[Front Cover]
[Cover Photo]
[logo] PHOENIX
Group Strategic Edge (R)
The Big Edge Plus (R)
Annual Reports for:
Phoenix Home Life Variable
Accumulation Account
Phoenix Edge Series Fund
Wanger Advisors Trust
December 31, 1996
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
<TABLE>
<CAPTION>
<S> <C>
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
Multi-Sector Fixed Income Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 6
Real Estate Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 5
Statement of Changes in Net Assets 7
Strategic Theme Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 5
Statement of Changes in Net Assets 7
Aberdeen New Asia Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 5
Statement of Changes in Net Assets 7
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 5
Statement of Changes in Net Assets 7
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 5
Statement of Changes in Net Assets 7
Notes to Financial Statements 10
</TABLE>
THE PHOENIX EDGE SERIES FUND
<TABLE>
<CAPTION>
<S> <C>
Money Market Series
Schedule of Investments 2-2
Statement of Assets and Liabilities 2-4
Statement of Operations 2-4
Statement of Changes in Net Assets 2-5
Financial Highlights 2-5
Growth Series
Schedule of Investments 2-7
Statement of Assets and Liabilities 2-9
Statement of Operations 2-9
Statement of Changes in Net Assets 2-10
Financial Highlights 2-10
Multi-Sector Fixed Income Series
Schedule of Investments 2-12
Statement of Assets and Liabilities 2-15
Statement of Operations 2-15
Statement of Changes in Net Assets 2-16
Financial Highlights 2-16
Total Return Series
Schedule of Investments 2-18
Statement of Assets and Liabilities 2-22
Statement of Operations 2-22
Statement of Changes in Net Assets 2-23
Financial Highlights 2-23
International Series
Schedule of Investments 2-25
Statement of Assets and Liabilities 2-28
Statement of Operations 2-28
Statement of Changes in Net Assets 2-29
Financial Highlights 2-29
Balanced Series
Schedule of Investments 2-31
Statement of Assets and Liabilities 2-35
Statement of Operations 2-35
Statement of Changes in Net Assets 2-36
Financial Highlights 2-36
Real Estate Series
Schedule of Investments 2-38
Statement of Assets and Liabilities 2-40
Statement of Operations 2-40
Statement of Changes in Net Assets 2-41
Financial Highlights 2-41
Strategic Theme Series
Schedule of Investments 2-43
Statement of Assets and Liabilities 2-45
Statement of Operations 2-45
Statement of Changes in Net Assets 2-46
Financial Highlights 2-46
Aberdeen New Asia Series
Schedule of Investments 2-48
Statement of Assets and Liabilities 2-50
Statement of Operations 2-50
Statement of Changes in Net Assets 2-51
Financial Highlights 2-51
Notes to Financial Statements 2-52
</TABLE>
WANGER ADVISORS TRUST
<TABLE>
<CAPTION>
<S> <C>
Wanger International Small Cap Advisor
Schedule of Investments 3-12
Statement of Assets and Liabilities 3-17
Statement of Operations 3-18
Statement of Changes in Net Assets 3-19
Financial Highlights 3-21
Notes to Financial Statements 3-22
Wanger U.S. Small Cap Advisor
Schedule of Investments 3-8
Statement of Assets and Liabilities 3-17
Statement of Operations 3-18
Statement of Changes in Net Assets 3-19
Financial Highlights 3-20
Notes to Financial Statements 3-22
</TABLE>
<PAGE>
This annual report for the Phoenix Home Life Variable Accumulation Account
for the year ended December 31, 1996, contains the financial statements for
the Account's various annuity contracts. This report also contains a list of
portfolio holdings, management's discussion of performance and investment
strategy and financial statements for each of the mutual funds that comprise
the Phoenix Edge Series Fund and the Wanger Advisors Trust.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost $ 7,363,985 $ 84,167,085 $44,185,453 $798,667,564
============ ============= ============ =============
Investment in The Phoenix Edge Series
Fund, at market $ 7,363,985 $ 84,167,085 $66,596,242 $908,841,991
------------ ------------- ------------ -------------
Total assets 7,363,985 84,167,085 66,596,242 908,841,991
Liabilities
Accrued expenses to related party 6,712 86,683 57,885 977,624
------------ ------------- ------------ -------------
Net assets $ 7,357,273 $ 84,080,402 $66,538,357 $907,864,367
============ ============= ============ =============
Accumulation units outstanding 3,459,902 40,530,150 7,215,152 100,883,217
============ ============= ============ =============
Unit value $ 2.126440 $ 2.074515 $ 9.222031 $ 8.999162
============ ============= ============ =============
<CAPTION>
Multi-Sector Fixed Income Total Return
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost $15,130,959 $ 94,967,604 $45,838,264 $250,510,261
