<PAGE>
Phoenix Investment Partners
ANNUAL REPORT
DECEMBER 31, 1999
OAKHURST
Phoenix-Oakhurst
Strategic Allocation
Fund, Inc.
[Logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this annual report for the Phoenix-Oakhurst
Strategic Allocation Fund, Inc. for the 12 months ended December 31, 1999. On
the following pages, your Fund's portfolio management team reviews market events
over the last year and discusses their investment strategy. We hope you find
their comments informative.
With the new year just beginning, this may be a good time to review a few
"basics of investing."
REMAIN FOCUSED ON YOUR LONG-TERM INVESTMENT STRATEGY. Redeeming an investment
when the market drops or a fund's share price falls can work against you over
time. You could miss out on opportunities for your investment to grow when the
market or the fund's share price begins to move up. And over time, that could
make a big difference in how successful you are in achieving your financial
goals.
DIVERSIFY YOUR PORTFOLIO. Spreading your investments among different asset
classes and investment styles helps reduce risk. If one type of investment
doesn't perform well over a certain time period, it may be offset by the good
results of another investment.
TAKE ADVANTAGE OF DOLLAR-COST AVERAGING. You can make market fluctuations work
to your advantage by investing a set amount of money at regular intervals. This
is called dollar-cost averaging, and it means that when prices are low you will
be buying more units and when prices are high, you'll buy less. Periodic
investment plans do not assure a profit or protect against a loss in declining
markets. This type of plan involves continuous investments in securities
regardless of fluctuating price levels. Investors should consider their
financial ability to continue purchases through periods of low price levels.
Investors' biggest challenge is adopting an investing discipline and
committing to it. As always, your financial representative can provide the
insight and wisdom to help keep you on track to meet your investment goals.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
JANUARY 6, 2000
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
1
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix-Oakhurst Strategic Allocation Fund is appropriate for investors
seeking long-term capital appreciation, current income, and conservation of
capital from a balanced portfolio of stocks, bonds, and cash equivalents.
Investors should note that the Fund may hold foreign bonds, and foreign
investments pose additional risk, such as currency fluctuation, less public
disclosure, and political and economic uncertainty.
Q: CAN YOU PROVIDE A BRIEF OVERVIEW OF THE EQUITY MARKETS OVER THE LAST 12
MONTHS?
A: From December 31, 1998 to December 31, 1999, the market represented by the
large-cap S&P 500 Index(1) returned a total of 21.14%. This represented the
fifth year in a row that the S&P 500 had returned 20% or more. With the global
economy recovering in a low inflationary environment, corporate earnings
accelerated at the same time market valuations expanded.
Technology and basic material stocks led market performance during the past
year. Technology issues were propelled by the strength in the semiconductor
industry as demand finally caught up with supply due to a dramatic cutback of
capacity spending during 1998. The build-out of Internet infrastructures
accelerated the growth rate of many vendors of communication chips, networking
equipment, and computer servers. With the increasing number of corporations and
consumers populating the World Wide Web, a new class of software tools also
emerged. Web authoring, web-content management, and enterprise procurement
management are just a few examples. All of these contributed to the great
technology rally of 1999.
The surge in basic material stocks started earlier in 1999. As the Asian
economic crisis abated, there was great optimism that demand for basic
commodities would stabilize. The OPEC meeting in February rallied the price of
crude oil. The numerous unplanned outages at various chemical plants caused
commodity chemical prices to increase. The protectionism measures contemplated
by Congress curbed steel imports. The strength in the domestic housing market
made forest products scarce. These factors led to increasing earnings forecasts
for many paper, chemical, steel and oil companies. From January through May,
basic material stocks dramatically outperformed the S&P 500 Index.
On the negative side, consumer non-cyclical and health-care stocks
underperformed the market all year. Consumer stocks were hampered by earnings
disappointments from market leaders like Coke and Gillette. Many food producers
also failed to meet growth expectations. The drug stocks were slowed by
lingering talk of a Medicare-sponsored prescription benefit plan that may lower
the overall cost of medicine. In addition, major pharmaceutical companies must
also deal with the soon-to-come patent expiration of many blockbuster drugs.
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC. (CONTINUED)
Q: CAN YOU PROVIDE US WITH A BRIEF OVERVIEW OF THE BOND MARKET DURING THIS
PERIOD?
A: At the time of this writing, the bond market is definitely not a repeat of
last year. We saw Russia default, hedge funds unwind around the world, a global
liquidity crisis erupt, and a Fed response of lowering interest rates. Now we
are experiencing a record supply of issues in non-Treasury sectors, a reduced
role for Wall Street as a market liquidity provider, and a Fed bias toward
higher rates. The "flight to quality" environment has reversed itself, and for
most of this reporting period, higher yielding sectors were the best performing.
