As filed with the Securities and Exchange Commission on May 3, 1999
File Nos. 33-1922
811-4506
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 30 [X]
and
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 33 [X]
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THE PHOENIX-ENGEMANN FUNDS
(formerly called Pasadena Investment Trust)
(Exact Name of Registrant as Specified in Charter)
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600 North Rosemead Boulevard, Pasadena, California 91107-2133
(Address of Principal Executive Office)
(626) 351-9686
(Registrant's Telephone Number, Including Area Code)
ROGER ENGEMANN
600 North Rosemead Boulevard, Pasadena, California 91107-2138
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective:
[X] Immediately upon filing pursuant to paragraph (b) of Rule 485, or
[ ] on _____________ pursuant to paragraph (b) of Rule 485, or
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485, or
[ ] on _____________ pursuant to paragraph (a)(1) of Rule 485, or
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485, or
[ ] on _____________ pursuant to paragraph (a)(2) of Rule 485.
-------------
Please Send Copy of Communications to:
Pamela S. Sinofsky
Compliance Officer
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, CT 06115
(860) 403-6785
================================================================================
<PAGE>
THE PHOENIX-ENGEMANN FUNDS
Phoenix-Engemann Balanced Return Fund
Phoenix-Engemann Global Growth Fund
Phoenix-Engemann Growth Fund
Phoenix-Engemann Nifty Fifty Fund
Phoenix-Engemann Small & Mid-Cap Growth Fund
Phoenix-Engemann Value 25 Fund
CONTENTS OF POST-EFFECTIVE AMENDMENT
This Post-Effective Amendment to the Registration Statement of The
Phoenix-Engemann Funds contains the following documents:
Facing Sheet
Contents of Post-Effective Amendment
Cross-Reference Sheet for the above-referenced Funds
Part A: Prospectus for the above-referenced Funds
Part B: Statement of Additional Information for the above-referenced
Funds
Part C: Other Information
Signature Page
Exhibit Index
<PAGE>
THE PHOENIX-ENGEMANN FUNDS
CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)
UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
Part A:
Information Required in Prospectus
Item Number Form N-1A Part A Prospectus Caption
- ------------------------------------------------------------- ---------------------------------------------------
<S> <C> <C>
1. Front and Back Cover Pages Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Investment Risk and Return Summary
Performance
3. Risk/Return Summary: Fee Table Fund Expenses
4. Investment Objectives, Principal Investment Investment Risk and Return Summary; Investment
Strategies, and Related Risks Strategies; Risks Related to Investment Strategies
5. Management's Discussion of Fund Performance Performance Tables
6. Management, Organization, and Capital Structure Management of the Fund
7. Shareholder Information Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things You Should Know When Selling Shares;
Account Policies; Investor Services; Tax Status of
Distributions
8. Distribution Arrangements Sales Charges
9. Financial Highlights Information Financial Highlights
Part B:
Information Required in Statement of Additional Information
Item Number Form N-1A, Part B Statement of Additional Information Caption
10. Cover Page and Table of Contents Cover Page, Table of Contents
11. Fund History The Fund
12. Description of the Fund and Its Investment Risks Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund Management of the Trust
14. Control Persons and Principal Holders of Securities Management of the Trust
15. Investment Advisory and Other Services Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities Other Information
18. Purchase, Redemption, and Pricing of Shares Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund Dividends, Distributions and Taxes
20. Underwriters The Distributor
21. Calculation of Performance Data Performance Information
22. Financial Statements Financial Statements
Part C
Information required to be included in Part C is set forth under the appropriate Item,
so numbered, in Part C of this Registration Statement.
</TABLE>
<PAGE>
Phoenix Investment Partners
Prospectus
May 1, 1999
Engemann
Phoenix-Engemann
Balanced Return Fund
Phoenix-Engemann
Global Growth Fund
Phoenix-Engemann
Growth Fund
Phoenix-Engemann
Nifty Fifty Fund
Phoenix-Engemann
Small & Mid-Cap Growth Fund
Phoenix-Engemann
Value 25 Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or
disapproved of these securities or
determined if this prospectus is
truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus contains important
information that you should know
before investing in the Phoenix-Engemann
Balanced Return Fund, the Phoenix-
Engemann Global Growth Fund,
the Phoenix-Engemann Growth Fund,
the Phoenix-Engemann Nifty Fifty Fund,
the Phoenix-Engemann Small & Mid-Cap
Growth Fund and the Phoenix-Engemann
Value 25 Fund
[Logo: PHOENIX
INVESTMENT PARTNERS]
<PAGE>
[Begin Side Bar]
> Phoenix-
Engemann
Funds
[End Side Bar]
Table of Contents
- -------------------------------------------------------
<TABLE>
<S> <C>
Phoenix-Engemann Balanced Return Fund
Investment Risk and Return Summary ................................... 1
Fund Expenses ........................................................ 4
Investment Strategies ................................................ 5
Risks Related to Investment Strategies ............................... 6
Phoenix-Engemann Global Growth Fund
Investment Risk and Return Summary ................................... 10
Fund Expenses ........................................................ 13
Investment Strategies ................................................ 14
Risks Related to Investment Strategies ............................... 16
Phoenix-Engemann Growth Fund
Investment Risk and Return Summary ................................... 19
Fund Expenses ........................................................ 21
Investment Strategies ................................................ 22
Risks Related to Investment Strategies ............................... 23
Phoenix-Engemann Nifty Fifty Fund
Investment Risk and Return Summary ................................... 25
Fund Expenses ........................................................ 28
Investment Strategies ................................................ 29
Risks Related to Investment Strategies ............................... 30
Phoenix-Engemann Small & Mid-Cap
Growth Fund
Investment Risk and Return Summary ................................... 32
Fund Expenses ........................................................ 35
Investment Strategies ................................................ 36
Risks Related to Investment Strategies ............................... 37
Phoenix-Engemann Value 25 Fund
Investment Risk and Return Summary ................................... 41
Fund Expenses ........................................................ 44
Investment Strategies ................................................ 45
Risks Related to Investment Strategies ............................... 46
Management of the Funds ............................................... 48
Pricing of Fund Shares ................................................ 49
Sales Charges ......................................................... 50
Your Account .......................................................... 53
How to Buy Shares ..................................................... 54
How to Sell Shares 54
Things You Should Know When
Selling Shares ....................................................... 55
Account Policies ...................................................... 56
Investor Services ..................................................... 57
Tax Status of Distributions ........................................... 58
Financial Highlights .................................................. 59
Additional Information ................................................ 74
</TABLE>
<PAGE>
Phoenix-Engemann Balanced Return Fund
Investment Risk and Return Summary
- -------------------------------------------------
Investment Objective
Phoenix-Engemann Balanced Return Fund has an investment
objective to maximize total investment return consistent with
reasonable risk. There is no guarantee that the fund will
achieve its objective.
Principal Investment Strategies
</R?
> The fund seeks to invest in high-quality growth companies, as
defined below, and U.S. Government securities. Under normal
circumstances, the fund expects to invest at least 25% of its
net assets in U.S. Government securities.
> The fund intends to provide capital appreciation from
equities, primarily companies that are financially strong with
large capitalizations and a competitive advantage ("high
quality" companies), balanced by income and capital
preservation from U.S. Government securities of any maturity.
The adviser hopes to achieve less volatility using this
strategy.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security or the security has appreciated and is no longer
attractive.
> The adviser will have sole discretion to shift its emphasis
among equity and debt securities, as well as among various
industry sectors, as it may determine based upon financial
trends and changes in economic and market conditions.
> The fund generally will invest in well established companies
with larger capitalizations. However, the fund can invest in
companies with smaller capitalizations and in new issues.
> The fund may invest up to 35% of its assets in securities of
foreign companies, special situations, such as corporate
restructurings or management changes, and unseasoned companies
combined.
Phoenix-Engemann Balanced Return Fund 1
<PAGE>
Principal Risks
If you invest in this fund, you risk that you may lose your
investment.
Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse then expected.
As a result, the value of your shares may decrease. In addition,
if the adviser misjudges the return potential, or the ability of
issuers to make scheduled principal and interest payments, the
fund's returns may be lower than prevailing returns.
The fund may be subject to greater risks than a fund that does
not invest in securities with growth characteristics.
Smaller and unseasoned companies may be affected to a greater
extent than larger, established companies by changes in general
economic conditions and conditions in particular industries.
Unseasoned companies will be relatively new to the primary line
of business and small companies may also be relatively new.
These companies may not have the same operating history and
"track record" as larger companies. This could make future
performance of smaller companies, unseasoned companies and new
issues more difficult to predict.
Obligations issued or guaranteed by the U.S. Government,
agencies, authorities and instrumentalities only guarantee
principal and interest will be timely paid to holders of the
securities. The entities do not guarantee that the value of fund
shares will increase.
Debt securities with longer maturities may be subject to greater
price fluctuations due to interest rates, tax laws, and other
general market factors than securities with shorter maturities.
Generally, the value of debt securities is inversely related to
changes in interest rates. If interest rates rise, the value of
debt securities will fall. This may cause the value of your
shares to decrease.
Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may
negatively impact the fund's portfolio. Some investments may be
made in currencies other than U.S. dollars that will fluctuate
in value as a result of changes in the currency exchange rate.
Foreign markets and currencies may not perform as well as U.S.
markets. Emerging market countries and companies doing business
in emerging markets may not have the same range of opportunities
as more developed countries and their companies. They may also
have more obstacles to financial success.
Special situations often involve smaller, unseasoned companies
and the securities may not appreciate as the adviser believed
they would. Analysis of special situations is more complex than
for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
2 Phoenix-Engemann Balanced Return Fund
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Balanced Return Fund.
The bar chart shows changes in the fund's Class A Shares
performance from year to year over the last ten years.(1) The
table shows how the fund's average annual returns for one, five
and ten years, and for the life of the fund compare to those of
a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund
will perform in the future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Balanced Return Fund
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
32.97 -0.39 38.89 4.49 2.44 -4.43 27.18 17.78 18.98 29.12
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
</TABLE>
[End Bar Chart]
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 20.76% (quarter ending December 31, 1998) and
the lowest return for a quarter was (16.28)% (quarter ending
September 30, 1990). Year to date performance (through March 31,
1999 was (0.68)%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Average Annual Total Returns(1) One Five Ten
(for the periods ending 12/31/98) Year Years Years Life of the Fund(2)
-----------------------------------------------------------------------------------------------------------
Class A Class B Class C
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares 22.98% 15.93% 15.23% 15.66% -- --
-----------------------------------------------------------------------------------------------------------
Class B Shares 24.21% N/A N/A -- 16.06% --
-----------------------------------------------------------------------------------------------------------
Class C Shares 28.07% N/A N/A -- -- 16.26%
-----------------------------------------------------------------------------------------------------------
Balanced Benchmark(3) 20.94% 17.15% 14.98% 13.16%(4) 23.76%(5) 23.76%(5)
-----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption in the fund's
Class B and Class C Shares.
(2) Class A Shares since June 8, 1987; Class B and Class C Shares
since January 3, 1994.
(3) 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 U.S.
Treasury bill return. The index's performance does not reflect
sales charges.
(4) Benchmark performance since June 30, 1997.
(5) Benchmark performance since January 31, 1994.
Phoenix-Engemann Balanced Return Fund 3
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
-------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(a) 1%(b)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
--------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
-------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.76% 0.76% 0.76%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.62% 0.62% 0.62%
---- ---- ----
Total Annual Fund Operating Expenses 1.63% 2.38% 2.38%
==== ==== ====
</TABLE>
----------------
(a) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(b) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(c) Distribution and Service Fees represent an asset-based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
4 Phoenix-Engemann Balanced Return Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $633 $965 $1,319 $2,316
----------------------------------------------
Class B $641 $942 $1,270 $2,530
----------------------------------------------
Class C $341 $742 $1,270 $2,716
----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Class A $633 $965 $1,319 $2,316
----------------------------------------------
Class B $241 $742 $1,270 $2,530
----------------------------------------------
Class C $241 $742 $1,270 $2,716
----------------------------------------------
</TABLE>
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective to maximize a total
investment return consistent with reasonable risk. There is no
guarantee that the fund will achieve its objective.
Principal Investment Strategies
The fund seeks to invest in high-quality growth companies and
U.S. Government securities. Under normal circumstances, the fund
expects to invest at least 25% of its net assets in U.S.
Government securities.
Securities for fund investment are selected based on a moderate
asset allocation and balanced approach. The adviser considers
both the opportunity for gain and the risk of loss in making
investment decisions. The fund intends to provide capital
appreciation from equities, primarily high quality growth
companies. High quality growth companies have large
capitalizations, are profitable, financially strong, stable and
have a competitive advantage. In addition to these
characteristics, the adviser may also consider valuations based
upon P/E's, growth rates and competitive standards to select
equity securities for fund investment. The fund intends to
balance capital appreciation by income and capital preservation
from U.S. Government securities of any maturity. The adviser
hopes to achieve less volatility using this strategy. The
adviser anticipates that the volatility of price movement of the
equity securities in its portfolio will be less than that of the
Standard and Poor's 500 Stock Index.
Phoenix-Engemann Balanced Return Fund 5
<PAGE>
A security is sold when there has been a change in the original
factors used to select a security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
The adviser will shift its emphasis among equity and debt
securities, as well as among various industry sectors, as it may
determine based upon financial trends and changes in economic
and market conditions. The balance between equities and U.S.
Government securities at any time will be within the adviser's
sole discretion.
The fund generally will invest in well established companies
with larger capitalizations. However, the fund can invest in
companies with smaller capitalizations and in new issues.
The fund may invest up to 35% of its assets in securities of
foreign companies, special situation and unseasoned companies
combined. Foreign securities are securities of non-U.S. issuers
that are listed on a principal foreign or domestic securities
exchange or market, or that are represented by Depository
Receipts. Unseasoned companies generally are smaller and younger
companies that are relatively new to or not yet well established
in its primary line of business. Special situations are created
by developments that apply solely to a particular company.
Developments that create special situations include
liquidations, reorganizations, recapitalizations, corporate
restructurings, mergers and tender offers, technological
breakthroughs and new management.
Temporary Defensive Strategy: If the adviser believes conditions
are not favorable to the fund's principal strategies, all or
part of the fund's assets may be held in cash and short-term
money market instruments, including obligations of the U.S.
Government, high quality commercial paper, certificates of
deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. When this happens, the fund may not achieve its
investment objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Risks Related to Investment Strategies
- -----------------------------------------------------
General
The value of the fund's investments that support your share
value can decrease as well as increase. If between the time you
purchase shares and the time you sell shares the value of the
fund's investments decreases, you will lose money. The value of
the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in
value of many or most investments. Particular industries can
face poor market conditions for their products or services so
that companies engaged in those businesses do not perform as
well as companies in other industries. To the extent that the
fund's investments are affected by general economic declines and
declines in industries, fund share values may decline. Share
values can also decline if the specific companies selected for
fund investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends, interest
rates and other economic factors.
6 Phoenix-Engemann Balanced Return Fund
<PAGE>
The value of your shares is based on the market value of the
fund's investments. In the case of fixed income securities,
including U.S. Government securities, the value of the security
will be directly affected by trends in interest rates and the
overall condition of credit markets. For example, in times of
rising interest rates, the value of these types of securities
tends to decrease. When interest rates fall, the value of these
securities tends to rise. To the extent that the fund's
investments are negatively affected by changes in economic
conditions fund share values may decline. In addition, if the
adviser misjudges the return potential of any of the fund's
portfolio securities, the fund's returns may be lower than
prevailing returns.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Growth Stocks
Typically, growth stocks make little or no dividend payments to
shareholders. Investment return is based upon the stocks'
capital appreciation making return more dependent on market
increases and decreases as compared to stocks that provide
dividend payments. Growth stocks also tend to rise faster when
markets advance and drop more sharply when markets fall making
them more volatile than non-growth stocks to market changes.
Should a market decline occur, the fund's price may fall more
than that of a non-growth fund.
Government Securities
Obligations issued or guaranteed by the U.S. Government, its
agencies authorities and instrumentalities only guarantee that
principal and interest will be timely paid to holders of the
securities. The entities do not guarantee that the value of fund
shares will increase.
Long Term Maturities
Debt securities with longer maturities may be subject to greater
price fluctuations due to interest rates, tax laws, and other
general market factors than securities with shorter maturities.
Small Market Capitalization and Unseasoned Companies
Companies with small capitalization are often companies in
industries that have recently emerged due to cultural, economic,
regulatory or technological developments. Such developments can
have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental
prospects, investment returns from smaller capitalization
companies and unseasoned companies can be highly volatile.
Smaller and unseasoned companies may find their ability to raise
capital impaired by their size or lack of operating history.
Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks and stocks of
unseasoned companies are subject to varying patterns of trading
volume and may, at times, be difficult to sell.
Phoenix-Engemann Balanced Return Fund 7
<PAGE>
New Issues
A new issue may be an initial public offering by a previously
private company. There may be less public information about the
company and the company may have a limited operating history and
rapidly changing fundamental prospects. This may make investment
returns of new issues highly volatile. New issues may also be
subject to varying patterns of trading volume and may, at times,
be difficult to sell.
Foreign Investing
Investing in the securities of non-U.S. companies involves
special risks and considerations not typically associated with
investing in U.S. companies. These include:
o differences in accounting, auditing and financial reporting
standards;
o generally higher commission rates on foreign portfolio
transactions;
o differences and inefficiencies in transaction settlement
systems;
o the possibility of expropriation or confiscatory taxation;
o adverse changes in investment or exchange control
regulations;
o political instability; and
o potential restrictions on the flow of international
capital.
Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may
negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume
than domestic securities and therefore may exhibit greater price
volatility. Additionally, dividends and interest payable on
foreign securities may be subject to foreign taxes withheld
prior to receipt by the fund.
Many of the foreign securities held by the fund will not be
registered with, nor will the issuers of those securities be
subject to the reporting requirements of, the U.S. Securities
and Exchange Commission. Accordingly, there may be less publicly
available information about the securities and about the foreign
company or government issuing them than is available about a
domestic company or government entity. Moreover, individual
foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
Foreign Currency
Changes in foreign exchange rates will affect the value of those
securities denominated or quoted in currencies other than the
U.S. dollar. The forces of supply and demand in the foreign
exchange markets determine exchange rates and these forces are
in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can
8 Phoenix-Engemann Balanced Return Fund
<PAGE>
affect the fund's net asset value (share price) and dividends
either positively or negatively depending upon whether foreign
currencies are appreciating or depreciating in value relative to
the U.S. dollar. Exchange rates fluctuate over both the long and
short terms.
On January 1, 1999, eleven European countries began converting
from their sovereign currency to the European Union common
currency called the "Euro". This conversion may expose the fund
to certain risks including the reliability and timely reporting
of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect
specific securities in the fund's portfolio:
o known trends or uncertainties related to the Euro
conversion that an issuer reasonably expects will have a
material impact on revenues, expenses or income from its
operations;
o competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
o issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
o currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
o potential tax consequences.
Special Situations
Special situations often involve much greater risk than ordinary
investment securities. The companies involved often are smaller,
unseasoned companies and the securities may not perform as the
adviser expects. Analysis of special situations is more complex
than for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
Phoenix-Engemann Balanced Return Fund 9
<PAGE>
Phoenix-Engemann Global Growth Fund
- --------------------------------------------------
Important Notice to Investors
On February 9, 1999, the Board of Trustees of Phoenix-Engemann
Funds (the "Trust") unanimously approved an Agreement and Plan
of Reorganization (the "Agreement") relating to the proposed
combination of the Phoenix-Engemann Global Growth Fund of the
Trust and the Phoenix-Aberdeen Worldwide Opportunities Fund.
Pursuant to the Agreement, the Global Growth Fund will transfer
all or substantially all of its assets to the Worldwide
Opportunities Fund in exchange for shares of the Worldwide
Opportunities Fund and the assumption by the Worldwide
Opportunities Fund of certain identified liabilities of the
Global Growth Fund. Following the exchange, the Global Growth
Fund will distribute the shares of the Worldwide Opportunities
Fund to its shareholders pro rata, in liquidation of the Global
Growth Fund. The effectiveness of these transactions is subject
to the satisfaction of a number of conditions, including
approval by shareholders of the Global Growth Fund. As of the
date of this prospectus, the matter is being resubmitted to the
Board of Trustees of the Trust for further consideration.
Investment Risk and Return Summary
- -------------------------------------------------
Investment Objective
Phoenix-Engemann Global Growth Fund has an investment objective
of long-term growth of capital. There is no guarantee that the
fund will achieve its objective.
Principal Investment Strategies
> The fund may invest in a diversified portfolio of marketable
securities of both U.S. and foreign issuers. Under normal
circumstances, the fund will invest at least 65% of its
total assets in securities of issuers located in 3 or more
countries, one of which typically will be the United
States.
> The fund expects to invest primarily in common stocks of U.S.
and foreign companies that offer the potential for growth.
> The fund may:
o maintain any geographic and currency mix,
o invest in securities in both developed markets and
emerging markets,
o invest with out limit in any one country, and
o invest in companies of any size.
10 Phoenix-Engemann Global Growth Fund
<PAGE>
> In selecting companies for investment, the adviser seeks to
take advantage of investment opportunities created by a
global economy and will look for companies with the
following characteristics: above-average earnings growth
potential, predictable and sustainable earnings growth,
high profitability, financial and management strength,
significant competitive advantages, dominant market share
and where possible, limited regulation.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security or the security has appreciated and is no longer
attractive.
Principal Risks
If you invest in this fund, you risk that you may lose your
investment.
Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse then expected.
As a result, the value of your shares may decrease.
Political and economic uncertainty in foreign countries,
including some "emerging market" countries (countries with
markets that are not fully developed), as well as less public
information about foreign investments may negatively impact the
fund's portfolio. Some investments may be made in currencies
other than U.S. dollars that will fluctuate in value as a result
of changes in the currency exchange rate. Foreign markets and
currencies may not perform as well as U.S. markets. Emerging
market countries and companies doing business in emerging
markets may not have the same range of opportunities as more
developed countries and their companies. They may also have more
obstacles to financial success.
The fund may be subject to greater risks than a fund that does
not invest in securities with growth characteristics.
Smaller and unseasoned companies may be affected to a greater
extent than larger, established companies by changes in general
economic conditions and conditions in particular industries.
Unseasoned companies will be relatively new to the primary line
of business and small companies may also be relatively new.
These companies may not have the same operating history and
"track record" as larger companies. This could make future
performance of smaller companies, unseasoned companies and new
issues more difficult to predict.
Phoenix-Engemann Global Growth Fund 11
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Global Growth Fund.
The bar chart shows changes in the fund's Class A Shares
performance from year to year over the life of the fund.(1) The
table shows how the fund's average annual returns for one and
five years, and for the life of the fund compare to those of a
broad-based securities market index. The fund's past performance
is not necessarily an indication of how the fund will perform in
the future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Global Growth Fund
<TABLE>
<S> <C> <C> <C> <C>
25.76 23.84 21.77 11.27 14.35
1994 1995 1996 1997 1998
</TABLE>
[End Bar Chart
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 21.85% (quarter ending December 31, 1998) and
the lowest return for a quarter was (19.75)% (quarter ending
September 30, 1998). Year to date performance (through March 31,
1999) was (1.96)%.
<TABLE>
------------------------------------------------------------------------------------------------------------
Average Annual Total Returns(1)
(for the periods ending 12/31/98) One Year Five Years Life of the Fund(2)
------------------------------------------------------------------------------------------------------------
Class A Class B Class C
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 8.91% 18.11% 20.05% -- --
------------------------------------------------------------------------------------------------------------
Class B Shares 9.47% N/A -- 13.94% --
------------------------------------------------------------------------------------------------------------
Class C Shares 13.26% N/A -- -- 14.37%
------------------------------------------------------------------------------------------------------------
MSCI AC World Index(3) 21.72% 14.48% 19.22%(4) 18.06%(5) 18.63%(6)
------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption of the funds Class
B and Class C Shares.
(2) Class A Shares since November 1, 1993; Class B Shares since
September 18, 1996; and Class C Shares since October 21, 1996.
(3) MSCI AC (Morgan Stanley Capital International All Country
World Index) is an unmanaged, commonly used measure of global
stock market total return performance. The index's performance
does not reflect sales charges.
(4) Index performance since November 30, 1993.
(5) Index performance since September 30, 1996.
(6) Index performance since October 31, 1996.
12 Phoenix-Engemann Global Growth Fund
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your
investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(b) 1%(c)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
---------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 1.10% 1.10% 1.10%
Distribution and Service (12b-1) Fees(d) 0.25% 1.00% 1.00%
Other Expenses 0.76% 0.76% 0.76%
---- ---- ----
Total Annual Fund Operating Expenses(a) 2.11% 2.86% 2.86%
==== ==== ====
</TABLE>
----------------
(a) The fund's administrator has agreed to waive a portion of its
administration fee so that other operating expenses of the fund
do not exceed 0.60% of the first $50 million of the average
daily net assets. Total Annual Operating Expenses for the fund,
after waiver of administration fees, are 1.94% for Class A
Shares, 2.69% for Class B Shares and 2.69% for Class C Shares.
(b) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(c) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(d) Distribution and Service Fees represent an asset-based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Phoenix-Engemann Global Growth Fund 13
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
Class 1 year 3 years 5 years 10 years
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $679 $1,104 $1,555 $2,800
- -------------------------------------------------------------
Class B $689 $1,086 $1,508 $3,008
- -------------------------------------------------------------
Class C $389 $ 886 $1,508 $3,185
- -------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
- -------------------------------------------------------------
Class 1 year 3 years 5 years 10 years
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $679 $1,104 $1,555 $2,800
- -------------------------------------------------------------
Class B $289 $ 886 $1,508 $3,008
- -------------------------------------------------------------
Class C $289 $ 886 $1,508 $3,185
- -------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the
tables above since the expense levels used to calculate the
figures shown do not include the waiver of expenses over certain
levels by the fund's administrator.
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective of long-term growth of
capital. There is no guarantee that the fund will achieve its
objective.
Principal Investment Strategies
The fund may invest in a diversified portfolio of marketable
securities of both U.S. and foreign issuers. Under normal
circumstances, the fund will invest at least 65% of its total
assets in securities of issuers located in 3 or more countries,
one of which typically will be the United States. The fund
expects to invest primarily in common stocks of U.S. and foreign
companies that offer the potential for growth. Distribution of
income, such as dividends and interest, is incidental in the
selection of investments for the fund.
The fund may maintain any geographic and currency mix, invest in
securities in both developed markets and emerging markets,
invest without limit in any one country and invest in companies
of any size. However, the fund intends to principally invest in
securities of companies located in developed markets, including
the United States.
