<PAGE>
PHOENIX INVESTMENT PARTNERS
OCTOBER 31, 1998
SEMIANNUAL REPORT
Phoenix Income
and Growth Fund
[LOGO]PHOENIX
INVESTMENT PARTNERS
<PAGE>
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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>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this semiannual report for the Income and Growth
Fund for the six months ended October 31, 1998.
The past six months have been a remarkable time for the financial markets. As
a result of the growing economic crises in Russia, Japan and global emerging
markets that began in the summer, investors flocked to the most highly liquid
and "lowest risk" investments available.
The Lehman Brothers Government Bond Index(1) gained 7.5% for the six months
through October 31, 1998, while the J.P. Morgan Emerging Market Bond Index
Plus(2) was down over 21% for the same period. The largest U.S. stocks widely
outperformed smaller capitalization companies. The S&P 500 Index(3) was
essentially flat at (0.4)%, while the Russell 2000 Index(4) , a measure of small
stocks' performance, lost 21%.
During such market extremes, it is important to keep a long-term perspective.
We believe that by remaining true to our investment discipline, we will continue
to add value for our shareholders over the long term. Of course, past
performance is no guarantee of future results.
On the following pages, your Fund's portfolio management team discusses market
factors that affected the portfolio and share their outlook for the next six
months. We hope you find their comments informative. If you have any questions,
please contact your financial advisor or call us at 1-800-243-1574.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
December 9, 1998
(1) THE LEHMAN BROTHERS GOVERNMENT BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF TOTAL RETURN PERFORMANCE FOR GOVERNMENT BONDS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
(2) THE J.P. MORGAN EMERGING MARKET BOND INDEX PLUS IS AN UNMANAGED, COMMONLY
USED MEASURE OF EMERGING-MARKET DEBT TOTAL RETURN PERFORMANCE. THE INDEX IS
NOT AVAILABLE FOR DIRECT INVESTMENT.
(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.
(4) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE FOR SMALL-CAPITALIZATION COMPANIES. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
1
<PAGE>
PHOENIX INCOME AND GROWTH FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for investors seeking current yield and conservation
of capital as well as the potential for long-term capital appreciation. The
Fund's asset allocation is approximately 60% fixed income and 40% equity.
Investors should note that the Fund may invest in high-yield securities as well
as foreign bonds. High-yield bonds generally are subject to greater market
fluctuations and risk of loss of income and principal than are lower-yielding
bonds. In addition, foreign investing involves special risks, such as currency
fluctuation, less public disclosure, as well as economic and political risks.
Q: HOW DID THE FUND PERFORM DURING THIS DIFFICULT MARKET ENVIRONMENT?
A: For the six months ended October 31, 1998, Class A shares returned (1.55)%
and Class B shares returned (1.78)% compared with a return of 3.63% for the
Fund's benchmark(1). All performance figures assume reinvestment of
distributions and exclude the effect of sales charges.
Q: WHAT FACTORS MOST AFFECTED PERFORMANCE?
A: The stock market, as measured by the S&P 500 Index started the period at
1,111.75 and finished at 1,098.67, down 13.08 points. The small drop in the
Index's value hides the extreme volatility we experienced over the six-month
reporting period. The stock market dropped dramatically from mid-July to the end
of August. Factors that caused volatility in both the stock market and our
equity holdings included: a worsening situation in Asia and Latin America,
Russian currency devaluation and debt restructuring, collapsing hedge funds,
trading losses at large banks and broker/dealers, the General Motors strike and
fear of disappointing third-quarter earnings reports.
Given the weak state of the financial system, at the time of this writing,
Federal Reserve Chairman Alan Greenspan has lowered interest rates three times
in the last seven weeks. His primary concern was a developing liquidity crisis
where credit spreads widened to extreme levels due to the reluctance of banks
and brokers to make markets in securities. Also, companies were unable to raise
capital by issuing stocks and bonds and banks were becoming more unwilling to
make loans. In mid-October, stocks began to rally after investors became more
confident the Fed would take a leadership position to prevent the U.S. economy
from falling into a recession. Other factors that assisted the stock market's
recovery included: a stronger than expected third-quarter U.S. Gross Domestic
Product report, reasonable third-quarter earnings reports, Japanese banking
reform legislation, a Brazilian fiscal package that should pave the way for an
IMF bailout and robust October auto sales figures. Given these factors,
investors have warmed-up to equity securities, and cash flows are once again
moving into stock funds. Small-capitalization issues and technology stocks have
shown market leadership in the recent advance.
(1) THE BENCHMARK IS A COMPOSITE INDEX MADE UP OF 40% OF THE S&P 500 INDEX
RETURN AND 60% OF THE LEHMAN BROTHERS AGGREGATE BOND INDEX RETURN. THE
COMPOSITE BENCHMARK IS NOT AVAILABLE FOR DIRECT INVESTMENT. THE S&P 500
INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET TOTAL RETURN
PERFORMANCE AND IS NOT AVAILABLE FOR DIRECT INVESTMENT. THE LEHMAN BROTHERS
AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF BROAD BOND
MARKET TOTAL RETURN PERFORMANCE AND IS NOT AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
PHOENIX INCOME AND GROWTH FUND (CONTINUED)
Within the fixed-income portion of the Fund, dislocations in bond markets
around the world held back overall performance. While problems in Russia were
the catalyst for a sudden drop in the value of emerging-markets debt, virtually
every country--both developed and emerging--was negatively affected on a
relative basis. As the crisis spread, even AAA-rated mortgage-backed securities
came under pressure. While the primary sources of underperformance within the
portfolio can be linked to non-U.S. holdings (dollar-denominated) and lower
quality domestic securities, there were no material positive contributors other
than U.S. Treasuries and taxable municipal securities. Even then, spreads for
all taxable municipal issues widened during the quarter as investors around the
globe flocked to the high credit quality of U.S. Treasuries.
Q: WHAT WERE THE BEST AS WELL AS THE MOST DISAPPOINTING PERFORMERS?
A: Some of our best performing stocks were from a rather diverse group
including: autos, drugs, retailers, technology and telecommunications stocks.
Ford stock was a strong performer due to robust auto sales and continued
progress on the cost-cutting side. Warner Lambert was one of the standouts in
the drug industry. Their pharmaceuticals division is benefiting from strong
sales of Lipitor (for cholesterol reduction) and Rezulin (for diabetes).
Strength in consumer spending has helped Wal-Mart Stores deliver double-digit
revenue and earnings growth. IBM had outstanding performance. A new family of
mainframe computers is boosting sales and demand for storage products remains
strong. Also, the services business is growing at a rapid pace. BellSouth
Corporation was strong in the telecommunications sector. Growth in new phone
lines and strong sales of high margin products like caller-ID and call waiting
are resulting in double-digit earnings growth.
The portfolio did suffer several disappointments on the equity side.
Financial services stocks, oil equipment and services companies and a few
cyclical names lost value due to the economic and financial difficulties
described above. Bank One Corporation and Citigroup were hurt by trading losses
and a general aversion to hold financial stocks amidst the volatile investment
environment. Weak oil prices hurt our positions in Schlumberger and Varco
International. Declining crop prices have hurt Deere & Company as farmers have
cut back on ordering new equipment. Finally, Whirlpool was hurt by its exposure
to the Brazilian market. Consumer demand for home appliances in Brazil has
slowed to a trickle over the past year due to rising interest rates and
extremely high levels of unemployment.
On the fixed-income side, we made minor tactical sector shifts to take
advantage of increasingly attractive valuations over the last few months of the
reporting period. We saw value in virtually all of the non-Treasury sectors of
the market, and as difficult as August was, valuations became even more
attractive. We shifted assets out of asset-backed securities and taxable
municipal issues in favor of investment-grade corporates, domestic high-yield
and tax-exempt municipal issues. We also maintained our well-diversified and
relatively conservative stance within our U.S. dollar-denominated foreign
holdings. Additionally, the portfolio's emerging-markets allocation is
concentrated in the large Latin American countries, based on their improving
economic fundamentals and ongoing commitment to financial reform.
