As filed with the Securities and Exchange Commission on
Registration Nos. 33-6931
811-4727
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [x]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 13
(Check appropriate box or boxes)
Phoenix Strategic Equity Series Fund
(Exact Name of Registrant as Specified in Charter)
101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)
c/o Phoenix Equity Planning Corporation--Shareholder Services
(800) 243-1574
(Registrant's Telephone Number, including Area Code)
Philip R. McLoughlin
Phoenix Equity Opportunities Fund
c/o Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
(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)(i)
[ ] on pursuant to paragraph (a)(i)
[x] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has registered an indefinite number of shares under the Securities
Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
A Rule 24f-2 Notice for the fiscal year ended on April 30, 1995 was filed by
Registrant with the Commission on June 27, 1995.
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
Cross Reference Sheet Pursuant to Rule 404
PART A
Part I of Form N-1A Prospectus Caption
--------------------------------- -------------------------------
1. Cover Page Cover Page
2. Synopsis Introduction; Fund Expenses
3. Condensed Financial Financial Highlights
Information
4. General Description of Investment Objective and
Registrant Policies
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Dividends, Distributions and
Securities Taxes; Additional
Information; Investor
Accounts and Services
Available
7. Purchase of Securities Being How to Buy Shares; The
Offered Underwriter; How to Obtain
Reduced Sales Charges; Net
Asset Value; Investor
Accounts and Services
Available
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceeding Not Applicable
PART B
Statement of Additional
Part I of Form N-1A Information
--------------------------------- -------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Cover Page; The Fund
13. Investment Objectives and Cover Page; Investment
Policies Objective; Fundamental
Policies; Other Policies
14. Management of the Fund Services of the Advisor;
Trustees and Officers
15. Control Persons and Not Applicable
Principal Holders of
Securities
16. Investment Advisory & Other Trustees and Officers
Services
17. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
18. Capital Stock and Other Not Applicable
Securities
19. Purchase, Redemption and How to Buy Shares;
Pricing of Securities Alternative Purchase
Arrangements; Exchange
Privileges; Redemption of
Shares; Net Asset Value;
Reinstatement Privilege
20. Tax Status Dividends, Distributions and
Taxes
21. Underwriter Plans of Distribution
22. Calculations of Performance Performance Data
Data
23. Financial Statements Financial Statements
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
September 30, 1995
Phoenix Strategic Equity Series Fund (the "Fund") is an open-end management
investment company whose shares are offered in three series. Each series
represents an investment in a separate diversified fund with its own
investment objectives and policies designed to meet its specific investment
goals. There can be no assurance that any Series will acheive its objective.
Phoenix Equity Opportunities Fund (the "Equity Opportunities Series") seeks,
as its investment objective, long-term growth of capital from investment in a
diversified group of stocks or securities convertible into stocks. This
Series intends to invest in stock of all types and is not restricted as to
any specific industry. Any income derived from investments will be
incidental.
Phoenix Strategic Theme Fund ("Theme Series") seeks, as its investment
objective, long-term appreciation of capital. This Series seeks to identify
securities benefiting from long-term trends present in the United States and
abroad. The Series intends to invest primarily in common stocks believed by
the Adviser to have substantial potential for capital growth. Since many
trends may be early in their development and no history of industry growth
patterns is available, securities owned may present a high degree of risk.
Phoenix Small Company Growth Fund ("Small Company Growth Series") seeks, as
its investment objective, long-term growth of capital by investing in a
diversified portfolio of securities, primarily common stock, of relatively
small companies which the Adviser believes have long-term investment
potential. Companies are selected by management on the basis of their
long-term potential for expanding their revenue, profit and earnings per
share base through a variety of methods including the growth of existing
products, introduction of new products, improved operating efficiencies,
market share gains, penetration of new markets or acquisitions. Current
income is not a factor in the selection of securities. The Series is intended
to provide an opportunity for investors who are not ordinarily in a position
to perform the specialized type of research or analysis involved in investing
in small and emerging growth companies and to invest sufficient assets in
such companies to provide wide diversification.
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must
not be relied upon. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
state in which or to any person to whom it is unlawful to make such offer.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Investors should read and
retain this Prospectus for future reference. Additional information about the
Fund is contained in the Statement of Additional Information, dated September
30, 1995, which has been filed with the Securities and Exchange Commission
(the "Commission") and is available at no charge by calling (800) 243-4361.
The Statement of Additional Information is incorporated herein by reference.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, credit union, or affiliated entity, and are not
federally insured or otherwise protected by the Federal Deposit Insurance
Corporation (FDIC), the Federal Reserve Board, or any other agency, and
involve investment risk, including possible loss of principal.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS/EXCHANGES: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY) (800) 243-1926
<PAGE>
TABLE OF CONTENTS
Page
-------
INTRODUCTION ................................. 3
FUND EXPENSES ................................ 5
FINANCIAL HIGHLIGHTS ......................... 6
PERFORMANCE INFORMATION ..................... 8
INVESTMENT OBJECTIVE AND POLICIES ........... 9
EQUITY OPPORTUNITIES SERIES ............... 9
THEME SERIES ............................... 9
SMALL COMPANY GROWTH SERIES ............... 10
INVESTMENT TECHNIQUES ........................ 11
INVESTMENT RESTRICTIONS ..................... 17
PORTFOLIO TURNOVER ........................... 17
MANAGEMENT OF THE FUND ...................... 18
DISTRIBUTION PLANS ........................... 19
HOW TO BUY SHARES ............................ 21
INVESTOR ACCOUNTS AND SERVICES AVAILABLE ... 26
NET ASSET VALUE .............................. 29
HOW TO REDEEM SHARES ......................... 30
DIVIDENDS, DISTRIBUTIONS AND TAXES ......... 31
ADDITIONAL INFORMATION ...................... 33
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of Phoenix
Strategic Equity Series Fund (the "Fund"). The Fund is a diversified,
open-end management investment company established as a business trust under
the laws of Massachusetts (the "Declaration of Trust"). The Declaration of
Trust authorizes the assets and shares of the Fund to be divided into series
(the "Series"). Each Series has a different investment objective and invests
primarily in certain types of securities, as described on the cover page of
this Prospectus, and is designed to meet different investment needs. In many
respects, each Series operates as if it were a separate mutual fund. The
shares of the Fund are presently issued in three Series described in this
Prospectus.
The Investment Advisers
The investment adviser for the Theme Series and Small Company Growth Series
is Phoenix Investment Counsel, Inc. ("PIC" or the "Adviser"). National
Securities & Research Corporation (the "Adviser" or "National") is the
investment adviser of the Equity Opportunities Series. The Advisers are
wholly-owned indirect subsidiaries of Phoenix Home Life Mutual Insurance
Company.
See "Management of the Fund" for a description of the Investment Advisory
Agreements, management fees and each investment adviser's undertaking to
reimburse the Fund for certain expenses.
Distributor and Distribution Plans
Phoenix Equity Planning Corporation ("Equity Planning" or Distributor"),
serves as National Distributor of the Fund's shares. See "Distribution Plans"
and the Statement of Additional Information. Equity Planning also acts as
financial agent of the Fund and as such receives a quarterly fee based on the
average of the aggregate daily net asset values of the Fund at an annual rate
of $300 per $1 million. Equity Planning also serves as the Fund's transfer
agent.
The Fund has adopted distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"). Pursuant to the distribution
plan adopted for Class A Shares, the Fund shall reimburse the Underwriter up
to a maximum annual rate of 0.30% of the Fund's average daily Class A Share
net assets for distribution expenditures incurred in connection with the sale
and promotion of Class A Shares and for furnishing shareholder services.
Although the Class A Plan provides for a 0.30% distribution fee, the
Underwriter has voluntarily agreed to limit the Rule 12b-1 fee charged to
Class A Shares to 0.25% for the fiscal year 1996. Pursuant to the
distribution plan adopted for Class B Shares, the Fund shall reimburse the
Underwriter up to a maximum annual rate of 1.00% of the Fund's average daily
Class B Share net assets for distribution expenditures incurred in connection
with the sale and promotion of Class B Shares and for furnishing shareholder
services (the "Service Fee"). See "Distribution Plans."
Purchase of Shares
Each Series is authorized to offer two classes of shares of beneficial
interest on a continuous basis which may be purchased 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 (i) at the time of the purchase (the "Class
A Shares") or (ii) on a contingent deferred basis (the "Class B Shares").
Class A Shares of each Series are offered to the public at the next
determined net asset value after receipt of the order by State Street Bank
and Trust Company (see "Net Asset Value") plus a maximum sales charge of
4.75% of the offering price (4.99% of the amount invested) on single
purchases of less than $50,000. The sales charge for Class A Shares is
reduced on a graduated scale on single purchases of $50,000 or more and
subject to other conditions stated below. See "How to Buy Shares" and "How to
Obtain Reduced Sales Charges on Class A Shares".
Class B Shares of each Series are offered to the public at the next
determined net asset value after receipt of an order by State Street Bank and
Trust Company, with no sales charge. Class B Shares are subject to a sales
charge if they are redeemed within five years of purchase. See "How to Buy
Shares" and "Deferred Sales Charge Alternative--Class B Shares."
Each share of a Series, whether Class A or Class B, represents an identical
interest in the investment portfolio of the Series and has the same rights,
except that Class B Shares bear the cost of the higher distribution fees and
certain other expenses resulting from the deferred sales charge arrangements,
which cause the Class B Shares to have a higher expense ratio and to pay
lower dividends than Class A Shares. Class B Shares automatically convert to
Class A Shares eight
<PAGE>
years after the end of the calendar month in which the shareholder's order to
purchase was accepted, in the circumstances and subject to the qualifications
described in this Prospectus. The purpose of the conversion feature is to
relieve the holders of Class B Shares that have been outstanding for a period
of time sufficient for 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. See "How to Buy Shares".
Minimum Initial and Subsequent Investments
To purchase shares of any Series, the minimum initial investment is $500 ($25
if using the bank draft investment program designated "Investo-Matic") and
the minimum subsequent investment is $25. Exceptions to the minimum and
subsequent investment amounts are available under certain circumstances. See
"How to Buy Shares."
Redemption Price
Class A Shares of each Series may be redeemed at any time at the net asset
value per share next computed after receipt of a redemption request by Equity
Planning, the Fund's transfer agent. Class B shareholders redeeming shares
within five years of the date of purchase will normally be assessed a
contingent deferred sales charge. See "How to Redeem Shares."
Risk Factors
There can be no assurances that any Series will achieve its investment
objectives. As a result of each Series' substantial investment in the stock
market, the net asset values of Fund shares will fluctuate in response to
changes in market and economic conditions, as well as the financial condition
and prospects of issuers in which each Series invests.
The Theme Series utilizes an approach to equity investing which attempts to
identify and exploit prospective marketplace themes prior to saturation.
Investments based upon strategic and/or tactical theme forecasts may not
necessarily positively correlate with future markets. The Series may also
focus investments in similar or related industries thereby potentially
increasing overall exposure to risk.
Small capitalization companies typically are subject to a greater degree of
change in earnings and business prospects than are larger, more established
companies. In addition, securities of small capitalization companies are
traded in lower volume than those issued by larger companies and are more
volatile than those of larger companies. Accordingly, the Small Company
Series may be subject to greater investment risk than that assumed by mutual
funds investing in a broader range of equities.
The risks of each Series should be reviewed and are set forth in more detail
in the "Investment Objectives and Policies" section of this Prospectus.
<PAGE>
FUND EXPENSES
The following table illustrates all fees and expenses a shareholder will
incur. The fees and expenses set forth in the table (except for the Theme
Series and Small Company Growth Series Class A and Class B Shares) are for
the fiscal year ended April 30, 1995. The expenses and fees for the Theme
Series and Small Company Series have been pro-rated to reflect a full year of
operations.
<TABLE>
<CAPTION>
Equity Opportunities
Series Theme Series (b) Small Company Series (b)
------------------------- ------------------------- ---------------------------
Class A Class B Class A Class B Class A Class B
Shares Shares Shares Shares Shares Shares
(Pro-Forma) (Pro-Forma)
<S> <C> <C> <C> <C> <C> <C>
Shareholder
Transaction
Expenses
Maximum Sales Load
Imposed on
Purchases (as a
percentage of
offering price) 4.75% None 4.75% None 4.75% None
Maximum Sales Load
Imposed on
Reinvested
Dividends None None None None None None
Deferred Sales Load None 5% during None 5% during None 5% during the
(as a percentage the first the first first year,
of original year, year, decreasing 1%
purchase price or decreasing decreasing annually to
redemption 1% annually 1% annually 2% during the
proceeds, as to 2% to 2% fourth and
applicable) during the during the fifth years;
fourth and fourth and thereafter
fifth fifth decreasing to
years; years; 0% after the
thereafter thereafter fifth year
decreasing decreasing
to 0% after to 0% after
the fifth the fifth
year year
Redemption Fee None None None None None None
Exchange Fee None None None None None None
Annual Fund
Operating Expenses
(as a percentage
of average net
assets for the
fiscal year ended
April 30, 1995)
Management Fees
Advisory Fees 0.70% 0.70% 0.75% 0.75% 0.75% 0.75%
12b-1 Fees (a) 0.25% 1.00% 0.25% 1.00% 0.25% 1.00%
Other Expenses 0.37% 0.37% 2.97% 2.97% 3.77% 3.77%
Expense
Reimbursement (2.57%)(c) (2.57%)(d) (3.27%)(e) (3.27%)(f)
Total Fund
Operating Expenses
(After Expense
Reimbursement) 1.32% 2.07% 1.40% 2.15% 1.50% 2.25 %
</TABLE>
(a) "Rule 12b-1 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").
While the Class A Share Distribution Plans continue to provide for a 0.30%
distribution fee, the Underwriter has voluntarily agreed to limit the fee to
0.25% for the fiscal year 1996. Rule 12b-1 fees would have been % absent
Underwriter's waiver.
(b) The Theme Series and the Small Company Growth Series were approved by the
Trustees on May 25, 1995. Accordingly, expenses for those Series have been
projected for the fiscal period ending April 30, 1996.
(c) Phoenix Investment Counsel, Inc. has agreed to reimburse the Theme
Series' operating expenses related to Class A Shares for the amount, if any,
by which such operating expenses for the fiscal year ended April 30, 1996
exceed 1.40% of the average net assets of such Series. The total operating
expenses for the Class of this Series is estimated to be 3.97% had Phoenix
Investment Counsel, Inc. not made such reimbursement.
(d) Phoenix Investment Counsel, Inc. has agreed to reimburse the Theme
Series' operating expenses related to Class B Shares for the amount, if any,
by which such operating expenses for the fiscal year ended April 30, 1996
exceed 2.15% of the average net assets of such Series. The total operating
expenses for the Class of this Series is estimated to be 4.72% had Phoenix
Investment Counsel, Inc. not made such reimbursement.
(e) Phoenix Investment Counsel, Inc. has agreed to reimburse the Small
Company Growth Series' operating expenses related to Class A Shares for the
amount, if any, by which such operating expenses for the fiscal year ended
April 30, 1996 exceed 1.50% of the average net assets of such Series. The
total operating expenses for the Class of this Series is estimated to be
4.77% had Phoenix Investment Counsel, Inc. not made such reimbursement.
(f) Phoenix Investment Counsel, Inc. has agreed to reimburse the Small
Company Growth Series' operating expenses related to Class B Shares for the
amount, if any, by which such operating expenses for the fiscal year ended
April 30, 1996 exceed 2.25% of the average net assets of such Series. The
total operating expenses for the Class of this Series is estimated to be
5.52% had Phoenix Investment Counsel, Inc. not made such reimbursement.
<PAGE>
Cumulative Expenses
Paid for the Period
1 3 5 10
Example* year years years years
- --------------------------------------- ---- ----- ----- -------
An investor would pay the following
expenses on a hypothetical $1,000
investment assuming (1) a 5% annual
return and (2) redemption at the end
of each time period.
Equity Opportunities Series (Class A
Shares) $60 $ 87 $116 $199
Equity Opportunities Series (Class B
Shares) $71 $ 95 $131 $221
Theme Series (Class A Shares) $61 $ 90
Theme Series (Class B Shares) $72 $ 97
Small Company Growth Series (Class A
Shares) $62 $ 93
Small Company Growth Series (Class B
Shares) $73 $100
An investor would pay the following
expenses on the same $1,000
investment assuming no redemption at
the end of each period:
Equity Opportunities Series (Class A
Shares) $60 $ 87 $116 $199
Equity Opportunities Series (Class B
Shares) $21 $ 65 $111 $221
Theme Series (Class A Shares) $61 $ 90
Theme Series (Class B Shares) $22 $ 67
Small Company Growth Series (Class A
Shares) $62 $ 93
Small Company Growth Series (Class B
Shares) $23 $ 70
*The purpose of the table above is to help the investor understand the
various costs and expenses that the investor will bear directly or
indirectly. The example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
See "Management of the Fund", "Distribution Plans" and "How to Buy Shares."
FINANCIAL HIGHLIGHTS
The following table sets forth certain financial information for the
respective fiscal years of the Equity Opportunities Series. The financial
information for the five years ended April 30, 1995 has been audited by Price
Waterhouse LLP, independent accountants. Financial statements and notes
thereto are incorporated by reference in the Statement of Additional
Information. The Statement of Additional Information and the Fund's most
recent Annual Report (containing the report of independent accountants and
additional information relating to Fund performance) are available at no
charge upon request by calling (800) 243-4361.
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Phoenix Equity Opportunities Series f/k/a Phoenix Equity Opportunities Fund
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------
Year Ended April 30
1995 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 7.31 $ 9.64 $ 8.59 $ 8.36 $ 7.61 $ 8.31
Income from
investment
operations
Net investment
income 0.04 0.05 0.06 0.11 0.17 0.25
Net realized and
unrealized gains 0.58 0.57 1.34 0.71 0.74 0.38
------ ------ ------ ------ ------ -------
Total from
investment
operations 0.62 0.62 1.40 0.82 0.91 0.63
------ ------ ------ ------ ------ -------
Less distributions
Dividends from net
investment income (0.05) (0.05) (0.06) (0.12) (0.16) (0.27)
Distributions from
net realized
gains (0.48) (2.90) (0.29) (0.47) -- (1.06)
------ ------ ------ ------ ------ -------
Total
distributions (0.53) (2.95) (0.35) (0.59) (0.16) (1.33)
------ ------ ------ ------ ------ -------
Change in net asset
value 0.09 (2.33) 1.05 0.23 0.75 (0.70)
------ ------ ------ ------ ------ -------
Net asset value, end
of period $ 7.40 $ 7.31 $ 9.64 $ 8.59 $ 8.36 $ 7.61
====== ====== ====== ====== ====== =======
Total return((1)) 9.16% 4.99% 16.50% 10.30% 12.16% 7.08%
------ ------ ------ ------ ------ -------
Ratios/supplemental
data:
Net assets, end of
period (thousands) $179,666 $186,037 $215,570 $204,792 $213,147 $210,667
Ratio of averge net
assets of:
Expenses 1.32% 1.26% 1.35% 1.36% 1.41% 1.09%
Net investment
income (loss) 0.60% 0.57% 0.67% 1.29% 2.19% 2.88%
Portfolio turnover 358% 167% 31% 73% 95% 49%
</TABLE>
<TABLE>
<CAPTION>
CLASS A Class B
------------------------------------------------- --------------
From
Inception
Year Ended April 30 7/19/94 to
1989 1988 1987 1986 4/30/95
--------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 7.52 $ 9.72 $11.15 $ 8.52 $ 7.28
Income from
investment
operations
Net investment
income 0.29 0.27 0.37 0.44 0.00
Net realized and
unrealized gains 1.17 (0.24) 0.67 2.63 0.59
-------- -------- -------- -------- -------------
Total from
investment
operations 1.46 0.03 1.04 3.07 0.59
-------- -------- -------- -------- -------------
Less distributions
Dividends from net
investment income (0.30) (0.29) (0.44) (0.44) --
Distributions from
net realized
gains (0.37) (1.94) (2.03) -- (0.48)
-------- -------- -------- -------- -------------
Total
distributions (0.67) (2.23) (2.47) (0.44) (0.48)
-------- -------- -------- -------- -------------
Change in net asset
value (0.79) (2.20) (1.43) 2.63 0.11
-------- -------- -------- -------- -------------
Net asset value, end
of period $ 8.31 $ 7.52 $ 9.72 $11.15 $ 7.39
======== ======== ======== ======== =============
Total return((1)) 20.52% (1.72)% 10.92% 36.79% 8.69%((3))
-------- -------- -------- -------- -------------
Ratios/supplemental
data:
Net assets, end of
period (thousands) $230,066 $218,749 $262,459 $273,446 $525
Ratio of averge net
assets of:
Expenses 0.89% 0.74% 0.98% 0.85% 2.15%((2))
Net investment
income (loss) 3.75% 3.35% 3.56% 4.59% (0.06)%((2))
Portfolio turnover 59% 91% 142% 83% 358%
</TABLE>
((1)) Maximum sales charge is not reflected in total return calculation.
((2)) Annualized
((3)) Not annualized
<PAGE>
PERFORMANCE INFORMATION
The Fund may, from time to time, include its yield and total return in
advertisements or reports to shareholders or prospective investors. Both
yield and total return figures are computed separately for Class A and Class
B Shares of a Series in accordance with formulas specified by the Securities
and Exchange Commission and are based on historical earnings and are not
intended to indicate future performance.
The yield of the Series will be computed by dividing the Series' net
investment income over a 30-day period by an average value of invested assets
(using the average number of shares entitled to receive dividends and the
maximum offering price per share at the end of the period), all in accordance
with applicable regulatory requirements. Such amount will be compounded for
six months and then annualized for a twelve-month period to derive the
Series' yield.
Standardized quotations of average annual total return for Class A and Class
B Shares of a Series will be expressed in terms of the average annual
compound rate of return of a hypothetical investment in either Class A or
Class B Shares of a Series over a period of 1, 5 and 10 years (or up to the
life of the class of shares of a Series). Standardized total return
quotations 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
Shares, and assume that all dividends and distributions on Class A and Class
B Shares are reinvested when paid. It is expected that the performance of
Class A Shares will be better than that of Class B Shares as a result of
lower distribution fees paid by Class A Shares. The Fund may also quote
supplementally a rate of total return over different periods of time by means
of aggregate, average, and year-by-year or other types of total return
figures. In addition, the Fund may from time to time publish materials citing
historical volatility for shares of any Series.
Advertisements, sale literature and other communications may contain
information about any Series or Adviser's current investment strategies and
management style. Current strategies and style may change to allow any Series
to respond quickly to changing market and economic conditions. From time to
time the Fund may include specific portfolio holdings or industries in such
communications. To illustrate components of overall performance, the Fund may
separate its cumulative and average annual returns into income and capital
gains components; or cite separately as a return figure the equity or bond
portion of a portfolio; or compare a Series' equity or bond return figure to
well-known indices of market performance, including, but not limited to: the
S&P 500 Index, Dow Jones Industrial Average, First Boston High Yield Index
and Salomon Brothers Corporate and Government Bond Indices.
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 a Series' 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 a Series against certain widely acknowledged outside
standards or indices for stock and bond market performance, such as the
Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones Industrial
Average, Europe Australia Far East Index (EAFE), Consumer's Price Index,
Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P 500
is a commonly quoted market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 common stocks relative to the
base period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common
stocks of a few companies listed on the American Stock Exchange or traded
over the counter are included. The 500 companies represented include 400
industrial, 60 transportation and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange.
<PAGE>
Performance information for a Series reflects only the performance of a
hypothetical investment in Class A or Class B Shares of that Series during
the particular time period in which the calculations are based. Performance
information should be considered in light of the Series' investment
objectives and policies, characteristics and quality of its portfolio, and
the market conditions during the given time period, and should not be
considered as a representation of what may be achieved in the future. For a
description of the methods used to determine total return for each Series,
see the Statement of Additional Information.
The Fund's Annual Report, available upon request and without charge, contains
a discussion of the performance of each Series and a comparison of that
performance to a securities market index.
INVESTMENT OBJECTIVES
AND POLICIES
Each Series has a different investment objective and is designed to meet
different investment needs. The differences in objectives and policies among
the three Series can be expected to affect the investment return of each
Series and the degree of market and financial risk to which each Series is
subject. The investment objective of each Series is deemed to be a
fundamental policy which may not be changed without the approval of a vote of
a majority of the outstanding shares of that Series. Except as noted below a
Series' investment policies are not deemed to be fundamental and, therefore,
may be changed without shareholder approval. Since certain risks are inherent
in the ownership of any security, there can be no assurance that a Series
will achieve its investment objective. The investment policies of each Series
will also affect the rate of portfolio turnover. A high rate of portfolio
turnover generally involves correspondingly greater brokerage commissions,
which are paid directly by the Series.
Equity Opportunities Series
The investment objective of the Equity Opportunities Series is long-term
growth of capital from investment in a diversified group of stocks or
securities convertible into stocks. Any income derived from investments will
be incidental. The Series' investment objective is a fundamental policy which
may not be changed without the approval of the holders of a majority of the
outstanding shares of the Series.
At least 65% of the Series' total assets are, under normal circumstances,
invested in stocks. The Series may invest in stocks of all types and, subject
to investment restrictions, is not restricted as to any particular industry
in its investments. Securities are selected for their long-term investment
and it is generally not the policy of the Series to purchase securities for
trading purposes, although there may be a limited number of short-term
transactions. The Series will not invest in cash or cash equivalents in an
amount equal to or exceeding 10% of total net assets, unless the Adviser
deems it necessary to exceed this limit for temporary defensive purposes in
response to adverse economic or market conditions. During adverse economic or
market conditions, any part of the Series' assets may be held in cash or
money market instruments including U.S. Government obligations maturing
within one year from the date of purchase when the Adviser deems a temporary
defensive position to be prudent. However, when the Series' assets are in
cash or cash equivalents, it is not investing in securities selected to meet
the Series' investment objective.
Risk Considerations
Investments in common stocks for capital appreciation are subject to the
risks of changing economic and market conditions which may affect the
profitability and financial conditions of the companies in whose securities
the Series is invested and the Adviser's ability to anticipate those changes.
Since investments normally will consist primarily of securities considered to
have appreciation potential, the assets of the Series may be considered to be
subject to greater risks than would be involved if the Series invested in
securities which do not have such potential.
Additional discussion regarding risks involved in investing in the Series are
described in the "Investment Techniques" section below.
Theme Series
The Theme Series seeks as its investment objective long term appreciation of
capital through investing in securities of companies that the Adviser
believes are particularly well positioned to benefit from cultural,
demographic, regulatory, social or technological changes worldwide. Examples
of thematic investing would include investing in oil and gas exploration
companies during the energy shortage years of the late 1970's, owning
companies which benefited from lower inflation trends during the early
1980's, investing in
<PAGE>
companies acquiring cellular franchises in the late 1980's, and broad
ownership of technology companies during the 1990's.
The Adviser may concentrate investments (i.e., invest more than 25% of the
assets of the Series) in any particular industry(ies) or group(s) of
industries without shareholder approval. In determining when and whether to
concentrate in particular industries, the Adviser will establish strategic
(major changes affecting markets for prolonged periods) and tactical
(focused, short-term) investment themes. Investment themes shall generally
reflect megatrends which appear likely to drive stocks with similar
technologies and products or which embody broad social, economic, political
and technological considerations; offer substantial appreciation potential;
present a visionary idea or creative solution; and, exhibit some independence
from economic cycles. The Adviser may change its concentration or not
concentrate Series assets, once it has determined that any investment theme
has become saturated or fully exploited. The Adviser may invest in one or
more investment themes at any time.
The Adviser will seek to identify companies which, in addition to being
considered well positioned to benefit from investment themes selected by the
Adviser, are also believed to possess attributes such as, but not limited to,
good financial resources, satisfactory return on capital, enhanced industry
position and superior management skills.
The Theme Series may also invest up to % of its assets in preferred stocks,
investment grade bonds (Moody's Investors Service, Inc. rating Baa or higher
or BBB or higher by Standard & Poor's Ratings Group), convertible preferred
stocks and convertible debentures if in the judgment of the Adviser the
investment would further its investment objective. The Series may also engage
in certain options transactions and enter into financial futures contracts
and related options for hedging purposes. The Series may also invest up to
35% of its assets in the securities of foreign issuers. See "Investment
Techniques." Each security held will be monitored to determine whether it is
contributing to the basic objective of long-term appreciation of capital.
For temporary defensive purposes (as when market conditions for growth stocks
are adverse), investments may be made in fixed income securities with or
without warrants or conversion features. In addition, for such temporary
defensive purposes, the Series may pursue a policy of retaining cash or
investing part or all of its assets in cash equivalents. When the Series'
assets are held in cash or cash equivalents, it is not investing in
securities intended to meet the Series' investment objective.