14 Phoenix-Engemann Global Growth Fund
<PAGE>
Through a global investment approach, the adviser seeks to take
advantage of the growing investment opportunities created by a
global economy that has become more highly integrated in
economic, industrial and financial terms. In analyzing companies
for investment, the adviser generally will look for one or more
of the following characteristics in relation to the prevailing
price of the securities of such companies:
o above-average earnings growth potential;
o predictable and sustainable earnings growth;
o high profitability;
o strength of management;
o overall financial strength;
o significant competitive advantages;
o dominant market share; and
o where possible, limited regulation.
The adviser's portfolio selection method may result in a higher
portfolio turnover rate. High portfolio turnover rates may
increase costs to the fund, may negatively affect fund
performance, and may increase capital gains distributions,
resulting in greater tax liability to you.
A security is sold when there has been a change in the original
factors used to select a security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
Temporary Defensive Strategy: In unusual market circumstances
when the adviser believes that foreign investing may involve
undue risks, up to 100% of the funds total assets may be
invested in securities of U.S. issuers. If the adviser believes
conditions are not favorable to the fund's principal strategies,
all or part of the fund's assets may be held in cash and
short-term money market instruments, including obligations of
the U.S. Government, high quality commercial paper, certificates
of deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. The fund may also hold all or part of fund assets in
Depository Receipts. When this happens, the fund may not achieve
its objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Phoenix-Engemann Global Growth Fund 15
<PAGE>
Risks Related to Investment Strategies
- -----------------------------------------------------
General
The value of the fund's investments that support your share
value can decrease as well as increase. If between the time you
purchase shares and the time you sell shares the value of the
fund's investments decreases, you will lose money. The value of
the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in
value of many or most investments. Particular industries can
face poor market conditions for their products or services so
that companies engaged in those businesses do not perform as
well as companies in other industries. To the extent that the
fund's investments are affected by general economic declines and
declines in industries that negatively affect the companies in
which the fund invests, fund share values may decline. Share
values can also decline if the specific companies selected for
fund investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends and other
economic factors.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Foreign Investing
Investing in the securities of non-U.S. companies involves
special risks and considerations not typically associated with
investing in U.S. companies. These include:
o differences in accounting, auditing and financial reporting
standards;
o generally higher commission rates on foreign portfolio
transactions;
o differences and inefficiencies in transaction settlement
systems;
o the possibility of expropriation or confiscatory taxation;
o adverse changes in investment or exchange control
regulations;
o political instability; and
o potential restrictions on the flow of international
capital.
Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may
negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume
than domestic securities and therefore may exhibit greater price
volatility. Additionally, dividends and interest payable on
foreign securities may be subject to foreign taxes withheld
prior to receipt by the fund.
Many of the foreign securities held by the fund will not be
registered with, nor will the issuers of those securities be
subject to the reporting requirements of, the U.S. Securities
and Exchange Commission. Accordingly, there may be less publicly
available information about the securities and about the foreign
company or government issuing them than is available about a
domestic
16 Phoenix-Engemann Global Growth Fund
<PAGE>
company or government entity. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
Foreign Currency
Changes in foreign exchange rates will affect the value of those
securities denominated or quoted in currencies other than the
U.S. dollar. The forces of supply and demand in the foreign
exchange markets determine exchange rates and these forces are
in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can
affect the fund's net asset value (share price) and dividends
either positively or negatively depending upon whether foreign
currencies are appreciating or depreciating in value relative to
the U.S. dollar. Exchange rates fluctuate over both the long and
short terms.
On January 1, 1999, eleven European countries began converting
from their sovereign currency to the European Union common
currency called the "Euro". This conversion may expose the fund
to certain risks including the reliability and timely reporting
of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect
specific securities in the fund's portfolio:
o known trends or uncertainties related to the Euro
conversion that an issuer reasonably expects will have a
material impact on revenues, expenses or income from its
operations;
o competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
o issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
o currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
o potential tax consequences.
Emerging Market Investing
Investments in less-developed countries whose markets are still
emerging generally present risks in greater degree than those
presented by investment in foreign issuers based in countries
with developed securities markets and more advanced regulatory
systems. Prior governmental approval of foreign investments may
be required under certain circumstances in some developing
countries, and the extent of foreign investment in domestic
companies may be subject to limitation in other developing
countries. The charters of individual companies in developing
countries may impose limitations on foreign ownership to
prevent, among other concerns, violation of foreign investment
limitations.
Phoenix-Engemann Global Growth Fund 17
<PAGE>
The economies of developing countries generally are heavily
dependent upon international trade; and, accordingly, have been
and may continue to be adversely affected by trade barriers,
exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by
the countries with which they trade. These economies also have
been (and may continue to be) adversely affected by economic
conditions in the countries with which they trade.
Growth Stocks
Typically, growth stocks make little or no dividend payments to
shareholders. Investment return is based upon the stocks'
capital appreciation making return more dependent on market
increases and decreases as compared to stocks that provide
dividend payments. Growth stocks also tend to rise faster when
markets advance and drop more sharply when markets fall making
them more volatile than non-growth stocks to market changes.
Should a market decline occur, the fund's price may fall more
than that of a non-growth fund.
Small Market Capitalization and Unseasoned Companies
Companies with small capitalization are often companies in
industries that have recently emerged due to cultural, economic,
regulatory or technological developments. Such developments can
have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental
prospects, investment returns from smaller capitalization
companies and unseasoned companies can be highly volatile.
Smaller and unseasoned companies may find their ability to raise
capital impaired by their size or lack of operating history.
Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks, new issues
and stocks of unseasoned companies are subject to varying
patterns of trading volume and may, at times, be difficult to
sell.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
18 Phoenix-Engemann Global Growth Fund
<PAGE>
Phoenix-Engemann Growth Fund
Investment Risk and Return Summary
- -------------------------------------------------
Investment Objective
Phoenix-Engemann Growth Fund has an investment objective of
long-term growth of capital. There is no guarantee that the fund
will achieve its objective.
Principal Investment Strategies
> The fund emphasizes the purchase of common stocks of domestic
corporations with rapidly growing earnings per share. The
companies may have small or large capitalizations and may
be unseasoned or established. The adviser will also select
stocks of companies that may not be experiencing rapid
growth but, in the opinion of the adviser, are undervalued
by other criteria of their fundamental net worth.
> The fund may invest up to 30% of its assets in special
situations, such as tender offers or corporate
restructurings, that the adviser believes present
opportunities for capital growth.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security or the security has appreciated and is no longer
attractive.
Principal Risks
If you invest in this fund, you risk that you may lose your
investment.
Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse then expected.
As a result, the value of your shares may decrease.
The fund may be subject to greater risks than a fund that does
not invest in securities with growth characteristics.
Smaller and unseasoned companies may be affected to a greater
extent than larger, established companies by changes in general
economic conditions and conditions in particular industries.
Unseasoned companies will be relatively new to the primary line
of business and small companies may also be relatively new.
These companies may not have the same operating history and
"track record" as larger companies. This could make future
performance of smaller companies, unseasoned companies and new
issues more difficult to predict.
Special situations often involve smaller, unseasoned companies
and the securities may not appreciate as the adviser believed
they would. Analysis of special situations is more complex than
for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Phoenix-Engemann Growth Fund 19
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Growth Fund. The bar
chart shows changes in the fund's Class A Shares performance
from year to year over the last ten years.(1) The table shows
how the fund's average annual returns for one, five and ten
years, and for the life of the fund compare to those of a
broad-based securities market index. The fund's past performance
is not necessarily an indication of how the fund will perform in
the future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Growth Fund
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
37.75 -4.55 67.85 2.24 -5.87 -3.75 27.16 22.49 16.04 37.41
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Calendar Year
</TABLE>
[End Bar Chart]
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 35.36% (quarter ending December 31, 1998) and
the lowest return for a quarter was (24.96)% (quarter ending
September 30, 1996). Year to date performance (through March 31,
1999) was 7.28%.
<TABLE>
------------------------------------------------------------------------------------------------------
Average Annual Total Returns(1) One Five Ten
(for the periods ending 12/31/98) Year Years Years Life of the Fund(2)
------------------------------------------------------------------------------------------------------
Class A Class B Class C
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares 30.88% 17.88% 17.06% 14.15% -- --
------------------------------------------------------------------------------------------------------
Class B Shares 32.53% N/A N/A -- 18.13% --
------------------------------------------------------------------------------------------------------
Class C Shares 36.38% N/A N/A -- -- 18.32%
------------------------------------------------------------------------------------------------------
S&P 500 Stock Index(3) 28.76% 24.15% 19.22% 16.93% 24.23% 24.23%
------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption in the fund's
Class B and Class C Shares.
(2) Class A Shares since June 24, 1986; Class B and Class C
Shares since January 3, 1994.
(3) The S&P 500 Stock Index is an unmanaged but commonly used
measure of common stock total return performance. The S&P's
performance does not reflect sales charges.
20 Phoenix-Engemann Growth Fund
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
--------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(a) 1%(b)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
----------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.81% 0.81% 0.81%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.52% 0.52% 0.52%
---- ---- ----
Total Annual Fund Operating Expenses 1.58% 2.33% 2.33%
==== ==== ====
</TABLE>
----------------
(a) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(b) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(c) Distribution and Service Fees represent an asset-based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Phoenix-Engemann Growth Fund 21
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $628 $950 $1,295 $2,264
----------------------------------------------
Class B $636 $927 $1,245 $2,479
----------------------------------------------
Class C $336 $727 $1,245 $2,666
----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $628 $950 $1,295 $2,264
----------------------------------------------
Class B $236 $727 $1,245 $2,479
----------------------------------------------
Class C $236 $727 $1,245 $2,666
----------------------------------------------
</TABLE>
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective of long-term growth of
capital. There is no guarantee that the fund will achieve its
objective.
Principal Investment Strategies
The fund emphasizes the purchase of common stocks of domestic
corporations with rapidly growing earnings per share. The
companies may have small or large capitalizations and may be
unseasoned or established. The adviser will also select stocks
of companies that may not be experiencing rapid growth but, in
the opinion of the adviser, are undervalued by other criteria of
their fundamental net worth. The adviser anticipates that the
fund's volatility will be greater than the Standard & Poor's 500
Stock Index. Distribution of income, such as dividends and
interest, is incidental in the selection of investments for the
fund.
A security is sold when there has been a change in the original
factors used to select a security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
The fund may invest up to 30% of its total assets in special
situations that the adviser believes present opportunities for
capital growth. Special situations are created by developments
that apply solely to a particular company. Developments that
create special situations include liquidations, reorganizations,
recapitalizations, corporate restructurings, mergers and tender
offers, technological breakthroughs and new management.
22 Phoenix-Engemann Growth Fund
<PAGE>
Temporary Defensive Strategy: If the adviser believes conditions
are not favorable to the fund's principal strategies, all or
part of the fund's assets may be held in cash and short-term
money market instruments, including obligations of the U.S.
Government, high quality commercial paper, certificates of
deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. When this happens, the fund may not achieve its
objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Risks Related to Investment Strategies
- -----------------------------------------------------
General
The value of the fund's investments that support your share
value can decrease as well as increase. If between the time you
purchase shares and the time you sell shares the value of the
fund's investments decreases, you will lose money. The value of
the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in
value of many or most investments. Particular industries can
face poor market conditions for their products or services so
that companies engaged in those businesses do not perform as
well as companies in other industries. To the extent that the
fund's investments are affected by general economic declines and
declines in industries that negatively affect the companies in
which the fund invests, fund share values may decline. Share
values can also decline if the specific companies selected for
fund investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends and other
economic factors.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Growth Stocks
Typically, growth stocks make little or no dividend payments to
shareholders. Investment return is based upon the stocks'
capital appreciation making return more dependent on market
increases and decreases as compared to stocks that provide
dividend payments. Growth stocks also tend to rise faster when
markets advance and drop more sharply when markets fall making
them more volatile than non-growth stocks to market changes.
Should a market decline occur, the fund's price may fall more
than that of a non-growth fund.
Small Market Capitalization and Unseasoned Companies
Companies with small capitalization are often companies in
industries that have recently emerged due to cultural, economic,
regulatory or technological developments. Such developments can
have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental
prospects, investment returns from smaller capitalization
companies and
Phoenix-Engemann Growth Fund 23
<PAGE>
unseasoned companies can be highly volatile. Smaller and
unseasoned companies may find their ability to raise capital
impaired by their size or lack of operating history. Product
lines are often less diversified and subject to competitive
threats. Smaller capitalization stocks, new issues and stocks of
unseasoned companies are subject to varying patterns of trading
volume and may, at times, be difficult to sell.
Special Situations
Special situations often involve much greater risk than ordinary
investment securities. The companies involved are often smaller,
unseasoned companies and the securities may not perform as the
adviser expects. Analysis of special situations is more complex
than for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
24 Phoenix-Engemann Growth Fund
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
Investment Risk and Return Summary
- -------------------------------------------------------
Investment Objective
Phoenix-Engemann Nifty Fifty Fund has an investment objective of
long-term growth of capital. There is no guarantee that the fund
will achieve its objective.
Principal Investment Strategies
> The fund expects to invest in approximately 50 different
securities that the adviser believes represent the best
potential to achieve long-term growth of capital. However,
the fund may, for short periods of time, have more or less
than 50 different securities while it is adding or
deleting a particular position.
> Under normal circumstances, the fund expects to invest at
least 75% of its assets in common stocks of high-quality
growth companies, companies that have demonstrated earning
power and are financially strong.
> The fund may also invest in common stocks with rapidly
growing earnings per share or stocks of companies that may
not be experiencing rapid growth but, in the opinion of
the adviser, are undervalued by other criteria of their
fundamental net worth. The companies may have small or
large capitalizations and may be unseasoned or
established.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security or the security has appreciated and is no longer
attractive.
> The fund may invest up to 35% of its assets in securities of
foreign companies, special situations and unseasoned
companies combined.
Principal Risks
If you invest in this fund, you risk that you may lose your
investment.
Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse then expected.
As a result, the value of your shares may decrease.
The fund seeks to invest in approximately 50 securities.
Conditions which negatively affect these securities will have a
greater impact on the fund as compared to a fund that is not
limited in the number of issues it holds.
The fund may be subject to greater risks than a fund that does
not invest in securities with growth characteristics.
Phoenix-Engemann Nifty Fifty Fund 25
<PAGE>
Smaller and unseasoned companies may be affected to a greater
extent than larger, established companies by changes in general
economic conditions and conditions in particular industries.
Unseasoned companies will be relatively new to the primary line
of business and small companies may also be relatively new.
These companies may not have the same operating history and
"track record" as larger companies. This could make future
performance of smaller and unseasoned companies more difficult
to predict.
Special situations often involve smaller, unseasoned companies
and the securities may not appreciate as the adviser believed
they would. Analysis of special situations is more complex than
for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
26 Phoenix-Engemann Nifty Fifty Fund
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Nifty Fifty Fund. The
bar chart shows changes in the fund's Class A Shares performance
from year to year over the life of the fund.(1) The table shows
how the fund's average annual returns for one and five years,
and for the life of the fund compare to those of a broad-based
securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the
future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Nifty Fifty Fund
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
67.64 3.67 -0.52 1.05 28.21 26.53 19.23 35.13
1991 1992 1993 1994 1995 1996 1997 1998
Calendar Year
</TABLE>
[End Bar Chart]
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 30.70% (quarter ending December 31, 1998) and
the lowest return for a quarter was (12.06)% (quarter ending
September 30, 1998). Year to date performance (through March 31,
1999) was 3.54%.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Average Annual Total Returns(1) One Five
(for the periods ending 12/31/98) Year Years Life of the Fund(2)
------------------------------------------------------------------------------------------
Class A Class B Class C
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 28.70% 20.27% 20.01% -- --
------------------------------------------------------------------------------------------
Class B Shares 30.30% N/A -- 20.53% --
------------------------------------------------------------------------------------------
Class C Shares 34.14% N/A -- -- 20.70%
------------------------------------------------------------------------------------------
S&P 500 Stock Index(3) 28.76% 24.15% 20.97% 24.23% 24.23%
------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption in the fund's
Class B and Class C Shares.
(2) Class A Shares since December 17, 1990; Class B and Class C
Shares since January 3, 1994.
(3) The S&P 500 Stock Index is an unmanaged but commonly used
measure of common stock total return performance. The S&P's
performance does not reflect sales charges.
Phoenix-Engemann Nifty Fifty Fund 27
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(a) 1%(b)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-----------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.82% 0.82% 0.82%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.53% 0.53% 0.53%
---- ---- ----
Total Annual Fund Operating Expenses 1.60% 2.35% 2.35%
==== ==== ====
</TABLE>
----------------
(a) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(b) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(c) Distribution and Service Fees represent an asset-based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
28 Phoenix-Engemann Nifty Fifty Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $630 $956 $1,304 $2,285
----------------------------------------------
Class B $638 $933 $1,255 $2,499
----------------------------------------------
Class C $338 $733 $1,255 $2,686
----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $630 $956 $1,304 $2,285
----------------------------------------------
Class B $238 $733 $1,255 $2,499
----------------------------------------------
Class C $238 $733 $1,255 $2,686
----------------------------------------------
</TABLE>
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective of long-term growth of
capital. There is no guarantee that the fund will achieve the
objective.
Principal Investment Strategies
The fund expects to invest in approximately 50 different
securities that the adviser believes represent the best
potential to achieve long-term growth of capital. However, the
fund may, for short periods of time, have more or less than 50
different securities while it is adding or deleting a particular
position.
Under normal circumstances, the fund expects to invest at least
75% of its assets in common stocks of high-quality growth
companies. High-quality growth companies are companies that
generally exceed $50 million in annual net income and satisfy
New York Stock Exchange listing requirements with respect to
demonstrated earning power, years in operation, number of
publicly-held shares, and net tangible assets.
The fund may also invest in common stocks with rapidly growing
earnings per share or stocks of companies that may not be
experiencing rapid growth but, in the opinion of the adviser,
are undervalued by other criteria of their fundamental net
worth. The companies may have small or large capitalizations and
may be unseasoned or established.
A security is sold when there has been a change in the original
factors used to select the security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
Phoenix-Engemann Nifty Fifty Fund 29
<PAGE>
The fund may invest up to 30% of its assets in special
situations. Special situations are created by developments that
apply solely to a particular company. Developments that create
special situations include liquidations, reorganizations,
recapitalizations, corporate restructurings, mergers and tender
offers, technological breakthroughs and new management.
Distribution of income, such as dividends and interest, is
incidental in the selection of investments for the fund.
Temporary Defensive Strategy: If the adviser believes conditions
are not favorable to the fund's principal strategies, all or
part of the fund's assets may be held in cash and short-term
money market instruments, including obligations of the U.S.
Government, high quality commercial paper, certificates of
deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. When this happens, the fund may not achieve its
investment objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Risks Related to Investment Strategies
- -----------------------------------------------------
General
The value of the fund's investments that support your share
value can decrease as well as increase. If between the time you
purchase shares and the time you sell shares the value of the
fund's investments decreases, you will lose money. The value of
the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in
value of many or most investments. Particular industries can
face poor market conditions for their products or services so
that companies engaged in those businesses do not perform as
well as companies in other industries. To the extent that the
fund's investments are affected by general economic declines and
declines in industries that negatively affect the companies in
which the fund invests, fund share values may decline. Share
values can also decline if the specific companies selected for
fund investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends and other
economic factors.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Limited Number of Investments
The fund seeks to invest in approximately 50 securities.
Conditions which negatively affect these securities will have a
greater impact on the fund as compared to a fund that is not
limited in the number of issues it holds. The fund may be more
sensitive to changes in the market value of a single issuer or
industry in its portfolio and therefore may present a greater
risk than is usually associated with a more widely diversified
mutual fund.
30 Phoenix-Engemann Nifty Fifty Fund
<PAGE>
Growth Stocks
Typically, growth stocks make little or no dividend payments to
shareholders. Investment return is based upon the stocks'
capital appreciation making return more dependent on market
increases and decreases as compared to stocks that provide
dividend payments. Growth stocks also tend to rise faster when
markets advance and drop more sharply when markets fall making
them more volatile than non-growth stocks to market changes.
Should a market decline occur, the fund's price may fall more
than that of a non-growth fund.
Small Market Capitalization and Unseasoned Companies
Companies with small capitalization are often companies in
industries that have recently emerged due to cultural, economic,
regulatory or technological developments. Such developments can
have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental
prospects, investment returns from smaller capitalization
companies and unseasoned companies can be highly volatile.
Smaller and unseasoned companies may find their ability to raise
capital impaired by their size or lack of operating history.
Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks and stocks of
unseasoned companies are subject to varying patterns of trading
volume and may, at times, be difficult to sell.
Special Situations
Special situations often involve much greater risk than ordinary
investment securities. The companies involved often are often
smaller, unseasoned companies and the securities may not perform
as the adviser expects. Analysis of special situations is more
complex than for ordinary investments, making it more difficult
for the adviser to accurately predict risk and return.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
Phoenix-Engemann Nifty Fifty Fund 31
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
Investment Risk and Return Summary
- -------------------------------------------------
Investment Objective
Phoenix-Engemann Small and Mid-Cap Growth Fund has an investment
objective of long-term growth of capital. There is no guarantee
that the fund will achieve its objective.
Principal Investment Strategies
> The fund emphasizes investment primarily in equity securities
of those small and mid-cap companies that the adviser
believes may be leading companies of tomorrow. Under
normal market circumstances, the fund will invest at least
65% of its total assets in equity securities of companies
that have market capitalizations below $1.5 billion.
> The fund expects to invest principally in common stocks. The
adviser will select stocks of corporations with rapidly
growing earnings per share. The adviser will also select
stocks of companies that may not be experiencing rapid
growth but, in the opinion of the adviser, are undervalued
by other criteria of their fundamental net worth.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security, or the security has appreciated and is no longer
attractive.
> Although the fund may invest up to 50% of its total assets in
securities of foreign (non-U.S.) issuers, it will
primarily emphasize investment in U.S. companies.
> The fund may invest in new issues that the adviser believes
offer good long-term investment potential or an
opportunity for immediate price increase.
> The fund may invest up to 35% of its assets in special
situations, such as tender offers or corporate
restructurings, that the adviser believes present
opportunities for capital growth.
Principal Risks
If you invest in this fund, you risk that you may lose your
investment.
Conditions affecting the overall economy, specific industries or
companies in which the fund invests can be worse then expected.
As a result, the value of your shares may decrease.
The fund may be subject to greater risks than a fund that does
not invest in securities with growth characteristics.
32 Phoenix-Engemann Small & Mid-Cap Growth Fund
<PAGE>
Smaller and mid-capitalization companies may be affected to a
greater extent than larger, established companies by changes in
general economic conditions and conditions in particular
industries. These companies may not have the same operating
history and "track record" as larger companies. This could make
future performance of smaller companies, mid-capitalization
companies and new issues more difficult to predict.
Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may
negatively impact the fund's portfolio. Some investments may be
made in currencies other than U.S. dollars that will fluctuate
in value as a result of changes in the currency exchange rate.
Foreign markets and currencies may not perform as well as U.S.
markets.
Special situations often involve smaller, unseasoned companies
and the securities may not appreciate as the adviser believed
they would. Analysis of special situations is more complex than
for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Phoenix-Engemann Small & Mid-Cap Growth Fund 33
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Small & Mid-Cap
Growth Fund. The bar chart shows changes in the fund's Class A
Shares performance from year to year over the life of the
fund.(1) The table shows how the fund's average annual returns
for one year and for the life of the fund compare to those of a
broad-based securities market index. The fund's past performance
is not necessarily an indication of how the fund will perform in
the future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<S> <C> <C> <C>
25.68 52.37 26.41 14.29
1995 1996 1997 1998
Calendar Year
</TABLE>
[End Bar Chart]
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 34.28% (quarter ending December 31, 1998) and
the lowest return for a quarter was (22.13)% (quarter ending
September 30, 1998). Year to date performance (through March 31,
1999) was (11.83)%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Average Annual Total Returns(1)
(for the periods ending 12/31/98) One Year Life of the Fund(2)
-----------------------------------------------------------------------------------
Class A Class B Class C
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares 8.87% 31.53% -- --
-----------------------------------------------------------------------------------
Class B Shares 9.54% -- 22.06% --
-----------------------------------------------------------------------------------
Class C Shares 13.34% -- -- 18.74%
-----------------------------------------------------------------------------------
Russell 2000 Index(3) (2.55)% 14.35% 11.14% 10.53%
-----------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption of the fund's
Class B and Class C Shares.
(2) Class A Shares since October 10, 1994; Class B Shares since
September 18, 1996; and Class C Shares since October 8, 1996.
(3) The Russell 2000 Index is an unmanaged, commonly used measure
of total return performance of small-capitalization stocks. The
Index does not reflect sales charges.
34 Phoenix-Engemann Small & Mid-Cap Growth Fund
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(b) 1%(c)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
---------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.97% 0.97% 0.97%
Distribution and Service (12b-1) Fees(d) 0.25% 1.00% 1.00%
Other Expenses 0.61% 0.61% 0.61%
---- ---- ----
Total Annual Fund Operating Expenses(a) 1.83% 2.58% 2.58%
==== ==== ====
</TABLE>
----------------
(a) The fund's administrator has agreed to waive a portion of its
administration fee so that other operating expenses of the fund
do not exceed 0.60% of the first $50 million of the average
daily net assets. Total Annual Operating Expenses for the fund,
after waiver of administration fees, are 1.78% for Class A
Shares, 2.53% for Class B Shares and 2.53% for Class C Shares.
(b) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(c) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(d) Distribution and Service Fees represent an asset based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Phoenix-Engemann Small & Mid-Cap Growth Fund 35
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $652 $1,023 $1,418 $2,521
----------------------------------------------
Class B $661 $1,002 $1,370 $2,732
----------------------------------------------
Class C $361 $ 802 $1,370 $2,915
----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $652 $1,023 $1,418 $2,521
----------------------------------------------
Class B $261 $ 802 $1,370 $2,732
----------------------------------------------
Class C $261 $ 802 $1,370 $2,915
----------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the
tables above since the expense levels used to calculate the
figures shown do not include the waiver of expenses over certain
levels by the fund's administrator.
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective of long-term growth of
capital. There is no guarantee that the fund will achieve its
objective.
Principal Investment Strategies
The fund seeks to achieve its objective by investing primarily
in equity securities of those small and mid-cap companies that
the adviser believes may be leading companies of tomorrow. The
fund emphasizes companies with market capitalizations below $1.5
billion. Under normal market circumstances, the fund will invest
at least 65% of its total assets in equity securities of
companies that are in that market capitalization range at the
time of purchase. The fund may continue to hold securities of
companies that subsequently increase their market
capitalizations to above $1.5 billion if the company continues
to satisfy the fund's other investment policies.
The fund may invest the remaining 35% of its assets in a small
and mid-cap companies or in equity securities of companies with
larger capitalizations. However, the fund intends to invest
primarily in U.S. equity securities with market capitalizations
of $1.5 billion or below. The fund may invest up to 50% of total
assets in securities of foreign (non-U.S.) issuers.