3
<PAGE>
PHOENIX INCOME AND GROWTH FUND (CONTINUED)
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A: There is an expectation that the Federal Reserve will continue to lower
interest rates in order to prevent the U.S. economy from slipping into a
recession. There is a common saying on Wall Street, "don't fight the Fed." The
economists that we follow are forecasting a five to seven percent increase in
S&P 500 operating earnings in 1999. These same economists do not predict that
the U.S. economy will fall into a recession next year. So, as long as interest
rates fall and earnings continue to grow, the environment for common stocks is
expected to be favorable.
Looking ahead over the next six- to 12-month time period, we expect bond
market volatility to continue at its current high levels, driven by the
uncertainty surrounding the length and depth of the global liquidity crisis. We
believe our duration-neutral, value-driven fixed-income management style is most
suited for these types of market conditions. By remaining true to our discipline
of focusing on the most undervalued sectors, we believe we will be able to
continue to add value for our clients over the long term. Of course, past
performance is no guarantee of future results.
NOVEMBER 19, 1998
4
<PAGE>
Phoenix Income and Growth Fund
TEN LARGEST EQUITY HOLDINGS AT OCTOBER 31, 1998 (AS A PERCENTAGE OF TOTAL NET
ASSETS)
<TABLE>
<C> <S> <C>
1. AT&T Corp. 1.3%
PROVIDES VOICE, DATA AND VIDEO TELECOMMUNICATIONS SERVICES
2. Microsoft Corp. 1.1%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
3. Ford Motor Co. 1.1%
MANUFACTURER OF CARS, VANS, TRUCKS, TRACTORS AND ACCESSORIES
4. BankAmerica Corp. 1.0%
PROVIDES CONSUMER, CORPORATE AND INVESTMENT BANKING SERVICES
5. Pfizer, Inc. 1.0%
PRODUCES AND DISTRIBUTES PROPRIETARY HEALTH-RELATED ITEMS
6. United Technologies Corp. 0.9%
MAJOR MANUFACTURER OF AIRCRAFT JET ENGINES AND SPARE PARTS
7. Bank One Corp. 0.8%
THE NATION'S FIFTH LARGEST BANK HOLDING COMPANY
8. Fannie Mae 0.8%
MORTGAGE INSURER
9. Morgan Stanley Dean Witter & Co. 0.7%
PROVIDES A BROAD RANGE OF CREDIT AND INVESTMENT PRODUCTS TO
INDIVIDUALS
10. BellSouth Corp. 0.7%
PROVIDES WIRELINE TELECOMMUNICATIONS AND WIRELESS COMMUNICATIONS
SERVICES
</TABLE>
INVESTMENTS AT OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--7.4%
U.S. TREASURY NOTES--7.4%
U.S. Treasury Notes 5.375%, 1/31/00..... AAA $ 16,750 $ 16,952,623
U.S. Treasury Notes 5.50%, 3/31/00...... AAA 15,500 15,740,513
U.S. Treasury Notes 4.50%, 9/30/00...... AAA 5,090 5,114,802
U.S. Treasury Notes 5.25%, 8/15/03...... AAA 13,608 14,194,150
U.S. Treasury Notes 5.625%, 5/15/08..... AAA 15,227 16,398,768
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TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $68,117,420) 68,400,856
- --------------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--4.0%
FNMA 6.527%, 5/25/30.................... AAA 4,000 3,910,000
GNMA 6.50%, '23-'28..................... AAA 32,566 33,048,647
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TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $35,841,221) 36,958,647
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MUNICIPAL BONDS--9.1%
CALIFORNIA--4.0%
California State Department Water System
Series S 5%, 12/1/29.................... AA 1,700 1,691,500
Fresno County Pension Obligation Taxable
6.21%, 8/15/06.......................... AAA 5,600 5,810,000
Kern County Pension Obligation Taxable
7.26%, 8/15/14.......................... AAA 4,500 5,034,375
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Long Beach Pension Obligation Taxable
6.87%, 9/1/06........................... AAA $ 3,000 $ 3,236,250
Los Angeles County Public Works 5.125%,
12/1/29................................. AAA 2,560 2,582,400
Orange County Pension Obligation Series
A Taxable 7.62%, 9/1/08................. AAA 4,520 5,147,150
Sacramento County Series A Pension
Taxable 6.625%, 8/15/06................. AAA 3,400 3,616,750
San Bernardino County Financing
Authority Pension Obligation Revenue
Taxable 6.87%, 8/1/08................... AAA 1,335 1,445,137
San Bernardino County Financing
Authority Pension Obligation Revenue
Taxable 6.94%, 8/1/09................... AAA 3,625 3,951,250
Sonoma County Pension Obligation 6.625%,
6/1/13.................................. AAA 1,700 1,789,250
Ventura County Pension Obligation
Taxable 6.54%, 11/1/05.................. AAA 2,325 2,458,687
-------------
36,762,749
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FLORIDA--0.2%
Florida Department of Transportation 5%,
7/1/27.................................. AA+ 2,050 2,021,812
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
ILLINOIS--0.4%
Illinois Educational Facilities
Authority Revenue-Loyola University
Series A Taxable 7.84%, 7/1/24.......... AAA $ 3,410 $ 3,806,413
MASSACHUSETTS--0.4%
Massachusetts State Port Authority
Series C Revenue Taxable 6.05%,
7/1/02.................................. AA- 1,575 1,620,281
Massachusetts State Water Authority
Series D 5%, 8/1/24..................... AAA 2,050 2,021,813
-------------
3,642,094
-------------
NEW YORK--1.4%
Metropolitan Transportation Authority
Series A 5%, 4/1/23..................... AAA 5,500 5,438,125
New York State Series C Taxable 6.40%,
3/1/08.................................. AAA 7,460 7,805,025
-------------
13,243,150
-------------
PENNSYLVANIA--1.1%
Pittsburgh Pension Series C Taxable
6.50%, 3/1/17........................... AAA 4,250 4,462,500
Pittsburgh Water & Sewer Authority,
First Lien, Series A 5.05%, 9/1/25...... AAA 5,750 5,742,813
-------------
10,205,313
-------------
TEXAS--1.3%
Dallas-Fort Worth International Airport
Taxable 6.40%, 11/1/06.................. AAA 4,415 4,635,750
Dallas-Fort Worth International Airport
Taxable 6.40%, 11/1/07.................. AAA 1,200 1,258,500
Houston Water & Sewer System Revenue
Refunding, Jr., Series D 5%, 12/1/25.... AAA 2,560 2,537,600
Texas Taxable Veterans Series B 6.05%,
12/1/02................................. AA 3,000 3,097,500
-------------
11,529,350
-------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
WASHINGTON--0.3%
Washington State Series E Taxable 5%,
7/1/22.................................. AA+ $ 2,560 $ 2,553,600
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TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $79,433,948) 83,764,481
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.5%
AESOP Funding II LLC 97-1, A2 144A
6.40%, 10/20/03(b)...................... AAA 5,000 5,198,438
Associates Manufactured Housing Pass
Through 97-2, A6 7.075%, 3/15/28........ AAA 1,500 1,514,063
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ A+ 3,500 3,577,656
Copelco Capital Funding Corp., 98-A, A3
5.78%, 2/15/98.......................... AAA 5,000 5,043,750
Fleetwood Credit Corp. Grantor Trust
