AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 2000
REGISTRATION NOS. 2-93538
811-04116
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 51
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 52
(CHECK APPROPRIATE BOX OR BOXES)
-----------------------------------------------------------
PHOENIX-ZWEIG TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
-----------------------------------------------------------
900 THIRD AVENUE, 31ST FLOOR, NEW YORK, NEW YORK 10022
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O ZWEIG/GLASER SHAREHOLDER SERVICES
(800) 272-2700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
-----------------------------------------------------------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
-----------------------------------------------------------
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
|X| 60 days after filing pursuant to paragraph (a)(i)
[ ] on pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
================================================================================
<PAGE>
PHOENIX-ZWEIG TRUST
Cross Reference Sheet Pursuant to Rule 495(a)
This Registration Statement contains two prospectuses and
two Statements of Additional Information. These are
identified as Version A and Version B of each.
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S> <C>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
----------------------------- ------------------
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies,
and Related Risks........................................ Investment Risk and Return Summary
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges;
Your Account; How to Buy Shares; How to Sell
Shares; Things to Know When Selling Shares;
Account Policies; Investor Services; Tax
Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------- -------------------------------------------
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Techniques and Risks;
Investment Restrictions
13. Management of the Fund................................... Management of the Trust
14. Control Persons and Principal Holders of Securities...... Management of the Trust
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares;
Investor Account Services; Redemption of
Shares; Tax Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET
FORTH UNDER THE APPROPRIATE ITEM, SO NUMBERED, IN PART C OF
THIS REGISTRATION STATEMENT.
<PAGE>
[VERSION A]
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Phoenix-Zweig Trust
Phoenix-Zweig Appreciation Fund
Investment Risk and Return Summary........................................ 2
Fund Expenses............................................................. 5
Phoenix-Zweig Foreign Equity Fund
Investment Risk and Return Summary........................................ 7
Fund Expenses............................................................. 11
Phoenix-Zweig Government Cash Fund
Investment Risk and Return Summary........................................ 13
Fund Expenses............................................................. 16
Phoenix-Zweig Government Fund
Investment Risk and Return Summary........................................ 18
Fund Expenses............................................................. 21
Phoenix-Zweig Growth & Income Fund
Investment Risk and Return Summary........................................ 23
Fund Expenses............................................................. 26
Phoenix-Zweig Managed Assets
Investment Risk and Return Summary........................................ 28
Fund Expenses............................................................. 33
Phoenix-Zweig Strategy Fund
Investment Risk and Return Summary........................................ 35
Fund Expenses............................................................. 38
Additional Investment Techniques............................................. 40
Management of the Funds...................................................... 43
Pricing of Fund Shares....................................................... 45
Sales Charges................................................................ 46
Your Account................................................................. 49
How to Buy Shares............................................................ 50
How to Sell Shares........................................................... 50
Things You Should Know When Selling Shares................................... 51
Account Policies............................................................. 53
Investor Services............................................................ 54
Tax Status of Distributions.................................................. 55
Financial Highlights......................................................... 56
Additional Information....................................................... 71
>PHOENIX-
ZWEIG
TRUST
<PAGE>
PHOENIX-ZWEIG TRUST
--------------------------------------------------------------------------------
THE TRUST
There are seven Phoenix-Zweig mutual funds. Together they make up the
Phoenix-Zweig Trust (the "Trust").
THE FUNDS
The seven funds that make up the Trust are: Phoenix-Zweig Appreciation Fund (the
"Appreciation Fund"), Phoenix-Zweig Foreign Equity Fund (the "Foreign Equity
Fund"), Phoenix-Zweig Government Cash Fund (the "Government Cash Fund"),
Phoenix-Zweig Government Fund (the "Government Fund"), Phoenix-Zweig Growth &
Income Fund (the "Growth & Income Fund"), Phoenix-Zweig Managed Assets ("Managed
Assets Fund") and Phoenix-Zweig Strategy Fund (the "Strategy Fund"), each a
"fund" and together, the "funds." Each fund has its own investment policies
designed to help you achieve your goals.
Phoenix-Zweig Trust 1
<PAGE>
PHOENIX-ZWEIG APPRECIATION FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Appreciation Fund has an investment objective of increasing the
value of your investment over the long term (capital appreciation) consistent
with preserving capital and reducing portfolio exposure to market risk. There is
no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The adviser manages the fund's investment program, including security
selection, and maintains the general operation of the fund. The
subadviser determines asset allocations for the fund based on
fundamental and technical indicators that measure the risk and reward
characteristics of the stock and bond markets. The three main groups of
indicators are:
o Monetary indicators, including the trend of interest rates, Federal
Reserve policy, commodity prices, and economic activity;
o Sentiment indicators, including mutual funds' cash-to-assets ratio,
foreign buying and selling, and volume of initial and secondary
public offerings; and
o Momentum indicators, including new highs and lows,
up-volume-to-down-volume, and divergences between large- and small-
company stocks.
As the indicators point to increasing levels of market risk, the fund
may gradually reduce its market exposure. The fund may not be fully
invested throughout bull and bear markets, but, instead, some profits
may be left "on the table" as a strategy to limit losses. As a result,
the fund may not keep pace with all-equity benchmarks or fully-invested
stock funds during bull markets. While the fund attempts to limit
losses, it is not possible to eliminate risk entirely.
> Generally, emphasis is placed primarily on the subadviser's tactical
asset allocation strategy; security selection is secondary.
> The fund invests primarily in common stocks of companies with smaller
capitalizations (generally less than $1 billion) with both value or
growth characteristics.
> Up to 700 small company stocks are selected for fund investment
primarily from the 2,000 stocks immediately following the 1,000 largest
stocks based on market capitalization or trading volume. Generally,
these 2,000 stocks have market capitalizations ranging from $262
million to $1.5 billion or an average trading volume of approximately
$3.3 million.
2 Phoenix-Zweig Appreciation Fund
<PAGE>
> Stocks are selected using quantitative analysis of growth indicators,
such as earnings, sales and cash flow; value indicators, such as price
to earnings; and miscellaneous indicators, such as price momentum.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When declines in the indices occur, or when
attempting to reduce fluctuations in net asset value, the adviser may reduce
market exposure by gradually selling securities and buying money market
instruments or by selling stock index or Treasury futures. Money market
instruments may include commercial paper, short-term corporate obligations, bank
deposits (including time deposits with a maturity of less than one year) and
other financial institution obligations. When this happens, the fund may not
achieve its objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
SMALL CAPITALIZATIONS
Companies with small capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small capitalization
companies and their stock performance and can make investment
Phoenix-Zweig Appreciation Fund 3
<PAGE>
returns highly volatile. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Appreciation Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the life of the
fund.(1) The table shows how the fund's average annual returns compare to those
of a broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN(%) CALENDAR YEAR
9.5 1992
14.7 1993
-1.8 1994
24.0 1995
15.4 1996
23.8 1997
-1.0 1998
-1.8 1999
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 15.02% (quarter ending December 31,
1998) and the lowest return for a quarter was -20.56% (quarter ending September
30, 1998). Year-to-date performance through September 30, 2000 was 2.42%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the Fund(2)
One Five -----------------------------------------
(for the periods ending 12/31/99)(1) Year Years Class A Class B Class C Class I
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares(3) -7.44% 10.18% 9.60% -- -- --
-----------------------------------------------------------------------------------------------------------------
Class B Shares -5.40% -- -- 7.01% -- --
-----------------------------------------------------------------------------------------------------------------
Class C Shares -2.49% 10.73% -- -- 8.48% --
-----------------------------------------------------------------------------------------------------------------
Class I Shares -1.45% -- -- -- -- 8.44%
-----------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) 21.26% 16.69% 15.28% 13.49% 13.67% 14.82%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class A Shares since October 7, 1991, Class B shares since April 8, 1996,
Class C Shares since February 4, 1992 and Class I Shares since November 1, 1996.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The Russell 2000 Index is an unmanaged, commonly used measure of small-cap
stock total return performance. The Index's performance does not reflect sales
charges.
4 Phoenix-Zweig Appreciation Fund
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of None(a) 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
--------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 1.00% 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 1.00% None
Other Expenses 0.28% 0.28% 0.28% 0.28%
TOTAL ANNUAL FUND OPERATING EXPENSES 1.58% 2.28% 2.28% 1.28%
</TABLE>
---------------------------------
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Zweig Appreciation Fund 5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $726 $1,045 $1,386 $2,345
-----------------------------------------------------------------------------------------------------------------
Class B $631 $1,012 $1,320 $2,358
-----------------------------------------------------------------------------------------------------------------
Class C $356 $712 $1,220 $2,615
-----------------------------------------------------------------------------------------------------------------
Class I $130 $406 $702 $1,545
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $231 $712 $1,220 $2,358
-----------------------------------------------------------------------------------------------------------------
Class C $231 $712 $1,220 $2,615
-----------------------------------------------------------------------------------------------------------------
</TABLE>
6 Phoenix-Zweig Appreciation Fund
<PAGE>
PHOENIX-ZWEIG FOREIGN EQUITY FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Foreign Equity Fund has an investment objective of increasing the
value of your investment over the long term (capital appreciation) consistent
with preserving capital and reducing portfolio exposure to market risk. There is
no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The adviser manages the fund's investment program, including security
selection, and maintains the general operation of the fund. The
subadviser determines asset allocations for the fund based on
fundamental and technical indicators that measure the risk and reward
characteristics of the stock and bond markets. The three main groups of
indicators are:
o Monetary indicators, including the trend of interest rates, Federal
Reserve policy, commodity prices, and economic activity;
o Sentiment indicators, including mutual funds' cash-to-assets ratio,
foreign buying and selling, and volume of initial and secondary
public offerings; and
o Momentum indicators, including new highs and lows,
up-volume-to-down-volume, and divergences between large- and
small-company stocks.
As the indicators point to increasing levels of market risk, the fund
may gradually reduce its market exposure. The fund may not be fully
invested throughout bull and bear markets, but, instead, some profits
may be left "on the table" as a strategy to limit losses. As a result,
the fund may not keep pace with all-equity benchmarks or fully-invested
stock funds during bull markets. While the fund attempts to limit
losses, it is not possible to eliminate risk entirely.
> Generally, emphasis is placed primarily on the subadviser's tactical
asset allocation strategy; security selection is secondary.
> Under normal circumstances, the fund invests at least 65% of its assets
in foreign equity securities, primarily common stocks of all
capitalizations with both value or growth characteristics.
> Securities are currently selected from approximately 22 countries,
although the subadviser may alter asset and/or geographic allocations
when market capitalizations or economic growth indicators change.
Phoenix-Zweig Foreign Equity Fund 7
<PAGE>
> Stocks are selected using quantitative analysis of growth indicators,
such as earnings, sales and cash flow; value indicators, such as price
to earnings; and miscellaneous indicators, such as price momentum.
Within a country, the adviser attempts to selects stocks that, in the
aggregate, are expected to perform similarly to the major stock market
indices of a particular country.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When declines in the indices occur, or when
attempting to reduce fluctuations in net asset value, the adviser may reduce
market exposure by gradually selling securities and buying money market
instruments or by selling stock index or Treasury futures. Money market
instruments may include commercial paper, short-term corporate obligations, bank
deposits (including time deposits with a maturity of less than one year) and
other financial institution obligations. In addition, the percentage of
investments in foreign equity securities may fall below 65% if the adviser
believes this to be an appropriate response to the strategic indicators. When
this happens, the fund may not achieve its investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
FOREIGN INVESTING
Investing in securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies, such
as:
o less publicly available information about foreign countries;
o political and economic instability within countries;
o differences in financial reporting standards and transaction
settlement systems;
8 Phoenix-Zweig Foreign Equity Fund
<PAGE>
o the possibility of expropriation or confiscatory taxation; and
o changes in investment or exchange regulations.
Some investments may be made in currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the currency exchange rates.
Exchange rate fluctuations can cause the value of your shares to decrease or
increase. Generally, when the value of the U.S. dollar increases against the
foreign currency in which an investment is denominated, the security tends to
decrease in value which, in turn, may cause the value of your shares to
decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
SMALL CAPITALIZATIONS
Companies with small capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small capitalization
companies and their stock performance and can make investment returns highly
volatile. Product lines are often less diversified and subject to competitive
threats. Smaller capitalization stocks are subject to varying patterns of
trading volume and may, at times, be difficult to sell.
Phoenix-Zweig Foreign Equity Fund 9
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Foreign Equity Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the life of the
fund.(1) The table shows how the fund's average annual returns compare to those
of a broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN (%) CALENDAR YEAR
9.1 1998
23.0 1999
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than that shown
if sales charges were deducted. During the period shown in the chart above, the
highest return for a quarter was 13.71% (quarter ending December 31, 1999) and
the lowest return for a quarter was -13.27% (quarter ending September 30, 1998).
Year-to-date performance through September 30, 2000 was -7.20%.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns One
(for the periods ending 12/31/99)(1) Year Life of the Fund(2)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A Shares(3) 15.91% 12.39%
----------------------------------------------------------------------------------------------------------------
Class B Shares 18.06% 13.56%
----------------------------------------------------------------------------------------------------------------
Class C Shares 21.85% 14.65%
----------------------------------------------------------------------------------------------------------------
Morgan Stanley World (excluding U.S.) Index(4) 28.27% 23.05%(5)
----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class A, Class B and Class C Shares since November 21, 1997.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The Morgan Stanley World (excluding U.S.) Index is an unmanaged, commonly
used measure of foreign stock total return performance. The Index's performance
does not reflect sales charges.
(5) Index performance since November 28, 1997.
10 Phoenix-Zweig Foreign Equity Fund
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of the None(a) 5%(b) 1.25%(c)
lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
----------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 1.00%
Other Expenses 1.86% 1.86% 1.86%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 3.16% 3.86% 3.86%
==== ==== ====
</TABLE>
---------------------------------
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Zweig Foreign Equity Fund 11
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $876 $1,493 $2,134 $3,842
-----------------------------------------------------------------------------------------------------------------
Class B $788 $1,478 $2,086 $3,867
-----------------------------------------------------------------------------------------------------------------
Class C $513 $1,178 $1,986 $4,087
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $388 $1,178 $1,986 $3,867
-----------------------------------------------------------------------------------------------------------------
Class C $388 $1,178 $1,986 $4,087
-----------------------------------------------------------------------------------------------------------------
</TABLE>
12 Phoenix-Zweig Foreign Equity Fund
<PAGE>
PHOENIX-ZWEIG GOVERNMENT CASH FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
THIS PROSPECTUS DESCRIBES CLASS A, CLASS B, CLASS C AND CLASS I OF PHOENIX-ZWEIG
GOVERNMENT CASH FUND. Refer to the Phoenix-Zweig Trust's Phoenix-Zweig
Government Cash Fund Class M Prospectus for information on Class M Shares.
INVESTMENT OBJECTIVE
Phoenix-Zweig Government Cash Fund has an investment objective of seeking high
current income consistent with maintaining liquidity and preserving capital.
There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The fund seeks to maintain a stable $1.00 per share price.
> The fund invests exclusively in the following instruments:
o short-term securities issued or guaranteed as to payment of principal
and interest by the U.S. Government, its agencies or
instrumentalities; and
o repurchase agreements collateralized by such securities.
U.S. Government securities are considered to be of the highest credit
quality, yet the primary consideration in choosing among these
securities is managing risk related to changes in interest rate levels.
> Money market instruments selected for investment have remaining
maturities of less than 397 days and have an average weighted portfolio
maturity of not greater than 90 days.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
GENERAL
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
Neither the fund nor the adviser can assure you that a particular yield, return
or level of income will be achieved. Changing market conditions, the relatively
short maturities of fund investments and substantial redemptions may all
negatively affect the fund.
Phoenix-Zweig Government Cash Fund 13
<PAGE>
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. A security's short-term investment rating may decline,
increasing the chances that the issuer will be unable to make such payments when
due. This may reduce the fund's stream of income and decrease the fund's yield.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall.
REPURCHASE AGREEMENTS
If a seller of a repurchase agreement defaults and does not repurchase the
underlying securities, the fund may incur a loss if the value of the underlying
securities declines. Disposition costs may be incurred in connection with
liquidating the underlying securities. If the seller enters into bankruptcy, the
fund may never receive the purchase price or it may be delayed or limited.
U.S. GOVERNMENT SECURITIES
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee or insure principal and
interest will be timely paid to holders of the securities. The entities do not
guarantee that the value of fund shares will remain at $1.00 or that the fund
will realize a particular yield.
14 Phoenix-Zweig Government Cash Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Government Cash Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the life of the
fund.(1) The table shows the fund's average annual returns for one year, five
years and over the life of the fund. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
ANNUAL RETURN (%) CALENDAR YEAR
5.1 1995
4.8 1996
5.0 1997
4.9 1998
4.5 1999
(1) During the period shown in the chart above, the highest return for a quarter
was 1.28% (quarter ending June 30, 1995) and the lowest return for a quarter was
1.05% (quarter ending June 30, 1999). Year-to-date performance through September
30, 2000 was 4.16%.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99) (1) One Year Five Years Life of the Fund(2)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares 4.52% 4.86% 4.74%
----------------------------------------------------------------------------------------------------------------
Class B Shares -0.20% N/A 3.36%
----------------------------------------------------------------------------------------------------------------
Class C Shares 4.52% 4.86% 4.74%
----------------------------------------------------------------------------------------------------------------
Class I Shares 4.83% N/A 5.11%
----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect a full
redemption in the fund's Class B and Class C Shares.
(2) Class A and C Shares since May 1, 1994, Class B Shares since April 8, 1996,
and Class I Shares since November 1, 1996. Class M Shares are covered in a
separate prospectus.
The fund's 7-day yield on December 31, 1999 was 5.06% for Class A Shares, 4.36%
for Class B Shares, 5.06% for Class C Shares and 5.36% for Class I Shares.
Phoenix-Zweig Government Cash Fund 15
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARE
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) None None None None
Maximum Deferred Sales Charge (load) (as a percentage of None 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 0.30% None
Other Expenses 0.29% 1.01% 0.55% 0.17%
---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(A) 1.09% 2.51% 1.35% 0.67%
==== ==== ==== ====
</TABLE>
-------------------------------------
(a) The adviser has voluntarily undertaken to limit expenses (exclusive of
taxes, interest, brokerage commissions, 12b-1 fees and extraordinary expenses)
until April 30, 2001 to 0.35% of the fund's average net assets. Total Annual
Fund Operating Expenses after expense reimbursement (if applicable) are 0.65%
for Class A Shares, 1.35% for Class B Shares, 0.65% for Class C Shares, and
0.35% for Class I Shares.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
16 Phoenix-Zweig Government Cash Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $111 $347 $601 $1,329
-----------------------------------------------------------------------------------------------------------------
Class B $654 $1,082 $1,435 $2,329
-----------------------------------------------------------------------------------------------------------------
Class C $262 $428 $739 $1,624
-----------------------------------------------------------------------------------------------------------------
Class I $68 $214 $373 $835
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $254 $782 $1,335 $2,329
-----------------------------------------------------------------------------------------------------------------
Class C $137 $428 $739 $1,624
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's manager. Refer to
the section "Management of the Funds" for information about expense
reimbursement.
Phoenix-Zweig Government Cash Fund 17
<PAGE>
PHOENIX-ZWEIG GOVERNMENT FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Government Fund has an investment objective to achieve a high
total return from current income and capital appreciation consistent with
preserving capital over the long term. There is no guarantee that the fund will
achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The fund invests primarily in U.S. Government securities of all
maturities and debt securities issued, collateralized or guaranteed by
the U.S. Treasury or a U.S. Government agency or instrumentality. U.S.
Government securities are considered to be of the highest credit
quality.
> The primary consideration in selecting U.S. Government securities is
managing risk related to changes in interest rate levels. One key
factor used by the adviser to measure risk is duration. Duration
measures the interest rate sensitivity of a fixed income security by
assessing and weighting the present value of the security's payment
pattern. Generally, the longer the maturity, the greater the duration
and therefore the greater effect interest rate changes have on the
price of the security.
> The fund alters its mix of short-, medium- and long-term holdings based
on market outlook to attempt to minimize interest rate risk.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
18 Phoenix-Zweig Government Fund
<PAGE>
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating the greater
chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
LONG-TERM MATURITIES
Fixed-income securities with longer maturities may be subject to greater price
fluctuations due to interest rate, tax law and general market changes.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee principal and interest will be
timely paid to holders of the securities. The entities do not guarantee that the
value of fund shares will increase. In addition, not all U.S. Government
securities are backed by the full faith and credit of the United States.
Phoenix-Zweig Government Fund 19
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Government Fund. The bar chart shows changes in the fund's
Class A Shares performance from year to year over a 10-year period.(1) The table
shows how the fund's average annual returns compare to those of a broad-based
securities market index. The fund's past performance is not necessarily an
indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN (%) CALENDAR YEAR
6.1 1990
14.4 1991
4.5 1992
10.4 1993
-2.8 1994
13.8 1995
-0.4 1996
8.4 1997
8.9 1998
-2.6 1999
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 6.60% (quarter ending
September 30, 1998) and the lowest return for a quarter was -3.87% (quarter
ending March 31, 1996). Year-to-date performance through September 30, 2000 was
4.61%.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Average Annual Total Returns One Five Ten
(for the periods ending 12/31/99)(1) Year Years Years Life of the Fund(2)
---------------------------------------------------------------------------------------------------------------
Class A Class B Class C Class I
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A Shares(3) -7.21% 4.43% 5.38% -- -- -- --
---------------------------------------------------------------------------------------------------------------
Class B Shares -6.95% -- -- -- 3.64% -- --
---------------------------------------------------------------------------------------------------------------
Class C Shares -3.09% 4.95% -- -- -- 4.63% --
---------------------------------------------------------------------------------------------------------------
Class I Shares -2.31% -- -- -- -- -- 4.80%
---------------------------------------------------------------------------------------------------------------
Lehman Brothers -2.24% 7.43% 7.48% -- 6.16%(5) 6.68%(6) 4.61%(7)
Government Bond Index(4)
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class B Shares since April 8, 1996, Class C Shares since February 4, 1992,
and Class I Shares since July 14, 1997.
(3) Phoenix/Zweig Advisers LLC assumed responsibility for managing the fund on
September 1, 1989.
(4) The Lehman Brothers Government Bond Index is an unmanaged, commonly used
measure of government bond market total return performance. The Index's
performance does not reflect sales charges.
(5) Index performance since April 30, 1996.
(6) Index performance since February 29, 1992.
(7) Index performance since July 31, 1997.
20 Phoenix-Zweig Government Fund
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of None(a) 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.60% 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 0.75% None
Other Expenses 0.45% 0.45% 0.45% 0.45%
---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.35% 2.05% 1.80% 1.05%
==== ==== ==== ====
------------------------------
</TABLE>
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on
Class B Shares redeemed during the first year; thereafter, it decreases 1%
annually to 3% during the third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Zweig Government Fund 21
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $606 $882 $1,179 $2,022
-----------------------------------------------------------------------------------------------------------------
Class B $608 $943 $1,203 $2,116
-----------------------------------------------------------------------------------------------------------------
Class C $308 $566 $975 $2,116
-----------------------------------------------------------------------------------------------------------------
Class I $107 $334 $579 $1,283
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $208 $643 $1,103 $2,116
-----------------------------------------------------------------------------------------------------------------
Class C $183 $566 $975 $2,116
-----------------------------------------------------------------------------------------------------------------
</TABLE>
22 Phoenix-Zweig Government Fund
<PAGE>
PHOENIX-ZWEIG GROWTH & INCOME FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Growth & Income Fund has an investment objective of increasing the
value of your investment over the long term (capital appreciation) and, to a
lesser extent, provide income (dividends) consistent with preserving capital and
reducing portfolio exposure to market risk. There is no guarantee that the fund
will achieve its objectives.
Principal Investment Strategies
> The adviser manages the fund's investment program, including security
selection, and maintains the general operation of the fund. The
subadviser determines asset allocations for the fund based on
fundamental and technical indicators that measure the risk and reward
characteristics of the stock and bond markets. The three main groups of
indicators are:
o Monetary indicators, including the trend of interest rates, Federal
Reserve policy, commodity prices, and economic activity;
o Sentiment indicators, including mutual funds' cash-to-assets ratio,
foreign buying and selling, and volume of initial and secondary
public offerings; and
o Momentum indicators, including new highs and lows,
up-volume-to-down-volume, and divergences between large- and
small-company stocks.
As the indicators point to increasing levels of market risk, the fund
may gradually reduce its market exposure. The fund may not be fully
invested throughout bull and bear markets, but, instead, some profits
may be left "on the table" as a strategy to limit losses. As a result,
the fund may not keep pace with all-equity benchmarks or fully-invested
stock funds during bull markets. While the fund attempts to limit
losses, it is not possible to eliminate risk entirely.
> Generally, emphasis is placed primarily on the subadviser's tactical
asset allocation strategy; security selection is secondary.
> The fund invests in up to 300 stocks divided approximately equally
between those chosen for their:
o Growth characteristics, which include positive earnings momentum and
above-average earnings; and
o Income characteristics, which include above-average dividend yields
and favorable dividend growth.
Phoenix-Zweig Growth & Income Fund 23
<PAGE>
Stocks selected for fund investment may be of any capitalization.
> Stocks are selected using quantitative analysis of growth indicators,
such as earnings, sales and cash flow; value indicators, such as price
to earnings; and miscellaneous indicators, such as price momentum.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When declines in the indices occur, or when
attempting to reduce fluctuations in net asset value, the adviser may reduce
market exposure by gradually selling securities and buying money market
instruments or by selling stock index or Treasury futures. Money market
instruments may include commercial paper, short-term corporate obligations, bank
deposits (including time deposits with a maturity of less than one year) and
other financial institution obligations. When this happens, the fund may not
achieve its investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
SMALL CAPITALIZATIONS
Companies with small capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative
24 Phoenix-Zweig Growth & Income Fund
<PAGE>
effect on small capitalization companies and their stock performance and can
make investment returns highly volatile. Product lines are often less
diversified and subject to competitive threats. Smaller capitalization stocks
are subject to varying patterns of trading volume and may, at times, be
difficult to sell.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Growth & Income Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the life of the
fund.(1) The table shows how the fund's average annual returns compare to those
of a broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN (%) CALENDAR YEAR
23.1 1997
-1.6 1998
1.1 1999
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 13.47% (quarter ending December 31,
1998) and the lowest return for a quarter was -18.54% (quarter ending September
30, 1998). Year-to-date performance through September 30, 2000 was 9.43%.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99)(1) One Year Life of the Fund(2)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A Shares(3) -4.72% 4.90%
-------------------------------------------------------------------------------------------------------------------
Class B Shares -3.21% 5.33%
-------------------------------------------------------------------------------------------------------------------
Class C Shares 0.45% 6.19%
-------------------------------------------------------------------------------------------------------------------
Class I Shares 1.46% 7.25%
-------------------------------------------------------------------------------------------------------------------
S&P 500 Composite Stock Price Index(4) 21.14% 25.96%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class A, Class B, Class C and Class I Shares since November 26, 1996.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The S&P 500 Composite Stock Price Index is an unmanaged, commonly used
measure of stock market total return performance. The Index's performance does
not reflect sales charges.
Phoenix-Zweig Growth & Income Fund 25
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of None(a) 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 1.00% None
Other Expenses 0.75% 0.75% 0.75% 0.75%
---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.80% 2.50% 2.50% 1.50%
==== ==== ==== ====
-----------------------------------
</TABLE>
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
26 Phoenix-Zweig Growth & Income Growth Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class A $747 $1,109 $1,494 $2,569
------------------------------------------------------------------------------------------------------------------
Class B $653 $1,079 $1,431 $2,584
------------------------------------------------------------------------------------------------------------------
Class C $378 $779 $1,331 $2,836
------------------------------------------------------------------------------------------------------------------
Class I $153 $474 $818 $1,791
------------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class B $253 $779 $1,331 $2,584
------------------------------------------------------------------------------------------------------------------
Class C $253 $779 $1,331 $2,836
------------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix-Zweig Growth & Income Fund 27
<PAGE>
PHOENIX-ZWEIG MANAGED ASSETS
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Managed Assets has an investment objective of increasing your
investment from capital appreciation, dividends and interest consistent with
preserving capital and reducing portfolio exposure to market risk. There is no
guarantee that the fund will achieve its objective. The fund's objective may be
changed without shareholder approval.
PRINCIPAL INVESTMENT STRATEGIES
> The adviser manages the fund's investment program, including security
selection, and maintains the general operation of the fund. The
subadviser determines asset allocations for the fund based on
fundamental and technical indicators that measure the risk and reward
characteristics of the stock and bond markets. The three main groups of
indicators are:
o Monetary indicators, including the trend of interest rates, Federal
Reserve policy, commodity prices, and economic activity;
o Sentiment indicators, including mutual funds' cash-to-assets ratio,
foreign buying and selling, and volume of initial and secondary
public offerings; and
o Momentum indicators, including new highs and lows,
up-volume-to-down-volume, and divergences between large- and
small-company stocks.
As the indicators point to increasing levels of market risk, the fund
may gradually reduce its market exposure. The fund may not be fully
invested throughout bull and bear markets, but, instead, some profits
may be left "on the table" as a strategy to limit losses. As a result,
the fund may not keep pace with all-equity benchmarks or fully-invested
stock funds during bull markets. While the fund attempts to limit
losses, it is not possible to eliminate risk entirely.
> Generally, emphasis is placed primarily on the subadviser's tactical
asset allocation strategy; security selection is secondary.
> The fund allocates its assets among domestic and foreign:
o Stocks,
o Bonds,
o Short-term instruments,
28 Phoenix-Zweig Managed Assets
<PAGE>
o Currencies, and
o Currency-related investments.
> Stocks are selected using quantitative analysis of growth indicators
such as earnings, sales and cash flow; value indicators such as price
to earnings and miscellaneous indicators such as price momentum. Stocks
maybe of any capitalization and may be either foreign or U.S.
Generally, up to 200 U.S. stocks are selected from among 750 stocks
that the adviser believes to be comparable in market capitalization and
liquidity to stocks in the Standard & Poor's 500 Composite Stock Price
Index (S&P 500).
As of September 30, 2000 the capitalization range for the S& P 500 was
approximately $___ million to $___ billion. The adviser attempts to
select foreign stocks that, in the aggregate, are expected to perform
similarly to the major stock market indices of a particular country.
> The fund may invest in foreign and domestic bonds of any maturity which
are rated at the time of investment "A" or higher by Moody's Investors
Service, Inc. or Standard & Poor's Corporation, or if unrated, are
judged to be of comparable quality by the adviser. The primary
consideration in selecting bonds is managing risk related to changes in
interest rate levels. One key factor used by the adviser to measure
risk is duration. Duration measures the interest rate sensitivity of a
fixed income security by assessing and weighting the present value of
the security's payment pattern. Generally, the longer the maturity, the
greater the duration and therefore the greater effect interest rate
changes have on the price of the security. The fund also alters its mix
of short-, medium- and long-term holdings based on market outlook to
attempt to minimize interest rate risk. The fund may continue to hold
securities whose credit quality falls below investment grade.
> Forward currency exchange contracts, options and futures related to
foreign currencies, and securities indexed to foreign currencies may be
included in the fund's portfolio to take advantage of currency
fluctuations. Currency exchange contracts are agreements to exchange
one currency for another at a set rate on a future date. They may be
used to lock in an exchange rate for purchases of securities
denominated in foreign currencies.
> The fund may invest in foreign securities that are not publicly traded
in the United States. Since foreign countries may offer potentially
more growth than the U.S. as new markets or industries open, the fund
may attempt to cash in on such growth.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When declines in the indices occur, or when
attempting to reduce fluctuations in net asset value, the adviser may reduce
market exposure by gradually selling securities and buying money market
instruments or by selling stock index or Treasury futures.
Phoenix-Zweig Managed Assets 29
<PAGE>
Money market instruments may include commercial paper, short-term corporate
obligations, bank deposits (including time deposits with a maturity of less than
one year) and other financial institution obligations. When this happens, the
fund may not achieve its investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease. Likewise, if
interest rates rise, generally the value of fixed income investments will fall,
which will also result in the decrease of share values.
In addition, if the adviser misjudges the return potential of securities, or the
ability of issuers to make scheduled principal and interest payments, the fund's
returns may be lower than prevailing returns and the fund's income available for
distribution may be less than other funds of this type.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating the greater
chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
FOREIGN INVESTING
Investing in securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies, such
as:
o less publicly available information about foreign countries;
o political and economic instability within countries;
o differences in financial reporting standards and transaction
settlement systems;
o the possibility of expropriation or confiscatory taxation; and
o changes in investment or exchange regulations.
30 Phoenix-Zweig Managed Assets
<PAGE>
Some investments may be made in currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the currency exchange rates.
Exchange rate fluctuations can cause the value of your shares to decrease or
increase. Generally, when the value of the U.S. dollar increases against the
foreign currency in which an investment is denominated, the security tends to
decrease in value which, in turn, may cause the value of your shares to
decrease.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS AND FUTURES
Currency exchange contracts involve the risk that currency movements will be
inaccurately predicted, in which case the fund's return would be adversely
affected. In addition, some futures and forward exchange currency contracts are
customized financial contracts between two parties which subject them to the
additional risk that the counterparty will not meet its obligations. They also
may be less liquid and more difficult to value than standardized contracts
traded on a regulated exchange.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
LONG-TERM MATURITIES
Fixed-income securities with longer maturities may be subject to greater price
fluctuations due to interest rate, tax law and general market changes.
SMALL CAPITALIZATIONS
Companies with small capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small capitalization
companies and their stock performance and can make investment returns highly
volatile. Product lines are often less diversified and subject to competitive
threats. Smaller capitalization stocks are subject to varying patterns of
trading volume and may, at times, be difficult to sell.
Phoenix-Zweig Managed Assets 31
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in Phoenix-Zweig Managed Assets. The bar chart shows changes in the fund's Class
A Shares performance from year to year over the life of the fund.(1) The table
shows how the fund's average annual returns compare to those of a broad-based
securities market index. The fund's past performance is not necessarily an
indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN (%) CALENDAR YEAR
-2.9 1994
16.3 1995
9.8 1996
15.5 1997
14.9 1998
8.8 1999
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would have been less
than those shown if sales charges were deducted. During the period shown in the
chart above, the highest return for a quarter was 9.59% (quarter ending March
31, 1998) and the lowest return for a quarter was -4.17% (quarter ending
September 30, 1998). Year-to-date performance through September 30, 2000 was
0.98%.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns One Five
(for the periods ending 12/31/99)(1) Year Years Life of the Fund(2)
------------------------------------------------------------------------------------------------------------------
Class A Class B Class C Class I
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares(3) 2.55% 11.67% 9.65% -- -- --
------------------------------------------------------------------------------------------------------------------
Class B Shares 4.06% -- -- 11.71% -- --
------------------------------------------------------------------------------------------------------------------
Class C Shares 8.01% 12.19% -- -- 9.81% --
------------------------------------------------------------------------------------------------------------------
Class I Shares 9.08% -- -- -- -- 13.94%
------------------------------------------------------------------------------------------------------------------
MSCI World Index(4) 25.34% 20.25% 18.43% 19.83% 18.43% 20.75%
------------------------------------------------------------------------------------------------------------------
Salomon World Government Bond 1.32% 9.81% 7.78% 8.49% 7.78% 7.26%
Index-U.S. Dollar Currency Hedged(5)
------------------------------------------------------------------------------------------------------------------
Balanced Benchmark(6) 14.26% 11.90% 11.63% 11.21% 11.63% 14.17%(7)
------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class A and Class C Shares since February 8, 1993, Class B Shares since
April 8, 1996, and Class I Shares from November 1, 1996.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) Morgan Stanley Capital International World Index is a market capitalization
weighted index composed of companies representative of the market structure of
21 developed market countries in North America, Europe, and the Asia/Pacific
region. The index is calculated in U.S. dollars with dividends reinvested.
