[FRONT COVER]
April 30, 1997
P H O E N I X
ANNUAL REPORT
Phoenix Strategic
Equity Series Fund
- PHOENIX SMALL CAP FUND
- PHOENIX STRATEGIC THEME FUND
- PHOENIX EQUITY OPPORTUNITIES FUND
[LOGOTYPE] PHOENIX
DUFF & PHELPS
<PAGE>
- --------------------------------------------------------------------------------
PHOENIX SMALL CAP FUND
- --------------------------------------------------------------------------------
INVESTOR PROFILE
Phoenix Small Cap Fund is designed for long-term investors seeking
above-average capital appreciation through investments in small-capitalization
stocks.
INVESTMENT ADVISER'S REPORT
For the 12 months ended April 30, 1997, Phoenix Small Cap Fund Class A
shares were down 15.43% and Class B shares were down 16.03%, compared to a loss
of 13.54% for the Russell 2000 Growth Index. The Fund's cumulative return since
inception is 41.64%, placing it in the top 4% of a peer universe of 338 funds
according to Lipper Analytical Services, Inc. The cumulative return for the
Russell 2000 Growth Index for the same period was 3.79%. All performance figures
assume reinvestment of dividends and exclude the effect of sales charges.
The Fund's benchmark has been changed from the Russell 2000 Index to the
Russell 2000 Growth Index. This index is more closely correlated with the actual
characteristics of the Fund.
The last six months of the reporting period have been a time of great
volatility for the small-cap sector of the market. Late 1996 was characterized
by the strong performance of small-cap growth stocks. Early 1997, however, saw a
significant correction in this part of the market. For example, the Russell 2000
Growth Index fell 16.45% from its peak in late January to its low in April. An
increasingly positive earnings outlook for large-cap stocks, as measured by the
S&P 500 Index, apparently diverted investor attention from the small-cap market
during this time period.
At year-end 1996, the Fund was well-positioned to take advantage of the
strong market growth stocks were enjoying. Our highest weightings were in Energy
Technology and Software Solutions, two themes that were key drivers of portfolio
performance in 1996. These same themes were also among the hardest hit as the
market began its correction in January.
During this period of extreme volatility, we repositioned the portfolio to
a more defensive stance. We increased our diversification by holding smaller
positions in more stocks, broadening our weighting in defensive industries and
raising our cash holdings. These tactics enabled the Fund to weather the ongoing
volatility in the small-cap growth market.
OUTLOOK
Currently, market indicators are showing the small-cap segment of the
market is extremely undervalued relative to large-cap stocks. In addition,
sentiment measures indicate the sector is out of favor among investors, often a
sign of a greater opportunity. Finally, U.S. economic growth shows no signs of
weakening.
Looking forward, we believe we are in a constructive environment and
anticipate a recovery in the small-cap growth segment of the market. We have,
therefore, positioned the Fund to take advantage of the strong economy by
increasing our weighting in technology and other growth areas and by reducing
cash holdings.
1
<PAGE>
PHOENIX SMALL CAP FUND
- --------------------------------------------------------------------------------
[PIE CHART]
Short-Terms & Equivalents 20.7%
Energy Technology 13.4%
Deregulating Financial Services 12.1%
Next Generation Semiconductors 10.5%
Special Situations 10.2%
Retail Revival 6.6%
Software Solutions 6.1%
Logistics 4.0%
Quest for Clean Water 3.6%
Clean Energy Demand 3.1%
Move to Outsourcing 2.7%
America's Educational Crisis 2.2%
Real Assets Return 1.9%
21st Century Medicine 1.6%
Wireless Wave 1.3%
[/PIE CHART]
[LINE CHART]
Small Cap Fund Small Cap Fund Russell 2000 Russell 2000
--Class A --Class B Growth Index* Index**
10/16/95 9525 10000 10000 10000
4/30/96 15950 16680 12005 11617
4/30/97 13489 13607 10379 11623
[/LINE CHART]
Average Annual Total Returns
for the Periods Ending 4/30/97
From Inception
10/16/95 to
1 Year 4/30/97
- ----------------------------------------------------------------------
Class A with 4.75% sales charge -19.42% 21.46%
- ----------------------------------------------------------------------
Class A at net asset value -15.43% 25.39%
- ----------------------------------------------------------------------
Class B with CDSC -19.38% 22.14%
- ----------------------------------------------------------------------
Class B at net asset value -16.03% 24.48%
- ----------------------------------------------------------------------
Russell 2000 Growth Index* -13.54% 2.44%
- ----------------------------------------------------------------------
Russell 2000 Index** 0.05% 10.26%
- ----------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 10/16/95
(inception of the Fund) for Class A and Class B shares. The total return for
Class A shares reflects the maximum sales charge of 4.75% on the initial
investment and assumes reinvestment of dividends and capital gains. The total
return 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).
Returns indicate past performance, which is not predictive of future
performance. Investment return and net asset value will fluctuate, so that
your shares, when redeemed, may be worth more or less than the original cost.
* The Russell 2000 Growth Index is a commonly used, unmanaged indicator of
stock market total return performance for small-cap companies with
above-average growth orientation. The index does not reflect sales charges.
** The Russell 2000 Index is a commonly used, unmanaged indicator of stock
market total return performance for small-cap companies. The index does not
reflect sales charges.
2
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
INVESTMENTS AT APRIL 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------------
<S> <C> <C>
COMMON STOCKS--77.6%
Building--Cement/Concrete/Aggregate--0.8%
Lafarge Corp. 28,400 $ 688,700
Southdown, Inc. 35,000 1,264,375
---------------
1,953,075
---------------
Building--Residential/Commercial--0.5%
Centex Corp. 35,000 1,260,000
---------------
Commercial Services--Miscellaneous--0.7%
Caribiner International, Inc. (b) 35,000 1,855,000
---------------
Commercial Services--Printing--0.9%
Consolidated Graphics, Inc. (b) 90,000 2,193,750
---------------
Commercial Services--Schools--2.2%
Computer Learning Centers, Inc. (b) 75,000 1,996,875
Learning Tree International, Inc. (b) 37,800 1,190,700
Strayer Education, Inc. 90,000 2,317,500
---------------
5,505,075
---------------
Computer--Memory Devices--1.2%
Hutchinson Technology, Inc. (b) 115,000 3,119,375
---------------
Computer--Peripheral Equipment--0.2%
NeoMagic Corp. (b) 45,000 525,938
---------------
Computer--Services--3.6%
Computer Horizons Corp. (b) 40,000 1,740,000
Data Dimensions, Inc. (b) 145,000 3,443,750
Technology Solutions Co. (b) 100,000 2,637,500
Yahoo!, Inc. (b) 40,000 1,365,000
---------------
9,186,250
---------------
Computer--Software--4.1%
Cognos, Inc. (b) 90,000 2,283,750
Compuware Corp. (b) 120,000 4,530,000
Manugistics Group, Inc. (b) 64,000 3,440,000
---------------
10,253,750
