Semi-Annual Report
June 30, 1996
The Phoenix Edge Series Fund
<PAGE>
MONEY MARKET SERIES
Over this six-month reporting period, Phoenix Edge Money Market Series
produced solid results. As of June 30, 1996, the Fund's current yield was
4.86%. This compares favorably with the 4.72% average yield of taxable money
market funds reported by Donoghue's Money Fund Report. The current yield is a
seven-day annualized yield computed by dividing the average net income earned
per share during the seven-day period preceding the date of calculation by
the average daily net asset value per share for the same period, with
resulting figure multiplied by 365.
The consensus outlook for interest rates changed dramatically over the
last six months. In January, the Federal Reserve cut the federal funds rate
from 5.50% to 5.25% in an effort to stimulate what was believed to be a
sluggish U.S. economy. Although it was widely anticipated that the Fed would
need to lower rates again during the first quarter, a surprisingly strong
February employment report provided conflicting evidence about the economy's
condition.
Moving into second quarter, additional data continued to accumulate
supporting the argument that the economy was not nearly as weak as the
financial markets had initially assumed. Most recently, statistics have
indicated that manufacturing activity, consumer spending and job growth have
all picked up dramatically. This upbeat economic news pushed short-term
interest rates up modestly. As of June 30, 1996, the yield on the widely
watched 90-Day Treasury Bill has climbed to 5.20%, representing a 13
basis-point jump year-to-date.
Looking ahead, many on Wall Street are now expecting that the Fed will
raise short-term rates in an attempt to slow down the pace of economic growth
and curb any threat of rising inflation. Since the Central Bank's actions are
often difficult to predict over the short-term, Phoenix Edge Money Market
Fund continues to be heavily weighted in floating-rate securities. This type
of investment offers attractive yields and some protection if interest rates
should rise over the near term. As always, we will continue to focus on high
credit quality assets for the Fund and carefully monitor the short-term
markets for attractive investment opportunities.
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
FACE
VALUE INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
------- -------------------------------------------------------------- ------- -------- -----------
<S> <C> <C> <C> <C>
U.S. TREASURY BILLS--1.9%
$2,000 U.S. Treasury Bills 4.80% 02/06/97 $ 1,941,333
-----------
TOTAL U.S. TREASURY BILLS 1,941,333
----------
U.S. TREASURY NOTES--2.9%
3,000 U.S. Treasury Notes 6.88 02/28/97 3,033,846
-----------
TOTAL U.S. TREASURY NOTES 3,033,846
----------
FEDERAL AGENCY SECURITIES--11.1%
2,000 Federal Home Loan Banks 5.02 07/24/96 1,993,586
2,570 Federal National Mortgage Assoc. 4.77 08/16/96 2,554,336
3,500 Federal Home Loan Banks 5.75 10/18/96 3,500,000
1,500 Federal Home Loan Banks 5.27 02/28/97 1,500,000
2,000 Federal Farm Credit Banks 5.40 04/01/97 1,998,298
-----------
TOTAL FEDERAL AGENCY SECURITIES 11,546,220
----------
RESET
DATE
--------
FEDERAL AGENCY SECURITIES--VARIABLE--22.3% (b)
1,500 Federal Farm Credit Banks (final maturity 02/24/97) 5.51 07/01/96 1,499,813
4,500 Federal Farm Credit Banks (final maturity 07/24/00) 5.54 07/01/96 4,502,062
4,000 Federal Farm Credit Banks (final maturity 10/02/96) 5.44 07/01/96 4,000,000
1,500 Federal Home Loan Banks (final maturity 01/14/97) 5.71 07/01/96 1,500,000
3,000 Student Loan Marketing Assoc. (final maturity 08/16/96) 5.61 07/01/96 3,000,000
1,600 Student Loan Marketing Assoc. (final maturity 10/30/97) 5.59 07/02/96 1,601,177
500 Student Loan Marketing Assoc. (final maturity 07/19/96) 5.39 07/02/96 500,000
1,500 Student Loan Marketing Assoc. (final maturity 11/10/98) 5.43 07/02/96 1,498,134
2,500 Student Loan Marketing Assoc. (final maturity 11/24/97) 5.41 07/02/96 2,500,000
1,000 Student Loan Marketing Assoc. (final maturity 02/22/99) 5.44 07/02/96 1,000,000
1,650 Federal National Mortgage Assoc. (final maturity 12/14/98) 5.52 09/14/96 1,647,782
-----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 23,248,968
----------
</TABLE>
See Notes to Financial Statements
2-2
<PAGE>
MONEY MARKET SERIES
<TABLE>
<CAPTION>
FACE STANDARD
VALUE & POOR'S INTEREST MATURITY
(000) DESCRIPTION RATING RATE DATE VALUE
------- -------------------------------------------- --------- ------- -------- -------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--61.5%
$4,685 Emerson Electric Co. A-1+ 5.55% 07/01/96 $ 4,685,000
2,265 Allied Signal, Inc. A-1 5.33 07/02/96 2,264,665
415 Bellsouth Telecommunications, Inc. A-1+ 5.35 07/02/96 414,938
1,220 Campbell Soup Co. A-1+ 5.28 07/03/96 1,219,642
2,920 Preferred Receivables Funding Corp. A-1 5.30 07/03/96 2,919,140
773 Preferred Receivables Funding Corp. A-1 5.35 07/08/96 772,196
1,118 Bellsouth Telecommunications, Inc. A-1+ 5.37 07/09/96 1,116,666
2,580 H.J. Heinz Co. A-1 5.30 07/10/96 2,576,582
3,269 Receivables Capital Corp. A-1 5.32 07/10/96 3,264,652
800 Allied Signal, Inc. A-1 5.37 07/11/96 798,807
4,010 Exxon Imperial U.S., Inc. A-1+ 5.26 07/12/96 4,003,555
665 Anheuser-Busch Companies, Inc. A-1+ 5.30 07/15/96 663,629
1,600 Merrill Lynch & Co., Inc. A-1+ 5.29 07/15/96 1,596,708
480 H.J. Heinz Co. A-1 5.33 07/16/96 478,934
3,400 TDK USA A-1+ 5.35 07/17/96 3,391,916
1,000 Beta Finance Corp. A-1+ 5.10 07/17/96 997,733
3,500 Coca-Cola Co. A-1+ 5.30 07/18/96 3,491,240
2,000 First Deposit Funding Trust A-1 5.35 07/19/96 1,994,650
819 H.J. Heinz Co. A-1 5.34 07/22/96 816,449
1,500 TDK USA A-1+ 5.35 07/22/96 1,495,319
2,500 E.I. du Pont de Nemours & Co. A-1+ 5.53 07/23/96 2,491,551
525 Preferred Receivables Funding Corp. A-1 5.40 07/23/96 523,268
2,760 General Re Corp. A-1+ 5.34 07/25/96 2,750,174
300 Preferred Receivables Funding Corp. A-1 5.40 07/25/96 298,920
1,630 Gannett Co. A-1 5.30 07/26/96 1,623,967
1,450 General Electric Capital MTN (b) A-1+ 5.41 07/26/96 1,450,121
375 H.J. Heinz Co. A-1 5.35 07/29/96 373,440
2,275 Kellogg Co. A-1+ 5.28 07/31/96 2,264,990
3,125 Bellsouth Telecommunications, Inc. A-1+ 5.35 08/05/96 3,108,746
2,060 General Re Corp. A-1+ 5.37 08/09/96 2,048,016
3,000 Warner-Lambert Co. A-1+ 4.82 08/20/96 2,979,917
2,800 General Electric Capital Corp. (b) A-1+ 5.49 08/22/96 2,800,224
1,810 Greenwich Funding Corp. A-1+ 5.40 09/09/96 1,790,995
500 Greenwich Funding Corp. A-1+ 5.45 10/15/96 491,975
-------------
TOTAL COMMERCIAL PAPER 63,958,725
-------------
TOTAL INVESTMENTS--99.7%
(Identified cost $103,729,092) 103,729,092(a)
Cash and receivables, less liabilities--0.3% 345,050
-------------
NET ASSETS--100.0% $104,074,142
=============
</TABLE>
(a) Federal Income Tax Information: At June 30, 1996, 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. The maturity dates shown reflect the next interest
rate reset dates.
See Notes to Financial Statements
2-3
<PAGE>
MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $103,729,092) $103,729,092
Cash 372,350
Receivable for fund shares sold 329,551
Interest receivable 399,507
------------
Total assets 104,830,500
------------
Liabilities
Payable for fund shares repurchased 671,928
Investment advisory fee 33,376
Trustees' fee 7,494
Financial agent fee 5,005
Accrued expenses 38,555
------------
Total liabilities 756,358
------------
Net Assets $104,074,142
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $104,046,493
Undistributed net investment income 27,649
------------
Net Assets $104,074,142
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 10,404,647
============
Net asset value and offering price per share $10.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
Investment Income
Interest $2,752,094
-----------
Total investment income 2,752,094
-----------
Expenses
Investment advisory fee 202,143
Financial agent fee 30,321
Printing 16,210
Professional 12,353
Custodian 12,095
Trustees 10,839
Miscellaneous 1,261
Expenses borne by investment adviser (5,358)
-----------
Total expenses 279,864
Custodian fees paid indirectly (1,918)
-----------
Net expenses 277,946
-----------
Net investment income 2,474,148
-----------
Net increase in net assets resulting from operations $2,474,148
===========
See Notes to Financial Statements
2-4
<PAGE>
MONEY MARKET SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------- --------------
<S> <C> <C>
From Operations
Net investment income $ 2,474,148 $ 5,070,409
------------ -------------
Net increase in net assets resulting from operations 2,474,148 5,070,409
------------ -------------
From Distributions to Shareholders
Net investment income (2,475,591) (5,055,199)
------------ -------------
Decrease in net assets from distributions to shareholders (2,475,591) (5,055,199)
------------ -------------
From Share Transactions
Proceeds from sales of shares (13,681,481 and 19,415,954 shares,
respectively) 136,814,810 194,159,531
Net asset value of shares issued from reinvestment of distributions
(247,559 and 505,520 shares, respectively) 2,475,593 5,055,199
Cost of shares repurchased (13,815,827 and 19,087,235 shares, respectively) (138,158,255) (190,872,354)
------------ -------------
Increase in net assets from share transactions 1,132,148 8,342,376
------------ -------------
Net increase in net assets 1,130,705 8,357,586
Net Assets
Beginning of period 102,943,437 94,585,851
------------ -------------
End of period (including undistributed net investment income of $27,649 and
$29,092, respectively) $ 104,074,142 $ 102,943,437
============ =============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months
Ended
6/30/96 Year ended December 31,
(Unaudited) 1995 1994 1993 1992 1991
----------------- ----------- ----------- ----------- ----------- ------------
<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 0.24(1) 0.56 0.38(1) 0.28(1) 0.35 0.58
--------------- --------- --------- --------- --------- -----------
Total from investment operations 0.24 0.56 0.38 0.28 0.35 0.58
--------------- --------- --------- --------- --------- -----------
Less distributions
Dividends from net investment income (0.24) (0.56) (0.38) (0.28) (0.35) (0.58)
--------------- --------- --------- --------- --------- -----------
Total distributions (0.24) (0.56) (0.38) (0.28) (0.35) (0.58)
--------------- --------- --------- --------- --------- -----------
Net asset value, end of period $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
=============== ========= ========= ========= ========= ===========
Total return 2.40%(4) 5.55% 3.77% 2.80% 3.50% 5.80%
Ratios/supplemental data:
Net assets, end of period (thousands) $104,074 $102,943 $94,586 $72,946 $69,962 $51,692
Ratio to average net assets of:
Operating expenses 0.55%(2)(3) 0.53%(2) 0.55% 0.55% 0.50% 0.50%
Net investment income 4.87%(3) 5.57% 3.85% 2.84% 3.49% 5.76%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.0001, $0.003 and $0.01 per share, respectively.
(2) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(3) Annualized
(4) Not annualized
See Notes to Financial Statements
2-5
<PAGE>
GROWTH SERIES
The first half of 1996 saw a continuation of the strong stock market
dating back to early 1995. Equities shrugged off rising interest rates and
mounting earnings concerns to move higher. Economic activity surprised most
analysts by growing at higher than expected rates--raising the specter of
higher inflation. Despite such concerns, the stock market held up very well
as it was pushed higher by increasing investor flows into equity mutual
funds.
Phoenix Edge Growth Series got off to a slow start in the beginning of the
year, but regained ground on the market during the second quarter. For the
six-month period ended June 30, 1996, the Fund returned 6.20%, compared with
the 10.24% return of the Standard & Poor's 500 Composite Stock Index for the
same period.* All of these figures assume reinvestment of any distributions,
but exclude the effect of sales charges.
The variance in performance returns stemmed primarily from market factors
early in the year. First, the Fund's cash reserves held performance back.
Although we correctly anticipated that interest rates would rise, they did
not have the adverse affect on stocks that we expected until well into the
second quarter. Performance was also hurt by technology-related holdings. A
number of technology issues that performed exceptionally well in 1995, sold
off in the beginning of this year as investors took profits.
On the positive side, the Fund benefited most from holdings in three
areas. Energy holdings, represented by our Energy Technology and Rising
Energy Demand themes, provided the greatest boost to overall results. We
expect to see a continuing positive earnings trend in energy as demand
strengthens worldwide. The beneficiaries are companies that have survived a
15-year downsizing--primarily energy services companies and well-placed oil
and natural gas producers. The second area of outperformance has been our
21st Century Medicine theme. Many areas within the health care sector will
continue to benefit from the strong demographic trend "Aging of America" for
years to come. Third, our Retail Revival theme, as represented by a number of
leading retail stocks, aided results as consumers accelerated their rate of
spending.
Looking ahead, we believe that the stock market will continue to be
challenged by higher interest rates and decelerating earnings growth. While
we see areas of opportunity within Energy Technology and 21st Century
Medicine, among other themes, the stock market is likely to remain highly
volatile. Accordingly, we continue to maintain a more cautious position for
the portfolio.
* The Standard & Poor's 500 Composite Stock Index is a commonly used,
unmanaged measure of U.S. stock market performance.