(5) Salomon World Government Bond Index- U.S. Dollar Currency Hedged is a market
capitalization weighted index consisting of the government bond markets of 18
developed nations. The Index is hedged into U.S. dollars to eliminate the impact
of currency exchange rate fluctuations.
(6) The Balanced Benchmark is a composite index made up of 50% of the Morgan
Stanley Capital International (MSCI) World Index and 50% of the Salomon Currency
Hedged World Government Bond Index. The index's performance does not reflect
sales charges.
(7) Benchmark performance since November 30, 1996.
32 Phoenix-Zweig Managed Assets
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of None(a) 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 1.00% 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 1.00% None
Other Expenses 0.21% 0.21% 0.21% 0.21%
---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.51% 2.21% 2.21% 1.21%
==== ==== ==== ====
-----------------------------------
</TABLE>
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Zweig Managed Assets 33
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class A $720 $1,025 $1,351 $2,273
------------------------------------------------------------------------------------------------------------------
Class B $624 $991 $1,285 $2,285
------------------------------------------------------------------------------------------------------------------
Class C $349 $691 $1,185 $2,544
------------------------------------------------------------------------------------------------------------------
Class I $123 $384 $665 $1,466
------------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class B $224 $691 $1,185 $2,285
------------------------------------------------------------------------------------------------------------------
Class C $224 $691 $1,185 $2,285
------------------------------------------------------------------------------------------------------------------
</TABLE>
34 Phoenix-Zweig Managed Assets
<PAGE>
PHOENIX-ZWEIG STRATEGY FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Strategy Fund has an investment objective of increasing the value
of your investment over the long term (capital appreciation) consistent with
preserving capital and reducing portfolio exposure to market risk. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The adviser manages the fund's investment program, including security
selection, and maintains the general operation of the fund. The
subadviser determines asset allocations for the fund based on
fundamental and technical indicators that measure the risk and reward
characteristics of the stock and bond markets. The three main groups of
indicators are:
o Monetary indicators, including the trend of interest rates, Federal
Reserve policy, commodity prices, and economic activity;
o Sentiment indicators, including mutual funds' cash-to-assets ratio,
foreign buying and selling, and volume of initial and secondary
public offerings; and
o Momentum indicators, including new highs and lows,
up-volume-to-down-volume, and divergences between large- and
small-company stocks.
As the indicators point to increasing levels of market risk, the fund
may gradually reduce its market exposure. The fund may not be fully
invested throughout bull and bear markets, but, instead, some profits
may be left "on the table" as a strategy to limit losses. As a result,
the fund may not keep pace with all-equity benchmarks or fully-invested
stock funds during bull markets. While the fund attempts to limit
losses, it is not possible to eliminate risk entirely.
> Generally, emphasis is placed primarily on the subadviser's tactical
asset allocation strategy; security selection is secondary.
> The fund invests primarily in common stocks of companies with large
capitalizations (generally over $1 billion) with both value or growth
characteristics.
> Stocks are selected using quantitative analysis of growth indicators,
such as earnings, sales and cash flow; value indicators, such as price
to earnings; and miscellaneous indicators, such as price momentum.
Phoenix-Zweig Strategy Fund 35
<PAGE>
> Generally, up to 300 stocks are selected from the 1,000 most liquid
stocks that the adviser considers to be comparable to the stocks
included in the S&P 500.
> The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When declines in the indices occur, or when
attempting to reduce fluctuations in net asset value, the adviser may reduce
market exposure by gradually selling securities and buying money market
instruments or by selling stock index or Treasury futures. Money market
instruments may include commercial paper, short-term corporate obligations, bank
deposits (including time deposits with a maturity of less than one year) and
other financial institution obligations. When this happens, the fund may not
achieve its investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
36 Phoenix-Zweig Strategy Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Strategy Fund. The bar chart shows changes in the fund's
Class A Shares performance from year to year over a 10-year period.(1) The table
shows how the fund's average annual returns compare to those of a broad-based
securities market index. The fund's past performance is not necessarily an
indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
ANNUAL RETURN (%) CALENDAR YEAR
-2.2 1990
23.4 1991
7.6 1992
15.0 1993
1.1 1994
25.1 1995
13.0 1996
18.1 1997
-1.9 1998
2.6 1999
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 13.13% (quarter ending
December 31, 1998) and the lowest return for a quarter was -19.92% (quarter
ending September 30, 1998). Year-to-date performance through September 30, 2000
was 1.56%.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns One Five Ten
(for the periods ending 12/31/99)(1) Year Years Years Life of the Fund(2)
-------------------------------------------------------------------------------------------------------------------
Class A Class B Class C Class I
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A Shares(3) -3.27% 9.64% 9.12% -- -- -- --
-------------------------------------------------------------------------------------------------------------------
Class B Shares -1.13% -- -- -- 5.79% -- --
-------------------------------------------------------------------------------------------------------------------
Class C Shares -1.94% 10.17% -- -- -- 8.67% --
-------------------------------------------------------------------------------------------------------------------
Class I Shares -2.96% -- -- -- -- -- 7.80%
-------------------------------------------------------------------------------------------------------------------
S&P 500 Composite 21.14% 28.66% 18.25% -- 26.92% 20.25% 28.26%
Stock Price Index(4)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class B Shares since April 8, 1996, Class C Shares since February 4, 1992,
and Class I Shares since November 1, 1996.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The S&P 500 Composite Stock Price Index is an unmanaged, commonly used
measure of stock market total return performance. The Index's performance does
not reflect sales charges.
Phoenix-Zweig Strategy Fund 37
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of None(a) 5%(b) 1.25%(c) None
the lesser of the value redeemed or the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
---------------------------------------------------------
CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(d) 0.30% 1.00% 1.00% None
Other Expenses 0.23% 0.23% 0.23% 0.23%
---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.28% 1.98% 1.98% 0.98%
==== ==== ==== ====
----------------------------------
</TABLE>
(a) A 1% CDSC is imposed on redemptions within 12 months of purchases of $1
million or more originally purchased without an initial sales charge as
described under "Class A Shares--Reduced Sales Charges" in the Statement of
Additional Information.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
38 Phoenix-Zweig Strategy Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class A $698 $958 $1,237 $2,031
------------------------------------------------------------------------------------------------------------------
Class B $601 $921 $1,168 $2,041
------------------------------------------------------------------------------------------------------------------
Class C $326 $621 $1,068 $2,306
------------------------------------------------------------------------------------------------------------------
Class I $100 $312 $542 $1,201
------------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class B $201 $621 $1,068 $2,041
------------------------------------------------------------------------------------------------------------------
Class C $201 $621 $1,068 $2,306
------------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix-Zweig Strategy Fund 39
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
ADDITIONAL INVESTMENT TECHNIQUES
In addition to the Principal Investment Strategies and Risks, the Phoenix-Zweig
Appreciation Fund ("Appreciation Fund"), Phoenix-Zweig Foreign Equity Fund
("Foreign Fund"), Phoenix-Zweig Government Cash Fund ("Cash Fund"),
Phoenix-Zweig Government Fund ("Government Fund"), Phoenix-Zweig Growth & Income
Fund ("Growth & Income Fund"), Phoenix-Zweig Managed Assets ("Managed Assets
Fund") and Phoenix-Zweig Strategy Fund ("Strategy Fund") may engage in the
following non-principal investment techniques as indicated:
BORROWING
Each fund may obtain fixed interest rate loans and invest the loan proceeds in
other assets. If the securities purchased with such borrowed money decrease in
value or do not increase enough to cover interest and other borrowing costs, the
funds will suffer greater losses than if no borrowing took place.
COLLATERALIZED MORTGAGE OBLIGATIONS
The funds may investment in collateralized mortgage obligations (CMOs). Early
payoffs on the underlying loans may result in the fund receiving less income
than originally anticipated. The variability in prepayments tends to limit price
gains when interest rates drop and exaggerate price declines when interest rates
rise. In the event of high prepayments, the fund may be required to invest the
proceeds at lower interest rates, causing the fund to earn less than if the
prepayments had not occurred.
DERIVATIVES
Each fund, except the Cash Fund, may buy and write call and put options on
securities, securities indices, and foreign currencies, and may enter into
futures contracts and related options. The Foreign and Managed Assets Funds may
also enter into swap agreements relating to interest rates, foreign currencies,
and securities indices and forward foreign currency contracts. The funds may use
these techniques to hedge against changes in interest rates, foreign currency
exchange rates, changes in securities prices or other factors affecting the
value of their investments, or as part of their overall investment technique. If
the subadviser fails to correctly predict these changes, the funds can lose
money. Derivatives transactions may be less liquid than other securities and the
counterparty to such transaction may not perform as expected. In addition,
futures and options involve market risk in excess of their value.
FOREIGN SECURITIES
Appreciation and Growth & Income Funds may invest in securities of foreign
(non-U.S.) issuers, including foreign debt securities and American Depository
Receipts (ADRs).
40 Phoenix-Zweig Trust
<PAGE>
Investments in non-U.S. securities involve additional risks and conditions,
including differences in accounting standards, generally higher commission
rates, differences in transaction settlement systems, political instability, and
the possibility of confiscatory or expropriation taxes, all of which may
negatively impact the funds. Dividends and other income payable on foreign
securities may also be subject to foreign taxes.
Some foreign investments may be made in currencies other than U.S. dollars that
will fluctuate in value as a result of changes in the currency exchange rate.
In addition, foreign markets and currencies may not perform as well as U.S.
markets.
Risks associated with foreign investments may be intensified in emerging market
countries, and such countries and companies doing business in such countries may
not have the same range of opportunities and have more obstacles to financial
success than their counterparts in developed nations.
MONEY MARKET INSTRUMENTS
The funds may invest in short-term high-quality debt securities to reduce
exposure to stock and bond markets and to reduce fluctuations in a fund's net
asset value. Money market securities include short-term U.S. Government
obligations, commercial paper, other short-term corporate obligations, bank
deposits and other financial institution obligations.
MUTUAL FUND INVESTING
The funds may invest in shares of other mutual funds. Assets invested in other
mutual funds incur a layering of expenses including operating costs, advisory
fees and administrative fees that you, as a shareholder in the funds, indirectly
bear.
REPURCHASE AGREEMENTS
The funds may invest in repurchase agreements. Default or insolvency of the
other party presents a risk to the funds.
SECURITIES LENDING
Each fund may loan portfolio securities to increase investment returns. If the
borrower is unwilling or unable to return the borrowed securities when due, the
fund can suffer losses.
SELLING SHORT
Each fund, except the Cash fund, may sell a security or future short. In order
to establish a short position in a security, the fund must first borrow the
security from a broker or other institution to complete the sale. The fund may
not always be able to borrow a security, or to close out a short position at a
particular time or at an acceptable price. If the price of the borrowed security
increases between the date of the short sale and the date on which the fund
replaces the security, the fund may experience losses. The fund's losses on a
short sale is limited only by the maximum attainable price of the security
(which could be limitless) less the price the fund paid for the security at the
time it was borrowed.
Phoenix-Zweig Trust 41
<PAGE>
U.S. GOVERNMENT SECURITIES
Appreciation and Growth & Income Funds may invest in U.S. Government securities
with maturities of five years or less. Obligations issued or guaranteed by the
U.S. Government, its agencies, authorities and instrumentalities only guarantee
principal and interest will be timely paid. The entities do not guarantee that
the value of portfolio shares will increase. In addition, not all U.S.
Government securities are backed by the full faith and credit of the United
States.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS
The funds may purchase a bond or stock with delivery of the security and payment
deferred to a future date. The value of the security on settlement date may be
more or less than the price paid as a result of changes in interest rates and
market conditions. If the value on settlement date is less, the value of your
shares may decline.
The funds may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the funds.
42 Phoenix-Zweig Trust
<PAGE>
MANAGEMENT OF THE FUNDS
--------------------------------------------------------------------------------
THE ADVISERS
Phoenix/Zweig Advisers LLC ("Phoenix/Zweig") (formerly Zweig/Glaser Advisers
LLC) is the investment adviser to each of the funds and is located at 900 Third
Avenue, New York, NY 10022. As of December 31, 1999, Phoenix/Zweig was managing
twelve funds with net assets of approximately $1.8 billion and acting as adviser
to two closed-end funds with more than $1.4 billion in assets. Phoenix/Zweig has
been managing funds since 1989.
Phoenix/Zweig is a wholly-owned subsidiary of Phoenix Investment Partners, Ltd.
("PXP"), a Delaware corporation, located at 56 Prospect St., Hartford, CT 06115.
PXP is a publicly-traded independent registered investment advisory firm, and
has served investors for over 70 years. As of December 31, 1999, PXP had over
$64.6 billion in assets under management.
Subject to the direction of the Trust's Board of Trustees, Phoenix/Zweig is
responsible for managing the funds' investment program, selecting specific
securities for the funds, and maintaining the general operations of the funds.
Phoenix/Zweig manages the funds' assets to conform with the investment policies
as described in this prospectus.
The funds pay Phoenix/Zweig a monthly investment management fee that is accrued
daily against the value of the fund's net assets at the following annual rates.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Appreciation Fund,
Foreign Equity Fund, Growth & Income Fund
and Managed and Government
Assets Fund Strategy Fund Government Fund Cash Fund
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fee 1.00% 0.75% 0.60% 0.50%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Zweig Consulting LLC ("Zweig Consulting"), a New York limited liability company,
acts as the investment subadviser for the funds and is located at 900 Third
Avenue, New York, NY 10022. Dr. Martin E. Zweig serves as President of the Trust
and of Zweig Consulting. Dr. Zweig and his associates determine the asset
allocation strategy for all of the Phoenix-Zweig mutual funds, except the
Government Cash Fund. Dr. Zweig does not select the individual securities to
implement the strategy. The portfolio managers select the specific securities
for each fund. Dr. Martin E. Zweig, President of Zweig Consulting LLC, developed
the asset allocation strategy that he and his team employ. Dr. Zweig has been a
regular panelist on PBS television's Wall $treet Week with Louis Rukeyser for
over 25 years and, in 1992, was inducted into the program's Hall of Fame. He is
also the author of the books Winning on Wall Street, The ABCs of Market
Forecasting and Winning with New IRAs.
Phoenix/Zweig pays Zweig Consulting a subadvisory fee of approximately
$2,500,000 per year, allocated monthly.
Phoenix-Zweig Trust 43
<PAGE>
The adviser has voluntarily agreed to assume operating expenses of the
Government Cash Fund (excluding interest, taxes, brokerage commissions, 12b-1
fees, and extraordinary expenses) until April 30, 2001 to the extent that such
expenses exceed 0.35% of the average annual net assets of that fund.
During the funds' last fiscal year, the funds paid total management fees of
$15,198,917.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the funds are made by a team of investment
professionals. Dr. Martin E. Zweig, President of Zweig Consulting, and a team of
analysts determine the overall asset allocation strategy for each of the funds,
except the Government Cash Fund. Carlton Neel and his team of portfolio managers
are primarily responsible for the day-to-day investment decisions related to the
funds.
Dr. Zweig is President of Zweig Consulting LLC and of the Trust. He serves as
Chairman and President of The Zweig Total Return Fund, Inc. (since 1988) and
The Zweig Fund, Inc. (since 1986); Managing Director of Zweig-DiMenna Associates
LLC; President of Zweig-DiMenna International Managers, Inc., Zweig-DiMenna
Associates, Inc. and Gotham Advisors, Inc. He serves as a member of the
Undergraduate Executive Board of the Wharton School, University of Pennsylvania
and as Trustee of the Manhattan Institute. Prior to March 1, 1999, Dr. Zweig
served as Chairman of the adviser and of Euclid Advisors LLC.
Carlton Neel has served as the senior portfolio manager for the Strategy Fund,
Appreciation Fund and Growth & Income Fund since January 1, 2000, for Managed
Assets and the Government Fund since July 5, 1995, and for the Foreign Equity
Fund since its inception. Mr. Neel is Senior Vice President of the Trust and of
Phoenix/Zweig Advisers LLC. Mr. Neel received a dual B.A. in Economics and
Political Science from Brown University. Prior to joining the Zweig Companies,
he was a Vice President with J.P. Morgan & Co., Inc.
Beth Abraham has served as portfolio manager for the Government Cash Fund and as
an Assistant Vice President of the Trust since 1995. Ms. Abraham's experience
includes consulting to the mutual fund industry and acting as a Senior
Compliance Examiner in the New York Regional Office of the Securities and
Exchange Commission.
44 Phoenix-Zweig Trust
<PAGE>
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
Each fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, each fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the
fund.
The Government Cash Fund attempts to stabilize the net asset value of its shares
at $1.00 and uses the amortized cost method (which approximates market value) to
value its securities.
Asset Value: Each fund's investments are valued at market value. If market
quotations are not available, a fund determines a "fair value" for an investment
according to rules and procedures approved by the Trustees. Foreign forward
currency contracts are valued using forward currency exchange rates supplied by
a quotation service. Short-term investments having a remaining maturity of sixty
days or less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities that are deducted from the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class' net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of a fund.
The resulting amount for each class is then divided by the number of shares
outstanding of that class to produce each class' net asset value per share.
The net asset value per share of each class of each fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time) and as of 2:00 PM eastern time
for the Government Cash Fund. If the funds hold securities that are traded on
foreign exchanges that trade on weekends or other holidays when the funds do
not price their shares, the net asset value of the funds' shares may change on
days when shareholders will not be able to purchase or redeem the funds'
shares.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the funds' authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time), or 2:00 PM eastern
time for the Government Cash Fund, will be executed based on that day's net
asset value. Shares credited to your account from the reinvestment of fund
distributions will be in full and fractional shares that are
Phoenix-Zweig Trust 45
<PAGE>
purchased at the closing net asset value on the next business day on which the
fund's net asset value is calculated following the dividend record date.
SALES CHARGES
--------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
The Government Cash Fund offers five classes of shares (four of which are
described in this prospectus), the Foreign Equity Fund offers three classes of
shares, and each of the other funds offers four classes of shares. Each class of
shares has different sales and distribution charges (see "Fund Expenses"
previously in this prospectus). The Trust has adopted distribution and service
plans allowed under Rule 12b-1 of the Investment Company Act of 1940 that
authorize the fund to pay distribution and service fees for the sale of its
shares and for services provided to shareholders.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the fund's assets on
an ongoing basis, these fees, over time, will increase the cost of your
investment and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a maximum sales
charge at the time of purchase equal to 5.75% of the offering price (6.10% of
the amount invested) for the Appreciation Fund, Foreign Equity Fund, Growth &
Income Fund, Managed Assets, and Strategy Fund, and 4.75% of the offering price
(4.99% of the amount invested) for the Government Fund. The Government Cash Fund
has no sales charge for Class A Shares. The sales charge may be reduced or
waived under certain conditions. Generally, Class A Shares are not subject to
any charges by the fund when redeemed; however, a 1% CDSC is imposed on
redemptions within the first 12 months on purchases of $1 million or more if
originally purchased without an initial sales charge (except for the Government
Cash Fund). Class A Shares have lower distribution and service fees (0.30%) and
pay higher dividends than Class B or Class C Shares.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first six
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge
46 Phoenix-Zweig Trust
<PAGE>
Alternative--Class B and Class C Shares" below. This charge declines to 0% over
a period of six years and may be waived under certain conditions. Class B Shares
have higher distribution and service fees (1.00%) and pay lower dividends than
Class A Shares. Class B Shares automatically convert to Class A Shares seven
years after purchase. Purchase of Class B Shares may be inappropriate for any
investor who may qualify for reduced sales charges of Class A Shares and anyone
who is over 85 years of age. The distributor may decline purchases in such
situations.
CLASS C SHARES. If you purchase Class C Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class C Shares within the first year
after they are purchased, you will pay a sales charge of 1.25%. See "Deferred
Sales Charge Alternative--Class B and Class C Shares" below. Class C Shares have
the same distribution and service fees of 1.00%, except for the Government and
Government Cash Funds which are 0.75% and 0.30%, respectively, and pay
comparable dividends as Class B Shares. Class C Shares do not convert to any
other class of shares of the fund.
CLASS I SHARES (EXCEPT THE FOREIGN EQUITY FUND). Class I Shares are offered
primarily to persons subject to the adviser's Code of Ethics relating to
personal securities transactions and to tax-exempt retirement plans specifically
affiliated with the adviser, as well as certain institutional investors. If you
are eligible to purchase and do purchase Class I Shares, you will pay no sales
charge at any time. There are no distribution and services fees applicable to
Class I Shares. Class I Shares are not available in all states. Please refer to
"Alternative Purchase Arrangements" in the Statement of Additional Information
to see if you qualify.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Initial Sales Charges: Combination Purchase Privilege" in the
Statement of Additional Information). Shares purchased based on the automatic
reinvestment of income dividends or capital gains distributions are not subject
to any sales charges. The sales charge is divided between your investment dealer
and the fund's distributor (Phoenix Equity Planning Corporation or "PEPCO").
Phoenix-Zweig Trust 47
<PAGE>
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
<TABLE>
<CAPTION>
AMOUNT OF SALES CHARGE AS
TRANSACTION A PERCENTAGE OF
---------------------------------------------------
AT OFFERING PRICE NET
(ALL FUNDS, EXCEPT GOVERNMENT AND OFFERING AMOUNT
GOVERNMENT CASH FUNDS) PRICE INVESTED
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Under $50,000 5.75% 6.10%
$50,000 but under $100,000 4.75 4.99
$100,000 but under $250,000 3.75 3.90
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
GOVERNMENT FUND
-----------------------------------------------------------------------------------------------------------
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
There is no initial sales charge on purchases of the Government Cash Fund's
Class A Shares.
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND CLASS C SHARES
Class B and Class C Shares are purchased without an initial sales charge;
however, shares sold within a specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the rates listed below. The sales
charge will be multiplied by the then current market value or the initial cost
of the shares being redeemed, whichever is less. No sales charge will be imposed
on increases in net asset value or on shares purchased through the reinvestment
of income dividends or capital gains distributions. To minimize the sales
charge, shares not subject to any charge will be redeemed first, followed by
shares held the longest time. To calculate the amount of shares owned and time
period held, all Class B Shares purchased in any month are considered purchased
on the last day of the preceding month, and all Class C Shares are considered
purchased on the trade date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR 1 2 3 4 5 6 7
-----------------------------------------------------------------------------------------------------------------
CDSC 5% 4% 3% 3% 2% 1% 0%
</TABLE>
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES
YEAR 1 2+
--------------------------------------------------------------------------------
CDSC 1.25% 0%
48 Phoenix-Zweig Trust
<PAGE>
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts (IRAs), or accounts that use
the systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
o $500 for all other accounts.
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
The funds reserve the right to refuse a purchase order for any reason.
STEP 2.
Your second choice will be what class of shares to buy. The funds offer Class A,
Class B and Class C Shares for individual investors, as well as Class I Shares
(except for the Foreign Equity Fund) to qualified investors. Each has different
sales and distribution charges. Because all future investments in your account
will be made in the share class you choose when you open your account, you
should make your decision carefully. Your financial advisor can help you pick
the share class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
Phoenix-Zweig Trust 49
<PAGE>
o Receive dividends in additional shares and capital gain distributions
in cash;
o Receive dividends in cash and capital gain distributions in additional
shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TO OPEN AN ACCOUNT
--------------------------------------------------------------------------------
Through a financial advisor Contact your advisor.
Some advisors may charge a fee and may set
different minimum investments or
limitations on buying shares.
--------------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it
with a check payable to the fund. Mail them
to: State Street Bank, Attn: Phoenix Funds,
P.O. Box 8301, Boston, MA 02266-8301.
--------------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it
` with a check payable to the fund. Send them
to: Boston Financial Data Services, Attn:
Phoenix Funds, 66 Brooks Drive, Braintree,
MA 02184.
--------------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
--------------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the
application and send it with your initial
investment payable to the fund. Mail them to:
State Street Bank, P.O. Box 8301, Boston,
MA 02266-8301.
--------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
--------------------------------------------------------------------------------
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the funds buy back shares at the net asset value next
determined after receipt of a redemption order by the funds' Transfer Agent or
an authorized agent. In the case of a Class B or Class C Share redemption, you
will be subject to the applicable deferred sales charge, if any, for such
shares. Subject to certain restrictions, shares may be redeemed by telephone or
in writing. In addition, shares may be sold through securities dealers, brokers
or agents who may charge customary commissions or fees for their services. The
funds do not charge any redemption fees. Payment for shares redeemed is made
within seven days; however, redemption proceeds will not be disbursed until each
check used for purchases of shares
50 Phoenix-Zweig Trust
<PAGE>
has been cleared for payment by your bank, which may take up to 15 days after
receipt of the check.
--------------------------------------------------------------------------------
TO SELL SHARES
--------------------------------------------------------------------------------
Through a financial advisor Contact your advisor.
Some advisors may charge a fee and may set
different minimums on redemptions of
accounts.
--------------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share
certificates (if you hold certificate shares)
to: State Street Bank, Attn: Phoenix Funds,
P.O. Box 8301, Boston, MA 02266-8301. Be sure
to include the registered owner's name, fund
and account number, and number of shares or
dollar value you wish to sell.
--------------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share
certificates (if you hold certificate shares)
to: Boston Financial Data Services, Attn:
Phoenix Funds, 66 Brooks Drive, Braintree, MA
02184. Be sure to include the registered
owner's name, fund and account number, and
number of shares or dollar value you wish
to sell.
--------------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made
by calling (800) 243-1574.
--------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
--------------------------------------------------------------------------------
By Check (Government Fund and If you selected the checkwriting feature, you
Government Cash Fund only.) may write checks for amounts of $500 or more.
Checks may not be used to close an account.
--------------------------------------------------------------------------------
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. Each fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by anyone but the shareholder(s)
of record. Transfers between broker-dealer "street" accounts are governed by the
accepting broker-dealer. Questions regarding this type of transfer should be
directed to your financial advisor. Redemption requests will not be honored
until all required documents in proper form have been received. To avoid delay
in redemption or transfer, shareholders having questions about specific
requirements should contact the funds' Transfer Agent at (800) 243-1574.
Phoenix-Zweig Trust 51
<PAGE>
REDEMPTIONS BY MAIL
--------------------------------------------------------------------------------
> If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instruction if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address on
record.
Send a clear letter of instruction with a signature guarantee when any
of these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last 60
days.
o You want the proceeds to go to a different name or address than on
the account.
> If you are selling shares held in a corporate or fiduciary account,
please contact the funds' Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be made by an eligible
guarantor institution as defined by the funds' Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
52 Phoenix-Zweig Trust
<PAGE>
ACCOUNT POLICIES
--------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you have made a partial or complete redemption of your Class
A, Class B, or Class C Shares, you can purchase Class A Shares of any fund at
net asset value, with no sales charge, by reinvesting all or part of your
proceeds, but not more. Send your written request to State Street Bank, P.O.
Box 8301, Boston, MA 02266-8301. You can call us at (800) 243-1574 for more
information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B and Class C shareholders who have
had the contingent deferred sales charge waived because they are in the
Systematic Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should carefully read the prospectus of the fund into which you want to
exchange before deciding to make an exchange. You can obtain a prospectus from
your financial advisor or by calling us at (800) 243-1574 or accessing our Web
site at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of
shares; e.g., Class A for Class A. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
o Exchanges may be made by phone ((800) 243-1574) or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
o Because excessive trading can hurt fund performance and harm other
shareholders, the fund reserves the right to temporarily or
permanently end exchange privileges or reject an order from anyone
who appears to be attempting to time the market, including investors
who request more than one exchange in any 30-day period. The fund's
distributor has entered into agreements with certain timing firms
permitting
Phoenix-Zweig Trust 53
<PAGE>
them to exchange by telephone. These privileges are limited, and the
funds' distributor has the right to reject or suspend them.
o Class A Shares of the Government Cash Fund purchased without a sales
charge are exchangeable at net asset value plus the applicable sales
charge. Exchange privileges do not apply to Class M Shares of the
Government Cash Fund.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
INVESTOR SERVICES
--------------------------------------------------------------------------------
Investo-Matic is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the Automatic
Investment Plan section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one fund to
another on a monthly, quarterly, semiannual or annual basis. Shares of one fund
will be exchanged for shares of the same class of another fund at the interval
you select. To sign up, just complete the Systematic Exchange Section on the
application. Exchange privileges may not be available for all Phoenix Funds, and
may be rejected or suspended.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000 and elect
to have all dividends reinvested.
54 Phoenix-Zweig Trust
<PAGE>
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
The fund plans to make distributions from net investment income at intervals
stated on the table below and to distribute net realized capital gains, if any,
at least annually.
--------------------------------------------------------------------------------
FUND DIVIDEND PAID
--------------------------------------------------------------------------------
Appreciation Fund Annually
--------------------------------------------------------------------------------
Foreign Equity Fund Annually
--------------------------------------------------------------------------------
Government Cash Fund Monthly (declared Daily)
--------------------------------------------------------------------------------
Government Fund Monthly
--------------------------------------------------------------------------------
Growth & Income Fund Semiannually
--------------------------------------------------------------------------------
Managed Assets Semiannually
--------------------------------------------------------------------------------
Strategy Fund Semiannually
--------------------------------------------------------------------------------
Distributions of short-term capital gains and net investment income are taxable
to shareholders as ordinary income. Long-term capital gains, if any, distributed
to shareholders and which are designated by the fund as capital gains
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix-Zweig Trust 55
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the funds' financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, independent accountants, except as
indicated. Their report, together with the funds' financial statements, are
included in the funds' most recent Annual Report, which is available upon
request.
PHOENIX-ZWEIG APPRECIATION FUND
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.99 $16.21 $18.27 $15.90 $15.91 $13.54
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.08(4) 0.11(4) 0.07 0.10 0.17 0.16
Net realized and unrealized gain (loss) 0.14 (0.51) (0.32) 3.67 2.25 3.05
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.22 (0.40) (0.25) 3.77 2.42 3.21
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.12) (0.07) (0.09) (0.17) (0.33)
Dividends from net realized gains -- (3.70) (1.74) (1.31) (2.26) (0.51)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (3.82) (1.81) (1.40) (2.43) (0.84)
------ ------ ------ ------ ------ ------
Change in net asset value 0.22 (4.22) (2.06) 2.37 (0.01) 2.37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.21 $11.99 $16.21 $18.27 $15.90 $15.91
====== ====== ====== ====== ====== ======
Total return(1) 1.75%(3) (1.80)% (0.97)% 23.83% 15.39% 24.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $95,723 $124,461 $240,900 $293,809 $275,935 $272,590
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.76%(2) 1.58% 1.52% 1.52% 1.62% 1.63%
Net investment income 1.30%(2) 0.74% 0.34% 0.61% 1.03% 1.10%
Portfolio turnover rate 121%(3) 92% 117% 77% 88% 68%
-----------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized
(4) Computed using average shares outstanding.
56 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG APPRECIATION FUND
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.80 $16.02 $18.13 $15.82 $16.34
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.04(4) 0.01(4) (0.06) (0.02) 0.03
Net realized and unrealized gain (loss) 0.13 (0.51) (0.31) 3.64 1.74
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.17 (0.50) (0.37) 3.62 1.77
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.02) -- -- (0.03)
Dividends from net realized gains -- (3.70) (1.74) (1.31) (2.26)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (3.72) (1.74) (1.31) (2.29)
------ ------ ------ ------ ------
Change in net asset value 0.17 (4.22) (2.11) 2.31 (0.52)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.97 $11.80 $16.02 $18.13 $15.82
====== ====== ====== ====== ======
Total return(1) 1.44%(3) (2.45)% (1.66)% 22.97% 11.01%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $16,617 $19,523 $30,370 $22,122 $8,350
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.46%(2) 2.27% 2.22% 2.22% 2.32%(2)
Net investment income (loss) 0.60%(2) 0.08% (0.36)% (0.09)% 0.33%(2)
Portfolio turnover rate 121%(3) 92% 117% 77% 88%
</TABLE>
PHOENIX-ZWEIG APPRECIATION FUND
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.79 $15.99 $18.10 $15.79 $15.83 $13.36
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.04(4) --(4) (0.07) (0.02) 0.06 0.06
Net realized and unrealized gain (loss) 0.13 (0.50) (0.30) 3.64 2.22 3.03
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.17 (0.50) (0.37) 3.62 2.28 3.09
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.06) (0.11)
Dividends from net realized gains -- (3.70) (1.74) (1.31) (2.26) (0.51)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (3.70) (1.74) (1.31) (2.32) (0.62)
------ ------ ------ ------ ------ ------
Change in net asset value 0.17 (4.20) (2.11) 2.31 (0.04) 2.47
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.96 $11.79 $15.99 $18.10 $15.79 $15.83
====== ====== ====== ====== ====== ======
Total return(1) 1.44%(3) (2.49)% (1.67)% 23.01% 14.54% 23.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $61,663 $89,165 $201,789 $248,584 $218,714 $195,204
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.45%(2) 2.28% 2.22% 2.22% 2.32% 2.33%
Net investment income (loss) 0.61%(2) 0.02% (0.36)% (0.09)% 0.33% 0.40%
Portfolio turnover rate 121%(3) 92% 117% 77% 88% 68%
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
Phoenix-Zweig Trust 57
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG APPRECIATION FUND
<TABLE>
<CAPTION>
CLASS I
--------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.21 $16.43 $18.46 $16.04 $17.28
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.10(4) 0.17(4) 0.09 0.15 0.04
Net realized and unrealized gain (loss) 0.13 (0.52) (0.29) 3.71 1.02
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.23 (0.35) (0.20) 3.86 1.06
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.17) (0.09) (0.13) (0.04)
Dividends from net realized gains -- (3.70) (1.74) (1.31) (2.26)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (3.87) (1.83) (1.44) (2.30)
------ ------ ------ ------ ------
Change in net asset value 0.23 (4.22) (2.03) 2.42 (1.24)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.44 $12.21 $16.43 $18.46 $16.04
====== ====== ====== ====== ======
Total return(1) 1.88%(3) (1.45)% (0.67)% 24.17% 6.30%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,775 $1,903 $2,760 $2,735 $2,202
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.48%(2) 1.27% 1.22% 1.22% 1.32%(2)
Net investment income (loss) 1.60%(2) 1.14% 0.64% 0.91% 1.33%(2)
Portfolio turnover rate 121%(3) 92% 117% 77% 88%
-------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
58 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG FOREIGN EQUITY FUND
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED INCEPTION
6/30/00 DECEMBER 31, 11/24/97 TO
(UNAUDITED) 1999 1998 12/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.30 $12.39 $11.45 $11.34
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS(7)
Net investment income (0.04)(4) --(6) 0.08(8) 0.01(8)
Net realized and unrealized gain (0.18) 2.81 0.96 0.11
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.22) 2.81 1.04 0.12
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.06) (0.10) (0.01)
Dividends from net realized gains -- (0.84) -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (0.90) (0.10) (0.01)
------ ------ ------ ------
Change in net asset value (0.22) 1.91 0.94 0.11
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.18 $14.30 $12.39 $11.45
====== ====== ====== ======
Total return(1) (1.54)%(3) 22.98% 9.08% 1.09%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,156 $1,436 $2,122 $414
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 3.86%(2) 2.66% 1.80% 1.80%(2)
Net investment income (0.62)%(2) --% 1.14%(8) 1.20%(2)(8)
Portfolio turnover rate 2%(3) 42% 40% 64%(2)
</TABLE>
PHOENIX-ZWEIG FOREIGN EQUITY FUND
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED INCEPTION
6/30/00 DECEMBER 31, 11/24/97 TO
(UNAUDITED) 1999 1998 12/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.20 $12.35 $11.45 $11.34
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS(7)
Net investment income (0.09)(6) (0.12)(6) 0.04(8) 0.01(8)
Net realized and unrealized gain (0.17) 2.81 0.92 0.11
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.26) 2.69 0.96 0.12
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- (0.06) (0.01)
Dividends from net realized gains -- (0.84) -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (0.84) (0.06) (0.01)
------ ------ ------ ------
Change in net asset value (0.26) 1.85 0.90 0.11
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.94 $14.20 $12.35 $11.45
====== ====== ====== ======
Total return(1) (1.90)%(3) 22.06% 8.36% 1.03%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,955 $1,773 $1,873 $713
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 4.54%(2) 3.44% 2.50% 2.50%(2)
Net investment income (1.25)%(2) (0.90) 0.44%(8) 0.50%(2)(8)
Portfolio turnover rate 2%(3) 42% 40% 64%(2)
</TABLE>
---------------------------
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.16%, 4.00%
and 5.15% for the periods ended December 31, 1999, 1998 and 1997, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.89%, 4.70%
and 5.85% for the periods ended December 31, 1999, 1998 and 1997, respectively.
