Annual Report
December 31, 1996
The Phoenix Edge Series Fund
<PAGE>
MONEY MARKET SERIES
Over the last twelve months, Phoenix Edge Money Market Series continued to
produce strong results for its shareholders. As of December 31, 1996, the
current yield on the Fund was 4.97%, versus the 4.82% seven-day average yield
of taxable money market funds reported by IBC Donoghue's Money Market Report.
The current yield is a seven-day annualized yield computed by dividing the
average net income earned per share during the seven-day period preceding the
date of calculation by the average daily net asset value per share for the
same period, with the resulting figure multiplied by 365.
Shifting market opinion over the direction of the U.S. economy was
responsible for much of the volatility in short-term interest rates during
this latest twelve-month reporting period. In January, the Central Bank cut
the Fed Funds Rate from 5.50% to 5.25% in an effort to stimulate what was
believed to be a sluggish economy. Although it was widely anticipated that
the Federal Reserve would have to lower rates again, a surprisingly strong
February employment report provided conflicting evidence about the economy's
health. As more data became available, it became evident that the economy had
grown robustly during the first half of 1996. During this period, short-term
interest rates moved higher as the financial markets had to consider the
threat of future inflation.
By late summer, the consensus view on Wall Street shifted once again as
signs of more moderate economic growth became increasingly apparent and
concerns over inflation declined. With the exception of the last few weeks in
December, short-term interest rates trended lower for the remainder of this
reporting period. In the end, despite all these market gyrations during 1996,
the 90-day Treasury bill finished the year yielding 5.19%--only 12 basis
points higher than where it stood one year ago.
Looking ahead, the Fund continues to focus on high-quality assets as
represented by the portfolio's average credit quality of A1/P1 as of December
31, 1996. In terms of our asset allocation strategy, we are currently
emphasizing top-tier commercial paper, variable-rate instruments and U.S.
Government obligations. As always, we remain committed to carefully
monitoring the short-term markets for attractive investment opportunities.
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART]
MONTHLY YIELD COMPARISON
IBC Donoghue Money
Money Fund Report* Market Series
1/31/96 5.03 5.01
2/29/96 4.8 4.82
3/31/96 4.69 4.77
4/30/96 4.68 4.77
5/31/96 4.67 4.78
6/30/96 4.7 4.86
7/31/96 4.73 4.86
8/31/96 4.74 4.75
9/30/96 4.75 4.91
10/31/96 4.75 4.82
11/30/96 4.75 4.84
12/31/96 4.78 4.97
- --------------------------------------------------------------------------------
The above graph covers the period from January 1, 1996 to December 31, 1996.
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 IBC
Donoghue's Money Fund Report.
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
FACE
VALUE INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
- --------- --------------------------------------------------------------- -------- ---------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--3.8%
U.S. Treasury Bills--1.5%
$2,000 U.S. Treasury Bills 4.80% 02/06/97 $ 1,990,400
-------------
U.S. Treasury Notes--2.3%
3,000 U.S. Treasury Notes 6.88 02/28/97 3,008,112
-------------
TOTAL U.S. GOVERNMENT SECURITIES 4,998,512
-------------
FEDERAL AGENCY SECURITIES--8.6%
2,175 Federal National Mortgage Assoc. 5.34 02/24/97 2,157,578
1,500 Federal Home Loan Banks 5.27 02/28/97 1,500,000
4,190 Federal National Mortgage Assoc. 5.36 03/27/97 4,136,973
2,000 Federal Farm Credit Banks 5.40 04/01/97 1,999,441
1,500 Federal Home Loan Banks 5.69 11/20/97 1,500,000
-------------
TOTAL FEDERAL AGENCY SECURITIES 11,293,992
-------------
</TABLE>
See Notes to Financial Statements
2-2
<PAGE>
MONEY MARKET SERIES
<TABLE>
<CAPTION>
FACE
VALUE INTEREST RESET
(000) DESCRIPTION RATE DATE VALUE
- --------- ---------------------------------------------------------------- --------- ----------- -------------
<S> <C> <C> <C> <C>
FEDERAL AGENCY SECURITIES--VARIABLE--12.0% (b)
$1,500 Federal Farm Credit Banks (final maturity 02/24/97) 5.51% 01/02/97 $ 1,499,957
4,500 Federal Farm Credit Banks (final maturity 07/24/00) 5.54 01/02/97 4,501,807
1,500 Federal Home Loan Banks (final maturity 01/14/97) 5.70 01/02/97 1,500,000
2,500 Student Loan Marketing Assoc. (final maturity 11/24/97) 5.39 01/07/97 2,500,000
1,500 Student Loan Marketing Assoc. (final maturity 11/10/98) 5.41 01/07/97 1,498,532
1,000 Student Loan Marketing Assoc. (final maturity 02/22/99) 5.42 01/07/97 1,000,000
1,600 Student Loan Marketing Assoc. (final maturity 10/30/97) 5.57 01/07/97 1,600,731
1,650 Federal National Mortgage Assoc. (
final maturity 12/14/98) 5.18 03/14/97 1,648,237
-----------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE 15,749,264
-----------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (Unaudited) RATE DATE VALUE
- -------- ------------------------------------------------- ------------ --------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--74.0%
1,500 Campbell Soup Co. A-1+ 6.75 01/02/97 1,499,719
4,280 Cargill, Inc. A-1+ 6.95 01/02/97 4,279,174
1,500 AlliedSignal, Inc. A-1 6.10 01/03/97 1,499,492
725 Abbott Laboratories A-1+ 5.75 01/07/97 724,305
1,940 DuPont (E.I.) de Nemours & Co. A-1+ 5.29 01/09/97 1,937,719
2,775 Merrill Lynch & Co., Inc. A-1+ 5.48 01/09/97 2,771,621
3,000 Heinz (H.J.) Co. A-1 5.40 01/10/97 2,995,950
1,160 Heinz (H.J.) Co. A-1 5.40 01/10/97 1,158,434
4,500 Exxon Imperial U.S., Inc. A-1+ 5.41 01/13/97 4,491,885
3,500 Greenwich Funding Corp. A-1+ 5.60 01/15/97 3,492,378
2,500 Receivables Capital Corp. A-1 5.73 01/15/97 2,494,429
1,500 Preferred Receivables Funding Corp. A-1 5.35 01/16/97 1,496,656
1,500 General Electric Capital Corp. A-1+ 5.32 01/17/97 1,500,000
2,140 Cargill, Inc. A-1+ 5.41 01/22/97 2,133,247
3,500 General Electric Capital Corp. A-1+ 5.31 01/22/97 3,500,000
2,500 AlliedSignal, Inc. A-1 5.47 01/23/97 2,491,643
2,335 AlliedSignal, Inc. A-1 5.65 01/23/97 2,326,938
2,000 Preferred Receivables Funding Corp. A-1 5.45 01/23/97 1,993,339
2,165 Goldman Sachs & Co. A-1+ 5.45 01/24/97 2,157,462
915 Merrill Lynch & Co., Inc. A-1+ 5.33 01/24/97 911,884
2,000 Albertson's, Inc. A-1 5.38 01/27/97 1,992,229
555 First Deposit Funding Trust A-1 5.34 01/30/97 552,613
500 United Parcel Service of America, Inc. A-1+ 5.35 01/30/97 497,845
1,300 Heinz (H.J.) Co. A-1 5.40 02/03/97 1,293,565
450 DuPont (E.I.) de Nemours & Co. A-1+ 5.55 02/07/97 447,433
709 Kellogg Co. A-1+ 5.37 02/07/97 705,087
2,500 Vermont American Corp. A-1+ 5.47 02/07/97 2,485,945
2,500 Private Export Funding Corp. A-1+ 5.28 02/10/97 2,485,333
3,000 CXC, Inc. A-1+ 5.35 02/11/97 2,981,721
2,230 Corporate Receivables Corp. A-1 5.37 02/12/97 2,216,029
1,175 First Deposit Funding Trust A-1 5.32 02/12/97 1,167,707
2,500 Kimberly-Clark Corp. A-1+ 5.42 02/12/97 2,484,192
2,500 Preferred Receivables Funding Corp. A-1 5.35 02/13/97 2,484,024
3,140 Goldman Sachs & Co. A-1+ 5.35 02/14/97 3,119,468
1,500 Kimberly-Clark Corp. A-1+ 5.42 02/14/97 1,490,063
4,500 Southwestern Bell Telephone Co. A-1+ 5.37 02/18/97 4,467,780
1,355 Corporate Receivables Corp. A-1 5.35 02/20/97 1,344,932
1,500 Southwestern Bell Telephone Co. A-1+ 5.43 02/25/97 1,487,556
2,000 Greenwich Funding Corp. A-1+ 5.47 02/28/97 1,982,374
619 Greenwich Funding Corp. A-1+ 5.35 03/03/97 613,389
4,500 Bellsouth Telecommunications, Inc. A-1+ 5.34 03/04/97 4,458,615
2,100 CXC, Inc. A-1+ 5.32 03/17/97 2,076,725
3,000 Asset Securitization Cooperative Corp. A-1+ 5.37 03/27/97 2,961,963
3,700 Receivables Capital Corp. A-1 5.39 05/01/97 3,633,523
1,000 CXC, Inc. A-1+ 5.35 05/15/97 980,086
1,000 Beta Finance, Inc. A-1+ 5.80 08/14/97 1,000,000
------------
TOTAL COMMERCIAL PAPER 97,266,472
------------
TOTAL INVESTMENTS--98.4%
(Identified cost $129,308,240) 129,308,240(a)
Cash and receivables, less liabilities--1.6% 2,053,166
------------
NET ASSETS--100.0% $131,361,406
============
</TABLE>
(a) Federal Income Tax Information: At December 31, 1996, the aggregate cost
of securities was the same for book and tax purposes.
(b) Variable rate demand note. The interest rates shown reflect the rate
currently in effect. The maturity dates shown reflect the next
interest rate reset dates.
See Notes to Financial Statements
2-3
<PAGE>
MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $129,308,240) $129,308,240
Cash 526,466
Receivable for fund shares sold 1,267,063
Interest receivable 354,789
------------
Total assets 131,456,558
------------
Liabilities
Investment advisory fee 43,068
Trustees' fee 8,091
Financial agent fee 6,397
Accrued expenses 37,596
------------
Total liabilities 95,152
------------
Net Assets $131,361,406
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $131,361,403
Undistributed net investment income 3
------------
Net Assets $131,361,406
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 13,136,138
============
Net asset value and offering price per share $10.00
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $ 5,865,100
------------
Total investment income 5,865,100
------------
Expenses
Investment advisory fee 431,032
Financial agent fee 64,655
Printing 33,528
Professional 24,087
Trustees 18,073
Custodian 16,377
Miscellaneous 2,783
------------
Total expenses 590,535
------------
Net investment income 5,274,565
------------
Net increase in net assets resulting from operations $ 5,274,565
============
</TABLE>
See Notes to Financial Statements
2-4
<PAGE>
MONEY MARKET SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
---------------- ----------------
<S> <C> <C>
From Operations
Net investment income $ 5,274,565 $ 5,070,409
-------------- ---------------
Net increase in net assets resulting from operations 5,274,565 5,070,409
-------------- ---------------
From Distributions to Shareholders
Net investment income (5,303,654) (5,055,199)
-------------- ---------------
Decrease in net assets from distributions to shareholders (5,303,654) (5,055,199)
-------------- ---------------
From Share Transactions
Proceeds from sales of shares (31,500,976 and 19,415,954 shares,
respectively) 315,009,761 194,159,531
Net asset value of shares issued from reinvestment of distributions
(530,365 and 505,520 shares, respectively) 5,303,654 5,055,199
Cost of shares repurchased (29,186,637 and 19,087,235 shares,
respectively) (291,866,357) (190,872,354)
-------------- ---------------
Increase in net assets from share transactions 28,447,058 8,342,376
-------------- ---------------
Net increase in net assets 28,417,969 8,357,586
Net Assets
Beginning of period 102,943,437 94,585,851
-------------- ---------------
End of period (including undistributed net investment income of $3 and
$29,092, respectively) $ 131,361,406 $ 102,943,437
============== ===============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00
Income from investment operations
Net investment income 0.50 0.56 0.38(1) 0.28(1) 0.35
-------- -------- ------- ------- -------
Total from investment operations 0.50 0.56 0.38 0.28 0.35
-------- -------- ------- ------- -------
Less distributions
Dividends from net investment income (0.50) (0.56) (0.38) (0.28) (0.35)
-------- -------- ------- ------- -------
Total distributions (0.50) (0.56) (0.38) (0.28) (0.35)
-------- -------- ------- ------- -------
Net asset value, end of period $10.00 $10.00 $10.00 $10.00 $10.00
======== ======== ======= ======= =======
Total return 4.98% 5.55% 3.77% 2.80% 3.50%
Ratios/supplemental data:
Net assets, end of period (thousands) $131,361 $102,943 $94,586 $72,946 $69,962
Ratio to average net assets of:
Operating expenses 0.55% 0.53%(2) 0.55% 0.55% 0.50%
Net investment income 4.89% 5.57% 3.85% 2.84% 3.49%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.003 and $0.01 per share, respectively.
(2) The ratio of operating expenses to average net assets excludes the
effect of expense offsets for custodian fees; if expense offsets were
included, the ratio would not significantly differ.
See Notes to Financial Statements
2-5
<PAGE>
GROWTH SERIES
With the stock market continuing its remarkable rally dating back to
December 1994, Phoenix Edge Growth Series posted double-digit gains during
this reporting cycle. For the twelve-month period ended December 31, 1996,
the Fund posted a total return of 12.58%, while the Standard & Poor's 500
Stock Index, a commonly used measure of U.S. stock market performance,
returned 23.25%. All of these figures assume reinvestment of any
distributions, but exclude the effect of sales charges.
We have viewed the stock market as in the late stages of a cyclical upswing.
Since October 1990, stocks have moved higher virtually without major
interruption. The excellent returns have bred an environment of complacency
and high expectations that have pushed investors further out on the risk
spectrum. During the second quarter of 1996, we witnessed a tremendous influx
of money into aggressive growth and smaller company funds that showcased this
speculative impulse. The correction of July 1996 cleansed the excesses in
this area of the market. Since July, the focus has shifted to larger company
outperformance. Investors have poured money into very large companies
believed to provide steady growth characteristics and ample liquidity. This
more recent tactic has pushed market indices (such as S&P 500 and the Dow
Jones Industrials) higher, while broader measures of stock performance have
lagged.
In retrospect, the Fund's performance was held back by a more guarded stance
toward the stock market. Our approach of lowering the portfolio's risk
profile by holding cash reserves met with good results through August 1996,
and especially in the difficult market environment during July. But the
dramatic rebound in equity prices during the remainder of the year served as
the primary reason for lagging the S&P 500 Stock Index. Positive contributors
to performance during the reporting period included our excellent stock
selection in both the energy and financial sectors as well as our decision to
avoid the poorly performing utility group. Specific areas which hindered our
relative equity performance included weakness in some of our technology and
capital goods holdings.
While valuation levels have clearly risen over the last two years, we do not
believe that the stock market is presently overvalued. As we move into 1997,
the Fund is currently focusing on stable growth stocks as well as companies
with improving earnings prospects. In terms of sector allocation, the
portfolio is currently overweighted in the health care and financial sectors,
and underweighted in basic materials and consumer cyclical stocks. Although
we believe the technology group still offers excellent long-term growth
opportunities, we are maintaining a market weighting in this volatile sector,
while waiting for a more favorable time to selectively increase our exposure
in this area.
In conclusion, after back-to-back years of powerful performance, the equity
risk is rising. We believe that the key to 1997 outperformance lies in taking
advantage of market inefficiencies within a volatile trading range combined
with individual stock selection.
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
Growth Series S&P 500 Stock Index
12/31/86 $10,000 $10,000
12/31/87 10,705 10,517
12/31/88 11,115 12,253
12/31/89 15,123 16,104
12/31/90 15,725 15,590
12/31/91 22,617 20,352
12/31/92 24,945 21,917
12/31/93 29,856 24,109
12/31/94 30,298 24,427
12/31/95 39,645 33,590
12/31/96 44,632 41,398
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
1 Year 5 Years 10 Years
- ---------------------------------------------------------------------
Growth Series 12.58% 14.56% 16.13%
- ---------------------------------------------------------------------
S&P 500 Stock Index* 23.25% 15.26% 15.27%
- ---------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/86.
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, 1996
SHARES VALUE
--------- ----------------
COMMON STOCKS--96.5%
Aerospace & Defense--2.0%
Boeing Co. 121,200 $ 12,892,650
United Technologies Corp. 174,400 11,510,400
-------------
24,403,050
-------------
Banks--7.5%
Ahmanson (H.F.) & Co. 388,500 12,626,250
BankAmerica Corp. 124,500 12,418,875
Chase Manhattan Corp. 207,100 18,483,675
Citicorp 180,500 18,591,500
Nationsbank Corp. 63,800 6,236,450
Republic New York Corp. 149,800 12,227,425
Wells Fargo & Co. 45,300 12,219,675
-------------
92,803,850
-------------
Beverages--3.8%
Coca-Cola Co. 488,900 25,728,363
PepsiCo, Inc. 292,900 8,567,325
Seagram Ltd. 317,200 12,291,500
-------------
46,587,188
-------------
Chemical--2.0%
Du Pont (E.I.) de Nemours & Co. 130,300 12,297,063
IMC Global, Inc. 328,600 12,856,475
-------------
25,153,538
-------------
Computer Software & Services--5.1%
Adaptec, Inc. (b) 281,600 11,264,000
Computer Associates International, Inc. 300,100 14,929,975
First Data Corp. 320,200 11,687,300
Microsoft Corp. (b) 295,200 24,390,900
Sterling Commerce, Inc. (b) 1 35
-------------
62,272,210
-------------
Conglomerates--2.0%
AlliedSignal, Inc. 184,600 12,368,200
Tyco International Ltd. 236,400 12,499,650
-------------
24,867,850
-------------
Containers--1.1%
Crown Cork & Seal, Inc. 238,600 12,973,875
-------------
Cosmetics & Soaps--3.2%
Colgate Palmolive Co. 136,700 12,610,575
Gillette Co. 179,300 13,940,575
Procter & Gamble Co. 115,500 12,416,250
-------------
38,967,400
-------------
Diversified Financial Services--6.2%
American Express Co. 229,400 12,961,100
Conseco, Inc. 197,700 12,603,375
Federal National Mortgage Assoc. 305,900 11,394,775
First USA, Inc. 379,700 13,147,113
MBNA Corp. 322,300 13,375,450
Travelers Group, Inc. 282,300 12,809,362
-------------
76,291,175
-------------
Diversified Miscellaneous--1.2%
Eastman Kodak Co. 77,800 6,243,450
Equifax, Inc. 294,700 9,025,188
-------------
15,268,638
-------------
Electrical Equipment--3.8%
Checkpoint Systems, Inc. (b) 176,800 4,375,800
General Electric Co. 243,900 24,115,612
Raychem Corp. 232,700 18,645,087
-------------
47,136,499
-------------
Electronics--6.8%
Atmel Corp. (b) 181,600 $ 6,015,500
Intel Corp. 290,200 37,998,062
Perkin Elmer Corp. 215,100 12,664,012
S3, Inc. (b) 342,100 5,559,125
3Com Corp. (b) 295,800 21,704,325
-------------
83,941,024
-------------
Healthcare--Diversified--2.5%
American Home Products Corp. 210,600 12,346,425
Mallinckrodt, Inc. 280,800 12,390,300
Warner-Lambert Co. 80,400 6,030,000
-------------
30,766,725
-------------
Healthcare--Drugs--7.5%
Amgen, Inc. (b) 217,000 11,799,375
Centocor, Inc. (b) 176,500 6,309,875
Merck & Co., Inc. 462,600 36,661,050
Pfizer, Inc. 297,000 24,613,875
Pharmacia & Upjohn, Inc. 325,400 12,893,975
-------------
92,278,150
-------------
Hospital Management & Services--1.0%
Columbia/HCA Healthcare Corp. 307,500 12,530,625
-------------
Insurance--1.5%
Allstate Corp. 212,400 12,292,650
SunAmerica, Inc. 150,100 6,660,688
-------------
18,953,338
-------------
Medical Products & Supplies--3.0%
Boston Scientific Corp. (b) 210,100 12,606,000
Johnson & Johnson 248,100 12,342,975
Medtronic, Inc. 187,000 12,716,000
-------------
37,664,975
-------------
Natural Gas--1.5%
Anadarko Petroleum Corp. 185,600 12,017,600
Burlington Resources, Inc. 118,500 5,969,437
-------------
17,987,037
-------------
Office & Business Equipment--3.9%
Compaq Computer Corp. (b) 244,200 18,131,850
Hewlett Packard Co. 120,500 6,055,125
International Business Machines Corp. 158,500 23,933,500
-------------
48,120,475
-------------
Oil--1.0%
Louisiana Land & Exploration Co. 225,800 12,108,525
-------------
Oil Service & Equipment--8.9%
BJ Services Co. (b) 376,800 19,216,800
Diamond Offshore Drilling (b) 322,700 18,393,900
Dresser Industries, Inc. 229,100 7,102,100
ENSCO International, Inc. (b) 297,000 14,404,500
Halliburton Co. 307,500 18,526,875
Rowan Companies, Inc. (b) 262,400 5,936,800
Schlumberger Ltd. 119,800 11,965,025
Tidewater, Inc. 323,800 14,651,950
-------------
110,197,950
-------------
Professional Services--2.1%
ADT Ltd. (b) 547,700 12,528,637
Cognizant Corp. 387,000 12,771,000
-------------
25,299,637
-------------
Rails--1.5%
Burlington Northern, Inc. 219,500 18,959,313
-------------
See Notes to Financial Statements
2-7
<PAGE>
GROWTH SERIES
SHARES VALUE
--------- ----------------
Retail--7.2%
CVS Corp. 312,300 $ 12,921,412
Federated Department Stores, Inc. (b) 374,000 12,762,750
Footstar, Inc. (b) 1 12
Home Depot, Inc. 495,000 24,811,875
Price/Costco, Inc. (b) 755,500 18,981,938
TJX Companies, Inc. 417,600 19,783,800
--------------
89,261,787
--------------
Retail--Food--1.0%
American Stores Co. 307,500 12,569,062
--------------
Telecommunications Equipment--3.0%
Cisco Systems, Inc. (b) 583,900 37,150,638
--------------
Tobacco--3.0%
Philip Morris Companies, Inc. 330,400 37,211,300
--------------
Utility--Telephone--3.2%
Ameritech Corp. 221,300 13,416,313
GTE Corp. 293,900 13,372,450
SBC Communications, Inc. 251,800 13,030,650
--------------
39,819,413
--------------
TOTAL COMMON STOCKS
(Identified cost $1,117,867,582) 1,191,545,247
--------------
FOREIGN COMMON STOCKS--3.2%
Chemical--1.0%
Potash Corp. of Saskatchewan, Inc. (Canada) 152,600 12,971,000
--------------
Cosmetics & Soaps--1.1%
Unilever NV (Netherlands) 74,200 13,003,550
--------------
Oil Service & Equipment--1.1%
Elf Aquitane Sponsored ADR (France) 307,600 13,918,900
--------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $32,799,274) 39,893,450
--------------
TOTAL LONG-TERM INVESTMENTS--99.7%
(Identified cost $1,150,666,856) 1,231,438,697
--------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- -----------------
SHORT-TERM OBLIGATIONS--5.4%
Commercial Paper--3.5%
Private Export Funding Corp. 5.30%,
1-28-97 A-1+ $ 2,145 $ 2,135,863
Albertson's, Inc. 5.48%, 1-29-97 A-1 4,675 4,655,074
Cargill, Inc. 5.33%, 1-31-97 A-1+ 3,000 2,986,675
Southwestern Bell Telephone Co.
