April 30, 1998
P H O E N I X
ANNUAL REPORT
o PHOENIX INCOME AND
GROWTH FUND
[PHOENIX LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
Mutual funds are not insured by the FDIC; are not deposits or
other obligations of a bank and are not guaranteed by a bank; and
are subject to investment risks, including possible loss of the
principal invested.
<PAGE>
Chairman's Message
Dear Phoenix Funds Shareholder:
I'm pleased to make you aware that we recently changed our corporate name
to Phoenix Investment Partners, Ltd. We feel this new name better fits the
growing investment management firm we have been building and reflects our
commitment to partnership and excellence in serving the financial needs of
investors like you.
Over the past year, we have added several of the industry's most
experienced and talented money managers to our team to provide you with a wider
variety of quality investment products. Phoenix Investment Partners offers you
access to the distinct investment styles of independent money managers across
the U.S. and around the world:
Aberdeen Fund Managers, Inc.
Duff & Phelps Investment Management Co.
Phoenix Investment Counsel, Inc.
Roger Engemann & Associates, Inc.
Seneca Capital Management LLC
Classic Value group, led by Chris Bertelsen
Quantitative Value group, led by Steve Colton and Dong Hao Zhang
As always, we are committed to providing you with sound investments and
outstanding service--now with even more choices, including value-style mutual
funds. To learn more about our new partners and their distinctive investment
styles, contact your financial advisor or call a marketing specialist at
1-800-243-4361.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
President, Phoenix Funds
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PHOENIX INCOME AND GROWTH FUND
INVESTOR PROFILE
Phoenix Income and Growth Fund is designed for more conservative investors
seeking current yield and conservation of capital as well as the potential for
long-term capital appreciation.
INVESTMENT ADVISER'S REPORT
The fiscal year ended April 30, 1998 was an unusually strong period for
common stocks. The Standard & Poor's 500 Index returned 41.27%.* Bonds posted
solid returns although not as spectacular as stocks, with the Lehman Brothers
Aggregate Bond Index up 10.91%.**
For the 12 months ended April 30, 1998, Phoenix Income and Growth Fund
Class A and B shares posted double-digit returns of 21.87% and 21.03%,
respectively, compared with 22.49% for the Fund's benchmark. The Fund's
benchmark was changed from a composite index consisting of 55% Standard & Poor's
500 Index, 35% Lehman Brothers Aggregate Bond Index, and 10% 90-day T-bills to a
composite index consisting of 40% Standard & Poor's 500 Index and 60% Lehman
Brothers Aggregate Bond Index to more accurately reflect the Fund's asset
allocation, which is set at 40% common stocks and 60% fixed-income securities.
The return on Class A shares was within .62 percentage points of this asset
allocation. All performance figures assume reinvestment of dividends and exclude
the effect of sales charges.
Common Stock Summary
Through December, highlights included the Fund's focus on energy technology
issues, such as Nabors Industries, Diamond Offshore Drilling, and Noble
Drilling. Other positive contributors included an overweighted position in the
strongly performing cable industry as well as some individual holdings, such as
Rite Aid and Home Depot.
In December, a management change was made to a team approach. Steve Colton,
formerly with American Century, leads the equity team, which employs a
large-cap, value style that is highly diversified and attempts to return more
than the S&P 500 with lower risk. As a result of the change, the number of
holdings has been increased and sector concentration (notably energy) has been
reduced. Since December, the equity portion has had success in auto stocks like
Ford Motor Corp., drug stocks like Pfizer Inc. and brokerage stocks like Morgan
Stanley, Dean Witter & Co.
Fixed-Income Summary
The fixed-income portion of the portfolio is managed by a fixed-income
team, using a multi-sector approach. Sector holdings have been opportunistically
shifted over the past 12 months into the most undervalued sectors and out of
sectors determined to be overvalued. Early in the year we were increasing our
exposure to U.S. Treasuries due to historically tight credit spreads. Over the
past six months, the Asian crisis has caused spreads to widen across all
credit-sensitive sectors. We took advantage of this spread widening, increasing
our exposure to investment-grade corporates, taxable municipals, commercial
mortgage-backed securities and emerging markets.
OUTLOOK
At the time this report is being prepared, we have entered a period of
stock market volatility. Troubles in Asian countries like Indonesia and South
Korea, slowing S&P 500 earnings growth, and tight labor markets are among the
top concerns of market fore-
1
<PAGE>
Phoenix Income and Growth Fund
- --------------------------------------------------------------------------------
casters. Offsetting these concerns are such factors as strong flows into equity
mutual funds by aging baby-boomers saving for their retirement, merger activity,
low inflation and interest rates, and global competitiveness of large U.S.
corporations. Our equity holdings are currently emphasizing the financial
services sector, which is benefiting from a strong fundamental environment and
merger activity, and the consumer cyclical sector, which is benefiting from
strong employment growth and consumer confidence.
The fixed-income segment of the portfolio is positioned well for the new
fiscal year. The average credit quality is A+ and the duration is 4.8 years,
approximately equal to the Lehman Brothers Aggregate Bond Index. The sector
allocation is well balanced with exposure to the conventional core sectors, such
as investment-grade corporates and agency mortgage-backed securities, and
enhanced core sectors, such as taxable municipals, commercial mortgage-backed
securities, non-agency residential mortgage-backed securities, and
emerging-market debt.
*The Standard & Poor's 500 Index is an unmanaged, commonly used measure of
stock market performance. The Index is not available for direct investment.
**The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market performance. The Index is not available for direct
investment.
