<PAGE>
PHOENIX INVESTMENT PARTNERS
ANNUAL REPORT
DECEMBER 31, 1999
ENGEMANN
Phoenix-Engemann
Balanced Return Fund
Phoenix-Engemann
Focus Growth Fund
Phoenix-Engemann
Nifty Fifty Fund
Phoenix-Engemann
Small & Mid-Cap
Growth Fund
Phoenix-Engemann
Value 25 Fund
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE CHAIRMAN
DEAR SHAREHOLDER:
[PHOTO]
Midst the glee of welcoming in a new millennium and bidding adieu to an
innocuous Y2K bug, there was additional cause for celebration by shareholders in
the Phoenix-Engemann Funds. More details follow, but here is a performance
snapshot.
The Phoenix-Engemann Nifty Fifty Fund and the Phoenix-Engemann Balanced Fund
posted double-digit returns, outperforming their benchmarks. Based on the net
asset value of Class A shares, shareholders in the Phoenix-Engemann Focus Growth
Fund enjoyed an extraordinary return of nearly 50% for the year, and
shareholders in the Phoenix-Engemann Small & Mid-Cap Growth Fund saw their
shares rise over 80% in value. Both funds clearly benefited from the strong
performance tech stocks experienced in 1999.
The selectivity of 1999's advance in stocks was remarkable. Technology
companies were the hands-down winners. In fact, excluding the technology sector,
the S&P 500's(1) 21.1% gain for the year would have been reduced to 3.1%. The
extraordinary market selectivity was also evident in the differential result of
growth and value investment approaches--one reason the Phoenix-Engemann Value 25
Fund lagged in its return. Not only does the Fund emphasize value, it also
emphasizes dividend yield. Last year wasn't the year for value or dividend
yield.
Can the markets continue their unprecedented run of double-digit gains? While
it is impossible to guess what lies ahead, this may be a good time to recall
some old-fashioned "rules of investing": (1) DIVERSIFY, (2) STICK WITH YOUR
LONG-TERM INVESTMENT PLAN, and (3) IGNORE THE HERD.
DIVERSIFICATION can't cure volatility or extreme market selectivity, but it
can be great balm for its pain. If you include large-cap, small-cap, growth,
value, and balanced funds in your portfolio, you may not earn the peak return of
the best one...but you'll avoid having everything in the one category that takes
the biggest fall.
STICK WITH YOUR PLAN is what I refer to as "stay on the train." Decide on your
goal, select the investments you feel comfortable with to get you there, and
then muster the courage to hang on through a bumpy ride. Trying to time the
market is something even experts seldom do successfully.
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
1
<PAGE>
MESSAGE FROM THE CHAIRMAN (CONTINUED)
IGNORE THE HERD when the market slides and headlines rail against stocks. It's
tempting to pull out of the market and tuck your dollars under the mattress, but
that's when it's time to remind yourself that company fundamentals propel stock
prices over the long term.
What is our outlook for the future? Can stocks continue with their
extraordinary upward movement? With many market indices at all-time highs at the
end of the year, there are those that predict misfortune ahead. Certainly in the
early days of 2000, we saw a bit of a correction.
Yet, despite lofty prices and a relentless market climb, particularly in
dot.com issues, we see little cause for a reversal ahead. The economy is strong,
inflation looks as if it will remain tame, and earnings keep on growing. Such
ingredients are typically conducive to a thriving stock market. The Fed may or
may not hike interest rates, but uncertainty over that issue tends to keep a lid
on outlandish investor euphoria.
So as always, we will side with the optimists and say that "yes," we believe
another good year lies ahead. Perhaps not as high into the double digits as
we've seen in the past few years, but pleasantly good nonetheless.
If you have any questions, please contact your financial advisor or call us at
1-800-243-1574 between 8:00 a.m. and 6:00 p.m. Eastern Time, Monday through
Friday.
Sincerely,
/s/ Roger Engemann
Roger Engemann
JANUARY 14, 2000
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Phoenix-Engemann Balanced Return Fund..................................... 4
Phoenix-Engemann Focus Growth Fund........................................ 13
Phoenix-Engemann Nifty Fifty Fund......................................... 21
Phoenix-Engemann Small & Mid-Cap Growth Fund.............................. 30
Phoenix-Engemann Value 25 Fund............................................ 40
Notes to Financial Statements............................................. 48
</TABLE>
3
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ROGER ENGEMANN, CFA,
JAMES MAIR, CFA, AND JOHN TILSON, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks to maximize total investment return, consistent with
reasonable risk by investing in a mix of high quality growth stocks and U.S.
government securities.
Q: HOW DID THE FUND PERFORM FOR THE 12 MONTHS ENDED DECEMBER 31, 1999?
A: The Phoenix-Engemann Balanced Fund had another good year in 1999. Class A
shares returned 18.10%, Class B shares returned 17.22%, and Class C shares
returned 17.22% compared with a return of 12.21% for the Fund's benchmark
index(1) and an average return of 8.69% for a peer universe of 449 balanced
funds, according to Lipper, Inc. All performance figures assume reinvestment of
dividends and exclude the effect of sales charges.
Q: WHAT WERE THE PRIMARY REASONS BEHIND THE FUND'S SUCCESS IN 1999?
A: Our heavy emphasis on the technology sector was the primary reason for the
Fund's outperformance this year. Names like Sun Microsystems, EMC Corp, Cisco
Systems, and Texas Instruments were all up in excess of 100% for the year. In
fact, Sun Microsystems was up 208% for 1999. In non-technology sectors, we saw
strong performance from names like Home Depot (up 69%) and Citigroup (up 70%).
Q: WHAT WERE SOME OF THE DISAPPOINTMENTS OF THE FUND IN 1999?
A: Avon and Tyco were two disappointments this year. Both were new positions for
us in 1999 and both traded down during the year. We expected Avon to grow at a
high-teens rate through a successful restructuring of its operations and
improved growth overseas. This thesis did not play out as we expected, and we
subsequently sold the stock. Tyco's valuation fell during the year as some
questioned the legitimacy of the company's accounting practices. Although we are
disappointed with the stock performance in 1999, our growth expectations for the
company have not changed. We expect Tyco to get past the accounting issue and
look for Tyco to be a strong performer in 2000.
Q: HOW DID THE FIXED-INCOME PORTION OF THE PORTFOLIO PERFORM DURING THE YEAR?
A: Last year was not the best of times for the bonds in the portfolio, given
that the Fed increased interest rates three separate times in 1999. When
interest rates rise, the value of the bonds in the portfolio declines.
However, volatility in the bond market sometimes presents certain
opportunities. In November, we swapped Treasury bonds that matured in 2026 for
ones that matured in 2016. This trade lowered
(1) THE FUND'S BENCHMARK IS A COMPOSITE OF 60% OF THE S&P 500 INDEX RETURN, 30%
OF THE LEHMAN BROTHERS GOVERNMENT/CORPORATE INDEX RETURN, AND 10% OF THE
90-DAY TREASURY BILL RETURN. THE S&P IS A COMMONLY USED MEASURE OF STOCK
MARKET TOTAL RETURN PERFORMANCE. THE LEHMAN BROTHERS GOVERNMENT/ CORPORATE
INDEX IS A COMMONLY USED MEASURE OF BOND MARKET TOTAL RETURN PERFORMANCE.
THE INDICES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT. THE
90-DAY TREASURY BILL IS A COMMONLY USED MEASURE OF SHORT-TERM DEBT TOTAL
RETURN PERFORMANCE.
4
<PAGE>
PHOENIX-ENGEMANN BALANCED RETURN FUND (CONTINUED)
the duration (i.e., a technical measure of volatility) of the portfolio, while
increasing the portfolio yield. It also allowed us to realize some capital
losses in the bonds that were used to offset other gains.
Q: WHAT IS THE OUTLOOK FOR THE FUND IN 2000?
A: We continue to see the best growth prospects in the technology sector. The
Fund will continue to emphasize technology in the portfolio, although we expect
the sector to be volatile. We believe the Fund's large weight in fixed-income
should provide our investors an excellent way to participate in this growth
without the level of volatility seen in our other growth funds.
JANUARY 31, 2000
5
<PAGE>
Phoenix-Engemann Balanced Return Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 12/31/99 DATE
------ ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 18.10% 22.14% 14.42% -- --
Class A Shares at POP(3) 12.49 20.95 13.86 -- --
Class B Shares at NAV(2) 17.22 21.19 -- 16.42% 1/3/94
Class B Shares with CDSC(4) 13.22 21.19 -- 16.42 1/3/94
Class C Shares at NAV(2) 17.22 21.19 -- 16.42 1/3/94
Class C Shares with CDSC(4) 17.22 21.19 -- 16.42 1/3/94
Balanced Benchmark(6) 12.21 19.83 13.85 16.07 Note 7
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase.
CDSC charges for B shares decline from 5% to 0% over a five year period.
CDSC charges for C shares are 1% in the first year and 0% thereafter.
(5) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B and Class C Shares will vary due to differing sales charges.
(6) The Balanced Benchmark is a composite index made up of 60% of the S&P 500
Index return, 30% of the Lehman Brothers Government/Corporate Bond Index
return and 10% of the 90-day Treasury Bill return. The Index's performance
does not reflect sales charges.
(7) Index information from 1/31/94 to 12/31/99.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN BALANCED RETURN FUND CLASS A(5) BALANCED BENCHMARK(6)
<S> <C> <C>
89 $9,525.00 $10,000.00
90 $9,487.00 $10,150.00
91 $13,177.00 $12,558.00
92 $13,768.00 $13,475.00
93 $14,104.00 $14,775.00
94 $13,479.00 $14,807.00
95 $17,142.00 $19,015.00
96 $20,191.00 $21,884.00
97 $24,024.00 $26,955.00
98 $31,019.00 $32,599.00
99 $36,633.00 $36,580.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/31/89 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater than that
shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 50%
Consumer Cyclicals 18%
Health-Care 13%
Financials 8%
Communication Services 7%
Capital Goods 3%
Consumer Staples 1%
</TABLE>
6
<PAGE>
Phoenix-Engemann Balanced Return Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. U.S. Government Securities 24.5%
U.S. TREASURY BONDS & NOTES
2. Cisco Systems, Inc. 5.4%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
3. MCI WorldCom, Inc. 5.1%
COMPREHENSIVE TELECOMMUNICATIONS SERVICE PROVIDER
4. Texas Instruments, Inc. 4.5%
LEADING SUPPLIER OF DIGITAL SIGNAL PROCESSORS FOR THE COMMUNICATION
MARKET
5. Microsoft Corp. 4.2%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
6. Home Depot, Inc. (The) 4.2%
LEADING HOME IMPROVEMENT RETAILER
7. BMC Software, Inc. 3.7%
DEVELOPER OF IBM-COMPATIBLE SOFTWARE
8. Intel Corp. 3.5%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
9. EMC Corp. 2.9%
LEADING SUPPLIER OF ENTERPRISE STORAGE SOLUTIONS
10. Lucent Technologies, Inc. 2.8%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- ---------------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--24.5%
U.S. TREASURY BONDS--12.9%
U.S. Treasury Bonds 9.25%,
2/15/16....................... AAA $ 18,000 $ 22,223,486
U.S. TREASURY NOTES--11.6%
U.S. Treasury Notes 6.50%,
8/15/05....................... AAA 20,000 19,994,824
- ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $43,430,557) 42,218,310
- ----------------------------------------------------------------------------
<CAPTION>
SHARES
--------
COMMON STOCKS--72.8%
<S> <C> <C> <C>
BANKS (MAJOR REGIONAL)--0.8%
Wells Fargo Co................ 35,000 1,415,312
COMMUNICATIONS EQUIPMENT--5.6%
Lucent Technologies, Inc...... 65,000 4,862,812
Tellabs, Inc.(b).............. 75,000 4,814,062
---------------------
9,676,874
---------------------
COMPUTERS (HARDWARE)--4.5%
Dell Computer Corp.(b)........ 37,000 1,887,000
International Business
Machines Corp................. 16,000 1,728,000
Sun Microsystems, Inc.(b)..... 52,000 4,026,750
---------------------
7,641,750
---------------------
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
COMPUTERS (NETWORKING)--5.4%
Cisco Systems, Inc.(b)........ 87,000 $ 9,319,875
COMPUTERS (PERIPHERALS)--2.9%
EMC Corp.(b).................. 46,000 5,025,500
COMPUTERS (SOFTWARE & SERVICES)--9.6%
America Online, Inc.(b)....... 38,000 2,866,625
BMC Software, Inc.(b)......... 80,000 6,395,000
Microsoft Corp.(b)............ 62,000 7,238,500
---------------------
16,500,125
---------------------
ELECTRICAL EQUIPMENT--1.8%
General Electric Co........... 20,000 3,095,000
ELECTRONICS (SEMICONDUCTORS)--8.0%
Intel Corp.................... 73,000 6,008,812
Texas Instruments, Inc........ 80,000 7,750,000
---------------------
13,758,812
---------------------
FINANCIAL (DIVERSIFIED)--4.6%
American Express Co........... 19,000 3,158,750
Citigroup, Inc................ 70,500 3,917,156
Freddie Mac................... 19,000 894,188
---------------------
7,970,094
---------------------
HEALTH CARE (DIVERSIFIED)--2.6%
Warner-Lambert Co............. 55,000 4,506,563
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--4.5%
Merck & Co., Inc.............. 58,000 3,889,625
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Engemann Balanced Return Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--CONTINUED
Pfizer, Inc................... 120,000 $ 3,892,500
---------------------
7,782,125
---------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.2%
Medtronic, Inc................ 104,000 3,789,500
INVESTMENT BANKING/BROKERAGE--0.4%
Merrill Lynch & Co., Inc...... 7,000 584,500
LODGING-HOTELS--1.4%
Carnival Corp................. 50,000 2,390,625
MANUFACTURING (DIVERSIFIED)--0.9%
Tyco International Ltd........ 40,000 1,555,000
RETAIL (BUILDING SUPPLIES)--4.2%
Home Depot, Inc. (The)........ 105,000 7,199,063
RETAIL (DRUG STORES)--0.6%
Walgreen Co................... 36,000 1,053,000
RETAIL (GENERAL MERCHANDISE)--4.7%
Costco Wholesale Corp.(b)..... 30,000 2,737,500
Dayton Hudson Corp.(b)........ 48,000 3,525,000
Wal-Mart Stores, Inc.......... 25,000 1,728,125
---------------------
7,990,625
---------------------
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
RETAIL (SPECIALTY)--0.8%
Staples, Inc.(b).............. 68,000 $ 1,411,000
SERVICES (ADVERTISING/MARKETING)--1.6%
Interpublic Group of Cos.,
Inc. (The).................... 48,000 2,769,000
SERVICES (COMMERCIAL & CONSUMER)--0.6%
Cendant Corp.(b).............. 38,000 1,009,375
TELECOMMUNICATIONS (LONG DISTANCE)--5.1%
MCI WorldCom, Inc.(b)......... 163,500 8,675,719
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $72,614,890) 125,119,437
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--97.3%
(IDENTIFIED COST $116,045,447) 167,337,747(a)
Cash and receivables, less liabilities--2.7% 4,576,421
---------------------
NET ASSETS--100.0% $ 171,914,168
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $54,354,476 and gross
depreciation of $3,062,176 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purposes was
$116,045,447.
