<PAGE>
Phoenix Investment Partners
NOVEMBER 30, 1998
ANNUAL REPORT
Phoenix
Tax-Exempt Bond
Portfolio
Phoenix
Mid Cap Portfolio
Phoenix
International
Portfolio
Phoenix
Real Estate
Securities Portfolio
Phoenix
Emerging Markets
Bond Portfolio
Phoenix
Strategic Income
Portfolio
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR MULTI-PORTFOLIO FUND SHAREHOLDER:
[PHOTO]
PHILIP MCLOUGHLIN
We are pleased to provide this report for Phoenix Multi-Portfolio Fund for the
fiscal year ended November 30, 1998. Many investors may remember the last 12
months for the extreme volatility we witnessed, particularly last summer when
markets around the world fell as the economic crises continued in Russia, Japan
and emerging markets. During the month of August, the J.P. Morgan Emerging
Market Bond Index Plus(1) plummeted nearly (29)%, the MSCI EAFE Index(2) fell
(12)%, the S&P 500 Index(3) declined over (14)%, and the Russell 2000 Index(4)
dropped (19%).
By the end of this reporting period, most market indices had recovered.
However, the performance discrepancy between the perceived "high quality, lowest
risk" investments was significant. Large-capitalization, high-quality stocks
significantly outperformed small-capitalization stocks as investors sought out
the most liquid and "safest" investments. While the S&P 500 returned 23.74% for
the year ended November 30, 1998, the Russell 2000 Index was down (6.62)%.
Investors' "flight to quality" was most notable in the bond market. The Lehman
Brothers Government Bond Index(5) gained 10.75% for the year compared with a
return of 9.45% for the broader based Lehman Brothers Aggregate Bond Index(6)
and a negative return of (9.13)% for the J.P. Morgan Emerging Market Bond Index
Plus and an essentially flat return of 1.73% for the C.S. First Boston High
Yield Index.(7)
During such market extremes, it is important to maintain a long-term
perspective. We believe that by remaining true to our investment discipline, we
will continue to add value to our shareholders over time. Of course, past
performance is not a guarantee of future results.
On the following pages, your Funds' portfolio managers provide a review of the
last year and share their outlook for 1999. We hope you find their comments
informative. If you have any questions, please contact your financial advisor or
call us at 1-800-243-1574.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
(1) THE J.P. MORGAN EMERGING MARKET 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.
(2) THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EAFE INDEX IS AN UNMANAGED,
COMMONLY USED MEASURE OF FOREIGN STOCK TOTAL RETURN PERFORMANCE. THE INDEX
IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(3) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(4) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE OF SMALL COMPANY STOCKS. THE INDEX IS NOT AVAILABLE FOR
DIRECT INVESTMENT.
(5) THE LEHMAN BROTHERS GOVERNMENT BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF TOTAL RETURN PERFORMANCE OF GOVERNMENT BONDS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
(6) THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF BROAD BOND MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
(7) THE C.S. FIRST BOSTON HIGH YIELD INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF TOTAL RETURN PERFORMANCE FOR HIGH-YIELD BONDS. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT AND IS CALCULATED MONTHLY RATHER THAN DAILY.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Phoenix Tax-Exempt Bond Portfolio......................................... 3
Phoenix Mid Cap Portfolio................................................. 12
Phoenix International Portfolio........................................... 19
Phoenix Real Estate Securities Portfolio.................................. 32
Phoenix Emerging Markets Bond Portfolio................................... 40
Phoenix Strategic Income Portfolio........................................ 49
Notes to Financial Statements............................................. 58
</TABLE>
2
<PAGE>
PHOENIX TAX-EXEMPT BOND PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, TIMOTHY M. HEANEY, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for investors seeking to maximize tax-exempt yield
and after-tax total return. Investors should note that income from the Fund
might be subject to state and local taxes and the alternative minimum tax, if
applicable.
Q: HOW DID THE FUND PERFORM OVER THE LAST 12 MONTHS?
A: For the 12-month reporting period ended November 30, 1998, Class A shares
returned 5.75% and Class B shares returned 4.97% compared with a return of 7.76%
for the Lehman Brothers Municipal Bond Index(1). The average return for a peer
universe of 240 general municipal funds was 6.82%, according to Lipper Inc. All
performance figures assume the reinvestment of distributions and exclude the
effect of sales charges.
Q: WHAT FACTORS AFFECTED PERFORMANCE?
A: Since our last report as of May 31, 1998, long U.S. Treasury rates declined
by 70 basis points as global nervousness continued over Asia and Russia,
liquidity became a global problem and the U.S. inflation environment remained
uncertain. During this time, the U.S. Treasury market outperformed the municipal
market due primarily to supply and demand factors. As interest rates declined,
municipal issuers flooded the market to take advantage of the favorable
conditions. However, investors continued to favor the "safer" Treasury issues.
Q: HOW IS THE FUND CURRENTLY POSITIONED?
A: We continue to emphasize higher quality issues as the yield premium between
high-quality and lower-quality municipal bonds is near historically narrow
levels across the municipal bond yield curve. Continued good news on the
inflation front and a slowdown in new municipal bond issues should benefit the
market.
Q: WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A: As we move forward in 1999, factors that could drive the relative value of
municipal bonds over the next six months include: the global economic outlook
and its impact on the U.S. economy and its investment markets, legislative
developments that could change the current tax laws relating to municipal bonds,
and lastly, the amount of new municipal supply that the market will experience,
especially in light of the large amount of new issue supply that the market had
to digest in 1998. Finally, should the U.S. stock market continue to experience
the same pace of appreciation that it has enjoyed subsequent to its large
sell-off during the third quarter of 1998, it could divert money away from the
tax-exempt sector, thus putting some additional pressure on municipals. Despite
these potential risks, we believe the municipal market represents excellent
relative value at current levels. If we continue to get good news on the U.S.
economic picture and start to see a slowdown in municipal issuance, we believe
the municipal market should fare well in 1999.
DECEMBER 15, 1998
(1) 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 INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT AND
DOES NOT REFLECT INVESTMENT MANAGEMENT OR OTHER MUTUAL FUND-RELATED FEES.
3
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEAR 10 YEAR TO 11/30/98 DATE
<S> <C> <C> <C> <C> <C>
Class A Shares at NAV(2) 5.75% 5.33% 7.89% -- --
Class A Shares at POP(3) 0.70 4.30 7.36 -- --
Class B Shares at NAV(2) 4.97 -- -- 5.28% 3/16/94
Class B Shares with CDSC(4) 1.14 -- -- 4.93 3/16/94
Lehman Muni Bond Index(7) 7.76 6.62 8.30 6.83(5) 2/28/94
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at
the time of purchase. CDSC charges for B shares decline from 5% to 0%
over a five year period.
(5) Index performance is 6.83% for Class B (since 2/28/94).
(6) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(7) The Lehman Muni 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's performance
does not reflect sales charges.
All returns represent past performance which may not be indicative
of future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
Phoenix Tax-Exempt Bond Lehman Muni
Fund Class A(6) Bond Index(7)
11/01/88 $9,522.92 $10,000.00
11/30/89 $10,678.26 $11,100.64
11/30/90 $10,371.40 $11,954.95
11/30/91 $12,431.78 $13,182.54
11/30/92 $13,913.44 $14,505.06
11/30/93 $15,692.99 $16,111.91
11/30/94 $14,508.03 $15,265.31
11/30/95 $17,390.92 $18,150.90
11/30/96 $18,139.29 $19,219.36
11/30/97 $19,235.69 $20,598.00
11/30/98 $20,342.47 $22,196.93
This growth of $10,000 chart assumes an initial investment of $10,000 made on
11/1/88 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less
than that shown based on differences in inception dates, fees and sales
charges.
STATE WEIGHTINGS 11/30/98
As a percentage of net assets
Pennsylvania 13%
Texas 9%
New York 7%
California 7%
Illinois 6%
Virginia 6%
Georgia 6%
Other 46%
4
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
TEN LARGEST STATES AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Pennsylvania 13.3%
2. Texas 9.0%
3. New York 7.3%
4. California 6.8%
5. Illinois 5.7%
6. Virginia 5.6%
7. Georgia 5.6%
8. Connecticut 4.5%
9. Colorado 3.9%
10. Indiana 3.0%
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
MUNICIPAL TAX-EXEMPT BONDS--97.9%
ALABAMA--3.0%
Alabama Special Care Facility 5%,
11/1/25................................. AA+ $ 3,500 $ 3,421,250
ALASKA--1.1%
Valdez Marine Terminal Revenue 7%,
12/1/25(d).............................. AA 1,125 1,229,062
ARIZONA--0.9%
Pima County Pre-refunded 6.75%, 7/1/15
(FGIC Insured).......................... AAA 460 499,100
Pima County Unrefunded 6.75%, 7/1/15
(FGIC Insured).......................... AAA 540 583,200
-------------
1,082,300
-------------
ARKANSAS--1.3%
Drew County Public Facilities Board
Series A-2 7.90%, 8/1/11 (FNMA
Collateralized)......................... Aaa(c) 255 275,827
Jacksonville Residential Housing Board
Series A-2 7.90%, 1/1/11 (FNMA
Collateralized)......................... Aaa(c) 443 476,505
Lonoke County Residential Housing
Facilities Board Series A-2 7.90%,
4/1/11 (FNMA Collateralized)............ Aaa(c) 447 493,512
Stuggart Public Facilities Board Series
A-2 7.90%, 9/1/11 (FNMA
Collateralized)......................... Aaa(c) 208 223,300
-------------
1,469,144
-------------
CALIFORNIA--6.8%
California Housing Financing Agency
Series A 7.75%, 8/1/17.................. AA- 225 232,335
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Pittsburg Redevelopment Series A 4.625%,
8/1/21 (AMBAC Insured).................. AAA $ 1,650 $ 1,565,437
Riverside County Series B 8.625%, 5/1/16
(GNMA Collateralized)................... AAA 4,300 5,923,250
-------------
7,721,022
-------------
COLORADO--3.9%
Arapahoe County Capital Improvement
Series E Pre-refunded 6.90%, 8/31/15.... Aaa(c) 2,500 2,990,625
Jefferson County School District G.O.
Bond 6.50%, 12/15/07 (MBIA Insured)..... AAA 1,250 1,475,000
-------------
4,465,625
-------------
CONNECTICUT--4.5%
Connecticut State Health and Educational
Facilities Authority Series B 5.125%,
7/1/07.................................. BBB 1,000 1,045,000
Mashantucket Western Pequot Tribe
Special Development Revenue Bond Series
A Pre-refunded 144A 6.50%, 9/1/05(f).... AAA 845 963,300
Mashantucket Western Pequot Tribe
Special Development Revenue Bond Series
A Pre-refunded 144A 6.50%, 9/1/06(f).... AAA 495 571,106
Mashantucket Western Pequot Tribe
Special Development Revenue Bond Series
A Unrefunded 144A 6.50%, 9/1/05(f)...... BBB- 855 964,012
Mashantucket Western Pequot Tribe
Special Development Revenue Bond Series
A Unrefunded 144A 6.50%, 9/1/06(f)...... BBB- 505 576,331
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
CONNECTICUT--CONTINUED
Mashantucket Western Pequot Tribe
Special Development Revenue Bond Series
B 144A 5.60%, 9/1/09(f)................. Baa(c) $ 1,000 $ 1,061,250
-------------
5,180,999
-------------
FLORIDA--1.5%
Martin County Industrial Development
Revenue Bond Indiantown Cogeneration
Series A 7.875%, 12/15/25............... BBB- 1,500 1,725,000
GEORGIA--5.6%
Atlanta Water and Sewer Revenue Bond
4.50%, 1/1/18 (FGIC Insured)............ AAA 2,250 2,120,625
Cartersville Development Authority
Revenue Bond 5.625%, 5/1/09............. A+ 2,000 2,167,500
Georgia Municipal Electric Authority
Power Revenue Bond Series Z 5.50%,
1/1/20 (FGIC Insured)................... AAA 2,000 2,147,500
-------------
6,435,625
-------------
ILLINOIS--5.7%
Chicago Board of Education Series A 6%,
1/1/20 (MBIA Insured)................... AAA 500 568,750
Chicago Gas Supply Revenue Bond Series B
7.50%, 3/1/15........................... AA- 1,000 1,056,250
Chicago O'Hare International Airport
Special Facility Revenue Bond 8.85%,
5/1/18.................................. BB+ 855 943,706
Illinois Development Finance Authority
Pollution Control Revenue Bond Series B
7.60%, 9/1/13........................... A+ 2,000 2,117,500
Illinois Health Facilities Authority
Revenue Bond Series C 7%, 4/1/08 (FSA
Insured)................................ AAA 1,100 1,318,625
Illinois Housing Development Authority
Residential Mortgage Revenue Bond Series
A 7%, 8/1/17............................ A+ 475 483,313
Metropolitan Pier & Exposition Authority
Revenue Bond Unrefunded 6.50%, 6/15/07
(FGIC Insured).......................... AA- 30 33,450
-------------
6,521,594
-------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
INDIANA--3.0%
Indianapolis Public Local Improvement
Revenue Bond Series A 0%, 2/1/05........ Aa(c) $ 1,765 $ 1,367,875
Indianapolis Public Local Improvement
Revenue Bond Series C 0%, 1/1/03........ A(c) 2,500 2,118,750
-------------
3,486,625
-------------
KENTUCKY--2.7%
Kentucky State Turnpike Authority
Economic Development Revenue Bond 0%,
1/1/10 (FGIC Insured)................... AAA 3,300 2,013,000
Perry County Solid Waste Disposal
Revenue Bond 7%, 6/1/24................. NR 1,000 1,085,000
-------------
3,098,000
-------------
LOUISIANA--2.9%
St. Mary Public Transportation Financing
Authority Revenue Bond Series A 7.625%,
3/25/12................................. Aaa(c) 51 54,445
St. Tammany Public Transportation
Financing Authority Revenue Bond Series
A 7%, 6/1/02 (FNMA Collateralized)...... Aaa(c) 88 91,556
St. Tammany Sales Tax Revenue Bond
4.70%, 4/1/09 (FGIC Insured)............ AAA 2,000 2,052,500
St. Tammany Sales Tax Revenue Bond
4.80%, 4/1/10 (FGIC Insured)............ AAA 1,105 1,136,769
-------------
3,335,270
-------------
MARYLAND--0.5%
Baltimore G.O. Bond 7%, 10/15/09 (MBIA
Insured)................................ AAA 500 618,125
MASSACHUSETTS--1.8%
Massachusetts Bay Transportation
Authority Revenue Bond Series B 6.20%,
3/1/16.................................. AA- 1,000 1,171,250
Massachusetts State Industrial Financing
Agency Revenue Bond 0%, 8/1/05.......... A+ 1,100 831,875
-------------
2,003,125
-------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
MICHIGAN--3.0%
Western Townships Utilities Authority
Sewage Disposal System G.O. Bond 8.20%,
1/1/18.................................. BBB+ $ 1,500 $ 1,535,250
Williamston Community School G.O. Bond
5.50%, 5/1/25 (MBIA Insured)............ AAA 1,725 1,878,094
-------------
3,413,344
-------------
MISSISSIPPI--1.5%
Lowndes County Solid Waste Disposal &
Pollution Control Revenue Bond Series A
6.80%, 4/1/22........................... A 1,450 1,772,625
NEBRASKA--1.2%
Nebraska Revenue Bond Jr Sub Lien Series
A-6 6.70%, 12/1/02 (Called 12/1/98)..... Aaa(c) 1,345 1,345,000
NEVADA--1.5%
Clark County School District G.O. Bond
Series B 0%, 6/1/03 (MBIA Insured)...... AAA 2,000 1,680,000
NEW JERSEY--2.4%
Atlantic City Improvement Authority
Lease Pre-refunded 8.875%, 2/1/10....... NR 1,000 1,009,280
Camden County Municipal Utilities
Authority Sewer Revenue Bond 0%, 9/1/11
(FGIC Insured).......................... AAA 3,000 1,687,500
-------------
2,696,780
-------------
NEW YORK--7.3%
Erie County Water Authority Revenue Bond
0%, 12/1/17 (AMBAC Insured)............. AAA 550 140,894
New York State Dormitory Authority
Revenue Bond Series U Pre-refunded
6.375%, 7/1/08.......................... BBB+ 575 636,094
Niagara Falls Bridge Commission Toll
Revenue Bond Series B 5.25%, 10/1/15
(FGIC Insured)(e)....................... AAA 4,000 4,250,000
Port Authority New York & New Jersey
Special Obligation Revenue Bond 6.75%,
10/1/11................................. NR 3,000 3,363,750
-------------
8,390,738
-------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
NORTH CAROLINA--1.4%
North Carolina Municipal Power Agency
Revenue Bond 6%, 1/1/09 (AMBAC
Insured)................................ AAA $ 1,385 $ 1,561,588
PENNSYLVANIA--13.3%
Delaware Valley Regional Finance
Authority Revenue Bond Series B 5.70%,
7/1/27 (AMBAC Insured).................. AAA 2,000 2,225,000
New Castle Area Hospital Authority
Revenue Bond Series A 6.50%,
11/15/09(b)............................. A(c) 1,000 1,060,000
Pennsylvania Economic Development
Financing Authority Recycling Revenue
Bond Series A 9.25%, 1/1/22(b)(g)....... NR 3,995 2,277,150
Pennsylvania Economic Development
Financing Authority Resource Recovery
Revenue Bond Series A 6.40%, 1/1/09..... BBB- 5,000 5,287,500
Pennsylvania State Finance Authority
Revenue Bond 6.60%, 11/1/09............. A 4,000 4,390,000
-------------
15,239,650
-------------
TENNESSEE--1.5%
Metropolitan Government Nashville &
Davidson County Health & Educational
Facilities Board Revenue Bond 6%,
12/1/16 (AMBAC Insured)................. AAA 1,500 1,700,625
TEXAS--9.0%
Alliance Airport Authority Special
Facilities Revenue Bond 7%, 12/1/11..... BBB- 1,100 1,299,375
Austin Convention Center Revenue Bond
Series B 8.25%, 11/15/14................ AAA 930 992,533
Brazos River Authority Revenue Bond
Series A 7.625%, 5/1/19................. A- 1,000 1,040,290
Colorado River Municipal Water Revenue
Bond Pre-refunded 8.25%, 1/1/15......... NR 540 589,275
Hurst Euless Bedford Independant School
District G.O. Bond 4.75%, 8/15/28....... AAA 2,000 1,912,500
San Antonio Electric & Gas Revenue Bond
5%, 2/1/12(e)........................... AA 2,000 2,060,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
TEXAS--CONTINUED
Texas State Public Finance Authority
Building Revenue Bond 6.25%, 8/1/09
(MBIA Insured).......................... AAA $ 1,250 $ 1,439,063
Texas Water Resource Finance Authority
Revenue Bond 7.625%, 8/15/08............ A 890 912,099
-------------
10,245,135
-------------
VIRGINIA--5.6%
Pittsylvania County Industrial
Development Authority Revenue Bond
Series A 7.30%, 1/1/04.................. NR 1,000 1,071,250
Pittsylvania County Industrial
Development Revenue Bond Series A 7.45%,
1/1/09.................................. NR 3,000 3,296,250
Upper Occoquan Sewer Authority Regional
Sewer Revenue Bond Series A 5.15%,
7/1/20 (MBIA Insured)................... AAA 2,000 2,072,500
-------------
6,440,000
-------------
WEST VIRGINIA--2.8%
Upshur County Solid Waste Disposal
Revenue Bond 7%, 7/15/25................ NR 2,000 2,182,500
West Virginia State Housing Development
Fund Revenue Bond 6.625%, 7/1/20 (FHA
Insured)................................ AA 1,000 1,000,290
-------------
3,182,790
-------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -------------
<S> <C> <C> <C>
WISCONSIN--0.8%
Wisconsin State Clean Water Revenue Bond
Series 1 6.875%, 6/1/11................. AA+ $ 750 $ 916,875
OTHER TERRITORIES--1.4%
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Bond
Series V 6.625%, 7/1/12................. A 1,500 1,642,500
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL TAX-EXEMPT BONDS
(IDENTIFIED COST $103,837,658) 112,020,416
- --------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.9%
(IDENTIFIED COST $103,837,658) 112,020,416
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--1.1%
COMMERCIAL PAPER--1.1%
Ford Motor Credit Co. 4.84%, 12/4/98.... A-1 1,250 1,249,496
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $1,249,496) 1,249,496
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--99.0%
(IDENTIFIED COST $105,087,154) 113,269,912(a)
Cash and receivables, less liabilities--1.0% 1,101,677
--------------
NET ASSETS--100.0% $ 114,371,589
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net appreciation of investment securities
is comprised of gross appreciation of $10,143,099 and gross depreciation of
$1,894,092 for federal income tax purposes. At November 30, 1998, the
aggregate cost of securities for federal income tax purpose was
$105,020,905.