36 Phoenix-Engemann Small & Mid-Cap Growth Fund
<PAGE>
The adviser will select stocks of companies that show rapidly
growing earnings price per share. The fund may also invest in
companies that may not be experiencing rapid growth but, in the
opinion of the adviser, are undervalued by other criteria of
their fundamental net worth. The adviser anticipates that the
fund's volatility will be greater than the Standard & Poor's 500
Stock Index. Distribution of income, such as dividends and
interest, is incidental in the selection of investments for the
fund.
The fund may also invest in new issues that the adviser believes
offer good long-term investment potential or an opportunity for
immediate price appreciation.
The fund may invest up to 35% of its total assets in special
situations that the adviser believes present opportunities for
capital growth. Special situations are created by developments
that apply solely to a particular company. Developments that
create special situations include liquidations, reorganizations,
recapitalizations, corporate restructurings, mergers and tender
offers, technological breakthroughs and new management.
The adviser's portfolio selection method may result in a higher
portfolio turnover rate. High portfolio turnover rates may
increase costs to the fund, may negatively affect fund
performance, and may increase capital gains distributions,
resulting in greater tax liability to you.
A security is sold when there has been a change in the original
factors used to select a security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
Temporary Defensive Strategy: If the adviser believes conditions
are not favorable to the fund's principal strategies, all or
part of the fund's assets may be held in cash and short-term
money market instruments, including obligations of the U.S.
Government, high quality commercial paper, certificates of
deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. When this happens, the fund may not achieve its
objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Risks Related to Investment Strategies
- -----------------------------------------------------
General
The value of the fund's investments that support your share
value can decrease as well as increase. If between the time you
purchase shares and the time you sell shares the value of the
fund's investments decreases, you will lose money. The value of
the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in
value of many or most investments. Particular industries can
face poor market conditions for their products or services so
that companies engaged in those businesses do not
Phoenix-Engemann Small & Mid-Cap Growth Fund 37
<PAGE>
perform as well as companies in other industries. To the extent
that the fund's investments are affected by general economic
declines and declines in industries that negatively affect the
companies in which the fund invests, fund share values may
decline. Share values can also decline if the specific companies
selected for fund investment fail to perform as the adviser
expects, regardless of general economic trends, industry trends
and other economic factors.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Small and Medium Market Capitalization Investing
Companies with small and medium capitalization are often
companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments.
Such developments can have a significant positive or negative
effect on small and medium capitalization companies and their
stock performance. Given the limited operating history and
rapidly changing fundamental prospects, investment returns from
small and medium capitalization companies can be highly
volatile. Small and medium companies may find their ability to
raise capital impaired by their size or lack of operating
history. Product lines are often less diversified and subject to
competitive threats. Small and medium capitalization stocks are
subject to varying patterns of trading volume and may, at times,
be difficult to sell.
Focusing fund investments in small and mid-cap companies may
also subject the fund to greater risks then a fund that invests
in a broad range of securities that do not have the potential to
appreciate. Investment returns may be less for small and mid-cap
companies with appreciation potential because return is more
dependent on market increases and decreases as compared to
stocks that provide dividend payments. Should the market
decline, the share value of small and mid-cap companies may
decline at a sharper rate than larger, dividend-paying
companies.
Growth Stocks
Typically, growth stocks make little or no dividend payments to
shareholders. Investment return is based upon the stocks'
capital appreciation making return more dependent on market
increases and decreases as compared to stocks that provide
dividend payments. Growth stocks also tend to rise faster when
markets advance and drop more sharply when markets fall making
them more volatile than non-growth stocks to market changes.
Should a market decline occur, the fund's price may fall more
than that of a non-growth fund.
Foreign Investing
Investing in the securities of non-U.S. companies involves
special risks and considerations not typically associated with
investing in U.S. companies. These include:
o differences in accounting, auditing and financial reporting
standards;
o generally higher commission rates on foreign portfolio
transactions;
o differences and inefficiencies in transaction settlement
systems;
38 Phoenix-Engemann Small & Mid-Cap Growth Fund
<PAGE>
o the possibility of expropriation or confiscatory taxation;
o adverse changes in investment or exchange control
regulations;
o political instability; and
o potential restrictions on the flow of international
capital.
Political and economic uncertainty in foreign countries, as well
as less public information about foreign investments, may
negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume
than domestic securities and therefore may exhibit greater price
volatility. Additionally, dividends and interest payable on
foreign securities may be subject to foreign taxes withheld
prior to receipt by the fund.
Many of the foreign securities held by the fund will not be
registered with, nor will the issuers of those securities be
subject to the reporting requirements of, the U.S. Securities
and Exchange Commission. Accordingly, there may be less publicly
available information about the securities and about the foreign
company or government issuing them than is available about a
domestic company or government entity. Moreover, individual
foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
Foreign Currency
Changes in foreign exchange rates will affect the value of those
securities denominated or quoted in currencies other than the
U.S. dollar. The forces of supply and demand in the foreign
exchange markets determine exchange rates and these forces are
in turn affected by a range of economic, political, financial,
governmental and other factors. Exchange rate fluctuations can
affect the fund's net asset value (share price) and dividends
either positively or negatively depending upon whether foreign
currencies are appreciating or depreciating in value relative to
the U.S. dollar. Exchange rates fluctuate over both the long and
short terms.
On January 1, 1999, eleven European countries began converting
from their sovereign currency to the European Union common
currency called the "Euro". This conversion may expose the fund
to certain risks including the reliability and timely reporting
of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect
specific securities in the fund's portfolio:
o known trends or uncertainties related to the Euro
conversion that an issuer reasonably expects will have a
material impact on revenues, expenses or income from its
operations;
o competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;
Phoenix-Engemann Small & Mid-Cap Growth Fund 39
<PAGE>
o issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);
o currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and
o potential tax consequences.
New Issues
A new issue may be an initial public offering by a previously
private company. There may be less public information about the
company and the company may have a limited operating history and
rapidly changing fundamental prospects. This may make investment
returns of new issues highly volatile. New issues may also be
subject to varying patterns of trading volume and may, at times,
be difficult to sell.
Special Situations
Special situations often involve much greater risk than ordinary
investment securities. The companies involved often are smaller,
unseasoned companies and the securities may not perform as the
adviser expects. Analysis of special situations is more complex
than for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
40 Phoenix-Engemann Small & Mid-Cap Growth Fund
<PAGE>
Phoenix-Engemann Value 25 Fund
Investment Risk and Return Summary
- -------------------------------------------------
Investment Objective
Phoenix-Engemann Value 25 Fund has an investment objective to
provide substantial dividend income and long-term growth of
capital. There is no guarantee that the fund will achieve its
objective.
Principal Investment Strategies
> The fund expects to invest primarily in common stocks. Under
normal circumstances, at least 80% of the fund's total
assets will be invested in common stocks of approximately
twenty-five (25) companies that demonstrate high dividend
yield and quality earnings based on the adviser's
proprietary quantitative analysis.
> In selecting the twenty-five stocks, the adviser uses a
proprietary quantitative approach to identify the highest
yielding stocks that fit the fund's criteria. From this
group, the adviser selects stocks of any capitalization
that it believes offer the best investment promise. The
adviser will look for one or more of the following
characteristics:
o established operating history;
o dividend payout ratio; and
o sound balance sheet and other financial characteristics.
> The adviser looks to sell securities from the portfolio when
there is a change in the original factors used to select a
security or the security has appreciated and is no longer
attractive.
> The fund may invest up to 35% of its total assets in special
situations, such as tender offers or corporate
restructurings, that the adviser believes present
opportunities for capital growth.
Principal Risks
If you invest in this fund, you risk that you may lose your
investment
The fund will seek to earn current income and to increase the
value of your shares by investing in securities the adviser
expects to pay dividends and to increase in value. Most of the
fund's investments will be in common stocks. Conditions
affecting the overall economy, specific industries or companies
in which the fund invests can be worse than expected. As a
result, the value of your shares may decrease. Dividend
distributions can also decrease or be eliminated entirely.
Phoenix-Engemann Value 25 Fund 41
<PAGE>
Conditions which negatively affect the approximately 25
securities in which the fund invests will have a greater impact
on the fund as compared to a fund that is not limited in the
number of issues it holds.
Special situations often involve smaller, unseasoned companies
and the securities may not perform as the adviser expects.
Analysis of special situations is more complex than for ordinary
investments, making it more difficult for the adviser to
accurately predict risk and return.
42 Phoenix-Engemann Value 25 Fund
<PAGE>
Performance Tables
The bar chart and table below provide some indication of the
risks of investing in the Phoenix-Engemann Value 25 Fund. The
bar chart shows changes in the fund's Class A Shares performance
from year to year over the life of the fund.(1) The table shows
how the fund's average annual returns for one year and for the
life of the fund compare to those of a broad-based securities
market index. The fund's past performance is not necessarily an
indication of how the fund will perform in the future.
[Begin Bar Chart]
Annual Return (%)
Phoenix-Engemann Value 25 Fund
21.10 7.23
1997 1998
[End Bar Chart]
(1) The fund's average annual returns in the chart above do not
reflect the deduction of any sales charges. The returns would
have been less than those shown if sales charges were deducted.
During the period shown in the chart above, the highest return
for a quarter was 17.79% (quarter ending December 31, 1998) and
the lowest return for a quarter was (13.53)% (quarter ending
September 30, 1998). Year to date performance (through March 31,
1999) was (6.95)%.
<TABLE>
------------------------------------------------------------------------------
Average Annual Total Returns(1)
(for periods ending 12/31/98) One Year Life of the Fund(2)
------------------------------------------------------------------------------
Class A Class B Class C
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares 2.11% 11.59% -- --
------------------------------------------------------------------------------
Class B Shares 2.57% -- 9.87% --
------------------------------------------------------------------------------
Class C Shares 6.42% -- -- 12.88%
------------------------------------------------------------------------------
S&P 500 Stock Index(3) 28.76% 31.72% 30.23% 30.23%
------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect
the deduction of the maximum sales charge for an investment in
the fund's Class A Shares and a full redemption of the fund's
Class B and Class C Shares.
(2) Class A Shares since December 17, 1996; Class B and Class C
Shares since January 9, 1997.
(3) The S&P 500 Stock Index is an unmanaged but commonly used
measure of common stock total return performance. The S&P's
performance does not reflect sales charges.
Phoenix-Engemann Value 25 Fund 43
<PAGE>
Fund Expenses
- ----------------------------
This table illustrates all fees and expenses that you may pay if
you buy and hold shares of the fund.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from
your investment)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(b) 1%(c)
percentage of the lesser of the value redeemed or
the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
----------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------- ------- -------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses
that are deducted from fund assets)
Management Fees 0.90% 0.90% 0.90%
Distribution and Service (12b-1) Fees (d) 0.25% 1.00% 1.00%
Other Expenses 0.71% 0.71% 0.71%
---- ---- ----
Total Annual Fund Operating Expenses(a) 1.86% 2.61% 2.61%
==== ==== ====
</TABLE>
----------------
(a) The fund's administrator has agreed to waive a portion of its
administration fee so that other operating expenses of the fund
do not exceed 0.60% of the first $50 million of the average
daily net asset. Total Annual Operating Expenses for the fund,
after waiver of administration fees, are 1.75% for Class A
Shares, 2.50% for Class B Shares and 2.50% for Class C Shares.
(b) The maximum deferred sales charge is imposed on Class B
Shares redeemed during the first year; thereafter, it decreases
1% annually to 2% during the fourth and fifth years and to 0%
after the fifth year. Class B Shares purchased prior to January
20, 1998 are subject to the sales load schedule as it existed
prior to that date. See "Sales Charges--Class B Shares Purchased
Prior to January 20, 1998" in this prospectus.
(c) The deferred sales charge is imposed on Class C Shares
redeemed during the first year only. Class C Shares purchased
prior to January 20, 1998 are not subject to the 1% deferred
sales charge.
(d) Distribution and Service Fees represent an asset based sales
charge that, for a long-term shareholder, may be higher than the
maximum front-end sales charge permitted by the National
Association of Securities Dealers, Inc. ("NASD").
Example
This example is intended to help you compare the cost of
investing in the fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the
time periods indicated and then redeem all of your shares at the
end of those periods. The example also assumes that your
investment has a 5% return each year and that the fund's
operating expenses remain the same. In the case of Class B
Shares, it is assumed that your shares are converted to Class A
after eight years. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
44 Phoenix-Engemann Value 25 Fund
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $655 $1,032 $1,433 $2,551
----------------------------------------------
Class B $664 $1,011 $1,385 $2,762
----------------------------------------------
Class C $364 $ 811 $1,385 $2,944
----------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your
shares:
<TABLE>
<CAPTION>
----------------------------------------------
Class 1 year 3 years 5 years 10 years
----------------------------------------------
<S> <C> <C> <C> <C>
Class A $655 $1,032 $1,433 $2,551
----------------------------------------------
Class B $264 $ 811 $1,385 $2,762
----------------------------------------------
Class C $264 $ 811 $1,385 $2,944
----------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the
tables above since the expense levels used to calculate the
figures shown do not include the waiver of expenses over certain
levels by the fund's administrator.
Investment Strategies
- ------------------------------------
Investment Objective
The fund has an investment objective to provide substantial
dividend income and long-term growth of capital. There is no
guarantee that the fund will achieve its objective.
Principal Investment Strategies
The fund invests in securities that the adviser believes offer
the best potential for current dividend yield and long-term
growth of capital. Under normal circumstances, at least 80% of
the fund's total assets will be invested in common stocks of
approximately twenty-five (25) companies that demonstrate high
dividend yield and quality earnings based on the adviser's
proprietary quantitative analysis. The average market
capitalizations of the stocks included will generally be in
excess of $1 billion.
In selecting the twenty-five stocks, the adviser uses a
proprietary quantitative approach to identify the highest
yielding stocks that fit the fund's criteria. From this group,
the adviser selects stocks that it believes offer the best
investment promise. The adviser will look for one or more of the
following characteristics:
Phoenix-Engemann Value 25 Fund 45
<PAGE>
o established operating history;
o dividend payout ratio; and
o sound balance sheet and other financial characteristics.
A security is sold when there has been a change in the original
factors used to select a security, such as a reduction in the
expected earnings growth rate of the company or a loss of
competitive advantage, or the security has appreciated to the
point where it is no longer attractive.
The fund may invest up to 35% of its total assets in special
situations that the adviser believes present opportunities for
capital growth. Special situations are created by developments
that apply solely to a particular company. Developments that
create special situations include liquidations, reorganizations,
recapitalizations, corporate restructurings, mergers and tender
offers, technological breakthroughs and new management.
The adviser's portfolio selection method may result in a higher
portfolio turnover rate. High portfolio turnover rates may
increase costs to the fund, may negatively affect fund
performance, and may increase capital gains distributions,
resulting in greater tax liability to you.
Temporary Defensive Strategy: If the adviser believes conditions
are not favorable to the fund's principal strategies, all or
part of the fund's assets may be held in cash and short-term
money market instruments, including obligations of the U.S.
Government, high quality commercial paper, certificates of
deposit, bankers' acceptances, bank interest-bearing demand
accounts, and repurchase agreements secured by U.S. Government
securities. When this happens, the fund may not achieve its
investment objective.
Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.
Risks Related to Investment Strategies
- -----------------------------------------------------
General
Companies in which the fund invests may encounter negative
conditions such as poor market conditions for their products or
services that could leave the companies' unable to continue to
pay dividends at expected levels. Neither the adviser nor the
fund can assure you that a particular level of income will
consistently be achieved.
In addition, the value of the fund's investments that support
your share value can decrease as well as increase. If between
the time you purchase shares and the time you sell shares the
value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of
reasons. For example, changing economic conditions may cause a
decline in value of many or most investments. Particular
industries can face poor market conditions for their products or
services so that companies engaged in those businesses do not
46 Phoenix-Engemann Value 25 Fund
<PAGE>
perform as well as companies in other industries. To the extent
that the fund's investments are affected by general economic
declines and declines in industries that negatively affect the
companies in which the fund invests, fund share values may
decline. Share values can also decline if the specific companies
selected for fund investment fail to perform as the adviser
expects, regardless of general economic trends, industry trends
and other economic factors.
In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.
Limited Number of Investments
Conditions which negatively affect the approximately 25
securities in which the fund invests will have a greater impact
on the fund as compared to a fund that is not limited in the
number of issues it holds. Moreover, the fund may be more
sensitive to changes in the market value of a single issuer or
industry in its portfolio and therefore may present a greater
risk than is usually associated with a more widely diversified
mutual fund.
Special Situations
Special situations often involve much greater risk than ordinary
investment securities. The companies involved often are smaller,
unseasoned companies and the securities may not perform as the
adviser expects. Analysis of special situations is more complex
than for ordinary investments, making it more difficult for the
adviser to accurately predict risk and return.
Impact of the Year 2000 Issue on Fund Investments
The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of an
entity's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the
year 2000. If an entity whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of entities
whose securities are held by the fund.
Phoenix-Engemann Value 25 Fund 47
<PAGE>
Management of The Funds
- --------------------------------------
The Adviser
Roger Engemann & Associates, Inc. ("Engemann") is the investment
adviser to each of the funds and is located at 600 North
Rosemead Boulevard, Pasadena, California 91107. Engemann also
acts as subadviser to two other mutual funds and acts as
investment adviser to institutions and individuals. As of
December 31, 1998, Engemann had $7.8 billion in assets under
management. Engemann has been an investment adviser since 1969.
Subject to the direction of the fund's Board of Trustees,
Engemann is responsible for managing the funds' investment
program and the day-to-day management of the funds' portfolios.
Engemann manages each fund's assets to conform with the
investment policies as described in this prospectus. Each fund
pays Engemann a monthly investment management fee that is
accrued daily against the value of that fund's net assets at the
following rates.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Management Fee 1st $50 Million Next $450 Million Over $500 Million
------------------------------------------------------------------------------
<S> <C> <C> <C>
Balanced Return Fund 0.80% 0.70% 0.60%
------------------------------------------------------------------------------
Global Growth Fund 1.10% 1.00% 0.90%
------------------------------------------------------------------------------
Growth Fund 0.90% 0.80% 0.70%
------------------------------------------------------------------------------
Nifty Fifty Fund 0.90% 0.80% 0.70%
------------------------------------------------------------------------------
Small & Mid-Cap
Growth Fund 1.00% 0.90% 0.80%
------------------------------------------------------------------------------
Value 25 Fund 0.90% 0.80% 0.70%
------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total
management fees of $8,378,334. The ratio of management fees to
average net assets for the fiscal year ended December 31, 1998
was 0.76% for the Balanced Return Fund, 1.10% for the Global
Growth Fund, 0.81% for the Growth Fund, 0.82% for the Nifty
Fifty Fund, 0.97% for the Small & Mid-Cap Growth Fund and 0.90%
for the Value 25 Fund. The advisory fees of each of the funds
are greater than those for most mutual funds; however, the
Trustees have determined that each is comparable to fees charged
by other mutual funds whose investment objectives are similar to
those of the funds.
Portfolio Management
Roger Engemann, James E. Mair and John S. Tilson are primarily
responsible for the day-to-day management of the funds. Mr.
Engemann has been president of Engemann since its inception.
Messrs. Mair and Tilson are both Executive Vice Presidents of
Portfolio Management of Engemann, and both have been with
Engemann since 1983. Messrs. Engemann and Mair have been
Chartered Financial Analysts ("CFAs") since 1972, and Mr. Tilson
has been a CFA since 1974.
48 Phoenix-Engemann Funds
<PAGE>
Lou Abel, Scott Swanson, Ned Brines, James Chen, Yossie Lipsker,
Lou Holtz and Mark Petrie serve as research analysts and
participate as members of the team who are responsible for the
day-to-day management of the funds' portfolios. Messrs. Swanson
and Abel are CFAs and have been with Engemann since 1990 and
1991, respectively. Messrs. Chen and Brines are CFAs and have
been with Engemann since 1994. Mr. Holtz is a CFA and has been
with Engemann since 1996. Messrs. Petrie and Lipsker are CFA
Level III candidates and have been with Engemann since 1992.
Impact of the Year 2000 Issue on Fund Operations
The Trustees have directed management to ensure that the systems
used by service providers (Engemann and its affiliates) in
support of the funds' operations be assessed and brought into
Year 2000 compliance. Based upon preliminary assessments,
Engemann has determined that they will be required to modify or
replace portions of their software so that their computer
systems will properly utilize dates beyond December 31, 1999.
Engemann management believes that the majority of these systems
are already Year 2000 compliant. Engemann believes that with
modifications to existing software and conversions to new
software, the Year 2000 issue will be mitigated. It is
anticipated that such modifications and conversions will be
completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of Engemann
or its affiliates or the fund if such modifications and
conversions are not completed timely.
Engemann will utilize both internal and external resources to
reprogram, or replace, and test the software for Year 2000
modifications. Certain systems are already in the process of
being converted due to previous initiatives and it is expected
that all core systems will be remediated and tested by June
1999. The total cost to become Year 2000 compliant is not an
expense of the funds and is not expected to have a material
impact on the operating results of Engemann.
Pricing of Fund Shares
- -------------------------------------
How is the Share Price determined?
The fund calculates a share price for each class of its shares.
The share price is based on the net assets of the fund and the
number of outstanding shares. In general, the fund calculates
net asset value by:
o adding the values of all securities and other assets of the
fund,
o subtracting liabilities, and
o dividing by the total number of outstanding shares of the
fund.
Phoenix-Engemann Funds 49
<PAGE>
Asset Value: The fund's investments are valued at market value.
If market quotations are not available, the fund determines a
"fair value" for an investment according to rules and procedures
approved by the Trustees. Foreign and domestic debt securities
(other than short-term investments) are valued on the basis of
broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to
reflect the fair value of such securities. Foreign and domestic
equity securities are valued at the last sale price or, if there
has been no sale that day, at the last bid price, generally.
Short-term investments having a remaining maturity of sixty days
or less are valued at amortized cost, which the Trustees have
determined approximates market value.
Liabilities: Class specific expenses, distribution fees, service
fees and other liabilities are deducted from the assets of each
class. Expenses and liabilities that are not class specific
(such as management fees) are allocated to each class in
proportion to each class's net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any
other expenses are deducted from the proportionate interest of
such class in the assets of the fund. The resulting amount for
each class is then divided by the number of shares outstanding
of that class to produce each class's net asset value per share.
The net asset value per share of each class of the fund is
determined on days when the New York Stock Exchange (the "NYSE")
is open for trading as of the close of trading (normally 4:00 PM
eastern time). The fund will not calculate its net asset values
per share on days when the NYSE is closed for trading. Trading
of securities held by the fund in foreign markets may negatively
or positively impact the value of such securities on days when
the fund neither trades securities nor calculates its net asset
values (i.e., weekends and certain holidays).
At what price are shares purchased?
All investments received by the fund's authorized agents prior
to the close of regular trading on the NYSE (normally 4:00 PM
eastern time) will be executed based on that day's net asset
value. Shares credited to your account from the reinvestment of
fund distributions will be in full and fractional shares that
are purchased at the closing net asset value on the next
business day on which the fund's net asset value is calculated
following the dividend record date.
Sales Charges
- ----------------------------
What are the classes and how do they differ?
The fund presently offers three classes of shares that have
different sales and distribution charges (see "Fund Expenses"
previously in this prospectus). For certain classes of shares,
the fund has adopted distribution and service plans allowed
under Rule 12b-1 of the Investment Company Act of 1940 that
authorize the fund to pay distribution and service fees for the
sale of its shares and for
50 Phoenix-Engemann Funds
<PAGE>
services provided to shareholders. Because these fees are paid
out of the Fund's assets on an on-going basis, over time these
fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
What arrangement is best for you?
The different classes permit you to choose the method of
purchasing shares that is most beneficial to you. In choosing a
class, consider the amount of your investment, the length of
time you expect to hold the shares, whether you decide to
receive distributions in cash or to reinvest them in additional
shares, and any other personal circumstances. Depending upon
these considerations, the accumulated distribution and service
fees and contingent deferred sales charges of one class may be
more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought
at the same time. Because distribution and service fees are paid
out of the fund's assets on an ongoing basis, over time these
fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
Class A Shares. If you purchase Class A Shares, you will pay a
sales charge at the time of purchase equal to 4.75% of the
offering price (4.99% of the amount invested). The sales charge
may be reduced or waived under certain conditions. Class A
Shares are not subject to any charges by the fund when redeemed.
Class A Shares have lower distribution and service fees (0.25%)
and pay higher dividends than Class B and C Shares.
Class B Shares. If you purchase Class B Shares, you will not pay
a sales charge at the time of purchase. If you sell your Class B
Shares within the first 5 years after they are purchased, you
will pay a sales charge of up to 5% of your shares' value. See
"Deferred Sales Charge Alternative--Class B and C Shares" below.
This charge declines to 0% over a period of 5 years and may be
waived under certain conditions. Class B shares have higher
distribution and service fees (1.00%) and pay lower dividends
than Class A Shares. Class B Shares automatically convert to
Class A Shares eight years after purchase (six years for Class B
Shares purchased prior to January 20, 1998). Purchases of Class
B Shares may be inappropriate for any investor who may qualify
for reduced sales charges of Class A Shares and anyone who is
over 85 years of age. The underwriter may decline purchases in
such situations.
Class C Shares. If you purchase Class C Shares, you will not pay
a sales charge at the time of purchase. If you sell your Class C
Shares within the first year after they are purchased, you will
pay a sales charge of 1%. See "Deferred Sales Charge
Alternative--Class B and C Shares" below. Class C Shares have
the same distribution and service fees (1.00%) and pay
comparable dividends as Class B Shares. Class C Shares do not
convert to any other class of shares of the fund.
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares is the net asset
value plus a sales charge that varies depending on the size of
your purchase (see "Class A Shares--Reduced Sales Charges:
Combination Purchase Privilege" in the Statement of Additional
Information). Shares purchased
Phoenix-Engemann Funds 51
<PAGE>
based on the automatic reinvestment of income dividends or
capital gains distributions are not subject to any sales
charges. The sales charge is divided between your investment
dealer and the funds' underwriter (Phoenix Equity Planning
Corporation or "PEPCO").
Sales Charge you may pay to purchase Class A Shares
<TABLE>
<CAPTION>
Sales Charge as
a percentage of
--------------------
Amount of Net
Transaction Offering Amount
at Offering Price Price Invested
-------------------------------------------------------
<S> <C> <C>
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 3.00 3.09
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
Deferred Sales Charge Alternative--
Class B and C Shares
Class B and C Shares are purchased without an initial sales
charge; however, shares sold within a specified time period are
subject to a declining contingent deferred sales charge ("CDSC")
at the rates listed below. The sales charge will be multiplied
by the then current market value or the initial cost of the
shares being redeemed, whichever is less. No sales charge will
be imposed on increases in net asset value or on shares
purchased through the reinvestment of income dividends or
capital gains distributions. To minimize the sales charge,
shares not subject to any charge will be redeemed first,
followed by shares held the longest time. To calculate the
amount of shares owned and time period held, all Class B Shares
purchased in any month are considered purchased on the last day
of the preceding month, and all Class C Shares are considered
purchased on the trade date.
