As filed with the Securities and Exchange Commission on June 8, 2000
Registration Nos. 33-6930
811-4728
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. | |
POST-EFFECTIVE AMENDMENT NO. 17 |X|
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 18 |X|
(CHECK APPROPRIATE BOX OR BOXES)
------------
PHOENIX-OAKHURST INCOME & GROWTH FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)
------------
101 MUNSON STREET, GREENFIELD, MASSACHUSETTS 01301
(Address of Principal Executive Offices) (Zip Code)
c/o PHOENIX EQUITY PLANNING CORPORATION--SHAREHOLDER SERVICES
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115-0479
(NAME AND ADDRESS OF AGENT FOR SERVICE)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on pursuant to paragraph (a)(1)
|X| 75 days after filing pursuant to paragraph (a)(2)
[ ] on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
================================================================================
<PAGE>
CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)
UNDER THE SECURITIES ACT OF 1933
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
<S> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies,
and Related Risks..................................... Investment Risk and Return Summary
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell
Shares; Things You Should Know When Selling
Shares; Account Policies; Investor Services;
Tax Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION
<S> <C>
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Objectives and Policies;
Investment Restrictions
13. Management of the Fund................................... Management of the Fund
14. Control Persons and Principal Holders of Securities...... Management of the Fund
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares;
Investor Account Services; Redemption
of Shares; Tax Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER THE
APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
<PAGE>
<TABLE>
TABLE OF CONTENTS
----------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Risk and Return Summary.................................................. 1
Fund Expenses....................................................................... 6
Management of the Fund.............................................................. 7
Pricing of Fund Shares.............................................................. 8
Sales Charges....................................................................... 9
Your Account........................................................................ 11
How to Buy Shares................................................................... 12
How to Sell Shares.................................................................. 13
Things You Should Know When Selling Shares.......................................... 13
Account Policies.................................................................... 15
Investor Services................................................................... 16
Tax Status of Distributions......................................................... 16
Financial Highlights................................................................ 18
Additional Information.............................................................. 20
</TABLE>
[triangle] Phoenix-
Oakhurst
Income &
Growth
Fund
<PAGE>
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Oakhurst Income & Growth Fund has a primary investment objective of
investing in a diversified group of securities that are selected for current
yield consistent with the preservation of capital. The fund has a secondary
investment objective to achieve capital appreciation when it is consistent with
the fund's primary objective. The secondary objective is a non-fundamental
policy that may be changed without shareholder vote. There is no guarantee that
the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] To pursue its investment objective, the fund invests in
income-producing securities including common stocks, convertible
securities, mutual funds and all types of fixed income securities,
including high yield (so called "junk bonds"), mortgage- and
asset-backed, government, corporate and municipal debt obligations. The
fund may invest in both U.S. and foreign (non-U.S.) securities,
including issuers in "emerging market" countries and may invest in
companies of any size.
[arrow] Equity securities are selected using a quantitative value approach
coupled with fundamental analysis. The 1,500 largest capitalized stocks
are ranked based on value and growth criteria, such as price to
earnings, sales and cash flow and reported and forecasted earnings per
share growth. The adviser seeks a desired balance of risk and return
potential, including a targeted yield greater than that of the S&P 500.
[arrow] Fixed income securities are selected using a "sector rotation"
approach. The adviser seeks to adjust the proportion of fund investment
in various "sectors" (types of debt securities) and the selections
within sectors to obtain higher relative returns. The adviser selects
those sectors that it believes offer attractive values. Securities
within sectors are selected based on general economic and financial
conditions, and the issuer's business, management, cash, assets,
earnings and stability. Securities selected for investment are those
that the adviser believes offer the best potential for total return
based on risk-to-reward tradeoff.
[arrow] Interest rate risk is managed by a duration neutral strategy. The
adviser attempts to maintain the duration of the fund at a level
similar to that of its benchmark. Duration measures the interest rate
sensitivity of a fixed income security by assessing and weighting the
present value of the security's payment pattern. Generally, the longer
the maturity the greater the duration and therefore the greater effect
interest rate changes have on the price of the security. By maintaining
the duration of the fund at a level similar to that of its benchmark,
the Lehman Brothers Aggregate Bond Index, the adviser believes that the
fund's exposure to interest rate risk is more consistent with its
benchmark's risk profile than that of a fund that attempts to predict
future interest rate changes. On July 31, 2000 the modified average
duration of the Lehman Brothers Aggregate Bond Index was __ years.
Phoenix-Oakhurst Income & Growth Fund 1
<PAGE>
[arrow] Fixed income securities selected for fund investment may be of any
maturity. However, the adviser attempts to maintain a maturity
composition similar to that of its benchmark in an effort to maintain
an interest rate risk profile consistent with its benchmark. Maturity
composition refers to the percentage of securities within specific
maturity ranges as well as the aggregate weighted average portfolio
maturity. On July 31, 2000 the maturity of the Lehman Brothers
Aggregate Bond Index was __ years.
[arrow] The fund's investment strategy may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: When, in the adviser's opinion, adverse market or
economic conditions warrant, any part of the fund's assets may be held in cash
or money market instruments, including U.S. Treasury obligations maturing within
one year from the date of purchase. When this happens, the fund may not achieve
its stated objectives.
The fund may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for portfolio investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the portfolio invests
can be worse than expected and investments may fail to perform as the advisor
expects. As a result, the value of your shares may decrease.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, securities rated below investment grade (high
yield-high risk securities) have a greater chance that the issuer will be unable
to make such payments when due.
FOREIGN INVESTING
Foreign markets and currencies may not perform as well as U.S. markets.
Political and economic uncertainty in foreign countries, including so called
"emerging market" countries
2 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
(countries with less developed markets), as well as less public information
about foreign investments, may negatively impact the fund's portfolio. Dividends
and other income payable on foreign securities may be subject to foreign taxes.
Some investments may be made in currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the currency exchange rate.
Emerging market countries and companies doing business in emerging market
countries may not have the same range of opportunities as more developed
countries and their companies. They may also have more obstacles to financial
success.
HIGH YIELD FIXED INCOME SECURITIES
High yield securities (junk bonds) typically entail greater price volatility and
principal and interest rate risk. There is a greater risk that an issuer will
not be able to make principal and interest payments on time. Analysis of the
creditworthiness of issuers of high yield securities may be complex, and as a
result, it may be more difficult for the adviser to accurately predict risk.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the
portfolio may hold securities with longer maturities, the net asset value of the
portfolio may experience greater price fluctuations in response to changes in
interest rates than portfolios that hold only securities with short-term
maturities. Prices of longer-term securities are affected more by interest rate
changes than prices of shorter-term securities.
LONG-TERM MATURITIES
Fixed income securities with longer maturities may be subject to greater price
fluctuations due to interest rate, tax law and general market changes.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES
Early payoffs on the underlying loans in mortgage-backed and asset-backed
securities may result in the fund receiving less income than originally
anticipated. The variability in prepayments will tend to limit price gains when
interest rates drop and exaggerate price declines when interest rates rise. In
the event of high prepayments, the fund may be required to invest the proceeds
at lower interest rates, causing the fund to earn less than if the prepayments
had not occurred.
MUNICIPAL SECURITIES
Principal and interest payments on municipal securities may not be guaranteed by
the issuing body and may be payable only from monies derived from a particular
source (so-called "revenue bonds"). If the source does not perform as expected,
principal and income payments may not be made on time or at all. In addition,
the market for municipal securities is often thin and can
Phoenix-Oakhurst Income & Growth Fund 3
<PAGE>
be temporarily affected by large purchases and sales, including those by the
fund. General conditions in the financial markets and the size of a particular
offering may also negatively affect municipal securities' returns.
SMALL AND MEDIUM CAPITALIZATIONS
Companies with smaller capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small and medium
capitalization companies and their stock performance and can make investment
returns highly volatile. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
U.S. GOVERNMENT SECURITIES
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee principal and interest will be
timely paid to holders of the securities. The entities do not guarantee that the
value of fund shares will increase. In addition, not all U.S. Government
securities are backed by the full faith and credit of the United States.
4 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in Phoenix-Oakhurst Income & Growth Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the last ten years.(1)
The table shows how the fund's average annual returns for one, five and ten
years or over the life of the class compare to those of a broad-based securities
market index. The fund's past performance is not necessarily an indication of
how the fund will perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1990 -1.50
1991 23.40
1992 11.90
1993 14.52
1994 -6.25
1995 23.40
1996 12.70
1997 17.10
1998 10.96
1999 6.58
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 9.69% (quarter ending December 31,
1998) and the lowest return for a quarter was (8.44)% (quarter ending September
30, 1990). Year-to-date performance (through June 30, 2000) was ___%.
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
Life of Fund(2)
Average Annual Total Returns(1) -------------------------
(for the periods ending 12/31/99) One Year Five Years Ten Years Class A Class B
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares 0.45% 12.66% 10.24% -- N/A
-----------------------------------------------------------------------------------------------------------------
Class B Shares 1.49% 13.14% N/A -- 10.23%
-----------------------------------------------------------------------------------------------------------------
S&P 500 Composite Stock Price Index(3) 21.14% 28.66% 18.25% -- __%
-----------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(4) (0.83)% 7.73% 7.70% -- __%
-----------------------------------------------------------------------------------------------------------------
Balanced Benchmark(5) __% __% __% -- __%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and Class C Shares.
(2) Class B Shares since January 3, 1992.
(3) The S&P 500 Composite Stock Price Index is a measure of stock market total
return performance. The S&P 500's performance does not reflect sales charges.
(4) The Lehman Brothers Aggregate Bond Index is an unmanaged but commonly used
measure of bond performance. It is a combination of several Lehman Brothers
fixed income indices. The Index's performance does not reflect sales charges.
(5) The Balanced Benchmark is a composite index made up of 50% of the S&P 500
Index return and 50% of the Lehman Brothers Aggregate Bond Index return. The
index's performance does not reflect sales charges.
Performance information is not included for Class C Shares because the class has
not had annual returns for at least one calendar year.
Phoenix-Oakhurst Income & Growth Fund 5
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on
Purchases (as a percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (load) (as a None 5%(a) 1%(b)
percentage of the lesser of the value redeemed
or the amount invested)
Maximum Sales Charge (load) Imposed on
Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
----------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses __% __% __%
----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES __% __% __%
===== ===== =====
</TABLE>
---------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
6 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $ $ $ $
-----------------------------------------------------------------------------------------------------------------
Class B $ $ $ $
-----------------------------------------------------------------------------------------------------------------
Class C $ $ $ $
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $ $ $ $
-----------------------------------------------------------------------------------------------------------------
Class C $ $ $ $
-----------------------------------------------------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 fund companies totaling 38 mutual funds, as
subadviser to two fund companies totaling three mutual funds and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program, the general operations and the
day-to-day management of the fund. Phoenix manages the fund's assets to conform
with the investment policies as described in this prospectus. The fund pays
Phoenix a monthly investment management fee that is accrued daily against the
value of the fund's net assets at the following rates:
<TABLE>
------------------------------ ---------------------------- --------------------------- ----------------------------
<CAPTION>
1st billion $1+ billion
through $2 billion $2+ billion
------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Management Fee 0.70% 0.65% 0.60%
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$______. The ratio of management fees to average net assets for the fiscal year
ended April 30, 2000 was 0.70%.
Phoenix-Oakhurst Income & Growth Fund 7
<PAGE>
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of equity
investment professionals and a team of fixed income investment professionals.
Steven L. Colton is the leader of the equity team and as such is primarily
responsible for the day-to-day decisions related to the equity holdings in the
fund's portfolio. Mr. Colton is also Vice President and Portfolio Manager of the
Phoenix-Oakhurst Growth & Income Fund of Phoenix Equity Series Fund. Mr. Colton
joined Phoenix in June 1997. Previously, Mr. Colton was Portfolio Manager for
the American Century Income & Growth Fund from its inception in 1990 through May
1997.
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
The fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, the fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the fund.
Asset Value: The fund's investments are valued at market value. If market
quotations are not available, the fund determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and liabilities
that are not class specific (such as management fees) are allocated to each
class in proportion to each class' net assets, except where an alternative
allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
8 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
The net asset value per share of each class of the fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the NYSE is closed for trading. If
the fund holds securities that are traded on foreign exchanges that trade on
weekends or other holidays when the fund does not price its shares, the net
asset value of the fund's shares may change on days when shareholders will not
be able to purchase or redeem the fund's shares.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of fund distributions will be in full and fractional shares that
are purchased at the closing net asset value on the next business day on which
the fund's net asset value is calculated following the dividend record date.
SALES CHARGES
--------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
The fund presently offers three classes of shares that have different sales and
distribution charges (see "Fund Expenses" previously in this prospectus). The
fund has adopted distribution and service plans allowed under Rule 12b-1 of the
Investment Company Act of 1940 that authorize the fund to pay distribution and
service fees for the sale of its shares and for services provided to
shareholders.
What arrangement is best for you?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 5.75% of the offering price (6.10% of the amount
invested). The sales charge may be reduced or waived under certain conditions.
Class A Shares are not subject to any charges by the fund when redeemed. Class A
Shares have lower distribution and service fees (0.25%) and pay higher dividends
than any other class.
Phoenix-Oakhurst Income & Growth Fund 9
<PAGE>
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first five
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and Class C
Shares" below. This charge declines to 0% over a period of 5 years and may be
waived under certain conditions. Class B Shares have higher distribution and
service fees (1.00%) and pay lower dividends than Class A Shares. Class B Shares
automatically convert to Class A Shares eight years after purchase. Purchases of
Class B Shares may be inappropriate for any investor who may qualify for reduced
sales charges of Class A Shares and anyone who is over 85 years of age. The
underwriter may decline purchases in such situations.
CLASS C SHARES. If you purchase Class C Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class C Shares within the first year
after they are purchased, you will pay a sales charge of 1%. See "Deferred Sales
Charge Alternative--Class B and C Shares" below. Class C Shares have the same
distribution and service fees (1.00%) and pay comparable dividends as Class B
Shares. Class C Shares do not convert to any other class of shares of the fund.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Sales Charges: Combination Purchase Privilege" in the Statement
of Additional Information). Shares purchased based on the automatic reinvestment
of income dividends or capital gains distributions are not subject to any sales
charges. The sales charge is divided between your investment dealer and the
fund's underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
SALES CHARGE AS
A PERCENTAGE OF
--------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
----------------------------------------------------------------------------
Under $50,000 5.75% 6.10%
$50,000 but under $100,000 4.75 4.99
$100,000 but under $250,000 3.75 3.90
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND CLASS C SHARES
Class B and Class C Shares are purchased without an initial sales charge;
however, shares sold within a specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the rates listed below. The sales
charge will be multiplied by the then current market value or the initial cost
of the shares being redeemed, whichever is less. No sales charge will be imposed
on increases in net asset value or on shares purchased through the reinvestment
of income dividends or capital gains distributions. To minimize the sales
charge,
10 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
shares not subject to any charge will be redeemed first, followed by shares held
the longest time. To calculate the amount of shares owned and time period held,
all Class B Shares purchased in any month are considered purchased on the last
day of the preceding month, and all Class C Shares are considered purchased on
the trade date.