(b) Non-income producing.
(c) As rated by Moody's, Fitch or Duff & Phelps.
(d) Variable security; interest rate reflects the rate currently in effect.
(e) All or a portion segregated as collateral.
(f) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1998, these securities amounted to a value of $4,135,999 or 3.6% of net
assets.
(g) Security in default.
At November 30, 1998, 37.3% of the securities in the portfolio are backed by
insurance of financial institutions and financial guaranty assurance agencies.
Insurers with a concentration greater than 10% of net assets are as follows:
FGIC, 14.6%
8 See Notes to Financial Statements
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $105,087,154) $ 113,269,912
Cash 90,283
Receivables
Fund shares sold 1,921
Interest 1,877,543
--------------
Total assets 115,239,659
--------------
LIABILITIES
Payables
Variation margin for futures contracts 10,000
Dividend distributions 114,135
Fund shares repurchased 572,959
Investment advisory fee 42,388
Distribution fee 28,161
Financial agent fee 11,140
Transfer agent fee 7,061
Trustees' fee 5,514
Accrued expenses 76,712
--------------
Total liabilities 868,070
--------------
NET ASSETS $ 114,371,589
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 106,684,614
Distributions in excess of net investment income (114,135)
Accumulated net realized loss (352,089)
Net unrealized appreciation 8,153,199
--------------
NET ASSETS $ 114,371,589
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $107,370,966) 9,581,538
Net asset value per share $11.21
Offering price per share $11.21/(1-4.75%) $11.77
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $7,000,623) 622,243
Net asset value and offering price per share $11.25
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 6,943,511
--------------
Total investment income 6,943,511
--------------
EXPENSES
Investment advisory fee 544,278
Distribution fee, Class A 286,241
Distribution fee, Class B 64,542
Financial agent fee 102,535
Transfer agent 84,634
Professional 45,738
Registration 29,072
Trustees 21,706
Printing 18,949
Custodian 14,688
Miscellaneous 5,739
--------------
Total expenses 1,218,122
--------------
NET INVESTMENT INCOME 5,725,389
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (18,863)
Net realized loss on futures contracts (390,703)
Net change in unrealized appreciation on investments 1,555,273
--------------
NET REALIZED GAIN ON INVESTMENTS 1,145,707
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,871,096
--------------
--------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 5,725,389 $ 7,025,130
Net realized gain (loss) (409,566) 175,101
Net change in unrealized appreciation 1,555,273 420,432
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 6,871,096 7,620,663
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (5,342,324) (6,755,466)
Net investment income, Class B (259,422) (233,919)
Net realized gains, Class A (96,887) (1,898,761)
Net realized gains, Class B (4,637) (65,944)
In excess of net investment income, Class A (566,555) (5,836)
In excess of net investment income, Class B (27,512) (202)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (6,297,337) (8,960,128)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (3,799,813 and
5,119,900 shares, respectively) 42,705,753 56,427,974
Net asset value of shares issued from
reinvestment of distributions
(286,921 and 458,029 shares, respectively) 3,230,781 5,044,059
Cost of shares repurchased (5,491,445 and
6,702,201 shares, respectively) (61,903,573) (73,960,582)
-------------- --------------
Total (15,967,039) (12,488,549)
-------------- --------------
CLASS B
Proceeds from sales of shares (259,511 and
200,165 shares, respectively) 2,940,057 2,212,684
Net asset value of shares issued from
reinvestment of distributions
(12,310 and 15,780 shares, respectively) 139,134 174,441
Cost of shares repurchased (166,434 and 119,828
shares, respectively) (1,874,018) (1,319,055)
-------------- --------------
Total 1,205,173 1,068,070
-------------- --------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (14,761,866) (11,420,479)
-------------- --------------
NET DECREASE IN NET ASSETS (14,188,107) (12,759,944)
-------------- --------------
NET ASSETS
Beginning of period 128,559,696 141,319,640
-------------- --------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS
OF NET INVESTMENT INCOME OF ($114,135) AND
($123,643), RESPECTIVELY) $ 114,371,589 $ 128,559,696
-------------- --------------
-------------- --------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix Tax-Exempt Bond Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.17 $ 11.28 $ 11.40 $ 10.09 $ 11.58
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.57 0.59 0.60 0.61 0.65
Net realized and unrealized gain
(loss) 0.20 0.05 (0.12) 1.34 (1.49)
---------- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.77 0.64 0.48 1.95 (0.84)
---------- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (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 (0.73) (0.75) (0.60) (0.64) (0.65)
---------- ----- ----- ----- -----
Change in net asset value 0.04 (0.11) (0.12) 1.31 (1.49)
---------- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 11.21 $ 11.17 $ 11.28 $ 11.40 $ 10.09
---------- ----- ----- ----- -----
---------- ----- ----- ----- -----
Total return(1) 5.75% 6.04% 4.30% 19.87% (7.55)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $107,371 $122,763 $136,558 $147,821 $141,623
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.97% 0.96% 0.94% 0.97% 0.96%
Net investment income 4.77% 5.36% 5.42% 5.65% 5.65%
Portfolio turnover 14% 15% 27% 25% 54%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
---------------------------------------------------- 3/16/94 TO
1998 1997 1996 1995 11/30/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.22 $ 11.32 $ 11.44 $ 10.12 $ 11.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.48 0.50 0.52 0.53 0.39
Net realized and unrealized gain
(loss) 0.19 0.06 (0.12) 1.35 (1.09)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.67 0.56 0.40 1.88 (0.70)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (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 (0.64) (0.66) (0.52) (0.56) (0.39)
----- ----- ----- ----- -----
Change in net asset value 0.03 (0.10) (0.12) 1.32 (1.09)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 11.25 $ 11.22 $ 11.32 $ 11.44 $ 10.12
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) 4.97% 5.13% 3.60% 19.07% (6.42)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $7,001 $5,797 $4,762 $3,142 $1,147
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.69% 1.71% 1.69% 1.72% 1.54%(2)
Net investment income 3.98% 4.60% 4.68% 4.90% 5.07%(2)
Portfolio turnover 14% 15% 27% 25% 54%(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
See Notes to Financial Statements 11
<PAGE>
PHOENIX MID CAP PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGERS, GAIL SENECA, PH.D. AND RICHARD
LITTLE, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix Mid Cap Portfolio is appropriate for investors seeking long-term
capital appreciation by investing primarily in stocks of dynamic, rapidly
growing companies and focusing on strong relative earnings growth. The Fund may
invest in companies of all sizes, and investors should note that small company
investing involves added risks, including greater price volatility, less
liquidity and increased competitive threat.
Q: HOW HAS THE FUND PERFORMED DURING THIS DIFFICULT MARKET ENVIRONMENT?
A: For the 12-month reporting period, the Phoenix Mid Cap Portfolio Class A
shares returned 6.64% and Class B shares returned 5.80% compared with a return
of 10.40% for the S&P MidCap Index(1) and (7.12)% for the Russell 2000 Growth
Index(2). All performance figures assume reinvestment of distributions and
exclude the effect of sales charges.
Q: HOW WAS THE FUND AFFECTED BY EVENTS AROUND THE WORLD?
A: The growing economic crises in Russia, Japan and emerging markets led to
devastating results across all major U.S. stock market indices. Investors
flocked to the most highly liquid and "lowest risk" investments available. U.S.
Treasuries were the only true beneficiaries of this trend. The largest U.S.
stocks widely outperformed smaller capitalization companies. Year-to-date
through November 30, the S&P 500 Index is up 21.68%(3), while the return for the
Russell 2000 Index(4), a measure of small companies' performance, is negative
(8.23)%.
Our investment strategy produced strong relative results. Year-to-date
through November 30, Class A shares were up 5.04% based on net asset value
versus a return of only 1.95% for the average mid-cap fund in a peer universe of
326 funds, according to Lipper Inc., while the average small cap fund is down
(7.47)% for the year, according to Lipper Inc., based on a universe of 638
small-stock funds.
Q: HOW DID SOME OF THE STOCKS PERFORM?
A: Despite the market carnage, some of our stock holdings advanced for the
quarter: Dell Computer (microcomputers), EMC Corp. (memory devices), Intel Corp.
(semiconductor company), and Sun America (insurance) to name a few. Stocks in
our portfolio continue to produce significantly above-market earnings growth
rates.
Q: WHAT IS YOUR OUTLOOK FOR THE MARKET?
A: Unless the fear of global depression is realized, we believe U.S.
corporations should continue to exhibit profit growth in the coming year. This,
and a low inflation, low interest rate environment, should bode well for the
stock market in 1999.
Market volatility and panic liquidation is now so intense that investors can
find no place in the market that has been unaffected by recent events. When the
storm clouds dissipate, as we believe they will, diversified portfolios of
high-quality stocks, such as ours, should be well-positioned.
DECEMBER 10, 1998
(1) 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.
(2) THE RUSSELL 2000 GROWTH INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF
TOTAL RETURN PERFORMANCE FOR SMALL-CAPITALIZATION COMPANIES WITH ABOVE-
AVERAGE GROWTH ORIENTATION. THE INDEX IS NOT AVAILABLE FOR DIRECT
INVESTMENT.
(3) THE S&P 500 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF STOCK MARKET
TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR DIRECT INVESTMENT.
(4) THE RUSSELL 2000 INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF TOTAL
RETURN PERFORMANCE FOR SMALL-CAPITALIZATION COMPANIES. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
12
<PAGE>
Phoenix Mid Cap Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEAR TO 11/30/98 DATE
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 6.64% 11.08% 15.29% 11/1/89
Class A Shares at POP(3) 1.58 10.00 14.69 11/1/89
Class B Shares at NAV(2) 5.80 -- 12.14 7/18/94
Class B Shares with CDSC(4) 2.13 -- 11.85 7/18/94
S&P MidCap Index(6) 10.40 17.23 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of
any sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at
the time of purchase. CDSC charges for B shares decline from 5% to 0%
over a five year period.
(5) Index performance is 16.70 for Class A (since 11/1/89) and 19.16 for
Class B (since 7/18/94).
(6) This chart illustrates POP returns on Class A Shares for ten years.
Returns on Class B Shares will vary due to differing sales charges.
(7) 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.
All returns represent past performance which may not be indicative
of future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
Phoenix Mid Cap S&P MidCap
Class A Index(7)
11/01/89 $9,523.81 $10,000.00
11/30/89 $9,800.00 $10,220.57
11/30/90 $11,491.40 $9,493.24
11/30/91 $16,177.93 $13,482.21
11/30/92 $18,837.70 $16,324.07
11/30/93 $20,521.90 $18,373.36
11/30/94 $20,733.07 $18,368.64
11/30/95 $26,511.59 $24,334.80
11/30/96 $30,095.15 $28,903.47
11/30/97 $32,540.12 $36,842.11
11/30/98 $34,701.62 $40,672.25
This growth of $10,000 chart assumes an initial investment of $10,000 made on
11/1/89 in Class A shares and reflects the maximum sales charge of 4.75% on
the initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less
than that shown based on differences in inception dates, fees and sales
charges.
SECTOR WEIGHTINGS 11/30/98
As a percentage of net assets
Computers (Software & Services) 16%
Electronics (Semiconductors) 8%
Banks (Major Regional) 8%
Health Care (Drugs-Major Pharmaceuticals) 8%
Computers (Networking) 5%
Retail (Discounters) 5%
Other 50%
13
<PAGE>
Phoenix Mid Cap Portfolio
TEN LARGEST HOLDINGS AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Outdoor Systems, Inc. 3.6%
OPERATES MALL AND TRANSIT ADVERTISING DISPLAYS
2. Xilinx, Inc. 3.5%
DESIGNS AND SELLS PROGRAMMABLE LOGIC DEVICES
3. Ascend Communications, Inc. 3.5%
DEVELOPS AND MARKETS WIDE-AREA NETWORKING SOLUTIONS
4. Compuware Corp. 3.0%
SELLS AND SUPPORTS AN INTEGRATED LINE OF SOFTWARE PRODUCTS
5. America Online, Inc. 3.0%
PROVIDES ONLINE SERVICES TO CONSUMERS
6. Comerica, Inc. 2.9%
GENERAL COMMERCIAL BANKING
7. Mylan Laboratories, Inc. 2.8%
DISTRIBUTES GENERIC AND PROPRIETARY PHARMACEUTICAL PRODUCTS
8. Gemstar International Group, Ltd. 2.7%
DEVELOPS SYSTEMS RELATED TO TELEVISION PROGRAMMING
9. Northern Trust Corp. 2.7%
PROVIDES BANKING AND TRUST SERVICES
10. Maytag Corp. 2.6%
MAKES, DISTRIBUTES AND SERVICES CONSUMER APPLIANCES
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
COMMON STOCKS--95.0%
BANKS (MAJOR REGIONAL)--7.6%
AmSouth Bancorporation.................. 142,240 $ 6,009,640
Comerica, Inc........................... 133,550 8,613,975
Northern Trust Corp..................... 97,500 7,873,125
-------------
22,496,740
-------------
BEVERAGES (ALCOHOLIC)--1.7%
Coors (Adolph) Co. Class B.............. 103,000 5,124,250
BEVERAGES-SOFT DRINK--1.0%
Whitman Corp............................ 127,350 2,881,294
BROADCASTING (TELEVISION, RADIO & CABLE)--2.3%
Chancellor Media Corp.(b)............... 179,070 6,748,701
COMPUTERS (HARDWARE)--1.7%
International Business Machines Corp.... 30,000 4,950,000
COMPUTERS (NETWORKING)--5.0%
Ascend Communications, Inc.(b).......... 183,000 10,282,312
Network Appliance, Inc.................. 59,530 4,472,191
-------------
14,754,503
-------------
COMPUTERS (SOFTWARE & SERVICES)--16.1%
America Online, Inc.(b)................. 100,000 8,756,250
BMC Software, Inc.(b)................... 141,080 7,203,897
Computer Horizons Corp.(b).............. 167,830 3,776,175
Compuware Corp.(b)...................... 144,200 8,976,450
Documentum, Inc.(b)..................... 92,950 3,909,709
Legato Systems, Inc.(b)................. 59,800 2,859,187
Microsoft Corp.(b)...................... 35,000 4,270,000
VERITAS Software Corp.(b)............... 129,610 7,744,197
-------------
47,495,865
-------------
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
ELECTRONICS (INSTRUMENTATION)--1.9%
Micron Electronics, Inc.(b)............. 245,450 $ 5,583,987
ELECTRONICS (SEMICONDUCTORS)--7.6%
Advance Micro Devices, Inc.(b).......... 165,900 4,593,356
Micron Technology, Inc.(b).............. 180,140 7,442,034
Xilinx, Inc.(b)......................... 205,740 10,441,305
-------------
22,476,695
-------------
ENTERTAINMENT--2.2%
SFX Entertainment, Inc. Class A(b)...... 127,210 6,376,401
FINANCIAL (DIVERSIFIED)--1.4%
Providian Financial Corp................ 43,960 4,036,078
HEALTH CARE (DRUGS--MAJOR PHARMACEUTICALS)--7.7%
McKesson Corp........................... 97,520 6,942,205
MedImmune, Inc.(b)...................... 85,000 5,684,375
Mylan Laboratories, Inc................. 247,100 8,200,631
Warner-Lambert Co....................... 25,000 1,887,500
-------------
22,714,711
-------------
HEALTH CARE (HOSPITAL MANAGEMENT)--1.2%
Health Management Associates, Inc. Class
A(b).................................... 169,440 3,674,730
HEALTH CARE (LONG TERM CARE)--1.6%
Omnicare, Inc........................... 170,150 4,870,544
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--1.3%
Ocular Sciences, Inc.(b)................ 164,660 3,704,850
HOUSEHOLD FURNITURE & APPLIANCES--2.6%
Maytag Corp............................. 143,730 7,779,386
INSURANCE (LIFE/HEALTH)--1.6%
Annuity and Life Re (Holdings), Ltd..... 182,610 4,633,729
INSURANCE (PROPERTY, CASUALTY, & TITLE)--0.9%
Progressive Corp. (The)................. 17,270 2,562,436
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Phoenix Mid Cap Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
MANUFACTURING (DIVERSIFIED)--1.5%
Tyco International Ltd.................. 65,539 $ 4,313,285
OFFICE EQUIPMENT & SUPPLIES--1.3%
Miller (Herman), Inc.................... 181,150 3,849,438
OIL (DOMESTIC INTEGRATED)--2.4%
USX-Marathon Group...................... 253,230 7,185,401
OIL & GAS (DRILLING & EQUIPMENT)--1.6%
Cooper Cameron Corp.(b)................. 100,000 2,437,500
Smith International, Inc.(b)............ 100,000 2,412,500
-------------
4,850,000
-------------
RETAIL (COMPUTERS & ELECTRONICS)--1.1%
Tandy Corp.............................. 75,000 3,379,688
RETAIL (DISCOUNTERS)--5.2%
Dollar Tree Stores, Inc.(b)............. 165,540 7,511,378
Kmart Corp.(b).......................... 507,350 7,737,088
-------------
15,248,466
-------------
RETAIL (SPECIALTY)--2.3%
Staples, Inc.(b)........................ 192,470 6,724,421
RETAIL (SPECIALTY-APPAREL)--2.3%
TJX Companies, Inc. (The)............... 268,000 6,867,500
SERVICES (ADVERTISING/MARKETING)--3.6%
Outdoor Systems, Inc.(b)................ 388,100 10,478,700
SERVICES (COMMERCIAL & CONSUMER)--3.8%
Administaff, Inc.(b).................... 114,620 3,101,904
Gemstar International Group, Ltd.(b).... 132,720 8,062,740
-------------
11,164,644
-------------
TELECOMMUNICATIONS-CELLULAR--1.0%
Crown Castle International Corp.(b)..... 223,200 2,999,250
WASTE MANAGEMENT--3.5%
Republic Services, Inc. Class A(b)...... 378,560 7,050,680
Waste Management, Inc................... 74,300 3,185,613
-------------
10,236,293
-------------
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $264,544,067) 280,161,986
- -----------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--2.1%
ELECTRONICS (SEMICONDUCTORS)--2.1%
PMC-Sierra, Inc. (Canada)(b)............ 112,530 $ 6,062,554
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,547,950) 6,062,554
- -----------------------------------------------------------------------------
UNIT INVESTMENT TRUSTS--1.1%
S & P Mid Cap 400 Depositary Receipts... 50,000 3,350,000
- -----------------------------------------------------------------------------
TOTAL UNIT INVESTMENT TRUSTS
(IDENTIFIED COST $3,359,755) 3,350,000
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.2%
(IDENTIFIED COST $272,451,772) 289,574,540
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--3.7%
COMMERCIAL PAPER--3.7%
Shell Oil Co. 5.30%, 12/1/98............ A-1+ $ 230 230,000
Colgate-Palmolive Co. 5%, 12/17/98...... A-1 2,810 2,803,755
Greenwich Funding Corp. 5.20%, 1/4/99... A-1+ 2,000 1,984,612
Lexington Parker Capital LLC 5.31%,
1/13/99................................. A-1 5,000 4,958,774
Minnesota Mining & Manufacturing Co.
4.95%, 1/21/99.......................... A-1+ 1,000 989,194
-------------
10,966,335
-------------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $10,985,209) 10,966,335
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--101.9%
(IDENTIFIED COST $283,436,981) 300,540,875(a)
Cash and receivables, less liabilities--(1.9%) (5,527,136)
--------------
NET ASSETS--100.0% $ 295,013,739
--------------
--------------
</TABLE>
(a) Federal Income Tax Information: Net appreciation of investment securities
is comprised of gross appreciation of $34,646,500 and gross depreciation of
$17,704,670 for federal income tax purposes. At November 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$283,599,045.
(b) Non-income producing.