============ ============== ============ =============
Investment in The Phoenix Edge Series
Fund, at market $15,487,641 $ 99,518,328 $58,367,148 $259,457,802
------------ -------------- ------------ -------------
Total assets 15,487,641 99,518,328 58,367,148 259,457,802
Liabilities
Accrued expenses to related party 12,698 104,432 50,216 277,715
------------ -------------- ------------ -------------
Net assets $15,474,943 $ 99,413,896 $58,316,932 $259,180,087
============ ============== ============ =============
Accumulation units outstanding 4,114,438 27,079,387 15,340,867 69,900,691
============ ============== ============ =============
Unit value $ 3.761132 $ 3.671202 $ 3.801411 $ 3.707833
============ ============== ============ =============
<CAPTION>
International Balanced
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost $ 3,950,560 $102,835,369 $ 4,295,160 $161,540,166
============ ============= ============ =============
Investment in The Phoenix Edge Series
Fund, at market $ 5,395,995 $128,164,938 $ 4,920,977 $176,344,947
------------ ------------- ------------ -------------
Total assets 5,395,995 128,164,938 4,920,977 176,344,947
Liabilities
Accrued expenses to related party 4,502 132,253 4,223 188,469
------------ ------------- ------------ -------------
Net assets $ 5,391,493 $128,032,685 $ 4,916,754 $176,156,478
============ ============= ============ =============
Accumulation units outstanding 3,336,546 80,535,316 3,271,238 118,572,031
============ ============= ============ =============
Unit value $ 1.615890 $ 1.589771 $ 1.503025 $ 1.485649
============ ============= ============ =============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost $ 241,867 $15,352,449 $ 653,816 $18,148,272
=========== ============ =========== =============
Investment in The Phoenix Edge Series
Fund, at market $ 287,658 $19,391,381 $ 674,557 $18,904,174
----------- ------------ ----------- -------------
Total assets 287,658 19,391,381 674,557 18,904,174
Liabilities
Accrued expenses to related party 227 18,124 569 20,145
----------- ------------ ----------- -------------
Net assets $ 287,431 $19,373,257 $ 673,988 $18,884,029
=========== ============ =========== =============
Accumulation units outstanding 188,753 12,614,201 620,567 17,311,417
=========== ============ =========== =============
Unit value $ 1.522792 $ 1.535829 $ 1.086084 $ 1.090843
=========== ============ =========== =============
<CAPTION>
Aberdeen New Asia
Sub-Account
VA1 VA2, VA3 & GSE
-------------------------------
<S> <C> <C>
Assets
Investments at cost $ 396,202 $ 8,129,643
============ =============
Investment in The Phoenix Edge Series
Fund, at market $ 394,425 $ 8,117,014
------------ -------------
Total assets 394,425 8,117,014
Liabilities
Accrued expenses to related party 330 8,321
------------ -------------
Net assets $ 394,095 $ 8,108,693
============ =============
Accumulation units outstanding 395,033 8,124,731
============ =============
Unit value $ 0.997626 $ 0.998026
============ =============
<CAPTION>
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost $2,369,355 $57,330,199 $4,042,798 $79,402,555
============ ============= =========== =============
Investment in Wanger Advisors Trust,
at market $2,646,515 $65,881,913 $4,857,021 $98,214,300
------------ ------------- ----------- -------------
Total assets 2,646,515 65,881,913 4,857,021 98,214,300
Liabilities
Accrued expenses to related party 2,148 67,199 3,938 98,140
------------ ------------- ----------- -------------
Net assets $2,644,367 $65,814,714 $4,853,083 $98,116,160
============ ============= =========== =============
Accumulation units outstanding 1,632,016 37,820,126 2,887,671 58,623,497
============ ============= =========== =============
Unit value $ 1.620307 $ 1.740203 $ 1.680622 $ 1.673666
============ ============= =========== =============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1996
<TABLE>
<CAPTION>
Money Market Growth
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- ------------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions $ 397,081 $ 3,586,484 $ 638,220 $ 8,253,068
Expenses
Mortality and expense risk charges 81,535 917,302 679,057 10,690,584
----------- ------------ ----------- -------------
Net investment income (loss) 315,546 2,669,182 (40,837) (2,437,516)
----------- ------------ ----------- -------------
Net realized gain from share transactions -- -- 461,426 551,462
Net realized gain distribution from Fund -- -- 4,488,201 60,788,375
Net unrealized appreciation on investment -- -- 2,358,935 31,685,702
----------- ------------ ----------- -------------
Net gain on investments -- -- 7,308,562 93,025,539
