Phoenix Home Life
The Big Edge Plus(SM)
Group Strategic Edge(R)
Semi-Annual Reports for:
Phoenix Home Life Variable
Accumulation Account
The Phoenix Edge Series Fund
Wanger Advisors Trust
June 30, 1995
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
<TABLE>
<CAPTION>
<S> <C>
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 8
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 9
Bond Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 10
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 11
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 12
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 13
Real Estate Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 4
Statement of Changes in Net Assets 6
Financial Highlights 14
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 4
Statement of Changes in Net Assets 6
Financial Highlights 15
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities 3
Statement of Operations 4
Statement of Changes in Net Assets 6
Financial Highlights 15
Notes to Financial Statements 16
</TABLE>
THE PHOENIX EDGE SERIES FUND
<TABLE>
<CAPTION>
<S> <C>
Money Market Series
Schedule of Investments 2-2
Statement of Assets and Liabilities 2-4
Statement of Operations 2-4
Statement of Changes in Net Assets 2-5
Financial Highlights 2-5
Growth Series
Schedule of Investments 2-6
Statement of Assets and Liabilities 2-8
Statement of Operations 2-8
Statement of Changes in Net Assets 2-9
Financial Highlights 2-9
Bond Series
Schedule of Investments 2-10
Statement of Assets and Liabilities 2-12
Statement of Operations 2-12
Statement of Changes in Net Assets 2-13
Financial Highlights 2-13
Total Return Series
Schedule of Investments 2-15
Statement of Assets and Liabilities 2-17
Statement of Operations 2-17
Statement of Changes in Net Assets 2-18
Financial Highlights 2-18
International Series
Schedule of Investments 2-20
Statement of Assets and Liabilities 2-22
Statement of Operations 2-22
Statement of Changes in Net Assets 2-23
Financial Highlights 2-23
Balanced Series
Schedule of Investments 2-24
Statement of Assets and Liabilities 2-26
Statement of Operations 2-26
Statement of Changes in Net Assets 2-27
Financial Highlights 2-27
Real Estate Series
Schedule of Investments 2-28
Statement of Assets and Liabilities 2-30
Statement of Operations 2-30
Statement of Changes in Net Assets 2-31
Financial Highlights 2-31
Notes to Financial Statements 2-32
</TABLE>
WANGER ADVISORS TRUST
<TABLE>
<CAPTION>
<S> <C>
Wanger International Small Cap
Advisor
Schedule of Investments 3-2
Statement of Assets and Liabilities 3-4
Statement of Operations 3-5
Statement of Changes in Net Assets 3-5
Financial Highlights 3-6
Notes to Financial Statements 3-7
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Wanger U.S. Small Cap Advisor
Schedule of Investments 4-2
Statement of Assets and Liabilities 4-4
Statement of Operations 4-5
Statement of Changes in Net Assets 4-5
Financial Highlights 4-6
Notes to Financial Statements 4-7
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
------------------------- ------------------------- --------------------------
Assets
<S> <C> <C> <C> <C> <C> <C>
Investment in The
Phoenix Edge Series
Fund, at market $ 8,085,802 $74,665,843 $62,230,070 $612,640,816 $14,192,298 $71,815,592
Distribution
receivable -- -- -- -- -- --
---------- --------- ---------- --------- ---------- -----------
Total assets 8,085,802 74,665,843 62,230,070 612,640,816 14,192,298 71,815,592
Liabilities
Accrued expenses to
related party 8,818 75,969 50,708 618,395 11,740 73,215
---------- --------- ---------- --------- ---------- -----------
Net assets $ 8,076,984 $74,589,874 $62,179,362 $612,022,421 $14,180,558 $71,742,377
========== ========= ========== ========= ========== ===========
Net assets consist of:
Cost to participants $ 1,456,289 $67,570,863 $24,747,685 $469,152,133 $ 6,157,673 $60,836,493
Investment income 7,922,904 9,896,360 17,890,702 76,862,766 8,745,183 13,048,552
Mortality and expense
risk charges (1,302,209) (2,877,351) (2,812,931) (13,334,432) (995,776) (1,956,783)
Net realized gain
(loss) -- 2 2,428,558 (59,874) 196,865 (94,792)
Net unrealized
appreciation
(depreciation) on
investments in The
Phoenix Edge Series
Fund -- -- 19,925,348 79,401,828 76,613 (91,093)
---------- --------- ---------- --------- ---------- -----------
Net assets $ 8,076,984 $74,589,874 $62,179,362 $612,022,421 $14,180,558 $71,742,377
========== ========= ========== ========= ========== ===========
Accumulation units
outstanding 4,038,015 38,082,674 8,449,044 84,905,380 4,563,016 23,562,827
========== ========= ========== ========= ========== ===========
Net asset value per
unit $ 2.000236 $ 1.958630 $ 7.359337 $ 7.208288 $ 3.107716 $ 3.044727
========== ========= ========== ========= ========== ===========
Investments at cost $ 8,085,802 $74,665,843 $42,304,722 $533,238,988 $14,115,685 $71,906,685
========== ========= ========== ========= ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
-------------------------- --------------------------- ----------------------------
Assets
<S> <C> <C> <C> <C> <C> <C>
Investment in The
Phoenix Edge Series
Fund, at market $63,357,894 $228,816,128 $5,788,371 $106,089,869 $4,895,269 $154,692,640
Distribution
receivable -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ------------
Total assets 63,357,894 228,816,128 5,788,371 106,089,869 4,895,269 154,692,640
Liabilities
Accrued expenses to
related party 51,885 234,527 4,807 109,680 4,007 158,358
---------- ---------- ---------- ---------- ---------- ------------
Net assets $63,306,009 $228,581,601 $5,783,564 $105,980,189 $4,891,262 $154,534,282
========== ========== ========== ========== ========== ============
Net assets consist of:
Cost to participants $22,389,278 $188,513,490 $5,370,592 $ 99,531,372 $4,079,400 $139,143,118
Investment income 28,967,900 33,702,801 269,917 3,151,419 572,871 13,642,478
Mortality and expense
risk charges (4,703,308) (6,466,277) (141,579) (2,202,726) (148,982) (4,184,688)
Net realized gain
(loss) 2,774,547 288,440 (330,389) (744,296) 6,065 (68,084)
Net unrealized
appreciation on
investment in The
Phoenix Edge Series
Fund 13,877,592 12,543,147 615,023 6,244,420 381,908 6,001,458
---------- ---------- ---------- ---------- ---------- ------------
Net assets $63,306,009 $228,581,601 $5,783,564 $105,980,189 $4,891,262 $154,534,282
========== ========== ========== ========== ========== ============
Accumulation units
outstanding 19,040,700 70,224,871 4,420,488 82,030,760 3,967,801 126,354,903
========== ========== ========== ========== ========== ============
Net asset value per
unit $ 3.324773 $ 3.254995 $ 1.308354 $ 1.291957 $ 1.232739 $ 1.223018
========== ========== ========== ========== ========== ============
Investments at cost $49,480,302 $216,272,981 $5,173,348 $ 99,845,449 $4,513,361 $148,691,182
========== ========== ========== ========== ========== ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995
(UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
Wanger International Small
Real Estate Cap Wanger U.S. Small Cap
Sub-Account Sub-Account Sub-Account
VA1 VA2 VA1 VA2 VA1 VA2
<S> <C> <C> <C> <C> <C> <C>
------------------------ ------------------------ -------------------------
Assets
Investment in The
Phoenix Edge Series
Fund, at market $ 26,180 $5,944,046 $ 19,807 $1,443,267 $ 190,268 $3,001,370
Distribution
receivable -- -- -- -- -- --
--------- ---------- --------- ---------- --------- ------------
Total assets 26,180 5,944,046 19,807 1,443,267 190,268 3,001,370
Liabilities
Accrued expenses to
related party 17 5,965 10 1,222 74 2,034
--------- ---------- --------- ---------- --------- ------------
Net assets $ 26,163 $5,938,081 $ 19,797 $1,442,045 $ 190,194 $2,999,336
========= ========== ========= ========== ========= ============
Net assets consist of:
Cost to participants $ 25,549 $5,667,358 $ 19,582 $1,399,489 $ 181,783 $2,826,024
Investment income 235 67,537 0 0 0 0
Mortality and expense
risk charges (27) (11,528) (10) (1,422) (78) (2,470)
Net realized gain
(loss) 2 2,158 0 303 2 (938)
Net unrealized
appreciation on
investment in The
Phoenix Edge Series
Fund 404 212,556 225 43,675 8,487 176,720
--------- ---------- --------- ---------- --------- ------------
Net assets $ 26,163 $5,938,081 $ 19,797 $1,442,045 $ 190,194 $2,999,336
========= ========== ========= ========== ========= ============
Accumulation units
outstanding 25,198 5,648,415 19,488 1,316,603 176,060 2,778,019
========= ========== ========= ========== ========= ============
Net asset value per
unit $1.038294 $ 1.051283 $1.015862 $ 1.095277 $1.080282 $ 1.079667
========= ========== ========= ========== ========= ============
Investments at cost $ 25,776 $5,731,490 $ 19,582 $1,399,592 $ 181,781 $2,824,650
========= ========== ========= ========== ========= ============
</TABLE>
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
----------------------- ------------------------- --------------------------
Investment income
<S> <C> <C> <C> <C> <C> <C>
Distributions $232,722 $1,958,545 $ 428,674 $ 4,147,133 $ 579,982 $2,749,007
Expenses
Mortality and expense risk
charges 41,127 431,671 284,721 3,355,833 68,638 388,976
------- ----------- --------- ----------- --------- ------------
Net investment income 191,595 1,526,874 143,953 791,300 511,344 2,360,031
------- ----------- --------- ----------- --------- ------------
Net realized gain -- -- 19,266 136,200 27,850 18,722
Net unrealized appreciation
on investment in The
Phoenix Edge Series Fund -- -- 8,041,526 76,448,727 1,084,770 4,965,423
------- ----------- --------- ----------- --------- ------------
Net gain on investments -- -- 8,060,792 76,584,927 1,112,620 4,984,145
------- ----------- --------- ----------- --------- ------------
Net increase in net assets
resulting from operations $191,595 $1,526,874 $8,204,745 $77,376,227 $1,623,964 $7,344,176
======= =========== ========= =========== ========= ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
------------------------- ------------------------ ------------------------
Investment income
<S> <C> <C> <C> <C> <C> <C>
Distributions $ $
$1,121,778 $ 4,004,938 -- -- $ 94,028 $ 2,840,088
Expenses
Mortality and expense risk
charges 306,776 1,285,428 31,766 656,058 25,604 935,576
--------- ----------- -------- ----------- ------- ------------
Net investment income (loss) 815,002 2,719,510 (31,766) (656,058) 68,424 1,904,512
--------- ----------- -------- ----------- ------- ------------
Net realized gain (loss) 73,856 110,025 (178,016) (655,196) 9,022 91,912
Net unrealized appreciation
on investment in The
Phoenix Edge Series Fund 5,260,779 18,591,746 359,306 4,206,362 393,524 11,642,345
--------- ----------- -------- ----------- ------- ------------
Net gain on investments 5,334,635 18,701,771 181,290 3,551,166 402,546 11,734,257
--------- ----------- -------- ----------- ------- ------------
Net increase in net assets
resulting from operations $6,149,637 $21,421,281 $ 149,524 $2,895,108 $470,970 $13,638,769
========= =========== ======== =========== ======= ============
</TABLE>
<TABLE>
<CAPTION>
Wanger International
Real Estate(1) Small Cap(1) Wanger U.S. Small Cap (1)
Sub-Account Sub-Account Sub-Account
VA1 VA2 VA1 VA2 VA1 VA2
------------------ ---------------------- -------------------------
Investment income
<S> <C> <C> <C> <C> <C> <C>
Distributions $235 $ 67,537 $ -- $ -- $ -- $ --
Expenses
Mortality and expense risk charges 27 11,528 10 1,422 78 2,470
------ ------ -------- ------- ------- ------------
Net investment income (loss) 208 56,009 (10) (1,422) (78) (2,470)
------ ------ -------- ------- ------- ------------
Net realized gain (loss) 2 2,158 -- 303 2 (938)
------ ------ -------- ------- ------- ------------
Net unrealized appreciation on
investment in The Phoenix Edge
Series Fund 404 212,556 225 43,675 8,487 176,720
------ ------ -------- ------- ------- ------------
Net gain on investments 406 214,714 225 43,978 8,489 175,782
------ ------ -------- ------- ------- ------------
Net increase in net assets
resulting from operations 614 270,723 215 42,556 8,411 173,312
====== ====== ======== ======= ======= ============
</TABLE>
(1) From inception May 1, 1995 to June 30 ,1995
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
------------------------ ------------------------ --------------------------
From operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 191,595 $ 1,526,874 $ 143,953 $ 791,300 $ 511,344 $ 2,360,031
Net realized gain -- -- 19,266 136,200 27,850 18,722
Net change in unrealized
appreciation on
investment in The
Phoenix Edge Series Fund -- -- 8,041,526 76,448,727 1,084,770 4,965,423
-------- ----------- -------- ----------- -------- ------------
Net increase in net
assets resulting from
operations 191,595 1,526,874 8,204,745 77,376,227 1,623,964 7,344,176
-------- ----------- -------- ----------- -------- ------------
From accumulation unit
transactions
Participant deposits (69,167) 26,334,865 642,966 60,336,624 76,262 4,456,785
Participant transfers 6,701 (20,417,272) 2,685,846 15,637,962 (212,680) 6,077,505
Participant withdrawals (1,136,885) (5,672,883) (2,669,636) (18,585,225) (676,373) (1,988,478)
-------- ----------- -------- ----------- -------- ------------
(Decrease) increase in
net assets resulting
from participant
transactions (1,199,351) 244,710 659,176 57,389,361 (812,791) 8,545,812
-------- ----------- -------- ----------- -------- ------------
Net (decrease) increase
in net assets (1,007,756) 1,771,584 8,863,921 134,765,588 811,173 15,889,988
Net assets
Beginning of period 9,084,740 72,818,290 53,315,441 477,256,833 13,369,385 55,852,389
-------- ----------- -------- ----------- -------- ------------
End of period $ 8,076,984 $ 74,589,874 $62,179,362 $612,022,421 $14,180,558 $71,742,377
======== =========== ======== =========== ======== ============
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
------------------------ ------------------------ ------------------------
From operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income
(loss) $ 815,002 $ 2,719,510 $ (31,766) $ (656,058) $ 68,424 $ 1,904,512
Net realized gain (loss) 73,856 110,025 (178,016) (655,196) 9,022 91,912
Net change in unrealized
appreciation on
investment
in The Phoenix Edge
Series Fund 5,260,779 18,591,746 359,306 4,206,362 393,524 11,642,345
--------- --------- --------- --------- -------- -----------
Net increase in net
assets resulting from
operations 6,149,637 21,421,281 149,524 2,895,108 470,970 13,638,769
--------- --------- --------- --------- -------- -----------
From accumulation unit
transactions
Participant deposits 689,121 15,985,467 90,985 10,790,318 20,534 6,725,126
Participant transfers (972,800) (2,425,134) (1,801,368) (12,989,525) (581,489) (7,981,402)
Participant withdrawals (2,672,749) (9,411,097) (167,273) (5,515,460) (338,693) (3,930,378)
--------- --------- --------- --------- -------- -----------
(Decrease) increase in
net assets resulting
from participant
transactions (2,956,428) 4,149,236 (1,877,656) (7,714,667) (899,648) (5,186,654)
--------- --------- --------- --------- -------- -----------
Net increase (decrease)
in net assets 3,193,209 25,570,517 (1,728,132) (4,819,559) (428,678) 8,452,115
Net assets
Beginning of period 60,112,800 203,011,084 7,511,696 110,799,748 5,319,940 146,082,167
--------- --------- --------- --------- -------- -----------
End of period $63,306,009 $228,581,601 $ 5,783,564 $105,980,189 $4,891,262 $154,534,282
========= ========= ========= ========= ======== ===========
</TABLE>
See Notes to Financial Statements
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION MAY 1, 1995 TO JUNE 30, 1995
(UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
Wanger International
Real Estate Small Cap Wanger U.S. Small Cap
Sub-Account Sub-Account Sub-Account
VA1 VA2 VA1 VA2 VA1 VA2
-------------------- -------------------- ---------------------
From operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 208 $ 56,009 $ (10) $ (1,422) $ (78) $ (2,470)
Net realized gain (loss) 2 2,158 -- 303 2 (938)
Net change in unrealized
appreciation
on investment in The Phoenix Edge
Series Fund 404 212,556 225 43,675 8,487 176,720
------ --------- ------ --------- ------- ---------
Net increase in net assets
resulting
from operations 614 270,723 215 42,556 8,411 173,312
------ --------- ------ --------- ------- ---------
From accumulation unit transactions
Participant deposits -- 5,063,532 -- 558,308 -- 790,563
Participant transfers 25,688 604,471 19,582 840,204 181,879 2,043,810
Participant withdrawals (139) (645) -- 977 (96) (8,349)
------ --------- ------ --------- ------- ---------
Increase in net assets resulting
from participant transactions 25,549 5,667,358 19,582 1,399,489 181,783 2,826,024
------ --------- ------ --------- ------- ---------
Net increase in net assets 26,163 5,938,081 19,797 1,442,045 190,194 2,999,336
Net assets
Beginning of period -- -- -- -- -- --
------ --------- ------ --------- ------- ---------
End of period $26,163 $5,938,081 $19,797 $1,442,045 $190,194 $2,999,336
====== ========= ====== ========= ======= =========
</TABLE>
See Notes to Financial Statements
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
----------------------- ----------------------- ------------------------
From operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 326,657 $ 1,748,288 $ 3,122,506 $ 26,972,210 $ 813,324 $ 3,716,810
Net realized gain (loss) -- 2 36,532 (185,473) (119,176) (103,382)
Net change in unrealized
depreciation on investment
in The Phoenix Edge
Series Fund -- -- (2,888,602) (27,412,518) (1,555,961) (7,606,399)
-------- --------- -------- --------- -------- ----------
Net increase (decrease) in net
assets resulting from
operations 326,657 1,748,290 270,436 (625,781) (861,813) (3,992,971)
-------- --------- -------- --------- -------- ----------
From accumulation unit
transactions
Participant deposits 672,977 82,740,250 1,650,544 120,706,294 334,527 16,036,535
Participant transfers 2,074,604 (64,774,356) 529,383 39,687,809 (2,375,359) (11,882,665)
Participant withdrawals (2,766,967) (3,208,509) (4,245,122) (12,102,289) (849,236) (1,898,032)
-------- --------- -------- --------- -------- ----------
(Decrease) increase in net
assets resulting from
participant transactions (19,386) 14,757,385 (2,065,195) 148,291,814 (2,890,068) 2,255,838
-------- --------- -------- --------- -------- ----------
Net increase (decrease) in net
assets 307,271 16,505,675 (1,794,759) 147,666,033 (3,751,881) (1,737,133)
Net assets
Beginning of period 8,777,469 56,312,615 55,110,200 329,590,800 17,121,266 57,589,522
-------- --------- -------- --------- -------- ----------
End of period $ 9,084,740 $72,818,290 $53,315,441 $477,256,833 $13,369,385 $ 55,852,389
======== ========= ======== ========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
VA2, VA3 & VA2, VA3 & VA2, VA3 &
VA1 GSE VA1 GSE VA1 GSE
------------------------ ---------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
From operations
Net investment income $ 3,435,643 $ 9,584,872 $ 138,303 $ 1,719,878 $ 179,216 $ 4,587,887
Net realized gain (loss) 28,537 585 (147,743) (42,480) (6,391) (162,115)
Net change in unrealized
depreciation on investment in
The Phoenix Edge Series Fund (5,099,091) (14,366,230) (356,376) (5,430,269) (387,117) (10,613,599)
--------- --------- ------- --------- -------- ----------
Net decrease in net assets
resulting from operations (1,634,911) (4,780,773) (365,816) (3,752,871) (214,292) (6,187,827)
--------- --------- ------- --------- -------- ----------
From accumulation unit
transactions
Participant deposits 1,680,952 49,970,179 661,080 37,744,141 221,507 33,865,296
Participant transfers (3,842,234) 2,101,275 3,232,950 28,438,748 (1,051,098) (19,227,859)
Participant withdrawals (7,060,752) (7,436,162) (251,907) (2,279,128) (183,646) (6,614,458)
--------- --------- ------- --------- -------- ----------
(Decrease) increase in net
assets resulting from
participant transactions (9,222,034) 44,635,292 3,642,123 63,903,761 (1,013,237) 8,022,979
--------- --------- ------- --------- -------- ----------
Net (decrease) increase in net
assets (10,856,945) 39,854,519 3,276,307 60,150,890 (1,227,529) 1,835,152
Net assets
Beginning of period 70,969,745 163,156,565 4,235,389 50,648,858 6,547,469 144,247,015
--------- --------- ------- --------- -------- ----------
End of period $ 60,112,800 $203,011,084 $7,511,696 $110,799,748 $ 5,319,940 $146,082,167
========= ========= ======= ========= ======== ==========
</TABLE>
See Notes to Financial Statements
7
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Money Market Sub-Account
VA1
----------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.954211 $1.900873 $1.866308 $1.820007 $1.734559 $1.619595
Income from investment operations
Net investment income 0.046025 0.053338 0.034565 0.046301 0.085448 0.114964
-------- -------- -------- -------- -------- ---------
Total from investment operations 0.046025 0.053338 0.034565 0.046301 0.085448 0.114964
-------- -------- -------- -------- -------- ---------
Change in net asset value 0.046025 0.053338 0.034565 0.046301 0.085448 0.114964
-------- -------- -------- -------- -------- ---------
Net asset value, end of period $2.000236 $1.954211 $1.900873 $1.866308 $1.820007 $1.734559
======== ======== ======== ======== ======== =========
Total return 2.36% 2.81% 1.85% 2.54% 4.93% 7.10%
Ratios/supplemental data:
Net assets, end of period (000) $ 8,077 $ 9,085 $ 8,777 $ 16,052 $ 18,726 $ 22,740
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 4.66%(1) 2.81% 1.84% 2.52% 4.84% 6.86%
</TABLE>
<TABLE>
<CAPTION>
Money Market Sub-Account
VA2, VA3 & GSE
----------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.915930 $1.868172 $1.838756 $1.797544 $1.717328 $1.607305
Income from investment operations
Net investment income 0.042700 0.047758 0.029416 0.041212 0.080216 0.110023
-------- -------- -------- -------- -------- ---------
Total from investment operations 0.042700 0.047758 0.029416 0.041212 0.080216 0.110023
-------- -------- -------- -------- -------- ---------
Change in net asset value 0.042700 0.047758 0.029416 0.041212 0.080216 0.110023
-------- -------- -------- -------- -------- ---------
Net asset value, end of period $1.958630 $1.915930 $1.868172 $1.838756 $1.797544 $1.717328
======== ======== ======== ======== ======== =========
Total return 2.23% 2.56% 1.60% 2.29% 4.67% 6.85%
Ratios/supplemental data:
Net assets, end of period (000) $ 74,590 $ 72,818 $ 56,313 $ 49,889 $ 27,558 $ 14,981
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment income 4.42%(1) 2.64% 1.55% 2.21% 4.44% 6.61%
</TABLE>
(1) Annualized
See Notes to Financial Statements
8
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Growth Sub-Account
VA1
-----------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.384494 $ 6.355486 $5.362579 $4.910837 $3.474821 $3.373255
Income from investment operations
Net investment income 0.017104 0.334932 0.420427 0.258528 0.653298 0.071985
Net realized and unrealized gain
(loss) 0.957739 (0.305924) 0.572480 0.193214 0.782718 0.029581
-------- --------- -------- -------- -------- ---------
Total from investment
operations 0.974843 0.029008 0.992907 0.451742 1.436016 0.101566
-------- --------- -------- -------- -------- ---------
Change in net asset value 0.974843 0.029008 0.992907 0.451742 1.436016 0.101566
-------- --------- -------- -------- -------- ---------
Net asset value, end of period $7.359337 $ 6.384494 $6.355486 $5.362579 $4.910837 $3.474821
======== ========= ======== ======== ======== =========
Total return 15.27% 0.46% 18.52% 9.20% 41.33% 3.01%
Ratios/supplemental data:
Net assets, end of period (000) $ 62,179 $ 53,315 $ 55,110 $ 46,398 $ 35,752 $ 23,135
Ratio to average net assets of:
Total expenses 1.00%(2) 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 0.51%(2) 5.75% 7.27% 5.46% 15.33% 2.07%
Portfolio turnover 10%(2) 15% 12% 26% 13% 21%
</TABLE>
<TABLE>
<CAPTION>
Growth Sub-Account
VA2, VA3 & GSE
-------------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ----------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $6.261062 $ 6.248053 $5.284626 $4.851447 $3.440659 $3.348325
Income from investment
operations
Net investment income 0.009687 0.353630(1) 0.477662 0.269188 0.955990 0.019329
Net realized and unrealized
gain (loss) 0.937539 (0.340621)(1) 0.485765 0.163991 0.454798 0.073005
-------- ---------- -------- -------- -------- ---------
Total from investment
operations 0.947226 0.013009 0.963427 0.433179 1.410788 0.092334
-------- ---------- -------- -------- -------- ---------
Change in net asset value 0.947226 0.013009 0.963427 0.433179 1.410788 0.092334
-------- ---------- -------- -------- -------- ---------
Net asset value, end of period $7.208288 $ 6.261062 $6.248053 $5.284626 $4.851447 $3.440659
======== ========== ======== ======== ======== =========
Total return 15.13% 0.21% 18.23% 8.93% 41.00% 2.76%
Ratios/supplemental data:
Net assets, end of period (000) $ 612,022 $ 477,257 $ 329,591 $ 156,058 $ 59,881 $ 15,190
Ratio to average net assets of:
Total expenses 1.25%(2) 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment income 0.29%(2) 6.60% 8.85% 6.95% 22.43% 2.21%
Portfolio turnover 10%(2) 10% 10% 18% 13% 23%
</TABLE>
(1) The components in the change in unit value were calculated based on units
outstanding at December 31, 1994.