See Notes to Financial Statements 15
<PAGE>
Phoenix Mid Cap Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $283,436,981) $ 300,540,875
Short term investments held as collateral for loaned securities 6,957,460
Cash 4,041
Receivables
Investment securities sold 4,594,014
Interest and dividends 135,550
Fund shares sold 137,059
--------------
Total assets 312,368,999
--------------
LIABILITIES
Payables
Investment securities purchased 9,462,426
Fund shares repurchased 463,703
Collateral on securities loaned 6,957,460
Investment advisory fee 182,048
Distribution fee 70,354
Transfer agent fee 66,642
Financial agent fee 19,739
Trustees' fee 5,514
Accrued expenses 127,374
--------------
Total liabilities 17,355,260
--------------
NET ASSETS $ 295,013,739
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 216,741,954
Accumulated net realized gain 61,167,891
Net unrealized appreciation 17,103,894
--------------
NET ASSETS $ 295,013,739
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization (Net Assets $279,326,040) 14,035,651
Net asset value per share $19.90
Offering price per share $19.90/(1-4.75%) $20.89
CLASS B
Shares of beneficial interest outstanding, $1 par value, unlimited
authorization (Net Assets $15,687,699) 817,833
Net asset value and offering price per share $19.18
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 2,655,076
Dividends 1,154,346
Security lending 141,922
Foreign tax withheld (562)
--------------
Total investment income 3,950,782
--------------
EXPENSES
Investment advisory fee 2,476,987
Distribution fee, Class A 783,434
Distribution fee, Class B 168,938
Financial agent fee 198,734
Transfer agent 563,414
Printing 80,377
Professional 42,675
Registration 41,007
Custodian 35,510
Trustees 21,986
Miscellaneous 5,244
--------------
Total expenses 4,418,306
--------------
NET INVESTMENT LOSS (467,524)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 61,746,081
Net change in unrealized appreciation (depreciation) on
investments (38,514,321)
--------------
NET GAIN ON INVESTMENTS 23,231,760
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,764,236
--------------
--------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Phoenix Mid Cap Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (467,524) $ (450,831)
Net realized gain 61,746,081 36,321,860
Net change in unrealized appreciation
(depreciation) (38,514,321) (8,036,315)
-------------- --------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 22,764,236 27,834,714
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (33,084,355) (51,980,339)
Net realized gains, Class B (1,776,186) (2,025,912)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (34,860,541) (54,006,251)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,824,332 and
2,046,000 shares, respectively) 55,807,991 41,010,257
Net asset value of shares issued from
reinvestment of distributions
(1,780,474 and 2,624,028 shares, respectively) 32,263,501 49,101,364
Cost of shares repurchased (8,014,004 and
8,074,195 shares, respectively) (157,423,669) (156,230,117)
-------------- --------------
Total (69,352,177) (66,118,496)
-------------- --------------
CLASS B
Proceeds from sales of shares (92,246 and
229,655 shares, respectively) 1,729,101 4,456,304
Net asset value of shares issued from
reinvestment of distributions
(96,993 and 102,293 shares, respectively) 1,705,266 1,877,087
Cost of shares repurchased (295,559 and 234,195
shares, respectively) (5,608,396) (4,479,411)
-------------- --------------
Total (2,174,029) 1,853,980
-------------- --------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (71,526,206) (64,264,516)
-------------- --------------
NET DECREASE IN NET ASSETS (83,622,511) (90,436,053)
NET ASSETS
Beginning of period 378,636,250 469,072,303
-------------- --------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) $ 295,013,739 $ 378,636,250
-------------- --------------
-------------- --------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Phoenix Mid Cap Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
--------------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.64 $ 21.65 $ 22.03 $ 18.03 $ 18.70
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.01 (0.02)(1) (0.03)(1) 0.05(1) 0.11
Net realized and unrealized gain 1.18 1.52 2.53 4.74 0.10
------- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 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 (1.93) (2.51) (2.88) (0.73) (0.78)
------- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.93) (2.51) (2.88) (0.79) (0.88)
------- ----- ----- ----- -----
Change in net asset value (0.74) (1.01) (0.38) 4.00 (0.67)
------- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 19.90 $ 20.64 $ 21.65 $ 22.03 $ 18.03
------- ----- ----- ----- -----
------- ----- ----- ----- -----
Total return(2) 6.64% 8.12% 13.52% 27.87% 1.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $279,326 $360,053 $451,474 $487,674 $419,760
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.30% 1.33% 1.35% 1.42% 1.36%
Net investment income (loss) (0.10)% (0.08)% (0.17)% 0.28% 0.59%
Portfolio turnover 379% 161% 242% 218% 227%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
------------------------------------------------------------ 7/18/94 TO
1998 1997 1996 1995 11/30/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.11 $ 21.30 $ 21.85 $ 17.97 $ 17.68
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.18) (0.16)(1) (0.18)(1) (0.12)(1) (0.01)
Net realized and unrealized gain 1.18 1.47 2.51 4.75 0.30
------ ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 1.00 1.31 2.33 4.63 0.29
------ ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income -- -- -- (0.02) --
Dividends from net realized gains (1.93) (2.50) (2.88) (0.73) --
------ ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.93) (2.50) (2.88) (0.75) --
------ ----- ----- ----- -----
Change in net asset value (0.93) (1.19) (0.55) 3.88 0.29
------ ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 19.18 $ 20.11 $ 21.30 $ 21.85 $ 17.97
------ ----- ----- ----- -----
------ ----- ----- ----- -----
Total return(2) 5.80% 7.27% 12.75% 26.92% 1.64%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $15,688 $18,583 $17,599 $10,908 $1,519
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.04% 2.08% 2.11% 2.18% 2.05%(3)
Net investment income (loss) (0.85)% (0.85)% (0.92)% (0.58)% (0.23)%(3)
Portfolio turnover 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.
18
See Notes to Financial Statements
<PAGE>
PHOENIX INTERNATIONAL PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund is appropriate for investors seeking high total return consistent
with reasonable risk by investing primarily in an internationally diversified
portfolio of equity securities. The Fund essentially focuses on quality
companies with strong management, solid growth prospects and attractive relative
valuations. Investors should note that foreign investments pose added risks,
such as currency fluctuation, less public disclosure, as well as economic and
political risks.
Q: HOW DID THE FUND PERFORM DURING THIS VOLATILE MARKET ENVIRONMENT?
A: For the year ended November 30, 1998, Class A shares returned 26.17% and
Class B shares returned 25.17% compared with a return of 16.77% for the Fund's
benchmark index, the Morgan Stanley Capital International (MSCI) EAFE Index(1).
The average return for a peer universe of 511 international funds was 10.43%,
according to Lipper Inc. All performance figures assume reinvestment of
distributions and exclude the effect of sales charges.
Q: WHAT FACTORS MOST AFFECTED PERFORMANCE?
A: For the first half of the year, the Fund benefited from its overweight
exposure in Europe and its lack of exposure to Asia. The advent of the euro has
given European institutions access to a much greater pool of domestic currency
investments. Also, European markets attracted significant levels of foreign
investment enamored by a region with growing economics. This, coupled with the
need for corporations to restructure in order to be prepared for a more
competitive pan-European market and an emerging trend of improving shareholder
returns, enabled the European equity markets to post particularly strong
returns.
Meanwhile, the currency-led collapse in the Pacific Basin left the region's
markets in tatters, with investors nursing heavy losses. Only a determined
effort by the International Monetary Fund and the U.S. to establish credible
recovery plans contained the crisis mostly within the region, allowing a
selective market recovery in the first quarter of 1998. Even this, however,
petered out as investors' relief that the worst was over gave way to the
realization that there was still much deeper economic pain to endure. Even Hong
Kong and Singapore saw their stock markets fall heavily.
The second half of the fiscal year was a period of amazing volatility. After
European and U.S. markets reached their peak in early July, markets worldwide
tumbled on a flood of bad news. The initial catalyst for the dramatic downturn
was the financial crisis in Russia where the ruble collapsed. Nervousness spread
to other markets, particularly Latin America where it was feared that Brazil was
the next in line to devalue. All of the region's currencies came under intense
pressure, interest rates soared, and equity markets plunged almost 50% in less
than two months. Confirmation that Japan was suffering its worst economic slump
since 1945 added to international market worries. The crash of the Russian ruble
and the severe downturn in worldwide markets also put many hedge funds in severe
financial
(1) 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.
19
<PAGE>
PHOENIX INTERNATIONAL PORTFOLIO (CONTINUED)
difficulties, and the announcement that U.S. hedge fund manager Long-Term
Capital Management LP had been bailed out to the extent of $3.5 billion sent
shockwaves through the financial community.
All this bad news completely wiped out the year-to-date gains for many
markets, and by early October several markets had fallen to a one-year low.
However, concerted worldwide action since that time has resulted in a dramatic
recovery in worldwide markets as stocks rose on expectations that corporate
profits would benefit from lower interest rates. Much of the credit must be
given to the U.S. Federal Reserve, which cut interest rates three times in seven
weeks to ensure that the U.S. economy did not slide into recession. We have also
seen cuts in European interest rates, and the Japanese government announced a
major package to stimulate its failing economy. Markets in Southeast Asia also
showed signs of recovery, with the perception being that the worst is now over
for that region. The successful completion of an International Monetary Fund
rescue package for Brazil also helped bolster world markets, with a strong
rebound for emerging markets that had been particularly affected by the late
summer downturn.
Q: WHAT CHANGES HAVE BEEN MADE TO THE FUND'S ASSET ALLOCATION?
A: In the second half of the year, we reduced our large overweighting to
European equities. This area had resulted in substantial outperformance, but we
were concerned that valuations had advanced too quickly in many instances. We
decided that it would be opportune to take profits in Europe and reinvest the
proceeds in Japan where we previously had no holdings. This strategy has proved
successful to date, as although both the European and Japanese markets have
fallen since July, the Japanese yen has strengthened significantly, resulting in
net dollar gains for our Japanese investments.
Q: WHAT IS THE OUTLOOK FOR INTERNATIONAL MARKETS?
A: While the manufacturing sector continues under pressure in most countries,
consumer confidence is rebounding once again in a number of economies,
suggesting still relatively buoyant consumer spending.
The rally in the UK has returned it to a level that is above most revised
expectations for this year. However, it is the excellent technical position that
provides the strongest support together with the prospect of further monetary
easing in the UK. Economic growth forecasts meanwhile remain under pressure and
will clearly impact further on earnings expectations. As with the UK,
Continental Europe appears less at risk than the U.S. from a valuation
perspective, even given the degree to which perceptions surrounding Europe's
economic growth and earnings prospects have deteriorated since the tremendous
rally earlier in the year. We believe additional rate cuts are on the agenda for
early next year and should offset any concerns over the launch of the euro.
In the Far East, sentiment towards Japan is improving, with fund managers
becoming increasingly nervous of their generally underweight positions in the
stock market and currency. There is growing optimism about the economy and
banking system following the government's recent measures, but possibly this is
due more to the hope that this will prevent imminent free-fall than belief that
the plans solve Japan's structural problems. Further short-term support for the
stock market may emerge from an eventual deal between the LDP
20
<PAGE>
PHOENIX INTERNATIONAL PORTFOLIO (CONTINUED)
and Liberals to suspend the sales tax. Elsewhere in Asia, currencies have
stabilized and interest rates have fallen. A protracted recovery is likely,
provided that there is no worsening of the U.S. and Japanese economies.
The emerging markets outside Asia have also bounced strongly, and a pause
now seems probable. In Latin America, the International Monetary Fund
restructure package has presented Brazil with the opportunity to resolve
structural issues that have held the country back for some time.
Overall, the scale of recent rallies suggests a period of consolidation is
due. But, liquidity-driven rallies tend to be stronger and continue longer than
most people expect, and it would be no surprise to see markets squeezed higher
over the short term. We believe the U.S. will set the trends for other equity
markets, and a soft landing, very low inflation, falling interest rates and
steady earnings growth are a possibility. Add in excess liquidity, continuing
merger and acquisition activity, and we believe valuations could go even higher.
DECEMBER 11, 1998
21
<PAGE>
Phoenix International Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEAR TO 11/30/98 DATE
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 26.17% 13.87% 10.17% 11/01/89
Class A Shares at POP(3) 20.19% 12.76% 9.59% 11/01/89
Class B Shares at NAV(2) 25.17% -- 11.55% 7/15/94
Class B Shares with CDSC(4) 21.32% -- 11.25% 7/15/94
MSCI EAFE(6) 16.77% 10.18% Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and
the reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of
any sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) Index performance is 5.81% for ClassA (since 10/31/89) and 7.74% for
Class B (since 6/30/94) for the MSCI EAFE Index.
(6) This chart illustrates POP returns on Class A Shares for ten years
or inception date if inception is less than 10 years. Returns on Class B
Shares will vary due to differing sales charges.
(7) 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.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
International
Portfolio
Class A(6) MSCI EAFE(7)
11/1/89 $9,523.81 $10,000.00
11/30/89 $9,942.86 $10,505.00
11/30/90 $9,868.89 $8,229.63
11/30/91 $10,684.60 $8,946.42
11/30/92 $9,625.85 $8,250.82
11/30/93 $11,989.35 $10,284.41
11/30/94 $13,568.59 $11,841.01
11/30/95 $14,127.19 $12,776.41
11/30/96 $16,815.66 $14,321.11
11/30/97 $18,195.45 $14,303.14
11/30/98 $22,956.40 $16,702.37
This growth of $10,000 chart assumes an initial investment of
$10,000 made on 11/1/89 in Class A shares and reflects the maximum
sales charge of 4.75% on the initial investment. Performance assumes
dividends and capital gains are reinvested. The performance of other
share classes will be greater or less than that shown based on differences
in inception dates, fees and sales charges.
COUNTRY WEIGHTINGS 11/30/98
As a percentage of net assets
United Kingdom 22%
Japan 18%
France 10%
Germany 9%
Netherlands 7%
Sweden 6%
Italy 5%
Other 23%
22
<PAGE>
Phoenix International Portfolio
TEN LARGEST HOLDINGS AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Novartis AG Registered Shares 2.5%
MANUFACTURES HEALTH-CARE PRODUCTS FOR WORLDWIDE DISTRIBUTION
2. DaimlerChrysler AG 1.7%
WORLD'S THIRD LARGEST AUTOMAKER
3. Nokia Oyj Class A 1.4%
MANUFACTURES MOBILE PHONES AND OTHER TELECOM PRODUCTS
4. Glaxo Wellcome PLC 1.4%
CONDUCTS RESEARCH AND MARKETS PHARMACEUTICAL PRODUCTS
5. Telefonica SA 1.4%
EXCLUSIVE SUPPLIER OF VOICE TELEPHONE SERVICES IN SPAIN
6. Zurich Allied AG 1.4%
INSURANCE AND ASSET MANAGEMENT PROVIDER
7. Mannesmann AG 1.3%
MANUFACTURES WIDE RANGE OF INDUSTRIAL PRODUCTS
8. Telecom Italia Mobile SPA 1.3%
EUROPE'S LARGEST CELLULAR TELEPHONE COMPANY
9. Istituto Bancario San Paolo di Torino 1.3%
ITALIAN COMMERCIAL BANK
10. British Petroleum Co. PLC 1.2%
PRODUCES, TRANSPORTS, REFINES AND MARKETS CRUDE OIL
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
FOREIGN COMMON STOCKS--96.9%
AUSTRALIA--1.1%
Australian Gas Light Co., Ltd. (Oil
(International Integrated))......... 135,000 $ 1,005,159
QBE Insurance Group Ltd. (Insurance
(Property-Casualty))................ 250,000 1,078,393
-------------
2,083,552
-------------
BRAZIL--1.3%
Tele Centro Sul Participacoes SA ADR
(Telephone)(b)...................... 6,500 370,906
Tele Norte Leste Participacoes SA
ADR (Telephone)(b).................. 26,000 442,000
Tele Sudeste Celular Participacoes
SA ADR (Telecommunications
(Cellular/Wireless))(b)............. 13,000 351,000
Telecomunicacoes Brasileiras SA
Sponsored ADR (Telephone)........... 13,900 1,317,894
-------------
2,481,800
-------------
DENMARK--0.5%
Tele Danmark A/S (Telecommunications
(Cellular/ Wireless))............... 8,200 918,477
FINLAND--2.3%
Nokia Oyj Class A
(Telecommunications (Cellular/
Wireless)).......................... 27,500 2,700,918
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
FINLAND--CONTINUED
Raisio Group PLC (Foods)............ 129,900 $ 1,687,614
-------------
4,388,532
-------------
FRANCE--9.7%
Alcatel (Telecommunications
(Cellular/Wireless))................ 12,300 1,630,975
Alstom (Machinery (Diversified)).... 58,750 1,378,828
Axa (Insurance (Multi-Line))........ 16,931 2,194,291
Cap Gemini SA (Computers (Software &
Services)).......................... 5,480 803,948
Castorama Dubois (Retail (Building
Supplies)).......................... 4,800 973,337
Coflexip SA (Oil & Gas (Drilling &
Equipment))......................... 10,800 791,831
Compagnie Financiere de Paribas
(Investment Banking/Brokerage)...... 21,600 1,931,017
Elf Aquitaine SA (Oil (International
Integrated))........................ 12,000 1,500,209
Galeries Lafayette (Retail
(Department Stores))................ 1,390 1,588,233
Groupe Danone (Foods)............... 6,100 1,785,510
Pechiney SA Class A (Aluminum)...... 51,600 1,723,272
Pinault-Printemps-Redoute SA (Retail
(Department Stores))................ 6,250 1,068,996
Rhodia SA (Chemicals
(Specialty))(b)..................... 61,000 957,829
-------------
18,328,276
-------------
GERMANY--8.6%
Adidas-Salomon AG (Textiles
(Apparel)).......................... 8,050 880,807
Bayerische Motoren Werke AG
(Automobiles)....................... 1,600 1,239,665
Bayerische Motoren Werke AG New
(Automobiles)(b).................... 479 362,626
DaimlerChrysler AG
(Automobiles)(b).................... 33,685 3,237,448
Deutsche Bank AG (Banks (Money
Center))............................ 29,200 1,808,183
Hoechst AG (Chemicals).............. 44,000 1,894,510
</TABLE>
See Notes to Financial Statements 23
<PAGE>
Phoenix International Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
GERMANY--CONTINUED
Mannesmann AG (Machinery
(Diversified))...................... 23,000 $ 2,496,185
Metro AG (Retail (Department
Stores))............................ 13,100 822,827
Muenchener
Rueckversicherungs-Gesellschaft AG
(Insurance (Reinsurance))........... 4,576 2,111,026
RWE AG (Oil (International
Integrated))........................ 26,800 1,429,731
-------------
16,283,008
-------------
GREECE--0.3%
Alpha Credit Bank (Banks (Major
Regional)).......................... 5,000 475,804
HONG KONG--1.3%
Henderson China Holding Ltd. (Real
Estate Development)................. 780 355
Hong Kong Electric Holdings Ltd.
(Electric Companies)................ 375,000 1,247,094
Swire Pacific Ltd. Class B
(Diversified Miscellaneous)(b)...... 1,800,000 1,266,951
-------------
2,514,400
-------------
HUNGARY--0.6%
Magyar Tavkozlesi Rt. Sponsored ADR
(Telecommunications (Long
Distance)).......................... 40,700 1,111,619
INDONESIA--0.4%
PT Indosat (Telecommunications
(Cellular/Wireless))................ 186,000 268,039
PT Indosat ADR (Telecommunications
(Cellular/ Wireless))............... 38,000 532,000
-------------
800,039
-------------
ITALY--4.6%
Istituto Bancario San Paolo di
Torino (Banks (Money Center))....... 145,464 2,393,772
Mediolanum SPA (Insurance
(Life/Health))...................... 305,000 1,840,038
Telecom Italia Mobile SPA
(Telecommunications
(Cellular/Wireless))................ 365,000 2,398,232
Telecom Italia SPA (Communications
Equipment).......................... 255,000 2,072,260
-------------
8,704,302
-------------
JAPAN--17.1%
77 Bank Ltd. (The) (Banks (Major
Regional)).......................... 154,000 1,437,016
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
JAPAN--CONTINUED
Canon, Inc. (Office Equipment &
Supplies)........................... 72,000 $ 1,593,231
Dai Nippon Printing Co., Ltd.
(Specialty Printing)................ 102,000 1,481,207
Fuji Photo Film Co.
(Photography/Imaging)............... 44,000 1,646,599
Hitachi Credit Corp. (Consumer
Finance)............................ 98,000 1,829,726
Ito-Yokado Co., Ltd. (Retail
(General Merchandise)).............. 30,000 1,835,340
Kao Corp. (Personal Care)........... 100,000 1,895,541
Kawasumi Laboratories, Inc. (Health
Care (Medical Products &
Supplies)).......................... 79,000 1,349,658
Kirin Beverage Corp. (Beverages
(Non-Alcoholic)).................... 68,000 1,228,115
Mabuchi Motor Co., Ltd. (Electronics
(Component Distributors))........... 24,000 1,767,003
Nippon COMSYS Corp. (Communications
Equipment).......................... 120,000 1,534,656
Nippon Telegraph & Telephone Corp.
