AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 2000
REGISTRATION NOS. 33-19423
811-5436
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM N-1A
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 31 |X|
AND/OR
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 33
(CHECK APPROPRIATE BOX OR BOXES)
--------------------------
PHOENIX MULTI-PORTFOLIO FUND
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
--------------------------
101 MUNSON STREET, GREENFIELD, MASSACHUSETTS 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O PHOENIX EQUITY PLANNING CORPORATION--SHAREHOLDER SERVICES
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
--------------------------
PAMELA S. SINOFSKY
ASSISTANT VICE PRESIDENT
AND ASSISTANT COUNSEL
PHOENIX INVESTMENT PARTNERS, LTD.
56 PROSPECT STREET
HARTFORD, CONNECTICUT 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
--------------------------
It is proposed that this filing will become effective
(check appropriate box)
|X| immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Phoenix Multi-Portfolio Fund, a Delaware business trust (the "Registrant") is
the successor issuer to Phoenix Multi-Portfolio Fund, a Massachusetts business
trust (the "Predecessor"). This Post-Effective Amendment has been filed for the
purpose of adopting under the Securities Act of 1933, the Securities Exchange
Act of 1934 and the Investment Company Act of 1940 the Registration Statement on
Form N-1A (nos 33-19423 and 811-5436) of the Predecessor pursuant to the
provisions of Rule 414 under the Securities Act of 1933. In accordance with the
provisions of paragraph (d) of Rule 414, this Registration Statement also
revises and sets forth additional information arising in connection with
Registrant's change of domicile.
================================================================================
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
Cross Reference Sheet Pursuant to Rule 495(a)
THIS REGISTRATION STATEMENT CONTAINS TWO PROSPECTUSES AND TWO STATEMENTS OF
ADDITIONAL INFORMATION. THESE ARE IDENTIFIED AS
VERSION A AND VERSION B OF EACH.
PART A
INFORMATION REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
----------------------------- ------------------
<S> <C> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risks, Performance..... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies,
and Related Risks........................................ Investment Risk and Return Summary
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things to Know When Selling Shares; Account
Policies; Investor Services; Tax Status of Distributions
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------- -------------------------------------------
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Techniques and Risks; Investment
Restrictions
13. Management of the Fund................................... Management of the Trust
14. Control Persons and Principal Holders of Securities...... Management of the Trust
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER THE APPROPRIATE ITEM,
SO NUMBERED, IN PART C OF THIS REGISTRATION STATEMENT.
</TABLE>
<PAGE>
Phoenix Investment Partners
Prospectus
November 30, 2000
-------- Aberdeen
Phoenix-Aberdeen
International Fund
-------- Duff&Phelps
Phoenix-Duff & Phelps
Real Estate Securities Fund
-------- Goodwin
Phoenix-Goodwin
Emerging Markets Bond Fund
Phoenix-Goodwin
Tax-Exempt Bond Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or
disapproved of these securities or
determined if this prospectus is
truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus contains important
information that you should know
before investing in the Phoenix-Aberdeen
International Fund, Phoenix-Duff &
Phelps Real Estate Securities Fund,
Phoenix-Goodwin Emerging Markets
Bond Fund, and Phoenix-Goodwin
Tax-Exempt Bond Fund. Please read it
carefully and retain it for future
reference.
[logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
[Version A]
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Phoenix-Aberdeen International Fund
Investment Risk and Return Summary....................... 1
Fund Expenses............................................ 4
Management of the Fund................................... 5
Phoenix-Duff & Phelps Real Estate Securities Fund
Investment Risk and Return Summary....................... 7
Fund Expenses............................................ 11
Management of the Fund................................... 12
Phoenix-Goodwin Emerging Markets Bond Fund
Investment Risk and Return Summary....................... 14
Fund Expenses............................................ 18
Management of the Fund................................... 19
Phoenix-Goodwin Tax-Exempt Bond Fund
Investment Risk and Return Summary....................... 21
Fund Expenses............................................ 25
Management of the Fund................................... 26
Additional Investment Techniques............................ 27
Pricing of Fund Shares...................................... 31
Sales Charges............................................... 32
Your Account................................................ 35
How to Buy Shares........................................... 36
How to Sell Shares.......................................... 36
Things You Should Know When Selling Shares.................. 37
Account Policies............................................ 39
Investor Services........................................... 40
Tax Status of Distributions................................. 41
Financial Highlights........................................ 42
Additional Information...................................... 48
[triangle] Phoenix
Multi-
Portfolio
Fund
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Aberdeen International Fund has an investment objective of high total
return consistent with reasonable risk. There is no guarantee that the fund will
achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, at least 80% of the fund's total assets are
invested in foreign (non-U.S.) issuers located in three or more foreign
countries. From time to time, the fund may have more than 25% of its
assets invested in any major industrial or developed country.
> The fund invests primarily in common stocks of established foreign
companies believed to have potential for growth of capital, income or both.
At any time, the fund may invest exclusively or primarily either for growth
or income.
> The adviser manages the fund's investment program and general operation
of the fund. The subadviser manages the investments of the fund using a
top-down regional allocation approach coupled with a bottom-up stock
selection process. Country and geographic allocations are based on such
economic, monetary and political factors as:
o prospects for relative economic growth among countries;
o expected levels of inflation;
o governmental policies influencing business decisions;
o relative price levels of the various capital markets;
o the outlook for currency relationships; and
o the range of individual investment opportunities available.
> Within the designated country allocations, the subadviser uses primary
research to select individual securities for investment based on factors such
as industry growth, management strength and treatment of minority
shareholders, financial soundness, market share, company valuation and
earnings strength.
Temporary Defensive Strategy: Under abnormal market or economic conditions, the
fund may invest all of its assets in domestic and foreign short-term money
market instruments, including government obligations, certificates of deposit,
bankers' acceptances, time deposits, commercial paper, short-term corporate debt
securities and repurchase agreements. When this happens, the fund may not
achieve its investment objective.
Phoenix-Aberdeen International Fund 1
<PAGE>
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease.
If between the time you purchase shares and the time you sell shares the value
of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
FOREIGN INVESTING
Investing in securities of non-U.S. companies involves special risks and
considerations not typically associated with investing in U.S. companies, such
as:
o less publicly available information about foreign countries;
o political and economic instability within countries;
o differences in financial reporting standards and transaction
settlement systems;
o the possibility of expropriation or confiscatory taxation; and
o changes in investment or exchange regulations.
Some investments may be made in currencies other than U.S. dollars that will
fluctuate in value as a result of changes in the currency exchange rates.
Exchange rate fluctuations can cause the value of your shares to decrease or
increase. Generally, when the value of the U.S. dollar increases against the
foreign currency in which an investment is denominated, the security tends to
decrease in value which, in turn, may cause the value of your shares to
decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
2 Phoenix-Aberdeen International Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Aberdeen International Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table shows how the fund's average annual returns compare to those of a
broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1990 -4.94
1991 10.76
1992 -12.41
1993 37.61
1994 -0.08
1995 9.68
1996 17.39
1997 10.94
1998 25.90
1999 27.27
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 22.34% (quarter ending March
31, 1998) and the lowest return for a quarter was -19.55% (quarter ending
September 30, 1990). Year-to-date performance (through September 30, 2000) was
-11.66%.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99)(1) One Year Five Years Ten Years Life of the Fund(2)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares(3) 19.95% 16.62% 10.59% N/A
----------------------------------------------------------------------------------------------------------------
Class B Shares 22.39% 17.13% N/A 14.68%
----------------------------------------------------------------------------------------------------------------
The Morgan Stanley Capital 27.30% 13.15% 7.33% 11.71%
International EAFE Index(4)
----------------------------------------------------------------------------------------------------------------
S&P 500 Composite 21.14% 28.66% 18.25% 26.49%
Stock Price Index(5)
----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class B Shares since July 15, 1994.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The Morgan Stanley Capital International EAFE Index is an unmanaged,
commonly used measure of foreign stock fund performance which includes net
dividends reinvested. The EAFE Index is an aggregate of 19 individual country
indices in Europe, Australia, New Zealand and the Far East. The Index's
performance does not reflect sales charges.
(5) The S&P 500 Composite Stock Price Index is an unmanaged, commonly used
measure of common stock market total return performance. The Index's performance
does not reflect sales charges.
Performance information is not included for Class C Shares because the class has
not had annual returns for at least one calendar year.
Phoenix-Aberdeen International Fund 3
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases
(as a percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.53% 0.53% 0.53%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.53% 2.28% 2.28%
==== ==== ====
-------------------------
</TABLE>
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
4 Phoenix-Aberdeen International Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $722 $1,031 $1,361 $2,294
-----------------------------------------------------------------------------------------------------------------
Class B $631 $912 $1,220 $2,427
-----------------------------------------------------------------------------------------------------------------
Class C $331 $712 $1,220 $2,615
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $231 $712 $1,220 $2,427
-----------------------------------------------------------------------------------------------------------------
Class C $231 $712 $1,220 $2,615
-----------------------------------------------------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix acts as
the investment adviser for 14 fund companies totaling 37 mutual funds, as
subadviser to two fund companies totaling three mutual funds and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Aberdeen Fund Managers, Inc. ("Aberdeen") is the subadviser to the fund and is
located at 1 Financial Plaza, Suite 2210, Fort Lauderdale, FL 33394. Aberdeen is
a wholly-owned subsidiary of Aberdeen Asset Management PLC based in Aberdeen,
Scotland. Together with its subsidiaries, Aberdeen Asset Management PLC provides
investment management services to unit and investment trusts, segregated pension
funds and other institutional and private portfolios, and, through Aberdeen,
U.S. mutual funds. Aberdeen has served as subadviser for Phoenix-Aberdeen New
Asia Fund, Phoenix-Aberdeen Global Small Cap Fund and the Aberdeen New Asia
Series of The Phoenix Edge Series Fund since their inception in 1996. Aberdeen
also has served as subadviser to Phoenix-Aberdeen Worldwide Opportunities Fund
and the International Series of The Phoenix Edge Series Fund since 1998. As of
December 31, 1999, Aberdeen Asset Management PLC had $30 billion in assets under
management.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
fund. Aberdeen, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Aberdeen manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays
Phoenix-Aberdeen International Fund 5
<PAGE>
Phoenix a monthly investment management fee that is accrued daily against the
value of the fund's net assets at the following rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
$1+ billion
$1st billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
-----------------------------------------------------------------------------------------------------------------
Phoenix pays Aberdeen a subadvisory fee at the following rates:
-----------------------------------------------------------------------------------------------------------------
$1+ billion
$1st billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
Subadvisory Fee 0.375% 0.35% 0.325%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$1,408,005. The ratio of management fees to average net assets for the fiscal
year ended November 30, 1999 was 0.75%.
PORTFOLIO MANAGEMENT
Aberdeen's senior strategy committee determines and monitors the fund's regional
allocations across the globe on a monthly basis. An Aberdeen team of investment
professionals located in offices spread around the world selects securities for
the fund's portfolio.
6 Phoenix-Aberdeen International Fund
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Duff & Phelps Real Estate Securities Fund has an investment objective of
capital appreciation and income with approximately equal emphasis. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, the fund invests 75% of its assets in
publicly-traded real estate investment trusts (REITs) and companies that are
principally engaged in the real estate industry. An issuer is considered
principally engaged in the real estate industry if at least 50% of its gross
revenues or net profits come from the ownership, development, construction,
financing, management or sale of real estate. The fund, however, does not
make direct investments in real estate.
> The fund may concentrate its assets in the real estate industry. The fund is
non-diversified under federal securities laws.
> The fund intends to invest principally in equity REITs. Generally, REITs are
publicly-traded companies that manage portfolios of realestate to earn
profits for shareholders through investments in commercial and residential
real estate. Equity REITs own real estate directly. The fund may also invest
in mortgage REITs. Mortgage REITs make short-term construction or real estate
development loans or invest in long-term mortgages or mortgage pools.
> Securities are selected using a two-tiered screening process. First the
adviser screens the universe of eligible securities for those that it
believes offer the potential for initial appreciation, continued dividend
growth and that show signs the issuer is an efficient user of capital.
Securities that survive this screening are further evaluated based on
interviews and fundamental research that focus on the issuer's strength of
management and property, financial and performance reviews.
> Securities are evaluated for sale if their market value exceeds the adviser's
estimated value, its financial performance is expected to decline or if the
adviser believes the security's issuer fails to adjust its strategy to the
real estate market cycle.
Temporary Defensive Strategy: When the adviser believes there are extraordinary
risks associated with investment in real estate market securities, the fund may
invest up to 100% of its assets in short-term investments such as money market
instruments, repurchase agreements, certificates of deposits and bankers'
acceptances. When this happens, the fund may not achieve its investment
objective.
Phoenix-Duff & Phelps Real Estate Securities Fund 7
<PAGE>
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
Risks Related to Principal Investment Strategies
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease.
If between the time you purchase shares and the time you sell shares the value
of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, the real estate industry and specific companies in which the
fund invests can be worse than expected and investments may fail to perform as
the adviser expects. As a result, the value of your shares may decrease.
NON-DIVERSIFICATION
As a non-diversified investment company, the fund is not limited in the
proportion of assets that it may invest in the securities of any one issuer.
Diversifying a fund's portfolio can reduce the risks of investing. As a
non-diversified investment company, the fund may be subject to greater risk
since it can invest a greater proportion of its assets in the securities of a
small number of issuers. If the fund takes concentrated positions in a small
number of issuers, changes in the price of those securities may cause the fund's
return to fluctuate more than that of a diversified investment company.
REAL ESTATE INDUSTRY CONCENTRATION
Concentrating its investments in the real estate industry presents additional
risk. Securities of companies in other industries may provide greater investment
return in certain market conditions as compared to companies in the real estate
industry. Moreover, conditions that negatively impact the real estate industry
will have a greater impact on this fund as compared to a fund that does not
concentrate in one industry.
The value of investments in issuers that hold real estate may be affected by
changes in the values of real properties owned by the issuers. Likewise,
investments in businesses related to the real estate industry may also be
affected by the value of real estate generally or in particular geographical
areas in which the businesses operated. A decline in real estate value may have
a negative impact on the value of your shares.
Interest rates also can be a significant factor for issuers that hold real
estate and those in related businesses. Increases in interest rates can cause or
contribute to declines in real estate prices and can cause "slowdowns" in such
related businesses as real estate sales and constructions.
8 Phoenix-Duf & Phelps Real Estate Securities Fund
<PAGE>
REIT SECURITIES
REIT securities often are not diversified and may only finance a limited number
of projects or properties, which may subject REITs to abrupt and large price
movements. Equity REITs may be affected by changes in the value of the
underlying property owned by the REITs. Mortgage REITs may be affected by the
quality of any credit extended and are affected by changes in interest rates.
REITs are heavily dependent on cash flow from properties and, at times, the
market price of a REIT's securities may be less than the value of the underlying
real estate investment which may result in a lower price when the fund sells its
shares in the REIT. REITs may trade less frequently and in lower volume than
securities of other larger companies which may also contribute to REIT
securities losing value. REITs are dependent on management skills, are not
diversified, and are subject to the possibilities of failing to qualify for the
federal tax exemption on distributed income and failing to maintain their
exemptions under the 1940 Act. Assets invested in REITs incur a layering of
expenses paid by the REIT that you, as a shareholder in the fund, indirectly
bear.
Phoenix-Duff & Phelps Real Estate Securities Fund 9
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Duff & Phelps Real Estate Securities Fund. The bar chart shows
changes in the fund's Class A Shares performance from year to year over the life
of the fund.(1) The table shows how the fund's average annual returns compare to
those of a broad-based securities market index. The fund's past performance is
not necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1996 32.77
1997 21.83
1998 -20.11
1999 4.12
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 17.60% (quarter ending December 31,
1996) and the lowest return for a quarter was -12.15% (quarter ending September
30, 1998). Year-to-date performance (through September 30, 2000) was 27.59%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99)(1) One Year Life of the Fund(2)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A Shares(3) -1.87% 8.63%
-----------------------------------------------------------------------------------------------------------------
Class B Shares -0.65% 8.85%
-----------------------------------------------------------------------------------------------------------------
S&P 500 Composite
Stock Price Index(4) 21.14% 28.14%
-----------------------------------------------------------------------------------------------------------------
NAREIT Index (5) -4.62% 8.31%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A and Class B Shares since March 1, 1995.
(3) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
(4) The S&P 500 Composite Stock Price Index is an unmanaged, commonly used
measure of common stock total return performance. The Index's performance does
not reflect sales charges.
(5) The National Association of Real Estate Investment Trusts (NAREIT) Equity
Total Return Index is a commonly used, unmanaged indicator of REIT performance.
The Index's performance does not reflect sales charges.
10 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(b)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00%
Other Expenses 0.75% 0.75%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES(a) 1.75% 2.50%
==== ====
-----------------------
</TABLE>
(a) The fund's investment adviser has agreed to reimburse through March 31, 2001
the Phoenix-Duff & Phelps Real Estate Securities Fund's expenses, other than
Management Fees and Distribution and Service Fees, to the extent that such
expenses exceed 0.30% for each Class of Shares. Actual Total Annual Fund
Operating Expenses after expense reimbursement were 1.30% for Class A Shares and
2.05% for Class B Shares.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Phoenix-Duff & Phelps Real Estate Securities Fund 11
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $743 $1,094 $1,469 $2,519
-----------------------------------------------------------------------------------------------------------------
Class B $653 $979 $1,331 $2,652
-----------------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $253 $779 $1,331 $2,652
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISER
Duff & Phelps Investment Management Co. ("Duff & Phelps") is the investment
adviser to the fund and is located at 55 East Monroe Street, Suite 3600,
Chicago, Illinois 60603. Duff & Phelps also acts as investment adviser to eight
other mutual funds and as adviser to institutional clients. As of December 31,
1999, Duff & Phelps had approximately $14.7 billion in assets under management
on a discretionary basis.
Subject to the direction of the fund's Board of Trustees, Duff & Phelps is
responsible for managing the fund's investment program and the day-to-day
management of the fund's portfolio. Duff & Phelps manages the fund's assets to
conform with the investment policies as described in this prospectus. The fund
pays Duff & Phelps a monthly investment management fee that is accrued daily
against the value of the fund's net assets at the following rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
12 Phoenix-Duff & Phelps Real Estate Securities Fund
<PAGE>
During the fund's last fiscal year, the fund paid total management fees of
$270,694. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1999 was 0.75%.
The adviser has voluntarily agreed to assume operating expenses of the fund
(excluding management fees, distribution and service fees, interest, taxes,
brokerage fees, commissions and extraordinary expenses) until March 31, 2001, to
the extent that such expenses exceed 0.30% of the average annual net asset
values of the fund.
PORTFOLIO MANAGEMENT
Michael Schatt is responsible for managing the assets of the fund. Mr. Schatt is
employed as Managing Director of Phoenix Investment Partners, Ltd. and is a
Senior Vice President of Duff & Phelps, as well as Vice President, Phoenix Duff
& Phelps Institutional Mutual Funds, The Phoenix Edge Series Fund, Phoenix
Multi-Portfolio Fund and Duff & Phelps Utilities Income Inc. His current
responsibilities include serving as Portfolio Manager of the fund, the Real
Estate Securities Series of The Phoenix Edge Series Fund, and managing the real
estate investment securities of Duff & Phelps Utilities Income, Inc. Previously,
he served as Director of the Real Estate Advisory Practice for Coopers &
Lybrand, LLC and has over 20 years experience in the real estate industry.
Phoenix-Duff & Phelps Real Estate Securities Fund 13
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin Emerging Markets Bond Fund has an investment objective of high
current income and a secondary objective of long-term capital appreciation.
There is no guarantee that the fund will achieve its objectives.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, the fund invests at least 65% of its total assets
in debt in emerging markets. An issuer is deemed to be locatedin an emerging
market if it is organized under the laws of an emerging market country; its
principal securities trading market is in an emerging market country; or at
least 50% of its non-current assets, capitalization, gross revenue or profit
in any one of the two most recent fiscal years has been derived from emerging
market country activities. The adviser considers emerging markets to be any
country that is defined as an emerging or developing economy by the World
Bank, International Finance Corporation, or The United Nations or its
authorities.
> The fund is non-diversified under federal securities laws. Generally, the
fund invests in issuers in three or more countries. However, it may
concentrate more than 25% of its assets in issuers of a single country.
> Fund investments are predominantly in high yield-high risk securities
("junk bonds"). To reduce currency risk, the fund intends to invest
primarily in U.S. dollar denominated debt securities.
> The adviser selects securities and countries for investment that it believes
have strong fundamentals such as cash flow and economic stability. Securities
may be evaluated for sale if the security underperforms based on original
expectations or if there are changes in the original fundamentals.
> Interest rate risk is managed by a duration neutral strategy. The adviser
attempts to maintain the duration of the fund at a level similar to that of
its benchmark, the JP Morgan Emerging Markets Bond Index Plus. Duration
measures the interest rate sensitivity of a fixed income security by
assessing and weighting the present value of the security's payment pattern.
Generally, the longer the maturity the greater the duration and therefore the
greater effect interest rate changes have on the price of the security. By
maintaining the duration of the fund at a level similar to that of the fund's
benchmark, the adviser believes that the fund's exposure to interest rate
risk is more consistent with its benchmark's risk profile than that of a fund
that attempts to predict future interest rate changes. On October 31, 2000
the modified adjusted duration of the JP Morgan Emerging Markets Bond Index
Plus was 5.1 years.
14 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
> Securities selected for portfolio investment may be of any maturity. However,
the adviser attempts to maintain a maturity composition similar to that of
its benchmark in an effort to maintain an interest rate risk profile
consistent with its benchmark. Maturity composition refers to the percentage
of securities within specific maturity ranges as well as the aggregate
weighted average portfolio maturity. On October 31, 2000 the maturity of the
JP Morgan Emerging Markets Bond Index Plus was 14.2 years.
Temporary Defensive Strategy: If the adviser does not believe that market
conditions are favorable to the fund's principal strategies, the fund may invest
without limit in U.S. debt securities, including short term money market
instruments. When this happens, the fund may not achieve its investment
objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating, the greater
the chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the time of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval may be required in some
developing countries for the release of investment income, capital and sale
proceeds to foreign investors and some developing countries may limit the extent
of foreign investment in domestic companies. Emerging market countries often
suffer from currency devaluation and higher rates of inflation.
Developing countries may be adversely affected by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed by countries with which they trade and may also
be affected by economic conditions in such countries. In
Phoenix-Goodwin Emerging Markets Bond Fund 15
<PAGE>
addition, a negative situation or condition that affects the market in one
emerging market region may have a negative impact on all emerging market regions
due to the so-called "ripple effect."
FOREIGN INVESTING
Foreign markets and currencies may not perform as well as U.S. markets.
Political and economic uncertainty in foreign countries, as well as less public
information about foreign investments, may negatively impact the fund's
portfolio. Dividends and other income payable on foreign securities may be
subject to foreign taxes. Some investments may be made in currencies other than
U.S. dollars that will fluctuate in value as a result of changes in the currency
exchange rate.
HIGH YIELD-HIGH RISK SECURITIES
High yield-high risk securities (junk bonds) entail greater price volatility and
credit and interest rate risk than investment grade securities. Analysis of the
creditworthiness of high yield-high risk issuers is more complex than for
higher-grade securities, making it more difficult for the adviser to accurately
predict risk. There is a greater risk with high yield-high risk securities that
an issuer will not be able to make principal and interest payments when due. If
the fund pursues missed payments, there is a risk that fund expenses could
increase. In addition, lower-rated securities may not trade as often and may be
less liquid than higher-rated securities.
INTEREST RATE RISK
Interest rate trends can have an effect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
LONG-TERM MATURITIES
Securities with longer maturities may be subject to greater price fluctuations
due to interest rate, tax law and general market changes.
NON-DIVERSIFICATION
As a non-diversified investment company, the fund is not limited in the
proportion of assets that it may invest in the securities of any one issuer.
Diversifying a fund's portfolio can reduce the risks of investing. As a
non-diversified investment company, the fund may be subject to greater risk
since it can invest a greater proportion of its assets in the securities of a
small number of issuers. If the fund takes concentrated positions in a small
number of issuers, changes in the price of those securities may cause the fund's
return to fluctuate more than that of a diversified investment company.
16 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Emerging Markets Bond Fund. The bar chart shows changes
in the fund's Class A Shares performance from year to year over the life of the
fund.(1) The table shows how the fund's average annual returns compare to those
of a broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1996 54.44
1997 13.73
1998 -32.88
1999 40.04
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 16.84% (quarter ending December 31,
1998) and the lowest return for a quarter was -35.96% (quarter ending September
30, 1998). Year-to-date performance (through September 30, 2000) was 8.11%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Life of the Fund(2)
Average Annual Total Returns -------------------------------------------------
(for the periods ending 12/31/99)(1) One Year Class A Class B Class C
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares 33.39% 13.68% -- --
-----------------------------------------------------------------------------------------------------------------
Class B Shares 35.21% -- 13.85% --
-----------------------------------------------------------------------------------------------------------------
Class C Shares 39.02% -- -- -8.23%
-----------------------------------------------------------------------------------------------------------------
JP Morgan Emerging Markets
Bond Index Plus (3) 25.05% 16.24% 16.24% 1.38%
-----------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate -0.83% 5.91% 5.91% 3.46%
Bond Index(4)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class A and Class B Shares since September 5, 1995, and Class C Shares since
March 26, 1998.
(3) The JP Morgan Emerging Markets Bond Index Plus is an unmanaged, commonly
used measure of emerging-market debt total return performance. The Index tracks
total return for traded external debt instruments in emerging markets. The Index
is not available for direct investment.
(4) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market performance. It is a combination of several Lehman
Brothers fixed income indices. The Index's performance does not reflect sales
charges.
Phoenix-Goodwin Emerging Markets Bond Fund 17
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.56% 0.56% 0.56%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.56% 2.31% 2.31%
==== ==== ====
------------------------
</TABLE>
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
18 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class A $626 $944 $1,285 $2,243
-----------------------------------------------------------------------------------------------------------------
Class B $634 $921 $1,235 $2,458
-----------------------------------------------------------------------------------------------------------------
Class C $334 $721 $1,235 $2,646
-----------------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-----------------------------------------------------------------------------------------------------------------
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
Class B $234 $721 $1,235 $2,458
-----------------------------------------------------------------------------------------------------------------
Class C $234 $721 $1,235 $2,646
-----------------------------------------------------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix acts as
the investment adviser for 14 fund companies totaling 37 mutual funds, as
subadviser to two fund companies totaling three mutual funds, and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this
Phoenix-Goodwin Emerging Markets Bond Fund 19
<PAGE>
prospectus. The fund pays Phoenix a monthly investment management fee that is
accrued daily against the value of the fund's net assets at the following rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$700,590. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1999 was 0.75%.
PORTFOLIO MANAGEMENT
Peter S. Lannigan is the Portfolio Manager of the fund and as such is primarily
responsible for the day-to-day management of the fund. Mr. Lannigan served as
Co-Manager of the fund from April 1995 until November 1996. Mr. Lannigan served
as a Vice President of Phoenix between May 1995 and September 1996, a Director,
Fixed Income Research between 1996-1997, and presently, he is a Managing
Director, Fixed Income. From 1993 until 1995, he was a Director, Fixed Income
Research for Phoenix Home Life Mutual Insurance Company.
20 Phoenix-Goodwin Emerging Markets Bond Fund
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Goodwin Tax-Exempt Bond Fund has an investment objective of producing as
high a level of current income exempt from federal income taxation as is
consistent with the preservation of capital. There is no guarantee that the fund
will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances and as a matter of fundamental policy, the fund
invests at least 65% of total assets in municipal bonds, the income of which
is fully exempt from federal taxation, and at least 80% of its net assets in
municipal bonds and other municipal securities, the income of which is fully
exempt from federal income taxation.
> "Municipal securities" means obligations, including municipal bonds, notes
and tax-exempt commercial paper, issued by or on behalf of states,
territories and possessions of the United States, the District of Columbia,
and their political subdivisions, agencies and instrumentalities, and certain
industrial development bonds, the interest from which is, in the opinion of
counsel to the issuers of such securities, exempt from federal income
taxation. The fund intends to invest primarily in municipal bonds.
> The fund may, from time to time, concentrate its assets in a particular
segment of the municipal securities market.
> Municipal securities selected for investment have, at the time of investment,
credit ratings within the four highest rating categories, or, if unrated, are
of comparable quality in the adviser's opinion. The fund may continue to hold
securities whose credit rating drops below investment grade.
> Securities are selected using a sector rotation approach. The adviser seeks
to adjust the proportion of fund investment in various sector (such as water
and sewer, education, transportation and electrical utilities) and the
selections within sectors to obtain higher relative returns. Sectors are
analyzed by the adviser for attractive values and geographic opportunities.
Securities within sectors are selected based on the structure of the
security, such as the coupon rate, calls, and maturity, and the adviser's
belief that the security offers potential for total return based on
risk-to-reward tradeoff.
Phoenix-Goodwin Tax-Exempt Bond Fund 21
<PAGE>
> Interest rate risk is managed by a duration neutral strategy. The adviser
attempts to maintain the duration of the fund at a level similar to that of
its benchmark, the Lehman Brothers Municipal Bond Index. Duration measures
the interest rate sensitivity of a fixed income security by assessing and
weighting the present value of the security's payment pattern. Generally, the
longer the maturity the greater the duration and therefore the greater effect
interest rate changes have on the price of the security. By maintaining the
duration of the fund at a level similar to that of the fund's benchmark, the
adviser believes that the fund's exposure to interest rate risk is more
consistent with its benchmark's risk profile than that of a fund that
attempts to predict future interest rate changes. On October 31, 2000 the
modified adjusted duration of the Lehman Brothers Municipal Bond Index was
7.4 years.
> Fixed income securities selected for portfolio investment may be of any
maturity. However, the adviser attempts to maintain a maturity
composition similar to that of its benchmark in an effort to maintain an
interest rate risk profile consistent with its benchmark exposure to interest
rate risk. Maturity composition refers to the percentage of securities within
specific maturity ranges as well as the aggregate weighted average portfolio
maturity. On October 31, 2000 the maturity of the Lehman Brothers Municipal
Bond Index was 13.8 years.
Temporary Defensive Strategy: The fund may invest all of its assets in U.S.
Government obligations, high investment grade corporate debt securities, high
investment grade commercial paper, certificates of deposit and repurchase
agreements with banks, brokers and dealers considered by the fund to be
trustworthy for temporary defensive purposes. In such instances, the fund may
not achieve its stated objective.
Please refer to "Additional Investment Techniques" for taxable securities in
which the fund may invest, as well as other investment techniques of the fund.
RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
22 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating, the greater
the chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
INTEREST RATE RISK
Interest rate trends can have an effect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
MUNICIPAL SECURITIES
Principal and interest payments on municipal securities may not be guaranteed by
the issuing body and may be payable only from monies derived from a particular
source (so called "revenue bonds"). If the source does not perform as expected,
principal and income payments may not be made on time or at all. In addition,
the market for municipal securities is often thin and can be temporarily
affected by large purchases and sales, including those by the fund. General
conditions in the financial markets and the size of a particular offering may
also negatively affect municipal securities' returns.
MUNICIPAL SECURITIES INDUSTRY CONCENTRATION
Concentration in a particular segment of the municipal securities industry may
subject the fund to additional risks. Securities in other segments may provide
greater investment return in certain market conditions, and conditions which
negatively impact the concentrated segment will have a greater impact on this
fund as compared to a fund which does not concentrate in one segment.
Phoenix-Goodwin Tax-Exempt Bond Fund 23
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Tax-Exempt Bond Fund. The bar chart shows changes in the
fund's Class A Shares performance from year to year over a 10-year period.(1)
The table shows how the fund's average annual returns compare to those of a
broad-based securities market index. The fund's past performance is not
necessarily an indication of how the fund will perform in the future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1990 6.32
1991 11.41
1992 10.65
1993 13.44
1994 -7.41
1995 18.21
1996 3.05
1997 8.33
1998 3.10
1999 -3.65
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 8.07% (quarter ending March
31, 1995) and the lowest return for a quarter was -6.00% (quarter ending March
31, 1994). Year-to-date performance (through September 30, 2000) was 5.99%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Average Annual Total Returns
(for the periods ending 12/31/99)(1) One Year Five Years Ten Years Life of the Fund(2)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares -8.22% 4.54% 5.57% N/A
-----------------------------------------------------------------------------------------------------------------
Class B Shares -8.10% 4.79% N/A 3.30%
-----------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal
Bond Index(3) -2.07% 6.91% 6.89% 5.20%(4)
-----------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate
Bond Index(5) -0.83% 7.73% 7.70% 5.20%(4)
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B Shares.
(2) Class B Shares since March 16, 1994.
(3) The Lehman Brothers Municipal Bond Index is an unmanaged, commonly used
measure of long-term, investment-grade, tax-exempt municipal bond total return
performance. The Index's performance does not reflect sales charges.
(4) Index performance since February 28, 1994.
(5) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond performance. It is a combination of several Lehman Brothers
fixed income indices. The Index's performance does not reflect sales charges.
24 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
<S> <C> <C>
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a)
Maximum Sales Charge (load) Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
--------------------------------------------------------
CLASS A CLASS B
SHARES SHARES
------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.45% 0.45%
Distribution and Service (12b-1) Fees(b) 0.25% 1.00%
Other Expenses 0.31% 0.31%
---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.01% 1.76%
==== ====
------------------------
</TABLE>
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) Distribution and
Service Fees represent an asset-based sales charge that, for a long-term
shareholder, may be higher than the maximum front-end sales charge permitted by
the National Association of Securities Dealers, Inc. ("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class A $573 $781 $1,006 $1,653
------------------------------------------------------------------------------------------------------------------
Class B $579 $754 $954 $1,875
------------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix-Goodwin Tax-Exempt Bond Fund 25
<PAGE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------------------------
Class B $179 $554 $954 $1,875
------------------------------------------------------------------------------------------------------------------
</TABLE>
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix acts as
the investment adviser for 14 fund companies totaling 37 mutual funds, as
subadviser to two fund companies totaling three mutual funds and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the day-to-day management of the
fund's portfolio. Phoenix manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
$1st billion $1+ billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.45% 0.40% 0.35%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
During the fund's last fiscal year, the fund paid total management fees of
$473,237. The ratio of management fees to average net assets for the fiscal year
ended November 30, 1999 was 0.45%.
PORTFOLIO MANAGEMENT
Timothy Heaney has served as Portfolio Manager of the fund since September 1997
and, as such, is primarily responsible for the day-to-day management of the
fund. Mr. Heaney is also the Portfolio Manager of Phoenix-Goodwin California
Tax-Exempt Bond Fund and, from March 1996 to September 1997, he served as
Co-Manager. Mr. Heaney is Vice President of the fund and served as Director,
Fixed Income Research of Phoenix from 1996 to 1998. Since 1998, he is Managing
Director, Fixed Income of Phoenix. From 1995 to 1996, he was an Investment
Analyst with Phoenix, and, from 1992 to 1994, he was an Investment Analyst with
Phoenix Home Life Mutual Insurance Company.
26 Phoenix-Goodwin Tax-Exempt Bond Fund
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
In addition to the Principal Investment Strategies and Risks Related to
Principal Investment Strategies, the Phoenix-Aberdeen International Fund
("International"), Phoenix-Duff & Phelps Real Estate Securities Fund ("Real
Estate"), Phoenix-Goodwin Emerging Markets Bond Fund ("Emerging Markets") and
Phoenix-Goodwin Tax-Exempt Bond Fund ("Tax-Exempt") may engage in the following
investment techniques as indicated:
BORROWING
Each fund may obtain fixed interest rate loans from banks in amounts up to
one-third the value of its net assets and invest the loan proceeds in other
assets. If the securities purchased with such borrowed money decreases in value
or does not increase enough to cover interest and other borrowing costs, the
funds will suffer greater losses than if no borrowing took place.
BRADY BONDS
Emerging Markets may invest in Brady Bonds. Brady Bonds have an uncollateralized
component, and countries issuing such bonds have a history of defaults making
the bonds speculative in nature.
CMOs, REMICs AND OTHER PASS-THROUGH SECURITIES
Real Estate may invest in mortgaged-backed securities, such as collateralized
mortgage obligations (CMOs) and real estate mortgage investment conduits
(REMICs). The values of pass-through securities may fluctuate to a greater
degree than other debt securities in response to changes in interest rates.
Early payoffs on the underlying loans in mortgage-backed and asset-backed
pass-through securities and CMOs may result in the fund receiving less income
than originally anticipated. The variability in prepayments will tend to limit
price gains when interest rates drop and exaggerate price declines when interest
rates rise. In the event of high prepayments, the fund may be required to invest
the proceeds at lower interest rates, causing the fund to earn less than if the
prepayments had not occurred.
CONVERTIBLE SECURITIES
International and Real Estate may invest in convertible securities. Convertible
securities may be subject to redemption at the option of the issuer. If a
security is called for redemption, the fund may have to redeem the security,
convert it into common stock or sell it to a third party at a price and time
that it not beneficial for the fund. In addition, securities convertible into
common stocks may have higher yields than common stocks, but lower yields than
comparable nonconvertible securities.
Phoenix-Goodwin Tax-Exempt Bond Fund 27
<PAGE>
DEBT SECURITIES
In addition to common stocks, International may invest in any other type of
securities, including preferred stocks, convertible securities, bonds, notes and
debt securities of any maturity and credit quality subject to such limitations
as are included in the fund's prospectus and statement of additional
information.
Real Estate may invest in debt securities of companies principally engaged in
the real estate industry having credit ratings within the four highest rating
categories at the time of investment and of any maturity. The fund may continue
to hold securities whose rating drops below investment grade.
Emerging Markets may invest in securities other than emerging market debt
obligations of any maturity, such as debt securities and money market
instruments issued by corporations and governments based in developed markets.
Typically, debt obligations will decrease in value when interest rates rise.
Credit risk for debt obligations generally increases as the rating declines.
Securities with lower credit ratings have a greater chance of principal and
interest payment default. Debt obligations with longer maturities may be subject
to price fluctuations due to interest rates, tax laws and other general market
factors. Credit risk is determined at the date of investment. If the rating
declines after the date of purchase, the fund is not obligated to sell the
security.