Deferred Sales charge you may pay to sell Class B Shares
Year 1 2 3 4 5 6+
----------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
Class B Shares Purchased Prior to January 20, 1998
Class B Shares that were purchased prior to January 20, 1998 are
not subject to the sales load schedule described above but will
continue to be subject to the sales load schedule as it existed
prior to that date. The following is the sales load schedule you
may pay to sell Class B Shares purchased prior to January 20,
1998:
Year 1 2 3 4 5+
----------------------------------------------------------------
CDSC 5% 4% 3% 3% 0%
52 Phoenix-Engemann Funds
<PAGE>
Deferred Sales charge you may pay to sell Class C Shares
Year 1 2+
----------------------------------------------------------------
CDSC 1% 0%
Class C Shares of the Growth Fund, Balanced Return Fund, and
Nifty Fifty Fund purchased prior to January 20, 1998 are not
subject to the 1% CDSC.
Your Account
- ---------------------------
Opening an Account
Your financial advisor can assist you with your initial purchase
as well as all phases of your investment program. If you are
opening an account by yourself, please follow the instructions
outlined below.
Step 1.
Your first choice will be the initial amount you intend to
invest.
Minimum initial investments:
o $25 for individual retirement accounts, or accounts that
use the systematic exchange privilege, or accounts that use
the Investo-Matic program (see below for more information
on the Investo-Matic program).
o There is no initial dollar requirement for defined
contribution plans, profit-sharing plans, or employee
benefit plans. There is also no minimum for reinvesting
dividends and capital gains into another account.
o $500 for all other accounts.
Minimum additional investments:
o $25 for any account.
o There is no minimum for defined contribution plans,
profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains
into an existing account.
Phoenix-Engemann Funds 53
<PAGE>
Step 2.
Your second choice will be what class of shares to buy. The fund
offers three classes of shares for individual investors. Each
has different sales and distribution charges. Because all future
investments in your account will be made in the share class you
choose when you open your account, you should make your decision
carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
Step 3.
Your next choice will be how you want to receive any dividends
and capital gain distributions. Your options are:
o Receive both dividends and capital gain distributions in
additional shares
o Receive dividends in cash and capital gain distributions in
additional shares
o Receive both dividends and capital gain distributions in
cash
No interest will be paid on uncashed distribution checks.
How To Buy Shares
- --------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
To Open An Account
----------------------------------------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
----------------------------------------------------------------------------------------------------------
Complete a New Account Application and send it with a check payable
Through the mail to the fund. Mail them to: State Street Bank, P.O. Box 8301, Boston,
MA 02266-8301.
----------------------------------------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
----------------------------------------------------------------------------------------------------------
Complete the appropriate section on the application and send it with your
By Investo-Matic initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------------------------------------------------------------------------------
</TABLE>
How to Sell Shares
- ---------------------------------
You have the right to have the fund buy back shares at the net
asset value next determined after receipt of a redemption order
by the fund's Transfer Agent or an authorized agent. In the case
of a Class B or C Share redemption, you will be subject to the
applicable deferred sales charge, if any, for such shares.
Subject to certain restrictions, shares may be redeemed by
telephone or
54 Phoenix-Engemann Funds
<PAGE>
in writing. In addition, shares may be sold through securities
dealers, brokers or agents who may charge customary commissions
or fees for their services. The fund does not charge any
redemption fees. Payment for shares redeemed is made within
seven days; however, redemption proceeds will not be disbursed
until each check used for purchases of shares has been cleared
for payment by your bank, which may take up to 15 days after
receipt of the check.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
To Sell Shares
<S> <C>
----------------------------------------------------------------------------------------------------------
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
----------------------------------------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301. Be sure to include the registered owner's name, fund and
account number, number of shares or dollar value you wish to sell.
----------------------------------------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling
(800) 243-1574.
----------------------------------------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------------------------------------------------------------------------------
</TABLE>
Things You Should Know When Selling Shares
- ------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax
purposes) if you redeem shares of the fund. The fund reserves
the right to pay large redemptions "in-kind" (in securities
owned by the fund rather than in cash). Large redemptions are
those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations,
fiduciaries, or retirement plans, or if redemption is requested
by anyone but the shareholder(s) of record. Transfers between
broker-dealer "street" accounts are governed by the accepting
broker-dealer. Questions regarding this type of transfer should
be directed to your financial advisor. Redemption requests will
not be honored until all required documents in proper form have
been received. To avoid delay in redemption or transfer,
shareholders having questions about specific requirements should
contact the fund's Transfer Agent at (800) 243-1574.
Redemptions by Mail
> Send a clear letter of instructions if all of these apply:
o Your shares are registered individually, jointly, or as
custodian under the Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act.
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the
address on record.
> Send a clear letter of instructions with a signature
guarantee when any of these apply:
Phoenix-Engemann Funds 55
<PAGE>
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within
the last 60 days.
o You want the proceeds to go to a different name or
address than on the account.
If you are selling shares held in a corporate or fiduciary
account, please contact the fund's Transfer Agent at (800)
243-1574.
The signature on your request must be guaranteed by an eligible
guarantor institution as defined by the fund's Transfer Agent in
accordance with its signature guarantee procedures. Currently,
such procedures generally permit guarantees by banks, broker
dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and
savings associations.
Selling Shares by Telephone
The Transfer Agent will use reasonable procedures to confirm
that telephone instructions are genuine. Address and bank
account information are verified, redemption instructions are
taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given
by an unauthorized third party that the Transfer Agent
reasonably believed to be genuine.
The Transfer Agent may modify or terminate the telephone
redemption privilege at any time with 60 days notice to
shareholders.
During times of drastic economic or market changes, telephone
redemptions may be difficult to make or temporarily suspended.
Account Policies
- -------------------------------
Account Reinstatement Privilege
For 180 days after you sell your Class A, B, or C Shares, you
can purchase Class A Shares of any fund at net asset value, with
no sales charge, by reinvesting all or part of your proceeds,
but not more. Send your written request to State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301. You can call us at (800)
243-1574 for more information.
Please remember, a redemption and reinvestment are considered to
be a sale and purchase for tax-reporting purposes. Class B
shareholders who have had the contingent deferred sales charge
waived because they are in the Systematic Withdrawal Program are
not eligible for this reinstatement privilege.
56 Phoenix-Engemann Funds
<PAGE>
Redemption of Small Accounts
Due to the high cost of maintaining small accounts, if your
account balance is less than $200, you may receive a notice
requesting you to bring the balance up to $200 within 60 days.
If you do not, the shares in the account will be sold at net
asset value, and a check will be mailed to the address of
record.
Exchange Privileges
You should read the prospectus carefully before deciding to make
an exchange. You can obtain a prospectus from your financial
advisor or by calling us at (800) 243-4361 or accessing our Web
site at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class
of shares; e.g., Class A for Class A.
o Exchanges may be made by phone (800) 243-1574 or by mail
(State Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than
the minimum initial investment required.
o The exchange of shares is treated as a sale and purchase
for federal income tax purposes.
o Because excessive trading can hurt fund performance and
harm other shareholders, the Fund reserves the right to
temporarily or permanently end exchange privileges or
reject an order from anyone who appears to be attempting to
time the market, including investors who request more than
one exchange in any 30-day period. The fund's underwriter
has entered into agreements with certain market timing
firms permitting them to exchange by telephone. These
privileges are limited, and the fund distributor has the
right to reject or suspend them.
Retirement Plans
Shares of the fund may be used as investments under the
following qualified prototype retirement plans: traditional IRA,
rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA, 401(k) plans,
profit-sharing, money purchase pension plans, and 403(b) plans.
For more information, call (800) 243-4361.
Investor Services
- --------------------------------
Investo-Matic is a systematic investment plan that allows you to
have a specified amount automatically deducted from your
checking or savings account and then deposited into your mutual
fund account. Just complete the Investo-Matic Section on the
application and include a voided check.
Phoenix-Engemann Funds 57
<PAGE>
Systematic Exchange allows you to automatically move money from
one Phoenix Fund to another on a monthly, quarterly, semiannual
or annual basis. Shares of one Phoenix Fund will be exchanged
for shares of the same class of another fund at the interval you
select. To sign up, just complete the Systematic Exchange
Section on the application.
Telephone Exchange lets you exchange shares of one fund for the
same class of shares in another fund, using our customer service
telephone service. See the Telephone Exchange Section on the
application.
Systematic Withdrawal Program allows you to periodically redeem
a portion of your account on a predetermined monthly, quarterly,
semiannual, or annual basis. Sufficient shares will be redeemed
on the 15th of the month at the closing net asset value so that
the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or
25th with proceeds directed through Automated Clearing House
(ACH) to your bank. The minimum withdrawal is $25, and minimum
account balance requirements continue. Shareholders in the
program must own fund shares worth at least $5,000.
Tax Status of Distributions
- ------------------------------------------
The fund plans to make distributions from net investment income
at intervals stated on the table below, and to distribute net
realized capital gains, if any, at least annually.
<TABLE>
<CAPTION>
----------------------------------------------------
Fund Dividend Paid
<S> <C>
Balanced Return Fund Annually
----------------------------------------------------
Global Growth Fund Annually
----------------------------------------------------
Growth Fund Annually
----------------------------------------------------
Nifty Fifty Fund Annually
----------------------------------------------------
Small & Mid-Cap Growth Fund Annually
----------------------------------------------------
Value 25 Fund Semiannually
----------------------------------------------------
</TABLE>
Distributions of short-term capital gains and net investment
income are taxable to shareholders as ordinary income. Long-term
capital gains, if any, distributed to shareholders and which are
designated by the fund as capital gains distributions, are
taxable to shareholders as long-term capital gain distributions
regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and
capital gain distributions are paid in additional shares. All
distributions, cash or additional shares, are subject to federal
income tax and may be subject to state, local and other taxes.
58 Phoenix-Engemann Funds
<PAGE>
Financial Highlights
- -----------------------------------
These tables are intended to help you understand the funds'
financial performance over the past five years or since
inception. Certain information reflects financial results for a
single fund share. The total returns in the tables represent the
rate that an investor would have earned or lost on an investment
in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants. Their
report, together with the funds' financial statements, are
included in the funds' most recent Annual Report, which is
available upon request.
Phoenix-Engemann Balanced Return Fund
<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 1.15% 1.0%(2) 1.1%(3) 1.2% 1.8%
Portfolio turnover 124% 40.3% 35.1 % 51.1% 28.2%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(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 shares would have been $.29, 18.98%, 1.7%, and 0.9%,
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 shares would have been $.27, 17.66%, 2.1%, and 1.0%,
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.
Phoenix-Engemann Funds 59
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Balanced Return Fund
<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 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 0.39% 0.3%(2) 0.3%(3) 0.3% 1.3%
Portfolio turnover 124% 40.3% 35.1% 51.1% 28.2%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(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 B shares would have been $.06, 18.15%, 2.5%, 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 B shares would have been $.06, 16.74%, 2.8%, 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 shares was January 3, 1994.
60 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Balanced Return Fund
<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 0.39% 0.3%(2) 0.3%(3) 0.3% 1.3%
Portfolio turnover 124% 40.3% 35.1% 51.1% 28.2%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(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 C shares would have been $.06, 18.11%, 2.5%, 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 C shares would have been $.06, 16.71%, 2.8%, 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 C shares was January 3, 1994.
Phoenix-Engemann Funds 61
<PAGE>
Financial Highlights (continued)
- ---------------------------------------------
Phoenix-Engemann Global Growth Fund
<TABLE>
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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(2) These amounts reflect the impact of a waiver of administration
fees of $708. 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 shares
would have been $(0.19), 11.27%, 2.0%, and (0.9)%,
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 $(0.21),
21.71%, 2.0% and (1.1)%, respectively, $(0.15), 22.88%, 2.3%
and (0.9)%, respectively, and $(0.21), 14.40%, 10.4% (2.3% if
only normal and recurring expenses are taken into account) and
(1.5)%, 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.
(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.
62 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Global Growth Fund
<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(6)
Income from investment operations:(5)
Net investment income (loss) (0.34)(1)(4) (0.35)(1)(2) (0.08)(1)
Net realized and unrealized gain 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(3) 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(4) 2.69% 2.8%(2) 2.7%(7)
Net investment income (loss)(4) (1.59)% (1.7)%(2) (1.9)%(7)
Portfolio turnover 95% 237.2% 220.3%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(2) These amounts reflect the impact of a waiver of administration
fees of $708. 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 B shares
would have been $(0.35), 10.44%, 2.8%, and (1.7)%,
respectively.
(3) 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 period
ended December 31, 1996 has not been annualized.
(4) Includes reimbursement of operating expenses by the investment
adviser of $0.04.
(5) 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.
(6) The beginning net asset value per share of Class B shares
equals the net asset value per share of the Class A shares as
of the first day Class B shares were sold, September 18, 1996.
(7) Annualized.
Phoenix-Engemann Funds 63
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Global Growth Fund
<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(6)
Income from investment operations:(5)
Net investment income (loss) (0.33)(1)(4) (0.37)(1)(2) (0.04)(1)
Net realized and unrealized gain 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(3) 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%(7)
Net investment income (loss) (1.57)% (1.8)%(2) (1.6)%(7)
Portfolio turnover 95% 237.2% 220.3%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(2) These amounts reflect the impact of a waiver of administration
fees of $708. 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 C shares
would have been $(0.37), 10.50%, 2.8%, and (1.8)%,
respectively.
(3) 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 period
ended December 31, 1996 has not been annualized.
(4) Includes reimbursement of operating expenses by the investment
adviser of $0.04.
(5) 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.
(6) The beginning net asset value per share of Class C shares
equals the net asset value per share of the Class A shares as
of the first day Class C shares were sold, October 21, 1996.
(7) Annualized for periods of less than one year.
64 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Growth Fund
<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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(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 income to average net assets for Class A 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 shares would
have been $(0.14), 22.49%, 1.6%, and (0.7)%, 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.
Phoenix-Engemann Funds 65
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Growth Fund
<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)(1) (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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(2) These amounts reflect the impact of a waiver of administration
fees of $18,196. 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 B 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 B shares would
have been $(0.31), 21.52%, 2.4%, 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 is January 3, 1994.
66 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Growth Fund
<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)(1) (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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(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 income to average net assets for 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 C shares would
have been $(0.31), 21.52%, 2.4%, 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 is January 3, 1994.
Phoenix-Engemann Funds 67
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Nifty Fifty Fund
<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 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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(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 income to average net assets for Class A shares
would have been $(0.20), 19.23%, 1.6%, and (0.7)%,
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 income to average net assets for Class A shares
would have been $(0.13), 26.48%, 1.8%, and (0.5)%,
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.
68 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Nifty Fifty Fund
<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)(1) (0.43)(1) (0.42)(1)(2) (0.30)(1)(3) (0.21)(1) (0.14)(1)
Net realized and unrealized gain 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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(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 income to average net assets for Class B shares
would have been $(0.42), 18.33%, 2.4%, 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 income to average net assets for Class B shares
would have been $(0.31), 25.55%, 2.5%, 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 is January 3, 1994.
Phoenix-Engemann Funds 69
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Nifty Fifty Fund
<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)(1) (0.43)(1) (0.42)(1)(2) (0.30)(1)(3) (0.21)(1) (0.15)(1)
Net realized and unrealized gain 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>
----------------
(1) This information was prepared using the average number of
shares outstanding during each year.
(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 income to average net assets for Class C shares
would have been $(0.42), 18.33%, 2.4%, 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 income to average net assets for Class C shares
would have been $(0.31), 25.55%, 2.5%, 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 is January 3, 1994.
70 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
From
Year Ended December 31, Inception
--------------------------------------------------------- 10/10/94 to
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)(6) (0.31)(1)(2) (0.12)(1)(3) 0.22 (1)(3) 0.07(1)(3)
Net realized and unrealized gain 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% 1.8%(2) 1.1%(3) --%(3) --%(3)(5)
Net investment income (loss) (1.39)% (1.4)%(2) (0.7)%(3) 1.5%(3) 2.6%(3)(5)
Portfolio turnover 147% 313.5% 297.1% 121.4% 157.9%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(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 shares would
have been $(0.31), 26.41%, 1.8%, and (1.4)%, 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 $(0.25),
51.35%, 1.9% and (1.4)%, respectively, $(0.11), 23.40%, 2.3%
and (0.8)%, respectively, and $(0.01), 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 period ended
December 31, 1994 has not been annualized.
(5) Annualized.
(6) Includes reimbursement of operating expenses by investment
adviser of $0.01.
Phoenix-Engemann Funds 71
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------
From
Year Ended Inception
December 31, 9/18/96 to
1998 1997 12/31/96
------------- -------- ----------
<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 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 7.52 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(5) 2.53% 2.6%(2) 2.6%(5)
Net investment income (loss)(5) (2.14)% (2.1)%(2) (2.2)%(5)
Portfolio turnover 147% 313.5% 297.1%
<CAPTION>
Class C
-----------------------------------------------------------------
From
Year Ended Inception
December 31, 10/8/96 to
1998 1997 12/31/96
------- -------- ----------
<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)(3) (0.29)(1)
Net realized and unrealized gain 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%(3) 3.12%
Ratios/supplemental data:
Net assets, end of period (thousands) $15,023 $ 8,080 $ 54
Ratio to average net assets of:
Operating expenses(5) 2.53% 2.6%(3) 2.6%(5)
Net investment income (loss)(5) (2.14)% (2.1)%(3) (2.2)%(5)
Portfolio turnover 147% 313.5% 297.1%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(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 B shares would
have been $(0.46), 25.49%, 2.6%, and (2.1)%, respectively.
(3) 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 C shares would
have been $(0.47), 25.49%, 2.6%, and (2.1)%, 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 period ended
December 31, 1996 has 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 the investment
adviser of $0.01.
72 Phoenix-Engemann Funds
<PAGE>
Financial Highlights (continued)
- -----------------------------------------------
Phoenix-Engemann Value 25 Fund
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
From
Year Ended Inception
December 31, 12/17/96 to
1998 1997 12/31/96
------------ -------- -----------
<S> <C> <C> <C>
Net asset value, beginning of
period $ 11.56 $ 10.11 $ 10.00
Income from investment
operations:
Net investment income 0.15(1)(6) 0.17(1)(2) --(1)
Net realized and unrealized
gain (loss) 0.66 1.95 0.11
-------- -------- -------
Total from investment
operations 0.81 2.12 0.11
-------- -------- -------
Less Distributions:
Dividends from net investment
income (0.14) (0.12) --
Dividends from net realized
gains (0.59) (0.55) --
-------- -------- -------
Total distributions (0.73) (0.67) --
-------- -------- -------
Change in net asset value 0.08 1.45 0.11
-------- -------- -------
Net asset value, end of
period $ 11.64 $ 11.56 $ 10.11
======== ======== =======
Total return(3) 7.23% 21.10%(2) 1.10%(6)
Ratios/supplemental data:
Net assets, end of period
(thousands) $ 18,090 $ 19,518 $ 482
Ratio to average net
assets of:
Operating expenses(4) 1.75% 1.8%(2) 1.7%(4)
Net investment income
(loss)(4) 1.25% 1.4%(2) 1.8%(4)
Portfolio turnover 135% 87.7% --%(6)
<CAPTION>
Class B Class C
---------------------------------- -------------------------------
From From
Year Ended Inception Year Ended Inception
December 31, 1/9/97 to December 31, 1/9/97 to
1998 12/31/97 1998 12/31/97
------------ ---------- ------------ ---------
Net asset value, beginning of
period $ 11.53 $ 10.39(5) $ 11.52 $ 10.39(5)
Income from investment
operations:
Net investment income 0.06 (1)(6) 0.08(1)(2) 0.06(1)(6) 0.09(1)(2)
Net realized and unrealized
gain (loss) 0.65 1.67 0.65 1.66
------- ------- ------- -------
Total from investment
operations 0.71 1.75 0.71 1.75
------- ------- ------- -------
Less Distributions:
Dividends from net investment
income (0.06) (0.06) (0.06) (0.07)
Dividends from net realized
gains (0.59) (0.55) (0.59) (0.55)
------- ------- ------- -------
Total distributions (0.65) (0.61) (0.65) (0.62)
------- ------- ------- -------
Change in net asset value 0.06 1.14 0.06 1.13
------- ------- ------- -------
Net asset value, end of
period $ 11.59 $ 11.53 $ 11.58 $ 11.52
======= ======== ======= =======
Total return(3) 6.41% 16.97%(2) 6.42% 17.01%(2)
Ratios/supplemental data:
Net assets, end of period
(thousands) $10,981 $8,799 $6,642 $4,893
Ratio to average net
assets of:
Operating expenses(4) 2.50% 2.6%(4) 2.50% 2.6%(4)
Net investment income
(loss)(4) 0.54% 0.7%(4) 0.52% 0.8%(4)
Portfolio turnover 135% 87.7% 135% 87.7%
</TABLE>
----------------
(1) This information was prepared using the average number of
shares outstanding during each period.
(2) These amounts reflect the impact of a waiver of administration
fees of $789. 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 $0.17, $0.08 and $0.08,
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 periods 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 and
inception (January 9, 1997) through December 31, 1997 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.
Phoenix-Engemann Funds 73
<PAGE>
Additional Information
- -------------------------------------
Statement of Additional Information
The fund has filed a Statement of Additional Information about the fund,
dated May 1, 1999 with the Securities and Exchange Commission. The
Statement contains more detailed information about the fund. It is
incorporated into this prospectus by reference and is legally part of the
prospectus. You may obtain a free copy of the Statement:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
o by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and
Exchange Commission:
o through its internet site (http://www.sec.gov),
o by visiting its Public Reference Room in Washington, DC or
o by writing to its Public Reference Section, Washington, DC 20549-6009
(a fee may be charged).
Information about the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330.
Shareholder Reports
The fund semiannually mails to its shareholders detailed reports
containing information about the fund's investments. The fund's Annual
Report contains a detailed discussion of the market conditions and
investment strategies that significantly affected the fund's performance
from January 1 through December 31. You may request a free copy of the
fund's Annual and Semiannual Reports:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
o by calling (800) 243-4361.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
SEC File Nos. 33-1922 and 811-4506
[recycle] Printed on recycled paper using soybean ink
74 Phoenix-Engemann Funds
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield, CT 06083-2200
[Logo: PHOENIX
INVESTMENT PARTNERS]
PXP 2011 (5/99)
<PAGE>
PHOENIX-ENGEMANN GROWTH FUND PHOENIX-ENGEMANN NIFTY-FIFTY FUND
PHOENIX-ENGEMANN BALANCED RETURN FUND
PHOENIX-ENGEMANN GLOBAL GROWTH FUND
PHOENIX-ENGEMANN SMALL & MID-CAP FUND
PHOENIX-ENGEMANN VALUE 25 FUND
600 North Rosemead Boulevard
Pasadena, California 91107-2133
Statement of Additional Information
May 1, 1999
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current prospectus of The
Phoenix-Engemann Funds (the "Trust"), dated May 1, 1999 (the "Prospectus"), and
should be read in conjunction with it. Such Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
THE TRUST ................................................................. 1
INVESTMENT OBJECTIVES AND POLICIES ........................................ 1
INVESTMENT RESTRICTIONS ................................................... 9
PERFORMANCE INFORMATION ................................................... 11
PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 13
PORTFOLIO TURNOVER ........................................................ 14
SERVICES OF THE ADVISER ................................................... 14
NET ASSET VALUE ........................................................... 15
HOW TO BUY SHARES ......................................................... 16
ALTERNATIVE PURCHASE ARRANGEMENTS ......................................... 16
INVESTOR ACCOUNT SERVICES ................................................. 18
HOW TO REDEEM SHARES ...................................................... 19
TAX SHELTERED RETIREMENT PLANS ............................................ 20
DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................ 20
THE DISTRIBUTOR ........................................................... 21
DISTRIBUTION PLANS ........................................................ 23
MANAGEMENT OF THE TRUST ................................................... 24
OTHER INFORMATION ......................................................... 27
APPENDIX .................................................................. 28
</TABLE>
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunications Device (TTY)-(800) 243-1926
PXP 2011 (5/99)
<PAGE>
THE TRUST
The Phoenix-Engemann Funds (the "Trust") (formerly called the "Pasadena
Investment Trust") is a diversified open-end management investment company
which was organized under Massachusetts law in 1986 as a business trust. The
name change of the Trust was made on September 3, 1997 in connection with the
merger of an acquisition subsidiary of Phoenix Investment Partners, Ltd. and
Pasadena Capital Corporation. The Trust presently comprises six series:
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, each a "Fund" and, collectively, the "Funds."
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is deemed to be a fundamental policy
which may not be changed without the approval of the holders of a majority of
the outstanding shares of each Fund. Investment restrictions described in this
Statement of Additional Information as a fundamental policy may not be changed
without the approval of such Fund's shareholders. Notwithstanding the
foregoing, certain investment restrictions affect more than one series of the
Trust and therefore modifications may require the consent of other
shareholders. There is no assurance that any Fund will meet its investment
objective.
Foreign Securities
Each Fund may invest (directly and/or through Depositary Receipts) in
securities principally traded in markets outside the United States. Foreign
investments can be affected favorably or unfavorably by changes in currency
exchange rates and in exchange control regulations. There may be less publicly
available information about a foreign company than about a U.S. company, and
the information available may not be of the same quality. Foreign companies
also may not be subject to accounting, auditing and financial reporting
standards and requirements comparable to those applicable to U.S. companies.
Securities of some foreign companies are less liquid or more volatile than
securities of U.S. companies, and foreign brokerage commissions and custodian
fees are generally higher than in the United States.
Investments in foreign securities can involve other risks different from
those affecting U.S. investments, including local political or economic
developments, expropriation or nationalization of assets and imposition of
withholding taxes on dividend or interest payments. To hedge against possible
variations in currency exchange rates, a Fund (except the Growth Fund, the
Nifty Fifty Fund and the Balanced Return Fund) may purchase and sell forward
currency exchange contracts. These are agreements to purchase or sell specified
currencies at specified dates and prices. A Fund will only purchase and sell
forward currency exchange contracts in amounts which the Adviser deems
appropriate to hedge existing or anticipated portfolio positions and will not
use such forward contracts for speculative purposes. Foreign securities, like
other assets of a Fund, will be held by such Fund's custodian or by an
authorized subcustodian. While none of the Growth, Nifty Fifty and Balanced
Return Funds anticipates investing a significant portion of its assets in
foreign securities, each of these Funds may invest up to 15% of the value of
its total assets (at time of purchase, giving effect thereto) in the securities
of foreign issuers and obligors. The Small & Mid-Cap Growth Fund may invest up
to 50% of its assets, the Value 25 Fund may invest up to 25% of its assets and
the Global Growth Fund may invest up to 100% of its assets in foreign
securities.
