PHOENIX EDGE SERIES FUND, 485APOS, 1999-03-01

PHOENIX EDGE SERIES FUND
485APOS, 1999-03-01

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As filed with the Securities and Exchange Commission on March 1, 1999

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------

FORM N-1A
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 26 [X]
AND/OR

REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 29 [X]

(CHECK APPROPRIATE BOX OR BOXES)
----------------------

THE PHOENIX EDGE SERIES FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
----------------------

101 MUNSON STREET, GREENFIELD, MASSACHUSETTS 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

C/O VARIABLE PRODUCTS OPERATIONS
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
(800) 447-4312

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
----------------------
COPIES TO:

<TABLE>
<CAPTION>
<S> <C> <C>
THOMAS N. STEENBURG EDWIN L. KERR, ESQ.
VICE PRESIDENT, COUNSEL AND SECRETARY C/O PHOENIX HOME LIFE MUTUAL
PHOENIX DUFF & PHELPS CORPORATION INSURANCE COMPANY
56 PROSPECT STREET ONE AMERICAN ROW
HARTFORD, CT 06115 HARTFORD, CT 06115
</TABLE>

(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------------

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant to paragraph (b)
[ ] On May 1, 1998 pursuant to paragraph (b), or
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] On ( ) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[X] On (April 30, 1999) pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

THE PHOENIX EDGE SERIES FUND

CROSS-REFERENCE SHEET

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

PART A

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

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

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

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

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

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

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

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

9. Pending Legal Proceedings...................... Not Applicable
</TABLE>

PART B

<TABLE>
<CAPTION>
FORM N-1A ITEM STATEMENT OF ADDITIONAL INFORMATION CAPTION
-------------- -------------------------------------------
<S> <C> <C>
10. Cover Page..................................... Cover Page

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

WE ARE OFFERING THIS PRODUCT ONLY WHERE WE MAY
LAWFULLY DO SO. YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED IN THIS DOCUMENT OR IN ONE THAT WE HAVE
REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.

<PAGE>

THE PHOENIX EDGE
SERIES FUND

PROSPECTUS MAY 1, 1999

The Phoenix Edge Series Fund (the "Fund") is an open-end management
investment company which is intended to meet a wide range of investment
objectives with its 15 separate Series. Generally, each Series operates as if it
were a separate fund.

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

THIS PROSPECTUS DESCRIBES EACH OF THE SERIES AND PROVIDES IMPORTANT
INFORMATION YOU SHOULD KNOW BEFORE INVESTING IN ANY SERIES OF THE FUND. YOU
SHOULD READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.

A document called a Statement of Additional Information ("SAI") dated May 1,
1999, containing further information about the Fund and each of the Series, has
been filed with the Securities and Exchange Commission ("SEC") and is
incorporated by reference into this prospectus. A free copy of the SAI may be
obtained by contacting us.

IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US AT:

[envelope] PHOENIX VARIABLE PRODUCTS
MAIL OPERATIONS
PO Box 8027
Boston, MA 02266-8027

[telephone] Tel. 800/541-0171

MANAGED BY
PHOENIX INVESTMENT COUNSEL, INC.
[diamond] Phoenix-Aberdeen International Series
[diamond] Phoenix-Engemann Nifty Fifty Series
[diamond] Phoenix-Goodwin Balanced Series
[diamond] Phoenix-Goodwin Growth & Income Series
[diamond] Phoenix-Goodwin Growth Series
[diamond] Phoenix-Goodwin Money Market Series
[diamond] Phoenix-Goodwin Multi-Sector Fixed Income Series
[diamond] Phoenix-Goodwin Strategic Allocation Series
[diamond] Phoenix-Goodwin Strategic Theme Series
[diamond] Phoenix-Hollister Value Equity Series
[diamond] Phoenix-Seneca Mid-Cap Growth Series
[diamond] Research Enhanced Index Series
[diamond] Schafer Mid-Cap Value Series

MANAGED BY
PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC
[diamond] Phoenix-Aberdeen New Asia Series

MANAGED BY
DUFF & PHELPS INVESTMENT MANAGEMENT CO.
[diamond] Phoenix-Duff & Phelps Real Estate
Securities Series

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION DETERMINED IF THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

TABLE OF CONTENTS

Heading Page
- --------------------------------------------------
THE PHOENIX EDGE SERIES FUND................... 1
TABLE OF CONTENTS ............................. 2
PHOENIX-ABERDEEN INTERNATIONAL SERIES.......... 3
Investment Risk and Return Summary ........... 3
Series' Expenses ............................. 4
Investment Strategies ........................ 4
Risks Related to Investment Strategies ....... 5
Management of the Series ..................... 6
Financial Highlights.......................... 7
PHOENIX-ABERDEEN NEW ASIA SERIES .............. 8
Investment Risk and Return Summary ........... 8
Series' Expenses ............................. 9
Investment Strategies ........................ 9
Risks Related to Investment Strategies ....... 10
Management of the Series ..................... 11
Financial Highlights.......................... 12
PHOENIX-DUFF & PHELPS REAL ESTATE
SECURITIES SERIES ............................ 13
Investment Risk and Return Summary ........... 13
Series' Expenses.............................. 14
Investment Strategies ........................ 14
Risks Related to Investment Strategies ....... 15
Management of the Series ..................... 16
Financial Highlights.......................... 17
PHOENIX-ENGEMANN NIFTY FIFTY SERIES............ 18
Investment Risk and Return Summary ........... 18
Series' Expenses ............................. 18
Investment Strategies ........................ 19
Risks Related to Investment Strategies ....... 19
Management of the Series ..................... 19
Financial Highlights.......................... 21
PHOENIX-GOODWIN BALANCED SERIES ............... 22
Investment Risk and Return Summary ........... 22
Series' Expenses ............................. 23
Investment Strategies ........................ 23
Risks Related to Investment Strategies ....... 24
Management of the Series ..................... 25
Financial Highlights.......................... 26
PHOENIX-GOODWIN GROWTH & INCOME SERIES......... 27
Investment Risk and Return Summary ........... 27
Series' Expenses ............................. 28
Investment Strategies ........................ 28
Risks Related to Investment Strategies ....... 29
Management of the Series ..................... 30
Financial Highlights.......................... 31
PHOENIX-GOODWIN GROWTH SERIES ................. 32
Investment Risk and Return Summary ........... 32
Series' Expenses ............................. 33
Investment Strategies ........................ 33
Risks Related to Investment Strategies ....... 33
Management of the Series ..................... 35
Financial Highlights.......................... 35
PHOENIX-GOODWIN MONEY MARKET SERIES ........... 36
Investment Risk and Return Summary ........... 36
Series' Expenses ............................. 37
Investment Strategies ........................ 37
Risks Related to Investment Strategies ....... 38
Management of the Series ..................... 38
Financial Highlights.......................... 39
PHOENIX-GOODWIN MULTI-SECTOR FIXED
INCOME SERIES................................. 40
Investment Risk and Return Summary ........... 40
Series' Expenses ............................. 41
Investment Strategies ........................ 41
Risks Related to Investment Strategies ....... 42
Management of the Series ..................... 43
Financial Highlights.......................... 44
PHOENIX-GOODWIN STRATEGIC ALLOCATION SERIES.... 45
Investment Risk and Return Summary ........... 45
Series' Expenses ............................. 46
Investment Strategies ........................ 46
Risks Related to Investment Strategies ....... 47
Management of the Series ..................... 48
Financial Highlights.......................... 49
PHOENIX-GOODWIN STRATEGIC THEME SERIES ........ 50
Investment Risk and Return Summary ........... 50
Series' Expenses ............................. 51
Investment Strategies ........................ 51
Risks Related to Investment Strategies ....... 52
Management of the Series ..................... 53
Financial Highlights.......................... 54
PHOENIX-HOLLISTER VALUE EQUITY SERIES ......... 55
Investment Risk and Return Summary ........... 55
Series' Expenses ............................. 56
Investment Strategies ........................ 56
Risks Related to Investment Strategies ....... 57
Management of the Series ..................... 58
Financial Highlights.......................... 59
PHOENIX-SENECA MID-CAP GROWTH SERIES .......... 60
Investment Risk and Return Summary ........... 60
Series' Expenses ............................. 61
Investment Strategies ........................ 61
Risks Related to Investment Strategies ....... 62
Management of the Series ..................... 64
Financial Highlights.......................... 65
RESEARCH ENHANCED INDEX SERIES................. 66
Investment Risk and Return Summary ........... 66
Series' Expenses ............................. 66
Investment Strategies ........................ 67
Risks Related to Investment Strategies ....... 67
Management of the Series ..................... 67
Financial Highlights.......................... 68
SCHAFER MID-CAP VALUE SERIES .................. 69
Investment Risk and Return Summary ........... 69
Series' Expenses ............................. 69
Investment Strategies ........................ 70
Risks Related to Investment Strategies ....... 70
Management of the Series ..................... 71
Financial Highlights.......................... 72
INVESTMENT RESTRICTIONS........................ 73
PORTFORLIO TURNOVER............................ 73
THE FUND AND ITS MANAGEMENT.................... 73
SHARES OF BENEFICIAL INTEREST.................. 73
NET ASSET VALUE................................ 74
TAXES.......................................... 74
APPENDIX....................................... 75

2
<PAGE>

PHOENIX-ABERDEEN INTERNATIONAL SERIES
- --------------------------------------------------------------------------------
INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
Phoenix-Aberdeen International Series has an investment objective of high
total return consistent with reasonable risk. There is no guarantee that the
Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] The adviser will invest primarily in corporate stock of established
non-U.S. companies believed to have potential for capital growth,
income or both. Under normal circumstances, the Series will invest at
least 80% of its total assets in non-U.S. issuers located in not less
than three countries.

[diamond] The Series may invest any amount for capital growth or for income. In
determining whether assets will be invested for capital growth or for
income, the adviser will analyze the international equity and fixed
income markets and assess the degree of risk and level of return that
can be expected from each market.

[diamond] The Series may invest in convertible securities, preferred stock,
bonds, notes and other debt instruments of companies and obligations
of domestic or foreign governments.

[diamond] The Series may invest up to 10% of its total assets in below
investment grade bonds, or so-called "junk bonds."

[diamond] The Series may engage in certain options transactions, and enter into
futures contracts and related options for hedging purposes, invest in
repurchase agreements and engage in "securities lending."

[diamond] The Series may invest in small companies as well as large companies.

[diamond] The Series may invest in companies in foreign countries with "emerging
markets."

PRINCIPAL RISKS
If you invest in this Series, you risk that you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to have potential for capital growth or income or
both. Most of the Series' investments will be in common stocks and other equity
investments. Conditions affecting the overall economy, specific industries or
companies in which the Series invests can be worse than expected. As a result,
the value of your shares may decrease. Increases in interest rates affecting the
global economy, particular industries or specific companies can cause fixed
income investments that the Series may own to decline in value. This, too, can
cause your share value to decrease.

Unlike many other funds, this Series may make significant investments in
companies in foreign countries and in foreign governments, including some
"emerging market" countries (those with markets that are not fully developed).
Political and economic uncertainty as well as relatively less public information
about investments may negatively impact the Series' portfolio. Some investments
may be made in currencies other than U.S. dollars that will fluctuate in value
as a result of changes in the currency exchange rate. Foreign markets and
currencies may not perform as well as U.S. markets. Emerging market countries
and companies doing business in emerging markets may not have the same range of
opportunities as countries and their companies in developed nations. They also
may have more obstacles to financial success.

This Series also may invest in small companies as well as larger companies.
Smaller companies, regardless of their location, may be affected to a greater
extent than larger companies by changes in general economic conditions and
conditions in particular industries. Smaller companies also may be relatively
new and not have the same operating history and "track record" as larger
companies. This could make future performance of smaller companies more
difficult to predict.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Aberdeen International Series. The bar chart shows
changes in the Series' performance from year to year over an 8-year period.1 The
table below shows how the Series' average annual returns for one and five years
and for the life of the Series compare to those of a broad-based securities
market index. The Series' past performance is not necessarily an indication of
how the Series will perform in the future.

PHOENIX-ABERDEEN INTERNATIONAL SERIES
[graphic omitted]

Calendar Year Annual Return (%)
1991 19.78
1992 12.89
1993 38.44
1994 0.03
1995 9.59
1996 18.65
1997 12.04
1998 27.92

(1)The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would have
been less than those shown if such charges were deducted. During the 8-year
period shown in the chart above, the highest return for a quarter was __%
(quarter ending _____________) and the lowest return for a quarter was __%
(quarter ending ___________).

3
<PAGE>

- --------------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
(FOR THE PERIOD ONE FIVE LIFE OF
ENDING 12/31/98) YEAR YEARS THE FUND(1)
- --------------------------------------------------
Phoenix-Aberdeen
International 27.92% 13.27% 11.01%
Series
- --------------------------------------------------
MSCI EAFE Index(2) 20.33% 9.50% 8.32%
- --------------------------------------------------
(1)Since May 1, 1990.

(2)The Morgan Stanley Capital International EAFE Index is an unmanaged, commonly
used measure of foreign stock fund performance, which includes net dividends
reinvested. Total return figures are net of foreign withholding taxes. The
EAFE Index is an aggregate of 19 individual country indexes in Europe,
Australia, New Zealand and the Far East.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .75%
Distribution and Service (12b-1) Fees None
Other Expenses .26%

-----------
TOTAL ANNUAL SERIES' OPERATING EXPENSES 1.01%
=====

EXAMPLE
This example is intended to help you compare the cost of investing in the Series
with the cost of investing in other funds.

The example assumes that you invest $10,000 in the Series for the time
periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the Series' operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be:

- ---------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------
Phoenix-
Aberdeen
International $10 $32 $56 $124
Series
- ---------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Series' investment objective is high total return consistent with
reasonable risk. There is no guarantee that the Series will achieve its
investment objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of securities of non-U.S.
issuers, including companies, governments, governmental agencies and
international organizations. The Series may invest in any region of the world.
Under normal circumstances, the Series will invest at least 80% of its total
assets in the securities of issuers located in at least three different
countries.

The Series will invest primarily in common stocks. The Series also may invest
in other equity securities, including preferred stocks, securities convertible
into common stocks, warrants and rights to purchase common stock and in bonds,
notes and other debt securities. Although the Series intends to invest primarily
in established companies, the Series may invest in securities of issuers of any
size, in countries with developed markets and countries with emerging markets.

The Series also may invest in nonconvertible fixed income securities of
non-U.S. issuers (described below) when the adviser feels that such securities
are appropriate for the achievement of the Series' investment objective. Market
values of fixed income securities typically move in the opposite direction from
changes in interest rates. Therefore, investing in fixed income securities can
provide an opportunity for capital appreciation when interest rates are expected
to decline.

The nonconvertible fixed income securities referred to above may consist of:

[diamond] corporate notes, bonds, debentures and other securities (such as
Euro-currency instruments) of non-U.S. issuers that are rated within
the three highest rating categories of rating services or, if unrated,
are deemed by the adviser to be of comparable credit quality;

[diamond] securities issued by foreign governments and supranational agencies
(such as the World Bank).

The Series may invest up to 10% of its net assets in fixed income securities
rated below investment grade (commonly referred to as "junk bonds").

Temporary defensive strategy: if the adviser believes that market conditions
are not favorable to the Series' principal strategies, the Series may invest
without limit in U.S. government securities and in money market instruments.
When this happens, the Series may not achieve its investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

4
<PAGE>

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is total return. The adviser intends to invest assets so
that your shares increase in value. However, the value of the Series'
investments that support your share value can decrease as well as increase. If
between the time you purchase shares and the time you sell shares the value of
the Series' investments decreases you will lose money. The value of the Series'
investments can decrease for a number of reasons. For example, changing economic
conditions may cause a decline in the value of many or even most equity and
fixed income investments. Particular industries can face poor markets for their
products or services so that companies engaged in those businesses do not do as
well as companies in other industries. Interest rate changes may improve
prospects for certain types of businesses and they may worsen prospects for
others. To the extent that the Series' investments are affected by general
economic declines, declines in industries, and interest rate changes that
negatively affect the companies in which the Series invests, Series share values
may decline. Share values also can decline if the specific companies selected
for Series investment fail to perform as the adviser or subadviser expects,
regardless of general economic trends, industry trends, interest rates and other
economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

FOREIGN INVESTING
The Series will invest in non-U.S. companies. Investing in the securities
of non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as relatively less public
information about investments may negatively impact the Series' portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

FOREIGN CURRENCY
Significant portions of the Series' assets may be invested in securities
denominated in foreign currencies. Changes in foreign exchange rates will affect
the value of those securities denominated or quoted in currencies other than the
U.S. dollar. The forces of supply and demand in the foreign exchange markets
determine exchange rates and these forces are in turn affected by a range of
economic, political, financial, governmental and other factors. Exchange rate
fluctuations can affect the Series' net asset value (share price) and dividends
either positively or negatively depending upon whether foreign currencies are
appreciating or depreciating in value relative to the U.S. dollar. Exchange
rates fluctuate over both the short and long terms.

Effective January 1, 1999, eleven European countries began converting from
their sovereign currency to the European Union common currency called the
"Euro." This conversion may expose the Series to certain risks, including the
reliability and timely reporting of pricing information of the Series' portfolio
holdings. In addition, one or more of the following may adversely affect
specific securities in the Series' portfolio:

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Competitive implications of increased price transparency of European
Union markets (including labor markets) resulting from adoption of a
common currency and issuers' plans for pricing their own products and
services in the Euro;

[diamond] Issuers' ability to make required information technology updates on a
timely basis, and costs associated with the conversion (including
costs of dual currency operations through January 1, 2002);

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance or price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

<PAGE>

EMERGING MARKET INVESTING
The Series may invest in companies located in emerging market countries and
regions. Investment in less-developed countries whose markets are still emerging
generally presents risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual companies
in developing countries may impose limitations on foreign ownership to prevent,
among other concerns, violation of foreign investment limitations.

The economies of developing countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in large and small companies throughout the world.
Companies with small capitalization are often companies with a limited operating
history or companies in industries which have recently emerged due to cultural,
economic, regulatory or technological developments. Such developments can have a
significant positive or negative effect on small capitalization companies and
their stock performance. Given the limited operating history and rapidly
changing fundamental prospects, investment returns from smaller capitalization
companies can be highly volatile. Smaller companies may find their ability to
raise capital impaired by their size or lack of operating history. Product lines
are often less diversified and subject to competitive threats. Smaller
capitalization stocks are subject to varying patterns of trading volume and may,
at times, be difficult to sell.

MUTUAL FUND INVESTING
The Series may invest in other mutual funds to take advantage of investment
opportunities in certain countries where the Series otherwise would not be able
to invest or where the size of a Series investment in any particular country
would be too small. The Series may invest up to 10% of its assets in the shares
of other mutual funds. However, the Series will not invest more than 5% of its
assets in any one mutual fund. When the Series purchases shares of another
mutual fund, the assets invested in the other mutual fund incur a layering of
expenses, including operating costs, advisory fees, and administrative fees that
you indirectly bear.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES' INVESTMENTS
The Year 2000 issue is the result of computer programs being written using
two rather than four digits to define the applicable year. There is the
possibility that some or all of a company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. If a company whose securities are held by the Series does
not "fix" its Year 2000 issue, it is possible that its operations and financial
results would be hurt. Also, the cost of modifying computer programs to become
Year 2000 compliant may hurt the financial performance and market price of
companies whose securities are held by the Series.

MANAGEMENT OF THE SERIES

THE ADVISERS
Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. PIC also acts as
the investment adviser for 14 other mutual funds, as subadviser to three
additional mutual funds and as adviser to institutional clients. As of December
31, 1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Aberdeen Fund Managers, Inc. ("Aberdeen") is the investment subadviser to the
Series and is located at One Financial Plaza, Suite 2210, NationsBank Tower,
Fort Lauderdale, Florida 33394. Aberdeen acts as subadviser to two other funds.
As of December 31, 1998, Aberdeen had $__ billion under management. Aberdeen has
been an investment adviser since 19__.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio and managing the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of the Series'
net assets at the following rates.

- ----------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- ----------------------------------------------------
Management 0.75% 0.70% 0.65%
Fee
- ----------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees of
$1,704,109. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was __%. The total advisory fee of 0.75% of the
aggregate net assets of the Series is greater than that for most mutual funds;
however, the Trustees have determined that it is comparable to fees charged by
other mutual funds whose investment objectives are similar to those of the
Series.

Please refer to the Statement of Additional Information for more detailed
informations about these and other investment techniques.

6
<PAGE>

PORTFOLIO MANAGEMENT
The investment and trading decisions for the Phoenix-Aberdeen International
Series are made by a team of the Adviser's equity investment professionals. The
Adviser has retained Aberdeen Fund Managers, Inc. for advice and assistance in
making investment and trading decisions. Aberdeen Fund Managers, Inc. does not
have discretionary authority to manage the International Series.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES' OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the fund if such modifications and conversions are not timely completed.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the fund and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Series'
financial performance for the past 5 years (or, if shorter, the period of the
Series' operations). Certain information reflects financial results for a single
share. The total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Series (assuming reinvestment of
all dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLC, whose report, along with the Fund's financial
statements, are included in (the SAI or annual report), which is available upon
request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 14.53 $ 14.52 $ 12.70 $ 11.85 $ 12.21
Income from investment operations
Net investment income.......................... 0.12(1) 0.12(1) 0.11(1) 0.12(1) 0.08(1)
Net realized and unrealized gain (loss)........ 3.94 1.61 2.25 1.02 (0.07)
---- ---- ---- ---- ------
Total from investment operations............. 4.06 1.73 2.36 1.14 0.01
---- ---- ---- ---- ----
Less distributions:
Dividends from net investment income.......... -- (0.22) (0.19) (0.04) (0.03)
Dividends from net realized gains............. (3.13) (1.50) (0.33) (0.25) (0.34)
Distributions from paid-in capital............ -- -- -- -- --
In excess of net investment income............ -- -- (0.02) -- --
------ ------ ------ ------ ------
Total distributions.......................... (3.13) (1.72) (0.54) (0.29) (0.37)
------ ------ ------ ------ ------
Change in net asset value....................... 0.93 0.01 1.82 0.85 (0.36)
---- ---- ---- ---- ------
Net asset value, end of period.................. $ 15.46 $ 14.53 $ 14.52 $ 12.70 $ 1.85
========= ========= ========== ========== ===========
Total Return.................................... 27.92% 12.04% 18.65% 9.59% 0.03%
Ratios/supplemental data:
Net assets, end of period (thousands)......... $241,915 $94,108 $172,668 $134,455 $134,627
Ratio to average net assets of:
Operating expenses............................ 0.98% 1.01% 1.04% 1.07% 1.10%
Net investment income......................... 0.72% 0.72% 0.80% 0.95% 0.64%
Portfolio turnover rate......................... 93% 184% 142% 249% 172%
</TABLE>

(1)Computed using average shares outstanding.

7
<PAGE>

PHOENIX-ABERDEEN NEW ASIA SERIES
- --------------------------------------------------------------------------------
INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
Phoenix-Aberdeen New Asia Series has an objective of long-term capital
appreciation from a diversified portfolio invested primarily in equity
securities of issuers located in at least three different countries located in
Asia, other than Japan. There is no guarantee that the Series will achieve its
objective.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] Under normal circumstances, the Series will invest at least 65% of its
total assets in common stocks, preferred stocks and convertible
securities of issuers organized and principally operating in Asia,
excluding Japan.

[diamond] The adviser will seek out equity securities of companies that it
believes have the potential to appreciate.

[diamond] The Series will invest in countries having more established markets in
region of Asian countries. The Asian countries ordinarily will consist
of three or more of the following:

o China o Hong Kong
o India o Indonesia
o South Korea o Malaysia
o Pakistan o Philippines
o Singapore o Sri Lanka
o Taiwan o Thailand

In determining distribution of investments among markets the adviser will
consider relative

[diamond] prospects for growth
[diamond] levels of inflation
[diamond] price levels

[diamond] government policies affecting business
[diamond] currency stability

The Series may invest in developing and emerging market countries.

PRINCIPAL RISKS
If you invest in this Series, you risk that you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value. Most of the Series'
investments will be in common stocks and other equity securities. Conditions
affecting the global or local economy, specific industries or companies in which
the Series invests can be worse than expected. As a result, the value of your
shares may decrease. Decreases in share value from day to day will be "paper"
losses unless you actually sell your shares. If your financial circumstances are
likely to require you to sell your shares at any particular time, rather than
holding them indefinitely, you run the risk that your sale of shares will occur
when share values have declined.

The Series may invest in companies with medium capitalizations. It also may
invest in small companies as well as large companies. Investments in companies
with small and medium capitalizations make the Series more volatile than fund's
which invest in companies with larger capitalizations. The smaller companies may
be affected to a greater extent than larger companies by changes in general
economic conditions and conditions in particular industries. Smaller companies
also may be relatively new and not have the same operating history and "track
record" as larger companies. This could make future performance of smaller
companies more difficult to predict.

The Series may invest in below investment grade securities (so called "junk
bonds"). Below investment grade securities present a greater risk that the
issuer will not be able to make interest or principal payments on time. If this
happens, the Series would lose income and could expect a decline in the market
value of the securities.

The Series will invest in companies in foreign countries. Political and
economic uncertainty as well as less public information about investments may
negatively impact the Series' portfolio. Some investments may be made in
currencies other than U.S. dollars that will fluctuate in value as a result of
changes in the currency exchange rate. Foreign markets and currencies may not
perform as well as U.S. markets.

The Series may invest in illiquid securities that cannot be sold quickly.
Illiquid securities may have a lower value than comparable securities that have
active markets for resale, and they can lose their value more quickly under
unfavorable conditions.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Aberdeen New Asia Series. The bar chart shows changes
in the Series' performance from year to year over the life of the Series.1 The
table below shows how the Series' average annual returns for one year and for
the life of the Series compare to those of a broad-based securities market
index. The Series' past performance is not necessarily an indication of how the
Series will perform in the future.

PHOENIX-ABERDEEN NEW ASIA SERIES
[graphic omitted]

Calendar Year Annual Return (%)
1996(2) 0.16
1997 -32.39
1998 -4.44

(1)The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would have
been less than those shown if such charges were deducted. During the period
shown in the chart above, the highest return for a quarter was __% (quarter
ending ______________) and the lowest return for a quarter was __% (quarter
ending ___________).

(2)From inception, September 17, 1996.

8
<PAGE>

- ---------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIOD ENDING 12/31/98) ONE YEAR LIFE OF THE FUND(1)
- ---------------------------------------------------------------------
Phoenix-Aberdeen New
Asia Series (4.46)% (17.33)%
- ----------------------------------------------------------------------
MSCI AC Asia Pacific Ex
Japan Index(2) (5.21)% (16.44)%
- ----------------------------------------------------------------------

(1)Since September 17, 1996.

(2)Morgan Stanley Capital International All Country Asia Pacific (excluding
Japan) Index is a market-value weighted average of the performance of
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.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees 1.00%
Distribution and Service (12b-1) Fees None
Other Expenses 1.00

-----------
TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 2.00%
=====

(1)The Series' investment adviser has agreed to reimburse through December 31,
1999 the Phoenix-Aberdeen New Asia Series' operating expenses other than
Management Fees and Distribution and Service Fees to the extent that such
expenses exceed 0.25% of the average net assets of the Series. Actual Total
Annual Fund Operating Expenses after expense reimbursement were 1.25%for the
year ending December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other mutual funds.

- ----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------
Phoenix-Aberdeen
New Asia Series $13 $40 $69 $151
- ----------------------------------------------------

Note: Your actual expenses would be lower than those shown in the tables
above since the expense levels used to calculate the figures shown do not
include the reimbursement of expenses over certain levels by the Series'
investment adviser.

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Series has an investment objective of long-term capital appreciation.
Distribution of investment income, such as dividends and interest, is incidental
in the selection of investments. There is no guarantee that the Series will
achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of primarily equity securities
of companies located in Asia (other than Japan). Under normal circumstances, the
Series intends to invest at least 65% of its total assets invested in the equity
securities of such companies.

The adviser selects securities of companies that meet certain fundamental
standards and that the adviser believes have the market potential for above
average market appreciation.

The Series will, under normal circumstances, invest at least 65% of its total
assets in a diversified portfolio of equity securities of issuers organized and
principally doing business in Asia, other than Japan, and whose principal
securities, such as common stock, are actively traded on recognized stock
exchanges of those countries.

A company is principally operating in Asia if

[diamond] at least 50% of revenues or profits are from Asian countries or

[diamond] at least 50% of their assets are located in Asian countries.

The Series ordinarily will be invested in three or more of the following
countries:

[diamond] China [diamond] Hong Kong
[diamond] India [diamond] Indonesia
[diamond] South Korea [diamond] Malaysia
[diamond] Pakistan [diamond] Philippines
[diamond] Singapore [diamond] Sri Lanka
[diamond] Taiwan [diamond] Thailand

If the adviser considers it appropriate, the Series also may invest in South
Pacific nations such as Australia and New Zealand.

<PAGE>

In determining the appropriate distribution of investments among various
countries and geographic regions, the Adviser ordinarily will consider the
following factors:

[diamond] prospects for relative economic growth among Asian countries;

[diamond] expected levels of inflation;

[diamond] relative price levels of the various capital markets;

[diamond] governmental policies influencing business conditions;

[diamond] the outlook for currency relationships; and

[diamond] the range of individual investment opportunities available to the
international investor.

The Series also may invest in convertible securities. A convertible security
is a bond, debenture, note, preferred stock or other security that may be
converted into or exchanged for a prescribed amount of common stock of the
issuer at predetermined time(s), price(s) or price formula. A convertible
security entitles the owner to receive interest paid or accrued on a debt
security or dividends paid on preferred stock until the security matures or is
converted to common stock. Convertible securities have several unique
investments characteristics, such as:

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

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

The Series may establish and maintain reserves of up to 100% of its assets
for temporary defensive purposes under abnormal market or economic conditions.
The Series' reserves may be invested in domestic as well as foreign short-term
money market instruments, including, but not limited to:

[diamond] government obligations;

[diamond] certificates of deposit;

[diamond] bankers' acceptances;

[diamond] time deposits;

[diamond] commercial paper;

[diamond] short-term corporate debt securities; and

[diamond] repurchase agreements.

When the Series' assets are held in cash or cash equivalents, it is not
investing in securities intended to meet the Series' investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

FOREIGN INVESTING

The Series invests in non-U.S. companies. Investing in the securities of
non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting standards;

[diamond] generally higher commission rates on foreign portfolio transactions;

[diamond] differences and inefficiencies in transaction settlement systems;

[diamond] the possibility of expropriation or confiscatory taxation;

[diamond] adverse changes in investment or exchange control regulations;

[diamond] political instability; and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility.

Additionally, dividends and interest payable on foreign securities may be
subject to foreign taxes withheld prior to receipt by the fund.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the SEC. Accordingly, there may be less publicly available
information about the securities and about the foreign company or government
issuing them than is available about a domestic company or government entity.

Moreover, individual foreign economies may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross national product, rate
of inflation, capital reinvestment, resource self-sufficiency and balance of
payment positions.

<PAGE>

FOREIGN CURRENCY
Portions of the Series' assets will be invested in securities denominated in
foreign currencies. Changes in foreign exchange rates will affect the value of
those securities denominated or quoted in currencies other than the U.S. dollar.
The forces of supply and demand in the foreign exchange markets determine
exchange rates and these forces are in turn affected by a range of economic,
political, financial, governmental and other factors. Exchange rate fluctuations
can affect the Series' net asset value (share price) and dividends either
positively or negatively depending upon whether foreign currencies are
appreciating or depreciating in value relative to the U.S. dollar. Exchange
rates fluctuate over both the long and short terms.

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

EMERGING OR DEVELOPING MARKETS
The Series will make investments in developing or emerging countries which
involve exposure to economic systems that are generally less diverse and mature
than in the United States, and to political systems that are less stable. In the
past, markets of developing countries have been more volatile than the markets
of developed countries.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES INVESTMENTS
The Year 2000 issue is the result of computer programs being written using
two rather than four digits to define the applicable year. There is the
possibility that some or all of a company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. If a company whose securities are held by the Series does
not "fix" its Year 2000 issue, it is possible that its operations and financial
results would be hurt. Also, the cost of modifying computer programs to become
Year 2000 compliant may hurt the financial performance and market price of
companies whose securities are held by the Series.

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix-Aberdeen International Advisors, LLC ("PAIA") is the investment
adviser to the Series and is located at 56 Prospect Street, Hartford, CT 06115.
PAIA also acts as the investment adviser to Phoenix-Aberdeen Series Fund. As of
December 31, 1998, PAIA had $______ in assets under management.

Subject to the direction of the fund's Board of Trustees, PAIA is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PAIA manages the Series' assets to conform with the
investment policies as described in this prospectus. The Series pays PAIA a
monthly investment management fee that is accrued daily against the value of the
Series' net assets at the rate of 1% annually.

During the Series' last fiscal year, the Series paid total management fees of
$93,715. The ratio of management fees to average net assets for the fiscal year
ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Aberdeen Fund Managers, Inc. ("Aberdeen") is the investment subadviser to the
Series and is located at One Financial Plaza, Suite 2210, NationsBank Tower,
Fort Lauderdale, Florida 33394. Aberdeen acts as subadviser to two other funds.
As of December 31, 1998, Aberdeen had $___ billion under management. Aberdeen
has been an investment adviser since 19__.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PAIA and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PAIA has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PAIA management believes that the majority of
these systems are already Year 2000 compliant. PAIA believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PAIA or its affiliates or
the Series if such modifications and conversions are not completed timely.

