PHOENIX EDGE SERIES FUND, 485APOS, 1996-06-20

PHOENIX EDGE SERIES FUND
485APOS, 1996-06-20

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As filed with the Securities and Exchange Commission on June 20, 1996

Registration Nos. 33-5033
811-4642
===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. | |
POST-EFFECTIVE AMENDMENT NO. 18 |X|
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 21 |X|
(CHECK APPROPRIATE BOX OR BOXES)
---------------------
THE PHOENIX EDGE SERIES FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
---------------------
101 MUNSON STREET, GREENFIELD, MASSACHUSETTS 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O VARIABLE PRODUCTS OPERATIONS
PHOENIX HOME LIFE MUTUAL INS. COMPANY
(800) 447-4312
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
---------------------

COPIES TO:
PHILIP R. MCLOUGHLIN JAMES JORDEN, ESQ.
THE PHOENIX EDGE SERIES FUND JORDEN BURT BERENSON & JOHNSON LLP
C/O PHOENIX HOME LIFE MUTUAL 1025 THOMAS JEFFERSON STREET N.W.
INSURANCE COMPANY SUITE 400 EAST
ONE AMERICAN ROW WASHINGTON, D.C. 20007-0805
HARTFORD, CONNECTICUT 06115
RICHARD J. WIRTH, ESQ.
(NAME AND ADDRESS OF AGENT FOR SERVICE) C/O PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
ONE AMERICAN ROW
HARTFORD, CT 06115

-------------------
It is proposed that this filing will become effective (check appropriate box):
| | Immediately upon filing pursuant to paragraph (b)
| | On May 1, 1996 pursuant to paragraph (b), or
| | 60 days after filing pursuant to paragraph (a)(i)
| | On ( ) pursuant to paragraph (a)(i)
|X| 75 days after filing pursuant to paragraph (a)(ii)
| | On ( ) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
| | This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

<PAGE>

-------------------
DECLARATION REQUIRED BY RULE 24F-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has chosen to register an indefinite number or amount of securities under the
Securities Act of 1933. On February 27, 1996, the Registrant filed its Rule
24f-2 Notice for the Registrant's most recent fiscal year.
-------------------

===============================================================================

<PAGE>

THE PHOENIX EDGE SERIES FUND

CROSS-REFERENCE SHEET

SHOWING LOCATION IN PROSPECTUS (PART A) AND
STATEMENT OF ADDITIONAL INFORMATION (PART B)
OF INFORMATION REQUIRED BY FORM N-1A
PURSUANT TO RULE 495(A)

<TABLE>
PART A

<CAPTION>
FORM N-1A ITEM PROSPECTUS CAPTION
<S> <C> <C>
1. Cover Page................................................. Cover Page

2. Synopsis................................................... Introduction

3. Condensed Financial Information............................ Financial Highlights

4. General Description of Registrant.......................... Introduction; Investment Objectives and Policies; Other
Special Investment Methods; The Fund and Its Management

5. Management of the Fund..................................... The Fund and Its Management; Custodian, Transfer Agent,
and Dividend Paying Agent

6. Capital Stock and Other Securities......................... The Fund and Its Management; Shares of Beneficial Interest;
Dividends and Distributions; Taxes

7. Purchase of Securities Being Offered....................... Purchase of Shares; Net Asset Value; Redemption of Shares

8. Redemption or Repurchase................................... Purchase of Shares; Net Asset Value; Redemption of Shares

9. Pending Legal Proceedings.................................. Not Applicable

PART B
FORM N-1A ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION

10. Cover Page................................................. Cover Page

11. Table of Contents.......................................... Table of Contents

12. General Information and History............................ The Phoenix Edge Series Fund; Investing in the Fund

13. Investment Objectives and Policies......................... Investment Policies; Investment Restrictions;
Portfolio Turnover

14. Management of the Fund..................................... Management of the Fund

15. Control Persons and Principal Holders of Securities........ Management of the Fund

16. Investment Advisory and Other Services..................... Management of the Fund; The Investment Adviser

17. Brokerage Allocation and Other Practices................... Brokerage Allocation

18. Capital Stock and Other Securities......................... Investing In the Fund; Redemption of Shares

19. Purchase, Redemption and Pricing of
Securities Being Offered................................. Determination of Net Asset Value; Investing in the Fund;
Redemption of Shares

20. Tax Status................................................. Taxes

21. Underwriters............................................... Not Applicable

22. Calculation of Yield Quotations of Money
Market Funds............................................. Money Market Series

23. Financial Statements....................................... Financial Statements
</TABLE>

<PAGE>

THE PHOENIX EDGE SERIES FUND

101 Munson Street
P.O. Box 942
Greenfield, Massachusetts 01302-0942
Telephone Number: (800) 447-4312
c/o Variable Products Operations

Phoenix

PROSPECTUS

SEPTEMBER 3, 1996

The Phoenix Edge Series Fund (formerly "The Big Edge Series Fund"), a
Massachusetts Business Trust (the "Fund"), is an open-end management
investment company which is intended to meet a wide range of investment
objectives with its nine separate Series: Money Market, Growth, Multi-Sector
Fixed Income, Total Return, International, Balanced, Real Estate Securities,
Strategic Theme and Aberdeen New Asia Series. Generally, each Series is in
effect a separate fund issuing its own shares.

The shares of the Fund are not offered to the public directly. You can
invest by buying a Variable Accumulation Annuity Contract from Phoenix Home Life
Mutual Insurance Company ("Phoenix "), or by buying a Variable Universal Life
Insurance Policy, also offered by Phoenix, or by buying a Variable Accumulation
Annuity Contract offered by PHL Variable Insurance Company ("PHL Variable"), and
directing the allocation of your payment or payments to the Sub-account(s)
corresponding to the Series you wish to invest in. The Sub-accounts will, in
turn, invest in shares of the Fund. Not all Series may be offered through a
particular Contract or Policy. The Fund also offers its shares through other
Phoenix products.

The investment objectives of the Series are as follows:

Multi-Sector Fixed Income Series ("Multi-Sector Series"). The investment
objective of the Multi-Sector Series (formerly named the "Bond Series") is to
seek long-term total return by investing in a diversified portfolio of fixed
income securities market sectors encompassing high yield (high risk) and high
quality fixed income securities. THE RISKS OF INVESTING IN THESE SECURITIES ARE
OUTLINED IN SECTION "INVESTMENT OBJECTIVES AND POLICIES" OF THIS PROSPECTUS.

Money Market Series. The investment objective of the Money Market Series is
to provide maximum current income consistent with capital preservation and
liquidity. The Money Market Series invests exclusively in high quality money
market instruments. AN INVESTMENT IN THE MONEY MARKET SERIES IS NEITHER INSURED
NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE
SERIES WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

Growth Series. The investment objective of the Growth Series is to achieve
intermediate and long-term growth of capital, with income as a secondary
consideration. The Growth Series invests principally in common stocks of
corporations believed by management to offer growth potential.

Total Return Series. The investment objective of the Total Return Series is
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. The Total Return
Series invests in stocks, bonds and money market instruments in accordance with
the Investment Adviser's appraisal of investments most likely to achieve the
highest total rate of return.

Balanced Series. The investment objectives of the Balanced Series are
reasonable income, long-term capital growth and conservation of capital. It is
intended that this Series will invest in common stocks and fixed income
securities, with emphasis on income-producing securities which appear to have
some potential for capital enhancement.

International Series. The investment objective of the International Series
is to seek a high total return consistent with reasonable risk. The
International Series intends to invest primarily in an internationally
diversified portfolio of equity securities. It intends to reduce its risk by
engaging in hedging transactions involving options, futures contracts and
foreign currency transactions (see "Other Special Investment Methods"). The
International Portfolio provides a means for investors to invest a portion of
their assets outside the United States.

Real Estate Securities Series ("Real Estate Series"). The investment
objective of the Real Estate Series is to seek capital appreciation and income
with approximately equal emphasis. The Real Estate Series intends under normal
circumstances to invest in marketable securities of publicly traded real estate
investment trusts (REITs) and companies that operate, develop, manage and/or
invest in real estate located primarily in the United States.

Strategic Theme Series. The investment objective of the Strategic Theme
Series is to seek long-term appreciation of capital. This Series seeks to
identify securities benefiting from long-term trends present in the United
States and abroad. The Series intends to invest primarily in common stocks
believed by the Adviser to have substantial potential for capital growth. Since
many trends may be early in their development and no history of industry growth
patterns are available, securities owned may present a high degree of risk.

Aberdeen New Asia Series ("Asia Series"). This Series seeks as its
investment objective long-term capital appreciation with reasonable risk. It is
intended that this Series will invest primarily in a diversified portfolio of
equity securities of issuers located in at least three different countries
throughout Asia, other than Japan.

There can be no assurance that any Series will achieve its
objectives. See "Investment Objectives and Policies."

2-1

<PAGE>

This Prospectus gives you the facts about the Fund and each of its Series
that you should know before directing investment in the Fund, and it should be
read and kept for future reference. A Statement of Additional Information dated
September 3, 1996, which contains further information about the Fund, has been
filed with the Securities and Exchange Commission and is incorporated by
reference in this Prospectus. A free copy of the Statement of Additional
Information may be obtained by calling Variable Products Operations of Phoenix
at (800) 447-4312, or by writing to Variable Products Operations at 101 Munson
Street, PO Box 942, Greenfield, Massachusetts 01302-0942.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus should be read and retained for future reference.

2-2

<PAGE>

THE PHOENIX EDGE SERIES FUND

TABLE OF CONTENTS

Heading Page
- --------------------------------------------------------------------------------

Fund Expenses............................................ 2-4
Financial Highlights..................................... 2-5
Introduction............................................. 2-9
Investment Objectives and Policies....................... 2-10

Multi-Sector Series.................................. 2-10
Money Market Series.................................. 2-11
Growth Series........................................ 2-12
Total Return Series.................................. 2-12
International Series................................. 2-12
Balanced Series...................................... 2-14
Real Estate Series................................... 2-14
Strategic Theme Series............................... 2-15
Asia Series.......................................... 2-16
Other Special Investment Methods ........................ 2-17
Convertible Securities............................... 2-17
Repurchase Agreements................................ 2-17
Options.............................................. 2-17
Financial Futures and Related Options................ 2-18
Foreign Securities................................... 2-18
Leverage............................................. 2-18
Private Placements & Rule 144A Securities............ 2-19
Mortgage-backed Securities........................... 2-19
Lending of Portfolio Securities...................... 2-20
Investment Restrictions.................................. 2-20
Portfolio Turnover....................................... 2-20
The Fund and Its Management ............................. 2-20
Investment Advisers................................... 2-20
Portfolio Managers.................................... 2-21
Balanced Series................................... 2-21
Total Return Series............................... 2-21
Multi-Sector Series............................... 2-21
Growth Series..................................... 2-21
International Series.............................. 2-21
Money Market Series............................... 2-21
Real Estate Series................................ 2-21
Strategic Theme Series............................ 2-22
Asia Series....................................... 2-22
Advisory Fees......................................... 2-22
Financial Agent....................................... 2-22
Expenses.............................................. 2-23
Portfolio Transactions and Brokerage ................. 2-23
Performance History................................... 2-23
Shares of Beneficial Interest............................. 2-24
Purchase of Shares........................................ 2-24
Net Asset Value........................................... 2-24
Redemption of Shares...................................... 2-25
Dividends and Distributions............................... 2-25
Taxes.................................................... 2-25
Custodian, Transfer Agent, and
Dividend Paying Agent................................. 2-26
Other Information......................................... 2-26
Appendix.................................................. 2-26

No dealer, salesman or other person has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
and if given or made, such other information or representations must not be
relied upon as having been authorized by the Fund, the Investment Advisers, or
the Distributor. This Prospectus does not constitute an offering in any state in
which such offering may not be lawfully made.

2-3

<PAGE>

FUND EXPENSES

The following table illustrates all expenses and fees that a shareholder in
each Series of the Fund will incur. Expenses borne by these separate accounts
and by the owners of the contracts and policies are not reflected in the Table.
Please refer to the applicable Variable Contract prospectus for such charges.
The expenses and fees set forth in the table are for the fiscal year ended
December 31, 1995.

SHAREHOLDER TRANSACTION EXPENSES

ALL SERIES
----------

Sales Load Imposed on Purchases ................................ None
Sales Load Imposed on Reinvested Dividends ..................... None
Deferred Sales Load ............................................ None
Redemption Fees ................................................ None
Exchange Fees .................................................. None

ANNUAL FUND OPERATING EXPENSES

(as a percentage of average net assets for the year ending Dec. 31, 1995)

<TABLE>
<CAPTION>
TOTAL MONEY STRATEGIC
GROWTH MULTI-SECTOR RETURN MARKET INTERNATIONAL BALANCED REAL ESTATE THEME(3) ASIA(4)
------ ------------ ------ ------ ------------- -------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees
Investment Advisory Fees(1).. .65% .50% .59% .40% .75% .55% .75% .75% 1.00%
12b-1 Fees..................... None None None None None None None None None
Other Operating Expenses
(After Reimbursement(2))..... .10% .15% .08% .13% .32% .10% .25%(5) .25%(6) .25%(7)
---- ---- ---- ---- ---- ---- -------- -------- ----
Total Fund Operating Expenses .75% .65% .67% .53% 1.07% .65% 1.00% 1.00% 1.25%
</TABLE>

EXAMPLE:

The following example illustrates the expenses that you would pay on a $1,000
investment over various time periods assuming (1) a 5% annual rate of return
and (2) redemption at the end of each time period. As noted above, the Fund
charges no redemption fees of any kind.

TOTAL MONEY STRATEGIC
GROWTH MULTI-SECTOR RETURN MARKET INTERNATIONAL BALANCED REAL ESTATE THEME ASIA
------ ------------ ------ ------ ------------- -------- ----------- ----- ----
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year......................... $ 8 $ 7 $ 7 $ 5 $ 11 $ 7 $ 10 $10 [To be
3 Years........................ $24 $21 $21 $17 $ 34 $21 $ 32 $32 filed by
5 Years........................ $42 $36 $37 $30 $ 59 $36 $ 55 N/A Amendment]
10 Years....................... $93 $81 $83 $66 $131 $81 $122 N/A
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
OR PERFORMANCE. ACTUAL EXPENSES OR PERFORMANCE MAY BE GREATER OR LESS THAN THOSE
SHOWN. THE PURPOSE OF THE TABLE IS TO ASSIST THE INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT AN INVESTOR WILL BEAR DIRECTLY OR INDIRECTLY AT
THE FUND LEVEL. SEE "THE FUND AND ITS MANAGEMENT."

(1) Advisory fees (management fees) will vary with the asset size of the
Fund (see "Advisory Fee").

(2) Phoenix Investment Counsel, Inc. ("PIC") has agreed to reimburse the Series
(except the International) for the amount, if any, by which each Series'
operating expenses other than the management fee for any fiscal year exceed
.15% of the average net assets of the Series. PIC has agreed to reimburse
the International Series for the amount, if any, by which the Series'
operating expenses other than the management fee for any fiscal year
exceed .40% of the average net assets of the Series. If these
reimbursements had not been in place for the fiscal year ended December
31, 1995, total operating expenses for the Multi-Sector Series would have
been approximately .73% of the average net assets of such Series.

(3) This Series was not available until January 29, 1996. Accordingly,
annualized expenses have been projected for the fiscal period ending
December 31, 1996.

(4) This Series was not available until September 3, 1996. Accordingly,
annualized expenses have been projected for the fiscal period ending
December 31, 1996.

(5) Phoenix Realty Securities, Inc. and/or Phoenix and/or PHL Variable have
agreed to reimburse the Real Estate Series' operating expenses for the
amount, if any, by which such Series' operating expenses other than the
management fees for any fiscal year exceed .25% of the average
net assets of such Series. If this reimbursement had not been in place
for the fiscal year ended December 31, 1995, total operating expenses
for the Real Estate Series would have been approximately 1.98% of
average net asset of such Series.

(6) Phoenix Investment Counsel, Inc. and/or Phoenix and/or PHL Variable have
agreed to reimburse the Strategic Theme Series' operating expenses for
the amount, if any, by which such Series' operating expenses other than
the management fees for any fiscal year exceed .25% of the average net
assets of such Series. Without reimbursement, the total operating
expenses are estimated to be approximately 1.33% of the average net
assets of such Series for the fiscal year ending December 31, 1996.

(7) Phoenix-Aberdeen International Advisors, LLC and/or Phoenix and/or PHL
Variable have agreed to reimburse the Asia Series' operating expenses for
the amount, if any, by which such Series' operating expenses other than
the management fees for any fiscal year exceed .25% of the average net
assets of such Series. Without reimbursement, the total operating
expenses are estimated to be approximately 2.11% of the average net
assets of such Series for the fiscal year ending December 31, 1996.

2-4

<PAGE>

FINANCIAL HIGHLIGHTS

SELECTED PER SHARE DATA AND RATIOS
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)

The following tables set forth certain financial information for the
respective fiscal years of the Fund. The annual information has been extracted
from the Fund's audited financial statements for the respective periods. The
financial information has been audited by Price Waterhouse LLP, independent
accountants, whose unqualified report thereon is included in the Annual Report
to Shareholders dated December 31, 1995, which is included in the Statement of
Additional Information. The Statement of Additional Information and the Fund's
most recent Annual Report (which contains a discussion of the Fund's
performance) are available at no charge upon request.
<TABLE>
<CAPTION>
MONEY MARKET SERIES

Net asset value, end of
period.................. $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 10.00
======== ======== ======== ======== ======== ======== ======= ======== ======== ========
Total Return(2)......... 5.55% 3.77% 2.80% 3.50% 5.80% 7.90% 8.80% 7.20% 6.30% 6.02%
Ratios/supplemental data:
Net assets, end of period
(thousands)............. $102,943 $ 94,586 $ 72,946 $ 69,962 $ 51,692 $ 38,709 $ 28,808 $ 22,294 $ 10,749 $ 3,628
Ratio to average net
assets of:
Operating expenses.... 0.53%(3) 0.55% 0.55% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Net investment income. 5.57% 3.85% 2.84% 3.49% 5.76% 7.87% 8.96% 7.24% 6.30% 6.27%

(1) Includes reimbursement of operating expenses by investment adviser of $.003
and $0.01 per share, respectively.
(2) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.
(3) For the year ended December 31, 1995, 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.
</TABLE>

<TABLE>
<CAPTION>
GROWTH SERIES

YEAR ENDED DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
Beginning of period........ $ 15.69 $ 16.59 $ 15.01 $ 14.43 $ 11.72 $ 11.62 $ 8.83 $ 8.81 $ 9.84 $ 8.19
Income from investment
operations
Net investment income...... 0.20 0.23(1)(3) 0.16(3) 0.22(3) 0.39(3) 0.35 0.27 0.32 0.19 0.25
Net realized and unrealized
gain......................... 4.60 0.02 2.77 1.25 4.64 0.10 2.88 0.02 0.45 1.40
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total from investment
operations................... 4.80 0.25 2.93 1.47 5.03 0.45 3.15 0.34 0.64 1.65
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income........... (0.17) (0.23) (0.15) (0.23) (0.37) (0.35) (0.27) (0.32) (0.21) --
Dividends from net realized
gains....................... (2.19) (0.92) (1.20) (0.66) (1.95) -- (0.09) -- (1.46) --
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total distributions... (2.36) (1.15) (1.35) (0.89) (2.32) (0.35) (0.36) (0.32) (1.67) --
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Change in net asset value... 2.44 (0.90) 1.58 0.58 2.71 0.10 2.79 0.02 (1.03) (1.65)
----- ----- ----- ----- ----- ----- ----- ---- ----- ------
Net asset value,
end of period............. $ 18.13 $ 15.69 $ 16.59 $ 15.01 $ 14.43 $ 11.72 $ 11.62 $ 8.83 $ 8.81 $ 9.84
======== ======== ======== ======== ======== ======== ======== ======= ======= =======
Total Return(2)............. 30.85% 1.48% 19.69% 10.29% 43.83% 3.98% 36.06% 3.83% 7.05% 20.15%
Ratios/supplemental data:
Net assets, end of period
(thousands)................. $985,389 $616,221 $446,368 $245,565 $102,259 $ 40,061 $ 29,931 $18,051 $18,860 $13,124
Ratio to average net assets of:
Operating expenses........ 0.75%(4) 0.80% 0.79% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Net investment income..... 1.12% 1.38% 0.97% 1.66% 2.14% 3.19% 2.51% 3.64% 2.34% 2.47%
Portfolio turnover rate..... 173% 185% 185% 214% 237% 272% 285% 326% 251% 294%

(1) Includes reimbursement of operating expenses by investment adviser of
$.003 per share.
(2) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.
(3) Computed using average shares outstanding.
(4) For the year ended December 31, 1995, 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.

</TABLE>
2-5
<PAGE>

<TABLE>
<CAPTION>
MULTI-SECTOR FIXED INCOME SERIES
(formerly known as the Bond Series)

YEAR ENDED DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
Beginning of period............ $ 8.98 $10.27 $ 9.58 $ 9.33 $ 8.48 $ 8.85 $ 9.11 $ 9.08 $ 10.07 $ 8.43
Income from investment operations
Net investment income (3)...... 0.83(1) 0.72(1) 0.66(1) 0.66 0.74 0.80 0.99 0.92 1.06 1.04
Net realized and unrealized
gain (loss)...................... 1.22 (1.28) 0.84 0.25 0.85 (0.37) (0.25) (0.01) (0.93) 0.60
---- ------ ---- ---- ---- ------ ------ ------ ----- ----
Total from investment
operations....................... 2.05 (0.56) 1.50 0.91 1.59 0.43 0.74 0.91 0.13 1.64
---- ------ ---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net investment
income........................... (0.81) (0.73) (0.66) (0.66) (0.74) (0.80) (1.00) (0.88) (1.12) --
Dividends from net realized
gains............................ -- -- (0.15) -- -- -- -- -- -- --
--- --- ------ --- --- --- --- --- --- ---
Total distributions........ (0.81) (0.73) (0.81) (0.66) (0.74) (0.80) (1.00) (0.88) (1.12) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ---
Change in net asset value........ 1.24 (1.29) 0.69 0.25 0.85 (0.37) (0.26) 0.03 (0.99) 1.64
---- ------ ---- ---- ---- ------ ------ ---- ------ ----
Net asset value, end of period...$ 10.22 $ 8.98 $ 10.27 $ 9.58 $ 9.33 $ 8.48 $ 8.85 $ 9.11 $ 9.08 $ 10.07
======== ======= ======== ======= ======= ======= ======= ======= ======= =======
Total Return(2).................. 23.54% (5.47)% 15.90% 10.03% 19.41% 5.14% 8.30% 10.36% 1.12% 19.45%
Ratios/supplemental data:
Net assets, end of period
(thousands)..................... $109,046 $74,686 $ 79,393 $43,090 $21,957 $13,558 $13,947 $11,081 $ 8,389 $ 7,285
Ratio to average net assets of:
Operating expenses............ 0.65%(4) 0.66% 0.65% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Net investment income......... 8.55% 7.62% 6.71% 7.47% 8.65% 9.26% 10.99% 10.37% 10.90% 9.75%
Portfolio turnover rate......... 147% 181% 169% 166% 269% 318% 340% 262% 67% 110%

(1) Includes reimbursement of operating expenses by investment adviser of
$.007, $.006 and $0.005 per share, respectively.
(2) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.
(3) Computed using average shares outstanding.
(4) For the year ended December 31, 1995, 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.
</TABLE>

<TABLE>
<CAPTION>
TOTAL RETURN SERIES

YEAR ENDED DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
Beginning of period.......... $ 12.68 $ 13.71 $ 12.86 $ 12.97 $ 11.07 $ 11.05 $ 9.68 $ 9.87 $ 9.85 $ 8.52
Income from investment
operations
Net investment income........ 0.45 0.36(1)(3) 0.23(3) 0.37(3) 0.42(3) 0.58 0.51 0.46 0.34 0.36
Net realized and unrealized
gain (loss).................... 1.84 (0.56) 1.17 0.99 2.76 0.02 1.38 (0.24) 0.91 0.97
---- ------ ---- ---- ---- ---- ---- ------ ---- ----
Total from investment
operations..................... 2.29 (0.20) 1.40 1.36 3.18 0.60 1.89 0.22 1.25 1.33
---- ------ ---- ---- ---- ---- ---- ---- ---- ----
Less distributions:
Dividends from net
investment income.............. (0.45) (0.37) (0.23) (0.37) (0.42) (0.58) (0.52) (0.41) (0.40) --
Dividends from net realized
gains.......................... (0.89) (0.46) (0.32) (1.10) (0.86) 0.00 0.00 -- (0.83) --
------ ------ ------ ------ ------ ---- ---- --- ------ ----
Total distributions...... (1.34) (0.83) (0.55) (1.47) (1.28) (0.58) (0.52) (0.41) (1.23) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ----
Change in net asset value...... 0.95 (1.03) 0.85 (0.11) 1.90 0.02 1.37 (0.19) 0.02 1.33
---- ------ ---- ------ ---- ---- ---- ------ ---- ----
Net asset value, end of period. $ 13.63 $ 12.68 $ 13.71 $ 12.86 $ 12.97 $ 11.07 $ 11.05 $ 9.68 $ 9.87 $ 9.85
======== ======== ======== ======== ======== ======== ======== ======= ======= =======
Total Return(2)................ 18.22% (1.45)% 11.02% 10.67% 29.44% 5.62% 19.88% 2.33% 12.58% 15.61%
Ratios/supplemental data:
Net assets, end of period
(thousands).................... $353,838 $289,083 $256,011 $163,628 $ 98,415 $ 62,839 $ 57,901 $59,109 $68,099 $24,879
Ratio to average net assets of:
Operating expenses.......... 0.67%(4) 0.74% 0.74% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Net investment income....... 3.28% 2.71% 1.82% 2.90% 3.48% 5.39% 4.73% 4.62% 3.67% 3.38%
Portfolio turnover rate........ 170% 220% 269% 326% 255% 302% 302% 314% 359% 311%

(1) Includes reimbursement of operating expenses by investment adviser of
$0.001 per share.
(2) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges
would reduce total return for all periods shown.
(3) Computed using average shares outstanding.
(4) For the year ended December 31, 1995, 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.

</TABLE>

2-6

<PAGE>

<TABLE>
<CAPTION>
INTERNATIONAL SERIES

FROM
YEAR ENDED DECEMBER 31, INCEPTION
5/1/90 TO
1995 1994 1993 1992 1991 12/31/92
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
Beginning of period...............................$ 11.85 $ 12.21 $ 8.82 $ 10.17 $ 9.07 $ 10.00
Income from investment operations
Net investment income(4).......................... 0.12 0.08 0.07(2) 0.09 0.24(2) 0.07(2)
Net realized and unrealized gain (loss)........... 1.02 (0.07) 3.32 (1.40) 1.53 (0.88)
---- ------ ---- ------ ---- ------
Total from investment operations............... 1.14 0.01 3.39 (1.31) 1.77 (0.81)
---- ------ ---- ------ ---- ------
Less distributions:
Dividends from net investment income.............. (0.04) (0.03) -- (0.04) (0.24) (0.07)
Dividends from net realized gains................. (0.25) (0.34) -- -- (0.41) --
Distributions from paid in capital................ -- -- -- -- (0.02) (0.05)
---- ---- ---- ----- ------ ------
Total distributions............................ (0.29) (0.37) -- (0.04) (0.67) (0.12)
------ ------ ---- ------ ------ ------
Change in net asset value............................ 0.85 (0.36) 3.39 (1.35) 1.10 (0.93)
---- ------ ---- ------ ---- ------
Net asset value, end of period....................... $ 12.70 $ 11.85 $ 12.21 $ 8.82 $ 10.17 $ 9.07
======= ======= ======== ======= ======== =======
Total Return(3)...................................... 9.59% 0.03% 38.44% (12.89%) 19.78% (8.10%)
Ratios/supplemental data:
Net assets, end of period (thousands)................$134,455 $134,627 $ 61,242 $13,772 $ 6,119 $ 2,010
Ratio to average net assets of:
Operating expenses................................ 1.07% 1.10% 1.15% 1.50% 1.50% 1.50%(1)
Net investment income............................. 0.95% 0.64% 0.49% 1.13% 2.44% 1.82%(1)
Portfolio turnover rate.............................. 249% 172% 193% 74% 104% 48%(1)

(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of $0.05,
$0.02 and $0.07, respectively.
(3) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.
(4) Computed using average shares outstanding.
</TABLE>

BALANCED SERIES

<TABLE>
<CAPTION>
FROM
INCEPTION
YEAR ENDED DECEMBER 31, 5/1/92 TO
1995 1994 1993 12/31/92
---- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value,
Beginning of period............................................... $ 10.53 $ 11.31 $ 10.77 $ 10.00
Income from investment operations
Net investment income (4)......................................... 0.40 0.38(2) 0.32(2) 0.19
Net realized and unrealized gain (loss)........................... 2.02 (0.70) 0.60 0.77
---- ------ ---- ----
Total from investment operations............................... 2.42 (0.32) 0.92 0.96
---- ------ ---- ----
Less distributions:
Dividends from net investment income.............................. (0.40) (0.36) (0.32) (0.19)
Dividends from net realized gains................................. (0.25) (0.10) (0.06) --
------ ------ ------ ----
Total distributions............................................ (0.65) (0.46) (0.38) (0.19)
------ ------ ------ ------
Change in net asset value............................................ 1.77 (0.78) 0.54 0.77
---- ------ ---- ----
Net asset value, end of period....................................... $ 12.30 $ 10.53 $ 11.31 $ 10.77
========= ======== ======== ========
Total Return(3)...................................................... 23.28% (2.80)% 8.57% 9.72%
Ratios/supplemental data:
Net assets, end of period (thousands)................................ $ 193,302 $161,105 $158,144 $ 54,467
Ratio to average net assets of:
Operating expenses................................................ 0.65%(5) 0.69% 0.70% 0.50%(1)
Net investment income............................................. 3.44% 3.44% 3.16% 3.59%(1)
Portfolio turnover rate.............................................. 223% 171% 161% 110%(1)
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.001 and $0.001 per share, respectively.
(3) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.
(4) Computed using average shares outstanding.
(5) For the year ended December 31, 1995, 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.

2-7

<PAGE>

REAL ESTATE SERIES

FROM
INCEPTION
5/1/95 TO
12/31/95
--------
Net asset value,
Beginning of period......................................... $ 10.00
Income from investment operations
Net investment income....................................... 0.33(2)
Net realized and unrealized gain............................ 1.42
----
Total from investment operations.......................... 1.75
----
Less distributions:
Dividends from net investment income........................ (0.33)
Dividends from net realized gain............................ (0.06)
Tax return of capital....................................... (0.03)
------
Total distributions....................................... (0.42)
------
Change in net asset value..................................... 1.33
----
Net asset value, end of period................................ $ 11.33
========
Total Return(4)............................................... 17.79%(3)
Ratios/supplemental data:
Net assets, end of period (thousands)......................... $ 8,473
Ratio to average net assets of:
Operating expenses.......................................... 1.00%(1)
Net investment income....................................... 4.80%(1)
Portfolio turnover rate....................................... 10%(3)

(1) Annualized.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.07 per share.
(3) Not Annualized.
(4) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for the period shown.

STRATEGIC THEME SERIES

FROM
INCEPTION
1/29/96 TO
5/31/96
(UNAUDITED)
-----------
Net asset value,
Beginning of period......................................... $10.000000
Income from investment operations
Net investment income....................................... 0.009216(2)(5)
Net realized and unrealized gain............................ 1.262006
Total from investment operations.......................... 1.271222
--------
Less distributions:
Dividends from net investment income........................ 0.000000
Distributions from net realized gains....................... 0.000000
--------
Total distributions.......................................
Change in net asset value..................................... 1.271222
Net assets, end of period (thousands)......................... $11.271222
==========
Total Return(4)............................................... 11.71%(3)
Ratios/supplemental data:
Net assets, end of period (thousands)......................... $ 12,351
Ratio to average net assets of:
Operating expenses.......................................... 1.00%(1)
Net investment income....................................... 0.27%(1)
Portfolio turnover rate....................................... 0.98%(3)
Average commission rate paid.................................. $ 0.0651

(1) Annualized.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.03 per share.
(3) Not Annualized.
(4) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges
would reduce total return for the period shown.
(5) Computed using average shares outstanding.

ASIA SERIES

The Asia Series Sub-account commenced operations as of September 3, 1996;
therefore, data for this Sub-account is not yet available.

2-8

<PAGE>

INTRODUCTION
- --------------------------------------------------------------------------------

This Prospectus describes the shares offered by and the operations of The
Phoenix Edge Series Fund (the "Fund"). The Fund is an open-end management
investment company established as a business trust under the laws of
Massachusetts by an Agreement and Declaration of Trust dated February 18, 1986
(the "Declaration of Trust"). The Declaration of Trust, as amended authorizes
the assets and shares of the Fund to be divided into series (the "Series"). Each
Series has a different investment objective, as described on the cover page of
this Prospectus, and is designed to meet different investment needs. In many
respects, each Series operates as if it were a separate mutual fund.

Shares of the Fund are sold to the Phoenix Home Life Variable Accumulation
Account (the "VA Account") to fund the benefits under Variable Accumulation
Annuity Contracts ("Contracts") issued by Phoenix; to the Phoenix Home Life
Variable Universal Life Account (the "VUL Account") to fund the benefits under
Variable Universal Life Insurance Policies ("Policies") also issued by Phoenix;
and to the PHL Variable Accumulation Account ("PHL VA Account") to fund the
benefits under Variable Accumulation Annuity Contracts ("Contracts") issued by
PHL Variable. The VA Account, PHL VA Account, and VUL Account (the "Accounts")
invest in shares of the Fund in accordance with allocation instructions
received from Contract Owners and Policyowners. Such allocation rights are
further described in the accompanying Prospectus for the Contracts or Policies.
Phoenix redeems shares to the extent necessary to provide benefits under the
Contracts and Policies. Phoenix may establish other separate accounts which
may purchase shares in the Fund.

When making allocations from time to time, a Contract Owner or Policyowner
should understand that investment return will affect benefits and the value of
the Contract or Policy. The accompanying Prospectus for the VA Account, PHL VA
Account, or VUL Account contains a description of the relationship between
increases or decreases in the net asset value of Trust shares and any
distributions on such shares, and the benefits provided under the Contract or
Policy.

The Trustees have authority to issue an unlimited number of shares of
beneficial interest of each Series. An interest in the Fund is limited to the
assets of the Series in which shares are held, and shareholders are entitled to
a pro rata share of all dividends and distributions arising from the net income
and capital gains on the investments of such Series.

