As filed with the Securities and Exchange Commission on July 20, 1995
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. 11 [x]
and/or
REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940
Amendment No. 12 [x]
(Check appropriate box or boxes)
----------
Phoenix Equity Opportunities 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)
[x] immediately upon filing pursuant to paragraph (b)
|B] on pursuant to paragraph (b)
|B] 60 days after filing pursuant to paragraph (a)(i)
|B] on pursuant to paragraph (a)(i)
|B] 75 days after filing pursuant to paragraph (a)(ii)
|B] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
|B] 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 EQUITY OPPORTUNITIES FUND
Cross Reference Sheet Pursuant to Rule 404
PART A
<TABLE>
<CAPTION>
Part I of Form N-1A Prospectus Caption
- ---------------------------------------------- --------------------------------------------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Introduction; Fund Expenses
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Investment Objective and Policies
5. Management of the Fund Management of the Fund
6. Capital Stock and Other Securities Dividends, Distributions and Taxes; Additional
Information; Investor Accounts and Services Available
7. Purchase of Securities Being Offered How to Buy Shares; The 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
</TABLE>
PART B
<TABLE>
<CAPTION>
Part I of Form N-1A Statement of Additional Information
--------------------------------------------- --------------------------------------
<S> <C> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Cover Page; The Fund
13. Investment Objectives and Policies Cover Page; Investment Objective;
Fundamental Policies; Other Policies
14. Management of the Fund Services of the Advisor; Trustees and
Officers
15. Control Persons and Principal Holders Not Applicable
of Securities
16. Investment Advisory & Other Services Trustees and Officers
17. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
18. Capital Stock and Other Securities Not Applicable
19. Purchase, Redemption and Pricing of How to Buy Shares; Alternative
Securities 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 Data Performance Data
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
101 Munson Street
Greenfield, MA 01301
PROSPECTUS
July 21, 1995
Phoenix Equity Opportunities Fund (the "Fund") is a diversified open-end
management investment company with the investment objective of long-term
growth of capital from investment in a diversified group of stocks or
securities convertible into stocks. There can be no assurance that the Fund's
objective will be achieved.
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 July 21,
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 by,
any bank, credit union, or affiliated entity, and are not federally insured
or otherwise protected by the Federal Deposit Insurance Corporation, 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 DEVICES (TTY): (800) 243-1926
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-------
<S> <C>
INTRODUCTION 3
FUND EXPENSES 4
FINANCIAL HIGHLIGHTS 5
PERFORMANCE INFORMATION 7
INVESTMENT OBJECTIVE AND POLICIES 8
MANAGEMENT OF THE FUND 10
DISTRIBUTION PLANS 11
HOW TO BUY SHARES 13
INVESTOR ACCOUNTS AND SERVICES AVAILABLE 18
NET ASSET VALUE 20
HOW TO REDEEM SHARES 21
DIVIDENDS, DISTRIBUTIONS AND TAXES 22
ADDITIONAL INFORMATION 24
</TABLE>
2
<PAGE>
INTRODUCTION
This Prospectus describes the shares offered by and the operations of
Phoenix Equity Opportunities Fund (the "Fund"). The Fund is a diversified,
open-end management investment company established in 1986 as a business
trust under the laws of Massachusetts. The Fund's investment objective is to
seek long-term growth of capital from investment in a diversified group of
stocks or securities convertible into stocks.
Investment Adviser
National Securities & Research Corporation (the "Adviser" or "National")
is the investment adviser of the Fund and its professional staff selects and
supervises the investments in the Fund's portfolio. Phoenix Equity Planning
Corporation, an affiliate of the Adviser, is the Fund's underwriter ("Equity
Planning" or the "Underwriter"). See "Management of the Fund". As
compensation for its services, the Adviser receives a fee, which is accrued
daily against the value of the Fund's net assets and is paid by the Fund on
the last business 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
Fund's average daily net assets from $1 billion to $2 billion and .60% of the
Fund's average daily net assets in excess of $2 billion.
Distribution Plans and Distributor
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 shares 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. See "Distribution Plans."
Purchase of Shares
The Fund offers 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 are offered to the public at the next determined net asset
value after receipt of the order (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 are offered to the public at the next determined net asset
value after receipt of an order, with no sales charge. However, 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."
Minimum Initial and Subsequent Investments
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 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 assurance that the Fund will achieve its investment
objectives. In addition, special risks may be presented by the particular
types of securities in which the Fund may invest. See "Investment Objectives
and Policies".
3
<PAGE>
FUND EXPENSES
The following table illustrates all fees and expenses a shareholder will
incur. The fees and expenses set forth in the table are for the fiscal year
ended April 30, 1995.
<TABLE>
<CAPTION>
Class Class
A B
Shares Shares
-------- ----------------------------
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price) 4.75% None
Maximum Sales Charge Imposed on Reinvested Dividends None None
Deferred Sales Charge (as a percentage of original purchase price or None 5% during the first
redemption proceeds, as applicable) year, decreasing 1%
annually to 2%
during the fourth
and fifth years;
thereafter decreasing
to 0% after the fifth year
Redemption Fee None None
Exchange Fee None None
Annual Fund Operating Expenses
(as a percentage of average net assets for the fiscal year ended
April 30, 1995.)
Management Fees 0.70% 0.70%
Rule 12b-1 Fees (a) 0.25% 1.00%
Other Operating Expenses 0.37% 0.37%
Total Fund Operating Expenses 1.32% 2.07%
</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 Plan continues 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.
4
<PAGE>
<TABLE>
<CAPTION>
Cumulative Expenses
Paid for the Period
Example* 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------- ------ ------- ------- ---------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a hypothetical
$1,000 investment and assuming (1) a 5% annual return throughout
the period and (2) redemption at the end of each time period.
Class A Shares $60 $87 $116 $199
Class B Shares $71 $95 $131 $221
An investor would pay the following expenses on the same $1,000
investment assuming no redemption at the end of the period:
Class A Shares $60 $87 $116 $199
Class B Shares $21 $65 $111 $221
</TABLE>
*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," "How to Buy Shares", and
"Contingent Deferred Sales Charge."
FINANCIAL HIGHLIGHTS
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.