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
SHARES VALUE
--------- -------------
COMMON STOCKS--79.9%
Aerospace & Defense--2.1%
Boeing Company 142,900 $12,450,163
United Technologies Corp. 100,000 11,500,000
------------
23,950,163
------------
Banks--3.4%
Citicorp 250,000 20,656,250
Nationsbank Corp. 215,000 17,764,375
------------
38,420,625
------------
Beverages--1.2%
Anheuser-Busch Companies, Inc. 50,000 3,750,000
Seagram Ltd. 300,000 10,087,500
------------
13,837,500
------------
Chemical--1.4%
Monsanto Co. 500,000 16,250,000
------------
Computer Software & Services--3.0%
Microsoft Corp. (b) 160,000 19,220,000
Sterling Software, Inc. (b) 195,000 15,015,000
------------
34,235,000
------------
Diversified Financial Services--3.2%
Equifax, Inc. 444,300 11,662,875
Student Loan Marketing Assoc. 170,000 12,580,000
Travelers Group, Inc. 270,000 12,318,750
------------
36,561,625
------------
Diversified Miscellaneous--1.1%
CUC International, Inc. (b) 350,000 12,425,000
------------
Electrical Equipment--2.3%
Raychem Corp. 370,000 26,593,750
------------
Electronics--2.3%
Intel Corp. 160,000 $11,750,000
Perkin Elmer Corp. 311,500 15,029,875
------------
26,779,875
------------
Engineering & Construction--1.0%
Fluor Corp. 167,200 10,930,700
------------
Entertainment, Leisure & Gaming--2.4%
Carnival Corp. 560,000 16,170,000
Time Warner, Inc. 270,000 10,597,500
------------
26,767,500
------------
Healthcare--Diversified--2.0%
Bristol-Myers Squibb Co. 129,000 11,610,000
Warner-Lambert Co. 200,000 11,000,000
------------
22,610,000
------------
Healthcare--Drugs--3.5%
Amgen, Inc. (b) 200,000 10,800,000
Biogen, Inc. (b) 184,700 10,135,413
Lilly (Eli) & Co. 290,200 18,863,000
------------
39,798,413
------------
Insurance--4.0%
Ace Ltd. 250,000 11,750,000
Cigna Corp. 166,000 19,567,250
Everest Re Holdings, Inc. 528,000 13,662,000
------------
44,979,250
------------
Lodging & Restaurants--0.9%
Hilton Hotels Corp. 77,500 8,718,750
Marriott International, Inc. 26,800 1,440,500
------------
10,159,250
------------
See Notes to Financial Statements
2-6
<PAGE>
GROWTH SERIES
SHARES VALUE
--------- -------------
Machinery--1.2%
Deere & Co. 328,900 $ 13,156,000
------------
Medical Products & Supplies--4.7%
Baxter International, Inc. 415,000 19,608,750
Boston Scientific Corp. (b) 120,000 5,400,000
Guidant Corp. 280,500 13,814,625
Johnson & Johnson 292,800 14,493,600
------------
53,316,975
------------
Natural Gas--1.9%
Anadarko Petroleum Corp. 325,000 18,850,000
Burlington Resources, Inc. 63,300 2,721,900
------------
21,571,900
------------
Office & Business Equipment--1.8%
Storage Technology Corp. (b) 550,000 21,037,500
------------
Oil--1.9%
Louisiana Land & Exploration Co. 368,900 21,257,862
------------
Oil Service & Equipment--10.2%
BJ Services Co. (b) 411,000 14,436,375
Diamond Offshore Drilling (b) 439,100 25,138,475
Dresser Industries, Inc. 300,000 8,850,000
ENSCO International, Inc. (b) 275,000 8,937,500
Halliburton Co. 290,000 16,095,000
Schlumberger Ltd. 281,000 23,674,250
Sonat Offshore Drilling 106,500 5,378,250
Tidewater, Inc. 300,000 13,162,500
------------
115,672,350
------------
Paper & Forest Products--2.7%
Boise Cascade Corp. 315,000 11,536,875
Kimberly Clark Corp. 250,000 19,312,500
------------
30,849,375
------------
Pollution Control--1.9%
WMX Technologies, Inc. 675,000 22,106,250
------------
Rails--0.6%
Burlington Northern, Inc. 90,000 7,278,750
------------
Retail--6.8%
AutoZone, Inc. (b) 270,000 9,382,500
Dayton Hudson Corp. 125,000 12,890,625
Federated Department Stores, Inc. (b) 490,000 16,721,250
Home Depot, Inc. 400,000 21,600,000
TJX Companies, Inc. 500,000 16,875,000
------------
77,469,375
------------
Telecommunications Equipment--7.2%
Bay Networks, Inc. (b) 62,000 1,596,500
Cisco Systems, Inc. (b) 430,000 24,348,750
Lucent Technologies, Inc. (b) 320,000 12,120,000
MFS Communications, Inc. (b) 450,000 16,931,250
Newbridge Networks Corp. (b) 320,000 20,960,000
Winstar Communications, Inc. (b) 250,000 6,234,375
------------
82,190,875
------------
Utility--Telephone--5.2%
AT&T Corp. 300,000 18,600,000
Frontier Corp. 490,000 15,006,250
MCI Communications Corp. 570,000 14,606,250
U.S. West Media Group (b) 600,000 10,950,000
------------
59,162,500
------------
TOTAL COMMON STOCKS
(Identified cost $779,441,665) 909,368,363
------------
FOREIGN COMMON STOCKS--6.6%
Conglomerates--0.6%
Cheung Kong Holdings Ltd. (Hong Kong) (b) 1,000,000 7,200,000
------------
Cosmetics & Soaps--1.5%
Unilever NV (Netherlands) 113,600 16,486,200
------------
Entertainment, Leisure & Gaming--0.7%
Grupo Televisa SA GDR (Mexico) (b) 250,000 7,687,500
------------
Healthcare--Drugs--0.9%
Elan PLC ADR (Ireland) (b) 175,000 $ 9,996,875
------------
Oil--0.8%
YPF Sociedad Anonima ADR (Argentina) 400,000 9,000,000
------------
Publishing, Broadcasting, Printing & Cable--1.0%
News Corp. Ltd. Preference ADR
(Australia) 592,000 11,914,000
------------
REITS--1.1%
Henderson Land Development (Hong Kong)
(b) 1,000,000 7,490,000
New World Development Company Ltd. (Hong
Kong) (b) 1,200,000 5,568,000
------------
13,058,000
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $76,099,535) 75,342,575
------------
TOTAL LONG-TERM INVESTMENTS--86.5%
(Identified cost $855,541,200) 984,710,938
------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- ------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--13.7%
Commercial Paper--11.6%
ESC Securitization 5.57%, 7-1-96 A-1+ $ 6,000 6,000,000
GE Capital Corp. 5.34%, 7-2-96 A-1+ 2,300 2,299,659
Wal-Mart Stores 5.33%, 7-2-96 A-1+ 1,040 1,039,846
H.J. Heinz Co. 5.29%, 7-5-96 A-1 3,510 3,507,937
McKenna Triangle National Corp. 5.37%, 7-8-96 A-1+ 7,600 7,592,064
Minnesota Mining & Manufacturing Co. 5.27%, 7-8-96 A-1+ 895 894,083
Allied Signal, Inc. 5.39%, 7-9-96 A-1 3,734 3,729,527
Exxon Imperial U.S., Inc. 5.45%, 7-9-96 A-1+ 2,315 2,312,196
U.S. West Communications, Inc. 5.43%, 7-9-96 A-1+ 420 419,493
Kimberly-Clark Corp. 5.32%, 7-10-96 A-1+ 5,470 5,462,725
Abbott Laboratories 5.27%, 7-11-96 A-1+ 6,000 5,991,217
Abbott Laboratories 5.30%, 7-11-96 A-1+ 3,695 3,689,560
Southwestern Bell Telephone 5.37%, 7-11-96 A-1+ 755 753,874
Bellsouth Telecommunications, Inc. 5.28%, 7-12-96 A-1+ 5,000 4,991,933
Minnesota Mining & Manufacturing Co. 5.33%, 7-12-96 A-1+ 3,610 3,604,121
Southwestern Bell Telephone 5.34%, 7-12-96 A-1+ 7,565 7,552,656
Preferred Receivables Funding 5.44%, 7-15-96 A-1 765 763,382
Southwestern Bell Telephone 5.35%, 7-15-96 A-1+ 2,150 2,145,527
Allied Signal, Inc. 5.37%, 7-18-96 A-1 3,665 3,655,706
Exxon Imperial U.S., Inc. 5.30%, 7-18-96 A-1+ 3,000 2,992,492
E.I. du Pont de Nemours & Co. 5.33%, 7-19-96 A-1+ 4,795 4,782,221
Gannett Co. 5.33%, 7-19-96 A-1 2,145 2,139,283
E.I. du Pont de Nemours & Co. 5.35%, 7-22-96 A-1+ 4,720 4,705,270
Warner-Lambert Co. 5.29%, 7-23-96 A-1+ 1,440 1,435,345
Bellsouth Telecommunications, Inc. 5.33%, 7-24-96 A-1+ 4,000 3,986,379
Gannett Co. 5.33%, 7-25-96 A-1 3,380 3,367,990
Ameritech Capital Funding Corp. 5.35%, 7-26-96 A-1+ 1,710 1,703,647
Procter & Gamble 5.35%, 7-26-96 A-1+ 3,310 3,297,702
First Deposit Funding Trust 5.40%, 7-30-96 A-1 6,000 5,973,900
H.J. Heinz Co. 5.37%, 7-30-96 A-1 3,800 3,783,562
Ameritech Capital Funding Corp. 5.31%, 8-5-96 A-1+ 10,000 9,947,297
Pfizer, Inc. 5.33%, 8-6-96 A-1+ 2,955 2,939,250
</TABLE>
See Notes to Financial Statements
2-7
<PAGE>
GROWTH SERIES
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------ ----------------
<S> <C> <C> <C>
Commercial Paper--continued
AT&T Corp. 5.38%, 8-16-96 A-1 $ 5,950 $ 5,909,097
E.I. du Pont de Nemours & Co. 5.35%, 8-19-96 A-1+ 1,945 1,930,837
General Re Corp. 5.38%, 8-20-96 A-1+ 5,000 4,962,639
Warner-Lambert Co. 4.87%, 8-28-96 A-1+ 2,500 2,478,117
----------------
TOTAL COMMERCIAL PAPER 132,740,534
----------------
Federal Agency Securities--2.1%
Federal National Mortgage Assoc. 5.22%, 7-3-96 760 759,780
Federal Farm Credit Banks 5.27%, 7-15-96 2,045 2,040,808
Federal Home Loan Banks 5.295%, 7-29-96 4,095 4,078,135
Federal Home Loan Mortgage Corp. 4.82%, 8-15-96 7,000 6,952,016
Federal National Mortgage Assoc. 5.32%, 9-6-96 10,000 9,897,500
----------------
TOTAL FEDERAL AGENCY SECURITIES 23,728,239
----------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $156,481,417) 156,468,773
----------------
TOTAL INVESTMENTS--100.2%
(Identified cost $1,012,022,617) 1,141,179,711(a)
Cash and receivables, less liabilities--(0.2%) (2,188,425)
----------------
NET ASSETS--100.0% $1,138,991,286
================
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $142,106,976 and gross
depreciation of $13,860,122 for income tax purposes. At June 30, 1996,
the aggregate cost of securities for federal income tax purposes was
$1,012,932,857.
(b) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
2-8
<PAGE>
GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $1,012,022,617) $1,141,179,711
Cash 31,168
Receivable for investment securities sold 10,766,029
Dividends and interest receivable 983,706
Tax reclaim receivable 198,408
------------
Total assets 1,153,159,022
------------
Liabilities
Payable for investment securities purchased 13,416,450
Investment advisory fee 587,392
Financial agent fee 55,665
Trustees' fee 6,145
Accrued expenses 102,084
------------
Total liabilities 14,167,736
------------
Net Assets $1,138,991,286
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 969,458,453
Undistributed net investment income 51,511
Accumulated net realized gain 40,324,228
Net unrealized appreciation 129,157,094
------------
Net Assets $1,138,991,286
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 59,788,338
============
Net asset value and offering price per share $19.05
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Dividends $ 5,278,128
Interest 2,954,002
----------
Total investment income 8,232,130
----------
Expenses
Investment advisory fee 3,383,504
Financial agent fee 319,703
Custodian 61,319
Professional 14,869
Printing 12,164
Trustees 9,462
Miscellaneous 10,150
----------
Total expenses 3,811,171
Custodian fees paid indirectly (3,587)
----------
Net expenses 3,807,584
----------
Net investment income 4,424,546
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 40,420,182
Net realized loss on foreign currency transactions (24,657)
Net change in unrealized appreciation (depreciation) of investment
securities 19,595,520
----------
Net gain on investments 59,991,045
----------
Net increase in net assets resulting from operations $64,415,591
==========
</TABLE>
See Notes to Financial Statements
2-9
<PAGE>
GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------ --------------
<S> <C> <C>
From Operations
Net investment income $ 4,424,546 $ 8,919,570
Net realized gain 40,395,525 111,984,233
Net change in unrealized appreciation (depreciation) 19,595,520 89,700,570
----------- -------------
Net increase in net assets resulting from operations 64,415,591 210,604,373
----------- -------------
From Distributions to Shareholders
Net investment income (4,567,620) (7,451,972)
Net realized gains (7,466,829) (105,927,796)
----------- -------------
Decrease in net assets from distributions to shareholders (12,034,449) (113,379,768)
----------- -------------
From Share Transactions
Proceeds from sales of shares (9,409,153 and 16,787,870 shares,
respectively) 174,949,316 302,038,455
Net asset value of shares issued from reinvestment of distributions
(639,936 and 6,290,645 shares, respectively) 12,034,450 113,379,768
Cost of shares repurchased (4,601,826 and 8,019,458 shares, respectively) (85,762,569) (143,474,953)
----------- -------------
Increase in net assets from share transactions 101,221,197 271,943,270
----------- -------------
Net increase in net assets 153,602,339 369,167,875
Net Assets
Beginning of period 985,388,947 616,221,072
----------- -------------
End of period (including undistributed net investment income of $51,511 and
$194,585, respectively) $1,138,991,286 $ 985,388,947
=========== =============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months
Ended
6/30/96 Year Ended December 31,
(Unaudited) 1995 1994 1993 1992 1991
--------------- -------- -------------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.13 $15.69 $16.59 $15.01 $14.43 $11.72
Income from investment operations
Net investment income 0.08 0.20 0.23(1)(3) 0.16(3) 0.22(3) 0.39(3)
Net realized and unrealized gain 1.05 4.60 0.02 2.77 1.25 4.64
------------- ------- ------------ ------- ------- --------
Total from investment operations 1.13 4.80 0.25 2.93 1.47 5.03
------------- ------- ------------ ------- ------- --------
Less distributions
Dividends from net investment income (0.08) (0.17) (0.23) (0.15) (0.23) (0.37)
Dividends from net realized gains (0.13) (2.19) (0.92) (1.20) (0.66) (1.95)
------------- ------- ------------ ------- ------- --------
Total distributions (0.21) (2.36) (1.15) (1.35) (0.89) (2.32)
------------- ------- ------------ ------- ------- --------
Change in net asset value 0.92 2.44 (0.90) 1.58 0.58 2.71
------------- ------- ------------ ------- ------- --------
Net asset value, end of period $19.05 $18.13 $15.69 $16.59 $15.01 $14.43
============= ======= ============ ======= ======= ========
Total return 6.20%(4) 30.85% 1.48% 19.69% 10.29% 43.83%
Ratios/supplemental data:
Net assets, end of period (thousands) $1,138,991 $985,389 $616,221 $446,368 $245,565 $102,259
Ratio to average net assets of:
Operating expenses 0.71%(2)(5) 0.75%(2) 0.80% 0.79% 0.50% 0.50%
Net investment income 0.83%(5) 1.12% 1.38% 0.97% 1.66% 2.14%
Portfolio turnover rate 67%(4) 173% 185% 185% 214% 237%
Average commission rate paid(6) $0.0391 N/A N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.003 per share.
(2) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(3) Computed using average shares outstanding.
(4) Not annualized
(5) Annualized
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-10
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
Over this latest reporting period, the outlook for the U.S. economy has
shifted dramatically. At year-end 1995, the consensus opinion on Wall Street
was for continued slow economic growth and benign inflation. During the first
six months of 1996, however, numerous reports were released which suggested
manufacturing activity, consumer spending and job growth had picked up
dramatically.
Bond investors reacted negatively to this upbeat economic news, believing
that a higher growth rate in the economy could potentially trigger higher
inflation, which would erode the value of their fixed-income securities.
Although we have not yet seen any compelling evidence of inflationary
pressures, bond prices continued to stumble during this reporting period as
interest rates climbed higher and talk of a Fed tightening later this summer
became more widespread. As of June 30, 1996, the yield on the widely watched
30-year Treasury bond has climbed to 6.87%, representing a 96 basis-point
jump year-to-date.
Phoenix Edge Multi-Sector Fixed Income Fund posted excellent results over
this latest reporting cycle, outpacing the overall bond market by wide
margins. For the six-month reporting period ended June 30, 1996, the Fund
earned 2.81%. According to the Lehman Brothers Aggregate Bond Index, an
unmanaged, commonly used measure of bond performance, the market returned
- -1.22% for the same period. (All of these figures assume reinvestment of any
distributions.) Our strategy of focusing on the more non-traditional sectors
of the bond market continued to pay-off handsomely in this difficult market
environment. Specifically, the Fund's strong performance can be attributed
primarily to its overweighting in emerging markets debt, high-yield corporate
bonds, commercial mortgage-backed securities and taxable municipals.
We have recently taken profits in Argentina and Brazil as a result of
their strong returns year-to-date. From a valuation standpoint, current yield
spreads on these bonds appear to be less compelling than they were at the
beginning of the year, making them ideal sales candidates. The proceeds from
these sales have been reinvested in Mexico and Central Europe, as well as
U.S. Treasuries.
Going forward, we have a constructive outlook for the domestic bond
market. Based on the bearish tone of the market during the first six months
of the year, it appears that market participants may have overreacted to the
risk of inflation. In the Edge Multi-Sector Fixed Income Fund, we will
continue to overweight undervalued sectors of the bond market as our primary
means of adding value relative to our benchmark, the Lehman Brothers
Aggregate Bond Index.
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- -------- -----------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--12.4%
U.S. Treasury Notes--8.7%
U.S. Treasury Notes 6.875%, '06 Aaa $ 500 $ 505,468
U.S. Treasury Notes 6%, '26 Aaa 10,750 9,533,906
-----------
10,039,374
-----------
Agency Mortgage-Backed Securities--3.7%
FHLMC 7.50%, '18 Aaa 482 485,586
GNMA Seasoned 8%, '06 Aaa 244 249,036
GNMA 6.50%, '23 Aaa 2,299 2,143,270
GNMA 6.50%, '25 Aaa 957 890,880
GNMA 6.50%, '26 Aaa 588 547,421
-----------
4,316,193
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $14,634,420) 14,355,567
-----------
NON-CONVERTIBLE BONDS--37.1%
Chemical--Specialty--1.3%
General Chemical, Inc. 9.25%, '03 B 1,500 1,479,375
-----------
Containers--1.9%
Owens-Illinois, Inc. 11%, '03 Ba 2,000 2,150,000
-----------
Food Services--0.1%
ARA Services, Inc. 10.625%, '00 Ba 54 59,737
-----------
Hospital Management & Services--1.1%
Tenet Healthcare Corp. Sr. Notes 9.625%, '02 Ba 500 528,125
Hospital Management & Services--continued
Tenet Healthcare Corp. Sr. Sub. Notes 10.125%, '05 Ba $ 750 $ 793,125
-----------
1,321,250
-----------
Industrial--1.5%
American Standard, Inc. 9.25%, '16 Ba 750 742,500
Millicom Int'l Cellular 144A 0%,
'06 (b) (d) B(c) 2,000 1,055,000
-----------
1,797,500
-----------
Non-Agency Mortgage-Backed Securities--27.5%
Airplanes Pass Through Trust 1D 10.875%, '19 Ba 1,500 1,560,000
Equitable Life 174, D1 144A 7.77%, '09 (b) Baa 2,000 1,990,625
General Electric 96-8, 2 A5 7.50%, '26 AAA(c) 1,000 958,750
Green Tree Financial Corp. 94-1, B2 7.85%, '19 Baa 3,000 2,973,750
Kidder Peabody Acceptance Corp. 94-C2, D 7.18%, '05 BBB(c) 500 480,000
Nomura Asset Securities Corp. 94-MD2, A6 6.70%, '03 A(c) 1,366 1,353,638
Prudential Home Mtg. 93-L, 3B2 144A 6.641%, '23 (b) NR 1,500 1,393,828
Resolution Trust Corp. 92-C7, A1C 7.90%, '23 Aa 233 231,661
Resolution Trust Corp. 92-C8, D 8.835%, '23 Baa 1,987 2,012,414
See Notes to Financial Statements
2-11
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- -------- -----------
Non-Agency Mortgage-Backed Securities--continued
Resolution Trust Corp. 93-C3, A4 6.55%, '24 Aaa $ 649 $ 647,863
Resolution Trust Corp. 94-C1, D 8%, '26 BBB(c) 1,857 1,833,568
Resolution Trust Corp. 94-C2, D 8%, '25 BBB(c) 1,730 1,705,882
Resolution Trust Corp. 95-1, M2 7.50%, '28 Aa 2,390 2,391,137
Resolution Trust Corp. 95-2, C1 7.45%, '29 Aa 1,776 1,723,366
Resolution Trust Corp. 95-C1, B 6.90%, '27 Aa 2,250 2,148,047
Resolution Trust Corp. 95-C2, C 7%, '27 A 1,940 1,853,095
Ryland Mortgage Securities Corp. 92-A, 1A 8.33%, '30 A-(c) 978 968,063
SASI 95-6, B3 144A 7%, '10 (b) NR 1,427 1,174,023
Securitized Asset Sales 95-A, M 7.53%, '24 AA+(c) 1,830 1,763,985
White Hall Partners 95-C1, B 144A 7.43%, '25 (b) AA(c) 2,750 2,762,891
-----------
31,926,586
-----------
Paper & Forest Products--2.6%
Buckeye Cellulose Corp. 8.50%, '05 Ba 950 902,500
Stone Container Corp. 11.875%, '98 B 2,000 2,100,000
-----------
3,002,500
-----------
Telecommunications Equipment--1.1%
Panamsat L.P. 0%, '03 (d) B-(c) 1,500 1,301,250
-----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $42,969,208) 43,038,198
-----------
FOREIGN NON-CONVERTIBLE BONDS--11.1%
Argentina--1.4%
Bridas Corp. Yankee 12.50%, '99 B 1,600 1,670,000
-----------
Brazil--0.8%
Aracruz Celulose 144A 10.375%, '02 (b) NR 1,000 955,000
-----------
Canada--2.5%
Call-Net Enterprises, Inc. 0%, '04 (d) B 2,000 1,485,000
Videotron Ltee. 10.25%, '02 Ba 1,400 1,442,000
-----------
2,927,000
-----------
Chile--1.6%
CSAV 144A 7.375%, '03 (b) BBB(c) 2,000 1,875,000
-----------
Colombia--2.1%
Centragas Yankee 144A 10.65%, '10 (b) BBB-(c) 2,413 2,470,483
-----------
Mexico--1.5%
Grupo Industrial Durango Euro 12%, '01 B 1,000 1,003,750
Grupo Televisa S.A. 144A 0%, '08 (b)(d) Ba 1,200 655,500
-----------
1,659,250
-----------
Philippines--1.2%
Subic Power Corp. 144A 9.50%, '08 (b) NR 1,347 1,352,258
-----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $12,361,711) 12,908,991
-----------
FOREIGN GOVERNMENT SECURITIES--15.3%
Argentina--1.7%
Republic of Argentina Bearer FRB 6.3125%, '05 (d) B 2,475 1,933,594
-----------
Colombia--0.4%
Republic of Colombia Euro 9%, '97 BBB(c) 500 506,550
-----------
Costa Rica--1.4%
Central Bank of Costa Rica 6.25%, '10 NR 2,200 1,584,000
-----------
Mexico--1.9%
United Mexican States Discount A 6.3984%, '19 (d)(e) Ba $2,525 $ 1,988,437
United Mexican States Global Bond 11.50%, '26 Ba 250 228,438
-----------
2,216,875
-----------
Morocco--1.2%
Morocco R&C Agreement Series A 6.4375%, '09 (d) NR 2,000 1,437,500
-----------
Panama--1.1%
Panama PDI WI, '49 (f)(g) NR 2,000 1,225,000
-----------
Philippines--1.0%
Central Bank Philippines PCIR Euro 6.25%, '17 (d) BB(c) 1,500 1,196,250
-----------
Poland--2.6%
Poland PDI 3.75%, '14 (d) Baa 4,000 3,045,000
-----------
Romania--1.7%
National Bank of Romania 144A 9.75%, '99 (b) NR 2,000 2,020,000
-----------
Russia--1.4%
Vnesheconombank Loans Yankee (f) NR 3,200 1,556,000
-----------
Slovenia--0.2%
Republic of Slovenia Series 1 6.50%, '06 (d) NR 145 144,275
Republic of Slovenia Series 2 6.50%, '06 (d) NR 78 75,855
-----------
220,130
-----------
Venezuela--0.2%
Republic of Venezuela Par 6.75%, '20 (e) Ba 350 215,250
-----------
Yugoslavia--0.5%
Yugoslavia Non-Performing NFA Loans (f) NR 778 540,709
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $15,997,221) 17,696,858
-----------
MUNICIPAL BONDS--12.9%
California--2.2%
Orange County Pension A Taxable 7.67%, '09 Aaa 2,500 2,516,025
-----------
Florida--3.2%
Palm Beach Waste Revenue Project B Taxable 10.50%, '11 NR 1,500 1,536,900
University Miami Exchange Revenue A Taxable 7.65%, '20 (h) Aaa 2,270 2,210,594
-----------
3,747,494
-----------
Illinois--0.5%
Illinois Health Facilities Authority 7%, '08 Aaa 550 613,861
-----------
New York--1.2%
Beth Israel Medical Center Taxable Taxable 7.58%, '15 Aaa 1,395 1,343,399
-----------
Pennsylvania--3.8%
Pennsylvania Economic Development Finance Authority 9.50%,
'12 NR 2,500 2,473,750
Pennsylvania Financial Development 6.75%, '07 NR 1,950 1,933,542
-----------
4,407,292
-----------
Virginia--2.0%
Newport News Taxable Series B 7.05%, '25 Aa 750 689,693
See Notes to Financial Statements
2-12
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- -------- -----------
Virginia--continued
Pittsylvania County Series B 7.65%, '10 NR $1,500 $ 1,577,790
-----------
2,267,483
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $14,822,147) 14,895,554
-----------
CONVERTIBLE BONDS--1.8%
Entertainment, Leisure & Gaming--0.8%
Comcast Corp. Cv. 1.125%, '07 B 2,000 967,500
-----------
Healthcare--Diversified--1.0%
Sandoz Capital BVI LTD Cv. 144A 2%, '02 (b) NR 1,100 1,171,500
-----------
TOTAL CONVERTIBLE BONDS
(Identified cost $2,218,288) 2,139,000
-----------
FOREIGN CONVERTIBLE BONDS--1.4%
Mexico--1.4%
Empresas ICA Sociedad Cv. 5%, '04 B 2,400 1,584,000
-----------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $1,477,164) 1,584,000
-----------
SHARES
------
WARRANTS--0.1%
Paper & Forest Products--0.1%
SD Warren Warrants 144A (b)(e) 30,000 90,000
----------
TOTAL WARRANTS
(Identified cost $142,500) 90,000
----------
SHARES VALUE
------ -----------
PREFERRED STOCKS--5.7%
Paper & Forest Products--0.7%
SD Warren Co. Pfd. PIK 144A Series B (b) 30,000 $ 850,293
----------
Publishing, Broadcasting, Printing & Cable--1.6%
K-III Communications Ser. C Pfd. 144A 10%, '08 (b) 20,000 1,840,000
----------
Telecommunications Equipment--3.4%
Panamsat Corp. Pfd. 12.75%, '05 3,451 3,968,610
----------
TOTAL PREFERRED STOCKS
(Identified cost $6,136,746) 6,658,903
----------
TOTAL LONG-TERM INVESTMENTS--97.8%
(Identified cost $110,759,405) 113,367,071
----------
MOODY'S PAR
BOND VALUE
RATING (000)
------ ------
SHORT-TERM OBLIGATIONS--3.7%
Commercial Paper--3.7%
Emerson Electric Co. 5.52%, 7-1-96 P-1+ $4,305 $ 4,305,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $4,305,000) 4,305,000
------------
TOTAL INVESTMENTS--101.5%
(Identified cost $115,064,405) 117,672,071(a)
Cash and receivables, less liabilities--(1.5%) (1,712,608)
------------
NET ASSETS--100.0% $115,959,463
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,224,117 and gross
depreciation of $1,721,618 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$115,169,572.
