<PAGE>
June 30, 1998
PHOENIX ENGEMANN FUNDS
SEMIANNUAL REPORT
- - PHOENIX-ENGEMANN
GROWTH FUND
- - PHOENIX-ENGEMANN
NIFTY FIFTY FUND
- - PHOENIX-ENGEMANN
BALANCED RETURN FUND
- - PHOENIX-ENGEMANN
GLOBAL GROWTH FUND
- - PHOENIX-ENGEMANN
SMALL & MID-CAP
GROWTH FUND
- - PHOENIX-ENGEMANN
VALUE 25 FUND
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
Mutual Funds are not insured by the FDIC; are
not deposits or other obligations
of a bank and are not guaranteed by a bank; and
are subject to investment
risks, including possible loss of the principal
invested.
<PAGE>
MESSAGE FROM THE CHAIRMAN
Dear Fellow Shareholders: [PHOTO]
ROGER ENGEMANN
This is just the kind of monotony we like! I'm very happy to
report that all the funds in our complex have--once
again--turned in positive numbers for the previous six months.
You'll find complete performance information in the sections
that follow, but I'd like to share some of the highlights with
you. Based on the net asset value (NAV) increase for Class A
Shares, the Growth, Nifty Fifty, Balanced and Global Growth funds all beat the
average fund* in their respective categories from December 31, 1997, through
June 30, 1998. What's even better news is that these funds nearly matched or
exceeded their benchmark indices as well.
And, better yet, two of our funds gave the record-setting S&P 500 Stock Index
a run for the money. The NAV for Class A Shares of the Nifty Fifty fund
increased 17.6 percent, just shy of the 17.8 percent return of the S&P, and the
Growth fund's 18.8 percent increase came out ahead of the S&P.
We're particularly pleased with the funds' performance within their peer
groups because it represents progress toward our goal of improving relative
performance. When I last wrote you, I reported good returns on an absolute
basis, but said it would be our mission to improve our relative returns as
measured against similar funds. The fact that we have been able to do this is
encouraging, but I want to assure you that we do not yet consider our mission
fully accomplished.
The strong returns of the Growth and Nifty Fifty funds reflect what we had
anticipated: a continuing market bias toward large growth stocks. When nervous
financial conditions prevail, as they have for many months, investors tend to
gravitate to the comfortable stocks of large, dependable companies who turn out
products we use on a day-to-day basis.
At times like these, other stocks and the funds that invest in them, can play
second fiddle. There's not as much "comfort" in small and mid-cap stocks. Weak
commodity pricing is making commodity-type stocks such as those in the Value 25
fund less attractive. And storm clouds over Asia are dampening enthusiasm for
most all but European foreign stocks.
Despite the current glamour of the large-cap growth stocks, I'd want to check
any urge to move all your money into that category. The reason, of course, is
that the tides can change. Large growth stocks have had the edge for many months
and could continue to dominate for some time. But sooner or later other fund
types are likely to gain the spotlight. If you own the Nifty Fifty or the Growth
fund, as well as other funds in the family, you're taking advantage of
diversification and improving your chances of having investments that can work
well for you in different economic circumstances.
Next quarter we will celebrate the one-year anniversary of our alliance with
Phoenix Duff & Phelps, now Phoenix Investment Partners, Ltd. We expected the
relationship to be good, but in real life it has turned out to be even better
than we had hoped. The Phoenix organization has relieved us of the burden of a
number of mutual fund administrative, compliance and accounting functions,
allowing us to concentrate on what we like and what we feel we do best: picking
stocks and helping you make your money grow.
With such a favorable internal environment and with external forces at play
that bode well for the stock market, we believe we can continue to bring you
good news in these reports for some time to come.
Thank you as always for trusting your money to our care.
[SIGNATURE]
Roger Engemann
Chairman of the Board and President
August 20, 1998
(*)SOURCE: LIPPER ANALYTICAL SERVICES
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE
The Phoenix-Engemann Growth Fund's objective is to achieve long-term capital
appreciation by investing in common stocks with rapidly growing earnings per
share. The fund invests in stocks of various capitalization.
Q: HOW DID THE FUND PERFORM FOR THE SIX MONTHS ENDED JUNE 30, 1998?
A: The NAV for the fund's Class A Shares increased 18.8 percent, comparing very
favorably to the S&P 500 Index which returned 17.8 percent and to the average
growth fund which advanced 15.1 percent as measured Lipper Analytical Services.
Q: WHAT WERE SOME OF THE FACTORS WHICH AFFECTED THE FUND'S PERFORMANCE?
A: The fund benefited from owning companies with bright earnings prospects at a
time when investors are worried about slowing earnings growth for the average
company in the S&P 500. In addition, the fund was overweighted in several
sectors which outperformed the market including Communications, Health Care and
Consumer Discretionary.
Q: PLEASE DISCUSS A FEW STOCKS THAT DID WELL DURING THE PERIOD AS WELL AS THOSE
THAT TURNED IN DISAPPOINTING RESULTS.
A: Communication service and equipment companies were among the fund's best
performers during the period as the viability of the Internet as a business
medium continued to gain momentum. Among our top performers in this area were
America Online, Cisco Systems, and Lucent Technologies. The fund's largest
position, Pfizer, also performed extremely well as the company received FDA
approval for its new impotence pill which subsequently became the fastest launch
of a new pharmaceutical product in history.
On the negative side, Cendant was the fund's weakest performer as the company
disclosed accounting irregularities related to its merger with CUC
International. We continue to own the stock as we await the opinion of an
independent audit committee. Philip Morris underperformed the market during the
first half of the year as uncertainty surrounding the outcome of tobacco
legislation beset the stock. We believe Philip Morris trades at a steep discount
to the market and expect the valuation to improve once the company's actual
liability becomes more apparent to investors.
Q: WERE THERE ANY SIGNIFICANT CHANGES IN THE PORTFOLIO DURING THE FIRST HALF OF
THE YEAR?
A: We decreased our position in MRV Communications as we continue to emphasize
larger companies with stronger competitive positions. WorldCom is a name we
added to the top ten holdings in light of the company's proposed merger with
MCI. We believe the prospects for the combined company are exciting as the
company is positioning itself to provide a broad array of telecommunications
services on a global basis.
Q: WHAT IS YOUR OUTLOOK FOR THE REMAINDER OF 1998?
A: We continue to focus on companies we expect will grow their earnings 2 to 3
times faster than the average company in the S&P 500. In an environment where
profit growth is becoming harder to come by for the average company, we believe
investors will pay a premium to own companies with consistent, above-average
growth. Furthermore, with inflation appearing to remain well under control, we
expect interest rates to stay low and the premium investors are willing to pay
for growth to at least remain stable. In summary, our outlook has not changed;
we remain positively disposed to equities, particularly growth stocks.
2
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/98)
1 YEAR 3 YEARS 5 YEARS 10 YEARS
A Shares(2) (INCEPTION: 6/24/86)
NAV 26.17% 22.26% 16.84% 16.67%
POP 20.16% 20.30% 15.71% 16.11%
B Shares(2) (INCEPTION: 1/3/94) SINCE INCEPTION
CDSC 21.37% 20.86% - 16.58%
No CDSC 25.37% 21.31% - 16.84%
C Shares(2) (INCEPTION: 1/3/94) SINCE INCEPTION
CDSC 24.37% 21.31% - 16.58%
No CDSC 25.37% 21.31% - 16.84%
M Shares(3) (INCEPTION: 1/21/98) SINCE INCEPTION
NAV - - - 18.77%
POP - - - 14.59%
S&P 500 Index 30.30% 30.34% 23.13% note 4
SECTOR HOLDINGS (AS A PERCENTAGE OF MARKET VALUE)
Consumer Discretionary 19.0%
Consumer Staples 12.0%
Financial Services 14.0%
Health Care 20.0%
Technology 18.0%
Utilities 3.0%
Cash & Other 14.0%
SECTOR HOLDINGS ARE BASED ON THE BREAKDOWN OF THE RUSSELL 1000 GROWTH INDEX,
AN UNMANAGED INDEX OF 1000 SECURITIES WITH A GREATER THAN AVERAGE GROWTH
ORIENTATION.
(1) TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
(2) "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE
MAXIMUM FRONT-END 4.75% SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM FRONT-END
SALES CHARGE WAS 5.5%. "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE
THE EFFECT OF ANY SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE (CDSC) IS
APPLIED TO REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT HAVE A SALES
CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B SHARES DECLINE
FROM 5% TO 0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C SHARES ARE 1% IN
THE FIRST YEAR AND 0% THEREAFTER.
(3) CLASS M SHARES ARE NOT CURRENTLY OFFERED.
(4) THE S&P 500 INDEX PERFORMANCE IS 18.56%, 24.79%, 24.79%, 17.60% FOR CLASS
A, B, C AND M, RESPECTIVELY, FOR 10 YEARS OR SINCE INCEPTION DATE AS NOTED.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
GROWTH FUND A SHARES(5) AND THE S&P 500 STOCK INDEX(6)
Fund After Maximum Sales Load S&P 500 Stock Index
6/30/88 $9,525.00 $10,000.00
6/30/89 $12,744.27 $12,039.60
6/29/90 $15,517.40 $14,004.62
6/28/91 $17,068.50 $15,040.91
6/30/92 $20,722.29 $17,065.36
6/30/93 $20,439.70 $19,387.25
6/30/94 $19,675.44 $19,646.87
6/30/95 $24,358.78 $24,776.69
6/28/96 $30,126.25 $31,247.86
6/30/97 $35,282.91 $42,107.20
6/30/98 $44,517.00 $54,865.91
(5) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY FOR THE PAST 10
YEARS. RETURNS ON CLASS B AND CLASS C SHARES WILL VARY DUE TO DIFFERING SALES
CHARGES.
(6) THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX CONSIDERED TO BE
REPRESENTATIVE OF THE U.S. STOCK MARKET AND INCLUDES REINVESTED DIVIDENDS.
3
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. Pfizer, Inc. 5.3%
Major producer of pharmaceuticals
2. Gillette Co. 4.5%
Global manufacturer of razors
3. Sears, Roebuck & Co. 3.5%
Leading retailer of apparel, home and automotive
products
4. WorldCom, Inc. 3.3%
Comprehensive telecommunications service provider
5. General Electric Co. 3.1%
Diversified manufacturing and financial services
6. Microsoft Corp. 3.1%
World's leading computer software company
7. Cisco Systems, Inc. 3.0%
Leading producer of switches and routers for
internetworking
8. Merck & Co., Inc. 2.9%
Leading manufacturer of pharmaceuticals
9. Carnival Corp. 2.7%
Operator of cruise ships
10. McDonald's Corp. 2.7%
Fast food restaurant operator
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
COMMON STOCKS--96.2%
BANKS (MAJOR REGIONAL)--2.3%
Wells Fargo & Co...................................... 31,770 $ 11,723,130
------------
BEVERAGES (NON-ALCOHOLIC)--3.9%
Coca-Cola Co. (The)................................... 137,900 11,790,450
PepsiCo, Inc.......................................... 194,450 8,008,909
------------
19,799,359
------------
CHEMICALS--1.1%
Du Pont (E.I.) de Nemours & Co........................ 75,000 5,596,875
------------
COMMUNICATIONS EQUIPMENT--3.9%
Loral Space & Communications, Inc..................... 100,000 2,825,000
Lucent Technologies, Inc.............................. 90,000 7,486,875
MRV Communications, Inc. (b).......................... 160,500 3,330,375
Tellabs, Inc. (b)..................................... 85,550 6,127,519
------------
19,769,769
------------
COMPUTERS (HARDWARE)--1.5%
Compaq Computer Corp.................................. 100,000 2,837,500
Hewlett-Packard Co.................................... 80,000 4,790,000
------------
7,627,500
------------
COMPUTERS (NETWORKING)--3.0%
Cisco Systems, Inc. (b)............................... 164,075 15,105,155
------------
COMPUTERS (SOFTWARE & SERVICES)--9.1%
America Online, Inc. (b).............................. 100,000 10,600,000
Edwards (J.D.) & Co................................... 55,000 2,361,562
HBO & Co.............................................. 195,700 6,898,425
Microsoft Corp. (b)................................... 141,300 15,313,387
PeopleSoft, Inc. (b).................................. 136,200 6,401,400
Sterling Commerce, Inc. (b)........................... 80,000 3,880,000
------------
45,454,774
------------
CONSUMER FINANCE--1.3%
MBNA Corp............................................. 197,300 $ 6,510,900
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT--3.1%
General Electric Co................................... 170,000 15,470,000
------------
ELECTRONICS (SEMICONDUCTORS)--5.0%
Etec Systems, Inc. (b)................................ 59,800 2,104,212
Intel Corp............................................ 126,400 9,369,400
Texas Instruments, Inc................................ 234,600 13,680,112
------------
25,153,724
------------
ENTERTAINMENT--4.0%
Carnival Corp......................................... 345,500 13,690,438
Walt Disney Co. (The)................................. 62,950 6,613,684
------------
20,304,122
------------
FINANCIAL (DIVERSIFIED)--5.6%
American Express Co................................... 53,000 6,042,000
FHLMC................................................. 293,150 13,796,372
FNMA.................................................. 78,550 4,771,913
Price (T. Rowe) Associates, Inc....................... 93,400 3,508,338
------------
28,118,623
------------
FOODS--0.5%
Kellogg Co............................................ 60,000 2,253,750
------------
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS)--9.5%
Lilly (Eli) & Co...................................... 100,000 6,606,250
Merck & Co., Inc...................................... 109,100 14,592,125
Pfizer, Inc........................................... 242,600 26,367,588
------------
47,565,963
------------
HEALTH CARE (DIVERSIFIED)--5.3%
American Home Products Corp........................... 200,000 10,350,000
Bristol-Myers Squibb Co............................... 50,000 5,746,875
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
HEALTH CARE (DIVERSIFIED)--CONTINUED
<S> <C> <C>
Johnson & Johnson..................................... 139,200 $ 10,266,000
------------
26,362,875
------------
HEALTH CARE (HOSPITAL MANAGEMENT)--1.5%
Columbia/HCA Healthcare Corp.......................... 250,550 7,297,269
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.9%
Medtronic, Inc........................................ 147,100 9,377,625
------------
HEALTH CARE (SPECIALIZED SERVICES)--0.9%
ALZA Corp............................................. 100,000 4,325,000
------------
INSURANCE (MULTI-LINE)--1.8%
American International Group, Inc..................... 45,000 6,570,000
Travelers Group, Inc.................................. 40,000 2,425,000
------------
8,995,000
------------
MANUFACTURING (DIVERSIFIED)--0.9%
United Technologies Corp.............................. 50,000 4,625,000
------------
OIL & GAS (DRILLING & EQUIPMENT)--1.4%
Schlumberger Ltd...................................... 100,000 6,831,250
------------
PERSONAL CARE--4.5%
Gillette Co........................................... 396,300 22,465,256
------------
RAILROADS--1.6%
Kansas City Southern Industries, Inc.................. 165,000 8,188,125
------------
RESTAURANTS--2.7%
McDonald's Corp....................................... 197,000 13,593,000
------------
RETAIL (BUILDING SUPPLIES)--1.8%
Lowe's Cos., Inc...................................... 227,200 9,215,800
------------
RETAIL (DEPARTMENT STORES)--1.4%
Kohl's Corp. (b)...................................... 138,000 7,158,750
------------
RETAIL (DISCOUNTERS)--1.0%
Consolidated Stores Corp. (b)......................... 133,500 4,839,375
------------
RETAIL (DRUG STORES)--1.3%
Walgreen Co........................................... 152,000 6,279,500
------------
RETAIL (GENERAL MERCHANDISE)--4.2%
Ross Stores, Inc...................................... 80,000 3,440,000
Sears, Roebuck & Co................................... 289,550 17,680,647
------------
21,120,647
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
SERVICES (ADVERTISING/MARKETING)--2.4%
Interpublic Group of Cos., Inc........................ 200,750 $ 12,183,016
------------
SERVICES (COMMERCIAL & CONSUMER)--1.5%
Cendant Corp. (b)..................................... 352,333 7,354,951
------------
SERVICES (DATA PROCESSING)--0.6%
First Data Corp....................................... 86,000 2,864,875
------------
SERVICES (PAYROLL PROCESSING)--1.1%
Paychex, Inc.......................................... 135,975 5,532,483
------------
TELECOMMUNICATIONS LONG DISTANCE--3.3%
WorldCom, Inc. (b).................................... 343,600 16,643,125
------------
TOBACCO--1.3%
Philip Morris Cos., Inc............................... 169,450 6,672,094
------------
TOTAL COMMON STOCKS
(Identified cost $251,299,737).................................. 482,378,660
------------
</TABLE>
<TABLE>
<S> <C> <C>
FOREIGN COMMON STOCKS--3.1%
INVESTMENT BANKING/BROKERAGE--1.2%
Amvescap PLC Sponsored ADR (United Kingdom)........... 118,800 5,836,050
------------
OIL & GAS (EXPLORATION & PRODUCTION)--0.9%
Renaissance Energy Ltd.
(Canada)............................................ 320,000 4,798,237
------------
PUBLISHING--1.0%
Reuters Group PLC Sponsored ADR (United Kingdom)...... 75,000 5,137,500
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $11,982,175)................................... 15,771,787
------------
TOTAL INVESTMENTS--99.3%
(Identified cost $263,281,912).................................. 498,150,447(a)
Cash and receivables, less liabilities--0.7%.................... 3,280,463
------------
NET ASSETS--100.0%................................................ $501,430,910
------------
------------
</TABLE>
(a) Federal Income Tax Information : Net unrealized appreciation of investment
securities is comprised of gross appreciation of $236,503,014 and gross
depreciation of $1,634,479 for federal income tax purposes. At June 30,
1998, the aggregate cost of securities for federal income tax purposes was
$263,281,912.
(b) Non-income producing.