Risk Considerations
There are no restrictions on the percentage of assets that the Series may
invest at any time in the securities of any one industry or group of
industries. To the extent that the Series does concentrate its investments in
a single industry or industries, it may be more susceptible to adverse
economic, political or regulatory developments than would be the case if it
invested in a broader spectrum of companies. In addition, the Series'
investments in common stocks of companies with limited history may result in
higher volatility in returns. Further, the successful effectuation of the
thematic investment strategy used by the Adviser is dependent upon the
Adviser's ability to anticipate emerging market trends, exploit such
investment opportunities and to thereafter divest of such securities upon
saturation. No assurances may be given that the investment strategies
utilized will necessarily positively correlate with any or all such
marketplace trends or that other, possibly more profitable investment trends
may hereafter exist.
The Series commenced operations on September 30, 1995 based upon an initial
capitalization of $ million provided by Phoenix Home Life. The ability of
the Series to raise additional capital for investment purposes may directly
effect the spectrum of portfolio holdings and performance.
Additional discussion regarding risks involved in investing in the Series are
described in the "Investment Techniques" section below.
Small Company Growth Series
The investment objective of the Small Company Growth Series is long-term
growth of capital from investment in a diversified group of stocks or
securities convertible into stocks. Any income derived from investments will
be incidental. Under normal circumstances, at least 65% of the Series' assets
will be invested in companies with a total market capitalization of $500
million or less at the time of acquisition. Up to 25% of the Series' total
assets may be invested in small capitalization foreign issuers.
Companies are selected on the basis of the Adviser's assessment of their
long-term potential to grow rapidly through
<PAGE>
a variety of factors including the expansion of existing product lines,
introduction of new products, geographic expansion, market share gains,
improved operating efficiency, or acquisitions. The Adviser seeks those small
and emerging companies which can show significant and sustained increases in
earnings over an extended period of time. A strong financial structure and
strong fundamental prospects will be sought, but given the limited operating
history of smaller companies, in certain situations some of the above factors
will not be available or remain to be proven. Full development of these
companies frequently takes time and, for this reason, the Series should be
considered as a long-term investment and not as a vehicle for seeking
short-term profits.
The Series may invest in stocks of all types and, subject to investment
restrictions, is not restricted as to industry in its investments. During
adverse economic or market conditions, any part of the Series' assets may be
held in cash or money market instruments including U.S. Government
obligations maturing within one year from the date of purchase when the
Adviser deems a temporary defensive position to be prudent. However, when the
Series' assets are held in cash or cash equivalents, it is not investing in
securities intended to meet the Series' investment objective.
Risk Considerations
Smaller capitalization companies are often companies with limited operating
history as a public company or companies within industries which have
recently emerged due to cultural, economic, regulatory or technological
developments. Given the limited operating history and rapidly changing
fundamental prospects, stock returns from smaller capitalization companies
are highly volatile. Smaller companies may at times find their ability to
raise capital impaired by their size or lack of operating history. Product
lines are often less diversified and subject to great competitive threat.
Smaller capitalization stocks are subject to varying patterns of trading
volume creating points in time when the securities are illiquid.
Other factors influencing the performance and volatility of small
capitalization stocks include industry developments within major markets,
major economic trends and developments and general market movements in both
the equity and fixed income markets.
Investment in equity securities of foreign small capitalization companies may
involve special risks, particularly from political and economic developments
abroad and differences between foreign and U.S. regulatory systems. Foreign
small capitalization companies may be less liquid and their prices more
volatile than comparable domestic securities issuers.
The Series commenced operations on September 30, 1995 based upon an initial
capitalization of $ million provided by Phoenix Home Life. The ability of
the Series to raise additional capital for investment purposes may directly
effect the spectrum of portfolio holdings and performance.
Additional discussion regarding risks involved in investing in the Series are
described in the "Investment Techniques" section below.
INVESTMENT TECHNIQUES
Investing in Convertible Securities
Each Series may invest in convertible securities. A convertible security is a
bond, debenture, note, preferred stock or other security that may be
converted into or exchanged for a prescribed amount of common stock of the
same or a different issuer within a particular period of time at a specified
price or formula. A convertible security entitles the holder to receive
interest generally paid or accrued on debt or the dividend paid on preferred
stock until the convertible security matures or is redeemed, converted or
exchanged. Convertible securities have several unique investment
characteristics such as (1) higher yields than common stocks, but lower
yields than comparable nonconvertible securities, (2) a lesser degree of
fluctuation in value than the underlying stock since they have fixed income
characteristics, and (3) the potential for capital appreciation if the market
price of the underlying common stock increases. Up to 5% of each of these
Series' assets may be invested in convertible securities that are rated below
investment grade (commonly referred to as "junk" securities). Such securities
present greater credit and market risks than investment grade securities. A
convertible security might be subject to redemption at the option of the
issuer at a price established in the convertible security's governing
instrument. If a convertible security held by each of these Series is called
for redemption, these Series may be required to permit the issuer to redeem
the security, convert it into the underlying common stock or sell it to a
third party.
Writing Covered Options
Each Series may, from time to time, write covered call option contracts as a
means of increasing the yield on the Series'
<PAGE>
portfolio and also as a means or providing limited protection against
decreases in the market value of the Series' portfolio. Options are
technically forms of "derivatives" in that their value is dependent upon
fluctuations in the value of other securities. Such contracts will be written
on securities in which the Series has authority to invest and on securities
indices listed on an organized national securities exchange. The aggregate
value of the securities underlying such call options will be limited to not
more than 25% of the net assets of the Series.
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 call option is "covered" if,
throughout the life of the option, (1) the Series owns the optioned
securities, (2) the Series maintains in a segregated account with its
Custodian, cash or cash equivalents or U.S. Government securities with a
value sufficient to meet its obligations under the call, or (3) if the Series
owns an offsetting call option. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. The
writer forgoes the opportunity to profit from any increase in the market
price of the underlying security above the exercise price except insofar as
the premium represents such a profit. The Series will write only call option
contracts when it is believed that the total return to the Series can be
increased through such premiums consistent with the Series' investment
objective.
The Series may also write covered call options on securities indices. Through
the writing of call index options the Series 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 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 such index call
options would be subject to the present limitation of covered call option
writing of not more than 25% of the net assets of the Series. 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 Series may purchase options to close out a position (i.e., enter into 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 Series' portfolio, the Series will 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 Series may wish to purchase a call option to hedge its
portfolio against an 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. No more than 5% of the
assets of the Series may be invested in the purchase of put and call options,
including index options.
Purchasing Call and Put Options, Warrants and Stock Rights. Equity
Opportunities Series may invest up to an aggregate of 5% (the Theme Series
and Small Company Growth Series may invest up to an aggregate of 15%) of its
total assets in exchange-traded or over-the-counter call and put options on
securities and securities indices and foreign currencies. Purchases of such
options may be made for the purpose of hedging against changes in the market
value of the underlying securities or foreign currencies or if in the opinion
of the Adviser, a hedging transaction is consistent with such Series'
investment objectives. These Series may sell a call option or a put option
which it has previously purchased prior to the purchase (in the case of a
call) or the sale (in the case of a put) of the underlying security or
foreign currency. Any such sale would result in a net gain or loss depending
on whether the amount received on the sale is more or less than the premium
and other transaction costs paid on the call or put which is sold. Purchasing
a call or put option involves the risk that these Series may lose the premium
it paid plus transaction costs.
Warrants and stock rights are almost identical to call options in their
nature, use and effect except that they are issued by the issuer of the
underlying security, rather than an option writer, and they generally have
longer expiration dates than call options. A Series using this investment
technique may invest up to 5% of its net assets in warrants and stock rights,
<PAGE>
but no more than 2% of its net assets in warrants and stock rights not listed
on the New York Stock Exchange or the American Stock Exchange.
Over-the-Counter ("OTC") Options. OTC options differ from exchange-traded
options in several respects. They are transacted directly with dealers and
not with a clearing corporation, and there is a risk of non-performance by
the dealer. However, the premium is paid in advance by the dealer. OTC
options are available for a greater variety of securities, and in a wider
range of expiration dates and exercise prices, than exchange-traded options.
Since there is no exchange, pricing is normally done by reference to
information from a market maker, which information is carefully monitored or
caused to be monitored by the Adviser and verified in appropriate cases.
A writer or purchaser of a put or call option can terminate it voluntarily
only by entering into a closing transaction. In the case of OTC options,
there can be no assurance that a continuous liquid secondary market will
exist for any particular option at any specific time. Consequently, these
Series may be able to realize the value of an OTC option it has purchased
only by exercising its OTC option or entering into a closing sale transaction
with the dealer that issued it. Similarly, when a Series writes an OTC
option, it generally can close out that option prior to its expiration only
by entering into a closing purchase transaction with the dealer to which such
Series originally wrote the option. If a covered call option writer cannot
effect a closing transaction, it cannot sell the underlying security or
foreign currency until the option expires or the option is exercised.
Therefore, the writer of a covered OTC call option may not be able to sell an
underlying security even though it might otherwise be advantageous to do so.
Likewise, the writer of a secured OTC put option may be unable to sell the
securities pledged to secure the put for other investment purposes while it
is obligated as a put writer. Similarly, a purchaser of an OTC put or call
option might also find it difficult to terminate its position on a timely
basis in the absence of a secondary market.
Financial Futures and Related Options. The Theme Series and Small Company
Growth Series may enter into financial futures contracts and related options
as a hedge against anticipated changes in the market value of such Series'
portfolio securities or securities which it intends to purchase or in the
exchange rate of foreign currencies. Hedging is the initiation of an
offsetting position in the futures market which is intended to minimize the
risk associated with a position's underlying securities in the cash market.
Investment techniques related to financial futures and options are summarized
below and are described more fully in the Statement of Additional
Information.
Financial futures contracts consist of interest rate futures contracts,
foreign currency futures contracts and securities index futures contracts. An
interest rate futures contract obligates the seller of the contract to
deliver, and the purchaser to take delivery of, the interest rate securities
called for in the contract at a specified future time and a specified price.
A foreign currency futures contract obligates the seller of the contract to
deliver, and the purchaser to take delivery of, the foreign currency called
for in the contract at a specified future time and at a specified price. See
"Foreign Currency Transactions". A securities index assigns relative values
to the securities included in the index, and the index fluctuates with
changes in the market values of the securities so included. A securities
index futures contract is a bilateral agreement pursuant to which two parties
agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the index value at the close of
the last trading day of the contract and the price at which the futures
contract is originally struck. An option on a financial futures contract
gives the purchaser the right to assume a position in the contract (a long
position if the option is a call and a short position if the option is a put)
at a specified exercise price at any time during the period of the option.
These Series may purchase and sell financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange-
or broad-traded put and call options on financial futures contracts and may
enter into financial futures contracts on foreign currencies.
These Series will engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In
addition, these Series will not purchase or sell any financial futures
contract or related option if, immediately thereafter, the sum of the cash or
U.S. Treasury bills committed with respect to such Series' existing futures
and related options positions and the premiums paid for related options would
exceed 5% of the market value of such Series' total assets. At the time of
purchase of a futures contract or a call option on a futures contract, an
amount of cash, U.S.
<PAGE>
Government securities or other appropriate high-grade debt obligations equal
to the market value of the futures contract minus such Series' initial margin
deposit with respect thereto, will be deposited in a segregated account with
the Fund's custodian bank to fully collateralize the position and thereby
ensure that it is not leveraged. The extent to which a Series may enter into
financial futures contracts and related options may also be limited by
requirements of the Internal Revenue Code for qualification as a regulated
investment company.
Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Adviser
could be incorrect in its expectation as to the direction or extent of
various interest rate movements or foreign currency exchange rates, in which
case the return might have been greater had hedging not taken place. There is
also the risk that a liquid secondary market may not exist, and the loss from
investing in futures contracts is potentially unlimited because such Series
may be unable to close its position. The risk in purchasing an option on a
financial futures contract is a loss of the premium paid. Also, there may be
circumstances when the purchase of an option on a financial futures contract
could result in a loss while the purchase or sale of the contract would not
have resulted in a loss.
Repurchase Agreements. The Theme Series and Small Company Series may invest
in repurchase agreements, either for temporary defensive purposes
necessitated by adverse market conditions or to generate income from its
excess cash balances, provided that no more than 10% of the total assets may
be invested in the aggregate in repurchase agreements having maturities of
more than seven days and in all other illiquid securities. A repurchase
agreement is an agreement under which a Series acquires a money market
instrument (generally a security issued by the U.S. Government or an agency
thereof, a banker's acceptance or a certificate of deposit) from a commercial
bank, a broker or a dealer, subject to resale to the seller at an agreed upon
price and date (normally the next business day). The resale price reflects an
agreed upon interest rate effective for the period the instrument is held by
such Series and is unrelated to the interest rate on the underlying
instrument. A repurchase agreement acquired by such Series will always be
fully collateralized by the underlying instrument, which will be marked to
market every business day. The underlying instrument will be held for such
Series' account by the Funds' custodian bank until repurchased.
The use of repurchase agreements involves certain risks such as default by or
the insolvency of the other party to the repurchase agreement. Repurchase
agreements will be entered into only with commercial banks, brokers and
dealers considered by the Adviser to be creditworthy.
Lending Portfolio Securities. In order to increase the return on its
investment, each Series may each lend its portfolio securities to
broker-dealers and other financial institutions in amounts up to 33% of the
market or other fair value of its total assets. Loans of portfolio securities
will always be fully collateralized and will be made only to borrowers
considered by the Adviser to be credit-worthy. Lending portfolio securities
involves risk of delay in the recovery of the loaned securities and in some
cases the loss of rights in the collateral should the borrower fail
financially. See the Statement of Additional Information.
Foreign Currency Transactions. The value of the assets of the Theme Series
and Small Company Growth Series as measured in United States dollars may be
affected favorably or unfavorably by changes in foreign currency exchange
rates and exchange control regulations, and may incur costs in connection
with conversions between various currencies. Each of these Series will
conduct foreign currency exchange transactions either on a spot (i.e., cash)
basis at the spot rate prevailing in the foreign currency exchange market, or
through forward contracts to purchase or sell foreign currencies. A forward
foreign currency exchange contract involves an obligation to purchase or sell
a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. These contracts are traded directly between
currency traders (usually large commercial banks) and their customers. At the
time of the purchase of a forward foreign currency exchange contract, an
amount of cash, U.S. Government securities or other appropriate high-grade
debt obligations equal to the market value of the contract, minus the Series'
initial margin deposit with respect thereto, will be deposited in a
segregated account with the Series' custodian bank to collateralize fully the
position and thereby ensure that it is not leveraged.
<PAGE>
When these Series enter into a contract for the purchase or sale of a
security denominated in a foreign currency, it may want to establish the
United States dollar cost or proceeds, as the case may be. By entering into a
forward contract in United States dollars for the purchase or sale of the
amount of foreign currency involved in the underlying security transaction,
it is able to protect itself against a possible loss between trade and
settlement dates resulting from an adverse change in the relationship between
the United States dollar and such foreign currency. However, this tends to
limit potential gains which might result from a positive change in such
currency relationships. Utilizing this investment technique may also hedge
the foreign currency exchange rate risk by engaging in currency financial
futures and options transactions.
When the Adviser believes that the currency of a particular foreign country
may suffer a substantial decline against the United States dollar, it may
enter into a forward contract to sell an amount of foreign currency
approximating the value of some or all of the Series' portfolio securities
denominated in such foreign currency. The forecasting of short-term currency
market movement is extremely difficult and whether such a short-term hedging
strategy will be successful is highly uncertain.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a contract. Accordingly, it may be necessary
to purchase additional currency on the spot market (and bear the expense of
such purchase) if the market value of the security is less than the amount of
foreign currency the Series is obligated to deliver when a decision is made
to sell the security and make delivery of the foreign currency in settlement
of a forward contract. Conversely, it may be necessary to sell on the spot
market some of the foreign currency received upon the sale of the portfolio
security if its market value exceeds the amount of foreign currency the
Series is obligated to deliver.
If the Series utilizing this investment technique retain the portfolio
security and engage in an offsetting transaction, the Series will incur a
gain or a loss (as described below) to the extent that there has been
movement in forward contract prices. If the Series engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell
the foreign currency. Should forward prices decline during the period between
the Series' entering into a forward contract for the sale of a foreign
currency and the date it enters into an offsetting contract for the purchase
of the foreign currency, the Series would realize gains to the extent the
price of the currency it has agreed to sell exceeds the price of the currency
it has agreed to purchase. Should forward prices increase, the Series would
suffer a loss to the extent the price of the currency it has agreed to
purchase exceeds the price of the currency it has agreed to sell. Although
such contracts tend to minimize the risk of loss due to a decline in the
value of the hedged currency, they also tend to limit any potential gain
which might result should the value of such currency increase. A Series using
this investment technique will have to convert its holdings of foreign
currencies into United States dollars from time to time. Although foreign
exchange dealers do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies.
Investing in Foreign Securities
Each Series may invest up to 25% of its total net asset value (provided
however, the Theme Series may invest up to 35% of its total net asset value)
in the securities of foreign issuers. Each Series may invest in a broad range
of foreign securities including equity, debt and convertible securities and
foreign government securities. While the Series may purchase the securities
of issuers from various countries, it is anticipated that its foreign
investments will be primarily in securities of issuers from the major
industrialized nations such as the United Kingdom, France, Canada, Germany
and Japan. Each Series 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. 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
<PAGE>
price volatility, and 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 each Series will not
be registered with, nor the issuers thereof be subject to the reporting
requirements of, the Securities and Exchange Commission (the "SEC").
Accordingly, there may be less publicly available information about the
securities and about the foreign company or government issuing them than is
available about a domestic company or government entity. Moreover, individual
foreign economies may differ favorably or unfavorably from the 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.
In investing in securities denominated in foreign currencies, the Series 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 Series' 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 Series will invest only in securities denominated in foreign currencies
that are fully convertible into U.S. dollars without legal restriction at the
time 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
Series and which may not be recoverable by the Series or its investors.
The Series 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 Series 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 Series' portfolio may be affected by such trading on
days when a shareholder has no access to the Series.
Investment income received by the Series from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If
the Series should have more than 50% of the value of its assets invested in
securities of foreign corporations at the close of its taxable year, the
Series may elect to permit its shareholders to take foreign tax credit for
their proportionate shares of foreign income taxes paid. Investors are urged
to consult their tax attorney with respect to specific questions regarding
foreign, federal, state or local taxes.
Leverage
The Theme Series and Small Company Growth Series may from time to time
increase its ownership of securities holdings above the amounts otherwise
possible by borrowing from banks at fixed amounts of interest and investing
the borrowed funds. The Fund will borrow only from banks, and only if
immediately after such borrowing the value of the assets of the Series
(including the amount borrowed) less its liabilities (not including any
borrowings) is at least three times the amount of funds borrowed for
investment purposes. The effect of this provision is to permit the Fund to
borrow up to 33-1/3% of the net assets of such Series, not including the
proceeds of any such borrowings. However, the amount of the borrowings will
be dependent upon the availability and cost of credit from time to time. If,
due to market fluctuations or other reasons, the value of such Series' assets
computed as provided above become less than three times the amount of the
borrowings for investment purposes, the Fund, within three business days, is
required to reduce bank debt to the extent necessary to meet the required
300% asset coverage.
Interest on money borrowed will be an expense of these Series with respect to
which the borrowing has been made. Because such expense would not otherwise
be incurred, the net investment income of such Series is not expected to be
as high as it otherwise would be during periods when borrowings for
investment purposes are substantial.
Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing must also be made
<PAGE>
subject to an agreement by the lender that any recourse is limited to the
assets of such Series with respect to which the borrowing has been made.
Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of such Series' shares to rise
faster than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the monies borrowed) to such Series, the net
asset value of the Series will decrease faster than would otherwise be the
case.
Private Placements and Rule 144A Securities
The Theme Series and Small Company Growth Series may purchase securities
which have been privately issued and are subject to legal restrictions on
resale or which are issued to qualified institutional investors under special
rules adopted by the SEC. Such securities may offer higher yields than
comparable publicly traded securities. Such securities ordinarily can be sold
by these Series in secondary market transactions to certain qualified
investors pursuant to rules established by the SEC, in privately negotiated
transactions to a limited number of purchasers or in a public offering made
pursuant to an effective registration statement under the Securities Act of
1933 ( the "1933 Act"). Public sales of such securities by the Fund may
involve significant delays and expense. Private sales often require
negotiation with one or more purchasers and may produce less favorable prices
than the sale of similar unrestricted securities. Public sales generally
involve the time and expense of the preparation and processing of a
registration statement under the 1933 Act (and the possible decline in value
of the securities during such period) and may involve the payment of
underwriting commissions. In some instances, these Series may have to bear
certain costs of registration in order to sell such shares publicly. Except
in the case of securities sold to qualifying institutional investors under
special rules adopted by the SEC for which the Trustees of these Series
determine the secondary market is liquid, Rule 144A securities will be
considered illiquid. Trustees of these Series may determine the secondary
market is liquid based upon the following factors which will be reviewed
periodically as required pursuant to procedures adopted by these Series: the
number of dealers willing to purchase or sell the security; the frequency of
trades; dealer undertakings to make a market in the security, and the nature
of the security and its market. Investing in Rule 144A Securities could have
the effect of increasing the level of these Series' illiquidity to the extent
that qualified institutional buyers become, for a time, uninterested in
purchasing these securities. These Series may invest up to 15% of its net
assets in illiquid securities.
INVESTMENT RESTRICTIONS
The investment restrictions to which each Series is subject together with the
investment objectives of the Series, are fundamental policies of the Fund
which may not be changed as to any Series without the approval of such
Series' shareholders. Among the more significant restrictions, each Series
may not (i) invest more than 5% (15% for the Theme Series and Small Company
Growth Series) of its total assets in securities issued or guaranteed by any
one issuer (except for U.S. Government obligations; any foreign government,
its agencies and instrumentalities) or (ii) purchase more than 10% of the
outstanding voting securities or more than 10% of the securities of any class
of any one issuer.
A detailed description of each Series' investment restrictions is contained
in the Statement of Additional Information.
PORTFOLIO TURNOVER
Each Series pays brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover involves a correspondingly
greater amount of brokerage commissions and other costs which must be borne
directly by a Series and thus indirectly by its shareholders. It may also
result in the realization of larger amounts of short-term capital gains,
which are taxable to shareholders as ordinary income.
The rate of portfolio turnover is not a limiting factor when the Adviser
deems changes appropriate. Although the portfolio turnover rate of all of the
Series cannot be accurately predicted, it is anticipated that the annual
turnover rate of the Equity Opportunities, Theme and Small Company Growth
Series will likely not exceed 300%, 200% and 250%, respectively. If a
security underperforms the Adviser's expectations it is generally sold.
Portfolio turnover rate is calculated by dividing the lesser of purchases or
sales of portfolio securities during the fiscal year by the monthly average
of the value of the Series' securities
<PAGE>
(excluding short-term securities). The turnover rate may vary greatly from
year to year and may be affected by cash requirements for redemptions of
shares of a Series and by compliance with provisions of the Internal Revenue
Code, relieving investment companies which distribute substantially all of
their net income from federal income taxation on the amounts distributed. The
1994 and 1995 rates of portfolio turnover for the Equity Opportunities Series
are set forth under "Financial Highlights."
MANAGEMENT OF THE FUND
The Board of Trustees supervises the business affairs and investments of the
Fund, which is managed or caused to be managed on a daily basis by the Fund's
investment advisers. The Fund was organized as a Massachusetts business trust
on October 15, 1987. The Fund is authorized to offer shares in a series and
is currently offering shares in three separate Series. Two classes of shares
are offered by each Series.
The Advisers
The investment adviser to the Theme Series and Small Company Growth Series is
Phoenix Investment Counsel, Inc. (PIC), which is located at One American Row,
Hartford, Connecticut 06115-2520. PIC was originally organized in 1932 as
John Chase, Inc. In addition to the Theme and Small Company Growth Series,
PIC also serves as investment adviser to Phoenix Series Fund, Phoenix
Multi-Portfolio Fund (other than the Real Estate Securities Portfolio),
Phoenix Total Return Fund, Inc. and The Phoenix Edge Series Fund (other than
the Real Estate Securities Series) and as sub-adviser to investment
portfolios of JNL Series Trust, Chubb America Fund, Inc., SunAmerica Series
Trust and American Skandia Trust.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation, an indirect subsidiary of the Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") of Hartford, Connecticut. Phoenix Home Life is
in the business of writing ordinary and group life and health insurance and
annuities. The principal office of Phoenix Home Life is located in One
American Row, Hartford, CT 06115-2520. Equity Planning, the National
Distributor of the Fund's shares, also acts as financial agent of the Fund.
Equity Planning is registered as a broker-dealer in fifty states. The
principal office of Equity Planning is located at 100 Bright Meadow
Boulevard, P.O. Box 2200, Enfield, CT 06083-2200.
For managing, or directing the management of the investments of the Theme and
Small Company Growth Series, PIC is entitled to a fee, payable monthly, at
the following annual rates based upon the aggregate net asset values of the
following Series:
1st $1-2 $2+
Series Billion Billion Billion
- ---------------------- ------ ------ --------
Theme 0.75% 0.70% 0.65%
Small Company Growth 0.75% 0.70% 0.65%
The total advisory fee of 0.75% of the aggregate net assets of the Theme and
Small Company Growth Series is greater than that for most mutual funds;
however, the Board of Trustees of the Fund believe that it is similar to fees
charged by other mutual funds whose investment objectives are similar to
those of the Theme and Small Company Growth Series.
The investment adviser to the Equity Opportunities Series is National. The
Adviser's principal place of business is One American Row, Hartford, CT.
National is an indirect wholly owned subsidiary of Phoenix Home Life Mutual
Insurance Company.
National also acts as the investment adviser or manager for Phoenix Asset
Reserve, Phoenix California Tax Exempt Bonds, Inc., Phoenix Income and Growth
Fund, Phoenix Multi-Sector Fixed Income Fund, Inc. and the Phoenix Worldwide
Opportunities Fund. The Adviser currently has approximately $1.7 billion in
assets under management. The Adviser has acted as an investment adviser for
over sixty years.
As compensation for its services, National receive a fee, which is accrued
daily against the value of the Equity Opportunities Series' net assets and is
paid monthly by the Fund. The fee is computed at an annual rate of .70% of
the Series' average daily net assets of up to $1 billion, .65% of the Series'
average daily net assets from $1 billion to $2 billion and .60% of the
Series' average daily net assets in excess of $2 billion. The ratio of the
management fees to average net assets for the fiscal year ended April 30,
1995 for Class A Shares of the Equity Opportunities Series was .70%. The
ratio of the management fees to average net assets for the same period for
Class B Shares of the Equity Opportunties Series was . %. For its services
to the Equity Opportunities Series for the fiscal year ended April 30, 1995,
National received a fee of $ for Class A Shares and $ for Class B
Shares.
The Portfolio Managers
Equity Opportunities Series
Mr. Michael K. Arends serves as Portfolio Manager of the Equity Opportunities
Series and as such is primarily
<PAGE>
responsible for the day to day management of the Series' investments. Mr.
Arends has served in this capacity since September 2, 1994. Mr. Arends is
also a Vice President of the Phoenix Series Fund. During 1989 to 1994, Mr.
Arends served as Co-Portfolio Manager for various Kemper Funds, the Kemper
Investment Portfolio-Growth Fund, Kemper Growth Fund and Kemper Retirement
Fund Series.
Theme Series and Small Company Growth Series
Mr. William J. Newman serves as Portfolio Manager of the Theme Series and
Small Company Growth Series and as such is primarily responsible for the day
to day management of each Series. Mr. Newman joined Phoenix Home Life in
March 1995 as Chief Investment Strategist and Managing Director for Phoenix
Investments. Mr. Newman is also Executive Vice President of PIC. Most
recently, Mr. Newman was Chief Investment Strategist for Kidder Peabody in
New York from May, 1993 to December, 1994. He was Managing Director at
Bankers Trust from March, 1991 to May, 1993 and Managing Director from June,
1988 to November, 1990.
The Underwriter
Pursuant to an Underwriting Agreement with the Fund, Equity Planning (the
"Underwriter"), is the underwriter of the Fund's shares. The offices of the
Underwriter are located at 100 Bright Meadow Boulevard, P.O. Box 2200,
Enfield, Connecticut 06083-2200. The Underwriter conducts a continuous
offering pursuant to a "best efforts" arrangement requiring it to take and
pay for any such securities as may be sold to the public through investment
dealers. The Underwriter may sell Fund shares through its registered
representatives or through dealers with whom it has sales agreements.
The Underwriter is an indirect wholly-owned subsidiary of Phoenix Home Life.
The Underwriter also acts as underwriter of shares in the Phoenix Series
Fund, Phoenix Multi-Portfolio Fund, Phoenix Total Return Fund, Inc., Phoenix
Multi-Sector Fixed Income Fund, Inc., Phoenix Asset Reserve, Phoenix
California Tax Exempt Bonds, Inc., Phoenix Income and Growth Fund and the
Phoenix Worldwide Opportunities Fund (which, together with the Fund, are
hereinafter collectively referred to as the "Phoenix Funds").