PHOENIX AND PHL VARIABLE
Shares of the Fund are currently sold to the Accounts as the investment
base for Variable Accumulation Annuity Contracts and Variable Universal Life
Insurance Policies issued by Phoenix and PHL Variable. Phoenix is a mutual
life insurance company whose Executive Office is at One American Row, Hartford,
Connecticut 06102-5056 and its main administrative office is at 100 Bright
Meadow Boulevard, Enfield, Connecticut 06083-1900. Its New York principal office
is at 99 Troy Road, East Greenbush, New York 12061. Phoenix is the nation's
13th largest mutual life insurance company and has total assets of approximately
$13.2 billion. Phoenix sells insurance policies and annuity contracts through
its own field force of full time agents and through brokers. Its operations are
conducted in all 50 states, the District of Columbia, Canada and Puerto Rico.

PHL Variable is a wholly-owned indirect subsidiary of Phoenix. Its
Executive Office is at One American Row, Hartford, Connecticut 06102-5056 and
its main administrative office is at 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083-1900. PHL Variable is a Connecticut stock company. On December
31, 1995, it had admitted assets of $34.6 million.

The interests and rights of a Contract Owner or Policyowner in the shares
is subject to the terms of the Contract or Policy and is described in the
accompanying Prospectus for that particular product. The rights of the Accounts
as shareholders should be distinguished from the rights of Contract Owners and
Policyowners, described in the accompanying Prospectus and in the Contract or
Policy for that particular product. As long as shares of the Fund are sold
only to the Accounts, the terms "shareholder" or "shareholders" in this
Prospectus refer to the Accounts.

THE INVESTMENT ADVISERS
The investment adviser of the Money Market, Multi-Sector, Balanced, Total
Return, Growth, International and Strategic Theme Series is Phoenix Investment
Counsel ("PIC" or "Adviser"). PIC is an indirect, less than wholly owned
subsidiary of Phoenix . For its services, PIC is paid an investment advisory
fee based on the assets of each Series of the Fund as follows:

PHOENIX INVESTMENT COUNSEL, INC.

RATE FOR
RATE FOR FIRST RATE FOR NEXT EXCESS OVER
SERIES $250,000,000 $250,000,000 $500,000,000
- ------ ------------ ------------ ------------
Money Market.... .40% .35% .30%
Multi-Sector.... .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 total advisory fee of 0.75% of the aggregate net assets of the
International and Strategic Theme Series is greater than that paid by most
mutual funds; however, the Board of Trustees of the Fund has determined that
it is similar to fees charged by other mutual funds whose investment objectives
are similar to those of the International and Strategic Theme Series. Each
Series (except the International, Real Estate and Strategic Theme Series) pays a
portion or all of its other operating expenses, up to .15% of its average net
assets. The International and Strategic Theme Series pay other operating
expenses up to .40% and .25% of their average net assets, respectively.

The investment adviser for the Real Estate Series is Phoenix Realty
Securities, Inc. ("PRS" or "Adviser"). PRS is a wholly-owned indirect subsidiary
of Phoenix. For its services, PRS is paid an investment advisory fee based on
the assets of the Series of the Fund as follows:

2-9

<PAGE>
PHOENIX REALTY SECURITIES, INC.

RATE FOR
RATE FOR FIRST RATE FOR NEXT EXCESS OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate..... .75% .70% .65%

The Real Estate Series pays a portion or all of its other expenses up to
.25% of its total net assets. Pursuant to a subadvisory agreement with the Fund,
PRS delegates certain investment decisions and research functions to
ABKB/LaSalle Securities Limited Partnership ("ABKB") for which ABKB is paid a
fee by PRS. In accordance with the subadvisory agreement between the Fund and
ABKB, ABKB is paid a monthly fee at the annual rate of 0.45% of the average
aggregate daily net asset values of the Series up to $1 billion; 0.35% of such
value between $1 billion and $2 billion; and 0.30% of such value in excess of $2
billion. The subadvisory agreement relating to the Real Estate Series provides,
among other things, that ABKB shall effectuate the purchase and sale of
securities for the Series and provide related advisory services.

The Asia Series is managed by Phoenix-Aberdeen International Advisors, LLC
("PAIA" or "Advisor"). The Adviser is a joint venture between PM Holdings, Inc.,
a direct subsidiary of Phoenix, defined and Aberdeen Fund Managers, Inc., a
wholly-owned subsidiary of Aberdeen Trust plc. For its services, PAIA is paid an
investment advisory fee based on the assets of the Series of the Fund as
follows:

PHOENIX-ABERDEEN INTERNATIONAL ADVISERS, LLC
--------------------------------------------
SERIES
- ------
Asia Series..... 1.00%

The Asia Series pays a portion or all of its other expenses up to .25% of
its total net assets.

OFFERING PRICES

Shares in each of the Series of the Fund are offered to the Accounts
continuously at the net asset value determined at the close of business
beginning on the day the application is accepted. For information on pricing for
initial and subsequent purchase payments under Contracts or Policies, see the
accompanying prospectus.

INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------

To the extent that shares are sold to the Accounts in order to fund the
benefits under the Contracts or Policies, the structure of the Fund permits
Contract Owners and Policyowners, within the limitations described in the
Contracts or Policies, to allocate their investments in response to or in
anticipation of changes in market or economic conditions.

Each Series has a different investment objective and is designed to meet
different investment needs. The differences in objectives and policies among the
Series can be expected to affect the investment return of each Series and the
degree of market and financial risk to which each Series is subject. The
investment objective of each Series is deemed to be a fundamental policy which
may not be changed without the approval of a vote of a majority of the
outstanding shares of that Series. Since certain risks are inherent in the
ownership of any security, there can be no assurance that any Series will
achieve its investment objective. The investment policies of each Series will
also affect the rate of portfolio turnover. A high rate of portfolio turnover
generally involves correspondingly greater transaction costs, which must be
borne directly by each Series. The portfolio turnover rate for each Series,
except the Money Market Series (which does not normally pay brokerage
commissions), is included under "Selected Per Share Data and Ratios." The rate
for each such Series has been, and is expected to be, in excess of 100%;
accordingly, the Series will pay more in brokerage commissions than would be the
case if they had lower portfolio turnover rates. It is expected that the
portfolio turnover rates for the common stock and fixed income portions of the
Balanced Series will not generally exceed 250% and 100%, respectively. (See
"Portfolio Transactions and Brokerage.")

MULTI-SECTOR FIXED INCOME SERIES

The Multi-Sector Series' investment objective is to seek long-term total
return by investing in a diversified portfolio of high yield (high risk) and
high quality fixed income securities. Distributions of income are reinvested to
purchase additional shares. The Series will seek to achieve its objective by
investing, under normal conditions, at least 80% of the value of the total
assets of the Series in the following sectors of the fixed income securities
markets: high yield (high risk) fixed income securities, (sometimes referred to
as "junk bonds"), high quality fixed income securities, fixed income securities
including preferred stocks, convertible securities, debt obligations, foreign
debt obligations, certificates of deposit, commercial paper, bankers'
acceptances, and government obligations issued or guaranteed by federal, state
or municipal governments or their agencies or instrumentalities. The Series'
remaining assets may be invested in common stock and other equity securities
when such investments are consistent with its primary investment objective or
are acquired as part of a unit consisting of a combination of fixed income
securities and equity securities (see "Other Special Investment Methods").

Higher yields are available ordinarily from securities in the lower rated
categories of recognized rating agencies (Ba to Ca by Moody's Investors Service,
Inc. ("Moody's") or BB to CC by Standard & Poor's Corporation ("S&P")) and from
unrated securities of comparable quality (commonly referred to as "junk bonds").
However, the Multi-Sector Series will not invest in securities in the two
lowest rating categories (Ca and C for Moody's and CC and C for S&P) unless
management believes that the financial condition of the issuer, or the
protections afforded to the particular securities, is stronger than would
otherwise be indicated by the low ratings. When the investment objective of this
Series can be met by investing in securities in higher rating categories, such
investments will be made. Moreover, the Series may retain securities whose
ratings have changed. The Appendix contains a more detailed description of such
ratings. At Dec. 31, 1995, 44.2% of the Series' assets was invested in so-called
"investment grade" securities. The average percentage of assets the Series had
invested in each rating category for the fiscal year ended December 31, 1995 is
as follows:

2-10
<PAGE>

Aaa............................... 23.4%
Aa................................ 7.6%
A................................. 4.0%
Baa............................... 9.2%
Ba................................ 13.1%
B................................. 12.2%
Caa............................... 1.7%
*Not-Rated........................ 20.9%

* Comparable to rated A 0.1%; Aa 1.2%; B 4.5%; Baa 10.9%; Ba 4.2%

When a more conservative investment strategy is necessary for temporary
defensive purposes, the Series may retain cash or invest part or all of its
assets in cash equivalents or in other fixed income securities deemed by
management to be consistent with a temporary defensive posture.

Risk Factors. While the Multi-Sector Series' management will seek to
minimize risk through diversification and continual evaluation of current
developments in interest rates and economic conditions, the market prices of
lower rated securities generally fluctuate more than those of higher rated
securities, and using credit ratings helps to evaluate the safety of principal
and interest but does not assess market risk. Economic downturns and interest
rate increases may cause a higher incidence of lower-rated securities' defaults.
Such fluctuations in the market value of portfolio securities subsequent to
their acquisition by the Multi-Sector Series will not normally affect cash
income from such securities but will be reflected in the Series' net asset
value. Additionally, with lower rated securities there is a greater possibility
that an adverse change in the financial condition of the issuer, particularly a
highly leveraged issuer, may affect its ability to make payments of income and
principal. Also, because the Series intends to invest primarily in securities in
the lower rating categories, the achievement of its goals will be more dependent
on management's credit analysis ability than would be the case if the Series
were investing in securities in the higher rated categories. Lower-rated
securities may be thinly traded and therefore harder to value and more
susceptible to adverse publicity concerning the issuer. In addition, legislation
may be enacted in the future that could depress the price of lower-rated
securities.

The Multi-Sector Series may invest in debt obligations that do not make any
interest payments for a specified period of time prior to maturity or until
maturity ("deferred coupon" or "zero coupon" obligations). The value of these
obligations may fluctuate more in response to interest rate changes than would
the value of debt obligations that make current interest payments. In addition,
because the Series will accrue income on these securities prior to the receipt
of each payment, it may have to dispose of portfolio securities to distribute
income to the Accounts for tax purposes. (See the Statement of Additional
Information.)

MONEY MARKET SERIES

The investment objective of the Money Market Series is to provide maximum
current income consistent with capital preservation and liquidity. The Series
seeks to achieve its objective by investing in a managed portfolio of the
following high quality money market instruments:

(a) obligations issued or guaranteed as to principal and interest by the
United States Government or its agencies, authorities or
instrumentalities;

(b) obligations issued by U.S. banks and savings and loan associations
(such as bankers' acceptances, certificates of deposit and time
deposits, including dollar-denominated obligations of foreign
branches of U.S. banks and U.S. branches of foreign banks) and
dollar-denominated obligations unconditionally guaranteed as to
payment by such banks or savings and loan associations, which at the
date of investment have capital, surplus, and undivided
profits in excess of $100,000,000 as of the date of their most
recently published financial statements; and obligations of
other banks or savings and loan associations if such
obligations are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance
Corporation;

(c) commercial paper which at the date of investment is issued or
guaranteed by a company whose commercial paper is rated A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investors Service,
Inc., or F-1 by Fitch's Investors Service or, if not rated, is
issued or guaranteed by a company which at the date of the
investment has an outstanding debt issue rated AA or higher by
Standard & Poor's or Aa or higher by Moody's;

(d) other corporate obligations maturing in one year or less which at the
date of investment are rated AA or higher by Standard & Poor's or Aa
or higher by Moody's; and

(e) repurchase agreements with recognized securities dealers and member
banks of the Federal Reserve System with respect to any of the
foregoing obligations.

All of the Money Market Series investments will mature in 397 days or less.
In addition, the average maturity of the Series' portfolio securities based on
their dollar value will not exceed 90 days. By limiting the maturity of its
investments, the Money Market Series seeks to lessen the changes in the value of
its assets caused by market factors.

Generally, investments will be limited to securities rated in the two
highest short-term rating categories by at least two nationally recognized
statistical rating organizations, or by one such organization if only one has
rated the security, and comparable unrated securities. In addition, no more than
5% of the Series' total assets will be invested in securities of any one issuer
or in securities not rated in the highest short-term rating category. Moreover,
no more than the greater of 1% of the Series' total assets or $1 million will be
invested in the securities of any one issuer that are not in the highest
short-term rating category.

This Series, consistent with its investment objective, will attempt to
maximize yield through portfolio trading. This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market. It is
expected that the Series' portfolio transactions will be generally with issuers
or dealers acting as principal. Accordingly, this Series will normally not pay
any brokerage commissions.

The value of the securities in the Money Market Series' portfolio can be
expected to vary inversely to changes in prevailing interest

2-11

<PAGE>

rates, with the amount of such variation depending primarily on the period
of time remaining to maturity of the security. Long-term obligations may
fluctuate more in value than short-term obligations. If interest rates increase
after a security is purchased, the security, if sold, could be sold for a loss.
On the other hand, if interest rates decline after a purchase, the security, if
sold, could be sold at a profit. If, however, the security is held to maturity,
no gain or loss will be realized as a result of interest rate fluctuations,
although the day-to-day valuation of the portfolio could fluctuate. Substantial
withdrawals of the amounts held in the Money Market Series could require it to
sell portfolio securities at a time when a sale might not be favorable. The
value of a portfolio security may also be affected by other factors, including
factors bearing on the creditworthiness of its issuer.

GROWTH SERIES
The investment objective of the Growth Series (formerly designated the
"Stock Series") is to achieve intermediate and long-term growth of capital, with
income as a secondary consideration. The Series seeks to achieve its investment
objective by investing principally in common stocks of corporations believed by
management to offer growth potential over both the intermediate and the long
term. In pursuing capital growth, emphasis is placed on the selection of
securities of well-established corporations with aggressive and experienced
managements. This Series may invest not more than 20% of the market value of its
total assets in convertible securities, that is, debt securities and preferred
stocks which are convertible into, or carry the right to purchase, common stock
or other equity securities. It is not intended at this time that this Series
will invest in warrants.

Although the Growth Series will not make a practice of short-term trading,
purchases and sales of securities will be made whenever necessary to achieve
the investment objective of the Series without regard to the resulting brokerage
costs.

The Fund management intends to diversify investments of the Series among a
number of corporations without concentration in any particular industry. When,
in the opinion of the Fund management, a temporary defensive position is
warranted, the Series may maintain part or all of its assets in cash or
short-term investments such as United States Treasury bills and commercial
paper; it may also invest in preferred stocks, nonconvertible bonds, notes,
government securities or other fixed-income securities for temporary defensive
purposes.

TOTAL RETURN SERIES
The investment objective of the Total Return Series (formerly designated the
"Total-Vest Series") is 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. The Series seeks to achieve its investment objective by investing in three
market segments: stocks, bonds, and money market instruments. In addition to
trading techniques described fully in the Statement of Additional Information,
the Series has retained the flexibility to write (sell) covered call options, to
purchase call and put options and to enter into financial futures contracts.

The Total Return Series will adjust the mix of investments among the three
market segments to capitalize on perceived variations in return potential
produced by the interaction of changing financial markets and economic
conditions. It is expected that such adjustments will normally be made in a
gradual manner over a period of time. THERE ARE NO MINIMUM OR MAXIMUM
PERCENTAGES AS TO THE AMOUNT OF THE SERIES' ASSETS WHICH MAY BE INVESTED IN EACH
OF THE MARKET SEGMENTS. MAJOR CHANGES IN INVESTMENT MIX MAY OCCUR SEVERAL TIMES
A YEAR OR OVER SEVERAL YEARS, DEPENDING UPON MARKET AND ECONOMIC CONDITIONS AND
EXCEPT FOR RESTRICTIONS NOTED HEREIN AND UNDER "INVESTMENT RESTRICTIONS," THE
INVESTMENT ADVISER HAS COMPLETE FLEXIBILITY IN DETERMINING THE AMOUNT AND NATURE
OF COMMON STOCK, DEBT OR MONEY MARKET INSTRUMENTS IN WHICH THE SERIES MAY
INVEST.

Investments in one of the three market segments will be made with a specific
purpose in mind. Investments in the stock segment will be for the purpose of
attempting to achieve a superior total rate of return over an extended period of
time from both capital appreciation and current income. Investments in the bond
segment will be for the purpose of attempting to achieve as high a total rate of
return on an annual basis as is considered consistent with the preservation of
capital values and may include investments of up to 5% of the Series' total
assets in high risk fixed income securities (commonly referred to as "junk
bonds"). Investments in the money market segment will be for the purpose of
attempting to achieve high current income, the preservation of capital, and
liquidity. The types of securities in each of these three market segments that
the Total Return Series will invest in are listed in the Statement of Additional
Information.

Cash may be held to provide for expenses and anticipated redemption payments
and so that orderly redemption payments may be carried out in accordance with
the Total Return Series' investment policies.

See Multi-Sector Series and Money Market Series for a description of risks
generally associated with investing in the Total Return Series.

INTERNATIONAL SERIES
The International Series seeks as its investment objective a high total
return consistent with reasonable risk. It intends to achieve its objective by
investing primarily in an internationally diversified portfolio of equity
securities. It intends to reduce its risk by engaging in hedging transactions
involving options, futures contracts and foreign currency transactions (see
"Other Special Investment Methods"). Investments may be made for capital growth
or for income or any combination thereof for the purpose of achieving a high
overall return. There can be no assurance that the International Series will
achieve its objective.

There is no limitation on the percentage or amount of the International
Series assets which may be invested for capital growth or income, and therefore
at any particular time the investment emphasis may be placed solely or primarily
on growth of capital or on income. In determining whether the International
Series will be invested for capital growth or income, the Adviser will analyze
the international equity and fixed income markets and seek to assess the degree
of risk and level of return that can be expected from each
market. The International Series will invest primarily in non-United

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States issuers, and under normal circumstances, more than 80% of the
International Series' total assets will be invested in non-United States issuers
located in not less than three foreign countries.

In pursuing its objective, the International Series will invest primarily in
common stocks of established non-United States companies believed to have
potential for capital growth, income or both. However, there is no requirement
that the International Series invest exclusively in common stocks or other
equity securities. The International Series may invest in other types of
securities including, but not limited to, convertible securities, preferred
stocks, bonds, notes and other debt securities of companies (including
Euro-currency instruments and securities) or obligations of domestic or foreign
governments and their political subdivisions, and in foreign currency
transactions. The Series may invest up to 10% of its total assets in bonds
(sometimes referred to as "junk bonds") considered to be less than investment
grade (but which are not in default at the time of investment), which may
subject the Series to risks attendant to such bonds (see "Risk Factors" below).
When the Adviser believes that the total return potential in debt securities
equals or exceeds the potential return on equity securities, the Series may
substantially increase its holdings in debt securities. The International Series
may establish and maintain part or all of its assets in reserves for temporary
defensive purposes or to enable it to take advantage of buying opportunities.
The International Series reserves may be invested in domestic as well as foreign
short-term money market instruments including, but not limited to, government
obligations, certificates of deposit, bankers' acceptances, time deposits,
commercial paper, short-term corporate debt securities and repurchase
agreements. The International Series may also engage in certain options
transactions, and enter into futures contracts and related options for hedging
purposes, invest in repurchase agreements and lend portfolio securities (see
"Other Special Investment Methods").

The International Series may also invest in the securities of other
investment companies subject to the limitations contained in the 1940 Act (see
"Investment Restrictions" in the Statement of Additional Information). In
certain countries, investments may only be made by investing in other investment
companies that, in turn, are authorized to invest in the securities that are
issued in such countries. The Fund's purchase of securities of such other
investment companies may result in the layering of expenses such that
shareholders indirectly bear a proportionate part of the expenses for such
investment companies including operating costs and investment advisory and
administrative fees.

The International Series makes investments in various countries. Under
normal circumstances, business activities in a number of different foreign
countries will be represented in the International Series' investments. The
International Series may, from time to time, have more than 25% of its assets
invested in any major industrial or developed country which in the view of the
Adviser poses no unique investment risk. The International Series may purchase
securities of companies, wherever organized, which have their principal
activities and interests outside the United States. Under exceptional economic
or market conditions abroad, the International Series may, for temporary
defensive purposes, invest all or a major portion of its assets in U.S.
government obligations or securities of companies incorporated in and having
their principal activities in the United States. The International Series may
also invest its reserves in domestic short-term money-market instruments as
described above.

In determining the appropriate distribution of investments among various
countries and geographic regions, the Adviser ordinarily will consider the
following factors: prospects for relative economic growth among foreign
countries; expected levels of inflation; relative price levels of the various
capital markets; government policies influencing business conditions; the
outlook for currency relationships and the range of individual investment
opportunities available to the international investor.

The International Series may make investments in developing countries, which
involve exposure to economic structures that are generally less diverse and
mature than in the United States, and to political systems which may be less
stable. A developing country can be considered to be a country which is in the
initial stages of its industrialization cycle. In the past, markets of
developing countries have been more volatile than the markets of developed
countries; however, such markets often have provided higher rates of return to
investors. The Adviser believes that these characteristics can be expected to
continue in the future.

Generally, the Series will not trade in securities for short-term profits
but, when circumstances warrant, securities may be sold without regard to the
length of time held.

Risk Factors. There are substantial and different risks involved which
should be carefully considered by any investor considering foreign investments.
For example, there is generally less publicly available information about
foreign companies than is available about companies in the United States.
Foreign companies are generally not subject to uniform audit and financial
reporting standards, practices and requirements comparable to those in the
United States. In addition, if it should become necessary, the Fund could
encounter difficulties involving legal processes abroad.

Foreign securities involve currency risks. The U.S. dollar value of a
foreign security tends to decrease when the value of the dollar rises against
the foreign currency in which the security is denominated and tends to increase
when the value of the dollar falls against such currency. Fluctuations in
exchange rates may also affect the earning power and asset value of the foreign
entity issuing the security. Dividend and interest payments may be repatriated
based on the exchange rate at the time of disbursement, and restrictions on
capital flows may be imposed. Losses and other expenses may be incurred in
converting between various currencies in connection with purchases and sales of
foreign securities.

Foreign stock markets are generally not as developed or efficient as those
in the United States. In most foreign markets volume and liquidity are less than
in the United States and, at times, volatility of price can be greater than in
the United States. Fixed commissions on foreign stock exchanges are generally
higher than the negotiated commissions on United States exchanges. There is
generally less government supervision and regulation of foreign stock exchanges,
brokers and companies than in the United States.

There also is the possibility of adverse changes in investment or exchange
control regulations, expropriation or confiscatory taxation, limitations on the
removal of funds or other assets, political or social instability, or diplomatic
developments which could adversely affect

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investments, assets or securities transactions of the International Series in
some foreign countries. The International Series is not aware of any investment
or exchange control regulations which might substantially impair the operations
of the Series as described, although this could change at any time.

For many foreign securities, there are U.S. dollar-denominated American
Depository Receipts ("ADRs"), which are traded in the United States on
exchanges or over the counter and are sponsored and issued by domestic banks.
ADRs represent the right to receive securities of foreign issuers deposited in a
domestic bank or a correspondent bank. ADRs do not eliminate all the risk
inherent in investing in the securities of foreign issuers. However, by
investing in ADRs rather than directly in foreign issuers' stock, the
International Series can avoid currency risks during the settlement period for
either purchases or sales. In general, there is a large, liquid market in the
United States for many ADRs. The information available for ADRs is subject to
the accounting, auditing and financial reporting standards of the domestic
market or exchange on which they are traded, which standards are more uniform
and more exacting than those to which many foreign issuers may be subject. The
International Series may also invest in European Depository Receipts ("EDRs"),
which are receipts evidencing an arrangement with a European bank similar to
that for ADRs and are designed for use in the European securities markets. EDRs
are not necessarily denominated in the currency of the underlying security.

The dividends and interest payable on certain of the International Series'
foreign securities may be subject to foreign withholding taxes, thus reducing
the net amount available for distribution to the International Series'
shareholders. Investors should understand that the expense ratio of the
International Series can be expected to be higher than those of investment
companies investing in domestic securities since the costs of operation are
higher. There can be no assurance that the International Series' investment
policy will be successful or that its investment objective will be attained.

Since the International Series may invest up to 10% of its total assets in
bonds considered to be less than investment grade, it may be exposed to greater
risks than if it did not invest in such bonds. With lower rated bonds, there is
a greater possibility that an adverse change in the financial condition of the
issuer may affect its ability to pay principal and interest.

BALANCED SERIES
The Balanced Series seeks as its investment objectives reasonable income,
long-term capital growth and conservation of capital. The Balanced Series
intends to invest based on combined considerations of risk, income, capital
enhancement and protection of capital value.

The Balanced Series may invest in any type or class of security. Normally,
the Balanced Series will invest in common stocks and fixed income securities;
however, it may also invest in securities convertible into common stocks. At
least 25% of the value of its assets will be invested in fixed income senior
securities. The overall economic and financial outlook determines the allocation
of assets between fixed income and common stock investments. Fixed income
investments are typically made in high quality, lower risk securities. Common
stock investments are made in companies with intermediate and long-term earnings
growth potential such as are invested in by the Growth Series. The Series
attempts to invest in common stocks belonging to fundamentally attractive
sectors and industries and strives to be overweighted in these areas relative to
their representation in broad market indices such as the Standard & Poor's 500.
The current outlook and the asset allocation are continuously reviewed.

The Series may also engage in certain options transactions and enter into
financial futures contracts and related options for hedging purposes and may
invest in deferred or zero coupon debt obligations. (See "Other Special
Investment Methods" and the Statement of Additional Information.)

In implementing the investment objectives of this Series, management will
select securities believed to have potential for the production of current
income, with emphasis on securities that also have potential for capital
enhancement. In an effort to protect its assets against major market declines,
or for other temporary defensive purposes, the Balanced Series may actively
pursue a policy of retaining cash or investing part or all of its assets in cash
equivalents, such as government securities and high grade commercial paper.

REAL ESTATE SERIES
The Real Estate Series seeks as its investment objective capital
appreciation and income with approximately equal emphasis. It intends under
normal circumstances to invest in marketable securities of publicly traded real
estate investment trusts ("REITs") and companies that are principally engaged in
the real estate industry. Under normal circumstances, the Series intends to
invest at least 75% of the value of its assets in these securities.

REITs are pooled investment vehicles which invest primarily in income
producing real estate or real estate related loans or interests. Generally,
REITs can be classified as equity REITs, mortgage REITs, or hybrid REITs. Equity
REITs invest the majority of their assets directly in real property and derive
income primarily from the collection of rents. Equity REITs can also realize
capital gains by selling properties that have appreciated in value. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. Hybrid REITs combine the
characteristics of both equity REITs and mortgage REITs. The Series intends to
emphasize investment in equity REITs.

In determining whether an issuer is "principally engaged" in the real estate
industry, PRS seeks companies which derive at least 50% of their gross revenues
or net profits from the ownership, development, construction, financing,
management or sale of commercial, industrial or residential real estate. The
equity securities of real estate companies considered for purchase by the Series
will consist of shares of beneficial interest, marketable common stock, rights
or warrants to purchase common stock, and securities with common stock
characteristics such as preferred stock and debt security's convertible into
common stock.

The Real Estate Series also may invest up to 25% of its total assets in
(a) marketable debt securities of companies principally engaged in the real
estate industry; (b) mortgage-backed securities such as mortgage pass-through
certificates, real estate mortgage investment conduit ("REMIC") certificates and
collateralized mortgage obligations ("CMOs"); or (c) short-term investments
listed below.

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The Real Estate Series invests in debt securities only if, at the date of
investment, they are rated within the four highest grades as determined by
Moody's (Aaa, Aa, A or Baa) or by S&P (AAA, AA, A or BBB) or, if not rated or
rated under a different system, are judged by PRS to be of equivalent quality to
debt securities so rated. Securities rated Baa or BBB are medium grade
investment obligations that may have speculative characteristics. Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments in the case of such obligations
than is the case for higher grade securities. The Series may, but is not
obligated to, dispose of debt securities whose credit quality falls below
investment grade. Unrated debt securities may be less liquid than comparable
rated debt securities and may involve somewhat greater risk than rated debt
securities.

For temporary defensive purposes (as when market conditions in real estate
securities are extremely adverse such that PRS believes there are extraordinary
risks associated with investment therein), the Series may invest up to 100% of
its total assets in short-term investments such as money market instruments
consisting of securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; repurchase agreements; certificates of deposit
and bankers' acceptances issued by banks or savings and loan associations having
net assets of at least $500 million as of the end of their most recent fiscal
year; high-grade commercial paper rated at time of purchase, in the top two
categories by a national rating agency or determined to be of comparable quality
by PRS or ABKB at the time of purchase; and other long- and short-term
instruments which are rated A or higher by S&P or Moody's at the time of
purchase.

Risk Factors. The Real Estate Series is non-diversified under the federal
securities laws. As a non-diversified portfolio, there is no restriction under
the Investment Company Act of 1940 (the "1940 Act") on the percentage of assets
that may be invested at any time in the securities of any one issuer. To the
extent that the Real Estate Series is not fully diversified, it may be more
susceptible to adverse economic, political or regulatory developments affecting
a single issuer than would be the case if it were more broadly diversified. In
addition, investments by the Real Estate Series in securities of companies
providing mortgage servicing will be subject to the risks associated with
refinancings and their impact on servicing rights.

Although the Real Estate Series does not invest directly in real estate, it
does invest primarily in real estate securities and accordingly, the value of
shares of the Real Estate Series will fluctuate in response to changes in
economic conditions within the real estate industry. Risks associated with the
direct ownership of real estate and with the real estate industry in general
include, among other things, possible declines in the value of real estate;
risks related to general and local economic conditions; possible lack of
availability of mortgage funds; over-building; extended vacancies of properties;
increases in competition, property taxes and operating expenses; changes in
zoning laws; costs resulting from the clean-up of, and liability to third
parties for damages resulting from, environmental problems; casualty or
condemnation losses; uninsured damages from flood, earthquakes or other natural
disasters; limitations on and variations in rents; dependency on property
management skill; the appeal of properties to tenants; and changes in interest
rates.

Investing in REIT's involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. Equity REIT's
may be affected by changes in the value of the underlying property owned by the
REIT's, while mortgage REIT's may be affected by the quality of any credit
extended. REIT's are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. The Portfolio may invest in new
or unseasoned REIT issuers and it may be difficult or impossible for PRS or ABKB
to ascertain the value of each of such REIT's underlying assets, management
capabilities and growth prospects. In addition, REIT's are subject to heavy cash
flow dependency, default by borrowers, self-liquidation, and the possibilities
of failing to qualify for the exemption from tax or distributed income under the
Internal Revenue Code of 1986, as amended (the "Code") and failing to maintain
their exemptions from the 1940 Act. REIT's whose underlying assets include
long-term health care properties, such as nursing, retirement and assisted
living homes may be impacted by federal regulations concerning the health care
industry. The Series will indirectly bear its proportionate share of any
expenses paid by the Series itself.

REIT's (especially mortgage REIT's) are subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations usually rises. Conversely, when interest rates rise, the value of a
REIT's investment in fixed rate obligations can be expected to decline. In
contrast as interest rates on adjustable rate mortgage loans are reset
periodically, yields on a REIT's investment in such loans will gradually align
themselves to reflect changes in market interest rates, causing the value of
such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

In addition, investing in REIT's involves risks similar to those associated
with investing in small capitalization companies. REIT's may have limited
financial resources, may trade less frequently and in a limited volume and may
be more subject to abrupt or erratic price movements than larger capitalization
stocks included in the S&P 500 Index.

The Series commenced operations on May 1, 1995 based upon an initial
capitalization of $5 million provided by Phoenix. The ability of the Series to
raise additional capital for investment purposes may directly effect the
spectrum of series holdings and performance. While many of the officers and
directors of PRS are experienced real estate professionals, based upon its
relatively recent formation and involvement with real estate securities, PRS
does not have an operating history of investing in the types of real estate
securities expected to be held within the Real Estate Series. Even though PRS is
an affiliate of PIC, PRS has no prior experience as an investment adviser.

STRATEGIC THEME SERIES

The Strategic Theme Series seeks as its investment objective long-term
appreciation of capital through investing in securities of companies that the
Adviser believes are particularly well positioned to benefit from cultural,
demographic, regulatory, social or technological changes worldwide. Examples of
thematic investing would include investing in oil and gas exploration companies
during the energy shortage years of the late 1970's, owning companies which
benefited from lower inflation trends during the early 1980's, investing in

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companies acquiring cellular franchises in the late 1980's, and technology
companies during the 1990's.

The Adviser will not concentrate its investments in specific industries in
amounts greater than 25% of the assets of the Series in any particular
"industry(ies)" or group(s) of "industries" without shareholder approval. In
determining when and whether to invest in particular industries, the Adviser
will establish strategic (major changes affecting markets for prolonged periods)
and tactical (focused, short-term) investment themes. Investment themes shall
generally reflect trends which appear likely to drive stocks with similar
technologies and products or which embody broad social, economic, political and
technological considerations; offer substantial appreciation potential; present
a visionary idea or creative solution; and exhibit some independence from
economic cycles. The Adviser may change investment themes once it has determined
that an investment theme has become saturated or fully exploited. The Adviser
may pursue one or more investment themes at any time.

The Adviser will seek to identify companies which, in addition to being
considered well positioned to benefit from investment themes identified, are
also believed to possess attributes such as, but not limited to, good financial
resources, satisfactory return on capital, enhanced industry position and
superior management skills.

The Strategic Theme Series also may invest in preferred stocks, investment
grade bonds (Moody's Investors Service, Inc. rating Baa or higher or Standard &
Poor's Ratings Group rating BBB or higher), convertible preferred stocks and
convertible debentures if in the judgment of the Adviser the investment would
further its investment objective. The Series may also engage in certain options
transactions and enter into financial futures contracts and related options for
hedging purposes. The Series may also invest up to 35% of its assets in the
securities of foreign issuers. See "Other Special Investment Methods." Each
security held will be monitored to determine whether it is contributing to the
basic objective of long-term appreciation of capital.

For temporary defensive purposes (as when market conditions for growth
stocks are adverse), investments may be made in fixed income securities with or
without warrants or conversion features. In addition, for such temporary
defensive purposes, the Series may pursue a policy of retaining cash or
investing part or all of its assets in cash equivalents. When the Series' assets
are held in cash or cash equivalents, it is not investing in securities intended
to meet the Series' investment objective.