Depositary Receipts. Each Fund's investments in the securities of foreign
issuers may be in the form of Depositary Receipts ("DRs"), e.g., American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global
Depositary Receipts ("GDRs"), Continental Depositary Receipts ("CDRs"), or
other forms of DRs. DRs are receipts typically issued by a United States or
foreign bank or trust company which evidence ownership of underlying securities
issued by a foreign corporation. The Fund may invest in DRs through "sponsored"
or "unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the underlying security and a depository, whereas a depository may
establish an unsponsored facility without participation by the issuer of the
deposited security. The depository of unsponsored DRs generally bears all the
costs of such facilities and the depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Foreign Currency Transactions
In General. As described below, each Fund (except the Growth Fund, the
Nifty Fifty Fund and the Balanced Return Fund) may engage in certain foreign
currency exchange and option transactions. These transactions involve
investment risks and transaction costs to which a Fund would not be subject
absent the use of these strategies. If the Adviser's predictions of movements
in the direction of securities prices or currency exchange rates are
inaccurate, the adverse consequences to a Fund may leave such Fund in a worse
position than if it had not used such strategies. Risks inherent in the use of
option and foreign currency forward and futures contracts include: (1)
dependence on the Adviser's ability to correctly predict movements in the
direction of securities prices and currency exchange rates; (2) imperfect
correlation between the price of options and futures contracts and movements in
the prices of the securities or currencies being hedged; (3) the fact that the
skills needed to use these strategies are different from those needed to select
portfolio securities; (4) the possible absence of a liquid secondary market for
any particular instrument at any time; and (5) the possible need to defer
closing out certain hedged positions to avoid adverse tax consequences.
1
<PAGE>
Each Fund's ability to enter into futures contracts is also limited by the
requirements of the Internal Revenue Code of 1986, as amended, (the "Code") for
qualification as a regulated investment company.
The Global Growth Fund, Small & Mid-Cap Growth Fund and Value 25 Fund may
engage in currency exchange transactions to protect against uncertainty in the
level of future currency exchange rates. In addition, each Fund may write
covered put and call options on foreign currencies for the purpose of
increasing its return.
Generally, each of the above Funds may engage in both "transaction
hedging" and "position hedging." When it engages in transaction hedging, a Fund
enters into foreign currency transactions with respect to specific receivables
or payables, generally arising in connection with the purchase or sale of
portfolio securities. A Fund will engage in transaction hedging when it desires
to "lock in" the U.S. dollar price of a security it has agreed to purchase or
sell, or the U.S. dollar equivalent of a dividend or interest payment in a
foreign currency. By transaction hedging, a Fund will attempt to protect itself
against a possible loss resulting from an adverse change in the exchange rate
between the U.S. dollar and the applicable foreign currency during the period
between the date on which the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received.
Each of the above Funds may purchase or sell a foreign currency on a spot
(or cash) basis at the prevailing spot rate in connection with the settlement
of transactions in portfolio securities denominated in that foreign currency.
Each Fund may also enter into contracts to purchase or sell foreign currencies
at a future date ("forward contracts") and purchase and sell foreign currency
futures contracts.
For transaction hedging purposes, each of the above Funds may also
purchase exchange-listed and over-the-counter put and call options on foreign
currency futures contracts and on foreign currencies. A put option on a futures
contract gives a Fund the right to assume a short position in the futures
contract until the expiration of the option. A put option on a currency gives a
Fund the right to sell the currency at an exercise price until the expiration
of the option. A call option on a futures contract gives a Fund the right to
assume a long position in the futures contract until the expiration of the
option. A call option on a currency gives a Fund the right to purchase the
currency at the exercise price until the expiration of the option.
When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which its portfolio securities are denominated (or an increase in
the values of currency for securities which such Fund expects to purchase, when
such Fund holds cash or short-term investments). In connection with position
hedging, each of the Funds may purchase put or call options on foreign currency
and on foreign currency futures contracts and buy or sell forward contracts and
foreign currency futures contracts. Each Fund may also purchase or sell foreign
currency on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is also impossible to forecast with precision the market value of
portfolio securities at the expiration or maturity of a forward or futures
contract. Accordingly, it may be necessary for a Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security or securities being hedged is less than the
amount of foreign currency such Fund is obligated to deliver and a decision is
made to sell the security or securities and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security or
securities if the market value of such security or securities exceeds the
amount of foreign currency a Fund is obligated to deliver.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which a Fund owns or intends to purchase or
sell. They simply establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged currency, they
tend to limit any potential gain which might result from the increase in value
of such currency.
Each of the above Funds may seek to increase its return or to offset some
of the costs of hedging against fluctuations in currency exchange rates by
writing covered put options and covered call options on foreign currencies. A
Fund receives a premium from writing a put or call option, which increases such
Fund's current return if the option expires unexercised or is closed out at a
net profit. 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.
A Fund's currency hedging transactions may call for the delivery of one
foreign currency in exchange for another foreign currency and may at times not
involve currencies in which its portfolio securities are then denominated. The
Adviser will engage in such "cross hedging" activities when it believes that
such transactions provide significant hedging opportunities for a Fund. Cross
hedging transactions by a Fund involve the risk of imperfect correlation
between changes in the values of the currencies to which such transactions
relate and changes in the value of the currency or other asset or liability
which is the subject of the hedge.
2
<PAGE>
None of the Funds is a commodity pool. The Funds' transactions in futures
and options thereon as described herein will constitute bona fide hedging or
other permissible transactions under regulations promulgated by the Commodity
Futures Trading Commission ("CFTC"). In addition, no Fund may engage in such
transactions if the sum of the amount of initial margin deposits and premiums
paid for unexpired futures and options thereon would exceed 5% of the value of
such Fund's net assets, with certain exclusions as defined in the applicable
CFTC rules. At the time of purchase of a foreign currency exchange contract, a
foreign currency futures contract or related option, liquid assets, such as
cash, U.S. government securities or other appropriate high-grade debt
obligations, marked to market daily equal to the market value of the foreign
currency contract or related option minus the Fund's initial margin deposit
will be deposited in a pledged account with the Funds' custodian to
collateralize the position and thereby ensure that it is not leveraged.
Currency forward and futures contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract as agreed by the parties, at a price set at the time of the
contract. The holder of a cancelable forward contract has the unilateral right
to cancel the contract at maturity by paying a specified fee. The contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized
contract for the future delivery of a specified amount of a foreign currency at
a future date at a price set at the time of the contract. Foreign currency
futures contracts traded in the United States are designed by and traded on
exchanges regulated by the CFTC, such as the New York Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in a given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, a Fund either may accept
or make delivery of the currency specified in the contract, or at or prior to
maturity enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original
forward contract. Closing transactions with respect to futures contracts are
effected on a commodities exchange; a clearing corporation associated with the
exchange assumes responsibility for closing out such contracts.
Although each Fund (except the Growth Fund, the Nifty Fifty Fund and the
Balanced Return Fund) intends to purchase or sell foreign currency futures
contracts only on exchanges or boards of trade where there appears to be an
active market, there is no assurance that a market on an exchange or board of
trade will exist for any particular contract or at any particular time. In such
event, it may not be possible to close a futures position and, in the event of
adverse price movements, the Fund would continue to be required to make daily
cash payments of variation margin.
Foreign currency options. In general, options on foreign currencies
operate similarly to options on securities and are subject to many similar
risks. Foreign currency options are traded primarily in the over-the-counter
market, although options on foreign currencies have recently been listed on
several exchanges. Options are traded not only on the currencies of individual
nations, but also on the European Currency Unit, which is composed of amounts
of a number of currencies and is the official medium of exchange of the
European Community's European Monetary System.
Each Fund (except the Growth, Nifty Fifty and Balanced Return Funds) will
only purchase or write foreign currency options when the Fund's Adviser
believes that a liquid market exists for such options. There can be, however,
no assurance that a liquid market will exist for a particular option at any
specific time. Options on foreign currencies are affected by all of those
factors which influence foreign exchange rates and investments generally.
The value of any currency, including U.S. dollars and foreign currencies,
may be affected by complex political and economic factors applicable to the
issuing country. In addition, the exchange rates of foreign currencies (and
therefore the values of foreign currency options) may be affected
significantly, fixed, or supported directly or indirectly, by U.S. and foreign
government actions. Government intervention may increase risks involved in
purchasing or selling foreign currency options, since exchange rates may not be
free to fluctuate in response to other market forces.
The value of a foreign currency option reflects the value of an exchange
rate, which in turn reflects the relative values of two currencies, generally
the U.S. dollar and the foreign currency in question. Because foreign currency
transactions occurring in the interbank market involve substantially larger
amounts than those that may be involved in the exercise of foreign currency
options, investors may be disadvantaged by having to deal in an odd-lot market
for the underlying foreign currencies in connection with options at prices that
are less favorable than for round lots. Foreign governmental restrictions or
taxes could result in adverse changes in the cost of acquiring or disposing of
foreign currencies.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information
3
<PAGE>
is generally representative of very large round-lot transactions in the
interbank market and thus may not reflect exchange rates for smaller odd- lot
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that cannot be reflected in the options markets.
Settlement procedures. Settlement procedures relating to the Funds'
investments in foreign securities and to the Funds' foreign currency exchange
transactions may be more complex than settlements with respect to investments
in debt or equity securities of U.S. issuers, and may involve certain risks not
present in the Funds' domestic investments. For example, settlement of
transactions involving foreign securities or foreign currency may occur within
a foreign country, and a Fund may be required to accept or make delivery of the
underlying securities or currency in conformity with any applicable U.S. or
foreign restrictions or regulations, and may be required to pay any fees, taxes
or charges associated with such delivery. Such investments may also involve the
risk that an entity involved in the settlement may not meet its obligations.
Settlement procedures in many foreign countries are less established than those
in the United States, and some foreign country settlement periods can be
significantly longer than those in the United States.
Foreign currency conversion. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to a
Fund at one rate, while offering a lesser rate of exchange should such Fund
desire to resell that currency to the dealer.
Futures Contracts and Related Options
A financial futures contract sale creates an obligation by the seller to
deliver the type of financial instrument called for in the contract in a
specified delivery month for a stated price. A financial futures contract
purchase creates an obligation by the purchaser to take delivery of the type of
financial instrument called for in the contract in a specified delivery month
at a stated price. The specific instruments delivered or taken, respectively,
at settlement date are not determined until on or near that date. The
determination is made in accordance with the rules of the exchange on which the
futures contract sale or purchase was made. Futures contracts are traded in the
United States only on commodity exchanges or boards of trade--known as
"contract markets"--approved for such trading by the CFTC, and must be executed
through a futures commission merchant or brokerage firm which is a member of
the relevant contract market. None of the Funds that can invest in futures
contracts and related options will invest more than 5% of its net assets in
such contracts and options.
No Fund will deal in commodity contracts per se, and the Global Growth,
Small & Mid-Cap Growth and Value 25 Funds will deal only in futures contracts
involving financial instruments. Although futures contracts by their terms call
for actual delivery or acceptance of securities, in most cases the contracts
are closed out before the settlement date without the making or taking of
delivery. Closing out a futures contract sale is effected by purchasing a
futures contract for the same aggregate amount of the specific type of
financial instrument or commodity with the same delivery date. If the price of
the initial sale of the futures contract exceeds the price of the offsetting
purchase, the seller is paid the difference and realizes a gain. Conversely, if
the price of the offsetting purchase exceeds the price of the initial sale, the
seller realizes a loss. Similarly, the closing out of a futures contract
purchase is effected by the purchaser's entering into a futures contract sale.
If the offsetting sale price exceeds the purchase price, the purchaser realizes
a gain, and if the purchase price exceeds the offsetting sale price, he
realizes a loss. Futures contracts traded on an exchange approved by the CFTC
are "marked to market" at the end of each year, whether or not they are closed
out. In general, 40% of the gain or loss arising from the closing out or
marking to market of a futures contract traded on an exchange approved by the
CFTC is treated as short-term capital gain or loss, and 60% is treated as
long-term capital gain or loss.
Unlike when a Fund purchases or sells a security, no price is paid or
received by such Fund upon the purchase or sale of a futures contract. Upon
entering into a contract, such Fund is required to deposit with its custodian
in a segregated account in the name of the futures broker an amount of cash
and/or certain liquid securities. This amount is known as "initial margin." The
nature of initial margin in futures transactions is different from that of
margin in security transactions in that futures contract margin does not
involve the borrowing of funds to finance the transactions. Rather, initial
margin is similar to a performance bond or good faith deposit which is returned
to such Fund upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Futures contracts also involve brokerage
costs.
Subsequent payments, called "variation margin," to and from the broker (or
the custodian) are made on a daily basis as the price of the underlying
security or commodity fluctuates, making the long and short positions in the
futures contract more or less valuable, a process known as "marking to the
market." For example, when a Fund has purchased a futures contract on a
security and the price of the underlying security has risen, that position
would increase in value and such Fund would receive from the broker a variation
margin payment based on that increase in value. Conversely, when a Fund has
purchased a security futures contract and the price of the underlying security
has declined, the position would be less valuable and such Fund would be
required to make a variation margin payment to the broker.
A Fund may elect to close some or all of its futures positions at any time
prior to their expiration in order to reduce or eliminate a hedge position then
currently held by such Fund. A Fund may close its positions by taking opposite
positions which will operate
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to terminate such Fund's position in the futures contracts. Final
determinations of variation margin are then made, additional cash is required
to be paid by or released to such Fund, and such Fund realizes a loss or a
gain. Such closing transactions involve additional commission costs.
At the time of purchase of a financial futures contract or a call option
on a futures contract, liquid assets, such as cash, U.S. government securities
or other appropriate high-grade debt obligations, marked to market daily equal
to the market value of the futures contract minus the Fund's initial margin
deposit will be deposited in a pledged account with the Funds' custodian to
collateralize the position and thereby ensure that it is not leveraged.
Options on futures contracts. Each Fund (except the Growth Fund, the Nifty
Fifty Fund and the Balanced Return Fund) may purchase and write put and call
options on futures contracts it may buy or sell and enter into closing
transactions with respect to such options to terminate existing positions.
Options on future contracts give the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at the specified
option exercise price at any time during the period of the option. Each of the
above Funds may use options on futures contracts in lieu of writing or buying
options directly on the underlying securities or purchasing and selling the
underlying futures contracts. For example, to hedge against a possible decrease
in the value of its portfolio securities, a Fund may purchase put options or
write call options on futures contracts rather than selling futures contracts.
Similarly, a Fund may purchase call options or write put options on futures
contracts as a substitute for the purchase of futures contracts to hedge
against a possible increase in the price of securities which such Fund expects
to purchase. Such options generally operate in the same manner as options
purchased or written directly on the underlying investments.
As with options on securities, the holder or writer of an option may
terminate its position by selling or purchasing an offsetting option. There is
no guarantee that such closing transactions can be effected.
The Global Growth, Small & Mid-Cap Growth and Value 25 Funds will be
required to deposit initial margin and maintenance margin with respect to put
and call options on futures contracts written by such Funds pursuant to
brokers' requirements similar to those described above in connection with the
discussion of futures contracts.
Risks of transactions in futures contracts and related options. Successful
use of futures contracts by a Fund is subject to the Adviser's ability to
predict movements in the direction of interest rates and other factors
affecting securities markets. For example, if a Fund has hedged against the
possibility of decline in the values of its investments and the values of its
investments increase instead, such Fund will lose part or all of the benefit of
the increase through payments of daily maintenance margin. A Fund may have to
sell investments at a time when it may be disadvantageous to do so in order to
meet margin requirements. The loss from investing in futures transactions is
potentially unlimited.
Compared to the purchase or sale of futures contracts, the purchase of put
or call options on futures contracts involves less potential risk to a Fund
because the maximum amount at risk is the premium paid for the options (plus
transaction costs). However, there may be circumstances when the purchase of a
put or call option on a futures contract would result in a loss to a Fund when
the purchase or sale of a futures contract would not, such as when there is no
movement in the prices of the hedged investments. The writing of an option on a
futures contract involves risks similar to those risks relating to the sale of
futures contracts.
There is no assurance that higher than anticipated trading activity or
other unforeseen events might not, at times, render certain market clearing
facilities inadequate, and thereby result in the institution by exchanges of
special procedures which may interfere with the timely execution of customer
orders.
To reduce or eliminate a hedge position held by a Fund, such Fund may seek
to close out a position. The ability to establish and close out positions will
be subject to the development and maintenance of a liquid secondary market. It
is not certain that this market will develop or continue to exist for a
particular futures contract or option. Reasons for the absence of a liquid
secondary market on an exchange include the following: (i) there may be
insufficient trading interest in certain contracts or options; (ii)
restrictions may be imposed by an exchange on opening transactions or closing
transactions or both; (iii) trading halts, suspensions or other restrictions
may be imposed with respect to particular classes or series of contracts or
options, or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange
or a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of contracts or options (or a particular class or series of contracts or
options), in which event the secondary market on that exchange for such
contracts or options (or in the class or series of contracts or options) would
cease to exist, although outstanding contracts or options on the exchange that
had been issued by a clearing corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.
Index futures contracts. An index futures contract is a contract to buy or
sell units of an index at a specified future date at a price agreed upon when
the contract is made. Entering into a contract to buy units of an index is
commonly referred to as buying or purchasing a contract or holding a long
position in the index. Entering into a contract to sell units of an index is
commonly referred to as selling a contract or holding a short position. A unit
is the current value of the index. Each of the Global Growth, Small
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& Mid-Cap Growth and Value 25 Funds may enter into stock index futures
contracts, debt index futures contracts, or other index futures contracts
appropriate to its objective. Each of these Funds may also purchase and sell
options on index futures contracts.
For example, the Standard & Poor's Composite 500 Stock Price Index ("S&P
500") is composed of 500 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 500 assigns relative weightings to the
common stocks included in the index, and the value fluctuates with changes in
the market values of those common stocks. In the case of the S&P 500, contracts
are to buy or sell 500 units. Thus, if the value of the S&P 500 were $150, one
contract would be worth $75,000 (500 units x $150). A stock index futures
contract specifies that no delivery of the actual stocks making up the index
will take place. Instead, settlement in cash must occur upon the termination of
the contract, with the settlement being the difference between the contract
price and the actual level of the stock index at the expiration of the
contract. For example, if a Fund enters into a futures contract to buy 500
units of the S&P 500 at a specified future date at a contract price of $150 and
the S&P 500 is at $154 on that future date, the Fund will gain $2,000 (500
units x gain of $4 per unit). If a Fund enters into a futures contract to sell
500 units of the stock index at a specified future date at a contract price of
$150 and the S&P 500 is at $152 on that future date, the Fund will lose $1,000
(500 units x loss of $2 per unit).
There are several risks in connection with the use by the Funds of index
futures as a hedging device. One risk arises because of the imperfect
correlation between movements in the prices of the index futures and movements
in the prices of securities which are the subject of the hedge. The Funds'
Adviser will, however, when engaging in this type of activity, attempt to
reduce this risk by buying or selling, to the extent possible, futures on
indices the movements of which will, in its judgment, have a significant
correlation with movements in the prices of the securities sought to be hedged.
Successful use of index futures by a Fund for hedging purposes is also
subject to the Adviser's ability to predict movements in the direction of the
market. It is possible that, where a Fund has sold futures to hedge its
portfolio against a decline in the market, the index on which the futures are
written may advance and the value of securities held in such Fund's portfolio
may decline. If this occurred, such Fund would lose money on the futures and
also experience a decline in value in its portfolio securities. It is also
possible that, if a Fund has hedged against the possibility of a decline in the
market adversely affecting securities held in its portfolio and securities
prices increase instead, such Fund will lose part or all of the benefit of the
increased value of those securities it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
such Fund has insufficient cash, it may have to sell securities to meet daily
variation margin requirements at a time when it is disadvantageous to do so.
In addition to the possibility that there may be an imperfect correlation,
or no correlation at all, between movements in the index futures and the
portion of the portfolio being hedged, the prices of index futures may not
correlate perfectly with movements in the underlying index due to certain
market distortions. First, all participants in the futures market are subject
to margin deposit and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close futures contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, margin requirements in the futures market
are less onerous than margin requirements in the securities market, and as a
result the futures market may attract more speculators than the securities
market does. Increased participation by speculators in the futures market may
also cause temporary price distortions. Due to the possibility of price
distortions in the futures market and also because of the imperfect correlation
between movements in the index and movements in the prices of index futures,
even a correct forecast of general market trends may not result in a successful
hedging transaction over a short time period.
Options on stock index futures. Options on stock index futures are similar
to options on securities except that options on index futures give the
purchaser the right, in return for the premium paid, to assume a position in an
index futures contract (a long position if the option is a call and a short
position if the option is a put) at a specified exercise price at any time
during the period of the option. Upon exercise of the option, the delivery of
the futures position by the writer of the option to the holder of the option
will be accompanied by delivery of the accumulated balance in the writer's
futures margin account which represents the amount by which the market price of
the index futures contract, at exercise, exceeds (in the case of a call) or is
less than (in the case of a put) the exercise price of the option on the index
future. If an option is exercised on the last trading day prior to its
expiration date, the settlement will be made entirely in cash equal to the
difference between the exercise price of the option and the closing level of
the index on which the future is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
Options on Indices
As an alternative to purchasing put and call options on index futures,
each of the Global Growth, Small & Mid-Cap Growth and Value 25 Funds may
purchase and sell put and call options on the underlying indices themselves.
Such options would be used in a manner identical to the use of options on index
futures.
Index Warrants
Each Fund (except the Growth Fund, the Nifty Fifty Fund and the Balanced
Return Fund) may purchase put warrants and call warrants whose values vary
depending on the change in the value of one or more specified securities
indices ("index warrants"). Index warrants are generally issued by banks or
other financial institutions and give the holder the right, at any time during
the term of the warrant, to receive upon exercise of the warrant a cash payment
from the issuer based on the value of the underlying
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index at the time of exercise. In general, if the value of the underlying index
rises above the exercise price of the index warrant, the holder of a call
warrant will be entitled to receive a cash payment from the issuer upon
exercise based on the difference between the value of the index and the
exercise price of the warrant; if the value of the underlying index falls, the
holder of a put warrant will be entitled to receive a cash payment from the
issuer upon exercise based on the difference between the exercise price of the
warrant and the value of the index. The holder of a warrant would not be
entitled to any payments from the issuer at any time when, in the case of a
call warrant, the exercise price is greater than the value of the underlying
index, or, in the case of a put warrant, the exercise price is less than the
value of the underlying index. If a Fund were not to exercise an index warrant
prior to its expiration, then such Fund would lose the amount of the purchase
price paid by it for the warrant.
A Fund will normally use index warrants in a manner similar to its use of
options on securities indices. The risks of a Fund's use of index warrants are
generally similar to those relating to its use of index options. Unlike most
index options, however, index warrants are issued in limited amounts and are
not obligations of a regulated clearing agency, but are backed only by the
credit of the bank or other institution which issues the warrant. Also, index
warrants generally have longer terms than index options. Although each Fund
will normally invest only in exchange listed warrants, index warrants are not
likely to be as liquid as certain index options backed by a recognized clearing
agency. In addition, the terms of index warrants may limit a Fund's ability to
exercise the warrants at such time, or in such quantities, as the Fund would
otherwise wish to do.
Securities Loans
Each Fund may make secured loans of its portfolio securities amounting to
not more than 25% of its total assets, thereby increasing its total return. The
risks in lending portfolio securities, as with other extensions of credit,
consist of possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. As a matter of
policy, securities loans are made to broker-dealers pursuant to agreements
requiring that loans be continuously secured by collateral consisting of cash
or high-grade short-term debt obligations at least equal at all times to the
value of the securities on loan, "marked-to-market" daily. The borrower pays to
such Fund an amount equal to any dividends or interest received on securities
lent. A Fund retains all or a portion of the interest received on investment of
the cash collateral or receives a fee from the borrower. Although voting
rights, or rights to consent, with respect to the loaned securities pass to the
borrower, a Fund retains the right to call the loans at any time on reasonable
notice, and it will do so to enable the Fund to exercise the voting rights on
any matters materially affecting the investment. A Fund may also call such
loans in order to sell securities.
Forward Commitments
Each Fund (except the Growth Fund, the Nifty Fifty Fund and the Balanced
Return Fund) may enter into contracts to purchase securities for a fixed price
at a future date beyond customary settlement time ("forward commitments") if
the Fund holds, and maintains until settlement date in a segregated account,
cash or high-grade debt obligations in an amount sufficient to meet the
purchase price, or if the Fund enters into offsetting contracts for the forward
sale of other securities it owns. Forward commitments may be considered
securities in themselves, and involve a risk of loss if the value of the
security to be purchased declines prior to the settlement date, which risk is
in addition to the risk of decline in the value of the Fund's other assets.
Where such purchases are made through dealers, the Fund relies on the dealer to
consummate the sale. The dealer's failure to do so may result in the loss to
the Fund of an advantageous yield or price. Although each Fund will generally
enter into forward commitments with the intention of acquiring securities for
its portfolio or for delivery pursuant to options contracts it has entered
into, such Fund may dispose of a commitment prior to settlement if the Adviser
deems it appropriate to do so. A Fund may realize short-term profits or losses
upon the sale of forward commitments.
Illiquid Securities
Each of the Global Growth, Small & Mid-Cap Growth, and Value 25 Funds may
invest up to 15% and each of the Growth, Nifty Fifty and Balanced Return Funds
may invest up to 10% of the value of its net assets in securities as to which a
liquid trading market does not exist, provided such investments are consistent
with such Fund's objective and other policies. Such securities may include
securities that are not readily marketable, such as certain securities that are
subject to legal or contractual restrictions on resale, repurchase agreements
providing for settlement in more than seven days after notice, certain options
traded in the over-the-counter market and securities used to cover such
options. As to these securities, a Fund is subject to a risk that should the
Fund desire to sell them when a ready buyer is not available at a price the
Fund deems representative of their value, the value of the Fund could be
adversely affected. When purchasing securities that have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), and are not
readily marketable, each Fund will endeavor to obtain the right to registration
at the expense of the issuer. Generally, there will be a lapse of time between
a Fund's decision to sell any such security and the registration of the
security permitting sale. During any such period, the price of the securities
will be subject to market fluctuations. However, if a substantial market of
qualified institutional buyers develops pursuant to Rule 144A under the 1933
Act for certain unregistered securities held by a Fund, such Fund intends to
treat such securities as liquid securities in accordance with procedures
approved by the Trust's Board of Trustees. Because it is not possible to
predict with any assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Board of Trustees has directed the Adviser to
monitor carefully any Fund investments in such securities with particular
regard to trading activity, availability or reliable price information and
other relevant
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information. To the extent that, for a period of time, qualified institutional
buyers cease purchasing such restricted securities pursuant to Rule 144A, a
Fund's investing in such securities may have the effect of increasing the level
of illiquidity in the Fund's portfolio during such period.