---------------
Cosmetics/Personal Care--0.4%
Weider Nutrition International, Inc. (b) 89,100 980,100
---------------
Electric--Laser Systems/Component--1.5%
Cymer, Inc. (b) 93,000 3,824,625
---------------
Electric--Semiconductor Equipment--4.8%
DuPont Photomasks, Inc. (b) 80,000 3,830,000
PRI Automation, Inc. (b) 70,000 3,587,500
Speedfam International, Inc. (b) 33,400 809,950
Teradyne, Inc. (b) 115,000 3,766,250
---------------
11,993,700
---------------
Electric--Semiconductor Manufacturing--3.9%
ANADIGICS, Inc. (b) 129,700 3,664,025
Hadco Corp. (b) 31,900 1,363,725
Jabil Circuit, Inc. (b) 30,000 1,451,250
Sanmina Corp. (b) 25,000 1,250,000
Triquint Semiconductor, Inc. (b) 72,700 2,162,825
---------------
9,891,825
---------------
Finance--Equity REITS--1.9%
Beacon Properties Corp. 78,000 2,408,250
Cali Realty Corp. 84,000 2,478,000
---------------
4,886,250
---------------
Finance--Investment Bankers--1.8%
Edwards (A.G.), Inc. 74,000 2,590,000
Morgan Keegan, Inc. (b) 42,400 768,500
Raymond James Financial, Inc. (b) 55,800 1,304,325
---------------
4,662,825
---------------
Finance--Investment Management--1.1%
T. Rowe Price Associates 60,000 2,775,000
---------------
Financial Services--Miscellaneous--1.0%
Capitol One Financial Corp. 70,000 2,528,750
---------------
Insurance--Life--5.1%
Equitable of Iowa Co. 50,000 2,443,750
Presidential Life Corp. 210,000 3,018,750
ReliaStar Financial Corp. 82,000 4,961,000
Western National Corp. 93,000 2,394,750
---------------
12,818,250
---------------
Insurance--Multi Line--1.1%
Horace Mann Educators Corp. 60,000 2,812,500
---------------
Insurance--Property/Casualty/Title--2.0%
American Bankers Insurance Group, Inc. 40,000 2,115,000
Mutual Risk Management Ltd. 80,000 2,940,000
---------------
5,055,000
---------------
Leisure--Toys/Games/Hobby--0.6%
Action Performance Cos., Inc. (b) 60,000 1,582,500
---------------
Machinery--Farm--1.3%
Lindsay Manufacturing Co. 112,500 3,206,250
---------------
Medical--Biomed/Genetics--2.1%
Agouron Pharmaceuticals, Inc. (b) 45,000 2,880,000
Guilford Pharmaceuticals, Inc. (b) 102,800 2,377,250
---------------
5,257,250
---------------
Medical--Ethical Drugs--0.3%
Theragenics Corp. (b) 43,700 742,900
---------------
Medical--Outpatient/Home Care--0.3%
National Surgery Centers, Inc. (b) 28,000 840,000
---------------
Oil & Gas--Drilling--6.0%
Atwood Oceanics, Inc. (b) 44,000 2,695,000
Cliffs Drilling Co. (b) 93,000 5,673,000
Marine Drilling Co., Inc. (b) 230,000 3,622,500
Precision Drilling Corp. (b) 89,900 3,124,025
---------------
15,114,525
---------------
Oil & Gas--Field Services--3.7%
Pride Petroleum Services, Inc. (b) 265,000 4,571,250
Trico Marine Services, Inc. (b) 100,000 3,550,000
Veritas DGC, Inc. (b) 65,000 1,251,250
---------------
9,372,500
---------------
See Notes to Financial Statements
3
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
--------- ---------------
<S> <C> <C>
Oil & Gas--Machinery/Equipment--1.4%
Energy Ventures, Inc. (b) 16,000 $ 1,070,000
Gulf Island Fabrication, Inc. (b) 62,800 1,318,800
Varco International, Inc. (b) 48,800 1,122,400
---------------
3,511,200
---------------
Oil & Gas--U.S. Exploration & Production--4.4%
Forcenergy, Inc. (b) 120,000 3,720,000
Newfield Exploration Co. (b) 152,800 2,922,300
Stone Energy Corp. (b) 120,000 3,210,000
Tom Brown, Inc. (b) 70,000 1,277,500
---------------
11,129,800
---------------
Pollution Control--Equipment--1.2%
Culligan Water Technologies, Inc. (b) 75,000 3,065,625
---------------
Pollution Control--Services--3.3%
Newpark Resources, Inc. (b) 60,000 2,692,500
Philip Environmental, Inc. (b) 170,000 2,677,500
Tetra Tech, Inc. (b) 203,000 2,892,750
---------------
8,262,750
---------------
Retail--Apparel/Shoe--1.6%
Pacific Sunwear of California (b) 60,000 1,875,000
Ross Stores, Inc. 73,100 2,055,937
---------------
3,930,937
---------------
Retail--Discount & Variety--3.1%
Mac Frugals Bargains Close-Outs, Inc. (b) 100,000 2,925,000
Stein Mart, Inc. (b) 85,000 2,465,000
Tuesday Morning Corp. (b) 90,000 2,542,500
---------------
7,932,500
---------------
Retail--Mail Order & Direct--0.7%
dELiA*s, Inc. (b) 100,000 1,700,000
---------------
Shoes & Related Apparel--1.2%
Wolverine World Wide, Inc. 74,000 2,978,500
---------------
Steel--Specialty Alloys--0.5%
Special Metals Corp. (b) 95,000 1,341,875
---------------
Telecommunications--Equipment--2.1%
Digital Microwave Corp. (b) 45,000 1,158,750
MRV Communications, Inc. (b) 96,000 1,980,000
P-Com, Inc. (b) 26,500 758,562
Spectrian Corp. (b) 105,000 1,391,250
---------------
5,288,562
---------------
Transportation--Air Freight--0.3%
Eagle USA Airfreight, Inc. (b) 35,500 710,000
---------------
Transportation--Equipment Manufacturer--1.0%
Halter Marine Group, Inc. (b) 126,100 2,474,713
---------------
Transportation--Services--0.5%
Expeditors International of
Washington, Inc. (b) 55,000 1,375,000
---------------
Transportation--Truck--3.2%
JB Hunt Transport Services, Inc. 192,100 2,665,387
Swift Transportation Co., Inc. (b) 90,000 2,565,000
USFreightways Corp. 107,000 2,889,000
---------------
8,119,387
---------------
TOTAL COMMON STOCKS
(Identified cost $198,309,640) 196,017,812
---------------
FOREIGN COMMON STOCKS--1.7%
Electric--Semiconductor Equipment--1.7%
ASM Lithography Holding NV
(Netherlands) (b) 54,000 4,293,000
---------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $4,000,712) 4,293,000
---------------
TOTAL LONG-TERM INVESTMENTS--79.3%
(Identified cost $202,310,352) 200,310,812
---------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--20.6%
Commercial Paper--18.9%
Shell Oil Co. 5.58%, 5-1-97 A-1+ $3,600 3,600,000
Amoco Co. 5.52%, 5-2-97 A-1+ 2,895 2,894,556
Exxon Imperial U.S., Inc. 5.55%,
5-2-97 A-1+ 3,485 3,484,463
DuPont (E.I.) de Nemours & Co.
5.28%, 5-5-97 A-1+ 1,980 1,978,838
McKenna Triangle National Corp.
5.56%, 5-6-97 A-1+ 5,550 5,545,714
Minnesota Mining & Manufacturing
Co. 5.27%, 5-7-97 A-1+ 540 539,526
Pfizer, Inc. 5.50%, 5-7-97 A-1+ 2,105 2,103,070
Greenwich Funding Corp. 5.54%,
5-12-97 A-1+ 1,579 1,576,327
Heinz (H.J.) Co. 5.47%, 5-20-97 A-1 3,040 3,031,224
Warner-Lambert Co. 5.52%, 5-20-97 A-1+ 2,800 2,791,843
Pfizer, Inc. 5.47%, 5-29-97 A-1+ 4,500 4,480,855
Private Export Funding Corp.
5.35%, 5-29-97 A-1+ 3,300 3,284,437
Heinz (H.J.) Co. 5.50%, 5-30-97 A-1 3,625 3,608,939
Potomac Electric Power Co. 5.53%,
6-3-97 A-1 5,200 5,173,640
General Re Corp. 5.55%, 6-13-97 A-1+ 3,774 3,748,982
---------------
47,842,414
---------------
Federal Agency Securities--1.7%
Federal Home Loan Banks 5.34%, 5-23-97 1,215 1,211,035
Federal National Mortgage Assoc. 5.28%,
6-5-97 3,000 2,983,446
---------------
4,194,481
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $52,039,881) 52,036,895
---------------
TOTAL INVESTMENTS--99.9%
(Identified cost $254,350,233) 252,347,707(a)
Cash and receivables, less liabilities--0.1% 387,920
---------------
NET ASSETS--100.0% $252,735,627
===============
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $9,105,186 and gross
depreciation of $12,666,905 for income tax purposes. At April 30, 1997,
the aggregate cost of securities for federal income tax purposes was
$255,909,426.
(b) Non-income producing.