(b) 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,
1996, these securities amounted to a value of $21,656,401 or 18.7% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(e) Rights incorporated as a unit.
(f) Non-income producing.
(g) When issued.
(h) Segregated as collateral for the when issued obligation.
See Notes to Financial Statements
2-13
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $115,064,405) $117,672,071
Cash 359,895
Receivable for fund shares sold 203,366
Interest income receivable 1,763,918
------------
Total assets 119,999,250
------------
Liabilities
Payable for investment securities purchased 3,898,420
Payable for fund shares repurchased 29,011
Investment advisory fee 43,186
Trustees' fee 6,198
Financial agent fee 5,632
Accrued expenses 57,340
------------
Total liabilities 4,039,787
------------
Net Assets $115,959,463
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $112,130,636
Undistributed net investment income 238,615
Accumulated net realized gain 982,546
Net unrealized appreciation 2,607,666
------------
Net Assets $115,959,463
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 11,472,271
============
Net asset value and offering price per share $10.11
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 4,503,808
Dividends 325,654
-----------
Total investment income 4,829,462
-----------
Expenses
Investment advisory fee 280,780
Financial agent fee 33,714
Custodian 31,652
Printing 12,663
Trustees 9,699
Professional 9,302
Miscellaneous 1,970
Expenses borne by investment adviser (6,560)
-----------
Total expenses 373,220
Custodian fees paid indirectly (8,206)
-----------
Net expenses 365,014
-----------
Net investment income 4,464,448
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 2,757,686
Net change in unrealized appreciation (depreciation) of investment
securities (4,117,280)
-----------
Net loss on investments (1,359,594)
-----------
Net increase in net assets resulting from operations $ 3,104,854
===========
</TABLE>
See Notes to Financial Statements
2-14
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 4,464,448 $ 7,829,504
Net realized gain 2,757,686 1,405,058
Net change in unrealized appreciation (depreciation) (4,117,280) 10,007,140
----------- ------------
Net increase in net assets resulting from operations 3,104,854 19,241,702
----------- ------------
From Distributions to Shareholders
Net investment income (4,361,177) (7,763,175)
----------- ------------
Decrease in net assets from distributions to shareholders (4,361,177) (7,763,175)
----------- ------------
From Share Transactions
Proceeds from sales of shares (2,695,081 and 4,715,281 shares,
respectively) 27,688,127 45,595,165
Net asset value of shares issued from reinvestment of distributions
(434,110 and 796,247 shares, respectively) 4,361,177 7,763,175
Cost of shares repurchased (2,325,580 and 3,158,605 shares, respectively) (23,879,058) (30,477,355)
----------- ------------
Increase in net assets from share transactions 8,170,246 22,880,985
----------- ------------
Net increase in net assets 6,913,923 34,359,512
Net Assets
Beginning of period 109,045,540 74,686,028
----------- ------------
End of period (including undistributed net investment income of $238,615
and $135,344, respectively) $115,959,463 $109,045,540
=========== ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months
Ended
6/30/96 Year Ended December 31,
(Unaudited) 1995 1994 1993 1992 1991
--------------- --------- --------- --------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.22 $8.98 $10.27 $9.58 $9.33 $8.48
Income from investment operations
Net investment income 0.40(1) 0.83(1)(2) 0.72(1)(2) 0.66(1)(2) 0.66(2) 0.74(2)
Net realized and unrealized gain (loss) (0.11) 1.22 (1.28) 0.84 0.25 0.85
------------- -------- -------- -------- ----------- ------------
Total from investment operations 0.29 2.05 (0.56) 1.50 0.91 1.59
------------- -------- -------- -------- ----------- ------------
Less distributions
Dividends from net investment income (0.40) (0.81) (0.73) (0.66) (0.66) (0.74)
Dividends from net realized capital gains -- -- -- (0.15) -- --
------------- -------- -------- -------- ----------- ------------
Total distributions (0.40) (0.81) (0.73) (0.81) (0.66) (0.74)
------------- -------- -------- -------- ----------- ------------
Change in net asset value (0.11) 1.24 (1.29) 0.69 0.25 0.85
------------- -------- -------- -------- ----------- ------------
Net asset value, end of period $10.11 $10.22 $8.98 $10.27 $9.58 $9.33
============= ======== ======== ======== =========== ============
Total return 2.81%(5) 23.54% -5.47% 15.90% 10.03% 19.41%
Ratios/supplemental data:
Net assets, end of period (thousands) $115,959 $109,046 $74,686 $79,393 $43,090 $21,957
Ratio to average net assets of:
Operating expenses 0.65%(3)(4) 0.65%(3) 0.66% 0.65% 0.50% 0.50%
Net investment income 7.91%(4) 8.55% 7.62% 6.71% 7.47% 8.65%
Portfolio turnover rate 89%(5) 147% 181% 169% 166% 269%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.001, $0.007, $0.006 and $0.005 per share, respectively.
(2) Computed using average shares outstanding.
(3) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(4) Annualized
(5) Not annualized
See Notes to Financial Statements
2-15
<PAGE>
TOTAL RETURN SERIES
Over this latest reporting period, the outlook for the U.S. economy has
shifted dramatically. At year-end 1995, the consensus opinion on Wall Street
was for continued slow economic growth and benign inflation. During the first
six months of 1996, however, numerous reports were released which suggested
manufacturing activity, consumer spending and job growth had picked up
dramatically.
Bond investors reacted negatively to this upbeat economic news, believing
that a higher growth rate in the economy could potentially trigger higher
inflation, which would erode the value of their fixed-income securities.
Although we have not yet seen any compelling evidence of inflationary
pressures, bond prices continued to stumble during this reporting cycle as
interest rates climbed higher and talk of a Fed tightening became more
widespread. As measured by the Lehman Brothers Aggregate Bond Index, a
commonly used, unmanaged gauge of market performance, bonds returned a
disappointing -1.22% for this six-month period.
Despite rising interest rates and growing concerns about corporate
profitability, the stock market posted solid results aided by record mutual
fund inflows. The Standard & Poor's 500 Composite Stock Index, a commonly
used, unmanaged indicator of stock performance, was up 10.24% during the
first half of 1996. Throughout the reporting period, shifting investor
interest contributed to strong market rotation and a lack of clear industry
leadership. Nevertheless, the consumer staples and technology sectors
performed best over this six-month period, while utilities and basic
materials clearly lagged.
Phoenix Edge Total Return Series posted solid absolute gains over this
reporting period. For the six months ended June 30, 1996, the Fund returned
4.36%. In contrast, its peer group's average -- the 194 flexible funds
tracked by the Lipper Analytical Services -- was up 5.52%. As with the broad
market returns noted above, all of these figures assume reinvestment of any
distributions, but exclude the effect of sales charges.
The Fund's relative underperformance was due primarily to its
underweighting in cyclical stocks during the first quarter of 1996. Equity
investors reacted dramatically to reports of stronger economic activity in
the beginning of the year, resulting in superior performance for economically
sensitive stocks. Positive contributors to equity performance during the
reporting period included the portfolio's exposure to the energy and
technology sectors.
Although bond prices plummeted during this reporting cycle, the Fund's
fixed-income segment continued to perform well relative to its benchmark, the
Lehman Brothers Aggregate Bond Index. Our multi-sector approach to
fixed-income investing has continued to pay off and we are particularly
pleased with the strong performance from our emerging market debt, high-yield
and municipal bond holdings.
Looking ahead, we expect further volatility in the equity markets and
continued earnings shortfalls. Given this environment of slowing corporate
profits, we believe that it is increasingly a growth investor's market and we
will continue to seek out sustainable earnings growth stocks for this Fund.
Based on our thematic approach, we have identified a number of areas that
should provide significant growth potential. Within health care, our 21st
Century Medicine theme focuses on leading companies offering compelling
solutions to health care needs. Energy Technology identifies companies within
the oil services sector that provide productivity-enhancing solutions to
exploration and production companies. Lastly, our Move to Outsourcing theme
capitalizes on the growing trend by corporate America to increase
productivity and concentrate on core businesses.
Our short-term outlook for the fixed-income markets remains neutral.
Although bond prices have fallen dramatically over this reporting period, the
threat of rising inflation continues to plague the bond market. In terms of
our sector allocation strategy, we have scaled back our exposure to some of
the less traditional sectors of the bond market as a result of their strong
performance year-to-date. From a valuation standpoint, current yield spreads
on these bonds appear to be less compelling than they were at the beginning
of the year. Despite being much more selective, we are still finding a number
of undervalued sectors including emerging markets debt, commercial and
non-agency residential mortgage-backed securities, and taxable municipal
bonds.
As we move further into 1996, we continue to identify many investment
opportunities, while balancing our view with the realization that all markets
take a pause. Slower earnings growth and higher inflation may be near-term
catalysts for such a pause. Thus, we expect to continue holding higher cash
reserves to balance portfolio risk and await a better opportunity to more
fully invest.
