April 30, 1998
P H O E N I X
F U N D S
ANNUAL REPORT
o PHOENIX SMALL CAP FUND
o PHOENIX STRATEGIC
THEME FUND
o PHOENIX EQUITY
OPPORTUNITIES FUND
[PHOENIX LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
Mutual funds are not insured by the FDIC; are not deposits or other
obligations of a bank and are not guaranteed by a bank; and are
subject to investment risks, including possible loss of the
principal invested.
<PAGE>
Chairman's Message
Dear Phoenix Funds Shareholder:
I'm pleased to make you aware that we recently changed our corporate name
to Phoenix Investment Partners, Ltd. We feel this new name better fits the
growing investment management firm we have been building and reflects our
commitment to partnership and excellence in serving the financial needs of
investors like you.
Over the past year, we have added several of the industry's most
experienced and talented money managers to our team to provide you with a wider
variety of quality investment products. Phoenix Investment Partners offers you
access to the distinct investment styles of independent money managers across
the U.S. and around the world:
Aberdeen Fund Managers, Inc.
Duff & Phelps Investment Management Co.
Phoenix Investment Counsel, Inc.
Roger Engemann & Associates, Inc.
Seneca Capital Management LLC
Classic Value group, led by Chris Bertelsen
Quantitative Value group, led by Steve Colton and Dong Hao Zhang
As always, we are committed to providing you with sound investments and
outstanding service--now with even more choices, including value-style mutual
funds. To learn more about our new partners and their distinctive investment
styles, contact your financial advisor or call a marketing specialist at
1-800-243-4361.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
President, Phoenix Funds
<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
The Phoenix Small Cap Fund posted strong performance for the fiscal year
ended April 30, 1998. The Fund's Class A shares returned 52.33% and Class B
shares returned 51.16%. During the same period, the Russell 2000 Growth Index
returned 43.70%.* The Fund's cumulative return since inception is 115.75%, more
than double the 49.14% cumulative gain posted by the Russell 2000 Growth Index
for the same period. All performance figures assume reinvestment of dividends
and exclude the effect of sales charges. Small company investing involves added
risks, including greater price volatility, less liquidity and increased
competitive threat.
The last six and 12 months have been a time of great volatility for the
small-cap sector of the market. After a difficult period for the first quarter
of 1997, small-cap growth stocks experienced a significant rally that ended in
October 1997. The sudden halt and ensuing market correction was spurred by the
Asian currency crisis. The Fund was able to weather this storm due to a
significant underweighting in the technology sector; however, the energy
weighting proved most difficult during this period.
At year-end 1997, the Fund was well-positioned to take advantage of the
changing market climate. The market turbulence enabled the Fund to build
positions in several exciting themes. Internet Commerce Ignition, a new theme,
represents companies benefiting from the explosive growth of the number of
people and businesses utilizing the Internet for retailing, advertising, and
business-to-business commerce. Move To Outsourcing is a theme that captures the
significant movement by corporations to outsource all but core competencies.
Software Solutions is a long-running theme that enables us to capitalize on new
software solutions, which help individuals and corporations to re-engineer their
businesses. Cancer Clinic is a theme we introduced to allow the Fund to
participate in the potential breakthroughs we believe we are likely to see in
the battle against numerous types of cancer.
OUTLOOK
Looking forward, we believe the Fund is well-positioned for the current
investment climate, which is characterized by worries of the "Asian flu" and
turmoil in the world's currency markets. Our driving themes coupled with our
defensive use of cash should serve us well in this climate. Finally, the
small-cap sector has certainly been a clearly out-of-favor sector compared with
the large-cap sector. The Fund has been able to provide solid performance
despite this difficult environment. We await the opportunity of having the wind
at the back of small-cap stocks.
* The Russell 2000 Growth Index is an unmanaged, commonly used measure of total
return performance of small-cap stocks. The Index is not available for direct
investment.
2
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
[TABULAR REPRESENTATION OF PIE CHART]
Special Situations 5.9%
Short-terms & Equivalents 16.7%
Internet Commerce Ignition 11.8%
Software Solutions 8.6%
Energy Technology 8.2%
Deep Water Dynamics 7.1%
Move to Outsourcing 6.7%
Temporary Teams 4.4%
Intl Telecom Deregulation 4.4%
Next Destination Data 3.8%
Deregulating Financial Services 3.7%
Cancer Clinic 3.6%
Next Generation Semiconductors 3.4%
21st Century Medicine 2.2%
Alternate Energy 2.1%
America's Educational Crisis 2.1%
Holistic Healthcare 1.8%
Kardiac Kids 1.4%
Viral Threat 1.3%
Speed Racing 0.8%
[TABULAR REPRESENTATION OF LINE CHART]
Small Cap Fund Small Cap Fund Russell 2000
--Class A --Class B Growth Index*
-------------- -------------- --------------
10/16/95 9525 10000 10000
4/30/96 15950 16680 12005
4/30/97 13489 14007 10379
4/30/98 $20548 $20874 $15278
Average Annual Total Returns
for the Periods Ending 4/30/98
<TABLE>
<CAPTION>
From Inception
10/16/95 to
1 Year 4/30/98
- --------------------------------------------------------
<S> <C> <C>
Class A with 4.75% sales
charge 45.14% 32.79%
- --------------------------------------------------------
Class A at net asset value 52.33% 35.36%
- --------------------------------------------------------
Class B with CDSC 47.16% 33.61%
- --------------------------------------------------------
Class B at net asset value 51.16% 34.36%
- --------------------------------------------------------
Russell 2000 Growth Index* 43.70% 18.16%
- --------------------------------------------------------
</TABLE>
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.
3
<PAGE>
Phoenix Small Cap Fund
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
COMMON STOCKS--76.4%
AUTO/TRUCK--TIRES & MISCELLANEOUS--0.3%
Championship Auto Racing Teams,
Inc. (b)....................... 49,500 $ 934,312
---------------
CHEMICALS--SPECIALITY--0.5%
North American Scientific, Inc.
(b)............................ 50,000 1,775,000
---------------
COMMERCIAL SERVICES--BUSINESS SERVICE--0.2%
American Dental Partners, Inc
(b)............................ 33,000 581,625
---------------
COMMERCIAL SERVICES--MISCELLANEOUS--2.5%
Condor Technology Solutions, Inc.
(b)............................ 240,000 4,185,000
INSpire Insurance Solutions,
Inc............................ 139,000 4,673,875
---------------
8,858,875
---------------
COMMERCIAL SERVICES--STAFFING--4.4%
Administaff, Inc. (b)............ 82,000 3,536,250
RCM Technologies, Inc. (b)....... 69,000 1,656,000
Staff Leasing, Inc. (b).......... 172,000 5,031,000
Staffmark, Inc. (b).............. 120,000 5,100,000
---------------
15,323,250
---------------
COMPUTER--LOCAL NETWORKS--0.1%
Visual Networks, Inc. (b)........ 10,000 331,250
---------------
COMPUTER--SERVICES--8.1%
Brightstar Information Technology
Group, Inc. (b)................ 27,500 429,687
Ciber, Inc. (b).................. 87,000 2,827,500
Complete Business Solutions, Inc
(b)............................ 157,000 5,367,437
Icon CMT Corp. (b)............... 240,000 5,010,000
Manhattan Associates, Inc (b).... 11,000 248,875
Mindspring Enterprises, Inc.
(b)............................ 70,000 4,725,000
Sapient Corp. (b)................ 80,000 3,950,000
Usweb Corp. (b).................. 263,000 5,999,687
---------------
28,558,186
---------------
COMPUTER--SERVICES--ADVERTISING--1.9%
Doubleclick, Inc. (b)............ 160,000 6,670,000
---------------
COMPUTER--SOFTWARE--2.7%
Advantage Learning Systems, Inc.
(b)............................ 105,000 3,307,500
Documentum, Inc. (b)............. 110,500 5,953,188
Exodus Communications, Inc.
(b)............................ 10,200 387,600
---------------
9,648,288
---------------
COMPUTER--SOFTWARE--EDUCATIONAL--1.1%
Learning Co., Inc. (The) (b)..... 140,000 4,007,500
---------------
COMPUTER--SOFTWARE--ENTERPRISES--3.8%
Brio Technology, Inc. (b)........ 10,000 110,000
Citrix Systems, Inc. (b)......... 58,000 3,603,250
SHARES VALUE
--------------- ---------------
COMPUTER--SOFTWARE--ENTERPRISES--CONTINUED
Legarto Systems, Inc. (b)........ 188,000 $ 5,945,500
Manugistics Group, Inc. (b)...... 58,000 3,480,000
Mobius Management Systems, Inc.