(Telephone)......................... 1,500 1,122,681
Rinnai Corp. (Building Materials)... 87,000 1,468,638
Rohm Co., Ltd (Electronics
(Semiconductors))................... 17,000 1,438,333
Sanwa Bank Ltd. (The) (Banks (Money
Center))............................ 226,000 2,050,032
Secom Co., Ltd. (Services
(Commercial & Consumer))............ 30,000 2,223,397
Shin-Etsu Chemical Co., Ltd.
(Chemicals)......................... 101,000 2,259,599
Suzuki Motor Corp. (Automobiles).... 180,000 2,064,757
Takeda Chemical Industries (Health
Care (Drugs-Major
Pharmaceuticals))................... 63,000 2,126,993
-------------
32,352,522
-------------
MALAYSIA--0.2%
Carlsberg Brewery Malaysia Berhad
(Beverages (Alcoholic))(c).......... 125,000 254,934
Malaysian Oxygen Berhad
(Chemicals)(c)...................... 85,000 136,075
-------------
391,009
-------------
MEXICO--1.3%
Cemex SA de C.V. Class B (Building
Materials).......................... 142,500 419,976
Cemex SA de C.V. CPO (Building
Materials).......................... 4,275 10,357
</TABLE>
24 See Notes to Financial Statements
<PAGE>
Phoenix International Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
MEXICO--CONTINUED
Telefonos de Mexico SA Sponsored ADR
Class L (Telephone)................. 43,800 $ 2,039,437
-------------
2,469,770
-------------
NETHERLANDS--7.2%
AKZO Nobel NV (Chemicals)........... 39,700 1,632,494
ASM Lithography Holding NV
(Electronics (Semiconductors))(b)... 56,100 1,638,940
Fortis Amev NV (Insurance
(Multi-Line))....................... 20,000 1,473,843
Getronics NV (Computers (Software &
Services)).......................... 43,700 1,916,164
Koninklijke Ahold NV (Foods)........ 52,900 1,839,561
Koninklijke KPN NV
(Telecommunications (Cellular/
Wireless)).......................... 27,000 1,168,322
Royal Dutch Petroleum Co. (Oil
(International Integrated))......... 42,500 2,041,876
Verenigde Nederlandse
Uitgeversbedrijven NV
(Publishing)........................ 53,400 1,840,143
-------------
13,551,343
-------------
NEW ZEALAND--0.2%
Telecom Corporation of New Zealand
Ltd. (Telecommunications
(Cellular/Wireless))................ 80,000 341,918
PHILIPPINES--0.5%
Ayala Land, Inc. (Real Estate
Development)........................ 1,250,000 388,641
Philippine Long Distance Telephone
Co. Sponsored ADR (Telephone)....... 18,000 472,500
-------------
861,141
-------------
SINGAPORE--0.8%
Rothmans Industries Ltd.
(Tobacco)........................... 150,000 856,112
United Overseas Bank Ltd. (Banks
(Money Center))..................... 105,000 608,842
-------------
1,464,954
-------------
SOUTH AFRICA--0.2%
Liberty Life Association of Africa
(Insurance (Life/ Health)).......... 26,000 444,605
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
SPAIN--3.1%
Argentaria, Caja Postal y Banco
Hipotecario de Espana SA (Banks
(Major Regional))................... 71,400 $ 1,667,389
Banco Popular Espanol SA (Banks
(Major Regional))................... 21,700 1,598,693
Banco Santander SA (Banks (Money
Center))............................ 1,684 34,527
Telefonica SA (Telephone)........... 55,900 2,634,153
-------------
5,934,762
-------------
SWEDEN--5.6%
AssiDoman AB (Paper & Forest
Products)........................... 59,000 1,032,727
Astra AB Class A (Health Care
(Drugs-Major Pharmaceuticals))...... 103,100 1,893,609
ForeningsSparbanken AB (Banks (Major
Regional)).......................... 48,000 1,349,029
Mandamus AB (Real Estate
Development)(b)..................... 2,400 12,721
Skandia Forsakrings AB (Insurance
(Multi-Line))....................... 134,000 1,907,797
Svenska Handlesbanken Class A (Banks
(Major Regional))................... 32,900 1,330,194
Telefonaktiebolaget LM Ericsson
Class B (Telecommunications
(Cellular/Wireless))................ 70,000 1,950,077
Volvo AB Class B (Automobiles)...... 50,000 1,164,869
-------------
10,641,023
-------------
SWITZERLAND--8.1%
Nestle AG (Foods)................... 830 1,729,801
Novartis AG Registered Shares
(Health Care (Drugs-Major
Pharmaceuticals))................... 2,540 4,782,499
Roche Holding AG (Health Care
(Drugs-Major Pharmaceuticals))...... 150 1,767,889
Schweizerische
Lebensversicherungs-und
Rentenanstalt Bearer (Insurance
(Life/Health))...................... 2,060 1,444,897
Schweizerische
Rueckersicherungs-Gesellschaft
Registered (Insurance
(Reinsurance))...................... 430 1,090,227
UBS AG (Banks (Money Center))....... 5,900 1,780,825
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Phoenix International Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
SWITZERLAND--CONTINUED
Zurich Allied AG (Insurance
(Multi-Line))....................... 3,670 $ 2,629,548
-------------
15,225,686
-------------
TAIWAN--0.2%
Standard Foods Taiwan Ltd. GDR
(Foods)............................. 27,000 307,125
UNITED KINGDOM--21.7%
3I Group PLC (Investment
Banking/Brokerage).................. 67,000 630,364
Bank of Scotland (Banks (Money
Center))............................ 100,000 1,105,903
Barclays PLC (Banks (Money
Center))............................ 45,000 1,021,309
Bass PLC (Beverages (Alcoholic)).... 45,000 620,956
Berkeley Group PLC (The) (Real
Estate Development)................. 55,000 443,929
BG PLC (Oil & Gas (Exploration &
Production))........................ 112,000 768,124
British Aerospace PLC
(Aerospace/Defense)................. 125,400 1,078,394
British Petroleum Co. PLC (Oil
(International Integrated))......... 145,000 2,261,736
British Telecommunications PLC
(Telecommunications
(Cellular/Wireless))................ 150,000 2,056,236
Cable & Wireless PLC
(Telecommunications
(Cellular/Wireless))................ 130,000 1,652,251
Compass Group PLC (Foods)........... 131,000 1,381,701
FirstGroup PLC
(Transportation-Services)........... 104,000 673,775
GKN PLC (Auto Parts & Equipment).... 64,000 706,721
Glaxo Wellcome PLC (Health Care
(Drugs-Major Pharmaceuticals))...... 84,000 2,657,929
Granada Group PLC (Leisure Time
(Products))......................... 55,000 858,808
HSBC Holdings PLC (Banks (Money
Center))............................ 33,000 893,305
Kingfisher PLC (Retail (Department
Stores))............................ 103,800 990,301
Ladbroke Group PLC (Gaming, Lottery
& Parimutuel Companies)............. 143,000 553,504
Legal & General Group PLC (Insurance
(Life/ Health))..................... 96,000 1,176,548
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
UNITED KINGDOM--CONTINUED
Lloyds TSB Group PLC (Banks (Money
Center))............................ 140,000 $ 1,946,884
Logica PLC (Computers (Software &
Services)).......................... 110,000 798,891
National Westminster Bank PLC (Banks
(Money Center))..................... 65,000 1,186,617
Norwich Union PLC (Insurance
(Life/Health))...................... 106,000 743,596
Rentokil Initial PLC (Services
(Commercial & Consumer))............ 126,000 811,105
Reuters Group PLC (Services
(Commercial & Consumer))............ 76,000 734,484
Rio Tinto PLC (Metals Mining)....... 47,000 550,806
RMC Group PLC (Building
Materials).......................... 55,000 718,094
Safeway PLC (Foods)................. 138,000 681,071
Schroders PLC (Banks (Money
Center))............................ 38,000 780,272
Shell Transport & Trading Co. PLC
(Oil (International Integrated)).... 160,000 965,271
Siebe PLC (Electrical Equipment).... 224,800 808,900
SmithKline Beecham PLC (Health Care
(Drugs-Major Pharmaceuticals))...... 110,000 1,350,852
Southern Electric PLC (Electric
Companies).......................... 85,000 978,600
Tesco PLC (Foods)................... 352,628 1,041,865
Unilever PLC (Consumer Products
(Miscellaneous)).................... 76,000 790,935
United Utilities PLC (Electric
Companies).......................... 50,000 728,740
Vodafone Group PLC
(Telecommunications
(Cellular/Wireless))................ 108,000 1,595,471
Woolwich PLC (Banks (Major
Regional)).......................... 190,000 1,209,767
Zeneca Group PLC (Health Care
(Drugs-Major Pharmaceuticals))...... 23,000 956,688
-------------
40,910,703
-------------
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $165,539,529) 182,986,370
- ----------------------------------------------------------------------------
</TABLE>
26 See Notes to Financial Statements
<PAGE>
Phoenix International Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C> <C>
RIGHTS--0.0%
GERMANY--0.0%
Metro AG Rights (Retail (Department
Stores))(b)......................... 13,100 $ 28,125
- ----------------------------------------------------------------------------
TOTAL RIGHTS
(IDENTIFIED COST $0) 28,125
- ----------------------------------------------------------------------------
WARRANTS--0.0%
GERMANY--0.0%
Muenchener
Rueckversicherungs-Gesellschaft AG
Warrants (Insurance
(Reinsurance))(b)................... 176 7,412
- ----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 7,412
- ----------------------------------------------------------------------------
FOREIGN PREFERRED STOCKS--0.9%
GERMANY--0.9%
SAP AG Vorzug Pfd. (Computers
(Software & Services)).............. 3,100 1,618,957
- ----------------------------------------------------------------------------
TOTAL FOREIGN PREFERRED STOCKS
(IDENTIFIED COST $752,357) 1,618,957
- ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.8%
(IDENTIFIED COST $166,291,886) 184,640,864
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.9%
COMMERCIAL PAPER--2.9%
Home Products Inc., 5.25%,
12/01/98........................ A-1+ $ 1,700 $ 1,700,000
Marsh & McLennan Co., Inc.
4.85%, 12/02/98................. A-1+ 2,235 2,234,699
Preferred Receivables Funding
5.05%, 12/02/98................. A-1 1,610 1,609,774
-------------
5,544,473
-------------
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $5,544,473) 5,544,473
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--100.7%
(IDENTIFIED COST $171,836,359) 190,185,337(a)
Cash and receivables, less liabilities--(0.7%) (1,407,840)
-------------
NET ASSETS--100.0% $ 188,777,497
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $25,612,280 and gross
depreciation of $7,326,527 for federal income tax purposes. At November 30,
1998, the aggregate cost of securities for federal income tax purposes was
$171,899,584.
(b) Non-income producing.
(c) Security valued at fair value as determined in good faith by or under the
direction of the directors.
See Notes to Financial Statements 27
<PAGE>
Phoenix International Portfolio
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<TABLE>
<S> <C>
Aerospace/Defense........................................................ 0.6%
Aluminum................................................................. 0.9
Auto Parts & Equipment................................................... 0.4
Automobiles.............................................................. 4.4
Banks (Major Regional)................................................... 4.9
Banks (Money Center)..................................................... 8.4
Beverages (Alcoholic).................................................... 0.5
Beverages (Non-Alcoholic)................................................ 0.7
Building Materials....................................................... 1.4
Chemicals................................................................ 3.2
Chemicals (Specialty).................................................... 0.5
Communications Equipment................................................. 3.3
Computers (Software & Services).......................................... 2.8
Consumer Finance......................................................... 1.0
Consumer Products (Miscellaneous)........................................ 0.4
Diversified Miscellaneous................................................ 0.7
Health Care (Drugs-Major Pharmaceuticals)................................ 8.3
Health Care (Medical Products & Supplies)................................ 0.7
Electric Companies....................................................... 1.6
Electrical Equipment..................................................... 0.4
Electronics (Component Distributors)..................................... 1.0
Electronics (Semiconductors)............................................. 1.7
Foods.................................................................... 5.7
Gaming, Lottery & Parimutuel Companies................................... 0.3
Insurance (Life/Health).................................................. 3.1
Insurance (Multi-Line)................................................... 4.4
Insurance (Property-Casualty)............................................ 0.6
Insurance (Reinsurance).................................................. 1.7%
Investment Banking/Brokerage............................................. 1.4
Leisure Time (Products).................................................. 0.5
Machinery (Diversified).................................................. 2.1
Metals Mining............................................................ 0.3
Office Equipment & Supplies.............................................. 0.9
Oil & Gas (Drilling & Equipment)......................................... 0.4
Oil & Gas (Exploration & Production)..................................... 0.4
Oil (International Integrated)........................................... 5.0
Paper & Forest Products.................................................. 0.6
Personal Care............................................................ 1.0
Photography/Imaging...................................................... 0.9
Publishing............................................................... 1.0
Real Estate Development.................................................. 0.5
Retail (Building Supplies)............................................... 0.5
Retail (Department Stores)............................................... 2.4
Retail (General Merchandise)............................................. 1.0
Services (Commercial & Consumer)......................................... 2.0
Specialty Printing....................................................... 0.8
Telecommunications (Long Distance)....................................... 0.6
Telecommunications (Cellular/Wireless)................................... 8.2
Telephone................................................................ 4.5
Textiles (Apparel)....................................................... 0.5
Tobacco.................................................................. 0.5
Transportation--Services................................................. 0.4
-----
100.0%
-----
-----
</TABLE>
28 See Notes to Financial Statements
<PAGE>
Phoenix International Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $171,836,359) $ 190,185,337
Cash 1,202,278
Foreign currency at value
(Identified cost $576,607) 584,199
Receivables
Investment securities sold 3,991,994
Fund shares sold 604,657
Dividends and interest 170,380
Tax reclaim 169,985
--------------
Total assets 196,908,830
--------------
LIABILITIES
Payables
Fund shares repurchased 5,583,952
Investment securities purchased 2,143,991
Investment advisory fee 119,430
Distribution fee 50,212
Transfer agent fee 45,394
Financial agent fee 6,602
Trustees' fee 5,514
Accrued expenses 176,238
--------------
Total liabilities 8,131,333
--------------
NET ASSETS $ 188,777,497
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 132,064,884
Undistributed net investment income 805,667
Accumulated net realized gain 37,536,027
Net unrealized appreciation 18,370,919
--------------
NET ASSETS $ 188,777,497
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $171,462,754) 10,731,189
Net asset value per share $15.98
Offering price per share $15.98/(1-4.75%) $16.78
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $17,314,743) 1,121,391
Net asset value and offering price per share $15.44
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,953,335
Interest 515,499
Foreign taxes withheld (290,037)
--------------
Total investment income 3,178,797
--------------
EXPENSES
Investment advisory fee 1,350,786
Distribution fee, Class A 414,622
Distribution fee, Class B 142,559
Financial agent fee 127,252
Transfer agent 192,676
Custodian 184,310
Professional 47,799
Printing 40,125
Registration 28,080
Trustees 21,998
Miscellaneous 16,440
--------------
Total expenses 2,566,647
--------------
NET INVESTMENT INCOME 612,150
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 39,063,948
Net realized gain on foreign currency transactions 525,954
Net change in unrealized appreciation (depreciation) on
investments (654,741)
Net change in unrealized appreciation (depreciation) on foreign
currency and foreign currency transactions 20,093
--------------
NET GAIN ON INVESTMENTS 38,955,254
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 39,567,404
--------------
--------------
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Phoenix International Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 612,150 $ 234,826
Net realized gain 39,589,902 11,443,109
Net change in unrealized appreciation
(depreciation) (634,648) (622,326)
-------------- --------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 39,567,404 11,055,609
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A -- (2,608,239)
Net investment income, Class B -- (129,259)
Net realized gains, Class A (12,005,464) (12,021,547)
Net realized gains, Class B (942,871) (658,133)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (12,948,335) (15,417,178)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (14,403,040 and
4,286,206 shares, respectively) 222,721,708 59,385,258
Net asset value of shares issued from
reinvestment of distributions
(829,298 and 1,013,490 shares, respectively) 10,631,599 12,960,134
Cost of shares repurchased (13,954,794 and
5,208,361 shares, respectively) (218,052,596) (72,329,439)
-------------- --------------
Total 15,300,711 15,953
-------------- --------------
CLASS B
Proceeds from sales of shares (1,090,651 and
728,032 shares, respectively) 16,507,911 9,939,001
Net asset value of shares issued from
reinvestment of distributions
(68,327 and 56,632 shares, respectively) 852,722 713,037
Cost of shares repurchased (786,659 and 524,764
shares, respectively) (12,000,603) (7,287,447)
-------------- --------------
Total 5,360,030 3,364,591
-------------- --------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 20,660,741 3,380,544
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS 47,279,810 (981,025)
NET ASSETS
Beginning of period 141,497,687 142,478,712
-------------- --------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME AND DISTRIBUTIONS IN EXCESS
OF NET INVESTMENT INCOME OF $805,667 AND
($332,438), RESPECTIVELY) $ 188,777,497 $ 141,497,687
-------------- --------------
-------------- --------------
</TABLE>
30 See Notes to Financial Statements
<PAGE>
Phoenix International Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.89 $ 14.48 $ 12.20 $ 12.63 $ 11.16
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.06(1) 0.03(1) 0.04(1) 0.03(1) (0.01)
Net realized and unrealized gain 3.27 1.01 2.28 0.42 1.48
---------- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 3.33 1.04 2.32 0.45 1.47
---------- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.29) -- -- --
Dividends from net realized gains (1.24) (1.34) (0.04) (0.88) --
---------- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.24) (1.63) (0.04) (0.88) --
---------- ----- ----- ----- -----
Change in net asset value 2.09 (0.59) 2.28 (0.43) 1.47
---------- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 15.98 $ 13.89 $ 14.48 $ 12.20 $ 12.63
---------- ----- ----- ----- -----
---------- ----- ----- ----- -----
Total return(2) 26.17% 8.21% 19.03% 4.12% 13.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $171,463 $131,338 $135,524 $129,352 $167,918
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.37% 1.56% 1.57% 1.70% 1.47%
Net investment income 0.40% 0.22% 0.33% 0.23% 0.20%
Portfolio turnover 104% 167% 151% 236% 186%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
------------------------------------------------------- 7/15/94 TO
1998 1997 1996 1995 11/30/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.56 $ 14.22 $ 12.07 $ 12.60 $ 12.80
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.05)(1) (0.08)(1) (0.05)(1) (0.07)(1) (0.01)
Net realized and unrealized gain
(loss) 3.17 1.00 2.24 0.42 (0.19)
---------- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 3.12 0.92 2.19 0.35 (0.20)
---------- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.24) -- -- --
Dividends from net realized gains (1.24) (1.34) (0.04) (0.88) --
---------- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.24) (1.58) (0.04) (0.88) --
---------- ----- ----- ----- -----
Change in net asset value 1.88 (0.66) 2.15 (0.53) (0.20)
---------- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 15.44 $ 13.56 $ 14.22 $ 12.07 $ 12.60
---------- ----- ----- ----- -----
---------- ----- ----- ----- -----
Total return(2) 25.17% 7.37% 18.16% 3.28% (1.56)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $17,315 $10,159 $6,955 $3,261 $1,991
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.11% 2.31% 2.31% 2.50% 1.93%(3)
Net investment income (0.34)% (0.55)% (0.39)% (0.61)% 0.36%(3)
Portfolio turnover 104% 167% 151% 236% 186%
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in 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.
See Notes to Financial Statements 31
<PAGE>
PHOENIX REAL ESTATE SECURITIES PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, MICHAEL SCHATT
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix Real Estate Securities Portfolio is appropriate for investors seeking
investment in a diversified portfolio of real estate investment trusts and real
estate operating companies. The Fund's objective is to emphasize appreciation
and current yield equally. Investors should note that real estate investing
involves certain risks, including refinancing, economic impact on the industry,
changes in the value of properties owned, dependency on management skills and
liquidity risks similar to those associated with small company investing.
Q: HOW DID THE FUND PERFORM FOR THE PAST FISCAL YEAR?
A: For the 12 months ended November 30, 1998, the Real Estate Securities
Portfolio provided a return of (17.42)% for Class A shares and (18.01)% for
Class B shares. The return for the NAREIT Equity Total Return Index(1) for the
fiscal year was (13.37)%. All performance figures assume reinvestment of
distributions and exclude the effect of sales charges.
Q: HOW WAS THE GENERAL MARKET ENVIRONMENT FOR REITS?
A: The year has clearly been disappointing from a stock price performance
perspective. However, growth expectations in funds from operations (FFO)--the
proxy for earnings--which one year ago we indicated should be 9% to 12% per
share, have been met to date. Despite the negative press and broad-brush strokes
of criticism, the bottom line earnings were delivered overall. In fact, FFO per
share has grown by over 12% in the last two quarters. This compares to flat to
negative earnings growth for the broader market for the last two quarters.