(2) Annualized
See Notes to Financial Statements
9
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Bond Sub-Account
VA1
------------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ---------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $2.762836 $ 2.952674 $2.572692 $2.360698 $1.993832 $ 1.913888
Income from investment
operations
Net investment income 0.108594 0.179157 0.192311 0.144573 0.161818 0.270626
Net realized and unrealized
gain (loss) 0.236286 (0.368995) 0.187671 0.067421 0.205048 (0.190682)
-------- --------- -------- -------- -------- ----------
Total from investment
operations 0.344880 (0.189838) 0.379982 0.211994 0.366866 0.079944
-------- --------- -------- -------- -------- ----------
Change in net asset value 0.344880 (0.189838) 0.379982 0.211994 0.366866 0.079944
-------- --------- -------- -------- -------- ----------
Net asset value, end of period $3.107716 $ 2.762836 $2.952674 $2.572692 $2.360698 $ 1.993832
======== ========= ======== ======== ======== ==========
Total return 12.48% (6.43)% 14.77% 8.98% 18.40% 4.18%
Ratios/supplemental data:
Net assets, end of period (000) $ 14,181 $ 13,369 $ 17,121 $ 14,249 $ 13,081 $ 10,138
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 7.45%(1) 6.58% 6.78% 6.11% 7.51% 8.15%
Portfolio turnover 14%(1) 57% 37% 47% 19% 38%
</TABLE>
<TABLE>
<CAPTION>
Bond Sub-Account
VA2, VA3 & GSE
-----------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $2.710153 $ 2.902941 $2.535693 $2.332392 $1.974705 $1.900136
Income from investment operations
Net investment income 0.107514 0.179454 0.222948 0.166529 0.160117 0.046477
Net realized and unrealized
gain (loss) 0.227060 (0.372242) 0.144300 0.036772 0.197570 0.028092
-------- --------- -------- -------- -------- ---------
Total from investment
operations 0.334574 (0.192788) 0.367248 0.203301 0.357687 0.074569
-------- --------- -------- -------- -------- ---------
Change in net asset value 0.334574 (0.192788) 0.367248 0.203301 0.357687 0.074569
-------- --------- -------- -------- -------- ---------
Net asset value, end of period $3.044727 $ 2.710153 $2.902941 $2.535693 $2.332392 $1.974705
======== ========= ======== ======== ======== =========
Total return 12.35% (6.64)% 14.48% 8.72% 18.11% 3.92%
Ratios/supplemental data:
Net assets, end of period (000) $ 71,742 $ 55,852 $ 57,590 $ 26,909 $ 8,117 $ 2,839
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment income 7.58%(1) 6.43% 7.55% 6.54% 7.77% 8.61%
Portfolio turnover 29%(1) 29% 17% 21% 24% 29%
</TABLE>
(1) Annualized
See Notes to Financial Statements
10
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Total Return Sub-Account
VA1
-------------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $3.008513 $ 3.081973 $2.804149 $ 2.559543 $1.999109 $ 1.909058
Income from investment
operations
Net investment income 0.041913 0.154371 0.091335 0.267746 0.214662 0.104323
Net realized and unrealized
gain (loss) 0.274347 (0.227831) 0.186489 (0.023140) 0.345772 (0.014272)
-------- --------- -------- --------- -------- ----------
Total from investment
operations 0.316260 (0.073460) 0.277824 0.244606 0.560434 0.090051
-------- --------- -------- --------- -------- ----------
Change in net asset value 0.316260 (0.073460) 0.277824 0.244606 0.560434 0.090051
-------- --------- -------- --------- -------- ----------
Net asset value, end of period $3.324773 $ 3.008513 $3.081973 $ 2.804149 $2.559543 $ 1.999109
======== ========= ======== ========= ======== ==========
Total return 10.51% (2.38)% 9.91% 9.56% 28.03% 4.72%
Ratios/supplemental data:
Net assets, end of period (000) $ 63,306 $ 60,113 $ 70,970 $ 65,683 $ 58,655 $ 45,314
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 2.66%(1) 5.22% 3.09% 10.15% 9.40% 4.35%
Portfolio turnover 5%(1) 10% 7% 16% 12% 10%
</TABLE>
<TABLE>
<CAPTION>
Total Return Sub-Account
VA2, VA3 & GSE
------------------------------------------------------------------------
Six
Months
Ended
6/30/95 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $2.948151 $ 3.028790 $2.762529 $ 2.527829 $1.979067 $1.894604
Income from investment operations
Net investment income 0.038955 0.161671 0.094630 0.296865 0.267345 0.018215
Net realized and unrealized gain
(loss) 0.267889 (0.242310) 0.171631 (0.062165) 0.281417 0.066248
-------- --------- -------- --------- -------- ---------
Total from investment operations 0.306844 (0.080639) 0.266261 0.234700 0.548762 0.084463
-------- --------- -------- --------- -------- ---------
Change in net asset value 0.306844 (0.080639) 0.266261 0.234700 0.548762 0.084463
-------- --------- -------- --------- -------- ---------
Net asset value, end of period $3.254995 $ 2.948151 $3.028790 $ 2.762529 $2.527829 $1.979067
======== ========= ======== ========= ======== =========
Total return 10.41% (2.66)% 9.64% 9.28% 27.73% 4.46%
Ratios/supplemental data:
Net assets, end of period (000) $ 228,582 $ 203,011 $ 163,157 $ 84,066 $ 34,186 $ 13,914
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment income 2.64%(1) 5.00% 3.18% 12.86% 12.06% 4.50%
Portfolio turnover 16%(1) 3% 1% 2% 5% 6%
</TABLE>
(1) Annualized
See Notes to Financial Statements
11
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
International Sub-Account
VA1
---------------------------------------------------------------------------
Six Months From
Ended Inception
6/30/95 Year Ended December 31, 5/1/90 to
(Unaudited) 1994 1993 1992 1991 12/31/90
---------- ---------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.267735 $ 1.279733 $ 0.933515 $ 1.081746 $0.912543 $ 1.000000
Income from investment
operations
Net investment (loss) income (0.008629) 0.004536 (0.009969) (0.005027) 0.073008 0.007788
Net realized and unrealized
gain (loss) 0.049248 (0.016534) 0.356187 (0.143204) 0.096195 (0.095245)
--------- --------- --------- --------- -------- ----------
Total from investment
operations 0.040619 (0.011998) 0.346218 (0.148231) 0.169203 (0.087457)
--------- --------- --------- --------- -------- ----------
Change in net asset value 0.040619 (0.011998) 0.346218 (0.148231) 0.169203 (0.087457)
--------- --------- --------- --------- -------- ----------
Net asset value, end of period $ 1.308354 $ 1.267735 $ 1.279733 $ 0.933515 $1.081746 $ 0.912543
========= ========= ========= ========= ======== ==========
Total return 3.20% (0.94)% 37.09% (13.70)% 18.54% (8.75)%
Ratios/supplemental data:
Net assets, end of period (000) $ 5,784 $ 7,512 $ 4,235 $ 1,308 $ 883 $ 447
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00% 1.00 % 1.00 % 1.00% 1.00%(1)
Net investment (loss) income (1.00)%(1) 2.04% (1.00)% (0.51)% 6.52% 2.81%(1)
Portfolio turnover 17%(1) 71% 33 % 26 % 29% 135%(1)
</TABLE>
<TABLE>
<CAPTION>
International Sub-Account
VA2, VA3 & GSE
---------------------------------------------------------------------------
Six Months From
Ended Inception
6/30/95 Year Ended December 31, 5/1/90 to
(Unaudited) 1994 1993 1992 1991 12/31/90
---------- ---------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.253391 $ 1.268491 $ 0.927578 $ 1.077492 $0.911158 $ 1.000000
Income from investment
operations
Net investment (loss) income (0.008739) 0.006920 (0.011809) (0.006121) 0.100601 0.006342
Net realized and unrealized
gain (loss) 0.047305 (0.022020) 0.352722 (0.143793) 0.065733 (0.095184)
--------- --------- --------- --------- -------- ----------
Total from investment
operations 0.038566 (0.015100) 0.340913 (0.149914) 0.166334 (0.088842)
--------- --------- --------- --------- -------- ----------
Change in net asset value 0.038566 (0.015100) 0.340913 (0.149914) 0.166334 (0.088842)
--------- --------- --------- --------- -------- ----------
Net asset value, end of period $ 1.291957 $ 1.253391 $ 1.268491 $ 0.927578 $1.077492 $ 0.911158
========= ========= ========= ========= ======== ==========
Total return 3.08% (1.19)% 36.75% (13.91)% 18.26% (8.88)%
Ratios/supplemental data:
Net assets, end of period (000) $ 105,980 $ 110,800 $ 50,649 $ 11,416 $ 4,702 $ 1,472
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25% 1.25 % 1.25 % 1.25% 1.25%(1)
Net investment (loss) income (1.25)%(1) 1.94% (1.25)% (0.66)% 8.15% 2.24%(1)
Portfolio turnover 18%(1) 8% 6 % 17 % 19% 48%(1)
</TABLE>
(1) Annualized
See Notes to Financial Statements
12
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Balanced Sub-Account
VA1
-----------------------------------------------
Six
Months From
Ended Year Ended December Inception
6/30/95 31, 5/1/92 to
(Unaudited) 1994 1993 12/31/92
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.124370 $ 1.168840 $1.086965 $1.000000
Income from investment operations
Net investment income 0.015744 0.037191 0.031512 0.015447
Net realized and unrealized gain (loss) 0.092625 (0.081661) 0.050363 0.071518
-------- --------- -------- ---------
Total from investment operations 0.108369 (0.044470) 0.081875 0.086965
-------- --------- -------- ---------
Change in net asset value 0.108369 (0.044470) 0.081875 0.086965
-------- --------- -------- ---------
Net asset value, end of period $1.232739 $ 1.124370 $1.168840 $1.086965
======== ========= ======== =========
Total return 9.64% (3.80)% 7.53% 8.70%
Ratios/supplemental data:
Net assets, end of period (000) $ 4,891 $ 5,320 $ 6,547 $ 3,569
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00% 1.00% 1.00%(1)
Net investment income 2.67%(1) 3.18% 2.63% 2.63%(1)
Portfolio turnover 9%(1) 15% 10% 39%(1)
</TABLE>
<TABLE>
<CAPTION>
Balanced Sub-Account
VA2, VA3 & GSE
-----------------------------------------------
Six
Months From
Ended Year Ended December Inception
6/30/95 31, 5/1/92 to
(Unaudited) 1994 1993 12/31/92
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $1.116862 $ 1.163951 $1.085113 $1.000000
Income from investment operations
Net investment income 0.014824 0.034914 0.034033 0.014937
Net realized and unrealized gain (loss) 0.091332 (0.082003) 0.044805 0.070176
-------- --------- -------- ---------
Total from investment operations 0.106156 (0.047089) 0.078838 0.085113
-------- --------- -------- ---------
Change in net asset value 0.106156 (0.047089) 0.078838 0.085113
-------- --------- -------- ---------
Net asset value, end of period $1.223018 $ 1.116862 $1.163951 $1.085113
======== ========= ======== =========
Total return 9.50% (4.05)% 7.27% 8.51%
Ratios/supplemental data:
Net assets, end of period (000) $ 154,534 $ 146,082 $ 144,247 $ 43,122
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25% 1.25% 1.25%(1)
Net investment income 2.54%(1) 3.04% 2.74% 2.57%(1)
Portfolio turnover 11%(1) 13% 1% 4%(1)
</TABLE>
(1) Annualized
See Notes to Financial Statements
13
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Real Estate Securities
Sub-Account
VA1
-----------------------
From
Inception
5/1/95 to 6/30/95
(Unaudited)
-----------------------
<S> <C>
Net asset value, beginning of period $1.000000
Income from investment operations
Net investment income 0.012973
Net realized and unrealized gain 0.025321
---------------------
Total from investment operations 0.038294
---------------------
Change in net asset value 0.038294
---------------------
Net asset value, end of period $1.038294
=====================
Total return 3.83%
Ratios/supplemental data:
Net assets, end of period (000) $ 26
Ratio to average net assets of:
Total expenses 1.00%(1)
Net investment income (loss) 7.70%(1)
Portfolio turnover 4%(1)
</TABLE>
<TABLE>
<CAPTION>
Real Estate Securities
Sub-Account
VA2
-----------------------
From
Inception
5/1/95 to 6/30/95
(Unaudited)
-----------------------
<S> <C>
Net asset value, beginning of period $1.000000
Income from investment operations
Net investment income 0.010610
Net realized and unrealized gain 0.040673
---------------------
Total from investment operations 0.051283
---------------------
Change in net asset value 0.051283
---------------------
Net asset value, end of period $1.051283
=====================
Total return 5.13%
Ratios/supplemental data:
Net assets, end of period (000) $ 5,938
Ratio to average net assets of:
Total expenses 1.25%(1)
Net investment income 6.07%(1)
Portfolio turnover 28%(1)
</TABLE>
(1) Annualized
See Notes to Financial Statements
14
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Wanger International Small Cap Wanger U.S. Small Cap.
Sub-Account Sub-Account
VA1
--------------------------------------------------------
From From
Inception Inception
5/1/95 to 6/30/95 5/1/95 to 6/30/95
(Unaudited) (Unaudited)
------------------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period $ 1.000000 $ 1.000000
Income from investment operations
Net investment (loss) (0.000738) (0.000745)
Net realized and unrealized gain 0.016600 0.081027
----------------------------- ---------------------
Total from investment operations 0.015862 0.080282
----------------------------- ---------------------
Change in net asset value 0.015862 0.080282
----------------------------- ---------------------
Net asset value, end of period $ 1.015862 $ 1.080282
============================= =====================
Total return 1.59% 8.03%
Ratios/supplemental data:
Net assets, end of period (000) $ 20 $ 190
Ratio to average net assets of:
Total expenses 1.00%(1) 1.00%(1)
Net investment income (loss) (1.00)%(1) (1.00)%(1)
Portfolio turnover N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Wanger International Small Cap Wanger U.S. Small Cap.
Sub-Account Sub-Account
VA2
--------------------------------------------------------
From From
Inception Inception
5/1/95 to 6/30/95 5/1/95 to 6/30/95
(Unaudited) (Unaudited)
------------------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period $ 1.000000 $ 1.000000
Income from investment operations
Net investment (loss) (0.003184) (0.001135)
Net realized and unrealized gain 0.098461 0.080802
----------------------------- ---------------------
Total from investment operations 0.095277 0.079667
----------------------------- ---------------------
Change in net asset value 0.095277 0.079667
----------------------------- ---------------------
Net asset value, end of period $ 1.095277 $ 1.079667
============================= =====================
Total return 9.53% 7.97%
Ratios/supplemental data:
Net assets, end of period (000) $ 1,442 $ 2,999
Ratio to average net assets of:
Total expenses 1.25%(1) 1.25%(1)
Net investment income (loss) (1.25)%(1) (1.25)%(1)
Portfolio turnover 254%(1) 55%(1)
</TABLE>
(1) Annualized
See Notes to Financial Statements
15
<PAGE>
PHOENIX HOME LIFE VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1--Organization
Phoenix Home Life Variable Accumulation Account (the Account) is a separate
investment account of Phoenix Home Life Mutual Insurance Company (Phoenix Home
Life). The Account is organized as a unit investment trust and currently
consists of nine sub-accounts, which invest solely in a designated portfolio of
The Phoenix Edge Series Fund (the Fund) and/or Wanger Advisors Trust. The
Account is offered as The Big Edge and The Big Edge Plus to individuals (VA1,
VA2 and VA3) and is also offered as Group Strategic Edge ("GSE") to groups to
fund certain tax-qualified pension plans or profit sharing plans. The Money
Market, Growth, Bond, Total Return, International, Balanced, Real Estate, Wanger
International Small Cap and Wanger U.S. Small Cap Sub-accounts are subdivided
into two pools designated "VA1" and "VA2, VA3 & GSE". VA2 and VA3 contracts
include a higher expense risk charge than the VA1 contract and have been
approved for new sales in certain states. VA3 and GSE contract holders may also
direct the allocation of their investments between the Account and the
Guaranteed Interest Account of the general account of Phoenix Home Life through
participant transfers. The Fund's Money Market, Growth, Bond, Total Return,
International and Balanced Series are successors to the investing activities of
the Phoenix Home Life Variable Accumulation Money Market, Growth, Bond, Total
Return, International and Balanced Sub-accounts.
Each Series has distinct investment objectives. The Money Market Series is
a pooled short-term investment fund, the Growth Series is a growth common
stock fund, the Bond Series is a long-term debt fund, the Total Return Series
invests in equity securities and long and short-term debt, the International
Series invests primarily in an internationally diversified portfolio of
equity securities and the Balanced Series is a balanced fund which invests in
growth stocks and at least 25% of its assets in fixed income senior
securities. The Real Estate Series invests in marketable securities of
publicly traded real estate investment trusts ("REITs") and companies that
are principally engaged in the real estate industry. Wanger International
Small Cap and Wanger U.S. Small Cap invest primarily in stocks of small and
medium-size companies.
Note 2--Significant Accounting Policies
A. Valuation of Investments: Investments are made exclusively in the Fund and
are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Fund as well as gains and losses
on sales of shares in the fund determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix Home Life
and under current federal income tax law, income in the Account is not taxed
since reserves are established equivalent to such income. Therefore, no
provision for related federal or state income taxes is required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares oF The Phoenix Edge Series Fund
Purchases and sales of shares of the Fund for the six months ended June 30,
1995 aggregated the following:
<TABLE>
<CAPTION>
VA1 VA2, VA3 & GSE
----------------------- --------------------------
Sub-Account Purchases Sales Purchases Sales
---------------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Money Market $2,092,363 $3,074,479 $38,920,982 $36,997,145
Growth 3,493,382 2,774,899 84,505,934 27,166,675
Bond 989,752 1,306,412 19,860,893 9,055,255
Total Return 1,546,437 3,788,707 23,433,251 16,957,766
International 559,526 2,483,341 9,655,378 18,259,303
Balanced 234,067 1,074,605 8,424,138 12,014,662
Real Estate Securities 25,922 148 5,999,813 270,481
Wanger International 19,582 -- 1,876,160 476,871
Wanger U.S. Small Cap. 181,880 101 3,022,203 196,615
</TABLE>
16
<PAGE>
Note 4--Participant Accumulation Unit Transactions (In units)
<TABLE>
<CAPTION>
Sub-Account
------------------------------------------------------------------------
Money Total
Market Growth Bond Return International Balanced
--------- --------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
VA1
Units outstanding,
beginning of period 4,648,802 8,350,770 4,839,008 19,980,901 5,925,289 4,731,485
Participant deposits (35,916) 95,028 25,802 219,836 73,480 17,517
Participant transfers 396 399,332 (69,022) (312,056) (1,442,669) (493,698)
Participant withdrawals (575,267) (396,086) (232,772) (847,981) (135,612) (287,503)
-------- -------- ------- -------- ---------- ---------
Units outstanding, end of
period 4,038,015 8,449,044 4,563,016 19,040,700 4,420,488 3,967,801
======== ======== ======= ======== ========== =========
VA2, VA3 & GSE
Big Edge Plus:
Units outstanding,
beginning of period 37,183,988 75,175,305 20,182,918 67,922,249 87,360,368 128,415,186
Participant deposits 11,850,858 7,849,707 1,476,645 3,865,932 5,752,754 4,980,625
Participant transfers (8,919,329) 2,227,125 2,021,574 (863,971) (10,769,382) (6,640,970)
Participant withdrawals (2,705,212) (1,764,628) (667,820) (1,956,870) (1,711,170) (3,206,693)
-------- -------- ------- -------- ---------- ---------
Units outstanding, end of
period 37,410,305 83,487,509 23,013,317 68,967,340 80,632,570 123,548,148
======== ======== ======= ======== ========== =========
Group Strategic Edge:
Units outstanding,
beginning of period 822,771 1,050,874 425,656 938,228 1,039,619 2,381,785
Participant deposits 1,682,111 318,477 70,480 184,588 388,699 676,453
Participant transfers (1,695,688) 107,118 90,484 175,344 75,895 (82,384)
Participant withdrawals (136,825) (58,598) (37,110) (40,629) (106,023) (169,099)
-------- -------- ------- -------- ---------- ---------
Units outstanding, end of
period 672,369 1,417,871 549,510 1,257,531 1,398,190 2,806,755
======== ======== ======= ======== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Real Estate Wanger Wanger U.S. Small
VA1 Securities International Cap.