<TABLE>
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
<CAPTION>
YEAR 1 2 3 4 5 6+
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CDSC 5% 4% 3% 2% 2% 0%
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES
YEAR 1 2+
----------------------------------------
CDSC 1% 0%
</TABLE>
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
o $500 for all other accounts.
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
The fund reserves the right to refuse a purchase order for any reason.
Phoenix-Oakhurst Income & Growth Fund 11
<PAGE>
STEP 2.
Your second choice will be what class of shares to buy. The fund offers three
classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
o Receive dividends in additional shares and capital gains in
distributions in cash;
o Receive dividends in cash and capital gain distributions in
additional shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
<TABLE>
----------------------------------- ----------------------------------------------------------------------------
<CAPTION>
TO OPEN AN ACCOUNT
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimum investments or limitations on buying shares.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
12 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. In the case of a Class B or Class C Share redemption, you
will be subject to the applicable deferred sales charge, if any, for such
shares. Subject to certain restrictions, shares may be redeemed by telephone or
in writing. In addition, shares may be sold through securities dealers, brokers
or agents who may charge customary commissions or fees for their services. The
fund does not charge any redemption fees. Payment for shares redeemed is made
within seven days; however, redemption proceeds will not be disbursed until each
check used for purchases of shares has been cleared for payment by your bank,
which may take up to 15 days after receipt of the check.
<TABLE>
------------------------------------ -----------------------------------------------------------------------------
<CAPTION>
TO SELL SHARES
------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA 02266-
8301. Be sure to include the registered owner's name, fund and account
number, and number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix
Funds, 66 Brooks Drive, Braintree, MA 02184. Be sure to include the
registered owner's name, fund and account number, and number of shares or
dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by anyone but the shareholder(s)
of record. Transfers between broker-dealer "street" accounts are governed by the
accepting broker-dealer. Questions regarding this type of transfer should be
directed to your financial advisor. Redemption requests will not be honored
until all required documents in proper form
Phoenix-Oakhurst Income & Growth Fund 13
<PAGE>
have been received. To avoid delay in redemption or transfer, shareholders
having questions about specific requirements should contact the fund's Transfer
Agent at (800) 243-1574.
REDEMPTIONS BY MAIL
[arrow] If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instructions if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address on
record.
Send a clear letter of instructions with a signature guarantee when any
of these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last 60
days.
o You want the proceeds to go to a different name or address than on
the account.
[arrow] If you are selling shares held in a corporate or fiduciary account,
please contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be made by an eligible
guarantor institution as defined by the fund's Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker-dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
14 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
ACCOUNT POLICIES
--------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, B or Class C Shares, you can purchase
Class A Shares of any fund at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not more. Send your written
request to State Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call
us at (800) 243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B shareholders who have had the
contingent deferred sales charge waived because they are in the Systematic
Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should carefully read the prospectus of the fund into which you want to
exchange before deciding to make an exchange. You can obtain a prospectus from
your financial advisor or by calling us at (800) 243-4361 or accessing our Web
site at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of shares;
e.g., Class A for Class A. Exchange privileges are limited and may
not be available for all Phoenix Funds, and the fund's distributor
has the right to reject or suspend them.
o Exchanges may be made by phone (800) 243-1574 or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
o Because excessive trading can hurt fund performance and harm other
shareholders, the Fund reserves the right to temporarily or
permanently end exchange privileges or reject an order from anyone
who appears to be attempting to time the market, including investors
who request more than one exchange in any 30-day period. The fund's
underwriter has entered into agreements with certain market timing
firms permitting them to exchange by telephone. These privileges are
limited, and the fund distributor has the right to reject or suspend
them.
Phoenix-Oakhurst Income & Growth Fund 15
<PAGE>
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
INVESTOR SERVICES
--------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application. Exchange privileges are limited and may not be
available for all Phoenix Funds, and the funds' distributor has the right to
reject or suspend them.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application. Exchange privileges are limited
and may not be available for all Phoenix Funds, and the funds' distributor has
the right to reject or suspend them.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
16 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
The fund plans to make distributions from net investment income at least
annually and to distribute net realized capital gains, if any, at least
annually. Distributions of short-term capital gains and net investment income
are taxable to shareholders as ordinary income. Long-term capital gains, if any,
distributed to shareholders and which are designated by the fund as capital
gains distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix-Oakhurst Income & Growth Fund 17
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the fund's financial
performance over the past five years. Certain information reflects financial
results for a single fund share. The total returns in the tables represent the
rate that an investor would have earned or lost on an investment in the fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by PricewaterhouseCoopers LLP, independent accountants. Their
report, together with the fund's financial statements, are included in the
fund's most recent Annual Report, which is available upon request.
<TABLE>
CLASS A
----------------------------------------------------------------
<CAPTION>
YEAR ENDED APRIL 30,
2000 1999 1998 1997 1996
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.20 $ 9.86 $10.08 $ 8.88
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.36 0.38 0.40 0.44
Net realized and unrealized gain
(loss) 0.29 1.63 0.66 1.22
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.65 2.01 1.06 1.66
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.38) (0.39) (0.40) (0.42)
Dividends from net realized gains (0.76) (1.28) (0.88) (0.04)
In excess of accumulated net realized
gains (0.03) -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.17) (1.67) (1.28) (0.46)
------ ------ ------ ------
Change in net asset value (0.52) 0.34 (0.22) 1.20
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.68 $10.20 $ 9.86 $10.08
====== ====== ====== ======
Total return(1) 6.97% 21.87% 10.93% 19.01%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $565,276 $459,992 $451,439 $493,454
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.17%(2) 1.13% 1.18% 1.18%
Net investment income 3.64% 3.61% 3.82% 4.39%
Portfolio turnover 68% 155% 111% 107%
</TABLE>
---------------
(1) Maximum sales charge is not reflected in 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.
18 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
CLASS B
-----------------------------------------------------------------
<CAPTION>
YEAR ENDED APRIL 30,
2000 1999 1998 1997 1996
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.22 $ 9.87 $10.09 $ 8.88
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.29 0.30 0.31 0.36
Net realized and unrealized gain
(loss) 0.29 1.64 0.67 1.23
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.58 1.94 0.98 1.59
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.32) (0.31) (0.32) (0.34)
Dividends from net realized gains (0.76) (1.28) (0.88) (0.04)
In excess of accumulated net realized
gains (0.03) -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.11) (1.59) (1.20) (0.38)
Change in net asset value (0.53) 0.35 (0.22) 1.21
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.69 $10.22 $ 9.87 $10.09
====== ====== ====== ======
Total return(1) 6.18% 21.03% 10.05% 18.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $310,783 $361,876 $370,929 $396,169
RATIO TO AVERAGE NET ASSETS OF:
Expenses 1.92%(2) 1.88% 1.93% 1.93%
Net investment income 2.92% 2.86% 3.06% 3.64%
Portfolio turnover 68% 155% 111% 107%
</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.
Phoenix-Oakhurst Income & Growth Fund 19
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The fund has filed a Statement of Additional Information about the fund, dated
August 28, 2000 with the Securities and Exchange Commission. The Statement
contains more detailed information about the fund. It is incorporated into this
prospectus by reference and is legally part of the prospectus. You may obtain a
free copy of the Statement:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
[arrow] through its internet site (http://www.sec.gov),
[arrow] by visiting its Public Reference Room in Washington, DC,
[arrow] by writing to its Public Reference Section, Washington, DC 20549-0102
(a fee may be charged), or
[arrow] by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the fund's performance from May 1 through April 30. You
may request a free copy of the fund's Annual and Semiannual Reports:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<TABLE>
<S> <C>
SEC File Nos. 33-6930 and 811-4728 [recycle logo] Printed on recycled paper using soybean ink
</TABLE>
20 Phoenix-Oakhurst Income & Growth Fund
<PAGE>
PHOENIX-OAKHURST INCOME & GROWTH FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
August 28, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix-Oakhurst Income & Growth Fund, Inc. (the "Fund"), dated August 28, 2000,
and should be read in conjunction with it. The Fund's Prospectus may be obtained
by calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
The Fund .....................................................................1
Investment Objectives and Policies ...........................................1
Investment Restrictions ......................................................1
Investment Techniques ........................................................2
Performance Information ......................................................7
Portfolio Turnover ...........................................................9
Portfolio Transactions and Brokerage .........................................9
Services of the Advisor .....................................................10
Net Asset Value .............................................................11
How to Buy Shares ...........................................................12
Alternative Purchase Arrangements ...........................................12
Investor Account Services ...................................................15
How to Redeem Shares ........................................................16
Dividends, Distributions and Taxes...........................................17
Tax Sheltered Retirement Plans ..............................................19
The Distributor .............................................................19
Distribution Plans...........................................................21
Management of the Fund.......................................................22
Additional Information ......................................................27
Appendix.....................................................................29
Customer Service--(800) 243-1574
Marketing--(800) 243-4361
Telephone Orders--(800) 367-5877
Telecommunication Device--(TTY) (800) 243-1926
PXP693B(8/2000)
<PAGE>
THE FUND
Phoenix-Oakhurst Income & Growth Fund (the "Fund") is an open-end diversified
management investment company which was organized under Massachusetts law in
1986 as a business trust, then reorganized as a Delaware business trust in
August 2000. The following discussion supplements the description of the Fund's
investment policies and investment techniques in the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The primary investment objective of the Fund is to provide an investment in a
diversified group of securities that are selected for current yield consistent
with preservation of capital. The primary investment objective of the Fund is a
fundamental policy which may not be changed without the approval of the holders
of a majority of the outstanding shares of the Fund. The secondary objective of
the Fund is to achieve capital appreciation when it is consistent with the
Fund's primary objective. The secondary objective is a non-fundamental policy
and may be changed by a vote of the Trustees without shareholder approval. The
Fund will contain income producing securities, including domestic or foreign
equity, debt, options, convertible securities and government securities. The
proportion of holdings in bonds, preferred stocks and equities will vary with
the level of return obtained from these various classes of securities. Only
securities producing income at the time of purchase will be included in the
portfolio. There is no assurance that the Fund will achieve its investment
objectives.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to the Fund. Except as otherwise stated, these investment restrictions
are "fundamental" policies. A "fundamental" policy is defined in the 1940 Act to
mean that the restriction cannot be changed without the vote of a "majority of
the outstanding voting securities" of the Fund. A majority of the outstanding
voting securities is defined in the 1940 Act as the lesser of (a) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities.
The Fund may not:
1. With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would,
at the time, cause more than 5% of the Fund's total assets taken at
market value to be invested in the securities of such issuer; or (b) such
purchase would, at the time, result in more than 10% of the outstanding
voting securities of such issuer being held by the Fund.
2. Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or
more issuers conducting their principal business activities in the same
industry (excluding the U.S. Government or its agencies or
instrumentalities).
3. Borrow money, except (i) in amounts not to exceed one third of the value
of the Fund's total assets (including the amount borrowed) from banks,
and (ii) up to an additional 5% of its total assets from banks or other
lenders for temporary purposes. For purposes of this restriction, (a)
investment techniques such as margin purchases, short sales, forward
commitments, and roll transactions, (b) investments in instruments such
as futures contracts, swaps, and options and (c) short-term credits
extended in connection with trade clearance and settlement, shall not
constitute borrowing.
4. Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not be
deemed to be prohibited by this restriction.
5. Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the
Fund may be deemed to be an underwriter under applicable law.
6. Purchase or sell real estate, except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers
that invest in real estate or interests therein, (iii) invest in
mortgage-related securities and other securities that are secured by real
estate or interests therein, (iv) hold and sell real estate acquired by
the Fund as a result of the ownership of securities.
1
<PAGE>
7. Purchase or sell commodities or commodity contracts, except the Fund may
purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied
to the value of a financial index or a financial instrument or other
asset (including, but not limited to, securities indexes, interest rates,
securities, currencies and physical commodities).
8. Make loans, except that the Fund may (i) lend portfolio securities, (ii)
enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank
certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original
issuance of the securities and (iv) participate in an interfund lending
program with other registered investment companies.
If any percentage restriction described above for the Fund is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Fund's assets will not constitute a
violation of the restriction.
INVESTMENT TECHNIQUES
The Fund may utilize the following practices or techniques in pursuing its
investment objectives.
FOREIGN SECURITIES
The Fund may invest in the securities of foreign issuers. The Fund may invest
in a broad range of foreign securities including equity, debt and convertible
securities and foreign government securities. The Fund may purchase the
securities of issuers from various countries, including countries commonly
referred to as "emerging markets." The Fund may also invest in domestic
securities denominated in foreign currencies.
Investing in the securities of foreign companies involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investments in foreign countries, and potential restrictions on the
flow of international capital. Additionally, dividends payable on foreign
securities may be subject to foreign taxes withheld prior to distribution.
Foreign securities often trade with less frequency and volume than domestic
securities and therefore may exhibit greater price volatility. Changes in
foreign exchange rates will affect the value of those securities which are
denominated or quoted in currencies other than the U.S. dollar. Many of the
foreign securities held by the Fund will not be registered with, nor the issuers
thereof be subject to the reporting requirements of, the U.S. Securities and
Exchange Commission. Accordingly, there may be less publicly available
information about the securities and about the foreign company or government
issuing them than is available about a domestic company or government entity.
Moreover, individual foreign economies may differ favorably or unfavorably from
the United States economy in such respects as growth of Gross National Product,
rate of inflation, capital reinvestment, resource self-sufficiency and balance
of payment positions.
Certain foreign countries are less stable politically than the United States.
The possibility exists that certain foreign governments may adopt policies
providing for expropriation or nationalization of assets, confiscatory taxation,
currency blockage or limitations on the use or removal of monies or other assets
of an investment company. Finally, the Fund may encounter difficulty in
obtaining and enforcing judgments against issuers of foreign securities. The
economies of developing countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be adversely affected by economic conditions in the countries with which they
trade.
Certain emerging market countries are either comparatively underdeveloped or
are in the process of becoming developed and may consequently be economically
based on a relatively few or closely interdependent industries. A high
proportion of the securities of many emerging market issuers may also be held
by a limited number of large investors trading significant blocks of securities.
While the Adviser will strive to be sensitive to publicize reversals of economic
conditions, political unrest and adverse changes in trading status,
unanticipated political and social developments may affect the values of the
Fund's investments in such countries and the availability of additional
investments in such countries.
When investing in securities denominated in foreign currencies, the Fund will
be subject to the additional risk of currency fluctuations. An adverse change in
the value of a particular foreign currency as against the U.S. dollar, to the
extent that such change is not offset by a gain in other foreign currencies,
will result in a decrease in the Fund's assets. Any such change may also have
the effect of decreasing or limiting the income available for distribution.
Foreign currencies may be affected by revaluation, adverse political and
economic developments, and governmental restrictions. Although the Fund will
invest only in securities denominated in foreign currencies that are fully
convertible into U.S. dollars without legal restriction at the time
2
<PAGE>
of investment, no assurance can be given that currency exchange controls will
not be imposed on any particular currency at a later date.