See Notes to Financial Statements
4
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
Assets
Investment securities at value
(Identified cost $254,350,233) $252,347,707
Cash 52,792
Receivables
Investment securities sold 27,471,925
Fund shares sold 784,341
Dividends and interest 48,825
---------------
Total assets 280,705,590
---------------
Liabilities
Payables
Investment securities purchased 27,119,880
Fund shares repurchased 382,295
Investment advisory fee 157,418
Distribution fee 113,326
Financial agent fee 10,204
Transfer agent fee 80,510
Trustees' fee 4,203
Accrued expenses 102,127
---------------
Total liabilities 27,969,963
---------------
Net Assets $252,735,627
===============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $280,182,727
Accumulated net realized loss (25,444,574)
Net unrealized depreciation (2,002,526)
---------------
Net Assets $252,735,627
===============
Class A
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $155,088,978) 10,972,539
Net asset value per share $14.13
Offering price per share
$14.13/(1-4.75%) $14.83
Class B
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $97,646,649) 6,984,075
Net asset value and offering price per share $13.98
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1997
Investment Income
Interest $ 2,649,688
Dividends 240,469
---------------
Total investment income 2,890,157
---------------
Expenses
Investment advisory fee 1,994,519
Distribution fee--Class A 423,679
Distribution fee--Class B 964,642
Financial agent fee 96,250
Transfer agent 621,523
Registration 122,073
Printing 51,720
Professional 31,818
Custodian 26,283
Trustees 18,260
Miscellaneous 11,204
---------------
Total expenses 4,361,971
---------------
Net investment loss (1,471,814)
---------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (25,221,777)
Net change in unrealized appreciation (depreciation)
on investments (27,980,129)
---------------
Net loss on investments (53,201,906)
---------------
Net decrease in net assets resulting from operations $(54,673,720)
===============
See Notes to Financial Statements
5
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
Year Ended October 16, 1995 to
April 30, 1997 April 30, 1996
--------------- -------------------
<S> <C> <C>
From Operations
Net investment income (loss) $ (1,471,814) $ (198,222)
Net realized gain (loss) (25,221,777) 478,693
Net change in unrealized appreciation (depreciation) (27,980,129) 25,977,603
-------------- -------------
Increase (decrease) in net assets resulting from operations (54,673,720) 26,258,074
-------------- -------------
From Distributions to Shareholders
Net realized gains--Class A (183,926) --
Net realized gains--Class B (108,414) --
In excess of net investment income--Class A -- (12,168)
In excess of accumulated net realized gains--Class A (141,528) --
In excess of accumulated net realized gains--Class B (83,423) --
-------------- -------------
Decrease in net assets from distributions to shareholders (517,291) (12,168)
-------------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (12,800,790 and
6,072,940 shares, respectively) 216,824,086 81,698,360
Net asset value of shares issued from reinvestment
of distributions (18,203 and 928 shares, respectively) 304,365 11,748
Cost of shares repurchased (7,723,733 and 196,589
shares, respectively) (126,330,628) (2,715,491)
-------------- -------------
Total 90,797,823 78,994,617
-------------- -------------
Class B
Proceeds from sales of shares (5,355,420 and 2,768,695
shares, respectively) 90,761,953 39,161,690
Net asset value of shares issued from reinvestment
of distributions (9,754 and 0 shares, respectively) 161,819 --
Cost of shares repurchased (1,088,642 and 61,152
shares, respectively) (17,334,625) (862,545)
-------------- -------------
Total 73,589,147 38,299,145
-------------- -------------
Increase in net assets from share transactions 164,386,970 117,293,762
-------------- -------------
Net increase in net assets 109,195,959 143,539,668
Net Assets
Beginning of period 143,539,668 0
-------------- -------------
End of period (including undistributed net
investment income of $0 and $0, respectively) $ 252,735,627 $143,539,668
============== =============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B
----------------------------- -----------------------------
From Inception From Inception
Year Ended 10/16/95 to Year Ended 10/16/95 to
4/30/97 4/30/96 4/30/97 4/30/96
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.74 $10.00 $16.68 $10.00
Income from investment operations
Net investment income (loss) (0.05)(5) (0.04)(1)(5) (0.17)(5) (0.09)(1)(5)
Net realized and unrealized gain (loss) (2.53) 6.79 (2.50) 6.77
---------- ---------- --------- --------
Total from investment operations (2.58) 6.75 (2.67) 6.68
---------- ---------- --------- --------
Less distributions
Dividends from net investment income -- -- -- --
Dividends from net realized gains (0.02) -- (0.02) --
In excess of net investment income -- (0.01) -- --
In excess of accumulated net realized gains (0.01) -- (0.01) --
---------- ---------- --------- --------
Total distributions (0.03) (0.01) (0.03) --
---------- ---------- --------- --------
Change in net asset value (2.61) 6.74 (2.70) 6.68
---------- ---------- --------- --------
Net asset value, end of period $14.13 $16.74 $13.98 $ 16.68
========== ========== ========= ========
Total return (2) (15.43)% 67.48%(4) (16.03)% 66.80%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $155,089 $98,372 $97,647 $45,168
Ratio to average net assets of:
Expenses 1.37% 1.50%(3) 2.12% 2.26%(3)
Net investment income (loss) (0.28)% (0.53)%(3) (1.03)% (1.44)%(3)
Portfolio turnover 325% 103%(4) 325% 103%(4)
Average commission rate paid (6) $0.0540 $0.0657 $0.0540 $0.0657
</TABLE>
(1) Includes reimbursement of operating expenses by investment advisor of $0.02
and $0.02, respectively.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized
(4) Not annualized
(5) Computed using average shares outstanding.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
7
<PAGE>
- --------------------------------------------------------------------------------
PHOENIX STRATEGIC THEME FUND
- --------------------------------------------------------------------------------
INVESTOR PROFILE
Phoenix Strategic Theme Fund is designed for investors seeking long-term
capital appreciation.
INVESTMENT ADVISER'S REPORT
Phoenix Strategic Theme Fund lagged the S&P 500 Index for the full year
ended April 30, 1997. The Fund's Class A shares returned -2.57% and Class B
shares returned -3.31%. For the same period, the S&P 500 returned 25.20%.
According to Lipper Analytical Services, Inc., the S&P 500 has been so strong
over the last 18-month period that it has exceeded 93% of all capital
appreciation funds over this time frame. Nevertheless, since its inception,
Phoenix Strategic Theme Fund has exceeded 55% of a peer universe of 169 funds,
with an annualized total return of 13%. All of these figures assume reinvestment
of dividends and exclude the effect of sales charges.
Over the past 12 months, the Fund has focused on the mid-cap arena, which
offers more opportunities for thematic investing, higher earnings growth rates
and more attractive valuations compared to large-cap stocks. It is difficult to
find emerging themes in the large-cap area because these companies tend to be
associated with mature industries. Yet, large-cap stocks have dominated over the
last 12 months. The Russell 2000, a barometer of small-cap stocks, returned a
mere 0.05%. In fact, the 12-month performance disparity between large-cap stocks
and small-cap stocks is the widest since the creation of the Russell 2000 in
1978. Further hindering our performance was a market rotation out of some of our
energy and technology holdings. Positive contributors included our financial
services and REIT issues as well as our defensive use of cash during the stock
market sell-off in February and March.
As of this writing, the stock market has recovered from its March
correction and has marched to new highs, again led by large-cap stocks. We
continue to identify themes with positive dynamics. Our Deregulating Financial
Services theme represents banks, insurance companies and brokerages that we
believe will continue to witness above-average earnings growth and industry
consolidation. Energy Technology is benefiting from the recovery of the oil
sector. Next Generation Semiconductors, another high conviction theme, is
benefiting from strong growth in the global PC market, cellular phones and new
consumer products. 21st Century Medicine continues to be an attractive theme due
to remarkable advances in gene-mapping, biotechnology and non-invasive surgical
techniques. America's Educational Crisis represents companies benefiting from
the retraining of America's workforce.
OUTLOOK
Moving forward, we believe our key investment themes will serve us well in
this environment. We have also included a strategic component to the Fund's
overall approach that gives us flexibility in markets where large-cap stocks
dominate. Furthermore, we expect the performance disparity between small- and
large-cap stocks will close as investors realize that small-cap stocks offer
comparatively higher growth rates and lower valuations. Finally, should the
economy slow, growth stocks will become more attractive and return to favor.
8
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
[PIE CHART]
Short-Term & Equivalents 24.3%
Deregulating Financial Services 21.1%
Special Situations 12.0%
Energy Technology 11.8%
Next Generation Semiconductors 9.0%
21st Century Medicine 5.0%
Logistics 4.5%
Data Storage Demand 4.3%
Real Assets Return 4.1%
Environmental Crisis Recycled 1.4%
America's Educational Crisis 1.3%
Quest for Clean Water 1.2%
[/PIE CHART]
[LINE CHART]
Strategic Strategic S&P 500
Theme Fund Theme Fund Stock
-- Class A -- Class B Index*
---------- ---------- ------
10/16/95 9525 10000 10000
4/30/96 11799 12341 11356
4/30/97 11496 11533 14219
[/LINE CHART]
Average Annual Total Returns
for the Periods Ending 4/30/97
From Inception
10/16/95 to
1 Year 4/30/97
- ------------------------------------------------------------
Class A with 4.75% sales charge -7.22% 9.47%
- ------------------------------------------------------------
Class A at net asset value -2.57% 13.00%
- ------------------------------------------------------------
Class B with CDSC -7.17% 9.70%
- ------------------------------------------------------------
Class B at net asset value -3.31% 12.16%
- ------------------------------------------------------------
S&P 500 Stock Index* 25.20% 25.68%
- ------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on 10/16/95
(inception of the Fund) for Class A and Class B shares. The total return for
Class A shares reflects the maximum sales charge of 4.75% on the initial
investment and assumes reinvestment of dividends and capital gains. The total
return 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). Returns
indicate past performance, which is not predictive of future performance.