2
<PAGE>
Phoenix Income and Growth Fund
- --------------------------------------------------------------------------------
[Tabular representation of line chart]
<TABLE>
<CAPTION>
Income and Growth S&P 500 New Balanced Old Balanced
Fund-Class A Stock Index* Benchmark*** Benchmark**
----------------- ------------ ------------ -------------
<S> <C> <C> <C>
4/30/88 9525 10000 10000 10000
4/30/89 11600 12270 11372 11593
4/30/90 12131 13550 12484 12745
4/30/91 13902 15939 14539 14791
4/30/92 16165 18165 16340 16600
4/30/93 18554 19844 18252 18274
4/30/94 19182 20904 18739 18928
4/30/95 20324 24557 20864 21321
4/30/96 24188 31992 24392 25543
4/30/97 26832 40055 27854 29815
4/30/98 $32,699 $56,585 $34,118 $37,680
</TABLE>
Average Annual Total Returns
for Periods Ending 4/30/98
<TABLE>
<CAPTION>
From Inception
1/3/92 to
1 Year 5 Years 10 Years 4/30/98
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge 16.10% 10.93% 12.58% --
-----------------------------------------------------------------------------------------------
Class A at net asset value 21.87% 12.00% 13.12% --
-----------------------------------------------------------------------------------------------
Class B with CDSC 17.03% 11.19% --% 11.49%
-----------------------------------------------------------------------------------------------
Class B at net asset value 21.03% 11.19% --% 11.49%
-----------------------------------------------------------------------------------------------
New Balanced Benchmark*** 22.49% 13.33% 13.06% 12.30%****
-----------------------------------------------------------------------------------------------
Old Balanced Benchmark** 26.38% 15.57% 14.19% 13.84%****
-----------------------------------------------------------------------------------------------
S&P 500 Stock Index* 41.27% 23.32% 18.92% 20.84%****
-----------------------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial investment of $10,000 made on April 30, 1988 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception date, fees and sales charges. The total
return (since inception 1/3/92) for Class B shares reflects the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed during
the 1st year after purchase and 4% for all shares redeemed during the 2nd year
after purchase (scaled down to 3%--3rd year; 2%--4th and 5th year and 0%
thereafter). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
Foreign investing involves special risks, such as currency fluctuation and less
public disclosure as well as economic and political risks.
*The S&P 500 Stock Index is an unmanaged but commonly used measure of stock
total return performance. The S&P 500's performance does not reflect sales
charges.
**The Balanced Benchmark is calculated based upon the performance of the
following indices: 55% S&P 500/35% Lehman Brothers Aggregate Bond Index/10%
U.S. Treasury bills and is produced by Frank Russell Company. The index's
performance does not reflect sales charges.
***The Balanced Benchmark is calculated based upon the performance of the
following indices: 40% S&P 500/60% Lehman Brothers Aggregate Bond Index and
is produced by Frank Russell Company. The index's performance does not
reflect sales charges.
****Index information from 1/1/92 to 4/30/98.
3
<PAGE>
Phoenix Income and Growth Fund
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--9.7%
U.S. TREASURY NOTES--9.7%
U.S. Treasury Notes 5.375%, 1/31/00....................... AAA $51,250 $ 51,080,357
U.S. Treasury Notes 5.50%, 3/31/00........................ AAA 17,000 16,977,728
U.S. Treasury Notes 5.50%, 1/31/03........................ AAA 5,680 5,642,682
U.S. Treasury Notes 6.125%, 8/15/07....................... AAA 5,850 6,005,552
------------
TOTAL U.S. GOVERNMENT
(Identified cost $80,014,366).................................................... 79,706,319
------------
AGENCY MORTGAGE-BACKED SECURITIES--3.8%
GNMA 6.50%, '23-'24....................................... AAA 27,135 27,041,574
FNMA 98-M4, C 6.527%, 5/25/30............................. AAA 4,000 4,028,750
------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $30,335,138).................................................... 31,070,324
------------
MUNICIPAL BONDS--8.4%
CALIFORNIA--4.3%
California State Department Water System Series S 5%,
12/1/29................................................. AA 1,700 1,612,875
Fresno County Pension Obligation Taxable 6.21%, 8/15/06... AAA 5,600 5,551,000
Kern County Pension Obligation Taxable 7.26%, 8/15/14..... AAA 4,500 4,770,000
Long Beach Pension Obligation Taxable 6.87%, 9/1/06....... AAA 3,000 3,116,250
Los Angles County Public Works 5.125%, 12/1/29............ AAA 2,560 2,464,000
Orange County Pension Obligation Series A Taxable 7.62%,
9/1/08.................................................. AAA 4,520 4,926,800
Sacramento County 95-A Pension Taxable 6.625%, 8/15/06.... AAA 3,400 3,489,250
San Bernardino County Pension Obligation Revenue Taxable
6.87%, 8/1/08........................................... AAA 1,335 1,378,388
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
San Bernardino County Pension Obligation Revenue Taxable
6.94%, 8/1/09........................................... AAA $3,625 $ 3,760,937
Sonoma County Pension Obligation 6.625%, 6/1/13........... AAA 1,700 1,706,375
Ventura County Pension Obligation Taxable 6.54%,
11/1/05................................................. AAA 2,200 2,241,250
------------
35,017,125
------------
FLORIDA--0.2%
Florida Department of Transportation 5%, 7/1/27........... AA+ 2,050 1,957,750
------------
ILLINOIS--0.5%
Illinois Educational Facilities Authority Revenue--Loyola
University Series A Taxable 7.84%, 7/1/24............... AAA 3,410 3,661,487
------------
MASSACHUSETTS--0.4%
Massachusetts State Port Authority Revenue 6.05%,
7/1/02.................................................. AA- 1,575 1,567,125
Massachusetts State Water Authority 5%, 8/1/24............ AAA 2,050 1,947,500
------------
3,514,625
------------
NEW YORK--0.9%
New York State Taxable 6.40%, 3/1/08...................... AAA 7,460 7,460,000
------------
PENNSYLVANIA--0.5%
Pittsburgh Pension Taxable 6.5%, 3/1/17................... AAA 4,250 4,127,813
------------
TEXAS--1.3%
Dallas-Fort Worth Airport 6.40%, 11/1/06.................. AAA 4,415 4,426,038
