AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER __, 1999
REGISTRATION NOS. 33-19423
811-5436
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 26 [X]
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 28
(CHECK APPROPRIATE BOX OR BOXES)
--------------------
PHOENIX MULTI-PORTFOLIO FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
--------------------
101 MUNSON STREET, GREENFIELD, MASSACHUSETTS 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O PHOENIX EQUITY PLANNING SHAREHOLDER SERVICES
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
--------------------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT
AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
--------------------
It is proposed that this filing will become effective (check
appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(i)
[ ] on pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
================================================================================
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
Cross Reference Sheet Pursuant to Rule 495(a)
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
- ----------------------------- ------------------
<S> <C> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies, Investment Risk and Return Summary; Investment
and Related Risks........................................ Strategies; Risks Related to Investment Strategies
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things to Know When Selling Shares; Account
Policies; Investor Services; Tax Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
</TABLE>
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ----------------------------- -------------------------------------------
<S> <C>
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund................................... Management of the Trust
14. Control Persons and Principal Holders of Securities...... Management of the Trust
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
</TABLE>
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER THE
APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Phoenix-Aberdeen International Fund
Investment Risk and Return Summary............... 1
Fund Expenses.................................... 4
Investment Strategies............................ 5
Risks Related to Investment Strategies........... 6
Management of the Fund........................... 9
Phoenix-Duff & Phelps Real Estate Securities Fund
Investment Risk and Return Summary............... 12
Fund Expenses.................................... 15
Investment Strategies............................ 16
Risks Related to Investment Strategies........... 18
Management of the Fund........................... 20
Phoenix-Goodwin Emerging Markets Bond Fund
Investment Risk and Return Summary............... 22
Fund Expenses.................................... 25
Investment Strategies............................ 26
Risks Related to Investment Strategies........... 28
Management of the Fund........................... 31
Phoenix-Goodwin Tax-Exempt Bond Fund
Investment Risk and Return Summary............... 33
Fund Expenses.................................... 35
Investment Strategies............................ 36
Risks Related to Investment Strategies........... 38
Management of the Fund........................... 39
Phoenix-Seneca After-Tax Growth Fund
Investment Risk and Return Summary............... 41
Fund Expenses.................................... 42
Investment Strategies............................ 43
Risks Related to Investment Strategies........... 44
Additional Investment Techniques................. 46
Management of the Fund........................... 47
Phoenix-Seneca Mid Cap Fund
Investment Risk and Return Summary............... 50
Fund Expenses.................................... 53
Investment Strategies............................ 54
Risks Related to Investment Strategies........... 55
Management of the Fund........................... 56
Pricing of Fund Shares.............................. 59
Sales Charges....................................... 60
Your Account........................................ 62
How to Buy Shares................................... 63
How to Sell Shares.................................. 64
Things You Should Know When Selling Shares.......... 64
[arrow] Phoenix Account Policies.................................... 66
Multi- Investor Services................................... 67
Portfolio Tax Status of Distributions......................... 68
Fund Financial Highlights................................ 69
Additional Information.............................. 76
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Aberdeen International Fund has an investment objective of high total
return consistent with reasonable risk. There is no guarantee that the fund will
achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund's focus is high total return. The fund seeks to increase the
value of your shares by investing in equity or debt securities the
subadviser believes offer the potential for growth, income or both.
[arrow] The fund invests primarily in common stocks of established foreign
(non-U.S.) companies. However, if the subadviser believes other types
of securities offer the potential for high returns, the fund may invest
in such securities, including convertible securities, preferred stocks,
bonds, notes and other debt obligations, foreign and U.S.
Government securities, and securities in emerging markets.
[arrow] The fund is managed by an adviser and subadviser. The subadviser uses
an asset allocation approach to select countries and regions for fund
investment. Countries and regions that exhibit favorable prospects for
economic growth, governmental policies, expected levels of inflation,
currency valuation and capital market price levels are given greater
allocations. Companies within selected countries and regions that the
subadviser believes show solid growth prospects with attractive
valuations are selected for fund investment.
[arrow] Debt obligations selected for investment may be of any credit quality
or maturity.
[arrow] The fund's ability to invest in growth as well as income producing
securities and its emphasis on investments in established countries
help the fund to maintain an acceptable level of investment risk.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
Conditions affecting the overall economy, specific industries or companies in
which the fund invests can be worse than expected. As a result, the value of
your shares may decrease.
Unlike many other mutual funds, this fund will make significant investments in
foreign securities. Political and economic uncertainty, as well as relatively
less public information about investments, may negatively impact the fund's
portfolio. Some investments may be made in currencies other than U.S. dollars
that will fluctuate in value as a result of changes in the
Phoenix-Aberdeen International Fund 1
<PAGE>
currency exchange rate. Foreign markets and currencies may not perform as well
as U.S. markets. Emerging market countries and companies doing business in
emerging markets may not have the same range of opportunities as countries and
their companies in developed nations. They may also have more obstacles to
financial success.
The fund may be subject to greater risks than a fund that does not invest in
securities with growth characteristics.
To the extent the fund invests in debt securities, it will be subject to
interest rate and credit risk. Typically, debt obligations will increase in
value when interest rates decline and decrease in value when interest rates
rise. If interest rates do not move in the direction that the adviser expects,
then the value of your shares may decrease. Additionally, securities with lower
credit ratings have a greater chance of principal and interest payment default.
Debt obligations with longer maturities may be subject to greater price
fluctuation.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Aberdeen International Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over the life of the
fund.(1) The table below shows how the fund's average annual returns compare to
those of a broad-based securities market index. The fund's past performance is
not necessarily an indication of how the fund will perform in the future.
INTERNATIONAL FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN (%)
------------- -----------------
1990 -4.94
1991 10.76
1992 -12.41
1993 37.61
1994 -0.08
1995 9.68
1996 17.39
1997 10.94
1998 25.90
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 22.34% (quarter ending March
31, 1998) and the lowest return for a quarter was (19.55)% (quarter ending
September 30, 1990). Year-to-date performance (through September 30, 1999) was
__%.
2 Phoenix-Aberdeen International Fund
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Life of the Fund(2)
------------------------------------------
Average Annual Total Return
(for the periods ending 12/31/98)(1) One Year Five Years Class A Class B Class C
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 19.89% 11.35% 9.93% -- --
- ----------------------------------------------------------------------------------------------------------------
Class B Shares 21.07% N/A -- 11.93% --
- ----------------------------------------------------------------------------------------------------------------
Class C Shares(3) N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
The Morgan Stanley Capital
International EAFE Index(4) 20.33% 9.50% 6.20% 8.52% N/A
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since November 1, 1989 and Class B Shares since July 15,
1994.
(3) Class C Shares have been offered since March 30, 1999. Performance
information is not included here because Class C Shares have not had annual
returns for at least one calendar year.
(4) The Morgan Stanley Capital International EAFE Index is an unmanaged,
commonly used measure of foreign stock fund performance which includes net
dividends reinvested. The EAFE Index is an aggregate of 19 individual country
indexes in Europe, Australia, New Zealand and the Far East. The Index's
performance does not reflect sales charges.
Phoenix-Aberdeen International Fund 3
<PAGE>
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
<S> <C> <C> <C>
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees (c) 0.25% 1.00% 1.00%
Other Expenses 0.37% 0.37% 0.37%
----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.37% 2.12% 2.12%
===== ===== =====
</TABLE>
____________________
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The maximum deferred sales charge is imposed on Class C Shares redeemed
during the first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
4 Phoenix-Aberdeen International Fund
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------------------
Class A $608 $888 $1,189 $2,043
- -----------------------------------------------------------------------------------------------------------------
Class B $615 $864 $1,139 $2,261
- -----------------------------------------------------------------------------------------------------------------
Class C $315 $664 $1,139 $2,452
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------------------
Class B $215 $664 $1,139 $2,261
- -----------------------------------------------------------------------------------------------------------------
Class C $215 $664 $1,139 $2,452
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of high total return consistent with
reasonable risk. There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund will invest primarily in common stocks of established foreign
(non-U.S.) companies believed by the subadviser to have the potential for
capital growth, income or both. Under normal circumstances at least 80% of the
fund's total assets will be invested in foreign issuers located in three or more
foreign countries. The fund may invest in any region of the world, including
emerging market countries.
In addition to common stocks, the fund may invest in any other type of security,
including convertible securities, preferred stocks, bonds, notes and other debt
obligations and foreign and U.S. Government obligations that the adviser
believes offers growth and/or income potential.
The fund employs an adviser, Phoenix Investment Counsel, Inc., and a subadviser,
Aberdeen Fund Managers, Inc., to select investments for the fund. Each month,
the subadviser's investment strategy committee determines how much (what
percentage) of the fund's assets will be invested in each region of the world
(e.g., continental Europe, United Kingdom, Asia, etc.). In making its
determination, the committee will generally select regions that exhibit
favorable:
[bullet] prospects for relative economic growth among foreign countries;
Phoenix-Aberdeen International Fund 5
<PAGE>
[bullet] expected levels of inflation;
[bullet] capital market price levels;
[bullet] government policies influencing business conditions;
[bullet] currency valuations; and
[bullet] range of individual investment opportunities available to the
international investor.
The fund may, from time to time, have more than 25% of its assets invested in
any major industrial or developed country that the subadviser believes poses no
unique investment risk.
There is no limitation on the amount or percentage of fund assets that may be
invested in growth or income securities. At any time, the fund may focus
investments solely or primarily in securities that offer growth of capital or on
income-producing securities. In determining whether the fund will be invested
for capital growth or income, the subadviser will analyze the international
equity and fixed income markets and assess the degree of risk and level of
return expected from each.
Temporary Defensive Strategy: Under abnormal market or economic conditions, the
fund may invest all of its assets in domestic and foreign short-term money
market instruments, including government obligations, certificates of deposit,
bankers' acceptances, time deposits, commercial paper, short-term corporate debt
securities and repurchase agreements. When this happens, the fund may not
achieve its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques.
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in the value of many
or even most investments. Particular industries can face poor markets for their
products or services so that companies engaged in those businesses do not do as
well as companies in other industries. To the extent that the fund's investments
are affected by general economic declines and declines in industries that
negatively affect the companies in which the fund invests, fund share values may
decline. Share values can also decline if the specific companies selected for
fund investment fail to perform as the subadviser expects, regardless of general
economic trends, industry trends, and other economic factors.
6 Phoenix-Aberdeen International Fund
<PAGE>
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
FOREIGN INVESTING
The fund will invest in non-U.S. companies. Investing in the securities of
non-U.S. companies involves special risks and considerations not typically
associated with investing in U.S. companies. These include:
[bullet] differences in accounting, auditing and financial reporting
standards;
[bullet] generally higher commission rates on foreign portfolio transactions;
[bullet] differences and inefficiencies in transaction settlement systems;
[bullet] the possibility of expropriation or confiscatory taxation;
[bullet] adverse changes in investment or exchange control regulations;
[bullet] political instability; and
[bullet] potential restrictions on the flow of international capital.
Political and economic uncertainty, as well as less public information about
investments, may negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume than domestic
securities and, therefore, may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the fund.
Many of the foreign securities held by the fund will not be registered with, nor
will the issuers of those securities be subject to the reporting requirements
of, the U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.
FOREIGN CURRENCY
Significant portions of the fund's assets may be invested in securities
denominated in foreign currencies. Changes in foreign exchange rates will affect
the value of those securities denominated or quoted in currencies other than the
U.S. dollar. The forces of supply and demand in the foreign exchange markets
determine exchange rates and these forces are in turn affected by a range of
economic, political, financial, governmental and other factors. Exchange rate
fluctuations can affect the fund's net asset value (share price) and dividends
either positively or negatively depending upon whether foreign currencies are
appreciating or
Phoenix-Aberdeen International Fund 7
<PAGE>
depreciating in value relative to the U.S. dollar. Exchange rates fluctuate over
both the long and short terms.
On January 1, 1999, eleven European countries began converting from their
sovereign currency to the European Union common currency called the "Euro." This
conversion may expose the fund to certain risks, including the reliability and
timely reporting of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect specific securities
in the fund's portfolio:
[bullet] known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;
[bullet] competitive implications of increased price transparency of European
Union markets (including labor markets) resulting from adoption of a
common currency and issuers' plans for pricing their own products
and services in the Euro;
[bullet] issuers' ability to make required information technology updates on
a timely basis, and costs associated with the conversion (including
costs of dual currency operations through January 1, 2002);
[bullet] currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and
[bullet] potential tax consequences.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval of foreign investments
may be required under certain circumstances in some developing countries, and
the extent of foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of individual companies
in developing countries may impose limitations on foreign ownership to prevent,
among other concerns, violation of foreign investment limitations.
The economies of developing countries generally are heavily dependent upon
international trade, and, accordingly, have been, and may continue to be,
adversely affected by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.
8 Phoenix-Aberdeen International Fund
<PAGE>
GROWTH STOCKS
Typically, growth stocks make little or no dividend payments to shareholders.
Investment return is based upon the stocks' capital appreciation, making return
more dependent on market increases and decreases as compared to stocks that
provide dividend payments. Growth stocks also tend to rise faster when markets
advance, and drop more sharply when markets fall. Should a market decline occur,
the fund's price may fall more than that of other funds.
DEBT SECURITIES
Typically, debt obligations will increase in value when interest rates decline
and decrease in value when interest rates rise. If interest rates do not move in
the direction that the adviser expects, then the value of your shares may
decrease. Credit risk for debt obligations typically increases as the rating
declines. Securities with lower credit ratings have a greater chance of
principal and interest payment default. Defaults and missed payments may cause
the value of your shares to decrease and decrease the level of expected income
payments. Longer maturities may be subject to price fluctuations due to interest
rates, tax laws and other general market factors.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Aberdeen Fund Managers, Inc. ("Aberdeen") is the subadviser to the fund and is
located at 1 Financial Plaza, Suite 2210, Fort Lauderdale, FL 33394. Aberdeen is
a wholly-owned subsidiary of Aberdeen Asset Management PLC based in Aberdeen,
Scotland. Together with its subsidiaries, Aberdeen Asset Management PLC provides
investment management services to
Phoenix-Aberdeen International Fund 9
<PAGE>
unit and investment trusts, segregated pension funds and other institutional and
private portfolios, and, through Aberdeen, U.S. mutual funds. Aberdeen has
served as subadviser for the following mutual funds since their inception in
1996: Phoenix-Aberdeen New Asia Fund, Phoenix-Aberdeen Global Small Cap Fund and
the Aberdeen New Asia Series of The Phoenix Edge Series Fund. Aberdeen also has
served as subadviser to Phoenix-Aberdeen Worldwide Opportunities Fund and the
International Series of The Phoenix Edge Series Fund since 1998. As of December
31, 1998, Aberdeen Asset Management PLC had $23.9 billion in assets under
management.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
fund. Aberdeen, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Aberdeen manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1+ billion
$1st billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
- --------------------------------------------------------------------------------
Phoenix pays Aberdeen a subadvisory fee at the following rates:
- --------------------------------------------------------------------------------
$1+ billion
$1st billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Subadvisory Fee 0.375% 0.35% 0.325%
- --------------------------------------------------------------------------------
During the fund's last fiscal year, the fund paid total management fees of
$1,350,786. The ratio of management fees to average net assets for the fiscal
year ended November 30, 1998 was 0.75%. The total advisory fee of 0.75% of the
average net assets of the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is comparable to fees charged by
other mutual funds whose investment objectives are similar to those of the fund.
PORTFOLIO MANAGEMENT
Aberdeen's senior strategy committee determines and monitors the fund's regional
allocations across the globe on a monthly basis. An Aberdeen team of investment
professionals located in offices spread around the world selects securities for
the fund's portfolio.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the fund's operations be
assessed and brought into
10 Phoenix-Aberdeen International Fund
<PAGE>
Year 2000 compliance. Based upon its assessments, Phoenix determined that it
would be required to modify or replace portions of its software so that its
computer systems would properly utilize dates beyond December 31, 1999. Phoenix
management believes that the majority of these systems are already Year 2000
compliant. Phoenix believes that with modifications to existing software and
conversions to new software, the Year 2000 issue will be mitigated.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
Phoenix-Aberdeen International Fund 11
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Duff & Phelps Real Estate Securities Fund has an investment objective of
capital appreciation and income with approximately equal emphasis. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund's focus is capital appreciation and income. The fund seeks to
increase the value of your shares by investing in securities the
adviser believes have the potential for initial appreciation and
continued income growth.
[arrow] The fund intends to invest primarily in publicly traded real estate
investment trusts (REITs), with emphasis on investment in equity REITs,
and companies that are principally engaged in the real estate industry.
[arrow] Equity securities are selected using a two-tiered screening process.
First the adviser screens the universe of eligible securities for
securities it believes have the potential for initial appreciation,
continued dividend growth and that show signs the issuer is an
efficient user of capital. Securities that survive this screening are
further evaluated based on interviews and fundamental research that
focus on the issuer's strength of management and property, financial
and performance reviews.
[arrow] An equity security may be evaluated for sale if its market value
exceeds the adviser's estimated value, its financial performance is
expected to decline or if the adviser believes the security's issuer
fails to adjust its strategy to the real estate market cycle.
[arrow] To achieve its objective, the fund may invest up to 25% of its total
assets in investment grade debt obligations of companies principally
engaged in the real estate industry, mortgage-backed securities or
short-term investments. Debt obligations and mortgage-backed securities
may be of any maturity or duration (the length of a debt security on a
present value basis). Debt securities are selected using a sector
rotation approach. The adviser will seek to adjust the proportion of
assets in categories of debt obligations or "sectors" and the selection
within sectors to obtain higher returns on a relative basis.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
The fund is a non-diversified investment company. It may invest a larger
proportion of its assets in the securities of a smaller number of issuers, and,
as a result, price fluctuations in these securities have a greater impact on the
fund's share price.
12 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
Conditions affecting the overall economy, the real estate industry and specific
companies in which the fund invests can be worse than expected. As a result, the
value of your shares may decrease.
REITs are subject to mortgage prepayment and refinancing risks, changes in the
value of REIT-owned properties, and changing economic conditions, especially
those that impact the real estate industry, including changes in interest rates.
Additionally, REITs depend more on management skills than other types of
securities.
REIT securities may trade less frequently and in lower volume than securities in
other larger companies and they may be subject to abrupt and large price
movements. Additionally, REIT securities may trade at prices less than the value
of the underlying real estate and they are often not diversified. These factors
may decrease the overall marketability of the securities.
Debt issues are subject to credit, interest rate and maturity risks. If the
adviser misjudges the debt security issuer's ability to make principal and
interest payments, income available for distribution may be less than that of
other funds. Typically, debt obligations will increase in value when interest
rates decline and decrease in value when interest rates rise. If interest rates
do not move in the direction that the adviser expects, then the value of your
shares may decrease. Debt obligations with longer maturities may be subject to
greater price fluctuation.
Phoenix-Duff & Phelps Real Estate Securities Fund 13
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Duff & Phelps Real Estate Securities Fund. The bar chart shows
changes in the fund's Class A Shares performance from year to year over the life
of the fund.(1) The table below shows how the fund's average annual returns
compare to those of a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.
REAL ESTATE SECURITIES FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN (%)
------------- -----------------
1996 32.77
1997 21.83
1998 -20.11
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 17.60% (quarter ending December 31,
1996) and the lowest return for a quarter was (12.15)% (quarter ending September
30, 1998). Year-to-date performance (through September 30,1999) was __%.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/98)(1) One Year Life of the Fund(2)
- --------------------------------------------------------------------------------
Class A Shares (23.89)% 10.14%
- --------------------------------------------------------------------------------
Class B Shares (23.61)% 10.35%
- --------------------------------------------------------------------------------
NAREIT Index (3) (17.50)% 12.36%
- --------------------------------------------------------------------------------
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A and B Shares since March 1, 1995.
(3) The National Association of Real Estate Investment Trusts (NAREIT) Equity
Total Return Index is a commonly used, unmanaged indicator of REIT performance.
The Index does not reflect sales charges.
14 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (b)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75%
Distribution and Service (12b-1) Fees (c) 0.25% 1.00%
Other Expenses 0.52% 0.52%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES (a) 1.52% 2.27%
===== =====
- --------------------
</TABLE>
(a) The fund's investment adviser has agreed to reimburse through December 31,
1999 the Phoenix-Duff & Phelps Real Estate Securities Fund's expenses, other
than Management Fees and Distribution and Service Fees, to the extent that such
expenses exceed 0.30% for each Class of Shares. Actual Total Annual Fund
Operating Expenses after expense reimbursement are 1.30% for Class A Shares and
2.05% for Class B Shares.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Duff & Phelps Real Estate Securities Fund 15
<PAGE>
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $622 $932 $1,265 $2,201
- --------------------------------------------------------------------------------
Class B $630 $909 $1,215 $2,417
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $230 $709 $1,215 $2,417
- --------------------------------------------------------------------------------
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of capital appreciation and income with
approximately equal emphasis. There is no guarantee that the fund will achieve
its objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund's focus is capital appreciation and income. The fund seeks to increase
the value of your shares by investing in securities the adviser believes have
the potential for initial appreciation and continued income growth.
Under normal circumstances, the fund intends to invest at least 75% of its
assets in marketable securities of publicly-traded real estate investment trusts
(REITs) and companies that are principally engaged in the real estate industry.
A company is considered "principally engaged" in the real estate industry if at
least 50% of the company's gross revenues or net profits come from the
ownership, development, construction, financing, management or sale of
commercial, industrial or residential real estate. The fund does not invest
directly in real estate.
The fund will primarily focus its investments in equity REITs. Generally, REITs
are publicly-traded companies that invest primarily in income-producing real
estate or real estate-related loans or interests. Equity REITs own real estate
directly. Mortgage REITs invest the majority of their assets in real estate
mortgages and earn income from the collection of interest payments. Hybrid REITs
combine the characteristics of both equity and mortgage REITs.
16 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
Equity securities are selected using a two-tiered screening process. First the
adviser screens the universe of eligible securities for securities it believes
have:
[bullet] the potential for initial appreciation based on comparing the price
of a security to its projected funds from operations growth rate;
[bullet] the potential for continued dividend growth based on historical
patterns of dividend growth; and
[bullet] signs the issuer is an efficient user of capital based on cost of
capital and return on investment comparisons.
Equity securities that survive this screening are further evaluated based on
interviews and fundamental research that focuses on the issuer's strength of
management and property, financial and performance reviews.
Portfolio holdings are continually compared to those in their peer group and
reevaluated for potential sale. A security that:
[bullet] exceeds the adviser's estimated value;
[bullet] the adviser expects to decline in financial performance; or
[bullet] the adviser believes has an issuer that fails to adjust its strategy
to the real estate market cycle
may be evaluated for sale.
The fund may invest up to 25% of its total assets in marketable debt obligations
of companies principally engaged in the real estate industry, mortgage-backed
securities, such as pass-through certificates, real estate mortgage investment
conduits (REMICS), and collateralized mortgage obligations (CMOs), or short-term
investments. These investments will have credit ratings within the four highest
rating categories, and, may be of any maturity or duration.
Debt obligations are selected using a sector rotation approach. The adviser will
seek to adjust the proportion of assets in the various sectors and the selection
of investments within sectors to obtain higher returns on a relative basis. The
adviser selects sectors based on value as compared to risk. The adviser seeks
investments within sectors that are undervalued based on fundamentals such as
earnings coverage of interest, cash flow and liquidity.
Phoenix-Duff & Phelps Real Estate Securities Fund 17
<PAGE>
Temporary Defensive Strategy: When the adviser believes there are extraordinary
risks associated with investment in real estate market securities, the fund may
invest up to 100% of its assets in short-term investments such as money market
instruments, repurchase agreements, certificates of deposits and bankers'
acceptances. When this happens, the fund may not achieve its investment
objective.
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If, between the time you purchase shares and the time you
sell shares, the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions that affect the real estate industry may
cause a decline in value of many fund investments. The real estate industry
could experience a decrease in sales and sale prices so that companies engaged
in these businesses do not perform as well as expected. To the extent that the
fund's investments are affected by general economic declines and declines in the
real estate industry, that negatively affect the companies in which the fund
invests, fund share values may decline. Share values can also decline if the
specific issuers selected for fund investment fail to perform as the adviser
expects, regardless of general economic trends, industry trends, and other
economic factors.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
NON-DIVERSIFICATION
The fund is a non-diversified investment company. Diversifying a fund's
portfolio can reduce the risks of investing. As a non-diversified investment
company, the fund may be subject to greater risk since it can invest a greater
proportion of its assets in the securities of a small number of issuers. If the
fund takes concentrated positions in a small number of issuers, changes in the
price of those securities may cause the fund's return to fluctuate more than
that of a diversified investment company.
REAL ESTATE-RELATED INVESTMENTS
The fund primarily invests in the real estate industry. The value of investments
in issuers that hold real estate may be affected by changes in the values of
real properties owned by the issuers. Likewise, investments in businesses
related to the real estate industry may also be affected by the value of real
estate generally or in particular geographical areas in which the businesses
operate. A decline in real estate value may have a negative impact on the value
of your shares.
18 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
Interest rates also can be a significant factor for issuers that hold real
estate and those in related businesses. Increases in interest rates can cause or
contribute to declines in real estate prices and can cause "slowdowns" in such
related businesses as real estate sales and constructions.
REIT SECURITIES
REIT securities are subject to mortgage prepayment and refinancing risks that
make it difficult to accurately predict cash flows. Additionally, changes in the
value of REIT-owned properties, economic conditions that impact the real estate
industry and interest rate changes may decrease the value of your shares. REIT
investments also depend more on management skills than other types of
investments.
REIT securities often are not diversified and may only finance a limited number
of projects or properties, which may subject REITs to abrupt and large price
movements. REITs are heavily dependent on cash flow from properties and, at
times, the market price of a REIT's securities may be less than the value of
investments in real estate which may result in a lower price when the fund sells
its shares in the REIT. REITs also may trade less frequently and in lower volume
than securities of other larger companies which may also contribute to REIT
securities losing value.
DEBT SECURITIES
Typically, debt obligations will increase in value when interest rates decline
and decrease in value when interest rates rise. If interest rates do not move in
the direction that the adviser expects, then the value of your shares may
decrease. Credit risk for debt obligations typically increases as the rating
declines. Securities with lower credit ratings have a greater chance of
principal and interest payment default. Defaults and missed payments may cause
the value of your shares to decrease and decrease the level of expected income
payments. Longer maturities may be subject to price fluctuations due to interest
rates, tax laws and other general market factors.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
Phoenix-Duff & Phelps Real Estate Securities Fund 19
<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISER
Duff & Phelps Investment Management Co. ("Duff & Phelps") is the investment
adviser to the fund and is located at 55 East Monroe Street, Suite 3600,
Chicago, Illinois 60603. Duff & Phelps also acts as investment adviser to eight
other mutual funds and as adviser to institutional clients. As of December 31,
1998, Duff & Phelps had approximately $15.2 billion in assets under management
on a discretionary basis.
Subject to the direction of the fund's Board of Trustees, Duff & Phelps is
responsible for managing the fund's investment program and the day-to-day
management of the fund's portfolio. Duff & Phelps manages the fund's assets to
conform with the investment policies as described in this prospectus. The fund
pays Duff & Phelps a monthly investment management fee that is accrued daily
against the value of the fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
- --------------------------------------------------------------------------------
The adviser has voluntarily agreed to assume operating expenses of the fund
(excluding management fees, distribution and service fees, interest, taxes,
brokerage fees, commissions and extraordinary expenses) until December 31, 1999,
to the extent that such expenses exceed 0.30% of the average annual net asset
values of the fund.
During the fund's last fiscal year, the fund paid total management fees of
$398,336. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1998 was 0.75%. The total advisory fee of 0.75% of the
average net assets of the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is comparable to fees charged by
other mutual funds whose investment objectives are similar to those of the fund.
PORTFOLIO MANAGEMENT
Michael Schatt is responsible for managing the assets of the Real Estate
Securities Fund. Mr. Schatt is employed as Managing Director of Phoenix
Investment Partners, Ltd. and is a Senior Vice President of Duff & Phelps, as
well as Vice President, Phoenix Duff & Phelps Institutional Mutual Funds, The
Phoenix Edge Series Fund, Phoenix Multi-Portfolio Fund and Duff & Phelps
Utilities Income Inc. His current responsibilities include serving as Portfolio
Manager of the fund, Real Estate Equity Securities Portfolio of Phoenix Duff &
Phelps Institutional Mutual Funds, the Real Estate Securities Series of the
Phoenix Edge Series Fund, and managing the real estate investment securities of
Duff & Phelps Utilities Income, Inc. Previously, he served as Director of the
Real Estate Advisory Practice for Coopers & Lybrand, LLC and has over 16 years
experience in the real estate industry.
20 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the fund's operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
Phoenix-Duff & Phelps Real Estate Securities Fund 21
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin Emerging Markets Bond Fund has an investment objective of high
current income and a secondary objective of long-term capital appreciation.
There is no guarantee that the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund will invest primarily in U.S. dollar denominated bonds issued
by governments and corporations in emerging market countries. The bonds
will predominantly be below investment grade (so-called "junk bonds")
since generally these bonds have higher income rates and offer greater
capital appreciation potential over time. However, the fund may invest
in securities with any credit rating or unrated securities, securities
issued by entities in developed countries and non-U.S. dollar
denominated securities if the adviser believes the security offers the
potential for high current income and long-term capital appreciation.
[arrow] The adviser selects securities and countries for investment that it
believes have strong fundamentals such as cash flow and economic
stability. Securities may be evaluated for sale if the security
underperforms based on original expectations, or if there are changes
in the original fundamentals.
[arrow] The fund invests in securities of various maturities to maintain a
level of interest rate risk similar to that of the JP Morgan Emerging
Markets Bond Index, its benchmark. The adviser also seeks to control
duration risk (the length of a debt security on a present value basis),
so that the fund may remain duration neutral.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
If the adviser misjudges the ability of debt issuers to make scheduled principal
and interest payments, the fund's income available for distribution may be less
than expected. Neither the fund nor the adviser can assure you that a particular
level of income will consistently be achieved.
The adviser will also attempt to select investments that provide long-term
capital appreciation. If the adviser misjudges the return potential, the fund's
returns may be lower than prevailing returns.
22 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
Debt securities are subject to interest rate risk. Generally, the value of debt
securities is inversely related to changes in interest rates. If interest rates
rise, the value of debt securities will fall. This may cause the value of your
shares to decrease.
Securities with longer maturities may be subject to greater price fluctuations
due to interest rate changes, tax laws and other general market factors.
Fund investments in "emerging market" countries (countries with markets that are
not fully developed) may be subject to political and economic uncertainty, as
well as less public information. This may negatively impact the fund's
portfolio. Some investments may be made in currencies other than U.S. dollars
that will fluctuate in value as a result of changes in the currency exchange
rate. Foreign markets and currencies may not perform as well as U.S. markets.
Emerging market countries and companies doing business in emerging markets may
not have the same range of opportunities as countries and companies in developed
nations. They may also have more obstacles to financial success. In addition, a
negative situation or condition that affects the market in one emerging market
region may have a negative impact on all emerging market regions due to the
so-called "ripple effect."
The fund will invest in below investment grade debt securities (so-called "junk
bonds"). Junk bonds present a greater risk that the issuer will not be able to
make interest or principal payments on time. If interest and principal payments
are not made, the fund would lose income and could expect a decline in the
market value of the securities. In addition, analysis of junk bonds is more
complex than for higher rated securities, making it more difficult for the
adviser to accurately predict return and risk.
The fund may invest in sovereign debt securities issued or guaranteed by
governments and government-related entities. The entities do not guarantee that
the value of fund shares will increase.
Phoenix-Goodwin Emerging Markets Bond Fund 23
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Emerging Markets Bond Fund. The bar chart shows changes
in the fund's Class A Shares performance from year to year over the life of the
fund.(1) The table below shows how the fund's average annual returns compare to
those of a broad-based securities market index. The fund's past performance is
not necessarily an indication of how the fund will perform in the future.
EMERGING MARKETS BOND FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN (%)
------------- -----------------
1996 54.44
1997 13.73
1998 -32.88
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 16.84% (quarter ending December 31,
1998) and the lowest return for a quarter was (35.96)% (quarter ending September
30, 1998). Year-to-date performance (through September 30, 1999) was __%.
- --------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/98)(1) One Year Life of the Fund(2)
- --------------------------------------------------------------------------------
Class A Shares (36.05)% 6.76%
- --------------------------------------------------------------------------------
Class B Shares (35.70)% 7.12%
- --------------------------------------------------------------------------------
JP Morgan Emerging Markets
Bond Index Plus (3) (14.35)% 13.46%
- --------------------------------------------------------------------------------
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A and B Shares since September 5, 1995.