See Notes to Financial Statements 5
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $263,281,912) $ 498,150,447
Cash 6,638,616
Receivables
Investment securities sold 4,715,440
Dividends and interest 391,093
Fund shares sold 169,553
--------------
Total assets 510,065,149
--------------
LIABILITIES
Payables
Investment securities purchased 6,687,027
Fund shares repurchased 537,851
Distribution fee 866,718
Investment advisory fee 324,907
Administration fee 204,597
Trustees' fee 4,888
Accrued expenses 8,251
--------------
Total liabilities 8,634,239
--------------
NET ASSETS $ 501,430,910
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 224,653,985
Undistributed net investment loss (1,869,174)
Accumulated net realized gain 43,777,564
Net unrealized appreciation 234,868,535
--------------
NET ASSETS $ 501,430,910
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $407,689,757) 16,790,235
Net asset value per share $24.28
Offering price per share
$24.28/(1-4.75%) $25.49
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $61,359,429) 2,642,844
Net asset value and offering price per share $23.22
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $32,262,843) 1,389,602
Net asset value and offering price per share $23.22
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $118,881) 4,866
Net asset value per share $24.43
Offering price per share
$24.43/(1-3.50%) $25.32
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,026,000
Interest 253,634
Foreign taxes withheld (1,553)
-------------
Total investment income 2,278,081
-------------
EXPENSES
Investment advisory fee 1,952,978
Distribution fee--Class A 492,371
Distribution fee--Class B 288,829
Distribution fee--Class C 152,377
Distribution fee--Class M 244
Administration 1,229,624
Professional 23,559
Trustees 7,273
-------------
Total expenses 4,147,255
-------------
NET INVESTMENT LOSS (1,869,174)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 40,339,938
Net realized loss on foreign currency transactions (11,008)
Net change in unrealized appreciation (depreciation) on
investments 44,799,275
-------------
NET GAIN ON INVESTMENTS 86,128,205
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 83,259,031
-------------
-------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (1,869,174) $ (4,678,000)
Net realized gain 40,328,930 95,837,000
Net change in unrealized appreciation
(depreciation) 44,799,275 (18,157,000)
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 83,259,031 73,002,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- --
Net investment income--Class B -- --
Net investment income--Class C -- --
Net investment income--Class M -- --
Net realized gains--Class A -- (74,825,000)
Net realized gains--Class B -- (10,906,000)
Net realized gains--Class C -- (5,880,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (91,611,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (270,691
and 419,000 shares, respectively) 6,101,712 9,864,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 3,374,000 shares,
respectively) -- 66,573,000
Cost of shares repurchased (2,246,476
and 4,478,000 shares, respectively) (50,196,284) (106,146,000)
-------------- ------------------
Total (44,094,572) (29,709,000)
-------------- ------------------
CLASS B
Proceeds from sales of shares (150,075
and 284,000 shares, respectively) 3,249,661 6,477,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 529,000 shares, respectively) -- 10,026,000
Cost of shares repurchased (274,362
and 357,000 shares, respectively) (5,940,567) (8,373,000)
-------------- ------------------
Total (2,690,906) 8,130,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (79,461
and 187,000 shares, respectively) 1,728,782 4,261,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 284,000 shares, respectively) -- 5,374,000
Cost of shares repurchased (179,693
and 254,000 shares, respectively) (3,841,881) (5,945,000)
-------------- ------------------
Total (2,113,099) 3,690,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (4,866
and 0 shares, respectively) 100,100 --
-------------- ------------------
Total 100,100 --
-------------- ------------------
DECREASE IN NET ASSETS FROM SHARE
TRANSACTIONS (48,798,477) (17,889,000)
-------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS 34,460,554 (36,498,000)
NET ASSETS
Beginning of period 466,970,356 503,468,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($1,869,174) AND $0, RESPECTIVELY) $501,430,910 $466,970,000
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 20.43 $ 21.94 $ 19.28 $ 15.40 $ 16.00 $ 17.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.07) (0.16)(2) (0.14)(3) (0.06) (0.03) (0.02)
Net realized and unrealized gain 3.92 3.51 4.47 4.24 (0.57) (0.98)
------ ----------- ----------- ----------- ----------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 3.85 3.35 4.33 4.18 (0.60) (1.00)
------ ----------- ----------- ----------- ----------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- -- -- -- -- --
Dividends from net realized gains -- (4.86) (1.67) (0.30) -- --
------ ----------- ----------- ----------- ----------- ----------
TOTAL DISTRIBUTIONS -- (4.86) (1.67) (0.30) -- --
------ ----------- ----------- ----------- ----------- ----------
Change in net asset value 3.85 (1.51) 2.66 3.88 (0.60) (1.00)
------ ----------- ----------- ----------- ----------- ----------
NET ASSET VALUE, END OF PERIOD $ 24.28 $ 20.43 $ 21.94 $ 19.28 $ 15.40 $ 16.00
------ ----------- ----------- ----------- ----------- ----------
------ ----------- ----------- ----------- ----------- ----------
Total return(4) 18.84%(6) 16.04%(2) 22.49%(3) 27.16% (3.75)% (5.87)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $407,690 $383,481 $426,785 $415,416 $391,831 $532,208
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.58%(5) 1.6%(2) 1.6%(3) 1.6% 1.6% 1.6%
Net investment income (loss) (0.64)%(5) (0.7)%(2) (0.6)%(3) (0.3)% (0.2)% --%
Portfolio turnover 61%(6) 70.6% 70.1% 65.9% 53.8% 22.9%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 19.61 $ 21.40 $ 18.99 $ 15.28 $ 15.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.15) (0.34)(2) (0.31)(3) (0.20) (0.14)
Net realized and unrealized gain 3.76 3.41 4.39 4.21 (0.47)
------ ----------- ----------- --------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 3.61 3.07 4.08 4.01 (0.61)
------ ----------- ----------- --------- -----------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains -- (4.86) (1.67) (0.30) --
------ ----------- ----------- --------- -----------
TOTAL DISTRIBUTIONS -- (4.86) (1.67) (0.30) --
------ ----------- ----------- --------- -----------
Change in net asset value 3.61 (1.79) 2.41 3.71 (0.61)
------ ----------- ----------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 23.22 $ 19.61 $ 21.40 $ 18.99 $ 15.28
------ ----------- ----------- --------- -----------
------ ----------- ----------- --------- -----------
Total return(4) 18.41%(6) 15.13%(2) 21.52%(3) 26.26% (3.84)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $61,359 $54,267 $49,444 $34,786 $11,349
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33%(5) 2.4%(2) 2.3%(3) 2.4% 2.3%
Net investment income (loss) (1.39)%(5) (1.5)%(2) (1.5)%(3) (1.1)% (1.0)%
Portfolio turnover 61%(6) 70.6% 70.1% 65.9% 53.8%
</TABLE>
8 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS M
CLASS C ----------
----------------------------------------------------------------------- FROM
SIX MONTHS INCEPTION
ENDED 1/20/98 TO
6/30/98 YEAR ENDED DECEMBER 31, 6/30/98
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED)
------------ ---------- ---------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 19.61 $ 21.40 $ 18.99 $ 15.28 $ 15.89 $ 20.57
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.15) (0.34)(2) (0.31)(3) (0.20) (0.14) (0.08)
Net realized and unrealized gain 3.76 3.41 4.39 4.21 (.47) 3.94
------------ ---------- ---------- -------- --------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 3.61 3.07 4.08 4.01 (.61) 3.86
------------ ---------- ---------- -------- --------- ----------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- -- --
Dividends from net realized gains -- (4.86) (1.67) (0.30) -- --
------------ ---------- ---------- -------- --------- ----------
TOTAL DISTRIBUTIONS -- (4.86) (1.67) (0.30) -- --
------------ ---------- ---------- -------- --------- ----------
Change in net asset value 3.61 (1.79) 2.41 3.71 (0.61) 3.86
------------ ---------- ---------- -------- --------- ----------
NET ASSET VALUE, END OF PERIOD $ 23.22 $ 19.61 $ 21.40 $ 18.99 $ 15.28 $ 24.43
------------ ---------- ---------- -------- --------- ----------
------------ ---------- ---------- -------- --------- ----------
Total return(4) 18.41%(6) 15.13%(2) 21.52%(3) 26.26% (3.84)% 18.77%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $32,263 $29,222 $27,239 $20,497 $6,136 119
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33%(5) 2.4%(2) 2.3%(3) 2.4% 2.3% 1.83%(5)
Net investment income (loss) (1.39)%(5) (1.5)%(2) (1.5)%(3) (1.1)% (1.0)% (0.88)%(5)
Portfolio turnover 61%(6) 70.6% 70.1% 65.9% 53.8% 61%(6)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Growth Fund. Such information is
based on the Fund's audited financial statements for the years presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$18,196. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would not have changed.
(3) These amounts reflect the impact of a waiver of administration fees of
$30,000. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $(.14), $(.31) and
$(.31), respectively, 22.49%, 21.52% and 21.52%, respectively, 1.6%, 2.4%
and 2.4%, respectively, and (0.7)%, (1.5)% and (1.5)%, respectively.
(4) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge.
(5) Annualized
(6) Not annualized
See Notes to Financial Statements 9
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE:
The Phoenix-Engemann Nifty Fifty Fund seeks to achieve long-term capital
appreciation by investing in approximately 50 companies management considers to
have the best prospects for appreciation potential.
Q: HOW DID THE FUND PERFORM OVER THE FIRST SIX MONTHS OF 1998?
A: The Nifty Fifty fund's net asset value (NAV) for Class A Shares increased
17.6 percent, only slightly less than the impressive 17.8 percent return of the
S&P 500 Index and ahead of the 15.1 percent return of the average growth fund,
according to Lipper Analytical Services.
Q: WHAT FACTORS MOST IMPACTED THE FUND'S PERFORMANCE?
A: In the first half of 1998, the fund benefited from the market's narrower
focus on a selected group of large-cap stocks. As the Asian economic crisis
contributed to earnings disappointment in a number of U.S. sectors, investors
shifted to solid blue-chip growth sectors. The fund was helped by this trend due
to its concentration in stable growth sectors such as Healthcare and Consumer
Staples. Stock selection was another positive factor contributing to the fund's
performance. For example, Cisco Systems, Lucent Technologies, and Microsoft in
the Technology sector; Kohls Corporation, Lowes Company, and Carnival
Corporation in the Consumer Cyclical sector; and Pfizer, American Home Products,
and Merck & Company in the Healthcare sector significantly outperformed the
market and contributed positively to the fund.
Q: WHICH STOCKS DIDN'T PERFORM SO WELL?
A: Schlumberger, one of our newer holdings, was a disappointment. Schlumberger
is a petroleum exploration and production services company that saw its stock
decline as a result of depressed oil prices. We feel this is a temporary
situation and are optimistic about the long-term picture for the company. The
worst performer was Cendant, a stock that got off to a great start early in the
year, but fell when accounting irregularities were found in one of the company's
business units. After an audit is completed and the air is cleared, we believe
the stock will resume its earlier climb.
Q: WHAT WERE SOME OF THE CHANGES TO THE FUND DURING THE FIRST HALF OF 1998?
A: Given the uncertainties over the Asian economic crisis and its impact on U.S.
companies, the fund increased its exposure to the more stable sectors within the
economy--Health Care and Consumer Staples. For instance, new additions to the
fund included such blue-chip names as Bristol-Myers Squibb, Eli Lilly & Company,
and Campbell Soup Company. The Technology sector was reduced slightly from 17.5
percent in December 1997 to 16.8 percent in June 1998.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND IN 1998?
A: The slowdown in corporate earnings we've been expecting for some time looks
as if it is becoming a reality in 1998. Over the past few years, corporate
earnings have shown tremendous growth, with earnings for the S&P 500 Index
growing at a compound annual growth rate of 17.6 percent since 1993--an
exceptional feat when you consider that, since 1942, the long-term earnings
growth rate for the average S&P 500 company has been approximately 7.1 percent.
As we enter the second half of 1998, earnings growth for the S&P 500 is
expected to slow to its historic rate. In contrast, the Nifty Fifty fund has
performed well when S&P earnings growth is slowing. The fund had some of its
best years, both on an absolute and relative basis, when the S&P 500 Index
produced negative earnings growth. We believe slower earnings growth in the
months ahead will provide an even more attractive setting for the type of stable
growth stocks that are in the Nifty Fifty fund.
10
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/98)
1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
A Shares(2) (INCEPTION: 12/17/90)
NAV 22.06% 24.49% 19.16% 20.02%
POP 16.25% 22.48% 18.00% 19.24%
B Shares(2) (INCEPTION: 1/3/94)
CDSC 17.19% 23.13% - 19.37%
No CDSC 21.19% 23.57% - 19.61%
C Shares(2) (INCEPTION: 1/3/94)
CDSC 20.19% 23.57% - 19.61%
No CDSC 21.19% 23.57% - 19.61%
M Shares(3) (INCEPTION: 1/21/98)
NAV - - - 17.15%
POP - - - 13.05%
S&P 500 Index 30.30% 30.34% 23.13% note 4
SECTOR HOLDINGS (AS A PERCENTAGE OF MARKET VALUE)
Consumer Discretionary 14.0%
Consumer Staples 15.0%
Financial Services 13.0%
Health Care 22.0%
Technology 16.0%
Utilities 3.0%
Cash & Other 17.0%
SECTOR HOLDINGS ARE BASED ON THE BREAKDOWN OF THE RUSSELL 1000 GROWTH INDEX,
AN UNMANAGED INDEX OF 1,000 SECURITIES WITH A GREATER THAN AVERAGE GROWTH
ORIENTATION.
(1) TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
(2) "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE
MAXIMUM FRONT-END 4.75% SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM FRONT-END
SALES CHARGE WAS 5.5%. "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE
THE EFFECT OF ANY SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE (CDSC) IS
APPLIED TO REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT HAVE A SALES
CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B SHARES DECLINE
FROM 5% TO 0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C SHARES ARE 1% IN
THE FIRST YEAR AND 0% THEREAFTER.
(3) CLASS M SHARES ARE NOT CURRENTLY OFFERED.
(4) THE S&P 500 INDEX PERFORMANCE IS 21.08%, 24.79%, 24.79%, 17.60% FOR CLASS
A, B, C AND M, RESPECTIVELY, FOR 10 YEARS OR SINCE INCEPTION DATE AS NOTED.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
NIFTY FIFTY FUND A SHARES(5) AND THE S&P 500 STOCK INDEX(6)
Fund After Maximum Sales Load S&P 500 Stock Index
12/17/90 $9,525.00 $10,000.00
6/28/91 $13,146.34 $11,595.00
6/30/92 $15,101.54 $13,155.00
6/30/93 $15,686.05 $14,945.00
6/30/94 $15,484.83 $15,145.00
6/30/95 $19,538.10 $19,100.00
6/28/96 $23,993.82 $24,088.00
6/30/97 $30,878.54 $32,459.00
6/30/98 $37,690.77 $42,294.00
(5) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY. RETURNS WILL VARY
ON CLASS B AND CLASS C SHARES DUE TO DIFFERING SALES CHARGES.
(6) THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX CONSIDERED TO BE
REPRESENTATIVE OF THE U.S. STOCK MARKET AND INCLUDES REINVESTED DIVIDENDS.
12/17/90 (FUND INCEPTION)
11
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. Pfizer, Inc. 5.0%
Major producer of pharmaceuticals
2. Gillette Co. 3.9%
Global manufacturer of razors
3. American Home Products Corp. 3.6%
Diversified-Healthcare company
4. McDonald's Corp. 3.6%
Fast food restaurant operator
5. Intel Corp. 3.5%
Leading manufacturer of microprocessors
6. Merck & Co., Inc. 3.4%
Leading manufacturer of pharmaceuticals
7. American International Group, Inc. 3.2%
Global provider of insurance and financial services
8. WorldCom, Inc. 3.2%
Comprehensive telecommunications service provider
9. Sears, Roebuck & Co. 3.2%
Leading retailer of apparel, home and automotive
products
10. General Electric Co. 3.1%
Diversified manufacturing and financial services
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMMON STOCKS--96.7%
BANKS (MAJOR REGIONAL)--2.9%
Wells Fargo & Co................................ 26,940 $ 9,940,860
-----------
BEVERAGES (NON-ALCOHOLIC)--4.5%
Coca-Cola Co. (The)............................. 87,850 7,511,175
PepsiCo, Inc.................................... 190,000 7,825,625
-----------
15,336,800
-----------
CHEMICALS--2.0%
Du Pont (E.I.) de Nemours & Co.................. 93,000 6,940,125
-----------
COMMUNICATIONS EQUIPMENT--2.0%
Lucent Technologies, Inc........................ 36,000 2,994,750
Tellabs, Inc. (b)............................... 55,000 3,939,375
-----------
6,934,125
-----------
COMPUTERS (HARDWARE)--2.4%
Compaq Computer Corp............................ 103,200 2,928,300
Hewlett-Packard Co. ............................ 89,900 5,382,762
-----------
8,311,062
-----------
COMPUTERS (NETWORKING)--2.6%
Cisco Systems, Inc. (b)......................... 98,625 9,079,664
-----------
COMPUTERS (SOFTWARE & SERVICES)--3.7%
Microsoft Corp. (b)............................. 84,400 9,146,850
Oracle Corp. (b)................................ 137,550 3,378,572
-----------
12,525,422
-----------
CONSUMER FINANCE--.5%
MBNA Corp....................................... 50,000 1,650,000
-----------
ELECTRICAL EQUIPMENT--3.1%
General Electric Co............................. 115,000 10,465,000
-----------
ELECTRONICS (SEMICONDUCTORS)--5.5%
Intel Corp...................................... 161,500 $11,971,187
Texas Instruments, Inc.......................... 120,000 6,997,500
-----------
18,968,687
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
ENTERTAINMENT--3.4%
Carnival Corp................................... 139,700 5,535,612
Walt Disney Co. (The)........................... 58,200 6,114,637
-----------
11,650,249
-----------
FINANCIAL (DIVERSIFIED)--5.4%
American Express Co............................. 70,250 8,008,500
FHLMC........................................... 168,250 7,918,266
FNMA............................................ 43,800 2,660,850
-----------
18,587,616
-----------
FOODS--0.9%
Kellogg Co. .................................... 80,000 3,005,000
-----------
HEALTH CARE (DIVERSIFIED)--7.5%
American Home Products Corp. ................... 240,000 12,420,000
Bristol-Myers Squibb Co. ....................... 50,000 5,746,875
Johnson & Johnson............................... 100,000 7,375,000
-----------
25,541,875
-----------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--10.5%
Lilly (Eli) & Co................................ 74,000 4,888,625
Merck & Co., Inc................................ 88,300 11,810,125
Pfizer, Inc..................................... 156,950 17,058,503
Schering-Plough Corp............................ 25,000 2,290,625
-----------
36,047,878
-----------
HEALTH CARE (HOSPITAL MANAGEMENT)--2.2%
Columbia/HCA Healthcare Corp. .................. 260,000 7,572,500
-----------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.2%
Medtronic, Inc. ................................ 116,300 7,414,125
-----------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.7%
<S> <C> <C>
Colgate-Palmolive Co............................ 65,600 $ 5,772,800
-----------
INSURANCE (MULTI-LINE)--4.1%
American International Group, Inc. ............. 75,000 10,950,000
Travelers Group, Inc. .......................... 50,000 3,031,250
-----------
13,981,250
-----------
MANUFACTURING (DIVERSIFIED)--3.0%
Minnesota Mining & Manufacturing Co............. 45,000 3,698,438
United Technologies Corp........................ 70,000 6,475,000
-----------
10,173,438
-----------
OIL & GAS (DRILLING & EQUIPMENT)--2.2%
Schlumberger Ltd................................ 113,000 7,719,313
-----------
PERSONAL CARE--3.9%
Gillette Co. ................................... 237,600 13,468,950
-----------
RAILROADS--0.7%
Kansas City Southern Industries, Inc............ 50,000 2,481,250
-----------
RESTAURANTS--3.6%
McDonald's Corp................................. 180,000 12,420,000
-----------
RETAIL (BUILDING SUPPLIES)--1.4%
Lowe's Cos., Inc................................ 121,300 4,920,231
-----------
RETAIL (DEPARTMENT STORES)--0.6%
Kohl's Corp. (b)................................ 40,000 2,075,000
-----------
RETAIL (DRUG STORES)--1.1%
Walgreen Co..................................... 95,000 3,924,688
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
RETAIL (GENERAL MERCHANDISE)--3.9%
Sears, Roebuck & Co............................. 177,700 $10,850,806
Staples, Inc. (b)............................... 82,500 2,387,344
-----------
13,238,150
-----------
SERVICES (ADVERTISING/MARKETING)--1.1%
Interpublic Group of Cos., Inc.................. 60,000 3,641,250
-----------
SERVICES (COMMERCIAL & CONSUMER)--1.7%
Cendant Corp. (b)............................... 275,639 5,753,964
-----------
SERVICES (DATA PROCESSING)--0.5%
Automatic Data Processing, Inc.................. 25,000 1,821,875
-----------
TELECOMMUNICATIONS (LONG DISTANCE)--3.2%
WorldCom, Inc. (b).............................. 225,000 10,898,438
-----------
TOBACCO--2.7%
Philip Morris Cos., Inc......................... 232,650 9,160,594
-----------
TOTAL COMMON STOCK
(Identified cost $198,730,511)............................ 331,422,179
-----------
</TABLE>
<TABLE>
<S> <C> <C>
FOREIGN COMMON STOCKS--1.4%
PUBLISHING--1.4%
Reuters Group PLC Sponsored ADR (United
Kingdom)...................................... 68,666 4,703,621
---------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $3,630,183).............................. 4,703,621
---------------
TOTAL INVESTMENTS--98.1%
(Identified cost $202,360,694)............................ 336,125,800(a)
Cash and receivables, less liabilities--1.9%.............. 6,657,431
---------------
NET ASSETS--100.0%.......................................... $342,783,231
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net Unrealized appreciation of investment
securities is comprised of gross appreciation of $136,175,828 and gross
depreciation of $2,410,722 for federal income tax purposes. At June 30,
1998, the aggregate cost of securities for federal income tax purposes was
$202,360,694.