Investment return and net asset value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
* The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P 500's performance does not reflect
sales charges.
9
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
INVESTMENTS AT APRIL 30, 1997
SHARES VALUE
-------- -------------
COMMON STOCKS-- 73.9%
Banks--Foreign--1.0%
BanPonce Corp. 37,000 $1,262,625
-------------
Banks--Money Center--1.0%
Chase Manhattan Corp. 14,000 1,296,750
-------------
Banks--Southeast--1.0%
First American Corp. 19,000 1,244,500
-------------
Banks--Super Regional--1.0%
Fleet Financial Group, Inc. 21,000 1,281,000
-------------
Commercial Services--Schools--1.3%
Education Management Corp. (b) 50,000 1,100,000
ITT Educational Services, Inc. (b) 25,000 568,750
-------------
1,668,750
-------------
Computer--Local Networks--2.1%
Ascend Communications, Inc. (b) 59,000 2,699,250
-------------
Computer--Memory Devices--4.3%
Quantum Corp. (b) 45,000 1,875,938
Seagate Technology, Inc. (b) 38,000 1,743,250
Western Digital Corp. (b) 30,000 1,848,750
-------------
5,467,938
-------------
Computer--Services--1.5%
America Online, Inc. (b) 42,000 1,895,250
-------------
Computer--Software--1.2%
Compuware Corp. (b) 42,000 1,585,500
-------------
Cosmetics/Personal Care--0.4%
Weider Nutrition International, Inc. (b) 42,600 468,600
-------------
Diversified Operations--1.1%
Corning, Inc. 28,000 1,351,000
-------------
Electric--Semiconductor Equipment--4.5%
Applied Materials, Inc. (b) 54,000 2,963,250
Teradyne, Inc. (b) 85,000 2,783,750
-------------
5,747,000
-------------
Electric--Semiconductor Manufacturing--4.5%
Altera Corp. (b) 27,000 1,338,187
LSI Logic Corp. (b) 65,000 2,486,250
Xilinx, Inc. (b) 40,000 1,960,000
-------------
5,784,437
-------------
Electrical--Equipment--1.0%
General Electric Co. 12,000 1,330,500
-------------
Finance--Equity REITS--4.1%
Equity Residential Properties Trust 35,000 1,531,250
Essex Property Trust, Inc. 40,000 1,170,000
Patriot American Hospitality, Inc. 58,000 1,247,000
Starwood Lodging Trust 33,000 1,270,500
-------------
5,218,750
-------------
Finance--Investment Bankers--3.6%
Charles Schwab Corp. 55,000 2,014,375
Merrill Lynch & Co., Inc. 14,000 1,333,500
Morgan Stanley Group, Inc. 20,000 1,262,500
-------------
4,610,375
-------------
Financial Services--Miscellaneous--1.1%
SunAmerica, Inc. 31,000 1,426,000
-------------
Insurance--Diversified--2.2%
Travelers Group, Inc. 51,000 2,824,125
-------------
Insurance--Life--6.7%
Conseco, Inc. 65,000 2,689,375
Lincoln National Corp. 23,000 1,288,000
Providian Corp. 44,000 2,541,000
Torchmark Corp. 32,000 1,988,000
-------------
8,506,375
-------------
Insurance--Property/Casualty/Title--3.5%
Ace, Ltd. 30,000 1,800,000
Allstate Corp. 20,000 1,310,000
American International Group, Inc. 11,000 1,413,500
-------------
4,523,500
-------------
Medical--Drug/Diversified--1.1%
Johnson & Johnson 23,000 1,408,750
-------------
Medical--Ethical Drugs--2.1%
Pfizer, Inc. 14,000 1,344,000
Schering-Plough Corp. 16,000 1,280,000
-------------
2,624,000
-------------
Oil & Gas--Drilling--4.4%
Diamond Offshore Drilling (b) 50,000 3,218,750
ENSCO International, Inc. (b) 51,000 2,422,500
-------------
5,641,250
-------------
Oil & Gas--International Integrated--1.5%
Exxon Corp. 34,000 1,925,250
-------------
Oil & Gas--Machinery/Equipment--4.5%
Cooper Cameron Corp. (b) 28,000 1,995,000
Smith International, Inc. (b) 54,000 2,558,250
Varco International, Inc. (b) 50,000 1,150,000
-------------
5,703,250
-------------
Oil & Gas--Refining--0.9%
Trizec Hahn Corp. 50,000 1,093,750
-------------
Pollution Control--Equipment--0.9%
Ionics, Inc. (b) 25,000 1,150,000
-------------
Pollution Control--Services--2.8%
Newpark Resources, Inc. (b) 40,000 1,795,000
Philip Environmental, Inc. (b) 40,000 630,000
U.S.A. Waste Services, Inc. (b) 37,000 1,211,750
-------------
3,636,750
-------------
Real Estate Operations--0.8%
Fairfield Communities, Inc. (b) 40,000 1,040,000
-------------
Retail--Major Discount Chains--1.0%
Costco Co., Inc. (b) 44,000 1,270,500
-------------
Transportation--Airline--2.0%
UAL Corp. (b) 17,000 1,264,375
U.S. Air Group, Inc. (b) 40,000 1,295,000
-------------
2,559,375
-------------
See Notes to Financial Statements
10
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
SHARES VALUE
-------- -------------
Transportation--Truck--4.5%
CNF Transportation, Inc. 78,000 $ 2,320,500
USFreightways Corp. 58,000 1,566,000
Yellow Corp. (b) 95,000 1,828,750
-------------
5,715,250
-------------
Utility--Water Supply--0.3%
Southwest Water Co. 25,800 341,850
-------------
TOTAL COMMON STOCKS
(Identified cost $91,969,841) 94,302,200
-------------
FOREIGN COMMON STOCKS--1.9%
Medical--Ethical Drugs--1.9%
Teva Pharmaceutical Industries, Ltd.
Sponsored ADR (Israel) (b) 47,000 2,385,250
-------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,494,912) 2,385,250
-------------
TOTAL LONG-TERM INVESTMENTS--75.8%
(Identified cost $94,464,753) 96,687,450
-------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ --------
SHORT-TERM OBLIGATIONS-- 29.8%
Commercial Paper--24.6%
Asset Securitization
Cooperative Corp. 5.65%,
5-1-97 A-1+ $4,746 4,746,000
Ciesco L.P. 5.55%, 5-1-97 A-1+ 3,000 3,000,000
Exxon Imperial U.S., Inc.
5.55%, 5-2-97 A-1+ 1,805 1,804,722
Preferred Receivables
Funding Corp. 5.33%,
5-2-97 A-1 520 519,923
International Lease Finance
Corp. 5.32%, 5-5-97 A-1 2,215 2,213,331
Merrill Lynch & Co., Inc.
5.57%, 5-7-97 A-1+ 2,195 2,192,962
Amoco Co. 5.40%, 5-9-97 A-1+ 3,500 3,495,800
General Electric Capital
Corp. 5.46%, 5-15-97 A-1+ 2,900 2,893,842
Heinz (H.J.) Co. 5.47%,
5-20-97 A-1 3,800 3,789,030
Greenwich Funding Corp.
5.54%, 5-21-97 A-1+ 2,520 2,512,244
Pfizer, Inc. 5.47%, 5-29-97 A-1+ 1,585 1,578,257
Private Export Funding
Corp. 5.35%, 5-29-97 A-1+ 2,730 2,717,125
---------------
31,463,236
---------------
Federal Agency Securities--5.2%
Federal Home Loan Banks 5.34%, 5-23-97 3,640 3,628,121
Federal National Mortgage Assoc. 5.28%,
6-5-97 3,000 2,983,446
---------------
6,611,567
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $38,077,832) 38,074,803
---------------
TOTAL INVESTMENTS--105.6%
(Identified cost $132,542,585) 134,762,253(a)
Cash and receivables, less liabilitites--(5.6%) (7,092,363)
---------------
NET ASSETS--100.0% $127,669,890
===============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,320,579 and gross
depreciation of $1,808,462 for income tax purposes. At April 30, 1997,
the aggregate cost of securities for federal income tax purposes was
$133,250,136.