Q: HOW DID THE FUND PERFORM IN THIS ENVIRONMENT?
A: For the 12 months ended December 31, 1999, Class A shares returned 10.97% and
Class B shares returned 10.14% compared with a return of 11.55% for a composite
benchmark index comprised of 55% of the return of the S&P 500 Index, 35% of the
return for the Lehman Brothers Aggregate Index(2), and 10% of the return for the
Salomon Brothers 90-day T-bill(3). The Fund's return at NAV outperformed Lipper
Inc.'s flexible portfolio index return of 9.83%, according to Lipper, Inc. All
performance figures assume reinvestment of dividends and exclude the effect of
sales charges.
The equity portion of the Phoenix-Oakhurst Strategic Allocation Fund held a
great deal of media stocks. Issues such as Clear Channel Communications, CBS,
AMFM Inc., Liberty Media and Hughes Electronics all had significantly above-
market returns and contributed greatly to portfolio performance. In the new age
of digital media, these companies either control great distribution or possess
great content and have seen their values rise greatly. The Fund also was helped
by holdings in Microsoft, IBM, America Online, Cisco, Sun Microsystems and
Tellabs. These technology companies are deriving great benefit from the
increasing popularity of the Internet.
The Fund was also favorably exposed to several leading specialty retail
stocks, including Home Depot, Wal-Mart Stores and Tandy. Home Depot and Wal-Mart
have increased their dominance in the retail sector, exerting greater influence
on their suppliers and reaping significant benefit from the record high consumer
confidence. Tandy, through the ownership of RadioShack, served as an outlet for
wireless subscription plans, earning great profit in the process. Selected
financial service stocks also performed well. The portfolio held large positions
in Morgan Stanley, Citigroup, and American International Group, which all
appreciated greatly during the year.
The bond portion of the Fund also performed well during this period, with
higher-yielding sectors being among the best performers in the market. We have
maintained our strategy of investing in sectors with the best relative values,
and while this hurt performance last year, this has benefited results this year.
Some of the best contributors to performance were our holdings in the cable and
telecommunications industries.
Q: WHAT IS YOUR OUTLOOK?
A: We believe the outlook for corporate profits has never been better. The
global economic recovery has brightened the earnings picture of many
(2) THE LEHMAN BROTHERS AGGREGATE INDEX IS AN UNMANAGED, COMMONLY USED MEASURE
OF BROAD BOND MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE
FOR DIRECT INVESTMENT.
(3) THE SALOMON BROTHERS 90-DAY T-BILL IS A COMMONLY USED MEASURE OF SHORT-TERM
DEBT TOTAL RETURN PERFORMANCE.
3
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC. (CONTINUED)
cyclical industries, including energy, paper, aluminum and chemicals. With
consumers' rapid acceptance of the Internet, the build-out of broadband and
wireless infrastructure has been accelerated. This should ensure another year of
buoyant profits for leading networking and computer companies. The global
semiconductor industry is also in the early stages of a multiyear up-cycle.
Demand for leading-edge process exceeds available supply. With both margins and
pricing strong, the semiconductor industry should post strong profitability.
A strong global economy naturally brings fear of inflationary pressure. It
is now the consensus view that the Federal Reserve will be raising interest
rates during 2000. Given already high equity valuations today, rising interest
rates will limit further multiple expansion. However, a strong profit outlook
should also mitigate any downside to equity prices.
We also believe the outlook for the fixed-income markets is very favorable
for the long term. Real yields remain attractive by historical standards, and
all spread sectors now offer excellent value relative to long-term averages. Our
current focus is on Europe to take advantage of inefficiencies we are finding
there.
JANUARY 10, 2000
4
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 12/31/99 DATE
------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 10.97% 15.70% 12.75% -- --
Class A Shares at POP(3) 5.70 14.58 12.20 -- --
Class B Shares at NAV(2) 10.14 14.83 -- 14.23% 10/24/94
Class B Shares with CDSC(4) 6.14 14.83 -- 14.23 10/24/94
Lipper Analytical Services
Flexible Portfolio Index(6) 9.83 16.47 12.28 15.48 10/31/94
Balanced Benchmark(7) 11.55 18.82 13.34 17.92 10/31/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B Shares will vary due to differing sales charges.
(6) 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.