Dallas-Fort Worth Taxable 6.40%, 11/1/07.................. AAA 1,200 1,200,000
Houston Water & Sewer Ref-Jr Series D 5%, 12/1/25......... AAA 2,560 2,435,200
Texas Taxable Veterans Series B 6.05%, 12/1/02............ AA 3,000 2,973,750
------------
11,034,988
------------
WASHINGTON--0.3%
Washington State Series E Taxable 5%, 7/1/22.............. AA+ 2,560 2,416,000
------------
TOTAL MUNICIPAL BONDS
(Identified cost $68,283,968).................................................... 69,189,788
------------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
ASSET-BACKED SECURITIES--4.4%
<S> <C> <C> <C>
AESOP Funding II LLC 97-1, A2 144A 6.40%, 10/20/03 (b).... AAA $5,000 $ 5,060,938
Associates Manufactured Housing Pass Through 97-2 A6
7.075%, 3/15/28......................................... AAA 1,500 1,521,562
Capita Equipment Receivables Trust 97-1B, 6.45%,
8/15/02................................................. A+ 3,500 3,541,562
Chase Credit Card Master Trust 1997-2A 6.30%, 4/15/03..... AAA 5,000 5,028,320
Discover Card Master Trust I 98-4, A 5.75%, 10/16/03...... AAA 2,000 1,987,578
Fleetwood Credit Corp. 96-B, A 6.90%, 3/15/12............. AAA 1,822 1,839,303
Green Tree Financial Corp. 96-2, M1 7.60%, 4/15/27........ AA- 3,325 3,456,961
Green Tree Financial Corp. 96-4, A6 7.40%, 6/15/27........ AAA 1,515 1,573,470
Newcourt Receivables Asset Trust 1997-1 A3 6.11%,
5/21/01................................................. AAA 4,600 4,610,063
Premier Auto Trust 98-1, A-4 5.70%, 10/6/02............... AAA 2,500 2,485,156
Wings Commercial Loan Master Trust I 98-A2 144A 5.918%,
3/20/08 (b)(e).......................................... AAA 5,000 5,004,688
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $30,797,464).................................................... 36,109,601
------------
CORPORATE BONDS--8.2%
BROADCASTING (TELEVISION RADIO CABLE)--0.4%
Turner Broadcasting 8.375%, 7/1/13........................ BBB- 3,000 3,382,500
------------
COMMUNICATIONS EQUIPMENT--0.6%
Panamsat Corp. 144A 6.125%, 1/15/05 (b)................... A- 5,000 4,881,250
------------
CONSUMER FINANCE--0.6%
Ford Motor Credit 6%, 1/14/03............................. A 5,000 4,962,500
------------
DIVERSIFIED MISCELLANEOUS--1.2%
IBJ Preferred Capital Co. LLC 144A 8.79%,
12/29/49 (b)(e)......................................... BBB- 4,880 4,626,103
SB Treasury Co. 144A 9.125%, 12/29/49 (b)(e).............. BBB- 4,880 5,032,500
------------
9,658,603
------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
<S> <C> <C> <C>
HEALTH CARE--DIVERSIFIED--0.6%
McKesson Corp. 144A 6.40%, 3/1/08 (b)..................... A- $ 5,100 $ 5,023,500
------------
HOSPITAL MANAGEMENT--0.7%
Tenet Healthcare Corp. Sr. Note 9.625%, 9/1/02............ Ba(d) 5,000 5,631,250
------------
INVESTMENT BANKING/BROKERAGE--0.6%
Merrill Lynch & Co. 6%, 2/12/03........................... AA- 5,000 4,962,500
------------
MEDICAL PRODUCTS & SUPPLIES--0.6%
Boston Scientific 6.625% 3/15/05.......................... A- 4,925 4,937,313
------------
PAPER & FOREST PRODUCTS--0.6%
Buckeye Cellulose Corp. 8.5%, 12/15/05.................... BB- 5,000 5,112,500
------------
REITS--0.4%
Meditrust Corp. Notes 7.375%, 7/15/00..................... BBB- 3,000 3,052,500
------------
RETAIL (FOOD CHAINS)--0.5%
Fred Meyer 7.45%, 3/1/08.................................. BB+ 4,000 4,000,000
------------
TELEPHONE--0.6%
Century Telephone Enterprises 6.30%, 1/15/08.............. BBB+ 5,000 4,925,000
------------
TEXTILES (APPAREL)--0.6%
Westpoint Stevens 8.75%, 12/15/01......................... BB 5,000 5,418,750
------------
TRUCKS & PARTS--0.2%
Cummins Engine 6.45%, 3/1/05.............................. BBB+ 1,650 1,637,625
------------
TOTAL CORPORATE BONDS
(Identified cost $66,889,861).................................................... 67,585,791
------------
NON-AGENCY MORTGAGE BACKED SECURITIES--13.0%
CS First Boston Corp. 97-SPCE, D 144A 7.332%, 4/20/08
(b)..................................................... BBB(d) 4,039 4,066,768
CS First Boston Mortgage Securities Corp. 97-C2, B 6.72%,
11/17/07................................................ Aa(d) 11,000 11,144,375
DLJ Mortgage Acceptance Corp. 96-CF1, A1B 144A 7.58%,
2/12/06 (b)............................................. AAA 4,400 4,677,750
DLJ Mortgage Acceptance Corp. 97-CF2, B2 144A 7.14%,
11/15/08 (b)............................................ BBB- 5,000 5,010,938
First Union Lehman Brothers 97-C1, B 7.43%, 4/18/07....... Aa(d) 2,500 2,625,781
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
NON-AGENCY MORTGAGE BACKED SECURITIES--CONTINUED
<S> <C> <C> <C>
G.E. Capital Mortgage Services, Inc. 94-9, M 6.50%,
2/25/24................................................. AA $11,415 $ 11,182,838
G.E Capital Mortgage Services, Inc. 1996-4 A5 7%,
3/25/26................................................. AAA 8,820 8,837,446
G.E. Capital Mortgage Services, Inc. 96-8, M 7.25%,
5/25/26................................................. AA 490 500,736
G.E. Capital Mortgage Services, Inc. 97-1, A14 7.50%,
3/25/27................................................. AAA 5,000 5,062,500
GMAC Commercial Mortgage Securities, Inc. 97-B, C-2
6.703%, 12/15/07........................................ Aa(d) 7,000 7,063,437
Lehman Large Loan 97-L11, B 6.95%, 3/12/07................ AA 4,340 4,462,062
Nationslink Funding Corp. 96-1, B 7.69%, 12/20/05......... AA 1,500 1,586,250
New Century Home Equity Loan Trust 6.78%, 8/25/25......... AAA 5,750 5,764,375
Prudential Home Mortgage Securities 94-15, M 6.80%,
5/25/24................................................. Aa(d) 8,350 8,300,802
Prudential Home Mortgage Securities 144A 96-A B1 7.9584%,
5/28/26 (b)............................................. NR 2,525 2,365,609
Residential Asset Securitization Trust 96-A8, A1 8%,
12/25/26................................................ AAA 1,925 1,937,064
Residential Funding Mortgage Securities I 96-S1, A11
7.10%, 1/25/26.......................................... AAA 2,800 2,821,000
Residential Funding Mortgage Securities I 96-S4, M1 7.25%,
2/25/26................................................. AA 3,915 3,948,387
Securitized Asset Sales 93-J 2B 6.807%, 11/28/23.......... A(d) 4,420 4,429,569
Structured Asset Securities Corp. 95-C4, B 7%, 6/25/26.... AA 5,198 5,239,937