PAIA will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of

<PAGE>

being converted due to previous initiatives and it is expected that all core
systems will be remediated and tested by June 1999. The total cost to become
Year 2000 compliant is not an expense of the Series and is not expected to have
a material impact on the operating results of PAIA.

<TABLE>
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 9/17/96 TO
1998 1997 12/31/96
---- ---- --------
<S> <C> <C> <C>
Net asset value, beginning of period...................................... $ 6.44 $ 9.96 $ 10.00
Income from investment operations
Net investment income.................................................... 0.131(1)(4) 0.15(1) 0.05(1)
Net realized and unrealized gain (loss).................................. (0.41) (3.36) (0.04)
------ ------ ------
Total from investment operations....................................... (0.28) (3.21) 0.01
------ ------ ------
Less distributions:
Dividends from net investment income..................................... (0.03) (0.15) (0.05)
Dividends from net realized gains....................................... -- (0.01) --
In excess of net investment income...................................... -- (0.10) --
Tax return of capital.................................................... -- (0.05) --
----- ------ -----
Total distributions.................................................... (0.03) (0.31) (0.05)
------ ------ ------
Change in net asset value................................................. (0.31) (3.52) (0.04)
------ ------ ------
Net asset value, end of period............................................ $ 6.13 $ (6.44) $ 9.96
======= ======== =======
Total Return.............................................................. (4.44)% (32.39)% 0.16%(3)
Ratios/supplemental data:
Net assets, end of period (thousands).................................... $9,510 $ 10,017 $ 11,585
Ratio to average net assets of:
Operating expenses....................................................... 1.25% 1.25% 1.25%(2)
Net investment income.................................................... 2.09%(1) 1.63%(1) 2.40%(2)
Portfolio turnover rate................................................... 46% 27% 2%(3)
</TABLE>

(1)Includes reimbursement of operating expenses by investment adviser of $0.08,
$0.07 and $0.03 per share, respectively.
(2)Annualized.
(3)Not annualized.
(4)Computed using average shares outstanding.

12
<PAGE>

PHOENIX-DUFF & PHELPS REAL ESTATE
SECURITIES SERIES
- --------------------------------------------------------------------------------
INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
The Phoenix-Duff & Phelps Real Estate Securities Series has an investment
objective of capital appreciation and income with approximately equal emphasis.
There is no guarantee that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The Series intends to invest at least 75% of its total assets in
marketable securities of publicly traded real estate investment trusts
("REITs") and companies that are principally engaged in the real
estate industry.

[diamond] The Series may invest in common stock, rights or warrants to purchase
common stock, preferred stock and convertible debt.

[diamond] The Series may invest up to 85% of its total assets in

o marketable debt securities of companies principally engaged in the
real estate industry
o mortgage-backed securities
o short-term investments

[diamond] For defensive purposes the Series may invest up to 100% of its total
assets in short-term investments.

[diamond] The Series may invest in equity or debt securities of foreign
companies or governments.

[diamond] The Series may invest in repurchase agreements and engage in
"securities lending."

PRINCIPAL RISKS

[diamond] If you invest in this Series you risk that you may lose your
investment.

[diamond] The Series is "non-diversified"; there is no limit on the percentage
of Series assets that may be invested in the securities of any one
issuer.

[diamond] Value of Series assets will fluctuate in response to changes in
economic conditions within the real estate industry, including, among
other things, possible declines in real estate values, general and
local economic conditions, availability of mortgage funds and natural
disasters.

[diamond] Equity REITs may be affected by changes in the value of underlying
property owned by the REIT. Mortgage REITs may be affected by the
quality of any credit extended. All REITs are dependent on the quality
of management skills.

[diamond] REITs and companies principally engaged in the real estate industry
are subject the effects of to fluctuations in interest rates.

[diamond] Investing in REITs involve risks similar to those associated with
investing in small capitalization companies.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Duff & Phelps Real Estate Securities Series. The bar
chart shows changes in the Series' performance from year to year since its
inception.1 However, three calendar years is too short to reliably indicate the
full range of returns likely to be encountered. The table below shows how the
Series average annual returns for one year and for the life of the Series
compare to those of a broad-based securities market index. The Series' past
performance is not necessarily an indication of how the fund will perform in the
future.

PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
[graphic omitted]

Calendar Year Annual Return (%)
1996 33.09
1997 22.05
1998 -21.19

(1)The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted.During the
period shown in the chart above, the highest return for a quarter
_______% (quarter ending _________) and the lowest return for a quarter was
_______% (quarter ending ________).

- ----------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIOD ENDING ONE LIFE OF
12/31/98)(1) YEAR THE SERIES(2)
- ----------------------------------------------------
Phoenix-Duff & Phelps Real
Estate Securities Series (21.19)% 11.84%
- ----------------------------------------------------
NAREIT Equity Index(3)
(17.50)% 12.68%
- ----------------------------------------------------

(1)The Series' average annual returns in the table above do not reflect the
deduction of any separate account or contract charges.

(2)Since May 1, 1995.

(3)The National Association of Real Estate Investment Trusts (NAREIT) Index is
an unmanaged, commonly used indicator of REIT performance.

13
<PAGE>

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested
Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None
ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES ASSETS)
Management Fees .75%
Distribution and Service (12b-1) Fees None
Other Expenses 0.32%
---------

TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 1.07%
=====

(1)Duff & Phelps Investment Management Co. and/or PIC have agreed to reimburse
the Series operating expenses for the amount, if any, such operating expenses
other than the management fees for any fiscal year exceed 0.25% of the
average net assets of the Series. Actual Total Annual Series Operating
Expenses after expense reimbursement were 1.00% for the year ending
December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------

Phoenix-Duff &
Phelps Real
Estate $10 $32 $55 $122
Securities Series
- ---------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Duff & Phelps Real Estate Securities Series has an investment
objective of capital appreciation and income with approximately equal emphasis
on each. There is no guarantee that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series will invest in marketable securities of publicly traded real
estate investment trusts ("REITs") and companies that are principally engaged in
the real estate industry. Under normal circumstances, the Series intends to
invest at least 75% of the Series' total assets in these securities.

REITs are pooled investment vehicles which invest primarily in income
producing real estate or real estate related loans. Generally, REITs can be
classified as equity REITs, mortgage REITs or hybrid REITs.

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

[diamond] Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments.

[diamond] Hybrid REITs combine the characteristics of both equity REITs and
mortgage REITs.

The Series intends to emphasize investment in equity REITs.

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

The Series also may invest up to 25% of its total assets in

[diamond] marketable debt securities of companies principally engaged in the
real estate industry

[diamond] mortgage-backed securities such as mortgage pass-through certificates,
real estate mortgage investment conduit ("REMIC") certificates and
collateralized mortgage obligations ("CMOS")

[diamond] short-term investments

The Series invests in debt securities only if, at the date of investment,
they are rated within the four highest grades as determined by Moody's or by S&P
or, if not rated are judged by the Adviser to be of equivalent quality.
Securities rated at the lowest of the four grades are medium grade investment
obligations that may have speculative characteristics. Changes in economic
conditions or other circumstances are more likely to lead to a weakened ability
to make principal and interest payments in the case of such obligations than is
the case of higher grade securities. The Series is not required to dispose of
debt securities whose credit quality falls below investment grade. Unrated debt
securities may be less liquid then comparable rated debt securities and may
involve somewhat greater risk then rated debt securities.

For temporary defensive purposes (as when market conditions in real estate
securities are so extraordinarily adverse that the Adviser believes there are
extraordinary risks

<PAGE>

associated with investment in those securities), the Series may invest up 100%
of its total assets in short-term investments such as money market instruments
consisting of securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; repurchase agreements; certificates of deposit
and bankers' acceptances issued by banks or savings and loan associations having
net assets of at lease $500 million; high-grade commercial paper rated at time
of purchase in the top two categories by a national rating agency or determined
to be of comparable quality by the Adviser; and other long- and short-term
instruments which are rated A or higher by S&P or Moody's at the time of
purchase.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is capital appreciation and income. The value of your
shares is based on the market value of the Series' investments. However, the
value of the Series' investments that support your share value can decrease as
well as increase. If between the time you purchase shares and the time you sell
shares the value of the Series' investments decreases, you will lose money. The
value of the Series' investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in the value of many
or most investments. Particular industries can face poor market conditions for
their products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they may worsen prospects
for others. Share values also can decline if the specific companies selected for
fund investment fail to perform as the adviser expects, regardless of general
economic trends, industry trends, interest rates and other economic factors.

In the case of fixed income securities, the value of the security will be
directly affected by trends in interest rates and the overall condition of
credit markets. For example, in times of rising interest rates, the value of
these types of securities tends to decrease. When interest rates fall, the value
of these securities tends to rise. Income distribution also will affect the
Series' return. If the adviser misjudges the ability of the issuer of a
portfolio security to make scheduled interest or other income payments to the
Series, the Series' income available for distribution to shareholders may
decrease.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that your should note.

The Series is "non-diversified" under the federal securities laws. As a
non-diversified portfolio, there is no restriction on the percentage of assets
that may be invested at any time in the securities of any one issuer. To the
extent that the Series is in fact not well diversified, it may be more
vulnerable to adverse economic, political or regulatory developments affecting a
single issuer than would be the case if it were more broadly diversified.

Although the Series does not invest directly in real estate, it does invest
primarily in real estate securities and, as a result, the value of shares of the
Series will fluctuate in response to changes in economic conditions within the
real estate industry. Risks associated with the direct ownership of real estate
and with the real estate industry in general include:

[diamond] possible declines in the value of real estate;

[diamond] risks related to general and local economic conditions;

[diamond] possible lack of availability of mortgage funds;

[diamond] over-building;

[diamond] extended vacancies of properties;

[diamond] increases in competition, property taxes and operating expenses;

[diamond] changes in zoning laws;

[diamond] costs of clean-up of and liability for environmental problems;

[diamond] casualty or condemnation losses;

[diamond] uninsured damages from flood, earthquakes or other natural disasters;

[diamond] limitations on and variations in rents;

[diamond] dependency on property management skill;

[diamond] the appeal of properties to tenants; and

[diamond] changes in interest rates.

Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. Equity REITs
may be affected by changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are:

[diamond] dependent upon management skills,

[diamond] are not diversified, and

[diamond] are subject to the risks of financing projects.

The Series may invest in new or unseasoned REIT issuers and it may be
difficult or impossible for the Adviser to ascertain the value of the REIT's
underlying assets, management capabilities and growth prospects. REITs whose
underlying assets include long-term health care projects, such as nursing,
retirement and assisted living homes may be affected by federal regulations
concerning the health care industry.

REITs (especially mortgage REITs) are subject to interest rate risks. When
interest rated decline, the value of a REIT's investment in fixed rate
obligations usually rises. Conversely,

<PAGE>

when interest rates rise, the value of a REIT's investment in fixed rate
obligations can be expected to decline. On the other hand, since interest rates
on adjustable rate mortgage loans are reset periodically, yields on a REIT's
investment in such loans will gradually align themselves to current market
interest rates. The value of such investments fluctuate less dramatically in
response to interest rate fluctuations than would investments in fixed rate
obligations.

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

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
It is difficult to predict cash flows from mortgage-backed securities.
Payments of principal and interest on the underlying mortgages may be allocated
among classes in a variety of ways, and the inability to determine specific
amounts and timing of prepayments of the underlying loans make it difficult to
accurately predict cash flow. The variability of prepayments will tend to limit
price gains when interest rates drop and exaggerate price declines when interest
rates rise.

In the event of high prepayments, the Series may be required to invest these
proceeds at a lower interest rate, causing the Series to earn less than if the
prepayments had not occurred. Generally, prepayments will increase during a
period of falling interest rates.

GOVERNMENT SECURITIES
Obligations issued or guaranteed by federal, state, and municipal
governments, agencies, authorities and instrumentalities only guarantee
principal and interest will be timely paid to holders of the securities. The
entities do not guarantee that the value of Series shares will increase.

MANAGEMENT OF THE SERIES

THE ADVISER
Duff & Phelps Investment Management Co. ("DPIM") is the investment adviser
of the Series. DPIM is a subsidiary of Phoenix Investment Partners, Inc. ("PXP")
and is located at 55 East Monroe Street, Suite 3600, Chicago, Illinois 60603.
PXP is a NYSE traded company that provides investment management and related
services to institutional investors, corporations and individuals through
operating subsidiaries. DPIM also serves as investment adviser to the Core
Equity Fund of Phoenix Equity Series Fund, the Enhanced Reserves, Core Equity
and Real Estate Equity Securities Portfolios of Phoenix Duff & Phelps
Institutional Mutual Funds, the Real Estate Securities Portfolio of Phoenix
Multi-Portfolio Fund and three closed-end funds: Duff & Phelps Utilities Income
Inc., Duff & Phelps Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. As of December 31, 1998, DPIM had approximately
$______billion in assets under management.

Subject to the direction of the fund's Board of Trustees, DPIM is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. DPIM manages the Series' assets to conform with the
investment policies as described in this prospectus. The Series pays DPIM a
monthly investment management fee that is accrued daily against the value of the
Series' net assets at following rates.

------------------------------------------------------------
1ST $1+ BILLION THROUGH
BILLION $2 BILLION $2+BILLION
------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
------------------------------------------------------------

During the fund's last fiscal year, the Series paid total management fees of
$350,294. The ratio of management fees to average net assets for the fiscal year
ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Mr. Michael Schatt is responsible for managing the assets of the Phoenix-Duff
& Phelps Real Estate Securities Series. Mr. Schatt is employed as managing
director of PXP and is a vice president of the Fund, Phoenix Duff & Phelps
Institutional Mutual Funds, Phoenix Multi-Portfolio Fund, Phoenix Duff & Phelps
Utilities Income Inc. and DPIM. His current responsibilities include serving as
coportfolio manager of the Real Estate Securities Portfolio of Phoenix
Multi-Portfolio Fund, the Real Estate Equity Securities Portfolio of Phoenix
Duff & Phelps Institutional Mutual Funds, and managing the real estate
investment securities of Duff & Phelps Utilities Income Inc. Previously he
served as director of the Real Estate Advisory Practice for Coopers & Lybrand,
LLC, and has over 16 years experience in the real estate industry.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers, (DPIM and its affiliates) in support of the Series'
operations be assessed and brought into Year 2000 compliance. Based upon
preliminary assessments, DPIM has determined that it will be required to modify
or replace portions of their software so that its computer systems will properly
utilize dates beyond December 31, 1999. DPIM management believes that the

16
<PAGE>

majority of these systems are already Year 2000 compliant. DPIM believes that
with modifications to existing software and conversions to new software, the
Year 2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of DPIM or its affiliates or
the fund if such modifications and conversions are not completed timely.

DPIM will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of DPIM.

<TABLE>
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 5/1/95 TO
1998 1997 1996 12/31/95
---- ---- ---- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.......................... $ 16.38 $ 14.32 $ 11.33 $ 10.00
Income from investment operations
Net investment income........................................ 0.78(3) 0.50(3) 0.50(3) 0.33(3)
Net realized and unrealized gain............................. (4.20) 2.62 3.14 1.42
----- ----- ---- ----
Total from investment operations........................... (3.42) 3.12 3.64 1.75
------ ----- ---- ----
Less distributions:
Dividends from net investment income......................... (0.65) (0.48) (0.50) (0.33)
Dividends from net realized gains............................ (0.02) (0.58) (0.15) (0.06)
Tax return of capital........................................ (0.01) -- -- (0.03)
-----
Total distributions........................................ (0.68) (1.06) (0.65) (0.42)
----- ----- ------ ----
Change in net asset value..................................... 4.10 2.06 2.99 1.33
---- ----- ---- ----
Net asset value, end of period................................ $ 12.28 $ 16.38 $ 14.32 $ 11.33
========= ======= ======== =======
Total Return.................................................. (21.19)% 22.05% 33.09% 17.79%(2)
Ratios/supplemental data:
Net assets, end of period (thousands)........................ $ 36,408 $54,659 $ 22,710 $ 8,473
Ratio to average net assets of:
Operating expenses........................................... 1.00% 1.00% 1.00% 1.00%(1)
Net investment income........................................ 5.07% 3.59% 4.36% 4.80%(1)
Portfolio turnover rate....................................... 18% 41% 21% 10%(2)

</TABLE>
(1)Annualized.
(2)Not annualized.
(3)Includes reimbursement of operating expenses by investment adviser of
$0.002, $0.01, $0.05 and $0.07 per share, respectively.

17
<PAGE>

PHOENIX-ENGEMANN NIFTY FIFTY SERIES
- --------------------------------------------------------------------------------
INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
The Phoenix-Engemann Nifty Fifty Series has an investment objective of
long-term capital appreciation. There is no guarantee that the Series will
achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] The Series invests in approximately 50 different securities which, in
the opinion of the adviser, offer the best potential for long-term
growth of capital.

[diamond] At least 75% of the Series' total assets will be invested in common
stocks of high quality growth companies.

[diamond] Up to 25% of the Series' total assets may be invested in common stocks
of small corporations with rapidly growing earnings per share or
common stocks believed to be undervalued.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value. The Series' investments
will be in common stocks. Conditions affecting the overall economy, specific
industries or companies in which the Series invests can be worse than expected.
As a result, the value of your shares may decrease.

The Series will invest significantly securities issued by small companies.
Smaller companies, regardless of their location, may be affected to a greater
extent than larger companies by changes in general economic conditions and
conditions in particular industries. Smaller companies also may be relatively
new and not have the same operating history and "track record" as larger
companies. This could make future performance of smaller companies more
difficult to predict.

Since the Series contains securities of a limited number of companies, it may
be more sensitive to changes in the market value of a single issuer or industry
in its portfolio. Consequently, the net asset value per share of the
Phoenix-Engemann Nifty Fifty Series may fluctuate substantially. The Series may
not be appropriate for short-term investors.

PERFORMANCE TABLES
The Phoenix-Engemann Nifty Fifty Series has been in existence only since
March 2, 1998. The table below shows how the Series' average annual return since
inception compares to that of a broad-based securities market index. The Series'
past performance is not necessarily an indication of how the Series will perform
in the future.

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

TOTAL RETURN LIFE OF THE
(FOR THE PERIOD ENDING 12/31/98)(1) SERIES(2)
- ----------------------------------------------------
Phoenix-Engemann Nifty-Fifty
Series 26.26%
- ----------------------------------------------------
S&P 500 Index(3) 18.95%
- ----------------------------------------------------

(1)The Series' total return in the table above does not reflect the deduction of
any separate account or contract charges. The return would have been less
than those shown if such charges were deducted.

(2 Since March 2, 1998.

(3)The S&P 500 Index is an unmanaged commonly used measure of stock market
total return performance. The Index is not available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .90%
Distribution and Service (12b-1) Fees None
Other Expenses .45%

-----------
TOTAL ANNUAL SERIES' OPERATING EXPENSES (1) 1.35%
=====

(1)Phoenix Investment Council has agreed to reimburse the Series for the amount,
if any, by which the Series' operating expenses other than the management fee
for any fiscal year exceeds 0.15%. Actual Total Annual Series Operating
Expenses after expense reimbursement were 1.05% for the year ending December
31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- -----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------
Phoenix-Engemann
Nifty Fifty Series $110 $330 $580 $1,280
- -----------------------------------------------------

18
<PAGE>

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
Phoenix-Engemann Nifty Fifty Series has an investment objective to seek
long-term capital gain. There is no guarantee that the Series will achieve its
investment objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series will invest in approximately 50 different securities which the
adviser believes represent the best potential to achieve long-term growth of
capital. Dividend and interest income to be received from portfolio securities
is largely incidental.

Under normal market conditions, the Series will invest at least 75% of its
total assets in common stocks of high quality growth companies; most companies
will have at least $50 million in annual net income.

Companies whose common stock is purchased by the Series will be listed on the
NYSE or would satisfy the applicable listing requirements of the NYSE with
respect to demonstrated earning power, years in operation, number of publicly
held shares and net tangible assets.

Under normal conditions, up to 25% of the Series' total assets will be
invested in common stocks of corporations with rapidly growing earnings per
share or in common stocks of corporations that are believed to be undervalued in
the adviser's opinion. While some of these companies may be well-known and
established many will be unseasoned.

The Series may invest in preferred stock, warrants and convertible debt
obligations if the adviser believes these investments will help meet the Series'
objectives.

Please refer to the Statement of Additional Information for more detailed
information about these and other investments.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' primary focus is long-term capital appreciation. The adviser
intends to invest Series assets so that your shares increase in value. However,
the value of the Series' investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the Series' investments decreases you will lose money.
The value of the Series' investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in the value of many
or even most equity and fixed income investments. Particular industries can face
poor markets for their products or services so that companies engaged in those
businesses do not do as well as companies in other industries. Interest rate
changes may improve prospects for certain types of businesses and they many
worsen prospects for others. To the extent that the Series' investments are
affected by general economic declines, declines in industries, and interest rate
changes that negatively affect the companies in which the Series invests,
Series' share values may decline. Share values also can decline if the specific
companies selected for Series investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends, interest rates and other
economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies with a limited operating history or companies
in industries that have recently emerged due to cultural, economic, regulatory
or technological developments. Such developments can have significant positive
or negative effect on small capitalization companies and their stock
performance. Given the limited operating history and rapidly changing
fundamental prospects, investment returns from smaller capitalization companies
can be highly volatile. Smaller companies may find their ability to raise
capital impaired by their size or lack of operating history. Product lines are
often less diversified and subject to competitive threats. Smaller
capitalization stocks are subject to varying patterns of trading volume and may,
at times, be difficult to sell.

REDUCED DIVERSIFICATION
This Series will invest in a much smaller number of companies than the
average equity growth fund. Consequently, this Series may be more sensitive to
changes in the market value of a single issuer or of an industry held in its
portfolio. The net asset value of the Series may fluctuate substantially. This
Series may not be appropriate for short-term investors.

MANAGEMENT OF THE SERIES

THE ADVISERS
Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to the
Series and is located at 56 Prospect Street, Hartford, CT 06115. PIC also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
additional mutual funds and as adviser to institutional clients. As of December
31, 1998, PIC had $23.9 billion in assets

<PAGE>

under management. PIC has acted as an investment adviser for over sixty years.

Roger Engemann & Associates ("Engemann") serves as subadviser to the Nifty
Fifty Series. Engemann is a wholly owned subsidiary of Pasadena Capital
Corporation which, in turn, is a wholly-owned subsidiary of PXP. Engemann has
been engaged in the investment management business since 1969 and provides
investment counseling services to retirement plans, colleges, corporations,
trusts and individuals. Engemann also serves as investment adviser to the
Phoenix-Engemann Funds. As of December 31, 1998, Engemann had approximately $7.8
_____ in assets under management.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
domestic portion of the Series' portfolio. Engemann, as subadviser, is
responsible for the day-to-day management of the holdings of the Series. Both
PIC and Engemann manage the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of that
Series' net assets at the following rates.

- ----------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- ----------------------------------------------------------
Management 0.90% 0.80% 0.70%
Fee
- ----------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees of
$48,195. The ratio of management fees to average net assets for the fiscal year
ended December 31, 1998 was ______%. The total advisory fee of 0.90% of the
aggregate net assets of the fund is greater than that for most funds; however,
the Trustees have determined that it is comparable to fees charged by other
mutual funds whose investment objectives are similar to those of the Series.

PORTFOLIO MANAGEMENT

Mr. Roger Engemann, Mr. James E. Mair and Mr. John S. Tilson are primarily
responsible for the day-to-day management of the Series. Messrs. Engemann, Mair
and Tilson also manage the investment portfolio of Phoenix Aggressive Growth
Fund of Phoenix Series Fund. Each is a managing director, equities of PIC. Mr.
Engemann has been president of Engemann since its inception. Messrs. Mair and
Tilson are both executive vice presidents of Engemann, and both have been with
Engemann since 1983.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS

The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

20
<PAGE>

<TABLE>
<CAPTION>
FROM
INCEPTION
3/2/98 TO
12/31/98
--------
<S> <C>
Net asset value, beginning of period......................................................... $ 10.00
Income from investment operations
Net investment income....................................................................... 0.01(3)(4)
Net realized and unrealized gain (loss)..................................................... 2.62
------
Total from investment operations.......................................................... 2.63
------
Less distributions:
Dividends from net investment income........................................................ (0.01)
Dividends from net realized gains.......................................................... --
------
Total distributions....................................................................... (0.01)
------
Change in net asset value.................................................................... 2.62
----
Net asset value, end of period............................................................... $ 12.62
=========
Total Return(5).............................................................................. 26.26%(2)
Ratios/supplemental data:
Net assets, end of period (thousands)....................................................... $ 13,153
Ratio to average net assets of:
Operating expenses.......................................................................... 1.05%(1)
Net investment income....................................................................... 0.07%(1)
Portfolio turnover rate...................................................................... 90%(2)
</TABLE>

(1)Annualized.
(2)Not annualized.
(3)Includes reimbursement of operating expenses by investment adviser of $0.15
per share.
(4)Computed using average shares outstanding.

<PAGE>

PHOENIX-GOODWIN BALANCED SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Goodwin Balanced Series has investment objectives of reasonable
income, long-term capital growth and conservation of capital. There is no
guarantee that the Series will achieve its objectives.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The adviser will use four criteria to select investments for the
Series: risk, income, capital enhancement and protection of capital
value. The adviser will select securities believed to have potential
for the production of current income, with emphasis on securities that
also have the potential for capital enhancement. Fixed income
securities are selected using a multi-sector approach. The adviser may
adjust the mix of investments based upon financial market and economic
conditions.

[diamond] Under normal circumstances, the Series will invest at least 65% of its
total assets in common stocks of companies of any size and fixed
income securities.

[diamond] The Series may invest up to 35% of its net assets in high yield, high
risk fixed income securities (commonly referred to as "junk bonds").

[diamond] At least 25% of the Series' assets will be invested in fixed income
securities that are rated within the four highest rating categories.

[diamond] The Series may invest 25% of its total assets in foreign securities,
including emerging market securities and foreign government
securities.

[diamond] The Series may also invest in mortgage-backed and asset-backed
securities.

PRINCIPAL RISKS
If you invest in this Series, you risk losing your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value or provide reasonable
income. Most of the Series' investments will be in common stocks and fixed
income securities. Conditions affecting the overall economy, specific industries
or companies in which the Series invests and interest rate changes can be worse
than expected. As a result, the value of your shares may decrease. If the
adviser misjudges the return potential of fixed income securities, or the
ability of issuers to make scheduled principal and interest payments, the
Series' returns may be lower than prevailing returns, and the Series' income
available for distribution may be less than other Series. Neither the Series nor
the adviser can assure you that a particular level of income will be
consistently achieved.

This Series may invest in high risk, high yield fixed income securities (so
called "junk bonds"). Junk bonds present a greater risk that the issuer will not
be able to make interest or principal payments on time. If this happens, the
Series would lose income and could expect a decline in the market value of the
securities.

The Series may invest in foreign government securities and companies in
foreign countries, including some "emerging market" countries (countries with
markets that are not fully developed). Political and economic uncertainty as
well as less public information about investments may negatively impact the
Series' portfolio. Some investments may be made in currencies other than U.S.
dollars that will fluctuate in value as a result of changes in the currency
exchange rate. Foreign markets and currencies may not perform as well as U.S.
markets. Emerging market countries and companies doing business in emerging
markets may not have the same range of opportunities as countries and their
companies in developed nations. They also may have more obstacles to financial
success.

This Series may invest in unrated securities. Unrated securities may not
have as broad a market as rated, investment grade securities making them more
difficult to sell. This could cause the security to lose value.

The Series may invest in small companies as well as large companies. Smaller
companies may be affected to a greater extent than larger companies by changes
in general economic conditions and conditions in particular industries. Smaller
companies also may be relatively new and not have the same operating history and
"track record" as larger companies. This could make future performance of
smaller companies more difficult to predict.

This Series may invest in mortgage-backed and other asset-backed securities.
A portion of the cash flow from these securities may be from early payoff of
some of the underlying loans. In the event of very high prepayments, the Series
may be required to invest the proceeds at a lower interest rate, causing the
Series to earn less than if the prepayments had not occurred.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Goodwin Balanced Series. The bar chart shows changes in
the Series' annual

<PAGE>

performance from year to year since its inception.(1) The table below shows how
the Series' average annual returns for one and five years and for the life of
the Series compare to those of a broad-based securities market index. The
Series' past performance is not necessarily an indication of how the Series will
perform in the future.

PHOENIX-GOODWIN BALANCED SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1993 8.57
1994 -2.80
1995 23.28
1996 10.56
1997 17.93
1998 19.01

(1) The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted. During the
10-year period shown in the chart above, the highest return for a quarter
was __% (quarter ending ____________) and the lowest return for a quarter
was __% (quarter ending ________________).

- ----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
(FOR THE PERIOD ENDING ONE FIVE LIFE OF
12/31/98) YEAR YEARS THE SERIES(1)
- ----------------------------------------------------------------
Phoenix-Goodwin 19.01% 13.21% 12.66%
Balanced Series
- ----------------------------------------------------------------
Balanced Benchmark(2) 19.67% 16.29% 14.65%
- ----------------------------------------------------------------

(1) Since May 1, 1992.

(2) The Balanced Benchmark is a composite index made up of 55% of the S&P 500
Index return, 35% of the Lehman Brothers Aggregate Bond Index return and 10%
of the 90-day U.S. Treasury bills return and is produced by Frank Russell
Company.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None
ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .55%
Distribution and Service (12b-1) Fees None
Other Expenses .15%
-------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES .70%
====

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Phoenix-Goodwin
Balanced Series $7 $22 $39 $87
- ---------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Balanced Series has investment objectives of reasonable
income, long-term capital growth and conservation of capital. There is no
guarantee that the Series will achieve its objectives.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a portfolio of common stocks and fixed income
securities. Under normal circumstances the Series intends to invest at least 65%
of its total assets in these securities. At least 25% of assets will be invested
in fixed income securities that are rated within the four highest rating
categories. The Series may invest in foreign and domestic companies of all
sizes. Fixed income securities in which the Series may invest include, U.S. and
foreign government securities, corporate bonds, municipals, and mortgage- and
asset-backed securities. Credit ratings for fixed income securities are
established by nationally recognized statistical rating organizations. Please
see the Statement of Additional Information for a detailed list of rating
categories.

The adviser will use four criteria to select investments for the Series:
risk, income, capital enhancement, and protection of capital value. The adviser
will select securities believed to have potential for the production of current
income, with emphasis on securities that also have the potential for capital
enhancement. Fixed income securities are selected using a multi-sector approach.
Holdings are shifted into sectors believed by the adviser to be undervalued and
out of sectors determined by the adviser to be overvalued. The amount of Series
assets which may be invested in common stocks and fixed income securities is not
fixed. The adviser may adjust the mix of investments based upon financial market
and economic conditions.

Up to 35% of the Series' assets may be invested in "junk bonds." The actual
percentage of junk bonds held in the portfolio will be determined by the
adviser. If, in the advisor's opinion, market conditions warrant, the Series may
increase its holdings of junk bonds subject to the 35% limit. The price of

<PAGE>

junk bonds will generally decline when interest rates rise, and increase when
interest rates fall.

The Series may invest up to 25% of its net assets in securities of foreign
(non-U.S.) issuers. The Series may invest in a broad range of foreign
securities, including equity, debt and convertible securities and foreign
government securities. Issuers may be in established market countries and
emerging market countries.

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

Temporary Defensive Strategy. If the adviser believes that market conditions
are not favorable to the Series' principal strategies, the Series may hold on to
its cash or invest without limit in cash equivalents, such as U.S. government
securities and high grade commercial paper. When this happens, the Series may
not achieve its investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the Series.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is reasonable income, long-term capital growth, and
conservation of capital. The value of your shares is based on the market value
of the Series' investments. However, the value of the Series' investments that
support your share value can decrease as well as increase. If between the time
you purchase shares and the time you sell shares the value of the Series'
investments decreases, you will lose money. The value of the Series' investments
can decrease for a number of reasons. For example, changing economic conditions
may cause a decline in the value of many or most investments. Particular
industries can face poor market conditions for their products or services so
that companies engaged in those businesses do not perform as well as companies
in other industries. Interest rate changes may improve prospects for certain
types of businesses and they may worsen prospects for others. Share values also
can decline if the specific companies selected for fund investment fail to
perform as the adviser expects, regardless of general economic trends, industry
trends, interest rates and other economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

HIGH RISK-HIGH YIELD SECURITIES
The Series may invest in securities that are high risk, high yield
noninvestment-grade securities. Although these securities provide greater income
and opportunity for capital appreciation than investments in higher grade
securities, they also typically entail greater price volatility and principal
and interest risk. There is a greater risk that an issuer will not be able to
make principal and interest payments on time. Analysis of the creditworthiness
of issuers of below investment grade securities may be more complex than for
higher grade securities, making it more difficult for the adviser to accurately
predict risk.

FOREIGN INVESTING

The Series may invest in non-U.S. companies. Investing in the securities of
non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be

<PAGE>

subject to the reporting requirements of, the U.S. Securities and Exchange
Commission. Accordingly, there may be less publicly available information about
the securities and about the foreign company or government issuing them than is
available about a domestic company or government entity. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payment positions.