Earnings growth for equity REITs has peaked in this year as we have moved
closer to equilibrium in the real estate cycle. This is not a surprise, but the
level of erosion of investor confidence in the sector has been. Some of the
concerns that surfaced in 1998 were valid, but others were exaggerated and were
frequently used to critique all equity REITs (over 170 NYSE-listed companies in
14 sectors). The concerns included the threats of overbuilding, legislative
action and a softening economy. They also included legitimate questions about a
lack of demonstrated discipline by some equity REITs in issuing additional
common shares and debt.
More than a few management teams did not recognize when their cost of
capital was greater than the return available in the market for acquisitions,
development or redevelopment. The capital markets ultimately disciplined them
and private developers appropriately. However, discipline was meted out
throughout the sector with very little distinction between offending REITs and
REITs with demonstrated fiscal responsibility.
Q: WHAT FACTORS AFFECTED PERFORMANCE?
A: Larger, more liquid equity REITs underperformed their peers overall this past
year, as investors were net sellers. Last years "growth" REITs, with significant
imbedded internal growth, were nevertheless abandoned by investors who no
(1) THE NAREIT (NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS) EQUITY
TOTAL RETURN INDEX IS AN UNMANAGED, COMMONLY USED MEASURE OF REAL ESTATE
EQUITY MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT AVAILABLE FOR
DIRECT INVESTMENT.
32
<PAGE>
PHOENIX REAL ESTATE SECURITIES PORTFOLIO (CONTINUED)
longer saw growth and momentum in those names. As we favor visible earnings,
particularly from internal growth, we were overweight in those companies. We
were also overweight in the two sectors that experienced the most multiple
contraction, office and hotels. The office and hotel sectors had the highest
earnings growth per share this year and traded at the deepest discount to net
asset value, but they were also subject to the largest swings on changes of
sentiment or fundamentals. These reasons caused us to underperform our benchmark
for the year.
Q: WHAT IS YOUR OUTLOOK FOR THE REIT MARKET?
A: Equity REITs experienced a multiple contraction of 21% versus the broader
market's multiple expansion of 20%. Equity REITs have also seen a decline in
earnings growth expectations from 9%-12% one year ago to 7%-9% today. Keep in
mind that the expectations of earnings growth for equity REITs were delivered
this year, whereas the broader market is expected to miss the original forecast
of 6.9% and deliver something under 2%.
Conservative growth estimates of funds from operations per share range from
5% to 7% in 1999 assuming no external growth and 7%-9% assuming modest external
growth in 1999. Equity REIT earnings fundamentals should, in our opinion,
continue to beat the broader market. In addition the dividend payout ratio as a
percentage of cash flow is at its lowest in the history of equity REITs, thus
allowing companies to retain cash flow in capital constrained times.
Based on this, we believe the broader market is expensive relative to REITs.
Last year we could not make the claim that real estate was cheaper on Wall
Street, than Main Street. This year we can. Whether one is looking at office or
industrial property values per square foot, apartment values per unit, hotel
values per key, health-care property values per bed, discounts to net asset
value, or FFO yield versus cap rates, equity REITs are cheaper today than
private market real estate.
Given the earnings expectation for the broader stock market combined with
its record high multiple and a return to a rational level of investor sentiment,
we believe equity REITs offer an attractive alternative to the broader market
with continued attractive yields.
DECEMBER 16, 1998
33
<PAGE>
Phoenix Real Estate Securities Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 11/30/98 DATE
<S> <C> <C> <C>
Class A Shares at NAV(2) (17.42)% 12.21% 03/01/95
Class A Shares at POP(3) (21.36) 10.76% 03/01/95
Class B Shares at NAV(2) (18.01) 11.37% 03/01/95
Class B Shares with CDSC(4) (20.88) 10.99% 03/01/95
NAREIT Index(6) (13.37) 13.02% 03/01/95
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period.
(5) This chart illustrates POP returns on Class A Shares and Class B Shares
since inception of the fund on 3/1/95.
(6) 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.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
Phoenix Real Phoenix Real
Estate Class A(5) Estate Class B(5) NAREIT Index(6)
3/1/95 $9,523.81 $10,000.00 $10,000.00
11/30/95 $10,463.41 $10,921.40 $10,903.00
11/30/96 $13,518.67 $14,006.49 $14,087.45
11/30/97 $17,769.30 $18,270.25 $18,275.16
11/30/98 $14,673.78 $14,783.89 $15,831.31
This growth of $10,000 chart assumes an initial investment of $10,000 made
on 3/1/95 in Class A shares and reflects the maximum sales charge of 4.75%
on the initial investment. Class B shares reflect the 5% contingent
deferred sales charge (CDSC), which is applicable on all shares redeemed
during the first year after purchase and 4% for all shares redeemed
during the second year after purchase (scaled down to 3% - third year,
2% - 4th and 5th YEARS, and 0% thereafter). Performance assumes dividends
and capital gains are reinvested. The performance of other share classes will
be greater or less than that shown based on differences in inception dates,
fees and sales charges.
SECTOR WEIGHTINGS 11/30/98
As a percentage of net assets
Office/Industrial 44%
Diversified 17%
Apartments 14%
Regional Malls 6%
Manufactured Homes 5%
Other 14%
34
<PAGE>
Phoenix Real Estate Securities Portfolio
TEN LARGEST HOLDINGS AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Vornado Realty Trust 7.1%
DIVERSIFIED REIT
2. Boston Properties, Inc. 6.6%
OFFICE/INDUSTRIAL REIT
3. Spieker Properties, Inc. 6.5%
OFFICE/INDUSTRIAL REIT
4. Crescent Real Estate Equities Co. 5.4%
DIVERSIFIED REIT
5. Equity Residential Properties Trust 5.3%
APARTMENT REIT
6. Duke Realty Investments, Inc. 4.8%
OFFICE/INDUSTRIAL REIT
7. Mack-Cali Realty Corp. 3.9%
OFFICE/INDUSTRIAL REIT
8. TriNet Corporate Realty Trust, Inc. 3.7%
OFFICE/INDUSTRIAL REIT
9. Highwoods Properties, Inc. 3.6%
OFFICE/INDUSTRIAL REIT
10. Colonial Properties Trust 3.4%
DIVERSIFIED REIT
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C> <C>
COMMON STOCKS--98.7%
REAL ESTATE INVESTMENT TRUSTS--98.4%
COMMERCIAL--45.8%
OFFICE/INDUSTRIAL--43.4%
Alexandria Real Estate Equities, Inc.... 30,000 $ 926,250
Boston Properties, Inc.................. 92,200 2,910,062
Duke Realty Investments, Inc............ 93,400 2,119,012
Equity Office Properties Trust.......... 40,360 1,014,045
First Industrial Realty Trust, Inc...... 59,000 1,427,062
Highwoods Properties, Inc............... 58,000 1,576,875
Mack-Cali Realty Corp................... 57,900 1,718,906
Reckson Associates Realty Corp.......... 60,700 1,399,894
Spieker Properties, Inc................. 79,400 2,868,325
TriNet Corporate Realty Trust, Inc...... 60,000 1,608,750
Weeks Corp.............................. 37,300 1,067,712
------------
18,636,893
------------
STORAGE--2.4%
Storage USA, Inc........................ 31,700 1,006,475
- -------------------------------------------------------------------------------
TOTAL COMMERCIAL 19,643,368
- -------------------------------------------------------------------------------
DIVERSIFIED--16.3%
Colonial Properties Trust............... 55,000 1,488,438
Crescent Real Estate Equities Co........ 96,400 2,391,925
Vornado Realty Trust.................... 81,500 3,097,000
------------
6,977,363
------------
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C> <C>
HEALTH CARE--3.9%
Nationwide Health Properties, Inc....... 56,400 $ 1,261,950
OMEGA Healthcare Investors, Inc......... 14,000 425,250
------------
1,687,200
------------
HOTELS--2.9%
Patriot American Hospitality, Inc....... 55,301 407,845
Starwood Hotels & Resorts............... 27,600 838,350
------------
1,246,195
------------
RESIDENTIAL--18.4%
APARTMENTS--13.9%
Avalonbay Communities, Inc.............. 40,700 1,378,713
Equity Residential Properties Trust..... 54,800 2,318,725
Essex Property Trust, Inc............... 38,400 1,188,000
Irvine Apartment Communities, Inc....... 40,500 1,085,906
------------
5,971,344
------------
MANUFACTURED HOMES--4.5%
Manufactured Home Communities, Inc...... 41,500 1,016,750
Sun Communities, Inc.................... 28,200 918,263
------------
1,935,013
------------
- -------------------------------------------------------------------------------
TOTAL RESIDENTIAL 7,906,357
- -------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 35
<PAGE>
Phoenix Real Estate Securities Portfolio
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C> <C>
RETAIL--11.1%
FACTORY OUTLET--2.5%
Chelsea GCA Realty, Inc................. 31,600 $ 1,068,475
REGIONAL MALLS--6.4%
Macerich Co. (The)...................... 43,800 1,166,175
Simon Property Group, Inc............... 22,208 657,912
Urban Shopping Centers, Inc............. 28,000 920,500
------------
2,744,587
------------
STRIP CENTERS--2.2%
Developers Diversified Realty Corp...... 49,200 950,175
- -------------------------------------------------------------------------------
TOTAL RETAIL 4,763,237
- -------------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(IDENTIFIED COST $43,212,338) 42,223,720
- -------------------------------------------------------------------------------
REAL ESTATE OPERATING COMPANIES--0.3%
COMMERCIAL--0.2%
OFFICE/INDUSTRIAL--0.2%
Reckson Services Industries, Inc........ 29,136 85,587
DIVERSIFIED--0.1%
Vornado Operating Inc.(b)............... 4,075 25,978
HEALTH CARE--0.0%
OMEGA Worldwide, Inc.(b)................ 4,641 21,176
- -------------------------------------------------------------------------------
TOTAL REAL ESTATE OPERATING COMPANIES
(IDENTIFIED COST $122,775) 132,741
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $43,335,113) 42,356,461
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.9%
COMMERCIAL PAPER--1.9%
Exxon Imperial, Inc. 5.32%, 12/1/98..... A-1+ $820 $ 820,000
- -------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $820,000) 820,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.6%
(IDENTIFIED COST $44,155,113) 43,176,461(a)
Cash and receivables, less liabilities--(0.6)% (252,796)
-------------
NET ASSETS--100.0% $ 42,923,665
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net depreciation of investment securities
is comprised of gross appreciation of $4,041,966 and gross depreciation of
$5,021,622 for federal income tax purposes. At November 30, 1998, the
aggregate cost of securities for federal income tax purpose was
$44,156,117.
(b) Non-income producing.
36 See Notes to Financial Statements
<PAGE>
Phoenix Real Estate Securities Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $44,155,113) $ 43,176,461
Cash 4,134
Receivables
Dividends and interest 59,631
Fund shares sold 15,882
--------------
Total assets 43,256,108
--------------
LIABILITIES
Payables
Fund shares repurchased 209,329
Distribution fee 20,136
Investment advisory fee 15,045
Transfer agent fee 5,624
Financial agent fee 5,533
Trustees' fee 5,515
Accrued expenses 71,261
--------------
Total liabilities 332,443
--------------
NET ASSETS $ 42,923,665
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 43,409,899
Undistributed net investment income 563,936
Accumulated net realized loss (71,518)
Net unrealized depreciation (978,652)
--------------
NET ASSETS $ 42,923,665
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $24,686,262) 2,015,284
Net asset value per share $12.25
Offering price per share $12.25/(1-4.75%) $12.86
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,237,403) 1,496,083
Net asset value and offering price per share $12.19
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 2,674,086
Interest 40,807
--------------
Total investment income 2,714,893
--------------
EXPENSES
Investment advisory fee 398,336
Distribution fee, Class A 77,859
Distribution fee, Class B 219,679
Financial agent fee 74,616
Transfer agent 86,663
Professional 33,199
Registration 24,441
Printing 21,794
Trustees 20,071
Custodian 9,930
Miscellaneous 5,549
--------------
Total expenses 972,137
Less expenses borne by investment adviser (111,386)
--------------
Net expenses 860,751
--------------
NET INVESTMENT INCOME 1,854,142
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (70,514)
Net change in unrealized appreciation (depreciation) on
investments (12,098,214)
--------------
NET LOSS ON INVESTMENTS (12,168,728)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (10,314,586)
--------------
--------------
</TABLE>
See Notes to Financial Statements 37
<PAGE>
Phoenix Real Estate Securities Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 1,854,142 $ 1,449,798
Net realized gain (loss) (70,514) 3,771,039
Net change in unrealized appreciation
(depreciation) (12,098,214) 6,590,856
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS (10,314,586) 11,811,693
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (967,687) (1,017,253)
Net investment income, Class B (535,003) (412,660)
Net realized gains, Class A (2,254,756) (436,592)
Net realized gains, Class B (1,514,857) (164,397)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (5,272,303) (2,030,902)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (445,657 and
1,072,429 shares, respectively) 6,419,885 15,754,217
Net asset value of shares issued from
reinvestment of distributions
(207,094 and 96,059 shares, respectively) 3,035,928 1,368,531
Cost of shares repurchased (855,051 and 692,074
shares, respectively) (11,951,570) (10,024,000)
-------------- --------------
Total (2,495,757) 7,098,748
-------------- --------------
CLASS B
Proceeds from sales of shares (362,036 and
851,567 shares, respectively) 5,231,142 12,428,285
Net asset value of shares issued from
reinvestment of distributions
(120,031 and 32,975 shares, respectively) 1,757,836 472,566
Cost of shares repurchased (400,698 and 100,202
shares, respectively) (5,408,854) (1,484,452)
-------------- --------------
Total 1,580,124 11,416,399
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE
TRANSACTIONS (915,633) 18,515,147
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS (16,502,522) 28,295,938
NET ASSETS
Beginning of period 59,426,187 31,130,249
-------------- --------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME OF $563,936 AND $212,484,
RESPECTIVELY) $ 42,923,665 $ 59,426,187
-------------- --------------
-------------- --------------
</TABLE>
38 See Notes to Financial Statements
<PAGE>
Phoenix Real Estate Securities Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
-------------------------------------------- 3/1/95 TO
1998 1997 1996 11/30/95
----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.39 $ 13.14 $ 10.72 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.55(4)(5) 0.49(4)(5) 0.53(5) 0.43(4)(5)
Net realized and unrealized gain
(loss) (3.18) 3.52 2.50 0.55
---------- ----- ----- ----------
TOTAL FROM INVESTMENT
OPERATIONS (2.63) 4.01 3.03 0.98
---------- ----- ----- ----------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.44) (0.51) (0.59) (0.26)
Dividends from net realized gains (1.07) (0.25) (0.02) --
---------- ----- ----- ----------
TOTAL DISTRIBUTIONS (1.51) (0.76) (0.61) (0.26)
---------- ----- ----- ----------
Change in net asset value (4.14) 3.25 2.42 0.72
---------- ----- ----- ----------
NET ASSET VALUE, END OF PERIOD $ 12.25 $ 16.39 $ 13.14 $ 10.72
---------- ----- ----- ----------
---------- ----- ----- ----------
Total return(1) (17.42)% 31.44% 29.20% 9.87%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $24,686 $36,336 $22,872 $13,842
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.31% 1.30% 1.30% 1.30%(2)
Net investment income 3.79% 3.34% 4.55% 5.79%(2)
Portfolio turnover 11% 54% 24% 9%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
-------------------------------------------- 3/1/95 TO
1998 1997 1996 11/30/95
----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.32 $ 13.10 $ 10.68 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.43(4)(6) 0.38(4)(6) 0.46(6) 0.36(4)(6)
Net realized and unrealized gain
(loss) (3.15) 3.50 2.47 0.56
---------- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (2.72) 3.88 2.93 0.92
---------- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.34) (0.41) (0.49) (0.24)
Dividends from net realized gains (1.07) (0.25) (0.02) --
---------- ----- ----- -----
TOTAL DISTRIBUTIONS (1.41) (0.66) (0.51) (0.24)
---------- ----- ----- -----
Change in net asset value (4.13) 3.22 2.42 0.68
---------- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 12.19 $ 16.32 $ 13.10 $ 10.68
---------- ----- ----- -----
---------- ----- ----- -----
Total return(1) (18.01)% 30.44% 28.25% 9.21%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $18,237 $23,091 $8,259 $2.239
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.06% 2.05% 2.05% 2.05%(2)
Net investment income 3.07% 2.55% 3.95% 5.03%(2)
Portfolio turnover 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 expenses by investment adviser of
$0.02, $0.04, $0.07 and $0.12, respectively.
See Notes to Financial Statements
39
<PAGE>
PHOENIX EMERGING MARKETS BOND PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, PETER S. LANNIGAN, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix Emerging Markets Bond Portfolio seeks as its primary investment
objective high current income. The secondary objective is long-term capital
appreciation. The Fund invests in high-yield, high-risk debt securities issued
by governments and corporations in emerging markets. Debt securities issued by
foreign issuers entail greater risks of default, untimely interest and principal
payments, and price volatility than higher-rated securities and may present
problems of liquidation and valuation.
Q: HOW DID THE FUND PERFORM OVER THE LAST YEAR?
A: For the 12 months ended November 30, 1998, Class A shares returned (27.20)%
and Class B shares returned (27.86)% compared with a return of (9.13)% for the
J.P. Morgan Emerging Market Bond Index Plus(1). Since their inception on March
26, 1998, Class C shares returned (35.33)%, while the J.P. Morgan Emerging
Market Bond Index Plus was down (16.51)% since March 31, 1998.
Q: WHAT WERE SOME OF THE FACTORS THAT AFFECTED PERFORMANCE?
A: During this reporting period, emerging markets worldwide experienced declines
touched off by troubles in Southeast Asia that began last year. As has been
widely reported by the press, the continuing global financial crisis has forced
many foreign governments to devalue their currencies, and the devaluation of
Russia's currency had a negative impact on the Fund. Russia had very strong
results in the beginning of the year, but second-half results have been very
laggard. Although short-term performance has been disappointing, we believe the
long-term outlook will be positive once the global situation stabilizes.
Q: WHAT IS YOUR OUTLOOK FOR EMERGING MARKETS?
A: Despite recent weakness, our long-term outlook is constructive. It is
important at times like this to keep a long-term perspective as, we believe,
extreme market moves generally tend to reverse themselves over time. We have
seen a number of market events like this over the last decade; for example, the
"junk" bond panic of 1990-91 and the Mexican peso devaluation in 1994-95.
Although both of these events triggered dips in the market, long-term investors
were rewarded for their patience and conviction. Of course, past performance is
no guarantee of future performance, and there can be no assurance that there
will be a similar turnaround in emerging markets.
DECEMBER 22, 1998
(1) THE J.P. MORGAN EMERGING MARKET BOND INDEX PLUS (JP MORGAN EMBI+) 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.
40
<PAGE>
Phoenix Emerging Markets Bond Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR TO 11/30/98 DATE
<S> <C> <C> <C>
Class A Shares at NAV(2) (27.20)% 10.02% 09/05/95
Class A Shares at POP(3) (30.66) 8.38 09/05/95
Class B Shares at NAV(2) (27.86) 9.14 09/05/95
Class B Shares with CDSC(4) (30.01) 8.79 09/05/95
Class C Shares at NAV(2) -- (35.33) 03/26/98
Class C Shares with CDSC(4) -- (35.91) 03/26/98
JP Morgan EMBI+(7) (9.13) -- Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at
the time of purchase. CDSC charges for B shares decline from 5% to 0%
over a five year period. CDSC charges for Class C shares are 1% in the
first year and 0% thereafter.
(5) Index performance is 14.73% for Class A (since 9/5/95), 14.73% for
Class B (since 9/5/95) and (16.51%) for Class C (since 3/31/98),
respectively.
(6) This chart illustrates POP returns on Class A Shares and Class B Shares
for ten years or inception date if inception date is earlier. Returns on
Class B and C Shares will vary due to differing sales charges.
(7) The J.P. Morgan Emerging Market 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.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
Phoenix Emerging Phoenix Emerging
Markets Markets J.P. Morgan
Bond Class A(6) Bond Class B(6) EMBI+(7)
09/05/95 $9,523.81 $10,000.00 $10,000.00
11/30/95 $9,942.76 $10,422.48 $10,536.89
11/29/96 $15,926.31 $16,565.12 $15,531.11
11/28/97 $17,823.52 $18,399.67 $17,172.25
11/30/98 $12,975.32 $13,132.73 $15,604.64
This growth of $10,000 chart assumes an initial investment of $10,000 made on
9/5/95 in Class A and Class B shares and reflects the maximum sales charge of
4.75% on the initial investment for Class A. Performance assumes dividends
and capital gains are reinvested. The performance of other share classes will
be greater or less than that shown based on differences in inception dates,
fees and sales charges.