(b)............................ 5,000 92,500
---------------
13,231,250
---------------
COMPUTER--SOFTWARE--INTERNET--8.8%
Earthlink Network, Inc. (b)...... 94,000 6,668,125
Excite, Inc. (b)................. 76,000 5,082,500
First Virtual Corp. (b).......... 64,000 1,008,000
Infoseek Corp. (b)............... 152,000 5,111,000
Lycos, Inc. (b).................. 74,400 4,598,850
Yahoo! Inc. (b).................. 70,000 8,325,625
---------------
30,794,100
---------------
COMPUTER SOFTWARE--SECURITY--3.8
ISS Group, Inc. (b).............. 164,000 7,257,000
SCM Microsystems, Inc. (b)....... 91,000 6,210,750
---------------
13,467,750
---------------
COSMETICS/PERSONAL CARE--0.9%
NBTY, Inc. (b)................... 90,000 1,800,000
Nutraceutical International Corp.
(b)............................ 87,000 1,566,000
---------------
3,366,000
---------------
DIVERSIFIED OPERATIONS--0.9%
SLH Corp. (b).................... 103,000 3,090,000
---------------
ELECTRIC--LASER SYSTEMS--COMPONENT--1.0%
Cymer, Inc. (b).................. 154,000 3,436,125
---------------
ELECTRIC--MISCELLANEOUS--COMPONENTS--0.5%
Artisan Components, Inc. (b)..... 95,000 1,674,375
---------------
ELECTRIC PRODUCTS--MISCELLANEOUS--0.8%
Ballard Power Systems, Inc.
(b)............................ 23,500 2,701,031
---------------
ELECTRIC--SEMICONDUCTOR--EQUIPMENT--1.5%
Aspec Technology, Inc. (b)....... 120,000 1,665,000
SpeedFam International, Inc.
(b)............................ 123,500 3,581,500
---------------
5,246,500
---------------
ELECTRICAL--CONNECTORS--0.9%
Level One Communications, Inc
(b)............................ 105,000 3,268,125
---------------
ENERGY--OTHER--0.4%
Energy Research Corp. (b)........ 63,000 1,539,563
---------------
FINANCIAL SERVICES--MISCELLANEOUS--1.5%
AMRESCO, Inc. (b)................ 55,000 1,993,750
First Sierra Financial, Inc.
(b)............................ 47,900 1,209,475
4 See Notes to Financial Statements.
<PAGE>
PHOENIX SMALL CAP FUND
- ------------------------------------------------------
SHARES VALUE
--------------- ---------------
FINANCIAL SERVICES--MISCELLANEOUS--CONTINUED
Healthcare Financial Partners,
Inc. (b)....................... 41,000 $ 2,065,375
---------------
5,268,600
---------------
INSURANCE--LIFE--0.9%
Annuity and Life Re (Holdings)
Ltd. (b)....................... 130,000 3,103,750
---------------
LEISURE--SERVICES--0.6%
International Speedway Corp...... 55,000 1,973,125
---------------
MEDICAL--BIOMED/GENETICS--4.1%
Aviron (b)....................... 90,000 2,233,125
Coulter Pharmaceutical, Inc.
(b)............................ 204,000 5,865,000
Immunex Corp. (b)................ 55,000 3,774,375
Medimmune, Inc. (b).............. 45,000 2,373,750
---------------
14,246,250
---------------
MEDICAL--ETHICAL DRUGS--0.4%
Theragenics Corp. (b)............ 44,500 1,268,250
---------------
MEDICAL--GENERIC DRUGS--0.5%
Schein Pharmaceutical, Inc.
(b)............................ 72,000 1,764,000
---------------
MEDICAL--HOSPITALS--0.3%
Province Healthcare Co. (b)...... 41,000 1,132,625
---------------
MEDICAL--INSTRUMENTS--1.6%
Cyberonics, Inc. (b)............. 110,000 2,640,000
Novoste Corp. (b)................ 120,500 2,982,375
---------------
5,622,375
---------------
MEDICAL--PRODUCTS--0.9%
Horizon Medical Products, Inc.
(b)............................ 90,000 1,338,750
Perclose, Inc. (b)............... 60,000 1,822,500
---------------
3,161,250
---------------
METAL ORES--MISCELLANEOUS--0.5%
Stillwater Mining Co. (b)........ 65,000 1,718,438
---------------
OIL & GAS--DRILLING--3.8%
Cliffs Drilling Co. (b).......... 117,000 5,769,563
Marine Drilling Companies, Inc
(b)............................ 316,000 7,682,750
---------------
13,452,313
---------------
OIL & GAS--FIELD SERVICES--2.8%
Friede Goldman International,
Inc. (b)....................... 245,000 9,861,250
---------------
OIL & GAS--MACHINERY/EQUIPMENT--3.5%
Dril-Quip, Inc. (b).............. 150,000 5,390,625
Gulf Island Fabrication, Inc.
(b)............................ 65,700 1,527,525
SHARES VALUE
OIL & GAS--MACHINERY/EQUIPMENT--CONTINUED --------------- ---------------
National-Oilwell, Inc. (b)....... 147,000 $ 5,576,813
---------------
12,494,963
---------------
RETAIL--SUPERMARKET--0.9%
Whole Foods Market, Inc. (b)..... 50,000 3,093,750
---------------
RETAIL/WHOLESALE--BUILDING PRODUCTS--0.5%
Central Garden & Pet Co. (b)..... 48,000 1,644,000
---------------
RETAIL/WHOLESALE--COMPUTERS--0.5%
PC Connection, Inc. (b).......... 81,000 1,756,688
---------------
TELECOMMUNICATIONS--EQUIPMENT--2.7%
Inter-Tel, Inc................... 130,000 3,071,250
Yurie Systems, Inc. (b).......... 180,000 6,255,000
---------------
9,326,250
---------------
TELECOMMUNICATIONS--SERVICES--5.3%
IDT Corp. (b).................... 47,900 1,469,931
ITC Deltacom, Inc. (b)........... 124,000 3,549,500
Primus Telecommunications Group,
Inc. (b)....................... 130,000 3,103,750
STAR Telecommunications, Inc.
(b)............................ 232,000 6,278,500
Telegroup, Inc. (b).............. 57,600 864,000
Winstar Communications, Inc.
(b)............................ 92,000 3,576,500
---------------
18,842,181
---------------
TOTAL COMMON STOCKS
(Identified cost $242,930,300)............................... 268,233,163
---------------
FOREIGN COMMON STOCKS--6.9%
COMPUTER--SOFTWARE--1.1%
Lernout & Hauspie Speech Products
N.V. (Belgium) (b)............. 62,000 3,952,500
---------------
ELECTRIC--SEMICONDUCTOR--MFG--0.1%
Arm Holdings PLC ADR (United
Kingdom) (b)................... 5,000 201,875
---------------
MEDICAL--ETHICAL DRUGS--0.6%
Shire Pharmaceuticals Group PLC
ADR (United Kingdom) (b)....... 97,000 2,182,500
---------------
OIL & GAS--FIELD SERVICES--5.1%
Bouygues Offshore SA ADR
(France)....................... 100,000 2,143,750
Coflexip SA Sponsored ADR
(France)....................... 116,000 8,265,000
Core Laboratories NV ADR
(Netherlands) (b).............. 65,000 1,844,375
See Notes to Financial Statements. 5
<PAGE>
PHOENIX SMALL CAP FUND
- ------------------------------------------------------
SHARES VALUE
--------------- ---------------
OIL & GAS--FIELD SERVICES--CONTINUED
Petroleum Geo--Services ADR
(Norway) (b)................... 87,000 $ 5,720,250
---------------
17,973,375
---------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $21,026,214)................................ 24,310,250
---------------
TOTAL LONG-TERM INVESTMENTS--83.3%
(Identified cost $263,956,514)............................... 292,543,413
---------------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
--------------- -------
SHORT-TERM OBLIGATIONS--21.5%
COMMERCIAL PAPER--20.0%
Campbell Soup Co. 5.52%,
5/1/98......................... A-1+ $ 8,000 8,000,000
Cargill, Inc. 5.50%, 5/1/98...... A-1+ 8,000 8,000,000
Cafco 5.52%, 5/5/98.............. A-1 8,000 7,995,093
Deutshe Bank Financial Corp.
5.52%, 5/6/98.................. A-1 9,030 9,023,090
Vermont American Corp. 5.55%,
5/6/98......................... A-1+ 2,415 2,413,138
Kimberly-Clark Corp. 5.51%,
5/7/98......................... A-1+ 8,000 7,992,653
Potomac Electric Power Co. 5.48%,
5/7/98......................... A-1 3,955 3,951,388
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
--------------- ------- ---------------
COMMERCIAL PAPER--CONTINUED
AlliedSignal, Inc. 5.52%,
5/8/98......................... A-1 $ 3,000 $ 2,996,780
AlliedSignal, Inc. 5.50%,
5/11/98........................ A-1 4,970 4,962,366
Shell Oil Co. 5.52%, 5/13/98..... A-1+ 2,500 2,495,400
General Electric Capital Corp.