Securities of U.S. issuers denominated in foreign currencies may be less
liquid and their prices more volatile than securities issued by domestic
issuers and denominated in U.S. dollars. In addition, investing in securities
denominated in foreign currencies often entails costs not associated with
investment in U.S. dollar-denominated securities of U.S. issuers, such as the
cost of converting foreign currency to U.S. dollars, higher brokerage
commissions, custodial expenses and other fees. Non-U.S. dollar denominated
securities may be subject to certain withholding and other taxes of the
relevant jurisdiction, which may reduce the yield on the securities to the Fund
and which may not be recoverable by the Fund or its investors.
The Fund will calculate its net asset value and complete orders to purchase,
exchange or redeem shares only on a Monday-Friday basis (excluding holidays on
which the New York Stock Exchange is closed). Foreign securities in which the
Fund may invest may be primarily listed on foreign stock exchanges which may
trade on other days (such as Saturdays). As a result, the net asset value of the
Fund's portfolio may be affected by such trading on days when a shareholder has
no access to the Fund.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
In order to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward foreign currency exchange contracts
("forward currency contracts") for the purchase or sale of a specified currency
at a specified future date. Such contracts may involve the purchase or sale
of a foreign currency against the U.S. dollar or may involve two foreign
currencies. The Fund may enter into forward currency contracts either with
respect to specific transactions or with respect to the Fund's portfolio
positions.
LENDING OF SECURITIES
The Fund may lend portfolio securities to broker/dealers or other
institutional borrowers, but only when the borrower pledges cash collateral
to the Fund and agrees to maintain such so that it amounts at all times to at
least 100% of the value of the securities loaned. Furthermore, the Fund may
terminate such loans at any time and must receive reasonable interest on the
collateral as well as dividends, interest, or other distributions paid on
the security during the loan period. Upon expiration of the loan, the borrower
of the securities will be obligated to return to the Fund the same number and
kind of securities as those loaned together with duly executed stock powers. The
Fund must be permitted to vote the proxies if a material event affecting the
value of the security is to occur. The Fund may pay reasonable fees in
connection with the loan, including reasonable fees to the Fund's Custodian for
its services.
MORTGAGE-RELATED AND OTHER ASSET-BACKED SECURITIES
Mortgage Pass-Through Securities. These are interests in pools of mortgage
loans, assembled and issued by various governmental, government-related, and
private organizations. Unlike other forms of debt securities, which normally
provide for periodic payment of interest in fixed amounts with principal
payments at maturity or specified call dates, these securities provide a
monthly payment consisting of both interest and principal payments. In effect,
these payments are a "pass-through" of the monthly payments made by the
borrowers on their residential or commercial mortgage loans, net of any fees
paid to the issuer or guarantor of such securities. Additional payments are
caused by repayments of principal resulting from the sale of the underlying
property, refinancing or foreclosure, net of fees or costs. "Modified
pass-through" securities (such as securities issued by the Government National
Mortgage Association ("GNMA")) entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, at the
scheduled payment dates regardless of whether or not the mortgagor actually
makes the payment.
The principal governmental guarantor of mortgage-related securities is GNMA.
GNMA is a wholly owned United States Government corporation within the
Department of Housing and Urban Development. GNMA is authorized to guarantee,
with the full faith and credit of the United States Government, the timely
payment of principal and interest on securities issued by institutions approved
by GNMA (such as savings and loan institutions, commercial banks and mortgage
bankers) and backed by pools of Federal Housing Administration insured or
Veterans Administration guaranteed mortgages.
Government-related guarantors whose obligations are not backed by the full
faith and credit of the United States Government include the Federal National
Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC"). FNMA is a government-sponsored corporation owned entirely by private
stockholders. It is subject to general regulation by the Secretary of Housing
and Urban Development. FNMA purchases conventional (i.e., not insured or
guaranteed by any government agency) residential mortgages from a list of
approved seller/servicers which include state and federally chartered savings
and loan associations, mutual savings banks, commercial banks and credit unions
and mortgage bankers. FHLMC is a government-sponsored corporation formerly owned
by the twelve Federal Home Loan Banks and now owned entirely by private
stockholders. FHLMC issues Participation Certificates ("Pcs") that represent
interests in conventional mortgages from FHLMC's national portfolio. FNMA and
FHLMC guarantee the timely payment
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of interest and ultimate collection of principal on securities they issue, but
their guarantees are not backed by the full faith and credit of the United
States Government.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issuers may,
in addition, be the originators and/or servicers of the underlying mortgage
loans as well as the guarantors of the mortgage-related securities. Pools
created by such non-governmental issuers generally offer a higher rate of
interest than government and government-related pools because there are no
direct or indirect government or agency guarantees of payments for such
securities. However, timely payment of interest and principal of these pools may
be supported by various forms of insurance or guarantees, including individual
loan, title, pool and hazard insurance and letters of credit. The insurance and
guarantees are issued by governmental entities, private insurers and the
mortgage poolers. Such insurance and guarantees and the creditworthiness of the
issuers thereof will be considered in determining whether a mortgage-related
security meets the Fund's investment quality standards. There can be no
assurance that the private insurers or guarantors can meet their obligations
under the insurance policies or guarantee arrangements. The Fund may buy
mortgage-related securities without insurance or guarantees if, through an
examination of the loan experience and practices of the originator/servicers and
poolers, the Adviser determines that the securities meet the Fund's quality
standards. Securities issued by certain private organizations may not be readily
marketable.
Mortgage-backed securities that are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, are not subject to the Fund's
industry concentration restrictions, set forth above under "Investment
Restrictions," by virtue of the exclusion from the test available to all U.S.
Government securities. The Fund will take the position that privately-issued
mortgage-related securities do not represent interests in any particular
"industry" or group of industries. The assets underlying such securities may be
represented by a portfolio of residential or commercial mortgages (including
both whole mortgage loans and mortgage participation interests) or portfolios of
mortgage pass-through securities issued or guaranteed by GNMA, FNMA or FHLMC.
Mortgage loans underlying a mortgage-related security may in turn be insured or
guaranteed by the Federal Housing Administration or the Department of Veterans
Affairs. In the case of private issue mortgage-related securities whose
underlying assets are neither U.S. Government securities nor U.S.
Government-insured mortgages, to the extent that real properties securing such
assets may be located in the same geographical region, the security may be
subject to a greater risk of default than other comparable securities in the
event of adverse economic, political or business developments that may affect
such region and, ultimately, the ability of residential homeowners to make
payments of principal and interest on the underlying mortgages.
Collateralized Mortgage Obligations (CMOs). A CMO is similar to a bond in that
interest and prepaid principal is paid, in most cases, semiannually. CMOs may be
collateralized by whole mortgage loans or by portfolios of mortgage pass-through
securities guaranteed by entities such as GNMA, FHLMC, or FNMA, and their income
streams.
CMOs are typically structured in multiple classes, each bearing a different
stated maturity. Actual maturity and average life will depend upon the
prepayment experience of the collateral. CMOs provide for a modified form of
call protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes typically receive principal only after the first class
has been retired. An investor may be partially guarded against a sooner than
desired return of principal because of the sequential payments.
FHLMC CMOs are debt obligations of FHLMC issued in multiple classes having
different maturity dates and are secured by the pledge of a pool of conventional
mortgage loans purchased by FHLMC. Unlike FHLMC Pcs, payments of principal and
interest on the CMOs are made semiannually rather than monthly. The amount of
principal payable on each semiannual payment date is determined in accordance
with FHLMC's mandatory sinking fund schedule. Sinking fund payments in the CMOs
are allocated to the retirement of the individual classes of bonds in the order
of their stated maturities. Payments of principal on the mortgage loans in the
collateral pool in excess of the amount of FHLMC's minimum sinking fund
obligation for any payment date are paid to the holders of the CMOs as
additional sinking-fund payments. Because of the "pass-through" nature of all
principal payments received on the collateral pool in excess of FHLMC's minimum
sinking fund requirement, the rate at which principal of the CMOs is actually
repaid is likely to be such that each class of bonds will be retired in advance
of its scheduled maturity date. If collection of principal (including
prepayments) on the mortgage loans during any semiannual payment period is not
sufficient to meet FHLMC's minimum sinking fund obligation on the next sinking
fund payment date, FHLMC agrees to make up the deficiency from its general
funds.
CMO Residuals. CMO residuals are derivative mortgage securities issued by
agencies or instrumentalities of the U.S. Government or by private originators
of, or investors in, mortgage loans. As described above, the cash flow generated
by the mortgage assets underlying a series of CMOs is applied first to make
required payments of principal and interest on the
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CMOs and second to pay the related administrative expenses of the issuer. The
"residual" in a CMO structure generally represents the interest in any excess
cash flow remaining after making the foregoing payments. Each payment of such
excess cash flow to a holder of the related CMO residual represents income
and/or a return of capital. The amount of residual cash flow resulting from a
CMO will depend on, among other things, the characteristics of the mortgage
assets, the coupon rate of each class of CMO, prevailing interest rates, the
amount of administrative expenses and, in particular, the prepayment experience
on the mortgage assets. In addition, if a series of a CMO includes a class that
bears interest at an adjustable rate, the yield to maturity on the related CMO
residual will also be extremely sensitive to changes in the level of the index
upon which interest rate adjustments are based. As described below with respect
to stripped mortgage-backed securities, in certain circumstances the Fund may
fail to recoup fully its initial investment in a CMO residual.
CMO residuals are generally purchased and sold by institutional investors
through several investment banking firms acting as brokers or dealers. The CMO
residual market has only very recently developed and CMO residuals currently may
not have the liquidity of other more established securities trading in other
markets. CMO residuals may be subject to certain restrictions on
transferability, may be deemed "illiquid," and may be subject to the Fund's
limitations on investment in illiquid securities.
Stripped Mortgage-Backed Securities. Stripped mortgage-backed securities
("SMBS") are derivative multi-class mortgage securities. They may be issued by
agencies or instrumentalities of the U.S. Government, or by private originators
of, or investors in, mortgage loans. SMBS are usually structured with two
classes that receive different proportions of the interest and principal
distributions on a pool of mortgage assets. A common type of SMBS will have one
class receiving some of the interest and most of the principal from the mortgage
assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the interest-only or "IO" class), while the other class will
receive all of the principal (the principal-only or "PO" class). The yield to
maturity on an IO class security is extremely sensitive to the rate of principal
payments (including prepayments) on the related underlying mortgage assets, and
a rapid rate of principal payments may have a material adverse effect on the
Fund's yield to maturity from these securities. If the underlying mortgage
assets experience greater than anticipated prepayments of principal, the Fund
may fail to recoup fully its initial investment in these securities even if the
security is in one of the highest rating categories.
Although SMBS are purchased and sold by institutional investors through
several investment banking firms acting as brokers or dealers, these securities
were only recently developed. As a result, established trading markets have not
yet developed and, accordingly, these securities may be deemed "illiquid" and
subject to the Fund's limitations on investment in illiquid securities.
The Fund may invest in other mortgage-related securities with features similar
to those described above, to the extent consistent with the Fund's investment
objectives and policies.
Other Asset-Backed Securities. Through trusts and other special purpose
entities, various types of securities based on financial assets other than
mortgage loans are increasingly available, in both pass-through structures
similar to mortgage pass-through securities described above and in other
structures more like CMOs. As with mortgage-related securities, these
asset-backed securities are often backed by a pool of financial assets
representing the obligations of a number of different parties. They often
include credit-enhancement features similar to mortgage-related securities.
Financial assets on which these securities are based include automobile
receivables; credit card receivables; loans to finance boats, recreational
vehicles, and mobile homes; computer, copier, railcar, and medical equipment
leases; and trade, healthcare, and franchise receivables. In general, the
obligations supporting these asset-backed securities are of shorter maturities
than mortgage loans and are less likely to experience substantial prepayments.
However, obligations such as credit card receivables are generally unsecured and
the obligors are often entitled to protection under a number of state and
federal consumer credit laws granting, among other things, rights to set off
certain amounts owed on the credit cards, thus reducing the balance due. Other
obligations that are secured, such as automobile receivables, may present
issuers with difficulties in perfecting and executing on the security interests,
particularly where the issuer allows the servicers of the receivables to retain
possession of the underlying obligations, thus increasing the risk that
recoveries on defaulted obligations may not be adequate to support payments on
the securities.
The Adviser expects additional assets will be "securitized" in the future. The
Fund may invest in any such instruments or variations on them to the extent
consistent with the Fund's investment objectives and policies.
OPTIONS
The Fund may, from time to time write covered call option contracts as a
means of increasing the total return of the Fund's portfolio and also as a means
of providing limited protection against increases in market value of the Fund's
portfolio. Such contracts will be written on securities in which the Fund has
authority to invest and on securities indices listed on an organized national
securities exchange.
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A call option on a security gives the purchaser of the option the right to buy
the underlying security from the writer at the exercise price at any time prior
to the expiration of the contract, regardless of the market price of the
security during the option period. A written call option is "covered" if,
throughout the life of the option (1) the Fund owns the optioned securities, (2)
the Fund maintains in a pledged account with its Custodian, any asset, including
equity securities, as long as the asset is liquid, unencumbered and marked to
market daily with a value sufficient to meet its obligations under the call, or
(3) if the Fund owns an offsetting call option. The premium paid to the writer
is the consideration for undertaking the obligations under the option contract.
The Fund will only write call option contracts when it is believed that the
total return to the Fund can be increased through such premiums consistent with
the Fund's investment objective.
The Fund may also write covered call options on securities indices. Through
the writing of call index options, the Fund can achieve many of the same
objectives as through the use of call options on individual securities. Call
options on securities indices are similar to call options on a security except
that, rather than the right to take delivery of a security at a specified
price, a call option on a securities index gives the holder the right to
receive, upon the exercise of the option, an amount of cash if the closing
level of the securities index upon which the call option is based is greater
than the exercise price of the option. The writing of option contracts is a
highly specialized activity which involves investment techniques and risks
different from those ordinarily associated with investment companies, and the
restrictions listed above would tend to reduce such risks
The Fund may purchase options to close out a position, (i.e. a "closing
purchase transaction"--the purchase of a call option on the same security with
the same exercise price and expiration date as the call option which it has
previously written on any particular security). When a security is sold from
the Fund's portfolio, the Fund will first effect a closing purchase transaction
so as to close out any existing call option on that security, realizing a
profit or loss depending on whether the amount paid to purchase a call option
is less or more than the amount received from the sale thereof. In addition,
the Fund may wish to purchase a call option to hedge its portfolio against any
anticipated increase in the price of securities it intends to purchase or to
purchase a put option to hedge its portfolio against an anticipated decline in
securities prices.