5.30%, 1-31-97 A-1+ 3,300 3,283,917
Corporate Receivables Corp. 5.37%,
2-12-97 A-1 3,410 3,387,885
General Re Corp. 5.30%, 2-14-97 A-1+ 5,000 4,964,959
Goldman Sachs & Co. 5.35%, 2-14-97 A-1+ 6,380 6,335,287
Receivables Capital Corp. 5.40%,
2-14-97 A-1 3,565 3,539,989
Beta Finance, Inc. 5.38%, 2-25-97 A-1+ 3,000 2,973,864
Southwestern Bell Telephone Co.
5.43%, 2-25-97 A-1+ 5,000 4,956,210
Cargill, Inc., 5.30%, 3-6-97 A-1+ 4,000 3,958,680
--------------
43,178,403
--------------
Federal Agency Securities--1.9%
Federal Home Loan Mortgage Corp. 5.31%, 2-21-97 2,065 2,048,541
Federal National Mortgage Assoc. 5.24%, 2-27-97 5,000 4,955,787
Federal Farm Credit Banks 5.20%, 5-6-97 2,000 1,963,240
Federal Home Loan Banks 5.29%,
8-8-97 (c) 5,000 5,000,000
Federal National Mortgage Assoc. 5.37%,
12-9-97 (c) 10,000 9,995,500
--------------
23,963,068
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $67,163,196) 67,141,471
--------------
TOTAL INVESTMENTS--105.1%
(Identified cost $1,217,830,052) 1,298,580,168(a)
Cash and receivables, less liabilities---(5.1%) (63,185,635)
--------------
NET ASSETS--100.0% $1,235,394,533
==============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $102,899,035 and gross
depreciation of $22,857,753 for income tax purposes. At December 31,
1996, the aggregate cost of securities for federal income tax purposes
was $1,218,538,886.
(b) Non-income producing.
(c) Variable rate security. The interest rates shown reflect the rate
currently in effect.
See Notes to Financial Statements
2-8
<PAGE>
GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $1,217,830,052) $1,298,580,168
Receivable for investment securities sold 61,614,267
Interest and dividends receivable 1,359,744
Tax reclaim receivable 150,324
-------------
Total assets 1,361,704,503
-------------
Liabilities
Custodian 6,928,727
Payable for investment securities purchased 118,208,858
Payable for fund shares repurchased 312,495
Investment advisory fee 663,971
Financial agent fee 63,221
Trustees' fee 8,862
Accrued expenses 123,836
-------------
Total liabilities 126,309,970
-------------
Net Assets $1,235,394,533
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $1,077,175,658
Undistributed net investment income 739,354
Accumulated net realized gain 76,729,405
Net unrealized appreciation 80,750,116
-------------
Net Assets $1,235,394,533
=============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 65,390,920
=============
Net asset value and offering price per share $18.89
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 11,473,651
Interest 8,182,579
------------
Total investment income 19,656,230
------------
Expenses
Investment advisory fee 7,114,489
Financial agent fee 673,949
Printing 139,045
Custodian 107,732
Professional 35,542
Trustees 18,816
Miscellaneous 23,040
------------
Total expenses 8,112,613
------------
Net investment income 11,543,617
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 151,656,728
Net realized loss on foreign currency transactions (25,548)
Net change in unrealized appreciation (depreciation) on investments (28,811,458)
------------
Net gain on investments 122,819,722
------------
Net increase in net assets resulting from operations $134,363,339
============
</TABLE>
See Notes to Financial Statements
2-9
<PAGE>
GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
--------------- ----------------
<S> <C> <C>
From Operations
Net investment income $ 11,543,617 $ 8,919,570
Net realized gain 151,631,180 111,984,233
Net change in unrealized appreciation (depreciation) (28,811,458) 89,700,570
------------- --------------
Net increase in net assets resulting from operations 134,363,339 210,604,373
------------- --------------
From Distributions to Shareholders
Net investment income (10,973,300) (7,451,972)
Net realized gains (82,322,855) (105,927,796)
------------- --------------
Decrease in net assets from distributions to shareholders (93,296,155) (113,379,768)
------------- --------------
From Share Transactions
Proceeds from sales of shares (16,369,935 and 16,787,870 shares,
respectively) 309,035,692 302,038,455
Net asset value of shares issued from reinvestment of distributions
(4,853,881 and 6,290,645 shares, respectively) 93,296,155 113,379,768
Cost of shares repurchased (10,173,971 and 8,019,458 shares, respectively) (193,393,445) (143,474,953)
------------- --------------
Increase in net assets from share transactions 208,938,402 271,943,270
------------- --------------
Net increase in net assets 250,005,586 369,167,875
Net Assets
Beginning of period 985,388,947 616,221,072
------------- --------------
End of period (including undistributed net investment income of $739,354 and
$194,585, respectively) $1,235,394,533 $ 985,388,947
============= ==============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
-------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $18.13 $15.69 $16.59 $15.01 $14.43
Income from investment
operations
Net investment income 0.19 0.20 0.23(1)(3) 0.16(3) 0.22(3)
Net realized and unrealized
gain 2.10 4.60 0.02 2.77 1.25
---------- -------- -------- -------- --------
Total from investment
operations 2.29 4.80 0.25 2.93 1.47
---------- -------- -------- -------- --------
Less distributions
Dividends from net investment
income (0.18) (0.17) (0.23) (0.15) (0.23)
Dividends from net realized
gains (1.35) (2.19) (0.92) (1.20) (0.66)
---------- -------- -------- -------- --------
Total distributions (1.53) (2.36) (1.15) (1.35) (0.89)
---------- -------- -------- -------- --------
Change in net asset value 0.76 2.44 (0.90) 1.58 0.58
---------- -------- -------- -------- --------
Net asset value, end of period $18.89 $18.13 $15.69 $16.59 $15.01
========== ======== ======== ======== ========
Total return 12.58% 30.85% 1.48% 19.69% 10.29%
Ratios/supplemental data:
Net assets, end of period
(thousands) $1,235,395 $985,389 $616,221 $446,368 $245,565
Ratio to average net assets of:
Operating expenses 0.72% 0.75%(2) 0.80% 0.79% 0.50%
Net investment income 1.03% 1.12% 1.38% 0.97% 1.66%
Portfolio turnover rate 167% 173% 185% 185% 214%
Average commission rate paid(4) $0.0455 N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.003 per share.
(2) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(3) Computed using average shares outstanding.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-10
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
After posting stellar gains in 1995, last year's bond market results were
clearly less than impressive. Most of the disappointing performance occurred
in the first half of 1996, when nervous investors pushed interest rates
higher (and bond prices lower) in response to the unexpectedly strong U.S.
economy. The consensus opinion on Wall Street was that too much economic
growth could lead to higher inflation. For the first six months of the year,
the fixed-income market, as measured by the Lehman Brothers Aggregate Bond
Index, returned a discouraging -1.22%.
By late summer, market sentiment had turned positive again and interest
rates finally broke out of their trading range and headed downward. This more
optimistic mood among fixed-income investors was based on numerous reports
suggesting that the U.S. economy was now growing at a more moderate pace and
that core inflation was still in check. In this declining interest rate
environment, the bond market recouped all of its losses from the first half
of the year and moved into positive territory. Based on the Lehman Brothers
Aggregate Bond Index, bond market performance improved considerably during
the second-half of 1996, returning a respectable 4.90% over this latest
six-month period.
Generally speaking, bond investors were well rewarded for moving down the
credit-risk spectrum in 1996. The emerging markets sector finally received
front-page recognition as this group significantly outperformed all other
bond categories as well as most of the world's equity markets. Domestic
high-yield bonds also posted double-digit returns last year, aided by a
favorable economic climate and strong demand from mutual fund investors.
Conversely, the more conservative fixed-income sectors (treasuries, agencies
and top-tier investment-grade corporates) generally lagged the overall market
in 1996, as the bond market clearly favored higher yield over higher credit
quality.
Phoenix Edge Multi-Sector Fixed Income Series posted very strong results in
1996. For the twelve-month period ended December 31, 1996, the Fund provided
a total return of 12.42%. These results significantly outpaced its benchmark,
the Lehman Brothers Aggregate Bond Index, which returned 3.63% over the same
period. All of these figures assume reinvestment of any distributions, but
exclude the effect of sales charges.
Our emphasis on the less traditional sectors of the fixed-income market paid
off handsomely and contributed to much of the Fund's outperformance during
the year. Over the last twelve months, performance in the emerging markets
and domestic high-yield sectors continued to surpass all other fixed-income
categories and the portfolio benefited from its exposure in these areas.
Additionally, our decision to focus on commercial and non-agency residential
mortgage-backed securities, rather than more conventional agency
mortgage-backed securities, proved to be rewarding as these less efficient
sectors continued to produce strong results.
As we head into the new year, the U.S. economy currently appears to be in
good shape. The core inflation rate (CPI excluding food and energy costs)
rose just 2.6% in 1996 and the economy now appears to be growing at a more
moderate and sustainable pace. While news of this nature can go a long way in
restoring confidence in a shaky bond market, we are not convinced that the
threat of inflation is completely behind us. Although it may currently be
well contained, it is always a risk to the bond market.
With a few minor adjustments, we believe that the investment strategy we
successfully implemented last year can also perform well in 1997. In the
mortgage-backed arena, we are of the opinion that commercial and non-agency
residential securities continue to offer better relative value than their
agency counterparts. We also like the underfollowed taxable municipal sector,
which currently provides a significant yield advantage over comparably rated
corporate bonds. Lastly, despite its extended rally, we remain bullish on
emerging markets debt. While last year's gains were exceptionally strong
relative to other fixed-income groups, returns of this nature are not
unprecedented for this sector.
Overall, we are pleased with the Fund's performance during 1996 and believe
that the portfolio is well positioned for the new year. As always, we will
continue to overweight undervalued sectors of the bond market as our primary
means of adding value relative to our benchmark, the Lehman Brothers
Aggregate Bond Index.
2-11
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
Multi-Sector Lehman Brothers
Fixed Income Aggregate
Series Bond Index*
12/31/86 $10,000 $10,000
12/31/87 10,112 10,276
12/31/88 11,160 11,087
12/31/89 12,086 12,698
12/31/90 12,707 13,836
12/31/91 15,174 16,050
12/31/92 16,695 17,238
12/31/93 19,350 18,919
12/31/94 18,292 18,367
12/31/95 22,597 21,761
12/31/96 25,404 22,551
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
1 Year 5 Years 10 Years
- ------------------------------------------------------------------------
Multi-Sector Fixed Income Series 12.42% 10.86% 9.77%
- ------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index* 3.63% 7.04% 8.47%
- ------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/86.
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.
SCHEDULE OF INVESTMENTS
December 31, 1996
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ---------------
U.S. GOVERNMENT AND AGENCY SECURITIES--22.1%
U.S. Treasury Bonds--7.1%
U.S. Treasury Bonds 6%, '26 (h) Aaa $11,300 $ 10,279,462
------------
U.S. Treasury Notes--12.2%
U.S. Treasury Notes 5.75%, '98 Aaa 750 748,043
U.S. Treasury Notes 5.875%, '99 Aaa 3,150 3,137,202
U.S. Treasury Notes 6.125%, '01 Aaa 1,500 1,493,640
U.S. Treasury Notes 6.50%, '06 Aaa 12,250 12,318,906
------------
17,697,791
------------
Agency Mortgage-Backed Securities--2.8%
FHLMC 7.50%, '18 Aaa 296 296,861
GNMA 8%, '06 Aaa 189 195,128
GNMA 6.50%, '23 Aaa 2,221 2,131,617
GNMA 6.50%, '25 Aaa 942 898,296
GNMA 6.50%, '26 Aaa 584 557,261
------------
4,079,163
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $32,090,576) 32,056,416
------------
NON-CONVERTIBLE BONDS--40.6%
Asset-Backed Securities--4.2%
Airplanes Pass Through Trust 1D
10.875%, '19 Ba $ 1,500 $ 1,654,605
Green Tree Financial Corp. 94-1, B2
7.85%, '19 Baa 3,000 3,032,344
Team Fleet Financing Corp., 96-1, B
144A 7.10%, '02 (b) BBB(c) 1,425 1,414,313
------------
6,101,262
------------
Chemical--1.1%
General Chemical, Inc., 9.25%, '03 B 1,500 1,541,250
------------
Conglomerates--0.7%
Allied Waste North America 144A
10.25%, '06 (b) B 1,000 1,055,000
------------
Containers--1.5%
Owens-Illinois, Inc. 11%, '03 Ba 2,000 2,235,000
------------
Entertainment, Leisure & Gaming--0.7%
Comcast Corp. 9.375%, '05 B 1,000 1,040,000
------------
See Notes to Financial Statements
2-12
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ---------------
Hospital Management & Services--1.7%
Tenet Healthcare Corp. Sr. Note
9.625%, '02 Ba $ 500 $ 548,750
Tenet Healthcare Corp. Sr. Sub. Note
10.125%, '05 Ba 1,750 1,935,938
------------
2,484,688
------------
Non-Agency Mortgage-Backed Securities--27.1%
Equitable Life 174, D1 144A 7.77%,
'06 (b) Baa 2,000 2,045,000
FDIC Remic Trust 96-C1, 1D 7.25%,
'26 Baa 1,500 1,464,609
General Electric Co. 96-8, 2A5
7.50%, '26 AAA(c) 995 1,002,399
Kidder Peabody Acceptance Corp.
94-C2, D 7.18%, '05 BBB(c) 500 501,875
Lehman Structured Securities Corp.
96-1, E1 7.955%, '26 BBB(c) 2,457 2,497,318
Morgan Stanley Capital Corp. 144A I
96-WFI, C 6.59%, '06 (b) A 1,250 1,200,781
Mortgage Capital Funding, Inc. 96-M
C2, D 7.257%, '06 Baa(c) 2,000 1,976,563
Oakwood Mortgage Investors 96-C, A2
6.45%, '27 AAA(c) 1,750 1,747,813
Residential Asset Securitization
Trust 96-A4, A13 7.50%, '26 AAA(c) 1,000 991,250
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 AAA(c) 1,916 1,944,258
Resolution Trust Corp. 92-C8, D
8.835%, '23 Baa 1,927 1,987,008
Resolution Trust Corp. 93-C3, A4
6.55%, '24 Aaa 351 349,793
Resolution Trust Corp. 94-C2, D 8%,
'25 BBB(c) 1,705 1,738,268
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa 2,250 2,229,609
Resolution Trust Corp. 95-C2, C 7%,
'27 A 1,880 1,860,825
Resolution Trust Corp. 95-C2, E 7%,
'27 Ba 1,482 1,351,569
Resolution Trust Corp. 95-1, M2
7.50%, '28 Aa 2,131 2,153,922
Resolution Trust Corp. 95-2, C1
7.45%, '29 Baa 1,630 1,626,983
Resolution Trust Corp. 95-2, M1
7.15%, '29 Aa 1,663 1,665,962
Ryland Mortgage Securities Corp. III
92-A, 1A 8.33%, '30 A-(c) 923 926,346
Securitized Asset Sales, Inc. 95-6,
B3 144A 7%, '10 (b) NR 1,397 1,210,167
Securitized Asset Sales, Inc. 95-A,
M 7.53%, '24 Aa 1,818 1,800,216
Structured Asset Securities Corp.
95-C1, D 7.375%, '24 BBB(c) 2,000 1,984,375
Structured Asset Securities Corp.
96-CFL, E 7.75%, '28 BB(c) 1,975 1,944,141
Structured Asset Securities Corp.
96-C3, C 144A 7.375%, '30 (b) A(c) 1,150 1,147,125
------------
39,348,175
------------
Oil Service & Equipment--0.6%
Noble Drilling Corp. 9.125%, '06 Ba 750 806,250
------------
Paper & Forest Products--0.7%
Buckeye Cellulose Corp. 8.50%, '05 Ba 950 952,375
------------
Publishing, Broadcasting, Printing & Cable--1.1%
Poland Communications, Inc. 144A
9.875%, '03 (b) B 1,650 1,640,314
------------
Retail--Food Service--0.0%
ARA Services, Inc. 10.625%, '00 Ba 54 60,008
------------
Telecommunications--1.2%
Call-Net Enterprises 0%, '04 (d) B $ 2,000 $ 1,652,500
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $57,918,684) 58,916,822
------------
FOREIGN NON-CONVERTIBLE BONDS--9.4%
Argentina--1.2%
Bridas Corp. Sr. Note 12.50%, '99 B 1,600 1,712,000
------------
Brazil--2.1%
Globo Comunicacoes 144A 10.50%,
'06 (b) B(c) 2,000 2,010,000
Tevecap SA 144A 12.625%, '04 (b) B 1,000 1,026,250
------------
3,036,250
------------
Canada--1.0%
Videotron Ltd. Sr. Sub. Note 10.25%,
'02 Ba 1,400 1,498,000
------------
Chile--1.4%
CSAV 144A 7.375%, '03 (b) BBB(c) 2,000 1,970,000
------------
Mexico--1.9%
Coca-Cola Femsa 8.95%, '06 Ba 2,000 2,002,500
Grupo Televisa SA 0%, '08 (d) Ba 1,200 792,000
------------
2,794,500
------------
Philippines--0.9%
Subic Power Corp. 144A 9.50%,
'08 (b) NR 1,245 1,311,883
------------
Qatar--0.9%
Ras Laffan Gas 144A 7.628%, '06 (b) A 1,300 1,304,875
------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $12,890,485) 13,627,508
------------
FOREIGN GOVERNMENT SECURITIES--12.1%
Colombia--0.3%
Republic of Colombia Euro 9%, '97 Baa 500 503,960
------------
Croatia--2.6%
Croatia Series A 6.688%, '10 (d) NR 2,238 2,166,663
Croatia Series A 144A 6.688%, '10
(b)(d) NR 1,500 1,452,188
Croatia Series B 6.688%, '06 (d) NR 146 142,259
------------
3,761,110
------------
Dominican Republic--0.3%
Dominican Republic BR-PDI 6.563%,
'09 (d) NR 500 396,250
------------
Mexico--0.9%
United Mexican States Discount A
6.453%, '19 (d)(e) Ba 1,525 1,315,313
------------
Morocco--1.1%
Morocco R&C Agreement Series A
6.375%, '09 (d) NR 2,000 1,650,000
------------
Panama--1.9%
Panama PDI 144A, PIK interest
capitalization, 6.75%, '16 (b)(d) NR 3,500 2,773,688
------------
Philippines--0.9%
Republic of Philippines 144A 8.75%,
'16 (b) B 1,301 1,353,853
------------
Russia--1.3%
Russian Interest Notes 6.41% WI
(d)(g) NR 1,000 695,000
Russian Principal Loans 6.41% WI
(d)(g) NR 2,000 1,176,250
------------
1,871,250
------------
See Notes to Financial Statements
2-13
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- -------------
Slovenia--0.2%
Republic of Slovenia Series 1 144A
6.375%, '06 (b)(d) A(c) $ 145 $ 145,181
Republic of Slovenia Series 2 144A
6%, '06 (b)(d) A(c) 76 74,789
------------
219,970
------------
Venezuela--2.6%
Republic of Venezuela DCB Euro
6.50%, '07 (d) Ba 2,000 1,765,000
Republic of Venezuela FLIRB A Euro
6.625%, '07 (d) Ba 1,000 892,500
Republic of Venezuela Series A NMB
6.625%, '05 (d) Ba 1,250 1,106,250
------------
3,763,750
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $15,306,745) 17,609,144
------------
MUNICIPAL BONDS--10.7%
California--1.8%
Orange County Pension A Taxable
7.67%, '09 Aaa 2,500 2,606,825
------------
Florida--2.6%
Dade County Florida Ed. Facs.
Authority 5.75%, '20 Aaa 475 480,833
Palm Beach Waste Revenue Project B
Taxable 10.50%, '11 NR 1,500 1,492,935
University Miami Exchange Revenue A
Taxable 7.65%, '20 Aaa 1,795 1,811,747
------------
3,785,515
------------
Michigan--0.8%
Hartland Consolidated School
District 5.125%, '22 Aaa 1,280 1,191,654
------------
Pennsylvania--3.0%
Pennsylvania Economic Development
9.50%, '12 NR 2,500 2,348,000
Pennsylvania Economic Development
6.75%, '07 NR 1,950 1,996,332
------------
4,344,332
------------
Texas--0.9%
Texas State Turnpike Authority
Dallas 5.25%, '23 Aaa 1,280 1,222,489
------------
Virginia--1.6%
Newport News Taxable Series B 7.05%,
'25 Aa 750 707,145
Pittsylvania County Series B
7.65%, '10 NR 1,500 1,603,695
------------
2,310,840
------------
TOTAL MUNICIPAL BONDS
(Identified cost $15,306,344) 15,461,655
------------
CONVERTIBLE BONDS--0.7%
Entertainment, Leisure & Gaming--0.7%
Comcast Corp. Cv. 1.125%, '07 (d) B $ 2,000 $ 1,015,000
------------
TOTAL CONVERTIBLE BONDS
(Identified cost $1,103,735) 1,015,000
------------
FOREIGN CONVERTIBLE BONDS--0.8%
Mexico--0.8%
Empresas ICA Sociedad Euro 5%, '04 B(c) 1,700 1,200,625
------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $1,107,962) 1,200,625
------------
SHARES
--------
WARRANTS--0.1%
Paper & Forest Products--0.1%
SD Warren Warrants 144A (b)(f) 30,000 150,000
------------
TOTAL WARRANTS
(Identified cost $142,500) 150,000
------------
PREFERRED STOCKS--1.2%
Paper & Forest Products--0.6%
SD Warren Co. Pfd. PIK 144A
Series B (b) 30,000 857,393
------------
Telecommunications Equipment--0.6%
Cablevision Systems Pfd. M B3 PIK 11.125% 10,000 880,000
------------
TOTAL PREFERRED STOCKS
(Identified cost $1,492,500) 1,737,393
------------
TOTAL LONG-TERM INVESTMENTS--97.7%
(Identified cost $137,359,531) 141,774,563
------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ ---------
SHORT-TERM OBLIGATIONS--1.2%
Commercial Paper--1.2%
Abbott Laboratories 5.42%, 1-7-97 A-1+ $ 1,690 1,688,473
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,688,473) 1,688,473
------------
TOTAL INVESTMENTS--98.9%
(Identified cost $139,048,004) 143,463,036(a)
Cash and receivables, less liabilities--1.1% 1,581,374
------------
NET ASSETS--100.0% $145,044,410
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $5,489,857 and gross
depreciation of $1,096,529 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$139,069,708.
