<PAGE>
Phoenix Investment Partners
APRIL 30, 1999
ANNUAL REPORT
Phoenix Income
and Growth Fund
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
PHILIP MCLOUGHLIN
We are pleased to provide this report for the Phoenix Income and Growth Fund
for the fiscal year ended April 30, 1999.
The last 12 months were a particularly volatile period for both the stock and
bond markets, spurred by the Russian currency devaluation last summer. It was
also a period of wide disparity in performance of large-capitalization stocks
versus small-capitalization stocks and growth-oriented investment styles versus
value investing.
Disparity in performance was even more notable in the fixed-income markets as
investors everywhere flocked to the high credit quality of U.S. Treasury
securities, driven by the uncertainty surrounding the length and depth of the
global liquidity crisis last year. We saw this trend reverse, however, in the
first quarter of 1999, when lower quality bonds generally outperformed higher
quality bonds.
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 not a guarantee of future results.
On the following pages, the Fund's portfolio management team discuss market
factors that affected portfolio performance and share their outlook for the next
six to 12 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
(option 0), between 8:00 a.m. and 6:00 p.m. Eastern Time, Monday through Friday.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
MAY 17, 1999
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
1
<PAGE>
PHOENIX INCOME AND GROWTH FUND
A DISCUSSION WITH FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks current yield and conservation of capital as well as the
potential for long-term capital appreciation. The Fund's asset allocation is
approximately 40% equity and 60% fixed-income securities. Investors should note
that the Fund might 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 and economic and political risks.
Q: HOW DID THE FUND PERFORM OVER THE LAST FISCAL YEAR?
A: For the 12 months ended April 30, 1999, Class A shares returned 6.97% and
Class B shares returned 6.18% compared with 12.90% for the Fund's benchmark(1)
and an average return of only 5.22% for a peer group of 93 mutual funds with
income as their investment objective, according to Lipper Inc. All performance
figures assume reinvestment of distributions and exclude the effect of sales
charges.
Q: WHAT WERE SOME OF THE MARKET FACTORS THAT AFFECTED THE FUND'S PERFORMANCE?
A: Large-capitalization stocks dominated small-cap stocks over the past year
ended April 30, 1999. The large cap S&P 500 returned 21.8% versus a negative
(9.2)% return for the small-cap Russell 2000 Index(2). Portfolio managers have
favored large-cap stocks for their liquidity and strong earnings generated by
restructuring benefits and economies of scale.
In terms of style, growth stocks returned more than value type companies,
which we invest in. The S&P 500 Barra Growth Index(3) returned 32.0% versus a
15.1% return for the S&P 500 Barra Value Index(4) for the year. There was a
"flight to quality" as investors sought refuge in blue-chip growth stocks, as
there was the perception the economy would slow and dependable earnings growth
would become a scarce commodity. In retrospect, this has hardly been the case.
Economic growth and earnings gains in the first quarter of this year have
exceeded expectations. As a result, small-capitalization stocks and value
companies have become fashionable once again.
Through the end of December, consumer cyclical stocks and technology-based
companies posted strong returns. From December through April, there has been a
rebound in companies in
(1) THE FUND'S 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) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE OF SMALL-CAPITALIZATION STOCKS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
(3) THE S&P 500 BARRA GROWTH INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF
LARGE-CAP, GROWTH-ORIENTED STOCKS. THE INDEX IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
(4) THE S&P 500 BARRA VALUE INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF
LARGE-CAP, VALUE-ORIENTED STOCKS. THE INDEX IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
2
<PAGE>
PHOENIX INCOME AND GROWTH FUND (CONTINUED)
the basic materials and energy sectors. Improvements in Asian economies, an OPEC
agreement to reduce oil output and improved pricing in the paper and metals
markets have stirred renewed interest in these cyclical stocks.
Within the fixed-income portion of the Fund, dislocations in bond markets
around the world during the latter part of 1998 held back overall performance.
While problems in Russia were the catalyst for the sudden drop in the value of
emerging-market debt last summer, virtually every country, both developed and
emerging, was negatively affected on a relative basis.
By the end of the first quarter of 1999, most of the damage done to the bond
market last year was cleared away. Newspaper stories on emerging-market
countries have retreated to the inside pages, and the tenor of the reporting has
changed from terrifying to modestly upbeat. Yield spreads have tightened across
the board to the point that they are much closer to where they were in June of
1998 than at the absolute wide points of August through October.
Q: WHAT WERE THE BEST AS WELL AS THE MOST DISAPPOINTING PERFORMERS?
A: The portfolio benefited from holdings in the retail, computer and
telecommunications equipment industries. Balancing out those gains were laggards
in the electric and gas utility group.
One of our best retail stocks was Wal-Mart Stores. The company delivered
considerable earnings growth due to a strong domestic economy and the
"wealth-effect" of the rising stock market. In the company's most recent
earnings report, Wal-Mart indicated shoppers have focused their spending on
clothing, lawn and garden and household goods. In the computer industry, both
Microsoft and IBM were top performers as they consistently beat earnings
expectations on strong product sales. Lucent Technologies was a big gainer in
the telecommunications equipment industry. Lucent had strong product sales as
telephone companies continue to expand their infrastructure to handle increasing
voice and data traffic.
As mentioned, weighing on the portfolio's performance were holdings in the
electric and gas utility industries. Despite being statistically cheap, the
stocks performed poorly due to rising interest rates and higher energy prices.
Two of our holdings with unsatisfactory results in this group were LG&E Energy
and Sempra Energy.
Performance in the fixed-income portion of the portfolio was negatively
affected by our exposure to more credit-sensitive sectors of the market last
year. While we had sold out of Brazil on the first trading day of 1999 and
avoided the impact of the devaluation, we held other positions that were
vulnerable. As a result, we have lowered the portfolio's overall allocation to
emerging markets in favor of domestic high yield. We have reduced our exposure
in Argentina and sold completely out of Peru. Currently, we are invested in
three regions, represented by countries with strong fundamentals.
Q: WHAT IS YOUR OUTLOOK FOR THE REMAINDER OF 1999?
A: After a strong 1998 and first quarter of 1999, we expect another year of
positive surprises for the U.S. economy. Lower interest rates in Europe and
improving Asian economies should help domestic companies with overseas sales.
Earnings estimates for the S&P 500 have been revised higher since the start of
the year. It seems economists and analysts were too pessimistic in their initial
assumptions for the economy and corporate earnings.
3
<PAGE>
PHOENIX INCOME AND GROWTH FUND (CONTINUED)
Recent observations show that manufacturing activity is improving, consumers
continue to spend, and business investment remains strong. At this point, the
main concern we have is rising long-term interest rates due to
faster-than-expected economic growth. If growth is too strong, the risk is that
the Federal Reserve begins to raise interest rates. That is never good news for
stock market investors.
We believe the fixed-income portion of the portfolio is well structured to
take advantage of current market conditions, and we will continue to emphasize
the credit-sensitive sectors, given their very favorable valuations.
Specifically, we see value in the commercial mortgage-backed sector, domestic
high yield, taxable municipal issues and select U.S. dollar-denominated below
investment-grade foreign holdings.
We are optimistic that yield spreads will continue to return to "more
realistic" historical levels. Bond market volatility toned down in the first
quarter of 1999 but is still higher than historical averages. However, we still
expect 1999 to be less volatile than 1998.