(b) Non-income producing.
See Notes to Financial Statements 13
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $202,360,694) $ 336,125,800
Cash 6,820,079
Receivables
Dividends and interest 300,452
Fund shares sold 773,995
--------------
Total assets 344,020,326
--------------
LIABILITIES
Payables
Fund shares repurchased 309,238
Distribution fee 545,663
Investment advisory fee 222,547
Administration fee 140,633
Trustees' fee 1,095
Accrued expenses 17,919
--------------
Total liabilities 1,237,095
--------------
NET ASSETS $ 342,783,231
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 188,074,750
Undistributed net investment loss (1,205,836)
Accumulated net realized gain 22,149,211
Net unrealized appreciation 133,765,106
--------------
NET ASSETS $ 342,783,231
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $215,476,450) 6,273,940
Net asset value per share $34.34
Offering price per share
$34.34/(1-4.75%) $36.05
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $83,113,580) 2,512,460
Net asset value and offering price per share $33.08
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $44,075,943) 1,332,390
Net asset value and offering price per share $33.08
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $117,258) 3,392
Net asset value per share $34.57
Offering price per share
$34.57/(1-3.50%) $35.82
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 1,570,566
Interest 163,641
Foreign taxes withheld (4,014)
-------------
Total investment income 1,730,193
-------------
EXPENSES
Investment advisory fee 1,273,016
Distribution fee--Class A 242,826
Distribution fee--Class B 381,169
Distribution fee--Class C 207,318
Distribution fee--Class M 242
Administration 804,933
Professional 19,252
Trustees 7,273
-------------
Total expenses 2,936,029
-------------
NET INVESTMENT LOSS (1,205,836)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 19,782,223
Net change in unrealized appreciation (depreciation) on
investments 31,363,774
-------------
NET GAIN ON INVESTMENTS 51,145,997
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 49,940,161
-------------
-------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (1,205,836) $ (2,495,000)
Net realized gain 19,782,223 23,555,000
Net change in unrealized appreciation
(depreciation) 31,363,774 21,916,000
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 49,940,161 42,976,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- --
Net investment income--Class B -- --
Net investment income--Class C -- --
Net investment income--Class M -- --
Net realized gains--Class A -- (13,104,000)
Net realized gains--Class B -- (5,183,000)
Net realized gains--Class C -- (3,031,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (21,318,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (997,926
and 1,403,000 shares, respectively) 32,213,148 42,888,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 417,000 shares, respectively) -- 11,853,000
Cost of shares repurchased (761,672
and 1,272,000 shares, respectively) (24,583,990) (38,417,000)
-------------- ------------------
Total 7,629,158 16,324,000
-------------- ------------------
CLASS B
Proceeds from sales of shares (271,049
and 681,000 shares, respectively) 8,286,302 19,549,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 166,000 shares, respectively) -- 4,576,000
Cost of shares repurchased (168,182
and 259,000 shares, respectively) (5,199,376) (7,706,000)
-------------- ------------------
Total 3,086,926 16,419,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (108,793
and 551,000 shares, respectively) 3,341,785 15,687,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 101,000 shares, respectively) -- 2,780,000
Cost of shares repurchased (184,714
and 252,000 shares, respectively) (5,517,385) (7,370,000)
-------------- ------------------
Total (2,175,600) 11,097,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (3,392
and 0 shares, respectively) 100,098 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (0 and 0
shares, respectively) -- --
-------------- ------------------
Total 100,098 --
-------------- ------------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 8,640,582 43,840,000
-------------- ------------------
NET INCREASE IN NET ASSETS 58,580,743 65,498,000
NET ASSETS
Beginning of period 284,202,488 218,704,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($1,205,836) AND $0, RESPECTIVELY) $342,783,231 $284,202,000
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ----------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 29.21 $ 26.50 $ 22.18 $ 17.30 $ 17.12 $ 17.21
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income (loss)(1) (0.08) (0.20)(2) (0.12)(3) (0.05) (0.03) (0.06)
Net realized and
unrealized gain
(loss) 5.21 5.23 6.00 4.93 0.21 (0.03)
------ ----------- ----------- --------- --------- --------
TOTAL FROM
INVESTMENT
OPERATIONS 5.13 5.03 5.88 4.88 0.18 (0.09)
------ ----------- ----------- --------- --------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- -- -- -- --
Dividends from net
realized gains -- (2.32) (1.56) -- -- --
------ ----------- ----------- --------- --------- --------
TOTAL
DISTRIBUTIONS -- (2.32) (1.56) -- -- --
------ ----------- ----------- --------- --------- --------
Change in net asset
value 5.13 2.71 4.32 4.88 0.18 (0.09)
------ ----------- ----------- --------- --------- --------
NET ASSET VALUE, END
OF PERIOD $ 34.34 $ 29.21 $ 26.50 $ 22.18 $ 17.30 $ 17.12
------ ----------- ----------- --------- --------- --------
------ ----------- ----------- --------- --------- --------
Total return(4) 17.56%(6) 19.23%(2) 26.53%(3) 28.21% 1.05% (0.52)%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands) $215,476 $176,378 $145,469 $122,322 $100,596 $134,284
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.60%(5) 1.6%(2) 1.7%(3) 1.9% 1.9% 1.8%
Net investment
income (loss) (0.49)%(5) (0.7)%(2) (0.4)%(3) (0.3)% (0.2)% --%
Portfolio turnover 37%(6) 68.8% 41.9% 26.5% 23.2% 2.2%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 28.24 $ 25.88 $ 21.85 $ 17.17 $ 17.02
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income (loss)(1) (0.19) (0.42)(2) (0.30)(3) (0.21) (0.14)
Net realized and
unrealized gain 5.03 5.10 5.89 4.89 0.29
------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT
OPERATIONS 4.84 4.68 5.59 4.68 0.15
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- -- -- --
Dividends from net
realized gains -- (2.32) (1.56) -- --
------ ------ ------ ------ ------
TOTAL
DISTRIBUTIONS -- (2.32) (1.56) -- --
------ ------ ------ ------ ------
Change in net asset
value 4.84 2.36 4.03 4.68 0.15
------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $ 33.08 $ 28.24 $ 25.88 $ 21.85 $ 17.17
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return(4) 17.14%(6) 18.33%(2) 25.60%(3) 27.26% 0.88%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands) $83,114 $68,051 $47,143 $27,462 $6,722
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.35%(5) 2.4%(2) 2.5%(3) 2.6% 2.6%
Net investment
income (loss) (1.24)%(5) (1.4)%(2) (1.2)%(3) (1.0)% (0.9)%
Portfolio turnover 37%(6) 68.8% 41.9% 26.5% 23.2%
</TABLE>
16 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS M
CLASS C ------------
------------------------------------------------------------------------------------ FROM
SIX MONTHS INCEPTION
ENDED 1/20/98 TO
6/30/98 YEAR ENDED DECEMBER 31, 6/30/98
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED)
------------ ------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 28.24 $ 25.88 $ 21.85 $ 17.17 $ 17.02 $ 29.51
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income (loss)(1) (0.19) (0.42)(2) (0.30)(3) (0.21) (0.15) (0.10)
Net realized and
unrealized gain 5.03 5.10 5.89 4.89 0.30 5.16
------------ ------- ------- ------------ ------------ ------
TOTAL FROM
INVESTMENT
OPERATIONS 4.84 4.68 5.59 4.68 0.15 5.06
------------ ------- ------- ------------ ------------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- -- -- -- --
Dividends from net
realized gains -- (2.32) (1.56) -- -- --
------------ ------- ------- ------------ ------------ ------
TOTAL
DISTRIBUTIONS -- (2.32) (1.56) -- -- --
------------ ------- ------- ------------ ------------ ------
Change in net asset
value 4.84 2.36 4.03 4.68 0.15 5.06
------------ ------- ------- ------------ ------------ ------
NET ASSET VALUE, END
OF PERIOD $ 33.08 $ 28.24 $ 25.88 $ 21.85 $ 17.17 $ 34.57
------------ ------- ------- ------------ ------------ ------
------------ ------- ------- ------------ ------------ ------
Total return(4) 17.14%(6) 18.33%(2) 25.60%(3) 27.26% 0.88% 17.15%(6)
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands) $44,076 $39,773 $26,092 $15,105 $4,283 $117
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.35%(5) 2.4%(2) 2.5%(3) 2.6% 2.6% 1.83%(5)
Net investment
income (loss) (1.24)%(5) (1.4)%(2) (1.2)%(3) (1.0)% (0.9)% (0.66)%(5)
Portfolio turnover 37%(6) 68.8% 41.9% 26.5% 23.2% 37%(6)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Nifty Fifty Fund. Such information
is based on the Fund's audited financial statements for the years presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$42,459. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $(.20), $(.42) and
$(.42), respectively, 19.23%, 18.33% and 18.33%, respectively, 1.6%, 2.4%
and 2.4%, respectively, and (0.7)%, (1.5)% and (1.5)%, respectively.
(3) These amounts reflect the impact of a waiver of administration fees of
$70,000. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $(.13), $(.31) and
$(.31), respectively, 26.48%, 25.55% and 25.55%, respectively, 1.8%, 2.5%
and 2.5%, respectively, and (0.5)%, (1.3)% and (1.3)%, respectively.
(4) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge.
(5) Annualized
(6) Not annualized
See Notes to Financial Statements 17
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE:
The Phoenix-Engemann Balanced Return Fund seeks to maximize total investment
return consistent with reasonable risk by investing in a mix of high-quality
growth stocks and U.S. government securities.
Q: HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 1998?
A: The Phoenix-Engemann Balanced Return Fund's NAV for Class A Shares increased
12.6 percent for the six-month period ended June 30, 1998. This compared
favorably to the average balanced fund which was up 8.9 percent for the same
period, according to Lipper Analytical Services. The fund also did well against
its composite benchmark which was up 12.1 percent for the period. The benchmark
is composed of 60 percent S&P 500 Stock Index, 30 percent Lehman Brothers
Government Corporate Bond Index and 10 percent Treasury Bills.
Q: DISCUSS SOME OF THE TOP PERFORMERS OF THE FUND.
A: Lucent Technologies, which was added to the fund in January, ended the period
as the biggest winner in the portfolio providing a total return of 101%. Other
core holdings of the fund turned in outstanding results: Microsoft, Cisco,
Pfizer and McDonald's were all strong performers with returns in excess of 40%.
We were also encouraged by other new names in the fund such as American
International Group and General Electric. Both of these stocks were bought in
January and provided returns in excess of 20% during the period.
Q: WHAT WERE SOME OF THE NAMES THAT DIDN'T WORK OUT?
A: Cendant was one stock we owned that did not work out. Due to unforeseen
accounting irregularities, the stock was down 40% for the period. In the months
following the news of the accounting irregularities, we replaced the underlying
common stock with Cendant convertible preferred stock. The convertible preferred
stock carries a high yield and also provides some protection to the downside.
Another stock that was a disappointment during the period was Philip Morris.
Philip Morris' stock was adversely affected by the ongoing litigation
surrounding the company. However, we believe that the stock price fully
discounts the problems associated with the litigation. At its current price, we
believe that Philip Morris is set to outperform the market going forward.
Q: WHY DID YOU SHORTEN THE MATURITY OF THE FIXED-INCOME PORTION OF THE PORTFOLIO
DURING THE PERIOD?
A: In the Balanced Return fund, we are constantly looking for ways to reduce the
risk without sacrificing much return. With a relatively flat yield curve in the
second quarter, we saw an opportunity to do this. We sold most of our position
in long-term treasuries and bought shorter-term treasury notes. While we did not
give up much in terms of yield by making these moves, we were able to lower the
volatility of the fixed-income component. Furthermore, the lower maturity of the
fixed-income holdings will provide some cushion to the portfolio if interest
rates should rise.
Q: WHAT IS YOUR OUTLOOK FOR THE BALANCED RETURN FUND?
A: We will continue to focus the equity portion of the portfolio on large-cap
growth companies that are dominant in their respective industries. We believe
the outlook for these companies is excellent and we expect them to experience
high earnings growth, even if the economy slows. The volatility of this fund
should decrease going forward due to the higher level of fixed income in the
portfolio. Overall, we believe the Phoenix-Engemann Balanced Return Fund will
provide good risk-adjusted returns given its current asset mix of 70% equities
and 30% fixed income.
18
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/98)
1 YEAR 3 YEARS 5 YEARS 10 YEARS
A Shares(2) (INCEPTION: 6/8/87)
NAV 20.30% 19.75% 14.94% 15.50%
POP 14.59% 17.82% 13.83% 14.99%
B Shares(2) (INCEPTION: 1/3/94) SINCE INCEPTION
CDSC 15.37% 18.34% - 14.53%
No CDSC 19.37% 18.81% - 14.81%
C Shares(2) (INCEPTION: 1/3/94) SINCE INCEPTION
CDSC 18.33% 18.79% - 14.80%
No CDSC 19.33% 18.79% - 14.80%
M Shares(3) (INCEPTION: 1/21/98) SINCE INCEPTION
NAV - - - 11.32%
POP - - - 7.43%
S&P 500 Index 30.30% 30.34% 23.13% note 4
SECTOR HOLDINGS (AS A PERCENTAGE OF MARKET VALUE)
Consumer Discretionary 8.0%
Consumer Staples 12.0%
Financial Services 7.0%
Government Bonds 30.0%
Health Care 19.0%
Technology 14.0%
Cash & Other 10.0%
SECTOR HOLDINGS ARE BASED ON THE BREAKDOWN OF THE RUSSELL 1000 GROWTH INDEX,
AN UNMANAGED INDEX OF 1,000 SECURITIES WITH A GREATER THAN AVERAGE GROWTH
ORIENTATION.
(1) TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
(2) "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE
MAXIMUM FRONT-END 4.75% SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM FRONT-END
SALES CHARGE WAS 5.5%. "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE
THE EFFECT OF ANY SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE (CDSC) IS
APPLIED TO REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT HAVE A SALES
CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B SHARES DECLINE
FROM 5% TO 0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C SHARES ARE 1% IN
THE FIRST YEAR AND 0% THEREAFTER.
(3) CLASS M SHARES ARE NOT CURRENTLY OFFERED.
(4) THE S&P 500 INDEX PERFORMANCE IS 18.56%, 24.79%, 24.79%, 17.60% FOR CLASS
A, B, C AND M, RESPECTIVELY, FOR 10 YEARS OR SINCE INCEPTION DATE AS NOTED.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
BALANCED RETURN FUND A SHARES(5) AND THE S&P 500 STOCK INDEX(6)
Fund After Maximum Sales Load S&P 500 Stock Index
6/30/88 $9,525.00 $10,000.00
6/89 $11,793.40 $12,039.60
6/90 $14,220.30 $14,004.62
6/91 $15,374.72 $15,040.91
6/92 $17,806.30 $17,065.36
6/93 $18,748.37 $19,387.25
6/94 $18,165.57 $19,646.87
6/95 $21,898.12 $24,776.69
6/96 $25,898.02 $31,247.86
6/97 $31,259.09 $42,107.20
6/98 $37,606.02 $54,865.91
(5) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY FOR THE PAST 10
YEARS. RETURNS WILL VARY ON CLASS B AND CLASS C SHARES DUE TO DIFFERING SALES
CHARGES.
(6) THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX CONSIDERED TO BE A
REPRESENTATIVE OF THE U.S. STOCK MARKET AND INCLUDES REINVESTED DIVIDENDS.