FOREIGN CURRENCY
Portions of the Series' assets may be invested in securities denominated in
foreign currencies. Changes in foreign exchange rates will affect the value of
those securities denominated or quoted in currencies other than the U.S. dollar.
The forces of supply and demand in the foreign exchange markets determine
exchange rates and these forces are in turn affected by a range of economic,
political, financial, governmental and other factors. Exchange rate fluctuations
can affect the Series' net asset value (share price) and dividends either
positively or negatively depending upon whether foreign currencies are
appreciating or depreciating in value relative to the U.S. dollar. Exchange
rates fluctuate over both the long and short terms.

Effective January 1, 1999, eleven European countries will begin converting
from their sovereign currency to the European Union common currency called the
"Euro." This conversion may expose the Series to certain risks, including the
reliability and timely reporting of pricing information of the Series' portfolio
holdings. In addition, one or more of the following may adversely affect
specific securities in the Series' portfolio:

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies in industries that have recently emerged due
to cultural, economic, regulatory or technological developments. Such
developments can have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the limited
operating history and rapidly changing fundamental prospects, investment returns
from smaller capitalization companies can be highly volatile. Smaller companies
may find their ability to raise capital impaired by their size or lack of
operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.

UNRATED SECURITIES
The Series may invest in unrated securities. Unrated securities may not be
lower in quality than rated securities, but due to their perceived risk, they
may not have as broad a market as rated securities. Analysis of unrated
securities is more complex than for rated securities, making it more difficult
for the adviser to accurately predict risk.

IMPACT OF THE YEAR 2000 ISSUE ON THE SERIES INVESTMENTS
The Year 2000 issue is the result of computer programs being written using
two rather than four digits to define the applicable year. There is the
possibility that some or all of a company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the Year 2000. If a company whose securities are held by the Series does
not "fix" its Year 2000 issue, it is possible that its operations and financial
results would be hurt. Also, the cost of modifying computer programs to become
Year 2000 compliant may hurt the financial performance and market price of
companies whose securities are held by the Series.

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") is the investment
adviser to the Series and is located at 56 Prospect Street, Hartford, CT 06115.
PIC also acts as the investment adviser for 14 other mutual funds, as subadviser
to three mutual funds and as adviser to institutional clients. As of December
31, 1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PIC manages the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of the Series'
net assets at the following rates.

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management 0.55% 0.50% 0.45%
Fee
- -----------------------------------------------------------------

<PAGE>

During the Series' last fiscal year, the Series paid total management fees
of $1,378,437. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Investment and trading decisions for the Series are made by a team of equity
professionals and a team of fixed income professionals.

IMPACT OF THE YEAR 2000 ISSUE ON THE SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period...................... $ 12.26 $ 12.06 $ 12.30 $ 10.53 $ 11.31
Income from investment operations
Net investment income................................... 0.33 0.38 0.36 0.40(2) 0.38(1,2)
Net realized and unrealized gain (loss)................. 1.94 1.73 0.89 2.02 (0.70)
---- ---- ---- ---- ------
Total from investment operations...................... 2.27 2.11 1.25 2.42 (0.32)
---- ---- ---- ---- ------
Less distributions:
Dividends from net investment income.................... (0.32) (0.40) (0.35) (0.40) (0.36)
Dividends from net realized gains....................... (0.47) (1.51) (1.14) (0.25) (0.10)
------ ------ ------ ------ ------
Total distributions................................... (0.79) (1.91) (1.49) (0.65) (0.46)
------ ------ ------ ------ ------
Change in net asset value................................. 1.48 0.20 (0.24) 1.77 (0.78)
---- ---- ------ ---- ------
Net asset value, end of period............................ $ 13.74 $ 12.26 $ 12.06 $ 12.30 $ 10.53
========== ========== ========== ========== ==========
Total Return ............................................. 19.01% 17.93% 10.56% 23.28% (2.80%)
Ratios/supplemental data:
Net assets, end of period (thousands)................... $280,056 $231,180 $204,285 $193,302 $161,105
Ratio to average net assets of:
Operating expenses...................................... 0.68% 0.71% 0.68% 0.65%(3) 0.69%
Net investment income................................... 2.58% 2.92% 2.93% 3.44% 3.44%
Portfolio turnover rate................................... 110% 181% 229% 223% 171%
</TABLE>

(1) Includes reimbursement of operating expenses by investment adviser of $0.001
per share.

(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.

<PAGE>

PHOENIX-GOODWIN GROWTH & INCOME SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Goodwin Growth & Income Series has an investment objective of
seeking dividend growth, current income and capital appreciation. There is no
guarantee that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The Series will invest in equity securities, primarily common stocks.
Under normal circumstances the Series will invest at least 65% of its
total assets in equity securities.

[diamond] Equity securities include common stock, preferred stock, securities
that can be converted into common stock or preferred stock
("convertible securities"), and warrants to purchase common stock or
preferred stock.

[diamond] The Series' adviser uses a quantitative value strategy to pursue the
Series' investment objective. The strategy concentrates on the 1,500
largest companies traded in the United States. This strategy seeks
securities of companies that are undervalued relative to the market in
general and that have improving fundamentals.

[diamond] The Series will invest only in the four highest rating categories of
convertible securities. These are commonly called "investment grade."

[diamond] The Series may engage in "securities lending" to increase its
investment returns.

[diamond] The Series may invest up to 20% of its assets in securities of foreign
(non-U.S.) issuers. Under normal circumstances, however, the Series
will not invest more than 10% of its assets in foreign securities.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series seeks to outperform the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500") in total return and dividend yield. The S&P 500 total
return can be negative. When this happens, the Series may outperform the S&P 500
but still have a negative return. In that case the value of your shares would
likely decline rather than increase. The adviser also may fail in its objective
to outperform the S&P 500. Most of the Series' investments will be in common
stocks and other equity investments. Conditions affecting the overall economy,
specific industries or companies in which the Series invests can be worse than
expected. As a result, the value of your shares may decrease. Increases in
interest rates affecting the global economy, particular industries or specific
companies can cause fixed income investments that the Series may own to decline
in value. This, too, can cause your share value to decrease.

The adviser intends to invest nearly all of the Series' assets in common
stocks and other securities, rather than holding significant amounts of cash and
short term investments. This can increase the Series' net asset value more
quickly if those investments increase in value. It can cause the Series' net
asset value to decrease more quickly if those investments decrease in value.

This Series may lend portfolio securities to financial institutions to
increase investment return. If the borrower is unwilling or unable to return the
borrowed securities when due the Series can suffer losses.

This Series may invest in companies in foreign countries. Political and
economic uncertainty as well as relatively less public information about
investments may negatively impact the Series' portfolio. Some investments may be
made in currencies other than U.S. dollars that will fluctuate in value as a
result of changes in the currency exchange rate. Foreign markets and currencies
may not perform as well as U.S. markets.

PERFORMANCE TABLES
The Phoenix-Goodwin Growth & Income Series has not had annual returns for
one full calendar year. The table below shows how the Series' total return for
the life of the Series compares to that of a broad-based securities market
index. The Series' past performance is not necessarily an indication of how the
Series will perform in the future.

- -----------------------------------------------------------------
TOTAL RETURN LIFE OF
(FOR THE PERIOD ENDING 12/31/98)(1) THE SERIES(2)
- -----------------------------------------------------------------
Phoenix-Seneca Growth and Income Series 20.45%
- -----------------------------------------------------------------
S&P 500 Index(3) 18.95%
- -----------------------------------------------------------------

(1) The Series' total return in the table above does not reflect the deduction
of any separate account or contract charges. The return would have been less
than those shown if such charges were deducted.

(2) Since March 2, 1998.

(3) The S&P 500 Index is an unmanaged commonly used measure of stock market
total return performance. The Index is not available for direct investment.

<PAGE>

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None Redemption Fee None
Exchange Fee None
ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees .70%
Distribution and Service (12b-1) Fees None
Other Expenses .40%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 1.10%
=====

(1) The Series' investment advisor has agreed to reimburse through December 31,
1999 the Phoenix Growth & Income Series' expenses other than Management Fees
and Distribution and Service Fees to the extent that such expenses exceed
0.15% of the average net assets of the Series. After such reimbursement the
Series' actual total annual operating expenses were .85% for the year ending
December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ----------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------
Phoenix-Goodwin
Growth & Income Series $657 $1,038 $1,443 $2,571
- ----------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Series has an investment objective of seeking dividend growth, current
income and capital appreciation. There is no guarantee that the Series will
achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of securities of primarily
domestic (U.S.) companies. The Series is designed to invest in equity
securities. Under normal circumstances,

[diamond] the Series intends to invest solely in equity securities and will
invest at least 65% of its total assets in equity securities,

[diamond] the Series will invest primarily in common stocks, and

[diamond] the Series intends to be "fully invested" and will attempt to limit
its holdings of cash and short-term investments to not more than 2% of
its assets.

The adviser uses a quantitative value strategy to pursue its investment
objective. Quantitative value involves selecting securities primarily from the
equity securities of the 1,500 largest companies traded in the United States,
based on market capitalization. The adviser seeks a desired balance of risk and
return potential, including a targeted yield exceeding the yield of the S&P 500.
This strategy seeks securities of companies that are undervalued relative to the
market in general and that have improving fundamentals. While the adviser's
strategy tends to concentrate its investment selections in larger issuers, the
Series may invest in securities of issuers of any size.

The Series also may invest in other equity securities, including preferred
stocks, preferred stocks convertible into common stocks, fixed income securities
convertible into common stocks, warrants and rights to purchase common stock.
Convertible securities have several unique investment characteristics, such as:

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

The Series will invest only in the four highest rating categories of
convertible securities, commonly called "investment grade" securities. If the
Series purchases an investment grade security that loses its investment grade
rating the Series is not required to sell the security. Ratings are established
by nationally recognized statistical rating agencies. Please see the Statement
of Additional Information for a detailed list of rating categories.

The Series may lend portfolio securities to broker-dealers and other
financial institutions to increase its investment returns. The total amount of
such lending can be as much as one-third of the Series' total assets. When the
Series lends securities in this fashion, the borrower returns the securities at
a pre-arranged time and pays some form of premium or other fee for the
transaction. The Series receives all dividends and other distributions made with
respect to the loaned securities. All securities loans are secured by other
marketable securities.

<PAGE>

The Series may invest up to 20% of its total assets in securities of foreign
(non-U.S.) issuers. However, under normal circumstances the Series will not
invest more than 10% of its total assets in securities of foreign issuers.

Temporary Defensive Strategy. If the adviser or subadviser believes that
market conditions are not favorable to the Series' principal strategies, the
Series may invest without limit in U.S. government securities and in money
market instruments. When this happens, the Series may not achieve its investment
objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is dividend growth, current income and capital
appreciation. The adviser intends to invest Series assets so that the Series'
total return and dividend yield exceed average total return and dividend yield
for companies included in the S&P 500. In this sense the Series seeks to
outperform the S&P 500. The S&P 500 can have negative returns, however. When
that happens, the Series may outperform the S&P 500 but still have negative
returns. The value of the Series' investments, as well as the value of stocks
included in the S&P 500, can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in value of many or even most
equity and fixed income investments. Particular industries can face poor markets
for their products or services so that companies engaged in those businesses do
not do as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they may worsen prospects
for others. To the extent that the Series' investments are affected by general
economic declines, declines in industries, and interest rate changes that
negatively affect the companies in which the Series invests, Series' share
values may decline. Share values also can decline, or can fail to perform as
well as stocks included in the S&P 500 if the specific companies the adviser
selects for the Series fail to perform as the adviser expects, regardless of
general economic trends, industry trends, interest rates and other economic
factors.

The adviser intends to keep cash and short-term investments below 2% of the
Series' assets under normal circumstances. By keeping the Series' assets "fully
invested" the adviser intends to maximize the Series' opportunity to increase
its net asset value. However, being "fully invested" in common stocks and other
securities the Series' net asset value will decrease if the value of those
investments decreases.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies with limited operating history or companies
in industries that have recently emerged due to cultural, economic, regulatory
or technological developments. Such developments can have a significant positive
or negative effect on small capitalization companies and their stock
performance. Given the limited operating history and rapidly changing
fundamental prospects, investment returns from smaller capitalization companies
can be highly volatile. Smaller companies may find their ability to raise
capital impaired by their size or lack of operating history. Product lines are
often less diversified and subject to competitive threats. Smaller
capitalization stocks are subject to varying patterns of trading volume and may,
at times, be difficult to sell.

SECURITIES LENDING
When the Series lends portfolio securities it runs the risk that the
borrower will be unable or unwilling to return the securities and the agreed fee
or premium. The value of the collateral taken as security for the securities
loaned may decline in value or may be difficult to convert to cash in the event
that the Series must rely on the collateral to recover the value of its
securities. In these circumstances the Series will suffer losses.

FOREIGN INVESTING

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the SEC. Accordingly, there

<PAGE>

may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

Effective January 1, 1999, eleven European countries began converting from
their sovereign currency to the European Union common currency called the
"Euro." This conversion may expose the Series to certain risks, including the
reliability and timely reporting of pricing information of the Series' portfolio
holdings. In addition, one of more of the following may adversely affect
specific securities in the Series' portfolio:

[diamond] known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] competitive implications of increased price transparency of European
Union markets (including labor markets) resulting from adoption of a
common currency and issuers' plans for pricing their own products and
services in the Euro;

[diamond] issuers' ability to make required information technology updates on a
timely basis, and costs associated with the conversion (including cost
of dual currency operations through January 1, 2002);

[diamond] currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] potential tax consequences.

The adviser does not expect to invest in any securities that may be
adversely effected by the conversion to the Euro.

MANAGEMENT OF THE SERIES

THE ADVISER

Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") is the investment
adviser to the Series and is located at 56 Prospect Street, Hartford, CT 06115.
PIC also acts as the investment adviser for 14 other mutual funds, as subadviser
to three mutual funds and as adviser to institutional clients. As of September
30, 1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PIC manages the Series' assets to conform with the investment
policies as described in this prospectus. The fund pays PIC a monthly investment
management fee that is accrued daily against the value of the Series' net assets
at the following rates.

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management 0.70% 0.65% 0.60%
Fee
- -----------------------------------------------------------------

The adviser has voluntarily agreed until December 31, 1999, to reimburse the
Series for the amount, if any, by which the Series' operating expenses other
than the management fee for any fiscal years exceed 0.15% of the average net
assets of the Series.

During the Series' last fiscal year, the fund paid total management fees of
$109,232. The ratio of management fees to average net assets for the fiscal year
ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Steven L. Colton serves as portfolio manager and as such is primarily
responsible for the day-to-day operation of the fund. Mr. Colton joined Phoenix
Investment Counsel, Inc. in June 1997. Previously, Mr. Colton was Portfolio
Manager for the American Century Income & Growth Fund ("ACIGF") from its
inception on December 17, 1990 through May 30, 1997. Dong Zhang serves as a
member of the team that manages Phoenix Growth & Income Fund. Mr. Zhang also was
a member of the portfolio management team for ACIGF from June 1996 through June
4, 1997.

<PAGE>

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS

The Trustees have directed management to ensure that the systems used by
service providers (PIC, Duff & Phelps and their affiliates) in support of the
Series' operations be assessed and brought into Year 2000 compliance. Based upon
preliminary assessments, PIC has determined that it will be required to modify
or replace portions of its software so that its computer systems will properly
utilize dates beyond December 31, 1999. PIC management believes that the
majority of these systems are already Year 2000 compliant. PIC believes that
with modifications to existing software and conversions to new software, the
Year 2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the fund if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
INCEPTION
3/2/98 TO
12/31/98
--------
<S> <C>
Net asset value, beginning of period............................................................................. $ 10.00
Income from investment operations
Net investment income.......................................................................................... 0.05(3)
Net realized and unrealized gain (loss)........................................................................ 1.99
----
Total from investment operations............................................................................. 2.04
----
Less distributions:
Dividends from net investment income........................................................................... (0.05)
Dividends from net realized gains.............................................................................. --
------
Total distributions.......................................................................................... (0.05)
------
Change in net asset value........................................................................................ 1.99
----
Net asset value, end of period................................................................................... $ 11.99
=========
Total Return..................................................................................................... 20.45%(2)
Ratios/supplemental data:
Net assets, end of period (thousands).......................................................................... $ 41,860
Ratio to average net assets of:
Operating expenses............................................................................................. 0.85%(1)
Net investment income.......................................................................................... 1.02%(1)
Portfolio turnover rate.......................................................................................... 81%(2)
</TABLE>

(1) Annualized.
(2) Not annualized.
(3) Includes reimbursement of operating expenses by investment adviser of $0.05
per share.

<PAGE>

PHOENIX-GOODWIN GROWTH SERIES
- -------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Growth Growth Series has an investment objective of intermediate
and long-term capital appreciation, with income as a secondary consideration.
There is no guarantee that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] Under normal circumstances, the Series will invest at least 65% of its
total assets in common stocks. The adviser invests in common stocks of
companies it believes have the potential to appreciate.

[diamond] The Series may invest any amount of its assets in any class or type of
security believed by the adviser to offer the potential for capital
appreciation over the intermediate and long term, including preferred
stocks and investment grade bonds. The Series also may invest up to
20% of its assets in convertible preferred stocks and convertible
debentures. Distribution of investment income, such as dividends and
interest, is incidental in the selection of investments.

[diamond] Diversification among market sectors will be a factor in selecting
securities for the Series. However, the adviser will put greater
emphasis on selecting securities it believes have good potential for
appreciation rather than upon wide diversification.

[diamond] The Series may invest 25% of its total assets in foreign securities,
including emerging market securities.

[diamond] The Series may invest in small companies as well as large companies.

PRINCIPAL RISKS
If you invest in this Series, you risk that you may lose your investment.

The Series may invest in companies in foreign countries, including some
"emerging market" countries (countries with markets that are not fully
developed). Political and economic uncertainty as well as less public
information about investments may negatively impact the Series' portfolio. No
investments may be made in currencies other than U.S. dollars. Foreign markets
may not perform as well as U.S. markets. Emerging market countries and
companies doing business in emerging markets may not have the same range of
opportunities as countries and their companies in developed nations. They also
may have more obstacles to financial success.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Goodwin Growth Series. The bar chart shows changes in
the Series' total return performance from year to year over a 10-year period.(1)
The table below shows how the Series' average annual returns for one, five and
ten years and for the life of the Series compare to those of a broad-based
securities market index. The Series' past performance is not necessarily an
indication of how the Series will perform in the future.

PHOENIX-GOODWIN GROWTH SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1989 36.06
1990 3.98
1991 43.83
1992 10.29
1993 19.69
1994 1.48
1995 30.85
1996 12.58
1997 21.07
1998 30.01

(1) The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if sales charges were deducted. During the
10-year period shown in the chart above, the highest return for a quarter
was __% (quarter ending ____________) and the lowest return for a quarter
was (__)% (quarter ending ________________).

- -------------------------------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
(FOR THE PERIOD ONE FIVE TEN LIFE OF
ENDING 12/31/98) YEAR YEARS YEARS THE FUND(1)
- -------------------------------------------------------------------
Phoenix-Goodwin
Growth Series 30.01% 18.67% 20.25% ___%
- -------------------------------------------------------------------
S&P 500 Stock Index(2) 28.76% 24.15% 19.22% ___%
- -------------------------------------------------------------------

(1) Since January 1, 1983.

(2) The S&P 500 Index is an unmanaged, commonly used measure of total return
stock market performance. The index is not available for direct investment.

32
<PAGE>

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .63%
Distribution and Service (12b-1) Fees None
Other Expenses1 .11%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES .74%
====
- ----------
(1)The Phoenix-Goodwin Growth Series investment adviser has agreed to reimburse
through the Growth Series' expenses other than Management Fees to the extent
such expenses exceed 15% of its total average net assets.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Phoenix-Goodwin
Growth Series $8 $24 $41 $92
- ---------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Growth Series has an investment objective of
intermediate and long-term capital appreciation, with income as a secondary
consideration. There is no guarantee that the fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests primarily in a portfolio of common stocks. Under normal
circumstances the Series intends to invest at least 65% of its total assets in
common stocks.

The adviser selects common stocks of companies that it believes have the
potential to appreciate over both the intermediate and long terms. However,
since common stocks do not always afford the greatest promise for capital
appreciation, the Series may invest any amount of its assets in any class or
type of security believed by the adviser to offer the potential for capital
appreciation over both the intermediate and long terms. Distribution of income,
such as dividends and interest, is incidental in the selection of investments
for the Series. The adviser will monitor portfolio securities to determine
whether they are contributing to the investment objective. Diversification among
market sectors will also be a factor in selecting securities for the Series.
However, the adviser will put greater emphasis on selecting securities which
have good potential for appreciation rather than upon wide diversification.

The Series also may invest up to 20% of its assets in convertible
securities. A convertible security is a bond, debenture, note, preferred stock
or other security that may be converted into or exchanged for a prescribed
amount of common stock of the issuer at predetermined time(s), price(s) or price
formula. Convertible securities have several unique investment characteristics,
such as:

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

Temporary Defensive Strategy. If the adviser believes that market conditions
are not favorable to the Series' principal strategies, the Series may invest in
fixed income securities with or without warrants or conversion features and it
may hold on to its cash or invest without limit in cash equivalents. When this
happens, the Series may not achieve its investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the Series.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is intermediate to long-term capital appreciation. The
adviser intends to invest the Series' assets so that your shares increase in
value. However, the value of the Series' investments that support your share
value can decrease as well as increase. If between the time you purchase shares
and the time you redeem shares the value of the Series' investments decreases,
you will lose money. The value of the Series' investments can decrease for a
number of reasons. For example, changing economic conditions may cause a decline
in

33
<PAGE>

value of many or most investments. Particular industries can face poor market
conditions for their products or services so that companies engaged in those
businesses do not perform as well as companies in other industries. Interest
rate changes may improve prospects for certain types of businesses and they may
worsen prospects for others. To the extent that the Series' investments are
affected by general economic declines, declines in industries, and interest
rate changes that negatively affect the companies in which the Series invests,
Series share values may decline. Share values also can decline if the specific
companies selected for investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends, interest rates and
other economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

FOREIGN INVESTING
The Series may invest in non-U.S. companies. Investing in the securities of
non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting
standards

[diamond] generally higher commission rates on foreign portfolio transactions

[diamond] differences and inefficiencies in transaction settlement systems

[diamond] the possibility of expropriation or confiscatory taxation

[diamond] adverse changes in investment or exchange control regulations

[diamond] political instability

[diamond] potential restrictions on the flow of international capital

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

EMERGING MARKET INVESTING
The Series may invest in companies located in emerging market countries and
regions. Investments in less-developed countries whose markets are still
emerging generally present risks in greater degree than those presented by
investment in foreign issuers based in countries with developed securities
markets and more advanced regulatory systems. Prior governmental approval of
foreign investments may be required under certain circumstances in some
developing countries, and the extent of foreign investment in domestic companies
may be subject to limitation in other developing countries. The charters of
individual companies in developing countries may impose limitations on foreign
ownership to prevent, among other concerns, violation of foreign investment
limitations.

The economies of developing countries generally are heavily dependent upon
international trade. And accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.

34
<PAGE>

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") is the investment
adviser to the fund and is located at 56 Prospect Street, Hartford, CT 06115.
PIC also acts as the investment adviser for 14 other mutual funds, as subadviser
to three mutual funds and as adviser to institutional clients. As of December
31, 1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PIC manages the fund's assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of the fund's
net assets at the following rates.

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management .70% .65% .60%
Fee
- -----------------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees
of $10,143,250. The ratio of management fees to average net assets for the
fiscal year ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Investment and trading decisions for the Series are made by a team of equity
investment professionals.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the fund if such modifications and conversions are not completed timely.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 19.16 $ 18.89 $ 18.13 $ 15.69 $ 16.59
Income from investment operations
Net investment income................................ 0.03 0.13 0.19 0.20 0.23(1, 3)
Net realized and unrealized gain..................... 5.65 3.70 2.10 4.60 0.02
---- ---- ---- ---- ----
Total from investment operations................... 5.68 3.83 2.29 4.80 0.25
---- ---- ---- ---- ----
Less distributions:
Dividends from net investment income................. (0.03) (0.13) (0.18) (0.17) (0.23)
Dividends from net realized gains.................... (0.88) (3.43) (1.35) (2.19) (0.92)
------ ------ ------ ------ ------
Total distributions................................. (0.91) (3.56) (1.53) (2.36) (1.15)
------ ------ ------ ------ ------
Change in net asset value.............................. 4.77 0.27 0.76 2.44 (0.90)
---- ---- ---- ---- ------
Net asset value, end of period......................... $ 23.93 $ 19.16 $ 18.89 $ 18.13 $ 15.69
======== ======== ======== ======== ========
Total Return........................................... 30.01% 21.07% 12.58% 30.85% 1.48%
Ratios/supplemental data:
Net assets, end of period (thousands)................ $1,876,296 $1,505,568 $1,235,395 $985,389 $616,221
Ratio to average net assets of:
Operating expenses................................... 0.69% 0.74% 0.72% 0.75%(2) 0.80%
Net investment income................................ 0.15% 0.64% 1.03% 1.12% 1.38%
Portfolio turnover rate................................ 102% 284% 167% 173% 185%
</TABLE>

(1) Includes reimbursement of operating expenses by investment adviser of $.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.

35
<PAGE>

PHOENIX-GOODWIN MONEY MARKET SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Goodwin Money Market Series has an investment objective of
seeking as high a level of current income as is consistent with the preservation
of capital and maintenance of liquidity. There is no guarantee that the Series
will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The Series seeks to maintain a stable $1.00 per share price.

[diamond] The Series will invest in a diversified portfolio of high quality
money market instruments with maturities of 397 days or less. The
average maturity of the Series' portfolio securities, based on their
dollar value, will not exceed 90 days.

[diamond] The Series will invest exclusively in the following instruments:

o Obligations issued or guaranteed by the U.S. government, its
agencies, authorities and instrumentalities
o Obligations issued by banks and savings and loan associations,
including dollar-denominated obligations of foreign branches of U.S.
banks and U.S. branches of foreign banks
o Dollar-denominated obligations guaranteed by banks or savings and
loan associations
o Federally insured obligations of other banks or savings and loan
associations
o Commercial paper
o Short-term corporate obligations
o Repurchase agreements

[diamond] At least 95% of the Series' total assets will be invested in
securities in the highest short-term rating category. Generally,
investments will be limited to securities in the two highest
short-term rating categories.

[diamond] The Series may invest more than 25% of its assets in the domestic
banking industry.

[diamond] The Series may forego purchasing securities with the highest available
yield due to considerations of liquidity and safety of principal.

[diamond] The adviser will buy, sell and trade securities in anticipation of, or
in response to, changing economic and money market conditions and
trends. This, and the short-term nature of money market instruments,
may result in a high portfolio turnover rate.

PRINCIPAL RISKS
An investment in the Series is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
Series seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Series.

The Series' focus is to optimize current income. The adviser intends to
select investments that provide higher returns relative to overall money market
investment returns while preserving capital and maintaining liquidity. If the
adviser misjudges the return potential or the ability of the issuer to make
scheduled income and principal payments, the Series' returns may be lower than
prevailing returns and the Series' income available for distribution may be
less. Neither the Series nor the adviser can assure you that a particular level
of income will be consistently achieved.

The adviser intends to select investments that optimize the Series' yield
while preserving capital and maintaining liquidity. Because market conditions
and interest rates determine portfolio security yields, neither the Series nor
the adviser can assure you that the Series' yield will remain constant or that a
particular level of income will be achieved.

A security's short-term investment rating may decline, increasing the
chances the issuer may not be able to make principal and interest payments on
time. This may reduce the Series' stream of income and decrease the Series'
yield.

Obligations issued or guaranteed by the U.S. government, its agencies,
authorities and instrumentalities, or guaranteed or insured by banks only
guarantee or insure principal and interest will be timely paid to holders of the
securities. The entities do not guarantee that the value of the Series' shares
will increase.

The Series may invest in repurchase agreements. If the seller of the
repurchase agreement does not repurchase the underlying securities, the Series
may incur a loss.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Money Market Series. The bar chart shows changes in the Series'
performance from year to year over a 10-year period.1

PHOENIX-GOODWIN MONEY MARKET SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1989 8.80
1990 7.90
1991 5.80
1992 3.50
1993 2.80
1994 3.77
1995 5.55
1996 4.98
1997 4.99
1998 5.09

(1) The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted. During the
10-year period shown in the chart above, the highest return for a quarter
was ____% (quarter ending ____________) and the lowest return for a quarter
was ____% (quarter ending ____________).

The Series' 7-day yield on December 31, 1998 was 4.05%.

36
<PAGE>

- -------------------------------------------------------------
AVERAGE ANNUAL TOTAL
RETURNS
(FOR THE PERIOD ONE FIVE TEN
ENDING 12/31/98)(1) YEAR YEARS YEARS
- -------------------------------------------------------------
Phoenix-Goodwin
Money Market Series
- -------------------------------------------------------------

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .40%
Distribution and Service (12b-1) Fees None
Other Expenses1 .15%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES .55%
====

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ----------------------------------------------------------------
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
- ----------------------------------------------------------------
Phoenix-Goodwin Money $6 $18 $31 $69
Market Series
- ----------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Money Market Series has an investment objective of
seeking as high a level of current income as is consistent with the preservation
of capital and maintenance of liquidity. There is no guarantee that the Series
will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The adviser will seek a high level of return relative to the market by
selecting securities for the Series' portfolio in anticipation of, or in
response to, changing economic conditions and money market conditions and
trends. The adviser may not purchase securities with the highest available yield
if the adviser believes that such an investment is inconsistent with the Series
objectives of preservation of capital and maintenance of liquidity.

The Series will invest in a diversified portfolio of high quality money
market instruments with maturities of 397 days or less. The average maturity of
the Series' portfolio securities, based on their dollar value, will not exceed
90 days.

The following money market instruments are the only investments the Series
will have in its portfolio at any time:

[diamond] Obligations issued or guaranteed by the U.S. government, its agencies,
authorities and instrumentalities, including U.S. Treasury
obligations, securities issued by

o the Government National Mortgage Association (GNMA),
o the Federal Home Loan Mortgage Corporation (FHLMC),
o the Federal National Mortgage Association (FNMA),
o Student Loan Marketing Association (SLMA),
o and other federal agencies;

[diamond] Obligations issued by banks and savings and loan associations,
including dollar-denominated obligations of foreign branches of U.S.
banks and U.S. branches of foreign banks, including certificates of
deposits and bankers acceptances;

[diamond] Dollar-denominated obligations guaranteed by banks or savings and loan
associations

[diamond] Federally insured obligations of other banks or savings and loan
associations

[diamond] Commercial paper

[diamond] Short-term corporate obligations

[diamond] Repurchase agreements

o A repurchase agreement is a transaction where the Series buys a
security from a seller and the seller agrees to buy that same
security back at an agreed upon date and price.
o The adviser will enter into repurchase agreements only with those
sellers that it deems creditworthy.

Investments in the Series generally will be limited to securities in the two
highest short-term rating categories with at least 95% of the Series' total
assets invested in securities in the highest rating category. Securities in the
highest rating category carry the smallest degree of investment risk.

The Series may invest more than 25% of its assets in the domestic banking
industry.

37
<PAGE>

The short-term nature of money market instruments and the Series' strategies
may result in a higher turnover rate as compared to other types of funds.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is to optimize current income. The adviser intends to
select investments that provide higher returns relative to overall money market
investment returns while preserving capital and maintaining liquidity. If the
adviser misjudges the return potential of the Series' investments, the Series'
returns may be lower than prevailing returns, and the Series' income available
for distribution to shareholders may be less. Similarly, if the adviser
misjudges the ability of the issuer of a portfolio security to make scheduled
interest or other income payments to the Series, the Series' income available
for distribution to shareholders may decrease. Neither the Series nor the
adviser can assure you that a particular level of income will be consistently
achieved.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

INVESTMENTS NOT GUARANTEED
Unlike cash held in a bank, investments in the Series are not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

NET ASSET VALUE LESS THAN $1.00
If the net asset value drops below $1.00 per share, you could lose money.

CREDIT RATING DECREASE
A security's short-term investment rating may decline, increasing the
chances the issuer may not be able to make principal and interest payments on
time. This may reduce the Series' stream of income and decrease the Series'
yield.

REPURCHASE AGREEMENTS
If a seller of a repurchase agreement defaults and does not repurchase the
underlying securities, the Series may incur a loss if the value of the
underlying securities declines. Disposition costs may be incurred in connection
with liquidating the underlying securities. If the seller enters into
bankruptcy, the Series may never receive the purchase price or it may be delayed
or limited.

MANAGEMENT OF THE SERIES

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PIC manages the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays Phoenix a monthly
investment management fee that is accrued daily against the value of the Series'
net assets at the following rates.

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management Fee .40% .35% .30%
- -----------------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees
of $564,665. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ____%.

PORTFOLIO MANAGEMENT
Julie Sapia is the portfolio manager of the Series and as such is primarily
responsible for the day-to-day management of its investments. Ms. Sapia has
served as Director, Money Market Trading of PIC since 1997 and from 1991 until
1997, served in various money market investment management positions of
increasing responsibility with PIC and Phoenix Home Life Mutual Insurance
Company. She also is Vice President of The Phoenix Series Fund, Phoenix Duff &
Phelps Institutional Mutual Funds and Phoenix-Aberdeen Series Fund and serves as
portfolio manager for certain series of each of those funds.