2-16
<PAGE>
TOTAL RETURN SERIES
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--4.5%
U.S. Treasury Notes--4.5%
U.S. Treasury Notes 6.375%, '99 AAA $ 1,650 $ 1,654,125
U.S. Treasury Notes 6.875%, '06 AAA 14,000 14,153,104
U.S. Treasury Notes 6%, '26 (h) AAA 1,200 1,064,250
------------
16,871,479
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $16,863,748) 16,871,479
------------
SHARES
-------
COMMON STOCKS--69.8%
Advertising--0.6%
Interpublic Group Companies, Inc. 49,000 2,296,875
------------
Aerospace & Defense--2.2%
Boeing Company 55,400 4,826,725
General Motors Corp. Class H 58,100 3,493,263
------------
8,319,988
------------
Airlines--2.2%
AMR Corp. (b) 50,000 4,550,000
Delta Airlines, Inc. 44,800 3,718,400
------------
8,268,400
------------
Banks--2.0%
Chase Manhattan Corp. 53,100 3,750,188
Citicorp 44,900 3,709,862
------------
7,460,050
------------
Beverages--1.1%
Northland Cranberries, Inc. Class A 13,200 396,000
PepsiCo, Inc. 105,800 3,742,675
------------
4,138,675
------------
Chemical--0.7%
Monsanto Co. 75,000 2,437,500
------------
Chemical--Specialty--0.5%
Sealed Air Corp. (b) 51,800 1,741,775
------------
Computer Software & Services--9.9%
Arbor Software Corp. (b) 19,800 1,183,050
Computer Associates International, Inc. 75,700 5,393,625
HBO & Co. 60,000 4,065,000
Microsoft Corp. (b) 96,000 11,532,000
Netscape Communications Corp. (b) 22,300 1,388,175
Oracle Systems Corp. (b) 165,000 6,507,187
Peoplesoft, Inc. (b) 35,000 2,493,750
Reynolds & Reynolds Company 79,800 4,249,350
------------
36,812,137
------------
Conglomerates--0.8%
Alco Standard Corp. 66,100 2,991,025
------------
Cosmetics & Soaps--2.1%
Gillette Co. 63,000 3,929,625
Procter & Gamble Co. 43,000 3,896,875
------------
7,826,500
------------
Diversified Financial Services--0.5%
Green Tree Financial Corp. 57,500 1,796,875
------------
Electrical Equipment--1.0%
General Electric Co. 44,500 3,849,250
------------
Electronics--1.0%
Coherent, Inc. (b) 36,300 $ 1,887,600
Intel Corp. 26,000 1,909,375
------------
3,796,975
------------
Entertainment, Leisure & Gaming--1.6%
Bally Entertainment Corp. (b) 77,800 2,139,500
Mirage Resorts, Inc. (b) 73,400 3,963,600
------------
6,103,100
------------
Healthcare--Diversified--1.7%
American Home Products Corp. 105,900 6,367,238
------------
Healthcare--Drugs--3.1%
Amgen, Inc. (b) 35,000 1,890,000
Merck & Co., Inc. 60,600 3,916,275
Pfizer, Inc. 77,500 5,531,562
------------
11,337,837
------------
Insurance--1.9%
American International Group, Inc. 35,000 3,451,875
SunAmerica, Inc. 62,600 3,536,900
------------
6,988,775
------------
Lodging & Restaurants--0.7%
Marriott International, Inc. 50,000 2,687,500
------------
Medical Products & Supplies--3.7%
Becton Dickinson & Co. 35,000 2,808,750
Guidant Corp. 40,000 1,970,000
Johnson & Johnson 110,000 5,445,000
Medtronic, Inc. 60,000 3,360,000
------------
13,583,750
------------
Natural Gas--1.5%
Anadarko Petroleum Corp. 30,000 1,740,000
Burlington Resources, Inc. 52,100 2,240,300
Enron Oil & Gas Co. 60,000 1,672,500
------------
5,652,800
------------
Office & Business Equipment--3.0%
Hewlett Packard Co. 34,900 3,476,913
Sun Microsystems, Inc. (b) 64,600 3,803,325
Xerox Corp. 75,600 4,044,600
------------
11,324,838
------------
Oil--0.5%
Louisiana Land & Exploration Co. 34,900 2,011,113
------------
Oil Service & Equipment--5.8%
Baker Hughes, Inc. 94,000 3,090,250
Halliburton Co. 67,800 3,762,900
Schlumberger Ltd. 43,600 3,673,300
Sonat Offshore Drilling 75,100 3,792,550
Tidewater, Inc. 80,000 3,510,000
Varco International, Inc. (b) 198,700 3,601,437
------------
21,430,437
------------
Pollution Control--1.1%
U.S. Filter Corp. (b) 118,900 4,131,775
------------
</TABLE>
See Notes to Financial Statements
2-17
<PAGE>
TOTAL RETURN SERIES
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
Professional Services--5.1%
Accustaff, Inc. (b) 63,700 $ 1,735,825
HFS, Inc. (b) 75,700 5,299,000
Interim Services, Inc. (b) 40,100 1,724,300
Manpower, Inc. 149,100 5,852,175
Robert Half International, Inc. (b) 151,600 4,225,850
-----------
18,837,150
-----------
Publishing, Broadcasting, Printing & Cable--1.8%
Evergreen Media Corp. Class A (b) 60,000 2,565,000
Infinity Broadcasting Corp. Class A (b) 135,000 4,050,000
-----------
6,615,000
-----------
Retail--5.9%
AutoZone, Inc. (b) 85,000 2,953,750
Federated Department Stores, Inc. (b) 103,000 3,514,875
Home Depot, Inc. 68,400 3,693,600
Nordstrom, Inc. 72,000 3,204,000
Petsmart, Inc. (b) 41,900 2,000,725
Staples, Inc. (b) 110,000 2,145,000
TJX Companies, Inc. 130,000 4,387,500
-----------
21,899,450
-----------
Retail--Food--1.0%
Safeway, Inc. (b) 112,200 3,702,600
-----------
Telecommunications Equipment--5.4%
Ascend Communications, Inc. (b) 43,200 2,430,000
Cisco Systems, Inc. (b) 201,300 11,398,612
Newbridge Networks Corp. (b) 54,300 3,556,650
U.S. Robotics Corporation (b) 30,000 2,565,000
-----------
19,950,262
-----------
Textile & Apparel--1.4%
Nike, Inc. Class B 50,000 5,137,500
-----------
TOTAL COMMON STOCKS
(Identified cost $241,130,537) 259,497,150
-----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------- ------------
<S> <C> <C> <C>
MUNICIPAL BONDS--2.9%
California--1.2%
Kern County Pension Obligation Taxable 7.26%, '14 AAA $1,500 1,440,630
Long Beach Pension Obligation Taxable 6.87%, '06 AAA 840 815,111
San Bernardino County Obligation Revenue Taxable 6.87%, '08 AAA 410 395,584
San Bernardino County Obligation Revenue Taxable 6.94%, '09 AAA 1,110 1,073,825
Ventura County Pension Taxable 6.54%, '05 AAA 975 935,649
--------
4,660,799
--------
Florida--1.3%
Miami Beach Spec. Obligation Taxable 8.60%, '21 AAA 3,210 3,430,046
University Miami Exchange Revenue A Taxable 7.65%, '20 AAA 1,365 1,329,278
--------
4,759,324
--------
Michigan--0.1%
Michigan Public Power Agency Sinker 5.25%, '18 AAA 225 206,775
--------
South Carolina--0.3%
South Carolina Public Service Series C 5%, '25 AAA $1,270 $ 1,096,010
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $11,066,514) 10,722,908
-----------
NON-CONVERTIBLE BONDS--5.3%
Industrial--0.1%
Buckeye Cellulos 9.25%, '08 NR 350 351,750
-----------
Non-Agency Mortgage-Backed Securities--5.1%
Airplanes Pass Through Trust 1D 10.875%, '19 BB 560 582,400
CS First Boston Mtg. 95-AE1, B 7.182%, '27 AA- 1,354 1,306,689
GE Capital Mortgage Service 96-8, M 7.25%, '26 AA 250 234,922
Green Tree Financial Corp. 96-2, M1 7.60%, '27 AA- 1,075 1,054,172
Lehman Commercial Conduit 95-C2, B 7.18404%, '05 AA 1,650 1,605,656
Merrill Lynch Mortgage, Inc. 95-C2, B 7.53%, '21 Aa(c) 961 960,690
Merrill Lynch Mortgage, Inc. 96-C1, B 7.42%, '28 AA 660 649,275
Nationslink Funding Corp. 96-1, B 7.69%, '05 AA 450 449,719
Residential Funding Mtg. 96-S1, A11 7.10%, '26 AAA 1,500 1,399,453
Residential Funding Mtg. 96-S4, M1 7.25%, '26 AA 997 939,302
Resolution Trust Corp. 93-C1, B 8.75%, '24 Aa(c) 1,600 1,637,750
Resolution Trust Corp. 95-C2, B 6.80%, '27 Aa(c) 906 864,769
Resolution Trust Corp. 95-C1, B 6.90%, '27 Aa(c) 1,900 1,813,906
Resolution Trust Corp. 95-2, M1 7.15%, '29 Aa(c) 1,526 1,509,686
SASC 95-C1, C 7.375%, '24 A 930 899,775
SASC 95-C4, B 7%, '26 AA 1,650 1,576,266
SASC 96-CFL, C 6.525%, '28 A 520 494,650
Securitized Asset Sales 93-J, 2B 6.8076%, '23 A(c) 982 881,047
------------
18,860,127
------------
Oil--0.1%
Petropower Funding 144A 7.36%, '14 (d) BBB 500 466,550
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $20,232,248) 19,678,427
------------
FOREIGN GOVERNMENT SECURITIES--2.0%
Argentina--0.3%
Republic of Argentina Discount L-GL Euro 6.4375%, '23 (e) BB- 1,800 1,260,000
------------
Brazil--0.3%
Republic of Brazil Discount Series ZL Euro 6.50%, '24 (e) B+ 800 568,500
Republic of Brazil Par Z-L Euro 5%, '24 (e) B(c) 1,000 553,750
------------
1,122,250
------------
</TABLE>
See Notes to Financial Statements
2-18
<PAGE>
TOTAL RETURN SERIES
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------ -------------
<S> <C> <C> <C>
Colombia--0.9%
Republic of Colombia Yankee 7.25%, '04 BBB- $3,500 $ 3,233,125
-------------
Mexico--0.3%
United Mexican States Euro D 6.45313%, '19 (e)(f) BB 1,300 1,023,750
-------------
Panama--0.2%
Republic of Panama IRB WI, 3.50%, '49 (b)(g) NR 700 390,250
Republic of Panama PDI WI, '49 (b)(g) NR 650 398,125
-------------
788,375
-------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $7,120,901) 7,427,500
-------------
FOREIGN NON-CONVERTIBLE BONDS--0.9%
Colombia--0.9%
Financiera Energ. Nacional EMTN 9%, '99 BBB- 3,200 3,288,000
-------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $3,276,800) 3,288,000
-------------
TOTAL LONG-TERM INVESTMENTS--85.4%
(Identified cost $299,690,748) 317,485,464
-------------
SHORT-TERM OBLIGATIONS--11.8%
Commercial Paper--11.3%
GTE North, Inc. 5.37%, 7-1-96 A-1+ 2,050 2,050,000
Exxon Imperial U.S., Inc. 5.40%, 7-2-96 A-1+ 5,310 5,309,203
Warner-Lambert Co. 5.40%, 7-3-96 A-1+ 4,100 4,098,770
BellSouth Telecommunications, Inc. 5.34%, 7-10-96 A-1+ $5,000 4,993,325
Southwestern Bell Telephone Co. 5.37%, 7-11-96 A-1+ 3,540 3,534,720
BellSouth Telecommunications, Inc. 5.28%, 7-12-96 A-1+ 2,000 1,996,773
Campbell Soup Co. 5.33%, 7-12-96 A-1+ 300 299,511
Minnesota Mining & Manufacturing Co. 5.33%, 7-12-96 A-1+ 2,445 2,441,018
Ameritech Capital Funding 5.28%, 7-17-96 A-1+ 5,000 4,988,267
Gannett, Co. 5.33%, 7-25-96 A-1 3,185 3,173,683
Pfizer, Inc. 5.33%, 8-6-96 A-1+ 3,300 3,282,411
Warner-Lambert Co. 4.87%, 8-28-96 A-1+ 2,500 2,478,117
General Electric Capital Corp. 5.39%, 9-16-96 A-1+ 3,200 3,162,016
-------------
41,807,814
-------------
Federal Agency Securities--0.5%
Federal Home Loan Mortgage Corp. 4.82%, 8-15-96 2,000 1,986,290
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $43,799,124) 43,794,104
-------------
TOTAL INVESTMENTS--97.2%
(Identified cost $343,489,872) 361,279,568(a)
Cash and receivables, less liabilities--2.8% 10,287,335
-------------
NET ASSETS--100.0% $371,566,903
=============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $22,562,846 and gross
depreciation of $4,930,080 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$343,646,802.
(b) Non-income producing.
(c) As rated by Moodys, Fitch or Duff & Phelps.
(d) 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,
1996, these securities amounted to a value of $466,550 or 0.1% of net
assets.
(e) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(f) Rights incorporated as a unit.
(g) When issued.
(h) Segregated as collateral for the when issued obligation.
See Notes to Financial Statements
2-19
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $343,489,872) $361,279,568
Receivable for investment securities sold 15,230,158
Interest and dividends receivable 1,078,109
------------
Total assets 377,587,835
------------
Liabilities
Custodian 95,086
Payable for investment securities purchased 5,668,284
Investment advisory fee 176,723
Financial agent fee 18,161
Trustees' fee 6,249
Accrued expenses 56,429
------------
Total liabilities 6,020,932
------------
Net Assets $371,566,903
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $340,759,645
Undistributed net investment income 42,914
Accumulated net realized gain 12,974,648
Net unrealized appreciation 17,789,696
------------
Net Assets $371,566,903
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 26,600,021
============
Net asset value and offering price per share $13.97
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 4,294,481
Dividends 1,443,335
-----------
Total investment income 5,737,816
-----------
Expenses
Investment advisory fee 1,057,180
Financial agent fee 108,548
Custodian 34,481
Printing 18,783
Professional 13,140
Trustees 9,758
Miscellaneous 9,476
-----------
Total expenses 1,251,366
Custodian fees paid indirectly (10,185)
-----------
Net expenses 1,241,181
-----------
Net investment income 4,496,635
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 12,999,616
Net realized loss on foreign currency transactions (7,648)
Net change in unrealized appreciation (depreciation) of investment
securities (2,106,682)
-----------
Net gain on investments 10,885,286
-----------
Net increase in net assets resulting from operations $15,381,921
===========
</TABLE>
See Notes to Financial Statements
2-20
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 4,496,635 $ 10,538,823
Net realized gain 12,991,968 23,632,796
Net change in unrealized appreciation (depreciation) (2,106,682) 19,082,703
----------- ------------
Net increase in net assets resulting from operations 15,381,921 53,254,322
----------- ------------
From Distributions to Shareholders
Net investment income (4,607,887) (10,497,130)
Net realized gains (1,973,665) (21,419,046)
----------- ------------
Decrease in net assets from distributions to shareholders (6,581,552) (31,916,176)
----------- ------------
From Share Transactions
Proceeds from sales of shares (2,584,836 and 5,465,213 shares,
respectively) 35,821,665 75,182,133
Net asset value of shares issued from reinvestment of distributions
(476,262 and 2,341,879 shares, respectively) 6,581,552 31,916,176
Cost of shares repurchased (2,412,612 and 4,646,668 shares, respectively) (33,474,832) (63,681,697)
----------- ------------
Increase in net assets from share transactions 8,928,385 43,416,612
----------- ------------
Net increase in net assets 17,728,754 64,754,758
Net Assets
Beginning of period 353,838,149 289,083,391
----------- ------------
End of period (including undistributed net investment income of $42,914 and
$154,166, respectively) $371,566,903 $353,838,149
=========== ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months
Ended
6/30/96 Year Ended December 31,
(Unaudited) 1995 1994 1993 1992 1991
----------------- -------- -------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.63 $12.68 $13.71 $12.86 $12.97 $11.07
Income from investment operations
Net investment income 0.17 0.45 0.36(1)(3) 0.23(3) 0.37(3) 0.42(3)
Net realized and unrealized gain (loss) 0.43 1.84 (0.56) 1.17 0.99 2.76
--------------- ------- ------------ ------- ------- -------
Total from investment operations 0.60 2.29 (0.20) 1.40 1.36 3.18
--------------- ------- ------------ ------- ------- -------
Less distributions
Dividends from net investment income (0.18) (0.45) (0.37) (0.23) (0.37) (0.42)
Dividends from net realized gains (0.08) (0.89) (0.46) (0.32) (1.10) (0.86)
--------------- ------- ------------ ------- ------- -------
Total distributions (0.26) (1.34) (0.83) (0.55) (1.47) (1.28)
--------------- ------- ------------ ------- ------- -------
Change in net asset value 0.34 0.95 (1.03) 0.85 (0.11) 1.90
--------------- ------- ------------ ------- ------- -------
Net asset value, end of period $13.97 $13.63 $12.68 $13.71 $12.86 $12.97
=============== ======= ============ ======= ======= =======
Total return 4.36%(5) 18.22% -1.45% 11.02% 10.67% 29.44%
Ratios/supplemental data:
Net assets, end of period (thousands) $371,567 $353,838 $289,083 $256,011 $163,628 $98,415
Ratio to average net assets of:
Operating expenses 0.68%(2)(4) 0.67%(2) 0.74% 0.74% 0.50% 0.50%
Net investment income 2.47%(4) 3.28% 2.71% 1.82% 2.90% 3.48%
Portfolio turnover rate 130%(5) 170% 220% 269% 326% 255%
Average commission rate paid(6) $0.0506 N/A N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.001 per share.
(2) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(3) Computed using average shares outstanding.
(4) Annualized
(5) Not annualized
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-21
<PAGE>
INTERNATIONAL SERIES
Most foreign stock markets performed well over the last six months, with a
number of countries outpacing what is still a strong U.S. market. Overall,
markets in Asia were strong performers, but results varied widely by country.
Hong Kong, Indonesia, Malaysia, Taiwan and the Philippines posted stellar
returns, albeit for different reasons. In Asia, the major concern was that
economic growth was too fast versus too slow. However, upward pressure on
interest rates was modest and markets performed well, aided by high corporate
earnings growth.
Latin American markets also provided big gains during this reporting
cycle, helped by improving investor sentiment and falling interest rates.
Although economic growth is barely positive in the large economies of Mexico,
Brazil, and Argentina, inflation has remained well under control.
Additionally, capital inflows have once again resumed, allowing interest
rates and risk premiums to fall in a number of these countries.
In Europe, economic growth has been disappointing. Fortunately, continued
reductions in short-term interest rates throughout the region, as well as
declining long-term rates in the peripheral European countries of Spain,
Italy and Scandinavia, have supported market performance. Over the last six
months, the Morgan Stanley Capital International Europe Index earned 6.64%.
Lastly, the economic outlook in Japan has continued to improve at a very
slow, but steady pace. Earnings forecasts were generally revised upward
throughout the first quarter, and the continued weakness of the yen boosted
both investor sentiment and economic growth. Despite several political and
policy setbacks over the last six months, the Japanese stock market, as
measured by the Morgan Stanley Capital International Japan Index, gained
7.61% in local currency, but only 1.20% in U.S. dollars.
Phoenix Edge International Fund posted outstanding results over this
reporting period, coming in well ahead of the market. For the six months
ended June 30, 1996, the Fund provided a total return of 13.22%. As measured
by the Morgan Stanley Capital International EAFE Index, international markets
gained 4.67% for the same period.* All of these figures assume reinvestment
of any distributions, but exclude the effect of sales charges.
A number of factors contributed to the Fund's outstanding performance,
including our strong stock selection in Europe and the portfolio's
overweighted positions in Asia and Latin America. Also boosting results were
the Fund's underweighting in Japan and its currency hedges against the
Japanese yen and several European currencies.
We expect most foreign markets will continue to perform well in 1996. The
developed economies of Europe and Japan are growing below trend, employment
growth is less than robust and there is little inflationary pressure. Given this
environment, we believe that over the long term, growth stocks will provide the
most attractive investment opportunities. Our stock selection will continue to
focus on a number of compelling investment themes including Corporate
Restructuring/Creating Shareholder Value, Move to Outsourcing/Growth in
Services, Deregulating Telecommunications, and the Rise of the Global Consumer.
We expect the portfolio to remain overweighted in Asia, Latin America, and to a
lesser degree, Europe. Although the portfolio is currently underweighted in
Japan, we will consider increasing our exposure to this country if economic
growth continues to accelerate. Overall, we believe the Fund is well positioned
for the remainder of the year.
* 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 indices in Europe, Australia and the Far
East.