DEPOSITORY RECEIPTS
International may invest in American Depository Receipts (ADRs), European
Depository Receipts (EDRs), and ADRs not sponsored by U.S. banks. While
investment in ADRs and EDRs may eliminate some of the risk associated with
foreign investments, it does not eliminate all the risks inherent in investing
in securities of foreign issuers. EDRs, and ADRs which are not sponsored by U.S.
banks, are subject to the same investment risks as foreign securities.
DERIVATIVES
All funds, except Real Estate, may enter into options transactions, financial
futures and related options for hedging purposes, and International and Emerging
Markets may enter into forward foreign currency contracts. Emerging Markets may
also enter into swap agreements relating to interest rates, securities indices,
credit defaults, total return and currency exchange rates. Derivatives may be
less liquid than other securities and the counterparty to such transaction may
not perform as expected. Futures involve market risk in excess of their value,
hedging transactions may limit returns, and premiums paid could be lost.
EMERGING MARKET INVESTING
International may invest in emerging markets. Investments in less-developed
countries whose markets are still emerging generally present risks in greater
degree than those presented by investments in foreign issuers based in countries
with developed securities markets and more advanced regulatory systems. Prior
governmental approval may be required in some developing
28 Phoenix Multi-Portfolio Fund
<PAGE>
countries for the release of investment income, capital and sale proceeds to
foreign investors, and some developing countries may limit the extent of foreign
investment in domestic companies.
HIGH YIELD-HIGH RISK SECURITIES
International may invest in high yield-high risk securities. High yield-high
risk securities entail greater price volatility and credit and interest rate
risk than investment grade securities. Analysis of the creditworthiness of high
yield-high risk issuers is more complex than for higher-grade securities, making
it more difficult for the adviser to accurately predict risk. There is a greater
risk with high yield-high risk securities that an issuer will not be able to
make principal and interest payments when due. If the fund pursues missed
payments, there is a risk that fund expenses could increase. In addition,
lower-rated securities may not trade as often and may be less liquid than
higher-rated.
MUTUAL FUND INVESTING
International may invest in shares of other mutual funds. Emerging Markets may
invest in shares of closed-end investment companies that invest primarily in
emerging market debt securities. Assets invested in other mutual funds incur a
layering of expenses, including operating costs, advisory fees and
administrative fees that you, as a shareholder in the funds, indirectly bear.
NON-PERFORMING SECURITIES
Emerging Markets may invest in non-performing securities whose quality is
comparable to securities rated as low as D by Standard & Poor's or C by Moody's.
SECURITIES LENDING
Each fund, except Real Estate, may loan portfolio securities with a value up to
one-third of its total assets to increase its investment returns. If the
borrower is unwilling or unable to return the borrowed securities when due, the
fund can suffer losses.
SHORT-TERM INVESTMENTS
Real Estate may invest in short-term securities, including money market
instruments, repurchase agreements, certificates of deposits and bankers'
acceptances. Default or insolvency of the other party to a repurchase agreement
presents a risk to the funds.
Emerging Markets may invest in money market instruments issued by corporations
and governments based in developed markets.
Phoenix Multi-Portfolio Fund 29
<PAGE>
TAXABLE SECURITIES
Tax-Exempt may, to a limited extent, invest in taxable debt securities,
including private activity industrial development bonds and corporate bonds
having credit ratings at the time of investment within the four highest rating
categories, commercial paper, certificates of deposit, repurchase agreements,
and obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities. The fund may continue to hold securities
whose credit rating drops below investment grade.
UNRATED FIXED INCOME SECURITIES
The funds may invest in unrated securities. Unrated securities may not be lower
in quality than rated securities but due to their perceived risk, they may not
have as broad a market as rated securities. Analysis of unrated securities is
more complex than for rated securities, making it more difficult for the
subadviser to accurately predict risk.
U.S. AND FOREIGN GOVERNMENT OBLIGATIONS
International may invest in obligations of U.S. and foreign governments and
their political subdivisions. Government obligations are not guaranteed to make
the value of your shares rise. Foreign obligations are subject to foreign
investing risks.
VARIABLE AND FLOATING RATE SECURITIES
Tax-Exempt may invest in securities with variable and floating rates. Securities
with variable and floating rates are more susceptible to interest rate
fluctuations and it is more difficult for the adviser to assess their potential
return.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
Tax-Exempt and Emerging Markets may purchase securities on a when-issued or
delayed-delivery basis. The value of the security on settlement date may be more
or less than the price paid as a result of changes in interest rates and market
conditions. If the value on settlement date is less, the value of your shares
may decline.
ZERO COUPON BONDS
Emerging Markets may invest in debt obligations that do not make any interest or
principal payments for a specified time. The market prices of such bonds
generally are more volatile than the market prices of securities that pay
interest on a regular basis and may require the fund to make distributions from
other sources since the fund does not receive cash payments earned on these
securities on a current basis. This may result in higher portfolio turnover
rates and the sale of securities at a time that is less favorable.
The funds may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the funds.
30 Phoenix Multi-Portfolio Fund
<PAGE>
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
Each fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, each fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the
fund.
Asset Value: The funds' investments are valued at market value. If market
quotations are not available, the funds determine a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class' net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
The net asset value per share of each class of each fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). A fund will not calculate its
net asset values per share on days when the NYSE is closed for trading. If a
fund holds securities that are traded on foreign exchanges that trade on
weekends or other holidays when the funds do not price their shares, the net
asset value of the funds' shares may change on days when shareholders will not
be able to purchase or redeem the funds' shares.
Phoenix Multi-Portfolio Fund 31
<PAGE>
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the funds' authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset value. Shares credited to your account from the
reinvestment of fund distributions will be in full and fractional shares that
are purchased at the closing net asset value on the next business day on which
the fund's net asset value is calculated following the dividend record date.
SALES CHARGES
--------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
Presently two classes of shares are offered of the Real Estate Securities Fund
and three class of shares are offered of the International Fund, the Tax-Exempt
Bond Fund and the Emerging Markets Bond Fund. Each class of shares has different
sales and distribution charges (see "Fund Expenses" previously in this
prospectus). The funds have adopted distribution and service plans allowed under
Rule 12b-1 of the Investment Company Act of 1940 that authorize the funds to pay
distribution and service fees for the sale of their shares and for services
provided to shareholders.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of a fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 5.75% of the offering price (6.10% of the amount
invested) for the International Fund and the Real Estate Securities Fund and
4.75% of the offering price (4.99% of the amount invested) for the Emerging
Markets Bond Fund and Tax-Exempt Bond Fund. The sales charge may be reduced or
waived under certain conditions. Class A Shares are not subject to any charges
by the fund when redeemed. Class A Shares have lower distribution and service
fees (0.25%) and pay higher dividends than any other class.
32 Phoenix Multi-Portfolio Fund
<PAGE>
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first five
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and Class C
Shares" below. This charge declines to 0% over a period of five years and may be
waived under certain conditions. Class B shares have higher distribution and
service fees (1.00%) and pay lower dividends than Class A Shares. Class B Shares
automatically convert to Class A Shares eight years after purchase. Purchase of
Class B Shares may be inappropriate for any investor who may qualify for reduced
sales charges of Class A Shares and anyone who is over 85 years of age. The
underwriter may decline purchases in such situations.
CLASS C SHARES. (International Fund and Emerging Markets Bond Fund only.) If you
purchase Class C Shares, you will not pay a sales charge at the time of
purchase. If you sell your Class C Shares within the first year after they are
purchased, you will pay a sales charge of 1%. See "Deferred Sales Charge
Alternative--Class B and Class C Shares" below. Class C Shares have the same
distribution and service fees (1.00%) and pay comparable dividends as Class B
Shares. Class C Shares do not convert to any other class of shares of the fund.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Initial Sales Charges: Combination Purchase Privilege" in the
Statement of Additional Information). Shares purchased based on the automatic
reinvestment of income dividends or capital gain distributions are not subject
to any sales charges. The sales charge is divided between your investment dealer
and the funds' underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
EMERGING MARKETS BOND FUND AND TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF
------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
Phoenix Multi-Portfolio Fund 33
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND AND REAL ESTATE SECURITIES FUND
SALES CHARGE AS
A PERCENTAGE OF
------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10%
$50,000 but under $100,000 4.75 4.99
$100,000 but under $250,000 3.75 3.90
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND CLASS C SHARES
Class B and Class C Shares are purchased without an initial sales charge;
however, shares sold within a specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the rates listed below. The sales
charge will be multiplied by the then current market value or the initial cost
of the shares being redeemed, whichever is less. No sales charge will be imposed
on increases in net asset value or on shares purchased through the reinvestment
of income dividends or capital gain distributions. To minimize the sales charge,
shares not subject to any charge will be redeemed first, followed by shares held
the longest time. To calculate the amount of shares owned and time period held,
all Class B Shares purchased in any month are considered purchased on the last
day of the preceding month, and all Class C Shares are considered purchased on
the trade date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEAR 1 2 3 4 5 6+
---------------------------------------------------------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
</TABLE>
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES
(INTERNATIONAL FUND AND EMERGING MARKETS BOND FUND ONLY)
YEAR 1 2+
-----------------------------------------
CDSC 1% 0%
34 Phoenix Multi-Portfolio Fund
<PAGE>
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
o $500 for all other accounts.
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
The funds reserve the right to refuse a purchase order for any reason.
STEP 2.
Your second choice will be what class of shares to buy. The funds offer up to
three classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
Phoenix Multi-Portfolio Fund 35
<PAGE>
o Receive dividends in additional shares and capital gain
distributions in cash;
o Receive dividends in cash and capital gain distributions in
additional shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------- ----------------------------------------------------------------------------
TO OPEN AN ACCOUNT
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimum investments or limitations on buying shares.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the funds buy back shares at the net asset value next
determined after receipt of a redemption order by the funds' Transfer Agent or
an authorized agent. In the case of a Class B or Class C Share redemption, you
will be subject to the applicable deferred sales charge, if any, for such
shares. Subject to certain restrictions, shares may be redeemed by telephone or
in writing. In addition, shares may be sold through securities dealers, brokers
or agents who may charge customary commissions or fees for their services. The
funds do not charge any redemption fees. Payment for shares redeemed is made
within seven days; however,
36 Phoenix-Multi-Portfolio Fund
<PAGE>
redemption proceeds will not be disbursed until each check used for purchases of
shares has been cleared for payment by your bank, which may take up to 15 days
after receipt of the check.
<TABLE>
<CAPTION>
------------------------------------ -----------------------------------------------------------------------------
TO SELL SHARES
------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA 02266-8301.
Be sure to include the registered owner's name, fund and account number, and
number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix
Funds, 66 Brooks Drive, Braintree, MA 02184. Be sure to include the registered
owner's name, fund and account number, and number of shares or dollar value
you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
------------------------------------ -----------------------------------------------------------------------------
By Check (Tax-Exempt Bond If you selected the checkwriting feature, you may write checks for amounts
Fund and Emerging Markets of $500 or more. Checks may not be used to close an account.
Bond Fund only)
------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the funds. Each fund reserves the right to pay large
redemptions "in-kind" (in securities owned by the fund rather than in cash).
Large redemptions are those over $250,000 or 1% of the fund's net assets.
Additional documentation will be required for redemptions by organizations,
fiduciaries, or retirement plans, or if redemption is requested by anyone but
the shareholder(s) of record. Transfers between broker-dealer "street" accounts
are governed by the accepting broker-dealer. Questions regarding this type of
transfer should be directed to your financial advisor. Redemption requests will
not be honored until all required documents in proper form have been received.
To avoid delay in redemption or transfer, shareholders having questions about
specific requirements should contact the funds' Transfer Agent at (800)
243-1574.
Phoenix Multi-Portfolio Fund 37
<PAGE>
REDEMPTIONS BY MAIL
> If you are selling shares held individually, jointly, or as custodian under
the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act.
Send a clear letter of instructions if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address on record.
Send a clear letter of instructions with a signature guarantee when any of
these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last 60 days.
o You want the proceeds to go to a different name or address than on the
account.
> If you are selling shares held in a corporate or fiduciary account, please
contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be made by an eligible
guarantor institution as defined by the funds' Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker-dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
38 Phoenix Multi-Portfolio Fund
<PAGE>
ACCOUNT POLICIES
--------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, Class B or Class C shares, you can
purchase Class A Shares of any fund at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not more. Send your written
request to State Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call
us at (800) 243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B and Class C shareholders who have
had the contingent deferred sales charge waived because they are in the
Systematic Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should read the prospectus of the fund into which you want to exchange
before deciding to make an exchange. You can obtain a prospectus from your
financial advisor or by calling us at (800) 243-4361 or accessing our Web site
at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of
shares; e.g., Class A for Class A. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
o Exchanges may be made by telephone ((800) 243-1574) or by mail
(State Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and a purchase for
federal income tax purposes.
o Because excessive trading can hurt fund performance and harm other
shareholders, the funds reserve the right to temporarily or
permanently end exchange privileges or reject an order from anyone
who appears to be attempting to time the market, including investors
who request more than one exchange in any 30-day period. The funds'
underwriter has entered into agreements with certain timing firms
permitting
Phoenix Multi-Portfolio Fund 39
<PAGE>
them to exchange by telephone. These privileges are limited, and the
funds' distributor has the right to reject or suspend them.
RETIREMENT PLANS
Shares of the funds may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
INVESTOR SERVICES
--------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application. Exchange privileges may not be available for all
Phoenix Funds, and may be rejected or suspended.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
40 Phoenix Multi-Portfolio Fund
<PAGE>
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
The funds plan to make distributions from net investment income at intervals
stated in the table below and to distribute net realized capital gains, if any,
at least annually.
--------------------------------------------------------------------------------
FUND DIVIDEND PAID
--------------------------------------------------------------------------------
International Fund Semiannually
--------------------------------------------------------------------------------
Real Estate Securities Fund Quarterly
--------------------------------------------------------------------------------
Emerging Markets Bond Fund Monthly
--------------------------------------------------------------------------------
Tax-Exempt Bond Fund Monthly
--------------------------------------------------------------------------------
Distributions of short-term capital gains and net investment income are taxable
to shareholders as ordinary income. Long-term capital gains, if any, distributed
to shareholders and which are designated by a fund as capital gain
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares. The
Tax-Exempt Bond Fund intends to distribute tax-exempt income.
The Tax-Exempt Bond Fund may invest a portion of its assets in securities that
generate income that is not exempt from federal or state income tax. Income
exempt from federal tax may be subject to state and local income tax. Any
capital gains distributed by the Tax-Exempt Bond Fund may be taxable.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix Multi-Portfolio Fund 41
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the funds' financial
performance for the last five years or since inception. Certain information
reflects financial results for a single fund share. The total returns in the
table represent the rate that an investor would have earned or lost on an
investment in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, except as indicated. Their report, together with the
funds' financial statements, are included in the funds' most recent Annual
Report, which is available upon request.
<TABLE>
<CAPTION>
PHOENIX-ABERDEEN INTERNATIONAL FUND
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED
5/31/00 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.33 $15.98 $13.89 $14.48 $12.20 $12.63
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.01 0.04(1) 0.06(1) 0.03(1) 0.04(1) 0.03(1)
Net realized and unrealized gain 0.30 2.49 3.27 1.01 2.28 0.42
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.31 2.53 3.33 1.04 2.32 0.45
---- ---- ---- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.22) (0.07) -- (0.29) -- --
Dividends from net realized gains (2.34) (3.11) (1.24) (1.34) (0.04) (0.88)
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS (2.56) (3.18) (1.24) (1.63) (0.04) (0.88)
---- ---- ---- ---- ---- ----
Change in net asset value (2.25) (0.65) 2.09 (0.59) 2.28 (0.43)
---- ---- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $13.08 $15.33 $15.98 $13.89 $14.48 $12.20
====== ====== ====== ====== ====== ======
Total return(2) 1.10%(4) 19.22% 26.17% 8.21% 19.03% 4.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $144,818 $151,016 $171,463 $131,338 $135,524 $129,352
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.64%(3) 1.53% 1.37% 1.56% 1.57% 1.70%
Net investment income (loss) 0.09%(3) 0.27% 0.40% 0.22% 0.33% 0.23%
Portfolio turnover 28%(4) 77% 104% 167% 151% 236%
-------------------------
</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.
42 Phoenix Multi-Portfolio Fund
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-ABERDEEN INTERNATIONAL FUND
CLASS B
-------------------------------------------------------------------------
SIX MONTHS
ENDED
5/31/00 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $14.64 $15.44 $13.56 $14.22 $12.07 $12.60
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.01 (0.07)(1) (0.05)(1) (0.08)(1) (0.05)(1) (0.07)(1)
Net realized and unrealized gain (loss) 0.25 2.40 3.17 1.00 2.24 0.42
---- ---- ---- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.26 2.33 3.12 0.92 2.19 0.35
---- ---- ---- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.12) (0.02) -- (0.24) -- --
Dividends from net realized gains (2.34) (3.11) (1.24) (1.34) (0.04) (0.88)
---- ---- ---- ---- ---- ----
TOTAL DISTRIBUTIONS (2.46) (3.13) (1.24) (1.58) (0.04) (0.88)
---- ---- ---- ---- ---- ----
Change in net asset value (2.20) (0.80) 1.88 (0.66) 2.15 (0.53)
---- ---- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $12.44 $14.64 $15.44 $13.56 $14.22 $12.07
====== ====== ====== ====== ====== ======
Total return(2) 0.78%(4) 18.45% 25.17% 7.37% 18.16% 3.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $23,454 $23,694 $17,315 $10,159 $6,955 $3,261
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.39%(3) 2.29% 2.11% 2.31% 2.31% 2.50%
Net investment income (loss) (0.65)%(3) (0.51)% (0.34)% (0.55)% (0.39)% (0.61)%
Portfolio turnover 28%(4) 77% 104% 167% 151% 236%
CLASS C
------------------------------
SIX MONTHS
ENDED FROM INCEPTION
5/31/00 3/30/99 TO
(UNAUDITED) 11/30/99
----------- --------
Net asset value, beginning of period $14.65 $12.82
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.04 (0.08)(1)
Net realized and unrealized gain (loss) 0.21 1.93
---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.25 1.85
---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.18) (0.02)
Dividends from net realized gains (2.34) --
---- ----
TOTAL DISTRIBUTIONS (2.52) (0.02)
---- ----
Change in net asset value (2.27) 1.83
---- ----
NET ASSET VALUE, END OF PERIOD $12.38 $14.65
====== ======
Total return(2) 0.72%(4) 14.41%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,352 $1,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.40%(3) 2.30%(3)
Net investment income (loss) (0.45)%(3) (0.85)%(3)
Portfolio turnover 28%(4) 77%
---------------------------
</TABLE>
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in the total return calculation.
(3) Annualized.
(4) Not annualized.
(5) Distributions are made in accordance with the prospectus; however, class
level per share income from investment operations may vary from anticipated
results depending on the timing of share purchases and redemptions.
Phoenix Multi-Portfolio Fund 43
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
CLASS A
-----------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/00 YEAR ENDED NOVEMBER 30, 3/1/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
----------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.11 $12.25 $16.39 $13.14 $10.72 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.34 0.51(4) 0.55(4) 0.49(4) 0.53 0.43(4)
Net realized and unrealized gain (loss) 1.50 (1.07) (3.18) 3.52 2.50 0.55
---- ----- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 1.84 (0.56) (2.63) 4.01 3.03 0.98
---- ----- ----- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.38) (0.58) (0.44) (0.51) (0.59) (0.26)
Dividends from net realized gains -- -- (1.07) (0.25) (0.02) --
---- ----- ----- ---- ---- ----
TOTAL DISTRIBUTIONS (0.38) (0.58) (1.51) (0.76) (0.61) (0.26)
---- ----- ----- ---- ---- ----
Change in net asset value 1.46 (1.14) (4.14) 3.25 2.42 0.72
---- ----- ----- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $12.57 $11.11 $12.25 $16.39 $13.14 $10.72
====== ====== ====== ====== ====== ======
Total return(1) 16.85%(3) (4.69)% (17.42)% 31.44% 29.20% 9.87%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $18,066 $17,014 $24,686 $36,336 $22,872 $13,842
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 1.30%(2) 1.30% 1.31% 1.30% 1.30% 1.30%(2)
Net investment income 5.68%(2) 4.30% 3.79% 3.34% 4.55% 5.79%(2)
Portfolio turnover 5%(3) 22% 11% 54% 24% 9%(3)
CLASS B
----------------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/00 YEAR ENDED NOVEMBER 30, 3/1/95 TO
(UNAUDITED) 1999 1998 1997 1996 1/30/95
----------- ---- ---- ---- ---- --------
Net asset value, beginning of period $11.04 $12.19 $16.32 $13.10 $10.68 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.28 0.42(4)(6) 0.43(4)(5) 0.38(4)(5) 0.46(5) 0.36(4)(5)
Net realized and unrealized gain (loss) 1.48 (1.06) (3.15) 3.50 2.47 0.56
---- ----- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 1.76 (0.64) (2.72) 3.88 2.93 0.92
---- ----- ----- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.33) (0.51) (0.34) (0.41) (0.49) (0.24)
Dividends from net realized gains -- -- (1.07) (0.25) (0.02) --
---- ----- ----- ---- ---- ----
TOTAL DISTRIBUTIONS (0.33) (0.51) (1.41) (0.66) (0.51) (0.24)
---- ----- ----- ---- ---- ----
Change in net asset value 1.43 (1.15) (4.13) 3.22 2.42 0.68
---- ----- ----- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $12.47 $11.04) $12.19 $16.32 $13.10 $10.68
====== ====== ====== ====== ====== ======
Total return(1) 16.42%(3) (5.38)% (18.01)% 30.44% 28.25% 9.21%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $12,318 $12,241 $18,237 $23,091 $8,259 $2,239
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.05%(2) 2.05% 2.06% 2.05% 2.05% 2.05%(2)
Net investment income 4.94%(2) 3.54% 3.07% 2.55% 3.95% 5.03%(2)
Portfolio turnover 5%(3) 22% 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)If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.80%,
1.75%, 1.52%, 1.54%, 1.88% and 2.95% for the periods ended May 31, 2000, and
November 30, 1999, 1998, 1997, 1996 and 1995, respectively.
(6)If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.55%,
2.50%, 2.27%, 2.29%, 2.63% and 3.70% for the periods ended May 31, 2000, and
November 30, 1999, 1998, 1997, 1996 and 1995, respectively.
44 Phoenix Multi-Portfolio Fund
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
CLASS A
-------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/00 YEAR ENDED NOVEMBER 30, 9/5/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
----------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.69 $7.20 $12.84 $14.80 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.67(4) 1.23 1.32 1.38(4) 1.26(5) 0.25(4)(5)
Net realized and unrealized gain (loss) (0.26) 0.04 (4.22) 0.17 4.56 0.18
----- ---- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.41 1.63 (2.90) 1.55 5.82 0.43
----- ---- ----- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.51) (1.14) (1.00) (1.28) (1.20) (0.25)
Dividends from net realized gains -- -- (0.23) (2.23) -- --
Distributions in excess of net
realized gains -- -- (1.16) -- -- --
Return of capital -- -- (0.35) -- -- --
----- ---- ----- ---- ---- ----
TOTAL DISTRIBUTIONS (0.51) (1.14) (2.74) (3.51) (1.20) (0.25)
----- ---- ----- ---- ---- ----
Change in net asset value (0.10) 0.49 (5.64) (1.96) 4.62 0.18
----- ---- ----- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $7.59 $7.69 $7.20 $12.84 $14.80 $10.18
===== ===== ===== ====== ====== ======
Total return(1) 4.91%(3) 25.63% (27.20)% 11.91% 60.18% 4.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $35,992 $54,849 $41,725 $67,875 $29,661 $12,149
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.44%(2) 1.56% 1.43% 1.40% 1.50%(5) 1.50%(2)(5)
Net investment income 16.40%(2) 17.96% 13.74% 9.90% 10.41% 10.48%(2)
Portfolio turnover 177%(3) 326% 405% 614% 378% 38%(3)
CLASS B
--------------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/00 YEAR ENDED NOVEMBER 30, 9/5/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
----------- ---- ---- ---- ---- --------
Net asset value, beginning of period $7.60 $7.13 $12.77 $14.78 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.66(4) 1.17 1.23 1.26(4) 1.19 0.22(4)
Net realized and unrealized gain (loss) (0.29) 0.40 (4.18) 0.18 4.53 0.20
----- ---- ----- ---- ---- ----
TOTAL FROM INVESTMENT OPERATIONS 0.37 1.57 (2.95) 1.44 5.72 0.42
----- ---- ----- ---- ---- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.49) (1.10) (0.97) (1.22) (1.12) (0.24)
Dividends from net realized gains -- -- (0.23) (2.23) -- --
Distributions in excess of net
realized gains -- -- (1.16) -- -- --
Return of capital -- -- (0.33) -- -- --
----- ---- ----- ---- ---- ----
TOTAL DISTRIBUTIONS (0.49) (1.10) (2.69) (3.45) (1.12) (0.24)
----- ---- ----- ---- ---- ----
Change in net asset value (0.12) 0.47 (5.64) (2.01) 4.60 0.18
----- ---- ----- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $7.48 $7.60 $7.13 $12.77 $14.78 $10.18
===== ===== ===== ====== ====== ======
Total return(1) 4.58%(3) 24.52% (27.86)% 11.07% 58.94% 4.22%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $56,843 $58,453 $37,270 $38,673 $9,713 $596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.19%(2) 2.13% 2.20% 2.15% 2.25%(6) 2.25%(6)
Net investment income 16.38%(2) 17.04% 12.98% 9.14% 9.79% 10.29%(2)
Portfolio turnover 177%(3) 326% 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)If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.02% and
2.89% for the periods ended November 30, 1996 and 1995, respectively.
(6)If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.77% and
3.64% for the periods ended November 30, 1996 and 1995, respectively.
Phoenix Multi-Portfolio Fund 45
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
CLASS C
----------------------------------------
SIX MONTHS YEAR FROM
ENDED ENDED INCEPTION
5/31/00 NOVEMBER 30, 3/26/98 TO
(UNAUDITED) 1999 11/30/98
----------- ---- --------
<S> <C> <C> <C>
Net asset value, beginning of period $7.63 $ 7.17 $12.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.64(4) 1.17 0.85(4)
Net realized and unrealized gain (loss) (0.27) 0.39 (5.10)
----- ---- -----
TOTAL FROM INVESTMENT OPERATIONS 0.37 1.56 (4.25)
----- ---- -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.49) (1.10) (0.66)
Dividends from net realized gains -- -- --
Distributions in excess of net
realized gains -- -- --
Return of capital -- -- (0.17)
----- ---- -----
TOTAL DISTRIBUTIONS (0.49) (1.10) (0.83)
----- ---- -----
Change in net asset value (0.12) 0.46 (5.08)
----- ---- -----
NET ASSET VALUE, END OF PERIOD $7.51 $ 7.63 $ 7.17
===== ====== ======
Total return(1) 4.69%(3) 24.40% (35.33)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,273 $3,010 $1,205
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.19%(2) 2.31%(5) 2.29%(2)
Net investment income 16.24%(2) 16.47% 15.59%(2)
Portfolio turnover 177%(3) 326% 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.
Phoenix Multi-Portfolio Fund 46
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
CLASS A
-----------------------------------------------------------------------
SIX MONTHS
ENDED
5/31/00 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.29 $11.21 $11.17 $11.28 $11.40 $10.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.25 0.52 0.57 0.59 0.60 0.61
Net realized and unrealized gain (loss) (0.23) (0.92) 0.20 0.05 (0.12) 1.34
----- ----- ---- ---- ----- ----
TOTAL FROM INVESTMENT OPERATIONS 0.02 (0.40) 0.77 0.64 0.48 1.95
----- ----- ---- ---- ----- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.23) (0.44) (0.53) (0.59) (0.60) (0.61)
Dividends in excess of net
investment income -- (0.08) (0.11) -- -- --
Dividends from net realized gains -- -- (0.09) (0.16) -- (0.03)
----- ----- ---- ---- ----- ----
TOTAL DISTRIBUTIONS (0.23) (0.52) (0.73) (0.75) (0.60) (0.64)
----- ----- ---- ---- ----- ----
Change in net asset value (0.21) (0.92) 0.04 (0.11) (0.12) 1.31
----- ----- ---- ---- ----- ----
NET ASSET VALUE, END OF PERIOD $10.08 $10.29 $11.21 $11.17 $11.28 $11.40
====== ====== ====== ====== ====== ======
Total return(1) 0.24%(3) (3.66)% 5.75% 6.04% 4.30% 19.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $78,619 $88,770 $107,371 $122,763 $136,558 $147,821
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.17%(2) 1.01% 0.97% 0.96% 0.94% 0.97%
Net investment income 4.92%(2) 4.25% 4.77% 5.36% 5.42% 5.65%
Portfolio turnover 7%(3) 18% 14% 15% 27% 25%
CLASS B
---------------------------------------------------------------------
SIX MONTHS
ENDED
5/31/00 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
Net asset value, beginning of period $10.34 $11.25 $11.22 $11.32 $11.44 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.21 0.45 0.48 0.50 0.52 0.53
Net realized and unrealized gain (loss) (0.22) (0.93) 0.19 0.06 (0.12) 1.35
----- ----- ---- ---- ----- ----
TOTAL FROM INVESTMENT OPERATIONS (0.01) (0.48) 0.67 0.56 0.40 1.88
----- ----- ---- ---- ----- ----
LESS DISTRIBUTIONS
Dividends from net investment income (0.20) (0.37) (0.45) (0.50) (0.52) (0.53)
Dividends in excess of net
investment income -- (0.06) (0.10) -- -- --
Dividends from net realized gains -- -- (0.09) (0.16) -- (0.03)
----- ----- ---- ---- ----- ----
TOTAL DISTRIBUTIONS (0.20) (0.43) (0.64) (0.66) (0.52) (0.56)
----- ----- ---- ---- ----- ----
Change in net asset value (0.21) (0.91) 0.03 (0.10) (0.12) 1.32
----- ----- ---- ---- ----- ----
NET ASSET VALUE, END OF PERIOD $10.13 $10.34 $11.25 $11.22 $11.32 $11.44
====== ====== ====== ====== ====== ======
Total return(1) (0.12)%(3) (4.35)% 4.97% 5.13% 3.60% 19.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,854 $5,651 $7,001 $5,797 $4,762 $3,142
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.93%(2) 1.76% 1.69% 1.71% 1.69% 1.72%
Net investment income 4.15%(2) 3.51% 3.98% 4.60% 4.68% 4.90%
Portfolio turnover 7%(3) 18% 14% 15% 27% 25%
----------------------------
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
Phoenix Multi-Portfolio Fund 47
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The funds have filed a Statement of Additional Information about the funds,
dated November 30, 2000 with the Securities and Exchange Commission. The
Statement contains more detailed information about the funds. It is incorporated
into this prospectus by reference and is legally part of the prospectus. You may
obtain a free copy of the Statement:
> by writing to Phoenix Equity Planning Corporation, 56 Prospect Sreet,
P.O. Box 150480, Hartford, Connecticut 06115-0480 or
> by calling (800) 243-4361.
You may also obtain information about the funds from the Securities and Exchange
Commission:
> through its internet site (http://www.sec.gov),
> by visiting its Public Reference Room in Washington, DC,
> by writing to its Public Reference Section, Washington, DC 20549-0102 (a fee
may be charged), or
> by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling (202) 942-8090.
SHAREHOLDER REPORTS
The funds semiannually mail to shareholders detailed reports containing
information about each fund's investments. The funds' Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the funds' performance from December 1 through November
30. You may request a free copy of the funds' Annual and Semiannual Reports:
> by writing to Phoenix Equity Planning Corporation, 56 Prospect Sreet,
P.O. Box 150480, Hartford, Connecticut 06115-0480 or
> by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
SEC File Nos. 33-19423 and 811-5436 [recycle logo] Printed on recycled paper
using soybean ink
48 Phoenix Multi-Portfolio Fund
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 150480
Hartford CT 06115-0480
[LOGO] PHOENIX
INVESTMENT PARTNERS
For more information about
Phoenix mutual funds, please call
your financial representative or
contact us at 1-800-243-4361 or
www.phoenixinvestments.com
PXP467 (11/00)
<PAGE>
[Version A]
PHOENIX-ABERDEEN INTERNATIONAL FUND
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
November 30, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Multi-Portfolio Fund (the "Trust"), dated November 30, 2000, and should
be read in conjunction with it. The Trust's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 56 Prospect Street, P.O. Box
150480, Hartford, CT 06115-0408.
TABLE OF CONTENTS
PAGE
The Trust ................................................................ 1
Investment Restrictions .................................................. 1
Investment Techniques and Risks .......................................... 2
Performance Information .................................................. 15
Performance Comparisons .................................................. 16
Portfolio Turnover ....................................................... 17
Portfolio Transactions ................................................... 17
Services of the Advisers ................................................. 18
Determination of Net Asset Value ......................................... 20
How to Buy Shares ........................................................ 20
Alternative Purchase Arrangements ........................................ 21
Investor Account Services ................................................ 23
How to Redeem Shares ..................................................... 25
Tax Sheltered Retirement Plans ........................................... 26
Dividends, Distributions and Taxes ....................................... 27
The Distributor .......................................................... 29
Distribution Plans........................................................ 31
Management of the Trust................................................... 32
Additional Information ................................................... 39
Appendix.................................................................. 40
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
PXP468 (11/00)
<PAGE>
THE TRUST
Phoenix Multi-Portfolio Fund (the "Trust") is an open-end management
investment company which was organized under Massachusetts law in 1987 as a
Massachusetts business trust, and was reorganized as a Delaware business trust
in November 2000.
The Trust's Prospectus describes the investment objectives and strategies
that the Phoenix-Aberdeen International Fund (the "International Fund"), the
Phoenix-Duff & Phelps Real Estate Securities Fund (the "Real Estate Fund"), the
Phoenix-Goodwin Emerging Markets Bond Fund (the "Emerging Markets Fund") and the
Phoenix-Goodwin Tax-Exempt Bond Fund (the "Bond Fund"), (each, a "Fund" and,
together, the "Funds"), four of the Funds currently offered by the Trust, each
Fund will employ in seeking to achieve its investment objective. (A separate
prospectus and Statement of Additional Information apply to Phoenix-Seneca Tax
Sensitive Growth Fund.) Each Fund's investment objective is a fundamental policy
of that Fund and may not be changed without the vote of a majority of the
outstanding voting securities of that Fund. The following discussion supplements
the disclosure in the Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to the each of the Funds. Except as otherwise stated, these investment
restrictions are "fundamental" policies. A "fundamental" policy is defined in
the 1940 Act to mean that the restriction cannot be changed without the vote of
a "majority of the outstanding voting securities" of the Fund. A majority of the
outstanding voting securities is defined in the 1940 Act as the lesser of (a)
67% or more of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (b) more than 50% of the outstanding voting securities.
The Fund may not:
(1) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would, at the
time, cause more than 5% of the Fund's total assets taken at market value to be
invested in the securities of such issuer; or (b) such purchase would, at the
time, result in more than 10% of the outstanding voting securities of such
issuer being held by the Fund. This restriction does not apply to the Real
Estate Fund and Emerging Markets Fund.
(2) Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government, its agencies or instrumentalities), except the
Real Estate Fund may concentrate its assets in the real estate industry and the
Bond Fund may invest more than 25% of its assets in a particular segment of the
municipal securities market.
(3) Borrow money, except (i) in amounts not to exceed one third of the
value of the Fund's total assets (including the amount borrowed) from banks, and
(ii) up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not be deemed
to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the Fund may
be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the Fund
may purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied to the
value of a financial index or a financial instrument or other asset (including,
but not limited to, securities indexes, interest rates, securities, currencies
and physical commodities).
(8) Make loans, except that the Fund may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv)
participate in an interfund lending program with other registered investment
companies.
1
<PAGE>
If any percentage restriction described above for the Fund is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Fund's assets will not constitute a
violation of the restriction.
INVESTMENT TECHNIQUES AND RISKS
The Funds may utilize the following practices or techniques in pursuing their
investment objectives.
DEBT SECURITIES
The Real Estate Fund may invest in debt securities (which include for
purposes of this investment policy convertible debt securities which the Adviser
believes have attractive equity characteristics). The Real Estate Fund may
invest in debt securities rated BBB or better by Standard & Poor's Corporation
("S&P") or Baa or better by Moody's Investor Service, Inc. ("Moody's") or, if
not rated, are judged to be of comparable quality as determined by the Adviser.
In choosing debt securities for purchase by the Fund, the Adviser will employ
the same analytical and valuation techniques utilized in managing the equity
portion of the Real Estate Fund's holdings (see "Investment Advisory and Other
Services") and will invest in debt securities only of companies that satisfy the
Adviser's investment criteria.
The value of the Real Estate Fund's investments in debt securities will
change as interest rates fluctuate. When interest rates decline, the values of
such securities generally can be expected to increase and when interest rates
rise, the values of such securities can generally be expected to decrease. The
lower-rated and comparable unrated debt securities described above are subject
to greater risks of loss of income and principal than are higher-rated fixed
income securities. The market value of lower- rated securities generally tends
to reflect the market's perception of the creditworthiness of the issuer and
short-term market developments to a greater extent than is the case with more
highly rated securities, which reflect primarily functions in general levels of
interest rates.
EMERGING MARKET SECURITIES
The Emerging Markets Fund may invest in countries or regions with relatively
low gross national product per capita compared to the world's major economies,
and in countries or regions with the potential for rapid economic growth
(emerging markets). Emerging markets will include any country: (i) having an
"emerging stock market" as defined by the International Finance Corporation;
(ii) with low-to-middle-income economies according to the International Bank for
Reconstruction and Development (the "World Bank"); (iii) listed in World Bank
publications as developing; or (iv) determined by the Adviser to be an emerging
market as defined above. The Emerging Markets Fund may also invest in securities
of: (i) companies the principal securities trading market for which is an
emerging market country; (ii) companies organized under the laws of, and with a
principal office in, an emerging market country, or (iii) companies whose
principal activities are located in emerging market countries.
