Annual Report
December 31, 1995
The Phoenix Edge Series Fund
<PAGE>
MONEY MARKET SERIES
The Money Market Series performed solidly during 1995. On December 31, the
Fund's current yield was 5.62%. This compares favorably with the 5.15%
average yield of taxable money market funds reported by Donoghue's Money Fund
Report.
The short-term markets were relatively quiet in 1995, as the Federal
Reserve Board gradually shifted from a restrictive monetary policy to a more
neutral stance. The Fed hiked short-term rates 50 basis points in February
and then reversed itself with two 25 basis point cuts in July and December
when it became evident the economy had weakened and inflation remained
subdued. Currently, most observers expect the Fed to continue easing once the
budget problems in Washington are resolved.
In anticipation of the Fed's easing, we continue to look for opportunities
to extend portfolio maturities where appropriate. We are also maintaining our
focus on floating-rate securities, which have been strong contributors to the
portfolio over this reporting period. Given the past uncertainties concerning
monetary policy and the trend for lower long-term rates, we believe this is
an appropriate investment strategy.
[typeset representation of line chart]
Donoghue Money Fund Report* Money Market Series
1/31/95 5.2% 5.47%
2/28/95 5.41 5.74
3/31/95 5.48 5.73
4/30/95 5.49 5.61
5/31/95 5.46 5.73
6/30/95 5.43 5.5
7/31/95 5.33 5.46
8/31/95 5.23 5.49
9/30/95 5.19 5.43
10/31/95 5.17 5.36
11/30/95 5.17 5.41
12/31/95 5.15 5.62
[end chart]
The above graph covers the period from January 31, 1995 to December 31, 1995.
The results are not indicative of the rate of return which may be realized
from an investment made in the Money Market Series today. The Money Market
Series is neither issued nor guaranteed by the U.S. Government, and there can
be no assurance the Series will be able to maintain a stable net asset value
at $10.00 per share.
*Average monthly yield of taxable Money Market Funds as reported by
Donoghue's Money Fund Report.
SCHEDULE OF INVESTMENTS
December 31, 1995
FACE
VALUE INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
----- -------------------------------- ------- -------- -------------
FEDERAL AGENCY SECURITIES--10.0%
$4,000 Federal Home Loan Banks 6.10% 01/02/96 $ 3,999,322
2,000 Federal National Mortgage
Association 5.50 01/08/96 1,997,861
830 Federal Home Loan Banks 6.52 01/19/96 827,294
3,500 Federal Home Loan Banks 7.15 01/26/96 3,500,039
-----------
TOTAL FEDERAL AGENCY SECURITIES 10,324,516
------------
RESET
DATE
------
FEDERAL AGENCY SECURITIES--VARIABLE--22.1% (b)
3,000 Student Loan Marketing Assoc.
(final maturity 08/16/96) 5.86 01/02/96 3,000,000
1,500 Federal Farm Credit Banks (final
maturity 02/24/97) 5.76 01/02/96 1,499,430
4,500 Federal Farm Credit Banks (final
maturity 07/24/00) 5.79 01/02/96 4,502,315
1,500 Federal Home Loan Banks (final
maturity 06/15/96) 5.85 01/02/96 1,501,400
1,500 Federal Home Loan Banks (final
maturity 01/14/97) 5.95 01/02/96 1,500,000
500 Student Loan Marketing Assoc.
(final maturity 07/19/96) 5.20 01/03/96 500,000
2,500 Student Loan Marketing Assoc.
(final maturity 11/24/97) 5.22 01/03/96 2,500,000
1,500 Student Loan Marketing Assoc.
(final maturity 11/10/98) 5.24 01/03/96 1,497,740
2,000 Student Loan Marketing Assoc.
(final maturity 01/11/96) 5.25 01/03/96 2,000,000
1,000 Student Loan Marketing Assoc.
(final maturity 02/22/99) 5.25 01/03/96 1,000,000
1,600 Student Loan Marketing Assoc.
(final maturity 10/30/97) 5.40 01/03/96 1,601,618
1,650 Federal National Mortgage Assoc.
(final maturity 12/14/98) 5.68 03/14/96 1,647,331
-----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 22,749,834
------------
See Notes to Financial Statements
2-2
<PAGE>
MONEY MARKET SERIES
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
----- ------------------- -------- ------ ------- ------------
MEDIUM-TERM NOTES--VARIABLE--4.1% (b)
$1,450 General Electric
Capital Corp. AAA 5.62% 07/26/96 $ 1,451,004
2,800 General Electric
Capital Corp. A-1+ 5.87 08/22/96 2,801,007
---------
TOTAL MEDIUM-TERM NOTES--VARIABLE 4,252,011
----------
COMMERCIAL PAPER--59.0%
770 AT&T Corp. A-1+ 5.81 01/02/96 769,876
3,695 Vermont American
Corp. A-1+ 5.85 01/03/96 3,693,799
1,500 McDonald's Corp. A-1+ 5.95 01/08/96 1,498,265
3,000 Bellsouth
Telecommunications,
Inc. A-1+ 5.75 01/09/96 2,996,167
1,500 Corporate Asset
Securitization
Australia Ltd.,
Inc. A-1+ 5.80 01/10/96 1,497,825
1,000 Asset
Securitization
Cooperative Corp. A-1+ 5.78 01/11/96 998,394
800 Esc Securitization,
Inc. A-1+ 5.85 01/12/96 798,570
2,300 Kimberly-Clark
Corp. A-1+ 5.80 01/12/96 2,295,924
250 Receivable Capital
Corp. A-1 5.75 01/12/96 249,561
2,060 Abbott Laboratories A-1+ 5.70 01/16/96 2,055,108
255 AT&T Corp. A-1+ 5.73 01/16/96 254,391
3,580 First Deposit
Funding Trust A-1+ 5.80 01/16/96 3,571,348
500 Corporate Asset
Securitization
Australia Ltd.,
Inc. A-1+ 5.80 01/17/96 498,711
1,000 Greenwich Funding
Corp. A-1+ 5.75 01/17/96 997,444
2,063 Greenwich Funding
Corp. A-1+ 5.75 01/17/96 2,057,728
2,600 TDK USA Corp. A-1+ 5.74 01/17/96 2,593,367
4,000 Exxon Imperial
U.S., Inc. A-1+ 5.80 01/18/96 3,989,044
2,310 Gannett Co. A-1 5.75 01/19/96 2,303,359
2,100 Gannett Co. A-1 5.75 01/22/96 2,092,956
4,100 Receivables Capital
Corp. A-1 5.81 01/22/96 4,086,104
1,600 H.J. Heinz Co. A-1 5.75 01/29/96 1,592,844
2,185 Kimberly-Clark
Corp. A-1+ 5.65 01/30/96 2,175,055
220 Kimberly-Clark
Corp. A-1+ 5.58 02/01/96 218,943
2,000 CXC, Inc. A-1 5.65 02/02/96 1,989,956
475 H.J. Heinz Co. A-1 5.72 02/02/96 472,585
2,390 H.J. Heinz Co. A-1 5.57 02/05/96 2,377,058
1,500 Bellsouth
Telecommunications,
Inc. A-1+ 5.68 02/09/96 1,490,770
1,500 Preferred
Receivables
Funding Corp. A-1 5.71 02/13/96 1,489,770
900 First Deposit
Funding Trust A-1+ 5.70 02/16/96 893,445
2,855 Ameritech Capital
Funding Corp. A-1+ 5.58 02/23/96 2,831,546
3,500 Corporate
Receivables A-1 5.55 02/29/96 3,468,165
2,500 E.I. du Pont de
Nemours & Co. A-1+ 5.53 07/23/96 2,421,658
---------
TOTAL COMMERCIAL PAPER 60,719,736
----------
CERTIFICATES OF DEPOSIT-CALLABLE NOTE--1.0%
1,000 Societe Generale NY 5.95 07/15/96 1,000,000
---------
TOTAL CERTIFICATES OF DEPOSIT 1,000,000
----------
TOTAL INVESTMENTS--96.2%
(Identified cost $99,046,097) 99,046,097((a))
Cash and receivables, less liabilities--3.8% 3,897,340
----------
NET ASSETS--100.0% $102,943,437
==========
((a)) Federal Income Tax Information: At December 31, 1995 the aggregate cost
of securities was the same for book and tax purposes.
((b)) Variable rate demand note. The interest rates shown reflect the rate
currently in effect. The maturity dates shown reflect the next interest
rate reset dates.
See Notes to Financial Statements
2-3
<PAGE>
MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value
(Identified cost $99,046,097) $ 99,046,097
Cash 3,582,584
Interest receivable 394,186
------------
Total assets 103,022,867
------------
Liabilities
Investment advisory fee 31,969
Financial agent fee 4,795
Trustee fee 3,056
Accrued expenses 39,610
------------
Total liabilities 79,430
------------
Net Assets $102,943,437
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $102,914,345
Undistributed net investment income 29,092
------------
Net Assets $102,943,437
============
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization 10,291,434
============
Net asset value and offering price per share $10.00
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment Income
Interest $5,551,168
------------
Total investment income 5,551,168
------------
Expenses
Investment advisory fee 352,030
Financial agent fee 54,605
Printing 20,477
Audit 19,493
Custodian 19,669
Trustees' fee 14,550
Miscellaneous 4,054
------------
Total expenses 484,878
Custodian fees paid indirectly (4,119)
------------
Net expenses 480,759
------------
Net investment income 5,070,409
------------
Net increase in net assets resulting from operations $5,070,409
============
See Notes to Financial Statements
2-4
<PAGE>
MONEY MARKET SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
------------ -------------
From Operations
Net investment income $ 5,070,409 $ 3,392,083
Net realized gain -- 100
---------- ------------
Net increase in net assets resulting from
operations 5,070,409 3,392,183
---------- ------------
From Distributions to Shareholders
Net investment income (5,055,199) (3,378,211)
Net realized gains -- (94)
---------- ------------
Decrease in net assets from distributions
to shareholders (5,055,199) (3,378,305)
---------- ------------
From Shares of Beneficial Interest
Transactions
Proceeds from sales of shares (19,415,954
and 23,586,003 shares, respectively) 194,159,531 235,860,031
Net asset value of shares issued from
reinvestment of distributions
(505,520 and 337,830 shares, respectively) 5,055,199 3,378,305
Cost of shares repurchased (19,087,235 and
21,761,240 shares, respectively) (190,872,354) (217,612,379)
---------- ------------
Increase in net assets from share
transactions 8,342,376 21,625,957
---------- ------------
Net increase in net assets 8,357,586 21,639,835
Net Assets
Beginning of period 94,585,851 72,946,016
---------- ------------
End of period (including undistributed net
investment income of $29,092 and
$13,882, respectively) $ 102,943,437 $ 94,585,851
========== ============
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Year ended December 31,
1995 1994 1993 1992 1991
-------------- ------------ ------------ ----- -------
Net asset
value,
beginning of
period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from
investment
operations
Net
investment
income 0.56 0.38((1)) 0.28((1)) 0.35 0.58
------------ ---------- ---------- --- -----
Total from
investment
operations 0.56 0.38 0.28 0.35 0.58
------------ ---------- ---------- --- -----
Less
distributions
Dividends
from net
investment
income (0.56) (0.38) (0.28) (0.35) (0.58)
------------ ---------- ---------- --- -----
Total
distributions (0.56) (0.38) (0.28) (0.35) (0.58)
------------ ---------- ---------- --- -----
Net asset
value, end
of period $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
============ ========== ========== === =====
Total return 5.55% 3.77% 2.80% 3.50% 5.80%
Ratios/supplemental
data:
Net assets,
end of
period
(thousands) $102,943 $94,586 $72,946 $69,962 $51,692
Ratio to
average net
assets of:
Operating
expenses 0.53%((2)) 0.55% 0.55% 0.50% 0.50%
Net
investment
income 5.57% 3.85% 2.84% 3.49% 5.76%
((1)) Includes reimbursement of operating expenses by investment adviser of
$0.003 and $0.01 per share, respectively.
((2)) 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.
See Notes to Financial Statements
2-5
<PAGE>
GROWTH SERIES
The Fund made strong absolute gains over the reporting period. For the
year ended December 31, 1995, the Fund provided a total return of 30.85%.
Despite this performance the Fund trailed the Standard & Poor's 500 Composite
Index which returned 37.51% for the year. (All of these figures assume
reinvestment of any distributions.)
In the final analysis, 1995 will be viewed as a remarkable year for stocks
and for many large capitalization growth stocks in particular. During both
the first and fourth calendar quarters, investors opted for the relative
safety and predictability of such large cap names. Early in 1995, the Mexican
peso crisis and the weakness of the U.S. dollar led investors towards a more
conservative investment posture. Similarly, as recession odds slowly crept
higher late in the year, investors again shunned more volatile and
unpredictable stocks in favor of a small basket of steady growers. Technology
stocks garnered most of the investment headlines, but despite a meteoric rise
in the first half, their gains were pared significantly by yearend.
In terms of specific portfolio contribution, several factors influenced
the Fund's relative underperformance. During the first half of the year an
underweighting in the financial services sector, combined with a portfolio
shift away from several of the largest S&P 500 stocks, held performance back.
Underweighting in consumer staples also constrained performance. The
portfolio was aided by strong performance in the health care sector, where
sector weightings were increased throughout the year. Although the technology
sector was volatile, the portfolio's technology holdings were strong
contributors to performance. It should be mentioned that technology holdings
were reduced significantly by yearend. While we are optimistic that many
important environmental changes will continue to be driven by improvements in
the technology arena, we are also mindful that this group may not be immune
from an economic slowdown or decline in capital spending.
Looking into 1996, we expect corporate earnings gains to be moderate. As
the 1992-1995 period marks the first time that S&P 500 earnings have exceeded
10% in four consecutive years since World War II and given that corporate
profit margins are at record highs, we believe it is prudent to take a more
cautious view toward the new year. Yet with inflation still under control and
with the Federal Reserve poised to take further steps towards loosening the
monetary reins, the stock market can clearly make further gains. We believe
that solid opportunities continue to exist in many predictable and strong
growth firms.
[typeset representation of line chart]
S&P 500 Growth
Stock Index Series
12/31/85 10000 10000
12/31/86 11821 12015
12/31/87 12433 12862
12/31/88 14485 13354
12/31/89 19038 18170
12/31/90 18429 18894
12/31/91 24059 27175
12/31/92 25909 29971
12/31/93 28500 35872
12/31/94 28877 36403
12/31/95 39708 47633
[end chart]
Average Annual Total Returns for Periods Ending 12/31/95
1 Year 5 Years 10 Years
- ---------------------------------------------------------------
Growth Series 30.85% 20.29% 16.89%
- ---------------------------------------------------------------
S&P 500 Index* 37.51% 16.59% 14.79%
- ---------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/85.
Returns shown include the reinvestment of all distributions at net asset
value, and the change in share price for the stated period. Returns indicate
past performance, which is not predictive of future performance. Investment
return and net asset value will fluctuate so that your shares, when redeemed,
may be worth more or less than the original cost. Foreign investing involves
special risks such as currency fluctuation and less public disclosure, as
well as economic and political risks.
*The S&P 500 Stock Index is an unmanaged but commonly used measure of stock
total return performance.
2-6
<PAGE>
GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1995
SHARES VALUE
------- -------------
COMMON STOCKS--86.4%
Aerospace & Defense--1.6%
Boeing Company 200,000 $ 15,675,000
------------
Banks--1.4%
Chase Manhattan Corp. 234,000 14,186,250
------------
Chemical--1.0%
Monsanto Co. 80,000 9,800,000
------------
Chemical--Specialty--1.1%
Morton International, Inc. 300,000 10,762,500
------------
Computer Software & Services--4.3%
Adobe Systems, Inc. 210,000 13,020,000
BBN Corp. (b) 271,000 11,144,875
Oracle Systems Corp. (b) 222,000 9,407,250
Sybase, Inc. (b) 258,000 9,288,000
------------
42,860,125
------------
Diversified Financial Services--5.1%
Dean Witter Discover & Co. 200,000 9,400,000
Morgan Stanley Group, Inc. 115,000 9,271,875
Student Loan Marketing Assoc. 170,000 11,198,750
Travelers Group, Inc. 330,000 20,748,750
------------
50,619,375
------------
Electronics--1.8%
Intel Corp. 169,000 9,590,750
Oak Technology, Inc. (b) 179,200 7,571,200
------------
17,161,950
------------
Engineering & Construction--1.3%
Fluor Corp. 200,000 13,200,000
------------
Entertainment, Leisure & Gaming--3.8%
Viacom, Inc. Class B (b) 535,000 25,345,625
Walt Disney Co. 200,000 11,800,000
------------
37,145,625
------------
Food--1.7%
Nabisco Holdings Corp. Class A 360,800 11,771,100
Wrigley (WM) Jr. Co. 88,000 4,620,000
------------
16,391,100
------------
Healthcare--Diversified--1.1%
Bristol-Myers Squibb Co. 129,000 11,077,875
------------
Healthcare--Drugs--5.7%
Amgen, Inc. (b) 416,600 24,735,625
Biogen, Inc. (b) 325,000 19,987,500
Genzyme Corp. (b) 3,000 187,125
Pharmacia & Upjohn, Inc. 300,000 11,625,000
------------
56,535,250
------------
Hospital Management & Services--5.4%
Columbia/HCA Healthcare Corp. 250,000 12,687,500
PhyCor, Inc. (b) 198,750 10,049,297
United Healthcare Corp. 165,000 10,807,500
US Healthcare, Inc. 225,000 10,462,500
Vencor, Inc. (b) 275,000 8,937,500
------------
52,944,297
------------
Insurance--6.4%
Aetna Life & Casualty Co. 403,500 27,942,375
Cigna Corp. 174,000 17,965,500
Prudential Reinsurance Holdings, Inc. 747,000 17,461,125
------------
63,369,000
------------
Machinery--2.7%
Case Corp. 225,000 10,293,750
Deere & Co. 465,000 16,391,250
------------
26,685,000
------------
Medical Products & Supplies--4.9%
Baxter International, Inc. 415,000 $ 17,378,125
Boston Scientific Corp. (b) 220,000 10,780,000
Guidant Corp. 330,500 13,963,625
Medtronic, Inc. 100,000 5,587,500
------------
47,709,250
------------
Natural Gas--3.3%
Anadarko Petroleum Corp. 325,000 17,590,625
Apache Corp. 520,700 15,360,650
------------
32,951,275
------------
Office & Business Equipment--1.1%
Sun Microsystems, Inc. (b) 230,000 10,493,750
------------
Oil Service & Equipment--4.8%
BJ Services Co. (b) 511,000 14,819,000
Diamond Offshore Drilling (b) 95,000 3,206,250
Halliburton Co. 190,000 9,618,750
Schlumberger Ltd. 281,000 19,459,250
------------
47,103,250
------------
Paper & Forest Products--1.7%
Kimberly Clark Corp. 200,000 16,550,000
------------
Pollution Control--1.5%
WMX Technologies, Inc. 495,000 14,788,125
------------
Professional Services--1.0%
Mobile Telecommunications Technology Corp.