----------- ------------ ----------- -------------
Net increase in net assets resulting from
operations $ 315,546 $ 2,669,182 $7,267,725 $90,588,023
=========== ============ ========== =============
<CAPTION>
Multi-Sector Fixed Income Total Return
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions $ 986,913 $ 6,798,736 $1,316,386 $ 5,639,587
Expenses
Mortality and expense risk charges 133,316 1,140,813 609,637 3,244,376
----------- ------------ ----------- ------------
Net investment income 853,597 5,657,923 706,749 2,395,211
----------- ------------ ----------- ------------
Net realized gain from share transactions 542,863 9,603 551,516 563,339
Net realized gain distribution from Fund 458,554 2,940,178 3,644,787 16,147,390
Net unrealized appreciation (depreciation) on
investment (396,876) 940,530 (264,359) 143,413
----------- ------------ ----------- ------------
Net gain on investments 604,541 3,890,311 3,931,944 16,854,142
----------- ------------ ----------- ------------
Net increase in net assets resulting from
operations $1,458,138 $ 9,548,234 $4,638,693 $19,249,353
=========== ============ =========== ============
<CAPTION>
International Balanced
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- -----------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions $ 77,368 $ 1,823,480 $ 139,715 $ 4,866,871
Expenses
Mortality and expense risk charges 53,836 1,509,486 51,093 2,197,070
----------- ------------ ----------- ------------
Net investment income 23,532 313,994 88,622 2,669,801
----------- ------------ ----------- ------------
Net realized gain from share transactions 65,503 169,042 47,111 393,139
Net realized gain distribution from Fund 120,338 2,835,420 443,754 15,731,997
Net unrealized appreciation (depreciation) on
investment 649,224 15,512,070 (130,224) (3,383,807)
----------- ------------ ----------- -------------
Net gain on investments 835,065 18,516,532 360,641 12,741,329
----------- ------------ ----------- -------------
Net increase in net assets resulting from
operations $ 858,597 $18,830,526 $ 449,263 $15,411,130
=========== ============ =========== =============
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF OPERATIONS
For the period ended December 31, 1996
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account Sub-Account(1)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
-------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions $ 4,917 $ 477,780 $ 2,434 $ 66,692
Expenses
Mortality and expense risk charges 1,068 140,105 3,322 142,262
----------- ------------- ---------- -------------
Net investment income (loss) 3,849 337,675 (888) (75,570)
----------- ------------- ---------- -------------
Net realized gain from share transactions 338 10,558 1,447 131,998
Net realized gain distribution from Fund 3,037 199,911 -- --
Net unrealized appreciation on investment 42,397 3,218,688 20,742 755,902
----------- ------------- ---------- -------------
Net gain on investments 45,772 3,429,157 22,189 887,900
----------- ------------- ---------- -------------
Net increase in net assets resulting from
operations $ 49,621 $3,766,832 $ 21,301 $ 812,330
=========== ============= ========== =============
<CAPTION>
Aberdeen New Asia
Sub-Account(2)
VA1 VA2, VA3 & GSE
-------------------------------
<S> <C> <C>
Investment income
Distributions $ 2,008 $ 41,156
Expenses
Mortality and expense risk charges 950 22,524
--------- -----------
Net investment income 1,058 18,632
--------- -----------
Net realized gain (loss) from share
transactions (15) 1,853
Net unrealized depreciation on investment (1,776) (12,629)
--------- -----------
Net loss on investments (1,791) (10,776)
--------- -----------
Net increase (decrease) in net assets
resulting from operations $ (733) $ 7,856
========= ===========
<CAPTION>
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Investment income
Distributions $ 1,241 $ 50,527 $ 1,323 $ 58,386
Expenses
Mortality and expense risk charges 15,376 493,284 30,173 710,845
----------- ------------- ---------- ------------
Net investment loss (14,135) (442,757) (28,850) (652,459)
----------- ------------- ---------- ------------
Net realized gain (loss) from share
transactions (734) (2,372) 1,581 (31,819)
Net unrealized appreciation on investment 258,110 7,549,473 790,450 18,432,196
----------- ------------- ---------- ------------
Net gain on investments 257,376 7,547,101 792,031 18,400,377
----------- ------------- ---------- ------------
Net increase in net assets resulting from
operations $243,241 $7,104,344 $763,181 $17,747,918
=========== ============= ========== ============
</TABLE>
(1) From inception February 7, 1996 to December 31, 1996