(3) The JP Morgan Emerging Markets Bond Index Plus is an unmanaged, commonly
used measure of emerging-market debt total return performance. The Index tracks
total return for traded external debt instruments in emerging markets. The Index
is not available for direct investment.
Performance information is not included for Class C shares because the class has
not had annual returns for at least one calendar year.
24 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees (c) 0.25% 1.00% 1.00%
Other Expenses 0.43% 0.43% 0.43%
----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.43% 2.18% 2.18%
===== ===== =====
</TABLE>
____________________
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The maximum deferred sales charge is imposed on Class C Shares redeemed
during the first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
Phoenix-Goodwin Emerging Markets Bond Fund 25
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $614 $906 $1,219 $2,107
- --------------------------------------------------------------------------------
Class B $621 $882 $1,169 $2,323
- --------------------------------------------------------------------------------
Class C $321 $682 $1,169 $2,513
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $221 $682 $1,169 $2,323
- --------------------------------------------------------------------------------
Class C $221 $682 $1,169 $2,513
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of high current income and a secondary
objective of long-term capital appreciation. There is no guarantee that the fund
will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, the fund will invest at least 65% of its total
assets in debt securities issued by governments, government-related entities and
corporations in emerging markets or the return from which principally comes from
emerging markets. The adviser considers emerging markets to be any country that
is defined as an emerging or developing economy by an International Bank for
Reconstruction and Development, the International Finance Corporation or the
United Nations or its authorities. The fund will invest in at least
26 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
three countries at any one time and will not commit more than 40% of its assets
to issuers in a single country.
The fund will invest predominantly in debt securities that are rated below
investment grade or if unrated, are judged by the adviser to be of equivalent
quality to below investment grade securities. The high yields on these
securities often reflect the greater risks associated with investing in these
types of securities. Below investment grade securities are in the lower credit
rating categories, or if unrated, of comparable, limited quality. Credit ratings
are established by nationally recognized statistical rating organizations
(NRSROs). Please see the Statement of Additional Information for credit rating
information.
The fund will invest at least 65% of its assets in U.S. dollar denominated debt
securities.
Under normal circumstances, at least 50% of fund assets will be invested in
sovereign debt securities issued or guaranteed by governments,
government-related entities and central banks based in emerging markets;
government owned, controlled or sponsored entities located in emerging markets;
entities with a purpose of restructuring investment characteristics of
governments or related entities in emerging market countries; and debt
obligations issued by organizations such as the Asian Development Bank and the
Inter-American Development Bar.
The fund invests in securities of various maturities to maintain a level of
interest rate risk similar to that of the JP Morgan Emerging Markets Bond Index,
its benchmark. The fund uses a duration neutral strategy. Duration measures the
length of a debt security on a present value basis using the time between now
and when interest and principal should be received weighted against the present
value of the cash to be received at each future date. The fund attempts to
remain "duration neutral" in that the adviser does not predict future interest
rate changes or invest based upon such predictions.
The advisor's portfolio selection and sale methods may result in a higher
portfolio turnover rate. Higher portfolio turnover rates may increase costs to
the fund, negatively affect fund performance and increase capital gains
distributions, which may result in greater tax liability to you.
Temporary Defensive Strategy: If the adviser does not believe that market
conditions are favorable to the fund's principal strategies, the fund may invest
without limit in U.S. debt securities, including short-term money market
instruments. When this happens, the fund may not achieve its investment
objectives.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
Phoenix-Goodwin Emerging Markets Bond Fund 27
<PAGE>
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
If the adviser misjudges the ability of the issuer of a portfolio security to
make scheduled interest or other income payments to the fund, the fund's income
available for distribution to shareholders may decrease. Neither the fund nor
the adviser can assure you that a particular level of income will consistently
be achieved.
Typically, debt obligations will increase in value when interest rates decline
and decrease in value when interest rates rise. If interest rates do not move in
the direction that the adviser expects, then the value of your shares may
decrease.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
FOREIGN INVESTING
Investing in non-U.S.-issued debt securities involves special risks and
considerations not typically associated with investing in U.S. securities. These
include:
[bullet] differences in accounting, auditing and financial reporting
standards;
[bullet] generally higher commission rates on foreign portfolio transactions;
[bullet] differences and inefficiencies in transaction settlement systems;
[bullet] the possibility of expropriation or confiscatory taxation;
[bullet] adverse changes in investment or exchange control regulations;
[bullet] political instability; and
[bullet] potential restrictions on the flow of international capital.
Political and economic uncertainty as well as less public information about
investments may negatively impact the fund's portfolio.
Foreign securities often trade with less frequency and volume than domestic
securities and, therefore, may exhibit greater price volatility. Additionally,
dividends and interest payable on foreign securities may be subject to foreign
taxes withheld prior to receipt by the fund.
Many of the foreign securities held by the fund will not be registered with, nor
will the issuers of those securities be subject to the reporting requirements
of, the U.S. Securities and Exchange Commission. Accordingly, there may be less
publicly available information about the securities and about the foreign
company or government issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may differ favorably
or unfavorably from the U.S. economy in such respects as growth of gross
national
28 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payment positions.
FOREIGN CURRENCY
Portions of the fund's assets may be invested in securities denominated in
foreign currencies. Changes in foreign exchange rates will affect the value of
those securities denominated or quoted in currencies other than the U.S. dollar.
The forces of supply and demand in the foreign exchange markets determine
exchange rates and these forces are in turn affected by a range of economic,
political, financial, governmental and other factors. Exchange rate fluctuations
can affect the fund's net asset value (share price) and income either positively
or negatively depending upon whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar. Exchange rates fluctuate over
both the long and short terms.
On January 1, 1999, eleven European countries began converting from their
sovereign currency to the European Union common currency called the "Euro." This
conversion may expose the fund to certain risks including the reliability and
timely reporting of pricing information of the fund's portfolio holdings. In
addition, one or more of the following may adversely affect specific securities
in the fund's portfolio:
[bullet] known trends or uncertainties related to the Euro conversion that an
issuer reasonably expects will have a material impact on revenues,
expenses or income from its operations;
[bullet] competitive implications of increased price transparency of European
Union markets (including labor markets) resulting from adoption of a
common currency and issuers' plans for pricing their own products
and services in the Euro;
[bullet] issuers' ability to make required information technology updates on
a timely basis, and costs associated with the conversion (including
costs of dual currency operations through January 1, 2002);
[bullet] currency exchange rate risk and derivatives exposure (including the
disappearance of price sources, such as certain interest rate
indices); and
[bullet] potential tax consequences.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval for the release of
investment income, capital or the proceeds of sales of securities to foreign
investors may be required under certain circumstances in some developing
countries, and the extent of foreign investment in domestic companies may be
subject to limitation in other developing countries. The charters of individual
companies in developing countries may impose limitations on foreign ownership to
prevent, among other concerns, violation of foreign
Phoenix-Goodwin Emerging Markets Bond Fund 29
<PAGE>
investment limitations. Historically, many emerging markets have experienced
high inflation rates, creating a negative interest rate environment and
devaluing outstanding financial assets. In addition, a negative situation or
condition that affects the market in one emerging market region may have a
negative impact on all emerging market regions due to the so-called "ripple
effect."
The economies of developing countries generally are heavily dependent upon
international trade, and, accordingly, have been, and may continue to be,
adversely affected by trade barriers, exchange controls, managed adjustments in
relative currency values and other protectionist measures imposed or negotiated
by the countries with which they trade. These economies also have been (and may
continue to be) adversely affected by economic conditions in the countries with
which they trade.
BELOW INVESTMENT GRADE SECURITIES
Although below investment grade securities provide greater income and
opportunity for capital appreciation than investments in higher-grade
securities, they also typically entail greater price volatility and principal
and interest risk. There is a greater risk that an issuer will not be able to
make principal and interest payments on time. Lower-rated securities may not
trade as often and may be less liquid than higher-rated securities. Fund
expenses could increase if the fund were to pursue recovery of missed income
payments. Achievement of fund goals will also be more dependent on the adviser's
ability to select fund investments than if the fund invested in securities in
higher rating categories. Analysis of the creditworthiness of issuers of below
investment grade securities may be more complex than for higher-grade
securities, making it more difficult for the adviser to accurately predict risk.
LONG-TERM MATURITIES
Securities with longer maturities may be subject to greater price fluctuations
due to interest rate changes, tax laws and other general market factors than
securities with shorter maturities.
GOVERNMENT SECURITIES
Obligations issued or guaranteed by governments, government-related entities and
central banks based in emerging markets only guarantee principal and interest
will be timely paid to holders of the securities. The entities do not guarantee
that the value of fund shares will increase.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
30 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds, and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
- --------------------------------------------------------------------------------
During the fund's last fiscal year, the fund paid total management fees of
$730,717. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1998 was 0.75%. The total advisory fee of 0.75% of the
average net assets of the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is comparable to fees charged by
other mutual funds whose investment objectives are similar to those of the fund.
PORTFOLIO MANAGEMENT
Peter S. Lannigan is the Portfolio Manager of the Emerging Markets Bond Fund and
as such is primarily responsible for the day-to-day management of the fund. Mr.
Lannigan served as Co-Manager of the fund from April 1995 until November 1996.
Mr. Lannigan served as a Vice President of Phoenix between May 1995 and
September 1996, a Director, Fixed Income Research between 1996-1997, and
presently, he is a Managing Director, Fixed Income. From 1993 until 1995, he was
a Director, Fixed Income Research for Phoenix Home Life Mutual Insurance
Company.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the fund's operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that
Phoenix-Goodwin Emerging Markets Bond Fund 31
<PAGE>
the majority of these systems are already Year 2000 compliant. Phoenix believes
that with modifications to existing software and conversions to new software,
the Year 2000 issue will be mitigated.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
32 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin Tax-Exempt Bond Fund has an investment objective of producing as
high a level of current income exempt from federal income taxation as is
consistent with the preservation of capital. There is no guarantee that the fund
will achieve the objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund will invest in municipal securities, primarily municipal
bonds, the income from which is fully exempt from federal income
taxation.
[arrow] Income from some fund investments may be included in the federal
alternative minimum tax calculation and some may be subject to state
and local taxes. In addition, up to 20% of fund assets may be invested
in taxable fixed income obligations.
[arrow] The adviser will seek to adjust the proportions of the fund's
investment in various sectors of the tax exempt market and the
selection of investments within sectors to obtain higher returns on a
relative basis.
[arrow] The adviser attempts to select securities that it believes are
undervalued based on credit rating, coupon rate, calls, maturity and
average life. The adviser also attempts to select securities that are
located in an area or region that is experiencing economic growth.
[arrow] Municipal securities selected for investment will have credit ratings
within the four highest rating categories, or, if unrated, will be of
comparable quality.
[arrow] The fund invests in securities of various maturities to maintain a
level of interest rate risk similar to that of Lehman Brothers
Municipal Bond Index, its benchmark. The adviser also seeks to control
duration risk (the length of a debt security on a present value basis),
so that the fund may remain duration neutral.
[arrow] The fund may attempt to minimize risk by diversifying its investments
broadly and by investing no more than 25% of its total assets in
municipal securities issued by one state or territory.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
If the adviser misjudges the ability of issuers to make scheduled principal and
interest payments, the fund's income available for distribution may be less than
other funds. In addition, tax-exempt securities may not provide a higher after
tax return than taxable securities.
Phoenix-Goodwin Tax-Exempt Bond Fund 33
<PAGE>
Municipal and other debt securities are subject to interest rate risk.
Generally, the value of municipal and debt securities is inversely related to
changes in interest rates. If interest rates rise, the value of municipal and
debt securities will fall. This may cause the value of your shares to decrease.
Principal and interest payments may not be guaranteed by the issuing body and
may be payable only from monies derived from a particular source (so-called
"revenue bonds"). In addition, the market for municipal securities is often thin
and can be temporarily affected by large purchases and sales.
The fund may invest in municipal securities with longer maturities. Municipal
securities with longer maturities may be subject to greater price fluctuations
due to interest rates, tax laws and other general market factors than securities
with shorter maturities.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Tax-Exempt Bond Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table below shows how the fund's average annual returns compare to those of
a broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
TAX-EXEMPT BOND FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN (%)
------------- -----------------
1989 11.00
1990 6.32
1991 11.41
1992 10.65
1993 13.44
1994 -7.41
1995 18.21
1996 3.05
1997 8.33
1998 3.10
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 8.07% (quarter ending March
31, 1995) and the lowest return for a quarter was (6.00)% (quarter ending March
31, 1994). Year-to-date performance (through September 30, 1999) was __%.
34 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Life of the Fund(2)
Average Annual Total Returns -------------------------------
(for the periods ending 12/31/98)(1) One Year Five Years Ten Years Class A Class B
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares -1.78% 3.7% 7.07% 7.35% --
- -----------------------------------------------------------------------------------------------------------------
Class B Shares -1.32% N/A N/A -- 4.65%
- -----------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index(3) 6.48% 6.23% 8.22% 8.25% 7.84%(4)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since July 15, 1988 and Class B Shares since March 16, 1994.
(3) The Lehman Brothers Municipal Bond Index is an unmanaged, commonly used
measure of long-term, investment-grade, tax-exempt municipal bond total return
performance. The Lehman Brothers Municipal Bond Index performance does not
reflect sales charges.
(4) Index performance since March 31, 1994.
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.45% 0.45%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.27% 0.27%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 0.97% 1.72%
===== =====
</TABLE>
____________________
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
Phoenix-Goodwin Tax-Exempt Bond Fund 35
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $569 $769 $986 $1,608
- --------------------------------------------------------------------------------
Class B $575 $742 $933 $1,831
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $175 $542 $933 $1,831
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of producing as high a level of current
income exempt from federal income taxation as is consistent with the
preservation of capital. There is no guarantee that the fund will achieve the
objective.
PRINCIPAL INVESTMENT STRATEGIES
The adviser intends to use a sector rotation approach to select the types of
securities for fund investment. Sector rotation allows the adviser to adjust the
proportion of fund investments in various sectors of the tax exempt market.
The adviser selects securities for fund investment using an analytical approach
which focuses on:
36 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
[bullet] The relative value of a security considering the security's credit
rating. The adviser seeks to identify those securities that have
stable to improving credit ratings and that the adviser believes are
undervalued.
[bullet] The structure of the security. The adviser will look at the coupon
rate, calls, maturity and average life of a security.
[bullet] Geographic opportunities. The adviser seeks to identify areas,
regions and countries that are experiencing economic growth.
[bullet] Sector relationships. The adviser seeks to identify those sectors
that are experiencing improved fundamentals or that are undervalued.
Under normal market conditions, the fund will invest at least 80% of its net
assets in municipal securities, primarily municipal bonds, the income from which
is fully exempt from federal income taxation and that are rated within the four
highest rating categories. Municipal securities means obligations, including
municipal bonds and notes and tax-exempt commercial paper, issued by or on
behalf of states, territories and possessions of the United States, the District
of Columbia and their political subdivisions, agencies, and instrumentalities,
the interest from which is, in the opinion of counsel to the issuers of such
securities, exempt from federal income taxation.
The fund invests in securities of various maturities to maintain a level of
interest rate risk similar to that of the Lehman Brothers Municipal Bond Index,
its benchmark. The fund uses a duration neutral strategy. Duration measures the
length of a debt security on a present value basis using the time between now
and when interest and principal should be received weighted against the present
value of the cash to be received at each future date. The fund attempts to
remain "duration neutral" in that the adviser does not predict future interest
rate changes or invest based upon such predictions.
The fund will attempt to minimize risk through diversification by investing no
more than 25% of its total assets in the municipal securities issued by one
state or territory.
The fund may invest up to 20% of its net assets in qualified "private activity"
industrial development bonds and taxable fixed income obligations. The income
from qualified "private activity" industrial development bonds will be exempt
from federal income taxation, but it is included in the federal alternative
minimum tax calculation. Taxable fixed income obligations in which the fund may
invest include: U.S. government obligations, high-investment-grade corporate
debt securities, high-investment-grade commercial paper, certificates of deposit
and repurchase agreements with banks, brokers and dealers considered by the fund
to be creditworthy. Income from some investments may also be subject to state
and local taxes.
Temporary Defensive Strategy: The fund may invest all of its assets in U.S.
government obligations, high-investment-grade corporate debt securities,
high-investment-grade commercial paper, certificates of deposit and repurchase
agreements with banks, brokers and
Phoenix-Goodwin Tax-Exempt Bond Fund 37
<PAGE>
dealers considered by the fund to be trustworthy for temporary defensive
purposes. In such instances, the fund may not achieve its stated objective.
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
If the adviser misjudges the ability of issuers to make scheduled principal and
interest payments, the fund's income available for distribution may be less than
other funds. In addition, tax-exempt securities may not provide a higher
after-tax return than taxable securities.
Municipal and other debt securities are subject to interest rate risk.
Generally, the value of municipal and debt securities is inversely related to
changes in interest rates. If interest rates rise, the value of municipal and
debt securities will fall. This may cause the value of your shares to decrease.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that should be noted.
MUNICIPAL SECURITIES
Principal and interest payments may not be guaranteed by the issuing body and
may be payable only from monies derived from a particular source (so-called
"revenue bonds"). If the source does not perform as expected, principal and
income payments may not be made on time or at all. In addition, the market for
municipal securities is often thin and can be temporarily affected by large
purchases and sales, including those by the fund.
LONG-TERM MATURITIES
The fund may invest in municipal securities with longer maturities. Municipal
securities with longer maturities may be subject to greater price fluctuations
due to interest rates, tax laws and other general market factors than securities
with shorter maturities.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also the cost of modifying computer programs to become Year 2000 compliant
may hurt the financial performance and market price of entities whose securities
are held by the fund.
38 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.45% 0.40% 0.35%
- --------------------------------------------------------------------------------
During the fund's last fiscal year, the fund paid total management fees of
$544,278. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1998 was 0.45%.
PORTFOLIO MANAGEMENT
Timothy Heaney has served as Portfolio Manager of the Tax-Exempt Bond Fund since
September 1997 and, as such, is primarily responsible for the day-to-day
management of the fund. Mr. Heaney is also the Portfolio Manager of Phoenix
California Tax-Exempt Bonds, Inc. and, from March 1996 to September 1997, he
served as Co-Manager. Mr. Heaney is Vice President of the fund and served as
Director, Fixed Income Research of Phoenix from 1996 to 1998. Since 1998, he is
managing Director, Fixed Income of Phoenix. From 1995 to 1996, he was an
Investment Analyst with Phoenix, and, from 1992 to 1994, he was an Investment
Analyst with Phoenix Home Life Mutual Insurance Company.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated.
Phoenix-Goodwin Tax-Exempt Bond Fund 39
<PAGE>
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
40 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
PHOENIX-SENECA AFTER-TAX GROWTH FUND
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Seneca After-Tax Growth Fund has an investment objective of capital
appreciation. There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] Under normal circumstances, the fund will invest at least 65% of its
total assets in common stocks, primarily common stocks of domestic
(U.S.) growth companies of any size. Generally, the fund focuses a
portion of its portfolio on large, well-known companies that have
established a history of profitability and/or dividend payment.
[arrow] The fund is managed by an adviser and a subadviser. The adviser is
responsible for managing the fund's investment program and the general
operations of the fund. The subadviser primarily manages fund
investments utilizing a "bottom-up" analysis based on a stock's
strength and quality of earnings, its ability to sustain earnings, the
stock's valuation and the management of the issuer. The subadviser also
selects securities it believes have the potential for above-average
market appreciation.
[arrow] The subadviser seeks to maximize after-tax returns by employing any or
all of the following strategies:
[bullet] selecting securities the subadviser believes may achieve high
pre-tax returns with emphasis on the likelihood of long-term returns
rather than short-term returns;
[bullet] limiting turnover when it is believed to be appropriate;
[bullet] holding securities to achieve long-term capital gain status when
possible; and
[bullet] matching any losses with gains when the subadviser believes it to be
advantageous.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
The value of the fund's investments that support your share value can decrease
as well as increase.
Conditions affecting the overall economy, specific industries or companies in
which the fund invests can be worse than expected. As a result, the value of
your shares may decrease.
The fund's ability to maximize after-tax returns may not be successful. The fund
may have taxable gains from time to time and may be negatively affected by
future state and federal tax legislation.
Phoenix-Seneca After-Tax Growth Fund 41
<PAGE>
Growth stocks are generally more volatile to market increases and decreases than
non-growth stocks.
Small companies in which the fund invests may be affected to a greater extent
than larger companies by changes in economic conditions and conditions in
specific industries. Smaller companies may also be relatively new and may not
have the same operating history and "track record" as larger companies. This
could make future performance of smaller companies more difficult to predict.
PERFORMANCE TABLES
Performance tables are not included for the Phoenix-Seneca After-Tax Growth Fund
because the fund has not had annual returns for at least one calendar year.
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5% (c) 1% (d)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
--------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)(a)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(e) 0.25% 1.00% 1.00%
Other Expenses 0.35% 0.35% 0.35%
----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES(b) 1.35% 2.10% 2.10%
===== ===== =====
</TABLE>
____________________
(a) As of the date of this prospectus, the fund had not commenced investment
operations. The percentages indicated are estimates and actual expenses may
be more or less than the amounts shown.
(b) The fund's investment adviser has agreed to reimburse through December 31,
2000 the Phoenix-Seneca After-Tax Growth Fund's expenses, other than
Management Fees and Distribution and Service Fees, to the extent that such
expenses exceed 0.35% for each Class of Shares.
(c) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(d) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(e) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
42 Phoenix-Seneca After-Tax Growth Fund
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $ $ $ $
- --------------------------------------------------------------------------------
Class B $ $ $ $
- --------------------------------------------------------------------------------
Class C $ $ $ $
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $ $ $ $
- --------------------------------------------------------------------------------
Class C $ $ $ $
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of capital appreciation. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, the fund will invest at least 65% of its total
assets in common stocks. The fund intends to invest in a diversified portfolio
of stocks of primarily domestic (U.S.) companies that the adviser believes
exhibits the potential for growth.
The fund contracts with an adviser, Phoenix Investment Counsel, Inc., to manage
the fund's investment program and to be responsible for the general operations
of the fund, and a
Phoenix-Seneca After-Tax Growth Fund 43
<PAGE>
subadviser, Seneca Capital Management LLC, to manage the investments of the
fund. The subadviser uses "bottom-up" analysis based on a stock's strength and
quality of earnings, its ability to sustain earnings, the stock's valuation and
the management of the issuer.
The subadviser also selects securities it believes have the potential for
above-average market appreciation. In evaluating companies' potential for market
appreciation, the subadviser seeks companies that it believes will demonstrate
greater long-term earnings growth than the average company included in the
Standard and Poors 500 Index. The strategy is based on the subadviser's view
that growth in a company's earnings will correlate with growth in the price of
its stock.
The subadviser seeks to maximize after-tax returns by employing any or all of
the following strategies:
[bullet] selecting securities the subadviser believes may achieve high
pre-tax returns with emphasis on the likelihood of long-term returns
rather than short-term returns;
[bullet] limiting turnover when it is believed to further the after-tax
strategy;
[bullet] holding securities to achieve long-term capital gain status when
market conditions allow; and
[bullet] matching any losses with gains when the subadviser believes it may
achieve optimal tax results.
The subadviser seeks to identify companies that it believes have the most
attractive prospects and favorable valuations regardless of the size of the
company. Generally, however, a portion of the fund's portfolio will be invested
in large, well-known companies that have established a history of profitability
and/or dividend payment.
Temporary Defensive Strategy: If the subadviser believes that market conditions
are not favorable to the fund's principal strategies, the fund may invest
without limit in cash and cash equivalents. In such instances, the fund may not
achieve its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that support your share value can decrease
as well as increase. If between the time you purchase shares and the time you
sell shares the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can
44 Phoenix-Seneca After-Tax Growth Fund
<PAGE>
decrease for a number of reasons. For example, changing economic conditions may
cause a decline in value of many or most investments. Particular industries can
face poor market conditions for their products or services so that companies
engaged in those businesses do not perform as well as companies in other
industries. To the extent that the fund's investments are affected by general
economic declines and declines in industries that negatively affect the
companies in which the fund invests, fund share values may decline. Share values
can also decline if the specific companies selected for fund investment fail to
perform as the subadviser expects, regardless of general economic trends,
industry trends and other economic factors.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, return is largely based on a stock's capital appreciation, making
return more dependent on market increases and decreases. Growth stocks are
therefore more volatile than non-growth stocks to market changes.
TAX MANAGEMENT STRATEGY
The fund's ability to maximize after-tax returns may not be successful. There is
no guarantee that strategies aimed at avoiding the recognition of large capital
gains will be successful. As a result, the fund may have taxable gains from time
to time. In addition, certain tax advantages currently available to reduce
after-tax returns may be negatively affected by future state and federal tax
legislation.
SMALL CAPITALIZATIONS
Given the limited operating history and rapidly changing fundamental prospects,
investment returns from smaller capitalization companies can be highly volatile.
Smaller companies may find their ability to raise capital impaired by their size
or lack of operating history. Smaller capitalization stocks are subject to
varying patterns of trading volume and may, at times, be more difficult to sell.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue it is possible that its operations and financial results would be
hurt. Also the cost of modifying computer programs to become Year 2000 compliant
may hurt the financial performance and market price of entities whose securities
are held by the fund.
Phoenix-Seneca After-Tax Growth Fund 45
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
- --------------------------------------------------------------------------------
In addition to the Principal Investment Strategies and Risks, the fund may
engage in the following investment techniques:
DEBT SECURITIES
The fund may invest in preferred stocks, warrants and other debt instruments,
including bonds convertible into common stocks. The value of debt instruments is
inversely related to interest rates. Generally, if interest rates rise, the
value of fixed income securities will fall. Should the fund invest in debt
securities with lower credit ratings and/or longer maturities, the risk of
negative price effects and default increases.
SECURITIES LENDING
The fund may lend up to one-third of its net assets at market value to increase
its investment returns. If the borrower is unwilling or unable to return the
borrowed securities when due, the fund can suffer losses.
FOREIGN INVESTING
The fund may invest up to 20% of its assets in securities of foreign (non-U.S.)
issuers. Foreign investment will primarily be through American Depository
Receipts (ADRs). Foreign markets and currencies may not perform as well as U.S.
markets, and dividends and other income payable on foreign securities may be
subject to foreign taxes.
OPTIONS AND FUTURES
The fund may invest up to 20% of its net assets in options and futures
contracts. The fund intends to invest in the securities primarily for hedging
purposes but may invest up to 5% of its assets in these securities as an
investment unrelated to hedging. Futures and options involve market risk in
excess of their value and may not be as liquid as other securities.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
46 Phoenix-Seneca After-Tax Growth Fund
<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
Seneca Capital Management LLC ("Seneca") is the investment subadviser to the
fund and is located at 909 Montgomery Street, San Francisco, California 94133.
Seneca acts as a subadviser to nine other mutual funds and as investment adviser
to institutions and individuals. As of December 31, 1998, Seneca had $5.9
billion in assets under management. Seneca has been (with its predecessor,
GMG/Seneca Capital Management LP ("GMG/Seneca")) an investment adviser since
1989.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
fund. Seneca, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Seneca manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
- --------------------------------------------------------------------------------
Phoenix pays Seneca a subadvisory fee at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Subadvisory Fee 0.375% 0.350% 0.325%
- --------------------------------------------------------------------------------
The total advisory fee of 0.75% of the aggregate net assets of the fund is
greater than that for most mutual funds; however, the Trustees have determined
that it is comparable to fees charged by other mutual funds whose investment
objectives are similar to those of the fund.
The adviser has voluntarily agreed to assume total fund operating expenses of
the fund excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses, until December 31, 1999, to the extent that such
expenses exceed the following percentages of the average annual net asset values
for the fund:
Phoenix-Seneca After-Tax Growth Fund 47
<PAGE>
- --------------------------------------------------------------------------------
Class A Class B Class C
Shares Shares Shares
- --------------------------------------------------------------------------------
After-Tax Growth Fund _____% _____% _____%
- --------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of managers and
analysts headed by Gail P. Seneca. The team leaders, which include Ms. Seneca,
Richard D. Little and Ronald K. Jacks, are primarily responsible for the
day-to-day decisions related to the fund.
Gail P. Seneca. Ms. Seneca serves as Co-Manager of the fund. Ms. Seneca also
serves as Co-Manager of Phoenix-Seneca Equity Opportunities Fund and
Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity Series Fund and
the Phoenix-Seneca Mid Cap Fund of Phoenix Multi-Portfolio Fund. Ms. Seneca also
serves as a team leader for each of the Phoenix-Seneca Funds. Ms. Seneca has
been the Chief Executive and Investment Officer of Seneca or GMG/Seneca since
November 1989. From October 1987 until October 1989, she was Senior Vice
President of the Asset Management Division of Wells Fargo Bank, and, from
October 1983 to September 1987, she was Investment Strategist and Portfolio
Manager for Chase Lincoln Bank, heading the fixed income division.
Richard D. Little. Mr. Little serves as Co-Manager of the fund. Mr. Little
serves as Co-Manager of Phoenix-Seneca Equity Opportunities Fund and
Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity Series Fund, and
Phoenix-Seneca Mid-Cap Fund of Phoenix Multi-Portfolio Fund. Mr. Little also
serves as a Portfolio Manager for Phoenix-Seneca Growth Fund and Phoenix-Seneca
Mid-Cap "EDGE"[service mark] Fund of Phoenix-Seneca Fund. Mr. Little has been
Director of Equities with Seneca or GMG/Seneca since December 1989. Before he
joined GMG/Seneca, Mr. Little held positions as an analyst, board member, and
regional manager with Smith Barney, NatWest Securities, and Montgomery
Securities.
Ronald K. Jacks. Mr. Jacks serves as Co-Manager of the fund. He also serves as
Co-Manager of the Phoenix-Seneca Equity Opportunities Fund and Phoenix-Seneca
Strategic Theme Fund of Phoenix Strategic Equity Series Fund and Phoenix-Seneca
Mid Cap Fund of Phoenix Multi-Portfolio Fund. Mr. Jacks also serves as a
Portfolio Manager for Phoenix-Seneca Growth Fund and Phoenix-Seneca Mid-Cap
"EDGE"[service mark] Fund of Phoenix-Seneca Funds. Mr. Jacks was Secretary of
the Phoenix-Seneca Funds from February 1996 through February 1998. Mr. Jacks was
a Trustee of Seneca Funds from February 1996 through June 1997. Mr. Jacks has
been a Portfolio Manager with Seneca or GMG/Seneca since July 1990.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
48 Phoenix-Seneca After-Tax Growth Fund
<PAGE>
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
Phoenix-Seneca After-Tax Growth Fund 49
<PAGE>
PHOENIX-SENECA MID CAP FUND
- --------------------------------------------------------------------------------
IMPORTANT NOTICE TO INVESTORS
On August 25, 1999, the Board of Trustees of Phoenix Multi-Portfolio Fund (the
"Trust") unanimously approved an Agreement and Plan of Reorganization (the
"Agreement") relating to the proposed combination of the Phoenix-Seneca Mid Cap
Fund of the Trust and the Phoenix-Seneca Strategic Theme Fund of Phoenix
Strategic Equity Series Fund.
Pursuant to the Agreement, the Mid Cap Fund will transfer all or substantially
all of its assets to the Strategic Theme Fund in exchange for shares of the
Strategic Theme Fund and the assumption by the Strategic Theme Fund of certain
identified liabilities of the Mid Cap Fund. Following the exchange, the Mid Cap
Fund will distribute the shares of the Strategic Theme Fund to its shareholders
pro rata, in liquidation of the Mid Cap Fund. The effectiveness of these
transactions is subject to the satisfaction of a number of conditions, including
approval by shareholders of the Mid Cap Fund. It is currently anticipated that
the required meeting of shareholders will be held in November 1999.
INVESTMENT RISK AND RETURN SUMMARY
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Seneca Mid Cap Fund has an investment objective of long-term capital
appreciation. There is no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
[arrow] The fund will seek to increase the value of your shares by investing in
securities that the subadviser believes have earnings growth potential
and the potential for capital appreciation over the intermediate or
long term.
[arrow] The fund intends to invest primarily in common stocks of U.S. companies
with market capitalizations between $1 billion and $10 billion.
[arrow] The fund may invest in any class or type of security, including
preferred stocks, bonds, junk bonds, and convertible securities whether
foreign (non-U.S.) or U.S., that the adviser believes have the
potential to appreciate.