(b) 460,000 9,832,500
------------
Publishing, Broadcasting, Printing & Cable--1.3%
Tele-Communications TCI (b) 620,000 12,322,500
------------
Retail--2.9%
Federated Department Stores, Inc. (b) 315,000 8,662,500
Gap (The), Inc. 200,000 8,400,000
Staples, Inc. (b) 475,000 11,578,125
------------
28,640,625
------------
Telecommunications Equipment--9.6%
3Com Corp. (b) 402,000 18,743,250
Bay Networks, Inc. (b) 616,750 25,363,844
Cisco Systems, Inc. (b) 185,000 13,805,625
Glenayre Technologies, Inc. (b) 225,000 14,006,250
Newbridge Networks Corp. (b) 280,000 11,585,000
Stratacom, Inc. (b) 155,000 11,392,500
------------
94,896,469
------------
Tobacco--0.9%
Philip Morris Companies, Inc. 100,000 9,050,000
------------
Utility--Telephone--9.0%
AT&T Corp. 300,000 19,425,000
Frontier Corp. 425,000 12,750,000
MCI Communications Corp. 570,000 14,891,250
MFS Communications, Inc. (b) 134,000 7,135,500
Mobilemedia Corp. (b) 556,000 12,371,000
Paging Network, Inc. (b) 910,000 22,181,250
------------
88,754,000
------------
TOTAL COMMON STOCKS
(Identified cost $746,420,615) 851,505,091
------------
FOREIGN COMMON STOCKS--3.9%
Computer Software & Services--0.8%
Standard Application Software AG-Vorzug
(Germany) 52,450 7,952,468
------------
Oil--0.4%
YPF Sociedad Anonima ADR (Argentina) 200,000 4,325,000
------------
Publishing, Broadcasting, Printing & Cable--1.2%
News Corp. Ltd. Preference ADR (Australia) 592,000 11,396,000
------------
Telecommunications Equipment--0.8%
Ericsson L.M. Telephone Co. Class B ADR
(Sweden) 390,000 7,605,000
------------
See Notes to Financial Statements
2-7
<PAGE>
SHARES VALUE
------- -------------
Utility--Telephone--0.7%
Telecom Italia Mobile-DRNC (Italy) (b) 6,900,000 $ 7,245,000
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $34,046,370) 38,523,468
------------
TOTAL LONG-TERM INVESTMENTS--90.3%
(Identified cost $780,466,985) 890,028,559
------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------- -------
SHORT-TERM OBLIGATIONS--9.9%
Commercial Paper--9.9%
AT&T Corp. 5.75%, 1-3-96 A-1+ $7,620 7,617,566
McDonald's Corp. 5.63%, 1-4-96 A-1+ 6,095 6,092,140
Gannett 5.75%, 1-8-96 A-1 5,000 4,994,410
Gannett 5.77%, 1-8-96 A-1 7,000 6,992,146
Albertsons, Inc. 5.73%, 1-10-96 A-1 3,725 3,719,664
AT&T Corp. 5.65%, 1-11-96 A-1+ 7,670 7,657,962
Bellsouth Capital Funding Corp.
5.95%, 1-12-96 A-1+ 5,000 4,990,910
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------- ------- -------------
Commercial Paper--continued
Goldman Sachs 5.62%, 1-17-96 A-1+ $10,000 $ 9,975,022
Shell Oil 5.60%, 1-22-96 A-1+ 7,975 7,948,948
Wisconsin Electric Power 5.65%,
1-22-96 A-1+ 5,000 4,983,667
Southwestern Bell Telephone
5.55%, 1-25-96 A-1+ 14,390 14,336,757
Pfizer, Inc. 5.77%, 1-26-96 A-1+ 7,175 7,146,250
Kimberly Clark 5.59%, 1-30-96 A-1+ 10,000 9,954,969
H.J. Heinz Co. 5.72%, 2-2-96 A-1 1,225 1,218,773
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $97,629,184) 97,629,184
------------
TOTAL INVESTMENTS--100.2%
(Identified cost $878,096,169) 987,657,743((a))
Cash and receivables, less liabilities--(0.2%) (2,268,796)
------------
NET ASSETS--100.0% $985,388,947
============
((a)) Federal Income Tax Information: Net unrealized appreciation of
investment securities is comprised of gross appreciation of
$123,773,792 and gross depreciation of $14,212,218 for income tax
purposes. At December 31, 1995 the aggregate cost of securities for
federal income tax purposes was $878,096,169.
((b)) Non-income producing.
ADR--American Depository Receipt
See Notes to Financial Statements
2-8
<PAGE>
GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value (Identified cost
$878,096,169) $987,657,743
Cash 1,650,011
Dividends and interest receivable 952,491
Tax reclaim receivable 150,325
------------
Total assets 990,410,570
------------
Liabilities
Payable for investment securities purchased 4,294,426
Investment advisory fee 522,046
Financial agent fee 49,020
Trustee fee 3,084
Accrued expenses 153,047
------------
Total liabilities 5,021,623
------------
Net Assets $985,388,947
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $868,237,256
Undistributed net investment income 194,585
Accumulated net realized gain 7,395,532
Net unrealized appreciation 109,561,574
------------
Net Assets $985,388,947
============
Shares of beneficial interest outstanding, $1 par
value, unlimited authorization 54,341,075
============
Net asset value and offering price per share $18.13
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment Income
Interest $ 6,565,743
Dividends 8,318,959
------------
Total investment income 14,884,702
------------
Expenses
Investment advisory fee 5,142,411
Financial agent fee 476,741
Custodian 175,989
Printing 51,171
Professional 41,041
Trustees' fee 15,173
Miscellaneous 80,003
------------
Total expenses 5,982,529
Custodian fees paid indirectly (17,397)
------------
Net expenses 5,965,132
------------
Net investment income 8,919,570
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain from investment transactions 113,442,888
Net realized loss on foreign currency transactions (1,458,655)
Net unrealized appreciation of investment securities 89,700,570
------------
Net gain on investments 201,684,803
------------
Net increase in net assets resulting from operations $210,604,373
============
See Notes to Financial Statements
2-9
<PAGE>
GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
------------- --------------
From Operations
Net investment income $ 8,919,570 $ 7,438,217
Net realized gain 111,984,233 21,194,240
Net unrealized appreciation (depreciation) 89,700,570 (22,581,225)
------------ -------------
Net increase in net assets resulting from
operations 210,604,373 6,051,232
------------ -------------
From Distributions to Shareholders
Net investment income (7,451,972) (7,512,592)
Net realized gains (105,927,796) (33,881,394)
------------ -------------
Decrease in net assets from distributions
to shareholders (113,379,768) (41,393,986)
------------ -------------
From Shares of Beneficial Interest
Transactions
Proceeds from sales of shares (16,787,870
and 17,499,498 shares, respectively) 302,038,455 293,876,374
Net asset value of shares issued from
reinvestment of distributions
(6,290,645 and 2,620,718 shares,
respectively) 113,379,768 41,393,986
Cost of shares repurchased (8,019,458 and
7,747,001 shares, respectively) (143,474,953) (130,074,382)
------------ -------------
Increase in net assets from share
transactions 271,943,270 205,195,978
------------ -------------
Net increase in net assets 369,167,875 169,853,224
Net Assets
Beginning of period 616,221,072 446,367,848
------------ -------------
End of period (including undistributed net
investment income of $194,585
and $70,685, respectively) $ 985,388,947 $ 616,221,072
============ =============
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------------ ------------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.69 $16.59 $15.01 $14.43 $11.72
Income from investment operations
Net investment income 0.20 0.23((1)(3)) 0.16((3)) 0.22((3)) 0.39((3))
Net realized and unrealized gain 4.60 0.02 2.77 1.25 4.64
---------- ---------------- ---------- ---------- ------------
Total from investment operations 4.80 0.25 2.93 1.47 5.03
---------- ---------------- ---------- ---------- ------------
Less distributions
Dividends from net investment income (0.17) (0.23) (0.15) (0.23) (0.37)
Dividends from net realized gains (2.19) (0.92) (1.20) (0.66) (1.95)
---------- ---------------- ---------- ---------- ------------
Total distributions (2.36) (1.15) (1.35) (0.89) (2.32)
---------- ---------------- ---------- ---------- ------------
Change in net asset value 2.44 (0.90) 1.58 0.58 2.71
---------- ---------------- ---------- ---------- ------------
Net asset value, end of period $18.13 $15.69 $16.59 $15.01 $14.43
========== ================ ========== ========== ============
Total return 30.85% 1.48% 19.69% 10.29% 43.83%
Ratios/supplemental data:
Net assets, end of period (thousands) $985,389 $616,221 $446,368 $245,565 $102,259
Ratio to average net assets of:
Operating expenses 0.75%((2)) 0.80% 0.79% 0.50% 0.50%
Net investment income 1.12% 1.38% 0.97% 1.66% 2.14%
Portfolio turnover rate 173% 185% 185% 214% 237%
</TABLE>
((1)) Includes reimbursement of operating expenses by investment adviser of
$0.003 per share.
((2)) 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.
((3)) Computed using average shares outstanding.
See Notes to Financial Statements
2-10
<PAGE>
BOND SERIES
Over the past year, the domestic fixed-income market produced strong
returns. Slow economic growth combined with low inflation helped all sectors
of the fixed-income market to post positive results. A strong rally in the
U.S. Treasury market reversed the previous year's dismal results. Most
importantly, the emerging markets sector staged a dramatic recovery from the
first quarter. Finally, the high-yield sector offered returns that were
superior to the bond market overall.
For the twelve months ended December 31, 1995, Phoenix Edge Bond Fund
produced a total return of 23.54%. This compares favorably to the 18.48%
return of its benchmark, the Lehman Brothers Aggregate Bond Index. (All of
these figures assume reinvestment of any distributions.) Our outperformance
for the year is primarily due to our emphasis on emerging markets and, to a
lesser extent, on domestic high- yield securities. Additionally, the Fund
benefited from the strong performance of the U.S. Treasury market over the
past year.
Throughout 1995, we focused on U.S. government securities, non-agency
mortgage-backed securities, emerging markets debt and also domestic
high-yield issues--all of which were strong contributors to the portfolio.
The emerging markets sector, in particular, enhanced performance over this
reporting period. Despite the first-quarter difficulties caused by the
Mexican debt crisis, emerging markets recovered, with an improving perception
by investors of value in this sector. We continue to believe that this
segment of the fixed-income market will offer significant potential in the
coming year.
[typeset representation of line chart]
Lehman Brothers Aggregate Bond Series
Bond Index*
12/31/85 10000 10000
12/31/86 11526 11945
12/31/87 11844 12079
12/31/88 12779 13330
12/31/89 14636 14437
12/31/90 15947 15179
12/31/91 18499 18125
12/31/92 19868 19943
12/31/93 21806 23114
12/31/94 21170 21849
12/31/95 25082 26993
[end line chart]
Average Annual Total Returns for Periods Ending 12/31/95
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Bond Series 23.54% 12.20% 10.44%
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index* 18.48% 9.48% 9.63%
- -------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/85.
Returns shown include the reinvestment of all distributions at net asset
value, and the change in share price for the stated period. Returns indicate
past performance, which is not predictive of future performance. Investment
return and net asset value will fluctuate so that your shares, when redeemed,
may be worth more or less than the original cost. High yield fixed income
securities generally are subject to greater market fluctuations and risk of
loss of income and principal than are investments in lower-yielding fixed
income securities. Foreign investing involves special risks such as currency
fluctuation and less public disclosure, as well as economic and political
risks.
*The Lehman Brothers Aggregate Bond Index is an unmanaged but commonly used
measure of bond performance. It is a combination of several Lehman Brothers
Fixed Income Indexes.
2-11
<PAGE>
BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------- ------------ -----------
U.S. GOVERNMENT SECURITIES--21.8%
U.S. Treasury Bonds--6.0%
U.S. Treasury Bonds 6.875%, '25 Aaa $2,500 $ 2,818,425
U.S. Treasury Bonds 7.625%, '25 Aaa 3,000 3,665,040
----------
6,483,465
----------
U.S. Treasury Notes--10.5%
U.S. Treasury Notes 6.50%, '97 Aaa 1,000 1,016,630
U.S. Treasury Notes 5.50%, '98 Aaa 750 755,390
U.S. Treasury Notes 5.625%, '00 Aaa 500 505,000
U.S. Treasury Notes 5.875%, '05 Aaa 9,000 9,199,980
----------
11,477,000
----------
Agency Mortgage-Backed Securities--5.3%
FHLMC 7.50%, '18 Aaa 746 749,843
FNMA 7%, '24 Aaa 2,820 2,844,260
GNMA Seasoned 8%, '06 Aaa 253 263,601
GNMA 6.50%, '23 Aaa 1,963 1,949,241
----------
5,806,945
----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $22,579,804) 23,767,410
----------
NON-CONVERTIBLE BONDS--36.6%
Chemical--Specialty--1.1%
Borden Chemical & Plastics 9.50%,
'05 Ba 1,200 1,242,000
----------
Containers--2.1%
Owens-Illinois, Inc. 11%, '03 Ba 2,000 2,265,000
----------
Entertainment, Leisure & Gaming--1.9%
Paramount Communications Sr.
Debenture 8.25%, '22 Ba 2,000 2,070,280
----------
Hospital Management & Services--1.3%
Tenet Healthcare Corp. Sr. Note
9.625%, '02 Ba 500 551,250
Tenet Healthcare Corp. Sr. Sub.
Notes 10.125%, '05 Ba 750 832,500
----------
1,383,750
----------
Machinery--1.4%
Cincinnati Milacron, Inc. 8.375%,
'04 Ba 1,500 1,586,820
----------
Non-Agency Mortgage-Backed Securities--25.1%
Kidder Peabody Acceptance Corp.
94-C2, D 7.18%, '05 BBB((c)) 500 497,656
Nomura Asset Sec Corp. 94-MD2, A6,
7.24%, '03 (e) A((c)) 1,366 1,356,838
Prudential Home Mtg. 93-L, 3B2 144A
6.641%, '23 (b) NR 1,500 1,443,047
Resolution Trust Corp. 92-C7, A1C
7.90%, '23 Aa 729 731,601
Resolution Trust Corp. 92-C8, D
8.835%, '23 Baa 2,063 2,155,671
Resolution Trust Corp. 93-C3, A4
6.55%, '24 Aaa 907 901,403
Resolution Trust Corp. 94-C2, C 8%,
'25 A((c)) 2,600 2,687,750
Resolution Trust Corp. 94-C2, D 8%,
'25 BBB((c)) 975 996,130
Resolution Trust Corp. 94-C1, D 8%,
'26 BBB((c)) 1,904 1,941,192
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa 2,250 2,269,688
Resolution Trust Corp. 95-C2, C 7%,
'27 A 2,000 1,980,794
Resolution Trust Corp. 95-1, M2
7.50%, '28 Aa 2,663 2,707,213
Resolution Trust Corp. 95-2, C1
7.45%, '29 Aa 1,933 1,918,110
Ryland Mortgage Securities Corp.