(6) Computed using average shares outstanding.
(7) 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.
(8) Includes realized gains and losses on foreign currency transactions.
Phoenix-Zweig Trust 59
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG FOREIGN EQUITY FUND
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED INCEPTION
6/30/00 DECEMBER 31, 11/24/97 TO
(UNAUDITED) 1999 1998 12/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.15 $12.33 $11.45 $11.34
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS(6)
Net investment income (0.09)(5) (0.12)(5) 0.05(7) 0.01(7)
Net realized and unrealized gain (0.17) 2.78 0.90 0.11
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.26) 2.66 0.95 0.12
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- (0.07) (0.01)
Dividends from net realized gains -- (0.84) -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- (0.84) (0.07) (0.01)
------ ------ ------ ------
Change in net asset value (0.26) 1.82 0.88 0.11
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.89 $14.15 $12.33 $11.45
====== ====== ====== ======
Total return(1) (1.84)%(3) 21.85% 8.27% 1.03%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,084 $3,727 $3,384 $1,177
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 4.55%(2) 3.46% 2.50% 2.50%(2)
Net investment income (1.34)%(2) (0.94)% 0.44%(7) .50%(2)(7)
Portfolio turnover rate 2%(3) 42% 40% 64%(2)
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.89%, 4.70%
and 5.85% for the periods ended December 31, 1999, 1998 and 1997, respectively.
(5) Computed using average shares outstanding.
(6) 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.
(7) Includes realized gains and losses on foreign currency transactions.
60 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GOVERNMENT CASH FUND
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.04 0.05 0.05 0.05 0.05
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
----- ----- ----- ----- ----- -----
Change in net asset value -- -- -- -- -- --
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total return 2.65%(3) 4.52% 4.91% 4.97% 4.83% 5.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,705 $6,110 $8,290 $2,472 $3,360 $3,661
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.65%(2) 0.65% 0.65% 0.65% 0.65% 0.87%
Net investment income 5.46%(2) 4.41% 4.75% 4.85% 4.73% 4.97%
</TABLE>
PHOENIX-ZWEIG GOVERNMENT CASH FUND
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04 0.04 0.04 0.03
---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.02 0.04 0.04 0.04 0.03
---- ---- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) (0.04) (0.04) (0.04) (0.03)
----- ----- ----- ----- -----
Change in net asset value -- -- -- -- --
---- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total return(1) 2.30%(3) 3.80% 4.18% 4.24% 3.03%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,248 $4,650 $1,738 $336 $33
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 1.35%(2) 1.35% 1.35% 1.35% 1.35%(2)
Net investment income 4.69%(2) 3.80% 3.97% 4.24% 4.03%(2)
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.09%, 1.30%,
1.74%, 1.31% and 1.34% for the periods ended December 31, 1999, 1998, 1997, 1996
and 1995, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.51%, 3.70%,
7.49% and 1.95% for the periods ended December 31, 1999, 1998, 1997 and 1996,
respectively.
Phoenix-Zweig Trust 61
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GOVERNMENT CASH FUND
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT FROM OPERATIONS 0.03 0.04 0.05 0.05 0.05 0.05
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
----- ----- ----- ----- ----- -----
Change in net asset value -- -- -- -- -- --
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== =====
Total return(1) 2.65%(3) 4.52% 4.91% 4.97% 4.83% 5.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,562 $5,982 $6,624 $2,661 $4,535 $4,458
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.65%(2) 0.65% 0.65% 0.65% 0.65% 0.87%
Net investment income 5.37%(2) 4.43% 4.73% 4.85% 4.73% 4.97%
</TABLE>
PHOENIX-ZWEIG GOVERNMENT CASH FUND
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.01
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.05 0.05 0.05 0.01
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.01)
----- ----- ----- ----- -----
Change in net asset value -- -- -- -- --
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total return(1) 2.80%(3) 4.83% 5.23% 5.28% 0.80%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,415 $2,146 $2,884 $100 $1,401
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 0.35%(2) 0.35% 0.35% 0.35% 0.35%(2)
Net investment income 5.74%(2) 4.73% 5.15% 5.15% 5.03%(2)
----------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.35%, 1.38%,
1.65%, 1.25% and 1.15% for the periods ended December 31, 1999, 1998, 1997, 1996
and 1995, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.67%, 1.47%,
0.82% and 0.73% for the periods ended December 31, 1999, 1998, 1997 and 1996,
respectively.
62 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GOVERNMENT FUND
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.72 $10.44 $10.09 $9.81 $10.39 $9.63
----- ------ ------ ----- ------ -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.25 0.46 0.53 0.52 0.53 0.52(1)
Net realized and unrealized gain
(loss) (0.04) (0.73) 0.35 0.28 (0.58) 0.77
TOTAL FROM INVESTMENT OPERATIONS 0.21 (0.27) 0.88 0.80 (0.05) 1.29
----- ------ ------ ----- ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.22) (0.45) (0.53) (0.52) (0.53) (0.53)
----- ------ ------ ----- ------ -----
Change in net asset value (0.01) (0.72) 0.35 0.28 (0.58) 0.76
----- ------ ------ ----- ------ -----
NET ASSET VALUE, END OF PERIOD $9.71 $9.72 $10.44 $10.09 $9.81 $10.39
===== ===== ====== ====== ===== ======
Total return(2) 2.21%(4) (2.58)% 8.91% 8.42% (0.42)% 13.84%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $19,636 $21,922 $29,767 $28,062 $33,848 $42,207
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.67%(3) 1.35% 1.32% 1.36% 1.14%(3) 1.26%
Net investment income 5.10%(3) 4.67% 5.09% 5.26% 5.25% 5.22%
Portfolio turnover rate 101%(4) 183% 48% 128% 170% 195%
</TABLE>
PHOENIX-ZWEIG GOVERNMENT FUND
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.78 $10.52 $10.15 $9.86 $9.76
----- ------ ------ ----- -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.21 0.39 0.44 0.46 0.29
Net realized and unrealized gain (0.03) (0.74) 0.37 0.26 0.11
----- ------ ------ ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.18 (0.35) 0.81 0.72 0.40
----- ------ ------ ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.19) (0.39) (0.44) (0.43) (0.30)
----- ------ ------ ----- -----
Change in net asset value (0.01) (0.74) 0.37 0.29 0.10
----- ------ ------ ----- -----
NET ASSET VALUE, END OF PERIOD $9.77 $9.78 $10.52 $10.15 $9.86
===== ===== ====== ====== =====
Total return(1) 1.88%(4) (3.23)% 8.20% 7.55% 4.16%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $1,733 $1,657 $2,199 $1,215 $513
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.37%(3) 2.06% 2.02% 2.06% 1.84%(2)(3)
Net investment income 4.39%(3) 3.97% 4.39% 4.56% 4.55%(3)
Portfolio turnover rate 101%(4) 183% 48% 128% 170%
------------------------------
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in the total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.36% for the
period ended December 31, 1996.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.10% for the
period ended December 31, 1996.
Phoenix-Zweig Trust 63
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GOVERNMENT FUND
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.69 $10.42 $10.08 $9.81 $10.38 $9.62
----- ------ ------ ----- ------ -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.23 0.42 0.47 0.48 0.49 0.48(1)
Net realized and unrealized gain (loss) (0.03) (0.74) 0.36 0.27 (0.58) 0.76
----- ------ ------ ----- ------ -----
TOTAL FROM INVESTMENT OPERATIONS 0.20 (0.32) 0.83 0.75 (0.09) 1.24
----- ------ ------ ----- ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.20) (0.41) (0.49) (0.48) (0.48) (0.48)
----- ------ ------ ----- ------ -----
Change in net asset value -- (0.73) 0.34 0.27 (0.57) 0.76
----- ------ ------ ----- ------ -----
NET ASSET VALUE, END OF PERIOD $9.69 $9.69 $10.42 $10.08 $9.81 $10.38
===== ===== ====== ====== ===== ======
Total return(2) (2.07)(4) (3.09)% 8.46% 7.86% (0.82)% 13.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $5,453 $7,068 $11,859 $10,199 $14,330 $19,778
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.11%(3) 1.80% 1.77% 1.81% 1.59%(5) 1.71%
Net investment income 4.64%(3) 4.22% 4.64% 4.81% 4.80% 4.77%
Portfolio turnover rate 101%(4) 183% 48% 128% 170% 195%
</TABLE>
PHOENIX-ZWEIG GOVERNMENT FUND
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED INCEPTION
6/30/00 DECEMBER 31, 7/14/97 TO
(UNAUDITED) 1999 1998 12/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $9.74 $10.48 $10.11 $9.88
----- ------ ------ -----
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26 0.49 0.55 0.26
Net realized and unrealized gain (0.03) (0.74) 0.37 0.23
----- ------ ------ -----
TOTAL FROM INVESTMENT OPERATIONS 0.23 (0.25) 0.92 0.49
----- ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.24) (0.49) (0.55) (0.26)
Change in net asset value (0.01) (0.74) 0.37 0.23
----- ------ ------ -----
NET ASSET VALUE, END OF PERIOD $9.73 $9.74 $10.48 $10.11
===== ===== ====== ======
Total return(1) 2.39%(4) (2.31)% 9.33% 5.01%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $3,410 $3,330 $3,088 $1,050
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.38%(3) 1.06% 1.02% 1.06%(3)
Net investment income 5.40%(3) 4.98% 5.39% 5.56%(3)
Portfolio turnover rate 101%(4) 183% 48% 128%
------------------------------
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charge is not reflected in the total return calculation.
(3) Annualized.
(4) Not annualized.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.81% for the
period ended December 31, 1996.
64 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GROWTH & INCOME FUND
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/26/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.13 $13.40 $13.73 $11.37 $11.34
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.08 0.17(6) 0.11 0.24 0.01
Net realized and unrealized gain 0.98 (0.08) (0.33) 2.36 0.03
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.06 0.09 (0.22) 2.60 0.04
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.05) (0.21) (0.11) (0.24) (0.01)
------ ------ ------ ------ ------
Dividends from net realized gains -- (1.15) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.05) (1.36) (0.11) (0.24) (0.01)
Change in net asset value 1.01 (1.27) (0.33) 2.36 0.03
==== ===== ===== ==== ====
NET ASSET VALUE, END OF PERIOD $13.14 $12.13 $13.40 $13.73 $11.37
Total return(1) 8.77%(3) 1.09% (1.61)% 23.12% 0.39%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,572 $3,393 $8,172 $6,836 $2,508
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.16%(2) 1.80% 1.56%(4) 1.30%(4) 1.30%(2)(3)
Net investment income 1.09%(2) 1.28% 0.82% 2.26% 1.47%(2)
Portfolio turnover rate 145%(3) 193% 152% 120% 2%
</TABLE>
PHOENIX-ZWEIG GROWTH & INCOME FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/26/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.14 $13.39 $13.73 $11.37 $11.34
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.08(6) 0.02 0.16 0.01
Net realized and unrealized gain 1.00 (0.08) (0.34) 2.36 0.03
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.02 0.00 (0.32) 2.52 0.04
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) (0.10) (0.02) (0.16) (0.01)
Dividends from net realized gains -- (1.15) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.02) (1.25) (0.02) (0.16) (0.01)
------ ------ ------ ------ ------
Change in net asset value 1.00 (1.25) (0.34) 2.36 0.03
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.14 $12.14 $13.39 $13.73 $11.37
====== ====== ====== ====== ======
Total return(1) 8.40%(3) 0.42% (2.33)% 22.29% 0.33%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $8,543 $9,684 $16,416 $11,920 $2,693
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.89%(2) 2.51% 2.26%(5) 2.00%(5) 2.00%(2)(5)
Net investment income 0.37%(2) 0.64% 0.12% 1.56% 0.77%(2)
Portfolio turnover rate 145%(3) 193% 152% 120% 2%
-------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.61%, 2.00%
and 3.37% for the periods ended December 31, 1998, 1997 and 1996, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.31%, 2.70%
and 4.07% for the periods ended December 31, 1998, 1997 and 1996, respectively.
(6) Computed using average shares outstanding.
Phoenix-Zweig Trust 65
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG GROWTH & INCOME FUND
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/26/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.15 $13.37 $13.71 $11.38 $11.34
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.08(6) 0.02 0.17 0.01
Net realized and unrealized gain 1.00 (0.07) (0.34) 2.33 0.04
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.03 0.01 (0.32) 2.50 0.05
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) (0.08) (0.02) (0.17) (0.01)
Dividends from net realized gains -- (1.15) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.02) (1.23) (0.34) 2.33 0.04
Change in net asset value 1.01 (1.22) (0.34) 2.33 0.04
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.16 $12.15 $13.37 $13.71 $11.38
====== ====== ====== ====== ======
Total return(1) 8.36%(3) 0.45% (2.34)% 22.15% 0.42%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,500 $5,507 $14,364 $13,525 $4,509
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.87%(2) 2.50% 2.26%(4) 2.00%(4) 2.00%(2)(4)
Net investment income 0.38%(2) 0.60% 0.12% 1.56% 0.77%(2)
Portfolio turnover rate 145%(3) 193% 152% 120% 2%
</TABLE>
PHOENIX-ZWEIG GROWTH & INCOME FUND
<TABLE>
<CAPTION>
CLASS I
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/26/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.18 $13.44 $13.77 $11.37 $11.34
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.09 0.23(6) 0.15 0.24 0.02
Net realized and unrealized gain 0.99 (0.09) (0.33) 2.40 0.03
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.08 0.14 (0.18) 2.64 0.05
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.07) (0.25) (0.15) (0.24) (0.02)
Dividends from net realized gains -- (1.15) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTION (0.07) (1.40) (0.15) (0.24) (0.02)
------ ------ ------ ------ ------
Change in net asset value 1.01 (1.26) (0.33) 2.40 0.03
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.19 $12.18 $13.44 $13.77 $11.37
====== ====== ====== ====== ======
Total return(1) 8.87%(3) 1.46% (1.31)% 23.42% 0.41%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,938 $1,848 $1,664 $1,686 $101
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.90%(2) 1.54% 1.26%(5) 1.00%(5) 1.00%(2)(5)
Net investment income 1.36%(2) 1.72% 1.12% 2.56% 1.77%(2)
Portfolio turnover rate 145%(3) 193% 152% 120% 2%
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.31%, 2.70%
and 4.07% for the period ended December 31, 1998, 1997 and 1996, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.31%, 1.70%
and 3.07% for the period ended December 31, 1998, 1997 and 1996, respectively.
(6) Computed using average shares outstanding.
66 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG MANAGED ASSETS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.04 $14.18 $12.72 $12.75 $12.48 $11.76
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.19(4) 0.31(4) 0.38 0.13 0.35 0.47
Net realized and unrealized gain (loss) (0.10) 0.91 1.50 1.83 0.86 1.40
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.09 1.22 1.88 1.96 1.21 1.87
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.14) (0.25) (0.38) -- (0.45) (0.75)
Dividends from net realized gains -- (1.11) (0.04) (1.99) (0.49) (0.40)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.14) (1.36) (0.42) (1.99) (0.94) (1.15)
------ ------ ------ ------ ------ ------
Change in net asset value (0.05) (0.14) 1.46 (0.03) 0.27 0.72
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.99 $14.04 $14.18 $12.72 $12.75 $12.48
====== ====== ====== ====== ====== ======
Total return(1) 0.67%(3) 8.81% 14.87% 15.47% 9.80% 16.26%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $87,620 $103,267 $122,085 $110,908 $114,837 $141,110
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.53%(2) 1.51% 1.51% 1.59% 1.64% 1.59%
Net investment income 2.83%(2) 2.13% 2.77%(5) 2.40%(5) 2.64%(5) 3.69%(5)
Portfolio turnover rate 56%(3) 50% 62% 168% 187% 239%
</TABLE>
PHOENIX-ZWEIG MANAGED ASSETS
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.15 $14.28 $12.79 $12.90 $12.43
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.15(4) 0.21(4) 0.26 0.04 0.13
Net realized and unrealized gain (loss) (0.11) 0.91 1.53 1.84 1.00
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.04 1.12 1.79 1.88 1.13
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.14) (0.26) -- (0.17)
Dividends from net realized gains -- (1.11) (0.04) (1.99) (0.49)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.11) (1.25) (0.30) (1.99) (0.66)
------ ------ ------ ------ ------
Change in net asset value (0.07) (0.13) 1.49 (0.11) 0.47
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.08 $14.15 $14.28 $12.79 $12.90
====== ====== ====== ====== ======
Total return(1) 0.26%(3) 8.03% 14.06% 14.67% 9.11%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $35,078 $39,910 $33,172 $18,117 $6,339
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.23%(2) 2.21% 2.21% 2.29% 2.34%(2)
Net investment income (loss) 2.13%(2) 1.44% 2.07%(5) 1.70%(5) 1.94%(2)(5)
Portfolio turnover rate 56%(3) 50% 62% 168% 187%
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes realized gains and losses on foreign currency transactions.
Phoenix-Zweig Trust 67
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG MANAGED ASSETS
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.92 $14.07 $12.63 $12.76 $12.49 $11.73
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.15(4) 0.21(4) 0.29 0.04 0.27 0.38(5)
Net realized and unrealized gain
(loss) (0.10) 0.89 1.48 1.82 0.85 1.40
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.05 1.10 1.77 1.86 1.12 1.78
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.14) (0.29) -- (0.36) (0.62)
Dividends from net realized gains -- (1.11) (0.04) (1.99) (0.49) (0.40)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.11) (1.25) (0.33) (1.99) (0.85) (1.02)
------ ------ ------ ------ ------ ------
Change in net asset value (0.06) (0.15) 1.44 (0.13) 0.27 0.76
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.86 $13.92 $14.07 $12.63 $12.76 $12.49
====== ====== ====== ====== ====== ======
Total return 0.34%(3) 8.01% 14.03% 14.67% 9.03% 15.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $317,921 $379,445 $429,655 $407,625 $426,194 $527,432
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.23%(2) 2.21% 2.21% 2.29% 2.34% 2.29%
Net investment income 2.13%(2) 1.43% 2.07%(5) 1.70%(5) 1.94%(5) 2.99%(5)
Portfolio turnover rate 56%(3) 50% 62% 168% 187% 239%
</TABLE>
PHOENIX-ZWEIG MANAGED ASSETS
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.18 $14.31 $13.05 $12.99 $13.02
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.23(4) 0.36(4) 0.56 0.09 0.05(5)
Net realized and unrealized gain
(loss) (0.11) 0.91 1.41 1.96 0.45
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.12 1.27 1.97 2.05 0.50
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.16) (0.29) (0.67) -- (0.04)
Dividends from net realized gains -- (1.11) (0.04) (1.99) (0.49)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.16) (1.40) (0.71) (1.99) (0.53)
------ ------ ------ ------ ------
Change in net asset value (0.04) (0.13) 1.26 0.06 (0.03)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.14 $14.18 $14.31 $13.05 $12.99
====== ====== ====== ====== ======
Total return(1) 0.85%(3) 9.08% 15.16% 15.88% 3.83%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,862 $2,214 $1,848 $2,645 $2,893
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.23%(2) 1.21% 1.21% 1.29% 1.34%(2)
Net investment income (loss) 3.18%(2) 2.43% 3.07%(5) 2.70%(5) 2.94%(2)(5)
Portfolio turnover rate 56%(3) 50% 62% 168% 187%
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes realized gains and losses on foreign currency transactions.
68 Phoenix-Zweig Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG STRATEGY FUND
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.24 $14.80 $15.77 $15.01 $14.51 $12.36
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.10(4) 0.22(4) 0.17 0.20 0.20 0.27
Net realized and unrealized gain
(loss) (0.17) 0.07 (0.48) 2.49 1.68 2.80
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.07) 0.29 (0.31) 2.69 1.88 3.07
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.14) (0.28) (0.18) (0.19) (0.20) (0.37)
Dividends from net realized gains (0.06) (3.57) (0.48) (1.74) (1.18) (0.55)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.20) (3.85) (0.66) (1.93) (1.38) (0.92)
------ ------ ------ ------ ------ ------
Change in net asset value (0.27) (3.56) (0.97) 0.76 0.50 2.15
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.97 $11.24 $14.80 $15.77 $15.01 $14.51
====== ====== ====== ====== ====== ======
Total return(1) (0.79)%(3) 2.63% (1.88)% 18.07% 13.00% 25.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $162,122 $223,269 $409,065 $565,721 $581,149 $558,286
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.42%(2) 1.28% 1.24% 1.24% 1.28% 1.27%
Net investment income 1.89%(2) 1.54% 0.97% 1.20% 1.27% 1.92%
Portfolio turnover rate 105%(3) 141% 116% 126% 181% 95%
</TABLE>
PHOENIX-ZWEIG STRATEGY FUND
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.34 $14.90 $15.86 $15.07 $15.12
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.07(4) 0.12(4) 0.05 0.07 0.06
Net realized and unrealized gain (loss) (0.19) 0.07 (0.48) 2.53 1.13
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.12) 0.19 (0.43) 2.60 1.19
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.10) (0.18) (0.05) (0.07) (0.06)
Dividends from net realized gains (0.06) (3.57) (0.48) (1.74) (1.18)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.16) (3.75) (0.53) (1.81) (1.24)
------ ------ ------ ------ ------
Change in net asset value (0.28) (3.56) (0.96) 0.79 (0.05)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.06 $11.34 $14.90 $15.86 $15.07
====== ====== ====== ====== ======
Total return(1) (1.16)%(3) 1.91% (2.61)% 17.33% 7.88%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $33,207 $47,557 $82,531 $76,820 $42,317
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.11%(2) 1.98% 1.94% 1.94% 1.98%(2)
Net investment income (loss) 1.19%(2) 0.84% 0.27% 0.50% 0.57%(2)
Portfolio turnover rate 105%(3) 141% 116% 126% 181%
----------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
Phoenix-Zweig Trust 69
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ZWEIG STRATEGY FUND
<TABLE>
<CAPTION>
CLASS C
------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.31 $14.86 $15.81 $15.04 $14.56 $12.35
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.07(4) 0.12(4) 0.05 0.07 0.11 0.16
Net realized and unrealized gain (loss) (0.19) 0.07 (0.48) 2.52 1.66 2.82
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.12) 0.19 (0.43) 2.59 1.77 2.98
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.10) (0.17) (0.04) (0.08) (0.11) (0.22)
Dividends from net realized gains (0.06) (3.57) (0.48) (1.74) (1.18) (0.55)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.16) (3.74) (0.52) (1.82) (1.29) (0.77)
------ ------ ------ ------ ------ ------
Change in net asset value (0.28) (3.55) (0.95) 0.77 0.48 2.21
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.03 $11.31 $14.86 $15.81 $15.04 $14.56
====== ====== ====== ====== ====== ======
Total return(1) (1.17)%(3) 1.94% (2.64)% 17.30% 12.19% 24.26%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $122,633 $184,924 $423,791 $591,512 $621,334 $530,300
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.11%(2) 1.98% 1.94% 1.94% 1.98% 1.97%
Net investment income 1.19%(2) 0.81% 0.27% 0.50% 0.57% 1.22%
Portfolio turnover rate 105%(3) 141% 116% 126% 181% 95%
</TABLE>
PHOENIX-ZWEIG STRATEGY FUND
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
6/30/00 YEAR ENDED DECEMBER 31, 11/1/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.40 $14.94 $15.87 $15.07 $15.42
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.12(4) 0.28(4) 0.17 0.23 0.04
Net realized and unrealized gain (loss) (0.18) 0.06 (0.45) 2.54 0.83
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.06) 0.34 (0.28) 2.77 0.87
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.15) (0.31) (0.17) (0.23) (0.04)
Dividends from net realized gains (0.06) (3.57) (0.48) (1.74) (1.18)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.21) (3.88) (0.65) (1.97) (1.22)
------ ------ ------ ------ ------
Change in net asset value (0.27) (3.54) (0.93) 0.80 (0.35)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.13 $11.40 $14.94 $15.87 $15.07
====== ====== ====== ====== ======
Total return(1) (0.66)%(3) 2.96% (1.66)% 18.52% 5.68%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,572 $1,581 $1,407 $1,070 $903
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.13%(2) 0.96% 0.94% 0.94% 0.98%(2)
Net investment income (loss) 2.19%(2) 1.92% 1.27% 1.50% 1.57%(2)
Portfolio turnover rate 105%(3) 141% 116% 126% 181%
------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
70 Phoenix-Zweig Trust
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The Trust has filed a Statement of Additional Information, dated December 15,
2000, with the Securities and Exchange Commission. The Statement contains more
detailed information about the funds. It is incorporated into this prospectus by
reference and is legally part of the prospectus. You may obtain a free copy of
the Statement:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200, or
o by calling (800) 243-4361.
You may also obtain information about the Trust from the Securities and Exchange
Commission:
o through its internet site (http://www.sec.gov),
o by visiting its Public Reference Room in Washington, DC,
o by writing to its Public Reference Section, Washington, DC
20549-0102 (a fee may be charged), or
o by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The Trust semiannually mails to its shareholders detailed reports containing
information about the funds' investments. The Trust's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the funds' performance from January 1 through December
31. You may request a free copy of the Trust's Annual and Semiannual Reports:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200, or
o by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 2-93538 and 811-04116 [logo] Printed on recycled paper
using soybean ink
Phoenix-Zweig Trust 71
<PAGE>
[Version A]
PHOENIX-ZWEIG TRUST
PHOENIX-ZWEIG APPRECIATION FUND
PHOENIX-ZWEIG FOREIGN EQUITY FUND
PHOENIX-ZWEIG GOVERNMENT CASH FUND
PHOENIX-ZWEIG GOVERNMENT FUND
PHOENIX-ZWEIG GROWTH & INCOME FUND
PHOENIX-ZWEIG MANAGED ASSETS
PHOENIX-ZWEIG STRATEGY FUND
900 Third Avenue, 31st Floor
New York, New York 10022
STATEMENT OF ADDITIONAL INFORMATION
December 15, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix-Zweig Trust (the "Trust"), dated December 15, 2000, and should be read
in conjunction with it. The Trust's Prospectus may be obtained by calling (800)
243-1574 or by writing to Phoenix Equity Planning Corporation at 100 Bright
Meadow Boulevard, P.O. Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
The Trust ................................................................. 1
Investment Restrictions ................................................... 1
Investment Techniques & Risks ............................................. 2
Performance Information.................................................... 8
Performance Comparisons ................................................... 10
Portfolio Turnover ........................................................ 11
Portfolio Transactions and Brokerage....................................... 11
Services of the Advisers .................................................. 12
Net Asset Value ........................................................... 14
How to Buy Shares ......................................................... 15
Alternative Purchase Arrangements ......................................... 15
Investor Account Services ................................................. 18
How to Redeem Shares ...................................................... 20
Tax Sheltered Retirement Plans ............................................ 21
Dividends, Distributions and Taxes ........................................ 22
The Distributor ........................................................... 23
Distribution Plans......................................................... 25
Management of the Trust.................................................... 26
Additional Information .................................................... 32
Appendix................................................................... 33
Customer Service and Marketing: (800) 243-1574
Telephone Orders: (800) 243-1574
PXP1202 (12/00)
<PAGE>
THE TRUST
Phoenix-Zweig Trust (the "Trust") is a diversified, open-end management
investment company which was organized in 1984 as a Massachusetts business
trust, then reorganized as a Delaware business trust in 1996.
The Trust's Prospectus describes the investment objectives of the
Phoenix-Zweig Appreciation Fund (the "Appreciation Fund"), the Phoenix-Zweig
Foreign Equity Fund (the "Foreign Equity Fund"), the Phoenix-Zweig Government
Cash Fund (the "Government Cash Fund"), the Phoenix-Zweig Government Fund (the
"Government Fund"), the Phoenix-Zweig Growth & Income Fund (the "Growth & Income
Fund"), Phoenix-Zweig Managed Assets ("Managed Assets"), and the Phoenix-Zweig
Strategy Fund (the "Strategy Fund") (each, a "Fund" and, together, the "Funds"),
the seven Funds currently offered by the Trust, and summarizes the investment
policies and investment techniques each Fund will employ in seeking to achieve
its investment objective. The following discussion supplements the description
of the Funds' investment policies and investment techniques in the Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to the Fund. Except as otherwise stated, these investment restrictions
are "fundamental" policies. A "fundamental" policy is defined in the 1940 Act to
mean that the restriction cannot be changed without the vote of a "majority of
the outstanding voting securities" of the Fund. A majority of the outstanding
voting securities is defined in the 1940 Act as the lesser of (a) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities. However, these policies may
be modified by the Trustees, in their discretion, without shareholder approval,
to the extent necessary to facilitate the implementation of a master-feeder
structure for any or all of the Funds (i.e., a structure under which a
particular Fund acts as a feeder and invests all of its assets in a single
pooled master fund with substantially the same investment objectives and
policies).
The Fund may not:
(1) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would, at the
time, cause more than 5% of the Fund's total assets taken at market value to be
invested in the securities of such issuer; or (b) such purchase would, at the
time, result in more than 10% of the outstanding voting securities of such
issuer being held by the Fund.
(2) Purchase securities if, after giving effect to the purchase, more
than 25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government or its agencies or instrumentalities), except
that the Government Cash Fund may invest more than 25% of its assets in
instruments issued by domestic banks.
(3) Borrow money, except (i) in amounts not to exceed one-third of the
value of the Fund's total assets (including the amount borrowed) from banks, and
(ii) up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act.
Activities permitted by SEC exemptive orders or staff interpretations shall not
be deemed to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the
extent that, in connection with the disposition of portfolio securities, the
Fund may be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the
Fund may purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied to the
value of a financial index or a financial instrument or other asset (including,
but not limited to, securities indexes, interest rates, securities, currencies
and physical commodities).
(8) Make loans, except that the Fund may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv)
participate in an interfund lending program with other registered investment
companies.
1
<PAGE>
If any percentage restriction described above for the Fund is adhered
to at the time of investment, a subsequent increase or decrease in the
percentage resulting from a change in the value of the Fund's assets will not
constitute a violation of the restriction.
INVESTMENT TECHNIQUES AND RISKS
The investment objective of each Fund, except Managed Assets, is deemed to be
a fundamental policy and may not be changed without the approval of the
shareholders of that Fund. Investment restrictions described in this Statement
of Additional Information are fundamental policies of the Trust and may not be
changed as to any Fund without the approval of such Fund's shareholders.
STRATEGY FUND, APPRECIATION FUND AND GROWTH & INCOME FUND
The portfolio manager of the Strategy, Appreciation and Growth & Income Funds
uses proprietary computer-driven models developed by Dr. Zweig and his
associates to choose stocks for those funds. The models evaluate and rank 3,000
stocks based primarily on earnings momentum, relative valuation, changes in
analysts' earnings estimates, earnings growth, price momentum, cash flow trend,
payout ratio trend and other market measurements. The stock selection models may
evolve or be replaced by other techniques intended to select stocks with the
potential for growth. We will notify shareholders of any material change to the
stock selection models.
MANAGED ASSETS
Each foreign country in which Managed Assets intends to invest has a currency
model, as well as stock and bond models similar to those used for determining
the domestic asset allocation strategy. The Subadviser will normally allocate
the Fund's assets within the following parameters: 0-60% in stocks, 0-60% in
bonds and 0-100% in short-term debt instruments. A neutral mix will consist of
35% stocks, 35% bonds and 30% cash equivalents. This will occur when the
research indicates that conditions do not favor one asset class over another.
The Fund may use futures, forward currency contracts and options to increase or
decrease its exposure to changing securities prices, interest rates or currency
exchange rates.
FOREIGN EQUITY FUND
The level of stocks and money market instruments, as well as the total level
of investment in any particular country, will vary over time depending on the
level of risk the Subadviser's models determine. As a model points to increasing
levels of market risk in a particular country, the Fund will reduce its exposure
to that country by selling stocks, by hedging market exposure with foreign stock
index futures or options or by selling short.
In selecting stocks, our models rank industry groups when available. From the
higher ranked industry groups, we select stocks by evaluating and ranking them
based on technical and fundamental factors. Additionally, we may invest in
investment vehicles or groups of foreign stocks that, in the aggregate, are
expected to perform similarly to a particular major foreign stock market index
or foreign stock industry group, and in investment companies that invest in the
securities of a particular country, commonly referred to as "Country Funds,"
that invest in the securities of a particular country.
The Subadviser's currency model for each country provides a disciplined
approach to managing currency risk. When the model indicates a strong likelihood
that the foreign currency is going to increase in value against the U.S. dollar,
the Fund will not hedge its exposure to the foreign currency. Otherwise, it will
hedge its entire position using currency exchange contracts. In those countries
where there is no mechanism to hedge against currency fluctuations, we will only
invest in such countries when our models are bullish on both the equity market
and the foreign currency. Some of the indicators in the currency model include
the relative trend of real and nominal short-term interest rates, the movement
of the trade-weighted foreign currency, and the momentum of the foreign currency
against the U.S. dollar.
GOVERNMENT FUND
The Government Fund seeks a high total return from current income and capital
appreciation consistent with preservation of capital over the long term by
investing primarily in U.S. Government and agency securities, including
Government National Mortgage Association ("GNMA") mortgage-backed certificates
and repurchase agreements collateralized by such securities. THE GOVERNMENT FUND
MAY NOT INVEST IN STOCKS.
Not all U.S. Government securities are backed by the full faith and credit of
the United States. Some are supported only by the credit of the agency or
instrumentality. Agencies and instrumentalities include: Bank for Cooperatives,
Export-Import Bank of the U.S., Farmers Home Administration, Federal Financing
Bank, Federal Home Loan Banks, Federal Home Loan Mortgage Corp., Federal Housing
Administration, Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association, Government National Mortgage Association (GNMA),
Resolution Funding Corp., Student Loan Marketing Association, Tennessee Valley
Authority and the U.S. Postal Service.
It is the Government Fund's policy that at least 65% of its total assets will
be invested in U.S. Government securities (including GNMA certificates), except
during times when the Subadviser believes that adoption of a temporary defensive
position is desirable. For temporary defensive purposes, the Fund may hold cash
or invest in money market instruments without limit.
2
<PAGE>
Investments for the Government Fund are chosen primarily by utilizing a model
that incorporates various indicators such as: momentum of bond prices,
short-term interest rate trends, inflation indicators, general economic and
liquidity indicators, and other market indicators and statistics.
The Fund may write covered call options and secured put options, and purchase
put options on U.S. Government securities which are traded on an exchange or
over-the-counter. The Fund also may purchase and sell interest rate futures
contracts and purchase and write put and call options on such futures contracts
as a means of hedging against changes in interest rates.
