<PAGE>
Phoenix Investment Partners
DECEMBER 31, 1998
Engemann
ANNUAL 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>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Growth Fund........................................................... 3
The Nifty Fifty Fund...................................................... 12
The Balanced Return Fund.................................................. 20
The Global Growth Fund.................................................... 29
The Small & Mid-Cap Growth Fund........................................... 40
The Value 25 Fund......................................................... 48
Notes to Financial Statements............................................. 55
</TABLE>
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
The year 1998 had a little something for the bears, much more for the bulls, a
lot of scary stuff for the press--and, happily, good news for shareholders of
the Phoenix-Engemann Funds.
More details are on the following pages, but here is a performance snapshot.
Based on the net asset value (NAV) of Class A Shares, all the funds in the
family showed positive returns for the year. Other than the Phoenix-Engemann
Value 25 Fund, all the Funds had double-digit gains and surpassed the average
fund in their respective categories, based on net asset value.(1) Further, the
Phoenix-Engemann Growth, Nifty Fifty and Balanced Return Funds beat the
impressive performance of the S&P 500 Index.(2)
The market in 1998 was both selective and volatile. Selectivity showed up in
investors' preference for large growth stocks over value stocks--one reason the
Value 25 Fund lagged in its returns. Not only does this Fund emphasize value, it
focuses on a narrow range of just 25 stocks. Last year wasn't the year for
value. But, like all market phenomena, that is subject to change.
Last year, small also played second fiddle to large. Small stocks suffered a
third quarter that was their third worst quarter since 1979. However, interest
rate cuts and waning fears of recession brought a nice fourth-quarter rally to
small stocks and to the Phoenix-Engemann Small & Mid-Cap Fund in particular.
Volatility, the other key feature of 1998, gave us a lot of what we call
"white knuckle time." The third quarter was the worst for stock funds since
1990. Then the market turned around abruptly, as it is wont to do, making the
fourth quarter the best for stocks since 1987.
After many placid years, what the market dished out in 1998 might make now a
good time to dust off some old, forgotten investment practices. Three of my
favorites are: (1) DIVERSIFY, (2) STICK WITH YOUR PLAN, and (3) IGNORE THE HERD.
DIVERSIFICATION can't cure volatility, yet it can be a great balm for its
pain. If you include large-cap, small-cap, growth, balanced, and value funds in
your portfolio, you may not earn the peak return of the best one ... but you'll
avoid having everything in the one that takes the biggest fall.
STICK WITH YOUR PLAN is what I refer to as "stay on the train." Decide on your
goal, select the investments to get you there, and then muster the courage to
hang on through a bumpy ride. Trying to time the market is something even
experts seldom do successfully. And if you chase after the current best
performer, you're apt to catch it just as it heads in the other direction.
(1) ACCORDING TO LIPPER INC.
(2) THE S&P 500 INDEX, WHICH IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK
MARKET TOTAL RETURN PERFORMANCE, RETURNED 28.8% FOR THE YEAR ENDED DECEMBER
31, 1998. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
1
<PAGE>
MESSAGE FROM THE CHAIRMAN (CONTINUED)
IGNORE THE HERD. When the market sinks and headlines rail against the risk of
stocks, it's tempting to pull out and tuck your dollars under the mattress.
That's when it's time to remind yourself that company fundamentals propel stock
prices over the long term. Periodically, investor psychology may be a
controlling factor. But attitudes can change. Bull markets can follow bear
markets. Investing in stocks for the short term is clearly a risky practice, but
history shows us that stocks of solid, profitable companies move up over time.
Finally, a word about the future. Some analysts say the market can't have
another strong year, and it is true that past performance is no guarantee of
future performance. However, we see nothing on the horizon we think will impede
good progress. Though corporate profits may cool somewhat, we believe there will
always be companies with good, solid earnings prospects. And we will do our best
to find them and place them in your portfolios.
Thank you for your confidence and for "staying on the train" through these
volatile times.
/s/ Roger Engemann
Roger Engemann
Chairman of the Board and President
JANUARY 15, 1999
2
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF THE
PHOENIX-ENGEMANN MUTUAL FUNDS
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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 capitalizations.
Q: HOW DID THE FUND PERFORM OVER THE YEAR ENDED DECEMBER 31, 1998?
A: This was an excellent year for the Fund. The NAV for Class A Shares increased
37.4%, surpassing both the 28.8% return of the S&P 500 Index(1) as well as the
22.9% return of the average growth fund in a universe of 980 funds as measured
by Lipper Inc. Class B and C shares returned 36.4% for the year. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Q: WHAT WERE SOME OF THE FACTORS THAT AFFECTED THE FUND'S PERFORMANCE?
A: There were several key elements responsible for the Fund's outperformance.
First, the Fund was overweighted in communication equipment and service
companies that are benefiting from the dramatic growth of the Internet. Second,
the Fund had solid performance in several retail stocks as these companies
experienced a solid domestic economy. Finally, during the market correction in
August and October we reduced our exposure to consumer products that we believed
would be negatively impacted by weak economies in Asia and Latin America.
Subsequently, we used the proceeds from these sales to increase our holdings in
financial services companies, which were selling at what we believed to be very
compelling valuation levels.
Q: PLEASE DISCUSS SOME OF THE INDIVIDUAL WINNERS IN THE FUND.
A: For the second year in a row America Online was the Fund's best performer.
The stock rose nearly six-fold during 1998. Now the Fund's largest position,
largely because of price appreciation, the company is riding the Internet boom
and is leveraging its dominant franchise into tremendous profit growth. Another
way we have been playing the explosive growth of the Internet is through
communications equipment companies that are building the infrastructure or
backbone of the Internet. Both Cisco and Lucent Technologies are among the
leaders in this fast growing area and each stock more than doubled during the
year. Other stocks that performed extremely well were MCI WorldCom, Microsoft,
and Texas Instruments.
Q: WHAT WERE SOME AREAS THAT PROVED DISAPPOINTING?
A: Consumer staple companies are one area where the Fund has historically
invested a large part of its assets. For many years companies such as Gillette
and Coca-Cola were able to provide above-average consistent growth. The Asian
crisis, however, proved to be a very difficult challenge for these companies.
Their growth slowed dramatically and in some cases profits actually declined.
Although these companies are excellent franchises and dominate their markets,
the near-term outlook for profit growth is uncertain at best. Therefore,
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
3
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND (CONTINUED)
we trimmed our positions in several of these companies. That being said, one
company that performed extremely well, despite its global presence, was
McDonald's. After several years of sub-par performance, management implemented a
strategy to improve their domestic operations and continue their global
expansion--efforts that investors rewarded nicely.
Q: WHAT IS YOUR OUTLOOK FOR 1999?
A: Our outlook has not changed much since we last communicated with you. Despite
tremendous volatility in the second half the year, the stock market rebounded
vigorously and posted a fourth year of better than 20% gains. Although we do not
believe that such levels of returns are sustainable, we are still able to find
opportunities we feel have the potential for exceptional growth. More
importantly, the investment backdrop remains favorable as inflation is well
contained and the U.S. economy continues to grow at a solid pace. As such, we
believe that valuations are justifiable, provided companies continue to deliver
the earnings. We have positioned the Fund in the companies that we believe have
the best earnings prospects and expect will be rewarded over time. In summary,
we believe that growth stocks are still a good place to be.
JANUARY 29, 1999
4
<PAGE>
Phoenix-Engemann Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 12/31/98 DATE
------ ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 37.41% 19.04% 17.64% -- --
Class A Shares at POP(3) 30.88 17.88 17.06 -- --
Class B Shares at NAV(2) 36.38 -- -- 18.32% 1/3/94
Class B Shares with CDSC(4) 32.53 -- -- 18.13 1/3/94
Class C Shares at NAV(2) 36.38 -- -- 18.32 1/3/94
Class C Shares with CDSC(4) 36.38 -- -- 18.32 1/3/94
S&P 500 Index(6) 28.76 24.15 19.22 24.23 1/3/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (Contingent Deferred Sales Charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B and Class C Shares will vary due to differing sales charges.
(6) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN S&P
GROWTH FUND 500
CLASS A(5) INDEX(6)
<C> <S>
12/30/1988 $9,525.00 12/31/1988 $ 10,000.00
12/29/1989 $13,119.02 12/31/1989 $ 13,143.49
12/31/1990 $12,522.67 12/31/1990 $ 12,723.63
12/31/1991 $21,017.31 12/31/1991 $ 16,609.89
12/31/1992 $21,488.47 12/31/1992 $ 17,887.30
12/31/1993 $20,227.25 12/31/1993 $ 19,676.05
12/30/1994 $19,468.73 12/31/1994 $ 19,936.37
12/29/1995 $24,755.99 12/31/1995 $ 27,413.96
12/31/1996 $30,324.36 12/31/1996 $ 33,787.07
12/31/1997 $35,187.14 12/31/1997 $ 45,063.71
12/31/1998 $48,351.91 12/31/1998 $ 58,022.45
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/31/88 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 40%
Consumer Cyclicals 17
Financials 15
Health-Care 11
Consumer Staples 7
Communication Services 6
Capital Goods 3
Other 1
</TABLE>
5
<PAGE>
Phoenix-Engemann Growth Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. America Online, Inc. 5.9%
MAJOR PROVIDER OF ONLINE SERVICES TO CONSUMERS
2. MCI WorldCom, Inc. 5.6%
COMPREHENSIVE TELECOMMUNICATIONS SERVICE PROVIDER
3. Cisco Systems, Inc. 5.1%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
4. Lucent Technologies, Inc. 4.9%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
5. Medtronic, Inc. 4.8%
LEADING PRODUCER OF IMPLANTABLE CARDIAC DEVICES
6. Microsoft Corp. 4.6%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
7. Texas Instruments, Inc. 4.0%
LEADING SUPPLIER OF DIGITAL SIGNAL PROCESSORS FOR THE COMMUNICATION
MARKET
8. Home Depot, Inc. (The) 4.0%
LEADING HOME IMPROVEMENT RETAILER
9. Pfizer, Inc. 4.0%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
10. General Electric Co. 3.2%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
COMMON STOCKS--98.9%
AIR FREIGHT--1.1%
FDX Corp.(b)............................ 68,000 $ 6,052,000
BANKS (MAJOR REGIONAL)--1.8%
Wells Fargo & Co........................ 247,700 9,892,519
BEVERAGES (NON-ALCOHOLIC)--1.2%
Coca-Cola Co. (The)..................... 97,900 6,547,062
CHEMICALS (DIVERSIFIED)--0.2%
Monsanto Co............................. 25,000 1,187,500
COMMUNICATIONS EQUIPMENT--7.1%
Lucent Technologies, Inc................ 243,000 26,730,000
Tellabs, Inc.(b)........................ 170,550 11,693,334
-------------
38,423,334
-------------
COMPUTERS (HARDWARE)--3.0%
Compaq Computer Corp.................... 135,000 5,661,562
Dell Computer Corp.(b).................. 141,000 10,319,437
-------------
15,980,999
-------------
COMPUTERS (NETWORKING)--5.1%
Cisco Systems, Inc.(b).................. 296,112 27,482,895
COMPUTERS (PERIPHERALS)--2.1%
EMC Corp.(b)............................ 132,000 11,220,000
COMPUTERS (SOFTWARE & SERVICES)--15.2%
America Online, Inc.(b)................. 200,000 32,000,000
At Home Corp.(b)........................ 65,000 4,826,250
BMC Software, Inc.(b)................... 185,000 8,244,062
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--CONTINUED
Compuware Corp.(b)...................... 156,000 $ 12,187,500
Microsoft Corp.(b)...................... 181,300 25,144,044
-------------
82,401,856
-------------
CONSUMER FINANCE--1.6%
MBNA Corp............................... 340,450 8,489,972
ELECTRICAL EQUIPMENT--3.2%
General Electric Co..................... 170,000 17,350,625
ELECTRONICS (SEMICONDUCTORS)--6.8%
Intel Corp.............................. 126,400 14,986,300
Texas Instruments, Inc.................. 254,600 21,784,212
-------------
36,770,512
-------------
ENTERTAINMENT--0.9%
Walt Disney Co. (The)................... 163,850 4,915,500
FINANCIAL (DIVERSIFIED)--6.6%
American Express Co..................... 92,000 9,407,000
Citigroup, Inc.......................... 220,000 10,890,000
Freddie Mac............................. 239,150 15,410,228
-------------
35,707,228
-------------
HEALTH CARE (DIVERSIFIED)--0.8%
Johnson & Johnson....................... 54,200 4,546,025
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--5.7%
Merck & Co., Inc........................ 64,100 9,466,769
Pfizer, Inc............................. 170,600 21,399,638
-------------
30,866,407
-------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--4.8%
Medtronic, Inc.......................... 350,100 $ 25,994,925
INSURANCE (MULTI-LINE)--1.8%
American International Group, Inc....... 102,500 9,904,063
INVESTMENT BANKING/BROKERAGE--2.1%
Merrill Lynch & Co., Inc................ 174,000 11,614,500
INVESTMENT MANAGEMENT--0.6%
Price (T. Rowe) Associates, Inc......... 93,400 3,198,950
LEISURE TIME (PRODUCTS)--1.0%
Harley-Davidson, Inc.................... 116,000 5,495,500
LODGING-HOTELS--1.9%
Carnival Corp........................... 215,500 10,344,000
PERSONAL CARE--1.9%
Gillette Co............................. 216,300 10,449,994
RESTAURANTS--1.3%
McDonald's Corp......................... 95,000 7,279,375
RETAIL (BUILDING SUPPLIES)--4.0%
Home Depot, Inc. (The).................. 350,000 21,415,625
RETAIL (DEPARTMENT STORES)--1.6%
Kohl's Corp.(b)......................... 142,700 8,767,131
RETAIL (DRUG STORES)--0.9%
Walgreen Co............................. 84,000 4,919,250
RETAIL (GENERAL MERCHANDISE)--1.0%
Dayton Hudson Corp...................... 100,000 5,425,000
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
RETAIL (SPECIALTY)--1.7%
Republic Industries, Inc. (b)........... 270,000 $ 3,982,500
Staples, Inc.(b)........................ 125,000 5,460,938
-------------
9,443,438
-------------
SERVICES (ADVERTISING/MARKETING)--1.3%
Interpublic Group of Companies, Inc.
(The)................................... 85,750 6,838,563
SERVICES (COMMERCIAL & CONSUMER)--2.9%
Cendant Corp.(b)........................ 832,333 15,866,348
SERVICES (PAYROLL PROCESSING)--1.3%
Paychex, Inc............................ 135,975 6,994,214
TELECOMMUNICATIONS (LONG DISTANCE)--5.6%
MCI WorldCom, Inc.(b)................... 420,600 30,178,050
TOBACCO--0.8%
Philip Morris Companies, Inc............ 82,450 4,411,075
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $265,361,571) 536,374,435
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $265,361,571) 536,374,435(a)
Cash and receivables, less liabilities--1.1% 5,337,261
--------------
NET ASSETS--100.0% $ 541,711,696
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $271,214,995 and gross
depreciation of $1,710,258 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$266,869,698.
(b) Non-income producing.