The market continues to pay investors a large premium as compensation for
taking risk, and this premium serves as a cushion against an economic slowdown,
credit problems and global instability. For those investors willing and able to
be patient and discerning, we believe these factors present strong
opportunities.
MAY 14, 1999
4
<PAGE>
Phoenix Income and Growth Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 4/30/99
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 4/30/99 DATE
------ ------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 6.97% 12.77% 11.67% -- --
Class A Shares at POP(3) 1.89 11.67 11.13 -- --
Class B Shares at NAV(2) 6.18 11.95 -- 10.75% 1/3/92
Class B Shares with CDSC(4) 2.54 11.95 -- 10.75 1/3/92
Balanced Benchmark(7) 12.90 15.50 12.98 12.38 Note 5
S&P 500 Index(8) 21.82 26.95 18.84 19.99 1/3/92
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) Index information from 1/1/92 to 4/30/99.
(6) This chart illustrates POP returns on Class A Shares for ten years. Returns
on Class B Shares will vary due to differing sales charges.
(7) The Balanced 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 index's performance does not reflect sales charges.
(8) The S&P 500 Index is a measure of stock market total return performance.
The S&P 500's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 4/30
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX INCOME & GROWTH BALANCED
FUND CLASS A(6) BENCHMARK(7) S&P 500 STOCK INDEX(8)
<S> <C> <C> <C>
4/30/89 $9,525.00 $10,000.00 $10,000.00
4/30/90 $9,966.13 $11,518.38 $11,043.42
4/30/91 $11,420.87 $13,109.05 $12,990.55
4/30/92 $13,280.13 $14,610.50 $14,804.53
4/30/93 $15,243.27 $16,676.48 $16,172.93
4/30/94 $15,759.06 $17,017.56 $17,037.31
4/30/95 $16,697.44 $18,579.48 $20,014.65
4/30/96 $19,871.19 $22,102.09 $26,074.00
4/30/97 $22,043.66 $24,502.40 $32,645.91
4/30/98 $26,863.71 $30,770.30 $46,118.09
4/30/99 $28,736.15 $34,405.22 $56,179.32
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
4/30/89 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 4/30/99
As a percentage of equity holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 20%
Financials 18
Consumer Cyclicals 16
Capital Goods 10
Health Care 10
Communication Services 8
Cunsumer Staples 7
Other 11
</TABLE>
5
<PAGE>
Phoenix Income and Growth Fund
TEN LARGEST EQUITY HOLDINGS AT APRIL 30, 1999 (AS A PERCENTAGE OF TOTAL NET
ASSETS)
<TABLE>
<C> <S> <C>
1. Microsoft Corp. 1.5%
WORLD'S LEADING COMPUTER SOFTWARE COMPANY
2. Intel Corp. 1.1%
DESIGNS, DEVELOPS AND MARKETS MICROCOMPUTER COMPONENTS
3. Ford Motor Co. 1.0%
MANUFACTURER OF CARS, VANS, TRUCKS, TRACTORS AND ACCESSORIES
4. Chase Manhattan Corp. (The) 1.0%
DOMESTIC AND INTERNATIONAL FINANCIAL SERVICES PROVIDER
5. AT&T Corp. 0.9%
PROVIDES VOICE, DATA AND VIDEO TELECOMMUNICATIONS SERVICES
6. Wal-Mart Stores, Inc. 0.9%
ONE OF THE LARGEST U.S. DISCOUNT RETAILERS
7. Lucent Technologies, Inc. 0.9%
LEADING SUPPLIER OF TELECOMMUNICATIONS EQUIPMENT
8. Fannie Mae 0.8%
MORTGAGE INSURER
9. International Business Machines Corp. 0.8%
PROVIDES ADVANCED INFORMATION TECHNOLOGIES
10. Bank One Corp. 0.8%
THE NATION'S FIFTH LARGEST BANK HOLDING COMPANY
</TABLE>
INVESTMENTS AT APRIL 30, 1999
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--5.2%
U.S. TREASURY BONDS--0.5%
U.S. Treasury Bonds 5.25%, 11/15/28............... AAA $ 4,720 $ 4,364,550
U.S. TREASURY NOTES -- 4.7%
U.S. Treasury Notes 5.375%, 1/31/00(g)............ AAA 16,750 16,813,533
U.S. Treasury Notes 5.50%, 3/31/00................ AAA 15,500 15,586,501
U.S. Treasury Notes 4.50%, 9/30/00................ AAA 5,090 5,052,149
U.S. Treasury Notes 4.625%, 11/30/00.............. AAA 2,500 2,483,247
U.S. Treasury Notes 5%, 2/28/01................... AAA 600 599,027
U.S. Treasury Notes 4.75%, 2/15/04................ AAA 450 441,000
-------------
40,975,457
-------------
- -----------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $45,457,009) 45,340,007
- -----------------------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--3.5%
GNMA 6.50%, '23-'28............................... AAA 30,722 30,652,499
- -----------------------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $30,055,938) 30,652,499
- -----------------------------------------------------------------------------------------
MUNICIPAL BONDS--9.5%
CALIFORNIA--4.4%
Fresno County Pension Obligation Taxable 6.21%,
8/15/06........................................... AAA 5,600 5,565,000
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Kern County Pension Obligation Revenue 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 3,097,500
Los Angeles County Public Works Lease Revenue PJ
V-B 5.125%, 12/1/29............................... AAA 2,560 2,550,400
Oakland Pension Obligation Taxable
Revenue Series A 6.91%, 12/15/07.................. AAA 1,885 1,955,687
Oakland Pension Obligation Taxable Revenue Series
A 6.95%, 12/15/08................................. AAA 3,650 3,805,125
Orange County Pension Obligation Revenue Taxable
Series A 7.62%, 9/1/08............................ AAA 4,520 4,915,500
Sacramento County Pension Funding Revenue Taxable
Series A 6.625%, 8/15/06.......................... AAA 3,400 3,459,500
San Bernardino County Pension Obligation Revenue
Taxable 6.87%, 8/1/08............................. AAA 1,335 1,381,725
San Bernardino County Pension Obligation Revenue
Taxable 6.94%, 8/1/09............................. AAA 3,625 3,770,000
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Sonoma County Pension Obligation Revenue Taxable
6.625%, 6/1/13.................................... AAA $ 1,700 $ 1,706,375
Ventura County Pension Obligation Taxable 6.54%,
11/1/05........................................... AAA 1,325 1,348,187
-------------
38,324,999
-------------
FLORIDA--0.3%
Tampa Solid Waste System Revenue Taxable Series A
6.23%, 10/1/05.................................... Aaa(c) 2,820 2,823,525
ILLINOIS--0.4%
Illinois Educational Facilities Authority-Loyola
University Revenue Taxable Series A 7.84%,
7/1/24............................................ AAA 3,410 3,623,125
MASSACHUSETTS--0.3%
Massachusetts State Port Authority
Revenue Taxable Series C 6.05%, 7/1/02............ AA- 1,575 1,584,844
Massachusetts State Water Resources Authority
Revenue Series D 5%, 8/1/24....................... AAA 1,320 1,277,100
-------------
2,861,944
-------------
NEW YORK--1.7%
Long Island Power Authority Electrical Systems
Revenue Series A 5.50%, 12/1/10................... AAA 1,850 2,014,188
Metropolitan Transportation Authority Series A 5%,
4/1/23............................................ AAA 5,500 5,396,875
New York State General Obligation Taxable Series C