(b) Non-income producing.
See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Balanced Return Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $116,045,447) $ 167,337,747
Cash 3,240,835
Receivables
Dividends and interest 1,155,077
Fund shares sold 766,688
--------------
Total assets 172,500,347
--------------
LIABILITIES
Payables
Fund shares repurchased 195,930
Distribution fee 181,548
Investment advisory fee 104,046
Administration fee 75,531
Trustees' fee 5,428
Accrued expenses 23,696
--------------
Total liabilities 586,179
--------------
NET ASSETS $ 171,914,168
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 120,639,234
Accumulated net realized loss (17,366)
Net unrealized appreciation 51,292,300
--------------
NET ASSETS $ 171,914,168
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $123,482,321) 3,182,804
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 $30,579,915) 801,956
Net asset value and offering price per share $38.13
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $17,851,932) 467,186
Net asset value and offering price per share $38.21
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 2,319,314
Dividends 376,564
-------------
Total investment income 2,695,878
-------------
EXPENSES
Investment advisory fee 931,902
Distribution fee, Class A 233,049
Distribution fee, Class B 207,186
Distribution fee, Class C 121,488
Administration 680,433
Professional 20,268
Trustees 12,365
-------------
Total expenses 2,206,691
-------------
NET INVESTMENT INCOME 489,187
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 5,917,606
Net change in unrealized appreciation (depreciation) on
investments 17,431,518
-------------
NET GAIN ON INVESTMENTS 23,349,124
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 23,838,311
=============
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix-Engemann Balanced Return Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 489,187 $ 790,648
Net realized gain (loss) 5,917,606 8,795,193
Net change in unrealized appreciation
(depreciation) 17,431,518 11,029,950
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 23,838,311 20,615,791
------------ -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (489,187) (718,900)
Net investment income, Class B -- (51,501)
Net investment income, Class C -- (31,607)
Net realized gains, Class A (6,406,492) (4,454,688)
Net realized gains, Class B (1,606,363) (700,523)
Net realized gains, Class C (906,849) (468,778)
In excess of net investment income,
Class A (25,941) --
In excess of net realized gains,
Class A (29,581) --
In excess of net realized gains,
Class B (7,417) --
In excess of net realized gains,
Class C (4,187) --
------------ -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (9,476,017) (6,425,997)
------------ -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,413,697 and 511,438 shares,
respectively) 51,433,069 16,268,814
Net asset value of shares issued from
reinvestment of distributions
(167,310 and 140,176 shares,
respectively) 6,421,251 4,824,840
Cost of shares repurchased (483,447
and 514,775 shares, respectively) (17,823,682) (16,514,937)
------------ -----------
Total 40,030,638 4,578,717
------------ -----------
CLASS B
Proceeds from sales of shares (521,062
and 131,818 shares, respectively) 18,703,613 4,376,531
Net asset value of shares issued from
reinvestment of distributions
(37,162 and 20,594 shares,
respectively) 1,402,126 699,581
Cost of shares repurchased (91,202 and
72,187 shares, respectively) (3,292,239) (2,275,763)
------------ -----------
Total 16,813,500 2,800,349
------------ -----------
CLASS C
Proceeds from sales of shares (263,121
and 69,806 shares, respectively) 9,526,650 2,171,650
Net asset value of shares issued from
reinvestment of distributions
(21,486 and 13,470 shares,
respectively) 812,372 458,553
Cost of shares repurchased (38,401 and
56,060 shares, respectively) (1,373,573) (1,759,923)
------------ -----------
Total 8,965,449 870,280
------------ -----------
CLASS M
Proceeds from sales of shares (0 and
3,393 shares, respectively) -- 100,100
Cost of shares repurchased (0 and
3,393 shares, respectively) -- (112,685)
------------ -----------
Total -- (12,585)
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS 65,809,587 8,236,761
------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS 80,171,881 22,426,555
------------ -----------
NET ASSETS
Beginning of period 91,742,287 69,315,732
------------ -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF $0
AND $0, RESPECTIVELY] $171,914,168 $91,742,287
============ ===========
</TABLE>
10 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,
-----------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 34.83 $ 29.05 $ 28.08 $ 25.39 $ 20.54
INCOME FROM INVESTMENT
OPERATIONS(4)
Net investment income (loss) 0.21(1) 0.40 0.30(1) 0.29(1) 0.27(1)
Net realized and unrealized
gain (loss) 6.07 8.03 4.98 4.23 5.31
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 6.28 8.43 5.28 4.52 5.58
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.16) (0.40) (0.32) (0.30) (0.29)
Dividends from net realized
gains (2.13) (2.25) (3.99) (1.53) (0.44)
In excess of net investment
income (0.01) -- -- -- --
In excess of net realized
gains (0.01) -- -- -- --
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (2.31) (2.65) (4.31) (1.83) (0.73)
------- ------- ------- ------- -------
Change in net asset value 3.97 5.78 0.97 2.69 4.85
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $38.80 $34.83 $29.05 $28.08 $25.39
======= ======= ======= ======= =======
Total return(2) 18.10% 29.12% 18.98% 17.78% 27.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $123,482 $72,620 $56,610 $51,947 $52,028
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.56% 1.63% 1.7%(3) 2.0%(3) 2.1%
Net investment income (loss) 0.58% 1.15% 1.0% 1.1% 1.2%
Portfolio turnover 41% 124% 40.3% 35.1% 51.1%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratios of operating expenses to average net assets would have been 1.70%
and 2.10% for the periods ended December 31, 1997 and 1996, respectively.
(4) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
See Notes to Financial Statements
11
<PAGE>
Phoenix-Engemann Balanced Return Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $34.37 $28.76 $27.85 $25.26 $20.49
INCOME FROM INVESTMENT OPERATIONS(4)
Net investment income (loss) (0.06)(1) 0.13 0.08(1) 0.09(1) 0.08(1)
Net realized and unrealized gain
(loss) 5.96 7.91 4.93 4.16 5.29
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 5.90 8.04 5.01 4.25 5.37
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.18) (0.11) (0.13) (0.16)
Dividends from net realized gains (2.13) (2.25) (3.99) (1.53) (0.44)
In excess of net realized gains (0.01) -- -- -- --
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (2.14) (2.43) (4.10) (1.66) (0.60)
------- ------- ------- ------- -------
Change in net asset value 3.76 5.61 0.91 2.59 4.77
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $38.13 $34.37 $28.76 $27.85 $25.26
======= ======= ======= ======= =======
Total return(2) 17.22 % 28.06% 18.15% 16.82% 26.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $30,580 $11,512 $7,125 $4,609 $2,721
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.30 % 2.38% 2.4%(3) 2.7%(3) 2.9%
Net investment income (loss) (0.16)% 0.39% 0.3% 0.3% 0.3%
Portfolio turnover 41 % 124% 40.3% 35.1% 51.1%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.44 $ 28.80 $ 27.88 $ 25.28 $ 20.48
INCOME FROM INVESTMENT OPERATIONS(4)
Net investment income (loss) (0.06)(1) 0.14 0.08(1) 0.09(1) 0.07(1)
Net realized and unrealized gain
(loss) 5.97 7.92 4.92 4.16 5.30
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 5.91 8.06 5.00 4.25 5.37
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.17) (0.09) (0.12) (0.13)
Dividends from net realized gains (2.13) (2.25) (3.99) (1.53) (0.44)
In excess of net realized gains (0.01) -- -- -- --
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (2.14) (2.42) (4.08) (1.65) (0.57)
------- ------- ------- ------- -------
Change in net asset value 3.77 5.64 0.92 2.60 4.80
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $38.21 $34.44 $28.80 $27.88 $25.28
======= ======= ======= ======= =======
Total return(2) 17.22 % 28.07% 18.11% 16.79% 26.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $17,852 $7,610 $5,581 $4,183 $2,809
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.30 % 2.38% 2.4%(3) 2.7%(3) 2.9%
Net investment income (loss) (0.16)% 0.39% 0.3% 0.3% 0.3%
Portfolio turnover 41 % 124% 40.3% 35.1% 51.1%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratios of operating expenses to average net assets would have been 2.50%
and 2.80% for the periods ended December 31, 1997 and 1996, respectively.
(4) 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.
12
See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN FOCUS GROWTH FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund's investment objective is long-term growth of capital.
Q: WHY WAS THE FUND'S NAME CHANGED?
A: We now manage three funds, using our growth approach. The distinguishing
feature of each fund is the number of stocks it holds, which offers investors a
choice in their level of diversification. The Phoenix-Engemann Focus Growth Fund
will typically hold 25-35 stocks.
Q: HOW DID THE FUND PERFORM OVER THE LAST YEAR?
A: For the 12 months ended December 31, 1999, Class A shares returned 49.74%,
Class B shares returned 48.64%, and Class C shares returned 48.64% compared with
a return of 21.14% for the S&P 500 Index(1) and an average return of 38.09% for
a peer universe of 364 growth funds, according to Lipper, Inc. Investors should
consider all performance periods and the effect of the past 12 months' strong
stock market when evaluating funds. All performance figures assume the
reinvestment of distributions and exclude the effect of sales charges.
Q: WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE RESULTS?
A: An emphasis on technology stocks, which we continued to overweight throughout
the year, coupled with good stock selection across several sectors, benefited
performance. We focused on companies that we believed were well positioned
within the fastest growing sectors of the economy. For example, we owned JDS
Uniphase, Nokia, and QUALCOMM, leaders in the rapidly developing wireless and
broadband sector of the telecommunications industry. In addition, several
consumer cyclical holdings performed very well, including Costco, Home Depot,
and Wal-Mart.
Our decision to decrease portfolio exposure to several sectors that lagged
the market also enhanced performance. Primarily, we lowered or eliminated our
exposure to financials, consumer staples, and health-care stocks.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We continue to believe a company's earnings growth is key to its stock price.
As in 1999, the market is likely to highly reward companies with demonstrated
earnings power and severely punish companies that disappoint. We expect many
exciting growth stories to continue to come from the technology sector. With
consumers' rapid acceptance of the Internet, the build-out of broadband and
wireless infrastructure has been accelerated. This should ensure another year of
buoyant profit for leading networking and computer companies.
JANUARY 31, 2000
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
13
<PAGE>
Phoenix-Engemann Focus Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 12/31/99 DATE
------- ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 49.74% 30.04% 18.63% -- --
Class A Shares at POP(3) 42.63 28.78 18.05 -- --
Class B Shares at NAV(2) 48.64 29.06 -- 22.91% 1/3/94
Class B Shares with CDSC(4) 44.64 29.06 -- 22.91 1/3/94
Class C Shares at NAV(2) 48.64 29.06 -- 22.91 1/3/94
Class C Shares with CDSC(4) 48.64 29.06 -- 22.91 1/3/94
S&P 500 Index(6) 21.14 28.66 18.25 23.71 1/3/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B and Class C Shares will vary due to differing sales charges.