The purchase and writing of options involves certain risks. During the option
period, the covered call writer has, in return for the premium on the option,
given up the opportunity to profit from a price increase in the underlying
securities above the exercise price, but, as long as its obligation as a writer
continues, has retained the risk of loss should the price of the underlying
security decline. The writer of an option has no control over the time when it
may be required to fulfill its obligation as a writer of the option. Once an
option writer has received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its obligation under the option and
must deliver the underlying securities at the exercise price. If a call option
purchased by the Fund is not sold when it has remaining value, and if the market
price of the underlying security remains less than or equal to the exercise
price, the Fund will lose its entire investment in the option. Also, where an
option on a particular security is purchased to hedge against price movements in
a related security, the price of the option may move more or less than the price
of the related security. There can be no assurance that a liquid market will
exist when the Fund seeks to close out an option position. Furthermore, if
trading restrictions or suspensions are imposed on the options market, the Fund
may be unable to close out an option position.
PRIVATE PLACEMENTS AND RULE 144A SECURITIES
The Fund may purchase securities which have been privately issued and are
subject to legal restrictions on resale or which are issued to qualified
institutional investors under special rules adopted by the Commission. Such
securities may offer higher yields than comparable publicly traded securities.
Such securities ordinarily can be sold by the Fund in secondary market
transactions to certain qualified investors pursuant to rules established by the
Commission, in privately negotiated transactions to a limited number of
purchasers or in a public offering made pursuant to an effective registration
statement under the Securities Act of 1933 (The "1933 Act"). Public sales of
such securities by the Fund may involve significant delays and expense. Private
sales often require negotiation with one or more purchasers and may produce
less favorable prices than the sale of similar unrestricted securities. Public
sales generally involve the time and expense of the preparation and processing
of a registration statement under the 1933 Act (the possible decline in value
of the securities during such period) and may involve the payment of
underwriting commissions. In some instances, the Fund may have to bear certain
costs of registration in order to sell such shares publicly. Except in the case
of securities sold to qualifying institutional investors under special rules
adopted by the Commission for which the Trustees of the Fund determine the
secondary market is liquid, Rule 144A securities will be considered illiquid.
Trustees of the Fund may determine the secondary market is liquid based upon
the following factors which will be reviewed periodically as required pursuant
to procedures adopted by the Fund; the number of dealers willing to purchase or
sell the security; the frequency of trades; dealer undertakings to make a
market in the security, and the nature of the security and its market.
Investing in Rule 144A Securities could have the effect of increasing the level
of the Fund's illiquidity to the extent that qualified institutional buyers
become, for a time, uninterested in purchasing these securities.
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REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with respect to U.S. Government
securities. Repurchase agreements may be entered into only with registered
broker/dealers or Government securities dealers ("dealers") and depository
institutions ("banks") believed by the Adviser to present minimum credit risk in
accordance with guidelines approved by the Fund's Trustees. The Adviser will
review and monitor the creditworthiness of such dealers and banks. Under such
agreements, the dealer or bank agrees, upon entering into the contract, to
repurchase a security it sells at a time and price mutually agreed upon with the
purchaser of the security, thereby determining the yield during the term of the
agreement. This results in a fixed rate of return insulated from market
fluctuations during such period. The seller under a repurchase agreement will be
required to maintain the value of the securities subject to the agreement at not
less than the repurchase price, and such value will be determined on a daily
basis by marking the underlying securities to their market value. With respect
to any repurchase agreements with a maturity of greater than one day, such
agreement shall be collateralized in an amount at least equal to 102 percent of
the repurchase price. The Fund does not bear the risk of a decline in value of
the underlying security unless the seller defaults under its repurchase
obligation. In the event of a bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses, including (a) possible decline in the value of
the underlying securities during the period while the Fund seeks to enforce its
rights thereto: (b) possible subnormal levels of income and lack of access to
income during this period; and (c) expenses of enforcing rights.
U.S. TREASURY AND CORPORATE ZERO COUPON BOND The Fund may invests in U.S.
Treasury and corporate zero coupon bonds. Zero coupon bonds are issued and
traded at a discount from their face amount. The amount of the discount varies
depending on such factors as the time remaining until maturity of the bonds and
prevailing interest rates. The market price of U.S. Treasury zero coupon bonds
are generally more volatile than the U.S. Treasury securities that pay interest
periodically and zero coupon bonds are likely to respond to changes in interest
rates to a greater degree than do securities on which regular cash payments of
interest are being made that have similar maturities. In order to satisfy a
requirement for qualification as a "regulated investment company" under the
Code, the Fund must distribute its investment company taxable income, including
the original issue discount accrued on zero coupon bonds. Because the Fund will
not receive on a current basis, cash payments in respect of accrued original
issue discount on zero coupon bonds during the period before maturity, the Fund
will distribute cash obtained from other sources in order to satisfy the
distribution requirement under the Code.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a when-issued or delayed delivery basis.
In such transactions, the price is fixed at the time the commitment to purchase
is made, but delivery and payment for the securities take place more than seven
days in the future or after a period longer than the customary settlement
period for the particular security. Customary settlement for newly-issued
mortgage-backed securities occurs only when the composition of the underlying
mortgage pool is set, typically once a month.
At the time the Fund makes the commitment to purchase a security on a
when-issued or delayed delivery basis, it will record the transaction and
reflect the value of the security and the liability to pay the purchase price in
determining the Fund's net asset value. The value of the security on the
settlement date may be more or less than the price paid as a result of, among
other things, changes in the level of interest rates or other market factors.
Thus there is a risk of loss which is in addition to the risk of decline in the
value of the Fund's other assets. No interest accrues on the security between
the time the Fund enters into the commitment and the time the security is
delivered. The Fund will establish a segregated account with the Custodian in
which it will maintain cash and liquid high grade debt securities equal in value
to commitments for when-issued or delayed delivery securities. Such segregated
securities either will mature or, if necessary, be sold on or before the
settlement date. When when-issued or delayed delivery securities may be sold
prior to the settlement date, it is intended that the Fund will purchase such
securities with the purpose of actually acquiring them unless a sale appears
desirable for investment reasons, in which case the Fund may sell its interest
in the securities rather than take delivery, and may reinvest the proceeds in
similar or other securities.
PERFORMANCE INFORMATION
The Fund may, from time to time, include performance information in
advertisements, sales literature or reports to shareholders or prospective
investors. Performance information in advertisements and sales literature may be
expressed as a yield of a class and as a total return of any class of the Fund.
Standardized quotations of average annual total return for Class A, Class B or
Class C shares will be expressed in terms of the average annual compounded rate
of return for a hypothetical investment in either Class A, Class B or Class C
shares over periods of 1, 5 and 10 years or up to the life of the class of
shares), calculated for each class separately pursuant to the following formula:
P((1+T)(n)) = ERV (where P = a hypothetical initial payment of $1,000, T = the
average annual total
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return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of each Class's
expenses (on an annual basis), deduction of the maximum initial sales load in
the case of Class A shares and the maximum contingent deferred sales charge
applicable to a complete redemption of the investment in the case
of Class B and Class C shares, and assume that all dividends and distributions
are on Class A, Class B and Class C shares reinvested when paid.
The Fund may from time to time include in advertisements containing total
return the ranking of those performance figures relative to such figures for
groups of mutual funds having similar investment objectives as categorized by
ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar,
Inc. Additionally, the Fund may compare its performance results to other
investment or savings vehicles (such as certificates of deposit) and may refer
to results published in various publications such as Changing Times, Forbes,
Fortune, Money, Barrons, Business Week and Investor's Daily, Stanger's Mutual
Fund Monitor, The Stanger Register, Stanger's Investment Adviser, The Wall
Street Journal, The New York Times, Consumer Reports, Registered Representative,
Financial Planning, Financial Services Weekly, Financial World, U.S. News and
World Report, Standard & Poor's The Outlook, and Personal Investor. The Fund
may from time to time illustrate the benefits of tax deferral by comparing
taxable investments to investments made through tax-deferred retirement plans.
The total return may also be used to compare the performance of the Fund against
certain widely acknowledged outside standards or indices for stock and bond
market performance, such as the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500"), Dow Jones Industrial Average, Europe Australia Far East
Index (EAFE), Consumer Price Index, Lehman Brothers Corporate Index and Lehman
Brothers T-Bond Index.
Advertisements, sales literature and other communications may contain
information about the Fund and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Fund to
respond quickly to changing market and economic conditions. From time to time
the Fund may include specific portfolio holdings or industries, such as IBM or
health care, in such communications. To illustrate components of overall
performance, the Fund may separate is cumulative and average annual returns into
income and capital gains components; or cite separately as a return figure the
equity or bond portion of the Fund's portfolio; or compare the Fund's equity or
bond return future to well-known indices of market performance, including, but
not limited to: the S&P 500, Dow Jones Industrial Average, CS First Boston High
Yield Index and Salomon Brothers Corporate Bond and Government Bond Indices.
Quotations of yield for the Fund will be based on all investment income per
share earned during a particular 30-day period (including dividends and
interest), less expenses accrued during the period ("net investment income"),
and is computed by dividing net investment income by the value of a share on the
last day of the period according to the following formula:
Yield = 2[(a - b+1)6-1]
-----
cxd
Where a = dividends and interest earned during the period by the Fund,
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends, and
d = the maximum offering price per share on the last day of the
period.
For the 30-day period ended April 30, 2000, the yield of the Class A Shares
and Class B Shares was ____% and ____%, respectively.
For the 1, 5 and 10 year periods ended April 30, 2000, the average annual
total return of the Class A Shares was ____%, ____% and ____%, respectively. For
the 1 and 5 year periods ended April 30, 2000, and since inception (January 3,
1992 through April 30, 2000), for Class B Shares, the average annual total
return was ____%, ____% and ____%, respectively. For the period since inception
(August 27, 1999) through April 30, 2000, for Class C Shares, the annual total
return was _____%. Performance information reflects only the performance of a
hypothetical investment in each class during the particular time period on which
the calculations are based. Performance information should be considered in
light of the Fund's investment objectives and policies, characteristics and
quality of the portfolio, and the market condition during the given time period,
and should not be considered as a representation of what may be achieved in the
future.
The Fund may also compute aggregate total return for specified periods based
on a hypothetical Class A or Class B account with an assumed initial investment
of $10,000. The aggregate total return is determined by dividing the net asset
value of this account at the end of the specified period by the value of the
initial investment and is expressed as a percentage. Calculation of aggregate
total return reflects payment of the Class A shares's maximum sales charge of
5.75% and assumes reinvestment of all income dividends and capital gain
distributions during the period. Based on the foregoing, the Class A aggregate
cumulative total return for the period commencing September 7, 1940 and ending
April 30, 2000 was ____%. Class B aggregate cumulative total return for the
period commencing with the offering of the Class B Shares on January 3, 1992 and
ending April 30, 2000 was ____%.
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The Fund also may quote annual, average annual and annualized total return and
aggregate total return performance data, for both classes of shares of the Fund,
both as a percentage and as a dollar amount based on a hypothetical $10,000
investment for various periods other than those noted below. Such data will be
computed as described above, except that (1) the rates of return calculated will
not be average annual rates, but rather, actual annual, annualized or aggregate
rates of return and (2) the maximum applicable sales charge will not be included
with respect to annual, annualized or aggregate rate of return calculations.
PORTFOLIO TURNOVER
Portfolio turnover is calculated by dividing the lesser of purchases or sales
of portfolio securities during the fiscal year by the monthly average of the
value of the Fund's securities (excluding from the computation all securities,
including options, with maturities at the time of acquisition of one year or
less). A high rate of portfolio turnover generally involves correspondingly
greater brokerage commission expenses, which must be borne directly by the Fund.
Turnover rates may vary greatly from year to year as well as within a particular
year and may also be affected by cash requirements for redemptions of Fund
shares and by requirements which enable the Fund to receive certain favorable
tax treatment (see "Dividends, Distributions and Taxes"). Historical annual
rates of portfolio turnover for the Fund are set forth in the prospectus under
the heading "Financial Highlights."
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities, supervises
their execution and negotiates brokerage commissions on behalf of the Fund. It
is the practice of the Adviser to seek the best prices and best execution of
orders and to negotiate brokerage commissions which in the Adviser's opinion are
reasonable in relation to the value of the brokerage services provided by the
executing broker. Brokers who have executed orders for the Fund are asked to
quote a fair commission for their services. If the execution is satisfactory and
if the requested rate approximates rates currently being quoted by the other
brokers selected by the Adviser, the rate is deemed by the Adviser to be
reasonable. Brokers may ask for higher rates of commission if all or a portion
of the securities involved in the transaction are positioned by the broker, if
the broker believes it has brought the Fund an unusually favorable trading
opportunity, or if the broker regards its research services as being of
exceptional value, and payment of such commissions is authorized by the Adviser
after the transaction has been consummated. If the adviser more than
occasionally differs with the broker's appraisal of opportunity or value, the
broker would not be selected to execute trades in the future.
The Adviser believes that the Fund benefits with a securities industry
comprised of many and diverse firms and that the long-term interest of
shareholders of the Fund is best served by its brokerage policies which include
paying a fair commission rather than seeking to exploit its leverage to force
the lowest possible commission rate. The primary factors considered in
determining the firms to which brokerage orders are given are the Adviser's
appraisal of: the firm's ability to execute the order in the desired manner, the
value of research services provided by the firm, and the firm's attitude toward
and interest in mutual funds in general including the sale of mutual funds
managed and sponsored by the Adviser. The Adviser does not offer or promise to
any broker an amount or percentage of brokerage commissions as an inducement or
reward for the sale of shares of the Fund. Over-the-counter purchases and sales
are transacted directly with principal market-makers except in those
circumstances where in the opinion of the Adviser better prices and execution
are available elsewhere.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments; many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers as a group tend to
monitor a broader universe of securities and other matters than the Adviser's
staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of this information will be used in connection with the Fund. While this
information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate its value and in the opinion
of the Adviser it does not reduce the Adviser's expenses in a determinable
amount. The extent to which the Adviser makes use of statistical, research and
other services furnished by brokers is considered by the Adviser in the
allocation of brokerage business but there is no formula by which such business
is allocated. The Adviser does so in accordance with its judgment of the best
interest of the Funds and their shareholders.
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The Fund has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Fund. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs shared pro rata based on the
Fund's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order it partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets or
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
Purchases and sales of fixed-income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market makers for the securities at a net price. The Fund will also
purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed-income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed-income securities transactions consists primarily of dealer
spreads and underwriting commissions.
In purchasing and selling fixed-income securities, it is the policy of the
Fund to obtain the best results taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
the Adviser generally seeks reasonably competitive spreads or commissions, the
Fund will not necessarily pay the lowest spread or commission available.
The Fund may, in circumstances in which two or more dealers are in a position
to offer comparable results, give preference to a dealer which has provided
statistical or other research services to the Fund. By allocating transactions
in this manner, the Adviser is able to supplement its research and analysis with
the views and information of other securities firms.