6.40%, 3/1/08..................................... AAA 7,460 7,478,650
-------------
14,889,713
-------------
PENNSYLVANIA--1.1%
Philadelphia Authority For Industrial Development
Pension Funding Retirement Systems Revenue Taxable
Series A 5.69%, 4/15/07........................... AAA 3,000 2,880,000
Philadelphia Authority For Industrial Development
Pension Funding Retirement Systems Revenue Taxable
Series A 5.79%, 4/15/09........................... AAA 3,020 2,884,100
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
PENNSYLVANIA--CONTINUED
Pittsburgh Pension Obligation Taxable Series C
6.50%, 3/1/17..................................... AAA $ 4,250 $ 4,143,750
-------------
9,907,850
-------------
TEXAS--1.3%
Dallas-Fort Worth International Airport Revenue
Taxable 6.40%, 11/1/06............................ AAA 4,415 4,437,075
Dallas-Fort Worth International Airport Revenue
Taxable 6.40%, 11/1/07............................ AAA 1,200 1,204,500
Houston Water & Sewer System Revenue Refunding,
Jr. Lien, Series D 5%, 12/1/25.................... AAA 2,560 2,476,800
Texas Taxable Veterans Limited Series B 6.05%,
12/1/02........................................... AA 3,000 3,026,250
-------------
11,144,625
-------------
- -----------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $82,760,728) 83,575,781
- -----------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.0%
Associates Manufactured Housing Pass Through 97-2,
A6 7.075%, 3/15/28................................ AAA 1,500 1,514,766
Capita Equipment Receivables Trust 97-1, B 6.45%,
8/15/02........................................... A+ 3,500 3,509,380
Discover Card Master Trust I 98-6, A 5.85%,
1/17/06........................................... AAA 1,250 1,249,887
Fleetwood Credit Corp. Grantor Trust 96-B, A
6.90%, 3/15/12.................................... AAA 1,227 1,236,480
Ford Credit Auto Owner Trust 98-C, B 6.06%,
2/15/03........................................... A 4,000 3,986,760
Green Tree Financial Corp. 96-2, M1 7.60%,
4/15/27........................................... AA- 3,325 3,456,090
Premier Auto Trust 98-3, B 6.14%, 9/8/04.......... A+ 2,500 2,531,421
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
Triangle Funding Ltd. 98-2A, 3 144A 6.85%,
10/15/04(b)(d).................................... BBB $ 6,000 $ 5,973,750
Wachovia Credit Card Master Trust 99-1, A 5.081%,
8/15/06(d)........................................ AAA 2,500 2,499,219
- -----------------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $25,858,591) 25,957,753
- -----------------------------------------------------------------------------------------
CORPORATE BONDS--7.5%
BANKS (MAJOR REGIONAL)--0.4%
U.S. Bank of Minnesota N.A. 6.30%, 7/15/08........ A 1,500 1,485,000
Wachovia Corp. 5.625%, 12/15/08................... A+ 2,500 2,365,625
-------------
3,850,625
-------------
BROADCASTING (TELEVISION, RADIO & CABLE)--0.7%
CSC Holdings, Inc. 7.625%, 7/15/18................ BB+ 3,000 3,018,750
Turner Broadcasting System, Inc. 8.375%, 7/1/13... BBB 3,000 3,431,250
-------------
6,450,000
-------------
COMMUNICATIONS EQUIPMENT--0.3%
Metromedia Fiber Network, Inc. 144A 10%,
11/15/08(b)....................................... B 2,000 2,170,000
COMPUTERS (SOFTWARE & SERVICES)--0.3%
Computer Associates International, Inc. Series B
6.375%, 4/15/05................................... A- 2,350 2,282,437
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--0.7%
Harrahs Operating Co., Inc. 7.875%, 12/15/05...... BB+ 3,000 3,037,500
Station Casinos, Inc. 8.875%, 12/1/08............. B+ 2,630 2,728,625
-------------
5,766,125
-------------
HEALTH CARE (HOSPITAL MANAGEMENT)--0.6%
Tenet Healthcare Corp. 8%, 1/15/05................ BB+ 5,000 4,975,000
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.4%
Boston Scientific Corp. 6.625%, 3/15/05........... BBB 3,925 3,831,781
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
LEISURE TIME (PRODUCTS)--0.3%
Bally Total Fitness Holding Corp. Series B 9.875%,
10/15/07.......................................... B- $ 2,500 $ 2,565,625
MANUFACTURING (DIVERSIFIED)--0.6%
Tyco International Group SA 6.375%, 6/15/05....... A- 4,800 4,830,000
METALS MINING--0.3%
Level 3 Communications, Inc. 9.125%, 5/1/08....... B 2,565 2,622,712
PAPER & FOREST PRODUCTS--0.6%
Buckeye Technologies, Inc. 8.50%, 12/15/05........ BB- 5,000 5,156,250
PERSONAL CARE--0.3%
Revlon Consumer Products Corp. 9%, 11/1/06........ B 2,700 2,760,750
PUBLISHING--0.1%
Charter Communications Holdings LLC 144A 8.625%,
4/1/09(b)......................................... B+ 900 924,750
REITS--0.3%
Meditrust Corp. 7.375%, 7/15/00................... BB 3,000 2,928,319
SERVICES (RENTALS)--0.3%
Budget Group, Inc. 144A 9.125%, 4/1/06(b)......... BB- 2,500 2,493,750
TELEPHONE--0.3%
Century Telephone Enterprises, Inc. Series F
6.30%, 1/15/08.................................... BBB+ 2,500 2,468,750
TEXTILES (APPAREL)--0.3%
Collins & Aikman Corp. 11.50%, 4/15/06............ B 2,500 2,681,250
TRUCKS & PARTS--0.1%
Cummins Engine Co., Inc. 6.45%, 3/1/05............ BBB+ 1,250 1,220,313
WASTE MANAGEMENT--0.6%
Allied Waste North America, Inc. Series B 7.875%,
1/1/09............................................ BB 5,425 5,330,063
- -----------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $65,228,364) 65,308,500
- -----------------------------------------------------------------------------------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
NON-AGENCY MORTGAGE-BACKED
SECURITIES--14.9%
CS First Boston Mortgage Securities Corp. 97-C2,
A3 6.55%, 11/17/07................................ AAA $ 10,000 $ 10,012,500
CS First Boston Mortgage Securities Corp. 97-C2, B
6.72%, 11/17/07................................... Aa(c) 11,000 11,020,625
CS First Boston Mortgage Securities Corp. 97-SPCE,
D 144A 7.332%, 4/20/08(b)......................... BBB(c) 7,539 7,369,372
DLJ Commercial Mortgage Corp. 99-CG1, A1B 6.46%,
1/10/09........................................... Aaa(c) 2,000 2,005,000
DLJ Mortgage Acceptance Corp. 96-CF1, A1B 144A
7.58%, 2/12/06 (b)................................ AAA 4,400 4,574,625
DLJ Mortgage Acceptance Corp. 97-CF2, B2 144A
7.14%, 11/15/08(b)................................ BBB- 5,000 4,596,875
First Union Commercial Mortgage Trust 99-C1, A2
6.07%, 10/15/08................................... AAA 1,800 1,752,750
First Union-Lehman Brothers Commercial Mortgage
97-C1, B 7.43%, 4/18/07........................... Aa(c) 2,500 2,633,076
G.E. Capital Mortgage Services, Inc. 94-9, M
6.50%, 2/25/24.................................... AA 11,056 10,853,713
G.E. Capital Mortgage Services, Inc. 96-4, A5 7%,