(6) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN FOCUS GROWTH FUND CLASS A(5) S&P 500 INDEX(6)
<S> <C> <C>
89 $9,525.00 $10,000.00
90 $9,092.00 $9,681.00
91 $15,260.00 $12,637.00
92 $15,602.00 $13,609.00
93 $14,686.00 $14,970.00
94 $14,135.00 $15,168.00
95 $17,974.00 $20,857.00
96 $22,017.00 $25,706.00
97 $25,547.00 $34,286.00
98 $35,106.00 $44,145.00
99 $52,567.00 $53,476.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/31/89 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 61%
Consumer Cyclicals 13%
Health-Care 9%
Financials 8%
Communication Services 4%
Capital Goods 3%
Transportation 1%
Other 1%
</TABLE>
14
<PAGE>
Phoenix-Engemann Focus Growth Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Cisco Systems, Inc. 8.1%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
2. Texas Instruments, Inc. 7.0%
LEADING SUPPLIER OF DIGITAL SIGNAL PROCESSORS FOR THE COMMUNICATION
MARKET
3. America Online, Inc. 5.6%
MAJOR PROVIDER OF ONLINE SERVICES TO CUSTOMERS
4. Microsoft Corp. 5.4%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
5. JDS Uniphase Corp. 4.7%
DIVERSIFIED ELECTRONICS MANUFACTURER
6. MCI WorldCom, Inc. 4.1%
LEADING TELECOMMUNICATIONS SERVICE PROVIDER
7. Yahoo!, Inc. 3.9%
FIRST ONLINE NAVIGATIONAL GUIDE TO THE WORLD WIDE WEB
8. Lucent Technologies, Inc. 3.8%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
9. QUALCOMM, Inc. 3.6%
A LEADER PROVIDER OF DIGITAL WIRELESS COMMUNICATIONS PRODUCTS
10. General Electric Co. 3.3%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
COMMON STOCKS--95.8%
BROADCASTING (TELEVISION, RADIO & CABLE)--1.0%
Clear Channel Communications, Inc.(b)... 85,000 $ 7,586,250
COMMUNICATIONS EQUIPMENT--10.2%
Lucent Technologies, Inc................ 396,000 29,625,750
QUALCOMM, Inc.(b)....................... 160,000 28,200,000
Tellabs, Inc.(b)........................ 341,100 21,894,356
------------
79,720,106
------------
COMPUTERS (HARDWARE)--5.1%
Dell Computer Corp.(b).................. 300,000 15,300,000
International Business Machines Corp.... 100,000 10,800,000
Sun Microsystems, Inc.(b)............... 185,000 14,325,937
------------
40,425,937
------------
COMPUTERS (NETWORKING)--8.1%
Cisco Systems, Inc.(b).................. 592,224 63,441,996
COMPUTERS (PERIPHERALS)--3.3%
EMC Corp.(b)............................ 234,000 25,564,500
COMPUTERS (SOFTWARE & SERVICES)--16.4%
America Online, Inc.(b)................. 584,000 44,055,500
BMC Software, Inc.(b)................... 150,000 11,990,625
Microsoft Corp.(b)...................... 362,600 42,333,550
Yahoo!, Inc.(b)......................... 70,000 30,288,125
------------
128,667,800
------------
ELECTRICAL EQUIPMENT--3.3%
General Electric Co..................... 170,000 26,307,500
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
ELECTRONICS (SEMICONDUCTORS)--14.9%
Intel Corp.............................. 252,800 $ 20,808,600
JDS Uniphase Corp.(b)................... 230,000 37,101,875
Texas Instruments, Inc.................. 569,200 55,141,250
Xilinx, Inc.(b)......................... 85,000 3,864,844
------------
116,916,569
------------
FINANCIAL (DIVERSIFIED)--4.3%
American Express Co..................... 94,000 15,627,500
Citigroup, Inc.......................... 330,000 18,335,625
------------
33,963,125
------------
HEALTH CARE (DIVERSIFIED)--1.8%
Warner-Lambert Co....................... 170,000 13,929,375
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--5.4%
Genentech, Inc.(b)...................... 86,000 11,567,000
Merck & Co., Inc........................ 208,200 13,962,412
Pfizer, Inc............................. 511,800 16,601,512
------------
42,130,924
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.4%
Medtronic, Inc.......................... 300,200 10,938,538
INVESTMENT BANKING/BROKERAGE--3.1%
Goldman Sachs Group, Inc. (The)......... 100,000 9,418,750
Merrill Lynch & Co., Inc................ 176,000 14,696,000
------------
24,114,750
------------
LODGING-HOTELS--1.8%
Carnival Corp........................... 302,200 14,448,938
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Phoenix-Engemann Focus Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
RETAIL (BUILDING SUPPLIES)--3.3%
<S> <C> <C> <C>
Home Depot, Inc. (The).................. 375,000 $ 25,710,938
RETAIL (DEPARTMENT STORES)--1.8%
Kohl's Corp.(b)......................... 192,700 13,910,531
RETAIL (GENERAL MERCHANDISE)--3.4%
Costco Wholesale Corp.(b)............... 95,000 8,668,750
Wal-Mart Stores, Inc.................... 259,000 17,903,375
------------
26,572,125
------------
SERVICES (COMMERCIAL & CONSUMER)--2.1%
Cendant Corp.(b)........................ 636,833 16,915,877
TELECOMMUNICATIONS (LONG DISTANCE)--4.1%
MCI WorldCom, Inc.(b)................... 610,500 32,394,656
TRUCKERS --1.0%
United Parcel Service, Inc.............. 119,500 8,245,500
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $301,975,818) 751,905,935
- ------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--1.5%
COMMUNICATIONS EQUIPMENT--1.5%
Nokia Oyj Sponsored ADR (Finland)....... 60,000 $ 11,400,000
- ------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $5,899,206) 11,400,000
- ------------------------------------------------------------------------
TOTAL INVESTMENTS--97.3%
(IDENTIFIED COST $307,875,024) 763,305,935(a)
Cash and receivables, less liabilities--2.7% 21,150,877
------------
NET ASSETS--100.0% $784,456,812
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $457,362,169 and gross
depreciation of $1,931,258 for federal income tax purposes. At December
31,1999, the aggregate cost of securities for federal income tax purposes
was $307,875,024.
(b) Non-income producing.
16
See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Focus Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $307,875,024) $ 763,305,935
Cash 26,335,210
Receivables
Fund shares sold 1,217,125
Dividends and interest 315,122
--------------
Total assets 791,173,392
--------------
LIABILITIES
Payables
Investment securities purchased 3,856,374
Fund shares repurchased 853,601
Option written, at value (premium received $1,017,416) 478,125
Distribution fee 699,102
Investment advisory fee 491,860
Administration fee 290,813
Trustees' fee 5,428
Accrued expenses 41,277
--------------
Total liabilities 6,716,580
--------------
NET ASSETS $ 784,456,812
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 328,486,610
Net unrealized appreciation 455,970,202
--------------
NET ASSETS $ 784,456,812
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $621,386,162) 18,692,221
Net asset value per share $33.24
Offering price per share $33.24/(1-4.75%) $34.90
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $106,372,106) 3,435,022
Net asset value and offering price per share $30.97
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $56,698,544) 1,830,971
Net asset value and offering price per share $30.97
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,071,025
Interest 997,025
--------------
Total investment income 3,068,050
--------------
EXPENSES
Investment advisory fee 4,836,987
Distribution fee, Class A 1,232,638
Distribution fee, Class B 787,057
Distribution fee, Class C 410,207
Administration 2,981,416
Professional 48,594
Trustees 13,620
--------------
Total expenses 10,310,519
--------------
NET INVESTMENT LOSS (7,242,469)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 85,809,182
Net realized gain on written options 672,473
Net change in unrealized appreciation (depreciation) on
investments 184,418,047
Net change in unrealized appreciation (depreciation) on
written options 539,291
--------------
NET GAIN ON INVESTMENTS 271,438,993
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 264,196,524
==============
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix-Engemann Focus Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (7,242,469) $ (4,059,521)
Net realized gain (loss) 86,481,655 77,363,122
Net change in unrealized appreciation
(depreciation) 184,957,338 80,943,604
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 264,196,524 154,247,205
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (103,359,347) (19,191,036)
Net realized gains, Class B (18,563,891) (3,003,744)
Net realized gains, Class C (9,894,149) (1,570,635)
In excess of net realized gains, Class
A (2,793,835) --
In excess of net realized gains, Class
B (501,788) --
In excess of net realized gains, Class
C (267,443) --
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (135,380,453) (23,765,415)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,437,653 and 554,463 shares,
respectively) 77,978,236 12,769,077
Net asset value of shares issued from
reinvestment of distributions
(2,932,699 and 665,077 shares,
respectively) 95,019,463 17,245,429
Cost of shares repurchased (3,126,770
and 3,536,921 shares, respectively) (98,805,876) (79,785,149)
------------ ------------
Total 74,191,823 (49,770,643)
------------ ------------
CLASS B
Proceeds from sales of shares (672,999
and 245,967 shares, respectively) 19,484,473 5,372,379
Net asset value of shares issued from
reinvestment of distributions
(575,602 and 110,700 shares,
respectively) 17,377,421 2,728,756
Cost of shares repurchased (402,631
and 534,746 shares, respectively) (11,482,014) (11,527,013)
------------ ------------
Total 25,379,880 (3,425,878)
------------ ------------
CLASS C
Proceeds from sales of shares (417,135
and 164,645 shares, respectively) 12,312,851 3,582,593
Net asset value of shares issued from
reinvestment of distributions
(308,840 and 58,568 shares,
respectively) 9,323,884 1,443,709
Cost of shares repurchased (251,773
and 356,278 shares, respectively) (7,279,393) (7,561,830)
------------ ------------
Total 14,357,342 (2,535,528)
------------ ------------
CLASS M
Proceeds from sales of shares (0 and
4,866 shares, respectively) -- 100,100
Cost of shares repurchased (0 and
4,866 shares, respectively) -- (108,609)
------------ ------------
Total -- (8,509)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS 113,929,045 (55,740,558)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 242,745,116 74,741,232
NET ASSETS
Beginning of period 541,711,696 466,970,464
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$0 AND $0, RESPECTIVELY] $784,456,812 $541,711,696
============ ============
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Focus Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 26.82 $ 20.43 $ 21.94 $ 19.28 $ 15.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.31) (0.16) (0.16) (0.14) (0.06)
Net realized and unrealized gain
(loss) 13.48 7.76 3.51 4.47 4.24
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 13.17 7.60 3.35 4.33 4.18
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (6.57) (1.21) (4.86) (1.67) (0.30)
In excess of net realized gains (0.18) -- -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (6.75) (1.21) (4.86) (1.67) (0.30)
-------- -------- -------- -------- --------
Change in net asset value 6.42 6.39 (1.51) 2.66 3.88
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 33.24 $ 26.82 $ 20.43 $ 21.94 $ 19.28
======== ======== ======== ======== ========
Total return(2) 49.74 % 37.41 % 16.04 % 22.49 % 27.16 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $621,386 $441,146 $383,481 $426,785 $415,416
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.54 % 1.58 % 1.6 %(3) 1.6 %(3) 1.6 %
Net investment income (loss) (1.04)% (0.72)% (0.7)% (0.6)% (0.3)%
Portfolio turnover 56 % 119 % 70.6 % 70.1 % 65.9 %
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.60% and
1.60% for the periods ended December 31, 1997 and 1996, respectively.
See Notes to Financial Statements
19
<PAGE>
Phoenix-Engemann Focus Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.49 $ 19.61 $ 21.40 $ 18.99 $ 15.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.51) (0.32) (0.34) (0.31) (0.20)
Net realized and unrealized gain
(loss) 12.74 7.41 3.41 4.39 4.21
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 12.23 7.09 3.07 4.08 4.01
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (6.57) (1.21) (4.86) (1.67) (0.30)
In excess of net realized gains (0.18) -- -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (6.75) (1.21) (4.86) (1.67) (0.30)
-------- -------- -------- -------- --------
Change in net asset value 5.48 5.88 (1.79) 2.41 3.71
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 30.97 $ 25.49 $ 19.61 $ 21.40 $ 18.99
======== ======== ======== ======== ========
Total return(2) 48.64 % 36.38 % 15.13 % 21.52 % 26.26 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $106,372 $65,986 $54,267 $49,444 $34,786
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.29 % 2.33 % 2.4 %(3) 2.3 %(3) 2.4 %
Net investment income (loss) (1.78)% (1.47)% (1.5)% (1.5)% (1.1)%
Portfolio turnover 56 % 119 % 70.6 % 70.1 % 65.9 %
</TABLE>
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.49 $ 19.61 $ 21.40 $ 18.99 $ 15.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.51) (0.32) (0.34) (0.31) (0.20)
Net realized and unrealized gain
(loss) 12.74 7.41 3.41 4.39 4.21
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 12.23 7.09 3.07 4.08 4.01
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (6.57) (1.21) (4.86) (1.67) (0.30)
In excess of net realized gains (0.18) -- -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (6.75) (1.21) (4.86) (1.67) (0.30)
-------- -------- -------- -------- --------
Change in net asset value 5.48 5.88 (1.79) 2.41 3.71
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 30.97 $ 25.49 $ 19.61 $ 21.40 $ 18.99
======== ======== ======== ======== ========
Total return(2) 48.64 % 36.38 % 15.13 % 21.52 % 26.26 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $56,699 $34,580 $29,222 $27,239 $20,497
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.29 % 2.33 % 2.4 %(3) 2.3 %(3) 2.4 %
Net investment income (loss) (1.78)% (1.47)% (1.5)% (1.5)% (1.1)%
Portfolio turnover 56 % 119 % 70.6 % 70.1 % 65.9 %
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.40% and
2.40% for the periods ended December 31, 1997 and 1996, respectively.