-------------------- ------------------ ---------------------
<S> <C> <C> <C>
Units outstanding, beginning of period -- -- --
Participant deposits -- -- --
Participant transfers 25,332 19,488 176,155
Participant withdrawals (134) -- (95)
------------------- ----------------- --------------------
Units outstanding, end of period 25,198 19,488 176,060
=================== ================= ====================
</TABLE>
<TABLE>
<CAPTION>
Real Estate Wanger Wanger U.S. Small
VA2 Securities International Cap.
-------------------- ------------------ ---------------------
<S> <C> <C> <C>
Units outstanding, beginning of period -- -- --
Participant deposits 5,061,047 527,771 772,748
Participant transfers 587,992 787,914 2,013,297
Participant withdrawals (624) 918 (8,026)
------------------- ----------------- --------------------
Units outstanding, end of period 5,648,415 1,316,603 2,778,019
=================== ================= ====================
</TABLE>
Note 5--Investment Advisory Fees and Related Party Transactions
Phoenix Home Life and its indirect subsidiary, Phoenix Equity Planning
Corporation, a registered broker/dealer in securities, provide all services to
the Account.
Phoenix Home Life assumes the risk that annuitants as a class may live
longer than expected and that its expenses may be higher than its deductions
for such expenses. In return for the assumption of these mortality and
expense risks, Phoenix Home Life charges the sub-accounts designated VA1 the
daily equivalent of 0.40% on an annual basis of the current value of net
assets for mortality risks and the daily equivalent of 0.60% on an annual
basis for expense risks assumed. VA2, VA3 & GSE sub-accounts are charged the
daily equivalent of 0.40% and 0.85% on an annual basis for mortality and
expense risks, respectively.
As compensation for administrative services provided to the Account,
Phoenix Home Life additionally receives $35 per year from each contract,
which is deducted from the sub-account holding the assets of the participant,
or on a pro rata basis from two or more sub-accounts in relation to their
values under the contract. Fees for administrative services provided for the
six months ended June 30, 1995 aggregated $817,963 and are funded by and
included in participant withdrawals.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. Phoenix Home Life reimburses Phoenix Equity
Planning for expenses incurred as underwriter. On surrender of a contract,
contingent deferred sales charges, which vary from 0-6% depending upon the
duration of each contract deposit, are deducted from the proceeds and are
paid to Phoenix Home Life as reimbursement for services provided. Contingent
deferred sales charges deducted and paid to Phoenix Home Life aggregated
$703,703 for the six months ended June 30, 1995.
Note 6--Distribution of Net Income
The Account does not expect to declare dividends to participants from
accumulated net income. The accumulated net income is distributed to
participants as part of withdrawals of amounts in the form of surrenders, death
benefits, transfers or annuity payments in excess of net purchase payments.
17
<PAGE>
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable annuity contract, other than a contract issued in connection
with certain types of employee benefit plans, will not be treated as an annuity
contract for federal tax purposes for any period for which the investments of
the segregated asset account on which the contract is based are not adequately
diversified. The Code provides that the "adequately diversified" requirement may
be met if the underlying investments satisfy either a statutory safe harbor test
or diversification requirements set forth in regulations issued by the Secretary
of the Treasury.
The Internal Revenue Service has issued regulations under Section 817(h)
of the Code. Phoenix Home Life believes that the Account satisfies the
current requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
18
<PAGE>
PHOENIX HOME LIFE
VARIABLE ACCUMULATION ACCOUNT
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Underwriter
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
International Series Custodian
The Chase Manhattan Bank, N.A.
1211 Avenue of the Americas
New York, New York 10036
Attention: Global Custody Division
Real Estate Securities Custodian
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
19
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
SEMI-ANNUAL REPORT
JUNE 30, 1995
THE PHOENIX EDGE SERIES FUND
<PAGE>
MONEY MARKET SERIES
The Money Market Series continued to perform solidly during this six-month
reporting period. On June 30, the Fund's current yield was 5.50%. This
compares favorably with the 5.43% average yield of taxable money market funds
reported by Donoghue's Money Fund Report.
Throughout this reporting period, the debate about the strength of the
economy and the Federal Reserve Board's most likely course of action
continued. Many observers, concerned that the economy was slowing too much
after a year of restrictive monetary policy, called for the Fed to lower
interest rates. But despite these concerns, the Fed made no accommodative
move during the quarter. Short-term interest rates did drop slightly over the
second half of this reporting period, in anticipation that the Fed would soon
ease.
We have maintained our focus on floating-rate securities for the Fund, an
appropriate strategy in view of the uncertainty concerning monetary policy
for much of 1995. Although the Fed made one accommodative move shortly after
the close of this reporting period--reducing the Federal Funds rate from
6.00% to 5.75%--we believe floating-rate securities will continue to offer
the potential for attractive returns in the short-term marketplace.
We have also maintained our emphasis on quality assets. While U.S.
government-backed securities have been strong contributors to first-half
results, valuations are currently not as compelling. We will continue,
however, to look for opportunities to increase exposure to government-backed
issues, primarily through floating-rate securities.
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
------ ----------------------------------------------- ------- -------- -----------
<S> <C> <C> <C> <C>
FEDERAL AGENCY SECURITIES--13.2%
$ 775 Federal National Mortgage Assoc. 5.89% 08/15/95 $ 769,294
3,000 Federal Home Loan Banks 6.54 10/25/95 3,000,000
1,650 Federal Farm Credit Bank 6.33 11/01/95 1,649,566
1,000 Federal Home Loan Banks 5.52 12/15/95 974,393
2,000 Federal National Mortgage Assoc. 5.50 01/08/96 1,941,639
830 Federal Home Loan Banks 6.52 01/19/96 799,635
3,500 Federal Home Loan Banks 7.15 01/26/96 3,500,323
----------
TOTAL FEDERAL AGENCY SECURITIES 12,634,850
----------
RESET
DATE
-------
FEDERAL AGENCY SECURITIES--VARIABLE--16.8% (b)
1,500 Federal Farm Credit Bank (final maturity
02/24/97) 6.26 07/03/95 1,499,430
1,500 Federal Home Loan Banks (final maturity
01/14/97) 6.45 07/03/95 1,500,000
1,500 Federal Home Loan Mortgage Corp. (final
maturity 06/15/96) 6.35 07/03/95 1,502,951
3,000 Student Loan Marketing Assoc. (final maturity
08/16/96) 6.36 07/03/95 3,000,000
1,500 Student Loan Marketing Assoc. (final maturity
08/10/95) 5.54 07/04/95 1,500,000
500 Student Loan Marketing Assoc. (final maturity
07/19/96) 5.66 07/04/95 500,000
2,500 Student Loan Marketing Assoc. (final maturity
11/24/97) 5.68 07/04/95 2,500,000
1,500 Student Loan Marketing Assoc. (final maturity
11/10/98) 5.70 07/04/95 1,497,341
1,000 Student Loan Marketing Assoc. (final maturity
02/22/99) 5.71 07/04/95 1,000,000
1,650 Federal National Mortgage Assoc. (final
maturity 12/14/98) 5.96 09/14/95 1,646,876
----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 16,146,598
----------
STANDARD
& POOR'S
RATING
-------
COMMERCIAL PAPER--68.9%
2,000 CXC, Inc. (c) A-1 6.25 07/03/95 1,999,306
2,440 First Deposit Funding Trust (c) A-1+ 6.02 07/05/95 2,438,368
570 BellSouth Telecommunications, Inc. A-1+ 6.10 07/06/95 569,517
4,000 Asset Securitization Cooperative Corp. A-1+ 5.97 07/07/95 3,996,020
2,500 H.J. Heinz Co. (c) A-1 5.95 07/07/95 2,497,521
1,500 Kimberly-Clark Corp. A-1+ 6.02 07/10/95 1,497,743
2,000 Merrill Lynch & Co. A-1+ 6.00 07/10/95 1,997,000
4,000 McKenna Triangle Corp. (c) A-1+ 5.95 07/11/95 3,993,389
1,275 BellSouth Telecommunications, Inc. A-1+ 5.98 07/12/95 1,272,670
3,500 Preferred Receivables Funding Corp. A-1 5.95 07/12/95 3,493,637
1,900 Goldman, Sachs & Co. A-1+ 5.95 07/17/95 1,894,976
3,500 Exxon Imperial U.S., Inc. (c) A-1+ 5.95 07/18/95 3,490,166
3,500 ABS Commercial Paper, Inc. A-1 5.98 07/19/95 3,489,535
1,000 ABS Commercial Paper, Inc. A-1 6.00 07/20/95 996,833
1,460 TDK USA Corp. A-1+ 5.97 07/20/95 1,455,400
</TABLE>
See Notes to Financial Statements
2-2
<PAGE>
MONEY MARKET SERIES
<TABLE>
<CAPTION>
FACE STANDARD
AMOUNT & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
------- ------------------------------------- -------- ------- -------- --------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--continued
$1,500 TDK USA Corp. A-1+ 6.05% 07/20/95 $ 1,495,210
3,000 Corporate Asset Securitization Ltd. A-1+ 5.98 07/21/95 2,990,033
1,600 Corporate Receivables Corp. A-1 6.70 07/24/95 1,593,151
930 First Deposit Funding Trust (c) A-1+ 6.25 07/24/95 926,286
1,000 Preferred Receivables Funding Corp. A-1 5.98 07/25/95 996,020
520 Receivables Capital Corp. (c) A-1 5.98 07/25/95 517,927
1,755 Beta Finance, Inc. (c) A-1+ 5.98 07/26/95 1,747,712
3,035 Receivables Capital Corp. (c) A-1 6.00 07/26/95 3,022,354
2,500 Albertson's, Inc. A-1 5.95 07/27/95 2,489,257
1,200 Coca Cola Co. (c) A-1+ 5.78 08/04/95 1,193,449
2,500 CXC, Inc. (c) A-1 6.36 08/07/95 2,483,658
1,880 Corporate Receivables Corp. (c) A-1 5.97 08/10/95 1,867,529
855 E.I. du Pont de Nemours & Co. (c) A-1+ 5.92 08/11/95 849,235
1,500 Corporate Asset Securitization Ltd. (c) A-1+ 6.00 08/15/95 1,488,750
3,750 Cargill, Inc. A-1+ 5.92 08/23/95 3,717,317
1,135 Campbell Soup Co. A-1+ 6.52 10/27/95 1,110,744
2,550 Ameritech Capital Funding Corp. (c) A-1+ 5.66 11/28/95 2,489,863
------------
TOTAL COMMERCIAL PAPER 66,060,576
-------------
TOTAL INVESTMENTS--98.9%
(Identified cost $94,842,024) 94,842,024(a)
Cash and receivables, less liabilities--1.1% 1,042,489
-------------
NET ASSETS--100.0% $95,884,513
=============
</TABLE>
(a) Federal Income Tax Information: At June 30, 1995 the aggregate cost of
securities was the same for book and tax purposes.
(b) Variable rate demand note. The interest rates shown reflect the rate
currently in effect.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At June 30, 1995,
these securities amounted to a value of $31,005,513 or 32.3% of net assets.
See Notes to Financial Statements
2-3
<PAGE>
MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $94,842,024) $94,842,024
Cash 824,248
Investment income receivable 293,237
-----------
Total assets 95,959,509
-----------
Liabilities
Investment advisory fee 49,708
Trustees' fee 4,333
Administration fee 4,341
Accrued expenses 16,614
-----------
Total liabilities 74,996
-----------
Net Assets $95,884,513
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $95,884,509
Undistributed net investment income 4
-----------
Net Assets $95,884,513
===========
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 9,588,450
===========
Net asset value and offering price per share $10.00
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest $2,772,597
-----------
Total investment income 2,772,597
-----------
Expenses
Investment advisory fee 177,917
Administration fee 26,687
Audit 12,412
Printing 11,956
Custodian 8,118
Trustees' 4,388
Miscellaneous 3,157
-----------
Total expenses 244,635
-----------
Net investment income 2,527,962
-----------
Net increase in net assets resulting from operations $2,527,962
===========
</TABLE>
See Notes to Financial Statements
2-4
<PAGE>
MONEY MARKET SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------ --------------
<S> <C> <C>
From Operations
Net investment income $ 2,527,962 $ 3,392,083
Net realized gains -- 100
----------- -------------
Net increase in net assets resulting from operations 2,527,962 3,392,183
----------- -------------
From Distributions to Shareholders
Net investment income (2,541,840) (3,378,211)
Net realized gains -- (94)
----------- -------------
Decrease in net assets from distributions to shareholders (2,541,840) (3,378,305)
----------- -------------
From Share Transactions
Proceeds from sales of shares (8,796,026 and 23,586,003 shares, respectively) 87,960,260 235,860,031
Net asset value of shares issued from reinvestment of distributions (254,185
and 337,830, respectively) 2,541,840 3,378,305
Cost of shares repurchased (8,918,956 and 21,761,240 shares, respectively) (89,189,560) (217,612,379)
----------- -------------
Increase in net assets from share transactions 1,312,540 21,625,957
----------- -------------
Net increase in net assets 1,298,662 21,639,835
Net Assets
Beginning of period 94,585,851 72,946,016
----------- -------------
End of period (including undistributed net investment income of $4 and $13,882,
respectively) $ 95,884,513 $ 94,585,851
=========== =============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 1995 Year ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
------------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from investment operations
Net investment income 0.28 0.38(1) 0.28(1) 0.35 0.58 0.79
-------- ------ ------ ------ ------ ------
Total from investment operations 0.28 0.38 0.28 0.35 0.58 0.79
-------- ------ ------ ------ ------ ------
Less distributions
Dividends from net investment income (0.28) (0.38) (0.28) (0.35) (0.58) (0.79)
-------- ------ ------ ------ ------ ------
Total distributions (0.28) (0.38) (0.28) (0.35) (0.58) (0.79)
-------- ------ ------ ------ ------ ------
Net asset value, end of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
======= ====== ====== ====== ====== ======
Total return 2.83%(3) 3.77% 2.80% 3.50% 5.80% 7.90%
Ratios/supplemental data:
Net assets, end of period (thousands) $95,885 $94,586 $72,946 $69,962 $51,692 $38,709
Ratio to average net assets of:
Operating expenses 0.55%(2 ) 0.55% 0.55% 0.50% 0.50% 0.50%
Net investment income 5.64%(2) 3.85% 2.84% 3.49% 5.76% 7.87%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.003
and $0.01 per share, respectively.
(2) Annualized
(3) Not annualized
See Notes to Financial Statements
2-5
<PAGE>
GROWTH SERIES
During this six-month reporting period, the stock market has advanced
strongly, with the technology and financial services sectors leading the way.
Propelled by falling interest rates and increasing investor confidence that
the Federal Reserve Board may have successfully guided the economy to a "soft
landing," we saw a combination of interest-sensitive sectors and technology
and capital goods stocks outperform most other groups.
Phoenix Edge Growth Series made very strong absolute gains over this
reporting period. For the six months ended June 30, 1995, the Fund provided a
total return of 15.80%. According to the Standard & Poor's 500 Composite
Stock Index, a commonly used, unmanaged measure of stock performance, the
market returned 20.19% in the same period. (All of these figures assume
reinvestment of any distributions.)
Several factors early in this reporting period held performance back.
First, holdings in smaller and mid-sized companies did not perform as well as
larger issues earlier in the year. For the balance of the year, however, we
believe smaller issues will show better relative performance. Higher cash
reserves at the start of the year also hurt performance slightly; however, we
brought cash levels down significantly during the period. Finally,
underweighting in the financial services sector coming into 1995 was a
negative factor, but our moves to increase holdings benefited the portfolio
over the remainder of this period.
On the positive side, several factors worked well for the portfolio during
this reporting period. Increased exposure to health care and pharmaceutical
stocks helped performance. Also, while consumer-oriented holdings have
produced good results, we have begun to reduce these holdings and increase
weightings in the capital goods sector, which we believe has good earnings
potential in the months ahead. Technology stocks have maintained their
leadership in a dramatic fashion over the past six months and have been
strong contributors to the portfolio. Currently, the portfolio is
overweighted in the technology sector, which we expect will continue to
provide market leadership despite the potential for increased volatility
moving forward.
For the balance of 1995, we believe further stock market gains will be
difficult to attain. Since earnings growth is expected to moderate in the
months ahead, market expectations may need to be adjusted. Nevertheless, we
believe many strong growth and good quality companies will provide attractive
investment opportunities during the second half of the year.
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------- -------------
<S> <C> <C>
COMMON STOCKS--84.1%
Aerospace & Defense--2.3%
Boeing Company 290,000 $18,161,250
------------
Airlines--1.0%
AMR Corp. (b) 100,000 7,462,500
------------
Bank--2.1%
Citicorp 285,000 16,494,375
------------
Chemical--Specialty--1.3%
Morton International, Inc. 350,000 10,237,500
------------
Computer Software & Services--2.9%
HBO & Co. 180,000 9,810,000
Microsoft Corp. (b) 90,000 8,133,750
Oak Technology, Inc. (b) 144,200 5,299,350
------------
23,243,100
------------
Conglomerates--2.0%
ITT Corp. 135,000 15,862,500
------------
Electrical Equipment--1.9%
Honeywell, Inc. 350,000 15,093,750
------------
Electronics--6.0%
Applied Materials, Inc. (b) 100,000 8,662,500
Cypress Semiconductors Co. (b) 250,000 10,125,000
Intel Corp. 245,000 15,511,563
National Semiconductor Corp. (b) 475,000 13,181,250
------------
47,480,313
------------
Entertainment, Leisure & Gaming--3.4%
Viacom, Inc. Class B (b) 275,000 12,753,125
Walt Disney Co. 260,000 14,462,500
------------
27,215,625
------------
Financial Services--8.4%
Dean Witter Discover & Co. 310,000 $14,570,000
Federal National Mortgage Assoc. 176,000 16,610,000
H & R Block, Inc. 104,000 4,277,000
Morgan Stanley Group, Inc. 100,000 8,100,000
Student Loan Marketing Association 320,000 15,000,000
Travelers Group, Inc. 175,000 7,656,250
------------
66,213,250
------------
Food--1.3%
Ralston Purina Co. 200,000 10,200,000
------------
Health Care--Diversified--1.0%
American Home Products Corp. 96,800 7,489,900
------------
Health Care--Drugs--6.0%
Amgen, Inc. (b) 215,000 17,294,062
Lilly (Eli) & Co. 190,000 14,915,000
Merck & Co., Inc. 307,500 15,067,500
------------
47,276,562
------------
Hospital Management & Services--3.3%
Columbia/HCA Healthcare Corp. 450,000 19,462,500
PhyCor, Inc. (b) 192,500 6,761,562
------------
26,224,062
------------
Insurance--6.0%
Aetna Life & Casualty Co. 295,000 18,548,125
American International Group, Inc. 125,000 14,250,000
General Re Corp. 110,100 14,739,637
------------
47,537,762
------------
Medical Products & Supplies--6.7%
Baxter International, Inc. 415,000 15,095,625
Boston Scientific Corp. (b) 245,000 7,809,375
See Notes to Financial Statements
2-6
<PAGE>
GROWTH SERIES
Medical Products & Supplies--continued
Johnson & Johnson 115,000 $ 7,776,875
Medtronic, Inc. 100,000 7,712,500
St. Jude Medical, Inc. 283,500 14,210,438
------------
52,604,813
------------
Miscellaneous--1.1%
Eastman Kodak Co. 145,000 8,790,625
------------
Natural Gas--1.4%
Apache Corp. 407,700 11,160,788
------------
Office & Business Equipment--1.7%
Compaq Computer Corp. (b) 300,000 13,612,500
------------
Oil Service & Equipment--3.6%
BJ Services Co. (b) 500,000 11,375,000
Schlumberger Ltd. 275,000 17,084,375
------------
28,459,375
------------
Paper, Packaging & Forest Products--1.1%
Bowater, Inc. 200,000 8,975,000
------------
Pollution Control--3.6%
Browning-Ferris Industries, Inc. 340,000 12,282,500
WMX Technologies, Inc. 570,000 16,173,750
------------
28,456,250
------------
Professional Services--1.7%
First Data Systems Corp. 240,000 13,650,000
------------
Retail--4.3%
Federated Department Stores, Inc. (b) 315,000 8,111,250
Office Depot, Inc. (b) 300,000 8,437,500
Staples, Inc. (b) 250,000 7,218,750
Wal-Mart Stores, Inc. 367,100 9,819,925
------------
33,587,425
------------
Retail--Food--1.1%
Safeway, Inc. (b) 225,000 8,409,375
------------
Telecommunications Equipment--7.6%
Bay Networks, Inc. (b) 180,000 7,447,500
Cisco Systems, Inc. (b) 289,000 14,612,563
General Instrument Corp. (b) 250,000 9,593,750
Northern Telecom Ltd. 132,000 4,818,000
StrataCom, Inc. (b) 275,000 13,406,250
U.S. Robotics Corp. 91,000 9,919,000
------------
59,797,063
------------
Tobacco--1.3%
Philip Morris Companies, Inc. 135,000 10,040,625
------------
TOTAL COMMON STOCKS
(Identified cost $587,618,359) 663,736,288
------------
FOREIGN COMMON STOCKS--5.3%
Computer Software & Services--1.7%
Cap Gemini Sogeti (France) 215,000 6,652,100
Standard Application Software AG-Vorzug
(Germany) 5,245 6,603,140
------------
13,255,240
------------
Oil--2.1%
Royal Dutch Petroleum Co. ADR
(Netherlands) 139,000 16,940,625
------------
Telecommunications Equipment--1.1%
Ericsson L.M. Telephone Co. Class B ADR
(Sweden) 420,000 8,400,000
------------
Utility--Telephone--0.4%
DDI Corp. (Japan) 415 3,323,913
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $36,125,153) 41,919,778
------------
TOTAL LONG-TERM INVESTMENTS--89.4%
(Identified cost $623,743,512) 705,656,066
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
------- ------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--8.6%
Commercial Paper--7.7%
Philip Morris Cos., Inc. 6.10%,
7-3-95 A-1 $ 830 829,719
Goldman, Sachs & Co. 5.95%, 7-6-95 A-1+ 4,215 4,211,517
BellSouth Telecommunications, Inc.