96-B, A 6.90%, 3/15/12.................. AAA 1,497 1,531,519
Green Tree Financial Corp. 96-2, M1
7.60%, 4/15/27.......................... AA- 3,325 3,506,836
Premier Auto Trust 98-1, A4 5.70%,
10/6/02................................. Aaa(c) 2,500 2,527,734
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TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $22,311,068) 22,899,996
- --------------------------------------------------------------------------------
CORPORATE BONDS--3.8%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.4%
Turner Broadcasting 8.375%, 7/1/13...... BBB- 3,000 3,453,750
COMPUTERS (SOFTWARE & SERVICES)--0.3%
Computer Associates International Series
B 6.375%, 4/15/05....................... A- 2,350 2,332,375
HEALTH CARE (HOSPITAL MANAGEMENT)--0.5%
Tenet Healthcare Corp. 144A 8.125%,
12/1/08(b).............................. BB- 5,000 4,956,250
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.5%
Boston Scientific Corp. 6.625%,
3/15/05................................. BBB 4,925 4,918,844
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--0.5%
Tyco International Group SA 6.375%,
6/15/05................................. A- $ 4,800 $ 4,914,000
PAPER & FOREST PRODUCTS--0.6%
Buckeye Cellulose Corp. 8.50%,
12/15/05................................ BB- 5,000 5,075,000
REITS--0.3%
Meditrust Corp. Notes 7.375%, 7/15/00... BBB- 3,000 2,913,750
RETAIL (FOOD CHAINS)--0.5%
Meyer (Fred), Inc. 7.45%, 3/1/08........ BB+ 4,000 4,200,000
TRUCKS & PARTS--0.2%
Cummins Engine, Inc. 6.45%, 3/1/05...... BBB+ 2,150 2,120,437
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $34,247,919) 34,884,406
- --------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--10.0%
CS First Boston Mortgage Securities
Corp. 97-C2, B 6.72%, 11/17/07.......... Aa(c) 11,000 11,123,750
CS First Boston Corp. 97-SPCE, D 144A
7.332%, 4/20/08(b)...................... BBB(c) 4,039 4,097,061
DLJ Mortgage Acceptance Corp. 96-CF1,
A1B 144A 7.58%, 2/12/06(b).............. AAA 4,400 4,629,625
DLJ Mortgage Acceptance Corp. 97-CF2, B2
144A 7.14%, 11/15/08(b)(d).............. BBB- 5,000 4,654,687
First Union Lehman Brothers 97-C1, B
7.43%, 4/18/07.......................... Aa(c) 2,500 2,646,875
G.E. Capital Mortgage Services, Inc.
94-9, M 6.50%, 2/25/24.................. AA 11,328 10,960,082
G.E Capital Mortgage Services, Inc.
96-4, A5 7%, 3/25/26.................... AAA 8,764 8,939,297
G.E. Capital Mortgage Services, Inc.
96-8, M 7.25%, 5/25/26.................. AAA 487 488,372
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
GMAC Commercial Mortgage Securities,
Inc. 97-C2, B 6.703%, 12/15/07.......... Aa(c) $ 7,000 $ 6,984,687
Lehman Large Loan 97-LLI, B 6.95%,
3/12/07................................. AA 4,340 4,543,437
Nationslink Funding Corp. 96-1, B 7.69%,
12/20/05................................ AA 1,500 1,601,719
Prudential Home Mortgage Securities
94-15, M 6.80%, 5/25/24................. Aaa(c) 8,299 8,270,044
Residential Asset Securitization Trust
96-A8, A1 8%, 12/25/26.................. AAA 867 868,909
Residential Funding Mortgage Securities
I 96-S1, A11 7.10%, 1/25/26............. AAA 2,800 2,856,000
Residential Funding Mortgage Securities
I 96-S4, M1 7.25%, 2/25/26.............. AA 3,892 3,961,094
Securitized Asset Sales 93-J, 2B 6.80%,
11/28/23................................ A(c) 4,411 4,252,794
Structured Asset Securities Corp. 95-C4,
B 7%, 6/25/26........................... AA 5,198 5,246,434
Triangle Funding Ltd. 98-2A, 3 144A
7.163%, 10/15/04(b)(d).................. BBB 6,000 6,010,313
- --------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $90,731,984) 92,135,180
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--8.0%
ARGENTINA--1.1%
Republic of Argentina Bearer FRB 6.188%,
3/31/05(d).............................. BB 8,070 6,708,104
Republic of Argentina 9.75%, 9/19/27.... BB 3,750 3,257,812
-------------
9,965,916
-------------
BRAZIL--0.6%
Republic of Brazil NMB-L 6.75%,
4/15/09(d).............................. BB- 9,075 5,099,016
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
BULGARIA--0.4%
Republic of Bulgaria Series A Bearer
Euro 2.50%, 7/28/12(d).................. B(c) $ 6,105 $ 3,388,275
COLOMBIA--0.7%
Republic of Colombia 7.625%, 2/15/07.... BBB- 8,000 6,100,000
CROATIA--0.7%
Croatia Series B 6.563%, 7/31/06(d)..... BBB- 3,619 2,967,675
Croatia Series A 6.563%, 7/31/10(d)..... BBB- 4,300 3,354,000
-------------
6,321,675
-------------
ECUADOR--0.3%
Ecuador Registered PDI Euro, PIK
interest capitalization, 6.625%,
2/27/15(d).............................. B(c) 3,876 1,690,869
Ecuador Bearer PDI Euro, PIK interest
capitalization, 6.625%, 2/27/15(d)...... B(c) 2,150 938,000
-------------
2,628,869
-------------
KOREA--0.7%
Republic of Korea 8.875%, 4/15/08....... BB+ 7,420 6,865,355
MEXICO--1.0%
United Mexican States Global Bond
11.50%, 5/15/26......................... BB 9,160 9,434,800
PANAMA--0.7%
Republic of Panama 8.875%, 9/30/27...... BB+ 7,515 6,932,588
PERU--0.4%
Peru PDI 4%, 3/7/17(d).................. BB 5,745 3,303,375
POLAND--1.1%
Poland Bearer PDI 4%, 10/27/14(d)....... BBB- 5,500 5,008,438
Poland Registered PDI 4%, 10/27/14(d)... BBB- 6,100 5,554,813
-------------
10,563,251
-------------
RUSSIA--0.1%
Russia IAN Series U.S. 6.625%,
12/15/15(d)............................. Ca(c) 5,538 539,985
Russia Principal Loan 6.625%,
12/15/20(d)............................. NR 5,865 461,869
-------------
1,001,854
-------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
VENEZUELA--0.2%
Republic of Venezuela 13.625%,
8/15/18................................. B+ $ 1,950 $ 1,443,000
Republic of Venezuela 9.25%, 9/15/27.... B+ 1,455 887,550
-------------
2,330,550
-------------
- --------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $89,180,860) 73,935,524
- --------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--1.5%
ARGENTINA--0.3%
Compania de Radiocomunicaciones Moviles
144A 9.25%, 5/8/08(b)................... BBB- 1,500 1,320,000
Telefonica De Argentina 144A 9.125%,
5/7/08(b)............................... BBB- 1,450 1,283,250
-------------
2,603,250
-------------
CHILE--0.3%
Compania Sud America de Vapores SA
7.375%, 12/8/03......................... BBB 610 567,300
Petropower I Funding Trust 144A 7.36%,
2/15/14(b).............................. BBB 2,400 2,028,000
-------------
2,595,300
-------------
JAPAN--0.9%
IBJ Preferred Capital Co. LLC 144A
8.79%, 12/29/49(b)(d)................... Baa(c) 4,880 3,910,979
SB Treasury Co. LLC 144A 9.40%,
12/29/49(b)(d).......................... BBB 4,880 4,399,964
-------------
8,310,943
-------------
- --------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $15,664,680) 13,509,493
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS--9.1%
COMMUNICATIONS EQUIPMENT--0.3%
Bell Atlantic Financial Services Cv.