5
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Phoenix Equity Opportunities Fund
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------
Year Ended April 30
-----------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $7.31 $9.64 $8.59 $8.36 $7.61
Income from investment
operations:
Net investment income 0.04 0.05 0.06 0.11 0.17
Net realized and unrealized
gains 0.58 0.57 1.34 0.71 0.74
-------- -------- -------- -------- ---------
Total from investment
operations 0.62 0.62 1.40 0.82 0.91
-------- -------- -------- -------- ---------
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) --
-------- -------- -------- -------- ---------
Total distributions (0.53) (2.95) (0.35) (0.59) (0.16)
-------- -------- -------- -------- ---------
Change in net asset value 0.09 (2.33) 1.05 0.23 0.75
-------- -------- -------- -------- ---------
Net asset value, end of
period $7.40 $7.31 $9.64 $8.59 $8.36
======== ======== ======== ======== =========
Total return((1)) 9.16% 4.99% 16.50% 10.30% 12.16%
-------- -------- -------- -------- ---------
Ratios/supplemental data:
Net assets, end of period
(thousands) $179,666 $186,037 $215,570 $204,792 $213,147
Ratio to average net asset
of:
Expenses 1.32% 1.26% 1.35% 1.36% 1.41%
Net investment income (loss) 0.60% 0.57% 0.67% 1.29% 2.19%
Portfolio turnover 358% 167% 31% 73% 95%
</TABLE>
<TABLE>
<CAPTION>
Class B
From
Inception
7/19/94
to
--------
1990 1989 1988 1987 1986 4/30/95
-------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $8.31 $7.52 $9.72 $11.15 $8.52 $7.28
Income from investment
operations:
Net investment income 0.25 0.29 0.27 0.37 0.44 0.00
Net realized and unrealized
gains 0.38 1.17 (0.24) 0.67 2.63 0.59
-------- -------- -------- -------- -------- -----------
Total from investment
operations 0.63 1.46 0.03 1.04 3.07 0.59
-------- -------- -------- -------- -------- -----------
Less distributions
Dividends from net
investment income (0.27) (0.30) (0.29) (0.44) (0.44) --
-------- -------- -------- -------- -------- -----------
Distributions--(from net
realized gains) (1.06) (0.37) (1.94) (2.03) -- (0.48)
-------- -------- -------- -------- -------- -----------
Total distributions (1.33) (0.67) (2.23) (2.47) (0.44) (0.48)
-------- -------- -------- -------- -------- -----------
Change in net asset value (0.70) 0.79 (2.20) (1.43) 2.63 0.11
-------- -------- -------- -------- -------- -----------
Net asset value, end of
period $7.61 $8.31 $7.52 $9.72 $11.15 $7.39
======== ======== ======== ======== ======== ===========
Total return((1)) 7.08% 20.52% (1.72)% 10.92% 36.79% 8.69%((3))
-------- -------- -------- -------- -------- -----------
Ratios/supplemental data:
Net assets, end of period
(thousands) $210,667 $230,066 $218,749 $262,459 $273,446 $525
Ratio to average net asset
of:
Expenses 1.09% 0.89% 0.74% 0.98% 0.85% 2.15%((2))
Net investment income (loss) 2.88% 3.75% 3.35% 3.56% 4.59% (0.06)%((2))
Portfolio turnover 49% 59% 91% 142% 83% 358%
</TABLE>
(1) Maximum sales charge is not reflected in total return calculation
(2) Annualized
(3) Not annualized
6
<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 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 Fund will be computed by dividing the Fund's 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
Fund's yield.
Standardized quotations of average annual total return for Class A and
Class B Shares 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
over a period of 1, 5 and 10 years (or up to the life of the class of
shares). 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 the Fund.
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.
Advertisements, sale literature and other communications may contain
information about the Fund or 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 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 Fund's portfolio; or compare the
7
<PAGE>
Fund's 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.
Performance information for the Fund reflects only the performance of a
hypothetical investment in Class A or Class B Shares of the Fund during the
particular time period in which the calculations are based. Performance
information should be considered in light of the Fund's investment objectives
and policies, characteristics and quality of the portfolio, and the market
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 the Fund, see the Statement of
Additional Information.
The Fund's Annual Report, available upon request and without charge,
contains a discussion of the performance of the Fund and a comparison of that
performance to a securities market index.
INVESTMENT OBJECTIVE
AND POLICIES
The investment objective of the Fund 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 Fund's
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
Fund. At least 65% of the Fund's total assets are, under normal
circumstances, invested in stocks. The Fund may invest in stocks of all types
and is not restricted as to industry in its investments. Securities are
selected for their long-term investment and it is generally not the policy of
the Fund to purchase securities for trading purposes, although there may be a
limited number of short-term transactions. The Fund 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
Fund's 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 Fund's assets are in cash or cash equivalents, it is not investing
in securities selected to meet the Fund's investment objective. There is no
assurance that the Fund will meet its investment objective.
Investing in Convertible Securities
The Fund 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 the Fund's assets
may be invested in convertible securities that are rated below investment
grade (commonly referred to as "junk bonds"). 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 the Fund is called for redemption, the Fund 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
The Fund may, from time to time, write covered call option contracts as a
means of increasing the yield on the Fund's portfolio and also as a means of
providing limited protection against decreases in the market value of the
Fund's portfolio. Such contracts will be written on securities in which the
Fund has authority to invest and on securities indices listed on an organized
national securities exchange. The aggregate value of the securities
underlying such call options will be limited to not more than 25% of the net
assets of the Fund.
8
<PAGE>
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 Fund owns the optioned securities,
(2) the Fund 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 Fund 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 Fund will write only call option contracts when it is
believed that the total return to the Fund can be increased through such
premiums consistent with the Fund's investment objective.
The Fund may also write covered call options on securities indices.
Through the writing of call index options the Fund can achieve many of the
same objectives as through the use of call options on individual securities.
Call options on securities indices are similar to call options on a security
except that, rather than the right to take delivery of a security at a
specified price, a call option on a securities index gives the holder the
right to receive, upon 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 Fund. The writing of
option contracts is a highly specialized activity which involves investment
techniques and risks different from those ordinarily associated with
investment companies, and the restrictions listed above would tend to reduce
such risks.
The Fund may purchase options to close out a position, i.e., 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 Fund's portfolio, the Fund 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 Fund 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 Fund may be invested in the purchase of put and call options,
including index options.
Investing in Foreign Securities
The Fund may invest in the securities of foreign issuers. The Fund may
invest in a broad range of foreign securities including equity, debt and
convertible securities and foreign government securities. While the Fund 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. The Fund may also invest in domestic securities
denominated in foreign currencies.