Pursuant to a Financial Agent Agreement with the Phoenix Funds, Equity
Planning acts as administrative agent of the Fund and, as such, performs
administrative, bookkeeping and pricing functions for the Fund. As
compensation, Equity Planning receives a quarterly fee based on the average
of the aggregate daily net asset values of the Fund at the annual rate of
$300 per $1 million. For its services during the Fund's fiscal year ended
April 30, 1995, Equity Planning received $53,689 or .03% of average net
assets.
The Custodian and Transfer Agent
The Fund's custodian is State Street Bank and Trust Company (the
"Custodian"). Pursuant to a Transfer Agent and Service Agreement with the
Phoenix Funds, Equity Planning acts as transfer agent for the Fund (the
"Transfer Agent") for which it is paid $14.95 for each designated shareholder
account. The Transfer Agent engages sub-agents to perform certain shareholder
servicing functions for which such agents are paid a fee by Equity Planning.
DISTRIBUTION PLANS
The Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each class of shares of each Series of the Fund (the "Class A Plan",
the "Class B Plan", and collectively the "Plans"). The Plans permit the Fund
to reimburse the Underwriter for expenses incurred in connection with the
sale and promotion of Fund shares and the furnishing of shareholder services.
A 12b-1 fee paid by one Series may be used to finance distribution of the
shares of another series based on the number of shareholder accounts within
the Fund. Pursuant to the Class A Plan, the Fund may reimburse the
Underwriter for actual expenses of the Underwriter up to 0.30% annually for
the average daily net assets of the Fund's Class A Shares. However, the
Underwriter has voluntarily agreed to limit the maximum amount of
reimbursement under the Class A Plan for fiscal year 1996 to 0.25% annually
of the average daily net assets of the Fund's Class A Shares. Under the Class
B Plan, the Fund may reimburse the Underwriter monthly for actual expenses of
the Underwriter up to 1.00% annually of the average daily net assets of the
Fund's Class B Shares.
Expenditures incurred under the Plans may consist of: (i) commissions to
sales personnel for selling shares of the Fund (including underwriting
commissions and finance charges related to the payment of commissions for
sales of Class B Shares); (ii) compensation, sales incentives and payments to
sales, marketing and service personnel; (iii) payments to broker-dealers and
other financial institutions which have entered into
<PAGE>
agreements with the Underwriter for services rendered in connection with the
sale and distribution of shares of the Fund and provision of shareholder
services; (iv) payment of expenses incurred in sales and promotional
activities, including advertising expenditures related to the Fund; (v) the
costs of preparing and distributing promotional materials; (vi) the cost of
printing the Fund's Prospectus and Statement of Additional Information for
distribution to potential investors; (vii) such other similar services that
the Trustees determine are reasonably calculated to result in the sale of
shares of the Fund, provided, however that a portion of such amount paid to
the Underwriter, which portion shall be equal to or less than 0.25% annually
of the average daily net assets of the Fund, may be paid for reimbursing the
costs of providing services to shareholders, including assistance in
connection with inquiries related to shareholder accounts (the "Service
Fee"). From the Service Fee the Underwriter expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal
services to shareholders and/or maintaining 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 Underwriter. The Underwriter may
realize a profit from these arrangements. For the fiscal year ended April 30,
1995, there were $0 of unreimbursed expenses carried over to future plan
years; which sum represented % of net assets of the Fund on the last day of
the previous plan year.
In order to receive payments under the Plans, participants must meet such
qualifications as are to be established in the sole discretion of the
Underwriter, such as services to the Fund's shareholders; or services
providing the Fund with more efficient methods of offering shares to 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 batch processing.
Under the Class A Plan, reimbursement or payment of expenses may not be made
unless such payment or reimbursement occurs prior to the earliest of (a) the
last day of the one-year period commencing on the last day of the calendar
quarter during which the specific service or activity was performed, or (b)
the last day of the one-year period commencing on the last day of the
calendar quarter during which payment for the service or activity was made by
a third party on behalf of the Fund. The Class B Plan, however, does not
limit the reimbursement of distribution related expenses to expenses incurred
in specified time periods.
For the fiscal year ended April 30, 1995, the Fund paid $446,968 under the
Class A Plan and $1,768 under the Class B Plan. The fees were used to
compensate unaffiliated broker-dealers for servicing shareholder's accounts,
compensating sales personnel and reimbursing the Underwriter for commission
expenses and expenses related to preparation of the marketing material. On a
quarterly basis, the Fund's Trustees review a report on expenditures under
each Plan and the purposes for which expenditures were made. The Trustees
conduct an additional, more extensive review annually in determining whether
each Plan will be continued. By its terms, continuation of each Plan from
year to year is contingent on annual approval by a majority of the Fund's
Trustees and by a majority of the Directors who are not "interested persons"
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of either Plan or any related agreements (the "Plan
Trustees"). Each Plan provides that it may not be amended to increase
materially the costs which the Fund may bear without approval of the
applicable class of shareholders of the affected Series of the Fund and that
other material amendments 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. Each Plan further provides that while it is 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". Each Plan may be terminated at any time by vote of a majority of
the Plan Trustees or a majority of the applicable class of outstanding shares
of the Fund.
The Trustees have concluded that there is a reasonable likelihood that the
Plans will benefit each Series and all classes of shareholders. The Class A
Plan was approved by Class A shareholders of the Equity Opportunities Series
at a special meeting of shareholders held on April 30, 1993. The Class B Plan
was adopted by the Trustees (including a majority of independent Trustees) on
May 25, 1994.
<PAGE>
The National Association of Securities Dealers ("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 fees or amend either or both Plans.
If the Plans are terminated in accordance with their terms, the obligations
of the Fund to make payments to the Underwriter pursuant to the Plans,
including payments for expenses carried over from previous years, will cease.
HOW TO BUY SHARES
The Fund currently issues two classes of shares. Class A Shares are sold to
investors choosing the initial sales charge alternative. Class B Shares are
sold to investors choosing the deferred sales charge alternative. The minimum
initial purchase is $500, and the minimum subsequent investment is $25. 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 Equity Planning, or pursuant to the Systematic Exchange
Privilege (see Statement of Additional Information).
Each class of shares of a Series represents an interest in the same portfolio
of investments of the Series, has the same rights, and is identical to the
other in all respects, except that Class B Shares bear the expenses of the
deferred sales arrangement and any expenses (including the higher
distribution services fee and any incremental transfer agency costs)
resulting from such sales arrangement. Each class has exclusive voting rights
with respect to provisions of the Rule 12b-1 distribution plan pursuant to
which its distribution services fee is paid and each class has different
exchange privileges. Only the Class B Shares are subject to a conversion
feature. The net income attributable to Class B Shares and the dividends paid
on Class B Shares will be reduced by the amount of the higher distribution
services fee and incremental expenses associated with such distribution
services fee; likewise, the net asset value of the Class B Shares will be
reduced by such amount to the extent the Series has undistributed net income.
Subsequent investments for the purchase of full and fractional shares in
amounts of $25 or more may be made through an investment dealer or by sending
a check to Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301. Share certificates representing any number of
full shares will be issued only on request, and subject to certain
conditions. A fee may be incurred by the shareholder for a lost or stolen
share certificate. Sales personnel of broker-dealers distributing the Fund's
shares may receive differing compensation for selling Class A and Class B
Shares.
The Fund offers combination purchase privileges, letters of intent,
accumulation plans, withdrawal plans and reinvestment and exchange
privileges. Certain privileges may not be available in connection with Class
B Shares. Shares of the Fund or shares of any other Phoenix Fund (except
Phoenix Asset Reserve Class A Shares held less than 6 months and Phoenix
Money Market Fund Series Class A Shares), may be exchanged for shares of the
same class 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 Phoenix 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
from any other Phoenix Fund. On Class B Share exchanges, the contingent
deferred sales charge schedule of the original shares purchased is not taken
and continues to apply.
Alternative Sales Arrangements
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is most 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 fee and contingent deferred
sales charges on Class B Shares prior to conversion would be less than the
initial sales charge and accumulated distribution fee on Class A Shares
purchased at the same time, and to what extent such differential would be
offset by the higher yield of Class A Shares. In this regard, Class A Shares
will be more beneficial to the investor who qualifies for certain reduced
initial sales charges. The Underwriter intends to limit sales of Class B
Shares sold to any shareholder to a maximum total value of $250,000. Class B
Shares sold to
<PAGE>
unallocated qualified employer sponsored plans will be limited to a maximum
total value of $1,000,000.
Class B Shares sold to allocated qualified employer sponsored plans,
including 401(k) plans, will be limited to a maximum total value of $250,000
for each participant. The Underwriter reserves the right to decline the sale
of Class B Shares to allocated qualified employer sponsored plans not
utilizing an approved participant tracking system. In addition, Class B
Shares will not be sold to any 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 200 participant
employees. Class B Shares will also not be sold to investors who have reached
the age of 85 because of such persons' expected distribution requirements.
Class A Shares are subject to a lower distribution fee and, accordingly, pay
correspondingly higher dividends per share. However, because initial sales
charges are deducted at the time of purchase, such investors would not have
all their funds invested initially and, therefore, would initially own fewer
shares. Investors not qualifying for reduced initial sales charges who expect
to maintain their investment for an extended period of time might consider
purchasing Class A Shares because the accumulated continuing distribution
charges on Class B Shares may exceed the initial sales charge on Class A
Shares during the life of the investment. Again, however, such investors must
weigh this consideration against the fact that, because of such initial sales
charge, not all their funds will be invested initially. However, other
investors might determine that it would be more advantageous to purchase
Class B Shares to have all their funds invested initially, although remaining
subject to higher continuing distribution charges and, for a five-year
period, being subject to a contingent deferred sales charge.
Initial Sales Charge Alternative--Class A Shares
The public offering price of Class A Shares is the net asset value plus a
sales charge, as set forth below. Offering prices become effective at the
close of the general trading session of the New York Stock Exchange. Orders
received by dealers prior to such time are confirmed at the offering price
effective at that time, provided the order is received by State Street Bank
and Trust Company prior to its close of business.
The sales charge varies with the size of the purchase and reduced charges
apply to the aggregate of purchases of the Fund made at one time by "any
person," which term includes an individual, an individual and his/her spouse
and their children under the age of 21, or a trustee or other fiduciary
purchasing shares for a single trust, estate or fiduciary account although
more than one beneficiary is involved.
Class A Shares of the Fund are offered to the public at the net asset value
next computed after the purchase order is received by State Street Bank and
Trust Company, plus a maximum sales charge of 4.75% of the offering price
(4.99% of the amount invested) on single purchases of less than $50,000. The
sales charge is reduced on a graduated scale on single purchases on $50,000
or more as shown below.
Sales Charge Sales Charge Dealer Discount
Amount of as Percentage as Percentage or Agency Fee
Transaction of Offering of Amount as Percentage of
at Offering Price Price Invested Offering Price*
- --------------------- ------------- ------------- ------------------
Less than $50,000 4.75% 4.99% 4.25%
$50,000 but under
$100,000 4.50% 4.71% 4.00%
$100,000 but under
$250,000 3.50% 3.63% 3.00%
$250,000 but under
$500,000 3.00% 3.09% 2.75%
$500,000 but under
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None None**
*Equity Planning will sponsor sales contests, training and educational
meetings and provide to all qualifying dealers, from its own profits and
resources, additional compensation in the form of trips, merchandise or
expense reimbursement. Brokers and dealers other than Equity Planning may
also make customary additional charges for their services in effecting
purchases, if they notify the Fund of their intention to do so. Equity
Planning shall also pay service and retention fees, from its own profits and
resources, to qualified wholesalers who recruit registered financial
institutions and related third party marketers in connection with the sale of
shares of Phoenix Funds (exclusive of Class A Shares of Phoenix Money Market
Series).
** In connection with Class A Share purchases of $1,000,000 or more (or
subsequent purchases in any amount), Equity Planning may pay broker-dealers,
from its own profits and resources, a percentage of the net asset value of
any shares sold as set forth below:
<PAGE>
Purchase Amount Payment to Broker/Dealer
- --------------------------- ---------------------------
$1,000,000 to $2,000,000 0.75 of 1%
$2,000,001 to $4,000,000 0.50 of 1%
$4,000,001 or more 0.25 of 1%
If part or all of such investment is subsequently redeemed within one year of
the investment date, the broker-dealer will refund to the Underwriter such
amounts paid with respect to the investment.
How to Obtain Reduced Sales Charges On Class A Shares
Investors choosing the initial sales charge alternative under certain
circumstances may be entitled to pay reduced sales charges. The circumstances
under which such investors may pay reduced sales charges are described below.
Qualified Purchasers. No sales charge will be imposed on sales of shares to:
(1) any Phoenix Fund trustee, director or officer; (2) any director or
officer, or to any full-time employee or sales representative (who has acted
as such for at least 90 days) of the Adviser or employees of Equity Planning;
(3) registered representatives and employees of securities dealers with whom
Equity Planning 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 Equity Planning; (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, Equity Planning and/or their corporate affiliates; (8) any employee
or agent who retires from Phoenix Home Life or Equity Planning; (9) any
account held in the name of a qualified employee benefit plan, endowment fund
or foundation if, on the date of initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 200 participant
employees; (10) any person with a direct rollover transfer of shares from an
established 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, instrumentality, department,
authority or agency prohibited by law from paying a sales charge; (13) any
fully matriculated student in a U.S. service academy; (14) any unallocated
accounts held by a third party administrator, registered investment adviser,
trust company, or bank trust 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 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; or (16) any accounts established by financial institutions,
broker-dealers or registered investment advisers that charge an account
management fee or transaction fee, provided such entity has entered into an
agreement with the Underwriter for such program; provided that sales made to
persons listed in (1) through (15) above are made upon the written assurance
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund.
Shares issued pursuant to the automatic reinvestment of income dividends or
capital gains distributions are not subject to any sales charges. The Fund
receives the entire net asset value of its Class A Shares sold to investors.
The Underwriter's commission is the sales charge shown above less any
applicable discount or commission "re-allowed" to selected dealers and
agents. The Underwriter will re-allow discounts to selected dealers and
agents in the amounts indicated in the table above. In this regard, the
Underwriter may elect to re-allow the entire sales charge to selected dealers
and agents for all sales with respect to which orders are placed with the
Underwriter. A selected dealer who receives re-allowance in excess of 90% of
such a sales charge may be deemed to be an "underwriter" under the Securities
Act of 1933.
Combination Purchase Privilege. Purchases, either singly or in any
combination, of shares of the Fund or shares of any other Phoenix Fund
(including Class B Shares), if made at a single time by a single purchaser,
will be combined for the purpose of determining whether the total dollar
amount of such purchases entitles the purchaser to a reduced sales charge on
any such purchases of Class A shares. Each purchase of Class A Shares will
then be made at the public offering price, as described in the then current
Prospectus relating to such shares, which at the time of such purchase is
applicable to a single transaction of the total dollar amount of all such
purchases. The term "single purchaser" includes an individual, or an
individual, his spouse and their children
<PAGE>
under the age of majority purchasing for his or their own account (including
an IRA account) including his or their own trust, commonly known as a living
trust; a trustee or other fiduciary purchasing for a single trust, estate or
single fiduciary account, although more than one beneficiary is involved;
multiple trusts or 403(b) plans for the same employer; multiple accounts (up
to 200) under a qualified employee benefit plan or administered by a third
party administrator; or 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 in record in the
name, or nominee name, of the entity placing the order.
Letter of Intent. Class A Shares or shares of any other Phoenix Fund
(including Class B Shares) may be purchased by a "single purchaser" (as
defined above) within a period of thirteen months pursuant to a Letter of
Intent, in the form provided by Equity Planning, stating the investor's
intention to invest in such shares during such period an amount which,
together with the value (at their maximum offering prices on the date of the
Letter) of the Class A Shares of the Fund or Class A or Class B Shares of any
other Phoenix Fund then owned by such investor, equals a specified dollar
amount. Each purchase of shares made pursuant to a Letter of Intent will be
made at the public offering price, as described in the then current
Prospectus relating to such shares, which at the time of purchase is
applicable to a single transaction of the total dollar amount specified in
the Letter of Intent.
An investor's Letter of Intent is not a binding commitment of the investor to
purchase or a binding obligation of the Fund or Equity Planning to sell a
specified dollar amount of shares qualifying for a reduced sales charge.
Accordingly, out of his initial purchase (and subsequent purchases if
necessary), 5% of the dollar amount of purchases required to complete his
investment (valued at the purchase price thereof) is held in escrow in the
form of shares registered in the investor's name until he completes his
investment, at which time escrowed shares are deposited to his account. If
the investor does not complete his investment and does not within 20 days
after written request by Equity Planning or his dealer pay the difference
between the sales charge on the dollar amount specified in his Letter of
Intent and the sales charge on the dollar amount of actual purchases, the
difference will be realized through the redemption of an appropriate number
of the escrowed shares and any remaining escrowed shares will be deposited to
his account.
Right of Accumulation. "Single purchasers" (as defined above) may also
qualify for reduced sales charges based on the combined value of purchases of
either class of shares of the Fund, or any other Phoenix Fund, made over
time. Reduced sales charges are offered to investors whose shares, in the
aggregate, are valued (i.e., the dollar amount of such purchases plus the
then current value (at the public offering price as described in the then
current prospectus relating to such shares) of shares of all Phoenix Funds
owned) in excess of the threshold amounts described in the Section entitled
"Initial Sales Charge Alternative--Class A Shares." To use this option, the
investor must supply sufficient information as to account registrations and
account numbers to permit verification that one or more of his purchases
qualifies for a reduced sales charge.
Associations. A group or association may be treated as a "single purchaser"
and qualify for reduced initial sales charges under the Combination Purchase
Privilege and Right of Accumulation if the group or association (1) has been
in existence for at least six months; (2) has a legitimate purpose other than
to purchase mutual fund shares at a reduced sales charge; (3) gives its
endorsements or authorization to the investment program to facilitate
solicitation of the membership by the investment dealer, thus effecting
economies of sales effort; and (4) is not a group whose sole organizational
nexus is that the members are credit card holders of a company, policyholders
of an insurance company, customers of a bank or a broker-dealer or clients of
an investment adviser.
Deferred Sales Charge Alternative--Class B Shares
Investors choosing the deferred sales charge alternative purchase Class B
Shares at net asset value per share without the imposition of a sales charge
at the time of purchase. The Class B Shares are being sold without an initial
sales charge, but are subject to a sales charge if redeemed within five years
of purchase.
Proceeds from the contingent deferred sales charge are paid to the
Underwriter and are used in whole or in part by the Underwriter to defray the
expenses of the Underwriter related to providing distribution-related
services to the Fund in connection with the sale of the Class B Shares, such
as the payment of compensation to selected dealers and agents. The
combination of
<PAGE>
the contingent deferred sales charge and the distribution fee facilitates the
ability of the Fund to sell the Class B Shares without a sales charge being
deducted at the time of purchase.
Contingent Deferred Sales Charge. Class B Shares which are redeemed within
five years of purchase will be subject to a contingent deferred sales charge
at the rates set forth below charged as a percentage of the dollar amount
subject thereto. The charge will be assessed on an amount equal to the lesser
of the current market value or the cost of the shares being redeemed.
Accordingly, no sales charge will be imposed on increases in net asset value
above the initial purchase price. In addition, no charge will be assessed on
shares derived from reinvestment of dividends or capital gains distributions.
The Underwriter intends to pay investment dealers a sales commission of 4% of
the sale price of Class B Shares sold by such dealers, subject to future
amendment or termination. The Underwriter will retain all or a portion of the
continuing distribution fee assessed to Class B shareholders and will receive
the entire amount of the contingent deferred sales charge paid by
shareholders on the redemption of shares to finance the 4% commission plus
interest and related marketing expenses.
The amount of the contingent deferred sales charges, if any, will vary
depending on the number of years from the time of payment for the purchase of
Class B Shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment for
the purchases of shares, all payments during a month will be aggregated and
deemed to have been made on the last day of the previous month.
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
- ---------------------- ---------------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
In determining whether a contingent deferred sales charge is applicable to a
redemption, it will be assumed that any Class A Shares are being redeemed
first. Class B Shares held for over 5 years and shares acquired pursuant to
reinvestment of dividends or distributions are redeemed next. Any Class B
Shares held longest during the 5 year period are redeemed next unless the
shareholder directs otherwise. The charge will not be applied to dollar
amounts representing an increase in the net asset value since the time of
purchase.
To provide an example, assume in 1990, an investor purchased 100 Class B
Shares. In 1993, the investor purchased another 100 Class B Shares at $12 per
share. In 1995, the investor purchased 100 Class A Shares. Assume that in
1996, the investor owns 225 Class B Shares (15 Class B Shares resulting from
dividend reinvestment and distributions upon the Class B Shares purchased in
1990 and 10 Class B Shares resulting from dividend reinvestment and
distributions upon the Class B Shares purchased in 1993) as well as 100 Class
A Shares. If the investor wished to then redeem 300 shares and had not
specified a preference in redeeming shares; first, 100 Class A Shares would
be redeemed without charge. Second, 115 Class B Shares purchased in 1990
(including 15 shares issued as a result of dividend reinvestment and
distributions) would be redeemed next without charge. Finally, 85 Class B
Shares purchased in 1993 would be redeemed resulting in a deferred sales
charge of $27 [85 shares (85 shares minus 10 shares resulting from dividend
reinvestment) X $12 (original price) X 3% (applicable rate in the third year
after purchase)].
The contingent deferred sales charge is waived on redemptions of shares (a)
if redemption is made 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) if redemption is made within one year of disability,
as defined in Section 72(m)(7) of the Code; (c) in connection with mandatory
distributions upon reaching age 70-1/2 under any retirement plan qualified
under Sections 401, 408 or 403(b) of the Code or any redemption resulting
from the tax-free return of an excess contribution to an IRA; (d) in
connection with redemptions 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) in connection with
the exercise of certain exchange privileges among Class B Shares of the Fund
and Class B Shares of other Phoenix Funds; (f) in
<PAGE>
connection with any direct rollover transfer of shares from an established
Phoenix Fund qualified plan into a Phoenix Fund IRA by participants
terminating from the qualifying plan; and (g) in accordance with the terms
specified under the Systematic Withdrawal Program. If, upon the occurrence of
a death as outlined above, the account is transferred to an account
registered in the name of the deceased's estate, the contingent deferred
sales charge 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 Class B Shares and be
subject to the applicable contingent deferred sales charge when redeemed.
Class B Shares of the Fund will automatically convert to Class A Shares
without a sales charge at the relative net asset values of each of the
classes after eight years from the acquisition of the Class B Shares, and as
a result, will thereafter be subject to the lower distribution fee under the
Class A Plan. 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. The purpose of the conversion feature is to relieve the holders
of Class B Shares that have been outstanding for a period of time sufficient
for the National Distributor to have been compensated for
distribution-related expenses.
For purposes of conversion to Class A 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) are converted to Class A Shares, an
equal pro rata portion of the Class B Shares in the sub-account will also be
converted to Class A Shares.
The conversion of Class B Shares to Class A Shares is subject to the
availability of an opinion of counsel or a ruling of the Internal Revenue
Service ("IRS") to the effect that (i) the assessment of the higher
distribution fees and transfer agency costs with respect to Class B Shares
does not result in any dividends or distributions constituting "preferential
dividends" under the Code, and (ii) that the conversion of shares does not
constitute a taxable event under federal income tax law. The Fund has not
sought opinions of counsel as to these matters but has or shall apply to the
IRS for such a ruling. While a ruling similar to the one sought by the Fund
as to preferential dividends has been issued previously by the IRS with
respect to Phoenix Multi-Sector Fixed Income Fund, Inc., complete assurance
cannot be given when or whether the Fund will receive a favorable ruling.
While an adverse determination by the IRS is not expected, the Fund may be
required to reassess the alternative purchase arrangement structure if the
IRS does not rule favorably. In addition, were the IRS not to rule favorably,
the Fund might make additional distributions if doing so would assist in
complying with the Fund's general practice of distributing sufficient income
to reduce or eliminate U.S. federal taxes. The conversion of Class B Shares
to Class A Shares may be suspended if such an opinion or ruling is not
available. In that event, no further conversions of Class B Shares would
occur, and shares might continue to be subject to the higher distribution fee
for an indefinite period which may extend beyond the period ending six years
after the end of the month in which affected Class B Shares were purchased.
INVESTOR ACCOUNTS AND
SERVICES AVAILABLE
An account will be opened for the investor after the investor makes an
initial investment. Shares purchased will be held in the shareholder's
account by the Transfer Agent which will forward a statement each time there
is a change in the number of shares in the account. At any time, a
shareholder may request that a certificate be issued, subject to certain
conditions, representing any number of full shares held in his or her
account.
The Fund mails periodic reports to its shareholders. In order to reduce the
volume of mail, to the extent possible, only one copy of most Fund reports
will be mailed to households for multiple accounts with the same surname at
the same household address. Please contact Equity Planning to request
additional copies of shareholder reports.
Shareholder inquiries should be directed to the Fund at (800) 243-1574.
Bank Draft Investing Program (Investo-Matic Plan)
By completing the Investo-Matic Section of the New Account Application, a
shareholder may authorize the bank named in the form to draw $25 or more from
his/her personal checking account on or about the 15th day of the month, to
be used to purchase additional shares for his account. The amount
<PAGE>
the shareholder designates will be made available, in form payable to the
order of Equity Planning, to the Transfer Agent by the bank on the date the
bank draws on his/her account and will be used to purchase shares at the
applicable offering price. The shareholder or his or her registered
representative may, by telephone or written notice, cancel or change the
dollar amount being invested pursuant to the Investo-Matic Plan unless the
shareholder has notified the Fund or Transfer Agent that his or her
registered representative shall not have this authority.
Distribution Option
The Fund currently declares all income dividends and all capital gain
distributions, if any, payable in shares of the Fund at net asset value or,
at the option of the shareholder, in cash. By exercising the distribution
option, a shareholder may elect to: (1) receive both dividends and capital
gain distributions in additional shares; (2) receive dividends in cash and
capital gain distributions in additional shares; or (3) receive both
dividends and capital gain distributions in cash. If a shareholder elects to
receive dividends and/or distributions in cash and the check cannot be
delivered or remains uncashed by the shareholder due to an invalid address,
then the dividend and/or distribution will be reinvested after the Transfer
Agent has been informed that the proceeds are undeliverable. Additional
shares will be purchased for the shareholder's account at the then current
net asset value. Shareholders who 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), 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 Phoenix Funds at net asset value. Shareholders should obtain a current
prospectus and consider the objectives and policies of each such Fund
carefully before directing dividends and distributions to the other Fund.
Reinvestment election forms and prospectuses are available from Equity
Planning. Distributions may also be mailed to a second payee and/or address.
Dividends and capital gain distributions received in shares are taxable to
the shareholder and credited to the shareholder's account in full and
fractional shares and are computed at the closing net asset value on the next
business day after the record date. A distribution option may be changed at
any time by notifying Customer Service by telephone at 800-243-1574 or
sending a letter signed by the registered owner(s) of the account. 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 the shareholder's account are repurchased or redeemed or transferred
between the record date and the payment date of a dividend or distribution,
he/she will receive cash for the dividend or distribution regardless of the
distribution option selected.
Systematic Withdrawal Program
The Systematic Withdrawal Program allows shareholders to periodically redeem
a portion of their account on a predetermined monthly or quarterly,
semiannual or annual basis. A sufficient number of full and fractional shares
shall therefore 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 the shareholder's 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. See
"Redemption of Small Accounts".
Class A shareholders participating in the Systematic Withdrawal Program must
own shares of the Fund worth $5,000 or more, as determined by the
then-current net asset value per share. 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.
To participate in the Systematic Withdrawal Program, Class B shareholders
must initially own shares of the Fund worth $20,000 or more and elect to have
all dividends reinvested in additional Class B Shares of the Fund. Through
the Program, Class B shareholders may not withdraw more than 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month; or more than 3% of their aggregate net
investments each quarter. A
<PAGE>
Shareholder's participation in the Program will terminate automatically if
redemptions made outside the Program, when deducted from the shareholder's
aggregate net investments, result in an account value of less than $15,000.
Class B Share withdrawals in accordance with the Systematic Withdrawal
Program will be exempt from otherwise applicable contingent deferred sales
charges.
Class B shareholders redeeming more shares than the percentage permitted by
the withdrawal program shall be subject to any applicable contingent deferred
sales charge. 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 purchase.
Tax-Sheltered Retirement Plans
Shares of the Fund are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, Profit-Sharing and
Money Purchase Pension Plans which can be adopted by self-employed persons
("Keogh") and by corporations, and 403(b) Retirement Plans. Write or call
Equity Planning (800) 243-4361 for further information about the plans.
Exchange Privileges
Shareholders may exchange Class A or Class B Shares held in book-entry form
for shares of the same class of other Phoenix Funds (except Phoenix Asset
Reserve Class A Shares held less than 6 months and Class A Shares of Phoenix
Money Market Series), provided the following conditions are met: (1) the
shares that will be acquired in the exchange (the "Acquired Shares") are
available for sale in the shareholder's state of residence; (2) the Acquired
Shares are the same class as the shares to be surrendered (the "Exchanged
Shares"); (3) the Acquired Shares will be registered to the same shareholder
account as the Exchanged Shares; (4) the account value of the Fund whose
shares are to be acquired must equal or exceed the minimum initial investment
amount required by that Fund after the exchange is implemented; and (5) if a
shareholder has elected not to utilize the Telephone Exchange Privilege (see
below), a properly executed exchange request must be received by Equity
Planning. Exchange privileges are not available for certain shareholders
holding Class A Shares of Phoenix Money Market Fund Series and Class A Shares
of the Phoenix Asset Reserve held for less than 6 months.