5.93%, 7-10-95 A-1+ 5,810 5,801,387
Exxon Imperial U.S., Inc. 5.95%,
7-11-95 A-1+ 8,360 8,346,183
Goldman, Sachs & Co. 5.95%,
7-12-95 A-1+ 5,000 4,990,910
Pfizer, Inc. 5.93%, 7-12-95 A-1+ 6,300 6,288,585
Pfizer, Inc. 5.93%, 7-13-95 A-1+ 2,270 2,265,513
H.J. Heinz Co. 5.85%, 7-21-95 A-1 12,735 12,693,611
Campbell Soup Co. 5.93%, 7-27-95 A-1+ 5,265 5,242,451
Shell Oil Co. 5.82%, 7-31-95 A-1+ 10,000 9,951,500
------------
60,621,376
------------
Federal Agency Securities--0.9%
Federal National Mortgage Assoc. 5.90%,
8-14-95 3,885 3,856,826
Student Loan Marketing Assoc. 5.66%, 11-9-95 3,500 3,500,000
------------
7,356,826
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $67,978,360) 67,978,202
------------
TOTAL INVESTMENTS--98.0%
(Identified cost $691,721,872) 773,634,268(a)
Cash and receivables, less liabilities--2.0% 15,655,610
------------
NET ASSETS--100.0% $789,289,878
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $86,379,231 and gross
depreciation of $4,438,332 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was
$691,693,369.
(b) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
2-7
<PAGE>
GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $691,721,872) $773,634,268
Receivable for investment securities sold 18,968,397
Investment income receivable 1,154,527
Tax reclaim receivable 116,382
Other receivable 123,025
------------
Total assets 793,996,599
------------
Liabilities
Custodian 493,723
Payable for investment securities purchased 3,681,217
Investment advisory fee 414,214
Administration fee 38,339
Trustees' fee 3,155
Accrued expenses 76,073
------------
Total liabilities 4,706,721
------------
Net Assets $789,289,878
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $670,759,646
Undistributed net investment income 153,682
Accumulated net realized gains 36,464,154
Net unrealized appreciation 81,912,396
------------
Net Assets $789,289,878
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 43,747,603
============
Net asset value and offering price per share $18.04
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 4,447,935
Interest 3,591,835
-----------
Total investment income 8,039,770
-----------
Expenses
Investment advisory fee 2,252,885
Administration fee 206,693
Trustees' 5,210
Custodian 91,129
Audit 19,698
Printing 23,407
Miscellaneous 17,066
-----------
Total expenses 2,616,088
-----------
Net investment income 5,423,682
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 37,897,309
Net realized loss on foreign currency transactions (1,447,772)
Net unrealized appreciation on investments 62,051,392
-----------
Net gain on investments 98,500,929
-----------
Net increase in net assets resulting from operations $103,924,611
===========
</TABLE>
See Notes to Financial Statements
2-8
<PAGE>
GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------ --------------
<S> <C> <C>
From Operations
Net investment income $ 5,423,682 $ 7,438,217
Net realized gains 36,449,537 21,194,240
Net unrealized appreciation (depreciation) 62,051,392 (22,581,225)
----------- -------------
Net increase in net assets resulting from operations 103,924,611 6,051,232
----------- -------------
From Distributions to Shareholders
Net investment income (5,340,685) (7,512,592)
Net realized gains -- (33,881,394)
----------- -------------
Decrease in net assets from distributions to shareholders (5,340,685) (41,393,986)
----------- -------------
From Share Transactions
Proceeds from sales of shares (8,486,747 and 17,499,498 shares,
respectively) 141,214,279 293,876,374
Net asset value of shares issued from reinvestment of distributions
(305,393 and 2,620,718, respectively) 5,340,745 41,393,986
Cost of shares repurchased (4,326,555 and 7,747,001 shares, respectively) (72,070,144) (130,074,382)
----------- -------------
Increase in net assets from share transactions 74,484,880 205,195,978
----------- -------------
Net increase in net assets 173,068,806 169,853,224
Net Assets
Beginning of period 616,221,072 446,367,848
----------- -------------
End of period (including undistributed net investment income of $153,682
and $70,685, respectively) $789,289,878 $ 616,221,072
=========== =============
</TABLE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
Six
Months
Ended
June 30, 1995 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.69 $16.59 $15.01 $14.43 $11.72 $11.62
Income from investment operations
Net investment income 0.13 0.23(1) 0.16 0.22 0.39 0.35
Net realized and unrealized gain 2.35 0.02 2.77 1.25 4.64 0.10
------------ ------- ------- ------- ------- -------
Total from investment operations 2.48 0.25 2.93 1.47 5.03 0.45
------------ ------- ------- ------- ------- -------
Less distributions
Dividends from net investment income (0.13) (0.23) (0.15) (0.23) (0.37) (0.35)
Dividends from net realized gains -- (0.92) (1.20) (0.66) (1.95) --
------------ ------- ------- ------- ------- -------
Total distributions (0.13) (1.15) (1.35) (0.89) (2.32) (0.35)
------------ ------- ------- ------- ------- -------
Change in net asset value 2.35 (0.90) 1.58 0.58 2.71 0.10
------------ ------- ------- ------- ------- -------
Net asset value, end of period $18.04 $15.69 $16.59 $15.01 $14.43 $11.72
============ ======= ======= ======= ======= =======
Total return 15.80%(3) 1.48% 19.69% 10.29% 43.83% 3.98%
Ratios/supplemental data:
Net assets, end of period (thousands) $789,290 $616,221 $446,368 $245,565 $102,259 $40,061
Ratio to average net assets of:
Operating expenses 0.77%(2) 0.80% 0.79% 0.50% 0.50% 0.50%
Net investment income 1.55%(2) 1.38% 0.97% 1.66% 2.14% 3.19%
Portfolio turnover rate 181%(2) 185% 185% 214% 237% 272%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.003
per share.
(2) Annualized
(3) Not annualized
The components of income from investment operations are calculated based on
the average number of shares outstanding.
See Notes to Financial Statements
2-9
<PAGE>
BOND SERIES
Over this six-month reporting period, the domestic fixed-income markets
made a remarkable recovery from their dismal 1994 performance. Aided by the
slowing economy and controlled inflation, all sectors produced solidly
positive results. High-yield bonds and mortgage-backed securities were among
the top-performing markets. In addition, the emerging debt markets, which
struggled over the early months of 1995, made a strong comeback in the second
half of the period and outperformed all fixed-income markets for the final
three months of the period.
The Phoenix Edge Bond Series had an excellent first half, posting gains
well ahead of the market. For the six months ended June 30, 1995, the fund
returned 13.01%. According to the Lehman Brothers Aggregate Bond Index, an
unmanaged commonly used measure of bond performance, the market returned
11.44% in the same period. (All of these figures assume reinvestment of any
distributions.)
During this reporting period, we stressed U.S. government securities,
non-agency mortgage-backed securities and emerging market debt--all of which
were strong contributors to first-half results. The emerging markets, in
particular, enhanced performance over the second half of the period. Despite
the intense sell off experienced in the first calendar quarter--triggered by
the Mexican peso crisis last December--emerging debt markets rebounded
dramatically in the second calendar quarter.
As of June 30, approximately 21% of the portfolio was invested in emerging
market securities. This allocation remains well-diversified among nine
countries, with Argentina and Brazil as the two largest holdings.
Our long-term outlook for the emerging markets sector remains positive,
particularly for countries where local governments remain committed to
market-based reforms, including Argentina, Brazil and Poland. In addition to
the emerging markets, we also expect the portfolio will continue to benefit
from its holdings in the U.S. government securities sector.
SCHEDULE OF INVESTMENTS
JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------ -------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--23.2%
U.S. Treasury Bonds--16.8%
U.S. Treasury Bonds 6.50%, '05 Aaa $10,950 $11,181,702
U.S. Treasury Bonds 6.25%, '23 Aaa 1,000 945,050
U.S. Treasury Bonds 7.625%, '25 Aaa 3,200 3,612,832
------------
15,739,584
------------
U.S. Treasury Notes--2.1%
U.S. Treasury Notes 6.50%, '97 Aaa 1,000 1,011,160
U.S. Treasury Notes 6.125%, '98 Aaa 1,000 1,006,290
------------
2,017,450
------------
Mortgage-Backed Securities--4.3%
FHLMC 7.50%, '18 Aaa 978 985,191
FNMA 7%, '24 Aaa 2,848 2,802,268
GNMA Seasoned 8%, '06 Aaa 279 285,705
------------
4,073,164
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $21,222,786) 21,830,198
------------
NON-CONVERTIBLE BONDS--33.3%
Airlines--1.8%
GPA Delaware, Inc. 8.75%, '98 Caa 2,000 1,720,000
------------
Chemical--Specialty--1.3%
Borden Chemical & Plastics 9.50%, '05 Ba 1,200 1,218,000
------------
Containers--2.4%
Owens-Illinois, Inc., 11%, '03 Ba 2,000 2,210,000
------------
Hospital Management & Services--1.4%
National Medical Enterprises 9.625%, '02 Ba 500 531,250
National Medical Enterprises 10.125%, '05 Ba 750 796,875
------------
1,328,125
------------
Machinery--1.6%
Cincinnati Milacron, Inc. 8.375%, '04 Ba $ 1,500 $ 1,505,625
------------
Non-Agency Mortgage Backed Securities--15.4%
Chase Mortgage Finance Corp. 8.02%, '22 NR 940 957,251
Kearny Street 93-1, A Float 7.025%, '00 AA(b) 115 115,016
KPAC 7.18%, '05 BBB(b) 500 484,688
Nomura Asset Securities Corp. 94-MD2,
A6, Float 7.3275%, '03 A(b) 1,676 1,670,344
Prudential Home Mortgage 144A 6.641%, '23
(c) NR 1,500 1,404,141
Resolution Trust Corp. 7.90%, '23 Aa 1,360 1,368,623
Resolution Trust Corp. 6.55%, '24 Aaa 1,538 1,519,342
Resolution Trust Corp. 8%, '25 BBB(b) 989 980,000
Resolution Trust Corp. 8%,'26 BBB(b) 1,946 1,931,769
Resolution Trust Corp. 7.50%, '28 AA(b) 2,948 2,981,094
Ryland Mortgage Securities Corp. 8.33%,
'30 A(b) 1,048 1,046,508
------------
14,458,776
------------
Paper & Forest Products--0.9%
SD Warren Co. Series B 12%, '04 B 750 810,000
------------
Publishing, Broadcasting, Printing & Cable--4.2%
Paramount Communications 8.25%, '22 B 2,000 1,924,700
SCI Television 11%, '05 B 1,459 1,522,831
Univision Television 11.75%, '01 B 500 531,875
------------
3,979,406
------------
Retail--Food Service--3.2%
ARA Services, Inc. 10.625%, '00 Ba 54 60,075
Curtice-Burns Foods, Inc. 12.25%, '05 B 2,750 2,908,125
------------
2,968,200
------------
Telecommunications Equipment--1.1%
Panamsat L.P. (0%, '98) 11.375%, '03 B 1,500 1,072,500
------------
See Notes to Financial Statements
2-10
<PAGE>
BOND SERIES
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $30,214,889) $31,270,632
------------
FOREIGN NON-CONVERTIBLE BONDS--11.9%
Argentina--1.6%
Bridas Corp. Yankee 12.50%, '99 B $1,600 1,456,000
------------
Brazil--1.0%
Aracruz Celulose 10.375%, '02 NR 1,000 932,500
------------
Canada--1.5%
Videotron Groupe Ltd. 10.25%, '02 Ba 1,400 1,445,500
------------
Chile--2.0%
CSAV 144A 7.375%, '03 (c) BBB(b) 2,000 1,860,000
------------
Columbia--2.8%
Centragas Yankee 144A 10.65%, '10 (c) BBB(b) 2,500 2,584,375
------------
Indonesia--1.6%
P.T. Polysindo 13%, '01 B 1,500 1,522,500
------------
Philippines--1.4%
Subic Power Corp. 144A 9.50%, '08 (c) NR 1,398 1,296,389
------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $10,857,860) 11,097,264
------------
FOREIGN GOVERNMENT SECURITIES--12.1%
Argentina--3.6%
Republic of Argentina Bear FRB Float
7.3125%, '05 BB(b) 3,500 2,165,625
Republic of Argentina Par L-GP (5%,'96)
6%, '23 B 2,500 1,193,875
------------
3,359,500
------------
Brazil--3.4%
Republic of Brazil EI-L Euro Floater
6.6875%, '06 NR 2,000 1,197,500
Republic of Brazil Par YL4 (4.25%,'96)
6%, '24 NR 1,000 446,250
Republic of Brazil 20 yr. Series C Euro
8%, '14 NR 3,121 1,533,290
------------
3,177,040
------------
Costa Rica--1.2%
Central Bank of Costa Rica 6.25%, '10 NR 2,200 1,144,000
------------
Ecuador--1.0%
Republic of Ecuador PDI 20 yr Euro 7.25%,
'15 NR 3,000 982,500
------------
Mexico--1.3%
United Mexican States Series B Euro 6.25%
'19 Ba 2,000 1,220,000
------------
Poland--1.6%
Poland Global Bearer PDI (3.25%,'95) 7%,
'14 NR 2,500 1,500,000
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $10,137,218) 11,383,040
------------
MUNICIPAL TAX-EXEMPT BONDS--9.0%
Florida--1.6%
Palm Beach Waste Revenue Project B
10.50%, '11 NR 1,500 1,511,055
------------
Michigan--0.2%
Brighton School District 0%, '18 Aaa 600 149,190
------------
Pennsylvania--4.8%
Pennsylvania Economic Development
10.375%, '12 NR 2,500 2,526,225
Pennsylvania Financial Development 6.75%,
'07 NR 1,950 1,957,469
------------
4,483,694
------------
Virginia--1.7%
Pittsylvania County Series B 7.65%, '10 NR 1,500 1,595,385
------------
Wisconsin--0.7%
Wisconsin G.O. Series 5 4.85%, '06 Aa 750 693,097
------------
TOTAL MUNICIPAL TAX-EXEMPT BONDS
(Identified cost $8,194,875) 8,432,421
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--1.8%
Metals & Mining--1.8%
Freeport-McMoRan Copper Cv. Pfd.
(5%,'96) 7%, '02 78,000 1,686,750
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $1,828,122) 1,686,750
-----------
PREFERRED STOCKS--4.1%
Paper, Packaging & Forest Products--0.8%
SD Warren Co. Pfd. Unit 144A PIK Series
B (c) 30,000 786,580
-----------
Telecommunications
Equipment--3.3%
Panamsat Corp. Pfd. 12.75%, '05 3,050 3,082,025
-----------
TOTAL PREFERRED STOCKS
(Identified cost $3,729,500) 3,868,605
-----------
WARRANTS--0.2%
Paper, Packaging & Forest Products--0.2%
SD Warren Warrants 30,000 180,000
-----------
TOTAL WARRANTS
(Identified cost $142,500) 180,000
-----------
TOTAL LONG-TERM INVESTMENTS--95.6%
(Identified cost $86,327,750) 89,748,910
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
VALUE
(000)
------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.1%
Commercial Paper--2.1%
Anheuser-Busch Cos., Inc. 5.93%,
7-6-95 P-1 $ 95 94,922
BellSouth Telecommunications, Inc.
6.10%, 7-6-95 P-1 880 879,254
BellSouth Telecommunications, Inc.
6.10%, 7-10-95 P-1 1,000 998,475
---------
1,972,651
---------
</TABLE>
<TABLE>
<CAPTION>
TOTAL SHORT-TERM OBLIGATIONS
<S> <C>
(Identified cost $1,972,651) 1,972,651
-------------
TOTAL INVESTMENTS--97.7%
(Identified cost $88,300,401) 91,721,561(a)
Cash and receivables, less liabilities--2.3% 2,155,089
-------------
NET ASSETS--100.0% $93,876,650
=============
</TABLE>
(a) Federal Income Tax Information; Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,340,884 and gross
depreciation of $951,519 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was
$88,332,196.
(b) As rated by Standard & Poor's, Duff & Phelps or Fitch.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At June 30, 1995,
these securities amounted to a value of $7,931,485 or 8.4% of net assets.
See Notes to Financial Statements
2-11
<PAGE>
BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $88,300,401) $91,721,561
Cash 40,793
Receivable for investment securities sold 2,607,715
Investment income receivable 1,813,289
Other receivable 15,030
-----------
Total assets 96,198,388
-----------
Liabilities
Payable for investment securities purchased 2,259,620
Investment advisory fee 9,454
Administration fee 4,603
Trustees' fee 4,903
Accrued expenses 43,158
-----------
Total liabilities 2,321,738
-----------
Net Assets $93,876,650
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $93,664,465
Undistributed net investment income 154,661
Accumulated net realized losses (3,363,636)
Net unrealized appreciation 3,421,160
-----------
Net Assets $93,876,650
===========
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 9,644,532
===========
Net asset value and offering price per share $9.73
===========
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest $ 3,781,214
Dividends 238,138
----------
Total investment income 4,019,352
----------
Expenses
Investment advisory fee 205,219
Administration fee 24,626
Custodian 42,403
Audit 19,549
Printing 10,291
Trustees' 7,711
Miscellaneous 9,099
----------
Total expenses 318,898
Less expenses borne by investment adviser (52,038)
----------
Net expenses 266,860
----------
Net investment income 3,752,492
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (200,090)
Net unrealized appreciation on investments 6,703,354
----------
Net gain on investments 6,503,264
----------
Net increase in net assets resulting from operations $10,255,756
==========
</TABLE>
See Notes to Financial Statements
2-12
<PAGE>
BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 3,752,492 $ 5,726,303
Net realized losses (200,090) (4,421,816)
Net unrealized appreciation (depreciation) 6,703,354 (5,570,839)
----------- ------------
Net increase (decrease) in net assets resulting from operations 10,255,756 (4,266,352)
----------- ------------
From Distributions to Shareholders
Net investment income (3,620,904) (5,746,498)
----------- ------------
Decrease in net assets from distributions to shareholders (3,620,904) (5,746,498)
----------- ------------
From Share Transactions
Proceeds from sales of shares (2,781,039 and 4,380,630 shares, respectively) 26,204,014 42,304,393
Net asset value of shares issued from reinvestment of distributions (384,241 and
617,518, respectively) 3,620,904 5,746,498
Cost of shares repurchased (1,836,485 and 4,414,044 shares, respectively) (17,269,148) (42,745,168)
----------- ------------
Increase in net assets from share transactions 12,555,770 5,305,723
----------- ------------
Net increase (decrease) in net assets 19,190,622 (4,707,127)
Net Assets
Beginning of period 74,686,028 79,393,155
----------- ------------
End of period (including undistributed net invesment income of $154,661 and $23,073,
respectively) $ 93,876,650 $ 74,686,028
=========== ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six
Months
Ended
June 30, 1995 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
------------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.98 $10.27 $ 9.58 $9.33 $8.48 $8.85
Income from investment operations
Net investment income 0.41(1) 0.72(1) 0.66(1) 0.66 0.74 0.80
Net realized and unrealized gain (loss) 0.74 (1.28) 0.84 0.25 0.85 (0.37)
------------ ------ ------ ------ ------ -------
Total from investment operations 1.15 (0.56) 1.50 0.91 1.59 0.43
------------ ------ ------ ------ ------ -------
Less distributions
Dividends from net investment income (0.40) (0.73) (0.66) (0.66) (0.74) (0.80)
Dividends from net realized capital gains -- -- (0.15) -- -- --
------------ ------ ------ ------ ------ -------
Total distributions (0.40) (0.73) (0.81) (0.66) (0.74) (0.80)
------------ ------ ------ ------ ------ -------
Change in net asset value 0.75 (1.29) 0.69 0.25 0.85 (0.37)
------------ ------ ------ ------ ------ -------
Net asset value, end of period $9.73 $ 8.98 $10.27 $9.58 $9.33 $8.48
============ ====== ====== ====== ====== =======
Total return 13.01%(3) -5.47% 15.90% 10.03% 19.41% 5.14%
Ratios/supplemental data:
Net assets, end of period (thousands) $93,877 $74,686 $79,393 $43,090 $21,957 $13,558
Ratio to average net assets of:
Operating expenses 0.65%(2) 0.66% 0.65% 0.50% 0.50% 0.50%
Net investment income 9.07%(2) 7.62% 6.71% 7.47% 8.65% 9.26%
Portfolio turnover rate 174%(2) 181% 169% 166% 269% 318%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.006, $0.006 and $0.005 per share, respectively.
(2) Annualized
(3) Not annualized
The components of income from investment operations are calculated based on
the average number of shares outstanding.
See Notes to Financial Statements
2-13
<PAGE>
TOTAL RETURN SERIES
Moderating economic growth and relatively subdued inflation provided a
positive climate for the financial markets over the first six months of 1995.
Aided by the strong rally in the bond markets, equities remained on a fast
track throughout this six-month reporting period. As measured by the Standard
& Poor's 500 Composite Stock Index, a commonly used, unmanaged indicator of
stock performance, the equity market returned 20.19% for the first half of
1995.
Fixed-income markets also showed remarkable strength, with all sectors
providing solidly positive first-half performance. Yields on the 30-year
Treasury bond declined significantly over this reporting period, dropping
from 7.89% at yearend to 6.62% on June 30. As measured by the Lehman Brothers
Aggregate Bond Index, a commonly used, unmanaged gauge of market performance,
bonds returned 11.44% over this six-month period.
Phoenix Edge Total Return Series posted strong absolute gains over this
reporting period. For the six months ended June 30, 1995, The Fund returned
11.05%. In contrast, its peer group's average--the 175 flexible funds tracked
by Lipper Analytical Services--was 12.48%. As the broad market returns noted
above, all of these figures assume reinvestment of any distributions.
The portfolio's relative underperformance was due primarily to its lower
bond allocation versus its peer group. Although we had increased the bond
allocation to 20% moving into 1995, we underestimated the strength of the
bond market rally from its 1994 lows.
In anticipation of an improving stock market, we also increased the
portfolio's equity allocation to 55%. This proved to be an appropriate move,
with strong contributions from a number of areas. Technology, the
top-performing industry over the first half, was well represented in the
portfolio, with names such as Intel, Microsoft and Ericsson. Other equity
holdings that posted favorable results included Medtronic, McDonald's,
Disney, Eastman Kodak and ITT.
As noted in our last report, we expected that 1995 would be a better year
for the financial markets; however, we underestimated the strength of the
stock market rally. Over the second half of 1995, we expect gains in the
stock market to be more labored and speculative in nature. Also, as the
Federal Reserve shifts from a policy of tightening to one of ease, the bond
market is not likely to repeat its first-half performance over the balance of
the year. Although short-term rates are likely to decline, longer-term bonds
will be hard pressed to show much price appreciation. Therefore, we have
begun reducing our bond allocation.
In conclusion, we expect the remainder of 1995 to be more volatile than
the first half and further gains in the market to be more difficult.