(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,
1996, these securities amounted to a value of $24,142,800 or 16.6% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step coupon obligation; interest rate shown reflects the rate
currently in effect.
(e) Rights incorporated as a unit.
(f) Non-income producing.
(g) When issued.
(h) Segregated as collateral.
See Notes to Financial Statements
2-14
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value (Identified cost $139,048,004) $143,463,036
Cash 23,003
Receivable for investment securities sold 4,075,807
Receivable for fund shares sold 61,173
Interest receivable 2,840,294
------------
Total assets 150,463,313
------------
Liabilities
Payable for investment securities purchased 5,298,125
Investment advisory fee 53,876
Trustees' fee 8,255
Financial agent fee 7,176
Accrued expenses 51,471
------------
Total liabilities 5,418,903
------------
Net Assets $145,044,410
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $138,951,243
Undistributed net investment income 426,754
Accumulated net realized gain 1,251,381
Net unrealized appreciation 4,415,032
------------
Net Assets $145,044,410
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 14,026,293
============
Net asset value and offering price per share $10.34
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $ 9,625,540
Dividends 623,497
------------
Total investment income 10,249,037
------------
Expenses
Investment advisory fee 606,445
Financial agent fee 72,793
Custodian 48,902
Printing 37,165
Professional 20,660
Trustees 18,393
Miscellaneous 5,301
Expenses borne by investment adviser (21,281)
------------
Total expenses 788,378
------------
Net investment income 9,460,659
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 7,367,063
Net change in unrealized appreciation (depreciation) on investments (2,309,914)
------------
Net gain on investments 5,057,149
------------
Net increase in net assets resulting from operations $14,517,808
============
</TABLE>
See Notes to Financial Statements
2-15
<PAGE>
MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income $ 9,460,659 $ 7,829,504
Net realized gain 7,367,063 1,405,058
Net change in unrealized appreciation (depreciation) (2,309,914) 10,007,140
------------ ------------
Net increase in net assets resulting from operations 14,517,808 19,241,702
------------ ------------
From Distributions to Shareholders
Net investment income (9,238,947) (7,763,175)
Net realized gains (4,270,844) --
------------ ------------
Decrease in net assets from distributions to shareholders (13,509,791) (7,763,175)
------------ ------------
From Share Transactions
Proceeds from sales of shares (6,711,402 and 4,715,281 shares,
respectively) 69,891,527 45,595,165
Net asset value of shares issued from reinvestment of distributions
(1,316,308 and 796,247 shares, respectively) 13,509,791 7,763,175
Cost of shares repurchased (4,670,077 and 3,158,605 shares,
respectively) (48,410,465) (30,477,355)
------------ ------------
Increase in net assets from share transactions 34,990,853 22,880,985
------------ ------------
Net increase in net assets 35,998,870 34,359,512
Net Assets
Beginning of period 109,045,540 74,686,028
------------ ------------
End of period (including undistributed net investment income of $426,754
and $135,344, respectively) $145,044,410 $109,045,540
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
---------- ------------ ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.22 $8.98 $10.27 $ 9.58 $9.33
Income from investment operations
Net investment income 0.79(1) 0.83(1)(2) 0.72(1)(2) 0.66(1)(2) 0.66(2)
Net realized and unrealized gain (loss) 0.43 1.22 (1.28) 0.84 0.25
-------- -------- ------- ------- -------
Total from investment operations 1.22 2.05 (0.56) 1.50 0.91
-------- -------- ------- ------- -------
Less distributions
Dividends from net investment income (0.78) (0.81) (0.73) (0.66) (0.66)
Dividends from net realized gains (0.32) -- -- (0.15) --
-------- -------- ------- ------- -------
Total distributions (1.10) (0.81) (0.73) (0.81) (0.66)
-------- -------- ------- ------- -------
Change in net asset value 0.12 1.24 (1.29) 0.69 0.25
-------- -------- ------- ------- -------
Net asset value, end of period $10.34 $10.22 $8.98 $10.27 $9.58
======== ======== ======= ======= =======
Total return 12.42% 23.54% -5.47% 15.90% 10.03%
Ratios/supplemental data:
Net assets, end of period (thousands) $145,044 $109,046 $74,686 $79,393 $43,090
Ratio to average net assets of:
Operating expenses 0.65% 0.65%(3) 0.66% 0.65% 0.50%
Net investment income 7.80% 8.55% 7.62% 6.71% 7.47%
Portfolio turnover rate 191% 147% 181% 169% 166%
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.002, $0.007, $0.006 and $0.005 per share, respectively.
(2) Computed using average shares outstanding.
(3) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
See Notes to Financial Statements
2-16
<PAGE>
TOTAL RETURN SERIES
Despite increasing interest rates and waning corporate earnings momentum,
U.S. stock prices forged higher over this reporting period, fueled by
unprecedented cash inflows into equity mutual funds and continued corporate
share buybacks. Although this remarkable rally dates back to December 1994,
the past year has been one of tremendous rotation among various sectors of
the stock market--a manifestation of increasing investor uncertainty over the
direction of interest rates and the economy. As measured by the Standard &
Poor's 500 Stock Index, the U.S. equity market returned an impressive 23.25%
during 1996.
While it may have been another record year for U.S. equities, the overall
bond market produced less than stellar results. For the twelve months ended
December 31, 1996, the Lehman Brothers Aggregate Bond Index, an unmanaged
gauge of bond market performance, returned a mere 3.63%. Shifting market
opinion over the direction of the U.S. economy contributed to much of the
volatility in interest rates during this reporting period. As measured by the
30-year Treasury bond, interest rates started the year at 5.95%, climbed as
high as 7.19% in July, and finished 1996 yielding 6.64%. Generally speaking,
investors were well rewarded for moving down the credit-risk spectrum last
year, as lower-quality bonds generally outperformed higher-quality issues.
For the twelve months ended December 31, 1996, Phoenix Edge Total Return
Series posted a respectable 9.05%. Over the same period, it's peer group
average--the 185 retail funds tracked by Lipper Analytical Services--earned
13.59%. As with the broad market returns noted above, all of these figures
assume reinvestment of any distributions, but exclude the effect of sales
charges.
During this latest reporting period, Fund performance was held back
primarily because of weakness in some of our consumer cyclical, technology
and health care stocks. Positive contributors to equity performance included
our strong stock selection in the energy, finance and capital goods sectors.
The fixed-income segment of the Fund also boosted results as it continued to
significantly outperform its benchmark, the Lehman Brothers Aggregate Bond
Index. Our decision to emphasize such non-traditional sectors of the bond
market such as taxable municipals, commercial and non-agency residential
mortgage-backed securities and emerging market debt, paid off handsomely
during the year.
After two back-to-back years of powerful performance, the equity risk level
is clearly rising. In a stock market caught between long-term concerns and
intermediate opportunities, we are focusing our equity exposure on growth
companies that have some sensitivity to the domestic economy and/or foreign
sales growth. The Fund is currently emphasizing such timely investment themes
as Capital Goods--The Long Wave (capital goods), Software Solutions
(technology) and Energy Technology (energy). Looking ahead, we believe that
the key to outperformance lies in taking advantage of market inefficiencies
within a volatile trading range combined with individual stock selection.
With a few minor adjustments, we believe that the fixed-income investment
strategy we successfully implemented last year can also perform well in 1997.
In the mortgage-backed arena, we are of the opinion that commercial and
non-agency residential securities continue to offer better relative value
than their agency counterparts. We also like the underfollowed taxable
municipal sector, which currently provides a significant yield advantage over
comparably rated corporate bonds. Lastly, despite its extended rally, we
remain bullish on emerging market debt. While last year's gains were
exceptionally strong relative to other fixed-income groups, returns of this
nature are not unprecedented for this sector.
Overall, we believe the Fund is well positioned for the new year. As of
December 31, 1996, the Fund's asset allocation mix was 73% equities, 16%
fixed income and 11% cash equivalents. As always, we remain committed to the
Fund's primary goal of generating a high level of capital appreciation, but
with less risk than a typical equity fund.
2-17
<PAGE>
TOTAL RETURN SERIES
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
Total Lipper Analytical
Return S&P 500 Services Flexible
Series Stock Index* Fund**
12/31/86 $10,000 $10,000 $10,000
12/31/87 11,258 10,517 10,620
12/31/88 11,520 12,253 11,547
12/31/89 13,811 16,104 13,546
12/31/90 14,587 15,590 13,446
12/31/91 18,881 20,352 16,866
12/31/92 20,896 21,917 18,251
12/31/93 23,198 24,109 20,275
12/31/94 22,862 24,427 19,823
12/31/95 27,027 33,590 24,759
12/31/96 29,473 41,398 28,127
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Total Return Series 9.05% 9.32% 11.40%
- --------------------------------------------------------------------------------
Lipper Analytical Services Flexible Fund** 13.59% 10.75% 10.89%
- --------------------------------------------------------------------------------
S&P 500 Stock Index* 23.25% 15.26% 15.27%
- --------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 12/31/86.
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 185 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.
SCHEDULE OF INVESTMENTS
December 31, 1996
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------
U.S GOVERNMENT SECURITIES--4.3%
U.S. Treasury Bonds--0.7%
U.S. Treasury Bonds 6%, '26 AAA $ 2,850 $ 2,592,608
------------
U.S. Treasury Notes--3.6%
U.S. Treasury Notes 5.75%, '98 AAA 11,000 10,971,290
U.S. Treasury Notes 5.875%, '99 AAA 1,650 1,643,296
U.S. Treasury Notes 6.50%, '06 AAA 1,000 1,005,625
------------
13,620,211
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $16,120,992) 16,212,819
------------
SHARES
-------
COMMON STOCKS--70.5%
Advertising--0.7%
Omnicom Group, Inc. 56,500 2,584,875
------------
Aerospace & Defense--2.0%
Boeing Co. 70,600 7,510,075
------------
SHARES VALUE
--------- ------------
Banks--4.0%
Ahmanson (H.F.) & Co. 91,400 $ 2,970,500
Golden West Financial Corp. 50,000 3,156,250
Great Western Financial Corp. 159,100 4,613,900
Wells Fargo & Co. 15,100 4,073,225
----------
14,813,875
----------
Beverages--1.0%
Seagram Ltd. 94,700 3,669,625
----------
Chemical--2.3%
Du Pont (E.I.) de Nemours & Co. 47,000 4,435,625
Monsanto Co. 109,800 4,268,475
----------
8,704,100
----------
Computer Software & Services--8.1%
Computer Associates International, Inc. 93,400 4,646,650
Fiserv, Inc. (b) 117,900 4,332,825
HBO & Co. 27,900 1,656,563
Microsoft Corp. (b) 86,200 7,122,275
See Notes to Financial Statements
2-18
<PAGE>
TOTAL RETURN SERIES
SHARES VALUE
--------- --------------
Computer Software & Services--continued
Oracle Corp. (b) 96,500 $ 4,028,875
Parametric Technology Corp. (b) 96,800 4,973,100
Sungard Data Systems, Inc. (b) 91,700 3,622,150
-----------
30,382,438
-----------
Conglomerates--2.2%
AlliedSignal, Inc. 80,800 5,413,600
Tyco International Ltd. 55,500 2,934,563
-----------
8,348,163
-----------
Containers--1.1%
Crown Cork & Seal, Inc. 76,300 4,148,812
-----------
Cosmetics & Soaps--2.1%
Colgate Palmolive Co. 50,400 4,649,400
Procter & Gamble Co. 28,900 3,106,750
-----------
7,756,150
-----------
Diversified Financial Services--1.0%
Federal National Mortgage Assoc. 104,100 3,877,725
-----------
Diversified Miscellaneous--1.0%
CUC International, Inc. (b) 152,700 3,626,625
-----------
Electrical Equipment--1.9%
General Electric Co. 30,500 3,015,687
Honeywell, Inc. 64,000 4,208,000
-----------
7,223,687
-----------
Electronics--1.2%
Intel Corp. 35,400 4,635,188
-----------
Healthcare--Diversified--3.0%
American Home Products Corp. 121,200 7,105,350
Warner-Lambert Co. 54,000 4,050,000
-----------
11,155,350
-----------
Healthcare--Drugs--3.3%
Biochem Pharmaceutical, Inc. (b) 77,900 3,914,475
Lilly (Eli) & Co. 49,800 3,635,400
Pfizer, Inc. 60,400 5,005,650
-----------
12,555,525
-----------
Lodging & Restaurants--1.6%
Marriott International, Inc. 106,000 5,856,500
-----------
Machinery--1.7%
Caterpillar, Inc. 36,400 2,739,100
Deere & Co. 87,100 3,538,437
-----------
6,277,537
-----------
Medical Products & Supplies--3.2%
Boston Scientific Corp. (b) 101,400 6,084,000
Medtronic, Inc. 86,500 5,882,000
-----------
11,966,000
-----------
Metals & Mining--1.1%
Aluminum Company of America 64,700 4,124,625
-----------
Natural Gas--6.1%
Anadarko Petroleum Corp. 56,800 3,677,800
Apache Corp. 115,000 4,068,125
Coastal Corp. 18,400 899,300
Columbia Gas System, Inc. 13,100 833,488
KN Energy, Inc. 22,000 863,500
PanEnergy Corp. 53,300 2,398,500
Questar Corp. 22,000 808,500
Sonat, Inc. 82,000 4,223,000
Tejas Gas Corp. (b) 21,000 1,000,125
Williams Companies, Inc. 107,250 4,021,875
-----------
22,794,213
-----------
Office & Business Equipment--1.2%
Hewlett Packard Co. 87,300 $ 4,386,825
-----------
Oil--0.5%
Triton Energy Ltd. (b) 39,200 1,901,200
-----------
Oil Service & Equipment--6.8%
BJ Services Co. (b) 91,600 4,671,600
Baker Hughes, Inc. 150,500 5,192,250
Halliburton Co. 99,600 6,000,900
Noble Drilling Corp. (b) 241,500 4,799,813
Varco International, Inc. (b) 121,000 2,798,125
Weatherford Enterra, Inc. (b) 60,500 1,815,000
-----------
25,277,688
-----------
Retail--3.6%
Home Depot, Inc. 108,000 5,413,500
TJX Companies, Inc. 90,300 4,277,962
Tiffany & Co. 106,000 3,882,250
-----------
13,573,712
-----------
Telecommunications Equipment--6.5%
Andrew Corp. (b) 30,700 1,629,019
Ascend Communications, Inc. (b) 54,900 3,410,663
Cisco Systems, Inc. (b) 180,400 11,477,950
Lucent Technologies, Inc. 113,200 5,235,500
Tellabs, Inc. (b) 66,500 2,502,062
-----------
24,255,194
-----------
Textile & Apparel--3.3%
Liz Claiborne, Inc. 86,300 3,333,337
Nautica Enterprises, Inc. (b) 68,000 1,717,000
Nike, Inc. Class B 69,900 4,176,525
Tommy Hilfiger Corp. (b) 63,300 3,038,400
-----------
12,265,262
-----------
TOTAL COMMON STOCKS
(Identified cost $247,433,533) 263,670,969
-----------
FOREIGN COMMON STOCKS--2.0%
Chemical--1.1%
Potash Corp. of Saskatchewan, Inc.
(Canada) 50,000 4,250,000
-----------
Textile & Apparel--0.9%
Gucci Group NV-NY (Italy) 51,600 3,295,950
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $7,536,032) 7,545,950
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ ---------
MUNICIPAL BONDS--2.6%
California--1.3%
Kern County Pension Obligation
Taxable 7.26%, '14 AAA $ 1,500 1,478,490
Long Beach Pension Obligation
Taxable 6.87%, '06 AAA 840 841,907
San Bernardino County Obligation
Revenue Taxable 6.87%, '08 AAA 410 407,007
San Bernardino County Obligation
Revenue Taxable 6.94%, '09 AAA 1,110 1,106,215
Ventura County Pension Taxable
6.54%, '05 AAA 975 960,267
------------
4,793,886
------------
See Notes to Financial Statements
2-19
<PAGE>
TOTAL RETURN SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- --------------
Florida--1.3%
Dade County Ed. Facs. Authority
5.75%, '20 AAA $ 285 $ 288,500
Miami Beach Special Obligation
Taxable 8.60%, '21 AAA 3,210 3,513,249
University Miami Exchange Revenue A
Taxable 7.65%, '20 AAA 1,080 1,090,076
----------
4,891,825
----------
TOTAL MUNICIPAL BONDS
(Identified cost $9,731,150) 9,685,711
----------
NON-CONVERTIBLE BONDS--5.7%
Asset-Backed Securities--0.7%
Airplanes Pass Through Trust 1D
10.875%, '19 BB 560 617,719
Fleetwood Credit Corp. 96-B, A
6.90%, '12 AAA 948 957,182
Green Tree Financial Corp. 96-2, M1
7.60%, '27 AA- 1,075 1,079,367
----------
2,654,268
----------
Non-Agency Mortgage-Backed Securities--4.9%
CS First Boston Mortgage 95-AE1, B
7.182%, '27 AA- 1,350 1,344,305
GE Capital Mortgage Service 96-8, M
7.25%, '26 AA 249 242,177
Lehman Commercial Conduit 95-C2, B
7.184%, '05 AA 1,650 1,657,734
Merrill Lynch Mortgage, Inc. 95-C2,
B 7.61%, '21 Aa(c) 893 904,589
Merrill Lynch Mortgage, Inc. 96-C1,
B 7.42%, '28 AA 660 667,116
Nationslink Funding Corp. 96-1, B
7.69%, '05 AA 450 466,875
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 AAA 958 972,129
Residential Funding Mortgage 96-S1,
A11 7.10%, '26 AAA 1,500 1,459,453
Residential Funding Mortgage 96-S4,
M1 7.25%, '26 AA 993 964,401
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa(c) 1,600 1,636,500
Resolution Trust Corp. 95-C2, B
6.80%, '27 Aa(c) 887 877,338
Resolution Trust Corp. 95-C1, B
6.90%, '27 Aa(c) 1,900 1,882,781
Resolution Trust Corp. 95-2, M1
7.15%, '29 Aa(c) 1,413 1,416,052
Securitized Asset Sales, Inc. 93-J,
2B 6.808%, '23 A(c) 978 911,978
Structured Asset Securities Corp.
95-C1, C 7.375%, '24 A 930 929,855
Structured Asset Securities Corp.
95-C4, B 7%, '26 AA 1,650 1,627,313
Structured Asset Securities Corp.
96-CFL, C 6.525%, '28 A 520 508,300
----------
18,468,896
----------
Paper & Forest Products--0.1%
Buckeye Cellulose Corp. 9.25%, '08 BB- 350 364,875
----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $21,435,236) 21,488,039
----------
FOREIGN GOVERNMENT SECURITIES--2.4%
Argentina--0.4%
Republic of Argentina Discount L-GL
Euro 6.375%, '23 (e) BB- $ 1,800 $ 1,389,375
----------
Brazil--0.3%
Republic of Brazil Discount ZL Euro
6.50%, '24 (e) B+ 800 617,500
Republic of Brazil Par Z-L Euro
4.25%, '24 (e) B(c) 1,000 630,000
----------
1,247,500
----------
Colombia--0.9%
Republic of Colombia Yankee 7.25%,
'04 BBB- 3,500 3,412,500
----------
Mexico--0.4%
United Mexican States 144A 7.563%,
'01 (d) (e) Baa(c) 350 350,822
United Mexican States Euro D 6.352%,
'19 (e) (f) BB 1,300 1,121,250
----------
1,472,072
----------
Panama--0.4%
Panama IRB 144A 3.50%,
'14 (d) (e) NR 700 486,938
Panama PDI 144A, PIK interest
capitalization, 6.75%, '16 (d) (e) NR 1,150 911,355
----------
1,398,293
----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $7,885,326) 8,919,740
----------
FOREIGN NON-CONVERTIBLE BONDS--1.0%
Chile--0.1%
Petropower Funding 144A 7.36%,
'14 (d) BBB 500 477,150
----------
Colombia--0.9%
Financiera Energ. Nacional EMTN Euro
9%, '99 BBB- 3,200 3,356,000
----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $3,776,800) 3,833,150
----------
TOTAL LONG-TERM INVESTMENTS--88.5%
(Identified cost $313,919,069) 331,356,378
----------
SHORT-TERM OBLIGATIONS--11.4%
Commercial Paper--10.0%
Abbott Laboratories 5.42%, 1-7-97 A-1+ 3,770 3,766,595
Cargill, Inc. 5.43%, 1-10-97 A-1+ 1,015 1,013,622
Bellsouth Capital Funding Corp.
5.40%, 1-14-97 A-1+ 2,375 2,370,369
Receivables Capital Corp. 5.45%,
1-17-97 A-1+ 724 722,246
Private Export Funding Corp. 5.30%,
1-28-97 A-1+ 2,855 2,842,839
General Electric Capital Corp.
5.50%, 1-30-97 A-1+ 3,500 3,500,000
Southwestern Bell Telephone Co.
5.30%, 1-31-97 A-1+ 4,000 3,980,505
Kellogg Co. 5.35%, 2-5-97 A-1+ 2,000 1,989,597
Preferred Receivables Funding Corp.