(2) From inception September 29, 1996 to December 31, 1996
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment
income (loss) $ 315,546 $ 2,669,182 $ (40,837) $ (2,437,516) $ 853,597 $ 5,657,923
Net realized gain -- -- 4,949,627 61,339,837 1,001,417 2,949,781
Net unrealized
appreciation
(depreciation) -- -- 2,358,935 31,685,702 (396,876) 940,530
------------ ------------- ----------- -------------- ------------- -------------
Net increase in net
assets resulting
from operations 315,546 2,669,182 7,267,725 90,588,023 1,458,138 9,548,234
------------ ------------- ----------- -------------- ------------- -------------
From accumulation
unit transactions
Participant deposits 413,122 62,414,283 1,163,841 98,787,397 265,897 12,251,810
Participant
transfers 2,086,813 (38,766,038) (3,027,275) (9,399,903) (34,417) 544,623
Participant
withdrawals (2,528,258) (16,292,176) (6,317,461) (35,720,970) (1,143,820) (7,038,518)
------------- ------------- ----------- -------------- ------------ -------------
Net increase
(decrease) in net
assets resulting
from participant
transactions (28,323) 7,356,069 (8,180,895) 53,666,524 (912,340) 5,757,915
------------- ------------- ----------- -------------- ------------ -------------
Net increase
(decrease) in net
assets 287,223 10,025,251 (913,170) 144,254,547 545,798 15,306,149
Net assets
Beginning of period 7,070,050 74,055,151 67,451,527 763,609,820 14,929,145 84,107,747
------------ ------------- ----------- -------------- ------------- -------------
End of period $ 7,357,273 $ 84,080,402 $66,538,357 $907,864,367 $15,474,943 $ 99,413,896
========== ============= =========== ============== ============ =============
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
---------------------------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment
income $ 706,749 $ 2,395,211 $ 23,532 $ 313,994 $ 88,622 $ 2,669,801
Net realized gain 4,196,303 16,710,729 185,841 3,004,462 490,865 16,125,136
Net unrealized
appreciation
(depreciation) (264,359) 143,413 649,224 15,512,070 (130,224) (3,383,807)
------------ -------------- ------------ -------------- ------------ --------------
Net increase in net
assets resulting
from operations 4,638,693 19,249,353 858,597 18,830,526 449,263 15,411,130
------------ -------------- ------------ -------------- ------------ --------------
From accumulation
unit transactions
Participant deposits 921,673 21,807,365 123,786 9,967,892 69,850 13,546,555
Participant
transfers (4,520,404) (17,991,179) (238,308) (340,043) (770,120) (12,855,150)
Participant
withdrawals (6,234,965) (15,780,165) (527,123) (7,580,723) (362,102) (12,633,674)
------------ -------------- ------------ -------------- ----------- --------------
Net increase
(decrease) in net
assets resulting
from participant
transactions (9,833,696) (11,963,979) (641,645) 2,047,126 (1,062,372) (11,942,269)
------------ -------------- ------------ -------------- ----------- --------------
Net increase
(decrease) in net
assets (5,195,003) 7,285,374 216,952 20,877,652 (613,109) 3,468,861
Net assets
Beginning of period 63,511,935 251,894,713 5,174,541 107,155,033 5,529,863 172,687,617
------------ -------------- ------------ -------------- ------------ --------------
End of period $58,316,932 $259,180,087 $ 5,391,493 $128,032,685 $ 4,916,754 $176,156,478
============ ============== ============ ============== ============ ==============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
(Continued)
<TABLE>
<CAPTION>
Real Estate Strategic Theme Aberdeen New Asia
Sub-Account Sub-Account(1) Sub-Account(2)
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------- ---------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment income
(loss) $ 3,849 $ 337,675 $ (888) $ (75,570) $ 1,058 $ 18,632
Net realized gain 3,375 210,469 1,447 131,998 (15) 1,853
Net unrealized
appreciation
(depreciation) 42,397 3,218,688 20,742 755,902 (1,776) (12,629)
------------ ------------- ----------- ------------- --------- -------------
Net increase
(decrease) in net
assets resulting
from operations 49,621 3,766,832 21,301 812,330 (733) 7,856
------------ ------------- ----------- ------------- --------- -------------
From accumulation unit
transactions
Participant deposits 21,937 1,419,253 97,264 11,116,071 -- 744,784
Participant transfers 203,153 6,126,595 557,249 7,104,135 396,531 7,370,328
Participant
withdrawals (26,582) (127,550) (1,826) (148,507) (1,703) (14,275)
------------ ------------- ----------- ------------- --------- -------------
Net increase in net
assets resulting
from participant
transactions 198,508 7,418,298 652,687 18,071,699 394,828 8,100,837
------------ ------------- ----------- ------------- --------- -------------
Net increase in net