See Notes to Financial Statements 7
<PAGE>
Phoenix-Engemann Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $265,361,571) $ 536,374,435
Cash 6,886,252
Receivables
Fund shares sold 292,021
Dividends and interest 203,502
--------------
Total assets 543,756,210
--------------
LIABILITIES
Payables
Fund shares repurchased 975,014
Distribution fee 452,276
Investment advisory fee 351,482
Administration fee 221,926
Trustees' fee 5,210
Accrued expenses 38,606
--------------
Total liabilities 2,044,514
--------------
NET ASSETS $ 541,711,696
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 213,641,486
Accumulated net realized gain 57,057,346
Net unrealized appreciation 271,012,864
--------------
NET ASSETS $ 541,711,696
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $441,146,043) 16,448,639
Net asset value per share $26.82
Offering price per share $26.82/(1-4.75%) $28.16
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $65,986,007) 2,589,052
Net asset value and offering price per share $25.49
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $34,579,646) 1,356,769
Net asset value and offering price per share $25.49
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 3,651,796
Interest 458,470
Foreign taxes withheld (10,662)
-------------
Total investment income 4,099,604
-------------
EXPENSES
Investment advisory fee 3,841,502
Distribution fee, Class A 965,685
Distribution fee, Class B 573,110
Distribution fee, Class C 302,676
Distribution fee, Class M 427
Administration 2,419,689
Professional 41,369
Trustees 14,667
-------------
Total expenses 8,159,125
-------------
NET INVESTMENT LOSS (4,059,521)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 77,374,130
Net realized loss on foreign currency transactions (11,008)
Net change in unrealized appreciation (depreciation) on
investments 80,943,604
-------------
NET GAIN ON INVESTMENTS 158,306,726
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 154,247,205
-------------
-------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (4,059,521) $ (4,678,000)
Net realized gain (loss) 77,363,122 95,837,000
Net change in unrealized appreciation
(depreciation) 80,943,604 (18,157,000)
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 154,247,205 73,002,000
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (19,191,036) (74,825,000)
Net realized gains, Class B (3,003,744) (10,906,000)
Net realized gains, Class C (1,570,635) (5,880,000)
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (23,765,415) (91,611,000)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (554,463
and 419,000 shares, respectively) 12,769,077 9,864,000
Net asset value of shares issued from
reinvestment of distributions
(665,077 and 3,374,000 shares,
respectively) 17,245,429 66,573,000
Cost of shares repurchased (3,536,921
and 4,478,000 shares, respectively) (79,785,149) (106,146,000)
------------- -------------
Total (49,770,643) (29,709,000)
------------- -------------
CLASS B
Proceeds from sales of shares (245,967
and 284,000 shares, respectively) 5,372,379 6,477,000
Net asset value of shares issued from
reinvestment of distributions
(110,700 and 529,000 shares,
respectively) 2,728,756 10,026,000
Cost of shares repurchased (534,746
and 357,000 shares, respectively) (11,527,013) (8,373,000)
------------- -------------
Total (3,425,878) 8,130,000
------------- -------------
CLASS C
Proceeds from sales of shares (164,645
and 187,000 shares, respectively) 3,582,593 4,261,000
Net asset value of shares issued from
reinvestment of distributions
(58,568 and 284,000 shares,
respectively) 1,443,709 5,374,000
Cost of shares repurchased (356,278
and 254,000 shares, respectively) (7,561,830) (5,945,000)
------------- -------------
Total (2,535,528) 3,690,000
------------- -------------
CLASS M
Proceeds from sales of shares (4,866
and 0 shares, respectively) 100,100 --
Cost of shares repurchased (4,866 and
0 shares, respectively) (108,609) --
------------- -------------
Total (8,509) --
------------- -------------
DECREASE IN NET ASSETS FROM SHARE
TRANSACTIONS (55,740,558) (17,889,000)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 74,741,232 (36,498,000)
NET ASSETS
Beginning of period 466,970,464 503,468,000
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 541,711,696 $ 466,970,000
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Engemann Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 20.43 $ 21.94 $ 19.28 $ 15.40 $ 16.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.16)(1) (0.16)(1)(2) (0.14)(1)(3) (0.06)(1) (0.03)(1)
Net realized and unrealized gain
(loss) 7.76 3.51 4.47 4.24 (0.57)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 7.60 3.35 4.33 4.18 (0.60)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
Change in net asset value 6.39 (1.51) 2.66 3.88 (0.60)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 26.82 $ 20.43 $ 21.94 $ 19.28 $ 15.40
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 37.41% 16.04%(2) 22.49%(3) 27.16% (3.75)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $441,146 $383,481 $426,785 $415,416 $391,831
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.58% 1.6%(2) 1.6%(3) 1.6% 1.6%
Net investment income (loss) (0.72)% (0.7)%(2) (0.6)%(3) (0.3)% (0.2)%
Portfolio turnover 119% 70.6% 70.1% 65.9% 53.8%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<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) (0.32)(1) (0.34)(1)(2) (0.31)(1)(3) (0.20)(1) (0.14)(1)
Net realized and unrealized gain
(loss) 7.41 3.41 4.39 4.21 (0.47)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 7.09 3.07 4.08 4.01 (0.61)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
Change in net asset value 5.88 (1.79) 2.41 3.71 (0.61)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 25.49 $ 19.61 $ 21.40 $ 18.99 $ 15.28
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 36.38% 15.13%(2) 21.52%(3) 26.26% (3.84)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $65,986 $54,267 $49,444 $34,786 $11,349
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33% 2.4%(2) 2.3%(3) 2.4% 2.3%
Net investment income (loss) (1.47)% (1.5)%(2) (1.5)%(3) (1.1)% (1.0)%
Portfolio turnover 119% 70.6% 70.1% 65.9% 53.8%
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<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) (0.32)(1) (0.34)(1)(2) (0.31)(1)(3) (0.20)(1) (0.14)(1)
Net realized and unrealized gain
(loss) 7.41 3.41 4.39 4.21 (0.47)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 7.09 3.07 4.08 4.01 (0.61)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.21) (4.86) (1.67) (0.30) --
-------- -------- -------- -------- --------
Change in net asset value 5.88 (1.79) 2.41 3.71 (0.61)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 25.49 $ 19.61 $ 21.40 $ 18.99 $ 15.28
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 36.38% 15.13%(2) 21.52%(3) 26.26% (3.84)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $34,580 $29,222 $27,239 $20,497 $6,136
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33% 2.4%(2) 2.3%(3) 2.4% 2.3%
Net investment income (loss) (1.47)% (1.5)%(2) (1.5)%(3) (1.1)% (1.0)%
Portfolio turnover 119% 70.6% 70.1% 65.9% 53.8%
</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) Inception date for Class B and Class C is January 3, 1994.
See Notes to Financial Statements 11
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF THE
PHOENIX-ENGEMANN MUTUAL FUNDS
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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 YEAR?
A: The Nifty Fifty Fund's NAV for Class A Shares increased 35.1%, surpassing
both the 28.8% return of the S&P 500 Index(1) as well as the 22.9% return of the
average growth fund measured by Lipper Inc. Class B and C shares returned 34.1%.
All performance figures assume reinvestment of distributions and exclude the
effect of sales charges.
Q: WHAT FACTORS IMPACTED THE FUND AND WHAT ACCOUNTED FOR THE FUND'S
OUTPERFORMANCE RELATIVE TO THE S&P 500?
A: Both market trends and individual stock selections impacted absolute as well
as relative performance of the Fund. While the Fund's performance tracked
closely to the S&P 500 Index during the first half of 1998, it outperformed the
Index by 5.7% during the second half.
The Fund aggressively shifted into the technology, consumer cyclical, and
financial services sectors during September when the market began to bottom from
its summer correction. The market recovered strongly from its lows of October,
and our concentration in these groups contributed to performance.
Q: WHAT WERE SOME OF THE HIGHLIGHTS?
A: The sell-off or mini bear market during the summer of 1998 provided
interesting buying opportunities. We used weakness in the market to upgrade the
portfolio by concentrating on high quality growth companies that were selling at
what we felt were very depressed valuations. We took the opportunity to increase
positions and add new names in the technology and financial services sectors. We
also reduced our exposure in the consumer staples sector, which was continuing
to experience poor financial results due to weakness from international
operations.
Q: HAS YOUR OUTLOOK FOR THE TECHNOLOGY GROUP CHANGED?
A: We remain very bullish on the outlook for the technology sector, which is
experiencing continued strong growth driven by a variety of factors. In the
communication segment, leading companies such as Lucent, Tellabs, Cisco Systems,
and MCI WorldCom are experiencing explosive growth driven by the continued
build-out of the worldwide communication infrastructure. In addition,
proliferation of the Internet and e-commerce, which allows the creation of new
businesses, will continue to be a major driver of the communication
infrastructure build-out. In the semiconductor segment, the industry has begun
to recover from the downturn triggered by the aggressive capacity expansion of
the mid 1990's along with the weakening demand in Asia.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND IN 1999?
A: The corporate earnings cycle of the past few years was one of the longest and
most resilient on record. However, as we enter 1999, the earnings growth
prospects for the AVERAGE S&P 500 company are expected to slow to historic rates
in the single-digit range. This could be good news for the Fund, which focuses
on high quality growth companies whose earnings we expect to grow much faster
than those of the average company. The Fund had some of its best years, both on
an absolute and relative basis, when the S&P 500 produced negative earnings
growth. Of course, past performance is no guarantee of future results.
JANUARY 29, 1999
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
12
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS TO 12/31/98 DATE
------ ------- ----------- ------------
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 35.13% 21.44% 20.72% 12/17/90
Class A Shares at POP(3) 28.70 20.27 20.01 12/17/90
Class B Shares at NAV(2) 34.14 -- 20.70 1/3/94
Class B Shares with CDSC(4) 30.30 -- 20.53 1/3/94
Class C Shares at NAV(2) 34.14 -- 20.70 1/3/94
Class C Shares with CDSC(4) 34.14 -- 20.70 1/3/94
S&P 500 Index(7) 28.76 24.15 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (Contingent Deferred Sales Charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 20.97% for Class A (since 12/17/90) and 24.23% for
Class B and Class C (since 1/3/94).
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN NIFTY S&P 500
FIFTY FUND CLASS A(6) INDEX(7)
<C> <S>
12/17/1990 $9,525.00 $10,000.00
12/31/1990 $9,488.23 $10,141.80
12/31/1991 $15,906.44 $13,239.47
12/31/1992 $16,490.96 $14,257.68
12/31/1993 $16,404.72 $15,683.47
12/30/1994 $16,577.20 $15,890.96
12/29/1995 $21,253.31 $21,851.23
12/31/1996 $26,890.61 $26,931.14
12/31/1997 $32,060.21 $35,919.56
12/31/1998 $43,324.02 $46,248.77
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/17/90 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 33%
Financials 17
Consumer Cyclicals 15
Health-Care 14
Consumer Staples 12
Communication Services 6
Capital Goods 3
</TABLE>
13
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. MCI WorldCom, Inc. 5.9%
COMPREHENSIVE TELECOMMUNICATIONS SERVICE PROVIDER
2. Medtronic, Inc. 4.2%
LEADING PRODUCER OF IMPLANTABLE CARDIAC DEVICES
3. Pfizer, Inc. 4.0%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
4. EMC Corp. 3.8%
LEADING SUPPLIER OF ENTERPRISE STORAGE SOLUTIONS
5. Lucent Technologies, Inc. 3.8%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
6. Cisco Systems, Inc. 3.6%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
7. Intel Corp. 3.5%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
8. Texas Instruments, Inc. 3.5%
LEADING SUPPLIER OF DIGITIAL SIGNAL PROCESSORS FOR THE
COMMUNICATION MARKET
9. Cendant Corp. 3.4%
FRANCHISER, CENTURY 21, HOWARD JOHNSON, AUTO RENT-A-CAR ET AL.
10. General Electric Co. 3.1%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
COMMON STOCKS--99.4%
BANKS (MAJOR REGIONAL)--3.3%
State Street Corp....................... 25,000 $ 1,739,062
Wells Fargo & Co........................ 269,400 10,759,162
-------------
12,498,224
-------------
BEVERAGES (NON-ALCOHOLIC)--2.2%
Coca-Cola Co. (The)..................... 87,850 5,874,969
PepsiCo, Inc............................ 62,000 2,538,125
-------------
8,413,094
-------------
CHEMICALS (DIVERSIFIED)--0.5%
Monsanto Co............................. 40,000 1,900,000
COMMUNICATIONS EQUIPMENT--5.9%
Lucent Technologies, Inc................ 130,000 14,300,000
Tellabs, Inc.(b)........................ 120,000 8,227,500
-------------
22,527,500
-------------
COMPUTERS (HARDWARE)--3.7%
Compaq Computer Corp.................... 198,200 8,312,012
Dell Computer Corp.(b).................. 80,000 5,855,000
-------------
14,167,012
-------------
COMPUTERS (NETWORKING)--3.6%
Cisco Systems, Inc.(b).................. 147,937 13,730,403
COMPUTERS (PERIPHERALS)--3.8%
EMC Corp.(b)............................ 170,000 14,450,000
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--7.9%
BMC Software, Inc.(b)................... 180,000 $ 8,021,250
Compuware Corp.(b)...................... 57,000 4,453,125
Microsoft Corp.(b)...................... 84,400 11,705,225
Oracle Corp.(b)......................... 137,550 5,931,844
-------------
30,111,444
-------------
CONSUMER FINANCE--0.5%
MBNA Corp............................... 75,000 1,870,312
ELECTRICAL EQUIPMENT--3.1%
General Electric Co..................... 115,000 11,737,187
ELECTRONICS (SEMICONDUCTORS)--6.9%
Intel Corp.............................. 111,500 13,219,719
Texas Instruments, Inc.................. 154,000 13,176,625
-------------
26,396,344
-------------
ENTERTAINMENT--0.9%
Walt Disney Co. (The)................... 111,600 3,348,000
FINANCIAL (DIVERSIFIED)--7.7%
American Express Co..................... 66,000 6,748,500
Citigroup, Inc.......................... 150,000 7,425,000
Freddie Mac............................. 168,250 10,841,609
Morgan Stanley, Dean Witter & Co........ 60,000 4,260,000
-------------
29,275,109
-------------
HEALTH CARE (DIVERSIFIED)--2.5%
American Home Products Corp............. 65,000 3,660,313
Johnson & Johnson....................... 68,000 5,703,500
-------------
9,363,813
-------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
HEALTH CARE (DRUGS--MAJOR PHARMACEUTICALS)--6.9%
Merck & Co., Inc........................ 56,300 $ 8,314,806
Pfizer, Inc............................. 121,950 15,297,103
Schering-Plough Corp.................... 50,000 2,762,500
-------------
26,374,409
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--4.2%
Medtronic, Inc.......................... 216,300 16,060,275
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.6%
Colgate-Palmolive Co.................... 65,600 6,092,600
INSURANCE (MULTI-LINE)--2.0%
American International Group, Inc....... 77,000 7,440,125
INVESTMENT BANKING/BROKERAGE--2.0%
Merrill Lynch & Co., Inc................ 116,000 7,743,000
INVESTMENT MANAGEMENT--1.1%
Franklin Resources, Inc................. 90,400 2,892,800
Price (T. Rowe) Associates, Inc......... 40,000 1,370,000
-------------
4,262,800
-------------
LODGING-HOTELS--2.7%
Carnival Corp........................... 214,700 10,305,600
MANUFACTURING (DIVERSIFIED)--0.6%
Tyco International Ltd.................. 365 27,541
United Technologies Corp................ 20,000 2,175,000
-------------
2,202,541
-------------
PERSONAL CARE--2.4%
Gillette Co............................. 190,600 9,208,363
RESTAURANTS--2.0%
McDonald's Corp......................... 101,000 7,739,125
RETAIL (BUILDING SUPPLIES)--3.4%
Home Depot, Inc. (The).................. 130,000 7,954,375
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
RETAIL (BUILDING SUPPLIES)--CONTINUED
Lowe's Companies, Inc................... 100,300 $ 5,134,106
-------------
13,088,481
-------------
RETAIL (DEPARTMENT STORES)--0.7%
Kohl's Corp.(b)......................... 40,000 2,457,500
RETAIL (DRUG STORES)--1.5%
Walgreen Co............................. 95,000 5,563,438
RETAIL (GENERAL MERCHANDISE)--2.1%
Dayton Hudson Corp...................... 145,000 7,866,250
RETAIL (SPECIALTY)--1.0%
Staples, Inc.(b)........................ 82,500 3,604,219
SERVICES (ADVERTISING/MARKETING)--1.3%
Interpublic Group of Companies, Inc.