92-A, 1A 8.33%, '30 (e) A-((c)) $1,010 $ 1,025,637
Securitized Asset Sales 95-A, M
7.53%, '24 AA+((c)) 1,839 1,896,819
White Hall Partners 95-C1, B 144A
7.43%, '25 (b) AA((c)) 2,750 2,814,453
----------
27,324,002
----------
Paper & Forest Products--0.9%
Buckeye Cellulose 8.50%, '05 Ba 950 982,062
----------
Publishing, Broadcasting, Printing & Cable--1.3%
Continental Cablevision 144A 8.30%,
'06 (b) BB+((c)) 1,500 1,509,375
----------
Retail--Food--0.1%
ARA Services, Inc. 10.625%, '00 Ba 54 61,695
----------
Telecommunications Equipment--1.1%
Panamsat L.P. 0%, '03 (e) B 1,500 1,215,000
----------
Textile & Apparel--0.3%
Westpoint Stevens 9.375%, '05 B 300 298,500
----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $38,199,368) 39,938,484
----------
FOREIGN NON-CONVERTIBLE BONDS--12.2%
Argentina--1.5%
Bridas Corp. Yankee 12.50%, '99 B 1,600 1,592,000
----------
Brazil--0.9%
Aracruz Cellulose 144A 10.375%, '02
(b) NR 1,000 955,000
----------
Canada--1.4%
Videotron Groupe Ltd. 10.25%, '02 Ba 1,400 1,480,500
----------
Chile--1.8%
CSAV 144A 7.375%, '03 (b) BBB((c)) 2,000 1,990,000
----------
Colombia--2.3%
Centragas Yankee 144A 10.65%, '10
(b) BBB-((c)) 2,413 2,557,961
----------
Indonesia--1.4%
P.T. Polysindo 13%, '01 B 1,500 1,560,000
----------
Mexico--0.5%
Banco Mexico 7.25%, '04 Ba 750 586,875
----------
Philippines--1.2%
Subic Power Corp. 144A 9.50%, '08
(b) NR 1,398 1,333,079
----------
Singapore--1.2%
Asia Pulp & Paper Co. Yankee
11.75%, '05 Ba 1,300 1,257,750
----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $12,653,916) 13,313,165
----------
FOREIGN GOVERNMENT SECURITIES--12.4%
Argentina--2.9%
Republic of Argentina Bear FRB
Float 6.8125%, '05 (e) B 2,500 1,779,688
Republic of Argentina Par L-GP 5%,
'23 (e) B 2,500 1,426,562
----------
3,206,250
----------
Brazil--3.4%
Republic of Brazil interest
capitalization, Series C Euro 8%,
'14 B+((c)) 3,184 1,820,638
Republic of Brazil El-L Euro Float
6.8125%, '06 (e) NR 2,000 1,376,250
Republic of Brazil Par Z-L Euro
4.25%, '24 (e) NR 1,000 528,750
----------
3,725,638
----------
See Notes to Financial Statements
2-12
<PAGE>
BOND SERIES
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------- ------------ -----------
Costa Rica--1.3%
Central Bank of Costa Rica 6.25%,
'10 NR $2,200 $ 1,375,000
----------
Ecuador--1.0%
Republic of Ecuador PDI interest
capitalization, Euro 6.8125%, '15
(e) NR 3,064 1,026,594
----------
Philippines--1.0%
Central Bank Philippines PCIR Euro
6.25%, '17 (e) BB((c)) 1,500 1,117,500
----------
Poland--2.8%
Poland Global Reg. Par Euro 2.75%,
'24 (e) Baa 1,000 471,250
Poland PDI 3.75%, '14 (e) Baa 4,000 2,590,000
----------
3,061,250
----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $11,650,404) 13,512,232
----------
MUNICIPAL BONDS--9.4%
Florida--1.5%
Palm Beach Waste Revenue Project B
10.50%, '11 NR 1,500 1,633,950
----------
Illinois--0.6%
Illinois Health Facilities
Authority 7%, '08 Aaa 550 638,622
----------
Michigan--0.2%
Brighton School District 0%, '18 Aaa 600 174,474
----------
New York--1.3%
Beth Israel Medical Center Taxable
7.58%, '15 Aaa 1,395 1,429,666
----------
Pennsylvania--4.3%
Pennsylvania Economic Development
Finance Authority 9.50%, '12 NR 2,500 2,675,000
Pennsylvania Financial Development
6.75%, '07 NR 1,950 1,993,738
----------
4,668,738
----------
Virginia--1.5%
Pittsylvania County Series B
7.65%, '10 NR 1,500 1,681,214
----------
TOTAL MUNICIPAL BONDS
(Identified cost $9,469,403) 10,226,664
----------
SHARES VALUE
------------ -----------
WARRANTS--0.1%
Paper & Forest Products--0.1%
SD Warren Warrants 144A (b)(d) 30,000 $ 150,000
----------
TOTAL WARRANTS
(Identified cost $142,500) 150,000
----------
PREFERRED STOCKS--4.1%
Paper & Forest Products--0.8%
SD Warren Co. Pfd. PIK 144A
Series B (b) 30,000 834,358
----------
Telecommunications Equipment--3.3%
Panamsat Corp. Pfd. 12.75%, '05 3,241 3,604,864
----------
TOTAL PREFERRED STOCKS
(Identified cost $3,926,836) 4,439,222
----------
TOTAL LONG-TERM INVESTMENTS--96.6%
(Identified cost $98,622,231) 105,347,177
----------
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000)
------- ------------
SHORT-TERM OBLIGATIONS--1.5%
Commercial Paper--1.5%
McDonalds' Corp. 5.75%, 1-2-96 P-1 $1,580 1,579,748
----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,579,748) 1,579,748
----------
TOTAL INVESTMENTS--98.1%
(Identified cost $100,201,979) 106,926,925((a))
Cash and receivables, less liabilities--1.9% 2,118,615
----------
NET ASSETS--100.0% $109,045,540
==========
((a)) Federal Income Tax Information: Net unrealized appreciation of
investment securities is comprised of gross appreciation of $7,197,217
and gross depreciation of $402,760 for income tax purposes. At December
31, 1995 the aggregate cost of securities for federal income tax
purposes was $100,132,468.
((b)) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At December
31, 1995, these securities amounted to a value of $13,587,273 or 12.5%
of net assets.
((c)) As rated by Standard & Poor's, Duff & Phelps or Fitch.
((d)) Non-income producing.
((e)) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
See Notes to Financial Statements
2-13
<PAGE>
BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value (Identified
cost $100,201,979) $106,926,925
Cash 301,854
Receivable for investment securities sold 2,003,737
Interest and dividends receivable 1,931,573
------------
Total assets 111,164,089
------------
Liabilities
Payable for investment securities purchased 1,999,140
Investment advisory fee 42,824
Financial agent fee 5,443
Trustee fee 2,900
Accrued expenses 68,242
------------
Total liabilities 2,118,549
------------
Net Assets $109,045,540
============
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $103,960,390
Undistributed net investment income 135,344
Accumulated net realized loss (1,775,140)
Net unrealized appreciation 6,724,946
------------
Net Assets $109,045,540
============
Shares of beneficial interest outstanding, $1
par value, unlimited authorization 10,668,660
============
Net asset value and offering price per share $10.22
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment Income
Interest $ 8,004,237
Dividends 419,853
------------
Total investment income 8,424,090
------------
Expenses
Investment advisory fee 458,093
Financial agent fee 54,971
Custodian 74,285
Professional 27,799
Printing 25,694
Trustees' fee 15,743
Miscellaneous 10,706
Expenses borne by investment adviser (70,000)
------------
Total expenses 597,291
Custodian fees paid indirectly (2,705)
------------
Net expenses 594,586
------------
Net investment income 7,829,504
------------
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain from investment
transactions 1,405,058
Net unrealized appreciation of investment
securities 10,007,140
------------
Net gain on investments 11,412,198
------------
Net increase in net assets resulting from
operations $19,241,702
============
See Notes to Financial Statements
2-14
<PAGE>
BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
------------ -------------
From Operations
Net investment income $ 7,829,504 $ 5,726,303
Net realized gain (loss) 1,405,058 (4,421,816)
Net unrealized appreciation (depreciation) 10,007,140 (5,570,839)
---------- ------------
Net increase (decrease) in net assets
resulting from operations 19,241,702 (4,266,352)
---------- ------------
From Distributions to Shareholders
Net investment income (7,763,175) (5,746,498)
---------- ------------
Decrease in net assets from distributions
to shareholders (7,763,175) (5,746,498)
---------- ------------
From Shares of Beneficial Interest
Transactions
Proceeds from sales of shares (4,715,281 and
4,380,630 shares, respectively) 45,595,165 42,304,393
Net asset value of shares issued from
reinvestment of distributions
(796,247 and 617,518 shares, respectively) 7,763,175 5,746,498
Cost of shares repurchased (3,158,605 and
4,414,044 shares, respectively) (30,477,355) (42,745,168)
---------- ------------
Increase in net assets from share
transactions 22,880,985 5,305,723
---------- ------------
Net increase (decrease) in net assets 34,359,512 (4,707,127)
Net Assets
Beginning of period 74,686,028 79,393,155
---------- ------------
End of period (including undistributed net
investment income of $135,344 and $23,073,
respectively) $109,045,540 $ 74,686,028
========== ============
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.98 $10.27 $9.58 $9.33 $8.48
Income from investment operations
Net investment income ((2)) 0.83((1)) 0.72((1)) 0.66((1)) 0.66 0.74
Net realized and unrealized gain (loss) 1.22 (1.28) 0.84 0.25 0.85
---------- ---------- ---------- ------- --------
Total from investment operations 2.05 (0.56) 1.50 0.91 1.59
---------- ---------- ---------- ------- --------
Less distributions
Dividends from net investment income (0.81) (0.73) (0.66) (0.66) (0.74)
Dividends from net realized capital gains -- -- (0.15) -- --
---------- ---------- ---------- ------- --------
Total distributions (0.81) (0.73) (0.81) (0.66) (0.74)
---------- ---------- ---------- ------- --------
Change in net asset value 1.24 (1.29) 0.69 0.25 0.85
---------- ---------- ---------- ------- --------
Net asset value, end of period $10.22 $8.98 $10.27 $9.58 $9.33
========== ========== ========== ======= ========
Total return 23.54% -5.47% 15.90% 10.03% 19.41%
Ratios/supplemental data:
Net assets, end of period (thousands) $109,046 $74,686 $79,393 $43,090 $21,957
Ratio to average net assets of:
Operating expenses 0.65%((3)) 0.66% 0.65% 0.50% 0.50%
Net investment income 8.55% 7.62% 6.71% 7.47% 8.65%
Portfolio turnover rate 147% 181% 169% 166% 269%
</TABLE>
((1)) Includes reimbursement of operating expenses by investment adviser of
$0.007, $0.006 and $0.005 per share, respectively.
((2)) Computed using average shares outstanding.
((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.
See Notes to Financial Statements
2-15
<PAGE>
TOTAL RETURN SERIES
By any measure, the financial markets' returns for 1995 were outstanding.
The combination of double-digit earnings per share growth and nearly a 200
basis-point decline in long-term interest rates proved to be a powerful
combination. Over the last twelve months, the Standard & Poor's 500 Composite
Index, a commonly used, unmanaged indicator of stock performance, returned
37.51% and the Lehman Brothers Aggregate Bond Index, an unmanaged gauge of
bond market performance, posted a total return of 18.48%.
For the 1995 calendar year, Phoenix Edge Total Return Series provided a
return of 18.22% while its peer group's average--the 145 flexible funds
tracked by Lipper Analytical Services--earned 24.98%. As with the broad
market returns noted above, all of these figures assume reinvestment of any
distributions. Overall, the Fund's relative underperformance resulted from
the portfolio's conservative overweighting for most of the year in cash
reserves. In addition, the portfolio's focus on consumer cyclicals in lieu of
technology stocks caused the equity portion to lag the market throughout the
summer and early fall months.
In September, the bond position was increased to 40% and enhanced through
diversifying the dominate U.S. Treasury position into other fixed-income
sectors that offer greater total-return potential. In addition, the duration
of the bonds was extended to benefit from the expected strength in the bond
market. These actions proved beneficial to results during the fourth quarter.
At yearend, the portfolio was positioned in anticipation of a stable bond
market and greater volatility in the stock market, as corporate earnings are
expected to show disappointments throughout 1996. As of December 31, 1995,
the portfolio's asset allocation mix was 50% stocks, 28% bonds and 22% cash
reserves.
[typeset representation of line chart]
Total S&P 500 Lipper Analytical
Return Stock Service Flexible
Series Index* Fund**
12/31/85 10000 10000 10000
12/31/86 11561 11821 11511
12/31/87 13015 12433 12346
12/31/88 13319 14485 13310
12/31/89 15966 19038 15606
12/31/90 16864 18429 15643
12/31/91 21828 24059 19554
12/31/92 24157 25909 21112
12/31/93 26820 28500 23762
12/31/94 26431 28877 23208
12/31/95 31246 39708 29005
[end chart]
Average Annual Total Returns for Periods Ending 12/31/95
1 Year 5 Years 10 Years
- ------------------------------------------------------------------------------
Total Return Series 18.22% 13.13% 12.07%
- ------------------------------------------------------------------------------
S&P 500 Index* 37.51% 16.59% 14.79%
- ------------------------------------------------------------------------------
Lipper Analytical Service Flexible Fund** 24.98% 13.15% 11.24%
- ------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/85.
Returns shown include the reinvestment of all distributions at net asset
value, and the change in share price for the stated period. Returns indicate
past performance, which is not predictive of future performance. Investment
return and net asset value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
* The S&P 500 Stock Index is an unmanaged but commonly used measure of stock
total return performance.
** The Lipper Analytical Services Flexible Fund category is an average
composed of 145 funds; the 5 and 10 year returns are derived from compounding
the yearly returns. Performance is based on the reinvestment of all
distributions and does not reflect the effects of sales charges.
2-16
<PAGE>
TOTAL RETURN SERIES
SCHEDULE OF INVESTMENTS
December 31, 1995
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------- ------------ -----------
U.S. GOVERNMENT SECURITIES--14.5%
U.S. Treasury Notes--11.8%
U.S. Treasury Notes 7.25%, '96 AAA $ 7,000 $ 7,121,870
U.S. Treasury Notes 7.50%, '97 AAA 14,500 14,845,100
U.S. Treasury Notes 5.75%, '97 AAA 19,500 19,674,720
----------
41,641,690
----------
Agency Mortgage-Backed Securities--2.7%
GNMA 6.50%, '23 AAA 9,727 9,656,963
----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $50,495,017) 51,298,653
----------
SHARES
----------
COMMON STOCKS--46.3%
Advertising--2.0%
Interpublic Group Companies, Inc. 74,800 3,244,450
Omnicom Group, Inc. 104,000 3,874,000
----------
7,118,450
----------
Aerospace & Defense--2.6%
Boeing Company 70,000 5,486,250
United Technologies Corp. 40,000 3,795,000
----------
9,281,250
----------
Airlines--0.6%
Delta Airlines, Inc. 30,000 2,216,250
----------
Banks--3.3%
Bank of Boston Corp. 35,000 1,618,750
BankAmerica Corp. 25,000 1,618,750
Bankers Trust New York Corp. 40,000 2,660,000
Barnett Banks, Inc. 30,000 1,770,000
Chase Manhattan Corp. 20,000 1,212,500
Citicorp 40,000 2,690,000
----------
11,570,000
----------
Chemical--1.6%
IMC Global, Inc. 46,000 1,880,250
Monsanto Co. 30,000 3,675,000
----------
5,555,250
----------
Computer Software & Services--3.2%
First Data Corp. 65,400 4,373,625
Informix Corp. (b) 120,000 3,600,000
Oracle Systems Corp. (b) 75,000 3,178,125
----------
11,151,750
----------
Cosmetics & Soaps--0.1%
Colgate Palmolive Co. 4,000 281,000
----------
Diversified Financial Services--2.0%
Donaldson Lufkin & Jenrette 20,000 625,000
Morgan Stanley Group, Inc. 25,000 2,015,625
Paine Webber Group, Inc. 80,000 1,600,000
Travelers Group, Inc. 45,000 2,829,375
----------
7,070,000
----------
Electrical Equipment--3.9%
Emerson Electric Co. 39,000 3,188,250
General Electric Co. 50,000 3,600,000
Honeywell, Inc. 145,000 7,050,625
----------
13,838,875
----------
Electronics--1.7%
Altera Corp. (b) 25,000 1,243,750
Applied Materials, Inc. (b) 8,000 315,000
Integrated Device Technology, Inc. (b) 110,000 1,416,250
LSI Logic Corp. (b) 35,000 1,146,250
Oak Technology, Inc. (b) 20,000 845,000
S3, Inc. (b) 25,000 440,625
Texas Instruments, Inc. 13,000 672,750
----------
6,079,625
----------
Engineering & Construction--1.1%
Fluor Corp. 60,000 3,960,000
----------
Entertainment, Leisure & Gaming--1.5%
Gaylord Entertainment Co. Class A 75,750 2,102,063
Walt Disney Co. 55,000 3,245,000
----------
5,347,063
----------
Food--0.6%
Nabisco Holdings Corp. Class A 60,000 1,957,500
----------
SHARES VALUE
------------ -----------
Healthcare--Diversified--0.7%
American Home Products Corp. 26,000 $ 2,522,000
----------
Healthcare--Drugs--4.4%
Amgen, Inc. (b) 50,000 2,968,750
Ergo Science Corp. (b) 30,000 427,500
Genzyme Corp. (b) 20,000 1,247,500
Merck & Co. Inc. 85,000 5,588,750
Schering-Plough Corp. 60,000 3,285,000
Watson Pharmaceuticals, Inc. (b) 40,000 1,960,000
----------
15,477,500
----------
Hospital Management & Services--0.4%
Manor Care, Inc. 40,000 1,400,000
----------
Insurance--2.1%
Allstate Corp. 100,000 4,112,500
American International Group, Inc. 15,000 1,387,500
Cigna Corp. 20,000 2,065,000
----------
7,565,000
----------
Medical Products & Supplies--1.9%
Cordis Corp. (b) 5,000 502,500
Empi, Inc. (b) 45,000 1,147,500
Johnson & Johnson 20,000 1,712,500
Medtronic, Inc. 60,000 3,352,500
----------
6,715,000
----------
Natural Gas--1.0%
Anadarko Petroleum Corp. 65,000 3,518,125
----------
Office & Business Equipment--2.1%
Digital Equipment Corp. (b) 70,000 4,488,750
Hewlett Packard Co. 21,000 1,758,750
Silicon Graphics, Inc. (b) 42,000 1,155,000
----------
7,402,500
----------
Oil--1.1%
Mobil Corp. 35,000 3,920,000
----------
Oil Service & Equipment--2.8%
Halliburton Co. 75,000 3,796,875
Schlumberger Ltd. 50,000 3,462,500
Tidewater, Inc. 85,000 2,677,500
----------
9,936,875
----------
Publishing, Broadcasting, Printing & Cable--0.7%
Evergreen Media Corp. Class A (b) 20,000 640,000
Lin Television Corp. (b) 57,000 1,695,750
----------
2,335,750
----------
Retail--0.2%
OfficeMax, Inc. (b) 35,000 783,125
----------
Telecommunications Equipment--2.0%
Ascend Communications, Inc. (b) 10,000 811,250
Bay Networks, Inc. (b) 30,000 1,233,750
Cisco Systems, Inc. (b) 50,000 3,731,250
Gandalf Technologies, Inc. (b) 10,000 170,000
3Com Corp. (b) 25,000 1,165,625
----------
7,111,875
----------
Tobacco--1.0%
Philip Morris Companies, Inc. 37,800 3,420,900
----------
Utility--Telephone--1.7%
AT&T Corp. 25,000 1,618,750
Bellsouth Corp. 100,000 4,350,000
----------
5,968,750
----------
TOTAL COMMON STOCKS
(Identified cost $147,846,313) 163,504,413
----------
FOREIGN COMMON STOCKS--3.6%
Chemical--1.8%
Potash Corp. of Saskatchewan, Inc. (Canada) 90,000 6,378,750
----------
Oil--0.8%
British Petroleum PLC ADR (United Kingdom) 28,000 2,859,500
----------
Telecommunications Equipment--1.0%
Ericsson L.M. Telephone Co. Class B ADR
(Sweden) 179,300 3,496,350
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $10,557,865) 12,734,600
----------
See Notes to Financial Statements
2-17
<PAGE>
TOTAL RETURN SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
--------- -------- -------------
MUNICIPAL BONDS--4.8%
California--1.9%
Kern County Pension Obligation
7.26%, '14 AAA $ 1,500 $ 1,568,325
Long Beach Pension Obligation
6.87%, '06 AAA 840 864,688
Los Angeles County Series B Rev.