38
<PAGE>

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<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 0.50 0.50 0.56 0.38(1)
---- ---- ---- ---- -----
Total from investment operations......................... 0.50 0.50 0.50 0.56 0.38
---- ---- ---- ---- ----
Less distributions:
Dividends from net investment income...................... (0.50) (0.50) (0.50) (0.56) (0.38)
------ ------ ------ ------ ------
Total distributions...................................... (0.50) (0.50) (0.50) (0.56) (0.38)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
========= ========= ========= ========= =========
Total Return................................................ 5.09% 4.99% 4.98% 5.55% 3.77%
Ratios/supplemental data:
Net assets, end of period (thousands)..................... $196,811 $126,607 $131,361 $102,943 $ 94,586
Ratio to average net assets of:
Operating expenses........................................ 0.55% 0.55% 0.55% 0.53%(2) 0.55%
Net investment income..................................... 4.99% 5.07% 4.89% 5.57% 3.85%
</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.

39
<PAGE>

PHOENIX-GOODWIN MULTI-SECTOR
FIXED INCOME SERIES
- -------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Goodwin Multi-Sector Fixed Income Series has an investment
objective of seeking long-term total return by investing in a diversified
portfolio mixture of high yield (high risk) and high quality fixed income
securities. There is no guarantee that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] Under normal circumstances, the Series will invest at least 65% of its
total assets in various sectors of the fixed income securities market.

[diamond] Fixed income securities include: high yield (high risk) fixed income
securities (sometimes referred to as "junk bonds"), high quality fixed
income securities, preferred stock, convertible securities, debt
obligations, foreign debt obligations, certificates of deposit,
commercial paper, bankers' acceptances, and government obligations
issued or guaranteed by federal, state or municipal governments or
their agencies or instrumentalities.

[diamond] The Series may invest up to 35% of its total assets in high yield
(high risk) corporate fixed income securities.

[diamond] The Series may invest up to 50% of its total assets in foreign debt
obligations.

[diamond] The Series may invest in common stock and other equity securities.

PRINCIPAL RISKS
If you invest in this Series you may lose your investment.

The Series seeks to select investments providing an opportunity to enhance
the portfolio's overall total return and yield. Although the Series usually will
be invested in all sectors of the fixed income securities market, it may invest
any amount of its assets in any one sector (except for high yield (high risk)
and foreign debt obligations) and may choose not to invest in a sector in order
to achieve its investment objective. Conditions affecting the overall economy,
specific industries or companies in which the Series invests and interest rate
changes can be worse than expected. As a result, the value of your shares may
decline. If the adviser misjudges the return potential of fixed income
securities, or the ability of issuers to make scheduled principal and interest
payments, the Series' return may be lower than prevailing returns.

The Series may invest in high yield (high risk) fixed income securities (so
called "junk bonds"). Junk bonds present a greater risk that the issuer will not
be able to make interest or principal payments on time. If this happens, the
Series would lose income and could expect a decline in the market value of the
securities.

The Series may invest fixed income securities of foreign governments and
companies in foreign countries, including some "emerging market" countries
(countries with markets that are not fully developed). Political and economic
uncertainty as well as less public information about investments may negatively
impact the Series' portfolio. Some investments may be made in currencies other
than U.S. dollars that will fluctuate in value as a result of changes in the
currency exchange rate. Foreign markets and currencies may not perform as well
as U.S. markets. Emerging market countries and companies doing business in
emerging markets may not have the same range of opportunities as countries and
their companies in developed nations. They also may have more obstacles to
financial success.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Goodwin Multi-Sector Fixed Income Series. The bar chart
shows the changes in the Series' performance from year to year over a 10-year
period.1 The table below shows how the Series' average annual returns for one,
five and ten years and the life of the Series compare to those of a broad-based
market index. The Series' past performance is not necessarily an indication of
how the Series will perform in the future.

PHOENIX-GOODWIN MULTI-SECTOR SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1989 8.30
1990 5.14
1991 19.41
1992 10.03
1993 15.90
1994 -5.47
1995 23.54
1996 12.42
1997 10.93
1998 -4.02

(1) The Series' annual returns in the chart above do not reflect the deduction
of any separate account or contract charges. The returns would have been
less than those shown if such charges were deducted. During the 10-year
period shown in the chart above, the highest return for a quarter was __%
(quarter ending ____________) and the lowest return for a quarter was (__)%
(quarter ending ________________).

40
<PAGE>

- -----------------------------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
(FOR THE PERIOD ONE FIVE TEN LIFE OF
ENDING 12/31/98) YEAR YEARS YEARS THE FUND(1)
- -----------------------------------------------------------------
Phoenix-Goodwin
Multi-Sector Series (4.02)% 6.93% 9.26%
- -----------------------------------------------------------------
Lehman Brothers
Aggregate Bond
Index (2)
- -----------------------------------------------------------------
(1) Since January 1, 1983.

(2) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond performance. The index is not available for direct
investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM THE SERIES' ASSETS)
Management Fees .50%
Distribution and Service (12b-1) Fees None
Other Operating Expenses(1) .16%
-------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES .66%
====
- ----------
(1) Phoenix Investment Counsel, Inc. (PIC) has agreed to reimburse the Series
for the amount, if any, the Series' operating expenses, other than the
management fee for any fiscal year exceeds .15% of the average net assets
of the Series. After such reimbursement, the total annual operating
expenses of the Series were .65% for the year ending December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Phoenix-Goodwin
Multi-Sector Fixed $7 $21 $36 $81
Income Series
- ---------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Multi-Sector Fixed Income Series has an investment
objective of seeking long-term total return by investing in a diversified
portfolio mixture of high yield (high risk) and high quality fixed income
securities.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests primarily in a portfolio of fixed income securities.
Under normal circumstances the Series intends to invest at least 65% of its
total assets in various sectors of the fixed income securities market.

The adviser will invest in any of several sectors of the fixed income
securities market: high yield (high risk) fixed income securities (sometimes
referred to as "junk bonds"), high quality fixed income securities, preferred
stock, convertible securities, U.S. and foreign debt obligations, certificates
of deposit, commercial paper, bankers' acceptances, and government obligations
issued or guaranteed by federal, state or municipal governments or their
agencies or instrumentalities. The Series generally will be invested in each
market sector, but the Series may invest any amount of its assets (except for
the junk bond and foreign debt limits shown below) in any one sector and may
choose not to invest in certain sectors, in order to achieve its investment
objective.

Special limits on investing are:

[diamond] No more than 35% of total assets may be invested in high yield (high
risk) securities

[diamond] No more that 50% of total asset may be invested in foreign debt
obligations

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases

41
<PAGE>

The Series may invest up to 50% of its net assets in debt obligations of
foreign (non-U.S.) issuers. Issuers may be in established and emerging market
countries.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is long-term total return. The adviser intends to invest
Series assets so that your shares increase in value. However, the value of the
Series' investments that support your share value can decrease as well as
increase. If between the time you purchase shares and the time you sell shares,
the value of the Series' investments decreases, you will lose money. The value
of the Series' investments can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in value of many or most
investments. Particular industries can face poor market conditions for their
products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they may worsen prospects
for others. To the extent that the Series' investments are affected by general
economic declines, industry declines and interest rate changes that negatively
affect the companies in which the Series invests, Series share values may
decline. Share values also can decline if the specific companies selected for
investment fail to perform as the adviser expects, regardless of general
economic trends, industry trends, interest rates and other economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in the debt obligations of some smaller companies.
Companies with small capitalization are often companies in industries that have
recently emerged due to cultural, economic, regulatory or technological
developments. Such developments can have a significant positive or negative
effect on small capitalization companies and their ability to repay debt. Given
the limited operating history and rapidly changing fundamental prospects,
profits of smaller capitalization companies can be highly volatile. Smaller
companies may find their ability to raise capital impaired by their size or lack
of operating history. Product lines are often less diversified and subject to
competitive threats.

FOREIGN INVESTING
The Series may invest in debt obligations of non-U.S. companies and
governments. Investing in the securities of non-U.S. companies involves
special risks and considerations not typically associated with investing in
U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Foreign debt securities often trade with less frequency and volume than
domestic securities and therefore may exhibit greater price volatility.
Additionally, interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the Series.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

42
<PAGE>

dollar. Exchange rates fluctuate over both the long and short terms.

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

EMERGING MARKET INVESTING
The Series may invest in debt obligations of companies located in emerging
market countries and regions. Investments in less-developed countries whose
markets are still emerging generally present risks in greater degree than those
presented by investment in foreign issuers based in countries with developed
securities markets and more advanced regulatory systems. Prior governmental
approval of foreign investments may be required under certain circumstances in
some developing countries, and the extent of foreign investment in domestic
companies may be subject to limitation in other developing countries.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES INVESTMENTS
The Year 2000 issue is the result of computer programs being written using
two rather than four digits to define the applicable year. There is the
possibility that some or all of a company's computer programs that have
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. If a company whose securities are held by the series does
not "fix" its Year 2000 issue, it is possible that its operations and financial
results would be hurt. Also, the cost of modifying computer programs to become
Year 2000 compliant may hurt the financial performance and market price of
companies whose securities are held by the Series.

MANAGEMENT OF THE SERIES

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management 0.50% 0.45% 0.40%
Fee
- -----------------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees
of $993,926. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ___%.

PORTFOLIO MANAGEMENT
Investment and trading decisions for the Series are made by a team of fixed
income investment professionals.

43
<PAGE>

operations of PIC or its affiliates or the Series if such modifications and
conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- -- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 10.38 $ 10.34 $ 10.22 $ 8.98 $ 10.27
Income from investment operations
Net investment income (loss)........................ 0.77 0.75(1) 0.79(1) 0.83(1, 2) 0.72(1, 2)
Net realized and unrealized gain (loss)............. (1.17) 0.34 0.43 1.22 (1.28)
------ ---- ---- ---- ------
Total from investment operations.................. (0.40) 1.09 1.22 2.05 (0.56)
------ ---- ---- ---- ------
Less distributions
Dividends from net investment income................ (0.74) (0.77) (0.78) (0.81) (0.73)
Dividends from net realized gains................... (0.06) (0.28) (0.32) -- --
------ ------ ------ ---- ----
Total distributions................................ (0.80) (1.05) (1.10) (0.81) (0.73)
------ ------ ------ ------ ------
Change in net asset value............................. (1.20) (0.04) 0.12 1.24 (1.29)
------ ------ ---- ---- ------
Net asset value, end of period........................ $ 9.18 $ 10.38 $ 10.34 $ 10.22 $ 8.98
======= ======== ======== ======== =======
Total Return.......................................... (4.02)% 10.93% 12.42% 23.54% (5.47%)
Ratios/supplemental data:
Net assets, end of period (thousands)............... $187,363 $191,627 $145,044 $109,046 $ 74,686
Ratio to average net assets of:
Operating expenses.................................. 0.64% 0.65% 0.65% 0.65%(3) 0.66%
Net investment income............................... 7.61% 7.25% 7.80% 8.55% 7.62%
Portfolio turnover rate............................... 160% 151% 191% 147% 181%
</TABLE>

(1) Includes reimbursement of operating expenses by investment adviser of
$0.001, $0.002, $0.007 and $0.006 per share, respectively.

(2) Computed using average shares outstanding.

(3) Total return information does not reflect expenses that apply to the
separate accounts or related contracts; inclusion of these charges would
reduce total return for all periods shown.

44
<PAGE>

PHOENIX-GOODWIN STRATEGIC ALLOCATION SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Strategic Allocation Series has an investment objective
of high total return over an extended period of time consistent with prudent
investment risk. There is no guarantee that the Series will achieve its
investment objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The adviser will determine the allocation of investments among the
three market segments:

o stocks
o bonds
o money market

[diamond] The advisor will shift investment allocation among the three market
segments.

[diamond] The advisor will use active trading as a means of managing the
portfolio.

[diamond] Investment in the stock market segment will be made with the intent to
achieve superior total rate of return over an extended period of time
from both capital appreciation and current income.

[diamond] Investment in the bond segment will be made with the intent to achieve
as high a total rate of return as an annual basis as is considered
consistent with preservation of capital.

[diamond] Investment in the money market segment will be made with the intent to
achieve high current income, preservation of capital and liquidity.

[diamond] The Series may invest up to 5% of its total assets in "junk bonds."

PRINCIPAL RISKS
If you invest in this Series you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value and/or to provide current
income. Most of the Series investments will be in common stocks or debt
instruments. Conditions affecting the overall economy, specific industries or
companies in which the Series invests can be worse than expected. As a result,
the value of your shares may decrease. Dividend, interest and other
distributions also can decrease or be eliminated entirely.

The Series also may invest in small companies as well as larger companies.
Smaller companies, regardless of their location, may be affected to a greater
extent than larger companies by changes in general economic conditions and
conditions in particular industries. Smaller companies also may be relatively
new and not have the same operating history and "track record" as larger
companies. This could make future performance of smaller companies more
difficult to predict.

Implementation of the strategy requires that the adviser accurately
anticipate the market segment(s) to emphasize or avoid.

The Share may invest in financial futures contracts and options. The adviser
will make these investments primarily to try to minimize the risk of other
investments it makes for the Series. These investments may not protect the
Series from losses, they may decrease overall return, and they could, in unusual
circumstances, expose the Series to losses that could be unlimited.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Goodwin Strategic Allocation Series. The bar chart
shows changes in the Series' performance from year to year over a 10-year
period.1 The table below shows how the Series' average annual return for one,
five and ten years and the life of the Series compare to those of a broad-based
securities market index. The Series' past performance is not necessarily an
indication of how the Series will perform in the future.

PHOENIX-GOODWIN STRATEGIC ALLOCATION SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1989 19.88
1990 5.62
1991 29.44
1992 10.67
1993 11.02
1994 -1.45
1995 18.22
1996 9.05
1997 20.73
1998 20.79

(1) The Series' average total returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted. During the
10-year period shown in the chart above, the highest return for a quarter
was ____% (quarter ending __________) and the lowest return for a quarter
was ____% (quarter ending __________).

<PAGE>

- --------------------------------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
(FOR THE PERIOD ONE FIVE TEN LIFE OF
ENDING 12/31/98) YEAR YEARS YEARS THE SERIES(1)

- ---------------------------------------------------------------------
Phoenix-Goodwin
Strategic Allocation 20.79% 13.13% 14.06%
Series
- ---------------------------------------------------------------------
Balanced Benchmark(2) 19.67% 16.29% 14.46%
- ---------------------------------------------------------------------
Lipper Analytical
Services Flexible 16.55% 13.69% 13.02%
Portfolio Index(3)
- ---------------------------------------------------------------------
S&P 500 Index(4) 28.76% 24.15% 19.22%
- ---------------------------------------------------------------------

(1) Since September 17, 1984.

(2) 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.

(3) The Lipper Analytical Services Portfolio Index is an average of the largest
mutual funds within the flexible portfolio category.

(4) The S&P 500 Stock Index is an unmanaged, commonly used measure of stock
total return performance. The index is not available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees .58%
Distribution and Service (12b-1) Fees (c) None
Other Expenses .18%
-----------
TOTAL ANNUAL SERIES' OPERATING EXPENSES .71%
====

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS

- ------------------------------------------------------------------
Phoenix-Goodwin
Strategic Allocation $70 $230 $400 $880
Series
- ------------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Strategic Allocation Series has an investment objective
of as high a total rate of return as is considered consistent with prudent
investment risk. There is no guarantee that the Series will achieve its
investment objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series will invests in the common stock, bond and money market segments
in the proportion determined by the adviser.

The adviser may invest 0-100% in any one market segment.

The adviser will adjust the mix of investments among the three market
segments to capitalize on perceived variations in potential returns as economic
and financial conditions change.

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

In order to achieve the Series investment objective, the timing and amounts
of purchases and sales of particular securities and particular types of
securities (i.e., common stock, debt, money market) will be of significance. The
Series intends to use trading as a means of managing the portfolio to achieve
its investment objective. Trading is used primarily in anticipation of, or in
response to, market developments or to take advantage of yield disparities.

46
<PAGE>

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is high income, long term capital growth, and conservation
of capital. The value of your shares is based on the market value of the Series'
investments. However, the value of the Series' investments that support your
share value can decrease as well as increase. If between the time you purchase
shares and the time you sell shares the value of the Series' investments
decreases, you will lose money. The value of the Series' investments can
decrease for a number of reasons. For example, changing economic conditions may
cause a decline in the value of many or most investments. Particular industries
can face poor markets conditions for their products or services so that
companies engaged in those businesses do not perform as well as companies in
other industries. Interest rate changes may improve prospects for certain types
of businesses and they may worsen prospects for others. Share values also can
decline if the specific companies selected for Series investments fail to
perform as the adviser expects, regardless of general economic trends, industry
trends, interest rates and other economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

Implementation of this strategy requires the ability of the adviser to
accurately anticipate which market segment to emphasize or avoid. If the adviser
is wrong, significant losses can be experienced.

The Adviser will engage in trading when it believes that the trade, net of
transaction costs, will improve interest income of capital appreciation
potential, or will lessen capital loss potential. Whether these goals will be
achieved through trading depends on the Adviser's ability to evaluate particular
securities and anticipate relevant market factors, including interest rate
trends and variations. Such trading places a premium on the Adviser's ability to
obtain relevant information, evaluate it properly and take advantage of its
evaluations by completing transactions on a favorable basis. If the Adviser's
evaluations and expectations prove to be incorrect, the Series' income or
capital appreciation may be reduced and its capital losses may be increased.
Portfolio trading involves transaction costs.

HIGH RISK-HIGH YIELD SECURITIES
The Series may invest in securities that are high risks, high yield non
investment grade securities. Although these securities provide greater income
and opportunity for capital appreciation then investments in higher grade
securities, they also typically entail greater price volatility and principal
and interest risk. There is a greater risk that an issuer will not be able to
make principal and interest payments on time. Analysis of the creditworthiness
of issuers of below investments grade securities may be more complex then for
higher grade securities, making it more difficult for the adviser to accurately
predict risk.

FOREIGN INVESTING

The Series may invest in non-U.S., companies. Investing in the securities of
non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability,

[diamond] potential restrictions on the flow of international capital, and

[diamond] potential tax consequences.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies in industries that have recently emerged due
to cultural, economic, regulatory or technological developments. Such
developments can have a significant positive or negative effect on small
capitalization companies and their stock performance. Given the limited
operation history and rapidly changing fundamental prospects, investment returns
from smaller capitalization companies can be highly volatile. Smaller companies
may find their ability to raise capital impaired by their size or lack of
operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES INVESTMENTS
The Year 2000 issue is the result of computer programs being written using
two rather than four digits to define the

47
<PAGE>

applicable year. There is the possibility that some or all of a company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. If a company whose securities
are held by the Series does not "fix" its Year 2000 issue, it is possible that
its operations and financial results would be hurt. Also, the cost of modifying
computer programs to become Year 2000 compliant may hurt the financial
performance and market price of companies whose securities are held by the
Series.

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to the
Series and is located at 56 Prospect Street, Hartford, CT 06115. PIC also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
additional mutual funds and as adviser to institutional clients. As of December
31, 1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
Series' portfolio. PIC manages the Series' assets to conform with the investment
policies as described in this prospectus. The fund pays PIC a monthly investment
management fee that is accrued daily against the value of the fund's net assets
at the following rates.

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Management 0.60% 0.55% 0.50%
Fee
- -----------------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees
of $2,567,526. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ______%.

PORTFOLIO MANAGEMENT
Investment decisions for the Allocation Series are made by a team of equity
investment professionals and a team of fixed income investment professionals.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not timely completed.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

48
<PAGE>

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 14.12 $ 13.65 $ 13.63 $ 12.68 $ 13.71
Income from investment operations
Net investment income (loss).......................... 0.29 0.32 0.32 0.45 0.36(1, 3)
Net realized and unrealized gain (loss)............... 2.57 2.46 0.91 1.84 (0.56)
---- ---- ---- ---- ------
Total from investment operations.................... 2.86 2.78 1.23 2.29 (0.20)
---- ---- ---- ---- ------
Less distributions:
Dividends from net investment income.................. (0.28) (0.33) (0.31) (0.45) (0.37)
Dividends from net realized gains..................... (1.05) (1.98) (0.90) (0.89) (0.46)
------ ------ ------ ------ ------
Total distributions.................................. (1.33) (2.31) (1.21) (1.34) (0.83)
------ ------ ------ ------ ------
Change in net asset value............................... 1.53 0.47 0.02 0.95 (1.03)
---- ---- ---- ---- ------
Net asset value, end of period.......................... $ 15.65 $ 14.12 $ 13.65 $ 13.63 $ 12.68
======== ======== ======== ======== ========
Total Return............................................ 20.79% 20.73% 9.05% 18.22% (1.45%)
Ratios/supplemental data:
Net assets, end of period (thousands)................. $480,897 $429,002 $374,244 $353,838 $289,083
Ratio to average net assets of:
Operating expenses.................................... 0.68% 0.71% 0.70% 0.67%(2) 0.74%
Net investment income................................. 1.97% 2.09% 2.26% 3.28% 2.71%
Portfolio turnover rate................................. 139% 368% 287% 170% 220%
</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.

49
<PAGE>

PHOENIX-GOODWIN STRATEGIC THEME SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Strategic Theme Series has an investment objective of
long-term capital appreciation through investing in securities of companies
benefiting from long-term trends present in the United States and abroad. There
is no guarantee that the Series will achieve its investment objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The Series will invest primarily in common stocks of companies
believed by the adviser to have substantial potential for capital
growth by being well positioned to benefit from:

o cultural;
o demographic;
o regulatory;
o social; or
o technological
changes worldwide.

[diamond] The adviser will seek to identify those companies which, in addition
to being well positioned to benefit from identified themes, also:

o have good financial resources;
o provide satisfactory return on capital;
o has enhanced industry position; and
o has demonstrated superior management skills.

[diamond] Adviser will establish strategic themes (major changes affecting
markets for a prolonged periods of time) and tactical themes (focused,
short-term).

[diamond] The Series may invest in preferred stocks, investment grade bonds,
convertible preferred stocks and convertible debentures.

[diamond] The Series may invest up to 35% of its total assets in securities of
foreign issuers.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series may invest in securities issued by small companies. Smaller
companies, regardless of their location, may be affected to a greater extent
than larger companies by changes in general economic conditions and conditions
in particular industries. Smaller companies also may be relatively new and not
have the same operating history and "track record" as larger companies. This
could make future performance of smaller companies more difficult to predict.

The Series may invest in companies in foreign countries. Political and
economic uncertainty as well as relatively less public information about
investments may negatively impact the Series' portfolio. Some investments may be
made in currencies other than U.S. dollars that will fluctuate in value as a
result of changes in the currency exchange rate. Foreign markets and currencies
may not perform as well as U.S. markets.

Investing in a single economic theme can make the Series more vulnerable to
adverse economic, political or regulatory developments than a diversified
portfolio.

The adviser may not accurately anticipate emerging market trends, or may not
exploit such investment opportunities, or may not divest such investments at the
proper time.

PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of
investing in the Phoenix-Goodwin Strategic Theme Series. The bar chart shows
changes in the Series' performance from year to year over its life.(1) The table
below shows how the Series' average annual returns for one year and for the life
of the Series compare to those of a broad-based securities market index. The
Series' past performance is not necessarily an indication of how the Series will
perform in the future.

PHOENIX-GOODWIN STRATEGIC THEME SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1996 10.33
1997 17.16
1998 44.69

(1) The Series' average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted. During the
period shown in the chart above, the highest return for a quarter was __%
(quarter ending ______________) and the lowest return for a quarter was
__% (quarter ending ___________).

<PAGE>

- -----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS LIFE OF
(FOR THE PERIODS ENDING 12/31/98) ONE YEAR THE FUND(1)
- -----------------------------------------------------------------
Phoenix-Goodwin
Strategic Theme Series 44.69% 23.89%
- -----------------------------------------------------------------
S&P MidCap 400 Index(2) 19.11% 24.20%
- -----------------------------------------------------------------
S&P 500 Stock Index(3) 28.76% 28.59%
- -----------------------------------------------------------------

(1) Since January 29, 1996.

(2) The S&P MidCap 400 is an unmanaged index composed of companies with market
capitalizations between $300 million and $5 billion.

(3) The S&P 500 Index is an unmanaged, commonly used measure of stock total
return performance. The Index is not available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None
ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees .75%
Distribution and Service (12b-1) Fees None
Other Expenses .39%
-----------
TOTAL ANNUAL SERIES' OPERATING EXPENSES1 1.14%
=====

(1) Phoenix Investment Council has agreed to reimburse the Series for the
amount, if any, by which the Series' operating expenses other than the
management fee for any fiscal year exceeds 0.25%. Actual Total Annual
Series Operating Expenses after expense reimbursement were 1.00% for the
year ending December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Phoenix-Goodwin
Strategic Theme Series $100 $320 $550 $1,220
- ---------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Phoenix-Goodwin Strategic Theme Series has an investment objective to
seek long-term capital appreciation through investing in securities of companies
benefiting from long-term trends in the United States and abroad. There is no
guarantee that the Series will achieve its investment objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series will invest primarily in common stocks of companies the adviser
believes are particularly well situated to benefit from cultural, demographic,
regulatory, social or technological changes worldwide.

Examples of thematic investing would include investing in oil and gas
exploration companies during the "energy shortage' years of the late 1970's,
owning companies benefiting from the lower inflation trends during the early
1980's, investing in companies acquiring cellular franchises in the late 1980's
and technology companies during the 1990's.

The Series will not invest more than 25% of its total assets in any one
industry or group of related industries.

In determining when and whether to invest in particular industries, the
Adviser will establish strategic (major changes affecting markets for prolonged
periods) and tactical (focused, short-term) investment themes. Investment themes
shall generally reflect trends which appear likely to drive stocks with similar
technologies and products or which embody broad social, economic, political and
technological considerations; offer substantial appreciation potential; present
a visionary idea or creative solution; and exhibit some independence from
economic cycles. The Adviser may change investment themes once it has determined
that an investment theme has become saturated or fully exploited. The Adviser
may pursue one or more investment themes at any time.

The Adviser will seek to identify companies which, in addition to being
considered well positioned to benefit from investment themes identified, also
are believed to possess attributes such as good financial resources,
satisfactory return on capital, enhanced industry position and superior
management skills.

51
<PAGE>

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

The Series may invest up to 35% of its net assets in securities of foreign
(non-U.S.) issuers. The Series may invest in a broad range of foreign
securities, including equity, debt and convertible securities and foreign
government securities. Issuers may be in established market countries and
emerging market countries.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' primary focus is long-term capital appreciation. The adviser
intends to invest Series assets so that your shares increase in value. However,
the value of the Series' investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the Series' investments decreases you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in the value of many
or even most equity and fixed income investments. Particular industries can face
poor markets for their products or services so that companies engaged in those
businesses do not do as well as companies in other industries. Interest rate
changes may improve prospects for certain types of businesses and they may
worsen prospects for others. To the extent that the Series' investments are
affected by general economic declines, declines in industries, and interest rate
changes that negatively affect the companies in which the Series invests, Series
share values may decline. Share values also can decline if the specific
companies selected for Series investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends, interest rates and other
economic factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

To the extent the Series invests in a single investment theme, it may be
more vulnerable to adverse economic, political or regulatory developments than
would be the case if it invested in a broader spectrum of themes, or as compared
to a broadly diversified portfolio.

The successful implementation of the thematic investment strategy used by
the adviser is dependent on the adviser's ability to

[diamond] anticipate emerging market trends, and;

[diamond] exploit such investment opportunities and

[diamond] divest such securities at the right time.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies with a limited operating history or companies
in industries that have recently emerged due to cultural, economic, regulatory
or technological developments. Such developments can have a significant positive
or negative effect on small capitalization companies and their stock
performance. Given the limited operating history and rapidly changing
fundamental prospects, investment returns from smaller capitalization companies
can be highly volatile. Smaller companies may find their ability to raise
capital impaired by their size or lack of operating history. Product lines are
often less diversified and subject to competitive threats. Smaller
capitalization stocks are subject to varying patterns of trading volume and may,
at times, be difficult to sell.

FOREIGN INVESTING

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as relatively less public
information about investments may negatively impact the fund's portfolio.

Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additionally,
dividends and interest

52
<PAGE>

payable on foreign securities may be subject to foreign taxes withheld prior to
receipt by the Series.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

FOREIGN INVESTING
Portions of the Series' assets may be invested in securities denominated in
foreign currencies. Changes in foreign exchange rates will affect the value of
those securities denominated or quoted in currencies other than the U.S. dollar.
The forces of supply and demand in the foreign exchange markets determine
exchange rates and these forces are in turn affected by a range of economic,
political, financial, governmental and other factors. Exchange rate fluctuations
can affect the Series' net asset value (share price) and dividends either
positively or negatively depending upon whether foreign currencies are
appreciating or depreciating in value relative to the U.S. dollar. Exchange
rates fluctuate over both the short and long terms.

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

The Series may buy and write options and enter into futures contracts and
swap agreements primarily to minimize the risk of other investments it makes for
the Series. These investments may not protect the Series from losses, they may
decrease overall return, and they could, in unusual circumstances, expose the
Series to losses that could be unlimited.

If the adviser believes that market conditions are not favorable to the
Series' principal strategies the Series may invest without limit in U.S.
government securities and in money market instruments. When this happens, the
Series may not achieve its investment objective.

MANAGEMENT OF THE SERIES

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
domestic portion of the Series' portfolio. PIC manages the Series' assets to
conform with the investment policies as described in this prospectus. The Series
pays PIC a monthly investment management fee that is accrued daily against the
value of the Series' net assets at the following rates.

- ----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- ----------------------------------------------------------------
Management Fee .75% .70% .65%
- ----------------------------------------------------------------

During the Series' last fiscal year, the Series paid total management fees
of $426,848. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ___%.

53
<PAGE>

PORTFOLIO MANAGEMENT
Investment decisions for the Phoenix-Goodwin Strategic Theme Series are made
by a team of equity investment professionals.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not timely completed.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
------------------------ 1/29/96 TO
1998 1997 12/31/96
---- ---- --------
<S> <C> <C> <C>
Net asset value, beginning of period................................... $ 11.32 $ 10.98 $ 10.00
Income from investment operations
Net investment income (loss)......................................... 0.01 0.05(3) 0.04(3)
Net realized and unrealized gain (loss).............................. 5.03 1.82 0.99
---- ---- ----
Total from investment operations................................... 5.04 1.87 1.03
---- ---- ----
Less distributions
Dividends from net investment income................................. (0.01) (0.05) (0.04)
Dividends from net realized gains.................................... (0.95) (1.16) --
In excess of net realized gains...................................... -- (0.31) --
Tax return of capital................................................ -- (0.01) (0.01)
------ ------ ------
Total distributions................................................ (0.96) (1.53) (0.05)
------ ------ ------
Change in net asset value.............................................. 0.48 0.34 0.98
---- ---- ----
Net asset value, end of period......................................... $ 15.40 $ 11.32 $ 10.98
========= ========= =========
Total Return........................................................... 44.69% 17.16% 10.33%(2)
Ratios/supplemental data:
Net assets, end of period (thousands)................................ $ 75,098 $ 47,620 $ 25,972
Ratio to average net assets of:
Operating expenses................................................... 0.99% 1.00% 1.00%(1)
Net investment income................................................ (0.01)% 0.42% 0.64%(1)
Portfolio turnover rate................................................ 364% 642% 391%(2)
</TABLE>

(1) Annualized.
(2) Not annualized.
(3) Includes reimbursement of operating expenses by investment adviser of
$0.02 and $0.02 per share, respectively.

<PAGE>

PHOENIX-HOLLISTER VALUE EQUITY SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Hollister Value Equity Series' primary investment objective is
to seek long-term capital appreciation. The Series has a secondary investment
objective to seek current income. There is no guarantee that the Series will
achieve either objective.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] The Series will invest primarily in common stocks. Under normal
circumstances the Series will invest at least 65% of its total assets
in common stocks.

[diamond] The Series' adviser uses a quantitative value strategy that chooses
stocks that meet certain criteria relating to price, dividend yield
and the going concern value and debt levels of the issuers. For the
few hundred of the approximately 2,500 companies that survive this
screening, the adviser projects growth in earnings and dividends,
earnings momentum and relative undervaluation based on a dividend
discount model. The adviser develops target prices and value ranges,
and purchases the top-rated stocks. With certain exceptions the
adviser sells when a stock's target price is reached, when the issuer
or its industry suffer negative changes or when there is a change in
the investment criteria that prompted the initial purchase.

[diamond] The Series may invest in convertible securities. Convertible
securities investments will be limited to those in one of the four
highest rating categories of convertible securities. These are
commonly called "investment grade."

[diamond] The Series may obtain fixed interest loans from a bank in amounts up
to one-third the value of its net assets and invest the loan proceeds
in other assets.

[diamond] The Series may engage in "securities lending" to increase its
investment returns.

[diamond] The Series may invest up to 30% of its assets in securities of foreign
(non-U.S.) issuers.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value and to provide current
income. Most of the Series' investments will be in common stocks. Conditions
affecting the overall economy, specific industries or companies in which the
Series invests can be worse than expected. As a result, the value of your shares
may decrease. Dividend, interest and other distributions also can decrease or be
eliminated entirely.

The Series also may invest in small companies as well as large companies.
Smaller companies, regardless of their location, may be affected to a greater
extent than larger companies by changes in general economic conditions and
conditions in particular industries. Smaller companies also may be relatively
new and not have the same operating history and "track record" as larger
companies. This could make future performance of smaller companies more
difficult to predict.

The Series may borrow money to purchase additional securities. If the
additional securities increase in value, the net asset value would increase
sooner than it would have without borrowing. If these securities decrease in
value or do not increase enough to cover interest and other borrowing costs the
Series will suffer greater losses than it would if no borrowing took place.