assets 248,129 11,185,130 673,988 18,884,029 394,095 8,108,693
Net assets
Beginning of period 39,302 8,188,127 0 0 0 0
------------ ------------- ----------- ------------- --------- -------------
End of period $ 287,431 $19,373,257 $ 673,988 $18,884,029 $394,095 $8,108,693
============ ============= =========== ============= ========= =============
<CAPTION>
Wanger International Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ----------------------------
<S> <C> <C> <C> <C>
From operations
Net investment loss $ (14,135) $ (442,757) $ (28,850) $ (652,459)
Net realized gain
(loss) (734) (2,372) 1,581 (31,819)
Net unrealized
appreciation 258,110 7,549,473 790,450 18,432,196
------------ ------------- ----------- --------------
Net increase in net
assets resulting
from operations 243,241 7,104,344 763,181 17,747,918
------------ ------------- ----------- --------------
From accumulation unit
transactions
Participant deposits 234,155 15,960,884 269,408 20,013,816
Participant transfers 2,018,521 33,617,187 3,368,454 42,773,428
Participant
withdrawals (92,790) (1,194,205) (80,915) (2,113,335)
------------ ------------- ----------- --------------
Net increase in net
assets resulting
from participant
transactions 2,159,886 48,383,866 3,556,947 60,673,909
------------ ------------- ----------- --------------
Net increase in net
assets 2,403,127 55,488,210 4,320,128 78,421,827
Net assets
Beginning of period 241,240 10,326,504 532,955 19,694,333
------------ ------------- ----------- --------------
End of period $2,644,367 $65,814,714 $4,853,083 $98,116,160
============ ============= =========== ==============
</TABLE>
(1) From inception February 7, 1996 to December 31, 1996
(2) From inception September 29, 1996 to December 31, 1996
See Notes to Financial Statements
7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
------------------------------ ------------------------------ -----------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment income
(loss) $ 359,860 $ 3,025,129 $ 65,170 $ (840,458) $ 1,017,753 $ 5,072,165
Net realized gain -- -- 7,548,511 81,208,257 55,037 17,918
Net unrealized
appreciation -- -- 8,168,033 75,535,624 1,761,715 8,666,711
------------ -------------- ------------ -------------- ------------ --------------
Net increase in net
assets resulting
from operations 359,860 3,025,129 15,781,714 155,903,423 2,834,505 13,756,794
------------ -------------- ------------ -------------- ------------ --------------
From accumulation unit
transactions
Participant deposits 5,752 62,308,151 1,598,579 124,955,151 158,313 12,197,018
Participant transfers (180,776) (53,470,824) 3,015,663 43,180,634 (3,366) 6,303,584
Participant
withdrawals (2,199,526) (10,625,595) (6,259,870) (37,686,221) (1,429,692) (4,002,038)
------------ -------------- ------------ -------------- ------------ --------------
Net increase
(decrease) in net
assets resulting
from participant
transactions (2,374,550) (1,788,268) (1,645,628) 130,449,564 (1,274,745) 14,498,564
------------ -------------- ----------- -------------- ------------ --------------
Net increase
(decrease) in net
assets (2,014,690) 1,236,861 14,136,086 286,352,987 1,559,760 28,255,358
Net assets
Beginning of period 9,084,740 72,818,290 53,315,441 477,256,833 13,369,385 55,852,389
------------ -------------- ------------- -------------- ------------ --------------
End of period $ 7,070,050 $ 74,055,151 $67,451,527 $763,609,820 $14,929,145 $ 84,107,747
============ ============== ============ ============== ============ ==============
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE VA1 VA2, VA3 & GSE
----------------------------- --------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment income
(loss) $ 1,381,331 $ 4,688,509 $ (40,806) $ (964,732) $ 123,820 $ 3,467,905
Net realized gain
(loss) 4,218,277 15,383,213 (62,555) 1,346,145 134,199 3,628,855
Net unrealized
appreciation 4,176,429 14,852,737 540,494 7,779,441 767,657 23,829,474
------------ ------------- ------------ -------------- ------------ --------------
Net increase in net
assets resulting
from operations 9,776,037 34,924,459 437,133 8,160,854 1,025,676 30,926,234
------------ ------------- ------------ -------------- ------------ --------------
From accumulation unit
transactions
Participant deposits 1,028,187 32,735,047 148,158 16,055,112 127,367 15,492,037
Participant transfers (1,572,062) (2,629,446) (2,352,617) (19,987,552) (387,341) (9,618,084)
Participant
withdrawals (5,833,027) (16,146,431) (569,829) (7,873,129) (555,779) (10,194,737)
------------ ------------- ------------ -------------- ------------ --------------
Net increase
(decrease) in net
assets resulting
from participant