20
See Notes to Financial Statements
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ROGER ENGEMANN, CFA,
JAMES MAIR, CFA, AND JOHN TILSON, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund has an investment objective of long-term growth of capital.
Q: HOW DID THE FUND PERFORM FOR THE FISCAL YEAR?
A: We seek to achieve long-term capital appreciation by investing in
approximately 50 companies that the portfolio management team considers to have
the best prospects for appreciation potential. Our approach has been well
rewarded this year. For the 12 months ended December 31, 1999, Class A shares
returned 32.47%, Class B shares returned 31.47%, and Class C shares returned
31.47% compared with a return of 21.14% for the S&P 500 Index(1). All
performance figures assume the reinvestment of distributions and exclude the
effect of sales charges.
Q: WHAT FACTORS AFFECTED PERFORMANCE IN 1999?
A: While many of the major markets posted new highs, it wasn't a free-for-all
for stocks in general. Well over half the stocks on the New York Stock Exchange
and even the high-flying Nasdaq were selling at lower prices at year-end then
they did at the beginning of the year. Clearly it was a year in which good stock
selection reigned supreme. Our ratio of winners to losers was encouraging.
Another factor contributing to performance was the fact that many of the big
winners were also widely held positions.
Q: WHAT INDUSTRY SECTORS WAS THE PORTFOLIO INVESTED IN PRIMARILY?
A: Tech stocks were the runaway market leaders in 1999, and we were rewarded for
our increased emphasis on this sector. It is interesting to note that the return
for the S&P 500 Index excluding technology stocks was only 3.1%. Many of the
Fund's largest holdings were tech stocks, some with gains of 100% plus.
The portfolio also benefited from underweighted positions in financials and
health care, which lagged the market for the year. However, careful stock
selection within the financial group proved to be a plus, with both Citigroup
and American Express up substantially for the year. Several consumer cyclical
stocks also enhanced performance; for example, Home Depot, Wal-Mart, and
Interpublic Group.
Q: WHAT WERE SOME OF THE MORE DISAPPOINTING HOLDINGS IN THE PORTFOLIO?
A: Staples, one of the three major players in the office products and supplies
industry, underperformed last year due to uncertainties about industry
saturation and the company's Internet strategy. However, we continue to be
optimistic regarding the company's stock and long-term outlook. Freddie Mac was
one of many financial companies victimized by political and interest rate
concerns during the year. But, again we are positive on the stock and believe
strong earnings growth should bolster the potential for future price
appreciation. Another holding that lost ground this year was Pfizer, which was
hurt by worries over
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
21
<PAGE>
PHOENIX-ENGEMANN NIFTY FIFTY FUND (CONTINUED)
health-care reform. Because of its high valuation, the stock suffered more than
some other pharmaceuticals, but we feel solid fundamentals will eventually put
the company back in the winning column.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: With lofty stock prices and the relentless market climb, particularly in
dot.com issues, there is apt to be a large dose of volatility ahead. Signs of
that have already emerged in the early days of 2000. The threat of rising
interest rates will also add to nervous investor behavior.
However, even with the expected hikes in interest rates, there appears
little on the horizon that could cause a dramatic reversal in the coming months.
The economy is strong, inflation looks as if it will remain tame, and the
outlook for earnings appears positive. Such ingredients are typically conducive
to a healthy stock market in which high quality, large-cap companies prosper.
JANUARY 28, 2000
22
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEAR TO 12/31/99 DATE
-------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 32.47% 28.19% 21.97% 12/17/90
Class A Shares at POP(3) 26.18 26.95 21.32 12/17/90
Class B Shares at NAV(2) 31.47 27.24 22.44 1/3/94
Class B Shares with CDSC(4) 27.47 27.24 22.44 1/3/94
Class C Shares at NAV(2) 31.47 27.24 22.44 1/3/94
Class C Shares with CDSC(4) 31.47 27.24 22.44 1/3/94
S&P 500 Index(7) 21.14 28.66 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 21.00% for Class A (since 12/17/90) and 23.71% for
Class B and C (since 1/3/94), respectively.
(6) This chart illustrates POP returns on Class A Shares only. Returns on
Class B and Class C Shares will vary due to differing sales charges.
(7) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-ENGEMANN NIFTY FIFTY FUND CLASS A(6) S&P 500 INDEX(7)
<S> <C> <C>
90 $9,525.00 $10,000.00
90 $9,489.00 $10,142.00
91 $15,908.00 $13,239.00
92 $16,493.00 $14,258.00
93 $16,407.00 $15,683.00
94 $16,579.00 $15,891.00
95 $21,256.00 $21,851.00
96 $26,894.00 $26,931.00
97 $32,064.00 $35,920.00
98 $43,329.00 $46,249.00
99 $57,400.00 $56,023.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/17/90 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 49%
Consumer Cyclicals 17%
Financials 10%
Health-Care 10%
Communication Services 6%
Capital Goods 4%
Consumer Staples 4%
</TABLE>
23
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. EMC Corp. 7.0%
LEADING SUPPLIER OF ENTERPRISE STORAGE SOLUTIONS
2. Cisco Systems, Inc. 6.0%
LEADING PRODUCER OF SWITCHES AND ROUTERS FOR INTERNETWORKING
3. Microsoft Corp. 5.9%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
4. Texas Instruments, Inc. 5.7%
LEADING SUPPLIER OF DIGITAL SIGNAL PROCESSORS FOR THE COMMUNICATION
MARKET
5. MCI WorldCom, Inc. 5.5%
LEADING TELECOMMUNICATIONS SERVICE PROVIDER
6. Home Depot, Inc. (The) 4.0%
LEADING HOME IMPROVEMENT RETAILER
7. Lucent Technologies, Inc. 3.9%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
8. America Online, Inc. 3.6%
MAJOR PROVIDER OF ONLINE SERVICES TO CONSUMERS
9. Intel Corp. 3.4%
DESIGNS, DEVELOPS AND MARKETS ADVANCED MICROCOMPUTER COMPONENTS
10. General Electric Co. 2.9%
DIVERSIFIED MANUFACTURING AND FINANCIAL SERVICES PROVIDER
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
COMMON STOCKS--96.6%
BANKS (MAJOR REGIONAL)--1.0%
Wells Fargo Co.......................... 134,400 $ 5,434,800
BROADCASTING (TELEVISION, RADIO & CABLE)--0.6%
AT&T Corp.-Liberty Media Group Class
A(b).................................... 53,000 3,007,750
COMMUNICATIONS EQUIPMENT--6.8%
Lucent Technologies, Inc................ 280,000 20,947,500
Tellabs, Inc.(b)........................ 240,000 15,405,000
------------
36,352,500
------------
COMPUTERS (HARDWARE)--4.7%
Dell Computer Corp.(b).................. 100,000 5,100,000
International Business Machines Corp.... 100,000 10,800,000
Sun Microsystems, Inc.(b)............... 120,000 9,292,500
------------
25,192,500
------------
COMPUTERS (NETWORKING)--6.0%
Cisco Systems, Inc.(b).................. 295,874 31,695,502
COMPUTERS (PERIPHERALS)--7.0%
EMC Corp.(b)............................ 340,000 37,145,000
COMPUTERS (SOFTWARE & SERVICES)--12.1%
America Online, Inc.(b)................. 252,000 19,010,250
BMC Software, Inc.(b)................... 120,000 9,592,500
Compuware Corp.(b)...................... 114,000 4,246,500
Microsoft Corp.(b)...................... 268,800 31,382,400
------------
64,231,650
------------
CONSUMER FINANCE--1.2%
MBNA Corp............................... 225,000 6,131,250
ELECTRICAL EQUIPMENT--2.9%
General Electric Co..................... 100,000 15,475,000
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
ELECTRONICS (SEMICONDUCTORS)--9.1%
Intel Corp.............................. 223,000 $ 18,355,687
Texas Instruments, Inc.................. 311,000 30,128,125
------------
48,483,812
------------
ENTERTAINMENT--0.9%
Time Warner, Inc........................ 65,000 4,708,437
FINANCIAL (DIVERSIFIED)--6.1%
American Express Co..................... 40,000 6,650,000
Citigroup, Inc.......................... 225,000 12,501,562
Freddie Mac............................. 100,000 4,706,250
Morgan Stanley Dean Witter & Co......... 60,000 8,565,000
------------
32,422,812
------------
HEALTH CARE (DIVERSIFIED)--1.0%
Warner-Lambert Co....................... 65,000 5,325,937
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--6.0%
Genentech, Inc.(b)...................... 60,000 8,070,000
Merck & Co., Inc........................ 112,600 7,551,238
Pfizer, Inc............................. 365,850 11,867,259
Schering-Plough Corp.................... 100,000 4,218,750
------------
31,707,247
------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.8%
Guidant Corp.(b)........................ 65,000 3,055,000
Medtronic, Inc.......................... 322,600 11,754,738
------------
14,809,738
------------
INVESTMENT BANKING/BROKERAGE--1.6%
Goldman Sachs Group, Inc. (The)......... 32,000 3,014,000
Merrill Lynch & Co., Inc................ 66,000 5,511,000
------------
8,525,000
------------
LODGING-HOTELS--1.7%
Carnival Corp........................... 189,700 9,070,031
</TABLE>
24 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--1.2%
Tyco International Ltd.................. 90,000 $ 3,498,750
United Technologies Corp................ 40,000 2,600,000
------------
6,098,750
------------
PERSONAL CARE--0.7%
Gillette Co. (The)...................... 83,600 3,443,275
RETAIL (BUILDING SUPPLIES)--5.1%
Home Depot, Inc. (The).................. 307,500 21,082,969
Lowe's Companies., Inc.................. 100,300 5,992,925
------------
27,075,894
------------
RETAIL (COMPUTERS & ELECTRONICS)--1.5%
Best Buy Co., Inc.(b)................... 68,000 3,412,750
Circuit City Stores-Circuit City
Group................................... 100,000 4,506,250
------------
7,919,000
------------
RETAIL (DEPARTMENT STORES)--0.5%
Kohl's Corp.(b)......................... 40,000 2,887,500
RETAIL (DRUG STORES)--1.0%
Walgreen Co............................. 190,000 5,557,500
RETAIL (GENERAL MERCHANDISE)--3.6%
Dayton Hudson Corp.(b).................. 75,000 5,507,813
Wal-Mart Stores, Inc.................... 195,000 13,479,375
------------
18,987,188
------------
RETAIL (SPECIALTY)--1.1%
Staples, Inc.(b)........................ 279,750 5,804,813
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
SERVICES (ADVERTISING/MARKETING)--1.3%
Interpublic Group of Companies, Inc.
(The)................................... 120,000 $ 6,922,500
SERVICES (COMMERCIAL & CONSUMER)--1.6%
Cendant Corp.(b)........................ 325,500 8,646,094
SERVICES (COMPUTER SYSTEMS)--2.0%
Electronic Data Systems Corp............ 160,000 10,710,000
TELECOMMUNICATIONS (LONG DISTANCE)--5.5%
MCI WorldCom, Inc.(b)................... 553,500 29,370,094
- --------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $240,849,873) 513,141,574
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--0.5%
ENTERTAINMENT--0.5%
News Corporation Ltd. (The)
Sponsored ADR
(Australia)................ 66,000 2,524,500
- --------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $2,629,211) 2,524,500
- --------------------------------------------------------------------
TOTAL INVESTMENTS--97.1%
(IDENTIFIED COST $243,479,084) 515,666,074(a)
Cash and receivables, less liabilities--2.9% 15,133,167
---------------------
NET ASSETS--100.0% $ 530,799,241
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $274,647,417 and gross
depreciation of $5,807,049 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purposes was
$246,825,706.
(b) Non-income producing.