GOVERNMENT CASH FUND
The Government Cash Fund may invest in U.S. Treasury issues, such as bills,
certificates of indebtedness, notes and bonds, and issues of U.S. Government
agencies and instrumentalities which are established under the authority of an
act of Congress, such as the Bank for Cooperatives, Export-Import Bank of the
U.S., Farmers Home Administration, Federal Financing Bank, Federal Home Loan
Banks, Federal Home Loan Mortgage Corp., Federal Housing Administration, Federal
Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association, Government National Mortgage Association (GNMA), Resolution Funding
Corp., Student Loan Marketing Association, Tennessee Valley Authority and the
U.S. Postal Service. Some of these securities, such as Federal Housing
Administration debenture obligations, are supported by the full faith and credit
of the U.S. Treasury; others, such as obligations of Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury;
others, such as those of the Federal National Mortgage Association, are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations; and still others, such as those of the Student Loan
Marketing Association, are supported only by the credit of the instrumentality.
The Fund will not invest in obligations of the International Bank for
Reconstruction and Development (the World Bank), the Asian Development Bank, or
the Inter-American Development Bank, or in FHA or VA pooled mortgages.
FOREIGN SECURITIES
A Fund may invest in securities of foreign issuers, including equities and
non-U.S. dollar-denominated money market securities, and sponsored and
unsponsored ADRs, ADSs, EDRs, EDSs, GDRs, and GDSs. Shareholders should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations which are in addition to the usual
risks inherent in domestic investments.
Although the Trust intends to invest only in nations that the Manager
considers to have relatively stable and friendly governments, there is the
possibility of expropriation, nationalization, repatriation or confiscatory
taxation, taxation of income earned in a foreign country and other foreign
taxes, foreign exchange controls (which may include suspension of the ability to
transfer currency from a given country), default in foreign government
securities, political or social instability or diplomatic developments which
could affect investments in securities of issuers in those nations. In addition,
in many countries there is less publicly available information about issuers
than is available for U.S. companies. For example, ownership of unsponsored ADRs
may not entitle the owner to financial or other reports from the issuer to which
it might otherwise be entitled as the owner of a sponsored ADR. Moreover,
foreign companies are not generally subject to uniform accounting, auditing and
financial reporting standards, and auditing practices and requirements may not
be comparable to those applicable to U.S. companies. In many foreign countries,
there is less government supervision and regulation of business and industry
practices, stock exchanges, brokers and listed companies than in the United
States. Foreign securities transactions may also be subject to higher brokerage
costs than domestic securities transactions. The foreign securities markets of
many of the countries in which the Fund may invest may also be smaller, less
liquid and subject to greater price volatility than those in the United States.
In addition, the Fund may encounter difficulties or be unable to pursue legal
remedies and obtain judgment in foreign courts.
Foreign stock markets have different clearance and settlement procedures and
in certain markets there have been times when settlements have been unable to
keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Delays in settlement could result in temporary
periods when assets of the Fund are uninvested and no return is earned thereon.
The inability of the Fund to make intended security purchases due to settlement
problems could cause the Fund to miss attractive investment opportunities.
Further, the inability to dispose of portfolio securities due to settlement
problems could result either in losses because of subsequent declines in the
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, in possible liability to the purchaser. Fixed commissions on
some foreign securities exchanges are generally higher than negotiated
commissions on U.S. exchanges, although the Manager will endeavor to achieve the
most favorable net results on the Fund's portfolio transactions. It may be more
difficult for the Fund's agents to keep currently informed about corporate
actions such as stock dividends or other matters that may affect the prices of
portfolio securities. Communications between the United States and foreign
countries may be less reliable than within the United States, thus increasing
the risk of delayed settlements of portfolio transactions or loss of
certificates for portfolio securities. Moreover, individual foreign economies
may differ favorably or unfavorably from the United States economy in such
respects as growth of gross domestic product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position. The
Manager seeks to mitigate the risks to the Fund associated with the foregoing
considerations through diversification and continuous professional management.
3
<PAGE>
Brokerage commissions, custodial services, and other costs relating to
investment in foreign countries are generally more expensive than in the United
States. Clearance and settlement procedures on foreign markets are different and
problems with settling security transactions could result in temporary periods
when assets of the fund are uninvested and no return is earned on such amounts.
Depository receipts are typically issued by foreign banks or trust companies,
although they may also be issued by U.S. banks or trust companies, and evidence
ownership of underlying securities issued by either a foreign or a U.S.
corporation. Depository receipts may be issued pursuant to a sponsored program,
where an issuer has made arrangements to have its securities traded in the form
of depository receipts, or in unsponsored programs, where the issuer may not be
directly involved in the creation of the program. Depository receipts may not
necessarily be denominated in the same currency as the underlying securities
into which they may be converted. In addition, the issuers of the securities
underlying unsponsored depository receipts are not obligated to disclose
material information in the U.S. and, therefore, there may be less information
available regarding such issuers and there may not be a correlation between such
information and the market value of the depository receipts. Depository receipts
also involve the risks of other investments in foreign stocks, as discussed
above.
FUTURES CONTRACTS (ALL FUNDS EXCEPT THE GOVERNMENT CASH FUND)
Upon entering into a futures contract, a Fund will initially be required to
deposit with the custodian an amount of initial margin using cash or U.S.
Treasury bills equal to approximately 1 1/2% of the contract amount. The nature
of initial margin in futures transactions is different from that of margin in
securities transactions in that futures contract's initial margin does not
involve the borrowing of funds by customers to finance the transactions. Rather,
the initial margin is in the nature of a performance bond or good faith deposit
on the contract which is returned to the Fund upon termination of the futures
contract, assuming all contractual obligations have been satisfied. In addition
to initial margin, the Fund is required to deposit cash, liquid debt
obligations, liquid equity securities or cash equivalents in an amount equal to
the notional value of all long futures contracts, less the initial margin
amount, in a segregated account with the custodian to ensure that the use of
such futures contracts is not leveraged. If the value of the securities placed
in the segregated account declines, additional securities, cash or cash
equivalents must be placed in the segregated account so that the value of the
account will at least equal the amount of the Fund's commitments with respect to
such futures contracts.
Subsequent payments, called maintenance margin, to and from the broker, will
be made on a daily basis as the price of the underlying security fluctuates,
making the long and short positions in the futures contract more or less
valuable, a process known as "marking to market." For example, when the Fund has
purchased a futures contract and the price of the underlying security has risen,
that position will have increased in value and the Fund will receive from the
broker a maintenance margin payment equal to that increase in value. Conversely,
when the Fund has purchased a futures contract and the price of the underlying
security has declined, the position would be less valuable and the Fund would be
required to make a maintenance margin payment to the broker. At any time prior
to expiration of the futures contract, the Fund may elect to close the position
by taking an opposite position which will operate to terminate the Fund's
position in the futures contract. A final determination of maintenance margin is
then made, additional cash is required to be paid by or released to the Fund,
and the Fund realizes a loss or a gain.
While futures contracts based on securities do provide for the delivery and
acceptance of securities, such deliveries and acceptances are very seldom made.
Generally, the futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale is effected
by the Fund entering into a futures contract purchase for the same aggregate
amount of the specific type of financial instrument with the same delivery date.
If the price in the sale exceeds the price in the offsetting purchase, the Fund
immediately is paid the difference and thus realizes a gain. If the offsetting
purchase price exceeds the sale price, the Fund pays the difference and realizes
a loss. Similarly, the closing out of a futures contract purchase is effected by
the Fund entering into a futures contract sale. If the offsetting sale price
exceeds the purchase price, the Fund realizes a gain, and if the purchase price
exceeds the offsetting price, the Fund realizes a loss.
There are several risks in connection with the use of futures contracts as a
hedging device. One risk arises due to the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the subject of the hedge. The price of the futures contract may move more than
or less than the price of the securities or currency being hedged.
If the price of the futures contracts moves less than the price of the
securities or currency hedged, the hedge will not be fully effective, but, if
the price of the securities or currency being hedged has moved in an unfavorable
direction, the Fund would be in a better position than if it had not hedged at
all. If the price of the securities or currency being hedged has moved in a
favorable direction, this advantage will be partially offset by the movement in
the price of the futures contract. If the price of the futures contract moves
more than the price of the security or currency, the Fund will experience either
a loss or gain on the futures which will not be completely offset by movements
in the prices of the securities or currency which is the subject of the hedge.
To compensate for the imperfect correlation of such movements in price, the
Fund may buy or sell futures contracts in a greater dollar amount than the
dollar amount of the securities or currency being hedged if the historical
volatility of the prices of such securities or currency has been greater than
the historical volatility of the futures contracts. Conversely, the Fund may buy
or sell
4
<PAGE>
fewer futures contracts if the historical volatility of the price of the
securities or currency being hedged is less than the historical volatility of
the futures contracts.
It is also possible that, where a Fund has sold futures to hedge its
portfolio against a decline in the market, the market may advance and the value
of securities held in the Fund's portfolio may decline. If this occurred, the
Fund would lose money on the futures contracts and also experience a decline in
value in its portfolio securities. However, while this could occur for a very
brief period or to a very small degree, over time, the value of a diversified
portfolio will tend to move in the same direction as the futures contracts.
Where futures are purchased to hedge against a possible increase in the cost
of securities before a Fund is able to invest its cash (or cash equivalents) in
an orderly fashion, it is possible that the market may decline instead; if the
Fund then concludes not to invest in the relevant securities at that time
because of concern as to possible further market decline or for other reasons,
the Fund will realize a loss on the futures contract that is not offset by a
reduction in the price of securities purchased.
Another risk arises because the market prices of futures contracts may be
affected by certain factors. First, all participants in the futures market are
subject to initial margin and maintenance margin requirements. Rather than
meeting maintenance margin requirements, investors may close futures contracts
through offsetting transactions which could distort the normal relationship
between the debt securities and futures markets. Second, from the point of view
of speculators, the margin requirements in the futures market are less onerous
than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market may also cause temporary
price distortions.
Due to the possibility of price distortion in the futures market and because
of the imperfect correlation between movements in securities and movements in
the prices of futures contracts, a correct forecast of interest rate trends by
the Manager may still not result in a successful hedging transaction over a very
short period of time.
The hours of trading for futures contracts may not conform to the hours
during which the underlying securities are traded. To the extent that the
futures contracts markets close after the markets for the underlying securities,
significant price movements can take place in the futures contracts markets that
cannot be reflected in the markets of the underlying securities.
Positions in futures contracts may be closed out only on an exchange or board
of trade which provides a secondary market for such futures. Although the Trust
intends to purchase or sell futures only on exchanges or boards of trade where
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. In such event, it may not be
possible to close a futures position and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
maintenance margin. However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the futures
contracts can be terminated. In such circumstances, an increase in the price of
the securities, if any, may partially or completely offset losses on the futures
contract. However, as described above, there is no guarantee that the price of
the securities will, in fact, correlate with the price movements in the futures
contract and thus provide an offset to losses on a futures contract.
Successful use of futures contracts by the Trust is also subject to the
Manager's ability to correctly predict movements in the direction of interest
rates and other factors affecting markets for securities. For example, if a Fund
has hedged against the possibility of an increase in interest rates which would
adversely affect securities held in its portfolio and prices of such securities
increase instead, the Fund will lose part or all of the benefit of the increased
value of its securities which it has hedged because it will have offsetting
losses in its futures positions. In addition, in such situations, if the Fund
has insufficient cash, it may have to sell securities to meet maintenance margin
requirements. Such sales of securities may be, but will not necessarily be, at
increased prices which reflect the rising market. The Fund may have to sell
securities at a time when it may be disadvantageous to do so.
FUTURES CONTRACTS ON GOVERNMENT SECURITIES
Currently futures contracts can be purchased and sold with respect to U.S.
Treasury bonds, U.S. Treasury notes and GNMA certificates on the Chicago Board
of Trade, and with respect to U.S. Treasury bills on the International Monetary
Market at the Chicago Mercantile Exchange.
INVESTMENT COMPANIES (ALL FUNDS EXCEPT THE GOVERNMENT CASH FUND)
Investments by the Trust in investment companies will be effected by
independent investment managers, and the Trust will have no control over the
investment management, custodial arrangements or operations of any investments
made by such investment managers. Some of the funds in which a Fund may invest
could also incur more risks than would be the case for direct investments. For
example, they may engage in investment practices that entail greater risks or
invest in companies whose securities and other investments are more volatile. In
addition, the funds in which a Fund of the Trust invests may or may not have the
same fundamental investment limitations as those of the Fund itself. While a
potential benefit of investing in closed-end investment companies would be to
realize value from a decrease in the discount from net asset value at which some
closed-end funds trade, there is also the potential that such discount could
grow, rather than decrease.
5
<PAGE>
By investing in investment companies indirectly through the Trust, a
shareholder of the investing Fund will bear not only a proportionate share of
the expenses of that Fund (including operating costs and investment advisory and
administrative fees) but also, indirectly, similar expenses of the investment
companies in which the Fund invests. A shareholder may also indirectly bear
expenses paid by investment companies in which the Fund invests related to the
distribution of such investment companies' shares. Some of the open-end
investment companies in which the Fund may invest may limit the ability of
shareholders (including a Fund of the Trust) to redeem their shares.
Closed-end investment companies frequently trade at a discount from net asset
value. Only if the discount is sufficiently large will the additional income
earned by a portfolio purchased at a discount offset the additional layer of
expense. If shares of another investment company are purchased at a discount
which subsequently declines, performance will be better than it would have been
had the underlying instruments been purchased directly. Our funds will invest in
another investment company only if the portfolio manager believes that the
fund's investment objective will be furthered by doing so. The Government Cash
Fund will not normally invest in any other investment companies.
The Government Cash Fund may not invest in securities of investment
companies, except as they may be acquired as part of a merger, consolidation or
acquisition of assets. The other Funds may not invest in investment companies
except by purchase in the open market involving only customary brokers'
commissions, in connection with a merger, consolidation, reorganization, or
acquisition of assets, or as otherwise permitted by applicable law. Current law
prohibits any Fund from (i) owning more than 3% of the voting securities of any
one investment company; (ii) investing more than 5% of its assets in the
securities of any one investment company; or (iii) investing more than 10% of
its assets in securities issued by investment companies. Any Fund is also
prohibited from owning more than 10% of the voting securities of a registered
closed-end investment company. If the investment securities of another
investment company were the only investment securities held by a Fund, these
restrictions would not apply to that Fund. All Funds may also invest in other
investment companies to facilitate the implementation of a master-feeder
structure.
OPTIONS (ALL FUNDS EXCEPT THE GOVERNMENT CASH FUND)
When a Fund writes an option, an amount equal to the premium received by the
Fund is recorded as an asset and as an offsetting liability. The amount of the
liability is "marked-to-market" daily to reflect the current market value of the
option, which is the last sale price on the principal exchange on which such
option is traded or, in the absence of a sale, the mean between the latest bid
and offering prices. If an option written by the Fund expires, or a Fund enters
into a closing purchase transaction, the Fund will realize a gain (or, in the
latter case, a loss, if the cost of a closing transaction exceeds the premium
received) and the liability related to such option will be extinguished.
The premium paid by a Fund for the purchase of a put option (its cost) is
recorded initially as an investment, the value of which is subsequently adjusted
to the current market value of the option. If the current market value of a put
option exceeds its premium, the excess represents unrealized appreciation;
conversely, if the premium exceeds the current market value, the excess
represents unrealized depreciation. The current market value of an option
purchased by a Fund equals the option's last sale price on the principal
exchange on which it is traded or, in the absence of a sale, the mean between
the latest bid and offering prices.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Fund generally
will purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time, and
for some options no secondary market on an exchange may exist. In such event, it
might not be possible to effect closing transactions in particular options, with
the result that the Fund would have to exercise its options in order to realize
any profit and would incur transaction costs on the sale of underlying
securities pursuant to the exercise of put options. If a Fund, as a covered call
option writer, is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the option
expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (a) there may be insufficient interest in trading certain
options; (b) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (c) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (d) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (e) the facilities of an exchange or
the Options Clearing Corporation (the "OCC") may not at all times be adequate to
handle current trading volume; or (f) one or more exchanges might, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the OCC as a result of trades on that exchange would continue to
be exercisable in accordance with their terms.
In addition, there is no assurance that higher-than-anticipated trading
activity or other unforeseen events might not, at times, render certain of the
facilities of the OCC inadequate, and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders.
6
<PAGE>
The amount of the premiums which a Fund may pay or receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option purchasing and writing activities.
In the event of a shortage of the underlying securities deliverable on
exercise of a listed option, the OCC has the authority to permit other,
generally comparable securities to be delivered in fulfillment of option
exercise obligations. If the OCC exercises its discretionary authority to allow
such other securities to be delivered, it may also adjust the exercise prices of
the affected options by setting different prices at which otherwise ineligible
securities may be delivered. As an alternative to permitting such substitute
deliveries, the OCC may impose special exercise settlement procedures.
OPTIONS ON FUTURES CONTRACTS
Currently, options can be purchased or sold with respect to futures contracts
on U.S. Treasury bonds on the Chicago Board of Trade.
The Fund is required to deposit initial margin and maintenance margin with
respect to put and call options on futures contracts written by it pursuant to
brokers' requirements similar to those applicable to interest rate futures
contracts described above. In addition, net option premiums are included as
initial margin deposits. As with options on debt securities, the writer of an
option on a futures contract may terminate his position by selling or purchasing
an option of the same series. The ability to establish and close out positions
on such options is subject to the existence of a liquid secondary market. The
Fund will not purchase options on futures contracts on any exchange unless and
until, in the Manager's opinion, the market for such options is sufficiently
liquid that the risks in connection with options on futures contracts are not
greater than the risks in connection with futures contracts.
Compared to the purchase or sale of futures contracts, the purchase of
options on futures contracts involves less potential risk to the Fund because
the maximum amount at risk is the premium paid for the options (plus transaction
costs). However, there may be circumstances when the use of an option on a
futures contract would result in a loss to the Fund when the use of a futures
contract would not, such as when there is no movement in the prices of debt
securities. Writing an option on a futures contract involves risks similar to
those arising in the sale of futures contracts, as described above.
In purchasing and selling futures contracts and in purchasing options on
futures contracts, the Fund will comply with rules and interpretations of the
Commodity Futures Trading Commission ("CFTC") under which it is exempted from
regulation as a commodity pool operator. The CFTC regulations which exempt the
Fund from regulation as a commodity pool operator require, among other things,
(i) that futures and related options be used solely for bona fide hedging
purposes, as defined in CFTC regulations or, alternatively, with respect to each
long futures or options position, the Fund will ensure that the underlying
commodity value of such contract does not exceed the sum of segregated cash or
money market instruments, margin deposits on such contracts, cash proceeds from
investments due in 30 days and accrued profits on such contracts held by the
commodity broker, and (ii) that the Fund not enter into futures and related
options for which the aggregate initial margin and premiums exceed 5% of the
fair market value of the Fund's total assets. There is no other limitation on
the percentage of the Fund's assets that may be invested in futures and related
options. The Internal Revenue Code's requirements for qualification as a
regulated investment company may limit the extent to which the Fund can engage
in futures transactions.
OPTIONS ON GOVERNMENT SECURITIES
ON TREASURY BONDS AND NOTES. Because the trading interest in Treasury bonds and
notes tends to center on the most recently auctioned issues, the exchanges will
not continue indefinitely to introduce new expirations with respect to such
options to replace expiring options on particular issues. The expirations
introduced at the commencement of options trading on a particular issue will be
allowed to run, with the possible addition of a limited number of new
expirations, as the original expirations expire. Options trading on each issue
of bonds or notes will thus be phased out as new options are listed on more
recent issues, and a full range of expirations will not ordinarily be available
on the exchange for every issue on which options are traded.
ON TREASURY BILLS. Because the deliverable Treasury bill changes from week to
week, writers of Treasury bill calls cannot provide in advance for their
potential exercise settlement obligations by acquiring and holding the
underlying security. However, if the Fund holds a long position in Treasury
bills with a principal amount corresponding to the contract size of the option,
it may be hedged from a risk standpoint. In addition, the Fund will maintain
Treasury bills, maturing no later than those which would be deliverable in the
event of exercise of a call option it has written, in a segregated account with
its custodian so that it will be treated as being covered for margin purposes.
ON GNMA CERTIFICATES. Options on GNMA certificates are not currently traded on
any national securities exchange, although the Securities and Exchange
Commission (the "Commission") has approved such options for trading on the
Chicago Board Options Exchange. Since the remaining principal balance of GNMA
certificates declines each month as mortgage payments are made, the Fund, as a
writer of a GNMA call, may find that the GNMA certificates it holds no longer
have a sufficient remaining principal balance to satisfy its delivery obligation
in the event of exercise of the call option it has written. Should this occur,
7
<PAGE>
additional GNMA certificates from the same pool (if obtainable), or replacement
GNMA certificates, will have to be purchased in the cash market to meet delivery
obligations. The Fund will either replace GNMA certificates representing cover
for call options it has written, or maintain in a segregated account with its
custodian cash or U.S. Government securities or other appropriate high grade
debt obligations having an aggregate value equal to the market value of the GNMA
certificates underlying the call options it has written.
The hours of trading for options on U.S. Government securities may not
conform to the hours during which the underlying securities are traded. To the
extent that the options markets close before the markets for the underlying
securities, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the options markets.
Options are traded on exchanges on only a limited number of U.S. Government
securities, and exchange regulations limit the maximum number of options which
may be written or purchased by a single investor or a group of investors acting
in concert. The Trust and other clients advised by the Manager may be deemed to
constitute a group for these purposes. In light of these limits, the Trust's
Board of Trustees (the "Board of Trustees" or the "Board") may determine at any
time to restrict or terminate the public offering of the Fund's shares
(including through exchanges from the other Funds).
Exchange markets in options on U.S. Government securities are a relatively
new and untested concept and it is impossible to predict the amount of trading
interest that may exist in such options. There can be no assurance that viable
exchange markets will develop or continue.
REPURCHASE AGREEMENTS (ALL FUNDS)
Repurchase agreements involve purchases of securities by a Fund. In such a
transaction, at the time the Fund purchases the security, it simultaneously
agrees to resell and redeliver the security to the seller who also
simultaneously agrees to buy back the security at a fixed price and time. This
assumes a predetermined yield for the Fund during its holding period, since the
resale price is always greater than the purchase price and reflects an
agreed-upon market rate. Such transactions afford an opportunity for the Fund to
invest temporarily available cash. Repurchase agreements may be considered loans
to the seller collateralized by the underlying securities. The risk to the Fund
is limited to the ability of the seller to pay the agreed-upon sum on the
repurchase date; in the event of default, the repurchase agreement provides that
the Fund is entitled to sell the underlying collateral. If the value of the
collateral declines after the agreement is entered into, however, and if the
seller defaults under a repurchase agreement when the value of the underlying
collateral is less than the repurchase price, the Fund could incur a loss of
both principal and interest. The manager monitors the value of the collateral at
the time the transaction is entered into and at all times subsequent during the
term of the repurchase agreement in an effort to determine that the value of the
collateral always equals or exceeds the agreed-upon repurchase price to be paid
to the Fund. If the seller were to be subject to a federal bankruptcy
proceeding, the ability of the Fund to liquidate the collateral could be delayed
or impaired because of certain provisions of the bankruptcy laws.
PERFORMANCE INFORMATION
GOVERNMENT CASH FUND
From time to time, the Trust determines a current yield and effective yield
for each class of shares of the Government Cash Fund. For a further discussion
of how the Trust calculates yield, see "Pricing of Fund Shares" in the
Prospectus.
The effective yield is an annualized yield based on a compounding of the
unannualized base period return. The effective yield will be slightly higher
than the yield or seven-day current yield because of the compounding effect of
the assumed reinvestment.
These yields are each computed in accordance with a standard method
prescribed by the rules of the Commission, by first determining the net change
in account value for a hypothetical account having a share balance of one share
at the beginning of a seven-day period (the "beginning account value"). The net
change in account value equals the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares. The unannualized base period return equals
the net change in account value divided by the beginning account value. Realized
gains or losses or changes in unrealized appreciation or depreciation are not
taken into account in determining the net change in account value.
The yields are then calculated as follows:
Net Change in Account Value 365
--------------------------- X ---
Current Yield = Beginning Account Value 7
365
Effective Yield = [(1 + Base Period Return) ---]-1
7
8
<PAGE>
For the seven days ended December 31, 1999, the Government Cash Fund's
current and effective (compounded) yields were 5.06% and 5.16%, respectively,
for Class A Shares; 4.36% and 4.44%, respectively, for Class B Shares; 5.06% and
5.16%, respectively, for Class C Shares; and 5.36% and 5.48%, respectively, for
Class I Shares.
Yield is a function of portfolio quality and composition, portfolio maturity
and operating expenses. Yields fluctuate and do not necessarily indicate future
results. While yield information may be useful in reviewing the performance of
the Fund, it may not provide a basis for comparison with bank deposits, other
fixed rate investments or other investment companies that may use a different
method of calculating yield.
OTHER FUNDS
The Trust will include performance data for Class A, Class B, Class C and
Class I Shares of each Fund in its advertisements, sales literature and other
information distributed to the public that includes performance data of a Fund.
Such performance information will be based on investment yields or total returns
for the Fund.
YIELD
Yield may not be the same as the distribution rate or the income reported in
the Fund's financial statements. We compute yield by taking the interest and
dividend income a Fund earns in a 30-day period, net of expenses, and dividing
that amount by the average number of shares entitled to receive dividends. Yield
will be calculated, using a one-month base period, according to the following
formula:
Yield = 2 X [(a-b/cd) + 1] 6 - 1
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends
d = the maximum offering price per
share on the last day of the period.
The annualized yield for the Class A, Class B, Class C and Class I Shares of
the Government Fund at December 31, 1999 was 4.34%, 3.84%, 4.10% and 4.86%.
AVERAGE ANNUAL TOTAL RETURN
Total return represents the average annual compounded rate of return on an
investment of $1,000 at the maximum public offering price (in the case of Class
A Shares) or reflecting the deduction of any applicable CDSC. All data are based
on past investment results.
Average annual total return for a given period is computed by finding the
average annual compounded rate of return over the period that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1 + T)n = ERV
Where:
P = a hypothetical initial investment in the Fund of $1,000
T = average annual total return
n = number of years in period
ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 investment in the Fund made at the beginning of the period.
The following table summarizes the calculation of total return for each Fund
(including the effect of the maximum sales charge) where applicable, through
December 31, 1999.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1999
YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED COMMENCEMENT OF OPERATIONS*
FUND 12/31/99 12/31/99 12/31/99 TO 12/31/99
---- -------- -------- -------- -----------
Class A Shares
--------------
<S> <C> <C> <C> <C>
Appreciation Fund (7.20)% 10.24% -- 9.63%
Foreign Equity Fund 16.22% -- -- 12.53%
Government Cash Fund 4.52% 4.86% -- 4.74%
Government Fund (7.21)% 4.43% 5.38% --
Growth & Income Fund (4.47)% -- -- 4.99%
Managed Assets 2.82% 11.73% -- 9.69%
Strategy Fund (3.02)% 9.70% 9.15% --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED FIVE YEARS ENDED COMMENCEMENT OF OPERATIONS*
12/31/99 12/31/99 TO 12/31/99
-------- -------- -----------
<S> <C> <C> <C>
CLASS B SHARES
--------------
Appreciation Fund (5.40)% -- 7.01%
Foreign Equity Fund 18.06% -- 13.56%
Government Cash Fund (0.20)% -- 4.09%
Government Fund (6.95)% -- 3.64%
Growth & Income Fund (3.21)% -- 5.33%
Managed Assets 4.06% -- 11.71%
Strategy Fund (1.13)% -- 5.79%
CLASS C SHARES
--------------
Appreciation Fund (2.49)% 10.73% 8.48%
Foreign Equity Fund 21.85% -- 14.65%
Government Cash Fund 4.52% 4.86% 4.74%
Government Fund (3.09)% 4.95% 4.63%
Growth & Income Fund 0.45% -- 6.19%
Managed Assets 8.01% 12.19% 9.81%
Strategy Fund 1.94% 10.17% 8.67%
CLASS I SHARES
--------------
Appreciation Fund (1.45)% -- 8.44%
Government Cash Fund 4.83% -- 5.11%
Government Fund 2.31% -- 4.80%
Growth & Income Fund 1.46% -- 7.25%
Managed Assets 9.08% -- 13.94%
Strategy Fund 2.96% -- 7.80%
</TABLE>
*Since inception, March 25, 1985 for Class A Shares of the Government Fund;
December 29, 1989 for Class A Shares of the Strategy Fund; October 7, 1991 for
Class A Shares of the Appreciation Fund, Strategy Fund, and the Government Fund;
and February 4, 1992 for Class C Shares of the Appreciation Fund, Strategy Fund,
and the Government Fund; February 8, 1993 for Class A and Class C Shares of
Managed Assets; May 1, 1994 for Class A and Class C Shares of the Government
Cash Fund; April 8, 1996 for Class B Shares of the Appreciation Fund, Government
Cash Fund, Strategy Fund, Managed Assets, and Government Fund; November 1, 1996
for Class I Shares of the Appreciation Fund, Strategy Fund, Government Cash
Fund, and Managed Assets; November 26, 1996 for Class A, Class B, Class C and
Class I Shares of the Growth & Income Fund; July 14, 1997 for Class I Shares of
the Government Fund; and November 24, 1997 for Class A, Class B, Class C and
Class I Shares of the Foreign Equity Fund.
The investment results of the Class A, Class B, Class C and Class I Shares of
a Fund will tend to fluctuate over time, so that historical yields, current
distributions and total returns should not be considered representations of what
an investment may earn in any future period. Actual dividends will tend to
reflect changes in market yields, and will also depend upon the level of a
Class's or Fund's expenses, realized or unrealized investment gains and losses,
and the results of such Fund's investment policies. Thus, at any point in time,
investment yields, current distributions or total returns may be either higher
or lower than past results, and there is no assurance that any historical
performance record will continue.
PERFORMANCE COMPARISONS
The Trust, a Fund or Class of a Fund may, from time to time, include in
advertisements containing total return the ranking of those performance figures
relative to such figures for groups of mutual funds having similar investment
objectives as categorized by ranking services such as Lipper Analytical
Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial
Services, Inc., and rating services such as Morningstar, Inc. Additionally, the
Trust or a Fund may compare its performance results to other investment or
savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Stanger's Mutual Fund Monitor, The Stanger
Register, Stanger's Investment Adviser, The Wall Street Journal, New York Times,
Consumer Reports, Registered Representative, Financial Planning, Financial
Services Weekly, Financial World, U.S. News and World Report, Standard and
Poor's The Outlook, Investor's Daily and Personal Investor. The total return may
be used to compare the performance of a Fund against certain widely acknowledged
outside standards or indices for stock and bond market performance, such as the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), Dow Jones
Industrial Average, Consumer Price Index, Lehman Brothers Corporate Index and
Lehman Brothers T-
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Bond Index. The S&P 500 is a commonly quoted measure of stock market performance
and represents common stocks of companies of varying sizes segmented across 90
different industries which are listed on the New York Stock Exchange, the
American Stock Exchange and traded over the NASDAQ National Market System.
PORTFOLIO TURNOVER
The Funds pay brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by a Fund and thus indirectly by its shareholders. It may
also result in the realization of larger amounts of short-term capital gains,
which are taxable to shareholders as ordinary income. If such rate of turnover
exceeds 100%, the Funds will pay more in brokerage commissions than would be the
case if they had lower portfolio turnover rates. Historical turnover rates can
be found under the heading "Financial Highlights" located in the Trust's
Prospectus.
PORTFOLIO TRANSACTIONS AND BROKERAGE
ALL FUNDS OTHER THAN THE GOVERNMENT CASH FUND
The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Funds, to buy and sell securities for the Funds, provided they
have the execution capability and that their commission rates are comparable to
those of other unaffiliated broker/dealers. Directors of PXP Securities Corp. or
its affiliates receive indirect benefits from the Funds as a result of its usual
and customary brokerage commissions that PXP Securities Corp. may receive for
acting as broker to the Funds in the purchase and sale of portfolio securities.
The investment advisory agreement does not provide for a reduction of the
advisory fee by any portion of the brokerage fees generated by portfolio
transactions of the Funds that PXP Securities Corp. may receive.
For the fiscal years ended December 1997, 1998 and 1999, brokerage
commissions paid by the Trust on portfolio transactions totaled $5,201,346,
$4,675,146 and $2,689,559, respectively. In the fiscal years ended October 1997,
1998 and 1999, the Trust paid brokerage commissions of $420,251, $670,940 and
$91,727, respectively, to PXP Securities Corp., its prior distributor and an
affiliate of its current Distributor. For the fiscal year ended December 31,
1999, the amount paid to PXP Securities Corp. was 3.40% of total brokerage
commissions paid by the Trust and was paid on transactions amounting to 1.70% of
the aggregate dollar amount of transactions involving the payment of
commissions. Brokerage commissions of $492,576 paid during the fiscal year ended
December 31, 1999, were paid on portfolio transactions aggregating $340,087,985
executed by brokers who provided research and other statistical information.
Allocation of transactions, including their frequency, to various dealers is
determined by the Adviser in its best judgment and in a manner deemed fair and
reasonable to shareholders. The primary consideration is prompt and efficient
execution of orders in an effective manner at the most favorable price. Subject
to this consideration, dealers who provide supplemental investment research,
statistical or other services to the Adviser may receive orders for transactions
by the Trust. Information so received will enable the Adviser to supplement its
own research and analysis with the views and information of other securities
firms. Such information may be useful and of value to the Adviser and its
affiliates in servicing other clients as well as the Trust; in addition,
information obtained by the Adviser and its affiliates in servicing other
clients may be useful and of value to the Adviser in servicing the Trust. In
allocating brokerage, the Adviser may also consider research provided to its
Subadviser pursuant to the Servicing Agreement.
The Trust may from time to time allocate brokerage commissions to firms that
furnish research and statistical information to the Adviser. The supplementary
research supplied by such firms is useful in varying degrees and is of
indeterminable value. Such research may, among other things, include advice
regarding economic factors and trends, advice as to occasional transactions in
specific securities and similar information relating to securities. No formula
has been established for the allocation of business to such brokers.
Consideration may be given to research provided and payment may be made of a fee
higher than that charged by another broker-dealer which does not furnish
research services or which furnishes research services deemed to be of lesser
value, so long as the criteria of Section 28(e) of the Securities Exchange Act
of 1934, as amended (the "1934 Act") are met. Section 28(e) of the 1934 Act
specifies that a person with investment discretion shall not be deemed to have
acted unlawfully or to have breached a fiduciary duty solely because such person
has caused the account to pay a higher commission than the lowest available
under certain circumstances. To obtain the benefit of Section 28(e), the person
so exercising investment discretion must make a good faith determination that
the commissions paid are reasonable in relation to the value of the brokerage
and research services provided viewed in terms of either that particular
transaction or his overall responsibilities with respect to the accounts as to
which he exercises investment discretion.
Currently, it is not possible to determine the extent to which commissions
that reflect an element of value for research services might exceed commissions
that would be payable for execution series alone, nor generally can the value of
research services be
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<PAGE>
measured. Research services furnished might be useful and of value to the
Adviser and its affiliates in serving other clients as well as the Trust, but on
the other hand any research service obtained by the Adviser or the Distributor
from the placement of portfolio brokerage of other clients might be useful and
of value to the Adviser in carrying out its obligation to the Trust.
There are no fixed limitations regarding the Trust's portfolio turnover rate.