COUNTRY WEIGHTINGS 11/30/98
As a percentage of net assets
Brazil 25%
Argentina 23%
Mexico 22%
Russia 5%
Ecuador 3%
Indonesia 3%
Venezuela 3%
Other 16%
41
<PAGE>
Phoenix Emerging Markets Bond Portfolio
TEN LARGEST HOLDINGS AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. Republic of Argentina Bocon Pro1 M1 7.1%
FOREIGN GOVERNMENT SECURITY
2. Republic of Brazil NMB-L Bearer 6.7%
FOREIGN GOVERNMENT SECURITY
3. Brazil MYDFA Trust Certificate RegS 6.4%
FOREIGN GOVERNMENT SECURITY
4. Republic of Argentina RegS, 2/12/07 5.5%
FOREIGN GOVERNMENT SECURITY
5. Republic of Argentina RegS, 7/10/02 5.2%
FOREIGN GOVERNMENT SECURITY
6. APP Finance VII Mauritius, Ltd. 3.0%
FOREIGN CORPORATE BOND
7. Republic of Argentina Bocon Pre1 M1 2.8%
FOREIGN GOVERNMENT SECURITY
8. United Mexican States Global Bond, 5/15/26 2.7%
FOREIGN GOVERNMENT SECURITY
9. United Mexican States Global Bond, 9/15/16 2.7%
FOREIGN GOVERNMENT SECURITY
10. Algeria Tranch 1 Unaffected Loans 2.5%
FOREIGN GOVERNMENT SECURITY
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
FOREIGN GOVERNMENT SECURITIES--68.2%
ALGERIA--2.5%
Algeria Tranch 1 Unaffected Loans
7.188%, 3/4/00(b)....................... NR $ 2,300 $ 2,029,750
ARGENTINA--20.6%
Republic of Argentina Bocon Pre1 M1, PIK
interest capitalization, 2.909%,
4/1/01(b)............................... Ba 2,513(e) 2,226,587
Republic of Argentina Bocon Pro1 M1, PIK
interest capitalization, 2.909%,
4/1/07(b)............................... Ba 8,671(e) 5,669,526
Republic of Argentina RegS 8.75%,
7/10/02................................. Ba 5,010(e) 4,202,894
Republic of Argentina RegS 11.75%,
2/12/07................................. Ba 5,000(e) 4,394,541
-------------
16,493,548
-------------
BRAZIL--16.8%
Brazil MYDFA Trust Certificate RegS
6.25%, 9/15/07(b)....................... NR 7,790 5,180,556
Republic of Brazil C Bond, PIK interest
capitalization, 8%, 4/15/14(b).......... B 88 58,292
Republic of Brazil FLIRB Registered 5%,
4/15/09(b).............................. B 2,000 1,130,000
Republic of Brazil NMB-L Bearer 6.188%,
4/15/09(b).............................. B 8,250 5,419,219
Republic of Brazil NMB-L Registered
Series RG 6.188%, 4/15/09(b)............ B 2,500 1,642,187
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
BRAZIL--CONTINUED
Republic of Brazil Series EI-L 6.125%,
4/15/06(b).............................. B $ 96 $ 71,280
-------------
13,501,534
-------------
BULGARIA--2.2%
Republic of Bulgaria FLIRB RegA 2.50%,
7/28/12(b).............................. B 1,250 768,750
Republic of Bulgaria FLIRB Series A
Bearer Euro 2.50%, 7/28/12(b)........... B 1,615 993,225
-------------
1,761,975
-------------
ECUADOR--3.2%
Ecuador Bearer PDI Euro, PIK interest
capitalization, 6.625%, 2/17/15(b)...... B 3,123 1,546,061
Ecuador Global Bearer Series IE 6.563%,
12/21/04(b)............................. B 825 585,750
Ecuador Registered PDI Euro, PIK
interest capitalization, 6.625%,
2/27/15(b).............................. B 905 448,135
-------------
2,579,946
-------------
IVORY COAST--0.1%
Ivory Coast FLIRB Series FRF 2%,
3/29/18(b)(k)........................... NR 950(f) 49,416
Ivory Coast PDI Series FRF 1.90%,
12/29/49(b)(k).......................... NR 630(f) 33,882
-------------
83,298
-------------
</TABLE>
42 See Notes to Financial Statements
<PAGE>
Phoenix Emerging Markets Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
KOREA--2.5%
Korean Won Denominated Bond 0%,
4/26/99................................. NR $ 2,600(i) $ 2,004,671
MEXICO--6.8%
United Mexican States 6.63%,
12/31/19(j)............................. Ba 8,250(f) 1,152,862
United Mexican States Global Bond
11.375%, 9/15/16........................ Ba 2,000 2,135,000
United Mexican States Global Bond
11.50%, 5/15/26......................... Ba 2,050 2,198,625
-------------
5,486,487
-------------
MOROCCO--1.0%
Morocco Restructure & Consolidation
Agreement Series A 6.063%, 1/1/09(b).... NR 1,000 815,000
NIGERIA--1.6%
Nigeria Promissory Notes 5.092%,
1/5/10.................................. NR 1,841 1,241,927
PANAMA--0.8%
Republic of Panama 8.875%, 9/30/27...... Ba 700 663,250
PERU--0.7%
Peru FLIRB 3.25%, 3/7/17(b)............. BB(d) 1,000 567,500
POLAND--1.5%
Poland Treasury Bill 0%, 1/13/99........ NR 4,310(g) 1,217,093
RUSSIA--5.1%
Russia Federal Loan Bond Series 25022
15%, 2/23/00............................ NR 25,556(h) 592,843
Russia IAN Series U.S. 6.625%,
12/15/15................................ Ca 197 25,164
Russia Principal Loans, PIK interest
capitalization, 6.625%,
12/15/20(b)(l).......................... NR 250 17,188
Russia Treasury Bill OFZ 14%, 9/12/01... NR 52,885(h) 438,558
Russian Federated Government Bond 144A
11%, 7/24/18(c)......................... B 5,418 1,381,590
Russian Federated Government Bond RegS
11%, 7/24/18............................ B 6,500 1,657,500
-------------
4,112,843
-------------
VENEZUELA--2.8%
Republic of Venezuela DCB Series DL
6.625%, 12/18/07(b)..................... B 1,131 647,469
Republic of Venezuela FLIRB Series A
6.125%, 3/31/07(b)...................... B 1,619 890,472
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
VENEZUELA--CONTINUED
Republic of Venezuela FLIRB Series B
6.125%, 3/31/07(b)...................... B $ 1,214 $ 667,854
-------------
2,205,795
-------------
- --------------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $56,794,106) 54,764,617
- --------------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--29.0%
ARGENTINA--2.0%
Acindar Industria Argentina de Aceros SA
11.25%, 2/15/04 (Iron & Steel).......... B 1,000 855,000
Imasac 11%, 5/2/05 (Broadcasting
(Television, Radio & Cable))............ B 1,000 745,000
-------------
1,600,000
-------------
BRAZIL--8.6%
Globo Communicacoes Co. 144A 10.625%,
12/5/08 (Telecommunications (Long
Distance))(c)........................... B 1,100 825,000
Localiza Rent a Car 10.25%, 10/1/05
(Services (Commercial & Consumer))...... B 1,500 930,000
MRS. Logistica SA RegS Series A 9%,
8/15/05 (Transportation (Railroads)).... B(d) 2,000 1,515,400
MRS. Logistica SA RegS Series B 10.625%,
8/15/05 (Transportation (Railroads)).... B(d) 1,500 818,400
Petroleo Ipirang 10.625%, 2/25/02 (Oil &
Gas)(b)................................. NR 1,000 905,000
Tevecap SA Senior Notes 12.625%,
11/26/04 (Broadcasting (Television,
Radio & Cable))......................... B 1,600 1,080,000
TV Bandeirantes 144A 12.875%, 5/15/06
(Publishing (Newspapers))(c)............ B 1,500 825,000
-------------
6,898,800
-------------
INDONESIA--3.0%
APP Finance II Mauritius, Ltd. 0%,
12/29/49(b)............................. Caa 3,890 2,372,900
JAMAICA--1.4%
Mechala Group Jamaica Series B 12.75%,
12/30/99 (Engineering & Construction)... NR 1,500 1,132,500
</TABLE>
See Notes to Financial Statements 43
<PAGE>
Phoenix Emerging Markets Bond Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
MEXICO--13.1%
Azteca Holdings SA 11%, 6/15/02
(Broadcasting (Television, Radio &
Cable))................................. B $ 1,000 $ 890,000
Bufete Industrial RegS Series B-22
11.375%, 7/15/99 (Engineering &
Construction)........................... B 500 407,500
Corporacion Geo SA de C.V. RegS Series 1
10%, 5/23/02
(Homebuilding).......................... NR 610 527,650
Dine SA de C.V. RegS 8.75%, 10/15/07
(Diversified)........................... Ba 745 666,775
Grupo Elektra SA de C.V. 12.75%, 5/15/01
(Banks (Major Regional))................ B(d) 1,000 955,000
Grupo Industrial Durango 12%, 7/15/01
(Paper & Forest Products)............... B 800 756,000
Grupo Industrial Durango 12.625%, 8/1/03
(Paper & Forest Products)............... B 2,000 1,850,000
Innova S de R.L. Sr. Notes 12.875%,
4/1/07 (Broadcasting (Television, Radio
& Cable))............................... B 1,000 795,000
Sanluis Corp SA de C.V. 8.875%, 3/18/08
(Auto Parts & Equipment)................ NR 1,000 825,000
Transporte Maritma Yankee Senior Notes
10%, 11/15/06 (Services (Commercial &
Consumer)).............................. Ba 1,000 860,000
Vicap SA 11.375%, 5/15/07 (Banks (Money
Center))................................ Ba 2,100 1,953,000
-------------
10,485,925
-------------
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ----------- -------------
<S> <C> <C> <C>
NETHERLANDS--0.9%
TJIWI Kim-Global 13.25%, 8/1/01 (Paper &
Forest Products)........................ Caa $ 1,000 $ 735,000
RUSSIA--0.0%
Unexim International Finance RegS
9.875%, 8/1/00 (Banks (Money Center))... Ca 200 15,000
- --------------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $23,651,955) 23,240,125
- --------------------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--0.3%
CANADA--0.3%
PLD Telekom Cv. 144A 9%, 6/1/06
(Telephone)(c).......................... NR 600 225,000
- --------------------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $750,000) 225,000
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL LONG-TERM INVESTMENTS--97.5%
(IDENTIFIED COST $81,196,061) 78,229,742
-------------
TOTAL INVESTMENTS--97.5%
(IDENTIFIED COST $81,196,061) 78,229,742(a)
Cash and receivables, less liabilities--2.5% 1,969,430
-------------
NET ASSETS--100.0% $ 80,199,172
-------------
-------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $5,913,750 and gross
depreciation of $12,201,280 for federal income tax purposes. At November
30, 1998, the aggregate cost of securities for federal income tax purposes
was $84,517,272.
(b) Variable or step coupon security; interest rate reflects the rate currently
in effect.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1998, these securities amounted to a value of $3,256,590 or 4.1% of net
assets.
(d) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(e) Par value represents Argentine Pesos.
(f) Par value represents French Francs.
(g) Par value represents Polish Zloty.
(h) Par value represents Russian Rubles.
(i) Par value represents South Korean Won rounded in millions.
(j) Rights incorporated as a unit.
(k) Non-income producing.
(l) Security defaulted subsequent to November 30, 1998.
44 See Notes to Financial Statements
<PAGE>
Phoenix Emerging Markets Bond Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $81,196,061) $ 78,229,742
Cash 1,094,350
Receivables
Investment securities sold 3,140,067
Interest 2,173,419
Fund shares sold 1,455,780
--------------
Total assets 86,093,358
--------------
LIABILITIES
Payables
Investment securities purchased 5,394,296
Fund shares repurchased 323,944
Investment advisory fee 46,730
Distribution fee 37,647
Transfer agent fee 9,441
Financial agent fee 7,090
Trustees' fee 5,515
Accrued expenses 69,523
--------------
Total liabilities 5,894,186
--------------
NET ASSETS $ 80,199,172
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 131,968,368
Distributions in excess of net investment income (50,697)
Accumulated net realized loss (48,714,714)
Net unrealized depreciation (3,003,785)
--------------
NET ASSETS $ 80,199,172
--------------
--------------
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $41,724,985) 5,795,710
Net asset value per share $7.20
Offering price per share $7.20/(1-4.75%) $7.56
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $37,269,642) 5,223,771
Net asset value and offering price per share $7.13
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,204,545) 168,054
Net asset value and offering price per share $7.17
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 15,021,162
Foreign taxes withheld (228,185)
--------------
Total investment income 14,792,977
--------------
EXPENSE
Investment advisory fee 730,717
Distribution fee, Class A 142,226
Distribution fee, Class B 400,847
Distribution fee, Class C 4,491
Financial agent fee 94,013
Transfer agent 155,061
Custodian 69,768
Professional 35,321
Registration 35,213
Printing 17,591
Trustees 17,063
Miscellaneous 2,434
--------------
Total expenses 1,704,745
--------------
NET INVESTMENT INCOME 13,088,232
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (39,143,275)
Net realized loss on foreign currency transactions (4,055,155)
Net realized gain on written options 49,783
Net change in unrealized appreciation (depreciation)
on investments 1,606,800
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (37,466)
--------------
NET LOSS ON INVESTMENTS (41,579,313)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (28,491,081)
--------------
--------------
</TABLE>
See Notes to Financial Statements 45
<PAGE>
Phoenix Emerging Markets Bond Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/98 11/30/97
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 13,088,232 $ 7,435,613
Net realized gain (loss) (43,148,647) 1,466,964
Net change in unrealized appreciation
(depreciation) 1,569,334 (7,091,439)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (28,491,081) 1,811,138
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (5,581,936) (4,916,690)
Net investment income, Class B (3,942,930) (2,280,551)
Net investment income, Class C (54,521) --
Net realized gains, Class A (1,201,906) (4,477,700)
Net realized gains, Class B (697,910) (1,490,259)
Net realized gains, Class C -- --
In excess of net realized gains, Class A (6,002,330) --
In excess of net realized gains, Class B (3,485,367) --
In excess of net realized gains, Class C -- --
Tax return of capital, Class A (1,984,297) --
Tax return of capital, Class B (1,343,438) --
Tax return of capital, Class C (14,524) --
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS (24,309,159) (13,165,200)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,907,456 and
4,047,705 shares, respectively) 27,208,118 56,372,468
Net asset value of shares issued from
reinvestment of distributions
(1,029,832 and 636,006 shares, respectively) 10,935,153 8,387,234
Cost of shares repurchased (3,428,413 and
1,401,387 shares, respectively) (34,342,515) (19,377,800)
-------------- --------------
Total 3,800,756 45,381,902
-------------- --------------
CLASS B
Proceeds from sales of shares (3,220,244 and
2,934,383 shares, respectively) 30,065,148 41,013,074
Net asset value of shares issued from
reinvestment of distributions
(492,109 and 163,679 shares, respectively) 4,864,295 2,172,877
Cost of shares repurchased (1,516,158 and
727,786 shares, respectively) (13,762,067) (10,039,719)
-------------- --------------
Total 21,167,376 33,146,232
-------------- --------------
CLASS C
Proceeds from sales of shares (170,364 and 0
shares, respectively) 1,509,747 --
Net asset value of shares issued from
reinvestment of distributions
(2,515 and 0 shares, respectively) 19,878 --
Cost of shares repurchased (4,825 and 0 shares,
respectively) (46,423) --
-------------- --------------
Total 1,483,202 --
-------------- --------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 26,451,334 78,528,134
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS (26,348,906) 67,174,072
NET ASSETS
Beginning of period 106,548,078 39,374,006
-------------- --------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS
OF NET INVESTMENT INCOME AND UNDISTRIBUTED NET
INVESTMENT INCOME OF $(50,697) AND $362,088,
RESPECTIVELY) $ 80,199,172 $ 106,548,078
-------------- --------------
-------------- --------------
</TABLE>
46 See Notes to Financial Statements
<PAGE>
Phoenix Emerging Markets Bond Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
---------------------------------------- 9/5/95 TO
1998 1997 1996 11/30/95
----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.84 $ 14.80 $ 10.18 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.32 1.38(4) 1.26(5) 0.25(4)(5)
Net realized and unrealized gain
(loss) (4.22) 0.17 4.56 0.18
----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (2.90) 1.55 5.82 0.43
----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (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 (2.74) (3.51) (1.20) (0.25)
----- ----- ----- -----
Change in net asset value (5.64) (1.96) 4.62 0.18
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 7.20 $ 12.84 $ 14.80 $ 10.18
----- ----- ----- -----
----- ----- ----- -----
Total return(1) (27.20)% 11.91% 60.18% 4.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $41,725 $67,875 $29,661 $12,149
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.43% 1.40%(7) 1.50% 1.50%(2)
Net investment income 13.74% 9.90% 10.41% 10.48%(2)
Portfolio turnover 405% 614% 378% 38%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
---------------------------------------- 9/5/95 TO
1998 1997 1996 11/30/95
----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.77 $ 14.78 $ 10.18 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 1.23 1.26(4) 1.19(6) 0.22(4)(6)
Net realized and unrealized gain
(loss) (4.18) 0.18 4.53 0.20
----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (2.95) 1.44 5.72 0.42
----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (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 (2.69) (3.45) (1.12) (0.24)
----- ----- ----- -----
Change in net asset value (5.64) (2.01) 4.60 0.18
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 7.13 $ 12.77 $ 14.78 $ 10.18
----- ----- ----- -----
----- ----- ----- -----
Total return(1) (27.86)% 11.07% 58.94% 4.22%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $37,270 $38,673 $9,713 $596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.20% 2.15%(7) 2.25% 2.25%(2)
Net investment income 12.98% 9.14% 9.79% 10.29%(2)
Portfolio turnover 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) Includes reimbursement of operating expenses by investment adviser of $0.07
and $0.03, respectively.
(7) For the year ended November 30, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees. Prior period ratios include these amounts.
See Notes to Financial Statements 47
<PAGE>
Phoenix Emerging Markets Bond Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C
----------
FROM
INCEPTION
3/26/98 TO
11/30/98
----------
<S> <C>
Net asset value, beginning of period $ 12.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.85(4)
Net realized and unrealized gain
(loss) (5.10)
-----
TOTAL FROM INVESTMENT OPERATIONS (4.25)
-----
LESS DISTRIBUTIONS
Dividends from net investment income (0.66)
Dividends from net realized gains --
Distributions in excess of net
realized gains --
Return of capital (0.17)
-----
TOTAL DISTRIBUTIONS (0.83)
-----
Change in net asset value (5.08)
-----
NET ASSET VALUE, END OF PERIOD $ 7.17
-----
-----
Total return(1) (35.33)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,205
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.29%(2)
Net investment income 15.59%(2)
Portfolio turnover 405%(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.
48 See Notes to Financial Statements
<PAGE>
PHOENIX STRATEGIC INCOME PORTFOLIO
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, DAVID L. ALBRYCHT, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Fund seeks to maximize current income by investing in debt securities.
Capital appreciation is a secondary objective. Investors should note that the
Fund may invest in foreign investments, which pose added risks, such as currency
fluctuation, less public disclosure, and political and economic uncertainty, and
high-yield securities, which are generally subject to greater market
fluctuations and risk of loss of income and principal than are investments in
lower-yielding fixed-income securities.
Q: HOW HAS THE FUND PERFORMED?
A: Since their inception on March 27, 1998, Class A shares returned (12.89)%,
and Class B and Class C shares returned (13.25)% and (13.15)%, respectively
compared with a return of 6.83% for the Fund's benchmark, the Lehman Brothers
Aggregate Bond Index.(1) For the 12 months ending November 30, 1998, Class X
shares returned (8.63)% compared with a return of 9.45% for the benchmark. All
performance figures assume reinvestment of distributions and exclude the effect
of sales charges.
Q: WHAT FACTORS AFFECTED PERFORMANCE?
A: The disappointing performance was due to our exposure to more
credit-sensitive sectors of the bond market. During 1998, the world financial
markets have been experiencing a global "flight to quality" that has been driven
by the financial crises in Asia and Russia. U.S. Treasuries have been the sole
benefactor, while the biggest losers have been higher-yielding sectors, such as
emerging-markets and domestic high-yield, two of our largest portfolio
positions.
Q: WHAT IS YOUR CURRENT STRATEGY?