The Series may invest in financial futures contracts and options. The
adviser will make these investments primarily to try to minimize the risk of
other investments it makes for the Series. These investments may not protect the
Series from losses, they may decrease overall return, and they could, in unusual
circumstances, expose the fund to losses that could be unlimited.

The Series may lend portfolio securities to financial institutions to
increase investment return. If the borrower is unwilling or unable to return the
borrowed securities when due, the Series can suffer losses.

PERFORMANCE TABLES
The Phoenix-Hollister Value Equity Series has been in existence only since
March 2, 1998. The table below shows how the Series' average annual return since
inception compares to that of a broad-based securities market index. The Series'
past performance is not necessarily an indication of how the Series will perform
in the future.

- -----------------------------------------------------------------
TOTAL RETURN
(FOR THE PERIOD ENDING 12/31/98)(1) LIFE OF THE SERIES(2)
- -----------------------------------------------------------------
Phoenix-Hollister
Value Equity Series 10.79%
- -----------------------------------------------------------------
S&P 500 Index(3) 18.95%
- -----------------------------------------------------------------

(1) The Series' total return in the table above does not reflect the deduction
of any separate account or contract charges. The return would have been less
than those shown if such charges were deducted.

(2) Since March 2, 1998.

(3) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index is not available for direct investment.

<PAGE>

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None
Exchange Fee None
ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees .70%
Distribution and Service (12b-1) Fees None
Other Expenses .40%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 1.10%
=====

(1) The Series' investment adviser has agreed to reimburse through December 31,
1999 the Phoenix Value Equity Series' expenses other than Management Fees
and Distribution and Service Fees to the extent that such expenses exceed
0.15%. Actual Total Annual Series' Operating Expenses after expense
reimbursement were 0.85% for the year ending December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------
Phoenix-Hollister
Value Equity Series $9 $27 $47 $105
- ---------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Series has a primary investment objectives to seek long-term capital
appreciation. The Series has a secondary investment objective to seek current
income. There is no guarantee that the Series will achieve either objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of securities of primarily
domestic (U.S.) companies. Generally the Series will invest in securities traded
on the New York Stock Exchange, the American Stock Exchange and in
over-the-counter markets. The Series is designed to invest in common stocks that
meet the adviser's quantitative standards that indicate above average financial
soundness and intrinsic value relative to price. Under normal circumstances the
Series will invest at least 65% of its total assets in common stocks.

The adviser applies a security selection process that chooses stocks that
meet certain investment criteria relating to price, dividend yield, going
concern value and debt levels. The adviser considers approximately 2,500
companies, but only a few hundred meet one or more of the adviser's criteria for
selection. For those that do, the adviser projects growth in earnings and
dividends, earnings momentum and undervaluation based on a dividend discount
model. From this analysis the adviser develops target prices and value ranges
and selects the top-rated securities for purchase. While the adviser's strategy
tends to concentrate its investment selections in larger issuers, the Series may
invest in securities of issuers of any size. Generally the adviser sells a
Series security when its target price is reached, when the company or its
industry suffers negative changes, or when there is a significant change in the
investment criteria that prompted the adviser to purchase the security. The
adviser may choose to continue to hold a security that it believes suitable for
the Series' objectives even if it no longer meets these criteria.

[diamond] higher yields than common stocks but lower yields than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

The Series will invest only in the four highest rating categories of
convertible securities, commonly called "investment grade" securities. If the
Series purchases an investment grade security that loses its investment grade
rating, the Series is not required to sell the security. Ratings are established
by nationally recognized statistical rating agencies. Please see the Statement
of Additional Information for a detailed list of rating categories.

The Series may increase ownership of securities by borrowing from banks at
fixed interest rates and investing the proceeds in stocks or other investments
that are consistent with these investment techniques. Purchasing additional
securities with borrowed funds can increase the net asset value of the Series
more quickly. Total borrowing cannot exceed

<PAGE>

33% of the Series' net assets, which means that after any borrowing the value of
the Series' assets (including the amount borrowed) must be at least three times
the total amount borrowed for investment purposes. If the value of the Series'
assets decreases so that the ratio becomes less than three to one, the Series
must reduce its outstanding loan within three business days to bring the ratio
back to three to one.

The Series may lend portfolio securities to broker-dealers and other
financial institutions to increase its investment returns. The total amount of
such lending can be as much as one-third of the Series' total assets. When the
Series lends securities in this fashion, the borrower returns the securities at
a prearranged time and pays some form of premium or other fee for the
transaction. The Series receives all dividends and other distributions made with
respect to the loaned securities. All securities loans are secured by other
marketable securities.

The Series may invest up to 30% of its total assets in securities of foreign
(non-U.S.) issuers.

Temporary Defensive Strategy. If the adviser believes that market conditions
are not favorable to the Series' principal strategies, the Series may invest
without limit in U.S. government securities and in money market instruments.
When this happens, the Series may not achieve its investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' primary focus is long-term capital appreciation. Its secondary
objective is current income. The adviser intends to invest Series' assets so
that your shares increase in value and so that your shares earn current income
through dividends, interest or other current distributions. However, the value
of the Series' investments that support your share value can decrease as well as
increase. If between the time you purchase shares and the time you sell shares
the value of the Series' investments decreases you will lose money. The value of
the Series' investments can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in the value of many or even
most equity and fixed income investments. Particular industries can face poor
markets for their products or services so that companies engaged in those
businesses do not do as well as companies in other industries. Interest rate
changes may improve prospects for certain types of businesses and they may
worsen prospects for others. To the extent that the Series' investments are
affected by general economic declines, declines in industries, and interest rate
changes that negatively affect the companies in which the Series invests,
Series' share values may decline. Share values also can decline if the specific
companies selected for Series' investment fail to perform as the adviser
expects, regardless of general economic trends, industry trends, interest rates
and other economic factors. When companies owned by the Series encounter
negative conditions they may be unable to continue to pay dividends or interest
at expected levels.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

SMALL MARKET CAPITALIZATION INVESTING
The Series may invest in some smaller companies. Companies with small
capitalization are often companies with a limited operating history or companies
in industries that have recently emerged due to cultural, economic, regulatory
or technological developments. Such developments can have a significant positive
or negative effect on small capitalization companies and their stock
performance. Given the limited operating history and rapidly changing
fundamental prospects, investment returns from smaller capitalization companies
can be highly volatile. Smaller companies may find their ability to raise
capital impaired by their size or lack of operating history. Product lines are
often less diversified and subject to competitive threats. Smaller
capitalization stocks are subject to varying patterns of trading volume and may,
at times, be difficult to sell.

LEVERAGE
If the Series borrows money to make additional investments it must pay
interest on the borrowed funds. The interest paid will decrease the Series' net
investment income. The adviser may borrow funds to make additional investments
expecting that those investments will increase in value sufficient to cover
borrowing costs and produce additional gain for the Series. If those investments
decrease in value or do not increase in value sufficient to cover borrowing
costs the Series will suffer greater losses than would take place if no
borrowing took place. In addition, because the Series must maintain a
three-to-one ratio of net assets to debt, in a declining market it may have to
sell securities under poor market conditions to maintain the required ratio.

[diamond] differences in accounting, auditing and financial reporting standards,

<PAGE>

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

[diamond] known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] issuers' ability to make required information technology updates on a
timely basis, and costs associated with the conversion (including
costs of dual currency operations through January 1, 2002);

[diamond] currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] potential tax consequences.

The adviser does not expect to invest in any securities that may be
adversely effected by the conversion to the Euro.

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") is the investment
adviser to the Series and is located at 56 Prospect Street, Hartford, CT 06115.
PIC also acts as the investment adviser for 14 mutual funds, as subadviser to
three mutual funds and as adviser to institutional clients. As of December 31,
1998, PIC had $23.9 billion in assets under management. PIC has acted as an
investment adviser for over sixty years.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the day-to-day management of the
portfolio. PIC manages the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of the Series'
net assets at the following rates.

<PAGE>

- -----------------------------------------------------------------
FIRST NEXT OVER
$250,000,000 $250,000,000 $500,000,000
- -----------------------------------------------------------------
Phoenix-
Hollister Value 0.70% 0.65% 0.60%
Equity Series
- -----------------------------------------------------------------

PIC has voluntarily agreed to assume total Series' operating expenses
excluding interest, taxes, brokerage fees, commissions and extraordinary
expenses, until December 31, 1999, to the extent that such expenses exceed 0.15%
of the Series' average annual net asset values.

During the Series' last fiscal year, the Series paid total management fees
of $30,941. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ___%. The advisory fee is greater than that for
most Series; however, the Trustees have determined that it is comparable to fees
charged by other Series whose investment objectives are similar to those of the
Series.

PORTFOLIO MANAGEMENT
Mr. Christian C. Bertelsen serves as Portfolio Manager of the Phoenix Value
Equity Series, and as such is primarily responsible for the day-to-day
management of the Series' investments. Mr. Bertelsen joined Phoenix Investment
Counsel, Inc. in July 1997. Previously, from 1996 to July 1997, Mr. Bertelsen
was employed by Dreman Value Advisors where he served as chief investment
officer and portfolio manager of the Kemper-Dreman Contrarian and Small Cap
Value Funds. From 1993 to 1996, Mr. Bertelsen was a Senior Vice President of
Eagle Asset Management where he managed private and institutional assets, as
well as the Heritage Value Equity Fund.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not timely completed.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
INCEPTION
3/2/98 TO
12/31/98
--------
<S> <C>
Net asset value, beginning of period............................................................................. $ 10.00
Income from investment operations
Net investment income.......................................................................................... 0.05(3)
Net realized and unrealized gain (loss)........................................................................ 1.03
----
Total from investment operations............................................................................. 1.08
----
Less distributions
Dividends from net investment income........................................................................... (0.05)
In excess of net investment income............................................................................. --
------
Total distributions.......................................................................................... (0.05)
------
Change in net asset value........................................................................................ 1.03
----
Net asset value, end of period................................................................................... $ 11.03
=========
Total Return..................................................................................................... 10.79%(2)
Ratios/supplemental data:
Net assets, end of period (thousands).......................................................................... $ 9,533
Ratio to average net assets of:
Operating expenses............................................................................................. 0.85%(1)
Net investment income.......................................................................................... 0.85%(1)
Portfolio turnover rate.......................................................................................... 77%(2)
</TABLE>

(1) Annualized.
(2) Not annualized.
(3) Includes reimbursement of operating expenses by investment adviser of $0.13
per share.

<PAGE>

PHOENIX-SENECA MID-CAP GROWTH SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVES
The Phoenix-Seneca Mid-Cap Growth Series has an investment objective of
capital appreciation. Distribution of investment income, such as dividends and
interest, is incidental in the selection of investments. There is no guarantee
that the Series will achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES

[diamond] The Series will invest in equity securities, primarily common stocks
of growth companies. Under normal circumstances the Series will invest
at least 65% of its total assets in companies with market
capitalizations between $500 million and $5 billion. The Series may at
times have significant investments in companies with higher or lower
market capitalizations.

[diamond] The adviser is responsible for managing the Series' investment program
and the general operation of the Series. The subadviser manages the
investments of the Series by selecting securities of companies that
meet certain fundamental standards and that the subadviser believes
will demonstrate greater long-term earnings growth than the average
company included in the S&P Midcap 400 Index.

[diamond] The subadviser may buy securities in anticipation of short-term price
gains.

[diamond] The Series may invest in preferred stocks, warrants, and debt
instruments, including bonds convertible into common stocks.

[diamond] The Series may invest up to 35% of its net assets in below investment
grade bonds (so called "junk bonds").

[diamond] The Series may lend up to one-third of its net assets at market value
to increase its investment returns.

[diamond] The Series may invest up to 20% of its assets in securities of foreign
(non-U.S.) issuers.

[diamond] The Series may invest up to 20% of its net assets in options and
futures contracts. The Series intends to invest in these securities
primarily for "hedging" purposes but may invest up to 5% of its net
assets in these securities as an investment unrelated to hedging
purposes.

[diamond] The Series may invest up to 15% of its assets in securities that are
not liquid, such as private placements and repurchase agreements that
have maturities of more than seven days.

[diamond] Temporary Defensive Strategy. If the subadviser believes that market
conditions are not favorable to the Series' principal strategies, the
Series may invest without limit in cash and cash equivalents.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series will seek to increase the value of your shares by investing in
securities the subadviser expects to increase in value. Most of the Series'
investments will be in common stocks. Conditions affecting the overall economy,
specific industries or companies in which the Series invests can be worse than
expected. As a result, the value of your shares may decrease. Decreases in share
value from day to day will be "paper" losses unless you actually sell your
shares. If your financial circumstances are likely to require you to sell your
shares at any particular time, rather than holding them indefinitely, you run
the risk that your sale of shares will occur when share values have declined.

The Series may buy securities in anticipation of short-term price gains.
Gains depend on the ability of the subadviser to predict correctly the increase
to securities prices. Securities prices may not increase as anticipated. This
may increase the Series' overall trading volume especially if prices do not rise
as expected. Frequent and active trading may increase transaction costs for the
Series.

The Series' investment focus is on companies with medium capitalizations. It
also may invest in small companies as well as large companies. Investments in
companies with small and medium capitalizations make the Series more volatile
than Series which invest in companies with larger capitalizations. The smaller
companies may be affected to a greater extent than larger companies by changes
in general economic conditions and conditions in particular industries. Smaller
companies also may be relatively new and not have the same operating history and
"track record" as larger companies. This could make future performance of
smaller companies more difficult to predict.

The Series may invest in companies in foreign countries. Political and
economic uncertainty as well as less public information about investments may
negatively impact the Series' portfolio. Some investments may be made in
currencies other than U.S. dollars that will fluctuate in value as a result of
changes in the currency exchange rate. Foreign markets and currencies may not
perform as well as U.S. markets.

The Series may buy and write options and enter into futures contracts and
swap agreements primarily to minimize the risk of other investments it makes for
the Series. These

<PAGE>

investments may not protect the Series from losses, they may decrease overall
return, and they could, in unusual circumstances, expose the Series to losses
that could be unlimited.

PERFORMANCE TABLES
The table below shows how the Series' total return for the life of the
Series compares to that of a broad-based securities market index. The Series'
past performance is not necessarily an indication of how the Series will perform
in the future.

- ----------------------------------------------------------------
TOTAL RETURN
(FOR THE PERIOD ENDING 12/31/98)(1) LIFE OF THE SERIES(2)
- ----------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth
Series
- ----------------------------------------------------------------
S&P Midcap 400 Index(3)
- ----------------------------------------------------------------

(1) The Series' total return in the table above does not reflect the deduction
of any separate account or contract charge. The return would have been less
than that shown if such charges were deducted.

(2) Since March 2, 1998.

(3) The S&P Midcap 400 Index is an unmanaged, commonly used measure of total
return performance of mid-capitalization companies. The Index is not
available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees .80%
Distribution and Service (12b-1) Fees None
Other Expenses .88%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES(1,2) 1.68%
=====

(1) The Series' investment adviser has agreed to reimburse through December 31,
1999 the Seneca Mid-Cap Growth Series' operating expenses other than
Management Fees and Distribution and Service Fees to the extent that such
expenses exceed 0.25%. Actual Total Annual Series' Operating Expenses after
expense reimbursement were 1.05% for the year ending December 31, 1998.

(2) The shares have been offered only since March 2, 1998. The percentages
indicated are estimates before expense reimbursement; actual expenses may be
more or less than the amounts shown.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------
Phoenix-Seneca Mid-
Cap Growth Series
- ------------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
The Series has an investment objectives of capital appreciation.
Distribution of investment income, such as dividends and interest, is incidental
in the selection of investments. There is no guarantee that the Series will
achieve its objective.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of securities of primarily
domestic (U.S.) companies. Under normal circumstances the Series intends to
invest at least 65% of its total assets in companies with market capitalizations
between $500 million and $5 billion.

The Series contracts with an adviser, Phoenix Investment Counsel, Inc. to
manage the Series' investment program and be responsible for the general
operation of the Series, and a subadviser, Seneca Capital Management LLC to
manage the investments of the Series. The subadviser selects securities of
companies that meet certain fundamental standards and that the subadviser
believes have the market potential for above average market appreciation. In
evaluating companies' potential for market appreciation, the subadviser seeks
companies that it believes will demonstrate greater long-term earnings growth
than the average company included in the S&P Midcap 400 Index. The strategy is
based on the subadviser's view that growth in a companies' earnings will
correlate with growth in the price of its stock.

The subadviser seeks to identify companies that have the most attractive
earnings prospects and favorable valuations, regardless of the size of the
company. Generally, however, a portion of the Series' portfolio will be invested
in large, well-known companies that have established histories of profitability
and/or dividend payment.

<PAGE>

Although the Series stresses long-term earnings growth potential, the
subadviser may buy securities in anticipation of short-term price gains.

Debt instruments, including investment grade and below investment grade
bonds ("junk bonds") and bonds convertible into common stocks, also may be a
part of the Series portfolio. Below investment grade securities present a
greater risk that the issuer will not be able to make interest or principal
payments on time. If this happens, the Series would lose income and could expect
a decline in the market value of the securities.

The Series may invest up to 20% of its total assets in securities of foreign
(non-U.S.) issuers. Foreign investment will be primarily through American
Depository Receipts (ADRs).

The Series may lend portfolio securities to broker-dealers and other
financial institutions to increase its investment returns. The total amount of
such lending can be as much as one-third of the Series' total assets. When the
Series lends securities in this fashion, the borrower returns the securities at
a prearranged time and pays some form of premium or other fee for the
transaction. The Series receives all dividends and other distributions made with
respect to the loaned securities. All securities loans are secured by other
marketable securities.

The Series intends to invest in financial futures contracts, options and
swap agreements only for hedging purposes. However, the Series can invest in
these transactions even if they are not purchased for hedging purposes, that is,
they are purchased as an investment in their own right.

The Series may invest up to 15% of its net assets in securities that are not
liquid. The Series considers investments that the adviser is not likely to be
able to sell within seven business days as not liquid. These securities can
include repurchase agreements, with maturities more than seven days and private
placements. Repurchase agreements are contracts under which the Series will buy
securities that are not sold to investors through a public offering but instead
are sold in direct, private transactions.

Note: If the subadviser determines that market conditions are not favorable
to the types of investments the adviser ordinarily intends to hold, the Series
may invest without limitation in any combination of high quality money market
securities and repurchase agreements. In such instances, the Series may not
achieve its stated investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the Series.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is long-term earnings growth. The subadviser intends to
invest Series' assets so that your shares increase in value. However, the value
of the Series' investments that support your share value can decrease as well as
increase. If between the time you purchase shares and the time you sell shares
the value of the Series' investments decreases, you will lose money. The value
of the Series' investments can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in value of many or most
investments. Particular industries can face poor market conditions for their
products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they many worsen prospects
for others. To the extent that the Series' investments are affected by general
economic declines, declines in industries, and interest rate changes that
negatively affect the companies in which the Series invests, Series' share
values may decline. Share values also can decline if the specific companies
selected for Series' investment fail to perform as the adviser expects,
regardless of general economic trends, industry trends, interest rates and other
economic factors, Finally, decreases in share values from day to day will be
"paper" losses unless you actually sell your shares. If your financial
circumstances are likely to require you to sell your shares at any particular
time, rather than holding them indefinitely, you run the risk that your sale of
shares will occur when share values have declined. If between the time you
purchase shares and the time you sell shares the value of the Series'
investments decreases you will lose money.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

ANTICIPATING SHORT-TERM PRICE GAINS
The adviser may buy securities that it anticipates will rise in price over a
short period of time. If the securities do not perform as expected, gains will
not be as high as anticipated. Moreover, the adviser buys these securities with
the expectation that they will be sold after a short period of time. Each time a
security is bought or sold, the Series incurs certain costs associated with the
transaction. The more transactions, the higher the overall cost to the Series.

<PAGE>

operating history. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.

BELOW INVESTMENT GRADE SECURITIES
The Series may invest in securities that are below investment grade.
Although these securities provide greater income and opportunity for capital
appreciation than investments in higher grade securities, they also typically
entail greater price volatility and principal and interest risk. There is a
greater risk that an issuer will not be able to make principal and interest
payments on time. Analysis of the creditworthiness of issuers of below
investment grade securities may be more complex than for higher grade
securities, making it more difficult for the subadviser to accurately predict
risk.

[diamond] differences in accounting, auditing and financial reporting standards,

[diamond] generally higher commission rates on foreign portfolio transactions,

[diamond] differences and inefficiencies in transaction settlement systems,

[diamond] the possibility of expropriation or confiscatory taxation,

[diamond] adverse changes in investment or exchange control regulations,

[diamond] political instability, and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the Series' portfolio.

Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the Series. Many of the foreign securities
held by the Series will not be registered with, nor will the issuers of those
securities be subject to the reporting requirements of, the U.S. Securities and
Exchange Commission. Accordingly, there may be less publicly available
information about the securities and about the foreign company or government
issuing them than is available about a domestic company or government entity.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payment positions.

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

FUTURES CONTRACTS, OPTIONS AND SWAP AGREEMENTS
The Series may invest in financial futures contracts and options and enter
into swap agreements. The adviser intends to invest in such securities primarily
to hedge or reduce the risk of holding other investments. If the prices for
futures contracts and prices in the cash market do not correlate as

<PAGE>

expected or if the adviser's expectations about interest rate, exchange rate or
general market movements are incorrect, the Series' returns may not be as high
as they would be if the adviser did not invest in these securities. There is
also a risk that the market for reselling financial futures contracts and
options may be limited or nonexistent. The Series could incur unlimited losses
if it cannot liquidate certain futures contracts. The subadviser's decisions
about the nature and timing of futures contract and options and swap
transactions may result in losses when other investors' decisions about the same
contracts, options or swaps result in gains.

ILLIQUID SECURITIES
Securities owned by the Series that are not liquid may be difficult to sell
because there may be no active markets for resale and fewer potential buyers.
This can make illiquid investments more likely than other types of investments
to lose value. In extreme cases it may be impossible to resell them and they can
become almost worthless to the Series.

MANAGEMENT OF THE FUNDS

THE ADVISERS
Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to the
Series and is located at 56 Prospect Street, Hartford, Connecticut 06115. PIC
also acts as the investment adviser for 14 mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
PIC had $23.9 billion in assets under management. PIC has acted as an investment
adviser for over sixty years.

Seneca Capital management LLC ("Seneca") is the investment subadviser to the
Series and is located at 909 Montgomery Street, San Francisco, California 94133.
Seneca acts as a subadviser to two mutual funds and acts as investment adviser
to institutions and individuals. As of December 31, 1998, Seneca had $
___billion in assets under management. Seneca has been (with its predecessor,
GMG/Seneca Capital Management LP) an investment adviser since 1989.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and the general operations of the
Series. Seneca, as subadviser, is responsible for day-to-day management of the
Series' portfolios.

Seneca manages the Series', assets to conform with the investment policies
as described in the prospectus. The Series pays PIC a monthly investment
management fee that is accrued daily against the value of that Series' net
assets at the rate of 0.80% annually.

Phoenix pays Seneca an annual subadvisory fee of 0.40%.

During the Series' last fiscal year, the Series paid total management fees
of $31,013. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ___%. The advisory fee is greater than that for
most Series; however, the Trustees have determined that it is comparable to fees
charged by other funds whose investment objectives are similar to those of the
Series.

PORTFOLIO MANAGEMENT
Investment and trading decisions for the Series are made by a team of
managers and analysts headed by two team leaders. The team leaders are primarily
responsible for the day-to-day decisions.

Gail P. Seneca is a team leader for the Series. Since January 1998, Ms.
Seneca also has served as Co-Manager of Phoenix Equity Opportunities Series of
Phoenix Strategic Equity Series Fund and since June 1998, she has served as
Co-Manager of Phoenix Mid-Cap Portfolio of Phoenix Multi-Portfolio Fund. Ms.
Seneca has been the Chief Executive and Investment Officer of Seneca or
GMG/Seneca since November 1989. From October 1987 until October 1989, she was
Senior Vice President of the Asset Management Division of Wells Fargo Bank, and
from October 1983 to September 1987, she was Investment Strategist and Portfolio
Manager for Chase Lincoln Bank, heading the fixed income division.

Richard D. Little is the other team leader for the Series. Since January
1998, Mr. Little has served as Co-Manager of Phoenix Equity Opportunities Series
of Phoenix Strategic Equity Series Fund, and since June 1998, he has served as
Co-Manager of Phoenix Mid-Cap Portfolio of Phoenix Multi-Portfolio Fund. Mr.
Little has been Director of Equities with Seneca or GMG/Seneca since December
1989. Before he joined GMG/Seneca, Mr. Little held positions as an analyst,
board member, and regional manager with Smith Barney, NatWest Securities, and
Montgomery Securities.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES INVESTMENTS
The Trustees have directed management to ensure that the systems used by
service providers (PIC, Seneca and their affiliates) in support of the Series'
operations be assessed and brought into Year 2000 compliance. Based upon
preliminary assessments, PIC and Seneca have determined that they will be
required to modify or replace portions of their software so that their computer
systems will properly utilize dates beyond December 31, 1999. PIC and Seneca
management believe that the majority of these systems are already Year 2000
compliant. PIC and Seneca believe that with modifications to existing software
and conversions to new software, the Year 2000 issue

<PAGE>

will be mitigated. It is anticipated that such modifications and conversions
will be completed on a timely basis. It is not known at this time if there could
be a material impact on the operations of PIC, Seneca or their affiliates or the
Series if such modifications and conversions are not completed timely.

PIC and Seneca will utilize both internal and external resources to
reprogram, or replace, and test the software for Year 2000 modifications.
Certain systems are already in the process of being converted due to previous
initiatives and it is expected that all core systems will be remediated and
tested by June 1999. The total cost to become Year 2000 compliant is not an
expense of the Series and is not expected to have a material impact on the
operating results of PIC or Seneca.

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
INCEPTION
3/2/98 TO
12/31/98
--------
<S> <C>
Net asset value, beginning of period............................................................................. $ 10.00
Income from investment operations
Net investment income.......................................................................................... 0.01(3,4)
Net realized and unrealized gain (loss)........................................................................ 2.16
----
Total from investment operations............................................................................. 2.17
----
Less distributions
Dividends from net investment income........................................................................... (0.01)
In excess of net investment income.............................................................................. --
------
Total distributions.......................................................................................... (0.01)
------
Change in net asset value........................................................................................ 2.16
----
Net asset value, end of period................................................................................... $ 12.16
=========
Total Return..................................................................................................... 21.75%(2)
Ratios/supplemental data:
Net assets, end of period (thousands).......................................................................... $ 7,897
Ratio to average net assets of:
Operating expenses............................................................................................. 1.05%(1)
Net investment income.......................................................................................... 0.15%(1)
Portfolio turnover rate.......................................................................................... 127%(2)
</TABLE>

(1) Annualized.
(2) Not annualized.
(3) Includes reimbursement of operating expenses by investment adviser of $0.15
per share.
(4) Computed using average shares outstanding.

<PAGE>

RESEARCH ENHANCED INDEX SERIES
- --------------------------------------------------------------------------------

INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
The Research Enhanced Index Series has an investment objective to seek high
total return by investing in a broadly diversified portfolio of equity
securities of large and medium capitalization companies within the market
sectors found in the S&P 500.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] Under normal conditions, the Series will invest at least 80% of its
total assets in common stocks and other equity securities.

[diamond] The Series will invest in securities believed by the adviser to be
undervalued and which offer growth potential.

[diamond] The Series will evaluate each of the economic sectors represented in
the S&P 500

o industrial
o financial
o public utilities
o transportation

and exclude securities in any sector the adviser believes to be
extremely overvalued.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The Series will be invested primarily in common stocks, and the value of the
Series investments are expected to fluctuate in the same way as the S&P 500 and
the stock market generally.

The Series asset values may be affected by general economic declines,
declines in industries and changes in interest rates.

Share values also may decline if the specific companies selected for Series
investment fail to perform as the adviser expects, regardless of general
economic trends, industry trends, interest rates and other economic factors.

PERFORMANCE TABLES

The bar chart and table below provide some indication of the risks of
investing in the Research Enhanced Index Series. The bar chart shows changes in
the Series' performance from year to year over its life.(1) The table below
shows how the Series' average annual returns for one year and the life of the
Series compare to those of a broad-based securities market index. The Series'
past performance is not necessarily an indication of how the Series will perform
in the future.

RESEARCH ENHANCED INDEX SERIES
[graphic omitted]

Calendar Year Annual Return(%)
1997 5.83
1998 31.68

(1) The Series's average annual returns in the chart above do not reflect the
deduction of any separate account or contract charges. The returns would
have been less than those shown if such charges were deducted. During the
period shown in the chart above, the highest return for a quarter was __%
(quarter ending ____________) and the lowest return for a quarter was __%
(quarter ending ________________).

- -----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS ONE LIFE OF
(FOR THE PERIOD ENDING 12/31/98) YEAR THE FUND(1)
- -----------------------------------------------------------------
Research Enhanced Index Series 31.68% 25.40%
- -----------------------------------------------------------------
S&P 500 Index(2) 28.76% 23.42%
- -----------------------------------------------------------------

(1) Since July 15, 1997.

(2) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

Sales Charge Imposed on Purchases None
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge None
Redemption Fee None Exchange Fee None

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)

Management Fees .45%
Distribution and Service (12b-1) Fees None
Other Expenses .60%
------------
TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 1.05%
=====

(1) Phoenix Investment Council has agreed to reimburse the Series for the
amount, if any, by which the Series' operating expenses other than the
management fee for any fiscal year exceeds 0.10%. Actual Total Annual Series
Operating Expenses after expense reimbursement were .55% for the year ending
December 31, 1998.

<PAGE>

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

- ------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------
Research Enhanced
Index Series $60 $180 $310 $690
- ------------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
Research Enhanced Index Series has an investment objective to seek high
total return by investing in a broadly diversified portfolio of equity
securities.

PRINCIPAL INVESTMENT STRATEGIES
The Series invests in a diversified portfolio of securities of large and
medium capitalized companies within the market sectors reflected in the S&P 500.

Under normal market conditions, the Series will invest at least 80% of its
total assets in common stocks and other equity securities.

The Series will invest in securities that the adviser believes to be
undervalued and which offer growth potential and an overall volatility of return
similar to that of the S&P 500.

The S&P 500 is a market weighted compilation of 500 common stocks selected
on a statistical basis by Standard & Poor's Corporation. The S&P 500 is
typically composed of issues in the following sectors:

[diamond] industrial,

[diamond] financial,

[diamond] public utilities, and

[diamond] transportation.

The Adviser and/or Subadviser will seek to reduce the Series' volatility
relative to the S&P 500 by attempting to generally match the Series' equities
holdings to various risk characteristics of the S&P 500 such as market
capitalization, weightings and diversification. The Subadviser then uses
fundamental analysis and systematic stock valuation to exclude stocks within
economic sectors which appear to be extremely overvalued.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.

RISKS RELATED TO INVESTMENT STRATEGIES

The Series' primary focus is high total return. The adviser intends to
invest Series assets so that your shares increase in value. However, the value
of the Series' investments that support your share value can decrease as well as
increase. If between the time you purchase shares and the time you sell shares
the value of the Series' investments decreases you will lose money. The value of
the Series' investments can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in the value of many or even
most equity and fixed income investments. Particular industries can face poor
markets for their products or services so that companies engaged in those
businesses do not do as well as companies in other industries. Interest rate
changes may improve prospects for certain types of businesses and they many
worsen prospects for others. To the extent that the Series' investments are
affected by general economic declines, declines in industries, and interest rate
changes that negatively affect the companies in which the Series invests,
Series' share values may decline.

Share values also can decline if the specific companies selected for Series
investment fail to perform as the adviser expects, regardless of general
economic trends, industry trends, interest rates and other economic factors.

MANAGEMENT OF THE SERIES

J.P. Morgan Investment Management, Inc. ("J.P. Morgan"), a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated (JPM & Co.), serves as subadviser
to the Research Enhanced Index Series. J.P. Morgan's principal place of business
is located at 522 Fifth Avenue, New York, New York 10036. J.P. Morgan presently
serves as an investment manager for corporate, public and union employee benefit
funds, foundations, endowments, insurance companies, government agencies and the
accounts of other institutional investors. J.P. Morgan was founded in 1984. JPM
& Co., through J.P. Morgan and its other investment

<PAGE>

management subsidiaries, had approximately $___ billion in assets under
management as of December 31, 1998.

Subject to the direction of the fund's Board of Trustees, PIC is responsible
for managing the Series' investment program and J.P. Morgan, as subadviser, is
responsible for the day-to-day management of the holdings of the Series. Both
PIC and J.P. Morgan manage the Series' assets to conform with the investment
policies as described in this prospectus. The Series pays PIC a monthly
investment management fee that is accrued daily against the value of that
Series' net assets at the rate of 0.45% annually.

During the Series' last fiscal year, the Series paid total management fees
of $218,150. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ______%.