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B Shares of the Fund exchanged for the same class of shares
of another Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel the privilege ("Systematic Exchange").
Shareholders who maintain an account balance in the Fund 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), may direct
that shares of the Fund be automatically exchanged at predetermined intervals
for shares of the same class of another Phoenix Fund. If the shareholder is
participating in the Self Security program offered by Phoenix Home Life, it
is not necessary to maintain the above account balances in order to use the
Systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and
subsequent amount that may be exchanged under the Systematic Exchange is $25.
Systematic Exchange forms are available from Equity Planning.
Exchanges will be based upon each Series' net asset value per share next
computed following receipt of a properly executed exchange request, without
sales charge. On Class B share exchanges, the contingent deferred sales
charge schedule of the original shares purchased continues to apply.
The exchange of shares from one fund or Series to another is treated as sale
of the Exchanged Shares and a purchase of the Acquired Shares for Federal
income tax purposes. The shareholder may, therefore, realize a taxable gain
or loss. See "Dividends, Distributions and Taxes" for information concerning
the Federal income tax treatment of a disposition of shares.
It is the policy of the Underwriter to discourage frequent trading by
shareholders among the Series and other Phoenix Funds in response to market
fluctuations. The Fund reserves the right to refuse exchange purchases by any
person or broker/ dealer if, in the Fund's or Adviser's opinion, the exchange
would adversely affect the Series' ability to invest according to its
investment objectives and policies, or otherwise adversely affect the Fund
and its shareholders. The Fund reserves the right to terminate or modify its
exchange privileges at any time upon giving prominent notice to shareholders
at least 60 days in advance.
<PAGE>
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
Telephone Exchanges
Telephone Exchange privileges are only available in states where the shares
to be acquired may be legally sold. Unless a shareholder elects in writing
not to participate in the Telephone Exchange Privilege, shares for which
certificates have not been issued may be exchanged by calling 800-367-5877
provided that the exchange is made between accounts with identical
registrations. Under the Telephone Exchange Privilege, telephone exchange
orders may also be entered on behalf of the shareholder by his or her legal
representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. In addition to requiring identical
registrations on both accounts, the Transfer Agent will require address
verification and will record telephone instructions on tape. All exchanges
will be confirmed in writing with the shareholder. To the extent that
procedures reasonably designed to prevent unauthorized telephone exchanges
are not followed, the Fund and/or the Transfer Agent may be liable for
following telephone instructions for exchange transactions that prove to be
fraudulent. Broker/dealers other than Equity Planning have agreed to bear the
risk of any loss resulting from any unauthorized telephone exchange
instruction from the firm or its registered representatives. However, the
shareholder would bear the risk of loss resulting from instructions entered
by an unauthorized third party that the Fund and/or the Transfer Agent
reasonably believe to be genuine. The Telephone Exchange Privilege may be
modified or terminated at any time on 60 days' notice to shareholders. In
addition, during times of drastic economic or market changes, the Telephone
Exchange Privilege may be difficult to exercise or may be suspended
temporarily. In such event an exchange may be effected by following the
procedure outlined for tendering shares represented by certificate(s).
If a shareholder elects not to use the Telephone Exchange Privilege or if the
shares being exchanged are represented by a certificate or certificates, in
order to exchange shares the shareholder must submit a written request to
Equity Planning, 100 Bright Meadow Boulevard, Enfield, CT 06083-2200, ATTN:
Phoenix Funds. If the shares are being exchanged between accounts that are
not registered identically, the signature on such request must be guaranteed
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. Any outstanding certificate or
certificates for the tendered shares must be duly endorsed and submitted.
Purchase and withdrawal plans and reinvestment and exchange privileges are
described more fully in the Statement of Additional Information. For further
information, call Equity Planning at (800) 243-1574.
NET ASSET VALUE
The net asset value per share of each Series is determined as of the close of
regular trading of the New York Stock Exchange (the "Exchange") on days when
the Exchange is open for trading.
Net asset value per share of a Series is determined by dividing the value of
the Series' net assets--the value of its assets less its liabilities--by the
total number of its outstanding shares. 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 fee and any
other expenses allocated solely to that class, are deducted from the
proportionate interest of such class in the assets of the Series, 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.
In determining the value of a Series' assets, the securities for which market
quotations are readily available are valued at market value. Debt securities
(other than short-term obligations) including those for which market
quotations are not readily available are normally valued on the basis of
valuations provided by a pricing service approved by the Trustees when such
prices are believed to reflect the fair value of such securities. Securities
listed or traded on a national securities exchange are valued at the last
sale price or, if there has been no recent sale, at the last bid price.
Securities which are primarily traded on foreign securities exchanges are
generally valued at the preceding
<PAGE>
closing values of such securities on their respective exchanges. 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 market for such security by the
Trustees or their delegates. Securities traded in the over-the-counter market
are valued at the last bid price. Short-term obligations maturing in less
than sixty days are valued at amortized cost, which the Board has determined
approximates market. Equity options are valued at the last sale price unless
the bid price is higher or the asked price is lower, in which event such bid
or asked price is used. Exchange-traded fixed income options are valued at
the last sale price unless there is no sale price, in which event current
prices provided by market makers are used. Over-the-counter traded fixed
income options are valued based upon current prices provided by market
makers. Financial futures are valued at the settlement price established each
day by the board of trade or exchange on which they are traded. Because of
the need to obtain prices as of the close of trading on various exchanges
throughout the world, the calculation of net asset value may not take place
for any Series which invests in foreign securities contemporaneously with the
determination of the prices of the majority of the portfolio securities of
such Series. All assets and liabilities initially expressed in foreign
currency values will be converted into United States dollar values at the
mean between the bid and offered quotations of such currencies against United
States dollars as last quoted by any recognized dealer. If an event were to
occur after the value of an investment was so established but before the net
asset value per share was determined, which was likely to materially change
the net asset value, then the instrument would be valued using fair value
considerations by the Trustees or their delegates. If at any time a Series
has other investments, 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 REDEEM SHARES
Shareholders have the right to have the Fund buy back shares at the net asset
value next determined after receipt of a redemption request and any other
required documentation in proper form (see "Net Asset Value"). In the case of
Class B Share redemptions, investors will be subject to the applicable
deferred sales charge, if any, for such shares (see "Deferred Sales Charge
Alternative--Class B Shares", above). To redeem, any outstanding share
certificates in proper form for transfer must be received by Equity Planning,
100 Bright Meadow Boulevard, Enfield, CT 06083-2200. To be in proper form to
redeem shares, the signature of the shareholder(s) on the certificate or
stock power must be signed exactly as registered, including any fiduciary
title, on a written instruction letter, certificate, or accompanying stock
power, such signatures being guaranteed by an eligible guarantor institution
as determined in accordance with the standards and procedures established by
the Transfer Agent (please contact the Fund at (800) 243-1574 with any
questions regarding eligible guarantors).
If no certificate has been issued, the Transfer Agent requires a written
request with signature guarantee. The Transfer Agent may waive the signature
guarantee requirement in the case of shares registered in the names of
individuals singly, jointly, or as custodian under the Uniform Gifts to
Minors Act, if the proceeds do not exceed $50,000, and the proceeds are
payable to the registered owner(s) at the address of record. Such requests
must be signed by each person in whose name the account is registered. In
addition, a shareholder may sell shares back to the Fund through securities
dealers who may charge customary commissions for their services. The
redemption price in such case will be the price as of the close of the
general trading session of the New York Stock Exchange on that day, provided
the order is received by the dealer prior thereto, and is transmitted to the
Underwriter prior to the close of its business. No charge is made by the Fund
on redemptions, but shares tendered through investment dealers may be subject
to a service charge by such dealers. Payment for shares redeemed is made
within seven days; provided, however, that redemption proceeds will not be
disbursed until each check used for purchase of shares has been cleared for
payment by the investor's bank, which may take up to 15 days after receipt of
the check.
Additional documentation may be required for redemptions by corporations,
partnership or other organizations, executors, administrators, trustees,
custodians, guardians, or from IRAs or other retirement plans, or if
redemption is requested by anyone but the shareholder(s) of record. To avoid
delay in redemption or transfer, shareholders having questions about specific
requirements should contact the Fund at (800) 243-1574. Redemption requests
will not be honored until all required documents in proper form have been
received.
<PAGE>
Telephone Redemptions
Unless a shareholder elects in writing not to participate in the Telephone
Redemption privilege, shares for which certificates have not been issued may
be redeemed by telephoning (800) 367-5877 and telephone redemptions will also
be accepted on behalf of the shareholder from his or her registered
representative.
The Fund and the Transfer Agent will employ reasonable procedures to confirm
that telephone instructions are genuine. Address and bank account information
will be verified, the telephone redemption instructions will be recorded on
tape, and all redemptions will be confirmed in writing to the shareholder. If
there has been an address change within the past 60 days, a telephone
redemption will not be authorized. To the extent that procedures reasonably
designed to prevent unauthorized telephone redemptions are not followed, the
Fund and/or the Transfer Agent may be liable for following telephone
instructions for redemption transactions that prove to be fraudulent. Broker/
dealers other than Equity Planning have agreed to bear the risk of any loss
resulting from any unauthorized redemption exchange instruction from the firm
or its registered representatives. However, the shareholder would bear the
risk of loss resulting from instructions entered by an unauthorized third
party that the Fund and/or the Transfer Agent reasonably believe to be
genuine. The Telephone Redemption Privilege may be modified or terminated at
any time on 60 days' notice to shareholders. In addition, during times of
drastic economic or market changes, the Telephone Redemption Privilege may be
difficult to exercise and a shareholder should submit a written redemption
request, as described above.
If the amount of the redemption is over $500, the proceeds will be wired to
the shareholder's designated U.S. commercial bank account. If the amount of
the redemption is less than $500, the proceeds will be sent by check to the
address of record on the shareholder's account.
Telephone redemption requests must be received by the Transfer Agent by the
close of trading on the New York Stock Exchange on any day when the Transfer
Agent is open for business. Requests made after that time or on a day when
the Transfer Agent is not open for business cannot be accepted by the
Transfer Agent. The proceeds of a telephone redemption will normally be sent
on the first business day following receipt of the redemption request.
However, with respect to the telephone redemption of shares purchased by
check, such requests will only be effected after the Fund has assured itself
that good payment has been collected for the purchase of shares, which may
take up to 15 days. This expedited redemption privilege is not available to
HR-10, IRA and 403(b)(7) Plans.
Reinstatement Privilege
Shareholders have a privilege of using redemption proceeds to purchase Class
A Shares of any Phoenix Fund with no sales charge (at the net asset value
next determined after the request for reinstatement is made). For Federal
income tax purposes, a redemption and reinstatement will be treated as a sale
and purchase of shares. Special rules may apply in computing the amount of
gain or loss in these situations. (See "Dividends, Distributions and Taxes"
for information on the Federal income tax treatment of a disposition of
shares.) A written request for reinstatement must be received by the
Underwriter within 180 days of the redemption, accompanied by payment for the
shares (not in excess of the redemption value). Class B shareholders who have
had the contingent deferred sales charge waived through participation in the
Systematic Withdrawal Program are not eligible to use the reinstatement
privilege.
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 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.
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.
DIVIDENDS, DISTRIBUTIONS
AND TAXES
The Fund intends to continue to qualify annually as a regulated investment
company under Subchapter M of the Code, and to distribute annually to
shareholders all or substantially all of its net investment income and net
realized
<PAGE>
capital gains, after utilization of any capital loss carryovers. If the Fund
so qualifies, it generally will not be subject to Federal income tax on the
income it distributes. The discussion below is based upon the assumption that
the Fund will continue to qualify as a regulated investment company.
Each Series intends to make distributions from net investment income
semi-annually, and intends to distribute net realized capital gains, if any,
at least annually.
The Fund will be subject to a nondeductible 4% excise tax if it fails to meet
certain calendar year distribution requirements. In order to prevent
imposition of the excise tax, it may be necessary for the Fund to make
distributions more frequently than described in the previous paragraph.
Unless a shareholder elects to receive distributions in cash, dividends and
capital gain distributions will be paid in additional shares of the Series
credited at the net asset value per share on the ex-date. Dividends and
distributions, whether received in cash or in additional shares of a Series,
generally are subject to Federal income tax and may be subject to state,
local, and other taxes. Shareholders will be notified annually about the
amount and character of distributions made to them by the Fund.
Long-term capital gains, if any, distributed to shareholders and which are
designated by the Fund as capital gain distributions, are taxable to
shareholders as long-term capital gain distributions regardless of the length
of time shares of the Series have been held by the shareholder. Distributions
of short-term capital gains and net investment income, if any, are taxable to
shareholders as ordinary income.
Dividends and distributions generally will be taxable to shareholders in the
taxable year in which they are received. However, dividends and distributions
declared by the Fund in October, November or December of any calendar year,
with a record date in such a month, and paid during the following January,
will be treated as if they were paid by the Fund and received by shareholders
on December 31 of the calendar year in which they were declared.
A redemption or other disposition (including an exchange) of shares of the
Fund generally will result in the recognition of a taxable gain or loss,
which will be a long- or short-term capital gain or loss (assuming the shares
were a capital asset in the hands of the shareholder), depending upon a
shareholder's holding period for his or her shares. A capital loss realized
on a disposition of Fund shares held six months or less will be treated as a
long-term capital loss to the extent of capital gain dividends received with
respect to such shares. In addition, if shares of the Fund are disposed of at
a loss and are replaced (either through purchases or through reinvestment of
dividends) within a period commencing thirty days before and ending thirty
days after the disposition of such shares, the realized loss will be
disallowed and appropriate adjustments to the tax basis of the new shares
will be made. In addition, special rules may apply to determine the amount of
gain or loss realized on any exchange.
The foregoing is only a summary of some of the important tax considerations
generally affecting each Series and their shareholders. In addition to the
Federal income tax consequences described above, which are applicable to any
investment in the Series, there may be state or local tax considerations, and
estate tax considerations, applicable to the circumstances of a particular
investor. Also, legislation may be enacted in the future that could affect
the tax consequences described above. Investors are urged to consult their
attorneys or tax advisers regarding specific questions as to Federal,
foreign, state or local taxes. Foreign shareholders may be subject to U.S.
Federal income tax rules that differ from those described above. For more
information regarding distributions and taxes, see "Dividends, Distributions
and Taxes" in the Statement of Additional Information.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS regulations, the Fund may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gain
distributions or share redemption proceeds for any account which does not
have a taxpayer identification number or social security number and certain
required certifications.
The Fund reserves the right to refuse to open an account for any person
failing to provide a taxpayer identification number along with the required
certifications.
The Fund sends to all shareholders, within 31 days after the end of the
calendar year, information which is required by the Internal Revenue Service
for preparing federal income tax returns.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
<PAGE>
ADDITIONAL INFORMATION
Organization of the Fund
The Fund was 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 Stock Series of National Securities Funds. National
Securities Funds, as such, had been in existence since 1940. The Fund
continued the business of the Stock Series under the name "National Stock
Fund." The Trustees subsequently voted to change the name of the Fund to
"Phoenix Equity Opportunities Fund" to reflect the purchase of the Adviser by
Phoenix Home Life and the affiliation with other Phoenix Funds. On May 24,
1995, the Trustees again changed the name of the Fund to "Phoenix Strategic
Equity Series Fund."
The Declaration of Trust provides that the Fund's Trustees are authorized to
create an unlimited number of series and, with respect to each series, to
issue an unlimited number of full and fractional shares of one or more
classes and to divide or combine the shares into a greater or lesser number
of shares without thereby changing the proportionate beneficial interests in
the series. All shares have equal voting rights, except that only shares of
the respective series or separate classes within a series are entitled to
vote on matters concerning only that series or class. At the date of this
Prospectus, there are three series of the Fund, each of which has two classes
of shares.
The shares of the Fund, when issued, will be fully paid and non-assessable,
have no preference, preemptive, or similar rights, and will be freely
transferable. There will normally be no meetings of shareholders for the
purpose of electing Trustees unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders, at
which time the Trustees then in office will call a shareholders' meeting for
the election of Trustees. Shareholders may, in accordance with the
Declaration of Trust, cause a meeting of shareholders to be held for the
purpose of voting on the removal of Trustees. Meetings of the shareholders
will be called upon written request of shareholders holding in the aggregate
not less than 10% of the outstanding shares having voting rights. Except as
set forth above, the Trustees will continue to hold office and appoint
successor Trustees. Shares do not have cumulative voting rights and the
holders of more than 50% of the shares of the Fund voting for the election of
Trustees can elect all of the Trustees of the Fund if they choose to do so
and in such event the holders of the remaining shares would not be able to
elect any Trustees. Shareholders are entitled to redeem their shares as set
forth under "How to Redeem Shares".
The Declaration of Trust establishing the Fund, dated June 25, 1986 (a copy
of which, together with all amendments thereto, is on file in the office of
the Secretary of the Commonwealth of Massachusetts), provides that the Fund's
name refers to the Trustees under the Declaration of Trust collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Fund shall be held to any personal
liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim of said Fund, but the "Trust
Property" only shall be liable.
Registration Statement
This Prospectus omits certain information included in the Statement of
Additional Information and Part C of the Registration Statement filed with
the Securities and Exchange Commission under the Securities Act of 1933 and
the 1940 Act. A copy of the Registration Statement may be obtained from the
Securities and Exchange Commission in Washington, D.C.
<PAGE>
BACKUP WITHHOLDING INFORMATION
Step 1. Please make sure that the social security number or taxpayer
identification number (TIN) which appears on the Application complies
with the following guidelines:
Account Type Give Social Security Number or Tax
Identification Number of:
Individual Individual
Joint (or Joint Tenant) Owner who will be paying tax
Uniform Gifts to Minors Minor
Legal Guardian Ward, Minor or Incompetent
Sole Proprietor Owner of Business (also provide owner's name)
Trust, Estate, Pension Trust, Estate, Pension Plan Trust (not personal
Plan Trust TIN of fiduciary)
Corporation, Corporation, Partnership, Other Organization
Partnership,
Other Organization
Broker/Nominee Broker/Nominee
Step 2. If you do not have a TIN, you must obtain Form SS-5 (Application for
Social Security Number) or Form SS-4 (Application for Employer
Identification Number) from your local Social Security or IRS office
and apply for one. Write "Applied For" in the space on the
application.
Step 3. If you are one of the entities listed below, you are exempt from
backup withholding.
* A corporation
* Financial institution
* Section 501(a) exempt organization (IRA, Corporate Retirement Plan,
403(b), Keogh)
* United States or any agency or instrumentality thereof
* A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof
* International organization or any agency or instrumentality thereof
* Registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
* Real estate investment trust
* Common trust fund operated by a bank under section 584(a)
* An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1)
* Regulated Investment Company
If you are in doubt as to whether you are exempt, please contact the Internal
Revenue Service.
Step 4. IRS Penalties--If you do not supply us with your TIN, you will be
subject to an IRS $50 penalty unless your failure is due to
reasonable cause and not willful neglect. If you fail to report
interest, dividend or patronage dividend income on your federal
income tax return, you will be treated as negligent and subject to an
IRS 5% penalty tax on any resulting underpayment of tax unless there
is clear and convincing evidence to the contrary. If you falsify
information on this form or make any other false statement resulting
in no backup withholding on an account which should be subject to a
backup withholding, you may be subject to an IRS $500 penalty and
certain criminal penalties including fines and imprisonment.
This Prospectus sets forth concisely the information about the Phoenix Equity
Opportunities Fund (the "Fund") which you should know before investing.
Please read it carefully and retain it for future reference.
Phoenix Strategic Equity Series Fund has filed with the Securities and
Exchange Commission a Statement of Additional Information about the Fund,
dated , 1995. The Statement contains more detailed information about the
Fund and is incorporated into this Prospectus by reference. You may obtain a
free copy of the Statement by writing the Fund c/o Phoenix Equity Planning
Corporation, 100 Bright Meadow, P.O. Box 2200, Enfield, Connecticut
06083-2200 or by calling (800) 243-4361.
Financial information relating to the Fund is contained in the Annual Report
to Shareholders for the year ended April 30, 1995 and is incorporated into
the Statement of Additional Information by reference.
Painting: "Ten Dollar Bills" by Victor Dubreuil.
Courtesy of Berry-Hill Galleries, Inc., New York.
["Recylcled" logo] Printed on recycled paper using soybean ink
<PAGE>
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<PAGE>
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<PAGE>
[BACK COVER]
Phoenix Strategic Equity Series Fund
P.O. Box 2200
Enfield, CT 06083-2200
[Phoenix double-diamond logo] Phoenix Investments
PEP 690 (10/95)
<PAGE>
[FRONT COVER]
Phoenix Funds
Phoenix Strategic
Equity Series Fund
Prospectus
, 1995
[Phoenix double-diamond logo] Phoenix Investments
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
101 Munson Street, Greenfield, MA 01301
Statement of Additional Information
, 1995
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Strategic Equity Series Fund (the "Fund"), dated --, 1995, 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) ............................... 1
INVESTMENT OBJECTIVES AND POLICIES (9) ... 1
INVESTMENT RESTRICTIONS (17) .............. 1
PERFORMANCE INFORMATION (8) ............... 8
PORTFOLIO TRANSACTIONS AND BROKERAGE ..... 9
SERVICES OF THE ADVISERS (17) ............. 10
NET ASSET VALUE (29) ...................... 11
HOW TO BUY SHARES (20) .................... 11
ALTERNATIVE PURCHASE ARRANGEMENTS (21) ... 11
EXCHANGE PRIVILEGES (27) .................. 13
REDEMPTION OF SHARES (29) ................. 13
DIVIDENDS, DISTRIBUTIONS AND TAXES (31) .. 14
TAX SHELTERED RETIREMENT PLANS (19) ...... 15
THE NATIONAL DISTRIBUTOR (3) .............. 15
PLANS OF DISTRIBUTION (3) ................. 15
TRUSTEES AND OFFICERS ..................... 17
ADVISORY BOARD ............................. 21
OTHER INFORMATION .......................... 22
Numbers appearing in parentheses correspond
to related disclosures in the Fund's Prospectus.
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders/Exchanges: (800) 367-5877
Telecommunications Device (TTY)-(800) 243-1926
PEP731 (10/95)
<PAGE>
THE FUND
Phoenix Strategic Equity Series Fund is an open-end diversified management
investment company which was organized under Massachusetts law in 1986 as a
Massachusetts Business Trust. On August 29, 1986, the Fund purchased all of
the assets and assumed all of the liabilities of the Stock Series of National
Securities Funds. The Fund continued the business of the Stock Series. The
Trustees voted to change the name of the Fund to "Phoenix Equity
Opportunities Fund" to reflect the purchase of the Adviser by Phoenix Home
Life Mutual Insurance Company and the affiliation with other Phoenix Funds.
On May 24, 1995, the Trustees voted to change the name of the Fund to
"Phoenix Strategic Equity Series Fund".
The Fund's Prospectus describes the investment objectives of the Phoenix
Equity Opportunities Fund (the "Equity Opportunities Series"), the Phoenix
Strategic Theme Fund ( the "Theme Series"), and the Phoenix Small Company
Growth Fund (the "Small Company Growth Series"). The following discussion
supplements the description of the Fund's investment policies and investment
techniques in the Prospectus.
INVESTMENT OBJECTIVES
As discussed in the Prospectus, the investment objective of each Series is
deemed to be a fundamental policy which may not be changed without the
approval of the holders of a majority of the outstanding shares of each
Series. Investment restrictions described in this Statement of Additional
Information are fundamental policies of each Series and may not be changed as
to any Series without the approval of such Series' shareholders. There is no
assurance that any Series will meet its investment objective.
INVESTMENT RESTRICTIONS
Fundamental Policies
The following investment restrictions constitute fundamental policies of each
Series (unless otherwise indicated) which may be changed only upon approval
by the holders of a majority of the outstanding shares of each Series'
shareholders. No Series may:
1. Borrow money, except that the Fund may borrow money for the Theme Series
for investment purposes, provided that any such borrowing for investment
purposes with respect to such Series is (a) authorized by the Trustees prior
to any public distribution of the shares of such Series or is authorized by
the shareholders of such Series thereafter, (b) is limited to 33-1/3% of the
value of the total assets (taken at market value) of such Series, and (c) is
subject to an agreement by the lender that any recourse is limited to the
assets of that Series with respect to which the borrowing has been made;
2. Underwrite the securities of others;
3. Deal in real estate (including real estate limited partnerships) except
that any Series may purchase marketable securities of companies that deal in
real estate or interests therein including real estate investment trusts;
4. Deal in commodities or commodities contracts;
5. Make loans to other persons except that any Series may lend portfolio
securities (up to 33% of net assets at the time the loan is made) to brokers
or dealers or other financial institutions not affiliated with the Fund or
the Adviser, subject to conditions established by the Adviser (See "Lending
of Securities");
6. Participate in any joint trading accounts;
7. Pledge, mortgage or hypothecate any securities or other property;
8. Purchase on margin;
9. Engage in short sales;
10. Issue senior securities;
11. Invest more than 25% of its total assets of a Series in any one industry
or group of industries (other than the Theme Series);
12. Purchase any securities (other than U.S. Government obligations) if, as a
result, more than 5% of the value of the total assets of such Series would be
invested in securities of a single issuer;
13. Purchase any security if, as a result, more than 10% of any class of
securities or more than 10% of the outstanding voting securities of any
issuer would be held;
14. Purchase any security for any Series unless (a) the issuer or its
predecessor has had a three year record of continuous operation during which
it published balance sheets and income statements, (b) at the end of its last
fiscal year, the issuer or its predecessor reported gross receipts of
$1,000,000 and (c) the issuer or its predecessor had an operating profit for
at least one fiscal year of the five years immediately preceding (provided
the foregoing restrictions shall not pertain to the Theme and Small Company
Growth Series);
15. Purchase any security of an investment trust except for purchases in the
open market where no commission or profit to a sponsor or dealer results from
such purchases, other than a customary broker's commission (except for Theme
Series and Small Company Growth Series); and
16. Make an investment for the purpose of exercising control or management.
<PAGE>
Other Policies
The following investment restrictions do not constitute fundamental policies
and may be changed without shareholder approval. No Series may:
1. Invest more than 15% of its net assets in illiquid securities, including
(a) securities with legal or contractual restrictions on resale (except in
the case of securities issued pursuant to Rule 144A sold to qualifying
institutional investors under special rules adopted by the Securities and
Exchange Commission for which the Trustees of the Fund determine the
secondary market is liquid), (b) repurchase agreements maturing in more than
seven days, and (c) securities that are not readily marketable.
2. Purchase or retain any security of an issuer if the Fund officers,
Trustees or Adviser, who individually own beneficially more than 1/2 of 1% of
such issuer, together own more than 5% of such issuer's securities.
3. Invest in interests in oil, gas or other mineral exploration development
programs.
4. Invest more than 5% of a Series' net assets in warrants and stock rights,
valued at the lower of cost or market, or more than 2% of its assets in
warrants and stock rights that are not listed on the New York Stock Exchange
or American Stock Exchange.
Investment Techniques
The investment objectives and policies of each Series are described in the
"Investment Objectives and Policies" section of the Prospectus. The following
specific policies supplement the information contained in that section of the
Prospectus.
Repurchase Agreements. Repurchase Agreements are agreements by which the
Theme Series and Small Company Growth Series purchases a security and obtains
a simultaneous commitment from the seller (a member bank of the Federal
Reserve System or, to the extent permitted by the Investment Company Act of
1940, a recognized securities dealer) that the seller will repurchase the
security at an agreed upon price and date. The resale price is in excess of
the purchase price and reflects an agreed upon market rate unrelated to the
coupon rate on the purchased security.
A repurchase transaction is usually accomplished either by crediting the
amount of securities purchased to the account of the custodian of the Fund
maintained in a central depository of book-entry system or by physical
delivery of the securities to the Fund's custodian in return for delivery of
the purchase price to the seller. Repurchase transactions are intended to be
short-term transactions with the seller repurchasing the securities, usually
within seven days.
Even though repurchase transactions usually do not impose market risks on the
purchasing Series, if the seller of the repurchase agreement defaults and
does not repurchase the underlying securities, the Series might incur a loss
if the value of the underlying securities declines, and disposition costs may
be incurred in connection with liquidating the underlying securities. In
addition, if bankruptcy proceedings are commenced regarding the seller,
realization upon the underlying securities may be delayed or limited, and a
loss may be incurred if the underlying securities decline in value.
Securities and Index Options. All Series may write covered call options and
purchase call and put options. Options and the related risks are summarized
below.