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
SHARES VALUE
--------- -------------
COMMON STOCKS--92.6%
Belgium--0.9%
Barco Industries NV (Electronics) 8,800 $ 1,410,072
------------
Brazil--1.7%
Telebras Sponsor ADR (Utility--Telephone) (b) 40,000 2,785,000
------------
Denmark--1.0%
Sophus Berendson A/S-Ord "B" (Conglomerates) 12,000 1,604,385
------------
Finland--0.6%
UPM-Kymmene Corp. (Paper & Forest Products) (b) 48,800 1,009,423
------------
France--5.8%
BIC SA (Entertainment, Leisure & Gaming) (b) 13,000 1,845,960
Carrefour Supermarche (Retail--Food) (b) 2,025 1,134,441
Christian Dior SA (Conglomerates) 13,400 1,743,978
Rexel (Electrical Equipment) 8,150 2,251,224
SGS-Thomson Microelectronics ADR (Electrical
Equipment) (b) 38,600 1,384,775
SGS-Thomson Microelectronics NV (Electrical
Equipment) (b) 2,900 101,962
Usinor Sacilor (Metals--Steel) 61,000 879,808
------------
9,342,148
------------
Germany--6.7%
Adidas AG (Textile & Apparel) 27,300 2,293,982
Degussa AG (Conglomerates) 3,950 1,340,888
Hoechst (Chemical) 68,000 2,305,236
Mannesmann AG (Conglomerates) 4,600 1,589,646
SGL Carbon AG (Chemical) (b) 27,800 3,251,035
------------
10,780,787
------------
Hong Kong--5.8%
Cheung Kong Holdings Ltd. (Real Estate) 229,200 1,650,785
Dao Heng Bank Group Ltd. (Banks) 188,000 726,206
First Pacific Co. (Conglomerates) 1,559,927 2,398,182
Guoco Group Ltd. (Diversified Financial Services) 281,000 1,339,565
See Notes to Financial Statements
2-22
<PAGE>
INTERNATIONAL SERIES
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C>
Hong Kong--continued
Henderson China Holdings Ltd. (Real Estate) 828 $ 1,851
Henderson Land Development Co. Ltd. (Real Estate) 83,000 621,924
Hutchison Whampoa (Conglomerates) 282,000 1,774,226
New World Development (Real Estate) 192,000 890,485
------------
9,403,224
------------
Indonesia--1.1%
PT Semen Gresik (Building & Materials) 350,000 1,018,830
Wicaksana Overseas (Wholesale & Distribution) 231,000 635,208
------------
1,654,038
------------
Italy--5.6%
Fila Holding SPA ADR (Textile & Apparel) 19,600 1,690,500
Gucci Group NV (Textile & Apparel) 20,600 1,334,794
Gucci Group NV-NY (Textile & Apparel) 19,000 1,225,500
Mediolanum SPA (Insurance) (b) 115,000 1,144,035
Parmalat Finanziaria SPA (Food) 1,500,000 2,015,720
Telecom Italia Mobile DRNC (Utility--Telephone
Cellular) 1,121,000 1,528,353
Telecom Italia Mobile SPA (Utility--Telephone
Cellular) 68,000 151,929
------------
9,090,831
------------
Japan--21.3%
Bank of Tokyo-Mitsubishi (Banks) 42,000 972,635
Circle K Japan Co. Ltd. (Retail--Food) 49,000 2,537,531
DDI Corporation (Utility--Telephone Cellular) 210 1,830,392
Fujikura Cable Ltd. (Metals & Mining) 105,000 869,245
Hitachi Maxell (Electronics) 42,000 876,903
Jusco Co. (Retail--Food) 65,000 2,127,526
Keyence Corp. Ltd. (Electronics) 13,000 1,766,024
Mitsubishi Estate Co. Ltd. (Real Estate) 111,000 1,528,153
Mitsubishi Heavy Industries Ltd. (Machinery) 209,000 1,815,960
Nippon Television Network (Publishing, Broadcasting,
Printing & Cable) 5,000 1,549,944
NKK Corp. (Metals & Mining) (b) 741,000 2,242,969
OSG Corp. (Machinery) 185,000 1,418,518
Ricoh Corp. Ltd. (Office & Business Equipment) (b) 163,000 1,723,902
SMC Corporation (Machinery) 22,000 1,700,927
Sony Corp. (Conglomerates) 30,000 1,972,075
Taisho Pharmaceutical (Health Care--Drugs) 78,000 1,685,427
Takeda Chemical Industries (Health Care--Drugs) (b) 91,000 1,609,571
TDK Corporation (Electronics) 27,000 1,609,936
Toyoda Machine Works (Machinery) 149,000 1,603,007
Toyota Motor Corp. (Autos & Trucks) 63,000 1,573,831
Yokogawa Electric (Electronics) 146,000 1,464,241
------------
34,478,717
------------
Mexico--2.1%
Grupo Televisa SA GDR (Publishing, Broadcasting,
Printing & Cable) (b) 83,500 2,567,625
Panamerican Beverages, Inc. (Beverages) 19,000 850,250
------------
3,417,875
------------
Netherlands--6.1%
Ahrend Groep NV (Office & Business Equipment) 41,748 1,871,066
Heineken NV (Beverages) 7,700 1,720,534
Netherlands--continued
IHC Caland NV (Oil Service & Equipment) 42,900 $ 2,111,196
Oce-Van der Grinten NV-Venlo (Office & Business
Equipment) 12,700 1,345,222
Randstad Holdings NV (Professional Services) 13,000 959,634
VNU Verenigd Bezit (Publishing, Broadcasting,
Printing, & Cable) 113,000 1,754,350
------------
9,762,002
------------
Peru--0.9%
CPT B Pen (Utility--Telephone) 708,945 1,440,308
------------
Portugal--1.1%
Portugal Telecom SA (Utility--Telephone) 68,700 1,794,500
------------
South Korea--3.7%
Daegu Bank (Banks) 63,060 913,591
Hana Bank (Banks) 46,789 827,832
Korea Exchange Bank (Banks) 6,720 88,600
Korea First Bank (Banks) (b) 205,000 1,693,225
Korea Mobile Telecommunications (Utility--Telephone
Cellular) 2,090 2,391,004
Samsung Electronics Ltd. GDR 144A (Electronics) (c) 148 7,548
Samsung Electronics Voting GDR 144A (Electronics) (c) 494 24,947
Shinhan Bank (Banks) 3,570 81,419
------------
6,028,166
------------
Spain--1.1%
Telefonica De Espana Ord. (Utility--Telephone) 94,000 1,730,274
------------
Sweden--3.7%
Astra AB Series A (Health Care--Drugs) 24,450 1,079,641
Frontec AB (Computer Software & Services) (b) 100,000 1,228,261
Skandia Forsakrings AB (Insurance) 66,000 1,745,637
Svedala Industri AB (Machinery) 98,000 1,853,543
------------
5,907,082
------------
Switzerland--4.5%
ABB AG-Bearer (Electrical Machinery) 530 655,513
ABB AG-Reg. (Electrical Machinery) 2,000 487,376
Roche Holdings AG Genussshein (Health
Care--Diversified) 140 1,067,673
Sandoz AG (Health Care--Drugs) 3,080 3,521,477
Swiss Reinsurance-Reg. (Insurance) (b) 1,520 1,560,562
------------
7,292,601
------------
Taiwan--2.4%
China Bills Finance Corp. (Commercial Finance) 162,000 177,782
Evergreen Marine (Transportation) 154,560 311,714
Fuh Hwa Securities Finance (Broker--Dealers) 195,000 389,729
Taiwan Semiconductor (Electronics) (b) 335,200 700,386
The Taiwan Fund, Inc. (Multi-Industry) 900 21,600
Ton Yi Industrial Corp. (Building & Materials) (b) 750,000 1,196,442
Yang Ming Marine Transport (Transportation) 760,000 1,121,258
------------
3,918,911
------------
Thailand--0.6%
Krung Thai Bank Public Co. Ltd. (Banks) 110,000 515,371
Land & House Co. Ltd. (Real Estate Development) 35,000 440,959
------------
956,330
------------
</TABLE>
See Notes to Financial Statements
2-23
<PAGE>
INTERNATIONAL SERIES
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C>
United Kingdom--14.7%
Astec (BSR) PLC (Electronics) 466,000 $ 1,086,247
British Aerospace Ord. (Aerospace & Defense) 181,000 2,748,050
British Airways PLC (Airlines) 297,000 2,556,923
Carlton Communications PLC (Publishing, Broadcasting,
Printing & Cable) 208,000 1,674,343
Compass Group PLC (Lodging & Restaurants) 168,000 1,537,716
Granada Group PLC (Entertainment, Leisure & Gaming) 143,000 1,915,556
Hays PLC (Professional Services) 239,000 1,682,471
Next PLC (Retail) 154,000 1,347,350
Shell Transport & Trading Co. PLC (Oil) 153,000 2,242,098
Standard Chartered PLC (Diversified Financial
Services) 244,000 2,430,521
Vodafone Group PLC (Utility--Telephone Cellular) 440,000 1,637,607
WPP Group (Advertising) 876,000 2,926,806
-------------
23,785,688
-------------
United States--1.2%
Latin American Discovery Fund, Inc. (Multi-Industry) 155,000 1,956,875
-------------
TOTAL COMMON STOCKS
(Identified cost $129,138,973) 149,549,237
-------------
PREFERRED STOCKS--0.7%
Germany--0.7%
Wella AG Preferred (Cosmetics & Soaps) 1,950 1,140,201
-------------
TOTAL PREFERRED STOCKS
(Identified cost $1,148,489) 1,140,201
-------------
RIGHTS--0.0%
South Korea--0.0%
Hana Bank-Rights (Banks) 46,789 43,433
-------------
TOTAL RIGHTS
(Identified cost $0) 43,433
-------------
TOTAL LONG-TERM INVESTMENTS--93.3%
(Identified cost $130,287,462) 150,732,871
-------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATINGS (000)
----------- ------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--5.3%
Commercial Paper--5.3%
Allied Signal 5.50%, 7-1-96 A-1+ $1,405 1,405,000
Southwestern Bell Telephone Co. 5.34%, 7-1-96 A-1+ 3,260 3,255,164
E.I. du Pont de Nemours & Co. 5.31%, 7-16-96 (d) A-1+ 3,985 3,976,183
-------------
8,636,347
-------------
TOTAL SHORT-TERM OBLIGATIONS--5.3%
(Identified cost $8,636,347) 8,636,347
-------------
TOTAL INVESTMENTS--98.6%
(Identified cost $138,923,809) 159,369,218(a)
Cash and receivables, less liabilities--1.4% 2,280,158
-------------
NET ASSETS--100.0% $161,649,376
=============
</TABLE>
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of
Total Long-Term Investments
Advertising 1.9%
Aerospace & Defense 1.8
Airlines 1.7
Autos & Trucks 1.0
Banks 3.9
Beverages 1.7
Broker-Dealers 0.3
Building & Materials 1.5
Chemical 3.7
Commercial Finance 0.1
Computer Software & Services 0.8
Conglomerates 8.2
Cosmetics & Soaps 0.8
Diversified Financial Services 2.5
Electrical Equipment 2.5
Electrical Machinery 0.8
Electronics 5.9
Entertainment, Leisure & Gaming 2.5
Food 1.3
Health Care--Diversified 0.7
Health Care--Drugs 5.2
Insurance 3.0
Lodging & Restaurants 1.0
Machinery 5.6
Metals & Mining 2.1
Metals--Steel 0.6
Multi-Industry 1.3
Office & Business Equipment 3.3
Oil 1.5
Oil Service & Equipment 1.4
Paper & Forest Products 0.7
Professional Services 1.8
Publishing, Broadcasting, Printing & Cable 5.0
Real Estate 3.4
Retail 0.9
Retail--Food 3.8
Textile & Apparel 4.3
Transportation 1.0
Utility--Telephone 5.1
Utility--Telephone Cellular 5.0
Wholesale & Distribution 0.4
------
100.0%
======
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $22,587,082 and gross
depreciation of $2,141,673 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$138,923,809.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
1996, these securities amounted to a value of $32,495 or 0.02% of net
assets.
(d) Segregated as collateral for forward currency contracts.
ADR--American Depository Receipt
See Notes to Financial Statements
2-24
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at market (Identified cost $138,923,809) $159,369,218
Foreign currency at value, (Identified cost $2,353,637) 2,341,302
Interest and dividends receivable 259,881
Receivable for investment securities sold 206,003
Tax reclaim receivable 83,562
Fund shares sold 69,857
Net unrealized appreciation on forward currency contracts 814,732
-------------
Total assets 163,144,555
-------------
Liabilities
Custodian 79
Payable for investment securities purchased 997,295
Payable for closed foreign currency contracts 174,253
Fund shares repurchased 106,479
Investment advisory fee 97,909
Custodian fee 60,795
Financial agent fee 7,382
Trustees' fee 6,292
Accrued expenses 44,695
-------------
Total liabilities 1,495,179
-------------
Net Assets $161,649,376
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $132,001,002
Undistributed net investment income 1,630,574
Accumulated net realized gain 6,355,861
Net unrealized appreciation 21,661,939
-------------
Net Assets $161,649,376
=============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 11,255,164
=============
Net asset value and offering price per share $ 14.36
=============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Dividends $ 1,387,098
Interest 296,958
Foreign taxes withheld (201,431)
-----------
Total investment income 1,482,625
-----------
Expenses
Investment advisory fee 555,378
Financial agent fee 44,430
Custodian 103,900
Printing 26,062
Professional 16,076
Trustees 9,696
Miscellaneous 14,141
-----------
Total expenses 769,683
-----------
Net investment income 712,942
-----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 6,749,988
Net realized gain on foreign currency transactions 1,339,810
Net change in unrealized appreciation (depreciation) on investments 8,561,095
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency
transactions 1,106,311
-----------
Net gain on investments 17,757,204
-----------
Net increase in net assets resulting from operations $18,470,146
===========
</TABLE>
See Notes to Financial Statements
2-25
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 712,942 $ 1,247,800
Net realized gain 8,089,798 1,951,578
Net change in unrealized appreciation (depreciation) 9,667,406 8,552,168
------------ -------------
Net increase in net assets resulting from operations 18,470,146 11,751,546
------------ -------------
From Distributions to Shareholders
Net investment income -- (455,953)
Net realized gains (202,537) (2,629,683)
------------ -------------
Decrease in net assets from distributions to shareholders (202,537) (3,085,636)
------------ -------------
From Share Transactions
Proceeds from sales of shares (1,985,681 and 3,785,668, respectively) 26,705,093 45,431,812
Net asset value of shares issued from reinvestment of distributions (14,141 and
238,826 shares, respectively) 202,537 3,085,636
Cost of shares repurchased (1,333,143 and 4,795,590 shares, respectively) (17,980,437) (57,355,995)
------------ -------------
Increase (decrease) in net assets from share transactions 8,927,193 (8,838,547)
------------ -------------
Net increase (decrease) in net assets 27,194,802 (172,637)
Net Assets
Beginning of period 134,454,574 134,627,211
------------ -------------
End of period (including undistributed net investment income of $1,630,574 and
$917,632, respectively) $161,649,376 $134,454,574
============ =============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding through the indicated period)
<TABLE>
<CAPTION>
Six
Months
Ended
6/30/96 Year Ended December 31,
(Unaudited) 1995 1994 1993 1992 1991
--------- ---------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.70 $11.85 $12.21 $8.82 $10.17 $9.07
Income from investment operations
Net investment income(2) 0.06 0.12 0.08 0.07(1) 0.09 0.24(1)
Net realized and unrealized gain
(loss) 1.62 1.02 (0.07) 3.32 (1.40) 1.53
--------- ---------- -------- ------- ------- --------
Total from investment operations 1.68 1.14 0.01 3.39 (1.31) 1.77
--------- ---------- -------- ------- ------- --------
Less distributions
Dividends from net investment income -- (0.04) (0.03) -- (0.04) (0.24)
Dividends from net realized gain (0.02) (0.25) (0.34) -- -- (0.41)
Distributions from paid in capital -- -- -- -- -- (0.02)
--------- ---------- -------- ------- ------- --------
Total distributions (0.02) (0.29) (0.37) -- (0.04) (0.67)
--------- ---------- -------- ------- ------- --------
Change in net asset value 1.66 0.85 (0.36) 3.39 (1.35) 1.10
--------- ---------- -------- ------- ------- --------
Net asset value, end of period $14.36 $12.70 $11.85 $12.21 $8.82 $10.17
========= ========== ======== ======= ======= ========
Total return 13.22%(4) 9.59% 0.03% 38.44% -12.89% 19.78%
Ratio/supplemental data:
Net assets, end of period (thousands) $161,649 $134,455 $134,627 $61,242 $13,772 $6,119
Ratio to average of net assets of:
Operating expenses 1.03%(3) 1.07% 1.10% 1.15% 1.50% 1.50%
Net investment income 0.96%(3) 0.95% 0.64% 0.49% 1.13% 2.44%
Portfolio turnover rate 71%(4) 249% 172% 193% 74% 104%
Average commission rate paid(5) $0.0259 N/A N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.05 and $0.02, respectively.
(2) Computed using average shares outstanding.
(3) Annualized
(4) Not annualized
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-26
<PAGE>
BALANCED SERIES
Over this latest reporting period, the outlook for the U.S. economy has
shifted dramatically. At year-end 1995, the consensus opinion on Wall Street
was for continued slow economic growth and benign inflation. During the first
six months of 1996, however, numerous reports were released which suggested
manufacturing activity, consumer spending and job growth had picked up
dramatically.
Bond investors reacted negatively to this upbeat economic news, believing
that a higher growth rate in the economy could potentially trigger higher
inflation, which would erode the value of their fixed-income securities.
Although we have not yet seen any compelling evidence of inflationary
pressures, bond prices continued to stumble during this reporting cycle as
interest rates climbed higher and talk of a Fed tightening became more
widespread. As measured by the Lehman Brothers Aggregate Bond Index, a
commonly used, unmanaged gauge of market performance, bonds returned a
disappointing -1.22% for this six-month period.
Despite rising interest rates and growing concerns about corporate
profitability, the stock market posted solid results aided by record mutual
fund inflows. The Standard & Poor's 500 Composite Stock Index, a commonly
used, unmanaged indicator of stock performance, was up 10.24% during the
first half of 1996. Throughout the reporting period, shifting investor
interest contributed to strong market rotation and a lack of clear industry
leadership. Nevertheless, the consumer staples and technology sectors
performed best over this six-month period, while utilities and basic
materials clearly lagged.
Phoenix Edge Balanced Series posted solid absolute gains over this
reporting period. For the six months ended June 30, 1996, the Fund provided a
total return of 3.10%. In contrast, the Fund's Balanced Benchmark returned
5.36% in the same period.* As with the broad market returns noted above, all
of these figures assume reinvestment of any distributions, but exclude the
effect of sales charges.
The Fund's overall results were hindered primarily because of its equity
holdings within the technology, health care and utility sectors. Positive
contributors to equity performance during the reporting period included our
consumer staples and energy holdings.
Although bond prices plummeted during this reporting cycle, the Fund's
fixed-income segment continued to perform well relative to its benchmark, the
Lehman Brothers Aggregate Bond Index. Our multi-sector approach to
fixed-income investing has continued to pay off and we are particularly
pleased with the strong performance from our emerging market debt, high-yield
and municipal bond holdings.
Looking ahead, we expect further volatility in the equity markets and
continued earnings shortfalls. Given this environment of slowing corporate
profits, we believe that it is increasingly a growth investor's market and we
will continue to seek out sustainable earnings growth stocks for this Fund.
Based on our thematic approach, we have identified a number of areas that
should provide significant growth potential. Within health care, our 21st
Century Medicine theme focuses on leading companies offering compelling
solutions to health care needs. Energy Technology identifies companies within
the oil services sector that provide productivity-enhancing solutions to
exploration and production companies. Lastly, our Deregulating Financial
Services theme capitalizes on companies that can benefit from the demographic
shift to savings and investments and the continued trend of government
deregulation.
Our short-term outlook for the fixed-income markets remains neutral.
Although bond prices have fallen dramatically over this reporting period, the
threat of rising inflation continues to plague the bond market. In terms of
our sector allocation strategy, we have scaled back our exposure to some of
the less traditional sectors of the bond market as a result of their strong
performance year-to-date. From a valuation standpoint, current yield spreads
on these bonds appear to be less compelling than they were at the beginning
of the year. Despite being much more selective, we are still maintaining
positions in such attractive sectors as emerging markets debt, commercial and
non-agency residential mortgage-backed securities, and taxable municipal
bonds.
As we move further into 1996, we continue to identify many investment
opportunities, while balancing our view with the realization that all markets
take a pause. Slower earnings growth and higher inflation may be near-term
catalysts for such a pause. Thus, we expect to continue holding higher cash
reserves to balance portfolio risk and await a better opportunity to more
fully invest.
* The Balanced Benchmark is calculated by Frank Russell Company based on the
following indexes: 55% S&P 500, 35% Lehman Brothers Aggregate Bond Index and
10% Treasury Bills.