(The)................................... 60,000 4,785,000
SERVICES (COMMERCIAL & CONSUMER)--3.4%
Cendant Corp.(b)........................ 677,000 12,905,313
SERVICES (DATA PROCESSING)--0.5%
Automatic Data Processing, Inc.......... 25,000 2,004,688
TELECOMMUNICATIONS (LONG DISTANCE)--5.9%
MCI WorldCom, Inc.(b)................... 315,000 22,601,250
TOBACCO--1.6%
Philip Morris Companies, Inc............ 110,650 5,919,775
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $198,933,779) 378,013,194
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS --99.4%
(IDENTIFIED COST $198,933,779) 378,013,194(a)
Cash and receivables, less liabilities--0.6% 2,436,072
--------------
NET ASSETS--100.0% $ 380,449,266
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $178,052,473 and gross
depreciation of $2,319,680 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$202,280,401.
(b) Non-income producing.
See Notes to Financial Statements 15
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $198,933,779) $378,013,194
Cash 2,897,862
Receivables
Fund shares sold 605,483
Dividends and interest 167,239
------------
Total assets 381,683,778
------------
LIABILITIES
Payables
Fund shares repurchased 341,177
Distribution fee 446,038
Investment advisory fee 250,368
Administration fee 158,073
Trustees' fee 1,784
Accrued expenses 37,072
------------
Total liabilities 1,234,512
------------
NET ASSETS $380,449,266
------------
------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $184,321,838
Accumulated net realized gain 17,048,013
Net unrealized appreciation 179,079,415
------------
NET ASSETS $380,449,266
------------
------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $235,064,848) 6,057,862
Net asset value per share $38.80
Offering price per share $38.80/(1-4.75%) $40.73
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $96,983,082) 2,606,496
Net asset value and offering price per share $37.21
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $48,401,336) 1,300,849
Net asset value and offering price per share $37.21
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,870,327
Interest 320,928
Foreign taxes withheld (8,352)
------------
Total investment income 3,182,903
------------
EXPENSES
Investment advisory fee 2,617,212
Distribution fee, Class A 499,686
Distribution fee, Class B 790,426
Distribution fee, Class C 418,993
Distribution fee, Class M 429
Administration 1,654,508
Professional 39,187
Trustees 14,667
------------
Total expenses 6,035,108
------------
NET INVESTMENT LOSS (2,852,205)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 24,005,577
Net change in unrealized appreciation (depreciation) on
investments 76,678,083
------------
NET GAIN ON INVESTMENTS 100,683,660
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 97,831,455
------------
------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (2,852,205) $ (2,495,000)
Net realized gain (loss) 24,005,577 23,555,000
Net change in unrealized appreciation
(depreciation) 76,678,083 21,916,000
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 97,831,455 42,976,000
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (3,938,869) (13,104,000)
Net realized gains, Class B (1,688,560) (5,183,000)
Net realized gains, Class C (844,698) (3,031,000)
------------- -------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (6,472,127) (21,318,000)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,393,163 and 1,403,000 shares,
respectively) 45,389,712 42,888,000
Net asset value of shares issued from
reinvestment of distributions
(94,125 and 417,000 shares,
respectively) 3,589,938 11,853,000
Cost of shares repurchased (1,467,112
and 1,272,000 shares, respectively) (47,556,423) (38,417,000)
------------- -------------
Total 1,423,227 16,324,000
------------- -------------
CLASS B
Proceeds from sales of shares (498,534
and 681,000 shares, respectively) 15,592,450 19,549,000
Net asset value of shares issued from
reinvestment of distributions
(40,281 and 166,000 shares,
respectively) 1,473,476 4,576,000
Cost of shares repurchased (341,912
and 259,000 shares, respectively) (10,575,072) (7,706,000)
------------- -------------
Total 6,490,854 16,419,000
------------- -------------
CLASS C
Proceeds from sales of shares (213,942
and 551,000 shares, respectively) 6,658,822 15,687,000
Net asset value of shares issued from
reinvestment of distributions
(20,953 and 101,000 shares,
respectively) 766,453 2,780,000
Cost of shares repurchased (342,357
and 252,000 shares, respectively) (10,440,823) (7,370,000)
------------- -------------
Total (3,015,548) 11,097,000
------------- -------------
CLASS M
Proceeds from sales of shares (3,392
and 0 shares, respectively) 100,100 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (3,392 and
0 shares, respectively) (111,184) --
------------- -------------
Total (11,084) --
------------- -------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 4,887,449 43,840,000
------------- -------------
NET INCREASE IN NET ASSETS 96,246,777 65,498,000
NET ASSETS
Beginning of period 284,202,489 218,704,000
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 380,449,266 $ 284,202,000
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.21 $ 26.50 $ 22.18 $ 17.30 $ 17.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.20)(1) (0.20)(1)(2) (0.12)(1)(3) (0.05)(1) (0.03)(1)
Net realized and unrealized gain
(loss) 10.45 5.23 6.00 4.93 0.21
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 10.25 5.03 5.88 4.88 0.18
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
Change in net asset value 9.59 2.71 4.32 4.88 0.18
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 38.80 $ 29.21 $ 26.50 $ 22.18 $ 17.30
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 35.13% 19.23%(2) 26.53%(3) 28.21% 1.05%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $235,065 $176,378 $145,469 $122,322 $100,596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.60% 1.6%(2) 1.7%(3) 1.9% 1.9%
Net investment income (loss) (0.61)% (0.7)%(2) (0.4)%(3) (0.3)% (0.2)%
Portfolio turnover 92% 68.8% 41.9% 26.5% 23.2%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<S> <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) (0.43)(1) (0.42)(1)(2) (0.30)(1)(3) (0.21)(1) (0.14)(1)
Net realized and unrealized gain
(loss) 10.06 5.10 5.89 4.89 0.29
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 9.63 4.68 5.59 4.68 0.15
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
Change in net asset value 8.97 2.36 4.03 4.68 0.15
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 37.21 $ 28.24 $ 25.88 $ 21.85 $ 17.17
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 34.14% 18.33%(2) 25.60%(3) 27.26% 0.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $96,983 $68,051 $47,143 $27,462 $6,722
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.35% 2.4%(2) 2.5%(3) 2.6% 2.6%
Net investment income (loss) (1.35)% (1.4)%(2) (1.2)%(3) (1.0)% (0.9)%
Portfolio turnover 92% 68.8% 41.9% 26.5% 23.2%
</TABLE>
18 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 C
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<S> <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) (0.43)(1) (0.42)(1)(2) (0.30)(1)(3) (0.21)(1) (0.15)(1)
Net realized and unrealized gain
(loss) 10.06 5.10 5.89 4.89 0.30
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 9.63 4.68 5.59 4.68 0.15
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- -- --
Dividends from net realized gains (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.66) (2.32) (1.56) -- --
-------- -------- -------- -------- --------
Change in net asset value 8.97 2.36 4.03 4.68 0.15
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 37.21 $ 28.24 $ 25.88 $ 21.85 $ 17.17
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 34.14% 18.33%(2) 25.60%(3) 27.26% 0.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $48,401 $39,773 $26,092 $15,105 $4,283
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.35% 2.4%(2) 2.5%(3) 2.6% 2.6%
Net investment income (loss) (1.35)% (1.4)%(2) (1.2)%(3) (1.0)% (0.9)%
Portfolio turnover 92% 68.8% 41.9% 26.5% 23.2%
</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) Inception date for Class B and Class C is January 3, 1994.
See Notes to Financial Statements 19
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF THE
PHOENIX-ENGEMANN MUTUAL FUNDS
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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 US government securities.
Q: HOW DID THE FUND PERFORM IN THE YEAR ENDED DECEMBER 31, 1998?
A: This was an excellent year for the Phoenix-Engemann Balanced Return Fund. The
NAV for Class A Shares increased 29.1%, Class B and Class C shares earned 28.1%
compared to the Fund's benchmark, which was up 20.9% for the same period. All
performance figures assume reinvestment of distributions and exclude the effect
of sale charges. The benchmark is composed of 60% S&P 500 Stock Index(1), 30%
Lehman Brothers Government/Corporate Bond Index(2) and 10% Treasury bills(3).
The performance benchmark was changed to a composite index because this measure
more accurately represents the Fund's asset mix than does the S&P 500 Index, the
Fund's previous benchmark.
The Fund also fared well against the average balanced fund in a universe of
409 funds, which was up only 13.5% for 1998 according to Lipper Inc. However,
one of the things we are most proud of is that the Fund beat the S&P 500 Index,
an all-stock index, which was up 28.8% for the period. All performance figures
assume reinvestment of distributions and exclude the effect of sales charges.
Q: WHAT WAS THE KEY TO SUCCESS FOR THE BALANCED RETURN FUND?
A: This was a year in which growth stocks shined. Our investment in the
technology and communications sectors paid off, with Cisco, Microsoft, MCI
WorldCom and Oracle providing strong gains for the year. In addition, as the
stock market fell in September and October, we saw an opportunity to add to
technology and financial weightings. The market quickly rebounded in the fourth
quarter, and our higher weighting in these areas further enhanced the Fund's
performance.
Q: WERE THERE ANY DISAPPOINTMENTS IN THE FUND DURING THE YEAR?
A: Yes, some of the stocks in the consumer staples area did not perform as well
as we expected in 1998. Stocks like Gillette and Coke, which have been great
performers for us in the past, were flat to down for the year. Much of the
growth in these companies comes from their overseas operations. This growth was
called into question when problems erupted in the economies of Asia and Latin
America causing the stocks to underperform.
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(2) THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX IS AN UNMANAGED,
COMMONLY USED MEASURE OF GOVERNMENT AND CORPORATE BOND TOTAL RETURN
PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(3) THE 90-DAY TREASURY BILL IS A COMMONLY USED MEASURE OF SHORT-TERM DEBT TOTAL
RETURN PERFORMANCE.
20
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND (CONTINUED)
Q: HOW DID THE FIXED-INCOME PORTION OF THE FUND FARE IN 1998?
A: We were very pleased with the fixed-income portion of the portfolio. Our
investment in U.S. Treasuries provided stability to the Fund in the last half of
the year when the equity markets were experiencing heightened volatility.
Furthermore, because the fixed-income portion of the portfolio was entirely
composed of U.S. Treasuries, it continued to perform well during the
international crisis when lower quality issues plummeted in price.
Q: WHAT IS THE OUTLOOK FOR THE BALANCED RETURN FUND IN 1999?
A: We think 1999 will continue to be a good year for growth stocks and that the
Balanced Fund is well positioned to capitalize on that trend. The U.S. economy
should grow at a slower pace this year, which typically provides a positive
environment for quality growth stocks. Therefore, we expect the equity portion
of the Balanced Return Fund to continue to do well. Inflation continues to
remain subdued and interest rates are low and are trending lower. These are good
signs for the fixed-income portion of the portfolio as the bonds in the
portfolio become more valuable as interest rates decline. Overall, we believe
the Balanced Return Fund will provide good risk-adjusted returns given its
current asset mix of 72% equities and 28% fixed income.
JANUARY 29, 1999
21
<PAGE>
Phoenix-Engemann Balanced Return Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 12/31/98 DATE
------ ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 29.12% 17.07% 15.79% -- --
Class A Shares at POP(3) 22.98 15.93 15.23 -- --
Class B Shares at NAV(2) 28.06 -- -- 16.26% 1/3/94
Class B Shares with CDSC(4) 24.21 -- -- 16.06 1/3/94
Class C Shares at NAV(2) 28.07 -- -- 16.26 1/3/94
Class C Shares with CDSC(4) 28.07 -- -- 16.26 1/3/94
S&P 500 Index(6) 28.76 24.15 19.22 24.23 1/3/94
Balanced Benchmark(7) 20.94 17.15 14.98 23.76 Note 8
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (Contingent Deferred Sales Charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B and Class C Shares will vary due to differing sales charges.
(6) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
(7) The Balanced Benchmark is a composite index made up of 60% of the S&P 500
Index return, 30% of the Lehman Brothers Government/Corporate Bond Index
return and 10% of the 90-day Treasury Bill return. The Index's performance
does not reflect sales charges.
(8) Index information from 1/31/94 to 12/31/98.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN S&P
BALANCED BALANCED 500
RETURN FUND BENCHMARK(7) INDEX(6)
CLASS A(5)
<C> <S>
12/30/88 $9,525.00 $10,000.00 $10,000.00
12/29/89 $12,669.59 $12,387.34 $13,143.49
12/31/90 $12,619.68 $12,573.14 $12,723.63
12/31/91 $17,527.15 $15,555.86 $16,609.89
12/31/92 $18,313.85 $16,692.29 $17,887.30
12/31/93 $18,760.56 $18,301.97 $19,676.05
12/31/94 $17,929.15 $18,341.62 $19,936.37
12/31/95 $22,801.57 $23,555.11 $27,413.96
12/31/96 $26,856.61 $27,108.08 $33,787.07
12/31/97 $31,954.69 $33,390.46 $45,063.71
12/31/98 $41,260.10 $40,381.35 $58,022.45
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/31/88 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 32%
Financials 18
Consumer Staples 15
Consumer Cyclicals 14
Health-Care 13
Communication Services 5
Capital Goods 2
Other 1
</TABLE>
22
<PAGE>
Phoenix-Engemann Balanced Return Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. U.S. Government Securities 27.2%
U.S. TREASURY BONDS & NOTES
2. Intel Corp. 4.4%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
3. MCI WorldCom, Inc. 3.6%
COMPREHENSIVE TELECOMMUNICATIONS SERVICE PROVIDER
4. Merck & Co., Inc. 2.9%
LEADING MANUFACTURER OF PHARMACEUTICALS
5. Pfizer, Inc. 2.8%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
6. Carnival Corp. 2.6%
LEADING CRUISE LINE OPERATOR
7. Freddie Mac 2.6%
GOVERNMENT AGENCY MORTGAGE ISSUER
8. McDonald's Corp. 2.5%
FAST FOOD RESTAURANT OPERATOR
9. Texas Instruments, Inc. 2.4%
LEADING SUPPLIER OF DIGITAL SIGNAL PROCESSORS FOR THE COMMUNICATION
MARKET
10. Lucent Technologies, Inc. 2.3%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--27.2%
U.S. TREASURY BONDS-- 13.9%
U.S. Treasury Bonds 6%, 2/15/26......... AAA $ 11,700 $ 12,791,443
U.S. TREASURY NOTES--13.3%
U.S. Treasury Notes 6.50%, 8/15/05...... AAA 11,100 12,203,635
- ---------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $23,936,183) 24,995,078
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C> <C>
COMMON STOCKS--69.7%
BANKS (MAJOR REGIONAL)--2.6%
State Street Corp....................... 11,000 765,187
Wells Fargo & Co........................ 41,000 1,637,437
-------------
2,402,624
-------------
BEVERAGES (NON-ALCOHOLIC)--1.0%
Coca-Cola Co. (The)..................... 13,900 929,562
COMMUNICATIONS EQUIPMENT--3.8%
Lucent Technologies, Inc................ 19,000 2,090,000
Tellabs, Inc.(b)........................ 20,000 1,371,250
-------------
3,461,250
-------------
COMPUTERS (HARDWARE)--1.6%
Compaq Computer Corp.................... 35,000 1,467,812
<CAPTION>
SHARES VALUE
------- -------------
<S> <C> <C> <C>
COMPUTERS (NETWORKING)--2.1%
Cisco Systems, Inc.(b).................. 20,400 $ 1,893,375
COMPUTERS (PERIPHERALS)--2.1%
EMC Corp.(b)............................ 23,000 1,955,000
COMPUTERS (SOFTWARE & SERVICES)--5.4%
BMC Software, Inc.(b)................... 29,000 1,292,313
Compuware Corp.(b)...................... 10,000 781,250
Microsoft Corp.(b)...................... 13,920 1,930,530
Oracle Corp.(b)......................... 21,800 940,125
-------------
4,944,218
-------------
ELECTRICAL EQUIPMENT--1.7%
General Electric Co..................... 15,000 1,530,938
ELECTRONICS (SEMICONDUCTORS)--6.8%
Intel Corp.............................. 34,000 4,031,125
Texas Instruments, Inc.................. 26,000 2,224,625
-------------
6,255,750
-------------
ENTERTAINMENT--1.4%
Walt Disney Co. (The)................... 41,670 1,250,100
FINANCIAL (DIVERSIFIED)--5.4%
American Express Co..................... 11,500 1,175,875
Citigroup, Inc.......................... 20,000 990,000
Freddie Mac............................. 37,100 2,390,631
Morgan Stanley, Dean Witter & Co.(b).... 6,000 426,000
-------------
4,982,506
-------------
</TABLE>
See Notes to Financial Statements 23
<PAGE>
Phoenix-Engemann Balanced Return Fund
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------
<S> <C> <C> <C>
HEALTH CARE (DIVERSIFIED)--1.1%
Johnson & Johnson....................... 12,000 $ 1,006,500
HEALTH CARE (DRUGS--MAJOR PHARMACEUTICALS)--5.7%
Merck & Co., Inc........................ 18,000 2,658,375
Pfizer, Inc............................. 20,300 2,546,381
-------------
5,204,756
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.1%
Medtronic, Inc.......................... 25,800 1,915,650
HOUSEHOLD PRODUCTS (NON-DURABLES)--1.6%
Colgate-Palmolive Co.................... 15,500 1,439,563
INSURANCE (MULTI-LINE)--2.1%
American International Group, Inc....... 20,000 1,932,500
INVESTMENT BANKING/BROKERAGE--0.5%
Merrill Lynch & Co., Inc................ 7,000 467,250
INVESTMENT MANAGEMENT--1.7%
Franklin Resources, Inc................. 29,000 928,000
Price (T. Rowe) Associates, Inc......... 19,000 650,750
-------------
1,578,750
-------------
LODGING-HOTELS--2.6%
Carnival Corp........................... 50,000 2,400,000
PERSONAL CARE--1.5%
Gillette Co............................. 28,000 1,352,750
RAILROADS--1.3%
Kansas City Southern Industries, Inc.... 25,000 1,229,688
<CAPTION>
SHARES VALUE
------- -------------
<S> <C> <C> <C>
RESTAURANTS--2.5%
McDonald's Corp......................... 29,450 $ 2,256,606
RETAIL (BUILDING SUPPLIES)--1.9%
Home Depot, Inc. (The).................. 29,000 1,774,438
RETAIL (DRUG STORES)--0.8%
Walgreen Co............................. 11,800 691,038
RETAIL (GENERAL MERCHANDISE)--2.2%
Dayton Hudson Corp...................... 38,000 2,061,500
SERVICES (ADVERTISING/MARKETING)--2.1%
Interpublic Group of Companies, Inc.