5.25%, '23 AAA 225 219,281
N. California Power Agency Rev. A
5.50%, '24 AAA 1,530 1,531,438
San Bernardino County Obligation
Revenue 6.87%, '08 AAA 410 421,841
San Bernardino County Obligation
Revenue 6.94%, '09 AAA 1,110 1,145,675
Ventura County Pension 6.54%, '05 AAA 975 985,121
------------
6,736,369
------------
Florida--1.5%
Florida Board of Education Series
E 5.25%, '23 AA 1,665 1,625,223
Florida State Turnpike Authority
Sinker 5%, '19 AAA 135 130,136
Miami Beach Spec. Oblig. Taxable
8.60%, '21 AAA 3,210 3,641,841
------------
5,397,200
------------
Georgia--0.1%
De Kalb County Water & Sewer
Sinker 5.25%, '23 AA 190 186,778
------------
Massachusetts--0.1%
Massachusetts Bay Transit
Authority Series B 5.375%, '25 AAA 225 220,678
------------
Michigan--0.1%
Michigan Public Power Agency
Sinker 5.25%, '18 AAA 225 220,970
------------
New York--0.2%
New York State Power Rev. Series
CC 5.25%, '18 AA- 765 750,335
------------
South Carolina--0.5%
South Carolina Public Service
Series C 5%, '25 AAA 1,270 1,205,090
South Carolina Public Service Rev.
C 5.125%, '21 A+ 610 571,283
------------
1,776,373
------------
Utah--0.4%
Intermountain Power Series A
5%, '23 AA- 1,505 1,403,127
------------
Washington--0.0%
Seattle Drain & Wastewater Sinker
5.25%, '25 AAA 135 131,055
------------
Other Territories--0.0%
Puerto Rico Commonwealth Sinker
5.375%, '22 AAA 155 154,502
------------
TOTAL MUNICIPAL BONDS
(Identified cost $16,299,559) 16,977,387
------------
NON-CONVERTIBLE BONDS--5.3%
Non-Agency Mortgage-Backed Securities--5.3%
CS First Boston Mtg 95-AE1, B
7.182%, '27 AA- 1,350 1,363,922
DLJ Mtg 95-T10, A 144A 6.955%, '23
(d) Aa((c)) 5,100 4,988,438
Lehman Commercial Conduit 95-C2, B
7.18%, '05 (e) AA 1,650 1,723,219
Non-Agency Mortgage-Backed Securities--continued
Merrill Lynch Mortgage, Inc.
95-C2, B 7.53%, '21 AA $ 994 $ 1,024,878
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa((c)) 1,600 1,671,500
Resolution Trust Corp. 95-C2, B
6.80%, '27 Aa((c)) 925 922,780
Resolution Trust Corp. 95-C1, A 5
6.0205%, '27 Aaa((c)) 1,887 1,879,128
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa((c)) 1,900 1,916,625
Resolution Trust Corp. 95-2, M1,
7.15%, '29 Aa((c)) 1,648 1,660,112
SASC 1995-C4, B 7%, '26 AA 1,650 1,674,750
------------
18,825,352
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $18,562,707) 18,825,352
------------
FOREIGN NON-CONVERTIBLE BONDS--3.8%
Colombia--1.9%
Financiera Energ. Nacional EMTN
144A 9%, '99 (d) BBB- 3,200 3,356,000
Republic of Colombia Yankee 7.25%,
'04 BBB- 3,500 3,360,000
------------
6,716,000
------------
Poland--1.9%
Poland Par 2.75%, '24 (e) Baa3((c)) 7,400 3,487,250
Poland PDI 3.75%, '14 (e) Baa3((c)) 5,200 3,367,000
------------
6,854,250
------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $13,252,816) 13,570,250
------------
TOTAL LONG-TERM INVESTMENTS--78.3%
(Identified cost $257,014,277) 276,910,655
------------
SHORT-TERM OBLIGATIONS--21.1%
Commercial Paper--21.1%
Philip Morris Companies, Inc.
5.90%, 1-4-96 A-1 7,955 7,951,089
Abbott Labs 5.63%, 1-8-96 A-1+ 7,000 6,992,337
Campbell Soup Co. 5.78%,
1-8-96 A-1+ 1,515 1,513,297
Gannett, Inc. 5.77%, 1-8-96 A-1 8,000 7,991,024
Albertson's, Inc. 5.73%, 1-10-96 A-1 5,275 5,267,444
AT&T Corp. 5.65%, 1-11-96 A-1+ 4,330 4,323,204
BellSouth Telecommunications, Inc.
5.95%, 1-12-96 A-1+ 1,945 1,941,464
Wisconsin Electric Power Co.
5.60%, 1-22-96 A-1+ 5,000 4,983,667
Southwestern Bell Telephone Co.
5.55%, 1-25-96 A-1+ 13,525 13,474,958
Pfizer, Inc. 5.77%, 1-26-96 A-1+ 7,825 7,793,646
AT&T Corp. 5.57%, 2-2-96 A-1+ 4,560 4,537,423
Coca Cola Co. 5.55%, 2-9-96 A-1+ 5,540 5,506,691
Southwestern Bell Telephone Co.
5.50%, 2-20-96 A-1+ 2,540 2,520,596
------------
74,796,840
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $74,796,840) 74,796,840
------------
TOTAL INVESTMENTS--99.4%
(Identified cost $331,811,117) 351,707,495((a))
Cash and receivables, less liabilities--0.6% 2,130,654
------------
NET ASSETS--100.0% $353,838,149
============
((a)) Federal Income Tax Information: Net unrealized appreciation of
investment securities is comprised of gross appreciation of $24,063,565
and gross depreciation of $4,167,187 for income tax purposes. At
December 31, 1995 the aggregate cost of securities for federal income
tax purposes was $331,811,117.
((b)) Non-income producing.
((c)) As rated by Moody's.
((d)) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At December
31, 1995, these securities amounted to a value of $8,344,438 or 2.4% of
net assets.
((e)) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
ADR--American Depository Receipt
See Notes to Financial Statements
2-18
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value (Identified
cost $331,811,117) $351,707,495
Cash 297,223
Receivable for investment securities sold 1,647,125
Interest and dividends receivable 1,848,932
------------
Total assets 355,500,775
------------
Liabilities
Payable for investment securities purchased 1,401,790
Investment advisory fee 173,526
Financial agent fee 17,772
Trustee fee 2,892
Accrued expenses 66,646
------------
Total liabilities 1,662,626
------------
Net Assets $353,838,149
============
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $331,831,260
Undistributed net investment income 154,166
Accumulated net realized gain 1,956,345
Net unrealized appreciation 19,896,378
------------
Net Assets $353,838,149
============
Shares of beneficial interest outstanding, $1
par value, unlimited authorization 25,951,535
============
Net asset value and offering price per share $13.63
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment Income
Interest $10,278,761
Dividends 2,407,992
------------
Total investment income 12,686,753
------------
Expenses
Investment advisory fee 1,831,161
Financial agent fee 192,596
Custodian 57,981
Professional 26,447
Printing 27,204
Trustees' fee 10,926
Miscellaneous 12,166
------------
Total expenses 2,158,481
Custodian fees paid indirectly (10,551)
------------
Net expenses 2,147,930
------------
Net investment income 10,538,823
------------
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain from investment
transactions 23,633,671
Net realized loss on foreign currency
transactions (875)
Net unrealized appreciation of investment
securities 19,082,703
------------
Net gain on investments 42,715,499
------------
Net increase in net assets resulting from
operations $53,254,322
============
See Notes to Financial Statements
2-19
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
------------ -------------
From Operations
Net investment income $ 10,538,823 $ 7,505,444
Net realized gain (loss) 23,632,796 (3,768,797)
Net unrealized appreciation (depreciation) 19,082,703 (7,374,304)
----------- ------------
Net increase (decrease) in net assets
resulting from operations 53,254,322 (3,637,657)
----------- ------------
From Distributions to Shareholders
Net investment income (10,497,130) (7,923,603)
Net realized gains (21,419,046) (9,607,065)
----------- ------------
Decrease in net assets from distributions
to shareholders (31,916,176) (17,530,668)
----------- ------------
From Shares of Beneficial Interest Transactions
Proceeds from sales of shares (5,465,213 and
6,357,542 shares, respectively) 75,182,133 84,155,117
Net asset value of shares issued from
reinvestment of distributions
(2,341,879 and 1,367,449 shares,
respectively) 31,916,176 17,530,668
Cost of shares repurchased (4,646,668 and
3,611,175 shares, respectively) (63,681,697) (47,445,390)
----------- ------------
Increase in net assets from share
transactions 43,416,612 54,240,395
----------- ------------
Net increase in net assets 64,754,758 33,072,070
Net Assets
Beginning of period 289,083,391 256,011,321
----------- ------------
End of period (including undistributed net
investment income and distributions in
excess of net investment income of $154,166
and ($22,102), respectively $353,838,149 $289,083,391
=========== ============
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
---------- ------------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.68 $13.71 $12.86 $12.97 $11.07
Income from investment operations
Net investment income 0.45 0.36((1)(3)) 0.23((3)) 0.37((3)) 0.42((3))
Net realized and unrealized gain (loss) 1.84 (0.56) 1.17 0.99 2.76
--------- ---------------- --------- --------- ----------
Total from investment operations 2.29 (0.20) 1.40 1.36 3.18
--------- ---------------- --------- --------- ----------
Less distributions
Dividends from net investment income (0.45) (0.37) (0.23) (0.37) (0.42)
Dividends from net realized gains (0.89) (0.46) (0.32) (1.10) (0.86)
--------- ---------------- --------- --------- ----------
Total distributions (1.34) (0.83) (0.55) (1.47) (1.28)
--------- ---------------- --------- --------- ----------
Change in net asset value 0.95 (1.03) 0.85 (0.11) 1.90
--------- ---------------- --------- --------- ----------
Net asset value, end of period $13.63 $12.68 $13.71 $12.86 $12.97
========= ================ ========= ========= ==========
Total return 18.22% -1.45% 11.02% 10.67% 29.44%
Ratios/supplemental data:
Net assets, end of period (thousands) $353,838 $289,083 $256,011 $163,628 $98,415
Ratio to average net assets of:
Operating expenses 0.67%((2)) 0.74% 0.74% 0.50% 0.50%
Net investment income 3.28% 2.71% 1.82% 2.90% 3.48%
Portfolio turnover rate 170% 220% 269% 326% 255%
</TABLE>
((1)) Includes reimbursement of operating expenses by investment adviser of
$0.001 per share.
((2)) 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.
((3)) Computed using average shares outstanding.
See Notes to Financial Statements
2-20
<PAGE>
INTERNATIONAL SERIES
While making general upward progress, world equity markets have oscillated
throughout this reporting period. This was due primarily to wide swings in
the economic outlook and earnings growth expectations. Early in the year,
there were worries about overheating economies, inflation and a shortage of
global productive capacity. Momentum in the markets was hampered by rising
interest rates but as investors' concerns eased, markets picked up again in
the second quarter. By October, investors began to worry about the lack of
growth: GDP in the U.S. did not greatly improve, Europe's growth slowed
sharply and Japan continued to trundle along the bottom. Overall, falling
interest rates greatly assisted equity markets in the second half of the
year. The Asian region was the only area where markets continued to struggle
as worries about too much economic growth and higher interest rates hampered
performance for most of the year.
The volatility of the U.S. Dollar had a significant impact on the
performance results. U.S. investors benefited from the declining U.S. dollar
in the first part of 1995 but lost ground as the dollar rebounded during the
second half of the year. In U.S. Dollar terms, Taiwan, Mexico and the
Philippines were among the worst performing countries during 1995, while
Switzerland, Sweden and Spain were among the best.
For the twelve months ended December 31, 1995, Phoenix Edge International
Fund posted a total return of 9.59%, while the market, as measured by the
Morgan Stanley Capital International EAFE Index, gained 11.55%. (All of these
figures assume reinvestment of any distributions.) The portfolio's relative
underperformance was due primarily to underweighting in Japan during the
second half of the year. Areas which contributed positively to performance
included exposure to technology and European stocks in the health care,
financial services, media, and capital goods sectors. Also helpful was our
hedge of yen into dollars, since the yen depreciated almost 20% over the last
six months. Holdings which hampered performance included European cyclicals,
much of our exposure to southeast Asia (particularly Korea and Taiwan) and
France, where turmoil in the government and its economic plans have troubled
the market for many months.
European growth rates have been revised down for 1995 and 1996 to
approximately 2% each year. Since we expect interest rates to fall further,
the second half of 1996 may well be stronger. With budget deficits coming
down because of spending restraints, monetary policy is the only option
available to create jobs in European countries.
In Japan, the outlook for 1996 growth has improved. A clearer statement on
bank restructuring is due in January, but individual banks have already taken
the initiative to write off bad loans at a faster pace. This clearing of the
decks, coupled with better-than-expected capital spending and a small
improvement from the consumer as deflation eases, could provide the first GDP
growth above 2% in 1996. This has helped the Japanese stock market
considerably in recent months and we expect further progress to be made.
In Southeast Asia, still the fastest growing part of the world, we expect
GDP growth in 1996 to be only slightly less than in 1995. However, after two
years of very poor performance, we believe 1996 will see an improved market,
providing governments stay the course and let their economies gently cool. We
also believe Latin America is past the worst of its recession, but still
expect growth to be relatively slow in 1996 (around 3%) since trouble spots
remain.
Overall, we expect foreign markets to perform well in 1996 due to their
attractive valuations, promising growth prospects and slower earnings
momentum in the United States. We are increasing the Fund's exposure to
economically sensitive areas in the Japanese market, broadening out from the
large exposure to technology which we held through most of 1995. We are
adding selectively to Asia and Latin Americas holdings as well. In Europe, we
shifted our focus from economically sensitive to growth and interest
rate-sensitive stocks in the fourth quarter--a focus we expect to maintain
until earnings expectations catch up with reality or we see signs of renewed
economic growth.
[typeset representation of line chart]
International Europe, Australia and EAFE excluding
Series the Far East (EAFE)* JAPAN
5/1/90 10000 10000 10000
12/31/90 9190 9640 10014
12/31/91 11008 10844 11608
12/31/92 9589 9559 11270
12/31/93 13275 12708 15498
12/31/94 13279 13732 15379
12/31/95 14552 15318 18541
[end chart]
Average Annual Total Returns for Periods Ending 12/31/95
From
Inception
5/1/90 to
1 Year 5 Years 12/31/95
- -------------------------------------------------------------------------------
International Series 9.59% 9.63% 6.84%
- -------------------------------------------------------------------------------
Morgan Stanley Capital International EAFE Index* 11.55% 9.71% 7.81%
- -------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 5/1/90
(inception of the Fund). Returns shown include the reinvestment of all
distributions at net asset value, and the change in share price for the
stated period. Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate so
that your shares, when redeemed, may be worth more or less than the original
cost. Foreign investing involves special risks such as currency fluctuation
and less public disclosure, as well as economic and political risks.
*The Morgan Stanley Capital International EAFE index is an unmanaged but
commonly used measure of foreign stock fund performance which includes
dividends reinvested. The EAFE index is an aggregate of 15 individual
country indexes in Europe, Australia, New Zealand and the Far East.