144A 4.25%, 9/15/05(b).................. A 3,250 3,189,225
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
ELECTRICAL EQUIPMENT--0.6%
Itron, Inc. Cv. 6.75%, 3/31/04.......... NR $ 1,850 $ 1,311,187
Thermo Electron Corp. Cv. 144A 4.25%,
1/01/03(b).............................. A 5,200 4,550,000
-------------
5,861,187
-------------
ELECTRONICS (INSTRUMENTATION)--0.6%
Hewlett-Packard Co. Cv. 0%, 10/14/17.... AA 11,000 5,981,250
ELECTRONICS (SEMICONDUCTORS)--0.3%
Xilinx, Inc. Cv. 5.25%, 11/1/02......... B 2,600 2,658,500
FINANCIAL (DIVERSIFIED)--0.5%
Berkshire Hathaway Cv. 1%, 12/2/01...... Aa(c) 3,475 4,882,375
LEISURE TIME (PRODUCTS)--0.6%
Imax Corp. Cv. 5.75%, 4/1/03............ B 4,250 5,317,812
MANUFACTURING (DIVERSIFIED)--0.2%
National Semiconductor Cv. 144A 6.50%,
10/1/02(b).............................. BB 1,950 1,577,062
METALS MINING--0.6%
Coeur d'Alene Cv. 144A 7.25%,
10/31/05(b)............................. CCC 500 310,625
Coeur d'Alene Cv. 7.25%, 10/31/05....... CCC 3,500 2,174,375
Stillwater Mining Co. Cv. 7%, 5/1/03.... NR 2,800 3,482,500
-------------
5,967,500
-------------
OIL & GAS (DRILLING & EQUIPMENT)--1.2%
Baker Hughes, Inc. Cv 0%, 5/5/08........ A- 2,100 1,393,875
Diamond Offshore Drilling, Inc. Cv.
3.75%, 2/15/07.......................... BBB 4,950 5,086,125
Nabors Industries, Inc. Cv. 5%,
5/15/06................................. BBB 3,005 3,328,038
Offshore Logistic Cv. 144A 6%,
12/15/03(b)............................. B 1,000 901,250
-------------
10,709,288
-------------
PUBLISHING--0.3%
Hollinger, Inc. Cv. 0%, 10/5/13......... BB 6,000 2,482,500
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
PUBLISHING (NEWSPAPERS)--0.2%
Times Mirror Co. Cv. 144A 0%,
4/15/17(b).............................. A $ 3,500 $ 1,491,875
RETAIL (DRUG STORES)--0.7%
Rite Aid Corp. Cv. 144A 5.25%,
9/15/02(b).............................. BBB 5,175 6,572,250
RETAIL (GENERAL MERCHANDISE)--1.0%
Home Depot, Inc. Cv. 3.25%, 10/1/01..... A 1,250 2,379,688
Office Depot, Inc. Cv. 0%, 11/1/08...... BB 3,350 2,261,250
Pep Boys Cv. 0%, 9/20/11................ BBB 7,775 4,227,656
-------------
8,868,594
-------------
SERVICES (ADVERTISING/MARKETING)--0.8%
Interpublic Group (The) Cv. 144A 1.80%,
9/16/04(b).............................. NR 2,500 2,296,875
Omnicom Group, Inc. Cv. 144A 2.25%,
1/6/13(b)............................... Baa(c) 4,000 4,780,000
-------------
7,076,875
-------------
SERVICES (COMMERCIAL & CONSUMER)--0.1%
Metamor Worldwide, Inc. Cv. 2.94%,
8/15/04................................. NR 1,000 817,500
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.3%
US Cellular Corp. Cv. 0%, 6/15/15....... BBB 6,000 2,362,500
WASTE MANAGEMENT--0.8%
U.S.A. Waste Services, Inc. Cv. 4%,
2/1/02.................................. BBB 2,650 3,064,063
WMX Technologies, Inc. Cv. 2%,
1/24/05................................. BBB 4,710 4,486,275
-------------
7,550,338
-------------
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $86,977,827) 83,366,631
- --------------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--1.0%
SWITZERLAND--1.0%
Roche Holdings, Inc. Cv. 144A 0%,
5/6/12(b)............................... NR 7,800 4,095,000
Sandoz Capital BVI Ltd. Cv. 144A 2%,
10/6/02(b).............................. Aaa(c) 1,330 2,280,950
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ----------- -------------
<S> <C> <C> <C>
SWITZERLAND--CONTINUED
Sandoz Capital BVI Ltd. Cv. 2%,
10/6/02................................. Aaa(c) $ 1,500 $ 2,572,500
- --------------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $7,379,999) 8,948,450
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
-----------
<S> <C> <C> <C>
CONVERTIBLE PREFERRED STOCKS--4.5%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.2%
Cablevision Systems Corp. Cv. Pfd. 8.50%........... 21,000 1,538,250
COMMUNICATIONS EQUIPMENT--0.6%
Airtouch Communications Series C Cv. Pfd. 4.25%....
45,800 3,666,862
Merrill Lynch & Co. Series Cox (Strypes) Cv. Pfd.
6%................................................. 26,100 1,174,500
TCI Pacific Communications Cv. Pfd. 5%............. 4,800 1,032,000
-------------
5,873,362
-------------
COMPUTERS (SOFTWARE & SERVICES)--0.1%
Microsoft Corp. Series A Cv. Pfd. $2.196........... 8,500 829,812
ELECTRIC COMPANIES--0.1%
Texas Utilities Cv. Pfd. 9.25%..................... 20,000 1,127,500
FINANCIAL (DIVERSIFIED)--0.8%
Newell Financial Trust Cv. Pfd. 5.25%.............. 129,900 6,868,462
HEALTH CARE (DIVERSIFIED)--0.1%
McKesson Corp. Cv. Pfd. 144A $2.50(b).............. 11,600 1,232,500
INSURANCE (MULTI-LINE)--0.6%
American General Delaware Series A Cv. Pfd. 6%..... 24,600 2,127,900
St. Paul Capital LLC MIPS Cv. Pfd. 6%.............. 56,000 3,465,000
-------------
5,592,900
-------------
METALS MINING--0.2%
Timet Capital Trust Cv. Pfd. 144A 6.625%(b)........ 20,000 490,000
USX Corp. Cv. Pfd. 6.75%........................... 97,800 1,503,675
-------------
1,993,675
-------------
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
NATURAL GAS--0.6%
El Paso Energy Corp. Cv. Pfd. 4.75%................ 104,000 $ 5,044,000
OIL & GAS (DRILLING & EQUIPMENT)--0.1%
EVI, Inc. Cv. Pfd. 144A 5%(b)...................... 34,500 1,078,125
PAPER & FOREST PRODUCTS--0.6%
International Paper Co. Cv. Pfd. 5.25%............. 113,700 5,358,113
RETAIL (GENERAL MERCHANDISE)--0.2%
Kmart Financing Cv. Pfd. 7.75%..................... 28,000 1,552,250
TELEPHONE--0.1%
Mediaone Group, Inc. Series D Cv. Pfd. 4.50%....... 12,700 1,102,519
TEXTILES (APPAREL)--0.2%
Designer Finance Cv. Pfd. 6%....................... 46,700 1,850,488
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(IDENTIFIED COST $40,302,537) 41,041,956
- --------------------------------------------------------------------------------
COMMON STOCKS--34.3%
AEROSPACE/DEFENSE--0.3%
AAR Corp........................................... 1,800 41,625
Cordant Technologies Corp., Inc.................... 4,300 174,956
General Dynamics Corp.............................. 20,000 1,183,750
Gulfstream Aerospace Corp.(e)...................... 21,000 929,250
Sundstrand Corp.................................... 9,300 436,519
-------------
2,766,100
-------------
AIRLINES--0.4%
AMR Corp.(e)....................................... 53,000 3,551,000
ALUMINUM--0.1%
Reynolds Metals Co................................. 9,200 551,425
AUTOMOBILES--1.4%
Chrysler Corp...................................... 62,600 3,012,625
Ford Motor Co...................................... 181,600 9,851,800
-------------
12,864,425
-------------
BANKS (MAJOR REGIONAL)--1.7%
BankBoston Corp.................................... 12,800 471,200
Bank One Corp...................................... 159,798 7,810,127
First Union Corp................................... 22,500 1,305,000
Fleet Financial Group, Inc......................... 14,000 559,125
Mellon Bank Corp................................... 7,400 444,925
SunTrust Banks, Inc................................ 34,900 2,432,094
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
BANKS (MAJOR REGIONAL)--CONTINUED
Wells Fargo & Co................................... 7,800 $ 2,886,000
-------------
15,908,471
-------------
BANKS (MONEY CENTER)--1.5%
BankAmerica Corp................................... 160,606 9,224,807
Chase Manhattan Corp............................... 75,800 4,306,387
-------------
13,531,194
-------------
BEVERAGES (NON-ALCOHOLIC)--0.2%
PepsiCo, Inc....................................... 52,000 1,755,000
BIOTECHNOLOGY--0.1%
Amgen, Inc.(e)..................................... 12,600 989,887
BUILDING MATERIALS--0.4%
Fleetwood Enterprises, Inc......................... 11,700 377,325
Vulcan Materials Co................................ 30,500 3,618,062
-------------
3,995,387
-------------
CHEMICALS--0.3%
Dow Chemical Co.................................... 33,400 3,127,075
CHEMICALS (DIVERSIFIED)--0.2%
Goodrich (B.F.) Co................................. 28,400 1,022,400
Lyondell Chemical Co............................... 25,100 423,562
-------------
1,445,962
-------------
CHEMICALS (SPECIALTY)--0.1%