(The)................................... 24,000 1,914,000
SERVICES (COMMERCIAL & CONSUMER)--0.8%
Cendant Corp.(b)........................ 38,000 724,375
TELECOMMUNICATIONS (LONG DISTANCE)--3.6%
MCI WorldCom, Inc.(b)................... 46,000 3,300,500
TOBACCO--1.7%
Philip Morris Companies, Inc............ 30,000 1,605,000
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $31,126,112) 63,927,999
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--96.9%
(IDENTIFIED COST $55,062,295) 88,923,077(a)
Cash and receivables, less liabilities--3.1% 2,819,210
-------------
NET ASSETS--100.0% $ 91,742,287
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $33,737,432 and gross
depreciation of $53,178 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$55,238,823.
(b) Non-income producing.
24 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Balanced Return Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $55,062,295) $ 88,923,077
Cash 2,361,921
Receivables
Dividends and interest 588,155
Fund shares sold 174,923
-------------
Total assets 92,048,076
-------------
LIABILITIES
Payables
Fund shares repurchased 89,784
Distribution fee 84,986
Investment advisory fee 56,927
Administration fee 41,876
Trustees' fee 6,464
Accrued expenses 25,752
-------------
Total liabilities $ 305,789
-------------
NET ASSETS $ 91,742,287
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 54,879,407
Accumulated net realized gain 3,002,098
Net unrealized appreciation 33,860,782
-------------
NET ASSETS $ 91,742,287
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $72,619,667) 2,085,244
Net asset value per share $34.83
Offering price per share $34.83/(1-4.75%) $36.57
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $11,512,253) 334,934
Net asset value and offering price per share $34.37
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,610,367) 220,980
Net asset value and offering price per share $34.44
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 546,292
Interest 1,650,792
Foreign taxes withheld (3,257)
-------------
Total investment income 2,193,827
-------------
EXPENSES
Investment advisory fee 602,837
Distribution fee, Class A 158,546
Distribution fee, Class B 90,270
Distribution fee, Class C 64,475
Distribution fee, Class M 414
Administration 444,883
Professional 27,087
Trustees 14,667
-------------
Total expenses 1,403,179
-------------
NET INVESTMENT INCOME 790,648
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 8,795,193
Net change in unrealized appreciation (depreciation) on
investments 11,029,950
-------------
NET GAIN ON INVESTMENTS 19,825,143
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,615,791
-------------
-------------
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Phoenix-Engemann Balanced Return Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 790,648 $ 562,000
Net realized gain (loss) 8,795,193 7,971,000
Net change in unrealized appreciation
(depreciation) 11,029,950 2,552,000
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 20,615,791 11,085,000
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (718,900) (537,000)
Net investment income, Class B (51,501) (22,000)
Net investment income, Class C (31,607) (15,000)
Net realized gains, Class A (4,454,688) (6,686,000)
Net realized gains, Class B (700,523) (824,000)
Net realized gains, Class C (468,778) (659,000)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (6,425,997) (8,743,000)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (511,438
and 173,000 shares, respectively) 16,268,814 5,340,000
Net asset value of shares issued from
reinvestment of distributions
(140,176 and 233,000 shares,
respectively) 4,824,840 6,692,000
Cost of shares repurchased (514,775
and 308,000 shares, respectively) (16,514,937) (9,485,000)
------------ ------------
Total 4,578,717 2,547,000
------------ ------------
CLASS B
Proceeds from sales of shares (138,818
and 92,000 shares, respectively) 4,376,531 2,810,000
Net asset value of shares issued from
reinvestment of distributions
(20,594 and 28,000 shares,
respectively) 699,581 781,000
Cost of shares repurchased (72,187 and
38,000 shares, respectively) (2,275,763) (1,166,000)
------------ ------------
Total 2,800,349 2,425,000
------------ ------------
CLASS C
Proceeds from sales of shares (69,806
and 64,000 shares, respectively) 2,171,650 1,952,000
Net asset value of shares issued from
reinvestment of distributions
(13,470 and 22,000 shares,
respectively) 458,553 633,000
Cost of shares repurchased (56,060 and
42,000 shares, respectively) (1,759,923) (1,322,000)
------------ ------------
Total 870,280 1,263,000
------------ ------------
CLASS M
Proceeds from sales of shares (3,393
and 0 shares, respectively) 100,100 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (3,393 and
0 shares, respectively) (112,685) --
------------ ------------
Total (12,585) --
------------ ------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 8,236,761 6,235,000
------------ ------------
NET INCREASE IN NET ASSETS 22,426,555 8,577,000
NET ASSETS
Beginning of period 69,315,732 60,739,000
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME
OF $0 AND $11,002, RESPECTIVELY] $ 91,742,287 $ 69,316,000
------------ ------------
------------ ------------
</TABLE>
26 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 A
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.05 $ 28.08 $ 25.39 $ 20.54 $ 21.97
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.40 0.30(1)(2) 0.29(1)(3) 0.27(1) 0.39(1)
Net realized and unrealized gain
(loss) 8.03 4.98 4.23 5.31 (1.36)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 8.43 5.28 4.52 5.58 (0.97)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.40) (0.32) (0.30) (0.29) (0.46)
Dividends from net realized gains (2.25) (3.99) (1.53) (0.44) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (2.65) (4.31) (1.83) (0.73) (0.46)
-------- -------- -------- -------- --------
Change in net asset value 5.78 0.97 2.69 4.85 (1.43)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 34.83 $ 29.05 $ 28.08 $ 25.39 $ 20.54
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 29.12% 18.98%(2) 17.78%(3) 27.18% (4.43)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $72,620 $56,610 $51,947 $52,028 $53,047
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.63% 1.7%(2) 2.0%(3) 2.1% 2.1%
Net investment income (loss) 1.15% 1.0%(2) 1.1%(3) 1.2% 1.8%
Portfolio turnover 124% 40.3% 35.1% 51.1% 28.2%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<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) 0.13 0.08(1)(2) 0.09(1)(3) 0.08(1) 0.26(1)
Net realized and unrealized gain
(loss) 7.91 4.93 4.16 5.29 (1.32)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 8.04 5.01 4.25 5.37 (1.06)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.18) (0.11) (0.13) (0.16) (0.34)
Dividends from net realized gains (2.25) (3.99) (1.53) (0.44) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (2.43) (4.10) (1.66) (0.60) (0.34)
-------- -------- -------- -------- --------
Change in net asset value 5.61 0.91 2.59 4.77 (1.40)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $34.37 $ 28.76 $ 27.85 $ 25.26 $ 20.49
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 28.06% 18.15%(2) 16.82%(3) 26.20% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $ 11,512 $ 7,125 $ 4,609 $ 2,721 $ 1,223
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.38% 2.4%(2) 2.7%(3) 2.9% 2.9%
Net investment income (loss) 0.39% 0.3%(2) 0.3%(3) 0.3% 1.3%
Portfolio turnover 124% 40.3% 35.1% 51.1% 28.2%
</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) Inception date for Class B and Class C is January 3, 1994.
See Notes to Financial Statements 27
<PAGE>
Phoenix-Engemann Balanced Return Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------
1998 1997 1996 1995 1994(5)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 28.80 $ 27.88 $ 25.28 $ 20.48 $ 21.89
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.14 0.08(1)(2) 0.09(1)(3) 0.07(1) 0.25(1)
Net realized and unrealized gain
(loss) 7.92 4.92 4.16 5.30 (1.31)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 8.06 5.00 4.25 5.37 (1.06)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.17) (0.09) (0.12) (0.13) (0.35)
Dividends from net realized gains (2.25) (3.99) (1.53) (0.44) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (2.42) (4.08) (1.65) (0.57) (0.35)
-------- -------- -------- -------- --------
Change in net asset value 5.64 0.92 2.60 4.80 (1.41)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 34.44 $ 28.80 $ 27.88 $ 25.28 $ 20.48
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 28.07% 18.11%(2) 16.79%(3) 26.23% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $ 7,610 $ 5,581 $ 4,183 $ 2,809 $ 1,449
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.38% 2.4%(2) 2.7%(3) 2.9% 2.9%
Net investment income (loss) 0.39% 0.3%(2) 0.3%(3) 0.3% 1.3%
Portfolio turnover 124% 40.3% 35.1% 51.1% 28.2%
</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) Inception date for Class B and Class C is January 3, 1994.
28 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF THE
PHOENIX-ENGEMANN MUTUAL FUNDS
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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 YEAR ENDED DECEMBER 31, 1998?
A: The NAV for the Phoenix-Engemann Global Growth Fund's Class A Shares
increased 14.4%, compared to 21.7% for the Morgan Stanley Capital International
(MSCI) All Country World Index.(1) The Fund slightly outpaced the performance of
the average global stock fund in a universe of 224 funds, which increased 14.3%,
according to Lipper Inc. Class B and C shares returned 13.3%. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Q: WHAT WERE THE FACTORS BEHIND THE FUND'S PERFORMANCE DURING THIS PERIOD?
A: The year 1998 was a volatile one for global markets as a result of the
ongoing crisis in Asia, the devaluation and debt default in Russia, recessionary
conditions in Japan, and continued concerns over the outlook for Brazil and
Latin America. The significant market volatility made it a difficult year for
global investing.
After rising ahead of the benchmark during the first half of the year, the
Fund suffered a sharp decline during the market sell-off in the third quarter
and fell behind the benchmark, largely as a result of its relatively heavy
exposure to Latin America, which performed poorly, and its lack of exposure to
Asia, which began to recover. Although the Fund performed well in the fourth
quarter, the gain was not enough to enable the Fund to outpace the index by
year-end.
The Fund was helped by its significant exposure to the U.S. and European
markets, both of which did well during the year. Exposure to technology,
particularly telecommunications, also helped performance. In contrast, exposure
to energy companies and consumer stocks generally detracted from the Fund's
performance.
Q: PLEASE DISCUSS A FEW OF THE STOCKS THAT DID WELL DURING THE PERIOD AS WELL AS
THOSE THAT TURNED IN DISAPPOINTING RESULTS.
A: The Fund had some outstanding performers during the year, the best of which
was Nokia Corporation, the wireless communications equipment supplier. Nokia is
benefiting from the ongoing proliferation of wireless communications and a
strong product line-up. Cisco Systems, the second best performer, is
capitalizing on the rapid growth of the data networking market. Vodafone, the
UK-based wireless communications service provider, was another top performer.
Others include Microsoft and Oracle, both of which continue to grow rapidly
owing to the strong demand for software.
(1) THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) ALL COUNTRY WORLD INDEX IS
AN UNMANAGED, COMMONLY USED MEASURE OF GLOBAL STOCK MARKET TOTAL RETURN
PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
29
<PAGE>
PHOENIX-ENGEMANN GLOBAL GROWTH FUND (CONTINUED)
The Fund had its share of poor performers during the year. One was Cendant,
a company formed by the merger of HFS and CUC Corporation, which holds the
franchise rights to such well-known brand names as Century 21, Howard Johnson,
and Avis Rent A Car. Cendant stock declined sharply after accounting
irregularities forced it to restate its earnings. Another poor performer was
Alcatel, the French telecommunications equipment provider. Alcatel announced its
profits would fall short of expectations as a result of a drop in orders as well
as the slowdown in Asia and Russia. Other poor performers include Tecnomatix
Technologies, an Israeli software company, and Huaneng Power, a Chinese electric
utility, both of which were sold during the year.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND?
A: We are cautiously optimistic about the future, although, in our view, global
markets will continue to be volatile. The crisis in Asia appears to have
stabilized, but Japan is likely to remain mired in recession, and Latin America
should continue to experience tough economic conditions as a result of the
currency devaluation in Brazil. The U.S. and Europe could see a reduction in
growth as a result of continued economic weakness in the rest of the world.
However, we believe both regions should continue to do well. A slow growth
economy is likely to keep a lid on inflation and therefore interest rates. We
believe this is generally a favorable environment for global investing.
JANUARY 29, 1999
30
<PAGE>
Phoenix-Engemann Global Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS TO 12/31/98 DATE
------ ------- ----------- -----------
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 14.35% 19.26% 21.18% 11/1/93
Class A Shares at POP(3) 8.91 18.11 20.05 11/1/93
Class B Shares at NAV(2) 13.31 -- 15.00 9/18/96
Class B Shares with CDSC(4) 9.47 -- 13.94 9/18/96
Class C Shares at NAV(2) 13.26 -- 14.37 10/21/96
Class C Shares with CDSC(4) 13.26 -- 14.37 10/21/96
MSCI AC World Index(7) 21.72 14.48 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (Contingent Deferred Sales Charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 19.22% for Class A (since 11/30/93) 18.06% for Class B
(since 9/30/96) and 18.63% for Class C (since 10/31/96).