PORTFOLIO MANAGEMENT
Mr. Timothy Devlin and Mr. James Wiess are coportfolio managers of the
Research Enhanced Index Series and, as such, are primarily responsible for the
day-to-day management of the Series' investments. Mr. Devlin has served as a
vice president of J.P. Morgan since July 1996 and is a member of the Structured
Equity Group where he has the dual responsibilities of client servicing and
portfolio management. From 1987 to 1996, he served as first vice president of
Mitchell Hutchins where he managed quantitatively-driven equity portfolios for
institutional and retail investors. Mr. Wiess is a vice president of J.P. Morgan
and is a portfolio manager in the Structured Equity Group where he has the
responsibility of portfolio rebalancing and research and development of
structured equities. Prior to joining J.P. Morgan in 1992, Mr. Wiess was a stock
index arbitrager for seven years at Oppenheimer & Co.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES OPERATIONS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the Series if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
INCEPTION
YEAR ENDED 7/15/97 TO
12/31/98 12/31/97
-------- --------
<S> <C> <C>
Net asset value, beginning of period................................................................. $ 10.49 $ 10.00
Income from investment operations
Net investment income (loss)....................................................................... 0.12(2) 0.05(2)
Net realized and unrealized gain (loss)............................................................ 3.19 0.54
---- ----
Total from investment operations................................................................. 3.31 0.59
---- ----
Less distributions
Dividends from net investment income............................................................... (0.12) (0.05)
Dividends from net realized gains.................................................................. (0.60) (0.05)
------ ------
Total distributions.............................................................................. (0.72) (0.10)
------ ------
Change in net asset value............................................................................ 2.59 0.49
---- ----
Net asset value, end of period....................................................................... $ 13.08 $ 10.49
========= =========
Total Return......................................................................................... 31.68% 5.83%(3)
Ratios/supplemental data:
Net assets, end of period (thousands).............................................................. $ 69,522 $ 30,851
Ratio to average net assets of:
Operating expenses................................................................................. 0.55% 0.55%(1)
Net investment income.............................................................................. 1.08% 1.46%(1)
Portfolio turnover rate.............................................................................. 45% 9%(3)
</TABLE>

(1) Annualized.
(2) Includes reimbursement of operating expenses by investment adviser of $0.02
per share.
(3) Not annualized.

<PAGE>

SCHAFER MID-CAP VALUE SERIES
- --------------------------------------------------------------------------------
INVESTMENT RISK AND RETURN SUMMARY

INVESTMENT OBJECTIVE
Investment objective of the Schafer Mid-Cap Value Series is long-term
capital appreciation. Current income is a secondary objective of the Series.
There is no guarantee that the Series will achieve its objectives.

PRINCIPAL INVESTMENT STRATEGIES
[diamond] The Series will invest in securities which the Adviser believes to
offer the possibility of increase in value.

[diamond] Investments will primarily be in common stocks of established
companies having:

o a strong financial position;
o a below average price/earnings ratio; and
o an above average prospective earnings and dividend growth rate.

[diamond] The Series may invest in convertible securities.

[diamond] The Series may invest up to 20% of its total assets in securities of
foreign issuers.

PRINCIPAL RISKS
If you invest in this Series you risk that you may lose your investment.

The fund will seek to increase the value of your shares by investing in
securities the adviser expects to increase in value and to provide current
income. Most of the Series' investments will be in common stocks. Conditions
affecting the overall economy, specific industries or companies in which the
Series invests can be worse than expected. As a result, the value of your shares
may decrease.

The fund may invest in companies in foreign countries. Political and
economic uncertainty as well as relatively less public information about
investments may negatively impact the Series' portfolio. Some investments may be
made in currencies other than U.S. dollars that will fluctuate in value as a
result of changes in the currency exchange rate. Foreign markets and currencies
may not perform as well as U.S. markets.

PERFORMANCE TABLES
The Schafer Mid-Cap Value Series has not had annual returns for one full
calendar year. The table below shows how the Series' total return for the life
of the Series compares to that of a broad-based securities market index. The
Series' past performance is not necessarily an indication of how the Series will
perform in the future.

- ----------------------------------------------------------------
TOTAL RETURN LIFE OF
(FOR THE PERIOD ENDING 12/31/98)(1) THE SERIES(2)
- ----------------------------------------------------------------
Schafer Mid-Cap Value Series (11.37)%
- ----------------------------------------------------------------
S&P 500 Index(3) 18.95%
- ----------------------------------------------------------------

(1) The Series' total return in the table above does not reflect the deduction
of any separate account or contract charges. The return would have been
lower than that shown if such charges were deducted.

(2) Since March 2, 1998.

(3) The S&P 500 Index is an unmanaged, commonly used measure of stock market
total return performance. The Index is not available for direct investment.

SERIES' EXPENSES
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the Series.

ANNUAL SERIES' OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM SERIES' ASSETS)
Management Fees 1.05%
Distribution and Service (12b-1) Fees None
Other Expenses .26%
------------

TOTAL ANNUAL SERIES' OPERATING EXPENSES(1) 1.31%
=====

(1) The Series' investment adviser has agreed to reimburse through December 31,
1999 the Schafer Mid-Cap Value Series' expenses other than management fees
to the extent that such expenses exceed 0.15%. Actual total Annual Series
Operating Expenses after expense reimbursement were 1.20% for the year
ending December 31, 1998.

EXAMPLE
This example is intended to help you compare the cost of investing in the
Series with the cost of investing in other funds.

<PAGE>

- ------------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------
Schafer Mid-Cap Value
Series $12 $38 $66 $145
- ------------------------------------------------------------------

INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE
Phoenix Schafer Mid-Cap Value Series has an investment objective of
long-term capital appreciation. Current income is a secondary investment
objective.

The Series will invest in securities the adviser believes offer the
possibility of increase in value. The adviser will choose from securities which
satisfy three basic criteria:

[diamond] established companies having a strong financial position;

[diamond] price/earnings ratio below major market indices, such as the S&P 500;
and

[diamond] prospective earnings and dividend growth rates above average rates for
major market indices.

Once a security is purchased the Series will generally hold it until it no
longer meets the financial or valuation criteria.

[diamond] higher yields than common stocks but lower than comparable
nonconvertible securities;

[diamond] typically less fluctuation in value than the "underlying" common
stock, that is, the common stock that the investor receives if he
converts;

[diamond] the potential for capital appreciation if the market price of the
underlying common stock increases.

The Series may invest up to 20% of its net assets in securities of foreign
(non-U.S.) issuers. The Series may invest in a broad range of foreign
securities, including equity, debt and convertible securities and foreign
government securities. Issuers may be in established market countries and
emerging market countries.

If the adviser is unable to identify attractive equity investments
consistent with the Series' principal strategies, the Series may hold on to cash
or invest without limit in cash equivalents, such as U.S. government securities
and high grade commercial paper. When this happens, the fund may not achieve its
investment objective.

Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.

RISKS RELATED TO INVESTMENT STRATEGIES

GENERAL
The Series' focus is long-term capital appreciation. The adviser intends to
invest Series assets so that your shares increase in value. However, the value
of the Series' investments that support your share value can decrease as well as
increase. If between the time you purchase shares and the time you sell shares
the value of the Series' investments decreases you will lose money. The value of
the Series' investments can decrease for a number of reasons. For example,
changing economic conditions may cause a decline in value of many or even most
equity and fixed income investments. Particular industries can face poor markets
for their products or services so that companies engaged in those businesses do
not do as well as companies in other industries. Interest rate changes may
improve prospects for certain types of businesses and they many worsen prospects
for others. To the extent that the Series' investments are affected by general
economic declines, declines in industries, and interest rate changes that
negatively affect the companies in which the Series invests, Series share values
may decline. Share values also can decline if the specific companies selected
for Series investment fail to perform as the adviser expects, regardless of
general economic trends, industry trends, interest rates and other economic
factors.

In addition to these general risks of investing in the Series, there are
several specific risks of investing in the Series that you should note.

[diamond] differences in accounting, auditing and financial reporting standards;

<PAGE>

[diamond] generally higher commission rates on foreign portfolio transactions;

[diamond] differences and inefficiencies in transaction settlement systems;

[diamond] the possibility of expropriation or confiscatory taxation;

[diamond] adverse changes in investment or exchange control regulations;

[diamond] political instability; and

[diamond] potential restrictions on the flow of international capital.

Political and economic uncertainty as well as less public information about
investments may negatively impact the fund's portfolio.

Many of the foreign securities held by the Series will not be registered
with, nor will the issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission. Accordingly, there
may be less publicly available information about the securities and about the
foreign company or government issuing them than is available about a domestic
company or government entity. Moreover, individual foreign economies may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

[diamond] Known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;

[diamond] Currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and

[diamond] Potential tax consequences.

MANAGEMENT OF THE SERIES

THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC") is the investment adviser to the
Series and is located at 56 Prospect Street, Hartford, CT 06115. PIC also acts
as the investment adviser for 14 mutual funds, as subadviser to three mutual
funds and as adviser to institutional clients. As of December 31, 1998, PIC had
$23.9 billion in assets under management. PIC has acted as an investment adviser
for over sixty years.

THE SUBADVISER
Schafer Capital Management, Inc. ("Schafer") serves as subadviser to the
Series. Schafer's principal place of business is located at 101 Carnegie Center,
Suite 107, Princeton, New Jersey. Schafer has been engaged in the investment
management business since 1981, specializing in long-term investing in the
equity markets. As of December 31, 1998, Schafer had approximately $___ billion
in assets under management.

<PAGE>

pays PIC a monthly investment management fee that is accrued daily against the
value of that Series' net assets at the rate of 1.05% annually.

The total advisory fees of 1.05% of the aggregate net assets of the Series
is greater than that paid by most funds; however, the Board of Trustees of the
Series has determined that it is similar to fees charged by other mutual funds
whose investment objectives are similar to those of the Series.

During the Series' last fiscal year, the Series paid total management fees
of $46,644. The ratio of management fees to average net assets for the fiscal
year ended December 31, 1998 was ______%.

PORTFOLIO MANAGEMENT
Mr. David K. Schafer is the portfolio manager for the Schafer Mid-Cap Value
Series and, as such, is primarily responsible for the day-to-day management of
the Series' portfolio. Mr. Schafer has been in the investment management
business for more than twenty-five years. Mr. Schafer is the president of
Schafer Capital Management, Inc. and is also portfolio manager for the Strong
Schafer Value Fund. Mr. Schafer was a securities analyst, first for Arnold
Bernhard & Co., Inc., publisher of The Value Line Investment Survey, from June
1966 to June 1968; for J & W Seligman & Co. from June 1968 to December 1970; and
for Fariston Management Corp., from January 1971 to November 1972, he joined the
treasury department of INCO Ltd. to supervise that company's pension assets, and
in 1974 he began managing a portion of those assets himself. In 1981, Mr.
Schafer left INCO Ltd. to found Schafer Capital Management.

IMPACT OF THE YEAR 2000 ISSUE ON SERIES INVESTMENTS
The Trustees have directed management to ensure that the systems used by
service providers (PIC and its affiliates) in support of the Series' operations
be assessed and brought into Year 2000 compliance. Based upon preliminary
assessments, PIC has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. PIC management believes that the majority of
these systems are already Year 2000 compliant. PIC believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated. It is anticipated that such modifications and
conversions will be completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of PIC or its affiliates or
the fund if such modifications and conversions are not completed timely.

PIC will utilize both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. Certain systems are
already in the process of being converted due to previous initiatives and it is
expected that all core systems will be remediated and tested by June 1999. The
total cost to become Year 2000 compliant is not an expense of the Series and is
not expected to have a material impact on the operating results of PIC.

FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Series' financial performance for the past 5 years (or, if shorter, the period
of the Series' operations). Certain information reflects financial results for a
single share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the Series (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLC, whose report, along with the Fund's
financial statements, are included in (the SAI or annual report), which is
available upon request.

<TABLE>
<CAPTION>
FROM
INCEPTION
3/2/98 TO
12/31/98
--------
<S> <C>
Net asset value, beginning of period............................................................................. $ 10.00
Income from investment operations
Net investment income (loss)................................................................................... 0.03(3,4)
Net realized and unrealized gain (loss)........................................................................ (1.16)
------
Total from investment operations............................................................................. (1.13)
------
Less distributions
Dividends from net investment income........................................................................... (0.03)
In excess of net investment income............................................................................. --
------
Total distributions.......................................................................................... (0.03)
------
Change in net asset value........................................................................................ (1.16)
------
Net asset value, end of period................................................................................... $ 8.84
=========
Total Return..................................................................................................... (11.37)%(2)
Ratios/supplemental data:
Net assets, end of period (thousands).......................................................................... $ 7,896
Ratio to average net assets of:
Operating expenses............................................................................................. 1.20%(1)
Net investment income.......................................................................................... 0.52%(1)
Portfolio turnover rate.......................................................................................... 21%(2)
</TABLE>

(1) Annualized.
(2) Not annualized.
(3) Includes reimbursement of operating expenses by investment adviser of $0.11
per share.
(4) Computed using average shares outstanding.

<PAGE>

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

The Fund may not invest more than 25% of the assets of any one Series in any
one industry (except that the Money Market and Allocation Series may invest more
than 25% of their assets in the banking industry and the Real Estate Series may
invest at least 75% of its assets in the real estate industry). If the Fund
makes loans of the portfolio securities of any Series, the market value of the
securities loaned may not exceed 25% of the market value of the total assets of
such Series.

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

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

Each Series pays brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover involves a correspondingly greater
amount of brokerage commissions and other costs which must be borne directly by
a Series and thus indirectly by its shareholders. It also may result in the
realization of larger amounts of short-term capital gains, which are taxable to
shareholders as ordinary income. The rate of portfolio turnover is not a
limiting factor when the Adviser deems changes appropriate. It is anticipated
that the turnover rate for the Enhanced Index, Nifty Fifty, Seneca Mid-Cap,
Growth & Income, Value and Schafer Mid-Cap Series generally will not exceed
100%. Although securities for the Theme Series are not purchased for the
short-term, the Adviser's strict sell discipline may result in rates of
portfolio turnover equivalent to those identified by the SEC as appropriate for
capital appreciation funds with substantial short-term trading. The Adviser's
approach dictates that underperforming securities and securities not consistent
with prevailing themes will be sold. Portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities during the
fiscal year by the monthly average of the value of the Series' securities
(excluding short-term securities). The turnover rate may vary greatly from year
to year and may be affected by cash requirements for redemptions of shares of a
Series and by compliance with provisions of the Internal Revenue Code, relieving
investment companies which distribute substantially all of their net income from
federal income taxation on the amounts distributed. The rates of portfolio
turnover for each Series (other than the Money Market, Nifty Fifty, Seneca
Mid-Cap, Growth & Income, Value and Schafer Mid-Cap Series) are set forth under
"Financial Highlights." For more information regarding the consequences related
to a high portfolio turnover rate, see "Portfolio Transactions and Brokerage"
and "Dividends, Distributions and Taxes" in the Statement of Additional
Information.

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

The Fund is a mutual fund, technically known as an open-end, diversified
investment company. The Board of Trustees supervises the business affairs and
investments of the Fund, which is managed on a daily basis by the Fund's
investment advisers. The Fund was organized as a Massachusetts business trust on
February 18, 1986. The Fund issues shares of beneficial interest in 15 Series.
The Statement of Additional Information contains a list of the members of the
Board of Trustees and the officers of the Fund.

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

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

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

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

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

Unlike the stockholders of a corporation, there is a possibility that the
Accounts as shareholders of a business trust such as the Fund may be liable for
debts or claims against the Fund. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Fund and that every written agreement, undertaking or
obligation made or issued by the Fund shall contain a provision to that effect.
The Declaration of Trust

<PAGE>

provides for indemnification out of the Fund's property for all losses and
expenses of any shareholder held personally liable for the obligations of the
Fund. Thus, the risk of the Accounts, as shareholders, incurring loss because of
shareholder liability is limited to circumstances in which the Fund itself would
be unable to meet its obligations. Phoenix, PHL Variable and PLAC, as the sole
shareholders, have a fiduciary duty to bear this risk and Contract Owners and
Policyowners are fully and completely insulated from risk.

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

The net asset value per share of each Series is determined as of the close
of regular trading of the NYSE on days when the NYSE is open for trading. The
net asset value per share of a Series is determined by adding the values of all
securities and other assets of the Series, subtracting liabilities and dividing
by the total number of outstanding shares of the Series.

The Series' investments are valued at market value or, where market
quotations are not available, at fair value as determined in good faith by the
Trustees or their delegates. Foreign and domestic debt securities (other than
short-term investments) are valued on the basis of broker quotations or
valuations provided by a pricing service approved by the Trustees when such
prices are believed to reflect the fair value of such securities. Foreign and
domestic equity securities are valued at the last sale price or, if there has
been no sale that day, at the last bid price, generally. Short-term investments
having a remaining maturity of less than 61 days are valued at amortized cost,
which the Trustees have determined approximates market. For further information
about security valuations, see the Statement of Additional Information

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

The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code ("Code") and so qualified for its last
taxable year. In addition, the Fund intends to comply with the investment
diversification requirements for variable contracts contained in the Code.
Moreover, the Fund intends to distribute sufficient income to avoid imposition
of any Federal excise tax. Dividends derived from interest and distributions of
any realized capital gains are taxable, under Subchapter M, to the Fund's
shareholders, which in this case are the Accounts. The International and Asia
Series may incur liability for foreign income and withholding taxes on
investment income. The International and Asia Series intend to qualify for, and
may make, an election permitted under the Code to enable the shareholder
Accounts (and therefore Phoenix) to claim a credit or deduction on Phoenix's
income tax return for the Accounts' pro rata share of the income and withholding
taxes paid by the International and Asia Series to foreign countries. Phoenix
also will treat the foreign income taxes paid by the Series as income. Contract
Owners and Policyowners will not be required to treat the foreign income taxes
paid by the Series as income or be able to claim a credit or deduction for these
taxes on their income tax returns. For a discussion of the taxation of the
Accounts, see "Federal Tax Considerations" included in the Accounts'
Prospectuses.

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

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

<PAGE>

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

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

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

The rating P-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of 10 years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.

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

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

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

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

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

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

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

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

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

S&P'S CORPORATE BOND RATINGS
AAA--This is the highest rating assigned by S&P to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.

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

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

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

BB-B-CCC-CC--Bonds rated BB, B, CCC are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with terms of the obligation. BB indicates the lowest
degree of

<PAGE>

speculation and CCC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions. Ability to
pay interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirement.

B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC--Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment.

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C--Bonds are in imminent default in payment of interest or principal.

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

<PAGE>

Inquiries and requests for the Statement of Additional
Information and the Annual Report to Shareholders should be
directed in writing to Phoenix Variable Products Mail
Operations, PO Box 8027, Boston, Massachusetts 02266-8027,
or by telephoning VPO at (800) 447-4312.

<PAGE>

PART B

<PAGE>

<TABLE>
<CAPTION>
THE PHOENIX EDGE SERIES FUND
<S> <C>

HOME OFFICE: PHOENIX VARIABLE PRODUCTS
MAIL OPERATIONS ("VPMO"):

101 Munson Street P.O. Box 8027
Greenfield, Massachusetts Boston, MA 02266-8027
</TABLE>

STATEMENT OF ADDITIONAL INFORMATION

May 1, 1999

This Statement of Additional Information is not a prospectus. Much of the
information contained in this Statement of Additional Information expands upon
subjects discussed in the Prospectus. Accordingly, this Statement should be read
together with the Fund's current Prospectus, dated May 1, 1999, which may be
obtained by calling Variable Products Operations ("VPO") at (800) 447-4312, or
by writing to VPMO.

------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS*

<S> <C>
PAGE
----

The Phoenix Edge Series Fund ............................................................................................. 2

Investment Policies ...................................................................................................... 2

Investment Restrictions (73).............................................................................................. 14

Portfolio Turnover (73)................................................................................................... 15

Management of the Fund (73)............................................................................................... 16

Investment Advisers ...................................................................................................... 24

Custodian ................................................................................................................ 27

Foreign Custodian......................................................................................................... 27

Independent Accountants................................................................................................... 27

Brokerage Allocation ..................................................................................................... 27

Determination of Net Asset Value (74)..................................................................................... 28

Investing In the Fund .................................................................................................... 28

Redemption of Shares ..................................................................................................... 29

Taxes (74)................................................................................................................ 29

Financial Statements...................................................................................................... 30
</TABLE>

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

1
<PAGE>

THE PHOENIX EDGE SERIES FUND
- --------------------------------------------------------------------------------
The Phoenix Edge Series Fund (the "Fund") is an open-end investment company
as defined in the Investment Company Act of 1940. It was formed on February 18,
1986 as a Massachusetts business trust and commenced operations on December 5,
1986. Shares in each Series of the Fund are available only to certain insurance
company separate accounts.

The Phoenix Home Life Variable Accumulation Account is a separate account of
Phoenix Home Life Mutual Insurance Company ("Phoenix") created on June 21, 1982.

The Phoenix Home Life Variable Universal Life Account is a separate account
of Phoenix created on June 17, 1985.

The PHL Variable Accumulation Account is a separate account of PHL Variable
Insurance Company ("PHL Variable") formed on December 7, 1994.

The Phoenix Life and Annuity Variable Universal Life Account is a separate
account of Phoenix Life and Annuity Company ("PLAC") formed in March 1996.

The executive offices of the Accounts, Phoenix, PHL Variable and PLAC are
located at One American Row, Hartford, Connecticut. The Accounts own the
majority of the shares of the Fund.

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

MONEY MARKET INSTRUMENTS
Certain money market instruments used extensively by the Money Market and
Allocation Series are described below. They also may be used by the
International, Real Estate, Theme, Enhanced Index and Asia Series and may be
used by the other Series to a very limited extent to invest otherwise idle cash,
or on a temporary basis for defensive purposes.

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

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

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

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

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

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

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

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

Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount

<PAGE>

basis and has a maturity at the time of issuance not exceeding nine months.

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

All of the Money Market Series' investments will mature in 397 days or less
and will have a weighted average age of not more than 90 days. By limiting the
maturity of its investments, the Series seeks to lessen the changes in the value
of its assets caused by market factors. This Series, consistent with its
investment objective, will attempt to maximize yield through portfolio trading.
This may involve selling portfolio instruments and purchasing different
instruments to take advantage of disparities of yields in different segments of
the high grade money market or among particular instruments within the same
segment of the market. It is expected that the Series' portfolio transactions
generally will be with issuers or dealers in money market instruments acting as
principal. Accordingly, this Series will normally not pay any brokerage
commissions.

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

ALLOCATION SERIES: MARKET SEGMENT INVESTMENTS AND TRADING
Market Segment Investments. The Allocation Series seeks to achieve its
investment objective by investing in the three market segments of stocks, bonds
and money market instruments described below.

[diamond] STOCK--common stocks and other equity-type securities such as
preferred stocks, securities convertible into common stock and
warrants;

[diamond] BONDS--bonds and other debt securities with maturities generally
exceeding one year, including:

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

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

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

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

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

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

o those money market instruments described in this Statement of
Additional Information; and

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

Trading. In order to achieve the Series' investment objective, the timing
and amounts of purchases and sales of particular securities and particular types
of securities (i.e., common stock, debt, money market instruments) will be of
significance. As a result, the Allocation Series intends to use trading as a
means of managing the portfolio of the Series in seeking to achieve its
investment objective. Trading is used primarily in anticipation of, or in
response to, market developments or to take advantage of yield disparities. The
Adviser will engage in trading when it believes that the trade, net of
transaction costs, will improve interest income or capital appreciation
potential, or will lessen capital loss potential. Whether these goals will be
achieved through trading depends on the Adviser's ability to

<PAGE>

evaluate particular securities and anticipate relevant market factors, including
interest rate trends and variations. Such trading places a premium on the
Adviser's ability to obtain relevant information, evaluate it properly and take
advantage of its evaluations by completing transactions on a favorable basis. If
the Adviser's evaluations and expectations prove to be incorrect, the Series'
income or capital appreciation may be reduced and its capital losses may be
increased. Portfolio trading involves transaction costs, but, as explained
above, will be engaged in when the Adviser believes that the result of the
trading, net of transaction costs, will benefit the Series. Purchases and sales
of securities will be made, whenever necessary in the Adviser's view, to achieve
the total return investment objective of the Series without regard to the
resulting brokerage costs.

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

ENHANCED INDEX SERIES
The investment strategy of the Enhanced Index Series is to earn a total
return modestly in excess of the total return performance of the S&P 500
(including the reinvestment of dividends) while maintaining a volatility of
return similar to the S&P 500. The Series is appropriate for investors who seek
a modestly enhanced total return relative to that of large- and medium-sized
U.S. companies typically represented in the S&P 500. The Portfolio intends to
invest in securities of approximately 350 issuers, which securities are rated by
the Series' Subadviser to have above average expected returns.

The Series' seeks to achieve its investment objective through fundamental
analysis, systematic stock valuation and disciplined portfolio construction.

[diamond] Fundamental research: The Series' Subadviser's approximately 25
domestic equity analysts, each an industry specialist with an
average of approximately 12 years experience, follow over 900
predominantly large- and medium-sized U.S. companies--approximately
550 of which form the universe for the Series' investments. A
substantial majority of these companies are issuers of securities
which are included in the S&P 500. The analysts' research goal is to
forecast normalized, longer-term earnings and dividends for the
companies that they cover.

[diamond] Systematic valuation: The analysts' forecasts are converted into
comparable expected returns by a dividend discount model, which
calculates thoseexpected returns by solving for the rate of return
that equates the company's current stock price to the present value
of its estimated long-term earnings power. Within each sector,
companies are ranked by their expected return and grouped into
quintiles; those with the highest expected returns (Quintile 1) are
deemed the most undervalued relative to their long-term earnings
power, while those with the lowest expected returns (Quintile 5) are
deemed the most overvalued.

[diamond] Disciplined portfolio construction: A diversified portfolio is
constructed using disciplined buy and sell rules. Sector weightings
will generally approximate those of the S&P 500. The Series will
normally be principally comprised, based on the dividend discount
model, of stocks in the first four quintiles. Finally, the Series
holds a large number of stocks to enhance its diversification.

Under normal market circumstances, the Series' Adviser will invest at least
80% of its net assets in equity securities consisting of common stocks and other
securities with equity characteristics such as trust interests, limited
partnership interests, preferred stocks, warrants, rights and securities
convertible into common stock. The Series' primary equity investments will be
the common stock of large- and medium-sized U.S. companies with market
capitalizations above $1 billion. Such securities will be listed on a national
securities exchange or traded in the over-the-counter market. The Series may
invest in similar securities of foreign corporations, provided that the
securities of such corporations are included in the S&P 500.

The Series intends to manage its portfolio actively in pursuit of its
investment objective. Since the Series has a long-term investment perspective,
it does not intend to respond to short-term market fluctuations or to acquire
securities for the purpose of short-term market fluctuations or to acquire
securities for the purpose of short-term trading; however, it may take advantage
of short-term trading opportunities that are consistent with its objective.

FINANCIAL FUTURES AND RELATED OPTIONS
The Allocation, Value, Growth & Income, Seneca Mid-Cap and Balanced Series
may enter into financial futures contracts for the purchase or sale of debt
obligations which are traded on exchanges that are licensed and regulated by
Commodity Futures Trading Commission.

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

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

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

<PAGE>

expects the rate of return then available in the securities market to be less
favorable than rates that are currently available in the futures markets.

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

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

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

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

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

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

The Series will engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In addition,
it will not purchase or sell any financial futures contract or related option
if, immediately thereafter, the sum of the cash or U.S. Treasury bills committed
with respect to its existing futures and related options positions and the
premiums paid for related options would exceed 5% of the market value of its
total assets. At the time of the purchase of a futures contract or a call option
on a futures contract, any asset, including equity securities and non-investment
grade debt so long as the asset is liquid, unencumbered and marked to market
daily equal to the market value of the futures contract, minus the initial
margin deposit with respect thereto, will be deposited in a segregated account
with the Fund's custodian bank to collateralize fully the position and thereby
ensure that it is not leveraged. The extent to which the Series may enter into
financial futures contracts and related options also may be limited by
requirements of the Internal Revenue Code of 1986 (the "Code") for qualification
as a regulated investment company.

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

Theme Series. The Theme Series may use financial futures contracts and
related options to hedge against changes in the market value of its portfolio
securities which it intends to purchase. Hedging is accomplished when an
investor takes a position in the futures market opposite to his cash market
position. There are two types of hedges--long (or buying) and short (or selling)
hedges. Historically,

<PAGE>

prices in the futures market have tended to move in concert with cash market
prices, and prices in the futures market have maintained a fairly predictable
relationship to prices in the cash market. Thus, a decline in the market value
of securities in a Series' portfolio may be protected against to a considerable
extent by gains realized on futures contracts sales. Similarly, it is possible
to protect against an increase in the market price of securities which a Series
may wish to buy in the future by purchasing futures contracts.

The Theme Series may purchase or sell any financial futures contracts which
are traded on a recognized exchange or board of trade. Financial futures
contracts consist of interest rate futures contracts and securities index
futures contracts. A public market presently exists in interest rate futures
contracts covering long-term U.S. Treasury bonds, U.S. Treasury notes, 3-month
U.S. Treasury bills and GNMA certificates. Securities index futures contracts
are currently traded with respect to the S&P 500. A clearing corporation
associated with the New York Stock Exchange ("NYSE") or board of trade on which
a financial futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.

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

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

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

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

OPTIONS
MONEY MARKET, GROWTH, BALANCED, INTERNATIONAL, MULTI-SECTOR, ALLOCATION,
THEME, ENHANCED INDEX, SENECA MID-CAP, GROWTH & INCOME, VALUE AND ASIA SERIES:
Writing Covered Call Options. The Multi-Sector, Money Market, Growth,
Balanced, Allocation, Theme, Enhanced Index, International, Seneca Mid-Cap,
Growth & Income, Value and Asia Series may write (sell) covered call options on
securities owned by them, including securities into which convertible securities
are convertible, provided that such call options are listed on a national
securities exchange.

A call option gives the holder the right to buy a security at a specified
price (the exercise price) for a stated period of time. Prior to the expiration
of the option, the seller of the option has an obligation to sell the underlying
security to the holder of the option at the original price specified regardless
of the market price of the security at the time the option is exercised. The
seller of the call option receives a cash payment (premium) at the time of sale,
which premium is retained by the seller whether or not the option is exercised.
The premium represents consideration to the seller for undertaking the
obligations under the option contract and thereby foregoing the opportunity to
profit from an increase in the market price of the underlying security above the
exercise price (except insofar as the premium represents such a profit).

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

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

In order to maintain its qualification as a regulated investment company
under Subchapter M of the Code, the Fund intends to limit gains from the sale of
securities held or deemed held for less than three months to less than 30% of
annual gross income. Accordingly, the Fund may be restricted in the selling of
securities which have been held less than three months, in the writing of
options on

<PAGE>

securities into which convertible securities are convertible, in the writing of
options on securities which have been held for six months or less, in the
writing of options which expire in less than three months and in purchasing
options to terminate options which it wrote within the preceding three months.
In this regard, the Fund can minimize the possibility of a suspended holding
period for purposes of the 30 percent rule to the extent the Fund limits its
covered call writing to options with more than 30 days to expiration that are
not "deep in the money" and that satisfy certain other requirements such that
they will constitute "qualified covered call options" as defined in Section
1092(c)(4)(B) of the Code, as recently enacted.

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

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

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

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

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

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

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

Immediately after entering into an opening option position the total value
of all open option positions based on exercise price will not exceed ten percent
(10%) of the Allocation or Balanced Series' total assets. The premium paid by
the Series for the purchase of a call or a put option and the expiration or
closing sale transaction with respect to such options are treated in a manner
analogous to that described above, except there is no liability created to the
Series. The premium paid for any such option is included in assets and marked to
the market value on a current basis. If the options expire, the Series will
realize a short-term loss on the amount of the cost of the option. If a
purchased put or call option is closed out by the Series entering into a closing
sale transaction, the Series will realize a short-term gain or loss, depending
upon whether the sale proceeds from the closing sale transaction are greater or
less than the cost of the put or call option.

INTERNATIONAL, THEME, ENHANCED INDEX, SENECA MID-CAP,
VALUE, GROWTH & INCOME AND ASIA SERIES:
To promote their objectives, the International, Theme, Enhanced Index,
Seneca Mid-Cap, Value, Growth & Income and Asia Series may write covered call
options and purchase call and put options on securities. In addition, the Series
may write secured put options and enter into option transactions on foreign
currency.

Writing (Selling) Call and Put Options. A call option on a security or a
foreign currency gives the purchaser of the option, in return for the premium
paid to the writer (seller), the right to buy the underlying security or foreign
currency at the exercise price at any time during the option period. Upon
exercise by the purchaser, the writer of a call option has the obligation to
sell the underlying

<PAGE>

security or foreign security, except that the value of the option depends on the
weighted value of the group of securities comprising the index and all
settlements are made in cash. A call option may be terminated by the writer
(seller) by entering into a closing purchase transaction in which it purchases
an option of the same series as the option previously written.

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

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

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

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

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

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

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

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

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

<PAGE>

Similarly, a purchaser of an OTC put or call option also might find it difficult
to terminate its position on a timely basis in the absence of a secondary
market.

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

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

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

FOREIGN SECURITIES
The International and Asia Series will purchase foreign securities as
discussed above. In addition, the other Series may invest up to 25% (up to 35%
for the Theme Series, 20% for the Seneca Mid-Cap and Schafer Mid-Cap Series and
typically less than 5% for the Nifty Fifty Series) of total net asset value in
foreign securities. The Multi-Sector Series may invest up to 50% of total net
asset value in foreign debt securities. The Series, other than the
International, Theme, Multi-Sector and Asia Series, will purchase foreign debt
securities only if issued in U.S. dollar denominations. The Enhanced Index
Series may invest in securities of foreign corporations, provided that such
securities are included in the S&P 500 or traded on a U.S. exchange.