Investing in the securities of foreign companies involves special risks
and considerations not typically associated with investing in U.S. companies.
These include differences in accounting, auditing and financial reporting
standards, generally higher commission rates on foreign portfolio
transactions, the possibility of expropriation or confiscatory taxation,
adverse changes in investment or exchange control regulations, political
instability which could affect U.S. investment or exchange control
regulations, political instability which could affect U.S. investments in
foreign countries, and potential restrictions on the flow of international
capital. Additionally, dividends payable on foreign securities may be subject
to foreign taxes withheld prior to distribution. Foreign securities often
trade with less frequency and volume than domestic securities and therefore
may exhibit greater price volatility, 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
the Fund 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
9
<PAGE>
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 Fund
will be subject to the additional risk of currency fluctuations. An adverse
change in the value of a particular foreign currency as against the U.S.
dollar, to the extent that such change is not offset by a gain in other
foreign currencies, will result in a decrease in the Fund's assets. Any such
change may also have the effect of decreasing or limiting the income
available for distribution. Foreign currencies may be affected by
revaluation, adverse political and economic developments, and governmental
restrictions. Although the Fund will invest only in securities denominated in
foreign currencies that are fully convertible into U.S. dollars without legal
restriction at the time of investment, no assurance can be given that
currency exchange controls will not be imposed on any particular currency at
a later date.
Securities of U.S. issuers denominated in foreign currencies may be less
liquid and their prices more volatile than securities issued by domestic
issuers and denominated in U.S. dollars. In addition, investing in securities
denominated in foreign currencies often entails costs not associated with
investment in U.S. dollar-denominated securities of U.S. issuers, such as the
cost of converting foreign currency to U.S. dollars, higher brokerage
commissions, custodial expenses and other fees. Non-U.S. dollar denominated
securities may be subject to certain withholding and other taxes of the
relevant jurisdiction, which may reduce the yield on the securities to the
Fund and which may not be recoverable by the Fund or its investors.
The Fund will calculate its net asset value and complete orders to
purchase, exchange or redeem shares only on a Monday-Friday basis (excluding
holidays on which the New York Stock Exchange is closed). Foreign securities
in which the Fund may invest may be primarily listed on foreign stock
exchanges which may trade on other days (such as Saturdays). As a result, the
net asset value of the Fund's portfolio may be affected by such trading on
days when a shareholder has no access to the Fund.
Investment income received by the Fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If
the Fund 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 Fund
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.
Investment Restrictions
Not more than 25% of the total assets of the Fund will be concentrated in
the securities of any one industry. No security can be purchased by the Fund
if as a result (a) more than 5% of the value of the total assets of the Fund
would then be invested in the securities of a single issuer (other than U.S.
Government obligations) or (b) more than 10% of any class of securities, or
more than 10% of the outstanding voting securities of an issuer, would be
held by the Fund.
A detailed description of the Fund's investment restrictions is contained
in the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Trustees
The Trustees of the Fund ("Trustees") are responsible for the overall
supervision of the operations of the Fund and perform the various duties
imposed on trustees by the 1940 Act and the laws of the Commonwealth of
Massachusetts. The Trustees will elect officers of the Fund annually.
The Adviser
Pursuant to a Management Agreement (the "Management Agreement") with the
Fund, National acts as investment adviser to the Fund. The Adviser's
principal place of business is One American Row, Hartford, Connecticut. In
its capacity as investment adviser, subject to the authority of the Trustees,
the Adviser is responsible for the overall management of the Fund's business
affairs. The Trustees periodically review the services provided by the
Adviser to ensure that the Fund's general investment policies and programs
are being properly carried out and that administrative services are being
provided to the Fund in a satisfactory manner.
The Adviser is an indirect wholly owned subsidiary of Phoenix Home Life
Mutual Insurance Company ("Phoenix Home Life"), 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 $12
billion through advisory accounts and mutual funds. The
10
<PAGE>
Adviser 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, the Adviser receives a fee, which is
accrued daily against the value of the Fund's net assets and is paid by the
Fund on the last business 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 Fund's average daily net assets from $1 billion to $2 billion and .60%
of the Fund's average daily net assets in excess of $2 billion.
The Adviser's fee is accrued daily against the value of the Fund's net
assets and is payable by the Fund monthly. The ratio of the management fees
to average net assets for the fiscal year ended April 30, 1995 for Class A
Shares was .70%. The ratio of the management fees to average net assets for
the same period for Class B Shares was .70%.
The Portfolio Manager
Mr. Michael K. Arends serves as Portfolio Manager of the Fund and as such
is primarily responsible for the day to day management of the Fund's
investments. Mr. Arends has served in this capacity since September 2, 1994.
Mr. Arends is also a Vice President of the Phoenix Series Fund, which is
advised by Phoenix Investment Counsel, Inc. an affiliate of the Adviser.
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.
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"). 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 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.
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.
11
<PAGE>
Expenditures incurred under the Plan 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 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.
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 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 the Fund and all classes of shareholders. The Class A Plan
was approved by Class A shareholders of the Fund at a special meeting of
shareholders
12
<PAGE>
held on April 30, 1993. The Class B Plan was adopted by the Trustees
(including a majority of independent Trustees) on May 25, 1994.
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 represents an interest in the same portfolio of
investments of the Fund, 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 Fund 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 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 unallocated qualified employer sponsored plans will be limited
13
<PAGE>
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
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 Equity Planning,
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.
<TABLE>
<CAPTION>
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*
--------------------- -------------- -------------- ------------------
<S> <C> <C> <C>
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**
</TABLE>
*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.
** 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:
<TABLE>
<CAPTION>
Purchase Amount Payment to Broker/Dealer
--------------------------- ---------------------------
<S> <C>
$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%
</TABLE>
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.
14
<PAGE>
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 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 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.
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<PAGE>
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.
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 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.
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<PAGE>
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.
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge as
a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
- ----------------------- ---------------------
<S> <C>
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 2%
Sixth 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to
a redemption, the calculation will be determined in a manner that minimizes
the rate being charged. Therefore, Class A Shares will be redeemed first,
Class B Shares held for over 5 years or acquired pursuant to reinvestment of
dividends or distributions are redeemed next, and 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 an investor purchased 100 shares at $10 per
share (at a cost of $1,000) and in the second year after purchase, the net
asset value per share is $12 and, during such time, the investor has acquired
10 additional shares upon dividend reinvestment. If, at such time the
investor makes his first redemption of 50 shares (proceeds of $600), 10
shares will not be subject to charge because of dividend reinvestment. With
respect to the remaining 40 shares, the charge is applied only to the
original cost of $10 per share and not to the increase in net asset value of
$2 per share. Therefore, $400 of the $600 redemption proceeds will be charged
at a rate of 4% (the applicable rate in the second year after purchase), or
$16.00.