2-27
<PAGE>
BALANCED SERIES
SCHEDULE OF INVESTMENTS
JUNE 30,1996
(Unaudited)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------ -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--20.5%
U.S. Treasury Bonds--1.6%
U.S. Treasury Bonds 6.50%, '05 AAA $3,300 $ 3,253,074
-------------
U.S. Treasury Notes--16.0%
U.S. Treasury Notes 7.25%, '96 AAA 7,400 7,452,244
U.S. Treasury Notes 5.75%, '97 AAA 6,300 6,287,337
U.S. Treasury Notes 6.375%, '99 AAA 3,875 3,884,688
U.S. Treasury Notes 6.875%, '00 AAA 3,500 3,552,990
U.S. Treasury Notes 6.625%, '01 AAA 4,400 4,428,875
U.S. Treasury Notes 6.875%, '06 AAA 2,750 2,780,074
U.S. Treasury Notes 6%, '26 AAA 3,695 3,277,003
-------------
31,663,211
-------------
Agency Mortgage-Backed Securities--2.9%
GNMA 6.50%, '23 AAA 2,528 2,356,339
GNMA 6.50%, '24 AAA 3,163 2,947,745
GNMA 6.50%, '26 AAA 470 437,430
-------------
5,741,514
-------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $41,340,833) 40,657,799
-------------
NON-CONVERTIBLE BONDS--6.4%
Non-Agency Mortgage-Backed Securities--5.7%
Airplanes Pass Through Trust 1D 10.875%, '19 BB 150 156,000
CS First Boston Mortgage 95-AE1, B 7.182%, '27 AA- 426 411,365
DLJ Mortgage Acceptance 96-CF1, A1B 144A 7.58%, '28 (c) AAA 400 401,000
GE Capital Mortgage Service 96-8, M 7.25%, '26 NR 250 234,922
Green Tree Financial Corp. 96-2 M1 7.60%, '27 AA- 675 661,922
Green Tree Financial Corp. 96-3, B1 7.70%, '27 BBB+ 625 618,750
Lehman Commercial Conduit 95-C2, B 7.184%, '05 AA 425 413,578
Merrill Lynch Mortgage, Inc., 95-C2 B 7.53%, '21 Aa(d) 241 240,924
Merrill Lynch Mortgage, Inc. 95-C3 B 7.14856%, '25 AA 400 385,563
Merrill Lynch Mortgage, Inc. 96-C1 B 7.42%, '28 NR 650 639,438
Nationslink Funding Corp. 96-1 B 7.69%, '05 AA 450 449,719
Residential Funding Mtg. 96-S1 A11 7.10%, '26 AAA 1,000 932,969
Residential Funding Mtg. 96-S4 M1 7.25%, '26 AA 997 939,302
Residential Funding Mtg. 96-S8 A-4 6.75%, '11 AAA 693 662,043
Resolution Trust Corp. 95-C2, B 6.80%, '27 Aa(d) 1,160 1,106,904
Resolution Trust Corp. 93-C1, B 8.75%, '24 Aa(d) 425 435,027
Resolution Trust Corp. 95-C1, B 6.90%, '27 Aa(d) 525 501,211
Resolution Trust Corp. 95-2, M1, 7.15%, '29 Aa(d) 673 666,038
SASC 96-CFL, C 6.525%, '28 A 480 456,600
Non-Agency Mortgage-Backed Securities--continued
SASC 95-C1, C 7.375%, '24 A $ 930 $ 899,775
-------------
11,213,050
-------------
Oil--0.2%
Petropower Funding 144A 7.36%, '14 (c) BBB 350 326,585
-------------
Paper & Forest Products--0.3%
Buckeye Cellulose Corp. 8.50%, '05 BB- 700 665,000
-------------
Publishing, Broadcasting, Printing & Cable--0.1%
Rogers Communications Inc. 9.125%, '06 BB- 150 139,500
-------------
Truckers & Marine--0.1%
Teekay Shipping Corp. 8.32%, '08 BB 230 216,200
-------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $12,976,507) 12,560,335
-------------
FOREIGN GOVERNMENT SECURITIES--3.0%
Argentina--0.7%
Republic of Argentina Bearer FRB 6.3125%, '05 (e) BB- 1,089 850,781
Republic of Argentina Par L-GP 5.25%, '23 (e) BB- 850 466,437
-------------
1,317,218
-------------
Brazil--0.4%
Republic of Brazil 20 yr. Series C Euro 8%, '14 B+ 1,207 752,076
-------------
Colombia--0.8%
Republic of Colombia Euro 9%, '97 NR 700 709,170
Republic of Colombia 7.25%, '03 BBB- 500 470,665
Republic of Colombia Yankee 7.25%, '04 BBB- 475 438,781
-------------
1,618,616
-------------
Mexico--0.4%
United Mexican States Discount A 6.3984%, '19 (e) BB 325 255,938
United Mexican States Series A Euro 6.25%, '19 BB 300 194,813
United Mexican States Series B Euro 6.25%, '19 (e) BB 350 227,281
United Mexican States Euro D 6.45313%, '19 (e) BB 250 196,875
-------------
874,907
-------------
Panama--0.4%
Republic of Panama PDI WI, '49 (b)(f) NR 1,250 765,625
-------------
Poland--0.3%
Poland PDI B 3.75%, '14 (e) Baa(d) 700 532,875
-------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $5,801,184) 5,861,317
-------------
FOREIGN NON-CONVERTIBLE BONDS--0.9%
Colombia--0.2%
Financiera Energ. Nacional EMTN 144A 9%, '99 (c) BBB- 440 452,100
-------------
Indonesia--0.2%
Asia Pulp & Paper Co. Yankee 11.75%, '05 BB 400 411,500
-------------
See Notes to Financial Statements
2-28
<PAGE>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------ -------------
FOREIGN NON-CONVERTIBLE BONDS--continued
Philippines--0.5%
Bank of Philippines PCIR Euro 5.75%, '17 BB $ 300 $ 239,250
Central Bank of Philippines FLIRB-B Euro 5%, '08 (e) Ba(d) 300 269,625
Central Bank of Philippines NMB Euro 6.3125%, '05 (e) BB 500 481,094
-------------
989,969
-------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $1,785,291) 1,853,569
-------------
MUNICIPAL BONDS--2.6%
California--0.9%
Kern County Pension Obligation Taxable 7.26%, '14 AAA 420 403,376
Long Beach Pension Obligation Taxable 6.87%, '06 AAA 230 223,185
Orange County Pension Series A Taxable 7.62%, '08 AAA 650 653,906
San Bernardino County Obligation Revenue Taxable 6.87%, '08 AAA 110 106,132
San Bernardino County Obligation Revenue Taxable 6.94%, '09 AAA 300 290,223
Ventura County Pension Taxable 6.54%, '05 AAA 260 249,506
-------------
1,926,328
-------------
Florida--0.8%
Miami Beach Special Obligation Taxable 8.60%, '21 AAA 875 934,981
University Miami Exchange Revenue A Taxable 7.65%, '20 AAA 680 662,204
-------------
1,597,185
-------------
Michigan--0.2%
Michigan Public Power Agency Sinker 5.25%, '18 AAA 485 445,715
-------------
South Carolina--0.2%
South Carolina Public Service Series C 5%, '25 AAA 345 297,735
-------------
Virginia--0.5%
Newport News Taxable Series B 7.05%, '25 AA- 1,000 919,590
-------------
TOTAL MUNICIPAL BONDS
(Identified cost $5,385,431) 5,186,553
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--0.7%
Tobacco--0.7%
RJR Nabisco, Inc. 9.25% PERCS 214,400 1,393,600
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $1,326,170) 1,393,600
-----------
COMMON STOCKS--53.7%
Aerospace & Defense--2.0%
Boeing Company 25,000 2,178,125
United Technologies Corp. 15,600 1,794,000
-----------
3,972,125
-----------
Airlines--2.0%
AMR Corp. (b) 24,600 2,238,600
Delta Airlines, Inc. 20,200 1,676,600
-----------
3,915,200
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
Banks--1.8%
Citicorp 19,000 $1,569,875
Nationsbank Corp. 24,400 2,016,050
------------
3,585,925
------------
Beverages--2.9%
Coca Cola Co. 51,600 2,521,950
Northland Cranberries, Inc. Class A 107,800 3,234,000
------------
5,755,950
------------
Chemical--0.9%
Monsanto Co. 55,000 1,787,500
------------
Computer Software & Services--4.0%
Computer Associates International, Inc. 21,200 1,510,500
Computer Sciences Corp. (b) 21,500 1,607,125
First Data Corp. 20,600 1,640,275
Microsoft Corp. (b) 9,500 1,141,187
Netscape Communications Corp. (b) 16,800 1,045,800
Oracle Systems Corp. (b) 26,300 1,037,206
------------
7,982,093
------------
Conglomerates--1.0%
Tyco International Ltd. 50,100 2,041,575
------------
Diversified Financial Services--1.3%
Green Tree Financial Corp. 31,600 987,500
Travelers Group, Inc. 35,200 1,606,000
------------
2,593,500
------------
Electrical Equipment--1.2%
General Electric Co. 27,500 2,378,750
------------
Electronics--2.1%
Intel Corp. 17,400 1,277,812
Perkin Elmer Corp. 20,700 998,775
Waters Corporation (b) 58,100 1,917,300
------------
4,193,887
------------
Entertainment, Leisure & Gaming--0.7%
Walt Disney Co. 23,400 1,471,275
------------
Healthcare--Diversified--1.1%
QIAGEN N.V. (b) 42,900 648,862
Vical, Inc. (b) 95,400 1,526,400
------------
2,175,262
------------
Healthcare--Drugs--1.0%
Merck & Co., Inc. 15,300 988,762
Pfizer, Inc. 13,200 942,150
------------
1,930,912
------------
Hospital Management & Services--1.0%
US Healthcare, Inc. 37,500 2,062,500
------------
Insurance--1.0%
Aetna Life & Casualty Co. 27,100 1,937,650
------------
Lodging & Restaurants--1.1%
Hilton Hotels Corp. 18,500 2,081,250
------------
Machinery--1.0%
Deere & Co. 49,900 1,996,000
------------
Medical Products & Supplies--4.1%
Boston Scientific Corp. (b) 47,900 2,155,500
Guidant Corp. 40,900 2,014,325
Medtronic, Inc. 43,900 2,458,400
Neuromedical Systems, Inc. (b) 95,300 1,429,500
------------
8,057,725
------------
</TABLE>
See Notes to Financial Statements
2-29
<PAGE>
BALANCED SERIES
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
Natural Gas--2.2%
Anadarko Petroleum Corp. 27,200 $ 1,577,600
Apache Corp. 30,800 1,012,550
Seagull Energy Corp. (b) 72,700 1,817,500
------------
4,407,650
------------
Office & Business Equipment--2.4%
Hewlett Packard Co. 14,200 1,414,675
Sun Microsystems, Inc. (b) 26,500 1,560,187
Xerox Corp. 33,900 1,813,650
------------
4,788,512
------------
Oil--2.5%
Louisiana Land & Exploration Co. 35,600 2,051,450
Noble Affilates, Inc. 49,000 1,849,750
Pogo Producing Co. 27,600 1,052,250
------------
4,953,450
------------
Oil Service & Equipment--4.6%
Digicon, Inc. (b) 40,900 685,075
Noble Drilling Corp. (b) 140,400 1,948,050
Pride Petroleum Services, Inc. (b) 58,600 835,050
Seacor Holdings, Inc. (b) 41,600 1,861,600
Sonat Offshore Drilling 39,200 1,979,600
Western Atlas, Inc. (b) 30,500 1,776,625
------------
9,086,000
------------
Professional Services--1.5%
Corrections Corporation of America (b) 27,600 1,932,000
HFS, Inc. (b) 15,300 1,071,000
------------
3,003,000
------------
Publishing, Broadcasting, Printing & Cable--2.1%
American Radio Systems Corp. (b) 25,600 1,100,800
Infinity Broadcasting Corp. Class A (b) 30,800 924,000
US Office Products Co. (b) 49,300 2,070,600
------------
4,095,400
------------
Retail--0.9%
Petsmart, Inc. (b) 26,800 1,279,700
Saks Holdings, Inc. (b) 12,000 409,500
------------
1,689,200
------------
Telecommunications Equipment--2.7%
Cisco Systems, Inc. (b) 29,300 1,659,112
McLeod, Inc. (b) 59,000 1,416,000
Newbridge Networks Corp. (b) 20,800 1,362,400
U.S. Robotics Corporation (b) 11,200 957,600
------------
5,395,112
------------
Tobacco--2.3%
Philip Morris Companies, Inc. 19,400 $ 2,017,600
RJR Nabisco Holdings Corp. (b) 79,100 2,452,100
------------
4,469,700
------------
Truckers & Marine--0.2%
Airnet Systems, Inc. (b) 27,200 435,200
------------
Utility--Telephone--2.1%
AT&T Corp. 38,000 2,356,000
MCI Communications Corp. 70,600 1,809,125
------------
4,165,125
------------
TOTAL COMMON STOCKS
(Identified cost $98,037,633) 106,407,428
------------
TOTAL LONG-TERM INVESTMENTS--87.8%
(Identified cost $166,653,049) 173,920,601
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
------------ ------ ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--14.2%
Commercial Paper--12.6%
GTE North 5.37%, 7-1-96 A-1+ $3,285 3,285,000
Exxon Imperial U.S., Inc. 5.40%, 7-2-96 A-1+ 670 669,900
General Electric Capital Corp. 5.34%, 7-2-96 A-1+ 2,100 2,099,689
Procter & Gamble Co. 5.27%, 7-2-96 A-1+ 1,525 1,524,777
Minnesota Mining & Manufacturing Co. 5.27% 7-8-96 A-1+ 2,890 2,887,039
Amoco Co. 5.28%, 7-9-96 A-1+ 4,750 4,744,427
Allied Signal, Inc. 5.37%, 7-10-96 A-1 2,255 2,251,973
Exxon Imperial U.S., Inc. 5.30%, 7-18-96 A-1+ 2,000 1,994,994
E.I. du Pont de Nemours & Co. 5.33%, 7-19-96 A-1+ 2,035 2,029,577
Procter & Gamble 5.35%, 7-26-96 A-1+ 3,500 3,486,997
------------
TOTAL COMMERCIAL PAPER 24,974,373
------------
Federal Agency Securities--1.6%
Federal National Mortgage Assoc. 5.22%, 7-3-96 3,045 3,044,117
------------
TOTAL FEDERAL AGENCY SECURITIES 3,044,117
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $28,018,487) 28,018,490
------------
TOTAL INVESTMENTS--102.0%
(Identified cost $194,671,536) 201,939,091(a)
Cash and receivables, less liabilities (2.0%) (3,931,668)
------------
NET INVESTMENTS--100.0% $198,007,423
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $10,425,664 and gross
depreciation of $3,339,025 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$194,852,452.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
1996, these securities amounted to a value of $778,685 or 0.4% of net
assets.
(d) As rated by Moody's, Fitch or Duff & Phelps.
(e) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(f) When issued.
See Notes to Financial Statements
2-30
<PAGE>
BALANCED SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $194,671,536) $201,939,091
Cash 1,148,970
Receivable for investment securities sold 5,767,218
Interest and dividends receivable 1,004,104
-------------
Total assets 209,859,383
-------------
Liabilities
Payable for investment securities purchased 11,707,526
Investment advisory fee 89,070
Financial agent fee 9,717
Trustees' fee 5,026
Accrued expenses 40,621
-------------
Total liabilities 11,851,960
-------------
Net Assets $198,007,423
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $180,830,942
Undistributed net investment income 58,981
Accumulated net realized gain 9,849,945
Net unrealized appreciation 7,267,555
-------------
Net Assets $198,007,423
=============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 16,443,914
=============
Net asset value and offering price per share $12.04
=============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 2,884,634
Dividends 605,134
------------
Total investment income 3,489,768
------------
Expenses
Investment advisory fee 537,260
Financial agent fee 58,610
Custodian 22,059
Printing 12,904
Professional 10,437
Trustees 8,321
Miscellaneous 2,159
------------
Total expenses 651,750
Custodian fees paid indirectly (4,621)
------------
Net expenses 647,129
------------
Net investment income 2,842,639
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 9,924,057
Net change in unrealized appreciation (depreciation) of investment
securities (6,787,130)
------------
Net gain on investments 3,136,927
------------
Net increase in net assets resulting from operations $ 5,979,566
============
</TABLE>
See Notes to Financial Statements
2-31
<PAGE>
BALANCED SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
6/30/96 Ended
(Unaudited) 12/31/95
------------ -------------
<S> <C> <C>
From Operations
Net investment income $ 2,842,639 $ 5,964,289
Net realized gain 9,924,057 17,178,873
Net change in unrealized appreciation (depreciation) (6,787,130) 13,277,376
------------ -------------
Net increase in net assets resulting from operations 5,979,566 36,420,538
------------ -------------
From Distributions to Shareholders
Net investment income (2,858,464) (6,004,047)
Net realized gains (7,060,272) (3,833,294)
------------ -------------
Decrease in net assets from distributions to shareholders (9,918,736) (9,837,341)
------------ -------------
From Share Transactions
Proceeds from sales of shares (1,586,503 and 2,915,001 shares,
respectively) 19,698,473 33,778,188
Net asset value of shares issued from reinvestment of distributions
(828,295 and 828,862 shares, respectively) 9,918,736 9,837,341
Cost of shares repurchased (1,687,159 and 3,333,135 shares, respectively) (20,972,535) (38,002,038)
------------ -------------
Increase in net assets from share transactions 8,644,674 5,613,491
------------ -------------
Net increase in net assets 4,705,504 32,196,688
Net Assets
Beginning of period 193,301,919 161,105,231
------------ -------------
End of period (including undistributed net investment income of $58,981
and $74,806, respectively) $198,007,423 $193,301,919
============ =============
</TABLE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Six Months From Inception
Ended 5/1/92
6/30/96 Year Ended December 31, to
(Unaudited) 1995 1994 1993 12/31/92
----------- -------------- -------------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.30 $10.53 $11.31 $10.77 $10.00
Income from investment operations
Net investment income 0.18 0.40(3) 0.38(2)(3) 0.32(2)(3) 0.19(3)
Net realized and unrealized gain (loss) 0.19 2.02 (0.70) 0.60 0.77
----------- -------------- -------------- ---------- ------------------
Total from investment operations 0.37 2.42 (0.32) 0.92 0.96
----------- -------------- -------------- ---------- ------------------
Less distributions
Dividends from net investment income (0.18) (0.40) (0.36) (0.32) (0.19)
Dividends from net realized gains (0.45) (0.25) (0.10) (0.06) --
----------- -------------- -------------- ---------- ------------------
Total distributions (0.63) (0.65) (0.46) (0.38) (0.19)
----------- -------------- -------------- ---------- ------------------
Change in net asset value (0.26) 1.77 (0.78) 0.54 0.77
----------- -------------- -------------- ---------- ------------------
Net asset value, end of period $12.04 $12.30 $10.53 $11.31 $10.77
=========== ============== ============== ========== ==================
Total return 3.10%(5) 23.28% -2.80% 8.57% 9.72%
Ratios/supplemental data:
Net assets, end of period (thousands) $198,007 $193,302 $161,105 $158,144 $54,467
Ratio to average net assets of:
Operating expenses 0.66%(1)(4) 0.65%(4) 0.69% 0.70% 0.50%(1)
Net investment income 2.89%(1) 3.44% 3.44% 3.16% 3.59%(1)
Portfolio turnover rate 133%(5) 223% 171% 161% 110%(1)
Average commission rate paid(6) $0.0648 N/A N/A N/A N/A
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.001 and $0.001 per share, respectively.
(3) Computed using average shares outstanding.
(4) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(5) Not annualized
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-32
<PAGE>
REAL ESTATE SERIES
Trends in the U.S. real estate market continue to be positive. Stable
economic growth is generating substantial levels of demand. Most markets and
property types enjoy high occupancy rates, rising rents and ample buyers and
sellers for most product. Even the hotel industry is enjoying renewed
attention as institutional investors resume debt and equity financing. Most
significantly, new supply remains constrained. With the exception of a
handful of apartment markets in the south, new construction is insufficient
to satisfy demand. Institutions and public real estate companies have been
particularly vigilant for warning signs of overdevelopment.
The real estate securities market continues to expand at a robust pace. As
of June 30, 1996, total equity REIT market capitalization was $56.1 billion,
up from $49.6 billion at the end of 1995. Continuing a trend from last year,
growth is driven predominantly by secondary equity offerings. During the
first six months of this year, 30 secondary offerings totaling $2.7 billion
in new equity capital were issued. In contrast, no equity REIT initial public
offerings (IPOs) were completed during this period. High-quality REITs are
taking advantage of this access to capital to fund portfolio growth. The
average REIT now has an equity market capitalization in excess of $330
million.