[arrow] Generally, the fund expects to hold at least 35 positions.
[arrow] The fund is managed by an adviser and subadviser. The subadviser
screens for growth in the mid-cap market. The focus is on stocks the
subadviser projects will have earnings
50 Phoenix-Seneca Mid Cap Fund
<PAGE>
growth rates at substantially higher levels than the market and that it
forecasts will have major earnings acceleration.
[arrow] More specifically, the subadviser selects stocks that it believes are
producing quality, sustainable earnings, are well managed, and are
reasonably valued relative to the growth rate and to the market.
[arrow] The subadviser will review stocks for potential sale if earnings
reports disappoint, valuation levels reach the top of their historic
level, or if earnings momentum peaks.
[arrow] Debt obligations selected for investment may be of any credit quality
or maturity.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
Conditions affecting the overall economy, specific industries, or companies in
which the fund invests can be worse than expected. As a result, the value of
your shares may decrease. The fund may also be subject to greater risks than a
fund that invests in a broader range of securities that do not have growth
potential.
Mid-capitalization investing presents additional risks. These issuers may be
affected to a greater extent than larger, well established companies by changes
in general economic conditions and conditions in particular industries, and they
may not have the same operating history and "track record" as larger companies.
Future performance of mid-cap companies may, therefore, be more difficult to
predict.
Political and economic uncertainty, as well as less public information about
foreign investments, may negatively impact the fund's portfolio. Some
investments may be made in currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the currency exchange rate. Foreign
markets and currencies may not perform as well as U.S. markets.
Typically, debt obligations will increase in value when interest rates decline
and decrease in value when interest rates rise. If interest rates do not move in
the direction that the adviser expects, then the value of your shares may
decrease. Debt obligations with longer maturities may be subject to greater
price fluctuation and those with lower credit quality are subject to greater
risk that principal and interest payments will not be made on time or at all.
Debt obligations with longer maturities may be subject to greater price
fluctuation.
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Seneca Mid Cap Fund. The bar chart shows changes in the fund's
Class A Shares performance from year to year over the life of the fund.(1) The
table below shows how the fund's average annual returns compare to those of a
broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
Phoenix-Seneca Mid Cap Fund 51
<PAGE>
MID CAP FUND
[graphic omitted]
CALENDAR YEAR ANNUAL RETURN (%)
------------- -----------------
1990 20.47
1991 47.93
1992 8.14
1993 10.13
1994 -3.84
1995 30.84
1996 8.55
1997 13.21
1998 19.78
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 28.79% (quarter ending December 31,
1998) and the lowest return for a quarter was (16.14)% (quarter ending September
30, 1998). Year-to-date performance (through September 30, 1999) was __%.
<TABLE>
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
Life of the Fund(2)
Average Annual Total Returns ---------------------------
(for the periods ending 12/31/98)(1) One Year Five Years Class A Class B
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares 14.07% 12.03% 16.20% --
- -----------------------------------------------------------------------------------------------------------
Class B Shares 15.16% N/A -- 14.97%
- -----------------------------------------------------------------------------------------------------------
S&P MidCap Index(3) 19.11% 18.85% 17.99% 21.84%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A Shares since November 1, 1989, and Class B Shares since July 18,
1994.
(3) The S&P MidCap Index is an unmanaged commonly used measure of total return
performance of mid-capitalization companies. The Index is not available for
direct investment.
52 Phoenix-Seneca Mid Cap Fund
<PAGE>
FUND EXPENSES
- --------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a)
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None
Redemption Fee None None
Exchange Fee None None
----------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75%
Distribution and Service (12b-1) Fees (b) 0.25% 1.00%
Other Expenses 0.30% 0.30%
----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.30% 2.05%
===== =====
</TABLE>
___________________________
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Seneca Mid Cap Fund 53
<PAGE>
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class A $601 $868 $1,154 $1,968
- --------------------------------------------------------------------------------
Class B $608 $843 $1,103 $2,187
- --------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
- --------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Class B $208 $643 $1,103 $2,187
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The fund has an investment objective of long-term capital appreciation. There is
no guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
The fund contracts with an adviser, Phoenix Investment Counsel, Inc., to manage
the fund's investment program and to be responsible for the general operation of
the fund. It also contracts with a subadviser, Seneca Capital Management LLC, to
manage investments of the fund. The subadviser selects common stocks of mid-cap
companies that it believes have the potential to appreciate. However, since
common stocks do not always afford the greatest promise for capital
appreciation, the fund may invest any amount of its assets in any class or type
of security believed by the subadviser to offer the potential for capital
appreciation over both the intermediate and long terms.
The fund will seek to increase the value of your shares by investing in
securities that the subadviser believes have earnings growth potential and the
potential for capital appreciation over the intermediate or long term.
The fund intends to invest primarily in common stocks of U.S. companies with
market capitalizations between $1 billion and $10 billion. Generally, the fund
expects to hold at least 35 positions. The subadviser selects stocks using a
screening process. It screens for growth across the mid-cap market. The focus is
on stocks the subadviser projects will have earnings growth rates at
substantially higher levels than the market and that it forecasts will have
major earnings acceleration. More specifically, the subadviser selects stocks
that it believes are producing quality, sustainable earnings, are well managed,
and are reasonably valued relative to the growth rate and to the market.
54 Phoenix-Seneca Mid Cap Fund
<PAGE>
Up to one-third of fund assets may be invested in a broad range of foreign
securities, including equity, debt and convertible securities and foreign
government securities that the adviser believes have the potential to
appreciate.
The subadviser will review stocks for potential sale if earnings reports
disappoint; valuation levels reach the top of their historic level; or if
earnings momentum peaks.
Temporary Defensive Strategy: The subadviser, at its discretion, may invest in
any type of security that appears advantageous on the combined considerations of
risk and the protection of capital, cash retentions, or invest all or part of
its assets in cash equivalents for temporary defensive purposes such as when the
market for growth stocks is adverse. When this happens, the fund may not achieve
its investment objective.
Please refer to the Statement of Additional Information for more detailed
information about these and other investment techniques of the fund.
RISKS RELATED TO INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
GENERAL
The value of the fund's investments that supports your share value can decrease
as well as increase. If, between the time you purchase shares and the time you
sell shares, the value of the fund's investments decreases, you will lose money.
The value of the fund's investments can decrease for a number of reasons. For
example, changing economic conditions may cause a decline in the value of many
or most investments. Particular industries can face poor market conditions for
their products or services so that companies engaged in those businesses do not
perform as well as companies in other industries. To the extent that the fund's
investments are affected by general economic declines and declines in industries
that negatively affect the companies in which the fund invests, fund share
values may decline. Share values can also decline if the specific companies
selected for fund investment fail to perform as the subadviser expects,
regardless of general economic trends, industry trends and other economic
factors.
In addition to these general risks of investing in the fund, there are several
specific risks of investing in the fund that you should note.
MID-CAPITALIZATION INVESTING
Companies with mid-capitalizations are often companies in industries that have
recently emerged due to cultural, economic, regulatory or technological
developments. Such developments can have a significant positive or negative
effect on mid-capitalization companies and their stock performance. Given the
limited operating history and rapidly changing fundamental prospects, investment
returns from mid-capitalization companies can be highly volatile. Mid-sized
companies may find their ability to raise capital impaired by their size or
Phoenix-Seneca Mid Cap Fund 55
<PAGE>
lack of operating history. Product lines are often less diversified and subject
to competitive threats. Mid-cap stocks are subject to varying patterns of
trading volume and may, at times, be difficult to sell.
Focusing fund investments in mid-cap companies may also subject the fund to
greater risks than a fund that invests in a broad range of securities that do
not have the potential to appreciate. Investment returns may be less for mid-cap
companies with appreciation potential because return is more dependent on market
increases and decreases as compared to stocks that provide dividend payments.
Should the market decline, the share value of mid-cap companies may decline at a
sharper rate than larger, dividend-paying companies.
DEBT SECURITIES
Typically, debt obligations will increase in value when interest rates decline
and decrease in value when interest rates rise. If interest rates do not move in
the direction that the adviser expects, then the value of your shares may
decrease. Credit risk for debt obligations typically increases as the rating
declines. Securities with lower credit ratings have a greater chance of
principal and interest payment default. Defaults and missed payments may cause
the value of your shares to decrease and decrease the level of expected income
payments. Longer maturities may be subject to price fluctuations due to interest
rates, tax laws and other general market factors.
IMPACT OF THE YEAR 2000 ISSUE ON FUND INVESTMENTS
The Year 2000 issue is the result of computer programs being written using two
rather than four digits to define the applicable year. There is the possibility
that some or all of an entity's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. If an entity whose securities are held by the fund does not "fix" its Year
2000 issue, it is possible that its operations and financial results would be
hurt. Also, the cost of modifying computer programs to become Year 2000
compliant may hurt the financial performance and market price of entities whose
securities are held by the fund.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds and as adviser to institutional clients. As of December 31, 1998,
Phoenix had $23.9 billion in assets under management. Phoenix has acted as an
investment adviser for over sixty years.
56 Phoenix-Seneca Mid Cap Fund
<PAGE>
Seneca Capital Management LLC ("Seneca") is the investment subadviser to the
fund and is located at 909 Montgomery Street, San Francisco, California 94133.
Seneca acts as a subadviser to nine other mutual funds and as investment adviser
to institutions and individuals. As of December 31, 1998, Seneca had $5.9
billion in assets under management. Seneca has been (with its predecessor,
GMG/Seneca Capital Management LP ("GMG/Seneca")) an investment adviser since
1989.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
fund. Seneca, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Seneca manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Management Fee 0.75% 0.70% 0.65%
- --------------------------------------------------------------------------------
Phoenix pays Seneca a subadvisory fee at the following rates:
- --------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
- --------------------------------------------------------------------------------
Subadvisory Fee 0.375% 0.350% 0.325%
- --------------------------------------------------------------------------------
During the fund's last fiscal year, the fund paid total management fees of
$2,476,987. The ratio of management fees to average net assets for the fiscal
year ended November 30, 1998 was 0.75%. The total advisory fee of 0.75% of the
aggregate net assets of the fund is greater than that for most mutual funds;
however, the Trustees have determined that it is comparable to fees charged by
other mutual funds whose investment objectives are similar to those of the fund.
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of managers and
analysts headed by Gail P. Seneca. The team leaders, which include Ms. Seneca,
Richard D. Little and Ronald K. Jacks, are primarily responsible for the
day-to-day decisions related to the fund.
Gail P. Seneca. Ms. Seneca has serves as Co-Manager of the fund since June 1998.
Ms. Seneca has also served as Co-Manager of Phoenix Equity Opportunities Fund
and Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity Series Fund
and Phoenix-Seneca After-Tax Growth Fund of Phoenix Multi-Portfolio Fund. Ms.
Seneca also serves as a team leader for each of the Phoenix-Seneca Funds. Ms.
Seneca has been the Chief Executive and Investment Officer of Seneca or
GMG/Seneca since November 1989. From October 1987 until October 1989, she was
Senior Vice President of the Asset Management Division of Wells
Phoenix-Seneca Mid Cap Fund 57
<PAGE>
Fargo Bank, and, from October 1983 to September 1987, she was Investment
Strategist and Portfolio Manager for Chase Lincoln Bank, heading the fixed
income division.
Richard D. Little. Mr. Little has served as Co-Manager of the fund since June
1998. Mr. Little serves as Co-Manager of Phoenix Equity Opportunities Fund and
Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity Series Fund and
Phoenix-Seneca After-Tax Growth Fund of Phoenix Multi-Portfolio Fund. Mr. Little
also serves as a team leader for Phoenix-Seneca Growth Fund and Phoenix-Seneca
Mid-Cap "EDGE"[service mark] Fund of Phoenix-Seneca Funds. Mr. Little has been
Director of Equities with Seneca or GMG/Seneca since December 1989. Before he
joined GMG/Seneca, Mr. Little held positions as an analyst, board member, and
regional manager with Smith Barney, NatWest Securities, and Montgomery
Securities.
Ronald K. Jacks. Mr. Jacks has served as Co-Manager of the fund since June
1998. He also serves as Co-Manager of Phoenix-Seneca Equity Opportunities Fund
and Phoenix-Seneca Strategic Theme Fund of Phoenix Strategic Equity Series Fund
and Phoenix-Seneca After-Tax Growth Fund of Phoenix Multi-Portfolio Fund. Mr.
Jacks also serves as a Portfolio Manager for Phoenix-Seneca Growth Fund and
Phoenix-Seneca Mid-Cap "EDGE"[service mark] Fund of Phoenix-Seneca Funds. Mr.
Jacks was Secretary of the Phoenix-Seneca Funds from February 1996 through
February 1998. Mr. Jacks was a Trustee of Seneca Funds from February 1996
through June 1997. Mr. Jacks has been a Portfolio Manager with Seneca or
GMG/Seneca since July 1990.
IMPACT OF THE YEAR 2000 ISSUE ON FUND OPERATIONS
The Trustees have directed management to ensure that the systems used by service
providers (Phoenix and its affiliates) in support of the funds' operations be
assessed and brought into Year 2000 compliance. Based upon its assessments,
Phoenix determined that it would be required to modify or replace portions of
its software so that its computer systems would properly utilize dates beyond
December 31, 1999. Phoenix management believes that the majority of these
systems are already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new software, the Year
2000 issue will be mitigated.
Phoenix is utilizing both internal and external resources to reprogram, or
replace, and test the software for Year 2000 modifications. As of June 30, 1999,
Phoenix mission-critical systems have been upgraded and tested for Year 2000
compliance. The total cost to become Year 2000 compliant is not an expense of
the fund and is not expected to have a material impact on the operating results
of Phoenix.
58 Phoenix-Seneca Mid Cap Fund
<PAGE>
PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
The fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, the fund calculates net asset value by:
[bullet] adding the values of all securities and other assets of the fund,
[bullet] subtracting liabilities, and
[bullet] dividing by the total number of outstanding shares of the fund.
Asset Value: The fund's investments are valued at market value. If market
quotations are not available, the fund determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and liabilities
that are not class specific (such as management fees) are allocated to each
class in proportion to each class's net assets, except where an alternative
allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class's net asset value per
share.
The net asset value per share of each class of the fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the NYSE is closed for trading.
Trading of securities held by the fund in foreign markets may negatively or
positively impact the value of such securities on days when the fund neither
trades securities nor calculates its net asset values (i.e., weekends and
certain holidays).
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of fund distributions will be in
Phoenix Multi-Portfolio Fund 59
<PAGE>
full and fractional shares that are purchased at the closing net asset value on
the next business day on which the fund's net asset value is calculated
following the dividend record date.
SALES CHARGES
- --------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
Each of the funds presently offers two classes of shares, and the International
Fund and the Emerging Markets Bond Fund offer one additional class of shares.
Each class of shares has different sales and distribution charges (see "Fund
Expenses" previously in this prospectus). The funds have adopted distribution
and service plans allowed under Rule 12b-1 of the Investment Company Act of 1940
that authorize the fund to pay distribution and service fees for the sale of its
shares and for services provided to shareholders. Because distribution and
service fees are paid out of the fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 4.75% of the offering price (4.99% of the amount
invested). The sales charge may be reduced or waived under certain conditions.
Class A Shares are not subject to any charges by the fund when redeemed. Class A
Shares have lower distribution and service fees (0.25%) and pay higher dividends
than any other class.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first 5
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and C Shares"
below. This charge declines to 0% over a period of 5 years and may be waived
under certain conditions. Class B shares have higher distribution and service
fees (1.00%) and pay lower dividends than Class A Shares. Class B Shares
automatically
60 Phoenix Multi-Portfolio Fund
<PAGE>
convert to Class A Shares eight years after purchase. Purchase of Class B Shares
may be inappropriate for any investor who may qualify for reduced sales charges
of Class A Shares and anyone who is over 85 years of age. The underwriter may
decline purchases in such situations.
CLASS C SHARES. (International Fund, Emerging Markets Bond Fund and After-Tax
Growth Fund only.) If you purchase Class C Shares, you will not pay a sales
charge at the time of purchase. If you sell your Class C Shares within the first
year after they are purchased, you will pay a sales charge of 1%. See "Deferred
Sales Charge Alternative--Class B and C Shares" below. Class C Shares have the
same distribution and service fees (1.00%) and pay comparable dividends as Class
B Shares. Class C Shares do not convert to any other class of shares of the
fund.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Sales Charges: Combination Purchase Privilege" in the Statement
of Additional Information). Shares purchased based on the automatic reinvestment
of income dividends or capital gains distributions are not subject to any sales
charges. The sales charge is divided between your investment dealer and the
fund's underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
SALES CHARGE AS
A PERCENTAGE OF
------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
- ----------------- ----- --------
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 3.00 3.09
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND C SHARES
Class B and C Shares are purchased without an initial sales charge; however,
shares sold within a specified time period are subject to a declining contingent
deferred sales charge ("CDSC") at the rates listed below. The sales charge will
be multiplied by the then current market value or the initial cost of the shares
being redeemed, whichever is less. No sales charge will be imposed on increases
in net asset value or on shares purchased through the reinvestment of income
dividends or capital gains distributions. To minimize the sales charge, shares
not subject to any charge will be redeemed first, followed by shares held the
longest time. To calculate the amount of shares owned and time period held, all
Class B Shares purchased in any month are
Phoenix Multi-Portfolio Fund 61
<PAGE>
considered purchased on the last day of the preceding month, and all Class C
Shares are considered purchased on the trade date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
YEAR 1 2 3 4 5 6+
- --------------------------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES (INTERNATIONAL FUND,
EMERGING MARKETS BOND FUND AND AFTER-TAX GROWTH FUND ONLY)
YEAR 1 2+
- --------------------------------------------------------------------------------
CDSC 1% 0%
YOUR ACCOUNT
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
[bullet] $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
[bullet] There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
[bullet] $500 for all other accounts.
Minimum ADDITIONAL investments:
[bullet] $25 for any account.
[bullet] There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
62 Phoenix Multi-Portfolio Fund
<PAGE>
STEP 2.
Your second choice will be what class of shares to buy. The funds offer up to
three classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
[bullet] Receive both dividends and capital gain distributions in additional
shares;
[bullet] Receive dividends in additional shares and capital gain
distributions in cash;
[bullet] Receive dividends in cash and capital gain distributions in
additional shares; or
[bullet] Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
<TABLE>
----------------------------------- ----------------------------------------------------------------------------
<CAPTION>
TO OPEN AN ACCOUNT
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800)243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By telephone exchange Call us at (800)243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
Phoenix Multi-Portfolio Fund 63
<PAGE>
HOW TO SELL SHARES
- --------------------------------------------------------------------------------
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. In the case of a Class B or C Share redemption, you will be
subject to the applicable deferred sales charge, if any, for such shares.
Subject to certain restrictions, shares may be redeemed by telephone or in
writing. In addition, shares may be sold through securities dealers, brokers or
agents who may charge customary commissions or fees for their services. The fund
does not charge any redemption fees. Payment for shares redeemed is made within
seven days; however, redemption proceeds will not be disbursed until each check
used for purchases of shares has been cleared for payment by your bank, which
may take up to 15 days after receipt of the check.
<TABLE>
<CAPTION>
- ------------------------------------ -----------------------------------------------------------------------------
TO SELL SHARES
- ------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.
- ------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301. Be sure to include the registered owner's name, fund and account
number, number of shares or dollar value you wish to sell.
- ------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix
Funds, 66 Brooks Drive, Braintree, MA 02184. Be sure to include the
registered owner's name, fund and account number.
- ------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000 requests can be made by calling (800)243-1574.
- ------------------------------------ -----------------------------------------------------------------------------
By telephone exchange Call us at (800)243-1574 (press 1, then 0).
- ------------------------------------ -----------------------------------------------------------------------------
By Check (Tax-Exempt Bond Fund and If you selected the checkwriting feature, you may write checks for amounts
Emerging Markets Bond Fund only) of $500 or more. Checks may not be used to close an account.
- ------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
- --------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the
64 Phoenix Multi-Portfolio Fund
<PAGE>
fund's net assets. Additional documentation will be required for redemptions by
organizations, fiduciaries, or retirement plans, or if redemption is requested
by anyone but the shareholder(s) of record. Transfers between broker-dealer
"street" accounts are governed by the accepting broker-dealer. Questions
regarding this type of transfer should be directed to your financial advisor.
Redemption requests will not be honored until all required documents in proper
form have been received. To avoid delay in redemption or transfer, shareholders
having questions about specific requirements should contact the fund's Transfer
Agent at (800) 243-1574.
REDEMPTIONS BY MAIL
[arrow] If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instructions if all of these apply:
[bullet] The proceeds do not exceed $50,000.
[bullet] The proceeds are payable to the registered owner at the address on
record.
Send a clear letter of instructions with a signature guarantee when any
of these apply:
[bullet] You are selling more than $50,000 worth of shares.
[bullet] The name or address on the account has changed within the last 60
days.
[bullet] You want the proceeds to go to a different name or address than on
the account.
[arrow] If you are selling shares held in a corporate or fiduciary account,
please contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be by an eligible
guarantor institution as defined by the fund's Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
Phoenix Multi-Portfolio Fund 65
<PAGE>
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
ACCOUNT POLICIES
- --------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, B or C shares, you can purchase Class
A Shares of any fund at net asset value, with no sales charge, by reinvesting
all or part of your proceeds, but not more. Send your written request to State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call us at
(800)243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B shareholders who have had the
contingent deferred sales charge waived because they are in the Systematic
Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should read the prospectus carefully before deciding to make an exchange.
You can obtain a prospectus from your financial advisor or by calling us at
(800)243-4361 or accessing our Web site at www.phoenixinvestments.com.
[bullet] You may exchange shares for another fund in the same class of
shares; e.g., Class A for Class A.
[bullet] Exchanges may be made by phone ((800)243-1574) or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
[bullet] The amount of the exchange must be equal to or greater than the
minimum initial investment required.
[bullet] The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
[bullet] Because excessive trading can hurt fund performance and harm other
shareholders, the fund reserves the right to temporarily or
permanently end exchange privileges or
66 Phoenix Multi-Portfolio Fund
<PAGE>
reject an order from anyone who appears to be attempting to time the
market, including investors who request more than one exchange in
any 30-day period. The fund's underwriter has entered into
agreements with certain timing firms permitting them to exchange by
telephone. These privileges are limited, and the fund distributor
has the right to reject or suspend them.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800)243-4361.
INVESTOR SERVICES
- --------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix Multi-Portfolio Fund 67
<PAGE>
TAX STATUS OF DISTRIBUTIONS
- --------------------------------------------------------------------------------
The fund plans to make distributions from net investment income at intervals
stated on the table below and to distribute net realized capital gains, if any,
at least annually.
- --------------------------------------------------------------------------------
FUND DIVIDEND PAID
- --------------------------------------------------------------------------------
International Fund Semiannually
- --------------------------------------------------------------------------------
Real Estate Securities Fund Quarterly
- --------------------------------------------------------------------------------
Emerging Markets Bond Fund Monthly
- --------------------------------------------------------------------------------
Tax-Exempt Bond Fund Monthly
- --------------------------------------------------------------------------------
After-Tax Growth Fund Annually
- --------------------------------------------------------------------------------
Mid Cap Fund Semiannually
- --------------------------------------------------------------------------------
Distributions of short-term capital gains and net investment income are taxable
to shareholders as ordinary income. Long-term capital gains, if any, distributed
to shareholders and which are designated by the fund as capital gains
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares. The
Tax-Exempt Bond Fund intends to distribute tax-exempt income.
The Tax-Exempt Bond Fund may invest a portion of its assets in securities that
generate income that is not exempt from federal or state income tax. Income
exempt from federal tax may be subject to state and local income tax. Any
capital gains distributed by the Tax-Exempt Bond Fund may be taxable.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
68 Phoenix Multi-Portfolio Fund
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These tables are intended to help you understand the funds' financial
performance for the last five years or since inception. The Phoenix-Seneca
After-Tax Growth Fund is a new fund and as such has no financial performance to
report as of the effective date of this prospectus. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, independent
accountants. Their report, together with the funds' financial statements, are
included in the funds' most recent Annual Report, which is available upon
request.
PHOENIX-ABERDEEN INTERNATIONAL FUND
<TABLE>
CLASS A
-----------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
5/31/99 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.98 $13.89 $14.48 $12.20 $12.63 $11.16
INCOME FROM INVESTMENT OPERATIONS(3)
Net investment income (loss) 0.04(1) 0.06(1) 0.03(1) 0.04(1) 0.03(1) (0.01)
Net realized and unrealized gain 0.65 3.27 1.01 2.28 0.42 1.48
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.69 3.33 1.04 2.32 0.45 1.47
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.03) -- (0.29) -- -- --
Dividends from net realized gains (3.11) (1.24) (1.34) (0.04) (0.88) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.14) (1.24) (1.63) (0.04) (0.88) --
------ ------ ------ ------ ------ ------
Change in net asset value (2.45) 2.09 (0.59) 2.28 (0.43) 1.47
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.53 $15.98 $13.89 $14.48 $12.20 $12.63
====== ====== ====== ====== ====== ======
Total return(2) 4.92%(5) 26.17% 8.21% 19.03% 4.12% 13.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $171,895 $171,463 $131,338 $135,524 $129,352 $167,918
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.46%(4) 1.37% 1.56% 1.57% 1.70% 1.47%
Net investment income (loss) 0.60%(4) 0.40% 0.22% 0.33% 0.23% 0.20%
Portfolio turnover 45%(5) 104% 167% 151% 236% 186%
</TABLE>
- ---------------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) 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.
(4) Annualized.
(5) Not annualized.
Phoenix Multi-Portfolio Fund 69
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-ABERDEEN INTERNATIONAL FUND
<TABLE>
CLASS B
-------------------------------------------------------------------------
<CAPTION>
FROM
SIX MONTHS INCEPTION
ENDED 5/31/99 YEAR ENDED NOVEMBER 30, 7/15/94 TO
(UNAUDITED) 1998 1997 1996 1995 11/30/94
----------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.44 $13.56 $14.22 $12.07 $12.60 $12.80
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) --(1) (0.05)(1) (0.08)(1) (0.05)(1) (0.07)(1) (0.01)
Net realized and unrealized gain (loss) 0.61 3.17 1.00 2.24 0.42 (0.19)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.61 3.12 0.92 2.19 0.35 (0.20)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- (0.24) -- -- --
Dividends from net realized gains (3.11) (1.24) (1.34) (0.04) (0.88) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.11) (1.24) (1.58) (0.04) (0.88) --
------ ------ ------ ------ ------ ------
Change in net asset value (2.50) 1.88 (0.66) 2.15 (0.53) (0.20)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.94 $15.44 $13.56 $14.22 $12.07 $12.60
====== ====== ====== ====== ====== ======
Total return(2) 4.61%(4) 25.17% 7.37% 18.16% 3.28% (1.56)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $19,473 $17,315 $10,159 $6,955 $3,261 $1,991
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.23%(3) 2.11% 2.31% 2.31% 2.50% 1.93%(3)
Net investment income (loss) (0.04)%(3) (0.34)% (0.55)% (0.39)% (0.61)% 0.36%(3)
Portfolio turnover 45%(4) 104% 167% 151% 236% 186%
CLASS C
-------
FROM
INCEPTION
3/30/99 TO
5/31/99
(UNAUDITED)
-----------
Net asset value, beginning of period $12.82
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.02(1)
Net realized and unrealized gain (loss) 0.10
------
TOTAL FROM INVESTMENT OPERATIONS 0.12
------
LESS DISTRIBUTIONS
Dividends from net investment income --
Dividends from net realized gains --
------
TOTAL DISTRIBUTIONS --
------
Change in net asset value 0.12
------
NET ASSET VALUE, END OF PERIOD $12.94
======
Total return(2) 0.94%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $263
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.44%(3)
Net investment income (loss) 1.14%(3)
Portfolio turnover 45%(4)
</TABLE>
- ---------------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) 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.
(4) Annualized.
(5) Not annualized.
70 Phoenix Multi-Portfolio Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
<TABLE>
CLASS A
------------------------------------------------------------------
<CAPTION>
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 3/1/95 TO
(UNAUDITED) 1998 1997 1996 11/30/95
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.25 $16.39 $13.14 $10.72 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.33(4)(5) 0.55(4)(5) 0.49(4)(5) 0.53 (5) 0.43(4)(5)
Net realized and unrealized gain (loss) (0.71) (3.18) 3.52 2.50 0.55
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.04 (2.63) 4.01 3.03 0.98
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.42) (0.44) (0.51) (0.59) (0.26)
------ ------ ------ ------ ------
Dividends from net realized gains -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.42) (1.51) (0.76) (0.61) (0.26)
------ ------ ------ ------ ------
Change in net asset value 0.62 (4.14) 3.25 2.42 0.72
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.87 $12.25 $16.39 $13.14 $10.72
====== ====== ====== ====== ======
Total return(1) 9.04%(3) (17.42)% 31.44% 29.20% 9.87%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $22,220 $24,686 $36,336 $22,872 $13,842
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.30%(2) 1.31% 1.30% 1.30% 1.30%(2)
Net investment income 5.65%(2) 3.79% 3.34% 4.55% 5.79%(2)
Portfolio turnover 8%(3) 11% 54% 24% 9%(3)
</TABLE>
<TABLE>
CLASS B
------------------------------------------------------------------
<CAPTION>
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 3/1/95 TO
(UNAUDITED) 1998 1997 1996 11/30/95
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.19 $16.32 $13.10 $10.68 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.29(4)(6) 0.43(4)(5) 0.38(4)(5) 0.46(5) 0.36(4)(5)
Net realized and unrealized gain (loss) 0.70 (3.15) 3.50 2.47 0.56
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.99 (2.72) 3.88 2.93 0.92
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.38) (0.34) (0.41) (0.49) (0.24)
Dividends from net realized gains -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.38) (1.41) (0.66) (0.51) (0.24)
------ ------ ------ ------ ------
Change in net asset value 0.61 (4.13) 3.22 2.42 0.68
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.80 $12.19 $16.32 $13.10 $10.68
====== ====== ====== ====== ======
Total return(1) 8.64%(3) (18.01)% 30.44% 28.25% 9.21%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $16,557 $18,237 $23,091 $8,259 $2,239
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.05%(2) 2.06% 2.05% 2.05% 2.05%(2)
Net investment income 4.88%(2) 3.07% 2.55% 3.95% 5.03%(2)
Portfolio turnover 8%(3) 11% 54% 24% 9%(3)
</TABLE>
- ---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of $0.02,
$0.04, $0.07 and $0.12, respectively.
(6) Includes reimbursement of operating by investment advisor of $0.07 and
$0.03, respectively.
(7) The ratio of operating expenses to average net assets excludes the effect
of expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
Phoenix Multi-Portfolio Fund 71
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
<TABLE>
CLASS A
------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 9/5/95 TO
(UNAUDITED) 1998 1997 1996 11/30/95
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.20 $12.84 $14.80 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.69 1.32 1.38(4) 1.26(5) 0.25(4)(5)
Net realized and unrealized gain (loss) (0.19) (4.22) 0.17 4.56 0.18
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.50) (2.90) 1.55 5.82 0.43
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.57) (1.00) (1.28) (1.20) (0.25)
Dividends from net realized gains -- (0.23) (2.23) -- --
Distributions in excess of net realized gains -- (1.16) -- -- --
Return of capital -- (0.35) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.57) (2.74) (3.51) (1.20) (0.25)
------ ------ ------ ------ ------
Change in net asset value (0.07) (5.64) (1.96) 4.62 0.18
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.13 $ (7.20) $12.84 $14.80 $10.18
====== ======= ====== ====== ======
Total return(1) 7.66%(3) (27.20)% 11.91% 60.18% 4.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $46,823 $41,725 $67,875 $29,661 $12,149
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.57%(2)(7) 1.43% 1.40%(6) 1.50% 1.50%(2)
Net investment income 20.82%(2) 13.74% 9.90% 10.41% 10.48%(2)
Portfolio turnover 127%(3) 405% 614% 378% 38%(3)
</TABLE>
<TABLE>
CLASS B
------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 9/5/95 TO
(UNAUDITED) 1998 1997 1996 11/30/95
----------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.13 $12.77 $14.78 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.67 1.23 1.26(4) 1.19(5) 0.22(4)(5)
Net realized and unrealized gain (loss) (0.20) (4.18) 0.18 4.53 0.20
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.47 (2.95) 1.44 5.72 0.42
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.54) (0.97) (1.22) (1.12) (0.24)
Dividends from net realized gains -- (0.23) (2.23) -- --
Distributions in excess of net realized gains -- (1.16) -- -- --
Return of capital -- (0.33) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.54) (2.69) (3.45) (1.12) (0.24)
------ ------ ------ ------ ------
Change in net asset value (0.07) (5.64) (2.01) 4.60 0.18
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.06 $7.13 $12.77 $14.78 $10.18
====== ===== ====== ====== ======
Total return(1) 7.16%(3) (27.86)% 11.07% 58.94% 4.22%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $44,673 $37,270 $38,673 $9,713 $596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.32%(2)(7) 2.20% 2.15%(6) 2.25% 2.25%(2)
Net investment income 20.07%(2) 12.98% 9.14% 9.79% 10.29%(2)
Portfolio turnover 127%(3) 405% 614% 378% 38%(3)
</TABLE>
- ---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of $0.07
and $0.03, respectively.