See Notes to Financial Statements
25
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $243,479,084) $ 515,666,074
Cash 15,980,207
Receivables
Fund shares sold 925,740
Dividends and interest 156,622
--------------
Total assets 532,728,643
--------------
LIABILITIES
Payables
Fund shares repurchased 650,295
Distribution fee 663,436
Investment advisory fee 353,395
Administration fee 221,916
Trustees' fee 5,428
Accrued expenses 34,932
--------------
Total liabilities 1,929,402
--------------
NET ASSETS $ 530,799,241
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 260,874,252
Accumulated net realized loss (2,262,001)
Net unrealized appreciation 272,186,990
--------------
NET ASSETS $ 530,799,241
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $321,298,548) 6,960,086
Net asset value per share $46.16
Offering price per share $46.16/(1-4.75%) $48.46
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $138,625,558) 3,173,377
Net asset value and offering price per share $43.68
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $70,875,135) 1,622,576
Net asset value and offering price per share $43.68
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 1,933,467
Interest 787,659
--------------
Total investment income 2,721,126
--------------
EXPENSES
Investment advisory fee 3,571,794
Distribution fee, Class A 675,811
Distribution fee, Class B 1,137,569
Distribution fee, Class C 563,625
Administration 2,250,464
Professional 36,407
Trustees 17,045
--------------
Total expenses 8,252,715
--------------
NET INVESTMENT LOSS (5,531,589)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 40,441,424
Net change in unrealized appreciation (depreciation) on
investments 93,107,575
--------------
NET GAIN ON INVESTMENTS 133,548,999
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 128,017,410
==============
</TABLE>
26 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Nifty Fifty Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (5,531,589) $ (2,852,205)
Net realized gain (loss) 40,441,424 24,005,577
Net change in unrealized appreciation
(depreciation) 93,107,575 76,678,083
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 128,017,410 97,831,455
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (32,506,365) (3,938,869)
Net realized gains, Class B (14,737,596) (1,688,560)
Net realized gains, Class C (7,456,863) (844,698)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (54,700,824) (6,472,127)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,492,778 and 1,393,163 shares,
respectively) 63,251,908 45,389,712
Net asset value of shares issued from
reinvestment of distributions
(650,922 and 94,125 shares,
respectively) 29,512,798 3,589,938
Cost of shares repurchased (1,241,476
and 1,467,112 shares, respectively) (53,099,694) (47,556,423)
------------ ------------
Total 39,665,012 1,423,227
------------ ------------
CLASS B
Proceeds from sales of shares (634,388
and 498,534 shares, respectively) 25,899,845 15,592,450
Net asset value of shares issued from
reinvestment of distributions
(300,215 and 40,281 shares,
respectively) 12,885,223 1,473,476
Cost of shares repurchased (367,722
and 341,912 shares, respectively) (15,038,011) (10,575,072)
------------ ------------
Total 23,747,057 6,490,854
------------ ------------
CLASS C
Proceeds from sales of shares (398,511
and 213,942 shares, respectively) 16,321,818 6,658,822
Net asset value of shares issued from
reinvestment of distributions
(154,070 and 20,953 shares,
respectively) 6,611,132 766,453
Cost of shares repurchased (230,854
and 342,357 shares, respectively) (9,311,630) (10,440,823)
------------ ------------
Total 13,621,320 (3,015,548)
------------ ------------
CLASS M
Proceeds from sales of shares (0 and
3,392 shares, respectively) -- 100,100
Cost of shares repurchased (0 and
3,392 shares, respectively) -- (111,184)
------------ ------------
Total -- (11,084)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS 77,033,389 4,887,449
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 150,349,975 96,246,777
NET ASSETS
Beginning of period 380,449,266 284,202,489
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME
(LOSS) OF $0 AND $0, RESPECTIVELY] $530,799,241 $380,449,266
============ ============
</TABLE>
See Notes to Financial Statements 27
<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
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $38.80 $29.21 $26.50 $22.18 $17.30
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.41) (0.20) (0.20) (0.12) (0.05)
Net realized and unrealized gain
(loss) 12.92 10.45 5.23 6.00 4.93
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 12.51 10.25 5.03 5.88 4.88
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
Change in net asset value 7.36 9.59 2.71 4.32 4.88
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $46.16 $38.80 $29.21 $26.50 $22.18
======== ======== ======== ======== ========
Total return(2) 32.47 % 35.13 % 19.23 % 26.53 % 28.21 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $321,299 $235,065 $176,378 $145,469 $122,322
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.58 % 1.60 % 1.6 %(3) 1.7 %(3) 1.9 %
Net investment income (loss) (0.97)% (0.61)% (0.7)% (0.4)% (0.3)%
Portfolio turnover 43 % 92 % 68.8 % 41.9 % 26.5 %
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.60% and
1.80% for the periods ended December 31, 1997 and 1996, respectively.
28
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 B
----------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $37.21 $28.24 $25.88 $21.85 $17.17
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.70) (0.43) (0.42) (0.30) (0.21)
Net realized and unrealized gain
(loss) 12.32 10.06 5.10 5.89 4.89
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 11.62 9.63 4.68 5.59 4.68
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
Change in net asset value 6.47 8.97 2.36 4.03 4.68
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $43.68 $37.21 $28.24 $25.88 $21.85
======== ======== ======== ======== ========
Total return(2) 31.47 % 34.14 % 18.33 % 25.60 % 27.26 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $138,626 $96,983 $68,051 $47,143 $27,462
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33 % 2.35 % 2.4 %(3) 2.5 %(3) 2.6 %
Net investment income (loss) (1.72)% (1.35)% (1.4)% (1.2)% (1.0)%
Portfolio turnover 43 % 92 % 68.8 % 41.9 % 26.5 %
</TABLE>
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $37.21 $28.24 $25.88 $21.85 $17.17
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.70) (0.43) (0.42) (0.30) (0.21)
Net realized and unrealized gain
(loss) 12.32 10.06 5.10 5.89 4.89
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 11.62 9.63 4.68 5.59 4.68
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- --
Dividends from net realized gains (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (5.15) (0.66) (2.32) (1.56) --
-------- -------- -------- -------- --------
Change in net asset value 6.47 8.97 2.36 4.03 4.68
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $43.68 $37.21 $28.24 $25.88 $21.85
======== ======== ======== ======== ========
Total return(2) 31.47 % 34.14 % 18.33 % 25.60 % 27.26 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $70,875 $48,401 $39,773 $26,092 $15,105
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33 % 2.35 % 2.4 %(3) 2.5 %(3) 2.6 %
Net investment income (loss) (1.72)% (1.35)% (1.4)% (1.2)% (1.0)%
Portfolio turnover 43 % 92 % 68.8 % 41.9 % 26.5 %
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.40% and
2.50% for the periods ended December 31, 1997 and 1996, respectively.
See Notes to Financial Statements
29
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ROGER ENGEMANN, CFA,
JAMES MAIR, CFA, AND JOHN TILSON, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks long-term growth of capital. Investors should note that
small-company investing involves added risks, such as greater price volatility,
less liquidity, and increased competitive threat.
Q: HOW DID THE FUND PERFORM FOR THE 12 MONTHS ENDED DECEMBER 31, 1999?
A: Class A shares returned 84.59%, Class B shares returned 83.25%, and Class C
shares returned 83.20% compared with a return of 21.26% for the Russell 2000
Index(1) and an average return of 62.63% for a peer universe of 263 small-cap
growth funds, according to Lipper, Inc. Investors should consider all
performance periods and the effect of the past 12 months' strong stock market
when evaluating funds. All performance figures assume reinvestment of dividends
and exclude the effect of sales charges.
Q: WHAT FACTORS HELPED THE FUND ACHIEVE SUCH STRONG RESULTS?
A: After struggling for most of the year, small-cap stocks staged a rebound in
late 1999. Our Fund also surged ahead, exceeding the return of the
record-setting Russell 2000 Index for both the final quarter of the year and the
full year. Performance was strong among many holdings in the portfolio, with
most stocks showing double-digit returns. Some climbed more than 100%.
Q: WHAT WERE SOME OF THE BIG WINNERS AND LOSERS?
A: Leading the winners by a wide margin was Commerce One Inc., with a remarkable
808% return. The company, which provides software to large industrial firms to
lower their cost of procuring materials, is one of the leaders in the concept of
business-to-business e-commerce. Because Commerce One was one of our largest
holdings, its contribution to performance was significant.
Next in line was Applied Micro Circuits, which has been one of our best
performing stocks throughout much of the year. Applied Micro Circuits
manufactures high-performance silicon solutions for communications
infrastructures. BEA Systems was another big contributor to performance. The
company provides "middle ware" software that enables companies to tie together
different computer systems.
All but two of the poorest performing stocks were sold earlier in the year.
Of those remaining in the portfolio, the two with the greatest declines were
Omnicare and Concentric Network, two relatively small positions. Omnicare
continued to suffer in the difficult operating environment that the long-term
health-care industry faced last year.
Concentric is a company that provides Internet solutions for small- and
medium-sized companies and consistently receives top ratings as a service
provider. Although the stock was affected by
(1) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF SMALL-CAP
STOCK MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
30
<PAGE>
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH FUND (CONTINUED)
volatility in its niche of the technology sector over the last year, we believe
the long-range prospects for the company are good.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We feel the upturn in small stocks at the end of 1999 may bode well for this
segment of the market in the coming months. Investor confidence seems to be
broadening, and those who formerly sought comfort only in large names may now be
willing to look for returns from additional areas. Along with their risks, we
believe small stocks also offer more upside potential and could prove to be an
attractive place for investors seeking to diversify their portfolio.
JANUARY 28, 2000
31
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS TO 12/31/99 DATE
------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 84.59% 38.56% 41.61% 10/10/94
Class A Shares at POP(3) 75.82 37.22 40.30 10/10/94
Class B Shares at NAV(2) 83.25 -- 38.89 9/18/96
Class B Shares with CDSC(4) 79.25 -- 38.60 9/18/96
Class C Shares at NAV(2) 83.20 -- 35.80 10/8/96
Class C Shares with CDSC(4) 83.20 -- 35.80 10/8/96
Russell 2000 Index(7) 21.26 16.69 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 21.26% for Class A (since 10/10/94), 16.69% for Class
B (since 9/18/96) and 15.64% for Class C (since 10/8/96), respectively.
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The Russell 2000 Index is an unmanaged, commonly used measure of total
return performance of small-capitalization growth-oriented stocks. The
Index's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 PHOENIX-ENGEMANN SMALL & MID-CAP
GROWTH INDEX(7) GROWTH FUND CLASS A(6)
<S> <C> <C>
10/94 $10,000.00 $9,525.00
94 $9,877.00 $11,497.00
95 $12,686.00 $14,449.00
96 $14,778.00 $22,015.00
97 $18,083.00 $27,830.00
98 $17,622.00 $31,807.00
99 $21,368.00 $58,713.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
10/10/94 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 56%
Consumer Cyclicals 18%
Consumer Staples 7%
Financials 5%
Energy 3%
Health-Care 3%
Capital Goods 3%
Other 5%
</TABLE>
32
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Ortel Corp. 4.9%
PRODUCES LINEAR FIBEROPTIC PRODUCTS
2. BEA Systems, Inc. 4.3%
COMPUTER SOFTWARE DESIGNER
3. Applied Micro Circuits Corp. 3.9%
MANUFACTURER OF INTEGRATED CIRCUITS
4. DoubleClick, Inc. 3.8%
INTERNET ADVERTISING PROVIDER
5. Commerce One, Inc. 3.6%
PROVIDER OF BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE SOLUTIONS
6. Peregrine Systems, Inc. 3.2%
COMPUTER SOFTWARE DEVELOPER
7. Conexant Systems, Inc. 2.3%
DEVELOPS SEMICONDUCTOR PRODUCTS FOR COMMUNICATIONS ELECTRONICS
8. Pinnacle Oil International, Inc. 2.3%
OIL EXPLORATION TECHNOLOGY COMPANY
9. Cost Plus, Inc. 2.2%
SPECIALTY RETAILER OF CAUSAL HOME LIVING AND ENTERTAINING PRODUCTS
10. Metris Companies, Inc. 2.2%
DIRECT MARKETER OF CONSUMER CREDIT PRODUCTS
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
COMMON STOCKS--89.0%
AIR FREIGHT--0.7%
Expeditors International of Washington,
Inc..................................... 40,000 $ 1,752,500
BIOTECHNOLOGY--1.7%
Coulter Pharmaceutical, Inc.(b)......... 30,000 680,625
IDEC Pharmaceuticals Corp.(b)........... 12,000 1,179,000
Pharmacyclics, Inc.(b).................. 20,000 825,000
Progenics Pharmaceuticals, Inc.(b)...... 30,000 1,466,250
---------------------
4,150,875
---------------------
BROADCASTING (TELEVISION, RADIO & CABLE)--2.0%
Cumulus Media, Inc.(b).................. 50,000 2,537,500
Salem Communications Corp.(b)........... 50,000 1,131,250
Spanish Broadcasting System, Inc. Class
A(b).................................... 30,000 1,207,500
---------------------
4,876,250
---------------------
COMMUNICATIONS EQUIPMENT--5.7%
Advanced Fibre Communications,
Inc.(b)................................. 42,500 1,899,219
Ortel Corp.(b).......................... 100,000 12,000,000
---------------------
13,899,219
---------------------
COMPUTERS (NETWORKING)--3.4%
Agile Software Corp.(b)................. 16,000 3,475,750
C-bridge Internet Solutions, Inc.(b).... 29,000 1,410,125
ITXC Corp.(b)........................... 24,000 807,000
Retek, Inc.(b).......................... 24,000 1,806,000
Women.com Networks, Inc.(b)............. 20,000 285,000
Xpedior, Inc.(b)........................ 20,000 575,000
---------------------
8,358,875
---------------------
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)--22.1%
BEA Systems, Inc.(b).................... 150,000 $ 10,490,625
Commerce One, Inc.(b)................... 45,000 8,842,500
Concentric Network Corp.(b)............. 50,000 1,540,625
E.piphany, Inc.(b)...................... 12,000 2,677,500
HNC Software, Inc.(b)................... 15,000 1,586,250
Interwoven, Inc.(b)..................... 17,000 2,067,625
Keynote Systems, Inc.(b)................ 28,000 2,065,000
Legato Systems, Inc.(b)................. 60,000 4,128,750
NetZero, Inc.(b)........................ 47,100 1,268,756
New Era of Networks, Inc.(b)............ 35,000 1,666,875
Peregrine Systems, Inc.(b).............. 95,000 7,849,375
Sapient Corp.(b)........................ 36,000 5,073,750
TIBCO Software, Inc.(b)................. 22,000 3,366,000
Verio, Inc.(b).......................... 25,000 1,154,687
ZapMe! Corp.(b)......................... 37,300 321,712
---------------------
54,100,030
---------------------
CONSUMER FINANCE--2.2%
Metris Companies, Inc................... 150,000 5,353,125
ELECTRICAL EQUIPMENT--3.0%
Advanced Energy Industries, Inc.(b)..... 50,000 2,462,500
C-COR.net Corp.(b)...................... 14,000 1,072,750
Flextronics International Ltd.(b)....... 80,000 3,680,000
---------------------
7,215,250
---------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)--1.5%
Caliper Technologies Corp.(b)........... 20,000 1,335,000
NETsilicon, Inc.(b)..................... 110,000 2,206,875
---------------------
3,541,875
---------------------
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION)--0.5%
Meade Instruments Corp.(b).............. 40,000 $ 1,140,000
ELECTRONICS (SEMICONDUCTORS)--11.4%
Applied Micro Circuits Corp.(b)......... 75,600 9,620,100
Conexant Systems, Inc.(b)............... 86,000 5,708,250
Micrel, Inc.(b)......................... 76,000 4,327,250
SDL, Inc.(b)............................ 15,200 3,313,600
TriQuint Semiconductor, Inc.(b)......... 20,500 2,280,625
Vitesse Semiconductor Corp.(b).......... 50,000 2,621,875
---------------------
27,871,700
---------------------
EQUIPMENT (SEMICONDUCTOR)--2.4%
Cymer, Inc.(b).......................... 73,000 3,358,000
PRI Automation, Inc.(b)................. 18,000 1,208,250
Rudolph Technologies, Inc.(b)........... 40,000 1,340,000
---------------------
5,906,250
---------------------
FINANCIAL (DIVERSIFIED)--1.1%
Federal Agricultural Mortgage Corp.