Engelhard Corp..................................... 13,800 289,800
International Speciality Products, Inc.(e)......... 20,500 275,469
-------------
565,269
-------------
COMMUNICATIONS EQUIPMENT--0.6%
Lucent Technologies, Inc........................... 62,000 4,971,625
QUALCOMM, Inc.(e).................................. 4,200 233,625
Tekelec(e)......................................... 3,000 53,812
Vitesse Semiconductor Corp.(e)..................... 9,300 299,925
-------------
5,558,987
-------------
COMPUTERS (HARDWARE)--1.6%
Apple Computer, Inc.(e)............................ 29,800 1,106,325
Compaq Computer Corp............................... 85,100 2,691,287
Dell Computer(e)................................... 33,100 2,172,187
Hewlett-Packard Co................................. 27,600 1,661,175
International Business Machines Corp............... 39,900 5,922,656
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
COMPUTERS (HARDWARE)--CONTINUED
Sun Microsystems, Inc.(e).......................... 16,200 $ 943,650
-------------
14,497,280
-------------
COMPUTERS (NETWORKING)--0.3%
Cisco Systems, Inc.(e)............................. 34,500 2,173,500
FORE Systems, Inc.(e).............................. 7,300 114,062
Xylan Corp.(e)..................................... 5,800 92,800
-------------
2,380,362
-------------
COMPUTERS (PERIPHERALS)--0.2%
EMC Corp.(e)....................................... 30,200 1,944,125
COMPUTERS (SOFTWARE & SERVICES)--2.2%
Autodesk, Inc...................................... 19,600 611,275
Cadence Design Systems, Inc.(e).................... 30,900 660,487
Computer Associates International, Inc............. 26,900 1,059,187
Computer Horizons Corp.(e)......................... 10,200 234,600
Computer Sciences Corp............................. 9,200 485,300
Compuware Corp.(e)................................. 6,300 341,381
Comverse Technology, Inc.(e)....................... 7,600 349,600
HBO & Co........................................... 70,000 1,837,500
Learning Co., Inc. (The)(e)........................ 5,300 136,806
Microsoft Corp.(e)................................. 93,400 9,888,725
NCR Corp.(e)....................................... 8,600 289,175
Oracle Corp.(e).................................... 33,400 987,387
PeopleSoft, Inc.(e)................................ 1,800 38,137
Platinum Technology, Inc.(e)....................... 1,100 18,081
Siebel Systems, Inc.(e)............................ 2,400 49,050
Sterling Software, Inc.(e)......................... 22,500 589,219
Symantec Corp.(e).................................. 14,800 236,800
Synopsys, Inc.(e).................................. 21,000 950,250
Unisys Corp.(e).................................... 49,600 1,320,600
-------------
20,083,560
-------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)--0.0%
Zale Corp.(e)...................................... 11,200 265,300
CONSUMER FINANCE--0.1%
Countrywide Credit Industries, Inc................. 16,900 729,869
DISTRIBUTORS (FOOD & HEALTH)--0.1%
Cardinal Health, Inc............................... 1,700 160,756
Rexall Sundown, Inc.(e)............................ 9,300 166,819
Twinlab Corp.(e)................................... 6,600 146,437
-------------
474,012
-------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
ELECTRIC COMPANIES--1.6%
Central & South West Corp.......................... 20,800 $ 578,500
Consolidated Edison, Inc........................... 45,000 2,255,625
DTE Energy Co...................................... 98,700 4,207,087
Edison International............................... 15,200 400,900
FPL Group, Inc..................................... 34,600 2,164,662
Houston Industries, Inc............................ 22,200 689,587
LG&E Energy Corp................................... 70,600 1,862,075
Minnesota Power, Inc............................... 56,000 2,348,500
Washington Water Power Co.......................... 20,500 385,656
-------------
14,892,592
-------------
ELECTRICAL EQUIPMENT--0.6%
General Electric Co................................ 53,300 4,663,750
Honeywell, Inc..................................... 6,100 487,237
-------------
5,150,987
-------------
ELECTRONICS (INSTRUMENTATION)--0.1%
EG&G, Inc.......................................... 32,600 819,075
ELECTRONICS (SEMICONDUCTORS)--0.4%
Intel Corp......................................... 37,600 3,353,450
ENGINEERING & CONSTRUCTION--0.1%
Fluor Corp......................................... 13,000 504,562
ENTERTAINMENT--0.3%
Royal Caribbean Cruises Ltd........................ 8,200 228,575
Time Warner, Inc................................... 21,637 2,008,184
Viacom, Inc. Class B(e)............................ 5,600 335,300
-------------
2,572,059
-------------
FINANCIAL (DIVERSIFIED)--2.2%
Citigroup, Inc..................................... 132,050 6,214,603
Fannie Mae......................................... 104,100 7,371,594
Imperial Bancorp(e)................................ 9,600 133,200
Morgan Stanley Dean Witter & Co.................... 104,900 6,792,275
-------------
20,511,672
-------------
FOODS--1.1%
Dole Food, Inc..................................... 1,800 54,225
Earthgrains Co..................................... 20,400 612,000
General Mills, Inc................................. 15,100 1,109,850
Hormel Foods Corp.................................. 52,800 1,719,300
Interstate Bakeries Corp........................... 50,400 1,263,150
Quaker Oats Co..................................... 76,800 4,536,000
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
FOODS--CONTINUED
Universal Foods Corp............................... 37,400 $ 811,113
-------------
10,105,638
-------------
GAMING, LOTTERY & PARIMUTUEL COMPANIES--0.0%
International Game Technology...................... 10,500 236,906
HARDWARE & TOOLS--0.0%
Kennametal, Inc.................................... 2,800 58,100
HEALTH CARE (DIVERSIFIED)--0.8%
AmeriSource Health Corp. Class A(e)................ 8,200 429,987
Bristol-Myers Squibb Co............................ 10,600 1,171,962
McKesson Corp...................................... 10,100 777,700
Warner-Lambert Co.................................. 64,100 5,023,837
-------------
7,403,486
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--2.5%
Genentech, Inc.(e)................................. 24,700 1,769,137
Lilly (Eli) and Co................................. 55,300 4,475,844
Medicis Pharmaceutical Corp. Class A(e)............ 2,700 135,337
Merck & Co., Inc................................... 34,300 4,639,075
Pfizer, Inc........................................ 83,200 8,928,400
Schering-Plough Corp............................... 27,900 2,870,213
-------------
22,818,006
-------------
HEALTH CARE (HOSPITAL MANAGEMENT)--0.1%
Pacificare Health Systems, Inc. Class B(e)......... 13,900 1,094,625
HEALTH CARE (MANAGED CARE)--0.1%
Trigon Healthcare, Inc.(e)......................... 7,700 288,750
Wellpoint Health Network, Inc.(e).................. 5,300 390,213
-------------
678,963
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.3%
Allegiance Corp.................................... 8,600 319,813
Allergan, Inc...................................... 7,700 480,769
Arterial Vascular Engineering, Inc.(e)............. 6,800 209,100
Baxter International, Inc.......................... 12,000 719,250
Hillenbrand Industries, Inc........................ 15,600 923,325
IDEXX Laboratories, Inc.(e)........................ 12,600 287,438
-------------
2,939,695
-------------
HOMEBUILDING--0.0%
Centex Corp........................................ 9,900 331,650
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
HOMEBUILDING--CONTINUED
Pulte Corp......................................... 4,100 $ 105,575
-------------
437,225
-------------
HOUSEHOLD FURN. & APPLIANCES--0.2%
Maytag Corp........................................ 2,000 98,875
Whirlpool Corp..................................... 32,500 1,665,625
-------------
1,764,500
-------------
INSURANCE (LIFE/HEALTH)--0.3%
Aetna, Inc......................................... 4,000 298,500