In computing the portfolio turnover rate, all securities, including options, the
maturities or expiration dates of which at the time of acquisition are one year
or less, are excluded. Subject to this exclusion, the turnover rate is
calculated by dividing (A) the lesser of purchases or sales of portfolio
securities of a particular Fund for the fiscal year by (B) the monthly average
of the value of portfolio securities owned by the particular Fund during the
fiscal year.
The options activities of the Strategy Fund, Appreciation Fund, Growth &
Income Fund, Managed Assets, Foreign Equity Fund and Government Fund may affect
their respective turnover rates, the amount of brokerage commissions paid by
each Fund and the realization of net short-term capital gains. Such gains, when
distributed, are taxed to shareholders (other than retirement plans) at ordinary
income tax rates. There are no fixed limitations regarding the Strategy Fund's
portfolio turnover. Securities satisfying the basic policies and objectives of
the Strategy Fund may be disposed of when they are no longer deemed to be
suitable. High portfolio turnover involves correspondingly greater brokerage
commissions, other transaction costs, and a possible increase in short-term
capital gains or losses. See "Determination of Net Asset Value" and "Dividends,
Distributions and Taxes."
The exercise of calls written by a Fund may cause the Fund to sell portfolio
securities, thus increasing its turnover rate. The exercise of puts also may
cause a sale of securities and increase turnover. Although such exercise is
within the Fund's control, holding a protective put might cause the Fund to sell
the underlying securities for reasons which would not exist in the absence of
the put. A Fund will pay a brokerage commission each time it buys or sells a
security in connection with the exercise of a put or call. Some commissions may
be higher than those which would apply to direct purchases or sales of portfolio
securities.
GOVERNMENT CASH FUND
The Adviser places orders for the purchase and sale of securities for the
Government Cash Fund. All the Government Cash Fund's portfolio transactions are
principal transactions with major dealers in money market instruments on which
no brokerage commission is paid. Purchases from or sales to dealers serving as
market-makers include the spread between the bid and asked prices. Transactions
are allocated to various dealers according to the best judgment of the Adviser
and in a manner deemed fair and reasonable to shareholders. The primary
consideration is prompt and effective execution of orders at the most favorable
price. Subject to this consideration, dealers who provide supplemental
investment research, statistical or other services to the Adviser may receive
orders for transactions by the Government Cash Fund.
SERVICES OF THE ADVISERS
Phoenix/Zweig Advisers LLC ("Phoenix/Zweig" or the "Adviser") (formerly
Zweig/Glaser Advisers LLC) is the investment adviser to each of the funds and is
located at 900 Third Avenue, New York, NY 10022. As of December 31, 1999,
Phoenix/Zweig was managing twelve funds with net assets of approximately $1.8
billion and two closed-end funds with assets in excess of $1.4 billion.
Phoenix/Zweig has been managing funds since September 1986.
Phoenix/Zweig is a wholly-owned subsidiary of Phoenix Investment Partners,
Ltd. ("PXP"), a Delaware corporation, located at 56 Prospect St., Hartford, CT
06115. PXP is a publicly-traded independent registered investment advisory firm,
and has served investors for over 70 years. As of December 31, 1999, PXP had
approximately $64.6 billion in assets under management through its investment
partners: Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen, London, Singapore
and Fort Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in
Chicago; Roger Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca
Capital Management LLC (Seneca) in San Francisco; Phoenix/Zweig in New York; and
Phoenix Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in
Hartford, CT, Sarasota, FL, and Scotts Valley, CA, respectively.
Overall responsibility for the management and supervision of the Trust and
the Funds rests with the Trustees of the Phoenix-Zweig Trust (the "Trustees").
Phoenix/Zweig's services under its Management Agreement are subject to the
direction of the Trustees.
The Management Agreement will continue in effect for two years if
specifically approved annually by a majority of the Board of Trustees who are
not parties to such contract or interested persons of any such party. The
Management Agreement may be terminated without penalty by either of the parties
on 60 days' written notice and must terminate in the event of its assignment.
The Management Agreement was last approved by the Trustees on January 12, 1999
and by shareholders on February 25, 1999.
The Management Agreement provides that the Adviser is liable only for its
acts or omissions caused by its willful misfeasance, bad faith, or gross
negligence in the performance of its duties or reckless disregard of its
obligations under the Management Agreement. The Management Agreement permits the
Adviser to render services to others and to engage in other activities.
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<PAGE>
Pursuant to the Management Agreement, the Adviser: (a) supervises and assists
in the management of the assets of each Fund, furnishes each Fund with research,
statistical and advisory services and provides regular reports to the Trustees;
(b) provides advice and assistance with the operations of the Trust, compliance
support, preparation of the Trust's registration statements, proxy materials and
other documents and advice and assistance of the Adviser's General Counsel; (c)
makes investment decisions for the Trust; (d) selects brokers and dealers to
execute transactions for each Fund; (e) ensures that investments follow the
investment objective, strategies, and policies of that Fund and comply with
government regulations; and (f) furnishes office facilities, personnel necessary
to provide advisory services to the Funds, personnel to serve without salaries
as officers or agents of the Trust and compensation and expenses of any Trustees
who are also full-time employees of the Adviser or any of its affiliates.
Pursuant to the Servicing Agreement, Phoenix/Zweig has delegated to Zweig the
responsibility for making asset allocation decisions for the Funds.
The Funds' Subadviser is Zweig Consulting, LLC ("Zweig" or the "Subadviser").
Its principal offices are located at 900 Third Ave., New York, NY 10022. Zweig's
services under the Servicing Agreement are subject to the direction of both the
Trustees and Phoenix/Zweig. Under a Servicing Agreement with Phoenix/Zweig,
Zweig's duties to each Fund include: (1) promoting the interests of the Trust;
and (2) performing asset allocation research and analysis.
In managing the assets of the Funds, the Adviser furnishes continuously an
investment program for each Fund consistent with the investment objectives and
policies of that Fund. More specifically, the Adviser determines from time to
time what securities shall be purchased for the Trust and what securities shall
be held or sold by the Trust. The Subadviser determines what portion of the
Trust's assets shall be allocated between stocks, bonds and cash, as
appropriate, taking into account each Fund's investment objective. Both the
Subadviser and Adviser are subject always to the provisions of the Trust's
Agreement and Declaration of Trust, By-Laws and its registration statement under
the 1940 Act and under the 1933 Act covering the Trust's shares, as filed with
the SEC, and to the investment objectives, policies and restrictions of the
Trust, as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Trustees of the Trust may from
time to time establish. To carry out such determinations, the Adviser places
order for the investment and reinvestment of each Fund's assets (see "Portfolio
Transactions and Brokerage").
The Trust pays the Adviser for its services, pursuant to the Management
Agreement, a monthly fee at the annual rate of 0.50% of the average daily net
assets of the Government Cash Fund, 0.60% of the average daily net assets of the
Government Fund, 0.75% of the average daily net assets of the Strategy Fund and
the Growth & Income Fund, and 1.00% of the average daily net assets of the
Appreciation Fund, Managed Assets, and Foreign Equity Fund.
For services to the Trust during the fiscal years ended December 31, 1997,
1998 and 1999, the Adviser received fees of $20,527,925, $20,835,087 and
$15,198,917, respectively, under the Management Agreement in effect. Of these
totals, the Adviser received fees from each Fund as follows:
<TABLE>
<CAPTION>
FUND 1997 1998 1999
---- ---- ---- ----
<S> <C> <C> <C>
Appreciation Fund $5,195,484 $5,478,055 $3,318,029
Foreign Equity Fund 2,927 66,869 80,425
Government Cash Fund 302,623 433,374 827,398
Government Fund 257,892 249,834 243,176
Growth & Income Fund 160,389 303,824 214,196
Managed Assets 5,454,174 5,677,160 5,597,860
Strategy Fund 9,154,436 8,625,971 4,917,833
</TABLE>
The Adviser has voluntarily undertaken to limit the expenses of the
Government Cash Fund (exclusive of taxes, interest, brokerage commissions, 12b-1
fees and extraordinary expenses) until April 30, 2001 to 0.35% of its average
daily net assets. During the years ended December 31, 1997, 1998 and 1999, the
Adviser reimbursed $251,454, $296,837 and $489,015, respectively, to the
Government Cash Fund. The Adviser reserves the right to discontinue this policy
at any time after April 30, 2001.
The Adviser had voluntarily undertaken to limit the expenses of the Foreign
Equity Fund (exclusive of taxes, interest, brokerage commissions, 12b-1 fees and
extraordinary expenses) until April 30, 1999 to 1.50% of its average daily net
assets. For the period January 1, 1999 to April 30, 1999, the Adviser reimbursed
$35,865 to the Foreign Equity Fund. For the year ended December 31, 1998, the
Adviser reimbursed $148,672 to the Foreign Equity Fund. For the period November
24, 1997 (commencement of operations) to December 31, 1997, the Adviser
reimbursed $10,260 to the Foreign Equity Fund.
The Adviser had also voluntarily undertaken to limit the expenses of the
Growth & Income Fund (exclusive of taxes, interest, brokerage commissions, 12b-1
fees and extraordinary expenses) until April 30, 1998 to 1.00% of its average
daily net assets. During the years ended December 31, 1998 and 1997, the Adviser
reimbursed $13,761 and $148,969, respectively, to the Growth & Income Fund.
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<PAGE>
The Adviser may draw upon the resources of the Distributor and its qualified
affiliates in rendering its services to the Trust. The Distributor or its
affiliates may provide the Adviser (without charge to the Trust) with investment
information and recommendations that may serve as the principal basis for
investment decisions with respect to certain Funds of the Trust.
The Trust, its Adviser and Subadviser, and Distributor have each adopted a
Code of Ethics pursuant to Rule 17-j1 under the Investment Company Act of 1940.
Personnel subject to the Codes of Ethics may purchase and sell securities for
their personal accounts, including securities that may be purchased, sold or
held by the Fund, subject to certain restrictions and conditions. Generally,
personal securities transactions are subject to preclearance procedures,
reporting requirements and holding period rules. The Codes also restrict
personal securities transactions in private placements, initial public offerings
and securities in which the Fund has a pending order.
NET ASSET VALUE
FOR ALL FUNDS, the net asset value per share of each class of shares of each
Fund is determined as of the close of regular trading on the NYSE (normally 4:00
p.m. eastern time), and as of 2:00 p.m. eastern time for the Government Cash
Fund, on each day that the NYSE is open. The NYSE is closed on the following
holidays (or the weekdays on which these holidays are celebrated when they fall
on a weekend): New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
Shares are entitled to dividends as declared by the Board and, on liquidation
of a Fund, are entitled to receive their share of the net assets of the Fund.
Shareholders have no preemptive rights. The Trust's fiscal year ends on December
31.
We subtract the non-class specific liabilities of a Fund from the Fund's
assets to determine its total net assets. We then determine each class's
proportionate interest in the Fund's net assets. The liabilities attributable to
that class, including its distribution fees, are then deducted and the resulting
amount is divided by the number of shares of that class outstanding to produce
its net asset value per share.
Stocks, futures and options are valued at the closing prices reported on
recognized securities exchanges or, if no sale was reported, and for unlisted
securities, at the mean between the last-reported bid and asked prices. Bonds
and other fixed-income securities are valued at prices obtained from an
established bond-pricing service when such prices are available. Forward foreign
currency contracts are valued using forward currency exchange rates supplied by
a quotation service. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Board of Trustees. Short-term obligations having a remaining
maturity of 60 days or less are valued at amortized cost (which approximates
market value). The Government Cash Fund values all short-term investments using
the amortized cost method pursuant to Rule 2a-7 under the Investment Company Act
of 1940.
THE GOVERNMENT CASH FUND. The Board of Trustees (the "Board") has determined
that it is in the best interests of the Government Cash Fund and its
shareholders to seek to maintain a stable net asset value per share, and that
the appropriate method for valuing portfolio securities is the amortized cost
method, provided that such method continues to fairly reflect the market-based
net asset value per share. The Board shall continuously review this method of
valuation and make changes that may be necessary to assure that the Government
Cash Fund's instruments are valued at their fair value as determined by the
Board in good faith.
The Board has determined that the Government Cash Fund will comply with the
conditions of Rule 2a-7 under the Act regarding the amortized cost method of
valuing portfolio securities. Under Rule 2a-7, the Board is obligated, as a
particular responsibility within the overall duty of care owed to the Fund's
shareholders, to establish procedures reasonably designed, taking into account
current market conditions and the Fund's investment objectives, to stabilize the
net asset value per share of the Fund for purposes of distribution and
redemption, at $1.00 per share. These procedures include periodically
monitoring, as the Board deems appropriate, at such intervals as are reasonable
in light of current market conditions, the relationship between the net asset
value per share based upon the amortized cost method of valuation and the net
asset value per share based upon available indications of market value. The
Board will consider what steps should be taken, if any, in the event of a
difference of more than 1/2 of 1% between the amortized cost value and the
market value per share. The Board will take such steps as it considers
appropriate (e.g., redemption in kind, selling portfolio instruments prior to
maturity to realize capital gains or losses, shortening the average portfolio
maturity, withholding dividends, or utilizing a net asset value per share
determined by using market quotations) to minimize any material dilution or
other unfair results that might arise from differences between the net asset
value per share based upon the amortized cost method of valuation and the net
asset value per share based upon market value.
Rule 2a-7 requires that a dollar-weighted average portfolio maturity of not
more than 90 days, appropriate to the objective of maintaining a stable net
asset value of $1.00 per share, be maintained, and precludes the purchase of any
instrument with a remaining time to maturity of more than 397 calendar days.
However, the underlying securities used as collateral for repurchase agreements
are not subject to these restrictions, because a repurchase agreement is deemed
to have a maturity equal to the period
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<PAGE>
remaining until the date on which the repurchase of the underlying securities is
deemed to occur. Should the disposition of a portfolio security result in a
dollar-weighted average portfolio maturity of more than 90 days, the Government
Cash Fund will invest its available cash in a manner that will reduce such
average maturity to 90 days or less as soon as reasonably practicable. Rule 2a-7
also requires the Government Cash Fund to limit its investments to instruments
that the Board determines present minimal credit risks and that have been given
one of the two highest rating categories by nationally recognized statistical
rating organizations, or, in the case of instruments that are not so rated, are
of comparable quality as determined under procedures established by the Board.
It is the normal practice of the Government Cash Fund to hold portfolio
securities to maturity and realize their par values, unless a prior sale or
other disposition thereof is mandated by redemption requirements or other
extraordinary circumstances. A debt security held to maturity is redeemable by
its issuer at its principal amount plus accrued interest. Under the amortized
cost method of valuation traditionally employed by institutions for valuation of
money market instruments, neither the amount of daily income nor the net asset
value is affected by any unrealized appreciation or depreciation of the
portfolio. In periods of declining interest rates, the indicated daily yield on
shares of the Government Cash Fund (computed by dividing the annualized daily
income on the Fund's portfolio by the net asset value computed as above) may
tend to be higher than a similar computation made by utilizing a method of
valuation based upon market prices and estimates. The Government Cash Fund may,
to a limited extent, engage in short-term trading to attempt to take advantage
of short-term market variations, or may dispose of a portfolio security prior to
its maturity if the Adviser believes such disposition advisable, or necessary to
generate cash to satisfy redemptions. In such cases, the Government Cash Fund
may realize a gain or loss.
HOW TO BUY SHARES
The minimum initial investment is $500, and the minimum subsequent investment
is $25 for Class A, Class B or Class C Shares. However, both the minimum initial
and subsequent investment amounts are $25 for investments pursuant to the
"Investo-Matic" plan (a bank draft investing program administered by the
Distributor), or pursuant to the Systematic Exchange privilege, or for an
individual retirement account (IRA). In addition, there are no subsequent
investment minimum amounts in connection with the reinvestment of dividend or
capital gain distributions. The minimum initial investment for Class I Shares is
$1,000,000 with no minimum subsequent investment. Completed applications for the
purchase of shares should be mailed to: Phoenix-Zweig Funds, c/o State Street
Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange (2:00 p.m. for shares of the Government
Cash Fund) are confirmed at the offering price effective at that time, provided
the order is received by the Authorized Agent prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or Class C Shares would be less than the initial sales charge and accumulated
distribution services fee on Class A Shares purchased at the same time.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed, except
that a 1.00% deferred sales charge applies to shares purchased by an investor in
amounts over $1 million if redeemed within 12 months of purchase. Such deferred
sales charge may be waived under certain conditions. Class A Shares are subject
to ongoing distribution and services fees at an annual rate of 0.30% of the
Fund's aggregate average daily net assets attributable to the Class A Shares. In
addition, certain purchases of Class A Shares qualify for reduced initial sales
charges.
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<PAGE>
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within six years of purchase.
The deferred sales charge may be waived in connection with certain qualifying
redemptions.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares seven years
after the end of the calendar month in which the shareholder's order to purchase
was accepted subject to the qualifications described in the Funds' Prospectus.
The purpose of the conversion feature is to relieve the holders of the Class B
Shares that have been outstanding for a period of time from most of the burden
of such distribution related expenses. The seven-year time limit has been deemed
sufficient for the Adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
seven years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fees. Such
conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
subaccount. Each time any Class B Shares in the shareholder's Fund account
(other than those in the subaccount) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the subaccount will also convert to
Class A Shares.
CLASS C SHARES
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase. The deferred
sales charge may be waived in connection with certain qualifying redemptions.
Shares issued in conjunction with the automatic reinvestment of income
distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to ongoing distribution and services fees at
an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares for the Strategy Fund, Appreciation
Fund, Growth & Income Fund, Managed Assets and Foreign Equity Fund, and 0.75%
and 0.30% for the Government and Government Cash Funds, respectively.
CLASS I SHARES
Class I Shares are offered primarily to persons subject to the Subadviser's
Code of Ethics relating to personal securities transactions and to tax-exempt
retirement plans specifically affiliated with the Subadviser, as well as certain
institutional investors. If you are eligible to purchase and do purchase Class I
Shares, you will pay no sales charge at any time. There are no distribution and
service fees applicable to Class I Shares. Class I Shares are not available in
all states.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The ways in which sales charges may be avoided or reduced are described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Zweig Funds, the
Phoenix-Engemann Funds, Phoenix-Seneca Funds or any other mutual fund advised,
subadvised or distributed by the Adviser, Distributor or any of their corporate
affiliates (an "Affiliated Phoenix Fund"); (2) any director or officer, or any
full-time employee or sales representative (for at least 90 days) of the Adviser
or Distributor; (3) registered representatives and employees of securities
dealers with whom Distributor has sales agreements; (4) any qualified retirement
plan exclusively for persons described above; (5) any officer, director or
employee of a corporate affiliate of the Adviser or Distributor; (6) any spouse,
child, parent, grandparent, brother or sister of any person named in (1), (2),
(3) or (5) above; (7) employee benefit plans for employees of the Adviser,
Distributor and/or their corporate affiliates; (8) any employee or agent who
retires from Phoenix Home Life, Distributor and/or their corporate affiliates;
(9) any account held in the name of a qualified employee benefit plan, endowment
fund or foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix-Zweig Funds qualified plan; (11) any Phoenix Home Life separate account
which funds group annuity contracts offered to qualified employee benefit plans;
(12) any state, county, city, department, authority or similar agency prohibited
by law from paying a sales charge; (13) any fully matriculated student in any
U.S. service academy; (14) any unallocated account held by a third party
administrator, registered investment adviser, trust company, or bank trust
department which exercises discretionary authority and holds the account in a
fiduciary, agency, custodial or similar capacity, if in the aggregate such
accounts held by such entity equal or exceed $1,000,000 and by
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retirement plans with assets of $1,000,000 or more or at least 50 eligible
employees; (15) any person who is investing redemption proceeds from investment
companies other than the Phoenix Funds, Phoenix-Zweig Funds, Phoenix-Engemann
Funds or Phoenix-Seneca Funds if, in connection with the purchases or redemption
of the redeemed shares, the investor paid a prior sales charge provided such
investor supplies verification that the redemption occurred within 90 days of
the Phoenix Fund purchase and that a sales charge was paid; (16) any deferred
compensation plan established for the benefit of any Phoenix Fund, Phoenix-Zweig
Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund trustee or director; provided
that sales to persons listed in (1) through (16) above are made upon the written
assurance of the purchaser that the purchase is made for investment purposes and
that the shares so acquired will not be resold except to the Fund; (17)
purchasers of Class A Shares bought through investment advisers and financial
planners who charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients; (18)
retirement plans and deferred compensation plans and trusts used to fund those
plans (including, for example, plans qualified or created under sections 401(a),
403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy shares
for their own accounts, in each case if those purchases are made through a
broker or agent or other financial intermediary that has made special
arrangements with the Distributor for such purchases; (19) 401(k) participants
in the Merrill Lynch Daily K Plan (the "Plan") if the Plan has at least $3
million in assets or 500 or more eligible employees; or (20) clients of
investment advisors or financial planners who buy shares for their own accounts
but only if their accounts are linked to a master account of their investment
advisor or financial planner on the books and records of the broker, agent or
financial intermediary with which the Distributor has made such special
arrangements (each of the investors described in (17) through (20) may be
charged a fee by the broker, agent or financial intermediary for purchasing
shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of the
Phoenix-Zweig Funds (other than Phoenix-Goodwin Money Market Fund Class A Shares
and Phoenix-Zweig Government Cash Fund Class A or Class M Shares) or other
Affiliated Phoenix Fund, if made at the same time by the same "person," will be
added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b) plans
for the same employer; (d) multiple accounts (up to 200) under a qualified
employee benefit plan or administered by a third party administrator; or (e)
trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority and
which are held in a fiduciary, agency, custodial or similar capacity, provided
all shares are held of record in the name, or nominee name, of the entity
placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of the Phoenix-Zweig Funds (other than Phoenix-Goodwin Money Market
Fund Class A Shares and Phoenix-Zweig Government Cash Fund Class A or Class M
Shares), if made by the same person within a 13-month period, will be added
together to determine whether you are entitled to an immediate reduction in
sales charges. Sales charges are reduced based on the overall amount you
indicate that you will buy under the Letter of Intent. The Letter of Intent is a
mutually non-binding arrangement between you and the Distributor. Since the
Distributor doesn't know whether you will ultimately fulfill the Letter of
Intent, shares worth 5% of the amount of each purchase will be set aside until
you fulfill the Letter of Intent. When you buy enough shares to fulfill the
Letter of Intent, these shares will no longer be restricted. If, on the other
hand, you do not satisfy the Letter of Intent, or otherwise wish to sell any
restricted shares, you will be given the choice of either buying enough shares
to fulfill the Letter of Intent or paying the difference between any sales
charge you previously paid and the otherwise applicable sales charge based on
the intended aggregate purchases described in the Letter of Intent. You will be
given 20 days to make this decision. If you do not exercise either election, the
Distributor will automatically redeem the number of your restricted shares
needed to make up the deficiency in sales charges received. The Distributor will
redeem restricted Class A Shares before Class C or Class B Shares, respectively.
Oldest shares will be redeemed before selling newer shares. Any remaining shares
will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of the
Phoenix-Zweig Funds, if made over time by the same person may be added together
to determine whether the combined sum entitles you to a prospective reduction in
sales charges. You must provide certain account information to the Distributor
to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
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CLASS A SHARES--WAIVER OF DEFERRED SALES CHARGE
The 1% CDSC will be waived where the investor's dealer of record, due to the
nature of the investor's account, notifies the distributor prior to the time of
the investment that the dealer waives the commission otherwise payable to the
dealer, or agrees to receive such commissions ratably over a 12-month period.
CLASS B AND CLASS C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and Class C Shares if
the redemption is made (a) within one year of death (i) of the sole shareholder
on an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts
to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from certain other Class A and Class C Share retirement plans; (f) from the
Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, in which such
shares the Distributor has not paid the dealer the Class B sales commission; (g)
based on the exercise of exchange privileges among Class B and Class C Shares of
these Funds; (h) based on any direct rollover transfer of shares from an
established Fund qualified plan into another Affiliated Phoenix Fund IRA by
participants terminating from the qualified plan; and (i) based on the
systematic withdrawal program. If, as described in condition (a) above, an
account is transferred to an account registered in the name of a deceased's
estate, the CDSC will be waived on any redemption from the estate account
occurring within one year of the death. If the Class B or Class C Shares are not
redeemed within one year of the death, they will remain subject to the
applicable CDSC when redeemed. Shareholders between the ages of 59 1/2 and 70
1/2 receiving a CDSC waiver on mandatory distributions under retirement plans
described in condition (c) above prior to May 1, 1999, will continue to receive
the waiver.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same Fund
seven years after they are bought. Conversion will be on the basis of the then
prevailing net asset value of Class A and Class B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Trust were unable to obtain such assurances,
it might continue to make distributions if doing so would assist in complying
with its general practice of distributing sufficient income to reduce or
eliminate federal taxes otherwise payable by the Funds.
IMMEDIATE INVESTMENT
In order to obtain immediate investment of funds, initial and subsequent
purchases of shares of a Fund may also be made by wiring Federal Funds (monies
held in a bank account with a Federal Reserve Bank) directly pursuant to the
following instructions:
(1) For initial investments, telephone the Trust at (800) 367-5877. Certain
information will be requested from you regarding the account, and an
account number will be assigned.
(2) Once an account number has been assigned, direct your bank to wire the
Federal Funds to State Street Bank and Trust Company, Custody &
Shareholder Services Division, Boston, Massachusetts 02105, attention of
the appropriate Fund of the Phoenix-Zweig Trust. Your bank must include
the account number and the name(s) in which your account is registered in
its wire and also request a telephone advice. Your bank may charge a fee
to you for transmitting funds by wire.
An order for shares of a Fund purchased with Federal Funds will be accepted
on the business day Federal Funds are wired provided the Federal Funds are
received by 4:00 p.m. on that day; otherwise, the order will not be accepted
until the next business day. Shareholders should bear in mind that wire
transfers may take two or more hours to complete.
Promptly after an initial purchase of shares made by wiring Federal Funds
directly, the shareholder should complete and mail an Account Application to
Equity Planning.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries
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regarding policies and procedures relating to shareholder account services
should be directed to Shareholder Services at (800) 243-1574. The Trust and the
Distributor reserve the right to modify or terminate these services upon
reasonable notice. Broker/dealers may impose their own restrictions and limits
on accounts held through the broker/dealer. Please consult your broker/dealer
for account restriction and limit information.
EXCHANGES
Under certain circumstances, shares of any Phoenix-Zweig Fund may be
exchanged for shares of the same class of another Phoenix-Zweig Fund or other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Fund, except if made in connection with
the Systematic Exchange privilege. Shareholders may exchange shares held in
book-entry form for an equivalent number (value) of the same class of shares of
any other Phoenix-Zweig Fund or other Affiliated Phoenix Fund, if currently
offered. On exchanges with share classes that carry a contingent deferred sales
charge, the CDSC schedule of the original shares purchased continues to apply.
The exchange of shares is treated as a sale and purchase for federal income tax
purposes (see also "Dividends, Distributions and Taxes"). Exchange privileges
may not be available for all Phoenix Funds, and may be rejected or suspended.
SYSTEMATIC EXCHANGES
If the conditions above have been met, you or your broker may, by telephone
or written notice, elect to have shares exchanged for the same class of shares
of another Phoenix-Zweig Fund or other Affiliated Phoenix Fund automatically on
a monthly, quarterly, semiannual or annual basis or may cancel this privilege at
any time. If you maintain an account balance of at least $5,000, or $2,000 for
tax qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that shares be
automatically exchanged at predetermined intervals for shares of the same class
of another Phoenix-Zweig Fund. This requirement does not apply to Phoenix "Self
Security" program participants. Systematic exchanges will be executed upon the
close of business on the 10th day of each month or the next succeeding business
day. Systematic exchange forms are available from the Distributor. Exchanges
will be based upon each Fund's net asset value per share next computed after the
close of business on the 10th day of each month (or next succeeding business
day), without sales charge. Exchange privileges may not be available for all
Phoenix Funds, and may be rejected or suspended.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS
If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that any dividends
and distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Phoenix-Zweig Funds or other
Affiliated Phoenix Fund at net asset value. You should obtain a current
prospectus and consider the objectives and policies of each Fund carefully
before directing dividends and distributions to another Fund. Reinvestment
election forms and prospectuses are available from Equity Planning.
Distributions may also be mailed to a second payee and/or address. Requests for
directing distributions to an alternate payee must be made in writing with a
signature guarantee of the registered owner(s). To be effective with respect to
a particular dividend or distribution, notification of the new distribution
option must be received by the Transfer Agent at least three days prior to the
record date of such dividend or distribution. If all shares in your account are
repurchased or redeemed or transferred between the record date and the payment
date of a dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
INVEST-BY-PHONE
This expedited investment service allows a shareholder to make an investment
in an account by requesting a transfer of funds from the balance of their bank
account. Once a request is phoned in, Equity Planning will initiate the
transaction by wiring a request for monies to the shareholder's commercial bank,
savings bank or credit union via Automated Clearing House (ACH). The
shareholder's bank, which must be an ACH member, will in turn forward the monies
to Equity Planning for credit to the shareholder's account. ACH is a computer
based clearing and settlement operation established for the exchange of
electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to 3:00 p.m. (New York time) to place their purchase
request. Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact the
shareholder's bank via ACH with appropriate instructions. The purchase is
normally credited to the shareholder's account the day following receipt of the
verbal instructions. The Trust may delay the mailing of a check for redemption
proceeds of Trust shares purchased with a check or via Invest-by-Phone service
until the Trust has assured itself that good payment has been collected for the
purchase of the shares, which may take up to 15 days.
The Trust and Equity Planning reserve the right to modify or terminate the
Invest-by-Phone service for any reason or to institute charges for maintaining
an Invest-by-Phone account.
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SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to periodically redeem a portion
of your account on a predetermined monthly, quarterly, semiannual or annual
basis. A sufficient number of full and fractional shares will be redeemed so
that the designated payment is made on or about the 20th day of the month.
Shares are tendered for redemption by the Transfer Agent, as agent for the
shareowner, on or about the 15th of the month at the closing net asset value on
the date of redemption. The Systematic Withdrawal Program also provides for
redemptions to be tendered on or about the 10th, 15th or 25th of the month with
proceeds to be directed through Automated Clearing House (ACH) to your bank
account. In addition to the limitations stated below, withdrawals may not be
less than $25 and minimum account balance requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B and Class C shareholders may withdraw up to 1%
of their aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B and Class C shareholders redeeming more shares
than the percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed. Accordingly,
the purchase of Class B or Class C Shares will generally not be suitable for an
investor who anticipates withdrawing sums in excess of the above limits shortly
after purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefore postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Funds' current Prospectus for further information.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Fund has no specific procedures
governing such account transfers.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the giving
of not less than 60 days written notice to the shareholder mailed to the address
of record. During the 60-day period the shareholder has the right to add to the
account to bring its value to $200 or more. See the Funds' current Prospectus
for more information.
BY MAIL
Shareholders may redeem shares by making a written request, executed in the
full name of the account, directly to Phoenix-Zweig Funds, c/o State Street Bank
and Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when
certificates for shares are in the possession of the shareholder, they must be
mailed or presented, duly endorsed in the full name of the account, with a
written request to Equity Planning that the Trust redeem the shares. See the
Funds' current Prospectus for more information.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
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BY CHECK (GOVERNMENT AND GOVERNMENT CASH FUNDS ONLY)
Any shareholder of these Funds may elect to redeem shares held in his/her
Open Account by check. Checks will be sent to an investor upon receipt by Equity
Planning of a completed application and signature card (attached to the
application). If the signature card accompanies an individual's initial account
application, the signature guarantee section of the form may be disregarded.
However, the Trust reserves the right to require that all signatures be
guaranteed prior to the establishment of a check writing service account. When
an authorization form is submitted after receipt of the initial account
application, all signatures must be guaranteed regardless of account value.
Checks may be drawn payable to any person in an amount of not less than $500,
provided that immediately after the payment of the redemption proceeds the
balance in the shareholder's Open Account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient number
of full and fractional shares in the shareholder's Open Account will be redeemed
to cover the amount of the check. The number of shares to be redeemed will be
determined on the date the check is received by the Transfer Agent. Presently
there is no charge to the shareholder for the check writing service, but this
may be changed or modified in the future upon two weeks written notice to
shareholders. Checks drawn from Class B and Class C accounts are subject to the
applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables a shareholder to receive
income accruing on the shares to be redeemed until such time as the check is
presented to Equity Planning for payment. Inasmuch as canceled checks are
returned to shareholders monthly, no confirmation statement is issued at the
time of redemption.
Shareholders utilizing withdrawal checks will be subject to Equity Planning's
rules governing checking accounts. A shareholder should make sure that there are
sufficient shares in his Open Account to cover the amount of any check drawn. If
insufficient shares are in the account and the check is presented to Equity
Planning on a banking day on which the Trust does not redeem shares (for
example, a day on which the New York Stock Exchange is closed), or if the check
is presented against redemption proceeds of an investment made by check which
has not been in the account for at least fifteen calendar days, the check may be
returned marked "non-sufficient Funds" and no shares will be redeemed. A
shareholder may not close his account by a withdrawal check because the exact
value of the account will not be known until after the check is received by
Equity Planning.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Funds may make
payment of the redemption price either in cash or in kind. However, the Funds
have elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Funds at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to them
in computing the net asset value per share of a Fund. A shareholder receiving
such securities would incur brokerage costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
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(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
TAX STATUS
Each Fund of the Trust will be treated as a separate corporation for purposes
of the Internal Revenue Code of 1986, as amended (the Code) (except for purposes
of the definitional requirements for regulated investment companies under Code
Section 851(a)). By paying dividends representing its investment company taxable
income within the time periods specified in the Code and by meeting certain
other requirements, each Fund intends to qualify as a regulated investment
company under the Code. Since each Fund intends to distribute at least annually
its investment company taxable income, net capital gains, and capital gain net
income, it will not be subject to income or excise taxes otherwise applicable to
undistributed income of a regulated investment company. If a Series were to fail
to distribute all its income and gains, it would be subject to income tax and,
in certain circumstances, a 4% excise tax.
TAXATION OF SHAREHOLDERS
Dividends from net investment income and distributions from short-term
capital gains are taxable to shareholders as ordinary income. Distributions from
net capital gains that are properly designated as capital gains dividends are
taxable to shareholders as long-term capital gains regardless of the length of
time the shares in respect of which such distributions are received have been
held.
Dividends from Phoenix-Zweig Government Cash Fund and the Phoenix-Zweig
Government Fund are not expected to qualify for the 70% dividends received
deduction available to corporate shareholders. Phoenix-Zweig Government Cash
Fund's dividends include all accrued interest, earned discounts and realized
gains and losses, less amortized premiums and accrued expenses. Distributions by
other Funds out of their dividend income from domestic corporations may qualify
in whole or in part for the deduction if the distributing Fund does not sell the
stock in respect of which it received such dividends before satisfying a 46-day
holding period requirement (91 days for certain preferred stock), and the
shareholder holds his Trust shares in the distributing Fund for at least 46
days. For this purpose, the distributing Fund holding period in such stock may
be reduced for periods during which the Fund reduces its risk of loss from
holding the stock (e.g., by entering into option contracts).
Investors who purchase shares shortly before the record date for a
distribution will pay a share price that includes the value of the anticipated
distribution and will be taxed on the distribution when it is received even
though with respect to them the distribution represents in effect a return of a
portion of their purchase price. Any loss realized on a sale or exchange of
shares will be disallowed if the shares disposed of are replaced within a period
of 61 days beginning 30 days before the shares are sold or exchanged. If
disallowed, the loss will be reflected in an adjustment to the basis of the
shares acquired.