Class C(b).............................. 63,000 1,271,812
Pinnacle Holdings, Inc.(b).............. 30,000 1,271,250
---------------------
2,543,062
---------------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--0.8%
Championship Auto Racing Teams,
Inc.(b)................................. 80,000 1,840,000
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--0.6%
Inhale Therapeutic Systems(b)........... 30,000 1,276,875
ViroPharma, Inc.(b)..................... 6,000 222,000
---------------------
1,498,875
---------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.7%
ArthroCare Corp.(b)..................... 14,000 854,000
MiniMed, Inc. (b)....................... 12,000 879,000
---------------------
1,733,000
---------------------
INVESTMENT MANAGEMENT--0.7%
Gabelli Asset Management, Inc. Class
A(b).................................... 110,000 1,787,500
OIL & GAS (EXPLORATION & PRODUCTION)--2.3%
Pinnacle Oil International, Inc.(b)..... 224,500 5,668,625
PUBLISHING--0.8%
Scholastic Corp.(b)..................... 33,000 2,052,188
RAILROADS--1.5%
Kansas City Southern Industries, Inc.... 50,000 3,731,250
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
RESTAURANTS--1.8%
Cheesecake Factory, Inc. (The)(b)....... 80,000 $ 2,800,000
Papa John's International, Inc.(b)...... 65,000 1,694,063
---------------------
4,494,063
---------------------
RETAIL (BUILDING SUPPLIES)--0.9%
Fastenal Co............................. 50,000 2,246,875
RETAIL (DISCOUNTERS)--0.9%
99 Cents Only Stores(b)................. 58,100 2,222,325
RETAIL (FOOD CHAINS)--2.2%
Smart & Final, Inc.(b).................. 96,499 699,618
Whole Foods Market, Inc.(b)............. 100,000 4,637,500
---------------------
5,337,118
---------------------
RETAIL (SPECIALTY)--3.5%
Cost Plus, Inc.(b)...................... 152,775 5,442,609
Linens 'n Things, Inc.(b)............... 36,000 1,066,500
Lithia Motors, Inc. Class A(b).......... 42,500 759,688
Restoration Hardware, Inc.(b)........... 75,000 510,938
uBid, Inc.(b)........................... 30,000 795,000
---------------------
8,574,735
---------------------
RETAIL (SPECIALTY-APPAREL)--0.7%
Children's Place Retail Stores, Inc.
(The)(b)................................ 100,000 1,643,750
SERVICES (ADVERTISING/MARKETING)--5.0%
DoubleClick, Inc.(b).................... 36,750 9,300,047
MyPoints.com, Inc.(b)................... 40,000 2,960,000
---------------------
12,260,047
---------------------
SERVICES (COMMERCIAL & CONSUMER)--3.4%
Charles River Associates, Inc.(b)....... 30,000 1,005,000
Corporate Executive Board Co.
(The)(b)................................ 42,000 2,346,750
MIPS Technologies, Inc. Class A(b)...... 62,800 3,265,600
NCO Group, Inc.(b)...................... 53,000 1,596,625
eCollege.com, Inc.(b)................... 12,000 131,250
---------------------
8,345,225
---------------------
SERVICES (COMPUTER SYSTEMS)--2.1%
CyberSource Corp.(b).................... 30,000 1,552,500
Whittman-Hart, Inc.(b).................. 68,000 3,646,500
---------------------
5,199,000
---------------------
SERVICES (DATA PROCESSING)--0.9%
McAfee.com Corp.(b)..................... 28,000 1,260,000
</TABLE>
34 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
SERVICES (DATA PROCESSING)--CONTINUED
Predictive Systems, Inc.(b)............. 14,000 $ 917,000
---------------------
2,177,000
---------------------
SERVICES (EMPLOYMENT)--0.2%
Edison Schools Inc.(b).................. 30,000 472,500
TELECOMMUNICATIONS (LONG DISTANCE)--1.8%
Network Plus Corp.(b)................... 75,000 1,575,000
WinStar Communications, Inc.(b)......... 38,000 2,845,250
---------------------
4,420,250
---------------------
TEXTILES (APPAREL)--0.5%
bebe Stores, Inc.(b).................... 40,500 1,093,500
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $93,915,604) 217,506,837
- -----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--2.6%
COMMUNICATIONS EQUIPMENT--1.0%
Research in Motion Ltd. (Canada)(b)..... 50,000 2,297,908
<CAPTION>
SHARES VALUE
-------- ---------------------
<S> <C> <C> <C>
INSURANCE (LIFE/HEALTH)--0.4%
London Pacific Group Ltd. Sponsored ADR
(United Kingdom)........................ 29,000 $ 1,044,000
OIL & GAS (EXPLORATION & PRODUCTION)--0.8%
Encal Energy Ltd. (Canada)(b)........... 430,000 1,955,461
SERVICES (DATA PROCESSING)--0.4%
Trintech Group PLC Sponsored ADR
(Ireland)(b)............................ 20,000 990,000
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $3,085,490) 6,287,369
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--91.6%
(IDENTIFIED COST $97,001,094) 223,794,206(a)
Cash and receivables, less liabilities--8.4% 20,648,824
---------------------
NET ASSETS--100.0% $ 244,443,030
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $130,109,841 and gross
depreciation of $3,660,421 for federal income tax purposes. At December
31,1999, the aggregate cost of securities for federal income tax purposes
was $97,344,786.
(b) Non-income producing.
See Notes to Financial Statements
35
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $97,001,094) $ 223,794,206
Cash 19,479,540
Receivables
Fund shares sold 2,085,781
Dividends and interest 56,702
--------------
Total assets 245,416,229
--------------
LIABILITIES
Payables
Fund shares repurchased 406,901
Distribution fee 263,154
Investment advisory fee 178,511
Administration fee 96,938
Trustees' fee 5,428
Accrued expenses 22,267
--------------
Total liabilities 973,199
--------------
NET ASSETS $ 244,443,030
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 122,314,202
Accumulated net realized loss (4,664,284)
Net unrealized appreciation 126,793,112
--------------
NET ASSETS $ 244,443,030
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $132,996,285) 2,991,773
Net asset value per share $44.45
Offering price per share $44.45/(1-4.75%) $46.67
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $73,862,559) 1,704,950
Net asset value and offering price per share $43.32
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $37,584,186) 868,177
Net asset value and offering price per share $43.29
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 379,168
Dividends 44,806
--------------
Total investment income 423,974
--------------
EXPENSES
Investment advisory fee 1,205,720
Distribution fee, Class A 176,325
Distribution fee, Class B 387,883
Distribution fee, Class C 190,106
Administration 691,595
Professional 17,875
Trustees 11,999
--------------
Total expenses 2,681,503
Less expenses borne by investment adviser (29,874)
--------------
Net expenses 2,651,629
--------------
NET INVESTMENT LOSS (2,227,655)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 6,350,070
Net realized loss on foreign currency transactions (1,903)
Net change in unrealized appreciation (depreciation)
on investments 103,350,257
--------------
NET GAIN ON INVESTMENTS 109,698,424
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 107,470,769
==============
</TABLE>
36 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $(2,227,655) $ (1,330,768)
Net realized gain (loss) 6,348,167 (10,303,702)
Net change in unrealized appreciation
(depreciation) 103,350,257 22,375,638
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 107,470,769 10,741,168
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
In excess of accumulated net realized
gains, Class A -- (48,557)
In excess of accumulated net realized
gains, Class B -- (28,857)
In excess of accumulated net realized
gains, Class C -- (13,819)
------------ ------------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS -- (91,233)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(2,162,580 and 1,832,747 shares,
respectively) 58,137,050 39,721,245
Net asset value of shares issued from
reinvestment of distributions
(0 and 2,097 shares, respectively) -- 46,145
Cost of shares repurchased (1,421,135
and 901,103 shares, respectively) (38,629,734) (19,287,058)
------------ ------------
Total 19,507,316 20,480,332
------------ ------------
CLASS B
Proceeds from sales of shares (609,129
and 776,437 shares, respectively) 15,875,386 16,692,888
Net asset value of shares issued from
reinvestment of distributions
(0 and 1,267 shares, respectively) -- 27,357
Cost of shares repurchased (242,043
and 268,731 shares, respectively) (5,699,467) (5,454,844)
------------ ------------
Total 10,175,919 11,265,401
------------ ------------
CLASS C
Proceeds from sales of shares (406,932
and 389,879 shares, respectively) 10,621,041 8,174,670
Net asset value of shares issued from
reinvestment of distributions
(0 and 580 shares, respectively) -- 12,526
Cost of shares repurchased (174,616
and 141,833 shares, respectively) (4,172,562) (2,899,692)
------------ ------------
Total 6,448,479 5,287,504
------------ ------------
CLASS M
Proceeds from sales of shares (0 and
5,260 shares, respectively) -- 110,536
Cost of shares repurchased (0 and
5,260 shares, respectively) -- (102,183)
------------ ------------
Total -- 8,353
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS 36,131,714 37,041,590
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 143,602,483 47,691,525
NET ASSETS
Beginning of period 100,840,547 53,149,022
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF $0
AND $0, RESPECTIVELY] $244,443,030 $100,840,547
============ ============
</TABLE>
See Notes to Financial Statements 37
<PAGE>
Phoenix-Engemann Small & Mid-Cap Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 24.08 $ 21.09 $ 18.39 $ 14.90 $ 12.07
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.37) (0.30) (0.31) (0.12) 0.22
Net realized and unrealized gain
(loss) 20.74 3.31 5.07 7.45 2.87
---------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 20.37 3.01 4.76 7.33 3.09
---------- --------- --------- --------- ---------
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 20.37 2.99 2.70 3.49 2.83
---------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 44.45 $ 24.08 $ 21.09 $ 18.39 $ 14.90
========== ========= ========= ========= =========
Total return(2) 84.59 % 14.29 % 26.41 % 52.37 % 25.68%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $132,996 $54,187 $27,771 $7,859 $1,742
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 1.73 % 1.78 % 1.80 % 1.10 % --%
Net investment income (loss) (1.40)% (1.39)% (1.40)% (0.70)% 1.50%
Portfolio turnover 105 % 147 % 313.5 % 297.1 % 121.4%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.75%,
1.83%, 1.80%, 1.90% and 2.30% for the periods ended December 31, 1999,
1998, 1997, 1996 and 1995, respectively.