5.35%, 2-13-97 A-1 5,000 4,966,098
General Re Corp. 5.30%, 2-14-97 A-1+ 2,500 2,482,479
See Notes to Financial Statements
2-20
<PAGE>
TOTAL RETURN SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- --------------
Commercial Paper--continued
First Deposit Funding Trust 5.33%,
3-14-97 A-1 $ 3,617 $ 3,575,405
Asset Securitization Cooperative
Corp. 5.36%, 3-18-97 A-1+ 4,435 4,381,292
Receivables Capital Corp. 5.39%,
5-1-97 A-1+ 2,000 1,963,560
----------
37,554,607
----------
PAR
VALUE
(000) VALUE
--------- ---------------
Federal Agency Securities--1.4%
Federal National Mortgage Assoc. 5.24%,
2-27-97 $ 5,065 $ 5,020,212
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $42,590,757) 42,574,819
------------
TOTAL INVESTMENTS--99.9%
(Identified cost $356,509,826) 373,931,197(a)
Cash and receivables, less liabilities--0.1% 312,478
------------
NET ASSETS--100.0% $374,243,675
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $24,226,359 and gross
depreciation of $6,804,988 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$356,509,826.
(b) Non-income producing.
(c) As rated by Moodys, Fitch or Duff & Phelps.
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration normally to qualified institutional buyers. At December 31,
1996, these securities amounted to a value of $2,226,265 or 0.6% of net
assets.
(e) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(f) Rights incorporated as a unit.
See Notes to Financial Statements
2-21
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $356,509,826) $373,931,197
Receivable for investment securities sold 926
Receivable for fund shares sold 112,271
Interest and dividends receivable 1,117,628
------------
Total assets 375,162,022
------------
Liabilities
Custodian 623,987
Investment advisory fee 185,569
Financial agent fee 19,089
Trustees' fee 8,466
Accrued expenses 81,236
------------
Total liabilities 918,347
------------
Net Assets $374,243,675
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $351,775,454
Undistributed net investment income 414,865
Accumulated net realized gain 4,631,985
Net unrealized appreciation 17,421,371
------------
Net Assets $374,243,675
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 27,417,598
============
Net asset value and offering price per share $13.65
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $ 8,131,784
Dividends 2,771,915
------------
Total investment income 10,903,699
------------
Expenses
Investment advisory fee 2,146,571
Financial agent fee 220,535
Printing 89,724
Custodian 62,021
Professional 28,906
Trustees 18,612
Miscellaneous 22,054
------------
Total expenses 2,588,423
------------
Net investment income 8,315,276
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 25,862,109
Net realized loss on foreign currency transactions (10,202)
Net change in unrealized appreciation (depreciation) on investments (2,475,007)
------------
Net gain on investments 23,376,900
------------
Net increase in net assets resulting from operations $31,692,176
============
</TABLE>
See Notes to Financial Statements
2-22
<PAGE>
TOTAL RETURN SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income $ 8,315,276 $ 10,538,823
Net realized gain 25,851,907 23,632,796
Net change in unrealized appreciation (depreciation) (2,475,007) 19,082,703
------------ ------------
Net increase in net assets resulting from operations 31,692,176 53,254,322
------------ ------------
From Distributions to Shareholders
Net investment income (7,996,685) (10,497,130)
Net realized gains (23,234,158) (21,419,046)
------------ ------------
Decrease in net assets from distributions to shareholders (31,230,843) (31,916,176)
------------ ------------
From Share Transactions
Proceeds from sales of shares (4,387,120 and 5,465,213 shares,
respectively) 61,269,234 75,182,133
Net asset value of shares issued from reinvestment of distributions
(2,254,196 and 2,341,879 shares, respectively) 31,230,843 31,916,176
Cost of shares repurchased (5,175,253 and 4,646,668 shares,
respectively) (72,555,884) (63,681,697)
------------ ------------
Increase in net assets from share transactions 19,944,193 43,416,612
------------ ------------
Net increase in net assets 20,405,526 64,754,758
Net Assets
Beginning of period 353,838,149 289,083,391
------------ ------------
End of period (including undistributed net investment income of $414,865
and $154,166, respectively) $374,243,675 $353,838,149
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.63 $12.68 $13.71 $12.86 $12.97
Income from investment operations
Net investment income 0.32 0.45 0.36(1)(3) 0.23(3) 0.37(3)
Net realized and unrealized gain
(loss) 0.91 1.84 (0.56) 1.17 0.99
-------- -------- -------- -------- --------
Total from investment operations 1.23 2.29 (0.20) 1.40 1.36
-------- -------- -------- -------- --------
Less distributions
Dividends from net investment
income (0.31) (0.45) (0.37) (0.23) (0.37)
Dividends from net realized gains (0.90) (0.89) (0.46) (0.32) (1.10)
-------- -------- -------- -------- --------
Total distributions (1.21) (1.34) (0.83) (0.55) (1.47)
-------- -------- -------- -------- --------
Change in net asset value 0.02 0.95 (1.03) 0.85 (0.11)
-------- -------- -------- -------- --------
Net asset value, end of period $13.65 $13.63 $12.68 $13.71 $12.86
======== ======== ======== ======== ========
Total return 9.05% 18.22% -1.45% 11.02% 10.67%
Ratios/supplemental data:
Net assets, end of period
(thousands) $374,244 $353,838 $289,083 $256,011 $163,628
Ratio to average net assets of:
Operating expenses 0.70% 0.67%(2) 0.74% 0.74% 0.50%
Net investment income 2.26% 3.28% 2.71% 1.82% 2.90%
Portfolio turnover rate 287% 170% 220% 269% 326%
Average commission rate paid(4) $0.0530 N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.001 per share.
(2) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included,
the ratio would not significantly differ.
(3) Computed using average shares outstanding.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-23
<PAGE>
INTERNATIONAL SERIES
Most foreign equity markets have produced excellent returns over the last
twelve months, despite a rising U.S. dollar. In addition to the continued
strong performance in the U.S., Europe also stood out. Almost all European
markets benefited from corporate restructuring, falling interest rates and
the likelihood of more shareholder-friendly policies. Additionally, countries
such as Germany, Sweden, Finland and the United Kingdom have been further
bolstered by share buybacks as well as merger and acquisition activity.
Despite a strong start, Japan's performance over this reporting period has
been a major disappointment. Poor corporate earnings growth and a weak
domestic economy led to a serious deterioration in investor sentiment. In
contrast to Japan, other Far East countries such as Taiwan, Malaysia,
Indonesia and Hong Kong posted stellar gains during this twelve-month period.
Lastly, most Latin American markets moved higher over this reporting period,
earning double digit returns. An improved economic outlook, lower interest
rates and strong capital inflows served as catalysts for this solid
performance. As measured in U.S. dollars, Venezuela, Brazil and Argentina
were among the best performing countries in this region, while Chile and Peru
were among the laggards.
Phoenix Edge International Series posted very strong results over this
reporting cycle. For the twelve months ended December 31, 1996, the Fund
provided a total return of 18.65%. These results compared very favorably to
the Morgan Stanley International EAFE Index, which gained 6.36% over the same
period. All of these figures assume reinvestment of any distributions, but
exclude the effect of sales charges.
During the year, Fund performance benefited from the portfolio's modest
overweighting in Europe and its underweighted position in Japan. Strong stock
selection in Europe and our continued focus on such themes as Corporate
Restructuring and Growth in Services also boosted results. Other positive
contributors included our recent overweighting of certain Asian countries,
particularly Hong Kong and Taiwan, as well as the Fund's use of currency
hedges.
After a dismal first half in 1996, European economic growth is beginning to
improve. We expect 1997 GDP to grow at about 2.5%, but it is unlikely that
demand will be strong enough to exert much upward pressure on interest rates
until late in the year. Except for the United Kingdom and a few smaller
European countries, unemployment is showing no signs of declining. Moreover,
the pressure on governments to cut spending will continue to be a drag on
growth going forward. This, coupled with both public and private sector
restructuring, means it will be even more important to focus on those
companies that are making the difficult choices that will deliver value to
their shareholders.
In Japan, the outlook for 1997 is also modest. It appears that most globally
active companies in this country have already done as much restructuring as
possible without a radical philosophical change towards "U.S. style
restructuring." This would entail layoffs and unfriendly takeovers, supported
by government deregulation and tax-reform, and it is doubtful that this type
of change will occur in the near term. On the positive side, the potential
for improved economic growth in the rest of the world could tighten overall
capacity and allow even the weakest Japanese companies to improve their
profit margins. We will continue to monitor Japan's economy for signs of
improvement, but currently see better prospects elsewhere.
In Asia, we remain very positive on Hong Kong's near-term outlook. As a
country, we believe that Hong Kong will remain self-confident immediately
prior to and after the handover to China on June 30, 1997. We also expect
Taiwan and Malaysia to continue to do well. However, our outlook for
Singapore is rather negative due to slowing economic growth and a lack of
choice in this market. We are also concerned about the prospects for India
and Thailand, given their weak governments and the severe structural changes
needed to turn around both economies.
In Latin America, Mexico and Argentina are seeing economic re-acceleration
after the severe recession of 1995 and early 1996. While this is clearly good
news, flawed economic reform processes still remain and are now causing
problems in Brazil. The Fund intends to have exposure to this region, but
potential currency depreciation may limit prospective gains. Since other
emerging countries may provide better opportunities, we will look for new
markets which can provide above-average economic and earnings growth.
Overall, we expect foreign markets to continue to perform well in 1997 due
to low interest rates, improved economic growth and corporate restructuring
efforts. If world economic growth begins to accelerate dramatically, we will
increase the Fund's exposure to economically sensitive stocks. At present,
however, we continue to focus on themes that should provide secular growth
and hence, strong performance. Moving forward, we believe the Fund is well
positioned for the coming new year.
2-24
<PAGE>
INTERNATIONAL SERIES
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
International MSCI EAFE MSCI EAFE
Series Index* Excluding JAPAN
5/1/90 $10,000 $10000 $10,000
12/31/90 9,190 9,640 10,014
12/31/91 11,008 10,884 11,608
12/31/92 9,589 9,559 11,270
12/31/93 13,275 12,708 15,498
12/31/94 13,279 13,732 15,379
12/31/95 14,552 15,318 18,541
12/31/96 17,266 16,293 22,514
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
From
Inception
5/1/90 to
1 Year 5 Years 12/31/96
- ----------------------------------------------------------------------
International Series 18.65% 9.44% 8.53%
- ----------------------------------------------------------------------
MSCI EAFE Index* 6.36% 8.48% 7.59%
- ----------------------------------------------------------------------
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 net
dividends reinvested. The EAFE index is an aggregate of 19 individual
country indexes in Europe, Australia, New Zealand and the Far East.
SCHEDULE OF INVESTMENTS
December 31, 1996
SHARES VALUE
------------ --------------
COMMON STOCKS--88.5%
Belgium--1.4%
Credit Communal Holding/Dexia (Banks) (b) 26,000 $ 2,369,626
----------
Brazil--1.8%
Telebras Sponsored ADR (Utility--Telephone) 40,000 3,060,000
----------
France--8.0%
AXA SA (Insurance) 33,369 2,118,178
BIC SA (Miscellaneous) 13,000 1,945,486
Cardif SA (Insurance) 15,000 2,063,016
Carrefour Supermarche (Retail--Food) 3,520 2,285,864
Louis Dreyfus Citrus (Food) (b) 42,500 1,389,771
Rexel SA (Wholesale & Distribution) 4,350 1,317,878
Salomon SA (Entertainment, Leisure & Gaming) 20,000 1,711,966
Sommer-Allibert (Auto & Truck Parts) 33,600 1,001,789
----------
13,833,948
----------
Germany--5.0%
Adidas AG (Textile & Apparel) 27,300 $ 2,356,044
BASF AG (Chemical) 63,000 2,423,360
SGL Carbon AG (Chemical) 17,400 2,190,384
VEBA AG (Utility--Electric) 28,400 1,640,127
----------
8,609,915
----------
Hong Kong--13.8%
Cheung Kong Holdings Ltd. (Real Estate) 514,200 4,570,356
Dao Heng Bank Group Ltd. (Banks) 188,000 901,731
Great Eagle Holdings Ltd. (Real Estate) 228,000 940,310
Guoco Group Ltd. (Diversified Financial
Services) 281,000 1,573,039
Henderson China Holding Ltd. (Real Estate) 828 1,884
Henderson Land Development Co. Ltd. (Real
Estate) 586,000 5,909,320
Hutchison Whampoa Ltd. (Conglomerates) 564,000 4,429,663
Hysan Development Co. Ltd. (Real Estate) 454,000 1,807,806
New World Development Co. Ltd. (Real Estate) 192,000 1,296,979
Sun Hung Kai Properties Ltd. (Real Estate) 195,000 2,388,686
----------
23,819,774
----------
See Notes to Financial Statements
2-25
<PAGE>
INTERNATIONAL SERIES
SHARES VALUE
------------ --------------
Indonesia--1.6%
PT Semen Gresik (Building & Materials) 690,000 $ 2,219,682
Wicaksana Overseas International (Wholesale &
Distribution) 462,000 528,000
-----------
2,747,682
-----------
Italy--4.8%
Fila Holding SPA ADR (Textile & Apparel) 51,600 2,999,250
Gucci Group NV (Textile & Apparel) 20,600 1,381,511
Gucci Group NV-NY (Textile & Apparel) 32,500 2,075,938
Stet-Societa Finanziaria Telefonica SPA
(Utility--Telephone) 400,000 1,815,192
-----------
8,271,891
-----------
Japan--10.3%
Canon, Inc. (Office & Business Equipment) 87,000 1,918,842
Circle K Japan Co. Ltd. (Retail--Food) 37,000 1,593,866
Hitachi Maxell (Electronics) 42,000 926,338
Honda Motor Co. Ltd. (Autos & Trucks) 81,000 2,309,899
Keyence Corp. Ltd. (Electronics) 13,000 1,601,620
Nintendo Corp. Ltd. (Entertainment, Leisure &
Gaming) 27,000 1,928,405
Nippon Television Network ( Publishing,
Broadcasting, Printing & Cable) 5,000 1,507,711
TDK Corp. (Electronics) 27,000 1,756,268
Takeda Chemical Industries (Health Care--
Drugs) 91,000 1,905,143
Toyota Motor Corp. (Autos & Trucks) 63,000 1,807,444
Xebio Co. Ltd. (Retail) 21,000 624,192
-----------
17,879,728
-----------
Malaysia--3.1%
Commerce Asset Holding Berhad (Banks) 240,000 1,805,583
Renong Berhad (Engineering & Construction) 1,000,000 1,773,906
United Engineers Ltd. (Building & Materials) 201,000 1,814,611
-----------
5,394,100
-----------
Mexico--2.9%
Apasco SA de CV (Building & Materials) 230,000 1,577,744
Grupo Carso SA de CV Series A1 (Conglomerates) 350,000 1,845,147
Grupo Industrial Maseca SA de CV Class B
(Food) 1,310,000 1,660,798
-----------
5,083,689
-----------
Netherlands--5.1%
Ahrend Groep NV (Office & Business Equipment) 33,348 1,856,630
Akzo Nobel (Chemical) 12,000 1,637,278
IHC Caland (Oil Service & Equipment) 36,750 2,097,026
Samas Groep-CVA (Office & Business Equipment) 20,742 887,384
VNU-Verenigd Bezit (Publishing, Broadcasting,
Printing & Cable) 113,000 2,358,386
-----------
8,836,704
-----------
Norway--1.0%
Storebrand ASA (Insurance) (b) 287,000 1,663,039
-----------
Peru--0.8%
Telefonica Del Peru SA (Utility--Telephone) 708,945 1,326,713
-----------
Portugal--3.1%
Cimpor-Cimentos de Portugal SA (Building &
Materials) 81,000 1,741,565
Portugal Telecom SA (Utility--Telephone) 68,700 1,955,903
Telecel-Comunicacoes Pessoais (Utility--
Telephone) 26,700 1,702,609
-----------
5,400,077
-----------
Spain--1.8%
Empresa Nacional de Electricidad SA
(Utility--Electric) 21,000 $ 1,491,755
Telefonica de Espana (Utility--Telephone) 67,700 1,569,214
-----------
3,060,969
-----------
Sweden--2.3%
Frontec AB Series B (Computer Software &
Services) (b) 128,000 2,212,068
Nordbanken AB (Banks) 59,000 1,784,344
-----------
3,996,412
-----------
Switzerland--4.5%
Ares-Serono Group B (Health Care--Drugs) 1,730 1,645,349
CS Holding AG Registered Shares (Banks) 18,200 1,863,782
Novartis AG Registered Shares (Health
Care--Drugs) 2,310 2,637,395
Swiss Reinsurance--Registered (Insurance) 1,500 1,596,410
-----------
7,742,936
-----------
Taiwan--0.0%
China Bills Finance Corp. (Commercial Finance)
(b) 70,345 64,717
-----------
United Kingdom--16.3%
Astec (BSR) PLC (Electronics) 466,000 1,256,118
Barclays PLC (Diversified Financial Services) 103,000 1,763,674
British Aerospace PLC (Aerospace & Defense) 155,500 3,406,469
Carlton Communications PLC (Publishing,
Broadcasting, Printing & Cable) 208,000 1,831,525
Compass Group PLC (Lodging & Restaurants) 304,000 3,212,733
Granada Group PLC (Entertainment, Leisure &
Gaming) 143,000 2,108,412
Lloyds TSB Group PLC (Diversified Financial
Services) 255,000 1,878,787
Next PLC (Retail) 154,000 1,495,721
Rolls-Royce PLC (Aerospace & Defense) 410,000 1,806,863
Shell Transport & Trading Co. PLC (Oil) 153,000 2,648,631
Siebe PLC (Electrical Equipment) 156,000 2,888,790
WPP Group PLC (Advertising) 876,000 3,808,044
-----------
28,105,767
-----------
United States--0.9%
Latin American Discovery Fund, Inc.
(Multi-Industry) 121,000 1,512,500
-----------
TOTAL COMMON STOCKS
(Identified cost $129,202,891) 152,780,187
-----------
PREFERRED STOCKS--1.2%
Germany--0.7%
Porsche AG (Autos & Trucks) 1,300 1,147,231
-----------
United Kingdom--0.5%
Egypt Investment Co. (Multi-Industry) (b) 74,000 925,000
-----------
TOTAL PREFERRED STOCKS
(Identified cost $1,656,158) 2,072,231
-----------
TOTAL LONG-TERM INVESTMENTS--89.7%
(Identified cost $130,859,049) 154,852,418
-----------
See Notes to Financial Statements
2-26
<PAGE>
INTERNATIONAL SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ---------------
SHORT-TERM OBLIGATIONS--8.4%
Commercial Paper--8.4%
Corporate Asset Funding Co. 6%, 1-6-97 A-1+ $ 1,900 $ 1,898,417
Kimberly-Clark Corp. 5.35%, 1-13-97 A-1+ 2,315 2,310,872
Greenwich Funding Corp. 5.49%, 1-14-97 A-1+ 1,695 1,691,640
General Electric Capital Corp. 5.40%,
1-16-97 A-1+ 1,000 997,750
Cargill, Inc. 5.45%, 1-17-97 A-1+ 930 927,747
Ciesco L.P. 5.65%, 1-22-97 A-1+ 4,160 4,146,289
GTE North, Inc. 5.48%, 1-22-97 (c) A-1+ 2,550 2,541,848
-------------
14,514,563
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $14,514,563) 14,514,563
-------------
TOTAL INVESTMENTS--98.1%
(Identified cost $145,373,612) 169,366,981(a)
Cash and receivables, less liabilities--1.9% 3,300,674
-------------
NET ASSETS--100.0% $172,667,655
=============
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of
Total Long-Term Investments
(Unaudited)
Advertising 2.5%
Aerospace & Defense 3.4
Auto & Truck Parts 0.6
Autos & Trucks 3.4
Banks 5.6
Building & Materials 4.7
Chemical 4.0
Commercial Finance 0.0
Computer Software & Services 1.4
Conglomerates 4.1
Diversified Financial Services 3.4
Electrical Equipment 1.9
Electronics 3.6
Engineering & Construction 1.1
Entertainment, Leisure & Gaming 3.7
Food 2.0
Health Care--Drugs 4.0
Insurance 4.8
Lodging & Restaurants 2.1
Miscellaneous 1.3
Multi-Industry 1.6
Office & Business Equipment 3.0
Oil 1.7
Oil Service & Equipment 1.4
Publishing, Broadcasting, Printing & Cable 3.7
Real Estate 10.9
Retail 1.3
Retail--Food 2.5
Textile & Apparel 5.7
Utility--Electric 2.0
Utility--Telephone 7.4
Wholesale & Distribution 1.2
-----
100.0%
=====
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $25,748,811 and gross
depreciation of $1,913,191 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$145,531,361.
(b) Non-income producing.
(c) Segregated as collateral for forward currency contracts. At December 31,
1996, these securities amounted to $2,541,848 or 1.5% of net assets.