2-21
<PAGE>
INTERNATIONAL SERIES
SCHEDULE OF INVESTMENTS
December 31, 1995
SHARES VALUE
--------- -----------
COMMON STOCKS--93.4%
Argentina--1.7%
Quilmes (Beverages) 42,000 $ 655,200
YPF Sociedad Anonima ADR (Energy Sources) 75,000 1,621,875
----------
2,277,075
----------
Australia--1.2%
Australia & New Zealand Banking Group
(Banks) 350,000 1,642,862
----------
Austria--0.8%
Austria Mikro Systeme International
(Electronics) 6,200 1,006,633
----------
Chile--1.3%
Enersis SA ADR (Utility--Electric) 60,000 1,710,000
----------
Denmark--1.3%
Danisco A/S (Manufacturing--Food) 37,000 1,789,310
----------
Finland--1.1%
Valmet (Machinery) 56,800 1,425,887
----------
France--4.8%
Carrefour Supermarche (Retail--Food) 2,100 1,275,811
Christian Dior SA (Conglomerates) 16,300 1,759,892
Rexel (Business & Public Service) 10,200 1,724,925
SGS-Thomson Microelectronics (Electronics)
NV (b) 2,900 111,190
SGS-Thomson Microelectronics (Electronics)
ADR (b) 38,600 1,553,650
----------
6,425,468
----------
Germany--4.9%
Adidas AG (Textile & Apparel) (b) 33,800 1,792,496
Gehe AG (Health Care--Drugs) 2,900 1,479,178
Moebel Walther (Retail) 22,300 732,323
SGL Carbon AG (Specialty--Chemical) (b) 20,300 1,574,413
Standard Application Software AG Vorzug
(Computer Software & Services) 7,000 1,061,347
----------
6,639,757
----------
Hong Kong--8.2%
CDL Hotels International (Lodging &
Restaurants) 1,032,000 520,545
Cheung Kong Holdings, Ltd. (Real Estate
Development) 200,000 1,218,329
Dao Heng Bank Group, Ltd. (Banks) 200,000 719,099
First Pacific Co. (Conglomerates) 1,545,000 1,718,465
Guoco Group (Diversified Financial Services) 220,000 1,061,317
Henderson Land Development Corp. (Real
Estate Development) 150,000 904,047
HSBC Holdings PLC (Banks) 101,800 1,540,449
Hutchinson Whampoa (Conglomerates) 207,000 1,260,971
New World Development (Real Estate
Development) 480,000 2,092,112
----------
11,035,334
----------
Indonesia--1.9%
Matahari Putra Prima IDR (Retail) 87,000 153,154
PT Astra International (Automobiles) 483,000 1,003,422
PT Semen Gresik (Building Materials &
Components) 200,000 559,825
Wicaksana Overseas (Wholesale &
Distribution) 320,000 853,734
----------
2,570,135
----------
Italy--2.7%
Olivetti (Office & Business Equipment) (b) 2,216,700 1,778,783
Telecom Italia Mobile-DRNC (Utilty--
Telephone--Cellular)(b) 1,265,000 1,331,664
Telecom Italia Mobile SPA (Utility--
Telephone--Cellular) (b) 287,000 505,651
----------
3,616,098
----------
Japan--19.1%
Circle K Japan Co., Ltd. (Retail) (b) 41,000 1,808,503
Daimaru, Inc. (Retail) 202,000 1,566,626
Daiwa Securities Co., Ltd. (Financial
Services) 92,000 1,409,188
Japan--continued
Hankyu Department Store (Retail) 101,000 $ 1,498,086
Hoya (Electronics) 38,000 1,307,784
Keyence Corp. (Electronics) 9,000 1,038,278
Mitsubishi Bank (Banks) 78,000 1,837,490
Omron Corp. (Electronics) 48,000 1,107,496
Oriental Construction Co. (Engineering &
Construction) 62,000 1,322,326
Ricoh Corp. Ltd. (Office & Business
Equipment) 163,000 1,785,624
Rohm Co. (Electronics) 19,000 1,073,856
Sanwa Bank (Banks) 87,000 1,771,180
Sega Enterprises Ltd. (Entertainment,
Leisure & Gaming) 24,000 1,326,203
Shinko Electric Industries (Electronics) 15,000 604,935
SMC Corporation (Machinery) 22,000 1,593,189
TDK Corporation ORD (Electronics) 16,000 817,438
Tokyo Electron Ltd. (Electronics) 26,000 1,008,225
Toyoda Machine Works (Industrial Components) 149,000 1,437,253
Yokogawa Electric (Electronics) 146,000 1,381,423
----------
25,695,103
----------
Netherlands--6.6%
Ahrend Group NV (Office & Business
Equipment) 40,500 1,334,082
Fortis Amev NV (Insurance) 21,000 1,408,385
Gucci Group NV (Textiles & Apparel) (b) 36,000 1,358,787
Heineken NV (Beverages) 7,700 1,367,640
IHC Caland (Oil Service & Equipment) 57,500 1,937,114
Randstad Holdings NV (Professional Services) 31,000 1,407,948
----------
8,813,956
----------
Norway--1.7%
Uni Storebrand (Insurance) (b) 403,000 2,232,581
----------
Peru--1.4%
CPT B Pen (Utility--Telephone) 893,945 1,921,085
----------
Philippines--0.2%
Metropolitan Bank & Trust Co. (Banks) 15,043 292,497
----------
Poland--0.7%
Bank Gdanski (Banks) (b) 98,300 955,968
----------
Portugal--0.6%
Portugal Telecom (Telecommunications) (b) 40,000 753,756
----------
Singapore--1.2%
Development Bank of Singapore (Banks) 131,000 1,630,091
----------
South Korea--3.5%
Hana Bank (Banks) 44,990 937,875
Korea Electric Power Corporation
(Utilities--Electric) 34,210 1,494,131
Korea First Bank (Banks) 65,000 578,169
Korean Exchange Bank New (Banks) 6,720 79,430
L.G. Electronics (Electronics) 12,000 451,088
Pohang Iron & Steel Co., Ltd. (Metals &
Mining) 16,119 1,127,255
Samsung Electronics--GDR (Electronics) (b) 189 11,057
Samsung Electronics--GDR 144A (Electronics)
(b) (c) 311 16,753
Shinhan Bank (Banks) 2,210 48,500
----------
4,744,258
----------
Spain--1.7%
Iberdrola (Utilities--Electric) 252,000 2,305,712
----------
Sweden--5.1%
Astra AB Ser A (Health Care--Drugs) 49,050 1,961,348
Autoliv AB Reg S ORD (Auto & Truck Parts) 25,000 1,463,665
Frontec AB (Computer Software & Services)
(b) 37,000 1,066,363
Hoganas Series B (Auto & Truck Parts) 81,800 2,394,556
----------
6,885,932
----------
See Notes to Financial Statements
2-22
<PAGE>
INTERNTIONAAL SERIES
SHARES VALUE
--------- -----------
Switzerland--4.4%
Brown Boveri Bearer (Electrical Equipment) 520 $ 605,597
Brown Boveri B REGD (Electrical Equipment) 2,000 453,676
Ciba-Geigy AG Reg. (Heath Care--
Diversified) 1,820 1,605,510
Sandoz (Health Care--Drugs) 2,580 2,367,878
Swissair Reg. (Transportation--Airlines) (b) 1,100 803,059
----------
5,835,720
----------
Taiwan--2.5%
The Taiwan Fund, Inc. (Multi-Industry) 64,750 1,327,375
The R.O.C. Taiwan Fund (Multi-Industry) (b) 200,000 2,100,000
----------
3,427,375
----------
Thailand--2.3%
General Finance Securities (Financial
Services) 110,000 506,566
Krung Thai Bank (Banks) 110,000 454,163
Land & House Co. Ltd. (Real Estate
Development) 35,000 575,246
PTT Exploration & Production (Oil) (b) 146,000 1,530,180
----------
3,066,155
----------
United Kingdom--12.5%
Allied Irish Banks PLC (Banks) 280,000 1,526,087
Astec (BSR) PLC (Electronics) 718,000 1,276,568
British Aerospace Ord. (Aerospace & Defense) 124,000 1,534,596
British Airways PLC (Airlines) 297,000 2,149,099
Glaxo Wellcome PLC Spons ADR (Health
Care--Drugs) 48,000 1,356,000
Hays PLC (Professional Services) 76,000 442,547
Powergen PLC (Utilities--Electrical & Gas) 161,000 1,331,250
Reed International PLC (Broadcasting,
Publishing & Cable) 88,000 1,341,863
Shell Transport & Trading Co. PLC (Energy
Sources) 153,000 2,024,162
Standard Chartered PLC (Banks) 164,000 1,395,528
Takare (Hospital Management & Services) 256,000 711,553
WPP Group (Advertising) 686,000 1,746,957
----------
16,836,210
----------
TOTAL COMMON STOCKS
(Identified cost $113,650,644) 125,534,958
----------
STANDARD
& POOR'S PAR
RATINGS VALUE
(Unaudited) (000)
--------- --------
SHORT-TERM OBLIGATIONS--6.2%
Commercial Paper--3.7%
McDonald's Corp. 5.75%, 1-2-96 A-1+ $4,000 3,999,361
Coca Cola Co. 5.70%, 1-12-96 A-1+ 1,020 1,018,224
---------
5,017,585
---------
Federal Agency Securities--2.5%
Federal Home Loan Mortgage 5.52%
1-16-96 (d) 3,400 3,392,180
---------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $8,409,765) 8,409,765
---------
TOTAL INVESTMENTS--99.6%
(Identified cost $122,060,409) 133,944,723((a))
Cash and receivables, less liabilities--0.4% 509,851
---------
NET ASSETS--100.0% $134,454,574
=========
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of
Common Stocks
Advertising 1.4%
Aerospace & Defense 1.2
Airlines 2.4
Auto & Truck Parts 3.1
Automobiles 0.8
Banks 12.3
Beverages 1.6
Broadcasting, Publishing & Cable 1.1
Building Materials & Components 0.4
Business & Public Service 1.4
Computer Software & Services 1.7
Conglomerates 3.8
Diversified Financial Services 0.8
Electrical Equipment 0.8
Electronics 10.2
Energy Sources 2.9
Engineering & Construction 1.1
Entertainment, Leisure & Gaming 1.1
Financial Services 1.5
Health Care--Diversified 1.3
Health Care--Drugs 5.7
Hospital Management & Services 0.6
Industrial Components 1.1
Insurance 2.9
Lodging & Restaurants 0.4
Machinery 2.4
Manufacturing--Food 1.4
Metals & Mining 0.9
Multi-Industry 2.7
Office & Business Equipment 3.9
Oil (Oil Service & Equipment) 2.7
Professional Services 1.5
Real Estate Development 3.8
Retail (Retail--Food) 5.6
Specialty--Chemical 1.3
Telecommunications 0.6
Textile & Apparel 2.5
Utility--Electric (Utility--Electrical & Gas) 5.4
Utility--Telephone 3.0
Wholesale & Distribution 0.7
--------
100.0%
========
((a)) Federal Income Tax Information: Net unrealized appreciation of
investment securities is comprised of gross appreciation of $13,574,959
and gross depreciation of $1,706,742 for income tax purposes. At
December 31, 1995 the aggregate cost of securities for federal income
tax purposes was $122,076,506.
((b)) Non-income producing.
((c)) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At December
31, 1995, these securities amounted to a value of $16,753 or 0.01% of
net assets.
((d)) Segregated as collateral for forward currency contracts. At December
31, 1995, these securities amounted to $3,392,180 or 2.5% of net
assets.
ADR--American Depository Receipt
See Notes to Financial Statements
2-23
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at market (Identified
cost $122,060,409) $133,944,723
Cash 54,224
Receivable for investment securities sold 757,525
Interest and dividends receivable 189,733
Tax reclaim receivable 86,611
Net unrealized appreciation on forward
currency contracts 112,204
------------
Total Assets 135,145,020
------------
Liabilities
Payable for closed forward currency
contracts 428,180
Payable for investment securities purchased 57,352
Investment advisory fee 83,763
Financial agent fee 6,251
Trustees' fee 2,997
Custodian fee 43,067
Accrued expenses 68,836
------------
Total Liabilities 690,446
------------
Net Assets $134,454,574
============
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $123,073,809
Undistributed net investment income 917,632
Accumulated net realized loss (1,531,400)
Net unrealized appreciation 11,994,533
------------
Net Assets $134,454,574
============
Shares of beneficial interest outstanding, $1
par value, unlimited authorization 10,588,485
============
Net asset value and offering price per share $ 12.70
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment income
Dividends $ 1,943,245
Interest 878,443
Foreign taxes withheld (158,081)
------------
Total investment income 2,663,607
------------
Expenses
Investment advisory fee 988,635
Financial agent fee 78,641
Custodian 246,904
Printing 32,723
Professional 24,591
Trustees' fee 15,333
Miscellaneous 28,980
------------
Total expenses 1,415,807
------------
Net investment income 1,247,800
------------
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain on securities 2,867,931
Net realized loss on foreign currency
transactions (916,353)
Net unrealized appreciation on investments 8,063,640
Net unrealized appreciation on foreign
currency and foreign currency transactions 488,528
------------
Net gain on investments 10,503,746
------------
Net increase in net assets resulting from
operations $11,751,546
============
See Notes to Financial Statements
2-24
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
------------ -------------
From Operations
Net investment income $ 1,247,800 $ 691,783
Net realized gain (loss) 1,951,578 (74,826)
Net unrealized appreciation (depreciation) 8,552,168 (3,984,032)
---------- ------------
Net increase (decrease) in net assets
resulting from operations 11,751,546 (3,367,075)
---------- ------------
From Distributions to Shareholders
Net investment income (455,953) (257,332)
Net realized gains (2,629,683) (3,156,656)
---------- ------------
Decrease in net assets from distributions
to shareholders (3,085,636) (3,413,988)
---------- ------------
From Share Transactions
Proceeds from sales of shares (3,785,668 and
9,181,135, respectively) 45,431,812 115,954,555
Net asset value of shares issued from
reinvestment of distributions (238,826 and
282,805 shares, respectively) 3,085,636 3,413,988
Cost of shares repurchased (4,795,590 and
3,121,639 shares, respectively) (57,355,995) (39,201,848)
---------- ------------
(Decrease) increase in net assets from share
transactions (8,838,547) 80,166,695
---------- ------------
Net (decrease) increase in net assets (172,637) 73,385,632
Net Assets
Beginning of period 134,627,211 61,241,579
---------- ------------
End of period (including undistributed net
investment income of $917,632 and $388,998,
respectively) $134,454,574 $134,627,211
========== ============
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding through the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.85 $12.21 $8.82 $10.17 $9.07
Income from investment operations
Net investment income ((2)) 0.12 0.08 0.07((1)) 0.09 0.24((1))
Net realized and unrealized (loss) gain 1.02 (0.07) 3.32 (1.40) 1.53
------ ------ ---------- ------ ------------
Total from investment operations 1.14 0.01 3.39 (1.31) 1.77
------ ------ ---------- ------ ------------
Less distributions
Dividends from net investment income (0.04) (0.03) -- (0.04) (0.24)
Dividends from net realized gain (0.25) (0.34) -- -- (0.41)
Distributions from paid in capital -- -- -- -- (0.02)
------ ------ ---------- ------ ------------
Total distributions (0.29) (0.37) -- (0.04) (0.67)
------ ------ ---------- ------ ------------
Change in net asset value 0.85 (0.36) 3.39 (1.35) 1.10
------ ------ ---------- ------ ------------
Net asset value, end of period $12.70 $11.85 $12.21 $8.82 $10.17
====== ====== ========== ====== ============
Total return 9.59% 0.03% 38.44% -12.89% 19.78%
Ratio/supplemental data:
Net assets, end of period (thousands) $134,455 $134,627 $61,242 $13,772 $6,119
Ratio to average of net assets of:
Operating expenses 1.07% 1.10% 1.15% 1.50% 1.50%
Net investment income 0.95% 0.64% 0.49% 1.13% 2.44%
Portfolio turnover rate 249% 172% 193% 74% 104%
</TABLE>
((1)) Includes reimbursement of operating expenses by investment adviser of
$0.05 and $0.02, respectively.
((2)) Computed using average shares outstanding.
See Notes to Financial Statements
2-25
<PAGE>
BALANCED SERIES
Benign inflation and moderating economic growth contributed to very strong
investment results in both the equity and fixed-income markets. For the
twelve months ended December 31, 1995, the Balanced Series provided a total
return of 23.28%. The Fund's Balanced Benchmark returned 27.23% in the same
period. (All of these figures assume reinvestment of any distributions.)
The Fund's relative underperformance came during the first half of the
year when the equity segment of the portfolio was underweighted in the strong
technology and financial services sectors and the fixed-income segment had a
shorter duration versus the benchmark.
In the second half of the year we increased holdings in the health care,
financial services and technology sectors, with improved equity results.
Strong contributors to the Fund during the period were Equifax, Medtronic,
Amgen, Cisco Systems and Computer Sciences.
The fixed-income portion of the Fund was helped by a longer duration
during the second half of the year. In addition, the fixed-income segment has
benefited from increased diversification into sectors of the bond market,
such as mortgage-backed securities, municipal bonds, emerging markets debt
and high-yield corporate bonds.
As we enter the new year, we are maintaining a somewhat more cautious
stance toward the financial markets. Economic growth continues to moderate
and earnings growth appears to be slowing. Following a strong 1995, we
anticipate the equity market to enter a corrective phase in the first half of
1996. Consequently, we expect to maintain cash reserves above the 10%
benchmark allocation. Equity investments will continue to be driven by our
theme process. Dominant themes continue to be our 21st Century Medicine,
Hybrid Network, Energy Technology and The REITS themes. We will continue to
diversify our fixed income component into attractive sectors while
maintaining the duration at current levels.