Risk Factors. To the extent that the Series invests in a single investment
theme, it may be more susceptible to adverse economic, political or regulatory
developments than would be the case if it invested in a broader spectrum of
themes. In addition, the Series' investments in common stocks of companies with
limited operating history may result in higher volatility in returns. Further,
the successful effectuation of the thematic investment strategy used by the
Adviser is dependent upon the Adviser's ability to anticipate emerging market
trends, exploit such investment opportunities and to thereafter divest of such
securities upon saturation. No assurances can be given that the investment
strategies utilized will positively correlate with any or all such marketplace
trends or that other, possibly more profitable investment trends could be
overlooked.

The Series commenced operations on January 29, 1996 based upon an initial
capitalization of $5 million provided by Phoenix. The ability of the Series to
raise additional capital for investment purposes may directly affect the
spectrum of portfolio holdings and performance.

ASIA SERIES
The investment objective of the Asia Series is to provide long term capital
appreciation consistent with reasonable risk. It is intended that this Series
will achieve its objective by investing under normal market conditions at least
65% of its total assets in a diversified portfolio of equity securities of
issuers organized and principally operating in Asia, excluding Japan (i.e.,
companies which derive a significant proportion [at least 50%] of their revenues
or profits from goods produced or sold, investments made, or services performed
in such countries or which have at least 50% of their assets situated in such
countries) and whose principal securities are actively traded on recognized
stock exchanges of such countries. The Series does not intend to invest in
securities which are traded in markets in Japan or in countries organized under
the laws of Japan.

The Series will invest in countries having more established markets in
regions of Asian countries. The Asian countries to be represented in the Series
will ordinarily consist of three or more of the following countries: Australia,
China, Hong Kong, India, Indonesia, South Korea, Malaysia, Pakistan, the
Philippines, Singapore, Sri Lanka, Taiwan and Thailand. There is no requirement
that the Series, at any given time, invest in any one particular country or in
all of the countries listed above or in any other Asian countries or other
developing markets that are open to foreign investment. In determining the
appropriate distribution of investments among various countries and geographic
regions, the Adviser ordinarily will consider the following factors: prospects
for relative economic growth among Asian countries; expected levels of
inflation; relative price levels of the various capital markets; governmental
policies influencing business conditions; the outlook for currency relationships
and the range of individual investment opportunities available to the
international investor. The Series may make investments in developing or
emerging market countries, which involve exposure to economic structures that
are generally less diverse and mature than in the United States, and to
political systems which may be less stable. A developing country can be
considered to be a country which is in the initial stages of its
industrialization cycle. In the past, markets of developing countries have been
more volatile than the markets of developed countries; however, such markets
often have provided higher rates of return to investors.

In pursuing its objective, the Series may also invest in any other type of
security including, but not limited to, convertible securities, preferred
stocks, bonds, notes and other debt securities of companies (including
Euro-currency instruments and securities) or obligations of domestic or foreign
governments and their political subdivisions, and in foreign currency
transactions. Lower-rated and non-rated convertible securities are predominantly
speculative with respect to the issuer's capacity to repay principal and pay
interest. Investment in lower-rated and non-rated convertible fixed-income
securities normally involves a greater degree of market and credit risk than
does investment in securities having higher ratings. The price of these
fixed income securities will generally move in inverse proportion to

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interest rates. In addition, non-rated securities are often less marketable
than rated securities. To the extent that the Series holds any lower rated or
non-rated securities, it may be negatively affected by adverse economic
developments, increased volatility and lack of liquidity.

In certain countries, investments may only be made by investing in other
investment companies that, in turn, are authorized to invest in the securities
that are issued in such countries. The Series may therefore invest in the
securities of other investment companies subject to the limitations contained in
the 1940 Act (see "Investment Restrictions" in the Statement of Additional
Information). The Series' purchase of the securities of other investment
companies (and closed-end companies) results in the layering of expenses
including operating costs, investment advisory and administrative fees.

The Series may establish and maintain reserves of up to 100% of its assets
for temporary defensive purposes under abnormal market or economic conditions.
The Series' reserves may be invested in domestic as well as foreign short-term
money market instruments including, but not limited to, government obligations,
certificates of deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt securities and repurchase agreements. When the Series'
assets are held in cash or cash equivalents it is not investing in securities
intended to meet the Series' investment objective.

See International Series for a description of risks associated with foreign
investments.

Additional discussion regarding risks involved in investing in the Series
are described in the "Other Special Investment Methods" section below.

OTHER SPECIAL INVESTMENT METHODS
- --------------------------------------------------------------------------------

CONVERTIBLE SECURITIES
Each Series may invest in convertible securities. A convertible security is
a bond, debenture, note, preferred stock or other security that may be converted
into or exchanged for a prescribed amount of common stock of the same or a
different issuer within a particular period of time at a specified price or
formula. A convertible security entitles the holder to receive interest
generally paid or accrued on debt or the dividend paid on preferred stock until
the convertible security matures or is redeemed, converted or exchanged.
Convertible securities have several unique investment characteristics such as
(1) higher yields than common stocks, but lower yields than comparable
nonconvertible securities, (2) a lesser degree of fluctuation in value than the
underlying stock since they have fixed income characteristics, and (3) the
potential for capital appreciation if the market price of the underlying common
stock increases. Up to 5% of each of these Series' assets may be invested in
convertible securities that are rated below investment grade (commonly referred
to as "junk" securities). Such securities present greater credit and market
risks than investment grade securities. A convertible security might be subject
to redemption at the option of the issuer at a price established in the
convertible security's governing instrument. If a convertible security held by a
Series is called for redemption, the Series may be required to permit the issuer
to redeem the security, convert it into the underlying common stock or sell it
to a third party.

REPURCHASE AGREEMENTS

The Money Market, Real Estate, International, Strategic Theme and Asia
Series may invest in repurchase agreements. However, no more than 15% of a
Series' net assets will be invested in repurchase agreements having maturities
of more than seven days. A repurchase agreement is a transaction where a Series
buys a security at one price and the seller simultaneously agrees to buy that
same security back at a higher price. Repurchase agreements will be entered into
with commercial banks, brokers and dealers considered by the Board of Trustees
and the Adviser acting at the Board's direction, to be creditworthy. In
addition, the repurchase agreements are always fully collateralized by the
underlying instrument and are marked to market every business day. However, the
use of repurchase agreements involves certain risks such as default by or
insolvency of the other party to the transaction.

OPTIONS

The Multi-Sector, Money Market, Growth, Total Return, Balanced,
International, Strategic Theme and Asia Series may write (sell) covered call
options on securities owned by them, including securities into which convertible
securities are convertible, provided that such call options are listed on a
national securities exchange. Generally, when a Series writes a covered call
option, it will acquire the underlying security or will have absolute and
immediate right to acquire that security without additional consideration upon
conversion or exchange of other securities held by the Series. The Money Market,
Growth and Multi-Sector Series may only purchase call options for the purpose of
terminating a call option previously written. The Total Return, Balanced,
International and Strategic Theme Series may also buy exchange-traded call and
put options on equity and debt securities and on stock market indexes. The
International and Strategic Theme Series also may write or buy Over-the-Counter
(OTC) options, buy put options on securities indices and enter into options
transactions on a foreign currency. Generally, a put option on a securities
index is similar to a put option on an individual security, except that the
value of the option depends on the weighted value of the group of securities
comprising the index and all settlements are made in cash. The International,
Strategic Theme and Asia Series also may invest up to 5% of its net assets in
warrants and stock rights, which are almost identical to call options except
that they are issued by the issuer of the underlying security rather than an
option writer. However, no more than 2% of its net assets will be invested in
warrants and stock rights not traded on the New York Stock Exchange or American
Stock Exchange. A complete description of options, warrants and stock rights,
and their associated risks is contained in the Statement of Additional
Information. Options are forms of "derivatives" in that their value is dependent
on fluctuations in the value of other securities.

The Fund understands the position of the staff of the Securities and
Exchange Commission (the "SEC") to be that purchased OTC options and the assets
used as "cover" for written OTC options are illiquid securities. The Fund has
adopted procedures for engaging in OTC options transactions for the purpose of
reducing any potential adverse effect of such transactions upon the liquidity of
the International Series. A brief description of these procedures and related
limitations appears in the Statement of Additional Information.

2-17

<PAGE>

FINANCIAL FUTURES AND RELATED OPTIONS

The Total Return and Balanced Series may enter into financial futures
contracts for the purchase or sale of debt obligations traded on exchanges
regulated by the Commodity Futures Trading Commission to hedge against
anticipated changes in interest rates that would otherwise have an adverse
effect upon the value of debt securities in its portfolio. A futures contract on
a debt obligation is a binding contractual commitment which, if held until
maturity, will result in an obligation to make or accept delivery of obligations
having a standard face value and rate of return. Hedging is the initiation of an
offsetting position in the futures market which is intended to minimize the risk
associated with a position's underlying securities in the cash market. The
purchase of such futures contracts will not be for speculation but will be
solely for protection of the Series against declines in value. Immediately after
entering into a futures contract for the receipt or delivery of a security, the
value of the securities called for by all of the Total Return or Balanced
Series' futures contracts (both receipts and delivery) will not exceed 10% of
such Series' total assets.

The International, Strategic Theme and Asia Series also may enter into
financial futures contracts and related options to hedge against anticipated
changes in the market value of its portfolio securities or securities which it
intends to purchase or in the exchange rate of foreign currencies. The
International, Strategic Theme and Asia Series will not purchase or sell any
financial futures contract or related option if, immediately thereafter, the sum
of the cash or U.S. Treasury bills committed with respect to its existing
futures and related options positions and the premiums paid for related options
would exceed 5% of the market value of the Series' total assets.

Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser or
Subadviser could be incorrect in its expectations as to the direction or extent
of various interest rate movements or foreign currency exchange rates, in which
case the Series' return might have been greater had hedging not taken place.
There is also the risk that a liquid secondary market may not exist. The risk in
purchasing an option on a financial futures contract is that the Series will
lose the premium it paid. Also, there may be circumstances when the purchase of
an option on a financial futures contract would result in a loss to the Series
even though the purchase or sale of the contract would not have resulted in a
loss. Futures are forms of derivatives.

A complete description of financial futures and related options is contained
in the Statement of Additional Information.

FOREIGN SECURITIES

The International, Strategic Theme and Asia Series will purchase foreign
securities as discussed above. In addition, the other Series may invest up to
25% (or 35% as to the Strategic Theme Series) of total net asset value in
foreign securities. The Multi-Sector Series may invest up to 35% of total net
asset value in foreign debt securities. The Series other than the International
and Strategic Theme Series will purchase foreign debt securities only if issued
in U.S. dollar denominations. Investments in foreign securities, particularly
those of non-governmental issuers, involve considerations which are not
ordinarily associated with investing in domestic issuers. Those considerations
are discussed under "International Series."

Foreign Currency Transactions. The value of the assets of the Series
invested in foreign securities, as measured in United States dollars, may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations, and the Series may incur costs in connection
with conversions between various currencies. The Series will conduct foreign
currency exchange transactions either on a spot (i.e., cash) basis at the spot
rate prevailing in the foreign currency exchange market, or through forward
contracts to purchase or sell foreign currencies. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded directly between currency traders (usually large
commercial banks) and their customers. At the time of the purchase of a forward
foreign currency exchange contract, an amount of cash, U.S. Government
securities or other appropriate high-grade debt obligations equal to the market
value of the contract, minus the Series' initial margin deposit with respect
thereto, will be deposited in a segregated account with the Fund's custodian
bank to collateralize fully the position and thereby ensure that it is not
leveraged.

When a Series enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may want to establish the United States
dollar cost or proceeds, as the case may be. By entering into a forward contract
in United States dollars for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, a Series is able to
protect itself against a possible loss between trade and settlement dates
resulting from an adverse change in the relationship between the United States
dollar and such foreign currency. However, this tends to limit potential gains
which might result from a positive change in such currency relationships. A
Series also may hedge its foreign currency exchange rate risk by engaging in
currency financial futures and options transactions. For more information about
foreign currency transactions, see the Statement of Additional Information.

LEVERAGE
The Strategic Theme Series may from time to time increase its ownership of
securities holdings above the amounts otherwise possible by borrowing from banks
at fixed amounts of interest and investing the borrowed funds. The Fund will
borrow only from banks, and only if immediately after such borrowing the value
of the assets of the Series (including the amount borrowed), less its
liabilities (not including any borrowings) is at least three times the amount of
funds borrowed for investment purposes. The Fund may borrow up to 25% of the net
assets of such Series, not including the proceeds of any such borrowings.
However, the amount of the borrowings will be dependent upon the availability
and cost of credit from time to time. If, due to market fluctuations or other
reasons, the value of such Series' assets computed as provided above become less
than three times the amount of the borrowings for investment purposes, the Fund,
within three business days, is required to reduce bank debt to the extent
necessary to meet the required 300% asset coverage.

Interest on money borrowed will be an expense of those Series with respect
to which the borrowing has been made. Because such

2-18

<PAGE>

expense otherwise would not be incurred, the net investment income of such
Series is not expected to be as high as it otherwise would be during periods
when borrowings for investment purposes are substantial.

Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing also must be made subject to an agreement by the
lender that any recourse is limited to the assets of such Series with respect to
which the borrowing has been made.

Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of such Series' shares to rise
faster than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover its cost
(including any interest paid on the monies borrowed) to such Series, the net
asset value of the Series will decrease faster than otherwise would be the
case.

PRIVATE PLACEMENTS AND RULE 144A SECURITIES

The Strategic Theme Series may purchase securities which have been privately
issued and are subject to legal restrictions on resale or which are issued to
qualified institutional investors under special rules adopted by the SEC. Such
securities may offer higher yields than comparable publicly traded securities.
Such securities ordinarily can be sold by the Series in secondary market
transactions to certain qualified investors pursuant to rules established by the
SEC, in privately negotiated transactions to a limited number of purchasers or
in a public offering made pursuant to an effective registration statement under
the Securities Act of 1933, as amended ( the "1933 Act"). Public sales of such
securities by the Fund may involve significant delays and expense. Private
sales often require negotiation with one or more purchasers and may produce less
favorable prices than the sale of similar unrestricted securities. Public sales
generally involve the time and expense of the preparation and processing of a
registration statement under the 1933 Act (and the possible decline in value of
the securities during such period) and may involve the payment of underwriting
commissions. In some instances, the Series may have to bear certain costs of
registration in order to sell such shares publicly. Except in the case of
securities sold to qualifying institutional investors under special rules
adopted by the SEC for which the Trustees determine the secondary market is
liquid, Rule 144A securities will be considered illiquid. Trustees may determine
the secondary market is liquid based upon the following factors which will be
reviewed periodically as required pursuant to procedures adopted by the Series:
the number of dealers willing to purchase or sell the security; the frequency of
trades; dealer undertakings to make a market in the security, and the nature of
the security and its market. Investing in Rule 144A Securities could have the
effect of increasing the level of these Series' illiquidity to the extent that
qualified institutional buyers become, for a time, uninterested in purchasing
these securities. Each Series may invest up to 15% of its net assets in
illiquid securities.

MORTGAGE-BACKED SECURITIES

The Real Estate Series also may invest in mortgage-backed securities such
as mortgage pass-through certificates, real estate mortgage investment conduit
("REMIC") certificates and collateralized mortgage obligations ("CMOs"). CMOs
are hybrid instruments with characteristics of both mortgage-backed and mortgage
pass-through securities. Similar to a bond, interest and pre-paid principal on a
CMO are paid, in most cases, semi-annually. CMOs may be collateralized by
whole mortgage loans but are more typically collateralized by portfolios of
mortgage pass-through securities guaranteed by Government National Mortgage
Association (GNMA), or Federal National Mortgage Association. CMOs are
structured into multiple classes, with each class bearing a different stated
maturity. Monthly payments of principal, including prepayments, are first
returned to investors holding the shortest maturity class; investors holding the
longer maturity classes receive principal only after the first class has been
retired. REMICs are similar to CMOs and are fixed pools of mortgages with
multiple classes of interests held by investors.

The Series also may invest in pass-through securities that are derived
from mortgages. A pass-through security is formed when mortgages are pooled
together and undivided interests in the pool or pools are sold. The cash flow
from the mortgages is passed through to the holders of the securities in the
form of periodic payments of interest, principal and prepayments (net of a
service fee).

The Series may purchase pass-through securities at a premium or at a
discount. The value of pass-through securities in which the Series may invest
will fluctuate with changes in interest rates. The value of such securities
varies inversely with interest rates, except that when interest rates decline,
the value of pass-through securities may not increase as much as other debt
securities because of the prepayment feature. Changes in the value of such
securities will not affect interest income from those obligations but will be
reflected in the Series' net asset value.

A particular risk associated with pass-through securities involves the
volatility of prices in response to changes in interest rates, or prepayment
risk. Prepayment rates are important because of their effect on the yield and
price of securities. Prepayments occur when the holder of an individual mortgage
prepays the remaining principal before the mortgages' scheduled maturity date.
As a result of the pass-through of prepayments of principal on the underlying
securities, mortgage-backed securities are often subject to more rapid
prepayment of principal than their stated maturity would indicate. Although the
pattern of prepayments is estimated and reflected in the price paid for
pass-through securities at the time of purchase, the actual prepayment behavior
of mortgages cannot be known at that time. Therefore, it is not possible to
predict accurately the realized yield or average life of a particular issue of
pass-through securities. Prepayments that occur faster than estimated adversely
affect yields for pass-throughs purchased at a premium (that is, a price in
excess of principal amount) and may cause a loss of principal because the
premium may not have been fully amortized at the time the obligation is repaid.
The opposite is true for pass-throughs purchased at a discount. Furthermore, the
proceeds from prepayments usually are reinvested at current market rates, which
may be higher than, but usually are lower than, the rates earned on the original
pass-through securities. Prepayments on a pool of mortgage loans are influenced
by a variety of economic, geographic, social and other factors, including
changes in mortgagors' housing needs, job transfers, unemployment, mortgagors;
net equity in the mortgaged properties and servicing decisions. Generally,
however, prepayments on fixed rate mortgage loans will increase during a period
of falling interest rates and decrease during a period of rising interest rates.

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<PAGE>

Mortgage-backed securities may decrease in value as a result of increases in
interest rates and may benefit less than other fixed income securities or
decline in value from declining interest rates because of risk of prepayment.
Pass-through securities are forms of derivatives.

LENDING OF PORTFOLIO SECURITIES

Subject to certain investment restrictions, a Series may from time to time
lend securities from its portfolio to brokers, dealers and financial
institutions deemed creditworthy and receive, as collateral, cash or cash
equivalents which at all times while the loan is outstanding will be maintained
in amounts equal to at least 100% (except the Asia Series which will maintain an
amount equal to at least 102%) of the current market value of the loaned
securities. Any cash collateral will be invested in short-term securities which
will increase the current income of the Series lending its securities. A Series
will have the right to regain record ownership of loaned securities to exercise
beneficial rights such as voting rights and subscription rights. While a
securities loan is outstanding, the Series is to receive an amount equal to any
dividends, interest or other distributions with respect to the loaned
securities. A Series may pay reasonable fees to persons unaffiliated with the
Fund for services in arranging such loans.

Even though securities lending usually does not impose market risks on the
lending Series, a Series would be subject to risk of loss due to an increase in
value if the borrower fails to return the borrowed securities for any reason
(such as the borrower's insolvency). Moreover, if the borrower of the securities
is insolvent, under current bankruptcy law, a Series could be ordered by a court
not to liquidate the collateral for an indeterminate period of time. If the
borrower is the subject of insolvency proceedings and the collateral held may
not be liquidated, the result could be a material adverse impact on the
liquidity of the lending Series.

INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

The Fund may not invest more than 25% of the assets of any one Series in
any one industry (except that the Money Market and Total Return Series may
invest more than 25% of their assets in the banking industry and the Real Estate
Series may invest at least 75% of its assets in the real estate industry). If
the Fund makes loans of the portfolio securities of any Series, the market
value of the securities loaned may not exceed 25% of the market value of the
total assets of such Series. The Fund may borrow money from a bank provided
such borrowing does not exceed 10% of the net asset value, not considering any
such borrowings as liabilities.

In addition to the investment restrictions described above, each Series'
investment program is subject to further restrictions which are described in the
Statement of Additional Information. The restrictions for each Series are
fundamental and may not be changed without shareholder approval.

PORTFOLIO TURNOVER
- --------------------------------------------------------------------------------

Each Series pays brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover involves a correspondingly greater
amount of brokerage commissions and other costs which must be borne directly by
a Series and thus indirectly by its shareholders. It may also result in the
realization of larger amounts of short-term capital gains, which are taxable to
shareholders as ordinary income. The rate of portfolio turnover is not a
limiting factor when the Adviser deems changes appropriate. It is anticipated
that the turnover rate for the Multi-Sector Series will not generally exceed
350%; the turnover rate for the Growth Series will not generally exceed 300%;
the turnover rate for the International Series will not generally exceed 150%;
the turnover rate for the Real Estate and Asia Series will not generally exceed
75%; the turnover rate for the Strategic Theme Series will not generally exceed
175%. The turnover rate for the Balanced Series will not generally exceed 200%
and the turnover rates for the stock and bond segments of the Balanced Series
are not expected to exceed 250% and 100%, respectively. The turnover rate for
the Total Return Series will not generally exceed 350% and for the stock and
bond segments of the Total Return Series are not expected to exceed 350% and
200%, respectively. Although securities for the Strategic Theme Series are not
purchased for the short-term, the Adviser's strict sell discipline may result in
rates of portfolio turnover equivalent to those identified by the SEC as
appropriate for capital appreciation funds with substantial short-term trading.
The Adviser's approach dictates that underperforming securities and securities
not consistent with prevailing themes will be sold. Portfolio turnover rate is
calculated by dividing the lesser of purchases or sales of portfolio securities
during the fiscal year by the monthly average of the value of the Series'
securities (excluding short-term securities). The turnover rate may vary greatly
from year to year and may be affected by cash requirements for redemptions of
shares of a Series and by compliance with provisions of the Internal Revenue
Code, relieving investment companies which distribute substantially all of their
net income from federal income taxation on the amounts distributed. The 1994 and
1995 rates of portfolio turnover for each Series are set forth under "Financial
Highlights." For more information regarding the consequences relating to a high
portfolio turnover rate, see "Portfolio Transactions and Brokerage" and
"Dividends, Distributions and Taxes" in the Statement of Additional Information.

THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------

The Fund is a mutual fund, technically known as an open-end, diversified
investment company. The Board of Trustees supervises the business affairs and
investments of the Fund, which is managed on a daily basis by the Fund's
investment advisers. The Fund was organized as a Massachusetts Business
Trust on February 18, 1986. The Fund issues shares of beneficial interest, one
for each Series. The Statement of Additional Information contains a list of the
members of the Board of Trustees and the officers of the Fund.

INVESTMENT ADVISERS

The Fund's investment advisers are Phoenix Investment Counsel, Inc.
("PIC"), Phoenix Realty Securities, Inc. ("PRS") and Phoenix-Aberdeen
International Advisors, LLC ("PAIA," collectively, the Advisers"). PIC is
located at 56 Prospect Street, Hartford, Connecticut 06115. PRS is located at 38
Prospect Street, Hartford, Connecticut 06115. PAIA is located at One American
Row, Hartford, Connecticut 06102.

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<PAGE>

PIC was originally organized in 1932 as John P. Chase, Inc. In addition to
the Fund, it also serves as investment adviser to the Phoenix Series Fund,
Phoenix Total Return Fund, Inc. and Phoenix Multi-Portfolio Fund (all portfolios
other than the Real Estate Securities Portfolio) and as subadviser to American
Skandia, Chubb America Fund, Inc., JNL Series Trust and Sun America Series
Trust.

All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("PEPCO"), an indirect subsidiary of Phoenix Duff & Phelps
Corporation. Phoenix owns a controlling interest in Phoenix Duff & Phelps
Corporation. PEPCO also performs bookkeeping and pricing and administrative
services for the Fund. PEPCO is registered as a broker-dealer in 50 states. The
executive offices of Phoenix are located at One American Row, Hartford,
Connecticut 06102; the executive offices of Phoenix Duff & Phelps Corporation
are located at 56 Prospect Street, Hartford, Connecticut 06115 and the principal
offices of PEPCO are located at 100 Bright Meadow Boulevard, P.O. Box 2200,
Enfield, Connecticut 06083-2200.

PRS was formed in 1994 as an indirect subsidiary of Phoenix. In addition
to the Fund, it serves as investment adviser to the Real Estate Securities
Portfolio of the Phoenix Multi-Portfolio Fund and to the American Phoenix
Investment Portfolio.

ABKB/LaSalle Securities Limited Partnership (ABKB), a subsidiary of LaSalle
Partners, serves as subadviser to the Real Estate Series. ABKB's principal
place of business is located at 100 East Pratt Street, Baltimore, Maryland
21202. ABKB has been a registered investment advisor since 1979.

PAIA, a Delaware limited liability company formed in 1996 and jointly
owned and managed by PM Holdings, Inc., is a direct subsidiary of Phoenix and
Aberdeen Fund Managers, Inc., a wholly-owned subsidiary of Aberdeen Trust plc.
Aberdeen Fund Managers, Inc. has its principal offices located at 1 Financial
Plaza, Suite 2210, NationsBank Tower, Fort Lauderdale, Florida 33394. While many
of the officers and directors of the Adviser have extensive experience as
investment professionals, due to its recent formation, the Adviser has no prior
operating history.

Aberdeen Trust was founded in 1983 and through subsidiaries operating from
offices in Aberdeen, Scotland; London, England; Singapore; and Fort Lauderdale,
Florida, provides investment management services to unit and investment trusts,
segregated pension funds and other institutional and private portfolios. As of
September 30, 1995, Aberdeen Trust, and its advisory subsidiaries, had
approximately $4 billion in assets under management.

The Advisers furnish continuously an investment program for each Series and
manage the investment and reinvestment of the assets of each Series subject at
all times to the authority and supervision of the Trustees. All costs and
expenses (other than those specifically referred to as being borne by the
Advisers) incurred in the operation of the Account and the Fund are borne by
the Fund, Phoenix, or PHL Variable. A more detailed discussion of the
Advisers and the Investment Advisory Agreements is contained in the Statement
of Additional Information.

PORTFOLIO MANAGERS

Balanced Series. Mr. George I. Askew serves as portfolio manager of the
Balanced Series and, as such, is primarily responsible for the day-to-day
management of the Series' investments. Mr. Askew has served as a research
analyst for Phoenix since 1994, and an associate in the investment banking
division of Merrill Lynch & Co. from 1987 to 1992. Mr. Askew attended the
University of California at Los Angeles from 1992 to 1994, where he obtained his
MBA.

Total Return Series. Mr. C. Edwin Riley, Jr. serves as portfolio manager of
the Total Return Series and, as such, is primarily responsible for the
day-to-day management of the Series' investments. Mr. Riley also is the
portfolio manager of the Phoenix Total Return, Inc. From 1988 to 1995, Mr. Riley
served as Senior Vice President and Director of Equity Management for
Nationsbank Investment Management.

Multi-Sector Series. Mr. Curtiss O. Barrows has served as portfolio manager
of the Bond Series since 1986 and, as such, is primarily responsible for the
day-to-day management of the Series' portfolio. Mr. Barrows also is portfolio
manager of the High Yield Series of the Phoenix Series Fund and is a Vice
President of PIC. Mr. Barrows also is portfolio manager, Public Bonds,
Phoenix Home Life Mutual Insurance Company.

Growth Series. Mr. Van Harissis has served as portfolio manager of the
Growth Series since March 1996 and, as such, is primarily responsible for the
day-to-day management of the Series. Mr. Harissis also is portfolio manager
of the Growth Series of the Phoenix Series Fund, which also is advised by PIC.
He was Senior Portfolio Manager from June 1990 to August 1995 at Howe & Rusling,
Inc. and Assistant Vice President, Investment Management Services, Manufacturers
& Traders Bank from July 1986 to June 1990.

International Series. Ms. Jeanne H. Dorey has served as portfolio manager of
the International Series' since February 1993 and, as such, is primarily
responsible for the day-to-day management of the Series' portfolio. Ms. Dorey
also is the portfolio manager of the International Portfolio of the Phoenix
Multi-Portfolio Fund, which also is advised by PIC. Ms. Dorey has served as
a Vice President of PIC since April 1993, and as a Vice President of Phoenix
Worldwide Opportunities Fund and National Securities & Research Corporation
since May 1993. Ms. Dorey also is portfolio manager, International, Phoenix
Home Life Mutual Insurance Company. From 1990 to 1992, Ms. Dorey was an
Investment Analyst and Portfolio Manager with Pioneer Group, Inc.

Money Market Series. Ms. Dorothy J. Skaret has served as the portfolio
manager of the Money Market Series since 1990 and, as such, is primarily
responsible for the day-to-day management of the Series' portfolio. Ms. Skaret
also is the portfolio manager of the Money Market Series of the Phoenix Series
Fund, which also is advised by PIC. Ms. Skaret also is Director, Public
Fixed Income, Phoenix Home Life Mutual Insurance Company, and a Vice President
of National Securities & Research Corporation.

Real Estate Series. Ms. Barbara Rubin, President of PRS and William K.
Morrill, Jr., Managing Director of ABKB share primary responsibility for
managing the assets of the Real Estate Series from its inception. Barbara Rubin
has over 19 years real estate experience and has been associated with Phoenix
for the past 13 years. William Morrill has over 15 years of investment
experience and has been a portfolio manager with ABKB since 1985.

2-21

<PAGE>

Strategic Theme Series. Mr. William J. Newman serves as portfolio manager of
the Strategic Theme Series and, as such, is primarily responsible for the
day-to-day management of the Series' portfolio. Mr. Newman joined Phoenix in
March 1995 as Chief Investment Strategist and Managing Director for Phoenix
Investments. Mr. Newman also is Executive Vice President of PIC. Most recently,
Mr. Newman was Chief Investment Strategist for Kidder Peabody in New York from
May 1993 to December 1994. He was Managing Director at Bankers Trust from March
1991 to May 1993 and Managing Director, McKay Shields, from June 1988 to
November 1990.

Asia Series. Mr. Hugh Young is the portfolio manager of the Asia Series and,
as such, is primarily responsible for the day-to-day management of the Series'
portfolio. Mr. Young has been employed as an investment director for Abtrust
Fund Managers (Singapore) Limited since 1988. From 1985 to 1988, Mr. Young was
the Far East investment director for Sentinel Funds Management Ltd. From 1984 to
1985, he was investment manager with Fidelity International Ltd. From 1981 to
1984, he served as investment analyst-overseas investment manager with MGM
Assurance; and from 1980 to 1981, he was an investment analyst with Beardsley
Bishop Escombe, Stockbrokers.

ADVISORY FEES
As compensation for its services for all Series the Advisers are entitled to
a fee, payable within five days after the end of each month, as follows:

PHOENIX INVESTMENT COUNSEL, INC.

RATE FOR THE RATE FOR THE RATE FOR
FIRST FIRST EXCESS OVER
SERIES $250,000,000 $250,000,000 $500,000,000
- ------ ------------ ------------ ------------
Money Market.... .40% .35% .30%
Multi-Sector.... .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 total advisory fee of 0.75% of the aggregate net assets of the
International and Strategic Theme Series, is greater than that paid by most
mutual funds; however, the Board of Trustees of the Fund has determined that
it is similar to fees charged by other mutual funds whose investment objectives
are similar to those of the International and Strategic Theme Series.

PHOENIX REALTY SECURITIES, INC.

RATE FOR THE RATE FOR THE RATE FOR
FIRST FIRST EXCESS OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate..... .75% .70% .65%

The total advisory fee of 0.75% of the aggregate net assets of the Real
Estate Series is greater than that paid by most mutual funds; however, the Board
of Trustees of the Fund has determined that it is similar to fees charged by
other mutual funds whose investment objectives are similar to that of the Real
Estate Series. Pursuant to a subadvisory agreement with the Fund, PRS delegates
certain investment decisions and research functions to ABKB/LaSalle Securities
Limited Partnership ("ABKB") for which ABKB is paid a fee by PRS. In accordance
with the subadvisory agreement between the Fund and ABKB, ABKB is paid a
monthly fee at the annual rate of 0.45% of the average aggregate daily net asset
values of the Series up to $1 billion; 0.35% of such value between $1 billion
and $2 billion; and 0.30% of such value in excess of $2 billion. The subadvisory
agreement relating to the Real Estate Series provides, among other things, that
ABKB shall maintain certain records for the Series and effectuate the purchase
and sale of securities for the Series. ABKB is not affiliated with PRS, PIC,
Phoenix or PHL Variable. The Real Estate Series pays other operating expenses
up to .25% of its total assets.

PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC

SERIES
- ------
Asia Series..... 1.00%

The total advisory fee of 1.00% of the aggregate net assets of the Asia
Series is greater than that paid by most mutual funds; however, the Board of
Trustees of the Fund has determined that it is similar to fees charged by other
mutual funds whose investment objectives are similar to those of the Asia
Series.

As compensation for its services, PAIA is entitled to a fee, payable
monthly, at an annual rate of 1.00% of the average daily net assets of the
Series. The Investment Advisory Agreement with the Fund provides that PAIA will
reimburse the Fund for the amount, if any, by which the total operating expenses
(including PAIA's compensation, but excluding interest, taxes, brokerage fees
and commissions and extraordinary expenses) for any fiscal year exceed the level
of expenses which the Series is permitted to bear under the most restrictive
expense limitation. For providing research and other domestic advisory services
to the Series, PAIA pays to PIC, a monthly subadvisory fee at an annual rate
equivalent to 0.30% of the average aggregate daily net asset value of the
Series. For implementing certain portfolio transactions and providing research
and other services to the Series, PAIA also pays a monthly subadvisory fee to
Aberdeen Fund Managers Inc. equivalent to 0.30% of the average aggregate daily
net asset value of the Series. For implementing certain portfolio transactions,
providing research and other services with regard to investments in particular
geographic areas, the Aberdeen Fund Managers Inc. shall engage the services of
its affiliates Abtrust Fund Managers Ltd. and Abtrust Fund Managers (Singapore)
Limited for which such entities shall be paid a fee by Aberdeen Fund Managers
Inc.

FINANCIAL AGENT

Under a Financial Agent Agreement, Phoenix acts as financial agent of the
Fund and as such is responsible for certain administrative functions and the
bookkeeping and pricing functions for the Fund. For its services as financial
agent, Phoenix receives a fee based on the average of the aggregate daily net
asset values of the Fund at the annual rate per each $1,000,000 of $600. Phoenix
may receive compensation from the Account, as described in the accompanying
prospectus.