See Notes to Financial Statements
2-14
<PAGE>
TOTAL RETURN SERIES
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
STANDARD
& PAR
POOR'S VALUE
RATING (000) VALUE
------- -------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--16.0%
U.S. TREASURY BONDS--2.9%
U.S. Treasury Bonds 7.875%, '04 AAA $ 8,500 $ 9,468,235
------------
U.S. TREASURY NOTES--13.1%
U.S. Treasury Notes 7.25%, '96 AAA 7,000 7,131,040
U.S. Treasury Notes 7.375%, '97 AAA 7,000 7,227,360
U.S. Treasury Notes 7.50%, '97 AAA 14,500 14,858,875
U.S. Treasury Notes 6.50%, '99 AAA 12,800 13,018,752
------------
42,236,027
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $49,725,871) 51,704,262
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C>
COMMON STOCKS--51.2%
Advertising--2.0%
Interpublic Group Companies, Inc. 89,800 3,367,500
Omnicom Group, Inc. 52,000 3,152,500
----------
6,520,000
----------
Aerospace & Defense--3.3%
Boeing Company 70,000 4,383,750
Rockwell International Corp. 70,000 3,202,500
United Technologies Corp. 40,000 3,125,000
----------
10,711,250
----------
Beverages--0.5%
Coca Cola Co. 25,000 1,593,750
----------
Chemical--1.0%
Monsanto Co. 36,000 3,244,500
----------
Chemical--Specialty--1.7%
Engelhard Corp. 85,000 3,644,375
Loctite Corp. 40,000 1,820,000
----------
5,464,375
----------
Computer Software & Services--1.6%
Microsoft Corp. (b) 34,000 3,072,750
Sybase, Inc. (b) 69,300 2,035,687
----------
5,108,437
----------
Conglomerates--0.6%
ITT Corp. 16,000 1,880,000
----------
Electrical Equipment--3.6%
Emerson Electric Co. 74,000 5,291,000
Honeywell, Inc. 145,000 6,253,125
----------
11,544,125
----------
Electronics--0.6%
Amphenol Corp. Class A (b) 15,500 451,438
Intel Corp. 26,000 1,646,125
----------
2,097,563
----------
Entertainment, Leisure &
Gaming--4.2%
Gaylord Entertainment Co. Class A 120,750 3,048,937
Time Warner, Inc. 150,000 6,168,750
Viacom, Inc. Class B (b) 30,000 1,391,250
Walt Disney Co. 51,700 2,875,813
----------
13,484,750
----------
Financial Services--2.1%
American Express Co. 90,000 3,161,250
Travelers Group, Inc. 80,000 3,500,000
----------
6,661,250
----------
Food--1.5%
Ralston Purina Co. 92,000 4,692,000
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
Health Care--Diversified--1.5%
Warner-Lambert Co. 57,000 $ 4,923,375
-----------
Health Care--Drugs--3.5%
Lilly (Eli) & Co. 34,000 2,669,000
Merck & Co., Inc. 120,000 5,880,000
Schering-Plough Corp. 60,000 2,647,500
-----------
11,196,500
-----------
Household Furnishing & Appliance--1.9%
Whirlpool Corp. 112,400 6,182,000
-----------
Insurance--0.2%
American International Group, Inc. 4,300 490,200
-----------
Lodging & Restaurants--1.1%
McDonald's Corp. 90,000 3,521,250
-----------
Medical Products & Supplies--1.4%
Becton Dickinson & Co. 50,200 2,924,150
Medtronic, Inc. 22,000 1,696,750
-----------
4,620,900
-----------
Miscellaneous--3.1%
Eastman Kodak Co. 100,000 6,062,500
Minnesota Mining & Manufacturing Co. 67,000 3,835,750
-----------
9,898,250
-----------
Office & Business Equipment--1.6%
Compaq Computer Corp. (b) 75,000 3,403,125
Silicon Graphics, Inc. (b) 42,000 1,674,750
-----------
5,077,875
-----------
Professional Services--1.1%
First Data Systems Corp. 65,400 3,719,625
-----------
Publishing, Broadcasting, Printing & Cable--3.2%
Capital Cities/ABC, Inc. 29,000 3,132,000
Gannett, Inc. 100,000 5,425,000
Lin Television Corp. (b) 50,400 1,694,700
-----------
10,251,700
-----------
Retail--9.0%
Barnes & Noble, Inc. (b) 75,000 2,550,000
Dillard Department Stores, Inc. 105,000 3,084,375
Federated Department Stores, Inc. (b) 120,000 3,090,000
Kohls Corp. (b) 63,100 2,878,938
May Department Stores Co. 80,000 3,330,000
Nordstrom, Inc. 82,300 3,405,162
Pep Boys--Manny, Moe & Jack 69,000 1,845,750
Talbots, Inc. 75,700 3,009,075
Wal-Mart Stores, Inc. 218,000 5,831,500
-----------
29,024,800
-----------
Telecommunications Equipment--0.9%
Motorola, Inc. 45,000 3,020,625
-----------
TOTAL COMMON STOCKS
(Identified cost $149,523,785) 164,929,100
-----------
FOREIGN COMMON STOCKS--2.8%
Chemical--0.2%
Potash Corp. of Saskatchewan, Inc. (Canada) 9,600 536,400
-----------
Oil Service & Equipment--0.6%
Petroleum Geo-Services ADR (Norway) (b) 69,500 1,998,125
-----------
Telecommunications Equipment--1.0%
Ericsson L.M. Telephone Co. Class B ADR
(Sweden) 163,000 3,260,000
-----------
Utility--Telephone--1.0%
Vodafone Group PLC ADR (United Kingdom) 85,000 3,219,375
-----------
</TABLE>
See Notes to Financial Statements
2-15
<PAGE>
<TABLE>
<CAPTION>
VALUE
-----------
<S> <C>
TOTAL FOREIGN COMMON STOCKS
(Identified cost $7,808,776) $ 9,013,900
----------
TOTAL LONG-TERM INVESTMENTS--70.0%
(Identified cost $207,058,432) 225,647,262
----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR's VALUE
RATING (000)
-------- -----
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--28.7%
Commercial Paper--26.8%
Goldman, Sachs & Co. 5.95%, 7-6-95 A-1+ $8,850 8,842,686
Exxon Imperial U.S., Inc.
5.95%, 7-7-95 A-1+ 7,505 7,497,558
BellSouth Telecommunications,
Inc. 5.95%, 7-10-95 A-1+ 5,180 5,172,295
Exxon Imperial U.S., Inc.
5.95%, 7-11-95 A-1+ 5,120 5,111,538
Goldman, Sachs & Co. 5.95%,
7-12-95 A-1+ 5,000 4,990,910
Philip Morris Cos., Inc. 5.92%,
7-13-95 A-1 8,000 7,984,213
AT&T 5.87%, 7-14-95 A-1+ 5,000 4,989,401
McDonald's Corp. 5.93%, 7-17-95 A-1+ 8,740 8,716,965
Unilever Capital Corp. 5.90%,
7-17-95 A-1+ 4,855 4,842,269
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR's VALUE
RATING (000) VALUE
------- ------ -----------
<S> <C> <C> <C>
BellSouth Telecommunications,
Inc. 5.95%, 7-19-95 A-1+ $ 3,600 $ 3,589,290
H.J. Heinz Co. 5.85%, 7-21-95 A-1 10,310 10,276,492
Campbell Soup Co. 5.93%, 7-27-95 A-1+ 4,435 4,416,006
Shell Oil Co. 5.82%, 7-31-95 A-1+ 10,000 9,951,500
----------
86,381,123
----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Federal Agency Securities--1.9%
Federal National Mortgage Assoc. 5.90%,
8-14-95 1,225 1,216,117
Student Loan Marketing Assoc. 5.66%,
11-9-95 5,000 5,000,000
---------
6,216,117
---------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $92,597,291) 92,597,240
------------
TOTAL INVESTMENTS--98.7%
(Identified cost $299,655,723) 318,244,502(a)
Cash and receivables, less liabilities--1.3% 4,301,051
------------
NET ASSETS--100.0% $322,545,553
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $19,653,065 and gross
depreciation of $1,208,378 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was
$299,799,815.
(b) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
2-16
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $299,655,723) $318,244,502
Receivable for investment securities sold 4,334,895
Investment income receivable 1,022,801
Tax reclaim receivable 9,439
Other receivable 50,216
------------
Total assets 323,661,853
-----------
Liabilities
Custodian 282,622
Payable for investment securities purchased 528,480
Investment advisory fee 187,110
Administration fee 15,858
Trustees' fee 2,494
Accrued expenses 99,736
-----------
Total liabilities 1,116,300
-----------
Net Assets $322,545,553
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $295,497,891
Undistributed net investment income 93,247
Accumulated net realized gains 8,365,636
Net unrealized appreciation 18,588,779
------------
Net Assets $322,545,553
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 23,315,452
============
Net asset value and offering price per share $13.83
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 1,121,341
Interest 5,089,017
----------
Total investment income 6,210,358
----------
Expenses
Investment advisory fee 894,369
Administration fee 90,805
Custodian 18,026
Printing 13,567
Audit 9,523
Trustees' 2,894
Miscellaneous 16,528
----------
Total expenses 1,045,712
----------
Net investment income 5,164,646
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 9,090,550
Net realized loss on foreign currency transactions (2,054)
Net unrealized appreciation on investments 17,775,104
----------
Net gain on investments 26,863,600
----------
Net increase in net assets resulting from operations $32,028,246
==========
</TABLE>
See Notes to Financial Statements
2-17
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------- ----------
<S> <C> <C>
From Operations
Net investment income $ 5,164,646 $ 7,505,444
Net realized gains (losses) 9,088,496 (3,768,797)
Net unrealized appreciation (depreciation) 17,775,104 (7,374,304)
----------- ------------
Net increase (decrease) in net assets resulting from operations 32,028,246 (3,637,657)
----------- ------------
From Distributions to Shareholders
Net investment income (5,049,297) (7,923,603)
Net realized gains (600,030) (9,607,065)
----------- ------------
Decrease in net assets from distributions to shareholders (5,649,327) (17,530,668)
----------- ------------
From Share Transactions
Proceeds from sales of shares (2,603,521 and 6,357,542 shares, respectively) 34,611,837 84,155,117
Net asset value of shares issued from reinvestment of distributions (415,583
and 1,367,449 shares, repectively) 5,649,327 17,530,668
Cost of shares repurchased (2,494,763 and 3,611,175 shares, respectively) (33,177,921) (47,445,390)
----------- ------------
Increase in net assets from share transactions 7,083,243 54,240,395
----------- ------------
Net increase in net assets 33,462,162 33,072,070
Net Assets
Beginning of period 289,083,391 256,011,321
----------- ------------
End of period (including undistributed net investment income and distributions
in excess of net investment income of $93,247 and ($22,102), respectively) $322,545,553 $289,083,391
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six
Months
Ended
June 30, 1995 Year Ended December 31,
(Unaudited) 1994 1993 1992 1991 1990
------------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.68 $13.71 $12.86 $12.97 $11.07 $11.05
Income from investment operations
Net investment income 0.23 0.36(1) 0.23 0.37 0.42 0.58
Net realized and unrealized gain (loss) 1.17 (0.56) 1.17 0.99 2.76 0.02
------------ ------- ------- ------- ------ ------
Total from investment operations 1.40 (0.20) 1.40 1.36 3.18 0.60
------------ ------- ------- ------- ------ ------
Less distributions
Dividends from net investment income (0.22) (0.37) (0.23) (0.37) (0.42) (0.58)
Dividends from net realized gains (0.03) (0.46) (0.32) (1.10) (0.86) --
------------ ------- ------- ------- ------ ------
Total distributions (0.25) (0.83) (0.55) (1.47) (1.28) (0.58)
------------ ------- ------- ------- ------ ------
Change in net asset value 1.15 (1.03) 0.85 (0.11) 1.90 0.02
------------ ------- ------- ------- ------ ------
Net asset value, end of period $13.83 $12.68 $13.71 $12.86 $12.97 $11.07
============ ======= ======= ======= ====== ======
Total return 11.05%(3) -1.45% 11.02% 10.67% 29.44% 5.62%
Ratios/supplemental data:
Net assets, end of period (thousands) $322,546 $289,083 $256,011 $163,628 $98,415 $62,839
Ratio to average net assets of:
Operating expenses 0.69%(2) 0.74% 0.74% 0.50% 0.50% 0.50%
Net investment income 3.38%(2) 2.71% 1.82% 2.90% 3.48% 5.39%
Portfolio turnover rate 159%(2) 220% 269% 326% 255% 302%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.001
per share.
(2) Annualized
(3) Not annualized
The components of income from investment operations are calculated based on
the average number of shares outstanding.
See Notes to Financial Statements
2-18
<PAGE>
INTERNATIONAL SERIES
The last six months have seen widely divergent performance from world
equity markets and currencies. The Mexican peso crisis in December, high
interest rates in non-core European markets and the sharp decline of the U.S.
dollar in the first calendar quarter put tremendous pressure on equities.
More recently, markets have rallied strongly on the back of the booming U.S.
stock and bond markets. Interest rates on long bonds have fallen 80 to 100
basis points throughout most of Europe, helping to boost stocks. Asia and
Latin America also rallied when fears of rising U.S. interest rates faded.
While 1994 earnings growth in Europe was above expectations,
economically-sensitive sectors are already anticipating slower economic
growth ahead. Most of Asia had earnings consistent with expectations, except
for Hong Kong, where weak real estate activity and retail demand have pulled
the market down. Japan has been one of the biggest disappointments, with the
sharp appreciation of the yen worrying both corporations and consumers alike.
Companies that have moved production offshore or been exposed to strong U.S.
and Asian demand reported better-than-expected profits. However, those
companies with significant exposure to the domestic economy are still
suffering. Over this reporting period, the best performers included
Switzerland, the Netherlands, Belgium, Finland and Denmark. Japan and Latin
America were among the worst-performing markets.
For the six months ended June 30, 1995, Phoenix Edge International Fund
produced a total return of 3.71%. As measured by the Morgan Stanley Capital
International EAFE Index, the market gained 2.76% in the same period.* (All
of these figures assume reinvestment of any distributions.)
During this reporting period, the portfolio benefited from its exposure to
Scandinavia, Switzerland, and Southeast Asia. Underweighting in Japan has
also been a positive factor for the portfolio, as well as stronger
performance from European assets late in the period. Finally, good stock
selection overall has helped the portfolio produce its strong relative
performance.
The outlook for European economies is positive, with growth anticipated
between 2.5% and 3% this year. There are few signs of inflationary pressures
in Europe, and bond yields have fallen over the last few months. The main
driver of economic growth has come from industrial companies where
restructuring, strong exports and the start of recovery in Europe has led to
a sharp pick up in activity and a rebound in corporate profits. While the
consumer climate remains quite weak, we expect improvement later in 1995 and
have added to our positions in consumer and domestic demand stocks. We
continue to hold our positions in companies that should benefit from
outsourcing, productivity enhancement and capital investments as Europe works
to improve its global competitiveness.
Strong growth in Asia continues, with the region expected to grow at a
pace of 5% to 8% in 1995. Despite fears of a currency collapse similar to
Mexico's, Asian governments responded quickly, raising interest rates to
protect their currencies and slow overheating economies. We expect to further
increase our overweight position in the region on any market weakness and
look forward to renewed growth in 1996.
Latin America remains difficult. If Mexico stabilizes and does not cause
similar problems for the governments of Brazil and Argentina, there is every
reason to remain sanguine about the long-term outlook. However, we expect
slow economic growth and poor corporate profits in 1995 and will wait to add
to positions until the situation improves.
The Fund has increased holdings in Europe and the Pacific Basin,
particularly in financial stocks that are expected to benefit from lower
interest rates. We plan to increase exposure to the United Kingdom in hope
that the upcoming election spurs the government to create a "feel good"
environment for consumers. We also expect to maintain an underweighting in
Japan until it becomes evident that a serious effort is being made to resolve
fundamental problems in the financial system.
*The Morgan Stanley Capital International EAFE Index is an unmanaged,
commonly used measure of foreign stock performance. This index is an
aggregate of 15 individual country indexes in Europe, Australia and the Far
East.
See Notes to Financial Statements
2-19
<PAGE>
INTERNATIONAL SERIES
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS--90.7%
ARGENTINA--0.6%
Quilmes (Beverages) 42,000 $ 819,000
----------
AUSTRALIA--2.1%
Australia & New Zealand Banking Group
(Banks) 350,000 1,240,519
News Corp. (Publishing, Broadcasting &
Printing) 267,000 1,487,644
----------
2,728,163
----------
BELGIUM--1.0%
Kredietbank NV (Banks) 5,300 1,259,005
----------
CHILE--1.1%
Compania de Telefonos de Chile ADR
(Utility--Telephone) 18,000 1,464,750
----------
DENMARK--2.6%
Danisco A/S (Food) 47,000 2,010,183
Unidanmark (Banks) 27,300 1,339,474
----------
3,349,657
----------
FINLAND--3.4%
Benefon OY (Electronics) 50,700 1,920,140
Nokia AB (Telecommunications Equipment) 21,600 1,262,420
Valmet (Machinery) 56,800 1,281,403
----------
4,463,963
----------
FRANCE--7.8%
Carrefour Supermarche (Retail--Food) 2,100 1,076,534
Castorama Dubois (Retail) 9,600 1,592,243
Christian Dior SA (Retail) 6,600 581,644
Legrand (Electrical Equipment) 8,750 1,389,892
LVMH (Beverages) 8,800 1,584,817
Moulinex (Household Furnishing &
Appliances) (b) 33,366 807,392
Total Compagnie Francaise des Petroles
(Oil) 28,000 1,686,643
Valeo (Auto & Truck Parts) 29,500 1,435,596
----------
10,154,761
----------
GERMANY--8.4%
Buderus AG (Building & Materials) 1,350 648,616
Commerzbank AG (Banks) 8,200 1,959,801
Fresenius AG (Medical Technology) 2,390 1,611,061
Gehe AG (Health Care--Drugs) 2,900 1,330,467
Moebel Walther AG (Household Furnishing &
Appliances) 3,080 1,557,691
Standard Application Software AG--Vorzug
(Computer Software & Services) 2,550 3,210,299
Wella AG (Cosmetics & Soaps) 850 675,529
----------
10,993,464
----------
HONG KONG--7.5%
CDL Hotels International (Lodging &
Restaurants) 2,500,000 1,219,709
Consolidated Electric Power Asia
(Utility-- Electric) 770,000 1,786,300
Dao Heng Bank Group, Ltd. (Banks) 200,000 610,016
First Pacific Company Ltd. (Conglomerates) 2,250,000 1,991,922
HSBC Holdings plc (Banks) 147,000 1,885,590
Hutchison Whampoa (Conglomerates) 295,000 1,425,913
Sun Hung Kai Properties (Property
Development) 130,000 961,874
----------
9,881,324
----------
INDONESIA--3.5%
Astra International (Auto & Truck Parts) 483,000 856,691
Indonesia Satellite (Indosat) (Utility--
Telephone) 122,000 465,649
Indonesia Satellite (Indosat) ADR
(Utility-- Telephone) 22,800 872,100
Matahari Putra Prima (Retail) 294,000 468,657
Matahari Putra Prima Rights (Retail) 147,000 141,917
Semen Gresik (Building & Materials) 137,000 919,690
Wicaksana Overseas (International Trade) 320,000 898,069
----------
4,622,773
----------
ITALY--0.8%
Telecom Italia (Utility--Telephone) 363,000 983,448
----------
JAPAN--8.3%
Hoya (Machinery & Engineering) 20,000 588,929
Kyocera Corp. (Electronics) 12,000 986,574
Mitsui Marine & Fire Insurance (Insurance) 128,000 838,258
Murata Manufacturing (Electronics) 35,000 1,323,323
Nippon Steel (Metals & Mining) 73,000 237,315
Nippon Telegraph & Telephone (Utility--
Telephone) 90 752,651
Omron Corp. (Electrical & Electronics) 44,000 839,577
Oriental Construction Co. (Construction) 62,000 1,299,884
Rohm Co. (Electronics) 25,000 1,289,754
Sankyo Co. (Health Care--Diversified) 31,800 737,881
Shohkoh Fund & Co. (Financial Services) 7,300 1,306,951
SMC Corp. (Machinery) 11,000 630,978
----------
10,832,075
----------
KOREA--2.0%
Korea Electric Power Corp. (Utility--
Electric) 34,210 1,281,324
Samsung Electronics (Electronics) 24,500 1,274,000
----------
2,555,324
----------
MALAYSIA--0.4%
Magnum Corporation (Entertainment, Leisure
& Gaming) 140,000 327,331
Technology Resources Industries (Utility--
Telephone) 70,000 200,993
----------
528,324
----------
NETHERLANDS--6.0%
Ahrend Group NV (Office & Business
Equipment) 14,100 1,859,690
Getronics NV (Computer Software &
Services) 15,900 778,336
IHC Caland NV (Oil Service & Equipment) 57,500 1,631,732
Polygram NV (Entertainment, Leisure &
Gaming) 3,500 206,546
Sphinx Kon CVA (Building & Materials) 41,175 1,471,200
VNU (Publishing, Broadcasting & Printing) 16,300 1,950,113
----------
7,897,617
----------
NORWAY--3.4%
Nera AS (Telecommunications Equipment) 20,000 567,721
Petroleum Geo-Services (Oil Service &
Equipment) 60,000 1,725,000
Uni Storebrand (Insurance) 482,000 2,165,677
----------
4,458,398
----------
PERU--1.2%
CPT (Utility--Telephone) 893,945 1,525,366
----------
PHILIPPINES--1.0%
Metropolitan Bank & Trust Co. (Banks) 60,000 1,303,837
----------
PORTUGAL--1.2%
Portugal Telecom (Utility--Telephone) 80,000 1,529,532
----------
SINGAPORE--1.8%
City Developments Ltd. (Property
Development) 100,000 611,807
Development Bank of Singapore (Banks) 131,000 1,490,447
United Overseas Bank Ltd. (Banks) 25,200 238,025
----------
2,340,279
----------
See Notes to Financial Statements
2-20
<PAGE>
INTERNATIONAL SERIES
SPAIN--3.5%
Banco Central Hispanoamericano, SA (Banks) 57,000 1,207,408
Centros Comerciales Continente SA (Retail) 64,000 1,538,030
Repsol SA (Oil) 58,000 1,824,924
----------
4,570,362
----------
SWEDEN--4.6%
Allgon AB (Telecommunications Equipment) 54,000 1,282,960
Astra AB (Health Care--Drugs) 49,050 1,512,267
Autoliv AB (Auto & Truck Parts) 37,000 1,976,626
SKF AB (Industrial Components) 62,000 1,251,648
----------
6,023,501
----------
SWITZERLAND--5.5%
Brown Boveri & Cie Bearer (Electrical
Equipment) 520 538,009
Brown Boveri B Reg. (Electrical Equipment) 6,500 1,303,273
Roche Holdings (Health Care--Diversified) 300 1,932,124
Sandoz AG (Health Care--Diversified) 2,050 1,412,811
Winterthur Insurance Co. (Insurance) 3,400 2,042,184
----------
7,228,401
----------
THAILAND--1.7%
Bangkok Bank Company Ltd. (Banks) 57,000 628,074
PTT Exploration & Production (Oil) 104,000 1,120,681
Industrial Finance Corporation of Thailand
(Financial Services) 200,000 526,636
----------
2,275,391
----------
UNITED KINGDOM--11.3%
Allied Irish Banks plc (Banks) 28,000 1,327,605
British Sky Broadcasting Group plc
(Publishing, Broadcasting, Printing &
Cable) 113,000 493,532
BSR International (Electronics) 893,000 1,392,426
Carlton Communications (Publishing &
Broadcasting) 117,000 1,774,081
Glaxo Welcome plc (Health Care--Drugs) 106,000 1,301,177
Granada Group (Entertainment, Leisure &
Gaming) 139,000 1,344,662
Lonrho plc (Conglomerates) 478,000 1,125,601
Next plc (Retail) 266,000 1,445,330
Siebe plc (Industrial & Electrical
Machinery) 66,000 657,375
Smithkline Beecham plc (Health Care--
Diversified) 38,000 1,719,500
Takare (Hospital Management & Services) 497,000 1,518,282
TLG plc (Electrical Equipment) 290,000 729,036
----------
14,828,607
----------
TOTAL COMMON STOCKS
(Identified cost $108,741,845) 118,617,322
----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
------- ------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--6.7%
Commercial Paper U.S.--6.7%
Wal-Mart Stores, Inc. 5.97%,
7-3-95 A-1+ $4,430 $ 4,428,531
AT&T Capital Corp. 5.97%,
7-6-95 A-1 2,470 2,467,952
McDonald's Corp. 5.93%, 7-11-95 A-1+ 1,880 1,876,903
8,773,386
---------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $8,773,386) 8,773,386
---------
TOTAL INVESTMENTS--97.4%
(Identified cost $117,515,231) 127,390,708(a)
Cash and receivables, less liabilities--2.6% 3,390,875
---------
NET ASSETS--100.0% $130,781,583
============
</TABLE>
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Common Stock
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Auto & Truck Parts 3.6%
Banks 12.2
Beverages 2.0
Building & Materials 2.6
Computer Software & Services 3.4
Conglomerates 3.8
Construction 1.1
Cosmetics & Soaps 0.6
Electrical Equipment 3.3
Electronics 7.6
Entertainment, Leisure & Gaming 1.6
Financial Services 1.5
Food 1.7
Health Care--Diversified 4.9
Health Care--Drugs 3.5
Hospital Management & Services 1.3
Household Furnishing & Appliances 2.0
Industrial & Electrical Machinery 0.6
Industrial Components 1.1
Insurance 4.2
International Trade 0.7
Lodging & Restaurants 1.0
Machinery 1.6
Machinery & Engineering 0.5
Medical Technology 1.4
Metals & Mining 0.2
Office & Business Equipment 1.6
Oil and Oil Service & Equipment 6.7
Publishing, Broadcasting, Printing & Cable 4.8
Property Development 1.3
Retail 4.9
Retail--Food 0.9
Telecommunications Equipment 2.6
Utility--Electric 2.6
Utility--Telephone 6.6
-----
100.0%
=====
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $11,564,508 and gross
depreciation of $1,715,817 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was
$117,542,017.