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The MSCI AC World (Morgan Stanley Capital International All Country World
Index) is an unmanged, commonly used measure of global stock market total
return performance. The Index's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
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.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN GLOBAL MSCI AC
GROWTH FUND CLASS A(6) WORLD INDEX(7)
<C> <S>
11/1/93 $9,525.00 $10,000.00
12/31/93 $10,647.62 $10,581.27
12/30/94 $13,390.48 $11,148.89
12/29/95 $16,582.77 $13,182.61
12/31/96 $20,193.23 $14,907.67
12/31/97 $22,468.65 $17,094.57
12/31/98 $25,693.14 $20,807.10
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
11/1/93 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
COUNTRY WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 46%
United Kingdom 10
Germany 9
Netherlands 8
France 7
Switzerland 6
Finland 3
Other 11
</TABLE>
31
<PAGE>
Phoenix-Engemann Global Growth Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. SAP AG Sponsored ADR 3.7%
PROVIDES BUSINESS APPLICATIONS SOFTWARE AND CONSULTING SERVICES
2. Zurich Allied AG Registered Shares 3.4%
GLOBAL FINANCIAL SERVICES FIRM
3. Nokia Corp. Sponsored ADR Class A 3.3%
WIRELESS COMMUNICATIONS EQUIPMENT SUPPLIER
4. ING Groep NV 3.2%
GLOBAL FINANCIAL SERVICES FIRM
5. Vivendi 2.9%
PROVIDES INDUSTRIAL SERVICES
6. Vodafone Group PLC Sponsored ADR 2.6%
WIRELESS COMMUNICATIONS SERVICE PROVIDER
7. Wolters Kluwer NV 2.5%
PUBLISHER OF LEGAL, TAX, BUSINESS AND MEDICAL INFORMATION
8. Amvescap PLC Sponsored ADR 2.4%
GLOBAL ASSET MANAGEMENT COMPANY
9. Intel Corp. 2.2%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
10. Telefonaktiebolaget LM Ericsson Sponsored ADR 2.1%
AN INTERNATIONAL LEADER IN TELECOMMUNICATIONS EQUIPMENT
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--52.0%
FINLAND--3.3%
Nokia Corp. Sponsored ADR Class A
(Communications Equipment).............. 6,100 $ 734,669
FRANCE--6.9%
AXA-UAP Sponsored ADR (Insurance
(Life/Health)).......................... 4,800 346,800
Alcatel SA ADR (Communications
Equipment).............................. 10,100 246,819
Rhone-Poulenc Class A (Health Care
(Drugs-Major Pharmaceuticals)).......... 6,000 308,915
Vivendi (Services (Commercial &
Consumer)).............................. 2,500 648,943
------------
1,551,477
------------
GERMANY--9.1%
DaimlerChrysler AG (Automobiles)(b)..... 3,758 361,003
Hoechst AG (Chemicals).................. 6,500 269,676
SAP AG Sponsored ADR (Computers
(Software & Services))(b)............... 23,000 829,437
Siemens AG (Manufacturing
(Diversified)).......................... 4,100 269,555
Volkswagen AG (Automobiles)............. 3,900 315,649
------------
2,045,320
------------
IRELAND--3.0%
Allied Irish Banks PLC Sponsored ADR
(Banks (Major Regional))................ 2,300 253,862
Elan Corp. PLC Sponsored ADR (Health
Care (Drugs-Major
Pharmaceuticals))(b).................... 6,100 424,331
------------
678,193
------------
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
ITALY--2.9%
Luxottica Group SPA Sponsored ADR
(Health Care (Medical Products &
Supplies)).............................. 25,000 $ 300,000
Telecom Italia SPA Sponsored ADR
(Communications Equipment).............. 4,000 348,000
------------
648,000
------------
NETHERLANDS--7.5%
ING Groep NV (Banks (Money Center))..... 11,725 715,370
Koninklijke Philips Electronics NV NY
Registered Shares (Electrical
Equipment).............................. 2,100 142,144
Unilever NV NY Registered Shares
(Personal Care)......................... 3,100 257,106
Wolters Kluwer NV (Publishing).......... 2,626 562,234
------------
1,676,854
------------
SINGAPORE--1.4%
Datacraft Asia Ltd. (Communications
Equipment).............................. 172,250 304,882
SOUTH KOREA--0.0%
Kookmin Bank Sponsored GDR 144A (Banks
(Money Center))(c)...................... 1 7
SWEDEN--2.1%
Telefonaktiebolaget LM Ericsson
Sponsored ADR (Communications
Equipment).............................. 19,500 466,781
SWITZERLAND--5.8%
Nestle SA Sponsored ADR (Foods)......... 2,200 239,465
Novartis AG NY Registered Shares (Health
Care (Drugs--Major Pharmaceuticals)).... 160 314,530
</TABLE>
32 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Global Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
SWITZERLAND--CONTINUED
Zurich Allied AG Registered Shares
(Insurance (Multi-Line))................ 1,020 $ 755,264
------------
1,309,259
------------
UNITED KINGDOM--10.0%
Amvescap PLC Sponsored ADR (Banks (Major
Regional)).............................. 14,200 546,700
Cable & Wireless Communications PLC
(Telecommunications
(Cellular/Wireless))(b)................. 5,200 235,950
Hays PLC (Professional Services)........ 37,000 324,734
Ladbroke Group PLC (Gaming, Lottery &
Parimutuel Companies)(b)................ 34,653 139,239
Rentokil Initial PLC (Services
(Facilities & Environmental))........... 55,500 418,307
Vodafone Group PLC Sponsored ADR
(Telecommunications
(Cellular/Wireless)).................... 3,600 580,050
------------
2,244,980
------------
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $8,917,446) 11,660,422
- -----------------------------------------------------------------------------
COMMON STOCKS--46.4%
UNITED STATES--46.4%
Affiliated Managers Group, Inc.
(Investment Management)(b).............. 8,000 239,000
American Express Co. (Financial
(Diversified)).......................... 2,785 284,766
American International Group, Inc.
(Insurance (Multi-Line))................ 2,395 231,417
BMC Software, Inc. (Computers (Software
& Services))(b)......................... 3,725 165,995
Carnival Corp. (Lodging-Hotels)......... 6,350 304,800
Cendant Corp. (Services (Commercial &
Consumer))(b)........................... 5,184 98,820
Cisco Systems, Inc. (Computers
(Networking))(b)........................ 3,910 362,897
Citigroup, Inc. (Financial
(Diversified)).......................... 3,480 172,260
Coca-Cola Co. (The) (Beverages
(Non-Alcoholic))........................ 2,775 185,578
Colgate-Palmolive Co. (Household
Products (Non-Durables))................ 2,400 222,900
Compaq Computer Corp. (Computers
(Hardware))............................. 4,140 173,621
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
UNITED STATES--CONTINUED
Compuware Corp. (Computers (Software &
Services))(b)........................... 1,285 $ 100,391
Dayton Hudson Corp. (Retail (General
Merchandise))........................... 5,445 295,391
EMC Corp. (Computers
(Peripherals))(b)....................... 3,230 274,550
Federated Investors, Inc. (Investment
Management)............................. 12,500 226,563
Franklin Resources, Inc. (Investment
Management)............................. 3,365 107,680
Freddie Mac (Financial (Diversified))... 5,670 365,361
General Electric Co. (Electrical
Equipment).............................. 2,245 229,130
Gillette Co. (Personal Care)............ 4,120 199,048
Home Depot, Inc. (The) (Retail (Building
Supplies)).............................. 3,970 242,914
Intel Corp. (Electronics
(Semiconductors))....................... 4,160 493,220
Interpublic Group of Companies, Inc.
(The) (Services
(Advertising/Marketing))................ 3,110 248,023
Johnson & Johnson (Health Care
(Diversified)).......................... 1,880 157,685
Kansas City Southern Industries, Inc.
(Railroads)............................. 3,410 167,729
Liberty Financial Co. (Financial
(Diversified)).......................... 4,300 116,100
Lucent Technologies, Inc.
(Communications Equipment).............. 2,675 294,250
MCI WorldCom, Inc. (Telecommunications
(Long Distance))(b)..................... 5,690 408,258
McDonald's Corp. (Restaurants).......... 3,910 299,604
Medtronic, Inc. (Health Care (Medical
Products & Supplies))................... 4,305 319,646
Merck & Co., Inc. (Health Care
(Drugs-Major Pharmaceuticals)).......... 2,620 386,941
Microsoft Corp. (Computers (Software &
Services))(b)........................... 2,050 284,309
Oracle Corp. (Computers (Software &
Services))(b)........................... 2,785 120,103
Pfizer, Inc. (Health Care (Drugs-Major
Pharmaceuticals))....................... 3,115 390,738
Philip Morris Companies, Inc.
(Tobacco)............................... 4,500 240,750
Price (T. Rowe) Associates, Inc.
(Investment Management)................. 3,640 124,670
Scottish Annuity & Life Holdings Ltd.
(Insurance (Multi-Line))(b)............. 30,000 412,500
State Street Corp. (Banks (Major
Regional)).............................. 1,940 134,951
Tellabs, Inc. (Communications
Equipment)(b)........................... 2,500 171,406
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Phoenix-Engemann Global Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------
<S> <C> <C> <C>
UNITED STATES--CONTINUED
Texas Instruments, Inc. (Electronics
(Semiconductors))....................... 3,870 $ 331,127
Waddell & Reed Financial, Inc. Class A
(Financial (Diversified))............... 9,190 217,688
Walgreen Co. (Retail (Drug Stores))..... 1,895 110,976
Walt Disney Co. (The) (Entertainment)... 7,275 218,250
Wells Fargo & Co. (Banks (Major
Regional)).............................. 7,075 282,558
------------
10,414,564
------------
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $8,382,280) 10,414,564
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.4%
(IDENTIFIED COST $17,299,726) 22,074,986(a)
Cash and receivables, less liabilities--1.6% 389,186
-------------
NET ASSETS--100.0% $ 22,464,172
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $5,013,095 and gross
depreciation of $286,167 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$17,348,058.
(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 December 31,
1998, these securities amounted to a value of $7 or less than 1% of net
assets.
34 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Global Growth Fund
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF THE VALUE OF TOTAL INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Automobiles............................. 3.1%
Banks (Major Regional).................. 5.5
Banks (Money Center).................... 3.2
Beverages (Non-Alcoholic)............... 0.8
Chemicals............................... 1.2
Communications Equipment................ 11.6
Computers (Hardware).................... 0.8
Computers (Networking).................. 1.7
Computers (Peripherals)................. 1.2
Computers (Software & Services)......... 6.8
Electrical Equipment.................... 1.7
Electronics (Semiconductors)............ 3.7
Entertainment........................... 1.0
Financial (Diversified)................. 5.2
Foods................................... 1.1
Gaming, Lottery & Parimutuel
Companies............................... 0.6
Health Care (Diversified)............... 0.7
Health Care (Drugs-Major
Pharmaceuticals)........................ 8.3
Health Care (Medical Products &
Supplies)............................... 2.8
Household Products (Non-Durables)....... 1.0
Insurance (Life/Health)................. 1.6
Insurance (Multi-Line).................. 6.3
Investment Management................... 3.2
Lodging-Hotels.......................... 1.4
Manufacturing (Diversified)............. 1.2
Personal Care........................... 2.1
Professional Services................... 1.5
Publishing.............................. 2.5
Railroads............................... 0.8
Restaurants............................. 1.4
Retail (Building Supplies).............. 1.1
Retail (Drug Stores).................... 0.5
Retail (General Merchandise)............ 1.3
Services (Advertising/Marketing)........ 1.1
Services (Commercial & Consumer)........ 3.4
Services (Facilities & Environmental)... 1.9
Telecommunications
(Cellular/Wireless)..................... 3.7
Telecommunications (Long Distance)...... 1.9
Tobacco................................. 1.1
---------
100.0%
---------
---------
</TABLE>
See Notes to Financial Statements 35
<PAGE>
Phoenix-Engemann Global Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $17,299,726) $ 22,074,986
Receivables
Investment securities sold 826,380
Fund shares sold 41,915
Dividends and interest 19,539
-------------
Total assets 22,962,820
-------------
LIABILITIES
Payables
Custodian 359,212
Fund shares repurchased 67,493
Distribution fee 16,728
Investment advisory fee 12,952
Administration fee 11,775
Trustees' fee 5,823
Accrued expenses 24,665
-------------
Total liabilities 498,648
-------------
NET ASSETS $ 22,464,172
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 19,486,294
Accumulated net realized loss (1,798,408)
Net unrealized appreciation 4,776,286
-------------
NET ASSETS $ 22,464,172
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $13,452,636) 602,051
Net asset value per share $22.34
Offering price per share $22.34/(1-4.75%) $23.45
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,729,841) 215,634
Net asset value and offering price per share $21.93
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,281,695) 195,318
Net asset value and offering price per share $21.92
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 271,191
Interest 1,582
Foreign taxes withheld (21,640)
-------------
Total investment income 251,133
-------------
EXPENSES
Investment advisory fee 246,560
Distribution fee, Class A 34,832
Distribution fee, Class B 42,531
Distribution fee, Class C 41,424
Distribution fee, Class M 401
Administration 131,429
Professional 25,834
Trustees 12,923
-------------
Total expenses 535,934
Less expenses borne by investment adviser (38,757)
-------------
Net expenses 497,177
-------------
NET INVESTMENT LOSS (246,044)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (1,655,274)
Net realized gain on foreign currency transactions 6,574
Net change in unrealized appreciation (depreciation) on
investments 4,509,782
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions 1,017
-------------
NET GAIN ON INVESTMENTS 2,862,099
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,616,055
-------------
-------------
</TABLE>
36 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Global Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (246,044) $ (149,000)
Net realized gain (loss) (1,648,700) 760,000
Net change in unrealized appreciation
(depreciation) 4,510,799 203,000
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 2,616,055 814,000
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (120,705) (703,000)
Net realized gains, Class B (41,681) (217,000)
Net realized gains, Class C (36,810) (238,000)
In excess of accumulated net realized
gains, Class A (81,653) --
In excess of accumulated net realized
gains, Class B (28,196) --
In excess of accumulated net realized
gains, Class C (24,901) --
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (333,946) (1,158,000)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (243,697
and 391,000 shares, respectively) 5,188,236 8,211,000
Net asset value of shares issued from
reinvestment of distributions
(8,717 and 34,000 shares,
respectively) 190,194 653,000
Cost of shares repurchased (253,582
and 223,000 shares, respectively) (5,341,266) (4,567,000)
------------ ------------
Total 37,164 4,297,000
------------ ------------
CLASS B
Proceeds from sales of shares (82,048
and 138,000 shares, respectively) 1,741,279 2,861,000
Net asset value of shares issued from
reinvestment of distributions
(3,137 and 10,000 shares,
respectively) 67,204 199,000
Cost of shares repurchased (38,086 and
25,000 shares, respectively) (810,368) (492,000)
------------ ------------
Total 998,115 2,568,000
------------ ------------
CLASS C
Proceeds from sales of shares (47,457
and 180,000 shares, respectively) 1,013,490 3,790,000
Net asset value of shares issued from
reinvestment of distributions
(2,766 and 11,000 shares,
respectively) 59,214 200,000
Cost of shares repurchased (47,553 and
4,000 shares, respectively) (985,469) (84,000)
------------ ------------
Total 87,235 3,906,000
------------ ------------
CLASS M
Proceeds from sales of shares (5,050
and 0 shares, respectively) 100,100 --
Net asset value of shares issued from
reinvestment of distributions
(0 and 0 shares, respectively) -- --
Cost of shares repurchased (5,050 and
0 shares, respectively) (101,405) --
------------ ------------
Total (1,305) --
------------ ------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 1,121,209 10,771,000
------------ ------------
NET INCREASE IN NET ASSETS 3,403,318 10,427,000
NET ASSETS
Beginning of period 19,060,854 8,634,000
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 22,464,172 $ 19,061,000
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements 37
<PAGE>
Phoenix-Engemann Global Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 19.83 $ 19.06 $ 17.27 $ 14.06 $ 11.18
INCOME FROM INVESTMENT
OPERATIONS(6)
Net investment income (loss) (0.18)(1)(5) (0.19)(1)(2) 0.03(1)(3) 0.24(1)(3) 0.10(1)(3)
Net realized and unrealized
gain (loss) 3.02 2.29 3.55 3.11 2.78
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 2.84 2.10 3.58 3.35 2.88
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net
investment income -- -- (0.04) -- --
Dividends from net realized
gains (0.20) (1.33) (1.75) (0.14) --
In excess of accumulated net
realized gains (0.13) -- -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.33) (1.33) (1.79) (0.14) --
-------- -------- -------- -------- --------
Change in net asset value 2.51 0.77 1.79 3.21 2.88
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 22.34 $ 19.83 $ 19.06 $ 17.27 $ 14.06
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 14.35% 11.27%(2) 21.77%(3) 23.84%(3) 25.76%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $13,453 $11,964 $7,654 $3,203 $141
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.94% 2.0%(2) 0.8%(3) --%(3) --%(3)
Net investment income (loss) (0.81)% (0.9)%(2) 0.1%(3) 1.4%(3) 0.8%(3)
Portfolio turnover 95% 237.2% 220.3% 29.0% 479.3%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
Net asset value, beginning of
period $ 19.65 $ 19.04 $ 17.44(7)
INCOME FROM INVESTMENT
OPERATIONS(6)
Net investment income (loss) (0.34)(1)(5) (0.35)(1)(2) (0.08)(1)
Net realized and unrealized
gain (loss) 2.95 2.29 1.82
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.61 1.94 1.74
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net
investment income -- -- --
Dividends from net realized
gains (0.20) (1.33) (0.14)
In excess of accumulated net
realized gains (0.13) -- --
----- ----- -----
TOTAL DISTRIBUTIONS (0.33) (1.33) (0.14)
----- ----- -----
Change in net asset value 2.28 0.61 1.60
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 21.93 $ 19.65 $ 19.04
----- ----- -----
----- ----- -----
Total return(4) 13.31% 10.44%(2) 9.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $4,730 $3,312 $874
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 2.69% 2.8%(2) 2.7%(8)
Net investment income (loss) (1.59)% (1.7)%(2) (1.9)%(8)
Portfolio turnover 95% 237.2% 220.3%
</TABLE>
38 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 C
----------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
Net asset value,
beginning of period $ 19.65 $ 19.03 $ 17.88(7)
INCOME FROM INVESTMENT
OPERATIONS(6)
Net investment income
(loss) (0.33)(1)(5) (0.37)(1)(2) (0.04)(1)
Net realized and
unrealized gain
(loss) 2.93 2.32 1.34
----- ----- -----
TOTAL FROM
INVESTMENT
OPERATIONS 2.60 1.95 1.30
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net
investment income -- -- (0.01)
Dividends from net
realized gains (0.20) (1.33) (0.14)
In excess of
accumulated net
realized gains (0.13) -- --
----- ----- -----
TOTAL DISTRIBUTIONS (0.33) (1.33) (0.15)
----- ----- -----
Change in net asset value 2.27 0.62 1.15
----- ----- -----
NET ASSET VALUE, END OF
PERIOD $ 21.92 $ 19.65 $ 19.03
----- ----- -----
----- ----- -----
Total return(4) 13.26%(2) 10.50%(2) 7.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $4,282 $3,785 $106
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.69% 2.7%(2) 2.7%(8)
Net investment income
(loss) (1.57)% (1.8)%(2) (1.6)%(8)
Portfolio turnover 95% 237.2% 220.3%
</TABLE>
The table above provides condensed information concerning income and
capital changes for one share of the Phoenix-Engemann Global 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 and $2,784 for the periods ended December 31, 1996, 1995 and 1994,
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 and ratios of expenses and net investment income
(loss) to average net assets would have been $(.21), 21.71% and 2.0%,
respectively, $(.15), 22.88% and 2.3%, respectively, and $(.21), 14.40% and
10.4% (2.3% if only normal and recurring expenses are taken into account),
respectively, and $(.03), 11.40% and 2.3%, 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 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) have not been annualized.