19
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. Gillette Co. 3.9%
Global manufacturer of razors
2. General Electric Co. 3.4%
Diversified manufacturing and financial services
3. Cisco Systems, Inc. 3.2%
Leading producer of switches and routers for
internetworking
4. American Home Products Inc. 3.1%
Diversified Healthcare company
5. Pfizer, Inc. 3.0%
Major producer of pharmaceuticals
6. Lucent Technologies, Inc. 2.6%
Leading telecommunications equipment provider
7. McDonald's Corp. 2.5%
Fast food restaurant operator
8. Merck & Co., Inc. 2.5%
Leading manufacturer of pharmaceuticals
9. Johnson & Johnson 2.4%
Comprehensive healthcare company
10. Intel Corp. 2.3%
Leading manufacturer of microprocessors
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POORS VALUE
RATINGS (000) VALUE
---------- -------- -----------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--29.8%
U.S. TREASURY NOTES--29.8%
U.S. Treasury Notes 5.50%, 5/31/00.......... AAA $ 11,000 $10,997,359
U.S. Treasury Notes 6.50%, 8/15/05.......... AAA 11,499 12,126,269
U.S. Treasury Notes 6%, 2/15/26............. AAA 1,000 1,040,780
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $23,827,943)...................................... 24,164,408
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--1.8%
SERVICES (COMMERCIAL & CONSUMER)--1.8%
Cendant Corp. Cv. Pfd. 7.50%.......................... 39,000 1,460,062
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $1,367,715).................................... 1,460,062
-----------
COMMON STOCKS--64.8%
BANKS (MAJOR REGIONAL)--2.1%
Wells Fargo & Co...................................... 4,630 1,708,470
-----------
BEVERAGES (NON-ALCOHOLIC)--3.7%
Coca-Cola Co. (The)................................... 13,900 1,188,450
PepsiCo, Inc.......................................... 44,650 1,839,022
-----------
3,027,472
-----------
COMMUNICATIONS EQUIPMENT--2.6%
Lucent Technologies, Inc.............................. 25,200 2,096,325
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMPUTERS (HARDWARE)--1.9%
Compaq Computer Corp.................................. 20,000 $ 567,500
Hewlett-Packard Co.................................... 17,010 1,018,474
-----------
1,585,974
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMPUTERS (NETWORKING)--3.2%
Cisco Systems, Inc.(b)................................ 27,870 2,565,782
-----------
COMPUTERS (SOFTWARE & SERVICES)--2.6%
Microsoft Corp.(b).................................... 13,920 1,508,580
Oracle Corp.(b)....................................... 23,300 572,306
-----------
2,080,886
-----------
ELECTRICAL EQUIPMENT--3.4%
General Electric Co................................... 30,000 2,730,000
-----------
ELECTRONICS (SEMICONDUCTORS)--3.7%
Intel Corp............................................ 25,550 1,893,894
Texas Instruments, Inc................................ 19,500 1,137,094
-----------
3,030,988
-----------
ENTERTAINMENT--3.0%
Carnival Corp......................................... 25,500 1,010,437
Walt Disney Co. (The)................................. 13,890 1,459,318
-----------
2,469,755
-----------
FINANCIAL (DIVERSIFIED)--3.8%
American Express Co................................... 11,500 1,311,000
FHLMC................................................. 37,100 1,746,019
-----------
3,057,019
-----------
</TABLE>
20 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
HEALTH CARE (DIVERSIFIED)--7.6%
<S> <C> <C>
American Home Products Corp........................... 49,000 $ 2,535,750
Bristol-Myers Squibb Co............................... 15,000 1,724,062
Johnson & Johnson..................................... 25,950 1,913,812
-----------
6,173,624
-----------
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS)--6.7%
Lilly (Eli) & Co...................................... 15,000 990,938
Merck & Co., Inc...................................... 15,260 2,041,025
Pfizer, Inc........................................... 22,300 2,423,731
-----------
5,455,694
-----------
HEALTH CARE (HOSPITAL MANAGEMENT)--1.9%
Columbia/HCA Healthcare Corp.......................... 54,600 1,590,225
-----------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.2%
Medtronic, Inc........................................ 27,920 1,779,900
-----------
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.2%
Colgate-Palmolive Co.................................. 11,210 986,480
-----------
INSURANCE (MULTI-LINE)--1.4%
American International Group, Inc..................... 7,600 1,109,600
-----------
PERSONAL CARE--3.9%
Gillette Co........................................... 55,300 3,134,819
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
RESTAURANTS--2.5%
McDonald's Corp....................................... 29,450 $ 2,032,050
-----------
RETAIL (DRUG STORES)--1.2%
Walgreen Co........................................... 23,000 950,188
-----------
RETAIL (GENERAL MERCHANDISE)--1.2%
Sears, Roebuck & Co................................... 16,100 983,106
-----------
SERVICES (ADVERTISING/MARKETING)--1.1%
Interpublic Group of Cos., Inc........................ 15,250 925,484
-----------
TELECOMMUNICATIONS (LONG DISTANCE)--2.0%
WorldCom, Inc.(b)..................................... 32,900 1,593,594
-----------
TOBACCO--1.9%
Philip Morris Cos., Inc............................... 40,100 1,578,938
-----------
TOTAL COMMON STOCKS
(Identified cost $26,476,551)................................... 52,646,373
-----------
TOTAL INVESTMENTS--96.4%
(Identified cost $51,672,209)................................... 78,270,843(a)
</TABLE>
<TABLE>
<S> <C> <C>
Cash and receivables, less liabilities--3.6%.................... 2,935,693
-----------
NET ASSETS--100.0%................................................ $81,206,536
-----------
-----------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $26,717,208 and gross
depreciation of $118,574 for federal income tax purposes. At June 30, 1998,
the aggregate cost of securities for federal income tax purposes was
$51,672,209.
(b) Non-income producing.
See Notes to Financial Statements 21
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $51,672,209) $ 78,270,843
Cash 2,768,978
Receivables
Dividends and interest 405,861
Fund shares sold 47,856
-------------
Total assets 81,493,538
-------------
LIABILITIES
Payables
Distribution fee 128,200
Fund shares repurchased 53,172
Investment advisory fee 50,418
Administration fee 37,187
Trustees' fee 4,888
Accrued expenses 13,137
-------------
Total liabilities 287,002
-------------
NET ASSETS $ 81,206,536
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 49,610,519
Undistributed net investment income 483,953
Accumulated net realized gain 4,513,430
Net unrealized appreciation 26,598,634
-------------
NET ASSETS $ 81,206,536
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $65,261,088) 1,994,213
Net asset value per share $32.73
Offering price per share
$32.73/(1-4.75%) $34.36
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $9,270,548) 287,377
Net asset value and offering price per share $32.26
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $6,563,469) 203,172
Net asset value and offering price per share $32.30
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $111,431) 3,393
Net asset value per share $32.84
Offering price per share
$32.84/(1-3.50%) $34.03
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 279,574
Interest 873,781
Foreign taxes withheld (2,537)
-----------
Total investment income 1,150,818
-----------
EXPENSES
Investment advisory fee 291,648
Distribution fee--Class A 76,952
Distribution fee--Class B 42,044
Distribution fee--Class C 30,901
Distribution fee--Class M 232
Administration 215,404
Professional 13,345
Trustees 7,341
-----------
Total expenses 677,867
-----------
NET INVESTMENT INCOME 472,951
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 4,682,707
Net change in unrealized appreciation (depreciation) on
investments 3,767,802
-----------
NET GAIN ON INVESTMENTS 8,450,509
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,923,460
-----------
-----------
</TABLE>
22 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 472,951 $ 562,000
Net realized gain 4,682,707 7,971,000
Net change in unrealized appreciation
(depreciation) 3,767,802 2,552,000
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 8,923,460 11,085,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- (537,000)
Net investment income--Class B -- (22,000)
Net investment income--Class C -- (15,000)
Net investment income--Class M -- --
Net realized gains--Class A -- (6,686,000)
Net realized gains--Class B -- (824,000)
Net realized gains--Class C -- (659,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (8,743,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (269,488
and 173,000 shares, respectively) 8,427,530 5,340,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 233,000 shares, respectively) -- 6,692,000
Cost of shares repurchased (223,680
and 308,000 shares, respectively) (7,013,007) (9,485,000)
-------------- ------------------
Total 1,414,523 2,547,000
-------------- ------------------
CLASS B
Proceeds from sales of shares (82,452
and 92,000 shares, respectively) 2,535,791 2,810,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 28,000 shares, respectively) -- 781,000
Cost of shares repurchased (42,784 and
38,000 shares, respectively) (1,341,809) (1,166,000)
-------------- ------------------
Total 1,193,982 2,425,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (42,690
and 64,000 shares, respectively) 1,284,293 1,952,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 22,000 shares, respectively) -- 633,000
Cost of shares repurchased (33,282 and
42,000 shares, respectively) (1,025,541) (1,322,000)
-------------- ------------------
Total 258,752 1,263,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (3,393
and 0 shares, respectively) 100,098 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (0 and 0
shares, respectively) -- --
-------------- ------------------
Total 100,098 --
-------------- ------------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 2,967,355 6,235,000
-------------- ------------------
NET INCREASE IN NET ASSETS 11,890,815 8,577,000
NET ASSETS
Beginning of period 69,315,721 60,739,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$483,953 AND $11,000, RESPECTIVELY) $81,206,536 $69,316,000
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 23
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 29.05 $ 28.08 $ 25.39 $ 20.54 $ 21.97 $ 21.76
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) 0.21 0.30(2) 0.29(3) 0.27 0.39 0.32
Net realized and
unrealized gain
(loss) 3.47 4.98 4.23 5.31 (1.36) 0.21
------------ --------- --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS 3.68 5.28 4.52 5.58 (0.97) 0.53
------------ --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (0.32) (0.30) (0.29) (0.46) (0.32)
Dividends from net
realized gains -- (3.99) (1.53) (0.44) -- --
------------ --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS -- (4.31) (1.83) (0.73) (0.46) (0.32)
------------ --------- --------- --------- --------- ---------
Change in net asset value 3.68 0.97 2.69 4.85 (1.43) 0.21
------------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 32.73 $ 29.05 $ 28.08 $ 25.39 $ 20.54 $ 21.97
------------ --------- --------- --------- --------- ---------
------------ --------- --------- --------- --------- ---------
Total return(4) 12.63%(6) 18.98%(2) 17.78%(3) 27.18% (4.43)% 2.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $65,261 $56,610 $51,947 $52,028 $53,047 $84,591
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.63%(5) 1.7%(2) 2.0%(3) 2.1% 2.1% 2.1%
Net investment income
(loss) 1.38%(5) 1.0%(2) 1.1%(3) 1.2% 1.8% 1.5%
Portfolio turnover 66%(6) 40.3% 35.1% 51.1% 28.2% 4.8%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------------------
SIX MONTHS
ENDED
6/30/98 YEAR ENDED DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 28.76 $ 27.85 $ 25.26 $ 20.49 $ 21.89
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) 0.10 0.08(2) 0.09(3) 0.08 0.26
Net realized and
unrealized gain
(loss) 3.40 4.93 4.16 5.29 (1.32)
------------ --------- --------- --------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS 3.50 5.01 4.25 5.37 (1.06)
------------ --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (0.11) (0.13) (0.16) (0.34)
Dividends from net
realized gains -- (3.99) (1.53) (0.44) --
------------ --------- --------- --------- ---------
TOTAL DISTRIBUTIONS -- (4.10) (1.66) (0.60) (0.34)
------------ --------- --------- --------- ---------
Change in net asset value 3.50 0.91 2.59 4.77 (1.40)
------------ --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 32.26 $ 28.76 $ 27.85 $ 25.26 $ 20.49
------------ --------- --------- --------- ---------
------------ --------- --------- --------- ---------
Total return(4) 12.17%(6) 18.15%(2) 16.82%(3) 26.20% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $9,271 $7,125 $4,609 $2,721 $1,223
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.39%(5) 2.4%(2) 2.7%(3) 2.9% 2.9%
Net investment income
(loss) 0.64%(5) 0.3%(2) 0.3%(3) 0.3% 1.3%
Portfolio turnover 66%(6) 40.3% 35.1% 51.1% 28.2%
</TABLE>
24 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS M
CLASS C -------------
----------------------------------------------------------------------- FROM
SIX MONTHS INCEPTION
ENDED 1/20/98 TO
6/30/98 YEAR ENDED DECEMBER 31, 6/30/98
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED)
------------ --------- --------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 28.80 $ 27.88 $ 25.28 $ 20.48 $ 21.89 $29.50
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) 0.10 0.08(2) 0.09(3) 0.07 0.25 0.16
Net realized and
unrealized gain
(loss) 3.40 4.92 4.16 5.30 (1.31) 3.18
------------ --------- --------- --------- -------- ------
TOTAL FROM
INVESTMENT
OPERATIONS 3.50 5.00 4.25 5.37 (1.06) 3.34
------------ --------- --------- --------- -------- ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (0.09) (0.12) (0.13) (0.35) --
Dividends from net
realized gains -- (3.99) (1.53) (0.44) -- --
------------ --------- --------- --------- -------- ------
TOTAL DISTRIBUTIONS -- (4.08) (1.65) (0.57) (0.33) --
------------ --------- --------- --------- -------- ------
Change in net asset value 3.50 0.92 2.60 4.80 (1.41) 3.34
------------ --------- --------- --------- -------- ------
NET ASSET VALUE, END OF
PERIOD $ 32.30 $ 28.80 $ 27.88 $ 25.28 $ 20.48 $32.84
------------ --------- --------- --------- -------- ------
------------ --------- --------- --------- -------- ------
Total return(4) 12.15%(6) 18.11%(2) 16.79%(3) 26.23% (4.85)% 11.32%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $6,563 $5,581 $4,183 $2,809 $1,449 $111
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.38%(5) 2.4%(2) 2.7%(3) 2.9% 2.9% 1.87%(5)
Net investment income
(loss) 0.64%(5) 0.3%(2) 0.3%(3) 0.3% 1.3% 1.17%(5)
Portfolio turnover 66%(6) 40.3% 35.1% 51.1% 28.2% 66%(6)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Balanced Return Fund. Such
information is based on the Fund's audited financial statements for the years
presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$33,360. Absent the waiver, net investment income per share, total return
and the ratios of expenses and net investment income to average net assets
for Class A, Class B and Class C shares would have been $.29, $.06 and
$.06, respectively, 18.98%, 18.15% and 18.11%, respectively, 1.7%, 2.5% and
2.5%, respectively, and 0.9%, 0.2% and 0.2%, respectively.
(3) These amounts reflect the impact of a waiver of administration fees of
$55,000. Absent the waiver, net investment income per share, total return
and the ratios of expenses and net investment income to average net assets
for Class A, Class B and Class C shares would have been $.27, $.06 and
$.06, respectively, 17.66%, 16.74% and 16.71%, respectively, 2.1%, 2.8% and
2.8%, respectively, and 1.0%, 0.2% and 0.2%, respectively.
(4) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge.
(5) Annualized
(6) Not annualized
See Notes to Financial Statements 25
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE:
The Phoenix-Engemann Global Growth Fund seeks to achieve long-term growth of
capital by investing in a globally diversified portfolio of equity securities,
which may be traded in securities markets in foreign countries and the United
States. Foreign investing involves special risks such as currency fluctuation
and less public disclosure, as well as economic and political risk.
Q: HOW DID THE FUND PERFORM DURING THE SIX MONTHS ENDED JUNE 30, 1998?
A: The NAV for the Phoenix-Engemann Global Growth Fund's Class A Shares
increased 16.9 percent, nicely ahead of the 14.6 percent return for the MSCI All
Country World Index. The fund also outdistanced the 14.1 percent for the average
global fund according to Lipper Analytical Services.
Q: WHAT WERE THE FACTORS BEHIND THE FUND'S PERFORMANCE DURING THIS PERIOD?
A: In general, the fund has benefited from its significant exposure to the U.S.
and European markets, which have performed well this year, and its minimal
exposure to Asian markets, which have not fared so well. Supported by a
continued favorable economic environment of moderate growth, low inflation and
low interest rates, the U.S. market climbed steadily higher during the first
half of the year.
Most European markets rose sharply during the period in anticipation of the
implementation of the European Monetary Union (EMU) in 1999, continued economic
recovery, and the ongoing corporate restructuring taking place among many
companies. The Japanese market has been a lackluster performer during the period
owing to the country's continued economic stagnation and the lack of meaningful
reforms. Most of the other Asian markets are continuing to suffer from the
after-effects of the currency crisis with many having entered severe recessions.
Q: PLEASE DISCUSS A FEW OF THE STOCKS THAT DID WELL DURING THE PERIOD AS WELL AS
THOSE THAT TURNED IN DISAPPOINTING RESULTS.
A: One of the best performing stocks so far this year has been SAP AG, a
developer of business applications software based in Germany which has
experienced rapid growth in the demand for its products and services. Nokia, the
Finnish wireless communications equipment company, has been another outstanding
performer benefiting from the rapid growth of cellular subscribers around the
world. Other strong performers include ING Group, the Netherlands-based global
insurance and financial services company, and Telefonica de Espana, the Spanish
telecommunications services operator with significant operations in Latin
America.
Among the poor performing stocks during the period were Tecnomatix
Technologies, an Israel-based software company which suffered from a delay in
securing orders for its products, and Cendant, the consumer and business
services firm created by the merger of CUC International and HFS, which
announced that it had discovered irregularities in its accounting policies.
Q: WHAT IS THE OUTLOOK FOR THE FUND FOR THE REMAINDER OF THE YEAR?
A: We are pleased with the fund's performance so far this year and remain
optimistic about the balance of the year. With the exception of the difficulties
in Asia and other selected emerging markets, the outlook for the global economy
is for continued moderate growth and low inflation which is favorable for equity
prices and should continue to support valuations. Although we are cautious about
the outlook for Asia, we are continually looking for investments in the region
and we expect to accumulate positions over time as these economies continue to
go through the process of reform.
26
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/98)
1 YEAR 3 YEARS SINCE INCEPTION
A Shares(2,3) (INCEPTION: 11/1/93)
NAV 13.04% 18.93% 24.31%
POP 7.69% 17.02% 23.02%
B Shares(2) (INCEPTION: 9/18/96)
CDSC 8.01% - 19.45%
No CDSC 12.01% - 21.40%
C Shares(2) (INCEPTION: 10/21/96)
CDSC 10.96% - 20.88%
No CDSC 11.96% - 20.88%
M Shares(4) (INCEPTION: 1/21/98)
NAV - - 17.46%
POP - - 13.34%
MSCI AC World Index 17.03% 19.23% note 5
DIVERSIFICATION BY COUNTRY (TOP COUNTRIES AS OF 6/30/98)
(As a percentage of net assets)
United States 34.0%
United Kingdom 10.0%
Germany 10.0%
Netherlands 7.0%
France 6.0%
Switzerland 5.0%
Mexico 3.0%
Spain 3.0%
Israel 2.0%
(1) ALL RETURN FIGURES ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND
THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
(2) THE "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE
MAXIMUM 4.75% SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM FRONT-END SALES
CHARGE WAS 5.5%. THE "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE THE
EFFECT OF ANY SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE (CDSC) IS
APPLIED TO REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT HAVE A SALES
CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B SHARES DECLINE
FROM 5% TO 0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C SHARES ARE 1% IN
THE FIRST YEAR AND 0% THEREAFTER.
(3) PRIOR TO 9/1/96, THE FUND'S SHARES WERE NOT OFFERED TO THE PUBLIC AND,
ALTHOUGH THE FUND'S PORTFOLIO WAS MANAGED SUBSTANTIALLY IN ACCORDANCE WITH
THE INVESTMENT POLICIES AND OBJECTIVE DESCRIBED IN THE PROSPECTUS DURING THAT
PERIOD, SOME MANAGEMENT DIFFERENCES DID OCCUR DUE PRIMARILY TO THE FUND'S
SMALL ASSET SIZE. ACCORDINGLY, THE FUND'S PERFORMANCE DURING PERIODS PRIOR TO
9/1/96 MAY NOT BE RELEVANT TO AN ASSESSMENT OF SUCH FUND'S PERFORMANCE
SUBSEQUENT TO SUCH DATE. ADDITIONALLY, THE MANAGER WAIVED ALL MANAGEMENT,
ADMINISTRATIVE AND SERVICE FEES OTHERWISE PAYABLE TO IT BY THE FUND FOR THE
INDICATED PERIODS, WHICH HAD THE EFFECT OF INCREASING THE FUND'S TOTAL RETURN
FOR THOSE PERIODS.
(4) CLASS M SHARES ARE NOT CURRENTLY OFFERED.
(5) THE MSCI AC WORLD INDEX PERFORMANCE IS 15.80%, 19.64%, 20.48% AND 12.13%
FOR CLASS A, B, C AND M, RESPECTIVELY, SINCE INCEPTION DATE AS NOTED.
ALL RETURNS REPRESENT PAST PERFORMANCE, WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
GLOBAL GROWTH FUND A SHARES(6) AND THE MSCI AC WORLD INDEX(7)
Fund After Maximum Sales Load MSCI AC World Index
11/1/93 $9,525.00 $10,000.00
6/94 $11,114.29 $10,383.72
6/95 $15,619.05 $11,423.96
6/96 $17,965.47 $14,183.95
6/97 $23,244.46 $17,322.03
6/98 $26,275.75 $19,589.00
(6) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY. RETURNS WILL
VARY ON CLASS B AND CLASS C SHARES DUE TO DIFFERING SALES CHARGES.
(7) MSCI AC WORLD (MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRY WORLD
INDEX). THE MSCI AC WORLD IS AN UNMANAGED INDEX OF OVER 1,460 SECURITIES ON
THE STOCK EXCHANGES OF 22 COUNTRIES.