Individuals and certain other non-exempt payees will be subject to a 31%
backup Federal withholding tax on dividends and other distributions from the
Funds, as well as on the proceeds of redemptions of Funds other than the
Phoenix-Zweig Government Cash Fund, if the affected Fund is not provided with
the shareholder's correct taxpayer identification number and certification that
the shareholder is not subject to such backup withholding, or if the Internal
Revenue Service notifies such Fund that the shareholder has failed to report
proper interest or dividends. For most individuals, the taxpayer identification
number is the taxpayer's social security number.
TAX TREATMENT OF CERTAIN TRANSACTIONS
In general, and as explained more fully below, if the Trust enters into
combinations of investment positions by virtue of which its risk of loss from
holding an investment position is reduced on account of one (or more) other
positions (i) losses realized on one position may be deferred to the extent of
any unrecognized gain on another position and (ii) long-term capital gains or
short-term capital losses may be recharacterized, respectively, as short-term
gains and long-term losses. Investments in foreign currency denominated
instruments or securities may generate, in whole or in part, ordinary income or
loss. The Federal income tax treatment of gains and losses realized from
transactions involving options on stock or securities entered into by a Fund
will be as follows: Gain or loss from a closing transaction with respect to
options written by a Fund, or gain from the lapse of any such option, will be
treated as short-term capital gain or loss. Gain or loss from the sale of put
and call options that a Fund purchases, and loss attributable to
22
<PAGE>
the lapse of such options, will be treated as capital gain or loss. The capital
gain or loss will be long- or short-term depending on whether or not the
affected option has been held for more than one year. For this purpose, an
unexercised option will be deemed to have been sold on the date it expired. It
should be noted, however, that if a put is acquired at a time when the
underlying stock or security has been held for not more than one year, or if
shares of the underlying stock or security are acquired while such put is held,
any gain on the subsequent exercise, sale or expiration of the put will
generally be short-term gain.
Any regulated futures contract or listed non-equity option held by a Fund at
the close of its taxable year will be treated as sold for its fair market value
on the last business day of such taxable year. Sixty percent of any gain or loss
with respect to such deemed sales, as well as the gain or loss from the
termination during the taxable year of the Fund's obligation (or rights) with
respect to such contracts by offsetting, by taking or making delivery, by
exercise or being exercised, by assignment or being assigned, by lapse, or
otherwise, will be treated as long-term capital gain or loss and the remaining
forty percent will be treated as short term capital gain or loss. A Fund may
make certain elections that modify the above tax treatment with respect to
regulated futures contracts or listed non-equity options that are part of a
mixed straddle, as defined by the Code.
The Trust may invest in certain investments that may cause it to realize
income prior to the receipt of cash distributions, including securities bearing
original issue discount. The level of such investments is not expected to affect
a Fund's ability to distribute adequate income to qualify as a regulated
investment company.
Treasury Regulations pursuant to Section 1092 provide for the coordination of
the wash sale rules and the short sale rules with the straddle rules. Generally,
the wash sale rules prevent the recognition of loss where a position is sold at
a loss and a substantially identical position is acquired within a prescribed
period. The short sale rules generally prevent the use of short sales to convert
short-term capital gain to long-term capital gain and long-term capital loss to
short-term capital loss.
In addition to the Federal income tax consequences described above relating
to an investment in the Trust, there may be other Federal, state, local or
foreign tax considerations that depend upon the circumstances of each particular
investor. Prospective shareholders are therefore urged to consult their tax
advisers with respect to the effects of this investment on their specific
situations.
THE DISTRIBUTOR
Pursuant to its Distribution Agreement with the Trust (the "Distribution
Agreement"), Phoenix Equity Planning Corporation ("Equity Planning" or the
"Distributor") acts as distributor of the Trust's shares and receives: with
respect to Class A Shares, a front-end sales commission, as described in the
Prospectus under "Sales Charges," and a 1% CDSC which may apply on redemptions
within 12 months of purchases not subject to a sales charge; with respect to
Class B Shares, a declining CDSC ranging from 5% to 1% of the gross proceeds of
a redemption of shares held for less than seven years; and, with respect to
Class C Shares, a CDSC of 1.25% of the gross proceeds of a redemption of shares
held for less than one year. The Distributor also is compensated under the Rule
12b-1 distribution plans as described more fully below.
Equity Planning has undertaken to use its best efforts to find purchasers for
shares of the Trust. Shares of each Fund are offered on a continuous basis.
Pursuant to distribution agreements for each class of shares or distribution
method, the Distributor will purchase shares of the Trust for resale to the
public, either directly or through securities dealers or agents, and is
obligated to purchase only those shares for which it has received purchase
orders. Equity Planning may also sell Trust shares pursuant to sales agreements
entered into with bank-affiliated securities brokers who, acting as agent for
their customers, place orders for Trust shares with Equity Planning. If, because
of changes in law or regulations, or because of new interpretations of existing
law, it is determined that agency transactions of bank-affiliated securities
brokers are not permitted, the Trustees will consider what action, if any, is
appropriate. It is not anticipated that termination of sales agreements with
bank-affiliated securities brokers would result in a loss to their customers or
a change in the net asset value per share of a Fund.
For its services under the Distribution Agreement, the Distributor receives
sales charges on transactions in Fund shares and retains such charges less the
portion thereof allowed to its registered representatives and to securities
dealers and securities brokers with whom it has sales agreements. In addition,
the Distributor may receive payments from the Fund pursuant to the Distribution
Plans described below. PXP Securities Corp., formerly known as Zweig Securities
Corp., served as the distributor for the Trust prior to March 1, 1999. For the
fiscal years ended December 31, 1997, 1998 and 1999, purchasers of shares of the
Funds paid aggregate sales charges of $1,067,868, $929,426 and $886,545,
respectively, of which PXP Securities Corp. and/or the Distributor received net
commissions of $829,203, $1,048,587 and $1,875,311, respectively for its
services, the balance being paid to dealers. For the fiscal year ended December
31, 1999, PXP Securities Corp. and/or the Distributor received net commissions
of $29,127 for Class A Shares and deferred sales charges of $1,846,184 for Class
A, Class B and Class C Shares.
23
<PAGE>
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as set forth below.
<TABLE>
<CAPTION>
CLASS A SHARES -- ALL FUNDS (EXCEPT THE GOVERNMENT AND GOVERNMENT CASH FUNDS)
DEALER DISCOUNT
SALES CHARGE SALES CHARGE OR AGENCY FEE
AMOUNT OF TRANSACTION AS PERCENTAGE AS PERCENTAGE AS PERCENTAGE OF
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED OFFERING PRICE
----------------- ----------------- ------------------ --------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.25%
$50,000 but under $100,000 4.75% 4.99% 4.25%
$100,000 but under $250,000 3.75% 3.90% 3.25%
$250,000 but under $500,000 2.75% 2.83% 2.25%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
CLASS A SHARES -- GOVERNMENT FUND
DEALER DISCOUNT
SALES CHARGE SALES CHARGE OR AGENCY FEE
AMOUNT OF TRANSACTION AS PERCENTAGE AS PERCENTAGE AS PERCENTAGE OF
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED OFFERING PRICE
----------------- ----------------- ------------------ --------------
<S> <C> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50% 4.71% 4.00%
$100,000 but under $250,000 3.50% 3.63% 3.00%
$250,000 but under $500,000 2.75% 2.83% 2.25%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
</TABLE>
Class A Shares of the Government Cash Fund are offered to the public at their
constant net asset value of $1.00 per share with no sales charge or dealer
discount.
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan (the "Plan") due to waiver of the CDSC for
these Plan participants' purchases. There is no dealer compensation payable on
Class I Shares. Your broker, dealer or investment adviser may also charge you
additional commissions or fees for their services in selling shares to you
provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Funds and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Funds
through distribution fees, service fees or transfer agent fees or in some cases,
the Distributor may pay certain fees from its own profits and resources. From
its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6 million. If part or all of
such investment as described in (c) and (d) above, including investments by
qualified employee benefit plans, is subsequently redeemed within one year of
the investment date, a 1% CDSC will apply, except for redemptions of shares
purchased by an investor in amounts of $1 million or more where such investor's
dealer of record, due to the nature of the investor's account, notifies the
distributor prior to the time of the investment that the dealer waives the
commission otherwise payable to the dealer, or agrees to receive such
commissions ratably over a 12 month period. In addition, the Distributor may pay
the entire applicable sales charge on purchases of Class A Shares to selected
dealers and agents. Any dealer who receives more than 90% of a sales charge may
be deemed to be an "underwriter" under the Securities Act of 1933. Equity
Planning reserves the right to discontinue or alter such fee payment plans at
any time.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and
24
<PAGE>
educational meetings sponsored by the distributor. The Distributor may also
provide gifts amounting in value to less than $100, and occasional meals or
entertainment, to registered representatives of dealers. Any such travel
expenses, meals, lodging, gifts or entertainment paid will not be preconditioned
upon the registered representatives' or dealers' achievement of a sales target.
The Distributor may, from time to time, reallow the entire portion of the sales
charge on class A shares which it normally retains to individual selling
dealers. However, such additional reallowance generally will be made only when
the selling dealer commits to substantial marketing support such as internal
wholesaling through dedicated personnel, internal communications and mass
mailings.
ADMINISTRATIVE SERVICES
Effective November 1, 1999, Equity Planning also acts as administrative agent
of the Fund and as such performs administrative, bookkeeping and pricing
functions for the Fund. For its services, Equity Planning is entitled to a fee
payable monthly and based upon the average of the aggregate daily net asset
value of the Fund, at the following incremental annual rates:
First $50 million .07%
$50 million to $200 million .06%
Greater than $200 million .01%
Equity Planning retains PFPC, Inc. as subagent for the Fund. For services
during the Fund's fiscal year ended December 31, 1999, Equity Planning and/or
Bank of New York, the previous administrative agent, received $560,135 under an
administration agreement that provided for compensation at the same rates as
described above.
DISTRIBUTION PLANS
The Trust has adopted a distribution plan for each class of shares of each
Fund except Class I Shares (i.e., a plan for the Class A and C Shares and a plan
for the Class B Shares; collectively, the "Plans") in accordance with Rule 12b-1
under the Act, to compensate the Distributor for the services it provides and
for the expenses it bears under the Distribution Agreement. Each class of shares
of each Fund (other than Class M Shares of the Government Cash Fund and Class I
Shares) pays a service fee at a rate of 0.25% per annum of the average daily net
assets of such class of the Fund and a distribution fee based on average daily
net assets at the following rates: for Class A Shares of all Funds at a rate of
0.05% per annum; for Class B Shares of all Funds at a rate of 0.75% per annum;
for Class C Shares at a rate of 0.75% per annum for the Appreciation Fund,
Strategy Fund, Growth & Income Fund, Managed Assets and Foreign Equity Fund,
0.50% per annum for the Government Fund and 0.05% per annum for the Government
Cash Fund.
The Rule 12b-1 Plan for the Class M Shares issued by Zweig Government Cash
Fund (the "Class M Plan") provides that the Distributor may enter into Service
Agreements with securities dealers, financial institutions, banks, and other
industry professionals for distribution, promotion and administration of and/or
servicing investors in Class M Shares. Such service organizations are paid
directly or indirectly by Zweig Government Cash Fund and the Manager. Service
payments under the Class M Plan are paid in equal amounts by Zweig Government
Cash Fund and the Manager, or Zweig Government Cash Fund and the Manager
reimburse the Distributor equally for service payments to a service
organization, in an amount not exceeding 0.30% per annum of the average daily
net asset value of the Class M Shares. The Class M Plan also provides that Zweig
Government Cash Fund will pay the costs and expenses connected with the printing
and distribution of Zweig Government Cash Fund's prospectuses, shareholder
reports, and any promotional material for other than current Fund shareholders,
in an amount not to exceed $100,000 per annum.
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor. The Distributor also pays to dealers as additional compensation
with respect to Class C Shares, 0.75% of the average annual net asset value of
that class.
A report of the amounts expended under the Plans must be made to the Board of
Trustees and reviewed by the Board at least quarterly. In addition, the Plans
provide that they may not be amended to increase materially the costs which the
Trust may bear for distribution pursuant to the Plans without shareholder
approval and that other material amendments to the Plans must be approved by a
majority of the Board, including a majority of the Board who are neither
interested persons of the Trust (as defined in the 1940 Act) nor have any direct
or indirect financial interest in the operation of the Plans (the "Qualified
Trustees"), by vote cast in person at a meeting called for the purpose of
considering such amendments.
The Plans are subject to annual approval by a majority of the Board of Trustees,
including a majority of the Qualified Trustees, by vote cast in person at a
meeting called for the purpose of voting on the Plans. The Plans are terminable
at any time by vote of a majority of the Qualified Trustees or, with respect to
any Class or Fund, by vote of a majority of the shares of such Class or Fund.
Pursuant to the Plans, any new trustees who are not interested persons must be
nominated by existing trustees who are not
25
<PAGE>
interested persons. If the Plans are terminated (or not renewed) with respect to
one or more Classes or Funds, they may continue in effect with respect to any
Class or Fund as to which they have not been terminated (or have not been
renewed).
Benefits from the Plans may accrue to the Trust and its shareholders from the
growth in assets due to sales of shares to the public pursuant to the Plans.
Increases in a Fund's net assets from sales pursuant to its Plan may benefit
shareholders by reducing per share expenses, permitting increased investment
flexibility and diversification of the Fund's assets, and facilitating economies
of scale (e.g., block purchases) in the Fund's securities transactions. Under
their terms, the Plans will continue from year to year, provided that such
continuance is approved annually by a vote of the Trustees in the manner
described above. In making its determination to continue the Plans, the Board
considers, among other factors: (1) the Trust's experience under the Plans and
the previous Rule 12b-1 Plans of the Trust, and whether such experience
indicates that the Plans would operate as anticipated; (2) the benefits the
Trust had obtained under the Plans and would be likely to obtain under the
Plans; (3) what services would be provided under the Plans by the Distributor to
the Trust and its shareholders; and (4) the reasonableness of the fees to be
paid to the Distributor for its services under the Plans. Based upon their
review, the Board, including each of the Qualified Trustees, determined that the
continuance of the Plans would be in the best interest of the Trust, and that
there was a reasonable likelihood that the Plans would benefit the Trust and its
shareholders. In the Board's quarterly review of the Plans, they will consider
their continued appropriateness and the level of compensation provided therein.
The Board of Trustees has the right to terminate the Rule 12b-1 Plan for the
Class B Shares, and in the event of such termination, no further payments would
be made thereunder. However, in the event the Board of Trustees were to
terminate the Rule 12b-1 Plan for the Class B Shares for any Fund, the Trust may
not thereafter adopt a new Rule 12b-1 Plan for a class of that Fund having, in
the good faith determination of the Board of Trustees, substantially similar
economic characteristics to the Class B Shares. Termination of the Rule 12b-1
Plan for the Class B Shares or the Distribution Agreement does not affect the
obligation of the Class B shareholders to pay CDSCs. The Distributor has sold
its right to receive certain payments under the Distribution Agreement to a
financial institution in order to finance the distribution of the Class B
Shares.
For the fiscal year ended December 31, 1999, the Trust paid Rule 12b-1 fees
in the amount of $11,889,970, of which the Distributor and the previous
distributor, PXP Securities Corp., an affiliate, received $10,234,219 and
unaffiliated broker-dealers received $1,655,751. The 12b-1 payments were used
for (1) compensating dealers, $10,234,219, (2) compensating sales personnel,
$2,557,889, (3) advertising, $251,320, (4) printing and mailing of prospectuses
to other than current shareholders, $1,787,967, (5) service costs, $461,467, and
(6) other, $28,951.
Because all amounts paid pursuant to the Plans are paid to the Distributor,
the Distributor and its officers, directors and employees, all may be deemed to
have a direct or indirect financial interest in the operation of the Plans. None
of the Trustees who is not an interested person of the Trust has a direct or
indirect financial interest in the operation of the Plans.
The Board of Trustees has also adopted a Rule 18f-3 Multi-Class Share Plan
permitting the issuance of shares in multiple classes.
MANAGEMENT OF THE TRUST
The Trustees have responsibility for management of the business of the Trust.
The officers of the Trust are responsible for its day to day operations. Set
forth below is certain information concerning the Trustees and officers.
<TABLE>
<CAPTION>
TRUSTEES AND OFFICERS
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
James Balog (71) Trustee Retired; Director and Member of the Audit, Investment, Stock
2205 N. Southwinds Blvd. Option and Compensation Committees of Transatlantic Holdings,
Vero Beach, FL 32963 Inc. (reinsurance); Director and Member of the Executive
Committee of Elan, Plc (pharmaceuticals); Director and Member
of the Executive and Investment & Credit Committees of Great
West Life and Annuity Insurance Company; Member of the
Technical Advisory Board of Galen Partners (health care) and
Trustee of the Phoenix-Euclid Funds. Former Director, Chairman
of the Audit Committee and Member of the Executive Committee of
A.L. Pharma, Inc. (health care); Chairman of 1838 Investment
Advisors, L.P. and Chairman of Lambert Brussels Capital
Corporation (investments).
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
TRUSTEES AND OFFICERS
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
Claire B. Benenson (81) Trustee Consultant on Financial Conferences, The New School for Social
870 U.N. Plaza Research. Director of The Burnham Fund Inc. and Trustee of the
New York, NY 10017 Phoenix-Euclid Funds. President of the Money Marketeers of New
York University. Trustee of Simms Global Fund and Director of
Phoenix-Zweig Government Cash Fund Inc. Former Director of
Financial Conferences and Chairman, Department of Business and
Financial Affairs, The New School for Social Research.
S. Leland Dill (69) Trustee Trustee and Chairman of the Audit Committee of Deutsche Asset
5070 North Ocean Dr. Management mutual funds. Trustee, Phoenix-Euclid Funds. Former
Singer Island, FL 33404 Director and Chairman of the Audit Committee of Coutts & Co.
Trust Holdings Limited, Coutts & Co. Group, Coutts & Co.
International (USA) (private banking). Former partner of Peat
Marwick Mitchell & Co. and Director of Zweig Cash Fund Inc. and
Vintners International Company, Inc. (winery).
*Philip R. McLoughlin (53) Trustee (1995-1997) and Chief Executive Officer (1995-present), Phoenix
56 Prospect Street Investment Partners, Ltd. Director (1994-present) and Executive
Hartford, CT 06115 Vice President, Investments (1998-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Chairman, Phoenix-Zweig Trust (2000-present).
Director (1983-present) and Chairman (1995-present), Phoenix
Investment Counsel, Inc. Director (1984-present) and President
(1990-present), Phoenix Equity Planning Corporation. Chairman and
Chief Executive Officer, Phoenix/Zweig Advisers LLC
(1999-present). Chairman, Phoenix-Zweig Trust (2000-present).
Director, PXRE Corporation (Delaware) (1985-present) and World
Trust Fund (1991-present). Director and Executive Vice President,
Phoenix Life and Annuity Company (1996-present). Director and
Executive Vice President, PHL Variable Insurance Company
(1995-present). Director, Phoenix Charter Oak Trust Company
(1996-present). Director and Vice President, PM Holdings, Inc.
(1985-present). Director (1992-present) and President
(1992-1994), W.S. Griffith & Co., Inc. Director, PHL Associates
Inc. (1995-present).
Donald B. Romans (69) Trustee President of Romans & Company, (private investors and financial
233 East Wacker Dr. consultants); Director of the Burnham Fund Inc. and Trustee of
Chicago, IL 60601 the Phoenix-Euclid Funds. Former Consultant to and Executive
Vice President and Chief Financial Officer of Bally
Manufacturing Corporation, and Director of Phoenix-Zweig
Government Cash Fund Inc.
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
TRUSTEES AND OFFICERS
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
Martin E. Zweig (57) President President of the Subadviser; Chairman of the Board and
900 Third Avenue President of The Zweig Total Return Fund, Inc. and The Zweig
New York, NY 10022 Fund, Inc.; Managing Director of Zweig-DiMenna Associates LLC;
President of Zweig-DiMenna International Managers, Inc.;
Zweig-Di Menna Associates, Inc. and Gotham Advisors, Inc.;
Member of the Undergraduate Executive Board of the Wharton
School, University of Pennsylvania; Trustee, Manhattan
Institute. Former President of Zweig Cash Fund Inc. Former
President and Director of Zweig Advisors Inc., Zweig Total
Return Advisors, Inc. and Zweig Securities Advisory Services
Inc. General Partner of Zweig Katzen Investors, L.P.; Former
Chairman of the Adviser and Euclid Advisors LLC.
Michael E. Haylon (42) Executive Vice Director and Executive Vice President--Investments, Phoenix
56 Prospect Street President Investment Partners, Ltd. (1995-present). Executive Vice
Hartford, CT 06115 President, Phoenix/Zweig Advisers LLC (1999-present). Director
(1994-present), President (1995-present), Executive Vice
President (1994-1995), Vice President (1991-1994), Phoenix
Investment Counsel, Inc. Director, Phoenix Equity Planning
Corporation (1995-present). Executive Vice President, Phoenix
Funds (1993-present) and Phoenix-Aberdeen Series Fund
(1996-present). Executive Vice President (1997-present), Vice
President (1996-1997), Phoenix Duff & Phelps Institutional
Mutual Funds. Senior Vice President, Securities Investments,
Phoenix Home Life Mutual Insurance Company (1993-1995).
William R. Moyer (56) Executive Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial
P.O. Box 2200 Officer, Phoenix Investment Partners, Ltd. (1995-1999).
Enfield, CT 06083-2200 Director (1998-present), Senior Vice President, Finance
(1990-present), Chief Financial Officer (1996-present), and
Treasurer (1994-1996 and 1998-present), Phoenix Equity Planning
Corporation. Director (1998-present), Senior Vice President
(1990-present), Chief Financial Officer (1996-present) and
Treasurer (1994-present), Phoenix Investment Counsel, Inc.
Senior Vice President and Chief Financial Officer, Duff &
Phelps Investment Management Co. (1996-present). Vice
President, Phoenix Funds (1990-present), Phoenix-Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen
Series Fund (1996-present). Executive Vice President,
Phoenix-Seneca Funds (2000-present). Senior Vice President and
Chief Financial Officer, W.S. Griffith & Co., Inc. (1992-1995)
and Townsend Financial Advisers, Inc. (1993-1995).
John F. Sharry (47) Executive Vice President, Retail Division (1999-present), Executive Vice
56 Prospect Street President President, Retail Division (1997-1999), Phoenix Investment
Hartford, CT 06115 Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-1997). Executive Vice
President, Phoenix Funds, Phoenix-Aberdeen Series Funds
(1998-present) and Phoenix-Seneca Funds (2000-present).
Managing Director, Director and National Sales Manager, Putnam
Mutual Funds (1992-1995).
Carlton Neel (32) Senior Vice President First Vice President of Phoenix/Zweig Advisers LLC. Former Vice
900 Third Avenue President of Zweig Advisors Inc. and Zweig Total Return
New York, NY 10022 Advisors, Inc. Former Vice President of J.P. Morgan & Co., Inc.
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
TRUSTEES AND OFFICERS
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
Barry Mandinach (43) First Vice President Executive Vice President of PXP Securities Corp., Senior Vice
900 Third Avenue President of Phoenix/Zweig Advisers LLC. and Euclid Advisors
New York, NY 10022 LLC, and First Vice President of the Phoenix-Euclid Funds.
Beth Abraham (44) Assistant Vice President Assistant Vice President of Phoenix/Zweig Advisers LLC and the
900 Third Avenue Phoenix-Euclid Funds. Former self-employed consultant to the
New York, NY 10022 mutual fund industry.
David O'Brien (35) Assistant Vice President Assistant Vice President of Phoenix-Euclid Funds. Assistant
900 Third Avenue Portfolio Manager of Phoenix-Euclid Market Neutral Fund, the
New York, NY 10022 Phoenix-Zweig Strategy Fund, Phoenix-Zweig Appreciation Fund
and Phoenix-Zweig Growth & Income Fund. Formerly, Assistant
Vice President, PaineWebber (1993-1998).
Marc Baltuch (54) Secretary Director and President of Watermark Securities, Inc. Secretary
900 Third Avenue of Phoenix-Euclid Funds; Assistant Secretary of Gotham
New York, NY 10022 Advisors, Inc. Former First Vice President of the Phoenix/Zweig
Advisers LLC and of Zweig/Glaser Advisers LLC; Secretary of
Zweig Cash Fund Inc. Former First Vice President, Chief Compliance
Officer and Secretary of PXP Securities Corp.
Nancy G. Curtiss (47) Treasurer Treasurer, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen
Series Fund (1996-present), Vice President, Fund Accounting
(1994-2000) and Treasurer (1996-2000), Phoenix Equity Planning
Corporation and Phoenix-Seneca Funds (2000-present). Second
Vice President and Treasurer, Fund Accounting, Phoenix Home
Life Mutual Insurance Company (1994-1995). Various positions
with Phoenix Home Life Insurance Company (1987-1994).
</TABLE>
*Designates a trustee who is an interested person of the trust within the
meaning of the 1940 Act.
COMPENSATION OF TRUSTEES AND OFFICERS
For the fiscal year ended December 31, 1999, the fees and expenses of
disinterested trustees, as a group, were $73,000. Those trustees and officers of
the Trust who are affiliated with the Subadviser or the Adviser are not
separately compensated for their services as trustees or officers of the Trust.
The Trust currently pays each of its disinterested trustees a fee of $5,000 per
year, plus $1,500 per meeting attended ($500 per phone meeting) and reimburses
their expenses for attendance at meetings, all of which is prorated on the basis
of the assets of each Fund. In addition, each such trustee receives a fee of
$1,000 per year from each Fund. Trustees may be removed from office at any
meeting of shareholders by a vote of two-thirds of the outstanding shares of the
Trust. Except as set forth above, the trustees shall continue to hold office and
may appoint their successors.
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED FROM THE TRUST AND
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS FUND COMPLEX (2 FUNDS)
NAME FROM THE TRUST OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- -------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> >
James Balog $17,500 $22,500
Claire B. Benenson $18,500 None None $24,000
S. Leland Dill $18,500 for any for any $24,000
Philip R. McLoughlin $0 Trustee Trustee $0
Donald B. Romans $18,500 $24,000
-------------------</TABLE>
*"Interested Person" as defined under the Investment Company Act.
At_______, 2000, except for Dr. Martin E. Zweig, the Trustees and officers as
a group owned _____% of the shares of Foreign Equity Fund - Class A Shares and
less than 1% of any other class of any fund of the Trust.
29
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of _______, 2000 with respect
to each person who beneficially owns 5% or more of any class of the Fund's
equity securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENT OF CLASS
------------------- -------------- ----------------
<S> <C>
Dean Whitter FO Foreign Equity Fund--Class A
Hortense E. Martin
P.O. Box 250
Church Street Station
New York, NY 10008-0250
Eugene Glaser Foreign Equity Fund--Class A
784 Park Ave, #15C
New York, NY 10021-3553
Hare & Co Government Cash Fund--Class M
Bank of New York
Attn: STIF/Master Note
1 Wall Street, Fl. 2
New York, NY 10005
NFSC FBO Foreign Equity Fund--Class B
Summit Technical Services Inc.
355 Centreville Rd.
Warwick, RI 02886-4320
PaineWebber FBO Government Fund--Class B
Virginia B. Bunner
1602 Augusta Dr.
Marietta, GA 30067
Prudential Securities Inc. FBO Growth & Income Fund--Class C
Richard W. Dowis & Colleen Dowis
425 Columbine Street
Sterling, CO 80751-3947
Prudential Securities Inc. FBO Government Cash Fund--Class A
Nation Asset Mgmt. Pledge Coll. Acct.
For Credit Lyonnais
Washington Mall West
Reid St.
Bermuda
Prudential Securities Inc. FBO Government Cash Fund--Class A
Trout Trading Fd. Pledged Coll. Acct.
For Credit Lyonnais
Washington Mall One
Church St. 4th Floor
Hamilton HM11
Prudential Securities Inc. FBO Appreciation Fund--Class I
Zweig Advisors Inc. MPP/PS Plan Government Fund--Class I
900 Third Avenue Growth & Income Fund--Class I
New York, NY 10022 Managed Assets--Class I
Strategy Fund--Class I
State Street Bank & Trust Co. Cust. Government Fund--Class B
Gabriel M. Frayne
2055 Quaker Ridge Road
Croton Hudson, NY 10520-3515
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENT OF CLASS
------------------- -------------- ----------------
<S> <C>
State Street Bank & Trust Co. Cust. Government Cash Fund--Class C
Rana J. Khan
3722 August Lane
Elkhart, IN 46517-3854
State Street Bank & Trust Co. Cust. Foreign Equity--Class A
Donald B. Romans
233 E. Wacker Dr.
Chicago, IL 60601
State Street Bank & Trust Co. Cust. Growth & Income Fund--Class A
FBO Mollie Friedman Zweig
625 Park Ave, Apt. 8-9B
New York, NY 10021-6545
Martin E. Zweig and immediate family Government Cash Fund--Class I
900 Third Avenue Government Cash Fund--Class M
New York, NY 10022 Government Fund--Class I
Martin E. Zweig & Jeffrey Perry TTE Appreciation Fund--Class I
Zweig-DiMenna Associates Inc. Government Cash Fund--Class I
Retirement Trust MMP Government Fund--Class I
Attn: Michael Link Growth & Income--Class I
900 Third Avenue Managed Assets--Class I
New York, NY 10022 Strategy Fund--Class I
</TABLE>
The following table sets forth information as of _______, 2000 with respect
to each person owning of record 5% or more of any class of the Registrant's
equity securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENT OF CLASS
------------------- -------------- ----------------
<S> <C>
Banque Carnegie Luxembourg Government Cash Fund--Class A
5 Place de la Gare
P. O. Box 1141
Luxembourg L-1011
Donaldson Lufkin Jenrette Securities Foreign Equity--Class A
Corporation Inc. Government Cash Fund--Class A
P. O. Box 2052
Jersey City, NJ 07303
MLPF&S for the sole benefit of its customers Appreciation Fund--Class B
Attn: Fund Administration Appreciation Fund--Class C
4800 Deer Lake Drive East Foreign Equity Fund--Class B
Jacksonville, FL 32246 Government Fund--Class B
Government Fund--Class C
Growth & Income Fund--Class B
Growth & Income Fund--Class C
Managed Assets--Class A
Managed Assets--Class B
Managed Assets--Class C
Strategy Fund--Class A
Strategy Fund--Class B
Strategy Fund--Class C
Prudential Bank & Trust FBO Appreciation Fund--Class I
Its Defined Contribution Plan Customers 30
Scranton Office Park
Scranton, PA 18507
Salomon Smith Barney Inc. Government Fund--Class B
333 West 34th Street
New York, NY 10001
</TABLE>
31
<PAGE>
ADDITIONAL INFORMATION
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Funds and different classes of those Funds. Holders of shares of a Fund have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Fund. Shareholders of all Funds vote on the
election of Trustees. On matters affecting an individual Fund (such as approval
of an investment advisory agreement or a change in fundamental investment
policies) and on matters affecting an individual class (such as approval of
matters relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Fund or Class is required. The Trust does not hold regular
meetings of shareholders. The Trustees will call a meeting when at least 10% of
the outstanding shares so request in writing. If the Trustees fail to call a
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability, which is considered remote, is limited
to circumstances in which the Trust itself would be unable to meet its
obligations.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, NY 10036,
serves as the independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York, One Wall Street, New York, NY 10286 serves as custodian
of the Trust's assets.
Phoenix Equity Planning Corporation ("PEPCO"), 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, CT 06083-2200, serves as Transfer Agent for the Fund.
PEPCO receives a fee equivalent to $13.50 for each shareholder account, plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents are paid a fee by the Transfer Agent. State Street Bank and Trust Company
serves as subtransfer agent pursuant to a Subtransfer Agency Agreement.
REPORT TO SHAREHOLDERS
The fiscal year of the Trust ends on December 31. The Trust will send
financial statements to its shareholders at least semiannually. An Annual Report
containing financial statements audited by the Trust's independent accountants
will be sent to shareholders each year, and is available without charge upon
request. FINANCIAL STATEMENTS
The Financial Statements for the Fund's fiscal year ended December 31, 1999
and June 30, 2000, appearing in the Fund's 1999 Annual Report and June 30, 2000
Semiannual Report to Shareholders, are incorporated herein by reference.
32
<PAGE>
APPENDIX
CORPORATE BOND RATINGS
DESCRIPTION OF MOODY'S CORPORATE BOND RATINGS:
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
gilt-edge. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
DESCRIPTION OF S&P CORPORATE BOND RATINGS:
AAA Bonds rated AAA have the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA Bonds rated AA have a strong capacity to pay interest and repay principal
and differ from the highest rated issues only in small degrees.
A Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB, B, CCC Bonds rated BB, B or CCC are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CCC a higher degree of speculation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse conditions.
Bonds rated BBB or lower by S&P and Bonds rated Baa or less by Moody's
(non-investment grade securities) are considered to be speculative in nature.
Non-investment grade securities will generally be less sensitive to interest
rate changes than investment grade securities (those rated A or higher by S&P
and BBB or higher by Moody's) but will be more sensitive to adverse economic
changes or specific corporate developments. The liquidity risk of non-investment
grade securities will be higher than investment grade securities and their value
will be more difficult to ascertain due to the lack of an established secondary
market. These securities may also be adversely affected by new laws or proposed
new laws on the high yield market (e.g., tax proposals).
COMMERCIAL PAPER RATINGS
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS:
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of
33
<PAGE>
earnings over a period of ten years; (7) financial strength of a parent company
and the relationships which exist with the issuer; and (8) recognition by the
management of obligations which may be present or may arise as a result of
public interest questions and preparations to meet obligations. Description of
S&P's Commercial Paper Ratings:
Commercial paper rated A-1 by S&P has the following characteristics:
Liquidity ratios are adequate to meet cash requirements: long-term senior debt
is rated A or better, the issuer has access to at least two additional channels
of borrowing; and basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the issuer's industry is
well established and the issuer has a strong position in the industry. The
reliability and quality of management are unquestioned. Relative strength or
weakness of the above factors determines whether the issuer's commercial paper
is rated A-1, A-2 or A-3.
34
<PAGE>
[VERSION B]
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Investment Risk and Return Summary................... 1
Fund Expenses........................................ 4
Additional Investment Techniques..................... 6
Management of the Fund............................... 6
Pricing of Fund Shares............................... 7
How to Buy Shares.................................... 8
How to Sell Shares................................... 10
Things You Should Know When Selling Shares........... 10
Account Policies..................................... 12
Investor Services.................................... 12
Distributions and Taxes.............................. 12
Financial Highlights................................. 13
Additional Information............................... 16
[triangle] Phoenix-
Zweig
Government
Cash Fund
Class M
Shares
<PAGE>
PHOENIX-ZWEIG GOVERNMENT CASH FUND
THIS PROSPECTUS DESCRIBES CLASS M SHARES OF PHOENIX-ZWEIG GOVERNMENT CASH FUND.
Refer to the Phoenix-Zweig Trust Prospectus for information on Class A, Class B,
Class C or Class I Shares.
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Zweig Government Cash Fund (the "fund"), one of seven different funds,
or series, of Phoenix-Zweig Trust (the "Trust"), has an investment objective of
seeking high current income consistent with maintaining liquidity and preserving
capital. There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> The fund seeks to maintain a stable $1.00 per share price.
> The fund invests exclusively in the following instruments:
o short-term securities issued or guaranteed as to payment of
principal and interest by the U.S. Government, its agencies or
instrumentalities; and
o repurchase agreements collateralized by such securities.
U.S. Government securities are considered to be of the highest credit
quality, yet the primary consideration in choosing among these
securities is managing risk related to changes in interest rate levels.