3/25/26........................................... AAA 8,701 8,831,939
G.E. Capital Mortgage Services, Inc. 96-8, 1M
7.25%, 5/25/26.................................... AA 484 493,559
GMAC Commercial Mortgage Securities, Inc. 97-C2, B
6.703%, 12/15/07.................................. Aa(c) 7,000 6,979,070
Lehman Brothers Commercial Conduit Mortgage Trust
98-C1, A3 6.48%, 1/18/08.......................... Aaa(c) 5,000 5,043,750
Lehman Brothers Commercial Conduit Mortgage Trust
98-C4, A1B 6.21%, 10/15/08........................ AAA 5,000 4,945,286
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
Lehman Large Loan 97-LLI, B 6.95%, 3/12/07........ AA $ 4,340 $ 4,457,716
Nationslink Funding Corp. 96-1, B 7.69%,
12/20/05.......................................... AA 1,500 1,579,219
Norwest Asset Securities Corp. 99-13, B1 6.75%,
4/25/29........................................... AA(c) 9,202 9,046,716
Prudential Home Mortgage Securities 94-15, M
6.80%, 5/25/24.................................... Aaa(c) 8,234 8,186,378
Residential Asset Securitization Trust 96-A8, A1
8%, 12/25/26...................................... AAA 136 135,505
Residential Funding Mortgage Securities I 96-S1,
A11 7.10%, 1/25/26................................ AAA 2,800 2,843,750
Residential Funding Mortgage Securities I 96-S4,
M1 7.25%, 2/25/26................................. AA 3,852 3,867,717
Residential Funding Mortgage Securities I 98-S13,
M1 6.75%, 6/25/28................................. AA(c) 4,766 4,718,700
Securitized Asset Sales, Inc. 93-J, 2B 6.808%,
11/28/23.......................................... AA(c) 9,731 9,629,338
Structured Asset Securities Corp. 95-C4, B 7%,
6/25/26........................................... AA 5,198 5,208,721
- -----------------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $130,347,812) 130,785,900
- -----------------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--9.5%
ARGENTINA--1.0%
Republic of Argentina Bearer FRB 5.938%,
3/31/05(d)........................................ BB 4,152 3,695,680
Republic of Argentina 12.125%, 2/25/19............ BB 4,963 5,180,131
-------------
8,875,811
-------------
BULGARIA--0.8%
Republic of Bulgaria IAB Series PDI Euro 5.875%,
7/28/11(d)........................................ B(c) 5,000 3,390,625
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
BULGARIA--CONTINUED
Republic of Bulgaria FLIRB Series A Bearer 2.50%,
7/28/12(d)........................................ B(c) $ 6,105 $ 3,720,234
-------------
7,110,859
-------------
COLOMBIA--0.9%
Republic of Colombia 7.625%, 2/15/07.............. BBB- 9,000 7,875,000
COSTA RICA--0.5%
Republic of Costa Rica 144A 9.335%,
5/15/09(b)(f)..................................... BB 4,685 4,641,336
CROATIA--0.7%
Croatia Series B 5.813%, 7/31/06(d)............... BBB- 3,540 2,903,161
Croatia Series A 5.813%, 7/31/10(d)............... BBB- 4,300 3,364,750
-------------
6,267,911
-------------
KOREA--0.8%
Republic of Korea 8.875%, 4/15/08................. BBB- 6,420 6,993,788
MEXICO--1.5%
United Mexican States Global Bond 11.50%,
5/15/26........................................... BB 11,000 13,076,250
PANAMA--1.4%
Republic of Panama 8.875%, 9/30/27................ BB+ 11,315 10,740,764
Republic of Panama 9.375%, 4/1/29................. BB+ 1,350 1,391,175
-------------
12,131,939
-------------
PHILIPPINES--0.8%
Republic of Philippines 8.875%, 4/15/08........... BB+ 3,900 3,987,750
Republic of Philippines 9.875% 1/15/19............ BB+ 2,750 2,853,125
-------------
6,840,875
-------------
POLAND--1.1%
Poland Bearer PDI 5%, 10/27/14(d)................. BBB- 4,225 3,916,047
Poland Registered PDI 5%, 10/27/14(d)............. BBB- 6,100 5,653,938
-------------
9,569,985
-------------
- -----------------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $82,403,767) 83,383,754
- -----------------------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
FOREIGN CORPORATE BONDS--1.5%
ARGENTINA--0.4%
Compania de Radiocomunicaciones Moviles SA 144A
9.25%, 5/8/08(b).................................. BBB- $ 1,500 $ 1,447,500
Compania de Radiocomunicaciones Moviles SA 9.25%,
5/8/08............................................ BBB- 1,300 1,254,500
Telefonica de Argentina 144A 9.125%, 5/7/08(b).... BBB- 725 701,438
-------------
3,403,438
-------------
CHILE--0.3%
Compania Sud Americana de Vapores SA 7.375%,
12/8/03........................................... BBB 610 579,500
Petropower I Funding Trust 144A 7.36%,
2/15/14(b)........................................ BBB 2,349 2,184,439
-------------
2,763,939
-------------
JAPAN--0.5%
SB Treasury Co. LLC Series A 144A 9.40%,
12/29/49(b)....................................... BB+ 4,880 4,894,986
POLAND--0.3%
TPSA Finance BV 144A 7.75%, 12/10/08(b)........... BBB- 2,410 2,434,100
- -----------------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $13,775,867) 13,496,463
- -----------------------------------------------------------------------------------------
CONVERTIBLE BONDS--9.0%
BROADCASTING (TELEVISION, RADIO & CABLE)--0.3%
Clear Channel Communications, Inc. Cv. 2.625%,
4/1/03............................................ BBB- 2,100 2,656,500
COMPUTERS (HARDWARE)--0.7%
Hewlett-Packard Co. Cv. 0%, 10/14/17.............. AA 11,000 6,407,500
ELECTRONICS (SEMICONDUCTORS)--0.2%
National Semiconductor Cv. 144A 6.50%,
10/1/02(b)........................................ Ba(c) 1,950 1,657,500
INSURANCE (PROPERTY-CASUALTY)--0.9%
Berkshire Hathaway, Inc. Cv. 1%, 12/2/01.......... Aaa(c) 3,475 7,627,625
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
LODGING-HOTELS--0.5%
Hilton Hotels Corp. Cv. 5%, 5/15/06............... BBB- $ 4,500 $ 4,365,000
MANUFACTURING (DIVERSIFIED)--0.5%
Thermo Electron Corp. Cv. 144A 4.25%, 1/1/03(b)... A- 5,200 4,582,500
OIL & GAS (DRILLING & EQUIPMENT)--1.2%
Baker Hughes, Inc. Cv. 0%, 5/5/08................. A 2,100 1,554,000
Diamond Offshore Drilling, Inc. Cv. 3.75%,
2/15/07........................................... A- 4,950 5,321,250
Nabors Industries, Inc. Cv. 5%, 5/15/06........... BBB 3,005 3,542,144
-------------
10,417,394
-------------
PUBLISHING (NEWSPAPERS)--0.2%
Times Mirror Co. Cv. 144A 0%, 4/15/17(b).......... A 3,500 1,649,375
RETAIL (BUILDING SUPPLIES)--0.4%
Home Depot, Inc. (The) Cv. 3.25%, 10/1/01......... A+ 1,250 3,154,687
RETAIL (DRUG STORES)--0.6%
Rite Aid Corp. Cv. 144A 5.25%, 9/15/02(b)......... BBB 5,175 5,226,750
RETAIL (SPECIALTY)--0.8%
Office Depot, Inc. Cv. 0%, 11/1/08................ BBB- 3,350 2,793,062
Pep Boys - Manny, Moe & Jack (The) Cv. 0%,
9/20/11........................................... BB+ 7,775 4,091,594
-------------
6,884,656
-------------