[typeset representation of line chart]
Balanced Balanced
Benchmark* Series
5/1/92 10000 10000
12/31/92 10712 10972
12/31/93 11702 11912
12/31/94 11725 11579
12/31/95 14917 14274
[end chart]
Average Annual Total Returns for Periods Ending 12/31/95
From
Inception
5/1/92 to
1 Year 12/31/95
- --------------------------------------------------
Balanced Series 23.28% 10.19%
- --------------------------------------------------
Balanced Benchmark* 27.23% 11.51%
- --------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 5/1/92
(inception of the Fund). Returns shown include the reinvestment of all
distributions at net asset value, and the change in share price for the
stated period. Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate so
that your shares, when redeemed, may be worth more or less than the original
cost.
*The Balanced Benchmark is calculated based upon the performance of the
following indices: 55% S&P 500/35% Lehman Brothers Aggregate Bond Index/10%
U.S. Treasury Bills and is produced by Frank Russell Company.
2-26
<PAGE>
BALANCED SERIES
SCHEDULE OF INVESTMENTS
December 31, 1995
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
-------- -------- -----------
U.S. GOVERNMENT SECURITIES--22.8%
U.S. Treasury Bonds--7.8%
U.S. Treasury Bonds 6.50%, '05 AAA $3,465 $ 3,692,390
U.S. Treasury Bonds 6.50%, '05 AAA 4,700 5,006,962
U.S. Treasury Bonds 7.50%, '05 AAA 3,500 3,967,320
U.S. Treasury Bonds 7.50%, '16 AAA 2,125 2,491,520
----------
15,158,192
----------
U.S. Treasury Notes--13.6%
U.S. Treasury Notes 4.625%, '96 AAA 5,300 5,296,194
U.S. Treasury Notes 7.25%, '96 AAA 9,800 9,970,618
U.S. Treasury Notes 5.75%, '97 AAA 7,200 7,264,512
U.S. Treasury Notes 6.875%, '00 AAA 3,500 3,699,150
----------
26,230,474
----------
Agency Mortgage-Backed Securities--1.4%
GNMA 6.50%, '23 AAA 2,629 2,609,401
----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $42,885,895) 43,998,067
----------
CONVERTIBLE BONDS--3.8%
Airlines--1.0%
Delta Airlines, Inc. Cv. 3.23%,
'03 B+ 2,000 1,907,500
----------
Computer Software & Services--0.9%
First Financial Mgmt. Corp.
(FDC) Cv. 5%, '99 A 1,100 1,791,625
----------
Conglomerates--1.0%
Thermo Electron Corp. Cv. 144A
4.25%, '03 (c) A- 1,800 1,964,250
----------
Lodging & Restaurants--0.9%
Boston Chicken Sub. Deb. Cv.
4.50%, '04 B- 1,450 1,683,813
----------
TOTAL CONVERTIBLE BONDS
(Identified cost $6,998,575) 7,347,188
----------
NON-CONVERTIBLE BONDS--4.1%
Non-Agency Mortgage Backed Securities--2.9%
CS First Boston Mortgage 95-AE1,
B 7.182%, '27 AA- 425 429,383
DLJ Mortgage Acceptance 95-T10,
A 144A 6.955%, '23 (c) NR 1,300 1,271,562
Merrill Lynch Mortgage, Inc.
95-C2 B 7.53%, '21 Aa((d)) 248 256,189
Lehman Commercial Conduit 95-C2
B 7.18412%, '05 (e) AA 425 443,859
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa((d)) 425 443,992
Resolution Trust Corp. 95-C2, B
6.80%, '27 Aa((d)) 1,184 1,181,158
Resolution Trust Corp. 95-C1, A5
6.0205%, '27 Aaa((d)) 511 508,931
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa((d)) 525 529,594
Resolution Trust Corp. 95-2, M1,
7.15%, '29 Aa((d)) 509 512,682
----------
5,577,350
----------
Paper & Forest Products--0.4%
Buckeye Cellulose Corp. 8.50%,
'05 BB- 700 723,625
----------
Publishing, Broadcasting, Printing & Cable--0.4%
Continental Cablevision 144A
8.30%, '06 (c) BB+ 700 704,375
----------
Textile & Apparel--0.4%
Westpoint Stevens, Inc.
9.375%, '05 B+ 700 696,500
----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $7,632,413) 7,701,850
----------
FOREIGN NON-CONVERTIBLE BONDS--2.0%
Argentina--0.3%
Republic of Argentina Reg. FRB-L
Euro 6.8125%, '05 (e) BB- $ 750 $ 533,906
----------
Brazil--0.3%
Republic of Brazil 20 yr. Series
C Euro 8%, '14 B+ 902 515,843
----------
Colombia--0.5%
Financiera Energ. Nacional EMTN
144A 9%, '99 (c) BBB- 440 461,450
Republic of Colombia Yankee
7.25%, '04 BBB- 475 456,000
----------
917,450
----------
Mexico--0.2%
Banco Mexico 7.25%, '04 BB 570 446,025
----------
Philippines--0.2%
Central Bank of Philippines NMB
Euro 6.8125%, '05 (e) BB 500 450,625
----------
Poland--0.5%
Poland Global Reg. Par Euro
2.75%, '24 (e) Baa((d)) 1,000 471,250
Poland PDI 3.75%, '14 (e) Baa((d)) 700 453,250
----------
924,500
----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $3,645,094) 3,788,349
----------
MUNICIPAL BONDS--3.5%
California--1.2%
Kern County Pension Obligation
7.26%, '14 AAA 420 439,131
Long Beach Pension Obligation
6.87%, '06 AAA 230 236,760
Los Angeles County Series B Rev.
5.25%, '23 AAA 485 472,671
N. California Power Agency Rev.
A 5.50%, '24 AAA 415 415,390
San Bernardino County Obligation
Revenue 6.87%, '08 AAA 110 113,177
San Bernardino County Obligation
Revenue 6.94%, '09 AAA 300 309,642
Ventura County Pension 6.54%,
'05 AAA 260 262,699
----------
2,249,470
----------
Florida--0.9%
Florida Board of Education
Series E 5.25%, '23 AA 455 444,130
Florida State Turnpike Authority
Sinker 5%, '19 AAA 290 279,551
Miami Beach Special Obligation
Taxable 8.60%, '21 AAA 875 992,714
----------
1,716,395
----------
Georgia--0.2%
De Kalb County Water & Sewer
Sinker 5.25%, '23 AA 420 412,877
----------
Massachusetts--0.2%
Massachusetts Bay Transit Gen.
Series B 5.375%, '25 AAA 485 475,683
----------
Michigan--0.2%
Michigan Public Power Agency
Sinker 5.25%, '18 AAA 485 476,314
----------
New York--0.1%
New York State Power Rev. Series
CC 5.25%, '18 AA- 205 201,070
----------
See Notes to Financial Statements
2-27
<PAGE>
BALANCED SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
-------- -------- -----------
South Carolina--0.2%
South Carolina Public Service
Series C 5%, '25 AAA $ 345 $ 327,367
South Carolina Public Service
Rev. C 5.125%, '21 A+ 165 154,527
----------
481,894
----------
Utah--0.2%
Intermountain Power Series A
5%, '23 AA- 410 382,247
----------
Washington--0.1%
Seattle Drain & Wastewater
Sinker 5.25%, '25 AAA 295 286,380
----------
Other Territories--0.2%
Puerto Rico Commonwealth Sinker
5.375%, '22 AAA 340 338,909
----------
TOTAL MUNICIPAL BONDS
(Identified cost $6,802,975) 7,021,239
----------
SHARES
-------
CONVERTIBLE PREFERRED STOCKS--2.1%
Computer Software & Services--0.9%
American Express Co. DECS First Data 1996
Cv. 32,000 1,776,000
----------
Conglomerates--1.0%
Alco Standard Cv. Pfd $5.04 21,600 1,846,800
----------
Entertainment, Leisure & Gaming--0.2%
Time Warner Financing Cv. Pfd. PERCS $1.24 15,000 468,750
----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $3,456,620) 4,091,550
----------
COMMON STOCKS--49.9%
Aerospace & Defense--1.8%
Boeing Company 25,000 1,959,375
United Technologies Corp. 15,600 1,480,050
----------
3,439,425
----------
Bank--1.1%
Golden West Financial Corp. 37,500 2,071,875
----------
Beverages--1.2%
Coca Cola Co. 11,800 876,150
Northland Cranberries, Inc. Class A 80,800 1,434,200
----------
2,310,350
----------
Chemical--1.7%
IMC Global, Inc. 34,000 1,389,750
Monsanto Co. 16,100 1,972,250
----------
3,362,000
----------
Computer Software & Services--2.4%
Citrix Systems, Inc. (b) 38,300 1,244,750
Computer Sciences Corp. (b) 25,000 1,756,250
Oracle Systems Corp. (b) 40,300 1,707,712
----------
4,708,712
----------
Conglomerates--0.9%
Tyco International Ltd. 50,100 1,784,813
----------
Cosmetics & Soaps--1.3%
Estee Lauder Co. Class A (b) 43,100 1,503,113
Procter & Gamble Co. 12,600 1,045,800
----------
2,548,913
----------
Diversified Financial Services--2.7%
American Express Co. 31,700 1,311,588
Equifax, Inc. 88,000 1,881,000
Travelers Group, Inc. 31,700 1,993,137
----------
5,185,725
----------
Engineering & Construction--0.9%
Fluor Corp. 25,200 1,663,200
----------
Entertainment, Leisure & Gaming--2.5%
Mattel, Inc. 55,500 1,706,625
Viacom, Inc. Class B (b) 36,000 1,705,500
Walt Disney Co. 23,400 1,380,600
----------
4,792,725
----------
SHARES VALUE
------- ----------
Food--1.0%
Nabisco Holdings Corp. Class A 62,800 $2,048,850
----------
Healthcare--Diversified--1.7%
American Home Products Corp. 19,900 1,930,300
Neuromedical Systems, Inc. (b) 70,000 1,408,750
----------
3,339,050
----------
Healthcare--Drugs--2.6%
Amgen, Inc. (b) 35,200 2,090,000
Liposome Company, Inc. (b) 49,800 996,000
Watson Pharmaceuticals, Inc. (b) 37,900 1,857,100
----------
4,943,100
----------
Hospital Management & Services--1.9%
Manor Care, Inc. 58,900 2,061,500
United Healthcare Corp. 25,800 1,689,900
----------
3,751,400
----------
Insurance--3.0%
Allstate Corp. 46,811 1,925,102
Cigna Corp. (b) 18,600 1,920,450
Pacificare Health Systems, Inc. (b) 22,700 1,974,900
----------
5,820,452
----------
Machinery--0.9%
Case Corp. 36,800 1,683,600
----------
Medical Products & Supplies--2.1%
Baxter International, Inc. 48,000 2,010,000
Medtronic, Inc. 36,700 2,050,613
----------
4,060,613
----------
Miscellaneous--0.5%
CUC International, Inc. (b) 29,600 1,010,100
----------
Natural Gas--0.6%
Seagull Energy Corp. (b) 48,100 1,070,225
----------
Office & Business Equipment--0.7%
Sun Microsystems, Inc. (b) 28,400 1,295,750
----------
Oil--1.0%
Mobil Corp. 17,300 1,937,600
----------
Oil Service & Equipment--3.4%
Diamond Offshore Drilling (b) 29,300 988,875
Halliburton Co. 40,000 2,025,000
Sonat Offshore Drilling 44,000 1,969,000
Western Atlas, Inc. (b) 30,500 1,540,250
----------
6,523,125
----------
Paper & Forest Products--1.6%
Boise Cascade Corp. 29,000 1,004,125
Kimberly Clark Corp. 24,700 2,043,925
----------
3,048,050
----------
Publishing, Broadcasting, Printing & Cable--1.0%
Times Mirror Co. Class A 55,300 1,873,288
----------
Real Estate Investment Trusts--0.7%
Equity Residential Properties Trust 43,400 1,329,125
----------
Retail--0.6%
Office Depot, Inc. (b) 62,400 1,232,400
----------
Telecommunications Equipment--4.2%
ADC Telecommunications, Inc. (b) 49,400 1,803,100
Bay Networks, Inc. (b) 44,700 1,838,286
Cisco Systems, Inc. (b) 18,500 1,380,562
Stratacom, Inc. (b) 26,500 1,947,750
U.S. Robotics Corporation (b) 13,800 1,210,950
----------
8,180,648
----------
Tobacco--1.9%
Philip Morris Companies, Inc. 20,000 1,810,000
RJR Nabisco Holdings Corp. 61,100 1,886,463
----------
3,696,463
----------
Utility--Telephone--4.0%
AT&T Corp. 31,900 2,065,525
Ameritech Corp. 19,800 1,168,200
MCI Communications Corp. 70,600 1,844,425
SBC Communications, Inc. 19,500 1,121,250
U.S. West Communications Group 44,800 1,601,600
----------
7,801,000
----------
See Notes to Financial Statements
2-28
<PAGE>
BALANCED SERIES
SHARES VALUE
-------- -----------
TOTAL COMMON STOCKS
(Identified cost $85,118,695) $ 96,512,577
----------
FOREIGN COMMON STOCKS--0.9%
Chemical--0.9%
Potash Corp. of Saskatchewan, Inc. (Canada) 24,600 1,743,525
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,609,393) 1,743,525
----------
TOTAL LONG-TERM INVESTMENTS--89.1%
(Identified cost $158,149,660) 172,204,345
----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
--------- -------- -------------
SHORT-TERM OBLIGATIONS--11.2%
Commercial Paper--11.2%
McDonald's Corp. 5.75%, 1-2-96 A-1+ $2,820 $ 2,819,550
McDonald's Corp. 5.63%, 1-4-96 A-1+ 4,000 3,998,123
Philip Morris Companies, Inc.
5.90%, 1-4-96 A-1 1,800 1,799,115
Albertson's 5.73%, 1-10-96 A-1 6,000 5,991,405
Anheuser-Busch Companies, Inc.
5.55%, 1-16-96 A-1+ 5,000 4,988,438
Southwestern Bell Telephone
Co. 5.55%, 1-25-96 A-1+ 2,085 2,077,285
------------
21,673,916
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $21,673,916) 21,673,916
------------
TOTAL INVESTMENTS--100.3%
(Identified cost $179,823,576) 193,878,261((a))
Cash and receivables, less liabilities--(0.3%) (576,342)
------------
NET ASSETS--100.0% $193,301,919
============
((a)) Federal Income Tax Information: Net unrealized appreciation of
investment securities is comprised of gross appreciation of $15,416,172
and gross depreciation of $1,355,792 for income tax purposes. At
December 31, 1995 the aggregate cost of securities for federal income
tax purposes was $179,817,881.
((b)) Non-income producing.
((c)) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December
31, 1995, these securities amounted to a value of $4,401,637 or 2.3% of
net assets.
((d)) As rated by Moody's.
((e)) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
See Notes to Financial Statements
2-29
<PAGE>
BALANCED SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value (Identified
cost $179,823,576) $193,878,261
Cash 148,257
Receivable for investment securities sold 1,605,000
Interest and dividends receivable 1,138,706
------------
Total assets 196,770,224
------------
Liabilities
Payable for investment securities purchased 3,300,000
Investment advisory fee 88,715
Financial agent fee 9,678
Trustee fee 3,106
Accrued expenses 66,806
------------
Total liabilities 3,468,305
------------
Net Assets $193,301,919
============
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $172,186,268
Undistributed net investment income 74,806
Accumulated net realized gain 6,986,160
Net unrealized appreciation 14,054,685
------------
Net Assets $193,301,919
============
Shares of beneficial interest outstanding, $1
par value, unlimited authorization 15,716,275
============
Net asset value and offering price per share $12.30
============
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
Investment Income
Interest $ 5,545,194
Dividends 1,542,297
------------
Total investment income 7,087,491
------------
Expenses
Investment advisory fee 918,183
Financial agent fee 103,931
Custodian 37,875
Printing 24,377
Professional 23,182
Trustees' fee 12,128
Miscellaneous 6,243
------------
Total expenses 1,125,919
Custodian fees paid indirectly (2,717)
------------
Net expenses 1,123,202
------------
Net investment income 5,964,289
------------
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain from investment
transactions 17,215,657
Net realized loss on foreign currency
transactions (36,784)
Net unrealized appreciation of investment
securities 13,277,376
------------
Net gain on investments 30,456,249
------------
Net increase in net assets resulting from
operations $36,420,538
============
See Notes to Financial Statements
2-30
<PAGE>
BALANCED SERIES
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
12/31/95 12/31/94
----------- ------------
From Operations
Net investment income $ 5,964,289 $ 5,692,109
Net realized gain (loss) 17,178,873 (6,373,826)
Net unrealized appreciation (depreciation) 13,277,376 (4,002,731)
--------- -----------
Net increase (decrease) in net assets
resulting from operations 36,420,538 (4,684,448)
--------- -----------
From Distributions to Shareholders
Net investment income (6,004,047) (5,536,378)
Net realized gains (3,833,294) (1,538,238)
--------- -----------
Decrease in net assets from distributions
to shareholders (9,837,341) (7,074,616)
--------- -----------
From Shares of Beneficial Interest
Transactions
Proceeds from sales of shares (2,915,001 and
5,359,333 shares, respectively) 33,778,188 59,085,232
Net asset value of shares issued from
reinvestment of distributions
(828,862 and 660,710 shares, respectively) 9,837,341 7,074,616
Cost of shares repurchased (3,333,135 and
4,699,191 shares, respectively) (38,002,038) (51,439,961)
--------- -----------
Increase in net assets from share
transactions 5,613,491 14,719,887
--------- -----------
Net increase in net assets 32,196,688 2,960,823
Net Assets
Beginning of period 161,105,231 158,144,408
--------- -----------
End of period (including undistributed net
investment income of $74,806 and $208,187,
respectively) $193,301,919 $161,105,231
========= ===========
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From
Inception
5/1/92
Year Ended December 31, 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 ((3)) 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 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%((4)) 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)) 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.