For the fiscal years ended April 30, 1998, 1999 and 2000, brokerage commission
paid by the Trust on portfolio transactions totaled $1,276,897, $578,805 and
$_______, respectively. In the fiscal years ended April 30, 1998, 1999 and 2000,
W.S. Griffith & Co., Inc., a broker-dealer subsidiary of Phoenix Home Life,
received $_____, $_____ and $_____ in fund-related commissions attributed to a
clearing arrangement with an unaffiliated broker-dealer. For the fiscal year
ended April 30, 2000, the amount paid to W.S. Griffith was ___% of total
brokerage commissions paid by the Trust and was paid on transactions amounting
to ___% of the aggregate dollar amount of transactions involving the payment of
commissions. In the fiscal year ended April 30, 2000, the Trust paid brokerage
commissions of $_______ to PXP Securities Corp., an affiliate of its
Distributor. For the fiscal year ended April 30, 2000, the amount paid to PXP
Securities Corp. was ___% of the total brokerage commission paid by the Trust
and was paid on transactions amounting to ____% of the aggregate dollar amount
of transactions involving the payment of commissions. Brokerage commissions of
$_____ paid during the fiscal year ended April 30, 2000, were paid on portfolio
transactions aggregating $______ executed by brokers who provided research and
other statistical information.
SERVICE OF THE ADVISER
The investment adviser to the Fund is Phoenix Investment Counsel, Inc. ("PIC"
or "Adviser"), which is located at 56 Prospect Street, Hartford, Connecticut
06115-0480. PIC also acts as the investment adviser for 14 fund companies
totalling 38 mutual funds, as subadviser to two fund companies totaling three
mutual funds, and as adviser to institutional clients. PIC has acted as an
investment adviser for over sixty years. PIC was originally organized in 1932 as
John P. Chase, Inc. As of December 31, 1999, PIC had approximately $25.7 billion
in assets under management. Philip R. McLoughlin, a Director and officer of the
Fund, is a director of PIC. All other executive officers of the Fund are
officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") of Hartford, Connecticut is a majority shareholder of PXP.
Phoenix Home Life is in the business of writing ordinary and group life and
health insurance and annuities. Its principal offices are located at One
American Row, Hartford, Connecticut 06115-2520. Equity Planning, a mutual fund
distributor, acts as the national distributor of the Fund's
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shares and as financial agent of the Fund. The principal office of Equity
Planning is located at 100 Bright Meadow Boulevard, Enfield, Connecticut 06082.
PXP is a publicly-traded independent registered investment advisory firm and
has served investors for over 70 years. It manages over $____ billion in assets
(as of June 30, 2000) through its investment partners: Aberdeen Fund Managers,
Inc. (Aberdeen) in Aberdeen, London, Singapore and Fort Lauderdale; Duff &
Phelps Investment Management Co. (Duff & Phelps) in Chicago and Cleveland; Roger
Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca Capital Management
LLC (Seneca) in San Francisco; Phoenix/Zweig Advisers LLC (Zweig) in New York;
and Phoenix Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst
divisions) in Hartford, Sarasota and Scotts Valley, CA, respectively.
The Adviser provides certain services and facilities required to carry on the
day-to-day operations of the Fund (for which it receives a management fee) other
than the costs of printing and mailing proxy materials, reports and notices to
shareholders; outside legal and auditing accounting services; regulatory filing
fees and expenses of printing the Fund's registration statements (but the
Distributor purchases such copies of the Fund's prospectuses and reports and
communications to shareholders as it may require for sales purposes); insurance
expense; association membership dues; brokerage fees; and taxes.
As compensation for its services, the Adviser receives a fee, which is accrued
daily against the value of the Fund's net assets and is paid monthly by the
Fund. The fee is computed at an annual rate of 0.70% of the Fund's average daily
net assets up to $1 billion, 0.65% of the Fund's average daily net assets from
$1 billion to $2 billion and 0.60% of the Fund's average daily net assets in
excess of $2 billion. For the fiscal years 1998, 1999 and 2000, the net
management fees paid by the Fund to the Adviser were $5,877,607, $5,907,808 and
$____, respectively.
The Management Agreement was approved by the Trustees of the Fund on March 16,
1993, and by the shareholders of the Fund on May 13, 1993. Effective June 1,
1998, National Securities & Research Corporation ("National") assigned its
investment advisory agreement to PIC and PIC now serves as the Adviser for the
Fund. National and PIC are both subsidiaries of PXP. The Management Agreement
will continue in effect from year to year if specifically approved annually (a)
by the Trustees of the Fund, including a majority of the disinterested Trustees,
or by (b) a majority of the outstanding voting securities of the Fund as defined
in the 1940 Act. The Management Agreement may be terminated without penalty at
any time by a similar vote upon 60 days' notice or by the adviser upon 60 days'
written notice and will automatically terminate in the event of its assignment
as defined in Section 2(a)(4) of the 1940 Act.
The Fund, its Adviser and Distributor have each adopted a Code of Ethics
pursuant to Rule 17-j1 under the Investment Company Act of 1940. Personnel
subject to the Codes of Ethics may purchase and sell securities for their
personal accounts, including securities that may be purchased, sold or held by
the Fund, subject to certain restrictions and conditions. Generally, personal
securities transactions are subject to preclearance procedures, reporting
requirements and holding period rules. The Codes also restrict personal
securities transactions in private placements, initial public offerings and
securities in which the Fund has a pending order.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of the Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Fund. The net asset value per share of the Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution plan fees and any other expenses allocated solely to that class,
are deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at the
quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for the Fund if it invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of the Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued
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using fair value considerations by the Trustees or their delegates. If at
any time the Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares of the Fund may be purchased from investment dealers at a price equal
to their net asset value per share, plus a sales charge which, at the election
of the purchaser, may be imposed either (i) at the time of the purchase (the
"initial sales charge alternative"), or (ii) on a contingent deferred basis (the
"deferred sales charge alternative").
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Fund, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
shares would be less than the initial sales charge and accumulated distribution
plan fees on Class A shares purchased at the same time.
Dividends paid by the Fund, if any, with respect to Class of Shares will be
calculated in the same manner at the same time on the same day, except that fees
such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and
enjoy the benefit of not being subject to any sales charge when they are
redeemed. Class A Shares are subject to ongoing distribution and services fees
at an annual rate of 0.25% of the Fund's aggregate average daily net assets
attributable to the Class A Shares. In addition, certain purchases of Class A
Shares qualify for reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but
they are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted. The purpose of the conversion feature is to relieve the holders of
the Class B Shares that have been outstanding for a period of time sufficient
for the adviser and the Distributor to have been compensated for distribution
expenses related to the Class B Shares from most of the burden of such
distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution
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and services fees. Such conversion will be on the basis of the relative net
asset value of the two classes without the imposition of any sales load, fee or
other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.
CLASS C SHARES
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase.
The deferred sales charge may be waived in connection with certain qualifying
redemptions. Shares issued in conjunction with the automatic reinvestment of
income distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to an ongoing distribution and services fee
at an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The ways in which sales charges may be avoided or reduced are described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual fund advised, subadvised or distributed
by the Adviser, Distributor or any of their corporate affiliates (an "Affiliated
Phoenix Fund"); (2) any director or officer, or any full-time employee or sales
representative (for at least 90 days) of the Adviser or Distributor; (3)
registered representatives and employees of securities dealers with whom
Distributor has sales agreements; (4) any qualified retirement plan exclusively
for persons described above; (5) any officer, director or employee of a
corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who retires from
Phoenix Home Life, Distributor and/or their corporate affiliates; (9) any
account held in the name of a qualified employee benefit plan, endowment fund or
foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund or any other Affiliated Phoenix Fund qualified plan; (11) any
Phoenix Home Life separate account which funds group annuity contracts offered
to qualified employee benefit plans; (12) any state, county, city, department,
authority or similar agency prohibited by law from paying a sales charge; (13)
any fully matriculated student in any U.S. service academy; (14) any unallocated
account held by a third party administrator, registered investment adviser, Fund
company, or bank Fund department which exercises discretionary authority and
holds the account in a fiduciary, agency, custodial or similar capacity, if in
the aggregate such accounts held by such entity equal or exceed $1,000,000; (15)
any person who is investing redemption proceeds from investment companies other
than the Phoenix Funds or any other Affiliated Phoenix Fund if, in connection
with the purchases or redemption of the redeemed shares, the investor paid a
prior sales charge provided such investor supplies verification that the
redemption occurred within 90 days of the Phoenix Fund purchase and that a sales
charge was paid; (16) any deferred compensation plan established for the benefit
of any Phoenix Fund or any other Affiliated Phoenix Fund trustee or director;
provided that sales to persons listed in (1) through (16) above are made upon
the written assurance of the purchaser that the purchase is made for investment
purposes and that the shares so acquired will not be resold except to the Fund;
(17) purchasers of Class A Shares bought through investment advisers and
financial planners who charge an advisory, consulting or other fee for their
services and buy shares for their own accounts or the accounts of their clients;
(18) retirement plans and deferred compensation plans and trusts used to fund
those plans (including, for example, plans qualified or created under sections
401(a), 403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy
shares for their own accounts, in each case if those purchases are made through
a broker or agent or other financial intermediary that has made special
arrangements with the Distributor for such purchases; or (19) 401(k)
participants in the Merrill Lynch Daily K Plan (the "Plan") if the Plan has at
least $3 million in assets or 500 or more eligible employees; or (20) clients of
investment advisors or financial planners who buy shares for their own accounts
but only if their accounts are linked to a master account of their investment
advisor or financial planner on the books and records of the broker, agent or
financial intermediary with which the Distributor has made such special
arrangements (each of the investors described in (17) through (20) may be
charged a fee by the broker, agent or financial intermediary for purchasing
shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix-Goodwin Money Market
Fund Series Class A Shares), if made at the same time by the same "person," will
be added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or
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their own account (including an IRA account) including his or their own trust;
(b) a trustee or other fiduciary purchasing for a single trust, estate or single
fiduciary account (even though more than one beneficiary may exist); (c)
multiple employer trusts or Section 403(b) plans for the same employer; (d)
multiple accounts (up to 200) under a qualified employee benefit plan or
administered by a third party administrator; or (e) trust companies, bank trust
departments, registered investment advisers, and similar entities placing orders
or providing administrative services with respect to funds over which they
exercise discretionary investment authority and which are held in a fiduciary,
agency, custodial or similar capacity, provided all shares are held of record in
the name, or nominee name, of the entity placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Fund.
LETTER OF INTENt. If you sign a Letter of Intent, your purchase of any class
of shares of this or any other Affiliated Phoenix Fund (other than
Phoenix-Goodwin Money Market Fund Series Class A Shares), if made by the same
person within a 13-month period, will be added together to determine whether you
are entitled to an immediate reduction in sales charges. Sales charges are
reduced based on the overall amount you indicate that you will buy under the
Letter of Intent. The Letter of Intent is a mutually non-binding arrangement
between you and the Distributor. Since the Distributor doesn't know whether you
will ultimately fulfill the Letter of Intent, shares worth 5% of the amount of
each purchase will be set aside until you fulfill the Letter of Intent. When you
buy enough shares to fulfill the Letter of Intent, these shares will no longer
be restricted. If, on the other hand, you do not satisfy the Letter of Intent,
or otherwise wish to sell any restricted shares, you will be given the choice of
either buying enough shares to fulfill the Letter of Intent or paying the
difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you do
not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A Shares before
Class C or B Shares, respectively. Oldest shares will be redeemed before selling
newer shares. Any remaining shares will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on redemptions of shares if the redemption is made (a)
within one year of death (i) of the sole shareholder on an individual account,
(ii) of a joint tenant where the surviving joint tenant is the deceased's
spouse, or (iii) of the beneficiary of a Uniform Gifts to Minors Act (UGMA),
Uniform Transfers to Minors Act (UTMA) or other custodial account; (b) within
one year of disability, as defined in Code Section 72(m)(7); (c) as a mandatory
distribution upon reaching age 701/2 under any retirement plan qualified under
Code Sections 401, 408 or 403(b) or resulting from the tax-free return of an
excess contribution to an IRA; (d) by 401(k) plans using an approved participant
tracking system for participant hardships, death, disability or normal
retirement, and loans which are subsequently repaid; (e) from the Merrill Lynch
Daily K Plan ("Plan") invested in Class B Shares, in which such shares the
Distributor has not paid the dealer the Class B sales commission; (f) based on
the exercise of exchange privileges among Class B Shares of this or any other
Affiliated Phoenix Fund; (g) based on any direct rollover transfer of shares
from an established Affiliated Phoenix Fund qualified plan into an Affiliated
Phoenix Fund IRA by participants terminating from the qualified plan; and (h)
based on the systematic withdrawal program. If, as described in condition (a)
above, an account is transferred to an account registered in the name of a
deceased's estate, the CDSC will be waived on any redemption from the estate
account occurring within one year of the death. If the Class B Shares are not
redeemed within one year of the death, they will remain subject to the
applicable CDSC.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same
Portfolio eight years after they are purchased. Conversion will be on the basis
of the then prevailing net asset value of Class A and B Shares. There is no
sales load, fee or other charge for this feature. Class B Shares acquired
through dividend or distribution reinvestments will be converted into Class A
Shares at the same time that other Class B Shares are converted based on the
proportion that the reinvested shares bear to purchased Class B Shares. The
conversion feature is subject to the continuing availability of an opinion of
counsel or a ruling of the Internal Revenue Service that the assessment of the
higher distribution fees and associated costs with respect to
14
<PAGE>
Class B Shares does not result in any dividends or distributions constituting
"preferential dividends" under the Code, and that the conversion of shares does
not constitute a taxable event under federal income tax law. If the conversion
feature is suspended, Class B Shares would continue to be subject to the higher
distribution fee for an indefinite period. Even if the Fund was unable to obtain
such assurances, it might continue to make distributions if doing so would
assist in complying with its general practice of distributing sufficient income
to reduce or eliminate federal taxes otherwise payable by the Fund.
INVESTOR ACCOUNT SERVICES
The Fund offers accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
Broker/dealers may impose their own restrictions and limits on accounts held
through the broker/dealer. Please consult your broker/dealer for account
restrictions and limit information.
EXCHANGES
Under certain circumstances, shares of any Affiliated Phoenix Fund may be
exchanged for shares of the same Class of another Affiliated Phoenix Fund on the
basis of the relative net asset values per share at the time of the exchange.
Exchanges are subject to the minimum initial investment requirement of the
designated fund, except if made in connection with the Systematic Exchange
privilege. Shareholders may exchange shares held in book-entry form for an
equivalent number (value) of the same class of shares of any other Affiliated
Phoenix Fund, if currently offered. Exchanges will be based upon each Fund's net
asset value per share next computed following receipt of a properly executed
exchange request, without sales charge. On exchanges with share classes that
carry a contingent deferred sales charge, the CDSC schedule of original shares
purchased continues to apply. The exchange of shares is treated as a sale and
purchase for federal income tax purposes (see also "Dividends, Distributions and
Taxes").