The risks of investing in foreign securities may be intensified in the case
of investments in emerging markets. Securities of many issuers in emerging
markets may be less liquid and more volatile than securities of comparable
domestic issuers. Emerging markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of the Funds are uninvested and
no return is earned thereon. The inability of the Funds to make intended
security purchases due to settlement problems could cause the Funds to miss
attractive investment opportunities. Inability to dispose of portfolio
securities due to settlement problems could result either in losses to the Funds
due to subsequent declines in value of portfolio securities or, if the Funds
have entered into a contract to sell the security, in possible liability to the
purchaser. Securities prices in emerging markets can be significantly more
volatile than in the more developed nations of the world, reflecting the greater
uncertainties of investing in less established markets and economies. In
particular, countries with emerging markets may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions of repatriation of assets, and may have less
protection of property rights than more developed countries. The economies of
countries with emerging markets may be predominantly based on only a few
industries, may be highly vulnerable to changes in local or global trade
conditions, and may suffer from extreme and volatile debt burdens or inflation
rates. Local securities markets may trade a small number of securities and may
be unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible at
times. Securities of issuers located in countries with emerging markets may have
limited marketability and may be subject to more abrupt or erratic price
movements.
Certain emerging markets may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if a deterioration occurs in an
emerging market's balance of payments or for other reasons, a country could
impose temporary restrictions on foreign capital remittances. The Funds could be
adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the application
to the Funds of any restrictions on investments.
2
<PAGE>
Investments in certain foreign emerging market debt obligations may be
restricted or controlled to varying degrees. These restrictions or controls may
at times preclude investment in certain foreign emerging market debt obligations
and increase the expenses of the Funds.
ADDITIONAL RISK FACTORS. As a result of its investments in foreign
securities, the Emerging Markets Fund may receive interest or dividend payments,
or the proceeds of the sale or redemption of such securities, in the foreign
currencies in which such securities are denominated. In that event, the Fund may
convert such currencies into dollars at the then current exchange rate. Under
certain circumstances, however, such as where the Adviser believes that the
applicable rate is unfavorable at the time the currencies are received or the
Adviser anticipates, for any other reason, that the exchange rate will improve,
the Fund may hold such currencies for an indefinite period of time.
In addition, the Fund may be required to receive delivery of the foreign
currency underlying forward foreign currency contracts it has entered into. This
could occur, for example, if an option written by the Fund is exercised or the
Fund is unable to close out a forward contract. The Fund may hold foreign
currency in anticipation of purchasing foreign securities. The Fund may also
elect to take delivery of the currencies' underlying options or forward
contracts if, in the judgment of the Adviser, it is in the best interest of the
Fund to do so. In such instances as well, the Fund may convert the foreign
currencies to dollars at the then current exchange rate, or may hold such
currencies for an indefinite period of time.
While the holding of currencies will permit the Fund to take advantage of
favorable movements in the applicable exchange rate, it also exposes the Fund to
risk of loss if such rates move in a direction adverse to the Fund's position.
Such losses could reduce any profits or increase any losses sustained by the
Fund from the sale or redemption of securities, and could reduce the dollar
value of interest or dividend payments received. In addition, the holding of
currencies could adversely affect the Fund's profit or loss on currency options
or forward contracts, as well as its hedging strategies.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS
The Bond, International and Emerging Markets Funds may use financial futures
contracts and related options to hedge against changes in the market value of
their portfolio securities or securities which they intend to purchase. The
International and Emerging Markets Funds may use foreign currency futures
contracts to hedge against changes in the value of foreign currencies. (See
"Foreign Currency Transactions" below.) Hedging is accomplished when an investor
takes a position in the futures market opposite to the investor's cash market
position. There are two types of hedges--long (or buying) and short (or selling)
hedges. Historically, prices in the futures market have tended to move in
concert with (although in inverse relation to) cash market prices, and prices in
the futures market have maintained a fairly predictable relationship to prices
in the cash market. Thus, a decline in the market value of securities or the
value of foreign currencies may be protected against to a considerable extent by
gains realized on futures contracts sales. Similarly, it is possible to protect
against an increase in the market price of securities which the Fund utilizing
this investment technique may wish to purchase in the future by purchasing
futures contracts.
The Bond, International and Emerging Markets Funds may purchase or sell any
financial futures contracts which are traded on a recognized exchange or board
of trade and may purchase exchange- or board-traded put and call options on
financial futures contracts as a hedge against anticipated changes in the market
value of its portfolio securities or securities which it intends to purchase.
Financial futures contracts consist of interest rate futures contracts,
securities index futures contracts and foreign currency futures contracts. A
public market presently exists in interest rate futures contracts covering
long-term U.S. Treasury bonds, U.S. Treasury notes, three-month U.S. Treasury
bills and GNMA certificates. Securities index futures contracts are currently
traded with respect to the Standard & Poor's 500 Composite Stock Price Index and
such other broad-based stock market indices as the New York Stock Exchange
Composite Stock Index and the Value Line Composite Stock Price Index. A clearing
corporation associated with the exchange or board of trade on which a financial
futures contract trades assumes responsibility for the completion of
transactions and also guarantees that open futures contracts will be performed.
In contrast to the situation in which a Fund purchases or sells a security,
no security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract (although an obligation to deliver or receive the
underlying security in the future is created by such a contract). Initially,
when it enters into a financial futures contract, a Fund utilizing this
investment technique will be required to deposit in a pledged account with the
Trust's custodian bank with respect to such Fund an amount of cash or U.S.
Treasury bills. This amount is known as an initial margin and is in the nature
of a performance bond or good faith deposit on the contract. The current initial
margin deposit required per contract is approximately 5% of the contract amount.
Brokers may establish deposit requirements higher than this minimum. However,
subsequent payments, called variation margin, will be made to and from the
account on a daily basis as the price of the futures contract fluctuates. This
process is known as marking to market.
The writer of an option on a futures contract is required to deposit a margin
balance pursuant to requirements similar to those applicable to futures
contracts. Upon exercise of an option on a futures contract, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
3
<PAGE>
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
The Funds utilizing this investment technique will pay commissions on
financial futures contracts and related options transactions. These commissions
may be higher than those which would apply to purchases and sales of securities
directly, and will be in addition to those paid for direct purchases and sales
of securities.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS. The Funds utilizing
this investment technique may not engage in transactions in financial futures
contracts or related options for speculative purposes but only as a hedge
against anticipated changes in the market value of portfolio securities or
securities which it intends to purchase or foreign currencies. At the time of
purchase of a futures contract or a call option on a futures contract, any
asset, including equity securities and non-investment-grade debt so long as the
asset is liquid, unencumbered and marked to market daily equal to the market
value of the futures contract minus the Fund's initial margin deposit with
respect thereto will be deposited in a pledged account with the Trust's
custodian bank with respect to such Fund to collateralize fully the position and
thereby ensure that it is not leveraged.
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS. Positions in futures
contracts and related options may be closed out on an exchange if the exchange
provides a secondary market for such contracts or options. A Fund utilizing this
investment technique will enter into a futures or futures related option
position only if there appears to be a liquid secondary market. However, there
can be no assurance that a liquid secondary market will exist for any particular
option or futures contract at any specific time. Thus, it may not be possible to
close out a futures or related option position. In the case of a futures
position, in the event of adverse price movements the Fund would continue to be
required to make daily margin payments. In this situation, if the Fund has
insufficient cash to meet daily margin requirements it may have to sell
portfolio securities to meet its margin obligations at a time when it may be
disadvantageous to do so. In addition, the Fund may be required to take or make
delivery of the securities underlying the futures contracts it holds. The
inability to close out futures positions also could have an adverse impact on
the Fund's ability to hedge its positions effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also limit a hedger's opportunity to benefit fully from
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause a Fund to incur additional brokerage
commissions and may cause an increase in a Fund's turnover rate.
The successful use of futures contracts and related options depends on the
ability of the Adviser to forecast correctly the direction and extent of market
movements within a given time frame. To the extent market prices remain stable
during the period a futures contract or option is held by a Fund or such prices
move in a direction opposite to that anticipated, the Fund may realize a loss on
the hedging transaction which is not offset by an increase in the value of its
portfolio securities. As a result, the Fund's total return for the period may be
less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by a Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities or currencies which are being hedged. If the price of
the futures contract moves more or less than the price of the securities or
currency being hedged, the Fund will experience a gain or loss which will not be
completely offset by movements in the price of the securities or currency. It is
possible that, where a Fund has sold futures contracts to hedge against decline
in the market, the market may advance and the value of securities held in the
Fund or the currencies in which its foreign securities are denominated may
decline. If this occurred, the Fund would lose money on the futures contract and
would also experience a decline in value in its portfolio securities. Where
futures are purchased to hedge against a possible increase in the prices of
securities or foreign currencies before the Fund is able to invest its cash (or
cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline; if the Fund then determines not to invest
in securities (or options) at that time because of concern as to possible
further market decline or for other reasons, the Fund will realize a loss on the
futures that would not be offset by a reduction in the price of the securities
purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such cases,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities or
currencies rather than to engage in closing transactions because such action
would reduce the liquidity of the futures market. In addition, because, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the underlying securities market,
increased participation by speculators in the futures market could cause
temporary price distortions. Because of the possibility of price distortions in
the
4
<PAGE>
futures market and of the imperfect correlation between movements in the prices
of securities or foreign currencies and movements in the prices of futures
contracts, a correct forecast of market trends may still not result in a
successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for a Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund (i.e., the loss
of the premium paid) while the purchase or sale of the futures contract would
not have resulted in a loss, such as when there is no movement in the price of
the underlying securities.
FOREIGN CURRENCY TRANSACTIONS
The International and Emerging Markets Funds (each a "Foreign Currency Fund")
each may engage in foreign currency transactions. The following is a description
of these transactions.
Forward Foreign Currency Exchange Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days ("term") from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded directly between currency traders (usually
large commercial banks) and their customers.
No Fund will enter into such forward contracts or maintain a net exposure in
such contracts where it would be obligated to deliver an amount of foreign
currency in excess of the value of its portfolio securities and other assets
denominated in that currency. The Adviser believes that it is important to have
the flexibility to enter into such forward contracts when it determines that to
do so is in the best interests of a Fund. The Trust's custodian banks will
segregate any asset, including equity securities and non-investment-grade debt
so long as the asset is liquid, unencumbered and marked to market daily in an
amount not less than the value of a Foreign Currency Fund's total assets
committed to forward foreign currency exchange contracts entered into for the
purchase of a foreign currency. If the value of the securities segregated
declines, additional cash or securities will be added so that the segregated
amount is not less than the amount of the Foreign Currency Fund's commitments
with respect to such contracts. Generally, the Foreign Currency Funds do not
enter into forward contracts with terms longer than one year.
Foreign Currency Options. A foreign currency option provides the option buyer
with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect a Foreign Currency Fund against an adverse
movement in the value of a foreign currency, it does not limit the gain which
might result from a favorable movement in the value of such currency. For
example, if a Foreign Currency Fund were holding securities denominated in an
appreciating foreign currency and had purchased a foreign currency put to hedge
against a decline in the value of the currency, it would not have to exercise
its put. Similarly, if a Foreign Currency Fund had entered into a contract to
purchase a security denominated in a foreign currency and had purchased a
foreign currency call to hedge against a rise in the value of the currency but
instead the currency had depreciated in value between the date of purchase and
the settlement date, the Foreign Currency Fund would not have to exercise its
call but could acquire in the spot market the amount of foreign currency needed
for settlement.
Foreign Currency Futures Transactions. Each Foreign Currency Fund may use
foreign currency futures contracts and options on such futures contracts.
Through the purchase or sale of such contracts, a Foreign Currency Fund may be
able to achieve many of the same objectives attainable through the use of
foreign currency forward contracts, but more effectively and possibly at a lower
cost.
Unlike forward foreign currency exchange contracts, foreign currency futures
contracts and options on foreign currency futures contracts are standardized as
to amount and delivery period and are traded on boards of trade and commodities
exchanges. It is anticipated that such contracts may provide greater liquidity
and lower cost than forward foreign currency exchange contracts.
Regulatory Restrictions. To the extent required to comply with Securities and
Exchange Commission Release No. IC-10666, when purchasing a futures contract or
writing a put option, each Foreign Currency Fund will maintain in a pledged
account any asset, including equity securities and non-investment-grade debt so
long as the asset is liquid, unencumbered and marked to market daily equal to
the value of such contracts.
To the extent required to comply with Commodity Futures Trading Commission
Regulation 4.5 and thereby avoid "commodity pool operator" status, a Foreign
Currency Fund will not enter into a futures contract or purchase an option
thereon if immediately thereafter the initial margin deposits for futures
contracts (including foreign currency and all other futures contracts) held by
the Foreign Currency Fund plus premiums paid by it for open options on futures
would exceed 5% of the Foreign Currency Fund's total assets. Neither Foreign
Currency Fund will engage in transactions in financial futures contracts or
options thereon for speculation,
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but only to attempt to hedge against changes in market conditions affecting the
values of securities which the Fund holds or intends to purchase. When futures
contracts or options thereon are purchased to protect against a price increase
on securities intended to be purchased later, it is anticipated that at least
75% of such intended purchases will be completed. When other futures contracts
or options thereon are purchased, the underlying value of such contracts will at
all times not exceed the sum of: (1) accrued profit on such contracts held by
the broker; (2) cash or high quality money market instruments set aside in an
identifiable manner; and (3) cash proceeds from investments due in 30 days.
FOREIGN SECURITIES
The Funds may invest in U.S. dollar- or foreign currency-denominated
corporate debt securities of foreign issuers (including preferred or preference
stock), certain foreign bank obligations and U.S. dollar- or foreign
currency-denominated obligations of foreign governments or their subdivisions,
agencies and instrumentalities, international agencies and supranational
entities and may invest directly in common stocks issued by foreign companies or
in securities represented by ADRs.
Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations (which may include suspension of the
ability to transfer currency from a country), political instability which may
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. In addition, foreign securities and dividends
interest payable on those securities may be subject to foreign taxes, including
taxes withheld from payments on those securities. Foreign securities often trade
with less frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Changes in foreign exchange rates will affect
the value of those securities which are denominated or quoted in currencies
other than the U.S. dollar.
ADRs are dollar-denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign issuer, and
are publicly traded on exchanges or over-the-counter in the United States. ADRs
may be issued as sponsored or unsponsored programs. In sponsored programs, an
issuer has made arrangements to have its securities trade in the form of ADRs.
In unsponsored programs, the issuer may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated in the
creation of a sponsored program.
HIGH YIELD - HIGH RISK SECURITIES
The International Fund may invest in bonds considered to be less than
investment-grade, commonly known as "junk" bonds. The Emerging Markets Fund may
invest up to 100% of its total assets in these bonds.
While management will seek to minimize risk through diversification and
continual evaluation of current developments in interest rates and economic
conditions, the market prices of lower-rated securities generally fluctuate more
than those of higher rated securities. Using credit ratings helps to evaluate
the safety of principal and interest payments but does not assess market risk.
Fluctuations in the market value of portfolio securities subsequent to
acquisition by the Funds will not normally affect cash income from such
securities but will be reflected in the Fund's net asset value. Additionally,
with lower-rated securities, there is a greater possibility that an adverse
change in the financial condition of the issuer, particularly a highly-leveraged
issuer, may affect its ability to make payments of income and principal and
increase the expenses of the Fund seeking recovery from the issuer. Also, to the
extent that the Fund invests in securities in the lower rating categories, the
achievement of its goals will be more dependent on management's ability than
would be the case if it were only investing in securities in the higher rating
categories. Lower-rated securities may be thinly traded and therefore harder to
value and more susceptible to adverse publicity concerning the issuer.
LOAN PARTICIPATIONS AND ASSIGNMENTS
The Emerging Markets Fund may also invest in fixed-rate or floating-rate
loans arranged through private negotiations between an issuer of emerging market
debt instruments and one or more financial institutions ("lenders"). Generally,
investments in loans would be in the form of loan participations and assignments
of loan portfolios from third parties.
When investing in a loan participation, the Funds will typically have the
right to receive payments from the lender to the extent that the lender receives
payments from the borrower. In addition, the Funds will be able to enforce their
rights through the lender, and not directly against the borrower. As a result,
in a loan participation the Funds assume credit risk with respect to both the
borrower and the lender.
When the Funds purchase loan assignments from lenders, they will acquire
direct rights against the borrower, but these rights and the Funds' obligations
may differ from, and be more limited than, those held by the assigning lender.
Loan participations and assignments may be illiquid.
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MUNICIPAL SECURITIES
As used in the Prospectus and this Statement of Additional Information, the
term "municipal securities" means obligations, including municipal bonds and
notes and tax-exempt commercial paper, issued by or on behalf of states,
territories and possessions of the United States, the District of Columbia and
their political subdivisions, agencies and instrumentalities, the interest from
which is, in the opinion of counsel to the issuers of such securities, exempt
from federal income tax. To the extent that an investment in municipal
securities does not run counter to any of the investment policies of the Bond
Fund or any of the investment restrictions to which the Bond Fund is subject,
the Bond Fund may invest in any combination of the various types of municipal
securities described below which, in the judgment of Phoenix Investment Counsel,
Inc. ("PIC"), the investment adviser to the Bond and International Funds will
contribute to the attainment of the Bond Fund's investment objective. Such
combination of municipal securities may vary from time to time. The two
principal classes of municipal securities are municipal bonds and municipal
notes.
Bond Anticipation Notes. Bond anticipation notes are issued to provide
interim financing until long-term financing can be arranged. In most cases, the
long-term bonds then provide the money for the repayment of the notes.
Construction Loan Notes. Construction loan notes are sold to provide
construction financing. After successful completion and acceptance, many
projects receive permanent financing through the Federal Housing Administration
under "Fannie Mae" (the Federal National Mortgage Association) or "Ginnie Mae"
(the Government National Mortgage Association).
General Obligation Bonds. Issuers of general obligation bonds include states,
counties, cities, towns, and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects, including
construction or improvement of schools, highways and roads, and water and sewer
systems. The basic security behind general obligation bonds is the issuer's
pledge of its full faith and credit and taxing power for the payment of
principal and interest. The taxes that can be levied for the payment of debt
service may be limited or unlimited as to the rate or amount of special
assessments.
Industrial Development Bonds. Industrial development bonds, which are
considered municipal bonds if the interest paid is exempt from federal income
tax, are issued by or on behalf of public authorities to raise money to finance
various privately operated facilities for business and manufacturing, housing,
sports arenas and pollution control. These bonds are also used to finance public
facilities such as airports, mass transit systems, ports and parking. The
payment of the principal and interest on such bonds is dependent solely on the
ability of the facility's user to meet its financial obligations and the pledge,
if any, of real and personal property so financed as security for such payment.
Municipal Bonds. Municipal bonds, which meet longer term capital needs and
generally have maturities of more than one year when issued, have two principal
classifications: general obligation bonds and revenue bonds. Another type of
municipal bond is referred to as an industrial development bond. These three are
discussed below.
Municipal Notes. Municipal notes generally are used to provide for
short-term working capital needs and generally have maturities of one year or
less. Municipal notes include:
Revenue Anticipation Notes. Revenue anticipation notes are issued in
expectation of receipt of other types of revenue, such as federal revenues
available under federal revenue sharing programs.
Revenue Bonds. The principal security for a revenue bond is generally the net
revenues derived from a particular facility, group of facilities, or, in some
cases, the proceeds of a special excise or other specific revenue source.
Revenue bonds are issued to finance a wide variety of capital projects
including: electric, gas, water and sewer systems; highways, bridges, and
tunnels; port and airport facilities; colleges and universities; and hospitals.
Although the principal security behind these bonds may vary, many provide
additional security in the form of a debt service reserve fund whose money may
be used to make principal and interest payments on the issuer's obligations.
Housing finance authorities have a wide range of security, including partially
or fully insured mortgages, rent subsidized and/or collateralized mortgages,
and/or the net revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability (without obligation)
to make up deficiencies in the debt service reserve fund.
Tax Anticipation Notes. Tax anticipation notes are issued to finance working
capital needs of municipalities. Generally, they are issued in anticipation of
various seasonal tax revenue, such as income, sales, use and business taxes, and
are payable from these specific future taxes.
Tax-Exempt Commercial Paper. Tax-exempt commercial paper is a short-term
obligation with a stated maturity of 365 days or less. It is issued by state and
local governments or their agencies to finance seasonal working capital needs or
as short-term financing in anticipation of longer-term financing.
In addition, other types of municipal securities similar to the
above-described municipal bonds and municipal notes are, or may become,
available. For the purpose of the Trust's investment restrictions set forth in
this Statement of Additional Information, the identification of the "issuer" of
a municipal security which is not a general obligation bond is made by PIC on
the basis of the characteristics of the obligation, the most significant of
which is the source of funds for the payment of principal and interest on such
security.
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RISKS RELATING TO MUNICIPAL SECURITIES. Yields on municipal securities are
dependent on a variety of factors, including the general conditions of the money
market and the municipal bond market, the size of a particular offering, the
maturity of the obligations and the rating of the issue. Municipal securities
with longer maturities tend to produce higher yields and are generally subject
to potentially greater capital appreciation and depreciation than obligations
with shorter maturities and lower yields. The market prices of municipal
securities usually vary, depending upon available yields. An increase in
interest rates will generally reduce the value of portfolio investments, and a
decline in interest rates will generally increase the value of portfolio
investments. The ability of the Fund to achieve its investment objective is also
dependent on the continuing ability of the issuers of municipal securities in
which the Fund invests to meet their obligations for the payment of interest and
principal when due. The ratings of Moody's and Standard & Poor's represent their
opinions as to the quality of municipal securities which they undertake to rate.
Ratings are not absolute standards of quality; consequently, municipal
securities with the same maturity, coupon, and rating may have different yields.
There are variations in municipal securities, both within a particular
classification and between classifications, depending on numerous factors. It
should also be pointed out that, unlike other types of investments, municipal
securities have traditionally not been subject to regulation by, or registration
with, the Securities and Exchange Commission (the "Commission"), although there
have been proposals which would provide for such regulation in the future.
The federal bankruptcy statutes relating to the debts of political
subdivisions and authorities of states of the United States provide that, in
certain circumstances, such subdivisions or authorities may be authorized to
initiate bankruptcy proceedings without prior notice to or consent of creditors,
which proceedings could result in material and adverse changes in the rights of
holders of their obligations.
Lawsuits challenging the validity under state constitutions of present
systems of financing public education have been initiated or adjusted in a
number of states, and legislation has been introduced to effect changes in
public school financing in some states.
In other instances there have been lawsuits challenging the issuance of
pollution control revenue bonds or the validity of their issuance under state or
federal law which could ultimately affect the validity of those municipal
securities or the tax-free nature of the interest thereon.
OPTIONS ON SECURITIES AND SECURITIES INDICES
The Bond, International and Emerging Markets Funds may engage in option
transactions.
Call options on securities and securities indices written by the Funds
normally will have expiration dates between three and nine months from the date
written. The exercise price of a call option written by a Fund utilizing this
investment technique may be below, equal to or above the current market value of
the underlying security or securities index at the time the option is written.
During the option period, a Fund utilizing this investment technique may be
assigned an exercise notice by the broker-dealer through which the call option
was sold, requiring the Fund to deliver the underlying security (or cash in the
case of securities index calls) against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at such
earlier time as the Fund effects a closing purchase transaction. A closing
purchase transaction cannot be effected with respect to an option once the Fund
has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/ Silver Index.
The International Fund may write call options and purchase call and put options
on these and any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by a Fund, to prevent an underlying
security from being called, or to enable the Fund to write another call option
with either a different exercise price or expiration date or both. A Fund may
realize a net gain or loss from a closing purchase transaction, depending upon
whether the amount of the premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. If a call option
written by a Fund expires unexercised, the Fund will realize a gain in the
amount of the premium on the option less the commission paid.
The option activities of a Fund may increase its portfolio turnover rate and
the amount of brokerage commissions paid. A Fund will pay a commission each time
it purchases or sells a security in connection with the exercise of an option.
These commissions may be higher than those which would apply to purchases and
sales of securities directly.
OVER-THE-COUNTER OPTIONS. The International and Emerging Markets Funds may
deal in over-the-counter options ("OTC options"). PIC understands the position
of the staff of the Commission to be that purchased OTC options and the assets
used in
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"cover" for written OTC options are illiquid securities. The Funds have adopted
procedures for engaging in OTC options for the purpose of reducing any potential
adverse effect of such transactions upon the liquidity of a Fund. A brief
description of such procedures is set forth below.
The International and Emerging Markets Funds will engage in OTC options
transactions only with dealers that meet certain credit and other criteria. The
Funds and PIC believe that the approved dealers present minimal credit risks to
the Funds and, therefore, should be able to enter into closing transactions if
necessary. A Fund currently will not engage in OTC options transactions if the
amount invested by the Fund in OTC options, plus a "liquidity charge" related to
OTC options written by the Fund (as described below) plus the amount invested by
the Fund in other illiquid securities, would exceed 10% of the Fund's total
assets. The "liquidity charge" referred to above is computed as described below.
The Funds anticipate entering into agreements with dealers to which the Funds
sell OTC options. Under these agreements the Funds would have the absolute right
to repurchase the OTC options from the dealer at any time at a price no greater
than a price established under the agreements (the "Repurchase Price"). The
"liquidity charge" referred to above for a specific OTC option transaction will
be the Repurchase Price related to the OTC option less the intrinsic value of
the OTC option. The intrinsic value of an OTC call option for such purposes will
be the amount by which the current market value of the underlying security
exceeds the exercise price. In the case of an OTC put option, intrinsic value
will be the amount by which the exercise price exceeds the current market value
of the underlying security. If there is no such agreement requiring a dealer to
allow the Funds to repurchase a specific OTC option written by the Funds, the
"liquidity charge" will be the current market value of the assets serving as
"cover" for such OTC option.
LIMITATIONS ON OPTIONS ON SECURITIES AND SECURITIES INDICES. The Bond,
International and Emerging Markets Funds may write call options only if they are
covered and remain covered for as long as the Fund is obligated as a writer.
Thus, if a Fund utilizing this investment technique writes a call option on an
individual security, the Fund must own the underlying security or other
securities that are acceptable for a pledged account at all times during the
option period. The Funds will write call options on indices only to hedge in an
economically appropriate way portfolio securities which are not otherwise hedged
with options or financial futures contracts. Call options on securities indices
written by a Fund will be "covered" by identifying the specific portfolio
securities being hedged.
To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in a pledged account in accordance with
clearing corporation and exchange rules.
In the case of an index call option written by a Fund, the Fund will be
required to deposit qualified securities. A "qualified security" is a security
against which the Fund has not written a call option and which has not been
hedged by the Fund by the sale of a financial futures contract. If at the close
of business on any day the market value of the qualified securities falls below
100% of the current index value times the multiplier times the number of
contracts, the Fund will deposit an amount of cash, U.S. Government Securities
or other liquid high quality debt obligations equal in value to the difference.
In addition, when the Fund writes a call on an index which is "in-the-money" at
the time the call is written, the Fund will pledge with the Trust's custodian
bank cash, U.S. Government securities or other liquid high quality debt
obligations equal in value to the amount by which the call is "in-the-money"
times the multiplier times the number of contracts. Any amount otherwise pledged
may be applied to the Fund's other obligations to pledge assets in the event
that the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts.
A Fund may sell a call option or a put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security. Any such sale of a call option or a put
option would result in a net gain or loss, depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid.
RISKS RELATING TO OPTIONS ON SECURITIES. During the option period, the writer
of a call option has, in return for the premium received on the option, given up
the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk of
loss should the price of the underlying security decline. The writer has no
control over the time within the option period when it may be required to
fulfill its obligation as a writer of the option.
The risk of purchasing a call option or a put option is that the Fund
utilizing this investment technique may lose the premium it paid plus
transaction costs, if the Fund does not exercise the option and is unable to
close out the position prior to expiration of the option.
An option position may be closed out on an exchange only if the exchange
provides a secondary market for an option of the same series. Although the Funds
utilizing this investment technique will write and purchase options only when
PIC believes that a liquid secondary market will exist for options of the same
series, there can be no assurance that a liquid secondary market will exist for
a particular option at a particular time and that any Fund, if it so desires,
can close out its position by effecting a closing transaction. If the writer of
a covered call option is unable to effect a closing purchase transaction, it
cannot sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call writer may not be able to sell the
underlying security at a time when it might otherwise be advantageous to do so.
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Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options in
general or of particular options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. PIC believes that the position limits established by
the exchanges will not have any adverse impact upon the Funds.
RISKS OF OPTIONS ON SECURITIES INDICES. Because the value of an index option
depends upon movements in the level of the index rather than movements in the
price of a particular security, whether a Fund utilizing this investment
technique will realize a gain or loss on the purchase or sale of an option on an
index depends upon movements in the level of prices in the market generally or
in an industry or market segment (depending on the index option in question)
rather than upon movements in the price of an individual security. Accordingly,
successful use by a Fund of options on indices will be subject to PIC's ability
to predict correctly movements in the direction of the market generally or in
the direction of a particular industry. This requires different skills and
techniques than predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, a Fund utilizing this
investment technique would not be able to close out options which it had written
or purchased and, if restrictions on exercise were imposed, might be unable to
exercise an option it purchased, which would result in substantial losses to the
Fund. However, it is the Trust's policy to write or purchase options only on
indices which include a sufficient number of securities so that the likelihood
of a trading halt in the index is minimized.
Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Funds will write call options only on indices which meet the
interim described above.
Price movements in securities held by a Fund utilizing this investment
technique will not correlate perfectly with movements in the level of the index
and, therefore, the Fund bears the risk that the price of the securities held by
the Fund might not increase as much as the level of the index. In this event,
the Fund would bear a loss on the call which would not be completely offset by
movements in the prices of the securities held by the Fund. It is also possible
that the index might rise when the value of the securities held by the Fund does
not. If this occurred, the Fund would experience a loss on the call which would
not be offset by an increase in the value of its portfolio and might also
experience a loss in the market value of its portfolio securities.
Unless a Fund utilizing this investment technique has other liquid assets
which are sufficient to satisfy the exercise of a call on an index, the Fund
will be required to liquidate securities in order to satisfy the exercise.
Because an exercise must be settled within hours after receiving the notice of
exercise, if the Fund fails to anticipate an exercise, it may have to borrow
from a bank (in an amount not exceeding 10% of the Fund's total assets) pending
settlement of the sale of securities in its portfolio and pay interest on such
borrowing.
When a Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell its securities. As with options
on its securities, the Fund will not learn that a call has been exercised until
the day following the exercise date but, unlike a call on a security where the
Fund would be able to deliver the underlying security in settlement, the Fund
may have to sell some of its securities in order to make settlement in cash, and
the price of such securities may decline before they can be sold.
If a Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" the Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although the Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
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RATINGS
If the rating of a security purchased by a Fund is subsequently reduced below
the minimum rating required for purchase or a security purchased by the Fund
ceases to be rated, neither event will require the sale of the security.
However, the Adviser, as applicable, will consider any such event in determining
whether the Fund should continue to hold the security. To the extent that
ratings established by Moody's or Standard & Poor's may change as a result of
changes in such organizations or their rating systems, the Funds will invest in
securities which are deemed by the Fund's adviser to be of comparable quality to
securities whose current ratings render them eligible for purchase by the Fund.
REAL ESTATE INVESTMENT TRUSTS
As described in the Prospectus, the Real Estate Fund intends under normal
conditions to invest in real estate investment trusts ("REITs"). REITs pool
investors' funds for investment primarily in income-producing commercial real
estate or real estate-related loans. A REIT is not taxed on income distributed
to shareholders if it complies with several requirements relating to its
organization, ownership, assets, and income and a requirement that it distribute
to its shareholders at least 95% of its taxable income (other than net capital
gains) for each taxable year.
REITs can generally be classified as follows:
--Equity REITs, which invest the majority of their assets directly in real
property and derive their income primarily from rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in value.
--Mortgage REITs, which invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments.
--Hybrid REITs, which combine the characteristics of both equity REITs and
mortgage REITs.
REITs are like closed-end investment companies in that they are essentially
holding companies which rely on professional managers to supervise their
investments. A shareholder in the Real Estate Fund should realize that by
investing in REITs indirectly through the Fund, he will bear not only his
proportionate share of the expenses of the Fund, but also, indirectly, similar
expenses of underlying REITs.
RISKS OF INVESTMENT IN REAL ESTATE SECURITIES. Selecting REITs requires an
evaluation of the merits of each type of asset a particular REIT owns, as well
as regional and local economics. Due to the proliferation of REITs in recent
years and the relative lack of sophistication of certain REIT managers, the
quality of REIT assets has varied significantly. The Real Estate Fund will not
invest in real estate directly, but only in securities issued by real estate
companies. However, the Fund may be subject to risks similar to those associated
with the direct ownership of real estate because of its policy of concentrating
in the securities of companies in the real estate industry. These include
declines in the value of real estate, risks related to general and local
economic conditions, dependence on management skill, cash flow dependence,
possible lack of availability of long-term mortgage funds, over-building,
extended vacancies of properties, decreased occupancy rates and increased
competition, increases in property taxes and operating expenses, changes in
neighborhood values and the appeal of the properties to tenants and changes in
interest rates.
In addition to these risks, equity REITs may be affected by changes in the
value of the underlying properties owned by the trusts, while mortgage REITs may
be affected by the quality of any credit extended. Further, equity and mortgage
REITs are dependent upon management skills and generally are not diversified.
Equity and mortgage REITs are also subject to potential defaults by borrowers,
self-liquidation, and the possibility of failing to qualify for tax-free status
of income under the Code and failing to maintain exemption from the Investment
Company Act of 1940. In the event of a default by a borrower or lessee, the REIT
may experience delays in enforcing its rights as a mortgagee or lessor and may
incur substantial costs associated with protecting its investments. In addition,
investment in REITs could cause the Fund to possibly fail to qualify as a
regulated investment company.
REPURCHASE AGREEMENTS
Repurchase agreements will be entered into only with commercial banks,
brokers and dealers considered by the Trust to be creditworthy. The Trustees of
the Trust will monitor each Fund's repurchase agreement transactions
periodically and, with the Funds' investment advisers, will consider standards
which the investment advisers will use in reviewing the creditworthiness of any
party to a repurchase agreement with a Fund.
The use of repurchase agreements involves certain risks. For example, if the
seller under a repurchase agreement defaults on its obligation to repurchase the
underlying instrument at a time when the value of the instrument has declined, a
Fund may incur a loss upon its disposition. If the seller becomes insolvent and
subject to liquidation or reorganization under bankruptcy or other laws, a
bankruptcy court may determine that the underlying instrument is collateral for
a loan by the Fund and therefore is subject to sale by the trustee in
bankruptcy. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying instrument. While the Trustees of
the Trust acknowledge these risks, it is expected that they can be controlled
through careful structuring of repurchase agreement transactions to meet
requirements for treatment as a purchase and sale under the bankruptcy laws and
through monitoring procedures designed to assure the creditworthiness of
counterparties to such transactions.
11
<PAGE>
RUSSIAN SECURITIES
The Emerging Markets Fund may invest in Russian securities. While investment
risks exist in many markets around the world, some of the risks inherent in
investing in Russia appear to be greater than those in other established and
emerging markets. These risks include, without limitation:
POLITICAL AND ECONOMIC RISKS. There is no history of stability in this market
and no guarantee of future stability. The emerging nature of the Russian
political system in its current democratic form leaves it more vulnerable to
break down in the event of economic instability or popular unrest. The dynamic
nature of the political environment can make the future uncertain. The economic
infrastructure is poor, and the country maintains a high level of external and
internal debt. Tax regulations are ambiguous and unclear, and there is a risk of
imposition of arbitrary or onerous taxes due to the lack of a fair and
economically-rational tax regime.
COMMERCIAL AND CREDIT RISKS. Banks and other financial systems are not well
developed or regulated, and as a result tend to be untested and have low credit
ratings. Organized crime and corruption are a feature of the business
environment, and bankruptcy and insolvency are commonplace as businesses are
learning how to cope in new conditions. In terms of cash, securities and other
investment transactions, the risk of broker, counterparty and other third-party
default is high. The same holds true for issuers, where the risk of default is
high. Insurance is expensive and difficult to obtain in light of the volatility
of the commercial environment.
LIQUIDITY RISKS. Foreign investment is affected by restrictions in terms of
repatriation and convertibility of the currency. The ruble is only convertible
internally, and the value of investments may be affected by fluctuations in
available currency rates and exchange control regulations. The repatriation of
profits may be restricted in some cases. Due to the undeveloped nature of the
banking system, considerable delays can occur in transferring funds, converting
rubles into other currencies and remitting funds out of Russia.
LEGAL AND REGULATORY RISKS. Russia's legal system is evolving and is not as
developed as that of a western country. It is based on a civil code with no
system of judicial precedents. The regulatory environment is sometimes uncertain
since the total law can encompass the civil code, legislative laws, presidential
decrees, and ministry resolutions. The code, laws, decrees, and resolutions
("Regulations") are promulgated at separate times and are not necessarily
consistent. The issuance of Regulations does not always keep pace with market
developments, thereby creating ambiguities and inconsistencies.
Regulations governing securities investment may not exist or may be
interpreted and applied in an arbitrary or inconsistent manner. There may be a
risk of conflict between the rules and regulations of the local, regional, and
national governments. The concept of share ownership rights and controls may not
be in place or be enforceable. The independence of the courts from economic,
political, or national influence is basically untested and the courts and judges
are not experienced in business and corporate law. Foreign investors cannot be
guaranteed redress in a court of law for a breach of local laws, regulations or
contracts.
The securities market regulatory body, the Federal Commission on the Capital
Market, was established in 1994 and is responsible for overseeing market
participants, including registrars. However, the monitoring of and enforcement
of the obligations of registrar companies is difficult due to geographic
dispersion and inconsistent interpretation and application of regulations.
OPERATIONAL RISKS. Shareholder Title to Securities: Shareholder risk is a
major risk for equity investment in Russia. For example, shares are
dematerialized and the only legal evidence of ownership is the shareholder's
name entered in the register of the company. The concept of fiduciary duty on
the part of companies' management is generally non-existent. Therefore,
shareholders may suffer a dilution or loss of investment, due to arbitrary
changes in the shareholder register, with little or no recourse or redress
available. Local laws and regulations may not prohibit or restrict a company's
management from materially changing the company's structure without the consent
of shareholders. Legislation prohibiting insider trading activities is
rudimentary.