> Money market instruments selected for investment have remaining
maturities of less than 397 days and have an average weighted portfolio
maturity of not greater than 90 days.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
Phoenix-Zweig Government Cash Fund 1
<PAGE>
PRINCIPAL RISKS
GENERAL
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.
Neither the fund nor the adviser can assure you that a particular yield, return
or level of income will be achieved. Changing market conditions, the relatively
short maturities of fund investments and substantial redemptions may all
negatively affect the fund.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. A security's short-term investment rating may decline,
increasing the chances that the issuer will be unable to make such payments when
due. This may reduce the fund's stream of income and decrease the fund's yield.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall.
REPURCHASE AGREEMENTS
If a seller of a repurchase agreement defaults and does not repurchase the
underlying securities, the fund may incur a loss if the value of the underlying
securities declines. Disposition costs may be incurred in connection with
liquidating the underlying securities. If the seller enters into bankruptcy, the
fund may never receive the purchase price or it may be delayed or limited.
U.S. GOVERNMENT SECURITIES
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee or insure principal and
interest will be timely paid to holders of the securities. The entities do not
guarantee that the value of fund shares will remain at $1.00 or that the fund
will realize a particular yield.
2 Phoenix-Zweig Government Cash Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Zweig Government Cash Fund. The bar chart shows changes in the
fund's Class M Shares performance from year to year over a 10-year period.(1)
The table shows the fund's average annual returns over the life of the fund. The
fund's past performance is not necessarily an indication of how the fund will
perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1990 7.5
1991 5.6
1992 3.4
1993 2.9
1994 3.7
1995 5.3
1996 5.1
1997 5.2
1998 5.2
1999 4.8
(1) During the 10-year period shown in the chart above, the highest return for a
quarter was 1.86% (quarter ending September 30, 1990) and the lowest return for
a quarter was 0.69% (quarter ending March 31, 1993). Year-to-date performance
(through September 30, 2000) was 4.34%.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Life of the
(for the periods ending 12/31/99)(1) One Year Five Years Ten Years Fund(2)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class M Shares(3) 4.77% 5.11% 4.86% --
------------------------------------------------------------------------------------------------------------
Class A Shares 4.52% 4.86% -- 4.74%
------------------------------------------------------------------------------------------------------------
Class B Shares -0.20% -- -- 3.36%
------------------------------------------------------------------------------------------------------------
Class C Shares 4.52% 4.86% -- 4.74%
------------------------------------------------------------------------------------------------------------
Class I Shares 4.83% -- -- 5.11%
------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect a full
redemption in the fund's Class B and Class C Shares.
(2) Class A and Class C Shares since May 1, 1994, Class B Shares since April 8,
1996, and Class I Shares since November 1, 1996.
(3) Phoenix/Zweig Advisers LLC assumed responsibility for managing the fund on
September 1, 1989.
The fund's 7-day yield on December 31, 1999 was 5.29% for Class M Shares.
Phoenix-Zweig Government Cash Fund 3
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS M CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES SHARES
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases
(as a percentage of offering price) None None None None None
Maximum Deferred Sales Charge (load) (as a None None 5%(b) 1.25%(c) None
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None None
Redemption Fee None None None None None
Exchange Fee None None None None None
---------------------------------------------------------------
CLASS M CLASS A CLASS B CLASS C CLASS I
SHARES SHARES SHARES SHARES SHARES
------ ------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees(d) 0.06% 0.30% 1.00% 0.30% None
Other Expenses 0.10% 0.29% 1.01% 0.55% 0.17%
---- ---- ---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(A) 0.66% 1.09% 2.51% 1.35% 0.67%
==== ==== ==== ==== ====
-----------------------
</TABLE>
(a) The adviser has agreed to reimburse through April 30, 2001 the Phoenix-Zweig
Government Cash Fund's expenses, excluding taxes, interest, brokerage
commissions, Rule 12b-1 fees and extraordinary expenses, to the extent that such
expenses exceed 0.35% for each Class of Shares. The Management Fees with
reimbursement were 0.25% for Class M Shares, and 0.00% for Class A, Class B,
Class C, and Class I Shares. Other Expenses with reimbursement were 0.10% for
Class M Shares and 0.35% for Class A, Class B, Class C, and Class I Shares. The
Total Annual Fund Operating Expenses after expense reimbursement were 0.41% for
Class M Shares, 0.65% for Class A and C Shares, 1.35% for Class B Shares, and
0.35% for Class I Shares.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 3% during the
third and fourth years and to 0% after the sixth year.
(c) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(d) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
4 Phoenix-Zweig Government Cash Fund
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after seven years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class M $67 $211 $368 $822
-----------------------------------------------------------------------------------------------------------------
Class A $111 $347 $601 $1,329
-----------------------------------------------------------------------------------------------------------------
Class B $654 $1,082 $1,435 $2,329
-----------------------------------------------------------------------------------------------------------------
Class C $262 $428 $739 $1,624
-----------------------------------------------------------------------------------------------------------------
Class I $68 $214 $373 $835
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $254 $782 $1,335 $2,329
-----------------------------------------------------------------------------------------------------------------
Class C $137 $428 $739 $1,624
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
Phoenix-Zweig Government Cash Fund 5
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
BORROWING
Each fund may obtain fixed interest rate loans and invest the loan proceeds in
other assets. If the securities purchased with such borrowed money decrease in
value or do not increase enough to cover interest and other borrowing costs, the
funds will suffer greater losses than if no borrowing took place.
COLLATERALIZED MORTGAGE OBLIGATIONS
The fund may investment in collateralized mortgage obligations (CMOs). Early
payoffs on the underlying loans may result in the fund receiving less income
than originally anticipated. The variability in prepayments tends to limit price
gains when interest rates drop and exaggerate price declines when interest rates
rise. In the event of high prepayments, the fund may be required to invest the
proceeds at lower interest rates, causing the fund to earn less than if the
prepayments had not occurred.
ILLIQUID SECURITIES
The fund may invest in illiquid securities. Illiquid and restricted securities
may be difficult to sell or may be sold only pursuant to certain legal
restrictions. Difficulty in selling securities may result in a loss to the fund
or entail expenses not normally associated with the sale of a security.
SECURITIES LENDING
Each fund may loan portfolio securities to increase investment returns. If the
borrower is unwilling or unable to return the borrowed securities when due, the
fund can suffer losses.
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISERS
Phoenix/Zweig Advisers LLC ("Phoenix/Zweig") (formerly Zweig/Glaser Advisers
LLC) is the investment adviser for the fund and is located at 900 Third Avenue,
New York, NY 10022. As of December 31, 1999, Phoenix/Zweig was managing twelve
funds with net assets of approximately $1.8 billion and acting as adviser to two
closed-end funds with more than $1.4 billion in assets. Phoenix/Zweig has been
managing funds since 1986.
Phoenix/Zweig is a wholly-owned subsidiary of Phoenix Investment Partners, Ltd.
("PXP"), a Delaware corporation, located at 56 Prospect Street, Hartford, CT
06115. PXP is a publicly-traded independent registered investment advisory firm,
and has served investors for over 70 years. As of December 31, 1999, PXP had
over $64.6 billion in assets under management.
6 Phoenix-Zweig Government Cash Fund
<PAGE>
Subject to the direction of the Trust's Board of Trustees, Phoenix/Zweig is
responsible for managing the fund's investment program, selecting specific
securities for the fund, and maintaining the general operations of the fund.
Phoenix/Zweig manages the fund's assets to conform with the investment policies
as described in this prospectus.
The fund pays Phoenix/Zweig a monthly investment management fee that is accrued
daily against the value of the fund's net assets at the annual rate of 0.50%.
Zweig Consulting LLC ("Zweig Consulting"), a New York limited liability company,
acts as the investment subadviser for all the funds of the Phoenix-Zweig Trust
and is located at 900 Third Avenue, New York, NY 10022. Dr. Martin E. Zweig
serves as President of Zweig Consulting and as President of the fund.
Phoenix/Zweig pays Zweig Consulting a subadvisory fee of approximately
$2,500,000 per annum allocated monthly for acting as subadviser to all of the
funds of the Phoenix-Zweig Trust and the Phoenix-Euclid Funds.
During the fund's last fiscal year, the fund paid total management fees of
$15,198,917.
The adviser has voluntarily agreed to assume operating expenses of the
Government Cash Fund (excluding interest, taxes, brokerage commissions, 12b-1
fees, and extraordinary expenses) until April 30, 2001 to the extent that such
expenses exceed 0.35% of the average annual net assets of that fund.
PORTFOLIO MANAGEMENT
Beth Abraham has served as portfolio manager for the fund and as an Assistant
Vice President of the Trust since 1995. Ms. Abraham's experience includes
consulting to the mutual fund industry and acting as a Senior Compliance
Examiner in the New York Regional Office of the Securities and Exchange
Commission.
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
The fund attempts to maintain a stable share price of $1.00. In determining the
fund's net asset value, the fund utilizes the amortized cost method of valuing
its investments whereby investments are valued initially at cost and thereafter
assume a constant amortization to maturity of any discount or premium. In
general, the net asset value is calculated by:
o adding the values of all investments and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the
fund.
Phoenix-Zweig Government Cash Fund 7
<PAGE>
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities that are deducted from the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class' net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
The net asset value per share of each class of the fund is determined as of
2:00 PM eastern time on each day the NYSE is open for trading.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to 2:00 PM
eastern time will be executed based on the net asset value as of 2:00 PM eastern
time. Those received after 2:00 PM eastern time, will be executed based on the
net asset value as of 2:00 PM eastern time on the next business day.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
The fund presently offers five classes of shares. Each class of shares has
different sales and distribution charges (see "Fund Expenses" previously in this
prospectus). The fund has adopted distribution and service plans allowed under
Rule 12b-1 of the Investment Company Act of 1940 that authorize the fund to pay
distribution and service fees for the sale of its shares and for services
provided to shareholders. Because distribution and service fees are paid out of
the fund's assets on an ongoing basis, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
charges.
THIS PROSPECTUS DESCRIBES ONLY CLASS M SHARES OF PHOENIX-ZWEIG GOVERNMENT CASH
FUND. Other classes of shares are described in a separate prospectus.
8 Phoenix-Zweig Government Cash Fund
<PAGE>
Class M Shares of the fund are sold at net asset value without a sales charge.
Minimum INITIAL investments:
o $10,000.
o $1,000 for service organizations whose clients have made aggregate
minimum purchases of $1,000,000.
Minimum ADDITIONAL investments:
o There is no minimum for additional investments.
The Fund reserves the right to refuse a purchase order for any reason.
Purchase orders received by the transfer agent by 2:00 PM eastern time become
effective and earn dividends that day, provided that payment is received in
Federal funds by 4:00 PM eastern time. Purchase orders received by the transfer
agent after 2:00 PM eastern time will begin to accrue dividends on the next
business day.
THESE MINIMUMS DO NOT APPLY TO CLASS A, CLASS B, CLASS C, OR CLASS I SHARES.
<TABLE>
<CAPTION>
----------------------------------- ----------------------------------------------------------------------------
TO OPEN AN ACCOUNT
(CLASS M SHARES ONLY)
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimum investments or limitations on buying shares.
----------------------------------- ----------------------------------------------------------------------------
Through Sweep Programs Customers of participating securities dealers and banks through which
purchases and sales are made with the dealers and banks as agents. Call us
at (800) 243-1574.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, ATTN: Phoenix-Zweig Government Cash
Fund, P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix-Zweig
Government Cash Fund, 66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574.
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
ATTN: Phoenix-Zweig Government Cash Fund, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
Phoenix-Zweig Government Cash Fund 9
<PAGE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. Subject to certain restrictions, shares may be redeemed by
telephone or in writing. In addition, shares may be sold through securities
dealers, brokers or agents who may charge customary commissions or fees for
their services. The fund does not charge any redemption fees on Class M Shares.
Payment for shares redeemed is made within seven days; however, redemption
proceeds will not be disbursed until each check used for purchases of shares has
been cleared for payment by your bank, which may take up to 15 days after
receipt of the check.
<TABLE>
<CAPTION>
------------------------------------ -----------------------------------------------------------------------------
TO SELL SHARES
(CLASS M SHARES ONLY)
------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
------------------------------------ -----------------------------------------------------------------------------
Through Sweep Programs Call us at (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction, with signature guarantees, and any share
certificates (if you hold certificate shares) to: State Street Bank, ATTN:
Phoenix-Zweig Government Cash Fund, P.O. Box 8301, Boston, MA 02266-8301. Be
sure to include the registered owner's name, fund and account number, and
number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if
you hold certificate shares) to: Boston Financial Data Services, Attn:
Phoenix-Zweig Government Cash Fund, 66 Brooks Drive, Braintree, MA 02184.
Be sure to include the registered owner's name, fund and account number,
and number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
By check Call us at (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by anyone but the shareholder(s)
of record. Transfers between broker-dealer "street" accounts are governed by the
accepting broker-dealer. Questions regarding this type of transfer should be
directed to your financial advisor. Redemption requests will not be honored
until all required documents in proper form have been received. To avoid delay
in redemption or transfer, shareholders having questions about specific
requirements should contact the fund's Transfer Agent at (800) 243-1574.
10 Phoenix-Zweig Government Cash Fund
<PAGE>
REDEMPTIONS BY MAIL
Send a clear letter of instructions with a signature guarantee and any
applicable certificates.
If you are selling shares held in a corporate or fiduciary account, please
contact the fund's Transfer Agent at (800) 243-1574.
The signature on your request must be guaranteed by an eligible guarantor
institution as defined by the fund's Transfer Agent in accordance with its
signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
REDEMPTIONS BY CHECK
You may establish a Check Service with State Street Bank and Trust Company.
Checks must be in amounts of $500 or more. To obtain redemption checks, complete
an application form which can be obtained by calling us at (800) 243-1574. When
a check is presented for payment, State Street will redeem full and fractional
shares in your account to cover the amount of the check. State Street will not
honor a check for less than $500 or for an amount exceeding the value of your
account at the time the check is presented. We reserve the right to impose a
service charge for check redemptions, stop payment orders and returned checks.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The maximum amount that may be redeemed by telephone is $50,000. The Transfer
Agent will redeem shares and mail proceeds to shareholders on the same day for
telephone redemptions received prior to 2:00 PM eastern time. Those received
after 2:00 PM eastern time will be processed the next business day.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
AUTOMATICALLY THROUGH SWEEP PROGRAMS
Customers of participating securities dealers and banks may participate in sweep
programs by which an account with the dealer or bank is coordinated with an
account in the fund. Purchases and sales are made by the participating
securities dealer or bank as agent of their customer. For further information
about the sweep program, see the Statement of Additional Information or call us
at (800) 243-1574.
Phoenix-Zweig Government Cash Fund 11
<PAGE>
ACCOUNT POLICIES
--------------------------------------------------------------------------------
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $10,000, you may receive a notice requesting you to bring the balance
up to $10,000 within 60 days. If you do not, the shares in the account will be
sold at net asset value, and a check will be mailed to the address of record.
INVESTOR SERVICES
--------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $10,000.
DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
The fund declares dividends of all its net investment income and short-term
capital gains and losses at 2:00 PM eastern time on each day the NYSE is open
for trading. Distributions are reinvested at net asset value on the last
business day of each month unless a shareholder elects to receive them in cash.
Distributions of income and short-term capital gains are taxable to shareholders
as ordinary income, whether taken in cash or reinvested. (The fund does not
expect to realize any long-term capital gains.) All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
12 Phoenix-Zweig Government Cash Fund
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the fund's financial
performance over a five-year period. Certain information reflects financial
results for a single fund share. The total returns in the table represent the
rate that an investor would have earned or lost on an investment in the fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, independent accountants. Their
report, together with the fund's financial statements, are included in the
fund's most recent Annual Report, which is available upon request.
<TABLE>
<CAPTION>
CLASS M
-------------------------------------------------------------------------
SIX MONTHS
ENDED
8/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.05 0.05
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.05 0.05 0.05 0.05 0.05
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------ ------
Change in net asset value -- -- -- -- -- --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ======
Total return(1) 2.77%(3) 4.77% 5.16% 5.22% 5.09% 5.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $182,525 $146,314 $75,264 $56,599 $45,271 $48,515
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2) 0.41%(4) 0.41% 0.41% 0.41% 0.40% 0.64%
Net investment income 5.63%(4) 4.71% 5.01% 5.09% 4.98% 5.20%
-----------------------------
</TABLE>
(1) Maximum sales charge is not reflected in total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.66%, 0.69%,
0.73%, 0.72% and 0.74% for the periods ended December 31, 1999, 1998, 1997, 1996
and 1995, respectively.
(3) Not annualized.
(4) Annualized.
Phoenix-Zweig Government Cash Fund 13
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED
8/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
------ ----- ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.04 0.05 0.05 0.05 0.05
------ ----- ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------ ----- ------ ------ ------ ------
Change in net asset value -- -- -- -- -- --
------ ----- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ====== ====== ====== ====== ======
Total return(1) 2.65%(3) 4.52% 4.91% 4.97% 4.83% 5.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,705 $6,110 $8,290 $2,472 $3,360 $3,661
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.65%(2) 0.65% 0.65% 0.65% 0.65% 0.87%
Net investment income 5.46%(2) 4.41% 4.75% 4.85% 4.73% 4.97%
CLASS B
---------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
8/30/00 YEAR ENDED DECEMBER 31 4/8/96 TO
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ------ ------ ------ -----------
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04 0.04 0.04 0.03
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.02 0.04 0.04 0.04 0.03
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) (0.04) (0.04) (0.04) (0.03)
------ ------ ------ ------ ------
Change in net asset value -- -- -- -- --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
Total return(1) 2.30%(3) 3.80% 4.18% 4.24% 3.03%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,248 $4,650 $1,738 $336 $33
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 1.35%(2) 1.35% 1.35% 1.35% 1.35%(2)
Net investment income 4.69%(2) 3.80% 3.97% 4.15% 4.03%(2)
--------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.09%, 1.30%,
1.74%, 1.31% and 1.34% for the periods ended December 31, 1999, 1998, 1997, 1996
and 1995, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.51%, 3.70%,
7.49% and 1.95% for the periods ended December 31, 1999, 1998, 1997 and 1996,
respectively.
14 Phoenix-Zweig Government Cash Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------------
SIX MONTHS
ENDED
8/30/00 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.04 0.05 0.05 0.05 0.05
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------ ------
Change in net asset value -- -- -- -- -- --
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ======
Total return(1) 2.65%(3) 4.52% 4.91% 4.97% 4.83% 5.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,562 $5,982 $6,624 $2,661 $4,535 $4,458
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 0.65%(2) 0.65% 0.65% 0.65% 0.65% 0.87%
Net investment income 5.37%(2) 4.43% 4.73% 4.85% 4.73% 4.97%
CLASS I
--------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
8/30/00 YEAR ENDED DECEMBER 31 11/1/96
(UNAUDITED) 1999 1998 1997 12/31/96
----------- ------ ------ ------ --------
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.01
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.05 0.05 0.05 0.01
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) (0.05) (0.05) (0.05) (0.01)
----- ----- ----- ----- -----
Change in net asset value -- -- -- -- --
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
Total return(1) 2.80%(3) 4.83% 5.23% 5.28% 0.80%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,415 $2,146 $2,884 $100 $1,401
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 0.35%(2) 0.35% 0.35% 0.35% 0.35%(2)
Net investment income 5.74%(2) 4.73% 5.15% 5.15% 5.03%(2)
---------------------------------
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.35%, 1.38%,
1.65%, 1.25% and 1.15% for the periods ended December 31, 1999, 1998, 1997, 1996
and 1995, respectively.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.67%, 1.47%,
0.82% and 0.73% for the periods ended December 31, 1999, 1998, 1997 and 1996,
respectively.
Phoenix-Zweig Government Cash Fund 15
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
Statement of Additional Information
The fund has filed a Statement of Additional Information, dated December 15,
2000 with the Securities and Exchange Commission. The Statement contains more
detailed information about the fund. It is incorporated into this prospectus by
reference and is legally part of the prospectus. You may obtain a free copy of
the Statement:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200, or
o by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
o through its internet site (http://www.sec.gov),
o by visiting its Public Reference Room in Washington, DC,
o by writing to its Public Reference Section, Washington, DC 20549-0102
(a fee may be charged), or
o by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
Shareholder Reports
The Trust semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The Trust's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the Trust's performance from January 1 through December
31. You may request a free copy of the Trust's Annual and Semiannual Reports:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200, or
o by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<TABLE>
<CAPTION>
<S> <C>
SEC File Nos. 2-93538 and 811-04116 C Printed on recycled paper using soybean ink
</TABLE>
16 Phoenix-Zweig Government Cash Fund
<PAGE>
[Version B]
PHOENIX-ZWEIG TRUST
PHOENIX-ZWEIG GOVERNMENT CASH FUND
CLASS M SHARES
900 Third Avenue, 31st Floor
New York, New York 10022
STATEMENT OF ADDITIONAL INFORMATION
December 15, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix-Zweig Government Cash Fund (the "Fund"), dated December 15, 2000, which
describes the Class M Shares of the Fund, and should be read in conjunction with
it. This Statement of Additional Information describes the Class M Shares of the
Fund only. Class M Shares currently have no exchange feature, and may not be
exchanged for Class A, Class B, Class C or Class I Shares of the Fund, or shares
of any other fund of the Phoenix-Zweig Trust (the "Trust") or any other
Affiliated Phoenix Fund. The Fund's Prospectus may be obtained by calling
Phoenix Equity Planning Corporation ("Equity Planning") at (800) 243-1574 or by
writing to Equity Planning at 100 Bright Meadow Boulevard, P.O. Box 2200,
Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
The Trust .................................................................. 1
Investment Restrictions .................................................... 1
Investment Techniques and Risks ............................................ 2
Performance Information..................................................... 2
Performance Comparisons .................................................... 3
Services of the Advisers ................................................... 3
Determination of Net Asset Value ........................................... 4
How to Buy and Sell Shares ................................................. 5
Tax Sheltered Retirement Plans ............................................. 6
The Distributor and Distributions Plans .................................... 6
Management of the Trust .................................................... 8
Additional Information ..................................................... 12
Customer Service and Marketing: (800) 243-1574
Telephone Orders: (800) 243-1574
PXP1203 (12/00)
<PAGE>
THE TRUST
The Trust is an open-end management investment company which was organized in
1984 as a Massachusetts business trust, then reorganized as a Delaware business
trust in 1996.
The Fund's Prospectus describes the investment objectives of the
Phoenix-Zweig Government Cash Fund (the "Fund"), and summarizes the investment
policies and investment techniques the Fund will employ in seeking to achieve
its investment objective. The following discussion supplements the description
of the Fund's investment policies and investment techniques in the Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to the Fund. Except as otherwise stated, these investment restrictions
are "fundamental" policies. A "fundamental" policy is defined in the 1940 Act to
mean that the restriction cannot be changed without the vote of a "majority of
the outstanding voting securities" of the Fund. A majority of the outstanding
voting securities is defined in the 1940 Act as the lesser of (a) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities. However, these policies may
be modified by the Trustees, in their discretion, without shareholder approval,
to the extent necessary to facilitate the implementation of a master-feeder
structure for any or all of the Funds (i.e., a structure under which a
particular Fund acts as a feeder and invests all of its assets in a single
pooled master fund with substantially the same investment objectives and
policies).
The Fund may not:
(1) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would, at the
time, cause more than 5% of the Fund's total assets taken at market value to be
invested in the securities of such issuer; or (b) such purchase would, at the
time, result in more than 10% of the outstanding voting securities of such
issuer being held by the Fund.
(2) Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government or its agencies or instrumentalities).
(3) Borrow money, except (i) in amounts not to exceed one third of the
value of the Fund's total assets (including the amount borrowed) from banks, and
(ii) up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by a SEC exemptive orders or staff interpretations shall not be deemed
to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the Fund may
be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the Fund
may purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied to the
value of a financial index or a financial instrument or other asset (including,
but not limited to, securities indexes, interest rates, securities, currencies
and physical commodities).
(8) Make loans, except that the Fund may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv)
participate in an interfund lending program with other registered investment
companies.
If any percentage restriction described above for the Fund is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Fund's assets will not constitute a
violation of the restriction.
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INVESTMENT TECHNIQUES AND RISKS
The Fund may utilize the following practices or Techniques in pursuing its
investment objectives.
REPURCHASE AGREEMENTS
Repurchase agreements involve purchases of securities by the Fund. In such a
transaction, at the time the Fund purchases the security, it simultaneously
agrees to resell and redeliver the security to the seller who also
simultaneously agrees to buy back the security at a fixed price and time. This
assumes a predetermined yield for the Fund during its holding period, since the
resale price is always greater than the purchase price and reflects an
agreed-upon market rate. Such transactions afford an opportunity for the Fund to
invest temporarily available cash. Repurchase agreements may be considered loans
to the seller collateralized by the underlying securities. The risk to the Fund
is limited to the ability of the seller to pay the agreed-upon sum on the
repurchase date; in the event of default, the repurchase agreement provides that
the Fund is entitled to sell the underlying collateral. If the value of the
collateral declines after the agreement is entered into, however, and if the
seller defaults under a repurchase agreement when the value of the underlying
collateral is less than the repurchase price, the Fund could incur a loss of
both principal and interest. The Adviser monitors the value of the collateral at
the time the transaction is entered into and at all times subsequent during the
term of the repurchase agreement in an effort to determine that the value of the
collateral always equals or exceeds the agreed-upon repurchase price to be paid
to the Fund. If the seller were to be subject to a federal bankruptcy
proceeding, the ability of the Fund to liquidate the collateral could be delayed
or impaired because of certain provisions of the bankruptcy laws. The Fund
intends to invest more than 20% of its assets in repurchase agreements only with
respect to obligations of the U.S. Government, its agencies or instrumentalities
and only with member banks of the Federal Reserve System or primary dealers in
U.S. Government securities. The Fund's repurchase agreements must be fully
backed by collateral (U.S. Government securities) that is marked to market, or
priced, each day.
U.S. TREASURY ISSUES
The Fund may invest in U.S. Treasury issues, such as bills, certificates of
indebtedness, notes and bonds, and issues of U.S. Government agencies and
instrumentalities which are established under the authority of an act of
Congress, such as the Bank for Cooperatives, Export-Import Bank of the U.S.,
Farmers Home Administration, Federal Financing Bank, Federal Home Loan Banks,
Federal Home Loan Mortgage Corp., Federal Housing Administration, Federal
Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association, Government National Mortgage Association (GNMA), Resolution Funding
Corp., Student Loan Marketing Association, Tennessee Valley Authority and the
U.S. Postal Service. Some of these securities, such as Federal Housing
Administration debenture obligations, are supported by the full faith and credit
of the U.S. Treasury; others, such as obligations of Federal Home Loan Banks,
are supported by the right of the issuer to borrow from the U.S. Treasury;
others, such as those of the Federal National Mortgage Association, are
supported by the discretionary authority of the U.S. Government to purchase the
agency's obligations; and still others, such as those of the Student Loan
Marketing Association, are supported only by the credit of the instrumentality.
The Fund will not invest in obligations of the International Bank for
Reconstruction and Development (the World Bank), the Asian Development Bank, or
the Inter-American Development Bank, or in FHA or VA pooled mortgages.
PERFORMANCE INFORMATION
From time to time, the Trust determines a current yield and effective yield
for each class of shares of the Fund. For a further discussion of how the Trust
calculates yield, see "Pricing of Fund Shares" in the Prospectus.
The effective yield is an annualized yield based on a compounding of the
unannualized base period return. The effective yield will be slightly higher
than the yield or seven-day current yield because of the compounding effect of
the assumed reinvestment.
These yields are each computed in accordance with a standard method
prescribed by the rules of the Commission, by first determining the net change
in account value for a hypothetical account having a share balance of one share
at the beginning of a seven-day period (the "beginning account value"). The net
change in account value equals the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares. The unannualized base period return equals
the net change in account value divided by the beginning account value. Realized
gains or losses or changes in unrealized appreciation or depreciation are not
taken into account in determining the net change in account value.
The yields are then calculated as follows:
Net Change in Account Value 365
Current Yield = --------------------------- X -----
Beginning Account Value 7
365
Effective Yield = [(1 + Base Period Return) -----]-1
7
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For the seven days ended December 31, 1999, the Fund's current and effective
(compounded) yields were 5.29% and 5.40%, respectively, for Class M Shares;
5.06% and 5.16%, respectively, for Class A Shares; 4.36% and 4.44%,
respectively, for Class B Shares; 5.06% and 5.16%, respectively, for Class C
Shares; and 5.36% and 5.48%, respectively, for Class I Shares.
Yield is a function of portfolio quality and composition, portfolio maturity
and operating expenses. Yields fluctuate and do not necessarily indicate future
results. While yield information may be useful in reviewing the performance of
the Fund, it may not provide a basis for comparison with bank deposits, other
fixed rate investments or other investment companies that may use a different
method of calculating yield.
The investment results of the Class M, Class A, Class B, Class C and Class I
Shares of the Fund will tend to fluctuate over time, so that historical yields,
current distributions and total returns should not be considered representations
of what an investment may earn in any future period. Actual dividends will tend
to reflect changes in market yields, and will also depend upon the level of a
Class or the Fund's expenses, realized or unrealized investment gains and
losses, and the results of the Fund's investment policies. Thus, at any point in
time, investment yields, current distributions or total returns may be either
higher or lower than past results, and there is no assurance that any historical
performance record will continue.
PERFORMANCE COMPARISONS
The Trust, a Fund or Class of a Fund may, from time to time, include in
advertisements containing total return the ranking of those performance figures
relative to such figures for groups of mutual funds having similar investment
objectives as categorized by ranking services such as Lipper Analytical
Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial
Services, Inc., and rating services such as Morningstar, Inc. Additionally, the
Trust or a Fund may compare its performance results to other investment or
savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Stanger's Mutual Fund Monitor, The Stanger
Register, Stanger's Investment Adviser, The Wall Street Journal, New York Times,
Consumer Reports, Registered Representative, Financial Planning, Financial
Services Weekly, Financial World, U.S. News and World Report, Standard and
Poor's The Outlook, Investor's Daily and Personal Investor. The total return may
be used to compare the performance of a Fund against certain widely acknowledged
outside standards or indices for stock and bond market performance, such as the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), Dow Jones
Industrial Average, Consumer Price Index, Lehman Brothers Corporate Index and
Lehman Brothers T-Bond Index. The S&P 500 is a commonly quoted measure of stock
market performance and represents common stocks of companies of varying sizes
segmented across 90 different industries which are listed on the New York Stock
Exchange, the American Stock Exchange and traded over the NASDAQ National Market
System.
SERVICES OF THE ADVISERS
Phoenix/Zweig Advisers LLC ("Phoenix/Zweig") (formerly Zweig/Glaser Advisers
LLC) is the investment adviser to the Fund and is located at 900 Third Avenue,
New York, NY 10022. As of December 31, 1999, Phoenix/Zweig was managing twelve
funds with net assets of approximately $1.8 billion and two closed-end funds
with assets in excess of $1.4 billion. Phoenix/Zweig has been managing funds
since September 1989.
Phoenix/Zweig is a wholly-owned subsidiary of Phoenix Investment Partners,
Ltd. (`PXP"), a Delaware corporation, located at 56 Prospect St., Hartford, CT
06115. PXP is a publicly-traded independent registered investment advisory firm
and has served investors for over 70 years. As of December 31, 1998, PXP had
approximately $64.6 billion in assets under management through its investment
partners: Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen, London, Singapore
and Fort Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in
Chicago; Roger Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca
Capital Management LLC (Seneca) in San Francisco, Phoenix/Zweig in New York; and
Phoenix Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in
Hartford, CT, Sarasota, FL, and Scotts Valley, CA, respectively.
Overall responsibility for the management and supervision of the Trust and
the Fund rests with the Trustees of the Phoenix-Zweig Trust (the "Trustees").
Phoenix/Zweig's services under its Management Agreement are subject to the
direction of the Trustees.
The Management Agreement will continue in effect for two years if
specifically approved annually by a majority of the Board of Trustees who are
not parties to such contract or interested persons of any such party. The
Management Agreement may be terminated without penalty by either of the parties
on 60 days' written notice and must terminate in the event of its assignment.
The Management Agreement was last approved by the Trustees on January 12, 1999
and by the shareholders on February 25, 1999.
The Management Agreement provides that the Adviser is liable only for its
acts or omissions caused by its willful misfeasance, bad faith, or gross
negligence in the performance of its duties or reckless disregard of its
obligations under the Management Agreement. The Management Agreement permits the
Adviser to render services to others and to engage in other activities.
Pursuant to the Management Agreement, the Adviser: (a) supervises and assists
in the management of the assets of the Fund, furnishes the Fund with research,
statistical and advisory services and provides regular reports to the Trustees;
(b) provides advice
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and assistance with the operations of the Trust, compliance support, preparation
of the Trust's registration statements, proxy materials and other documents and
advice and assistance of the Adviser's General Counsel; (c) makes investment
decisions for the Trust; (d) ensures that investments follow the investment
objective, strategies, and policies of the Fund and comply with government
regulations; (e) selects brokers and dealers to execute transactions for the
Fund; and (f) furnishes office facilities, personnel necessary to provide
advisory services to the Fund, personnel to serve without salaries as officers
or agents of the Trust and compensation and expenses of any Trustees who are
also full-time employees of the Adviser or any of its affiliates.
The Fund's Subadviser is Zweig Consulting, LLC ("Zweig"). Its principal
offices are located at 900 Third Ave., New York, NY 10022. Zweig's services
under the Servicing Agreement are subject to the direction of both the Trustees
and Phoenix/Zweig. Under a Servicing Agreement with Phoenix/Zweig, Zweig's
duties to the Fund include promoting the interests of the Trust and research and
analysis.
In managing the assets of the Fund, the Adviser furnishes continuously an
investment program for the Fund consistent with the investment objectives and
policies of the Fund. More specifically, the Adviser determines from time to
time what securities shall be purchased for the Fund and what securities shall
be held or sold by the Fund. The Subadviser provides information that assists
the Adviser in determining dollar-weighted average portfolio maturity. Both the
Subadviser and Adviser are subject always to the provisions of the Trust's
Agreement and Declaration of Trust, By-Laws and its registration statement under
the 1940 Act and under the 1933 Act covering the Trust's shares, as filed with
the SEC, and to the investment objectives, policies and restrictions of the
Fund, as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Trustees of the Trust may from
time to time establish. To carry out such determinations, the Adviser places
order for the investment and reinvestment of the Fund's assets.
The Trust pays the Adviser for its services pursuant to the Management
Agreement a monthly fee at the annual rate of 0.50% of the average daily net
assets of the Fund.
For services to the Fund during the fiscal years ended December 31, 1997,
1998 and 1999, the Adviser received fees of $257,892, $433,374 and $827,398,
respectively.
The Adviser has voluntarily undertaken to limit the expenses of the Fund
(exclusive of taxes, interest, brokerage commissions, 12b-1 fees and
extraordinary expenses) until April 30, 2001 to 0.35% of its average daily net
assets. During the years ended December 31, 1997, 1998 and 1999, the Adviser's
reimbursements to the Fund aggregated $251,454, $296,837 and $489,015,
respectively. The Adviser reserves the right to discontinue this policy at any
time after April 30, 2001.
The Adviser may draw upon the resources of the Distributor and its qualified
affiliates in rendering its services to the Trust. The Distributor or its
affiliates may provide the Adviser (without charge to the Trust) with investment
information and recommendations that may serve as the principal basis for
investment decisions with respect to certain assets of the Trust.
The Trust, its Adviser and Subadviser, and Distributor have each adopted a
Code of Ethics pursuant to Rule 17-j1 under the Investment Company Act of 1940.