See Notes to Financial Statements
2-27
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $145,373,612) $169,366,981
Foreign currency at value (Identified cost $2,182,271) 2,184,603
Cash 25,516
Interest and dividends receivable 218,008
Tax reclaim receivable 47,888
Net unrealized appreciation on forward currency contracts 1,072,470
------------
Total assets 172,915,466
------------
Liabilities
Payable for fund shares repurchased 4,025
Investment advisory fee 106,199
Trustees' fee 8,723
Financial agent fee 8,046
Accrued expenses 120,818
------------
Total liabilities 247,811
------------
Net Assets $172,667,655
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $141,596,053
Undistributed net investment income 1,390,579
Accumulated net realized gain 4,614,897
Net unrealized appreciation 25,066,126
------------
Net Assets $172,667,655
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 11,894,980
============
Net asset value and offering price per share $14.52
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Dividends $ 2,402,413
Interest 690,679
Foreign taxes withheld (237,840)
------------
Total investment income 2,855,252
------------
Expenses
Investment advisory fee 1,167,034
Financial agent fee 93,363
Custodian 201,283
Printing 78,728
Professional 30,861
Trustees 18,764
Miscellaneous 26,314
------------
Total expenses 1,616,347
------------
Net investment income 1,238,905
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 9,973,733
Net realized gain on foreign currency transactions 2,075,251
Net change in unrealized appreciation (depreciation) on investments 12,109,055
Net change in unrealized appreciation (depreciation) on foreign currency and foreign
currency transactions 962,538
------------
Net gain on investments 25,120,577
------------
Net increase in net assets resulting from operations $26,359,482
============
</TABLE>
See Notes to Financial Statements
2-28
<PAGE>
INTERNATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income $ 1,238,905 $ 1,247,800
Net realized gain 12,048,984 1,951,578
Net change in unrealized appreciation (depreciation) 13,071,593 8,552,168
------------ ------------
Net increase in net assets resulting from operations 26,359,482 11,751,546
------------ ------------
From Distributions to Shareholders
Net investment income (2,156,537) (455,953)
In excess of net investment income (272,380) --
Net realized gains (3,811,548) (2,629,683)
------------ ------------
Decrease in net assets from distributions to shareholders (6,240,465) (3,085,636)
------------ ------------
From Share Transactions
Proceeds from sales of shares (3,516,722 and 3,785,668, respectively) 48,544,295 45,431,812
Net asset value of shares issued from reinvestment of distributions
(435,075 and 238,826 shares, respectively) 6,240,465 3,085,636
Cost of shares repurchased (2,645,302 and 4,795,590 shares,
respectively) (36,690,696) (57,355,995)
------------ ------------
Increase (decrease) in net assets from share transactions 18,094,064 (8,838,547)
------------ ------------
Net increase (decrease) in net assets 38,213,081 (172,637)
Net Assets
Beginning of period 134,454,574 134,627,211
------------ ------------
End of period (including undistributed net investment income of
$1,390,579 and $917,632, respectively) $172,667,655 $134,454,574
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding through the indicated period)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994 1993 1992
-------------- -------------- ---------------------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $12.70 $11.85 $12.21 $8.82 $10.17
Income from investment
operations
Net investment income 0.11(3) 0.12(3) 0.08(3) 0.07(1)(3) 0.09(3)
Net realized and unrealized
gain (loss) 2.25 1.02 (0.07) 3.32 (1.40)
-------- -------- -------- ------- -------
Total from investment
operations 2.36 1.14 0.01 3.39 (1.31)
-------- -------- -------- ------- -------
Less distributions
Dividends from net investment
income (0.19) (0.04) (0.03) -- (0.04)
In excess of net investment
income (0.02) -- -- -- --
Dividends from net realized
gains (0.33) (0.25) (0.34) -- --
-------- -------- -------- ------- -------
Total distributions (0.54) (0.29) (0.37) -- (0.04)
-------- -------- -------- ------- -------
Change in net asset value 1.82 0.85 (0.36) 3.39 (1.35)
-------- -------- -------- ------- -------
Net asset value, end of period $14.52 $12.70 $11.85 $12.21 $ 8.82
======== ======== ======== ======= =======
Total return 18.65% 9.59% 0.03% 38.44% -12.89%
Ratio/supplemental data:
Net assets, end of period
(thousands) $172,668 $134,455 $134,627 $61,242 $13,772
Ratio to average of net assets
of:
Operating expenses 1.04% 1.07% 1.10% 1.15% 1.50%
Net investment income 0.80% 0.95% 0.64% 0.49% 1.13%
Portfolio turnover rate 142% 249% 172% 193% 74%
Average commission rate paid(2) $0.0213 N/A N/A N/A N/A
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of
$0.05.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
(3) Computed using average shares outstanding.
See Notes to Financial Statements
2-29
<PAGE>
BALANCED SERIES
Despite increasing interest rates and waning corporate earnings momentum,
U.S. stock prices forged higher over this reporting period, fueled by
unprecedented cash inflows into equity mutual funds and continued corporate
share buybacks. Although this remarkable rally dates back to December 1994,
the past year has been one of tremendous rotation among various sectors of
the stock market--a manifestation of increasing investor uncertainty over the
direction of interest rates and the economy. As measured by the Standard &
Poor's 500 Stock Index, the U.S. equity market returned an impressive 23.25%
during 1996.
While it may have been another record year for U.S. equities, the overall
bond market produced less than stellar results. For the twelve months ended
December 31, 1996, the Lehman Brothers Aggregate Bond Index, an unmanaged
gauge of bond market performance, returned a mere 3.63%. Shifting market
opinion over the direction of the U.S. economy contributed to much of the
volatility in interest rates during this reporting period. As measured by the
benchmark 30-year Treasury bond, interest rates started the year at 5.95%,
climbed as high as 7.19% in July, and finished 1996 yielding 6.64%. Generally
speaking, investors were well rewarded for moving down the credit-risk
spectrum last year, as lower-quality bonds generally outperformed
higher-quality issues.
Aided by the long bull market in U.S. stocks, Phoenix Edge Balanced Series
posted double-digit gains during this latest fiscal year. For the twelve
months ended December 31, 1996, the Fund provided a total return of 10.56%.
Despite these respectable results, the Fund trailed its composite benchmark,
which returned 14.33% over the same period.* All of these figures assume
reinvestment of any distributions, but exclude the effect of sales charges.
Fund results over this latest reporting cycle were held back primarily
because of weakness in some of our technology, consumer cyclical and health
care holdings. Positive contributors to performance included excellent stock
selection within the energy, consumer staples and basic materials sectors as
well as a modest overweighting within the strongly performing capital goods
group. Additionally, the portfolio's fixed-income segment continued to
outperform its benchmark, the Lehman Brothers Aggregate Bond Index,
throughout this reporting period. Our exposure to such non-traditional
sectors of the bond market such as taxable municipals, commercial and
non-agency residential mortgage-backed securities, and emerging markets debt
paid off handsomely during the year.
As we head into 1997, our near-term outlook calls for continued moderate
economic growth, mild inflation and decelerating earnings growth. Given this
investment environment, our equity strategy currently emphasizes quality,
large-cap growth stocks and focuses on such compelling investment themes as
21st Century Medicine (health care), Hybrid Network (technology) and
Deregulating Financial Services (financial services). In terms of our
fixed-income allocation, we continue to follow our sector rotation approach,
with a strong emphasis on U.S. Treasuries and mortgage-backed securities. As
of December 31, 1996, the Fund's asset allocation mix was 57% equity, 38%
fixed income and 5% cash equivalents.
*The Balanced Benchmark is calculated by Frank Russell Company based on the
performance of the following indexes: 55% S&P 500, 35% Lehman Brothers
Aggregate Bond Index and 10% 90-day Treasury Bills.
2-30
<PAGE>
BALANCED SERIES
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
Balanced Balanced
Benchmark* Series
5/1/92 $10,000 $10,000
12/31/92 10,712 10,972
12/31/93 11,702 11,912
12/31/94 11,725 11,579
12/31/95 14,917 14,274
12/31/96 17,056 15,782
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
From
Inception
5/1/92 to
1 Year 12/31/96
- ----------------------------------------------------------
Balanced Series 10.56% 10.26%
- ----------------------------------------------------------
Balanced Benchmark* 14.33% 12.11%
- ----------------------------------------------------------
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%
90-day Treasury Bills and is produced by Frank Russell Company.
SCHEDULE OF INVESTMENTS
December 31, 1996
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------
U.S. GOVERNMENT AND AGENCY SECURITIES--24.3%
U.S. Treasury Bonds--2.0%
U.S. Treasury Bonds 6%, '26 AAA $ 4,595 $ 4,180,012
------------
U.S. Treasury Notes--19.5%
U.S. Treasury Notes 6.375%, '99 AAA 3,775 3,808,031
U.S. Treasury Notes 6.875%, '00 AAA 3,500 3,578,365
U.S. Treasury Notes 6.625%, '01 AAA 4,400 4,470,123
U.S. Treasury Notes 6.50%, '05 AAA 3,300 3,319,206
U.S. Treasury Notes 6.50%, '06 AAA 22,235 22,360,072
U.S. Treasury Notes 6.875%, '06 AAA 2,150 2,216,515
------------
39,752,312
------------
Agency Mortgage-Backed Securities--2.8%
GNMA 6.50%, '23-'26 AAA 5,962 5,718,193
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $50,088,128) 49,650,517
------------
NON-CONVERTIBLE BONDS--6.9%
Asset-Backed Securities--1.1%
Airplanes Pass Through Trust 1D
10.875%, '19 BB 150 165,460
Fleetwood Credit Corp. 96-B, A
6.90%, '12 AAA 758 765,746
Green Tree Financial Corp. 96-2, M1
7.60%, '27 AA- 675 677,742
Green Tree Financial Corp. 96-3, B1
7.70%, '27 BBB+ 625 629,883
------------
2,238,831
------------
Non-Agency Mortgage-Backed Securities--5.4%
CS First Boston Mortgage 95-AE1, B
7.182%, '27 AA- $ 425 $ 423,207
DLJ Mortgage Acceptance 96-CF1, A1B
144A 7.58%, '28 (c) AAA 400 413,500
GE Capital Mortgage Service 96-8, M
7.25%, '26 AA 249 242,177
Lehman Commercial Conduit 95-C2, B
7.184%, '05 AA 425 426,992
Merrill Lynch Mortgage, Inc. 95-C2,
B 7.61%, '21 AA(d) 223 226,147
Merrill Lynch Mortgage, Inc. 95-C3,
B 7.149%, '25 AA 400 399,000
Merrill Lynch Mortgage, Inc. 96-C1,
B 7.42%, '28 AA 650 657,008
Nationslink Funding Corp. 96-1, B
7.69%, '05 AA 450 466,875
Residential Asset Securitization
Trust 96-A8, A1 8%, '26 AAA 671 680,490
Residential Funding Mortgage 96-S1,
A11 7.10%, '26 AAA 1,000 972,969
Residential Funding Mortgage 96-S4,
M1 7.25%, '26 AA 993 964,402
Residential Funding Mortgage 96-S8,
A-4 6.75%, '11 AAA 680 665,435
Resolution Trust Corp. 93-C1, B
8.75%, '24 AA(d) 425 434,695
Resolution Trust Corp. 95-2, M1
7.15%, '29 AA(d) 624 624,729
See Notes to Financial Statements
2-31
<PAGE>
BALANCED SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ -------- ---------------
Non-Agency Mortgage-Backed Securities--continued
Resolution Trust Corp. 95-C1, B
6.90%, '27 AA(d) $ 525 $ 520,242
Resolution Trust Corp. 95-C2, B
6.80%, '27 AA(d) 1,135 1,122,992
Structured Asset Securities Corp.
95-C1, C 7.375%, '24 A 930 929,855
Structured Asset Securities Corp.
96-CFL, C 6.525%, '28 A 480 469,200
TLFC 96-1A, 5.98%, '02 AAA 289 288,738
-----------
10,928,653
-----------
Paper & Forest Products--0.3%
Buckeye Cellulose Corp. 8.50%, '05 BB- 700 701,750
-----------
Truckers & Marine--0.1%
Teekay Shipping Corp. 8.32%, '08 BB 230 230,575
-----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $14,089,854) 14,099,809
-----------
FOREIGN NON-CONVERTIBLE BONDS--1.0%
Chile--0.2%
Petropower Funding 144A 7.36%,
'14 (c) BBB 350 334,005
-----------
Colombia--0.2%
Financiera Energ. Nacional EMTN Euro
9%, '99 BBB- 440 461,450
-----------
Indonesia--0.2%
Asia Pulp & Paper Co. Yankee 11.75%,
'05 BB 400 431,000
-----------
Philippines--0.2%
Central Bank of Philippines NMB Euro
6.563%, '05 (e) BB 500 491,875
-----------
Sweden--0.2%
Astra Overseas Financial 144A 8.75%,
'03 (c) NR 350 354,375
-----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $2,002,428) 2,072,705
-----------
FOREIGN GOVERNMENT SECURITIES--3.7%
Argentina--0.6%
Republic of Argentina Bearer FRB
6.625%, '05 (e) BB- 1,078 939,881
Republic of Argentina Par L-GP
5.25%, '23 (e) BB- 500 318,750
-----------
1,258,631
-----------
Brazil--0.4%
Republic of Brazil C Bond, PIK
interest capitalization, 8%, '14
(e) B+ 732 544,197
Republic of Brazil DCB-L Euro
6.563%, '12 (e) B+ 500 379,063
-----------
923,260
-----------
Colombia--0.8%
Republic of Colombia 7.25%, '03 BBB- 500 483,880
Republic of Colombia Euro 9%, '97 BBB- 700 705,544
Republic of Colombia Yankee 7.25%,
'04 BBB- 475 463,125
-----------
1,652,549
-----------
Croatia--0.3%
Croatia Series B 6.688%, '06 (e) NR 600 584,625
-----------
Mexico--0.7%
United Mexican States 144A 7.563%,
'01 (c)(e) Baa(d) $ 400 $ 400,940
United Mexican States Discount A
6.453%, '19 (e)(f) BB 325 280,313
United Mexican States Euro D 6.352%,
'19 (e)(f) BB 250 215,625
United Mexican States Series A Euro
6.25%, '19 (f) BB 300 220,125
United Mexican States Series B Euro
6.25%, '19 (f) BB 350 256,813
-----------
1,373,816
-----------
Panama--0.6%
Republic of Panama PDI 144A,
PIK interest capitalization,
6.75%, '16 (c)(e) NR 1,470 1,164,949
-----------
Poland--0.3%
Poland Discount Euro 6.50%, '24 (e) BBB- 600 583,500
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $6,892,374) 7,541,330
-----------
MUNICIPAL BONDS--2.2%
California--1.0%
Kern County Pension Obligation
Taxable 7.26%, '14 AAA 420 413,977
Long Beach Pension Obligation
Taxable 6.87%, '06 AAA 230 230,522
Orange County Pension Series A
Taxable 7.62%, '08 AAA 650 676,345
San Bernardino County Obligation
Revenue Taxable 6.87%, '08 AAA 110 109,197
San Bernardino County Obligation
Revenue Taxable 6.94%, '09 AAA 300 298,977
Ventura County Pension Taxable
6.54%, '05 AAA 260 256,071
-----------
1,985,089
-----------
Florida--0.8%
Dade County Ed. Facs. Authority
5.75%, '20 AAA 145 146,781
Miami Beach Special Obligation
Taxable 8.60%, '21 AAA 875 957,661
University Miami Exchange Revenue A
Taxable 7.65%, '20 AAA 535 539,992
-----------
1,644,434
-----------
Virginia--0.4%
Newport News Taxable Series B 7.05%,
'25 AA- 1,000 942,860
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $4,609,830) 4,572,383
-----------
SHARES
--------
COMMON STOCKS--55.9%
Aerospace & Defense--1.8%
Boeing Co. 15,100 1,606,262
United Technologies Corp. 31,200 2,059,200
-----------
3,665,462
-----------
Autos & Trucks--0.2%
Chrysler Corp. 11,800 389,400
-----------
See Notes to Financial Statements
2-32
<PAGE>
BALANCED SERIES
SHARES VALUE
-------- ---------------
Banks--2.2%
BankAmerica Corp. 12,400 $ 1,236,900
Chase Manhattan Corp. 11,400 1,017,450
Citicorp 10,000 1,030,000
Mellon Bank Corp. 11,300 802,300
Nationsbank Corp. 4,300 420,325
-------------
4,506,975
-------------
Beverages--1.7%
Coca-Cola Co. 20,900 1,099,862
PepsiCo, Inc. 76,300 2,231,775
Seagram Ltd. 5,100 197,625
-------------
3,529,262
-------------
Chemical--1.7%
Du Pont (E.I.) de Nemours & Co. 15,200 1,434,500
Monsanto Co. 43,000 1,671,625
Philip Environmental, Inc. (b) 30,000 435,000
-------------
3,541,125
-------------
Computer Software & Services--2.7%
Computer Associates International, Inc. 29,400 1,462,650
First Data Corp. 36,000 1,314,000
Microsoft Corp. (b) 13,500 1,115,438
Oracle Corp. (b) 40,000 1,670,000
-------------
5,562,088
-------------
Conglomerates--2.0%
AlliedSignal, Inc. 14,900 998,300
Thermo Electron Corp. (b) 11,000 453,750
Tyco International Ltd. 50,100 2,649,038
-------------
4,101,088
-------------
Cosmetics & Soaps--2.1%
Colgate Palmolive Co. 6,800 627,300
Gillette Co. 18,500 1,438,375
Procter & Gamble Co. 19,900 2,139,250
-------------
4,204,925
-------------
Diversified Financial Services--3.3%
Conseco, Inc. 24,900 1,587,375
First USA, Inc. 48,900 1,693,163
MBNA Corp. 16,000 664,000
T. Rowe Price Associates 28,350 1,233,225
Travelers Group, Inc. 33,433 1,517,022
-------------
6,694,785
-------------
Diversified Miscellaneous--0.5%
Minnesota Mining & Manufacturing Co. 11,200 928,200
-------------
Electrical Equipment--1.6%
Emerson Electric Co. 2,400 232,200
General Electric Co. 21,100 2,086,262
Westinghouse Electric Corp. 45,000 894,375
-------------
3,212,837
-------------
Electronics--3.0%
Intel Corp. 23,800 3,116,313
Micron Technology, Inc. 14,600 425,225
Perkin Elmer Corp. 17,200 1,012,650
Texas Instruments, Inc. 9,200 586,500
3Com Corp. (b) 13,300 975,888
-------------
6,116,576
-------------
Entertainment, Leisure & Gaming--0.5%
Walt Disney Co. 13,500 939,937
-------------
Food--1.1%
Campbell Soup Co. 12,000 $ 963,000
Hudson Foods, Inc. Class A 65,700 1,248,300
-------------
2,211,300
-------------
Healthcare--Diversified--1.6%
American Home Products Corp. 21,500 1,260,438
Bristol-Myers Squibb Co. 15,300 1,663,875
Warner-Lambert Co. 5,400 405,000
-------------
3,329,313
-------------
Healthcare--Drugs--2.2%
Amgen, Inc. (b) 13,500 734,062
Lilly (Eli) & Co. 5,400 394,200
Merck & Co., Inc. 25,600 2,028,800
Pfizer, Inc. 17,000 1,408,875
-------------
4,565,937
-------------
Hospital Management & Services--1.1%
Columbia/HCA Healthcare Corp. 55,000 2,241,250
-------------
Household Furnishings & Appliances--0.9%
Sunbeam Corp., Inc. 75,300 1,938,975
-------------
Insurance--2.5%
Allstate Corp. 36,400 2,106,650
American International Group, Inc. 12,000 1,299,000
Chubb Corp. 7,600 408,500
ITT Hartford Group, Inc. (b) 4,000 270,000
TIG Holdings, Inc. 31,600 1,070,450
-------------
5,154,600
-------------
Lodging & Restaurants--0.9%
Hilton Hotels Corp. 74,000 1,933,250
-------------
Machinery--0.5%
Deere & Co. 23,900 970,937
-------------
Medical Products & Supplies--1.2%
Abbott Laboratories 7,500 380,625
Boston Scientific Corp. (b) 18,000 1,080,000
Johnson & Johnson 20,000 995,000
-------------
2,455,625
-------------
Natural Gas--2.1%
Apache Corp. 23,100 817,162
Columbia Gas System, Inc. 9,600 610,800
Consolidated Natural Gas Co. 14,600 806,650
Enron Corp. 47,800 2,061,375
-------------
4,295,987
-------------
Office & Business Equipment--2.5%
International Business Machines Corp. 16,500 2,491,500
Sun Microsystems, Inc. (b) 67,200 1,726,200
Xerox Corp. 16,200 852,525
-------------
5,070,225
-------------
Oil--2.5%
Chevron Corp. 25,300 1,644,500
Exxon Corp. 13,000 1,274,000
Mobil Corp. 1,800 220,050
Noble Affiliates, Inc. 39,800 1,905,425
-------------
5,043,975
--------------
See Notes to Financial Statements
2-33
<PAGE>
BALANCED SERIES
SHARES VALUE
-------- ---------------
Oil Service & Equipment--4.1%
Noble Drilling Corp. (b) 95,700 $ 1,902,037
Schlumberger Ltd. 10,100 1,008,738
Seacor Holdings, Inc. (b) 32,900 2,072,700
Transocean Offshore, Inc. 20,000 1,252,500
Western Atlas, Inc. (b) 30,500 2,161,688
------------
8,397,663
------------
Pollution Control--0.7%
Republic Industries, Inc. (b) 13,500 421,031
U.S.A. Waste Services, Inc. (b) 32,300 1,029,562
------------
1,450,593
------------
Professional Services--2.0%
Cognizant Corp. 36,000 1,188,000
Corrections Corporation of America (b) 20,000 612,500
HFS, Inc. (b) 22,400 1,338,400
Marsh & McLennan Cos., Inc. 9,000 936,000
------------
4,074,900
------------
Publishing, Broadcasting, Printing & Cable--0.2%
New York Times Co. 13,000 494,000
------------
Real Estate Investment Trusts--0.2%
Redwood Trust, Inc. 11,200 417,200
------------
Retail--2.1%
Office Depot, Inc. (b) 20,000 355,000
Sears Roebuck & Co. 30,000 1,383,750
Staples, Inc. (b) 54,000 975,375
TJX Companies, Inc. 31,600 1,497,050
------------
4,211,175
------------
Retail--Food--1.0%
Safeway, Inc. (b) 50,000 2,137,500
------------
Telecommunications Equipment--2.0%
Cisco Systems, Inc. (b) 60,000 3,817,500
Lucent Technologies, Inc. 4,200 194,250
------------
4,011,750
------------
Textile & Apparel--0.8%
Nike, Inc. Class B 26,000 1,553,500
------------
Utility--Telephone--0.4%
Ameritech Corp. 7,300 442,562
Bell Atlantic Corp. 6,700 433,825
------------
876,387
------------
TOTAL COMMON STOCKS
(Identified cost $103,215,557) $114,228,702
------------
FOREIGN COMMON STOCKS--1.0%
Oil--1.0%
British Petroleum PLC ADR (United Kingdom) 6,100 862,387
Royal Dutch Petroleum Co. ADR NY Registered
Shares (Netherlands) 6,200 1,058,650
------------
1,921,037
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,803,661) 1,921,037
------------
TOTAL LONG-TERM INVESTMENTS--95.0%
(Identified cost $182,701,832) 194,086,483
------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ---------------
SHORT-TERM OBLIGATIONS--4.4%
Commercial Paper--3.3%
Cargill, Inc. 6.95%, 1-2-97 A-1+ $ 165 $ 164,968
Abbott Laboratories 5.42%, 1-7-97 A-1+ 1,530 1,528,618
Bellsouth Capital Funding Corp.
5.40%, 1-14-97 A-1+ 2,500 2,495,125
Southwestern Bell Telephone Co.
5.34%, 2-18-97 A-1+ 2,525 2,505,752
------------
6,694,463
------------
Federal Agency Securities--1.1%
Federal Home Loan Mortgage Corp. 5.29%, 1-14-97 2,195 2,190,807
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $8,886,540) 8,885,270
------------
TOTAL INVESTMENTS--99.4%
(Identified cost $191,588,372) 202,971,753(a)
Cash and receivables, less liabilities--0.6% 1,313,479
------------
NET ASSETS--100.0% $204,285,232
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $13,992,659 and gross
depreciation of $2,784,718 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$191,763,812.