2-22

<PAGE>

EXPENSES
Each Series (except the International, Real Estate, Strategic Theme and Asia
Series) pays a portion or all of its total operating expenses other than the
management fee, up to .15% of its total net assets. The International, Real
Estate, Strategic Theme and Asia Series pay total operating expenses other than
the management fee up to .40%, .25%, .25% and .25%, respectively, of its total
net assets. Expenses above these limits are paid by the Advisers, Phoenix or PHL
Variable.

PORTFOLIO TRANSACTIONS AND BROKERAGE

No Series has any obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to the Statement
of Policy on Brokerage Allocation adopted by the Board of Trustees, the Advisers
(or ABKB) are primarily responsible for the portfolio decisions of each Series
and the placing of its portfolio transactions. In placing orders, it is the
policy of each Series to obtain the most favorable net results, taking into
account various factors, including price, dealer spread or commission, if any,
size of the transaction and difficulty of execution. While the Advisers
generally seek reasonably competitive spreads or commissions, the Series will
not necessarily be paying the lowest spread or commission available. The
Advisers may use broker-dealers that may be affiliated with the Advisers,
Phoenix, Phoenix Duff & Phelps Corporation, PHL Variable or ABKB provided that
the commissions, fees or other remuneration received by such affiliated broker
is reasonable and fair compared to those paid to other brokers in connection
with comparable transactions. The Statement of Additional Information contains
more information on brokerage allocation.

PERFORMANCE HISTORY

From time to time the Fund may include the performance history of any or all
of the Series (along with applicable separate account performance history) in
advertisements, sales literature or reports. Performance information about each
Series is based on that Series' past performance only and is not an indication
of future performance. Performance information may be expressed as yield and
effective yield of the Money Market Series, as yield of the Multi-Sector Series,
and as total return of any Series. Current yield for the Money Market Series
will be based on the income earned by the Series over a given 7-day period (less
a hypothetical charge reflecting deductions for expenses taken during the
period) and then annualized, i.e., the income earned in the period is assumed to
be earned every seven days over a 52-week period and is stated in terms of an
annual percentage return on the investment. Effective yield is calculated
similarly but reflects the compounding effect of earnings on reinvested
dividends.

For the Multi-Sector Series, quotations of yield will be based on all
investment income per share earned during a given 30-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net investment income by the
maximum offering price per share on the last day of the period.

When a Series advertises its total return, it usually will be calculated
for one year, five years, and ten years or since inception if the Series has not
been in existence for at least ten years. Total return is measured by comparing
the value of a hypothetical $1,000 investment in the Series at the beginning of
the relevant period to the value of the investment at the end of the period,
assuming the reinvestment of all distributions at net asset value and the
deduction of the maximum sales charge applicable at the beginning of the
relevant period.

AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDING 12/31/95

COMMENCEMENT LIFE OF
SERIES DATE 1 YEAR 5 YEARS 10 YEARS FUND
- ------ ----- ------ ------- -------- ----
Multi-Sector... 1/1/83 23.54% 12.20% 10.44% 10.89%
Balanced....... 5/1/92 23.28% N/A N/A 10.19%
Total Return... 9/17/84 18.22% 13.13% 12.07% 12.91%
Growth......... 1/1/83 30.85% 20.29% 16.89% 18.87%
International.. 5/1/90 9.59% 9.63% N/A 6.84%
Real Estate.... 5/1/95 N/A N/A N/A 17.79%
Strategic Theme 1/29/96 N/A N/A N/A N/A
Asia Series.... 9/3/96 N/A N/A N/A N/A

ANNUAL TOTAL RETURNS

YEAR MULTI-SECTOR BALANCED TOTAL RETURN GROWTH
- ---- ------------ -------- ------------- ------
1985........... 20.43% N/A 27.16% 34.70%
1986........... 19.45% N/A 15.61% 20.15%
1987........... 1.12% N/A 12.58% 7.05%
1988........... 10.36% N/A 2.33% 3.83%
1989........... 8.30% N/A 19.88% 36.06%
1990........... 5.14% N/A 5.62% 3.98%
1991........... 19.41% N/A 29.44% 43.83%
1992........... 10.03% 9.72% 10.67% 10.29%
1993........... 15.90% 8.57% 11.02% 19.69%
1994........... (5.47%) (2.80%) (1.45%) 1.48%
1995........... 23.54% 23.28% 18.22% 30.85%

YEAR INTERNATIONAL REAL ESTATE STRATEGIC THEME ASIA SERIES
- ---- ------------- ----------- --------------- -----------

1985........... N/A N/A N/A N/A
1986........... N/A N/A N/A N/A
1987........... N/A N/A N/A N/A
1988........... N/A N/A N/A N/A
1989........... N/A N/A N/A N/A
1990........... (8.10%) N/A N/A N/A
1991........... 19.78% N/A N/A N/A
1992........... (12.89%) N/A N/A N/A
1993........... 38.44% N/A N/A N/A
1994........... 0.03% N/A N/A N/A
1995........... 9.59% 17.79%* N/A N/A

*Since inception 5/1/95 to 12/31/95

Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Principal and investment return
(except Money Market Series) will vary and you may have a gain or loss when you
withdraw your money. The Multi-Sector Series includes high yielding,
lower-rated securities which are subject to greater price volatility and may
involve greater risk of default. The market for these securities may be less
liquid. While Money Market Series seeks to maintain a stable $1.00 share price,
there is no assurance that it will be able to do so.

Yield calculations of the Money Market Series used for illustration purposes
are based on the consideration of a hypothetical investment account having a
balance of exactly one Share at the beginning of a seven-day period, which
period will end on the date of the most recent financial statements. The yield
for the Series during this seven-day period will be the change in the value of
the hypothetical investment account's original Share. The following is an
example of this yield calculation for the Money Market Series based on a
seven-day period ending December 31, 1995.

2-23

<PAGE>

Assumptions:
Value of hypothetical pre-existing account with
exactly one share at the beginning of the period:..... 10.000000
Value of the same account (excluding capital
changes) at the end of the seven-day period:.......... 10.010779
Calculation:
Ending account value ............................... 10.010779
Less beginning account value........................ 10.000000
Net change in account value ........................ 0.010779
Base period return:
(adjusted change/beginning account value)........... 0.001078
Current yield = return x (365/7) =...................... 5.62%
Effective yield = [(1 + return) 365/7] -1 =............. 5.78%

The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time.

The Advisers have voluntarily agreed to reimburse certain expenses as
described under "Expenses" above. If the Advisers had not reimbursed certain
expenses during the periods shown, the returns for these funds would have been
lower. PERFORMANCE NUMBERS ARE NET OF ALL FUND OPERATING EXPENSES, BUT DO NOT
INCLUDE ANY INSURANCE CHARGES IMPOSED BY YOUR INSURANCE COMPANY'S SEPARATE
ACCOUNT. IF PERFORMANCE INFORMATION INCLUDED THE EFFECT OF THESE ADDITIONAL
CHARGES, IT WOULD BE LOWER.

The Fund's Annual Report, available upon request and without charge,
contains a discussion of the performance of each Series and a comparison of that
performance to a securities market index.

SHARES OF BENEFICIAL INTEREST
- --------------------------------------------------------------------------------

The Fund currently has nine classes of shares of beneficial interest,
one for each Series. Shares (including fractional shares) of each Series have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Series. All voting rights of the Accounts as
shareholders are passed through to the Contract Owners and Policyowners.
Shareholders of all Series currently vote on the election of Trustees and other
matters. On matters affecting an individual Series (such as approval of an
Investment Advisory Agreement or a change in fundamental investment policies), a
separate vote of that Series is required.

Fund shares attributable to any Phoenix or PHL Variable assets and Fund
shares for which no timely instructions from Contract Owners or Policyowners
are received will be voted by Phoenix and PHL Variable in the same proportion
as those shares in that Series for which instructions are received.

Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights.

The assets received by the Fund for the issue or sale of shares of each
Series, and all income, earnings, profits and proceeds thereof, subject only to
the rights of creditors, are allocated to such Series, and constitute the
underlying assets of such Series. The underlying assets of each Series are
required to be segregated on the books of account, and are to be charged with
the expenses of the Series and with a share of the general expenses of the Fund.
Any general expenses of the Fund not readily identifiable as belonging to a
particular Series shall be allocated by or under the direction of the Trustees
in such manner as the Trustees determine to be fair and equitable.

Unlike the stockholders of a corporation, there is a possibility that the
Accounts as shareholders of a business trust such as the Fund may be liable for
debts or claims against the Fund. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Fund and that every written agreement, undertaking or
obligation made or issued by the Fund shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Fund's property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of the Accounts, as shareholders,
incurring loss because of shareholder liability is limited to circumstances in
which the Fund itself would be unable to meet its obligations. Phoenix and PHL
Variable, as the sole shareholders, have a fiduciary duty to bear this risk and
Contract Owners and Policyowners should be fully and completely insulated from
risk.

PURCHASE OF SHARES
- --------------------------------------------------------------------------------

The Fund offers its shares, without sales charge, for purchase by the
Accounts as an investment medium for the Variable Accumulation Annuity Contracts
and Variable Universal Life Insurance Policies issued by Phoenix and PHL
Variable. It is contemplated that in the future other separate accounts of
Phoenix, PHL Variable or other insurance companies may purchase shares of the
Fund. Shares of the Fund will not be sold to the public. The Fund continuously
offers shares in each Series to the Accounts at prices equal to the respective
net asset values of those Series. Net asset value is determined in the manner
set forth below under "NET ASSET VALUE."

It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Fund simultaneously. Although Phoenix, PHL Variable or the Fund
currently do not foresee any such disadvantages either to variable life
insurance Policyowners or to variable annuity Contract Owners, the Fund's Board
of Trustees intends to monitor events in order to identify any material
conflicts between such Policyowners and Contract Owners and to determine what
action, if any, should be taken in response thereto. Material conflicts could
result from, for example, (1) changes in state insurance laws, (2) changes in
Federal income tax laws, (3) changes in the investment management of any
portfolio of the Fund, or (4) differences in voting instructions between those
given by Policyowners and those given by Contract Owners.

NET ASSET VALUE
- --------------------------------------------------------------------------------

The net asset value of the shares of each Series of the Fund is determined
once daily as of the close of regular trading of the New York Stock Exchange, or
on each day during which there is a sufficient degree of trading in any of the
securities held in a Series of the Fund that the current net asset value of the
shares of the Series might be materially affected. The Board of Directors of the
Exchange reserves the right to change this schedule as conditions warrant.

2-24

<PAGE>

Net asset value of a Series' shares is computed by dividing the value of the
net assets of the Series by the total number of Series shares outstanding.
Securities that are traded on the stock exchange are valued at the last sale
price as of the close of business on the day the securities are being valued,
or, lacking any sales, at the mean between closing bid and asked price.
Securities traded in the over-the-counter market are valued at the mean between
the bid and asked prices or yield equivalent as obtained from one or more
dealers that make markets in the securities. Series' securities that are traded
both in the over-the-counter market and on an exchange are valued according to
the broadest and most representative market. Securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Trustees, and
may include valuations furnished by a pricing service that may be retained by
the Fund with the Trustees' approval.

Money market securities held by the Fund are valued on an amortized cost
basis, absent extraordinary or unusual market conditions, which involves valuing
a portfolio instrument at its cost initially and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods when value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the security. The Statement of Additional Information
contains a more detailed discussion on amortized cost.

Securities which are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges where primarily traded. (See Statement of Additional
Information.) Over-the-Counter traded fixed income options are valued based upon
current prices provided by market makers. Financial futures are valued at the
settlement price established each day by the board of trade or exchange on which
they are traded.

Because of the need to obtain prices as of the close of trading on various
exchanges in different time zones throughout the world, the calculation of net
asset value does not take place for the International and Asia Series at the
same time as the determination of prices of the majority of the portfolio
securities of the International and Asia Series.

For purposes of determining the net asset value of the International and
Asia Series, all assets and liabilities initially expressed in foreign currency
values will be converted into United States dollar values at the mean between
the bid and offered quotations of such currencies against United States dollars
as last quoted by any recognized dealer. If an event were to occur after the
value of an investment was so established but before the net asset value per
share was determined, which was likely to materially change the net asset value,
then the instrument would be valued using fair value considerations by the
Trustees or their delegates. If at any time a Series has other investments, such
investments are valued at the fair value thereof as determined in good faith by
the Trustees although the actual calculations may be made by persons acting
pursuant to the direction of the Trustees.

REDEMPTION OF SHARES
- --------------------------------------------------------------------------------

The Fund will redeem all full and fractional shares of the Fund presented
for redemption. The Fund may, at the discretion of the Trustees and to the
extent consistent with state and Federal law, make payment for shares of a
particular Series redeemed in whole or in part in securities or other assets of
such Series taken at current values. The redemption price is the net asset value
per share next determined after the initial receipt of proper notice of
redemption.

The right to redeem shares or to receive payment with respect to any
redemption may only be suspended for more than seven days for any period during
which trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission or such Exchange is closed (other than
customary weekend and holiday closings), for any period during which an
emergency exists as defined by the Securities and Exchange Commission as a
result of which disposal of portfolio securities or determination of the net
asset value of each Series is not reasonably practicable, and for such other
periods as the Securities and Exchange Commission may by order permit for the
protection of shareholders of each Series.

DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------

All dividends and distributions with respect to the shares of any Series
will be payable in shares of such Series at net asset value or, at the option of
the Account as shareholder, in cash.

The net investment income of the Money Market Series will be declared as
dividends daily. Dividends will be distributed and reinvested in additional
shares on the last business day of every month. The net income of the Money
Market Series for Saturdays, Sundays and other days on which the New York Stock
Exchange is closed will be declared as dividends on the next business day.

The Multi-Sector, Growth, Total Return, Balanced, International and
Strategic Theme Series will distribute substantially all net investment income
and net realized capital gains, if any, to shareholders at least annually,
although it is anticipated that these distributions will be made on a quarterly
basis. The Real Estate Series will distribute its net investment income to its
shareholders quarterly and net realized capital gains, if any, to its
shareholders annually. The Asia Series will distribute its net investment income
to its shareholders on a semi-annual basis and net realized capital gains, if
any, to its shareholders on an annual basis.

TAXES
- --------------------------------------------------------------------------------

The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code ("Code") and so qualified for its last
taxable year. In addition, the Fund intends to comply with the investment
diversification requirements for variable contracts contained in the Code.
Moreover, the Fund will distribute sufficient income to avoid imposition of any
Federal excise tax. Dividends derived from interest and distributions of any
realized capital gains are taxable, under Subchapter M, to the Fund's
shareholders, which in this case are the Accounts. The International and Asia
Series may incur liability for foreign income and withholding taxes on
investment income. The International and Asia Series intends

2-25

<PAGE>

to qualify for, and make an election permitted under, the Code to enable the
shareholder Accounts (and therefore Phoenix) to claim a credit or deduction on
Phoenix's income tax return for the Accounts' pro rata share of the income and
withholding taxes paid by the International and Asia Series to foreign
countries. Phoenix also will treat the foreign income taxes paid by the Series
as income. Contract Owners and Policyowners will not be required to treat the
foreign income taxes paid by the Series as income or be able to claim a credit
or deduction for these taxes on their income tax returns. For a discussion of
the taxation of the Accounts, see "Federal Tax Considerations" included in the
Accounts' prospectuses.

Although the Real Estate Series may be a non-diversified portfolio, the Fund
intends to comply with the diversification and other requirements of the Code
applicable to "regulated investment companies" so that it will not be subject to
U.S. federal income tax on income and capital gain distributions to
shareholders. Accordingly, the Real Estate Series will insure that no more than
25% of its total assets would be invested in the securities of a single issuer
and that at least 50% of its total assets is represented by cash and cash
items and other securities limited in respect of any one issuer to an amount no
greater than 5% of the total value of the assets of the Series.

In addition, if the Real Estate Series has rental income or income from the
disposition of real property acquired as a result of a default on securities the
Real Estate Series may own, the receipt of such income may adversely affect its
ability to retain its tax status as a regulated investment company.

CUSTODIAN, TRANSFER AGENT, AND DIVIDEND PAYING AGENT
- --------------------------------------------------------------------------------

The Custodian of the assets of all Series of the Fund, except the
International, Real Estate and Asia Series, is The Chase Manhattan Bank, N.A., 1
Chase Manhattan Plaza, Floor 3B, New York, NY 10081. The Custodian of the assets
of the International and Asia Series is Brown Brothers Harriman & Co., 40 Water
Street, Boston, Massachusetts 02109, Attention: Manager, Securities Division.
The Custodian of the assets of the Real Estate Series is State Street Bank &
Trust, 1 Heritage Drive, P2N, North Quincy, Massachusetts 02171. The Fund has
authorized the Custodian to appoint one or more subcustodians of the assets of
the Fund held outside the United States. The securities and other assets of
each Series will be held by the Custodians or any subcustodian separate from the
securities and assets of each other Series.

The Transfer Agent and the Dividend Paying Agent for the Fund's shares is
Phoenix Equity Planning Corporation, 100 Bright Meadow Boulevard, PO Box 2200,
Enfield, Connecticut 06083-2200.

OTHER INFORMATION
- --------------------------------------------------------------------------------

Price Waterhouse LLP, 160 Federal Street, Boston, Massachusetts 02110,
serves as independent accountants for the Fund and audits its financial
statements annually.

Inquiries and requests for the Statement of Additional Information
and the Annual Report to Shareholders should be directed in writing
to Variable Products Operations, Phoenix Home Life Mutual Insurance
Company, 101 Munson Street, PO Box 942, Greenfield, Massachusetts 01302-0942, or
by telephoning Variable Products Operations at (800) 447-4312.

APPENDIX
- --------------------------------------------------------------------------------

A-1 AND P-1 COMMERCIAL PAPER RATINGS
The Money Market Series will only invest in commercial paper which at the
date of investment is rated A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Services, Inc., or, if not rated, is issued or guaranteed by
companies which at the date of investment have an outstanding debt issue rated
AA or higher by Standard & Poor's or Aa or higher by Moody's.

Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.

The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's
in assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.

MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
AAA--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

AA--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

2-26

<PAGE>

BAA--Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

BA--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

CAA--Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

CA--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C--Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.

AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

A--Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.

BB-B-CCC-CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

D--Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

2-27

<PAGE>

THE PHOENIX EDGE SERIES FUND
101 Munson Street
P.O. Box 942
Greenfield, Massachusetts 01302-0942
Telephone Number: (800) 447-4312
c/o Variable Products Operations

Phoenix

STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 3, 1996

This Statement of Additional Information is not a prospectus. Much of the
information contained in this Statement of Additional Information expands upon
subjects discussed in the Prospectus. Accordingly, this Statement should be read
together with the Fund's current Prospectus, dated September 3, 1996, which
may be obtained by calling Variable Products Operations of Phoenix, at (800)
447-4312, or by writing to Variable Products Operations at 101 Munson Street,
P.O. Box 942, Greenfield, Massachusetts 01302-0942.

------------------
TABLE OF CONTENTS*

PAGE
----

The Phoenix Edge Series Fund (2-1)..................................... 2

Investment Policies (2-10)............................................. 2

Investment Restrictions (2-20)......................................... 11

Portfolio Turnover (2-20).............................................. 12

Management of the Fund (2-20).......................................... 12

Investment Advisers (2-20)............................................. 19

Brokerage Allocation (2-23)............................................ 20

Determination of Net Asset Value (2-24)................................ 21

Investing In the Fund (2-23)........................................... 22

Redemption of Shares (2-25)............................................ 22

Taxes (2-25)........................................................... 22

Custodian (2-26)....................................................... 22

Independent Accountants................................................ 23

Financial Statements................................................... 23

* Numbers in parentheses are cross-references to related sections of the
Prospectus.

<PAGE>

THE PHOENIX EDGE SERIES FUND
- --------------------------------------------------------------------------------

The Phoenix Edge Series Fund (formerly "The Big Edge Series Fund") (the
"Fund") is an open-end investment company as defined in the Investment Company
Act of 1940. It was formed on February 18, 1986 as a Massachusetts Business
Trust and commenced operations on December 5, 1986. The Phoenix Home Life
Variable Accumulation Account is a separate account of Phoenix Home Life Mutual
Insurance Company ("Phoenix ") created on June 21, 1982. The Phoenix Home Life
Variable Universal Life Account is a separate account of Phoenix created on
June 17, 1985. The PHL Variable Accumulation Account is a separate account of
PHL Variable Insurance Company ("PHL Variable") formed on December 7, 1994. The
executive offices of the Accounts, Phoenix and PHL Variable are located at One
American Row, Hartford, Connecticut. The Accounts own the majority of the shares
of the Fund.

INVESTMENT POLICIES
- --------------------------------------------------------------------------------

The investment objectives and policies of each Series are described in the
"Investment Objectives and Policies" section of the Prospectus. The following
specific policies supplement the information contained in that section of the
Prospectus.

MONEY MARKET INSTRUMENTS

Certain money market instruments used extensively by the Money Market and
Total Return Series are described below. They also may be used by the
International, Real Estate, Strategic Theme and Aberdeen New Asia ("Asia")
Series and may be used by the other Series to a very limited extent to invest
otherwise idle cash, or on a temporary basis for defensive purposes.

Repurchase Agreements. Repurchase Agreements are agreements by which a
Series purchases a security and obtains a simultaneous commitment from the
seller (a member bank of the Federal Reserve System or, to the extent permitted
by the Investment Company Act of 1940, a recognized securities dealer) that the
seller will repurchase the security at an agreed upon price and date. The resale
price is in excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security. In fact, such a
transaction is a loan of money to the seller of the securities.

A repurchase transaction is usually accomplished either by crediting the
amount of securities purchased to the account of the custodian of the Fund
maintained in a central depository or book-entry system or by physical delivery
of the securities to the Fund's custodian in return for delivery of the
purchase price to the seller. Repurchase transactions are intended to be
short-term transactions with the seller repurchasing the securities, usually
within seven days.

Even though repurchase transactions usually do not impose market risks on
the purchasing Series, if the seller of the repurchase agreement defaults and
does not repurchase the underlying securities, the Series might incur a loss if
the value of the underlying securities declines, and disposition costs may be
incurred in connection with liquidating the underlying securities. In addition,
if bankruptcy proceedings are commenced regarding the seller, realization upon
the underlying securities may be delayed or limited, and a loss may be incurred
if the underlying securities decline in value.

U.S. Government Obligations. Securities issued or guaranteed as to principal
and interest by the United States Government include a variety of Treasury
securities, which differ only in their interest rates, maturities, and times of
issuance. Treasury bills have a maturity of one year or less. Treasury notes
have maturities of one to seven years, and Treasury bonds generally have
maturity of greater than five years.

Agencies of the United States Government which issue or guarantee
obligations include, among others, Export-Import Banks of the United States,
Farmers Home Administration, Federal Housing Administration, Government National
Mortgage Association, Maritime Administration, Small Business Administration and
The Tennessee Valley Authority. Obligations of instrumentalities of the United
States Government include securities issued or guaranteed by, among others, the
Federal National Mortgage Association, Federal Home Loan Banks, Federal Home
Loan Mortgage Corporation, Federal Intermediate Credit Banks, Banks for
Cooperatives, and the U.S. Postal Service. Securities issued or guaranteed by
the Export-Import Bank of the United States, Farmer's Home Administration,
Federal Housing Administration, Government National Mortgage Association,
Maritime Administration and Small Business Administration are supported by the
full faith and credit of the U.S. Treasury. Securities issued or guaranteed by
Federal National Mortgage Association and Federal Home Loan Banks are supported
by the right of the issuer to borrow from the Treasury. Securities issued or
guaranteed by the other agencies or instrumentalities listed above are supported
only by the credit of the issuing agency.

Certificates of Deposit. Certificates of deposit are generally short-term,
interest-bearing negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.

Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.

Bankers' Acceptances. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.

Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.

Corporate Debt Securities. Corporate debt securities with a remaining
maturity of less than one year tend to become extremely liquid and are traded as
money market securities.

All of the Money Market Series' investments will mature in 397 days or less
and will have a weighted average age of not more than 90 days. By limiting the
maturity of its investments, the Series seeks to lessen the changes in the value
of its assets caused by market factors. This Series, consistent with its
investment objective, will attempt to

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maximize yield through portfolio trading. This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market. It is
expected that the Series' portfolio transactions generally will be with issuers
or dealers in money market instruments acting as principal. Accordingly, this
Series will normally not pay any brokerage commissions.

The value of the securities in the Money Market Series' portfolio can be
expected to vary inversely to changes in prevailing interest rates, with the
amount of such variation depending primarily on the period of time remaining to
maturity of the security. Long-term obligations may fluctuate more in value than
short-term obligations. If interest rates increase after a security is
purchased, the security, if sold, could be sold at a loss. On the other hand, if
interest rates decline after a purchase, the security, if sold, could be sold at
a profit. If, however, the security is held to maturity, no gain or loss will be
realized as a result of interest rate fluctuations, although the day-to-day
valuation of the portfolio could fluctuate. Substantial withdrawals of the
amounts held in the Money Market Series could require it to sell portfolio
securities at a time when a sale might not be favorable. The value of a
portfolio security also may be affected by other factors, including factors
bearing on the credit-worthiness of its issuer. A more detailed discussion of
amortized cost is contained under "Determination of Net Asset Value."

TOTAL RETURN SERIES: MARKET SEGMENT INVESTMENTS AND TRADING

Market Segment Investments. The Total Return Series seeks to achieve its
investment objective by investing in the three market segments of stocks, bonds,
and money market instruments described below.

(1) STOCK--common stocks and other equity-type securities such as
preferred stocks, securities convertible into common stock and
warrants;

(2) BONDS--bonds and other debt securities with maturities generally
exceeding one year, including:

(a) publicly offered straight debt securities having a rating within
the four highest grades as determined by Moody's
Investors Service, Inc. (Aaa, Aa, A or Baa) or Standard &
Poor's Corporation (AAA, AA, A or BBB) or, if unrated,
those publicly offered straight debt securities which are
judged by the Account to be of equivalent quality to
securities so rated;

(b) obligations issued, sponsored, assumed or guaranteed as to
principal and interest by the U.S. Government or its
agencies or instrumentalities;

(c) obligations (payable in U.S. dollars) issued or guaranteed as
to principal and interest by the Government of Canada or of
a Province of Canada or any instrumentality or political
subdivision thereof, provided such obligations have a
rating within the highest grades as determined by Moody's
(Aaa, Aa or A) or Standard & Poor's (AAA, AA or A) and do
not exceed 25% of the Total Return Series' total assets;

(d) publicly offered straight debt securities issued or guaranteed
by a national or state bank or bank holding company (as
defined in the Federal Bank Holding Company Act, as amended)
having a rating within the three highest grades as determined
by Moody's (Aaa, Aa or A) or Standard & Poor's (AAA, AA or A), and
certificates of deposit of such banks; and

(e) high yield, high risk fixed income securities (commonly
referred to as "junk bonds") having a rating below Baa by
Moody's Investors Service, Inc. or BBB by Standard &
Poor's Corporation or unrated securities of comparable
quality provided such securities do not exceed 5% of the
Total Return Series' total assets.

(3) MONEY MARKET--money market instruments and other debt securities
with maturities generally not exceeding one year, including:

(a) those money market instruments described in this Statement
of Additional Information; and

(b) reverse repurchase agreements with respect to any of the
foregoing obligations. Reverse repurchase agreements
are agreements in which the Series, as the seller of the
securities, agrees to repurchase them at an agreed time
and price. This transaction constitutes a borrowing of
money by the seller of the securities. The Series will
maintain sufficient funds in a segregated account with its
Custodian to repurchase securities pursuant to any
outstanding reverse repurchase agreement. The Series is
required to maintain at all times asset coverage of at least
300% for all obligations under reverse repurchase
agreements.

Trading. In order to achieve the Series' investment objective, the timing
and amounts of purchases and sales of particular securities and particular types
of securities (i.e., common stock, debt, money market instruments) will be of
significance. As a result, the Total Return Series intends to use trading as a
means of managing the portfolio of the Series in seeking to achieve its
investment objective. Trading is used primarily in anticipation of, or in
response to, market developments or to take advantage of yield disparities. The
Investment Adviser will engage in trading when it believes that the trade, net
of transaction costs, will improve interest income or capital appreciation
potential, or will lessen capital loss potential. Whether these goals will be
achieved through trading depends on the Investment Adviser's ability to evaluate
particular securities and anticipate relevant market factors, including interest
rate trends and variations. Such trading places a premium on the Investment
Adviser's ability to obtain relevant information, evaluate it properly and take
advantage of its evaluations by completing transactions on a favorable basis. If
the Investment Adviser's evaluations and expectations prove to be incorrect, the
Series' income or capital appreciation may be reduced and its capital losses may
be increased. Portfolio trading involves transaction costs, but, as explained
above, will be engaged in when the Investment Adviser believes that the result
of the trading, net of transaction costs, will benefit the Series. Purchases and
sales of securities will be made, whenever necessary in the Investment Adviser's
view, to achieve the total return investment objective of the Series without
regard to the resulting brokerage costs.

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In addition to the traditional investment techniques for purchasing and
selling, and engaging in trading, the Total Return Series may enter into
financial futures and options contracts.

FINANCIAL FUTURES AND RELATED OPTIONS
Total Return Series. The Total Return Series may enter into financial
futures contracts for the purchase or sale of debt obligations which are traded
on exchanges that are licensed and regulated by Commodity Futures Trading
Commission.

A futures contract on a debt obligation is a binding contractual commitment
which, if held to maturity, will result in an obligation to make or accept
delivery, during a particular month, of obligations having a standard face value
and rate of return. By entering into a futures contract for the purchase of a
debt obligation, the Series will legally obligate itself to accept delivery of
the underlying security and pay the agreed price. Futures contracts are valued
at the most recent settlement price, unless such price does not reflect the fair
value of the contract, in which case such positions will be valued by or under
the direction of the Board of Trustees of the Fund.

Positions taken in the futures markets are not normally held to maturity,
but are instead liquidated through offsetting transactions which may result in a
profit or loss. While futures positions taken by the Series usually would be
liquidated in this manner, it may instead make or take delivery of the
underlying securities whenever it appears economically advantageous for it to do
so.

The purpose of hedging in debt obligations is to establish more certainty
than otherwise would be possible in the effective rate of return on portfolio
securities. The Series might, for example, take a "short" position in the
futures markets by entering into contracts for the future delivery of securities
held by it in order to hedge against an anticipated rise in interest rates that
would adversely affect the value of such securities. When hedging of this type
is successful, any depreciation in the value of securities will be substantially
offset by appreciation in the value of the futures position. On the other hand,
the Series might take a "long" position by entering into contracts for the
future purchase of securities. This could be done when the Series anticipated
the future purchase of particular debt securities but expects the rate of return
then available in the securities market to be less favorable than rates that are
currently available in the futures markets.

The Total Return Series will incur brokerage fees in connection with its
financial futures transactions, and will be required to deposit and maintain
funds with its custodian in its own name as margin to guarantee performance of
its future obligations.

While financial futures would be traded to reduce certain risks, futures
trading itself entails certain other risks. One risk arises because of the
imperfect correlation between movements in the price of the futures contracts
and movements in the price of the debt securities which are the subject of such
contracts. In addition, the market price of futures contracts may be affected by
certain factors, such as the closing out of futures contracts by investors
through offsetting transactions, margin, deposit and maintenance requirements,
and the participation of speculators in the futures market. Another risk is that
there may not be a liquid secondary market on an exchange or board of trade for
a given futures contract or at a given time, and in such event it may not be
possible for the Series to close a futures position. Finally, successful use of
futures contracts by the Series is subject to the Investment Adviser's ability
to predict correctly movements in the direction of interest rates and other
factors affecting the market for debt securities. Thus, while the Series may
benefit from the use of such contracts, the operation of these risk factors may
result in a poorer overall performance for the Series than if it had not entered
into any futures contract.

The Total Return Series is required to maintain at all times an asset
coverage of at least 300% for all of its borrowings, which include obligations
under any financial futures contract on a debt obligation or reverse repurchase
agreement. In addition, immediately after entering into a futures contract for
the receipt or delivery of a security, the value of the securities called for by
all of the Series' futures contracts (both for receipts and delivery) will not
exceed 10% of its total assets. A futures contract for the receipt of a debt
obligation will be offset by cash, cash equivalents or liquid high quality debt
obligations held in a segregated account with the custodian bank for the Series
in an amount sufficient to cover the cost of purchasing the obligation.

International and Asia Series. The International and Asia Series may enter
into financial futures contracts and related options as a hedge against
anticipated changes in the market value of its portfolio securities or
securities which it intends to purchase or in the exchange rate of foreign
currencies. Hedging is the initiation of an offsetting position in the futures
market which is intended to minimize the risk associated with a position's
underlying securities in the cash market.

Financial futures contracts consist of interest rate futures contracts,
foreign currency futures contracts and securities index futures contracts. An
interest rate futures contract obligates the seller of the contract to deliver,
and the purchaser to take delivery of, the interest rate securities called for
in the contract at a specified future time and at a specified price. A foreign
currency futures contract obligates the seller of the contract to deliver, and
the purchaser to take delivery of, the foreign currency called for in the
contract at a specified future time and at a specified price. A securities index
assigns relative values to the securities included in the index, and the index
fluctuates with changes in the market values of the securities so included. A
securities index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the index value at the close of the
last trading day of the contract and the price at which the futures contract is
originally struck. An option on a financial futures contract gives the purchaser
the right to assume a position in the contract (a long position if the option is
a call and a short position if the option is a put) at a specified exercise
price at any time during the period of the option.

The Series may purchase and sell financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase or exchange
board-traded put and call options on financial futures contracts.

The Series will engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In addition,
it will not purchase or sell any financial futures contract or related option
if, immediately thereafter, the sum of the cash or U.S. Treasury bills committed
with respect to its existing futures and related options positions and the
premiums paid for

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related options would exceed 5% of the market value of its total assets. At
the time of the purchase of a futures contract or a call option on a futures
contract, an amount of cash, U.S. Government securities or other appropriate
liquid high-grade debt obligations equal to the market value of the futures
contract, minus the initial margin deposit with respect thereto, will be
deposited in a segregated account with the Fund's custodian bank to
collateralize fully the position and thereby ensure that it is not leveraged.
The extent to which the Series may enter into financial futures contracts and
related options also may be limited by requirements of the Internal Revenue Code
of 1986 for qualification as a regulated investment company.

Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser or
Subadviser could be incorrect in its expectations as to the direction or extent
of various interest rate movements or foreign currency exchange rates, in which
case the Series' return might have been greater had hedging not taken place.
There also is the risk that a liquid secondary market may not exist. The risk
in purchasing an option on a financial futures contract is that the Series will
lose the premium it paid. Also, there may be circumstances when the purchase of
an option on a financial futures contract would result in a loss to the Series
while the purchase or sale of the contract would not have resulted in a loss.

Strategic Theme Series. The Strategic Theme Series may use financial futures
contracts and related options to hedge against changes in the market value of
its portfolio securities which it intends to purchase. Hedging is accomplished
when an investor takes a position in the futures market opposite to his cash
market position. There are two types of hedges--long (or buying) and short (or
selling) hedges. Historically, prices in the futures market have tended to move
in concert with cash market prices, and prices in the futures market have
maintained a fairly predictable relationship to prices in the cash market. Thus,
a decline in the market value of securities in a Series' portfolio may be
protected against to a considerable extent by gains realized on futures
contracts sales. Similarly, it is possible to protect against an increase in the
market price of securities which a Series may wish to purchase in the future by
purchasing futures contracts.

The Strategic Theme Series may purchase or sell any financial futures
contracts which are traded on a recognized exchange or board of trade. Financial
futures contracts consist of interest rate futures contracts and securities
index futures contracts. A public market presently exists in interest rate
futures contracts covering long-term U.S. Treasury bonds, U.S. Treasury notes,
three-month U.S. Treasury bills and GNMA certificates. Securities index futures
contracts are currently traded with respect to the Standard & Poor's 500
Composite Stock Price Index. A clearing corporation associated with the exchange
or board of trade on which a financial futures contract trades assumes
responsibility for the completion of transactions and also guarantees that open
futures contracts will be performed.

In contrast to the situation when such Series purchases or sells a security,
no security is delivered or received by the Series upon the purchase or sale of
a financial futures contract. Initially, this Series will be required to deposit
in a segregated account with its custodian bank an amount of cash, U.S. Treasury
bills or liquid high grade debt obligations. This amount is known as initial
margin and is in the nature of a performance bond or good faith deposit on the
contract. The current initial deposit required per contract is approximately 5%
of the contract amount. Brokers may establish deposit requirements higher than
this minimum. Subsequent payments, called variation margin, will be made to and
from the account on a daily basis as the price of the futures contract
fluctuates. This process is known as marking to market.

The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts. Upon
exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract. For more information regarding options, see below.

Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.

The Strategic Theme Series will pay commissions on financial futures
contracts and related options transactions. These commissions may be higher than
those which would apply to purchases and sales of securities directly.

OPTIONS
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MONEY MARKET, GROWTH, BALANCED, TOTAL RETURN, STRATEGIC THEME AND ASIA SERIES:
Writing Covered Call Options. The Money Market, Growth, Balanced, Total
Return, Strategic Theme and Asia Series may write (sell) covered call options
on securities owned by them, including securities into which convertible
securities are convertible, provided that such call options are listed on a
national securities exchange.

A call option gives the holder the right to buy a security at a specified
price (the exercise price) for a stated period of time. Prior to the expiration
of the option, the seller of the option has an obligation to sell the underlying
security to the holder of the option at the original price specified regardless
of the market price of the security at the time the option is exercised. The
seller of the call option receives a cash payment (premium) at the time of sale,
which premium is retained by the seller whether or not the option is exercised.
The premium represents consideration to the seller for undertaking the

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obligations under the option contract and thereby foregoing the opportunity to
profit from an increase in the market price of the underlying security above the
exercise price (except insofar as the premium represents such a profit).

A call option may be purchased to terminate a call option previously
written. The premium paid in connection with the purchase of a call option may
be more than, equal to or less than the premium received upon writing the call
option which is being terminated.

When a Series writes a covered call option, an amount equal to the premium
received by it is included in assets of the Series offset by an equivalent
liability. The amount of the liability is subsequently marked to market to
reflect the current market value of the option written. Market value is the last
sale price of the options on the exchange on which it is traded, or in absence
of a sale, the mean between last bid and offer prices. If an option which the
Series has written either expires or enters into a closing purchase
transaction, the Series realizes a gain (or loss if the cost of a closing
purchase transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished.

In order to maintain its qualification as a regulated investment company
under Subchapter M of the Internal Revenue Code, the Fund intends to limit
gains from the sale of securities held or deemed held for less than three months
to less than 30% of annual gross income. Accordingly, the Fund may be
restricted in the selling of securities which have been held less than three
months, in the writing of options on securities into which convertible
securities are convertible, in the writing of options on securities which have
been held for six months or less, in the writing of options which expire in less
than three months and in purchasing options to terminate options which it wrote
within the preceding three months. In this regard, the Fund can minimize the
possibility of a suspended holding period for purposes of the 30 percent rule to
the extent the Fund limits its covered call writing to options with more than
30 days to expiration that are not "deep in the money" and that satisfy certain
other requirements such that they will constitute "qualified covered call
options" as defined in Section 1092(c)(4)(B) of the Code, as recently enacted.

An option is generally considered to be "in the money" if the striking price
under the option is less than the currently prevailing price of the stock
covered by the option so that there is a built-in discount or intrinsic value to
the option. Section 1092(c)(4) of the Internal Revenue Code sets forth complex
rules defining options which are "deep in the money." These rules vary in their
application depending upon the prevailing stock price and the stock price under
option contracts available in the market, but are designed to provide objective
rules to classify as "deep in the money" options those options whose primary
value is attributable to their built-in discount or intrinsic value.

Premium income earned with respect to a qualified covered call option
contract which lapses or experiences gain or loss from such an option contract
which is closed out (other than by exercise) generally will be short-term
capital gain or loss. Further, gain or loss with respect to the exercise of such
an option contract generally will be short-term or long-term depending upon the
actual or deemed holding period of the underlying security. However, any loss
realized from writing a "qualified covered call option" which has a strike price
that is less than the applicable security price as defined in Section
1092(c)(4)(G) of the Code will be treated as a long-term capital loss, if gain
from the sale of the underlying security at the time the loss is realized would
be long-term capital gain. Also, with respect to such options, the holding
period of the underlying security will not include any period during which the
Fund has a written option outstanding.

Buying Call and Put Options. The Total Return, Balanced and Strategic Theme
Series may buy national exchange-traded call and put options on equity and debt
securities and on various stock market indexes. The Money Market, Growth and
Multi-Sector Series may purchase a call option only to terminate a call option
previously written. (See "Writing Covered Call Options" above for a description
of call options.)

A put option on equity or debt securities gives the holder the right to sell
such a security at a specified price (the exercise price) for a stated period of
time. Prior to the expiration of the option, the seller of the option has an
obligation to buy the underlying security from the holder of the option at the
original price specified regardless of the market price of the security at the
time the option is exercised.

Call and put options on stock market indexes operate the same way as call
and put options on equity or debt securities except that they are settled in
cash. In effect, the holder of a call option on a stock market index has the
right to buy the value represented by the index at a specified price for a
stated period of time. Conversely, the holder of a put option on a stock market
index has the right to sell the value represented by the index for a specified
price for a stated period of time. To be settled in cash means that if the
option is exercised, the difference in the current value of the stock market
index and the exercise value must be paid in cash. For example, if a call option
was bought on the XYZ stock market index with an exercise price of $100
(assuming the current value of the index is 110 points, with each point equal to
$1.00), the holder of the call option could exercise the option and receive $10
(110 points minus 100 points) from the seller of the option. If the index equals
90 points, the holder of the option receives nothing.

The seller of an option receives a cash payment (premium) at the time of
sale, which premium is retained by the seller whether or not the option is
exercised. The premium represents consideration to the seller for undertaking
the obligation under the option contract. In the case of call options, the
premium compensates the seller for the loss of the opportunity to profit from
any increase in the value of the security or the index. The premium to a seller
of a put option compensates the seller for the risk assumed in connection with a
decline in the value of the security or index.

The Total Return and Balanced Series may close an open call or put option
position by selling a call option, in the case of an open call position, or a
put option, in the case of an open put option, which is the same as the option
being closed. The Series will receive a premium for selling such an option. The
premium received may be more than, equal to or less than the premium paid by the
Series when it bought the option which is being closed.

Immediately after entering into an opening option position the total value
of all open option positions based on exercise price will not exceed ten percent
(10%) of the Total Return or Balanced Series' total assets. The premium paid by
the Series for the purchase of a call or a put

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option and the expiration or closing sale transaction with respect to such
options are treated in a manner analogous to that described above, except there
is no liability created to the Series. The premium paid for any such option is
included in assets and marked to the market value on a current basis. If the
options expire the Series will realize a short-term loss on the amount of the
cost of the option. If a purchased put or call option is closed out by the
Series entering into a closing sale transaction, the Series will realize a
short-term gain or loss, depending upon whether the sale proceeds from the
closing sale transaction are greater or less than cost of the put or call
option.

INTERNATIONAL, STRATEGIC THEME AND ASIA SERIES:

In furtherance of its objectives, the Series may write covered call options
and purchase call and put options on securities. In addition, the Series may
write secured put options and enter into option transactions on foreign
currency.

Writing (Selling) Call and Put Options. A call option on a security or a
foreign currency gives the purchaser of the option, in return for the premium
paid to the writer (seller), the right to buy the underlying security or foreign
currency at the exercise price at any time during the option period. Upon
exercise by the purchaser, the writer of a call option has the obligation to
sell the underlying security or foreign security, except that the value of the
option depends on the weighted value of the group of securities comprising the
index and all settlements are made in cash. A call option may be terminated by
the writer (seller) by entering into a closing purchase transaction in which it
purchases an option of the same series as the option previously written.

A put option on a security or foreign currency gives the purchaser of the
option, in return for the premium paid to the writer (seller), the right to sell
the underlying security or foreign currency at the exercise price at any time
during the option period. Upon exercise by the purchaser, the writer of a put
option has the obligation to purchase the underlying security or foreign
currency at the exercise price. A put option on a securities index is similar to
a put option on an individual security, except that the value of the options
depends on the weighted value of the group of securities comprising the index
and all settlements are made in cash.

The Series may write exchange-traded call options on its securities. Call
options may be written on portfolio securities and on securities indices, and on
foreign currencies. The Series may, with respect to securities and foreign
currencies, write call and put options on an exchange or over the counter. Call
options on portfolio securities will be covered since the Series will own the
underlying securities or other securities that are acceptable for escrow at all
times during the option period. Call options on securities indices will be
written only to hedge in an economically appropriate way portfolio securities
which are not otherwise hedged with options or financial futures contracts and
will be "covered" by identifying the specific portfolio securities being hedged.
Call options on foreign currencies and put options on securities and foreign
currencies will be covered by securities acceptable for escrow. The Series may
not write options on more than 50% of its total assets. Management presently
intends to cease writing options if and as long as 25% of such total assets are
subject to outstanding options contract.

The Series will write call and put options in order to obtain a return on
its investments from the premiums received and will retain the premiums whether
or not the options are exercised. Any decline in the market value of portfolio
securities or foreign currencies will be offset to the extent of the premiums
received (net of transaction costs). If an option is exercised, the premium
received on the option will effectively increase the exercise price or reduce
the difference between the exercise price and market value.

During the option period, the writer of a call option gives up the
opportunity for appreciation in the market value of the underlying security or
currency above the exercise price. It retains the risk of loss should the price
of the underlying security or foreign currency decline. Writing call options
also involves risks relating to the Series' ability to close out options it has
written.

During the option period, the writer of a put option has assumed the risk
that the price of the underlying security or foreign currency will decline below
the exercise price. However, the writer of the put option has retained the
opportunity for any appreciation above the exercise price should the market
price of the underlying security or foreign currency increase. Writing put
options also involves risks relating to a Portfolio's ability to close out
options it has written.

Purchasing Call and Put Options, Warrants and Stock Rights. The
International, Strategic Theme and Asia Series may invest up to an aggregate
of 5% of its total assets in exchange-traded or over-the-counter call and put
options on securities and securities indices and foreign currencies. Purchases
of such options may be made for the purpose of hedging against changes in the
market value of the underlying securities or foreign currencies. The Series will
invest in call and put options whenever, in the opinion of the Adviser or
Subadviser, a hedging transaction is consistent with its investment objectives.
The Series may sell a call option or a put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security or foreign currency. Any such sale would
result in a net gain or loss depending on whether the amount received on the
sale is more or less than the premium and other transaction costs paid on the
call or put which is sold. Purchasing a call or put option involves the risk
that the Series may lose the premium it paid plus transaction costs.

Warrants and stock rights are almost identical to call options in their
nature, use and effect except that they are issued by the issuer of the
underlying security, rather than an option writer, and they generally have
longer expiration dates than call options. The International, Strategic Theme
and Asia Series intend to invest up to 5% of its net assets in warrants and
stock rights, but no more than 2% of its net assets in warrants and stock rights
not listed on the New York Stock Exchange or the American Stock Exchange.

Over-the-Counter ("OTC") Options. OTC options differ from exchange-traded
options in several respects. They are transacted directly with dealers and not
with a clearing corporation, and there is a risk of non-performance by the
dealer. However, the premium is paid in advance by the dealer. OTC options are
available for a greater variety of securities and foreign currencies, and in a
wider range of expiration dates and exercise prices than exchange-traded
options. Since there is no exchange, pricing is normally done by reference to
information from a market maker, which information is carefully

7
<PAGE>
monitored or caused to be monitored by the Adviser or Subadviser and verified
in appropriate cases.

A writer or purchaser of a put or call option can terminate it voluntarily
only by entering into a closing transaction. In the case of OTC options, there
can be no assurance that a continuous liquid secondary market will exist for any
particular option at any specific time. Consequently, the International Series
may be able to realize the value of an OTC option it has purchased only by
exercising it or entering into a closing sale transaction with the dealer that
issued it. Similarly, when the Series writes an OTC option, it generally can
close out that option prior to its expiration only by entering into a closing
purchase transaction with the dealer to which it originally wrote the option. If
a covered call option writer cannot effect a closing transaction, it cannot sell
the underlying security or foreign currency until the option expires or the
option is exercised. Therefore, the writer of a covered OTC call option may not
be able to sell an underlying security even though it otherwise might be
advantageous to do so. Likewise, the writer of a secured OTC put option may be
unable to sell the securities pledged to secure the put for other investment
purposes while it is obligated as a put writer. Similarly, a purchaser of an OTC
put or call option also might find it difficult to terminate its position on a
timely basis in the absence of a secondary market.

The Fund understands the position of the staff of the Securities and
Exchange Commission (the "SEC") to be that purchased OTC options and the assets
used as "cover" for written OTC options are illiquid securities. Although the
Subadviser has found that dealers with which they will engage in OTC options
transactions are generally agreeable to and capable of entering into closing
transactions, the Fund has adopted procedures for engaging in OTC options
transactions for the purpose of reducing any potential adverse effect of such
transactions upon the liquidity of the International Series.

The Fund will engage in OTC options transactions only with dealers that
meet certain credit and other criteria established by the Board of Trustees of
the Fund. The Fund and the Adviser believe that the approved dealers present
minimal credit risks to the Fund and, therefore, should be able to enter into
closing transactions if necessary. The Fund currently will not engage in OTC
options transactions if the amount invested by the Fund in OTC options, plus a
"liquidity charge" related to OTC options written by the Fund in illiquid
securities plus any other portfolio securities considered to be illiquid, would
exceed 10% of the Fund's total assets. The "liquidity charge" referred to
above is computed as described below.

The Fund anticipates entering into agreements with dealers to which the Fund
sells OTC options. Under these agreements the Fund would have the absolute right
to repurchase the OTC options from the dealer at any time at a price no greater
than a price established under the agreements (the "Repurchase Price"). The
"liquidity charge" referred to above for a specific OTC option transaction will
be the Repurchase Price related to the OTC option less the intrinsic value of
the OTC option. The intrinsic value of an OTC call option for such purposes will
be the amount by which the current market value of the underlying security
exceeds the exercise price. In the case of an OTC put option, intrinsic value
will be the amount by which the exercise price exceeds the current market value
of the underlying security. If there is no such agreement requiring a dealer to
allow the Fund to repurchase a specific OTC option written by the Fund, the
"liquidity charge" will be the current market value of the assets serving as
"cover" for such OTC option.

FOREIGN CURRENCY TRANSACTIONS

The value of the assets of an International, Strategic Theme and Asia
Series as measured in United States dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations, and a Series may incur costs in connection with conversions between
various currencies. A Series will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or through forward contracts to purchase
or sell foreign currencies. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded directly between currency traders (usually large commercial banks) and
their customers. At the time of the purchase of a forward foreign currency
exchange contract, an amount of cash, U.S. Government securities or other
appropriate high-grade debt obligations equal to the market value of the
contract, minus the Series' initial margin deposit with respect thereto, will be
deposited in a segregated account with the Fund's custodian bank to
collateralize fully the position and thereby ensure that it is not leveraged.

When a Series enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may want to establish the United States
dollar cost or proceeds, as the case may be. By entering into a forward contract
in United States dollars for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, a Series is able to
protect itself against a possible loss between trade and settlement dates
resulting from an adverse change in the relationship between the United States
dollar and such foreign currency. However, this tends to limit potential gains
which might result from a positive change in such currency relationships. The
International and Asia Series also may hedge its foreign currency exchange
rate risk by engaging in currency financial futures and options transactions.

When the Adviser believes that the currency of a particular foreign country
may suffer a substantial decline against the United States dollar, it may enter
into a forward contract to sell an amount of foreign currency approximating the
value of some or all of a Series' portfolio securities denominated in such
foreign currency. The forecasting of short-term currency market movement is
extremely difficult and whether such a short-term hedging strategy will be
successful is highly uncertain.

It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a contract. Accordingly, it may be necessary for
a Series to purchase additional currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Series is obligated to deliver when a decision is
made to sell the security and make delivery of the foreign currency in
settlement of a forward contract. Conversely, it may be necessary to sell on the
spot market some of the foreign currency received upon the sale of the portfolio
security if its market value exceeds the amount of foreign currency the Series
is obligated to deliver.

8
<PAGE>
If the Series retains the portfolio security and engages in an offsetting
transaction, it will incur a gain or a loss (as described below) to the extent
that there has been movement in forward contract prices. If the Series engages
in an offsetting transaction, it may subsequently enter into a new forward
contract to sell the foreign currency. Should forward prices decline during the
period between the Series' entering into a forward contract for the sale of a
foreign currency and the date it enters into an offsetting contract for the
purchase of the foreign currency, the Series would realize gain to the extent
the price of the currency it has agreed to sell exceeds the price of the
currency it has agreed to purchase. Should forward prices increase, the Series
would suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell. Although such
contracts tend to minimize the risk of loss due to a decline in the value of the
hedged currency, they also tend to limit any potential gain which might result
should the value of such currency increase. The Series will have to convert
holdings of foreign currencies into United States dollars from time to time.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference (the "spread") between the prices at
which they are buying and selling various currencies.

ZERO AND DEFERRED COUPON DEBT SECURITIES
The Multi-Sector Fixed Income Series ("Multi-Sector Series") may invest in
debt obligations that do not make any interest payments for a specified period
of time prior to maturity ("deferred coupon" obligations) or until maturity
("zero coupon" obligations). Because deferred and zero coupon bonds do not make
interest payments for a certain period of time, they are purchased by the Series
at a deep discount and their value fluctuates more in response to interest rate
changes than does the value of debt obligations that make current interest
payments. The degree of fluctuation with interest rate changes is greater when
the deferred period is longer. Therefore, there is a risk that the value of the
Series' shares may decline more as a result of an increase in interest rates
than would be the case if the Series did not invest in deferred or zero coupon
bonds.

REAL ESTATE INVESTMENT TRUSTS
As described in the Prospectus, the Real Estate Series intends under normal
conditions to invest in real estate investment trusts ("REITs"). REITs pool
investors' funds for investment primarily in income-producing commercial real
estate or real estate related loans. A REIT is not taxed on income distributed
to shareholders if it complies with several requirements relating to its
organization, ownership, assets, and income and a requirement that it distribute
to its shareholders at least 95% of its taxable income (other than net capital
gains) for each taxable year.

REITs generally can be classified as follows:

--Equity REITs, which invest the majority of their assets directly in real
property and derive their income primarily from rents. Equity REITs can
also realize capital gains by selling properties that have appreciated in
value.

--Mortgage REITs, which invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments.

--Hybrid REITs, which combine the characteristics of both equity REITs and
mortgage REITs.

REITs are like closed-end investment companies in that they are essentially
holding companies which rely on professional managers to supervise their
investments. A shareholder in the Real Estate Series should realize that by
investing in REITs indirectly through the Series, he will bear not only his
proportionate share of the expenses of the Series, but also, indirectly
similar expenses of underlying REITs.

DEBT SECURITIES
Up to 25% of the Real Estate Series total assets may be invested in debt
securities (which include for purposes of this investment policy convertible
debt securities which PRS or ABKB believes have attractive equity
characteristics). The Real Estate Series may invest in debt securities rated BBB
or better by Standard & Poor's Corporation ("S&P") or Baa or better by Moody's
Investor Service, Inc. ("Moody's") or, if not rated, are judged to be of
comparable quality as determined by PRS or ABKB. In choosing debt securities for
purchase by the Portfolio, PRS will employ the same analytical and valuation
techniques utilized in managing the equity portion of the Real Estate Series
holdings (see "Investment Advisory and Other Services") and will invest in debt
securities only of companies that satisfy PRS' investment criteria.

The value of the Real Estate Series investments in debt securities will
change as interest rates fluctuate. When interest rates decline, the values of
such securities generally can be expected to increase and when interest rates
rise, the values of such securities generally can be expected to decrease. The
lower-rated and comparable unrated debt securities described above are subject
to greater risks of loss of income and principal than are higher-rated fixed
income securities. The market value of lower-rated securities generally tends to
reflect the market's perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than is the case with more
highly rated securities, which reflect primarily functions in general levels of
interest rates.

JUNK BONDS
The International and Total Return Series may invest up to 10% and 5%,
respectively, of total net assets in non-investment grade debt securities. The
market prices of such lower rated securities generally fluctuate in response to
changes in interest rates and economic conditions more than those of higher
rated securities. Additionally, there is a greater possibility that an adverse
change in the financial condition of an issuer, particularly a higher leveraged
issuer, may affect its ability to make payments of income and principal and
increase the expenses of the Series seeking recovery from the issuer. Lower
rated securities may be thinly traded and less liquid than higher rated
securities and therefore harder to value and more susceptible to adverse
publicity concerning the issuer.

REAL ESTATE SECURITIES
The Real Estate Series will not invest in real estate directly, but only in
securities issued by real estate companies. However, the Portfolio may be
subject to risks similar to those associated with the direct ownership of real
estate because of its policy of concentrating in the securities of companies in
the real estate industry. These include declines in the value of real estate,
risks related to general and local

9
<PAGE>
economic conditions, dependence on management skill, cash flow dependence,
possible lack of availability of long-term mortgage funds, over-building,
extended vacancies of properties, decreased occupancy rates and increased
competition, increases in property taxes and operating expenses, changes in
neighborhood values and the appeal of the properties to tenants and changes in
interest rates.

Selecting REITs requires an evaluation of the merits of each type of asset a
particular REIT owns, as well as regional and local economics. Due to the
proliferation of REITs in recent years and the relative lack of sophistication
of certain REIT managers, the quality of REIT assets has varied significantly.

In addition to these risks, equity REITs may be affected by changes in the
value of the underlying properties owned by the trusts, while mortgage REITs may
be affected by the quality of any credit extended. Further, equity and mortgage
REITs are dependent upon management skills and generally are not diversified.
Equity and mortgage REITs also are subject to potential defaults by borrowers,
self-liquidation, and the possibility of failing to qualify for tax-free status
of income under the Code and failing to maintain exemption from the Investment
Company Act of 1940. In the event of a default by a borrower or lessee, the REIT
may experience delays in enforcing its rights as a mortgagee or lessor and may
incur substantial costs associated with protecting its investments. In addition,
investment in REITs could cause the Series to possibly fail to qualify as a
regulated investment company.

EMERGING MARKET SECURITIES
The Asia Series may invest in countries or regions with relatively low gross
national product per capita compared to the world's major economies, and in
countries or regions with the potential for rapid economic growth (emerging
markets). Emerging markets in Asia will include countries: (i) having an
"emerging stock market" as defined by the International Finance Corporation;
(ii) with low-to-middle-income economies according to the International Bank for
Reconstruction and Development (the "World Bank"); (iii) listed in World Bank
publications as developing; or (iv) determined by the Adviser to be an emerging
market as defined above. The Series also may invest in securities of: (I)
companies the principal securities trading market for which is an emerging
market country; (ii) companies organized under the laws of, and with a principal
office in, an emerging market country, or (iii) companies whose principal
activities are located in emerging market countries.

The risks of investing in foreign securities may be intensified in the case
of investments in emerging markets. Securities of many issuers in emerging
markets may be less liquid and more volatile than securities of comparable
domestic issuers. Emerging markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of the Series is uninvested and
no return is earned thereon. The inability of the Series to make intended
security purchases due to settlement problems could cause the Series to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to the
Series due to subsequent declines in value of the portfolio securities or, if
the Series has entered into a contract to sell the security, in possible
liability to the purchaser. Securities prices in emerging markets can be
significantly more volatile than in the more developed nations of the world,
reflecting the greater uncertainties of investing in less established markets
and economies. In particular, countries with emerging markets may have
relatively unstable governments, present the risk of nationalization of
businesses, restrictions on foreign ownership, or prohibitions of repatriation
of assets, and may have less protection of property rights than more developed
countries. The economies of countries with emerging markets may be predominantly
based on only a few industries, may be highly vulnerable to changes in local or
global trade conditions, and may suffer from extreme and volatile debt burdens
or inflation rates. Local securities markets may trade a small number of
securities and may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of substantial holdings difficult
or impossible at times. Securities of issuers located in countries with emerging
markets may have limited marketability and may be subject to more abrupt or
erratic price movements.

Certain emerging markets may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if a deterioration occurs in an
emerging market's balance of payments or for other reasons, a country could
impose temporary restrictions on foreign capital remittances. The Series could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the application
to the Series any restrictions on investments. Investments in certain foreign
emerging market debt obligations may be restricted or controlled to varying
degrees. These restrictions or controls may at times preclude investment in
certain foreign emerging market debt obligations and increase the expenses of
the Series.

ADDITIONAL RISK FACTORS. As a result of its investments in foreign
securities, the Series may receive interest or dividend payments, or the
proceeds of the sale or redemption of such securities, in the foreign currencies
in which such securities are denominated. In that event, the Series may convert
such currencies into dollars at the then current exchange rate. Under certain
circumstances, however, such as where the Adviser believes that the applicable
rate is unfavorable at the time the currencies are received or the Adviser
anticipates, for any other reason, that the exchange rate will improve, the
Series may hold such currencies for an indefinite period of time.

In addition, the Series may be required to receive delivery of the foreign
currency underlying forward foreign currency contracts it has entered into. This
could occur, for example, if an option written by the Fund is exercised or the
Fund is unable to close out a forward contract. The Series may hold foreign
currency in anticipation of purchasing foreign securities. The Series also may
elect to take delivery of the currencies underlying options or forward contracts
if, in the judgment of the Adviser, it is in the best interest of the Series to
do so. In such instances as well, the Series may convert the foreign currencies
to dollars at the then current exchange rate, or may hold such currencies for an
indefinite period of time.

While the holding of currencies will permit the Series to take advantage of
favorable movements in the applicable exchange rate, it also exposes the Series
to risk of loss if such rates move in a direction adverse to the Series'
position. Such losses could reduce any profits

10
<PAGE>

or increase any losses sustained by the Series from the sale or redemption
of securities, and could reduce the dollar value of interest or dividend
payments received. In addition, the holding of currencies could adversely affect
the Series' profit or loss on currency options or forward contracts, as well as
its hedging strategies.

INDUSTRY CLASSIFICATIONS
For the purposes of establishing industry classifications for the Strategic
Theme Series, the Adviser utilizes the William O'Neil & Co., Inc. Industry Group
Index. The William O'Neil & Co., Inc. Industry Group Index is presently
comprised of 197 industry classifications. Classifications are determined based
on the following broad sectors: Basic Material, Energy, Capital Equipment,
Technology, Consumer Cyclical, Retail, Consumer Staple, Health Care,
Transportation, Financial, and Utilities. Sectors are then divided into industry
groups based upon income sources and other economically relevant criteria as
determined by O'Neil & Co., Inc.

INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

The Fund's fundamental policies as they affect any Series cannot be
changed without the approval of a vote of a majority of the outstanding shares
of such Series, which is the lesser of (i) 67% or more of the voting securities
of such Series present at a meeting if the holders of more than 50% of the
outstanding voting securities of such Series are present or represented by proxy
or (ii) more than 50% of the outstanding voting securities of such Series. A
proposed change in fundamental policy or investment objective will be deemed to
have been effectively acted upon by any Series if a majority of the outstanding
voting securities of that Series votes for the approval of the proposal as
provided above, notwithstanding (1) that such matter has not been approved by a
majority of the outstanding securities of any other Series affected by such
matter and (2) that such matter has not been approved by a majority of the
outstanding voting securities of the Fund.

The following investment restrictions are fundamental policies of the Fund
with respect to all Series and may not be changed except as described above. The
Fund may not:

(1) Purchase real estate or any interest therein, except through the
purchase of corporate or certain government securities
(including securities secured by a mortgage or a leasehold
interest or other interest in real estate). A security issued by
a real estate or mortgage investment trust is not treated as
an interest in real estate. The Real Estate Series may,
however, invest in mortgage backed securities.

(2) Make loans other than loans of securities secured by cash or
cash equivalents for the full value of the securities; any
interest earned from securities lending will inure to the
benefit of the Series which holds such securities. However,
the purchase of debt securities which are ordinarily
purchased by financial institutions are not considered the
loaning of money.

(3) Invest in commodities or in commodity contracts or in options,
provided, however, that it may write covered call
option contracts; and provided further, that the Total Return
and Balanced Series may enter into financial futures contracts
to purchase and sell debt obligations and may buy
call and put options on securities and stock market indexes;
and provided further, that the International and Asia Series
may purchase call and put options on securities, engage in
financial futures contracts and related options transactions,
write secured put options, and enter into foreign currency
and foreign currency options transactions.

(4) Engage in the underwriting of securities of other issuers,
except to the extent any Series may be deemed an
underwriter in selling as part of an offering registered under
the Securities Act of 1933 securities which it has acquired.
The International and Asia Series will buy and sell securities
outside the United States that are not registered with the
SEC or marketable in the United States.

(5) Borrow money, except as a temporary measure where such borrowing
would not exceed 25% of the market value of total assets at the
time each such borrowing is made. However, the Fund may borrow
money for any general purpose from a bank provided such borrowing
does not exceed 10% of the net asset value of the Fund, not
considering any such borrowings as liabilities. The Total Return,
International and Asia Series may borrow money to the extent of
financial futures transactions and reverse repurchase agreements,
provided that such borrowings are limited to 33 1/3% of the value
of the total assets of the Series.

(6) Invest in restricted securities in an amount greater than 10% of the
value of any Series' portfolio at the time any such investment is
made.

(7) Purchase securities on margin, except for short-term credits as may
be necessary for the clearance of purchases or sales
of securities, or to effect a short sale of any security. (The
deposit of "maintenance margin" in connection with financial futures
contracts is not considered the purchase of a security on margin.)

(8) Invest for the purpose of exercising control over or management of
any company.

(9) Unless received as a dividend or as a result of an offer of
exchange approved by the Securities and Exchange
Commission or of a plan of reorganization, purchase or
otherwise acquire any security issued by an investment
company if the Series would immediately thereafter own (a)
more than 3% of the outstanding voting stock of the
investment company, (b) securities of the investment
company having an aggregate value in excess of 5% of the
Series' total assets, (c) securities of investment companies
having an aggregate value in excess of 10% of the Series'
total assets, or (d) together with investment companies
having the same investment adviser as the Fund (and
companies controlled by such investment companies), more
than 10% of the outstanding voting stock of any registered
closed-end investment company.

(10) (a) Invest more than 5% of its total assets (taken at market
value at the time of each investment) in the securities (other
than United States government or government agency

<PAGE>

securities or in the case of the International and Asia Series,
other than foreign government securities), or, with respect
to the Total Return and Balanced Series, call or put options
contracts and financial futures contracts of any one issuer
(including repurchase agreements with any one bank); and
(b) purchase more than either (i) 10% in principal amount
of the outstanding debt securities of an issuer (the foregoing
restriction being inapplicable to the Real Estate Series), or
(ii) 10% of the outstanding voting securities of an issuer,
except that such restrictions shall not apply to securities
issued or guaranteed by the United States government or its
agencies, bank money instruments or bank repurchase
agreements. The International Series will, with respect to
75% of its assets, limit its investment in the securities of any
one foreign government, its agencies or instrumentalities, to
5% of the Series' total assets.

(11) Concentrate the portfolio investments in any one industry
(the foregoing restriction being inapplicable to the Real
Estate Series). No security may be purchased for a Series if
such purchase would cause the value of the aggregate
investment in any one industry to exceed 25% of the Fund's
total assets. However, the Money Market Series and Total
Return Series may invest more than 25% of their assets in
the banking industry. The Real Estate Series may invest not
less than 75% of its assets in the real estate industry.

(12) Issue senior securities.

(13) Enter into repurchase agreements which would cause more than
10% of any Series' total assets (taken at market value) to
be subject to repurchase agreements maturing in more than seven days.

PORTFOLIO TURNOVER
- --------------------------------------------------------------------------------

The portfolio turnover rate of each Series is calculated by dividing the
lesser of purchases or sales of portfolio securities during the fiscal year by
the monthly average of the value of the Series' securities (excluding all
securities, including options, with maturities at the time of acquisition of one
year or less). All long-term securities, including long-term U.S. Government
securities, are included. A high rate of portfolio turnover generally involves
correspondingly greater brokerage commission expenses, which must be borne
directly by the Series. Turnover rates may vary greatly from year to year as
well as within a particular year and also may be affected by cash requirements
for redemptions of each Series' shares by requirements which enable the Fund to
receive certain favorable tax treatments. Based upon the formulation for
calculating the turnover rate as stated above, it is anticipated that the
turnover rate for the Multi-Sector Series will not generally exceed 350%; the
turnover rate for the Growth Series will not generally exceed 300%; and the
turnover rate for the Balanced Series will not generally exceed 200%. The
turnover rates for the stock and bond segments of the Balanced Series are not
expected to exceed 250% and 100%, respectively. It is anticipated that the
turnover rate for the Total Return Series will not generally exceed 350% and
200%, respectively. It is anticipated that the turnover rate for the
International Series will not generally exceed 150%. It is anticipated that the
turnover rate for the Real Estate and Asia Series will not exceed 75%. It is
anticipated that the turnover rate for the Strategic Theme Series will not
generally exceed 175%.