Equitable Companies, Inc........................... 51,100 2,503,900
-------------
2,802,400
-------------
INSURANCE (MULTI-LINE)--0.4%
American International Group, Inc.................. 1,300 110,825
CIGNA Corp......................................... 5,300 386,569
Lincoln National Corp.............................. 40,300 3,057,763
-------------
3,555,157
-------------
INSURANCE (PROPERTY-CASUALTY)--0.7%
Allstate Corp...................................... 143,400 6,175,163
LandAmerica Financial Group, Inc................... 3,900 202,556
-------------
6,377,719
-------------
INSURANCE BROKERS--0.1%
Aon Corp........................................... 17,800 1,103,600
INVESTMENT BANKING/BROKERAGE--0.1%
Merrill Lynch & Co., Inc........................... 7,600 450,300
IRON & STEEL--0.3%
Carpenter Technology Corp.......................... 21,800 764,363
Harsco Corp........................................ 47,800 1,565,450
USX-U.S. Steel Group............................... 9,800 227,850
-------------
2,557,663
-------------
MACHINERY (DIVERSIFIED)--0.3%
Deere & Co......................................... 31,300 1,107,238
Graco, Inc......................................... 3,700 97,588
Ingersoll-Rand Co.................................. 33,000 1,666,500
Zebra Technologies Corp.(e)........................ 5,600 183,400
-------------
3,054,726
-------------
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--1.4%
Crane Co........................................... 17,700 $ 509,981
McDermott International, Inc....................... 7,800 228,638
National Service Industries, Inc................... 6,200 222,425
Pentair, Inc....................................... 10,200 383,775
Teleflex, Inc...................................... 5,700 220,519
Thermo Instrument Systems, Inc.(e)................. 9,000 109,688
Tredegar Industries, Inc........................... 37,500 846,094
Tyco International Ltd............................. 39,200 2,427,950
United Technologies Corp........................... 83,200 7,924,800
-------------
12,873,870
-------------
NATURAL GAS--0.5%
Enron Corp......................................... 15,800 833,450
New Jersey Resources Corp.......................... 13,300 511,219
Sempra Energy...................................... 84,900 2,207,400
Southwest Gas Corp................................. 18,000 426,375
UGI Corp........................................... 14,200 324,825
-------------
4,303,269
-------------
OFFICE EQUIPMENT & SUPPLIES--0.0%
United Stationers, Inc.(e)......................... 16,300 431,950
OIL (INTERNATIONAL INTEGRATED)--0.2%
Exxon Corp......................................... 20,800 1,482,000
OIL & GAS (DRILLING & EQUIPMENT)--0.3%
Halliburton Co..................................... 2,200 79,063
National-Oilwell, Inc.(e).......................... 20,900 331,788
Schlumberger Ltd................................... 23,000 1,207,500
Smith International, Inc.(e)....................... 1,400 50,313
Transocean Offshore, Inc........................... 24,200 893,888
Varco International, Inc.(e)....................... 39,300 424,931
-------------
2,987,483
-------------
OIL & GAS (EXPLORATION & PRODUCTION)--0.0%
MDU Resources Group, Inc........................... 15,500 411,719
OIL & GAS (REFINING & MARKETING)--0.2%
El Paso Energy Corp................................ 6,200 219,713
Piedmont Natural Gas Co., Inc...................... 7,900 274,525
Sun Co., Inc....................................... 46,100 1,581,806
-------------
2,076,044
-------------
PAPER & FOREST PRODUCTS--0.0%
Bowater, Inc....................................... 2,100 85,706
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
PERSONAL CARE--0.0%
Estee Lauder Companies, Inc. Class A............... 2,300 $ 150,794
PHOTOGRAPHY/IMAGING--0.3%
Eastman Kodak Co................................... 30,000 2,325,000
Xerox Corp......................................... 3,200 310,000
-------------
2,635,000
-------------
REITS--0.1%
IRT Property Co.................................... 57,400 588,350
Meditrust Companies................................ 41,800 679,250
-------------
1,267,600
-------------
RESTAURANTS--0.0%
CKE Restaurants, Inc............................... 6,600 173,663
RETAIL (BUILDING SUPPLIES)--0.3%
Home Depot, Inc.................................... 41,500 1,805,250
Hughes Supply, Inc................................. 3,200 85,000
Lowe's Companies, Inc.............................. 38,500 1,296,969
-------------
3,187,219
-------------
RETAIL (COMPUTERS & ELECTRONICS)--0.3%
Best Buy Co., Inc.(e).............................. 10,800 518,400
Tandy Corp......................................... 51,900 2,572,294
-------------
3,090,694
-------------
RETAIL (DEPARTMENT STORES)--0.1%
Federated Department Stores, Inc.(e)............... 25,000 960,938
RETAIL (GENERAL MERCHANDISE)--0.9%
Dayton Hudson Corp................................. 26,000 1,101,750
Fingerhut Companies, Inc........................... 27,900 235,406
Kmart Corp......................................... 41,400 584,775
Office Depot, Inc.(e).............................. 9,800 245,000
Ross Stores, Inc................................... 15,000 487,500
Wal-Mart Stores, Inc............................... 82,000 5,658,000
-------------
8,312,431
-------------
RETAIL (SPECIALTY-APPAREL)--0.2%
Gap, Inc........................................... 5,400 324,675
Limited, Inc....................................... 35,200 902,000
Payless ShoeSource, Inc.(e)........................ 3,300 154,894
TJX Companies, Inc................................. 23,000 435,563
-------------
1,817,132
-------------
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
SERVICES (ADVERTISING/MARKETING)--0.3%
Interpublic Group of Companies, Inc................ 15,900 $ 930,150
Omnicom Group, Inc................................. 38,700 1,913,231
Snyder Communications Corp., Inc.(e)............... 4,200 149,888
True North Communications, Inc..................... 6,500 153,563
-------------
3,146,832
-------------
SERVICES (COMMERCIAL & CONSUMER)--0.7%
Deluxe Corp........................................ 81,300 2,632,088
H&R Block, Inc..................................... 25,400 1,138,238
Hertz Corp. Class A................................ 5,100 182,644
Interim Services, Inc.(e).......................... 4,300 91,375
Ogden Corp......................................... 20,600 553,625
Viad Corp.......................................... 54,500 1,495,344
-------------
6,093,314
-------------
TELECOMMUNICATIONS (LONG DISTANCE)--1.3%
AT&T Corp.......................................... 189,400 11,790,150
TELEPHONE--1.8%
Ameritech Corp..................................... 32,400 1,747,575
BellSouth Corp..................................... 79,900 6,377,019
GTE Corp........................................... 40,900 2,400,319
SBC Communications, Inc............................ 22,100 1,023,506
US West, Inc....................................... 87,600 5,026,050
-------------
16,574,469
-------------
TEXTILES (APPAREL)--0.1%
Fruit of the Loom, Inc. Class A(e)................. 10,100 154,025
Jones Apparel Group, Inc.(e)....................... 7,200 124,200
Liz Claiborne, Inc................................. 16,400 481,750
Tommy Hilfiger Corp.(e)............................ 3,100 143,956
V.F. Corp.......................................... 10,100 422,306
-------------
1,326,237
-------------
TOBACCO--0.9%
Philip Morris Companies, Inc....................... 119,800 6,124,775
Universal Corp..................................... 62,100 2,305,463
-------------
8,430,238
-------------
TRUCKS & PARTS--0.0%
PACCAR, Inc........................................ 6,100 266,113
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $281,582,800) 316,102,661
- --------------------------------------------------------------------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--1.1%
CHEMICALS (DIVERSIFIED)--0.3%
Akzo Nobel N.V. Sponsored ADR (Netherlands)........ 60,200 $ 2,377,900
COMPUTERS (SOFTWARE & SERVICES)--0.0%
Check Point Software Technologies Ltd.