5.55%, 5/20/98................. A-1+ 3,095 3,085,934
Enterprise Capital Funding Corp.
5.54%, 5/22/98................. A-1+ 2,550 2,541,759
Colgate Palmolive Co. 5.50%,
5/27/98........................ A-1 7,000 6,972,195
---------------
70,429,796
---------------
FEDERAL AGENCY SECURITIES--1.5%
FHLMC 5.43%, 5/7/98.............. A-1+ 690 689,376
FNMA 5.43%, 5/13/98.............. A-1 4,520 4,511,818
---------------
5,201,194
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $75,630,990)...................................... 75,630,990
---------------
TOTAL INVESTMENTS--104.8%
(Identified cost $339,587,504)..................................... 368,174,403(a)
Cash and receivables, less liabilities--(4.8%)..................... (16,829,521)
---------------
NET ASSETS--100.0%................................................... $351,344,882
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $34,911,651 and gross
depreciation of $6,324,752 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$339,587,504.
(b) Non-income producing.
6 See Notes to Financial Statements.
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment securities at value
(Identified cost $339,587,504) $368,174,403
Receivables
Investment securities sold 8,285,490
Fund shares sold 1,046,007
------------
Total assets 377,505,900
------------
Liabilities
Payables
Investment securities purchased 25,185,407
Fund shares repurchased 433,275
Investment advisory fee 218,893
Distribution fee 165,723
Transfer agent fee 102,975
Financial agent fee 13,030
Trustees' fee 9,114
Accrued expenses 32,601
------------
Total liabilities 26,161,018
------------
Net Assets $351,344,882
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $313,054,699
Accumulated net realized gain 9,703,284
Net unrealized appreciation 28,586,899
------------
Net Assets $351,344,882
============
Class A
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $203,560,155) 11,720,505
Net asset value per share $17.37
Offering price per share
$17.37/(1-4.75%) $18.24
Class B
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $147,784,727) 8,698,561
Net asset value and offering price per share $16.99
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
Investment Income
<S> <C>
Interest $ 2,280,058
Dividends 480,466
------------
Total investment income 2,760,524
------------
Expenses
Investment advisory fee 2,487,577
Distribution fee--Class A 492,826
Distribution fee--Class B 1,345,465
Transfer agent 704,877
Financial agent fee 150,391
Registration 42,546
Custodian 36,471
Printing 35,795
Professional 20,799
Trustees 20,328
Miscellaneous 17,223
------------
Total expenses 5,354,298
------------
Net investment loss (2,593,774)
------------
Net Realized and Unrealized Gain on Investments
Net realized gain on securities 99,577,404
Net change in unrealized appreciation on investments 30,589,425
------------
Net gain on investments 130,166,829
------------
Net increase in net assets resulting from
operations $127,573,055
============
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
April 30, 1998 April 30, 1997
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income (loss) $ (2,593,774) $ (1,471,814)
Net realized gain (loss) 99,577,404 (25,221,777)
Net change in unrealized appreciation (depreciation) 30,589,425 (27,980,129)
-------------- --------------
Increase (decrease) in net assets resulting from operations 127,573,055 (54,673,720)
-------------- --------------
From Distributions to Shareholders
Net realized gains--Class A (35,702,853) (183,926)
Net realized gains--Class B (26,132,919) (108,414)
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 (61,835,772) (517,291)
-------------- --------------
From Share Transactions
Class A
Proceeds from sales of shares (5,292,562 and 12,800,790 shares, respectively) 91,738,490 216,824,086
Net asset value of shares issued from reinvestment of
distributions (2,365,346 and 18,203 shares, respectively) 34,439,436 304,365
Cost of shares repurchased (6,909,942 and 7,723,733 shares, respectively) (119,890,542) (126,330,628)
-------------- --------------
Total 6,287,384 90,797,823
-------------- --------------
Class B
Proceeds from sales of shares (1,984,492 and 5,355,420 shares, respectively) 35,124,815 90,761,953
Net asset value of shares issued from reinvestment of
distributions (1,737,551 and 9,754 shares, respectively) 24,812,223 161,819
Cost of shares repurchased (2,007,557 and 1,088,642 shares, respectively) (33,352,450) (17,334,625)
-------------- --------------
Total 26,584,588 73,589,147
-------------- --------------
Increase in net assets from share transactions 32,871,972 164,386,970
-------------- --------------
Net increase in net assets 98,609,255 109,195,959
Net Assets
Beginning of period 252,735,627 143,539,668
-------------- --------------
End of period (including undistributed net investment income of $0 and $0, respectively) $ 351,344,882 $ 252,735,627
============== ==============
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix Small Cap Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------
From Inception
Year Ended April 30, 10/16/95 to
1998 1997 4/30/96
---------------- ---------------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period $14.13 $ 16.74 $10.00
Income from investment operations
Net investment income (loss) (0.08)(5) (0.05)(5) (0.04) (1)(5)
Net realized and unrealized gain (loss) 6.80 (2.53) 6.79
------- --------- -------
Total from investment operations 6.72 (2.58) 6.75
------- -------- -------
Less distributions
Dividends from net investment income -- -- --
Dividends from net realized gains (3.48) (0.02) --
In excess of net investment income -- -- (0.01)
In excess of accumulated net realized gains -- (0.01) --
------- -------- -------
Total distributions (3.48) (0.03) (0.01)
------- -------- -------
Change in net asset value 3.24 (2.61) 6.74
------- -------- -------
Net asset value, end of period $17.37 $14.13 $16.74
======= ======== =======
Total return(2) 52.33% (15.43)% 67.48% (4)
Ratios/supplemental data:
Net assets, end of period (thousands) $203,560 $155,089 $98,372
Ratio to average net assets of:
Expenses 1.31% 1.37% 1.50% (3)
Net investment income (loss) (0.48)% (0.28)% (0.53)%(3)
Portfolio turnover 498% 325% 103% (4)
Average commission rate paid(6) $0.0533 $0.0540 $0.0657
<CAPTION>
Class B
--------------------------------------------------------
From Inception
Year Ended April 30, 10/16/95 to
1998 1997 4/30/96
---------------- ---------------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 13.98 $16.68 $10.00
Income from investment operations
Net investment income (loss) (0.21)(5) (0.17)(5) (0.09)(1)(5)
Net realized and unrealized gain (loss) 6.70 (2.50) 6.77
-------- -------- -------
Total from investment operations 6.49 (2.67) 6.68
-------- -------- -------
Less distributions
Dividends from net investment income -- -- --
Dividends from net realized gains (3.48) (0.02) --
In excess of net investment income -- -- --
In excess of accumulated net realized gains -- (0.01) --
-------- -------- -------
Total distributions (3.48) (0.03) --
-------- -------- -------
Change in net asset value 3.01 (2.70) 6.68
-------- -------- -------
Net asset value, end of period $16.99 $13.98 $16.68
======== ======== =======
Total return(2) 51.16% (16.03)% 66.80%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $147,785 $97,647 $45,168
Ratio to average net assets of:
Expenses 2.06% 2.12% 2.26% (3)
Net investment income (loss) (1.22)% (1.03)% (1.44)%(3)
Portfolio turnover 498% 325% 103% (4)
Average commission rate paid(6) $0.0533 $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 9
<PAGE>
PHOENIX STRATEGIC THEME FUND
INVESTOR PROFILE
Phoenix Strategic Theme Fund is designed for investors seeking long-term
capital appreciation.
INVESTMENT ADVISER'S REPORT
The Phoenix Strategic Theme Fund had double-digit returns for the fiscal
year ended April 30, 1998. Class A shares returned 36.22% and Class B shares
returned 35.18%. During the same period, the S&P 500 Index* returned 41.27%
compared with a 30.34% average return for equity mutual funds according to
Morningstar, Inc. Since its inception, the Phoenix Strategic Theme Fund's Class
A shares have returned 21.63% compared with an average annualized total return
of 21.17% for a peer universe of funds with capital appreciation as their
investment objective, according to Lipper Analytics, Inc. All performance
figures assume reinvestment of dividends and exclude the effect of sales
charges. Small company investing involves added risks, including greater price
volatility, less liquidity and increased competitive threat.
During the first six months of the fiscal year, small and mid-cap stocks
staged a strong recovery and outperformed their large-cap brethren. However,
this outperformance came to a halt during the October market correction, which
was spurred by the Southeast Asian currency crisis. Then large-cap stocks
resumed their leadership, taking the major indices to new highs. Recognizing
this shift, the Fund began emphasizing large-cap stocks and by the end of the
fiscal year, the average market capitalization of the Fund's holdings reached
$20 billion. Previously, we had focused on the mid-cap arena, which we believe
offers more opportunities for thematic investing, higher earnings growth rates,
and more attractive valuations compared to large-cap stocks. Yet, large-cap
stocks are maintaining their market leadership position.