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 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.
17
<PAGE>
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 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
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<PAGE>
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 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, 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
19
<PAGE>
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" 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 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.
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 class of shares of the Fund is
determined as of the close of the general trading session of the New York
Stock Exchange (the "Exchange") on each business day on which the Exchange is
open. The net asset value per share of the Fund is computed by dividing the
value of the Fund's securities, plus any cash and other assets (including
dividends and interest accrued but not collected)
20
<PAGE>
less all liabilities (including accrued expenses) by the number of shares of
the Fund outstanding. The total liability allocated to a class, plus that
class' distribution fee and any other expenses specially allocated to that
class, are deducted from the proportionate interest of such class in the
Fund's assets, and the resulting amount for each class is divided by the
number of shares of that class outstanding to produce the net asset value per
share. A security listed or traded on an exchange is valued at its last sale
price on the exchange where it is principally traded. Lacking any sales on
the exchange where it is principally traded on the day of valuation prior to
the time as of which assets are valued, the security is valued at the mean
between the last bid and asked prices on that exchange. Short-term
investments having a remaining maturity of less than sixty days are valued at
amortized cost which approximates market value, unless the Trustees determine
that amortized cost does not reflect the fair value of such securities. All
other securities for which over-the-counter market quotations are readily
available are valued on the basis of the mean between the last current bid
and asked prices. Other assets are valued at fair value as determined in good
faith by 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.
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.
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
21
<PAGE>
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 high cost of maintaining accounts with small account values,
the Fund reserves the right to close all accounts that have been in existence
for at least one year and have a value that is less than $200. In such cases,
shareholders will receive 60 days' written notice during which time they
shall have the right to bring the value up to $200 or more. If the account
value is not raised to $200 or more during that time period, the Fund will
redeem all shares in the account and send the proceeds to the shareholder's
address of record. Shareholders holding shares whose cumulative value has
decreased below the minimum amount of $200 shall not be subject to this
policy in those instances in which the decrease in account value has occurred
solely as a result of market price fluctuations.
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 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.
The Fund 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 Fund
credited at the net asset value per share on the ex-date. Dividends and
distributions, whether received in cash or in additional shares of the Fund,
generally are subject to Federal income tax and may be subject to state,
22
<PAGE>
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 Fund 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 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 ("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 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 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.
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.
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<PAGE>
Investors are urged to consult their attorney or tax adviser regarding
specific questions as to Federal, foreign, state or local taxes.
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.
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 is only one existing series of the Fund, 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.
24
<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:
<TABLE>
<CAPTION>
<S> <C>
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 Plan Trust Trust, Estate, Pension Plan Trust (not personal TIN of fiduciary)
Corporation, Partnership,
Other Organization Corporation, Partnership, Other Organization
Broker/Nominee Broker/Nominee
</TABLE>
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.
(bullet) A corporation
(bullet) Financial institution
(bullet) Section 501(a) exempt organization (IRA, Corporate Retirement
Plan, 403(b), Keogh)
(bullet) United States or any agency or instrumentality thereof
(bullet) A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof
(bullet) International organization or any agency or instrumentality
thereof
(bullet) Registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
(bullet) Real estate investment trust
(bullet) Common trust fund operated by a bank under section 584(a)
(bullet) An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1)
(bullet) 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.
The Fund has filed with the Securities and Exchange Commission a Statement of
Additional Information about the Fund, dated July 21, 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 Trust 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.
[Recycle logo] Printed on recycled paper using soybean ink
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Phoenix Equity Opportunities Fund
P.O. Box 2200
Enfield, CT 06083-2200
[Logo] Phoenix Investments
PEP 690 (7/95)
Phoenix Funds
Phoenix Equity
Opportunities Fund
Prospectus
July 21, 1995
[Logo] Phoenix Investments
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
101 Munson Street, Greenfield, MA 01301
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders/Exchanges: (800) 367-5877
Statement of Additional Information
Dated July 21, 1995
Phoenix Equity Opportunities Fund (the "Fund") is an open-end management
investment company which invests in a diversified group of stocks or
securities convertible into stocks for long-term growth of capital.
National Securities & Research Corporation ("National" or the "Adviser")
is the investment adviser of the Fund and its professional staff selects and
manages the investments in the Fund's portfolio. Phoenix Equity Planning
Corporation, an affiliate of National is the Fund's Underwriter (the
"Underwriter" or "Equity Planning"). Investments are selected for their
prospects of long-term capital growth and it is not the policy of the Fund to
purchase securities for trading purposes, although there may be a limited
number of short-term transactions.
In general, the assets of the Fund are kept fully invested in securities
selected to meet the investment objective of the Fund; however, any part of
the Fund's assets may be held for temporary defensive purposes in cash, or in
corporate or U.S. Government obligations maturing within one year from the
date of purchase.
This document is not the Prospectus of the Fund and should be read in
conjunction with the Prospectus dated July 21, 1995, which may be obtained
upon request and without charge by calling (800) 243-4361.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
GENERAL INFORMATION (24) 1
INVESTMENT OBJECTIVE (8) 1
INVESTMENT RESTRICTIONS (10) 1
PORTFOLIO TRANSACTIONS AND BROKERAGE 2
SERVICES OF THE ADVISER (10) 3
NET ASSET VALUE (20) 4
HOW TO BUY SHARES (13) 4
ALTERNATIVE PURCHASE ARRANGEMENTS (13) 4
EXCHANGE PRIVILEGES (19) 5
REDEMPTION OF SHARES (21) 6
DIVIDENDS, DISTRIBUTIONS AND TAXES (22) 6
TAX SHELTERED RETIREMENT PLANS (19) 7
THE NATIONAL DISTRIBUTOR (11) 8
PLANS OF DISTRIBUTION (11) 8
TRUSTEES AND OFFICERS 10
ADVISORY BOARD 14
OTHER INFORMATION 14
PERFORMANCE INFORMATION (7) 15
Numbers appearing in parentheses correspond to related disclosures in the
Fund's Prospectus.