Repurchase Agreements
Each Fund may, for temporary defensive purposes, invest its assets in
eligible U.S. Government securities and concurrently enter into repurchase
agreements with respect to such securities. Under such agreements, the seller
of the security agrees to repurchase it at a mutually agreed upon time and
price. The repurchase price may be higher than the purchase price, the
difference being income to the Fund, or the purchase and repurchase prices may
be the same, with interest at a stated rate due to the Fund together with the
repurchase price on repurchase. In either case, the income to the Fund is
unrelated to the interest rate on the U.S. Government security itself. Such
repurchase agreements will be made only with banks with assets of $1 billion or
more that are insured by the Federal Deposit Insurance Corporation or with
Government securities dealers recognized as primary dealers by the Federal
Reserve Board and registered as broker-dealers with the SEC or exempt from such
registration. In addition, to the extent a Fund has over $10 million in assets,
the Fund will limit the amount of its transactions with any one bank or
Government securities dealer to a maximum of 25% of its assets. Any repurchase
agreements entered into by a Fund will be of short duration, from overnight to
one week, although the underlying securities generally have longer maturities.
No Fund may enter into a repurchase agreement with more than seven days to
maturity if, as a result, more than 10% of the value of the Growth, Nifty Fifty
or Balanced Return Funds' or 15% of the value of the Global Growth, Small &
Mid-Cap Growth or Value 25 Funds' net assets would be invested in such
repurchase agreements and other illiquid assets.
For purposes of the Investment Company Act of 1940 (the "1940 Act"), a
repurchase agreement is deemed to be a loan from a Fund to the seller of the
U.S. Government security subject to the repurchase agreement. In the event of
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the U.S. Government security before its repurchase under a repurchase
agreement, a Fund may encounter delays and incur costs before being able to
sell the security. Delays may involve loss of interest or a decline in price of
the U.S. Government security. If a court characterizes the transaction as a
loan and the Fund has not perfected a security interest in the U.S. Government
security, the Fund may be required to return the security to the seller's
estate and be treated as an unsecured creditor of the seller. As an unsecured
creditor, the Fund would be at risk of losing some or all of the principal and
income involved in the transaction. As with any unsecured debt instrument
purchased for a Fund, the Adviser seeks to minimize the risk of loss through
repurchase agreements by analyzing the creditworthiness of the obligor, in this
case the seller of the U.S. Government security.
Apart from the risk of bankruptcy or insolvency proceedings, there is also
the risk that the seller may fail to repurchase the security. However, each
Fund will always receive as collateral for any repurchase agreement to which it
is a party U.S. Government securities acceptable to it, the market value of
which is equal to at least 100% of the amount invested by the Fund plus accrued
interest, and the Fund will make payment against such securities only upon
physical delivery or evidence of book entry transfer to the account of its
Custodian or other entity authorized by the Trust's Board of Trustees to have
custody for purposes of repurchase agreement transactions. If the market value
of the U.S. Government security subject to the repurchase agreement becomes
less than the repurchase price (including interest), the Fund will direct the
seller of the U.S. Government security to deliver additional securities so that
the market value of all securities subject to the repurchase agreement will
equal or exceed the repurchase price. It is possible that the Fund will be
unsuccessful in seeking to impose on the seller a contractual obligation to
deliver additional securities, however.
Special Situations
Subject to the limitations in the Prospectus, each Fund (except the Global
Growth Fund) may invest in special situations that the Adviser believes present
opportunities for capital growth. Such situations most typically include
corporate restructurings, mergers, and tender offers.
A special situation arises when, in the opinion of the Adviser, the
securities of a particular company will, within a reasonably estimable period
of time, be accorded market recognition at an appreciated value solely by
reason of a development particularly or uniquely applicable to that company and
regardless of general business conditions or movements of the market as a
whole. Developments creating special situations might include, among others,
the following: liquidations, reorganizations, recapitalizations, mergers, or
tender offers; material litigation or resolution thereof; technological
breakthroughs; and new management or management policies. Although large and
well-known companies may be involved, special situations often involve much
greater risk than is inherent in ordinary investment securities.
Unseasoned Companies
As a matter of operating policy, the Funds may invest to a limited extent
in securities of unseasoned companies and new issues. The Adviser regards a
company as unseasoned when, for example, it is relatively new to or not yet
well established in its primary line of business. Such companies generally are
smaller and younger than companies whose shares are traded on the major stock
exchanges. Accordingly, their shares are often traded over-the-counter and
their share prices may be more volatile than those of larger, exchange-listed
companies. In order to avoid undue risks, a Fund will not invest more than 5%
of its total assets in securities
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of any one company with a record of fewer than three years' continuous
operation (including that of predecessors). Investments by the Nifty Fifty Fund
and the Balanced Return Fund in the securities of unseasoned companies may not
exceed 5% and 30% respectively of each Fund's total assets.
New Issues
The Funds may invest in new issues. A new issue may be an initial public
offering by a previously private company. There may be less public information
about the company and the company may have a limited operating history and
rapidly changing fundamental prospects. This may make investment returns of new
issues highly volatile. New issues may also be subject to varying patterns of
trading volume and may, at times, be difficult to sell.
INVESTMENT RESTRICTIONS
The following restrictions have been adopted as matters of fundamental or
operating policy for the Funds. Fundamental policies may not be changed without
the approval of a majority of the Fund's outstanding voting securities and
approval of the Board of Trustees. Operating policies can be changed by vote of
the Board of Trustees. The Funds may not:
(1) With respect to 75% of a Fund's total assets, purchase any security
(other than obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities) if, as a result, more than 5% of the value of
the Fund's total assets would be invested in securities of any one issuer. This
limitation does not apply with respect to the remaining 25% of a Fund's total
assets (except that neither the Growth Fund nor the Balanced Return Fund will
invest more than 10% of its total assets in any one non-U.S. Government
issuer). [Fundamental Policy]
(2) Purchase securities on margin (but it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of its
portfolio securities, and may make margin payments in connection with
transactions in permissible futures and options contracts) or make uncovered
short sales. [Operating Policy]
(3) With respect to 75% of the Global Growth, Small & Mid-Cap Growth and
Value 25 Funds' total assets and 100% of the Growth, Nifty Fifty and Balanced
Return Funds' total assets, acquire more than 10% of any one class of
securities of an issuer or more than 10% of the outstanding voting securities
of any one issuer. (For this purpose all common stocks of an issuer are
regarded as a single class, and all preferred stocks of an issuer are regarded
as a single class.) [Fundamental Policy]
(4) Borrow money in excess of 20% (5% for the Growth, the Nifty Fifty and
Balanced Return Funds) of its total assets (taken at cost) and then only as a
temporary measure for extraordinary or emergency reasons and not for
investment. (Each Fund may borrow only from banks and immediately after any
such borrowings there must be an asset coverage [total assets of the Fund,
including the amount borrowed, less liabilities other than such borrowings] of
at least 300% of the amount of all borrowings. In the event that, due to market
decline or other reasons, such asset coverage should at any time fall below
300%, the Fund is required within three days, not including Sundays and
holidays, to reduce the amount of its borrowings to the extent necessary to
cause the asset coverage of such borrowings to be at least 300%. If this should
happen, the Fund may have to sell securities at a time when it would be
disadvantageous to do so.) [Fundamental Policy]
(5) With respect to the Global Growth, the Small & Mid-Cap Growth and the
Value 25 Funds, pledge more than 25% of its total assets (taken at cost) in
connection with permissible borrowings. For the purposes of this restriction,
the deposit of underlying securities and other assets in connection with the
writing of put and call options and collateral arrangements with respect to
margin for currency futures contracts are not deemed to be a pledge of assets.
[Fundamental Policy]
(6) Invest more than 5% (30% for the Balanced Return Fund) of its total
assets in securities of any one issuer which, together with any predecessor,
has been in continuous operation for less than three years. [Fundamental
Policy]
(7) Invest in securities of any company, if officers and Trustees of the
Trust and officers and directors of the Adviser who beneficially own more than
0.5% of the shares or securities of that company collectively own more than 5%
of such securities. [Fundamental Policy with respect to the Growth, Nifty
Fifty, Balanced Return, Global Growth and Small & Mid-Cap Growth Funds]
(8) Make loans, except (a) by purchase of marketable bonds, debentures,
commercial paper or corporate notes, and similar marketable evidences of
indebtedness which are part of an issue to the public or to financial
institutions, (b) by entry into repurchase agreements, or (c) through the
lending of its portfolio securities with respect to not more than 25% of its
total assets. [Fundamental Policy]
(9) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts or commodities or commodity contracts, except for transactions in
futures contracts and options thereon entered into for hedging purposes, and
the Growth, Nifty Fifty and Balanced Return Funds may purchase marketable
securities of companies or partnerships holding such interests. [Fundamental
Policy for the Global Growth, Small & Mid-Cap Growth and Value 25 Funds]
(10) Act as an underwriter except to the extent that, in connection with
the disposition of its portfolio securities, it may be deemed to be an
underwriter under certain federal securities laws. [Fundamental Policy]
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(11) Make investments for the purpose of exercising control of a company's
management. [Operating Policy]
(12) Concentrate its investments in particular industries, and in no event
invest more than 25% of the value of its total assets in any one industry.
[Fundamental Policy]
(13) Engage in puts, calls, straddles, spreads or any combination thereof,
except that, to the extent described in the Prospectus and this Statement of
Additional Information, a Fund may buy and sell put and call options (and any
combination thereof) on securities, on financial futures contracts, on
securities indices, on currency futures contracts and on foreign currencies and
may buy and sell put and call warrants, the values of which are based upon
securities indices. [Operating Policy]
(14) Purchase warrants if, as a result, its warrant holdings, valued at
the lower of cost or market, would exceed 5% of the Fund's net assets, with no
more than 2% of net assets in warrants not listed on the New York or American
Stock Exchanges. [Operating Policy]
(15) Invest in (a) securities which at the time of such investment are not
readily marketable, (b) securities restricted as to resale (excluding
securities determined by the Trustees of the Funds, or by a person designated
by the Trustees of the Funds, to make such determinations pursuant to
procedures adopted by the Trustees to be readily marketable), and (c)
repurchase agreements maturing in more than seven days, if, as a result, more
than 10% of the Growth, Nifty Fifty and Balanced Return Funds' and more than
15% of the Global Growth, Small & Mid-Cap Growth and Value 25 Funds' net assets
(taken at current value) would be invested in the aggregate in securities
described in (a), (b) and (c) above. [Operating Policy]
(16) Purchase or sell real property (including limited partnership
interests), except that the Fund may (a) purchase or sell readily marketable
interests in real estate investment trusts or readily marketable securities of
companies which invest in real estate, (b) purchase or sell securities that are
secured by interests in real estate or interests therein, or (c) acquire real
estate through exercise of its rights as a holder of obligations secured by
real estate or interests therein or sell real estate so acquired. [Fundamental
Policy]
(17) Participate on a joint or joint and several basis in any securities
trading account. [Operating Policy]
(18) Purchase the securities of any other investment company except (a)
within the limits of the 1940 Act, (b) in a public offering or in the open
market or in privately negotiated transactions where, in either case, to the
best information of the Fund, no commission, profit or sales charge to a sponsor
or dealer (other than a customary broker's commission or underwriting discount)
results from such purchase, (c) if such purchase is part of a merger,
consolidation, or acquisition of assets, or (d) as part of a master-feeder
arrangement (see below). [Fundamental Policy]
(19) With respect to the Growth Fund, the Nifty Fifty Fund and the
Balanced Return Fund, purchase or sell financial futures, commodities or
commodities contracts, including futures contracts on physical commodities.
[Fundamental Policy]
(20) Issue senior securities, as such term is defined in the Investment
Company Act of 1940, as amended, except as otherwise permitted under these
fundamental investment restrictions. [Fundamental Policy]
Each Fund, notwithstanding any other investment policy or limitation
(whether or not fundamental), may invest all of its assets in the securities or
beneficial interests of a single pooled investment fund having substantially
the same objective, policies and limitations as such Fund.
Some of the practices referred to above are subject to restrictions
contained in the 1940 Act. In addition to the restrictions described above, a
Fund may from time to time agree to additional investment restrictions for
purposes of compliance with the securities laws of those states and foreign
jurisdictions where such Fund intends to offer or sell its shares. Any such
additional restrictions that would have a material bearing on a Fund's
operations will be reflected in the Prospectus or a Prospectus supplement and
may require shareholder approval.
10
<PAGE>
PERFORMANCE INFORMATION
The Funds may, from time to time, include total return in advertisements
or reports to shareholders or prospective investors. Performance information in
advertisements and sales literature may be expressed as a yield of a class or
Fund and as a total return of any Class or Fund.
Standardized quotations of average annual total return for each Class of
Shares of a Fund will be expressed in terms of the average annual compounded
rate of return for a hypothetical investment in either Class A, Class B, or
Class C Shares of a Fund over periods of 1, 5 and 10 years or up to the life of
the class of shares of a Fund, calculated for each class separately pursuant to
the formula below. All total return figures reflect the deduction of a
proportional share of each class's expenses (on an annual basis), deduction of
the maximum initial sales load in the case of Class A Shares and the maximum
contingent deferred sales charge applicable to a complete redemption of the
investment in the case of Class B and C Shares, and assume that all dividends
and distributions are reinvested when paid.
P(T + 1)n = ERV
where P = a hypothetical initial payment of $1,000,
T = average annual total return,
n = number of years,
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5, or 10 year periods at the end of
the 1, 5, or 10 year periods (or fractional portion thereof).
The Funds may from time to time include in advertisements containing total
return the ranking of those performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Funds may compare performance results to other investment or
savings vehicles (such as certificates of deposit) and may refer to results
published in various publications such as Changing Times, Forbes, Fortune,
Money, Barrons, Business Week, Investor's Daily, Stanger's Mutual Fund Monitor,
The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal,
The New York Times, Consumer Reports, Registered Representative, Financial
Planning, Financial Services Weekly, Financial World, U.S. News and World
Report, Standard & Poor's The Outlook, and Personal Investor. The Funds may
from time to time illustrate the benefits of tax deferral by comparing taxable
investments to investments made through tax-deferred retirement plans. The
total return may also be used to compare the performance of the Funds against
certain widely acknowledged outside standards or indices for stock and bond
market performance, such as the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500"), Russell 2000 Index, Morgan Stanley Capital International
All Country World Index, Dow Jones Industrial Average, Europe Australia Far
East Index (EAFE), Consumer Price Index, Lehman Brothers Corporate Index and
Lehman Brothers T-Bond Index.
Advertisements, sales literature and other communications may contain
information about the Funds and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Funds to
respond quickly to changing market and economic conditions. From time to time
the Funds may include specific portfolio holdings or industries in such
communications. To illustrate components of overall performance, the Funds may
separate its cumulative and average annual returns into income and capital
gains components.
Performance information reflects only the performance of a hypothetical
investment in each class during the particular time period on which the
calculations are based. Performance information should be considered in light
of each Fund's investment objectives and policies, characteristics and quality
of the portfolio, and the market condition during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
The Funds may also compute aggregate cumulative total return for specified
periods based on a hypothetical Class A, Class B, or Class C account with an
assumed initial investment of $10,000. The aggregate total return is determined
by dividing the net asset value of this account at the end of the specified
period by the value of the initial investment and is expressed as a percentage.
Calculation of aggregate total return reflects payment of the Class A Shares'
maximum sales charge of 4.75% and assumes reinvestment of all income dividends
and capital gain distributions during the period.
The Funds also may quote annual, average annual and annualized total
return and aggregate total return performance data, for each class of shares of
the Funds, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate
rate of return calculations.
11
<PAGE>
The average annual compounded rates of return, or total return, for the
Class A, Class B and Class C shares of each of the Funds for the indicated
periods ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
One Five Ten Inception(1) to
Year Years Years December 31, 1998
Class A ---- ----- ----- -----------------
<S> <C> <C> <C> <C>
The Growth Fund 30.88% 17.88% 17.06% 14.93%
The Balanced Return Fund 22.98% 15.93% 15.23% 15.72%
The Nifty Fifty Fund 28.70% 20.27% N/A 20.01%
The Global Growth Fund* 8.91% 18.11% N/A 20.05%
The Small & Mid-Cap Growth Fund* 8.87% N/A N/A 31.53%
The Value 25 Fund 2.11% N/A N/A 11.59%
</TABLE>
<TABLE>
<CAPTION>
One Inception(2) to
Year December 31, 1998
Class B ---- -----------------
<S> <C> <C>
The Growth Fund 32.53% 18.13%
The Balanced Return Fund 24.21% 16.06%
The Nifty Fifty Fund 30.30% 20.53%
The Global Growth Fund 9.47% 13.94%
The Small & Mid-Cap Growth Fund 9.54% 22.06%
The Value 25 Fund 2.57% 9.87%
</TABLE>
<TABLE>
<CAPTION>
One Inception(2) to
Year December 31, 1998
Class C ---- -----------------
<S> <C> <C>
The Growth Fund 36.38% 18.32%
The Balanced Return Fund 28.07% 16.26%
The Nifty Fifty Fund 34.14% 20.70%
The Global Growth Fund 13.26% 14.37%
The Small & Mid-Cap Growth Fund 13.34% 18.74%
The Value 25 Fund 6.42% 12.88%
</TABLE>
(1)The inception dates of the Funds are as follows:
Growth Fund--June 24, 1986
Balanced Return Fund--June 8, 1987
Nifty Fifty Fund--December 17, 1990
Global Growth Fund--November 1, 1993
Small & Mid-Cap Growth Fund--October 10, 1994
Value 25 Fund--December 17, 1996
(2)The inception date for Class B and Class C shares for the Growth, Nifty Fifty
and Balanced Return Funds was January 3, 1994; the inception date for the
Class B shares for the Global Growth* and Small & Mid-Cap* Growth Funds was
September 18, 1996; the inception date for the Class C shares for the Global
Growth Fund* was October 21, 1996 and the inception date for the Class C
shares of the Small & Mid-Cap Growth Fund* was October 8, 1996. The inception
date for Class B and C shares for the Value 25 Fund was January 9, 1997.
* Prior to September 1, 1996, the Global Growth and Small & Mid-Cap Growth
Funds' shares were not offered to the public and, although each Fund's
portfolio was managed substantially in accordance with the investment
policies described in its current Prospectus during that period, some
management differences did occur due primarily to each Fund's small asset
size. Accordingly, each Fund's performance during periods prior to September
1, 1996 may not be relevant to an assessment of such Fund's performance
subsequent to such date. Additionally, the Adviser waived all management,
administrative and service fees otherwise payable to it by the Global Growth
Fund during 1993, 1994 and 1995 and the Small & Mid-Cap Growth Fund during
1994 and 1995, which had the effect of increasing each Fund's total return
for those periods.
A Fund may also, from time to time, include a reference to the current
distribution rate of each Class of shares in investor communications and sales
literature preceded or accompanied by a prospectus for such Fund, reflecting
the amounts actually distributed to shareholders of each Class which could
include capital gains and other items of income, as well as interest and
dividend income received by a Fund and distributed to the shareholders. All
calculations of a Class's distribution rate are based on the distributions per
share which are declared, but not necessarily paid, during the fiscal year. The
distribution rate for a Class is determined by dividing the distributions
declared during the period by the maximum offering price per share of the Class
on the last day of the period and annualizing the resulting figure. The
distribution rate does not reflect capital appreciation or depreciation in the
price of a Fund's shares and should not be confused with yield or considered to
be a complete indicator of the return to the investor on his investment.
12
<PAGE>
Investors should note that the investment results of each Fund will
fluctuate over time, and any presentation of a Fund's current yield, total
return or distribution rate for any period should not be considered as a
representation of what an investment may earn or what an investor's total
return, yield or distribution rate may be in any future period.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities,
supervises their execution and negotiates brokerage commissions on behalf of
the Funds. It is the practice of the Adviser to seek the best prices and
execution of orders and to negotiate brokerage commissions which in the
Adviser's opinion are reasonable in relation to the value of the brokerage
services provided by the executing broker. Brokers who have executed orders for
the Funds are asked to quote a fair commission for their services. If the
execution is satisfactory and if the requested rate approximates rates
currently being quoted by the other brokers selected by the Adviser, the rate
is deemed by the Adviser to be reasonable. Brokers may ask for higher rates of
commission if all or a portion of the securities involved in the transaction
are positioned by the broker, if the broker believes it has brought the Funds
an unusually favorable trading opportunity, or if the broker regards its
research services as being of exceptional value, and payment of such
commissions is authorized by the Adviser after the transaction has been
consummated. If the Adviser more than occasionally differs with the broker's
appraisal of opportunity or value, the broker would not be selected to execute
trades in the future. The Adviser believes that the Funds benefit with a
securities industry comprised of many and diverse firms and that the long-term
interest of shareholders of the Funds is best served by brokerage policies
which include paying a fair commission rather than seeking to exploit its
leverage to force the lowest possible commission rate. The primary factors
considered in determining the firms to which brokerage orders are given are the
Adviser's appraisal of: the firm's ability to execute the order in the desired
manner; the value of research services provided by the firm; and the firm's
attitude toward and interest in mutual funds in general including the sale of
mutual funds managed and sponsored by the Adviser. The Adviser does not offer
or promise to any broker an amount or percentage of brokerage commissions as an
inducement or reward for the sale of shares of the Funds. Over-the-counter
purchases and sales are transacted directly with principal market-makers except
in those circumstances where in the opinion of the Adviser better prices and
execution are available elsewhere.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor
federal, state, local and foreign political developments; many of the brokers
also provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers as a group tend to
monitor a broader universe of securities and other matters than the Adviser's
staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of this information will be used in connection with the Funds. While
this information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate its value and in the opinion
of the Adviser it does not reduce the Adviser's expenses in a determinable
amount. The extent to which the Adviser makes use of statistical, research and
other services furnished by brokers is considered by the Adviser in the
allocation of brokerage business but there is no formula by which such business
is allocated. The Adviser does so in accordance with its judgment of the best
interest of the Funds and shareholders.
A high rate of portfolio turnover involves a correspondingly higher amount
of brokerage commissions and other costs which must be borne directly by the
Funds and indirectly by shareholders.
Stolper & Company, Inc., of which Michael Stolper, a former Trustee of the
Trust and a Director of Pasadena Capital Corporation, is the sole shareholder,
has in the past received brokerage business from the Adviser. Stolper &
Company, Inc. assists its clients in selecting an investment adviser and offers
a service measuring the performance of investment advisers, in return for which
the client pays cash or directs the investment adviser to execute a portion of
the brokerage business through Bear, Stearns & Company for the credit of
Stolper & Company, Inc. Stolper & Company, Inc. and the Adviser anticipate that
such brokerage allocation from the Adviser will continue. However, neither
Michael Stolper nor Stolper & Company, Inc. will receive or participate in
commissions paid by a Fund nor receive any reciprocal business as a result of
commissions paid by a Fund, although a Fund may pay usual and customary
brokerage commissions to Bear, Stearns & Company for brokerage business by such
Fund.
It is possible that purchases or sales of securities for a Fund also may
be considered for other clients of the Adviser or its affiliates, including the
other series of the Trust. Any transactions in such securities at or about the
same time will be allocated among such Fund and such other clients in a manner
deemed equitable to all by the Adviser, taking into account the respective
sizes of the Fund and the other clients' accounts, and the amount of securities
to be purchased or sold. It is recognized that it is possible that in some
cases this procedure could have a detrimental effect on the price or volume of
the security so far as that Fund is concerned. However, in other cases, it is
possible that the ability to participate in volume transactions and to
negotiate lower commissions will be beneficial to such Fund.
13
<PAGE>
The Board of Trustees of the Trust periodically monitors the operation of
these brokerage policies by reviewing the allocation of brokerage orders. For
the fiscal years ended December 31, 1996, 1997 and 1998, brokerage commissions
paid by the Trust on Fund transactions totaled $2,875,432, $3,928,310 and
$2,322,602, respectively. Brokerage commissions of $316,877 paid during the
fiscal year ended December 31, 1998 were paid on fund transactions aggregating
$279,064,805 executed by brokers who provided research and other statistical
and factual information. None of such commissions was paid to a broker who was
an affiliated person of the Trust or and affiliated person of such a person, or
to the knowledge of the Trust, to a broker an affiliated person of which was an
affiliated person of the Trust, its advisers or its national distributor.
PORTFOLIO TURNOVER
The Funds pay brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by a Fund and thus indirectly by its shareholders. It
may also result in the realization of larger amounts of short-term capital
gains, which are taxable to shareholders as ordinary income. If such rate of
turnover exceeds 100%, the Funds will pay more in brokerage commissions than
would be the case if they had lower portfolio turnover rates. Historical
turnover rates can be found under the heading "Financial Highlights" located in
the Trust's Prospectus. Portfolio turnover rates varied between 1997 and 1998
due to market conditions and the various investment strategies employed by the
funds' managers.
SERVICES OF THE ADVISER
The following information concerning the investment management and
administrative services provided to the Funds supplements the information
contained in the section in the Prospectus entitled "Management of the Funds."
Investment Management Agreement
The Adviser, Roger Engemann & Associates, Inc., ("REA") has entered into
an Investment Management Agreement (the "Management Agreement") with the Trust,
on behalf of each series of the Trust including the Funds, to provide
investment advice and investment management services with respect to the assets
of each Fund, provide personnel, office space, facilities and equipment as may
be needed by the Funds in their day-to-day operations and provide the officers
of the Trust. The Management Agreement has been approved by the Board of
Trustees of the Trust with respect to each Fund, including a majority of the
Trustees who are not a party to the Management Agreement or interested persons
of a party to the Management Agreement, and by a majority of the outstanding
voting shares of each Fund at a special meeting of shareholders on August 28,
1997.
The Management Agreement dated as of September 3, 1997 will be in effect
through September 2, 1999. The Management Agreement may be continued thereafter
for successive periods not to exceed one year, provided that such continuance
is specifically approved annually by a vote of a majority of each Fund's
outstanding voting securities or by the Board of Trustees, and by the vote of a
majority of the Trustees who are not parties to the Management Agreement or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
REA is an indirect subsidiary of Phoenix Investment Partners, Ltd.
("PXP"). PXP is a publicly-traded, independent registered investment advisory
firm, and has served investors for over 70 years. It manages over $57 billion
in assets through its investment partners: Aberdeen Fund Managers, Inc.
(Aberdeen) in Aberdeen, London, Singapore and Fort Lauderdale; Duff & Phelps
Investment Management Co. (Duff & Phelps) in Chicago and Cleveland; Roger
Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca Capital Management
LLC (Seneca) in San Francisco and Zweig/Glaser Advisers LLC in New York; and
Phoenix Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions)
in Hartford, Sarasota, and Scotts Valley, CA, respectively.