The Fund's strong performance was generated by both new and existing
themes. Internet Commerce Ignition, a theme introduced in the past year,
represents companies benefiting from the explosive growth of the number of
people and businesses utilizing the Internet for retailing, advertising, and
business-to-business commerce. 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.
The 21st Century Medicine theme continues to be attractive due to remarkable
advances in gene-mapping, biotechnology, and non-invasive surgical techniques,
which are changing the way medicine is practiced and enhancing the quality of
life.
The Fund's performance was hindered by its exposure to our Energy
Technology theme, which suffered a setback with Asia's economic woes and the
subsequent decline in oil prices. We have scaled back our weighting in this
theme but still have exposure due to continued industry consolidation and
declining reserve/replacement ratios. The long-term picture for energy remains
solid, in our opinion.
OUTLOOK
Looking forward, we believe the Fund is well positioned for the current
investment climate, which is characterized by worries of the "Asian flu" and
turmoil in the world's currency markets. Our driving investment themes coupled
with our selective and opportunistic use of cash should serve us well in this
climate. As of April 30, the Fund's asset allocation mix was 93% equities and 7%
cash equivalents.
* The S&P's 500 Stock Index is an unmanaged, commonly used measure of total
return performance of large-cap stocks. The Index is not available for direct
investment.
10
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
[TABULAR REPRESENTATION OF PIE CHART]
Special Situations 14.0%
Next Destination Data 12.8%
Energy Technology 11.9%
Internet Commerce Ignition 9.9%
Deregulating Financial Services 8.0%
21st Century Medicine 7.6%
Short-terms & Equivalents 7.2%
Software Solutions 6.2%
Next Generation Semiconductors 5.5%
Satellite Sky 5.0%
Move to Outsourcing 4.6%
Drug Delivery 3.7%
Home as Headquarters 3.6%
[TABULAR REPRESENTATION OF PIE CHART]
Strategic Theme Fund Strategic Theme Fund S&P 500
--Class A --Class B Stock Index
-------------------- -------------------- -----------
10/16/95 9525 10000 10000
4/30/96 11799 12341 11356
4/30/97 11496 11933 14219
4/30/98 $15659 $15829 $20086
Average Annual Total Returns for the Periods Ending 4/30/98
<TABLE>
<CAPTION>
From From
Inception Inception
10/16/95 11/3/97
1 Year to 4/30/98 to 4/30/98
- -----------------------------------------------------------------
<S> <C> <C> <C>
Class A with 4.75% sales
charge 29.75% 19.31% --
- -----------------------------------------------------------------
Class A at net asset value 36.22% 21.63% --
- -----------------------------------------------------------------
Class B with CDSC 31.18% 19.83% --
- -----------------------------------------------------------------
Class B at net asset value 35.18% 20.72% --
- -----------------------------------------------------------------
Class C with CDSC -- -- 7.02%
- -----------------------------------------------------------------
Class C at net asset value -- -- 7.92%
- -----------------------------------------------------------------
Class M with 3.50% sales
charge -- -- 4.37%
- -----------------------------------------------------------------
Class M at net asset value -- -- 8.14%
- -----------------------------------------------------------------
S&P 500 Stock Index* 41.27% 31.60% 19.35%
- -----------------------------------------------------------------
</TABLE>
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). The total
return for Class C shares reflects the 1% contingent deferred sales charge
(CDSC) which is applicable on all shares redeemed during the 1st year after
purchase. The total return for Class M shares reflects the maximum sales charge
of 3.50% on the initial investment. 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.