SERVICES (ADVERTISING/MARKETING)--1.0%
Interpublic Group (The) Cv. 144A 1.80%,
9/16/04(b)........................................ NR 2,500 2,812,500
Omnicom Group, Inc. Cv. 144A 2.25%, 1/6/13(b)..... A- 4,000 6,375,000
-------------
9,187,500
-------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.3%
United States Cellular Corp. Cv. 0%, 6/15/15...... BBB- 6,000 2,902,500
TELEPHONE--0.4%
Bell Atlantic Financial Services Cv. 144A 4.25%,
9/15/05(b)........................................ A+ 3,250 3,566,875
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- -------- -------------
<S> <C> <C> <C>
WASTE MANAGEMENT--1.0%
Waste Management, Inc. Cv. 4%, 2/1/02............. BBB $ 2,650 $ 3,620,563
Waste Management, Inc. Cv. 2%, 1/24/05............ BBB 4,710 5,275,200
-------------
8,895,763
-------------
- -----------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS
(IDENTIFIED COST $72,582,086) 79,182,125
- -----------------------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--1.0%
SWITZERLAND--1.0%
Novartis AG Cv. 144A 2%, 10/6/02(b)............... Aaa(c) 1,330 1,895,250
Novartis AG Cv. 2%, 10/6/02....................... Aaa(c) 1,500 2,137,500
Roche Holdings, Inc. Cv. 144A 0%, 5/6/12(b)....... NR 7,800 4,241,250
- -----------------------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $7,542,531) 8,274,000
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------
<S> <C> <C> <C>
COMMON STOCKS--35.1%
AEROSPACE/DEFENSE--0.2%
Cordant Technologies, Inc......................... 4,300 198,337
General Dynamics Corp............................. 20,000 1,405,000
-------------
1,603,337
-------------
AGRICULTURAL PRODUCTS--0.0%
Fresh Del Monte Produce, Inc.(e).................. 8,800 138,600
AIRLINES--0.0%
COMAIR Holdings, Inc.............................. 6,900 152,231
AUTOMOBILES--1.1%
Ford Motor Co..................................... 140,200 8,964,037
General Motors Corp............................... 9,300 827,119
-------------
9,791,156
-------------
BANKS (MAJOR REGIONAL)--1.5%
Bank One Corp..................................... 117,200 6,914,800
First Union Corp.................................. 22,500 1,245,937
Fleet Financial Group, Inc........................ 19,600 844,025
Mellon Bank Corp.................................. 7,400 549,912
Wells Fargo Co.................................... 78,000 3,368,625
-------------
12,923,299
-------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES
---------
BANKS (MONEY CENTER)--1.3%
<S> <C> <C> <C>
Bank of America Corp.............................. 31,100 $ 2,239,200
Chase Manhattan Corp. (The)....................... 107,400 8,887,350
-------------
11,126,550
-------------
BANKS (REGIONAL)--0.3%
City National Corp................................ 23,300 899,962
UnionBanCal Corp.................................. 55,500 1,893,937
-------------
2,793,899
-------------
BEVERAGES (ALCOHOLIC)--0.2%
Anheuser-Busch Companies, Inc..................... 29,700 2,171,813
BIOTECHNOLOGY--0.2%
Amgen, Inc.(e).................................... 29,600 1,818,550
BROADCASTING (TELEVISION, RADIO & CABLE)--0.1%
Chris-Craft Industries, Inc.(e)................... 11,124 522,828
BUILDING MATERIALS--0.0%
Owens Corning..................................... 5,300 188,812
CHEMICALS (DIVERSIFIED)--0.2%
Goodrich (B.F.) Co. (The)......................... 38,600 1,534,350
COMMUNICATIONS EQUIPMENT--1.1%
Comverse Technology, Inc.(e)...................... 11,400 731,025
Lucent Technologies, Inc.......................... 124,000 7,455,500
QUALCOMM, Inc.(e)................................. 1,700 340,000
Tellabs, Inc.(e).................................. 7,000 766,937
-------------
9,293,462
-------------
COMPUTERS (HARDWARE)--2.1%
Apple Computer, Inc.(e)........................... 29,800 1,370,800
Compaq Computer Corp.............................. 77,400 1,726,987
Dell Computer Corp.(e)............................ 60,600 2,495,962
Electronics for Imaging, Inc.(e).................. 2,500 118,281
Gateway 2000, Inc.(e)............................. 10,700 708,206
Hewlett-Packard Co................................ 41,300 3,257,537
International Business Machines Corp.............. 35,100 7,342,481
NCR Corp.(e)...................................... 12,800 524,800
Sun Microsystems, Inc.(e)......................... 16,800 1,004,850
-------------
18,549,904
-------------
COMPUTERS (NETWORKING)--0.5%
3Com Corp.(e)..................................... 12,900 337,012
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
COMPUTERS (NETWORKING)--CONTINUED
Cisco Systems, Inc.(e)............................ 34,500 $ 3,935,156
-------------
4,272,168
-------------
COMPUTERS (PERIPHERALS)--0.3%
EMC Corp.(e)...................................... 23,500 2,560,031
Seagate Technology, Inc.(e)....................... 17,400 485,025
-------------
3,045,056
-------------
COMPUTERS (SOFTWARE & SERVICES)--2.6%
America Online, Inc.(e)........................... 26,200 3,740,050
BMC Software, Inc.(e)............................. 3,600 155,025
Computer Associates International, Inc............ 26,900 1,148,294
Computer Sciences Corp.(e)........................ 9,200 547,975
Compuware Corp.(e)................................ 12,600 307,125
Microsoft Corp.(e)................................ 159,600 12,977,475
Oracle Corp.(e)................................... 44,100 1,193,456
Sterling Software, Inc.(e)........................ 22,500 465,469
Synopsys, Inc.(e)................................. 11,500 541,937
Unisys Corp.(e)................................... 49,600 1,559,300
-------------
22,636,106
-------------
CONSTRUCTION (CEMENT & AGGREGATES)--0.2%
Centex Construction Products, Inc................. 600 21,225
Lafarge Corp...................................... 11,000 371,937
Vulcan Materials Co............................... 25,300 1,208,075
-------------
1,601,237
-------------
CONSUMER FINANCE--0.1%
Countrywide Credit Industries, Inc................ 16,900 765,781
DISTRIBUTORS (FOOD & HEALTH)--0.1%
AmeriSource Health Corp. Class A(e)............... 2,400 66,450
Bergen Brunswig Corp. Class A..................... 4,500 85,500
McKesson HBOC, Inc................................ 13,500 472,500
-------------
624,450
-------------
ELECTRIC COMPANIES--2.3%
Central & South West Corp......................... 88,600 2,198,387
Consolidated Edison, Inc.......................... 45,000 2,044,687
DTE Energy Co..................................... 73,300 2,991,556
Dominion Resources, Inc........................... 28,900 1,188,512
Duke Energy Corp.................................. 13,000 728,000
FPL Group, Inc.................................... 8,800 496,100