(6) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
72 Phoenix Multi-Portfolio Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
CLASS C
----------------------------
SIX MONTHS
ENDED FROM INCEPTION
5/31/99 3/27/98 TO
(UNAUDITED) 11/30/98
----------- --------
Net asset value, beginning of period $ 7.17 $12.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.66 0.85(4)
Net realized and unrealized gain (loss) (0.20) (5.10)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.46 (4.25)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.54) (0.66)
Dividends from net realized gains -- --
Distributions in excess of net realized gains -- --
Return of capital -- (0.17)
------ ------
TOTAL DISTRIBUTIONS (0.54) (0.83)
------ ------
Change in net asset value (0.08) (5.08)
------ ------
NET ASSET VALUE, END OF PERIOD $ 7.09 $ 7.17
====== ======
Total return(1) 7.12%(3) (35.33)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,534 $1,205
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.33%(2)(5) 2.29%(2)
Net investment income 20.16%(2) 15.59%(2)
Portfolio turnover 127%(3) 405%(3)
- ---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) Includes reimbursement of operating expenses by investment adviser of $0.07
and $0.03, respectively.
(6) The ratio of operating expenses to average net assets excludes the effect of
expense offsets for custodian fees; if expense offsets were included, the
ratio would not significantly differ.
Phoenix Multi-Portfolio Fund 73
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
<TABLE>
CLASS A
------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
5/31/99 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.21 $11.17 $11.28 $11.40 $10.09 $11.58
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.23 0.57 0.59 0.60 0.61 0.65
Net realized and unrealized gain (loss) (0.34) 0.20 0.05 (0.12) 1.34 (1.49)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.11) 0.77 0.64 0.48 1.95 (0.84)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.29) (0.53) (0.59) (0.60) (0.61) (0.65)
Dividends in excess of net
investment income -- (0.11) -- -- -- --
Dividends from net realized gains -- (0.09) (0.16) -- (0.03) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.29) (0.73) (0.75) (0.60) (0.64) (0.65)
------ ------ ------ ------ ------ ------
Change in net asset value (0.40) (0.04) (0.11) (0.12) 1.31 (1.49)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.81 $11.21 $11.17 $11.28 $11.40 $10.09
====== ====== ====== ====== ====== ======
Total return(1) (1.03)(3) 5.75% 6.04% 4.30% 19.87% (7.55)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $99,370 $107,371 $122,763 $136,558 $147,821 $141,623
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.02%(2) 0.97% 0.96% 0.94% 0.97% 0.96%
Net investment income 4.14%(2) 4.77% 5.36% 5.42% 5.65% 5.65%
Portfolio turnover 8%(3) 14% 15% 27% 25% 54%
</TABLE>
<TABLE>
CLASS B
-----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 3/16/94 TO
(UNAUDITED) 1998 1997 1996 1995 11/30/94
----------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.25 $11.22 $11.32 $11.44 $10.12 $11.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.19 0.48 0.50 0.52 0.53 0.39
Net realized and unrealized gain (loss) (0.34) 0.19 0.06 (0.12) 1.35 (1.09)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.15) 0.67 0.56 0.40 1.88 (0.70)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.24) (0.45) (0.50) (0.52) (0.53) (0.39)
Dividends in excess of net
investment income -- (0.10) -- -- -- --
Dividends from net realized gains -- (0.09) (0.16) -- (0.03) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.24) (0.64) (0.66) (0.52) (0.56) (0.39)
------ ------ ------ ------ ------ ------
Change in net asset value (0.39) 0.03 (0.10) (0.12) 1.32 (1.09)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.86 $11.25 $11.22 $11.32 $11.44 $10.12
====== ====== ====== ====== ====== ======
Total return(1) (1.37)%(3) 4.97% 5.13% 3.60% 19.07% (6.42)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,921 $7,001 $5,797 $4,762 $3,142 $1,147
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.77%(2) 1.69% 1.71% 1.69% 1.72% 1.54%(2)
Net investment income 3.40%(2) 3.98% 4.60% 4.68% 4.90% 5.07%(2)
Portfolio turnover 8%(3) 14% 15% 27% 25% 54%(3)
</TABLE>
- ---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
74 Phoenix Multi-Portfolio Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
PHOENIX-SENECA MID CAP FUND
<TABLE>
CLASS A
--------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
5/31/99 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.90 $20.64 $21.65 $22.03 $18.03 $18.70
INCOME FROM INVESTMENT OPERATIONS(3)
Net investment income (loss) (0.11)(1) 0.01 (0.02)(1) (0.03)(1) 0.05(1) 0.11
Net realized and unrealized gain 1.08 1.18 1.52 2.53 4.74 0.10
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.97 1.19 1.50 2.50 4.79 0.21
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.06) (0.10)
Dividends from net realized gains (4.19) (1.93) (2.51) (2.88) (0.73) (0.78)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (4.19) (1.93) (2.51) (2.88) (0.79) (0.88)
------ ------ ------ ------ ------ ------
Change in net asset value (3.22) (0.74) (1.01) (0.38) 4.00 (0.67)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $16.68 $19.90 $20.64 $21.65 $22.03 $18.03
====== ====== ====== ====== ====== ======
Total return(2) 4.63%(4) 6.64% 8.12% 13.52% 27.87% 1.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $258,774 $279,326 $360,053 $451,474 $487,674 $419,760
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.41% 1.30% 1.33% 1.35% 1.42% 1.36%
Net investment income (loss) (0.82)%(3) (0.10)% (0.08)% (0.17)% 0.28% 0.59%
Portfolio turnover 106%(4) 379% 161% 242% 218% 227%
</TABLE>
<TABLE>
CLASS B
-----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/99 YEAR ENDED NOVEMBER 30, 7/18/94 TO
(UNAUDITED) 1998 1997 1996 1995 11/30/94
----------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.18 $20.11 $21.30 $21.85 $17.97 $17.68
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.14)(1) (0.18) (0.16)(1) (0.18)(1) (0.12)(1) (0.01)
Net realized and unrealized gain 1.01 1.18 1.47 2.51 4.75 0.30
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.87 1.00 1.31 2.33 4.63 0.29
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.02) --
Dividends from net realized gains (4.19) (1.93) (2.50) (2.88) (0.73) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (4.19) (1.93) (2.50) (2.88) (0.75) --
------ ------ ------ ------ ------ ------
Change in net asset value (3.32) (0.93) (1.19) (0.55) 3.88 0.29
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.86 $19.18 $20.11 $21.30 $21.85 $17.97
====== ====== ====== ====== ====== ======
Total return(2) 4.27%(4) 5.80% 7.27% 12.75% 26.92% 1.64%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $14,937 $15,688 $18,583 $17,599 $10,908 $1,519
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.16%(3) 2.04% 2.08% 2.11% 2.18% 2.05%(3)
Net investment income (loss) (1.57)%(3) (0.85)% (0.85)% (0.92)% (0.58)% (0.23)%(3)
Portfolio turnover 1.06%(4) 379% 161% 242% 218% 227%(4)
</TABLE>
- ---------------
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) Annualized.
(4) Not annualized.
(5) 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.
Phoenix Multi-Portfolio Fund 75
<PAGE>
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The fund has filed a Statement of Additional Information about the fund, dated
December __, 1999 with the Securities and Exchange Commission. The Statement
contains more detailed information about the fund. It is incorporated into this
prospectus by reference and is legally part of the prospectus. You may obtain a
free copy of the Statement:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
[arrow] through its internet site (http://www.sec.gov),
[arrow] by visiting its Public Reference Room in Washington, DC or
[arrow] by writing to its Public Reference Section, Washington, DC 20549-6009
(a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330.
SHAREHOLDER REPORTS
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the fund's performance from December 1 through November
30. You may request a free copy of the fund's Annual and Semiannual Reports:
[arrow] by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
[arrow] by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 33-19423 and 811-5436 Printed on recycled paper using soybean ink
76 Phoenix Multi-Portfolio Fund
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
PHOENIX-SENECA MID CAP FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
December __, 1999
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Multi-Portfolio Fund (the "Trust"), dated December __, 1999, and should
be read in conjunction with it. The Trust's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 100 Bright Meadow Boulevard, P.O.
Box 2200, Enfield, CT 06083-2200.
TABLE OF CONTENTS
PAGE
THE TRUST ................................................................. 1
INVESTMENT OBJECTIVES AND POLICIES ........................................ 1
INVESTMENT RESTRICTIONS ................................................... 14
PERFORMANCE ............................................................... 15
PERFORMANCE COMPARISONS ................................................... 17
PORTFOLIO TURNOVER ........................................................ 17
PORTFOLIO TRANSACTIONS .................................................... 17
THE INVESTMENT ADVISERS ................................................... 18
DETERMINATION OF NET ASSET VALUE .......................................... 20
HOW TO BUY SHARES ......................................................... 21
ALTERNATIVE PURCHASE ARRANGEMENTS ......................................... 21
INVESTOR ACCOUNT SERVICES ................................................. 24
HOW TO REDEEM SHARES ...................................................... 25
TAX SHELTERED RETIREMENT PLANS ............................................ 26
DIVIDENDS, DISTRIBUTIONS AND TAXES ........................................ 27
THE DISTRIBUTOR ........................................................... 30
DISTRIBUTION PLANS......................................................... 31
MANAGEMENT OF THE TRUST.................................................... 32
ADDITIONAL INFORMATION .................................................... 39
APPENDIX................................................................... 41
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
PXP468 (12/99)
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THE TRUST
Phoenix Multi-Portfolio Fund (the "Trust") is an open-end management
investment company which was organized under Massachusetts law in 1987 as a
Massachusetts business trust.
The Trust's Prospectus describes the investment objectives of the
Phoenix-Goodwin Tax-Exempt Bond Fund (the "Bond Fund"), the Phoenix-Seneca Mid
Cap Fund (the "Mid Cap Fund"), the Phoenix-Aberdeen International Fund (the
"International Fund"), the Phoenix-Goodwin Emerging Markets Bond Fund (the
"Emerging Markets Fund"), the Phoenix-Duff & Phelps Real Estate Securities Fund
(the "Real Estate Fund"), the Phoenix-Seneca After-Tax Growth Fund (the
"After-Tax Growth Fund"), (each, a "Fund" and, together, the "Funds"), five of
the Funds currently offered by the Trust, and summarizes the investment policies
and investment techniques each Fund will employ in seeking to achieve its
investment objective. The following discussion supplements the description of
the Funds' investment policies and investment techniques in the Prospectus.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is deemed to be a fundamental policy
and may not be changed without the approval of the shareholders of that Fund.
Investment restrictions described in this Statement of Additional Information
are fundamental policies of the Trust and may not be changed as to any Fund
without the approval of such Fund's shareholders.
MUNICIPAL SECURITIES
As described more fully in the Prospectus, the Bond Fund intends under normal
conditions to invest at least 80% of its net assets in municipal securities. As
used in the Prospectus and this Statement of Additional Information, the term
"municipal securities" means obligations, including municipal bonds and notes
and tax-exempt commercial paper, issued by or on behalf of states, territories
and possessions of the United States, the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest from which
is, in the opinion of counsel to the issuers of such securities, exempt from
federal income tax. To the extent that an investment in municipal securities
does not run counter to any of the investment policies of the Bond Fund or any
of the investment restrictions to which the Bond Fund is subject, the Bond Fund
may invest in any combination of the various types of municipal securities
described below which, in the judgment of Phoenix Investment Counsel, Inc.
("PIC"), the investment adviser to the Bond, Mid Cap and International Funds
will contribute to the attainment of the Bond Fund's investment objective. Such
combination of municipal securities may vary from time to time. The two
principal classes of municipal securities are municipal bonds and municipal
notes.
Municipal Bonds. Municipal bonds, which meet longer term capital needs and
generally have maturities of more than one year when issued, have two principal
classifications: general obligation bonds and revenue bonds. Another type of
municipal bond is referred to as an industrial development bond. These three are
discussed below.
General Obligation Bonds. Issuers of general obligation bonds include states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind general obligation bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.
Revenue Bonds. The principal security for a revenue bond is generally the net
revenues derived from a particular facility, group of facilities, or, in some
cases, the proceeds of a special excise or other specific revenue source.
Revenue bonds are issued to finance a wide variety of capital projects
including: electric, gas, water and sewer systems; highways, bridges, and
tunnels; port and airport facilities; colleges and universities; and hospitals.
Although the principal security behind these bonds may vary, many provide
additional security in the form of a debt service reserve fund whose money may
be used to make principal and interest payments on the issuer's obligations.
Housing finance authorities have a wide range of security, including partially
or fully insured mortgages, rent subsidized and/or collateralized mortgages,
and/or the net revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability (without obligation)
to make up deficiencies in the debt service reserve fund.
Industrial Development Bonds. Industrial development bonds, which are
considered municipal bonds if the interest paid is exempt from federal income
tax, are issued by or on behalf of public authorities to raise money to finance
various privately operated facilities for business and manufacturing, housing,
sports arenas and pollution control. These bonds are also used to finance public
facilities such as airports, mass transit systems, ports and parking. The
payment of the principal and interest on such bonds is dependent solely on the
ability of the facility's user to meet its financial obligations and the pledge,
if any, of real and personal property so financed as security for such payment.
Municipal Notes. Municipal notes generally are used to provide for short-term
working capital needs and generally have maturities of one year or less.
Municipal notes include:
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Tax Anticipation Notes. Tax anticipation notes are issued to finance working
capital needs of municipalities. Generally, they are issued in anticipation of
various seasonal tax revenue, such as income, sales, use and business taxes, and
are payable from these specific future taxes.
Revenue Anticipation Notes. Revenue anticipation notes are issued in
expectation of receipt of other types of revenue, such as federal revenues
available under federal revenue sharing programs.
Bond Anticipation Notes. Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the notes.
Construction Loan Notes. Construction loan notes are sold to provide
construction financing. After successful completion and acceptance, many
projects receive permanent financing through the Federal Housing Administration
under "Fannie Mae" (the Federal National Mortgage Association) or "Ginnie Mae"
(the Government National Mortgage Association).
Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-term
obligation with a stated maturity of 365 days or less. It is issued by state and
local governments or their agencies to finance seasonal working capital needs or
as short-term financing in anticipation of longer-term financing.
In addition, other types of municipal securities similar to the
above-described municipal bonds and municipal notes are, or may become,
available. For the purpose of the Trust's investment restrictions set forth in
this Statement of Additional Information, the identification of the "issuer" of
a municipal security which is not a general obligation bond is made by PIC on
the basis of the characteristics of the obligation, the most significant of
which is the source of funds for the payment of principal and interest on such
security.
RISKS RELATING TO MUNICIPAL SECURITIES
There can be no assurance that the Bond Fund will achieve its investment
objective. Yields on municipal securities are dependent on a variety of factors,
including the general conditions of the money market and the municipal bond
market, the size of a particular offering, the maturity of the obligations and
the rating of the issue. Municipal securities with longer maturities tend to
produce higher yields and are generally subject to potentially greater capital
appreciation and depreciation than obligations with shorter maturities and lower
yields. The market prices of municipal securities usually vary, depending upon
available yields. An increase in interest rates will generally reduce the value
of portfolio investments, and a decline in interest rates will generally
increase the value of portfolio investments. The ability of the Fund to achieve
its investment objective is also dependent on the continuing ability of the
issuers of municipal securities in which the Fund invests to meet their
obligations for the payment of interest and principal when due. The ratings of
Moody's and Standard & Poor's represent their opinions as to the quality of
municipal securities which they undertake to rate. Ratings are not absolute
standards of quality; consequently, municipal securities with the same maturity,
coupon, and rating may have different yields. There are variations in municipal
securities, both within a particular classification and between classifications,
depending on numerous factors. It should also be pointed out that, unlike other
types of investments, municipal securities have traditionally not been subject
to regulation by, or registration with, the Securities and Exchange Commission
(the "Commission"), although there have been proposals which would provide for
such regulation in the future.
The federal bankruptcy statutes relating to the debts of political
subdivisions and authorities of states of the United States provide that, in
certain circumstances, such subdivisions or authorities may be authorized to
initiate bankruptcy proceedings without prior notice to or consent of creditors,
which proceedings could result in material and adverse changes in the rights of
holders of their obligations.
Lawsuits challenging the validity under state constitutions of present
systems of financing public education have been initiated or adjusted in a
number of states, and legislation has been introduced to effect changes in
public school financing in some states. In other instances there have been
lawsuits challenging the issuance of pollution control revenue bonds or the
validity of their issuance under state or federal law which could ultimately
affect the validity of those municipal securities or the tax-free nature of the
interest thereon.
VARIABLE AND FLOATING RATE SECURITIES
Some municipal securities bear rates of interest that are adjusted
periodically according to formulae intended to minimize fluctuation in values of
floating rate instruments. Variable rate instruments are those whose terms
provide for automatic establishment of a new interest rate on set dates.
Floating rate instruments are those whose terms provide for automatic adjustment
of their interest rates whenever some specified interest rate changes. Variable
rate and floating rate instruments will be referred to collectively as "Variable
Rate Securities." The interest rate on Variable Rate Securities is ordinarily
determined by reference to, or is a percentage of, a bank's prime rate, the
90-day U.S. Treasury Bill rate, the rate of return on commercial paper or bank
certificates of deposit, an index of short-term, tax-exempt rates, or some
objective standard. Generally, the changes in the interest rate on Variable Rate
Securities reduce the fluctuation in the market value of such securities.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than for fixed-rate obligations.
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Variable Rate Demand Securities are Variable Rate Securities which have
demand features entitling the purchaser to resell the securities to the issuer
at an amount approximately equal to amortized cost or the principal amount
thereof plus accrued interest, which may be more or less than the price the Bond
Fund paid for them. The interest rate on Variable Rate Demand Securities also
varies either according to some objective standard, such as an index of
short-term, tax-exempt rates, or according to rates set by or on behalf of the
issuer.
TAXABLE SECURITIES
The income from investments (either in the form of dividends or interest)
made by the Mid Cap Fund and the International Fund are expected to be taxable
as ordinary income.
The Bond Fund may also invest a portion of its net assets (up to 20% under
normal conditions and more under extraordinary circumstances, as described in
the Prospectus) in taxable securities.
Interest earned on investments in taxable securities may be taxable to
shareholders as ordinary income. Investors should be aware that investments in
taxable securities by the Bond Fund are restricted to:
U.S. Government Securities--obligations issued or guaranteed by the U.S.
Government, its agencies, authorities or instrumentalities (collectively
referred to as "U.S. Government" issues). Some of these securities are supported
by the full faith and credit of the U.S. Government; others are supported by the
right of the issuer to borrow from the U.S. Treasury; and the remainder are
supported only by the credit of the instrumentality.
Bank Obligations--certificates of deposit, bankers' acceptances, and other
short-term obligations of U.S. banks which at the date of the investment have
capital, surplus and undivided profits in excess of $100,000,000 as of the date
of their most recently published financial statements.
Commercial Paper--commercial paper which at the date of the investment is
rated P-l by Moody's Investors Service, Inc. or A-1 by Standard & Poor's
Corporation or, if not rated, is issued by a company which at the date of the
investment has an outstanding debt issue rated Aa or higher by Moody's or AA or
higher by Standard & Poor's.
Corporate Debt Securities--corporate debt securities which at the date of the
investment are rated Aa or higher by Moody's or AA or higher by Standard &
Poor's.
Repurchase Agreements--repurchase agreements with respect to any of the
foregoing.
The Bond Fund also has the right to hold cash reserves as the Adviser deems
necessary. For example, a Fund may invest in money market securities or hold
cash pending investment of proceeds from sales of its shares or from the sale of
portfolio securities and/or in anticipation of redemptions.
RATINGS
If the rating of a security purchased by a Fund is subsequently reduced below
the minimum rating required for purchase or a security purchased by the Fund
ceases to be rated, neither event will require the sale of the security.
However, the Adviser, as applicable, will consider any such event in determining
whether the Fund should continue to hold the security. To the extent that
ratings established by Moody's or Standard & Poor's may change as a result of
changes in such organizations or their rating systems, the Funds will invest in
securities which are deemed by the Fund's adviser to be of comparable quality to
securities whose current ratings render them eligible for purchase by the Fund.
RISKS OF HIGH YIELD BONDS
The Mid Cap and International Funds may invest up to 10% and 20%,
respectively, of their total assets in bonds considered to be less than
investment-grade, commonly known as "junk" bonds. The Emerging Markets Fund may
invest up to 100% of their total assets in these bonds. The Mid Cap and
International Funds did not invest in any bonds considered less than
investment-grade for the fiscal year ended November 30, 1998.
While management will seek to minimize risk through diversification and
continual evaluation of current developments in interest rates and economic
conditions, the market prices of lower-rated securities generally fluctuate more
than those of higher rated securities. Using credit ratings helps to evaluate
the safety of principal and interest payments but does not assess market risk.
Fluctuations in the market value of portfolio securities subsequent to
acquisition by the Funds will not normally affect cash income from such
securities but will be reflected in the Fund's net asset value. Additionally,
with lower-rated securities, there is a greater possibility that an adverse
change in the financial condition of the issuer, particularly a highly-leveraged
issuer, may affect its ability to make payments of income and principal and
increase the expenses of the Fund seeking recovery from the issuer. Also, to the
extent that the Fund invests in securities in the lower rating categories, the
achievement of its goals will be more dependent on management's ability than
would be the case if it were only investing in securities in the higher rating
categories. Lower-rated securities may be thinly traded and therefore harder to
value and more susceptible to adverse publicity concerning the issuer.
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WRITING AND PURCHASING OPTIONS ON SECURITIES AND SECURITIES INDICES
The Bond, Mid Cap, International and Emerging Markets Funds may engage in
option transactions.
Call options on securities and securities indices written by the Funds
normally will have expiration dates between three and nine months from the date
written. The exercise price of a call option written by a Fund utilizing this
investment technique may be below, equal to or above the current market value of
the underlying security or securities index at the time the option is written.
During the option period, a Fund utilizing this investment technique may be
assigned an exercise notice by the broker-dealer through which the call option
was sold, requiring the Fund to deliver the underlying security (or cash in the
case of securities index calls) against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at such
earlier time as the Fund effects a closing purchase transaction. A closing
purchase transaction cannot be effected with respect to an option once the Fund
has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/ Silver Index.
The Mid Cap and International Funds may write call options and purchase call and
put options on these and any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by a Fund, to prevent an underlying
security from being called, or to enable the Fund to write another call option
with either a different exercise price or expiration date or both. A Fund may
realize a net gain or loss from a closing purchase transaction, depending upon
whether the amount of the premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. If a call option
written by a Fund expires unexercised, the Fund will realize a gain in the
amount of the premium on the option less the commission paid.
The option activities of a Fund may increase its portfolio turnover rate and
the amount of brokerage commissions paid. A Fund will pay a commission each time
it purchases or sells a security in connection with the exercise of an option.
These commissions may be higher than those which would apply to purchases and
sales of securities directly.
OVER-THE-COUNTER OPTIONS
The Mid Cap Fund, International and Emerging Markets Funds may deal in
over-the-counter options ("OTC options"). PIC understands the position of the
staff of the Commission to be that purchased OTC options and the assets used in
"cover" for written OTC options are illiquid securities. The Funds have adopted
procedures for engaging in OTC options for the purpose of reducing any potential
adverse effect of such transactions upon the liquidity of a Fund. A brief
description of such procedures is set forth below.
The Mid Cap, International and Emerging Markets Funds will engage in OTC
options transactions only with dealers that meet certain credit and other
criteria. The Funds and PIC believe that the approved dealers present minimal
credit risks to the Funds and, therefore, should be able to enter into closing
transactions if necessary. A Fund currently will not engage in OTC options
transactions if the amount invested by the Fund in OTC options, plus a
"liquidity charge" related to OTC options written by the Fund (as described
below) plus the amount invested by the Fund in other illiquid securities, would
exceed 10% of the Fund's total assets. The "liquidity charge" referred to above
is computed as described below.
The Funds anticipate entering into agreements with dealers to which the Funds
sell OTC options. Under these agreements the Funds would have the absolute right
to repurchase the OTC options from the dealer at any time at a price no greater
than a price established under the agreements (the "Repurchase Price"). The
"liquidity charge" referred to above for a specific OTC option transaction will
be the Repurchase Price related to the OTC option less the intrinsic value of
the OTC option. The intrinsic value of an OTC call option for such purposes will
be the amount by which the current market value of the underlying security
exceeds the exercise price. In the case of an OTC put option, intrinsic value
will be the amount by which the exercise price exceeds the current market value
of the underlying security. If there is no such agreement requiring a dealer to
allow the Funds to repurchase a specific OTC option written by the Funds, the
"liquidity charge" will be the current market value of the assets serving as
"cover" for such OTC option.
LIMITATIONS ON OPTIONS ON SECURITIES AND SECURITIES INDICES
The Bond, Mid Cap, International and Emerging Markets Funds may write call
options only if they are covered and remain covered for as long as the Fund is
obligated as a writer. Thus, if a Fund utilizing this investment technique
writes a call option on an individual security, the Fund must own the underlying
security or other securities that are acceptable for a pledged account at all
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times during the option period. The Funds will write call options on indices
only to hedge in an economically appropriate way portfolio securities which are
not otherwise hedged with options or financial futures contracts. Call options
on securities indices written by a Fund will be "covered" by identifying the
specific portfolio securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in a pledged account in accordance with
clearing corporation and exchange rules.
In the case of an index call option written by a Fund, the Fund will be
required to deposit qualified securities. A "qualified security" is a security
against which the Fund has not written a call option and which has not been
hedged by the Fund by the sale of a financial futures contract. If at the close
of business on any day the market value of the qualified securities falls below
100% of the current index value times the multiplier times the number of
contracts, the Fund will deposit an amount of cash, U.S. Government Securities
or other liquid high quality debt obligations equal in value to the difference.
In addition, when the Fund writes a call on an index which is "in-the-money" at
the time the call is written, the Fund will pledge with the Trust's custodian
bank cash, U.S. Government securities or other liquid high quality debt
obligations equal in value to the amount by which the call is "in-the-money"
times the multiplier times the number of contracts. Any amount otherwise pledged
may be applied to the Fund's other obligations to pledge assets in the event
that the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts.
Each Fund utilizing this investment technique may invest up to 5% of its
total assets in exchange-traded call and put options on securities and
securities indices. A Fund may sell a call option or a put option which it has
previously purchased prior to the purchase (in the case of a call) or the sale
(in the case of a put) of the underlying security. Any such sale of a call
option or a put option would result in a net gain or loss, depending on whether
the amount received on the sale is more or less than the premium and other
transaction costs paid.
In connection with a Fund's qualifying as a regulated investment company
under the Internal Revenue Code of 1986, other restrictions on the Fund's
ability to enter into option transactions may apply from time to time. See
"Dividends, Distributions and Taxes."
RISKS RELATING TO OPTIONS ON SECURITIES
During the option period, the writer of a call option has, in return for the
premium received on the option, given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline. The writer has no control over the time within the
option period when it may be required to fulfill its obligation as a writer of
the option.
The risk of purchasing a call option or a put option is that the Fund
utilizing this investment technique may lose the premium it paid plus
transaction costs, if the Fund does not exercise the option and is unable to
close out the position prior to expiration of the option.
An option position may be closed out on an exchange only if the exchange
provides a secondary market for an option of the same series. Although the Funds
utilizing this investment technique will write and purchase options only when
PIC believes that a liquid secondary market will exist for options of the same
series, there can be no assurance that a liquid secondary market will exist for
a particular option at a particular time and that any Fund, if it so desires,
can close out its position by effecting a closing transaction. If the writer of
a covered call option is unable to effect a closing purchase transaction, it
cannot sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call writer may not be able to sell the
underlying security at a time when it might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options in
general or of particular options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. PIC believes that the position limits established by
the exchanges will not have any adverse impact upon the Funds.
RISKS OF OPTIONS ON SECURITIES INDICES
Because the value of an index option depends upon movements in the level of
the index rather than movements in the price of a particular security, whether a
Fund utilizing this investment technique will realize a gain or loss on the
purchase or sale of an option on an index depends upon movements in the level of
prices in the market generally or in an industry or market segment (depending on
the index option in question) rather than upon movements in the price of an
individual security. Accordingly, successful use by a Fund of options on indices
will be subject to PIC's ability to predict correctly movements in the direction
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of the market generally or in the direction of a particular industry. This
requires different skills and techniques than predicting changes in the prices
of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, a Fund utilizing this
investment technique would not be able to close out options which it had written
or purchased and, if restrictions on exercise were imposed, might be unable to
exercise an option it purchased, which would result in substantial losses to the
Fund. However, it is the Trust's policy to write or purchase options only on
indices which include a sufficient number of securities so that the likelihood
of a trading halt in the index is minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Funds will write call options only on indices which meet the
interim described above.
Price movements in securities held by a Fund utilizing this investment
technique will not correlate perfectly with movements in the level of the index
and, therefore, the Fund bears the risk that the price of the securities held by
the Fund might not increase as much as the level of the index. In this event,
the Fund would bear a loss on the call which would not be completely offset by
movements in the prices of the securities held by the Fund. It is also possible
that the index might rise when the value of the securities held by the Fund does
not. If this occurred, the Fund would experience a loss on the call which would
not be offset by an increase in the value of its portfolio and might also
experience a loss in the market value of its portfolio securities.
Unless a Fund utilizing this investment technique has other liquid assets
which are sufficient to satisfy the exercise of a call on an index, the Fund
will be required to liquidate securities in order to satisfy the exercise.
Because an exercise must be settled within hours after receiving the notice of
exercise, if the Fund fails to anticipate an exercise, it may have to borrow
from a bank (in an amount not exceeding 10% of the Fund's total assets) pending
settlement of the sale of securities in its portfolio and pay interest on such
borrowing.
When a Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell its securities. As with options
on its securities, the Fund will not learn that a call has been exercised until
the day following the exercise date but, unlike a call on a security where the
Fund would be able to deliver the underlying security in settlement, the Fund
may have to sell some of its securities in order to make settlement in cash, and
the price of such securities may decline before they can be sold.
If a Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" the Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although the Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS
The Bond, Mid Cap, International and Emerging Markets Funds may use financial
futures contracts and related options to hedge against changes in the market
value of their portfolio securities or securities which they intend to purchase.
The Mid Cap, International and Emerging Markets Funds may use foreign currency
futures contracts to hedge against changes in the value of foreign currencies.
(See "Foreign Currency Transactions" below.) Hedging is accomplished when an
investor takes a position in the futures market opposite to the investor's cash
market position. There are two types of hedges--long (or buying) and short (or
selling) hedges. Historically, prices in the futures market have tended to move
in concert with (although in inverse relation to) cash market prices, and prices
in the futures market have maintained a fairly predictable relationship to
prices in the cash market. Thus, a decline in the market value of securities or
the value of foreign currencies may be protected against to a considerable
extent by gains realized on futures contracts sales. Similarly, it is possible
to protect against an increase in the market price of securities which the Fund
utilizing this investment technique may wish to purchase in the future by
purchasing futures contracts.
The Bond, Mid Cap, International and Emerging Markets Funds may purchase or
sell any financial futures contracts which are traded on a recognized exchange
or board of trade and may purchase exchange- or board-traded put and call
options on financial futures contracts as a hedge against anticipated changes in
the market value of its portfolio securities or securities which it intends to
purchase. Financial futures contracts consist of interest rate futures
contracts, securities index futures contracts and foreign currency futures
contracts. A public market presently exists in interest rate futures contracts
covering long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S.
Treasury bills and GNMA certificates. Securities index futures contracts
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are currently traded with respect to the Standard & Poor's 500 Composite Stock
Price Index and such other broad-based stock market indices as the New York
Stock Exchange Composite Stock Index and the Value Line Composite Stock Price
Index. A clearing corporation associated with the exchange or board of trade on
which a financial futures contract trades assumes responsibility for the
completion of transactions and also guarantees that open futures contracts will
be performed.