(b) Non-income producing.
See Notes to Financial Statements
11
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
Assets
Investment securities at value
(Identified cost $132,542,585) $134,762,253
Cash 3,652
Receivables
Investment securities sold 13,910,103
Fund shares sold 356,640
Dividends and interest 20,880
---------------
Total assets 149,053,528
---------------
Liabilities
Payables
Investment securities purchased 20,930,845
Fund shares repurchased 202,155
Investment advisory fee 77,836
Distribution fee 56,048
Transfer agent fee 29,709
Financial agent fee 5,959
Trustees' fee 4,215
Accrued expenses 76,871
---------------
Total liabilities 21,383,638
---------------
Net Assets $127,669,890
===============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $126,312,012
Undistributed net investment income 199,760
Accumulated net realized loss (1,061,550)
Net unrealized appreciation 2,219,668
---------------
Net Assets $127,669,890
===============
Class A
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $77,827,000) 6,468,295
Net asset value per share $12.03
Offering price per share
$12.03/(1-4.75%) $12.63
Class B
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $49,842,890) 4,183,620
Net asset value and offering price per share $11.91
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1997
Investment Income
Interest $ 1,175,498
Dividends 704,060
--------------
Total investment income 1,879,558
--------------
Expenses
Investment advisory fee 742,401
Distribution fee--Class A 161,426
Distribution fee--Class B 344,165
Financial agent fee 41,154
Transfer agent 168,715
Registration 86,695
Printing 25,451
Professional 25,318
Custodian 22,000
Trustees 18,258
Miscellaneous 7,691
--------------
Total expenses 1,643,274
--------------
Net investment income 236,284
--------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized loss on securities (564,658)
Net realized gain on foreign currency transactions 165
Net change in unrealized appreciation (depreciation)
on investments (4,414,137)
--------------
Net loss on investments (4,978,630)
--------------
Net decrease in net assets resulting from operations $(4,742,346)
==============
See Notes to Financial Statements
12
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
From Inception
Year Ended October 16, 1995 to
April 30, 1997 April 30, 1996
--------------- -------------------
<S> <C> <C>
From Operations
Net investment income (loss) $ 236,284 $ (35,677)
Net realized gain (loss) (564,493) (376,137)
Net change in unrealized appreciation (depreciation) (4,414,137) 6,633,805
--------------- -----------------
Increase (decrease) in net assets resulting from operations (4,742,346) 6,221,991
--------------- -----------------
From Distributions to Shareholders
Net investment income--Class A (58,137) --
Net investment income--Class B -- --
In excess of accumulated net realized gains--Class A (75,556) --
In excess of accumulated net realized gains--Class B (45,199) --
Tax return of capital--Class A -- (25,935)
Tax return of capital--Class B -- (1,782)
--------------- -----------------
Decrease in net assets from distributions to shareholders (178,892) (27,717)
--------------- -----------------
From Share Transactions
Class A
Proceeds from sales of shares (5,618,602 and
2,760,919 shares, respectively) 70,489,900 29,305,894
Net asset value of shares issued from reinvestment
of distributions (9,860 and 2,423 shares,
respectively) 124,426 25,417
Cost of shares repurchased (1,859,542 and
63,967 shares, respectively) (23,252,060) (743,134)
--------------- -----------------
Total 47,362,266 28,588,177
--------------- -----------------
Class B
Proceeds from sales of shares (3,501,688 and
992,960 shares, respectively) 43,480,458 10,820,691
Net asset value of shares issued from reinvestment
of distributions (3,161 and 161 shares, respectively) 39,607 1,682
Cost of shares repurchased (287,858 and
26,492 shares, respectively) (3,604,353) (291,674)
--------------- -----------------
Total 39,915,712 10,530,699
--------------- -----------------
Increase in net assets from share transactions 87,277,978 39,118,876
--------------- -----------------
Net increase in net assets 82,356,740 45,313,150
Net Assets
Beginning of period 45,313,150 0
--------------- -----------------
End of period (including undistributed net
investment income of $199,760 and $0, respectively) $127,669,890 $45,313,150
=============== =================
</TABLE>
See Notes to Financial Statements
13
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A Class B
----------------------------- -----------------------------
From Inception From Inception
Year Ended 10/16/95 to Year Ended 10/16/95 to
4/30/97 4/30/96 4/30/97 4/30/96
------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.37 $10.00 $12.33 $10.00
Income from investment operations (7)
Net investment income (loss) 0.06(5) (0.00)(1)(5) (0.03)(5) (0.06)(1)(5)
Net realized and unrealized gain (loss) (0.38) 2.39 (0.38) 2.40
------------ ---------------- ------------ ----------------
Total from investment operations (0.32) 2.39 (0.41) 2.34
------------ ---------------- ------------ ----------------
Less distributions
Dividends from net investment income (0.01) -- -- --
In excess of accumulated net realized gains (0.01) -- (0.01) --
Tax return of capital -- (0.02) -- (0.01)
------------ ---------------- ------------ ----------------
Total distributions (0.02) (0.02) (0.01) (0.01)
------------ ---------------- ------------ ----------------
Change in net asset value (0.34) 2.37 (0.42) 2.33
------------ ---------------- ------------ ----------------
Net asset value, end of period $12.03 $12.37 $11.91 $12.33
============ ================ ============ ================
Total return (2) (2.57)% 23.89% (4) (3.31)% 23.41% (4)
Ratios/supplemental data:
Net assets, end of period (thousands) $77,827 $33,393 $49,843 $11,920
Ratio to average net assets of:
Expenses 1.40% 1.40% (3) 2.15% 2.16% (3)
Net investment income (loss) 0.49% (0.09)% (3) (0.23)% (1.06)% (3)
Portfolio turnover 532% 175% (4) 532% 175% (4)
Average commission rate paid (6) $0.0590 $0.0663 $0.0590 $0.0663
</TABLE>
(1) Includes reimbursement of operating expenses by investment adviser of $0.04
and $0.04, respectively.
(2) Maximum sales charge is not reflected in total return calculation.
(3) Annualized
(4) Not annualized
(5) Computed using average shares outstanding.
(6) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
(7) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
See Notes to Financial Statements
14
<PAGE>
- --------------------------------------------------------------------------------
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTOR PROFILE
Phoenix Equity Opportunities Fund is designed for investors seeking long-term
capital appreciation.
INVESTMENT ADVISER'S REPORT
For the 12 months ended April 30, 1997, Phoenix Equity Opportunities Fund
Class A shares were down 12.19% and Class B shares were down 12.79% compared to
a negative return of 13.54% for the Russell 2000 Growth Index. The S&P 500 Index
returned 25.20% for the same period. All performance figures assume reinvestment
of dividends and exclude the effect of sales charges.
Over reasonably long time frames, small and mid-sized companies are
generally able to achieve more rapid growth in sales and net income than larger,
well-established companies. We believe that above-average growth leads to
above-average stock market performance over time. The Russell 2000 Growth Index
is an unmanaged index of companies with characteristics that are more
representative of those the Fund favors than is the S&P 500 Index. As a result,
the Fund's benchmark has been changed from the S&P 500 Index to the Russell 2000
Growth Index.
During the second half of this reporting period, the broad market averages
continued to reach new highs, driven primarily by large capitalization stocks.
Several factors contributed to the poor performance of small- and mid-cap
stocks. Record cash inflows into equity mutual funds have driven many fund
managers to the more liquid large-cap market segment. Uncertainty over the
continuing strength of the economy and direction of interest rates also focused
investor attention on stocks perceived to have more predictable earnings,
typically the larger, more established companies.
Earlier in the year we moved some of the portfolio into larger
capitalization stocks, which helped performance. The Fund's exposure to the
technology sector, however, limited returns. Rational Software and Remedy Corp.
proved to be poor performers, and these positions were eliminated.
The Fund continues to take a thematic approach to identifying companies
with above-average growth potential. Five themes dominate the portfolio --
Deregulating Financial Services, Energy Technology, 21st Century Medicine, Next
Generation Semiconductor and Deregulating Media.
OUTLOOK
Conflicting signals about the economy and the direction of interest rates
could keep stock prices volatile in coming months. If economic growth moderates,
the Fund should benefit from its focus on firms with strong relative earnings
growth. We anticipate increasing our exposure to the financial and consumer
nondurable areas as buying opportunities present themselves.