Recent industry announcements reveal a large number of major pension funds
are considering new or increased allocations to equity real estate
securities. One recent survey of leading real estate managers found a 109%
increase in institutional REIT allocations during a 15 month period ending
March 31, 1996. We view this trend as positive because these institutions are
experienced real estate investors with conservative, long-term strategies. As
these institutions constitute a greater percentage of shareholders, we
believe the REIT market's stability will be enhanced.
Phoenix Edge Real Estate Fund performed solidly during this reporting
period, but lagged slightly behind the REIT market. For the six-month period
ended June 30, 1996, the Fund posted a total return of 6.32%, while the
NAREIT Equity Index earned 6.81% for the same period.* All these figures
assume reinvestment of any distributions, but exclude the effect of sales
charges.
Since the Fund's inception, one of our primary strategies has been to
concentrate holdings in the sectors with the better prospects for growth,
notably the office and hotel sectors. The portfolio is overweighted as well
in the apartment sector, which we feel offers more stable earnings growth and
reduced risk. Since inception, the Fund has also maintained an underweighted
allocation to retail due to weak real estate fundamentals and the shaky
financial condition of some major retailers. While this strategy generated
superior returns for most of 1995, a strong rebound in retail REIT
stocks--particularly regional mall REITs--during 1996 has been a surprise.
The recent improvement in the regional mall REIT performance can be
attributed to enthusiasm for the proposed merger of Debartolo and Simon,
improving apparel sales for many mall tenants, and a growing perception that
recent share prices offer a significant discount to the underlying value of
the real estate. We continue to believe that the broad retail industry has
some supply/demand issues to resolve, but the opportunity to buy these fine
companies at such a discount to underlying property values is attractive.
During the first half of 1996, the Fund increased its target allocation in
the regional mall sector to take advantage of some undervalued and
higher-yielding companies.
Although overshadowed by broad strength in the equity markets, REITs have
posted attractive returns during the past six months. From January 1, 1996
through June 30, 1996, the NAREIT Equity Index posted a total return of
6.81%. Additionally, REITs appear conservatively valued relative to
alternative investments. Comparing the current yield of equity REITs to
stocks and bonds as of June 30, 1996, reveals a 520 basis point premium over
the Standard & Poor's 500 Composite Stock Index and a 58 basis point premium
over 10-year treasury bonds. Although the premium over the bond yield is down
since the beginning of the year, both of these spreads remain high relative
to historic levels.
In addition to this current yield premium, we believe that improving
fundamentals in the real estate industry point to continued earnings growth
for REITs. The strongest improvement should be concentrated in the office and
hotel sectors, where rapidly increasing occupancy rates and rental rates are
driving property cash flow growth. Additionally, these companies have
excellent investment opportunities currently, and can expand their portfolios
through accretive property purchases.
* 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, 1996
(Unaudited)
SHARES VALUE
------ ------------
COMMON STOCKS--96.9%
REAL ESTATE INVESTMENT TRUSTS--95.1%
COMMERCIAL--22.1%
Office/Industrial--16.2%
Beacon Properties Corp. 3,900 $ 99,937
Duke Realty Investments, Inc. 9,000 272,250
Highwoods Properties, Inc. 14,200 392,275
Security Capital Industrial Trust 20,683 364,538
Spieker Properties, Inc. 14,800 403,300
Weeks Corporation 10,700 278,200
------------
1,810,500
------------
Storage--5.9%
Shurgard Storage Centers, Inc. 10,900 $ 275,225
Storage USA, Inc. 11,700 377,325
------------
652,550
------------
TOTAL COMMERCIAL 2,463,050
------------
HEALTH CARE--7.8%
Health Care Properties Inv., Inc. 13,000 438,750
Nationwide Health Properties, Inc. 20,400 430,950
------------
869,700
------------
See Notes to Financial Statements
2-33
<PAGE>
REAL ESTATE SERIES
SHARES VALUE
------ ------------
RESIDENTIAL--32.2%
Apartments--28.7%
Avalon Properties, Inc. 10,200 $ 221,850
Bay Apartment Community, Inc. 12,700 328,612
Camden Property Trust 7,100 168,625
Equity Residential Properties Trust 11,600 381,350
Evans Withycombe Residential, Inc. 14,900 311,037
Irvine Apartment Communities, Inc. 13,100 263,637
Merry Land & Investment Co. 17,700 371,700
Oasis Residential, Inc. 12,600 275,625
Post Properties, Inc. 9,600 339,600
Security Capital Pacific Trust 9,800 213,150
United Dominion Realty Trust 22,800 327,750
------------
3,202,936
------------
Manufactured Homes--3.5%
Manufactured Home Communities 9,000 173,250
Sun Communities, Inc. 8,000 215,000
------------
388,250
------------
TOTAL RESIDENTIAL 3,591,186
------------
RETAIL--26.0%
Community/Neighborhood--11.6%
Developers Diversified Realty Corp. 8,300 264,563
Federal Realty Investment Trust 9,300 209,250
Kimco Realty Corp. 7,800 220,350
Regency Realty Corp. 5,900 123,900
Vornado Realty Trust 7,100 290,213
Weingarten Realty Investors 4,900 189,875
------------
1,298,151
------------
Factory Outlets--3.4%
Chelsea G.C.A. Realty, Inc. 11,800 374,650
------------
Regional Mall--11.0%
DeBartolo Realty Corp. 13,000 209,625
J.P. Realty, Inc. 11,600 247,950
Rouse Company 4,200 108,675
Simon Property Group, Inc. 13,100 320,950
Taubman Centers, Inc. 30,800 342,650
------------
1,229,850
------------
TOTAL RETAIL 2,902,651
------------
SPECIALTY--7.0%
Hotels--7.0%
FelCor Suite Hotels, Inc. 10,600 $ 323,300
Patroit American Hospitality 11,200 331,800
Starwood Lodging Trust 3,300 120,038
------------
775,138
------------
TOTAL SPECIALTY 775,138
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(Identified cost $9,526,430) 10,601,725
------------
REAL ESTATE OPERATING COMPANIES--1.8%
Hotels--1.8%
Host Marriott Corp. (b) 11,000 144,375
Interstate Hotels Company (b) 600 13,350
Red Roof Inns, Inc. (b) 3,400 48,025
------------
205,750
------------
TOTAL REAL ESTATE OPERATING COMPANIES
(Identified cost $180,194) 205,750
------------
TOTAL COMMON STOCKS
(Identified cost $9,706,624) 10,807,475
------------
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- -------
SHORT-TERM OBLIGATIONS--2.2%
Commercial Paper--2.2%
Emerson Electric Co.
5.55%, 7-1-96 A-1+ $115 115,000
Merrill Lynch 5.38%,
7-1-96 A-1+ 130 130,000
--------------
245,000
--------------
TOTAL SHORT-TERM
OBLIGATIONS
(Identified cost $245,000) 245,000
--------------
TOTAL INVESTMENTS--99.1%
(Identified cost $9,951,624) 11,052,475(a)
Cash and receivables, less liabilities--0.9% 96,348
--------------
NET ASSETS--100.0% $11,148,823
==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,140,416 and gross
depreciation of $39,565 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$9,951,624.
(b) Non-income producing.
See Notes to Financial Statements
2-34
<PAGE>
REAL ESTATE SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $9,951,624) $11,052,475
Receivable for fund shares sold 52,505
Cash 633
Dividends and interest receivable 81,663
------------
Total assets 11,187,276
------------
Liabilities
Payable for fund shares repurchased 41
Trustees' fee 6,492
Investment advisory fee 1,713
Financial agent fee 531
Accrued expenses 29,676
------------
Total liabilities 38,453
------------
Net Assets $11,148,823
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 9,961,802
Undistributed net investment income 1,715
Accumulated net realized gain 84,455
Net unrealized appreciation 1,100,851
------------
Net Assets $11,148,823
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 950,510
============
Net asset value and offering price per share $ 11.73
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Dividends $324,551
Interest 3,457
---------
Total investment income 328,008
---------
Expenses
Investment advisory fee 36,228
Financial agent fee 2,898
Printing 15,417
Trustees 10,937
Professional 9,967
Custodian 5,660
Miscellaneous 3,071
Expenses borne by investment adviser (35,874)
---------
Total expenses 48,304
---------
Net investment income 279,704
---------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 84,535
Net change in unrealized appreciation (depreciation) of investment
securities 254,901
---------
Net gain on investments 339,436
---------
Net increase in net assets resulting from operations $619,140
=========
</TABLE>
See Notes to Financial Statements
2-35
<PAGE>
REAL ESTATE SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended From Inception
6/30/96 5/1/95 to
(Unaudited) 12/31/95
----------- --------------
<S> <C> <C>
From Operations
Net investment income $ 279,704 $ 215,523
Net realized gain 84,535 44,211
Net change in unrealized appreciation (depreciation) 254,901 845,950
----------- --------------
Net increase in net assets resulting from operations 619,140 1,105,684
----------- --------------
From Distributions to Shareholders
Net investment income (277,989) (215,523)
Net realized gains -- (44,211)
Tax return of capital -- (19,252)
Distribution in excess of net realized gains -- (80)
----------- --------------
Decrease in net assets from distributions to shareholders (277,989) (279,066)
----------- --------------
From Share Transactions
Proceeds from sales of shares (255,606 and 784,136 shares, respectively) 2,929,804 8,019,985
Net asset value of shares issued from reinvestment of distributions
(24,068 and 25,636 shares, respectively) 277,990 279,066
Cost of shares repurchased (76,839 and 62,097 shares, respectively) (872,664) (653,127)
----------- --------------
Increase in net assets from share transactions 2,335,130 7,645,924
----------- --------------
Net increase in net assets 2,676,281 8,472,542
Net Assets
Beginning of period 8,472,542 0
----------- --------------
End of period (including undistributed net investment income of $1,715 and
$0, respectively) $11,148,823 $8,472,542
=========== ==============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Six Months
Ended From Inception
6/30/96 5/1/95 to
(Unaudited) 12/31/95
--------------- --------------
Net asset value, beginning of period $11.33 $10.00
Income from investment operations
Net investment income 0.31(3) 0.33(3)
Net realized and unrealized gain 0.40 1.42
--------------- --------------
Total from investment operations 0.71 1.75
--------------- --------------
Less distributions
Dividends from net investment income (0.31) (0.33)
Dividends from net realized gains -- (0.06)
Tax return of capital -- (0.03)
--------------- --------------
Total distributions (0.31) (0.42)
--------------- --------------
Change in net asset value 0.40 1.33
--------------- --------------
Net asset value, end of period $11.73 $11.33
=============== ==============
Total return 6.32%(2) 17.79%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $11,149 $8,473
Ratio to average net assets of:
Operating expenses 1.00%(1) 1.00%(1)
Net investment income 5.76%(1) 4.80%(1)
Portfolio turnover rate 7%(2) 10%(2)
Average commission rate paid(4) $0.0459 N/A
(1) Annualized
(2) Not annualized
(3) Includes reimbursement of operating expenses by investment adviser of
$0.04 and $0.07 per share, respectively.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-36
<PAGE>
STRATEGIC THEME SERIES
The first half of 1996 saw a continuation of the strong stock market
dating back to early 1995. Equities continued to advance, shrugging off
rising interest rates and mounting earnings concerns. The economy surprised
most analysts by growing faster than expected--raising the specter of higher
inflation. Despite such concerns, the stock market held up very well, as it
was pushed higher by increasing investor flows into equity mutual funds.
Phoenix Edge Strategic Theme Fund got off to a strong start during its
first reporting period. Since the Fund's inception on January 29, 1996,
through June 30, 1996, the Fund posted a total return of 9.24%. During the
same period, the Standard & Poor's 500 Composite Stock Index, a commonly
used, unmanaged measure of U.S. stock market performance, returned 9.10%. All
of these figures assume reinvestment of any distributions, but exclude the
effect of sales charges.
During this reporting cycle, we incorporated a number of Phoenix
investment themes into the portfolio with outstanding results. Within the
energy and professional services industries, our Energy Technology and Need
for Security themes performed strongly. Our technology holdings, especially
those related to our Wireless Wave and Software Solutions themes also
contributed positively to performance. Some of our biggest individual gainers
for the period included Diamond Offshore Drilling, ADT Limited, Cascade
Communications and U.S. Robotics.
Looking ahead, we expect further volatility in the equity markets and
continued earnings shortfalls. Given this environment of slowing corporate
profits, we believe that it is increasingly a growth investor's market and we
will continue to seek out sustainable earnings growth stocks for this Fund.
Based on our thematic approach, we have identified a number of areas that
should provide significant growth potential. Within health care, our 21st
Century Medicine theme focuses on leading companies offering compelling
solutions to health care needs. Energy Technology identifies companies within
the oil services sector that provide productivity-enhancing solutions to
exploration and production companies. Lastly, our Move to Outsourcing theme
capitalizes on the growing trend by corporate America to increase
productivity and concentrate on core businesses.
As we move further into 1996, we continue to identify many investment
opportunities, while balancing our view with the realization that all markets
take a pause. Slower earnings growth and higher inflation may be near-term
catalysts for such a pause. Thus, we expect to continue holding higher cash
reserves to balance portfolio risk and await a better opportunity to more
fully invest.
[typeset representation of pie chart]
Short-term Obligations and Cash 20.2%
21st Century Medicine 9.0%
Energy Technology 9.0%
Move to Outsourcing 8.6%
Hybrid Network 6.9%
Need for Security 6.9%
Retail Revival 5.5%
Deregulating Financial Services 5.2%
America's Educational Crisis 5.0%
Environmental Crisis Recycled 4.8%
Deregulating Media 4.5%
Special Situations 4.2%
Healthcare Productivity 3.3%
Quest for Clean Water 2.9%
The Age of Assisted Living 2.1%
Internet Connection 1.9%
[end pie chart]
2-37
<PAGE>
STRATEGIC THEME SERIES
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
SHARES VALUE
------ ------------
COMMON STOCKS--78.6%
Banks--Money Center--1.0%
Bankers Trust New York Corp. 2,000 $ 147,750
------------
Commercial Services--Miscellaneous--10.1%
Accustaff, Inc. (b) 8,000 218,000
Corestaff, Inc. (b) 4,500 201,375
CRA Managed Care, Inc. (b) 6,000 268,500
Interim Services, Inc. (b) 7,000 301,000
Manpower, Inc. 7,000 274,750
Pittston Brink's Group 7,500 218,437
------------
1,482,062
------------
Commercial Services--Schools--5.4%
Apollo Group, Inc. Class A (b) 7,875 220,500
Devry, Inc. (b) 4,000 180,000
ITT Educational Services, Inc. (b) 3,000 86,625
National Education Corp. (b) 12,000 171,000
Youth Services International, Inc. (b) 7,500 133,125
------------
791,250
------------
Commercial Services--Security/Safety--4.5%
ADT Ltd. (b) 10,000 188,750
Corrections Corporation of America (b) 3,000 210,000
Esmor Correctional Services, Inc. (b) 4,000 61,000
Wackenhut Corrections Corporation (b) 6,000 200,250
------------
660,000
------------
Computer--Integrated Systems--1.1%
Medic Computer Systems, Inc. (b) 2,000 162,250
------------
Computer--Local Networks--2.1%
Cisco Systems, Inc. (b) 3,100 175,537
Shiva Corp. (b) 1,600 128,000
------------
303,537
------------
Computer--Peripheral Equipment--1.1%
Security Dynamics Technologies, Inc. (b) 1,000 82,250
U.S. Robotics Corporation (b) 1,000 85,500
------------
167,750
------------
Computer--Services--2.2%
HBO & Co. 2,000 135,500
Shared Medical Systems Corp. 3,000 192,750
------------
328,250
------------
Computer--Software--0.8%
Intuit, Inc. (b) 2,500 118,125
------------
Electric--Scientific Instrument--1.7%
Dionex Corp. (b) 3,000 96,750
GeoScience Corporation (b) 4,000 56,000
Input/Output, Inc. (b) 3,000 97,125
------------
249,875
------------
Electrical--Connectors--0.9%
Amphenol Corp. Class A (b) 6,000 138,000
------------
Electrical-Equipment--1.2%
General Electric Co. 2,000 173,000
------------
Finance--Investment Bankers--2.8%
Alex Brown, Inc. 1,900 107,350
Merrill Lynch & Company, Inc. 2,500 162,813
Morgan Stanley Group, Inc. 3,000 147,375
------------
417,538
------------
Insurance--Diversified--0.7%
Travelers Group, Inc. 2,250 102,656
------------
Insurance--Property/Casualty/Title--0.7%
American International Group, Inc. 1,000 $ 98,625
------------
Media--Books--0.5%
Golden Books Family Entertainment, Inc. (b) 6,000 72,000
------------
Media--Radio/TV--4.5%
American Radio Systems Corp. (b) 6,000 258,000
Emmis Broadcasting Corp. (b) 3,000 150,000
Evergreen Media Corp. Class A (b) 6,000 256,500
------------
664,500
------------
Medical--Biomed/Genetics--1.7%
Amgen, Inc. (b) 2,000 108,000
Chiron Corp. (b) 1,500 147,000
------------
255,000
------------
Medical--Ethical Drugs--2.2%
Dura Pharmaceuticals, Inc. (b) 2.200 112,000
Fuisz Technologies Ltd. (b) 8,000 152,000
Pharmacia & Upjohn, Inc. 1,500 66,563
------------
330,563
------------
Medical--Generic Drugs--1.4%
Medicis Pharmaceutical Corp. (b) 5,000 206,250
------------
Medical--Instruments--1.1%
U.S. Surgical Corp. 5,000 155,000
------------
Medical--Output/Home Care--4.0%
American HomePatient, Inc. (b) 4,000 177,000
Apria Healthcare Group, Inc. (b) 4,000 125,500
Caremark International, Inc. 6,000 151,500
Housecall Medical Resources, Inc. (b) 2,000 38,250
Pediatric Services of America (b) 4,000 91,000
------------
583,250
------------
Medical/Dental--Supplies--0.7%
Physician Sales & Service, Inc. (b) 4,400 106,700
------------
Oil & Gas--Drilling--2.6%
Diamond Offshore Drilling (b) 4,000 229,000
Sonat Offshore Drilling 3,000 151,500
------------
380,500
------------
Oil & Gas--Field Services--1.7%
Schlumberger Ltd. 3,000 252,750
------------
Oil & Gas--Machinery/Equipment--1.8%
Varco International, Inc. (b) 15,000 271,875
------------
Oil & Gas--Refining Marketing--1.0%
Tosco Corp. 3,000 150,750
------------
Oil & Gas--U.S. Exploration & Production--2.7%
Chesapeake Energy Corp. (b) 3,000 269,625
Seagull Energy Corp. (b) 5,000 125,000
------------
394,625
------------
Pollution Control--Equipment--2.2%
Culligan Water Technologies, Inc. (b) 5,000 190,000
Ionics, Inc. (b) 3,000 141,000
------------
331,000
------------
Pollution Control--Services--4.8%
Sanifill, Inc. (b) 5,000 246,250
Superior Services, Inc. (b) 3,000 51,000
Tetra Tech, Inc. (b) 3,750 75,000
U.S.A. Waste Services, Inc. (b) 2,500 74,063
United Waste Systems, Inc. (b) 8,000 258,000
------------
704,313
------------
See Notes to Financial Statements
2-38
<PAGE>
STRATEGIC THEME SERIES
SHARES VALUE
------ ------------
Retail--Apparel/Shoe--0.7%
Ross Stores, Inc. 3,000 $ 104,250
------------
Retail--Miscellaneous/Diversified--1.6%
Petsmart, Inc. (b) 5,000 238,750
------------
Retail--Supermarkets--1.1%
Whole Foods Market, Inc. (b) 6,000 159,000
------------
Retail/Wholesale--Building Products--1.1%
Home Depot, Inc. 3,000 162,000
------------
Retail/Wholesale--Jewelry--1.0%
Tiffany & Co. 2,000 146,000
------------
Telecommunications--Equipment--3.9%
Cascade Communications Corp. (b) 2,000 136,000
Newbridge Networks Corp. (b) 3,000 196,500
Pairgain Technologies, Inc. (b) 4,000 248,000
------------
580,500
------------
TOTAL COMMON STOCKS
(Identified cost $10,601,030) 11,590,244
------------
FOREIGN COMMON STOCKS--1.2%
Shoes & Retail Apparel--1.2%
Fila Holding SPA, ADR (Italy) 2,000 172,500
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $178,048) 172,500
------------
TOTAL LONG-TERM INVESTMENTS--79.8%
(Identified cost $10,779,078) 11,762,744
------------
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
----------- ------- --------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--23.9%
Commercial Paper--19.2%
GTE North, Inc. 5.37%, 7-1-96 A-1+ $500 $ 500,000
McDonald's Corp. 5.33%, 7-1-96 A-1+ 225 225,000
AlliedSignal, Inc. 5.33%, 7-2-96 A-1 300 299,955
McKenna Triangle National Corp. 5.37%, 7-8-96 A-1+ 400 399,582
Minnesota Mining & Manufacturing Co. 5.32%, 7-9-96 A-1+ 150 149,823
BellSouth Telecommunications, Inc. 5.34%, 7-10-96 A-1+ 400 399,466
E.I. du Pont de Nemours & Co. 5.33%, 7-19-96 A-1+ 230 229,387
E.I. du Pont de Nemours & Co. 5.35%, 7-22-96 A-1+ 280 279,126
Pfizer, Inc. 5.35%, 7-29-96 A-1+ 350 348,544
--------------
2,830,883
--------------
Federal Agency Securities--4.7%
Federal Home Loan Mortgage Assoc. 5.25%, 7-1-96 385 385,000
Federal National Mortgage Assoc. 5.25%, 7-10-96 300 299,606
--------------
684,606
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $3,515,489) 3,515,489
--------------
TOTAL INVESTMENTS--103.7%
(Identified cost $14,294,567) 15,278,233(a)
Cash and receivables, less liabilities--(3.7%) (542,388)
--------------
NET ASSETS--100.0% $14,735,845
==============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,312,145 and gross
depreciation of $329,925 for income tax purposes. At June 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$14,296,013.