11/1/93 (FUND INCEPTION)
27
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. SAP AG Sponsored ADR 5.3%
Business applications software
2. Telefonica de Espana SA Sponsored ADR 3.4%
Telecommunications services
3. ING Groep NV 3.2%
Financial services
4. Gillette Co. 2.6%
Global manufacturer of razors
5. Zurich Versicherungs Gesellschaft 2.6%
NY Registered Shares
Financial services
6. Pfizer, Inc. 2.4%
Major producer of pharmaceuticals
7. Hoechst AG 2.4%
Life sciences
8. Amvescap PLC Sponsored ADR 2.3%
Asset management
9. Novartis AG 2.2%
Major producer of pharmaceuticals
10. Vivendi 2.2%
Diversified industrial services
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
COMMON STOCKS--33.9%
UNITED STATES--33.9%
American Express Co. (Consumer Finance)............... 1,860 $ 212,040
American Home Products Corp. (Health Care (Drugs -
Major Pharmaceuticals))............................. 2,920 151,110
American International Group, Inc. (Insurance
(Multi-Line))....................................... 1,380 201,480
Carnival Corp. (Leisure Time (Products)).............. 4,960 196,540
Cendant Corp. (Services (Commercial & Consumer))(b)... 10,234 213,635
Central European Media Enterprises Ltd. Class A
(Broadcasting (Television, Radio & Cable))(b)....... 6,600 142,725
Cisco Systems, Inc. (Computers (Networking))(b)....... 2,870 264,219
Coca-Cola Co. (The) (Beverages (Non-Alcoholic))....... 1,900 162,450
Colgate-Palmolive Co. (Household Products
(Non-Durables))..................................... 1,725 151,800
Columbia/HCA Healthcare Corp. (Health Care (Hospital
Management))........................................ 5,340 155,527
Compaq Computer Corp. (Computers (Hardware)).......... 2,640 74,910
FHLMC (Financial (Diversified))....................... 6,395 300,965
FNMA (Financial (Diversified))........................ 4,565 277,324
Federated Investors, Inc. (Financial (Diversified))... 11,750 217,375
General Electric Co. (Electrical Equipment)........... 2,655 241,605
Gillette Co. (Personal Care).......................... 11,340 642,836
Hewlett-Packard Co. (Computers (Hardware))............ 2,290 137,114
Intel Corp. (Electronics (Semiconductors))............ 2,290 169,746
Interpublic Group of Cos., Inc. (Services
(Advertising/Marketing))............................ 2,100 127,444
Johnson & Johnson (Health Care (Diversified))......... 4,160 306,800
Lilly (Eli) & Co. (Health Care (Drugs - Major
Pharmaceuticals))................................... 1,135 74,981
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
UNITED STATES--CONTINUED
McDonald's Corp. (Restaurants)........................ 4,510 $ 311,190
Medtronic, Inc. (Health Care (Medical Products &
Supplies)).......................................... 3,425 218,344
Merck & Co., Inc. (Health Care (Drugs - Major
Pharmaceuticals))................................... 2,870 383,862
Microsoft Corp. (Computers (Software &
Services))(b)....................................... 1,510 163,646
Oracle Corp. (Computers (Software & Services))(b)..... 4,030 98,987
PepsiCo, Inc. (Beverages (Non-Alcoholic))............. 7,970 328,264
Pfizer, Inc. (Health Care (Drugs - Major
Pharmaceuticals))................................... 5,475 595,064
Philip Morris Cos., Inc. (Tobacco).................... 6,220 244,913
Restoration Hardware, Inc. (Retail (Specialty))(b).... 10,000 251,250
Schlumberger Ltd. (Oil & Gas (Drilling &
Equipment))......................................... 2,530 172,831
Sears, Roebuck & Co. (Retail (General Merchandise))... 1,245 76,023
Texas Instruments, Inc. (Electronics
(Semiconductors))................................... 2,240 130,620
Unigraphics Solutions, Inc. (Computers (Software &
Services))(b)....................................... 25,000 350,000
Waddell & Reed Financial, Inc. Class A (Financial
(Diversified))...................................... 3,190 76,361
Walt Disney Co. (The) (Entertainment)................. 1,735 182,283
Wells Fargo & Co. (Banks (Major Regional))............ 925 341,325
-----------
8,347,589
-----------
TOTAL COMMON STOCKS
(Identified cost $7,247,314).................................. 8,347,589
-----------
FOREIGN COMMON STOCKS--60.4%
ARGENTINA--1.0%
Banco de Galicia y Buenos Aires SA de C.V. Sponsored
ADR (Banks (Major Regional))........................ 5,992 109,354
</TABLE>
28 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
ARGENTINA--CONTINUED
<S> <C> <C>
S.A. Importadora y Exportadora de la Patagonia Class B
(Retail (Food Chains)).............................. 8,700 $ 129,210
-----------
238,564
-----------
BRAZIL--1.9%
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar Sponsored ADR (Retail (Food Chains))......... 10,400 235,300
Telecomunicacoes Brasileiras SA Sponsored ADR
(Telephone)......................................... 2,200 240,212
-----------
475,512
-----------
CANADA--1.8%
Renaissance Energy Ltd. (Oil & Gas (Exploration &
Production))........................................ 29,000 434,840
-----------
CHILE--0.4%
Distribucion y Servicio SA ADR (Retail (Food
Chains))............................................ 7,200 108,000
-----------
CHINA--0.3%
Huaneng Power International, Inc. Sponsored ADR
(Electric Companies)................................ 5,800 77,937
-----------
FINLAND--1.8%
Nokia Corp. Sponsored ADR Class A (Communications
Equipment).......................................... 6,100 442,631
-----------
FRANCE--6.3%
AXA-UAP Sponsored ADR (Insurance (Life/ Health))(b)... 3,000 170,437
Elf Aquitane SA Sponsored ADR (Oil (International
Integrated))........................................ 7,150 507,650
Rhone-Poulenc Class A (Health Care (Drugs - Major
Pharmaceuticals))................................... 6,000 338,404
Vivendi (Industrial).................................. 2,500 533,821
-----------
1,550,312
-----------
GERMANY--9.8%
Daimler Benz AG Sponsored ADR (Automobiles)........... 3,740 363,949
Hoechst AG (Chemicals)................................ 11,800 589,010
SAP AG Sponsored ADR (Computers (Software &
Services))(b)....................................... 5,750 1,299,460
Siemens AG (Manufacturing (Diversified)).............. 2,500 152,075
-----------
2,404,494
-----------
HONG KONG--0.1%
Founder Hong Kong Ltd. (Computers (Software &
Services))(b)....................................... 49,705 21,169
-----------
IRELAND--1.6%
Elan Corp. PLC Sponsored ADR (Health Care (Medical
Products & Supplies))(b)............................ 6,100 392,306
-----------
ISRAEL--2.4%
NICE-Systems Ltd. Sponsored ADR (Computers (Software &
Services))(b)....................................... 8,000 300,000
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
ISRAEL--CONTINUED
Tecnomatix Technologies Ltd. Sponsored ADR (Computers
(Software & Services))(b)........................... 14,000 $ 280,000
-----------
580,000
-----------
ITALY--0.9%
Luxottica Group SPA Sponsored ADR (Health Care
Diversified Miscellaneous).......................... 14,000 217,000
-----------
JAPAN--0.6%
Sony Corp. Sponsored ADR (Electronics
(Instrumentation)).................................. 1,800 154,912
-----------
KOREA--0.4%
Kookmin Bank Sponsored GDR 144A (Banks (Money
Center))(b)(c)...................................... 22,265 87,390
-----------
MEXICO--3.0%
Cifra SA de C.V. ADR Class V (Retail (General
Merchandise))(b).................................... 14,301 213,639
Coca-Cola Femsa SA Sponsored ADR (Beverages
(Non-Alcoholic)).................................... 24,750 430,031
Panamerican Beverages Class A (Beverages
(Alcoholic))........................................ 3,000 94,313
-----------
737,983
-----------
NETHERLANDS--6.7%
Baan Co. NV (Computers (Software & Services))(b)...... 9,200 328,900
ING Groep NV (Banks (Money Center))................... 11,958 783,006
Royal Philips Electronics NV (Household Furnishings &
Appliances)......................................... 2,100 178,500
Wolters Kluwer NV (Publishing)........................ 2,626 360,423
-----------
1,650,829
-----------
PERU--1.2%
Telefonica del Peru SA Sponsored ADR (Telephone)(b)... 15,000 306,563
-----------
SINGAPORE--0.8%
Datacraft Asia Ltd. (Communications Equipment)........ 86,000 206,400
-----------
SPAIN--3.4%
Telefonica de Espana SA Sponsored ADR (Telephone)..... 6,000 834,375
-----------
SWEDEN--1.7%
Telefonaktiebolaget LM Ericsson Sponsored ADR
(Telecommunications (Long Distance))................ 15,000 429,375
-----------
SWITZERLAND--4.9%
Novartis AG NY Registered Shares (Health Care
(Diversified))...................................... 330 549,126
</TABLE>
See Notes to Financial Statements 29
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
SWITZERLAND--CONTINUED
<S> <C> <C>
Zurich Versicherungs Gesellschaft NY Registered Shares
(Insurance (Multi-Line))............................ 1,020 650,945
-----------
1,200,071
-----------
UNITED KINGDOM--9.4%
Amvescap PLC Sponsored ADR (Banks (Major Regional))... 11,400 $ 560,025
Hays PLC (Professional Services)...................... 18,500 310,525
Ladbroke Group PLC (Gaming, Lottery & Parimutuel
Companies).......................................... 72,574 400,505
Rentokil Initial PLC (Services (Facilities &
Environmental))..................................... 40,000 287,983
Reuters Group PLC Sponsored ADR (Publishing).......... 4,486 307,291
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
UNITED KINGDOM--CONTINUED
Vodafone Group PLC Sponsored ADR
(Telephone)......................................... 3,600 453,825
-----------
2,320,154
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $12,363,287)................................. 14,870,817
-----------
TOTAL LONG-TERM INVESTMENTS--94.3%
(Identified cost $19,610,601)................................. 23,218,406
-----------
TOTAL INVESTMENTS--94.3%
(Identified cost $19,610,601)................................. 23,218,406(a)
</TABLE>
<TABLE>
<S> <C> <C>
Cash and receivables, less liabilities--5.7%................... 1,411,356
-----------
NET ASSETS--100.0%............................................... $24,629,762
-----------
-----------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,390,029 and gross
depreciation of $782,224 for federal income tax purposes. At June 30, 1998,
the aggregate cost of securities for federal income tax purposes was
$19,610,601.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1998,
these securities amounted to a value of $87,390 or 0.4% of net assets.
30 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Automobiles............................................. 1.6%
Banks (Major Regional).................................. 4.4
Banks (Money Center).................................... 3.8
Beverages (Alcoholic)................................... 0.4
Beverages (Non-Alcoholic)............................... 4.0
Broadcasting (Television Radio Cable)................... 0.6
Chemicals............................................... 2.5
Communications Equipment................................ 2.8
Computer Software & Services............................ 12.2
Computers (Hardware).................................... 0.9
Computers (Networking).................................. 1.1
Consumer Finance........................................ 0.9
Electric Companies...................................... 0.3
Electrical Equipment.................................... 1.0
Electronics (Instrumentation)........................... 0.7
Electronics (Semiconductors)............................ 1.3
Entertainment........................................... 0.8
Financial (Diversified)................................. 3.8
Gaming, Lottery, Parimutuel Cos......................... 1.7
Health Care (Diversified)............................... 3.0
Health Care (Diversified Miscellaneous)................. 0.9
Health Care (Drugs - Major Pharmaceuticals)............. 7.3
Health Care (Hospital Management)....................... 0.7
Health Care (Medical Products & Supplies)............... 2.6
Household Furnishings & Appliances...................... 0.8
Household Products (Non-Durables)....................... 0.7
Industrial.............................................. 2.3
Insurance (Life/Health)................................. 0.7
Insurance (Multi-line).................................. 3.7
Leisure (Time Products)................................. 0.9
Manufacturing (Diversified)............................. 0.7
Oil & Gas (Drilling & Equipment)........................ 0.7
Oil & Gas (Exploration & Production).................... 1.9
Oil (International Integrated).......................... 2.2
Personal Care........................................... 2.8
Professional Services................................... 1.3
Publishing.............................................. 2.9
Restaurants............................................. 1.3
Retail (Food Chains).................................... 2.0
Retail (General Merchandise)............................ 1.3
Retail (Specialty)...................................... 1.1
Services (Advertising/Marketing)........................ 0.5
Services (Commercial & Consumer)........................ 0.9
Services (Facilities & Environmental)................... 1.2
Telecommunications (Long Distance)...................... 1.8
Telephone............................................... 7.9
Tobacco................................................. 1.1
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements 31
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $19,610,601) $ 23,218,406
Cash 1,471,740
Receivables
Dividends and interest 35,184
Fund shares sold 37,577
-------------
Total assets 24,762,907
-------------
LIABILITIES
Payables
Investment securities purchased 63,750
Investment advisory fee 15,042
Distribution fee 21,422
Administration fee 15,802
Trustees' fee 6,805
Fund shares repurchased 100
Accrued expenses 10,224
-------------
Total liabilities 133,145
-------------
NET ASSETS $ 24,629,762
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 20,758,027
Undistributed net investment loss (72,779)
Accumulated net realized gain 336,709
Net unrealized appreciation 3,607,805
-------------
NET ASSETS $ 24,629,762
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $15,361,553) 662,434
Net asset value per share $23.19
Offering price per share
$23.19/(1-4.75%) $24.35
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,590,737) 200,869
Net asset value and offering price per share $22.85
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,559,899) 199,634
Net asset value and offering price per share $22.84
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $117,573) 5,050
Net asset value per share $23.28
Offering price per share
$23.28/(1-3.50%) $24.12
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 192,415
Interest 1,687
Foreign taxes withheld (13,458)
-----------
Total investment income 180,644
-----------
EXPENSES
Investment advisory fee 125,290
Distribution fee--Class A 17,953
Distribution fee--Class B 20,416
Distribution fee--Class C 21,177
Distribution fee--Class M 248
Administration 68,340
Professional 11,979
Trustees 7,273
-----------
Total expenses 272,676
Less expenses borne by investment adviser (19,253)
-----------
Net expenses 253,423
-----------
NET INVESTMENT LOSS (72,779)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 133,267
Net realized gain on foreign currency transactions 5,442
Net change in unrealized appreciation (depreciation) on
investments 3,344,606
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (1,672)
-----------
NET GAIN ON INVESTMENTS 3,481,643
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,408,864
-----------
-----------
</TABLE>
32 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (72,779) $ (149,000)
Net realized gain 138,709 760,000
Net change in unrealized appreciation
(depreciation) 3,342,934 203,000
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 3,408,864 814,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- --
Net investment income--Class B -- --
Net investment income--Class C -- --
Net investment income--Class M -- --
Net realized gains--Class A -- (703,000)
Net realized gains--Class B -- (217,000)
Net realized gains--Class C -- (238,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (1,158,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (190,575
and 391,000 shares, respectively) 4,067,222 8,211,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 34,000 shares, respectively) -- 653,000
Cost of shares repurchased (131,360
and 223,000 shares, respectively) (2,832,677) (4,567,000)
-------------- ------------------
Total 1,234,545 4,297,000
-------------- ------------------
CLASS B
Proceeds from sales of shares (48,818
and 138,000 shares, respectively) 1,032,346 2,861,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 10,000 shares, respectively) -- 199,000
Cost of shares repurchased (16,484 and
25,000 shares, respectively) (353,128) (492,000)
-------------- ------------------
Total 679,218 2,568,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (26,361
and 180,000 shares, respectively) 567,620 3,790,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 11,000 shares, respectively) -- 200,000
Cost of shares repurchased (19,375 and
4,000 shares, respectively) (421,245) (84,000)
-------------- ------------------
Total 146,375 3,906,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (5,050
and 0 shares, respectively) 100,098 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (0 and 0
shares, respectively) -- --
-------------- ------------------
Total 100,098 --
-------------- ------------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 2,160,236 10,771,000
-------------- ------------------
NET INCREASE IN NET ASSETS 5,569,100 10,427,000
NET ASSETS
Beginning of period 19,060,662 8,634,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($72,779) AND $0, RESPECTIVELY) $ 24,629,762 $ 19,061,000
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 33
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------------------
INCEPTION
(NOVEMBER 1,
1993)
SIX MONTHS THROUGH
ENDED 6/30/98 YEAR ENDED DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
------------- --------- --------- ------ --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 19.83 $ 19.06 $ 17.27 $14.06 $ 11.18 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS(8):
Net investment income
(loss)(1) (0.04)(7) (0.19)(2) 0.03(3) 0.24(3) 0.10(3) 0.01(3)
Net realized and
unrealized gain 3.40 2.29 3.55 3.11 2.78 1.17
------ --------- --------- ------ --------- ------
TOTAL FROM
INVESTMENT
OPERATIONS 3.36 2.10 3.58 3.35 2.88 1.18
------ --------- --------- ------ --------- ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- (0.04) -- -- --
Dividends from net
realized gains -- (1.33) (1.75) (0.14) -- --
------ --------- --------- ------ --------- ------
TOTAL DISTRIBUTIONS -- (1.33) (1.79) (0.14) -- --
------ --------- --------- ------ --------- ------
Change in net asset value 3.36 0.77 1.79 3.21 2.88 1.18
------ --------- --------- ------ --------- ------
NET ASSET VALUE, END OF
PERIOD $ 23.19 $ 19.83 $ 19.06 $17.27 $ 14.06 $ 11.18
------ --------- --------- ------ --------- ------
------ --------- --------- ------ --------- ------
Total return(4) 16.94%(6) 11.27%(2) 21.77%(3) 23.84%(3) 25.76%(3) 11.80%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $15,362 $11,964 $7,654 $3,203 $141 $112
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.95%(5) 2.0%(2) 0.8%(3) --%(3) %--(3) --%(3)
Net investment income
(loss) (0.37)%(5) (0.9)%(2) 0.1%(3) 1.4%(3) 0.8%(3) 0.8%(3)
Portfolio turnover 48%(6) 237.2% 220.3% 29.0% 479.3% 215.8%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER
6/30/98 31,
(UNAUDITED) 1997 1996
----------- -------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period $ 19.65 $ 19.04 $ 17.44
INCOME FROM INVESTMENT
OPERATIONS(8):
Net investment income
(loss)(1) (0.12)(7) (0.35)(2) (0.08)
Net realized and
unrealized gain 3.32 2.29 1.82
----------- -------- --------
TOTAL FROM
INVESTMENT
OPERATIONS 3.20 1.94 1.74
----------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- --
Dividends from net
realized gains -- (1.33) (0.14)
----------- -------- --------
TOTAL DISTRIBUTIONS -- (1.33) (0.14)
----------- -------- --------
Change in net asset value 3.20 0.61 1.60
----------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 22.85 $ 19.65 $ 19.04
----------- -------- --------
----------- -------- --------
Total return(4) 16.28%(6) 10.44%(2) 9.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $4,591 $3,312 $874
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.70%(5) 2.8%(2) 2.7%
Net investment income
(loss) (1.10)%(5) (1.7)%(2) (1.9)%
Portfolio turnover 48%(6) 237.2% 220.3%
</TABLE>
34 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS M
CLASS C -------------
----------------------------------------- FROM
SIX MONTHS INCEPTION
ENDED YEAR ENDED DECEMBER 31, 1/20/98 TO
6/30/98 6/30/98
(UNAUDITED) 1997 1996 (UNAUDITED)
----------- --------- --------- -------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $19.65 $ 19.03 $ 17.88 $19.82
INCOME FROM INVESTMENT
OPERATIONS(8):
Net investment income
(loss)(1) (0.12)(7) (0.37)(2) (0.04) (0.05)(7)
Net realized and
unrealized gain 3.31 2.32 1.34 3.51
----------- --------- --------- ------
TOTAL FROM
INVESTMENT
OPERATIONS 3.19 1.95 1.30 3.46
----------- --------- --------- ------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- (0.01) --
Dividends from net
realized gains -- (1.33) (0.14) --
----------- --------- --------- ------
TOTAL DISTRIBUTIONS -- (1.33) (0.15) --
----------- --------- --------- ------
Change in net asset value 3.19 0.62 1.15 3.46
----------- --------- --------- ------
NET ASSET VALUE, END OF
PERIOD $22.84 $ 19.65 $ 19.03 $23.28
----------- --------- --------- ------
----------- --------- --------- ------
Total return(4) 16.23%(6) 10.50%(2) 7.28% 17.46%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $4,560 $3,785 $106 $118
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.70%(5) 2.7%(2) 2.7% 2.16%(5)
Net investment income
(loss) (1.13)%(5) (1.8)%(2) (1.6)% (0.46)%(5)
Portfolio turnover 48%(6) 237.2% 220.3% 48%(6)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Growth Fund. Such information is
based on the Fund's audited financial statements for the years presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$708. Absent the waiver, net investment income (loss) per share, total
return and the ratios of expenses and net investment income (loss) to
average net assets for Class A, Class B and Class C shares would have been
$(.19), $(.35) and $(.37), respectively, 11.27%, 10.44% and 10.50%,
respectively, 2.0%, 2.8% and 2.8%, respectively, and (0.9)%, (1.7)% and
(1.8)%, respectively.