(Israel)(e)........................................ 8,800 200,200
HOUSEHOLD FURN. & APPLIANCES--0.1%
Royal Philips Electronics NV NY Registered Shares
(Netherlands)...................................... 9,400 515,825
OIL (INTERNATIONAL INTEGRATED)--0.6%
Elf Aquitaine SA Sponsored ADR (France)............ 40,700 2,360,600
Royal Dutch Petroleum Co. NY Registered Shares
(Netherlands)...................................... 65,000 3,201,250
-------------
5,561,850
-------------
TELECOMMUNICATIONS (LONG DISTANCE)--0.0%
Telecom Corporation of New Zealand Ltd. Sponsored
ADR (New Zealand).................................. 10,000 330,000
TELECOMMUNICATIONS-EQUIPMENT--0.1%
Northern Telecom Ltd. (Canada)..................... 25,000 1,070,312
- --------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $11,410,775) 10,056,087
- --------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.3%
(IDENTIFIED COST $863,183,038) 886,004,368
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.7%
COMMERCIAL PAPER--1.7%
Albertson's, Inc. 5.63%, 11/2/98........ A-1 $ 110 $ 109,983
AlliedSignal, Inc. 6%, 11/2/98.......... A-1 3,890 3,889,351
Ford Motor Credit Co. 5.39%, 11/4/98.... A-1 3,435 3,433,457
Greenwich Funding Corp. 5.23%, 11/9/98.. A-1+ 3,470 3,465,905
Greenwich Asset Funding, Inc. 5.30%,
11/10/98................................ A-1+ 3,000 2,996,087
Goldman, Sachs & Co. 5.25%, 11/16/98.... A-1+ 1,865 1,860,920
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $15,755,703) 15,755,703
- ----------------------------------------------------------------------------
</TABLE>
TOTAL INVESTMENTS--98.0%
(IDENTIFIED COST $878,938,741) 901,760,071(a)
Cash and receivables, less liabilities--2.0% 18,264,788
-------------
NET ASSETS--100.0% $ 920,024,859
-------------
-------------
(a) Federal Income Tax Information: net unrealized appreciation of investment
securities is comprised of gross appreciation of $63,804,953 and gross
depreciation of $41,008,738 for federal income tax purposes. At October 31,
1998, the aggregate cost of securities for federal income tax purposes was
$878,963,856.
(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 October 31,
1998, these securities amount to a value of $77,334,304 or 8.4% of net
assets.
(c) As rated by Moody's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Non-income producing.
See Notes to Financial Statements 15
<PAGE>
Phoenix Income and Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value (Identified cost
$878,938,741) $ 901,760,071
Cash 1,095,376
Receivables
Investment securities sold 11,972,145
Dividends and interest 7,038,981
Fund shares sold 138,184
--------------
Total assets 922,004,757
--------------
LIABILITIES
Payables
Fund shares repurchased 708,232
Investment advisory fee 518,325
Distribution fee 203,458
Transfer agent fee 319,125
Financial agent fee 41,351
Trustees' fee 17,696
Accrued expenses 171,711
--------------
Total liabilities 1,979,898
--------------
NET ASSETS $ 920,024,859
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 823,609,222
Undistributed net investment income 2,949,756
Accumulated net realized gain 70,644,551
Net unrealized appreciation 22,821,330
--------------
NET ASSETS $ 920,024,859
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization (Net Assets $593,569,139) 60,257,422
Net asset value per share $9.85
Offering price per share $9.85/(1-4.75%) $10.34
CLASS B
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization (Net Assets $326,455,720) 33,067,135
Net asset value and offering price per share $9.87
</TABLE>
STATEMENT OF OPERATIONS FOR THE
SIX MONTHS ENDED OCTOBER 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 17,181,065
Dividends 3,041,043
--------------
Total investment income 20,222,108
--------------
EXPENSES
Investment advisory fee 2,765,518
Distribution fee, Class A 564,231
Distribution fee, Class B 1,132,183
Financial agent fee 176,964
Transfer agent 505,479
Printing 66,185
Custodian 41,683
Registration 21,706
Professional 21,070
Trustees 10,792
Miscellaneous 29,143
--------------
Total expenses 5,334,954
--------------
NET INVESTMENT INCOME 14,887,154
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 10,026,712
--------------
Net change in unrealized appreciation (depreciation) on
investments (42,080,690)
Less unrealized depreciation in connection with Phoenix
Convertible Fund merger (5,042,696)
--------------
Net change in unrealized appreciation (depreciation) (37,037,994)
--------------
NET LOSS ON INVESTMENTS (27,011,282)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (12,124,128)
--------------
--------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
10/31/98 Year Ended
(Unaudited) 4/30/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 14,887,154 $ 27,467,229
Net realized gain 10,026,712 131,616,037
Net change in unrealized appreciation
(depreciation) (37,037,994) 4,573,207
------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS (12,124,128) 163,656,473
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (8,434,561) (17,182,669)
Net investment income, Class B (5,560,706) (10,988,112)
Net realized gains, Class A -- (54,265,543)
Net realized gains, Class B -- (43,432,965)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (13,995,267) (125,869,289)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sale of shares (3,579,237 and
2,818,975 shares, respectively) 36,318,355 29,110,549
Net asset value of shares issued from
Convertible Fund merger (16,132,079 shares) 156,615,165 --
Net asset value of shares issued from
reinvestment of distributions
(665,797 and 6,091,273 shares, respectively) 6,508,717 58,628,750
Cost of shares repurchased (5,203,929 and
9,627,226, respectively) (51,620,886) (99,772,724)
------------- -------------
Total 147,821,351 (12,033,425)
------------- -------------
CLASS B
Proceeds from sale of shares (638,961 and
2,189,770 shares, respectively) 6,348,040 22,255,564
Net asset value of shares issued from
Convertible Fund merger (740,793 shares) 7,207,950 --
Net asset value of shares issued from
reinvestment of distributions
(438,892 and 4,402,084 shares, respectively) 4,300,662 42,377,821
Cost of shares repurchased (4,159,106 and
8,764,802, respectively) (41,401,728) (90,886,654)
------------- -------------
Total (23,545,076) (26,253,269)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS 124,276,275 (38,286,694)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 98,156,880 (499,510)
NET ASSETS
Beginning of period 821,867,979 822,367,489
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME OF
$2,949,756 AND $2,057,869, RESPECTIVELY] $ 920,024,859 $ 821,867,979
------------- -------------
------------- -------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix Income and Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED APRIL 30,
10/31/98 ----------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.20 $ 9.86 $ 10.08 $ 8.88 $ 9.33 $ 9.92
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.18 0.38 0.40 0.44 0.46 0.45
Net realized and unrealized gain
(loss) (0.34) 1.63 0.66 1.22 0.03 (0.08)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.16) 2.01 1.06 1.66 0.49 0.37
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.19) (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 (0.19) (1.67) (1.28) (0.46) (0.94) (0.96)
----- ----- ----- ----- ----- -----
Change in net asset value (0.35) 0.34 (0.22) 1.20 (0.45) (0.59)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.85 $ 10.20 $ 9.86 $ 10.08 $ 8.88 $ 9.33
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) (1.55)%(3) 21.87% 10.93% 19.01% 5.95% 3.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $593,569 $459,992 $451,439 $493,454 $490,225 $524,855