Triangle Funding Ltd. 97-3A, 1B 144A 5.846%, 10/15/05
(b)(e).................................................. AA 5,650 5,639,406
------------
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(Identified cost $109,915,438)................................................... 106,667,030
------------
FOREIGN GOVERNMENT SECURITIES--10.6%
ARGENTINA--1.3%
Republic of Argentina 9.75%, 9/19/27...................... BB 3,750 3,620,625
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
<S> <C> <C> <C>
ARGENTINA--CONTINUED
Republic of Argentina Bearer FRB 6.625%, 3/31/05 (e)...... BB $ 8,156 $ 7,493,095
------------
11,113,720
------------
BRAZIL--0.9%
Republic of Brazil NMB-L 6.688%, 4/15/09 (e).............. BB- 9,075 7,651,359
------------
BULGARIA--0.5%
Bulgaria FLIRB-A Bearer Euro 2.25%, 7/28/12 (e)........... B(d) 6,105 4,105,612
------------
COLOMBIA--0.9%
Republic of Colombia 7.625%, 2/15/07...................... BBB- 8,000 7,495,520
------------
CROATIA--0.9%
Croatia Series B 6.50%, 7/31/06 (e)....................... BBB- 3,698 3,395,035
Croatia Series A 6.50%, 7/31/10 (e)....................... BBB- 4,300 3,818,937
------------
7,213,972
------------
ECUADOR--0.5%
Ecuador Bearer PDI Euro, PIK interest capitalization
6.625%, 2/27/15 (e)..................................... BB 2,114 1,352,346
Ecuador Registered PDI Euro, PIK interest capitalization,
6.625%, 2/27/15 (e)..................................... BB 3,811 2,437,782
------------
3,790,128
------------
KOREA--0.3%
Republic of Korea 8.875%, 4/15/08......................... BB+ 2,300 2,267,800
------------
MEXICO--1.3%
United Mexican States Global Bond 11.50%, 5/15/26......... BB 9,160 11,049,250
------------
PANAMA--1.3%
Republic of Panama 8.875%, 9/30/27........................ BB+ 11,275 11,043,863
------------
PERU--0.5%
Peru PDI 4%, 3/7/17 (e)................................... BB 5,745 3,924,553
------------
POLAND--1.3%
Poland Bearer PDI 4%, 10/27/14 (e)........................ BBB- 5,500 5,032,500
Poland Registered PDI 4%, 10/27/14 (e).................... BBB- 6,100 5,581,500
------------
10,614,000
------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- -------- ------------
RUSSIA--0.5%
<S> <C> <C> <C>
Russia IAN Series US 144A 6.719%, 12/15/15 (b)(e)......... NR $5,545 $ 3,995,866
------------
VENEZUELA--0.4%
Republic of Venezuela 9.25%, 9/15/27...................... B+ 4,155 3,670,943
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $83,968,802).................................................... 87,936,586
------------
FOREIGN CORPORATE BONDS--0.6%
ARGENTINA--0.2%
Telefonica De Argentina 144A 9.125%, 5/7/08 (b)........... BBB- 1,450 1,457,250
------------
CHILE--0.4%
Compania Sud Amer Vapore 144A 7.375%, 12/8/03 (b)......... BBB 580 571,300
Petropower I Funding 144A 7.36%, 2/15/14 (b).............. BBB 2,400 2,380,920
------------
2,952,220
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $4,410,166)..................................................... 4,409,470
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------
<S> <C> <C> <C>
COMMON STOCKS--37.8%
AEROSPACE & DEFENSE--0.8%
General Dynamics Corp..................................... 138,800 5,864,300
Gulfstream Aerospace Corp. (c)............................ 4,400 184,525
Sundstrand Corp........................................... 9,300 642,281
Thiokol Corp.............................................. 4,000 215,500
------------
6,906,606
------------
AIRLINES--0.5%
AMR Corp. (c)............................................. 26,500 4,037,937
------------
AUTOMOBILES--1.4%
Chrysler Corp............................................. 47,500 1,908,906
Ford Motor Co............................................. 181,600 8,319,550
General Motors Corp....................................... 20,400 1,374,450
------------
11,602,906
------------
BANKS (MAJOR--REGIONAL)--1.4%
Banc One Corp............................................. 109,400 6,434,087
NationsBank Corp.......................................... 66,900 5,067,675
UnionBanCal Corp.......................................... 2,800 288,400
------------
11,790,162
------------
BANKS (MONEY CENTER)--2.3%
BankAmerica Corp.......................................... 68,900 5,856,500
Bankers Trust Corp........................................ 31,900 4,119,087
Chase Manhattan Corp...................................... 36,500 5,057,531
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
BANKS (MONEY CENTER)--CONTINUED
Citicorp.................................................. 23,700 $ 3,566,850
------------
18,599,968
------------
BEVERAGES (ALCOHOLIC)--0.1%
Adolph Coors Co. Cl B..................................... 11,500 411,125
------------
BEVERAGES (NON-ALCOHOLIC)--0.2%
PepsiCo, Inc.............................................. 32,000 1,270,000
------------
BUILDING MATERIALS--0.1%
Fleetwood Enterprises..................................... 8,200 378,737
------------
CHEMICAL--1.9%
Dow Chemical Co........................................... 107,000 10,345,562
Du Pont (E.I.) de Nemours & Co............................ 60,000 4,368,750
Lyondell Petrochemical Co................................. 22,900 752,837
------------
15,467,149
------------
CHEMICAL--SPECIALTY--0.1%
Dexter Corp............................................... 9,400 388,337
------------
COMMUNICATIONS EQUIPMENT--0.6%
Lucent Technologies, Inc.................................. 62,000 4,719,750
Tellabs, Inc. (c)......................................... 6,700 474,862
------------
5,194,612
------------
COMPUTER SOFTWARE & SERVICES--1.8%
Autodesk, Inc............................................. 15,400 723,800
Computer Associates International, Inc.................... 46,400 2,717,300
Electronic Data Systems Corp.............................. 5,400 232,200
Microsoft Corp. (c)....................................... 123,500 11,130,437
------------
14,803,737
------------
COMPUTERS (HARDWARE)--1.7%
Compaq Computer Corp...................................... 46,800 1,313,325
Dell Computer Corp. (c)................................... 10,000 807,500
Hewlett Packard Co........................................ 48,500 3,652,656
International Business Machines Corp...................... 66,900 7,752,037