(7) The Balanced Benchmark is a composite index made up of 55% of the S&P 500
Index return, 35% of the Lehman Brothers Aggregate Bond Index return and
10% of the 90-day Treasury Bill return. The Index's performance does not
reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-OAKHURST BALANCED LIPPER ANALYTICAL
STRATEGIC ALLOCATION BENCHMARK(7) SERVICES FLEXIBLE
FUND CLASS A(5) PORTFOLIO INDEX(6)
<S> <C> <C> <C>
12/89 9,525 10,000 10,000
90 9,949 10,230 10,094
91 12,796 12,580 12,817
92 14,117 13,490 13,544
93 15,598 14,737 15,270
94 15,246 14,765 14,862
95 18,026 18,786 18,369
96 19,610 21,479 20,950
97 23,665 26,193 24,885
98 28,490 31,345 29,003
99 31,615 34,966 31,855
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/31/89 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 29%
Financials 17%
Consumer Staples 14%
Consumer Cyclicals 9%
Health-Care 8%
Communication Services 8%
Capital Goods 7%
Other 8%
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Oakhurst Strategic Allocation Fund, Inc.
TEN LARGEST EQUITY HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET
ASSETS)
<TABLE>
<C> <S> <C>
1. Microsoft Corp. 3.6%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
2. Cisco Systems, Inc. 3.3%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
3. Intel Corp. 2.5%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
4. General Electric Co. 2.5%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
5. Morgan Stanley Dean Witter & Co. 2.3%
PROVIDES A BROAD RANGE OF CREDIT AND INVESTMENT PRODUCTS TO
INDIVIDUALS
6. AT&T Corp.-Liberty Media Group Class A 2.3%
PRODUCES CABLE TV PROGRAMS
7. Wal-Mart Stores, Inc. 2.3%
ONE OF THE LARGEST U.S. DISCOUNT RETAILERS
8. Citigroup, Inc. 2.0%
DIVERSIFIED FINANCIAL SERVICES HOLDING COMPANY
9. International Business Machines Corp. 2.0%
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
10. Home Depot, Inc. (The) 1.9%
LEADING HOME IMPROVEMENT RETAILER
</TABLE>
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.
This report is not authorized for distribution to prospective investors in the
Phoenix-Oakhurst Strategic Allocation Fund, Inc. unless preceded or accompanied
by an effective prospectus which includes information concerning the sales
charge, the Fund's record and other pertinent information.
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>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Phoenix-Oakhurst Strategic Allocation
Fund, Inc. was held on October 27, 1999 to approve the following matter:
1. Fix the number of trustees at twelve and elect such number as detailed
below.
2. Ratification of the selection of PricewaterhouseCoopers LLP as the Fund's
independent auditors for the fiscal year ending December 31, 1999.
3. Approval of a change in the name of the Fund to Phoenix-Oakhurst
Strategic Allocation Fund, Inc.
On the record date for this meeting, there were 18,100,054 shares outstanding
and 58.04% of the shares outstanding and entitled to vote that were present by
proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR WITHHELD
---------- ---------
<S> <C> <C> <C>
1. Election of Trustees
Robert Chesek 10,052,620 453,539
E. Virgil Conway 10,043,458 462,701
Harry Dalzell-Payne 10,041,805 464,354
Francis E. Jeffries 10,046,960 459,199
Leroy Keith, Jr. 10,056,376 449,783
Philip R. McLoughlin 10,057,551 448,608
Everett L. Morris 10,042,383 463,776
James M. Oates 10,049,385 456,774
Calvin J. Pedersen 10,058,549 447,610
Herbert Roth, Jr. 10,041,740 464,419
Richard E. Segerson 10,055,043 451,116
Lowell P. Weicker, Jr. 10,018,296 487,863
<CAPTION>
FOR AGAINST ABSTAIN
---------- --------- ---------
2. PricewaterhouseCoopers LLP 9,960,833 93,669 451,657
<S> <C> <C> <C>
<CAPTION>
FOR AGAINST ABSTAIN
---------- --------- ---------
3. Approval of name change 9,492,300 249,229 764,630
<S> <C> <C> <C>
</TABLE>
19
<PAGE>
PHOENIX-OAKHURST STRATEGIC ALLOCATION FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
DIRECTORS
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William R. Moyer, Executive Vice President
John F. Sharry, Executive Vice President
James D. Wehr, Senior Vice President
Steven L. Colton, Vice President
Robert S. Driessen, Vice President
Christopher J. Kelleher, Vice President
Michael Kearney, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary and Clerk
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION PRSRT STD
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 P A I D
Springfield, MA
Permit No. 444
[Logo] PHOENIX
INVESTMENT PARTNERS
PXP 454 (2/00)