Expenses
Except as set forth in the separate Administration Agreement discussed
below, the Adviser is not responsible under the Management Agreement for any
expenses related to the operation of the Funds.
Under the Management Agreement, each Fund is responsible and has assumed
the obligation for paying all of its expenses, including but not limited to:
(i) brokerage and commission expenses, (ii) federal, state, or local taxes,
including issue and transfer taxes, incurred by or levied on a Fund, (iii)
interest charges on borrowings, (iv) charges and expenses of a Fund's custodian
and transfer agent, (v) payment of all investment advisory and management fees,
(vi) insurance premiums on a Fund's property and personnel, including the
fidelity bond and liability insurance for officers and Trustees, (vii) printing
and mailing of all reports, including semi-annual and annual reports,
prospectuses, and statements of additional information to existing
shareholders, (viii) fees and expenses of registering a Fund's shares under the
federal securities laws and of qualifying its shares under applicable state
securities (Blue Sky) laws subsequent to a Fund's initial fiscal period,
including expenses attendant upon renewing and increasing such registrations
and qualifications, (ix) legal fees and expenses including legal expenses of
the independent Trustees, (x) independent Trustees' fees and auditing expenses,
including auditing fees of independent public accountants, (xi) all costs
associated with shareholders meetings and the preparation and dissemination of
proxy solicitation materials, except for meetings called solely for the
Adviser's benefit, (xii) dues and other costs of membership in industry
associations, subject to the approval of any such membership by the Board of
Trustees, (xiii) service fees paid to dealers and other shareholder service
providers pursuant to Services Agreements between the Trust and such service
providers, and (xiv) any extraordinary and non-recurring expenses, except as
otherwise prescribed therein.
14
<PAGE>
As compensation for its services under the Management Agreement, the
Adviser is paid a monthly fee based on a Fund's average daily net assets at the
following annual rates:
<TABLE>
<CAPTION>
First Next Over
$50 $450 $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>
For services to the Trust during the fiscal years ended December 31, 1996,
1997 and 1998, pursuant to the then-effective management agreements with the
former adviser (the "Former Adviser") (Roger Engemann Management Co., Inc.) and
the current Adviser (REA), the Trust paid management fees (approximately) of
$5,160,858, $6,614,000 and $8,380,000, respectively. Of these totals, the
Former Adviser and/or REA received fees from each Fund as follows:
<TABLE>
<CAPTION>
Fund 1996 1997 1998
---- ---- ---- ----
<S> <C> <C> <C>
Growth Fund $3,202,000 $3,490,000 $3,842,000
Nifty Fifty Fund $1,391,000 $1,967,000 $2,617,000
Balanced Return Fund $ 528,000 $ 551,000 $ 603,000
Global Growth Fund $ 22,646* $ 143,000 $ 247,000
Small & Mid-Cap Fund $ 17,212** $ 288,000 $ 741,000
Value 25 Fund N/A $ 175,000 $ 330,000
</TABLE>
* Former Adviser was entitled to $49,798; however, the Former Adviser waived
$27,147 of such fees for the first eight months of 1996.
** Former Adviser was entitled to $25,255; however, the Former Adviser waived
$8,043 of such fees for the first eight months of 1996.
The Management Agreement is terminable with respect to each Fund on 60-days'
written notice by vote of a majority of such Fund's outstanding shares, by vote
of a majority of the Board of Trustees, or by the Adviser on 60-days' written
notice. The Management Agreement automatically terminates in the event of its
assignment as defined in the 1940 Act. The Management Agreement provides that
in the absence of willful misfeasance, bad faith, or gross negligence on the
part of the Adviser, or of reckless disregard of its obligations thereunder,
the Adviser is not liable for any action or failure to act in accordance with
its duties.
NET ASSET VALUE
The net asset value per share of each Fund is determined as of the close
of trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Fund. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the
Fund. Assets and liabilities are determined in accordance with generally
accepted accounting principles and applicable rules and regulations of the
Securities and Exchange Commission. The total liability allocated to a class,
plus that class's distribution fee and any other expenses allocated solely to
that class, are deducted from the proportionate interest of such class in the
assets of the Fund, and the resulting amount of each is divided by the number
of shares of that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world,
the calculation of net asset value may not take place for any Fund which
invests in foreign securities contemporaneously with the determination of the
prices of the majority of the portfolio securities of such Fund. All assets and
liabilities initially expressed in foreign currency values will be converted
into United States dollar values at the mean between the bid and ask quotations
of such currencies against United States dollars as last quoted by any
recognized dealer. If an event were to occur after the value of an investment
was so established but before the net asset value per share was determined,
which was likely to materially change the net asset value, then the instrument
would be valued using fair value considerations by the Trustees or their
delegates. If at any time a Fund has investments where market quotations are
not readily available, such investments are valued at the fair value thereof as
determined in good faith by the Trustees although the actual calculations may
be made by persons acting pursuant to the direction of the Trustees.
15
<PAGE>
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent
investment is $25. However, both the minimum initial and subsequent investment
amounts are $25 for investments pursuant to the "Investo-Matic" plan, a bank
draft investing program administered by Distributor, or pursuant to the
Systematic Exchange privilege or for an individual retirement account (IRA). In
addition, there are no subsequent investment minimum amounts in connection with
the reinvestment of dividend or capital gain distributions. Completed
applications for the purchase of shares should be mailed to: Phoenix-Engemann
Funds, c/o State Street Bank and Trust Company, P.O. Box 8301, Boston, MA
02266-8301.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their
net asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the
"deferred sales charge alternative"). Orders received by dealers prior to the
close of trading on the New York Stock Exchange are confirmed at the offering
price effective at that time, provided the order is received by the Authorized
Agent prior to its close of business.
The alternative purchase arrangements permit an investor to choose the
method of purchasing shares that is more beneficial given the amount of the
purchase, the length of time the investor expects to hold the shares, whether
the investor wishes to receive distributions in cash or to reinvest them in
additional shares of the Funds, and other circumstances. Investors should
consider whether, during the anticipated life of their investment in the Trust,
the accumulated continuing distribution and services fees and contingent
deferred sales charges on Class B or C Shares would be less than the initial
sales charge and accumulated distribution and services fees on Class A Shares
purchased at the same time.
Dividends paid by the Funds, if any, with respect to each class of shares
will be calculated in the same manner at the same time on the same day, except
that fees such as higher distribution and services fees and any incremental
transfer agency costs relating to each class of shares will be borne
exclusively by that class. See "Dividends, Distributions and Taxes."
Class A Shares
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class
A Shares are subject to an ongoing services fee at an annual rate of 0.25% of
the Trust's aggregate average daily net assets attributable to the Class A
Shares. In addition, certain purchases of Class A Shares qualify for reduced
initial sales charges. See the Funds' current Prospectus for additional
information.
Class B Shares
Class B Shares do not incur a sales charge when they are purchased, but
they are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions. Class B Shares purchased prior to January 20, 1998 are
subject to the sales charge schedule as it existed prior to that date. See the
Funds' current Prospectus for additional information.
Class B Shares are subject to ongoing distribution and services fees at an
annual rate of up to 1.00% of the Fund's aggregate average daily net assets
attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment
is made. The higher ongoing distribution and services fees paid by Class B
Shares will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to
purchase was accepted (six years for Class B Shares purchased prior to January
20, 1998), in the circumstances and subject to the qualifications described in
the Funds' Prospectus. The purpose of the conversion feature is to relieve the
holders of the Class B Shares that have been outstanding for a period of time
sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fees.
Such conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares
in a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.
Class C Shares
Class C Shares are purchased without an initial sales charge but are
subject to a deferred sales charge if redeemed within one year of purchase.
Class C Shares of the Growth Fund, Balanced Return Fund and Nifty Fifty Fund
purchased prior to January
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20, 1998 are not subject to the deferred sales charge. The deferred sales
charge may be waived in connection with certain qualifying redemptions. Shares
issued in conjunction with the automatic reinvestment of income distributions
and capital gain distributions are not subject to any sales charges. Class C
Shares are subject to ongoing distribution and services fees of up to 1.00% of
the Funds' aggregate average daily net assets attributable to Class C Shares.
See the Funds' current Prospectus for more information.
Class A Shares--Reduced Initial Sales Charges
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. If you fall within any one of the following
categories, you will not have to pay a sales charge on your purchase of Class A
Shares: (1) any trustee, director or officer of the Phoenix Funds or any other
open-end management investment company advised, subadvised or distributed by the
Adviser, Distributor or any corporate affiliate of either or both the Adviser
and Distributor (an "Affiliated Phoenix Fund"); (2) any director or officer, or
any full-time employee or sales representative (for at least 90 days), of the
Adviser or Distributor; (3) registered representatives and employees of
securities dealers with whom Distributor has sales agreements; (4) any qualified
retirement plan exclusively for persons described above; (5) any officer,
director or employee of a corporate affiliate of the Adviser or Distributor; (6)
any spouse, child, parent, grandparent, brother or sister of any person named in
(1), (2), (3) or (5) above; (7) employee benefit plans for employees of the
Adviser, Distributor and/or their corporate affiliates; (8) any employee or
agent who retires from Phoenix Home Life, Distributor and/or their corporate
affiliates; (9) any account held in the name of a qualified employee benefit
plan, endowment fund or foundation if, on the date of the initial investment,
the plan, fund or foundation has assets of $10,000,000 or more or at least 100
eligible employees; (10) any person with a direct rollover transfer of shares
from an established Phoenix-Engemann Fund or other Phoenix Fund qualified plan;
(11) any Phoenix Home Life separate account which funds group annuity contracts
offered to qualified employee benefit plans; (12) any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge; (13) any fully matriculated student in any U.S. service academy; (14)
any unallocated account held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity, if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds if, in connection with the
purchases or redemption of the redeemed shares, the investor paid a prior sales
charge provided such investor supplies verification that the redemption occurred
within 90 days of the Phoenix-Engemann Fund purchase and that a sales charge was
paid; (16) any deferred compensation plan established for the benefit of any
Phoenix-Engemann Fund or other Affiliated Phoenix Fund trustee or director;
provided that sales to persons listed in (1) through (15) above are made upon
the written assurance of the purchaser that the purchase is made for investment
purposes and that the shares so acquired will not be resold except to the Trust;
(17) purchasers of Class A Shares bought through investment advisors (including
President's Circle clients of REA) and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for their
own accounts or the accounts of their clients; (18) retirement plans and
deferred compensation plans and trusts used to fund those plans (including, for
example, plans qualified or created under sections 401(a), 403(b) or 457 of the
Internal Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the
Distributor for such purchases; or (19) clients of investment advisors or
financial planners who buy shares for their own accounts but only if their
accounts are linked to a master account of their investment advisor or financial
planner on the books and records of the broker, agent or financial intermediary
with which the Distributor has made such special arrangements (each of the
investors described in (17) through (19) may be charged a fee by the broker,
agent or financial intermediary for purchasing shares). Class A shareholders who
made their initial investment prior to January 20, 1998 and qualified to
purchase shares without a sales charge, will not have to pay a sales charge on
subsequent purchases of Class A Shares.
Combination Purchase Privilege. Your purchase of any class of shares of
the Funds or any other Affiliated Phoenix Fund (other than Phoenix Money Market
Fund Series Class A Shares), if made at the same time by the same "person,"
will be added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b)
plans for the same employer; (d) multiple accounts (up to 200) under a
qualified employee benefit plan or administered by a third party administrator;
or (e) trust companies, bank trust departments, registered investment advisers,
and similar entities placing orders or providing administrative services with
respect to funds over which they exercise discretionary investment authority
and which are held in a fiduciary, agency, custodial or similar capacity,
provided all shares are held of record in the name, or nominee name, of the
entity placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised,
subadvised or distributed by the Adviser or Distributor or any corporate
affiliate of either or both the Adviser and Distributor provided such other
mutual fund extends reciprocal privileges to shareholders of the Phoenix Funds.
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Letter of Intent. If you sign a Letter of Intent, your purchase of any
class of shares of the Funds or any other Affiliated Phoenix Fund (other than
Phoenix Money Market Fund Series Class A Shares), if made by the same person
within a thirteen month period, will be added together to determine whether you
are entitled to an immediate reduction in sales charges. Sales charges are
reduced based on the overall amount you indicate that you will buy under the
Letter of Intent. The Letter of Intent is a mutually non-binding arrangement
between you and the Distributor. Since the Distributor doesn't know whether you
will ultimately fulfill the Letter of Intent, shares worth 5% of the amount of
each purchase will be set aside until you fulfill the Letter of Intent. When
you buy enough shares to fulfill the Letter of Intent, these shares will no
longer be restricted. If, on the other hand, you do not satisfy the Letter of
Intent, or otherwise wish to sell any restricted shares, you will be given the
choice of either buying enough shares to fulfill the Letter of Intent or paying
the difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you
do not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A or M Shares
before Class C or B Shares, respectively. Oldest shares will be redeemed before
selling newer shares. Any remaining shares will then be deposited to your
account.
Right of Accumulation. Your purchase of any class of shares of the Funds
or any other Affiliated Phoenix Fund, if made over time by the same person may
be added together to determine whether the combined sum entitles you to a
prospective reduction in sales charges. You must provide certain account
information to the Distributor to exercise this right.
Associations. Certain groups or associations may be treated as a "person"
and qualify for reduced Class A Share sales charges. The group or association
must: (1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge;
(3) work through an investment dealer; or (4) not be a group whose sole reason
for existing is to consist of members who are credit card holders of a
particular company, policyholders of an insurance company, customers of a bank
or a broker-dealer or clients of an investment adviser.
Class B and C Shares--Waiver of Sales Charges
The CDSC is waived on the redemption (sale) of Class B and C Shares if the
redemption is made (a) within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint tenant
is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to
Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section
72(m)(7); (c) as a mandatory distribution upon reaching age 701/2 under any
retirement plan qualified under Code Sections 401, 408 or 403(b) or resulting
from the tax-free return of an excess contribution to an IRA; (d) by 401(k)
plans using an approved participant tracking system for participant hardships,
death, disability or normal retirement, and loans which are subsequently
repaid; (e) based on the exercise of exchange privileges among Class B and C
Shares of this or any other Affiliated Phoenix Fund; (f) based on any direct
rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (g) based on the systematic withdrawal program
(Class B Shares only). If, as described in condition (a) above, an account is
transferred to an account registered in the name of a deceased's estate, the
CDSC will be waived on any redemption from the estate account occurring within
one year of the death. If the Class B or C Shares are not redeemed within one
year of the death, they will remain subject to the applicable CDSC.
Conversion Feature--Class B Shares
Class B Shares will automatically convert to Class A Shares of the same
Fund eight years after they are purchased. Conversion will be on the basis of
the then prevailing net asset value of Class A and B Shares. There is not sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Funds were unable to obtain such assurances,
it might continue to make distributions if doing so would assist in complying
with its general practice of distributing sufficient income to reduce or
eliminate federal taxes otherwise payable by the Funds.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished
over the phone. Inquiries regarding policies and procedures relating to
shareholder account services should be directed to Shareholder Services at
(800) 243-1574.
Exchanges. Under certain circumstances, shares of any Phoenix-Engemann
Fund may be exchanged for shares of the same Class of another Phoenix-Engemann
Fund or any other Affiliated Phoenix Fund on the basis of the relative net
asset values per
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share at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Fund, except if made in connection
with the Systematic Exchange privilege. Shareholders may exchange shares held
in book-entry form for an equivalent number (value) of the same class of shares
of any other Phoenix-Engemann Fund or any other Affiliated Phoenix Fund, if
currently offered. On exchanges with share classes that carry a contingent
deferred sales charge, the CDSC schedule of the original shares purchased
continues to apply. The exchange of shares is treated as a sale and purchase
for federal income tax purposes (see also "Dividends, Distributions and
Taxes").
Systematic Exchanges. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix-Engemann Fund or any other
Affiliated Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel this privilege at any time. If you maintain an
account balance of at least $5,000, or $2,000 for tax qualified retirement
benefit plans (calculated on the basis of the net asset value of the shares
held in a single account), you may direct that shares be automatically
exchanged at predetermined intervals for shares of the same class of another
Phoenix-Engemann Fund or any other Affiliated Phoenix Fund. This requirement
does not apply to Phoenix "Self Security" program participants. Systematic
exchanges will be executed upon the close of business on the 10th day of each
month or the next succeeding business day. Systematic exchange forms are
available from the Distributor. Exchanges will be based upon each Fund's net
asset value per share next computed after the close of business on the 10th day
of each month (or next succeeding business day), without sales charge. On Class
B and C Share exchanges, the CDSC schedule of the original shares purchased
continues to apply.
Dividend Reinvestment Across Accounts. If you maintain an account balance
of at least $5,000, or $2,000 for tax qualified retirement benefit plans
(calculated on the basis of the net asset value of the shares held in a single
account), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of
one of the other Phoenix-Engemann Fund or any other Affiliated Phoenix Fund at
net asset value. You should obtain a current prospectus and consider the
objectives and policies of each Fund carefully before directing dividends and
distributions to another Fund. Reinvestment election forms and prospectuses are
available from Equity Planning. Distributions may also be mailed to a second
payee and/or address. Requests for directing distributions to an alternate
payee must be made in writing with a signature guarantee of the registered
owner(s). To be effective with respect to a particular dividend or
distribution, notification of the new distribution option must be received by
the Transfer Agent at least three days prior to the record date of such
dividend or distribution. If all shares in your account are repurchased or
redeemed or transferred between the record date and the payment date of a
dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
Systematic Withdrawal Program. The Systematic Withdrawal Program allows
you to periodically redeem a portion of your account on a predetermined
monthly, quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations
stated below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. Participants
in the Program redeeming Class C Shares will be subject to any applicable
contingent deferred sales charge. The purchase of shares while participating in
the withdrawal program will ordinarily be disadvantageous to the Class A Shares
investor since a sales charge will be paid by the investor on the purchase of
Class A Shares at the same time as other shares are being redeemed. For this
reason, investors in Class A Shares may not participate in an automatic
investment program while participating in the Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed.
Accordingly, the purchase of Class B Shares will generally not be suitable for
an investor who anticipates withdrawing sums in excess of the above limits
shortly after purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Fund to dispose of its
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securities or to determine fairly the value of its net assets or during any
other period permitted by order of the Securities and Exchange Commission for
the protection of investors. Furthermore, the Transfer Agent will not mail
redemption proceeds until checks received for shares purchased have cleared,
which may take up to 15 days or more. See the Funds' current Prospectus for
further information. Redemptions by Class B and C shareholders will be subject
to the applicable deferred sales charge, if any.
The Trust has authorized one or more brokers to accept on its behalf
purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when
an authorized broker or, if applicable, a broker's authorized designee, accepts
the order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemption of Small Accounts
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the
giving of not less than 60 days written notice to the shareholder mailed to the
address of record. During the 30 day period the shareholder has the right to
add to the account to bring its value to $200 or more.
Telephone Redemptions
Shareholders may redeem up to $50,000 worth of their shares by telephone.
See the Funds' current Prospectus for additional information.
Account Reinstatement Privilege
Shareholders who may have overlooked features of their investment at the
time they redeemed have a privilege of reinvestment of their investment at net
asset value. See the Funds' current Prospectus for more information and
conditions attached to this privilege.
Redemption in Kind
To the extent consistent with state and federal law, the Funds may make
payment of the redemption price in cash or in kind. However, the Funds have
elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Fund at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to
them in computing the net asset value per share of the Fund. A shareholder
receiving such securities would incur brokerage costs when selling the
securities.
TAX SHELTERED RETIREMENT PLANS
Shares of the Funds and other Phoenix Funds may be offered in connection
with the following qualified prototype retirement plans: IRA, Rollover IRA,
SEP-IRA, SIMPLE IRA, Roth IRA, 401(k) Profit Sharing and Money Purchase Pension
Plans and 403(b) Retirement Plans. REA and its affiliates may provide
administrative services to these plans and to their participants, in addition
to the services that REA and its affiliates provide to the Phoenix-Engemann
Funds and other Affiliated Phoenix Funds, and may receive compensation
therefor. For information on the terms and conditions applicable to employee
participation in such plans, including information on applicable plan
administrative charges and expenses, prospective investors should consult the
plan documentation and employee enrollment information which is available from
participating employers. Write or call Equity Planning at (800) 243-4361 for
information about the plans.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund intends to elect to be treated as a regulated investment company
("RIC") and qualify annually as such under certain provision of the Internal
Revenue Code (the "Code"). Under such provisions, each Fund will not be subject
to federal income tax on such part of its ordinary income and net realized
capital gains which it distributes to shareholders provided it meets certain
distribution requirements. To qualify for treatment as a regulated investment
company, each Fund must, among other things: (a) derive in each taxable year at
least 90% of its gross income from dividends, interest and gains from the sale
or other disposition of securities; and (b) meet certain diversification
requirements imposed under the Code at the end of each quarter of the taxable
year.
The Code imposes a 4% nondeductible excise tax on a regulated investment
company if it does not distribute to its shareholders during the calendar year
an amount equal to 98% of the Fund's net ordinary income, with certain
adjustments, for such calendar year, plus 98% of each Fund' net capital gains
for the 12-month period ending on October 31 of such calendar year. In
addition, an amount equal to any undistributed investment company taxable
income or capital gain net income from the previous calendar year must also be
distributed to avoid the excise tax. The excise tax is imposed on the amount by
which the regulated investment company does not meet the foregoing distribution
requirements. If each Fund has taxable income that would be subject to the
excise tax, each Fund intends to distribute such income so as to avoid payment
of the excise tax.
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Under another provision of the Code, any dividend declared by each Fund to
shareholders of record in October, November and December of any year will be
deemed to have been received by, and will be taxable to shareholders as of
December 31 of such year, provided that the dividend is actually paid by each
Fund before February 1, of the following year.
The Funds' policy is to distribute to its shareholders substantially all
investment company taxable income as defined in the Code and any net realized
capital gains for each year and consistent therewith to meet the distribution
requirements of Part I of subchapter M of the Code. The Funds intend to meet
the other requirements of Part I of subchapter M, including the requirements
with respect to diversification of assets and sources of income, so that the
Funds will pay no taxes on net investment income and net realized capital gains
distributed to shareholders.
Under certain circumstances, the sales charge incurred in acquiring shares
of the Funds may not be taken into account in determining the gain or loss on
the disposition of those shares. This rule applies where shares of the Funds
are disposed of within 90 days after the date on which they were acquired and
new shares of a regulated investment company are acquired without a sales
charge or at a reduced sales charge. In that case, the gain or loss realized on
the disposition will be determined by excluding from the tax basis of the
shares disposed of all or a portion of the sales charge incurred in acquiring
those shares. This exclusion applies to the extent that the otherwise
applicable sales charge with respect to the newly acquired shares is reduced as
a result of the shareholder having incurred a sales charge initially. The
portion of the sales charge affected by this rule will be treated as a sales
charge paid for the new shares.
Distributions by the Funds reduce the net asset value of the Funds'
shares. Should a distribution reduce the net asset value of a share below a
shareholder's cost for the shares, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution by a Fund. The
price of shares purchased at that time may include the amount of the
forthcoming distribution, but the distribution generally would be taxable to
them.
Transactions in options on stock indices are subject to the Code rules of
section 1256. Pursuant to these rules, such options, whether sold by the Funds
during a taxable year or held by the Funds at the close of its taxable year,
will be treated as if sold for their market value, with 40% of any resulting
gain or loss treated as short-term and 60% long-term.
A high portfolio turnover rate may result in the realization of larger
amounts of short-term gains, which are taxable to shareholders as ordinary
income.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS Regulations, the Funds may be required to withhold 31% of
all reportable payments including any taxable dividends, capital gains
distributions or share redemption proceeds, for an account which does not have
a taxpayer identification number or social security number and certain required
certifications. The Funds reserve the right to refuse to open an account for
any person failing to provide a taxpayer identification number along with the
required certifications.
The Funds will furnish shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing income tax returns. Investors are urged to consult their
attorney or tax adviser regarding specific questions as to Federal, foreign,
state or local taxes.
THE DISTRIBUTOR
Pursuant to a Distribution Agreement with the Funds, Phoenix Equity
Planning Corporation (the "Distributor"), a wholly-owned subsidiary of Phoenix
Investment Partners, Ltd. and an affiliate of the Adviser, serves as
distributor for the Funds. As such, the Distributor conducts a continuous
offering pursuant to a "best efforts" arrangement requiring the Distributor to
take and pay for only such securities as may be sold to the public. The address
of the Distributor is 100 Bright Meadow Blvd., P.O. Box 2200, Enfield,
Connecticut 06083-2200.
The Distribution Agreement may be terminated at any time on not more than
60 days written notice, without payment of a penalty, by the Distributor, by
vote of a majority of the outstanding voting securities of the Funds, or by
vote of a majority of the Funds' Trustees who are not "interested persons" of
the Funds and who have no direct or indirect financial interest in the
operation of the Distribution Plan or in any related agreements. The
Distribution Agreement will terminate automatically in the event of its
assignment.
Dealers with whom the Distributor has entered into sales agreements
receive sales charges in accordance with the commission table set forth in the
Prospectus. The Distributor may from time to time pay, from its own resources
or pursuant to the Plan of Distribution described below, a bonus or other
incentive to dealers (other than the Distributor) which employ a registered
representative who sells a minimum dollar amount of the shares of the Funds
during a specific period of time. Such bonus or other incentive may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and members of their
families to places within or without the United States or other bonuses such as
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gift certificates or the cash equivalent of such bonuses. The Distributor may,
from time to time, reallow the entire portion of the sales charge which it
normally retains to individual selling dealers. However, such additional
reallowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.
Pasadena Fund Services, Inc. ("PFSI") served as the principal underwriter
for the Funds prior to September 3, 1997. For the fiscal years ended December
31, 1996, 1997 and 1998, purchasers of shares of the Funds paid aggregate sales
charges of $1,370,002, $2,038,126 and $2,334,408, respectively, of which PFSI
and/or the Distributor received net commissions of $623,002, $897,831 and
$707,783, respectively, for its services, the balance being paid to dealers.
For the fiscal year ended December 31, 1998, the Distributor received net
commissions of $101,674 for Class A Shares and deferred sales charges of
$606,109 for Class B and Class C Shares.
Dealer Concessions
Dealers with whom the Distributor has entered into sales agreements
receive a discount or commission as set forth below.