Sun Microsystems, Inc. (c)................................ 15,200 626,050
------------
14,151,568
------------
COMPUTERS (PERIPHERALS)--0.2%
EMC Corp.................................................. 43,600 2,011,050
------------
CONSUMER GOODS (JEWELRY NOVELTIES GIFTS)--0.2%
Jostens, Inc.............................................. 69,400 1,643,912
------------
DRUGS--MAJOR PHARMACEUTICALS--2.8%
Lilly (Eli) & Co.......................................... 68,200 4,744,162
Merck & Co., Inc.......................................... 50,000 6,025,000
Pfizer, Inc............................................... 103,100 11,734,069
Schering Plough Corp...................................... 9,200 737,150
------------
23,240,381
------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
ELECTRIC COMPANIES--1.3%
<S> <C> <C> <C>
CMS Energy Corp........................................... 16,900 $ 738,319
Consolidated Edison, Inc.................................. 81,300 3,678,825
Dominion Resources, Inc................................... 37,600 1,487,550
Enova Corp................................................ 84,900 2,271,075
FPL Group, Inc............................................ 35,600 2,209,425
Minnesota Power & Light Co................................ 16,900 688,675
------------
11,073,869
------------
ELECTRICAL EQUIPMENT--0.1%
General Electric Co....................................... 9,200 783,150
------------
ELECTRONICS (DEFENSE)--0.2%
Raytheon Co. Class B...................................... 28,700 1,626,931
------------
ELECTRONICS (SEMICONDUCTORS)--0.1%
Intel Corp................................................ 13,700 1,107,131
------------
ENGINEERING & CONSTRUCTION--0.4%
Vulcan Materials Co....................................... 30,500 3,509,406
------------
FINANCIAL (DIVERSIFIED)--1.7%
American Express Co....................................... 7,100 724,200
Federal National Mortgage Association..................... 15,100 904,112
Greenpoint Financial Corp................................. 15,600 619,125
Imperial Bancorp (c)...................................... 27,400 803,162
Morgan Stanley Dean Witter & Co........................... 143,200 11,294,900
------------
14,345,499
------------
FOOD--0.5%
Hormel Foods Corp......................................... 10,000 340,000
Quaker Oats Co............................................ 47,200 2,454,400
Richfood Holdings Inc..................................... 51,500 1,413,031
Smithfield Foods, Inc. (c)................................ 6,900 209,587
------------
4,417,018
------------
HEALTH CARE (MANAGED CARE)--0.1%
Wellpoint Health Network (c).............................. 11,900 858,288
------------
HEALTH CARE--DIVERSIFIED--1.2%
Bristol-Myers Squibb Co................................... 10,600 1,122,275
McKesson Corp............................................. 67,200 4,750,200
Warner-Lambert Co......................................... 21,500 4,067,531
------------
9,940,006
------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--0.1%
Colgate-Palmolive Co...................................... 10,400 932,750
------------
INSURANCE (MULTI-LINE)--1.8%
Conseco, Inc.............................................. 21,100 1,047,088
Equitable Companies, Inc.................................. 51,100 3,136,263
Hartford Financial Services Group......................... 35,600 3,942,700
Travelers Group, Inc...................................... 103,800 6,351,263
------------
14,477,314
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
INSURANCE (PROPERTY--CASUALTY)--0.6%
Allstate Corp............................................. 44,700 $ 4,302,375
St. Paul Co., Inc......................................... 11,500 974,625
------------
5,277,000
------------
INVESTMENT BANKING/BROKERAGE--0.3%
Merrill Lynch & Co., Inc.................................. 25,700 2,255,175
------------
LEISURE TIME PRODUCTS--0.2%
Mattel, Inc............................................... 36,300 1,390,744
------------
MACHINERY (DIVERSIFIED)--1.2%
Caterpillar, Inc.......................................... 65,300 3,718,019
Deere & Co................................................ 77,600 4,534,750
Ingersoll-Rand Co......................................... 31,600 1,455,575
------------
9,708,344
------------
MANUFACTURING (DIVERSIFIED)--1.8%
Eaton Corp................................................ 24,300 2,244,713
National Service Industries............................... 41,900 2,267,838
Teleflex, Inc............................................. 5,700 242,250
Tredegar Industries....................................... 12,500 978,906
United Technologies Corp.................................. 95,900 9,440,156
------------
15,173,863
------------
MEDICAL PRODUCTS & SUPPLIES--0.4%
Baxter International, Inc................................. 53,000 2,938,188
PSS World Medical, Inc. (c)............................... 10,000 224,375
------------
3,162,563
------------
NATURAL GAS--1.1%
Columbia Energy Group..................................... 45,400 3,688,750
Eastern Enterprises....................................... 50,000 2,118,750
New Jersey Resources Corp................................. 58,300 2,200,825
Washington Gas Light Co................................... 39,700 1,079,344
------------
9,087,669
------------
OIL & GAS (DRILLING & EQUIPMENT)--1.1%
BJ Services Co. (c)....................................... 99,800 3,742,500
Camco International, Inc.................................. 1,900 128,963
Dresser Industries, Inc................................... 2,200 116,325
Halliburton Co............................................ 10,400 572,000
Rowan Companies, Inc. (c)................................. 96,800 2,849,550
Schlumberger Ltd.......................................... 23,000 1,906,125
------------
9,315,463
------------
OIL & GAS (EXPLORATION & PRODUCTION)--0.9%
Equitable Resources, Inc.................................. 128,700 4,182,750
K N Energy, Inc........................................... 51,800 3,040,013
MDU Resources Group, Inc.................................. 10,300 357,281
------------
7,580,044
------------
PAPER & FOREST PRODUCTS--0.0%
Bowater, Inc.............................................. 2,100 117,469
------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
PERSONAL CARE--0.1%