transactions (6,376,902) 13,959,170 (2,774,288) (11,805,569) (815,753) (4,320,784)
------------ ------------- ------------ -------------- ------------ --------------
Net increase
(decrease) in net
assets 3,399,135 48,883,629 (2,337,155) (3,644,715) 209,923 26,605,450
Net assets
Beginning of period 60,112,800 203,011,084 7,511,696 110,799,748 5,319,940 146,082,167
------------ ------------- ------------ -------------- ------------ --------------
End of period $63,511,935 $251,894,713 $ 5,174,541 $107,155,033 $ 5,529,863 $172,687,617
============ ============= ============ ============== ============ ==============
</TABLE>
See Notes to Financial Statements
8
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
From inception May 1, 1995 to December 31, 1995
(Continued)
<TABLE>
<CAPTION>
Real Estate Wanger International Small Wanger U.S. Small Cap
Sub-Account Cap Sub-Account Sub-Account
VA1 VA2, VA3 & GSE VA1 VA2, VA3 VA1 VA2, VA3
---------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment income
(loss) $ 765 $ 155,874 $ (513) $ (37,360) $ (1,865) $ (80,663)
Net realized gain (loss) 292 65,056 4 8,695 (747) (3,774)
Net unrealized appreciation 3,394 820,245 19,049 1,002,242 23,773 379,548
---------- ------------- --------- ------------ --------- -----------
Net increase in net assets
resulting from operations 4,451 1,041,175 18,540 973,577 21,161 295,111
---------- ------------- --------- ------------ --------- -----------
From accumulation unit
transactions
Participant deposits 416 5,827,754 20,936 3,531,791 36,476 7,685,414
Participant transfers 35,382 1,329,121 201,764 5,974,479 478,823 11,864,286
Participant withdrawals (947) (9,923) -- (153,343) (3,505) (150,478)
---------- ------------- --------- ------------ --------- -----------
Net increase in net assets
resulting from participant
transactions 34,851 7,146,952 222,700 9,352,927 511,794 19,399,222
---------- ------------- --------- ------------ --------- -----------
Net increase in net assets 39,302 8,188,127 241,240 10,326,504 532,955 19,694,333
Net assets
Beginning of period 0 0 0 0 0 0
---------- ------------- --------- ------------ --------- -----------
End of period $39,302 $8,188,127 $241,240 $10,326,504 $532,955 $19,694,333
========== ============= ========= ============ ========= ===========
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 1--Organization
Phoenix Home Life Variable Accumulation Account (the "Account") is a
separate investment account of Phoenix Home Life Mutual Insurance Company
(Phoenix) registered as a unit investment trust. The Account currently has
eleven Sub-accounts to which contract values may be allocated and invest solely
in a designated portfolio of The Phoenix Edge Series Fund and/or Wanger Advisors
Trust (the "Funds"). The Account is offered as The Big Edge and The Big Edge
Plus to individuals (VA1, VA2 and VA3) and is also offered as Group Strategic
Edge ("GSE") to groups to fund certain tax-qualified pension plans or profit
sharing plans. The Money Market, Growth, Multi-Sector Fixed Income (formerly
Bond), Total Return, International, Balanced, Real Estate, Strategic Theme,
Aberdeen New Asia, Wanger International Small Cap and Wanger U.S. Small Cap
Sub-accounts are subdivided into two pools designated "VA1" and "VA2, VA3 &
GSE". VA2, VA3 and GSE contracts include a higher expense risk charge than the
VA1 contract.
Each Series has distinct investment objectives. The Money Market Series is
a pooled short-term investment fund, the Growth Series is a growth common stock
fund, the Multi-Sector Fixed Income Series is a long-term debt fund, the Total
Return Series invests in equity securities and long and short-term debt, the
International Series invests primarily in an internationally diversified
portfolio of equity securities and the Balanced Series is a balanced fund which
invests in growth stocks and at least 25% of its assets in fixed income senior
securities. The Real Estate Series invests in marketable securities of publicly
traded real estate investment trusts ("REITs") and companies that are
principally engaged in the real estate industry. The Strategic Theme Series
invests in securities of companies believed to benefit from specific trends. The
Aberdeen New Asia Series invests primarily in diversified equity securities of
issuers organized and principally operating in Asia, excluding Japan. Wanger
International Small Cap and Wanger U.S. Small Cap invest primarily in securities
of companies with a stock market capitalization of less than $1 billion.
Contract owners may also direct the allocation of their investments between the
Account and the Guaranteed Interest Account (of the General Account of Phoenix)
through participant transfers.