11
<PAGE>
Phoenix Strategic Theme Fund
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- --------------
<S> <C> <C> <C>
COMMON STOCK--89.6%
AEROSPACE/DEFENSE EQUIPMENT--1.2%
Orbital Sciences Corp. (b)................................ 41,000 $ 1,824,500
--------------
COMMERCIAL SERVICES--MISCELLANEOUS--0.9%
Snyder Communication Corp. (b)............................ 38,000 1,615,000
--------------
COMPUTER--LOCAL NETWORKS--4.3%
Ascend Communications, Inc. (b)........................... 82,000 3,572,125
Cisco Systems, Inc. (b)................................... 43,500 3,186,375
--------------
6,758,500
--------------
COMPUTER--MEMORY DEVICES--4.2%
EMC Corp. (b)............................................. 111,000 5,119,875
Western Digital Corp. (b)................................. 72,000 1,422,000
--------------
6,541,875
--------------
COMPUTER--MINI/MICRO--2.2%
Dell Computer Corp. (b)................................... 42,000 3,391,500
--------------
COMPUTER--SERVICES--13.1%
America Online, Inc. (b).................................. 70,000 5,600,000
Ciber, Inc. (b)........................................... 44,700 1,452,750
Computer Sciences Corp. (b)............................... 32,000 1,688,000
DST Systems, Inc. (b)..................................... 46,000 2,535,750
HBO & Co. (b)............................................. 30,000 1,794,375
Lycos, Inc................................................ 28,000 1,730,750
Sportsline U.S.A., Inc.................................... 53,000 1,868,250
Yahoo!, Inc............................................... 32,000 3,806,000
--------------
20,475,875
--------------
COMPUTER--SOFTWARE--3.7%
Microsoft Corp. (b)....................................... 17,000 1,532,125
Realnetworks, Inc. (b).................................... 80,000 2,715,000
Veritas Software Co. (b).................................. 27,000 1,478,250
--------------
5,725,375
--------------
ELECTRIC--SEMICONDUCTOR EQUIPMENT--3.1%
Applied Materials, Inc. (b)............................... 43,000 1,553,375
Novelllus Systems, Inc. (b)............................... 35,000 1,675,625
Uniphase Corp. (b)........................................ 30,000 1,627,500
--------------
4,856,500
--------------
ELECTRICAL--SEMICONDUCTOR MANUFACTURER--2.0%
Intel Corp. (b)........................................... 20,000 1,616,250
MMC Networks, Inc......................................... 68,000 1,521,500
--------------
3,137,750
--------------
FINANCE--INVESTMENT BANKERS--2.0%
Merrill Lynch & Co., Inc.................................. 35,000 3,071,250
--------------
<CAPTION>
SHARES VALUE
-------- --------------
<S> <C> <C> <C>
FINANCIAL SERVICES--MISCELLANEOUS--4.3%
American Express Co....................................... 46,000 $ 4,692,000
Capital One Financial..................................... 22,000 2,113,375
--------------
6,805,375
--------------
HOUSEHOLD/OFFICE FURNITURE--0.7%
Steelcase, Inc............................................ 30,000 1,038,750
--------------
LEISURE--SERVICES--1.0%
Premier Parks, Inc........................................ 27,000 1,501,875
--------------
MEDIA--RADIO/TV--0.5%
Young Broadcasting Corp. Class A (b)...................... 17,000 850,000
--------------
MEDICAL--BIOMED/GENETICS--1.1%
Centocor, Inc. (b)........................................ 40,000 1,687,500
--------------
MEDICAL--DRUG/DIVERSIFIED--2.1%
ICN Pharmaceuticals, Inc.................................. 67,000 3,299,750
--------------
MEDICAL--ETHICAL DRUGS--3.8%
Alza Corp. (b)............................................ 91,000 4,362,312
Lilly (Eli) & Co.......................................... 22,000 1,530,375
--------------
5,892,687
--------------
MEDICAL--INSTRUMENTS--1.6%
Sofamor Danek Group Inc. (b).............................. 29,000 2,544,750
--------------
MEDICAL--PRODUCTS--4.3%
Becton Dickinson & Co..................................... 33,000 2,297,625
Boston Scientific Corp. (b)............................... 28,000 2,024,750
Pfizer, Inc............................................... 21,000 2,390,062
--------------
6,712,437
--------------
METAL ORES--GOLD/SILVER--2.1%
Newmont Mining Corp....................................... 100,000 3,218,750
--------------
OIL & GAS--DRILLING--2.2%
Transocean Offshore, Inc.................................. 62,000 3,464,250
--------------
OIL & GAS--FIELD SERVICES--4.3%
Global Industry, Ltd (b).................................. 115,000 2,609,062
Schlumberger Ltd.......................................... 18,500 1,533,188
Veritas DGC, Inc.......................................... 50,000 2,709,375
--------------
6,851,625
--------------
OIL & GAS--MACHINERY/EQUIPMENT--6.6%
Cooper Cameron Corp. (b).................................. 60,000 3,986,250
Smith International, Inc. (b)............................. 41,000 2,408,750
Varco International, Inc. (b)............................. 128,000 3,936,000
--------------
10,331,000
--------------
</TABLE>
12 See Notes to Financial Statements.
<PAGE>
PHOENIX STRATEGIC THEME FUND
- ------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
-------- --------------
OIL & GAS--U S EXPLORATION & PRODUCTS--0.5%
<S> <C> <C> <C>
Ocean Energy, Inc. (b).................................... 33,000 $ 808,500
--------------
RETAIL--HOME FURNISHINGS--1.3%
Linens 'n Things, Inc..................................... 33,000 1,988,250
--------------
RETAIL--MISCELLANEOUS/DIVERSIFIED--1.2%
Bed Bath & Beyond, Inc. (b)............................... 37,000 1,822,250
--------------
TELECOMMUNICATIONS--EQUIPMENT--5.6%
Advanced Fibre Communication, Inc. (b).................... 57,000 2,415,375
Globalstar Telecommunications, Ltd. (b)................... 26,100 1,817,213
Loral Space and Communication............................. 58,000 1,816,125
Lucent Technologies, Inc. (b)............................. 35,000 2,664,375
--------------
8,713,088
--------------
TELECOMMUNICATIONS--SERVICES--6.0%
AT&T Corp................................................. 50,000 3,003,125
Communications Satellite Corp............................. 43,000 1,736,125
Frontier Corp............................................. 55,000 1,646,563
General Motors Corp. Class H.............................. 15,000 828,750
Reltec Corp............................................... 55,000 2,193,125
--------------
9,407,688
--------------
TRANSPORTATION--AIRLINE--1.9%
U.S. Airways Group, Inc. (b).............................. 42,000 2,987,250
--------------
TRANSPORTATION--RAIL--1.8%
Kansas City Southern Industries, Inc...................... 63,000 2,846,812
--------------
TOTAL COMMON STOCKS
(Identified cost $119,880,453)................................................... 140,170,712
--------------
FOREIGN COMMON STOCKS--3.5%
ELECTRIC--SEMICONDUCTOR EQUIPMENT--2.5%
ASM Lithography Holding N.V. (b).......................... 25,500 2,336,437
PMC--Sierra, Inc. (Canada) (b)............................ 36,000 1,638,000
--------------
3,974,437
--------------
<CAPTION>
SHARES VALUE
-------- --------------
<S> <C> <C> <C>
MEDICAL--ETHICAL DRUGS--1.0%
Elan PLC Sponsored ADR (Ireland) (b)...................... 25,500 $ 1,584,423
--------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $16,368,487).................................................... 5,558,860
--------------
TOTAL LONG-TERM INVESTMENTS--93.1%
(Identified cost $136,248,940)................................................... 145,729,572
--------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POORS PAR
RATING VALUE
(UNAUDITED) (000)
----------- --------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--17.8%
COMMERCIAL PAPER--17.8%
AlliedSignal 5.51%, 5/1/98................................ A-1 $ 3,745 3,745,000
Cargill, Inc. 5.50%, 5/1/98............................... A-1+ 1,130 1,130,000
Exxon Imperial U.S., Inc. 5.50%, 5/4/98................... A-1+ 3,575 3,573,362
BellSouth Telecommunications, Inc. 5.50%, 5/5/98.......... A-1+ 3,500 3,497,861
Kimberly-Clark Corp. 5.50%, 5/5/98........................ A-1+ 3,750 3,747,708
Greenwich Funding Corp. 5.55%, 5/6/98..................... A-1+ 2,845 2,842,807
Preferred Receivables Funding Corp. 5.55%, 5/8/98......... A-1+ 2,745 2,742,038
Corporate Receivable Corp. 5.55%, 5/13/98................. A-1+ 3,040 3,034,376
Potomac Electric Power Co. 5.52%, 5/14/98................. A-1+ 3,500 3,493,023
--------------
27,806,175
--------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $27,806,175).................................................... 27,806,175
--------------
TOTAL INVESTMENTS--110.9%
(Identified cost $164,055,115)................................................... 173,535,747(a)
Cash and receivables, less liabilities--(10.9%).................................. (17,058,214)
--------------
NET ASSETS--100.0%................................................................. $156,477,533
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $11,478,862 and gross
depreciation of $2,194,008 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$164,250,893.
(b) Non-income producing.
See Notes to Financial Statements. 13
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment securities at value
(Identified cost $164,055,115) $173,535,747
Cash 1,484
Receivables
Investment securities sold 2,485,897
Dividends and interest 135,942
Fund shares sold 80,863
------------
Total assets 176,239,933
------------
Liabilities
Payables
Investment securities purchased 19,182,364
Fund shares repurchased 306,447
Investment advisory fee 98,722
Distribution fee 74,231
Transfer agent fee 24,093
Financial agent fee 9,046
Trustee's fee 9,074
Accrued expenses 58,423
------------
Total liabilities 19,762,400
------------
Net Assets $156,477,533
============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $134,582,816
Accumulated net realized gain 12,414,085
Net unrealized appreciation 9,480,632
------------
Net Assets $156,477,533
============
Class A
Shares of beneficial interest outstanding, $0.0001 par value,
unlimited authorization (Net Assets $89,883,977) 6,562,115
Net asset value per share $13.70
Offering price per share $13.70/(1-4.75%) $14.38
Class B
Shares of beneficial interest outstanding, $0.0001 par value,
unlimited authorization (Net Assets $66,106,883) 4,909,907
Net asset value and offering price per share $13.46
Class C
Shares of beneficial interest outstanding, $0.0001 par value,
unlimited authorization (Net Assets $266,797) 19,814
Net asset value and offering price per share $13.47
Class M
Shares of beneficial interest outstanding, $0.0001 par value,
unlimited authorization (Net Assets $219,876) 16,288
Net asset value per share $13.50
Offering price per share $13.50/(1-3.50%) $13.99
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
Investment Income
<S> <C>
Interest $ 891,877
Dividends 718,359
-----------
Total investment income 1,610,236
-----------
Expenses
Investment advisory fee 1,139,421
Distribution fee--Class A 227,277
Distribution fee--Class B 608,380
Distribution fee--Class C 876
Distribution fee--Class M 431
Financial agent fee 94,670
Transfer agent 241,789
Registration 63,699
Professional 24,370
Printing 22,030
Custodian 19,764
Trustees 20,280
Miscellaneous 7,852
-----------
Total expenses 2,470,839
-----------
Net investment loss (860,603)
-----------
Net Realized and Unrealized Gain on Investments
Net realized gain on securities 38,200,352
Net realized loss on written options (375,904)
Net change in unrealized appreciation on investments 7,260,964
-----------
Net gain on investments 45,085,412
-----------
Net increase in net assets resulting from
operations $44,224,809
===========
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
April 30, 1998 April 30, 1997
---------------- ---------------
From Operations
<S> <C> <C>
Net investment income (loss) $ (860,603) $ 236,284
Net realized gain (loss) 37,824,448 (564,493)