Writing and Purchasing Options. Call options written by a Series normally
will have expiration dates between three and nine months from the date
written. During the option period a Series may be assigned an exercise
notice by the broker-dealer through which the call option was sold,
requiring the Series to deliver the underlying security (or cash in the
case of securities index calls) against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at
such earlier time as the Series effects a closing purchase transaction. A
closing purchase transaction cannot be effected with respect to an option
once the Series has received an exercise notice.
The exercise price of a call option written by a Series may be below, equal
to or above the current market value of the underlying security or
securities index at the time the option is written.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total
dollar value per contract of each point between the exercise price of the
option and the current level of the underlying index. A multiplier of 100
means that a one-point difference will yield $100. Options on different
indices may have different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices,
Computer/Business Equipment Index, Major Market Index, Amex Market Value
Index, Computer Technology Index, Oil and Gas Index, NYSE Options Index,
Gaming/Hotel Index, Telephone Index, Transportation Index, Technology
Index, and Gold/Silver Index. A Series may write call options and purchase
call and put options on any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option written by a Series to prevent an
underlying security from being called, or to enable a Series to write
another call option with either a different exercise price or expiration
date or both. A Series may realize a net gain or loss from a closing
purchase transaction depending
<PAGE>
upon whether the amount of the premium received on the call option is more
or less than the cost of effecting the closing purchase transaction. If a
call option written by a Series expires unexercised, a Series will realize
a gain in the amount of the premium on the option less the commission paid.
The option activities of a Series may increase its portfolio turnover rate
and the amount of brokerage commissions paid. A Series will pay a
commission each time it purchases or sells a security in connection with
the exercise of an option. These commissions may be higher than those which
would apply to purchases and sales of securities directly.
Limitations on Options. A Series may write call options only if they are
covered and if they remain covered so long as a Series is obligated as a
writer. If a Series writes a call option on an individual security, a
Series will own the underlying security at all times during the option
period. A Series will write call options on indices only to hedge in an
economically appropriate way portfolio securities which are not otherwise
hedged with options or financial futures contracts. Call options on
securities indices written by a Series will be "covered" by identifying the
specific portfolio securities being hedged.
To secure the obligation to deliver the underlying security, the writer of
a covered call option on an individual security is required to deposit the
underlying security or other assets in escrow with the broker in accordance
with clearing corporation and exchange rules. In the case of an index call
option written by a Series, a Series will be required to deposit qualified
securities. A "qualified security" is a security against which a Series has
not written a call option and which has not been hedged by a Series by the
sale of a financial futures contract. If at the close of business on any
day the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts, a
Series will deposit an amount of cash or liquid assets equal in value to
the difference. In addition, when a Series writes a call on an index which
is "in-the-money" at the time the call is written, a Series will segregate
with its custodian bank cash or liquid assets equal in value to the amount
by which the call is "in-the-money" times the multiplier times the number
of contracts. Any amount segregated may be applied to a Series' obligation
to segregate additional amounts in the event that the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts.
An Equity Opportunities Series may invest up to 5% (15% with respect to
Theme Series and Small Company Growth Series) of its total assets in
exchange-traded or over-the-counter call and put options. A Series may sell
a call option or a put option which it has previously purchased prior to
the purchase (in the case of a call) or the sale (in the case of a put) of
the underlying security. Any such sale of a call option or a put option
would result in a net gain or loss, depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid.
In connection with a Series qualifying as a regulated investment company
under the Internal Revenue Code, other restrictions on a Series' ability to
enter into option transactions may apply from time to time. See "Taxes."
Risks Relating to Options. During the option period, the writer of a call
option has, in return for the premium received on the option, given up the
opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk
of loss should the price of the underlying security decline. The writer has
no control over the time when it may be required to fulfill its obligation
as a writer of the option.
The risk of purchasing a call option or a put option is that a Series may
lose the premium it paid plus transaction costs. If a Series does not
exercise the option and is unable to close out the position prior to
expiration of the option, it will lose its entire investment.
An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although a Series will
write and purchase options only when the Adviser believes that a liquid
secondary market will exist for options of the same series, there can be no
assurance that a liquid secondary market will exist for a particular option
at a particular time and that a Series, if it so desires, can close out its
position by effecting a closing transaction. If the writer of a covered
call option is unable to effect a closing purchase transaction, it cannot
sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call writer may not be able to sell the
underlying security at a time when it might otherwise be advantageous to do
so.
Possible reasons for the absence of a liquid secondary market on an
exchange include: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading
halts, suspensions or other restrictions imposed with respect to particular
classes or series of options or underlying securities; (iv) inadequacy of
the facilities of an exchange or the clearing corporation to handle trading
volume; and (v) a decision by one or more exchanges to discontinue the
trading of options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single
investor acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or
written on one or more accounts or through one or more brokers). An
exchange may order the liquidation of positions found to be in violation of
these limits and it may impose other sanctions or restrictions. The Adviser
believes that the position limits established by the exchanges will not
have any adverse impact upon a Series or all of the Series, in the
aggregate.
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Risks of Options on Indices. Because the value of an index option depends
upon movements in the level of the index rather than movements in the price
of a particular security, whether a Series will realize a gain or loss on
the purchase or sale of an option on an index depends upon movements in the
level of prices in the market generally or in an industry or market segment
rather than upon movements in the price of an individual security.
Accordingly, successful use by a Series of options on indices will be
subject to the Adviser's ability to predict correctly movements in the
direction of the market generally or in the direction of a particular
industry. This requires different skills and techniques than predicting
changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted
in certain circumstances, such as if trading were halted in a substantial
number of securities included in the index. If this occurred, a Series
would not be able to close out options which it had written or purchased
and, if restrictions on exercise were imposed, might be unable to exercise
an option it purchased, which would result in substantial losses to a
Series. However, it is the Fund's policy to write or purchase options only
on indices which include a sufficient number of securities so that the
likelihood of a trading halt in the index is minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance
and, unlike call writing on portfolio securities, cannot provide in advance
for its potential settlement obligation by holding the underlying
securities. Consequently, a Series will write call options on indices only
subject to the limitations described above.
Price movements in securities in a Series' portfolio will not correlate
perfectly with movements in the level of the index and, therefore, a Series
bears the risk that the price of the securities held by the Series may not
increase as much as the level of the index. In this event, the Series would
bear a loss on the call which would not be completely offset by movements
in the prices of a Series' portfolio securities. It is also possible that
the index may rise when the value of a Series' portfolio securities does
not. If this occurred, the Series would experience a loss on the call which
would not be offset by an increase in the value of its portfolio and might
also experience a loss in the market value of portfolio securities.
Unless a Series has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, a Series will be required to liquidate
portfolio securities in order to satisfy the exercise. Because an exercise
must be settled within hours after receiving the notice of exercise, if a
Series fails to anticipate an exercise, to the extent permissible, it may
have to borrow from a bank pending settlement of the sale of securities in
its portfolio and pay interest on such borrowing.
When a Series has written a call on an index, there is also a risk that the
market may decline between the time a Series has the call exercised against
it, at a price which is fixed as of the closing level of the index on the
date of exercise, and the time a Series is able to sell securities in its
portfolio. As with options on portfolio securities, a Series will not learn
that a call has been exercised until the day following the exercise date
but, unlike a call on a portfolio security where a Series would be able to
deliver the underlying security in settlement, a Series may have to sell
part of its portfolio securities in order to make settlement in cash, and
the price of such securities might decline before they could be sold.
If a Series exercises a put option on an index which it has purchased
before final determination of the closing index value for that day, it runs
the risk that the level of the underlying index may change before closing.
If this change causes the exercised option to fall "out-of-the-money" a
Series will be required to pay the difference between the closing index
value and the exercise price of the option (multiplied by the applicable
multiplier) to the assigned writer. Although a Series may be able to
minimize this risk by withholding exercise instructions until just before
the daily cutoff time or by selling rather than exercising an option when
the index level is close to the exercise price, it may not be possible to
eliminate this risk entirely because the cutoff times for index options may
be earlier than those fixed for other types of options and may occur before
definitive closing index values are announced.
Financial Futures Contracts and Related Options. The Theme Series and Small
Company Growth Series may use financial futures contracts and related options
to hedge against changes in the market value of its portfolio securities or
securities which it intends to purchase. Hedging is accomplished when an
investor takes a position in the futures market opposite to his cash market
position. There are two types of hedges--long (or buying) and short (or
selling) hedges. Historically, prices in the futures market have tended to
move in concert with cash market prices, and prices in the futures market
have maintained a fairly predictable relationship to prices in the cash
market. Thus, a decline in the market value of securities in a Series'
portfolio may be protected against to a considerable extent by gains realized
on futures contracts sales. Similarly, it is possible to protect against an
increase in the market price of securities which a Series may wish to
purchase in the future by purchasing futures contracts.
These Series may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade. Financial futures
contracts consist of interest rate futures contracts and securities index
futures contracts. A public market presently exists in interest rate futures
contracts covering long-term U.S. Treasury bonds, U.S. Treasury notes,
three-month U.S. Treasury bills and GNMA certificates. Securities index
futures contracts are currently traded with respect to the Standard & Poor's
500 Composite Stock Price Index and such other broad-based stock market
indices as the New York Stock Exchange Composite Stock Index and the Value
Line Composite Stock Price Index. A clearing corporation associated with the
exchange or board of trade on which a financial futures contract trades
assumes responsibility for the completion of transactions and also guarantees
that open futures contracts will be performed.
<PAGE>
In contrast to the situation when such Series purchases or sell a security,
no security is delivered or received by these Series upon the purchase or
sale of a financial futures contract. Initially, these Series will be
required to deposit in a segregated account with its custodian bank an amount
of cash, U.S. Treasury bills or liquid high grade debt obligations. This
amount is known as initial margin and is in the nature of a performance bond
or good faith deposit on the contract. The current initial margin deposit
required per contract is approximately 5% of the contract amount. Brokers may
establish deposit requirements higher than this minimum. Subsequent payments,
called variation margin, will be made to and from the account on a daily
basis as the price of the futures contract fluctuates. This process is known
as marking to market.
The writer of an option on a futures contract is required to deposit margin
pursuant to requirements similar to those applicable to futures contracts.
Upon exercise of an option on a futures contract, the delivery of the futures
position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on
the futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out
before the settlement date without the making or taking of delivery. Closing
out is accomplished by effecting an offsetting transaction. A futures
contract sale is closed out by effecting a futures contract purchase for the
same aggregate amount of securities and the same delivery date. If the sale
price exceeds the offsetting purchase price, the seller immediately would be
paid the difference and would realize a gain. If the offsetting purchase
price exceeds the sale price, the seller immediately would pay the difference
and would realize a loss. Similarly, a futures contract purchase is closed
out by effecting a futures contract sale for the same securities and the same
delivery date. If the offsetting sale price exceeds the purchase price, the
purchaser would realize a gain, whereas if the purchase price exceeds the
offsetting sale price, the purchaser would realize a loss.
Such Series will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly.
Limitations on Futures Contracts and Related Options. A Series may not engage
in transactions in financial futures contracts or related options for
speculative purposes but only as a hedge against anticipated changes in the
market value of its portfolio securities or securities which it intends to
purchase. A Series may not purchase or sell financial futures contracts or
related options if, immediately thereafter, the sum of the amount of initial
margin deposits on that Series' existing futures and related options
positions and the premiums paid for related options would exceed 2% of the
market value of that Series' total assets after taking into account
unrealized profits and losses on any such contracts. At the time of purchase
of a futures contract or a call option on a futures contract, an amount of
cash, U.S. Government securities or other appropriate high-grade debt
obligations equal to the market value of the futures contract minus a Series'
initial margin deposit with respect thereto will be deposited in a segregated
account with the Fund's custodian bank to collateralize fully the position
and thereby ensure that it is not leveraged.
The extent to which a Series may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal
Revenue Code for qualifications as a regulated investment company. See
"Taxes."
Risks Relating to Futures Contracts and Related Options. Positions in futures
contracts and related options may be closed out only on an exchange which
provides a secondary market for such contracts or options. A Series will
enter into an option or futures position only if there appears to be a liquid
secondary market. However, there can be no assurance that a liquid secondary
market will exist for any particular option or futures contract at any
specific time. Thus, it may not be possible to close out a futures or related
option position. In the case of a futures position, in the event of adverse
price movements a Series would continue to be required to make daily margin
payments. In this situation, if a Series has insufficient cash to meet daily
margin requirements it may have to sell portfolio securities at a time when
it may be disadvantageous to do so. In addition, a Series may be required to
take or make delivery of the securities underlying the futures contracts it
holds. The inability to close out futures positions also could have an
adverse impact on a Series' ability to hedge its portfolio effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse
movement in market prices, it can also preclude a hedger's opportunity to
benefit from a favorable market movement. In addition, investing in futures
contracts and options on futures contracts will cause a Series to incur
additional brokerage commissions and may cause an increase in a Series'
portfolio turnover rate.
The successful use of futures contracts and related options also depends on
the ability of the Adviser to forecast correctly the direction and extent of
market movements within a given time frame. To the extent market prices
remain stable during the period a futures contract or option is held by a
Series or such prices move in a direction opposite to that anticipated, a
Series may realize a loss on the hedging transaction which is not offset by
an increase in the value of its portfolio securities. As a result, a Series'
return for the period may be less than if is had not engaged in the hedging
transaction.
Utilization of futures contracts by a Series involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in
the price of the securities which are being hedged. If the price of the
futures contract moves more or less than the price of the securities being
hedged, a Series will experience a gain or loss which will not be completely
offset by movements
<PAGE>
in the price of the securities. It is possible that, where a Series has sold
futures contracts to hedge its portfolio against decline in the market, the
market may advance and the value of securities held in a Series' portfolio
may decline. If this occurred, a Series would lose money on the futures
contract and would also experience a decline in value in its portfolio
securities. Where futures are purchased to hedge against a possible increase
in the prices of securities before a Series is able to invest its cash (or
cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline; if a Series then determines not to
invest in securities (or options) at that time because of concern as to
possible further market decline or for other reasons, a Series will realize a
loss on the futures that would not be offset by a reduction in the price of
the securities purchased.
The market prices of futures contracts may be affected if participants in the
futures market also elect to close out their contracts through off-setting
transactions rather than to meet margin deposit requirements. In such case,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities rather
than to engage in closing transactions due to the resultant reduction in the
liquidity of the futures market. In addition, due to the fact that, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the cash market, increased
participation by speculators in the futures market could cause temporary
price distortions. Due to the possibility of price distortions in the futures
market and because of the imperfect correlation between movements in the
prices of securities and movements in the prices of futures contracts, a
correct forecast of market trends may still not result in a successful
hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Series
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of
an option on a futures contract would result in a loss to a Series while the
purchase or sale of the futures contract would not have resulted in a loss,
such as when there is no movement in the price of the underlying securities.
Leverage. The Fund may from time to time increase the Theme Series' and Small
Company Growth Series' ownership of securities holdings above the amounts
otherwise possible by borrowing from banks at fixed amounts of interest and
investing the borrowed funds. These Series will borrow only from banks, and
only if immediately after such borrowing the value of the assets of these
Series (including the amount borrowed) less its liabilities (not including
any borrowings) is at least three times the amount of funds borrowed for
investment purposes. The effect of this provision is to permit the Fund to
borrow up to 33-1/3% of the net assets of these Series, not including the
proceeds of any such borrowings. However, the amount of the borrowings will
be dependent upon the availability and cost of credit from time to time. If,
due to market fluctuations or other reasons, the value of such Series' assets
computed as provided above becomes at any time less than three times the
amount of the borrowings for investment purposes, these Series, within three
business days, is required to reduce bank debt to the extent necessary to
meet the required 300% asset coverage.
Interest on money borrowed will be an expense of these Series with respect to
which the borrowing has been made. Because such expense would not otherwise
be incurred, the net investment income of such Series is not expected to be
as high as it otherwise would be during periods when borrowings for
investment purposes are substantial.
Bank borrowings for investment purposes must be obtained on an unsecured
basis. Any such borrowing must also be made subject to an agreement by the
lender that any recourse is limited to the assets of the Series with respect
to which the borrowing has been made.
Any investment gains made with the additional monies borrowed in excess of
interest paid will cause the net asset value of these Series' shares to rise
faster than would otherwise be the case. On the other hand, if the investment
performance of the additional securities purchased fails to cover their cost
(including any interest paid on the monies borrowed) to these Series, the net
asset value of these Series will decrease faster than would otherwise be the
case.
Foreign Securities. Each of the Series may purchase foreign securities,
including those issued by foreign branches of U.S. banks. In any event, such
investments in foreign securities will be limited to 25% of the total net
asset value of each Series. Investments in foreign securities, particularly
those of non-governmental issuers, involve considerations which are not
ordinarily associated with investing in domestic issues. These considerations
include changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information,
the difficulty of interpreting financial information prepared under foreign
securities markets, the impact of political, social or diplomatic
developments, difficulties in invoking legal process abroad and the
difficulty of assessing economic trends in foreign countries.
The Fund may use a foreign custodian in connection with its purchases of
foreign securities and may maintain cash and cash equivalents in the care of
a foreign custodian. The amount of cash or cash equivalents maintained in the
care of eligible foreign custodians will be limited to an amount reasonably
necessary to effect the Fund's foreign securities transactions. The use of a
foreign custodian invokes considerations which are not ordinarily associated
with domestic custodians. These considerations include the possibility of
expropriations, restricted access to books and records of the foreign
custodian, inability to recover assets that are lost while under the control
of the foreign custodian, and the impact of political, social or diplomatic
developments.
Lower Rated Convertible Securities. Convertible securities which are not
rated in the four highest categories, in which a Series may invest, are
predominantly speculative with respect to the issuer's capacity to repay
principal and interest and may include issues on which the issuer defaults.
<PAGE>
Lending Portfolio Securities. In order to increase its return on investments,
the Theme Series and Small Company Growth Series may make loans of its
portfolio securities, as long as the market value of the loaned securities
does not exceed 25% of the market or other fair value of that Series' total
assets. Loans of portfolio securities will always be fully collateralized at
no less than 100% of the market value of the loaned securities (as marked to
market daily) and made only to borrowers considered by the Adviser to be
creditworthy. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities and possibly the loss of the collateral if
the borrower fails financially.
Foreign Currency Transactions
The Small Company Growth and Theme Series (each a "Foreign Currency
Portfolio") each may engage in foreign currency transactions. The following
is a description of these transactions:
Forward Foreign Currency Exchange Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days ("Term")
from the date of the contract agreed upon by the parties, at a price set at
the time of the contract. These contracts are traded directly between
currency traders (usually large commercial banks) and their customers.
Neither Series intends to enter into such forward contracts if it would
have more than 15% of the value of its total assets committed to such
contracts on a regular or continuous basis. Neither Series will enter into
such forward contracts or maintain a net exposure in such contracts where
it would be obligated to deliver an amount of foreign currency in excess of
the value of its portfolio securities and other assets denominated in that
currency. PIC believes that it is important to have the flexibility to
enter into such forward contracts when it determines that to do so is in
the best interests of either Series. The Fund's custodian bank will
segregate cash or liquid high quality debt securities in an amount not less
than the value of a Foreign Currency Portfolio's total assets committed to
forward foreign currency exchange contracts entered into for the purchase
of a foreign currency. If the value of the securities segregated declines,
additional cash or securities will be added so that the segregated amount
is not less than the amount of the Foreign Currency Portfolio's commitments
with respect to such contracts. Generally, neither Foreign Currency
Portfolio enters into a forward contract with a term longer than one year.
Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at
the exercise price at a specified date or during the option period. A call
option gives its owner the right, but not the obligation, to buy the
currency, while a put option gives its owner the right, but not the
obligation, to sell the currency. The option seller (writer) is obligated
to fulfill the terms of the option sold if it is exercised. However, either
seller or buyer may close its position during the option period for such
options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing
a foreign currency option can protect a Foreign Currency Portfolio against
an adverse movement in the value of a foreign currency, it does not limit
the gain which might result from a favorable movement in the value of such
currency. For example, if a Foreign Currency Portfolio were holding
securities denominated in an appreciating foreign currency and had
purchased a foreign currency put to hedge against a decline in the value of
the currency, it would not have to exercise its put. Similarly, if a
Foreign Currency Portfolio had entered into a contract to purchase a
security denominated in a foreign currency and had purchased a foreign
currency call to hedge against a rise in the value of the currency but
instead the currency had depreciated in value between the date of purchase
and the settlement date, the Foreign Currency Portfolio would not have to
exercise its call but could acquire in the spot market the amount of
foreign currency needed for settlement.
Foreign Currency Futures Transactions. Each Foreign Currency Portfolio may
use foreign currency futures contracts and options on such futures
contracts. Through the purchase or sale of such contracts, a Foreign
Currency Portfolio may be able to achieve many of the same objectives
attainable through the use of foreign currency forward contracts, but more
effectively and possibly at a lower cost.
Unlike forward foreign currency exchange contracts, foreign currency
futures contracts and options on foreign currency futures contracts are
standardized as to amount and delivery period and are traded on boards of
trade and commodities exchanges. It is anticipated that such contracts may
provide greater liquidity and lower cost than forward foreign currency
exchange contracts.
Regulatory Restrictions. To the extent required to comply with Securities
and Exchange Commission Release No. IC-10666, when purchasing a futures
contract or writing a put option, each Foreign Currency Portfolio will
maintain in a segregated account cash or liquid high-grade debt securities
equal to the value of such contracts.
To the extent required to comply with Commodity Futures Trading Commission
Regulation 4.5 and thereby avoid "commodity pool operator" status, a
Foreign Currency Portfolio will not enter into a futures contract or
purchase an option thereon if immediately thereafter the initial margin
deposits for futures contracts (including foreign currency and all other
futures contracts) held by the Foreign Currency Portfolio plus premiums
paid by it for open options on futures would exceed 5% of the Foreign
Currency Portfolio's total assets. Neither Foreign Currency Portfolio will
engage in transactions in financial futures contracts or options thereon
for speculation, but only to attempt to hedge against changes in market
conditions affecting the values of securities which the Series holds or
intends to purchase. When futures contracts or options thereon are
purchased to protect
<PAGE>
against a price increase on securities intended to be purchased later, it
is anticipated that at least 75% of such intended purchases will be
completed. When other futures contracts or options thereon are purchased,
the underlying value of such contracts will at all times not exceed the sum
of: (1) accrued profit on such contracts held by the broker; (2) cash or
high quality money market instruments set aside in an identifiable manner;
and (3) cash proceeds from investments due in 30 days.
Investing in SmallCap Issuers. Under normal market conditions, the Small
Company Growth Series expects to invest at least 65% of its assets in equity
securities of small capitalization companies. Market capitalizations of such
issuers are determined at the time of purchase. While the issuers in which
the Series will primarily invest may offer greater opportunities for capital
appreciation than larger capitalization issuers, investments in smaller
companies may involve greater risks and thus may be considered speculative.
For example, small companies may have limited product lines, markets or
financial resources, or they may be dependent on a limited management group.
Full development of these companies takes time and, for this reason, the
Series should be considered as a long-term investment and not as a vehicle
for seeking short-term profits, nor should an investment in the Series be
considered a complete investment program. In addition, many small company
stocks trade less frequently and in smaller volume, and may be subject to
more abrupt or erratic price movements than stocks of large companies. The
securities of small companies may also be more sensitive to market changes
than the securities of large companies. These factors may result in
above-average fluctuations in the net asset value of the Series' shares. The
Series is not an appropriate investment for individual investors requiring
safety of principal or a predictable return of income from their investment.
Derivative Investments. In order to seek to hedge various portfolio
positions, including to hedge against price movements in markets in which the
Fund anticipates increasing its exposure, the Fund may invest in certain
instruments which may be characterized as derivative investments. These
investments include various types of interest rate transactions, options and
futures. Such investments also may consist of indexed securities, including
inverse securities. The Fund has express limitations on the percentage of its
assets that may be committed to certain of such investments. Other of such
investments have no express quantitative limitations, although they may be
made solely for hedging purposes, not for speculation, and may in some cases
require limitations as to the type of permissible counter-party to the
transaction. Interest rate transactions involve the risk of an imperfect
correlation between the index used in the hedging transactions and that
pertaining to the securities which are the subject of such transactions.
Similarly, utilization of options and futures transactions involves the risk
of imperfect correlation in movements in the price of options and futures and
movements in the price of the securities or interest rates which are the
subject of the hedge. Investments in indexed securities, including inverse
securities, subject the Fund to the risks associated with changes in the
particular indices, which may include reduced or eliminated interest payments
and losses of invested principal.
PERFORMANCE INFORMATION
The Fund may, from time to time, include its total return in advertisements
or reports to shareholders or prospective investors.
Standardized quotations of average annual total return for Class A or Class B
Shares of a Series will be expressed in terms of the average annual
compounded rate of return for a hypothetical investment in either Class A or
Class B Shares of a Series over periods of 1, 5 and 10 years or up to the
life of the class of shares of a Series, 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 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 Shares, and
assume that all dividends and distributions on Class A and Class B Shares are
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 Stock Index (the "S&P 500"), Dow Jones Industrial
Average, Europe Australia Far East Index (EAFE), Consumer's Price Index,
Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P 500
is a commonly quoted market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 common stocks relative to the
base period 1941-43. The S&P 500 is composed almost entirely of common stocks
of companies listed on the New York Stock Exchange, although the common
stocks of a few companies listed on the American Stock Exchange or traded
over the counter are included. The 500 companies represented include 400
industrial, 60 transportation and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange.
<PAGE>
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 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 Index, Dow Jones Industrial Average, First Boston
High Yield Index and Salomon Brothers Corporate and Government Bond Indices.
For Equity Opportunities Series for the 1, 5 and 10 year periods ended April
30, 1995, the average annual total return of the Class A Shares was 4.04%,
9.49% and 11.72%, respectively. Class B total return since inception 7/16/94
was 3.69%. For the 1, 5 and 10 year periods ended April 30, 1994 the proforma
average annual total return of the Class B Shares was unavailable.
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 Series' 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 4.75% and assumes reinvestment of all income dividends and
capital gain distributions during the period. Based on the foregoing for the
Equity Opportunities Series, the Class A Share's aggregate total return
quotation for the period commencing August 1, 1944 $10,000 and ending April
30, 1994 was 15.62%.
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 TRANSACTIONS AND BROKERAGE
The Advisers place 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 Advisers to seek the best prices and execution of
orders and to negotiate brokerage commissions which the Advisers' 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 Advisers, the rate is deemed by the Advisers 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
Advisers after the transaction has been consummated. If the Advisers more
than occasionally differ with the broker's appraisal of opportunity or value,
the broker would not be selected to execute trades in the future. The
Advisers believe 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 Advisers' 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 Advisers. The Advisers do 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 Advisers 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
<PAGE>
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 Fund and its shareholders.
During the fiscal years ended April 30, 1993, 1994 and 1995, brokerage
commissions paid by the Fund totalled $257,471, $510,377 and $1,545,026,
respectively. Of the total amounts paid in the fiscal years ended April 30,
1993, 1994 and 1995, $98,822, $5,630 and 0, respectively or 0.05%, 0.00% and
0.00%, respectively of Fund assets were paid to the former principal
underwriter in accordance and consistent with internal procedures governing
such affiliated transactions in accordance with regulatory requirements.
SERVICES OF THE ADVISERS
The offices of Phoenix Investment Counsel, Inc., (PIC) and National
Securities & Research Corporation ("National") are located at One American
Row, Hartford, Connecticut 06115-2520. In addition to the Equity
Opportunities Series, National serves as investment adviser to Phoenix Asset
Reserve, Phoenix California Tax Exempt Bonds, Inc., Phoenix Income and Growth
Fund, Phoenix Multi-Sector Fixed Income Fund, Inc., and Phoenix Worldwide
Opportunities Fund. In addition to the Theme Series and the Small Company
Growth Series, PIC serves as investment adviser to Phoenix Edge Series Fund
(other than the Real Estate Series), Phoenix Series Fund, Phoenix
Multi-Portfolio Fund (other than the Real Estate Securities Portfolio), and
Phoenix Total Return Fund Inc.
National is an indirect wholly-owned subsidiary of Phoenix Home Life Mutual
Insurance Company ("Phoenix Home Life"). All of the outstanding stock of PIC
is owned by Phoenix Equity Planning Corporation ("Equity Planning"), an
indirect subsidiary of Phoenix Home Life.
Phoenix Home Life is a mutual insurance company engaged in the insurance and
investment businesses. Phoenix Home Life's principal place of business is
located at One American Row, Hartford, Connecticut, where the company manages
combined assets of approximately $13 billion through advisory accounts and
mutual funds.
The Advisers provide certain services and facilities required to carry on the
day-to-day operations of the Fund (for which they receive a management fee)
other than the costs of printing and mailing proxy materials, reports and
notices to shareholders; legal, auditing and accounting services; regulatory
filing fees and expenses of printing the Fund's registration statements (but
the Underwriter purchases such copies of the Fund's prospectuses and reports
and communications to shareholders as it may require for sales purposes at
printer's over-run cost); insurance expense; association membership dues;
brokerage fees; and taxes.