In contrast to the situation in which a Fund purchases or sells a security,
no security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract (although an obligation to deliver or receive the
underlying security in the future is created by such a contract). Initially,
when it enters into a financial futures contract, a Fund utilizing this
investment technique will be required to deposit in a pledged account with the
Trust's custodian bank with respect to such Fund an amount of cash or U.S.
Treasury bills. This amount is known as an initial margin and is in the nature
of a performance bond or good faith deposit on the contract. The current initial
margin deposit required per contract is approximately 5% of the contract amount.
Brokers may establish deposit requirements higher than this minimum. However,
subsequent payments, called variation margin, will be made to and from the
account on a daily basis as the price of the futures contract fluctuates. This
process is known as marking to market.
The writer of an option on a futures contract is required to deposit a margin
balance pursuant to requirements similar to those applicable to futures
contracts. Upon exercise of an option on a futures contract, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
The Funds utilizing this investment technique will pay commissions on
financial futures contracts and related options transactions. These commissions
may be higher than those which would apply to purchases and sales of securities
directly, and will be in addition to those paid for direct purchases and sales
of securities.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS
The Funds utilizing this investment technique may not engage in transactions
in financial futures contracts or related options for speculative purposes but
only as a hedge against anticipated changes in the market value of portfolio
securities or securities which it intends to purchase or foreign currencies. A
Fund utilizing this investment technique may not purchase or sell financial
futures contracts or related options if, immediately thereafter, the sum of the
amount of initial margin deposits on the Fund's existing futures and related
options positions and the premiums paid for related options would exceed 5% of
the market value of the Fund's total assets after taking into account unrealized
profits and losses on any such contracts. At the time of purchase of a futures
contract or a call option on a futures contract, any asset, including equity
securities and non-investment-grade debt so long as the asset is liquid,
unencumbered and marked to market daily equal to the market value of the futures
contract minus the Fund's initial margin deposit with respect thereto will be
deposited in a pledged account with the Trust's custodian bank with respect to
such Fund to collateralize fully the position and thereby ensure that it is not
leveraged.
The extent to which a Fund may enter into financial futures contracts and
related options also may be limited by the requirements of the Internal Revenue
Code of 1986 for qualification as a regulated investment company. See
"Dividends, Distributions and Taxes."
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS
Positions in futures contracts and related options may be closed out on an
exchange if the exchange provides a secondary market for such contracts or
options. A Fund utilizing this investment technique will enter into a futures or
futures related option position only if there appears to be a liquid secondary
market. However, there can be no assurance that a liquid secondary market will
exist for any particular option or futures contract at any specific time. Thus,
it may not be possible to close out a futures or related option position. In the
case of a futures position, in the event of adverse price movements the Fund
would continue to be required to make daily margin payments. In this situation,
if the Fund has insufficient cash to meet daily margin requirements it may have
to sell portfolio securities to meet its margin obligations at a time when it
may be disadvantageous to do so. In addition, the Fund may be required to take
or make delivery of the securities underlying the futures contracts it holds.
The inability to close out futures positions also could have an adverse impact
on the Fund's ability to hedge its positions effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also limit a hedger's opportunity to benefit fully from
favorable market
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movement. In addition, investing in futures contracts and options on futures
contracts will cause a Fund to incur additional brokerage commissions and may
cause an increase in a Fund's turnover rate.
The successful use of futures contracts and related options depends on the
ability of the Adviser to forecast correctly the direction and extent of market
movements within a given time frame. To the extent market prices remain stable
during the period a futures contract or option is held by a Fund or such prices
move in a direction opposite to that anticipated, the Fund may realize a loss on
the hedging transaction which is not offset by an increase in the value of its
portfolio securities. As a result, the Fund's total return for the period may be
less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by a Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities or currencies which are being hedged. If the price of
the futures contract moves more or less than the price of the securities or
currency being hedged, the Fund will experience a gain or loss which will not be
completely offset by movements in the price of the securities or currency. It is
possible that, where a Fund has sold futures contracts to hedge against decline
in the market, the market may advance and the value of securities held in the
Fund or the currencies in which its foreign securities are denominated may
decline. If this occurred, the Fund would lose money on the futures contract and
would also experience a decline in value in its portfolio securities. Where
futures are purchased to hedge against a possible increase in the prices of
securities or foreign currencies before the Fund is able to invest its cash (or
cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline; if the Fund then determines not to invest
in securities (or options) at that time because of concern as to possible
further market decline or for other reasons, the Fund will realize a loss on the
futures that would not be offset by a reduction in the price of the securities
purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such cases,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities or
currencies rather than to engage in closing transactions because such action
would reduce the liquidity of the futures market. In addition, because, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the underlying securities market,
increased participation by speculators in the futures market could cause
temporary price distortions. Because of the possibility of price distortions in
the futures market and of the imperfect correlation between movements in the
prices of securities or foreign currencies and movements in the prices of
futures contracts, a correct forecast of market trends may still not result in a
successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund (i.e., the loss
of the premium paid) while the purchase or sale of the futures contract would
not have resulted in a loss, such as when there is no movement in the price of
the underlying securities.
REPURCHASE AGREEMENTS
Repurchase agreements will be entered into only with commercial banks,
brokers and dealers considered by the Trust to be creditworthy. The Trustees of
the Trust will monitor each Fund's repurchase agreement transactions
periodically and, with the Funds' investment advisers, will consider standards
which the investment advisers will use in reviewing the creditworthiness of any
party to a repurchase agreement with a Fund. No more than an aggregate of 10% of
a Fund's total assets, at the time of investment, will be invested in repurchase
agreements having maturities longer than seven days and other investments
subject to legal or contractual restrictions on resale, or for which there are
not readily available market quotations.
The use of repurchase agreements involves certain risks. For example, if the
seller under a repurchase agreement defaults on its obligation to repurchase the
underlying instrument at a time when the value of the instrument has declined, a
Fund may incur a loss upon its disposition. If the seller becomes insolvent and
subject to liquidation or reorganization under bankruptcy or other laws, a
bankruptcy court may determine that the underlying instrument is collateral for
a loan by the Fund and therefore is subject to sale by the trustee in
bankruptcy. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying instrument. While the Trustees of
the Trust acknowledge these risks, it is expected that they can be controlled
through careful structuring of repurchase agreement transactions to meet
requirements for treatment as a purchase and sale under the bankruptcy laws and
through monitoring procedures designed to assure the creditworthiness of
counterparties to such transactions.
LENDING PORTFOLIO SECURITIES
The Funds may lend portfolio securities to broker-dealers and other financial
institutions in amounts up to 25% of the market or other fair value for its
total assets, provided that such loans are callable at any time by the Fund
utilizing this investment technique and are at all times secured by collateral
held by the Fund at least equal to the market value, determined daily, of the
loaned securities. The Fund utilizing this investment technique will continue to
receive any income on the loaned securities, and
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at the same time will earn interest on cash collateral (which will be invested
in short-term debt obligations) or a securities lending fee in the case of
collateral in the form of U.S. Government securities. A loan may be terminated
at any time by either the Fund or the borrower. Upon termination of a loan, the
borrower will be required to return the securities to the Fund, and any gain or
loss in the market price during the period of the loan would accrue to the Fund.
If the borrower fails to maintain the requisite amount of collateral, the loan
will automatically terminate, and the Fund may use the collateral to replace the
loaned securities while holding the borrower liable for any excess of the
replacement cost over the amount of the collateral.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, in order to exercise such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan. The Fund may pay reasonable finders,
administrative and custodial fees in connection with loans of its portfolio
securities.
As with any extension of credit, there are risks of delay in recovery of the
loaned securities and in some cases loss of rights in the collateral should the
borrower of the securities fail financially. However, loans of portfolio
securities will be made only to firms considered by the Trust to be creditworthy
and when the Adviser believes the consideration to be earned justifies the
attendant risks.
WHEN-ISSUED SECURITIES
New issues of municipal and emerging market securities are often offered on a
when-issued basis, that is, delivery and payment for the securities normally
takes place 15 to 45 days or more after the date of the commitment to purchase.
The payment obligation and the interest rate that will be received on the
securities are each fixed at the time the buyer enters into the commitment. The
Bond and Emerging Markets Funds will generally make a commitment to purchase
such securities with the intention of actually acquiring the securities.
However, the Funds may sell these securities before the settlement date if it is
deemed advisable as a matter of investment strategy. When the Bond and Emerging
Markets Funds purchase securities on a when-issued basis, cash or liquid high
quality debt securities equal in value to commitments for the when-issued
securities will be deposited in a segregated account with the Trust's custodian
bank. Such segregated securities either will mature or, if necessary, be sold on
or before the settlement date.
Securities purchased on a when-issued basis and the securities held in the
Bond and Emerging Markets Funds are subject to changes in market value based
upon the public perception of the creditworthiness of the issuer and changes in
the level of interest rates which will generally result in similar changes in
value; i.e., both experiencing appreciation when interest rates decline and
depreciation when interest rates rise. Therefore, to the extent the Bond and
Emerging Markets Funds remain substantially fully invested at the same time that
they have purchased securities on a when-issued basis, there will be greater
fluctuations in the net asset values than if the Funds merely set aside cash to
pay for when-issued securities. In addition, there will be a greater potential
for the realization of capital gains, which are not exempt from federal income
taxation. When the time comes to pay for when-issued securities, the Bond and
Emerging Markets Funds will meet their obligations from then available cash
flow, the sale of securities or, although it would not normally expect to do so,
from the sale of the when-issued securities themselves (which may have a value
greater or less than the payment obligation). The policies described in this
paragraph are not fundamental and may be changed without shareholder approval.
FOREIGN CURRENCY TRANSACTIONS
The Mid Cap, International and Emerging Markets Funds (each a "Foreign
Currency Fund") each may engage in foreign currency transactions, although the
Mid Cap Fund has no present intention of doing so. The following is a
description of these transactions.
Forward Foreign Currency Exchange Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days ("term") from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded directly between currency traders (usually
large commercial banks) and their customers.
No Fund will enter into such forward contracts or maintain a net exposure in
such contracts where it would be obligated to deliver an amount of foreign
currency in excess of the value of its portfolio securities and other assets
denominated in that currency. The Adviser believes that it is important to have
the flexibility to enter into such forward contracts when it determines that to
do so is in the best interests of a Fund. The Trust's custodian banks will
segregate any asset, including equity securities and non-investment-grade debt
so long as the asset is liquid, unencumbered and marked to market daily in an
amount not less than the value of a Foreign Currency Fund's total assets
committed to forward foreign currency exchange contracts entered into for the
purchase of a foreign currency. If the value of the securities segregated
declines, additional cash or securities will be added so that the segregated
amount is not less than the amount of the Foreign Currency Fund's commitments
with respect to such contracts. Generally, the Foreign Currency Funds do not
enter into forward contracts with terms longer than one year.
Foreign Currency Options. A foreign currency option provides the option buyer
with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right,
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but not the obligation, to buy the currency, while a put option gives its owner
the right, but not the obligation, to sell the currency. The option seller
(writer) is obligated to fulfill the terms of the option sold if it is
exercised. However, either seller or buyer may close its position during the
option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect a Foreign Currency Fund against an adverse
movement in the value of a foreign currency, it does not limit the gain which
might result from a favorable movement in the value of such currency. For
example, if a Foreign Currency Fund were holding securities denominated in an
appreciating foreign currency and had purchased a foreign currency put to hedge
against a decline in the value of the currency, it would not have to exercise
its put. Similarly, if a Foreign Currency Fund had entered into a contract to
purchase a security denominated in a foreign currency and had purchased a
foreign currency call to hedge against a rise in the value of the currency but
instead the currency had depreciated in value between the date of purchase and
the settlement date, the Foreign Currency Fund would not have to exercise its
call but could acquire in the spot market the amount of foreign currency needed
for settlement.
Foreign Currency Futures Transactions. Each Foreign Currency Fund may use
foreign currency futures contracts and options on such futures contracts.
Through the purchase or sale of such contracts, a Foreign Currency Fund may be
able to achieve many of the same objectives attainable through the use of
foreign currency forward contracts, but more effectively and possibly at a lower
cost.
Unlike forward foreign currency exchange contracts, foreign currency futures
contracts and options on foreign currency futures contracts are standardized as
to amount and delivery period and are traded on boards of trade and commodities
exchanges. It is anticipated that such contracts may provide greater liquidity
and lower cost than forward foreign currency exchange contracts.
Regulatory Restrictions. To the extent required to comply with Securities and
Exchange Commission Release No. IC-10666, when purchasing a futures contract or
writing a put option, each Foreign Currency Fund will maintain in a pledged
account any asset, including equity securities and non-investment-grade debt so
long as the asset is liquid, unencumbered and marked to market daily equal to
the value of such contracts.
To the extent required to comply with Commodity Futures Trading Commission
Regulation 4.5 and thereby avoid "commodity pool operator" status, a Foreign
Currency Fund will not enter into a futures contract or purchase an option
thereon if immediately thereafter the initial margin deposits for futures
contracts (including foreign currency and all other futures contracts) held by
the Foreign Currency Fund plus premiums paid by it for open options on futures
would exceed 5% of the Foreign Currency Fund's total assets. Neither Foreign
Currency Fund will engage in transactions in financial futures contracts or
options thereon for speculation, but only to attempt to hedge against changes in
market conditions affecting the values of securities which the Fund holds or
intends to purchase. When futures contracts or options thereon are purchased to
protect against a price increase on securities intended to be purchased later,
it is anticipated that at least 75% of such intended purchases will be
completed. When other futures contracts or options thereon are purchased, the
underlying value of such contracts will at all times not exceed the sum of: (1)
accrued profit on such contracts held by the broker; (2) cash or high quality
money market instruments set aside in an identifiable manner; and (3) cash
proceeds from investments due in 30 days.
EMERGING MARKET SECURITIES
The Emerging Markets Fund may invest in countries or regions with relatively
low gross national product per capita compared to the world's major economies,
and in countries or regions with the potential for rapid economic growth
(emerging markets). Emerging markets will include any country: (i) having an
"emerging stock market" as defined by the International Finance Corporation;
(ii) with low-to-middle-income economies according to the International Bank for
Reconstruction and Development (the "World Bank"); (iii) listed in World Bank
publications as developing; or (iv) determined by the Adviser to be an emerging
market as defined above. The Emerging Markets Fund may also invest in securities
of: (i) companies the principal securities trading market for which is an
emerging market country; (ii) companies organized under the laws of, and with a
principal office in, an emerging market country, or (iii) companies whose
principal activities are located in emerging market countries.
The risks of investing in foreign securities may be intensified in the case
of investments in emerging markets. Securities of many issuers in emerging
markets may be less liquid and more volatile than securities of comparable
domestic issuers. Emerging markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of the Funds are uninvested and
no return is earned thereon. The inability of the Funds to make intended
security purchases due to settlement problems could cause the Funds to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to the Funds
due to subsequent declines in value of portfolio securities or, if the Funds
have entered into a contract to sell the security, in possible liability to the
purchaser. Securities prices in emerging markets can be significantly more
volatile than in the more developed nations of the world, reflecting the greater
uncertainties of investing in less established markets and economies. In
particular, countries with emerging markets may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions of repatriation of assets, and may have less
protection of property
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rights than more developed countries. The economies of countries with emerging
markets may be predominantly based on only a few industries, may be highly
vulnerable to changes in local or global trade conditions, and may suffer from
extreme and volatile debt burdens or inflation rates. Local securities markets
may trade a small number of securities and may be unable to respond effectively
to increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Securities of issuers
located in countries with emerging markets may have limited marketability and
may be subject to more abrupt or erratic price movements.
Certain emerging markets may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if a deterioration occurs in an
emerging market's balance of payments or for other reasons, a country could
impose temporary restrictions on foreign capital remittances. The Funds could be
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the application
to the Funds of any restrictions on investments.
Investments in certain foreign emerging market debt obligations may be
restricted or controlled to varying degrees. These restrictions or controls may
at times preclude investment in certain foreign emerging market debt obligations
and increase the expenses of the Funds.
ADDITIONAL RISK FACTORS. As a result of its investments in foreign
securities, the Emerging Markets Fund may receive interest or dividend payments,
or the proceeds of the sale or redemption of such securities, in the foreign
currencies in which such securities are denominated. In that event, the Fund may
convert such currencies into dollars at the then current exchange rate. Under
certain circumstances, however, such as where the Adviser believes that the
applicable rate is unfavorable at the time the currencies are received or the
Adviser anticipates, for any other reason, that the exchange rate will improve,
the Fund may hold such currencies for an indefinite period of time.
In addition, the Fund may be required to receive delivery of the foreign
currency underlying forward foreign currency contracts it has entered into. This
could occur, for example, if an option written by the Fund is exercised or the
Fund is unable to close out a forward contract. The Fund may hold foreign
currency in anticipation of purchasing foreign securities. The Fund may also
elect to take delivery of the currencies' underlying options or forward
contracts if, in the judgment of the Adviser, it is in the best interest of the
Fund to do so. In such instances as well, the Fund may convert the foreign
currencies to dollars at the then current exchange rate, or may hold such
currencies for an indefinite period of time.
While the holding of currencies will permit the Fund to take advantage of
favorable movements in the applicable exchange rate, it also exposes the Fund to
risk of loss if such rates move in a direction adverse to the Fund's position.
Such losses could reduce any profits or increase any losses sustained by the
Fund from the sale or redemption of securities, and could reduce the dollar
value of interest or dividend payments received. In addition, the holding of
currencies could adversely affect the Fund's profit or loss on currency options
or forward contracts, as well as its hedging strategies.
RUSSIAN SECURITIES
The Emerging Markets Fund may invest in Russian securities. While investment
risks exist in many markets around the world, some of the risks inherent in
investing in Russia appear to be greater than those in other established and
emerging markets. These risks include, without limitation:
POLITICAL AND ECONOMIC RISKS. There is no history of stability in this market
and no guarantee of future stability. The emerging nature of the Russian
political system in its current democratic form leaves it more vulnerable to
break down in the event of economic instability or popular unrest. The dynamic
nature of the political environment can make the future uncertain. The economic
infrastructure is poor, and the country maintains a high level of external and
internal debt. Tax regulations are ambiguous and unclear, and there is a risk of
imposition of arbitrary or onerous taxes due to the lack of a fair and
economically-rational tax regime.
COMMERCIAL AND CREDIT RISKS. Banks and other financial systems are not well
developed or regulated, and as a result tend to be untested and have low credit
ratings. Organized crime and corruption are a feature of the business
environment, and bankruptcy and insolvency are commonplace as businesses are
learning how to cope in new conditions. In terms of cash, securities and other
investment transactions, the risk of broker, counterparty and other third-party
default is high. The same holds true for issuers, where the risk of default is
high. Insurance is expensive and difficult to obtain in light of the volatility
of the commercial environment.
LIQUIDITY RISKS. Foreign investment is affected by restrictions in terms of
repatriation and convertibility of the currency. The ruble is only convertible
internally, and the value of investments may be affected by fluctuations in
available currency rates and exchange control regulations. The repatriation of
profits may be restricted in some cases. Due to the undeveloped nature of the
banking system, considerable delays can occur in transferring funds, converting
rubles into other currencies and remitting funds out of Russia.
LEGAL AND REGULATORY RISKS. Russia's legal system is evolving and is not as
developed as that of a western country. It is based on a civil code with no
system of judicial precedents. The regulatory environment is sometimes uncertain
since the total law can
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encompass the civil code, legislative laws, presidential decrees, and ministry
resolutions. The code, laws, decrees, and resolutions ("Regulations") are
promulgated at separate times and are not necessarily consistent. The issuance
of Regulations does not always keep pace with market developments, thereby
creating ambiguities and inconsistencies.
Regulations governing securities investment may not exist or may be
interpreted and applied in an arbitrary or inconsistent manner. There may be a
risk of conflict between the rules and regulations of the local, regional, and
national governments. The concept of share ownership rights and controls may not
be in place or be enforceable. The independence of the courts from economic,
political, or national influence is basically untested and the courts and judges
are not experienced in business and corporate law. Foreign investors cannot be
guaranteed redress in a court of law for a breach of local laws, regulations or
contracts.
The securities market regulatory body, the Federal Commission on the Capital
Market, was established in 1994 and is responsible for overseeing market
participants, including registrars. However, the monitoring of and enforcement
of the obligations of registrar companies is difficult due to geographic
dispersion and inconsistent interpretation and application of regulations.
OPERATIONAL RISKS. Shareholder Title to Securities: Shareholder risk is a
major risk for equity investment in Russia. For example, shares are
dematerialized and the only legal evidence of ownership is the shareholder's
name entered in the register of the company. The concept of fiduciary duty on
the part of companies' management is generally non-existent. Therefore,
shareholders may suffer a dilution or loss of investment, due to arbitrary
changes in the shareholder register, with little or no recourse or redress
available. Local laws and regulations may not prohibit or restrict a company's
management from materially changing the company's structure without the consent
of shareholders. Legislation prohibiting insider trading activities is
rudimentary.
Clearing and Settlement: For equity settlements, the payments are usually
handled offshore in U.S. dollars after the shares are reregistered on the books
of the company or its registrar. However, the only evidence of the registration
is a company "extract" which is a photocopy of the appropriate page from the
register reflecting the new shareholder's name. The extract does not have a
legal basis for establishing ownership in the event of a loss.
For Ministry of Finance (MinFin) bond settlements, payments are made offshore
in U.S. dollars upon settlement of the bearer bonds at Vneshtorgbank's (VTB)
office in Moscow. If the bonds are transported between the local subcustodian
and VTB, the investor is exposed to transportation risk as the MinFins are
bearer bonds and are not replaceable in the event they are lost, stolen, or
destroyed.
Foreign investors can also invest in treasury issues through the Moscow
Interbank Currency Exchange (MICEX). These issues settle book-entry at MICEX in
rubles only.
Transparency: The rules regulating corporate governance may not exist or are
underdeveloped and offer little protection to minority shareholders. Disclosure
and reporting requirements are not to the expected level of most developed
western nations. The accounting standards generally used in Russia are not
international standards and in many cases may be cash based, nonaccrual method
of accounting. The quality, reliability, and availability of information on
companies in Russia is lower than in most western markets.
Derivative Investments. In order to seek to hedge various portfolio
positions, including to hedge against price movements in markets in which the
Fund anticipates increasing its exposure, the Fund may invest in certain
instruments which may be characterized as derivative investments. These
investments include various types of interest rate transactions, options and
futures. Such investments also may consist of indexed securities, including
inverse securities. The Fund has express limitations on the percentage of its
assets that may be committed to certain of such investments. Other of such
investments have no express quantitative limitations, although they may be made
solely for hedging purposes, not for speculation, and may in some cases require
limitations as to the type of permissible counter-party to the transaction.
Interest rate transactions involve the risk of an imperfect correlation between
the index used in the hedging transactions and that pertaining to the securities
which are the subject of such transactions. Similarly, utilization of options
and futures transactions involves the risk of imperfect correlation in movements
in the price of options and futures and movements in the price of the securities
or interest rates which are the subject of the hedge. Investments in indexed
securities, including inverse securities, subject the Fund to the risks
associated with changes in the particular indices, which may include reduced or
eliminated interest payments and losses of invested principal.
REAL ESTATE INVESTMENT TRUSTS
As described in the Prospectus, the Real Estate Fund intends under normal
conditions to invest in real estate investment trusts ("REITs"). REITs pool
investors' funds for investment primarily in income-producing commercial real
estate or real estate-related loans. A REIT is not taxed on income distributed
to shareholders if it complies with several requirements relating to its
organization, ownership, assets, and income and a requirement that it distribute
to its shareholders at least 95% of its taxable income (other than net capital
gains) for each taxable year.
REITs can generally be classified as follows:
--Equity REITs, which invest the majority of their assets directly in real
property and derive their income primarily from rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in value.
12
<PAGE>
--Mortgage REITs, which invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments.
--Hybrid REITs, which combine the characteristics of both equity REITs and
mortgage REITs.
REITs are like closed-end investment companies in that they are essentially
holding companies which rely on professional managers to supervise their
investments. A shareholder in the Real Estate Fund should realize that by
investing in REITs indirectly through the Fund, he will bear not only his
proportionate share of the expenses of the Fund, but also, indirectly, similar
expenses of underlying REITs.
RISKS OF INVESTMENT IN REAL ESTATE SECURITIES
Selecting REITs requires an evaluation of the merits of each type of asset a
particular REIT owns, as well as regional and local economics. Due to the
proliferation of REITs in recent years and the relative lack of sophistication
of certain REIT managers, the quality of REIT assets has varied significantly.
The Real Estate Fund will not invest in real estate directly, but only in
securities issued by real estate companies. However, the Fund may be subject to
risks similar to those associated with the direct ownership of real estate
because of its policy of concentrating in the securities of companies in the
real estate industry. These include declines in the value of real estate, risks
related to general and local economic conditions, dependence on management
skill, cash flow dependence, possible lack of availability of long-term mortgage
funds, over-building, extended vacancies of properties, decreased occupancy
rates and increased competition, increases in property taxes and operating
expenses, changes in neighborhood values and the appeal of the properties to
tenants and changes in interest rates.
In addition to these risks, equity REITs may be affected by changes in the
value of the underlying properties owned by the trusts, while mortgage REITs may
be affected by the quality of any credit extended. Further, equity and mortgage
REITs are dependent upon management skills and generally are not diversified.
Equity and mortgage REITs are also subject to potential defaults by borrowers,
self-liquidation, and the possibility of failing to qualify for tax-free status
of income under the Code and failing to maintain exemption from the Investment
Company Act of 1940. In the event of a default by a borrower or lessee, the REIT
may experience delays in enforcing its rights as a mortgagee or lessor and may
incur substantial costs associated with protecting its investments. In addition,
investment in REITs could cause the Fund to possibly fail to qualify as a
regulated investment company.
DEBT SECURITIES
Up to 25% of the Real Estate Fund's total assets may be invested in debt
securities (which include for purposes of this investment policy convertible
debt securities which the Adviser believes have attractive equity
characteristics). The Real Estate Fund may invest in debt securities rated BBB
or better by Standard & Poor's Corporation ("S&P") or Baa or better by Moody's
Investor Service, Inc. ("Moody's") or, if not rated, are judged to be of
comparable quality as determined by the Adviser. In choosing debt securities for
purchase by the Fund, the Adviser will employ the same analytical and valuation
techniques utilized in managing the equity portion of the Real Estate Fund's
holdings (see "Investment Advisory and Other Services") and will invest in debt
securities only of companies that satisfy the Adviser's investment criteria.
The value of the Real Estate Fund's investments in debt securities will
change as interest rates fluctuate. When interest rates decline, the values of
such securities generally can be expected to increase and when interest rates
rise, the values of such securities can generally be expected to decrease. The
lower-rated and comparable unrated debt securities described above are subject
to greater risks of loss of income and principal than are higher-rated fixed
income securities. The market value of lower- rated securities generally tends
to reflect the market's perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than is the case with more
highly rated securities, which reflect primarily functions in general levels of
interest rates.
ZERO COUPON BONDS
The Emerging Markets Fund may invest in debt obligations that do not make any
interest payments for a specified period of time prior to maturity or until
maturity. Even though such bonds do not pay current interest in cash, the
Emerging Markets Fund is required to accrue interest income on such investments
and to distribute such amounts to shareholders. Thus, the Emerging Markets Fund
would not be able to purchase income-producing securities to the extent of cash
used to pay such distributions and current income could be less than it
otherwise would have been. Alternatively, the Emerging Markets Fund might
liquidate investments in order to satisfy these distribution requirements. The
value of these obligations fluctuates more in response to interest rate changes,
if they are of the same maturity, than does the value of debt obligations that
make current interest payments.
LOAN PARTICIPATIONS AND ASSIGNMENTS
The Emerging Markets Fund may also invest in fixed- or floating-rate loans
arranged through private negotiations between an issuer of emerging market debt
instruments and one or more financial institutions ("lenders"). Generally,
investments in loans would be in the form of loan participations and assignments
of loan portfolios from third parties.
13
<PAGE>
When investing in a loan participation, the Funds will typically have the
right to receive payments from the lender to the extent that the lender receives
payments from the borrower. In addition, the Funds will be able to enforce their
rights through the lender, and not directly against the borrower. As a result,
in a loan participation the Funds assume credit risk with respect to both the
borrower and the lender.
When the Funds purchase loan assignments from lenders, they will acquire
direct rights against the borrower, but these rights and the Funds' obligations
may differ from, and be more limited than, those held by the assigning lender.
Loan participations and assignments may be illiquid.
INVESTMENT RESTRICTIONS
The investment restrictions described below are fundamental policies and may
not be changed as to any Fund without the approval of the lesser of (i) a
majority of the Fund's outstanding shares or (ii) 67% of the Fund's shares
represented at a meeting of Trust shareholders at which the holders of 50% or
more of the Fund's outstanding shares are present. No Fund of the Trust may:
(1) Make short sales of securities, unless at the time of sale the Fund owns
an equal amount of such securities.
(2) Purchase securities on margin, except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities. The deposit or payment by the Fund of initial or
maintenance margin in connection with financial futures contracts or
related options transactions is not considered the purchase of a security
on margin.
(3) Write, purchase or sell puts, calls or combinations thereof, except that
the Funds may (a) write exchange-traded covered call options on portfolio
securities and enter into closing purchase transactions with respect to
such options, and Funds, other than the Bond Fund, may write
exchange-traded covered call options on foreign currencies and secured
put options on securities and foreign currencies and write covered call
and secured put options on securities and foreign currencies traded over
the counter, and enter into closing purchase transactions with respect to
such options, (b) purchase exchange- traded call options and put options,
and such Funds, other than the Bond Fund, may purchase call and put
options traded over the counter, provided that the premiums on all
outstanding call and put options do not exceed 5% of its total assets,
and enter into closing sale transactions with respect to such options,
and (c) engage in financial futures contracts and related options
transactions, provided that the sum of the initial margin deposits on
such Fund's existing futures and related options positions and the
premiums paid for related options would not exceed 5% of its total
assets.
(4) Borrow in excess of 10% of the market or other fair value of its total
assets, or pledge its assets to an extent greater than 15% of the market
or other fair value of its total assets. Any such borrowings shall be
from banks and shall be undertaken only as a temporary measure for
administrative purposes. Deposits in escrow in connection with the
writing of covered call options, secured put options, or the purchase or
sale of financial futures contracts and related options are not deemed to
be a pledge or other encumbrance. The Bond Fund will not purchase
securities while temporary bank borrowings in excess of 5% of its net
assets are outstanding.
(5) Underwrite the securities of other issuers, except to the extent that in
connection with the disposition of its portfolio securities, a Fund may
be deemed to be an underwriter. The Mid Cap (with respect to up to
one-third of its assets), International and Emerging Markets Funds may
buy and sell securities outside the United States which are not
registered with the Commission or marketable in the United States.
(6) Concentrate its assets in the securities of issuers which conduct their
principal business activities in the same industry, except that the Real
Estate Fund may so concentrate its assets and the Bond Fund may invest
more than 25% of its assets in a particular segment of the municipal
securities market. This restriction does not apply to obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
(7) Make any investment in real estate, real estate limited partnerships,
commodities or commodities contracts, except that a Fund may (a) purchase
or sell readily marketable securities which are secured by interests in
real estate, including real estate investment and mortgage investment
trusts, and (b) engage in financial futures contracts and related options
transactions, provided that the sum of the initial margin deposits on the
Fund's futures and related options positions and the premiums paid for
related options would not exceed 5% of the Fund's total assets, and (c)
the Mid Cap, International and Emerging Markets Funds may enter into
foreign currency transactions.
(8) Make loans, except that the Fund may (a) purchase bonds, notes,
debentures or similar obligations which are customarily purchased by
institutional investors, whether publicly distributed or not, (b) invest
in repurchase agreements, provided that an aggregate of no more than 10%
of the Fund's net assets (taken at market value) may be invested in
repurchase agreements having maturities of more than seven days and all
other illiquid securities, and (c) loan its portfolio securities in
amounts up to one third of the market or other fair value of its total
assets, subject to restrictions described more fully above.
14
<PAGE>
(9) Purchase securities of other investment companies, except that the Fund
may make such a purchase (a) in the open market involving no commission
or profit to a sponsor or dealer (other than the customary broker's
commission), provided that immediately thereafter (i) not more than 10%
of the Fund's total assets would be invested in such securities and (ii)
not more than 3% of the voting stock of another investment company would
be owned by the Fund, or (b) as part of a merger, consolidation, or
acquisition of assets.