Clearing and Settlement: For equity settlements, the payments are usually
handled offshore in U.S. dollars after the shares are reregistered on the books
of the company or its registrar. However, the only evidence of the registration
is a company "extract" which is a photocopy of the appropriate page from the
register reflecting the new shareholder's name. The extract does not have a
legal basis for establishing ownership in the event of a loss.
For Ministry of Finance (MinFin) bond settlements, payments are made offshore
in U.S. dollars upon settlement of the bearer bonds at Vneshtorgbank's (VTB)
office in Moscow. If the bonds are transported between the local subcustodian
and VTB, the investor is exposed to transportation risk as the MinFins are
bearer bonds and are not replaceable in the event they are lost, stolen, or
destroyed.
Foreign investors can also invest in treasury issues through the Moscow
Interbank Currency Exchange (MICEX). These issues settle book-entry at MICEX in
rubles only.
Transparency: The rules regulating corporate governance may not exist or are
underdeveloped and offer little protection to minority shareholders. Disclosure
and reporting requirements are not to the expected level of most developed
western nations. The accounting standards generally used in Russia are not
international standards and in many cases may be cash based, nonaccrual
12
<PAGE>
method of accounting. The quality, reliability, and availability of information
on companies in Russia is lower than in most western markets.
Derivative Investments. In order to seek to hedge various portfolio
positions, including to hedge against price movements in markets in which the
Fund anticipates increasing its exposure, the Fund may invest in certain
instruments which may be characterized as derivative investments. These
investments include various types of interest rate transactions, options and
futures. Such investments also may consist of indexed securities, including
inverse securities. The Fund has express limitations on the percentage of its
assets that may be committed to certain of such investments. Other of such
investments have no express quantitative limitations, although they may be made
solely for hedging purposes, not for speculation, and may in some cases require
limitations as to the type of permissible counter-party to the transaction.
Interest rate transactions involve the risk of an imperfect correlation between
the index used in the hedging transactions and that pertaining to the securities
which are the subject of such transactions. Similarly, utilization of options
and futures transactions involves the risk of imperfect correlation in movements
in the price of options and futures and movements in the price of the securities
or interest rates which are the subject of the hedge. Investments in indexed
securities, including inverse securities, subject the Fund to the risks
associated with changes in the particular indices, which may include reduced or
eliminated interest payments and losses of invested principal.
SECURITIES LENDING
The Funds may lend portfolio securities to broker-dealers and other financial
institutions, provided that such loans are callable at any time by the Fund
utilizing this investment technique and are at all times secured by collateral
held by the Fund at least equal to the market value, determined daily, of the
loaned securities. The Fund utilizing this investment technique will continue to
receive any income on the loaned securities, and at the same time will earn
interest on cash collateral (which will be invested in short-term debt
obligations) or a securities lending fee in the case of collateral in the form
of U.S. Government securities. A loan may be terminated at any time by either
the Fund or the borrower. Upon termination of a loan, the borrower will be
required to return the securities to the Fund, and any gain or loss in the
market price during the period of the loan would accrue to the Fund. If the
borrower fails to maintain the requisite amount of collateral, the loan will
automatically terminate, and the Fund may use the collateral to replace the
loaned securities while holding the borrower liable for any excess of the
replacement cost over the amount of the collateral.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, in order to exercise such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan. The Fund may pay reasonable finders,
administrative and custodial fees in connection with loans of its portfolio
securities.
As with any extension of credit, there are risks of delay in recovery of the
loaned securities and in some cases loss of rights in the collateral should the
borrower of the securities fail financially. However, loans of portfolio
securities will be made only to firms considered by the Trust to be creditworthy
and when the Adviser believes the consideration to be earned justifies the
attendant risks.
SWAP AGREEMENTS
The Emerging Markets Fund may enter into interest rate, index, credit
default, total return and currency exchange rate swap agreements in attempts to
obtain a particular desired return at a lower cost to the Fund than if the Fund
had invested directly in an instrument that yielded that desired return. Swap
agreements are two-party contracts entered into primarily by institutional
investors for periods ranging from a few weeks to more than one year. In a
standard "swap" transaction, two parties agree to exchange the returns (or
differentials in rates of return) earned or realized on particular predetermined
investments or instruments. The gross returns to be exchanged or "swapped"
between the parties are calculated with respect to a "notional amount," i.e.,
the return on or increase in value of a particular dollar amount invested at a
particular interest rate, in a particular foreign currency, or in a "basket" of
securities representing a particular index. The "notional amount" of the swap
agreement is only a fictive basis on which to calculate the obligations the
parties to a swap agreement have agreed to exchange. The Fund's obligations (or
rights) under a swap agreement will generally be equal only to the amount to be
paid or received under the agreement based on the relative values of the
positions held by each party to the agreement (the "net amount"). The Fund's
obligations under a swap agreement will be accrued daily (offset against any
amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap
counterparty will be covered by the maintenance of a segregated account
consisting of liquid assets to avoid leveraging of the Fund's portfolio.
Whether the Fund's use of swap agreements enhance the Fund's total return
will depend on the Subadviser's ability to correctly predict whether certain
types of investments are likely to produce greater returns than other
investments. Because they are two-party contracts and may have terms of greater
than seven days, swap agreements may be considered to be illiquid. Moreover, a
Fund bears the risk of loss of the amount expected to be received under a swap
agreement in the event of the default or bankruptcy of a swap agreement
counterparty. The Subadviser will cause a Fund to enter into swap agreements
only with counterparties that would be eligible for consideration as repurchase
agreement counterparties under the Funds' repurchase agreement guidelines.
Certain restrictions imposed on the Funds by the Internal Revenue Code may limit
the Funds' ability to use swap agreements. The
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<PAGE>
swaps market is a relatively new market and is largely unregulated. It is
possible that developments in the swaps market, including potential government
regulation, could adversely affect the Fund's ability to terminate existing swap
agreements or to realize amounts to be received under such agreements.
Certain swap agreements are exempt from most provisions of the Commodity
Exchange Act ("CEA") and, therefore, are not regulated as futures or commodity
option transactions under the CEA, pursuant to regulations of the CFTC. To
qualify for this exemption, a swap agreement must be entered into by "eligible
participants," which include the following, provided the participants' total
assets exceed established levels: a bank or trust company, savings association
or credit union, insurance company, investment company subject to regulation
under the Investment Company Act of 1940 (the "1940 Act"), commodity pool,
corporation, partnership, proprietorship, organization, trust or other entity,
employee benefit plan, governmental entity, broker-dealer, futures commission
merchant, natural person, or regulated foreign person. To be eligible, natural
persons and most other entities must have total assets exceeding $10 million;
commodity pools and employees benefit plans must have assets exceeding $5
million. In addition, an eligible swap transaction must meet three conditions.
First, the swap agreement may not be part of a fungible class of agreements that
are standardized as to their material economic terms. Second, the
creditworthiness of parties with actual or potential obligations under the swap
agreement must be a material consideration in entering into or determining the
terms of the swap agreement, including pricing, cost or credit enhancement
terms. Third, swap agreements may not be entered into and traded on or through a
multilateral transaction execution facility.
TAXABLE SECURITIES
The income from investments (either in the form of dividends or interest)
made by the International Fund are expected to be taxable as ordinary income.
The funds including, to a limited extent, the Bond Fund may invest in taxable
securities.
Interest earned on investments in taxable securities may be taxable to
shareholders as ordinary income. Investors should be aware that investments in
taxable securities by the Bond Fund are restricted to:
U.S. Government Securities--obligations issued or guaranteed by the U.S.
Government, its agencies, authorities or instrumentalities (collectively
referred to as "U.S. Government" issues). Some of these securities are supported
by the full faith and credit of the U.S. Government; others are supported by the
right of the issuer to borrow from the U.S. Treasury; and the remainder are
supported only by the credit of the instrumentality.
Bank Obligations--certificates of deposit, bankers' acceptances, and other
short-term obligations of U.S. banks which at the date of the investment have
capital, surplus and undivided profits in excess of $100,000,000 as of the date
of their most recently published financial statements.
Commercial Paper--commercial paper which at the date of the investment is
rated P-l by Moody's Investors Service, Inc. or A-1 by Standard & Poor's
Corporation or, if not rated, is issued by a company which at the date of the
investment has an outstanding debt issue rated Aa or higher by Moody's or AA or
higher by Standard & Poor's.
Corporate Debt Securities--corporate debt securities which at the date of the
investment are rated Aa or higher by Moody's or AA or higher by Standard &
Poor's.
Repurchase Agreements--repurchase agreements with respect to any of the
foregoing.
The Bond Fund also has the right to hold cash reserves as the Adviser deems
necessary. For example, a Fund may invest in money market securities or hold
cash pending investment of proceeds from sales of its shares or from the sale of
portfolio securities and/or in anticipation of redemptions.
VARIABLE AND FLOATING RATE SECURITIES
Some municipal securities bear rates of interest that are adjusted
periodically according to formulae intended to minimize fluctuation in values of
floating rate instruments. Variable rate instruments are those whose terms
provide for automatic establishment of a new interest rate on set dates.
Floating rate instruments are those whose terms provide for automatic adjustment
of their interest rates whenever some specified interest rate changes. Variable
rate and floating rate instruments will be referred to collectively as "Variable
Rate Securities." The interest rate on Variable Rate Securities is ordinarily
determined by reference to, or is a percentage of, a bank's prime rate, the
90-day U.S. Treasury Bill rate, the rate of return on commercial paper or bank
certificates of deposit, an index of short-term, tax-exempt rates, or some
objective standard. Generally, the changes in the interest rate on Variable Rate
Securities reduce the fluctuation in the market value of such securities.
Accordingly, as interest rates decrease or increase, the potential for capital
appreciation or depreciation is less than for fixed-rate obligations.
Variable Rate Demand Securities are Variable Rate Securities which have
demand features entitling the purchaser to resell the securities to the issuer
at an amount approximately equal to amortized cost or the principal amount
thereof plus accrued interest, which may be more or less than the price the Bond
Fund paid for them. The interest rate on Variable Rate Demand Securities also
varies either according to some objective standard, such as an index of
short-term, tax-exempt rates, or according to rates set by or on behalf of the
issuer.
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<PAGE>
WHEN-ISSUED SECURITIES
The Bond and Emerging Markets Funds may purchase securities on a when-issued
or forward-commitment basis. New issues of municipal and emerging market
securities are often offered on a when-issued basis, that is, delivery and
payment for the securities normally takes place 15 to 45 days or more after the
date of the commitment to purchase. The payment obligation and the interest rate
that will be received on the securities are each fixed at the time the buyer
enters into the commitment. A Fund will generally make a commitment to purchase
such securities with the intention of actually acquiring the securities.
However, the Fund may sell these securities before the settlement date if it is
deemed advisable as a matter of investment strategy. When the Fund purchases
securities on a when-issued basis, cash or liquid high quality debt securities
equal in value to commitments for the when-issued securities will be deposited
in a segregated account with the Trust's custodian bank. Such segregated
securities either will mature or, if necessary, be sold on or before the
settlement date.
Securities purchased on a when-issued basis and the securities held in a Fund
are subject to changes in market value based upon the public perception of the
creditworthiness of the issuer and changes in the level of interest rates which
will generally result in similar changes in value; i.e., both experiencing
appreciation when interest rates decline and depreciation when interest rates
rise. Therefore, to the extent a Fund remains substantially fully invested at
the same time that they have purchased securities on a when-issued basis, there
will be greater fluctuations in the net asset values than if the Fund merely set
aside cash to pay for when-issued securities. In addition, there will be a
greater potential for the realization of capital gains, which are not exempt
from federal income taxation. When the time comes to pay for when-issued
securities, the Fund will meet its obligations from then available cash flow,
the sale of securities or, although it would not normally expect to do so, from
the sale of the when-issued securities themselves (which may have a value
greater or less than the payment obligation). The policies described in this
paragraph are not fundamental and may be changed without shareholder approval.
ZERO COUPON BONDS
The Emerging Markets Fund may invest in debt obligations that do not make any
interest payments for a specified period of time prior to maturity or until
maturity. Even though such bonds do not pay current interest in cash, the
Emerging Markets Fund is required to accrue interest income on such investments
and to distribute such amounts to shareholders. Thus, the Emerging Markets Fund
would not be able to purchase income-producing securities to the extent of cash
used to pay such distributions and current income could be less than it
otherwise would have been. Alternatively, the Emerging Markets Fund might
liquidate investments in order to satisfy these distribution requirements. The
value of these obligations fluctuates more in response to interest rate changes,
if they are of the same maturity, than does the value of debt obligations that
make current interest payments.
PERFORMANCE INFORMATION
Performance information for each Fund (and Class of Fund) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature may
be expressed as the "yield" of the Bond Fund and Emerging Markets Fund, and as
"average annual total return" and "total return" of any of the other Funds.
Quotations of the yield for the Bond Fund and Emerging Markets Fund will be
based on all investment income per share earned during a particular 30-day
period (including dividends and interest), less expenses (including pro rata
Trust expenses and expenses applicable to each particular Fund or Class of Fund)
accrued during the period ("net investment income"), and are computed by
dividing net investment income by the value of a share of the Fund or Class on
the last day of the period, according to the following formula:
YIELD = 2[( a-b + 1)(6)-1]
----
(cd)
where a = dividends and interest earned during the period by the Fund,
b = expenses accrued for the period (net of any reimbursements),
c = the average daily number of shares outstanding during the period
that were entitled to receive dividends, and
d = the net asset value per share on the last day of the period.
For the 30-day period ended November 30, 1999, the yield for the Bond Fund
Class A shares and Class B shares was 4.14% and 3.60%, respectively and the
Emerging Markets Fund Class A shares, Class B shares and Class C shares was
9.38%, 9.09%, and 9.08%, respectively.
A Fund's average annual total return quotation is computed in accordance with
a standardized method prescribed by rules of the Securities and Exchange
Commission. The average annual total return for the Fund for a specific period
is found by first taking a hypothetical $1,000 investment ("initial investment")
in the Fund's shares on the first day of the period, adjusting to deduct the
maximum sales charge, and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that
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<PAGE>
all income and capital gains dividends paid by the Fund have been reinvested at
net asset value on the reinvestment dates during the period.
Calculation of a Fund's total return is subject to a standardized formula.
Total return performance for a specific period is calculated by first taking an
investment ("initial investment") in the Fund's shares on the first day of the
period, either adjusting or not adjusting to deduct the maximum sales charge,
and computing the "redeemable value" of that investment at the end of the
period. The total return percentage is then determined by subtracting the
initial investment from the redeemable value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends by the Fund have been
reinvested at net asset value on the reinvestment dates during the period. Total
return may also be shown as the increased dollar value of the hypothetical
investment over the period. Total return calculations that do not include the
effect of the sales charge would be reduced if such charge were included.
The manner in which total return will be calculated for public use is
described above. The following table illustrates average annual total return for
each Fund for the periods ended November 30, 1999.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOVEMBER 30, 1999
PERIODS ENDED
----------------------------------------------
<S> <C> <C> <C> <C>
FUND 1 YEAR 5 YEAR 10 YEAR SINCE INCEPTION(1)
---- ------ ------ ------- ------------------
Bond
Class A (8.24)% 5.17% 5.74% 6.48%
Class B (8.02)% 5.43% N/A 3.52%
International
Class A(2) 12.36% 13.71% 10.00% N/A
Class B 14.66% 14.20% N/A 12.80%
Class C N/A N/A N/A 13.41%
Real Estate
Class A(2) (10.17)% N/A N/A 7.08%
Class B (9.00)% N/A N/A 7.29%
Emerging Markets
Class A 19.67% N/A N/A 12.22%
Class B 20.52% N/A N/A 12.38%
Class C 24.40% N/A N/A (12.13)%
-------------------
</TABLE>
(1)The Bond and International Fund's Class A Shares commenced operations on
July 15, 1988, and November 1, 1989, respectively. Bond Fund's Class B Shares
commenced operations on March 16, 1994. International Fund Class B commenced
operations on July 15, 1994. The Real Estate and Emerging Markets Funds'
Class A and B Shares commenced operations on March 1, 1995 and September 5,
1995, respectively. The Emerging Markets Bond Fund's Class C Shares commenced
operations on March 26, 1998. The International Fund's Class C Shares
commenced operations on March 30, 1999.
(2) Class A Share performance has been restated to reflect the deduction of the
current maximum sales charge.
Performance information reflects only the performance of a hypothetical
investment in each class during the particular time period on which the
calculations are based. Performance information should be considered in light of
the Fund's investment objectives and policies, characteristics and quality of
the portfolio, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
The Trust also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Funds, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
PERFORMANCE COMPARISONS
Each Fund or Class of Fund may, from time to time, include in advertisements
containing total return the ranking of those performance figures relative to
such figures for groups of mutual funds having similar investment objectives as
categorized by ranking services such as Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Weisenberger Financial Services, Inc., and rating
services such as Morningstar, Inc. Additionally, a Fund may compare its
performance results to other investment or savings vehicles (such as
certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week, Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's Investment
16
<PAGE>
Adviser, The Wall Street Journal, New York Times, Consumer Reports, Registered
Representative, Financial Planning, Financial Services Weekly, Financial World,
U.S. News and World Report, Standard and Poor's The Outlook, Investor's Daily
and Personal Investor. The total return may be used to compare the performance
of the Funds against certain widely acknowledged outside standards or indices
for stock and bond market performance, such as the Standard & Poor's 500
Composite Stock Price Index (the "S&P 500"), Standard & Poor's 400 Midcap Index
(the "S&P 400"), Dow Jones Industrial Average, Europe Australia Far East Index
("EAFE"), NAREIT Equity Index, Consumer Price Index, J.P. Morgan Emerging
Markets Bond Index, Lehman Brothers Municipal Bond Index, Lehman Brothers
Aggregate Bond Index, Lehman Brothers Corporate Index and Lehman Brothers T-Bond
Index. The S&P 500 is a commonly quoted measure of stock market performance and
represents common stocks of companies of varying sizes segmented across 90
different industries which are listed on the New York Stock Exchange, the
American Stock Exchange and traded over the NASDAQ National Market System.
PORTFOLIO TURNOVER
The Funds pay brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by a Fund and thus indirectly by its shareholders. It may
also result in the realization of larger amounts of short-term capital gains,
which are taxable to shareholders as ordinary income. If such rate of turnover
exceeds 100%, the Funds will pay more in brokerage commissions than would be the
case if they had lower portfolio turnover rates. Historical turnover rates can
be found under the heading "Financial Highlights" located in the Trust's
Prospectus.
PORTFOLIO TRANSACTIONS
In effecting fund transactions for the Trust, each adviser adheres to the
Trust's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The determination of
what may constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations including, without
limitation, the overall direct net economic result to the Trust (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, availability of the broker to stand ready
to execute possibly difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by each adviser and the Subadviser in determining the overall
reasonableness of brokerage commissions paid by the Trust.
Each adviser may cause the Trust to pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission which
another broker or dealer would have charged for effecting that transaction if
such adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker. As provided in Section 28(e) of the Securities Exchange
Act of 1934, "brokerage and research services" include advising as to the value
of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and research
services provided by brokers to the Trust are considered to be in addition to
and not in lieu of services required to be performed by each adviser under its
contract with the Trust and may benefit both the Trust and other accounts of
such adviser. Conversely, brokerage and research services provided by brokers to
other accounts of an adviser may benefit the Trust.
If the securities in which a particular Fund of the Trust invests are traded
primarily in the over-the-counter market, where possible the Fund will deal
directly with the dealers who make a market in the securities involved unless
better prices and executions are available elsewhere. Such securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
Some fund transactions are, subject to the Conduct Rules of the National
Association of Securities Dealers, Inc. and subject to obtaining best prices and
executions, effected through dealers (excluding Equity Planning) who sell shares
of the Trust.
The Trust has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Trust. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs share pro rata based on the
Trust's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
17
<PAGE>
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Funds, to buy and sell securities for the Funds, provided they
have the execution capability and that their commission rates are comparable to
those of other unaffiliated broker/dealers. Directors of PXP Securities Corp. or
its affiliates receive indirect benefits from the Funds as a result of its usual
and customary brokerage commissions that PXP Securities Corp. may receive for
acting as broker to the Funds in the purchase and sale of portfolio securities.
The investment advisory agreement does not provide for a reduction of the
advisory fee by any portion of the brokerage fees generated by portfolio
transactions of the Funds that PXP Securities Corp. may receive.
For the fiscal years ended November 30, 1997, 1998 and 1999, brokerage
commissions paid by the Trust on portfolio transactions totaled $2,269,745,
$2,904,276 and $1,649,397, respectively. In the fiscal years ended November 30,
1997, 1998 and 1999, no brokerage commissions were paid to affiliates for
portfolio transactions. Brokerage commissions of $592,803 paid during the fiscal
year ended November 30, 1999, were paid on fund transactions aggregating
$235,932,659 executed by brokers who provided research and other statistical and
factual information.
Investment decisions for the Trust are made independently from those of the
other investment companies or accounts advised by either adviser. It may
frequently happen that the same security is held in the portfolio of more than
one fund. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same security is
suited for the investment objectives of more than one fund. When two or more
funds advised by either adviser (or any subadviser) are simultaneously engaged
in the purchase or sale of the same security, the transactions are allocated
among the funds in a manner equitable to each fund. It is recognized that in
some cases this system could have a detrimental effect on the price or volume of
the security as far as the Trust is concerned. In other cases, however, it is
believed that the ability of the Trust to participate in volume transactions
will produce better executions for the Trust. It is the opinion of the Board of
Trustees of the Trust that the desirability of utilizing each adviser as
investment adviser to the Trust outweighs the disadvantages that may be said to
exist from simultaneous transactions.
SERVICES OF THE ADVISERS
The investment adviser to the Bond, International and Emerging Markets Funds
is Phoenix Investment Counsel, Inc. ("PIC"), which is located at 56 Prospect
Street, Hartford, Connecticut 06115-0480. PIC acts as the investment adviser for
14 fund companies totaling 37 mutual funds, as subadviser to two fund companies
totaling three mutual funds, and as adviser to institutional clients. PIC has
acted as an investment adviser for over sixty years. PIC was originally
organized in 1932 as John P. Chase, Inc. As of December 31, 1999, PIC had
approximately $25.7 billion in assets under management. Philip R. McLoughlin, a
Trustee and officer of the Trust, is a director of PIC. All other executive
officers of the Trust are officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") of Hartford, Connecticut is a majority shareholder of PXP.
Phoenix Home Life is in the business of writing ordinary and group life and
health insurance and annuities. Its principal offices are located at One
American Row, Hartford, Connecticut, 06115-2520. Equity Planning, a mutual fund
distributor, acts as the national distributor of the Trust's shares and as
Financial Agent of the Trust. The principal office of Equity Planning is located
at 56 Prospect Street, Hartford, CT 06115-0408.
Phoenix Investment Partners, Ltd., is a publicly traded, independent
registered advisory firm and has served investors for over 70 years. As of
December 31, 1999 PXP had approximately $64.4 billion in assets under management
through its investment partners: Aberdeen Fund Managers, Inc. (Aberdeen) in
Aberdeen, London, Singapore and Fort Lauderdale; Duff & Phelps Investment
Management Co. (Duff & Phelps) in Chicago; Roger Engemann & Associates, Inc.
(Engemann) in Pasadena; Seneca Capital Management LLC (Seneca) in San Francisco,
Phoenix/Zweig Advisers LLC (Zweig) in New York; and Phoenix Investment Counsel,
Inc. (Goodwin, Hollister, and Oakhurst divisions) in Hartford, CT, Sarasota, FL
and Scotts Valley, CA, respectively.
Duff & Phelps Investment Management Co. ("Duff & Phelps") is the investment
adviser to the Real Estate Fund and is located at 55 East Monroe Street, Suite
3600, Chicago, Illinois 60603. Duff & Phelps also acts as investment adviser to
eight other mutual funds and as adviser to institutional clients. As of December
31, 1999, Duff & Phelps had approximately $14.7 billion in assets under
management on a discretionary basis. Duff & Phelps is a subsidiary of PXP. Duff
& Phelps also serves as investment adviser to the Core Equity Fund of Phoenix
Equity Series Fund, the Core Bond Fund of Phoenix Series Fund and three
closed-end funds:
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<PAGE>
Duff & Phelps Utilities Income Inc., Duff & Phelps Utilities Tax-Free Income
Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
Aberdeen Fund Managers Inc. ("Aberdeen") is the subadviser to the
International Fund and is located at 1 Financial Plaza, Suite 2210, Fort
Lauderdale, FL 33394. Aberdeen is a wholly-owned subsidiary of Aberdeen Asset
Management PLC based in Aberdeen, Scotland. Together with its subsidiaries,
Aberdeen Asset Management PLC provides investment management services to unit
and investment trusts, segregated pension funds and other institutional and
private portfolios, and, through Aberdeen, U.S. mutual funds. Aberdeen has
served as subadviser for the following mutual funds since their inception in
1996: Phoenix-Aberdeen New Asia Fund, Phoenix-Aberdeen Global Small Cap Fund and
the Aberdeen New Asia Series of The Phoenix Edge Series Fund. Aberdeen also has
served as subadviser to Phoenix-Aberdeen Worldwide Opportunities Fund and the
International Series of The Phoenix Edge Series Fund since 1998. As of December
31, 1999, Aberdeen Asset Management PLC had $30 billion in assets under
management.
The investment advisory agreements, approved by the Trustees, provide that
the Trust will bear all costs and expenses (other than those specifically
referred to as being borne by the Adviser) incurred in the operation of the
Trust. Such expenses include, but shall not be limited to, all expenses incurred
in the operation of the Trust and any public offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions, fees of Trustees
who are not employees of PIC or any of its affiliates, expenses of Trustees, and
shareholders' meetings, expenses of printing and mailing proxy soliciting
material, expenses of the insurance premiums for fidelity and other coverage,
expenses of the repurchase and redemption of shares, expenses of the issue and
sale of shares (to the extent not borne by Equity Planning under its agreement
with the Trust), expenses of printing and mailing share certificates
representing shares of the Trust, association membership dues, charges of
custodians, transfer agents, dividend disbursing agents and financial agents,
and bookkeeping, auditing and legal expenses. The Trust will also pay the fees
and bear the expense of registering and maintaining the registration of the
Trust and its shares with the Securities and Exchange Commission and registering
or qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders. If authorized by
the Trustees, the Trust will also pay for extraordinary expenses and expenses of
a non-recurring nature which may include, but shall not be limited to, the
reasonable cost of any reorganization or acquisition of assets and the cost of
legal proceedings to which the Trust is a party.
Each Fund will pay expenses incurred in its own operation and will also pay a
portion of the Trust's general administration expenses allocated on the basis of
the asset values of the respective Funds.
For managing, or directing the management of, the investments of the Bond,
International and Emerging Markets Funds, PIC is entitled to a fee, payable
monthly, at the following annual rates:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FUND 1ST $1 BILLION $1-2 BILLION $2+ BILLION
---- -------------- ------------ -----------
Bond 0.45% 0.40% 0.35%
International 0.75% 0.70% 0.65%
Emerging Markets 0.75% 0.70% 0.65%
</TABLE>
For managing, or directing the management of, the investments of the Real
Estate Fund, Duff & Phelps is entitled to a monthly fee at the annual rate of
0.75% of the average aggregate daily net asset values of the Fund up to $1
billion; 0.70% of such value between $1 billion and $2 billion; and 0.65% of
such value in excess of $2 billion.
For its services to the Bond, International and Emerging Markets Funds of the
Trust during the fiscal years ended November 30, 1997, 1998 and 1999, PIC
received a fee of $2,233,080, $2,625,781 and $2,581,832. Of this total, PIC
received fees from each Fund as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FUND 1997 1998 1999
---- ---- ---- ----
Bond $ 593,217 $ 544,278 $ 473,237
International 1,062,391 1,350,786 1,408,005
Emerging Markets 577,472 730,717 700,590
</TABLE>
The Real Estate Fund, during the fiscal years ended November 30, 1997, 1998
and 1999, paid management fees of $355,100, $398,336 and $270,694, respectively.
For the fiscal years 1997, 1998 and 1999, the Adviser bore ordinary operating
expenses of the Real Estate Fund of $112,306, $111,386 and $162,984,
respectively. Accordingly, the fees which the Adviser would otherwise have been
entitled were reduced to $242,794 in fiscal year 1997, $286,950 in fiscal year
1998, and $107,710 in fiscal year 1999.
The investment advisory agreements also provide that each adviser shall not
be liable to the Trust or to any shareholder of the Trust for any error of
judgment or mistake of law or for any loss suffered by the Trust or by any
shareholder of the Trust in connection with the matters to which the agreement
relates, except a loss resulting from willful misfeasance, bad faith, gross
negligence or reckless disregard on the part of such adviser in the performance
of its duties thereunder.
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<PAGE>
Provided it has been approved by a vote of the majority of the outstanding
shares of a Fund of the Trust which is subject to its terms and conditions, each
investment advisory agreement continues from year to year with respect of such
Fund so long as (1) such continuance is approved at least annually by the
Trustees or by a vote of the majority of the outstanding shares of such Fund and
(2) the terms and any renewal of the agreement with respect to such Fund have
been approved by the vote of a majority of the Trustees who are not parties to
the agreement or interested persons, as that term is defined in the Investment
Company Act of 1940, of the Trust or the relevant adviser, cast in person at a
meeting called for the purpose of voting on such approval. On sixty days'
written notice and without penalty the agreement may be terminated as to the
Trust or as to a Fund by the Trustees or by the relevant adviser and may be
terminated as to a Fund by a vote of the majority of the outstanding shares of
such Fund. The Agreement automatically terminates upon its assignment (within
the meaning of the Investment Company Act). The agreement provides that upon its
termination, or at the request of the relevant adviser, the Trust will eliminate
all reference to Phoenix from its name, and will not thereafter transact
business in a name using the word Phoenix.
The Trust, its Advisers and Subadvisers and Distributor have each adopted a
Code of Ethics pursuant to Rule 17-j1 under the Investment Company Act of 1940.
Personnel subject to the Codes of Ethics may purchase and sell securities for
their personal accounts, including securities that may be purchased, sold or
held by the Funds, subject to certain restrictions and conditions. Generally,
personal securities transactions are subject to preclearance procedures,
reporting requirements and holding period rules. The Codes also restrict
personal securities transactions in private placements, initial public offerings
and securities in which a Fund has a pending order.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Trust does not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Trust. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for any Fund which invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of such Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Trustees or their delegates. If at
any time a Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
20
<PAGE>
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange are confirmed at the offering price
effective at that time, provided the order is received by the Authorized Agent
prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or Class C Shares would be less than the initial sales charge and accumulated
distribution services fee on Class A Shares purchased at the same time. Note,
only the Emerging Markets Fund and the International Fund currently offer Class
C Shares.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to ongoing distribution and services fees at an annual rate
of 0.25% of the Fund's aggregate average daily net assets attributable to the
Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted, in the circumstances and subject to the qualifications described
in the Funds' Prospectus. The purpose of the conversion feature is to relieve
the holders of the Class B Shares that have been outstanding for a period of
time sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fees. Such
conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
subaccount. Each time any Class B Shares in the shareholder's Fund account
(other than those in the subaccount) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the subaccount will also convert to
Class A Shares.
CLASS C SHARES--EMERGING MARKETS FUND AND INTERNATIONAL FUND ONLY
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase. The deferred
sales charge may be waived in connection with certain qualifying redemptions.
Shares issued in conjunction with the automatic reinvestment of income
distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to ongoing distribution and services fees at
an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The ways in which sales charges may be avoided or reduced are described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca
21
<PAGE>
Funds or any other mutual fund advised, subadvised or distributed by the
Adviser, Distributor or any of their corporate affiliates (an "Affiliated
Phoenix Fund"); (2) any director or officer, or any full-time employee or sales
representative (for at least 90 days) of the Adviser or Distributor; (3)
registered representatives and employees of securities dealers with whom
Distributor has sales agreements; (4) any qualified retirement plan exclusively
for persons described above; (5) any officer, director or employee of a
corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who retires from
Phoenix Home Life, Distributor and/or their corporate affiliates; (9) any
account held in the name of a qualified employee benefit plan, endowment fund or
foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund qualified plan; (11)
any Phoenix Home Life separate account which funds group annuity contracts
offered to qualified employee benefit plans; (12) any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge; (13) any fully matriculated student in any U.S. service academy; (14)
any unallocated account held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity, if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds, Phoenix-Engemann Fund or
Phoenix-Seneca Fund if, in connection with the purchases or redemption of the
redeemed shares, the investor paid a prior sales charge provided such investor
supplies verification that the redemption occurred within 90 days of the Phoenix
Fund purchase and that a sales charge was paid; (16) any deferred compensation
plan established for the benefit of any Phoenix Fund, Phoenix-Engemann Fund or
Phoenix-Seneca Fund trustee or director; provided that sales to persons listed
in (1) through (15) above are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund; (17) purchasers of Class A
Shares bought through investment advisers and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for their
own accounts or the accounts of their clients; (18) retirement plans and
deferred compensation plans and trusts used to fund those plans (including, for
example, plans qualified or created under sections 401(a), 403(b) or 457 of the
Internal Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the
Distributor for such purchases; (19) 401(k) participants in the Merrill Lynch
Daily K Plan (the "Plan") if the Plan has at least $3 million in assets or 500
or more eligible employees; or (20) clients of investment advisors or financial
planners who buy shares for their own accounts but only if their accounts are
linked to a master account of their investment advisor or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of the investors
described in (17) through (20) may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix-Goodwin Money Market
Fund and Phoenix-Zweig Government Cash Fund Class A Shares), if made at the same
time by the same "person," will be added together to determine whether the
combined sum entitles you to an immediate reduction in sales charges. A "person"
is defined in this and the following sections as (a) any individual, their
spouse and minor children purchasing shares for his or their own account
(including an IRA account) including his or their own trust; (b) a trustee or
other fiduciary purchasing for a single trust, estate or single fiduciary
account (even though more than one beneficiary may exist); (c) multiple employer
trusts or Section 403(b) plans for the same employer; (d) multiple accounts (up
to 200) under a qualified employee benefit plan or administered by a third party
administrator; or (e) trust companies, bank trust departments, registered
investment advisers, and similar entities placing orders or providing
administrative services with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial or similar capacity, provided all shares are held of record in the
name, or nominee name, of the entity placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any
class of shares of this or any other Affiliated Phoenix Fund (other than
Phoenix-Goodwin Money Market Fund and Phoenix-Zweig Government Cash Fund Class A
Shares), if made by the same person within a 13-month period, will be added
together to determine whether you are entitled to an immediate reduction in
sales charges. Sales charges are reduced based on the overall amount you
indicate that you will buy under the Letter of Intent. The Letter of Intent is a
mutually non-binding arrangement between you and the Distributor. Since the
Distributor doesn't know whether you will ultimately fulfill the Letter of
Intent, shares worth 5% of the amount of each purchase will be set aside until
you fulfill the Letter of Intent. When you buy enough shares to fulfill the
Letter of Intent, these shares will no longer be restricted. If, on the other
hand, you do not satisfy the Letter of Intent, or otherwise wish to sell any
restricted shares, you will be given the choice of either buying enough shares
to fulfill the Letter of Intent or paying the difference between any sales
charge you previously paid and the otherwise applicable sales charge based on
the intended aggregate purchases described in the Letter of Intent. You will be
given 20 days to make this decision. If you do not exercise either election, the
Distributor will automatically redeem the number of your restricted shares
needed to make up the deficiency in sales charges received. The Distributor will
redeem restricted Class A Shares before Class B Shares or Class C, respectively.
Oldest shares will be redeemed before selling newer shares. Any remaining shares
will then be deposited to your account.
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<PAGE>
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND CLASS C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and Class C Shares if
the redemption is made (a) within one year of death (i) of the sole shareholder
on an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts
to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, in
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B and
Class C Shares of this or any other Affiliated Phoenix Fund; (g) based on any
direct rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program. If,
as described in condition (a) above, an account is transferred to an account
registered in the name of a deceased's estate, the CDSC will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain subject to the applicable CDSC.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same Fund
eight years after they are bought. Conversion will be on the basis of the then
prevailing net asset value of Class A and Class B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Trust were unable to obtain such assurances,
it might continue to make distributions if doing so would assist in complying
with its general practice of distributing sufficient income to reduce or
eliminate federal taxes otherwise payable by the Funds.
IMMEDIATE INVESTMENT
In order to obtain immediate investment of funds, initial and subsequent
purchases of shares of a Fund may also be made by wiring Federal Trusts (monies
held in a bank account with a Federal Reserve Bank) directly pursuant to the
following instructions:
(1) For initial investments, telephone the Trust at (800) 367-5877. Certain
information will be requested from you regarding the account, and an
account number will be assigned.
(2) Once an account number has been assigned, direct your bank to wire the
Federal Trusts to State Street Bank and Trust Company, Custody &
Shareholder Services Division, Boston, Massachusetts 02105, attention of
the appropriate Fund of the Phoenix Multi-Portfolio Fund. Your bank must
include the account number and the name(s) in which your account is
registered in its wire and also request a telephone advice. Your bank may
charge a fee to you for transmitting funds by wire.
An order for shares of a Fund purchased with Federal Trusts will be accepted
on the business day Federal Trusts are wired provided the Federal Trusts are
received by 4:00 p.m. on that day; otherwise, the order will not be accepted
until the next business day. Shareholders should bear in mind that wire
transfers may take two or more hours to complete.
Promptly after an initial purchase of shares made by wiring Federal Trusts
directly, the shareholder should complete and mail to Equity Planning an Account
Application.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone.
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Inquiries regarding policies and procedures relating to shareholder account
services should be directed to Shareholder Services at (800) 243-1574.
Broker/dealers may impose their own restrictions and limits on accounts held
through the broker/dealer. Please consult your broker/dealer for account
restriction and limit information.
EXCHANGES
Under certain circumstances, shares of any Phoenix Fund may be exchanged for
shares of the same Class of another Phoenix Fund or any other Affiliated Phoenix
Fund on the basis of the relative net asset values per share at the time of the
exchange. Exchanges are subject to the minimum initial investment requirement of
the designated Series or Fund, except if made in connection with the Systematic
Exchange privilege. Shareholders may exchange shares held in book-entry form for
an equivalent number (value) of the same class of shares of any other Affiliated
Phoenix Fund, if currently offered. On exchanges with share classes that carry a
contingent deferred sales charge, the CDSC schedule of the original shares
purchased continues to apply. The exchange of shares is treated as a sale and
purchase for federal income tax purposes (see also "Dividends, Distributions and
Taxes"). Exchange privileges may not be available for all Phoenix Funds, and may
be rejected or suspended.