Each Series will pay expenses incurred in its own operation and will also pay
a portion of the Fund's administration expenses allocated on the basis of the
asset values of the respective Series.
As compensation for its services, National receives a fee for the Equity
Opportunities Series, which is accrued daily against the value of the Fund's
net assets and is paid by the Series on the last day of the month. The fee is
computed at an annual rate of .70% of the Fund's average daily net assets of
up to $1 billion, .65% of the Series' average daily net assets from $1
billion to $2 billion, and .60% of the Series' average net assets in excess
of $2 billion. Prior to January 1, 1994, the fee was computed at the annual
rate of .75% per annum on the first $410,000,000 of the aggregate daily net
assets of the Series; .70% on the next $300,000,000; .65% on the next
$200,000,000; .60% on the next $200,000,000; .55% on the next $100,000,000;
.50% on the next $100,000,000; .45% on the next $100,000,000; .40% on the
next $100,000,000 and .375% of 1% per annum on the aggregate average daily
net assets of the Series in excess of $1,510,000,000. For the fiscal years
1993, 1994 and 1995 the net management fees paid by the Series to the Adviser
were $1,569,220, $1,571,191 and $1,252,747, respectively.
For managing the investments, or directing the management of the investments
of the Theme Series and the Small Company Growth Series, PIC is entitled to a
monthly fee at the annual rate of 0.75% of the average daily net asset values
of the Series up to $1 billion; 0.70% of such value between $1 billion and $2
billion; and 0.65% of such value in excess of $2 billion.
The Adviser has agreed that if, in any fiscal year, the aggregate expenses of
the Fund, exclusive of taxes, brokerage, interest and (with the prior consent
of any necessary state securities commissions) extraordinary expenses, but
including the management fee, exceed the most restrictive expense limitations
applicable to the Fund under state securities laws or published regulations
thereunder, the Adviser will refund to the Fund the excess over such amount.
Currently, the most restrictive of such limitations would require the Adviser
to reimburse the Fund to the extent that in any fiscal year such aggregate
expenses exceed 2.5% of the first $30,000,000 of average net assets; 2.0% of
the next $70,000,000 and 1.5% of any amount of the average net assets in
excess of $100,000,000.
The Management Agreement with National was approved by the Trustees of the
Fund on March 16, 1993 and by the shareholders of the Fund on April 30, 1993.
The Management Agreement shall continue in effect until May 14, 1995 and
thereafter for successive annual periods, provided that such continuance is
specifically approved annually by a majority of the Trustees who are not
interested
<PAGE>
persons of the parties thereto (as defined in the 1940 Act) and by either (a)
the Trustees of the Fund or (b) vote of a majority of the outstanding
securities of the Fund (as defined in the 1940 Act). The Management Agreement
may be terminated without penalty at any time by the Trustees or by a vote of
a majority of the outstanding voting securities of the Fund upon 60 days
written notice addressed to the Adviser at its principal place of business;
and by the Adviser upon 60 days written notice addressed to the Fund at its
principal place of business. The Management Agreement will terminate
automatically in the event of its "assignment" as defined in Section 2(a)(4)
of the 1940 Act. Shareholders were asked to approve the Management Agreement
at a Special Meeting held on April 30, 1993 due to a change in control of
National which resulted in the termination of the Management Agreement which
was previously in effect.
NET ASSET VALUE
The net asset value per share of the Fund is computed at the close of the
general trading session of the New York Stock Exchange by dividing the value
of the Fund's securities, plus any cash and other assets (including dividends
and interest accrued but not collected) less all liabilities (including
accrued expenses), by the number of shares of the Fund outstanding on each
day that the New York Stock Exchange (the "Exchange"), is scheduled to be
open. See the Prospectus for additional information. See "Net Asset Value" in
the Prospectus.
HOW TO BUY SHARES
The Prospectus includes information as to the offering price of shares of the
Portfolios, the sales charge, if any, included in the offering price, and the
minimum initial and subsequent investments which may be made in a Series.
Shares may be purchased from investment dealers having sales agreements with
the Underwriter at the public offering price (the net asset value next
computed following receipt of a purchase application in proper form by State
Street Bank and Trust Company, plus the applicable sales charge). The minimum
initial investment is $500 ($25 if using the bank draft investing program
designated "Investo-Matic") and the minimum subsequent investment amount is
$25. In the case of employee payroll deduction plans, organized group plans
and other benefit programs or arrangements offered by certain dealers, the
minimum initial investment may be fixed from time to time at such lesser
amounts as the Adviser in its sole discretion may determine, and may in all
cases, be waived from time to time by the Adviser, in its sole discretion.
See the Fund's current Prospectus.
ALTERNATIVE PURCHASE ARRANGEMENTS
Each Series is authorized to offer two classes of shares. Shares 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").
Class A Shares
An investor who elects the initial sales charge alternative acquires
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 an ongoing
distribution attributable to the Class A Shares. However, for the
calendar year 1994, the Underwriter has voluntarily agreed to limit the
distribution services fee for Class A Shares to 0.25%. In addition,
certain purchases of Class A Shares qualify for reduced initial sales
charges. See the Fund's current Prospectus.
Class B Shares
An investor who elects the deferred sales charge alternative acquires
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. See the Fund's current
Prospectus.
Class B Shares are subject to an ongoing distribution services fee at an
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 services fee 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, in the
circumstances and subject to the qualifications described in the Fund's
Prospectus. 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 Underwriter to have been
compensated for distribution expenses related to the Class B Shares from
most of the burden of such distribution related expenses. See "Conversion
Feature," on page 6.
The alternative purchase arrangement permits 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
<PAGE>
distributions in cash or to reinvest them in additional shares of the Series,
and other circumstances. Investors should consider whether, during the
anticipated life of their investment in the Series, the accumulated
continuing distribution services fee and contingent deferred sales charges on
Class B Shares prior to conversion would be less than the initial sales
charge and accumulated distribution services fee on Class A Shares purchased
at the same time, and to what extent such differential would be offset by the
lower expenses attributable to Class A Shares.
Class A Shares are subject to a lower distribution services fee and,
accordingly, pay correspondingly higher dividends, to the extent any
dividends are paid, per share. However, because initial sales charges are
deducted at the time of purchase, such investors would not have all their
funds invested initially and, therefore, would initially own fewer shares.
Investors not qualifying for reduced initial sales charges who expect to
maintain their investment for an extended period of time might consider
purchasing Class A Shares because the accumulated continuing distribution
charges on Class B Shares may exceed the initial sales charge on Class A
Shares during the life of the investment. Again, however, such investors must
weigh this consideration against the fact that, because of such initial sales
charges, not all their funds will be invested initially. However, other
investors might determine that it would be more advantageous to purchase
Class B Shares to have all their funds invested initially, although remaining
subject to higher continuing distribution charges and, for a five-year
period, being subject to a contingent deferred sales charge.
The distribution expenses incurred by the Underwriter in connection with the
sale of the shares will be paid, in the case of Class A Shares, from the
proceeds of the initial sales charge and the ongoing distribution services
fee and, in the case of Class B Shares, from the proceeds of the ongoing
distribution services fee and the contingent deferred sales charge incurred
upon redemption within five years of purchase. Sales personnel of
broker-dealers distributing the Fund's shares may receive differing
compensation for selling Class A or Class B Shares. Investors should
understand that the purpose and function of the contingent deferred sales
charge and ongoing distribution services fee with respect to the Class B
Shares are the same as those of the initial sales charge and ongoing
distribution services fees with respect to the Class A Shares.
Dividends paid by the Series, if any, with respect to Class A and Class B
Shares will be calculated in the same manner at the same time on the same
day, except that the higher distribution services fee and any incremental
transfer agency costs relating to Class B Shares will be borne exclusively by
that class. See "Dividends, Distributions and Taxes."
The Trustees of the Fund have determined that currently no conflict of
interest exists between the Class A and Class B Shares. On an ongoing basis,
the Trustees of the Fund, pursuant to their fiduciary duties under the 1940
Act and state laws, will seek to ensure that no such conflict arises.
Conversion Feature
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
services fee. 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. The purpose of the conversion feature is to relieve the holders
of Class B Shares that have been outstanding for a period of time sufficient
for the Underwriter to have been compensated for distribution expenses
related to the Class B Shares from most of the burden of such
distribution-related expenses.
For purposes of conversion to Class A 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 Shares in the sub-account will also convert to Class A.
The conversion of Class B Shares to Class A Shares is subject to the
continuing availability of an opinion of counsel or a ruling of the Internal
Revenue Service to the effect that (i) the assessment of the higher
distribution services fee and transfer agency costs with respect to Class B
Shares does not result in the Fund's dividends or distributions constituting
"preferential dividends" under the Internal Revenue Code of 1986, as amended
(the "Code"), and (ii) that the conversion of shares does not constitute a
taxable event under federal income tax law. The Fund has not sought opinions
of counsel as to these matters or from the Internal Revenue Service (the
"IRS"). While rulings as to preferential dividends have been issued
previously by the IRS, complete assurance cannot of course be given that the
Fund eventually will request or receive such ruling. While an adverse
determination by the IRS currently is not expected, the Fund may be required
to reassess (and reverse the right to do so) its dual share structure were
the IRS not to rule favorably since that could impact on the Fund's ability
to qualify as a regulated investment company. In addition, were the IRS not
to rule favorably, the Fund might make additional distributions if doing so
would assist in complying with the Fund's general practice of distributing
sufficient income to reduce or eliminate U.S. federal taxes. The conversion
of Class B Shares to Class A Shares may be suspended if such an opinion or
ruling is no longer available. In that event, no further conversions of Class
B Shares would occur, and shares might continue to be subject to the higher
distribution services fee for an indefinite period which may extend beyond
the period ending eight years after the end of the month in which the shares
were issued.
<PAGE>
EXCHANGE PRIVILEGES
Subject to limitations, shareholders may exchange Class A or Class B Shares
held in book-entry form for shares of the same class of other Phoenix Funds,
provided the following conditions are met: (1) the shares that will be
acquired in the exchange (the "Acquired Shares") are available for sale in
the shareholder's state of residence; (2) the Acquired Shares are the same
class as the shares to be surrendered (the "Exchanged Shares"); (3) the
Acquired Shares will be registered to the same shareholder account as the
Exchanged Shares; (4) the account value of the Fund whose shares are to be
acquired must equal or exceed the minimum initial investment amount required
by that Fund after the exchange is implemented; and (5) if a shareholder has
elected not to utilize the Telephone Exchange Privilege (see below), a
properly executed exchange request must be received by Equity Planning. Other
restrictions affecting exchanges are described in the Prospectus of the
applicable Phoenix Fund(s).
Subject to the above requirements for an exchange, a shareholder or his/her
registered representative may, by telephone or written notice, elect to have
Class A or Class B Shares of the Fund exchanged for the same class of shares
of another Phoenix Fund automatically on a monthly, quarterly, semi-annual or
annual basis or may cancel the privilege ("Systematic Exchange").
Shareholders who maintain an account balance in the Fund of at least $5,000,
or $2,000 for tax qualified retirement benefit plans (calculation on the
basis of the net asset value of the shares held in a single account), may
direct that shares of the Fund be automatically exchanged at predetermined
intervals for shares of the same class of another Phoenix Fund. If the
shareholder is participating in the Self Security program offered by Phoenix
Home Life, it is not necessary to maintain the above account balances in
order to use the Systematic Exchange privilege.
Such exchanges will be executed upon the close of business on the 10th of a
month and if the 10th falls on a holiday or weekend, then at the close of
business on the next succeeding business day. The minimum initial and
subsequent amount that may be exchanged under the Systematic Exchange is $25.
Systematic Exchange forms are available from Equity Planning.
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 Class B Share exchanges, the contingent deferred sales
charge schedule of the original shares purchased continues to apply.
The exchange of shares from one fund to another is treated as sale of the
Exchanged Shares and a purchase of the Acquired Shares for Federal income tax
purposes. The shareholder may, therefore, realize a taxable gain or loss. See
"Dividends, Distributions and Taxes" of the Prospectus for information
concerning the Federal income tax treatment of a disposition of shares. It is
the policy of the Adviser to discourage and prevent frequent trading by
shareholders among the Fund and other Phoenix Funds in response to market
fluctuations. The Fund reserves the right to terminate or modify its exchange
privileges at any time upon giving prominent notice to shareholders at least
60 days in advance.
Each Phoenix Fund has different investment objectives and policies.
Shareholders should, therefore, obtain and review the prospectus of the fund
into which the exchange is to be made before any exchange requests are made.
REDEMPTION OF 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 or more. See the Prospectus for further
information.
Redemptions by Class B shareholders will be subject to the applicable
deferred sales charge, if any.
Each shareholder account in the Fund which has been in existence for at least
one year and has a value of less than $200 may be redeemed upon the giving of
not less than 30 days written notice to the shareholder mailed to the address
of record. During the 60 day period the shareholder has the right to add to
the account to bring its value to $200 or more. See the current Prospectus
for more information.
Telephone Redemptions
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.
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 this privilege.
<PAGE>
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 must, among other things, derive in each taxable
year at least 90% of its gross income from dividends, interest and gains from
the sale or other disposition of securities and derive less than 30% of its
gross income each taxable year as gains (without deduction for losses) from
the sale or other disposition of securities held for less than three months.
If in any taxable year a 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 the Fund's net ordinary
income, with certain adjustments, for such calendar year, 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 calendar
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 and December of any year will be
deemed to have been received by, and will be taxable to shareholders as of
December 31 of such year, provided that the dividend is actually paid by the
Fund before February 1, of the following year.
The Fund's policy is to distribute to its shareholders all or substantially
all investment company taxable income as defined in the Code and any net
realized capital gains for each year and consistent therewith to meet the
distribution requirements of Part I of subchapter M of the Code. The Fund
intends to meet the other requirements of Part I of subchapter M, including
the requirements with respect to diversification of assets and sources of
income, so that the Fund will pay no taxes on net investment income and net
realized capital gains distributed to shareholders. One of these requirements
as stated above is that less than 30% of the Fund's gross income must be
derived from gains from the sale or other disposition of securities and
certain assets (including certain options) held for less than three months.
Accordingly, the Fund may be restricted in certain activities, including: (i)
writing of options on securities which have been held less than three months,
(ii) writing of options which expire in less than three months, and (iii)
effecting closing purchase transactions with respect to options which have
been written less than three months prior to such transactions.
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 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 tax basis of the shares
disposed of all or a portion of the sales 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 shares, 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.
Transactions in options on stock indices are subject to the Code rules of
section 1256. Pursuant to these rules, such options, whether said 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, with 40% of any resulting
gain or loss treated as short-term and 60% long-term.
Important Notice Regarding Taxpayer IRS Certification
Pursuant to IRS Regulations, the Funds may be required to withhold 31% of all
reportable payments including any taxable dividends, capital gains
distributions or share redemption proceeds, for an account which does not
have a taxpayer identification number or social security number and certain
required certifications. The Fund reserves the right to refuse to open an
account for any person failing to provide a taxpayer identification number
along with the required certifications.
The Fund furnishes all shareholders, within 31 days after the end of the
calendar year, with information which is required by the Internal Revenue
Service for preparing income tax returns.
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
<PAGE>
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund and other Phoenix Funds may be offered in connection with
employer-sponsored 401(k) plans. National and its affiliates may provide
administrative services to these plans and to their participants, in addition
to the services that National and its affiliates provide to the Phoenix
Funds, and may receive compensation therefor. For information on the terms
and conditions applicable to employee participation in such plans, including
information on applicable plan administrative charges and expenses,
prospective investors should consult the plan documentation and employee
enrollment information which is available from participating employers.
THE NATIONAL DISTRIBUTOR
Pursuant to an Underwriting Agreement with the Fund, Phoenix Equity Planning
Corporation (the "Underwriter"), an indirect wholly-owned subsidiary of
Phoenix Home Life and an affiliate of National, serves as underwriter for the
Fund. The address of the Underwriter is P.O. Box 2200, 100 Bright Meadow
Blvd., Enfield, Connecticut 06083-2200. As such, the Underwriter conducts a
continuous offering pursuant to a "best efforts" arrangement requiring the
Underwriter to take and pay for only such securities as may be sold to the
public. During the fiscal years 1993, 1994 and 1995, purchasers of the Fund
shares paid aggregate sales charges of $64,813, $38,910 and $30,721,
respectively, of which the principal Underwriter for the Fund received net
commissions of $6,900, $5,120 and $9,792, respectively, for its services, the
balance being paid to dealers. The fees were used to compensate sales and
services person for sell shares of the Fund and for providing services to
shareholders. In addition, the fees were used to compensate the Underwriter
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 Underwriter, 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 Plan or in any related agreements. The
Underwriting Agreement will terminate automatically in the event of its
assignment.
Dealers with whom the Underwriter has entered into sales agreements receive
sales charges in accordance with the commission table set forth in the
Prospectus. The Underwriter may from time to time pay, from its own resources
or pursuant to the Plan of Distribution described below, a bonus or other
incentive to dealers (other than the Underwriter) which employ a registered
representative who sells a minimum dollar amount of the shares of the Fund
during a specific period of time. Such bonus or other incentive may take the
form of payment for travel expenses, including lodging, incurred in
connection with trips taken by qualifying registered representatives and
members of their families to places within or without the United States or
other bonuses such as gift certificates or the cash equivalent of such
bonuses. The Underwriter may, from time to time, reallow the entire portion
of the sales charge 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.
PLANS OF DISTRIBUTION
The Fund has adopted separate distribution plans under Rule 12b-1 of the 1940
Act for each class of shares of each Series of the Fund (the "Class A Plan",
the "Class B Plan", and collectively the "Plans"). The Plans permit the Fund
to reimburse the Underwriter for expenses incurred in connection with
activities intended to promote the sale of shares of each class of shares of
the Fund. For fiscal year 1996, the Underwriter has voluntarily agreed to
limit the Rule 12b-1 fee for Class A Shares to 0.25%.
Pursuant to the Class A Plan, the Fund may reimburse the Underwriter for
actual expenses of the Underwriter up to .30% of the average daily net assets
of the Fund's Class A Shares. Under the Class B Plan, the Fund may reimburse
the Underwriter monthly for actual expense of the Underwriter up to 1.00% of
the average daily net assets of the Fund's Class B Shares. Expenditures under
the Plans shall consist of: (i) commissions to sales personnel for selling
shares of the Fund (including underwriting fees and financing expenses
incurred in connection with the sale of Class B Shares); (ii) compensation,
sales incentives and payments to sales, marketing and service personnel;
(iii) payments to broker-dealers and other financial institutions which have
entered into agreements with the Underwriter in the form of the Dealer
Agreement for Phoenix Funds for services rendered in connection with the sale
and distribution of shares of the Fund; (iv) payment of expenses incurred in
sales and promotional activities, including advertising expenditures related
to the Fund; (v) the costs of preparing and distributing promotional
materials; (vi) the cost of printing the Fund's Prospectus and Statement of
Additional Information for distribution to potential investors; and (vii)
such other similar services that the Trustees of the Fund determine are
reasonably calculated to result in the sale of shares of the Fund; provided
however, a portion of such amount paid to the Distributor, which portion
shall be equal to or less than 0.25% annually of the average daily net assets
of the Fund shares may be paid for reimbursing the costs of providing
services to the shareholders, including assistance in connection with
inquiries related to shareholder accounts (the "Service Fee").
In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Underwriter,
such as services to the Fund's shareholders; or services providing the Fund
with more efficient methods of
<PAGE>
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.
The fee received by the Underwriter under the early years of the Plans is not
likely to reimburse the Underwriter for the total distribution expenses it
will actually incur as a result of the Fund having fewer assets and the
Underwriter incurring greater promotional expenses during the start-up phase.
No amounts paid or payable by the Fund under the Plan for Class A Shares may
be used to pay for, or reimburse payment for, sales or promotional services
or activities unless such payment or reimbursement takes place prior to the
earliest of (a) the last day of the one year period commencing on the last
day of the calendar quarter during which the specific service or activity was
performed, or (b) the last day of the one year period commencing on the last
day of the calendar quarter during which payment for the services or activity
was made by a third party on behalf of the Fund. The Class B Plan, however,
does not limit the reimbursement of distribution related expenses to expenses
incurred in specified time periods. If the Plans are terminated in accordance
with their terms, the obligations of the Fund to make payments to the
Underwriter pursuant to the Plans will cease and the Fund will not be
required to make any payments past the date on which each Plan terminates.
For the fiscal year ended April 30, 1995, the Fund paid Rule 12b-1 Fees in
the amount of 448,736, of which the principal underwriter received 0 and
unaffiliated broker-dealers received 448,736. The Rule 12b-1 payments to the
principal underwriter for the fiscal year ended April 30, 1995 were used for
compensation of sales personnel.
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 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 provides that while it is 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 Fund.
The National Association of Securities Dealers (the "NASD"), recently
approved certain amendments to the NASD's mutual fund maximum sales charge
rule. The amendments would, under certain circumstances, regard distribution
fees to be asset-based sales charges subject to NASD sales load limits. An
amendment to the NASD's maximum sales charge rule may require the Trustees to
amend the Plan.
<PAGE>
TRUSTEES AND OFFICERS
The Trustees and Officers of the Fund and their business affiliations for the
past five years are set forth below and, unless otherwise noted, the address
of each executive officer and Trustee is One American Row, Hartford,
Connecticut, 06115. On September 1, 1994, the shareholders elected to fix the
number of Trustees at ten and to elect such number of Trustees. On February
15, 1995, the Trustees voted to increase the number of Trustees from ten to
eleven and to appoint Lowell P. Weicker, Jr. to fill the vacancy caused by
the increase. The Trustees and executive officers are listed below:
<TABLE>
<CAPTION>
Positions
Held
With the Principal Occupations
Name and Address Fund During the Past 5 Years
- ------------------------ ----------- ---------------------------------------------------------------
<S> <C> <C>
C. Duane Blinn Trustee Partner in the law firm of Day, Berry & Howard.
Day, Berry & Howard Director/Trustee, Phoenix Funds (1980-present).
CityPlace Director/Trustee, the National Affiliated Investment
Hartford, CT 06103 Companies (until 1993).
Robert Chesek Trustee Trustee/Director, Phoenix Funds (1981-present) and Chairman
49 Old Post Road (1989-1994). Director/Trustee, the National Affiliated
Wethersfield, CT 06109 Investment Companies (until 1993). Vice President, Common
Stock, Phoenix Home Life Mutual Insurance Company
(1980-1994).
E. Virgil Conway Trustee Trustee/Director, Consolidated Edison Company of New York,
9 Rittenhouse Road Inc. (1970-present), Pace University (1978-present), Atlantic
Bronxville, NY 10708 Mutual Insurance Company (1974-present), HRE Properties
(1989-present), Greater New York Councils, Boy Scouts of
America (1985-present), Union Pacific Corp. (1978-present),
Atlantic Reinsurance Company (1986-present), Blackrock Fund
for Fannie Mae Mortgage Securities (Advisory Director)
(1989-present), Centennial Insurance Company, Josiah Macy,
Jr., Foundation, and The Harlem Youth Development Foundation.
Board Member, Metropolitan Transportation Authority
(1992-present). Chairman, Audit Committee of the City of New
York (1981-present). Director/Trustee, the National
Affiliated Investment Companies (until 1993).
Director/Trustee, Phoenix Funds (1993-present). Accuhealth
(1994-present), Trism, Inc. (1994-present), Director, Realty
Foundation of New York (1972-present) and the New York
Housing Partnership Development Corp. (1981-present).
Advisory Director, Fund Directions (1993-present). Former
Director, New York Chamber of Commerce and Industry
(1974-1990).
Harry Dalzell-Payne Trustee Director/Trustee, Phoenix Funds (1983-present). Director,
330 East 39th Street Farragut Mortgage Co., Inc. (1991-1994). Director/Trustee,
Apartment 29G the National Affiliated Investment Companies (1983-1993).
New York, NY 10022 Consultant, The Levett Group Holding, Inc. (1989-1990).
Independent real estate market consultant (1982-1990).
Formerly a Major General of the British Army.
<PAGE>
Leroy Keith, Jr. Trustee Chairman and Chief Executive Officer, Keith Ventures
Chairman and Chief (1994-present). Director/Trustee, Phoenix Funds
Executive Officer (1980-present). Director, Equifax Corp. (1991-present), and
Keith Ventures Keystone International Fund, Inc. (1989-present). Trustee,
1729 Wood Nymph Trail Keystone Liquid Trust, Keystone Tax Exempt Trust, Keystone
Lookout Mountain, GA Tax Free Fund, Master Reserves Tax Free Trust, and Master
30750 Reserves Trust. Director/Trustee, the National Affiliated
Investment Companies (until 1993). Director, Blue Cross/Blue
Shield (1989-1993) and First Union Bank of Georgia
(1989-1993). President, Morehouse College (1987-1994)
*Philip R. McLoughlin Trustee Director (1994-present) and Executive Vice President,
and Investments (1987-present), Phoenix Home Life Mutual
President Insurance Company. Director/ Trustee and President, Phoenix
Funds (1989-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-present), Phoenix Equity
Planning Corporation. Director, Phoenix Realty Group, Inc.
(1994-present), Phoenix Realty Advisors, Inc. (1987-present),
Phoenix Realty Investors, Inc. (1994-present), Phoenix Realty
Securities, Inc. (1994-present), Phoenix Founders, Inc.
(1981-present), Phoenix Re Corporation (Delaware)
(1985-present), Phoenix Re Corporation (New York)
(1985-1992), World Trust Fund (1991-present).
Director/Trustee, the National Affiliated Investment
Companies (until 1993). Director, Chairman and Chief
Executive Officer, National Securities & Research Corporation
(1993-present) and Director and President, Phoenix Securities
Group, Inc. (1993-present). Director (1992-present) and
President, W.S. Griffith & Co., Inc. (1992-1994) and Director
(1992-present) and President (1992-1994) Townsend Financial
Advisers, Inc. (1992-present). Director and Vice President,
PM Holdings, Inc. (1985-present).
James M. Oates Trustee Director/Trustee, Phoenix Funds (1987-present). Director,
Managing Director Govett Worldwide Opportunity Funds, Inc. (1991-present) and
The Wydown Group Stifel Financial Corporation (1986-present).
50 Congress Street Director/Trustee, the National Affiliated Investment
Suite 1000 Companies (until 1993). Director and President (1984-1994)
Boston, MA 02109 and Chief Executive Officer (1986-1994), Neworld Bank.
Director, Savings Bank Life Insurance Company (1988-1994).
Philip R. Reynolds Trustee Director/Trustee, Phoenix Funds (1984-present). Director,
43 Montclair Drive Vestaur Securities, Inc. (1972-present). Trustee and
West Hartford, CT Treasurer, J. Walton Bissell Foundation, Inc. (1988-present).
06107 Director/Trustee, the National Affiliated Investment
Companies (until 1993).
<PAGE>
Herbert Roth, Jr. Trustee Director/Trustee, Phoenix Funds (1980-present). Director,
134 Lake Street Boston Edison Company (1978-present), Phoenix Home Life
P.O. Box 909 Mutual Insurance Company (1972-present), Landauer, Inc.
Sherborn, MA 01770 (medical services) (1970-present), Tech Ops./Sevcon, Inc.
(electronic controllers) (1987-present), Key Energy Group
(oil rig service) (1988-1993), and Mark IV Industries
(diversified manufacturer) (1985-present). Director/ Trustee,
the National Affiliated Investment Companies (until 1993).
Richard E. Segerson Trustee Director/Trustee, Phoenix Funds, (1993-present). Consultant,
102 Valley Road Tootal Group (1989-1991). Vice President and General Manager,
New Canaan, CT 06840 Coats & Clark, Inc. (previously Tootal American, Inc.)
(1991-1993). Director/Trustee, the National Affiliated
Investment Companies (1984-1993).
Lowell P. Weicker, Jr. Trustee Trustee/Director, the Phoenix Funds (1995-present).
Dresing Lierman Chairman, Dresing, Lierman, Weicker (1995-present). Governor
Weicker of the State of Connecticut (1991-1995). President and Chief
6931 Arlington Road Executive Officer, Research! America (1989-1990).
Suite 501
Bethesda, MD 20814
Martin J. Gavin Executive Senior Vice President, Investment Products, Phoenix Home Life
Vice Mutual Insurance Company (1989-present). Director and
President Executive Vice President, Phoenix Equity Planning Corporation
(1990-present). Director (1994-present) and Executive Vice
President (1991-present), Phoenix Investment Counsel, Inc.
Director and Executive Vice President, Phoenix Securities
Group, Inc. (1993-present) and National Securities & Research
Corporation (1993-present). Director (1993-present) and
Executive Vice President (1993-1994), W.S. Griffith & Co.,
Inc. and Townsend Financial Advisers, Inc. Executive Vice
President, Phoenix Asset Reserve (1993-present), Phoenix
Income and Growth Fund (1993-present), Phoenix California Tax
Exempt Bonds, Inc. (1993-present), Phoenix Equity
Opportunities Fund (1993-present), Phoenix Multi-Sector Fixed
Income Fund, Inc. (1993-present) and Phoenix Worldwide
Opportunities Fund (1993-present). Director and Vice
President, PM Holdings, Inc. (1994-present). Executive Vice
President, National Affiliated Investment Companies (until
1993).