MANAGEMENT OF THE FUND

The Trustees and executive officers of the Fund and their principal
occupations for the last five years are set forth below. Unless otherwise noted,
the address of each executive officer and Trustee is One American Row, Hartford,
Connecticut 06102. On October 26, 1995, the shareholders elected to fix the
number of Trustees at eleven and to elect such number of Trustees. On November
15, 1995 the Trustees voted to increase the number of trustees from eleven to
fourteen and to appoint Messrs. Francis E. Jeffries, Everett L. Morris and
Calvin J. Pedersen to fill the vacancy caused by the increase. The Trustees and
executive officers are listed below.

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
C. Duane Blinn (68) Trustee Partner in the law firm of Day, Berry & Howard. Director/Trustee, Phoenix
City Place Funds (1980-present). Director/Trustee, the National Affiliated Investment
Hartford, CT 06103 Companies (until 1993). Trustee, Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present).

Robert Chesek (61) Trustee Trustee/Director, the Phoenix Funds (1981-present) and Chairman (1989-1994).
49 Old Post Road Vice President, Common Stock, Phoenix Home Life Mutual
Wethersfield, CT 06109 Insurance Company (1980-1994). Director/Trustee, the National Affiliated
Investment Companies (until 1993). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present).

</TABLE>

<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
E. Virgil Conway (66) Trustee Director/Trustee, Phoenix Funds (1993-present). Trustee/Director,
9 Rittenhouse Road Consolidated Edison Company of New York, Inc. (1970-present), Pace
Bronxville, NY 10708 University (1978-present), Atlantic Mutual Insurance Company
(1974-present), HRE Properties (1989-present), Greater New York
Councils, Boy Scouts of America (1985-present), Union Pacific Corp.
(1978-present), Blackrock Fund for Fannie Mae Mortgage Securities
(Advisory Director) (1989-present); Centennial Insurance Company,
Josiah Macy, Jr. Foundation, and The Harlem Youth Development
Foundation. Chairman, Metropolitan Transportation Authority
(1992-present). Chairman, Audit Committee of the City of New York
(1981-present). Director/Trustee, the National Affiliated Investment
Companies (1967-1993). Trustee, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Director, Accuhealth (1994-present), Trism,
Inc. (1994-present). Director, Realty Foundation of New York
(1972-present), and Chairman, New York Housing Partnership Development
Corp. (1981-present). Advisory Director, Fund Directions (1993-present).
Former Director, New York Chamber of Commerce and Industry
(1974-1990).

Harry Dalzell-Payne (66) Trustee Director/Trustee, Phoenix Funds (1983-present). Director, Farragut Mortgage
330 East 39th Street Co., Inc. (1991-1994). Trustee, Phoenix Duff & Phelps Institutional Mutual
Apt. 29G Funds (1996-present). Director/Trustee, the National Affiliated Investment
New York, NY 10016 Companies (1983-1993). Consultant, The Levett Group Holding, Inc. (1989-1990).
Independent real estate market consultant (1982-1990). Formerly, a Major
General of the British Army.

*Francis E. Jeffries (65) Trustee Director and Chairman of the Board, Phoenix Duff & Phelps Corporation.
Phoenix Duff & Phelps Corp. Trustee, Phoenix Duff & Phelps Mutual Funds. Director, Duff & Phelps
55 East Monroe Street Utilities Income Fund, Duff & Phelps Utilities Tax-Free Income, Inc.,
Suite 3800 Duff & Phelps Utility and Corporate Bond Trust, Inc. and The Empire District
Chicago, IL 60603 Electric Company. Director (1989-1995), Chief Executive Officer (1989-1995)
and President (1989-1993), Duff & Phelps Corporation. Director/Trustee,
Phoenix Funds (1995-present). Trustee, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present).

Leroy Keith, Jr. (57) Trustee Director/Trustee, Phoenix Funds (1980-present). Chairman and Chief Executive
Chairman and Officer, Carson Products Company (1995-present). Director,
Chief Executive Officer Equifax Corporation (1991-present), and Keystone International Fund, Inc.
Carson Products Company (1989-present). Trustee, Keystone Liquid Trust, Keystone Tax Exempt Trust,
64 Ross Road Keystone Tax Free Fund, Master Reserves Tax Free Trust, and Master
Savannah, GA 31405 Reserves Trust. Trustee, Phoenix Duff & Phelps Institutional Mutual Funds
1996-present). Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director, Blue Cross/Blue Shield (1989-1993) and
First Union Bank of Georgia (1989-1993). President, Morehouse College
(1987-1994). Chairman and Chief Executive Officer, Keith Ventures
(1994-1995).

</TABLE>
13
<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
*Philip R. McLoughlin (49) Trustee Director (1994-present) and Executive Vice President and Chief Investment
and President Officer, Phoenix Home Life Mutual Insurance Company (1987-present).
Director/Trustee and President, Phoenix Funds (1989-present). Director,
Vice Chairman and Chief Executive Officer, Phoenix Duff & Phelps
Corporation (1995-present). Director, (1983-present) and Chairman
(1995-present) Phoenix Investment Counsel, Inc. Director (1984-present)
and President (1990-present), Phoenix Equity Planning Corporation.
Director, Phoenix Realty Group, Inc. (1994-present), Phoenix Realty
Advisors, Inc. (1987-present), Phoenix Realty Investors, Inc.
(1994-present), Phoenix Realty Securities, Inc. (1994-present), Phoenix
Founders, Inc. (1981-present), PXRE Corporation (Delaware)
(1985-present). Trustee and President, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present), World Trust Fund (1991-present). Director
(1992-present) and President (1992-1994), W. S. Griffith & Co., Inc. and
Director (1992-1995) and President (1992-1994), Townsend Financial
Advisers, Inc. Director (1994-present), Chairman (1995-present) and
President and Chief Executive Officer (1995-present), National Securities &
Research Corporation and Phoenix Securities Group, Inc. (1993-1995).
Director/Trustee, the National Affiliated Investment Companies (until 1993)
Director and Vice President, PM Holdings, Inc. (1995-present).

Everett L. Morris (67) Trustee Vice President, W. H. Reaves and Company (1993-present). Director/Trustee
164 Laird Road Phoenix Funds (1995-present). Trustee, Phoenix Duff &
Colts Neck, NJ 07722 Phelps Institutional Mutual Funds (1996-present). Director, Duff & Phelps
Utilities Tax-Free Income, Inc., Duff & Phelps Utility and Corporate Bond
Trust, Inc., Public Service Enterprise Group Incorporated and President and
Chief Operating Officer of Enterprise Diversified Holdings Incorporated
(1992-1993). Senior Executive Vice President and Chief Financial Officer,
Public Service Electric and Gas Company (1991-1992). Director, First
Fidelity Bank, N.A. (until 1991).

James M. Oates (49) Trustee Director/Trustee, Phoenix Funds (1987-present). Managing Director, The
Managing Director Wydown Group (1994-present). Director, Phoenix Duff & Phelps
The Wydown Group Corporation (1995-present), Investors Bank and Trust Corporation
50 Congress St. (1995-present), Investors Financial Services Corporation (1995-present),
Boston, MA 02109 Blue Cross and Blue Shield of New Hampshire (1994-present), Govett
Worldwide Opportunity Funds, Inc. (1991-present), Stifel Financial
Corporation (1986-1995), Plymouth Rubber Co. (1996-present), and
Savings Bank Life Insurance Company (1988-1994). Trustee, Phoenix Duff
& Phelps Institutional Mutual Funds (1996-present). Director/Trustee, the
National Affiliated Investment Companies (until 1993). Director and
President (1984-1994) and Chief Executive Officer (1986-1994), Neworld
Bank.

*Calvin J. Pedersen (54) Trustee Director and President, Phoenix Duff & Phelps Corporation (1995-present).
Phoenix Duff & Phelps Corp. Director (since 1992) and President (since July 1993), Duff & Phelps.
55 East Monroe Street Executive Vice President, Duff & Phelps (January 1992-July 1993).
Suite 3800 President and Chief Executive Officer, Duff & Phelps Utilities Tax-Free
Chicago, IL 60603 Income, Inc. and Duff & Phelps Utility and Corporate Bond Trust, Inc.
Chairman, Chief Executive Officer, and Trustee, Phoenix Duff & Phelps
Mutual Funds. Director/Trustee, Phoenix Funds (1995-present). Trustee,
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).

</TABLE>
14

<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
Philip R. Reynolds (68) Trustee Director/Trustee, Phoenix Funds (1984-present). Director, Vestaur Securities,
43 Montclair Drive Inc. (1972-present). Trustee and Treasurer, J. Walton Bissell Foundation,
West Hartford, CT 06107 Inc., (1988-present). Trustee, Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present). Director/Trustee, the National Affiliated Investment
Companies (until 1993).

Herbert Roth, Jr. (67) Trustee Director/Trustee, Phoenix Funds (1980-present). Director, Boston Edison
134 Lake Street Company (1978-present), Phoenix Home Life Mutual Insurance Company
P. O. Box 909 (1972-present), Landauer, Inc. (medical services) (1970-present), Tech
Sherborn, MA 01770 Ops./Sevcon, Inc. (electronic controllers) (1987-present), Key Energy Group
(oil rig service) (1988-1993), and Mark IV Industries (diversified
manufacturer) (1985-present). Trustee, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993).

Richard E. Segerson (50) Trustee Director/Trustee, Phoenix Funds (1993-present). Vice President and General
102 Valley Road Manager, Coats & Clark (previously Tootal American, Inc.) (1991-1993).
New Canaan, CT 06840 Consultant, Tootal Group (1989-1991). Trustee, Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director/Trustee, the National
Affiliated Investment Companies (1983-1993).

Lowell P. Weicker, Jr. (64) Trustee Chairman, Dresing, Lierman, Weicker (1995-present). Trustee/Director, the
Dresing, Lierman, Weicker Phoenix Funds (1995-present). Trustee, Phoenix Duff & Phelps Institutional
6931 Arlington Road, Ste. 501 Mutual Funds (1996-present). Director, UST, Inc. (1995-present) and
Bethesda, MD 20814 HPSC, Inc. (1995-present). Governor of the State of Connecticut (1991-1995).

- ---------------
* Trustees identified with an asterisk are considered to be interested persons
of the Fund (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with the Phoenix Investment Counsel,
Inc., Phoenix Realty Securities, Inc., or Phoenix Equity Planning Corporation.

Martin J. Gavin (46) Executive Executive Vice President, Finance and Operations, Phoenix Duff & Phelps
Vice President Corporation (1995-present). Senior Vice President, Investment Products,
Phoenix Home Life Mutual Insurance Company (1989-1995). Director and
Executive Vice President, Phoenix Equity Planning Corporation
(1990-present). Director (1994-present) and Executive Vice President
(1991-present). Phoenix Investment Counsel, Inc. Director and Executive
Vice President, Phoenix Securities Group, Inc. (1993-1995), National
Securities & Research Corporation (1993-present), Townsend Financial
Advisers, Inc. (1993-1995). Director (1993-present) and Executive Vice
President (1993-1994), W.S. Griffith & Co., Inc. Director and Vice President,
PM Holdings, Inc. (1994-present). Executive Vice President, the Phoenix
Funds (1993-present). Executive Vice President, National Affiliated
Investment Companies (until 1993).

Michael E. Haylon (38) Executive Executive Vice President, Investments, Phoenix Duff & Phelps Corporation
Vice President (1995-present). Senior Vice President, Securities Investments, Phoenix
Home Life Mutual Insurance Company (1993-present). Director and
Executive Vice President (1994-present), Vice President (1993-1994),
National Securities & Research Corporation. Executive Vice President,
Phoenix Funds (1995-present). Director (1994-present) and President
(1995-present), Phoenix Investment Counsel, Inc. Director, Phoenix Equity
Planning Corporation (1995-present). Vice President, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Various other positions
with Phoenix Home Life Mutual Insurance Company (1990-1993).

</TABLE>

<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
William J. Newman (57) Senior Executive Vice President, Phoenix Investment Counsel, Inc. (1995-present).
Vice President Vice President, Common Stock and Chief Investment Strategist, Phoenix
Home Life Mutual Insurance Company (April 1995-November 1995). Senior
Vice President, National Securities & Research Corporation (1995-present),
and Phoenix Equity Planning Corporation (1995-present). Senior Vice
President, Phoenix Multi-Portfolio Fund and Phoenix Strategic Equity Series
Fund, Inc. (1995-present). Senior Vice President, Phoenix Income and
Growth Fund, Phoenix Series Fund, Phoenix Total Return Fund, Inc. and
Phoenix Worldwide Opportunities Fund (1996-present). Senior Vice
President, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Chief Investment Strategist, Kidder, Peabody Co., Inc.
(1993-1994) and Managing Director, Equities, Bankers Trust (1991-1993).

George I. Askew (33) Vice President Vice President, The Phoenix Edge Series Fund (1996-present). Vice President,
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present). Research
Analyst, Phoenix Home Life Mutual Insurance Company (1994-1995). Graduate
Student, UCLA (1992-1994). Various positions with the Investment Banking
Division of Merrill Lynch & Co.

Curtiss O. Barrows (45) Vice President Vice President, Phoenix Investment Counsel, Inc. (1985-present). Portfolio
Manager, Public Bonds, Phoenix Home Life Mutual Insurance Company
(1991-1995). Vice President, Phoenix Series Fund (1985-present),
Phoenix Multi-Portfolio Fund (1995-present). Vice President, National
Securities & Research Corporation (1993-present). Various other positions
with Phoenix Home Life Mutual Insurance Company (1985-1991).

Mary E. Canning (39) Vice President Vice President, Phoenix Investment Counsel, Inc. (1991-present). Associate
Portfolio Manager, Common Stock, Phoenix Home Life Mutual Insurance
Company (1989-1995). Vice President, Phoenix Series Fund
(1987-present). Various other positions with Phoenix Home Life Mutual
Insurance Company (1982-1989).

James M. Dolan (46) Vice President Vice President and Compliance Officer (1994-present) and Assistant Secretary
100 Bright Meadow Blvd. (1981-present), Phoenix Equity Planning Corporation. Vice
P.O. Box 2200 President, Phoenix Funds (1989-present). Vice President (1991-present),
Enfield, CT 06083-2200 Assistant Clerk and Assistant Secretary (1982-present), Phoenix Investment
Counsel, Inc. Vice President and Chief Compliance Officer (1994-present),
Phoenix Realty Advisors, Inc. and Chief Compliance Officer (1995-present),
Phoenix Realty Securities, Inc. Vice President and Compliance Officer,
Assistant Secretary (1994-present), Assistant Vice President (1993-1994),
National Securities & Research Corporation. Vice President, Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Vice President, the
National Affiliated Investment Companies (until 1993). Various other
positions with Phoenix Equity Planning Corporation (1978-1994).

Jeanne H. Dorey (34) Vice President Vice President, Phoenix Investment Counsel, Inc. (1993-present). Portfolio
Manager, International, Phoenix Home Life Mutual Insurance Company
(until 1995). Vice President, National Securities & Research Corporation
(1993-present), Phoenix Multi-Portfolio Fund (1993-present), and Phoenix
Worldwide Opportunities Fund (1993-present).

Christopher J. Kelleher (40) Vice President Vice President, Phoenix Investment Counsel, Inc. (1991-present). Portfolio
Manager, Public Bonds, Phoenix Home Life Mutual Insurance Company
(1991-1995). Vice President, National Securities & Research Corporation
(1993-present), Phoenix Series Fund (1989-present), Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Various other positions
with Phoenix Home Life Mutual Insurance Company (1983-1991).

</TABLE>

<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
William R. Moyer (51) Vice President Senior Vice President and Chief Financial Officer, Phoenix Duff & Phelps
100 Bright Meadow Blvd. Corporation (1995-present). Vice President, Investment Products Finance,
P.O. Box 2200 Phoenix Home Life Mutual Insurance Company (1990-1995). Senior Vice
Enfield, CT 06083-2200 President, Finance, and Treasurer (1994-present), Phoenix Equity Planning
Corporation and Phoenix Investment Counsel, Inc. (1990-present). Vice
President, Phoenix Funds (1990-present). Vice President, the National
Affiliated Investment Companies (until 1993). Senior Vice President, Finance,
Phoenix Securities Group, Inc. (1993-1995). Senior Vice President, Finance
(1993-present) and Treasurer (1994-present), National Securities &
Research Corporation (1993-present). Senior Vice President and Chief
Financial Officer (1993-1995) and Treasurer (1994-1995), Townsend
Financial Advisers, Inc. and W. S. Griffith & Co., Inc. Vice President,
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).

Scott C. Noble (49) Vice President Senior Vice President, Real Estate, Phoenix Home Life Mutual Insurance
Company (1993-present). Director and Executive Vice President, Phoenix
Real Estate Securities, Inc. (1993-present). Vice President, Phoenix Multi-
Portfolio Fund (1994-present) and The Phoenix Edge Series Fund
(1995-present). Director (1991-present) and President (1993-present),
Phoenix Founders, Inc. Director and President (1994-present), Chief
Executive Officer (1995-present), Phoenix Realty Group, Inc. Director and
Chief Executive Officer (1991-present), President (1991-1995), Phoenix
Realty Advisors, Inc. Director, President and Chief Executive Officer
(1994-present), Phoenix Realty Investors, Inc. Various other positions with
Phoenix Home Life Insurance Company (1991-1993).

C. Edwin Riley, Jr. (42) Vice President Vice President, Phoenix Investment Counsel, Inc. (1995-present). Vice
President, Phoenix Total Return Fund, Inc., and The Phoenix Edge Series
Fund (1995-present). Vice President, Phoenix Series Fund (1996-present).
Portfolio Manager, Phoenix Home Life Mutual Insurance Company (August
1995-November 1995). Senior Vice President and Director of Equity
Management for Nationsbank Investment Management (1988-1995).

Amy L. Robinson (40) Vice President Vice President, Phoenix Investment Counsel, Inc. (1992-present). Managing
Director, Securities Administration, Phoenix Home Life Mutual Insurance
Company (1991-1995). Vice President, National Securities & Research
Corporation (1993-present), Phoenix Series Fund (1989-present) and The
Phoenix Edge Series Fund (1989-present). Various other positions with
Phoenix Home Life Mutual Insurance Company (1979-1991).

Barbara Rubin (42) Vice President Vice President, Real Estate, Phoenix Home Life Mutual Insurance Company
(1995-present). Managing Director, Real Estate, Phoenix Home Life Mutual
Insurance Company (1992-1995). Vice President, Phoenix Multi-Portfolio
Fund (1994-present) and The Phoenix Edge Series Fund (1995-present).
Second Vice President, Real Estate, Phoenix Home Life Mutual Insurance
Company (1986-1992). Vice President (1991-present) 238 Columbus
Blvd., Inc. Director (1988-present) and Vice President (1993-present),
Phoenix Founders, Inc. Vice President (1993-present), Phoenix Real Estate
Securities, Inc. Director and President (1987-1991), Executive Vice
President (1991-1994), Phoenix Realty Advisors, Inc. Executive Vice
President, Phoenix Realty Group, Inc. (1994-present). Executive Vice
President (1994-1995), President (1995-present), Phoenix Realty
Securities, Inc.

</TABLE>

<PAGE>

<TABLE>

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
---------------- ------------- ----------------------
<S> <C> <C>
Leonard J. Saltiel (42) Vice President Vice President, Investment Operations, Phoenix Home Life Mutual Insurance
100 Bright Meadow Blvd. Company (1994-present). Senior Vice President, Phoenix Equity Planning
P.O. Box 2200 Corporation (1994-present). Vice President, Phoenix Funds (1994-present)
Enfield, CT 06083-2200 and National Securities & Research Corporation (1994-present). Various
positions with Home Life Insurance Company and Phoenix Home Life
Mutual Insurance Company (1987-1994).

Dorothy J. Skaret (43) Vice President Vice President, Phoenix Investment Counsel, Inc. (1991-present). Director,
Public Fixed Income, Phoenix Home Life Mutual Insurance Company
(1991-1995). Vice President, National Securities & Research Corporation
(1993-present), Phoenix Series Fund (1990-present), The Phoenix Edge
Series Fund (1991-present) and Phoenix Realty Securities, Inc.
(1995-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Various other positions with Phoenix Home Life Mutual
Insurance Company (1986-1991).

James D. Wehr (38) Vice President Vice President, Phoenix Investment Counsel, Inc. (1991-present).
Managing Director, Public Fixed Income, Phoenix Home Life Mutual
Insurance Company (1991-1995). Vice President, National Securities &
Research Corporation (1993-present), Phoenix California Tax Exempt Bond
Fund Inc., (1993-present), Phoenix Multi-Portfolio Fund (1988-present),
Phoenix Series Fund (1990-present) and Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Various other positions with Phoenix Home
Life Mutual Insurance Company (1981-1991).

Nancy G. Curtiss (43) Treasurer Second Vice President and Treasurer, Fund Accounting, Phoenix Home Life
Mutual Insurance Company (1994-present). Treasurer, Phoenix Funds
(1994-present). Vice President, Fund Accounting, Phoenix Equity Planning
Corporation (1994-present). Treasurer, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Various positions with Phoenix Home Life
Insurance Company (1987-1994).

G. Jeffrey Bohne (48) Secretary Vice President and General Manager, Phoenix Home Life Mutual Insurance
101 Munson Street Company (1993-present). Vice President, Home Life of New York Insurance
Greenfield, MA 01301 Company (1984-1992). Vice President, Transfer Agent Operations, Phoenix
Equity Planning Corporation (1993-present). Secretary, the Phoenix Funds,
(1993-present) and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present).
</TABLE>

No person listed in the foregoing table has any immediate family
relationship with any other person listed in the table.

At December 31, 1995, the Trustees and officers as a group owned none of the
then outstanding shares of the Fund.

For services rendered to the Fund during the fiscal year ended December
31, 1995, the Trustees received an aggregate of $92,543 from the Fund as
Trustees' fees. For his services on the Boards of the Phoenix Funds, each
Trustee who is not a full-time employee of the Advisers or any of its affiliates
currently receives a retainer at the annual rate of $36,000 and $2,000 per joint
meeting of the Boards. Each Trustee who serves on the Audit Committee receives a
retainer at the annual rate of $2,000 and $2,000 per joint Audit Committee
meeting attended. The current members of the Audit Committee are Messrs. Blinn,
Conway, Oates, Roth, Segerson and Weicker. Each Trustee who serves on the
Executive Committee and who is not an interested person of the Fund receives a
retainer at the annual rate of $1,000 and $1,000 per joint Executive Committee
meeting attended. The current members of the Executive Committee are Messrs.
Conway, McLoughlin and Roth. Trustee costs are allocated equally to each of the
Series of the Funds within the Fund complex. The foregoing fees do not include
the reimbursement of expenses incurred in connection with meeting attendance.
Trustees and officers are compensated for their services by Phoenix and
receive no compensation from the Fund.

<PAGE>

For the Fund's last fiscal year, the Trustees received the following
compensation:

<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL FROM FUND AND
COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
NAME FROM FUND FUND EXPENSES RETIREMENT PAID TO TRUSTEES
---- --------- ------------- ---------- ----------------
<S> <C> <C> <C> <C>
C. Duane Blinn $11,825* $47,500
Robert Chesek $10,558 $42,750
E. Virgil Conway $13,223 $53,500
Harry Dalzell-Payne $11,008 None for None for $44,500
Leroy Keith, Jr. $10,488 any Trustee any Trustee $42,500
Philip R. McLoughlin $0 $0
James M. Oates $12,745 $51,500
Philip R. Reynolds $11,008 $44,500
Herbert Roth, Jr. $13,960* $56,500
Richard E. Segerson $12,745 $51,500
Lowell P. Weicker, Jr. $8,565 $34,500

</TABLE>

* This compensation (and the earnings thereon) was deferred to the Trustees
Deferred Compensation Plan.

THE INVESTMENT ADVISERS
- -------------------------------------------------------------------------------

The Fund has entered into Investment Advisory Agreements ("Agreements") with
Phoenix Investment Counsel, Inc. ("PIC"), Phoenix Realty Securities ("PRS") and
Phoenix-Aberdeen International, LLC ("PAIA") whose offices are located in
Hartford, Connecticut.

Phoenix is in the business of writing ordinary and group life and health
insurance and annuities. At December 31, 1995, Phoenix had total assets of
approximately $13.2 billion. PHL Variable writes variable annuities, and at
December 31, 1995 had total assets of approximately $34.6 million. Phoenix
Equity Planning Corporation ("PEPCO") performs bookkeeping and pricing and
administrative services for the Fund. It also provides bookkeeping and pricing
services to other investment companies advised by PIC and PRS. PEPCO is
registered as a broker-dealer in 50 states. The executive offices of Phoenix
and PAIA are located at One American Row, Hartford, Connecticut 06102 and the
principal offices of Equity Planning are located at 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, Connecticut 06083-2200.

All of the outstanding stock of PIC is owned by PEPCO, an indirect
subsidiary of Phoenix Duff & Phelps Corporation of Chicago, Illinois. Phoenix
of Hartford, Connecticut owns a majority interest in Phoenix Duff & Phelps
Corporation.

PRS was formed in 1994 as an indirect subsidiary of Phoenix. ABKB/LaSalle
Securities Limited Partnership (ABKB), a subsidiary of LaSalle Partners, serves
as subadviser to the Real Estate Series. ABKB's principal place of business is
located at 100 East Pratt Street, Baltimore, Maryland 21202. ABKB has been a
registered investment advisor since 1979.

PAIA, a Delaware limited liability company formed in 1996 and jointly owned
and managed by PM Holdings, Inc, is a direct subsidiary of Phoenix and Aberdeen
Fund Managers, Inc., a wholly-owned subsidiary of Aberdeen Trust plc. Aberdeen
Fund Managers, Inc. has its principal offices located at 1 Financial Plaza,
Suite 2210, NationsBank Tower, Fort Lauderdale, Florida 33394. While many of the
officers and directors of the Adviser have extensive experience as investment
professionals, due to its recent formation, the Adviser has no prior operating
history.

Aberdeen Trust was founded in 1983 and through subsidiaries operating from
offices in Aberdeen, Scotland; London, England; Singapore and Fort Lauderdale,
Florida, provides investment management services to unit and investment trusts,
segregated pension funds and other institutional and private portfolios. As of
September 30, 1995, Aberdeen Trust, and its advisory subsidiaries, had
approximately $4 billion in assets under management.

The Agreements provide that each Adviser shall furnish continuously, at its
own expense, an investment program for each of the Series, subject at all times
to the supervision of the Trustees. They also provide that all costs and
expenses not specifically enumerated as payable by the Advisers shall be paid by
the Fund or by Phoenix and PHL Variable. The Advisers or Phoenix and PHL
Variable have agreed to reimburse the Fund for certain operating expenses for
all Series. Each Series (except the International, Real Estate, Strategic Theme
and Asia Series) pays a portion or all of its total operating expenses other
than the management fee, up to .15% of its total net assets. The International,
Real Estate, Strategic Theme and Asia Series pay total operating expenses other
than the management fee up to .40%, .25%, .25% and .25%, respectively, of its
total net assets. Expenses above these limits are paid by the Advisers, Phoenix
or PHL Variable.

To the extent that any expenses are paid by the Fund, they will be paid by
the Series incurring them or, in the case of general expenses, may be charged
among the Series in relation to the benefits received by the shareholders, as
determined by the financial agent under the supervision of the Board of
Trustees. Such expenses shall include, but shall not be limited to, all expenses
(other than those specifically referred to as being borne by the Advisers,
Phoenix or PHL Variable) incurred in the operation of the Fund and any offering
of its shares, including, among others, interest, taxes, brokerage fees and
commissions, fees of Trustees, expenses of Trustees' and shareholders' meetings
including the cost of printing and mailing

<PAGE>

proxies, expenses of insurance premiums for fidelity and other coverage,
expenses of repurchase and redemption of shares, certain expenses of issue and
sale of shares, association membership dues, charges of custodians, transfer
agents, dividend disbursing agents and financial agents, bookkeeping, auditing
and legal expenses. The Fund, Phoenix or PHL Variable also will pay the fees and
bear the expense of registering and maintaining the registration of the Fund and
its shares with the Securities and Exchange Commission and registering or
qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders.

The Investment Advisory Agreements provide that the Advisers shall not be
liable to the Fund or to any shareholder of the Fund for any error of
judgement or mistake of law or for any loss suffered by the Fund or by any
shareholder of the Fund in connection with the matters to which the Investment
Advisory Agreements relate, except a loss resulting from willful misfeasance,
bad faith, gross negligence or reckless disregard on the part of the Advisers in
the performance of its duties thereunder.

The Investment Advisory Agreements also provide that, as full compensation
for the services and facilities furnished to the Fund, the Advisers shall be
compensated as follows: within five days after the end of each month, the Fund
shall pay the Advisers the following fees:

PHOENIX INVESTMENT COUNSEL, INC.

PHOENIX REALTY SECURITIES, INC.

RATE FOR
RATE FOR FIRST RATE FOR NEXT EXCESS OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate..... .75% .70% .65%

PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC

SERIES
- ------
Asia............ 1.00%

The amounts payable to the Advisers shall be based upon the average of the
values of the net assets of the Fund as of the close of business each day.
There can be no assurance that the Fund will reach a net asset level high
enough to realize a reduction in the rate of the advisory fee.

The Investment Advisory Agreements continue in force from year to year for
all Series, provided that, with respect to each Series, the applicable agreement
must be approved at least annually by the Trustees or by vote of a majority of
the outstanding voting securities of that Series. In addition, and in either
event, the terms of the agreements and any renewal thereof must be approved by
the vote of a majority of Trustees who are not parties to the agreement or
interested persons (as that term is defined in the Investment Company Act of
1940) of any such party, cast in person at a meeting called for the purpose of
voting on such approval. The agreements will terminate automatically if assigned
and may be terminated at any time, without payment of any penalty, either by the
Fund or by the Advisers, on sixty (60) days written notice.

BROKERAGE ALLOCATION
- --------------------------------------------------------------------------------

In effecting portfolio transactions for the Fund, the Advisers and ABKB,
as subadviser to the Real Estate Series, adhere to the Fund's policy of
seeking best execution and price, determined as described below, except to the
extent it is permitted to pay higher brokerage commissions for "brokerage and
research services" as defined herein. The Advisers may cause the Fund to pay
a broker an amount of commission for effecting a securities transaction in
excess of the amount of commission which another broker or dealer would have
charged for effecting the transaction, if the Advisers determine in good faith
that such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker. As provided in Section
28(e) of the Securities Exchange Act of 1934, "brokerage and research services"
include giving advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities; furnishing analyses and reports concerning issuers, industries,
economic factors and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Brokerage and research services
provided by brokers to the Fund, the Advisers are considered to be in addition
to and not in lieu of services required to be performed by the Advisers under
their contracts with the Fund under their contracts with the Advisers and may
benefit both the Fund and other clients of the Advisers. Conversely, brokerage
and research services provided by brokers to other clients of the Advisers may
benefit the Fund.

If the securities in which a particular Series of the Fund invests are
traded primarily in the over-the-counter market, where possible the Series will
deal directly with the dealers who make a market in the securities involved
unless better prices and execution are available elsewhere. Such dealers usually
act as principals for their own account. On occasion, securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.

The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any commissions
and other costs paid), the efficiency with which the transaction is effected,
the ability to effect the transaction at all where a large block is involved,
the availability of the broker to stand ready to execute possibly difficult
transactions in the future and the financial strength and stability of the
broker. Such considerations are judgmental and are weighed by the Advisers in
determining the overall reasonableness of brokerage commissions paid by the
Fund.

<PAGE>

For the fiscal years ended December 31, 1993, 1994, and 1995 brokerage
commissions paid by the Fund on portfolio transactions totaled $2,530,449,
$4,360,577 and $5,452,277, respectively. The Trustees of the Fund, including a
majority of disinterested Trustees, have adopted procedures which allow the
Advisers to allocate a portion of the Fund's portfolio brokerage transactions
to brokers affiliated with the Fund or Adviser, including, without limitation,
Duff & Phelps Securities Co., an affiliate of Phoenix Investment Counsel, Inc.
In order for affiliated brokers to effect any portfolio transactions for the
Fund, the commissions, fees, or other remuneration received by such brokers must
be reasonable and fair compared to the commissions, fees or other remuneration
paid to other non-affiliated brokers in connection with comparable transactions
involving similar securities being purchased or sold on a securities exchange
during a comparable period of time. None of such commissions was paid to a
broker who was an affiliated person of the Fund or an affiliated person of
such a person or, to the knowledge of the Fund, to broker an affiliated person
of which was an affiliated person of the Fund or the Adviser. Total brokerage
commissions paid during the fiscal year ended December 31, 1995 included
brokerage commissions of $5,360,926 on portfolio transactions aggregating
$3,403,042,755 executed by brokers who provided research and other statistical
and factual information.

Investment decisions for the Fund are made independently from those of the
other investment companies or accounts advised by the Advisers. It may
frequently happen that the same security is held in the portfolio of more than
one fund. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same security is
suited for the investment objectives of more than one fund. When two or more
funds advised by the Advisers are simultaneously engaged in the purchase or sale
of the same security, the transactions are allocated among the Funds in a manner
equitable to each fund. It is recognized that in some cases this system could
have a detrimental effect on the price or volume of the security as far as the
Fund is concerned. In other cases, however, it is believed that the ability of
the Fund to participate in volume transactions will produce better executions
for the Fund. It is the opinion of the Board of Trustees of the Fund that
the desirability of utilizing the Advisers as investment advisers to the Fund
as manager of foreign securities owned by the Fund outweighs the disadvantages
that may be said to exist from simultaneous transactions.

DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------

The net asset value is the redemption price for a share. As described in
more detail in the Prospectus, the net asset value of shares of the Fund is
determined once daily as of the close of trading on the New York Stock Exchange
on each day the Exchange is open for trading or any other day on which there is
a sufficient degree of trading in the investments of any Series that the current
net asset value of such Series might be materially affected. Securities
primarily traded on foreign securities exchanges generally are valued at the
preceding closing values on their respective exchanges.