(b) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
2-21
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment securities at market (Identified cost $117,515,231) $127,390,708
Foreign currency at market (Identified cost $975,947) 984,970
Receivable for investment securities sold 5,156,297
Investment income receivable 322,321
Tax reclaim receivable 51,077
------------
Total Assets 133,905,373
------------
Liabilities
Custodian 161,817
Payable for investment securities purchased 2,267,930
Investment advisory fee 76,700
Administration fee 6,477
Trustees' fee 4,925
Accrued expenses 120,450
Net unrealized depreciation on forward currency contracts 485,491
------------
Total Liabilities 3,123,790
------------
Net Assets $130,781,583
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $124,087,708
Undistributed net investment income 1,433,927
Accumulated net realized losses (4,145,430)
Net unrealized appreciation 9,405,378
------------
Net Assets $130,781,583
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 10,639,937
============
Net asset value and offering price per share $12.29
============
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Investment Income
<S> <C>
Dividends $ 1,307,543
Interest 573,109
Foreign taxes withheld (154,609)
-----------
Total investment income 1,726,043
-----------
Expenses
Investment advisory fee 478,586
Administration fee 38,287
Custodian 112,512
Printing 16,712
Audit 13,571
Trustees' 7,980
Miscellaneous 13,466
-----------
Total expenses 681,114
-----------
Net investment income 1,044,929
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (1,182,031)
Net realized loss on foreign currency transactions (1,398,707)
Net unrealized appreciation on investment securities 6,054,799
Net unrealized depreciation on foreign currency
transactions (91,786)
-----------
Net gain on investments 3,382,275
-----------
Net increase in net assets resulting from operations $ 4,427,204
===========
</TABLE>
See Notes to Financial Statements
2-22
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 1,044,929 $ 691,783
Net realized losses (2,580,738) (74,826)
Net change in unrealized appreciation (depreciation) 5,963,013 (3,984,032)
----------- ------------
Net increase (decrease) in net assets resulting from operations 4,427,204 (3,367,075)
----------- ------------
From Distributions to Shareholders
Net investment income -- (257,332)
Net realized gains -- (3,156,656)
----------- ------------
Decrease in net assets from distributions to shareholders -- (3,413,988)
----------- ------------
From Share Transactions
Proceeds from sales of shares (2,397,058 and 9,181,135 shares, respectively) 27,847,088 115,954,555
Net asset value of shares issued from reinvestment of distributions (0 and
282,805 shares, respectively) -- 3,413,988
Cost of shares repurchased (3,116,702 and 3,121,639 shares, respectively) (36,119,920) (39,201,848)
----------- ------------
(Decrease) increase in net assets from share transactions (8,272,832) 80,166,695
----------- ------------
Net (decrease) increase in net assets (3,845,628) 73,385,632
Net Assets
Beginning of period 134,627,211 61,241,579
----------- ------------
End of period (including undistributed net investment income of $1,433,927 and
$388,998, respectively) $130,781,583 $134,627,211
=========== ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding through the indicated period)
<TABLE>
<CAPTION>
Six
Months From
Ended Inception
June 30, 1995 Year Ended December 31, 5/1/90 to
(Unaudited) 1994 1993 1992 1991 12/31/90
------------- -------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.85 $12.21 $ 8.82 $10.17 $ 9.07 $10.00
Income from investment operations
Net investment income 0.10 0.08 0.07(2) 0.09 0.24(2) 0.07(2)
Net realized and unrealized gain (loss) 0.34 (0.07) 3.32 (1.40) 1.53 (0.88)
------------ ------- ------ ------ ------ ---------
Total from investment operations 0.44 0.01 3.39 (1.31) 1.77 (0.81)
------------ ------- ------ ------ ------ ---------
Less distributions
Dividends from net investment income -- (0.03) -- (0.04) (0.24) (0.07)
Dividends from net realized gains -- (0.34) -- -- (0.41) --
Distributions from paid in capital -- -- -- -- (0.02) (0.05)
------------ ------- ------ ------ ------ ---------
Total distributions -- (0.37) -- (0.04) (0.67) (0.12)
------------ ------- ------ ------ ------ ---------
Change in net asset value 0.44 (0.36) 3.39 (1.35) 1.10 (0.93)
------------ ------- ------ ------ ------ ---------
Net asset value, end of period $12.29 $11.85 $12.21 $ 8.82 $10.17 $ 9.07
============ ======= ====== ====== ====== =========
Total return 3.71%(3) 0.03% 38.44% -12.89% 19.78% -8.10%(3)
Ratio/supplemental data:
Net assets, end of period (thousands) $130,782 $134,627 $61,242 $13,772 $6,119 $2,010
Ratio to average net assets of:
Operating expenses 1.06%(1) 1.10% 1.15% 1.50% 1.50% 1.50%(1)
Net investment income 1.62%(1) 0.64% 0.49% 1.13% 2.44% 1.82%(1)
Portfolio turnover rate 268%(1) 172% 193% 74% 104% 48%(1)
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of $0.05,
$0.02 and $0.07, respectively.
(3) Not annualized
The components of income from investment operations are calculated based on
the average number of shares outstanding.
See Notes to Financial Statements
2-23
<PAGE>
BALANCED SERIES
Moderating economic growth and relatively subdued inflation have provided a
much improved investment environment for the financial markets over this
six-month reporting period. For the six months ended June 30,1995, the
Balanced Series provided a total return of 10.12%. The Fund's Balanced
Benchmark returned 15.28% in the same period.* (All of these figures assume
reinvestment of any distributions.)
While our efforts to keep the Fund more fully invested have helped the
portfolio over the first half of 1995, most of the underperformance came
early in the period. On balance, the fixed-income holdings produced solid
results. A shorter duration versus the benchmark held performance back
somewhat; however, the portfolio benefited as we extended duration over the
second calendar quarter. At present we expect to maintain a longer duration,
in light of a slowing economy that has helped calm fears of inflation.
In the equity segment, we increased exposure to the technology, financial
services and capital goods sectors, with good results overall. Strong
contributors to the portfolio included such names as cisco, Travelers Group,
First Financial Management and Boeing. We also worked to reduce holdings in
the weaker sectors--particularly consumer staples and consumer cyclicals--
that pulled performance down in the period. Finally, while the technology and
financial services holdings posted strong results, underweightings in these
areas moving into the period hurt the portfolio.
In the coming months, we expect to keep the portfolio more fully invested.
We believe the recent adjustments to the portfolio's sector weightings have
positioned the Fund to benefit from some of the most promising growth trends
in the marketplace.
*The Balanced Benchmark is calculated by Frank Russell Company based on the
performance of the following indexes: 55% S&P 500, 35% Lehman Brothers
Aggregate Bond Index and 10% U.S. Treasury bills.
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
STANDARD
& PAR
POOR'S VALUE
RATING (000) VALUE
------- ------------ ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--38.4%
U.S. Treasury Bonds--17.8%
U.S. Treasury Bonds 6.50%, '05 AAA $ 7,000 $ 7,148,120
U.S. Treasury Bonds 7.50%, '05 AAA 6,750 7,353,113
U.S. Treasury Bonds 7.50%, '16 AAA 9,000 9,804,960
U.S. Treasury Bonds 7.50%, '24 AAA 5,500 6,088,280
-----------
30,394,473
-----------
U.S. Treasury Notes--17.7%
U.S. Treasury Notes 4.625%, '95 AAA 3,000 2,996,244
U.S. Treasury Notes 7.25%, '96 AAA 11,000 11,205,920
U.S. Treasury Notes 4.75%, '98 AAA 1,500 1,445,820
U.S. Treasury Notes 4.75%, '98 AAA 2,000 1,932,160
U.S. Treasury Notes 6%, '99 AAA 2,500 2,500,975
U.S. Treasury Notes 6.875%, '00 AAA 9,850 10,189,727
-----------
30,270,846
-----------
Mortgage-Backed Securities--2.9%
GNMA 6.50%, '23 AAA 1,960 1,885,893
GNMA 9%, '23-'25 AAA 2,940 3,089,765
-----------
4,975,658
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $64,363,947) 65,640,977
-----------
CONVERTIBLE BONDS--2.3%
Computer Software & Services--1.2%
First Financial Management Corp. Cv.
5%, '99 A 1,500 2,032,500
-----------
Electronics--0.7%
Integrated Device Technology Cv. 5.50%, '02 B 1,125 1,178,438
-----------
Lodging & Restaurants--0.4%
Boston Chicken Cv. Notes 0%, '15 B 3,350 720,250
-----------
TOTAL CONVERTIBLE BONDS
(Identified cost $3,676,098) 3,931,188
-----------
CONVERTIBLE PREFERRED STOCKS--2.7%
Insurance--0.4%
St. Paul Capital LLC Cv. Pfd. 6%, '25 12,500 653,125
-----------
Pollution Control--0.5%
Browning-Ferris Industries, Inc. Cv. Pfd. 7.25% 20,000 730,000
-----------
Professional Services--0.9%
American Express Co. DECS First Data '96 32,000 1,552,000
-----------
Telecommunications Equipment--0.9%
MFS Communications Cv. Pfd. DECS 8%, '98 46,500 1,604,250
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $4,157,864) 4,539,375
-----------
COMMON STOCKS--47.7%
Aerospace & Defense--3.9%
Boeing Company 25,000 1,565,625
Lockheed Martin Corp. 32,000 2,020,000
Loral Corp. 27,000 1,397,250
Rockwell International Corp. 38,000 1,738,500
-----------
6,721,375
-----------
Bank--3.0%
Chase Manhattan Corp. 35,000 1,645,000
Golden West Financial Corp. 37,500 1,767,188
Signet Banking Corp. 80,000 1,750,000
-----------
5,162,188
-----------
Chemical--1.3%
W. R. Grace & Co. 34,500 2,117,438
-----------
Chemical--Specialty--1.0%
Air Products & Chemicals, Inc. 30,000 1,672,500
-----------
Computer Software & Services--3.1%
Cadence Design Systems, Inc. (b) 50,000 1,618,750
Computer Sciences Corp. (b) 30,000 1,706,250
Microsoft Corp. (b) 16,000 1,446,000
Sybase, Inc. (b) 17,000 499,375
-----------
5,270,375
-----------
See Notes to Financial Statements
</TABLE>
2-24
<PAGE>
BALANCED SERIES
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C>
Conglomerates--3.3%
Alco Standard Corp. 23,000 $ 1,837,125
ITT Corp. 16,500 1,938,750
Tyco International Ltd. 33,000 1,782,000
-----------
5,557,875
-----------
Diversified Financial Services--3.6%
Equifax, Inc. 53,000 1,768,875
Federal National Mortgage Assoc. 10,000 943,750
Green Tree Financial Corp. 35,000 1,553,125
Travelers Group, Inc. 43,000 1,881,250
-----------
6,147,000
-----------
Electronics--1.0%
Applied Materials, Inc. (b) 20,000 1,732,500
-----------
Engineering & Construction--1.1%
Fluor Corp. 35,000 1,820,000
-----------
Entertainment, Leisure & Gaming--3.5%
King World Productions, Inc. (b) 22,000 891,000
Mattel, Inc. 67,500 1,755,000
Viacom, Inc. Class B (b) 36,000 1,669,500
Walt Disney Co. 30,000 1,668,750
-----------
5,984,250
-----------
Health Care--Drugs--1.9%
Amgen, Inc. (b) 17,000 1,367,437
Genzyme Corp. 48,000 1,920,000
-----------
3,287,437
-----------
Insurance--2.2%
Aetna Life & Casualty Co. 30,000 1,886,250
American International Group, Inc. 16,000 1,824,000
-----------
3,710,250
-----------
Medical Products & Supplies--1.0%
Medtronic, Inc. 22,000 1,696,750
-----------
Miscellaneous--1.1%
CUC International, Inc. (b) 43,000 1,806,000
-----------
Natural Gas--1.1%
Enron Corp. 54,000 1,896,750
-----------
Office & Business Equipment--3.7%
Compaq Computer Corp. (b) 40,000 1,815,000
Hewlett Packard Co. 13,000 968,500
Silicon Graphics, Inc. (b) 45,000 1,794,375
Sun Microsystems, Inc. (b) 35,000 1,697,500
-----------
6,275,375
-----------
Oil--3.0%
Atlantic Richfield Co. 15,000 1,646,250
Mobil Corp. 20,000 1,920,000
Union Texas Petroleum Holdings, Inc. 76,500 1,616,062
-----------
5,182,312
-----------
Oil Service & Equipment--1.7%
BJ Services Co. (b) 70,000 1,592,500
J Ray McDermott SA 61,000 1,349,625
-----------
2,942,125
-----------
Pollution Control--0.6%
Browning-Ferris Industries, Inc. 30,000 1,083,750
-----------
Reits--0.8%
Nationwide Health Properties, Inc. 35,000 1,365,000
-----------
Retail--1.7%
Borders Group, Inc. (b) 80,000 1,150,000
Sears Roebuck & Co. 30,000 1,796,250
-----------
2,946,250
-----------
Telecommunications Equipment--3.2%
ADC Telecommunications, Inc. (b) 30,000 1,072,500
cisco Systems, Inc. (b) 30,000 1,516,875
Qualcomm, Inc. (b) 30,000 1,036,875
Tele-Communications, Inc. Class A (b) 80,000 1,875,000
-----------
5,501,250
-----------
Tobacco--0.9%
Philip Morris Companies, Inc. 20,000 1,487,500
-----------
TOTAL COMMON STOCKS
(Identified cost $73,610,252) 81,366,250
-----------
FOREIGN COMMON STOCKS--0.8%
Oil Service & Equipment--0.8%
Petroleum Geo-Services ADR (Norway) (b) 50,000 1,437,500
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,541,060) 1,437,500
-----------
TOTAL LONG-TERM INVESTMENTS--91.9%
(Identified cost $147,349,221) 156,915,290
-----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
------- -----
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--6.5%
Commercial Paper--6.5%
Philip Morris Cos., Inc.
6.10%, 7-3-95 A-1 $ 250 249,915
McDonald's Corp. 5.93%, 7-11-95 A-1+ 4,480 4,472,620
McDonald's Corp. 5.93%, 7-11-95 A-1+ 2,890 2,885,240
Goldman, Sachs & Co. 5.95%,
7-12-95 A-1+ 3,530 3,523,582
----------
11,131,357
----------
TOTAL SHORT TERM OBLIGATIONS
(Identified cost $11,131,357) 11,131,357
-----------
TOTAL INVESTMENTS--98.4%
(Identified cost $158,480,578) 168,046,647(a)
Cash and receivables, less liabilities--1.6% 2,723,963
------------
NET ASSETS--100.0% $170,770,610
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $10,710,539 and gross
depreciation of $1,156,987 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was
$158,493,095.
(b) Non-income producing.
ADR-American Depository Receipt
See Notes to Financial Statements
2-25
<PAGE>
BALANCED SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $158,480,578) $168,046,647
Receivable for investment securities sold 2,936,373
Investment income receivable 964,372
Other receivable 34,514
------------
Total assets 171,981,906
------------
Liabilities
Custodian 24,854
Payable for investment securities purchased 990,375
Investment advisory fee 83,537
Trustees' fee 6,970
Administration fee 1,917
Accrued expenses 103,643
------------
Total liabilities 1,211,296
------------
Net Assets $170,770,610
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $163,319,543
Distributions in excess of net investment income (49,889)
Accumulated net realized losses (2,065,113)
Net unrealized appreciation 9,566,069
------------
Net Assets $170,770,610
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 15,003,218
============
Net asset value and offering price per share $11.38
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 739,161
Interest 2,695,627
----------
Total investment income 3,434,788
----------
Expenses
Investment advisory fee 451,472
Administration fee 42,751
Printing 18,118
Custodian 17,699
Audit 12,801
Trustees' 4,096
Miscellaneous 13,103
----------
Total expenses 560,040
----------
Net investment income 2,874,748
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 4,418,996
Net realized loss on foreign currency transactions (36,763)
Net unrealized appreciation on investments 8,788,760
----------
Net gain on investments 13,170,993
----------
Net increase in net assets resulting from operations $16,045,741
==========
</TABLE>
See Notes to Financial Statements
2-26
<PAGE>
BALANCED SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/95 Ended
(Unaudited) 12/31/94
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 2,874,748 $ 5,692,109
Net realized gains (losses) 4,382,233 (6,373,826)
Net unrealized appreciation (depreciation) 8,788,760 (4,002,731)
----------- ------------
Net increase (decrease) in net assets resulting from operations 16,045,741 (4,684,448)
----------- ------------
From Distributions to Shareholders
Net investment income (3,132,824) (5,536,378)
Net realized gains -- (1,538,238)
----------- ------------
Decrease in net assets from distributions to shareholders (3,132,824) (7,074,616)
----------- ------------
From Share Transactions
Proceeds from sales of shares (1,366,364 and 5,359,333 shares, respectively) 15,032,325 59,085,232
Net asset value of shares issued from reinvestment of distributions (281,090 and
660,710 shares, respectively) 3,132,824 7,074,616
Cost of shares repurchased (1,949,783 and 4,699,191 shares, respectively) (21,412,687) (51,439,961)
----------- ------------
(Decrease) increase in net assets from share transactions (3,247,538) 14,719,887
----------- ------------
Net increase in net assets 9,665,379 2,960,823
Net Assets
Beginning of period 161,105,231 158,144,408
----------- ------------
End of period (including distributions in excess of net investment income and
undistributed net investment income of ($49,889) and $208,187, respectively) $170,770,610 $161,105,231
=========== ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six
Months From
Ended Inception
June 30, 5/1/92
1995 Year Ended to
(Unaudited) 12/31/94 12/31/93 12/31/92
------------ ---------- ---------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.53 $11.31 $10.77 $10.00
Income from investment operations
Net investment income 0.19 0.38(2) 0.32(2) 0.19
Net realized and unrealized gain (loss) 0.87 (0.70) 0.60 0.77
----------- --------- --------- --------
Total from investment operations 1.06 (0.32) 0.92 0.96
----------- --------- --------- --------
Less distributions
Dividends from net investment income (0.21) (0.36) (0.32) (0.19)
Dividends from net realized gains -- (0.10) (0.06) --
----------- --------- --------- --------
Total distributions (0.21) (0.46) (0.38) (0.19)
----------- --------- --------- --------
Change in net asset value 0.85 (0.78) 0.54 0.77
----------- --------- --------- --------
Net asset value, end of period $11.38 $10.53 $11.31 $10.77
=========== ========= ========= ========
Total return 10.12%(3) -2.80% 8.57% 9.72%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $170,771 $161,105 $158,144 $54,467
Ratio to average net assets of:
Operating expenses 0.68%(1) 0.69% 0.70% 0.50%(1)
Net investment income 3.47%(1) 3.44% 3.16% 3.59%(1)
Portfolio turnover rate 242%(1) 171% 161% 110%(1)
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.001 and $0.001 per share, respectively.
(3) Not annualized
The components of income from operations are calculated based on the average
number of shares outstanding at each quarter end.
See Notes to Financial Statements
2-27
<PAGE>
REAL ESTATE SERIES
Phoenix Edge Real Estate Fund was launched on May 1, 1995. For the two months
ended June 30, 1995, the portfolio posted a total return of 5.32%. The
performance was solid compared to the NAREIT* Equity Index, which recorded a
total return of 5.9% during this period. (All of these figures assume
reinvestment of any distributions.)
The portfolio benefited from strong performance by some of its key
holdings. Bay Apartment Communities, Inc. (apartments), Weeks Corp.