</TABLE>
PEP731 (7/95)
<PAGE>
GENERAL INFORMATION
Phoenix Equity Opportunities 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 is continuing the business of the Stock Series.
The Trustees have 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.
The Fund receives dividends or interest from its investments and, after
deduction of its expenses, substantially all of this income is distributed
semi-annually. The value of the Fund's shares fluctuates because the value of
the securities in which it invests fluctuates. The portfolio of the Fund is
diversified in many securities which tends to spread, but does not eliminate,
the market risks involved in investing.
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term growth of capital from
investment in a diversified group of stocks, or securities convertible into
stocks. The investment objective of the Fund is fundamental policy which may
not be changed without the approval of the holders of a majority of the
outstanding shares of the Fund. The Fund may invest in stocks of all types
and is not restricted as to particular types of industries. The Fund may also
invest in securities convertible into common stocks. There is no assurance
that the Fund will meet its investment objective.
INVESTMENT RESTRICTIONS
Fundamental Policies
The following investment restrictions constitute fundamental policies of
the Fund which may be changed only upon approval by the holders of a majority
of the outstanding shares of the Fund. The Fund cannot:
1. Borrow money;
2. Underwrite the securities of others;
3. Deal in real estate (including real estate limited partnerships)
except that it 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 it 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 assets in any one industry or group of
industries;
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 the Fund 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 the Fund unless (a) the issuer or its
predecessor has had a three year record of continuous operation during which
it published balanced 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;
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; and
16. Make an investment for the purpose of exercising control or
management.
1
<PAGE>
Other Policies
The following investment restrictions do not constitute fundamental
policies and may be changed without shareholder approval. The fund cannot:
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 the Fund's net assets in warrants, valued at the
lower of cost or market, or more than 2% of limit in warrants that are not
listed on the New York Stock Exchange or American Stock Exchange.
Options
The purchase and writing of options involves certain risks. During the
option period, the covered call writer has, in return for the premium on the
option, given up the opportunity to profit from a price increase in the
underlying securities above the exercise price, but, as long as its
obligation as a writer continues, has retained the risk of loss should the
price of the underlying security decline. The writer of an option has no
control over the time when it may be required to fulfil its obligation as a
writer of the option. Once an option writer has received an exercise notice,
it cannot effect a closing purchase transaction in order to terminate its
obligation under the option and must deliver the underlying securities at the
exercise price. If a call option purchased by the Fund is not sold when it
has remaining value, and if the market price of the underlying security
remains less than or equal to the exercise price, the Fund will lose its
entire investment in the option. Also, where an option on a particular
security is purchased to hedge against price movements in a related security,
the price of the option may move more or less than the price of the related
security. There can be no assurance that a liquid market will exist when the
Fund seeks to close out an option position. Furthermore, if trading
restrictions or suspensions are imposed on the options market, the Fund may
be unable to close out an option position.
Lending of Securities
The Fund may lend portfolio securities to broker/dealers or other
institutional borrowers valued at up to no more than 25% of the Fund's net
assets, but only when the borrower pledges cash collateral to the Fund and
agrees to maintain such so that it amounts at all times to at least 100% of
the value of the securities loaned. Furthermore, the Fund may terminate such
loans at any time, and must receive reasonable interest on the collateral as
well as dividends, interest, or other distributions paid on the security
during the loan period. Upon expiration of the loan, the borrower of the
securities will be obligated to return to the Fund the same number and kind
of securities as those loaned together with duly executed stock powers. The
Fund must be permitted to vote the proxies if a material event affecting the
value of the security is to occur. The Fund may pay reasonable fees in
connection with the loan, including reasonable fees to the Fund's Custodian
for its services. During the Fund's past fiscal year, no portfolio securities
were loaned and, presently, the Fund has no intention to loan any of its
portfolio holdings.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities,
supervises their execution and negotiates brokerage commissions on behalf of
the Fund. It is the practice of the Adviser to seek the best prices and
execution of orders and to negotiate brokerage commissions which the
Adviser's opinion are reasonable in relation to the value of the brokerage
services provided by the executing broker. Brokers who have executed orders
for the Fund are asked to quote a fair commission for their services. If the
execution is satisfactory and if the requested rate approximates rates
currently being quoted by the other brokers selected by the Adviser, the rate
is deemed by the Adviser to be reasonable. Brokers may ask for higher rates
of commission if all or a portion of the securities involved in the
transaction are positioned by the broker, if the broker believes it has
brought the Fund an unusually favorable trading opportunity, or if the broker
regards its research services as being of exceptional value, and payment of
such commissions is authorized by the Adviser after the transaction has been
consummated. If the Adviser more than occasionally differs with the broker's
appraisal of opportunity or value, the broker would not be selected to
execute trades in the future. The Adviser believes that the Fund benefits
with a securities industry comprised of many and diverse firms and that the
long-term interest of shareholders of the Fund is best served by its
brokerage policies which include paying a fair commission rather than seeking
to exploit its leverage to force the lowest possible commission rate. The
primary factors considered in determining the firms to which brokerage orders
are given are the Adviser's appraisal of: the firm's ability to execute the
order in the desired manner; the value of research services provided by the
firm; and the firm's attitude toward and interest in mutual funds in general
including the sale of mutual funds managed and sponsored by the Adviser. The
Adviser does not offer or promise to any broker an amount or percentage of
brokerage commissions as an inducement or reward for the sale of shares of
the Fund. Over-the-counter purchases and sales are transacted directly with
principal market-makers except in those circumstances where in the opinion of
the Adviser better prices and execution are available elsewhere.
2
<PAGE>
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller
firms in general tend to provide information and interpretations on a smaller
scale, frequently with a regional emphasis. In addition, several firms
monitor federal, state, local and foreign political developments; many of the
brokers also provide access to outside consultants. The outside research
assistance is particularly useful to the Adviser's staff since the brokers as
a group tend to monitor a broader universe of securities and other matters
than the Adviser's staff can follow. In addition, it provides the Adviser
with a diverse perspective on financial markets. Research and investment
information is provided by these and other brokers at no cost to the Adviser
and is available for the benefit of other accounts advised by the Adviser and
its affiliates and not all of this information will be used in connection
with the Fund. While this information may be useful in varying degrees and
may tend to reduce the Adviser's expenses, it is not possible to estimate its
value and in the opinion of the Adviser it does not reduce the Adviser's
expenses in a determinable amount. The extent to which the Adviser makes use
of statistical, research and other services furnished by brokers is
considered by the Adviser in the allocation of brokerage business but there
is no formula by which such business is allocated. The Adviser does so in
accordance with its judgment of the best interest of the 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 ADVISER
The Adviser provides certain services and facilities required to carry on
the day-to-day operations of the Fund (for which it receives a management
fee) other than the costs of printing and mailing proxy materials, reports
and notices to shareholders; 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.