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
ELECTRIC COMPANIES--CONTINUED
LG&E Energy Corp.................................. 69,400 $ 1,513,787
Minnesota Power, Inc.............................. 112,000 2,359,000
Texas Utilities Co................................ 27,500 1,093,125
UtiliCorp United, Inc............................. 217,400 5,312,712
-------------
19,925,866
-------------
ELECTRICAL EQUIPMENT--0.8%
General Electric Co............................... 53,300 5,623,150
Rockwell International Corp....................... 30,000 1,548,750
-------------
7,171,900
-------------
ELECTRONICS (INSTRUMENTATION)--0.1%
EG&G, Inc......................................... 23,100 721,875
ELECTRONICS (SEMICONDUCTORS)--1.1%
Intel Corp........................................ 151,400 9,263,787
Texas Instruments, Inc............................ 1,400 142,975
Vitesse Semiconductor Corp.(e).................... 9,300 430,706
-------------
9,837,468
-------------
ENGINEERING & CONSTRUCTION--0.0%
McDermott International, Inc...................... 7,800 226,200
ENTERTAINMENT--0.3%
Time Warner, Inc.................................. 18,800 1,316,000
Viacom, Inc. Class B(e)........................... 25,400 1,038,225
-------------
2,354,225
-------------
FINANCIAL (DIVERSIFIED)--2.1%
Citigroup, Inc.................................... 59,100 4,447,275
Doral Financial Corp.............................. 30,300 534,037
Fannie Mae........................................ 104,100 7,384,594
Morgan Stanley Dean Witter & Co................... 57,800 5,733,038
-------------
18,098,944
-------------
FOODS--0.7%
Earthgrains Co. (The)............................. 31,100 658,931
General Mills, Inc................................ 15,100 1,104,188
Quaker Oats Co. (The)............................. 61,900 3,996,419
-------------
5,759,538
-------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--0.0%
International Game Technology..................... 10,500 186,375
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
GOLD & PRECIOUS METALS MINING--0.0%
Placer Dome, Inc.................................. 27,500 $ 388,438
HEALTH CARE (DIVERSIFIED)--0.7%
Allergan, Inc..................................... 7,700 692,038
Bristol-Myers Squibb Co........................... 21,200 1,347,525
Warner-Lambert Co................................. 59,000 4,008,313
-------------
6,047,876
-------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--2.1%
Genentech, Inc.(e)................................ 24,700 2,090,238
Lilly (Eli) & Co.................................. 36,700 2,702,038
Medicis Pharmaceutical Corp. Class A(e)........... 5,300 128,856
Merck & Co., Inc.................................. 68,600 4,819,150
Pfizer, Inc....................................... 40,700 4,683,044
Pharmacia & Upjohn, Inc........................... 25,300 1,416,800
Roberts Pharmaceutical Corp.(e)................... 15,100 256,700
Schering-Plough Corp.............................. 55,800 2,695,838
-------------
18,792,664
-------------
HEALTH CARE (GENERIC AND OTHER)--0.0%
Barr Laboratories, Inc.(e)........................ 2,400 72,150
Mylan Laboratories, Inc........................... 11,000 249,563
-------------
321,713
-------------
HEALTH CARE (MANAGED CARE)--0.3%
Aetna, Inc........................................ 4,000 350,750
Humana, Inc.(e)................................... 9,400 128,075
PacifiCare Health Systems, Inc. Class B(e)........ 17,000 1,356,281
Trigon Healthcare, Inc.(e)........................ 11,300 358,775
Wellpoint Health Networks, Inc.(e)................ 10,400 730,600
-------------
2,924,481
-------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--0.1%
Baxter International, Inc......................... 12,000 756,000
HEALTH CARE (SPECIALIZED SERVICES)--0.0%
Omnicare, Inc..................................... 15,200 365,750
HOMEBUILDING--0.1%
Centex Corp....................................... 9,900 361,969
Fleetwood Enterprises, Inc........................ 11,700 288,844
Kaufman and Broad Home Corp....................... 2,900 70,506
Lennar Corp....................................... 10,700 258,806
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Phoenix Income and Growth Fund
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
HOMEBUILDING--CONTINUED
Pulte Corp........................................ 4,100 $ 92,763
-------------
1,072,888
-------------
HOUSEHOLD FURNISHINGS & APPLIANCES--0.1%
Maytag Corp....................................... 2,000 136,750
Whirlpool Corp.................................... 11,400 756,675
-------------
893,425
-------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--0.1%
Church & Dwight Co., Inc.......................... 15,300 655,031
HOUSEWARES--0.2%
Tupperware Corp................................... 66,700 1,579,956
INSURANCE (LIFE/HEALTH)--0.4%
Lincoln National Corp............................. 40,300 3,871,319
INSURANCE (MULTI-LINE)--0.2%
American International Group, Inc................. 1,300 152,669
CIGNA Corp........................................ 5,000 435,938
Hartford Financial Services Group, Inc. (The)..... 5,000 294,688
Loews Corp........................................ 6,100 446,444
-------------
1,329,739
-------------
INSURANCE (PROPERTY-CASUALTY)--0.4%
Allstate Corp. (The).............................. 95,800 3,484,725
HCC Insurance Holdings, Inc....................... 3,200 67,600
-------------
3,552,325
-------------
INSURANCE BROKERS--0.6%
Gallagher (Arthur J.) & Co........................ 32,900 1,562,750
Marsh & McLennan Companies, Inc................... 53,100 4,065,469
-------------
5,628,219
-------------
INVESTMENT BANKING/BROKERAGE--0.3%
Lehman Brothers Holdings, Inc..................... 5,000 277,813
Merrill Lynch & Co., Inc.......................... 30,600 2,568,488
-------------
2,846,301
-------------
INVESTMENT MANAGEMENT--0.2%
Equitable Companies, Inc. (The)................... 29,300 1,972,256
IRON & STEEL--0.0%
USX-U. S. Steel Group, Inc........................ 6,600 199,650
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
LEISURE TIME (PRODUCTS)--0.1%
Brunswick Corp.................................... 3,400 $ 81,600
Polaris Industries, Inc........................... 10,800 407,025
-------------
488,625
-------------
MACHINERY (DIVERSIFIED)--0.4%
Ingersoll-Rand Co................................. 37,600 2,601,450
Tecumseh Products Co. Class A..................... 7,800 476,775
-------------
3,078,225
-------------
MANUFACTURING (DIVERSIFIED)--1.5%
Crane Co.......................................... 17,700 512,194
National Service Industries, Inc.................. 3,800 147,963