Michael K. Arends Vice Portfolio Manager, Phoenix Home Life Mutual Insurance Company
President (1994-present). Vice President, Phoenix Series Fund, National
Securities & Research Corporation and Phoenix Investment
Counsel, Inc. (1994-present). Various other positions with
Kemper Financial Services (1983-1994).
<PAGE>
James M. Dolan Vice Vice President and Compliance Officer (1994-present), and
100 Bright Meadow President Assistant Secretary (1981-present), Phoenix Equity Planning
Blvd. Corporation. Vice President, Phoenix Funds (1989-present).
P.O. Box 2200 Vice President (1991-present), Assistant Clerk and Assistant
Enfield, CT 06083-2200 Secretary (1982-present), Phoenix Investment Counsel, Inc.,
Vice President and Chief Compliance Officer (1994-present),
Phoenix Realty Advisors, Inc. and Chief Compliance Officer
(1995-present), Phoenix Realty Securities, Inc. Assistant
Vice President (1993-1994), Vice President and Compliance
Officer, Assistant Secretary, National Securities & Research
Corporation (1994-present). Vice President, the National
Affiliated Investment Companies (until 1993). Various other
positions with Phoenix Equity Planning Corporation
(1978-1994).
Robert J. Milnamow Vice Portfolio Manager, Common Stock, Phoenix Home Life Mutual
President Insurance Company (1991-present). Vice President and
Portfolio Manager, Phoenix Total Return Fund, Inc.
(1989-present), Portfolio Manager, Total Return Series of The
Phoenix Edge Series Fund (1991-present). Vice President, The
Phoenix Edge Series Fund (1991-present), Phoenix Investment
Counsel, Inc. (1991-present), and National Securities &
Research Corporation (1993-present).
William R. Moyer Vice Vice President, Investment Products Finance, Phoenix Home
100 Bright Meadow President Life Mutual Insurance Company (1990-present). Senior Vice
Blvd. President, Finance (1990-present), and Treasurer
P.O. Box 2200 (1994-present). Phoenix Equity Planning Corporation and
Enfield, CT 06083-2200 Phoenix Investment Counsel, Inc. Vice President, Phoenix
Funds (1990-present). Vice President, the National Affiliated
Investment Companies (until 1993); Senior Vice President,
Finance, Phoenix Securities Group, Inc. (1993-present).
Senior Vice President (1993-present), and Treasurer
(1994-present) National Securities & Research Corporation.
Senior Vice President and Chief Financial Officer
(1993-present) and Treasurer (1994-present), W.S. Griffith &
Co., Inc. and Townsend Financial Advisers, Inc. Senior
Manager, Price Waterhouse (1983-1990).
William J. Newman Vice Chief Investment Strategist and Managing Director, Phoenix
President Home Life Mutual Insurance Company (1995-present). Executive
Vice President, Phoenix Investment Counsel, Inc.
(1995-present). Chief Investment Strategist, Kidder, Peabody
Co. Inc. (1993-1994). Managing Director, Equities, Bankers
Trust (1991-1993) and McKay Shields (1988-1990).
<PAGE>
Leonard J. Saltiel Vice Vice President, Investment Operations, Phoenix Home Life
President Mutual Insurance Company (1994-present). Senior Vice
President, Phoenix Equity Planning Corporation
(1994-present). Vice President, Phoenix Funds (1994-present)
and National Securities & Research Corporation. Various
positions with Home Life Insurance Company and Phoenix Home
Life Mutual Insurance Company (1987-1994).
G. Jeffrey Bohne 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, Phoenix Equity Planning Corporation
(1993-present). Secretary, the Phoenix Funds (1993-present).
Clerk, Phoenix Total Return Fund, Inc. (1994-present) and
Phoenix Investment Counsel, Inc. (1995-present). Vice
President, Home Life of New York Insurance Company
(1984-1992).
Nancy G. Curtiss Treasurer Second Vice President and Treasurer, Fund Accounting, Phoenix
Home Life Mutual Insurance Company (1994-present). Treasurer,
Phoenix Funds (1994-present). Vice President, Fund
Accounting, Phoenix Equity Planning Corporation
(1994-present). Various positions with Phoenix Home Life
Mutual Insurance Company (1987-1994).
</TABLE>
*Indicates that the Trustee is an "interested person" of the Trust within the
meaning of the definition set forth in Section 2(a)(19) of the Investment
Company Act of 1940.
For the Fund's last fiscal year, the Trustees received the following
compensation:
Pension or Total
Retirement Compensation
Benefits Estimated From Fund and
Accrued as Annual Fund Complex
Aggregate Part Benefits (10 Funds)
Compensation of Fund Upon Paid to
Name From Fund Expenses Retirement Trustees
---------------- --------- ------------- ----------- -------------
C. Duane Blinn $2,000* $50,000
Robert Chesek $1,600 $40,000
E. Virgil Conway $2,080 $52,000
Harry
Dalzell-Payne $1,680 $42,000
Leroy Keith, Jr. $1,680 $42,000
Philip R. None None
McLoughlin $ 0 for any for any $ 0
James M. Oates $2,000 Trustee Trustee $50,000
Philip R.
Reynolds $1,680 $42,000
Herbert Roth,
Jr. $2,160* $54,000
Richard E.
Segerson $2,000 $50,000
*This compensation (and the earnings thereon) was deferred pursuant to the
Trustees' Deferred Compensation Plan.
On April 30, 1995, the Trustees and officers of the Fund beneficially owned
less than 1% of the outstanding shares of the Fund.
ADVISORY BOARD
The Fund has an Advisory Board consisting of Messrs. Allan, Blakely and
Palmer, former independent Trustees of the Fund. The Advisory Board,
consisting of retired Trustees, provides advice and counsel to the current
Trustees. They are scheduled to
<PAGE>
meet formally once in 1995 and to be available for informal consultations
during the same period. The Fund will pay each Advisory Board Member an
annual stipend of $2,500 and a meeting fee of $2,000. The following sets
forth each Advisory Board member's business affiliation for the past 5 years.
Lincoln W. Allan--Semi-Retired; Commercial real estate investor, Plum Realty,
101 South Sixth Avenue, Delray Beach, Florida. From 1988 to 1990, Mr. Allan
was with Allmon & Tiernan, real estate investors. Mr. Allan is a former
Director/Trustee of all of the National Affiliated Investment Companies.
Edward Palmer--President, Mill Neck Group, Inc., 339 Park Avenue, New York,
NY 10043. Mr. Palmer is a Director of Devon Group, Inc. and Lanxide
Corporation. Mr. Palmer is a former Director/ Trustee of all of the National
Affiliated Investment Companies.
Gerald W. Blakeley, Jr.--Partner, Blakeley Investment Company, 60 State
Street, Boston, Massachusetts 02109. Prior to 1990, Mr. Blakeley was the
Managing Partner of Blakeley Maddox Investment Co. Mr. Blakeley is a Trustee
Emeritus of First Mutual of Boston. Mr. Blakeley is a former Director/Trustee
of the National Affiliated Companies.
OTHER INFORMATION
Custodian and Transfer Agent
State Street Bank and Trust Company ("State Street"), serves as custodian of
the Fund's assets (the "Custodian"). The Custodian, and any sub-custodians,
physically hold all securities and cash of the Fund.
Equity Planning acts as Transfer Agent for the Fund (the "Transfer Agent").
In connection with its furnishing shareholder services as Transfer Agent,
Equity Planning receives a fee equivalent to $14.95 for each designated
shareholder account. Transfer Agent fees are also utilized to offset costs
and fees paid to subtransfer agents employed by the Transfer Agent. State
Street serves as a subtransfer agent pursuant to a Subtransfer Agency
Agreement effective as of June 1, 1994.
Report 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 independent accountants, will be
sent to shareholders each year, and is available without charge upon request.
Financial Statements
The Financial Statements for the fiscal year ended April 30, 1995 appearing
in the Fund's 1995 Annual Report to Shareholders, are incorporated herein by
reference.
Independent Accountant
Price Waterhouse LLP serves as independent accountants for the Fund (the
"Accountants"). The Accountants audit the annual financial statements and
express their opinion on them.
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
MARKET AND PORTFOLIO REVIEW
Investment Environment
Within the 12-month period ended April 30, 1995, the investment climate
changed dramatically. After disappointing investors for most of 1994 -- a
year which saw the Federal Reserve Board repeatedly hike short-term interest
rates to slow the economy and ward off inflation -- both stocks and bonds
made an exceptionally strong recovery in the first four months of 1995.
This rebound stemmed from a growing optimism among investors that the Fed
applied the right amount of pressure on the economy, without serious
disruption to the business cycle. Whether the Fed has successfully achieved
this balance, the so-called "soft landing," remains to be seen. Nevertheless,
signs of moderating growth and relatively subdued inflation over the early
months of 1995 have helped create a very positive environment for U.S.
financial markets.
Portfolio Review
The Fund posted a solidly positive gain during this reporting period, but
fell short of the stock market's performance. For the 12 months ended April
30, 1995, Class A shares produced a total return of 9.16%. According to the
Standard & Poor's 500 Composite Stock Index (S&P 500), an unmanaged, commonly
used measure of stock performance, the market returned 17.48% over the same
period. These figures assume reinvestment of any distributions but exclude
the effect of sales charges.
Over this reporting period, the portfolio was helped by a healthy exposure to
holdings in technology (Intel, Glenayre, Scientific Atlanta), health care
(Amgen, St. Jude Medical) and financial services (Dean Witter, Discover, MGIC
Investments). Factors that created a negative pull on performance were the
lower exposure to the rebounding energy sector early in the year and a modest
exposure to the weakening retail group.
Outlook
As noted in our last report, the Fund now stresses growth stocks exclusively
and no longer seeks generation of current income. We do, however, maintain
our focus on companies showing strong unit-volume trends, pricing
flexibility, rising profitability and the potential for superior earnings
growth. As a result, we expect to emphasize the entertainment, financial
services, health care and technology industries in the coming months.
We will be watching the health care and technology group closely given rising
valuations and the exceptionally strong stock market gains since yearend.
While some of the largest and most stable companies have been the
beneficiaries of renewed investor interest during the early months of 1995,
we expect small and mid-capitalization companies to begin a period of
outperformance, particularly if the U.S. dollar stabilizes. Near-term we are
likely to see some market corrections, but our outlook remains positive.
[Tabular representation of line chart]
<TABLE>
<CAPTION>
Phoenix Equiity
Opportunities
Period S&P 500 Fund-Class A
<S> <C> <C>
4/30/85 $10,000 $ 9,525
4/30/86 $13,618 $13,036
4/30/87 $17,232 $14,460
4/30/88 $16,123 $14,211
4/30/89 $19,795 $17,127
4/30/90 $21,862 $18,340
4/30/91 $25,702 $20,570
4/30/92 $29,314 $22,688
4/30/93 $32,015 $26,432
4/30/94 $33,720 $27,750
4/30/95 $39,594 $30,293
</TABLE>
This chart assumes an initial gross investment of $10,000 made on 4/30/85 for
Class A shares. Total returns for Class A shares reflect the maximum sales
charge of 4.75% on the initial investment and assume reinvestment of
dividends and capital gains. The total return of 3.69% (since inception
7/19/94) for Class B shares reflects the 5% contingent deferred sales charge
(CDSC), which is applicable on all shares redeemed during the 1st year after
purchase and 4% for all shares redeemed during the 2nd year after purchase
(scaled down to 3%--3rd year; 2%--4th and 5th year and 0% thereafter).
Performance of Class A and B share performance is net of 0.25% and 1.0%
distribution fee, respectively. Returns indicate past performance, which is
not predictive of future performance. Investment return and principal value
will fluctuate so that your shares, when redeemed, may be worth more or less
than the original cost.
1
<PAGE>
INVESTMENTS AT APRIL 30, 1995
<TABLE>
<CAPTION>
SHARES VALUE
COMMON STOCKS--99.2%
<S> <C> <C>
Advertising--1.9%
Interpublic Group Companies, Inc. 90,000 $ 3,420,000
Airlines--6.7%
AMR Corp. (b) 100,000 6,737,500
UAL Corp. 45,000 5,400,000
12,137,500
Building & Materials--1.4%
Continental Homes Holding Corp. 225,000 2,587,500
Computer Software & Services--10.2%
Adobe Systems, Inc. 60,000 3,495,000
Ceridian Corp. (b) 125,000 4,312,500
Cirrus Logic, Inc. (b) 50,000 2,490,600
Expert Software, Inc. 15,000 221,250
HBO & Co. 90,000 4,117,500
Microsoft Corp. (b) 25,000 2,043,750
Oak Technology, Inc. (b) 60,000 1,657,500
18,338,100
Diversified Financial Services--2.8%
Dean Witter Discover & Co. 45,000 1,906,875
MGIC Investment Corp. 75,000 3,178,125
5,085,000
Electronics--7.2%
Amphenol Corp. Class A (b) 150,000 4,200,000
Intel Corp. 60,000 6,142,500
VLSI Technology, Inc. (b) 125,000 2,664,063
13,006,563
Entertainment, Leisure & Gaming--2.9%
Gaylord Entertainment Co. Class A 100,000 2,362,500
Viacom, Inc. Class A (b) 60,000 2,812,500
5,175,000
Food--3.3%
CPC International, Inc. 100,000 5,862,500
Healthcare--Drugs--2.8%
Amgen Inc. (b) 70,000 5,088,125
Hospital Management & Services--5.4%
Columbia/HCA Healthcare Corp. 70,000 2,940,000
Mariner Health Group, Inc. (b) 70,000 1,023,750
PhyCor, Inc. (b) 130,000 4,127,500
Vivra, Inc. (b) 51,000 1,638,375
9,729,625
Insurance--2.1%
AFLAC, Inc. 90,000 3,712,500
Lodging & Restaurants--2.1%
Boston Chicken, Inc. (b) 191,000 3,796,125
Medical Products & Supplies--10.1%
Boston Scientific Corp. (b) 125,000 3,406,250
Cerner Corp. (b) 50,000 2,656,250
Medtronic, Inc. 70,000 5,206,250
St. Jude Medical, Inc. 160,000 6,880,000
18,148,750
Miscellaneous--3.2%
Eastman Kodak Co. 40,000 2,300,000
Service Corp International 125,000 3,531,250
5,831,250
Natural Gas--2.3%
Apache Corp. 150,000 4,050,000
Oil Service & Equipment--2.1%
Schlumberger Ltd. 60,000 3,772,500
Paper & Forest Products--2.5%
Champion International Corp. 100,000 4,400,000
Publishing, Broadcasting, Printing & Cable--7.3%
Capital Cities/ABC, Inc. 25,000 2,112,500
Clear Channels Communication, Inc. (b) 50,000 2,812,500
Lin Television Corporation 100,000 3,600,000
New World Communications Group, Inc. 75,000 1,265,625
Scholastic Corp. (b) 60,000 3,360,000
13,150,625
Retail--4.4%
Corporate Express (b) 80,000 2,260,000
OfficeMax, Inc. (b) 50,000 1,281,250
Staples, Inc. (b) 100,000 2,412,500
Tandy Corp. 40,000 1,980,000
7,933,750
Retail--Drug--2.1%
American Home Products Corp. 50,000 3,856,250
Retail--Food--2.5%
Safeway, Inc. (b) 120,000 4,500,000
Telecommunications Equipment--10.8%
California Microwave, Inc. (b) 90,000 2,801,250
General Instrument Corp. (b) 60,000 2,047,500
Glenayre Technologies, Inc. (b) 90,000 5,535,000
Picturetel Corp. (b) 70,000 2,983,750
Scientific-Atlanta, Inc. 250,000 5,687,500
VTEL Corp. 50,000 481,250
19,536,250
</TABLE>
See Notes to Financial Statements
2
<PAGE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Textile & Apparel--3.1%
Nine West Group, Inc. (b) 100,000 $ 3,250,000
Tommy Hilfiger Corp. (b) 100,000 2,300,000
5,550,000
TOTAL COMMON STOCKS
(Identified cost $169,125,055) 178,667,913
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--3.8%
Commercial Paper--3.8%
Anheuser-Busch Cos., Inc.
5.90%, 5/1/95 A-1+ $ 6,850 $ 6,850,000
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $6,850,000) 6,850,000
TOTAL INVESTMENTS--103.0%
(Identified cost $175,975,055) 185,517,913(a)
Cash and receivables, less liabilities--(3.0%) (5,326,753)
NET ASSETS--100.0% $180,191,160
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $11,834,110 and gross
depreciation of $2,599,645 for income tax purposes. At April 30, 1995, the
aggregate cost of securities for federal income tax purposes was
$176,283,448.
(b) Non-income producing.
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value
(Identified cost $175,975,055) $185,517,913
Receivables
Fund shares sold 17,025
Investment securities sold 31,768,172
Interest and dividends 41,550
Total assets 217,344,660
Liabilities
Payables
Custodian 76,338
Investment securities purchased 36,572,509
Fund shares repurchased 302,602
Investment advisory fee 101,440
Distribution fee 37,037
Transfer agent fee 34,137
Trustees' fee 4,437
Financial agent fee 4,407
Accrued expenses 20,593
Total liabilities 37,153,500
Net Assets $180,191,160
Net Assets Consist of:
Capital paid in on shares of beneficial interest $166,019,135
Accumulated net realized gains 4,629,167
Net unrealized appreciation 9,542,858
Net Assets $180,191,160
Class A
Shares of beneficial interest outstanding, $.0001
par value, unlimited authorization (Net Assets
$179,665,902) 24,290,212
Net asset value per share $7.40
Offering price per share
$7.40/(1-4.75%) $7.77
Class B)
Shares of beneficial interest outstanding, $.0001
par value, unlimited authorization (Net Assets
$525,258) 71,052
Net asset value and offering price per share $7.39
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1995
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends $ 2,252,996
Interest 1,188,253
Total investment income 3,441,249
Expenses
Investment advisory fee 1,252,747
Distribution fee--Class A 446,968
Distribution fee--Class B 1,768
Financial agent fee 53,689
Transfer agent 301,123
Printing 84,292
Registration 65,328
Professional 50,723
Custodian 48,107
Trustees 25,987
Miscellaneous 37,092
Total expenses 2,367,824
Net investment income 1,073,425
Net Realized and Unrealized Gain (loss) on
Investments
Net realized gain on securities 5,669,925
Net realized loss on foreign currency transactions (93,372)
Net unrealized appreciation on investments 8,679,660
Net gain on investments 14,256,213
Net increase in net assets resulting from
operations $15,329,638
</TABLE>
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
April 30, 1995 April 30, 1994
<S> <C> <C>
From Operations
Net investment income $ 1,073,425 $ 1,209,839
Net realized gain 5,576,553 61,831,598
Net unrealized appreciation (depreciation) 8,679,660 (50,901,491)
Increase in net assets resulting from operations 15,329,638 12,139,946
From Distributions to Shareholders
Net investment income--Class A (1,177,310) (1,136,352)
Net realized gains--Class A (11,595,466) (60,740,690)
Net realized gains--Class B (15,203) --
Decrease in net assets from distributions to shareholders (12,787,979) (61,877,042)
From Share Transactions
Class A
Proceeds from sales of shares (6,338,878 and 1,216,608 shares, respectively) 46,125,947 9,535,239
Net asset value of shares issued from reinvestment of distributions (1,311,412 and 5,712,094
shares, respectively) 8,942,271 43,916,337
Cost of shares repurchased (8,806,706 and 3,833,959 shares, respectively) (63,971,908) (33,247,860)
Total (8,903,690) 20,203,716
Class B
Proceeds from sales of shares (115,217 and 0 shares, respectively) 831,977 --
Net asset value of shares issued from reinvestment of distributions (2,209 and 0 shares,
respectively) 15,023 --
Cost of shares repurchased (46,374 and 0 shares, respectively) (330,625) --
Total 516,375 --
(Decrease) increase in net assets from share transactions (8,387,315) 20,203,716
Net decrease in net assets (5,845,656) (29,533,380)
Net Assets
Beginning of period 186,036,816 215,570,196
End of period (including undistributed net investment income of $0 and $186,874,
respectively) $180,191,160 $186,036,816
</TABLE>
See Notes to Financial Statements
5
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B
From
inception
Year Ended April 30, 7/19/94 to
1995 1994 1993 1992 1991 4/30/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.31 $9.64 $8.59 $8.36 $7.61 $7.28
Income from investment operations
Net investment income 0.04 0.05 0.06 0.11 0.17 0.00
Net realized and unrealized gains 0.58 0.57 1.34 0.71 0.74 0.59
Total from investment operations 0.62 0.62 1.40 0.82 0.91 0.59
Less distributions
Dividends from net investment income (0.05) (0.05) (0.06) (0.12) (0.16) --
Distributions from net realized gains (0.48) (2.90) (0.29) (0.47) -- (0.48)
Total distributions (0.53) (2.95) (0.35) (0.59) (0.16) (0.48)
Change in net asset value 0.09 (2.33) 1.05 0.23 0.75 0.11
Net asset value, end of period $7.40 $7.31 $9.64 $8.59 $8.36 $7.39
Total return((1)) 9.16% 4.99% 16.50% 10.30% 12.16% 8.69%((3))
Ratios/supplemental data:
Net assets, end of period (thousands) $179,666 $186,037 $215,570 $204,792 $213,147 $525
Ratio of average net assets of:
Expenses 1.32% 1.26% 1.35% 1.36% 1.41% 2.15%((2))
Net investment income (loss) 0.60% 0.57% 0.67% 1.29% 2.19% (0.06)%((2))
Portfolio turnover 358% 167% 31% 73% 95% 358%
</TABLE>
((1)) Maximum sales charge is not reflected in total return calculation.
((2)) Annualized
((3)) Not annualized
See Notes to Financial Statements
6
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Equity Opportunities Fund (the "Fund") is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as a diversified open-end management investment
company. The Fund offers both Class A and Class B shares. Class A shares are
sold with a front-end sales charge of up to 4.75%. Class B shares are sold
with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Both classes of shares
have identical voting, dividend, liquidation and other rights and the same
terms and conditions, except that each class bears different distribution
expenses and has exclusive voting rights with respect to its distribution
plan. Income and expenses of the Fund are borne pro rata by the holders of
both classes of shares, except that each class bears distribution expenses
unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. Security valuation:
Securities listed or traded on a national securities exchange are valued at
the last sale price, or if there had been no sale of the security on that
day, at the mean between the last bid and asked prices. Securities traded in
the over-the-counter market are valued at the mean between the last bid and
asked prices; and if no active market exists, at the bid price. Short-term
investments having a remaining maturity of less than sixty days are valued at
amortized cost which approximates market. All other securities and assets are
valued at their fair value as determined in good faith by or under the
direction of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign
securities, as soon as the Fund is notified. Interest income is recorded on
the accrual basis. Realized gains and losses are determined on the identified
cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code") applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders. In
addition, the Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions to shareholders are recorded on the ex-dividend date. Income
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, and
losses deferred due to wash sales and excise tax regulations. Permanent book
and tax basis differences relating to shareholder distributions will result
in reclassifications to paid in capital.
E. Foreign currency translation:
Foreign securities, other assets and liabilities are valued using the foreign
currency exchange rate effective at the end of the reporting period. Cost of
investments is translated at the currency exchange rate effective at the date
of settlement. The gain or loss resulting from a change in currency exchange
rates between the trade and settlement dates of a portfolio transaction, is
treated as a gain or loss on foreign currency. Likewise, the gain or loss
resulting from a change in currency exchange rates, between the date income
is accrued and paid, is treated as a gain or loss on foreign currency. The
Fund does not separate that portion of the results of operations arising from
changes in exchange rates and that portion arising from changes in the market
prices of securities.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect wholly-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.70% of the average daily net assets of the
Fund for the first $1 billion.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect wholly-owned subsidiary of PHL, has advised the Fund that it
received selling commissions of $2,603 for Class A shares and deferred sales
charges of $7,189 for Class B shares for the year ended April 30, 1995. In
addition, the Fund pays PEPCO a distribution fee at an annual rate of 0.25%
for Class A shares and 1.00% for Class B shares of the average daily net
assets of the Fund. The Distribution Plan for Class A shares provides for
fees to be paid up to a maximum on an
7
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
annual basis of 0.30%; the Distributor has voluntarily agreed to limit the
fee to 0.25%. The Distributor has advised the Fund that of the total amount
expensed for the year ended April 30, 1995, none was earned by the
Distributor and $448,736 was earned by unaffiliated participants.
As Financial Agent of the Fund, PEPCO receives a fee at an annual rate of
0.03% of the average daily net assets of the Fund for bookkeeping,
administration and pricing services. Effective June 1, 1994, PEPCO serves as
the Fund's Transfer Agent with State Street Bank and Trust Company as
sub-transfer agent. Prior to that date, State Street was the Transfer Agent.
For the year ended April 30, 1995, transfer agent fees were $301,123 of which
PEPCO retained $113,609 which is net of the fees paid to State Street.
At April 30, 1995, PHL and affiliates held 99 Class A shares and 14,995 Class
B shares of the Fund with a combined value of $111,549.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for the
year ended April 30, 1995, aggregated $604,461,233 and $593,662,180,
respectively. There were no purchases or sales of long-term U.S. Government
securities.
4. RECLASS OF CAPITAL ACCOUNTS
In accordance with recently approved accounting pronouncements, the Fund has
recorded several reclassifications in the capital accounts. These
reclassifications have no impact on the net asset value of the Fund and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder. As
of April 30, 1995, the Fund has decreased undistributed net investment income
by $82,989, increased accumulated net realized gains by $93,372 and decreased
capital paid in on shares of beneficial interest by $10,383.
5. CAPITAL LOSS CARRYOVERS
Under current tax law, capital losses realized after October 31, 1994 may be
deferred and treated as occurring on the first day of the following fiscal
year. For the year ended April 30, 1995, the Fund elected to defer $317,988
in losses occurring between November 1, 1994 and April 30, 1995.
TAX INFORMATION NOTICE (Unaudited)
For federal income tax purposes, 100% of the income dividends paid by the
Fund qualify for the dividends received deduction of corporate shareholders.
This report is authorized for use by other than shareholders only when
accompanied or preceded by the delivery of a current prospectus showing the
sales charge and other material information.
8
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP [logo of Price Waterhouse]
To the Trustees and Shareholders of
Phoenix Equity Opportunities Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Phoenix Equity
Opportunities Fund (the "Fund") at April 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at April 30, 1995 by correspondence
with the custodian and brokers, and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
[signature of Price Waterhouse LLP]
Boston, Massachusetts
June 12, 1995
9
<PAGE>
Phoenix Equity Opportunities Fund
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Leroy Keith, Jr.
Philip R. McLoughlin
James M. Oates
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael K. Arends, Vice President
James M. Dolan, Vice President
William R. Moyer, Vice President
Robert J. Milnamow, Vice President
William J. Newman, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
National Securities & Research Corporation
One American Row
Hartford, Connecticut 06115-2520
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Dechert, Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005-1208
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
10
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
PART C--OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A: Financial Highlights
Included in Part B: Financial Statements and Notes thereto, and Report of
Independent Accountants are included in the Annual
Report to Shareholders for the year ended April 30,
1995, incorporated by reference.
(b) Exhibits:
1.1 Declaration of Trust of the Registrant, previously filed, and herein
incorporated by reference.
1.2 Amendment to Declaration of Trust of the Registrant, to be filed by
amendment.
2.1 By-laws of the Registrant, previously filed, and herein incorporated by
reference.
3. Not Applicable.
4.1 Reference is hereby made to Article VI of Registrant's Declaration of
Trust referenced in Exhibit 1 above.
5.1 Management Agreement between Registrant and National Securities &
Research Corporation dated January 1, 1994, previously filed, and herein
incorporated by reference.
5.2 Management Agreement between Registrant and Phoenix Investment Counsel,
Inc. to be filed by amendment.
6.1 Underwriting Agreement between Registrant and Phoenix Equity Planning
Corporation ("Equity Planning") dated May 14, 1993, previously filed,
and herein incorporated by reference.
6.2 Form of Underwriting Agreement for Class B Shares between Registrant and
Equity Planning, previously filed, and incorporated herein by reference.
7. None.
8. Custodian Contract between Registrant and State Street Bank and Trust
Company dated October 14, 1993, previously filed, and incorporated
herein by reference.
9.1 Transfer Agency and Service Agreement between Registrant and Equity
Planning dated June 1, 1994, previously filed, and herein incorporated
by reference.
9.2 Form of Sales Agreement, previously filed, and herein incorporated by
reference.
10. Opinion as to legality of the shares. To be filed by amendment.
11.* Consent of Independent Accountant.
12. Not applicable.
13. None.
14. None.
15.1 Distribution Plan dated May 14, 1993, previously filed, and herein
incorporated by reference.
15.2 Form of Distribution Plan for Class B Shares, previously filed, and
herein incorporated by reference.
16. Schedule for computation of yield and effective yield quotations. To be
filed by amendment.