See Notes to Financial Statements
2-31
<PAGE>
REAL ESTATE SERIES
In general, real estate markets are in a state of supply and demand
balance. Economic and employment growth during the last several years,
combined with modest levels of new construction, have led to steady and
significant improvement in real estate occupancy rates. Apartments hover near
95% occupied in most markets. New construction has remained in control
despite warnings earlier this year of increased apartment permitting. The
office, office-industrial and hotel property type sectors have seen the most
dramatic improvement during 1995. These markets emerged later from the real
estate downturn and are benefiting now from a virtual lack of new
construction. As fundamentals continue to improve and traditional investors
return to these sectors, we expect improved values due to the return of
normal liquidity. A note of caution, however, must be sounded for the retail
sector. The retail industry is struggling due to competition among major
retailers and expansion of competing retail formats in the face of slow
growth in consumer spending. As a result, regional malls, discounters, strip
malls and factory outlets are competing fiercely for shares of the retail
spending pie.
Performance in the REIT market in 1995 has been driven by the underlying
real estate fundamentals, with office and hotel REITS among the strongest
performers and retail REITS among the weaker.
Phoenix Edge Real Estate Fund, which was launched on May 1, 1995,
performed well during this reporting period. From its inception date through
December 31, 1995, the Fund posted a total return of 17.79%. The NAREIT
Equity Index recorded a total return of 15.48% for the same period. (All
these figures assume reinvestment of any distributions.)
The Fund benefited from strong performance by some of its key holdings.
Bay Apartments (apartment), Kimco Realty (retail), Highwoods Properties
(office) and Starwood Lodging Trust (hotel) enjoyed growing market demand due
to favorable earnings growth forecasts. The Fund also benefited from its
investment strategy to concentrate in key sectors that expected to outperform
the market during 1995. Currently, the Fund is overweighted in the apartment,
office and hotel sectors and underweighted in the retail sector.
The favorable outlook for the real estate industry translates into strong
consensus growth estimates for Funds From Operations (FFO) in the REIT market
in 1996. (FFO is the earnings indicator used in the REIT industry to measure
dividend paying ability.) REIT FFOs are forecasted to grow 8.5% over the
course of 1996.
During 1995, share prices have barely kept pace with income growth.
Current dividend yields have been slow to decline despite tremendous strength
in the broad equity markets and steady declines in long-term bond yields. The
average dividend yield for equity REITs on December 31, 1995 was 7.42%. This
represents a spread over 10-year treasury notes of 179 basis points, the
widest spread over treasury yields since depths of the real estate recession
in 1990. REITs also offer a wider spread over the S&P 500 than at the
beginning of the year.
We believe that improving fundamentals in the real estate industry point
to continued earnings growth for REITs. Additionally, income yields are high
compared to alternative investments. In the wake of the tremendous bull
market in stocks and bonds during 1995, we believe REIT share prices offer
value. We expect to continue our emphasis on the office, industrial and hotel
sectors which offer the best prospects for income growth. We will also
continue to focus on companies with strong managements, excellent track
records and low debt levels.
[typeset representation of line chart]
Real Estate
Series NAREIT*
5/1/95 10000 10000
12/31/95 11779 11548
[end chart]
Total Returns for Period Ending 12/31/95
From
Inception
5/1/95 to
12/31/95
- ---------------------------------
Real Estate Series 17.79%
- ---------------------------------
NAREIT Index* 15.48%
- ---------------------------------
This chart assumes an initial gross investment of $10,000 made on 5/1/95
(inception of the fund). Returns shown include the reinvestment of all
distributions at net asset value, and the change in share price for the
stated period. Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
* The National Association of Real Estate Investment Trusts (NAREIT) is a
commonly used, unmanaged indicator of REIT performance.
2-32
<PAGE>
REAL ESTATE SERIES
SCHEDULE OF INVESTMENTS
December 31, 1995
SHARES VALUE
------ ----------
COMMON STOCKS--97.0%
REAL ESTATE INVESTMENT TRUSTS--95.6%
COMMERCIAL--20.1%
Industrial--5.2%
Security Capital Industrial Trust 12,483 $ 218,452
Weeks Corporation 8,700 218,588
---------
437,040
---------
Office--9.6%
Cali Realty Corp. 3,800 83,125
Duke Realty Investments, Inc. 6,500 203,937
Highwoods Properties, Inc. 10,200 288,150
Spieker Properties, Inc. 9,600 241,200
---------
816,412
---------
Storage--5.3%
Shurgard Storage Centers, Inc. 7,700 207,900
Storage USA, Inc. 7,500 244,687
---------
452,587
---------
Total Commercial 1,706,039
---------
DIVERSIFIED--0.6%
Colonial Properties Trust 1,800 45,900
---------
HEALTH CARE--7.8%
Health Care Properties Inv., Inc. 9,400 330,175
Nationwide Health Properties, Inc. 7,800 327,600
---------
657,775
---------
RESIDENTIAL--36.6%
Apartments--30.6%
Avalon Properties, Inc. 7,700 165,550
Bay Apartment Community, Inc. 10,500 254,625
Camden Property Trust 7,100 169,513
Equity Residential Properties Trust 9,000 275,625
Evans Withycombe Residential, Inc. 11,800 253,700
Merry Land & Investment Co. 12,700 300,037
Oasis Residential, Inc. 11,000 250,250
Post Properties, Inc. 7,400 235,875
Security Capital Pacific Trust 14,000 276,500
South West Property Trust 12,000 162,000
United Dominion Realty Trust 16,600 249,000
---------
2,592,675
---------
Manufactured Homes--6.0%
Chateau Properties, Inc. 5,200 117,000
Manufactured Home Communities 9,500 166,250
Sun Communities, Inc. 8,600 226,825
---------
510,075
---------
Total Residential 3,102,750
---------
RETAIL--25.1%
Community/Neighborhood--12.7%
Developers Diversified Realty Corp. 9,200 276,000
Federal Realty Investment Trust 7,600 172,900
Kimco Realty Corp. 5,700 155,325
Regency Realty Corp. 4,700 81,075
Vornado Realty Trust 6,400 240,000
Weingarten Realty Investors 4,000 152,000
---------
1,077,300
---------
Factory Outlet--3.0%
Chelsea G.C.A. Realty, Inc. 8,400 $ 252,000
---------
Regional Malls--9.4%
DeBartolo Realty Corp. 12,700 165,100
J.P. Realty, Inc. 9,300 203,438
Simon Property Group, Inc. 9,300 226,687
Taubman Centers, Inc. 20,400 204,000
---------
799,225
---------
Total Retail 2,128,525
---------
SPECIALTY--5.4%
Hotels--5.4%
FelCor Suite Hotels, Inc. 6,600 183,150
Patroit American Hospitality 7,000 180,250
Starwood Lodging Trust 3,300 98,175
---------
461,575
---------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(Identified cost $7,264,007) 8,102,564
---------
REAL ESTATE OPERATING COMPANIES--1.4%
Hotels--1.4%
Bristol Hotel Co. (b) 500 12,188
Host Marriott Corp. (b) 7,900 104,675
---------
TOTAL REAL ESTATE OPERATING COMPANIES
(Identified cost $109,470) 116,863
---------
TOTAL COMMON STOCKS
(Identified cost $7,373,477) 8,219,427
---------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
--------- -------
SHORT-TERM OBLIGATIONS--3.7%
Commercial Paper--3.7%
McDonald's Corp. 5.75%, 1-2-96 A-1+ $ 315 314,950
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $314,950) 314,950
------------
TOTAL INVESTMENTS--100.7%
(Identified cost $7,688,427) 8,534,377((a))
Cash and receivables, less liabilities--(0.7%) (61,835)
------------
NET ASSETS--100.0% $8,472,542
============
((a)) Federal Income Tax Information: Net realized appreciation of investment
securities is comprised of gross appreciation of $855,009 and gross
depreciation of $9,139 for income tax purposes. At December 31, 1995
the aggregate cost of securities for federal income tax purposes was
$7,688,507.
((b)) Non-income producing.
See Notes to Financial Statements
2-33
<PAGE>
REAL ESTATE SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Assets
Investment securities at value (Identified
cost $7,688,427) $8,534,377
Cash 7,528
Receivable from adviser 23,788
Interest and dividends receivable 70,477
----------
Total assets 8,636,170
----------
Liabilities
Payable for investment securities purchased 127,603
Trustees' fee 1,956
Financial agent fee 404
Accrued expenses 33,665
----------
Total liabilities 163,628
----------
Net Assets $8,472,542
==========
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $7,626,672
Accumulated net realized loss (80)
Net unrealized appreciation 845,950
----------
Net Assets $8,472,542
==========
Shares of beneficial interest outstanding, $1
par value, unlimited authorization 747,675
==========
Net asset value and offering price per share $11.33
==========
STATEMENT OF OPERATIONS
From inception May 1, 1995 to December 31, 1995
Investment Income
Dividends $ 249,376
Interest 11,020
---------
Total investment income 260,396
---------
Expenses
Investment advisory fee 33,655
Financial agent fee 2,692
Printing 16,983
Professional 14,910
Custodian 8,810
Trustees' fee 8,690
Miscellaneous 3,107
Expenses borne by investment adviser (43,974)
---------
Total expenses 44,873
---------
Net investment income 215,523
---------
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain from investment
transactions 44,211
Net unrealized appreciation on investment
securities 845,950
---------
Net gain on investments 890,161
---------
Net increase in net assets resulting from
operations $1,105,684
=========
See Notes to Financial Statements
2-34
<PAGE>
REAL ESTATE SERIES
STATEMENT OF CHANGES IN NET ASSETS
From Inception
5/1/95 to
12/31/95
---------------
From Operations
Net investment income $ 215,523
Net realized gain 44,211
Net unrealized appreciation 845,950
-------------
Net increase in net assets resulting from
operations 1,105,684
-------------
From Distributions to Shareholders
Net investment income (215,523)
Net realized gains (44,211)
Tax return of capital (19,252)
Distribution in excess of net realized gains (80)
-------------
Decrease in net assets from distributions
to shareholders (279,066)
-------------
From Shares of Beneficial Interest
Transactions
Proceeds from sales of shares (784,136
shares) 8,019,985
Net asset value of shares issued from
reinvestment of distributions (25,636
shares) 279,066
Cost of shares repurchased (62,097 shares) (653,127)
-------------
Increase in net assets from share
transactions 7,645,924
-------------
Net increase in net assets 8,472,542
Net Assets
Beginning of period 0
-------------
End of period (including undistributed net
investment income of $0) $8,472,542
=============
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the indicated period)
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 gains (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 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
See Notes to Financial Statements
2-35
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note 1--Organization
The Phoenix Edge Series Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The Fund is comprised
of the Money Market, Growth, Bond, Total Return, International, Balanced and
Real Estate Series. The Fund was established as part of the December 8, 1986
reorganization of the Phoenix Home Life Variable Accumulation Account (the
Account) from a management investment company to a unit investment trust
under the Investment Company Act of 1940. The Fund is organized with Series
which are available only to the sub-accounts of the Phoenix Home Life
Variable Accumulation Account, the Phoenix Home Life Variable Universal Life
Account, the PHL Variable Accumulation Account, and the Phoenix Home Life
Separate Accounts B, C, and D.
Each series has distinct investment objectives. The Money Market Series seeks
to provide maximum current income consistent with capital preservation and
liquidity. The Growth Series seeks to achieve intermediate and long-term
growth of capital, with income as a secondary consideration. The Bond Series
seeks to provide long-term total return by investing in a diversified
portfolio of high yield and high quality fixed income securities. The Total
Return Series seeks to realize as high a level of total rate of return over
an extended period of time as is considered consistent with prudent
investment risk by investing in three market segments; stocks, bonds and
money market instruments. The International Series seeks as its investment
objective a high total return consistent with reasonable risk by investing
primarily in an internationally diversified portfolio of equity securities.
The Balanced Series seeks to provide reasonable income, long-term growth and
conservation of capital. The Real Estate Series seeks to achieve capital
appreciation and income with approximately equal emphasis through investments
in real estate investment trusts and companies that operate, manage, develop
or invest in real estate.
Note 2--Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and
expenses. Actual results could differ from those estimates.
A. Security Valuation
In determining the value of the investments of the Growth Series, Bond
Series, Total Return Series, International Series, Balanced Series and the
Real Estate Series, equity securities for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price, or if no sales are reported, the last reported bid
price. Debt securities (other than short-term obligations) are valued on the
basis of broker quotations or valuations provided by a pricing service when
such prices are believed to reflect the fair value of such securities. Prices
provided by the pricing service may be determined without exclusive reliance
on quoted prices and take into account appropriate factors such as
institution-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other
market data. Use of pricing services has been approved by the Trustees.
Short-term securities having a remaining maturity of less than sixty days,
are valued at amortized cost which approximates market. All other securities
and assets are valued at their fair value as determined in good faith by or
under the direction of the Trustees.
The Money Market Series uses the amortized cost method of security valuation
which, in the opinion of the Trustees, represents the fair value of the
particular security. The Trustees monitor the deviations between the Series'
net asset value per share as determined by using available market quotations
and its amortized cost per share. If the deviation exceeds 1/2 of 1%, the
Board of Trustees will consider what action, if any, should be initiated to
provide fair valuation. The Series attempts to maintain a constant net asset
value of $10 per share. The assets of the Series will not be invested in any
security with a maturity of greater than 397 days, and the weighted average
maturity of its portfolio will not exceed 90 days.
B. Security Transactions and Related Income
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date, or in the case of certain foreign securities, as soon as the Fund is
notified. The Fund does not amortize premiums except for the Money Market
Series, but does amortize discounts using the effective interest method.
Realized gains and losses are determined on the identified cost basis.
2-36
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
C. Income Taxes
Each of the Series is treated as a separate taxable entity. It is the policy
of each Series to comply with the requirements of the Internal Revenue Code,
applicable to regulated investment companies, and to distribute substantially
all of its taxable income to its shareholders. In addition, each Series
intends to distribute an amount sufficient to avoid imposition of any excise
tax under Section 4982 of the Code. Therefore, no provision for federal
income taxes or excise taxes has been made.
D. Distributions to Shareholders
Distributions are recorded by each Series on the ex-dividend date and all
distributions are reinvested into the Fund. Income and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These differences
include the treatment of non-taxable dividends, expiring capital loss
carryforwards, foreign currency gain/loss, partnerships, and losses deferred
due to wash sales and excise tax regulations. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid in capital.
E. Foreign Currency Translation
Foreign securities, other assets and liabilities are valued using the foreign
currency exchange rate effective at the end of the reporting period.
Purchases and sales of foreign investments and income and expenses are
translated into U.S. dollars based upon exchange rates prevailing on the
respective dates of such transactions. The gain or loss resulting from a
change in exchange rates between the trade and settlement dates of a
portfolio transaction or between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate
that portion of the results of operations arising from changes in exchange
rates and that portion arising from changes in the market prices of
securities.
F. Forward Currency Contracts
Each Series may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge
the U.S. dollar cost or proceeds. Forward currency contracts involve, to
varying degrees, elements of market risk in excess of the amount recognized
in the statement of assets and liabilities. Risks arise from the possible
movements in foreign exchange rates or if the counterparty does not perform
under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded directly between currency traders
and their customers. The contract is marked-to-market daily and the change in
market value is recorded by the Series as an unrealized gain (or loss). When
the contract is closed or offset with the same counterparty, the Series
records a realized gain (or loss) equal to the change in the value of the
contract when it was opened and the value at the time it was closed or
offset.
G. Futures Contracts
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. A Series may enter into financial
futures contracts as a hedge against anticipated changes in the market value
of their portfolio securities. Upon entering into a futures contract, the
Fund is required to pledge to the broker an amount of cash and/or securities
equal to the "initial margin" requirements of the futures exchange on which
the contract is traded. Pursuant to the contract, the Fund agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as variation
margins and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. The potential risk to the Series is that
the change in value of the futures contract may not correspond to the change
in value of the hedged instruments.
H. Trust Expenses
Expenses incurred by the Fund with respect to any two or more Series are
allocated in proportion to the net assets of each Series, except where
allocation of direct expense to each Series or an alternative allocation
method can be more fairly made. For the year ended December 31, 1995, total
Fund expenses were reduced $37,489 under expense offset arrangements with the
custodian. Custodian expenses in the Statement of Operations exclude these
credits. The Series could have invested a portion of the assets utilized in
connection with the offset arrangements in an income producing asset.
2-37
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
Note 3--Investment Advisory Fees and Related Party Transactions
As compensation for its services to the Fund, the Adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect, less than wholly-owned subsidiary of
Phoenix Home Life Insurance Company ("PHL") is entitled to a fee, based upon
the following annual rates as a percentage of the average daily net assets of
each separate Series.
Rate for Rate for Rate for excess
first next over $500
Series $250 million $250 million million
------------- ------------- ------------ ----------------
Money Market .40% .35% .30%
Bond .50 .45 .40
Balanced .55 .50 .45
Total Return .60 .55 .50
Growth .70 .65 .60
International .75 .70 .65
The investment adviser for the Real Estate Series is Phoenix Realty
Securities, Inc. ("PRS"). PRS is an indirect, wholly-owned subsidiary of PHL.
For its services, PRS is entitled to a fee at an annual rate of 0.75% of the
average daily net assets for the first $1 billion.
Pursuant to a Sub-Advisory Agreement with the Series, PRS delegates certain
investment decisions and research functions to ABKB/LaSalle Securities
Limited Partnership ("ABKB") for which ABKB is paid a fee by PRS equal to
0.45% of the average daily net assets of the Real Estate Series for the first
$1 billion.