Net change in unrealized appreciation (depreciation) 7,260,964 (4,414,137)
------------- -------------
Increase (decrease) in net assets resulting from operations 44,224,809 (4,742,346)
------------- -------------
From Distributions to Shareholders
Net investment income--Class A -- (58,137)
In excess of net investment income--Class A (101,991) --
Net realized gains--Class A (13,931,615) --
Net realized gains--Class B (9,617,855) --
Net realized gains--Class C (21,083) --
Net realized gains--Class M (15,426) --
In excess of accumulated net realized gains--Class A -- (75,556)
In excess of accumulated net realized gains--Class B -- (45,199)
------------- -------------
Decrease in net assets from distributions to shareholders (23,687,970) (178,892)
------------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (1,116,085 and 5,618,602 shares, respectively) 15,627,146 70,489,900
Net asset value of shares issued from reinvestment of distributions
(1,156,842 and 9,860 shares, respectively) 13,731,378 124,426
Cost of shares repurchased (2,179,107 and 1,859,542 shares, respectively) (29,983,137) (23,252,060)
------------- -------------
Total (624,613) 47,362,266
------------- -------------
Class B
Proceeds from sales of shares (666,515 and 3,501,688 shares, respectively) 9,141,162 43,480,458
Net asset value of shares issued from reinvestment of distributions
(783,925 and 3,161 shares, respectively) 9,156,239 39,607
Cost of shares repurchased (724,153 and 287,858 shares, respectively) (9,883,220) (3,604,353)
------------- -------------
Total 8,414,181 39,915,712
------------- -------------
Class C
Proceeds from sales of shares (18,017 and 0 shares, respectively) 248,777 --
Net asset value of shares issued from reinvestment of distributions
(1,797 and 0 shares, respectively) 20,990 --
Cost of shares repurchased (0 and 0 shares, respectively) -- --
------------- -------------
Total 269,767 --
------------- -------------
Class M
Proceeds from sales of shares (14,974 and 0 shares, respectively) 196,112 --
Net asset value of shares issued from reinvestment of distributions
(1,314 and 0 shares, respectively) 15,357 --
Cost of shares repurchased (0 and 0 shares, respectively) -- --
------------- -------------
Total 211,469 --
------------- -------------
Increase in net assets from share transactions 8,270,804 87,277,978
------------- -------------
Net increase in net assets 28,807,643 82,356,740
Net Assets
Beginning of period 127,669,890 45,313,150
------------- -------------
End of period (including undistributed net investment income of $0 and $199,760,
respectively) $ 156,477,533 $ 127,669,890
============= =============
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------
From Inception
Year Ended April 30, 10/16/95 to
1998 1997 4/30/96
--------------------------------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period $12.03 $12.37 $10.00
Income from investment operations(7)
Net investment income (loss) (0.04)(5) 0.06(5) 0.00(1)(5)
Net realized and unrealized gain (loss) 4.03 (0.38) 2.39
------- ------ -------
Total from investment operations 3.99 (0.32) 2.39
------- ------ -------
Less distributions
Dividends from net investment income -- (0.01) --
Dividend from net realized gains (2.29) -- --
In excess of net investment income (0.03) -- --
In excess of accumulated net realized gains -- (0.01) --
Tax return of capital -- -- (0.02)
------- ------- -------
Total distributions (2.32) (0.02) (0.02)
------- ------- -------
Change in net asset value 1.67 0.34) 2.37
------- ------- -------
Net asset value, end of period $13.70 $12.03 $12.37
======= ======= =======
Total return(2) 36.22% (2.57)% 23.89%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $89,884 $77,827 $33,393
Ratio to average net assets of:
Expenses 1.33% 1.40% 1.40%(3)
Net investment income (loss) (0.26)% 0.49% (0.09)%(3)
Portfolio turnover 618% 532% 175%(4)
Average commission rate paid(6) $0.0568 $0.0590 $0.0663
<CAPTION>
Class B
--------------------------------------------------------
From Inception
Year Ended April 30, 10/16/95 to
1998 1997 4/30/96
--------------------------------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period $11.91 $12.33 $10.00
Income from investment operations(7)
Net investment income (loss) (0.14)(5) (0.03)(5) (0.06)(1)(5)
Net realized and unrealized gain (loss) 3.98 (0.38) 2.40
------- -------- ------
Total from investment operations 3.84(5) (0.41) 2.34
------- -------- ------
Less distributions
Dividends from net investment income -- -- --
Dividend from net realized gains (2.29) -- --
In excess of net investment income -- -- --
In excess of accumulated net realized gains -- (0.01) --
Tax return of capital -- -- (0.01)
------- -------- -------
Total distributions (2.29) (0.01) (0.01)
------- -------- -------
Change in net asset value 1.55 (0.42) 2.33
------- -------- -------
Net asset value, end of period $13.46 $11.91 $12.33
======= ======== =======
Total return(2) 35.18% (3.31)% 23.41%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $66,107 $49,843 $11,920
Ratio to average net assets of:
Expenses 2.08% 2.15% 2.16%(3)
Net investment income (loss) (1.02)% (0.23)% (1.06)%(3)
Portfolio turnover 618% 532% 175%(4)
Average commission rate paid(6) $0.0568 $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.
16 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Theme Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class C Class M
---------------- ----------------
From Inception From Inception
11/3/97 to 11/3/97 to
4/30/98 4/30/98
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $14.93 $14.93
Income from investment operations(7)
Net investment income (loss) (0.05)(5) (.02)(5)
Net realized and unrealized gain (loss) 0.88 0.88
------- -------
Total from investment operations 0.83 0.86
------- -------
Less distributions
Dividends from net investment income -- --
Dividend from net realized gains (2.29) (2.29)
In excess of accumulated net realized gains -- --
------- -------
Total distributions (2.29) (2.29)
------- -------
Change in net asset value (1.46) (1.43)
------- -------
Net asset value, end of period $13.47 $13.50
======= =======
Total return(2) 7.92%(4) 8.14%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $267 $220
Ratio to average net assets of:
Expenses 2.08%(3) 1.58%(3)
Net investment income (loss) (0.87)%(3) (0.40)%(3)
Portfolio turnover 618%(4) 618%(4)
Average commission rate paid(6) $0.0568 $0.0568
</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 17
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
INVESTOR PROFILE
Phoenix Equity Opportunities Fund is designed for investors seeking
long-term capital appreciation.
INVESTMENT ADVISER'S REPORT
Phoenix Equity Opportunities Fund posted excellent returns over this latest
reporting cycle. For the 12 months ended April 30, 1998, Class A shares returned
44.66% and Class B shares returned 43.58%. The Russell 2000 Growth Index
returned 43.70% and the S&P 500 Index returned 41.27%.* All performance figures
assume reinvestment of dividends and exclude the effect of sales charges.
This year's stock market strength has far surpassed even the most bullish
forecasts. Despite continuing Asian financial turmoil and many high profile
earnings warnings, the major stock indices posted double digit gains in the
first quarter of 1998.
The indices' returns do not convey the many cross-currents in the market
this year. As has been true for the last three years, the largest companies
outperformed all others. But not all large companies shone. Many of the 30 Dow
stocks did not match the S&P 500's rise, while numerous small technology
companies staged impressive rallies. Most major market sectors advanced, but
only a minority of stocks kept pace with the S&P 500. By the end of the first
quarter, the market was near an all-time high, but more than 75% of individual
companies were trading below their all-time highs in share price. Volatility was
substantial.
Technology has been one of the best performing market sectors in 1998.
Despite profit warnings from many hardware companies and chip makers, software
company reports have been generally upbeat. The retail sector also outperformed.
The cost of goods is declining for retail companies, while the purchasing power
of U.S. consumers remains strong. This Fund's presence in these sectors in 1998
contributed to our performance. The worst performing sector has been energy,
which portfolio management underweighted.
These diverse sector results portray the complexity of the current market
environment. While major economic factors like low interest rates and low
inflation clearly favor further stock price gains, the earnings outlook for
individual companies is more ambiguous. Even as earnings growth rates
deteriorate for many companies, market valuations are approaching unprecedented
territory.
OUTLOOK
The ongoing Asian crisis should keep U.S. inflation in check by slowing
overall growth and directly deflating the prices of many commodities. The U.S.
trade deficit in goods and services is widening as exports weaken relative to
imports. Trade should shave as much as a full percentage point from the U.S.
growth rate. Apart from trade, the U.S. economy appears buoyant. The
unemployment rate remains below 5%, consumer confidence is firm and home sales
are strong.
The excellent inflation outlook, combined with domestic strength, should
continue to support stock prices. Our optimism on the overall market is
augmented by our expectation that significant value can be added through astute
stock selection.
The earnings outlook is the area of greatest concern. We take some comfort
in buying stocks company by company, where it is much more possible to project
future earnings with confidence. Intense fundamental research should continue to
enable us to uncover opportunity and avoid disappointments.
We expect the market to trend higher, in a very volatile manner. At current
and potentially high valuation levels, risk is considerable. We continue to
control risk in the portfolio through diversification, and through our
fundamentally based investment discipline.
*The Russell 2000 Growth Index is an unmanaged, commonly used measure of total
return performance for small-cap companies with above-average growth
orientation. The S&P 500 Index is an unmanaged, commonly used measure of broad
stock market performance. Neither index is available for direct investment.
18
<PAGE>
Phoenix Equity Opportunities Fund
- --------------------------------------------------------------------------------
[TABULAR REPRESENTATION OF LINE CHART]
Equity Opportunities Russell 2000
Fund--Class A Growth Index*
-------------------- -------------
4/30/88 9525 10000
4/30/89 11472 11289
4/30/90 12284 11362
4/30/91 13778 12816
4/30/92 15196 14535
4/30/93 17704 15393
4/30/94 18587 17630
4/30/95 20291 19169
4/30/96 26958 26713
4/30/97 23671 23095
4/30/98 $34242 $33188
Average Annual Total Returns for the Periods Ending 4/30/98
<TABLE>
<CAPTION>
From Inception
7/19/94 to
1 Year 5 Years 10 Years 4/30/98
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Class A with 4.75% sales charge 37.86% 13.00% 13.10% --
---------------------------------------------------------------------------------------------
Class A at net asset value 44.66% 14.10% 13.66% --
---------------------------------------------------------------------------------------------
Class B with CDSC 39.58% -- -- 16.39%
---------------------------------------------------------------------------------------------
Class B at net asset value 43.58% -- -- 16.67%
---------------------------------------------------------------------------------------------
Russell 2000 Growth Index* 43.70% 16.61% 12.75% 15.61%
---------------------------------------------------------------------------------------------
</TABLE>
This chart assumes an initial gross investment of $10,000 made on 4/30/88 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.