As compensation for its services, the Adviser receives a fee, which is
accrued daily against the value of the Fund's net assets and is paid by the
Fund 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
Fund's average daily net assets from $1 billion to $2 billion, and .60% of
the Fund's 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 Fund; .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 Fund in excess of
$1,510,000,000. For the fiscal years 1993, 1994 and 1995, the net management
fees paid by the Fund to the Adviser were $1,569,220, $1,571,191 and
$1,252,747 respectively.
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 Adviser is a wholly-owned subsidiary of Phoenix Home Life Mutual
Insurance Company ("Phoenix Home Life"), 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 Adviser also 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. The Adviser
currently has approximately $1.7 billion in assets under management. The
Adviser has acted as an investment adviser for over sixty years.
The Management Agreement 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 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
3
<PAGE>
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. The Exchange is scheduled to be closed on New Years Day, Independence
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed), Labor
Day, Thanksgiving Day, and Christmas. See the Prospectus for additional
information. See "Net Asset Value" in the Prospectus.
HOW TO BUY SHARES
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, 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
Shares of the Fund may be purchased from investment dealers at a price
equal to their net asset value per share, plus a sales charge which, at the
election of the purchaser, may be imposed either (i) at the time of the
purchase (the "initial sales charge alternative"), or (ii) on a contingent
deferred basis (the "deferred sales charge alternative").
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 5.
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 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 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.
4
<PAGE>
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 Fund, 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.
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, 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
5
<PAGE>
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 60 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.
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
6
<PAGE>
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.
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
7
<PAGE>
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 selling 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 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 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
8
<PAGE>
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 ($448,736).
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.
9
<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 Principal Occupations
Name and Address With the 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
49 Old Post Road Chairman (1989-1994). Director/Trustee, the National
Wethersfield, CT 06109 Affiliated 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
9 Rittenhouse Road York, Inc. (1970-present), Pace University
Bronxville, NY 10708 (1978-present), Atlantic Mutual Insurance Company
(1974-present), HRE Properties (1989-present), Greater
New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), 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).
Apartment 29G Director/Trustee, the National Affiliated Investment
New York, NY 10022 Companies (1983-1993). Consultant, The Levett Group
Holding, Inc. (1989-1990). Independent real estate market
consultant (1982-1990). Formerly a Major General of the
British Army.
10
<PAGE>
Leroy Keith, Jr. Trustee Chairman and Chief Executive Officer, Keith Ventures
Chairman and Chief Executive (1994-present). Director/Trustee, Phoenix Funds
Officer (1980-present). Director, Equifax Corp. (1991-present),
Keith Ventures and Keystone International Fund, Inc. (1989-present).
1729 Wood Nymph Trail Trustee, Keystone Liquid Trust, Keystone Tax Exempt
Lookout Mountain, GA 30750 Trust, Keystone Tax Free Fund, Master Reserves Tax Free
Trust, and Master 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 and Director (1994-present) and Executive Vice President,
President Investments (1987-present), Phoenix Home Life Mutual
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, DM Holdings,
Inc. (1985-present).
James M. Oates Trustee Director/Trustee, Phoenix Funds (1987-present). Director,
Managing Director Govett Worldwide Opportunity Funds, Inc. (1991-present)
The Wydown Group and Stifel Financial Corporation (1986-present).
50 Congress Street Director/Trustee, the National Affiliated Investment
Suite 1000 Companies (until 1993). Director and President
Boston, MA 02109 (1984-1994) 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). Director,
West Hartford, CT 06107 Vestaur Securities, Inc. (1972-present). Trustee and
Treasurer, J. Walton Bissell Foundation, Inc.
(1988-present). Director/Trustee, the National Affiliated
Investment Companies (until 1993).
11
<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).
102 Valley Road Consultant, Tootal Group (1989-1991). Vice President and
New Canaan, CT 06840 General Manager, 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 Weicker Chairman, Dresing, Lierman, Weicker (1995-present).
6931 Arlington Road Governor of the State of Connecticut (1991-1995).
Suite 501 President and Chief Executive Officer, Research! America
Bethesda, MD 20814 (1989-1990).
Martin J. Gavin Executive Senior Vice President, Investment Products, Phoenix Home
Vice Life Mutual Insurance Company (1989-present). Director
President and 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
President Company (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).
12
<PAGE>
James M. Dolan Vice Vice President and Compliance Officer (1994-present),
100 Bright Meadow Blvd. President and Assistant Secretary (1981-present), Phoenix Equity
P.O. Box 2200 Planning Corporation. Vice President, Phoenix Funds
Enfield, CT 06083-2200 (1989-present). Vice President (1991-present), Assistant
Clerk and Assistant 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 Blvd. President Life Mutual Insurance Company (1990-present). Senior Vice
P.O. Box 2200 President, Finance (1990-present), and Treasurer
Enfield, CT 06083-2200 (1994-present). Phoenix Equity Planning Corporation, and
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,
President Phoenix Home Life Mutual Insurance Company
(1995-present).
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).
13
<PAGE>
G. Jeffrey Bohne Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street Mutual Insurance Co. (1993-present), Vice President,
Greenfield, MA 01301 Transfer Agent 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 services rendered to the Fund for the fiscal year ended April 30,
1995, the Trustees received aggregate remuneration of $25,987. For services
on the Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is
not a full-time employee of the Adviser or any of its affiliates currently
receives a retainer at the annual rate of $30,000 and a fee of $2,000 per
joint meeting of the Boards. Each Trustee who serves on the Audit Committee
receives a retainer at the annual rate of $2,000 and a fee of $2,000 per
joint Audit Committee meeting attended. Each Trustee who serves on the
Nominating Committee receives a retainer at the annual rate of $1,000 and a
fee of $1,000 per joint Nominating Committee meeting attended. Each Trustee
who serves on the Executive Committee and who is not an interested person of
the Fund receives a retainer at the annual rate of $1,000 and $1,000 per
joint Executive Committee meeting attended. For services to the Fund only,
each Trustee who is not a full-time employee of the Adviser or any of its
affiliates receives a retainer at the annual rate of $3,000 and a fee of $200
per meeting attended; each Trustee who serves on the Audit Committee receives
a retainer at the annual rate of $200 and a fee of $200 per Audit Committee
meeting attended; each Trustee who serves on the Nominating Committee
receives a retainer at the annual rate of $100 and a fee of $1,000 per
Nominating Committee meeting attended, and each Trustee who serves on the
Executive Committee and who is not an interested person of the Fund receives
a retainer at the annual rate of $100 and $1,000 per joint Executive
Committee meeting attended. The foregoing fees are exclusive of reimbursement
of expenses incurred in connection with meeting attendance. Officers and
interested Trustees of the Fund are compensated for their services by the
Adviser and receive no compensation from the Fund.