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Affiliated Phoenix Fund automatically on a
monthly, quarterly, semi-annual or annual basis or may cancel this privilege at
any time. If you maintain an account balance of at least $5,000, or $2,000 for
tax qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that shares be
automatically exchanged at predetermined intervals for shares of the same class
of another Affiliated Phoenix Fund. This requirement does not apply to Phoenix
"Self Security" program participants. Systematic exchanges will be executed upon
the close of business on the 10th day of each month or the next succeeding
business day. Systematic exchange forms are available from the Distributor.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS
If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that any dividends
and distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Affiliated Phoenix Funds at
net asset value. You should obtain a current prospectus and consider the
objectives and policies of each fund carefully before directing dividends and
distributions to another fund. Reinvestment election forms and prospectuses are
available from Equity Planning. Distributions may also be mailed to a second
payee and/or address. Requests for directing distributions to an alternate payee
must be made in writing with a signature guarantee of the registered owner(s).
To be effective with respect to a particular dividend or distribution,
notification of the new distribution option must be received by the Transfer
Agent at least three days prior to the record date of such dividend or
distribution. If all shares in your account are repurchased or redeemed or
transferred between the record date and the payment date of a dividend or
distribution, you will receive cash for the dividend or distribution regardless
of the distribution option selected.
INVEST-BY-PHONE
This expedited investment service allows you to make an investment in an
account by requesting a transfer of funds from the balance of your bank account.
Once a request is phoned in, the Transfer Agent will initiate the transaction by
wiring a request for monies to your commercial bank, savings bank or credit
union via Automated Clearing House (ACH). Your bank, which must be an ACH
member, will in turn forward the monies to the Transfer Agent for credit to your
account. ACH is a computer based clearing and settlement operation established
for the exchange of electronic transactions among participating depository
institutions. This service may also be used to sell shares of the Fund and
direct proceeds of sale through ACH to your bank account.
To establish this service, please complete the Invest-by-Phone Application and
attach a voided check. Upon the Transfer Agent's acceptance of the authorization
form (usually within two weeks) you may call toll free (800) 367-5877 prior to
3:00 PM (eastern time) to place your purchase request. Instructions as to the
account number and amount to be invested must be
15
<PAGE>
communicated to the Transfer Agent. The Transfer Agent will then contact your
bank via ACH with appropriate instructions. The purchase is normally credited to
your account the day following receipt of the verbal instructions. The Fund may
delay the mailing of a check for redemption proceeds of Fund shares purchased
with a check or via Invest-by-Phone service until the Fund has assured itself
that good payment has been collected for the purchase of the shares, which may
take up to 15 days after receipt of the check.
The Fund and the Transfer Agent reserve the right to modify or terminate the
Invest-by-Phone service for any reason or to institute charges for maintaining
an Invest-by-Phone account.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to periodically redeem a portion
of your account on a predetermined monthly, quarterly, semiannual or annual
basis. A sufficient number of full and fractional shares will be redeemed so
that the designated payment is made on or about the 20th day of the month.
Shares are tendered for redemption by the Transfer Agent, as agent for the
shareowner, on or about the 15th of the month at the closing net asset value on
the date of redemption. The Systematic Withdrawal Program also provides for
redemptions to be tendered on or about the 10th, 15th or 25th of the month with
proceeds to be directed through Automated Clearing House (ACH) to your bank
account. In addition to the limitations stated below, withdrawals may not be
less than $25 and minimum account balance requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any applicable
contingent deferred sales charge on all shares redeemed. Accordingly, the
purchase of Class B Shares will generally not be suitable for an investor who
anticipates withdrawing sums in excess of the above limits shortly after the
purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made within
seven days after tender. The right to redeem shares may be suspended and payment
therefor postponed during periods when the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or if permitted by rules of
the Securities and Exchange Commission, during periods when trading on the
Exchange is restricted or during any emergency which makes it impracticable for
the Fund to dispose of its securities or to determine fairly the value of its
net assets or during any other period permitted by order of the Securities and
Exchange Commission for the protection of investors. Furthermore, the Transfer
Agent will not mail redemption proceeds until checks received for shares
purchased have cleared, which may take up to 15 days after receipt of the check.
Redemptions by Class B shareholders will be subject to the applicable deferred
sales charge, if any. See the Fund's current Prospectus for further information.
The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Fund's net asset value next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Fund has no specific procedures
governing such account transfers.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
REDEMPTION OF SMALL ACCOUNTS
Due to the relatively high cost of maintaining small accounts, the Fund
reserves the right to redeem, at net asset value, the shares of any shareholder
whose account has a value, due to redemptions, of less than $200. Before the
Fund redeems these shares, the shareholder will be given notice that the value
of the shares in the account is less than the minimum amount and
16
<PAGE>
will be allowed 30 days to make an additional investment in an amount which will
increase the value of the account to at least $200.
BY MAIL
Shareholders may redeem shares by making written request, executed in the full
name of the account, directly to Phoenix Funds c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates for
shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Fund redeem the shares. See the Fund's current
Prospectus for more information.
TELEPHONE REDEMPTION
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Fund's current Prospectus for
additional information.
To the extent consistent with state and federal law, the Fund may make payment
of the redemption price either in cash or in kind. However, the Fund has elected
to pay in cash all requests for redemption by any shareholder of record, limited
in respect to each shareholder during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of such
period. This election has been made pursuant to Rule 18f-1 under the Investment
Act of 1940 and is irrevocable while the Rule is in effect unless the Securities
and Exchange Commission, by order, permits the withdrawal thereof. In case of a
redemption in kind, securities delivered in payment for shares would be readily
marketable and valued at the same value assigned to them in computing the net
asset value per share of the Fund. A shareholder receiving such securities would
incur brokerage costs when selling the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinstatement of their investment at net asset
value. See the Fund's current Prospectus for more information and conditions
attached to the privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund intends to remain qualified as a regulated investment company under
certain provisions of the Code. Under such provisions, the Fund will not be
subject to federal income tax on such part of its ordinary income and net
realized capital gains which it distributes to shareholders provided it meets
certain distribution requirements. To qualify for treatment as a regulated
investment company, the Fund generally must, among other things, (a) derive in
each taxable year at least 90% of its gross income from dividends, interest
payments with respect to security loans and gains from the sale or disposition
of stock or securities and certain other items and (b) diversify its holdings so
that, at the end of each quarter of the taxable year (i) at least 50% of the
market value of the Fund's assets are represented by cash, U.S. Government
securities, securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for purposes of
this calculation to an amount not greater than 5% of the Fund's total assets and
10% of the outstanding voting securities of any one issuer and (ii) not more
than 25% of the value of its total assets is invested in the securities of any
one issuer (other than U.S. Government securities or the securities of other
regulated investment companies). If, in any taxable year, the Fund does not
qualify as a regulated investment company all of its taxable income will be
taxed to the Fund at corporate rates.
The Code imposes a 4% nondeductible excise tax on a regulated investment
company, such as the Fund, if it does not distribute to its shareholders during
the calendar year an amount equal to 98% of its net ordinary income, with
certain adjustments, plus 98% of the Fund's net capital gains for the 12-month
period ending on October 31 of such calendar year. In addition, an amount equal
to any undistributed investment company taxable income or capital gain net
income from the previous reporting year must also be distributed to avoid the
excise tax. The excise tax is imposed on the amount by which the regulated
investment company does not meet the foregoing distribution requirements. If the
Fund has taxable income that would be subject to the excise tax, the Fund
intends to distribute such income so as to avoid payment of the excise tax.
Under another provision of the Code, any dividend declared by the Fund to
shareholders of record in October, November or December of any year and payable
to shareholders of record on a specified date in such a month will be deemed to
have been received by, and will be taxable to shareholders as of December 31,
provided that the dividend is actually paid by the Fund in January of the
following year.
Under certain circumstances, the sales charge incurred in acquiring shares of
the Fund may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies where shares of the Fund are
disposed of within 90 days after the date on which they were acquired and new
shares of a regulated investment company are acquired
17
<PAGE>
without a sales charge or at a reduced sales charge. In that case, the gain
or loss realized on the disposition will be determined by excluding from the
charge incurred in acquiring those shares. This exclusion applies to the extent
that the otherwise applicable sales charge with respect to the newly acquired
shares is reduced as a result of the shareholder having incurred a sales charge
initially. The portion of the sales charge affected by this rule will be treated
as a sales charge paid for the new shares.
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value of a share below a
shareholder's cost for the share, such a distribution nevertheless generally
would be taxable to the shareholder as ordinary income or long-term capital
gain, even though, from an investment standpoint, it may constitute a partial
return of capital. In particular, investors should be careful to consider the
tax implications of buying shares just prior to a distribution by the Fund. The
price of shares purchased at that time may include the amount of the forthcoming
distribution, but the distribution generally would be taxable to them.
Some shareholders may be subject to withholding of federal income tax on
dividends and redemption payments from the Fund backup withholding at the rate
of 31%. Corporate shareholders and certain other shareholders specified in the
Code generally are exempt from such backup withholding. Generally, shareholders
subject to backup withholding will be (i) those for whom a certified taxpayer
identification number is not on file with the Fund, (ii) those about whom
notification has been received (either by the shareholder or the Fund) from the
Internal Revenue Service that they are subject to backup withholding or (iii)
those who, to the Fund's knowledge, have furnished an incorrect taxpayer
identification number. Generally, to avoid backup withholding, an investor must,
at the time an account is opened, certify under penalties of perjury that the
taxpayer identification number furnished is correct and that he or she is not
subject to backup withholding.
The Fund may invest in certain debt securities that are originally issued or
acquired at a discount. Special rules apply under the Code to the recognition of
income with respect to such debt securities. Under the special rules, the Fund
may recognize income for tax purposes without a corresponding current receipt of
cash. In addition, gain on a disposition of a debt security subject to the
special rules may be treated wholly or partially as ordinary income, not capital
gain.
The Fund intends to accrue dividend income for federal income tax purposes in
accordance with the rules applicable to regulated investment companies. In some
cases, these rules may have the effect of accelerating (in comparison to other
recipients of the dividend) the time at which the dividend is taken into account
by the Fund as taxable income.
Transactions in options on stock indexes are subject to the Code rules of
section 1256. Pursuant to these rules, such options, whether sold by the Fund
during a taxable year or held by the Fund at the close of its taxable year, will
be treated as if sold for their market value. Generally, 60% of any net gain or
loss recognized on the deemed sale, as well as 60% of the gain or loss with
respect to any actual termination (including expiration), will be treated as
long-term capital gain or loss and the remaining 40% will be treated as
short-term capital gain or loss.
The Fund may be subject to tax on dividend or interest income received from
securities of non-U.S issuers withheld by a foreign country at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of tax or exemption from tax on income. It is
impossible to determine the effective rate of foreign tax in advance since the
amount of the Fund's assets to be invested within various countries is not
known. The Fund intends to operate so as to qualify for treaty tax benefits
where applicable. To the extent that the Fund is liable for foreign income taxes
withheld at the source, the Fund may operate so as to meet the requirements of
the Code to "pass through" to the Fund's shareholders tax benefits attributable
to foreign income taxes paid by the Fund. If more than 50% of the value of the
Fund's total assets at the close of its taxable year is comprised of securities
issued by foreign corporations, the Fund may elect with the Internal Revenue
Service to "pass through" to the Fund's shareholders the amount of foreign
income taxes paid by the Fund. Pursuant to this election, shareholders will be
required to (i) include in gross income, even though no actually received, their
respective pro rata share of foreign taxes paid by the Fund; (ii) treat their
pro rata share of foreign taxes as paid by them; (iii) either deduct their pro
rata share of foreign taxes in computing their taxable income, or use such share
as foreign tax credit against U.S. income tax (but not both). No deduction for
foreign taxes may be claimed by a non-corporate shareholder who does not itemize
deductions. The Fund may meet the requirements to "pass through" to its
shareholders foreign income taxes paid, but there can be no assurance that the
Fund will be able to do so. Each shareholder will be notified within 60 days
after the close of each taxable year of the Fund if the foreign taxes paid by
the Fund will "pass through" for that year, and, if so, the amount of each
shareholder's pro rata share (by country) or (i) the foreign taxes paid and (ii)
the Fund's gross income from foreign sources. Shareholders who are not liable
for federal income taxes will not be affected by such "pass through" of foreign
tax credits.
The foregoing is a general summary of the applicable provisions of the Code
and Treasury Regulations presently in effect. For the complete provisions,
reference should be made to the pertinent Code sections and the Treasury
Regulations promulgated thereunder. The Code and these Treasury Regulations are
subject to change by legislative or administrative
18
<PAGE>
action either prospectively or retroactively. Distributions and the transactions
referred to above may be subject to state and local income tax, and the
treatment thereof may differ from the federal treatment discussed herein.
Shareholders are advised to consult with their tax advisor or attorney
regarding specific questions as to federal, foreign, state or local taxes.
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan (the
"Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and, on
the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
THE DISTRIBUTOR
Pursuant to an Underwriting Agreement with the Fund, Phoenix Equity Planning
Corporation (the "Distributor"), an indirect less than wholly-owned subsidiary
of Phoenix Home Life and an affiliate of PIC, serves as distributor for the
Fund. The address of the Distributor is P.O. Box 2200, 100 Bright Meadow Blvd.,
Enfield, Connecticut 06083-2200. As such, the Distributor conducts a continuous
offering pursuant to a "best efforts" arrangement requiring the Distributor to
take and pay for only such securities as may be sold to the public. During the
fiscal years 1998, 1999 and 2000, purchasers of the Fund shares paid aggregate
sales charges of $1,204,486, $754,398 and $____, respectively, of which the
principal Distributor of the Fund received net commissions of $859,920, $452,708
and $____, respectively, for its services, the balance being paid to dealers.
For the fiscal year ended April 30, 2000, the Distributor received net
commission of $____ for Class A Shares and deferred sales charges of $____ for
Class B and Class C Shares. The fees were used to compensate sales and services
persons for selling shares of the Fund and for providing services to
shareholders. In addition, the fees were used to compensate the Distributor for
sales and promotional activities.
The Underwriting Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Distributor, by vote
of a majority of the outstanding voting securities of the Fund, or by vote of a
majority of the Fund's Trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of the
Distribution Plans or in any related agreements. The Underwriting Agreement will
terminate automatically in the event of its assignment.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements received
a discount or commission as set forth below:
19
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10% 5.25%
$50,000 but under $100,000 4.75 4.99 4.25
$100,000 but under $250,000 3.75 3.90 3.25
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sales price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan (the "Plan") due to waiver of the CDSC for
these Plan participants' purchases. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Funds and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Funds
through distribution fees, service fees or transfer agent fees or, in some
cases, the Distributor may pay certain fees from its own profits and resources.
From its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6 million. If part or all of
such investment, including investments by qualified employee benefit plans, is
subsequently redeemed within one year of the investment date, the broker-dealer
will refund to the Distributor such amounts paid with respect to the investment.
In addition, the Distributor may pay the entire applicable sales charge on
purchases of Class A Shares to selected dealers and agents. From its own profits
and resources, the Distributor intends to pay the following additional
compensation to Merrill Lynch, Pierce, Fenner & Smith, Inc.: 0.25% on sales of
Class A and B shares, 0.10% on sales of Class C shares, 0.10% on sales of Class
A shares sold at net asset value, and 0.10% annually on the average daily net
asset value of fund shares on which Merrill Lynch is broker of record and which
such shares exceed the amount of assets on which Merrill Lynch is broker of
record as of July 1, 1999. Any dealer who receives more than 90% of a sales
charge may be deemed to be an "underwriter" under the Securities Act of 1933.