<TABLE>
<CAPTION>
Dealer Discount
Sales Charge Sales Charge or Agency Fee
Amount of Transaction as Percentage as Percentage as Percentage of
at Offering Price of Offering Price of Amount Invested Offering Price
--------------------- ----------------- ------------------ ----------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50% 4.71% 4.00%
$100,000 but under $250,000 3.50% 3.63% 3.00%
$250,000 but under $500,000 3.00% 3.09% 2.75%
$500,000 but under $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in
selling shares to you provided they notify the Distributor of their intention
to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of
the Funds and/or for providing other shareholder services. Depending on the
nature of the services, these fees may be paid either from the Funds through
distribution fees, service fees or transfer agent fees or in some cases, the
Distributor may pay certain fees from its own profits and resources. From its
own profits and resources, the Distributor does intend to: (a) sponsor training
and educational meetings and provide additional compensation to qualifying
dealers in the form of trips, merchandise or expense reimbursements; (b) from
time to time pay special incentive and retention fees to qualified wholesalers,
registered financial institutions and third party marketers; (c) pay
broker/dealers an amount equal to 1% of the first $3 million of Class A Share
purchases by an account held in the name of a qualified employee benefit plan
with at least 100 eligible employees, 0.50% on the next $3 million, plus 0.25%
on the amount in excess of $6 million; and (d) excluding purchases as described
in (c) above, pay broker/dealers an amount equal to 1% of the amount of Class A
Shares sold above $1 million but under $3 million, 0.50% on the next $3
million, plus 0.25% on the amount in excess of $6 million. If part or all of
such investment as described in (c) and (d) above, including investments by
qualified employee benefit plans, is subsequently redeemed within one year of
the investment date, the broker-dealer will refund to the Distributor such
amounts paid with respect to the investment. In addition, the Distributor may
pay the entire applicable sales charge on purchases of Class A Shares to
selected dealers and agents. Any dealer who receives more than 90% of a sales
charge may be deemed to be an "underwriter" under the Securities Act of 1933.
Administration Agreement
Phoenix Equity Planning Corporation ("PEPCO") has entered into an
Administration Agreement with the Trust on behalf of each series of the Trust
including each Fund. Under the Administration Agreement, PEPCO, in its capacity
as Administrator, (a) furnishes each Fund with various administrative and
shareholder services including, but not limited to, (i) preparing and
distributing all shareholder reports, (ii) preparing all tax returns and other
regulatory filings, (iii) Blue Sky compliance services, and (iv) expenses
related to fund accounting and net asset value determination, and (b) pays for
all of the normal operating fees and expenses of a Fund, except for the fees
and expenses related to the services to be provided by the Adviser under the
Investment Management Agreement, certain professional, fiduciary and audit
expenses, including the legal expenses of the independent Trustees, the
independent auditing expenses and expenses related to compensation of the
independent Trustees and the services fees paid under the Services Agreements,
the distribution fees paid under the Rule 12b-1 distribution plans, brokerage
and commission expenses and certain de minimis fees of its independent
auditors, legal counsel and trustees. See "Plans of Distribution."
The Administration Agreement dated as of September 3, 1997, was approved,
with respect to each Fund, by the Board of Trustees of the Trust, including a
majority of the Trustees who are not parties to the Administration Agreement,
and continues in effect until terminated on behalf of any Fund by either party
on 60-days' written notice.
22
<PAGE>
As compensation for its services and obligations under the Administration
Agreement, the Administrator is paid a monthly fee at an annual rate equal to
0.60% of each Funds' average daily net assets up to $50 million, which rate is
reduced at higher levels of net assets. For services to the Trust during the
fiscal years ended December 31, 1996, 1997 and 1998, pursuant to the then-
effective Administration Agreement with the former adviser (the "Former
Adviser") (Roger Engemann Management Co., Inc.) and the current Distributor
(PEPCO), the Trust paid administrative fees (approximately) of $5,517,679,
$5,458,000, and $5,305,000, respectively. Of these totals, the Former Adviser
and/or PEPCO received fees from each Fund as follows:
<TABLE>
<CAPTION>
Fund 1996 1997 1998
- ---- ---- ---- ----
<S> <C> <C> <C>
Growth Fund $3,453,000 $3,078,000 $2,420,000
Nifty Fifty Fund $1,485,000 $1,612,000 $1,655,000
Balanced Return Fund $ 557,000 $ 400,000 $ 445,000
Global Growth Fund $ 12,352* $ 78,000 $ 131,000
Small & Mid-Cap Fund $ 10,327** $ 173,000 $ 434,000
Value 25 Fund N/A $ 117,000 $ 219,000
</TABLE>
* Former Adviser was entitled to $40,856; however, the Former Adviser waived
$28,504 of such fees for 1996.
** Former Adviser was entitled to $18,772; however, the Former Adviser waived
$8,445 of such fees for 1996.
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>
Fund 1st $50 million next $450 million next $125 million over $625 million
- ---- --------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Growth 0.99% 0.50% 0.30% 0.30%
Nifty Fifty 0.99% 0.50% 0.30% 0.30%
Balanced Return 1.09% 0.60% 0.40% 0.40%
Global Growth 0.60% 0.50% 0.40% 0.40%
Small & Mid-Cap Growth 0.60% 0.50% 0.40% 0.40%
Value 25 0.60% 0.50% 0.40% 0.40%
</TABLE>
DISTRIBUTION PLANS
The Trust has adopted separate distribution plans under Rule 12b-1 of the
1940 Act for Class B and Class C of each series of the Trust (the "Class B
Plan," the "Class C Plan," and collectively the "12b-1 Plans"). The 12b-1 Plans
permit the Funds to reimburse the Distributor for expenses incurred in
connection with activities intended to promote the sale of shares of each class
of shares of the Funds.
Pursuant to the 12b-1 Plans, the Funds pay the Distributor 0.75% of the
average daily net assets of the Funds' Class B and Class C Shares,
respectively. Expenditures under the 12b-1 Plans shall consist of: (i)
commissions to sales personnel for selling shares of the Funds (including
underwriting fees and financing expenses incurred in connection with the sale
of Class B Shares); (ii) compensation, sales incentives and payments to sales,
marketing and service personnel; (iii) payments to broker-dealers and other
financial institutions which have entered into agreements with the Distributor
in the form of the Dealer Agreement for Phoenix Funds for services rendered in
connection with the sale and distribution of shares of the Funds; (iv) payment
of expenses incurred in sales and promotional activities, including advertising
expenditures related to the Funds; (v) the costs of preparing and distributing
promotional materials; (vi) the cost of printing the Funds' Prospectuses and
Statements of Additional Information for distribution to potential investors;
and (vii) such other similar services that the Trustees of the Funds determine
are reasonably calculated to result in the sale of shares of the Funds.
From its own resources or pursuant to the Plan, and subject to the
dealers' prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals,
and lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or
dealers' achievement of a sales target. The Distributor may, from time to time,
reallow the entire portion of the sales charge on Class A shares which it
normally retains to individual selling dealers. However, such additional
reallowance generally will be made only when the selling dealer commits to
substantial marketing support such as internal wholesaling through dedicated
personnel, internal communications and mass mailings.
In order to receive payments under the 12b-1 Plans and/or Services
Agreements (described below), participants must meet such qualifications to be
established in the sole discretion of the Distributor, such as services to the
Funds' shareholders; or services providing the Funds with more efficient
methods of offering shares to coherent groups of clients, members or prospects
of a participant; or services permitting bulking of purchases or sales, or
transmission of such purchases or sales by computerized tape or other
electronic equipment; or other processing. If the 12b-1 Plans are terminated in
accordance with their terms, the obligations
23
<PAGE>
of the Funds to make payments to the Distributor pursuant to the 12b-1 Plans
will cease and the Funds will not be required to make any payments past the
date on which each 12b-1 Plan terminates.
On a quarterly basis, the Funds' Trustees review a report on expenditures
under the 12b-1 Plans and the purposes for which expenditures were made. The
Trustees conduct an additional, more extensive review annually in determining
whether the 12b-1 Plans will be continued. By its terms, continuation of the
12b-1 Plans from year to year is contingent on annual approval by a majority of
the Funds' Trustees and by a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the 12b-1 Plans or any related
agreements (the "12b-1 Plan Trustees"). The 12b-1 Plans provide that they may
not be amended to increase materially the costs which the Funds may bear
pursuant to the 12b-1 Plans without approval of the shareholders of the Funds
and that other material amendments to the 12b-1 Plans must be approved by a
majority of the 12b-1 Plan Trustees by vote cast in person at a meeting called
for the purpose of considering such amendments. The 12b-1 Plans further
provides that while it is in effect, the selection and nomination of Trustees
who are not "interested persons" shall be committed to the discretion of the
Trustees who are not "interested persons." The 12b-1 Plans may be terminated at
any time by vote of a majority of the 12b-1 Plan Trustees or a majority of the
outstanding shares of the Funds.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend the Plans.
For the fiscal year ended December 31, 1998, the Funds paid Rule 12b-1
distribution fees in the amount of $3,898,100, of which the principal
underwriter received $1,470,657. W.S. Griffith & Co., Inc., an affiliate,
received $16,306, and unaffiliated broker-dealers reeived $2,411,137.
Distribution fees were used by the Distributor to compensate dealers for the
sale of the Fund's Class B and Class C Shares.
Services Agreements
Under the Services Agreement, each Fund will pay a continuing service fee
to service providers, in an amount, computed and prorated on a daily basis,
equal to 0.25% per annum of the Fund's average daily net assets, which will
include the Adviser or Phoenix Equity Planning Corporation (the "Distributor"),
for shareholder accounts not serviced by other service providers. (Prior to
September 3, 1997, Pasadena Fund Services, Inc. (the "Former Distributor")
served as distributor of the Funds' shares.) Such amounts are compensation for
providing certain services to clients owning shares of such Fund, including
personal services such as processing purchase and redemption transactions,
assisting in change of address requests and similar administrative details, and
providing other information and assistance with respect to such Fund, including
responding to shareholder inquiries.
For the fiscal year ended December 31, 1998, the Funds paid service fees
in the amount of $665,554, of which the principal underwriter received
$446,872, and unaffiliated broker-dealers received $218,682.
MANAGEMENT OF THE TRUST
The Trustees of the Trust are responsible for the overall supervision of
the Funds and perform the various duties imposed on Trustees by the 1940 Act
and Massachusetts business trust law.
Trustees And Officers
The Trustees and Officers of the Trust and their business affiliations for
the past five years are set forth below.
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- --------------------- --------------- -----------------------
<S> <C> <C>
Roger Engemann* (58) Chairman of the Chairman, President and Director of the Adviser since 1969.
600 North Rosemead Board, President and Chairman, President and Director, Pasadena Capital
Boulevard Trustee Corporation (1988-present) and Roger Engemann Management
Pasadena, California 91107 Co., Inc. (1985-present).
John S. Tilson (55) Chief Financial Executive Vice President, Portfolio Manager and Securities
600 North Rosemead Officer and Secretary Analyst with the Adviser since 1983. Executive Vice
Boulevard President and Director of Pasadena Capital Corporation.
Pasadena, California 91107 Executive Vice President, Roger Engemann Management Co.,
Inc. (1994-present)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Trust During the Past 5 Years
- --------------------- -------------- -----------------------
<S> <C> <C>
Barry E. McKinley (63) Trustee Certified Public Accountant; head of B.E. McKinley &
201 South Lake Avenue Associates, an accounting firm, since its inception in 1971.
Suite 400
Pasadena, California 91101
Robert L. Peterson (61) Trustee Private investor. From 1988-1995, Regional Manager for
P.O. Box 80784 Commercial Real Estate Brokerage in the Pasadena office
San Marino, California 91118 of Jon Douglas Company, a real estate firm. Prior thereto he
was associated with the real estate brokerage firm of R.A.
Rowan & Co.
Richard C. Taylor (52) Trustee President of Richard Taylor Company, Inc., a food ingredients
2100 Huntington Drive, #9 broker, since 1987.
San Marino, California 91108
Angela Wong (47) Trustee Since 1986, Ms. Wong has been of counsel to the law firm of
11355 West Olympic Manatt, Phelps, Phillips & Kantor, specializing in employee
Boulevard benefits.
Los Angeles, California 90064
</TABLE>
*Indicates that the Trustee is an "interested person" of the Trust within the
meaning of the definition set forth in Section 2(a)(19) of the Investment
Company Act of 1940.
For services rendered to the Trust for the fiscal year ended December 31,
1998, the Trustees received an aggregate of $80,000. For services on the Board
of Trustees, each Trustee who is not an employee of the Adviser or any of its
affiliates currently receives $2,500 per quarter plus $2,500 for each meeting
attended. The officers of the Trust and the Trustees affiliated with the
Adviser receive no direct compensation for performing the duties of such
offices. However, those officers and Trustees who are affiliated with the
Adviser may receive remuneration indirectly because the Adviser receives
management fees from the Funds.
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
Total
Pension or Compensation
Aggregate Retirement Benefits Estimated From Fund and
Compensation Accrued as Part Annual Benefits Fund Complex
Name From Fund of Fund Expenses Upon Retirement Paid to Trustees
---- ------------ ------------------- --------------- ----------------
<S> <C> <C> <C> <C>
Roger Engemann None None None None
John S. Tilson None None None None
Barry E. McKinley $20,000 None None $20,000
Robert L. Peterson $20,000 None None $20,000
Richard C. Taylor $20,000 None None $20,000
Angela Wong $20,000 None None $20,000
</TABLE>
As of April 9, 1999, the Trustees and Officers of the Trust, as a group,
owned less than 1% of the outstanding shares of the Nifty Fifty Fund and the
Balanced Return Fund. As of April 9, 1999, the Trustees and Officers of the
Trust, as a group, owned 1.08% of the Growth Fund Class A Shares, 10.99% of the
Global Growth Fund Class A Shares, 22.89% of the Value 25 Fund Class A Shares,
and 3.98% of the Small & Mid-Cap Growth Fund Class A Shares.
Principal Shareholders
As of April 9, 1999 the following shareholders, to the Trust's knowledge,
owned of record 5% or more of each Fund's outstanding shares by class, as
noted:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Phoenix-Engemann Growth Fund 45.78% 48.53% 66.23%
Merrill Lynch, Pierce,
Fenner & Smith, Inc.*
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6485
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Phoenix-Engemann Balanced Return Fund 21.85% 41.94% 65.10%
Merrill Lynch, Pierce,
Fenner & Smith, Inc.*
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6485
Phoenix-Engemann Nifty Fifty Fund 40.61% 46.73% 71.04%
Merrill Lynch, Pierce,
Fenner & Smith, Inc.*
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32216
Phoenix-Engemann Global Growth Fund
Merrill Lynch, Pierce,
Fenner & Smith, Inc.* 25.29% 34.96% 48.86%
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32216
Pasadena National Trust 7.89%
Cust for IRA of
Roger Engemann
731 S. Madre Street
Pasadena, California 91107-5662
Union Bank of California 5.94%
FBO Barney Sofro
475 Sansome Street, 11th Floor
San Francisco, California 94111-
3103
Phoenix-Engemann Small & Mid-Cap Growth Fund
Merrill Lynch, Pierce, 35.89% 35.79% 53.25%
Fenner & Smith, Inc.*
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32216
Phoenix-Engemann Value 25 Fund
Pasadena National Trust 16.56%
Cust for IRA #1 of
Roger Engemann
731 S. Madre Street
Pasadena, California 91107-5662
Union Bank of California Cust 7.41%
FBO Moore Investment Partnership
PO Box 109
San Diego, California 92112-4103
Merrill Lynch, Pierce, 7.07% 36.02% 59.34%
Fenner & Smith, Inc.*
Attn: Book Entry
4800 Deer Lake Drive East
Jacksonville, Florida 32216
Pasadena National Trust 6.15%
Cust for IRA #2 of
Roger Engemann
731 S. Madre Street
Pasadena, California 91107-5662
</TABLE>
*Record owner only for its individual customers. To the Trust's knowledge, no
customer beneficially owned 5% or more of the total outstanding shares of any
Class of any Fund.
26
<PAGE>
OTHER INFORMATION
Capital Stock
The Trust was established on May 28, 1986 as a Massachusetts business
trust. The capitalization of the Trust consists solely of an unlimited number
of shares of beneficial interest. The Trust currently offers shares in
different Funds and different classes of those Funds. Holders of shares of a
Fund have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to that Fund, except that Class B
and C Shares of any Fund, which bear higher distribution fees and certain
incrementally higher expenses associated with the deferred sales arrangement,
pay correspondingly lower dividends per share than Class A and M Shares of the
same Fund. Shareholders of all Funds vote on the election of Trustees. On
matters affecting an individual Fund (such as approval of an investment
advisory agreement or a change in fundamental investment policies) and on
matters affecting an individual class (such as approval of matters relating to
a Plan of Distribution for a particular class of shares), a separate vote of
that Fund or class is required. The Trustees will call a meeting when at least
10% of the outstanding shares so request in writing. If the Trustees fail to
call a meeting after being so notified, the Shareholders may call the meeting.
The Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the Investment
Company Act of 1940.
Shares are fully paid, nonassessable, redeemable and fully transferable
when they are issued. Shares do not have cumulative voting rights, preemptive
rights or subscription rights. The assets received by the Funds for the issue
or sale of shares of each Fund, and any class thereof and all income, earnings,
profits and proceeds thereof, are allocated to such Fund, and class,
respectively, subject only to the rights of creditors, and constitute the
underlying assets of such Fund or class. The underlying assets of each Fund are
required to be segregated on the books of account, and are to be charged with
the expenses in respect to such Fund and with a share of the general expenses
of the Trust. Any general expenses of the Trust not readily identifiable as
belonging to particular Fund or class will be allocated by or under the
direction of the Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that
effect. The Declaration of Trust provides for indemnification out of the Trust
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Trust. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability, which is considered remote,
is limited to circumstances in which the Trust itself would be unable to meet
its obligations.
Independent Accountants
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, is the independent accountants for the Funds. PricewaterhouseCoopers LLP
audits the Funds' annual financial statements and expresses an opinion thereon.
Custodian and Transfer Agent
The custodian of the assets of the Funds (other than the Global Growth
Fund) is Union Bank of California, 475 Sansome Street, San Francisco,
California 94111. The custodian of the assets of the Global Growth Fund is
State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts 02101.
Pursuant to a Transfer Agent and Service Agreement with the Trust, Equity
Planning serves as transfer agent for the Funds (the "Transfer Agent") for
which it is paid $14.95 plus certain out of pocket expenses for each designated
shareholder account. The Transfer Agent engages sub-agents to perform certain
shareholder servicing functions for which such agents are paid a fee by Equity
Planning.
Report to Shareholders
The fiscal year of the Trust ends on December 31. The Trust will send
financial statements to its shareholders at least semiannually. An Annual
Report containing financial statements audited by the Trust's independent
accountants will be sent to shareholders each year.
Financial Statements
The Financial Statements for the Fund's fiscal year ended December 31,
1998, appearing in the Fund's 1998 Annual Report to Shareholders, are
incorporated herein by reference.
27
<PAGE>
APPENDIX
Moody's Investors Service, Inc. Corporate Bond Ratings
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa Group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A--Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C--Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Standard & Poor's Corporation's Corporate Bond Ratings
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
28
<PAGE>
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>
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>
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>
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>
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>
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>
THE PHOENIX-ENGEMANN FUNDS
FORM N-1 A
PART C--OTHER INFORMATION
Item 23. Exhibits.
<TABLE>
<S> <C>
a.1 Amended and Restated Agreement and Declaration of Trust(5)
b. By-Laws(1)
c. Reference is made to Registrant's Amended and Restated Agreement and Declaration of Trust, as
amended, and filed as described in a.1. above
d. Investment Management Agreement
e.1. Distribution Agreement with Phoenix Equity Planning Corporation
e.2. Form of Sales Agreement between Phoenix Equity Planning Corporation and dealers
e.3. Form of Supplement to Phoenix Family of Funds Sales Agreement
e.4. Form of Financial Institution Sales Contract for the Phoenix Family of Funds
f. Bonus, Profit Sharing, Pension and Other Similar Arrangements--None
g. Custodian Agreement(1)
h.1. Other Material Contracts--Agreement and Plan of Reorganization(1)
h.2. Administration Agreement(10)
h.3. Sub-Administration Agreement(11)
i. Opinion and Consent of Counsel(1) [Consent or new opinion of counsel
to be filed by amendment.]
j.* Consent of Certified Public Accountants
k. Financial Statements Omitted from Item 23--Not applicable
l. Letter of Understanding relating to initial capital--Not Applicable
m.1. Rule 12b-1 Plan For Class B Shares
m.2. Rule 12b-1 Plan For Class C Shares
n.27.* Financial Data Schedules
o.1. Restated and Amended Multiple Class Plan(11)
p. Powers of Attorney(11)
</TABLE>
- -----------
* Filed herewith
(1) Previously filed as part of Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement as filed in June 1986.
(2) Previously filed as part of Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement as filed on January 22, 1986.
(3) Previously filed as part of Post-Effective Amendment No. 11 to the
Registrant's Registration Statement as filed on April 16, 1992.
(4) Previously filed as part of Post-Effective Amendment No. 12 to the
Registrant's Registration Statement as filed on December 23, 1992.
(5) Previously filed as part of Post-Effective Amendment No. 14 to the
Registrant's Registration Statement as filed on August 27, 1993.
(6) Previously filed as part of Post-Effective Amendment No. 15 to the
Registrant's Registration Statement as filed on October 29, 1993.
(7) Previously filed as part of Post-Effective Amendment No. 18 to the
Registrant's Registration Statement as filed on August 10, 1994.
(8) Previously filed as part of Post-Effective Amendment No. 20 to the
Registrant's Registration Statement as filed on April 24, 1996.
(9) Previously filed as part of Post-Effective Amendment No. 25 to the
Registrant's Registration Statement as filed on September 4, 1997.
(10) Previously filed as part of Post-Effective Amendment No. 26 to the
Registrant's Registration Statement as filed on September 30, 1997.
C-1
<PAGE>
(11) Previously filed as part of Post-Effective Amendment No. 27 to the
Registrant's Registration Statement as filed on November 21, 1997.
Item 24. Persons Controlled by or Under Common Control with the Fund
None.
Item 25. Indemnification
Please see Article VI of the Registrant's By-Laws, previously filed as an
Exhibit. Pursuant to Rule 484 under the Securities Act of 1933, as amended, the
Registrant furnishes the following undertaking:
"Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue."
Notwithstanding the provisions contained in the Registrant's By-Laws, in
the absence of authorization by the appropriate court on the merits pursuant to
Sections 4 and 5 of Article VI of said By-Laws, any indemnification under said
Article shall be made by Registrant only if authorized in the manner provided
in either subsection (a) or (b) of Section 6 of said Article VI.
Item 26. Business and Other Connections of Investment Adviser
Please see Parts A and B of this Registration Statement for discussion of
the Adviser.
For information as to the business, profession, vocation or employment of
a substantial nature of the directors and officers of the Adviser, reference is
made to the Adviser's current Form ADV (SEC File No. 801-11586) filed under the
Investment Advisers Act of 1940 and incorporated herein by reference.
Item 27. Principal Underwriters
(a) Equity Planning also serves as the principal underwriter for the following
other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities
Fund, Phoenix California Tax Exempt Bonds, Inc., Phoenix Duff & Phelps
Institutional Mutual Funds, Phoenix-Engemann Funds, Phoenix Equity Series
Fund, Phoenix-Euclid Funds, Phoenix Income and Growth Fund, Phoenix
Investment Trust 97, Phoenix Multi-Portfolio Fund, Phoenix Multi-Sector
Fixed Income Fund, Inc., Phoenix Multi-Sector Short Term Bond Fund,
Phoenix-Seneca Funds, Phoenix Series Fund, Phoenix Strategic Allocation
Fund, Inc., Phoenix Strategic Equity Series Fund, Phoenix-Zweig Trust, PHL
Variable Accumulation Account, PHL Variable Separate Account MVAI, Phoenix
Home Life Variable Accumulation Account, Phoenix Home Life Variable
Universal Life Account, Phoenix Life and Annuity Variable Universal Life
Account.
(b) The directors and executive officers of Phoenix Equity Planning
Corporation, the distributor for Registrant, are as follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Position and Offices
Business Address with Distributor with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Michael E. Haylon Director None
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President None
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Senior Vice President and None
100 Bright Meadow Blvd. Chief Financial Officer
P.O. Box 2200
Enfield, CT 06083-2200
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Position and Offices
Business Address with Distributor with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
John F. Sharry Executive Vice President, None
56 Prospect Street Retail Distribution
P.O. Box 150480
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director, None
56 Prospect Street Operations and Services
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Mutual Fund None
101 Munson Street Customer Service
Greenfield, MA 01301
Nancy G. Curtiss Vice President and Treasurer, Assistant Treasurer
56 Prospect Street Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
56 Prospect Street Secretary
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, None
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
Item 28. Locations of Accounts and Records
The accounts, books or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are kept by the Registrant at its offices, 600 North Rosemead Boulevard,
Pasadena, CA 91107-2133. Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., Enfield, Connecticut 06082, is the Registrant's transfer agent, and
maintains records relating to such activities. State Street Bank and Trust
Company, c/o BFDS, Two Heritage Drive, Boston, MA 02171, as sub-transfer agent,
maintains various shareholder account records and information regarding the
Global Growth, Balanced Return, Growth, Nifty Fifty, Small & Mid-Cap Growth and
Value 25 Funds. The custodian of the assets of the Funds (other than the Global
Growth Fund), Union Bank of California, maintains certain records at 475
Sansome Street, San Francisco, California 94111. State Street Bank and Trust
Company, the custodian for the Global Growth Fund, maintains records at P.O.
Box 351, Boston, Massachusetts 02101. The Registrant's investment advisor,
Roger Engemann & Associates, Inc., maintains records relating to its services
at its offices, 600 North Rosemead Boulevard, Pasadena, California 91107-2133.
Item 29. Management Services
There are no management-related service contracts not discussed in Part A
or Part B of this Registration Statement.
Item 30. Undertakings
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Fund certifies that it meets all of the
requirements for effectiveness of this registration statement under rule 485(b)
under the Securities Act and has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, duly authorized, in
the City of Pasadena, the State of California, on the 3rd day of May, 1999.
THE PHOENIX-ENGEMANN FUNDS
By: /s/ Roger Engemann*
-----------------------------------
Roger Engemann
President
Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed below by the following persons in the
capacities indicated on the 3rd day of May, 1999.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
- ---------------------------- Principal Executive
Roger Engemann* Officer and Trustee
Trustee
- ----------------------------
Barry E. McKinley*
Trustee
- ----------------------------
Robert L. Peterson*
Trustee
- ----------------------------
Richard C. Taylor*
/s/ John S. Tilson Chief Financial
- ---------------------------- Officer and Secretary
John S. Tilson
Trustee
- ----------------------------
Angela Wong*
By: /s/ Thomas N. Steenburg
--------------------------
*Thomas N. Steenburg,
Attorney-in-Fact, pursuant to Powers of
Attorney previously filed
</TABLE>
S-1(c)
Exhibit J
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 30 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated February 11, 1999, relating to the financial
statements and financial highlights appearing in the December 31, 1998 Annual
Report to Shareholders of the Phoenix-Engemann Funds, which are also
incorporated by reference into the Registration Statement. We also consent to
the reference to us under the heading "Financial Highlights" in the Prospectus
and under the heading "Other Information--Independent Accountants" in the
Statement of Additional Information.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
April 28, 1999
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