(industrial), Sun Communities, Inc. (manufactured housing) and Highwoods
Properties (office) enjoyed growing market interest due to favorable growth
forecasts. The portfolio is weighted heaviest in the apartment (29.5%) and
retail (30.2%) sectors; however, we have begun to reduce exposure to retail
in favor of opportunities in the office and industrial sectors. This is due
to the underlying improvement in office and industrial market fundamentals as
well as growing concern regarding turmoil in the broad retail industry.
Performance in the REIT industry remains divergent by sector. For example,
performance has been strong in the office and self-storage sectors, which
recorded total returns of 11.7% and 12.8% year-to-date, respectively.
Investors have pushed yields lower in these sectors because of excellent
growth prospects. The retail sector has posted weaker returns year-to-date
with a total return of 1.5%. This is due to moderating growth forecasts for
retail sales and a fierce battle for the consumer dollar that is being waged
between newer and more traditional retail formats.
On the whole, the real estate industry is in a cyclical recovery since the
crash of the late-1980s. New supply remains constrained in most markets while
moderately increasing demand continues to fill vacant space. Landlords have
shown an increasing ability to raise rental rates and property incomes are
rising. With values stabilized, liquidity has returned to the real estate
markets. The industry is watching diligently for signs of renewed
construction but so far building is limited to isolated apartment markets in
the south and mountain regions. As long as new supply is constrained, market
fundamentals should continue to improve.
This outlook is translating into strong consensus growth estimates for
Funds From Operations (FFO) in the REIT sector. REIT FFOs are forecasted to
grow 8.0% in 1995. Share prices in the last twelve months have not kept pace
with income growth. Price multiples have declined and current dividend yields
are well above the levels seen in 1993 and early 1994. Currently, the average
dividend yield for Equity REITs is approximately 7.7%. Based on our analysis,
REITs are trading at a discount to the estimated aggregate market values of
their assets.
We believe that improving fundamentals in the real estate industry will
continue to translate into earnings growth for REITs. With already high
income yields, share prices should rise with income growth. We continue to
concentrate on those sectors which offer the best prospects for income
growth. We will also continue to focus on companies with excellent track
records and conservative financial structures.
* The National Association of Real Estate Investment Trusts (NAREIT) Equity
Index is a commonly used, unmanaged indicator of REIT performance.
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----------
<S> <C> <C>
COMMON STOCKS--97.3%
COMMERCIAL--18.3%
Industrial--5.0%
Security Capital Industrial Trust 5,300 $ 86,125
Weeks Corporation 8,400 210,000
----------
296,125
----------
Office--7.6%
Duke Realty Investments, Inc. 4,200 118,650
Highwoods Properties, Inc. 8,500 216,750
Spieker Properties, Inc. 5,300 118,588
----------
453,988
----------
Storage--5.7%
Shurgard Storage Centers, Inc. 6,200 142,600
Storage Trust Realty, Inc. 1,400 28,350
Storage USA, Inc. 6,000 170,250
----------
341,200
----------
TOTAL COMMERCIAL 1,091,313
----------
DIVERSIFIED--1.9%
Colonial Properties Trust 5,000 115,000
----------
TOTAL DIVERSIFIED 115,000
----------
HEALTH CARE--7.8%
Health Care Properties Inv., Inc. 7,300 233,600
Nationwide Health Properties, Inc. 6000 234,000
----------
467,600
----------
TOTAL HEALTH CARE 467,600
----------
HOTEL--2.9%
FelCor Suite Hotels, Inc. 4,400 112,200
Starwood Lodging Trust (b) 2,500 58,750
----------
170,950
----------
TOTAL HOTEL 170,950
----------
RESIDENTIAL--36.2%
Apartment--29.5%
Avalon Properties, Inc. 5,600 111,300
Bay Apartment Community, Inc. 9,000 175,500
Camden Property Trust 4,900 107,187
Equity Residential Properties Trust 7,000 195,125
Evans Withycombe Residential 8,700 177,262
Merry Land & Investment Co. 9,800 199,675
Oasis Residential, Inc. 7,600 165,300
Post Properties, Inc. 5,400 163,350
Security Capital Pacific Trust 10,000 173,750
South West Property Trust 9,800 112,700
United Dominion Realty Trust 12,200 179,950
----------
1,761,099
-----------
See Notes to Financial Statements
2-28
<PAGE>
REAL ESTATE SERIES
Manufactured Homes--6.7%
Chateau Properties, Inc. 6,300 $ 131,512
Manufactured Home Communities 5,400 83,025
Sun Communities, Inc. 7,300 182,500
----------
397,037
----------
TOTAL RESIDENTIAL 2,158,136
----------
RETAIL--30.2%
Community/Neighborhood--14.3%
Developers Diversified Realty Corp. 7,000 201,250
Federal Realty Investment Trust 6,700 144,888
Kimco Realty Corp. 2,700 102,600
Regency Realty Corp. 3,200 54,400
Vornado Realty Trust 4,900 170,887
Weingarten Realty Investors 3,100 117,025
Western Investment Real Estate Trust 5,200 61,750
----------
852,800
----------
Factory Outlet--5.7%
Chelsea G.C.A. Realty, Inc. 8,400 226,800
Horizon Outlet Center 4,900 113,925
----------
340,725
----------
Regional Mall--10.2%
DeBartolo Realty Corp. 8,100 118,464
J.P. Realty, Inc. 8,300 170,150
Simon Property Group, Inc. 7,200 180,900
Taubman Centers, Inc. 14,800 140,600
----------
610,114
----------
TOTAL RETAIL 1,803,639
----------
TOTAL COMMON STOCKS
(Identified cost $5,599,018) 5,806,638
----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
------- ----- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.0%
Commercial Paper--2.0%
BellSouth Telecommunications,
Inc. 6.10%, 7-10-95 A-1+ $120 $ 119,817
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $119,817) 119,817
------------
TOTAL INVESTMENTS--99.3%
(Identified cost $5,718,835) 5,926,455(a)
Cash and receivables, less liabilities--0.7% 43,580
------------
NET ASSETS--100.0% $5,970,035
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $241,863 and gross
depreciation of $34,626 for income tax purposes. At June 30, 1995 the
aggregate cost of securities for federal income tax purposes was $5,719,218.
(b) Non-income producing.
See Notes to Financial Statements
2-29
<PAGE>
REAL ESTATE SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $5,718,835) $5,926,455
Cash 22,346
Receivable for investment securities sold 29,224
Receivable from adviser 235
Investment income receivable 57,931
----------
Total assets 6,036,191
----------
Liabilities
Payable for investment securities purchased 62,120
Trustees' fee 1,350
Administration fee 286
Accrued expenses 2,400
----------
Total liabilities 66,156
----------
Net Assets $5,970,035
==========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $5,755,107
Undistributed net investment income 4,024
Accumulated net realized gains 3,284
Net unrealized appreciation 207,620
----------
Net Assets $5,970,035
==========
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 573,385
==========
Net asset value and offering price per share $10.41
==========
</TABLE>
STATEMENT OF OPERATIONS
From Inception May 1, 1995 to June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 72,109
Interest 8,900
-------
Total investment income 81,009
-------
Expenses
Investment advisory fee 6,910
Administration fee 553
Custodian 3,300
Trustees' 1,350
Audit 450
Printing 200
Miscellaneous 260
-------
Total expenses 13,023
-------
Less expenses borne by investment adviser (3,810)
-------
Net expenses 9,213
-------
Net investment income 71,796
-------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 3,284
Net unrealized appreciation on investments 207,620
-------
Net gain on investments 210,904
-------
Net increase in net assets resulting from operations $282,700
=======
</TABLE>
See Notes to Financial Statements
2-30
<PAGE>
REAL ESTATE SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
5/1/95 to
6/30/95
(Unaudited)
--------------
<S> <C>
From Operations
Net investment income $ 71,796
Net realized gains 3,284
Net unrealized appreciation 207,620
----------
Net increase in net assets resulting from operations 282,700
----------
From Distributions to Shareholders
Net investment income (67,772)
----------
Decrease in net assets from distributions to shareholders (67,772)
----------
From Shares of Beneficial Interest Transactions
Proceeds from sales of shares (597,521 shares) 6,006,243
Net asset value of shares issued in conjunction with reinvestment of distributions (6,612 shares) 67,772
Cost of shares repurchased (30,748 shares) (318,908)
----------
Increase in net assets from share transactions 5,755,107
----------
Net increase in net assets 5,970,035
Net Assets
Beginning of period --
----------
End of period (including undistributed net investment income of $4,024) $5,970,035
==========
</TABLE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From Inception
5/1/95 to
6/30/95
(Unaudited)
------------
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations
Net investment income 0.13(2)
Net realized and unrealized gain 0.40
------
Total from investment operations 0.53
------
Less distributions
Dividends from net investment income (0.12)
------
Total distributions (0.12)
------
Change in net asset value 0.41
------
Net asset value, end of period $10.41
======
Total return 5.32%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $5,970
Ratio to average net assets of:
Operating expenses 1.00%(1)
Net investment income 7.79%(1)
Portfolio turnover rate 16%(1)
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment
adviser of $0.007 per share.
(3) Not annualized
The components of income from operations are calculated based on the average
number of shares outstanding.
See Notes to Financial Statements
2-31
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
Note 1--Organization
The Phoenix Edge Series Fund (the "Fund") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund is comprised of the Money Market, Growth, Bond, Total Return,
International, Balanced and Real Estate Series. The Fund was established as
part of the December 8, 1986 reorganization of the Phoenix Home Life Variable
Accumulation Account (the Account) from a management investment company to a
unit investment trust under the Investment Company Act of 1940. The Fund is
organized with Series which are available only to the sub-accounts of the
Phoenix Home Life Variable Accumulation Account and the Phoenix Home Life
Variable Universal Life Account.
Note 2--Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. Security Valuation
In determining the value of the investments of the Growth Series, Bond
Series, Total Return Series, International Series, the Balanced Series and
the Real Estate Series, the securities for which market quotations are
readily available are valued at market value, which is currently determined
using the last reported sale price, or if no sales are reported, the last
reported bid price. Debt securities (other than short-term obligations) are
valued on the basis of broker quotations or valuations provided by a pricing
service when such prices are believed to reflect the fair value of such
securities. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices and take into account appropriate factors
such as institution-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and
other market data. Use of pricing services has been approved by the Trustees.
Short-term securities having a remaining maturity of less than sixty days,
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.
The Money Market Series uses the amortized cost method of security valuation
which, in the opinion of the Trustees, represents the fair value of the
particular security. The Trustees monitor the deviations between the Series'
net asset value per share as determined by using available market quotations
and its amortized cost per share. If the deviation exceeds 1/2 of 1%, the
Board of Trustees will consider what action, if any, should be initiated to
provide fair valuation. The Series attempts to maintain a constant net asset
value of $10 per share. The assets of the Series will not be invested in any
security with a maturity of greater than 397 days, and the weighted average
maturity of its portfolio will not exceed 90 days.
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 Fund is
notified. The Fund does not amortize premiums except for the Money Market
Series, but does amortize discounts using the effective interest method.
Realized gains and losses are determined on the identified cost basis.
C. Income Taxes
Each of the Series is treated as a separate taxable entity. It is the policy
of each Series to comply with the requirements of the Internal Revenue Code,
applicable to regulated investment companies, and to distribute substantially
all of its taxable income to its shareholders. In addition, each Portfolio
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 series on the ex-dividend date and all
distributions are reinvested into the Fund. 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, 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.
2-32
<PAGE>
E. Foreign Currency Translation
Foreign securities, other assets and liabilities are valued using the foreign
currency exchange rate effective at the end of the reporting period.
Purchases and sales of foreign investments and income and expenses are
translated into U.S. dollars based upon exchange rates prevailing on the
respective dates of such transactions. The gain or loss resulting from a
change in exchange rates between the trade and settlement dates of a
portfolio transaction or between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate
that portion of the results of operations arising from changes in exchange
rates and that portion arising from changes in the market prices of
securities.
F. Forward Currency Contracts
Each Series 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.
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 the Series as an unrealized gain (or loss). When
the contract is closed, the Series 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.
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. 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 the value of the contract. Such receipts or payments are
known as variation margins and are recorded by the Fund as unrealized gains
or 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.
H. Trust Expenses:
Expenses incurred by the Fund with respect to any two or more Series are
allocated in proportion to the net assets of each Series, except where
allocation of direct expense to each Series or an alternative allocation
method can be more fairly made.
Note 3--Investment Advisory Fees and Related Party Transactions
As compensation for its services to the Fund, the Adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect wholly-owned subsidiary of Phoenix Home
Life Insurance Company ("PHL") is entitled to a fee, based upon the following
annual rates as a percentage of the average daily net assets of each separate
Series.
<TABLE>
<CAPTION>
Rate for Rate for Rate for excess
first next over $500
Series $250 million $250 million million
------------- ------------- ------------ ---------------
<S> <C> <C> <C>
Money Market .40% .35% .30%
Bond .50 .45 .40
Balanced .55 .50 .45
Total Return .60 .55 .50
Growth .70 .65 .60
International .75 .70 .65
</TABLE>
The investment adviser for the Real Estate Series is Phoenix Realty
Securities, Inc. ("PRS"). PRS is an indirect wholly-owned subisidary of PHL.
For its services, PRS is entitled to a fee at an annual rate of 0.75% of the
average daily net assets for the first $1 billion.
Pursuant to a Sub-Advisory Agreement with the Fund, PRS delegates certain
investment decisions and research functions to ABKB/LaSalle Securities
Limited Partnership ("ABKB") for which ABKB is paid a fee by PRS equal to
0.45% of the average daily net assets of the Real Estate Securities Portfolio
for the first $1 billion.
Each Series (except the International and Real Estate Securities Series) pays
a portion or all of its other operating expenses (not including management
fee, interest, taxes, brokerage fees and commissions), up to .15% of its
average net assets.
2-33
<PAGE>
The International and Real Estate Series pay other operating expenses up to
.40% and .25%, respectively, of its average net assets. Expenses above these
limits are paid by the Adviser.
As Financial Agent to the Fund and to each Series, PHL receives a fee at an
annual rate of 0.06% of the average daily net assets for bookkeeping,
administrative and pricing services.
Note 4--Purchases and Sales of Securities
Purchases and sales of securities during the period ended June 30, 1995
(excluding U.S. Government securities, short-term securities, options written
and forward currency contracts) aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
----------- ------------
<S> <C> <C>
Bond Series $ 48,830,632 $ 48,476,771
Growth Series 668,689,990 524,028,376
Total Return Series 186,491,842 135,408,096
International Series 143,033,988 139,108,711
Balanced Series 118,844,229 112,819,252
Real Estate Series 5,731,116 135,281
</TABLE>
There were no purchases or sales of such securities in the Money Market
Series.
Purchases and sales of long-term U.S. Government securities during the period
ended June 30, 1995 aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
----------- ------------
<S> <C> <C>
Bond Series $31,337,265 $20,019,365
Total Return Series 14,589,492 20,055,281
Balanced Series 75,264,841 57,703,543
</TABLE>
There were no purchases or sales of long-term U.S. Government securities in
the Money Market, Growth, International, or Real Estate Series.
Note 5--Forward Currency Contracts
At June 30, 1995, the International Series had entered into various forward
currency contracts which contractually obligate the Series to deliver
currencies at specified dates. Open contracts were as follows:
<TABLE>
<CAPTION>
Net
In Unrealized
Contracts Exchange Settlement Appreciation
to Deliver For Date Value (Depreciation)
----------- ---------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
AUD 1,500,000 USD 1,089,000 8/1/95 $1,060,431 $ 28,569
FRF 33,500,000 USD 6,473,180 9/1/95 6,884,994 (411,814)
YEN 566,000,000 USD 6,606,747 9/1/95 6,723,288 (116,541)
SEK 13,700,000 USD 1,877,715 7/3/95 1,881,109 (3,394)
SEK 35,300,000 USD 4,822,734 8/1/95 4,838,065 (15,331)
USD 1,863,819 SEK 13,700,000 7/3/95 1,881,109 17,290
USD 1,793,405 SEK 13,200,000 8/1/95 1,809,135 15,730
------------
$(485,491)
============
</TABLE>
AUD = Australian Dollar
FRF = French Franc
SEK = Swedish Krona
USD = U.S. Dollar
YEN = Japanese Yen
2-34
<PAGE>
Note 6--Capital Loss Carryforwards
As of the most recent tax year end, the following Series of the Fund have
available for federal income tax purposes unused capital losses that may be
used to offset capital gains generated in subsequent years:
Expiring in
2002
--------------
Bond $1,602,485
Balanced 3,251,289
In addition, under current tax law, capital losses realized after October 31,
1994 may be deferred and treated as occurring on the first day of the
following tax year. For the tax year ended December 31, 1994, the following
Series of the Fund have elected to defer losses occurring between November 1,
1994 and December 31, 1994:
Capital
losses
deferred
-------------
International $4,037,301
Balanced 3,047,431
2-35
<PAGE>
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Board of Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Leroy Keith, Jr.
Philip R. McLoughlin
James M. Oates
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Patricia A. Bannan, Vice President
Curtiss O. Barrows, Vice President
Mary E. Canning, Vice President
James M. Dolan, Vice President
Jeanne H. Dorey, Vice President
Jeanne T. Hanley, Vice President
Michael E. Haylon, Vice President
Christopher J. Kelleher, Vice President
John J. McDonald, Vice President
Robert J. Milnamow, Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
Amy L. Robinson, Vice President
Barbara Rubin, Vice President
Leonard J. Saltiel, Vice President
Dorothy J. Skaret, Vice President
James D. Wehr, Vice President
John T. Wilson, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
Phoenix Investment Counsel, Inc.
One American Row
Hartford, Connecticut 06115
Investment Adviser (Real Estate)
Phoenix Realty Securities, Inc.
One American Row
Hartford, CT 06115-2520
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
International Series Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Real Estate Series Custodian
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Legal Counsel
Jorden Burt & Berenson
Suite 400 East
1025 Thomas Jefferson Street N.W.
Washington, D.C. 20007-0805
- -------------------------------------------------------------------------------
This report is not authorized for distribution to prospective investors in
The Phoenix Edge Series Fund unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge and other
pertinent information.
- -------------------------------------------------------------------------------
<PAGE>
[Graphic--picture of squirrel]
Wanger International Small Cap Advisor
Semi-Annual Report
June 30, 1995
<PAGE>
Wanger International Small Cap Advisor Statement of Investments
(Unaudited) June 30, 1995
Number of Shares Value
- --------------------------------------------------------
Common Stocks and Other Equity-Like
Securities--01.4%
Europe--42.8%
- --------------------------------------------------------
Austria--1.4%
- --------------------------------------------------------
200 BWT $ 24,245
Water Filtration Systems
Finland--2.7%
- --------------------------------------------------------
2,300 Tietotehdas, Cl. B 47,855
Computer Services/Consulting
Norway--4.3%
- --------------------------------------------------------
2,500 Elkjoep Norge 49,878
Consumer Electronics Retailer
2,000 Maritime Group 24,980
Off-shore Oil Extraction Equipment
& Services
- --------------------------------------------------------
74,858
Sweden--3.3%
- --------------------------------------------------------
5,250 Frontec, Series B (b) 56,595
Computer Consulting and Software
France--2.9%
- --------------------------------------------------------
300 Guilbert 30,077
Office Supplies Distributor
300 Spir Communication 21,042
Newspaper Publisher & Printer
- --------------------------------------------------------
51,119
United Kingdom/Ireland--15.0%
- --------------------------------------------------------
2,000 International CableTel (b) 65,000
Cable TV & Telephone System
12,000 Serco Group 58,797
Facilities Management
15,000 Body Shop International 32,453
Natural Cosmetics and Toiletries
7,000 Oriflame International 32,294
Natural Cosmetics
8,000 N. Brown Group 29,399
Mail Order Women's Clothing
20,000 City Centre Restaurants 28,158
Fast Food Restaurants
25,000 Aran Energy (b) 15,710
North Sea Oil and Gas Producer (Ireland)
- --------------------------------------------------------
261,811
Switzerland--5.3%
- --------------------------------------------------------
30 Suedelektra Holding 33,851
Diversified Pool of Commodity-Related
Projects
40 Zehnder Holding 29,164
Specialty Radiators
70 Phoenix Mecano 28,861
Electrical Equipment Enclosures
- --------------------------------------------------------
91,876
Italy--7.9%
- --------------------------------------------------------
11,000 Brembo (b) $ 80,131
Disk Brake Systems Manufacturer
16,000 Costa Crociere Ord. 32,137
Cruise Ship Line
12,000 Tecnost 25,510
ATM, Lotto, Toll Collection Equipment
- --------------------------------------------------------
137,778
- --------------------------------------------------------
Europe--Total 746,137
Asia--39.7%
- --------------------------------------------------------
Hong Kong--10.0%
- --------------------------------------------------------
40,000 Varitronix International 70,044
LCD Manufacturer
64,000 JCG Holdings Ltd. 42,182
Consumer Finance
48,000 Li and Fung 35,978
Regional Sourcer of Consumer Goods
40,000 Chen Hsong Holdings 25,459
Plastic Injection Machines
- --------------------------------------------------------
173,663
Japan--5.0%
- --------------------------------------------------------
600 Autobacs Seven 58,304
Retail Autoparts Distributor
1,000 Hokuto 28,386
Mushroom Grower
- --------------------------------------------------------
86,690
Malaysia--9.4%
- --------------------------------------------------------
8,000 O.Y.L. Industries 57,260
Air Conditioner Manufacturer
15,000 Malaysian Assurance Alliance 54,143
Insurance
20,000 Sistem Televisyen Malaysia 53,322
Television Franchise
- --------------------------------------------------------
164,725
Indonesia/Philippines--8.5%
- --------------------------------------------------------
90,000 Universal Robina 45,811
Branded Foods
90,000 Suba Indah 44,454
Beverage and Food Manufacturer
28,900 Pilipino Telephone (b) 27,946
Leading Cellular Franchise in Philippines
700 Philippine Savings Bank (b) 21,378
Banking
1,500 Modern Photo Film 8,150
Fuji Film Distributor
- --------------------------------------------------------
147,739
Singapore--6.8%
- --------------------------------------------------------
50,000 Venture Manufacturing Warrants
7/26/99 (b) 45,796
Electronics Contract Manufacturer
17,000 Clipsal Industries 39,270
Electrical Components Manufacturer
3-2
<PAGE>
Wanger International Small Cap Advisor Statement of Investments
(Unaudited) June 30, 1995
Number of Shares Value
- --------------------------------------------------------
20,000 Genting International $ 34,200
Cruise Line
- --------------------------------------------------------
119,266
- --------------------------------------------------------
Asia--Total 692,083
Latin America--10.5%
- --------------------------------------------------------
Mexico--6.4%
- --------------------------------------------------------
3,000 Bufete Industrial 48,750
Engineering and Construction
12,000 Nadro, Series L 36,474
Pharmaceutical Distributor
3,000 Grupo Radio Centro 27,375
Radio Stations and Networks
- --------------------------------------------------------
112,599
Brazil--2.0%
- --------------------------------------------------------
40,000 Brazilian Smaller Companies
Warrants (b) 35,000
Closed-End Fund
Chile--2.1%
- --------------------------------------------------------
1,000 Genesis Chile Fund 36,500
Closed-End Fund
- --------------------------------------------------------
Latin America--Total 184,099
Other Countries--8.4%
- --------------------------------------------------------
Australia / New Zealand--8.4%
- --------------------------------------------------------
30,000 Just Jeans Holdings $ 40,408
Jeans & Fashion Retail Stores
8,000 PDL Holdings 40,099
Electrical Equipment Manufacturer and
Distributor (New Zealand)
100,000 Command Petroleum Holdings (b) 24,812
Oil and Gas Exploration
20,000 Burswood Property Trust 20,701
Perth Casino
30,000 Casino's Austria International (b) 20,204
International Casino Operator
- --------------------------------------------------------
Other--Total 146,224
Total Common Stocks and Other
Equity-Like Securities--101.4% 1,768,543
- --------------------------------------------------------
(Cost: $1,727,699)
Cash and Other Assets Less Liabilities--(1.4%) (25,129)
- --------------------------------------------------------
Total Net Assets--100% 1,743,414
- --------------------------------------------------------
Notes to Statement of Investments:
a) At June 30, 1995, for federal income tax purposes cost of investments was
$1,727,699 and net unrealized appreciation was $40,844, consisting of gross
unrealized appreciation of $85,023 and gross unrealized depreciation of
$44,179.
b) Non-income producing security.