Equity Planning reserves the right to discontinue or alter such fee payment
plans at any time.
From its own resources or pursuant to the Distribution Plans, and subject to
the dealers' prior approval, the Distributor may provide additional compensation
to registered representatives of dealers in the form of travel expenses, meals,
and lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A Shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
ADMINISTRATIVE SERVICES
Equity Planning also acts as financial agent of the Fund and as such performs
administrative, bookkeeping and pricing functions for the Fund. For its services
as financial agent, Equity Planning will be paid a fee equal to the sum of (1)
the documented cost of fund accounting and related services provided by PFPC,
Inc., as subagent, to the financial agent, plus (2) the documented cost to the
financial agent to provide financial reporting and tax services and oversight of
the subagent's performance. The current fee schedule of PFPC, Inc. is based upon
the average of the aggregate daily net asset values of the Fund, at the
following incremental annual rates.
20
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
</TABLE>
Percentage rates are applied to the aggregate daily net asset values of the
Fund. PFPC, Inc. also charges minimum fees and additional fees for each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as financial agent. PFPC,
Inc. agreed to a modified fee structure and waived certain charges. Because
PFPC, Inc.'s arrangement would have favored smaller funds over larger funds,
Equity Planning reallocates PFPC, Inc.'s overall asset-based charges among all
funds for which it serves as financial agent on the basis of the relative net
assets of each fund. As a result, the PFPC, Inc. charges to the Fund are
expected to be slightly less than the amount that would be found through direct
application of the table illustrated above. For its services during the Fund's
fiscal year ended April 30, 2000, Equity Planning received $____.
DISTRIBUTION PLANS
The Fund has adopted a distribution plan for each class of shares (i.e., a
plan for the Class A Shares, a plan for the Class B Shares, and a plan for the
Class C Shares; collectively, the "Plans") in accordance with Rule 12b-1 under
the Act, to compensate the Distributor for the services it provides and for the
expenses it bears under the Underwriting Agreement. Each class of shares pays a
service fee at a rate of 0.25% per annum of the average daily net assets of such
class of the Fund and a distribution fee based on average daily net assets at
the following rates: for Class B Shares at a rate of 0.75% per annum; for Class
C Shares at a rate of 0.75% per annum.
From the Service Fee, the Distributor expects to pay a quarterly fee to
qualifying broker-dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor. The Distributor also pays to dealers as additional compensation
with respect to Class C Shares 0.75% of the average annual net asset value of
that Class.
In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor, such
as services to the Fund's shareholders; or services providing the Fund with more
efficient methods of offering shares to coherent groups of clients, members or
prospects of a participant; or services permitting bulking of purchases or
sales, or transmission of such purchases or sales by computerized tape or other
electronic equipment; or other processing.
On a quarterly basis, the Fund's Trustees review a report on expenditures
under the Plans and the purposes for which expenditures were made. The Trustees
conduct an additional, more extensive review annually in determining whether the
Plans will be continued. By its terms, continuation of the Plans from year to
year is contingent on annual approval by a majority of the Fund's Trustees and
by a majority of the Trustees who are not "interested persons" (as defined in
the 1940 Act) and who have no direct or indirect financial interest in the
operation of the Plans or any related agreements (the "Plan Trustees"). The
Trustees have concluded that there is a reasonable likelihood that each Plan
will benefit the Fund and each affected Class of shareholders.
The Plans provide that they may not be amended to increase materially the
costs which the Fund may bear pursuant to the Plans without approval of the
shareholders of the Fund and that other material amendments to the Plans must be
approved by a majority of the Plan Trustees by vote cast in person at a meeting
called for the purpose of considering such amendments. The Plans further provide
that while in effect, the selection and nomination of Trustees who are not
"interested persons" shall be committed to the discretion of the Trustees who
are not "interested persons." The Plans may be terminated at any time by vote of
a majority of the Plan Trustees or a majority of the outstanding shares of the
relevant class of the Fund.
For the fiscal year ended April 30, 2000, the Fund paid Rule 12b-1 Fees in the
amount of $____ of which the Distributor received $____, unaffiliated
broker-dealers received $____ and W.S. Griffith & Co., Inc., an affiliate,
received ____. The Rule 12b-1 payments for the fiscal year ended April 30, 2000
were used for (1) compensation of dealers, $____, (2) compensation to sales
personnel, $____, (3) advertising, $____, (4) printing and mailing prospectuses
to other than current shareholders, $____, (5) service costs, $____ and (6)
other costs, $____.
21
<PAGE>
No interested person of the Fund and no Trustee who is not an interested
person of the Fund, as that term is defined in the Investment Company Act of
1940, had any direct or indirect financial interest in the operation of the
Plan.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution plan fees or amend the Plans.
MANAGEMENT OF THE FUND
The Fund is an open-end management investment company known as a mutual fund.
The Trustees of the Fund ("Trustees") are responsible for the overall
supervision of the Fund and perform the various duties imposed on Directors by
the Investment Company Act of 1940 and Delaware business trust law.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the Trustees and
executive officers of the Fund including their principal occupations during the
past five years. Unless otherwise noted, the address of each executive officer
and Trustee is 56 Prospect Street, Hartford, Connecticut, 06115.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present).
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present). Chairman, (1998-present), Accuhealth Trism, Inc.
(1994-present), Realty Foundation of New York (1972-present), and
New York Housing Partnership Development Corp. (1985-present).
Vice Chairman Academy of Political Science (1985-present) and
Director/Trustee, Phoenix Funds (1993-present). Trustee,
Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Chairman/Member, Audit Committee of the City of
New York (1981-1996). Advisory Director, Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996) and Fund Directions
(1993-1998). Chairman, Financial Accounting Standards Advisory
Council (1992-1995).
Harry Dalzell-Payne (71) Trustee Director/Trustee, Phoenix Funds (1993-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Apartment 29G Mutual Funds (1996-present) and Phoenix-Seneca Funds
New York, NY 10016 (1999-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Formerly a Major General of the British Army.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -------------------------
<S> <C> <C>
*Francis E. Jeffries (69) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Apt. 1601 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Naples, FL 33963 (2000-present). Director, Duff & Phelps Utilities Income Inc.
(1987-present), Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1993-present). Director, The Empire District Electric
Company (1984-present). Director (1989-1997), Chairman of the
Board (1993-1997), President (1989-1993), and Chief Executive
Officer (1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (61) Trustee Chairman (1995-present) and Chief Executive Officer (1995-1999),
Chairman and Chief Carson Products Company. (1995-present). Director/Trustee, Phoenix
Executive Officer Funds (1980-present). Trustee, Phoenix-Aberdeen Series Fund,
Carson Products Company Phoenix Duff & Phelps Institutional Mutual Funds (1996-present)
64 Ross Road and Phoenix-Seneca Funds (2000-present). Director, Equifax Corp.
Savannah, GA 30750 (1991-present) and Evergreen International Fund, Inc.
(1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust.
*Philip R. McLoughlin (53) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-present), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-present), Phoenix Equity
Planning Corporation. Chairman and Chief Executive Officer,
Phoenix/Zweig Advisors LLC (1999-present). PXRE Corporation
(Delaware) (1985-present) and World Trust Fund (1991-present).
Director and Executive Vice President, Phoenix Life and Annuity
Company (1996-present). Director and Executive Vice President, PHL
Variable Insurance Company (1995-present). Director, Phoenix
Charter Oak Trust Company (1996-present). Director and Vice
President, PM Holdings, Inc. (1985-present). Director
(1992-present) and President (1992-1994), W.S. Griffith & Co.,
Inc. Director, PHL Associates, Inc. (1995-present).
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present), Phoenix-Aberdeen Series
Colts Neck, NJ 07722 Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present).
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -------------------------
<S> <C> <C>
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly, IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Boston, MA 02109 Funds (2000-present). Director, AIB Govett Funds (1991-present),
Investors Financial Service Corporation (1995-present), Investors
Bank & Trust Corporation (1995-present), Plymouth Rubber Co.
(1995-present), Stifel Financial (1996-present), Command Systems,
Inc. (1998-present), Connecticut River Bancorp (1998-present) and
Endowment for Health (1999-present). Vice Chairman, Massachusetts
Housing-Partnership (1998-2000). Director, Blue Cross and Blue
Shield of New Hampshire (1994-1999).
Herbert Roth, Jr. (71) Trustee Director/Trustee, Phoenix Funds (1980-present), Phoenix-Aberdeen
134 Lake Street Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
P.O. Box 909 (1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Sherborn, MA 01770 Boston Edison Company (1978-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./ Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries (diversified
manufacturer) (1985-present). Member, Directors Advisory Council,
Phoenix Home Life Mutual Insurance Company (1998-present).
Director, Phoenix Home Life Mutual Insurance Company (1972-1998).
Richard E. Segerson (54) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (69) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, UST Inc. (1995-present), HPSC Inc.
(1995-present) Burroughs Wellcome Fund (1996-present) and
Compuware (1996-present). Visiting Professor, University of
Virginia (1997-present). Director, Duty Free International, Inc.
(1997). Chairman, Dresing, Lierman, Weicker (1995-1996). Governor
of the State of Connecticut (1991-1995).
Michael E. Haylon (42) Executive Director and Executive Vice President, Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director (1994-present),
President President (1995-present), Executive Vice President (1994-1995),
Vice President (1991-1994), Phoenix Investment Counsel, Inc.
Director, Phoenix Equity Planning Corporation (1995-present).
Executive Vice President, Phoenix Funds (1993-present) and
Phoenix-Aberdeen Series Fund (1996-present). Executive Vice
President (1997-present), Vice President (1996-1997), Phoenix Duff
& Phelps Institutional Mutual Funds. Senior Vice President,
Securities Investments, Phoenix Home Life Mutual Insurance Company
(1993-1995).
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -------------------------
<S> <C> <C>
John F. Sharry (48) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-1999), Phoenix Investment
President Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-present). Executive Vice
President, Phoenix Funds (1998-present) and Phoenix-Aberdeen
Series Funds (1998-present). Managing Director, Director and
National Sales Manager, Putnam Mutual Funds (1992-1995).
James D. Wehr (43) Senior Vice Senior Vice President (1998-present), Managing Director, Fixed
President Income (1996-1998), Vice President (1991-1996), Phoenix Investment
Counsel, Inc. Senior Vice President (1997-present),Vice President
(1988-1997) Phoenix Multi-Portfolio Fund; Senior Vice President
(1997-present), Vice President(1990-1997) Phoenix Series Fund; Senior
Vice President(1997-present), Vice President(1993-1997)
Phoenix-Goodwin California Tax Exempt Bonds, Inc., and Senior Vice
President (1997-present), Vice President (1996-1997) Phoenix Duff &
Phelps Institutional Mutual Funds. Senior Vice President (1997-present)
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc., Phoenix-Goodwin
Multi-Sector Short Term Bond Fund, Phoenix-Oakhurst Income & Growth
Fund and Phoenix-Oakhurst Strategic Allocation Fund, Inc. Managing
Director, Public Fixed Income, Phoenix Home Life Insurance Company
(1991-1995).
Steven L. Colton (40) Vice Managing Director, Value Equities, Phoenix Investment Counsel,
President Inc. (1997-present). Vice President, The Phoenix Edge Series Fund,
Phoenix Series Fund (1997-present) and Phoenix-Oakhurst Income &
Growth Fund (1998-present). Vice President/Senior Portfolio
Manager, American Century Investment Management (1987-1997).
Portfolio Manager, American Century/Benham Income & Growth Fund
(1990-1997). Portfolio Manager, American Century/Benham Equity
Growth Fund (1991-1996). Portfolio Manager, American
Century/Benham Utilities Income Fund (1993-1997).
Robert Driessen (52) Vice President and Vice President and Compliance Officer, Phoenix Investment
Assistant Secretary Partners, Ltd. (1999-present) and Phoenix Investment Counsel, Inc.
(1999-present). Vice President, Phoenix Funds, Phoenix-Aberdeen
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1999-present). Compliance Officer (2000-present) and Associate
Compliance Officer (1999), PXP Securities Corporation. Vice
President, Risk Management Liaison, Bank of America (1996-1999).
Vice president, Securities Compliance, The Prudential Insurance
Company of America (1993-1996). Branch Chief/Financial Analyst,
Securities and Exchange Commission, Division of Investment
Management (1972-1993).
Christopher J. Kelleher (44) Vice Managing Director, Fixed Income (1996-present), Vice President
President (1991-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Series Fund (1989-present), The Phoenix Edge Series
Fund (1989-present), Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present).Phoenix Income and Growth Fund (1998-present)and
Phoenix Strategic Allocation Fund (1998-present).Portfolio Manager,
Public Bonds, Phoenix Home Life Insurance Company (1991-1995).
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -------------------------
<S> <C> <C>
William R. Moyer (55) Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial Officer
P.O. Box 2200 (1995-1999), Phoenix Investment Partners, Ltd. (1995-present).
Enfield, CT 06083-2200 Senior Vice President (1990-present), Chief Financial Officer
(1996-present), Finance (until 1996), and Treasurer (1998-present
and 1994-1996), Phoenix Equity Planning Corporation. Director
(1998-present), Senior Vice President (1990-present), Chief
Financial Officer (1996-present) and Treasurer (1994-present),
Phoenix Investment Counsel, Inc. Treasurer (1999-present), Vice
President and Chief Financial Officer, Duff & Phelps Investment
Management Co. (1996-1999). Vice President, Phoenix Funds
(1990-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix Aberdeen Series Fund (1996-present).
Vice President, Investment Products Finance, Phoenix Home Life
Mutual Insurance Company (1990-1995). Senior Vice President, Chief
Financial Officer, W.S. Griffith & Co., Inc. (1992-1995) and
Townsend Financial Advisers, Inc. (1993-1995).
Nancy G. Curtiss (47) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Aberdeen Series Fund
(1996-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Phoenix Home Life Insurance
Company (1987-1994).
G. Jeffrey Bohne (52) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Vice President, Transfer Agent
Greenfield, MA 01301 Operations (1993-1996), Senior Vice President (1999-present), Vice
President (1996-1999), Mutual Fund Customer Service, Phoenix
Equity Planning Corporation. Secretary/Clerk, Phoenix Funds
(1993-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-present).
Vice President, Home Life of New York Insurance Company
(1984-1992).
</TABLE>
------------------------
*Indicates that the Trustee is an "interested person" of the Fund within the
meaning of the definition set forth in Sections 2(a)(19) of the Investment
Company Act of 1940.
For services rendered to the Fund for the fiscal year ended April 30, 2000,
the Trustees received aggregate remuneration of $____. For services on the
Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is not a
full-time employee of the Adviser or any of its affiliates currently receives a
retainer at the annual rate of $40,000 and a fee of $25,000 per joint meeting of
the Boards. Each Trustee who serves on the Audit Committee receives a retainer
at the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee
meeting attended. Each Trustee who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of Trustees.