<S> <C> <C> <C>
Estee Lauder Companies-Class A............................ 7,100 $ 471,706
------------
PROFESSIONAL SERVICES--0.0%
Valassis Communications, Inc. (c)......................... 3,900 153,075
------------
REITS--0.6%
IRT Property Co........................................... 134,900 1,568,213
Meditrust Companies....................................... 115,709 3,478,510
------------
5,046,723
------------
RETAIL (BUILDING SUPPLIES)--0.1%
Home Depot, Inc........................................... 12,400 863,350
------------
RETAIL (COMPUTERS & ELECTRONICS)--0.1%
Tandy Corp................................................ 7,200 358,200
------------
RETAIL (DEPARTMENT STORES)--0.3%
Federated Department Stores, Inc. (c)..................... 25,000 1,229,688
Penny (J.C.) Co., Inc..................................... 17,400 1,236,488
------------
2,466,176
------------
RETAIL (DRUG STORES)--0.1%
CVS Corp.................................................. 3,600 265,500
Rite Aid Corp............................................. 2,200 70,675
------------
336,175
------------
RETAIL (FOOD CHAINS)--0.2%
Albertson's Inc........................................... 25,700 1,285,000
------------
RETAIL (GENERAL MERCHANDISE)--0.9%
CompUSA, Inc. (c)......................................... 25,000 464,063
Dayton Hudson Corp........................................ 13,000 1,135,063
Fingerhut Companies, Inc.................................. 32,500 962,813
Ross Stores, Inc.......................................... 15,000 694,688
Wal-Mart Stores, Inc...................................... 82,000 4,146,125
------------
7,402,752
------------
RETAIL (SPECIALTY--APPAREL)--0.0%
TJX Co., Inc.............................................. 5,000 221,250
------------
SERVICES (ADVERTISING/MARKETING)--0.8%
Interpublic Group of Companies, Inc....................... 15,900 1,015,613
Omnicom Group, Inc........................................ 121,200 5,741,850
------------
6,757,463
------------
SERVICES (COMMERCIAL & CONSUMER)--0.5%
Deluxe Corp............................................... 33,000 1,105,500
H & R Block, Inc.......................................... 34,500 1,552,500
Viad Corp................................................. 54,500 1,406,781
------------
4,064,781
------------
TELECOM (LONG DISTANCE)--1.3%
AT&T Corp................................................. 173,600 10,426,850
------------
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
TELEPHONE--0.6%
Ameritech Corp............................................ 32,400 $ 1,379,025
BellSouth Corp............................................ 48,400 3,106,675
------------
4,485,700
------------
TEXTILES (APPAREL)--0.2%
Liz Claiborne, Inc........................................ 25,000 1,229,688
VF Corp................................................... 3,300 171,600
------------
1,401,288
------------
TOBACCO--0.8%
Philip Morris Companies, Inc.............................. 121,300 4,526,006
Universal Corp............................................ 62,100 2,324,869
------------
6,850,875
------------
TOTAL COMMON STOCKS
(Identified cost $260,160,117)................................................. 310,629,247
------------
FOREIGN COMMON STOCKS--2.5%
CHEMICALS (DIVERSIFIED)--0.1%
Akzo Nobel N.V. ADR (Netherlands)......................... 9,900 1,019,700
------------
DIVERSIFIED MISCELLANEOUS--0.1%
Nordic American Tanker Shipping Ltd. (Bermuda)............ 55,200 848,700
------------
FOOD--0.2%
Unilever PLC (United Kingdom)............................. 17,300 1,291,012
------------
HOUSEHOLD FURNISHINGS & APPLIANCES--0.5%
Royal Philips Electronics NV (Netherlands)................ 42,300 3,807,000
------------
INSURANCE (MULTI-LINE)--0.1%
Mid Ocean Ltd. (Bermuda).................................. 14,000 1,055,250
Partner Re Ltd. (Bermuda)................................. 3,400 170,212
------------
1,225,462
------------
OIL (INTERNATIONAL INTEGRATED)--0.3%
Elf Aquitaine SA ADR (France)............................. 40,700 2,642,956
------------
RAILROADS--0.2%
Canadian National Railway Co. (Canada).................... 22,700 1,476,919
Canadian Pacific Ltd. (Canada)............................ 8,500 250,219
------------
1,727,138
------------
TELECOM (LONG DISTANCE)--0.1%
Telecom Corp. (New Zealand)............................... 10,000 383,125
------------
TELECOMMUNICATIONS-EQUIPMENT--0.0%
Telefonaktiebolaget LM Ericsson (Sweden).................. 1,000 51,438
------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
PHOENIX INCOME AND GROWTH FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
TELEPHONE--0.9%
<S> <C> <C> <C>
BCE, Inc. (Canada)........................................ 180,400 $ 7,678,275
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $14,301,622).................................................. 20,674,806
------------
TOTAL LONG-TERM INVESTMENTS--99.0%
(Identified cost $749,076,942)................................................. 813,978,962
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
----------- --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.9%
COMMERCIAL PAPER--0.6%
AlliedSignal, Inc. 5.52%, 5/8/98.......................... A-1 $4,865 4,859,778
------------
FEDERAL AGENCY SECURITIES--0.3%
FHLMC 5.43%, 5/7/98....................................... 2,585 2,582,661
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $7,442,439)..................................................... 7,442,439
------------
TOTAL INVESTMENTS--99.9%
(Identified cost $756,519,381)................................................... 821,421,401(a)
Cash and receivables, less liabilities--0.1%..................................... 446,578
------------
NET ASSETS--100.0%................................................................. $821,867,979
------------
------------
</TABLE>
(a) Federal Income Tax Information: net unrealized appreciation of investment
securities is comprised of gross appreciation of $71,568,162 and gross
depreciation of $6,734,594 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$756,587,833.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1998, these securities amount to a value of $59,794,786 or 7.3% of net
assets.
(c) Non-income producing.
(d) As rated by Moody's, Fitch or Duff & Phelps.