Note 2--Significant Accounting Policies
A. Valuation of Investments: Investments are made exclusively in the Funds
and are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Funds as well as gains and losses
on sales of shares in the Funds determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix and under
current federal income tax law, income arising from the Account is not taxed
since reserves are established equivalent to such income. Therefore, no
provision for related federal or state income taxes is required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of the Funds
Purchases and sales of shares of the Funds for the period ended December
31, 1996 aggregated the following:
<TABLE>
<CAPTION>
VA1 VA2, VA3 & GSE
----------------------------- -----------------------------
Sub-Account Purchases Sales Purchases Sales
- ----------------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
The Phoenix Edge Series Fund:
Money Market $15,874,923 $15,586,607 $ 84,974,398 $74,933,945
Growth 9,692,151 13,420,971 206,997,081 94,744,516
Multi-Sector Fixed Income 9,912,247 9,511,838 32,391,800 18,015,431
Total Return 5,577,505 11,059,655 35,318,110 28,708,789
International 1,385,836 1,883,202 18,095,839 12,871,108
Balanced 1,080,239 1,610,321 29,227,305 22,748,091
Real Estate 232,405 26,813 9,997,652 2,031,388
Strategic Theme 720,463 68,094 24,907,339 6,891,065
Aberdeen New Asia 398,440 2,223 9,330,672 1,202,882
Wanger Advisors Trust:
Wanger International Small Cap 2,708,195 560,469 50,827,925 2,825,276
Wanger U.S. Small Cap 6,377,168 2,845,543 63,038,392 2,938,002
</TABLE>
10
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 4--Participant Accumulation Unit Transactions (in units)
<TABLE>
<CAPTION>
Sub-Account
---------------------------------------------------------------------------------------
Money Multi-Sector Total
Market Growth Fixed Income Return International Balanced
------------- ------------- -------------- ------------ ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
VA1
Units outstanding,
beginning of period 3,457,073 8,152,578 4,417,776 18,038,311 3,761,861 4,027,273
Participant deposits 197,520 134,660 77,074 253,627 83,754 49,966
Participant transfers 1,018,162 (345,050) (55,510) (1,245,054) (158,084) (549,310)
Participant withdrawals (1,212,853) (727,036) (324,902) (1,706,017) (350,985) (256,691)
----------- ----------- ------------- ----------- -------------- -----------
Units outstanding, end
of period 3,459,902 7,215,152 4,114,438 15,340,867 3,336,546 3,271,238
=========== =========== ============= =========== ============== ===========
VA2, VA3
Big Edge Plus:
Units outstanding,
beginning of period 36,241,891 92,694,585 24,782,657 71,834,899 77,277,010 124,814,290
Participant deposits 29,510,056 10,108,038 3,246,569 5,622,400 6,163,694 8,723,388
Participant transfers (21,526,181) (942,697) 121,097 (4,867,129) (288,064) (9,024,338)
Participant withdrawals (5,343,725) (5,740,812) (1,924,673) (4,267,779) (4,901,106) (8,698,694)
----------- ----------- ------------- ----------- -------------- -----------
Units outstanding, end
of period 38,882,041 96,119,114 26,225,650 68,322,391 78,251,534 115,814,646
=========== =========== ============= =========== ============== ===========
Group Strategic Edge:
Units outstanding,
beginning of period 783,988 1,648,909 652,101 1,330,249 1,708,309 2,104,015
Participant deposits 1,593,445 3,401,352 301,274 526,051 484,703 724,326
Participant transfers 1,045,503 (2,467) 41,728 (95,905) 265,560 191,883
Participant withdrawals (1,774,827) (283,691) (141,366) (182,095) (174,790) (262,839)
----------- ----------- ------------- ----------- -------------- -----------
Units outstanding, end
of period 1,648,109 4,764,103 853,737 1,578,300 2,283,782 2,757,385
=========== =========== ============= =========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Strategic Aberdeen Wanger International Wanger U.S.
Real Estate Theme New Asia Small Cap Small Cap
-------------- ------------- ------------ -------------------- --------------
<S> <C> <C> <C> <C> <C>
VA1
Units outstanding, beginning
of period 34,014 0 0 194,615 460,316
Participant deposits 16,219 93,421 -- 153,393 185,088
Participant transfers 156,851 528,857 396,754 1,345,568 2,297,687
Participant withdrawals (18,331) (1,711) (1,721) (61,560) (55,420)
------------ ----------- ---------- ------------------- ------------
Units outstanding, end of
period 188,753 620,567 395,033 1,632,016 2,887,671
============ =========== ========== =================== ============
VA2, VA3
Big Edge Plus:
Units outstanding, beginning
of period 6,971,291 0 0 7,737,540 17,039,472
Participant deposits 1,046,143 10,557,214 742,070 9,247,962 13,215,584
Participant transfers 4,442,965 6,511,719 7,380,189 20,878,871 28,707,048
Participant withdrawals (102,950) (67,958) (14,275) (754,253) (1,451,778)
------------ ----------- ---------- ------------------- ------------
Units outstanding, end of
period 12,357,449 17,000,975 8,107,984 37,110,120 57,510,326
============ =========== ========== =================== ============
Group Strategic Edge:
Units outstanding, beginning
of period 37,517 0 0 0 0
Participant deposits 55,139 188,421 9,045 398,085 520,942
Participant transfers 164,178 195,948 7,702 316,457 641,009
Participant withdrawals (82) (73,927) -- (4,536) (48,780)
------------ ----------- ---------- ------------------- ------------
Units outstanding, end of
period 256,752 310,442 16,747 710,006 1,113,171
============ =========== ========== =================== ============
</TABLE>
11
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
Note 5--Investment Advisory Fees and Related Party Transactions
Phoenix and its indirect, majority owned subsidiary, Phoenix Equity
Planning Corporation, a registered broker/dealer in securities, provide all
services to the Account.