The foreign debt securities in which the Series may invest are issued by
foreign issuers in developed countries considered creditworthy by the Adviser
and in so-called emerging market countries. The Series will invest in government
obligations supported by the authority to levy taxes sufficient to ensure the
payment of all principal and interest due on such obligations. Because foreign
government obligations, like U.S. government obligations, are generally
guaranteed as to principal and interest by the government issuing the security,
the principal risk of investing in foreign government obligations is that the
foreign government will not or will be unable to, meet its obligations. The
Series also may purchase securities of nongovernmental issuers considered
creditworthy by the Adviser.

While the International, Theme, Multi-Sector and Asia Series may purchase
foreign debt securities denominated in foreign currencies ("non-U.S. dollar
securities"), the amount invested in such non-U.S. dollar securities may vary
depending on the relative yield of such securities, the relative strength of the
economies and the financial markets of such countries, the relative interest
rates available in such countries and the relationship of such countries'
currencies to the U.S. dollar. Investments in non-U.S. dollar securities and
currency will be evaluated on the basis if fundamental economic criteria (e.g.,
relative inflation levels and trends, growth rate forecasts, balance of payments
status, and economic policies) as well as technical and political data.

FOREIGN CURRENCY TRANSACTIONS
For each Series investing in foreign securities, the value of the assets of
such Series as measured in United States dollars may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations, and a Series may incur costs in connection with conversions between
various currencies. A Series will conduct its foreign currency exchange
transactions either on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, or through forward contracts to purchase
or sell foreign currencies. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded directly between currency traders (usually large commercial banks) and
their customers. At the time of the purchase of a forward foreign currency
exchange contract, any asset, including equity securities and non-investment
grade debt so long as the asset is liquid, unencumbered and marked to market
daily equal to the market value of the contract, minus the Series' initial
margin deposit with respect thereto, will be deposited in a segregated account
with the Fund's custodian bank to collateralize fully the position and thereby
ensure that it is not leveraged.

When a Series enters into a contract for the purchase or sale of a security
denominated in a foreign currency, it may want to establish the United States
dollar cost or proceeds, as the case may be. By entering into a forward contract
in United States dollars for the purchase or sale of the amount of foreign
currency involved in the underlying security transaction, a Series is able to
protect itself against a possible loss between trade and settlement dates
resulting from an adverse change in the relationship between the United States
dollar and such foreign currency. However, this tends to limit

<PAGE>

potential gains which might result from a positive change in such currency
relationships. The International and Asia Series also may hedge their foreign
currency exchange rate risk by engaging in currency financial futures and
options transactions.

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

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

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

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

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

REITs generally can be classified as follows:

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

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

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

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

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

The value of the Real Estate Series investments in debt securities will
change as interest rates fluctuate. When interest rates decline, the values of
such securities generally can be expected to increase, and when interest rates
rise, the values of such securities generally can be expected to decrease. The
lower-rated and comparable unrated debt securities described above are subject
to greater risks of loss of income and principal than are higher-rated fixed
income securities. The market value of lower-rated securities generally tends to
reflect the market's perception of the creditworthiness of the

<PAGE>

issuer and short-term market developments to a greater extent than is the case
with more highly rated securities, which reflect primarily functions in general
levels of interest rates.

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

REPURCHASE AGREEMENTS
The Money Market, Real Estate, International, Theme, Enhanced Index, Nifty
Fifty, Seneca Mid-Cap, Schafer Mid-Cap, Growth & Income, Value and Asia Series
may invest in repurchase agreements. However, no more than 10& of a Series' net
assets will be invested in repurchase agreements having maturities of more than
seven days. A repurchase agreement is a transaction where a Series buys a
security at one price and the seller simultaneously agrees to buy that same
security back at a higher price. Repurchase agreements will be entered into with
commercial banks, brokers and dealers considered by the Board of Trustees and
the Adviser, acting at the Board's direction, to be creditworthy. In addition,
the repurchase agreements are fully collateralized by the underlying instrument
and are marked to market every business day. However, the use of repurchase
agreements involves certain risks such as default by, or insolvency of, the
other party to the transaction.

JUNK BONDS
The Multi-Sector, International and Allocation Series may invest up to 50%,
10% and 5%, respectively, of total net assets in noninvestment grade debt
securities. The market prices of such lower-rated securities generally fluctuate
in response to changes in interest rates and economic conditions more than those
of higher-rated securities. Additionally, there is a greater possibility that an
adverse change in the financial condition of an issuer, particularly a higher
leveraged issuer, may affect its ability to make payments of income and
principal and increase the expenses of the Series seeking recovery from the
issuer. Lower-rated securities may be thinly traded and less liquid than
higher-rated securities and therefore harder to value and more susceptible to
adverse publicity concerning the issuer. A more detailed description of the
risks associated with High Yield-High Risk Securities appears under
"Multi-Sector Series - Risk Factors" in the Prospectus.

REAL ESTATE SECURITIES
The Real Estate Series will not invest in real estate directly, but only in
securities issued by real estate companies. However, the Portfolio may be
subject to risks similar to those associated with the direct ownership of real
estate because of its policy of concentrating in the securities of companies in
the real estate industry. These include declines in the value of real estate,
risks related to general and local economic conditions, dependence on management
skill, cash flow dependence, possible lack of availability of long-term mortgage
funds, over-building, extended vacancies of properties, decreased occupancy
rates and increased competition, increases in property taxes and operating
expenses, changes in neighborhood values and the appeal of the properties to
tenants and changes in interest rates.

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

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

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

<PAGE>

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

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

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

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

While the holding of currencies will permit the Series to take advantage of
favorable movements in the applicable exchange rate, it also exposes the Series
to risk of loss if such rates move in a direction adverse to the Series'
position. Such losses could reduce any profits or increase any losses sustained
by the Series from the sale or redemption of securities, and could reduce the
dollar value of interest or dividend payments received. In addition, the holding
of currencies could adversely affect the Series' profit or loss on currency
options or forward contracts, as well as its hedging strategies.

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

Interest on money borrowed will be an expense of those Series with respect
to which the borrowing has been made. Because such expense otherwise would not
be incurred, the net investment income of such Series is not expected to be as
high as it otherwise would be during periods when borrowings for investment
purposes are substantial.

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

An investment gains made with the additional monies borrowed in excess of
interest paid will cause the net assets value of such

<PAGE>

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

Schafer Mid-Cap, Growth & Income and Nifty Fifty Series may not borrow
except for emergency or other extraordinary purposes, only from a bank, and only
in an amount not to exceed 5% of the Series' total assets (33 1/3% in the case
of Growth & Income Series). Growth & Income and Nifty Fifty Series must also
maintain a 300% asset coverage ratio. Schafer Mid-Cap Series may collateralize
any such borrowings with up to 10% of its total assets; Growth & Income Series
may collateralize any such borrowing with up to 33 1/3% of its total assets.

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

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

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

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

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

<PAGE>

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

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

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

WHEN-ISSUED SECURITIES
The Enhanced Index and Seneca Mid-Cap Series may purchase securities on a
when-issued basis. New issues of certain securities are offered on a when-issued
basis, that is, delivery and payment for the securities normally takes place 15
to 45 days or more after the date of the commitment to purchase. The payment
obligation and the interest rate, if any, that will be received on the
securities are each fixed at the time the buyer enters into the commitment. The
Series will generally make a commitment to purchase such securities with the
intention of actually acquiring the securities. However, the Series may sell
these securities before the settlement date if it is deemed advisable as a
matter of investment strategy. When the Series purchases securities on a
when-issued basis, cash or liquid high quality debt securities equal in value to
commitments for the when-issued securities will be deposited in a segregated
account with the Series' custodian bank. Such segregated securities either will
mature or, if necessary, be sold on or before the settlement date.

Securities purchased on a when-issued basis are subject to changes in market
value. Therefore, to the extent the Series remains substantially fully invested
at the same time that they have purchased securities on a when-issued basis,
there will be greater fluctuations in the net asset values than if the Series
merely set aside cash to pay for when-issued securities. In addition, there will
be a greater potential for the realization of capital gains. When the time comes
to pay for when-issued securities, the Series will meet its obligations from
then available cash flow, the sales of securities or, although it would not
normally expect to do so, from the sale of the when-issued securities themselves
(which may have a value greater or less than the payment obligation). Lastly,
investing in when-issued securities includes the risk that the securities may
never be issued, in which event the Series may incur expenses associated with
unwinding such transactions.

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

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

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

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

(2) Make loans other than loans of securities secured by cash or cash
equivalents for the full value of the securities; any interest earned
from securities lending will inure to the benefit of the Series which
holds such securities. However, the purchase of debt securities which
are ordinarily

<PAGE>

purchased by financial institutions are not considered the loaning of
money.

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

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

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

(6) Invest in illiquid securities in an amount greater than 15% of
the net asset value of any Series' portfolio at the time any such
investment is made.

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

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

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

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

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

(12) Issue senior securities.

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

PORTFOLIO TURNOVER
- --------------------------------------------------------------------------------
The portfolio turnover rate of each Series is calculated by dividing the
lesser of purchases or sales of portfolio securities during the fiscal year by
the monthly average of the value of the Series' securities (excluding all
securities, including options, with maturities at the time of acquisition of one
year or less). All long-term securities, including long-term U.S. Government
securities, are included. A high rate of portfolio turnover generally involves
correspondingly greater brokerage commission expenses, which must be borne
directly by the Series. Turnover rates may vary greatly from year to year as
well as within a particular year and also may be affected by cash requirements
for redemptions of each Series' shares by requirements which enable the Fund to
receive certain favorable tax treatments. The portfolio turnover rates for each
Series (other

<PAGE>

than the Money Market, Enhanced Index, Nifty Fifty, Seneca Mid-Cap, Growth &
Income, Value and Schafer Mid-Cap Series) are set forth under "Financial
Highlights" in the Prospectus.

BALANCED SERIES
In the fiscal years ended December 31, 1997 and December 31, 1998, the
turnover rates for the equity portion of the Balanced Series were 226% and ___%,
respectively. The turnover rates for the fixed income securities were 114% and
___%, respectively, for the same periods.

ALLOCATION SERIES
In the fiscal years ended December 31, 1997 and December 31, 1998, the
turnover rates for the equity portion of the Allocation Series were 378% and
___%, respectively. The turnover rates for the fixed income securities were 318%
and ___%, respectively, for the same periods.

MANAGEMENT OF THE FUND

The Trustees and executive officers of the Fund and their principal
occupations for the last five years are set forth below. Unless otherwise noted,
the address of each executive officer and Trustee is 56 Prospect Street,
Hartford, Connecticut 06115. The Trustees and executive officers are listed
below.

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
Robert Chesek (63) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Wethersfield, CT 06109 Institutional Mutual Funds (1996-present). Vice President, Common
Phoenix Home Life Mutual Insurance Company (1980-1994).
Stock, Director/Trustee, the National Affiliated Investment Companies
(until 1993).

E. Virgil Conway (68) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present), Accuhealth (1994-present), Trism, Inc.
(1994-present), Realty Foundation of New York (1972-present), New
York Housing Partnership Development Corp. (Chairman) (1981-present)
and Fund Directions (Advisory Director) (1993-present).
Director/Trustee, Phoenix Funds (1993-present). Trustee,
Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Member, Audit Committee of the City of New
York (1981-1996). Advisory Director, Blackrock Fannie Mae Mortgage
Securities Fund (1989-1996). Member (1990-1995), Chairman
(1992-1995), Financial Accounting Standards Advisory Council.
Director/Trustee, the National Affiliated Investment Companies (until
1993).

Harry Dalzell-Payne (68) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Apartment 29G Mutual Funds (1996-present). Director, Duff & Phelps Utilities Tax-Free
New York, NY 10016 Income Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Director, Farragut Mortgage Co., Inc. (1991-1994).
Director/Trustee, the National Affiliated Investment Companies
(1983-1993). Formerly a Major General of the British Army.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
*Francis E. Jeffries (67) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps Institutional
Apt. 1601 Mutual Funds (1996-present). Director, Duff & Phelps Utilities Income
Naples, FL 33963 Inc. (1987-present), Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present) and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present). Director, The Empire District Electric Company
(1984-present). Director (1989-1997), Chairman of the Board
(1993-1997), President (1989-1993) and Chief Executive Officer
(1989-1995), Phoenix Duff & Phelps Corporation.

Leroy Keith, Jr. (59) Trustee Chairman and Chief Executive Officer, Carson Products Company
Chairman and Chief (1995-present). Director/Trustee, Phoenix Funds (1980-present).
Executive Officer Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Carson Product Company Institutional Mutual Funds (1996-present). Director, Equifax Corp.
64 Ross Road (1991-present) and Keystone International Fund, Inc. (1989-present).
Savannah, GA 30750 Trustee, Keystone Liquid Trust, Keystone Tax Exempt Trust, Keystone
Tax Free Fund, Master Reserves Tax Free Trust, and Master Reserves
Trust. President, Morehouse College (1987-1994). Chairman and Chief
Executive Officer, Keith Ventures (1992-1994). Director/Trustee, the
National Affiliated Investment Companies (until 1993).

*Philip R. McLoughlin (51) Trustee and President Chairman (1997-present), Director (1995-present), Vice Chairman
(1995-1997) and Chief Executive Officer (1995-present), Phoenix Duff &
Phelps Corporation. Director (1994-present) and Executive Vice
President, Investments (1988-present), Phoenix Home Life Mutual
Insurance Company. Director/Trustee and President, Phoenix Funds
(1989-present). Trustee and President, Phoenix-Aberdeen Series Fund
and Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc. (1995-present)
and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Director (1983-present) and Chairman (1995-present),
Phoenix Investment Counsel, Inc. Director (1984-present) and
President (1990-present), Phoenix Equity Planning Corporation.
Director (1993-present), Chairman (1993-present) and Chief Executive
Officer (1993-1995), National Securities & Research Corporation.
Director, Phoenix Realty Group, Inc. (1994-present), Phoenix Realty
Advisors, Inc. (1987-present), Phoenix Realty Investors, Inc.
(1994-present), Phoenix Realty Securities, Inc. (1994-present), PXRE
Corporation (Delaware) (1985-present), and World Trust Fund
(1991-present). Director and Executive Vice President, Phoenix Life
and Annuity Company (1996-present). Director and Executive Vice
President, PHL Variable Insurance Company (1995-present). Director,
Phoenix Charter Oak Trust Company (1996-present). Director and Vice
President, PM Holdings, Inc. (1985-present). Director and President,
Phoenix Securities Group, Inc. (1993-1995). Director (1992-present)
and President (1992-1994), W.S. Griffith & Co., Inc. Director
(1992-present) and President (1992-1994), Townsend Financial
Advisers, Inc. Director/Trustee, the National Affiliated Investment
Companies (until 1993).

**Everett L. Morris (69) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee, Duff & Phelps
Colts Neck, NJ 07722 Mutual Funds (1994-present). Trustee, Phoenix-Aberdeen Series Fund and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Director, Duff & Phelps Utilities Tax-Free Income Inc. (1991-present)
and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present). Director, Public Service Enterprise Group,
Incorporated (1986-1993). President and Chief Operating Officer,
Enterprise Diversified Holdings,
Incorporated (1989-1993).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
*James M. Oates (51) Trustee Chairman, IBEX Capital Markets LLC (1997-present). Managing Director,
Managing Director Wydown Group (1994-present). Director, Phoenix Duff & Phelps
The Wydown Group Corporation (1995-present). Director/Trustee, Phoenix Funds
IBEX Capital Markets LLC (1987-present). Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff
60 State Street & Phelps Institutional Mutual Funds (1996-present). Director, AIB
Suite 950 Govett Funds (1991-present), Blue Cross and Blue Shield of New
Boston, MA 02109 Hampshire (1994-present), Investors Financial Service Corporation
(1995-present), Investors Bank & Trust Corporation (1995-present),
Plymouth Rubber Co. (1995-present),Stifel Financial (1996-present)
and Command Systems, Inc. (1998-present). Vice Chairman,
Massachusetts Housing Partnership (1992-present). Member, Chief
Executives Organization (1996-present). Director (1984-1994),
President (1984-1994) and Chief Executive Officer (1986-1994),
Neworld Bank. Director/Trustee, the National Affiliated Investment
Companies (until 1993).

*Calvin J. Pedersen (56) Trustee Director (1986-present), President (1993-present) and Executive Vice
Phoenix Duff & Phelps President (1992-1993), Phoenix Duff & Phelps Corporation.
Corporation Director/Trustee, Phoenix Funds (1995-present). Trustee,
55 East Monroe Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Suite 3600 Mutual Funds (1996-present). President and Chief Executive Officer,
Chicago, IL 60603 Duff & Phelps Utilities Tax-Free Income Inc. (1995-present), Duff &
Phelps Utilities Income Inc. (1994-present) and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present).

**Herbert Roth, Jr. (69) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
P. O. Box 909 Mutual Funds (1996-present). Director, Boston Edison Company
Sherborn, MA 01770 (1978-present), Phoenix Home Life Mutual Insurance Company
(1972-present), Landauer, Inc. (medical services) (1970-present), Tech
Ops./Sevcon, Inc. (electronic controllers) (1987-present), and Mark IV
Industries (diversified manufacturer) (1985-present). Director, Key
Energy Group (oil rig service) (1988-1994). Director/Trustee, the
National Affiliated Investment Companies (until 1993).

Richard E. Segerson (52) Trustee Managing Director, Mullin Associates (1993-present). Director/Trustee,
102 Valley Road Phoenix Funds, (1993-present). Trustee, Phoenix-Aberdeen Series Fund
New Canaan, CT 06840 and Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Vice President and General Manager, Coats & Clark, Inc. (previously
Tootal American, Inc.) (1991-1993). Director/Trustee the National
Affiliated Investment Companies (1984-1993).

Lowell P. Weicker, Jr. (66) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present). Director, UST Inc. (1995-present), HPSC
Inc. (1995-present), Compuware (1996-present) and Burroughs Wellcome
Fund (1996-present). Visiting Professor, University of Virginia
(1997-present). Director, Duty Free International (1997). Chairman,
Dresing, Lierman, Weicker (1995-1996). Governor of the State of
Connecticut (1991-1995).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
Michael E. Haylon (40) Executive Director and Executive Vice President--Investments, Phoenix Duff &
Vice President Phelps Corporation (1995-present). Executive Vice President, Phoenix
Funds (1993-present) and Phoenix-Aberdeen Series Fund (1996-present).
Executive Vice President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds. Director
(1994-present), President (1995-present, Executive Vice President
(1994-1995), Vice President (1991-1994), Phoenix Investment Counsel,
Inc. Director (1994-present), President (1996-present), Executive
Vice President (1994-1996), Vice President (1993-1994), National
Securities & Research Corporation. Director, Phoenix Equity Planning
Corporation (1995-present). Senior Vice President, Securities
Investment, Phoenix Home Life Mutual Insurance Company (1993-1995).
Various other positions with Phoenix Home Life Mutual Insurance
Company (1990-1993).
</TABLE>

- ---------------
<TABLE>
<CAPTION>
<S> <C>

* Trustees identified with an asterisk are considered to be "interested persons" of the Fund within the meaning of the
definition set forth in Section 2(a)(19) of the Investment Company Act of 1940.
** Pursuant to the retirement Policy of the Phoenix Funds, Messrs. Morris and Roth will retire from the Board of Trustees
effective January 1, 1999.
</TABLE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
Roger Engemann (56) Senior Vice President President, Roger Engemann & Associates (1992-present). President and a
600 North Rosemead Boulevard Director, Pasadena Capital Corporation. Senior Vice President, The
Pasadena, CA 91107 Phoenix Edge Series Fund and Phoenix Series Fund (1998-present).
Managing Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present).

Ronald K. Jacks (30) Senior Vice President Portfolio Manager, Seneca Capital Management, LLC (1996-present).
909 Montgomery Street Portfolio Manager, GMG/Seneca Capital Management, LLC (1990-present).
San Francisco, CA 94133 Senior Vice President, The Phoenix Edge Series Fund and Phoenix
Strategic Equity Series Fund (1998-present). Managing Director,
Equities, National Securities & Research Corporation (1998-present).
Trustee, Seneca Funds (1996-1997).

William J. Newman (59) Senior Vice President Executive Vice President (1995-present) and Chief Investment Strategist
(1996-present). Phoenix Investment Counsel, Inc. Executive Vice
President and Chief Investment Strategist (1996-present), Senior Vice
President (1995-1996), National Securities & Research Corporation.
Senior Vice President, Phoenix Strategic Equity Series Fund
(1996-present), The Phoenix Edge Series Fund (1995-present), Phoenix
Multi-Portfolio Fund (1995-present). Phoenix Income and Growth Fund
(1996-present), Phoenix Series Fund (1996-present), Phoenix Strategic
Allocation Fund, Inc. (1996-present), Phoenix Worldwide Opportunities
Fund (1996-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-present).
Senior Vice President, Phoenix Equity Planning Corporation
(1995-1996). Vice President, Common Stock and Chief Investment
Strategist, Phoenix Home Life Mutual Insurance Company (April
1995-November 1995). Chief Investment Strategist, Kidder, Peabody
Co., Inc. (1993-1994). Managing Director, Equities, Bankers Trust
Company (1991-1993).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
Gail P. Seneca (42) Senior Vice President President, Chief Executive and Chief Investment Officer, Seneca Capital
909 Montgomery Street Management, LLC (1996-present). Chief Executive and Investment Officer,
San Francisco, CA 94133 and a managing general partner, GMG/Seneca Capital Management, LLC
(1989-present). President and a Trustee, Seneca Funds (1996-present).
Senior Vice President, The Phoenix Edge Series Fund (1998-present).

John S. Tilson (53) Senior Vice President Executive Vice President, Portfolio Manager and Securities Analyst,
600 North Rosemead Boulevard Roger Engemann & Associates (1983-present). An officer and a Director
Pasadena, CA 91107 of Pasadena Capital Corporation. Senior Vice President, The Phoenix
Edge Series Fund (1998-present).

James D. Wehr (40) Senior Vice President Managing Director, Fixed Income (1996-present), Vice President
(1991-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present), Vice President (1993-1996), National
Securities & Research Corporation. Senior Vice President, Phoenix
Multi-Portfolio Fund, Phoenix Series Fund, The Phoenix Edge Series
Fund, Phoenix California Tax Exempt Bonds, Inc., Phoenix Duff &
Phelps Institutional Mutual Funds, Phoenix Multi-Sector Fixed Income
Fund, Inc., Phoenix Multi-Sector Short Term Bond Fund, Phoenix Income
and Growth Fund and Phoenix Strategic Allocation Fund (1997-present).
Senior Vice President and Chief Investment Officer, Duff & Phelps
Utilities Tax-Free Income Inc. (1997-present). Vice President,
Phoenix Multi-Portfolio Fund (1988-1997), Phoenix Series Fund
(1990-1997), The Phoenix Edge Series Fund (1991-1997), Phoenix
California Tax Exempt Bonds, Inc. (1993-1997) and Phoenix Duff &
Phelps Institutional Mutual Funds (1996-1997). Managing Director,
Public Fixed Income, Phoenix Home Life Insurance Company (1991-1995).
Various positions with Phoenix Home Life Mutual Insurance Company
(1981-1991).

Hugh Young (39) Senior Senior Vice President, Phoenix-Aberdeen Series Fund and The Phoenix
Aberdeen Asset Managers LTD Vice President Edge Series Fund (1996-present). Director, Phoenix-Aberdeen
88A Circular Road International Advisors, LLC. Far East Investment Director, Aberdeen
Singapore 049439 Asset Management Asia Limited (1988-present). Managing Director,
Aberdeen Asset Management Asia Limited (1992-present). Director,
Abtrust Asian Smaller Companies Investment Trust plc (1995-present),
Abtrust New Dawn Investment Trust plc (1989-present), Abtrust
Emerging Asia Investment Trust Limited (1990-present), JF Philippine
Fund Inc. and Apollo Tiger.

David L. Albrycht (36) Vice President Managing Director, Fixed Income (1996-present) and Vice President
(1995-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present) and Investment Officer (1994-1996),
National Securities & Securities Research Corporation. Vice
President, Phoenix Multi-Portfolio Fund (1993-present), Phoenix
Multi-Sector Short Term Bond Fund (1993-present), Phoenix
Multi-Sector Fixed Income Fund, Inc. (1994-present). The Phoenix Edge
Series Fund (1997-present) and Phoenix Series Fund (1997-present).
Portfolio Manager, Phoenix Home Life Mutual Insurance Company
(1995-1996).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
Christian C. Bertelsen (55) Vice President Managing Director, Value Equities, Phoenix Investment Counsel, Inc.
(1997-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Investment Trust 97 (1997-present). Senior
Vice President and Chief Investment Officer, Zurich Kemper
(1996-1997). Vice President and Portfolio Manager, Zurich Kemper
Small Cap Fund and Zurich Kemper Contrarian Fund (1996-1997). Senior
Vice President, Eagle Asset Management (1993-1996). Vice President
and Portfolio Manager, Heritage Value Fund and Golden Select Variable
Annuity Value Trust (1995-1996). Senior Vice President, Colonial
Equity Management, Inc. (1986-1993). Vice President and Portfolio
Manager, The Colonial Fund (1986-1993). Assistant Vice President and
Coportfolio Manager, Colonial Small Stock Fund (1990-1993)and
Colonial Utilities Fund (1991-1993). Assistant Vice President,
Colonial Growth Shares (1991-1993).

Mary E. Canning (41) Vice President Managing Director, Equities (1996-present) and Investment Strategist
(1996-1998), Vice President (1991-1996), Phoenix Investment Counsel,
Inc. Vice President, The Phoenix Edge Series Fund (1987-present) and
Phoenix Strategic Allocation Fund, Inc. (1996-present). Managing
Director and Investment Strategist, National Securities & Research
Corporation (1996-1998). Vice President, Phoenix Series Fund
(1987-1997). Associate Portfolio Manager, Common Stock, Phoenix Home
Life Mutual Insurance Company (1989-1995).

Steven L. Colton (39) Vice President Managing Director, Value Equities, Phoenix Investment Counsel, Inc.
(1997-present). Managing Director, Value Equities, National
Securities & Research Corporation (1998-present). Vice President, The
Phoenix Edge Series Fund (1997-present), Phoenix Series Fund
(1997-present), Phoenix Equity Series Fund (1997-present), and
Phoenix Income and Growth Fund (1998-present). Vice President/Senior
Portfolio Manager, American Century Investment Management
(1987-1997). Portfolio Manager, American Century/Benham Income and
Growth Fund (1990-1997), American Century/Benham Equity Growth Fund
(1991-1996) and American Century/Benham Utilities Income Fund
(1993-1997).

Timothy Devlin (34) Vice President Vice President and Portfolio Manager, J.P. Morgan Investment Company
J.P. Morgan Investment and Morgan Guaranty Trust Company of NY (1996-present). Vice
Management Inc. President, The Phoenix Edge Series Fund (1997-present). First Vice
522 Fifth Avenue President and Portfolio Manager, Mitchell Hutchins Asset Management,
New York, NY 10036 Inc. (1987-1996).

John D. Kattar (42) Vice President Managing Director, Equities, Phoenix Investment Counsel, Inc.
(1997-present). Vice President, The Phoenix Edge Series Fund
(1997-present), Phoenix Series Fund (1997-present), Phoenix-Aberdeen
Series Fund (1997-present) and Phoenix Duff & Phelps Institutional
Mutual Funds (1998-present). Director (1989-1997), Senior Vice
President (1993-1996), Baring Asset Management Company, Inc.
Director, Baring Mutual Fund Management (Luxembourg) (1995-1997).

William E. Keen III (34) Vice President Assistant Vice President (1996-present), Director of Mutual Fund
100 Bright Meadow Blvd. Compliance (1995-1996), Phoenix Equity Planning Corporation. Vice
P.O. Box 2200 President, Phoenix Funds, Phoenix-Aberdeen Series Fund and Phoenix Duff
Enfield, CT 06083-2200 & Phelps Institutional Mutual Funds (1996-present). Assistant Vice
President, US Affinity Investments L.P. (1994-1995). Treasurer and
Secretary, US Affinity Funds (1994-1995). Manager, Fund Administration,
SEI Corporation (1991-1994).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
David Lui (38) Vice President Managing Director, Equities (1998-present), Portfolio Manager, Equities
(1996-1998), Phoenix Investment Counsel, Inc. and National Securities &
Research Corporation. Vice President, The Phoenix Edge Series Fund,
Phoenix Worldwide Opportunities Fund and Phoenix Multi-Portfolio Fund
(1996-present). Associate Portfolio Manager, International
Portfolios, Phoenix Home Life Mutual Insurance Company (1995-1996).
Vice President, Asian Equities, Alliance Capital Management
(1993-1995).

William R. Moyer (53) Vice President Senior Vice President and Chief Financial Officer, Phoenix Duff &
100 Bright Meadow Blvd. Phelps Corporation (1995-present). Director (1998-present), Senior Vice
P.O. Box 2200 President, Finance (1990-present), Chief Financial Officer
Enfield, CT 06083-2200 (1996-present), and Treasurer (1994-1996 and 1998-present), Phoenix
Equity Planning Corporation. Director (1998-present), Senior Vice
President (1990-present), Chief Financial Officer (1996-present) and
Treasurer (1994-present), Phoenix Investment Counsel, Inc. Director
(1998-present), Senior Vice President, Finance (1993-present), Chief
Financial Officer (1996-present), and Treasurer (1994-present),
National Securities & Research Corporation. Senior Vice President and
Chief Financial Officer, Duff & Phelps Investment Management Co.
(1996-present). Vice President, Phoenix Funds (1990-present),
Phoenix-Duff & Phelps Institutional Mutual Funds (1996-present),
Phoenix-Aberdeen Series Fund (1996-present). Senior Vice President
and Chief Financial Officer, W. S. Griffith & Co., Inc. (1992-1995)
and Townsend Financial Advisers, Inc. (1993-1995). Vice President,
Investment Products Finance, Phoenix Home Life Mutual Insurance
Company (1990-1995). Vice President, the National Affiliated
Investment Companies (until 1993).

Leonard J. Saltiel (44) Vice President Managing Director, Operations and Service (1996-present), Senior Vice
President (1994-1996), Phoenix Equity Planning Corporation. Vice
President, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Aberdeen Series
Fund (1996-present). Vice President, National Securities & Research
Corporation (1994-1998). Vice President, Investment Operations,
Phoenix Home Life Mutual Insurance Company (1994-1995). Various
positions with Home Life Insurance Company and Phoenix Home Life
Mutual Insurance Company (1987-1994).

Julie L. Sapia (41) Vice President Director, Money Market Trading (1998-present), Head Money Market Trader
(1997-1998), Money Market Trader (1995-1997), Phoenix Investment
Counsel, Inc. Vice President, The Phoenix Edge Series Fund, Phoenix
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds and
Phoenix-Aberdeen Series Fund (1997-present). Money Market Trader,
Phoenix Home Life Mutual Insurance Company (1991-1995).

Michael Schatt (51) Vice President Managing Director, Phoenix Duff & Phelp Corporation (1994-present).
55 East Monroe Street Senior Vice President, Duff & Phelps Investment Management Co.
Suite 3600 (1997-present). Vice President, Phoenix Realty Securities, Inc.
Chicago, IL 60603 (1997-present). Vice President, Phoenix Duff & Phelps Institutional
Mutual Funds, Phoenix Multi-Portfolio Fund and The Phoenix Edge
Series Fund (1997-present). Director, Real Estate Advisory Practice,
Coopers & Lybrand, LLC (1990-1994).

Pierre G. Trinque (42) Vice President Managing Director, Large Cap Growth Team (1997-present), Managing
Director, Director of Equity Research (1996-1997), Senior Research
Analyst, Equities (1996) and Associate Portfolio Manager,
Institutional Funds (1992-1995), Phoenix Investment Counsel, Inc.
Vice President, The Phoenix Edge Series Fund and Phoenix Series Fund
President (1997-present).
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING PAST FIVE YEARS
- ---------------- ------------- ----------------------
<S> <C> <C>
James C. Wiess (37) Vice President Vice President and Portfolio Manager, J.P. Morgan Investment Management
J.P. Morgan Investment Inc. and Morgan Guaranty Trust Company of New York (1992-present) Vice
Management Inc. President, The Phoenix Edge Series Fund (8/97-present).
522 Fifth Avenue
New York, NY 10036

Nancy G. Curtiss (45) Treasurer Treasurer (1996-present), Vice President, Fund Accounting (1994-1996),
Phoenix Equity Planning Corporation. Treasurer, Phoenix Funds
(1994-present), Phoenix-Aberdeen Series Fund (1996-present) and
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present).
Second Vice President and Treasurer, Fund Accounting, Phoenix Home
Life Mutual Insurance Company (1994-1995). Various positions with
Phoenix Home Life Mutual Insurance Company (1987-1994).

G. Jeffrey Bohne (50) Secretary Vice President and General Manager, Phoenix Home Life Mutual Insurance
101 Munson Street Co. (1993-present). Vice President, Mutual Fund Customer Service
Greenfield, MA 01301 (1996-present), Vice President, Transfer Agency Operations (1993-1996),
Phoenix Equity Planning Corporation. Secretary and/or Clerk, Phoenix
Funds (1993-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-present). Vice
President, Home Life of New York Insurance Company (1984-1992).
</TABLE>
- ---------------

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

At December 31, 1998, the Trustees and officers as a group owned none of the
then outstanding shares of the Fund.