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
10 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value
(Identified cost $756,519,381) $ 821,421,401
Cash 162,419
Receivables
Dividends and interest 6,026,333
Investment securities sold 4,036,802
Fund shares sold 274,562
-------------
Total assets 831,921,517
-------------
Liabilities
Payables
Investment securities purchased 7,094,876
Fund shares repurchased 1,810,917
Investment advisory fee 476,820
Distribution fee 395,655
Transfer agent fee 154,341
Financial agent fee 20,656
Trustees' fee 9,122
Accrued expenses 91,151
-------------
Total liabilities 10,053,538
-------------
Net Assets $ 821,867,979
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 694,290,251
Undistributed net investment income 2,057,869
Accumulated net realized gain 60,617,839
Net unrealized appreciation 64,902,020
-------------
Net Assets $ 821,867,979
=============
Class A
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization
(Net Assets $459,991,986) 45,084,238
Net asset value per share $ 10.20
Offering price per share
$10.20/(1 - 4.75%) $ 10.71
Class B
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization
(Net Assets $361,875,993) 35,407,595
Net asset value per share and offering price per share $ 10.22
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
Investment Income
<S> <C>
Interest $ 28,905,450
Dividends 10,855,681
------------
Total investment income 39,761,131
------------
Expenses
Investment advisory fee 5,877,607
Distribution fee--Class A 1,161,545
Distribution fee--Class B 3,750,399
Financial agent 252,949
Transfer agent 1,009,936
Printing 76,480
Custodian 64,627
Registration 22,066
Professional 21,405
Trustees 20,582
Miscellaneous 36,306
------------
Total expenses 12,293,902
------------
Net investment income 27,467,229
------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 131,617,279
Net realized loss on foreign currency transactions (1,242)
Net change in unrealized appreciation (depreciation)
on investments 4,573,207
------------
Net gain on investments 136,189,244
------------
Net increase in net assets resulting from
operations $163,656,473
============
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix Income and Growth Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
April 30, 1998 April 30, 1997
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income $ 27,467,229 $ 29,735,468
Net realized gain 131,616,037 57,966,956
Net change in unrealized appreciation (depreciation) 4,573,207 (2,222,870)
-------------- --------------
Increase in net assets resulting from operations 163,656,473 85,479,554
-------------- --------------
From Distributions to Shareholders
Net investment income--Class A (17,182,669) (18,481,864)
Net investment income--Class B (10,988,112) (12,058,093)
Net realized gains--Class A (54,265,543) (39,142,002)
Net realized gains--Class B (43,432,965) (31,924,691)
-------------- --------------
Decrease in net assets from distributions to shareholders (125,869,289) (101,606,650)
-------------- --------------
From Share Transactions
Class A
Proceeds from sales of shares (2,818,975 and 3,227,767 shares, respectively) 29,110,549 32,305,915
Net asset value of shares issued from reinvestment of distributions
(6,091,273 and 4,817,814 shares, respectively) 58,628,750 47,024,383
Cost of shares repurchased (9,627,226 and 11,192,137 shares, respectively) (99,772,724) (112,400,718)
-------------- --------------
Total (12,033,425) (33,070,420)
-------------- --------------
Class B
Proceeds from sales of shares (2,189,770 and 2,616,679 shares, respectively) 22,255,564 26,139,385
Net asset value of shares issued from reinvestment of distributions
(4,402,084 and 3,430,811 shares, respectively) 42,377,821 33,531,068
Cost of shares repurchased (8,764,802 and 7,729,516 shares, respectively) (90,886,654) (77,728,213)
-------------- --------------
Total (26,253,269) (18,057,760)
-------------- --------------
Decrease in net assets from share transactions (38,286,694) (51,128,180)
-------------- --------------
Net decrease in net assets (499,510) (67,255,276)
Net Assets
Beginning of period 822,367,489 889,622,765
-------------- --------------
End of period (including undistributed net investment income of $2,057,869 and
$2,320,683, respectively) $ 821,867,979 $ 822,367,489
============== ==============
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------
Year Ended April 30,
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.86 $10.08 $8.88 $9.33 $ 9.92
Income from investment operations:
Net investment income 0.38 0.40 0.44 0.46 0.45
Net realized and unrealized gain (loss) 1.63 0.66 1.22 0.03 (0.08)
--------- --------- -------- -------- -------
Total from investment operations 2.01 1.06 1.66 0.49 0.37
--------- --------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.39) (0.40) (0.42) (0.45) (0.44)
Dividends from net realized gains (1.28) (0.88) (0.04) (0.33) (0.52)
In excess of accumulated net realized gains -- -- -- (0.16) --
--------- ---------- -------- -------- --------
Total distributions ( 1.67) (1.28) (0.46) (0.94) (0.96)
--------- ---------- --------- --------- --------
Change in net asset value 0.34 (0.22) 1.20 (0.45) (0.59)
--------- --------- -------- -------- --------
Net asset value, end of period $10.20 $9.86 $10.08 $8.88 $9.33
========= ========= ======== ======== ========
Total return(1) 21.87% 10.93% 19.01% 5.95% 3.38%
Ratios/supplemental data:
Net assets, end of period (thousands) $459,992 $451,439 $493,454 $490,225 $524,855
Ratio to average net assets of:
Expenses 1.13% 1.18% 1.18% 1.16% 1.23%
Net investment income 3.61% 3.82% 4.39% 5.07% 4.57%
Portfolio turnover 155% 111% 107% 90% 88%
Average commission rate paid(2) $0.0556 $0.0515 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------------------
Year Ended April 30,
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.87 $10.09 $8.88 $9.32 $9.92
Income from investment operations:
Net investment income 0.30 0.31 0.36 0.39 0.38
Net realized and unrealized gain (loss) 1.64 0.67 1.23 0.04 (0.08)
-------- -------- -------- -------- --------
Total from investment operations 1.94 0.98 1.59 0.43 0.30
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.31) (0.32) (0.34) (0.38) (0.38)
Dividends from net realized gains (1.28) (0.88) (0.04) (0.33) (0.52)
In excess of accumulated net realized gains -- -- -- (0.16) --
-------- -------- -------- -------- --------
Total distributions (1.59) (1.20) (0.38) (0.87) (0.90)
-------- -------- -------- -------- --------
Change in net asset value 0.35 (0.22) 1.21 (0.44) (0.60)
-------- -------- -------- -------- --------
Net asset value, end of period $10.22 $9.87 $10.09 $8.88 $9.32
======== ======== ======== ======== ========
Total return(1) 21.03% 10.05% 18.14% 5.23% 2.62%
Ratios/supplemental data:
Net assets, end of period (thousands) $361,876 $370,929 $396,169 $386,515 $378,847
Ratio to average net assets of:
Expenses 1.88% 1.93% 1.93% 1.91% 1.91%
Net investment income 2.86% 3.06% 3.64% 4.32% 3.98%
Portfolio turnover 155% 111% 107% 90% 88%
Average commission rate paid(2) $0.0556 $0.0515 N/A N/A N/A
</TABLE>
(1) Maximum sales charge is not reflected in total return calculation.