Wanger International Small Cap Advisor Portfolio Diversification
June 30, 1995
- --------------------------------------------------------
Value Percent
- --------------------------------------------------------
Information $ 487,188 27.9%
- --------------------------------------------------------
Health Care 61,933 3.5
- --------------------------------------------------------
Consumer Goods and Services 664,269 38.1
- --------------------------------------------------------
Finance 281,851 16.2
- --------------------------------------------------------
Industrial Goods and Services 207,800 11.9
- --------------------------------------------------------
Energy and Minerals 65,502 3.8
- --------------------------------------------------------
Total Common Stocks and Other
Equity-Like Securities $ 1,768,543 101.4%
- --------------------------------------------------------
Cash and Other Assets less
Liabilities (25,129) (1.4)
- --------------------------------------------------------
Total Net Assets $ 1,743,414 100.0%
- --------------------------------------------------------
3-3
<PAGE>
Wanger International Small Cap Advisor Statement of Assets and Liabilities
(Unaudited) June 30, 1995
<TABLE>
<S> <C> <C>
Assets
Investments, at value (cost: $1,727,699) $1,768,543
Cash 190,685
Organization costs 96,668
Receivable for:
Securities sold $ 25,768
Dividends and interest 6,953
Fund shares sold 28,455 61,176
- ---------------------------------------------------------------------------------------------------------------------
Total assets 2,117,072
Liabilities and Net Assets
Payable for:
Securities purchased 274,061
Amount owed to advisor 79,178
Other 20,419
Total liabilities 373,658
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $1,743,414
- ---------------------------------------------------------------------------------------------------------------------
Fund shares outstanding 158,924
- ---------------------------------------------------------------------------------------------------------------------
Pricing of Shares
Net asset value, offering price and redemption price per share $ 10.97
- ---------------------------------------------------------------------------------------------------------------------
Analysis of Net Assets
Excess of amounts received from issuance of shares over amounts paid on redemptions of shares $1,683,420
Accumulated net realized gain on sales of investments and foreign currency transactions 14,796
Unrealized appreciation of investments and foreign currency transactions 40,873
Undistributed net investment income 4,325
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $1,743,414
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3-4
<PAGE>
Wanger International Small Cap Advisor Statement of Operations (Unaudited)
June 30, 1995
Inception (May 3, 1995) through June 30, 1995
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $ 7,208
Interest 46
- ---------------------------------------------------------------------------------------------------------------------
Total investment income 7,254
Expenses:
Investment advisory fee 1,904
Custodian fees and expenses 2,207
Legal and audit fees and expenses 10,764
Reports to shareholders 1,250
Organization expense 3,332
Trustees' fees 2,660
Insurance 1,378
Other expenses 256
- ---------------------------------------------------------------------------------------------------------------------
Total expenses 23,751
Less reimbursement of expenses (20,822)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses 2,929
Net investment income 4,325
Net realized and unrealized gain on investments:
Net realized gain on sales of investments 14,619
Net realized gain on foreign currency transactions 177
Net change in unrealized appreciation 40,873
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 55,669
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 59,994
- ---------------------------------------------------------------------------------------------------------------------
Wanger International Small Cap Advisor Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------------
From operations:
Net investment income $ 4,325
Net realized gain on sales of investments 14,619
Net realized gain on foreign currency transactions 177
Net change in unrealized appreciation 40,873
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 59,994
From Fund share transactions:
Proceeds from shares sold 2,031,702
Payments for shares redeemed (473,964)
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Fund share transactions 1,557,738
Total increase in net assets 1,617,732
Net Assets:
Beginning of period (inception May 3, 1995) 125,682
- ---------------------------------------------------------------------------------------------------------------------
End of period (including undistributed net investment income of $4,325) $1,743,414
</TABLE>
See accompanying notes to financial statements.
3-5
<PAGE>
Wanger International Small Cap Advisor Financial Highlights (Unaudited)
June 30, 1995
Inception (May 3, 1995) through June 30, 1995
- -----------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
Income From Investment Operations
Net investment income .03
Net realized and unrealized gain on investments .94
- -----------------------------------------------------------------------------
Total from investment operations .97
Net Asset Value, end of period $ 10.97
- -----------------------------------------------------------------------------
Total Return 9.70%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) 2.00%*
Ratio of net investment income to average net assets (a) 2.95%*
Portfolio turnover rate 40%*
Net assets at end of period $1,743,414
- -----------------------------------------------------------------------------
* Annualized
a) The Fund was reimbursed by the Advisor for certain expenses from May 3, 1995
through June 30, 1995. Without the reimbursement, the ratio of expenses to
average net assets and the ratio of net investment income to average net
assets would have been been 12.91% and (7.95)%, respectively.
See accompanying notes to financial statements.
3-6
<PAGE>
Wanger International Small Cap Advisor Notes to financial statements
June 30, 1995
1. Significant Accounting Policies
Security valuation
Investments are stated at current value. Securities traded on securities
exchanges or in over-the-counter markets in which transaction prices are
reported are valued at the last sales price at the time of valuation, or lacking
any reported sales on that day, at the midpoint of the most recent bid and
offer. Money market instruments having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis. Securities for which
quotations are not readily available and any other assets are valued at a fair
value as determined in good faith by the Board of Trustees.
Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Fund. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and on long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading by dividing the
total value of the Fund's investments and other assets, less liabilities, by the
number of Fund shares outstanding.
Federal income taxes, dividends and distributions to shareholders
It is the Fund's policy to comply with the special provisions of the Internal
Revenue Code available to regulated investment companies and, in the manner
provided therein, to distribute all of its taxable income, as well as any net
realized gain on sales of investments and foreign currency transactions
reportable for federal income tax purposes.
Dividends and distributions payable to its shareholders are recorded by
the Fund on the ex-dividend date.
2. Transactions with Affiliates
The Fund's investment advisor, Wanger Asset Management, L.P., ("WAM") furnishes
continuing investment supervision to the Fund and is responsible for overall
management of the Fund's business affairs. For its services WAM receives a fee
paid monthly at the annual rate of 1.3% of the net asset value of the Fund up to
$100 million, 1.2% of the net asset value in excess of $100 million and up to
$250 million and 1.1% of the net asset value in excess of $250 million.
The investment advisory agreement also provides that WAM will reimburse the
Fund to the extent that expenses exceed 2% of average net assets. For the period
ended June 30, 1995, WAM reimbursed the Fund $20,822.
Certain officers and trustees of the Trust are also principals of WAM. The
Trust makes no direct payments to its officers and trustees who are affiliated
with WAM. The Fund incurred trustees' fees and expenses of $2,660 in 1995 to
trustees not affiliated with WAM.
WAM advanced $100,000 in connection with the organization and initial
registration of the Fund. These costs are being amortized and reimbursed to WAM
over the period May, 1995 through April, 2000.
3. Fund Share Transactions
Proceeds and payments on Fund shares as shown in the statement of changes in
net assets are in respect of the following numbers of shares:
Period ended 6/30/95
- --------------------------------------------------------
Shares sold 190,897
Less shares redeemed 44,541
- --------------------------------------------------------
Net increase in shares outstanding 146,356
- --------------------------------------------------------
4. Investment transactions
Period ended 6/30/95
- --------------------------------------------------------
Investment securities
(excluding money market instruments):
Purchases $1,800,251
Proceeds from sales 87,348
- --------------------------------------------------------
3-7
<PAGE>
Wanger International Small Cap Advisor
Trustees Fred D. Hasselbring James A. Star
Terence M. Hogan Ralph Wanger
Charles P. McQuaid Leah J. Zell
P. Michael Phelps
Officers Ralph Wanger, President Merrillyn J. Kosier,
Vice President and Secretary
Charles P. McQuaid, Robert M. Slotky,
Senior Vice President Vice President and Treasurer
Terence M. Hogan,
Vice President
Leah J. Zell, Vice President
Transfer Agent, State Street Bank and Trust Company
Dividend Attention: Wanger Advisors Trust
Disbursing P.O. Box 8502
Agent and Boston, Massachusetts 02266-8502
Custodian 1-800-962-1585
Investment Wanger Asset Management, L.P.
Advisor 227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-4-wanger
(1-800-492-6437)
Legal Counsel Bell, Boyd & Lloyd
Chicago, Illinois
This report, including the unaudited financial statements, is submitted for the
general information of the shareholders of the Fund. This report is not
authorized for distribution unless preceded or accompanied by a prospectus.
3-8
<PAGE>
[Graphic--picture of squirrel]
Wanger U.S. Small Cap Advisor
Semi-Annual Report
June 30, 1995
<PAGE>
Wanger U.S. Small Cap Advisor Statement of Investments (Unaudited)
June 30, 1995
Number of Shares Value
- --------------------------------------------------------
Common Stocks and Other Equity-Like
Securities--95.0%
- --------------------------------------------------------
Information Group--26.1%
- --------------------------------------------------------
Broadcasting and CATV--6.0%
4,000 International Family
Entertainment (b) $ 63,000
4,000 Jones Intercable, Cl. A (b) 60,000
2,000 Sinclair Broadcast Group (b) 56,000
1,500 Silver King Communications (b) 24,375
- --------------------------------------------------------
203,375
Mobile Communications--6.6%
3,000 Mobile Telecommunication
Technologies (b) 82,125
2,400 Vanguard Cellular Systems (b) 57,600
1,500 Cellular Communications of
Puerto Rico (b) 45,938
7,000 Shared Technologies (b) 35,875
- --------------------------------------------------------
221,538
Software--3.3%
3,000 Business Records Corporation (b) 111,000
Computer Game Software--2.2%
3,000 Sierra On-Line (b) 75,000
Computer Systems--3.6%
2,000 Solectron (b) 68,250
4,000 ACT Manufacturing (b) 52,000
- --------------------------------------------------------
120,250
Distribution--1.8%
6,000 Bell Microproducts (b) 60,000
Components and Peripherals--2.6%
3,000 Planar Systems (b) 66,750
700 In Focus Systems (b) 18,900
- --------------------------------------------------------
85,650
- --------------------------------------------------------
Information Group--Total 876,813
Health Care Group--4.6%
- --------------------------------------------------------
Biotechnology/Drug Delivery--2.9%
10,200 North American Biologicals (b) 95,625
Medical Equipment--0.4%
1,000 Respironics (b) 14,250
Hospital/Laboratory Supplies--1.3%
1,100 Sybron International (b) 43,862
- --------------------------------------------------------
Health Care Group--Total 153,737
- --------------------------------------------------------
Consumer Goods and Services Group--22.4%
Retail--3.0%
2,000 Mikasa (b) $ 29,750
3,500 Best Products (b) 28,219
5,000 Little Switzerland (b) 21,875
1,100 Quality Food Centers 22,000
- --------------------------------------------------------
101,844
Entertainment and Leisure--9.7%
8,300 Station Casinos (b) 143,175
12,000 Monarch Casino & Resort (b) 63,000
1,900 GC Companies (b) 62,225
3,500 Alliance Entertainment (b) 32,812
1,100 Anchor Gaming (b) 24,475
- --------------------------------------------------------
325,687
Food--1.8%
5,000 Au Bon Pain (b) 60,625
Manufacturers--7.9%
5,000 Liz Claiborne 106,250
4,000 Newell Companies 98,000
1,400 St. John Knits 62,825
- --------------------------------------------------------
267,075
- --------------------------------------------------------
Consumer Group--Total 755,231
Finance Group--11.8%
- --------------------------------------------------------
Savings & Loans--3.8%
4,800 Peoples Bank Bridgeport 79,200
1,800 Bell Bancorp 50,850
- --------------------------------------------------------
130,050
Insurance--0.6%
1,000 Transnational Re (b) 20,062
Money Management--2.3%
3,400 SEI Corporation 76,500
Credit Cards--2.4%
3,500 National Data 80,938
Other--2.7%
5,000 Aames Financial 90,625
- --------------------------------------------------------
Finance Group--Total 398,175
4-2
<PAGE>
Wanger U.S. Small Cap Advisor Statement of Investments (Unaudited)
June 30, 1995
Number of Shares Value
- --------------------------------------------------------
Industrial Goods and Services--16.7%
- --------------------------------------------------------
Machinery--5.9%
14,000 Stevens International, Cl. A (b)$ 91,000
4,000 Atchison Casting (b) 57,500
1,100 Logicon 48,950
- --------------------------------------------------------
197,450
Furniture and Textiles--4.2%
3,000 Unifi 72,000
6,000 Lilly Industries, Cl. A 70,500
- --------------------------------------------------------
142,500
Services--6.6%
3,000 Western Water (b) 81,000
10,000 AG Services of America (b) 78,438
5,800 Thomas Group (b) 60,900
- --------------------------------------------------------
220,338
- --------------------------------------------------------
Industrial Group--Total 560,288
Energy and Minerals Group--13.4%
- --------------------------------------------------------
Cogeneration--7.2%
7,000 The AES Corporation 133,000
8,000 Thermo Ecotek (b) 109,000
- --------------------------------------------------------
242,000
Oil & Gas Producers--3.4%
6,000 Abraxas Petroleum (b) 52,500
4,000 Tesoro Petroleum (b) 40,000
1,000 Devon Energy 21,500
- --------------------------------------------------------
114,000
Refining/Marketing--0.9%
3,000 NGC Corporation $ 31,500
Oil Services--1.9%
2,500 Landmark Graphics (b) 63,750
- --------------------------------------------------------
Energy Group--Total 451,250
Total Common Stocks and Other
Equity-Like Securities--95.0% 3,195,494
- --------------------------------------------------------
(Cost: $2,996,758)
Cash and Other Assets Less Liabilities--5.0% 168,096
- --------------------------------------------------------
Total Net Assets--100% 3,363,590
Notes to Statement of Investments:
a) At June 30, 1995, for federal income tax purposes cost of investments was
$2,996,758 and net unrealized appreciation was $198,736, consisting of gross
unrealized appreciation of $219,820 and gross unrealized depreciation of
$21,084.
b) Non-income producing security.
4-3
<PAGE>
Wanger U.S. Small Cap Advisor Statement of Assets and Liabilities (Unaudited)
June 30, 1995
<TABLE>
<S> <C> <C>
Assets
Investments, at value (cost: $2,996,758) $ 3,195,494
Cash 552,602
Organization costs 96,668
Receivable for:
Fund shares sold $ 157,518
Securities sold 5,400
Dividends and interest 736 163,654
- --------------------------------------------------------------------------------------------------------------------------
Total assets 4,008,418
Liabilities and Net Assets
Payable for:
Securities purchased 543,641
Amount owed to advisor 81,911
Other 19,276
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities 644,828
Net assets applicable to Fund shares outstanding $ 3,363,590
- --------------------------------------------------------------------------------------------------------------------------
Fund shares outstanding 312,181
Pricing of Shares
Net asset value, offering price and redemption price per share $ 10.77
- --------------------------------------------------------------------------------------------------------------------------
Analysis of Net Assets
Excess of amounts received from issuance of shares over amounts paid on redemptions of shares $ 3,167,212
Undistributed net realized gain on sales of investments 1,379
Unrealized appreciation of investments 198,736
Net investment loss (3,737)
- --------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $ 3,363,590
- --------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
4-4
<PAGE>
Wanger U.S. Small Cap Advisor Statement of Operations (Unaudited)
June 30, 1995
Inception (May 3, 1995) through June 30, 1995
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $ 736
Interest 46
- ---------------------------------------------------------------------------------------------------------------------
Total investment income 782
Expenses:
Investment advisory fee 2,259
Legal and audit fees and expenses 11,488
Reports to shareholders 1,250
Organization expense 3,332
Trustees' fees 2,660
Insurance 1,378
Other expenses 241
- ---------------------------------------------------------------------------------------------------------------------
Total Expenses 22,608
Less reimbursement of expenses (18,089)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses 4,519
Net investment loss (3,737)
Net realized and unrealized gain on investments:
Net realized gain on sales of investments 1,379
Net change in unrealized appreciation 198,736
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 200,115
Net increase in net assets resulting from operations $ 196,378
Wanger U.S. Small Cap Advisor Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------------
From operations:
Net investment loss $ (3,737)
Net realized gain on sales of investments 1,379
Net change in unrealized appreciation 198,736
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 196,378
From Fund share transactions:
Proceeds from shares sold 3,238,128
Payments for shares redeemed (196,598)
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Fund share transactions 3,041,530
Total increase in net assets 3,237,908
Net assets:
Beginning of period (inception May 3, 1995) 125,682
- ---------------------------------------------------------------------------------------------------------------------
End of period (including net investment loss of $3,737) $ 3,363,590
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
4-5
<PAGE>
Wanger U.S. Small Cap Advisor Financial Highlights (Unaudited)
June 30, 1995
Inception (May 3, 1995) through June 30, 1995
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
Income From Investment Operations
Net investment loss (.01)
Net realized and unrealized gain on investments 0.78
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.77
Net Asset Value, end of period $ 10.77
- ----------------------------------------------------------------------------------------------------------------------
Total Return 7.70%
Ratios / Supplemental Data:
Ratio of expenses to average net assets (a) 2.00%*
Ratio of net investment loss to average net assets (a) (1.65%)*
Portfolio turnover rate 5%*
Net assets at end of period $ 3,363,590
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
a) The Fund was reimbursed by the Advisor for certain expenses from May 3, 1995
through June 30, 1995. Without the reimbursement, the ratio of expenses to
average net assets and the ratio of net investment loss to average net
assets would have been 7.74% and (7.39%), respectively.
See accompanying notes to financial statements
4-6
<PAGE>
Wanger U.S. Small Cap Advisor Notes to financial statements
June 30, 1995
1. Significant Accounting Policies
Security valuation
Investments are stated at current value. Securities traded on securities
exchanges or in over-the-counter markets in which transaction prices are
reported are valued at the last sales price at the time of valuation, or lacking
any reported sales on that day, at the midpoint of the most recent bid and
offer. Money market instruments having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis. Securities for which
quotations are not readily available and any other assets are valued at a fair
value as determined in good faith by the Board of Trustees.
Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis and includes amortization of
discounts on money market instruments and on long-term debt instruments when
required for federal income tax purposes. Realized gains and losses from
security transactions are reported on an identified cost basis.
Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading by dividing the
total value of the Fund's investments and other assets, less liabilities, by the
number of Fund shares outstanding.
Federal income taxes, dividends and distributions to shareholders
It is the Fund's policy to comply with the special provisions of the Internal
Revenue Code available to regulated investment companies and, in the manner
provided therein, to distribute all of its taxable income, as well as any net
realized gain on sales of investments and foreign currency transactions
reportable for federal income tax purposes.
Dividends and distributions payable to its shareholders are recorded by
the Fund on the ex-dividend date.
2. Transactions with Affiliates
The Fund's investment advisor, Wanger Asset Management, L.P., ("WAM") furnishes
continuing investment supervision to the Fund and is responsible for overall
management of the Fund's business affairs. For its services WAM receives a fee
paid monthly at the annual rate of 1.0% of the net asset value of the Fund up to
$100 million, 0.95% of the net asset value in excess of $100 million and up to
$250 million and 0.90% of the net asset value in excess of $250 million.
The investment advisory agreement also provides that WAM will reimburse the
Fund to the extent that expenses exceed 2% of average net assets. For the period
ended June 30, 1995, WAM reimbursed the Fund $18,089.
Certain officers and trustees of the Trust are also principals of WAM. The
Trust makes no direct payments to its officers and trustees who are affiliated
with WAM. The Fund incurred trustees' fees and expenses of $2,660 in 1995 to
trustees not affiliated with WAM.
WAM advanced $100,000 in connection with the organization and initial
registration of the Fund. These costs are being amortized and reimbursed to WAM
over the period May, 1995 through April, 2000.
3. Fund Share Transactions
Proceeds and payments on Fund shares as shown in the statement of changes in
net assets are in respect of the following numbers of shares:
Period ended 6/30/95
- --------------------------------------------------------
Shares sold 318,410
Less shares redeemed 18,797
- --------------------------------------------------------
Net increase in shares outstanding 299,613
- --------------------------------------------------------
4. Investment transactions
Period ended 6/30/95
- --------------------------------------------------------
Investment securities
(excluding money market instruments):
Purchases $3,011,955
Proceeds from sales 16,576
- --------------------------------------------------------
4-7
<PAGE>
Wanger U.S. Small Cap Advisor
Trustees Fred D. Hasselbring James A. Star
Terence M. Hogan Ralph Wanger
Charles P. McQuaid Leah J. Zell
P. Michael Phelps
Officers Ralph Wanger, President Merrillyn J. Kosier,
Vice President and Secretary
Charles P. McQuaid, Robert M. Slotky,
Senior Vice President Vice President and Treasurer
Terence M. Hogan,
Vice President
Leah J. Zell, Vice President
Transfer Agent, State Street Bank and Trust Company
Dividend Attention: Wanger Advisors Trust
Disbursing P.O. Box 8502
Agent and Boston, Massachusetts 02266-8502
Custodian 1-800-962-1585
Investment Wanger Asset Management, L.P.
Advisor 227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-4-wanger
(1-800-492-6437)
Legal Counsel Bell, Boyd & Lloyd
Chicago, Illinois
This report, including the unaudited financial statements, is submitted for the
general information of the shareholders of the Fund. This report is not
authorized for distribution unless preceded or accompanied by a prospectus.
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 942
Greenfield, Massachusetts 01302-0942
P-726 (8/95)
Phoenix Home Life
(recycle logo) Printed on recycled paper using soybean ink
(C) 1995 Phoenix Home Life Mutual Insurance Company
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