(5) Includes reimbursement of operating expenses by investment adviser of
$0.04.
(6) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
(7) 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
21, 1996, respectively.
(8) Annualized.
See Notes to Financial Statements 39
<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
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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: DESCRIBE HOW THE FUND HELD UP DURING LAST YEAR'S UP AND DOWN MOVES.
A: Last year felt like several years rolled into one. During the first half, the
Fund was up as much as 18% year to date, which alone would have been a nice
year. Then, during the late summer and early fall, the Fund experienced a
decline of over 40% from its spring peak. At that point, small- and mid-cap
stocks were well into bear market territory by any definition. The fund hit
bottom on October 8, but performed very well from that point through the end of
the year, with a return of more than 60% compared to a 36% gain for the Russell
2000 Index(1).
For the full year, the NAV for the Fund's Class A Shares increased 14.3%, ahead
of the 12.2% return of the average mid-cap fund measured by Lipper Inc. and far
surpassing the negative (2.5)% return of the Russell 2000. Class B shares
returned 13.4% and Class C shares returned 13.3%. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges.
Q: HOW DO YOU MANAGE THE FUND THROUGH SUCH WIDE SWINGS IN THE MARKET? DO YOU
EVER SHIFT YOUR STRATEGY?
A: Last year is a great illustration of the perils of market timing. We feel it
would have been difficult to predict any of the major moves last year, much less
all three. That's why, when valuations are fluctuating, we fall back on what we
know best: company fundamentals. When the market declined last fall, the
sentiment was we were headed for a recession. So we quickly reassessed our
companies' ability to grow and finance growth in slower economic times. We then
sold some companies we had doubts about and increased our weightings in our
higher-confidence companies.
Q: HOW ABOUT AN EXAMPLE?
A: One of our favorite ideas for some time has been U.S. Rentals. Midway through
last year, the company combined with its largest competitor, United Rentals,
creating the clear industry leader in equipment rental. When the market ran into
trouble last fall, investors raised concerns that the company would no longer
have access to the capital needed to finance its growth. However, discussions
with the company convinced us they were already generating enough operating cash
flow to fund at least 15% internal growth. Having reaffirmed our belief in the
company's ability to grow, we increased our position at what proved to be a very
depressed price.
Q: DISCUSS YOUR OUTLOOK FOR SMALL- AND MID-CAP STOCKS.
A: Our outlook for small- and mid-cap companies remains positive. Last year we
talked about our view that small- and mid-caps were historically cheap relative
to large-caps, and 1998 only served to widen the disparity. Additionally, we
believe the current economic environment remains favorable to small- and mid-cap
companies. We believe if we select companies with good fundamentals, we will be
well positioned for any rally that small- and mid-cap stocks may experience.
JANUARY 29, 1999
(1) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE OF SMALL-CAPITALIZATION STOCKS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
40
<PAGE>
Phoenix-Engemann Small- & Mid-Cap Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 12/31/98 DATE
------ ----------- -----------
<S> <C> <C> <C>
Class A Shares at NAV(2) 14.29% 33.01% 10/10/94
Class A Shares at POP(3) 8.87 31.53 10/10/94
Class B Shares at NAV(2) 13.39 23.03 9/18/96
Class B Shares with CDSC(4) 9.54 22.06 9/18/96
Class C Shares at NAV(2) 13.34 18.74 10/8/96
Class C Shares with CDSC(4) 13.34 18.74 10/8/96
Russell 2000 Index(7) (2.55) Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%
(4) CDSC (Contingent Deferred Sales Charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 14.35% for Class A (since 10/10/94), 11.14% for Class
B (since 9/18/96) and 10.53% for Class C (since 10/8/96).
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The Russell 2000 Index is an unmanaged, commonly used measure of total
return performance of small-capitalization stocks. The Index's performance
does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN
SMALL & MID CAP
GROWTH FUND RUSSELL
CLASS A(6) 2000 INDEX(7)
<C> <S>
10/10/1994 $9,525.00 $10,000.00
12/30/1994 $11,495.24 $9,876.93
12/29/1995 $14,446.93 $12,685.82
12/31/1996 $22,012.06 $14,778.26
12/31/1997 $27,826.17 $18,082.85
12/31/1998 $31,802.95 $17,622.33
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
10/10/94 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Consumer Cyclicals 32%
Technology 21
Health-Care 11
Financials 10
Consumer Staples 6
Energy 5
Capital Goods 3
Other 12
</TABLE>
41
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. United Rentals (North America), Inc. 4.7%
SELLS AND RENTS TOOLS, CONSTRUCTION EQUIPMENT AND SPECIAL
EVENT EQUIPMENT
2. Pinnacle Oil International, Inc. 4.2%
OIL EXPLORATION TECHNOLOGY COMPANY
3. International Speedway Corp. Class A 4.2%
CONDUCTS MOTOR SPORT RACEWAY ACTIVITIES AND SYNDICATED
RADIO BROADCASTS
4. Bed, Bath & Beyond, Inc. 4.1%
SELLS DOMESTIC MERCHANDISE AND HOME FURNISHINGS
5. 99 Cents Only Stores 3.0%
GENERAL MERCHANDISE RETAILER
6. Restoration Hardware, Inc. 3.0%
SPECIALTY RETAILER OF HOME FURNISHINGS AND
FUNCTIONAL AND DECORATIVE HARDWARE
7. Action Performance Companies, Inc. 2.9%
DISTRIBUTOR OF MOTOR SPORT COLLECTIBLES
8. Whole Foods Market, Inc. 2.9%
NATURAL FOODS RETAILER
9. MSC Industrial Direct Co., Inc. Class A 2.7%
DIRECT MARKETS A BROAD RANGE OF INDUSTRIAL PRODUCTS
10. CKE Restaurants, Inc. 2.5%
OPERATES, FRANCHISES AND LICENSES QUICK-SERVICE RESTAURANTS
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
COMMON STOCKS--97.1%
BIOTECHNOLOGY--3.0%
Coulter Pharmaceutical, Inc.(b)......... 30,000 $ 900,000
Incyte Pharmaceuticals, Inc.(b)......... 16,250 607,344
Inhale Therapeutic Systems(b)........... 30,000 990,000
Texas Biotechnology Corp.(b)............ 100,000 493,750
------------
2,991,094
------------
COMPUTERS (NETWORKING)--0.8%
Xylan Corp.(b).......................... 46,000 807,875
COMPUTERS (SOFTWARE & SERVICES)--12.2%
Aspect Development, Inc.(b)............. 50,000 2,215,625
i2 Technologies, Inc.(b)................ 30,000 911,250
Inktomi Corp.(b)........................ 6,600 853,875
Legato Systems, Inc.(b)................. 30,000 1,978,125
Peregrine Systems, Inc.(b).............. 25,000 1,159,375
Rational Software Corp.(b).............. 40,000 1,060,000
Sapient Corp.(b)........................ 7,000 392,000
Software AG Systems, Inc.(b)............ 85,000 1,540,625
VeriSign, Inc.(b)....................... 20,000 1,182,500
Walker Interactive Systems, Inc.(b)..... 150,000 1,012,500
------------
12,305,875
------------
CONSUMER FINANCE--2.5%
Metris Companies, Inc................... 50,000 2,515,625
ELECTRONICS (INSTRUMENTATION)--3.7%
Flextronics International Ltd.(b)....... 15,000 1,284,375
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION)--CONTINUED
Micrel, Inc.(b)......................... 45,000 $ 2,475,000
------------
3,759,375
------------
ELECTRONICS (SEMICONDUCTORS)--4.0%
Applied Micro Circuits Corp.(b)......... 51,800 1,759,581
Vitesse Semiconductor Corp.(b).......... 50,000 2,281,250
------------
4,040,831
------------
FINANCIAL (DIVERSIFIED)--2.5%
American Capital Strategies Ltd......... 50,000 862,500
Federal Agricultural Mortgage Corp.
Class C(b).............................. 21,000 779,625
HealthCare Financial Partners,
Inc.(b)................................. 22,500 897,187
------------
2,539,312
------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.9%
PharmaPrint, Inc.(b).................... 70,000 918,750
HEALTH CARE (HOSPITAL MANAGEMENT)--2.9%
Curative Health Services, Inc.(b)....... 50,000 1,675,000
Health Management Associates, Inc. Class
A(b).................................... 56,500 1,221,812
------------
2,896,812
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.2%
Schein (Henry), Inc.(b)................. 50,000 2,237,500
HEALTH CARE (SPECIALIZED SERVICES)--2.3%
ALZA Corp.(b)........................... 30,000 1,567,500
</TABLE>
42 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
HEALTH CARE (SPECIALIZED SERVICES)--CONTINUED
PAREXEL International Corp.(b).......... 30,000 $ 750,000
------------
2,317,500
------------
INSURANCE (MULTI-LINE)--3.1%
Annuity and Life Re (Holdings) Ltd...... 56,250 1,518,750
Scottish Annuity & Life Holdings
Ltd.(b)................................. 119,000 1,636,250
------------
3,155,000
------------
INVESTMENT BANKING/BROKERAGE--0.8%
Donaldson, Lufkin & Jenrette, Inc....... 20,000 820,000
LEISURE TIME (PRODUCTS)--7.1%
Action Performance Companies, Inc.(b)... 83,000 2,936,125
International Speedway Corp. Class A.... 105,000 4,252,500
------------
7,188,625
------------
OIL & GAS (EXPLORATION & PRODUCTION)--4.2%
Pinnacle Oil International, Inc.(b)..... 224,500 4,265,500
RAILROADS--1.8%
Kansas City Southern Industries, Inc.... 38,000 1,869,125
RESTAURANTS--4.9%
CKE Restaurants, Inc.................... 86,900 2,558,119
Cheesecake Factory, Inc. (The)(b)....... 80,000 2,372,500
------------
4,930,619
------------
RETAIL (COMPUTERS & ELECTRONICS)--1.3%
CDW Computer Centers, Inc.(b)........... 13,800 1,323,937
RETAIL (FOOD CHAINS)--2.9%
Whole Foods Market, Inc.(b)............. 60,000 2,902,500
RETAIL (GENERAL MERCHANDISE)--10.5%
99 Cents Only Stores(b)................. 62,500 3,070,312
Bed, Bath & Beyond, Inc.(b)............. 122,000 4,163,250
Cost Plus, Inc.(b)...................... 67,900 2,130,363
Lands' End, Inc.(b)..................... 18,500 498,344
Smart & Final, Inc...................... 75,000 721,875
------------
10,584,144
------------
RETAIL (SPECIALTY)--10.7%
Claire's Stores, Inc.................... 100,000 2,050,000
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
RETAIL (SPECIALTY)--CONTINUED
Lithia Motors, Inc. Class A(b).......... 55,000 $ 907,500
MSC Industrial Direct Co., Inc. Class
A(b).................................... 120,000 2,715,000
Restoration Hardware, Inc.(b)........... 113,000 3,036,875
Sonic Automotive, Inc.(b)............... 45,000 1,549,688
United Auto Group, Inc.(b).............. 55,000 505,313
------------
10,764,376
------------
SAVINGS & LOAN COMPANIES--0.6%
Staten Island Bancorp, Inc.............. 30,000 598,125
SERVICES (ADVERTISING/MARKETING)--1.6%
Abacus Direct Corp.(b).................. 35,000 1,592,500
SERVICES (COMMERCIAL & CONSUMER)--7.1%
Budget Group, Inc. Class A(b)........... 80,400 1,276,350
MAXIMUS, Inc.(b)........................ 30,000 1,110,000
United Rentals (North America),
Inc.(b)................................. 144,000 4,770,000
------------
7,156,350
------------
SERVICES (DATA PROCESSING)--2.4%
NCO Group, Inc.(b)...................... 53,000 2,385,000
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.1%
WinStar Communications, Inc.(b)......... 28,000 1,092,000
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $74,530,617) 97,958,350
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--1.0%
OIL & GAS (EXPLORATION & PRODUCTION)--1.0%
Encal Energy Ltd. (Canada)(b)........... 270,200 1,002,734
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $987,612) 1,002,734
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.1%
(IDENTIFIED COST $75,518,229) 98,961,084(a)
Cash and receivables, less liabilities--1.9% 1,879,463
--------------
NET ASSETS--100.0% $ 100,840,547
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $25,127,406 and gross
depreciation of $2,161,509 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$75,995,187.