15
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
[LINE CHART]
Equity S&P 500 Russell 2000
Opportunities Fund Stock Index** Growth Index*
--Class A
4/87 9525 10000 10000
4/88 9366 9346 8734
4/89 11287 11467 9860
4/90 12086 12663 9924
4/91 13556 14896 11193
4/92 14952 16976 12695
4/93 17419 18545 13444
4/94 18288 19536 15398
4/95 19964 22950 16743
4/96 26524 29898 23331
4/97 23290 37434 20171
[/LINE CHART]
Average Annual Total Returns for the Periods Ending 4/30/97
<TABLE>
<CAPTION>
From Inception
7/19/94 to
1 Year 5 Years 10 Years 4/30/97
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A with 4.75% sales charge -16.37% 8.21% 8.82% --
- ------------------------------------------------------------------------------------------------
Class A at net asset value -12.19% 9.27% 9.35% --
- ------------------------------------------------------------------------------------------------
Class B with CDSC -15.89% -- -- 7.43%
- ------------------------------------------------------------------------------------------------
Class B at net asset value -12.79% -- -- 8.31%
- ------------------------------------------------------------------------------------------------
Russell 2000 Growth Index* -13.54% 9.70% 7.27% 11.97%
- ------------------------------------------------------------------------------------------------
S&P 500 Stock Index** 25.20% 17.14% 14.11% 25.52%
- -----------------------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial gross investment of $10,000 made on 4/30/87 for
Class A shares. The total return for Class A shares reflects the maximum sales
charge of 4.75% on the initial investment and assumes reinvestment of dividends
and capital gains. Class B share performance will be greater or less than that
shown based on differences in inception date, fees and sales charges. The total
return (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). Returns indicate past performance, which is not predictive of
future performance. Investment return and net asset value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
* The Russell 2000 Growth Index is a commonly used, unmanaged indicator of
stock market total return performance for small-cap companies with
above-average growth orientation. The index does not reflect sales charges.
** The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. The S&P 500's performance does not reflect
sales charges.
16
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
INVESTMENTS AT APRIL 30, 1997
SHARES VALUE
--------- --------------
COMMON STOCKS--87.8%
Advertising--1.0%
Outdoor Systems, Inc. (b) 61,800 $ 1,714,950
--------------
Auto & Truck Parts--1.7%
Cummins Engine Co., Inc. 50,000 2,806,250
--------------
Banks--6.2%
BankAmerica Corp. 23,000 2,688,125
Chase Manhattan Corp. 70,000 6,483,750
Zions Bancorporation 7,800 986,700
--------------
10,158,575
--------------
Computer Software & Services--10.8%
America Online, Inc. (b) 60,000 2,707,500
Computer Associates International, Inc. 60,000 3,120,000
HBO & Co. 71,100 3,803,850
McAfee Associates, Inc. (b) 50,000 2,787,500
Microsoft Corp. (b) 20,000 2,430,000
Veritas Software Corp. (b) 60,000 2,017,500
Visio Corp. (b) 18,100 918,575
--------------
17,784,925
--------------
Cosmetics & Soaps--1.5%
Clorox Co. 20,000 2,547,500
--------------
Diversified Financial Services--3.3%
American Express Co. 50,000 3,293,750
Conseco, Inc. 50,000 2,068,750
--------------
5,362,500
--------------
Diversified Miscellaneous--0.7%
Central Garden & Pet Co. (b) 60,000 1,196,250
--------------
Electrical Equipment--0.5%
Westinghouse Electric Corp. 50,000 850,000
--------------
Electronics--8.4%
Datum, Inc. (b) 25,000 581,250
Dupont Photomasks, Inc. (b) 60,700 2,906,013
Level One Communications, Inc. (b) 26,100 835,200
Micron Technology, Inc. 100,000 3,525,000
SCI Systems, Inc. (b) 40,000 2,470,000
Texas Instruments, Inc. 40,000 3,570,000
--------------
13,887,463
--------------
Entertainment, Leisure & Gaming--3.8%
Time Warner, Inc. 75,000 3,375,000
Walt Disney Co. 35,000 2,870,000
--------------
6,245,000
--------------
Healthcare--Diversified--1.2%
Bristol-Myers Squibb Co. 30,000 1,965,000
--------------
Healthcare--Drugs--4.5%
Eli Lilly & Co. 40,000 3,515,000
Pfizer, Inc. 40,000 3,840,000
--------------
7,355,000
--------------
Hospital Management & Services--1.4%
Oxford Health Plans, Inc. (b) 35,000 2,305,625
--------------
Household Furnishings & Appliances--1.0%
Sunbeam Corp., Inc. 50,000 1,587,500
--------------
Insurance--5.7%
Allstate Corp. 55,000 3,602,500
Progressive Corp. 35,000 2,664,375
Unum Corp. 40,000 3,080,000
--------------
9,346,875
--------------
Medical Products & Supplies--1.9%
Johnson & Johnson 50,000 3,062,500
--------------
Oil Service & Equipment--9.9%
Diamond Offshore Drilling (b) 55,100 3,547,063
Global Marine, Inc. (b) 89,200 1,795,150
Noble Drilling Corp. (b) 120,000 2,085,000
Schlumberger Ltd. 40,000 4,430,000
Smith International, Inc. (b) 40,000 1,895,000
Transocean Offshore, Inc. 42,900 2,600,812
--------------
16,353,025
--------------
Pollution Control--2.0%
U.S.A. Waste Services, Inc. (b) 50,000 1,637,500
United Waste Systems, Inc. (b) 48,700 1,643,625
--------------
3,281,125
--------------
Professional Services--2.5%
HFS, Inc. (b) 70,000 4,147,500
--------------
Publishing, Broadcasting, Printing & Cable--5.0%
Clear Channel Communications,
Inc. (b) 80,000 3,880,000
Heftel Broadcasting Corp. Class A (b) 28,500 1,425,000
New York Times Co. 70,000 3,027,500
--------------
8,332,500
--------------
REITS--3.5%
General Growth Properties 53,500 1,705,312
Patriot American Hospitality, Inc. 192,200 4,132,300
--------------
5,837,612
--------------
Retail--1.8%
Home Depot, Inc. 50,000 2,900,000
--------------
Telecommunications Equipment--1.4%
Lucent Technologies, Inc. 40,000 2,365,000
--------------
Utility--Gas--1.7%
Sonat, Inc. 50,000 2,856,250
--------------
Utility--Telephone--6.4%
Bell Atlantic Corp. 80,000 5,420,000
NYNEX Corp. 100,000 5,175,000
--------------
10,595,000
--------------
TOTAL COMMON STOCKS
(Identified cost $140,327,941) 144,843,925
--------------
FOREIGN COMMON STOCKS--4.4%
Machinery--2.2%
ASM Lithography Holding NV
(Netherlands) (b) 45,000 3,577,500
--------------
See Notes to Financial Statements
17
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
SHARES VALUE
-------- -------------
Utility--Telephone--2.2%
Telecomunicacoes Brasileiras SA--
Telebras Sponsored ADR (Brazil) 32,200 $ 3,694,950
-------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $6,246,485) 7,272,450
-------------
WARRANTS--3.4%
Electronics--3.4%
Intel Warrants (b) 50,000 5,643,750
-------------
TOTAL WARRANTS
(Identified cost $5,352,501) 5,643,750
-------------
TOTAL LONG-TERM INVESTMENTS--95.6%
(Identified cost $151,926,927) 157,760,125
-------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
----------- --------
SHORT-TERM OBLIGATIONS--19.9%
Commercial Paper--12.3%
Anheuser-Busch Cos., Inc.
5.55%, 5-1-97 A-1+ $1,590 1,590,000
Ciesco L.P. 5.55%, 5-1-97 A-1+ 6,985 6,985,000
Campbell Soup Co. 5.50%,
5-8-97 A-1+ 4,015 4,010,706
Cargill, Inc. 5.45%,
5-15-97 A-1+ 3,075 3,068,483
Corporate Asset Funding
Co., Inc. 5.53%, 5-16-97 A-1+ 3,965 3,955,864
General Electric Capital
Corp. 5.55%, 6-13-97 A-1+ 750 745,028
---------------
20,355,081
---------------
Federal Agency Securities--7.5%
Federal Home Loan Banks 5.28%, 5-1-97 5,830 5,830,000
Federal Home Loan Mortgage Corp.