(10) Invest more than 5% of its total assets in the securities of any one
issuer (except the U.S. Government and, in the case of the Mid Cap,
International and Emerging Markets Funds, any foreign government, its
agencies and instrumentalities) or purchase more than 10% of the
outstanding voting securities or more than 10% of the securities of any
class of any one issuer; however, the foregoing limitations do not apply
to the Real Estate Fund and Emerging Markets Fund. With respect to 75% of
its assets, a Fund which may invest in foreign securities will limit its
investments in the securities of any one foreign government, its agencies
and instrumentalities, to 5% of the Fund's total assets.
(11) Invest in securities of any issuer if any officer or Trustee of the Trust
or any officer or director of the Adviser owns more than 1/2 of 1% of the
outstanding securities of such issuer and all such persons own in the
aggregate more than 5% of the securities of such issuer.
(12) Invest in the aggregate more than 5% of its total assets in the
securities of any issuers (other than real estate investment trusts)
which have (with predecessors) a record of less than three years of
continuous operations.
(13) Invest in warrants or rights except where acquired in units or attached
to other securities. The Mid Cap, Real Estate, International and Emerging
Markets Funds each may invest up to 5% of its total assets in warrants or
rights which are not in units or attached to other securities.
(14) Purchase restricted securities (including repurchase agreements having
maturities of more than seven days) or securities for which market value
quotations are not readily available if as a result of such purchase more
than 10% of each Fund's, total assets would be invested in the aggregate
in such securities.
(15) Invest in interests in oil, gas, or other mineral exploration or
development programs.
(16) Issue senior securities as defined in the Investment Company Act of 1940
except to the extent that it is permissible to (a) borrow money from
banks pursuant to the Trust's investment restrictions regarding the
borrowing of money, and (b) enter into transactions involving forward
foreign currency contracts and options thereon, as described in the
Trust's Prospectus and this Statement of Additional Information.
If a percentage restriction on investment or utilization of assets as set
forth is adhered to at the time an investment is made, a later change in the
percentage resulting from a change in the value or costs of the Fund's assets
will not be considered a violation of the restriction except as provided in (11)
above.
PERFORMANCE
Performance information for each Fund (and Class of Fund) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature may
be expressed as the "yield" of the Bond Fund and Emerging Markets Fund, and as
"average annual total return" and "total return" of any of the other Funds.
Quotations of the yield for the Bond Fund and Emerging Markets Fund will be
based on all investment income per share earned during a particular 30-day
period (including dividends and interest), less expenses (including pro rata
Trust expenses and expenses applicable to each particular Fund or Class of Fund)
accrued during the period ("net investment income"), and are computed by
dividing net investment income by the value of a share of the Fund or Class on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)(6)-1]
--
cd
where a = dividends and interest earned during the period by the Fund,
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends, and
d = the net asset value per share on the last day of the period.
For the 30-day period ended November 30, 1998, the yield for the Bond Fund
Class A shares and Class B shares was 4.29% and 3.76%, respectively and the
Emerging Markets Fund Class A shares, Class B shares and Class C shares was
14.57%, 14.59%, and 14.62%, respectively.
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<PAGE>
A Fund's average annual total return quotation is computed in accordance with
a standardized method prescribed by rules of the Securities and Exchange
Commission. The average annual total return for the Fund for a specific period
is found by first taking a hypothetical $1,000 investment ("initial investment")
in the Fund's shares on the first day of the period, adjusting to deduct the
maximum sales charge, and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Fund have been reinvested at net asset value
on the reinvestment dates during the period.
Calculation of a Fund's total return is subject to a standardized formula.
Total return performance for a specific period is calculated by first taking an
investment ("initial investment") in the Fund's shares on the first day of the
period, either adjusting or not adjusting to deduct the maximum sales charge,
and computing the "redeemable value" of that investment at the end of the
period. The total return percentage is then determined by subtracting the
initial investment from the redeemable value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends by the Fund have been
reinvested at net asset value on the reinvestment dates during the period. Total
return may also be shown as the increased dollar value of the hypothetical
investment over the period. Total return calculations that do not include the
effect of the sales charge would be reduced if such charge were included.
The manner in which total return will be calculated for public use is
described above. The following table illustrates average annual total return for
each Fund for the 1, 5 and 10 year periods ended November 30, 1998.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOVEMBER 30, 1998
PERIODS ENDED
-----------------------------------------------------------------------------
Fund 1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION(1)
- -------------- -------- -------- --------- -------------------
<S> <C> <C> <C> <C>
Bond
Class A 0.70% 4.30% 7.36% 8.01%
Class B 1.14% N/A N/A 4.93%
Mid Cap
Class A 1.58% 10.00% N/A 14.69%
Class B 2.13% N/A N/A 11.85%
International
Class A 20.19% 12.76% N/A 9.59%
Class B 21.32% N/A N/A 11.25%
Real Estate
Class A (21.36)% N/A N/A 10.76%
Class B (20.88)% N/A N/A 10.99%
Emerging Markets
Class A (30.66)% N/A N/A 8.38%
Class B (30.01)% N/A N/A 8.79%
Class C N/A N/A N/A (35.91)%
</TABLE>
______________________
(1)The Bond, Mid Cap, and International Funds Class A commenced operations on
July 15, 1988, November 1, 1989 and November 1, 1989, respectively. Bond Fund
Class B commenced operations on March 16, 1994. Mid Cap and International
Funds Class B commenced operations on July 18, 1994 and July 15, 1994,
respectively. The Real Estate and Emerging Markets Funds' Class A and B
commenced operations on March 1, 1995 and September 5, 1995, respectively.
The Emerging Markets Bond Fund's Class C Shares commenced operations on March
26, 1998.
Performance information reflects only the performance of a hypothetical
investment in each class during the particular time period on which the
calculations are based. Performance information should be considered in light of
the Fund's investment objectives and policies, characteristics and quality of
the portfolio, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
The Trust also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Funds, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
16
<PAGE>
PERFORMANCE COMPARISONS
Each Fund or Class of Fund may, from time to time, include in advertisements
containing total return the ranking of those performance figures relative to
such figures for groups of mutual funds having similar investment objectives as
categorized by ranking services such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Weisenberger Financial Services, Inc., and rating
services such as Morningstar, Inc. Additionally, a Fund may compare its
performance results to other investment or savings vehicles (such as
certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week, Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's Investment
Adviser, The Wall Street Journal, New York Times, Consumer Reports, Registered
Representative, Financial Planning, Financial Services Weekly, Financial World,
U.S. News and World Report, Standard and Poor's The Outlook, Investor's Daily
and Personal Investor. The total return may be used to compare the performance
of the Funds against certain widely acknowledged outside standards or indices
for stock and bond market performance, such as the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500"), Standard & Poor's 400 Midcap Index
(the "S&P 400"), Dow Jones Industrial Average, Europe Australia Far East Index
("EAFE"), NAREIT Equity Index, Consumer Price Index, J.P. Morgan Emerging
Markets Bond Index, Lehman Brothers Municipal Bond Index, Lehman Brothers
Aggregate Bond Index, Lehman Brothers Corporate Index and Lehman Brothers T-Bond
Index. The S&P 500 is a commonly quoted measure of stock market performance and
represents common stocks of companies of varying sizes segmented across 90
different industries which are listed on the New York Stock Exchange, the
American Stock Exchange and traded over the NASDAQ National Market System.
PORTFOLIO TURNOVER
The Funds pay brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by a Fund and thus indirectly by its shareholders. It may
also result in the realization of larger amounts of short-term capital gains,
which are taxable to shareholders as ordinary income. If such rate of turnover
exceeds 100%, the Funds will pay more in brokerage commissions than would be the
case if they had lower portfolio turnover rates. Historical turnover rates can
be found under the heading "Financial Highlights" located in the Trust's
Prospectus.
PORTFOLIO TRANSACTIONS
In effecting fund transactions for the Trust, each adviser adheres to the
Trust's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The determination of
what may constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations including, without
limitation, the overall direct net economic result to the Trust (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, availability of the broker to stand ready
to execute possibly difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by each adviser and the Subadviser in determining the overall
reasonableness of brokerage commissions paid by the Trust.
Each adviser may cause the Trust to pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission which
another broker or dealer would have charged for effecting that transaction if
such adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker. As provided in Section 28(e) of the Securities Exchange
Act of 1934, "brokerage and research services" include advising as to the value
of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and research
services provided by brokers to the Trust are considered to be in addition to
and not in lieu of services required to be performed by each adviser under its
contract with the Trust and may benefit both the Trust and other accounts of
such adviser. Conversely, brokerage and research services provided by brokers to
other accounts of an adviser may benefit the Trust.
If the securities in which a particular Fund of the Trust invests are traded
primarily in the over-the-counter market, where possible the Fund will deal
directly with the dealers who make a market in the securities involved unless
better prices and executions are available elsewhere. Such securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
Some fund transactions are, subject to the Conduct Rules of the National
Association of Securities Dealers, Inc. and subject to obtaining best prices and
executions, effected through dealers (excluding Equity Planning) who sell shares
of the Trust.
17
<PAGE>
The Trust has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Trust. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs share pro rata based on the
Trust's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
For the fiscal years ended November 30, 1996, 1997 and 1998, brokerage
commissions paid by the Trust on Fund transactions totaled $3,104,255,
$2,269,745 and $2,904,276, respectively. For the fiscal year ended November 30,
1998, W.S. Griffith & Co., Inc., a broker-dealer subsidiary of Phoenix Home
Life, received $___, or __% of total brokerage commissions paid by the Trust, in
fund-related commissions attributed to a clearing arrangement with an
unaffiliated broker-dealer. Brokerage commissions of $1,564,683 paid during the
fiscal year ended November 30, 1998, were paid on fund transactions aggregating
$989,159,000 executed by brokers who provided research and other statistical and
factual information.
Investment decisions for the Trust are made independently from those of the
other investment companies or accounts advised by either adviser. It may
frequently happen that the same security is held in the portfolio of more than
one fund. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same security is
suited for the investment objectives of more than one fund. When two or more
funds advised by either adviser (or any subadviser) are simultaneously engaged
in the purchase or sale of the same security, the transactions are allocated
among the funds in a manner equitable to each fund. It is recognized that in
some cases this system could have a detrimental effect on the price or volume of
the security as far as the Trust is concerned. In other cases, however, it is
believed that the ability of the Trust to participate in volume transactions
will produce better executions for the Trust. It is the opinion of the Board of
Trustees of the Trust that the desirability of utilizing each adviser as
investment adviser to the Trust outweighs the disadvantages that may be said to
exist from simultaneous transactions.
THE INVESTMENT ADVISERS
The investment adviser to the Bond, Mid Cap, International, Emerging Markets
and After-Tax Growth Funds is Phoenix Investment Counsel, Inc. ("PIC"), which is
located at 56 Prospect Street, Hartford, Connecticut 06115-0480. PIC also acts
as the investment adviser for 14 other mutual funds, as subadviser to three
mutual funds, and as adviser to institutional clients. PIC has acted as an
investment adviser for over sixty years. PIC was originally organized in 1932 as
John P. Chase, Inc. As of September 30, 1999, PIC had approximately $____
billion in assets under management. Philip R. McLoughlin, a Trustee and officer
of the Trust, is a director of PIC. All other executive officers of the Trust
are officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). PXP is a New York Stock Exchange traded
company that provides investment management and related services to
institutional investors, corporations and individuals through operating
subsidiaries. Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life")
of Hartford, Connecticut is a majority shareholder of PXP. Phoenix Home Life is
in the business of writing ordinary and group life and health insurance and
annuities. Its principal offices are located at One American Row, Hartford,
Connecticut, 06115-2520. Equity Planning, a mutual fund distributor, acts as the
national distributor of the Trust's shares and as Financial Agent of the Trust.
The principal office of Equity Planning is located at 100 Bright Meadow
Boulevard, Enfield, Connecticut, 06082.
Phoenix Investment Partners, Ltd., is the 10th largest publicly traded
investment company in the nation, and has served investors for over 70 years. It
manages approximately $53.5 billion in assets through its investment partners:
Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen, London, Singapore and Fort
Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in Chicago
and Cleveland; Roger Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca
Capital Management LLC (Seneca) in San Francisco; and Phoenix Investment
Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in Hartford, Sarasota
and Scotts Valley, CA, respectively.
18
<PAGE>
Duff & Phelps Investment Management Co. ("Duff & Phelps") is the investment
adviser to the Real Estate Fund and is located at 55 East Monroe Street, Suite
3600, Chicago, Illinois 60603. Duff & Phelps also acts as investment adviser to
eight other mutual funds and as adviser to institutional clients. As of
September 30, 1999, Duff & Phelps had approximately $___ billion in assets under
management on a discretionary basis. Duff & Phelps is a subsidiary of PXP. Duff
& Phelps also serves as investment adviser to the Core Equity Fund of Phoenix
Equity Series Fund, the Enhanced Reserves Portfolio and Core Equity Portfolio of
Phoenix Duff & Phelps Institutional Mutual Funds, the Core Bond Fund of Phoenix
Series Fund and three closed-end funds: Duff & Phelps Utilities Income Inc.,
Duff & Phelps Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc.
Aberdeen Fund Managers Inc. ("Aberdeen") is the subadviser to the
International Fund and is located at 1 Financial Plaza, Suite 2210, Fort
Lauderdale, FL 33394. Aberdeen is a wholly-owned subsidiary of Aberdeen Asset
Management PLC based in Aberdeen, Scotland. Together with its subsidiaries,
Aberdeen Asset Management PLC provides investment management services to unit
and investment trusts, segregated pension funds and other institutional and
private portfolios, and, through Aberdeen, U.S. mutual funds. Aberdeen has
served as subadviser for the following mutual funds since their inception in
1996: Phoenix-Aberdeen New Asia Fund, Phoenix-Aberdeen Global Small Cap Fund and
the Aberdeen New Asia Series of The Phoenix Edge Series Fund. Aberdeen also has
served as subadviser to Phoenix-Aberdeen Worldwide Opportunities Fund and the
International Series of The Phoenix Edge Series Fund since 1998. As of September
30, 1999, Aberdeen Asset Management PLC had $____ billion in assets under
management.
Seneca Capital Management LLC ("Seneca") is the subadviser to the Mid Cap and
After-Tax Growth Funds and is located at 909 Montgomery Street, San Francisco,
California 94133. Seneca acts as a subadviser to two other mutual funds and as
investment adviser to institutions and individuals. As of September 30, 1999,
Seneca had $___ billion in assets under management. Seneca has been (with its
predecessor, GMG/Seneca Capital Management LP ("GMG/Seneca")) an investment
adviser since 1989.
The investment advisory agreements, approved by the Trustees, provide that
the Trust will bear all costs and expenses (other than those specifically
referred to as being borne by the Adviser) incurred in the operation of the
Trust. Such expenses include, but shall not be limited to, all expenses incurred
in the operation of the Trust and any public offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions, fees of Trustees
who are not employees of PIC or any of its affiliates, expenses of Trustees, and
shareholders' meetings, expenses of printing and mailing proxy soliciting
material, expenses of the insurance premiums for fidelity and other coverage,
expenses of the repurchase and redemption of shares, expenses of the issue and
sale of shares (to the extent not borne by Equity Planning under its agreement
with the Trust), expenses of printing and mailing share certificates
representing shares of the Trust, association membership dues, charges of
custodians, transfer agents, dividend disbursing agents and financial agents,
and bookkeeping, auditing and legal expenses. The Trust will also pay the fees
and bear the expense of registering and maintaining the registration of the
Trust and its shares with the Securities and Exchange Commission and registering
or qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders. If authorized by
the Trustees, the Trust will also pay for extraordinary expenses and expenses of
a non-recurring nature which may include, but shall not be limited to, the
reasonable cost of any reorganization or acquisition of assets and the cost of
legal proceedings to which the Trust is a party.
Each Fund will pay expenses incurred in its own operation and will also pay a
portion of the Trust's general administration expenses allocated on the basis of
the asset values of the respective Funds.
For managing, or directing the management of, the investments of the Bond,
Mid Cap, International, Emerging Markets and After-Tax Growth Funds, PIC is
entitled to a fee, payable monthly, at the following annual rates:
<TABLE>
<CAPTION>
FUND 1ST $1 BILLION $1-2 BILLION $2+ BILLION
---- -------------- ------------ -----------
<S> <C> <C> <C>
Bond 0.45% 0.40% 0.35%
Mid Cap 0.75% 0.70% 0.65%
International 0.75% 0.70% 0.65%
Emerging Markets 0.75% 0.70% 0.65%
After-Tax Growth ____% ____% ____%
</TABLE>
For managing, or directing the management of, the investments of the Real
Estate Fund, Duff & Phelps is entitled to a monthly fee at the annual rate of
0.75% of the average aggregate daily net asset values of the Fund up to $1
billion; 0.70% of such value between $1 billion and $2 billion; and 0.65% of
such value in excess of $2 billion.
The investment advisory agreements provide that the applicable adviser will
reimburse the Trust for the amount, if any, by which the total operating and
management expenses of any Fund (including the investment adviser's
compensation, but excluding interest, taxes, brokerage fees and commissions and
extraordinary expenses) for any fiscal year exceed the level of expenses which
such Fund is permitted to bear under the most restrictive expense limitation
(which is not waived) imposed on mutual funds by any state in which shares of
such Fund are then qualified for sale. Currently the most restrictive state
expense limitation provisions limit such expenses of any Fund of the Trust to
2.5% of the first $30 million of average net assets, 2% of the next $70 million
of such net
19
<PAGE>
assets and 1.5% of such net assets in excess of $100 million. Such
reimbursement, if any, will be made by the applicable adviser to the Trust
within five days after the end of each month. In the event legislation were to
be adopted in each state so as to eliminate this restriction, the Trust would
take such action necessary to eliminate this expense limitation.
For its services to the Bond, Mid Cap, International and Emerging Markets
Funds of the Trust during the fiscal year ended November 30, 1998, PIC received
a fee of $5,102,768. Of this total, PIC received fees from each Fund as follows:
<TABLE>
<CAPTION>
Fund 1996 1997 1998
---- ---- ---- ----
<S> <C> <C> <C>
Bond $ 646,989 $ 593,217 $ 544,278
Mid Cap 3,579,657 3,027,757 2,476,987
International 1,071,572 1,062,391 1,350,786
Emerging Markets 177,790 577,472 730,717
</TABLE>
For the fiscal year ended November 30, 1996, it was necessary that PIC bear
ordinary operating expenses of the Emerging Markets Fund of $123,979.
Accordingly, the fee of $177,790 to which PIC would otherwise have been entitled
was reduced to $53,811.
The Real Estate Fund, during the fiscal years ended November 30, 1996, 1997
and 1998, paid management fees of $168,177, $355,100 and $398,336, respectively.
For the fiscal years 1996, 1997 and 1998, the Adviser bore ordinary operating
expenses of the Real Estate Fund of $130,944, $112,306 and $111,386,
respectively. Accordingly, the fees which the Adviser would otherwise have been
entitled were reduced to $286,950 in fiscal year 1998, $242,794 in fiscal year
1997, and $37,233 in fiscal year 1996.
The investment advisory agreements also provide that each adviser shall not
be liable to the Trust or to any shareholder of the Trust for any error of
judgment or mistake of law or for any loss suffered by the Trust or by any
shareholder of the Trust in connection with the matters to which the agreement
relates, except a loss resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of such adviser in the performance
of its duties thereunder.
Provided it has been approved by a vote of the majority of the outstanding
shares of a Fund of the Trust which is subject to its terms and conditions, each
investment advisory agreement continues from year to year with respect of such
Fund so long as (1) such continuance is approved at least annually by the
Trustees or by a vote of the majority of the outstanding shares of such Fund and
(2) the terms and any renewal of the agreement with respect to such Fund have
been approved by the vote of a majority of the Trustees who are not parties to
the agreement or interested persons, as that term is defined in the Investment
Company Act of 1940, of the Trust or the relevant adviser, cast in person at a
meeting called for the purpose of voting on such approval. On sixty days'
written notice and without penalty the agreement may be terminated as to the
Trust or as to a Fund by the Trustees or by the relevant adviser and may be
terminated as to a Fund by a vote of the majority of the outstanding shares of
such Fund. The Agreement automatically terminates upon its assignment (within
the meaning of the Investment Company Act). The agreement provides that upon its
termination, or at the request of the relevant adviser, the Trust will eliminate
all reference to Phoenix from its name, and will not thereafter transact
business in a name using the word Phoenix.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Trust does not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Trust. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Fund which invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of such Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined,
20
<PAGE>
which was likely to materially change the net asset value, then the instrument
would be valued using fair value considerations by the Trustees or their
delegates. If at any time a Fund has investments where market quotations are not
readily available, such investments are valued at the fair value thereof as
determined in good faith by the Trustees although the actual calculations may be
made by persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange are confirmed at the offering price
effective at that time, provided the order is received by the Authorized Agent
prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or C Shares would be less than the initial sales charge and accumulated
distribution services fee on Class A Shares purchased at the same time. Note,
only the Emerging Markets Fund and the International Fund currently offer Class
C Shares.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to ongoing distribution and services fees at an annual rate
of 0.25% of the Fund's aggregate average daily net assets attributable to the
Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges. See the Funds' current Prospectus for additional
information.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions. See the Funds' current Prospectus for additional
information.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted, in the circumstances and subject to the qualifications described
in the Funds' Prospectus. The purpose of the conversion feature is to relieve
the holders of the Class B Shares that have been outstanding for a period of
time sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period,
21
<PAGE>
Class B Shares will automatically convert to Class A Shares and will no longer
be subject to the higher distribution and services fees. Such conversion will be
on the basis of the relative net asset value of the two classes without the
imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.
CLASS C SHARES--EMERGING MARKETS FUND, INTERNATIONAL FUND AND AFTER-TAX GROWTH
FUND ONLY
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase. The deferred
sales charge may be waived in connection with certain qualifying redemptions.
Shares issued in conjunction with the automatic reinvestment of income
distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to ongoing distribution and services fees at
an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares. See the Funds' current Prospectus for
more information.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The five ways in which sales charges may be avoided or reduced are described
below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual fund advised, subadvised or distributed
by the Adviser, Distributor or any of their corporate affiliates (an "Affiliated
Phoenix Fund"); (2) any director or officer, or any full-time employee or sales
representative (for at least 90 days) of the Adviser or Distributor; (3)
registered representatives and employees of securities dealers with whom
Distributor has sales agreements; (4) any qualified retirement plan exclusively
for persons described above; (5) any officer, director or employee of a
corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who retires from
Phoenix Home Life, Distributor and/or their corporate affiliates; (9) any
account held in the name of a qualified employee benefit plan, endowment fund or
foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund qualified plan; (11)
any Phoenix Home Life separate account which funds group annuity contracts
offered to qualified employee benefit plans; (12) any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge; (13) any fully matriculated student in any U.S. service academy; (14)
any unallocated account held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity, if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds, Phoenix-Engemann Fund or
Phoenix-Seneca Fund if, in connection with the purchases or redemption of the
redeemed shares, the investor paid a prior sales charge provided such investor
supplies verification that the redemption occurred within 90 days of the Phoenix
Fund purchase and that a sales charge was paid; (16) any deferred compensation
plan established for the benefit of any Phoenix Fund, Phoenix-Engemann Fund or
Phoenix-Seneca Fund trustee or director; provided that sales to persons listed
in (1) through (15) above are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund; (17) purchasers of Class A
Shares bought through investment advisers and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for their
own accounts or the accounts of their clients; (18) retirement plans and
deferred compensation plans and trusts used to fund those plans (including, for
example, plans qualified or created under sections 401(a), 403(b) or 457 of the
Internal Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the
Distributor for such purchases; (19) 401(k) participants in the Merrill Lynch
Daily K Plan (the "Plan") if the Plan has at least $3 million in assets or 500
or more eligible employees; or (20) clients of investment advisors or financial
planners who buy shares for their own accounts but only if their accounts are
linked to a master account of their investment advisor or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of the investors
described in (17) through (20) may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix Money Market Fund
Series Class A Shares), if made at the same time by the same "person," will be
added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b) plans
for the same employer; (d) multiple accounts (up to 200) under a qualified
employee benefit plan or administered by a third party administrator; or (e)
trust companies, bank trust departments, registered investment advisers, and
similar entities placing orders or providing administrative
22
<PAGE>
services with respect to funds over which they exercise discretionary investment
authority and which are held in a fiduciary, agency, custodial or similar
capacity, provided all shares are held of record in the name, or nominee name,
of the entity placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of this or any other Affiliated Phoenix Fund (other than Phoenix Money
Market Fund Series Class A Shares), if made by the same person within a 13-month
period, will be added together to determine whether you are entitled to an
immediate reduction in sales charges. Sales charges are reduced based on the
overall amount you indicate that you will buy under the Letter of Intent. The
Letter of Intent is a mutually non-binding arrangement between you and the
Distributor. Since the Distributor doesn't know whether you will ultimately
fulfill the Letter of Intent, shares worth 5% of the amount of each purchase
will be set aside until you fulfill the Letter of Intent. When you buy enough
shares to fulfill the Letter of Intent, these shares will no longer be
restricted. If, on the other hand, you do not satisfy the Letter of Intent, or
otherwise wish to sell any restricted shares, you will be given the choice of
either buying enough shares to fulfill the Letter of Intent or paying the
difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you do
not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A Shares before
Class C or B Shares, respectively. Oldest shares will be redeemed before selling
newer shares. Any remaining shares will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and C Shares if the
redemption is made (a) within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint tenant
is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts to
Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, in
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B and C
Shares of this or any other Affiliated Phoenix Fund; (g) based on any direct
rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program
(Class B Shares only). If, as described in condition (a) above, an account is
transferred to an account registered in the name of a deceased's estate, the
CDSC will be waived on any redemption from the estate account occurring within
one year of the death. If the Class B or C Shares are not redeemed within one
year of the death, they will remain subject to the applicable CDSC.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same
Portfolio eight years after they are bought. Conversion will be on the basis of
the then prevailing net asset value of Class A and B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Trust were unable to obtain such assurances,
it might continue to make distributions if doing so would assist in complying
with its general practice of distributing sufficient income to reduce or
eliminate federal taxes otherwise payable by the Funds.
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<PAGE>
IMMEDIATE INVESTMENT
In order to obtain immediate investment of funds, initial and subsequent
purchases of shares of a Fund may also be made by wiring Federal Trusts (monies
held in a bank account with a Federal Reserve Bank) directly pursuant to the
following instructions:
(1) For initial investments, telephone the Trust at (800) 367-5877. Certain
information will be requested from you regarding the account, and an
account number will be assigned.
(2) Once an account number has been assigned, direct your bank to wire the
Federal Trusts to State Street Bank and Trust Company, Custody &
Shareholder Services Division, Boston, Massachusetts 02105, attention of
the appropriate Fund of the Phoenix Multi-Portfolio Fund. Your bank must
include the account number and the name(s) in which your account is
registered in its wire and also request a telephone advice. Your bank may
charge a fee to you for transmitting funds by wire.
An order for shares of a Fund purchased with Federal Trusts will be accepted
on the business day Federal Trusts are wired provided the Federal Trusts are
received by 4:00 p.m. on that day; otherwise, the order will not be accepted
until the next business day. Shareholders should bear in mind that wire
transfers may take two or more hours to complete.
Promptly after an initial purchase of shares made by wiring Federal Trusts
directly, the shareholder should complete and mail to Equity Planning an Account
Application.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
EXCHANGES. Under certain circumstances, shares of any Phoenix Fund may be
exchanged for shares of the same Class of another Phoenix Fund or any other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Series or Fund, except if made in
connection with the Systematic Exchange privilege. Shareholders may exchange
shares held in book-entry form for an equivalent number (value) of the same
class of shares of any other Affiliated Phoenix Fund, if currently offered. On
exchanges with share classes that carry a contingent deferred sales charge, the
CDSC schedule of the original shares purchased continues to apply. The exchange
of shares is treated as a sale and purchase for federal income tax purposes (see
also "Dividends, Distributions and Taxes").
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund or any other Affiliated Phoenix
Fund automatically on a monthly, quarterly, semiannual or annual basis or may
cancel this privilege at any time. If you maintain an account balance of at
least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated
on the basis of the net asset value of the shares held in a single account), you
may direct that shares be automatically exchanged at predetermined intervals for
shares of the same class of another Affiliated Phoenix Fund. This requirement
does not apply to Phoenix "Self Security" program participants. Systematic
exchanges will be executed upon the close of business on the 10th day of each
month or the next succeeding business day. Systematic exchange forms are
available from the Distributor. Exchanges will be based upon each Fund's net
asset value per share next computed after the close of business on the 10th day
of each month (or next succeeding business day), without sales charge.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS. If you maintain an account balance of
at least $5,000, or $2,000 for tax qualified retirement benefit plans
(calculated on the basis of the net asset value of the shares held in a single
account), you may direct that any dividends and distributions paid with respect
to shares in that account be automatically reinvested in a single account of one
of the other Phoenix Funds or any other Affiliated Phoenix Fund at net asset
value. You should obtain a current prospectus and consider the objectives and
policies of each Fund carefully before directing dividends and distributions to
another Fund. Reinvestment election forms and prospectuses are available from
Equity Planning. Distributions may also be mailed to a second payee and/or
address. Requests for directing distributions to an alternate payee must be made
in writing with a signature guarantee of the registered owner(s). To be
effective with respect to a particular dividend or distribution, notification of
the new distribution option must be received by the Transfer Agent at least
three days prior to the record date of such dividend or distribution. If all
shares in your account are repurchased or redeemed or transferred between the
record date and the payment date of a dividend or distribution, you will receive
cash for the dividend or distribution regardless of the distribution option
selected.
INVEST-BY-PHONE. This expedited investment service allows a shareholder to
make an investment in an account by requesting a transfer of funds from the
balance of their bank account. Once a request is phoned in, Equity Planning will
initiate the transaction by wiring a request for monies to the shareholder's
commercial bank, savings bank or credit union via Automated Clearing House
(ACH). The shareholder's bank, which must be an ACH member, will in turn forward
the monies to Equity Planning for credit to the
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shareholder's account. ACH is a computer based clearing and settlement operation
established for the exchange of electronic transactions among participating
depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to 3:00 p.m. (New York time) to place their purchase
request. Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact the
shareholder's bank via ACH with appropriate instructions. The purchase is
normally credited to the shareholder's account the day following receipt of the
verbal instructions. The Trust may delay the mailing of a check for redemption
proceeds of Trust shares purchased with a check or via Invest-by-Phone service
until the Trust has assured itself that good payment has been collected for the
purchase of the shares, which may take up to 15 days. The Trust and Equity
Planning reserve the right to modify or terminate the Invest-by-Phone service
for any reason or to institute charges for maintaining an Invest-by-Phone
account.
SYSTEMATIC WITHDRAWAL PROGRAM. The Systematic Withdrawal Program allows you
to periodically redeem a portion of your account on a predetermined monthly,
quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations stated
below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. Participants
in the Program redeeming Class C Shares will be subject to any applicable
contingent deferred sales charge. The purchase of shares while participating in
the withdrawal program will ordinarily be disadvantageous to the Class A Shares
investor since a sales charge will be paid by the investor on the purchase of
Class A Shares at the same time as other shares are being redeemed. For this
reason, investors in Class A Shares may not participate in an automatic
investment program while participating in the Systematic Withdrawal Program.
Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any applicable
contingent deferred sales charge on all shares redeemed. Accordingly, the
purchase of Class B Shares will generally not be suitable for an investor who
anticipates withdrawing sums in excess of the above limits shortly after
purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Funds' current Prospectus for further information.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the giving
of not less than 30 days written notice to the shareholder mailed to the address
of record. During the 60-day period the shareholder has the right to add to the
account to bring its value to $200 or more. See the Fund's current Prospectus
for more information.
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BY MAIL
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Trust redeem the shares. See the Funds' current
Prospectus for more information.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
BY CHECK (BOND FUND AND EMERGING MARKETS FUND ONLY)
Any shareholder of these Funds may elect to redeem shares held in his Open
Account by check. Checks will be sent to an investor upon receipt by Equity
Planning of a completed application and signature card (attached to the
application). If the signature card accompanies an individual's initial account
application, the signature guarantee section of the form may be disregarded.
However, the Trust reserves the right to require that all signatures be
guaranteed prior to the establishment of a check writing service account. When
an authorization form is submitted after receipt of the initial account
application, all signatures must be guaranteed regardless of account value.