(3) These amounts reflect the impact of a waiver of Manager fees of $62,438,
$42,545, $2,784 and $410 for the periods ended December 31, 1996, 1995,
1994 and 1993, respectively, and the Manager's reimbursement for income
taxes of $13,109 during 1994. Absent waivers and reimbursement, net
investment income (loss) per share, total return (not annualized for the
period ended December 31, 1993) and ratios of expenses and net investment
income (loss) to average net assets (annualized for the period ended
December 31, 1993) would have been $(.21), 21.71%, 2.0% and (1.2)%,
respectively, $(.15), 22.88%, 2.3% and (0.9)%, respectively, $(.21),
14.40%, 10.4% (2.3% if only normal and recurring expenses are taken into
account) and (1.7)%, respectively, and $(.03), 11.40%, 2.3% and (1.5)%,
respectively, for the periods ended December 31, 1996, 1995, 1994 and 1993,
respectively.
(4) Total return measures the change in the value of an investment during each
of the periods presented and does not include the impact of paying any
sales charge. Total return for the periods ended December 31, 1996 (Class B
and Class C only) and December 31, 1993 have not been annualized.
(5) Annualized
(6) Not annualized
(7) Includes reimbursement of operating expenses by investment adviser of
$0.02.
(8) 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.
See Notes to Financial Statements 35
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE:
The Phoenix-Engemann Small & Mid-Cap Growth Fund seeks to achieve long-term
growth of capital by investing primarily in a diversified portfolio of equity
securities of companies with market capitalizations below $1.5 billion.
Small-cap investing includes the risk of greater price volatility, less
liquidity and increased competitive threat.
Q: HOW HAS THE FUND PERFORMED SO FAR IN 1998?
A: The NAV for Class A Shares of the Phoenix-Engemann Small and Mid-Cap Growth
Fund increased 9.3 percent--but, as usual, not in a straight line. At one point
the fund was up over 18 percent before giving it all back during May's
correction. Since early June, though, the fund has had a nice recovery.
Q: HOW WAS PERFORMANCE ON A RELATIVE BASIS?
A: The fund performed very well against its key benchmark, the Russell 2000
Index, which turned in only a 4.9 percent increase. However, it fell slightly
short of the average mid-cap fund's return of 10.7 percent as measured by Lipper
Analytical Services. And the fund's return trailed the S&P by a wide margin as
large, blue chips continued to lead the way in the first half of the year.
Q: CAN SMALL AND MID CAPS CLOSE THE GAP?
A: We can't predict if and when small and mid caps will outperform large caps
again, but we do know that valuations for these stocks remain very attractive on
a relative basis. Consider that the S&P 500 now sells at about 23 times
estimated results compared to around 19 times estimates for the Russell 2000. In
addition, the S&P 500 sells at about 4 and 1/2 times sales compared to about 2
and 1/2 times sales for the Russell 2000. Yet the Russell 2000's expected
long-term earnings growth rate is 20 percent compared to the S&P's expected
growth of 14 percent.
Although these comparisons have largely been ignored by the stock market, some
larger companies are taking advantage of the disparities to make strategic
acquisitions of smaller companies. This year some of our largest holdings have
either been acquired or merged into larger organizations. A good example is the
recent acquisition of Viking Office Products by Office Depot.
Q: TALK ABOUT SOME OF YOUR WINNERS SO FAR THIS YEAR.
A: Our biggest winner was Labor Ready, a company that provides manual laborers
on a daily basis, which was up more than 100 percent. Labor Ready's sales have
doubled in the last twelve months and earnings have grown even faster. Another
big winner was U.S. Rentals, which is expected to merge with its large rival,
United Rentals, creating the equipment rental industry's leading player.
Q: HOW ABOUT STOCKS THAT DIDN'T WORK OUT?
A: We had a few companies we sold because they weren't able to execute their
business objectives. One we still like is JLK Direct Distribution, a direct
marketer of metalworking tools and related products. JLK stumbled over some
recent acquisitions, but if they can sort through these problems, we believe the
company should resume an above-average growth rate.
Q: WHAT IS YOUR SECOND-HALF OUTLOOK?
A: We can't predict a catalyst that will suddenly move small and mid caps ahead
of the large caps, so we need to focus on what we always focus on and that's
company fundamentals. As long as our companies execute their business plans,
sooner or later either the stock market will recognize it or perhaps some other
organization will. Frankly, we would prefer it to be the stock market because we
don't like replacing our favorite companies after they have been bought out.
36
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/98)
1 YEAR 3 YEARS SINCE INCEPTION
A Shares(2,3) (INCEPTION: 10/10/94)
NAV 21.34% 32.72% 36.59%
POP 15.60% 30.59% 34.81%
B Shares(2) (INCEPTION: 9/18/96)
CDSC 16.46% - 25.64%
No CDSC 20.46% - 27.51%
C Shares(2) (INCEPTION: 10/8/96)
CDSC 19.36% - 21.90%
No CDSC 20.36% - 21.90%
M Shares(3)
(INCEPTION: 1/21/98)- - 6.66%
Russell 2000 16.50% 18.85% note 4
SECTOR HOLDINGS (AS A PERCENTAGE OF MARKET VALUE)
Consumer Discretionary 46.0%
Financial Services 7.0%
Technology 20.0%
Other Energy 3.0%
Cash & Other 24.0%
SECTOR HOLDINGS ARE BASED ON THE BREAKDOWN OF THE RUSSELL 1000 GROWTH INDEX,
AN UNMANAGED INDEX OF 1,000 SECURITIES WITH A GREATER THAN AVERAGE GROWTH
ORIENTATION.
(1) ALL RETURN FIGURES ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND
THE REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
(2) THE "POP" (PUBLIC OFFERING PRICE) INCLUDE THE EFFECT OF THE MAXIMUM 4.75%
SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM FRONT-END SALES CHARGE WAS 5.5%.
THE "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE THE EFFECT OF ANY
SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE (CDSC) IS APPLIED TO
REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT HAVE A SALES CHARGE
APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B SHARES DECLINE FROM 5% TO
0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C SHARES ARE 1% IN THE FIRST
YEAR AND 0% THEREAFTER.
(3) PRIOR TO 9/1/96, THE FUND'S SHARES WERE NOT OFFERED TO THE PUBLIC AND,
ALTHOUGH THE FUND'S PORTFOLIO WAS MANAGED SUBSTANTIALLY IN ACCORDANCE WITH
THE INVESTMENT POLICIES AND OBJECTIVES DESCRIBED IN THE PROSPECTUS DURING
THAT PERIOD, SOME MANAGEMENT DIFFERENCES DID OCCUR DUE PRIMARILY TO THE
FUND'S SMALL ASSET SIZE. ACCORDINGLY, THE FUND'S PERFORMANCE DURING PERIODS
PRIOR TO 9/1/96, MAY NOT BE RELEVANT TO AN ASSESSMENT OF SUCH FUND'S
PERFORMANCE SUBSEQUENT TO SUCH DATE. ADDITIONALLY, THE MANAGER WAIVED ALL
MANAGEMENT, ADMINISTRATIVE AND SERVICE FEES OTHERWISE PAYABLE TO IT BY THE
FUND FOR THE INDICATED PERIODS, WHICH HAD THE EFFECT OF INCREASING THE FUND'S
TOTAL RETURN FOR THOSE PERIODS.
(4) THE RUSSELL 2000 INDEX PERFORMANCE IS 18.78%, 19.37%, 18.79% AND (1.95%)
FOR CLASS A, B, C AND M, RESPECTIVELY, SINCE INCEPTION DATE AS NOTED.
(5) CLASS M SHARES AE NOT CURRENTLY OFFERED.
ALL RETURNS REPRESENT PAST PERFORMANCE, WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
SMALL & MID-CAP GROWTH FUND A SHARES(6) AND THE RUSSELL 2000 GROWTH INDEX(7)
Fund After Maximum Sales Load Russell 2000 Index
10/10/94 $9,525.00 $10,000.00
6/30/95 $13,009.52 $11,300.68
6/30/96 $18,247.73 $14,000.04
6/30/97 $25,064.31 $16,285.74
6/30/98 $30,412.20 $18,974.00
(6) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY. RETURNS
WILL VARY ON CLASS B AND CLASS C SHARES DUE TO DIFFERING SALES CHARGES.
(7) THE RUSSELL 2000 CONSISTS OF THE SMALLEST 2,000 SECURITIES IN THE
RUSSELL 3000 INDEX. THE INDEX IS WIDELY REGARDED IN THE INDUSTRY AS
A PREMIER MEASURE OF SMALL CAP STOCKS.
10/10/94 (FUND INCEPTION)
37
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. U.S. Rentals, Inc. 4.4%
Operates equipment rental yards
2. Bed, Bath-Beyond, Inc. 4.1%
Home furnishings retailer
3. MSC Industrial Direct Co., Inc. 3.9%
Direct marketer of industrial products
4. World Color Press, Inc. 3.7%
Diversified printer
5. 99 Cents Only Stores 3.7%
Operates chain of close-out merchandise stores
6. Henry Schein, Inc. 3.6%
Healthcare products distributor
7. Action Performance Cos., Inc. 3.6%
Markets licensed motorsports collectibles
8. Viking Office Products, Inc. 3.5%
Mail order office products
9. MRV Communications, Inc. 3.5%
Develops, manufactures wide area network
products
10. International Speedway Corp. 3.4%
Operator of auto racing tracks
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
COMMON STOCKS--95.5%
AUTO PARTS & EQUIPMENT--4.5%
U.S. Rentals, Inc. (b)................................ 100,000 $ 3,943,750
-----------
BIOTECHNOLOGY--0.8%
Inhale Therapeutic Systems (b)........................ 30,000 742,500
-----------
COMMUNICATIONS EQUIPMENT--3.5%
MRV Communications, Inc. (b).......................... 150,000 3,112,500
-----------
COMPUTERS (SOFTWARE & SERVICES)--17.2%
Applied Graphics Technologies, Inc. (b)............... 20,000 915,000
Aspect Development, Inc. (b).......................... 10,000 756,250
BA Merchant Services, Inc. (b)........................ 104,700 2,113,631
BrightStar Information Technology Group, Inc. (b)..... 100,000 1,387,500
Cambridge Technology Partners, Inc. (b)............... 30,000 1,638,750
HNC Software, Inc. (b)................................ 25,000 1,020,312
Legato Systems, Inc. (b).............................. 40,000 1,560,000
Mastech Corp. (b)..................................... 40,000 1,125,000
Peregrine Systems, Inc. (b)........................... 40,000 1,140,000
Software AG Systems, Inc. (b)......................... 50,000 1,462,500
Unigraphics Solutions, Inc. (b)....................... 75,000 1,050,000
Walker Interactive Systems, Inc. (b).................. 75,000 1,106,250
-----------
15,275,193
-----------
ELECTRONICS (INSTRUMENTATION)--4.0%
Level One Communications, Inc. (b).................... 50,000 1,175,000
Micrel, Inc. (b)...................................... 45,000 1,462,500
Vitesse Semiconductor Corp. (b)....................... 30,000 926,250
-----------
3,563,750
-----------
ELECTRONICS (SEMICONDUCTORS)--0.9%
Applied Micro Circuits Corp. (b)...................... 31,800 822,825
-----------
FINANCIAL (DIVERSIFIED)--3.1%
American Capital Strategies Ltd....................... 50,000 $ 1,143,750
Metris Cos., Inc...................................... 25,000 1,593,750
-----------
2,737,500
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
HEALTH CARE (DRUGS - MAJOR PHARMACEUTICALS)--0.5%
Texas Biotechnology Corp. (b)......................... 100,000 456,250
-----------
HEALTH CARE (HOSPITAL MANAGEMENT)--0.9%
Health Management Associates, Inc. (b)................ 25,000 835,937
-----------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--3.6%
Henry Schein, Inc. (b)................................ 70,000 3,228,750
-----------
HEALTH CARE (SPECIALIZED SERVICES)--0.9%
Omnicare, Inc......................................... 20,000 762,500
-----------
HOUSEHOLD FURN. & APPLIANCES--0.9%
Restoration Hardware, Inc. (b)........................ 32,000 804,000
-----------
INSURANCE (MULTI-LINE)--1.4%
Annuity and Life Re (Holdings), Ltd. (b).............. 55,000 1,216,875
-----------
INVESTMENT BANKING/BROKERAGE--1.2%
Donaldson, Lufkin & Jenrette, Inc..................... 20,000 1,016,250
-----------
LEISURE TIME (PRODUCTS)--7.8%
Action Performance Cos., Inc. (b)..................... 100,000 3,218,750
International Speedway Corp.
Class A............................................. 105,000 2,985,938
Polaris Industries, Inc............................... 20,000 752,500
-----------
6,957,188
-----------
LODGING - HOTELS--1.9%
Signature Resorts, Inc. (b)........................... 40,000 660,000
Silverleaf Resorts, Inc. (b).......................... 65,000 991,250
-----------
1,651,250
-----------
</TABLE>
38 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- -----------
MANUFACTURING (DIVERSIFIED)--1.2%
<S> <C> <C>
Triarc Cos., Inc...................................... 50,000 $ 1,096,875
-----------
MANUFACTURING (SPECIALIZED)--1.7%
Advanced Lighting Technologies, Inc. (b).............. 30,000 697,500
Valspar Corp.......................................... 20,000 792,500
-----------
1,490,000
-----------
OFFICE EQUIPMENT & SUPPLIES--3.5%
Viking Office Products, Inc. (b)...................... 100,000 3,137,500
-----------
OIL & GAS (EXPLORATION - PRODUCTION)--3.2%
Pinnacle Oil International, Inc. (b).................. 224,500 2,806,250
-----------
RAILROADS--1.7%
Kansas City Southern Industries, Inc.................. 30,000 1,488,750
-----------
RESTAURANTS--1.2%
CKE Restaurants, Inc.................................. 25,000 1,031,250
-----------
RETAIL (DISCOUNTERS)--0.8%
Consolidated Stores Corp. (b)......................... 20,000 725,000
-----------
RETAIL (GENERAL MERCHANDISE)--14.0%
99 Cents Only Stores (b).............................. 80,000 3,320,000
Bed, Bath - Beyond, Inc. (b).......................... 70,000 3,626,875
Cost Plus, Inc. (b)................................... 67,900 2,020,025
Ross Stores, Inc...................................... 30,000 1,290,000
Tiffany - Co.......................................... 45,000 2,160,000
-----------
12,416,900
-----------
RETAIL (SPECIALTY)--4.7%
JLK Direct Distribution, Inc. Class A (b)............. 35,000 765,625
MSC Industrial Direct Co., Inc........................ 120,000 3,420,000
-----------
4,185,625
-----------
SAVINGS & LOAN COMPANIES--0.8%
Staten Island Bancorp, Inc............................ 30,000 682,500
-----------
<CAPTION>
SHARES VALUE
-------- -----------
<S> <C> <C>
SERVICES (ADVERTISING/MARKETING)--2.1%
Abacus Direct Corp. (b)............................... 35,000 $ 1,817,813
-----------
SERVICES (COMMERCIAL & CONSUMER)--1.0%
MAXIMUS, Inc. (b)..................................... 30,000 862,500
-----------
SERVICES (DATA PROCESSING)--0.7%
NCO Group, Inc. (b)................................... 30,000 660,000
-----------
SERVICES (EMPLOYMENT)--2.0%
Labor Ready, Inc. (b)................................. 60,000 1,811,250
-----------
SPECIALTY PRINTING--3.8%
World Color Press, Inc. (b)........................... 95,000 3,325,000
-----------
TOTAL COMMON STOCKS
(Identified cost $74,945,987)................................... 84,664,231
-----------
</TABLE>
<TABLE>
<S> <C> <C>
FOREIGN COMMON STOCKS--3.0%
COMPUTERS (SOFTWARE & SERVICES)--1.1%
Check Point Software Technologies Ltd. (Israel) (b)... 30,000 982,500
--------------
ELECTRONICS (SEMICONDUCTORS)--1.1%
PMC-Sierra, Inc. (Canada) (b)......................... 20,000 937,500
--------------
OIL & GAS (EXPLORATION - PRODUCTION) -- 0.8%
Encal Energy Ltd. (Canada) (b)........................ 200,000 748,025
--------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,519,239).................................... 2,668,025
--------------
TOTAL INVESTMENTS--98.5%
(Identified cost $77,465,226)................................... 87,332,256(a)
Cash and receivables, less liabilities--1.5%.................... 1,373,033
--------------
NET ASSETS--100.0%................................................ $88,705,289
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $12,869,415 and gross
depreciation of $3,002,385 for federal income tax purposes. At June 30,
1998, the aggregate cost of securities for federal income tax purposes was
$77,465,226.
(b) Non-income producing.