(2) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements 13
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Income and Growth Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management investment company. The Fund's
primary investment objective is to invest in a diversified group of securities
that are selected for current yield consistent with preservation of capital. The
Fund offers both Class A and Class B shares. Class A shares are sold with a
front-end sales charge of up to 4.75%. Class B shares are sold with a contingent
deferred sales charge which declines from 5% to zero depending on the period of
time the shares are held. Both classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. Income and expenses of the Fund
are borne pro rata by the holders of both classes of shares, except that each
class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been
no sale that day, at the last bid price. Debt securities are valued on the basis
of broker quotations or valuations provided by a pricing service which utilizes
information with respect to market transactions in comparable securities,
quotations from dealers, and various relationships between securities in
determining value. Short-term investments having a remaining maturity of 60 days
or less are valued at amortized cost which approximates market. All other
securities and assets are valued at their fair value as determined in good faith
by or under the direction of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign securities,
as soon as the Fund is notified. Interest income is recorded on the accrual
basis. Discounts are amortized to income using the effective interest method.
Realized gains and losses are determined on the identified cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the
Internal Revenue Code (the "Code") applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders. In addition,
the Fund intends to distribute an amount sufficient to avoid imposition of any
excise tax under Section 4982 of the Code. Therefore, no provision for federal
income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions to shareholders are recorded on the ex-dividend date. Income
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, and losses
deferred due to wash sales and excise tax regulations. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid in capital.
E. Foreign currency translation:
Foreign securities, other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates, between the date income is accrued and paid,
is treated as a gain or loss on foreign currency. The Fund does not separate
that portion of the results of operations arising from changes in exchange rates
and that portion arising from changes in the market prices of securities.
14
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Continued)
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect majority-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled to
a fee at an annual rate of 0.70% of the average daily net assets of the Fund for
the first $1.0 billion and 0.65% for the second $1.0 billion.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp.
("PEPCO"), an indirect majority-owned subsidiary of PHL, has advised the Fund
that it retained net selling commissions of $43,015 for Class A shares and
deferred sales charges of $816,905 for Class B shares for the year ended April
30, 1998. In addition, the Fund pays PEPCO a distribution fee at an annual rate
of 0.25% for Class A shares and 1.00% for Class B shares of the average daily
net assets of the Fund. The Distribution Plan for Class A shares provides for
fees to be paid up to a maximum on an annual basis of 0.30%; the Distributor has
voluntarily agreed to limit the fee to 0.25%. The Distributor has advised the
Fund that of the total amount expensed for the year ended April 30, 1998,
$3,121,953 was earned by the Distributor, $1,721,986 was paid to unaffiliated
participants and $68,005 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.05% of average daily
net assets up to $100 million, 0.04% of average daily net assets of $100 million
to $300 million, 0.03% of average daily net assets of $300 million through $500
million, and 0.015% of average daily net assets greater than $500 million; a
minimum fee may apply. PEPCO serves as the Fund's Transfer Agent with State
Street Bank and Trust Company as sub-transfer agent. For the year ended April
30, 1998, transfer agent fees were $1,009,936 of which PEPCO retained $420,632
which is net of fees paid to State Street.
At April 30, 1998, PHL and affiliates held 141 Class A shares and 19 Class
B shares of the Fund with a combined value of $1,632.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities and
options, for the year ended April 30, 1998, aggregated $1,233,996,724 and
$1,333,344,087, including $254,437,110 and $212,069,259 of U.S. Government and
Agency securities, respectively.
4. POST OCTOBER LOSSES
Under current tax law, currency losses realized after October 31, 1997 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the year ended April 30, 1998, the Fund deferred foreign currency
losses of $549 and was able to utilize losses deferred in the prior year in the
amount of $38,947.
5. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded several
reclassifications in the capital accounts. These reclassifications have no
impact on the net asset value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is considered to be
more informative to the shareholder. As of April 30, 1998, the Fund increased
capital paid in on shares of beneficial interest by $99,135 and undistributed
net investment income by $440,738 and decreased accumulated net realized gains
by $539,873.
15
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Continued)
6. SUBSEQUENT EVENT DISCLOSURE
On May 27, 1998, the Board of Trustees of Phoenix Series Fund unanimously
approved an Agreement and Plan of Reorganization relating to the proposed
combination of the Phoenix Convertible Fund Series and Phoenix Income and Growth
Fund.
Pursuant to the Agreement, the Convertible Fund will transfer all or
substantially all of its assets to the Income and Growth Fund in exchange for
shares of the Income and Growth Fund and the assumption by the Income and Growth
Fund of certain identified liabilities of the Convertible Fund. Following the
exchange, the Convertible Fund will distribute the shares of the Income and
Growth Fund to its shareholders pro rata, in liquidation of the Convertible
Fund. The effectiveness of these transactions is subject to the satisfaction of
a number of conditions, including approval by shareholders of the Convertible
Fund.
TAX INFORMATION NOTICE (Unaudited)
Long-Term Capital Gains
The fund hereby designates $17,384,639 and $41,706,587 at 28% and 20%,
respectively, as a long-term capital gain dividend for purposes of the dividend
paid deduction on its federal income tax return.
Corporate Dividends Received Deductions
For federal income tax purposes 15.66% of the ordinary income dividends
paid by the Fund qualify for the dividends received deduction for corporate
shareholders.
This report is not authorized for distribution to prospective investors in the
Phoenix Income & Growth Fund unless preceded or accompanied by an effective
prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP [PRICE WATERHOUSE LOGO]
To the Trustees and Shareholders of
Phoenix Income and Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Phoenix Income and Growth Fund (the "Fund") at April 30, 1998, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1998 by correspondence with the
custodians and brokers, provide a reasonable basis for the opinion expressed
above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
June 15, 1998
17
<PAGE>
PHOENIX INCOME AND GROWTH FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William J. Newman, Senior Vice President
James D. Wehr, Senior Vice President
Steven L. Colton, Vice President
William E. Keen, III, Vice President
Christopher J. Kelleher, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
National Securities & Research Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
---------------
Phoenix Funds BULK RATE MAIL
PO Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
---------------
[PHOENIX LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 743 (6/98)
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