19
<PAGE>
Phoenix Equity Opportunities Fund
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
COMMON STOCKS--95.1%
AUTO PARTS & EQUIPMENT--2.9%
Dana Corp........................ 95,000 $ 5,616,875
---------------
BANKS (MONEY CENTER)--1.7%
BankAmerica Corp................. 40,000 3,400,000
---------------
BEVERAGES (NON-ALCOHOLIC)--2.4%
PepsiCo, Inc..................... 120,000 4,762,500
---------------
BROADCASTING (TELEVISION, RADIO & CABLE)--2.9%
Chancellor Media Corp. (b)....... 120,000 5,692,500
---------------
BUILDING MATERIALS--2.4%
Masco Corp....................... 82,000 4,756,000
---------------
CHEMICALS--2.5%
Monsanto Co...................... 92,000 4,864,500
---------------
COMMUNICATIONS EQUIPMENT--3.3%
Lucent Technologies, Inc......... 84,000 6,394,500
---------------
COMPUTERS (HARDWARE)--2.3%
Dell Computer Corp. (b).......... 55,000 4,441,250
---------------
COMPUTERS (NETWORKING)--2.0%
Cisco Systems, Inc. (b).......... 55,000 4,028,750
---------------
COMPUTERS (PERIPHERALS)--2.1%
EMC Corp. (b).................... 88,000 4,059,000
---------------
COMPUTERS (SOFTWARE & SERVICES)--3.9%
Computer Horizons Corp. (b)...... 60,000 2,276,250
Microsoft Corp. (b).............. 60,000 5,407,500
---------------
7,683,750
---------------
DISTRIBUTORS (FOOD & HEALTH)--1.7%
Cardinal Health, Inc............. 35,000 3,368,750
---------------
ELECTRICAL EQUIPMENT--3.0%
General Electric Co.............. 70,000 5,958,750
---------------
ELECTRONICS (SEMICONDUCTORS)--3.6%
Intel Corp....................... 38,000 3,070,875
Texas Instruments, Inc........... 62,500 4,003,906
---------------
7,074,781
---------------
ENTERTAINMENT--2.4%
Premier Parks, Inc. (b).......... 85,000 4,728,125
---------------
FINANCIAL (DIVERSIFIED)--3.4%
American Express Co.............. 65,000 6,630,000
---------------
SHARES VALUE
--------------- ---------------
FOODS--3.0%
Hershey Foods Corp............... 80,000 $ 5,860,000
---------------
HEALTH CARE (DIVERSIFIED)--6.6%
Bristol-Myers Squibb Co.......... 55,000 5,823,125
McKesson Corp.................... 100,000 7,068,750
---------------
12,891,875
---------------
HEALTH CARE (SPECIALIZED SERVICES)--2.7%
Alza Corp. (b)................... 110,000 5,273,125
---------------
HOUSEHOLD FURNISHINGS & APPLIANCES--3.0%
Maytag Corp...................... 115,000 5,922,500
---------------
HOUSEHOLD PRODUCTS (NON-DURABLES)--4.4%
Colgate Palmolive Co............. 63,000 5,650,312
Procter & Gamble Co.............. 35,500 2,917,656
---------------
8,567,968
---------------
INSURANCE (MULTI-LINE)--5.1%
SunAmerica, Inc.................. 98,900 4,938,819
Travelers Group, Inc............. 83,000 5,078,563
---------------
10,017,382
---------------
INSURANCE (PROPERTY-CASUALTY)--3.4%
Allstate Corp.................... 30,000 2,887,500
St. Paul Cos., Inc. (The)........ 45,000 3,813,750
---------------
6,701,250
---------------
MANUFACTURING (DIVERSIFIED)--2.5%
Tyco International Ltd........... 90,000 4,905,000
---------------
NATURAL GAS--2.4%
Williams Cos., Inc. (The)........ 150,000 4,743,750
---------------
OIL & GAS (DRILLING & EQUIPMENT)--1.9%
Schlumberger Ltd................. 45,000 3,729,375
---------------
PERSONAL CARE--2.2%
Gillette Co...................... 37,500 4,328,906
---------------
RESTAURANTS--1.6%
McDonalds Corp................... 50,000 3,093,750
---------------
RETAIL (GENERAL MERCHANDISE)--3.2%
Dayton Hudson Corp............... 71,000 6,199,188
---------------
RETAIL (SPECIALTY-APPAREL)--2.9%
TJX Companies, Inc. (The)........ 130,000 5,752,500
---------------
SERVICES (DATA PROCESSING)--2.4%
Automatic Data Processing,
Inc............................ 72,000 4,819,500
---------------
20 See Notes to Financial Statements.
<PAGE>
PHOENIX EQUITY OPPORTUNITIES FUND
- ------------------------------------------------------
SHARES VALUE
--------------- ---------------
TELECOMMUNICATIONS (LONG DISTANCE)--5.3%
AT&T Corp........................ 56,500 $ 3,393,531
WorldCom, Inc. (b)............... 165,000 7,058,906
---------------
10,452,437
---------------
TOTAL COMMON STOCKS
(Identified cost $165,104,153)............................... 186,718,537
---------------
FOREIGN COMMON STOCKS--2.4%
OIL (INTERNATIONAL INTEGRATED)--2.4%
Royal Dutch Petroleum Co. ADR NY
Registered Shares
(Netherlands).................. 85,000 4,807,813
---------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $4,361,908)................................. 4,807,813
---------------
TOTAL LONG-TERM INVESTMENTS--97.5%
(Identified cost $169,466,061)............................... 191,526,350
---------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
--------------- -------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--5.2%
COMMERCIAL PAPER--5.2%
Marsh & McLennan Cos., Inc.
5.52%, 5/1/98.................. A-1+ $ 7,270 7,270,000
Preferred Receivables Funding
Corp. 5.57%, 5/5/98............ A-1 2,885 2,883,216
---------------
10,153,216
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $10,153,216)...................................... 10,153,216
---------------
TOTAL INVESTMENTS--102.7%
(Identified cost $179,619,277)..................................... 201,679,566(a)
Cash and receivables, less liabilities--(2.7%)..................... (5,332,787)
---------------
NET ASSETS--100.0%................................................... $196,346,779
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $23,210,031 and gross
depreciation of $1,149,742 for federal income tax purposes. At April 30,
1998, the aggregate cost of securities for federal income tax purposes was
$179,619,277.
(b) Non-income producing.
See Notes to Financial Statements. 21
<PAGE>
Phoenix Equity Opportunities Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $179,619,277) $ 201,679,566
Cash 2,269
Receivables
Investment securities sold 2,693,660
Dividends and interest 124,916
Fund shares sold 21,505
-------------
Total Assets 204,521,916
-------------
Liabilities
Payables
Investment securities purchased 7,812,779
Fund shares repurchased 98,908
Investment advisory fee 114,454
Distribution fee 42,161
Transfer agent fee 37,303
Trustees' fee 9,128
Financial agent fee 8,349
Accrued expenses 52,055
-------------
Total Liabilities 8,175,137
-------------
Net Assets $ 196,346,779
=============
Net Assets Consist of:
Capital paid in on shares of beneficial interest $ 160,100,154
Accumulated net realized gain 14,186,336
Net unrealized appreciation 22,060,289
-------------
Net Assets $ 196,346,779
=============
Class A
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $194,295,709) 24,171,298
Net asset value per share $8.04
Offering price per share
$ 8.04/(1-4.75%) $8.44
Class B
Shares of beneficial interest outstanding, $0.0001
par value, unlimited authorization
(Net Assets $2,051,070) 263,024
Net asset value and offering price per share $7.80
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1998
<TABLE>
<S> <C>
Investment Income
Dividends $ 790,402
Interest 411,390
-----------
Total investment income 1,201,792
-----------
Expenses
Investment advisory fee 1,326,599
Distribution fee--Class A 468,990
Distribution fee--Class B 19,186
Financial agent fee 97,806
Transfer agent 236,116
Registration 25,186
Custodian 21,706
Trustees 19,732
Professional 19,564
Printing 13,262
Miscellaneous 11,781
-----------
Total expenses 2,259,928
-----------
Net investment loss (1,058,136)
-----------
Net Realized and Unrealized Gain on Investments
Net realized gain on securities 52,694,656
Net change in unrealized appreciation on investments 16,227,091
-----------
Net gain on investments 68,921,747
-----------
Net increase in net assets resulting from
operations $67,863,611
===========
</TABLE>
22 See Notes to Financial Statements
<PAGE>
Phoenix Equity Opportunities Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
April 30, 1998 April 30, 1997
---------------- ---------------
<S> <C> <C>
From Operations
Net investment income (loss) $ (1,058,136) $ (795,274)
Net realized gain 52,694,656 10,737,465
Net change in unrealized appreciation (depreciation) 16,227,091 (33,047,467)
------------- -------------
Net increase (decrease) in net assets resulting from operations 67,863,611 (23,105,276)
------------- -------------
From Distributions to Shareholders
Net realized gains--Class A (35,351,518) (21,357,244)
Net realized gains--Class B (371,756) (197,785)
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 (35,723,274) (22,741,370)
------------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (580,916 and 1,544,352 shares, respectively) 4,485,413 13,235,186
Net asset value of shares issued from reinvestment of distributions
(3,754,855 and 2,020,340 shares, respectively) 25,457,918 16,243,531
Cost of shares repurchased (3,877,643 and 4,096,555 shares, respectively) (30,879,705) (34,291,172)
------------- -------------
Total (936,374) (4,812,455)
------------- -------------
Class B
Proceeds from sales of shares (46,609 and 115,267 shares, respectively) 361,942 965,240
Net asset value of shares issued from reinvestment of distributions
(54,117 and 24,702 shares, respectively) 357,170 195,636
Cost of shares repurchased (83,812 and 48,133 shares, respectively) (638,121) (387,617)
------------- -------------
Total 80,991 773,259
------------- -------------
Decrease in net assets from share transactions (855,383) (4,039,196)
------------- -------------