38
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 B
-----------------------------------------------------------
YEAR ENDED DECEMBER 31
-----------------------------------------------------------
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.64 $ 20.87 $ 18.35 $16.44(6)
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.55) (0.45) (0.46) (0.32)
Net realized and unrealized gain
(loss) 20.23 3.24 5.04 2.43
------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS 19.68 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 19.68 2.77 2.52 1.91
------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 43.32 $ 23.64 $ 20.87 $18.35
======= ======= ======= ======
Total return(2) 83.25 % 13.39 % 25.49 % 12.84 %(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $73,863 $31,631 $17,298 $1,480
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.48 %(3) 2.53 %(3) 2.60 %(3) 2.60 %(4)
Net investment income (loss) (2.15)% (2.14)% (2.10)% (2.20)%(4)
Portfolio turnover 105 % 147 % 313.5 % 297.1 %
</TABLE>
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.63 $ 20.87 $18.35 $17.99(6)
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.55) (0.45) (0.47) (0.29)
Net realized and unrealized gain
(loss) 20.21 3.23 5.05 0.85
------- ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 19.66 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 19.66 2.76 2.52 0.36
------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 43.29 $ 23.63 $20.87 $18.35
======= ======= ====== ======
Total return(2) 83.20 % 13.34 % 25.49 % 3.12 %(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $37,584 $15,023 $8,080 $54
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.48 %(3) 2.53 %(3) 2.60 %(3) 2.60 %(4)
Net investment income (loss) (2.15)% (2.14)% (2.10)% (2.20)%(4)
Portfolio turnover 105 % 147 % 313.5 % 297.1 %
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.50%,
2.58% and 2.60% for the periods ended December 31, 1999, 1998 and 1997,
respectively.
(4) Annualized.
(5) Not 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.
See Notes to Financial Statements
39
<PAGE>
PHOENIX-ENGEMANN VALUE 25 FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, ROGER ENGEMANN, CFA, JAMES
MAIR, CFA, AND JOHN TILSON, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks to provide substantial dividend income and long-term growth of
capital by investing primarily in 25 high-yielding stocks of the S&P 500.
Management believes the quantitative investment approach of the Phoenix-Engemann
Value 25 Fund is an alternative to the popular strategy that buys the 10 highest
yielding stocks in the Dow Jones Industrial Average and replaces them the
following year.
Q: HOW DID THE FUND PERFORM FOR THE 12 MONTHS ENDED DECEMBER 31, 1999?
A: Class A shares returned (5.75)%, Class B shares returned (6.46)%, and Class C
shares returned (6.49)% compared with a return of 21.14% for the S&P 500
Index(1) and an average return of 3.34% for a peer universe of 219 equity income
funds, according to Lipper, Inc. All performance figures assume reinvestment of
dividends and exclude the effect of sales charges.
Q: CAN YOU OUTLINE WHAT THE GOALS OF THE FUND ARE AND COMMENT ON HOW YOU FARED
AGAINST THEM?
A: The Fund was developed with the following goals in mind:
1. Provide diversification versus our traditional growth funds.
2. Give investors an opportunity to invest in a contrarian fund.
3. Maximize performance within those guidelines set out by the Fund's
quantitative model.
The Fund was a weak performer compared to the growth funds managed by Roger
Engemann & Associates, Inc. Although we are not pleased with the results this
year, we realize that 1999 was a year for growth, not value. This was the third
year in a row that growth generally outperformed value in the market.
Q: WHY WERE VALUE STOCKS OUT OF FAVOR IN 1999?
A: Value stocks are usually found in cyclical industries such as basic
materials, automotive and energy, and the Phoenix-Engemann Value 25 Fund holds
many stocks from these sectors. Although the operating results for these
companies were not necessarily poor in 1999, they paled in comparison to the
operating results shown by technology companies. As a result, technology
companies were great performers last year, while value stocks were left behind.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND IN 2000?
A: After three years of poor relative performance by value stocks, investors are
most likely tired of waiting for value to rebound. This psychology is reflected
in the low valuation of value stocks, many of which have single-digit
price/earnings valuation multiples. Despite recent performance, we know from
history that both value and growth go through periods of outperformance. Of
course, past performance is not a guarantee of future results, and we can't
predict when a shift to value will happen. However, based on previous market
cycles, we know a shift will eventually take place. We continue to recommend the
Fund to investors who are looking for diversification versus our traditional
growth funds.
JANUARY 31, 2000
(1) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
40
<PAGE>
Phoenix-Engemann Value 25 Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 12/31/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 12/31/99 DATE
------- ----------- ----------
<S> <C> <C> <C>
Class A Shares at NAV(2) (5.75)% 7.26% 12/17/96
Class A Shares at POP(3) (10.22) 5.56 12/17/96
Class B Shares at NAV(2) (6.46) 6.00 1/9/97
Class B Shares with CDSC(4) (9.63) 5.19 1/9/97
Class C Shares at NAV(2) (6.49) 6.00 1/9/97
Class C Shares with CDSC(4) (6.49) 6.00 1/9/97
S&P 500 Index(7) 21.14 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge. Prior to 1/20/98, the maximum
front-end sales charge was 5.5%.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and O%
thereafter.
(5) Index performance is 28.14% for Class A (since 12/17/96) and 27.10% for
Class B and Class C (since 1/9/97), respectively.
(6) This chart illustrates POP returns on Class A Shares only. Returns on Class
B and Class C Shares will vary due to differing sales charges.
(7) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index's performance does not reflect sales
charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 12/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 INDEX(7) PHOENIX-ENGEMANN VALUE 25 FUND CLASS A(6)
<S> <C> <C>
12/96 $10,000.00 $9,525.00
96 $10,210.00 $9,725.00
97 $13,617.00 $11,662.00
98 $17,533.00 $12,505.00
99 $21,239.00 $11,786.00
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/17/96 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 12/31/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Consumer Cyclicals 44%
Capital Goods 25%
Consumer Staples 20%
Basic Materials 7%
Energy 4%
</TABLE>
41
<PAGE>
Phoenix-Engemann Value 25 Fund
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Goodrich (B.F) Co. (The) 4.5%
TWO BUSINESS SEGMENTS: BF GOODRICH AEROSPACE AND BF GOODRICH
PERFORMANCE MATERIALS
2. Crown Cork & Seal Co., Inc. 4.3%
MANUFACTURES PACKAGING PRODUCTS
3. Louisiana-Pacific Corp. 4.2%
BUILDING-PRODUCTS FIRM
4. Fleetwood Enterprises, Inc. 4.2%
MANUFACTURER OF RECREATIONAL VEHICLES
5. Springs Industries, Inc. Class A 4.2%
MANUFACTURER OF HOME FURNISHINGS AND SPECIALTY FABRICS
6. Stanley Works, The 4.2%
MANUFACTURES TOOLS AND DOORS
7. Ford Motor Co. 4.2%
MANUFACTURES AND SELLS AUTOMOBILES, TRUCKS AND RELATED PARTS
GLOBALLY
8. Fortune Brands, Inc. 4.2%
SELLER OF HOME PRODUCTS, OFFICE PRODUCTS, GOLF PRODUCTS AND
DISTILLED SPIRITS.
9. Ashland, Inc. 4.2%
OIL AND GAS REFINER AND MARKETER
10. ConAgra, Inc. 4.2%
DIVERSIFIED FOOD PRODUCTS COMPANY
</TABLE>
INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
-------- --------------------
<S> <C> <C> <C>
COMMON STOCKS--99.7%
AEROSPACE/DEFENSE--4.5%
Goodrich (B.F) Co. (The)................ 39,500 $ 1,086,250
AUTO PARTS & EQUIPMENT--7.6%
Dana Corp............................... 30,300 907,106
Snap-On Tools Inc....................... 34,700 921,719
--------------------
1,828,825
--------------------
AUTOMOBILES--8.3%
Ford Motor Co........................... 19,000 1,015,312
General Motors Corp..................... 13,800 1,003,087
--------------------
2,018,399
--------------------
BUILDING MATERIALS--3.5%
Armstrong World Industries, Inc......... 25,100 837,712
CONSUMER (JEWELRY, NOVELTIES & GIFTS)--4.2%
American Greetings Corp................. 42,700 1,008,788
CONTAINERS (METAL & GLASS)--4.3%
Crown Cork & Seal Co., Inc.............. 46,400 1,038,200
ELECTRICAL EQUIPMENT--4.0%
Cooper Industries, Inc.................. 24,100 974,544
ENGINEERING & CONSTRUCTION--3.4%
Foster Wheeler Corp..................... 93,400 828,925
FOODS--4.2%
ConAgra, Inc............................ 44,900 1,013,056
HARDWARE & TOOLS--4.2%
Stanley Works, The...................... 33,800 1,018,225
<CAPTION>
SHARES VALUE
-------- --------------------
<S> <C> <C> <C>
HOMEBUILDING--4.2%
Fleetwood Enterprises, Inc.............. 49,800 $ 1,027,125
HOUSEWARES--4.2%
Fortune Brands, Inc..................... 30,700 1,015,019
IRON & STEEL--3.1%
Allegheny Technologies. Inc............. 33,350 748,291
MANUFACTURING (DIVERSIFIED)--4.1%
National Service Industries, Inc........ 33,600 991,200
OIL & GAS (REFINING & MARKETING)--4.2%
Ashland, Inc............................ 30,800 1,014,475
PAPER & FOREST PRODUCTS--4.2%
Louisiana-Pacific Corp.................. 72,100 1,027,425
PERSONAL CARE--4.1%
Avon Products, Inc...................... 29,900 986,700
RETAIL (DRUG STORES)--3.7%
Rite Aid Corp........................... 80,100 896,119
RETAIL (GENERAL MERCHANDISE)--4.1%
Sears, Roebuck & Co..................... 32,800 998,350
SERVICES (COMMERCIAL & CONSUMER)--3.6%
Service Corp. International............. 123,900 859,556
SPECIALTY PRINTING--3.8%
Donnelley (R.R.) & Sons Co.............. 36,600 908,138
TEXTILES (HOME FURNISHINGS)--4.2%
Springs Industries, Inc. Class A........ 25,500 1,018,406
</TABLE>
42 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Value 25 Fund
<TABLE>
<CAPTION>
SHARES VALUE
-------- --------------------
<S> <C> <C> <C>
TRUCKS & PARTS--4.0%
PACCAR, Inc............................. 22,000 $ 974,875
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $28,459,025) 24,118,603
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.7%
(IDENTIFIED COST $28,459,025) 24,118,603(a)
Cash and receivables, less liabilities--0.3% 80,463
--------------------
NET ASSETS--100.0% $ 24,199,066
====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $548,216 and gross
depreciation of $4,891,044 for federal income tax purposes. At December 31,
1999, the aggregate cost of securities for federal income tax purposes was
$28,461,431.