(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,
1996, these securities amounted to a value of $2,667,769 or 1.3% of net
assets.
(d) As rated by Moody's, Fitch or Duff & Phelps.
(e) Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(f) Rights incorporated as a unit.
See Notes to Financial Statements
2-34
<PAGE>
BALANCED SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $191,588,372) $202,971,753
Cash 97,977
Interest and dividends receivable 1,404,630
Receivable for investment securities sold 1,107
------------
Total assets 204,475,467
------------
Liabilities
Payable for fund shares repurchased 12,117
Payable for investment securities purchased 10,890
Investment advisory fee 95,346
Financial agent fee 10,401
Trustees' fee 7,941
Accrued expenses 53,540
------------
Total liabilities 190,235
------------
Net Assets $204,285,232
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $186,762,034
Undistributed net investment income 351,214
Accumulated net realized gain 5,788,603
Net unrealized appreciation 11,383,381
------------
Net Assets $204,285,232
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 16,941,850
============
Net asset value and offering price per share $12.06
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $ 5,995,642
Dividends 1,161,737
------------
Total investment income 7,157,379
------------
Expenses
Investment advisory fee 1,089,976
Financial agent fee 118,907
Custodian 34,584
Printing 55,128
Professional 25,334
Trustees 17,873
Miscellaneous 8,802
------------
Total expenses 1,350,604
------------
Net investment income 5,806,775
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 16,867,817
Net change in unrealized appreciation (depreciation) on investments (2,671,304)
------------
Net gain on investments 14,196,513
------------
Net increase in net assets resulting from operations $20,003,288
============
</TABLE>
See Notes to Financial Statements
2-35
<PAGE>
BALANCED SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/96 12/31/95
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income $ 5,806,775 $ 5,964,289
Net realized gain 16,867,817 17,178,873
Net change in unrealized appreciation (depreciation) (2,671,304) 13,277,376
------------ ------------
Net increase in net assets resulting from operations 20,003,288 36,420,538
------------ ------------
From Distributions to Shareholders
Net investment income (5,536,811) (6,004,047)
Net realized gains (18,064,626) (3,833,294)
------------ ------------
Decrease in net assets from distributions to shareholders (23,601,437) (9,837,341)
------------ ------------
From Share Transactions
Proceeds from sales of shares (2,805,856 and 2,915,001 shares,
respectively) 34,642,833 33,778,188
Net asset value of shares issued from reinvestment of distributions
(1,949,091 and 828,862 shares, respectively) 23,601,437 9,837,341
Cost of shares repurchased (3,529,372 and 3,333,135 shares,
respectively) (43,662,808) (38,002,038)
------------ ------------
Increase in net assets from share transactions 14,581,462 5,613,491
------------ ------------
Net increase in net assets 10,983,313 32,196,688
Net Assets
Beginning of period 193,301,919 161,105,231
------------ ------------
End of period (including undistributed net investment income of $351,214
and $74,806, respectively) $204,285,232 $193,301,919
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From Inception
5/1/92
Year Ended December 31, to
1996 1995 1994 1993 12/31/92
----------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $12.30 $10.53 $11.31 $10.77 $10.00
Income from investment operations
Net investment income 0.36 0.40(3) 0.38(2)(3) 0.32(2)(3) 0.19(3)
Net realized and unrealized gain
(loss) 0.89 2.02 (0.70) 0.60 0.77
-------- -------- -------- -------- -------
Total from investment operations 1.25 2.42 (0.32) 0.92 0.96
-------- -------- -------- -------- -------
Less distributions
Dividends from net investment
income (0.35) (0.40) (0.36) (0.32) (0.19)
Dividends from net realized gains (1.14) (0.25) (0.10) (0.06) --
-------- -------- -------- -------- -------
Total distributions (1.49) (0.65) (0.46) (0.38) (0.19)
-------- -------- -------- -------- -------
Change in net asset value (0.24) 1.77 (0.78) 0.54 0.77
-------- -------- -------- -------- -------
Net asset value, end of period $12.06 $12.30 $10.53 $11.31 $10.77
======== ======== ======== ======== =======
Total return 10.56% 23.28% -2.80% 8.57% 9.72%(5)
Ratios/supplemental data:
Net assets, end of period
(thousands) $204,285 $193,302 $161,105 $158,144 $54,467
Ratio to average net assets of:
Operating expenses 0.68% 0.65%(4) 0.69% 0.70% 0.50%(1)
Net investment income 2.93% 3.44% 3.44% 3.16% 3.59%(1)
Portfolio turnover rate 229% 223% 171% 161% 110%(1)
Average commission rate paid(6) $0.0641 N/A N/A N/A N/A
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.001 and $0.001 per share, respectively.
(3) Computed using average shares outstanding.
(4) The ratio of operating expenses to average net assets excludes the
effect of expense offsets for custodian fees; if expense offsets were
included, the ratio would not significantly differ.
(5) Not annualized
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate
generally does not reflect mark-ups, mark-downs, or spreads on shares
traded on a principal basis.
See Notes to Financial Statements
2-36
<PAGE>
REAL ESTATE SERIES
The real estate markets continued to stabilize over the last twelve months.
Leasing activity, rents, and market values all moved ahead as the economy
continued to improve and construction activity on a national basis supplied
less space than required by increased demand. Transaction prices in the
private real estate markets shot up, with capitalization rates falling by at
least one-half of a percentage point. In some regions, market prices on
existing properties are beginning to approach replacement cost, leading to
investor concerns of overbuilding in some sectors.
Performance by property type has varied considerably over this reporting
period. The apartment sector, which enjoyed the recovery in advance of most
other property types, has experienced more modest rental rate growth as
market vacancy rates have reached equilibrium. In the office sector, we
continued to see declines in vacancy rates--at least a 2% drop in 1996--and
strong gains in rental rates. Concerns about oversupply in the retail sector
have reduced investor demand for that product. However, construction in this
sector has finally slowed and there has been increased interest in certain
categories, namely regional malls and anchored community centers.
Full-service hotels have seen limited new construction, continued strong
demand, and very high occupancy levels. By comparison, economy hotels are
experiencing significant overbuilding and accompanying deterioration in
occupancy levels and room rates.
REITs posted very strong results over the past year. The best performing
property sectors during this period were office and hotel REITs. However, all
sectors other than the outlet center REITs generated very attractive returns.
Stock prices were propelled upward by strong growth in funds from operations
resulting from positive trends in occupancy levels and rental rates and by
expanding market capitalizations generated from both significant capital
inflow and aggressive acquisition programs.
The real estate securities market has continued to expand at a dramatic
pace, notwithstanding the modest volume of IPOs during the year. Growth has
been driven both by strong performance of the held assets and by an active
secondary market. During the year, there were 83 equity offerings raising a
total of $8.4 billion. In addition, unsecured debt offerings raised another
$4.2 billion.
Phoenix Edge Real Estate Series posted a strong 33.09% return for the twelve
months ended December 31, 1996. During the same period, the NAREIT Equity
Index posted a total return of 35.25%. All of these figures assume
reinvestment of any distributions, but exclude the effect of sales charges.
The Fund's investment strategy is to focus on market sectors which have
strong underlying fundamentals and prospects for growth in excess of market
averages over the intermediate and long-term. We also look for sectors that
are significantly undervalued on a risk-adjusted basis. Three of the targeted
sectors are apartment, hotel, and office/industrial REITs.
The Fund has been consistently overweighted in the apartment sector, which
we believe will offer stable earnings growth and reduced risk. The apartment
REITs as a group have had strong earnings growth over the last two years, yet
their stock prices have failed to keep pace with the broader REIT averages
due to investor fears of overbuilding.
We have also been significantly overweighted in the hotel sector, which has
posted very strong returns over the reporting period. Our outlook for hotels
remains positive, given the limited amount of new construction in the full
service sector which comprises the bulk of the product held by the REITs
represented in the Fund.
Finally, the Fund has had an increasing allocation to the office/industrial
sector, which participated in the overall real estate recovery later than
other property types and has strong upside potential. Office/industrial REITs
were among the top performers in 1996.
The Fund has maintained a neutral posture with respect to regional mall
REITs, which significantly outperformed last year. At the same time, we
remained underweighted in strip retail REITs because of concerns with respect
to underlying market fundamentals. Strip retail REITs generated market-based
returns during the last twelve months.
Looking ahead, we anticipate continued strong performance in the REIT market
for a number of reasons. First, the underlying markets are continuing to
strengthen and, with construction levels lower than projected demand in
nearly all property types, the outlook remains very positive. Second, there
is increasing interest by both individual and institutional investors in REIT
stocks. We attribute this to increased liquidity, attractive current yields
and the enhanced diversification benefits provided by these secu-
2-37
<PAGE>
REAL ESTATE SERIES
rities. Lastly, the increases in REIT prices experienced during 1996 have
been more or less in line with the increases in funds from operation, and
accordingly, multiples have not been driven up in line with the broader
markets.
Over the long-term, we expect to see continued growth in total market
capitalization, although limited if any growth in the numbers of companies as
focus on efficiencies of scale leads to more mergers and larger companies.
Nineteen companies today have market capitalizations in excess of $1 billion.
We expect that number will grow to as many as forty companies by the year
2000. The Fund will attempt to take advantage of this trend by focusing on
market dominant companies that have the potential to significantly increase
in size because they are positioned to acquire smaller private and public
companies. We will also continue to look for smaller undervalued companies
that are attractive takeover candidates for some of the larger REITs.
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
Real Estate
Series NAREIT*
5/1/95 $10,000 $10,000
12/31/95 11,779 11,548
12/31/96 15,677 15,618
- --------------------------------------------------------------------------------
Average Annual Total Returns for Periods Ending 12/31/96
From
Inception
5/1/95 to
1 Year 12/31/96
- ----------------------------------------------------------
Real Estate Series 33.09% 30.87%
- ----------------------------------------------------------
NAREIT Equity Index* 35.25% 30.58%
- ----------------------------------------------------------
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) Equity
Index is a commonly used, unmanaged indicator of REIT performance.
SCHEDULE OF INVESTMENTS
December 31, 1996
SHARES VALUE
--------------- ----------------
COMMON STOCKS--95.0%
REAL ESTATE INVESTMENT TRUSTS--91.1%
COMMERCIAL--23.6%
Office/Industrial--17.0%
Arden Realty Group, Inc. 3,800 $ 105,450
Beacon Properties Corp. 8,900 325,962
Cali Realty Corp. 4,900 151,287
CarrAmerica Realty Corp. 7,800 228,150
Duke Realty Investments, Inc. 18,400 708,400
Highwoods Properties, Inc. 28,600 965,250
Spieker Properties, Inc. 22,900 824,400
Weeks Corp. 16,300 541,975
-----------
3,850,874
-----------
Storage--6.6%
Public Storage, Inc. 22,300 691,300
Shurgard Storage Centers, Inc. 9,300 275,512
Storage USA, Inc. 14,300 538,038
-----------
1,504,850
-----------
Total Commercial 5,355,724
-----------
HEALTH CARE--5.6%
Health Care Properties Inv., Inc. 15,500 542,500
Nationwide Health Properties, Inc. 30,400 737,200
-----------
1,279,700
-----------
RESIDENTIAL--29.8%
Apartments--26.0%
Avalon Properties, Inc. 15,100 434,125
Bay Apartments Communities, Inc. 18,300 658,800
Camden Property Trust 11,700 334,913
Columbus Realty Trust 7,600 172,900
Equity Residential Properties Trust 16,100 664,125
Evans Withycombe Residential, Inc. 25,400 533,400
Irvine Apartment Communities, Inc. 21,600 540,000
Merry Land & Investment Co. 34,500 741,750
Oasis Residential, Inc. 19,000 432,250
Post Properties, Inc. 17,800 716,450
United Dominion Realty Trust 43,100 668,050
-----------
5,896,763
-----------
Manufactured Homes--3.8%
Manufactured Home Communities 15,800 367,350
Sun Communities, Inc. 14,400 496,800
-----------
864,150
-----------
Total Residential 6,760,913
-----------
RETAIL--32.1%
Community/Neighborhood--9.1%
Developers Diversified Realty Corp. 14,600 542,025
Federal Realty Investment Trust 14,300 387,887
Kimco Realty Corp. 12,500 435,938
Regency Realty Corp. 5,900 154,875
Vornado Realty Trust 10,400 546,000
-----------
2,066,725
-----------
Factory Outlet--2.0%
Chelsea G.C.A. Realty, Inc. 13,200 457,050
-----------
Hotels--13.4%
Capstar Hotel Company (b) 25,800 506,325
FelCor Suite Hotels, Inc. 23,500 831,312
Patriot American Hospitality, Inc. 22,300 961,688
Starwood Lodging Trust 13,400 738,675
-----------
3,038,000
-----------
See Notes to Financial Statements
2-38
<PAGE>
REAL ESTATE SERIES
SHARES VALUE
-------- -------------
Regional Mall--7.6%
Rouse Co. 8,000 $ 254,000
Simon DeBartolo Group, Inc. 23,096 715,976
Taubman Centers, Inc. 51,400 661,775
The Macerich Co. 3,900 101,888
----------
1,733,639
----------
Total Retail 7,295,414
----------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(Identified cost $16,370,698) 20,691,751
----------
REAL ESTATE OPERATING COMPANIES--3.9%
Hotels--3.9%
Host Marriott Corp. (b) 44,800 716,800
Interstate Hotels Company (b) 4,000 113,000
Red Roof Inns, Inc. (b) 3,400 52,700
----------
882,500
----------
TOTAL REAL ESTATE OPERATING COMPANIES
(Identified cost $788,346) 882,500
----------
TOTAL COMMON STOCKS
(Identified cost $17,159,044) 21,574,251
----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ --------- ----------------
SHORT-TERM OBLIGATIONS--5.9%
Commercial Paper--3.3%
Ameritech Capital Funding 6.25%,
1-2-97 A-1+ $470 $ 469,918
Campbell Soup Co. 6.75%, 1-2-97 A-1+ 280 279,948
------------
749,866
------------
Federal Agency Securities--2.6%
Federal Home Loan Mortgage Corp. 5.42%, 1-22-97 585 583,150
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,333,016) 1,333,016
------------
TOTAL INVESTMENTS--100.9%
(Identified cost $18,492,060) 22,907,267(a)
Cash and receivables, less liabilities--(0.9)% (197,507)
------------
NET ASSETS--100.0% $22,709,760
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,419,211 and gross
depreciation of $4,004 for income tax purposes. At December 31, 1996, the
aggregate cost of securities for federal income tax purposes was
$18,492,060.
(b) Non-income producing.
See Notes to Financial Statements
2-39
<PAGE>
REAL ESTATE SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $18,492,060) $22,907,267
Cash 1,172
Receivable for investment securities sold 148,032
Interest and dividends receivable 108,273
Receivable for fund shares sold 65,426
----------
Total assets 23,230,170
----------
Liabilities
Payable for investment securities purchased 463,909
Investment advisory fee 21,208
Trustees' fee 7,559
Financial agent fee 1,013
Accrued expenses 26,721
----------
Total liabilities 520,410
----------
Net Assets $22,709,760
==========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $18,162,625
Undistributed net investment income 8,742
Accumulated net realized gain 123,186
Net unrealized appreciation 4,415,207
----------
Net Assets $22,709,760
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 1,585,644
==========
Net asset value and offering price per share $14.32
======
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
Investment Income
Dividends $645,491
Interest 16,241
----------
Total investment income 661,732
----------
Expenses
Investment advisory fee 92,546
Financial agent fee 7,404
Printing 21,801
Trustees 18,641
Professional 18,309
Custodian 10,810
Miscellaneous 6,369
Expenses borne by investment adviser (52,485)
----------
Total expenses 123,395
----------
Net investment income 538,337
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 357,371
Net change in unrealized appreciation (depreciation) on investments 3,569,257
----------
Net gain on investments 3,926,628
----------
Net increase in net assets resulting from operations $4,464,965
==========
</TABLE>
See Notes to Financial Statements
2-40
<PAGE>
REAL ESTATE SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year From Inception
Ended 5/1/95 to
12/31/96 12/31/95
-------------- ----------------
<S> <C> <C>
From Operations
Net investment income $ 538,337 $ 215,523
Net realized gain 357,371 44,211
Net change in unrealized appreciation (depreciation) 3,569,257 845,950
----------- ----------
Net increase in net assets resulting from operations 4,464,965 1,105,684
----------- ----------
From Distributions to Shareholders
Net investment income (529,595) (215,523)
Net realized gains (234,185) (44,211)
Tax return of capital -- (19,252)
Distribution in excess of net realized gains -- (80)
----------- ----------
Decrease in net assets from distributions to shareholders (763,780) (279,066)
----------- ----------
From Share Transactions
Proceeds from sales of shares (1,121,196 and 784,136 shares,
respectively) 14,117,141 8,019,985
Net asset value of shares issued from reinvestment of distributions
(59,531 and 25,636 shares, respectively) 763,780 279,066
Cost of shares repurchased (342,758 and 62,097 shares, respectively) (4,344,888) (653,127)
----------- ----------
Increase in net assets from share transactions 10,536,033 7,645,924
----------- ----------
Net increase in net assets 14,237,218 8,472,542
Net Assets
Beginning of period 8,472,542 0
----------- ----------
End of period (including undistributed net investment income of $8,742
and $0, respectively) $22,709,760 $8,472,542
=========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Year From Inception
Ended 5/1/95 to
12/31/96 12/31/95
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period $11.33 $10.00
Income from investment operations
Net investment income 0.50(3) 0.33(3)
Net realized and unrealized gain 3.14 1.42
------- ------
Total from investment operations 3.64 1.75
------- ------
Less distributions
Dividends from net investment income (0.50) (0.33)
Dividends from net realized gains (0.15) (0.06)
Tax return of capital -- (0.03)
------- ------
Total distributions (0.65) (0.42)
------- ------
Change in net asset value 2.99 1.33
------- ------
Net asset value, end of period $14.32 $11.33
======= ======
Total return 33.09% 17.79%(2)
Ratios/supplemental data:
Net assets, end of period (thousands) $22,710 $8,473
Ratio to average net assets of:
Operating expenses 1.00% 1.00%(1)
Net investment income 4.36% 4.80%(1)
Portfolio turnover rate 21% 10%(2)
Average commission rate paid(4) $0.0468 N/A
</TABLE>
(1) Annualized
(2) Not annualized
(3) Includes reimbursement of operating expenses by investment adviser of
$0.05 and $0.07 per share, respectively.
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-41
<PAGE>
STRATEGIC THEME SERIES
Aided by record mutual fund inflows and corporate share buybacks, the U.S.
equity market continued to climb dramatically higher in 1996, breaking one
record after another in its wake. The widely followed Dow Jones Industrial
Average finished the year at a remarkable 6448 --some 1331 points above where
it stood twelve months ago. Given last year's investment climate of slower
earnings growth and higher interest rates, combined with the stellar equity
returns posted during 1995, many on Wall Street were surprised by the stock
market's continued strength.
Market volatility increased and sector rotation intensified during 1996, as
investor opinion shifted dramatically over the direction of the economy and
interest rates. We believe that this type of market environment should be
expected in the later stages of a long bull market as it illustrates some of
the uncertainty felt by investors. In the end, large-cap stocks significantly
outdistanced their small-cap counterparts, while technology and finance
companies provided some of last year's biggest gains.
Since the Fund's inception on January 29, 1996 through December 31,1996, the
Phoenix Edge Strategic Theme Series has posted a total return of 10.33%.
During this same period, the Standard & Poor's 500 Stock Index, a commonly
used measure of U.S. stock market performance, returned 21.44%. All of these
figures assume reinvestment of any distributions, but exclude the effect of
sales charges.
After posting strong gains in the first half of 1996, Fund performance over
the last six months has lagged the market primarily because of weakness in
some of our technology, capital goods and health care holdings. Our
underweighting in large-cap stocks also held back results as these non-theme
related blue-chip companies led the market during the second half of the
year. Positive contributors to performance during this period included our
strong stock selection in energy as well as our tactical strategy of raising
the Portfolio's cash holdings during the market selloff in July.
Despite the extended rally in the U.S. equity market, thematically, we
continue to identify a number of areas that should provide above-average
long-term growth as we head into 1997. Our Software Solutions theme focuses
on companies that increase organizational efficiency by providing products
and services to manage the proliferation of new technology and solve
increasingly complex user problems. Deregulating Financial Services is
another high conviction theme that we developed in response to the
demographic shift to savings and investments and the continued trend of
government deregulation. Lastly, we continue to emphasize our Energy
Technology theme which represents energy service companies that provide
productivity enhancing solutions to exploration and production companies.
Moving forward, we believe our key investment themes will serve us well in
this challenging market environment, given their ability to capture change
and identify strong earnings growth in a timely manner. As of December 31,
1996, the Fund's asset allocation mix was 98% equities and 2% cash
equivalents.
- --------------------------------------------------------------------------------
[DESCRIPTION OF PIE CHART
Short-term Obligations and Cash 2.1%
Environmental Crisis Recycled 2.0%
Move to Outsourcing 2.2%
Clean Energy Demand 5.0%
Return to Real Assets 7.7%
Next Generation Semiconductors 7.8%
Special Situations 9.9%
Hybrid Network 10.5%
Software Solutions 11.6%
Deregulating Financial Services 12.2%
21st Century Medicine 13.1%
Energy Technology 15.9%
- --------------------------------------------------------------------------------
2-42
<PAGE>
STRATEGIC THEME SERIES
Strategic Theme Series Line
- --------------------------------------------------------------------------------
[DESCRIPTION OF LINE CHART
S&P 500 Strategic
Stock Index* Theme Series
1/29/96 $10,000 $10,000
12/31/96 12,144 11,033
- --------------------------------------------------------------------------------
Total Returns for Period Ending 12/31/96
From
Inception
1/29/96 to
12/31/96
- --------------------------------------------------------
Strategic Theme Series 10.33%
- --------------------------------------------------------
S&P 500 Stock Index* 21.44%
- --------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 1/29/96
(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 S&P 500 Stock Index is an unmanaged but commonly used measure of stock
total return performance.