(b) Non-income producing.
See Notes to Financial Statements 43
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $75,518,229) $ 98,961,084
Cash 2,051,179
Receivables
Fund shares sold 646,150
Dividends and interest 17,016
-------------
Total assets 101,675,429
-------------
LIABILITIES
Payables
Investment securities purchased 473,434
Fund shares repurchased 94,465
Distribution fee 122,081
Investment advisory fee 69,667
Administration fee 42,614
Trustees' fee 6,812
Accrued expenses 25,809
-------------
Total liabilities 834,882
-------------
NET ASSETS $ 100,840,547
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest 88,412,046
Accumulated net realized loss (11,014,354)
Net unrealized appreciation 23,442,855
-------------
NET ASSETS $ 100,840,547
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $54,186,652) 2,250,328
Net asset value per share $24.08
Offering price per share $24.08/(1-4.75%) $25.28
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $31,631,170) 1,337,864
Net asset value and offering price per share $23.64
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $15,022,725) 635,861
Net asset value and offering price per share $23.63
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 141,693
Interest 160,603
-------------
Total investment income 302,296
-------------
EXPENSES
Investment advisory fee 740,594
Distribution fee, Class A 102,801
Distribution fee, Class B 236,341
Distribution fee, Class C 118,976
Distribution fee, Class M 426
Administration 433,926
Professional 27,083
Trustees 14,648
-------------
Total expenses 1,674,795
Less expenses borne by investment adviser (41,731)
-------------
Net expenses 1,633,064
-------------
NET INVESTMENT LOSS (1,330,768)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (10,304,077)
Net realized gain on foreign currency transactions 375
Net change in unrealized appreciation (depreciation) on
investments 22,375,638
-------------
NET GAIN ON INVESTMENTS 12,071,936
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 10,741,168
-------------
-------------
</TABLE>
44 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------- ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (1,330,768) $ (498,000)
Net realized gain (loss) (10,303,702) 4,530,000
Net change in unrealized appreciation
(depreciation) 22,375,638 698,000
------------- ------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 10,741,168 4,730,000
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
In excess of accumulated net realized
gains, Class A (48,557) (2,443,000)
In excess of accumulated net realized
gains, Class B (28,857) (1,543,000)
In excess of accumulated net realized
gains, Class C (13,819) (718,000)
------------- ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (91,233) (4,704,000)
------------- ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,832,747 and 1,013,000 shares,
respectively) 39,721,245 21,556,000
Net asset value of shares issued from
reinvestment of distributions
(2,097 and 115,000 shares,
respectively) 46,145 2,307,000
Cost of shares repurchased (901,103
and 239,000 shares, respectively) (19,287,058) (4,740,000)
------------- ------------
Total 20,480,332 19,123,000
------------- ------------
CLASS B
Proceeds from sales of shares (776,437
and 706,000 shares, respectively) 16,692,888 15,726,000
Net asset value of shares issued from
reinvestment of distributions
(1,267 and 67,000 shares,
respectively) 27,357 1,327,000
Cost of shares repurchased (268,731
and 25,000 shares, respectively) (5,454,844) (514,000)
------------- ------------
Total 11,265,401 16,539,000
------------- ------------
CLASS C
Proceeds from sales of shares (389,879
and 364,000 shares, respectively) 8,174,670 7,688,000
Net asset value of shares issued from
reinvestment of distributions
(580 and 33,000 shares,
respectively) 12,526 659,000
Cost of shares repurchased (141,833
and 13,000 shares, respectively) (2,899,692) (279,000)
------------- ------------
Total 5,287,504 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 (5,260 and
0 shares, respectively) (102,183) --
------------- ------------
Total 8,353 --
------------- ------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 37,041,590 43,730,000
------------- ------------
NET INCREASE IN NET ASSETS 47,691,525 43,756,000
NET ASSETS
Beginning of period 53,149,022 9,393,000
------------- ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF
$0 AND $0, RESPECTIVELY] $ 100,840,547 $ 53,149,000
------------- ------------
------------- ------------
</TABLE>
See Notes to Financial Statements 45
<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
YEAR ENDED DECEMBER 31 10/10/94
-------------------------------------------------------- THROUGH
1998 1997 1996 1995 12/31/94
<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) (0.30)(1)(7) (0.31)(1)(2) (0.12)(1)(3) 0.22(1)(3) 0.07(1)(3)
Net realized and unrealized
gain (loss) 3.31 5.07 7.45 2.87 2.00
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 3.01 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) --
In excess of accumulated net
realized gains (0.02) -- -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.02) (2.06) (3.84) (0.26) --
-------- -------- -------- -------- --------
Change in net asset value 2.99 2.70 3.49 2.83 2.07
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 24.08 $ 21.09 $ 18.39 $ 14.90 $ 12.07
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return(4) 14.29% 26.41%(2) 52.37%(3) 25.68%(3) 20.70%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $54,187 $27,771 $7,859 $1,742 $121
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.78% 1.80%(2) 1.10%(3) --%(3) --%(5)
Net investment income (loss) (1.39)% (1.40)%(2) (0.70)%(3) 1.50%(3) 2.60%(5)
Portfolio turnover 147% 313.5% 297.1% 121.4% 157.9%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------
1998 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) (0.45)(1)(7) (0.46)(1)(2) (0.32)(1)
Net realized and unrealized
gain (loss) 3.24 5.04 2.43
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.79 4.58 2.11
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net
investment income -- -- --
Dividends from net realized
gains -- (2.06) (0.20)
In excess of accumulated net
realized gains (0.02) -- --
----- ----- -----
TOTAL DISTRIBUTIONS (0.02) (2.06) (0.20)
----- ----- -----
Change in net asset value 2.77 2.52 1.91
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 23.64 $ 20.87 $ 18.35
----- ----- -----
----- ----- -----
Total return(4) 13.39% 25.49%(2) 12.84%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $31,631 $17,298 $1,480
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 2.53% 2.60%(2) 2.60%(5)
Net investment income (loss) (2.14)% (2.10)%(2) (2.20)%(5)
Portfolio turnover 147% 313.5% 297.1%
</TABLE>
46 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 C
----------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
Net asset value, beginning of
period $ 20.87 $ 18.35 $ 17.99(6)
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) (0.45)(1)(7) (0.47)(1)(2) (0.29)(1)
Net realized and unrealized
gain (loss) 3.23 5.05 0.85
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 2.78 4.58 0.56
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net
investment income -- -- --
Dividends from net realized
gains -- (2.06) (0.20)
In excess of accumulated net
realized gains (0.02) -- --
----- ----- -----
TOTAL DISTRIBUTIONS (0.02) (2.06) (0.20)
----- ----- -----
Change in net asset value 2.76 2.52 0.36
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 23.63 $ 20.87 $ 18.35
----- ----- -----
----- ----- -----
Total return(4) 13.34% 25.49%(2) 3.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $15,023 $8,080 $54
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 2.53% 2.60%(2) 2.60%(5)
Net investment income (loss) (2.14)% (2.10)%(2) (2.20)%(5)
Portfolio turnover 147% 313.5% 297.1%
</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, and (1.4)%, (2.1)% and (2.1)%, respectively.
(3) These amounts reflect the impact of a waiver of Manager fees of $18,499,
$13,443, 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) Includes reimbursement of operating expenses by investment adviser of
$0.01.
See Notes to Financial Statements 47
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
A DISCUSSION WITH JIM MAIR AND JOHN TILSON, THE PORTFOLIO MANAGERS OF THE
PHOENIX-ENGEMANN MUTUAL FUNDS
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: 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.
Q: HOW DID THE FUND PERFORM DURING THE YEAR ENDED DECEMBER 31, 1998?
A: The Phoenix-Engemann Value 25 Fund's NAV for Class A Shares increased 7.2%
compared with a return of 28.8% for the S&P 500 Index(1) and 15.6% for the
Russell 1000 Value Index(2) and 10.9% for the average equity income fund
measured by Lipper Inc. Class B and C shares returned 6.4%. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Q: CAN YOU OUTLINE WHAT THE GOALS OF THE VALUE 25 ARE AND COMMENT ON HOW YOU
FARED AGAINST THEM?
A: The Value 25 was developed with the following goals in mind: Provide
diversification versus our traditional growth funds; give investors an
opportunity to invest in a contrarian fund; and maximize performance within
those guidelines set out by the Fund's quantitative model.
While we were disappointed with this year's results, we realize that Value
25 will not perform as well as our other funds when growth is in favor. Whereas
our traditional growth funds are focused in growth industries, such as consumer
staples, health-care and technology, Value 25 is invested in cyclical
industries, such as basic materials, automotive and energy. These industries are
cyclical and tend to perform better when the economy is accelerating. Thus, the
Fund's performance "zigged" while our other growth products "zagged." To this
end, the Fund performed in line with our expectations.
Q: WHY WERE CYCLICAL STOCKS OUT OF FAVOR THIS YEAR?
A: U.S. cyclical stocks are affected not only by the rate of change in the
economy but also by developments in international markets. U.S. economic growth
actually decelerated a bit in 1998, which was part of the reason cyclicals did
not work in 1998. More importantly though, the economic turmoil overseas
weakened foreign currencies, which in turn made imported commodities much
cheaper than U.S. based commodities. Basic material producers such as U.S. Steel
were forced to accept lower prices for goods produced, which hurt their bottom
line.
Q: WHAT IS YOUR OUTLOOK FOR THE VALUE 25 IN 1999?
A: At this time last year, we stated that we felt the cyclical industries the
Fund invests in were at low valuation levels and that any improvement in these
sectors would be reflected in higher prices for the stocks in the Fund. Although
there was little improvement in these sectors in 1998, we believe this statement
still holds true for 1999. The low valuations and high dividend yields of the
stocks should provide somewhat of a cushion in down markets. In addition, we
feel the Fund's discipline of investing in sound companies with safe dividend
policies provides an additional layer of support. We continue to recommend Value
25 to investors who are looking for diversification versus our traditional
growth funds.
JANUARY 29, 1999
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE.
(2) THE RUSSELL 1000 VALUE INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE OF LARGE-CAP, VALUE-ORIENTED STOCKS.
48
<PAGE>
Phoenix-Engemann Value 25 Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIOD ENDING 12/31/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 12/31/98 DATE
------ ----------- -----------
<S> <C> <C> <C>
Class A Shares at NAV(2) 7.23% 14.29% 12/17/96
Class A Shares at POP(3) 2.11 11.59 12/17/96
Class B Shares at NAV(2) 6.41 12.86 1/9/97
Class B Shares with CDSC(4) 2.57 9.87 1/9/97
Class C Shares at NAV(2) 6.42 12.88 1/9/97
Class C Shares with CDSC(4) 6.42 12.88 1/9/97
S&P 500 Index(7) 28.76 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (Contingent Deferred Sales Charge) is appled 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.
(5) Index performance is 31.72% for Class A (since 12/17/96) and 30.23% for
Class B and Class C (since 1/9/97).
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN S&P
VALUE 25 FUND 500
CLASS A(6) INDEX(7)
<C> <S>
12/17/1996 $9,525.00 $10,000.00
12/31/1996 $9,723.81 $10,209.85
12/31/1997 $11,660.43 $13,617.45
12/31/1998 $12,503.06 $17,533.35
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/17/96 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/98
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Goods 33%
Consumer Cyclicals 25
Basic Materials 25
Energy 7
Technology 6
Other 4
</TABLE>
49
<PAGE>
Phoenix-Engemann Value 25 Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Tektronix, Inc. 5.9%
MANUFACTURERS ELECTRONIC TEST INSTRUMENTS
2. Brunswick Corp. 5.4%
LEADING LEISURE EQUIPMENT COMPANY
3. SPX Corp. 4.8%
PROVIDES SERVICE TOOLS TO MOTOR VEHICLE INDUSTRY
4. General Motors Corp. 4.6%
MANUFACTURES AND SELLS AUTOMOBILES AND TRUCKS
5. Timken Co. (The) 4.4%
MANUFACTURES BEARINGS AND SPECIALTY STEELS
6. Ford Motor Co. 4.4%
MANUFACTURES AND SELLS AUTOMOBILES, TRUCKS AND RELATED PARTS
GLOBALLY
7. National Service Industries, Inc. 4.2%
DIVERSIFIED SERVICE AND MANUFACTURING COMPANY
8. Cooper Industries, Inc. 4.1%
MANUFACTURES AND SELLS ELECTRICAL PRODUCTS
9. Cummins Engine Co., Inc. 4.1%
MANUFACTURES DIESEL ENGINES
10. Crown Cork & Seal Co., Inc. 4.1%
MANUFACTURES PACKAGING PRODUCTS
</TABLE>
INVESTMENTS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
COMMON STOCKS--96.5%
AUTO PARTS & EQUIPMENT--3.8%
Dana Corp............................... 33,700 $ 1,377,487
AUTOMOBILES--9.0%
Ford Motor Co........................... 26,700 1,566,956
General Motors Corp..................... 22,900 1,638,781
------------
3,205,737
------------
BUILDING MATERIALS--4.0%
Armstrong World Industries, Inc......... 23,500 1,417,344
CHEMICALS--6.9%
Dow Chemical Co. (The).................. 14,700 1,336,781
Eastman Chemical Co..................... 24,900 1,114,275
------------
2,451,056
------------
CHEMICALS (SPECIALTY)--6.9%
Hercules, Inc........................... 41,800 1,144,275
Nalco Chemical Co....................... 42,600 1,320,600
------------
2,464,875
------------
CONTAINERS (METAL & GLASS)--4.0%
Crown Cork & Seal Co., Inc.............. 47,000 1,448,187
ELECTRONICS (INSTRUMENTATION)--5.9%
Tektronix, Inc.......................... 70,300 2,113,394
IRON & STEEL--7.3%
Allegheny Teledyne, Inc................. 68,400 1,397,925
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
IRON & STEEL--CONTINUED
USX-U. S. Steel Group................... 52,700 $ 1,212,100
------------
2,610,025
------------
LEISURE TIME (PRODUCTS)--5.4%
Brunswick Corp.......................... 77,300 1,913,175
MACHINERY (DIVERSIFIED)--17.2%
Cooper Industries, Inc.................. 30,800 1,468,775
Milacron, Inc........................... 71,200 1,370,600
SPX Corp.(b)............................ 25,814 1,729,538
Timken Co. (The)........................ 83,100 1,568,512
------------
6,137,425
------------
MANUFACTURING (DIVERSIFIED)--7.8%
Aeroquip-Vickers, Inc................... 42,900 1,284,319
National Service Industries, Inc........ 39,400 1,497,200
------------
2,781,519
------------
METALS MINING--3.4%
Phelps Dodge Corp....................... 24,100 1,226,088
OIL & GAS (REFINING & MARKETING)--4.0%
Sunoco, Inc............................. 39,300 1,417,256
OIL (DOMESTIC INTEGRATED)--3.3%
Phillips Petroleum Co................... 27,900 1,189,238
TRUCKS & PARTS--7.6%
Cummins Engine Co., Inc................. 40,800 1,448,400
</TABLE>
50 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Value 25 Fund
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
TRUCKS & PARTS--CONTINUED
PACCAR, Inc............................. 30,500 $ 1,254,313
------------
2,702,713
------------
- ---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $34,103,063) 34,455,519
- ---------------------------------------------------------------------------
FOREIGN COMMON STOCKS--2.4%
AUTOMOBILES--2.4%
DaimlerChrysler AG (Germany)(b)......... 9,100 874,169
- ---------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $450,281) 874,169
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS --98.9%
(IDENTIFIED COST $34,553,344) 35,329,688(a)
Cash and receivables, less liabilities--1.1% 382,768
-------------
NET ASSETS--100.0% $ 35,712,456
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,603,224 and gross
depreciation of $3,896,645 for federal income tax purposes. At December 31,
1998, the aggregate cost of securities for federal income tax purposes was
$34,623,109.