Pentair, Inc...................................... 10,200 479,400
Premark International, Inc........................ 54,900 2,021,006
Tredegar Industries, Inc.......................... 37,500 1,000,781
Tyco International Ltd............................ 39,200 3,185,000
United Technologies Corp.......................... 37,600 5,447,300
-------------
12,793,644
-------------
MANUFACTURING (SPECIALIZED)--0.1%
Briggs & Stratton Corp............................ 1,700 112,094
Teleflex, Inc..................................... 5,700 248,306
YORK International Corp........................... 13,300 548,625
-------------
909,025
-------------
NATURAL GAS--0.3%
MDU Resources Group, Inc.......................... 15,500 330,344
Sempra Energy..................................... 84,900 1,761,675
Southwest Gas Corp................................ 28,400 811,175
-------------
2,903,194
-------------
OIL & GAS (DRILLING & EQUIPMENT)--0.1%
Halliburton Co.................................... 2,200 93,775
Tidewater, Inc.................................... 4,400 116,600
Transocean Offshore, Inc.......................... 7,500 222,656
-------------
433,031
-------------
OIL & GAS (REFINING & MARKETING)--0.1%
El Paso Energy Corp............................... 6,200 227,850
Ultramar Diamond Shamrock Corp.................... 30,600 705,713
-------------
933,563
-------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
OIL (INTERNATIONAL INTEGRATED)--0.2%
Exxon Corp........................................ 20,800 $ 1,727,700
PAPER & FOREST PRODUCTS--0.0%
Louisiana-Pacific Corp............................ 2,000 41,625
PHOTOGRAPHY/IMAGING--0.3%
Eastman Kodak Co.................................. 37,300 2,783,513
RAILROADS--0.1%
Union Pacific Corp................................ 7,600 456,000
RETAIL (BUILDING SUPPLIES)--0.4%
Home Depot, Inc. (The)............................ 41,500 2,487,406
Lowe's Companies, Inc............................. 25,500 1,345,125
-------------
3,832,531
-------------
RETAIL (COMPUTERS & ELECTRONICS)--0.1%
Best Buy Co., Inc.(e)............................. 9,800 467,950
RETAIL (DISCOUNTERS)--0.1%
Ross Stores, Inc.................................. 15,000 689,063
RETAIL (FOOD CHAINS)--0.1%
Federated Department Stores, Inc.(e).............. 15,400 718,988
RETAIL (GENERAL MERCHANDISE)--1.1%
Dayton Hudson Corp................................ 26,000 1,750,125
Kmart Corp.(e).................................... 30,200 449,225
Wal-Mart Stores, Inc.............................. 164,000 7,544,000
-------------
9,743,350
-------------
RETAIL (SPECIALTY)--0.1%
Office Depot, Inc.(e)............................. 8,300 182,600
Zale Corp.(e)..................................... 11,200 423,500
-------------
606,100
-------------
RETAIL (SPECIALTY-APPAREL)--0.1%
Gap, Inc. (The)................................... 8,100 539,156
TJX Companies, Inc. (The)......................... 23,000 766,188
-------------
1,305,344
-------------
SERVICES (ADVERTISING/MARKETING)--0.3%
Omnicom Group, Inc................................ 38,700 2,805,750
Snyder Communications, Inc.(e).................... 4,200 123,375
-------------
2,929,125
-------------
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)--0.4%
Cendant Corp.(e).................................. 20,900 $ 376,200
Hertz Corp. (The) Class A......................... 7,100 423,781
Metzler Group, Inc. (The)(e)...................... 2,500 69,688
Ogden Corp........................................ 22,500 580,781
Viad Corp......................................... 54,500 1,801,906
-------------
3,252,356
-------------
SERVICES (DATA PROCESSING)--0.0%
Concord EFS, Inc.(e).............................. 1,500 50,063
NOVA Corp.(e)..................................... 2,700 70,200
-------------
120,263
-------------
SERVICES (EMPLOYMENT)--0.0%
Interim Services, Inc.(e)......................... 4,300 74,713
SPECIALTY PRINTING--0.3%
Deluxe Corp....................................... 81,300 2,815,013
TELECOMMUNICATIONS (LONG DISTANCE)--1.0%
AT&T Corp......................................... 157,050 7,931,025
MCI WorldCom, Inc.(e)............................. 6,400 526,000
-------------
8,457,025
-------------
TELEPHONE--1.9%
Ameritech Corp.................................... 32,400 2,217,375
Bell Atlantic Corp................................ 6,000 345,750
BellSouth Corp.................................... 152,400 6,819,900
GTE Corp.......................................... 34,400 2,302,650
SBC Communications, Inc........................... 50,800 2,844,800
U S WEST, Inc..................................... 44,700 2,338,369
-------------
16,868,844
-------------
TEXTILES (APPAREL)--0.2%
Jones Apparel Group, Inc.(e)...................... 7,200 237,600
Tommy Hilfiger Corp.(e)........................... 3,100 216,613
V. F. Corp........................................ 27,000 1,390,500
-------------
1,844,713
-------------
TOBACCO--0.5%
Philip Morris Companies, Inc...................... 119,800 4,200,488
</TABLE>
See Notes to Financial Statements 15
<PAGE>
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------
<S> <C> <C> <C>
TRUCKS & PARTS--0.0%
PACCAR, Inc....................................... 6,100 $ 341,600
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $232,492,839) 307,849,622
- ----------------------------------------------------------------------------------------
FOREIGN COMMON STOCKS--0.5%
COMMUNICATIONS EQUIPMENT--0.2%
Nortel Networks Corp. (Canada).................... 23,200 1,581,950
OIL (DOMESTIC INTEGRATED)--0.3%
Royal Dutch Petroleum Co. NY Registered Shares
(Netherlands)..................................... 46,700 2,740,706
- ----------------------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $3,605,871) 4,322,656
- ----------------------------------------------------------------------------------------
WARRANTS--0.0%
Republic of Argentina Warrants(e)................. 3,713 12,160
- ----------------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 12,160
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $792,111,403) 878,141,220(a)
Cash and receivables, less liabilities--(0.2%) (2,082,300)
--------------
NET ASSETS--100.0% $ 876,058,920
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $102,574,014 and gross
depreciation of $16,599,448 for federal income tax purposes. At April 30,
1999, the aggregate cost of securities for federal income tax purposes was
$792,166,654.
(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,
1999, these securities amounted to a value of $76,413,921 or 8.7% 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.
(f) When issued.
(g) All or a portion segregated as collateral.