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C>
COMMON STOCKS--97.9%
Banks--Money Center--2.2%
Bankers Trust New York Corp. 3,000 $ 258,750
Citicorp 3,000 309,000
--------------
567,750
--------------
Commercial--Leasing Companies--1.6%
Prime Services, Inc. (b) 15,000 412,500
--------------
Commercial Services--Miscellaneous--1.4%
Equifax, Inc. 12,000 367,500
--------------
Computer--Local Networks--4.0%
3Com Corp. (b) 9,000 660,375
Cisco Systems, Inc. (b) 6,000 381,750
--------------
1,042,125
--------------
Computer--Mainframes--1.2%
International Business Machines Corp. 2,000 302,000
--------------
Computer--Memory Devices--3.2%
EMC Corp. (b) 13,000 430,625
Seagate Technology, Inc. (b) 10,000 395,000
--------------
825,625
--------------
Computer--Mini/Micro--2.1%
Compaq Computer Corp. (b) 7,500 556,875
--------------
Computer--Services--2.2%
Microsoft Corp. (b) 7,000 578,375
--------------
Computer--Software--10.5%
Baan Company N.V. (b) 7,000 243,250
Compuware Corp. (b) 7,000 350,875
MDSI Mobile Data Solutions, Inc. (b) 20,000 317,500
National Instruments Corporation (b) 12,000 384,000
Natural Microsystems Corp. (b) 12,000 378,000
Netscape Communications Corp. (b) 5,000 284,375
Peoplesoft, Inc. (b) 9,000 431,438
Rogue Wave Software, Inc. (b) 21,500 338,625
--------------
2,728,063
--------------
Electric--Miscellaneous Components--2.3%
Sawtek, Inc. (b) 15,000 594,375
--------------
Electric--Semiconductor Manufacturers--4.8%
ESS Technology, Inc. (b) 12,000 $ 337,500
Maxim Integrated Products, Inc. (b) 6,000 259,500
Oak Technology, Inc. (b) 34,000 382,500
Vitesse Semiconductor Corp. (b) 6,000 273,000
--------------
1,252,500
--------------
Electric Products--Miscellaneous--0.9%
Firearms Training Systems, Inc. (b) 20,000 235,000
--------------
Electrical--Connectors--3.0%
Intel Corp. 6,000 785,625
--------------
Finance--Equity Real Estate Investment Trust--6.7%
Avalon Properties, Inc. 10,000 287,500
Chelsea G.C.A. Realty, Inc. 8,000 277,000
Equity Residential Properties Trust 9,000 371,250
Essex Property Trust, Inc. 10,000 293,750
Security Capital Pacific Trust 10,000 228,750
Starwood Lodging Trust 5,000 275,625
--------------
1,733,875
--------------
Finance--Investment Bankers--6.6%
Alex Brown, Inc. 4,000 290,000
Charles Schwab Corp. 18,000 576,000
Edwards (A.G.), Inc. 8,000 269,000
Merrill Lynch & Company, Inc. 7,000 570,500
--------------
1,705,500
--------------
Financial--Mortgage Real Estate Investment Trust--1.0%
Redwood Trust, Inc. 7,000 260,750
--------------
Financial Services--Miscellaneous--1.0%
Hambrecht & Quist Group, Inc. (b) 12,000 259,500
--------------
Insurance--Life--2.5%
Conseco, Inc. 10,000 637,500
--------------
Leisure--Toys/Games & Hobby--1.4%
Action Performance Cos., Inc. (b) 20,000 360,000
--------------
Medical--Biomed/Genetics--4.1%
Alpha-Beta Technology, Inc. (b) 25,000 264,063
Amgen, Inc. (b) 5,000 271,875
Biogen, Inc. (b) 10,000 387,500
Liposome Company, Inc. (b) 7,000 133,875
--------------
1,057,313
---------------
</TABLE>
See Notes to Financial Statements
2-43
<PAGE>
STRATEGIC THEME SERIES
<TABLE>
<CAPTION>
SHARES VALUE
-------- ----------------
<S> <C> <C>
Medical--Drug/Diversified--1.0%
Abbott Laboratories 5,000 $ 253,750
------------
Medical--Ethical Drugs--3.1%
Dura Pharmaceuticals, Inc. (b) 10,000 477,500
Merck & Co., Inc. 4,000 317,000
------------
794,500
------------
Medical--Instruments--4.8%
Biopsys Medical, Inc. (b) 11,000 239,250
Heartstream, Inc. (b) 16,000 200,000
Medtronic, Inc. 12,000 816,000
------------
1,255,250
------------
Medical--Products--1.8%
Boston Scientific Corp. (b) 8,000 480,000
------------
Oil & Gas--Canadian Exploration & Production--1.5%
Flores & Rucks, Inc. (b) 7,500 399,375
------------
Oil & Gas--Drilling--1.1%
Nabors Industries, Inc. (b) 15,000 288,750
------------
Oil & Gas--Field Services--2.9%
Schlumberger Ltd. 7,500 749,062
------------
Oil & Gas--Machinery/Equipment--5.7%
Camco International, Inc. 4,500 207,562
Energy Ventures, Inc. (b) 5,500 279,812
Smith International, Inc. (b) 12,000 538,500
Varco International, Inc. (b) 20,000 462,500
------------
1,488,374
------------
Oil & Gas--Product/Pipeline--1.4%
Sonat, Inc. 7,000 $ 360,500
------------
Oil & Gas--U.S. Exploration & Production--8.2%
3DX Technologies, Inc. (b) 30,000 330,000
Parker & Parsley Petroleum Co. 8,000 294,000
Pogo Producing Co. 9,000 425,250
The Houston Exploration Co. (b) 5,400 94,500
Titan Exploration, Inc. (b) 5,000 60,000
Tom Brown, Inc. (b) 20,000 417,500
United Meridian Corp. (b) 10,000 517,500
------------
2,138,750
------------
Pollution Control--Equipment--0.9%
Cuno, Inc. (b) 15,000 223,125
------------
Pollution Control--Services--1.1%
Newpark Resources, Inc. (b) 8,000 298,000
------------
Real Estate Operations--1.0%
Fairfield Communities, Inc. (b) 10,000 247,500
------------
Retail--Wholesale Computers--0.7%
Tech Data Corp. (b) 7,000 191,625
------------
TOTAL COMMON STOCKS
(Identified cost $23,910,176) 25,431,312
------------
TOTAL INVESTMENTS--97.9%
(Identified cost $23,910,176) 25,431,312(a)
Cash and receivables, less liabilities--2.1% 540,697
------------
NET ASSETS--100.0% $25,972,009
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,902,955 and gross
depreciation of $400,085 for income tax purposes. At December 31, 1996,
the aggregate cost of securities for federal income tax purposes was
$23,928,442.
(b) Non-income producing.
See Notes to Financial Statements
2-44
<PAGE>
STRATEGIC THEME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $23,910,176) $25,431,312
Cash 787,660
Receivable for fund shares sold 37,641
Interest and dividends receivable 24,815
----------
Total assets 26,281,428
----------
Liabilities
Payable for investment securities purchased 263,750
Investment advisory fee 16,609
Trustees' fee 3,096
Financial agent fee 1,377
Accrued expenses 24,587
----------
Total liabilities 309,419
----------
Net Assets $25,972,009
==========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $24,889,007
Accumulated net realized loss (438,134)
Net unrealized appreciation 1,521,136
----------
Net Assets $25,972,009
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 2,365,493
==========
Net asset value and offering price per share $10.98
======
</TABLE>
STATEMENT OF OPERATIONS
From inception January 29, 1996 to December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $ 153,055
Dividends 87,336
----------
Total investment income 240,391
----------
Expenses
Investment advisory fee 109,725
Financial agent fee 8,778
Printing 19,739
Custodian 17,586
Trustees 15,978
Professional 13,215
Miscellaneous 1,697
Expenses borne by investment adviser (40,418)
----------
Total expenses 146,300
----------
Net investment income 94,091
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (438,134)
Net change in unrealized appreciation (depreciation) on investments 1,521,136
----------
Net gain on investments 1,083,002
----------
Net increase in net assets resulting from operations $1,177,093
==========
</TABLE>
See Notes to Financial Statements
2-45
<PAGE>
STRATEGIC THEME SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
1/29/96 to
12/31/96
----------------
<S> <C>
From Operations
Net investment income $ 94,091
Net realized loss (438,134)
Net change in unrealized appreciation (depreciation) 1,521,136
-------------
Net increase in net assets resulting from operations 1,177,093
-------------
From Distributions to Shareholders
Net investment income (94,091)
Tax return of capital (21,960)
-------------
Decrease in net assets from distributions to shareholders (116,051)
-------------
From Share Transactions
Proceeds from sales of shares (3,425,481 shares) 36,431,726
Net asset value of shares issued from reinvestment of distributions (10,456 shares) 116,051
Cost of shares repurchased (1,070,444 shares) (11,636,810)
-------------
Increase in net assets from share transactions 24,910,967
-------------
Net increase in net assets 25,972,009
Net Assets
Beginning of period 0
-------------
End of period (including undistributed net investment income of $0) $ 25,972,009
=============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From Inception
1/29/96 to
12/31/96
----------------
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations
Net investment income 0.04(2)
Net realized and unrealized gain 0.99
------
Total from investment operations 1.03
------
Less distributions
Dividends from net investment income (0.04)
Tax return of capital (0.01)
------
Total distributions (0.05)
------
Change in net asset value 0.98
------
Net asset value, end of period $10.98
======
Total return 10.33%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $25,972
Ratio to average net assets of:
Operating expenses 1.00%(1)
Net investment income 0.64%(1)
Portfolio turnover rate 391%(3)
Average commission rate paid(4) $0.0587
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02 per share.
(3) Not annualized
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
2-46
<PAGE>
ABERDEEN NEW ASIA SERIES
The performance of Asian equity markets since the launch of the Aberdeen New
Asia Series has been mixed, with the solid gains in Hong Kong, Malaysia and
Indonesia to some extent offset by falls in Thailand and South Korea. Since
its inception on September 17, 1996 through December 31, 1996, the Fund has
returned 0.16%. During this same period, its benchmark, the Morgan Stanley
Capital International AC Asia Pacific ex Japan Index, returned 3.30%.* All of
these figures assume reinvestment of any distributions.
A key factor in the Fund trailing the market has been the surge in the Hong
Kong stock market and in particular, local property stocks that dominate the
Hang Seng Index. We continue to hold the view that the risk in the property
sector, with prices now amongst the highest in the world, is high and further
upside is limited. We therefore have minimal exposure to Hong Kong property
in the portfolio.
In 1996, the emerging markets of the Far East enjoyed another year of strong
economic growth, with average GDP growth of around 7%. Earnings growth has
come in at the healthy level of 10-15%.
We have overweighted the stock markets of Indonesia and the Philippines,
which are benefiting from improved economic fundamentals. The Malaysian
economy is fulfilling our expectations although stock market valuations
appear stretched. Meanwhile, our investments in Australia are concentrated in
the industrial, commercial and financial sectors and generally have as a
common theme exposure to Asia and the added growth to be obtained from
transferring their proven expertise to the region.
The Indian sub-continent, although far from a mirror image of the
traditional Asian tiger, offers tremendous growth potential and
encouragingly, corporate management of the highest quality can be found.
Where we have been disappointed is in Korea and Thailand, but at current
stock market levels, feel the concerns overdone. Although the brightest light
economically has been China, it is frustrating that there are few companies
of sufficient quality in which to invest and our investment exposure remains
minimal.
Looking ahead, 1997 promises to be very similar to 1996. Average GDP growth
will be strong, running at around 7%, whilst governments continue to put the
economy at the top of their list of priorities. With trade becoming even more
intra regional and businesses moving across borders, our investment emphasis
will be keenly focused at the company level. We believe that quality
management and product as well as financial strength are crucial to long-term
investment returns. To identify these characteristics, our management team in
Singapore made well over 600 company visits in 1996.
Total Returns for Period Ending 12/31/96
From
Inception
9/17/96 to
12/31/96
------------------------------------------- ------------
Aberdeen New Asia Series 0.16%
------------------------------------------- ----------
MSCI AC Asia Pacific Ex Japan Index* 3.30%
------------------------------------------- ----------
*Morgan Stanley Capital International All Country Asia Pacific (excluding
Japan) Index is a market-value weighted average of the performance of
approximately 690 securities listed on the stock exchanges of 14 countries
in Asia and the Pacific Basin. Performance is calculated on a total return
basis, as reported by Frank Russell Company.
2-47
<PAGE>
ABERDEEN NEW ASIA SERIES
SCHEDULE OF INVESTMENTS
December 31, 1996
SHARES VALUE
------------ ------------
COMMON STOCKS--91.2%
Australia--13.1%
Australian Gas Light Co. Ltd. (Utility-Gas) 70,000 $ 398,094
Davids Ltd. (Retail) 220,000 309,293
Pacific BBA Ltd. (Miscellaneous) 110,000 387,053
QBE Insurance Group Ltd. (Insurance) 80,000 421,287
---------
1,515,727
---------
Hong Kong--23.7%
CDL Hotels International Ltd. (Hotels) 600,000 343,249
Giordano International Ltd. (Retail) 300,000 255,983
HSBC Holdings PLC (Banks) 24,800 530,634
Hongkong Electric Holdings Ltd.
(Utility-Electric) 110,000 365,486
National Mutual Asia Ltd. (Insurance) 376,000 357,290
Qingling Motors Co. (Autos & Trucks) 254,000 140,383
Smartone Telecommunications (Utility-Telephone)
(b) 175,000 334,846
Swire Pacific Ltd. Class B (Miscellaneous) 275,000 415,972
---------
2,743,843
---------
India--6.9%
Grasim Industries Ltd. Sponsored GDR
(Engineering & Construction) 30,000 457,500
Industrial Credit & Investment Corporation of
India Ltd. Sponsored GDR (Diversified
Financial Services) (b) 35,000 341,250
---------
798,750
---------
Indonesia--9.4%
PT Bank Bali (Banks) 165,000 412,064
PT Duta Anggada Realty (Property) 200,000 186,243
PT Indosat (Utility-Telephone) 180,000 495,238
---------
1,093,545
---------
Malaysia--9.2%
AMMB Holdings Berhad (Diversified Financial
Services) 60,000 503,663
Malaysian Oxygen Berhad (Chemical) 65,000 334,587
Sime UEP Properties Berhad (Property) 90,000 231,637
---------
1,069,887
---------
Philippines--6.6%
Ayala Land, Inc. Class B (Property) 335,000 382,129
Philippine Long Distance Telephone Co.
Sponsored ADR (Utility-Telephone) 7,500 382,500
---------
764,629
---------
Singapore--8.0%
Development Bank of Singapore Ltd. (Banks) 30,000 405,347
Robinson & Co. Ltd. (Retail) 60,000 242,351
Rothmans Industries Ltd. (Tobacco) 65,000 276,487
---------
924,185
---------
South Korea--6.0%
Korea Electric Power Corp. Sponsored ADR
(Utility-Electric) 20,000 $ 410,000
Samsung Electronics Sponsored GDR 144A
(Electronics) (c) 15,000 285,000
---------
695,000
---------
Thailand--8.3%
Ruam Pattana Fund II (Closed End Mutual Fund) 1,000,000 409,516
Siam Cement Co. Ltd. (Building & Construction) 9,500 297,894
Siam Commercial Bank Public Co. Ltd. (Banks) 35,000 253,900
---------
961,310
---------
TOTAL COMMON STOCKS
(Identified cost $10,571,928) 10,566,876
---------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
CONVERTIBLE BONDS--0.8%
Thailand--0.8%
Siam Commercial Bank Public Co. Ltd.
Cv. 3.25%, '04 (Banks) NR $ 100 87,500
------------
TOTAL CONVERTIBLE BONDS
(Identified cost $105,000) 87,500
------------
TOTAL LONG-TERM INVESTMENTS--92.0%
(Identified cost $10,676,928) 10,654,376
------------
SHORT-TERM OBLIGATIONS--11.2%
Brown Brothers Harriman repurchase agreement,
5.75%, dated 12/31/96 due 1/2/97, repurchase
price $1,300,415, collateralized by U.S.
Treasury Note 6.50%, 4/30/97, market value
$1,327,670 1,300 1,300,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,300,000) 1,300,000
------------
TOTAL INVESTMENTS--103.2%
(Identified cost $11,976,928) 11,954,376(a)
Cash and receivables, less liabilities--(3.2%) (369,170)
------------
NET ASSETS--100.0% $11,585,206
============
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $465,515 and gross
depreciation of $509,532 for income tax purposes. At December 31, 1996
the aggregate cost of securities for federal income tax purposes was
$11,998,393.
(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 qualify institutional buyers. At December 31,
1996, these securities amounted to a value of $285,000 or 2.5% of net
assets.
See Notes to Financial Statements
2-48
<PAGE>
ABERDEEN NEW ASIA SERIES
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Total Long-Term Investments
(Unaudited)
Autos & Trucks 1.3%
Banks 15.9
Building & Construction 2.8
Chemical 3.1
Closed End Mutual Fund 3.9
Diversified Financial Services 7.9
Electronics 2.7
Engineering & Construction 4.3
Hotels 3.2
Insurance 7.3
Miscellaneous 7.5
Property 7.5
Retail 7.6
Tobacco 2.6
Utility-Electric 7.3
Utility-Gas 3.7
Utility-Telephone 11.4
-----
100.0%
=====
See Notes to Financial Statements
2-49
<PAGE>
ABERDEEN NEW ASIA SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
Assets
Investment securities at value (Identified cost $10,676,928) $10,654,376
Repurchase agreement (Identified cost $1,300,000) 1,300,000
Cash 57,338
Interest and dividends receivable 22,224
Receivable from adviser 11,584
Tax reclaim receivable 129
----------
Total assets 12,045,651
----------
Liabilities
Payable for investment securities purchased 386,031
Payable for fund shares repurchased 33,218
Trustees' fee 2,910
Financial agent fee 1,457
Accrued expenses 36,829
----------
Total liabilities 460,445
----------
Net Assets $11,585,206
==========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $11,604,992
Distributions in excess of net investment income (3,944)
Accumulated net realized gain 6,760
Net unrealized depreciation (22,602)
----------
Net Assets $11,585,206
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization 1,162,650
==========
Net asset value and offering price per share $9.96
=====
</TABLE>
STATEMENT OF OPERATIONS
From inception September 17, 1996 to December 31, 1996
<TABLE>
<S> <C>
Investment Income
Interest $49,108
Dividends 46,457
Foreign taxes withheld (6,838)
--------
Total investment income 88,727
--------
Expenses
Investment advisory fee 24,279
Financial agent fee 1,457
Custodian 24,539
Printing 7,235
Trustees 6,104
Professional 4,791
Miscellaneous 1,223
Expenses borne by investment adviser (39,279)
--------
Total expenses 30,349
--------
Net investment income 58,378
--------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 6,760
Net realized loss on foreign currency transactions (3,432)
Net change in unrealized appreciation (depreciation) on investments (22,552)
Net change in unrealized appreciation (depreciation) on foreign currency and foreign
currency transactions (50)
--------
Net loss on investments (19,274)
--------
Net increase in net assets resulting from operations $39,104
========
</TABLE>
See Notes to Financial Statements
2-50
<PAGE>
ABERDEEN NEW ASIA SERIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
9/17/96 to
12/31/96
----------------
<S> <C>
From Operations
Net investment income $ 58,378
Net realized gain 3,328
Net change in unrealized appreciation (depreciation) (22,602)
-------------
Net increase in net assets resulting from operations 39,104
-------------
From Distributions to Shareholders
Net investment income (58,378)
In excess of net investment income (512)
-------------
Decrease in net assets from distributions to shareholders (58,890)
-------------
From Share Transactions
Proceeds from sales of shares (1,343,657 shares) 13,400,256
Net asset value of shares issued from reinvestment of distributions (5,928 shares) 58,890
Cost of shares repurchased (186,935 shares) (1,854,154)
-------------
Increase in net assets from share transactions 11,604,992
-------------
Net increase in net assets 11,585,206
Net Assets
Beginning of period 0
-------------
End of period (including distributions in excess of net investment income of $3,944) $11,585,206
=============
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
From Inception
9/17/96 to
12/31/96
----------------
<S> <C>
Net asset value, beginning of period $10.00
Income from investment operations
Net investment income 0.05(2)
Net realized and unrealized gain (loss) (0.04)
------
Total from investment operations 0.01
------
Less distributions
Dividends from net investment income (0.05)
------
Total distributions (0.05)
------
Change in net asset value (0.04)
------
Net asset value, end of period $9.96
======
Total return 0.16%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $11,585
Ratio to average net assets of:
Operating expenses 1.25%(1)
Net investment income 2.40%(1)
Portfolio turnover rate 2%(3)
Average commission rate paid(4) $0.0109
</TABLE>
(1) Annualized
(2) Includes reimbursement of operating expenses by investment adviser of
$0.03 per share.
(3) Not annualized
(4) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
securities trades on which commissions are charged. This rate
generally does not reflect mark-ups, mark-downs, or spreads on shares
traded on a principal basis.
See Notes to Financial Statements
2-51
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
Note 1--Organization
The Phoenix Edge Series Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940,
as amended, as an open-end management investment company. The Fund is
comprised of the Money Market, Growth, Multi-Sector Fixed Income (formerly
Bond), Total Return, International, Balanced, Real Estate Securities
("Real Estate"), Strategic Theme and Aberdeen New Asia Series. The Board
of Trustees voted to change the name of the Total Return Series to the
Strategic Allocation Series, which name will be used starting in 1997. The
Fund was established as part of the December 8, 1986 reorganization of the
Phoenix Home Life Variable Accumulation Account (the Account) from a
management investment company to a unit investment trust under the
Investment Company Act of 1940. The Fund is organized with Series which
are available only to the sub-accounts of the Phoenix Home Life Variable
Accumulation Account, the Phoenix Home Life Variable Universal Life
Account, the PHL Variable Accumulation Account, and the Phoenix Home Life
Separate Accounts B, C, and D.
Each Series has distinct investment objectives. The Money Market Series
seeks to provide maximum current income consistent with capital
preservation and liquidity. The Growth Series seeks to achieve
intermediate and long-term growth of capital, with income as a secondary
consideration. The Multi-Sector Fixed Income Series seeks to provide
long-term total return by investing in a diversified portfolio of high
yield and high quality fixed income securities. The Total Return Series
seeks to realize as high a level of total rate of return over an extended
period of time as is considered consistent with prudent investment risk by
investing in three market segments; stocks, bonds and money market
instruments. The International Series seeks as its investment objective a
high total return consistent with reasonable risk by investing primarily
in an internationally diversified portfolio of equity securities. The
Balanced Series seeks to provide reasonable income, long-term growth and
conservation of capital. The Real Estate Series seeks to achieve capital
appreciation and income with approximately equal emphasis through
investments in real estate investment trusts and companies that operate,
manage, develop or invest in real estate. The Strategic Theme Series seeks
long-term appreciation of capital by investing in securities that the
adviser believes are well positioned to benefit from cultural,
demographic, regulatory, social or technological changes worldwide. The
Aberdeen New Asia Series seeks to provide long-term capital appreciation
by investing primarily in diversified equity securities of issuers
organized and principally operating in Asia, excluding Japan.