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund or any other Affiliated Phoenix
Fund automatically on a monthly, quarterly, semiannual or annual basis or may
cancel this privilege at any time. If you maintain an account balance of at
least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated
on the basis of the net asset value of the shares held in a single account), you
may direct that shares be automatically exchanged at predetermined intervals for
shares of the same class of another Affiliated Phoenix Fund. This requirement
does not apply to Phoenix "Self Security" program participants. Systematic
exchanges will be executed upon the close of business on the 10th day of each
month or the next succeeding business day. Exchanges will be based upon each
Fund's net asset value per share next computed after the close of business on
the 10th day of each month (or next succeeding business day), without sales
charge. Systematic exchange forms are available from the Distributor.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS
If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that any dividends
and distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Phoenix Funds or any other
Affiliated Phoenix Fund at net asset value. You should obtain a current
prospectus and consider the objectives and policies of each Fund carefully
before directing dividends and distributions to another Fund. Reinvestment
election forms and prospectuses are available from Equity Planning.
Distributions may also be mailed to a second payee and/or address. Requests for
directing distributions to an alternate payee must be made in writing with a
signature guarantee of the registered owner(s). To be effective with respect to
a particular dividend or distribution, notification of the new distribution
option must be received by the Transfer Agent at least three days prior to the
record date of such dividend or distribution. If all shares in your account are
repurchased or redeemed or transferred between the record date and the payment
date of a dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
INVEST-BY-PHONE
This expedited investment service allows a shareholder to make an investment
in an account by requesting a transfer of funds from the balance of their bank
account. Once a request is phoned in, Equity Planning will initiate the
transaction by wiring a request for monies to the shareholder's commercial bank,
savings bank or credit union via Automated Clearing House (ACH). The
shareholder's bank, which must be an ACH member, will in turn forward the monies
to Equity Planning for credit to the shareholder's account. ACH is a computer
based clearing and settlement operation established for the exchange of
electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to 3:00 p.m. (New York time) to place their purchase
request. Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact the
shareholder's bank via ACH with appropriate instructions. The purchase is
normally credited to the shareholder's account the day following receipt of the
verbal instructions. The Trust may delay the mailing of a check for redemption
proceeds of Trust shares purchased with a check or via Invest-by-Phone service
until the Trust has assured itself that good payment has been collected for the
purchase of the shares, which may take up to 15 days. The Trust and Equity
Planning reserve the right to modify or terminate the Invest-by-Phone service
for any reason or to institute charges for maintaining an Invest-by-Phone
account.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to periodically redeem a portion
of your account on a predetermined monthly, quarterly, semiannual or annual
basis. A sufficient number of full and fractional shares will be redeemed so
that the designated payment is made on or about the 20th day of the month.
Shares are tendered for redemption by the Transfer Agent, as agent for the
shareowner, on or about the 15th of the month at the closing net asset value on
the date of redemption. The Systematic Withdrawal
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Program also provides for redemptions to be tendered on or about the 10th, 15th
or 25th of the month with proceeds to be directed through Automated Clearing
House (ACH) to your bank account. In addition to the limitations stated below,
withdrawals may not be less than $25 and minimum account balance requirements
shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B and Class C shareholders may withdraw up to 1%
of their aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B and Class C shareholders redeeming more shares
than the percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed. Accordingly,
the purchase of Class B or Class C Shares will generally not be suitable for an
investor who anticipates withdrawing sums in excess of the above limits shortly
after purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Funds' current Prospectus for further information.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Funds have no specific procedures
governing such account transfers.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the giving
of not less than 30 days written notice to the shareholder mailed to the address
of record. During the 60-day period the shareholder has the right to add to the
account to bring its value to $200 or more.
BY MAIL
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Trust redeem the shares. See the Funds' current
Prospectus for more information.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
BY CHECK (BOND FUND AND EMERGING MARKETS FUND ONLY)
Any shareholder of these Funds may elect to redeem shares held in his Open
Account by check. Checks will be sent to an investor upon receipt by Equity
Planning of a completed application and signature card (attached to the
application). If the signature card accompanies an individual's initial account
application, the signature guarantee section of the form may be disregarded.
However, the Trust reserves the right to require that all signatures be
guaranteed prior to the establishment of a check writing service account. When
an authorization form is submitted after receipt of the initial account
application, all signatures must be guaranteed regardless of account value.
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Checks may be drawn payable to any person in an amount of not less than $500,
provided that immediately after the payment of the redemption proceeds the
balance in the shareholder's Open Account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient number
of full and fractional shares in the shareholder's Open Account will be redeemed
to cover the amount of the check. The number of shares to be redeemed will be
determined on the date the check is received by the Transfer Agent. Presently
there is no charge to the shareholder for the check writing service, but this
may be changed or modified in the future upon two weeks written notice to
shareholders. Checks drawn from Class B and Class C accounts are subject to the
applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables a shareholder to receive
income accruing on the shares to be redeemed until such time as the check is
presented to Equity Planning for payment. Inasmuch as canceled checks are
returned to shareholders monthly, no confirmation statement is issued at the
time of redemption.
Shareholders utilizing withdrawal checks will be subject to Equity Planning's
rules governing checking accounts. A shareholder should make sure that there are
sufficient shares in his Open Account to cover the amount of any check drawn. If
insufficient shares are in the account and the check is presented to Equity
Planning on a banking day on which the Trust does not redeem shares (for
example, a day on which the New York Stock Exchange is closed), or if the check
is presented against redemption proceeds of an investment made by check which
has not been in the account for at least fifteen calendar days, the check may be
returned marked "Non-sufficient Funds" and no shares will be redeemed. A
shareholder may not close his account by a withdrawal check because the exact
value of the account will not be known until after the check is received by
Equity Planning.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Trust may make
payment of the redemption price either in cash or in kind. However, the Trust
has elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Trust at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to them
in computing the net asset value per share of a Fund. A shareholder receiving
such securities would incur brokerage costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information and conditions
attached to this privilege.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
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Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
QUALIFICATION AS A REGULATED INVESTMENT COMPANY ("RIC")
Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund has elected to qualify and intends to remain qualified as a RIC under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). In
each taxable year a Fund qualifies as a RIC, it (but not its shareholders) will
be relieved of federal income tax on that portion of its net investment income
and net capital gains that are currently distributed (or deemed distributed) to
its shareholders. To the extent that a Fund fails to distribute all of its
taxable income, it will be subject to corporate income tax (currently 35%) on
any retained ordinary investment income or short-term capital gains, and
corporate income tax (currently 35%) on any undistributed long-term capital
gains. Each Fund intends to make timely distributions, if necessary, sufficient
in amount to avoid the non-deductible 4% excise tax that is imposed on a RIC to
the extent that it fails to distribute, with respect to each calendar year, at
least 98% of its ordinary income for such calendar year and 98% of its net
capital gains as determined for a one-year period ending on October 31 of such
calendar year (or as determined on a fiscal year basis, if the Fund so elects).
The Code sets forth numerous criteria that must be satisfied in order for
each Fund to qualify as a RIC. Among these requirements, each Fund must meet the
following tests for each taxable year: (a) derive in each taxable year at least
90% of its gross income from dividends, interest and gains from the sale or
other disposition of securities; and (b) meet certain diversification
requirements imposed under the Code at the end of each quarter of the taxable
year. If in any taxable year each Fund does not qualify as a regulated
investment company, all of its taxable income will be taxed at corporate rates.
In addition, if in any tax year the Fund does not qualify as a RIC for state tax
purposes a capital gain dividend may not retain its character in the hands of
the shareholder for state tax purposes.
In the case of the International and Emerging Markets Funds, gains from
foreign currencies (i.e., gains from foreign currency options, foreign currency
futures and foreign currency forward contracts) are anticipated to constitute
qualifying income for purposes of the 90% test.
Section 988 of the Code provides special rules for foreign currency
transactions under which foreign currency gains or losses from forward
contracts, futures contracts that are not required to be marked-to-market and
unlisted options generally will be treated as ordinary income or loss.
In addition to meeting the 90% test, in order to qualify as a RIC each Fund
will be required to distribute annually to its shareholders as dividends (not
including "capital gains dividends," discussed below) at least 90% of its
ordinary investment income, short-term capital gains and tax exempt income, with
certain modifications. Each Fund intends to make distributions to shareholders
that will be sufficient to meet the 90% distribution requirement.
Each Fund must also diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of its total assets
consists of cash, cash items, U.S. Government securities, and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of that Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any issuer (other than U.S. Government
securities). For purposes of these diversification tests, the issuer of an
option on a particular security is the issuer of the underlying security. In the
case of a stock index futures contract or option thereon, the position taken by
the Internal Revenue Service in a recent letter ruling is that the issuers of
the stocks underlying the index, in proportion to the weighing of the stocks in
the computation of the index, are treated as the issuers of the instrument
irrespective of whether the underlying index is broad- based or narrow-based. In
the case of a foreign currency option, futures contract or forward contract,
however, there is as yet no specific guidance in the tax law concerning who will
be treated as the issuer of such instruments or how they will be valued for
purposes of these diversification tests.
Each Fund intends to comply with all of the foregoing criteria for
qualification as a RIC; however, there can be no assurance that the Fund will so
qualify and continue to maintain its status as a RIC. If a Fund were unable for
any reason to maintain its status as a RIC for any taxable year, adverse tax
consequences would ensue.
TAXATION OF SHAREHOLDERS
The Bond Fund expects that under normal conditions, at least 80% of its net
assets will be invested in state, municipal and other obligations the interest
on which is excluded from gross income for federal income tax purposes, and that
substantially all of its dividends therefore will be exempt interest dividends
which will be treated by its shareholders as excludable from federal gross
income. (The character of tax-exempt interest distributed by the Bond Fund will
flow through as tax-exempt interest to its shareholders provided that 50% or
more of the value of its assets at the end of each quarter of its taxable year
is invested in obligations the interest on which is excluded from gross income
for federal income tax purposes). An exempt interest dividend is
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any dividend or part thereof (other than a capital gain dividend) paid by the
Bond Fund with respect to its net federal excludable municipal security
interest, and designated as an exempt interest dividend in a written notice
mailed to shareholders not later than 60 days after the close of the taxable
year. The percentage of total dividends paid by the Bond Fund with respect to
any taxable year which qualify as exempt interest dividends will be the same for
all shareholders receiving dividends with respect to such year. If a shareholder
receives an exempt interest dividend with respect to any share and such share is
held for 6 months or less, any loss on the sale or exchange of such share will
not be allowed to the extent of the exempt interest dividend amount.
Interest on certain "private activity bonds" issued after August 7, 1986,
although otherwise tax-exempt, is treated as a tax preference item for
alternative minimum tax purposes. Under regulations to be promulgated, the Bond
Fund's exempt interest dividends will be treated as a tax preference item for
purposes of computing the alternative minimum tax liability of shareholders in
such Fund to the extent attributable to interest paid on "private activity"
bonds. Corporate shareholders should also be aware that the receipt of exempt
interest dividends could subject them to alternative minimum tax under the
provisions of Code Section 56(f) (relating generally to book income or adjusted
current earnings in excess of taxable income).
Interest on indebtedness incurred or continued by shareholders to purchase or
carry shares of the Bond Fund will not be deductible for federal income tax
purposes to the extent of the portion of the interest expense relating to exempt
interest dividends; that portion is determined by multiplying the total amount
of interest paid or accrued on the indebtedness by a fraction, the numerator of
which is the exempt interest dividends received by a shareholder in the
shareholder's taxable year and the denominator of which is the sum of the exempt
interest dividends and the taxable distributions received by the shareholder.
Distributions by the International, Real Estate and Emerging Markets Funds
from ordinary investment income and net short-term capital gains will be taxed
to the shareholders as ordinary dividend income to the extent of the earnings
and profits of the respective Funds. Similarly, any portion of the Bond Fund's
dividends which does not qualify as exempt interest dividends and any short-term
capital gain distribution will be taxed to the Bond Fund shareholders as
ordinary income for federal income tax purposes. Ordinary income dividends
received by corporate shareholders will qualify for the 70% dividends-received
deduction to the extent the Funds designate such amounts as qualifying dividend
distributions; however, the portion that may be so designated is subject to
certain limitations. As a result of these limitations, it is not currently
anticipated that certain distributions by Funds will be qualifying dividend
distributions. Distributions by a Fund that are designated as capital gain
distributions will be taxed to the shareholders as capital gains, and will not
be eligible for the corporate dividends-received deduction.
Dividends declared by the Funds to shareholders of record in October,
November or December will be taxable to such shareholders in the year that the
dividend is declared, even if it is not paid until the following year (so long
as it is actually paid by the Fund prior to February 1). Also, shareholders will
be taxable on the amount of long-term capital gains designated by a Fund by
written notice mailed to shareholders within 60 days after the close of the
year, even if such amounts are not actually distributed to them. Shareholders
will be entitled to claim a credit against their own federal income tax
liability for taxes paid by the Fund on such undistributed gains, if any. If a
shareholder receives a long-term capital dividend with respect to any share and
such share is held for less than 6 months, any loss on sale or exchange of such
share will be long-term capital loss to the extent of long-term capital dividend
payments.
Dividends (other than exempt interest dividends) and capital gain
distributions will be taxable to shareholders as described above whether
received in cash or in shares under a Fund's distribution reinvestment plan.
With respect to distributions received in cash or reinvested in shares purchased
on the open market, the amount of the distribution for tax purposes will be the
amount of cash distributed or allocated to the shareholder. With respect to
distributions made in shares issued by the Fund as a stock dividend, the amount
of the distribution will be the fair market value of the shares on the payment
date.
Shareholders should be aware that the price of shares of a Fund that are
purchased prior to a dividend or distribution by the Fund may reflect the amount
of the forthcoming dividend or distribution. Such dividend or distribution, when
made, would be taxable to shareholders under the principles discussed above even
though the dividend or distribution may reduce the net asset value of shares
below a shareholder's cost and thus represent a return of a shareholder's
investment in an economic sense.
FOREIGN TAX CREDIT
The International Fund may incur liability for foreign income and
withholding taxes on investment income. The Fund intends to qualify for and may
make an election permitted under Section 853 of the Code. The effect of such
election is that the shareholders of such Fund will be able to claim a credit or
deduction on their U.S. federal income tax returns for, and may treat as part of
the amounts distributed to them, their pro rata share of the income taxes paid
by the Fund to foreign countries. (The election is not available unless stocks
or securities in foreign corporations represent more than 50% of the value of
the total assets of the Fund). The shareholders may claim a deduction or credit
by reason of the Fund's election subject to the limitations imposed under
Section 904 of the Code. The deduction for foreign taxes paid may not be claimed
by individual shareholders who do not elect to itemize deductions on their
federal income tax returns although such shareholders may claim a credit for
foreign income taxes paid. In either case, shareholders will be required to
report taxable income in the amount of their respective pro rata share of
foreign taxes paid by the Fund. Although the International Fund intends to meet
the requirements of the Code to "pass through" such taxes, there can be no
assurance that it will be able to do so in the future.
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SALE OR EXCHANGE OF FUND SHARES
Gain or loss will be recognized by a shareholder upon the sale of his shares
in a Fund or upon an exchange of his shares in a Fund for shares in another
Fund. Provided that the shareholder is not a dealer in such shares, such gain or
loss will generally be treated as capital gain or loss, measured by the
difference between the adjusted basis of the shares and the amount realized
therefrom. Under current law, capital gains (whether long-term or short-term) of
individuals and corporations are fully includable in income and are taxed at the
regular federal income tax rates applicable to the shareholder's ordinary
income. Capital losses (whether long-term or short-term) may offset capital
gains plus (for non-corporate taxpayers only) up to $3,000 per year of ordinary
income.
TAX INFORMATION
Written notices will be sent to shareholders regarding the tax status of all
distributions made (or deemed to have been made) during each taxable year,
including the tax-exempt portion thereof (if applicable), the amount qualifying
for the dividends-received deduction (if applicable) and the amount designated
as capital gains dividends, undistributed capital gains (if any), tax credits
(if applicable), and cumulative return of capital (if any).
BACKUP WITHHOLDING
The Funds may be required to withhold federal income tax at a rate of 31% on
reportable dividends paid to certain noncorporate shareholders. Generally,
shareholders subject to such backup withholding will be those for whom a
taxpayer identification number and certain required certifications are not filed
with the Funds or who, to a Fund's knowledge, have furnished an incorrect
number.
FOREIGN SHAREHOLDERS
Dividends paid by a Fund from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien individual,
a foreign trust or estate, a foreign corporation or a foreign partnership (a
"foreign shareholder") will be subject to United States withholding tax at a
rate of 30% unless a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Foreign shareholders are urged to consult
their own tax advisors concerning the applicability of the United States
withholding tax and any foreign taxes.
OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences, described above,
applicable to an investment in a Fund, there may be state or local tax
considerations and estate tax considerations applicable to the circumstances of
a particular investor. In particular, distributions by the Bond Fund may be
subject to state and local taxation even though wholly or partially exempt for
federal income tax purposes. The foregoing discussion is based upon the Code,
judicial decisions and administrative regulations, rulings and practices, all of
which are subject to change and which, if changed, may be applied retroactively
to a Fund, its shareholders and/or its assets. No rulings have been sought from
the Internal Revenue Service with respect to any of the tax matters discussed
above.
The information included in the Prospectus with respect to taxes, in
conjunction with the foregoing, is a general and abbreviated summary of
applicable provisions of the Code and Treasury regulations now in effect as
currently interpreted by the courts and the Internal Revenue Service. The Code
and these Regulations, as well as the current interpretations thereof, may be
changed at any time by legislative, judicial, or administrative action.
THE DISTRIBUTOR
Equity Planning, a registered broker-dealer which is an indirect less than
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company, serves as
Distributor of the Trust's shares. Philip R. McLoughlin, a Trustee and President
of the Trust, is a director and officer of Equity Planning. Michael E. Haylon,
an officer of the Trust, is a director of Equity Planning; and G. Jeffrey Bohne,
Robert A. Driessen and William R. Moyer, officers of the Trust, are officers of
Equity Planning.
The Trust and Equity Planning have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Trust shares and the Trust has granted to Equity Planning the exclusive right to
purchase from the Trust and resell, as principal, shares needed to fill
unconditional orders for Trust shares. Equity Planning may sell Trust shares
through its registered representatives or through securities dealers with whom
it has sales agreements. Equity Planning may also sell Trust shares pursuant to
sales agreements entered into with bank-affiliated securities brokers who,
acting as agent for their customers, place orders for Trust shares with Equity
Planning. It is not anticipated that termination of sales agreements with banks
and bank affiliated securities brokers would result in a loss to their customers
or a change in the net asset value per share of a Fund of the Trust.
For its services under the distribution agreements, Equity Planning receives
sales charges on transactions in Trust shares and retains such charges less the
portion thereof allowed to its registered representatives and to securities
dealers and securities brokers with whom it has sales agreements. In addition,
Equity Planning may receive payments from the Trust pursuant to the Distribution
Plans described below. For the fiscal years ended November 30, 1997, 1998 and
1999, purchasers of shares of the Funds paid
29
<PAGE>
aggregate sales charges of $2,114,382, $4,260,271 and $1,269,311, respectively,
of which the Distributor received net commission of $494,335, $545,050 and
$500,085, respectively, for its services, the balance being paid to dealers. For
the fiscal year ended November 30, 1999, the Distributor received net commission
of $97,677 for Class A Shares and deferred sales charges of $402,408 for Class B
and Class C Shares.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as described below.
<TABLE>
<CAPTION>
EMERGING MARKET BOND FUND AND TAX-EXEMPT BOND FUND
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Under $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50 4.71 4.00
$100,000 but under $250,000 3.50 3.63 3.00
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
INTERNATIONAL FUND AND REAL ESTATE SECURITIES FUND
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
Under $50,000 5.75% 6.10% 5.25%
$50,000 but under $100,000 4.75 4.99 4.25
$100,000 but under $250,000 3.75 3.90 3.25
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan (the "Plan") due to waiver of the CDSC for
these Plan participants' purchases. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Trust and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Trust
through distribution fees, service fees or transfer agent fees or in some cases,
the Distributor may pay certain fees from its own profits and resources. From
its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time, pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6 million. If part or all of
such investment, including investments by qualified employee benefit plans, is
subsequently redeemed within one year of the investment date, the broker/dealer
will refund to the Distributor such amounts paid with respect to the investment.
In addition, the Distributor may pay the entire applicable sales charge on
purchases of Class A Shares to selected dealers and agents. From its own
resources, the Distributor intends to pay the following additional compensation
to Merrill Lynch, Pierce, Fenner & Smith, Incorporated: 0.25%
30
<PAGE>
on sales of Class A and B Shares, 0.10% on sales of Class C Shares, 0.10% on
sales of Class A shares sold at net asset value, and 0.10% annually on the
average daily net asset value of fund shares on which Merrill Lynch is broker of
record and which such shares exceed the amount of assets on which Merrill Lynch
is broker of record as of July 1, 1999. Any dealer who receives more than 90% of
a sales charge may be deemed to be an "underwriter" under the Securities Act of
1933. Equity Planning reserves the right to discontinue or alter such fee
payment plans at any time.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Trust and as such
performs administrative, bookkeeping and pricing functions for the Funds. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented costs to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Funds, at the following incremental
annual rates:
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Funds, PFPC, Inc. also charges minimum fees and additional fees to each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For services to the
Trust during the fiscal years ended November 30, 1997, 1998 and 1999, the
Financial Agent received fees of $541,814, $654,165 and $726,919, respectively.
DISTRIBUTION PLANS
The Trust has adopted a distribution plan for each class of shares (i.e., a
plan for the Class A Shares, a plan for the Class B Shares, and a plan for the
Class C Shares, collectively, the "Plans") in accordance with Rule 12b-1 under
the Act, to compensate the Distributor for the services it provides and for the
expenses it bears under the Underwriting Agreement. Each class of shares pays a
service fee at a rate of 0.25% per annum of the average daily net assets of such
class of the Fund and a distribution fee based on average daily net assets at
the rate of 0.75% per annum for Class B Shares and 0.75% per annum for Class C
Shares.
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Trust shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
Each Plan requires that at least quarterly the Trustees of the Trust review a
written report with respect to the amounts expended under the Plans and the
purposes for which such expenditures were made. While the Plans are in effect,
the Trust will be required to commit the selection and nomination of candidates
for Trustees who are not interested persons of the Trust to the discretion of
other Trustees who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is approved annually in advance
by votes of the majority of both (a) the Board of Trustees of the Trust and (b)
the Rule 12b-1 Trustees, cast in person at a meeting called for the purpose of
voting on the Plan and any agreements related to the Plan.
For the fiscal year ended November 30, 1999 the Trust paid Rule 12b-1 Fees in
the amount of $2,607,375, of which the Distributor received $1,060,487,
unaffiliated broker-dealers received $1,310,508 and W.S. Griffith & Co., Inc.,
an affiliate, received $236,380. The Rule 12b-1 payments were used for (1)
compensating dealers, $2,815,291, (2) compensating sales
31
<PAGE>
personnel, $2,221,997, (3) advertising, $1,317,627, (4) printing and mailing of
prospectuses to other than current shareholders, $32,904, (5) service costs,
$216,769 and (6) other, $446,543.
No interested person of the Trust and no Trustee who is not an interested
person of the Trust, as that term is defined in the Investment Company Act of
1940, had any direct or indirect financial interest in the operation of the
Plans.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend the Plans.
MANAGEMENT OF THE TRUST
The Trust is an open-end management investment company known as a mutual
fund. The Trustees of the Trust ("Trustees") are responsible for the overall
supervision of the Trust and perform the various duties imposed on Trustees by
the Investment Company Act of 1940 and Delaware business trust law.
TRUSTEES AND OFFICERS
The Trustees and Officers of the Trust and their business affiliations for
the past five years are set forth below and, unless otherwise noted, the address
of each Trustee and executive officer is 56 Prospect Street, Hartford,
Connecticut, 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (1999-present).
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present). Chairman, Accuhealth (1994-present), Trism, Inc.
(1994-present), Realty Foundation of New York (1972-present), and
New York Housing Partnership Development Corp. (1985-present),
Vice Chairman, The Academy of Political Science (1985-present).
Director/Trustee, Phoenix Funds (1993-present). Trustee,
Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc., Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present) and Phoenix-Seneca Funds (2000-present).
Chairman/Member, Audit Committee of the City of New York
(1981-1996). Advisory Director, Blackrock Fannie Mae Mortgage
Securities Fund (1989-1996) and Fund Directions (1993-1998).
Harry Dalzell-Payne (71) Trustee Director/Trustee, Phoenix Funds (1993-present). Trustee,
The Flat Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Elmore Court Mutual Funds (1996-present) and Phoenix-Seneca Funds
Elmore, GLO5, 9623NT (2000-present). Director, Duff & Phelps Utilities Tax-Free Income
U.K. Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Trustee, Phoenix-Seneca Funds (1999-present).
Formerly a Major General of the British Army.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
*Francis E. Jeffries (70) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series Inc., Phoenix Duff & Phelps Institutional
#902 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Naples, FL 34108 (2000-present). Director, Duff & Phelps Utilities Income Inc.
(1987-present), Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1993-present). Director, The Empire District Electric
Company (1984-present). Director (1989-1997), Chairman of the
Board (1993-1997), President (1989-1993), and Chief Executive
Officer (1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (61) Trustee Chairman (1995-present) and Chief Executive Officer (1995-1999),
Chairman Carson Products Company. Director/Trustee, Phoenix Funds
Carson Product Company (1980-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
64 Ross Road Duff & Phelps Institutional Mutual Funds (1996-present) and
Savannah, GA 30750 Phoenix-Seneca Funds (2000-present). Director, Equifax Corp.
(1991-present) and Evergreen International Fund, Inc.
(1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust.
*Philip R. McLoughlin (54) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-present), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-1999), Phoenix Equity Planning
Corporation. Chairman and Chief Executive Officer, Phoenix/Zweig
Advisers LLC (1999-present). Director, PXRE Corporation (Delaware)
(1985-present), and World Trust Fund (1991-present). Director and
Executive Vice President, Phoenix Life and Annuity Company
(1996-present). Director and Executive Vice President, PHL
Variable Insurance Company (1995-present). Director, Phoenix
Charter Oak Trust Company (1996-present). Director and Vice
President, PM Holdings, Inc. (1985-present). Director, PHL
Associates, Inc. (1995-present). Director (1992-present) and
President (1992-1994), W.S. Griffith & Co., Inc.
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen
Colts Neck, NJ 07722 Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present).
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Boston, MA 02109 Funds (2000-present). Director, AIB Govett Funds (1991-present).
Director, Investors Financial Service Corporation (1995-present),
Investors Bank & Trust Corporation (1995-present), Plymouth
Rubber Co. (1995-present), Stifel Financial (1996-present),
Command Systems, Inc. (1998-present), Connecticut River Bancorp
(1998-present) and Endowment for Health, Inc. (1999-present).
Member, Chief Executives Organization (1996-present). Vice
Chairman, Massachusetts Housing-Partnership (1998-2000).
Director, Blue Cross and Blue Shield of New Hampshire (1994-1999).
Herbert Roth, Jr. (72) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
P.O. Box 909 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Sherborn, MA 01770 (2000-present). Director, Boston Edison Company (1978-present),
Landauer, Inc. (medical services) (1970-present), Tech Ops./
Sevcon, Inc. (electronic controllers) (1987-present), and Mark IV
Industries (diversified manufacturer) (1985-present). Member,
Directors Advisory Council, Phoenix Home Life Mutual Insurance
Company (1998-present). Director, Phoenix Home Life Mutual
Insurance Company (1972-1998).
Richard E. Segerson (54) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (69) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, UST Inc. (1995-present), HPSC Inc.
(1995-present), Duty Free International, Inc. (1997-present) and
Compuware (1996-present) and Burroughs Wellcome Fund
(1996-present). Visiting Professor, University of Virginia
(1997-present). Chairman, Dresing, Lierman, Weicker (1995-1996).
Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (42) Executive Director and Executive Vice President, Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director (1994-present),
President President (1995-present), Executive Vice President (1994-1995),
Vice President (1991-1994), Phoenix Investment Counsel, Inc.
Director, Phoenix Equity Planning Corporation (1995-present).
Executive Vice President, Phoenix Funds (1993-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix-Seneca
Funds. Executive Vice President (1997-present), Vice President
(1996-1997), Phoenix Duff & Phelps Institutional Mutual Funds.
Senior Vice President, Securities Investments, Phoenix Home Life
Mutual Insurance Company (1993-1995).
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
John F. Sharry (48) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-present), Phoenix Investment
President Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-1997). Executive Vice President,
Phoenix Funds (1998-present), Phoenix-Aberdeen Series Fund
(1998-present) and Phoenix-Seneca Funds (2000-present). Managing
Director, Director and National Sales Manager, Putnam Mutual Funds
(1993-1995).
Gail P. Seneca (47) Senior Vice President and Chief Executive and Investment Officer, Seneca
President Capital Management LLC (1996-present). Managing Director,
Equities, Phoenix Investment Counsel, Inc. (1998-present). Senior
Vice President, Phoenix Duff & Phelps Institutional Mutual Funds
(1999-present), The Phoenix Edge Series Fund (1998-present),
Phoenix Multi-Portfolio Fund (1998-present) and Phoenix Strategic
Equity Series Fund (1998-present). Managing General Partner and
Chief Executive and Investment Officer, GMG/Seneca Capital
Management LP (1989-present). President and Trustee,
Phoenix-Seneca Funds (1996-present). General Partner, Genesis
Merchant Group. LP (1990-1996). President, GenCap, Inc.
(1994-present).
James D. Wehr (43) Senior Vice Senior Vice President (1998-present), Managing Director
President (1996-1998), Fixed Income, Vice President (1991-1996), Phoenix
Investment Counsel, Inc. Senior Vice President and Chief
Investment Officer, Duff & Phelps Utilities Tax Free
Income, Inc. (1997-present). Senior Vice President
(1997-present), Vice President (1988-1997), Phoenix
Multi-Portfolio Fund; Senior Vice President (1997-present),
Vice President (1990-1997), Phoenix Series Fund; Senior Vice
President (1997-present), Vice President (1993-1997)
Phoenix-Goodwin California Tax Exempt Bond Fund
and Senior Vice President (1997-present), Vice President
(1996-1997), Phoenix Duff & Phelps Institutional
Mutual Funds. Senior Vice President (1997-present),
Phoenix-Goodwin Multi-Sector Fixed Income Fund,
Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Oakhurst Income & Growth Fund and
Phoenix-Oakhurst Strategic Allocation Fund,
Managing Director, Public Fixed Income, Phoenix
Home Life Insurance Company (1991-1995).
David L. Albrycht (39) Vice Managing Director, Fixed Income (1996-present) and Vice President
President (1995-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Multi-Portfolio Fund (1993-present), Phoenix-Goodwin
Multi-Sector Short Term Bond Fund (1993-present), Phoenix-Goodwin
Multi-Sector Fixed Income Fund, (1994-present), and
Phoenix Series Fund (1997-present). Fund Manager,
Phoenix Home Life Mutual Insurance Company (1994-1995).
Robert A. Driessen (53) Vice President and Vice President, Compliance, Phoenix Investment Partners, Ltd.
Assistant Secretary (1999-present). Vice President, Phoenix Funds, Phoenix-Aberdeen
Series Fund, Phoenix-Duff & Phelps Institutional Mutual Funds and
Phoenix Seneca Funds (1999-present). Vice President, Risk
Management Liaison, Bank of America (1996-1999). Vice President,
Securities Compliance, The Prudential Insurance Company of America
(1993-1996). Branch Chief/Financial Analyst, Securities and
Exchange Commission, Division of Investment Management (1972-1993).
Timothy M. Heaney (35) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Investment Analyst (1995-1996),
Phoenix Investment Counsel, Inc. Vice President, Phoenix
Multi-Portfolio Fund (1996-present), Phoenix-Goodwin California
Tax Exempt Bond Fund (1996-present) and Duff & Phelps Utilities
Tax Free Income, Inc. (1997-present).
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Ron K. Jacks (35) Vice Equity Portfolio Manager, Seneca Capital Management LLC
President (1996-present). General Partner and Equity Portfolio Manager,
GMG/Seneca Capital Management LP (1995-present). Managing
Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Strategic Equity Series Fund
(1998-present) and Phoenix Multi-Portfolio Fund (1998-present).
Secretary (1996-1998) and Trustee (1996-1997), Phoenix-Seneca
Funds.
Peter S. Lannigan (39) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Vice President (1995-1996), Phoenix
Investment Counsel, Inc. Vice President, Phoenix Multi-Portfolio
Fund (1995-present). Director, Public Fixed Income, Phoenix Home
Life Mutual Insurance Company (1993-1995). Various positions with
Standard & Poor's Corporation (1989-1993).
William R. Moyer (56) Vice Executive Vice President and Chief Financial Officer
President (1999-present), Senior Vice President and Chief Financial Officer
(1995-1999), Phoenix Duff & Phelps Corporation. Senior Vice
President, (1990-present), Director (1998-present), Treasurer
(1998-present and 1994-1996), and Chief Financial Officer Finance
(1996-present), Phoenix Equity Planning Corporation. Senior Vice
President (1990-present), Director (1998-present), Chief Financial
Officer (1996-present) and Treasurer (1994-present), Phoenix
Investment Counsel, Inc. Senior Vice President and Chief Financial
Officer (1996-present), Treasurer (1999-present), Duff & Phelps
Investment Management Co. Vice President, Phoenix Funds
(1990-present), Phoenix-Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-present).
Executive Vice President, Phoenix-Seneca Funds (2000-present).
Senior Vice President and Chief Financial Officer, W. S. Griffith
& Co., Inc. (1992-1995) and Townsend Financial Advisers, Inc.
(1993-1995). Vice President, Investment Products Finance, Phoenix
Home Life Mutual Insurance Company (1990-1995).
Richard D. Little (52) Vice Partner, Seneca Capital Management LP (1989-present). Managing
President Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present). Phoenix Strategic Equity Series Fund
(1998-present), Phoenix Multi-Portfolio Fund (1998-present) and
Phoenix Duff & Phelps Institutional Mutual Funds (1999-present).
Michael Schatt (53) Vice Managing Director, Phoenix Investment Partners, Ltd.
Phoenix Investment President (1994-present). Senior Vice President, Duff & Phelps Investment
Partners, Ltd. Management Co. (1996-present). Vice President, Duff & Phelps
55 East Monroe St. Utilities Income, Inc. (1997-present), and Phoenix Multi-Portfolio
Suite 3600 Fund (1997-present). Director, Real Estate Advisory Practice,
Chicago, IL 60603 Coopers & Lybrand (1990-1994).
Nancy G. Curtiss (48) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation.
Treasurer, Phoenix Funds 1994-present), Phoenix Duff &
Phelps Institutional Mutual Funds (1995-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix-Seneca
Funds (2000-present). Second Vice President and Treasurer, Fund
Accounting, Phoenix Home Life Mutual Insurance Company
(1994-1995).
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
G. Jeffrey Bohne (53) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Senior Vice President (1999-present)
Greenfield, MA 01301 and Vice President (1996-1999), Mutual Fund Customer Service; Vice
President, Transfer Agent Operations (1993-1996), Phoenix Equity
Planning Corporation. Secretary/Clerk, Phoenix Funds (1993-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix-Seneca
Funds (2000-present).
----------------------
</TABLE>
*Trustees identified with an asterisk are considered to be interested persons
of the Trust (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation or Phoenix Investment Partners, Ltd.
For services rendered to the Trust for the fiscal year ended November 30,
1999, the Trustees received an aggregate of $91,462. For services on the Boards
of Directors/Trustees of the Phoenix Funds, each Trustee who is not a full-time
employee of the Adviser or any of its affiliates currently receives a retainer
at the annual rate of $40,000 and a fee of $2,500 per joint meeting of the
Boards. Each Trustee who serves on the Audit Committee receives a retainer at
the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee meeting
attended. Each Trustee who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of Trustees.
Trustee fee costs are allocated equally to each of the Funds and the Funds
within the Phoenix Funds complex. The foregoing fees do not include
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of the Adviser who are not interested persons are
compensated for their services by the Adviser and receive no compensation from
the Trust.
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM TRUST AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (31 FUNDS)
NAME FROM TRUST OF TRUST EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- ---------- ----------------- --------------- ----------------
<S> <C> <C>
Robert Chesek $ 8,662 $63,750
E. Virgil Conway+ $11,250 $83,250
Harry Dalzell-Payne+ $10,162 $95,000
Francis E. Jeffries $ 8,250* $61,000
Leroy Keith, Jr. $ 8,662 None None $63,750
Philip R. McLoughlin+ $ 0 for any for any $ 0
Everett L. Morris+ $ 7,500* Trustee Trustee $57,750
James M. Oates+ $ 9,750 $72,250
Herbert Roth, Jr.+ $ 8,100 $59,250
Richard E. Segerson $ 9,750* $72,000
Lowell P. Weicker $ 9,375 $68,750
-------------------
</TABLE>
*This compensation (and the earnings thereon) will be deferred pursuant to the
Deferred Compensation Plan. At September 30, 2000, the total amount of
deferred compensation (including interest and other accumulation earned on
the original amounts deferred) accrued for Messrs. Jeffries, Morris, Roth and
Segerson was $547,732.52, $210,498.92, $178,770.56 and $129,978.47,
respectively. At present, by agreement among the Fund, the Distributor and
the electing director, director fees that are deferred are paid by the Fund
to the Distributor. The liability for the deferred compensation obligation
appears only as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
At November 7, 2000, the Trustees and officers as a group owned less than 1%
of the then outstanding shares of any class of any of the Funds.