Each Series (except the International and Real Estate Series) pays a portion
or all of its other operating expenses (not including management fee,
interest, taxes, brokerage fees and commissions), up to .15% of its average
net assets. The International and Real Estate Series pay other operating
expenses up to .40% and .25%, respectively, of its average net assets.
Expenses above these limits are paid by the Advisers, PIC, PRS and/or PHL
and/or PHL Variable Insurance Company.
As Financial Agent to the Fund and to each Series, PHL receives a fee at an
annual rate of 0.06% of the average daily net assets of each Series for
bookkeeping, administrative and pricing services.
At December 31, 1995, PHL and affiliates held shares in the Phoenix Edge
Series Fund and/or in the underlying unit investment trusts which aggregated
the following:
Growth Series $7,606,203
Real Estate Series 5,841,310
Note 4--Purchases and Sales of Securities
Purchases and sales of securities during the period ended December 31, 1995
(excluding U.S. Government securities, short-term securities, and forward
currency contracts) aggregated the following:
Purchases Sales
------------- --------------
Bond Series $ 81,970,300 $ 72,082,225
Growth Series 1,410,082,225 1,184,097,550
Total Return Series 389,921,755 302,404,123
International Series 281,669,088 276,885,163
Balanced Series 255,518,719 228,537,422
Real Estate Series 8,067,052 660,084
There were no purchases or sales of such securities in the Money Market
Series.
Purchases and sales of long-term U.S. Government securities during the period
ended December 31, 1995 aggregated the following:
Purchases Sales
------------- --------------
Bond Series $ 69,365,864 $ 57,239,638
Total Return Series 67,477,130 74,064,981
Balanced Series 101,423,541 106,851,394
There were no purchases or sales of long-term U.S. Government securities in
the Money Market, Growth, International, or Real Estate Series.
2-38
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
Note 5--Forward Currency Contracts
At December 31, 1995, the International Series had entered into various
forward currency contracts which contractually obligate the Series to deliver
currencies at specified dates. Open contracts were as follows:
Net
In Unrealized
Contracts Exchange Settlement Appreciation
to Deliver For Date Value (Depreciation)
---------- --------------- ---------- -------- -----------
SK 27,300,000 US$ 4,081,816 2/1/96 $ 4,119,387 $(37,571)
YEN 748,000,000 US$ 7,424,318 3/1/96 7,321,723 102,595
YEN 1,560,000,000 US$ 15,384,615 4/1/96 15,337,435 47,180
----------
$112,204
==========
SK = Swedish Krona
YEN = Japanese Yen
US$ = U.S. Dollar
As of December 31, 1995, the International Series had $3,392,180 in
short-term securities segregated as collateral to cover the open forward
currency contracts.
Note 6--Reclassification of Capital Accounts
In accordance with accounting pronouncements, the Series of the Fund have
recorded several reclassifications in the capital accounts. As of December
31, 1995, the Series recorded the following reclassifications to increase
(decrease) the accounts listed below:
Undistributed Capital paid
net Accumulated in on shares
investment net realized of beneficial
income gains/(losses) interest
------------- ------------ -------------
Growth $(1,343,698) $1,324,478 $ 19,220
Bond 45,942 (16,652) (29,290)
Total Return 134,575 (134,575) --
International (263,213) 711,397 (448,184)
Balanced (93,623) 87,927 5,696
Note 7--Capital Loss Carryovers
At December 31, 1995, the Series of the Fund had available for federal income
tax purposes unused capital losses as follows:
Expiring on 2001 2002
---------------- -----------
Bond $883,661 $825,646
In addition, the Balanced and Bond Series utilized capital loss carryovers in
the current year of $3,251,289 and $718,824, respectively.
Under current tax law, capital losses realized after October 31, 1995 may be
deferred and treated as occurring on the first day of the following tax year.
For the calendar year ended December 31, 1995, the International Series
elected to defer $1,730,497 in losses occurring between November 1, 1995 and
December 31, 1995. In addition, certain of the Series were able to utilize
post October losses deferred in the prior year against current year capital
gains as follows:
Reversal of
Prior year
Capital
losses deferred
----------------
Balanced $3,047,431
International 4,089,997
2-39
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[logo: Price Waterhouse LLP Price Waterhouse logo]
To the Shareholders and Trustees of
The Phoenix Edge Series Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of the Money Market Series, Growth Series, Bond Series, Total Return
Series, International Series, Balanced Series and Real Estate Series
(constituting The Phoenix Edge Series Fund, hereafter referred to as the
"Fund") at December 31, 1995, and the results of their operations, the
changes in their net assets and the financial highlights for each of the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at December 31, 1995 by
correspondence with the custodians and brokers (and the application of
alternative auditing procedures where confirmations from brokers were not
received), provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
February 12, 1996
2-40
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting in lieu of the Annual Meeting of shareholders of the
Phoenix Edge Series Fund was held on October 26, 1995 to approve the
following matters:
1. Fix the number of trustees at eleven and elect such number as detailed
below.
2. Ratify selection of Price Waterhouse LLP, independent accountants as
auditors for the fiscal year ending December 31, 1995.
3. That the Fund's investment restrictions be revised to permit up to 15%
of the Fund's net assets to be invested in illiquid securities.
Subsequently, and in accordance with the provision in the Fund's Declaration
of Trust, the Trustees voted to increase the number of Trustees to fourteen
and to appoint three additional Trustees to fill the vacancies caused by the
increase.
On the record date for this meeting, there were 113,999,512 shares
outstanding and 100% of the shares outstanding and entitled to vote were
present by proxy.
Number of votes: For Against Abstain
----------- --------- ----------
1. Election of Trustees 110,761,926 3,237,586
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Leroy Keith, Jr.
Philip R. McLoughlin
James M. Oates
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
2. Price Waterhouse LLP 109,781,530 1,025,996 3,191,986
3. Investment Restriction 97,013,585 9,803,958 7,181,969
2-41
<PAGE>
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Board of Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael E. Haylon, Executive Vice President
William J. Newman, Executive Vice President
Curtiss O. Barrows, Vice President
Mary E. Canning, Vice President
James M. Dolan, Vice President
Jeanne H. Dorey, Vice President
Christopher J. Kelleher, Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
C. Edwin Riley, Jr., Vice President
Amy L. Robinson, Vice President
Barbara Rubin, Vice President
Leonard J. Saltiel, Vice President
Dorothy J. Skaret, Vice President
James D. Wehr, Vice President
John T. Wilson, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Investment Adviser (Real Estate Series)
Phoenix Realty Securities, Inc.
38 Prospect Street
Hartford, CT 06115-2520
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
International Series Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Real Estate Series Custodian
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Jorden Burt, Berenson & Johnson LLP
Suite 400 East
1025 Thomas Jefferson Street N.W.
Washington, D.C. 20007-0805
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
_____________________________________________________________________________
This report is not authorized for distribution to prospective investors in
The Phoenix Edge Series Fund unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge and other
pertinent information.
_____________________________________________________________________________
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
[cover]
[Phoenix Home Life logo]
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 810
Greenfield, Massachusetts 01302-0810
OL1273 (2/96)
4450.04
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
[recycle logo] Printed on recycled paper using soybean ink
(C) 1995 Phoenix Home Life Mutual Insurance Company
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 1
<NAME> MONEY MARKET SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 99046
<INVESTMENTS-AT-VALUE> 99046
<RECEIVABLES> 394
<ASSETS-OTHER> 3583
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 103023
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 79
<TOTAL-LIABILITIES> 79
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 102914
<SHARES-COMMON-STOCK> 10291
<SHARES-COMMON-PRIOR> 9457
<ACCUMULATED-NII-CURRENT> 29
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 102943
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5551
<OTHER-INCOME> 0
<EXPENSES-NET> (481)
<NET-INVESTMENT-INCOME> 5070
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5070
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5055)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19416
<NUMBER-OF-SHARES-REDEEMED> (19087)
<SHARES-REINVESTED> 506
<NET-CHANGE-IN-ASSETS> 8358
<ACCUMULATED-NII-PRIOR> 14
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 352
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 481
<AVERAGE-NET-ASSETS> 91008
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.56)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 2
<NAME> GROWTH SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 878096
<INVESTMENTS-AT-VALUE> 987658
<RECEIVABLES> 1103
<ASSETS-OTHER> 1650
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 990411
<PAYABLE-FOR-SECURITIES> 4295
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 727
<TOTAL-LIABILITIES> 5022
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 868237
<SHARES-COMMON-STOCK> 54341
<SHARES-COMMON-PRIOR> 39282
<ACCUMULATED-NII-CURRENT> 195
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 7396
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 109561
<NET-ASSETS> 985389
<DIVIDEND-INCOME> 8319
<INTEREST-INCOME> 6566
<OTHER-INCOME> 0
<EXPENSES-NET> (5965)
<NET-INVESTMENT-INCOME> 8920
<REALIZED-GAINS-CURRENT> 111984
<APPREC-INCREASE-CURRENT> 89700
<NET-CHANGE-FROM-OPS> 210604
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7452)
<DISTRIBUTIONS-OF-GAINS> (105928)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16788
<NUMBER-OF-SHARES-REDEEMED> (8019)
<SHARES-REINVESTED> 6291
<NET-CHANGE-IN-ASSETS> 369168
<ACCUMULATED-NII-PRIOR> 71
<ACCUMULATED-GAINS-PRIOR> 15
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5142
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5965
<AVERAGE-NET-ASSETS> 794544
<PER-SHARE-NAV-BEGIN> 15.69
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 4.60
<PER-SHARE-DIVIDEND> (0.17)
<PER-SHARE-DISTRIBUTIONS> (2.19)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.13
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 3
<NAME> BOND SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 100202
<INVESTMENTS-AT-VALUE> 106927
<RECEIVABLES> 3935
<ASSETS-OTHER> 302
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 111164
<PAYABLE-FOR-SECURITIES> 1999
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 120
<TOTAL-LIABILITIES> 2119
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 103961
<SHARES-COMMON-STOCK> 10669
<SHARES-COMMON-PRIOR> 8316
<ACCUMULATED-NII-CURRENT> 135
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1775)
<ACCUM-APPREC-OR-DEPREC> 6725
<NET-ASSETS> 109046
<DIVIDEND-INCOME> 420
<INTEREST-INCOME> 8004
<OTHER-INCOME> 0
<EXPENSES-NET> (594)
<NET-INVESTMENT-INCOME> 7830
<REALIZED-GAINS-CURRENT> 1405
<APPREC-INCREASE-CURRENT> 10007
<NET-CHANGE-FROM-OPS> 19242
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7763)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4715
<NUMBER-OF-SHARES-REDEEMED> (3159)
<SHARES-REINVESTED> 796
<NET-CHANGE-IN-ASSETS> 34360
<ACCUMULATED-NII-PRIOR> 23
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (3164)
<GROSS-ADVISORY-FEES> 458
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 664
<AVERAGE-NET-ASSETS> 91502
<PER-SHARE-NAV-BEGIN> 8.98
<PER-SHARE-NII> 0.83
<PER-SHARE-GAIN-APPREC> 1.22
<PER-SHARE-DIVIDEND> (0.81)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.22
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 4
<NAME> TOTAL RETURN SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 331811
<INVESTMENTS-AT-VALUE> 351708
<RECEIVABLES> 3496
<ASSETS-OTHER> 297
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 355501
<PAYABLE-FOR-SECURITIES> 1402
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 261
<TOTAL-LIABILITIES> 1663
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 331831
<SHARES-COMMON-STOCK> 25952
<SHARES-COMMON-PRIOR> 22791
<ACCUMULATED-NII-CURRENT> 154
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1956
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 19897
<NET-ASSETS> 353838
<DIVIDEND-INCOME> 2408
<INTEREST-INCOME> 10279
<OTHER-INCOME> 0
<EXPENSES-NET> (2148)
<NET-INVESTMENT-INCOME> 10538
<REALIZED-GAINS-CURRENT> 23633
<APPREC-INCREASE-CURRENT> 19083
<NET-CHANGE-FROM-OPS> 53254
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10497)
<DISTRIBUTIONS-OF-GAINS> (21419)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5465
<NUMBER-OF-SHARES-REDEEMED> (4647)
<SHARES-REINVESTED> 2342
<NET-CHANGE-IN-ASSETS> 64755
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (22)
<OVERDIST-NET-GAINS-PRIOR> (123)
<GROSS-ADVISORY-FEES> 1831
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2148
<AVERAGE-NET-ASSETS> 320738
<PER-SHARE-NAV-BEGIN> 12.68
<PER-SHARE-NII> 0.45
<PER-SHARE-GAIN-APPREC> 1.84
<PER-SHARE-DIVIDEND> (0.45)
<PER-SHARE-DISTRIBUTIONS> (0.89)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.63
<EXPENSE-RATIO> 0.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 5
<NAME> INTERNATIONAL SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 122060
<INVESTMENTS-AT-VALUE> 133945
<RECEIVABLES> 1034
<ASSETS-OTHER> 54
<OTHER-ITEMS-ASSETS> 112
<TOTAL-ASSETS> 135145
<PAYABLE-FOR-SECURITIES> 57
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 633
<TOTAL-LIABILITIES> 690
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 123074
<SHARES-COMMON-STOCK> 10588
<SHARES-COMMON-PRIOR> 11360
<ACCUMULATED-NII-CURRENT> 918
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (1531)
<ACCUM-APPREC-OR-DEPREC> 11994
<NET-ASSETS> 134455
<DIVIDEND-INCOME> 1943
<INTEREST-INCOME> 879
<OTHER-INCOME> (158)
<EXPENSES-NET> (1416)
<NET-INVESTMENT-INCOME> 1248
<REALIZED-GAINS-CURRENT> 1952
<APPREC-INCREASE-CURRENT> 8552
<NET-CHANGE-FROM-OPS> 11752
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (456)
<DISTRIBUTIONS-OF-GAINS> (2630)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3786
<NUMBER-OF-SHARES-REDEEMED> (4796)
<SHARES-REINVESTED> 239
<NET-CHANGE-IN-ASSETS> (173)
<ACCUMULATED-NII-PRIOR> 389
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1565)
<GROSS-ADVISORY-FEES> 989
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1416
<AVERAGE-NET-ASSETS> 131597
<PER-SHARE-NAV-BEGIN> 11.85
<PER-SHARE-NII> 0.12
<PER-SHARE-GAIN-APPREC> 1.02
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> (0.25)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.70
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 6
<NAME> BALANCED SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 179824
<INVESTMENTS-AT-VALUE> 193878
<RECEIVABLES> 2744
<ASSETS-OTHER> 148
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 196770
<PAYABLE-FOR-SECURITIES> 3300
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168
<TOTAL-LIABILITIES> 3468
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 172186
<SHARES-COMMON-STOCK> 15716
<SHARES-COMMON-PRIOR> 15306
<ACCUMULATED-NII-CURRENT> 75
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6986
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14055
<NET-ASSETS> 193302
<DIVIDEND-INCOME> 1542
<INTEREST-INCOME> 5545
<OTHER-INCOME> 0
<EXPENSES-NET> (1123)
<NET-INVESTMENT-INCOME> 5964
<REALIZED-GAINS-CURRENT> 17179
<APPREC-INCREASE-CURRENT> 13277
<NET-CHANGE-FROM-OPS> 36420
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6004)
<DISTRIBUTIONS-OF-GAINS> (3833)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2915
<NUMBER-OF-SHARES-REDEEMED> (3333)
<SHARES-REINVESTED> 829
<NET-CHANGE-IN-ASSETS> 32197
<ACCUMULATED-NII-PRIOR> 208
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (6447)
<GROSS-ADVISORY-FEES> 918
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1123
<AVERAGE-NET-ASSETS> 173398
<PER-SHARE-NAV-BEGIN> 10.53
<PER-SHARE-NII> 0.40
<PER-SHARE-GAIN-APPREC> 2.02
<PER-SHARE-DIVIDEND> (0.40)
<PER-SHARE-DISTRIBUTIONS> (0.25)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.30
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792359
<NAME> THE PHOENIX EDGE SERIES FUND
<SERIES>
<NUMBER> 7
<NAME> REAL ESTATE SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 7688
<INVESTMENTS-AT-VALUE> 8534
<RECEIVABLES> 94
<ASSETS-OTHER> 8
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8636
<PAYABLE-FOR-SECURITIES> 128
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36
<TOTAL-LIABILITIES> 164
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7627
<SHARES-COMMON-STOCK> 748
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 846
<NET-ASSETS> 8473
<DIVIDEND-INCOME> 250
<INTEREST-INCOME> 11
<OTHER-INCOME> 0
<EXPENSES-NET> (45)
<NET-INVESTMENT-INCOME> 216
<REALIZED-GAINS-CURRENT> 44
<APPREC-INCREASE-CURRENT> 846
<NET-CHANGE-FROM-OPS> 1106
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (216)
<DISTRIBUTIONS-OF-GAINS> (44)
<DISTRIBUTIONS-OTHER> (19)
<NUMBER-OF-SHARES-SOLD> 784
<NUMBER-OF-SHARES-REDEEMED> (62)
<SHARES-REINVESTED> 26
<NET-CHANGE-IN-ASSETS> 8473
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 89
<AVERAGE-NET-ASSETS> 6923
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.33
<PER-SHARE-GAIN-APPREC> 1.42
<PER-SHARE-DIVIDEND> (0.33)
<PER-SHARE-DISTRIBUTIONS> (0.06)
<RETURNS-OF-CAPITAL> (0.03)
<PER-SHARE-NAV-END> 11.33
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