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. 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
Equity securities are valued at the last sale price, or if there had been
no sale that day, at the last bid price. Debt securities are valued on the
basis of broker quotations or valuations provided by a pricing service
which utilizes information with respect to recent sales, market
transactions in comparable securities, quotations from dealers, and
various relationships between securities in determining value. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. All other securities and assets
are valued at their fair value as determined in good faith by or under the
direction of the Trustees.
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.
B. Security Transactions and Related Income
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date, or in the case of certain foreign securities, as soon as
the Fund is notified. The Fund does not amortize premiums except for the
Money Market Series, but does amortize discounts using the effective
interest method. Realized gains and losses are determined on the
identified cost basis.
C. Income Taxes
Each of the Series is treated as a separate taxable entity. It is the
policy of each Series to comply with the requirements of the Internal
Revenue Code, applicable to regulated investment companies, and to
distribute substantially all of its taxable income to its shareholders. In
addition, each 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.
2-52
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
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 Series 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 Series 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 Series as unrealized gains or losses. When the contract is closed, the
Series 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.
I. Credit Risk
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such
investments may be volatile. The consequences of political, social or
economic changes in these markets may have disruptive effects on the
market prices of these investments and the income they generate, as well
as a fund's ability to repatriate such amounts.
J. When-Issued and Delayed Delivery Transactions
Each Series may engage in when-issued or delayed delivery transactions.
The Series record when-issued securities on the trade date and maintain
collateral for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis begin earning interest on the
settlement date.
K. Repurchase Agreements
A repurchase agreement is a transaction where a Series acquires a security
for cash and obtains a simultaneous commitment from the seller to
repurchase the security at an agreed upon price and date. The Series,
through its custodian, takes possession of securities collateralizing the
repurchase agreement. The collateral is marked to market daily to ensure
that the market value of the underlying assets remains sufficient to
protect the Series in the event of default by the seller. If the seller
defaults and the value of the collateral declines or, if the seller enters
insolvency proceedings, realization of collateral may be delayed or
limited.
Note 3--Investment Advisory Fees and Related Party Transactions
As compensation for its advisory services to the Fund, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix
Home Life Insurance Company ("PHL") is entitled to a fee, based upon the
following annual rates as a percentage of the average daily net assets of
each separate Series listed below:
2-53
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
Rate for first Rate for next Rate for excess
Series $250 million $250 million over $500 million
- ------------------------- ------------- ------------- -----------------
Money Market 0.40% 0.35% 0.30%
Multi-Sector Fixed Income 0.50 0.45 0.40
Balanced 0.55 0.50 0.45
Total Return 0.60 0.55 0.50
Growth 0.70 0.65 0.60
International 0.75 0.70 0.65
Strategic Theme 0.75 0.70 0.65
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.
Phoenix-Aberdeen International Advisors, LLC ("PAIA") serves as the
investment adviser to the Aberdeen New Asia Series. PAIA is a joint venture
between PM Holdings, Inc., a direct subsidiary of PHL, and Aberdeen Fund
Managers, Inc. ("Aberdeen"), a wholly-owned subsidiary of Aberdeen Trust
PLC. PAIA is entitled to a fee, at an annual rate of 1.00% of the average
daily net assets of the Aberdeen New Asia Series. Pursuant to Sub-advisory
agreements, PAIA delegates certain investment decisions and functions to
other entities. PIC receives a fee of 0.30% of the average daily net assets
of the Aberdeen New Asia Series from PAIA for providing research and other
domestic advisory services, as needed. In addition, PAIA also pays a
sub-advisory fee to Aberdeen of 0.40% of the average daily net assets of the
Aberdeen New Asia Series for implementing certain portfolio transactions and
providing research and other services.
Each Series (except the International, Real Estate, Strategic Theme and
Aberdeen New Asia Series) pays a portion or all of its other operating
expenses (not including management fee, interest, taxes, brokerage fees and
commissions), up to 0.15% of its average net assets. The International, Real
Estate, Strategic Theme and Aberdeen New Asia Series pay other operating
expenses up to 0.40%, 0.25%, 0.25% and 0.25%, respectively, of its average
net assets. Expenses above these limits are paid by the Advisers, PIC, PRS,
PAIA 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, 1996, PHL and affiliates held shares in the Phoenix Edge
Series Fund and/or in the underlying unit investment trusts which had the
following aggregate value:
Growth Series $7,778,391
Real Estate Series 7,679,000
Strategic Theme Series 2,422,000
Aberdeen New Asia Series 2,994,000
Note 4--Purchases and Sales of Securities
Purchases and sales of securities during the year ended December 31, 1996
(excluding U.S. Government securities, short-term securities, and forward
currency contracts) aggregated the following:
Purchases Sales
--------------- ---------------
Growth Series $1,865,968,350 $1,647,416,886
Multi-Sector Fixed Income Series 137,698,754 116,707,797
Total Return Series 759,164,211 694,169,119
International Series 207,432,815 200,198,274
Balanced Series 338,117,817 337,496,248
Real Estate Series 12,152,673 2,561,373
Strategic Theme Series 75,112,297 50,743,367
Aberdeen New Asia Series 10,809,057 138,890
There were no purchases or sales of such securities in the Money Market
Series.
2-54
<PAGE>
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
Purchases and sales of long-term U.S. Government securities during the year
ended December 31, 1996 aggregated the following:
Purchases Sales
--------------- ---------------
Multi-Sector Fixed Income Series $113,666,060 $104,348,297
Total Return Series 159,225,544 193,278,713
Balanced Series 68,657,655 61,795,350
There were no purchases or sales of long-term U.S. Government securities in
the Money Market, Growth, International, Strategic Theme, Real Estate, or
Aberdeen New Asia Series.
Note 5--Forward Currency Contracts
At December 31, 1996, the International Series had entered into various
forward currency contracts which contractually obligate the Series to
deliver currencies at specified dates. Open contracts were as follows:
<TABLE>
<CAPTION>
In Net
Short Contracts Exchange Settlement Unrealized
to Deliver For Date Value Appreciation
- ----------------------- ------------------------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
DM 9,630,000 USD 6,321,387 1/6/97 $ 6,205,293 $ 116,094
SF 7,640,000 USD 6,133,098 1/6/97 5,676,499 456,599
YEN 1,252,000,000 USD 11,330,829 1/6/97 10,831,052 499,777
-----------
$1,072,470
===========
</TABLE>
DM = German Deutsche Mark
SF = Swiss Franc
YEN = Japanese Yen
USD = U.S. Dollar
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, 1996, the Series recorded the following reclassifications to increase
(decrease) the accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gains/(losses) interest
---------------- --------------- ---------------
<S> <C> <C> <C>
Growth Series $ (25,548) $ 25,548 $ --
Multi-Sector Fixed Income Series 69,698 (69,698) --
Total Return Series (57,892) 57,891 1
International Series 1,662,959 (2,091,139) 428,180
Balanced Series 6,444 (748) (5,696)
Aberdeen New Asia Series (3,432) 3,432 --
Real Estate Series -- 80 (80)
</TABLE>
Note 7--Capital Loss Carryovers
At December 31, 1996, the Strategic Theme Series had available for federal
income tax purposes unused capital losses of $396,065 expiring in 2003. In
addition, the Multi-Sector Fixed Income Series was able to utilize losses
deferred in the prior year against current year capital gains in the
amount of $1,708,357.
Under current tax law, capital losses realized after October 31, 1996 may
be deferred and treated as occurring on the first day of the following tax
year. For the calendar year ended December 31, 1996, the Growth and
Aberdeen New Asia Series elected to defer $613 and $1,755, respectively,
in losses occurring between November 1, 1996 and December 31, 1996. In
addition, the International Series was able to utilize losses deferred in
the prior year against current year capital gains in the amount of
$1,730,497.
TAX INFORMATION NOTICE (Unaudited)
For the fiscal year ended December 31, 1996, the following Series
distributed long-term capital gains dividends as follows:
Growth Series $33,007,184
Multi-Sector Fixed Income Series 2,669,277
Total Return Series 9,454,283
International Series 2,935,239
Balanced Series 5,689,751
Real Estate Series 130,779
2-55
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
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, Multi-Sector Fixed Income
(formerly Bond) Series, Total Return Series, International Series, Balanced
Series, Real Estate Series, Strategic Theme Series and Aberdeen New Asia
Series (constituting The Phoenix Edge Series Fund, hereafter referred to as
the "Fund") at December 31, 1996, 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, 1996 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, 1997
2-56
<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
Michael E. Haylon, Executive Vice President
David R. Pepin, Executive Vice President
William J. Newman, Senior Vice President
Hugh Young, Senior Vice President
Curtiss O. Barrows, Vice President
Mary E. Canning, Vice President
Jeanne H. Dorey, Vice President
Jean Claude Gruet, Vice President
William E. Keen III, Vice President
Christopher J. Kelleher, Vice President
David Lui, Vice President
William R. Moyer, Vice President
Scott C. Noble, Vice President
C. Edwin Riley, Jr., Vice President
Amy L. Robinson, Vice President
Barbara Rubin, Vice President
Leonard J. Saltiel, Vice President
Dorothy J. Skaret, Vice President
James D. Wehr, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Advisers
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Phoenix Realty Securities, Inc.
(Real Estate Series)
38 Prospect Street
Hartford, Connecticut 06115-0479
Phoenix-Aberdeen International Advisors, LLC
(Aberdeen New Asia Series)
56 Prospect Street
Hartford, Connecticut 06115-0480
Custodians
The Chase Manhattan Bank
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
Brown Brothers Harriman & Co.
(Aberdeen New Asia Series and International Series)
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust Company
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Jorden Burt, Berenson & Johnson LLP
Suite 400 East
1025 Thomas Jefferson Street N.W.
Washington, D.C. 20007-0805
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
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 Fund's Record and other
pertinent information.
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 01
<NAME> PHOENIX EDGE MONEY MARKET SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 129308
<INVESTMENTS-AT-VALUE> 129308
<RECEIVABLES> 1622
<ASSETS-OTHER> 526
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 131456
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 95
<TOTAL-LIABILITIES> 95
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 131361
<SHARES-COMMON-STOCK> 13136
<SHARES-COMMON-PRIOR> 10291
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 131361
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 5865
<OTHER-INCOME> 0
<EXPENSES-NET> (590)
<NET-INVESTMENT-INCOME> 5275
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5275
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5304)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 31501
<NUMBER-OF-SHARES-REDEEMED> (29187)
<SHARES-REINVESTED> 530
<NET-CHANGE-IN-ASSETS> 28418
<ACCUMULATED-NII-PRIOR> 29
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 431
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 590
<AVERAGE-NET-ASSETS> 107758
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> PHOENIX EDGE GROWTH SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1217830
<INVESTMENTS-AT-VALUE> 1298580
<RECEIVABLES> 63125
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1361705
<PAYABLE-FOR-SECURITIES> 118209
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8101
<TOTAL-LIABILITIES> 126310
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1077176
<SHARES-COMMON-STOCK> 65391
<SHARES-COMMON-PRIOR> 54341
<ACCUMULATED-NII-CURRENT> 739
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 76730
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 80750
<NET-ASSETS> 1235395
<DIVIDEND-INCOME> 11474
<INTEREST-INCOME> 8183
<OTHER-INCOME> 0
<EXPENSES-NET> (8113)
<NET-INVESTMENT-INCOME> 11544
<REALIZED-GAINS-CURRENT> 151631
<APPREC-INCREASE-CURRENT> (28812)
<NET-CHANGE-FROM-OPS> 134363
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (10973)
<DISTRIBUTIONS-OF-GAINS> (82323)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16370
<NUMBER-OF-SHARES-REDEEMED> (10174)
<SHARES-REINVESTED> 4854
<NET-CHANGE-IN-ASSETS> 250006
<ACCUMULATED-NII-PRIOR> 195
<ACCUMULATED-GAINS-PRIOR> 7396
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7114
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8113
<AVERAGE-NET-ASSETS> 1123248
<PER-SHARE-NAV-BEGIN> 18.13
<PER-SHARE-NII> 0.19
<PER-SHARE-GAIN-APPREC> 2.10
<PER-SHARE-DIVIDEND> (0.18)
<PER-SHARE-DISTRIBUTIONS> (1.35)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.89
<EXPENSE-RATIO> 0.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> PHOENIX EDGE MULTI-SECTOR FIXED INCOME SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 139048
<INVESTMENTS-AT-VALUE> 143463
<RECEIVABLES> 6977
<ASSETS-OTHER> 23
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 150463
<PAYABLE-FOR-SECURITIES> 5298
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 121
<TOTAL-LIABILITIES> 5419
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 138951
<SHARES-COMMON-STOCK> 14026
<SHARES-COMMON-PRIOR> 10669
<ACCUMULATED-NII-CURRENT> 427
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1251
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4415
<NET-ASSETS> 145044
<DIVIDEND-INCOME> 623
<INTEREST-INCOME> 9626
<OTHER-INCOME> 0
<EXPENSES-NET> (788)
<NET-INVESTMENT-INCOME> 9461
<REALIZED-GAINS-CURRENT> 7367
<APPREC-INCREASE-CURRENT> (2310)
<NET-CHANGE-FROM-OPS> 14518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9239)
<DISTRIBUTIONS-OF-GAINS> (4271)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6711
<NUMBER-OF-SHARES-REDEEMED> (4670)
<SHARES-REINVESTED> 1316
<NET-CHANGE-IN-ASSETS> 35999
<ACCUMULATED-NII-PRIOR> 135
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 1775
<GROSS-ADVISORY-FEES> 606
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 809
<AVERAGE-NET-ASSETS> 121289
<PER-SHARE-NAV-BEGIN> 10.22
<PER-SHARE-NII> 0.79
<PER-SHARE-GAIN-APPREC> 0.43
<PER-SHARE-DIVIDEND> (0.78)
<PER-SHARE-DISTRIBUTIONS> (0.32)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.34
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 04
<NAME> PHOENIX EDGE TOTAL RETURN SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 356510
<INVESTMENTS-AT-VALUE> 373931
<RECEIVABLES> 1231
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 375162
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 918
<TOTAL-LIABILITIES> 918
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 351776
<SHARES-COMMON-STOCK> 27418
<SHARES-COMMON-PRIOR> 25952
<ACCUMULATED-NII-CURRENT> 415
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4632
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17421
<NET-ASSETS> 374244
<DIVIDEND-INCOME> 2772
<INTEREST-INCOME> 8132
<OTHER-INCOME> 0
<EXPENSES-NET> (2589)
<NET-INVESTMENT-INCOME> 8315
<REALIZED-GAINS-CURRENT> 25852
<APPREC-INCREASE-CURRENT> (2475)
<NET-CHANGE-FROM-OPS> 31692
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7997)
<DISTRIBUTIONS-OF-GAINS> (23234)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4387
<NUMBER-OF-SHARES-REDEEMED> (5175)
<SHARES-REINVESTED> 2254
<NET-CHANGE-IN-ASSETS> 20406
<ACCUMULATED-NII-PRIOR> 154
<ACCUMULATED-GAINS-PRIOR> 1956
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2147
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2589
<AVERAGE-NET-ASSETS> 367558
<PER-SHARE-NAV-BEGIN> 13.63
<PER-SHARE-NII> 0.32
<PER-SHARE-GAIN-APPREC> 0.91
<PER-SHARE-DIVIDEND> (0.31)
<PER-SHARE-DISTRIBUTIONS> (0.90)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.65
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 05
<NAME> PHOENIX EDGE INTERNATIONAL SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 145374
<INVESTMENTS-AT-VALUE> 169367
<RECEIVABLES> 266
<ASSETS-OTHER> 3283
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 172916
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 248
<TOTAL-LIABILITIES> 248
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 141596
<SHARES-COMMON-STOCK> 11895
<SHARES-COMMON-PRIOR> 10588
<ACCUMULATED-NII-CURRENT> 1391
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4615
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25066
<NET-ASSETS> 172668
<DIVIDEND-INCOME> 2164
<INTEREST-INCOME> 691
<OTHER-INCOME> 0
<EXPENSES-NET> (1616)
<NET-INVESTMENT-INCOME> 1239
<REALIZED-GAINS-CURRENT> 12049
<APPREC-INCREASE-CURRENT> 13071
<NET-CHANGE-FROM-OPS> 26359
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2429)
<DISTRIBUTIONS-OF-GAINS> (3811)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3517
<NUMBER-OF-SHARES-REDEEMED> (2645)
<SHARES-REINVESTED> 435
<NET-CHANGE-IN-ASSETS> 38213
<ACCUMULATED-NII-PRIOR> 918
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (1531)
<GROSS-ADVISORY-FEES> 1167
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<GROSS-EXPENSE> 1616
<AVERAGE-NET-ASSETS> 155605
<PER-SHARE-NAV-BEGIN> 12.70
<PER-SHARE-NII> 0.11
<PER-SHARE-GAIN-APPREC> 2.25
<PER-SHARE-DIVIDEND> (0.21)
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<PER-SHARE-NAV-END> 14.52
<EXPENSE-RATIO> 1.04
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 06
<NAME> PHOENIX EDGE BALANCED SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 191588
<INVESTMENTS-AT-VALUE> 202972
<RECEIVABLES> 1406
<ASSETS-OTHER> 98
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 204476
<PAYABLE-FOR-SECURITIES> 11
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 180
<TOTAL-LIABILITIES> 191
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 186762
<SHARES-COMMON-STOCK> 16942
<SHARES-COMMON-PRIOR> 15716
<ACCUMULATED-NII-CURRENT> 351
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5789
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11383
<NET-ASSETS> 204285
<DIVIDEND-INCOME> 1162
<INTEREST-INCOME> 5996
<OTHER-INCOME> 0
<EXPENSES-NET> (1351)
<NET-INVESTMENT-INCOME> 5807
<REALIZED-GAINS-CURRENT> 16868
<APPREC-INCREASE-CURRENT> (2671)
<NET-CHANGE-FROM-OPS> 20004
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5537)
<DISTRIBUTIONS-OF-GAINS> (18065)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2806
<NUMBER-OF-SHARES-REDEEMED> (3529)
<SHARES-REINVESTED> 1949
<NET-CHANGE-IN-ASSETS> 10983
<ACCUMULATED-NII-PRIOR> 75
<ACCUMULATED-GAINS-PRIOR> 6986
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1351
<AVERAGE-NET-ASSETS> 198178
<PER-SHARE-NAV-BEGIN> 12.30
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> 0.89
<PER-SHARE-DIVIDEND> (0.35)
<PER-SHARE-DISTRIBUTIONS> (1.14)
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<PER-SHARE-NAV-END> 12.06
<EXPENSE-RATIO> 0.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 07
<NAME> PHOENIX EDGE REAL ESTATE SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 18492
<INVESTMENTS-AT-VALUE> 22907
<RECEIVABLES> 322
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23230
<PAYABLE-FOR-SECURITIES> 464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 56
<TOTAL-LIABILITIES> 520
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18163
<SHARES-COMMON-STOCK> 1586
<SHARES-COMMON-PRIOR> 748
<ACCUMULATED-NII-CURRENT> 9
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 123
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4415
<NET-ASSETS> 22710
<DIVIDEND-INCOME> 645
<INTEREST-INCOME> 16
<OTHER-INCOME> 0
<EXPENSES-NET> (123)
<NET-INVESTMENT-INCOME> 538
<REALIZED-GAINS-CURRENT> 357
<APPREC-INCREASE-CURRENT> 3569
<NET-CHANGE-FROM-OPS> 4464
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (530)
<DISTRIBUTIONS-OF-GAINS> (234)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1121
<NUMBER-OF-SHARES-REDEEMED> (343)
<SHARES-REINVESTED> 60
<NET-CHANGE-IN-ASSETS> 14237
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 92
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 176
<AVERAGE-NET-ASSETS> 12339
<PER-SHARE-NAV-BEGIN> 11.33
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 3.14
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> (0.15)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.32
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 08
<NAME> PHOENIX EDGE STRATEGIC THEME SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-29-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 23910
<INVESTMENTS-AT-VALUE> 25431
<RECEIVABLES> 63
<ASSETS-OTHER> 788
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26282
<PAYABLE-FOR-SECURITIES> 264
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46
<TOTAL-LIABILITIES> 310
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24889
<SHARES-COMMON-STOCK> 2365
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (438)
<ACCUM-APPREC-OR-DEPREC> 1521
<NET-ASSETS> 25972
<DIVIDEND-INCOME> 87
<INTEREST-INCOME> 153
<OTHER-INCOME> 0
<EXPENSES-NET> (146)
<NET-INVESTMENT-INCOME> 94
<REALIZED-GAINS-CURRENT> (438)
<APPREC-INCREASE-CURRENT> 1521
<NET-CHANGE-FROM-OPS> 1177
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (94)
<DISTRIBUTIONS-OF-GAINS> (22)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3425
<NUMBER-OF-SHARES-REDEEMED> (1070)
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 25972
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 110
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 187
<AVERAGE-NET-ASSETS> 15842
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.99
<PER-SHARE-DIVIDEND> (0.04)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.98
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 09
<NAME> PHOENIX EDGE ABERDEEN NEW ASIA SERIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> SEP-17-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 10677
<INVESTMENTS-AT-VALUE> 10655
<RECEIVABLES> 34
<ASSETS-OTHER> 57
<OTHER-ITEMS-ASSETS> 1300
<TOTAL-ASSETS> 12046
<PAYABLE-FOR-SECURITIES> 386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 74
<TOTAL-LIABILITIES> 460
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11605
<SHARES-COMMON-STOCK> 1163
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (4)
<ACCUMULATED-NET-GAINS> 7
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (23)
<NET-ASSETS> 11585
<DIVIDEND-INCOME> 40
<INTEREST-INCOME> 49
<OTHER-INCOME> 0
<EXPENSES-NET> (30)
<NET-INVESTMENT-INCOME> 59
<REALIZED-GAINS-CURRENT> 3
<APPREC-INCREASE-CURRENT> (23)
<NET-CHANGE-FROM-OPS> 39
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (59)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1344
<NUMBER-OF-SHARES-REDEEMED> (187)
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 11585
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 24
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 69
<AVERAGE-NET-ASSETS> 8463
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> (0.04)
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.96
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