Net increase (decrease) in net assets 31,284,954 (49,885,842)
Net Assets
Beginning of period 165,061,825 214,947,667
------------- -------------
End of period (including undistributed net investment income of $0 and $0, respectively) $ 196,346,779 $ 165,061,825
============= =============
</TABLE>
See Notes to Financial Statements 23
<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,
1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.89 $8.81 $7.40 $7.31 $9.64
Income from investment operations
Net investment income (loss) (0.04)(4) (0.03)(4) (0.04)(4) 0.04 0.05
Net realized and unrealized gain (loss) 2.82 (0.90) 2.34 0.58 0.57
-------- ------- -------- -------- --------
Total from investment operations 2.78 (0.93) 2.30 0.62 0.62
-------- ------- -------- -------- --------
Less distributions
Dividends from net investment income -- -- -- (0.05) (0.05)
Dividends from net realized gains (1.63) (0.94) (0.89) (0.48) (2.90)
In excess of accumulated net realized gains -- (0.05) -- -- --
-------- ------- -------- -------- --------
Total distributions (1.63) (0.99) (0.89) (0.53) (2.95)
-------- ------- -------- -------- --------
Change in net asset value 1.15 (1.92) 1.41 0.09 (2.33)
-------- ------- -------- -------- --------
Net asset value, end of period $8.04 $6.89 $8.81 $7.40 $7.31
======== ======= ======== ======== ========
Total return(1) 44.66% (12.19)% 32.86% 9.16% 4.99%
Ratios/supplemental data:
Net assets, end of period (thousands) $194,296 $63,396 $213,600 $179,666 $186,037
Ratio to average net assets of:
Expenses 1.18% 1.23% 1.25% 1.32% 1.26%
Net investment income (loss) (0.55)% (0.39)% (0.53)% 0.60% 0.57%
Portfolio turnover 371% 412% 302% 358% 167%
Average commission rate paid(5) $0.0632 $0.0543 $0.0600 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class B
--------------------------------------------------------------------------
From
Year Ended April 30, Inception
7/19/94 to
1998 1997 1996 4/30/95
------- ------- ---- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.77 $8.73 $7.39 $7.28
Income from investment operations
Net investment income (loss) (0.10)(4) (0.09)(4) (0.10)(4) 0.00
Net realized and unrealized gain (loss) 2.76 (0.88) 2.33 0.59
------- ------- ------- -----
Total from investment operations 2.66 (0.97) 2.23 0.59
------- ------- ------- -----
Less distributions
Dividends from net investment income -- -- -- --
Dividends from net realized gains (1.63) (0.94) (0.89) (0.48)
In excess of accumulated net realized gains -- (0.05) -- --
------- ------- ------- -----
Total distributions (1.63) (0.99) (0.89) (0.48)
------- ------- ------- -----
Change in net asset value 1.03 (1.96) 1.34 0.11
------- ------- ------- -----
Net asset value, end of period $7.80 $ 6.77 $8.73 $7.39
======= ======= ======= =====
Total return(1) 43.58% (12.79)% 31.92% 8.69%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $2,051 $1,666 $1,348 $525
Ratio to average net assets of:
Expenses 1.93% 1.98% 2.06% 2.15%(2)
Net investment income (loss) (1.30)% (1.15)% (1.18)% (0.06)%(2)
Portfolio turnover 371% 412% 302 % 358%
Average commission rate paid(5) $0.0632 $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.
24 See Notes to Financial Statements
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
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. The Strategic Theme
Series also offers Class C shares and Class M shares. Class M shares have been
closed to new investors. 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. Class C shares are sold with a 1% contingent deferred sales charge if
redeemed within one year of purchase. All 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 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.
25
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (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:
The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked-to-market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Fund may purchase options which are included in the Fund's Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for their 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:
<TABLE>
<CAPTION>
1st $1-2 $2+
Series Adviser $1 Billion Billion Billion
- ------ ------- ---------- ------- -------
<S> <C> <C> <C> <C>
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%
</TABLE>
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 $118,943 for Class A shares and $0
for Class M shares and deferred sales charges of $940,009 for Class B shares and
$0 for Class C shares, for the year ended April 30, 1998. In addition, each
Series pays PEPCO a distribution fee at an annual rate of 0.25% for Class A
shares, 1.00% for Class B shares, 1.00% for Class C shares and 0.50% for Class M
shares applied to 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, 1998, $1,999,009 was earned by the Distributor,
$1,041,727 was earned by unaffiliated participants and $122,695 was paid to W.S.
Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services 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, 1998, transfer agent fees were $1,182,782 of which PEPCO retained $483,658
which is net of the fees paid to State Street.
At April 30, 1998, PHL and its affiliates held shares of the Fund as
follows:
<TABLE>
<CAPTION>
Aggregate
Shares Net Asset Value
--------- ----------------
<S> <C> <C>
Strategic Theme Series--Class A 539,910 $7,396,767
--Class B 11,984 161,305
--Class C 8,012 107,922
--Class M 8,011 108,149
Equity Opportunities Series--Class A 154 1,238
--Class B 23,469 183,058
</TABLE>
26
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (Continued)
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities (excluding short-term secu-rities,
options, futures, and forward currency contracts) for the year ended April 30,
1998, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
----------------- -----------------
<S> <C> <C>
Small Cap Series ............. $1,419,510,129 $1,457,552,838
Strategic Theme Series ....... 851,764,090 849,684,078
Equity Opportunities Series .. 680,952,516 716,100,658
</TABLE>
There were no purchases or sales of long-term U.S. Government securities.
Written option activity for the year ended April 30, 1998, aggregated the
following:
<TABLE>
<CAPTION>
Call Options
---------------------------
Number of Amount of
Strategic Theme Series Options Premiums
- --------------------------------- ----------- -------------
<S> <C> <C>
Options outstanding at
April 30, 1997 ............... -- --
Options written ................. 150 $ 127,046
Options canceled in closing
purchase transactions ........ (150) (127,046)
Options expired ................. -- --
Options exercised ............... -- --
---- ----------
Options outstanding at
April 30, 1998 ............... -- $ --
==== ==========
</TABLE>
4. CAPITAL LOSS CARRYOVERS
For the year ended April 30, 1998, Small Cap Series was able to utilize
losses deferred in the prior year against current year capital gains in the
amount of $20,746,935.
Under current tax law, capital losses realized after October 31, 1997 may
be deferred and treated as occurring on the first day of the following fiscal
year. For the year ended April 30, 1998, prior year losses deferred were
utilized as follows: Small Cap Series $377,891 and Equity Opportunities Series
$861,291.
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, 1998, the Series recorded the following reclassifications to increase
(decrease) the accounts listed below:
<TABLE>
<CAPTION>
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gain (loss) interest
---------------- ---------------- --------------
<S> <C> <C> <C>
Small Cap Series ............... $2,593,774 $ (2,593,774) --
Strategic Theme Series ......... 762,834 (762,834) --
Equity Opportunities
Series ...................... 1,058,136 (1,041,903) $ (16,233)
</TABLE>
TAX INFORMATION NOTICE (Unaudited)
For the fiscal year ended April 30, 1998, the Series distributed long-term
capital gain dividends as follows:
<TABLE>
<CAPTION>
28% rate gain 20% rate gain
Portfolio distributions distributions
- --------------------------------- --------------- --------------
<S> <C> <C>
Small Cap Series ................ $4,150,995 $587,729
Strategic Theme Series .......... 13,428 --
Equity Opportunities Series ..... 8,557,937 283,820
</TABLE>
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.
27
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
[PRICE WATERHOUSE 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
the 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, 1998,
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, 1998 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 18, 1998
28
<PAGE>
PHOENIX STRATEGIC EQUITY SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
Ron K. Jacks, Senior Vice President
Richard D. Little, Senior Vice President
William J. Newman, Senior Vice President
Gail P. Seneca, Senior 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
How to Contact Us
<TABLE>
<S> <C>
Customer Service 1-800-243-1574 (option 0)
Automated Voice Response Unit 1-800-243-1574 (option 1)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
</TABLE>
<PAGE>
------------------
Phoenix Funds BULK RATE MAIL
PO Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
------------------
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 744 (6/98)
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