17.* Financial Data Schedule.
18. Powers of attorney filed with Post-Effective Amendments No. 8, 10 and
11, filed on May 4, 1994, October 14, 1994 and July 20, 1995,
respectively.
*Filed herewith.
<PAGE>
Item 25. Persons Controlled by or Under Common Control With Registrant
No person is controlled by, or under common control, with the Registrant.
Item 26. Number of Holders of Securities
As of June 30, 1995, the number of record holders of each class of securities
of the Registrant was as follows:
Number of
Title of Class Record-holders
- ---------------------------------------------------------- -------------
Shares of Beneficial Interest--Class A (Equity
Opportunities) 12,408
Shares of Beneficial Interest--Class B (Equity
Opportunities) 75
Shares of Beneficial Interest--Class A (Theme) 0
Shares of Beneficial Interest--Class B (Theme) 0
Shares of Beneficial Interest--Class A (Small Company
Growth) 0
Shares of Beneficial Interest--Class B (Small Company
Growth) 0
Item 27. Indemnification
Registrant's indemnification provision is set forth in Post-Effective
Amendment No. 7 filed with the Securities and Exchange Commission on June 30,
1993, and is incorporated herein by reference.
Item 28. Business and Other Connections of Investment Advisers
See "Management of the Fund" in the Prospectus and "Services of the Advisers"
and "Trustees and Officers" of the Statements of Additional Information in
which is included in this Post-Effective Amendment.
There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or
officer of National Securities & Research Corporation is, or at any time
during the past two years has been engaged for his or her own account or in
the capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Position
with
Investment
Name Adviser Other Vocation or Employment
- ------------------------ ----------- ---------------------------------------------------------------
<S> <C> <C>
Robert W. Fiondella Director Chairman of the Board, President and Chief Executive Officer,
Phoenix Home Life Mutual Insurance Company. Director, Phoenix
Equity Planning Corporation, Phoenix Investment Counsel, Inc.
Phoenix Securities Group, Inc., Phoenix Realty Advisors,
Inc., Phoenix Realty Investors, Inc., Phoenix Realty
Securities, Inc., Phoenix Realty Group, Inc., and Townsend
Financial Advisers, Inc. Director and President of PM
Holdings, Inc.
Martin J. Gavin Director Senior Vice President, Investment Products, Phoenix Home Life
and Mutual Insurance Company. Executive Vice President and
Executive Director, Phoenix Investment Counsel, Inc., Phoenix
Vice Securities Group, Inc., and Phoenix Equity Planning
President Corporation. Director, W.S. Griffith & Co., Inc., and
Townsend Financial Advisers, Inc. Director and Vice
President, PM Holdings, Inc. Executive Vice President,
Phoenix Asset Reserve, Phoenix Income and Growth Fund,
Phoenix Multi-Sector Fixed Income Fund, Inc., Phoenix
Worldwide Opportunities Fund, and Phoenix California Tax
Exempt Bonds, Inc.
Michael E. Haylon Director Senior Vice President, Securities Investments, Phoenix Home
and Life Mutual Insurance Company. Vice President, Phoenix Series
Executive Fund, The Phoenix Edge Series Fund and Phoenix Multi-Sector
Vice Fixed Income Fund. Director and President, Phoenix Investment
President Counsel, Inc.
<PAGE>
Philip R. McLoughlin Chairman, Director and Executive Vice President, Investments, Phoenix
CEO & Home Life Mutual Insurance Company. Director and President,
Director Phoenix Equity Planning Corporation. Director and Chairman,
Phoenix Investment Counsel, Inc., Director, Phoenix Realty
Group, Inc., Phoenix Realty Advisors, Inc., Phoenix Realty
Investors, Inc., Phoenix Realty Securities, Inc., Phoenix
Founders, Inc., Phoenix Re Corporation (New York), Phoenix Re
Corporation (Delaware), and World Trust Fund; Director and
Vice President, PM Holdings, Inc. Director/Trustee/President
of the Phoenix Funds; President and Director of Phoenix
Securities Group, Inc. Director, W.S. Griffith & Co., Inc.
and Townsend Financial Advisers, Inc.
Charles J. Paydos Director Executive Vice President and Director, Phoenix Home Life
Mutual Insurance Company. Director, Phoenix Equity Planning
Corporation, Phoenix Securities Group, Inc., Phoenix Realty
Securities, Inc., Phoenix Realty Group, Inc., W.S. Griffith &
Co., Inc., and Townsend Financial Advisers, Inc. Director and
Vice President, PM Holdings, Inc.
Richard C. Shaw Director Senior Vice President, International and Corporate
Development, Phoenix Home Life Mutual Insurance Company.
Chairman, American Phoenix Corporation. Director, President
and Chief Executive Officer, Worldwide Phoenix Offshore, Inc.
Director, American Phoenix Investment Portfolios. Director
and Senior Vice President, Phoenix Investment Counsel, Inc.
Executive Vice President, Offshore Investment Funds, Phoenix
Investments Funds.
Patricia A. Bannan Vice Vice President, Common Stock, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Series Fund and
The Phoenix Edge Series Fund. Vice President, Phoenix
Investment Counsel, Inc. Executive Vice President, National
Securities & Research Corporation.
John W. Filoon Senior Vice President, Phoenix Home Life Mutual Insurance Company.
Vice Senior Vice President, Phoenix Equity Planning Corporation.
President
William R. Moyer Senior Vice President, Investment Products Finance, Phoenix Home
Vice Life Mutual Life Insurance Company. Senior Vice President,
President, Finance, and Treasurer, Phoenix Equity Planning Corporation
Finance and Phoenix Investment Counsel, Inc. Vice President, the
and Phoenix Funds. Senior Vice President, Finance, Phoenix
Treasurer Securities Group, Inc., Senior Vice President, Chief
Financial Officer, and Treasurer, W.S. Griffith & Co., Inc.
and Townsend Financial Advisers, Inc.
<PAGE>
Michael K. Arends Vice Portfolio Manager, Phoenix Home Life Mutual Insurance
President Company. Vice President, Phoenix Series Fund, National
Securities & Research Corporation and Phoenix Investment
Counsel, Inc. Various other positions with Kemper Financial
Services.
Curtiss O. Barrows Vice Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, and Phoenix Investment Counsel,
Inc.
James M. Dolan Vice Assistant Vice President Compliance, Phoenix Home Life Mutual
President Insurance Company. Vice President and Compliance Officer;
and Assistant Secretary, Phoenix Equity Planning Corporation.
Compliance Vice President, Phoenix Funds. Vice President, Assistant
Officer, Clerk and Assistant Secretary, Phoenix Investment Counsel,
Assistant Inc. Vice President and Chief Compliance Officer, Phoenix
Secretary Realty Advisors, Inc. and Chief Compliance Officer, Phoenix
Realty Securities, Inc.
Jeanne H. Dorey Vice Portfolio Manager, International, Phoenix Home Life Mutual
President Insurance Company. Vice President, The Phoenix Edge Series
Fund, Phoenix Multi-Portfolio Fund, Phoenix Investment
Counsel, Inc. and Phoenix Worldwide Opportunities Fund.
Catherine Dudley Vice Portfolio Manager, Common Stock, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Series Fund,
Phoenix Multi-Portfolio Fund and Phoenix Investment Counsel,
Inc.
Jeanne T. Hanley Vice Managing Director, Common Stock, Research, Phoenix Home Life
President Mutual Insurance Company. Vice President, The Phoenix Edge
Series Fund, Phoenix Series Fund and Phoenix Investment
Counsel, Inc.
Christopher J. Kelleher Vice Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund and Phoenix Investment Counsel, Inc.
Michael R. Matty Vice Portfolio Manager, Common Stock, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Series Fund and
Phoenix Investment Counsel, Inc.
Thomas S. Melvin, Jr. Vice Portfolio Manager, Common Stock, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Investment
Counsel, Inc. and Phoenix Multi-Portfolio Fund.
Robert J. Milnamow Vice Portfolio Manager, Common Stock, Phoenix Home Life Mutual
President Insurance Company. Vice President, Phoenix Total Return Fund,
Inc., The Phoenix Edge Series Fund, Phoenix Investment
Counsel, Inc., and Phoenix Equity Opportunities Fund.
<PAGE>
Amy L. Robinson Vice Managing Director, Securities Administration, Phoenix Home
President Life Mutual Insurance Company. Vice President, The Phoenix
Edge Series Fund, Phoenix Series Fund, and Phoenix Investment
Counsel, Inc.
Leonard J. Saltiel Vice Vice President, Investment Operations, Phoenix Home Life
President Mutual Insurance Company. Senior Vice President, Phoenix
Equity Planning Corporation. Vice President, Phoenix Funds.
Elizabeth R. Sadowinski Vice Vice President, Field and Investor Services, Phoenix Equity
President, Planning Corporation.
Field
and
Investors
Services
Dorothy J. Skaret Vice Director, Public Fixed Income, Phoenix Home Life Mutual Life
President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, Phoenix Investment Counsel, Inc.
and Phoenix Realty Securities, Inc.
James D. Wehr Vice Managing Director, Public Fixed Income, Phoenix Home Life
President Mutual Insurance Company. Vice President, Phoenix Series
Fund, The Phoenix Edge Series Fund, Phoenix Multi-Portfolio
Fund, Phoenix Investment Counsel, Inc., and Phoenix
California Tax-Exempt Bonds, Inc.
Eugene A. Charon Controller Controller, Phoenix Equity Planning Corporation and Phoenix
Investment Counsel, Inc.
Patricia O. McLaughlin Secretary Counsel, Phoenix Home Life Mutual Insurance Company.
Secretary and Assistant Clerk, Phoenix Investment Counsel,
Inc. Assistant Secretary, the Phoenix Funds, Phoenix
Securities Group, Inc., Phoenix Equity Planning Corporation,
and Phoenix Realty Securities, Inc. Secretary, W.S. Griffith
& Co., Inc. and Townsend Financial Advisers, Inc.
</TABLE>
There is set forth below information as to any other business, profession,
vocation or employment of a substantial nature in which each director or
officer of Phoenix Investment Counsel, Inc. is, or at any time during the
past two years has been, engaged for his or her own account or in the
capacity of director, officer, employee, partner or trustee.
<TABLE>
<CAPTION>
Name Business and other connections
- --------------------------------------- ---------------------------------------------------------------
<S> <C>
Robert W. Fiondella Chairman, President and Chief Executive Officer, Phoenix Home
Director Life Mutual Insurance Company. President, PM Holdings, Inc.
Director, Phoenix Equity Planning Corporation, Phoenix
Securities Group, Inc., National Securities & Research
Corporation, PM Holdings, Inc., Townsend Financial Advisers,
Inc., Phoenix Realty Advisors, Inc., Phoenix Realty
Investors, Inc., Phoenix Realty Securities, Inc. and Phoenix
Realty Group, Inc.
<PAGE>
Martin J. Gavin Senior Vice President, Investment Products, Phoenix Home Life
Director and Mutual Insurance Company. Director and Executive Vice
Executive Vice President President, Phoenix Equity Planning Corporation, Phoenix
Securities Group, Inc., and National Securities & Research
Corporation. Director, W.S. Griffith & Co., Inc. and Townsend
Financial Advisers, Inc. Director and Vice President, PM
Holdings, Inc. Executive Vice President, Phoenix Asset
Reserve, Phoenix California Tax-Exempt Bonds, Inc., Phoenix
Equity Opportunities Fund, Phoenix Income and Growth Fund,
Phoenix Multi-Sector Fixed Income Fund, Inc., and Phoenix
Worldwide Opportunities Fund.
Michael E. Haylon Senior Vice President, Securities Investments, Phoenix Home
Director and Life Mutual Insurance Company. Vice President, Phoenix Series
Executive Vice President Fund, The Phoenix Edge Series Fund, and Phoenix Multi-Sector
Fixed Income Fund, Inc. Director and Executive Vice
President, National Securities & Research Corporation.
Philip R. McLoughlin Executive Vice President, Investments, and Director Phoenix
Director Home Life Mutual Insurance Company. Director/Trustee of the
Phoenix Funds. Director and President, Phoenix Equity
Planning Corporation, and Phoenix Securities Group, Inc.
Director, Chairman, and Chief Executive Officer, National
Securities & Research Corporation. Director, Phoenix Re
Corporation (Delaware), W.S. Griffith & Co., Inc., Townsend
Financial Advisers, Inc., Phoenix Realty Group, Inc., Phoenix
Realty Advisors, Inc., Phoenix Realty Investors, Inc. and
Phoenix Realty Securities Inc. Director and Vice President,
PM Holdings, Inc., World Trust Fund.
Richard C. Shaw Senior Vice President, International and Corporate
Director and Development, Phoenix Home Life Mutual Insurance Company.
Senior Vice President Chairman, American Phoenix Corporation. President, Worldwide
Phoenix, Limited. Director, American Phoenix Investment
Portfolios and National Securities & Research Corporation.
Executive Vice President, Offshore Investment Funds, Phoenix
Equity Planning Corporation. Director and President,
Worldwide Phoenix Offshore, Inc.
<PAGE>
Dona D. Young Executive Vice President, Individual Sales & Marketing, and
Director General Counsel, Phoenix Home Life Mutual Insurance Company.
Director, Executive Vice President and General Counsel,
Phoenix American Life Insurance Company. Director and Vice
President, PM Holdings, Inc. Director, Phoenix Securities
Group, Inc., 238 Columbus Blvd., Inc., American Phoenix Life
and Reassurance Company, PHL Variable Insurance Company,
Worldwide Phoenix Offshore, Inc., Phoenix Equity Planning
Corporation, Phoenix Realty Securities, Inc., Phoenix Realty
Group, Inc., W.S. Griffith & Co., Inc., and Townsend
Financial Advisers, Inc.
William J. Newman Chief Investment Strategist and Managing Director. Phoenix
Executive Vice President Home Life Mutual Insurance Company. Executive Vice President,
Phoenix Investment Counsel, Inc. Chief Investment Strategist,
Kidder, Peabody Co. Inc. Managing Director, Equities, Bankers
Trust.
Paul A. Atkins Vice President, Institutional Investment Sales, Phoenix Home
Senior Vice President Life Mutual Insurance Company.
William R. Moyer Vice President, Investment Products Finance, Phoenix Home
Senior Vice President, Life Mutual Insurance Company. Senior Vice President,
Finance, and Treasurer Finance, and Treasurer, Phoenix Equity Planning Corporation,
and Phoenix Securities Group, Inc. Senior Vice President,
Finance, and Treasurer, National Securities & Research
Corporation. Senior Vice President, Chief Financial Officer
and Treasurer, W.S. Griffith & Co., Inc. and Townsend
Financial Advisers, Inc. Vice President, the Phoenix Funds.
Michael K. Arends Portfolio Manager, Phoenix Home Life Mutual Insurance
Vice President Company. Vice President, Phoenix Series Fund, Phoenix Equity
Opportunities Fund and National Securities & Research
Corporation. Portfolio Manager, Kemper Investment Portfolio
Growth Fund (until 1994).
Patricia A. Bannan Vice President, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Series Fund and
The Phoenix Edge Series Fund. Executive Vice Presdient,
National Securities & Research Corporation.
Holly S. Barrett Regional Vice President, Phoenix Home Life Mutual Insurance
Vice President Company.
Curtiss O. Barrows Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, and National Securities & Research
Corporation.
Sandra L. Becker Managing Director, Private Placements, Phoenix Home Life
Vice President Mutual Insurance Company.
<PAGE>
Kathleen A. Bloomquist Second Vice President, Institutional Client
Vice President Relations/Service, Phoenix Home Life Mutual Insurance
Company. Vice President, Worldwide Phoenix Limited.
James C. Bly Regional Group Pension Manager, Phoenix Home Life Mutual
Vice President Insurance Company.
Mary E. Canning Associate Portfolio Manager, Common Stock, Phoenix Home Life
Vice President Mutual Insurance Company. Vice President, Phoenix Series Fund
and The Phoenix Edge Series Fund.
Paul M. Chute Managing Director, Private Placements, Phoenix Home Life
Vice President Mutual Insurance Company.
Nelson Correa Managing Director, Private Placements, Phoenix Home Life
Vice President Mutual Insurance Company.
James M. Dolan Vice President and Compliance Officer, Phoenix Equity
Vice President, Planning Corporation. Vice President, the Phoenix Funds, and
Assistant Clerk National Securities & Research Corporation. Vice President
and Assistant and Chief Compliance Officer, Phoenix Realty Advisors, Inc.
Secretary and Chief Compliance Officer, Phoenix Realty Securities, Inc.
Jeanne H. Dorey Portfolio Manager, International, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, The Phoenix Edge Series
Fund, Phoenix Multi-Portfolio Fund, Phoenix Worldwide
Opportunities Fund and National Securities & Research
Corporation.
Catherine Dudley Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Multi-Portfolio
Fund, Phoenix Series Fund, and National Securities & Research
Corporation. Investment Officer, The Phoenix Edge Series
Fund.
John M. Hamlin Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company.
Jeanne T. Hanley Managing Director, Common Stock Research, Phoenix Home Life
Vice President Mutual Insurance Company, Vice President, The Phoenix Edge
Series Fund, Phoenix Series Fund and National Securities &
Research Corporation.
Christopher J. Kelleher Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, and National Securities & Research
Corporation.
Peter S. Lannigan Director, Public Fixed Income, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Multi-Portfolio
Fund. Associate Director, Bond Rating Group, Standard &
Poor's Corp. (until 1993).
Michael R. Matty Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Series Fund,
National Securities & Research Corporation.
<PAGE>
John J. McDonald Associate Portfolio Manager, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, The Phoenix Edge Series
Fund.
Thomas S. Melvin, Jr. Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Multi-Portfolio
Fund, and National Securities & Research Corporation.
Robert J. Milnamow Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Total Return Fund,
Inc., The Phoenix Edge Series Fund, Phoenix Equity
Opportunities Fund, and National Securities & Research
Corporation.
Charles L. Olson Regional Marketing Manager, Phoenix Home Life Mutual
Vice President Insurance Company.
Lawrence D. Reitman Director, Corporate Portfolio, Phoenix Home Life Mutual
Vice President Insurance Company.
Amy L. Robinson Managing Director, Securities Administration, Phoenix Home
Vice President Life Mutual Insurance Company. Vice President, The Phoenix
Edge Series Fund, Phoenix Series Fund and National Securities
& Research Corporation.
Christopher J. Saner Director, Corporate Portfolio, Phoenix Home Life Mutual
Vice President Insurance Company.
David M. Schans, C.L.U. Regional Group Pension Manager, Phoenix Home Life Mutual
Vice President Insurance Company.
Dorothy J. Skaret Director, Public Fixed Income, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, National Securities & Research
Corporation and Phoenix Realty Securities, Inc.
Rosemary T. Strekl Vice President, Private Placements, Phoenix Home Life Mutual
Vice President Insurance Company.
James D. Wehr Managing Director, Public Fixed Income, Phoenix Home Life
Vice President Mutual Insurance Company. Vice President, Phoenix
Multi-Portfolio Fund, Phoenix Series Fund, The Phoenix Edge
Series Fund, Phoenix California Tax Exempt Bonds, Inc., and
National Securities & Research Corporation.
John T. Wilson Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Vice President Insurance Company. Vice President, Phoenix Multi-Portfolio
Fund, The Phoenix Edge Series Fund, Phoenix Worldwide
Opportunities Fund and National Securities & Research
Corporation.
Anthony J. Zeppetella Vice President, Portfolio Management, Phoenix Home Life
Vice President Mutual Insurance Company.
<PAGE>
G. Jeffrey Bohne Vice President and General Manager, Phoenix Home Life Mutual
Clerk Insurance Company. Vice Presdient, Transfer Agent Operations,
Phoenix Equity Planning Corporation. Secretary, the Phoneix
Funds. Clerk, Phoenix Total Return Fund, Inc.
Patricia O. McLaughlin Counsel, Phoenix Home Life Mutual Insurance Company.
Secretary and Assistant Clerk Secretary, National Securities & Research Corporation, W.S.
Griffith & Co., Inc. and Townsend Financial Advisers, Inc.
Assistant Secretary, Phoenix Realty Securities, Inc.
</TABLE>
The respective principal addresses of the companies or other entities named
above are as follows:
American Phoenix Corporation }302 West Main Street
}Avon, CT 06001
American Phoenix Investment Portfolios }13, rue Goethe
}L-2014 Luxembourg
American Phoenix Life and Reassurance }One American Row
Company }Hartford, CT 06115
Bankers Trust }280 Park Avenue
}New York, NY 10017
Kemper Financial Services }120 South LaSalle Street
}Chicago, IL 60603
Kidder, Peabody Co. Inc. }10 Hanover Square
}New York, NY 10005
National Securities & Research }One American Row
Corporation }Hartford, CT 06115
PHL Variable Insurance Company }One American Row
}Hartford, CT 06115
Phoenix America Life Insurance Company }One American Row
}Hartford, CT 06115
Phoenix Equity Planning Corporation }100 Bright Meadow Boulevard
}P.O. Box 2200
}Enfield, CT 06083-2200
Phoenix Home Life Mutual Insurance }One American Row
Company }Hartford, CT 06115
Phoenix Realty Advisors, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Group, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Investors, Inc. }One American Row
}Hartford, CT 06115
Phoenix Realty Securities, Inc. }One American Row
}Hartford, CT 06115
Phoenix Re Corporation (Delaware) }80 Maiden Lane
}New York, NY 01301
Phoenix Securities Group, Inc. }One American Row
}Hartford, CT 06115
<PAGE>
PM Holdings, Inc. }One American Row
}Hartford, CT 06115
The Phoenix Funds }101 Munson Street
}Greenfield, MA 01301
Townsend Financial Advisers, Inc. }100 Bright Meadow Boulevard
}P.O. Box 2200
}Enfield, CT 06083-2200
238 Columbus Blvd., Inc. }One American Row
}Hartford, CT 06115
W. S. Griffith & Co., Inc. }100 Bright Meadow Boulevard
}P.O. Box 2200
}Enfield, CT 06083-2200
World Trust Fund }KREDIETRUST
}Societe Anonyme
}11, rue Aldringen
}L-2690 Luxembourg
}R.C. Luxembourg B 10.750
Worldwide Phoenix Limited }41 Cedar House
}Hamilton HM 12, Bermuda
Item 29. Principal Underwriters
(a) See "The Underwriter" and "How to Buy Shares" in the Prospectus and
"Underwriter" and "Distribution Plans" in the Statement of Additional
Information, both of which are included in this Post-Effective Amendment
to the Registration Statement.
(b)
<TABLE>
<CAPTION>
Name and Position and Offices Position and Offices
Principal Address with Underwriter with Registrant
- ------------------------- ------------------------------ ---------------------------
<S> <C> <C>
Robert W. Fiondella
One American Row
Hartford, CT 06115 Director None
Martin J. Gavin
56 Prospect Street
P.O. Box 150480 Director and Exec. Vice
Hartford, CT 06115-0480 President Executive Vice President
Michael E. Haylon
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480 Director None
Philip R. McLoughlin
One American Row
Hartford, CT 06115 Director & President Trustee & President
Charles J. Paydos
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200 Director None
Dona D. Young
One American Row
Hartford, CT 06115 Director None
Richard C. Shaw
One American Row Executive Vice President
Hartford, CT 06115 Offshore Investment Funds None
<PAGE>
Leonard J. Saltiel
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200 Senior Vice President Vice President
William R. Moyer
100 Bright Meadow Blvd.
P.O. Box 2200 Senior Vice President,
Enfield, CT 06083-2200 Finance and Treasurer Vice President
G. Jeffrey Bohne
101 Munson Street Vice President,
Greenfield, MA 01301 Transfer Agent Operations Secretary
Nancy G. Curtiss
56 Prospect Street
P.O. Box 150480 Vice President,
Hartford, CT 06115-0480 Fund Accounting Treasurer
Maris Lambergs
100 Bright Meadow Blvd.
P.O. Box 2200 Vice President/National
Enfield, CT 06083-2200 Sales Mgr. None
James M. Dolan
100 Bright Meadow Blvd.
P.O. Box 2200 Vice President; Compliance
Enfield, CT 06083-2200 Officer & Asst. Secretary Vice President
Elizabeth R. Sadowinski
100 Bright Meadow Blvd. Vice President, Field and
Enfield, CT 06083-2200 Investor Services Assistant Secretary
Ellen R. Moody
One American Row
Hartford, CT 06115 Asst. Treasurer None
Eugene A. Charon
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200 Controller None
Keith D. Robbins
One American Row
Hartford, CT 06115 Secretary None
</TABLE>
Item 30. 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, National Securities & Research Corporation; 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
National Securities & Research Corporation is One American Row, 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 31. Management Services
Not applicable.
<PAGE>
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to
shareholders upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Hartford, and State of Connecticut
on the 28th day of July, 1995.
PHOENIX STRATEGIC EQUITY SERIES FUND
ATTEST: /s/ Richard J. Wirth By: /s/ Philip R. McLoughlin
Richard J. Wirth Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in
the capacities indicated, on this 28th day of July, 1995.
Signature Title
C. Duane Blinn* Trustee
Robert Chesek* Trustee
E. Virgil Conway* Trustee
Nancy G. Curtiss* Treasurer (principal
financial and
accounting officer)
Harry Dalzell-Payne* Trustee
Leroy Keith, Jr.* Trustee
/s/ Philip R. McLoughlin Trustee and President
Philip R. McLoughlin
James M. Oates* Trustee
Philip R. Reynolds* Trustee
Herbert Roth, Jr.* Trustee
Richard E. Segerson* Trustee
Lowell P. Weicker, Jr.* Trustee
By /s/ Philip R. McLoughlin
*Philip R. McLoughlin pursuant to
powers of attorney filed previously
under this Registration Statement.
<PAGE>
EXHIBIT 11
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 12 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated June 12, 1995, relating to the
financial statements and financial highlights appearing in the April 30, 1995
Annual Report to Shareholders of the Phoenix Equity Opportunities Fund, which
are also incorporated by reference into the Registration Statement. We also
consent to the reference to us under the heading "Financial Highlights" in
the Prospectus and under the heading "Independent Accountants" in the
Statement of Additional Information.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
July 27, 1995
<PAGE>
EXHIBIT 27
Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000796299
<NAME> PHOENIX EQUITY OPPORTUNITIES FUND
<SERIES>
<NUMBER> 1
<NAME> CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 175,975
<INVESTMENTS-AT-VALUE> 185,518
<RECEIVABLES> 31,827
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 217,345
<PAYABLE-FOR-SECURITIES> 36,573
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 581
<TOTAL-LIABILITIES> 37,154
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 166,019
<SHARES-COMMON-STOCK> 24,290
<SHARES-COMMON-PRIOR> 25,447
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,629
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,543
<NET-ASSETS> 180,191
<DIVIDEND-INCOME> 2,253
<INTEREST-INCOME> 1,188
<OTHER-INCOME> 0
<EXPENSES-NET> (2,368)
<NET-INVESTMENT-INCOME> 1,073
<REALIZED-GAINS-CURRENT> 5,577
<APPREC-INCREASE-CURRENT> 8,680
<NET-CHANGE-FROM-OPS> 15,330
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,177)
<DISTRIBUTIONS-OF-GAINS> (11,595)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,339
<NUMBER-OF-SHARES-REDEEMED> (8,807)
<SHARES-REINVESTED> 1,311
<NET-CHANGE-IN-ASSETS> (6,347)
<ACCUMULATED-NII-PRIOR> 187
<ACCUMULATED-GAINS-PRIOR> 10,570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,368
<AVERAGE-NET-ASSETS> 178,964
<PER-SHARE-NAV-BEGIN> 7.31
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.58
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> (0.48)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.40
<EXPENSE-RATIO> 1.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000796299
<NAME> PHOENIX EQUITY OPPORTUNITIES FUND
<SERIES>
<NUMBER> 2
<NAME> CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 175,975
<INVESTMENTS-AT-VALUE> 185,518
<RECEIVABLES> 31,827
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 217,345
<PAYABLE-FOR-SECURITIES> 36,573
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 581
<TOTAL-LIABILITIES> 37,154
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 166,019
<SHARES-COMMON-STOCK> 71
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4629
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,543
<NET-ASSETS> 180,191
<DIVIDEND-INCOME> 2,253
<INTEREST-INCOME> 1,188
<OTHER-INCOME> 0
<EXPENSES-NET> (2,368)
<NET-INVESTMENT-INCOME> 1,073
<REALIZED-GAINS-CURRENT> 5,577
<APPREC-INCREASE-CURRENT> 8,680
<NET-CHANGE-FROM-OPS> 15,330
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (15)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115
<NUMBER-OF-SHARES-REDEEMED> (46)
<SHARES-REINVESTED> 2,209
<NET-CHANGE-IN-ASSETS> 15,831
<ACCUMULATED-NII-PRIOR> 187
<ACCUMULATED-GAINS-PRIOR> 10,570
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,253
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,368
<AVERAGE-NET-ASSETS> 178,964
<PER-SHARE-NAV-BEGIN> 7.28
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0.59
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.48)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.39
<EXPENSE-RATIO> 2.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