16
See Notes to Financial Statements
<PAGE>
Phoenix Income and Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value (Identified cost
$792,111,403) $ 878,141,220
Receivables
Dividends and interest 7,136,809
Investment securities sold 5,519,961
Fund shares sold 156,703
Prepaid expenses 21,006
--------------
Total assets 890,975,699
--------------
LIABILITIES
Payables
Custodian 2,243,494
Investment securities purchased 9,234,375
Fund shares repurchased 1,564,555
Distribution fee 856,748
Investment advisory fee 509,182
Transfer agent fee 234,796
Financial agent fee 30,307
Trustees' fee 4,514
Accrued expenses 238,808
--------------
Total liabilities 14,916,779
--------------
NET ASSETS $ 876,058,920
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 792,487,957
Undistributed net investment income 734,403
Accumulated net realized loss (3,193,257)
Net unrealized appreciation 86,029,817
--------------
NET ASSETS $ 876,058,920
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization (Net Assets $565,275,700) 58,384,411
Net asset value per share $9.68
Offering price per share $9.68/(1-4.75%) $10.16
CLASS B
Shares of beneficial interest outstanding, $0.0001 par
value, unlimited authorization (Net Assets $310,783,220) 32,075,889
Net asset value and offering price per share $9.69
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 34,807,538
Dividends 5,904,477
Foreign taxes withheld (3,299)
--------------
Total investment income 40,708,716
--------------
EXPENSES
Investment advisory fee 5,907,808
Distribution fee, Class A 1,285,251
Distribution fee, Class B 3,298,720
Financial agent fee 368,649
Transfer agent 1,125,098
Printing 139,272
Registration 82,199
Custodian 71,519
Professional 39,613
Trustees 11,957
Miscellaneous 28,411
--------------
Total expenses 12,358,497
Custodian fees paid indirectly (7,467)
--------------
Net expenses 12,351,030
--------------
NET INVESTMENT INCOME 28,357,686
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 7,074,081
--------------
Net change in unrealized appreciation (depreciation) on
investments 21,127,797
Less unrealized depreciation in connection with Phoenix
Convertible Fund merger (5,042,696)
--------------
Net change in unrealized appreciation (depreciation) 26,170,493
--------------
NET GAIN ON INVESTMENTS 33,244,574
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 61,602,260
--------------
--------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix Income and Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
4/30/99 4/30/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 28,357,686 $ 27,467,229
Net realized gain (loss) 7,074,081 131,616,037
Net change in unrealized appreciation
(depreciation) 26,170,493 4,573,207
------------- -------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 61,602,260 163,656,473
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (19,397,606) (17,182,669)
Net investment income, Class B (10,518,250) (10,988,112)
Net realized gains, Class A (43,303,686) (54,265,543)
Net realized gains, Class B (24,388,234) (43,432,965)
In excess of net realized gains, Class A (1,947,627) --
In excess of net realized gains, Class B (1,096,886) --
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (100,652,289) (125,869,289)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (4,894,329 and
2,818,975 shares, respectively) 49,000,837 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
(5,607,651 and 6,091,273 shares, respectively) 52,935,795 58,628,750
Cost of shares repurchased (13,333,886 and
9,627,226, respectively) (131,232,769) (99,772,724)
------------- -------------
Total 127,319,028 (12,033,425)
------------- -------------
CLASS B
Proceeds from sales of shares (1,583,031 and
2,189,770 shares, respectively) 15,437,928 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
(3,039,308 and 4,402,084 shares, respectively) 28,805,790 42,377,821
Cost of shares repurchased (8,694,838 and
8,764,802, respectively) (85,529,726) (90,886,654)
------------- -------------
Total (34,078,058) (26,253,269)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS 93,240,970 (38,286,694)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 54,190,941 (499,510)
NET ASSETS
Beginning of period 821,867,979 822,367,489
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME OF
$734,403 AND $2,057,869, RESPECTIVELY] $ 876,058,920 $ 821,867,979
------------- -------------
------------- -------------
</TABLE>
18 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,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.20 $ 9.86 $ 10.08 $ 8.88 $ 9.33
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.36 0.38 0.40 0.44 0.46
Net realized and unrealized gain
(loss) 0.29 1.63 0.66 1.22 0.03
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.65 2.01 1.06 1.66 0.49
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income (0.38) (0.39) (0.40) (0.42) (0.45)
Dividends from net realized gains (0.76) (1.28) (0.88) (0.04) (0.33)
In excess of net realized gains (0.03) -- -- -- (0.16)
---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS (1.17) (1.67) (1.28) (0.46) (0.94)
---------- ---------- ---------- ---------- ----------
Change in net asset value (0.52) 0.34 (0.22) 1.20 (0.45)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 9.68 $ 10.20 $ 9.86 $ 10.08 $ 8.88
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total return(1) 6.97% 21.87% 10.93% 19.01% 5.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $565,276 $459,992 $451,439 $493,454 $490,225
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.17%(2) 1.13% 1.18% 1.18% 1.16%
Net investment income 3.64% 3.61% 3.82% 4.39% 5.07%
Portfolio turnover 68% 155% 111% 107% 90%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
YEAR ENDED APRIL 30,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.22 $ 9.87 $ 10.09 $ 8.88 $ 9.32
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.29 0.30 0.31 0.36 0.39
Net realized and unrealized gain
(loss) 0.29 1.64 0.67 1.23 0.04
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.58 1.94 0.98 1.59 0.43
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from net investment income (0.32) (0.31) (0.32) (0.34) (0.38)
Dividends from net realized gains (0.76) (1.28) (0.88) (0.04) (0.33)
In excess of net realized gains (0.03) -- -- -- (0.16)
---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS (1.11) (1.59) (1.20) (0.38) (0.87)
---------- ---------- ---------- ---------- ----------
Change in net asset value (0.53) 0.35 (0.22) 1.21 (0.44)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 9.69 $ 10.22 $ 9.87 $ 10.09 $ 8.88
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total return(1) 6.18% 21.03% 10.05% 18.14% 5.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $310,783 $361,876 $370,929 $396,169 $386,515
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.92%(2) 1.88% 1.93% 1.93% 1.91%
Net investment income 2.92% 2.86% 3.06% 3.64% 4.32%
Portfolio turnover 68% 155% 111% 107% 90%
</TABLE>
(1) Maximum sales charge is not reflected in the total return calculation.
(2) For the year ended April 30, 1999, the ratio of operating expenses to
average net assets excludes the effects of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
See Notes to Financial Statements
19
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
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.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
G. SECURITY LENDING:
The Fund loans securities to qualified brokers through an agreement with State
Street Bank & Trust (the Custodian). Under the terms of the agreement, the Fund
receives collateral with a market value not less than 100% of the market value
of loaned securities. Collateral is adjusted daily in connection with changes in
the market value of securities on loan. Collateral consists of cash, securities
issued or guaranteed by the U.S. Government or its agencies and the sovereign
debt of foreign countries. Interest earned on the collateral and premiums paid
by the borrower are recorded as income by the Fund net of fees charged by the
Custodian for its services in connection with this securities lending program.
Lending portfolio securities involves a risk of delay in the recovery of the
loaned securities or in the foreclosure on collateral.
20
<PAGE>
PHOENIX INCOME AND GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (CONTINUED)
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 $38,121 for Class A shares and deferred
sales charges of $414,587 for Class B shares for the year ended April 30, 1999.
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 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, 1999,
$2,875,843 was earned by the Distributor, $1,618,072 was paid to unaffiliated
participants and $90,056 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 year ended April 30, 1999, transfer agent
fees were $1,125,098 of which PEPCO retained $421,918 which is net of fees paid
to State Street.
At April 30, 1999, PHL and affiliates held 159 Class A shares and 22 Class B
shares of the Fund with a combined value of $1,754.
3. PURCHASE AND SALE OF SECURITIES
During the year ended April 30, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $446,322,867 and $539,094,662, respectively. Purchases and sales of
long-term U.S. Government and agency securities amounted to $114,799,029 and
$141,428,881, 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. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
6. CAPITAL LOSS CARRYOVERS
Under current tax law, currency losses realized after October 31, 1998 may be
deferred and treated as occurring on the first day of the following fiscal year.
For the year ended April 30, 1999, the Fund deferred capital losses in the
amount of $3,138,006.
7. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded several
reclassifications in the capital 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,
1999, the Fund decreased capital paid in on shares of beneficial interest by
$85,960, increased undistributed net investment income by $234,704 and decreased
accumulated net realized gains by $148,744.
TAX INFORMATION NOTICE (UNAUDITED)
The Fund distributed $53,572,834 of long-term capital gain dividends.
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.
21
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[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, 1999, the results of
its operations for the year then ended, 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 presented, 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, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
June 11, 1999
22
<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
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
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
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
World Wide Web address:
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 743 (6/99)