Phoenix assumes the risk that annuitants as a class may live longer than
expected (necessitating a greater number of annuity payments) and that its
expenses may be higher than its deductions for such expenses. In return for the
assumption of these mortality and expense risks, Phoenix charges the
Sub-Accounts designated VA1 the daily equivalent of 0.40% on an annual basis of
the current value of the Sub-Account's net assets for mortality risks assumed
and the daily equivalent of 0.60% on an annual basis for expense risks assumed.
VA2, VA3 & GSE Sub-Accounts are charged the daily equivalent of 0.40% and 0.85%
on an annual basis for mortality and expense risks, respectively.
As compensation for administrative services provided to the Account,
Phoenix additionally receives $35 per year from each contract, which is deducted
from the Sub-Account holding the assets of the participant, or on a pro rata
basis from two or more Sub-Accounts in relation to their values under the
contract. Fees for administrative services provided for the year ended December
31, 1996 aggregated $1,549,937 and are funded by and included in participant
withdrawals.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. Phoenix reimburses Phoenix Equity Planning
Corporation for expenses incurred as underwriter.
On surrender of a contract, contingent deferred sales charges, which vary
from 0-6% depending upon the duration of each contract deposit, are deducted
from the proceeds and are paid to Phoenix as reimbursement for services
provided. Contingent deferred sales charges deducted and paid to Phoenix
aggregated $1,958,067 for the year ended December 31, 1996.
Note 6--Distribution of Net Income
The Account does not expect to declare dividends to participants from
accumulated net income. The accumulated net income is distributed to
participants as part of withdrawals of amounts in the form of surrenders, death
benefits, transfers or annuity payments in excess of net purchase payments.
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable annuity contract, other than a contract issued in connection
with certain types of employee benefit plans, will not be treated as an annuity
contract for federal tax purposes for any period for which the investments of
the segregated asset account on which the contract is based are not adequately
diversified. The Code provides that the "adequately diversified" requirement may
be met if the underlying investments satisfy either a statutory safe harbor test
or diversification requirements set forth in regulations issued by the Secretary
of the Treasury.
The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. Phoenix believes that the Account satisfies the current requirements
of the regulations, and it intends that the Account will continue to meet such
requirements.
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Logotype] Price Waterhouse LLP [Logo]
To the Board of Directors of Phoenix Home Life Mutual Insurance Company and
Participants of Phoenix Home Life Variable Accumulation Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub- Account, Multi-Sector Fixed Income Sub-Account
(formerly the Bond Sub-Account), Total Return Sub-Account, International
Sub-Account, Balanced Sub-Account, Real Estate Sub-Account, Strategic Theme
Sub-Account, Aberdeen New Asia Sub- Account, Wanger International Small Cap
Sub-Account and Wanger U.S. Small Cap Sub-Account (constituting the Phoenix
Home Life Variable Accumulation Account, hereafter referred to as the
"Account") at December 31, 1996, the results of each of their operations for
the periods then ended and the changes in each of their net assets for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of investments at December 31, 1996
by correspondence with the Funds, provide a reasonable basis for the opinion
expressed above.
/s/ Price Waterhouse LLP
Hartford, Connecticut
February 12, 1997
13
<PAGE>
PHOENIX HOME LIFE
VARIABLE ACCUMULATION ACCOUNT
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Underwriter
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Custodians
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(International Series, Aberdeen New Asia Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts 02101
Independent Accountants
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
<PAGE>
[Back Cover]
-----------------
[Logo] Phoenix BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
-----------------
Phoenix Home Life Mutual Insurance Company
101 Munson Street
Greenfield, Massachusetts 01301
P725 (2/97)
700.04
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(C) 1997 Phoenix Home Life Mutual Insurance Company