See Notes to Financial Statements
43
<PAGE>
Phoenix-Engemann Value 25 Fund
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $28,459,025) $ 24,118,603
Receivables
Investment securities sold 331,591
Dividends and interest 72,379
Fund shares sold 15,670
--------------
Total assets 24,538,243
--------------
LIABILITIES
Custodian 164,938
Payables
Fund shares repurchased 80,163
Distribution fee 38,739
Investment advisory fee 15,823
Administration fee 12,565
Trustees' fee 5,428
Accrued expenses 21,521
--------------
Total liabilities 339,177
--------------
NET ASSETS $ 24,199,066
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 28,627,728
Undistributed net investment income 41,897
Accumulated net realized loss (130,137)
Net unrealized depreciation (4,340,422)
--------------
NET ASSETS $ 24,199,066
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $13,500,475) 1,462,302
Net asset value per share $9.23
Offering price per share $9.23/(1-4.75%) $9.69
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,546,010) 823,212
Net asset value and offering price per share $9.17
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,152,581) 343,991
Net asset value and offering price per share $9.16
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 946,811
Interest 8,455
--------------
Total investment income 955,266
--------------
EXPENSES
Investment advisory fee 280,289
Distribution fee, Class A 41,044
Distribution fee, Class B 100,141
Distribution fee, Class C 46,957
Administration 186,765
Professional 17,042
Trustees 11,694
--------------
Total expenses 683,932
Less expenses borne by investment adviser (28,736)
--------------
Net expenses 655,196
--------------
NET INVESTMENT INCOME 300,070
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 3,211,792
Net change in unrealized appreciation (depreciation) on
investments (5,116,766)
--------------
NET LOSS ON INVESTMENTS (1,904,974)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($ 1,604,904)
==============
</TABLE>
44 See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Value 25 Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/99 12/31/98
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 300,070 $ 334,618
Net realized gain (loss) 3,211,792 2,097,474
Net change in unrealized appreciation
(depreciation) (5,116,766) (352,262)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,604,904) 2,079,830
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (199,489) (211,860)
Net investment income, Class B (63,334) (57,698)
Net investment income, Class C (25,820) (35,805)
Net investment income, Class M -- (335)
Net realized gains, Class A (1,953,603) (869,860)
Net realized gains, Class B (1,144,495) (538,067)
Net realized gains, Class C (477,608) (327,380)
In excess of net realized gains, Class
A (71,100) --
In excess of net realized gains, Class
B (41,654) --
In excess of net realized gains, Class
C (17,382) --
----------- -----------
DECREASE IN NET ASSETS FROM
DISTRIBUTIONS TO SHAREHOLDERS (3,994,485) (2,041,005)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (174,138
and 447,148 shares, respectively) 2,143,783 5,386,173
Net asset value of shares issued from
reinvestment of distributions
(229,321 and 92,048 shares,
respectively) 2,131,821 1,040,977
Cost of shares repurchased (495,346
and 673,296 shares, respectively) (5,870,932) (7,993,719)
----------- -----------
Total (1,595,328) (1,566,569)
----------- -----------
CLASS B
Proceeds from sales of shares (107,152
and 297,032 shares, respectively) 1,292,314 3,568,146
Net asset value of shares issued from
reinvestment of distributions
(105,576 and 39,114 shares,
respectively) 975,535 439,118
Cost of shares repurchased (336,907
and 151,755 shares, respectively) (3,840,069) (1,790,599)
----------- -----------
Total (1,572,220) 2,216,665
----------- -----------
CLASS C
Proceeds from sales of shares (47,266
and 249,615 shares, respectively) 586,348 2,992,809
Net asset value of shares issued from
reinvestment of distributions
(49,536 and 30,269 shares,
respectively) 459,616 339,363
Cost of shares repurchased (326,376
and 130,943 shares, respectively) (3,792,417) (1,510,855)
----------- -----------
Total (2,746,453) 1,821,317
----------- -----------
CLASS M
Proceeds from sales of shares (0 and
20,926 shares, respectively) -- 256,291
Net asset value of shares issued from
reinvestment of distributions
(0 and 28 shares, respectively) -- 335
Cost of shares repurchased (0 and
20,954 shares, respectively) -- (263,766)
----------- -----------
Total -- (7,140)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARE TRANSACTIONS (5,914,001) 2,464,273
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (11,513,390) 2,503,098
NET ASSETS
Beginning of period 35,712,456 33,209,358
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
$41,897 AND $30,470, RESPECTIVELY] $24,199,066 $35,712,456
=========== ===========
</TABLE>
See Notes to Financial Statements 45
<PAGE>
Phoenix-Engemann Value 25 Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
INCEPTION
YEAR ENDED DECEMBER 31, 12/17/96
-------------------------------------- TO
1999 1998 1997 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 11.64 $ 11.56 $ 10.11 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.17 0.15(1) 0.17(1) --(1)
Net realized and unrealized
gain (loss) (0.84) 0.66 1.95 0.11
--------- --------- --------- -----------
TOTAL FROM INVESTMENT
OPERATIONS (0.67) 0.81 2.12 0.11
--------- --------- --------- -----------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.16) (0.14) (0.12) --
Dividends from net realized
gains (1.52) (0.59) (0.55) --
In excess of net realized
gains (0.06) -- -- --
--------- --------- --------- -----------
TOTAL DISTRIBUTIONS (1.74) (0.73) (0.67) --
--------- --------- --------- -----------
Change in net asset value (2.41) 0.08 1.45 0.11
--------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.23 $ 11.64 $ 11.56 $ 10.11
========= ========= ========= ===========
Total return(2) (5.75)% 7.23% 21.10% 1.10%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $13,500 $18,090 $19,518 $482
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses 1.75%(3) 1.75%(3) 1.80%(3) 1.70%(4)
Net investment income (loss) 1.32% 1.25% 1.40% 1.80%(4)
Portfolio turnover 181% 135% 87.7% --%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.84%,
1.86% and 1.80% for the periods ended December 31, 1999, 1998 and 1997,
respectively.
(4) Annualized.
(5) Not annualized.
46
See Notes to Financial Statements
<PAGE>
Phoenix-Engemann Value 25 Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
-------------------------
YEAR ENDED DECEMBER 31,
-------------------------
1999 1998 1997
<S> <C> <C> <C>
Net asset value, beginning of period $11.59 $ 11.53 $10.39(6)
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.07 0.06(1) 0.08(1)
Net realized and unrealized gain
(loss) (0.83) 0.65 1.67
------ ------- ------
TOTAL FROM INVESTMENT OPERATIONS (0.76) 0.71 1.75
------ ------- ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.08) (0.06) (0.06)
Dividends from net realized gains (1.52) (0.59) (0.55)
In excess of net realized gains (0.06) -- --
------ ------- ------
TOTAL DISTRIBUTIONS (1.66) (0.65) (0.61)
------ ------- ------
Change in net asset value (2.42) 0.06 1.14
------ ------- ------
NET ASSET VALUE, END OF PERIOD $ 9.17 $ 11.59 $11.53
====== ======= ======
Total return(2) (6.46)% 6.41% 16.97%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $7,546 $10,981 $8,799
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.50% 2.50% 2.60%(4)
Net investment income (loss) 0.56% 0.54% 0.70%(4)
Portfolio turnover 181% 135% 87.7%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-------------------------
YEAR ENDED DECEMBER 31,
-------------------------
1999 1998 1997
<S> <C> <C> <C>
Net asset value, beginning of period $11.58 $11.52 $10.39(6)
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.08 0.06(1) 0.09(1)
Net realized and unrealized gain
(loss) (0.84) 0.65 1.66
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.76) 0.71 1.75
------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.08) (0.06) (0.07)
Dividends from net realized gains (1.52) (0.59) (0.55)
In excess of net realized gains (0.06) -- --
------ ------ ------
TOTAL DISTRIBUTIONS (1.66) (0.65) (0.62)
------ ------ ------
Change in net asset value (2.42) 0.06 1.13
------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.16 $11.58 $11.52
====== ====== ======
Total return(2) (6.49)% 6.42% 17.01%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,153 $6,642 $4,893
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 2.50% 2.50% 2.60%(4)
Net investment income (loss) 0.57% 0.52% 0.80%(4)
Portfolio turnover 181% 135% 87.7%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales load is not reflected in the total return calculation.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.59%,
2.61% and 2.60% for the periods ended December 31, 1999, 1998 and 1997,
respectively.
(4) Annualized.
(5) Not 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, January 9, 1997.
See Notes to Financial Statements
47
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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, five
Funds are offered for sale: Phoenix-Engemann Balanced Return Fund,
Phoenix-Engemann Focus Growth Fund, Phoenix-Engemann Nifty Fifty 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. BALANCED RETURN FUND seeks to maximize a total
investment return consistent with reasonable risk through a balanced approach.
FOCUS 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. 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 accounting principles
generally accepted in the United States 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 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.
48
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
F. FORWARD CURRENCY CONTRACTS:
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 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:
Each Fund may write covered options or purchase options contracts for purpose
of hedging against changes in the market value of the underlying securities or
foreign currencies. Additionally, each 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 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.
49
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
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>
Balanced Return Fund........... 0.80% 0.70% 0.60%
Focus 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>
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 Adviser 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 Adviser 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
$165,377 for Class A shares and deferred sales charges of $605,796 for Class B
shares and $104,512 for Class C shares for the year ended December 31, 1999. 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 and 1.00% for Class C 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, 1999
$3,067,353 was retained by the Distributor, $3,181,340 was paid out to
unaffiliated Participants and $62,393 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>
Balanced Return
Fund................ 1.09% 0.60% 0.40% 0.40%
Focus Growth Fund..... 0.99% 0.50% 0.30% 0.30%
Nifty Fifty Fund...... 0.99% 0.50% 0.30% 0.30%
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, 1999
(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>
Balanced Return Fund................ $105,134,124 $ 50,064,234
Focus Growth Fund................... 325,532,121 370,651,989
Nifty Fifty Fund.................... 184,573,540 180,403,737
Small & Mid Cap Growth Fund......... 145,720,819 130,587,780
Value 25 Fund....................... 55,409,000 64,715,111
</TABLE>
Purchases and sales of U.S. Government and agency securities during the year
ended December 31, 1999, aggregated $41,695,734 and $19,924,453 respectively,
for the Balanced Return Fund.
At December 31, 1999, the Focus Growth Fund had outstanding written options as
follows:
<TABLE>
<CAPTION>
Shares Subject Expiration Exercise Market
Call Options to Call Date Price Value
- ------------ -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Carnival Corp........... 150,000 1/22 $45.00 $384,375
Texas Instruments,
Inc................... 60,000 1/22 110.00 93,750
</TABLE>
50
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
Written option activity for the year ended December 31, 1999, for the Focus
Growth Fund aggregated the following:
<TABLE>
<CAPTION>
Number of Amount of
Options Premium
-------------- --------------
<S> <C> <C>
Options outstanding at December 31,
1998................................... -- $ --
Options written.......................... 6,100 1,623,900
Options canceled in closing purchase
transactions........................... -- --
Options expired.......................... (3,000) (472,234)
Options exercised........................ (1,000) (134,250)
------ ----------
Options outstanding at December 31,
1999................................... 2,100 $1,017,416
====== ==========
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. CAPITAL LOSS CARRYOVERS
The following Funds have capital loss carryovers, expiring in 2006, which may
be used to offset future capital gains.
<TABLE>
<S> <C>
Small & Mid-Cap Growth Fund.............. $ 4,320,592
</TABLE>
Under current tax law, capital loss realized after October 31, may be deferred
and treated as occurring on the first day of the following tax year. For the
calendar year ended December 31, 1999, the Balanced Return Fund and the Value 25
Fund elected to defer losses occurring between November 1, 1999 and December 31,
1999 in the amounts of $17,366 and $139,062, respectively.
6. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is considered to be
more informative to the shareholder. As of December 31, 1999, the Funds recorded
the following reclassifications to increase (decrease) the accounts listed
below.
<TABLE>
<CAPTION>
Undistributed Accumulated Capital paid in
net investment net realized on shares of
income (loss) gain (loss) beneficial interest
-------------- -------------- -------------------
<S> <C> <C> <C>
Balanced Return Fund..... $ 25,941 $ 23,819 $ (49,760)
Focus Growth Fund........ 7,242,469 (8,158,548) 916,079
Nifty Fifty Fund......... 5,531,589 (5,050,614) (480,975)
Small & Mid-Cap Growth
Fund................... 2,227,655 1,903 (2,229,558)
</TABLE>
7. OTHER
On October 20, 1999, the Board of Trustees of Phoenix-Engemann Funds
unanimously approved an Agreement and Plan of reorganization relating to the
proposed combination of the Phoenix-Aberdeen Worldwide Opportunities Fund and
the Phoenix-Engemann Global Growth Fund.
51
<PAGE>
PHOENIX-ENGEMANN FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 (CONTINUED)
Pursuant to the Agreement, the Global Growth Fund transferred 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 distributed the shares of the
Worldwide Opportunities Fund to its shareholders pro rata, in liquidation of the
Global Growth Fund.
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended December 31, 1999, the following Funds distributed
long-term capital gain dividends as follows:
<TABLE>
<S> <C>
Balanced Return Fund.................... $ 8,937,070
Focus Growth Fund....................... 122,083,343
Nifty Fifty Fund........................ 43,569,850
Value 25 Fund........................... 201,184
</TABLE>
For federal income tax purposes, a percentage of the ordinary income dividends
paid by the following Funds qualify for the dividends received deduction for
corporate shareholders:
<TABLE>
<S> <C>
Balanced Return Fund........................ 76.54%
Value 25 Fund............................... 28.60%
</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.
52
<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 Balanced Return Fund, Phoenix-Engemann Focus Growth Fund
(formerly Phoenix-Engemann Growth Fund), Phoenix-Engemann Nifty Fifty Fund,
Phoenix-Engemann Small & Mid-Cap Growth Fund, and the Phoenix-Engemann Value 25
Fund (constituting the Phoenix-Engemann Funds, hereafter referred to as the
"Fund") at December 31, 1999, the results of each of their operations for the
year then ended, the changes in each of their net assets for the two years in
the period then ended and the financial highlights for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
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 auditing standards generally accepted in the
United States, 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 11, 2000
53
<PAGE>
PHOENIX-ENGEMANN FUNDS
600 North Rosemead Boulevard
Pasadena, California 91107-2133
TRUSTEES
Roger Engemann
Barry E. McKinley
Robert L. Peterson
Richard C. Taylor
Angela Wong
OFFICERS
Roger Engemann, President
Malcolm Axon, Chief Financial Officer
Tina L. Mitchell, Secretary
John S. Tilson, Vice President
Thomas N. Steenburg, General Counsel and
Vice President
INVESTMENT ADVISERS
Roger Engemann & Associates ("REA")
600 North Rosemead Boulevard
Pasadena, California 91107-2133
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
Union Bank of California
475 Sansome Street
San Francisco, California 94111
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
www.phoenixinvestments.com
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PHOENIX EQUITY PLANNING CORPORATION PRSRT STD
PO Box 2200 U.S. Postage
Enfield CT 06083-2200 P A I D
Springfield, MA
Permit No. 444
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 2115(2/00)