Checks may be drawn payable to any person in an amount of not less than $500,
provided that immediately after the payment of the redemption proceeds the
balance in the shareholder's Open Account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient number
of full and fractional shares in the shareholder's Open Account will be redeemed
to cover the amount of the check. The number of shares to be redeemed will be
determined on the date the check is received by the Transfer Agent. Presently
there is no charge to the shareholder for the check writing service, but this
may be changed or modified in the future upon two weeks written notice to
shareholders. Checks drawn from Class B and Class C accounts are subject to the
applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables a shareholder to receive
income accruing on the shares to be redeemed until such time as the check is
presented to Equity Planning for payment. Inasmuch as canceled checks are
returned to shareholders monthly, no confirmation statement is issued at the
time of redemption.
Shareholders utilizing withdrawal checks will be subject to Equity Planning's
rules governing checking accounts. A shareholder should make sure that there are
sufficient shares in his Open Account to cover the amount of any check drawn. If
insufficient shares are in the account and the check is presented to Equity
Planning on a banking day on which the Trust does not redeem shares (for
example, a day on which the New York Stock Exchange is closed), or if the check
is presented against redemption proceeds of an investment made by check which
has not been in the account for at least fifteen calendar days, the check may be
returned marked "Non-sufficient Funds" and no shares will be redeemed. A
shareholder may not close his account by a withdrawal check because the exact
value of the account will not be known until after the check is received by
Equity Planning.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Trust may make
payment of the redemption price either in cash or in kind. However, the Trust
has elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Trust at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to them
in computing the net asset value per share of a Fund. A shareholder receiving
such securities would incur brokerage costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
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MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
QUALIFICATION AS A REGULATED INVESTMENT COMPANY ("RIC")
Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund has elected to qualify and intends to remain qualified as a RIC under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). In
each taxable year a Fund qualifies as a RIC, it (but not its shareholders) will
be relieved of federal income tax on that portion of its net investment income
and net capital gains that are currently distributed (or deemed distributed) to
its shareholders. To the extent that a Fund fails to distribute all of its
taxable income, it will be subject to corporate income tax (currently 35%) on
any retained ordinary investment income or short-term capital gains, and
corporate income tax (currently 35%) on any undistributed long-term capital
gains. Each Fund intends to make timely distributions, if necessary, sufficient
in amount to avoid the non-deductible 4% excise tax that is imposed on a RIC to
the extent that it fails to distribute, with respect to each calendar year, at
least 98% of its ordinary income for such calendar year and 98% of its net
capital gains as determined for a one-year period ending on October 31 of such
calendar year (or as determined on a fiscal year basis, if the Fund so elects).
The Code sets forth numerous criteria that must be satisfied in order for
each Fund to qualify as a RIC. Among these requirements, each Fund must meet the
following tests for each taxable year: (a) derive in each taxable year at least
90% of its gross income from dividends, interest and gains from the sale or
other disposition of securities; and (b) meet certain diversification
requirements imposed under the Code at the end of each quarter of the taxable
year. If in any taxable year each Fund does not qualify as a regulated
investment company, all of its taxable income will be taxed at corporate rates.
In addition, if in any tax year the Fund does not qualify as a RIC for state tax
purposes a capital gain dividend may not retain its character in the hands of
the shareholder for state tax purposes.
In the case of the International and Emerging Markets Funds, gains from
foreign currencies (i.e., gains from foreign currency options, foreign currency
futures and foreign currency forward contracts) are anticipated to constitute
qualifying income for purposes of the 90% test.
Section 988 of the Code provides special rules for foreign currency
transactions under which foreign currency gains or losses from forward
contracts, futures contracts that are not required to be marked-to-market and
unlisted options generally will be treated as ordinary income or loss.
In addition to meeting the 90% and 30% tests, in order to qualify as a RIC
each Fund will be required to distribute annually to its shareholders as
dividends (not including "capital gains dividends," discussed below) at least
90% of its ordinary investment income, short-term capital gains and tax exempt
income, with certain modifications. Each Fund intends to make distributions to
shareholders that will be sufficient to meet the 90% distribution requirement.
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Each Fund must also diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of its total assets
consists of cash, cash items, U.S. Government Securities, and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of that Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any issuer (other than U.S. Government
Securities). For purposes of these diversification tests, the issuer of an
option on a particular security is the issuer of the underlying security. In the
case of a stock index futures contract or option thereon, the position taken by
the Internal Revenue Service in a recent letter ruling is that the issuers of
the stocks underlying the index, in proportion to the weighing of the stocks in
the computation of the index, are treated as the issuers of the instrument
irrespective of whether the underlying index is broad- based or narrow-based. In
the case of a foreign currency option, futures contract or forward contract,
however, there is as yet no specific guidance in the tax law concerning who will
be treated as the issuer of such instruments or how they will be valued for
purposes of these diversification tests.
Each Fund intends to comply with all of the foregoing criteria for
qualification as a RIC; however, there can be no assurance that the Fund will so
qualify and continue to maintain its status as a RIC. If a Fund were unable for
any reason to maintain its status as a RIC for any taxable year, adverse tax
consequences would ensue.
TAXATION OF SHAREHOLDERS
The Bond Fund expects that under normal conditions, at least 80% of its net
assets will be invested in state, municipal and other obligations the interest
on which is excluded from gross income for federal income tax purposes, and that
substantially all of its dividends therefore will be exempt interest dividends
which will be treated by its shareholders as excludable from federal gross
income. (The character of tax-exempt interest distributed by the Bond Fund will
flow through as tax-exempt interest to its shareholders provided that 50% or
more of the value of its assets at the end of each quarter of its taxable year
is invested in obligations the interest on which is excluded from gross income
for federal income tax purposes). An exempt interest dividend is any dividend or
part thereof (other than a capital gain dividend) paid by the Bond Fund with
respect to its net federal excludable municipal security interest, and
designated as an exempt interest dividend in a written notice mailed to
shareholders not later than 60 days after the close of the taxable year. The
percentage of total dividends paid by the Bond Fund with respect to any taxable
year which qualify as exempt interest dividends will be the same for all
shareholders receiving dividends with respect to such year. If a shareholder
receives an exempt interest dividend with respect to any share and such share is
held for 6 months or less, any loss on the sale or exchange of such share will
not be allowed to the extent of the exempt interest dividend amount.
Interest on certain "private activity bonds" issued after August 7, 1986,
although otherwise tax-exempt, is treated as a tax preference item for
alternative minimum tax purposes. Under regulations to be promulgated, the Bond
Fund's exempt interest dividends will be treated as a tax preference item for
purposes of computing the alternative minimum tax liability of shareholders in
such Fund to the extent attributable to interest paid on "private activity"
bonds. Corporate shareholders should also be aware that the receipt of exempt
interest dividends could subject them to alternative minimum tax under the
provisions of Code Section 56(f) (relating generally to book income or adjusted
current earnings in excess of taxable income).
Interest on indebtedness incurred or continued by shareholders to purchase or
carry shares of the Bond Fund will not be deductible for federal income tax
purposes to the extent of the portion of the interest expense relating to exempt
interest dividends; that portion is determined by multiplying the total amount
of interest paid or accrued on the indebtedness by a fraction, the numerator of
which is the exempt interest dividends received by a shareholder in the
shareholder's taxable year and the denominator of which is the sum of the exempt
interest dividends and the taxable distributions received by the shareholder.
Distributions by the Mid Cap, International, Real Estate and Emerging Markets
Funds from ordinary investment income and net short-term capital gains will be
taxed to the shareholders as ordinary dividend income to the extent of the
earnings and profits of the respective Funds. Similarly, any portion of the Bond
Fund's dividends which does not qualify as exempt interest dividends and any
short-term capital gain distribution will be taxed to the Bond Fund shareholders
as ordinary income for federal income tax purposes. Ordinary income dividends
received by corporate shareholders will qualify for the 70% dividends-received
deduction to the extent the Funds designate such amounts as qualifying dividend
distributions; however, the portion that may be so designated is subject to
certain limitations. As a result of these limitations, it is not currently
anticipated that certain distributions by Funds will be qualifying dividend
distributions. Distributions by a Fund that are designated as capital gain
distributions will be taxed to the shareholders as capital gains, and will not
be eligible for the corporate dividends-received deduction.
Dividends declared by the Funds to shareholders of record in October,
November or December will be taxable to such shareholders in the year that the
dividend is declared, even if it is not paid until the following year (so long
as it is actually paid by the Fund prior to February 1). Also, shareholders will
be taxable on the amount of long-term capital gains designated by a Fund by
written notice mailed to shareholders within 60 days after the close of the
year, even if such amounts are not actually distributed to them. Shareholders
will be entitled to claim a credit against their own federal income tax
liability for taxes paid by the Fund on such undistributed gains, if any. If a
shareholder receives a long-term capital dividend with respect to any share and
such share is held for less than 6 months, any loss on sale or exchange of such
share will be long-term capital loss to the extent of long-term capital dividend
payments.
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Dividends (other than exempt interest dividends) and capital gain
distributions will be taxable to shareholders as described above whether
received in cash or in shares under a Fund's distribution reinvestment plan.
With respect to distributions received in cash or reinvested in shares purchased
on the open market, the amount of the distribution for tax purposes will be the
amount of cash distributed or allocated to the shareholder. With respect to
distributions made in shares issued by the Fund as a stock dividend, the amount
of the distribution will be the fair market value of the shares on the payment
date.
Shareholders should be aware that the price of shares of a Fund that are
purchased prior to a dividend or distribution by the Fund may reflect the amount
of the forthcoming dividend or distribution. Such dividend or distribution, when
made, would be taxable to shareholders under the principles discussed above even
though the dividend or distribution may reduce the net asset value of shares
below a shareholder's cost and thus represent a return of a shareholder's
investment in an economic sense.
FOREIGN TAX CREDIT
The International Fund may incur liability for foreign income and
withholding taxes on investment income. The Fund intends to qualify for and may
make an election permitted under Section 853 of the Code. The effect of such
election is that the shareholders of such Fund will be able to claim a credit or
deduction on their U.S. federal income tax returns for, and may treat as part of
the amounts distributed to them, their pro rata share of the income taxes paid
by the Fund to foreign countries. (The election is not available unless stocks
or securities in foreign corporations represent more than 50% of the value of
the total assets of the Fund). The shareholders may claim a deduction or credit
by reason of the Fund's election subject to the limitations imposed under
Section 904 of the Code. The deduction for foreign taxes paid may not be claimed
by individual shareholders who do not elect to itemize deductions on their
federal income tax returns although such shareholders may claim a credit for
foreign income taxes paid. In either case, shareholders will be required to
report taxable income in the amount of their respective pro rata share of
foreign taxes paid by the Fund. Although the International Fund intends to meet
the requirements of the Code to "pass through" such taxes, there can be no
assurance that it will be able to do so in the future.
SALE OR EXCHANGE OF FUND SHARES
Gain or loss will be recognized by a shareholder upon the sale of his shares
in a Fund or upon an exchange of his shares in a Fund for shares in another
Fund. Provided that the shareholder is not a dealer in such shares, such gain or
loss will generally be treated as capital gain or loss, measured by the
difference between the adjusted basis of the shares and the amount realized
therefrom. Under current law, capital gains (whether long-term or short-term) of
individuals and corporations are fully includable in income and are taxed at the
regular federal income tax rates applicable to the shareholder's ordinary
income. Capital losses (whether long-term or short-term) may offset capital
gains plus (for non-corporate taxpayers only) up to $3,000 per year of ordinary
income.
TAX INFORMATION
Written notices will be sent to shareholders regarding the tax status of all
distributions made (or deemed to have been made) during each taxable year,
including the tax-exempt portion thereof (if applicable), the amount qualifying
for the dividends-received deduction (if applicable) and the amount designated
as capital gains dividends, undistributed capital gains (if any), tax credits
(if applicable), and cumulative return of capital (if any).
BACKUP WITHHOLDING
The Funds may be required to withhold federal income tax at a rate of 31% on
reportable dividends paid to certain noncorporate shareholders. Generally,
shareholders subject to such backup withholding will be those for whom a
taxpayer identification number and certain required certifications are not filed
with the Funds or who, to a Fund's knowledge, have furnished an incorrect
number.
FOREIGN SHAREHOLDERS
Dividends paid by a Fund from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien individual,
a foreign trust or estate, a foreign corporation or a foreign partnership (a
"foreign shareholder") will be subject to United States withholding tax at a
rate of 30% unless a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Foreign shareholders are urged to consult
their own tax advisors concerning the applicability of the United States
withholding tax and any foreign taxes.
OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences, described above,
applicable to an investment in a Fund, there may be state or local tax
considerations and estate tax considerations applicable to the circumstances of
a particular investor. In particular, distributions by the Bond Fund may be
subject to state and local taxation even though wholly or partially exempt for
federal income tax purposes. The foregoing discussion is based upon the Code,
judicial decisions and administrative regulations, rulings and practices, all of
which are subject to change and which, if changed, may be applied retroactively
to a Fund, its shareholders and/or its assets. No rulings have been sought from
the Internal Revenue Service with respect to any of the tax matters discussed
above.
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The information included in the Prospectus with respect to taxes, in
conjunction with the foregoing, is a general and abbreviated summary of
applicable provisions of the Code and Treasury regulations now in effect as
currently interpreted by the courts and the Internal Revenue Service. The Code
and these Regulations, as well as the current interpretations thereof, may be
changed at any time by legislative, judicial, or administrative action.
THE DISTRIBUTOR
Equity Planning, a registered broker-dealer which is an indirect less than
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company, serves as
Distributor of the Trust's shares. Philip R. McLoughlin, a Trustee and President
of the Trust, is a director and officer of Equity Planning. Michael E. Haylon,
an officer of the Trust, is a director of Equity Planning; and G. Jeffrey Bohne,
Nancy G. Curtiss, William R. Moyer, and Leonard J. Saltiel, officers of the
Trust, are officers of Equity Planning.
The Trust and Equity Planning have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Trust shares and the Trust has granted to Equity Planning the exclusive right to
purchase from the Trust and resell, as principal, shares needed to fill
unconditional orders for Trust shares. Equity Planning may sell Trust shares
through its registered representatives or through securities dealers with whom
it has sales agreements. Equity Planning may also sell Trust shares pursuant to
sales agreements entered into with bank-affiliated securities brokers who,
acting as agent for their customers, place orders for Trust shares with Equity
Planning. Although the Glass-Steagall Act prohibits banks and bank affiliates
from engaging in the business of underwriting, distributing or selling
securities (including mutual fund shares), banking regulators have indicated
that such institutions are not prohibited from purchasing mutual fund shares
upon the order and for the account of their customers. If, because of changes in
law or regulations, or because of new interpretations of existing law, it is
determined that agency transactions of banks and bank affiliated securities
brokers are not permitted under the Glass-Steagall Act, the Trustees will
consider what action, if any, is appropriate. In addition, state securities laws
on this issue may differ from federal law, and banks and bank affiliates may be
required to register as securities dealers pursuant to state law. It is not
anticipated that termination of sales agreements with banks and bank affiliated
securities brokers would result in a loss to their customers or a change in the
net asset value per share of a Fund of the Trust.
For its services under the distribution agreements, Equity Planning receives
sales charges on transactions in Trust shares and retains such charges less the
portion thereof allowed to its registered representatives and to securities
dealers and securities brokers with whom it has sales agreements. In addition,
Equity Planning may receive payments from the Trust pursuant to the Distribution
Plans described below. For the fiscal years ended November 30, 1996, 1997 and
1998, purchasers of shares of the Funds paid aggregate sales charges of
$1,599,637, $2,114,382 and $4,260,271, respectively, of which the Distributor
received net commission of $258,916, $494,335 and $545,050, respectively, for
its services, the balance being paid to dealers. For the fiscal year ended
November 30, 1998, the distributor received net commission of $122,184 for Class
A Shares and deferred sales charges of $422,867 for Class B and C Shares.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as described below.
<TABLE>
<CAPTION>
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50 4.71 4.00
$100,000 but under $250,000 3.50 3.63 3.00
$250,000 but under $500,000 3.00 3.09 2.75
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan (the "Plan") due to waiver of the CDSC for
these Plan participants' purchases. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Trust and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares;
30
<PAGE>
access to sales personnel and information dissemination services; provision of
recordkeeping and administrative services to qualified employee benefit plans;
and other criteria as established by the Distibutor. Depending on the nature of
the services, these fees may be paid either from the Trust through distribution
fees, service fees or transfer agent fees or in some cases, the Distributor may
pay certain fees from its own profits and resources. From its own profits and
resources, the Distributor does intend to: (a) sponsor training and educational
meetings and provide additional compensation to qualifying dealers in the form
of trips, merchandise or expense reimbursements; (b) from time to time, pay
special incentive and retention fees to qualified wholesalers, registered
financial institutions and third party marketers; (c) pay broker/dealers an
amount equal to 1% of the first $3 million of Class A Share purchases by an
account held in the name of a qualified employee benefit plan with at least 100
eligible employees, 0.50% on the next $3 million, plus 0.25% on the amount in
excess of $6 million; and (d) excluding purchases as described in (c) above, pay
broker/dealers an amount equal to 1% of the amount of Class A Shares sold above
$1 million but under $3 million, 0.50% on the next $3 million, plus 0.25% on the
amount in excess of $6 million. If part or all of such investment, including
investments by qualified employee benefit plans, is subsequently redeemed within
one year of the investment date, the broker/dealer will refund to the
Distributor such amounts paid with respect to the investment. In addition, the
Distributor may pay the entire applicable sales charge on purchases of Class A
Shares to selected dealers and agents. From its own resources, the Distributor
intends to pay the following additional compensation to Merrill Lynch, Pierce,
Fenner & Smith, Incorporated: 0.25% on sales of Class A and B Shares, 0.10% on
sales of Class C Shares, 0.10% on sales of Class A shares sold at net asset
value, and 0.10% annually on the average daily net asset value of fund shares on
which Merrill Lynch is broker of record and which such shares exceed the amount
of assets on which Merrill Lynch is broker of record as of July 1, 1999. Any
dealer who receives more than 90% of a sales charge may be deemed to be an
"underwriter" under the Securities Act of 1933. Equity Planning reserves the
right to discontinue or alter such fee payment plans at any time.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Trust and as such
performs administrative, bookkeeping and pricing functions for the Funds. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented costs to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Funds, at the following incremental
annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Funds, PFPC, Inc. also charges minimum fees and additional fees to each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For services to the
Trust during the fiscal years ended November 30, 1996, 1997 and 1998, the
Financial Agent received fees of $243,021, $541,814 and $654,165, respectively.
DISTRIBUTION PLANS
The Trust has adopted separate amended and restated distribution plans under
Rule 12b-1 of the 1940 Act for each class of shares of each Fund of the Trust
(the "Class A Plan," the "Class B Plan," the "Class C Plan," and collectively
the "Plans"). The Plans permit the Trust to pay for services and to reimburse
the Distributor for expenses incurred in connection with activities intended to
promote the sale of shares of each class of shares of the Trust.
Pursuant to the Plans, the Trust shall pay the Distributor for actual
expenses of the Distributor of 0.25% of the average daily net assets of the
Trust's average daily net assets for providing services to shareholders,
including assistance with inquiries related to shareholder accounts (the
"Service Fee"). Pursuant to the Class B Plan, the Trust may reimburse the
Distributor monthly for actual expenses of the Distributor up to 0.75% annually
of the average daily net assets of each Fund's Class B Shares. Pursuant to the
Class C Plan, the Trust may reimburse the Distributor monthly for actual
expenses of the Distributor up to 0.75%, 0.75% and 0.75% annually of the average
daily net assets of the Emerging Markets, Income, and International Funds' Class
C Shares, respectively.
Expenditures under the Plans shall consist of: (i) commissions to sales
personnel for selling shares of the Trust (including underwriting fees and
financing expenses incurred in connection with the payment of commissions); (ii)
compensation, sales incentives and payments to sales, marketing and service
personnel; (iii) payments to broker-dealers and other financial institutions
31
<PAGE>
which have entered into agreements with the Distributor in the form of the
Dealer Agreement for Phoenix Funds for services rendered in connection with the
sale and distribution of shares of the Funds; (iv) payment of expenses incurred
in sales and promotional activities, including advertising expenditures related
to the Funds; (v) the costs of preparing and distributing promotional materials;
(vi) the cost of printing the Trust's Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Trustees determine are reasonably calculated to result
in the sale of shares of the Trust.
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Trust shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
Each Plan requires that at least quarterly the Trustees of the Trust review a
written report with respect to the amounts expended under the Plans and the
purposes for which such expenditures were made. While the Plans are in effect,
the Trust will be required to commit the selection and nomination of candidates
for Trustees who are not interested persons of the Trust to the discretion of
other Trustees who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is approved annually in advance
by votes of the majority of both (a) the Board of Trustees of the Trust and (b)
the Rule 12b-1 Trustees, cast in person at a meeting called for the purpose of
voting on the Plan and any agreements related to the Plan.
For the fiscal year ended November 30, 1998 the Trust paid Rule 12b-1 Fees in
the amount of $2,708,081, of which the Distributor received $1,025,897,
unaffiliated broker-dealers received $1,404,016 and W.S. Griffith & Co., Inc.,
an affiliate, received $278,168. The Rule 12b-1 payments were used for (1)
compensating dealers, $3,182,864, (2) compensating sales personnel, $1,736,570,
(3) advertising, $815,800, (4) printing and mailing of prospectuses to other
than current shareholders, $60,074, (5) service costs, $236,653 and (6) other,
$314,389. No interested person of the Trust and no Trustee who is not an
interested person of the Trust, as that term is defined in the Investment
Company Act of 1940, had any direct or indirect financial interest in the
operation of the Plans.
MANAGEMENT OF THE TRUST
The Trust is an open-end management investment company known as a mutual
fund. The Trustees of the Trust ("Trustees") are responsible for the overall
supervision of the Trust and perform the various duties imposed on Trustees by
the Investment Company Act of 1940 and Massachusetts business trust law.
TRUSTEES AND OFFICERS
The Trustees and Officers of the Trust and their business affiliations for
the past five years are set forth below and, unless otherwise noted, the address
of each Trustee and executive officer is 56 Prospect Street, Hartford,
Connecticut, 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
Robert Chesek (64) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present). Vice President,
Common Stock, Phoenix Home Life Mutual Insurance Company
(1980-1994).
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
E. Virgil Conway (69) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present) (Chairman, 1998-present), Accuhealth
(1994-present), Trism, Inc. (1994-present), Realty Foundation of
New York (1972-present), New York Housing Partnership Development
Corp. (Chairman) (1981-present), and Academy of Political Science
(Vice Chairman) (1985-present). Director/Trustee, Phoenix Funds
(1993-present). Trustee, Phoenix-Aberdeen Series Fund and Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present). Member,
Audit Committee of the City of New York (1981-1996). Advisory
Director, Blackrock Fannie Mae Mortgage Securities Fund
(1989-1996) and Fund Directions (1993-1998). Chairman, Financial
Accounting Standards Advisory Council (1992-1995).
Harry Dalzell-Payne (69) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff & Phelps
New York, NY 10016 Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Director, Farragut
Mortgage Co., Inc. (1991-1994). Formerly a Major General of the
British Army.
*Francis E. Jeffries (68) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps
Apt. 1601 Institutional Mutual Funds (1996-present). Director, Duff & Phelps
Naples, FL 33963 Utilities Income Inc. (1987-present), Duff & Phelps Utilities
Tax-Free Income Inc. (1991-present) and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1993-present). Director, The Empire
District Electric Company (1984-present). Director (1989-1997),
Chairman of the Board (1993-1997), President (1989-1993), and
Chief Executive Officer (1989-1995), Phoenix Investment Partners,
Ltd.
Leroy Keith, Jr. (60) Trustee Chairman and Chief Executive Officer, Carson Products Company
Chairman and Chief (1995-present). Director/Trustee, Phoenix Funds (1980-present).
Executive Officer Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Carson Product Company Institutional Mutual Funds (1996-present). Director, Equifax Corp.
64 Ross Road (1991-present) and Evergreen International Fund, Inc.
Savannah, GA 30750 (1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust. President, Morehouse College
(1987-1994). Chairman and Chief Executive Officer, Keith Ventures
(1992-1994).
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
*Philip R. McLoughlin (52) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-present), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990- present), Phoenix Equity
Planning Corporation. Director (1993-present), Chairman
(1993-present) and Chief Executive Officer (1993-1995), National
Securities & Research Corporation. Director, Phoenix Realty Group,
Inc. (1994-present), Phoenix Realty Advisors, Inc. (1987-present),
Phoenix Realty Investors, Inc. (1994-present), Phoenix Realty
Securities, Inc. (1994-present), PXRE Corporation (Delaware)
(1985-present), and World Trust Fund (1991-present). Director and
Executive Vice President, Phoenix Life and Annuity Company
(1996-present). Director and Executive Vice President, PHL
Variable Insurance Company (1995-present). Director, Phoenix
Charter Oak Trust Company (1996-present). Director and Vice
President, PM Holdings, Inc. (1985-present). Director and
President, Phoenix Securities Group, Inc. (1993-1995). Director
(1992-present) and President (1992-1994), W.S. Griffith & Co.,
Inc. Director, Townsend Financial Advisers, Inc. (1992-present),
Director, PHL Associates, Inc. (1995-present).
Everett L. Morris (70) Trustee Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen
Colts Neck, NJ 07722 Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1991-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1993-present).
*James M. Oates (52) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present). Director, AIB Govett
Boston, MA 02109 Funds (1991-present), Blue Cross and Blue Shield of New Hampshire
(1994-present), Investors Financial Service Corporation
(1995-present), Investors Bank & Trust Corporation
(1995-present), Plymouth Rubber Co. (1995-present), Stifel
Financial (1996-present), Command Systems, Inc. (1998-present)
and Connecticut River Bancorp (1998-present). Vice Chairman,
Massachusetts Housing-Partnership (1998-present). Member, Chief
Executives Organization (1996-present). Director (1984-1994),
President (1984-1994) and Chief Executive Officer (1986-1994),
Neworld Bank.
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
*Calvin J. Pedersen (57) Trustee Director (1986-present), President (1993-present) and Executive
Phoenix Duff & Phelps Vice President (1992-1993), Phoenix Investment Partners, Ltd.
Corporation Director/ Trustee, Phoenix Funds (1995-present). Trustee,
55 East Monroe Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 3600 Institutional Mutual Funds (1996-present). President and Chief
Chicago, IL 60603 Executive Officer, Duff & Phelps Utilities Tax-Free Income Inc.
(1995-present), Duff & Phelps Utilities Income Inc.
(1994-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1995-present).
Herbert Roth, Jr. (70) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company (1978-present), Phoenix Home Life Mutual Insurance
Company (1972-1998), Landauer, Inc. (medical services)
(1970-present), Tech Ops./Sevcon, Inc. (electronic controllers)
(1987-present), and Mark IV Industries (diversified manufacturer)
(1985-present). Member, Directors Advisory Council, Phoenix Home
Life Mutual Insurance Company (1998-present). Director, Key
Energy Group (oil rig service) (1988-1994). Director/Trustee, the
National Affiliated Investment Companies (until 1993).
Richard E. Segerson (53) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Managing Director,
Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (67) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present). Director, UST Inc.
(1995-present), HPSC Inc. (1995-present), Duty Free International,
Inc. (1997-present) and Compuware (1996-present) and Burroughs
Wellcome Fund (1996-present). Visiting Professor, University of
Virginia (1997-present). Chairman, Dresing, Lierman, Weicker
(1995-1996). Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (41) Executive Director and Executive Vice President--Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Executive Vice
President President, Phoenix Funds (1993-present) and Phoenix-Aberdeen
Series Fund (1996-present). Executive Vice President
(1997-present), Vice President (1996-1997), Phoenix Duff & Phelps
Institutional Mutual Funds. Director (1994-present), President
(1995-present), Executive Vice President (1994-1995), Vice
President (1991-1994), Phoenix Investment Counsel, Inc. Director
(1994-present), President (1996-present), Executive Vice President
(1994-1996), Vice President (1993-1994), National Securities &
Research Corporation. Director, Phoenix Equity Planning
Corporation (1995-present). Senior Vice President, Securities
Investments, Phoenix Home Life Mutual Insurance Company
(1993-1995). Various other positions with Phoenix Home Life Mutual
Insurance Company (1990-1993).
John F. Sharry (47) Executive Managing Director, Retail Distribution, Phoenix Equity Planning
Vice Corporation (1995-present). Executive Vice President, Phoenix
President Funds (1998-present) and Phoenix-Aberdeen Series Fund
(1998-present). Managing Director, Director and National Sales
Manager, Putnam Mutual Funds (until 1995).
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
Gail P. Seneca (45) Senior Vice Senior Vice President, Phoenix Strategic Allocation Fund, Inc.
President (1998-present), Phoenix Multi-Portfolio Fund (1998-present).
Managing Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present). Senior Vice President, The Phoenix Edge Series
Fund (1998-present) and Phoenix Strategic Equity Series Fund
(1998-present). President and Chief Executive and Investment
Officer, Seneca Capital Management LLC (1996-present). Managing
General Partner and Chief Executive and Investment Officer,
GMG/Seneca Capital Management LP (1989-present). President and
Trustee, Phoenix-Seneca Funds (1996-present). General Partner,
Genesis Merchant Group. LP (1990-present). President, GenCap, Inc.
(1994-present).
James D. Wehr (41) Senior Vice Senior Vice President (1998-present), Managing Director, Fixed
President Income (1996-1998), Vice President (1991-1996), Phoenix Investment
Counsel, Inc. Senior Vice President (1998-present), Managing
Director, Fixed Income (1996-1998), Vice President (1993-1996),
National Securities & Research Corporation. Senior Vice President
(1997-present), Vice President (1988-1997) Phoenix Multi-Portfolio
Fund; Senior Vice President (1997-present), Vice President
(1990-1997) Phoenix Series Fund; Senior Vice President
(1997-present), Vice President (1991-1997) The Phoenix Edge Series
Fund; Senior Vice President (1997-present), Vice President
(1993-1997) Phoenix California Tax Exempt Bonds, Inc., and Senior
Vice President (1997-present), Vice President (1996-1997) Phoenix
Duff & Phelps Institutional Mutual Funds. Senior Vice President
(1997-present) Phoenix Multi-Sector Fixed Income Fund, Inc., Phoenix
Multi-Sector Short Term Bond Fund, Phoenix Income and Growth Fund and
Phoenix Strategic Allocation Fund, Inc. Managing Director, Public
Fixed Income, Phoenix Home Life Insurance Company (1991-1995).
David L. Albrycht (37) Vice Managing Director, Fixed Income (1996-present) and Vice President
President (1995-1996), Phoenix Investment Counsel, Inc. Managing Director,
Fixed Income (1996-present) and Investment Officer (1994-1996),
National Securities & Research Corporation. Vice President,
Phoenix Multi-Portfolio Fund (1993-present), Phoenix Multi-Sector
Short Term Bond Fund (1993-present), Phoenix Multi-Sector Fixed
Income Fund, Inc. (1994-present), The Phoenix Edge Series Fund
(1997-present) and Phoenix Series Fund (1997-present). Fund
Manager, Phoenix Home Life Mutual Insurance Company (1994-1995).
Timothy M. Heaney (33) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Investment Analyst (1995-1996),
Phoenix Investment Counsel, Inc. Vice President, Phoenix
Multi-Portfolio Fund (1996-present). Managing Director, Fixed
Income (1997-present), Director, Fixed Income Research
(1996-1997), National Securities & Research Corporation.
Investment Analyst, Phoenix Home Life Mutual Insurance Company
(1992-1994). Vice President, Phoenix California Tax Exempt Bonds,
Inc. (1996-present) and Duff & Phelps Utilities Tax Free Income,
Inc. (1997-present).
Ron K. Jacks (33) Vice Managing Director, Equities, Phoenix Investment Counsel, Inc.
President (1998-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Strategic Equity Series Fund
(1998-present), and Phoenix Multi-Portfolio Fund (1998-present).
Secretary, Phoenix-Seneca Funds (1996-1998). Trustee,
Phoenix-Seneca Funds (1996-1997). General Partner and Equity
Portfolio Manager, GMG/Seneca Capital Management LP
(1995-present). Equity Portfolio Manager, Seneca Capital
Management LLC (1996-present).
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
Peter S. Lannigan (38) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Vice President (1995-1996), Phoenix
Investment Counsel, Inc. Managing Director, Fixed Income
(1998-present), Director, Fixed Income Research (1996-present),
National Securities & Research Corporation, Inc. Vice President,
Phoenix Multi-Portfolio Fund (1995-present). Director, Public
Fixed Income, Phoenix Home Life Mutual Insurance Company
(1993-1995). Various positions with Standard & Poor's Corporation
(1989-1993).