(b) Non-income producing.
ADR -- American Depository Receipt
See Notes to Financial Statements
2-39
<PAGE>
STRATEGIC THEME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $14,294,567) $15,278,233
Cash 63,664
Receivable for investment securities sold 30,625
Fund shares sold 68,606
Interest and dividends receivable 4,225
------------
Total assets 15,445,353
------------
Liabilities
Payable for investment securities purchased 671,106
Trustees' fee 7,924
Investment advisory fee 4,266
Financial agent fee 655
Accrued expenses 25,557
------------
Total liabilities 709,508
------------
Net Assets $14,735,845
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $14,098,895
Undistributed net investment income 12,203
Accumulated net realized loss (358,919)
Net unrealized appreciation 983,666
------------
Net Assets $14,735,845
============
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization 1,348,933
============
Net asset value and offering price per share $10.92
============
</TABLE>
STATEMENT OF OPERATIONS
From inception January 29, 1996 to June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 39,221
Dividends 9,793
----------
Total investment income 49,014
----------
Expenses
Investment advisory fee 27,608
Financial agent fee 2,209
Printing 11,145
Trustees 7,924
Professional 7,765
Custodian 5,763
Miscellaneous 883
Expenses borne by investment adviser (26,486)
----------
Total expenses 36,811
----------
Net investment income 12,203
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss from investment transactions (358,919)
Net change in unrealized appreciation (depreciation) of investment
securities 983,666
----------
Net gain on investments 624,747
----------
Net increase in net assets resulting from operations $ 636,950
==========
</TABLE>
See Notes to Financial Statements
2-40
<PAGE>
STRATEGIC THEME SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
1/29/96 to
6/30/96
(Unaudited)
--------------
<S> <C>
From Operations
Net investment income $ 12,203
Net realized loss (358,919)
Net change in unrealized appreciation (depreciation) 983,666
--------------
Net increase in net assets resulting from operations 636,950
--------------
From Share Transactions
Proceeds from sales of shares (1,497,507 shares) 15,688,222
Net asset value of shares issued from reinvestment of distributions (0 shares) --
Cost of shares repurchased (148,574 shares) (1,589,327)
--------------
Increase in net assets from share transactions 14,098,895
--------------
Net increase in net assets 14,735,845
Net Assets
Beginning of period 0
--------------
End of period (including undistributed net investment income of $12,203) $14,735,845
==============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From Inception
1/29/96 to
6/30/96
(Unaudited)
--------------
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations
Net investment income 0.01(2)(4)
Net realized and unrealized gain 0.91
--------------
Total from investment operations 0.92
--------------
Less distributions
Dividends from net investment income --
Dividends from net realized gains --
--------------
Total distributions --
--------------
Change in net asset value 0.92
--------------
Net asset value, end of period $10.92
==============
Total return 9.24%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $14,736
Ratio to average net assets of:
Operating expenses 1.00%(1)
Net investment income 0.33%(1)
Portfolio turnover rate 123%(3)
Average commission rate paid(5) $0.0632
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.03 per share.
(3) Not annualized
(4) Computed using average shares outstanding.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-41
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(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, Multi-Sector Fixed Income (formerly
Bond), Total Return, International, Balanced, Real Estate and Strategic
Theme 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, the Phoenix Home Life Variable
Universal Life Account, the PHL Variable Accumulation Account, and the
Phoenix Home Life Separate Accounts B, C, and D.
Each series has distinct investment objectives. The Money Market Series
seeks to provide maximum current income consistent with capital
preservation and liquidity. The Growth Series seeks to achieve
intermediate and long-term growth of capital, with income as a secondary
consideration. The Multi-Sector Fixed Income Series seeks to provide
long-term total return by investing in a diversified portfolio of high
yield and high quality fixed income securities. The Total Return Series
seeks to realize as high a level of total rate of return over an extended
period of time as is considered consistent with prudent investment risk by
investing in three market segments; stocks, bonds and money market
instruments. The International Series seeks as its investment objective a
high total return consistent with reasonable risk by investing primarily
in an internationally diversified portfolio of equity securities. The
Balanced Series seeks to provide reasonable income, long-term growth and
conservation of capital. The Real Estate Series seeks to achieve capital
appreciation and income with approximately equal emphasis through
investments in real estate investment trusts and companies that operate,
manage, develop or invest in real estate. The Strategic Theme Series seeks
long-term appreciation of capital by investing in securities that the
Adviser believes are well positioned to benefit from cultural,
demographic, regulatory, social or technical changes worldwide.
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.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Actual results could differ from those estimates.
A. Security Valuation
In determining the value of the investments of the Growth Series,
Multi-Sector Fixed Income Series, Total Return Series, International
Series, Balanced Series, Real Estate Series and the Strategic Theme
Series, equity 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 61 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.
2-42
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 1996
(Unaudited)
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 Series 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.
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 or if the
counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from
the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded directly between currency
traders and their customers. The contract is marked-to-market daily and
the change in market value is recorded by the Series as an unrealized gain
(or loss). When the contract is closed or offset with the same
counterparty, 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 or offset.
G. Futures Contracts
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. A Series may enter into
financial futures contracts as a hedge against anticipated changes in the
market value of their portfolio securities. Upon entering into a futures
contract, the Fund is required to pledge to the broker an amount of cash
and/or securities equal to the "initial margin" requirements of the
futures exchange on which the contract is traded. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount
of cash equal to the daily fluctuation in 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. The potential risk to the Series is that the change in
value of the futures contract may not correspond to the change in value of
the hedged instruments.
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. For the six months ended June 30, 1996,
total Fund expenses were reduced $28,518 under expense offset arrangements
with the custodian. Custodian expenses in the Statement of Operations
exclude these credits. The Series could have invested a portion of the
assets utilized in connection with the offset arrangements in an income
producing asset.
2-43
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 1996
(Unaudited)
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 majority-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.
Rate for Rate for Rate for excess
first next over $500
Series $250 million $250 million million
------------------------- ------------- ------------ ----------------
Money Market .40% .35% .30%
Multi-Sector Fixed Income .50 .45 .40
Balanced .55 .50 .45
Total Return .60 .55 .50
Growth .70 .65 .60
International .75 .70 .65
Strategic Theme .75 .70 .65
The investment adviser for the Real Estate Series is Phoenix Realty
Securities, Inc. ("PRS"). PRS is an indirect, wholly-owned subsidiary 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 Series, 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
Series for the first $1 billion.
Each Series (except the International, Real Estate, and Strategic Theme
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. The International,
Real Estate, and Strategic Theme Series pay other operating expenses up to
.40%, .25% and .25%, respectively, of its average net assets. Expenses
above these limits are paid by the Advisers, PIC, PRS and/or PHL and/or
PHL Variable Insurance Company.
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 of each Series for
bookkeeping, administrative and pricing services.
At June 30, 1996, PHL and affiliates held shares in the Phoenix Edge
Series Fund and/or in the underlying unit investment trusts which
aggregated the following:
Growth Series $7,664,072
Real Estate Series 6,173,000
Strategic Theme Series 5,435,000
Note 4--Purchases and Sales of Securities
Purchases and sales of securities during the period ended June 30, 1996
(excluding U.S. Government securities, short-term securities, and forward
currency contracts) aggregated the following:
Purchases Sales
------------ -------------
Growth Series $683,710,560 $649,031,668
Multi-Sector Fixed Income Series 66,079,209 48,661,865
Total Return Series 393,181,337 330,481,013
International Series 108,288,777 98,401,948
Balanced Series 186,637,522 186,256,243
Real Estate Series 2,937,923 689,313
Strategic Theme Series 20,114,624 8,976,672
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, 1996 aggregated the following:
Purchases Sales
----------- ------------
Multi-Sector Fixed Income Series $ 39,714,689 $ 41,979,387
Total Return Series 393,181,337 330,481,183
Balanced Series 45,284,276 47,188,754
2-44
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 1996
(Unaudited)
There were no purchases or sales of long-term U.S. Government securities
in the Money Market Series, Growth Series, International Series, Strategic
Theme Series, or Real Estate Series.
Note 5--Forward Currency Contracts
At June 30, 1996, 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>
DM 11,250,000 USD 7,520,053 8/1/96 $ 7,402,746 $117,307
FF 24,400,000 USD 4,728,682 8/1/96 4,748,081 (19,399)
FL 13,000,000 USD 7,633,588 8/1/96 7,631,622 1,966
SF 5,200,000 USD 4,227,642 8/2/96 4,163,033 64,609
YEN 748,000,000 USD 6,990,654 9/3/96 6,874,120 116,534
YEN 1,387,000,000 USD 13,056,575 9/3/96 12,746,530 310,045
YEN 1,062,000,000 USD 9,935,448 8/1/96 9,711,778 223,670
-------------
$814,732
=============
</TABLE>
DM = German Deutsche Mark
FF = French Franc
FL = Dutch Florin
SF = Swiss Franc
YEN = Japanese Yen
USD = U.S. Dollar
As of June 30, 1996, the International Series had $3,976,183 in short-term
securities segregated as collateral to cover the open forward currency
contracts.
Note 6--Capital Loss Carryovers
At December 31, 1995, the Series of the Fund had available for federal
income tax purposes unused capital losses as follows:
Expiring on
2001 2002
-------------- --------
Multi-Sector Fixed Income $883,661 $825,646
Under current tax law, capital losses realized after October 31, 1995 may
be deferred and treated as occurring on the first day of the following tax
year. For the calendar year ended December 31, 1995, the International
Series elected to defer $1,730,497 in losses occurring between November 1,
1995 and December 31, 1995.
2-45
<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
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael E. Haylon, Executive Vice President
William J. Newman, Senior Vice President
George I. Askew, Vice President
Curtiss O. Barrows, Vice President
Mary E. Canning, Vice President
James M. Dolan, Vice President
Jeanne H. Dorey, Vice President
Christopher J. Kelleher, Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
C. Edwin Riley, Jr., 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
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Advisers
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Phoenix Realty Securities, Inc.
(Real Estate Series)
38 Prospect Street
Hartford, CT 06115-2520
Custodians
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(International Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Jorden Burt, Berenson & Johnson LLP
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>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
[Phoenix logo] Phoenix Home Life
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 810
Greenfield, Massachusetts 01302-0810
OL1273 (2/96)
4450.04
[recycle logo] Printed on recycled paper using soybean ink
(C) 1995 Phoenix Home Life Mutual Insurance Company
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> PHOENIX EDGE MONEY MARKET SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-01-1996
<INVESTMENTS-AT-COST> 103729
<INVESTMENTS-AT-VALUE> 103729
<RECEIVABLES> 729
<ASSETS-OTHER> 372
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104830
<PAYABLE-FOR-SECURITIES> 672
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 84
<TOTAL-LIABILITIES> 756
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 104046
<SHARES-COMMON-STOCK> 10405
<SHARES-COMMON-PRIOR> 10291
<ACCUMULATED-NII-CURRENT> 28
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 104074
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2752
<OTHER-INCOME> 0
<EXPENSES-NET> (278)
<NET-INVESTMENT-INCOME> 2474
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2474
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2476)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13681
<NUMBER-OF-SHARES-REDEEMED> (13816)
<SHARES-REINVESTED> 248
<NET-CHANGE-IN-ASSETS> 1131
<ACCUMULATED-NII-PRIOR> 29
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 283
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.24
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.24)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> PHOENIX EDGE SERIES GROWTH SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 1012023
<INVESTMENTS-AT-VALUE> 1141180
<RECEIVABLES> 11948
<ASSETS-OTHER> 31
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1153159
<PAYABLE-FOR-SECURITIES> 13417
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 751
<TOTAL-LIABILITIES> 14168
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 969458
<SHARES-COMMON-STOCK> 59788
<SHARES-COMMON-PRIOR> 54341
<ACCUMULATED-NII-CURRENT> 52
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40324
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 129157
<NET-ASSETS> 1138991
<DIVIDEND-INCOME> 5278
<INTEREST-INCOME> 2954
<OTHER-INCOME> 0
<EXPENSES-NET> (3807)
<NET-INVESTMENT-INCOME> 4425
<REALIZED-GAINS-CURRENT> 40395
<APPREC-INCREASE-CURRENT> 19596
<NET-CHANGE-FROM-OPS> 64416
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4568)
<DISTRIBUTIONS-OF-GAINS> (7467)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9409
<NUMBER-OF-SHARES-REDEEMED> (4602)
<SHARES-REINVESTED> 640
<NET-CHANGE-IN-ASSETS> 153602
<ACCUMULATED-NII-PRIOR> 195
<ACCUMULATED-GAINS-PRIOR> 7396
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3383
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3811
<AVERAGE-NET-ASSETS> 1071532
<PER-SHARE-NAV-BEGIN> 18.13
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 1.05
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (0.13)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.05
<EXPENSE-RATIO> 0.71
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> PHOENIX EDGE MULTI-SECTOR FIXED INCOME SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 115064
<INVESTMENTS-AT-VALUE> 117672
<RECEIVABLES> 1784
<ASSETS-OTHER> 360
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 119999
<PAYABLE-FOR-SECURITIES> 3899
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141
<TOTAL-LIABILITIES> 4040
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 112131
<SHARES-COMMON-STOCK> 11472
<SHARES-COMMON-PRIOR> 10669
<ACCUMULATED-NII-CURRENT> 238
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 982
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2608
<NET-ASSETS> 115959
<DIVIDEND-INCOME> 326
<INTEREST-INCOME> 4504
<OTHER-INCOME> 0
<EXPENSES-NET> (366)
<NET-INVESTMENT-INCOME> 4464
<REALIZED-GAINS-CURRENT> 2758
<APPREC-INCREASE-CURRENT> (4117)
<NET-CHANGE-FROM-OPS> 3105
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4361)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2695
<NUMBER-OF-SHARES-REDEEMED> (2326)
<SHARES-REINVESTED> 434
<NET-CHANGE-IN-ASSETS> 6914
<ACCUMULATED-NII-PRIOR> 135
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1775)
<GROSS-ADVISORY-FEES> 34
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 380
<AVERAGE-NET-ASSETS> 112929
<PER-SHARE-NAV-BEGIN> 10.22
<PER-SHARE-NII> 0.40
<PER-SHARE-GAIN-APPREC> (0.11)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.40)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.11
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> PHOENIX EDGE TOTAL RETURN SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 343490
<INVESTMENTS-AT-VALUE> 361280
<RECEIVABLES> 16308
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 377588
<PAYABLE-FOR-SECURITIES> 5668
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 353
<TOTAL-LIABILITIES> 6021
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340760
<SHARES-COMMON-STOCK> 26600
<SHARES-COMMON-PRIOR> 25952
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 12974
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17790
<NET-ASSETS> 371567
<DIVIDEND-INCOME> 1443
<INTEREST-INCOME> 4295
<OTHER-INCOME> 0
<EXPENSES-NET> (1241)
<NET-INVESTMENT-INCOME> 4497
<REALIZED-GAINS-CURRENT> 12992
<APPREC-INCREASE-CURRENT> (2107)
<NET-CHANGE-FROM-OPS> 15382
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4608)
<DISTRIBUTIONS-OF-GAINS> (1974)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2585
<NUMBER-OF-SHARES-REDEEMED> (2413)
<SHARES-REINVESTED> 476
<NET-CHANGE-IN-ASSETS> 17729
<ACCUMULATED-NII-PRIOR> 154
<ACCUMULATED-GAINS-PRIOR> 1956
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1057
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> PHOENIX EDGE INTERNATIONAL SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 06
<NAME> PHOENIX EDGE BALANCED SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 198007
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<NET-INVESTMENT-INCOME> 2843
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<NET-CHANGE-FROM-OPS> 5980
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<DISTRIBUTIONS-OF-GAINS> (7060)
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<NET-CHANGE-IN-ASSETS> 4705
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<ACCUMULATED-GAINS-PRIOR> 6986
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<AVERAGE-NET-ASSETS> 197575
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 07
<NAME> PHOENIX EDGE REAL ESTATE SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<OVERDISTRIBUTION-GAINS> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 08
<NAME> PHOENIX EDGE STRATEGIC THEME SERIES
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<S> <C>
<PERIOD-TYPE> 6-MOS
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<NET-ASSETS> 14736
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<NET-INVESTMENT-INCOME> 12
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</TABLE>