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 meet formally once in 1995 and to be
available for informal consultations during the same period. For each of
those years, 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.
14
<PAGE>
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 of them.
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 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 over periods of 1, 5 and 10 years or up to the life of the class of
shares), calculated for each class separately pursuant to the following
formula: P(1 + T)n = ERV (where P = a hypothetical initial payment of $1,000,
T = the average annual total 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.
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
15
<PAGE>
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 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%. Performance
information reflects only the performance of a hypothetical investment in
each class during the particular time period on which the calculations are
based. Performance information should be considered in light of the Fund's
investment objectives and policies, characteristics and quality of the
portfolio, and the market condition during the given time period, and should
not be considered as a representation of what may be achieved in the future.
The Fund may also compute aggregate total return for specified periods
based on a hypothetical Class A or Class B account with an assumed initial
investment of $10,000. The aggregate total return is determined by dividing
the net asset value of this account at the end of the specified period by the
value of the initial investment and is expressed as a percentage. Calculation
of aggregate total return reflects payment of the Class A Shares's maximum
sales charge of 4.75% and assumes reinvestment of all income dividends and
capital gain distributions during the period. Based on the foregoing, the
Class A Share's aggregate total return quotation for the period commencing
August 1, 1994 and ending April 30, 1995 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.
16
<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 EQUITY OPPORTUNITIES 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:
<TABLE>
<S> <C>
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, previously filed, and herein incorporated by
reference.
2.1 By-laws of the Registrant, previously filed, and herein incorporated by reference.
3. Not Applicable.
4.1 Specimen certificate for Class A Shares of beneficial interest issued by the Registrant, previously
filed, and herein incorporated by reference.
4.2 Specimen certificate for Class B Shares of beneficial interest issued by the Registrant, previously
filed, and herein incorporated by reference.
5.1 Management Agreement between Registrant and National Securities & Research Corporation dated January
1, 1994, previously filed, and herein incorporated by reference.
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, previously filed, and herein incorporated by reference.
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 filed herein and incorporated by
reference.
27.* Financial Data Schedule.
18.* Power of attorney.
</TABLE>
*Filed herewith.
C-1
<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 May 30, 1995, the number of record holders of each class of
securities of the Registrant was as follows:
<TABLE>
<CAPTION>
Number of
Title of Class Record-holders
- ---------------------------------------- -------------
<S> <C>
Shares of Beneficial Interest--Class A 12,408
Shares of Beneficial Interest--Class B 75
</TABLE>
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 Adviser
See "Management of the Fund" in the Prospectus and "Services of the
Adviser" and "Trustees and Officers" of the Statement of Additional
Information in which is included in this Post-Effective Amendment.
The directors and officers of National Securities & Research Corporation
(the "Adviser") and their business and other connections are as follows:
<TABLE>
<CAPTION>
Position with
Name Investment 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 and Executive Senior Vice President, Investment Products, Phoenix Home Life
Vice President Mutual Insurance Company. Executive Vice President and
Director, Phoenix Investment Counsel, Inc., Phoenix
Securities Group, Inc., and Phoenix Equity Planning
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 and Executive Senior Vice President, Securities Investments, Phoenix Home
Vice President Life Mutual Insurance Company. Vice President, Phoenix Series
Fund, The Phoenix Edge Series Fund and Phoenix Multi-Sector
Fixed Income Fund. Director and President, Phoenix Investment
Counsel, Inc.
C-2
<PAGE>
Philip R. McLoughlin Chairman, CEO & Director Director and Executive Vice President, Investments, Phoenix
Home Life Mutual Insurance Company. Director and President,
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 President Vice President, Common Stock, Phoenix Home Life Mutual
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 Vice President, Phoenix Home Life Mutual Insurance Company.
Senior Vice President, Phoenix Equity Planning Corporation.
William R. Moyer Senior Vice President, Vice President, Investment Products Finance, Phoenix Home
Finance and Treasurer Life Mutual Life Insurance Company. Senior Vice President,
Finance, and Treasurer, Phoenix Equity Planning Corporation
and Phoenix Investment Counsel, Inc. Vice President, the
Phoenix Funds. Senior Vice President, Finance, Phoenix
Securities Group, Inc., Senior Vice President, Chief
Financial Officer, and Treasurer, W.S. Griffith & Co., Inc.
and Townsend Financial Advisers, Inc.
Michael K. Arends Vice President Portfolio Manager, Phoenix Home Life Mutual Insurance Company
(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).
C-3
<PAGE>
Curtiss O. Barrows Vice President Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, and Phoenix Investment Counsel,
Inc.
James M. Dolan Vice President and Assistant Vice President Compliance, Phoenix Home Life Mutual
Compliance Officer, Insurance Company. Vice President and Compliance Officer;
Assistant Secretary Assistant Secretary, Phoenix Equity Planning Corporation.
Vice President, Phoenix Funds. Vice President, Assistant
Clerk and Assistant Secretary, Phoenix Investment Counsel,
Inc. Vice President and Chief Compliance Officer, Phoenix
Realty Advisors, Inc. and Chief Compliance Officer, Phoenix
Realty Securities, Inc.
Jeanne H. Dorey Vice President Portfolio Manager, International, Phoenix Home Life Mutual
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 President Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Insurance Company. Vice President, Phoenix Series Fund,
Phoenix Multi-Portfolio Fund and Phoenix Investment Counsel,
Inc.
Jeanne T. Hanley Vice President Managing Director, Common Stock Research, Phoenix Home Life
Mutual Insurance Company. Vice President, The Phoenix Edge
Series Fund, Phoenix Series Fund, and Phoenix Investment
Counsel, Inc.