A: The two biggest risks in fixed income investing are interest rate risk and
credit risk. Our investment approach does not try to anticipate the direction of
interest rates. Instead, we seek to add value by identifying undervalued sectors
of the bond market. This contrarian approach is one that requires discipline and
conviction, but has served us well in the past. Of course, past performance is
no guarantee of future results.
We will continue to follow our value-oriented investment approach,
overweighting those sectors where we find the best values. Despite recent
weakness, our long-term outlook remains constructive. We feel the market has
overreacted to global events, resulting in extraordinary values for long-term
investors. We will continue to maintain a well-diversified portfolio (investing
across 12 market sectors), with exposure to more credit-sensitive sectors, which
we perceive to be considerably undervalued.
Q: WHAT IS YOUR OUTLOOK?
A: It is important at times like this to keep a long-term perspective as extreme
market moves like the one we are currently experiencing generally reverse
themselves over time. We have seen a number of market events like this over the
last decade. Two that most resemble the current situation were the "junk" bond
panic of 1990-91 and the Mexican peso devaluation in 1994-95. Although both of
these events triggered dips in the market, long-term investors were rewarded for
their patience and conviction. Of course, past performance is no guarantee of
future performance, and there can be no assurance that there will be a similar
turnaround in emerging markets.
DECEMBER 15, 1998
(1) THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF BROAD BOND MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
49
<PAGE>
Phoenix Strategic Income Portfolio
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 11/30/98
<TABLE>
<CAPTION>
INCEPTION INCEPTION
1 YEAR 5 YEAR TO 11/30/98 DATE
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) -- -- (12.89)% 03/27/98
Class A Shares at POP(3) -- -- (17.05) 03/27/98
Class B Shares at NAV(2) -- -- (13.25) 03/27/98
Class B Shares with CDSC(4) -- -- (17.13) 03/27/98
Class C Shares at NAV(2) -- -- (13.15) 03/27/98
Class C Shares with CDSC(4) -- -- (13.95) 03/27/98
Class X Shares at NAV(2) (8.63)% 4.81% 5.19 04/01/93
Lehman Brothers Aggregate Bond Index(7) 9.45 7.33 -- Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at
the time of purchase. CDSC charges for B shares decline from 5% to 0%
over a five year period. CDSC charges for C shares are 1% in the first
year and 0% thereafter.
(5) Index performance is 6.83% for Class A, B and C Shares (since 3/27/98)
and 7.32% for Class X (since 4/1/93), respectively.
(6) This chart illustrates NAV returns on Class X Shares for ten years or at
inception date whichever is less. Returns on Class A, Class B and C Shares
will vary due to differing sales charges.
(7) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total return performance. The index is not
available for direct investment.
All returns represent past performance which may not be indicative
of future performance. The investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 11/30
Phoenix Strategic Lehman Brothers
Income Aggregate
Portfolio Class X(6) Bond Index(7)
4/1/93 $10,000.00 $10,000.00
11/30/93 $10,534.83 $10,482.46
11/30/94 $9,981.20 $10,161.68
11/30/95 $11,642.98 $11,954.86
11/30/96 $13,426.91 $12,680.66
11/30/97 $14,579.49 $13,638.04
11/30/98 $13,321.98 $14,927.24
This growth of $10,000 chart assumes an initial investment of $10,000
made on 4/1/93 in Class X shares . Performance assumes dividends and
capital gains are reinvested. The performance of other share classes
will be greater or less than that shown based on differences in inception
dates, fees and sales charges.
SECTOR WEIGHTINGS 11/30
As a percentage of net assets
Corporate 33%
Foreign Government 30%
Non-Agency Mortgage 20%
Foreign Corporate 12%
Municipal Bonds 5%
50
<PAGE>
Phoenix Strategic Income Portfolio
TEN LARGEST HOLDINGS AT NOVEMBER 30, 1998 (AS A PERCENTAGE OF TOTAL NET ASSETS)
<TABLE>
<C> <S> <C>
1. United Mexican States Global Bond, 5/15/26 4.3%
FOREIGN GOVERNMENT SECURITY
2. Republic of Brazil C Bond 3.8%
FOREIGN GOVERNMENT SECURITY
3. GE Mortgage Services, Inc. 3.6%
NON-AGENCY MORTGAGE-BACKED SECURITY
4. Republic of Argentina RegS 3.6%
FOREIGN GOVERNMENT SECURITY
5. Republic of Argentina Series WW 3.4%
FOREIGN GOVERNMENT SECURITY
6. ContiMortgage Home Equity Loan Trust 3.2%
NON-AGENCY MORTGAGE-BACKED SECURITY
7. Republic of Bulgaria IAB Series PDI Euro 3.0%
FOREIGN GOVERNMENT SECURITY
8. Dupont (E.I.) de Nemours & Co. 2.8%
COMMERCIAL PAPER
9. Poland Treasury Bill 2.7%
FOREIGN GOVERNMENT SECURITY
10. Teligent, Inc. Sr. Notes 2.6%
CORPORATE BOND
</TABLE>
INVESTMENTS AT NOVEMBER 30, 1998
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
MUNICIPAL BONDS--4.9%
FLORIDA--0.8%
University of Miami Exchangeable Revenue
Bond Series A Taxable 7.65%,
4/1/20(c)............................... Aaa $ 45 $ 48,769
ILLINOIS--2.3%
Illinois Educational Facilities
Authority Revenue Bond--Loyola
University Series A Taxable 7.84%,
7/1/24.................................. Aaa 125 140,625
PENNSYLVANIA--1.8%
Pennsylvania Economic Development
Financing Authority Recycling Revenue
Bond Series B 9.25%, 1/1/12(e)(h)....... NR 200 114,000
- ------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $378,170) 303,394
- ------------------------------------------------------------------------------
CORPORATE BONDS--32.3%
COMPUTERS (SOFTWARE & SERVICES)--1.6%
PSINET, Inc. Series B 10%, 2/15/05...... B 100 101,000
COSMETICS/PERSONAL CARE--2.2%
Revlon Consumer Products Sr. Notes
8.625%, 2/1/08.......................... B 75 74,250
Revlon Consumer Products Sr. Notes 144A
9%, 11/1/06(b).......................... B 60 62,175
-----------
136,425
-----------
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
GAMING, LOTTERY & PARIMUTUEL COMPANIES--1.1%
Mashantucket Pequot Tribe Revenue Bond
Series A 144A 6.57%, 9/1/13(b).......... Aaa $ 70 $ 70,525
HEALTH CARE (DIVERSIFIED)--3.7%
Bally Total Fitness Holding Corp. Sr.
Notes Series B, 9.875%, 10/15/07........ B 150 148,875
Global Health Sciences Series 11%,
5/1/08.................................. Caa 100 80,000
-----------
228,875
-----------
HEALTH CARE (DRUGS--MAJOR PHARMACEUTICALS)--1.2%
Schein Pharmaceutical, Inc. 8.467%,
12/15/04(c)............................. B 85 74,800
MANUFACTURING (SPECIALIZED)--3.2%
Indesco International, Inc. Sr. Notes
9.75%, 4/15/08.......................... B 100 94,000
Nortek, Inc. Sr. Notes 9.875%, 3/1/04... B 100 103,750
-----------
197,750
-----------
METALS MINING--0.8%
NSM Steel, Inc. 144A 12%, 2/1/06(b)..... Caa 200 50,000
OFFICE EQUIPMENT & SUPPLIES--1.2%
U.S. Office Products Co. Sr. Notes 144A
9.75%, 6/15/08(b)....................... B 100 74,000
OIL & GAS (EXPLORATION & PRODUCTION)--3.6%
Forcenergy, Inc. Sr. Notes Series B
8.50%, 2/15/07.......................... B 175 149,625
</TABLE>
See Notes to Financial Statements 51
<PAGE>
Phoenix Strategic Income Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
OIL & GAS (EXPLORATION & PRODUCTION)--CONTINUED
Lomak Petroleum, Inc. 8.75%, 1/15/07.... B $ 75 $ 71,250
-----------
220,875
-----------
PAPER & FOREST PRODUCTS--1.6%
Buckeye Technologies, Inc. Sr. Notes 8%,
10/15/10................................ Ba 100 99,500
SERVICES (COMMERCIAL & CONSUMER)--1.6%
Anthony Crane Rentals Sr. Notes 144A
10.375%, 8/1/08(b)...................... B 100 97,250
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--6.5%
Comcast Cellular Holdings, Inc. Sr.
Notes Series B 9.50%, 5/1/07............ Ba 100 107,750
Pathnet, Inc. Sr. Notes 12.25%,
4/15/08................................. NR 175 133,000
Teligent, Inc. Sr. Notes 11.50%,
12/1/07................................. Caa 170 163,200
-----------
403,950
-----------
TELECOMMUNICATIONS (LONG DISTANCE)--2.5%
RCN Corp. Sr. Notes Series B, 0%,
2/15/08(c).............................. B 275 151,250
TELEPHONE--1.5%
FirstCom Corp. Sr. Notes 144A 14%,
10/27/07(b)............................. NR 170 90,525
- ------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $2,361,055) 1,996,725
- ------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--19.6%
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. Baa 200 197,812
DLJ Mortgage Acceptance Corp. 144A
97-CF2, B2 7.14%, 11/15/08(b)........... Baa 100 91,000
First Chicago/Lennar Trust 97-CHL1, E
144A 8.129%, 2/28/11(b)................. B(d) 175 133,547
GE Capital Mortgage Services, Inc. 96-8,
2A5 7.50%, 5/25/26...................... AAA(d) 219 223,225
Norwest Asset Securities Corp. 96-3, B2
7.25%, 9/25/26.......................... BBB(d) 147 144,183
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23................................. AA(d) $ 119 $ 118,956
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24(j).................... BBB(d) 150 150,187
Structured Asset Securities Corp. 95-C4,
D 7%, 6/25/26(j)........................ BBB(d) 150 149,344
- ------------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $1,225,121) 1,208,254
- ------------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--29.2%
ARGENTINA--6.9%
Republic of Argentina RegS 11.75%,
2/12/07................................. Ba 250(f) 219,727
Republic of Argentina Series WW 11%,
12/4/05................................. Ba 200 209,500
-----------
429,227
-----------
BRAZIL--3.8%
Republic of Brazil C Bond, PIK interest
capitalization, 8%, 4/15/14(c).......... B 353 233,168
BULGARIA--3.5%
Republic of Bulgaria FLIRB Series A
Bearer Euro 2.50%, 7/28/12(c)........... B 50 30,750
Republic of Bulgaria IAB Series PDI Euro
6.688%, 7/28/11(c)...................... B 250 183,437
-----------
214,187
-----------
ECUADOR--2.5%
Ecuador Bearer PDI Euro, PIK interest
capitalization, 6.625%, 2/17/15(c)...... B 311 154,047
KOREA--1.6%
Republic of Korea 8.75%, 4/15/03........ Ba 100 100,438
MEXICO--5.6%
United Mexican States Global Bond
11.375%, 9/15/16........................ Ba 80 85,400
United Mexican States Global Bond
11.50%, 5/15/26......................... Ba 245 262,763
-----------
348,163
-----------
</TABLE>
52 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Income Portfolio
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
PERU--1.3%
Peru PDI 4%, 3/7/17(c).................. BB(d) $ 125 $ 78,750
POLAND--3.1%
Poland Bearer PDI 5%, 10/27/14(c)....... Baa 25 23,453
Poland Treasury Bill 0%, 1/13/99........ NR 600(g) 167,130
-----------
190,583
-----------
RUSSIA--0.9%
Russia IAN Series U.S. 6.625%,
12/2/15(c).............................. Ca 259 32,993
Russia Principal Loans, PIK interest
capitalization, 6.625%, 12/15/15(i)..... NR 350 24,063
-----------
57,056
-----------
- ------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $2,283,216) 1,805,619
- ------------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--11.7%
BERMUDA--1.1%
AES China Generating Co. Yankee 10.125%,
12/15/06................................ Ba(d) 100 68,000
CANADA--0.5%
Metronet Communications Corp. Sr. Notes
0%, 6/15/08(c).......................... B 50 31,500
INDONESIA--1.0%
APP Finance VII Mauritius, Ltd. 12%,
12/29/49(c)............................. Caa 100 61,000
JAPAN--2.4%
SB Treasury Co. LLC Series A 144A 9.4%,
12/29/49(b)(c).......................... Baa 150 148,777
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
<S> <C> <C> <C>
MEXICO--1.3%
Innova S de R.L. Sr. Notes 12.875%,
4/1/07.................................. B $ 100 $ 79,500
NETHERLANDS--3.3%
Kazkommertsbank International 144A
11.25%, 5/8/01(b)....................... B 100 51,000
Netia Holdings BV Yankee Series B, 0%,
11/1/07(e).............................. B 250 156,250
-----------
207,250
-----------
UNITED KINGDOM--2.1%
RSL Communications PLC Yankee 0%,
3/1/08(c)............................... B 225 127,687
- ------------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $890,763) 723,714
- ------------------------------------------------------------------------------
<CAPTION>
SHARES
-------
<S> <C> <C> <C>
WARRANTS--0.2%
SERVICES (DATA PROCESSING)--0.2%
FirstCom, Corp. 144A Warrants(b)(e)..... NR 5,950 8,925
TELEPHONE--0.0%
Pathnet, Inc. 144A Warrants(b)(e)....... NR 175 175
- ------------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 9,100
- ------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.9%
(IDENTIFIED COST $7,138,325) 6,046,806
- ------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 53
<PAGE>
Phoenix Strategic Income Portfolio
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- -----------
SHORT-TERM OBLIGATIONS--2.8%
<S> <C> <C> <C>
COMMERCIAL PAPER--2.8%
Dupont (E.I.) de Nemours & Co. 4.91%,
12/7/98................................. A-1+ $ 175 $ 174,857
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $174,857) 174,857
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--100.7%
(IDENTIFIED COST $7,313,182) 6,221,663(a)
Cash and receivables, less liabilities--(0.7%) (45,991)
------------
NET ASSETS--100.0% $ 6,175,672
------------
------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $129,122 and gross
depreciation of $1,243,108 for federal income tax purposes. At November 30,
1998, the aggregate cost of securities for federal income tax purposes was
$7,335,649.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
1998, these securities amounted to a value of $877,899 or 14.2% of net
assets.
(c) Variable or step coupon security; the interest rate shown reflects the rate
currently in effect.
(d) As rated by Standard & Poor's, Fitch, or Duff & Phelps.
(e) Non-income producing
(f) Par value represents Argentine Pesos.
(g) Par value represents Polish Zloty.
(h) Security in default.
(i) Security defaulted subsequent to November 30, 1998.
(j) All or a portion segregated as collateral.
54 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Income Portfolio
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $7,313,182) $ 6,221,663
Cash 56,387
Receivables
Investments securities sold 61,134
Interest 135,762
Receivable from advisor 40,123
--------------
Total assets 6,515,069
--------------
LIABILITIES
Payables
Investment securities purchased 262,430
Transfer agent fee 17,104
Trustees' fee 5,515
Financial agent fee 2,710
Distribution fee 329
Accrued expenses 51,309
--------------
Total liabilities 339,397
--------------
NET ASSETS $ 6,175,672
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 7,421,422
Undistributed net investment income 23,078
Accumulated net realized loss (177,309)
Net unrealized depreciation (1,091,519)
--------------
NET ASSETS $ 6,175,672
--------------
--------------
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,652,819) 705,966
Net asset value and offering price per share $8.01
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $182,530) 22,833
Net asset value per share $7.99
Offering price per share $7.99/(1-4.75%) $8.39
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $223,804) 28,030
Net asset value and offering price per share $7.98
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $116,519) 14,591
Net asset value and offering price per share $7.99
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 628,142
Dividends 9,183
--------------
Total investment income 637,325
--------------
EXPENSES
Investment advisory fee 35,019
Distribution fee, Class A 416
Distribution fee, Class B 1,468
Distribution fee, Class C 759
Financial agent 57,015
Transfer agent 47,732
Registration 34,649
Professional 22,398
Printing 15,781
Trustees 14,032
Custodian 7,813
Miscellaneous 1,794
--------------
Total expenses 238,876
Less expenses borne by the advisor (185,168)
--------------
Net expenses 53,708
--------------
NET INVESTMENT INCOME 583,617
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (159,654)
Net realized loss on foreign currency transactions (923)
Net change in unrealized appreciation (depreciation) on
investments (1,069,496)
--------------
NET LOSS ON INVESTMENTS (1,230,073)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (646,456)
--------------
--------------
</TABLE>
See Notes to Financial Statements 55
<PAGE>
Phoenix Strategic Income Portfolio
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 583,617 $ 466,575
Net realized gain (loss) (160,577) 251,177
Net change in unrealized appreciation
(depreciation) (1,069,496) (194,058)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (646,456) 523,694
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (555,887) (459,335)
Net investment income, Class A (14,411) --
Net investment income, Class B (13,521) --
Net investment income, Class C (6,781) --
Net realized gains, Class X (241,425) (72,586)
Net realized gains, Class A -- --
Net realized gains, Class B -- --
Net realized gains, Class C -- --
-------------- --------------
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS (832,025) (541,921)
-------------- --------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (0 and 27,068
shares, respectively) -- 263,374
Net asset value of shares issued from
reinvestment of distributions
(87,775 and 54,582 shares, respectively) 797,305 541,924
Cost of shares repurchased (30,675 and 27,376
shares, respectively) (300,006) (273,623)
-------------- --------------
Total 497,299 531,675
-------------- --------------
CLASS A
Proceeds from sales of shares (52,172 and 0
shares, respectively) 490,240 --
Net asset value of shares issued from
reinvestment of distributions
(1,541 and 0 shares, respectively) 13,240 --
Cost of shares repurchased (30,880 and 0 shares,
respectively) (234,729) --
-------------- --------------
Total 268,751 0
-------------- --------------
CLASS B
Proceeds from sales of shares (38,952 and 0
shares, respectively) 370,835 --
Net asset value of shares issued from
reinvestment of distributions
(863 and 0 shares, respectively) 7,274 --
Cost of shares repurchased (11,785 and 0 shares,
respectively) (107,605) --
-------------- --------------
Total 270,504 0
-------------- --------------
CLASS C
Proceeds from sales of shares (24,153 and 0
shares, respectively) 209,622 --
Net asset value of shares issued from
reinvestment of distributions
(807 and 0 shares, respectively) 6,779 --
Cost of shares repurchased (10,369 and 0 shares,
respectively) (78,932) --
-------------- --------------
Total 137,469 0
-------------- --------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 1,174,023 531,675
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS (304,458) 513,448
NET ASSETS
Beginning of period 6,480,130 5,966,682
-------------- --------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET
INVESTMENT INCOME OF $23,078 AND $14,837,
RESPECTIVELY) $ 6,175,672 $ 6,480,130
-------------- --------------
-------------- --------------
</TABLE>
56 See Notes to Financial Statements
<PAGE>
Phoenix Strategic Income Portfolio
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS X
----------------------------------------------------------------------
YEAR ENDED NOVEMBER 30
----------------------------------------------------------------------
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.99 $ 10.03 $ 9.45 $ 8.97 $ 10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.83(2) 0.74(2)(8) 0.78(2) 0.91(2) 0.63(2)
Net realized and unrealized gain
(loss) (1.62) 0.09 0.59 0.51 (1.13)
----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (0.79) 0.83 1.37 1.42 (0.50)
----- ----- ----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.82) (0.75) (0.79) (0.94) (0.59)
Dividends from net realized gains (0.37) (0.12) -- -- (0.06)
----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (1.19) (0.87) (0.79) (0.94) (0.65)
----- ----- ----- ----- -----
Change in net asset value (1.98) (0.04) 0.58 0.48 (1.15)
----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 8.01 $ 9.99 $ 10.03 $ 9.45 $ 8.97
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Total return(1) (8.63)% 8.58% 15.32% 16.65% (5.26)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $5,653 $6,480 $5,967 $5,170 $1,780
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 0.72%(6) 0.65% 0.65% 0.65% 0.65%
Net investment income 8.92%(6) 7.45% 8.11% 7.60% 6.64%
Portfolio turnover 138% 194% 231% 618% 124%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
---------- ---------- ----------
FROM FROM FROM
INCEPTION INCEPTION INCEPTION
3/27/98 TO 3/27/98 TO 3/27/98 TO
11/30/98 11/30/98 11/30/98
---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.78 $ 9.78 $ 9.78
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.55(3)(8) 0.50(4)(8) 0.50(5)(8)
Net realized and unrealized gain
(loss) (1.79) (1.77) (1.76)
----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS (1.24) (1.27) (1.26)
----- ----- -----
LESS DISTRIBUTIONS
Dividends from net investment
income (0.55) (0.53) (0.53)
Dividends from net realized gains -- -- --
----- ----- -----
TOTAL DISTRIBUTIONS (0.55) (0.53) (0.53)
----- ----- -----
Change in net asset value (1.79) (1.80) (1.79)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $ 7.99 $ 7.98 $ 7.99
----- ----- -----
----- ----- -----
Total return(1) (12.89)%(7) (13.25)%(7) (13.15)%(7)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $183 $224 $117
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.00%(6) 1.75%(6) 1.75%(6)
Net investment income 8.79%(6) 8.37%(6) 8.47%(6)
Portfolio turnover 138%(7) 138%(7) 138%(7)
</TABLE>
(1) Maximum sales charges are not included in total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.26, $0.22, $0.15, $0.40, $0.34 and $0.35, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of
$0.20.