For services rendered to the Fund during the fiscal year ended December 31,
1998, the Trustees received an aggregate of $_______ from the Fund as Trustees'
fees. For service on the Boards of the Phoenix Funds, each Trustee who is not a
full-time employee of the Advisers or any of their affiliates currently receives
a retainer at the annual rate of $40,000 and $2,500 per joint meeting of the
Boards. Each Trustee who serves on the Audit Committee receives a retainer at
the annual rate of $2,000 and $2,000 per joint Audit Committee meeting attended.
The current members of the Audit Committee are Messrs. Conway, Roth, Segerson
and Weicker. Each Trustee who serves on the Executive Committee and who is not
an interested person of the Fund receives a retainer at the annual rate of
$1,000 and $1,000 per joint Executive Committee meeting attended. The current
members of the Executive Committee are Messrs. Conway, Dalzell-Payne,
McLoughlin, Morris, Oates and Roth. The function of the Executive Committee is
to serve as a contract review, compliance review and performance review delegate
of the full Board of Trustees. The foregoing fees do not include the
reimbursement of expenses incurred in connection with meeting attendance.
Trustee costs are allocated equally to each of the Series of the Funds within
the Fund complex. Officers and employees of the Adviser who are "interested
persons" are compensated by the Adviser and receive no compensation from the
Fund.

23
<PAGE>

For the Fund's fiscal year ended December 31, 1998, the Trustees received the
following compensation:

<TABLE>
<CAPTION>
PENSION OR
RETIREMENT TOTAL COMPENSATION
BENEFITS FROM FUND AND
AGGREGATE ACCRUED AS PART ESTIMATED ANNUAL FUND COMPLEX
COMPENSATION OF BENEFITS UPON (13 FUNDS)
NAME FROM FUND FUND EXPENSES RETIREMENT PAID TO TRUSTEES
---- --------- ------------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Robert Chesek $13,900 $57,750
E. Virgil Conway $18,090 $74,500
Harry Dalzell-Payne $15,825 $65,250
Francis E. Jeffries $13,500* None for None for $56,250
Leroy Keith, Jr. $13,900 any Trustee any Trustee $57,750
Philip R. McLoughlin $0 $0
Everett L. Morris $15,425* $64,500
James M. Oates $15,425 $63,750
Calvin J. Pedersen $0 $0
Herbert Roth, Jr. $18,770* $76,250
Richard E. Segerson $15,940 $66,000
Lowell P. Weicker, Jr. $15,188 $62,500
</TABLE>

* This compensation (and the earnings thereon) is deferred pursuant to the
Directors' Deferred Compensation Plan. At December 31, 1998, the total amount
of deferred compensation (including interest and other accumulation earned on
the original amounts deferred) accrued for Messrs. Jeffries, Morris and Roth
was $60,161.00, $126,891.00 and $137,672.00, respectively. At present, by
agreement among the Fund, the Distributor and the electing director, director
fees that are deferred are paid by the Fund to the Distributor. The liability
for the deferred compensation obligation appears only as a liability of the
Distributor.

THE INVESTMENT ADVISERS
- --------------------------------------------------------------------------------
The Fund has entered into Investment Advisory Agreements ("Agreements") with
Phoenix Investment Counsel, Inc. ("PIC"), DPIM and Phoenix-Aberdeen
International Advisors, LLC ("PAIA") whose offices are located in Hartford,
Connecticut.

Phoenix is in the business of writing ordinary and group life and health
insurance and annuities. At December 31, 1998, Phoenix had $____ billion
consolidated assets. PHL Variable writes variable annuities, and at December 31,
1998 had assets of $____ million. PLAC writes variable universal life insurance
policies and at December 31, 1998 had assets of $____ million. PEPCO performs
bookkeeping and pricing and administrative services for the Fund. It also
provides bookkeeping and pricing services to other investment companies advised
by PIC and its affiliates. PEPCO is registered as a broker-dealer in 50 states.
The executive offices of Phoenix and PAIA are located at One American Row,
Hartford, Connecticut 06102 and the principal offices of Equity Planning are
located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut
06083-2200.

INVESTMENT ADVISERS
The Fund's investment adviser to all Series except the Real Estate and Asia
Series is Phoenix Investment Counsel, Inc. ("PIC"), which is located at 56
Prospect Street, Hartford, Connecticut 06115. All of the outstanding stock of
PIC is owned by Phoenix Equity Planning Corporation ("PEPCO"), a subsidiary of
Phoenix Duff & Phelps Corporation ("PD&P"). Phoenix owns a controlling interest
in PD&P. PEPCO also performs bookkeeping, pricing and administrative services
for the Fund. PEPCO is registered as a broker-dealer in 50 states. The executive
offices of Phoenix are located at One American Row, Hartford, Connecticut 06102;
the executive offices of PD&P are located at 56 Prospect Street, Hartford,
Connecticut 06115, and the principal offices of PEPCO are located at 100 Bright
Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200. In addition to
the Fund, PIC serves as investment adviser to the Phoenix Series Fund, Phoenix
Strategic Allocation Fund, Inc. Phoenix Strategic Equity Series Fund (all series
other than Equity Opportunities Series), Phoenix Duff & Phelps Institutional
Mutual Funds (all portfolios other than the Real Estate Equity Securities
Portfolio, Core Equity Portfolio and the Enhanced Reserves Portfolio), Phoenix
Growth and Income Fund of Phoenix Equity Series Fund, Phoenix Investment Trust
97 and Phoenix Multi-Portfolio Fund (all portfolios other than the Real Estate
Securities Portfolio) and as subadviser to Sun America Series Trust. PIC also
serves as subadviser to the Asia Series. PIC was originally organized in 1932 as
John P. Chase, Inc. As of December 31, 1997, PIC has approximately $20.5 billion
in assets under management.

All of the outstanding stock of PIC is owned by PEPCO, a subsidiary of
Phoenix Duff & Phelps Corporation ("PD&P") of Chicago, Illinois. Phoenix owns a
majority interest in PD&P. PIC also serves as subadviser to the Asia Series.

24
<PAGE>

J.P. Morgan Investment Management, Inc. ("J.P. Morgan"), a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated ("JPM & Co."), serves as subadviser
to the Enhanced Index Series. J.P. Morgan's principal place of business is
located at 522 Fifth Avenue, New York, New York 10036. J.P. Morgan presently
serves as an investment manager for corporate, public and union employee benefit
funds, foundations, endowments, insurance companies, government agencies and the
accounts of other institutional investors. J.P. Morgan was founded in 1984. JPM
& Co., through J.P. Morgan and its other investment management subsidiaries, had
approximately $____ billion in assets under management as of December 31, 1998.

Roger Engemann & Associates ("Engemann") serves as subadviser to the Nifty
Fifty Series. Engemann is a wholly owned subsidiary of Pasadena Capital
Corporation, which in turn is a wholly owned subsidiary of PD&P. Engemann has
been engaged in the investment management business since 1969, and provides
investment counseling services to retirement plans, colleges, corporations,
trusts and individuals. Engemann also serves as investment adviser to the
Phoenix-Engemann Funds. As of December 31, 1998, Engemann had approximately
$____ billion in assets under management.

Seneca Capital Management, LLC serves as subadviser to the Seneca Mid-Cap
Series. PD&P owns a majority interest in Seneca; the balance is owned by certain
of its employees, including Gail Seneca, one of the portfolio management team
leaders, and the former limited partners of GMG/Seneca Capital Management, LLC.
Seneca (including its predecessor, GMG/Seneca Capital Management LP) has been an
investment adviser since 1989, managing equity and fixed-income securities
portfolios primarily for institutions and individuals. As of December 31, 1998,
Seneca had approximately $____ billion in assets under management.

Schafer Capital Management, Inc. ("Schafer"), serves as subadviser to the
Schafer Mid-Cap Series. Schafer's principal place of business is located at 101
Carnegie Center, Suite 107, Princeton, New Jersey. Schafer has been engaged in
the investment management business since 1981, specializing in long-term
investing in the equity markets. As of December 31, 1998, Schafer had
approximately $____ billion in assets under management.

The offices of Duff & Phelps Investment Management Co. ("DPIM") are located
at 55 East Monroe Street, Suite 3600, Chicago, Illinois 60603. DPIM also serves
as investment adviser to the Core Equity Fund of Phoenix Equity Series Fund, the
Enhanced Reserves, Core Equity and Real Estate Equity Securities Portfolio of
Phoenix Duff & Phelps Institutional Mutual Funds, the Real Estate Securities
Portfolio of Phoenix Multi-Portfolio Fund and three closed-end funds: Duff &
Phelps Utilities Income Inc., Duff & Phelps Utilities Tax-Free Income Inc. and
Duff & Phelps Utility and Corporate Bond Trust Inc. The investment adviser at
inception of the Real Estate Series was Phoenix Realty Securities, Inc. ("PRS"
or "Adviser") PRS is a wholly-owned indirect subsidiary of Phoenix Home Life. On
March 2, 1998, DPIM purchased the management rights for the Series from PRS and
PRS's contract was assigned to DPIM. As of December 31, 1998, DPIM had
approximately $____billion in assets under management.

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

Aberdeen Asset Management was founded in 1983 and through subsidiaries
operating from offices in Aberdeen, Scotland; London, England; Singapore and
Fort Lauderdale, Florida, provides investment management services to unit and
investment trusts, segregated pension funds and other institutional and private
portfolios. As of December 31, 1998, Aberdeen Asset Management, and its advisory
subsidiaries, had approximately $____billion in assets under management.

Philip R. McLoughlin, President and Trustee of the Trust, is a director and
officer of PIC. Michael E. Haylon, an officer of the Trust, is a director and
officer of PIC and also an officer of DPIM. William R. Moyer, an officer of the
Trust, is a director and officer of PIC and also an officer of DPIM. David L.
Albrycht, Curtiss O. Barrows, Christian C. Bertelson, Mary E. Canning, Steven L.
Colton, J. Roger Engemann, John D. Kattar, William E. Keen, III, David Lui,
James E. Mair, William J. Newman, Julie L. Sapia, Thomas N. Steenburg, John S.
Tilson, Pierre G. Trinque and James D. Wehr, officers of the Trust, are officers
of PIC. Michael Schatt and Thomas N. Steenburg, officers of the Trust, are also
officers of DPIM. Hugh Young, an officer of the Trust, is a director and officer
of PAIA.

The Agreements provide that each Adviser shall furnish continuously, at its
own expense, an investment program for each of the Series, subject at all times
to the supervision of the Trustees. They also provide that all costs and
expenses not specifically enumerated as payable by the Advisers shall be paid by
the Fund or by Phoenix, PHL Variable and PLAC. The Advisers or Phoenix, PHL
Variable and PLAC have agreed to reimburse the Fund for certain operating
expenses for all Series. Each Series (except the International, Real Estate,
Theme, Asia, Enhanced Index and Seneca Mid-Cap Series) pays a portion or all of
its total operating expenses other than the management fee, up to .15% of its
total average net assets. The International, Real Estate, Theme, Asia, Enhanced
Index and Seneca Mid-Cap Series pay total operating expenses other than the
management fee up to .40%, .25%, .25%, .25%, .10%, and .25%, respectively, of
its total average net assets. Expenses above these limits are paid by the
Advisers, Phoenix, PHL Variable or PLAC.

The Agreements also provide that the Advisers will reimburse the Fund for
the amount, if any, by which the total operating expenses (including the
Adviser's compensation, but excluding interest, taxes, brokerage fees and
commissions and extraordinary expenses) for any fiscal year exceed the level of
expenses which the Fund is permitted to bear under the most restrictive expense
limitation.

<PAGE>

To the extent that any expenses are paid by the Fund, they will be paid by
the Series incurring them or, in the case of general expenses, may be charged
among the Series in relation to the benefits received by the shareholders, as
determined by the financial agent under the supervision of the Board of
Trustees. Such expenses shall include, but shall not be limited to, all expenses
(other than those specifically referred to as being borne by the Advisers,
Phoenix, PHL Variable or PLAC) incurred in the operation of the Fund and any
offering of its shares, including, among others, interest, taxes, brokerage fees
and commissions, fees of Trustees, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of repurchase and
redemption of shares, certain expenses of issue and sale of shares, association
membership dues, charges of custodians, transfer agents, dividend disbursing
agents and financial agents, bookkeeping, auditing and legal expenses. The Fund,
Phoenix, PHL Variable or PLAC also will pay the fees and bear the expense of
registering and maintaining the registration of the Fund and its shares with the
SEC and the expense of preparing and mailing prospectuses and reports to
shareholders.

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

The Investment Advisory Agreements also provide that, as full compensation
for the services and facilities furnished to the Fund, the Advisers shall be
compensated as follows:

PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
RATE FOR
RATE FOR FIRST RATE FOR NEXT EXCESS OVER
SERIES $250,000,000 $250,000,000 $500,000,000
- ------ ------------ ------------ ------------
Money Market... .40% .35% .30%
Multi-Sector... .50% .45% .40%
Balanced....... .55% .50% .45%
Allocation..... .60% .55% .50%
Growth......... .70% .65% .60%
International.. .75% .70% .65%
Theme.......... .75% .70% .65%
Nifty Fifty.... .90% .80% .70%
Growth & Income .70% .65% .60%
Value.......... .70% .65% .60%

PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
SERIES
- ------
Enhanced Index.. .45%
Seneca Mid-Cap.. .80%
Schafer Mid-Cap. 1.05%

DUFF & PHELPS INVESTMENT MANAGEMENT CO.
---------------------------------------
RATE FOR
RATE FOR FIRST RATE FOR NEXT EXCESS OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate..... .75% .70% .65%

PHOENIX-ABERDEEN INTERNATIONAL ADVISORS, LLC
--------------------------------------------
SERIES
- ------
Asia............ 1.00%

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

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

Pursuant to a subadvisory agreement with the Fund, PIC delegates certain
investment decisions and research functions with respect to the Enhanced Index
Series to J.P. Morgan, with respect to the Nifty Fifty Series to Engemann, with
respect Seneca Mid-Cap Series to Seneca, and with respect to Schafer Mid-Cap
Series to Schafer for which they are paid a fee by PIC. In accordance with the
subadvisory agreement between the Fund and J.P. Morgan, J.P. Morgan is paid a
monthly fee at the annual rate of .25% of the average aggregate daily net asset
values of the Enhanced Index Series up to $100 million and .20% of such value in
excess of $100 million. Pursuant to the subadvisory agreement between the Fund
and Engemann, Engemann is paid a monthly fee at the annual rate of .45% of the
average aggregate daily net asset values of the Nifty Fifty Series up to
$250,000,000, .45% of such values between $250,000,000 and $500,000,000, and
.40% of such values in excess of $500,000,000. Pursuant to the subadvisory
agreement between the Fund and Seneca, Seneca is paid a monthly fee at the
annual rate of .40% of the average aggregate daily net asset values of the
Seneca Mid-Cap Series. In accordance with the subadvisory agreement between the
Fund and Schafer, Schafer is paid a monthly fee at the annual rate of .85% of
the average aggregate daily net asset values of the Schafer Mid-Cap Series up to
$175 million and .80% of such value in excess of $175 million. The subadvisory
agreements relating to the Enhanced Index, Nifty Fifty, Seneca Mid-Cap and
Schafer Mid-Cap Series provide, among other things, that J.P. Morgan, Engemann,
Seneca and Schafer shall effectuate the purchase and sales of securities for the
Series and provide related advisory services.

For providing research and other domestic advisory services to the Asia
Series, PAIA pays to PIC a monthly subadvisory fee at an annual rate equivalent
to .30% of the average aggregate daily net asset value of the Series. For
implementing certain portfolio transactions and providing research and other
services to the Series, PAIA also pays a monthly subadvisory fee to Aberdeen
Fund

<PAGE>

Managers, Inc. equivalent to .40% of the average aggregate daily net asset
value of the Series. For implementing certain portfolio transactions, providing
research and other services with regard to i.e. investments in particular
geographic areas, Aberdeen Fund Managers, Inc. shall engage the services of its
affiliates, Aberdeen Fund Managers Ltd. and Aberdeen Asset Management Asia
Limited for which such entities shall be paid a fee by Aberdeen Fund Managers,
Inc.

CUSTODIAN
- -------------------------------------------------------------------------------
The securities and cash of the Multi-Sector, Money Market, Growth, Strategic
Allocation, Balanced and Strategic Theme Series are held by The Chase Manhattan
Bank, N.A. under the terms of a custodian agreement. The address for The Chase
Manhattan Bank, N.A., is 1 Chase Manhattan Plaza, Floor 13B, New York, NY 10081.
The securities and cash of the International and Asia Series are held by Brown
Brothers Harriman & Co. under the terms of a custodian agreement. The address
for Brown Brothers Harriman & Co. is 40 Water Street, Boston, Massachusetts
02109, Attention: Manager, Securities Department. The securities and cash of the
Real Estate, Growth & Income, Value, Engemann Nifty Fifty, Seneca Mid-Cap,
Schafer Mid-Cap and Enhanced Index Series are held by State Street Bank and
Trust Company, located at 1 Heritage Drive, P2N, North Quincy, Massachusetts
02171. The Fund permits the Custodian to deposit some or all of its securities
in central depository systems as allowed by Federal law. The use of foreign
custodians and foreign central depositories has been authorized by the Board of
Trustees of the Fund if certain conditions are met.

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

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

FINANCIAL AGENT
Under a Financial Agent Agreement, PEPCO acts as financial agent of the Fund
and, as such, is responsible for certain administrative functions and the
bookkeeping and pricing functions for the Fund. For its services as financial
agent, PEPCO receives a fee based on the average of the aggregate daily net
asset values of the Fund at the annual rate per each $1,000,000 of $600. PFPC,
Inc. has been retained by PEPCO to perform certain administrative and pricing
services for the Fund for which PEPCO pays PFPC a fee. While PEPCO has delegated
certain responsibilities to PFPC, PEPCO retains full responsibility for the
performance of all duties of financial agent.

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

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

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

27
<PAGE>

in determining the overall reasonableness of brokerage commissions paid by the
Fund.

For the fiscal years ended December 31, 1996, 1997, and 1998 brokerage
commissions paid by the Fund on portfolio transactions totaled $6,749,696,
$10,220,704 and $_____, respectively. None of such commissions was paid to a
broker who was an affiliated person of the Fund or an affiliated person of such
a person or, to the knowledge of the Fund, to a broker an affiliated person of
which was an affiliated person of the Fund or the Adviser. Total brokerage
commissions paid during the fiscal year ended December 31, 1998 included
brokerage commissions of $_____ on portfolio transactions aggregating $_____
executed by brokers who provided research and other statistical and factual
information.

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

The Fund has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is consistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Fund. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs shared pro rata based on the
Fund's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.

DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The net asset value per share of each Series is determined as of the close
of regular trading of the NYSE on days when the NYSE is open for trading. The
NYSE will be closed on the following observed national holidays: New Year's Day,
Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Since the Fund
does not price securities on weekends or United States national holidays, the
net asset value of a Series' foreign assets may be significantly affected on
days when the investor has no access to the Fund. The net asset value per share
of a Series is determined by adding the values of all securities and other
assets of the Series, subtracting liabilities and dividing by the total number
of outstanding shares of the Series. Assets and liabilities are determined in
accordance with generally accepted accounting principles and applicable rules
and regulations of the SEC.

A security that is listed or traded on more than one exchange is valued at
the quotation on the NYSE determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Series which invests
in foreign securities contemporaneously with the determination of the prices of
the majority of the portfolio securities of such Series. All assets and
liabilities initially expressed in foreign currency values will be converted
into United States dollar values at the mean between the bid and ask quotations
of such currencies against United States dollars as last quoted by any
recognized dealer. If an event were to occur after the value of an investment
was so established but before the net asset value per share was determined,
which was likely to materially change the net asset value, then the instrument
would be valued using fair value considerations by the Trustees or their
delegates. If at any time a Series has investments where market quotations are
not readily available, such investments are valued at the fair value thereof as
determined in good faith by the Trustees although the actual calculations may be
made by persons acting pursuant to the direction of the Trustees.

INVESTING IN THE FUND
- --------------------------------------------------------------------------------
Shares of the Fund are not available to the public directly. Although shares
of the Fund are owned by the Accounts, Contract Owners and Policyowners do have
voting rights with respect to those shares, as described in the Prospectus under
"Shares of Beneficial Interest." You may invest in the Fund by buying a Variable
Accumulation Annuity Contract or a Variable Universal Life Insurance Policy from
Phoenix, PHL Variable or PLAC and directing the allocation of the net purchase
payment(s) to the Subaccounts corresponding to the Series of the Fund. Phoenix,
PHL Variable and

<PAGE>

PLAC will, in turn, invest payments in shares of the Fund as
the investor directs at net asset value next determined with no sales load.

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

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

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

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

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

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

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

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The financial statements and the notes thereto relating to the Fund and the
report of Price Waterhouse LLP with respect thereto for the fiscal year ended
December 31, 1998 are contained in the Fund's Annual Report. The Annual Report
is available by calling Variable Products Operations at (800) 447-4312 or
writing to Phoenix Variable Products Mail Operations, P.O. Box 8027, Boston, MA
02266-8027. Phoenix, PHL Variable and PLAC have agreed to send a copy of both
the Annual Report and the Semiannual Report to Shareholders containing the
Fund's financial statements to every Contract Owner or Policyowner having an
interest in the Accounts. The Annual Report for the fiscal period ended December
31, 1998 is included in this SAI.

<PAGE>

ANNUAL REPORT
DECEMBER 31, 1998

THE PHOENIX EDGE SERIES FUND

[TO BE FILED BY AMENDMENT]

<PAGE>

THE PHOENIX EDGE SERIES FUND

PART C--OTHER INFORMATION

ITEM 24.FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements.

1. Condensed Financial Information is included in Part A of the
Registration Statement.

2. Financial Statements and Notes, thereto, and are included in
the Annual Report to Shareholders for the period ended
December 31, 1998, to be filed by Amendment.

(b) Exhibits:

1. Declaration of Trust of the Registrant dated February 18,
1986, filed with the Registration Statement on Form N-1A on
April 18, 1986 and filed via Edgar with Post-Effective
Amendment No. 18 on June 20, 1996.

1.1 Amendment to Declaration of Trust, establishing the
International Series, filed with Post-Effective Amendment
No. 7 on March 2, 1992 and filed via Edgar with Post-Effective
Amendment No. 20 on April 29, 1997.

1.2 Amendment to Declaration of Trust, conforming the Fund's
borrowing restrictions to California Department's Borrowing
Guidelines, filed with Post-Effective Amendment No. 7 on March
2, 1992 and filed via Edgar with Post-Effective Amendment
No. 20 on April 29, 1997.

1.3 Amendment to Declaration of Trust, establishing the Balanced
Series, filed with Post-Effective Amendment No. 8 on April 28,
1992 and filed via Edgar with Post-Effective Amendment No. 20
on April 29, 1997.

1.4 Amendment to Declaration of Trust, establishing the Real
Estate Securities Series, filed with Post-Effective Amendment
No. 12 on February 16, 1995 and filed via Edgar with
Post-Effective Amendment No. 20 on April 29, 1997.

1.5 Amendment to Declaration of Trust, establishing the Strategic
Theme Series, filed via Edgar with Post-Effective Amendment
No. 16 on January 29, 1996.

1.6 Amendment to Declaration of Trust, changing the name of the
Series currently designated "Bond Series" to the "Multi-Sector
Fixed Income Series," filed via Edgar with Post-Effective
Amendment No. 17 on April 17, 1996.

1.7 Amendment to Declaration of Trust, establishing the Aberdeen
New Asia Series, filed via Edgar with Post-Effective Amendment
No. 19 on September 3, 1996.

1.8 Amendment to Declaration of Trust, establishing the Research
Enhanced Index Series, filed via Edgar with Post-Effective
Amendment No. 22 on July 15, 1997.

1.9 Amendment to Declaration of Trust, establishing five new
Series filed via Edgar with Post-Effective Amendment No. 25 on
April 29, 1998.

2. Not Applicable.

3. Not Applicable.

4. Not Applicable.

5. Form of Investment Advisory Agreement between Registrant and
Phoenix Investment Counsel, Inc. covering the Balanced, Bond,
Growth, Money Market, Total Return and International Series,
filed with Post-Effective Amendment No. 11 on May 2, 1994 and
filed via Edgar with Post-Effective Amendment No. 20 on April
29, 1997.

5.1 Investment Advisory Agreement between Registrant and Phoenix
Realty Securities, Inc. covering the Phoenix Real Estate
Securities Series, dated February 28, 1995 and assigned
March 2, 1998 to Duff & Phelps Investment Management Co.,
filed with Post-Effective Amendment No. 13, on April 28, 1995
and filed via Edgar with Post-Effective Amendment No. 20 on
April 29, 1997.

5.2 Form of Investment Advisory Agreement between Registrant and
Phoenix-Aberdeen International Advisors, LLC, covering the
Aberdeen New Asia Series, filed via Edgar with Post-Effective
Amendment No. 18 on June 20, 1996.

5.3 Form of Subadvisory Agreement between The Phoenix Edge Series
Fund and Aberdeen Fund Managers, Inc. covering Aberdeen New
Asia Series filed via Edgar with Post-Effective Amendment No.
19 on September 3, 1996.

5.4 Form of Subadvisory Agreement between The Phoenix Edge Series
Fund and Phoenix Investment Counsel, Inc. covering Aberdeen
New Asia Series filed via Edgar with Post-Effective Amendment
No. 19 on September 3, 1996.

5.5 Form of Investment Advisory Agreement between Registrant and
Phoenix Investment Counsel, Inc., covering the Research
Enhanced Index Series, filed via Edgar with Post-Effective
Amendment No. 22 on July 15, 1997.

C-1
<PAGE>

5.6 Form of Subadvisory Agreement among Registrant, Phoenix
Investment Counsel, Inc. and J. P. Morgan Investment
Management, Inc., covering the Research Enhanced Index Series,
filed via Edgar with Post-Effective Amendment No. 22 on July
15, 1997.

5.7 Form of Subadvisory Agreement among the Registrant, Phoenix
Realty Securities, Inc. and Duff & Phelps Investment
Management Co., covering the Phoenix Real Estate Securities
Series, filed via Edgar with Post-Effective Amendment No. 23
on December 12, 1997.

5.8 Form of Investment Advisory Agreement between Registrant and
Phoenix Investment Counsel, Inc., covering the Engemann Nifty
Fifty, Seneca Mid-Cap Growth, Phoenix Income and Growth,
Phoenix Value Equity and Schafer Mid-Cap Value Series, filed
via Edgar with Post-Effective Amendment No. 24 on February 24,
1998.

5.9 Form of Investment Subadvisory Agreement among the Registrant,
Phoenix Investment Counsel, Inc. and Roger Engemann &
Associates, Seneca Capital Management, LLC and Schafer
Capital Management, Inc., filed via Edgar with Post-Effective
Amendment No. 24 on February 24, 1998.

6. Not Applicable.

7. Not Applicable.

8. Form of Custodian Agreement between Registrant and The Chase
Manhattan Bank, N.A. covering the International Series, filed
with Post-Effective Amendment No. 4 on March 13, 1990 and
filed via Edgar with Post-Effective Amendment No. 20 on April
29, 1997.

8.1 Form of Amendment to Custodian Agreement covering
International, Money Market, Growth, Multi-Sector Fixed
Income, Strategic Income and Balanced Series, filed with
Post-Effective Amendment No. 7 on March 2, 1992 and filed via
Edgar with Post-Effective Amendment No. 20 on April 29, 1997.

8.2 Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. covering the International and Asia Series,
filed with Post-Effective Amendment No. 12 on February 16,
1995 and filed via Edgar with Post-Effective Amendment No. 20
on April 29, 1997.

8.3 Form of Custodian Agreement between Registrant and State
Street Bank and Trust Company dated May 1, 1997 covering the
Real Estate Securities and Enhanced Index Series, filed via
Edgar with Post-Effective Amendment No. 23 on December 12,
1997.

9.1 Form of Transfer Agency Agreement, filed with original
Registration Statement on Form N-1A on April 18, 1986 and
filed via Edgar with Post-Effective Amendment No. 20 on April
29, 1997.

9.2 Financial Agent Agreement between Registrant and Phoenix
Equity Planning Corporation dated December 11, 1996 filed via
Edgar with Post-Effective Amendment No. 20 on April 29, 1997.

9.3 First Amendment to Financial Agent Agreement effective
February 27, 1998 filed via Edgar with Post-Effective
Amendment No. 25 on April 29, 1998.

10. Opinion and Consent of Counsel covering shares of the
International, Multi-Sector Fixed Income, Growth, Money
Market, Balanced and Strategic Allocation Series, filed with
Post-Effective Amendment No. 7 on March 2, 1992 and filed via
Edgar with Post-Effective Amendment No. 20 on April 29, 1997.

10.1 Opinion and Consent of Counsel covering shares of the Real
Estate Securities Series, filed with Post-Effective Amendment
No. 13 on April 28, 1995 and filed via Edgar with
Post-Effective Amendment No. 20 on April 29, 1997.

10.2 Opinion and Consent of Counsel covering shares of the
Strategic Theme Series, filed via Edgar with Post-Effective
Amendment No. 16 on January 29, 1996.

10.3 Opinion and Consent of Counsel covering shares of the
Aberdeen New Asia Series, filed via Edgar with Post-Effective
Amendment No. 19 on September 3, 1996.

10.4 Opinion and Consent of Counsel covering shares of the Research
Enhanced Index Series filed via Edgar with Post-Effective
Amendment No. 22 on July 15, 1997.

10.5 Opinion and Consent of Counsel covering shares of the
Engemann Nifty Fifty, Seneca Mid-Cap Growth, Phoenix Growth &
Income, Phoenix Value Equity and Schafer Mid-Cap Value Series
filed via Edgar with Post-Effective Amendment No. 24 on
February 24, 1998.

11. Written Consent of PricewaterhouseCoopers LLP, filed via Edgar
to be filed by Amendment.

12. Not Applicable.

13. Not Applicable.

14. Not Applicable.

C-2
<PAGE>

15. Not Applicable.

16. Not Applicable.

17. Financial Data Schedule, to be filed via Edgar by Amendment
and reflected on Edgar as Exhibit 27.

18. Powers of Attorney, filed via Edgar with Post-Effective
Amendment No. 17 on April 17, 1996.

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

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

[Graphic Omitted]

C-3
<PAGE>

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

NUMBER OF RECORD HOLDERS
TITLE OF CLASS AS OF FEBRUARY 26, 1999
-------------- -----------------------

Multi-Sector Series 4
Money Market Series* 4
Growth Series 7
Allocation Series 4
Balanced Series 4
International Series 4
Real Estate Series 5
Theme Series 4
Asia Series 5
Enhanced Index Series 5
Nifty Fifty Series 5
Seneca Mid-Cap Series 5
Value Series 5
Growth & Income Series 5
Schafer Mid-Cap Series 5
- -------------
*Phoenix Mutual Life Insurance Company purchased 1 share of the Money Market
Series at a price of $10 per share on February 18, 1986.

ITEM 27. INDEMNIFICATION

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

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

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

See "Management of the Fund" in the Prospectus and "Management of the Fund"
in the Statement of Additional Information for information regarding the
business of the Adviser. For information as to the business, profession,
vocation or employment of a substantial nature of directors and officers of the
Adviser, reference is made to the Adviser's current Form ADV (SEC File Nos.
801-5995 for Phoenix Investment Counsel Inc.; 801-48190 for Phoenix Realty
Securities, Inc.; 801-52167 for Phoenix-Aberdeen International Advisors, LLC;
801-14813 for Duff & Phelps Investment Management Co.) filed under the
Investment Advisers Act of 1940, incorporated herein by reference.

ITEM 29. PRINCIPAL UNDERWRITERS

Not Applicable.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

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

C-4
<PAGE>

ITEM 31. MANAGEMENT SERVICES

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

ITEM 32. UNDERTAKINGS

(a) Not Applicable.

(b) Registrant undertakes to file a post-effective amendment using
financial statements which need not be certified, within four to
six months from the effective date of Registrant's Post-Effective
Amendment No. 24 with respect to the Nifty Fifty, Seneca Mid-Cap,
Growth & Income, Value and Schafer Mid-Cap Series.

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

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

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

C-5

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Hartford and the State of Connecticut on the 1st
day of March, 1999.

THE PHOENIX EDGE SERIES FUND

Attest: /s/ Thomas N. Steenburg By: /s/ Philip R. McLoughlin
------------------------ ----------------------------
Thomas N. Steenburg Philip R. McLoughlin
Assistant Secretary President

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities indicated on this 1st day of March, 1999.

SIGNATURE TITLE
--------- -----

Trustee
- -------------------------------------
Robert Chesek*

Trustee
- -------------------------------------
E. Virgil Conway*

Treasurer
- -------------------------------------
Nancy G. Curtiss* (Principal Financial and
Accounting Officer)

Trustee
- -------------------------------------
Harry Dalzell-Payne*

Trustee
- -------------------------------------
Francis E. Jeffries*

Trustee
- -------------------------------------
Leroy Keith, Jr.*

/s/ Philip R. McLoughlin Trustee and President
- -------------------------------------
Philip R. McLoughlin (Principal Executive
Officer)

Trustee
- -------------------------------------
Everett L. Morris*

Trustee
- -------------------------------------
James M. Oates*

Trustee
- -------------------------------------
Calvin J. Pedersen*

Trustee
- -------------------------------------
Herbert Roth, Jr.*

S-1(C)
<PAGE>

Trustee
- -------------------------------------
Richard E. Segerson*

Trustee
- -------------------------------------
Lowell P. Weicker, Jr.*

By: /s/ Philip R. McLoughlin
-------------------------
*Philip R. McLoughlin, pursuant to powers of attorney filed previously.

S-2(C)