Costs are allocated equally to each of the Funds within the Fund Complex. The
foregoing fees do not include reimbursement of expenses incurred in connection
with meeting attendance. Officers and employees of the Adviser who are not
interested persons are compensated for their services by the Adviser and receive
no compensation from the Fund.
26
<PAGE>
For the Fund's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (14 FUNDS)
NAME FROM FUND OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
<S> <C> <C> <C> <C>
Robert Chesek $* $
E. Virgil Conway+ $ $
Harry Dalzell-Payne+ $ $
Francis E. Jeffries $* $
Leroy Keith, Jr. $ None None $
Philip R. McLoughlin+ $ for any for any $
Everett L. Morris+ $ Trustee Trustee $
James M. Oates+ $ $
Herbert Roth, Jr.+ $ $
Richard E. Segerson $* $
Lowell P. Weicker, Jr. $ $
</TABLE>
------------------------
*This compensation (and the earnings thereon) will be deferred pursuant to the
Directors' Deferred Compensation Plan. At June 30, 2000, the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts deferred) accrued for Messrs. Chesek, Jeffries, Morris, Roth
and Segerson was $____, $____, $____, $____ and $____, respectively. At
present, by agreement among the Fund, the Distributor and the electing
director, director fees that are deferred are paid by the Fund to the
Distributor. The liability for the deferred compensation obligation appears
only as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
On ____, 2000, the Trustees and officers as a group owned less than 1% of the
outstanding shares of the Fund.
PRINCIPAL SHAREHOLDERS
The following table set forth information as of ____, 2000 with respect to
each person who owns of record, or is known by the Fund to own of record, or
beneficially own 5% or more of any Class of the Fund's equity securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER CLASS NUMBER OF SHARES PERCENT OF CLASS
------------------- ----- ---------------- ----------------
<S> <C>
Merrill Lynch Pierce Class B
Fenner & Smith
4800 Deer Lake Dr. E.
Jacksonville, FL 32246
</TABLE>
ADDITIONAL INFORMATION
CAPITAL STOCK
The Fund was originally organized under Massachusetts law in 1986 as a
business trust. On August 29, 1986, the Fund purchased all of the assets and
assumed all of the liabilities of the Total Income Series of National Securities
Funds. National Securities Funds, as such, had been in existence since 1940. The
Fund is continuing the business of the Total Income Series. On December 15,
1989, the Fund purchased all of the assets and assumed all of the liabilities of
the National Premium Income Fund. On June 30, 1993, the Trustees voted to change
the name of the Fund to "Phoenix Income and Growth Fund" to reflect the purchase
of the former adviser by Phoenix Home Life and the affiliation with the other
Phoenix Funds. On August 25, 1999, the Trustees voted to change the name of the
fund to "Phoenix-Oakhurst Income & Growth Fund." The Fund was reorganized as a
Delaware business trust in August 2000.
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in one Fund
which has different classes. Holders of shares of the Fund have equal rights
with regard to voting, redemptions, dividends, distributions, and liquidations
with respect to the Fund. Shareholders vote on the election of Trustees. On
matters affecting an individual class (such as approval of matters relating to a
Plan of Distribution for a particular class of shares), a separate vote of that
Class is required. The Trust does not hold regular meetings of shareholders. The
Trustees will call a meeting when at least 10% of the outstanding shares so
request in writing. If the Trustees fail to call a
27
<PAGE>
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of the Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to the Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
the Fund or class. The underlying assets of the Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to the Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular class will be allocated by or under the direction of the Trustees as
they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. The Declaration of Trust provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability, which
is considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
FINANCIAL STATEMENTS
The Financial Statements for the Fund's fiscal year ended April 30, 2000,
appearing in the Fund's 2000 Annual Report to Shareholders, are incorporated
herein by reference.
REPORTS TO SHAREHOLDERS
The fiscal year of the Fund ends on April 30th. The Fund will send financial
statements to its shareholders at least semi-annually. An annual report
containing financial statements audited by the Fund's independent accountants,
will be sent to shareholders each year, and is available without charge upon
request.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Fund. PricewaterhouseCoopers LLP audits
the Fund's annual financial statements and expresses an opinion thereon.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company ("State Street"), P.O. Box 351, Boston, MA
02101, serves as custodian of the Fund's assets.
Equity Planning, 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, CT
06083-2200, acts as Transfer Agent for the Fund (the "Transfer Agent"). As
compensation, Equity Planning receives a fee equivalent to $17.95 for each
designated shareholder account plus out-of-pocket expenses. Transfer Agent fees
are also utilized to offset costs and fees paid to subtransfer agents employed
by Equity Planning. State Street Bank and Trust Company serves as a subtransfer
agent pursuant to a Subtransfer Agency Agreement.
28
<PAGE>
APPENDIX
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA-This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA-Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A-Bonds rated A have
a strong capacity to pay principal and interest, although they are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay principal
and interest. Whereas they normally exhibit protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay principal and interest for bonds in this category than
for bonds in the A category.
BB-B-CCC-CC-Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
D-Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
MOODY'S INVESTORS SERVICE, INC.
Aaa-Bonds
which are rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt edge."
Interest payments are protected by a large or an exceptionally stable margin and
principal is secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A-Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade obligations; i.e.,
they are neither highly protective nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Note: Those bonds in the Aa, A and Baa groups which Moody's believes possess
the strongest investment attributes are designated by the symbols Aa1, A1
and Baa1.
Ba-Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe
guarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal and
interest.
29
<PAGE>
PHOENIX-INCOME AND GROWTH FUND
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a.1 Declaration of Trust of the Registrant, as amended prior to 1994,
previously filed, filed via EDGAR as Exhibit 1.1 with
Post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
a.2 Amendment to Declaration of Trust of the Registrant, dated May 24,
1994, filed with Post-Effective Amendment No. 10 on August 25, 1994
filed via EDGAR as Exhibit 2 with Post-Effective Amendment No. 14
on August 21, 1998 and herein incorporated by reference.
b. By-laws of the Registrant, previously filed and filed via EDGAR as
Exhibit 2 with Post-Effective Amendment No. 14 on August 21, 1998
and as Exhibit 2, incorporated by reference.
c. Reference is made to Article VI of Registrant's Declaration of
Trust, as amended, referred to in Exhibit a.1. and a.2.
d.1 Management Agreement between Registrant and National Securities &
Research Corporation, dated May 14, 1993 and assigned to Phoenix
Investment Counsel, Inc. effective June 1, 1998, previously filed,
filed via EDGAR as Exhibit 5.1 with Post-Effective Amendment No. 14
on August 21, 1998 and herein incorporated by reference.
d.2 Amendment to Management Agreement between Registrant and National
Securities & Research Corporation, dated January 1, 1994 and
assigned to Phoenix Investment Counsel, Inc. effective June 1,
1998, filed with Post-Effective Amendment No. 10 and August 25,
1994 filed via EDGAR as Exhibit 5.2 with Post-Effective Amendment
No. 14 on August 21, 1998 and herein incorporated by reference.
e.1 Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation ("Equity Planning") dated November 19, 1997
filed via EDGAR as Exhibit 6.1 with Post-Effective Amendment No. 14
on August 21, 1998 and herein incorporated by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning Corporation
and dealers filed via EDGAR as Exhibit 6.2 with Post-Effective
Amendment No. 14 on August 21, 1998 and herein incorporated by
reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement filed
via EDGAR as Exhibit 6.3 with Post-Effective Amendment No. 14 on
August 21, 1998 and herein incorporated by reference.
e.4 Form of Supplement of Phoenix Family of Funds Sales Agreement filed
via EDGAR as Exhibit 6.3 with Post-Effective Amendment No. 14 on
August 21, 1998 and herein incorporated by reference.
f. None.
g. Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997, filed via EDGAR as Exhibit 8 with
Post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
h.1 Transfer Agency and Service Agreement between Registrant and Equity
Planning dated June 1, 1994, filed with Post-Effective Amendment
No. 10 on August 25, 1994, filed via EDGAR as Exhibit 9.1 with
Post-Effective Amendment No. 13 on August 26, 1997 and herein
incorporated by reference.
C-1
<PAGE>
h.2 Sub-transfer Agent Agreement between Equity Planning and State
Street Bank and Trust company dated June 1, 1994 filed via EDGAR as
Exhibit 9.2 with Post-Effective Amendment No. 14 on August 21,
1998.
h.3 Amended and Restated Financial Agent Agreement between Registrant
and Phoenix Equity Planning Corporation dated November 19, 1997 and
filed via EDGAR as Exhibit 9.3 with Post-Effective Amendment No. 14
on August 21, 1998 and herein incorporated by reference.
h.4 First Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning corporation dated
March 23, 1998 and filed via EDGAR as Exhibit 9.4 with
Post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
h.5 Second Amendment to Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning corporation dated
July 31, 1998 and filed via EDGAR as Exhibit 9.5 with
Post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
i. Opinion as to legality of the shares previously filed, and herein
incorporated by reference.
j. Consent of Independent Accounts.
k. Not Applicable.
l. None.
m.1 Amended and Restated Distribution Plan for Class A Shares effective
August 27, 1997, filed via EDGAR as Exhibit 15.1 with
post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
m.2 Amended and Restated Distribution Plan for Class B Shares effective
August 27, 1997, filed via EDGAR as Exhibit 15.2 with
Post-Effective Amendment No. 14 on August 21, 1998 and herein
incorporated by reference.
n. Financial Data Schedule.
o.1.* Amended and Restated Rule 18f-3 Multi-Class Distribution Plan,
effective May 1, 1999, filed via EDGAR herewith.
o.2.* First Amendment to the Amended and Restated Plan Pursuant to Rule
18f-3, dated February 24, 2000 filed via EDGAR herewith.
p.* Codes of Ethics of the Fund, the Adviser and the Distributor.
q.* Powers of Attorney for Herbert Roth, Jr. and Calvin J. Pedersen
filed via EDGAR with Post-Effective Amendment No. 16 on June 28,
1999 and herein incorporated by reference. Powers of attorney for
each of the other Trustees, filed via EDGAR herewith.
--------------
*Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
No person is controlled by, or under common control, with the Fund.
C-2
<PAGE>
ITEM 25. INDEMNIFICATION
Registrant's indemnification provision is set forth in Post-Effective
Amendment No. 9 filed with the Securities and Exchange Commission on June
30,1993, and is incorporated herein by reference.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Fund" in the Prospectus and "Services of the
Adviser" and "Management of the Fund" of the Statement of Additional Information
in which is included in this Post-Effective Amendment. For information as to the
business, profession, vocation or employment of a substantial nature of
directors and officers of Phoenix Investment Counsel, Inc., the Adviser,
reference is made to the Adviser's current Form ADV (SEC File No. 801-5995)
filed under the Investment Advisers Act of 1940 and incorporated herein by
reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Equity Planning also serves as the principal underwriter for the
following other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities
Fund, Phoenix Duff & Phelps Institutional Mutual Funds,
Phoenix-Engemann Funds, Phoenix Equity Series Fund, Phoenix-Euclid
Funds, Phoenix-Goodwin California Tax Exempt Bonds, Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc., Phoenix-Goodwin Multi-Sector
Short Term Bond Fund, Phoenix Investment Trust 97, Phoenix
Multi-Portfolio Fund, Phoenix-Oakhurst Strategic Allocation Fund. Inc.,
Phoenix-Seneca Funds, Phoenix Series Fund, Phoenix Strategic Equity
Series Fund, Phoenix-Zweig Trust, Phoenix Home Life Variable Universal
Life Account, Phoenix Home Life Variable Accumulation Account, PHL
Variable Accumulation Account, Phoenix Life and Annuity Variable
Universal Life Account and PHL Variable Separate Account MVA1.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES POSITION AND OFFICES WITH
BUSINESS ADDRESS WITH DISTRIBUTOR REGISTRANT
---------------- ---------------- ----------
<S> <C> <C>
Michael E. Haylon Director Executive
56 Prospect Street Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Trustee and President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Executive Vice Vice President
100 Bright Meadow Blvd. President, Chief Financial
P.O. Box 2200 Officer and Treasurer
Enfield, CT 06083-2200
John F. Sharry President, Executive
56 Prospect Street Retail Division Vice President
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES POSITION AND OFFICE
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Barry Mandinach Executive Vice President, None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President, None
100 Bright Meadow Blvd. Chief Sales Officers,
P.O. Box 2200 Retail Division
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President Secretary
101 Munson Street
P.O. Box 810
Greenfield, MA 01302-0810
Robert S. Dreissen Vice President, Compliance Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect St. Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other documents
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and the Rules promulgated thereunder include Registrant's investment adviser,
Phoenix Investment Counsel, Inc.; Registrant's financial agent, transfer agent
and principal underwriter, Phoenix Equity Planning Corporation; Registrant's
dividend disbursing agent and custodian, State Street Bank and Trust Company.
The address of the Secretary of the Trust is 101 Munson Street, Greenfield,
Massachusetts 01301; the address of Phoenix Investment Counsel, Inc. is 56
Prospect Street, Hartford, Connecticut 06115-2520; the address of Phoenix Equity
Planning Corporation is 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200; the address of the dividend disbursing agent is P.O. Box
8301, Boston, Massachusetts 02266-8301, Attention: Phoenix Funds, and the
address of the custodian is P.O. Box 351, Boston, Massachusetts 02101.
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Fund has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Hartford, and State of Connecticut on the 8th day of June, 2000.
PHOENIX-OAKHURST INCOME & GROWTH FUND
ATTEST: /S/ PAMELA S. SINOFSKY BY: /S/ PHILIP R. MCLOUGHLIN
---------------------- ----------------------
PAMELA S. SINOFSKY PHILIP R. MCLOUGHLIN, PRESIDENT
ASSISTANT SECRETARY
Pursuant to the requirements of the Securities Act, this amendment to the
registration statement has been signed below by the following persons in the
capacities indicated, on this 8th day of June, 2000:
SIGNATURE TITLE
--------- -----
Trustee
----------------------------------------------
Robert Chesek*
Trustee
----------------------------------------------
E. Virgil Conway*
Treasurer (principal
/s/ Nancy G. Curtiss financial and
---------------------------------------------- accounting officer)
Nancy G. Curtiss
Trustee
----------------------------------------------
Harry Dalzell-Payne*
Trustee
----------------------------------------------
Francis E. Jeffries*
Trustee
----------------------------------------------
Leroy Keith, Jr.*
Trustee and President
/s/ Philip R. McLoughlin (principal executive
---------------------------------------------- officer)
Philip R. McLoughlin
Trustee
----------------------------------------------
Everett L. Morris*
Trustee
----------------------------------------------
James M. Oates*
Trustee
----------------------------------------------
Calvin J. Pedersen*
Trustee
----------------------------------------------
Herbert Roth, Jr.*
Trustee
----------------------------------------------
Richard E. Segerson*
Trustee
----------------------------------------------
Lowell P. Weicker, Jr.*
*By /s/Philip R. McLoughlin
-------------------------------------------------------------
*Philip R. McLoughlin pursuant to powers of attorney.
S-1