(4) Includes reimbursement of operating expenses by investment adviser of
$0.20.
(5) Includes reimbursement of operating expenses by investment adviser of
$0.20.
(6) Annualized.
(7) Not annualized.
(8) Computed using average shares outstanding.
See Notes to Financial Statements 57
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The Phoenix Multi-Portfolio Fund ("the Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. To date, six
Portfolios are offered for sale: Tax-Exempt Bond Portfolio, Mid Cap Portfolio,
International Portfolio, Real Estate Securities Portfolio, Emerging Markets Bond
Portfolio, and Strategic Income Portfolio (formerly the Diversified Income
Portfolio.) Each Portfolio has distinct investment objectives. The Tax-Exempt
Bond Portfolio seeks as high a level of current income exempt from federal
income taxation as is consistent with preservation of capital. The Mid Cap
Portfolio seeks as its investment objective long-term appreciation of capital.
The International Portfolio seeks a high total return consistent with reasonable
risk through investment in an internationally diversified portfolio of equity
securities. The Real Estate Securities Portfolio seeks capital appreciation and
income with approximately equal emphasis. The Emerging Markets Bond Portfolio
seeks to achieve high current income with a secondary objective of long-term
capital appreciation. The Strategic Income Portfolio seeks to maximize current
income by investing in debt securities, with a secondary objective of capital
appreciation.
The Trust offers both Class A and Class B shares on each Portfolio and one
additional class of shares Class C on Emerging Markets Bond Portfolio and Class
C and Class X on the Strategic Income Portfolio. Class A shares are sold with a
front-end sales charge of up to 4.75%. Class B shares are sold with a contingent
deferred sales charge which declines from 5% to zero depending on the period of
time the shares are held. Class C shares are sold with a 1% contingent deferred
sales charge if redeemed within one year of purchase. Class X are currently
closed to new investors. Each class of shares has identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that each
class bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. Income and expenses of each Portfolio are
borne pro rata by the holders of each class of shares, except that each class
bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the last sale price, or if there had been no
sale that day, at the last bid price. Debt securities are valued on the basis of
broker quotations or valuations provided by a pricing service which utilizes
information with respect to recent sales, market transactions in comparable
securities, quotations from dealers, and various relationships between
securities in determining value. Short-term investments having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market. All other securities and assets are valued at fair value as determined
in good faith by or under the direction of the Trustees.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date or, in the case of certain foreign securities, as soon as the Portfolio is
notified. Realized gains and losses are determined on the identified cost basis.
The Trust does not amortize premiums but does amortize discounts except for the
Tax-Exempt Bond Portfolio which amortizes both premiums and discounts over the
life of the respective securities using the effective interest method.
C. INCOME TAXES:
Each of the Portfolios is treated as a separate taxable entity. It is the
policy of each Portfolio in the Trust to comply with the requirements of the
Internal Revenue Code (the Code), applicable to regulated investment companies,
and to distribute substantially all of its taxable and tax-exempt income to its
shareholders. In addition, each Portfolio intends to distribute an amount
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Portfolio on the ex-dividend date. Income
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of non-taxable dividends, expiring
capital loss carryforwards, foreign currency gain/loss, partnerships, operating
losses and losses deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder distributions
will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Trust does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. FORWARD CURRENCY CONTRACTS:
The Mid Cap Portfolio, the Emerging Markets Bond Portfolio, the International
Portfolio and the Strategic Income Portfolio may enter
58
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998 (CONTINUED)
into forward currency contracts in conjunction with the planned purchase or sale
of foreign denominated securities in order to hedge the U.S. dollar cost or
proceeds. Forward currency contracts involve, to varying degrees, elements of
market risk in excess of the amount recognized in the Statement of Assets and
Liabilities. Risks arise from the possible movements in foreign exchange rates
or if the counterparty does not perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Portfolio as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Portfolio records a
realized gain (or loss) equal to the change in the value of the contract when it
was opened and the value at the time it was closed or offset.
G. FUTURES CONTRACTS:
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Each Portfolio (other than the Real
Estate Securities Portfolio) may enter into financial futures contracts as a
hedge against anticipated changes in the market value of their portfolio
securities. Upon entering into a futures contract, the Portfolios are required
to pledge to the broker an amount of cash and/or securities equal to the
"initial margin" requirements of the futures exchange on which the contract is
traded. Pursuant to the contract, the Portfolios agree to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as daily variation margin and are
recorded by the Portfolio as unrealized gains or losses. When the contract is
closed, the Portfolio records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Portfolio is that the change in
value of the futures contract may not correspond to the change in value of the
hedged instruments.
H. OPTIONS:
Each Portfolio (other than the Real Estate Securities Portfolio), may write
covered options or purchase options contracts for the purpose of hedging against
changes in the market value of the underlying securities or foreign currencies.
Each Portfolio will realize a gain or loss upon the expiration or closing of
the option transaction. Gains and losses on written options are reported
separately in the Statement of Operations. When a written option is exercised,
the proceeds on sales or amounts paid are adjusted by the amount of premium
received. Options written are reported as a liability in the Statement of Assets
and Liabilities and subsequently marked to market to reflect the current value
of the option. The risk associated with written options is that the change in
value of options contracts may not correspond to the change in value of the
hedged instruments. In addition, losses may arise from changes in the value of
the underlying instruments, or if a liquid secondary market does not exist for
the contracts.
The Portfolios may purchase options which are included in the Portfolio's
Schedule of Investments and subsequently marked to market to reflect the current
value of the option. When a purchased option is exercised, the cost of the
security is adjusted by the amount of premium paid. The risk associated with
purchased options is limited to the premium paid.
I. LOAN AGREEMENTS:
The Trust may invest in direct debt instruments which are interests in amounts
owed by a corporate, governmental, or other borrower to lenders or lending
syndicates. The Trust's investments in loans may be in the form of
participations in loans or assignments of all or a portion of loans from third
parties. A loan is often administered by a bank or other financial institution
(the lender) that acts as agent for all holders. The agent administers the terms
of the loan, as specified in the loan agreement. When investing in a loan
participation, the Trust has the right to receive payments of principal,
interest and any fees to which it is entitled only from the lender selling the
loan agreement and only upon receipt by the lender of payments from the
borrower. The Trust generally has no right to enforce compliance with the terms
of the loan agreement with the borrower. As a result, the Trust may be subject
to the credit risk of both the borrower and the lender that is selling the loan
agreement. When the Trust purchases assignments from lenders it acquires direct
rights against the borrower on the loan. Direct indebtedness of emerging
countries involves a risk that the government entities responsible for the
repayment of the debt may be unable, or unwilling to pay the principal and
interest when due.
J. SECURITY LENDING:
The Trust (with the exception of the Real Estate Securities Portfolio) loans
securities to qualified brokers through an agreement with State Street Bank &
Trust (the Custodian) and Brown Brothers, Harriman, custodian for the
International Portfolio. Under the terms of the agreement, the Trust receives
collateral with a market value not less than 100% of the market value of loaned
securities. Collateral consists of cash, securities issued or guaranteed by the
U.S. Government or its agencies and the sovereign debt of foreign countries.
Interest earned on the collateral and premiums paid by the borrower are recorded
as income by the Trust net of fees charged by the Custodian for its services in
connection with this securities lending program. Lending portfolio securities
involves a risk of delay in the recovery of the loaned securities or in the
foreclosure on collateral. At November 30, 1998, the Trust had the following
market value of security loans and collateral:
<TABLE>
<CAPTION>
Value of
Securities Value of
on Loan Collateral
---------- ----------
<S> <C> <C>
Mid Cap Portfolio........................ $6,719,029 $6,957,460
</TABLE>
59
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998 (CONTINUED)
K. EXPENSES:
Expenses incurred by the Trust with respect to any two or more Portfolios are
allocated in proportion to the net assets of each Portfolio, except where
allocation of direct expense to each Portfolio or an alternative allocation
method can be more fairly made.
L. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Trust may engage in when-issued or delayed delivery transactions. The
Trust records when-issued securities on the trade date and maintains collateral
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Trust, the Advisers, Phoenix
Investment Counsel, Inc., an indirect majority-owned subsidiary of Phoenix Home
Life Insurance Company ("PHL"), and Duff & Phelps Investment Management ("DPIM")
Co., an indirect wholly-owned subsidiary of PHL, the Adviser for the Real Estate
Securities Portfolio, are entitled to a fee, based upon the following annual
rates as a percentage of the average daily net assets of each Portfolio:
<TABLE>
<CAPTION>
1st $1-2 $2+
$1 Billion Billion Billion
------------ ---------- ----------
<S> <C> <C> <C>
Tax-Exempt Bond Portfolio.............. 0.45% 0.40% 0.35%
Mid Cap Portfolio...................... 0.75% 0.70% 0.65%
International Portfolio................ 0.75% 0.70% 0.65%
Real Estate Securities Portfolio....... 0.75% 0.70% 0.65%
Emerging Markets Bond Portfolio........ 0.75% 0.70% 0.65%
Strategic Income Portfolio............. 0.55% 0.50% 0.45%
</TABLE>
The respective Advisers have agreed to reimburse the Real Estate Securities
Portfolio and the Strategic Income Portfolio to the extent that total expenses
(excluding interest, taxes, brokerage fees and commissions, and extraordinary
expenses) exceed 1.30% and 1.00%, respectively, of the average daily net assets
for Class A shares, and 2.05% and 1.75%, for Class B shares and 1.75% and 0.75%
for Class C and Class X of Strategic Income Portfolio, respectively. Prior to
March 27, 1998, the advisory and reimbursement rates for Strategic Income
Portfolio Class X were 0.50% and 0.65%, respectively.
Effective October 27, 1998, Seneca Capital Management LLC ("Seneca") was
appointed subadvisor to the Phoenix Mid Cap Portfolio, a majority of the equity
interests of Seneca is owned by Phoenix Investment Partners, Ltd. For its
services, Seneca is paid a fee by the Adviser ranging from 0.375% through 0.20%
of the average daily net assets of the Phoenix Mid Cap Portfolio.
Effective October 27, 1998, Aberdeen Fund Managers, Inc. ("Aberdeen") was
appointed subadvisor to the Phoenix International Portfolio, Aberdeen is a
subsidiary of Aberdeen Asset Management PLC. For its services, Aberdeen is paid
a fee by the Adviser equal to 0.375% of the average daily net assets of the
Phoenix International Portfolio up to $1 billion, 0.35% between $1 billion and
$2 billion, and 0.325% in excess of $2 billion.
Phoenix Equity Planning Corporation ("PEPCO") an indirect majority-owned
subsidiary of PHL, which serves as the national distributor of the Trust's
shares has advised the Trust that it retained net selling commissions of
$122,184 for Class A shares and deferred sales charges of $422,549 for Class B
shares and $318 for Class C shares for the year ended November 30, 1998. In
addition, each Portfolio pays PEPCO a distribution fee at an annual rate of
0.25% for Class A shares and 1.00% for Class B and Class C shares applied to the
average daily net assets of each Portfolio. The distributor has advised the
Trust that of the total amount expensed for the year ended November 30, 1998,
$1,025,897 was retained by the Distributor and $1,404,016 was paid out to
unaffiliated Participant and $278,168 was paid to W.S. Griffith, an indirect
subsidiary of PHL.
As Financial Agent of the Trust, PEPCO received a fee for bookkeeping,
administration, and pricing services through May 31, 1998, at an annual rate of
0.05% of average daily net assets up to $100 million, 0.04% of average daily net
assets of $100 million to $300 million, 0.03% of average daily net assets of
$300 million through $500 million, and 0.015% of average daily net assets
greater than $500 million; a minimum fee applied.
Effective June 1, 1998, PEPCO receives a financial agent fee equal to the sum
of (1) the documented cost of fund accounting and related services provided by
PFPC Inc. (subagent to PEPCO), plus (2) the documented cost to PEPCO to provide
financial reporting, tax services and oversight of subagent's performance. The
current fee schedule of PFPC Inc. ranges from 0.085% to 0.0125% of the average
daily net asset values of the Fund. Certain minimum fees and fee waivers may
apply.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended November 30, 1998, transfer
agent fees were $1,130,180 of which PEPCO retained $526,661 which is net of fees
paid to State Street.
60
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998 (CONTINUED)
At November 30, 1998 PHL and its affiliates held Phoenix Multi-Portfolio Fund
shares which aggregated the following:
<TABLE>
<CAPTION>
Aggregate
Net Asset
Shares Value
---------- ------------
<S> <C> <C>
Tax-Exempt Bond Portfolio
--Class A..................... 163,803 $1,836,229
International
--Class A..................... 1,521,314 24,310,598
Real Estate Securities Portfolio
--Class A..................... 514,562 6,303,379
--Class B..................... 12,290 149,814
Emerging Markets Bond Portfolio
--Class A..................... 2,083,489 15,001,120
--Class B..................... 17,508 124,832
--Class C..................... 8,484 60,830
Strategic Income Portfolio
--Class X..................... 699,738 5,604,901
--Class A..................... 10,902 87,107
--Class B..................... 10,870 86,743
--Class C..................... 10,870 86,851
</TABLE>
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended November 30, 1998
(excluding U.S. Government and agency securities, short-term securities, futures
contracts and forward currency contracts) aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
------------- -------------
<S> <C> <C>
Tax-Exempt Bond Portfolio......... $ 16,534,538 $ 29,372,392
Mid Cap Portfolio................. 1,072,164,078 1,125,149,460
International Portfolio........... 204,714,991 175,987,086
Real Estate Securities
Portfolio........................ 5,551,422 8,306,157
Emerging Markets Bond Portfolio... 377,244,699 388,087,244
Strategic Income Portfolio........ 8,497,008 7,675,230
</TABLE>
Purchase and sales of U.S. Government and agency securities during the year
ended November 30, 1998, aggregated the following:
<TABLE>
<CAPTION>
Purchases Sales
--------- ---------
<S> <C> <C>
Strategic Income Portfolio.................. $ 807,704 $ 967,484
</TABLE>
At November 30, 1998, the Tax-Exempt Bond Portfolio had entered into futures
contracts as follows:
<TABLE>
<CAPTION>
Value of
Contracts Market Net
Number of when Value of Unrealized
Description Contracts Opened Contracts Depreciation
- --------------------------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Bond Dec 98
(Short)................... 8 $1,009,191 $1,038,750 $ (29,559)
</TABLE>
Written option activity for the year ended November 30, 1998 aggregated the
following:
<TABLE>
<CAPTION>
Call Options
------------------------
Number of Amount
Emerging Markets Bond Portfolio Options of Premiums
- ------------------------------------------- ----------- -----------
<S> <C> <C>
Options outstanding at November 30, 1997... -- $ --
Options written............................ 21.0 84,804
Options canceled in closing purchase
transactions.............................. (5.0) (36,547)
Options expired............................ (16.0) (48,257)
Options exercised.......................... -- --
--- -----------
Options outstanding at November 30, 1998... -- $ --
--- -----------
--- -----------
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts. Given the uncertain economic condition of Russia and
the defaults that have occurred, there is no guarantee that continued payments
on Russian government bonds will be made.
5. CAPITAL LOSS CARRYOVERS
The following Portfolios have capital loss carryforwards which may be used to
offset future capital gains.
<TABLE>
<CAPTION>
Strategic Emerging Real
Expiration Date Tax-Exempt Income Markets Estate
- ------------------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
2006............... $ 381,648 $ 154,841 $42,735,153 $ 70,513
----------- --------- ----------- ---------
Total............ $ 381,648 $ 154,841 $42,735,153 $ 70,513
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
6. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Portfolios of the Trust have
recorded several reclassifications in the capital accounts. These
reclassifications have no impact on the net asset value of the Portfolios and
are designed generally to present undistributed income and realized gains on a
tax basis which is
61
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998 (CONTINUED)
considered to be more informative to the shareholder. As of November 30, 1998,
the Portfolios recorded the following reclassifications to increase (decrease)
the accounts listed below:
<TABLE>
<CAPTION>
Undistributed Accumulated Capital paid
net net realized in on shares
investment gain of beneficial
income (loss) interest
------------- ---------------- ----------------
<S> <C> <C> <C>
Tax-Exempt Bond Portfolio... $ 479,932 $ 51,664 $ (531,596)
Mid Cap Portfolio........... 467,524 (467,524) --
International Portfolio..... 525,955 (525,955) --
Emerging Markets Bond
Portfolio................. (3,921,630 ) 3,921,630 --
Strategic Income
Portfolio................. 15,224 (16,732) 1,508
</TABLE>
TAX NOTICE (UNAUDITED)
For the fiscal year ended November 30, 1998, the Tax-Exempt Bond Portfolio
distributed $5,465,095 of exempt-interest dividends.
For the fiscal year ended November 30, 1998, the following Portfolios
distributed long-term capital gains dividends as follows:
<TABLE>
<CAPTION>
28% 20%
----------- ----------
<S> <C> <C>
Tax-Exempt Bond Portfolio............... $ 94,830 --
Mid Cap Portfolio....................... 14,325,003 $8,224,856
International Portfolio................. 8,680,892 4,099,040
Real Estate Securities Portfolio........ 1,022,237 1,500,701
Emerging Markets Bond Portfolio......... 420,839 --
Strategic Income Portfolio.............. 33,264 4,400
</TABLE>
This report is not authorized for distribution to prospective investors in
the Phoenix Multi-Portfolio Fund unless preceded or accompanied by an effective
prospectus which includes information concerning the sales charge, the Fund's
record and other pertinent information.
62
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix Multi-Portfolio Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Tax-Exempt Bond Portfolio, the Mid Cap Portfolio, the International
Portfolio, the Real Estate Securities Portfolio, the Emerging Markets Bond
Portfolio and the Strategic Income Portfolio (formerly Diversified Income
Portfolio) (constituting series of the Phoenix Multi-Portfolio Fund, hereafter
referred to as the "Fund") at November 30, 1998 and the results of each of their
operations, the changes in each of their net assets and the financial highlights
for each of the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at November 30, 1998 by correspondence with the
custodians and brokers provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
January 21, 1999
63
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Phoenix International Portfolio of
Phoenix Multi-Portfolio Fund was held on October 27, 1998 to approve the
following matter:
1. Approval of a subadvisory agreement with Aberdeen Fund Managers, Inc.
On the record date for this meeting there were 5,848,931 shares outstanding and
50.13% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Approval of investment subadvisory
agreement 5,376,525 132,631 339,775
</TABLE>
A special meeting of Shareholders of the Phoenix Mid Cap Portfolio of Phoenix
Multi-Portfolio Fund was held on October 27, 1998 to approve the following
matter:
1. Approval of a subadvisory agreement with Seneca Capital Management LLC.
On the record date for this meeting there were 8,784,306 shares outstanding and
56.22% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Approval of investment subadvisory
agreement 7,613,064 281,207 890,035
</TABLE>
64
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
101 Munson Street
Greenfield, MA 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
John F. Sharry, Executive Vice President
Gail P. Seneca, Senior Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
Timothy M. Heaney, Vice President
Ron K. Jacks, Vice President
William E. Keen, III, Vice President
Peter S. Lannigan, Vice President
Richard D. Little, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Michael Schatt, Vice President
Pierre G. Trinque, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
INVESTMENT ADVISERS
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, CT 06115-0480
Duff & Phelps Investment Management Co.
(Real Estate Securities Portfolio)
55 East Monroe Street, Suite 3600
Chicago, IL 60603
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
CUSTODIANS
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Brown Brothers Harriman & Co.
(International Portfolio)
40 Water Street
Boston, MA 02109
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, CT 06083-2200
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
Internet access:
www.phoenixinvestments.com
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200 PRESORTED
Enfield CT 06083-2200 U.S. Postage
PAID
Springfield, MA
Permit No. 444
[LOGO] PHOENIX
INVESTMENT PARTNERS
PXP 490 (1/99)
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