions (i.e.
a sale after a purchase or a purchase after a sale of the
same security) within 7 calendar days of the Opening
Transaction in that security (i.e. within T + 6 calendar
days or less) (a) if there are no Fund trades in that
security within that period; or (b) if there are Fund
trades in that security within that period, there are no
Fund trades in that security on the opposite side of the
proposed personal
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Closing Transaction occurring prior to the proposed
personal Closing Transaction. This Short Term Trading
Exception does not constitute a waiver of either the Open
Order Rule or the Preclearance Rule.
2. Portfolio Managers may effect Closing Transactions
within 7 calendar days of the Opening Transaction in that
security (i.e. within T + 6 calendar days or less (a) if
there are no Fund trades in that security within that
period; or (b) if there are Fund trades in that security
within that period, (i) there are no trades in that
security in any of his/her Managed Funds occurring prior
to the proposed personal Closing Transaction, and (ii) no
trades in that security for any other Fund on the opposite
side of the proposed personal Closing Transaction
occurring prior to the proposed personal Closing
Transaction. This Short Term Trading Exception does not
constitute a waiver of any of the Open Order Rule, the
Blackout Rule or the Preclearance Rule.
Note: Read together, the Short Term Trading Rule and the
Blackout Rule generally will require that a Portfolio Manager
must hold a position in a security until the LATER of (a) T +
7 calendar days ( T = his/her Opening Transaction); and (b) T
+ 2 (T = the Managed Fund's last transaction in that
security).
ANY PROFITS REALIZED ON SHORT TERM TRADING IN CONTRAVENTION OF
THIS POLICY MUST BE DISGORGED.
G. No Advisory Person shall accept any gift or other item of
more than de minimis value from any person or entity that does
business with or on behalf of the Fund.
H. No Advisory Person shall serve on the board of directors
of a publicly traded company without prior authorization by
the President or the Compliance Officer of the Fund. If board
service is authorized, such Advisory Person shall have no role
in making investment decisions with respect to the publicly
traded company.
5. Compliance Procedures
---------------------
A. All Access Persons shall direct their brokers to supply,
at the same time that they are sent to the Access Person, a
copy of the confirmation for each personal securities trade
and a copy of each periodic account statement to the Fund's
Compliance Officer.
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B. Every Access Person shall report to the Fund the
information described in Section 5D of this Code with respect
to transactions in any security in which such Access Person
has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership in the security; provided,
however, that an Access Person shall not be required to make a
report with respect to transactions effected for any account
over which such person does not have any direct or indirect
influence.
C A Disinterested Trustee of the Fund need only report a
transaction in a security if such Trustee, at the time of that
transaction knew or, in the ordinary course of fulfilling his
official duties as a Trustee of the Fund, should have known
that, (1) during the 7-day period immediately preceding or
after the date of the transaction by the Trustee, such
security was purchased or sold by the Fund or (2) such
security was being considered for purchase or sale by the
Fund.
D. Every report required pursuant to Section 5B above shall
be made not later than 10 days after the end of the calendar
quarter in which the transaction to which the report relates
was effected, and shall contain the following information:
(i) The date of the transaction, the title and the
number of shares, and the principal amount of each
security involved;
(ii) The nature of the transaction (i.e., purchase, sale,
or any other type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or
through whom the transaction was effected; and
(v) The date of approval of the transaction and the
person who approved it as required by Section 4B or C
above.
E. Each Access Person and Disinterested Trustee shall submit
a report listing all personal securities holdings to the
Compliance Officer upon the commencement of service and
annually thereafter. This annual report shall include a
certification by the Access Person that he or she has read and
understood the Code of Ethics and has complied with the Code's
requirements.
F. Any report made under this Section 5 may contain a
statement that the report shall not be construed as an
admission by the person making such report that he or she has
any direct or indirect beneficial ownership in the security to
which the report relates.
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G. The Compliance Officer shall submit an annual report to
the Fund's Board of Trustees that summarizes the current Code
of Ethics procedures, identifies any violations requiring
significant remedial action, and recommends appropriate
changes to the Code, if any.
H. Any Access Person or Disinterested Trustee shall
immediately report any potential violation of this Code of
which he or she becomes aware to the Fund's Compliance
Officer.
6. Sanctions
---------
Upon discovering a violation of this Code, the Board of Trustees of the
Fund may impose such sanctions as it deems appropriate, including inter
alia, a letter of censure or suspension or termination of employment,
or suspension of personal trading privileges for such period as it may
deem appropriate.
CODE-PIC.
402-REV.doc
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