5.34%, 5-5-97 6,500 6,496,143
---------------
12,326,143
---------------
U.S. Treasury Bills--0.1%
U.S. Treasury Bills 4.72%, 5-1-97 200 200,000
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $32,881,224) 32,881,224
---------------
TOTAL INVESTMENTS--115.5%
(Identified cost $184,808,151) 190,641,349(a)
Cash and receivables, less liabilities--(15.5%) (25,579,524)
---------------
NET ASSETS--100.0% $165,061,825
===============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $7,579,373 and gross
depreciation of $2,611,794 for income tax purposes. At April 30, 1997,
the aggregate cost of securities for federal income tax purposes was
$185,673,770.
(b) Non-income producing.
See Notes to Financial Statements
18
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
Assets
Investment securities at value
(Identified cost $184,808,151) $190,641,349
Cash 5,343
Receivables
Investment securities sold 8,208,018
Fund shares sold 7,263
Dividends and interest 69,442
---------------
Total assets 198,931,415
---------------
Liabilities
Payables
Investment securities purchased 33,332,486
Fund shares repurchased 260,565
Investment advisory fee 95,330
Transfer agent fee 53,991
Distribution fee 35,031
Financial agent fee 7,256
Trustees' fee 4,817
Accrued expenses 80,114
---------------
Total liabilities 33,869,590
---------------
Net Assets $165,061,825
===============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $160,971,770
Accumulated net realized loss (1,743,143)
Net unrealized appreciation 5,833,198
---------------
Net Assets $165,061,825
===============
Class A
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $163,395,627) 23,713,170
Net asset value per share $6.89
Offering price per share
$6.89/(1-4.75%) $7.23
Class B
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $1,666,198) 246,110
Net asset value and offering price per share $6.77
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1997
Investment Income
Dividend $ 868,274
Interest 630,929
Other income 191,096
---------------
Total investment income 1,690,299
---------------
Expenses
Investment advisory fee 1,408,901
Distribution fee--Class A 499,009
Distribution fee--Class B 16,682
Financial agent fee 73,819
Transfer agent 317,994
Professional 42,975
Printing 35,482
Registration 33,677
Trustees 22,158
Custodian 20,755
Miscellaneous 14,121
---------------
Total expenses 2,485,573
---------------
Net investment loss (795,274)
---------------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 10,746,672
Net realized loss on foreign currency transactions (9,207)
Net change in unrealized appreciation (depreciation)
on investments (33,047,467)
---------------
Net loss on investments (22,310,002)
---------------
Net decrease in net assets resulting from operations $(23,105,276)
===============
See Notes to Financial Statements
19
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
April 30, 1997 April 30, 1996
--------------- ---------------
<S> <C> <C>
From Operations
Net investment income (loss) $ (795,274) $ (1,070,957)
Net realized gain 10,737,465 27,906,869
Net change in unrealized appreciation (depreciation) (33,047,467) 29,337,807
----------- -----------
Increase (decrease) in net assets resulting from
operations (23,105,276) 56,173,719
----------- -----------
From Distributions to Shareholders
Net realized gains--Class A (21,357,244) (20,539,261)
Net realized gains--Class B (197,785) (108,254)
In excess of accumulated net realized gains--Class A (1,175,456) --
In excess of accumulated net realized gains--Class B (10,885) --
----------- -----------
Decrease in net assets from distributions to
shareholders (22,741,370) (20,647,515)
----------- -----------
From Share Transactions
Class A
Proceeds from sales of shares (1,544,352 and
3,092,252 shares, respectively) 13,235,186 24,946,255
Net asset value of shares issued from reinvestment
of distributions (2,020,340 and 1,944,177 shares,
respectively) 16,243,531 14,853,511
Cost of shares repurchased (4,096,555 and 5,081,608
shares, respectively) (34,291,172) (41,255,024)
----------- -----------
Total (4,812,455) (1,455,258)
----------- -----------
Class B
Proceeds from sales of shares (115,267 and 129,377
shares, respectively) 965,240 1,068,242
Net asset value of shares issued from reinvestment
of distributions (24,702 and 13,074, respectively) 195,636 99,234
Cost of shares repurchased (48,133 and 59,229
shares, respectively) (387,617) (481,915)
----------- -----------
Total 773,259 685,561
----------- -----------
Decrease in net assets from share transactions (4,039,196) (769,697)
----------- -----------
Net increase (decrease) in net assets (49,885,842) 34,756,507
Net Assets
Beginning of period 214,947,667 180,191,160
----------- -----------
End of period (including undistributed net
investment income of $0 and $0, respectively) $165,061,825 $214,947,667
=========== ===========
</TABLE>
See Notes to Financial Statements
20
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended April 30,
1997 1996 1995 1994 1993
------------ ------------ ---------------------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.81 $ 7.40 $ 7.31 $ 9.64 $ 8.59
Income from investment operations
Net investment income (loss) (0.03)(4) (0.04)(4) 0.04 0.05 0.06
Net realized and unrealized gain (loss) (0.90) 2.34 0.58 0.57 1.34
------- ------- ------- ------- -------
Total from investment operations (0.93) 2.30 0.62 0.62 1.40
------- ------- ------- ------- -------
Less distributions
Dividends from net investment income -- -- (0.05) (0.05) (0.06)
Dividends from net realized gains (0.94) (0.89) (0.48) (2.90) (0.29)
In excess of accumulated net realized gains (0.05) -- -- -- --
------- ------- ------- ------- -------
Total distributions (0.99) (0.89) (0.53) (2.95) (0.35)
------- ------- ------- ------- -------
Change in net asset value (1.92) 1.41 0.09 (2.33) 1.05
------- ------- ------- ------- -------
Net asset value, end of period $ 6.89 $ 8.81 $ 7.40 $ 7.31 $ 9.64
======= ======= ======= ======= =======
Total return (1) (12.19)% 32.86% 9.16% 4.99% 16.50%
Ratios/supplemental data:
Net assets, end of period (thousands) $163,396 $213,600 $179,666 $186,037 $215,570
Ratio to average net assets of:
Expenses 1.23% 1.25 % 1.32% 1.26% 1.35%
Net investment income (loss) (0.39)% (0.53)% 0.60% 0.57% 0.67%
Portfolio turnover 412 % 302 % 358% 167% 31%
Average commission rate paid (5) $ 0.0543 $ 0.0600 N/A N/A N/A
Class B
--------------------------------------
From
Year Ended April 30, Inception
7/19/94 to
1997 1996 4/30/95
------------ ------------ -------------
Net asset value, beginning of period $ 8.73 $ 7.39 $ 7.28
Income from investment operations
Net investment income (loss) (0.09)(4) (0.10)(4) 0.00
Net realized and unrealized gain (loss) (0.88) 2.33 0.59
------- ------- -------
Total from investment operations (0.97) 2.23 0.59
------- ------- -------
Less distributions
Dividends from net investment income -- -- --
Dividends from net realized gains (0.94) (0.89) (0.48)
In excess of accumulated net realized gains (0.05) -- --
------- ------- -------
Total distributions (0.99) (0.89) (0.48)
------- ------- -------
Change in net asset value (1.96) 1.34 0.11
------- ------- -------
Net asset value, end of period $ 6.77 $ 8.73 $ 7.39
======= ======= =======
Total return (1) (12.79)% 31.92% 8.69%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 1,666 $ 1,348 $ 525
Ratio to average net assets of:
Expenses 1.98% 2.06% 2.15%(2)
Net investment income (loss) (1.15)% (1.18)% (0.06)%(2)
Portfolio turnover 412% 302% 358%
Average commission rate paid (5) $0.0543 $0.0600 N/A
</TABLE>
(1) Maximum sales charge is not reflected in total return calculation.
(2) Annualized
(3) Not annualized
(4) Computed using average shares outstanding.
(5) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for securities
trades on which commissions are charged. This rate generally does not
reflect mark-ups, mark-downs, or spreads on shares traded on a principal
basis.
See Notes to Financial Statements
21
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Strategic Equity Series 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.
Each Series has distinct investment objectives. The Small Cap Series seeks
long-term growth of capital by investing in a diversified portfolio of
securities, primarily common stock, of relatively small companies which the
adviser believes have long-term investment potential. The Strategic Theme Series
seeks long-term appreciation of capital through investing in securities of
companies that the adviser believes are particularly well positioned to benefit
from cultural, demographic, regulatory, social or technological changes
worldwide. The Equity Opportunities Series seeks to achieve long-term growth of
capital from investment in a diversified group of stocks or securities
convertible into stocks.