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.17%(2) 1.13% 1.18% 1.18% 1.16% 1.23%
Net investment income 3.96%(2) 3.61% 3.82% 4.39% 5.07% 4.57%
Portfolio turnover 34%(3) 155% 111% 107% 90% 88%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED APRIL 30,
10/31/98 ----------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.22 $ 9.87 $ 10.09 $ 8.88 $ 9.32 $ 9.92
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.18 0.30 0.31 0.36 0.39 0.38
Net realized and unrealized gain
(loss) (0.36) 1.64 0.67 1.23 0.04 (0.08)
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.18) 1.94 0.98 1.59 0.43 0.30
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.17) (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 (0.17) (1.59) (1.20) (0.38) (0.87) (0.90)
----- ----- ----- ----- ----- -----
Change in net asset value (0.35) 0.35 (0.22) 1.21 (0.44) (0.60)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 9.87 $ 10.22 $ 9.87 $ 10.09 $ 8.88 $ 9.32
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
Total return(1) (1.78)%(3) 21.03% 10.05% 18.14% 5.23% 2.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $326,456 $361,876 $370,929 $396,169 $386,515 $378,847
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.59%(2) 1.88% 1.93% 1.93% 1.91% 1.91%
Net investment income 3.51%(2) 2.86% 3.06% 3.64% 4.32% 3.98%
Portfolio turnover 34%(3) 155% 111% 107% 90% 88%
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
18 See Notes to Financial Statements
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (UNAUDITED)
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 principals 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.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
Effective June 1, 1998, National Securities and Research Corporation assigned
its investment advisory agreement to Phoenix Investment Counsel, Inc. ("PIC"),
both an indirect majority-owned subsidiary of Phoenix Home Life Mutual Insurance
Company ("PHL"). PIC 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 $18,901 for Class A shares and deferred
sales charges of $220,573 for Class B shares for the six months ended October
31, 1998. In addition, the Fund pays PEPCO a distribution fee at an annual rate
of 0.25% for Class A shares and reimbursed up to 1.00% for Class B shares of the
average daily net assets of the Fund. The Distribution Plan for
19
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (UNAUDITED) (CONTINUED)
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 six
months ended October 31, 1998, $885,621 was earned by the Distributor, $778,885
was paid to unaffiliated participants and $31,908 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 through May 31, 1998, 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 applied. Effective June 1, 1998, PEPCO
receives a financial agent fee equal to the sum of (1) the documented cost of
fund accounting and related services provided by PFPC, Inc. (subagent to PEPCO),
plus (2) the documented cost to PEPCO to provide financial reporting, tax
services and oversight of subagent's performance. The current fee schedule of
PFPC, Inc. ranges from 0.085% to 0.0125% of the average daily net asset values
of the Fund. Certain minimum fees and fee waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the six months ended October 31, 1998,
transfer agent fees were $505,479 of which PEPCO retained $194,098 which is net
of fees paid to State Street.
At October 31, 1998, PHL and affiliates held 144 Class A shares and 20 Class B
shares of the Fund with a combined value of $1,615.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities and
options, for the six months ended October 31, 1998, aggregated $264,667,517 and
$310,910,943, including $56,742,492 and $61,672,498 of U.S. Government and
Agency securities, respectively.
4. MERGER
On October 23, 1998, the Fund acquired all the net assets of the Phoenix
Convertible Fund Series ("Convertible Fund") pursuant to an Agreement and Plan
of Reorganization approved by fund shareholders on October 14, 1998. The
acquisition was accomplished by a tax-free exchange of 16,132,079 Class A shares
of the Fund and 740,793 Class B shares of the Fund (valued at $156,615,165 and
$7,207,950, respectively) for 9,661,762 Convertible Fund Class A shares and
446,615 Convertible Fund Class B shares outstanding on October 23, 1998. The
Convertible Fund's net assets at that date of $163,823,115, including $5,042,696
of unrealized depreciation were combined with those of the Fund. The aggregate
net assets of the Fund immediately after the merger were $908,891,194.
5. MARKET RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
This report is not authorized for distribution to prospective investors in the
Phoenix Income and 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.
20
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Phoenix Convertible Fund Series (the
"Convertible Fund"), a series of the Phoenix Series Fund was held on October 14,
1998 to approve the following matters:
1. An Agreement and Plan of Reorganization under which the Convertible Fund
will become part of the Phoenix Income and Growth Fund.
On the record date for this meeting there were 10,368,092 shares outstanding and
50.52% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Agreement and Plan of Reorganization 4,414,483 222,957 600,613
</TABLE>
21
<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
John F. Sharry, Executive 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
Phoenix Investment Counsel, Inc.
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
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
Internet access:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION ---------------
PO Box 2200 Bulk Rate Mail
Enfield CT 06083-2200 U.S. Postage
PAID
Springfield, MA
Permit No. 444
---------------
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 661 (12/98)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000796298
<NAME> PHOENIX INCOME & GROWTH FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 878939
<INVESTMENTS-AT-VALUE> 901760
<RECEIVABLES> 19149
<ASSETS-OTHER> 1096
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 922005
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1980
<TOTAL-LIABILITIES> 1980
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 823609
<SHARES-COMMON-STOCK> 60257
<SHARES-COMMON-PRIOR> 45084
<ACCUMULATED-NII-CURRENT> 2950
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 70645
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 22821
<NET-ASSETS> 920025
<DIVIDEND-INCOME> 3041
<INTEREST-INCOME> 17181
<OTHER-INCOME> 0
<EXPENSES-NET> (5335)
<NET-INVESTMENT-INCOME> 14887
<REALIZED-GAINS-CURRENT> 10027
<APPREC-INCREASE-CURRENT> (37038)
<NET-CHANGE-FROM-OPS> (12124)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (8435)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19711
<NUMBER-OF-SHARES-REDEEMED> (5204)
<SHARES-REINVESTED> 666
<NET-CHANGE-IN-ASSETS> 133577
<ACCUMULATED-NII-PRIOR> 2058
<ACCUMULATED-GAINS-PRIOR> 60618
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2766
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5335
<AVERAGE-NET-ASSETS> 783707
<PER-SHARE-NAV-BEGIN> 10.20
<PER-SHARE-NII> .18
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000796298
<NAME> PHOENIX INCOME & GROWTH FUND
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<NAME> CLASS B
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<S> <C>
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</TABLE>