Personnel subject to the Codes of Ethics may purchase and sell securities for
their personal accounts, including securities that may be purchased, sold or
held by the Fund, subject to certain restrictions and conditions. Generally,
personal securities transactions are subject to preclearance procedures,
reporting requirements and holding period rules. The Codes also restrict
personal securities transactions in private placements, initial public offerings
and securities in which the Fund has a pending order.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of shares is determined as of
2:00 p.m. eastern time and as of the close of regular trading on the New York
Stock Exchange ("NYSE") (normally 4:00 PM eastern time) on each day that the
NYSE is open. The NYSE is closed on the following holidays (or the weekdays on
which these holidays are celebrated when they fall on a weekend): New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Board of Trustees ("the Board") has determined that it is in the best
interests of the Fund and its shareholders to seek to maintain a stable net
asset value per share, and that the appropriate method for valuing portfolio
securities is the amortized cost method, provided that such method continues to
fairly reflect the market-based net asset value per share. The Board shall
continuously review this method of valuation and make changes that may be
necessary to assure that the Fund's instruments are valued at their fair value
as determined by the Board in good faith.
The Board has determined that the Fund will comply with the conditions of
Rule 2a-7 under the Act regarding the amortized cost method of valuing portfolio
securities. Under Rule 2a-7, the Board is obligated, as a particular
responsibility within the overall duty of care owed to the Fund's shareholders,
to establish procedures reasonably designed, taking into account current market
conditions and the Fund's investment objectives, to stabilize the net asset
value per share of the Fund for purposes of distribution and redemption, at
$1.00 per share. These procedures include periodically monitoring, as the Board
deems appropriate, at such
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intervals as are reasonable in light of current market conditions, the
relationship between the net asset value per share based upon the amortized cost
method of valuation and the net asset value per share based upon available
indications of market value. The Board will consider what steps should be taken,
if any, in the event of a difference of more than 1/2 of 1% between the
amortized cost value and the market value per share. The Board will take such
steps as it considers appropriate (e.g., redemption in kind, selling portfolio
instruments prior to maturity to realize capital gains or losses, shortening the
average portfolio maturity, withholding dividends, or utilizing a net asset
value per share determined by using market quotations) to minimize any material
dilution or other unfair results that might arise from differences between the
net asset value per share based upon the amortized cost method of valuation and
the net asset value per share based upon market value.
Rule 2a-7 requires that a dollar-weighted average portfolio maturity of not
more than 90 days, appropriate to the objective of maintaining a stable net
asset value of $1.00 per share, be maintained, and precludes the purchase of any
instrument with a remaining time to maturity of more than 397 calendar days.
However, the underlying securities used as collateral for repurchase agreements
are not subject to these restrictions, because a repurchase agreement is deemed
to have a maturity equal to the period remaining until the date on which the
repurchase of the underlying securities is deemed to occur. Should the
disposition of a portfolio security result in a dollar-weighted average
portfolio maturity of more than 90 days, the Fund will invest its available cash
in a manner that will reduce such average maturity to 90 days or less as soon as
reasonably practicable. Rule 2a-7 also requires the Fund to limit its
investments to instruments that the Board determines present minimal credit
risks and that have been given one of the two highest rating categories by
nationally recognized statistical rating organizations, or, in the case of
instruments that are not so rated, are of comparable quality as determined under
procedures established by the Board.
It is the normal practice of the Fund to hold portfolio securities to
maturity and realize their par values, unless a prior sale or other disposition
thereof is mandated by redemption requirements or other extraordinary
circumstances. A debt security held to maturity is redeemable by its issuer at
its principal amount plus accrued interest. Under the amortized cost method of
valuation traditionally employed by institutions for valuation of money market
instruments, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund (computed by dividing the annualized daily income on the Fund's portfolio
by the net asset value computed as above) may tend to be higher than a similar
computation made by utilizing a method of valuation based upon market prices and
estimates. The Fund may, to a limited extent, engage in short-term trading to
attempt to take advantage of short-term market variations, or may dispose of a
portfolio security prior to its maturity if the Adviser believes such
disposition advisable, or necessary to generate cash to satisfy redemptions. In
such cases, the Fund may realize a gain or loss.
Class M Shares are entitled to dividends as declared by the Board and, on
liquidation of the Fund, are entitled to receive their share of the net assets
of the Fund. Shareholders have no preemptive rights. The Trust's fiscal year
ends on December 31.
HOW TO BUY AND SELL SHARES
Reference is made to the materials in the Prospectus under the headings "How
to Buy Shares" and "How to Redeem Shares," which describe the methods of
purchase and redemption of Fund shares. The following is additional information
related to certain of those methods. Class M Shares are not exchangeable with
any of the Phoenix-Zweig Funds or any other Affiliated Phoenix Fund.
SWEEP PROGRAMS
Class M Shares of the Fund may be purchased through certain participating
securities dealers and/or banks (Institutions) which have established sweep
programs under which cash in their customers' accounts may be automatically
invested in the Fund. The customers' rights under these programs are governed by
the provisions of the particular Institution's program and the details of the
programs vary. The description below, while generally followed, should be
considered as illustrative of how such programs work, but may not be true of a
particular program.
Typically, in these programs each participating customer, pursuant to an
agreement executed with a particular Institution, becomes the beneficial owner
of specific shares of the Fund which may be purchased, redeemed and held by the
Institution in accordance with the customer's instructions and may fully
exercise all rights as a shareholder. The participating Institution holds shares
registered in its name, as agent for the customer, on the books of the Fund. A
statement regarding the customer's shares is generally supplied to the customer
monthly, and confirmations of all transactions for the account of the customer
normally are available to the customer promptly upon request. In addition, each
customer is sent proxies, periodic reports and other information from the Trust
with regard to the shares. The customer's shares are fully assignable and may be
encumbered by the customer. The sweep agreement can be terminated by the
customer at any time, without affecting beneficial ownership of the shares. In
order to obtain the benefits of this service, a customer typically is required
to maintain a minimum balance subject to a monthly maintenance fee, or a higher
minimum balance for which no monthly fee would be imposed. In either case, a
penalty fee is imposed if the minimum is not maintained. In general, the
automatic investment in shares of the Fund occurs on the same day that
withdrawals are made from the customer's account by the participating
Institution, but there may be a greater time lag between the
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removal of funds from an account and their investment in shares of the Fund.
Depending on the particular program of the participating Institution, the
customer may or may not earn interest on the funds being swept during this lag.
All agreements which relate to the service are with the participating
Institution. Neither the Distributor nor the Fund is a party to any of those
agreements and no part of the compensation received by the participating
Institution flows to the Fund or to the Distributor or to any of their
affiliates either directly or indirectly. Information concerning those programs
and any related charges or fees is provided by the particular Institution prior
to purchases of the Class M Shares. Any fees charged by a participating
Institution effectively reduces the Fund's yield for those customers.
If a participating bank were prohibited from offering the sweep program, it
is expected that customers of the participating bank who seek to invest in the
Fund would have to purchase and redeem shares directly through the Fund's
transfer agent, State Street Bank and Trust Company.
CHECK SERVICE
An investor may request in writing that the Fund establish a check service
("Check Service") with Equity Planning as agent to draw against the investor's
Fund account. Upon receipt of such request, the Fund will provide checks
("Checks"). Checks may be made payable to the order of anyone in an amount of
$500 or more. Class M Shares held under retirement plans or IRAs are not
eligible for the Check Service. The Check Service is subject to Equity
Planning's customary rules and regulations governing checking accounts, and the
Fund and Equity Planning each reserve the right to change or suspend the Check
Service. The Check Service may be discontinued at any time or for any investor.
The Check Service does not create a checking or other bank account relationship
between the shareholder and Equity Planning or the Fund.
When a Check is presented to Equity Planning for payment, through normal
banking channels, Equity Planning, as the investor's agent, causes the Fund to
redeem at the net asset value a sufficient number of full and fractional Class M
Shares to cover the amount of the Check. If there is an insufficient number of
shares in your account, the Check is marked insufficient funds and is returned
unpaid to the presenting bank. Checks will only clear Equity Planning if drawn
against funds which have been invested for at least 15 days, except for wire
investments. Cancelled (paid) Checks are returned to you; however, this practice
may be discontinued in the future or a charge for such service may be imposed.
By requesting the Check Service, you agree to indemnify and hold harmless Equity
Planning, the Fund, and any of their agents from any liability for honoring
Checks or for effecting or facilitating redemptions pursuant to the Check
Service or for returning Checks which have not been accepted. The Check Service
enables you to receive the daily dividends declared on the shares to be redeemed
until the day that the Check is presented to Equity Planning for payment. Since
the aggregate amount in your account changes each day because of the daily
dividend, you should not attempt to withdraw the full amount in your account by
using the Check Service.
The Fund reserves the right in its sole discretion to reject any purchase
order in whole or in part for any reason that it deems sufficient and to change
the minimum investment and subsequent purchases in the Fund.
No stock certificates will be issued unless specifically requested in writing
by an investor. Instead, an account will be established for each investor and
all shares purchased or received, including those obtained through reinvestment
of distributions, will be registered on the books of the Fund and credited to
such account.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning at (800) 243-1574 for further information
about the plans.
THE DISTRIBUTOR AND DISTRIBUTION PLANS
Pursuant to its Distribution Agreement with the Trust (the "Distribution
Agreement"), Phoenix Equity Planning Corporation ("Equity Planning" or the
"Distributor") acts as distributor of the Trust's shares. The Distribution
Agreement naming Equity Planning as Distributor was last approved by the
Trustees on January 12, 1999.
The Trust has adopted a separate Rule 12b-1 Plan for the Class M Shares (the
"Class M Plan"). The Class M Plan provides that the Distributor may enter into
Service Agreements with securities dealers, financial institutions, banks, and
other industry professionals for distribution, promotion and administration of
and/or servicing investors in Class M Shares. Service payments under the Class M
Plan are paid in equal amounts by the Fund and the Adviser, or the Fund and the
Adviser reimburse the Distributor equally for service payments to a service
organization, in an amount not exceeding 0.30% per annum of the average daily
net asset value of the Class M Shares. The Class M Plan also provides that the
Fund will pay the costs and expenses connected with the printing and
distribution of the Fund's prospectuses, shareholder reports, and any
promotional material for other than current Fund shareholders, in an amount not
to exceed $100,000 per annum. The Trust has also adopted a distribution plan for
the Class A and
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Class C Shares, and for the Class B Shares of the Fund (the "Class A and Class C
and Class B Plans"), in accordance with Rule 12b-1 under the 1940 Act, to
compensate the Distributor for the services it provides and for the expenses it
bears under the Distribution Agreement. Each class of shares subject to the
Class A and C and Class B Plans pays a service fee at the rate of 0.25% per
annum of the daily average net assets of such class and a distribution fee based
on average daily net assets at the following rates: for Class A Shares, 0.05%
per annum; for Class B Shares, 0.75% per annum, and for Class C Shares, 0.05%
per annum.
A report of the amounts expended under the Class M Plan and the Class A and
Class C and Class B Plans (collectively, the "Plans") must be made to the Board
of Trustees and reviewed by the Board at least quarterly. In addition, the Plans
provide that they may not be amended to increase materially the costs which the
Trust may bear for distribution pursuant to the Plans without shareholder
approval and that other material amendments to the Plans must be approved by a
majority of the Board, including a majority of the Board who are neither
interested persons of the Trust (as defined in the 1940 Act) nor have any direct
or indirect financial interest in the operation of the Plans (the "Qualified
Trustees"), by vote cast in person at a meeting called for the purpose of
considering such amendments.
The Plans are subject to annual approval by a majority of the Board of
Trustees, including a majority of the Qualified Trustees, by vote cast in person
at a meeting called for the purpose of voting on the Plans. The Plans are
terminable at any time by vote of a majority of the Qualified Trustees or, with
respect to any Class of a Series, by vote of a majority of the shares of such
Class. Pursuant to the Plans, any new trustees who are not interested persons
must be nominated by existing trustees who are not interested persons. If the
Plans are terminated (or not renewed) with respect to one or more Classes of
shares, they may continue in effect with respect to any Class or Fund as to
which they have not been terminated (or have been renewed).
Benefits from the Plans may accrue to the Trust and its shareholders from the
growth in assets due to sales of shares to the public pursuant to the Plans.
Increases in a Fund's net assets from sales pursuant to its Plan may benefit
shareholders by reducing per share expenses, permitting increased investment
flexibility and diversification of the Fund's assets, and facilitating economies
of scale (e.g., block purchases) in the Fund's securities transactions. Under
their terms, the Plans will continue from year to year, provided that such
continuance is approved annually by a vote of the Trustees in the manner
described above. The continuance of the Plan was last approved by the Board of
Trustees, including a majority of the Qualified Trustees, at a meeting held on
February 28, 2000. The adoption of the Class M Plan was approved by the Board of
Trustees at a meeting held on December 14, 1993, and was approved by the initial
shareholders of the Class M Shares on April 25, 1994. Prior to approving the
continuance of the Plan and the adoption of the Class M Plan, the Board
requested and received from the Distributor all the information which it deemed
necessary to arrive at an informed determination as to such continuance and
adoption of the Plans. In making its determination to continue the Plan, the
Board considered, among other factors: (1) the Trust's experience under the Plan
and the previous Rule 12b-1 Plan for the Class A Shares of the Trust, and
whether such experience indicates that the Plans would operate as anticipated;
(2) the benefits the Trust had obtained under the Plan and the previous Class A
Rule 12b-1 Plan and would be likely to obtain under the Plans; (3) what services
would be provided under the Plans by the Distributor to the Trust and its
shareholders; and (4) the reasonableness of the fees to be paid to the
Distributor for its services under the Plans. Based upon its review, the Board,
including each of the Qualified Trustees, determined that the continuance of the
Plan would be in the best interest of the Trust, and that there was a reasonable
likelihood that the Plans would benefit the Trust and its shareholders. In the
Board's quarterly review of the Plans, they will consider their continued
appropriateness and the level of compensation provided therein.
Because all amounts paid pursuant to the Plans are paid to the Distributor,
the Distributor and its officers, directors and employees, all may be deemed to
have a direct or indirect financial interest in the operation of the Plans. None
of the Trustees who is not an interested person of the Trust has a direct or
indirect financial interest in the operation of the Plans.
The Board of Trustees has also adopted a Rule 18f-3 Multi-Class Share Plan
permitting the issuance of shares in multiple classes.
7
<PAGE>
MANAGEMENT OF THE TRUST
The Trustees have responsibility for management of the business of the Trust.
The officers of the Trust are responsible for its day to day operations. Set
forth below is certain information concerning the Trustees and officers.
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
James Balog (71) Trustee Retired; Director and Member of the Audit, Investment, Stock
2205 N. Southwinds Blvd. Option and Compensation Committees of Transatlantic Holdings,
Vero Beach, FL 32963 Inc. (reinsurance); Director and Member of the Executive
Committee of Elan, Plc (pharmaceuticals); Director and Member
of the Executive and Investment & Credit Committees of Great
West Life and Annuity Insurance Company; Member of the
Technical Advisory Board of Galen Partners (health care) and
Trustee of the Phoenix-Euclid Funds. Former Director, Chairman
of the Audit Committee and Member of the Executive Committee of
A.L. Pharma, Inc. (health care); Chairman of 1838 Investment
Advisors, L.P. and Chairman of Lambert Brussels Capital
Corporation (investments).
Claire B. Benenson (81) Trustee Consultant on Financial Conferences, The New School for Social
870 U.N. Plaza Research. Director of The Burnham Fund Inc. and Trustee of the
New York, NY 10017 Phoenix-Euclid Funds. President of the Money Marketeers of New
York University. Trustee of Simms Global Fund and Director of
Phoenix-Zweig Government Cash Fund Inc. Former Director of
Financial Conferences and Chairman, Department of Business and
Financial Affairs, The New School for Social Research.
S. Leland Dill (69) Trustee Trustee and Chairman of the Audit Committee of Deutsche Asset
5070 North Ocean Dr. Management mutual funds. Trustee, Phoenix-Euclid Funds. Former
Singer Island, FL 33404 Director and Chairman of the Audit Committee of Coutts & Co.
Trust Holdings Limited, Coutts & Co. Group, Coutts & Co.
International (USA) (private banking). Former partner of Peat
Marwick Mitchell & Co. and Director of Zweig Cash Fund Inc. and
Vintners International Company, Inc. (winery).
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
*Philip R. McLoughlin (53) Trustee (1995-1997) and Chief Executive Officer (1995-present), Phoenix
56 Propsect Street Investment Partners, Ltd. Director (1994-present) and Executive
Hartford, CT 06115 Vice President, Investments (1998-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Chairman, Phoenix-Zweig Trust (2000-present).
Director (1983-present) and Chairman (1995-present), Phoenix
Investment Counsel, Inc. Director (1984-present) and President
(1990-present), Phoenix Equity Planning Corporation. Chairman and
Chief Executive Officer, Phoenix/Zweig Advisers LLC
(1999-present). Chairman, Phoenix-Zweig Trust (2000-present).
Director, PXRE Corporation (Delaware) (1985-present) and World
Trust Fund (1991-present). Director and Executive Vice President,
Phoenix Life and Annuity Company (1996-present). Director and
Executive Vice President, PHL Variable Insurance Company
(1995-present). Director, Phoenix Charter Oak Trust Company
(1996-present). Director and Vice President, PM Holdings, Inc.
(1985-present). Director (1992-present) and President
(1992-1994), W.S. Griffith & Co., Inc. Director, PHL Associates
Inc. (1995-present).
Donald B. Romans (69) Trustee President of Romans & Company, (private investors and financial
233 East Wacker Dr. consultants); Director of the Burnham Fund Inc. and Trustee of
Chicago, IL 60601 the Phoenix-Euclid Funds. Former Consultant to and Executive
Vice President and Chief Financial Officer of Bally
Manufacturing Corporation, and Director of Phoenix-Zweig
Government Cash Fund Inc.
Martin E. Zweig (57) President President of the Subadviser; Chairman of the Board and
900 Third Avenue President of The Zweig Total Return Fund, Inc. and The Zweig
New York, NY 10022 Fund, Inc.; Managing Director of Zweig-DiMenna Associates LLC;
President of Zweig-DiMenna International Managers, Inc.;
Zweig-Di Menna Associates, Inc. and Gotham Advisors, Inc.;
Member of the Undergraduate Executive Board of the Wharton
School, University of Pennsylvania; Trustee, Manhattan
Institute. Former President of Zweig Cash Fund Inc. Former
President and Director of Zweig Advisors Inc., Zweig Total
Return Advisors, Inc. and Zweig Securities Advisory Services
Inc. General Partner of Zweig Katzen Investors, L.P.; Former
Chairman of the Adviser and Euclid Advisors LLC.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
Michael E. Haylon (42) Executive Vice Director and Executive Vice President--Investments, Phoenix
56 Prospect Street President Investment Partners, Ltd. (1995-present). Executive Vice
Hartford, CT 06115 President, Phoenix/Zweig Advisers LLC (1999-present). Director
(1994-present), President (1995-present), Executive Vice
President (1994-1995), Vice President (1991-1994), Phoenix
Investment Counsel, Inc. Director, Phoenix Equity Planning
Corporation (1995-present). Executive Vice President, Phoenix
Funds (1993-present) and Phoenix-Aberdeen Series Fund
(1996-present). Executive Vice President (1997-present), Vice
President (1996-1997), Phoenix Duff & Phelps Institutional
Mutual Funds. Senior Vice President, Securities Investments,
Phoenix Home Life Mutual Insurance Company (1993-1995).
William R. Moyer (56) Executive Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial
P.O. Box 2200 Officer, Phoenix Investment Partners, Ltd. (1995-1999).
Enfield, CT 06083-2200 Director (1998-present), Senior Vice President, Finance
(1990-present), Chief Financial Officer (1996-present), and
Treasurer (1994-1996 and 1998-present), Phoenix Equity Planning
Corporation. Director (1998-present), Senior Vice President
(1990-present), Chief Financial Officer (1996-present) and
Treasurer (1994-present), Phoenix Investment Counsel, Inc.
Senior Vice President and Chief Financial Officer, Duff &
Phelps Investment Management Co. (1996-present). Vice
President, Phoenix Funds (1990-present), Phoenix-Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen
Series Fund (1996-present). Executive Vice President,
Phoenix-Seneca Funds (2000-present). Senior Vice President and
Chief Financial Officer, W.S. Griffith & Co., Inc. (1992-1995)
and Townsend Financial Advisers, Inc. (1993-1995).
John F. Sharry (47) Executive Vice President, Retail Division (1999-present), Executive Vice
56 Prospect Street President President, Retail Division (1997-1999), Phoenix Investment
Hartford, CT 06115 Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-1997). Executive Vice
President, Phoenix Funds, Phoenix-Aberdeen Series Funds
(1998-present) and Phoenix-Seneca Funds (2000-present).
Managing Director, Director and National Sales Manager, Putnam
Mutual Funds (1992-1995).
Carlton Neel (32) Senior Vice President First Vice President of Phoenix/Zweig Advisers LLC. Former Vice
900 Third Avenue President of Zweig Advisors Inc. and Zweig Total Return
New York, NY 10022 Advisors, Inc. Former Vice President of J.P. Morgan & Co., Inc.
Barry Mandinach (43) First Vice President Executive Vice President of PXP Securities Corp., Senior Vice
900 Third Avenue President of Phoenix/Zweig Advisers LLC. and Euclid Advisors
New York, NY 10022 LLC, and First Vice President of the Phoenix-Euclid Funds.
Beth Abraham (44) Assistant Vice President Assistant Vice President of Phoenix/Zweig Advisers LLC and the
900 Third Avenue Phoenix-Euclid Funds. Former self-employed consultant to the
New York, NY 10022 mutual fund industry.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
NAME, ADDRESS AND AGE THE TRUST PRINCIPAL OCCUPATION DURING PAST 5 YEARS
--------------------- --------- ----------------------------------------
<S> <C> <C>
David O'Brien (35) Assistant Vice President Assistant Vice President of Phoenix-Euclid Funds. Assistant
900 Third Avenue Portfolio Manager of Phoenix-Euclid Market Neutral Fund, the
New York, NY 10022 Phoenix-Zweig Strategy Fund, Phoenix-Zweig Appreciation Fund
and Phoenix-Zweig Growth & Income Fund. Formerly, Assistant
Vice President, PaineWebber (1993-1998).
Marc Baltuch (54) Secretary Director and President of Watermark Securities, Inc. Secretary
900 Third Avenue of Phoenix-Euclid Funds; Assistant Secretary of Gotham
New York, NY 10022 Advisors, Inc. Former First Vice President of the Phoenix/Zweig
Advisers LLC and of Zweig/Glaser Advisers LLC; Secretary of
Zweig Cash Fund Inc. Former First Vice President, Chief
Compliance Officer and Secretary of PXP Securities Corp.
Nancy G. Curtiss (47) Treasurer Treasurer, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen
Series Fund (1996-present), Vice President, Fund Accounting
(1994-2000) and Treasurer (1996-2000), Phoenix Equity Planning
Corporation and Phoenix-Seneca Funds (2000-present). Second
Vice President and Treasurer, Fund Accounting, Phoenix Home
Life Mutual Insurance Company (1994-1995). Various positions
with Phoenix Home Life Insurance Company (1987-1994).
</TABLE>
*Designates a trustee who is an interested person of the trust within the
meaning of the 1940 Act.
COMPENSATION OF TRUSTEES AND OFFICERS
For the fiscal year ended December 31, 1999, the fees and expenses of
disinterested trustees, as a group, were $73,000. Those trustees and officers of
the Trust who are affiliated with the Subadviser or the Adviser are not
separately compensated for their services as trustees or officers of the Trust.
The Trust currently pays each of its disinterested trustees a fee of $5,000 per
year, plus $1,500 per meeting attended ($500 per phone meeting) and reimburses
their expenses for attendance at meetings, all of which is prorated on the basis
of the assets of each fund. In addition, each such trustee receives a fee of
$1,000 per year from each fund. Trustees may be removed from office at any
meeting of shareholders by a vote of two-thirds of the outstanding shares of the
Trust. Except as set forth above, the trustees shall continue to hold office and
may appoint their successors.
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
PENSION OR
AGGREGATE RETIREMENT BENEFITS ESTIMATED TOTAL
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS COMPENSATION
NAME FROM THE TRUST OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- -------------- ---------------- --------------- ----------------
James Balog $17,500 $22,500
<S> <C> <C> <C> <C>
Claire B. Benenson $18,500 None None $24,000
S. Leland Dill $18,500 for any for any $24,000
Eugene J. Glaser* $0 Trustee Trustee $0
Donald B. Romans $18,500 $24,000
-----------------
</TABLE>
*"Interested Person" as defined under the Investment Company Act.
At ________, 2000, except for Dr. Martin E. Zweig, the Trustees and officers
as a group owned less than 1% of any Class of any Fund of the Trust.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of_______, 2000 with respect to
each person who beneficially or of record owns 5% or more of any class of the
Fund's equity securities.
11
<PAGE>
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENT OF FUND
------------------- -------------- ---------------
<S> <C> <C>
Banque Carnegie Luxembourg Government Cash Fund--Class A %
5 Place de la Gare
P.O. Box 1141
Luxembourg L-1011
Hare & Co. Government Cash Fund--Class M %
Bank of New York
Attn STIF/Master Note
1 Wall Street, Fl. 2
New York, NY 10005
PaineWebber FBO Government Cash Fund--Class B %
Virginia B. Bunner
1602 Augusta Dr.
Prudential Securities Inc. FBO Government Cash Fund--Class A %
Trout Trading Fd. Pledged Coll. Acct.
For Credit Lyonnais
Washington Mall West
Reid St.
Bermuda
Prudential Securities Inc. FBO Government Cash Fund--Class A %
Trout Trading Fd. Pledged Coll. Acct.
For Credit Lyonnais
Washington Mall One
Church St. 4th Floor
Hamilton HM11
State Street Bank & Trust Co. Cust. Government Cash Fund--Class C %
Rana J. Khan
3722 August Lane
Elkhart, IN 46517-3854
Martin E. Zweig and immediate family Government Cash Fund--Class I %
900 Third Avenue Government Cash Fund--Class M %
New York, NY 10022
Martin E. Zweig & Jeffrey Perry TTE Government Cash Fund--Class I %
Zweig-DiMenna Associates Inc.
Retirement Trust MMP
Attn: Michael Link
900 Third Avenue
New York, NY 10022
</TABLE>
ADDITIONAL INFORMATION
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Funds and different classes of those Funds. Holders of shares of a Fund have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Fund. Shareholders of all Funds vote on the
election of Trustees. On matters affecting an individual Fund (such as approval
of an investment advisory agreement or a change in fundamental investment
policies) and on matters affecting an individual class (such as approval of
matters relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Fund or Class is required. The Trust does not hold regular
meetings of shareholders. The Trustees will call a meeting when at least 10% of
the outstanding shares so request in writing. If the Trustees fail to call a
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund,
12
<PAGE>
and any class thereof and all income, earnings, profits and proceeds thereof,
are allocated to such Fund, and class, respectively, subject only to the rights
of creditors, and constitute the underlying assets of such Fund or class. The
underlying assets of each Fund are required to be segregated on the books of
account, and are to be charged with the expenses in respect to such Fund and
with a share of the general expenses of the Trust. Any general expenses of the
Trust not readily identifiable as belonging to a particular Fund or class will
be allocated by or under the direction of the Trustees as they determine fair
and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability, which is considered remote, is limited
to circumstances in which the Trust itself would be unable to meet its
obligations.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, NY 10036,
serves as the independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIAN AND TRANSFER AGENT
The Bank of New York, One Wall Street, New York, New York 10286, serves as
custodian of the Trust's assets.
Phoenix Equity Planning Corporation ("PEPCO"), 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, CT 06083-2200, serves as Transfer Agent for the Fund.
PEPCO receives a fee equivalent to $13.50 for each shareholder account, plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents are paid a fee by the Transfer Agent. State Street Bank and Trust Company
serves as subtransfer agent pursuant to a Subtransfer Agency Agreement.
REPORT TO SHAREHOLDERS
The fiscal year of the Trust ends on December 31. The Trust will send
financial statements to its shareholders at least semiannually. An Annual Report
containing financial statements audited by the Trust's independent accountants
will be sent to shareholders each year, and is available without charge upon
request.
FINANCIAL STATEMENTS
The Financial Statements for the Fund's fiscal year ended December 31, 1999
and June 30, 2000, appearing in the Trust's 1999 Annual and Semi-Annual Reports
to Shareholders, are incorporated herein by reference.
13
<PAGE>
PHOENIX-ZWEIG TRUST
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a. Agreement and Declaration of Trust.(9)
b. By-Laws of the Trust.(9)
c. Instruments defining shareholder rights incorporated
by reference to Exhibits a.1 and a.2 above.
d.1. Management Agreement between the Trust and
Zweig/Glaser Advisers LLC.(11)
d.2. Servicing Agreement between Zweig/Glaser Advisers LLC
and Zweig Consulting LLC(11)
e. None.
f. None.
g. Form of Custody Agreement (the "Custody Agreement")
between the Registrant and Bank of New York. (3)
h. Form of Transfer Agency Agreement (the "Transfer
Agency Agreement") between the Trust and PEPCO.(11)
i. None.
j. Consent of PricewaterhouseCoopers LLP, Independent
Public Accountant.(12)
k. None.
l.1. Subscription Agreement for Shares of the Government
Securities.(2)
l.2. Subscription Agreement for Shares of the Zweig
Strategy Fund.(4)
l.3. Subscription Agreement for Class C (f/k/a B Shares)
Shares of the Trust.(6)
l.4. Subscription Agreement for Shares of Zweig Managed
Assets.(7)
l.5. Subscription Agreement for Shares of the Zweig
Appreciation Fund.(1)
m. Distribution Plan pursuant to Rule 12b-1 as
Exhibit 15.(12)
n. Financial Data Schedules.
o. Amended and Restated Rule 18f-3 Plan as
Exhibit 18.(10)
p. Codes of Ethics of the Trust, ZGA Adviser and PEPCO
Distributor.(12)
q. Powers of Attorney for James Balog, Claire B.
Benenson, S. Leland Dill, Philip R. McLaughlin and
Donald Romans.(9)(12)
----------
(1) Incorporated by reference to the Trust's Registration
Statement on Form N-1A, filed previously on
September 28, 1984.
(2) Incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement of the Trust on
Form N-1A, filed previously on November 27, 1985.
(3) Incorporated by reference to Post-effective Amendment
No. 3 to the Registration Statement of the Trust on
Form N-1A, filed previously on February 28, 1986.
(4) Incorporated by reference to Post-Effective Amendment
No. 18 to the Registration Statement of the Trust on
Form N-1A, filed previously on October 20, 1989.
(5) Incorporated by reference to Post Effective Amendment
No. 22 to the Registration Statement of the Trust on
Form N-1A, filed previously on April 20, 1990.
(6) Incorporated by reference to Post Effective Amendment
No. 34 to the Registration Statement of the Trust on
Form N-1A, filed previously on March 2, 1992.
C-1
<PAGE>
(7) Incorporated by reference to Post Effective Amendment
No. 37 to the Registration Statement of the Trust
on Form N-1A, filed previously on February 26, 1993.
(8) Incorporated by reference to Post Effective Amendment
No. 40 to the Registration Statement of the Trust on
Form N-1A, filed previously on July 5, 1995.
(9) Incorporated by reference to Post Effective Amendment
No. 42 to the Registration Statement of the Trust on
Form N-1A, filed previously on April 30, 1996.
(10) Incorporated by reference to Post Effective Amendment
No. 45 to the Registration Statement of the Trust on
Form N-1A, filed previously on August 20, 1997.
(11) Incorporated by reference to Post-Effective Amendment
No. 48 on Form N-1A on May 3, 1999.
(12) Incorporated by reference to Post Effective Amendment
No. 50 on May 1, 2000.
(13) Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
The Fund does not control and is not under common control with any other
person.
ITEM 25. INDEMNIFICATION
The Agreement and Declaration of Trust dated April 26, 1996 and the By-Laws
of the Registrant provide that no trustee or officer will be indemnified against
any liability to which the Registrant would otherwise be subject by reason of or
for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties. The Management Agreement, Underwriting Agreement, Custody
Agreement and Transfer Agency Agreement each provides that the Trust will
indemnify the other party (or parties, as the case may be) to the agreement for
certain losses.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISERS
All of the information required by this item is set forth in the Form ADV,
as currently amended, of Zweig/Glaser Advisers LLC and Zweig Consulting LLC (SEC
File Nos. 801-56470 and 801-56184), which is incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITER
(a) PEPCO also serves as the principal underwriter for the following other
investment companies:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities Fund,
Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix-Euclid Funds, Phoenix Equity Series Fund, Phoenix-Goodwin California Tax
Exempt Bond Fund, Phoenix Investment Trust 97, Phoenix Multi-Portfolio Fund,
Phoenix Multi-Series Trust, Phoenix-Oakhurst Income & Growth Fund,
Phoenix-Oakhurst Strategic Allocation Fund, Phoenix-Seneca Funds, Phoenix Series
Fund, Phoenix Strategic Equity Series Fund, Phoenix Home Life Variable Universal
Life Account, Phoenix Home Life Variable Accumulation Account, PHL Variable
Accumulation Account, Phoenix Life and Annuity Variable Universal Life Account
and PHL Variable Separate Account MVA1.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Trustee and Chairman
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Executive Vice President, Executive Vice President
56 Prospect Street Chief Financial Officer and Treasurer
P.O. Box 150480
Hartford, CT 06115-0480
John F. Sharry President, Executive Vice President
56 Prospect St. Retail Division
P.O. Box 150480
Hartford, CT 06115-0480
Barry Mandinach Executive Vice President, None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President, None
56 Prospect Street Chief Sales Officer,
P.O. Box 150480 Retail Division
Hartford, CT 06115-0480
G. Jeffrey Bohne Senior Vice President, None
101 Munson Street Chief Mutual Fund
P.O. Box 810 Customer Service
Greenfield, MA 01302-0810
Robert S. Dreissen Vice President, Compliance Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Financial Reporting
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the rules thereunder will be
maintained at the offices of (1) the Registrant at 900 Third Avenue, 31st Floor,
New York, New York 10022, (2) Zweig Consulting LLC, at 900 Third Avenue, New
York, New York 10022, (3) State Street Bank and Trust Company, at 1776 Heritage
Drive, North Quincy, Massachusetts 02171-2197, (4) Registrant's Transfer Agent,
Phoenix Equity Planning Corporation, at 100 Bright Meadow Boulevard, Enfield, CT
06082.
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant has duly caused this amendment to its registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of New York, and State of New York on the 10th day of October, 2000.
PHOENIX-ZWEIG TRUST
ATTEST:
/S/ PAMELA S. SINOFSKY BY: /S/ MARTIN E. ZWEIG
---------------------- --------------------------------
PAMELA S. SINOFSKY MARTIN E. ZWEIG
ASSISTANT SECRETARY PRESIDENT
Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed below by the following persons in the
capacities indicated, on this 10th day of October, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Trustee
---------------------------------------
James Balog*
Trustee
---------------------------------------
Claire B. Benenson*
/s/ Nancy G. Curtiss Treasurer (principal financial
--------------------------------------- and accounting officer)
Nancy G. Curtiss
Trustee
---------------------------------------
S. Leland Dill*
Trustee
---------------------------------------
Philip R. McLoughlin*
Trustee
---------------------------------------
Donald B. Romans*
/s/ Martin E. Zweig President
--------------------------------------- (principal executive officer)
Martin E. Zweig
</TABLE>
*By /s/ Pamela S. Sinofsky
-------------------------------------------
* Pamela S. Sinofsky, Attorney-in-fact pursuant
to powers of attorney previously filed.
S-1