Each Series 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 each Series are borne pro rata by the holders of both classes of
shares, except that each class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. Security valuation:
Equity securities are valued at the last sale price, or if there had been
no sale that day, at the last bid price. Short-term investments having a
remaining maturity of 60 days or less are valued at amortized cost which
approximates market. All other securities and assets are valued at their fair
value as determined in good faith by or under the direction of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date or, in the case of certain foreign securities,
as soon as the Series is notified. Interest income is recorded on the accrual
basis. Realized gains and losses are determined on the identified cost basis.
C. Income taxes:
Each of the Series is treated as a separate taxable entity. It is the
policy of each Series in 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, each Series 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 are recorded by each Series 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 and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
22
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Continued)
F. Expenses:
Expenses incurred by the Fund with respect to any two or more Series are
allocated in proportion to the net assets of each Series, except where
allocation of direct expense to each Series or an alternative allocation method
can be more fairly made.
G. Options:
Each Series may purchase put or call options on securities and securities
indices and foreign currencies for the purpose of hedging against changes in the
market value of the underlying securities or foreign currencies. The Series pays
a premium which is included in the Series' Schedule of Investments and
subsequently marked to market to reflect the current value of the option. The
risk associated with purchasing put and call options is limited to the premium
paid.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Advisers, Phoenix
Investment Counsel, Inc. ("PIC") and National Securities and Research
Corporation ("NSR"), indirect majority-owned subsidiaries of Phoenix Home Life
Mutual Insurance Company ("PHL"), are entitled to a fee based upon the following
annual rates as a percentage of the average daily net assets of each Series:
1st $1-2 $2+
Series Adviser $1 Billion Billion Billion
- ---------------------------- --------- ------------ --------- ----------
Small Cap Series PIC 0.75% 0.70% 0.65%
Strategic Theme Series PIC 0.75% 0.70% 0.65%
Equity Opportunities Series NSR 0.70% 0.65% 0.60%
The Adviser has agreed to assume expenses and reduce the advisory fee for
the benefit of the Small Cap and Strategic Theme Series to the extent that other
operating expenses (excluding investment advisory fees, distribution fees,
interest, taxes, brokerage fees and commissions and extraordinary expenses)
exceed 0.50% and 0.40%, respectively, of the average daily net assets of each
Series.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp.
("PEPCO"), an indirect majority-owned subsidiary of PHL, has advised the Fund
that it retained net selling commissions of $432,737 for Class A shares and
deferred sales charges of $303,358 for Class B shares for the year ended April
30, 1997. In addition, each Series 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 each Series. The Distribution Plan for Class A shares
provides for fees to be paid up to a maximum on an annual basis of 0.30%; the
Distributor has voluntarily agreed to limit the fee to 0.25%. The Distributor
has advised the Fund that of the total amount expensed for the year ended April
30, 1997, $1,588,806 was earned by the Distributor and $820,797 was earned by
unaffiliated participants.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.03% of the average
daily net assets of each Series through December 31, 1996, and starting on
January 1, 1997, at an annual rate of 0.05% of average daily net assets up to
$100 million, 0.04% of average daily net assets of $100 million to $300 million,
0.03% of average daily net assets of $300 million through $500 million, and
0.015% of average daily net assets greater than $500 million; a minimum fee may
apply. PEPCO serves as the Fund's Transfer Agent with State Street Bank and
Trust Company as sub-transfer agent. For the year ended April 30, 1997, transfer
agent fees were $1,108,232 of which PEPCO retained $373,701 which is net of the
fees paid to State Street.
At April 30, 1997, PHL and its affiliates held shares of the Fund as
follows:
Aggregate
Shares Net Asset Value
--------- ----------------
Strategic Theme Series
--Class A 993,317 $11,949,604
--Class B 10,019 119,326
Equity Opportunities Series
--Class A 124 857
--Class B 18,833 127,497
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities (excluding short-term securities,
options, futures, and forward currency contracts) for the year ended April 30,
1997, aggregated the following:
Purchases Sales
--------------- ---------------
Small Cap Series $797,714,133 $677,295,192
Strategic Theme Series 457,473,624 397,163,740
Equity Opportunities Series 772,203,040 799,519,094
There were no purchases or sales of long-term U.S. Government securities.
4. CAPITAL LOSS CARRYOVERS
At April 30, 1997, Small Cap Series had a capital loss carryover of
$20,746,935, expiring in 2005, which may be used to offset future capital gains.
Under current tax law, capital losses realized after October 31, 1996 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the year ended April 30, 1997, the following losses were deferred:
Small Cap Series $377,891, Strategic Theme Series
23
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Continued)
$127,981 and Equity Opportunities Series $877,524. In addition, prior year
losses deferred were utilized as follows: Strategic Theme Series $375,980 and
Equity Opportunities Series $3,958 (foreign currency only).
5. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Series of the Fund have
recorded several reclassifications in the capital accounts. These
reclassifications have no impact on the net asset value of the Series 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, 1997, the Series recorded the following reclassifications to increase
(decrease) the accounts listed below:
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gain (loss) interest
---------------- -------------- ---------------
Small Cap Series $1,471,814 $ 2,154 $(1,473,968)
Strategic Theme Series 21,613 (165) (21,448)
Equity Opportunities
Series 795,274 (556,802) (238,472)
TAX INFORMATION NOTICE (Unaudited)
For federal income tax purposes, 2.17%, 38.70% and 4.54% of the ordinary
income dividends paid by the Small Cap Series, Strategic Theme Series and Equity
Opportunities Series, respectively, qualify for the dividends received deduction
of corporate shareholders.
For the fiscal year ended April 30, 1997, the Equity Opportunities Series
distributed $1,851,224 of long-term capital gain dividends.
This report is not authorized for distribution to prospective investors in
the Phoenix Strategic Equity Series Fund unless preceded or accompanied by an
effective prospectus which includes information concerning the sales charge,
the Fund's record and other pertinent information.
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO] Price Waterhouse LLP [LOGO]
To the Trustees and Shareholders of
Phoenix Strategic Equity Series Fund
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Phoenix Small Cap Fund, the Phoenix Strategic Theme Fund and the Phoenix Equity
Opportunities Fund (constituting separate series of the Phoenix Strategic Equity
Series Fund, hereinafter referred to as the "Fund") at April 30, 1997, and the
results of each of their operations, the changes in each of their net assets 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, 1997 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.
/s/ Price Waterhouse LLP
Boston, Massachusetts
June 11, 1997
25
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
David R. Pepin, Executive Vice President
William J. Newman, Senior Vice President
Michael K. Arends, Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser for Phoenix Equity
Opportunities Fund
National Securities & Research Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
Investment Adviser for Phoenix Strategic Theme
Fund and Phoenix Small Cap Fund
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
<PAGE>
[BACK COVER]
-------------------
Phoenix Strategic Equity Series Fund BULK RATE MAIL
PO Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
--------------------
[LOGOTYPE] PHOENIX
DUFF & PHELPS
PDP 744 (6/97)
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 031
<NAME> PHOENIX SMALL CAP FUND CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 254350
<INVESTMENTS-AT-VALUE> 252348
<RECEIVABLES> 28305
<ASSETS-OTHER> 53
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 280706
<PAYABLE-FOR-SECURITIES> 27120
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 850
<TOTAL-LIABILITIES> 27970
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 280183
<SHARES-COMMON-STOCK> 10973
<SHARES-COMMON-PRIOR> 5877
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (25445)
<ACCUM-APPREC-OR-DEPREC> (2002)
<NET-ASSETS> 252736
<DIVIDEND-INCOME> 240
<INTEREST-INCOME> 2650
<OTHER-INCOME> 0
<EXPENSES-NET> (4362)
<NET-INVESTMENT-INCOME> (1472)
<REALIZED-GAINS-CURRENT> (25222)
<APPREC-INCREASE-CURRENT> (27980)
<NET-CHANGE-FROM-OPS> (54674)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (325)
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<TABLE> <S> <C>
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<NAME> PHOENIX SMALL CAP FUND CLASS B
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
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<NUMBER> 021
<NAME> PHOENIX STRATEGIC THEME FUND CLASS A
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 022
<NAME> PHOENIX STRATEGIC THEME FUND CLASS B
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<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
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<OVERDISTRIBUTION-GAINS> (1062)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> PHOENIX EQUITY OPPORTUNITIES FUND CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 184808
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<PAID-IN-CAPITAL-COMMON> 160972
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<OVERDISTRIBUTION-GAINS> (1743)
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<NET-INVESTMENT-INCOME> (795)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> PHOENIX EQUITY OPPORTUNITIES FUND CLASS B
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
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</TABLE>