GROWTH, MULTI-SECTOR, TOTAL RETURN, BALANCED, INTERNATIONAL, REAL ESTATE,
STRATEGIC THEME AND ASIA SERIES
In determining the value of the assets of the Growth, Multi-Sector, Total
Return, Balanced, International, Real Estate, Strategic Theme and Asia Series,
the securities for which market quotations are readily available are valued at
market value, which is currently determined using the last reported sale price,
or, if no sales are reported, as is the case with many securities traded
over-the-counter, the last reported bid price. Debt securities (other than
short-term obligations, which are valued on the basis of amortized cost as
defined below) are normally valued on the basis of 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 institutional-size trading in similar groups of securities, yield,
quality of issue, trading characteristics and other market data. Equity options
are valued at last sale price unless the bid price is higher or the asked price
is lower, in which event such bid or asked price is used. Exchange traded fixed
income options are valued at the last sale price unless there is no sale price,
in which event current prices provided by market makers are used.
Over-the-Counter fixed income options are valued based upon current prices
provided by market makers. Financial futures are valued at the settlement price
established each day by the board of trade or exchange on which they are traded.
All other securities and assets are valued at their fair value as determined in
good faith by the Trustees although the actual calculations are normally made by
persons acting pursuant to the direction of the Trustees.

Because of the need to obtain prices as of the close of trading on various
exchanges throughout the world, the calculation of net asset value does not take
place for the International and Asia Series contemporaneously with the
determination of the prices of the majority of the portfolio securities of the
Series. For purposes of determining the net asset value of the International and
Asia Series, all assets and liabilities initially expressed in foreign currency
values will be converted into United States dollar values at the mean between
the bid and offered quotations of such currencies against United States dollars
as last quoted by any recognized dealer. If an event were to occur after the
value of an investment was so established but before the net asset value per
share was determined which was likely to materially change the net asset value,
then the instrument would be valued using fair value considerations by the
Trustees or their delegates.

MONEY MARKET SERIES
The securities of the Money Market Series are valued on the basis of
amortized cost absent extraordinary or unusual market conditions. Under the
amortized cost method of valuation, securities are valued at cost on the date of
purchase. Thereafter, the value of a security is increased or decreased
incrementally each day so that at maturity any purchase discount or premium is
fully amortized and the value of the security is equal to its principal amount.
Due to fluctuations in interest rates, the amortized cost value of the Money
Market Series securities may at times be more or less than their market value.
By using amortized cost valuation the Money Market Series seeks to maintain a
constant net asset value of $1.00 per share despite minor shifts in the market
value of its portfolio securities.

<PAGE>

The yield on a shareholder's investment may be more or less than that which
would be recognized if the Series' net asset value per share was not constant
and was permitted to fluctuate with the market value of the Series' portfolio
securities. However, as a result of the following procedures, it is believed
that any difference normally will be minimal. The deviation is monitored
periodically by comparing the Series net asset value per share as determined by
using available market quotations with its net asset value per share as
determined through the use of the amortized cost method of valuation. The
Adviser makes such comparisons at least weekly under the direction of the
Trustees and will promptly advise the Trustees in the event of any significant
deviation. If the deviation exceeds 1/2 of 1%, the Trustees will consider what
action, if any, should be initiated to provide fair valuation of the Series'
portfolio securities and prevent material dilution or other unfair results to
shareholders. Such action may include redemption of shares in kind, selling
portfolio securities prior to maturity, withholding dividends or utilizing a net
asset value per share as determined by using available market quotations.
Furthermore, the assets of the Series will not be invested in any security with
a maturity of greater than 397 days, and the average weighted maturity of its
portfolio will not exceed 90 days. Portfolio investments will be limited to U.S.
dollar-denominated securities which present minimal credit risks and are of high
quality as determined either by a major rating service or, if not rated, by the
Trustees.

INVESTING IN THE FUND
- --------------------------------------------------------------------------------

Shares of the Fund are not available to the public directly. Although
shares of the Fund are owned by the Accounts, Contract Owners and
Policyowners do have voting rights with respect to those shares, as described in
the Prospectus under "Shares of Beneficial Interest." You may invest in the
Fund by buying a Variable Accumulation Annuity Contract or a Variable Universal
Life Insurance Policy from Phoenix or PHL Variable and directing the
allocation of the net purchase payment(s) to the Sub-accounts corresponding to
the Series of the Fund. Phoenix and PHL Variable will, in turn, invest
payments in shares of the Fund as the investor directs at net asset value next
determined with no sales load.

SALES CHARGE AND SURRENDER CHARGES

The Fund does not assess any sales charge, either when it sells or when it
redeems securities. The sales charges which may be assessed under the Contracts
or Policies are described in the accompanying prospectus, as are other charges.

REDEMPTION OF SHARES
- --------------------------------------------------------------------------------

The Fund will redeem any shares presented by the shareholder Accounts for
redemption. The Account's policies on when and whether to buy or redeem Fund
shares are described in the accompanying prospectus.

At the discretion of the Trustees, the Fund may, to the extent consistent
with state and Federal law, make payment for shares of a particular Series
repurchased or redeemed in whole or in part in securities or other assets of
such Series taken at current values. Should payment be made in securities, the
shareholder Accounts may incur brokerage costs in converting such securities to
cash.

The right of redemption may only be suspended or the payment date postponed
for more than seven days for any period during which trading on the New York
Stock Exchange is closed for other than customary weekend and holiday closings,
or when trading on the New York Stock Exchange is restricted, as determined by
the Securities and Exchange Commission, for any period when an emergency (as
defined by rules of the Commission) exists, or during any period when the
Commission has, by order, permitted such suspension. In case of a suspension of
the right of redemption, the shareholders may withdraw requests for redemption
of shares prior to the next determination of net asset value after the
suspension has been terminated or they will receive payment of the net asset
value so determined.

The shareholder Accounts may receive more or less than was paid for the
shares, depending on the net asset value of the shares at the time they are
repurchased or redeemed.

TAXES
- --------------------------------------------------------------------------------

As stated in the Prospectus, it will be the policy of the Fund and of each
Series to comply with those provisions of the Internal Revenue Code of 1986, as
amended, ("Code") which relieve investment companies that distribute
substantially all of their net income from Federal income tax on the amounts
distributed. The Fund also intends to comply with pertinent Code provisions in
order to avoid imposition of any Federal excise tax. Dividends derived from
interest and distributions of any realized capital gains are taxable, under
Subchapter M, to the Fund's Shareholders, which in this case are the Accounts.

Federal income taxation of separate accounts, life insurance companies, and
unit investment trusts are discussed in the accompanying prospectus for the
Account.

CUSTODIAN
- --------------------------------------------------------------------------------

The securities and cash of all Series except the International, Asia and
Real Estate Series are held by The Chase Manhattan Bank, N.A. under the terms of
a custodian agreement. The securities and cash of the International and Asia
Series are held by Brown Brothers Harriman & Co. under the terms of a custodian
agreement. With respect to the International Series, the address for the
Custodian is Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department. The securities
and cash of the Real Estate Series are held by State Street Bank and Trust
Company, located at 1 Heritage Drive, P2N, North Quincy, Massachusetts 02171.
With respect to Series other than the International and Real Estate Series, the
address for the Custodian is The Chase Manhattan Bank, N.A., 1 Chase Manhattan
Plaza, Floor 13B, New York, NY 10081. The Fund permits the Custodian to
deposit some or all of its securities in central depository systems as allowed
by Federal law. The use of foreign custodians and foreign central depositories
has been authorized by the Board of Trustees of the Fund if certain conditions
are met.

FOREIGN CUSTODIAN

The Fund may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of a
foreign custodian. The amount of cash or

<PAGE>

cash equivalents maintained in the care of eligible foreign custodians will be
limited to an amount reasonably necessary to effect the Fund's foreign
securities transactions. The use of a foreign custodian involves considerations
which are not ordinarily associated with domestic custodians. These
considerations include the possibility of expropriations, restricted access to
books and records of the foreign custodian, inability to recover assets that are
lost while under the control of the foreign custodian, and the impact of
political, social or diplomatic developments.

INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

The Fund's financial statements are audited by Price Waterhouse LLP, 160
Federal Street, Boston, Massachusetts 02110, independent accountants for the
Fund. The independent accountants also provide other accounting and tax-related
services as requested by the Fund from time to time.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The financial statements and the notes thereto relating to the Fund and
the report of Price Waterhouse LLP with respect thereto for the fiscal year
ended December 31, 1995 are contained in the Fund's Annual Report. The Annual
Report is available by writing or calling Variable Products Operations at 101
Munson Street, P.O. Box 942, Greenfield, Massachusetts 01302-0942, (800)
447-4312. Phoenix and PHL Variable have agreed to send a copy of both the
Annual Report and the Semi-Annual Report to Shareholders containing the Fund's
financial statements to every Contract Owner or Policyowner having an interest
in the Accounts. The Annual Report for the fiscal period ended December 31, 1995
is included in this Statement of Additional Information.

<PAGE>

THE PHOENIX EDGE SERIES FUND
PART C--OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
1. Condensed Financial Information is included in Part A of
the Registration Statement.

2. Financial Statements and Notes, thereto, and reports of
Independent Accountants are included in the Annual Report
to Shareholders for the year ended December 31, 1995,
incorporated by reference.
(b) Exhibits:
1. Declaration of Trust of the Registrant dated February 18,
1986, filed with the Registration Statement on Form N-1A on
April 18, 1986 and filed via Edgar herewith.
1.1 Amendment to Declaration of Trust, establishing the
International Series, filed with Post-Effective Amendment
No. 7 on March 2, 1992.
1.2 Amendment to Declaration of Trust, conforming the Fund's
borrowing restrictions to California Department's Borrowing
Guidelines, filed with Post-Effective Amendment No. 7 on
March 2, 1992.
1.3 Amendment to Declaration of Trust, establishing the Balanced
Series, filed with Post-Effective Amendment No. 8 on April
28, 1992.
1.4 Amendment to Declaration of Trust, establishing the Real
Estate Securities Series, filed with Post-Effective
Amendment No. 12 on February 16, 1995.
1.5 Amendment to Declaration of Trust, establishing the
Strategic Theme Series, filed with Post-Effective Amendment
No. 16 on January 29, 1995.
1.6 Amendment to Declaration of Trust, changing the name of the
Series currently designated "Bond Series" to the "Multi-
Sector Fixed Income Series," filed via Edgar with Post-
Effective Amendment No. 17 on April 17, 1996.
1.7 Amendment to Declaration of Trust, establishing the Aberdeen
New Asia Series, to be filed by amendment.

2. Not Applicable.
3. Not Applicable.
4. Not Applicable.
5. Form of Investment Advisory Agreement between Registrant
and Phoenix Investment Counsel, Inc. covering the Balanced,
Bond, Growth, Money Market, Total Return and International
Series, filed with Post-Effective Amendment No. 11 on
May 2, 1994.
5.1 Form of Investment Advisory Agreement between Registrant
and Phoenix Realty Securities, Inc. covering the Phoenix
Real Estate Securities Series, filed with Post-Effective
Amendment No. 13, on April 28, 1995.
5.2 Form of Subadvisory Agreement among the Registrant, Phoenix
Realty Securities, Inc. and ABKB/LaSalle Partners Limited
Partnership, covering the Phoenix Real Estate Securities
Series, filed with Post-Effective Amendment No. 13 on April
28, 1995.

5.3 Form of Investment Advisory Agreement between Registrant
and Phoenix-Aberdeen International Advisors, LLC covering
the Aberdeen New Asia Series, filed via Edgar herewith.

6. Not Applicable.
7. Not Applicable.
8. Form of Custodian Agreement between Registrant and The
Chase Manhattan Bank, N.A. covering the International
Series, filed with Post-Effective Amendment No. 4 on March
13, 1990.
8.1 Form of Amendment to Custodian Agreement covering
International, Money Market, Growth, Bond, Total Return and
Balanced Series, filed with Post-Effective Amendment No. 7
on March 2, 1992.
8.2 Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. covering the International Series, filed with
Post-Effective Amendment No. 12 on February 16, 1995.
8.3 Form of Custodian Agreement between Registrant and State
Street Bank and Trust Company covering the Real Estate
Securities Series, filed with Post-Effective Amendment No.
12 on February 16, 1995.

9.1 Form of Transfer Agency Agreement, filed with original
Registration Statement on Form N-1A on April 18, 1986.

C-1
<PAGE>

9.2 Form of Financial Agent Agreement, filed with Post-Effective
Amendment No. 16 on January 29, 1995.

10. Opinion and Consent of Counsel covering shares of the
International, Bond, Growth, Money Market, Balanced and
Total Return Series, filed with Post-Effective Amendment
No. 7 on March 2, 1992.
10.1 Opinion and Consent of Counsel covering shares of the Real
Estate Securities Series, filed with Post-Effective
Amendment No. 13 on April 28, 1995.
10.2 Opinion and Consent of Counsel covering shares of the
Strategic Theme Series, filed with Post-Effective Amendment
No. 16 on January 29, 1995.

10.3 Opinion and Consent of Counsel covering shares of the
Aberdeen New Asia Series, to be filed by amendment.
11. Written Consent of Price Waterhouse LLP, to be filed by
amendment.

12. Not Applicable.
13. Not Applicable.
14. Not Applicable.
15. Not Applicable.
16. Not Applicable.

17. Financial Data Schedule filed via Edgar with Post-Effective
Amendment No. 17 on April 17, 1996 and reflected on Edgar
as Exhibit 27.
18. Powers of Attorney, filed via Edgar with Post-Effective
Amendment No. 17 on April 17, 1996.

- ---------------------

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

[GRAPHIC OMITTED]

The following diagram illustrates the Registrant's place in the
organizational structure:

C-2

<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES

NUMBER OF RECORD HOLDERS

TITLE OF CLASS AS OF SEPTEMBER 1, 1996
- --------------- -----------------------
Multi-Sector Series 3
Money Market Series* 3
Growth Series 6
Total Return Series 3
Balanced Series 3
International Series 3
Real Estate Series 4
Strategic Theme Series 4
Aberdeen New Asia Series 4

- ---------------------

*Phoenix Mutual purchased 1 share of the Money Market Series at a price of
$10.00 per share on February 18, 1986.

ITEM 27. INDEMNIFICATION

The Declaration of Trust provides that the Fund shall indemnify each of
its Trustees and officers against liabilities arising by reason of being or
having been a Trustee or officer, except for matters as to which such Trustee or
officer shall have been finally adjudicated not to have acted in good faith and
except for liabilities arising by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of duties.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "Management of the Fund" in the Prospectus and "Management of the
Fund" in the Statement of Additional Information for information regarding the
business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of the
Adviser, reference is made to the Adviser's current Form ADV (SEC File Nos.
801-5995 for Phoenix Investment Counsel Inc.; 801-8177 for National Securities
and Research Corporation; 801-____ for Phoenix-Aberdeen International Advisors,
LLC) filed under the Investment Advisers Act of 1940, incorporated herein by
reference.

ITEM 29. PRINCIPAL UNDERWRITERS

Not Applicable.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
and
101 Munson Street
P.O. Box 942
Greenfield, Massachusetts 01302-0942

ITEM 31. MANAGEMENT SERVICES

All management-related service contracts are discussed in Part A or B
of this Registration Statement.

ITEM 32. UNDERTAKINGS

(a) Not Applicable.

C-3
<PAGE>

(b) Registrant undertakes to file a post-effective amendment using
financial statements for the Aberdeen New Asia Series, which
need not be certified, within four to six months from the
effective date of this post-effective amendment to the
Registration Statement with respect to the Fund.

(c) The information called for by Item 5A of Form N-1A is contained
in the Fund's annual report to shareholders; accordingly, the
Fund hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Fund's latest annual
report, upon request and without charge.

(d) Registrant undertakes to provide the information specified
pursuant to Regulation S-K, Item 512 (Reg. Section 229.512), as
applicable, the terms of which are incorporated herein by
reference.

(e) Registrant undertakes to call a special meeting of shareholders
for the purpose of voting upon the question of removal of a
trustee or trustees and to assist in communications with other
shareholders, as required by Section 16(c) of the 1940 Act, if
requested to do so by holders of at least 10% of a Portfolio's
outstanding shares.

C-4

EXHIBIT 1

DECLARATION OF TRUST

<PAGE>

THE BIG EDGE SERIES FUND

PROVISIONS

DECLARATION OF TRUST

FEBRUARY 18, 1986

<PAGE>

TABLE OF CONTENTS

ARTICLE I NAME, RESIDENT AGENT AND DEFINITIONS............................... 5

Section 1.1 Name............................................................. 5
Section 1.2 Resident Agent................................................... 5
Section 1.3 Definitions...................................................... 5
(a) "Trust"......................................................... 5
(b) "Trustees"...................................................... 5
(c) "Shares"........................................................ 5
(d) "Series"........................................................ 5
(e) "Shareholder"................................................... 5
(f) "Investment Company Act"........................................ 5
(g) "Commission".................................................... 6
(h) "Declaration of Trust".......................................... 6
(i) "Vote of a Majority of the Outstanding Voting Securities"....... 6

ARTICLE II THE TRUSTEES...................................................... 6

Section 2.1 Number, Designation, Election, Term, etc......................... 6
(a) Number and Election............................................. 6
(b) Term............................................................ 6
(c) Resignation and Retirement...................................... 6
(d) Removal......................................................... 6
(e) Vacancies....................................................... 6
(f) Effect of Vacancy............................................... 7
(g) No Accounting................................................... 7
Section 2.2 Powers of Trustees............................................... 7
(a) Investments..................................................... 8
(b) Disposition of Assets........................................... 8
(c) Ownership Powers................................................ 8
(d) Subscription.................................................... 8
(e) Form of Holding................................................. 8
(f) Reorganization, etc............................................. 8
(g) Voting Trusts, etc.............................................. 9
(h) Compromise...................................................... 9
(j) Borrowing and Security.......................................... 9
(k) Insurance....................................................... 9

- 2 -

<PAGE>

Section 2.3 Action by Trustees............................................... 9
Section 2.4 Certain Contract................................................. 9
(a) Advisory........................................................10
(b) Administration..................................................10
(c) Financial Agency................................................10
(d) Distribution....................................................10
(e) Custodian.......................................................10
(f) Transfer Agency.................................................10
(g) Dividend Disbursing Agency......................................11
(h) Shareholder Servicing...........................................11
Section 2.5 Certain Conflicts of Interest....................................11
Section 2.6 Payment of Trust Expenses and Compensation of Trustees...........11
Section 2.7 Ownership of Assets of the Trust.................................12

ARTICLE III INVESTMENT POWERS AND RESTRICTIONS..............................12

Section 3.1 Investment Restrictions..........................................12
Section 3.2. Investment Objectives...........................................14
Section 3.3 Modification.....................................................14
Section 3.4 Other Investment Restrictions....................................14

ARTICLE IV SHARES............................................................14

Section 4.1 Description of Shares............................................15
Section 4.2 Establishment and Designation of Series..........................15
(a) Assets Belonging to Series......................................16
(b) Liabilities Belonging to Series.................................16
(c) Dividends.......................................................17
(d) Liquidation.....................................................17
(e) Shareholder Voting..............................................17
(f) Redemption by Shareholder.......................................17
(g) Repurchase......................................................18
(h) Redemption by Trust.............................................18
(i) Net Asset Value.................................................18
(j) Transfer........................................................18
(k) Equality........................................................18
(l) Fractions.......................................................18
(m) Exchange Privilege..............................................19
Section 4.3 Ownership of Shares..............................................19
Section 4.4 Investments in the Trust.........................................19

- 3 -

<PAGE>

Section 4.5 No Preemptive or Appraisal Rights................................19
Section 4.6 Status of Shares and Limitation of Personal Liability............19

ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS..........................20

Section 5.1 Voting Powers....................................................20
Section 5.2 Meetings.........................................................20
Section 5.3 Record Dates.....................................................20

Section 5.4 Quorum and Required Vote.........................................21
Section 5.5 Action by Written Consent........................................21
Section 5.6 Inspection of Records............................................21

ARTICLE VI LIMITATION OF LIABILITY: INDEMNIFICATION.........................21

Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.......21
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety....22
Section 6.3 Indemnification of Shareholders..................................22
Section 6.4 Indemnification of Trustees, Officers, etc.......................22
Section 6.5 Compromise Payment...............................................23
Section 6.6 Indemnification Not Exclusive, etc...............................23
Section 6.7 Liability of Third Persons Dealing with Trustees.................23

ARTICLE VII MISCELLANEOUS....................................................24

Section 7.1 Duration and Termination of Trust................................24
Section 7.2 Reorganization...................................................24
Section 7.3 Amendments.......................................................24
Section 7.4 Filing of Copies; References; Headings...........................25
Section 7.5 Applicable Law...................................................25

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AN AGREEMENT AND DECLARATION OF TRUST, herein called Declaration of
Trust, made at Boston, in The Commonwealth of Massachusetts on the eighteenth of
February by and between John Hand and Virginia Spencer, whose addresses are One
Post Office Square, Boston, Massachusetts, (hereinafter called the Trustees) and
such persons as may from time to time become Shareholders of this Trust by
purchasing or otherwise acquiring shares of beneficial interest issued
hereunder, is hereby adopted to read in its entirety as follows:

THE TRUSTEES hereby agree and declare that they will hold all cash,
securities, and other property which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in the Trust.

ARTICLE I
NAME, RESIDENT AGENT AND DEFINITIONS

SECTION 1.1 NAME. This Trust shall be known as "The Big Edge Series
Fund" and the Trustees shall conduct the business of the Trust under that name
or such other name as they may from time to time determine.

SECTION 1.2 RESIDENT AGENT. To the extent required, the Trustees shall
have power to appoint a resident agent for the Trust in The Commonwealth of
Massachusetts, and from time to time to replace the resident agent so appointed.

SECTION 1.3 DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:

(a) "Trust" refers to the Massachusetts business trust established
by this Agreement and Declaration of Trust, as amended from
time to time;

(b) "Trustees" refers to the Trustees of the Trust named herein
and their duly elected successors;

(c) "Shares" refers to the transferable units of interest into
which beneficial interest in the Trust or any Series of the
Trust (as the context may require) shall be divided from time
to time;

(d) "Series" refers to the Series of Shares established and
designated pursuant to the provisions of Article IV;

(e) "Shareholder" means a record owner of Shares;

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(f) The "Investment Company Act" refers to the Investment Company
Act of 1940 and the rules and regulations thereunder, all as
amended from time to time;

(g) The term "Commission" shall mean the Securities and Exchange
Commission;

(h) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;

(i) "Vote of a Majority of the Outstanding Voting Securities"
means the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares are
represented or (ii) more than 50% of the outstanding shares.

ARTICLE II
THE TRUSTEES

SECTION 2.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.

(a) NUMBER AND ELECTION. At each meeting for the purpose, the
Shareholders shall fix the number of Trustees, to serve until
the election and qualification of their successors, and shall
at such meeting elect the number of Trustees so fixed. The
Trustees serving as such may increase or decrease the number
of Trustees to a number other than the number theretofore
fixed. No decrease in the number of Trustees shall have the
effect of removing any Trustee from office prior to the
expiration of his term. However, the number of Trustees may
be decreased in conjunction with the removal of a Trustee
pursuant to subsection (d) of this Section 2.1.

(b) TERM. Each Trustee shall serve as a Trustee until the election
and qualification of his successor, or until such Trustee
sooner dies, resigns, retires or is removed.

(c) RESIGNATION AND RETIREMENT. Any Trustee may resign his trust
or retire as a Trustee, by written instrument signed by him
and delivered to the remaining Trustees or to any officer of
the Trust. Such resignation or retirement shall take effect
upon such delivery or upon such later date as is specified in
such instrument.

(d) REMOVAL. Any Trustee may be removed with or without cause at
any time either by written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal,
specifying the date upon which such removal shall become
effective, or by the Shareholders at any meeting called for
the purpose.

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(e) VACANCIES. Any vacancy resulting from any reason, including
without limitation the death, resignation, retirement,
removal or incapacity of any of the Trustees, or resulting
from an increase in the number of Trustees by the Trustees,
may be filled by a majority of the remaining Trustees through
the appointment in writing of a successor Trustee to hold
office until the election and qualification of his successor,
provided that immediately after filling any such vacancy at
least two-thirds (2/3) of the Trustees then holding office
shall have been elected to such office by the Shareholders at
a meeting for the purpose. Such appointment of a successor
Trustee shall be effective upon the written acceptance of the
person named therein to serve as a Trustee and written
agreement by such person to be bound by the provisions of
this Declaration of Trust whereupon the Trust estate shall
vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.

(f) EFFECT OF VACANCY. The death, resignation, retirement,
removal or incapacity of the Trustees, or of any one of them,
shall not operate to annul or terminate the Trust or to
revoke or terminate any existing agency or contract created
or entered into pursuant to the terms of this Declaration of
Trust. During any vacancy a majority of the remaining
Trustees may exercise any and all of the powers of the
Trustees hereunder. The determination of a vacancy or
vacancies in the number of Trustees by reason of death,
resignation or disability when made by the remaining Trustees
and set forth in any instrument filling such vacancy or
vacancies shall be final and conclusive for all purposes.

(g) NO ACCOUNTING. Except to the extent required by the
Investment Company Act or under circumstances which would
justify his removal for cause, no person ceasing to be a
Trustee as a result of his death, resignation, retirement,
removal or incapacity (nor the estate of any such person)
shall be required to make an accounting to the Shareholders
or remaining Trustees upon such cessation.

SECTION 2.2 POWERS OF TRUSTEES. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility. Without limiting the foregoing, the Trustees may adopt
By-Laws not inconsistent with this Declaration of Trust providing for the
conduct of the business and affairs of the Trust and may amend and repeal them
to the extent that such By-Laws do not reserve the right to the Shareholders;
they may, as they consider appropriate, elect and remove officers, appoint and
terminate agents and consultants, and hire and terminate employees, any one or
more of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing; they may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including without implied limitation an executive committee, which may, when the
Trustees are not in session and subject to the provisions of the Investment

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Company Act, exercise some or all of the power and authority of the Trustees as
the Trustees may determine; in accordance with Section 2.4 they may retain one
or more advisers, administrators, financial agents and custodians and may
authorize any such custodian to employ sub-custodians or agents and to deposit
all or any part of the Trust's assets in a system or systems for the central
handling of securities and debt instruments, retain one or more transfer,
dividend, accounting or Shareholder servicing agents, provide for the
distribution of Shares by the Trust through one or more distributors, principal
underwriters or otherwise, set record dates of times for the determination of
Shareholders or certain of them with respect to various matters; they may
compensate or provide for the compensation of the Trustees, officers, advisers,
administrators, financial agents, custodians, other agents, consultants and
employees of the Trust or the Trustees on such terms as they deem appropriate;
and in general they may delegate to any officer of the Trust, to any committee
of the Trustees and to any employee, adviser, administrator, distributor,
financial agent, custodian, transfer agent, dividend disbursing agent, or any
other agent or consultant of the Trust such authority, powers, functions and
duties as they consider desirable or appropriate for the conduct of the business
and affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.

Without limiting the foregoing but subject to the limitations set forth
in Article III and to the extent not inconsistent with the Investment Company
Act or other applicable law, the Trustees shall have the power and authority:

(a) INVESTMENTS. To invest and reinvest from time to time cash and
other assets of the Trust in any type or class of security or
debt instrument including Shares of Series established
pursuant to the terms of this Declaration of Trust; and to
hold cash or other assets of the Trust uninvested in whole or
in part without in any event being bound or limited by any
present or future law, rule of court or custom in regard to
investments by trustees;

(b) DISPOSITION OF ASSETS. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all
of the assets of the Trust;

(c) OWNERSHIP POWERS. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other
securities, debt instruments or property ownership, and to
execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting
to such person or persons such power and discretion with
respect to securities, debt instruments or property as the
Trustees shall deem proper;

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(d) SUBSCRIPTION. To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities or debt instruments;

(e) FORM OF HOLDING. Subject to the provisions of Section 2.7, to
hold any security, debt instrument or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the
Trust or in the name of a custodian, sub-custodian or other
depository or a nominee or nominees or otherwise;

(f) REORGANIZATION, ETC. To consent to or participate in any plan
for the reorganization, consolidation or merger of any
corporation or issuer, any security or debt instrument of
which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with
respect to any security or debt instrument held in the Trust;

(g) VOTING TRUSTS, ETC. To join with other holders of any
securities or debt instruments in acting through a committee,
depositary, voting trustee or otherwise, and in that
connection to deposit any security or debt instrument with,
or transfer any security or debt instrument to, any such
committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security or
debt instrument (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and
to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem
proper.

(h) COMPROMISE. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;

(i) PARTNERSHIPS, ETC. To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;

(j) BORROWING AND SECURITY. To borrow funds and to mortgage and
pledge the assets of the Trust or any part thereof to secure
obligations arising in connection with such borrowing; and

(k) INSURANCE. To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including,
without limitation, insurance covering each officer and
employee of the Trust against larceny and embezzlement and
insurance covering each Trustee with respect to any errors or
omissions which may be committed or omitted by such Trustee.

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SECTION 2.3 ACTION BY TRUSTEES. Except as otherwise provided by the
Investment Company Act or other applicable law or this Declaration of Trust, any
action taken by the Trustees may be taken by a majority of the Trustees present
at a meeting of Trustees (a quorum, consisting of at least a majority of the
Trustees then in office, being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office.

SECTION 2.4 CERTAIN CONTRACTS. Subject to compliance with the
provisions of the Investment Company Act, but notwithstanding any limitations
of present and future law or custom in regard to delegation of powers by
trustees generally, the Trustees may, at any time and from time to time and
without limiting the generality of their powers and authority otherwise set
forth herein, enter into one or more contracts with any one or more
corporations, trusts, associations, partnerships, limited partnerships, other
types of organizations, or individuals ("Contracting Party") to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for or of the Trust and/or the Trustees, and to provide for
the performance and assumption of such other services, duties and
responsibilities in addition to those set forth below as the Trustees may
determine to be appropriate;

(a) ADVISORY. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with
respect to the investments of the Trust or of the assets
belonging to any Series, to manage such investments and
assets, to make investment decisions with respect thereto, and
to place purchase and sale orders for portfolio transactions
relating to such investments and assets;

(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees
with respect to the operations of the Trust, to provide all or
any part of the administrative and clerical personnel, office
space and office equipment and services appropriate for the
efficient administration and operation of the Trust;

(c) FINANCIAL AGENCY. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees
with respect to the operations of the Trust, to provide
financial and accounting services whether with respect to the
Trust's assets, or otherwise, including, but not limited to,
the preparation and supervision of the Trust's financial
statements and reports, bookkeeping services, pricing
services, periodic reports to Shareholders and others,
supporting schedules in connection with any audit of the
Trust's business or operations, and registration statements,
prospectuses and other documents required to be filed under
all applicable Federal

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and state laws and to provide many services involved in
registering and maintaining the registration of the Trust and
of its Shares with the Commission and registering or
qualifying its Shares under state or other securities laws or
any services involved in preparing reports to Shareholders;

(d) DISTRIBUTION. To distribute the Shares of the Trust; to be
principal underwriter of such Shares or to act as agent of
the Trust in the sale of Shares and the acceptance or
rejection of orders for the purchase of Shares;

(e) CUSTODIAN. To maintain custody of the property of the Trust
and accounting records in connection therewith;

(f) TRANSFER AGENCY. To maintain records of the ownership of
outstanding Shares, the issuance and redemption and the
transfer thereof;

(g) DIVIDEND DISBURSING AGENCY. To disburse any dividends and
other distributions declared by the Trustees and in
accordance with the policies of the Trustees and/or the
instructions of any particular Shareholder to reinvest any
such dividends; and

(h) SHAREHOLDER SERVICING. To provide service with respect to the
relationship of the Trust and its Shareholders, records with
respect to Shareholders and their Shares, and similar
matters.

SECTION 2.5 CERTAIN CONFLICTS OF INTEREST. The same person may be the
Contracting Party for some or all of the services, duties and responsibilities
to, for and of the Trust and/or the Trustees, and the contracts with respect
thereto may contain such terms interpretive of or in addition to the delineation
of the services, duties and responsibilities provided for, including provisions
that are not inconsistent with the Investment Company Act relating to the
standard of duty of and the rights to indemnification of the Contracting Party
and others, as the Trustees may determine.

The fact that:

(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter, distributor
or agent of or for any Contracting Party, or of or for any
parent or affiliate of any Contracting Party, or that the
Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust, or that

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(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships or other organizations, or has other business or
interests

shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust and/or the
Trustees or disqualify any Shareholder, Trustee or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders, provided that in the case of any relationship or
interest referred to in the preceding clause (i) on the part of any Trustee or
officer of the Trust either (x) the material facts as to such relationship or
interest have been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good faith by
a majority of such Trustees not having such relationship or interest (even
though such unrelated or disinterested Trustees are less than a quorum of all
the Trustees), or (y) the material facts as to such relationship or interest and
as to the contract have been disclosed to or are known by the Shareholders
entitled to vote thereon and the contract involved is specifically approved in
good faith by vote of the Shareholders, and (z) the specific contract involved
is fair to the Trust as of the time authorized, approved or ratified by the
Trustees or by the Shareholders.

SECTION 2.6 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF TRUSTEES.
The Trustees are authorized to pay or to cause to be paid out of the principal
or income of the Trust, or partly out of principal and partly out of income, and
to charge or allocate the same to, between or among such one or more of the
Series that may be established and designated pursuant to Article IV, as the
Trustees deem fair, any or all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, adviser, administrator, financial agent, distributor, principal
underwriter, auditor, counsel, custodian, transfer agent, dividend disbursing
agent, Shareholder servicing agent, and such other agents, consultants, and
independent contractors and such other expenses and charges including
non-recurring expenses and other expenses which may be deemed extraordinary
expenses under all applicable Federal or State law, as the Trustees may deem
necessary or proper to incur. The expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust may be paid from sources other
than the Trust assets. Without limiting the generality of any other provision
hereof, the Trustees shall be entitled to reasonable compensation from the Trust
or from other sources that may be available for their services as Trustees.

SECTION 2.7 OWNERSHIP OF ASSETS OF THE TRUST. Notwithstanding the
provisions of subsection (e) of Section 2.2, title to all of the assets of the
Trust shall at all times be considered as vested in the Trustees as joint
tenants.

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ARTICLE III
INVESTMENT POWERS AND RESTRICTIONS

SECTION 3.1 INVESTMENT RESTRICTIONS. The following investment
restrictions are fundamental investment policies of the Trust, and may not be
altered except as provided in Section 3.3. The Trust may not:

1. Purchase real estate or any interest therein, except through the
purchase of corporate or certain government securities (including
securities secured by a mortgage or a leasehold interest or other
interest in real estate). A security issued by a real estate or
mortgage investment trust is not treated as an interest in real estate.