See Notes to Financial Statements 39
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $77,465,226) $ 87,332,256
Cash 2,498,226
Receivables
Investment securities sold 7,261,582
Fund shares sold 622,433
Dividends and interest 18,717
-------------
Total assets 97,733,214
-------------
LIABILITIES
Payables
Investment securities purchased 8,752,632
Distribution fee 119,980
Investment advisory fee 65,314
Administration fee 38,112
Fund shares repurchased 31,002
Trustees' fee 6,301
Accrued expenses 14,584
-------------
Total liabilities 9,027,925
-------------
NET ASSETS $ 88,705,289
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 82,746,972
Undistributed net investment loss (645,446)
Accumulated net realized gain (3,263,267)
Net unrealized appreciation 9,867,030
-------------
NET ASSETS $ 88,705,289
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $48,003,671) 2,082,122
Net asset value per share $23.06
Offering price per share
$23.06/(1-4.75%) $24.21
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $27,156,143) 1,195,025
Net asset value and offering price per share $22.72
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $13,428,126) 591,384
Net asset value and offering price per share $22.71
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $117,349) 5,089
Net asset value per share $23.06
Offering price per share
$23.06/(1-3.50%) $23.90
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 49,700
Interest 68,514
Foreign taxes withheld (2,485)
-----------
Total investment income 115,729
-----------
EXPENSES
Investment advisory fee 344,826
Distribution fee--Class A 47,173
Distribution fee--Class B 109,152
Distribution fee--Class C 57,245
Distribution fee--Class M 252
Administration 202,591
Professional 13,364
Trustees 7,039
-----------
Total expenses 781,642
Less expenses borne by investment adviser (20,467)
-----------
Net expenses 761,175
-----------
NET INVESTMENT LOSS (645,446)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (2,633,224)
Net realized gain on foreign currency transactions 126
Net change in unrealized appreciation (depreciation) on
investments 8,799,813
-----------
NET GAIN ON INVESTMENTS 6,166,715
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 5,521,269
-----------
-----------
</TABLE>
40 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (645,446) $ (498,000)
Net realized gain (loss) (2,633,098) 4,530,000
Net change in unrealized appreciation
(depreciation) 8,799,813 698,000
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 5,521,269 4,730,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A -- --
Net investment income--Class B -- --
Net investment income--Class C -- --
Net investment income--Class M -- --
Net realized gains--Class A -- (2,443,000)
Net realized gains--Class B -- (1,543,000)
Net realized gains--Class C -- (718,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (4,704,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,134,886 and 1,013,000 shares,
respectively) 25,832,262 21,556,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 115,000 shares, respectively) -- 2,307,000
Cost of shares repurchased (369,351
and 239,000 shares, respectively) (8,493,714) (4,740,000)
-------------- ------------------
Total 17,338,548 19,123,000
-------------- ------------------
CLASS B
Proceeds from sales of shares (460,559
and 706,000 shares, respectively) 10,298,067 15,726,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 67,000 shares, respectively) -- 1,327,000
Cost of shares repurchased (94,425 and
25,000 shares, respectively) (2,094,814) (514,000)
-------------- ------------------
Total 8,203,253 16,539,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (254,394
and 364,000 shares, respectively) 5,489,862 7,688,000
Net asset value of shares issued from
reinvestment of distributions
(0 and 33,000 shares, respectively) -- 659,000
Cost of shares repurchased (50,245 and
13,000 shares, respectively) (1,103,240) (279,000)
-------------- ------------------
Total 4,386,622 8,068,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (5,260
and 0 shares, respectively) 110,536 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (171 and 0
shares, respectively) (3,961) --
-------------- ------------------
Total 106,575 --
-------------- ------------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 30,034,998 43,730,000
-------------- ------------------
NET INCREASE IN NET ASSETS 35,556,267 43,756,000
NET ASSETS
Beginning of period 53,149,022 9,393,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($645,446) AND $0, RESPECTIVELY) $88,705,289 $53,149,000
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 41
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------
INCEPTION
(OCTOBER
10, 1994)
SIX MONTHS THROUGH
ENDED 6/30/98 YEAR ENDED DECEMBER 31, DECEMBER
(UNAUDITED) 1997 1996 1995 31, 1994
-------------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 21.09 $ 18.39 $ 14.90 $ 12.07 $10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) (0.16)(8) (0.31)(2) (0.12)(3) 0.22(3) 0.07(3)
Net realized and
unrealized gain 2.13 5.07 7.45 2.87 2.00
------ ---------- --------- -------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS 1.97 4.76 7.33 3.09 2.07
------ ---------- --------- -------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- (0.28) (0.08) --
Dividends from net
realized gains -- (2.06) (3.56) (0.18) --
------ ---------- --------- -------- ---------
TOTAL DISTRIBUTIONS -- (2.06) (3.84) (0.26) --
------ ---------- --------- -------- ---------
Change in net asset value 1.97 2.70 3.49 2.83 2.07
------ ---------- --------- -------- ---------
NET ASSET VALUE, END OF
PERIOD $ 23.06 $ 21.09 $ 18.39 $ 14.90 $12.07
------ ---------- --------- -------- ---------
------ ---------- --------- -------- ---------
Total return(4) 9.29%(7) 26.41%(2) 52.37%(3) 25.68%(3) 20.70%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $48,004 $27,771 $7,859 $1,742 $121
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.79%(5) 1.80%(2) 1.10%(3) --%(3) --%(5)
Net investment income
(loss) (1.65)%(5) (1.40)%(2) (0.70)%(3) 1.50%(3) 2.60%(5)
Portfolio turnover 71%(7) 313.5% 297.1% 121.4% 157.9%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED 6/30/98
(UNAUDITED) 1997 1996
-------------- ---------- ---------
<S> <C> <C> <C>
Net asset value, beginning of
period $ 20.87 $ 18.35 $ 16.44(6)
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) (0.24)(8) (0.46)(2) (0.32)
Net realized and unrealized gain 2.09 5.04 2.43
------ ---------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.85 4.58 2.11
------ ---------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- -- --
Dividends from net realized gains -- (2.06) (0.20)
------ ---------- ---------
TOTAL DISTRIBUTIONS -- (2.06) (0.20)
------ ---------- ---------
Change in net asset value 1.85 2.52 1.91
------ ---------- ---------
NET ASSET VALUE, END OF PERIOD $ 22.72(7) $ 20.87 $ 18.35
------ ---------- ---------
------ ---------- ---------
Total return(4) 8.86% 25.49%(2) 12.84%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $27,156 $17,298 $1,480
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.54%(5) 2.60%(2) 2.60%
Net investment income (loss) (2.40)%(5) (2.10)%(2) (2.20)%
Portfolio turnover 71%(7) 313.5% 297.1%
</TABLE>
42 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
- ----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS M
---------
FROM
CLASS C INCEPTION
------------------------------------------- 1/20/98
SIX MONTHS TO
ENDED 6/30/98 YEAR ENDED DECEMBER 31, 6/30/98
(UNAUDITED) 1997 1996 (UNAUDITED)
-------------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $ 20.87 $ 18.35(9) $ 17.99(6) $20.86
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) (0.24)(8) (0.47)(2) (0.29) (0.17)(8)
Net realized and
unrealized gain 2.08 5.05 0.85 2.37
------- --------- -------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS 1.84 4.58 0.56 2.20
------- --------- -------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- -- -- --
Dividends from net
realized gains -- (2.06) (0.20) --
------- --------- -------- ---------
TOTAL DISTRIBUTIONS -- (2.06) (0.20) --
------- --------- -------- ---------
Change in net asset value 1.84 2.52 0.36 2.20
------- --------- -------- ---------
NET ASSET VALUE, END OF
PERIOD $ 22.71 $ 20.87 $ 18.35 $23.06
------- --------- -------- ---------
------- --------- -------- ---------
Total return(4) 8.77%(7) 25.49%(2) 3.12% 10.55%(7)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $13,428 $8,080 $54 $117
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.54%(5) 2.60%(2) 2.60% 2.04%(5)
Net investment income
(loss) (2.41)%(5) (2.10)%(2) (2.20)% (1.90)%(5)
Portfolio turnover 71%(7) 313.5% 297.1% 71%(7)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Small & Mid-Cap Growth Fund. Such
information is based on the Fund's audited financial statements for the years
presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$1,128. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $(.31), $(.46) and
$(.47), respectively, 26.41%, 25.49% and 25.49%, respectively, and 1.8%,
2.6% and 2.6%, respectively, (1.4)%, (2.1)% and (2.1)%, respectively.
(3) These amounts reflect the impact of a waiver of Manager fees of $16,488,
$12,443, and $585 for the periods ended December 31, 1996, 1995 and 1994,
respectively, and the Manager's reimbursement for income taxes of $6,654
during 1994. Had the waivers and reimbursement not been made, net
investment income (loss) per share, total return (not annualized for the
period ended December 31, 1994) and the ratios of expenses and net
investment income (loss) to average net assets (annualized for the period
ended December 31, 1994) would have been $(.25), 51.35%, 1.9% and (1.4)%,
respectively, $(.11), 23.40%, 2.3% and (0.8)%, respectively, and $(.01),
15.10%, 22.1% (2.3% if only normal and recurring expenses are taken into
account) and (0.4)%, respectively, for the periods ended December 31, 1996,
1995 and 1994, respectively.
(4) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge. Total return for
the periods ended December 31, 1996 (Class B and Class C only) and December
31, 1994 have not been annualized.
(5) Annualized.
(6) The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the first
day Class B and Class C shares were sold, September 18, 1996 and October 8,
1996, respectively.
(7) Not annualized.
(8) Includes reimbursement of operating expenses by investment adviser of
$0.01.
See Notes to Financial Statements 43
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- ------------------------------------------------------
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF
THE PHOENIX-ENGEMANN MUTUAL FUNDS
INVESTMENT OBJECTIVE:
The Phoenix-Engemann Value 25 Fund seeks to achieve dividend income and
long-term growth of capital by investing primarily in 25 high-yielding stocks of
the S&P 500.
Management believes the quantitative investment approach of the Value 25 fund
will challenge the Dogs of the Dow strategy, which buys the 10 highest yielding
stocks on the Dow Jones Industrial Average and replaces them with new Dogs the
following year.
Q: HOW DID THE FUND PERFORM IN THE FIRST HALF OF 1998?
A: The Phoenix-Engemann Value 25 Fund's NAV for Class A Shares increased 5.3
percent for the 6-month period ended June 30, 1998. The fund came in behind the
9.1 percent increase for the average equity income fund, the category in which
Lipper Analytical Services places the fund. Value 25 slightly underperformed The
Dogs of the Dow, which was up 7.8 percent for the period.
Q: HOW DID THE FUND FARE RELATIVE TO YOUR EXPECTATIONS?
A: The first half of 1998 was a great period for growth stocks and a difficult
period for industrial stocks which are prevalent in the Value 25 fund. As a
result, the Value 25 fund "zagged" while the growth funds in our family
generally "zigged." The high-yielding stocks in the Value 25 fund are generally
from commodity-based industry sectors which underperformed the broad market.
Q: WHICH STOCKS PERFORMED WELL DURING THE FIRST SIX MONTHS OF 1998?
A: The automotive sector was one of the best performing sectors in the economy
during the period and one in which we participated. We owned a 4 percent
position in both Ford and Chrysler which were up 86 percent and 63 percent
respectively for the period. GM's return of 12 percent was lower than Ford and
Chrysler due in part to a strike at the company. The stellar performance of Ford
and Chrysler is an example of what can happen when a certain sector becomes "in
favor."
Q: WHAT STOCKS DIDN'T WORK OUT SO WELL?
A: The ongoing problems in Asia have caused commodity pricing across the board
to weaken, which in turn has adversely affected many of the companies in this
fund. Asarco and Phelps Dodge were down due to weak copper pricing; US Steel was
down due to weak steel pricing; and the oil companies in the portfolio, on
average, were down due to the falling price of oil.
Q: WHAT IS YOUR OUTLOOK FOR THE VALUE 25 FUND?
A: We are very optimistic about the future of the stocks in the Value 25 fund.
There will always be periods of time when cyclical stocks will be out of favor
in the marketplace. This has been the case for the first half of this year and
much of 1997 as well. When this trend reverses, we believe that the stocks held
in this fund will be poised to outperform the market.
44
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- ------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
TOTAL RETURNS(1)
1 YEAR SINCE INCEPTION
A Shares(2) (INCEPTION: 12/17/96)
NAV 11.61% 17.99%
POP 6.30% 14.30%
B Shares (INCEPTION: 1/9/97)
CDSC 10.73% 12.39%*
No CDSC 6.73% 16.48%*
C Shares (INCEPTION: 1/9/97)
CDSC 9.67% 14.93%*
No CDSC 10.67% 16.46%*
M Shares(3) (INCEPTION: 1/21/98)
NAV - 8.26%
POP - 4.49%
S&P 500 Index 16.50% note 4
SECTOR HOLDINGS (AS A PERCENT OF MARKET VALUE)
Auto & Transportation 18.0%
Consumer Discretionary 4.0%
Consumer Staples 4.0%
Financial Services 4.0%
Integrated Oils 20.0%
Materials & Processing 27.0%
Other Energy 4.0%
Producer Durables 4.0%
Utilities 5.0%
Cash & Other 10.0%
SECTOR HOLDINGS ARE BASED ON THE BREAKDOWN OF THE RUSSELL 1000 GROWTH INDEX,
AN UNMANAGED INDEX OF 1,000 SECURITIES WITH A GREATER THAN AVERAGE GROWTH
ORIENTATION.
(1) TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS ARE CAPITAL GAINS DISTRIBUTIONS.
(2) "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE
MAXIUMUM FRONT-END 4.75% SALES CHARGE. PRIOR TO 1/20/98, THE MAXIMUM
FRONT-END SALES CHARGE WAS 5.5%. "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT
INCLUDE THE EFFECT OF ANY SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE
(CDSC) IS APPLIED TO REDEMPTIONS OF CERTAIN CLASSES OF SHARES THAT DO NOT
HAVE A SALES CHARGE APPLIED AT THE TIME OF PURCHASE. CDSC CHARGES FOR B
SHARES DECLINE FROM 5% TO 0% OVER A FIVE YEAR PERIOD. CDSC CHARGES FOR C
SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER.
(3) CLASS M SHARES ARE NOT CURRENTLY OFFERED.
(4) THE S&P 500 INDEX PERFORMANCE IS 36.03%, 34.16%, 34.16% AND 17.60% FOR
CLASS A, B, C AND M, RESPECTIVELY, SINCE INCEPTION DATE AS NOTED.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT-PHOENIX-ENGEMANN
VALUE 25 FUND A SHARES(5) AND THE S&P 500 INDEX(6)
Fund After Maximum Sales Load S&P 500 Stock Index
12/17/96 $9,525.00 $10,000.00
6/30/97 $10,999.67 $12,306.58
6/30/98 $12,276.19 $16,034.22
(5) THIS CHART ILLUSTRATES POP RETURNS ON CLASS A SHARES ONLY. RETURNS WILL
VARY ON CLASS B AND CLASS C SHARES DUE TO DIFFERING SALES CHARGES.
(6) THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX CONSIDERED TO BE
REPRESENTATIVE OF THE U.S. STOCK MARKET AND INCLUDES REINVESTED DIVIDENDS.
12/17/96 (FUND INCEPTION)
45
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TEN LARGEST HOLDINGS AT JUNE 30, 1998
<S> <C>
(as a percentage of net assets)
1. Chrysler Corp. 5.6%
Manufactures and sells cars, trucks and related parts
globally
2. Ford Motor Co. 5.1%
Manufactures and sells cars, trucks and related parts
globally
3. ALLTEL Corp. 4.6%
Provides wireline and wireless communications
4. Dun & Bradstreet Corp. 4.3%
Markets information and services for business
decision-making
5. SUPERVALU, Inc. 4.2%
Wholesaler and retailer of food and non-food products
6. Dow Chemical Co. 4.1%
Manufactures and sells chemicals and related products
7. Atlantic Richfield Co. 4.1%
Explores for, develops and markets crude oil and natural
gas
8. Chevron Corp. 4.0%
Explores for, develops and markets crude oil and natural
gas
9. General Motors Corp. 4.0%
Manufactures and sells cars, trucks and related parts
globally
10. Phillips Petroleum Co. 4.0%
Explores for, develops and markets crude oil and natural
gas
</TABLE>
INVESTMENTS AT JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS--99.7%
AUTOMOBILES--14.7%
Chrysler Corp......................... 39,260 $ 2,213,282
Ford Motor Co......................... 33,925 2,001,575
General Motors Corp................... 23,835 1,592,476
-----------
5,807,333
-----------
CHEMICALS (SPECIALTY) -- 3.7%
Nalco Chemical Co..................... 42,180 1,481,573
-----------
CHEMICALS--7.9%
Dow Chemical Co....................... 16,855 1,629,668
Eastman Chemical Co................... 23,645 1,471,901
-----------
3,101,569
-----------
DISTRIBUTORS (FOOD & HEALTH)--4.2%
SUPERVALU, Inc........................ 37,230 1,652,081
-----------
ELECTRICAL EQUIPMENT--3.5%
General Signal Corp................... 38,530 1,387,080
-----------
IRON & STEEL--11.1%
Allegheny Teledyne, Inc............... 67,560 1,545,435
USX-US Steel Group, Inc............... 44,910 1,482,030
Worthington Industries, Inc........... 88,970 1,340,111
-----------
4,367,576
-----------
MACHINERY (DIVERSIFIED)--3.5%
Cooper Industries, Inc................ 25,385 1,394,588
-----------
MANUFACTURING (DIVERSIFIED)--3.7%
Minnesota Mining & Manufacturing
Co.................................. 17,720 1,456,363
-----------
METALS MINING--7.5%
ASARCO, Inc........................... 67,365 1,498,871
Phelps Dodge Corp..................... 25,765 1,473,436
-----------
2,972,307
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
OIL (DOMESTIC INTERGRATED)--8.1%
Atlantic Richfield Co................. 20,625 $ 1,611,328
Phillips Petroleum Co................. 32,825 1,581,755
-----------
3,193,083
-----------
OIL (INTERNATIONAL INTEGRATED)--12.0%
Chevron Corp.......................... 19,240 1,598,123
Exxon Corp............................ 21,930 1,563,883
Texaco, Inc........................... 26,470 1,579,928
-----------
4,741,934
-----------
OIL & GAS (EXPLORATION & PRODUCTION)--3.5%
Kerr-McGee Corp....................... 23,560 1,363,535
-----------
SERVICES (COMMERCIAL & CONSUMER)--4.3%
Dun & Bradstreet Corp................. 47,290 1,708,351
-----------
TELEPHONE--4.6%
ALLTEL Corp........................... 38,820 1,805,130
-----------
TEXTILES (HOME FURNISHINGS)--3.7%
Springs Industries, Inc............... 31,515 1,453,629
-----------
TRUCKS & PARTS--3.7%
PACCAR, Inc........................... 27,980 1,461,955
-----------
TOTAL COMMON STOCK
(Identified cost $38,651,586)...................... 39,348,087
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS--99.7%
(Identified cost $38,651,586)...................... 39,348,087(a)
Cash and receivables, less liabilities--0.3%....... 128,485
-----------
NET ASSETS--100.0%................................... $39,476,572
-----------
-----------
</TABLE>
<TABLE>
<S> <C>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,119,794 and gross
depreciation of $2,423,293 for federal income tax purposes. At June 30,
1998, the aggregate cost of securities for federal income tax purpose was
$38,651,586.