(b) Non-income producing.
See Notes to Financial Statements 51
<PAGE>
Phoenix-Engemann Value 25 Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $34,553,344) $ 35,329,688
Cash 394,657
Receivables
Dividends and interest 83,602
Fund shares sold 37,869
-------------
Total assets 35,845,816
-------------
LIABILITIES
Payables
Fund shares repurchased 6,187
Distribution fee 54,643
Investment advisory fee 23,536
Administration fee 18,049
Trustees' fee 7,247
Accrued expenses 23,698
-------------
Total liabilities 133,360
-------------
NET ASSETS $ 35,712,456
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 34,541,729
Undistributed net investment income 30,470
Accumulated net realized gain 363,913
Net unrealized appreciation 776,344
-------------
NET ASSETS $ 35,712,456
-------------
-------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,089,672) 1,554,189
Net asset value per share $11.64
Offering price per share $11.64/(1-4.75%) $12.22
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $10,980,753) 947,391
Net asset value and offering price per share $11.59
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $6,642,031) 573,565
Net asset value and offering price per share $11.58
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 1,092,130
Interest 11,183
-------------
Total investment income 1,103,313
-------------
EXPENSES
Investment advisory fee 329,629
Distribution fee, Class A 48,719
Distribution fee, Class B 105,179
Distribution fee, Class C 65,250
Distribution fee, Class M 500
Administration 219,418
Professional 24,871
Trustees 14,668
-------------
Total expenses 808,234
Less expenses borne by investment adviser (39,539)
-------------
Net expenses 768,695
-------------
NET INVESTMENT INCOME 334,618
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 2,097,474
Net change in unrealized appreciation (depreciation) on
investments (352,262)
-------------
NET GAIN ON INVESTMENTS 1,745,212
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,079,830
-------------
-------------
</TABLE>
52 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Value 25 Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended
12/31/97
Year Ended (Rounded to
12/31/98 thousands)
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 334,618 $ 231,000
Net realized gain (loss) 2,097,474 1,504,000
Net change in unrealized appreciation
(depreciation) (352,262) 1,133,000
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 2,079,830 2,868,000
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (211,860) (171,000)
Net investment income, Class B (57,698) (37,000)
Net investment income, Class C (35,805) (22,000)
Net investment income, Class M (335) --
Net realized gains, Class A (869,860) (878,000)
Net realized gains, Class B (538,067) (403,000)
Net realized gains, Class C (327,380) (221,000)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (2,041,005) (1,732,000)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (447,148
and 1,831,000 shares, respectively) 5,386,173 20,131,000
Net asset value of shares issued from
reinvestment of distributions
(92,048 and 86,000 shares,
respectively) 1,040,977 977,000
Cost of shares repurchased (673,296
and 277,000 shares, respectively) (7,993,719) (3,121,000)
------------ ------------
Total (1,566,569) 17,987,000
------------ ------------
CLASS B
Proceeds from sales of shares (297,032
and 770,000 shares, respectively) 3,568,146 8,726,000
Net asset value of shares issued from
reinvestment of distributions
(39,114 and 23,000 shares,
respectively) 439,118 260,000
Cost of shares repurchased (151,755
and 30,000 shares, respectively) (1,790,599) (357,000)
------------ ------------
Total 2,216,665 8,629,000
------------ ------------
CLASS C
Proceeds from sales of shares (249,615
and 421,000 shares, respectively) 2,992,809 4,940,000
Net asset value of shares issued from
reinvestment of distributions
(30,269 and 17,000 shares,
respectively) 339,363 197,000
Cost of shares repurchased (130,943
and 13,000 shares, respectively) (1,510,855) (162,000)
------------ ------------
Total 1,821,317 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 (20,954 and
0 shares, respectively) (263,766) --
------------ ------------
Total (7,140) --
------------ ------------
INCREASE IN NET ASSETS FROM SHARE
TRANSACTIONS 2,464,273 31,591,000
------------ ------------
NET INCREASE IN NET ASSETS 2,503,098 32,727,000
NET ASSETS
Beginning of period 33,209,358 482,000
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME OF $30,470 AND
$1,038, RESPECTIVELY] $ 35,712,456 $ 33,209,000
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements 53
<PAGE>
Phoenix-Engemann Value 25 Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------------------------- --------------------------------
YEAR ENDED DECEMBER 31, INCEPTION YEAR ENDED DECEMBER 31,
-------------------------------- 12/17/96 TO --------------------------------
1998 1997 12/31/96 1998 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) 0.15(1)(6) 0.17(1)(2) --(1) 0.06(1)(6) 0.08(1)(2)
Net realized and
unrealized gain
(loss) 0.66 1.95 0.11 0.65 1.67
------ ------ ------ ------ ------
TOTAL FROM
INVESTMENT
OPERATIONS 0.81 2.12 0.11 0.71 1.75
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.14) (0.12) -- (0.06) (0.06)
Dividends from net
realized gains (0.59) (0.55) -- (0.59) (0.55)
------ ------ ------ ------ ------
TOTAL
DISTRIBUTIONS (0.73) (0.67) -- (0.65) (0.61)
------ ------ ------ ------ ------
Change in net asset
value 0.08 1.45 0.11 0.06 1.14
------ ------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $ 11.64 $ 11.56 $ 10.11 $ 11.59 $ 11.53
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return(3) 7.23% 21.10%(2) 1.10% 6.41% 16.97%(2)
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands) $18,090 $19,518 $482 $10,981 $8,799
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 1.75% 1.80%(2) 1.70%(4) 2.50% 2.60%(4)
Net investment
income (loss) 1.25% 1.40%(2) 1.80%(4) 0.54% 0.70%(4)
Portfolio turnover 135% 87.7% --% 135% 87.7%
<CAPTION>
CLASS C
--------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997
<S> <C><C> <C>
Net asset value,
beginning of period $ 11.52 $ 10.39(5)
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income (loss) 0.06(1)(6) 0.09(1)(2)
Net realized and
unrealized gain
(loss) 0.65 1.66
----- -----
TOTAL FROM
INVESTMENT
OPERATIONS 0.71 1.75
----- -----
LESS DISTRIBUTIONS
Dividends from net
investment income (0.06) (0.07)
Dividends from net
realized gains (0.59) (0.55)
----- -----
TOTAL
DISTRIBUTIONS (0.65) (0.62)
----- -----
Change in net asset
value 0.06 1.13
----- -----
NET ASSET VALUE, END
OF PERIOD $ 11.58 $ 11.52
----- -----
----- -----
Total return(3) 6.42% 17.01%(2)
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (thousands) $6,642 $4,893
RATIO TO AVERAGE NET
ASSETS OF:
Operating expenses 2.50% 2.60%(4)
Net investment
income (loss) 0.52% 0.80%(4)
Portfolio turnover 135% 87.7%
</TABLE>
The table above provides condensed information concerning income and
capital changes for one share of the Phoenix-Engemann Value 25 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 1.4%, 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 period from inception (December 17, 1996) through 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) Includes reimbursement of operating expenses by investment adviser of
$0.01.
54 See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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: 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 and Phoenix-Engemann
Value 25 Fund, collectively referred to as the "Funds," are series of The
Phoenix-Engemann Funds. 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 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 and Class C shares. Class M shares have been
closed. 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. 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. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers and various relationships between securities
in determining value. Short-term investments having a remaining maturity of 60
days or less are valued at amortized cost which approximates market. All other
securities and assets are valued at 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. 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.
The Trust does not amortize premiums but does amortize discounts.
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
55
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 (CONTINUED)
portfolio transaction is treated as a gain or loss on foreign currency.
Likewise, the gain or loss resulting from a change in currency exchange rates
between the date income is accrued and paid is treated as a gain or loss on
foreign currency. The 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.
F. FORWARD CURRENCY CONTRACTS:
The Global Growth Fund, the Small & Mid-Cap Growth Fund and the Value 25 Fund
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 Fund 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. The Global Growth Fund, the Small &
Mid-Cap Growth Fund and the Value 25 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 daily 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 hedged
instruments.
H. OPTIONS:
The Global Growth Fund and the Small & Mid-Cap Growth 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. To a
limited extent, the Value 25 Fund may buy and sell options on domestic and
foreign securities indices for hedging purposes.
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 hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist 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.
J. LOAN AGREEMENTS:
The Funds may invest in direct debt instruments which are invested 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 principal, interest and any fees to
which it is entitled only from the lender selling the loan agreement and only
upon receipt by the lender of payments from the borrower. The Funds generally
have 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
56
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 (CONTINUED)
are a participant, the Funds may not sell their 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 entities
responsible for the repayment of the debt may be unable, or unwilling to pay the
principal and interest when due.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Trust, the Adviser, Roger Engemann &
Associates, Inc. ("REA", or the "Adviser"), 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, is 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 $50 Next $450 Over $500
Million Million 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>
The Adviser furnishes advice and recommendations with respect to the Funds'
securities portfolios, supervises the Funds' investments, provides Fund
accounting and pricing, and provides the Trust's Board of Trustees with periodic
and special reports on investment securities, economic conditions and other
pertinent subjects. The Manager also performs various administrative and
shareholder services for each Fund under separate administration agreements. All
normal operating expenses of the Funds, except for fees and expenses associated
with investment management services, service fees, distribution fees, Trustees'
fees, audit fees and certain legal fees are paid by the Manager pursuant to the
administration agreements.
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 it retained net selling commissions of
$101,674 for Class A shares and deferred sales charges of $501,234 for Class B
shares and $104,875 for Class C shares for the year ended December 31, 1998. In
addition, each Fund pays PEPCO 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
distributor has advised the Trust that of the total amount expensed for the year
ended December 31, 1998 $2,016,392 was retained by the Distributor, $2,629,819
was paid out to unaffiliated Participants and $16,306 was paid to W.S. Griffith,
an indirect subsidiary of PHL.
As Administrator of the Funds, 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 $500 million, 0.40% of average daily net assets of $500 million through $625
million, and 0.30% of average daily net assets greater than $625 million: a
minimum fee may apply.
PEPCO has voluntarily agreed to waive, when necessary, a portion of its
administration fee so that Other Operating Expenses (operating expenses
excluding management fees and 12b-1 fees) do not exceed the following limits:
<TABLE>
<CAPTION>
1st $50 next $450 next $125 over $625
million million million million
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Growth Fund.............. 0.99% 0.50% 0.30% 0.30%
Nifty Fifty Fund......... 0.99% 0.50% 0.30% 0.30%
Balanced Return Fund..... 1.09% 0.60% 0.40% 0.40%
Global Growth Fund....... 0.60% 0.50% 0.40% 0.40%
Small & Mid-Cap Growth
Fund................... 0.60% 0.50% 0.40% 0.40%
Value 25 Fund............ 0.60% 0.50% 0.40% 0.40%
</TABLE>
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended December 31, 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.......................... $555,311,417 $614,413,792
Nifty Fifty Fund..................... 305,753,217 290,307,238
Balanced Return Fund................. 60,122,526 53,879,018
Global Growth Fund................... 21,996,573 20,166,638
Small & Mid Cap Growth Fund.......... 145,983,951 108,128,563
Value 25 Fund........................ 49,499,799 48,785,988
</TABLE>
Purchases and sales of U.S. Government and agency securities during the year
ended December 31, 1998, aggregated $35,971,164 and $39,843,599 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
57
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 (CONTINUED)
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. CAPITAL LOSS CARRYOVERS
For the fiscal year ended December 31, 1998, the following Funds had capital
loss carryovers, expiring in 2006, which may be used to offset future capital
gains.
<TABLE>
<S> <C>
Global Growth Fund................. $ 1,742,859
Small & Mid-Cap Growth Fund........ 10,519,829
</TABLE>
Under current tax law, capital losses realized after October 31, 1998 may be
deferred and treated as occurring on the first day of the following tax year.
For the calendar year ended December 31, 1998 the Global Growth Fund and the
Small & Mid-Cap Growth Fund elected to defer losses occurring between November
1, 1998 and December 31, 1998 in the amount of $7,217 and $17,567, respectively.
In addition, the Small & Mid-Cap Fund, Value 25 Fund, and Balanced Return Fund
were able to utilize losses deferred in the prior year in the amount of
$189,050, $7,087, and $247,437, respectively.
6. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Funds have recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Funds and are designed generally to present
undistributed net investment income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of December 31, 1998,
the Funds recorded the following reclassifications to increase (decrease) the
accounts listed below:
<TABLE>
<CAPTION>
Undistributed Capital paid
net in
investment Accumulated on shares of
income net realized beneficial
(loss) gain (loss) interest
------------ ------------ --------------
<S> <C> <C> <C>
Growth Fund........................ $ 4,059,521 $ 10,516 $ (4,070,037)
Nifty Fifty Fund................... 2,852,205 (2,852,429) 224
Balanced Return Fund............... 358 172 (530)
Global Growth Fund................. 246,044 (13,986) (232,058)
Small & Mid Cap Growth Fund........ 1,330,768 10,751 (1,341,519)
Value 25 Fund...................... 512 (299) (213)
</TABLE>
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended December 31, 1998, the following Funds distributed
long-term capital gain dividends as follows:
<TABLE>
<CAPTION>
Total
Long-Term
Distributions
------------
<S> <C>
Growth Fund........................................ $23,765,415
Nifty Fifty Fund................................... 6,472,127
Balanced Return Fund............................... 5,623,989
Value 25 Fund...................................... 520,008
</TABLE>
For federal income tax purposes, a percentage of the ordinary income dividends
paid by the following Funds qualify for the dividends received deduction (DRD)
for corporate shareholders:
<TABLE>
<CAPTION>
% of Ordinary
Income
Dividend
Qualified
for DRD
-----------------
<S> <C>
Balanced Return Fund........................... 65.68%
Value 25 Fund.................................. 59.50%
</TABLE>
This report is not authorized for distribution to prospective investors in the
Phoenix-Engemann Funds unless preceded or accompanied by an effective Prospectus
which includes information concerning the sales charge, the Fund's record and
other pertinent information.
58
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
The Phoenix-Engemann Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Engemann Growth Fund, the Phoenix-Engemann Nifty Fifty Fund, the
Phoenix-Engemann Balanced Return Fund, the Phoenix-Engemann Small & Mid-Cap
Growth Fund, the Phoenix-Engemann Value 25 Fund and the Phoenix-Engemann Global
Growth Fund (the "Funds") at December 31, 1998, and the results of each of their
operations, the changes in each of their net assets and the financial highlights
for the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998, by correspondence with the
custodians and brokers, provide a reasonable basis for the opinion expressed
above. The financial statements of The Phoenix-Engemann Funds (except for the
Phoenix-Engemann Value 25 Fund) for the year ended December 31, 1996, and prior
periods were audited by other independent accountants whose report dated
February 14, 1997, expressed an unqualified opinion on those statements.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 1999
59
<PAGE>
PHOENIX-ENGEMANN FUNDS
600 North Rosemead Boulevard
Pasadena, California 91107-2133
TRUSTEES
Roger Engemann
Barry E. McKinley
Robert L. Peterson
Richard C. Taylor
Angela Wong
OFFICERS
Roger Engemann, President
Malcolm Axon, Chief Financial Officer
Tina L. Mitchell, Secretary
John S. Tilson, Vice President
Thomas N. Steenburg, General Counsel and
Vice President
INVESTMENT ADVISERS
Roger Engemann & Associates ("REA")
600 North Rosemead Boulevard
Pasadena, California 91107-2101
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. 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)
P.O. Box 351
Boston, Massachusetts 02101
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
Internet access:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION PRSRT STD
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 PAID
Springfield, MA
[LOGO] PHOENIX Permit No. 444
INVESTMENT PARTNERS
PXP 2115 (2/99)
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