2. Make loans other than loans of securities secured by cash or cash
equivalents for the full value of the securities; any interest earned
from securities lending will inure to the benefit of the Series which
holds such securities. However, the purchase of debt securities which
are ordinarily purchased by financial institutions is not considered
the loaning of money.

3. Invest in commodities or in commodity contracts or in options,
provided, however, that it may write covered call option contracts; and
provided further, that the Total-Vest Series may enter into financial
futures contracts to purchase and sell debt obligations and may buy
call and put options on securities and stock market indexes.

4. Engage in the underwriting of securities of other issuers, except to
the extent any Series may be deemed an underwriter in selling as part
of an offering registered under the Securities Act of 1933 securities
which it has acquired.

5. Borrow money, except as a temporary measure where such borrowing would
not exceed 5% of the market value of total assets at the time each such
borrowing is made. The Trust may borrow money from a bank provided such
borrowing does not exceed 50% of the net asset value of the Trust, not
considering any such borrowings as liabilities. The Total-Vest Series
may borrow money to the extent of financial futures transactions
and reverse repurchase agreements, provided that such borrowings are
limited to 33 1/3% of the value of the total assets of the Total-Vest
Series.

6. Invest in restricted securities in an amount greater than 10% of the
value of any Series portfolio at the time any such investment is made.

7. Purchase securities on margin, except for short-term credits as may be
necessary for the clearance of purchases or sales of securities, or to
effect a short sale of any security. (The

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deposit of "maintenance margin" in connection with financial futures
contracts is not considered the purchase of a security on margin.)

8. Invest for the purpose of exercising control over or management of any
company.

9. Unless received as a dividend or as a result of an offer of exchange
approved by the Securities and Exchange Commission or of a plan of
reorganization, purchase or otherwise acquire any security issued by
an investment company if the Series would immediately thereafter own
(a) more than 3% of the outstanding voting stock of the investment
company, (b) securities of the investment company having an aggregate
value in excess of 5% of the Series' total assets, (c) securities of
investment companies having an aggregate value in excess of 10% of the
Series' total assets, or (d) together with investment companies having
the same investment adviser as the Trust (and companies controlled by
such investment companies), more than 10% of the outstanding voting
stock of any registered closed-end investment company.

10. (a) Invest more than 5% of its total assets (taken at market value at
the time of each investment) in the securities (other than United
States government or government agency securities), or, with respect
to the Total-Vest Series, call or put options contracts and financial
futures contracts of any one issuer (including repurchase agreements
with any one bank); and (b) purchase more than either (i) 10% in
principal amount of the outstanding debt securities of an issuer, or
(ii) 10% of the outstanding voting securities of an issuer, except
that such restrictions shall not apply to securities issued or
guaranteed by the United States government or its agencies, bank money
instruments or bank repurchase agreements.

11. Concentrate the portfolio investments in any one industry. No security
may be purchased for a Series if such purchase would cause the value of
the aggregate investment in any one industry to exceed 25% of the
Trust's total assets. However, the Money Market Series and Total-Vest
Series may invest more than 25% of their assets in the Banking
industry.

12. Issue senior securities.

13. Enter into repurchase agreements which would cause more than 10% of any
Series' total assets (taken at market value) to be subject to
repurchase agreements maturing in more than seven days.

SECTION 3.2. INVESTMENT OBJECTIVES. The investment objectives of each
of the Series shall be determined by the Trustees prior to the date shares of
such Series are offered to the public and each such investment objective shall
be a fundamental investment policy of the Trust with respect to such Series and
may not be altered except as provided in Section 3.3.

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SECTION 3.3 MODIFICATION. The fundamental investment policies of the
Trust as stated in this Article III may not be altered or amended without the
approval by a Vote of a Majority of the Outstanding Voting Securities of each
Series, except that any matter shall be deemed to have been effectively acted
upon with respect to any Series if approved by a Vote of a Majority of the
Outstanding Voting Securities of such Series, notwithstanding (a) that such
matter has not been approved by a Vote of a Majority of the Outstanding Voting
Securities of any other Series affected by such matter and (b) that such matter
has not been approved by a Vote of a Majority of the Outstanding Voting
Securities of the Trust.

SECTION 3.4 OTHER INVESTMENT RESTRICTIONS. The Trustees may from time
to time adopt other investment restrictions with respect to the Trust or any
Series of the Trust established and designated herein or established and
designated in accordance with Section 4.1 hereof. Such restrictions shall not be
fundamental investment policies of the Trust and may be altered or amended at
any time by action of the Trustees.

ARTICLE IV
SHARES

SECTION 4.1 DESCRIPTION OF SHARES. The beneficial interest in the Trust
shall be divided into an unlimited number of Shares, with a par value of one
dollar each. The Trustees shall have the authority from time to time to
establish and designate one or more Series of Shares (including without
limitation those Series specifically established and designated in Section 4.2),
as they deem necessary or desirable.

The Trustees may issue Shares of any Series for such consideration and
on such terms as they may determine (or for no consideration if pursuant to a
Share dividend or split), all without action or approval of the Shareholders.
All Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired of any Series into one or
more Series that may be established and designated from time to time. The
Trustees may hold as treasury Shares (of the same or some other Series), reissue
for such consideration and on such terms as they may determine, or cancel, at
their discretion from time to time, any Shares of any Series reacquired by the
Trust.

The Trustee may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred in Section
4.3.

The establishment and designation of any Series of Shares in addition
to those established and designated in Section 4.2 shall be effective upon the
execution by a majority of the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and preferences

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of such Series, or as otherwise provided in such instrument. At any time that
there are no Shares outstanding, of any particular Series previously established
and designated the Trustees may by an instrument executed by a majority of their
number abolish that Series and the establishment and designation thereof.

Any Trustee, officer or other agent of the Trust and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares of any Series of the Trust to the same extent as if such person were not
a Trustee, officer or other agent of the Trust or were not such an organization;
and the Trust may issue and sell or cause to be issued and sold and may purchase
Shares of any Series from any such person or any such organization subject only
to the general limitations, restrictions or other provisions applicable to the
sale or purchase of Shares of such Series generally.

SECTION 4.2 ESTABLISHMENT AND DESIGNATION OF SERIES. Without limiting
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Series, the following four Series are hereby established
and designated: "Bond Series", "Stock Series", "Total-Vest Series", and the
"Money Market Series".

Shares of each Series established and designated in this Section 4.2
and any Shares of any further Series that may from time to time be established
and designated by the Trustees shall (unless the Trustees otherwise determine
with respect to some further Series at the time of establishing and designating
the same) have the following relative rights and preferences:

(a) ASSETS BELONGING TO SERIES. All consideration received by
the Trust for the issue or sale of Shares of a particular
Series, together with all assets in which such consideration
is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of
creditors, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings,
profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any
General Items, as defined herein, allocated to that Series as
provided herein, are herein referred to as "assets belonging
to" that Series. In the event that there are any assets,
income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to
any particular Series (collectively "General Items"), the
Trustees shall allocate such General Items to and among any
one or more of the Series established and designated from time
to time in such manner and on such basis

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as they, in their sole discretion, deem fair and equitable;
and any General Items so allocated to a particular Series
shall belong to that Series. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.

(b) LIABILITIES BELONGING TO SERIES. The assets belonging to
each particular Series shall be charged with the liabilities
of the Trust in respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, and
any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series
established and designated from time to time in such manner
and on such basis as the Trustees in their sole discretion
deem fair and equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to a Series are
herein referred to as "liabilities belonging to" that Series.
Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon
the holders of all Series for all purposes. The Trustees shall
have full discretion, to the extent not inconsistent with the
Investment Company Act, to determine which items shall be
treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding
upon the Shareholders.

(c) DIVIDENDS. Dividends and distributions on Shares of a
particular Series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, to
the holders of Shares of that Series, from such of the income
and capital gains, accrued or realized, from the assets
belonging to that Series as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that
Series. All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the holders
of that Series in proportion to the number of Shares of that
Series held by such holders at the date and time of record
established for the payment of such dividends or
distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine
that no dividend or distribution shall be payable on Shares as
to which the Shareholder's purchase order and/or payment have
not been received by the time or times established by the
Trustees under such program or procedure. Such dividends and
distributions may be made in cash or Shares or a combination
thereof as determined by the Trustees or pursuant to any
program that the Trustees may have in effect at the time for
the election by each Shareholder of the mode of the making of
such dividend or distribution to that Shareholder. Any such
dividend or distribution

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paid in Shares will be paid at the net asset value thereof as
determined in accordance with subsection (i) of this Section
4.2.

(d) LIQUIDATION. In the event of the liquidation or
dissolution of the Trust or redemption of all of the Shares of
any Series, the Shareholders of each Series that has been
established and designated shall be entitled to receive, as a
Series, when and as declared by the Trustees, the excess of
the assets belonging to that Series over the liabilities
belonging to that Series. The assets so distributable to the
Shareholders of any Series shall be distributed among such
Shareholders in proportion to the number of shares of that
Series held by them and recorded on the books of the Trust.
The redemption of all the Shares of any particular Series may
be authorized by a vote of a majority of the Trustees then in
office subject to the approval of a Vote of a Majority of the
Outstanding Voting Securities of that Series.

(e) SHAREHOLDER VOTING. On each matter submitted to a vote of
the Shareholders, each holder of a Share shall be entitled to
one vote for each Share, and a proportionate vote for each
fractional Share, standing in his name on the books of the
Trust irrespective of the Series thereof and all Shares of all
Series shall vote as a single class ("Single Class Voting");
provided, however, that (a) as to any matter with respect to
which a separate vote of any Series is required, such
requirement as to a separate vote by that Series shall apply
in lieu of Single Class Voting as described above; (b) in the
event that the separate vote requirement referred to in (a)
above applies with respect to one or more Series, then,
subject to (c) below, the Shares of all Series entitled to
vote and to which the separate vote requirement referred to in
(a) above does not apply shall vote as a single class; and (c)
as to any matter which affects (within the meaning of Rule
18f-2 under the Investment Company Act) the interest of one or
more but not all Series, only the holders of Shares of the one
or more affected Series shall be entitled to vote.

(f) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Series, upon request to the Trust and compliance
with appropriate transfer requirements, shall be entitled to
require the Trust to redeem all or any part of the shares of
that Series standing in the name of such holder on the books
of Trust at a redemption price equal to the net asset value
per Share of that Series next determined in accordance with
subsection (i) of this Section 4.2 after the receipt in good
order of the request for redemption.

Notwithstanding the foregoing, the Trust may postpone payment
of the redemption price and may suspend the right of the
holders of shares of any Series to require the

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Trust to redeem Shares of that Series during any period or at
any time when and to the extent permissible under the
Investment Company Act.

(g) REPURCHASE. The Trust may maintain, or authorize its agent to
maintain, an offer to repurchase its outstanding Shares.
During any period when such an offer is being maintained, each
Share for which a repurchase order is received shall be
repurchased at a price equal to the net asset value per Share
next determined in accordance with subsection (i) of this
Section 4.2 after receipt of such repurchase order less such
amount not in excess of 1% of such net asset value as the
Trustees may determine.

(h) REDEMPTION BY TRUST. Each Share of each Series that has
been established and designated is subject to redemption by
the Trust at the redemption price which would be applicable if
such Share was then being redeemed by the Shareholder pursuant
to subsection (f) of this Section 4.2 at any time if the
Trustees determine in their sole discretion that such
redemption is in the best interest of the holders of the
Shares, or any Series thereof, of the Trust, and upon such
redemption the holders of the Shares so redeemed shall have no
further right with respect thereto other than to receive
payment of such redemption price.

(i) NET ASSET VALUE. The net asset value per Share of any Series
shall be the quotient obtained by dividing the value of the
net assets of that Series (being the value of the assets
belonging to that Series less the liabilities belonging to
that Series) by the total number of Shares of that Series
outstanding, all determined in accordance with the method and
procedures established by the Trustees from time to time.

(j) TRANSFER. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Series
will be recorded on the Share transfer records of the Trust
applicable to that Series only at such times as may be
permitted by the Trustees.

(k) EQUALITY. All Shares of each particular Series shall
represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities belonging
to that Series), and each Share of any particular Series shall
be equal to each other Share of that Series; but the
provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section
4.2 that may exist with respect to dividends and distributions
on Shares of the same Series. The Trustees may from time to
time divide or combine the Shares of any particular Series
into a greater or lesser number of Shares of that Series
without thereby changing the proportionate beneficial interest
in the assets belonging to that Series or in any way affecting
the rights of Shares of any other Series.

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<PAGE>

(l) FRACTIONS. Any fractional Share of any Series, if any such
fractional Share is outstanding, shall carry proportionately
all the rights and obligations of a whole Share of that
Series, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares, and
liquidation of the Trust.

(m) EXCHANGE PRIVILEGE. Subject to compliance with the
requirements of the Investment Company Act, the Trustees shall
have the authority to provide that holders of Shares of any
Series shall have the right to exchange said Shares for Shares
of one or more other Series of Shares in accordance with such
requirements and procedures as may be established by the
Trustees.

SECTION 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
that has been established and designated. No certificates certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares, and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Series held from time to time by each such Shareholder.

SECTION 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the Investment Company
Act, as they from time to time authorize. The Trustees may authorize any
distributor, principal underwriter, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.

SECTION 4.5 NO PREEMPTIVE OR APPRAISAL RIGHTS. Shareholders shall have
no preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust. Shareholders shall have no appraisal rights
other than as may from time to time be provided by applicable law.

SECTION 4.6 STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an accounting. The
Trust shall not be deemed or otherwise construed to be a partnership nor shall
the ownership of Shares constitute the Shareholders partners. Neither the Trust
nor the Trustees nor any officer, employee or agent of the Trust shall have any
power to bind

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<PAGE>

personally any Shareholder nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time agree to pay.

ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS

SECTION 5.1 VOTING POWERS. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 2.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 2.4 as to which Shareholder approval is required by the Investment
Company Act, (iii) with respect to any termination or reorganization of the
Trust or any Series to the extent and as provided in Sections 7.1 and 7.2, (iv)
with respect to any amendment of this Declaration of Trust to the extent and as
provided in Section 7.3, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (vi) with
respect to such additional matters relating to the Trust as may be required by
the Investment Company Act, this Declaration of Trust or any registration of the
Trust with the Commission or state regulatory agency, or as the Trustees may
consider necessary or desirable. There shall be no cumulative voting in the
election of Trustees. Shares may be voted by proxy. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. At any time when no Shares of a Series are
outstanding, the Trustees may with respect to that Series exercise all rights of
Shareholders and may take any action required by law or this Declaration of
Trust to be taken by Shareholders with respect to that Series.

SECTION 5.2 MEETINGS. There shall be such meetings of Shareholders of
the Trust as may be required by the Investment Company Act or as may be called
by the Trustees, at the office of the Trust or at such other place as may be
designated in the call thereof, which call shall be made by the Trustees. In the
event that any such meeting is not held on the date fixed in the notice thereof,
whether the omission be by oversight or otherwise, a subsequent meeting may be
called by the Trustees and held in lieu of the original meeting, with the same
effect as though held on such date. Meetings may also be called by the Trustees
from time to time for the purpose of taking action upon any matter requiring the
vote or authority of the Shareholders as herein provided or upon any other
matter deemed by the Trustees to be necessary or desirable. Written notice of
any meeting of Shareholders shall be given or caused to be given by the Trustees
by mailing such notice at least seven days before such meeting, postage prepaid,
stating the time, place and purpose of the meeting, to each Shareholder at the
Shareholder's address as it appears on the records of the Trust. If the Trustees
shall fail to call or give notice of any meeting of Shareholders for a period of
60 days after written application by Shareholders holding at least 10% of the
Shares then outstanding requesting a meeting be called for a purpose requiring
action by the Shareholders as provided herein, then Shareholders

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<PAGE>

holding at least 10% of the Shares then outstanding may call and give notice of
such meeting, and thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees.

SECTION 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such action and no Shareholder becoming such after
that date and time shall be so entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record for purposes of
such other action.

SECTION 5.4 QUORUM AND REQUIRED VOTE. A majority of the Shares entitled
to vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further notice. A
majority of the Shares voted, at a meeting at which a quorum is present, shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is provided for by any provision of the Investment Company Act or
other applicable law or by this Declaration of Trust.

SECTION 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
Investment Company Act and other applicable law, any action taken by
Shareholders of the Trust or of any Series may be taken without a meeting if a
majority of Shareholders entitled to vote on the matter ( or such larger
proportion thereof as shall be required by the Investment Company Act or by any
express provision of this Declaration of Trust) consent to the action in writing
and such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.

SECTION 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders to the extent permitted by the Trustees.

ARTICLE VI
LIMITATION OF LIABILITY: INDEMNIFICATION

SECTION 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE;
NOTICE. All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the

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<PAGE>

Trust for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefore.
Every note, bond, contract, instrument, certificate or undertaking and every
other act or thing whatsoever executed or done by or on behalf of the Trust or
the Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been executed or done only by or for the Trust or the Trustees
and not personally. Nothing in this Declaration of Trust shall protect any
Trustee or officer against any liability to the Trust or the Shareholders to
which such Trustee or officer would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee or of such officer.

Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, but the omission thereof shall not
operate to bind any Trustees or Trustee or officers or officer or Shareholders
or Shareholder individually.

SECTION 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his own
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of the Trustee, and for nothing
else, and shall not be liable for errors of judgement or mistakes of fact or
law. Subject to the foregoing, (a) the Trustees shall not be responsible or
liable in any event for any neglect or wrongdoing of any officer, agent,
employee, consultant, adviser, administrator, distributor or principal
underwriter, financial agent, custodian or transfer, dividend disbursing,
Shareholder servicing or other agent of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee; (b) the Trustees may
take advice of counsel or other experts with respect to the meaning and
operation of this Declaration of Trust and their duties as Trustees and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice; and (c) in discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the books of
account of the Trust and upon written reports made to the Trustees by any
officer appointed by them, any independent public accountant, and (with respect
to the subject matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the Trustees pursuant
to Section 2.4. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties.

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<PAGE>

SECTION 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder shall be charged or held to be personally liable for any
obligation or liability of the Trust solely by reason of being or having been a
Shareholder and not because of such Shareholder's acts or omissions or for some
other reason, the Trust (upon proper and timely request by the Shareholder)
shall assume the defense against such charge and satisfy any judgement thereon,
and the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled out
of the assets of the Trust estate to be held harmless from and indemnified
against all loss and expense arising from such charge or liability.

SECTION 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The Trust shall
indemnify each of its Trustees and officers (hereinafter referred to as a
"Covered Person") against all liabilities, including but not limited to amounts
paid in satisfaction of judgements, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding not to have acted in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to the
best interests of the Trust and except that no Covered Person shall be
indemnified against any liability to the Trust or its Shareholders to which such
Covered Person would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including accountants' and
counsel fees so incurred by any such Covered Person (but excluding amounts paid
in satisfaction of judgements, in compromise or as fines or penalties), may be
paid from time to time by the Trust in advance of the final disposition of any
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such Covered Person to repay amounts so paid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article VI.

SECTION 6.5 COMPROMISE PAYMENT. As to any matter disposed of by a
compromise payment of any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless there has been
obtained an opinion in writing of independent legal counsel to the effect that
such Covered Person does not appear not to have acted in good faith in the
reasonable belief that his action was in or not opposed to the best interests of
the Trust and that such indemnification would not protect such person against
any liability to the Trust to which such person would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of office. Any payment made to any covered
Person hereunder shall not

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prevent the recovery from any Covered Person of any amount paid to such Covered
Person in accordance with any of such clauses as indemnification if such Covered
Person is subsequently adjudicated by a court of competent jurisdiction not to
have acted in good faith in the reasonable belief that such Covered Person's
action was in or not opposed to the best interests of the Trust or to have been
liable to the Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.

SECTION 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.

SECTION 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.

ARTICLE VII
MISCELLANEOUS

SECTION 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The Trust
may be terminated at any time by a majority of the Trustees then in office
subject to the approval by a Vote of a Majority of Outstanding Voting Securities
of each Series voting separately by Series.

Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated, as may
be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.

SECTION 7.2 REORGANIZATION. The Trustees may sell, convey and transfer
the assets of the Trust, or the assets belonging to any one or more Series, to
another Trust, partnership, association or corporation organized under the laws
of any state of the United States, or to the Trust, to be held as assets
belonging to another Series of the Trust, in exchange for cash, shares or other
securities (including, in the case of a transfer to another Series of the Trust,
Shares of such other Series) with

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such transfer being made subject to, or with the assumption by the transferee
of, the liabilities belonging to each Series the assets of which are so
transferred; provided, however, that no assets belonging to any particular
Series shall be so transferred unless the terms of such transfer shall have
first been approved at a meeting called for the purpose by a Vote of a Majority
of the Outstanding Voting Securities of that Series. Following such transfer,
the Trustees shall distribute such cash, shares or other securities (giving due
effect to the assets and liabilities belonging to and any other differences
among the various Series the assets belonging to which have so been transferred)
among the Shareholders of the Series the assets belonging to which have been so
transferred; and if all of the assets of the Trust have been so transferred, the
Trust shall be terminated.

SECTION 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment except as herein provided upon the
Shareholders without the express consent of each Shareholder or Trustee
involved. Subject to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be amended at any
time by an instrument in writing signed by a majority of the then Trustees (or
by a Trustee or officer of the Trust pursuant to the vote of a majority of such
Trustees), when authorized to do so by the vote in accordance with subsection
(e) of Section 4.2 of Shareholders holding a majority of the Shares entitled to
vote, except that amendments (a) establishing and designating any further
Series or Shares, as provided in Section 4.1, or (b) abolishing any Series of
Shares of which there are no Shares outstanding, or (c) adopting, altering, or
amending investment restrictions with respect to the Trust or any Series of the
Trust which are not fundamental investment policies of the Trust or of any
Series, or (d) having the purpose of changing the name of the Trust or the name
of the Series therefore established and designated, or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
provision hereof which is internally inconsistent with any other provision
hereof or which is defective or inconsistent with the Investment Company Act or
with the requirements of the Internal Revenue Code and applicable regulations
for the Trust's obtaining the most favorable treatment thereunder available to
regulated investment companies, shall not require authorization by Shareholder
vote. Subject to the foregoing, any such amendment shall be effective as
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.

SECTION 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
conformed copy of this Declaration of Trust and of each amendment thereto shall
be kept at the office of the Trust where it may be inspected by any Shareholder.
A copy of this Declaration of Trust and of each amendment thereto shall be filed
by the Trust with the Secretary of The Commonwealth of Massachusetts, as well as
with any other governmental office where such filing may be required, but the
failure to make any

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<PAGE>

such filing shall not impair the effectiveness of this Declaration of Trust or
any such subsequent amendment. Anyone dealing with the Trust may rely on a
certificate by a Trustee or officer of the Trust as to whether or not any such
amendments have been made, as to the identities of the Trustees and officers,
and as to any matters in connection with the Trust hereunder; and, with the same
effect as if it were the original, may rely on a copy certified by an officer of
the Trust to be a copy of this Declaration of Trust or of any such subsequent
amendment. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. The masculine gender shall include the feminine
and neuter genders. Headings are placed herein for convenience of reference only
and shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument or any amendment
thereto may be executed in any number of counterparts each of which shall be
deemed an original.

SECTION 7.5 APPLICABLE LAW. This Declaration of Trust, made in the
Commonwealth of Massachusetts, and the Trust created hereunder, is governed by
the laws of said Commonwealth and is construed and administered according to
said laws. The Trust is of the type referred to in Section 1 of chapter 182 of
the Massachusetts General Laws and of the type commonly called a Massachusetts
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.

IN WITNESS WHEREOF, the undersigned have executed this instrument this
eighteenth day of February, 1986.

/s/ John Hand
-------------------------------
John Hand

/s/ Virginia Spencer
-------------------------------
Virginia Spencer

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EXHIBIT 5.3
FORM OF INVESTMENT ADVISORY AGREEMENT

<PAGE>

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT made effective as of the day of September, 1996 by and
between The Phoenix Edge Series Fund, a Massachusetts business trust having a
place of business located at 101 Munson Street, Greenfield, Massachusetts (the
"Trust") and Phoenix-Aberdeen International Advisors, LLC, a Delaware limited
liability company having a place of business located at 56 Prospect Street,
Hartford, Connecticut (the "Adviser").

WITNESSETH THAT:

1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust on behalf of Aberdeen New Asia Series (the "Series"), for the period
and on the terms set forth herein. The Adviser accepts such appointment and
agrees to render the services described in this Agreement for the compensation
herein provided.

2. In the event that the Trustees desire to retain the Adviser to render
investment advisory services hereunder with respect to one or more additional
series ("Additional Series"), the Trust shall notify the Adviser in writing. If
the Adviser is willing to render such services, it shall notify the Trust in
writing, whereupon such Additional Series shall become subject to the terms and
conditions of this Agreement.

3. The Adviser shall furnish continuously an investment program for the
Series and any Additional Series which may become subject to the terms and
conditions set forth herein (sometimes collectively referred to as the "Series")
and shall manage the investment and reinvestment of the assets of each Series,
subject at all times to the supervision of the Trustees.

4. With respect to managing the investment and reinvestment of the
Series' assets, the Adviser shall provide, at its own expense:

(a) Investment research, advice and supervision;

(b) An investment program for each Series consistent with
its investment objectives;

(d) Advice and assistance on the general operations of the
Trust; and

(e) Regular reports to the Trustees on the implementation of
each Series' investment program.

<PAGE>

5. The Adviser shall, for all purposes herein, be deemed to be an
independent contractor.

6. The Adviser shall furnish at its own expense, or pay the expenses
of the Trust, for the following:

(a) Office facilities, including office space, furniture
and equipment;

(b) Personnel necessary to perform the functions required to
manage the investment and reinvestment of each Series'
assets (including those required for research,
statistical and investment work);

(c) Personnel to serve without salaries from the Trust as
officers or agents of the Trust. The Adviser need not
provide personnel to perform, or pay the expenses of the
Trust for, services customarily performed for an
open-end management investment company by its national
distributor, custodian, financial agent, transfer agent,
auditors and legal counsel; and

(d) Compensation and expenses, if any, of the Trustees who
are also full-time employees of the Adviser or any of
its affiliates.

(e) Any Subadviser recommended by the Adviser and appointed
to act on behalf of the Trust.

7. All costs and expenses not specifically enumerated herein as payable
by the Adviser shall be paid by the Trust. Such expenses shall include, but
shall not be limited to, all expenses (other than those specifically referred to
as being borne by the Adviser) incurred in the operation of the Trust and any
public offering of its shares, including, among others, interest, taxes,
brokerage fees and commissions, fees of Trustees who are not full-time employees
of the Adviser or any of its affiliates, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of repurchase and
redemption of shares, expenses of issue and sale of shares (to the extent not
borne by its national distributor under its agreement with the Trust), expenses
of printing and mailing stock certificates representing shares of the Trust,
association membership dues, charges of custodians, transfer agents, dividend
disbursing agents and financial agents, bookkeeping, auditing and legal
expenses. The Trust will also pay the fees and bear the expense of registering
and maintaining the registration of the Trust and its shares with the Securities
and Exchange Commission and registering or qualifying its shares under state or
other securities laws and the expense of preparing and mailing prospectuses and
reports to shareholders. Additionally, if authorized by the Trustees, the Trust
shall pay for extraordinary expenses and expenses of a non-recurring nature
which may include, but not be limited to the reasonable and proportionate cost
of any reorganization or acquisition of assets and the cost of legal proceedings
to which the Trust is a party.

<PAGE>

8. For providing the services and assuming the expenses outlined
herein, the Trust agrees that the Adviser shall be compensated as follows:

(a) The Trust shall pay the Adviser a monthly fee with
respect to the Series at the annual rate of 1.00% of the
average aggregate daily net asset values of the Series.
The amounts payable to the Adviser with respect to the
Series shall be based upon the average of the values of
the net assets of such Series as of the close of
business each day, computed in accordance with the
Trust's Declaration of Trust.

(b) Compensation shall accrue immediately upon the effective
date of this Agreement.

(c) If there is termination of this Agreement during a
month, each Series' fee for that month shall be
proportionately computed upon the average of the daily
net asset values of such Series for such partial period
in such month.

(d) The Adviser agrees to reimburse the Trust for the
amount, if any, by which the total operating and
management expenses for any Series (including the
Adviser's compensation, pursuant to this paragraph, but
excluding taxes, interest, costs of portfolio
acquisitions and dispositions and extraordinary
expenses), for any "fiscal year" exceed the level of
expenses which such Series is permitted to bear under
the most restrictive expense limitation (which is not
waived by the State) imposed on open-end investment
companies by any state in which shares of such Series
are then qualified. Such reimbursement, if any, will be
made by the Adviser to the Trust within five days after
the end of each month. For the purpose of this
subparagraph (d), the term "fiscal year" shall include
the portion of the then current fiscal year which shall
have elapsed at the date of termination of this
Agreement.

9. The services of the Adviser to the Trust are not to be deemed
exclusive, the Adviser being free to render services to others and to engage in
other activities. Without relieving the Adviser of its duties hereunder and
subject to the prior approval of the Trustees and subject further to compliance
with applicable provisions of the Investment Company Act of 1940, as amended,
the Adviser may appoint one or more agents to perform any of the functions and
services which are to be provided under the terms of this Agreement upon such
terms and conditions as may be mutually agreed upon among the Trust, the Adviser
and any such agent.

10. The Adviser shall not be liable to the Trust or to any shareholder
of the Trust for any error of judgment or mistake of law or for any loss
suffered by the Trust or by any shareholder of the Trust in connection with the
matters to which this Agreement relates, except a loss resulting from

<PAGE>

wilful misfeasance, bad faith, gross negligence or reckless disregard on the
part of the Adviser in the performance of its duties hereunder.

11. It is understood that:

(a) Trustees, officers, employees, agents and shareholders
of the Trust are or may be "interested persons" of the
Adviser as directors, officers, stockholders or
otherwise;

(b) Directors, officers, employees, agents and stockholders
of the Adviser are or may be "interested persons" of the
Trust as Trustees, officers, shareholders or otherwise;
and

12. This Agreement shall become effective with respect to the Series as
of the date stated above (the "Contract Date") and with respect to any
Additional Series, on the date specified in the notice to the Trust from the
Adviser in accordance with paragraph 2 hereof that the Adviser is willing to
serve as Adviser with respect to such Additional Series. Unless terminated as
herein provided, this Agreement shall remain in full force and effect for a
period of two years following the Contract Date, and, with respect to each
Additional Series, until the next anniversary of the Contract Date following the
date on which such Additional Series became subject to the terms and conditions
of this Agreement and shall continue in full force and effect for periods of one
year thereafter with respect to each Series so long as (a) such continuance with
respect to any such Series is approved at least annually by either the Trustees
or by a "vote of the majority of the outstanding voting securities" of such
Series and (b) the terms and any renewal of this Agreement with respect to any
such Series have been approved by a vote of a majority of the Trustees who are
not parties to this Agreement or "interested persons" of any such party cast in
person at a meeting called for the purpose of voting on such approval; provided,
however, that the continuance of this Agreement with respect to each Additional
Series is subject to its approval by a "vote of a majority of the outstanding
voting securities" of any such Additional Series on or before the next
anniversary of the Contract Date following the date on which such Additional
Series became a Series hereunder.

Any approval of this Agreement by a vote of the holders of a "majority
of the outstanding voting securities" of any Series shall be effective to
continue this Agreement with respect to such Series notwithstanding (a) that
this Agreement has not been approved by a "vote of a majority of the outstanding
voting securities" of any other Series of the Trust affected thereby and (b)
that this Agreement has not been approved by the holders of a "vote of a
majority of the outstanding voting securities" of the Trust, unless either such
additional approval shall be required by any other applicable law or otherwise.

<PAGE>

13. The Adviser shall furnish any state insurance commissioner with such
information or reports in connection with the services provided under this
Agreement as the Commissioner may request in order to ascertain whether variable
life insurance or variable annuity operations are being conducted in accordance
with applicable law or regulations. The Trust shall own and control all records
that pertain to the services provided under this Agreement and such records
shall be open to inspection, audit and photocopying during regular business
hours by the Trustees, Officers, Counsel and Auditors of the Trust.

14. The Trust may terminate this Agreement with respect to the Trust or
to any Series upon 60 days' written notice to the Adviser at any time, without
the payment of any penalty, by vote of the Trustees or, as to each Series, by a
"vote of the majority of the outstanding voting securities" of such Series. The
Adviser may terminate this Agreement upon 60 days' written notice to the Trust,
without the payment of any penalty. This Agreement shall immediately terminate
in the event of its "assignment".

15. The terms "majority of the outstanding voting securities",
"interested persons" and "assignment", when used herein, shall have the
respective meanings in the Investment Company Act of 1940, as amended.

16. In the event of termination of this Agreement, or at the request of
the Adviser, the Trust will eliminate all reference to "Phoenix" and/or
"Phoenix-Aberdeen" from its name, and will not thereafter transact business in a
name using the word "Phoenix" and/or "Phoenix-Aberdeen" in any form or
combination whatsoever, or otherwise use the word "Phoenix" and/or
"Phoenix-Aberdeen" as part of its name. The Trust will thereafter in all
prospectuses, advertising materials, letterheads, and other material designed to
be read by investors and prospective investors delete from its name the word
"Phoenix" and/or "Phoenix-Aberdeen" or any approximation thereof. If the Adviser
chooses to withdraw the Trust's right to use the word "Phoenix" and/or
"Phoenix-Aberdeen", it agrees to submit the question of continuing this
Agreement to a vote of the Trust's shareholders at the time of such withdrawal.

17. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but bind only the trust property of
the Trust, as provided in the Declaration of Trust. The execution and delivery
of this Agreement have been authorized by the Trustees and shareholders of the
Trust and signed by the President of the Trust, acting as such, and neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
be binding upon or impose any liability on any of them personally, but shall
bind only the trust property of the Trust as provided in its Declaration of
Trust. The Declaration of Trust, as amended, is or shall be on file with the
Secretary of The Commonwealth of Massachusetts.

<PAGE>

18. This Agreement shall be construed and the rights and obligations
of the parties hereunder enforced in accordance with the laws of The
Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.

THE PHOENIX EDGE SERIES FUND

By: -------------------------------
Philip R. McLoughlin, President

PHOENIX-ABERDEEN
INTERNATIONAL ADVISORS, LLC

By: -------------------------------
Michael E. Haylon, President