THE PHOENIX-ENGEMANN FUNDS
Supplement dated September 2, 1999 to
Statement of Additional Information dated May 1, 1999,
as supplemented July 9, 1999
At a meeting held on August 10, 1999, the Board of Trustees of The
Phoenix-Engemann Funds (the "Trust") voted to amend certain of the operating
policies of Phoenix-Engemann Balanced Return Fund, Phoenix-Engemann Growth Fund
and Phoenix-Engemann Nifty Fifty Fund (the "Funds"). The Trustees voted to allow
the Funds the ability to (1) buy and sell put and call options on securities and
securities indices for hedging purposes, (2) write covered put and call options
on securities, and (3) buy and sell put and call warrants for hedging purposes,
thus creating uniformity between all funds of the Trust with respect to these
policies.
The disclosure contained in the Statement of Additional Information is hereby
amended to insert the following on page 7 prior to the section "Securities
Loans":
OPTIONS
Each Fund may buy and sell put and call options for hedging purposes,
and may also seek to increase its return by writing covered put and call
options on securities it owns or in which it may invest. A Fund receives a
premium from writing a put or call option, which increases such Fund's
return if the option expires unexercised or is closed out at a net profit.
When a Fund writes a call option, it gives up the opportunity to profit
from any increase in the price of the underlying security above the
exercise price of the option and the premium received; when it writes a put
option, a Fund takes the risk that it will be required to purchase the
underlying security form the option holder at a price above the current
market price of the security and the premium received. A Fund may terminate
an option that it has written prior to its expiration by entering into a
closing purchase transaction in which it purchases an option having the
same terms as the option written. The aggregate value of the securities
underlying options may not exceed 25% of a Fund's assets. Each Fund's use
of these strategies also may be limited by applicable law.
OPTIONS ON SECURITIES INDICES AND PUT AND CALL WARRANTS
Each Fund may buy and sell options on domestic and foreign securities
indices for hedging purposes. A securities index represents a numerical
measure of the changes in value of the securities comprising the index. An
option on a securities index gives the holder the right, in return for the
premium paid for the option, to buy (in the case of a call option) or sell
(in the case of a put option) units of a particular index at an agreed
price during the term of the option. The holder of the option does not
receive the right to take or make delivery of the actual securities making
up the index, but has the right instead to receive a cash settlement amount
based on the change, if any, in the value of the index during the term of
the option.
Depending on the change in the value of the underlying index during the
term of the option, the holder may either exercise the option at a profit
or permit the option to expire worthless. For example, if a Fund were to
sell a call option on an index and the value of the index were to increase
during the term of the option, the holder of the index would likely
exercise the option and receive a cash payment from such Fund. If, on the
other hand, the value of the index were to decrease, the option would
likely expire worthless, and such Fund would realize a profit in the amount
of the premium received by it when it sold the option (less and transaction
costs). Each Fund will only purchase or sell options on a securities index
to the extent that it holds securities in its portfolio whose price
changes, in the Adviser's judgment, should correlate closely with changes
in the index. No Fund will purchase or sell options on securities indices
if as a result of the premiums paid and premiums received by a Fund on
outstanding options would exceed 5% of such Fund's net assets.
Each of the Funds may also purchase put and call warrants issued by
banks and other financial institutions, whose values are based on the
values from time to time of one or more foreign securities indices. Each
Fund's use of such warrants would be similar to its use of options on
securities indices.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE STATEMENT OF ADDITIONAL
INFORMATION FOR FUTURE REFERENCE.
PXP 2011B/OP (9/99)