37
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of November 7, 2000 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially own 5% or more of any class of the Funds' equity
securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF THE CLASS NUMBER OF SHARES
------------------- -------------- ----------------------- ----------------
<S> <C> <C> <C>
MLPF&S for the Sole International Fund 11.59% 221,654.933
Benefit of its Customers Class B
Attn: Fund Administration International Fund 11.51% 23,030.106
4800 Deer Lake Dr. E. 3rd Fl. Class C
Jacksonville, FL 32246-6484 Emerging Markets Bond Fund 8.10% 605,621.512
Class B
Emerging Markets Bond Fund 11.28% 37,446.358
Class C
Tax-Exempt Bond Fund 26.71% 121,634.704
Class B
PaineWebber for the Benefit International Fund 5.44% 10,885.341
Of Grant E. Moulton & Class C
Elynne R. Moulton JTWROS
2348 Marsh Court
Santa Rosa, CA 95403-2330
PaineWebber for the Benefit International Fund 5.99% 11,980.831
Of Dr. James L. Stucky Class C
Chiropractic R. D. A.
315 3rd Avenue, SW
Plainview, MN 55964-1330
Phoenix Home Life Real Estate Securities 36.79% 563,060.977
Attn: Bonnie Mally Class A
One American Row
Hartford, CT 06115-2521
Phoenix Home Life Emerging Markets Bond 9.98% 461,555.983
Attn: Pamela Levesque Class A
One American Row
Hartford, CT 06115-2521
Painewebber for the Benefit of Emerging Markets Bond 16.56% 766,002.169
SD Rescue Mission & N. County Class A
Interfaith Counsil Unitrust
George R. Wynhoff, TTEE
17474 Frondoso Drive
San Diego, CA 92128-1313
Elmer J. Krauss Partner Emerging Markets Bond Fund 12.48% 41,407.504
Krauss Portfolio Ltd Class C
715 N. Sherrill Street
Tampa, FL 33609-1109
Sharon K. Martin TTEE Emerging Markets Bond Fund 7.24% 24,009.604
U/A dtd June 15, 2000 Class C
Max L. Martin Credit Shelter Trust
948 N. 1050 Road
Lawrence, KS 66047-9419
Donald R. Graham Tax-Exempt Bond Fund 9.08% 41,353.833
Jacqueline B. Graham JT WROS Class B
P.O. Box 21
Spalding, MI 49886-0021
</TABLE>
38
<PAGE>
ADDITIONAL INFORMATION
The Trust's Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the
Securities and Exchange Commission which may be obtained from the Commission's
principal office at 450 Fifth Street, N.W., Washington, DC 20549, upon payment
of the fee prescribed by the rules and regulations promulgated by the
Commission.
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
series or Funds and different classes of those Funds. Holders of shares of a
Fund have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to that Fund. Shareholders of all
Funds vote on the election of Trustees. On matters affecting an individual Fund
(such as approval of an investment advisory agreement or a change in fundamental
investment policies) and so on matters affecting an individual class (such as
approval of matters relating to a Plan of Distribution for a particular class of
shares), a separate vote of that Fund or Class is required. The Trust does not
hold regular meetings of shareholders. The Trustees will call a meeting when at
least 10% of the outstanding shares so request in writing. If the Trustees fail
to call a meeting after being so notified, the Shareholders may call the
meeting. The Trustees will assist the Shareholders by identifying other
shareholders or mailing communications, as required under Section 16(c) of the
1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. The Declaration of Trust provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability, which
is considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
FINANCIAL STATEMENTS
The Financial Statements for the Trust's fiscal year ended November 30, 1999
and for the period ended May 31, 2000, appearing in the Fund's 1999 Annual
Report and May 2000 Semiannual Report to Shareholders, are incorporated herein
by reference.
REPORTS TO SHAREHOLDERS
The fiscal year of the Trust ends on November 30. The Trust will send
financial statements to its shareholders at least semiannually. An annual report
containing financial statements audited by the Trust's independent accountants,
will be sent to shareholders each year.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIANS AND TRANSFER AGENT
The custodian of the assets of the Bond Fund, Real Estate Fund, Emerging
Markets Fund and Tax Sensitive Growth Fund is State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts, 02101. The custodian of the assets
of the International Fund is Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109. The Trust has authorized the custodians to appoint
one or more subcustodians for the assets of the Trust held outside the United
States. The securities and other assets of each Fund of the Trust are held by
each Custodian or any subcustodian separate from the securities and assets of
each other Fund.
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Trust (the "Transfer Agent") for
which it is paid $22.25 for each designated daily dividend shareholder account
and $17.95 for each designated non-daily dividend shareholder account plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents shall be paid a fee by the Transfer Agent.
39
<PAGE>
APPENDIX
A-1 AND P-1 COMMERCIAL PAPER RATINGS
The Trust will only invest in commercial paper which at the date of
investment is rated A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Services, Inc., or, if not rated, is issued or guaranteed by companies
which at the date of investment have an outstanding debt issue rated AA or
higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by Standard & Poor's Corporation ("S&P") has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has a strong
position within the industry. The reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Services, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationship which exists with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.
MOODY'S INVESTORS SERVICE, INC. CORPORATE BOND RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt-edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they compromise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate
and thereby not well safeguarded during both good and bad times over
the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
40
<PAGE>
STANDARD AND POOR'S CORPORATION'S CORPORATE BOND RATINGS
AAA: This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay
principal and interest.
AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small
degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and
interest for bonds in this category than for bonds in the A category.
BB, B,
CCC, CC: Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to issuer's capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
D: Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.
The D rating also will be used upon the filing of a bankruptcy
petition if debt service payments are jeopardized.
41
<PAGE>
Phoenix Investment Partners
Prospectus
November 30, 2000
-------- Seneca
Phoenix-Seneca
Tax Sensitive Growth Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or
disapproved of these securities or
determined if this prospectus is
truthful or complete. Any representation
to the contrary is a criminal offense.
This prospectus contains important
information that you should know
before investing in the Phoenix-Seneca
Tax Sensitive Growth Fund. Please read
it carefully and retain it for future
reference.
[logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
[VERSION B]
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Investment Risk and Return Summary................... 1
Fund Expenses........................................ 4
Additional Investment Techniques..................... 5
Management of the Fund............................... 6
Pricing of Fund Shares............................... 10
Sales Charges........................................ 11
Your Account......................................... 13
How to Buy Shares.................................... 15
How to Sell Shares................................... 15
Things You Should Know When Selling Shares........... 16
Account Policies..................................... 17
Investor Services.................................... 19
Tax Status of Distributions.......................... 19
Financial Highlights................................. 20
Additional Information............................... 21
[TRIANGLE] Phoenix
Seneca Tax
Sensitive
Growth
Fund
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
Phoenix-Seneca Tax Sensitive Growth Fund has an investment objective to seek
capital appreciation consistent with maximizing after tax returns. There is no
guarantee that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, the fund invests at least 65% of its total assets
in common stocks, primarily common stocks of domestic (U.S.) growth companies
of any size.
> The adviser manages the fund's investment program and general operation of
the fund and the subadviser manages the investments of the fund. The
subadviser seeks to maximize after-tax returns while promoting growth with
controlled risk.
> The subadviser seeks to maximize after-tax returns by employing any or all of
the following strategies:
o selecting securities the subadviser believes may achieve high pre-tax
returns with emphasis on the likelihood of long-term returns rather than
short-term returns;
o limiting turnover when it is believed to be appropriate;
o holding securities to achieve long-term capital gain status when possible;
and
o matching any losses with gains when the subadviser believes it to be
advantageous.
> The subadviser's growth strategy uses a screening process to select stocks of
companies that it believes are:
o growing earnings at accelerated rates;
o producing quality, sustainable earnings;
o reasonably valued relative to their growth rate and to the market;
o well managed; and
o have potential to exceed earnings expectations (so-called "earnings
surprisers").
Phoenix-Seneca Tax Sensitive Growth Fund 1
<PAGE>
> Stocks are reviewed for sale if:
o earnings reports disappoint;
o valuation levels reach the top of their historic levels; or
o earnings momentum peaks.
> Approximately 30-50 securities are selected for the fund's portfolio.
Temporary Defensive Strategy: If the subadviser believes that market conditions
are not favorable to the fund's principal strategies, the fund may invest
without limit in cash and cash equivalents. In such instances, the fund may not
achieve its investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
RISKS RELATED TO PRINCIPAL INVESTMENT STRATEGIES
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of the fund's investments that supports your share value can decrease.
If between the time you purchase shares and the time you sell shares the value
of the fund's investments decreases, you will lose money.
Investment values can decrease for a number of reasons. Conditions affecting the
overall economy, specific industries or companies in which the fund invests can
be worse than expected and investments may fail to perform as the adviser
expects. As a result, the value of your shares may decrease.
GROWTH STOCKS
Because growth stocks typically make little or no dividend payments to
shareholders, investment return is based on a stock's capital appreciation,
making return more dependent on market increases and decreases. Growth stocks
are therefore more volatile than non-growth stocks to market changes, tending to
rise faster when markets rise and drop more sharply when markets fall.
SMALL AND MEDIUM CAPITALIZATIONS
Companies with smaller capitalizations are often companies with a limited
operating history or companies in industries that have recently emerged due to
cultural, economic, regulatory or technological developments. Such developments
can have a significant impact or negative effect on small and medium
capitalization companies and their stock performance and can make investment
returns highly volatile. Product lines are often less diversified and subject to
competitive threats. Smaller capitalization stocks are subject to varying
patterns of trading volume and may, at times, be difficult to sell.
2 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
TAX MANAGEMENT STRATEGY
There is no guarantee that strategies aimed at avoiding the recognition of large
capital gains will be successful. As a result, the fund may have taxable gains
from time to time. In addition, certain tax advantages currently available to
reduce after-tax returns may be negatively affected by future state and federal
tax legislation.
PERFORMANCE TABLES
Performance tables are not included for the Phoenix-Seneca Tax Sensitive Growth
Fund because the fund has not had annual returns for at least one calendar year.
Phoenix-Seneca Tax Sensitive Growth Fund 3
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS X
SHARES SHARES SHARES SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM
YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 5.75% None None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(c) 1%(d) None
Maximum Sales Charge (load) Imposed on Reinvested
Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
-----------------------------------------------------
CLASS A CLASS B CLASS C CLASS X
SHARES SHARES SHARES SHARES
------ ------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT
ARE DEDUCTED FROM FUND ASSETS)(A)
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution and Service (12b-1) Fees(e) 0.25% 1.00% 1.00% None
Other Expenses 0.64% 0.64% 0.64% 0.64%
----- ----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES(b) 1.64% 2.39% 2.39% 1.39%
===== ===== ===== =====
</TABLE>
----------------
(a) The fund commenced operations on March 1, 2000. The percentages indicated
are estimates and actual expenses may be more or less than the amounts shown.
(b) The fund's investment adviser has agreed to reimburse through March 31, 2001
the Phoenix-Seneca Tax Sensitive Growth Fund's expenses, other than Management
Fees and Distribution and Service Fees, to the extent that such expenses exceed
0.35% for each Class of Shares. Actual Total Fund Operating Expenses, after
expense reimbursement, would be 1.35% for Class A Shares, 2.10% for Class B
Shares, 2.10% for Class C Shares, and 1.10% for Class X Shares.
(c) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(d) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(e) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
4 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A $732 $1063
-----------------------------------------------------------------------------------------------------------------
Class B $642 $945
-----------------------------------------------------------------------------------------------------------------
Class C $342 $745
-----------------------------------------------------------------------------------------------------------------
Class X $142 $440
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class B $242 $745
-----------------------------------------------------------------------------------------------------------------
Class C $242 $745
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
In addition to the Principal Investment Strategies and Risks Related to
Principal Investment Strategies, the fund may engage in the following investment
techniques as indicated:
DEBT SECURITIES
The fund may invest in preferred stocks, warrants and other debt instruments,
including bonds convertible into common stocks. The value of debt instruments is
inversely related to interest rates. Generally, if interest rates rise, the
value of fixed income securities will fall. Should the fund invest in debt
securities with lower credit ratings and/or longer maturities, the risk of
negative price effects and default increases.
DERIVATIVES
The fund may invest in options transactions, financial futures and related
options. The fund intends to invest in the securities primarily for hedging
purposes, but may invest in these securities as an investment unrelated to
hedging. Derivatives may be less liquid than other securities and the
counterparty to such transaction may not perform as expected. Futures
Phoenix-Seneca Tax Sensitive Growth Fund 5
<PAGE>
involve market risk in excess of their value, hedging transactions may limit
returns, and premiums paid could be lost.
FOREIGN INVESTING
The fund may invest in securities of foreign (non-U.S.) issuers. Foreign
investment will primarily be through American Depository Receipts (ADRs).
Foreign markets and currencies may not perform as well as U.S. markets, and
dividends and other income payable on foreign securities may be subject to
foreign taxes.
SECURITIES LENDING
The fund may loan portfolio securities to increase its investment returns. If
the borrower is unwilling or unable to return the borrowed securities when due,
the fund can suffer losses.
UNRATED FIXED INCOME SECURITIES
The fund may invest in unrated securities. Unrated securities may not be lower
in quality than rated securities, but due to their perceived risk, they may not
have as broad a market as rated securities. Analysis of unrated securities is
more complex than for rated securities, making it more difficult for the
subadviser to accurately predict risk.
The fund may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the fund.
MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------
THE ADVISERS
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
fund and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix acts as
the investment adviser for 14 fund companies totaling 37 mutual funds, as
subadviser to two fund companies totaling three mutual funds and as adviser to
institutional clients. As of December 31, 1999, Phoenix had $25.7 billion in
assets under management. Phoenix has acted as an investment adviser for over
sixty years.
Seneca Capital Management LLC ("Seneca") is the investment subadviser to the
fund and is located at 909 Montgomery Street, San Francisco, California 94133.
Seneca acts as a subadviser to nine mutual funds and as investment adviser to
institutions and individuals. As of December 31, 1999, Seneca had $9.2 billion
in assets under management. Seneca has been (with its predecessor, GMG/Seneca
Capital Management LP ("GMG/Seneca")) an investment adviser since 1989.
6 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
Subject to the direction of the fund's Board of Trustees, Phoenix is responsible
for managing the fund's investment program and the general operations of the
fund. Seneca, as subadviser, is responsible for day-to-day management of the
fund's portfolio. Seneca manages the fund's assets to conform with the
investment policies as described in this prospectus. The fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
fund's net assets at the following rates:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
$1st billion $1+ billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fee 0.75% 0.70% 0.65%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix pays Seneca a subadvisory fee at the following rates:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
$1st billion $1+ billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Subadvisory Fee 0.375% 0.350% 0.325%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
The adviser has voluntarily agreed to assume total fund operating expenses of
the fund excluding interest, taxes, brokerage fees, commissions and
extraordinary expenses, until March 31, 2001, to the extent that such expenses
exceed the following percentages of the average annual net asset values for the
fund:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
Class A Class B Class C Class X
Shares Shares Shares Shares
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Sensitive 1.35% 2.10% 2.10% 1.10%
Growth Fund
-----------------------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO MANAGEMENT
Investment and trading decisions for the fund are made by a team of managers and
analysts headed by Gail P. Seneca. The team leaders, which include Ms. Seneca,
Richard D. Little and Ronald K. Jacks, are primarily responsible for the
day-to-day decisions related to the fund.
Gail P. Seneca. Ms. Seneca serves as Co-Manager of the fund. Ms. Seneca also
serves as Co-Manager of Phoenix-Seneca Growth Fund and Phoenix-Seneca Strategic
Theme Fund of Phoenix Strategic Equity Series Fund and the Phoenix Duff & Phelps
Institutional Growth Stock Portfolio of Phoenix Duff & Phelps Institutional
Mutual Funds. Ms. Seneca also serves as a team leader for each of the
Phoenix-Seneca Funds. Ms. Seneca has been the Chief Executive and Investment
Officer of Seneca or GMG/Seneca since November 1989. From October 1987 until
October 1989, she was Senior Vice President of the Asset Management Division of
Wells Fargo Bank, and, from October 1983 to September 1987, she was Investment
Strategist and Portfolio Manager for Chase Lincoln Bank, heading the fixed
income division.
Phoenix-Seneca Tax Sensitive Growth Fund 7
<PAGE>
Richard D. Little. Mr. Little serves as Co-Manager of the fund. Mr. Little
serves as Co-Manager of Phoenix-Seneca Growth Fund and Phoenix-Seneca Strategic
Theme Fund of Phoenix Strategic Equity Series Fund and the Phoenix Duff & Phelps
Institutional Growth Stock Portfolio of Phoenix Duff & Phelps Institutional
Mutual Funds. Mr. Little also serves as a Portfolio Manager for Phoenix-Seneca
Mid-Cap "EDGE"(SM) Fund of Phoenix-Seneca Funds. Mr. Little has been Director of
Equities with Seneca or GMG/Seneca since December 1989. Before he joined
GMG/Seneca, Mr. Little held positions as an analyst, board member, and regional
manager with Smith Barney, NatWest Securities, and Montgomery Securities.
Ronald K. Jacks. Mr. Jacks serves as Co-Manager of the fund. He also serves as
Co-Manager of the Phoenix-Seneca Growth and Phoenix-Seneca Strategic Theme Fund
of Phoenix Strategic Equity Series Fund and the Phoenix Duff & Phelps
Institutional Growth Stock Portfolio of Phoenix Duff & Phelps Institutional
Mutual Funds. Mr. Jacks also serves as a Portfolio Manager for Phoenix-Seneca
Mid-Cap "EDGE"(SM) Fund of Phoenix-Seneca Funds. Mr. Jacks was Secretary of the
Phoenix-Seneca Funds from February 1996 through February 1998. Mr. Jacks was a
Trustee of Seneca Funds from February 1996 through June 1997. Mr. Jacks has been
a Portfolio Manager with Seneca or GMG/Seneca since July 1990.
PRIOR INVESTMENT PERFORMANCE OF SENECA
The following table sets forth composite performance data relating to the
historical performance of the private accounts managed by Seneca investment
professionals that have substantially the same investment objectives, policies,
strategies and risks as the fund. The data is provided to illustrate the past
performance of Seneca in managing substantially similar accounts as compared to
the S&P 500. Investors should not consider this performance data as an
indication of past or future performance of the fund or of Seneca.
Seneca has calculated its composite performance data in compliance with the
Performance Presentation Standards of the Association for Investment Management
and Research ("AIMR-PPSTM"), except that net, rather than gross, information was
used. Net performance results include commission and custodial expenses, as well
as management fees. Gross results do not reduce performance by the amount of
investment management fees. AIMR has not been involved with the preparation or
review of this illustration. AIMR is a non-profit membership and education
organization with more than 60,000 members worldwide that, among other things,
has formulated a set of performance presentation standards for investment
advisers. These AIMR performance presentation standards are intended to promote
full and fair presentations by investment advisers of their performance results
and ensure uniformity in reporting so that performance results of investment
advisers are directly comparable.
AIMR composite performance figures are a quarterly aggregate of monthly returns
of a group of similar accounts which are time weighted and asset weighted.
Quarterly and yearly composite returns are the result of geometrically linking
monthly and quarterly returns, respectively. (Each composite return figure is
compounded by the successive period's composite return.)
All returns presented were calculated on a total return basis and include all
dividends, interest, accrued income and realized and unrealized gains and
losses. All returns reflect the deduction
8 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
of the maximum advisory fee of 1.00% of assets under management, brokerage
commissions and execution costs paid by Seneca's private accounts, without
provision for income taxes. Only those private accounts where Seneca exercised
full discretionary investment authority have been included in the composite
performance data. The private accounts included in Seneca's composite
performance data are not subject to the same expenses and specific tax
restrictions applicable to regulated investment companies, such as the
Phoenix-Seneca Tax Sensitive Growth Fund, under Subchapter M of the Internal
Revenue Code and are not subject to Investment Company Act of 1940 restrictions
on investment limitations and diversification. Consequently, Seneca's
performance results would have been lower had fund expenses been used and could
have been adversely affected had these regulations applied to the private
accounts.
There are some differences between AIMR composites and the SEC standardized
formula. The SEC standardized formula (average annual total return) is
calculated net of portfolio fees and expenses as well as investment commissions
while AIMR composites are net of portfolio expenses but gross of management
fees. (Although the fund used AIMR composites, net rather than gross information
was used.) A composite return is the aggregate total return of a group of
similar accounts while the SEC formula is applied to only one account (mutual
fund). The time weighting of the composite differs from the SEC formula in that
the monthly total returns calculated for each account within the composite are
adjusted for cash flows and income accruals by assuming that these flows occur
mid-month. Consequently, composite performance is not overstated as a result of
new investments nor penalized by withdrawals. Mutual funds, in contrast,
calculate their net asset value daily and no adjustments would therefore be
required when calculating total returns. For AIMR composites, accounts are
dollar weighted to reflect the proportionate effect of account size on total
return within the composite.
The composite performance data presented below has been prepared in accordance
with the AIMR Performance Presentation Standards. The investment results
presented below could be calculated using different methods thereby producing
different results. The performance below reflects past performance of Seneca for
periods ending September 30, 1999 for similarly managed private accounts and is
not indicative of future results for the Phoenix-Seneca Tax Sensitive Growth
Fund.
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
Period Adviser's Composite S&P 500
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
One Year 41.45% 27.73%
-----------------------------------------------------------------------------------------------------------------
Three Years 28.61% 25.17%
-----------------------------------------------------------------------------------------------------------------
Since Inception (1/1/96) 27.88% 23.84%
-----------------------------------------------------------------------------------------------------------------
</TABLE>
The private accounts whose composite returns are shown above were managed by a
team of Seneca professionals lead by Ms. Seneca, Mr. Little and Mr. Jacks. The
fund similarly is managed by a team lead by these same individuals.
Phoenix-Seneca Tax Sensitive Growth Fund 9
<PAGE>
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
The fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, the fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the fund.
Asset Value: The fund's investments are valued at market value. If market
quotations are not available, the fund determines a "fair value" for an
investment according to rules and procedures approved by the Trustees. Foreign
and domestic debt securities (other than short-term investments) are valued on
the basis of broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to reflect the fair value
of such securities. Foreign and domestic equity securities are valued at the
last sale price or, if there has been no sale that day, at the last bid price,
generally. Short-term investments having a remaining maturity of sixty days or
less are valued at amortized cost, which the Trustees have determined
approximates market value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and
liabilities that are not class specific (such as management fees) are allocated
to each class in proportion to each class' net assets, except where an
alternative allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of the
fund. The resulting amount for each class is then divided by the number of
shares outstanding of that class to produce each class' net asset value per
share.
The net asset value per share of each class of the fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). The fund will not calculate
its net asset values per share on days when the NYSE is closed for trading. If
the fund holds securities that are traded on foreign exchanges that trade on
weekends or other holidays when the funds do not price their shares, the net
asset value of the fund's shares may change on days when shareholders will not
be able to purchase or redeem the fund's shares.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the fund's authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset
10 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
value. Shares credited to your account from the reinvestment of fund
distributions will be in full and fractional shares that are purchased at the
closing net asset value on the next business day on which the fund's net asset
value is calculated following the dividend record date.
SALES CHARGES
--------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
The fund presently offers four classes of shares. Each class of shares has
different sales and distribution charges (see "Fund Expenses" previously in this
prospectus). For certain classes of shares, the fund has adopted distribution
and service plans allowed under Rule 12b-1 of the Investment Company Act of 1940
that authorize the fund to pay distribution and service fees for the sale of its
shares and for services provided to shareholders.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the fund's assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares, you will pay a sales charge at
the time of purchase equal to 5.75% of the offering price (6.10% of the amount
invested). The sales charge may be reduced or waived under certain conditions.
Class A Shares are not subject to any charges by the fund when redeemed. Class A
Shares have lower distribution and service fees (0.25%) and pay higher dividends
than any other class.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares within the first five
years after they are purchased, you will pay a sales charge of up to 5% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and Class C
Shares" below. This charge declines to 0% over a period of five years and may be
waived under certain conditions. Class B shares have higher distribution and
service fees (1.00%) and pay lower dividends than Class A Shares. Class B Shares
automatically convert to Class A Shares eight years after purchase. Purchase of
Class B Shares may be inappropriate for any investor who may qualify for reduced
sales charges of Class A Shares and anyone who is over 85 years of age. The
underwriter may decline purchases in such situations.
Phoenix-Seneca Tax Sensitive Fund 11
<PAGE>
CLASS C SHARES. If you purchase Class C Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class C Shares within the first year
after they are purchased, you will pay a sales charge of 1%. See "Deferred Sales
Charge Alternative--Class B and Class C Shares" below. Class C Shares have the
same distribution and service fees (1.00%) and pay comparable dividends as Class
B Shares. Class C Shares do not convert to any other class of shares of the
fund.
CLASS X SHARES. Class X Shares are offered primarily to institutional investors
such as pension and profit sharing plans, other employee benefit trusts,
investment advisers, endowments, foundations and corporations. If you are
eligible to purchase and do purchase Class X Shares, you will pay no sales
charge at any time. There are no distribution and services fees applicable to
Class X Shares. For additional information about purchasing Class X Shares,
please contact Customer Service by calling (800) 243-1574.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Initial Sales Charges: Combination Purchase Privilege" in the
Statement of Additional Information). Shares purchased based on the automatic
reinvestment of income dividends or capital gain distributions are not subject
to any sales charges. The sales charge is divided between your investment dealer
and the fund's underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF
---------------------------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
-----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10%
$50,000 but under $100,000 4.75 4.99
$100,000 but under $250,000 3.75 3.90
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B AND CLASS C SHARES
Class B and Class C Shares are purchased without an initial sales charge;
however, shares sold within a specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the rates listed below. The sales
charge will be multiplied by the then current market value or the initial cost
of the shares being redeemed, whichever is less. No sales charge will be imposed
on increases in net asset value or on shares purchased through the reinvestment
of income dividends or capital gain distributions. To minimize the sales charge,
shares not subject to any charge will be redeemed first, followed by shares held
the longest
12 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
time. To calculate the amount of shares owned and time period held, all Class B
Shares purchased in any month are considered purchased on the last day of the
preceding month, and all Class C Shares are considered purchased on the trade
date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
YEAR 1 2 3 4 5 6+
---------------------------------------------------------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
</TABLE>
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES
<TABLE>
<S> <C> <C>
YEAR 1 2+
---------------------------------------------------------------------------------------------------------------
CDSC 1% 0%
</TABLE>
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below. These procedures do not apply to
Class X Shares.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution plans,
profit-sharing plans, or employee benefit plans. There is also no minimum
for reinvesting dividends and capital gains into another account.
o $500 for all other accounts.
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing plans,
or employee benefit plans. There is also no minimum for reinvesting
dividends and capital gains into an existing account.
Phoenix-Seneca Tax Sensitive Growth Fund 13
<PAGE>
The fund reserves the right to refuse a purchase order for any reason.
STEP 2.
Your second choice will be what class of shares to buy. The fund offers three
classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
o Receive dividends in additional shares and capital gain distributions in
cash;
o Receive dividends in cash and capital gain distributions in additional
shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
14 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
HOW TO BUY SHARES
--------------------------------------------------------------------------------
<TABLE>
----------------------------------- ----------------------------------------------------------------------------
<CAPTION>
TO OPEN AN ACCOUNT
(CLASS A, CLASS B AND CLASS C SHARES)
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimum investments or limitations on buying shares.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the fund buy back shares at the net asset value next
determined after receipt of a redemption order by the fund's Transfer Agent or
an authorized agent. In the case of a Class B or Class C Share redemption, you
will be subject to the applicable deferred sales charge, if any, for such
shares. Subject to certain restrictions, shares may be redeemed by telephone or
in writing. In addition, shares may be sold through securities dealers, brokers
or agents who may charge customary commissions or fees for their services. The
fund does not charge any redemption fees. Payment for shares redeemed is made
within seven days; however, redemption proceeds will not be disbursed until each
check used for purchases of shares has been cleared for payment by your bank,
which may take up to 15 days after receipt of the check.
Phoenix-Seneca Tax Sensitive Growth Fund 15
<PAGE>
<TABLE>
------------------------------------ -----------------------------------------------------------------------------
<CAPTION>
TO SELL SHARES
(CLASS A, CLASS B AND CLASS C SHARES)
------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301. Be sure to include the registered owner's name, fund and
account number, and number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix
Funds, 66 Brooks Drive, Braintree, MA 02184. Be sure to include the
registered owner's name, fund and account number, and number of shares
or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
------------------------------------ -----------------------------------------------------------------------------
By Check (Tax-Exempt Bond Fund and If you selected the checkwriting feature, you write checks for amounts
Emerging Markets Bond Fund only) of $500 or more. Checks may not be used to close an account.
------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the fund. The fund reserves the right to pay large redemptions
"in-kind" (in securities owned by the fund rather than in cash). Large
redemptions are those over $250,000 or 1% of the fund's net assets. Additional
documentation will be required for redemptions by organizations, fiduciaries, or
retirement plans, or if redemption is requested by anyone but the shareholder(s)
of record. Transfers between broker-dealer "street" accounts are governed by the
accepting broker-dealer. Questions regarding this type of transfer should be
directed to your financial advisor. Redemption requests will not be honored
until all required documents in proper form have been received. To avoid delay
in redemption or transfer, shareholders having questions about specific
requirements should contact the fund's Transfer Agent at (800) 243-1574.
REDEMPTIONS BY MAIL
> If you are selling shares held individually, jointly, or as custodian under
the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act.
16 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
Send a clear letter of instructions if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address on record.
Send a clear letter of instructions with a signature guarantee when any of
these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last 60 days.
o You want the proceeds to go to a different name or address than on the
account.
> If you are selling shares held in a corporate or fiduciary account, please
contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be made by an eligible
guarantor institution as defined by the fund's Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker-dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third-party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
ACCOUNT POLICIES
--------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, Class B or Class C shares, you can
purchase Class A Shares of any fund at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not more. Send your written
request to State Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call
us at (800) 243-1574 for more information.
Phoenix-Seneca Tax Sensitive Growth Fund 17
<PAGE>
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B and Class C shareholders who have
had the contingent deferred sales charge waived because they are in the
Systematic Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should read the prospectus of the fund into which you want to exchange
before deciding to make an exchange. You can obtain a prospectus from your
financial advisor or by calling us at (800) 243-4361 or accessing our Web site
at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of
shares; e.g., Class A for Class A. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
o Exchanges may be made by telephone ((800) 243-1574) or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the minimum
initial investment required.
o The exchange of shares is treated as a sale and a purchase for federal
income tax purposes.
o Because excessive trading can hurt fund performance and harm other
shareholders, the fund reserves the right to temporarily or permanently
end exchange privileges or reject an order from anyone who appears to be
attempting to time the market, including investors who request more than
one exchange in any 30-day period. The fund's underwriter has entered into
agreements with certain timing firms permitting them to exchange by
telephone. These privileges are limited, and the fund distributor has the
right to reject or suspend them.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
18 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
INVESTOR SERVICES
Investo-Matic is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
Systematic Exchange allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application. Exchange privileges may not be available for all
Phoenix Funds, and may be rejected or suspended.
Telephone Exchange lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
Systematic Withdrawal Program allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
The fund plans to make distributions from net investment income annually, and to
distribute net realized capital gains, if any, at least annually. Distributions
of short-term capital gains and net investment income are taxable to
shareholders as ordinary income. Long-term capital gains, if any, distributed to
shareholders and which are designated by the fund as capital gain distributions,
are taxable to shareholders as long-term capital gain distributions regardless
of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
These tables are intended to help you understand the funds' financial
performance since inception. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the fund (assuming
reinvestment of all dividends and distributions). This information has not been
audited.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS X
---------------------------------------------------------
FROM FROM FROM FROM
INCEPTION INCEPTION INCEPTION INCEPTION
3/1/00 TO 3/1/00 TO 3/1/00 TO 3/1/00 TO
5/31/00 5/31/00 5/31/00 5/31/00
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01 -- -- 0.02
Net realized and unrealized loss (0.08) (0.09) (0.09) (0.08)
----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS (0.07) (0.09) (0.09) (0.06)
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment
income -- -- -- --
Dividends from net realized gains -- -- -- --
----- ----- ----- -----
TOTAL DISTRIBUTIONS -- -- -- --
----- ----- ----- -----
Change in net asset value (0.07) (0.09) (0.09) (0.06)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $9.93 $9.91 $9.91 $9.94
===== ===== ===== =====
Total return(1) (0.07)%(3) (0.90%(3) (0.90)%(3) (0.60)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $3,518 $ 538 $1,383 $ 172
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 1.35%(2) 2.10%(2) 2.10%(2) 1.10%(2)
Net investment income (loss) 0.66%(2) (0.13)%(2) (0.10)%(2) 0.88%
Portfolio turnover 10%(3) 10%(3) 10%(3) 10%(3)
</TABLE>
----------------
(1) Maximum sales charges are not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 6.77% for
Class A, 7.27% for Class B, 7.12% for Class C and 6.62% for Class X, for
the period ended May 31, 2000.
20 Phoenix-Seneca Tax Sensitive Growth Fund
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The fund has filed a Statement of Additional Information about the fund, dated
November 30, 2000 with the Securities and Exchange Commission. The Statement
contains more detailed information about the fund. It is incorporated into this
prospectus by reference and is legally part of the prospectus. You may obtain a
free copy of the Statement:
> by writing to Phoenix Equity Planning Corporation, 56 Prospect Street, P.O.
Box 150480, Hartford, Connecticut 06115-0408 or
> by calling (800) 243-4361.
You may also obtain information about the fund from the Securities and Exchange
Commission:
> through its internet site (http://www.sec.gov),
> by visiting its Public Reference Room in Washington, DC,
> by writing to its Public Reference Section, Washington, DC 20549-0102 (a fee
may be charged), or
> by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The fund semiannually mails to its shareholders detailed reports containing
information about the fund's investments. The fund's Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the fund's performance from December 1 through November
30. You may request a free copy of the fund's Annual and Semiannual Reports:
> by writing to Phoenix Equity Planning Corporation, 56 Prospect Street, P.O.
Box 150480, Hartford, Connecticut 06115-0408 or
> by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<TABLE>
<S> <C>
SEC File Nos. 33-19423 and 811-5436 [recycle] Printed on recycled paper using soybean ink
</TABLE>
Phoenix-Seneca Tax Sensitive Growth Fund 21
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 150480
Hartford, CT 06115-0480
[LOGO] PHOENIX
INVESTMENT PARTNERS
For more information about
Phoenix mutual funds, please call
your financial representative or
contact us at 1-800-243-4361 or
www.phoenixinvestments.com
PXP 1345 (11/00)
<PAGE>
[VERSION B]
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
November 30, 2000
This Statement of Additional Information is not a prospectus, but expands
upon and supplements the information contained
in the current Prospectus of Phoenix-Seneca Tax Sensitive Growth Fund (the
"Fund") of Phoenix Multi-Portfolio (the "Trust"), dated November 30, 2000, and
should be read in conjunction with it. The Fund's Prospectus may be obtained by
calling Phoenix Equity Planning Corporation ("Equity Planning") at (800)
243-4361 or by writing to Equity Planning at 56 Prospect Street, P.O. Box
150480, Hartford, CT 06115-0408.
TABLE OF CONTENTS
PAGE
The Trust ............................................................ 1
Investment Restrictions .............................................. 1
Investment Techniques and Risks....................................... 2
Performance Information .............................................. 11
Performance Comparisons .............................................. 11
Portfolio Turnover ................................................... 11
Portfolio Transactions ............................................... 12
Services of the Advisers ............................................. 13
Determination of Net Asset Value...................................... 14
How to Buy Shares .................................................... 14
Alternative Purchase Arrangements .................................... 15
Investor Account Services ............................................ 18
How to Redeem Shares ................................................. 19
Tax Sheltered Retirement Plans ....................................... 20
Dividends, Distributions and Taxes.................................... 21
The Distributor ...................................................... 23
Distribution Plans.................................................... 24
Management of the Trust............................................... 25
Additional Information ............................................... 32
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
PXP 1346 (11/00)
<PAGE>
THE TRUST
Phoenix Multi-Portfolio Fund (the "Trust") is an open-end management
investment company which was organized under Massachusetts law in 1987 as a
Massachusetts business trust, and was reorganized as a Delaware business trust
in November 2000.
The Prospectus of Phoenix-Seneca Tax Sensitive Growth Fund (the "Tax
Sensitive Growth Fund" or the "Fund"), describes the investment objectives and
strategies that the Fund will employ in seeking to achieve its investment
objective. (A separate prospectus and Statement of Additional Information apply
to four other funds of the Trust.) The Fund's investment objective is a
fundamental policy of the Fund and may not be changed without the vote of a
majority of the outstanding voting securities of the Fund. The following
discussion supplements the disclosure in the Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to the Fund. Except as otherwise stated, these investment restrictions
are "fundamental" policies. A "fundamental" policy is defined in the 1940 Act to
mean that the restriction cannot be changed without the vote of a "majority of
the outstanding voting securities" of the Fund. A majority of the outstanding
voting securities is defined in the 1940 Act as the lesser of (a) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities.
The Fund may not:
(1) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities or repurchase agreements collateralized by U.S. Government
securities and other investment companies), if: (a) such purchase would, at the
time, cause more than 5% of the Fund's total assets taken at market value to be
invested in the securities of such issuer; or (b) such purchase would, at the
time, result in more than 10% of the outstanding voting securities of such
issuer being held by the Fund.
(2) Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government, its agencies or instrumentalities).
(3) Borrow money, except (i) in amounts not to exceed one third of the
value of the Fund's total assets (including the amount borrowed) from banks, and
(ii) up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not be deemed
to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the Fund may
be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the Fund
may purchase and sell derivatives (including, but not limited to, options,
futures contracts and options on futures contracts) whose value is tied to the
value of a financial index or a financial instrument or other asset (including,
but not limited to, securities indexes, interest rates, securities, currencies
and physical commodities).
(8) Make loans, except that the Fund may (i) lend portfolio securities,
(ii) enter into repurchase agreements, (iii) purchase all or a portion of an
issue of debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv)
participate in an interfund lending program with other registered investment
companies.
If any percentage restriction described above for the Fund is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Fund's assets will not constitute a
violation of the restriction.