William R. Moyer (54) Vice Senior Vice President and Chief Financial Officer, Phoenix Duff &
100 Bright Meadow Blvd. President Phelps Corporation (1995-present). Senior Vice President, Finance
PO Box 2200 (1990-present), Director (1998-present), Treasurer (1998-present
Enfield, CT 06083-2200 and 1994-1996), and Chief Financial Officer (1996-present),
Phoenix Equity Planning Corporation. Senior Vice President
(1990-present), Director (1998-present), Chief Financial Officer
(1996-present) and Treasurer (1994-present), Phoenix Investment
Counsel, Inc. Senior Vice President, Finance (1993-present), Chief
Financial Officer (1996-present), and Treasurer (1994-present),
National Securities & Research Corporation. Senior Vice President
and Chief Financial Officer, Duff & Phelps Investment Management
Co. (1996-present). Vice President, Phoenix Funds (1990-present),
Phoenix-Duff & Phelps Institutional Mutual Funds (1996-present)
and Phoenix-Aberdeen Series Fund (1996-present). Senior Vice
President and Chief Financial Officer, W. S. Griffith & Co., Inc.
(1992-1995) and Townsend Financial Advisers, Inc. (1993-1995). Vice
President, the National Affiliated Investment Companies (until
1993). Vice President, Investment Products Finance, Phoenix Home
Life Mutual Insurance Company (1990-1995).
Richard D. Little (50) Vice Managing Director, Equities, Phoenix Investment Counsel, Inc.
President (1998-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Strategic Equity Series Fund
(1998-present), and Phoenix Multi-Portfolio Fund (1998-present).
Director of Equities, Seneca Capital Management LLC
(1996-present). General Partner and Director of Equities, Seneca
Capital Management LP (1989-present).
Leonard J. Saltiel (45) Vice Managing Director, Operations and Service (1996-present), Senior
President Vice President, (1994-1996), Phoenix Equity Planning Corporation.
Vice President, Phoenix Funds (1994-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), and Phoenix-Aberdeen
Series Fund (1996-present). Vice President, National Securities &
Research Corporation (1994-1996). Vice President, Investment
Operations, Phoenix Home Life Mutual Insurance Company (1994-1995).
Various positions with Home Life Insurance Company and Phoenix Home
Life Mutual Insurance Company (1987-1994).
Michael Schatt (51) Vice Managing Director, Phoenix Investment Partners, Ltd.
President (1994-present). Senior Vice President, Phoenix Realty Securities,
Inc. (1997-present). Vice President, Duff & Phelps Investment
Management Co. (1997-present), Duff & Phelps Utilities Income,
Inc. (1997-present), Phoenix Duff & Phelps Institutional Mutual
Funds (1997-present), The Phoenix Edge Series Fund (1997-present),
and Phoenix Multi-Portfolio Fund (1997-present). Director, Real
Estate Advisory Practice, Coopers & Lybrand (1990-1994).
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
- --------------------- -------------- -----------------------
<S> <C> <C>
Nancy G. Curtiss (46) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Aberdeen Series Fund
(1996-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995). Various positions with Phoenix Home Life Insurance
Company (1987-1994).
G. Jeffrey Bohne (51) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Vice President, Transfer Agent
Greenfield, MA 01301 Operations (1993-1996), Vice President, Mutual Fund Customer
Service (1996-present), Phoenix Equity Planning Corporation.
Secretary/Clerk, Phoenix Funds (1993-present), Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Aberdeen Series Fund (1996-present). Vice President, Home
Life of New York Insurance Company (1984-1992). Clerk, Phoenix
Investment Council (1995-present).
</TABLE>
_______________________
*Trustees identified with an asterisk are considered to be interested persons
of the Trust (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation or Phoenix Investment Partners, Ltd.
For services rendered to the Trust for the fiscal year ended November 30,
1998, the Trustees received an aggregate of $92,876. For services on the Boards
of Directors/Trustees of the Phoenix Funds, each Trustee who is not a full-time
employee of the Adviser or any of its affiliates currently receives a retainer
at the annual rate of $40,000 and a fee of $2,500 per joint meeting of the
Boards. Each Trustee who serves on the Audit Committee receives a retainer at
the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee meeting
attended. Each Trustee who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of Trustees.
Trustee fee costs are allocated equally to each of the Funds and the Funds
within the Phoenix Funds complex. The foregoing fees do not include
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of the Adviser who are not interested persons are
compensated for their services by the Adviser and receive no compensation from
the Trust.
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (14 FUNDS)
NAME FROM FUND OF FUND EXPENSES UPON RETIREMENT PAID TO TRUSTEES
- ---------------------- --------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Robert Chesek $8,019 $60,000
E. Virgil Conway[dagger] $10,625 $79,500
Harry Dalzell-Payne[dagger] $9,559 $71,250
Francis E. Jeffries $7,986 $60,000
Leroy Keith, Jr. $8,368 None None $62,500
Philip R. McLoughlin[dagger] $0 for any for any $0
Everett L. Morris[dagger] $9,177 Trustee Trustee $69,500
James M. Oates[dagger] $9,177 $68,750
Calvin J. Pedersen $0 $0
Herbert Roth, Jr.[dagger] $11,007 $81,250
Richard E. Segerson $9,434 $70,750
Lowell P. Weicker $9,434 $70,000
</TABLE>
______________________
*This compensation (and the earnings thereon) will be deferred pursuant to the
Deferred Compensation Plan. At December 31, 1998, the total amount of deferred
compensation (including interest and other accumulation earned on the original
amounts
38
<PAGE>
deferred) accrued for Messrs. Jeffries, Morris and Roth was $175,029, $151,807
and $147,653, respectively. At present, by agreement among the Fund, the
Distributor and the electing director, director fees that are deferred are paid
by the Fund to the Distributor. The liability for the deferred compensation
obligation appears only as a liability of the Distributor.
[dagger]Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
At ________, 1999, the Trustees and officers as a group owned less than 1% of
the then outstanding shares of the Trust.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of ________, 1999 with respect
to each person who owns of record or is known by the Trust to own of record or
beneficially own 5% or more of any class of the Funds' equity securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER NAME OF FUND NUMBER OF SHARES PERCENT OF CLASS
- ------------------- ------------ ---------------- ----------------
<S> <C> <C> <C>
Phoenix Home Life Emerging Markets Class A
One American Row Emerging Markets Class C
Hartford, CT 06115 Real Estate Class A
Income Class X
MLPF&S for the sole benefit Emerging Markets Class B
of its customers Emerging Markets Class C
ATTN: Fund Administration International Class A
4800 Deer Lake Dr E 3rd FL International Class B
Jacksonville, FL 32246-6484 Bond Class B
Real Estate Class B
Phoenix Charter Oak Trust Co. TTEE International Class A
Phoenix Home Life Employee Pension Plan
One American Row
Hartford, CT 06103
Norwest Bank Iowa N.A. Emerging Markets Class C
ATTN: Trust Operations
822 Central PO Box 658
Ft. Dodge, IA 50501-0658
Don M Sears Emerging Markets Class C
Glenda R Sears
1526 S 105th St
Omaha, NE 68124-1012
Elmer J Krauss Partner Emerging Markets Class C
Krauss Portfolio Ltd
715 N Sherrill St
Tampa, FL 33609-1109
Dain Rauscher Custodian Emerging Markets Class C
Jerome A Hofelt
6202 Revere Place
Dallas, TX 75214-3044
</TABLE>
ADDITIONAL INFORMATION
The Trust's Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the
Securities and Exchange Commission which may be obtained from the Commission's
principal office at 450 Fifth Street, N.W., Washington, DC 20549, upon payment
of the fee prescribed by the rules and regulations promulgated by the
Commission.
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
series or "Funds" and different classes of those Funds. Holders of shares of a
Fund are entitled to one full vote for each full share owned and a fractional
vote for any fractional share. Shares of a Fund participate equally in dividends
and distributions paid with respect to such Fund and in such Fund's net assets
on liquidation, except that Class B and C Shares of any Fund which bear higher
distribution fees and, certain incrementally higher expenses associated with the
deferred sales arrangement, pay correspondingly lower dividends per share than
Class A Shares of the same Fund. Shareholders of all Funds
39
<PAGE>
vote on the election of Trustees. On matters affecting an individual Fund (such
as approval of an investment advisory agreement or a change in fundamental
investment policies), and on matters affecting an individual class (such as
approval of matters relating to a Distribution Plan for a particular class of
shares), a separate vote of that Fund or Class is required. Shares of a Fund are
fully paid and non-assessable when issued and are transferable and redeemable.
Shares have no preemptive or conversion rights (other than as described herein).
The assets received by the Trust for the issue or sale of shares of a Fund
and any class thereof and all income, earnings, profits and proceeds thereof,
subject only to the rights of creditors, are allocated to such Fund and Class
respectively, subject only to the rights of creditors, and constitute the
underlying assets of such Fund or Class. Any underlying assets of a Fund are
required to be segregated on the books of account and are to be charged with the
expenses in respect to such Fund and with a share of the general expenses of the
Trust. Any general expenses of the Trust not readily identifiable as belonging
to a particular Fund or Class will be allocated by or under the direction of the
Trustees in such manner as the Trustees determine to be fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders will not be subject to any personal liability for the acts or
obligations of the Trust and that every written agreement, undertaking or
obligation made or issued by the Trust shall contain a provision to that effect.
The Declaration of Trust provides for indemnification out of the Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability, which is considered remote, is limited
to circumstances in which the Trust itself would be unable to meet its
obligations.
FINANCIAL STATEMENTS
The Financial Statements for the Fund's fiscal year ended November 30, 1998
and for the period ended May 31, 1999, appearing in the Fund's 1998 Annual
Report and 1999 Semiannual Report to Shareholders, are incorporated herein by
reference.
REPORTS TO SHAREHOLDERS
The fiscal year of the Trust ends on November 30. The Trust will send
financial statements to its shareholders at least semiannually. An annual report
containing financial statements audited by the Trust's independent accountants,
will be sent to shareholders each year.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIANS AND TRANSFER AGENT
The custodian of the assets of the Bond Fund, Mid Cap Fund, Real Estate Fund,
Emerging Markets Fund and After-Tax Growth Fund is State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts, 02101. The custodian of the assets
of the International Fund is Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109. The Trust has authorized the custodians to appoint
one or more subcustodians for the assets of the Trust held outside the United
States. The securities and other assets of each Fund of the Trust are held by
each Custodian or any subcustodian separate from the securities and assets of
each other Fund.
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Trust (the "Transfer Agent") for
which it is paid $22.25 for each designated daily dividend shareholder account
and $17.95 for each designated non-daily dividend shareholder account plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents shall be paid a fee by the Transfer Agent.
40
<PAGE>
APPENDIX
A-1 AND P-1 COMMERCIAL PAPER RATINGS
The Trust will only invest in commercial paper which at the date of
investment is rated A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Services, Inc., or, if not rated, is issued or guaranteed by companies
which at the date of investment have an outstanding debt issue rated AA or
higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt-edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they compromise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate
and thereby not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA: This is the highest rating ssigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.
41
<PAGE>
AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small
degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and
interest for bonds in this category than for bonds in the A category.
BB, B,
CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to issuer's capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
D: Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.
The D rating also will be used upon the filing of a bankruptcy
petition if debt service payments are jeopardized.
42
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a.1 Agreement and Declaration of Trust, filed via EDGAR as Exhibit
1.1 with Post-Effective Amendment No. 20, on March 28, 1997,
and incorporated herein by reference.
a.2 Amendment to Declaration of Trust, filed via EDGAR as Exhibit
1.2 with Post-Effective Amendment No. 20, on March 28, 1997,
and incorporated herein by reference.
a.3 Amendment to Declaration of Trust, filed via EDGAR as Exhibit
1.3 with Post-Effective Amendment No. 20, on March 28, 1997,
and incorporated herein by reference.
a.4 Amendment to Declaration of Trust adding the Phoenix Real
Estate Securities Portfolio, filed via EDGAR as Exhibit 1.4
with Post-Effective Amendment No. 20, on March 28, 1997, and
incorporated herein by reference.
a.5 Amendment to Declaration of Trust designating Classes of
Shares, filed via EDGAR as Exhibit 1.5 with Post-Effective
Amendment No. 20, on March 28, 1997, and incorporated herein by
reference.
a.6 Amendment to Declaration of Trust adding the Phoenix Emerging
Markets Bond Portfolio, filed via EDGAR as Exhibit 1.6 with
Post-Effective Amendment No. 17 on August 29, 1995, and
incorporated herein by reference.
a.7 Amendment to Declaration of Trust changing the name of the
Phoenix Endowment Fixed-Income Portfolio to Phoenix Diversified
Income Portfolio, filed via EDGAR as Exhibit 1.7 with
Post-Effective Amendment No. 19 on April 19, 1996, and
incorporated herein by reference.
a.8 Amendment to Declaration of Trust changing the name of the
Phoenix Capital Appreciation Portfolio to Phoenix Mid Cap
Portfolio dated May 22, 1996, filed via EDGAR as Exhibit 1.8
with Post-Effective Amendment No. 20, on March 28, 1997, and
incorporated herein by reference.
a.9 Amendment to Declaration of Trust changing the name of Phoenix
Diversified Income Portfolio to Phoenix-Strategic Income Fund
and designating Classes of Shares, filed via EDGAR as Exhibit
1.9 with Post-Effective Amendment No. 22 on January 26, 1998
and incorporated herein by reference.
a.10 Amendment to Declaration of Trust abolishing Class M Shares
filed via EDGAR with Post-Effective Amendment No. 25 on March
30, 1999 and incorporated by reference.
a.11 Amendment to Declaration of Trust changing the names of each of
the portfolios filed via EDGAR with Post-Effective Amendment
No. 25 on March 30, 1999 and incorporated by reference.
b. None.
c. Reference is made to Article III of Registrant's Agreement and
Declaration of Trust, as amended, and filed with those
Registration Statements referred to in Exhibit 1, above.
d.1 Form of Investment Advisory Agreement between the Registrant
and Phoenix Investment Counsel, Inc. covering the Phoenix
Tax-Exempt Bond, Phoenix Capital Appreciation, Phoenix
International and Phoenix Endowment Equity Portfolios, filed
via EDGAR as Exhibit 5.1 with Post-Effective Amendment No. 20,
on March 28, 1997, and incorporated herein by reference.
d.2 Investment Advisory Agreement between Registrant and Phoenix
Realty Securities, Inc. dated February 28, 1995, and assigned
March 2, 1998 to Duff & Phelps Investment Management Co., filed
via EDGAR as Exhibit 5.2 with Post-Effective Amendment No. 23
on March 27, 1998, and incorporated herein by reference.
d.3 Subadvisory Agreement dated November 19, 1997 among the
Registrant, Phoenix Realty Securities, Inc. and Duff & Phelps
Investment Management Co., covering the Real Estate Securities
Portfolio, filed via EDGAR as Exhibit 5.4 with Post-Effective
Amendment No. 23 on March 27, 1998, and incorporated herein by
reference.
d.4 Subadvisory Agreement dated June 26, 1998 between Registrant
and Seneca Capital Management LLC, covering Phoenix-Seneca Mid
Cap Fund, filed via EDGAR with Post-Effective Amendment No. 24
on January 27, 1999, and incorporated herein by reference.
d.5 Subadvisory Agreement dated October 27, 1998 between Registrant
and Aberdeen Fund Managers Inc., covering Phoenix-Aberdeen
International Fund, filed via EDGAR with Post-Effective
Amendment No. 24 on January 27, 1999, and incorporated herein
by reference.
C-1
<PAGE>
e.1 Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation dated November 19, 1997, filed via EDGAR
as Exhibit 6.1 with Post-Effective Amendment No. 22 on January
26, 1998, and incorporated herein by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, filed via EDGAR as Exhibit 6.2 with
Post-Effective Amendment No. 23 on March 27, 1998, and
incorporated herein by reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement,
filed via EDGAR as Exhibit 6.3 with Post-Effective Amendment
No. 22 on January 26, 1998, and incorporated herein by
reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix
Family of Funds, filed via EDGAR as Exhibit 6.4 with
Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
f. None.
g.1 Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997, filed via EDGAR as Exhibit 8.1
with Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
g.2 Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. covering the Phoenix International Portfolio,
filed via EDGAR as Exhibit 8.2 with Post-Effective Amendment
No. 20, on March 28, 1997, and incorporated herein by
reference.
h.1 A corrected Amended and Restated Financial Agent Agreement
between Registrant and Phoenix Equity Planning Corporation
dated November 19, 1997 and filed via EDGAR as Exhibit 9.1 with
Post-Effective Amendment No. 23 on March 27, 1998 and
incorporated herein by reference.
h.2 Transfer Agency and Service Agreement between Registrant and
Phoenix Equity Planning Corporation, filed via EDGAR as Exhibit
9.2 with Post-Effective Amendment No. 20 and incorporated
herein by reference.
h.3 Sub-Transfer Agency Agreement between Phoenix Equity Planning
Corporation and State Street Bank and Trust Company, filed via
EDGAR as Exhibit 9.3 with Post-Effective Amendment No. 20, and
incorporated herein by reference.
h.4 First Amendment to Financial Agent Agreement between Registrant
and Phoenix Equity Planning Corporation dated March 23, 1998
and filed via EDGAR with Post-Effective Amendment No. 26 on
September __, 1999.*
h.5 Second Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation dated July
31, 1998 and filed via EDGAR with Post-Effective Amendment No.
26 on September __, 1999.*
i.1 Opinion and Consent of Counsel covering shares of the Phoenix
Tax-Exempt Bond Portfolio, filed with Pre-Effective Amendment
No. 2 on July 7, 1988, and filed via EDGAR as Exhibit 10.1 with
Post-Effective Amendment No. 22 on January 26, 1998 and
incorporated herein by reference. [Consent on new opinion of
counsel to be filed by amendment.]
i.2 Opinion and Consent of Counsel covering shares of the Phoenix
Capital Appreciation Portfolio and the Phoenix International
Portfolio, filed with Post-Effective Amendment No. 3 on October
30, 1989 and filed via EDGAR as Exhibit 10.2 with
Post-Effective Amendment No. 22 on January 26, 1998 and
incorporated herein by reference. [Consent on new opinion of
counsel to be filed by amendment.]
i.3 Opinion and Consent of Counsel covering shares of the Phoenix
Endowment Equity Portfolio, filed with Post-Effective Amendment
No. 8 on April 8, 1993, and filed via EDGAR as Exhibit 10.3
with Post-Effective Amendment No. 22 on January 26, 1998 and
incorporated herein by reference. [Consent on new opinion of
counsel to be filed by amendment.]
i.4 Opinion and Consent of Counsel covering shares of the Phoenix
Real Estate Securities Portfolio, filed with Post-Effective
Amendment No. 14 on March 1, 1995, and filed via EDGAR as
Exhibit 10.4 with Post-Effective Amendment No. 20 and
incorporated herein by reference. [Consent on new opinion of
counsel to be filed by amendment.]
j. Consent of Independent Accountants.
k. Not applicable.
l. Initial Capital Agreement, filed via EDGAR as Exhibit 13 with
Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
m.1 Class A Shares Amended and Restated Distribution Plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940, filed
via EDGAR as Exhibit 15.1 with Post-Effective Amendment No. 22
on January 26, 1998, and incorporated herein by reference.
C-2
<PAGE>
m.2 Class B Shares Amended and Restated Distribution Plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940, filed
via EDGAR as Exhibit 15.2 with Post-Effective Amendment No. 22
on January 26, 1998, and incorporated herein by reference.
m.3 Class C Shares Amended and Restated Distribution Plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940, filed
via EDGAR as Exhibit 15.3 with Post-Effective Amendment No. 22
on January 26, 1998, and incorporated herein by reference.
n.27 Financial Data Schedules.
o.1 Amended and Restated Rule 18f-3 Multi-Class Distribution Plan
effective November 19, 1997, filed via EDGAR as Exhibit 18.1
with Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
o.2 First Amendment to the Amended and Restated Rule 18f-3 Plan,
effective August 26, 1998, filed via EDGAR herewith.*
p.1 Powers of Attorney for Ms. Curtiss and Messrs. Chesek, Conroy,
Dalzell-Payne, Jeffries, Keith, Morris, Oates, Pedersen, Roth,
Segerson and Weicker filed via EDGAR with Post-Effective
Amendment No. 24 on January 27, 1999 and incorporated herein by
reference.
---------------
* Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
None.
ITEM 25. INDEMNIFICATION
Under the Agreement and Declaration of Trust establishing the Registrant any
present or former Trustee or officer of the Registrant and any person who serves
at the Registrant's request as a director, officer or trustee of another
organization in which the Registrant has any interest as a shareholder, creditor
or otherwise is indemnified against all liabilities incurred in connection with
the defense or disposition of any action, suit or other proceeding in which he
may be or may have been involved as a party or otherwise by reason of being or
having been such a Trustee, officer or director, except with respect to any
matter as to which he shall have been finally adjudicated in any such action,
suit or other proceeding not to have acted in good faith in the reasonable
belief that his action was in or not opposed to the best interest of the
Registrant and with respect to any liability to the Registrant or its
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISERS
See "Management of the Fund" in the Prospectus and "The Investment Advisers"
and "Trustees and Officers" in the Statement of Additional Information for
information regarding the business of the Advisers. For information as to the
business, profession, vocation or employment of a substantial nature of
directors and officers of the Advisers, reference is made to the Advisers'
current Form ADV (SEC File Nos. 801-5995 (PIC) and 801-14813 (DPIM)) filed under
the Investment Advisers Act of 1940, incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITER
(a) Equity Planning also serves as the principal underwriter for the
following other registrants:
Phoenix Equity Series Fund, Phoenix Investment Trust 97, Phoenix Series
Fund, Phoenix Strategic Equity Series Fund, Phoenix-Aberdeen Series Fund,
Phoenix-Aberdeen Worldwide Opportunities Fund, Phoenix-Duff & Phelps
Institutional Mutual Funds, Phoenix-Engemann Funds, Phoenix-Euclid Funds,
Phoenix-Goodwin California Tax Exempt Bonds, Inc., Phoenix-Goodwin Multi-Sector
Fixed Income Fund, Inc., Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Oakhurst Income & Growth Fund, Phoenix-Oakhurst Strategic Allocation
Fund, Inc., Phoenix-Seneca Funds, Phoenix-Zweig Trust, Phoenix Home Life
Variable Universal Life Account, Phoenix Home Life Variable Accumulation
Account, PHL Variable Accumulation Account, Phoenix Life and Annuity Variable
Universal Life Account and PHL Variable Separate Account MVA1.
C-3
<PAGE>
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and President Trustee and President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Senior Vice President and Vice President
100 Bright Meadow Boulevard Chief Financial Officer
P.O. Box 2200
Enfield, CT 06083-2200
John F. Sharry Executive Vice President, Executive
56 Prospect St. Retail Distribution Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Leonard J. Saltiel Managing Director, Vice President
56 Prospect St. Operations and Services
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810
Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect St. Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480
Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
56 Prospect St. Secretary
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include Registrant's investment
advisers, Phoenix Investment Counsel, Inc. and Duff & Phelps Investment
Management Co.; Registrant's financial agent, transfer agent and principal
underwriter, Phoenix Equity Planning Corporation; Registrant's dividend
disbursing agent, State Street Bank and Trust Company; and Registrant's
custodians, State Street Bank and Trust Company and Brown Brothers Harriman &
Co. (custodian for the Phoenix International Portfolio). The address of the
Secretary of the Trust is 101 Munson Street, Greenfield, Massachusetts 01301;
the address of Phoenix Investment Counsel, Inc. is 56 Prospect Street, Hartford,
Connecticut 06115; and Duff & Phelps Investment Management Co. is 55 East Monroe
Street, Suite 3600, Chicago, Illinois 60603; the address of Phoenix Equity
Planning Corporation is 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield,
Connecticut 06083-2200; the address of the dividend disbursing agent is P.O. Box
8301, Boston, Massachusetts 02266-8301, Attention: Phoenix Funds; the address of
custodian State Street Bank and Trust Company is P.O. Box 351, Boston,
Massachusetts 02101; and the address for the custodian of the Phoenix
International Portfolio is Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109.
C-4
<PAGE>
ITEM 29. MANAGEMENT SERVICES
The information required by this Item is included in the Statement of
Additional Information.
ITEM 30. UNDERTAKINGS
Not Applicable.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund has duly caused this Amendment to the
registration statement to be signed on its behalf by the undersigned, duly
authorized, in the City of Hartford, and State of Connecticut on the ___ day of
September, 1999.
PHOENIX MULTI-PORTFOLIO FUND
ATTEST: /S/ NANCY J. ENGBERG BY: /S/ PHILIP R. MCLOUGHLIN
-------------------------- ----------------------------
NANCY J. ENGBERG PHILIP R. MCLOUGHLIN
ASSISTANT SECRETARY PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated, on this ___ day of September, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Trustee
---------------------------------------
Robert Chesek*
Trustee
---------------------------------------
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer (principal
--------------------------------------- financial and
Nancy G. Curtiss accounting officer)
Trustee
---------------------------------------
Harry Dalzell-Payne*
Trustee
---------------------------------------
Francis E. Jeffries*
Trustee
---------------------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and
--------------------------------------- President
Philip R. McLoughlin
Trustee
---------------------------------------
Everett L. Morris*
Trustee
---------------------------------------
James M. Oates*
Trustee
---------------------------------------
Calvin J. Pedersen*
Trustee
---------------------------------------
Herbert Roth, Jr.*
Trustee
---------------------------------------
Richard E. Segerson*
Trustee
---------------------------------------
Lowell P. Weicker, Jr.*
</TABLE>
*By /s/ Philip R. McLoughlin
------------------------------------------
* Philip R. McLoughlin, Attorney-in-fact
pursuant to powers of attorney previously
filed.
S-1
Exhibit h.4
FIRST AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 27th day of February, 1998 amends that
certain Amended and Restated Financial Agent Agreement dated November 19, 1997
by and among the following parties (the "Agreement") as hereinbelow provided.
W I T N E S S E T H :
WHEREAS, the parties hereto wish to amend the Agreement to eliminate
the provision that states that Financial Agent is not responsible for the acts
or omissions of any agent appointed by it:
NOW, THEREFORE, in consideration of the foregoing premise, the first
sentence of Paragraph 4 of the Agreement is amended to read as follows:
"Financial Agent shall not be liable for anything done or omitted to be
done by it in the exercise of due care in discharging its duties
specifically described hereunder."
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers on this 23rd day of March, 1998.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Michael E. Haylon
----------------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Philip R. McLoughlin
----------------------------------------
Philip R. McLoughlin
President
EXHIBIT h.5
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
<PAGE>
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCIAL AGENT AGREEMENT
THIS AMENDMENT made effective as of the 1st day of June, 1998 amends that
certain Amended and Restated Financial Agent Agreement dated November 19, 1997,
as amended March 23, 1998, by and among the following parties (the "Agreement")
as hereinbelow provided.
W I T N E S S E T H:
WHEREAS, the parties hereto wish to amend Schedule A of the Agreement to
reflect the recently approved fee structure:
NOW, THEREFORE, in consideration of the foregoing premise, Schedule A is
hereby replaced with the Schedule A attached hereto and made a part hereof.
Except as hereinabove provided, the Agreement shall be and remain unmodified and
in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized officers on this 31st day of July, 1998.
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC.
PHOENIX EQUITY SERIES FUND
PHOENIX INCOME AND GROWTH FUND
PHOENIX INVESTMENT TRUST 97
PHOENIX MULTI-PORTFOLIO FUND
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
PHOENIX SERIES FUND
PHOENIX STRATEGIC ALLOCATION FUND, INC.
PHOENIX STRATEGIC EQUITY SERIES FUND
PHOENIX WORLDWIDE OPPORTUNITIES FUND
By: /s/ Michael E. Haylon
------------------------------
Michael E. Haylon
Executive Vice President
PHOENIX EQUITY PLANNING CORPORATION
By: /s/ Philip R. McLoughlin
------------------------------
Philip R. McLoughlin
President
<PAGE>
Schedule A
Revised Fee Schedule
Fee Information For Services as Financial Agent
For its services hereunder Financial Agent shall be paid a fee equal to the sum
of (1) the documented cost of fund accounting and related services provided by
PFPC, Inc., as subagent, to Financial Agent, plus (2) the documented cost to
Financial Agent to provide financial reporting and tax services and oversight
of subagent's performance.
The current PFPC fees are attached hereto and made a part hereof.
<PAGE>
PFPC Fee Schedule
<TABLE>
<CAPTION>
Assets Under Management Fees
---------------------------------------------------------
<S> <C>
$0 - $200,000,000 0.0850%
---------------------------------------------------------
$200 - $400,000,000 0.0500%
---------------------------------------------------------
$400 - $600,000,000 0.0300%
---------------------------------------------------------
$600 - $800,000,000 0.0200%
---------------------------------------------------------
$800 - $1,000,000,000 0.0150%
---------------------------------------------------------
greater than $1,000,000,000 0.0125%
---------------------------------------------------------
Minimum Fund Fee $84,000
---------------------------------------------------------
Additional Class $12,000
---------------------------------------------------------
</TABLE>
Existing Portfolios:
- --------------------
Asset Based Fees less than $50MM WAIVED
Class Fees - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (First Year):
- ----------------------------
Asset Based Fees less than $50MM - 50% WAIVED
Class Fees less than $25MM per Class - WAIVED
Minimum Fund Fees - WAIVED
New Portfolios (There After):
- -----------------------------
Asset Based Fees less than $50MM - 25% WAIVED
Class Fees less than $25MM per Class - 50% WAIVED
Minimum Fund Fees less than $50MM - 50% WAIVED
Minimum Fund Fees $50-100MM - 25% WAIVED
Variable Unit Investment Trust Valuation and Reporting
- ------------------------------------------------------
$1,500 per Unit Investment Trust
Exhibit o.2
Amendment
<PAGE>
PHOENIX FUNDS
(the "Funds")
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PLAN PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
That certain Amended and Restated Plan Pursuant to Rule 18f-3 under the
Investment Company Act of 1940 duly adopted by the Board of Directors/Trustees
of the Funds on November 19, 1997, is hereby amended as follows:
The Board of Directors/Trustees has granted authority for the following
additional Funds to issue Class C Shares:
Phoenix Income and Growth Fund
Phoenix Multi-Portfolio Fund: Phoenix International Fund
Phoenix Worldwide Opportunities Fund
Accordingly, Schedule A is amended as attached hereto.
This Amendment was approved by the Board of Directors/Trustees at a
meeting held on August 26, 1998.
/s/ Thomas N. Steenburg
---------------------------------
Assistant Secretary
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Class A Class B Class C Class M
------- ------- ------- -------
<S> <C> <C> <C> <C>
PHOENIX CALIFORNIA TAX EXEMPT BONDS, INC. X X -- --
PHOENIX EQUITY SERIES FUND:
PHOENIX CORE EQUITY FUND X X X X
PHOENIX GROWTH AND INCOME FUND X X X X
PHOENIX INCOME AND GROWTH FUND X X X --
PHOENIX INVESTMENT TRUST 97:
PHOENIX SMALL CAP VALUE FUND X X X X
PHOENIX VALUE EQUITY FUND X X X X
PHOENIX MULTI-PORTFOLIO FUND:
EMERGING MARKETS BOND PORTFOLIO X X X X
INTERNATIONAL PORTFOLIO X X X --
MID CAP PORTFOLIO X X -- --
REAL ESTATE SECURITIES PORTFOLIO X X -- --
STRATEGIC INCOME PORTFOLIO X X X X
TAX-EXEMPT BOND PORTFOLIO X X -- --
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC. X X X X
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND X X X --
PHOENIX SERIES FUND:
AGGRESSIVE GROWTH FUND SERIES X X -- --
BALANCED FUND SERIES X X -- --
CONVERTIBLE FUND SERIES X X -- --
GROWTH FUND SERIES X X -- --
HIGH YIELD FUND SERIES X X X X
MONEY MARKET FUND SERIES X X X X
U.S. GOVERNMENT SECURITIES FUND SERIES X X -- --
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
PHOENIX STRATEGIC EQUITY SERIES FUND:
EQUITY OPPORTUNITIES FUND X X -- --
MICRO CAP FUND X X -- --
SMALL CAP FUND X X -- --
STRATEGIC THEME FUND X X X X
PHOENIX STRATEGIC ALLOCATION FUND, INC. X X -- --
PHOENIX WORLDWIDE OPPORTUNITIES FUND X X X --
</TABLE>