</TABLE>
46 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $38,651,586) $ 39,348,087
Cash 206,926
Receivables
Dividends and interest 71,450
Fund shares sold 52,506
-------------
Total assets 39,678,969
-------------
LIABILITIES
Payables
Fund shares repurchased 74,316
Distribution fee 60,505
Investment advisory fee 29,267
Administration fee 19,511
Trustees' fee 6,557
Accrued expenses 12,241
-------------
Total liabilities 202,397
-------------
NET ASSETS $ 39,476,572
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 36,683,920
Undistributed net investment income 48,492
Accumulated net realized gain 2,047,659
Net unrealized appreciation 696,501
-------------
NET ASSETS $ 39,476,572
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $20,791,412) 1,715,060
Net asset value per share $12.12
Offering price per share
$12.12/(1-4.75%) $12.72
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $11,301,597) 935,931
Net asset value and offering price per share $12.08
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,275,202) 603,088
Net asset value and offering price per share $12.06
CLASS M
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $108,361) 8,839
Net asset value per share $12.26
Offering price per share
$12.26/(1-3.50%) $12.70
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 553,856
Interest 5,610
-----------
Total investment income 559,466
-----------
EXPENSES
Investment advisory fee 170,952
Distribution fee--Class A 26,260
Distribution fee--Class B 52,413
Distribution fee--Class C 31,879
Distribution fee--Class M 300
Administration 113,968
Professional 12,361
Trustees 7,273
-----------
Total expenses 415,406
Less expenses borne by investment adviser (19,637)
-----------
Net expenses 395,769
-----------
NET INVESTMENT INCOME 163,697
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 2,046,115
Net change in unrealized appreciation (depreciation) on
investments (432,105)
-----------
NET GAIN ON INVESTMENTS 1,614,010
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,777,707
-----------
-----------
</TABLE>
See Notes to Financial Statements 47
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, 1997
JUNE 30, 1998 (ROUNDED TO
(UNAUDITED) THOUSANDS)
-------------- ------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 163,697 $ 231,000
Net realized gain 2,046,115 1,504,000
Net change in unrealized appreciation
(depreciation) (432,105) 1,133,000
-------------- ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 1,777,707 2,868,000
-------------- ------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (84,456) (171,000)
Net investment income--Class B (18,747) (37,000)
Net investment income--Class C (13,208) (22,000)
Net investment income--Class M (335) --
Net realized gains--Class A -- (878,000)
Net realized gains--Class B -- (403,000)
Net realized gains--Class C -- (221,000)
Net realized gains--Class M -- --
-------------- ------------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (116,746) (1,732,000)
-------------- ------------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (365,361
and 1,831,000 shares, respectively) 4,472,604 20,131,000
Net asset value of shares issued from
reinvestment of distributions
(6,025 and 86,000 shares,
respectively) 72,360 977,000
Cost of shares repurchased (344,615
and 277,000 shares, respectively) (4,258,860) (3,121,000)
-------------- ------------------
Total 286,104 17,987,000
-------------- ------------------
CLASS B
Proceeds from sales of shares (247,668
and 770,000 shares, respectively) 2,995,428 8,726,000
Net asset value of shares issued from
reinvestment of distributions
(853 and 23,000 shares,
respectively) 10,208 260,000
Cost of shares repurchased (75,590 and
30,000 shares, respectively) (936,517) (357,000)
-------------- ------------------
Total 2,069,119 8,629,000
-------------- ------------------
CLASS C
Proceeds from sales of shares (208,976
and 421,000 shares, respectively) 2,527,176 4,940,000
Net asset value of shares issued from
reinvestment of distributions
(461 and 17,000 shares,
respectively) 5,514 197,000
Cost of shares repurchased (30,973 and
13,000 shares, respectively) (379,601) (162,000)
-------------- ------------------
Total 2,153,089 4,975,000
-------------- ------------------
CLASS M
Proceeds from sales of shares (20,926
and 0 shares, respectively) 256,291 --
Net asset value of shares issued from
reinvestment of distributions
(28 and 0 shares, respectively) 335 --
Cost of shares repurchased (12,115 and
0 shares, respectively) (158,854) --
-------------- ------------------
Total 97,772 --
-------------- ------------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 4,606,084 31,591,000
-------------- ------------------
NET INCREASE IN NET ASSETS 6,267,045 32,727,000
NET ASSETS
Beginning of period 33,209,527 482,000
-------------- ------------------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $136,909
AND
$1,000, RESPECTIVELY) $39,476,572 $33,209,000
-------------- ------------------
-------------- ------------------
</TABLE>
48 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------
INCEPTION CLASS B
SIX MONTHS (DECEMBER 17, -------------------------------
ENDED 1996) TO SIX MONTHS
6/30/98 DECEMBER 31, DECEMBER 31, ENDED 6/30/98 DECEMBER 31,
(UNAUDITED) 1997 1996 (UNAUDITED) 1997
------------ ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 11.56 $ 10.11 $10.00 $ 11.53 $ 10.39(5)
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1) 0.07(7) 0.17(2) -- 0.03(7) 0.08(2)
Net realized and
unrealized gain 0.54 1.95 0.11 0.54 1.67
------------ ------------- ------ ------------- -------------
TOTAL FROM
INVESTMENT
OPERATIONS 0.61 2.12 0.11 0.57 1.75
------------ ------------- ------ ------------- -------------
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.12) -- (0.02) (0.06)
Dividends from net
realized gains -- (0.55) -- -- (0.55)
------------ ------------- ------ ------------- -------------
TOTAL DISTRIBUTIONS (0.05) (0.67) -- (0.02) (0.61)
------------ ------------- ------ ------------- -------------
Change in net asset value 0.56 1.45 0.11 0.55 1.14
------------ ------------- ------ ------------- -------------
NET ASSET VALUE, END OF
PERIOD $ 12.12 $ 11.56 $10.11 $ 12.08 $ 11.53
------------ ------------- ------ ------------- -------------
------------ ------------- ------ ------------- -------------
Total return(3) 5.28%(6) 21.10%(2) 1.10%(3) 4.95%(6) 16.97%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $20,791 $19,518 $482 $11,302 $8,799
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.75%(4) 1.80%(2) 1.70%(4) 2.50%(4) 2.60%(2)
Net investment income
(loss) 1.18%(4) 1.40%(2) 1.80%(3) 0.48%(4) 0.70%(2)
Portfolio turnover 52%(6) 87.7% --% 52%(6) 87.7%
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Small & Mid-Cap Growth Fund. Such
information is based on the Fund's audited financial statements for the years
presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$789. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $.17, $.08 and $.08,
respectively, 21.10%, 16.97% and 17.01%, respectively, 1.8%, 2.6% and 2.6%,
respectively, and 1.8%, 0.7% and 0.8%, respectively.
(3) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge. Total return for
the periods ended December 17, 1996 and December 31, 1996 has not been
annualized.
(4) Annualized.
(5) The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the first
day Class B and Class C shares were sold, January 9, 1997.
(6) Not annualized
(7) Includes reimbursement of operating expenses by investment adviser of
$0.01.
See Notes to Financial Statements 49
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS M
CLASS C --------------
------------------------------ FROM INCEPTION
SIX MONTHS 1/20/98 TO
ENDED DECEMBER 31, 6/30/98
6/30/98 1997 (UNAUDITED)
------------ ------------- --------------
<C> <S> <C>
Net asset value, beginning of
period $ 11.52 $ 10.39(5) $11.36
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) 0.03(7) 0.09(2) 0.05(7)
Net realized and unrealized gain 0.53 1.66 0.89
------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 0.56 1.75 0.94
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.02) (0.07) (0.04)
Dividends from net realized gains -- (0.55) --
------ ------ ------
TOTAL DISTRIBUTIONS (0.02) (0.62) (0.04)
------ ------ ------
Change in net asset value 0.54 1.13 0.90
------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 12.06 $ 11.52 $12.26
------ ------ ------
------ ------ ------
Total return(3) 4.88%(6) 17.01%(2) 8.26%(6)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $7,275 $4,893 $108
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.50%(4) 2.60%(2) 2.00%(4)
Net investment income (loss) 0.46%(4) 0.80%(2) 0.86%(4)
Portfolio turnover 52%(6) 87.7% 52%(6)
</TABLE>
The table above provides condensed information concerning income and capital
changes for one share of the Phoenix-Engemann Small & Mid-Cap Growth Fund. Such
information is based on the Fund's audited financial statements for the years
presented.
(1) Computed using average shares outstanding.
(2) These amounts reflect the impact of a waiver of administration fees of
$789. Absent the waiver, net investment loss per share, total return and
the ratios of expenses and net investment loss to average net assets for
Class A, Class B and Class C shares would have been $.17, $.08 and $.08,
respectively, 21.10%, 16.97% and 17.01%, respectively, 1.8%, 2.6% and 2.6%,
respectively, and 1.8%, 0.7% and 0.8%, respectively.
(3) Total return measures the change in the value of an investment during each
of the years presented and does not include the impact of paying any
applicable front-end or contingent deferred sales charge. Total return for
the periods ended December 17, 1996 and December 31, 1996 has not been
annualized.
(4) Annualized.
(5) The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the first
day Class B and Class C shares were sold, January 9, 1997.
(6) Not annualized
(7) Includes reimbursement of operating expenses by investment adviser of
$0.01.
50 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix-Engemann Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. To date, six
Funds are offered for sale: The Phoenix-Engemann Growth Fund, Phoenix-Engemann
Nifty Fifty Fund, Phoenix-Engemann Balanced Return Fund, Phoenix-Engemann Small
& Mid-Cap Growth Fund, Phoenix-Engemann Value 25 Fund and Phoenix-Engemann
Global Growth Fund (formerly The Pasadena Growth Fund, The Pasadena Nifty Fifty,
The Pasadena Balanced Return Fund, The Pasadena Small & Mid-Cap Growth Fund, The
Pasadena Value 25 Fund and The Pasadena Global Growth Fund, respectively),
collectively referred to as the "Funds," are series of The Phoenix-Engemann
Funds (formerly the Pasadena Investment Trust, the "Trust"). Each Fund
represents an investment in a separate diversified fund with its own investment
objectives. GROWTH FUND seeks to achieve long-term capital appreciation. NIFTY
FIFTY FUND seeks to achieve long-term capital appreciation by investing in
approximately 50 different securities. BALANCED RETURN FUND seeks to maximize a
total investment return consistent with reasonable risk through a balanced
approach. GLOBAL GROWTH FUND seeks to achieve long-term growth of capital by
investing in a globally diversified portfolio of equity securities. SMALL &
MID-CAP GROWTH FUND seeks to achieve long-term growth of capital by investing
primarily in a diversified portfolio of equity securities of companies with
market capitalizations below $1.5 billion. VALUE 25 FUND seeks to achieve
substantial dividend income and long-term growth of capital by investing in
equity securities which the Adviser believes offer the best potential for
current dividend yield and long-term capital appreciation.
Each Fund offers Class A, Class B, Class C and Class M shares. Class M shares
have been closed to new investors. Class A shares are sold with a front-end
sales charge of up to 4.75%. Class B shares are sold with a contingent deferred
sales charge which declines from 5% to zero depending on the period of time the
shares are held. Class C shares are sold with a 1% contingent deferred sales
charge if redeemed within one year of purchase. Class M shares are sold with a
front-end sales charge of up to 3.50%. All classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and has
exclusive voting rights with respect to its distribution plan. Income and
expenses of the Funds are borne pro rata by the holders of all classes of
shares, except that each class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at their fair value as
determined in good faith by or under the direction of the Trustees.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date plus one. Interest income
is recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date or, in the case of certain foreign securities, as soon as the Trust is
notified. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund to comply with the requirements of the Internal Revenue Code (the "Code")
applicable to regulated investment companies, and to distribute all of its
taxable income to its shareholders. In addition, each Fund intends to distribute
an amount sufficient to avoid imposition of any excise tax under Section 4982 of
the Code. Therefore, no provision for federal income taxes or excise taxes has
been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, operating
losses and losses deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting for a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Trust does not separate that
portion of the results of operations arising from changes in the exchange rates
and that portion arising from changes in the market prices of securities.
51
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED) (CONTINUED)
F. FORWARD CURRENCY CONTRACTS:
The Funds may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds. Forward currency contracts involve, to varying
degrees, elements of market risk in excess of the amount recognized in the
statement of assets and liabilities. Risks arise from the possible movements in
foreign exchange rates or if the counterparty does not perform under the
contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Portfolio records a
realized gain (or loss) equal to the change in the value of the contract when it
was opened and the value at the time it was closed or offset.
G. FUTURES CONTRACTS:
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. A Fund may enter into financial
futures contracts as a hedge against anticipated changes in the market value of
their portfolio securities. Upon entering into a futures contract the Fund is
required to pledge to the broker an amount of cash and/or securities equal to
the "initial margin" requirements of the futures exchange on which the contract
is traded. Pursuant to the contract, the Fund agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin and are
recorded by the Fund as unrealized gains and losses. When the contract is
closed; the Fund records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the time it
was closed. The potential risk to the Fund is that the change in value of the
futures contract may not correspond to the change in value of the hedge
instruments.
H. OPTIONS:
Each Fund may write covered options or purchase options contracts for purpose
of hedging against changes in the market value of the underlying securities or
foreign currencies.
Each Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedge instruments. In
addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist from the contracts.
Each Fund may purchase options which are included in the Fund's Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
I. EXPENSES:
Expenses incurred by the Trust with respect to any two or more Funds are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Trust, the Advisers, Roger Engemann &
Associates, Inc. ("REA", or the "Adviser") REA is a wholly owned subsidiary of
Pasadena Capital Corporation, which in turn is a wholly owned subsidiary of
Phoenix Investment Partners, Ltd. a publicly-traded company 60% owned by Phoenix
Home Life Mutual Insurance Company are entitled to a fee, based upon the
following annual rates as a percentage of the average daily net assets of each
Fund:
<TABLE>
<CAPTION>
FIRST NEXT OVER
$50 MILLION $450 MILLION $500 MILLION
----------- ------------ ------------
<S> <C> <C> <C>
Growth Fund....... 0.90% 0.80% 0.70%
Nifty Fifty
Fund.............. 0.90% 0.80% 0.70%
Balanced Return
Fund.............. 0.80% 0.70% 0.60%
Global Growth
Fund.............. 1.10% 1.00% 0.90%
Small & Mid-Cap
Growth Fund....... 1.00% 0.90% 0.80%
Value 25 Fund..... 0.90% 0.80% 0.70%
</TABLE>
Phoenix Equity Planning Corporation ("PEPCO") an indirect majority-owned
subsidiary of PHL, which serves as the national distributor of the Trust's
shares has advised the Trust that is retained net selling commissions of $48,959
for Class A shares and deferred sales charges of $259,520 for Class B shares for
the period ended June 30, 1998. In addition, each Fund pays PEPCO
52
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED) (CONTINUED)
a distribution fee at an annual rate of 0.25% for Class A shares, 1.00% for
Class B shares, 1.00% for Class C shares and 0.50% for Class M shares applied to
the average daily net assets of each Fund. The distribution has advised the
Trust that of the total amount expensed for the period ended June 30, 1998,
$964,197 was retained by the Distributor, $1,367,928 was paid out to
unaffiliated Participants and $4,938 was paid to W.S. Griffith, an indirect
subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.60% of average daily
net assets up to $50 million, 0.50% of average daily net assets of $50 million
to $450 million, 0.40% of average daily net assets of $450 million through $625
million, and 0.30% of average daily net assets greater than $625 million: a
minimum fee may apply. PEPCO serves as the Fund's Transfer Agent with State
Street Bank and Trust Company as sub-transfer agent.
At June 30, 1998, PHL and affiliates held Phoenix-Engemann Fund shares which
aggregated the following:
<TABLE>
<CAPTION>
AGGREGATE
SHARES NET ASSET VALUE
--------- ---------------
<S> <C> <C>
Growth--Class M.................. 4,861.489 $ 118,765
Nifty Fifty--Class M............. 3,388.682 117,147
Balanced Return--Class M......... 3,389.831 111,322
Global Growth--Class M........... 5,045.409 117,457
Small & Mid Cap Growth--Class
M.............................. 4,794.864 110,546
Value 25--Class M................ 8,830.349 108,260
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended June 30, 1998
(excluding U.S. Government and agency securities, short-term securities, futures
contracts and forward currency contracts) aggregated the following:
<TABLE>
<CAPTION>
PURCHASES SALES
---------- -----------
<S> <C> <C>
Growth Fund 477,334,981 313,949,654
Nifty Fifty Fund 140,724,345 117,648,977
Balanced Return Fund 27,031,916 21,055,359
Global Growth Fund 12,215,915 10,322,249
Small & Mid Cap Growth Fund 82,525,748 50,842,034
Value 25 Fund 24,749,572 70,728,192
</TABLE>
Purchases and sales of U.S. Government and agency securities during the six
months ended June 30, 1998, aggregated $23,467,672 and $28,969,209 respectively,
for the Balanced Return Fund.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. LOAN AGREEMENTS
The Funds may invest in direct debit instruments which are interested in
amounts owed by a corporation, governmental, or other borrower to lenders or
lending syndicates. The Funds' investments in loans may be in the form of
participations in loans or assignments of all or a portion of loans from third
parties. A loan is often administered by a bank or other financial institution
(the lender) that acts as agent for all holders. The agent administers the terms
of the loan, as specified in the loan agreement. When investing in a loan
participation, the Funds have the right to receive payments of principals,
interest and any fees to which it is entitled only from the lender selling the
loan agreement and only upon receipt by the lender of payments from the
borrower. The Funds generally has no right to enforce compliance with the terms
of the loan agreement with the borrower. As a result, the Funds may be subject
to the credit risk of both the borrower and lender that is selling the loan
agreement. For loans which the Funds are a participant, the Funds may not sell
its participation in the loan without the lender's prior consent. When the Funds
purchase assignments from lenders it acquires direct rights against the borrower
on the loan. Direct indebtedness of emerging countries involves a risk that the
government entitles responsible for the repayment of the debt may be unable, or
unwilling to pay the principal and interest when due.
53
<PAGE>
PHOENIX-ENGEMANN FUNDS
600 North Rosemead Boulevard
Pasadena, California 91107-2133
OFFICERS AND TRUSTEES
Roger Engemann, Chairman of the Board,
President and Trustee
Barry E. McKinley, Trustee
Robert L. Peterson, Trustee
Richard C. Taylor, Trustee
John S. Tilson, Chief Financial Officer, Secretary
Angela Wong, Trustee
INVESTMENT ADVISERS
Roger Engemann & Associates ("REA")
600 North Rosemead Boulevard
Pasadena, California 91107-2101
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
PO Box 2200
Enfield, Connecticut 06083-2200
CUSTODIANS
Union Bank of California
475 Sansome Street
San Francisco, California 94111
State Street Bank and Trust Company
(Global Growth Fund)
PO Box 351
Boston, Massachusetts 02101
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
PO Box 2200
Enfield, Connecticut 06083-2200
HOW TO CONTACT US
<TABLE>
<S> <C>
Toll-Free Numbers
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
</TABLE>
- --------------------------------------------------------------------------------
THIS REPORT IS FOR THE INFORMATION OF SHAREHOLDERS OF THE PHOENIX-ENGEMANN
GROWTH FUND, PHOENIX-ENGEMANN NIFTY FIFTY FUND, PHOENIX-ENGEMANN BALANCED RETURN
FUND, PHOENIX-ENGEMANN SMALL & MID-CAP FUND, PHOENIX-ENGEMANN VALUE 25 FUND AND
THE PHOENIX-ENGEMANN GLOBAL GROWTH FUND, BUT IT MAY ALSO BE USED AS SALES
LITERATURE WHEN PRECEDED OR ACCOMPANIED BY THE FUNDS' CURRENT PROSPECTUS WHICH
GIVES DETAILS ABOUT CHARGES, INVESTMENT OBJECTIVES AND OPERATING POLICIES OF THE
FUNDS.
- --------------------------------------------------------------------------------
<PAGE>
BULK RATE
PHOENIX-ENGEMANN FUNDS U.S. POSTAGE
PO Box 2200 PAID
Enfield CT 06083-2200 SPRINGFIELD, MA
PERMIT NO. 444
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 2115A (8/98)
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