1
<PAGE>
INVESTMENT TECHNIQUES AND RISKS
The Funds may utilize the following practices and techniques in pursuing its
investment objective.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS
The Fund may use financial futures contracts and related options to hedge
against changes in the market value of their portfolio securities or securities
which they intend to purchase. The Fund may also use foreign currency futures
contracts to hedge against changes in the value of foreign currencies. (See
"Foreign Currency Transactions" below.) Hedging is accomplished when an investor
takes a position in the futures market opposite to the investor's cash market
position. There are two types of hedges--long (or buying) and short (or selling)
hedges. Historically, prices in the futures market have tended to move in
concert with (although in inverse relation to) cash market prices, and prices in
the futures market have maintained a fairly predictable relationship to prices
in the cash market. Thus, a decline in the market value of securities or the
value of foreign currencies may be protected against to a considerable extent by
gains realized on futures contracts sales. Similarly, it is possible to protect
against an increase in the market price of securities which the Fund utilizing
this investment technique may wish to purchase in the future by purchasing
futures contracts.
The Fund may purchase or sell any financial futures contracts which are
traded on a recognized exchange or board of trade and may purchase exchange- or
board-traded put and call options on financial futures contracts as a hedge
against anticipated changes in the market value of its portfolio securities or
securities which it intends to purchase. Financial futures contracts consist of
interest rate futures contracts, securities index futures contracts and foreign
currency futures contracts. A public market presently exists in interest rate
futures contracts covering long-term U.S. Treasury bonds, U.S. Treasury notes,
three-month U.S. Treasury bills and GNMA certificates. Securities index futures
contracts are currently traded with respect to the Standard & Poor's 500
Composite Stock Price Index and such other broad-based stock market indices as
the New York Stock Exchange Composite Stock Index and the Value Line Composite
Stock Price Index. A clearing corporation associated with the exchange or board
of trade on which a financial futures contract trades assumes responsibility for
the completion of transactions and also guarantees that open futures contracts
will be performed.
In contrast to the situation in which the Fund purchases or sells a security,
no security is delivered or received by the Fund upon the purchase or sale of a
financial futures contract (although an obligation to deliver or receive the
underlying security in the future is created by such a contract). Initially,
when it enters into a financial futures contract, the Fund will be required to
deposit in a pledged account with the Trust's custodian bank with respect to
such Fund an amount of cash or U.S. Treasury bills. This amount is known as an
initial margin and is in the nature of a performance bond or good faith deposit
on the contract. The current initial margin deposit required per contract is
approximately 5% of the contract amount. Brokers may establish deposit
requirements higher than this minimum. However, subsequent payments, called
variation margin, will be made to and from the account on a daily basis as the
price of the futures contract fluctuates. This process is known as marking to
market.
The writer of an option on a futures contract is required to deposit a margin
balance pursuant to requirements similar to those applicable to futures
contracts. Upon exercise of an option on a futures contract, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by delivery of the accumulated balance in the writer's margin
account. This amount will be equal to the amount by which the market price of
the futures contract at the time of exercise exceeds, in the case of a call, or
is less than, in the case of a put, the exercise price of the option on the
futures contract.
Although financial futures contracts by their terms call for actual delivery
or acceptance of securities, in most cases the contracts are closed out before
the settlement date without the making or taking of delivery. Closing out is
accomplished by effecting an offsetting transaction. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of securities and the same delivery date. If the sale price exceeds the
offsetting purchase price, the seller immediately would be paid the difference
and would realize a gain. If the offsetting purchase price exceeds the sale
price, the seller immediately would pay the difference and would realize a loss.
Similarly, a futures contract purchase is closed out by effecting a futures
contract sale for the same securities and the same delivery date. If the
offsetting sale price exceeds the purchase price, the purchaser would realize a
gain, whereas if the purchase price exceeds the offsetting sale price, the
purchaser would realize a loss.
The Fund will pay commissions on financial futures contracts and related
options transactions. These commissions may be higher than those which would
apply to purchases and sales of securities directly, and will be in addition to
those paid for direct purchases and sales of securities.
LIMITATIONS ON FUTURES CONTRACTS AND RELATED OPTIONS. The Fund may not engage
in transactions in financial futures contracts or related options for
speculative purposes but only as a hedge against anticipated changes in the
market value of portfolio securities or securities which it intends to purchase
or foreign currencies. At the time of purchase of a futures contract or a call
option on a futures contract, any asset, including equity securities and
non-investment-grade debt so long as the asset is liquid, unencumbered and
marked to market daily equal to the market value of the futures contract minus
the Fund's initial margin deposit
2
<PAGE>
with respect thereto will be deposited in a pledged account with the Trust's
custodian bank with respect to such Fund to collateralize fully the position and
thereby ensure that it is not leveraged.
RISKS RELATING TO FUTURES CONTRACTS AND RELATED OPTIONS. Positions in futures
contracts and related options may be closed out on an exchange if the exchange
provides a secondary market for such contracts or options. The Fund will enter
into a futures or futures related option position only if there appears to be a
liquid secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular option or futures contract at any
specific time. Thus, it may not be possible to close out a futures or related
option position. In the case of a futures position, in the event of adverse
price movements the Fund would continue to be required to make daily margin
payments. In this situation, if the Fund has insufficient cash to meet daily
margin requirements it may have to sell portfolio securities to meet its margin
obligations at a time when it may be disadvantageous to do so. In addition, the
Fund may be required to take or make delivery of the securities underlying the
futures contracts it holds. The inability to close out futures positions also
could have an adverse impact on the Fund's ability to hedge its positions
effectively.
There are several risks in connection with the use of futures contracts as a
hedging device. While hedging can provide protection against an adverse movement
in market prices, it can also limit a hedger's opportunity to benefit fully from
favorable market movement. In addition, investing in futures contracts and
options on futures contracts will cause the Fund to incur additional brokerage
commissions and may cause an increase in the Fund's turnover rate.
The successful use of futures contracts and related options depends on the
ability of the Adviser to forecast correctly the direction and extent of market
movements within a given time frame. To the extent market prices remain stable
during the period a futures contract or option is held by the Fund or such
prices move in a direction opposite to that anticipated, the Fund may realize a
loss on the hedging transaction which is not offset by an increase in the value
of its portfolio securities. As a result, the Fund's total return for the period
may be less than if it had not engaged in the hedging transaction.
Utilization of futures contracts by the Fund involves the risk of imperfect
correlation in movements in the price of futures contracts and movements in the
price of the securities or currencies which are being hedged. If the price of
the futures contract moves more or less than the price of the securities or
currency being hedged, the Fund will experience a gain or loss which will not be
completely offset by movements in the price of the securities or currency. It is
possible that, where a Fund has sold futures contracts to hedge against decline
in the market, the market may advance and the value of securities held in the
Fund or the currencies in which its foreign securities are denominated may
decline. If this occurred, the Fund would lose money on the futures contract and
would also experience a decline in value in its portfolio securities. Where
futures are purchased to hedge against a possible increase in the prices of
securities or foreign currencies before the Fund is able to invest its cash (or
cash equivalents) in securities (or options) in an orderly fashion, it is
possible that the market may decline; if the Fund then determines not to invest
in securities (or options) at that time because of concern as to possible
further market decline or for other reasons, the Fund will realize a loss on the
futures that would not be offset by a reduction in the price of the securities
purchased.
The market prices of futures contracts may be affected if participants in the
futures market elect to close out their contracts through offsetting
transactions rather than to meet margin deposit requirements. In such cases,
distortions in the normal relationship between the cash and futures markets
could result. Price distortions could also result if investors in futures
contracts opt to make or take delivery of the underlying securities or
currencies rather than to engage in closing transactions because such action
would reduce the liquidity of the futures market. In addition, because, from the
point of view of speculators, the deposit requirements in the futures markets
are less onerous than margin requirements in the underlying securities market,
increased participation by speculators in the futures market could cause
temporary price distortions. Because of the possibility of price distortions in
the futures market and of the imperfect correlation between movements in the
prices of securities or foreign currencies and movements in the prices of
futures contracts, a correct forecast of market trends may still not result in a
successful hedging transaction.
Compared to the purchase or sale of futures contracts, the purchase of put or
call options on futures contracts involves less potential risk for the Fund
because the maximum amount at risk is the premium paid for the options plus
transaction costs. However, there may be circumstances when the purchase of an
option on a futures contract would result in a loss to the Fund (i.e., the loss
of the premium paid) while the purchase or sale of the futures contract would
not have resulted in a loss, such as when there is no movement in the price of
the underlying securities.
FOREIGN CURRENCY TRANSACTIONS
The Fund may engage in foreign currency transactions. The following is a
description of these transactions.
Forward Foreign Currency Exchange Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days ("term") from the date
of the contract agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded directly between currency traders (usually
large commercial banks) and their customers.
The Fund will not enter into such forward contracts or maintain a net
exposure in such contracts where it would be obligated to deliver an amount of
foreign currency in excess of the value of its portfolio securities and other
assets denominated in that currency.
3
<PAGE>
The Adviser believes that it is important to have the flexibility to enter into
such forward contracts when it determines that to do so is in the best interests
of the Fund. The Trust's custodian banks will segregate any asset, including
equity securities and non-investment-grade debt so long as the asset is liquid,
unencumbered and marked to market daily in an amount not less than the value of
the Fund's total assets committed to forward foreign currency exchange contracts
entered into for the purchase of a foreign currency. If the value of the
securities segregated declines, additional cash or securities will be added so
that the segregated amount is not less than the amount of the Fund's commitments
with respect to such contracts. Generally, the Fund does not enter into forward
contracts with terms longer than one year.
Foreign Currency Options. A foreign currency option provides the option buyer
with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect the Fund against an adverse movement in the
value of a foreign currency, it does not limit the gain which might result from
a favorable movement in the value of such currency. For example, if the Fund
were holding securities denominated in an appreciating foreign currency and had
purchased a foreign currency put to hedge against a decline in the value of the
currency, it would not have to exercise its put. Similarly, if the Fund had
entered into a contract to purchase a security denominated in a foreign currency
and had purchased a foreign currency call to hedge against a rise in the value
of the currency but instead the currency had depreciated in value between the
date of purchase and the settlement date, the Fund would not have to exercise
its call but could acquire in the spot market the amount of foreign currency
needed for settlement.
Foreign Currency Futures Transactions. The Fund may use foreign currency
futures contracts and options on such futures contracts. Through the purchase or
sale of such contracts, the Fund may be able to achieve many of the same
objectives attainable through the use of foreign currency forward contracts, but
more effectively and possibly at a lower cost.
Unlike forward foreign currency exchange contracts, foreign currency futures
contracts and options on foreign currency futures contracts are standardized as
to amount and delivery period and are traded on boards of trade and commodities
exchanges. It is anticipated that such contracts may provide greater liquidity
and lower cost than forward foreign currency exchange contracts.
Regulatory Restrictions. To the extent required to comply with Securities and
Exchange Commission Release No. IC-10666, when purchasing a futures contract or
writing a put option, the Fund will maintain in a pledged account any asset,
including equity securities and non-investment-grade debt so long as the asset
is liquid, unencumbered and marked to market daily equal to the value of such
contracts.
To the extent required to comply with Commodity Futures Trading Commission
Regulation 4.5 and thereby avoid "commodity pool operator" status, the Fund will
not enter into a futures contract or purchase an option thereon if immediately
thereafter the initial margin deposits for futures contracts (including foreign
currency and all other futures contracts) held by the Fund plus premiums paid by
it for open options on futures would exceed 5% of the Fund's total assets. The
Fund will not engage in transactions in financial futures contracts or options
thereon for speculation, but only to attempt to hedge against changes in market
conditions affecting the values of securities which the Fund holds or intends to
purchase. When futures contracts or options thereon are purchased to protect
against a price increase on securities intended to be purchased later, it is
anticipated that at least 75% of such intended purchases will be completed. When
other futures contracts or options thereon are purchased, the underlying value
of such contracts will at all times not exceed the sum of: (1) accrued profit on
such contracts held by the broker; (2) cash or high quality money market
instruments set aside in an identifiable manner; and (3) cash proceeds from
investments due in 30 days.
Foreign currency warrants. Foreign currency warrants such as Currency
Exchange Warrants ("CEWs") are warrants that entitle the holder to receive from
the issuer an amount of cash (generally, for warrants issued in the United
States, in U.S. dollars) that is calculated pursuant to a predetermined formula
and based on the exchange rate between a specified foreign currency and the U.S.
dollar as of the exercise date of the warrant. Foreign currency warrants
generally are exercisable upon their issuance and expire as of a specified date
and time. Foreign currency warrants have been issued in connection with U.S.
dollar-denominated debt offerings by major corporate issuers in an attempt to
reduce the foreign currency exchange risk that, from the point of view of
prospective purchases of the securities, is inherent in the international
fixed-income marketplace. Foreign currency warrants may be used to reduce the
foreign exchange risk assumed by purchasers of a security by, for example,
providing for a supplemental payment in the event the U.S. dollar depreciates
against the value of a major foreign currency such as the Japanese Yen or German
Deutschemark. The formula used to determine the amount payable upon exercise of
a foreign currency warrant may make the warrant worthless unless the applicable
foreign currency exchange rate moves in a particular direction (e.g., unless the
U.S. dollar appreciates or depreciates against the particular foreign currency
to which the warrant is linked or indexed). Foreign currency warrants are
severable from the debt obligations with which they may be offered, and may be
listed on exchanges. Foreign currency warrants may be exercisable only in
certain minimum amounts, and an investor
4
<PAGE>
wishing to exercise warrants who possesses less than the minimum number required
for exercise may be required either to sell the warrants or to purchase
additional warrants, thereby incurring additional transaction costs. Upon
exercise of warrants, there may be a delay between the time the holder gives
instructions to exercise and the time the exchange rate relating to exercise is
determined, thereby affecting both the market and cash settlement values of the
warrants being exercised. The expiration date of the warrants may be accelerated
if the warrants should be delisted from an exchange or if their trading should
be suspended permanently, which would result in the loss of any remaining "time
value" of the warrants (i.e., the difference between the current market value
and the exercise value of the warrants), and, if the warrants were "out-of-the-
money," in a total loss of the purchase price of the warrants. Warrants are
generally unsecured obligations of their issuers and are not standardized
foreign currency options issued by the OCC. Unlike foreign currency options
issued by OCC, the terms of foreign exchange warrants generally will not be
amended in the event of governmental or regulatory actions affecting exchange
rates or in the event of the imposition of other regulatory controls affecting
the international currency markets. The initial public offering price of foreign
currency warrants is generally considerably in excess of the price that a
commercial user of foreign currencies might pay in the interbank market for a
comparable option involving significantly larger amounts of foreign currencies.
Foreign currency warrants are subject to significant foreign exchange risk,
including risks arising from complex political or economic factors.
Principal exchange rate linked securities. Principal exchange rate linked
securities (or "PERLS") are debt obligations the principal on which is payable
at maturity in an amount that may vary based on the exchange rate between the
U.S. dollar and a particular foreign currency at or about that time. The return
on "standard" principal exchange rate linked securities is enhanced if the
foreign currency to which the security is linked appreciates against the U.S.
dollar, and is adversely affected by increases in the foreign exchange value of
the U.S. dollar, "reverse" PERLS are like the "standard" securities, except that
their return is enhanced by increases in the value of the U.S. dollar and
adversely impacted by increases in the value of foreign currency. Interest
payments on the securities are generally made in U.S. dollars at rates that
reflect the degree of foreign currency risk assumed or given up by the purchaser
of the notes (i.e., at relatively higher interest rates if the purchaser has
assumed some of the foreign exchange risk, or relatively lower interest rates if
the issuer has assumed some of the foreign exchange risk, based on the
expectations of the current market). PERLS may in limited cases be subject to
acceleration of maturity (generally, not without the consent of the holders of
the securities), which may have an adverse impact on the value of the principal
payment to be made at maturity.
Performance indexed paper. Performance indexed paper (or "PIPs") is U.S.
dollar-denominated commercial paper the yield of which is linked to certain
foreign exchange rate movements. The yield to the investor on performance
indexed paper is established at maturity as a function of spot exchange rates
between the U.S. dollar and a designated currency as of or about the time
(generally, the index maturity two days prior to maturity). The yield to the
investor will be within a range stipulated at the time of purchase of the
obligation, generally with a guaranteed minimum rate of return that is below,
and a potential maximum rate of return that is above, market yields on U.S.
dollar-denominated commercial paper, with both the minimum and maximum rates of
return on the investment corresponding to the minimum and maximum values of the
spot exchange rate two business days prior to maturity.
FOREIGN SECURITIES
The Fund may invest in U.S. dollar- or foreign currency-denominated corporate
debt securities of foreign issuers (including preferred or preference stock),
certain foreign bank obligations and U.S. dollar- or foreign
currency-denominated obligations of foreign governments or their subdivisions,
agencies and instrumentalities, international agencies and supranational
entities and may invest up to 20% of its total assets directly in common stocks
issued by foreign companies or in securities represented by ADRs.
Investing in the securities of foreign issuers involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations (which may include suspension of the
ability to transfer currency from a country), political instability which may
affect U.S. investments in foreign countries and potential restrictions on the
flow of international capital. In addition, foreign securities and dividends
interest payable on those securities may be subject to foreign taxes, including
taxes withheld from payments on those securities. Foreign securities often trade
with less frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Changes in foreign exchange rates will affect
the value of those securities which are denominated or quoted in currencies
other than the U.S. dollar.
ADRs are dollar-denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign issuer, and
are publicly traded on exchanges or over-the-counter in the United States. ADRs
may be issued as sponsored or unsponsored programs. In sponsored programs, an
issuer has made arrangements to have its securities trade in the form of ADRs.
In unsponsored programs, the issuer may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated in the
creation of a sponsored program.
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OPTIONS ON SECURITIES AND SECURITIES INDICES
The Fund may engage in option transactions.
Call options on securities and securities indices written by the Fund
normally will have expiration dates between three and nine months from the date
written. The exercise price of a call option written by the Fund may be below,
equal to or above the current market value of the underlying security or
securities index at the time the option is written.
During the option period, the Fund may be assigned an exercise notice by the
broker-dealer through which the call option was sold, requiring the Fund to
deliver the underlying security (or cash in the case of securities index calls)
against payment of the exercise price. This obligation is terminated upon the
expiration of the option period or at such earlier time as the Fund effects a
closing purchase transaction. A closing purchase transaction cannot be effected
with respect to an option once the Fund has received an exercise notice.
A multiplier for an index option performs a function similar to the unit of
trading for an option on an individual security. It determines the total dollar
value per contract of each point between the exercise price of the option and
the current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.
Securities indices for which options are currently traded include the
Standard & Poor's 100 and 500 Composite Stock Price Indices, Computer/Business
Equipment Index, Major Market Index, Amex Market Value Index, Computer
Technology Index, Oil and Gas Index, NYSE Options Index, Gaming/Hotel Index,
Telephone Index, Transportation Index, Technology Index, and Gold/ Silver Index.
The Fund may write call options and purchase call and put options on these and
any other indices traded on a recognized exchange.
Closing purchase transactions will ordinarily be effected to realize a profit
on an outstanding call option written by the Fund, to prevent an underlying
security from being called, or to enable the Fund to write another call option
with either a different exercise price or expiration date or both. The Fund may
realize a net gain or loss from a closing purchase transaction, depending upon
whether the amount of the premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. If a call option
written by the Fund expires unexercised, the Fund will realize a gain in the
amount of the premium on the option less the commission paid.
The option activities of the Fund may increase its portfolio turnover rate
and the amount of brokerage commissions paid. The Fund will pay a commission
each time it purchases or sells a security in connection with the exercise of an
option. These commissions may be higher than those which would apply to
purchases and sales of securities directly.
OVER THE COUNTER OPTIONS. The Fund may deal in over-the-counter options ("OTC
options"). PIC understands the position of the staff of the Commission to be
that purchased OTC options and the assets used in "cover" for written OTC
options are illiquid securities. The Fund has adopted procedures for engaging in
OTC options for the purpose of reducing any potential adverse effect of such
transactions upon the liquidity of the Fund. A brief description of such
procedures is set forth below.
The Fund will engage in OTC options transactions only with dealers that meet
certain credit and other criteria. The Fund and PIC believe that the approved
dealers present minimal credit risks to the Fund and, therefore, should be able
to enter into closing transactions if necessary. The Fund currently will not
engage in OTC options transactions if the amount invested by the Fund in OTC
options, plus a "liquidity charge" related to OTC options written by the Fund
(as described below) plus the amount invested by the Fund in other illiquid
securities, would exceed 10% of the Fund's total assets. The "liquidity charge"
referred to above is computed as described below.
The Fund anticipates entering into agreements with dealers to which the Funds
sell OTC options. Under these agreements the Fund would have the absolute right
to repurchase the OTC options from the dealer at any time at a price no greater
than a price established under the agreements (the "Repurchase Price"). The
"liquidity charge" referred to above for a specific OTC option transaction will
be the Repurchase Price related to the OTC option less the intrinsic value of
the OTC option. The intrinsic value of an OTC call option for such purposes will
be the amount by which the current market value of the underlying security
exceeds the exercise price. In the case of an OTC put option, intrinsic value
will be the amount by which the exercise price exceeds the current market value
of the underlying security. If there is no such agreement requiring a dealer to
allow the Funds to repurchase a specific OTC option written by the Fund, the
"liquidity charge" will be the current market value of the assets serving as
"cover" for such OTC option.
LIMITATIONS ON OPTIONS ON SECURITIES AND SECURITIES INDICES. The Fund may
write call options only if they are covered and remain covered for as long as
the Fund is obligated as a writer. Thus, if the Fund writes a call option on an
individual security, the Fund must own the underlying security or other
securities that are acceptable for a pledged account at all times during the
option period. The Fund will write call options on indices only to hedge in an
economically appropriate way portfolio securities which are not otherwise hedged
with options or financial futures contracts. Call options on securities indices
written by the Fund will be "covered" by identifying the specific portfolio
securities being hedged.
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To secure the obligation to deliver the underlying security, the writer of a
covered call option on an individual security is required to deposit the
underlying security or other assets in a pledged account in accordance with
clearing corporation and exchange rules.
In the case of an index call option written by the Fund, the Fund will be
required to deposit qualified securities. A "qualified security" is a security
against which the Fund has not written a call option and which has not been
hedged by the Fund by the sale of a financial futures contract. If at the close
of business on any day the market value of the qualified securities falls below
100% of the current index value times the multiplier times the number of
contracts, the Fund will deposit an amount of cash, U.S. Government Securities
or other liquid high quality debt obligations equal in value to the difference.
In addition, when the Fund writes a call on an index which is "in-the-money" at
the time the call is written, the Fund will pledge with the Trust's custodian
bank cash, U.S. Government securities or other liquid high quality debt
obligations equal in value to the amount by which the call is "in-the-money"
times the multiplier times the number of contracts. Any amount otherwise pledged
may be applied to the Fund's other obligations to pledge assets in the event
that the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts.
The Fund may sell a call option or a put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security. Any such sale of a call option or a put
option would result in a net gain or loss, depending on whether the amount
received on the sale is more or less than the premium and other transaction
costs paid.
RISKS RELATING TO OPTIONS ON SECURITIES. During the option period, the writer
of a call option has, in return for the premium received on the option, given up
the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk of
loss should the price of the underlying security decline. The writer has no
control over the time within the option period when it may be required to
fulfill its obligation as a writer of the option.
The risk of purchasing a call option or a put option is that the Fund
utilizing this investment technique may lose the premium it paid plus
transaction costs, if the Fund does not exercise the option and is unable to
close out the position prior to expiration of the option.
An option position may be closed out on an exchange only if the exchange
provides a secondary market for an option of the same series. Although the Funds
utilizing this investment technique will write and purchase options only when
PIC believes that a liquid secondary market will exist for options of the same
series, there can be no assurance that a liquid secondary market will exist for
a particular option at a particular time and that the Fund, if it so desires,
can close out its position by effecting a closing transaction. If the writer of
a covered call option is unable to effect a closing purchase transaction, it
cannot sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call writer may not be able to sell the
underlying security at a time when it might otherwise be advantageous to do so.
Possible reasons for the absence of a liquid secondary market on an exchange
include the following: (i) insufficient trading interest in certain options;
(ii) restrictions on transactions imposed by an exchange; (iii) trading halts,
suspensions or other restrictions imposed with respect to particular classes or
series of options or underlying securities; (iv) inadequacy of the facilities of
an exchange or the clearing corporation to handle trading volume; and (v) a
decision by one or more exchanges to discontinue the trading of options in
general or of particular options or impose restrictions on orders.
Each exchange has established limitations governing the maximum number of
call options, whether or not covered, which may be written by a single investor
acting alone or in concert with others (regardless of whether such options are
written on the same or different exchanges or are held or written on one or more
accounts or through one or more brokers). An exchange may order the liquidation
of positions found to be in violation of these limits and it may impose other
sanctions or restrictions. PIC believes that the position limits established by
the exchanges will not have any adverse impact upon the Funds.
RISKS OF OPTIONS ON SECURITIES INDICES. Because the value of an index option
depends upon movements in the level of the index rather than movements in the
price of a particular security, whether the Fund will realize a gain or loss on
the purchase or sale of an option on an index depends upon movements in the
level of prices in the market generally or in an industry or market segment
(depending on the index option in question) rather than upon movements in the
price of an individual security. Accordingly, successful use by a Fund of
options on indices will be subject to PIC's ability to predict correctly
movements in the direction of the market generally or in the direction of a
particular industry. This requires different skills and techniques than
predicting changes in the prices of individual securities.
Index prices may be distorted if trading of certain securities included in
the index is interrupted. Trading in index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
securities included in the index. If this occurred, the Fund would not be able
to close out options which it had written or purchased and, if restrictions on
exercise were imposed, might be unable to exercise an option it purchased, which
would result in substantial losses to the Fund. However, it is the Trust's
policy to write or purchase options only on indices which include a sufficient
number of securities so that the likelihood of a trading halt in the index is
minimized.
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Because the exercise of an index option is settled in cash, an index call
writer cannot determine the amount of its settlement obligation in advance and,
unlike call writing on portfolio securities, cannot provide in advance for its
potential settlement obligation by holding the underlying securities.
Consequently, the Fund will write call options only on indices which meet the
interim described above.
Price movements in securities held by the Fund will not correlate perfectly
with movements in the level of the index and, therefore, the Fund bears the risk
that the price of the securities held by the Fund might not increase as much as
the level of the index. In this event, the Fund would bear a loss on the call
which would not be completely offset by movements in the prices of the
securities held by the Fund. It is also possible that the index might rise when
the value of the securities held by the Fund does not. If this occurred, the
Fund would experience a loss on the call which would not be offset by an
increase in the value of its portfolio and might also experience a loss in the
market value of its portfolio securities.
Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call on an index, the Fund will be required to liquidate
securities in order to satisfy the exercise. Because an exercise must be settled
within hours after receiving the notice of exercise, if the Fund fails to
anticipate an exercise, it may have to borrow from a bank (in an amount not
exceeding 10% of the Fund's total assets) pending settlement of the sale of
securities in its portfolio and pay interest on such borrowing.
When the Fund has written a call on an index, there is also a risk that the
market may decline between the time the Fund has the call exercised against it,
at a price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell its securities. As with options
on its securities, the Fund will not learn that a call has been exercised until
the day following the exercise date but, unlike a call on a security where the
Fund would be able to deliver the underlying security in settlement, the Fund
may have to sell some of its securities in order to make settlement in cash, and
the price of such securities may decline before they can be sold.
If the Fund exercises a put option on an index which it has purchased before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If this change
causes the exercised option to fall "out-of-the-money" the Fund will be required
to pay the difference between the closing index value and the exercise price of
the option (multiplied by the applicable multiplier) to the assigned writer.
Although the Fund may be able to minimize this risk by withholding exercise
instructions until just before the daily cutoff time or by selling rather than
exercising an option when the index level is close to the exercise price, it may
not be possible to eliminate this risk entirely because the cutoff times for
index options may be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
REAL ESTATE INVESTMENT TRUSTS
The Fund may invest in real estate investment trusts ("REITs"). REITs pool
investors' funds for investment primarily in income-producing commercial real
estate or real estate-related loans. A REIT is not taxed on income distributed
to shareholders if it complies with several requirements relating to its
organization, ownership, assets, and income and a requirement that it distribute
to its shareholders at least 95% of its taxable income (other than net capital
gains) for each taxable year.
REITs can generally be classified as follows:
--Equity REITs, which invest the majority of their assets directly in real
property and derive their income primarily from rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in value.
--Mortgage REITs, which invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments.
--Hybrid REITs, which combine the characteristics of both equity REITs and
mortgage REITs.
REITs are like closed-end investment companies in that they are essentially
holding companies which rely on professional managers to supervise their
investments. A shareholder in the Fund should realize that by investing in REITs
indirectly through the Fund, he will bear not only his proportionate share of
the expenses of the Fund, but also, indirectly, similar expenses of underlying
REITs.
RISKS OF INVESTMENT IN REAL ESTATE SECURITIES. Selecting REITs requires an
evaluation of the merits of each type of asset a particular REIT owns, as well
as regional and local economics. Due to the proliferation of REITs in recent
years and the relative lack of sophistication of certain REIT managers, the
quality of REIT assets has varied significantly. The Fund will not invest in
real estate directly, but only in securities issued by real estate companies.
However, the Fund may be subject to risks similar to those associated with the
direct ownership of real estate because of its policy of concentrating in the
securities of companies in the real estate industry. These include declines in
the value of real estate, risks related to general and local economic
conditions, dependence on management skill, cash flow dependence, possible lack
of availability of long-term mortgage funds, over-building, extended vacancies
of properties, decreased occupancy rates and increased competition, increases in
property taxes and operating expenses, changes in neighborhood values and the
appeal of the properties to tenants and changes in interest rates.
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In addition to these risks, equity REITs may be affected by changes in the
value of the underlying properties owned by the trusts, while mortgage REITs may
be affected by the quality of any credit extended. Further, equity and mortgage
REITs are dependent upon management skills and generally are not diversified.
Equity and mortgage REITs are also subject to potential defaults by borrowers,
self-liquidation, and the possibility of failing to qualify for tax-free status
of income under the Code and failing to maintain exemption from the Investment
Company Act of 1940. In the event of a default by a borrower or lessee, the REIT
may experience delays in enforcing its rights as a mortgagee or lessor and may
incur substantial costs associated with protecting its investments. In addition,
investment in REITs could cause the Fund to possibly fail to qualify as a
regulated investment company.
REPURCHASE AGREEMENTS
Repurchase agreements will be entered into only with commercial banks,
brokers and dealers considered by the Trust to be creditworthy. The Trustees of
the Trust will monitor the Fund's repurchase agreement transactions periodically
and, with the Funds' investment advisers, will consider standards which the
investment advisers will use in reviewing the creditworthiness of any party to a
repurchase agreement with the Fund.
The use of repurchase agreements involves certain risks. For example, if the
seller under a repurchase agreement defaults on its obligation to repurchase the
underlying instrument at a time when the value of the instrument has declined,
the Fund may incur a loss upon its disposition. If the seller becomes insolvent
and subject to liquidation or reorganization under bankruptcy or other laws, a
bankruptcy court may determine that the underlying instrument is collateral for
a loan by the Fund and therefore is subject to sale by the trustee in
bankruptcy. Finally, it is possible that the Fund may not be able to
substantiate its interest in the underlying instrument. While the Trustees of
the Trust acknowledge these risks, it is expected that they can be controlled
through careful structuring of repurchase agreement transactions to meet
requirements for treatment as a purchase and sale under the bankruptcy laws and
through monitoring procedures designed to assure the creditworthiness of
counterparties to such transactions.
SECURITIES LENDING
The Fund may lend portfolio securities to broker-dealers and other financial
institutions provided that such loans are callable at any time by the Fund and
are at all times secured by collateral held by the Fund at least equal to the
market value, determined daily, of the loaned securities. The Fund will continue
to receive any income on the loaned securities, and at the same time will earn
interest on cash collateral (which will be invested in short-term debt
obligations) or a securities lending fee in the case of collateral in the form
of U.S. Government securities. A loan may be terminated at any time by either
the Fund or the borrower. Upon termination of a loan, the borrower will be
required to return the securities to the Fund, and any gain or loss in the
market price during the period of the loan would accrue to the Fund. If the
borrower fails to maintain the requisite amount of collateral, the loan will
automatically terminate, and the Fund may use the collateral to replace the
loaned securities while holding the borrower liable for any excess of the
replacement cost over the amount of the collateral.
When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, in order to exercise such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan. The Fund may pay reasonable finders,
administrative and custodial fees in connection with loans of its portfolio
securities.
As with any extension of credit, there are risks of delay in recovery of the
loaned securities and in some cases loss of rights in the collateral should the
borrower of the securities fail financially. However, loans of portfolio
securities will be made only to firms considered by the Trust to be creditworthy
and when the Adviser believes the consideration to be earned justifies the
attendant risks.
SHORT SALES
The Fund may sell securities short as part of their overall portfolio
management strategies involving the use of derivative instruments and to offset
potential declines in long positions in similar securities. A short sale is a
transaction in which a Fund sells a security it does not own or have the right
to acquire (or that it owns but does not wish to deliver) in anticipation that
the market price of that security will decline.
SWAP AGREEMENTS
The Fund may enter into interest rate, index and currency exchange rate swap
agreements in attempts to obtain a particular desired return at a lower cost to
the Fund than if the Fund had invested directly in an instrument that yielded
that desired return. Swap agreements are two-party contracts entered into
primarily by institutional investors for periods ranging from a few weeks to
more than one year. In a standard "swap" transaction, two parties agree to
exchange the returns (or differentials in rates of return) earned or realized on
particular predetermined investments or instruments. The gross returns to be
exchanged or "swapped" between the parties are calculated with respect to a
"notional amount," i.e., the return on or increase in value of a particular
dollar amount invested at a particular interest rate, in a particular foreign
currency, or in a "basket" of securities representing a particular index. The
"notional amount" of the swap agreement is only a fictive basis on which to
calculate the obligations the parties to a swap agreement have agreed to
exchange. The Fund's obligations (or rights) under a swap agreement will
generally be equal only to
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the amount to be paid or received under the agreement based on the relative
values of the positions held by each party to the agreement (the "net amount").
The Fund's obligations under a swap agreement will be accrued daily (offset
against any amounts owing to the Fund) and any accrued but unpaid net amounts
owed to a swap counterparty will be covered by the maintenance of a segregated
account consisting of liquid assets to avoid leveraging of the Fund's portfolio.
Whether the Fund's use of swap agreements enhance the Fund's total return
will depend on the Subadviser's ability to correctly predict whether certain
types of investments are likely to produce greater returns than other
investments. Because they are two-party contracts and may have terms of greater
than seven days, swap agreements may be considered to be illiquid. Moreover, a
Fund bears the risk of loss of the amount expected to be received under a swap
agreement in the event of the default or bankruptcy of a swap agreement
counterparty. The Subadviser will cause a Fund to enter into swap agreements
only with counterparties that would be eligible for consideration as repurchase
agreement counterparties under the Funds' repurchase agreement guidelines.
Certain restrictions imposed on the Funds by the Internal Revenue Code may limit
the Funds' ability to use swap agreements. The swaps market is a relatively new
market and is largely unregulated. It is possible that developments in the swaps
market, including potential government regulation, could adversely affect the
Fund's ability to terminate existing swap agreements or to realize amounts to be
received under such agreements.
Certain swap agreements are exempt from most provisions of the Commodity
Exchange Act ("CEA") and, therefore, are not regulated as futures or commodity
option transactions under the CEA, pursuant to regulations of the CFTC. To
qualify for this exemption, a swap agreement must be entered into by "eligible
participants," which include the following, provided the participants' total
assets exceed established levels: a bank or trust company, savings association
or credit union, insurance company, investment company subject to regulation
under the Investment Company Act of 1940 (the "1940 Act"), commodity pool,
corporation, partnership, proprietorship, organization, trust or other entity,
employee benefit plan, governmental entity, broker-dealer, futures commission
merchant, natural person, or regulated foreign person. To be eligible, natural
persons and most other entities must have total assets exceeding $10 million;
commodity pools and employees benefit plans must have assets exceeding $5
million. In addition, an eligible swap transaction must meet three conditions.
First, the swap agreement may not be part of a fungible class of agreements that
are standardized as to their material economic terms. Second, the
creditworthiness of parties with actual or potential obligations under the swap
agreement must be a material consideration in entering into or determining the
terms of the swap agreement, including pricing, cost or credit enhancement
terms. Third, swap agreements may not be entered into and traded on or through a
multilateral transaction execution facility.
WARRANTS TO PURCHASE SECURITIES
The Fund may invest in or acquire warrants to purchase equity or fixed income
securities. Bonds with warrants attached to purchase equity securities have many
characteristics of convertible bonds and their prices may, to some degree,
reflect the performance of the underlying stock. Bonds also may be issued with
warrants attached to purchase additional fixed income securities at the same
coupon rate. A decline in interest rates would permit the Fund to buy additional
bonds at the favorable rate or to sell the warrants at a profit. If interest
rates rise, the warrants would generally expire with no value.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a when-issued or forward-commitment
basis. New issues of municipal and emerging market securities are often offered
on a when-issued basis, that is, delivery and payment for the securities
normally takes place 15 to 45 days or more after the date of the commitment to
purchase. The payment obligation and the interest rate that will be received on
the securities are each fixed at the time the buyer enters into the commitment.
The Fund will generally make a commitment to purchase such securities with the
intention of actually acquiring the securities. However, the Fund may sell these
securities before the settlement date if it is deemed advisable as a matter of
investment strategy. When the Fund purchases securities on a when-issued basis,
cash or liquid high quality debt securities equal in value to commitments for
the when-issued securities will be deposited in a segregated account with the
Trust's custodian bank. Such segregated securities either will mature or, if
necessary, be sold on or before the settlement date.
Securities purchased on a when-issued basis and the securities held in the
Fund are subject to changes in market value based upon the public perception of
the creditworthiness of the issuer and changes in the level of interest rates
which will generally result in similar changes in value; i.e., both experiencing
appreciation when interest rates decline and depreciation when interest rates
rise. Therefore, to the extent the Fund remains substantially fully invested at
the same time that they have purchased securities on a when-issued basis, there
will be greater fluctuations in the net asset values than if the Fund merely set
aside cash to pay for when-issued securities. In addition, there will be a
greater potential for the realization of capital gains, which are not exempt
from federal income taxation. When the time comes to pay for when-issued
securities, the Fund will meet its obligations from then available cash flow,
the sale of securities or, although it would not normally expect to do so, from
the sale of the when-issued securities themselves (which may have a value
greater or less than the payment obligation). The policies described in this
paragraph are not fundamental and may be changed without shareholder approval.