Christopher J. Vice President Portfolio Manager, Public Bonds, Phoenix Home Life Mutual
Kelleher Insurance Company. Vice President, Phoenix Series Fund, The
Phoenix Edge Series Fund, and Phoenix Investment Counsel,
Inc.
Michael R. Matty Vice President Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Insurance Company. Vice President, Phoenix Series Fund, and
Phoenix Investment Counsel, Inc.
Thomas S. Melvin, Jr. Vice President Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Insurance Company. Vice President, Phoenix Investment
Counsel, Inc. and Phoenix Multi-Portfolio Fund.
Robert J. Milnamow Vice President Portfolio Manager, Common Stock, Phoenix Home Life Mutual
Insurance Company. Vice President, Phoenix Total Return Fund,
Inc., The Phoenix Edge Series Fund, Phoenix Investment
Counsel, Inc., and Phoenix Equity Opportunities Fund.
Amy L. Robinson Vice President Managing Director, Securities Administration, Phoenix Home
Life Mutual Insurance Company. Vice President, The Phoenix
Edge Series Fund, Phoenix Series Fund, and Phoenix Investment
Counsel, Inc.
Leonard J. Saltiel Vice President Vice President, Investment Operations, Phoenix Home Life
Mutual Insurance Company. Senior Vice President, Phoenix
Equity Planning Corporation. Vice President, Phoenix Funds.
C-4
<PAGE>
Elizabeth R. Vice President, Field Vice President, Field and Investor Services, Phoenix Equity
Sadowinski and Investors Services Planning Corporation.
Dorothy J. Skaret Vice President Director, Public Fixed Income, Phoenix Home Life Mutual Life
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 President Managing Director, Public Fixed Income, Phoenix Home Life
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. Secretary Counsel, Phoenix Home Life Mutual Insurance Company.
McLaughlin 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>
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 Director None
One American Row
Hartford, CT 06115
Martin J. Gavin Director and Exec. Vice
56 Prospect Street President Executive Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Michael E. Haylon Director None
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director & President Trustee & President
One American Row
Hartford, CT 06115
Charles J. Paydos Director None
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Dona D. Young Director None
One American Row
Hartford, CT 06115
C-5
<PAGE>
Richard C. Shaw Executive Vice President
One American Row Offshore Investment Funds None
Hartford, CT 06115
Leonard J. Saltiel Senior Vice President Vice President
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
William R. Moyer Senior Vice President,
100 Bright Meadow Blvd. Finance and Treasurer Vice President
P.O. Box 2200
Enfield, CT 06083-2200
G. Jeffrey Bohne Vice President,
101 Munson Street Transfer Agent Operations Secretary
Greenfield, MA 01301
Nancy G. Curtiss Vice President,
56 Prospect Street Fund Accounting Treasurer
P.O. Box 150480
Hartford, CT 06115-0480
Maris Lambergs Vice President/National Sales
100 Bright Meadow Blvd. Mgr. None
P.O. Box 2200
Enfield, CT 06083-2200
James M. Dolan Vice President; Compliance
100 Bright Meadow Blvd. Officer & Asst. Secretary Vice President
P.O. Box 2200
Enfield, CT 06083-2200
Elizabeth R. Sadowinski Vice President, Field and
100 Bright Meadow Blvd. Investor Services Assistant Secretary
Enfield, CT 06083-2200
Ellen R. Moody Asst. Treasurer None
One American Row
Hartford, CT 06115
Eugene A. Charon Controller None
100 Bright Meadow Blvd.
P.O. Box 2200
Enfield, CT 06083-2200
Keith D. Robbins Secretary None
One American Row
Hartford, CT 06115
</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.
C-6
<PAGE>
Item 31. Management Services
Not applicable.
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.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and 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 20th day of July, 1995.
PHOENIX EQUITY OPPORTUNITIES FUND
ATTEST: /s/ Richard J. Wirth
Richard J. Wirth
Assistant Secretary
By: /s/ Philip R. McLoughlin
Philip R. McLoughlin
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 20th day of July, 1995.
<TABLE>
<CAPTION>
Signature Title
---------------------------- -----------------------
<S> <C>
Trustee
- -------------------------
C. Duane Blinn*
Trustee
- -------------------------
Robert Chesek*
Trustee
- -------------------------
E. Virgil Conway*
Treasurer (principal
financial and
accounting officer)
- -------------------------
Nancy G. Curtiss**
Trustee
- -------------------------
Harry Dalzell-Payne*
Trustee
- -------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and President
- -------------------------
Philip R. McLoughlin
Trustee
- -------------------------
James M. Oates*
Trustee
- -------------------------
Philip R. Reynolds*
Trustee
- -------------------------
Herbert Roth, Jr.*
Trustee
- -------------------------
Richard E. Segerson*
Trustee
- -------------------------
Lowell P. Weicker, Jr.***
</TABLE>
*By /s/ Philip R. McLoughlin
*Philip R. McLoughlin pursuant to powers of attorney filed with
Post-Effective Amendment No. 8 under this Registration Statement.
**Philip R. McLoughlin pursuant to power of attorney filed with Post-
Effective Amendment No. 10 under this Registration Statement.
***Philip R. McLoughlin pursuant to power of attorney filed herewith.
S1(c)
EXHIBIT 11
Consent of Independent Public Accountants
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statment of Additional Information constituting parts of this Post-Effective
Amendment No. 11 to the registration statment on form N-1A (the "Registration
Statment") 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 Registratin Statment. We also consent
to the reference to us under the heading Financial Highlights" in this
prospectus and under the heading "Financial Highlights" in the Prospectus and
under the heading "Independent Accountants"" in the Statement of Additional
Information.
(Signature of Price Waterhouse)
PRICE WATERHOUSE LLP
Boston Massachusetts
July 17, 1995
EXHIBIT 18
Power of Attorney
[/R]
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board of Trustees of Phoenix Equity
Opportunities Fund, hereby constitute and appoint Philip R. McLoughlin and
Patricia O. McLaughlin as my true and lawful attorneys and agents with full
power to sign for me in the capacity indicated below, any or all Registration
Statements or amendments thereto filed with the Securities and Exchange
Commission under the Securities Act of 1933 and/or the Investment Company Act
of 1940 relating to Phoenix Asset Reserve and hereby ratify and confirm my
signature as it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
June 6, 1995 /s/Lowell P. Weicker, Jr. , Trustee
Lowell P. Weicker, Jr.
<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
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<NAME> PHOENIX EQUITY OPPORTUNITIES FUND
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