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PERFORMANCE INFORMATION
Performance information for the Fund (and each Class) may appear in
advertisements, sales literature, or reports to shareholders or prospective
shareholders. Performance information in advertisements and sales literature may
be expressed as "average annual total return" and "total return."
The Fund's average annual total return quotation is computed in accordance
with a standardized method prescribed by rules of the Securities and Exchange
Commission. The average annual total return for the Fund for a specific period
is found by first taking a hypothetical $1,000 investment ("initial investment")
in the Fund's shares on the first day of the period, adjusting to deduct the
maximum sales charge, and computing the "redeemable value" of that investment at
the end of the period. The redeemable value is then divided by the initial
investment, and this quotient is taken to the Nth root (N representing the
number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Fund have been reinvested at net asset value
on the reinvestment dates during the period.
Calculation of the Fund's total return is subject to a standardized formula.
Total return performance for a specific period is calculated by first taking an
investment ("initial investment") in the Fund's shares on the first day of the
period, either adjusting or not adjusting to deduct the maximum sales charge,
and computing the "redeemable value" of that investment at the end of the
period. The total return percentage is then determined by subtracting the
initial investment from the redeemable value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends by the Fund have been
reinvested at net asset value on the reinvestment dates during the period. Total
return may also be shown as the increased dollar value of the hypothetical
investment over the period. Total return calculations that do not include the
effect of the sales charge would be reduced if such charge were included.
Performance information reflects only the performance of a hypothetical
investment in each class during the particular time period on which the
calculations are based. Performance information should be considered in light of
the Fund's investment objectives and policies, characteristics and quality of
the portfolio, and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.
The Trust also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Fund, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted below. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
PERFORMANCE COMPARISONS
The Fund or a Class of the Fund may, from time to time, include in
advertisements containing total return the ranking of those performance figures
relative to such figures for groups of mutual funds having similar investment
objectives as categorized by ranking services such as Lipper Analytical
Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial
Services, Inc., and rating services such as Morningstar, Inc. Additionally, the
Fund may compare its performance results to other investment or savings vehicles
(such as certificates of deposit) and may refer to results published in various
publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business
Week, Stanger's Mutual Fund Monitor, The Stanger Register, Stanger's Investment
Adviser, The Wall Street Journal, New York Times, Consumer Reports, Registered
Representative, Financial Planning, Financial Services Weekly, Financial World,
U.S. News and World Report, Standard and Poor's The Outlook, Investor's Daily
and Personal Investor. The total return may be used to compare the performance
of the Fund against certain widely acknowledged outside standards or indices for
stock and bond market performance, such as the Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500"), Standard & Poor's 400 Midcap Index (the "S&P
400"), Dow Jones Industrial Average, Europe Australia Far East Index ("EAFE"),
NAREIT Equity Index, Consumer Price Index, J.P. Morgan Emerging Markets Bond
Index, Lehman Brothers Municipal Bond Index, Lehman Brothers Aggregate Bond
Index, Lehman Brothers Corporate Index and Lehman Brothers T-Bond Index. The S&P
500 is a commonly quoted measure of stock market performance and represents
common stocks of companies of varying sizes segmented across 90 different
industries which are listed on the New York Stock Exchange, the American Stock
Exchange and traded over the NASDAQ National Market System.
PORTFOLIO TURNOVER
The Fund pays brokerage commissions for purchases and sales of portfolio
securities. A high rate of portfolio turnover generally involves a
correspondingly greater amount of brokerage commissions and other costs which
must be borne directly by a Fund and thus indirectly by its shareholders. It may
also result in the realization of larger amounts of short-term capital gains,
which are taxable to shareholders as ordinary income. If such rate of turnover
exceeds 100%, the Fund will pay more in brokerage commissions than would be the
case if it had lower portfolio turnover rates. Historical turnover rates can be
found under the heading "Financial Highlights" located in the Fund's prospectus.
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PORTFOLIO TRANSACTIONS
In effecting fund transactions for the Trust, each adviser adheres to the
Trust's policy of seeking best execution and price, determined as described
below, except to the extent it is permitted to pay higher brokerage commissions
for "brokerage and research services" as defined herein. The determination of
what may constitute best execution and price in the execution of a securities
transaction by a broker involves a number of considerations including, without
limitation, the overall direct net economic result to the Trust (involving both
price paid or received and any commissions and other costs paid), the efficiency
with which the transaction is effected, the ability to effect the transaction at
all where a large block is involved, availability of the broker to stand ready
to execute possibly difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by each adviser and the Subadviser in determining the overall
reasonableness of brokerage commissions paid by the Trust.
Each adviser may cause the Trust to pay a broker an amount of commission for
effecting a securities transaction in excess of the amount of commission which
another broker or dealer would have charged for effecting that transaction if
such adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker. As provided in Section 28(e) of the Securities Exchange
Act of 1934, "brokerage and research services" include advising as to the value
of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or purchasers or sellers of
securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Brokerage and research
services provided by brokers to the Trust are considered to be in addition to
and not in lieu of services required to be performed by each adviser under its
contract with the Trust and may benefit both the Trust and other accounts of
such adviser. Conversely, brokerage and research services provided by brokers to
other accounts of an adviser may benefit the Trust.
If the securities in which a particular Fund of the Trust invests are traded
primarily in the over-the-counter market, where possible the Fund will deal
directly with the dealers who make a market in the securities involved unless
better prices and executions are available elsewhere. Such securities may be
purchased directly from the issuer. Bonds and money market instruments are
generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
Some fund transactions are, subject to the Conduct Rules of the National
Association of Securities Dealers, Inc. and subject to obtaining best prices and
executions, effected through dealers (excluding Equity Planning) who sell shares
of the Trust.
The Trust has adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Trust. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs share pro rata based on the
Trust's participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Funds, to buy and sell securities for the Funds, provided they
have the execution capability and that their commission rates are comparable to
those of other unaffiliated broker/dealers. Directors of PXP Securities Corp. or
its affiliates receive indirect benefits from the Funds as a result of its usual
and customary brokerage commissions that PXP Securities Corp. may receive for
acting as broker to the Funds in the purchase and sale of portfolio securities.
The investment advisory agreement does not provide for a reduction of the
advisory fee by any portion of the brokerage fees generated by portfolio
transactions of the Funds that PXP Securities Corp. may receive.
For the fiscal years ended November 30, 1997, 1998 and 1999, brokerage
commissions paid by the Trust on portfolio transactions totaled $2,269,745,
$2,904,276 and $1,649,397, respectively. In the fiscal year ended November 30,
1997, 1998 and 1999, no brokerage commissions were paid to affiliates for
portfolio transactions. Commissions of $592,803 paid during the fiscal year
ended
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November 30, 1999, were paid on fund transactions aggregating $235,932,659
executed by brokers who provided research and other statistical and factual
information.
Investment decisions for the Trust are made independently from those of the
other investment companies or accounts advised by the adviser. It may frequently
happen that the same security is held in the portfolio of more than one fund.
Simultaneous transactions are inevitable when several funds are managed by the
same investment adviser, particularly when the same security is suited for the
investment objectives of more than one fund. When two or more funds advised by
the adviser (or subadviser) are simultaneously engaged in the purchase or sale
of the same security, the transactions are allocated among the funds in a manner
equitable to each fund. It is recognized that in some cases this system could
have a detrimental effect on the price or volume of the security as far as the
Trust is concerned. In other cases, however, it is believed that the ability of
the Trust to participate in volume transactions will produce better executions
for the Trust. It is the opinion of the Board of Trustees of the Trust that the
desirability of utilizing each adviser as investment adviser to the Trust
outweighs the disadvantages that may be said to exist from simultaneous
transactions.
SERVICES OF THE ADVISERS
The investment adviser to the Tax Sensitive Growth Fund is Phoenix Investment
Counsel, Inc. ("PIC"), which is located at 56 Prospect Street, Hartford,
Connecticut 06115-0480. PIC acts as the investment adviser for 14 fund companies
totaling 37 mutual funds, as subadviser to two fund companies totaling three
mutual funds, and as adviser to institutional clients. PIC has acted as an
investment adviser for over sixty years. PIC was originally organized in 1932 as
John P. Chase, Inc. As of September 30, 1999, PIC had approximately $23.4
billion in assets under management. Philip R. McLoughlin, a Trustee and officer
of the Trust, is a director of PIC. All other executive officers of the Trust
are officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") of Hartford, Connecticut is a majority shareholder of PXP.
Phoenix Home Life is in the business of writing ordinary and group life and
health insurance and annuities. Its principal offices are located at One
American Row, Hartford, Connecticut, 06115-2520. Equity Planning, a mutual fund
distributor, acts as the national distributor of the Trust's shares and as
Financial Agent of the Trust. The principal office of Equity Planning is located
at 56 Prospect Street, Hartford, CT 06115-0408.
Phoenix Investment Partners, Ltd., is a publicly traded, independent
registered advisory firm, and has served investors for over 70 years. As of
December 31, 1999, PXP had approximately $64.4 billion in assets under
management through its investment partners: Aberdeen Fund Managers, Inc.
(Aberdeen) in Aberdeen, London, Singapore and Fort Lauderdale; Duff & Phelps
Investment Management Co. (Duff & Phelps) in Chicago; Roger Engemann &
Associates, Inc. (Engemann) in Pasadena; Seneca Capital Management LLC (Seneca)
in San Francisco; Phoenix/Zweig Advisers LLC (Zweig) in New York and Phoenix
Investment Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in
Hartford, CT, Sarasota, FL and Scotts Valley, CA, respectively.
Seneca Capital Management LLC ("Seneca") is the subadviser to the Tax
Sensitive Growth Fund and is located at 909 Montgomery Street, San Francisco,
California 94133. Seneca acts as a subadviser to nine mutual funds and as
investment adviser to institutions and individuals. As of December 31, 1999,
Seneca had $9.2 billion in assets under management. Seneca has been (with its
predecessor, GMG/Seneca Capital Management LP ("GMG/Seneca")) an investment
adviser since 1989.
The investment advisory agreement, approved by the Trustees, provides that
the Trust will bear all costs and expenses (other than those specifically
referred to as being borne by the Adviser) incurred in the operation of the
Trust. Such expenses include, but shall not be limited to, all expenses incurred
in the operation of the Trust and any public offering of its shares, including,
among others, interest, taxes, brokerage fees and commissions, fees of Trustees
who are not employees of PIC or any of its affiliates, expenses of Trustees, and
shareholders' meetings, expenses of printing and mailing proxy soliciting
material, expenses of the insurance premiums for fidelity and other coverage,
expenses of the repurchase and redemption of shares, expenses of the issue and
sale of shares (to the extent not borne by Equity Planning under its agreement
with the Trust), expenses of printing and mailing share certificates
representing shares of the Trust, association membership dues, charges of
custodians, transfer agents, dividend disbursing agents and financial agents,
and bookkeeping, auditing and legal expenses. The Trust will also pay the fees
and bear the expense of registering and maintaining the registration of the
Trust and its shares with the Securities and Exchange Commission and registering
or qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders. If authorized by
the Trustees, the Trust will also pay for extraordinary expenses and expenses of
a non-recurring nature which may include, but shall not be limited to, the
reasonable cost of any reorganization or acquisition of assets and the cost of
legal proceedings to which the Trust is a party.
The Fund will pay expenses incurred in its own operation and will also pay a
portion of the Trust's general administration expenses allocated on the basis of
the asset values of the respective Funds.
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For managing, or directing the management of, the investments of the Tax
Sensitive Growth Fund, PIC is entitled to a monthly fee at the annual rate of
0.75% of the average aggregate daily net asset values of the Fund up to $1
billion; 0.70% of such value between $1 billion and $2 billion; and 0.65% of
such value in excess of $2 billion. The adviser has agreed to reimburse through
December 31, 2000 the fund's expenses (other than Management Fees and
Distribution and Services Fees to the extent that such expenses exceed 0.35% for
each class of shares.
The investment advisory agreement also provides that the adviser shall not be
liable to the Trust or to any shareholder of the Trust for any error of judgment
or mistake of law or for any loss suffered by the Trust or by any shareholder of
the Trust in connection with the matters to which the agreement relates, except
a loss resulting from willful misfeasance, bad faith, gross negligence or
reckless disregard on the part of such adviser in the performance of its duties
thereunder.
Provided it has been approved by a vote of the majority of the outstanding
shares of the Fund, the investment advisory agreement continues from year to
year so long as (1) such continuance is approved at least annually by the
Trustees or by a vote of the majority of the outstanding shares of the Fund and
(2) the terms and any renewal of the agreement with respect to the Fund have
been approved by the vote of a majority of the Trustees who are not parties to
the agreement or interested persons, as that term is defined in the Investment
Company Act of 1940, of the Trust or the adviser, cast in person at a meeting
called for the purpose of voting on such approval. On sixty days' written notice
and without penalty the agreement may be terminated as to the Trust or as to the
Fund by the Trustees or by the adviser and may be terminated as to the Fund by a
vote of the majority of the outstanding shares of the Fund. The Agreement
automatically terminates upon its assignment (within the meaning of the
Investment Company Act). The agreement provides that upon its termination, or at
the request of the relevant adviser, the Trust will eliminate all reference to
Phoenix from its name, and will not thereafter transact business in a name using
the word Phoenix.
The Trust, its Advisers and Subadvisers and Distributor have each adopted a
Code of Ethics pursuant to Rule 17-j1 under the Investment Company Act of 1940.
Personnel subject to the Codes of Ethics may purchase and sell securities for
their personal accounts, including securities that may be purchased, sold or
held by the Funds, subject to certain restrictions and conditions. Generally,
personal securities transactions are subject to preclearance procedures,
reporting requirements and holding period rules. The Codes also restrict
personal securities transactions in private placements, initial public offerings
and securities in which a Fund has a pending order.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Trust does not price securities on
weekends or United States national holidays, the net asset value of a Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Trust. The net asset value per share of a Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for the Fund which invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of the Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Trustees or their delegates. If at
any time the Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In
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addition, there are no subsequent investment minimum amounts in connection with
the reinvestment of dividend or capital gain distributions. The minimum initial
investment for Class X Shares is $250,000, and the minimum subsequent investment
for Class X Shares is $10,000. Completed applications for the purchase of shares
should be mailed to: Phoenix Funds, c/o State Street Bank and Trust Company,
P.O. Box 8301, Boston, MA 02266-8301.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). The Fund also offers one class of shares (Class X
Shares) that may be purchased by certain institutional investors at a price
equal to their net asset value per share. Orders received by dealers prior to
the close of trading on the New York Stock Exchange are confirmed at the
offering price effective at that time, provided the order is received by the
Authorized Agent prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or Class C Shares would be less than the initial sales charge and accumulated
distribution services fee on Class A Shares purchased at the same time. Note,
only the Emerging Markets Fund and the International Fund currently offer Class
C Shares.
Dividends paid by the Fund, if any, with respect to each Class of Shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each Class of Shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to ongoing distribution and services fees at an annual rate
of 0.25% of the Fund's aggregate average daily net assets attributable to the
Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within five years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions.
Class B Shares are subject to ongoing distribution and services fees at an
aggregate annual rate of up to 1.00% of the Fund's aggregate average daily net
assets attributable to the Class B Shares. Class B Shares enjoy the benefit of
permitting all of the investor's dollars to work from the time the investment is
made. The higher ongoing distribution and services fees paid by Class B Shares
will cause such shares to have a higher expense ratio and to pay lower
dividends, to the extent any dividends are paid, than those related to Class A
Shares. Class B Shares will automatically convert to Class A Shares eight years
after the end of the calendar month in which the shareholder's order to purchase
was accepted, in the circumstances and subject to the qualifications described
in the Funds' Prospectus. The purpose of the conversion feature is to relieve
the holders of the Class B Shares that have been outstanding for a period of
time sufficient for the adviser and the Distributor to have been compensated for
distribution expenses related to the Class B Shares from most of the burden of
such distribution related expenses.
Class B Shares include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
eight years after the end of the month in which the shares were issued. At the
end of this period, Class B Shares will automatically convert to Class A Shares
and will no longer be subject to the higher distribution and services fees. Such
conversion will be on the basis of the relative net asset value of the two
classes without the imposition of any sales load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate sub
account. Each time any Class B Shares in the shareholder's Fund account (other
than those in the sub account) convert to Class A, an equal pro rata portion of
the Class B Share dividends in the sub account will also convert to Class A
Shares.
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CLASS C SHARES
Class C Shares are purchased without an initial sales charge but are subject
to a deferred sales charge if redeemed within one year of purchase. The deferred
sales charge may be waived in connection with certain qualifying redemptions.
Shares issued in conjunction with the automatic reinvestment of income
distributions and capital gain distributions are not subject to any sales
charges. Class C Shares are subject to ongoing distribution and services fees at
an aggregate annual rate of up to 1.00% of the Fund's aggregate average daily
net assets attributable to Class C Shares.
CLASS X SHARES
Class X Shares are offered without any sales charges to institutional
investors, such as pension and profit sharing plans, other employee benefit
trusts, investment advisers, endowments, foundations and corporations, and
others who purchase the minimum amounts.
CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The ways in which sales charges may be avoided or reduced are described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual fund advised, subadvised or distributed
by the Adviser, Distributor or any of their corporate affiliates (an "Affiliated
Phoenix Fund"); (2) any director or officer, or any full-time employee or sales
representative (for at least 90 days) of the Adviser or Distributor; (3)
registered representatives and employees of securities dealers with whom
Distributor has sales agreements; (4) any qualified retirement plan exclusively
for persons described above; (5) any officer, director or employee of a
corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who retires from
Phoenix Home Life, Distributor and/or their corporate affiliates; (9) any
account held in the name of a qualified employee benefit plan, endowment fund or
foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund, Phoenix-Engemann Fund or Phoenix-Seneca Fund qualified plan; (11)
any Phoenix Home Life separate account which funds group annuity contracts
offered to qualified employee benefit plans; (12) any state, county, city,
department, authority or similar agency prohibited by law from paying a sales
charge; (13) any fully matriculated student in any U.S. service academy; (14)
any unallocated account held by a third party administrator, registered
investment adviser, trust company, or bank trust department which exercises
discretionary authority and holds the account in a fiduciary, agency, custodial
or similar capacity, if in the aggregate such accounts held by such entity equal
or exceed $1,000,000; (15) any person who is investing redemption proceeds from
investment companies other than the Phoenix Funds, Phoenix-Engemann Fund or
Phoenix-Seneca Fund if, in connection with the purchases or redemption of the
redeemed shares, the investor paid a prior sales charge provided such investor
supplies verification that the redemption occurred within 90 days of the Phoenix
Fund purchase and that a sales charge was paid; (16) any deferred compensation
plan established for the benefit of any Phoenix Fund, Phoenix-Engemann Fund or
Phoenix-Seneca Fund trustee or director; provided that sales to persons listed
in (1) through (15) above are made upon the written assurance of the purchaser
that the purchase is made for investment purposes and that the shares so
acquired will not be resold except to the Fund; (17) purchasers of Class A
Shares bought through investment advisers and financial planners who charge an
advisory, consulting or other fee for their services and buy shares for their
own accounts or the accounts of their clients; (18) retirement plans and
deferred compensation plans and trusts used to fund those plans (including, for
example, plans qualified or created under sections 401(a), 403(b) or 457 of the
Internal Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker or agent or
other financial intermediary that has made special arrangements with the
Distributor for such purchases; (19) 401(k) participants in the Merrill Lynch
Daily K Plan (the "Plan") if the Plan has at least $3 million in assets or 500
or more eligible employees; or (20) clients of investment advisors or financial
planners who buy shares for their own accounts but only if their accounts are
linked to a master account of their investment advisor or financial planner on
the books and records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements (each of the investors
described in (17) through (20) may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of this
or any other Affiliated Phoenix Fund (other than Phoenix-Goodwin Money Market
Fund and Phoenix-Zweig Government Cash Fund Class A Shares), if made at the same
time by the same "person," will be added together to determine whether the
combined sum entitles you to an immediate reduction in sales charges. A "person"
is defined in this and the following sections as (a) any individual, their
spouse and minor children purchasing shares for his or their own account
(including an IRA account) including his or their own trust; (b) a trustee or
other fiduciary purchasing for a single trust, estate or single fiduciary
account (even though more than one beneficiary may exist); (c) multiple employer
trusts or Section 403(b) plans for the same employer; (d) multiple accounts (up
to 200) under a qualified employee benefit plan or administered by a third party
administrator; or (e) trust companies, bank trust departments, registered
investment advisers, and similar entities placing orders or providing
administrative services with respect to funds over which they exercise
discretionary
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investment authority and which are held in a fiduciary, agency, custodial or
similar capacity, provided all shares are held of record in the name, or nominee
name, of the entity placing the order.
An "Affiliated Phoenix Fund" means any other mutual fund advised, subadvised
or distributed by the Adviser or Distributor or any corporate affiliate of
either or both the Adviser and Distributor provided such other mutual fund
extends reciprocal privileges to shareholders of the Phoenix Funds.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of this or any other Affiliated Phoenix Fund (other than
Phoenix-Goodwin Money Market Fund and Phoenix-Zweig Government Cash Fund Class A
Shares), if made by the same person within a 13-month period, will be added
together to determine whether you are entitled to an immediate reduction in
sales charges. Sales charges are reduced based on the overall amount you
indicate that you will buy under the Letter of Intent. The Letter of Intent is a
mutually non-binding arrangement between you and the Distributor. Since the
Distributor doesn't know whether you will ultimately fulfill the Letter of
Intent, shares worth 5% of the amount of each purchase will be set aside until
you fulfill the Letter of Intent. When you buy enough shares to fulfill the
Letter of Intent, these shares will no longer be restricted. If, on the other
hand, you do not satisfy the Letter of Intent, or otherwise wish to sell any
restricted shares, you will be given the choice of either buying enough shares
to fulfill the Letter of Intent or paying the difference between any sales
charge you previously paid and the otherwise applicable sales charge based on
the intended aggregate purchases described in the Letter of Intent. You will be
given 20 days to make this decision. If you do not exercise either election, the
Distributor will automatically redeem the number of your restricted shares
needed to make up the deficiency in sales charges received. The Distributor will
redeem restricted Class A Shares before Class B or Class C Shares, respectively.
Oldest shares will be redeemed before selling newer shares. Any remaining shares
will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of this or any
other Affiliated Phoenix Fund, if made over time by the same person may be added
together to determine whether the combined sum entitles you to a prospective
reduction in sales charges. You must provide certain account information to the
Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND CLASS C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and Class C Shares if
the redemption is made (a) within one year of death (i) of the sole shareholder
on an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts
to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 70 1/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, in
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B and
Class C Shares of this or any other Affiliated Phoenix Fund; (g) based on any
direct rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program. If,
as described in condition (a) above, an account is transferred to an account
registered in the name of a deceased's estate, the CDSC will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain subject to the applicable CDSC.
CONVERSION FEATURE--CLASS B SHARES
Class B Shares will automatically convert to Class A Shares of the same Fund
eight years after they are bought. Conversion will be on the basis of the then
prevailing net asset value of Class A and Class B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Trust were unable to obtain such assurances,
it might continue to make distributions if doing so would assist in complying
with its general practice of distributing sufficient income to reduce or
eliminate federal taxes otherwise payable by the Funds.
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IMMEDIATE INVESTMENT
In order to obtain immediate investment of funds, initial and subsequent
purchases of shares of a Fund may also be made by wiring Federal Trusts (monies
held in a bank account with a Federal Reserve Bank) directly pursuant to the
following instructions:
(1) For initial investments, telephone the Trust at (800) 367-5877. Certain
information will be requested from you regarding the account, and an
account number will be assigned.
(2) Once an account number has been assigned, direct your bank to wire the
Federal Trusts to State Street Bank and Trust Company, Custody &
Shareholder Services Division, Boston, Massachusetts 02105, attention of
the appropriate Fund of the Phoenix Multi-Portfolio Fund. Your bank must
include the account number and the name(s) in which your account is
registered in its wire and also request a telephone advice. Your bank may
charge a fee to you for transmitting funds by wire.
An order for shares of a Fund purchased with Federal Trusts will be accepted
on the business day Federal Trusts are wired provided the Federal Trusts are
received by 4:00 p.m. on that day; otherwise, the order will not be accepted
until the next business day. Shareholders should bear in mind that wire
transfers may take two or more hours to complete.
Promptly after an initial purchase of shares made by wiring Federal Trusts
directly, the shareholder should complete and mail to Equity Planning an Account
Application.
INVESTOR ACCOUNT SERVICES
The Funds offer accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
Broker/dealers may impose their own restrictions and limits on accounts held
through the broker/dealer. Please consult your broker/dealer for account
restriction and limit information.
EXCHANGES
Under certain circumstances, shares of any Phoenix Fund may be exchanged for
shares of the same Class of another Phoenix Fund or any other Affiliated Phoenix
Fund on the basis of the relative net asset values per share at the time of the
exchange. Exchanges are subject to the minimum initial investment requirement of
the designated Series or Fund, except if made in connection with the Systematic
Exchange privilege. Shareholders may exchange shares held in book-entry form for
an equivalent number (value) of the same class of shares of any other Affiliated
Phoenix Fund, if currently offered. On exchanges with share classes that carry a
contingent deferred sales charge, the CDSC schedule of the original shares
purchased continues to apply. The exchange of shares is treated as a sale and
purchase for federal income tax purposes (see also "Dividends, Distributions and
Taxes"). Exchange privileges may not be available for all Phoenix Funds, and may
be rejected or suspended.
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Phoenix Fund or any other Affiliated Phoenix
Fund automatically on a monthly, quarterly, semiannual or annual basis or may
cancel this privilege at any time. If you maintain an account balance of at
least $5,000, or $2,000 for tax qualified retirement benefit plans (calculated
on the basis of the net asset value of the shares held in a single account), you
may direct that shares be automatically exchanged at predetermined intervals for
shares of the same class of another Affiliated Phoenix Fund. This requirement
does not apply to Phoenix "Self Security" program participants. Systematic
exchanges will be executed upon the close of business on the 10th day of each
month or the next succeeding business day. Exchanges will be based upon each
Fund's net asset value per share next computed after the close of business on
the 10th day of each month (or next succeeding business day), without sales
charge. Systematic exchange forms are available from the Distributor.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS
If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that any dividends
and distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Phoenix Funds or any other
Affiliated Phoenix Fund at net asset value. You should obtain a current
prospectus and consider the objectives and policies of each Fund carefully
before directing dividends and distributions to another Fund. Reinvestment
election forms and prospectuses are available from Equity Planning.
Distributions may also be mailed to a second payee and/or address. Requests for
directing distributions to an alternate payee must be made in writing with a
signature guarantee of the registered owner(s). To be effective with respect to
a particular dividend or distribution, notification of the new distribution
option must be received by the Transfer Agent at least three days prior to the
record date of such dividend or distribution. If all shares in your account are
repurchased or redeemed or transferred between the record date and the payment
date of a dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
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INVEST-BY-PHONE
This expedited investment service allows a shareholder to make an investment
in an account by requesting a transfer of funds from the balance of their bank
account. Once a request is phoned in, Equity Planning will initiate the
transaction by wiring a request for monies to the shareholder's commercial bank,
savings bank or credit union via Automated Clearing House (ACH). The
shareholder's bank, which must be an ACH member, will in turn forward the monies
to Equity Planning for credit to the shareholder's account. ACH is a computer
based clearing and settlement operation established for the exchange of
electronic transactions among participating depository institutions.
To establish this service, please complete an Invest-by-Phone Application and
attach a voided check if applicable. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) shareholders may call toll free
(800) 367-5877 prior to 3:00 p.m. (New York time) to place their purchase
request. Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact the
shareholder's bank via ACH with appropriate instructions. The purchase is
normally credited to the shareholder's account the day following receipt of the
verbal instructions. The Trust may delay the mailing of a check for redemption
proceeds of Trust shares purchased with a check or via Invest-by-Phone service
until the Trust has assured itself that good payment has been collected for the
purchase of the shares, which may take up to 15 days. The Trust and Equity
Planning reserve the right to modify or terminate the Invest-by-Phone service
for any reason or to institute charges for maintaining an Invest-by-Phone
account.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to periodically redeem a portion
of your account on a predetermined monthly, quarterly, semiannual or annual
basis. A sufficient number of full and fractional shares will be redeemed so
that the designated payment is made on or about the 20th day of the month.
Shares are tendered for redemption by the Transfer Agent, as agent for the
shareowner, on or about the 15th of the month at the closing net asset value on
the date of redemption. The Systematic Withdrawal Program also provides for
redemptions to be tendered on or about the 10th, 15th or 25th of the month with
proceeds to be directed through Automated Clearing House (ACH) to your bank
account. In addition to the limitations stated below, withdrawals may not be
less than $25 and minimum account balance requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B and Class C shareholders may withdraw up to 1%
of their aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B and Class C shareholders redeeming more shares
than the percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed. Accordingly,
the purchase of Class B or Class C Shares will generally not be suitable for an
investor who anticipates withdrawing sums in excess of the above limits shortly
after purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Funds' current Prospectus for further information.
The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Funds' net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
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A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account to a street
name account with another broker/dealer. The Funds have no specific procedures
governing such account transfers.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Fund which has been in existence for at least
one year and has a value of less than $200 may be redeemed upon the giving of
not less than 30 days written notice to the shareholder mailed to the address of
record. During the 60-day period the shareholder has the right to add to the
account to bring its value to $200 or more. See the Fund's current Prospectus
for more information.
BY MAIL
Shareholders may redeem shares by making written request, executed in the
full name of the account, directly to Phoenix Funds, c/o State Street Bank and
Trust Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates
for shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Trust redeem the shares. See the Funds' current
Prospectus for more information.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Trust may make
payment of the redemption price either in cash or in kind. However, the Trust
has elected to pay in cash all requests for redemption by any shareholder of
record, limited in respect to each shareholder during any 90-day period to the
lesser of $250,000 or 1% of the net asset value of the Trust at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment Company Act of 1940 and is irrevocable while the Rule is in effect
unless the Securities and Exchange Commission, by order, permits the withdrawal
thereof. In case of a redemption in kind, securities delivered in payment for
shares would be readily marketable and valued at the same value assigned to them
in computing the net asset value per share of a Fund. A shareholder receiving
such securities would incur brokerage costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information and conditions
attached to this privilege.
TAX SHELTERED RETIREMENT PLANS
Shares of the Trust are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information
about the plans.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch and,
on the date the Plan Sponsor signs the Merrill Lynch Recordkeeping Service
Agreement, the Plan has $3 million or more in assets invested in broker/dealer
funds not advised or managed by Merrill Lynch Asset Management L.P. ("MLAM")
that are made available pursuant to a Service Agreement between Merrill Lynch
and the fund's principal underwriter or distributor and in funds advised or
managed by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or alliance
arrangement with Merrill Lynch, and, on the date the Plan Sponsor signs the
Merrill Lynch Recordkeeping Service Agreement, the Plan has $3 million or more
in assets, excluding money market funds, invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a Merrill
Lynch plan conversion manager, on the date the Plan Sponsor signs the Merrill
Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set forth in (i) through (iii) above but either does not meet
the $3 million asset threshold or does not have 500 or more eligible employees.
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Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of seven years from the initial date of purchase.
DIVIDENDS, DISTRIBUTIONS AND TAXES
QUALIFICATION AS A REGULATED INVESTMENT COMPANY ("RIC")
The Fund is treated as a separate entity for federal income tax purposes. The
Fund has elected to qualify and intends to remain qualified as a RIC under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). In
each taxable year the Fund qualifies as a RIC, it (but not its shareholders)
will be relieved of federal income tax on that portion of its net investment
income and net capital gains that are currently distributed (or deemed
distributed) to its shareholders. To the extent that the Fund fails to
distribute all of its taxable income, it will be subject to corporate income tax
(currently 35%) on any retained ordinary investment income or short-term capital
gains, and corporate income tax (currently 35%) on any undistributed long-term
capital gains. The Fund intends to make timely distributions, if necessary,
sufficient in amount to avoid the non-deductible 4% excise tax that is imposed
on a RIC to the extent that it fails to distribute, with respect to each
calendar year, at least 98% of its ordinary income for such calendar year and
98% of its net capital gains as determined for a one-year period ending on
October 31 of such calendar year (or as determined on a fiscal year basis, if
the Fund so elects).
The Code sets forth numerous criteria that must be satisfied in order for the
Fund to qualify as a RIC. Among these requirements, each Fund must meet the
following tests for each taxable year: (a) derive in each taxable year at least
90% of its gross income from dividends, interest and gains from the sale or
other disposition of securities; and (b) meet certain diversification
requirements imposed under the Code at the end of each quarter of the taxable
year. If in any taxable year the Fund does not qualify as a regulated investment
company, all of its taxable income will be taxed at corporate rates. In
addition, if in any tax year the Fund does not qualify as a RIC for state tax
purposes a capital gain dividend may not retain its character in the hands of
the shareholder for state tax purposes.
Section 988 of the Code provides special rules for foreign currency
transactions under which foreign currency gains or losses from forward
contracts, futures contracts that are not required to be marked-to-market and
unlisted options generally will be treated as ordinary income or loss.
In addition to meeting the 90% test, in order to qualify as a RIC the Fund
will be required to distribute annually to its shareholders as dividends (not
including "capital gains dividends," discussed below) at least 90% of its
ordinary investment income, short-term capital gains and tax exempt income, with
certain modifications. The Fund intends to make distributions to shareholders
that will be sufficient to meet the 90% distribution requirement.
The Fund must also diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of its total assets
consists of cash, cash items, U.S. Government securities, and other securities
limited generally with respect to any one issuer to not more than 5% of the
total assets of that Fund and not more than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any issuer (other than U.S. Government
securities). For purposes of these diversification tests, the issuer of an
option on a particular security is the issuer of the underlying security. In the
case of a stock index futures contract or option thereon, the position taken by
the Internal Revenue Service in a recent letter ruling is that the issuers of
the stocks underlying the index, in proportion to the weighing of the stocks in
the computation of the index, are treated as the issuers of the instrument
irrespective of whether the underlying index is broad- based or narrow-based. In
the case of a foreign currency option, futures contract or forward contract,
however, there is as yet no specific guidance in the tax law concerning who will
be treated as the issuer of such instruments or how they will be valued for
purposes of these diversification tests.
The Fund intends to comply with all of the foregoing criteria for
qualification as a RIC; however, there can be no assurance that the Fund will so
qualify and continue to maintain its status as a RIC. If the Fund were unable
for any reason to maintain its status as a RIC for any taxable year, adverse tax
consequences would ensue.
TAXATION OF SHAREHOLDERS
Distributions by the Fund from ordinary investment income and net short-term
capital gains will be taxed to the shareholders as ordinary dividend income to
the extent of the earnings and profits of the Fund. Ordinary income dividends
received by corporate shareholders will qualify for the 70% dividends-received
deduction to the extent the Fund designates such amounts as qualifying dividend
distributions; however, the portion that may be so designated is subject to
certain limitations. As a result of these limitations, it is not currently
anticipated that certain distributions by the Fund will be qualifying dividend
distributions. Distributions by the Fund that are designated as capital gain
distributions will be taxed to the shareholders as capital gains, and will not
be eligible for the corporate dividends-received deduction.
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Dividends declared by the Fund to shareholders of record in October, November
or December will be taxable to such shareholders in the year that the dividend
is declared, even if it is not paid until the following year (so long as it is
actually paid by the Fund prior to February 1). Also, shareholders will be
taxable on the amount of long-term capital gains designated by the Fund by
written notice mailed to shareholders within 60 days after the close of the
year, even if such amounts are not actually distributed to them. Shareholders
will be entitled to claim a credit against their own federal income tax
liability for taxes paid by the Fund on such undistributed gains, if any. If a
shareholder receives a long-term capital dividend with respect to any share and
such share is held for less than 6 months, any loss on sale or exchange of such
share will be long-term capital loss to the extent of long-term capital dividend
payments.
Dividends (other than exempt interest dividends) and capital gain
distributions will be taxable to shareholders as described above whether
received in cash or in shares under a Fund's distribution reinvestment plan.
With respect to distributions received in cash or reinvested in shares purchased
on the open market, the amount of the distribution for tax purposes will be the
amount of cash distributed or allocated to the shareholder. With respect to
distributions made in shares issued by the Fund as a stock dividend, the amount
of the distribution will be the fair market value of the shares on the payment
date.
Shareholders should be aware that the price of shares of a Fund that are
purchased prior to a dividend or distribution by the Fund may reflect the amount
of the forthcoming dividend or distribution. Such dividend or distribution, when
made, would be taxable to shareholders under the principles discussed above even
though the dividend or distribution may reduce the net asset value of shares
below a shareholder's cost and thus represent a return of a shareholder's
investment in an economic sense.
SALE OR EXCHANGE OF FUND SHARES
Gain or loss will be recognized by a shareholder upon the sale of his shares
in a Fund or upon an exchange of his shares in a Fund for shares in another
Fund. Provided that the shareholder is not a dealer in such shares, such gain or
loss will generally be treated as capital gain or loss, measured by the
difference between the adjusted basis of the shares and the amount realized
therefrom. Under current law, capital gains (whether long-term or short-term) of
individuals and corporations are fully includable in income and are taxed at the
regular federal income tax rates applicable to the shareholder's ordinary
income. Capital losses (whether long-term or short-term) may offset capital
gains plus (for non-corporate taxpayers only) up to $3,000 per year of ordinary
income.
TAX INFORMATION
Written notices will be sent to shareholders regarding the tax status of all
distributions made (or deemed to have been made) during each taxable year,
including the tax-exempt portion thereof (if applicable), the amount qualifying
for the dividends-received deduction (if applicable) and the amount designated
as capital gains dividends, undistributed capital gains (if any), tax credits
(if applicable), and cumulative return of capital (if any).
BACKUP WITHHOLDING
The Funds may be required to withhold federal income tax at a rate of 31% on
reportable dividends paid to certain noncorporate shareholders. Generally,
shareholders subject to such backup withholding will be those for whom a
taxpayer identification number and certain required certifications are not filed
with the Fund or who, to the Fund's knowledge, have furnished an incorrect
number.
FOREIGN SHAREHOLDERS
Dividends paid by the Fund from net investment income and net realized
short-term capital gains to a shareholder who is a nonresident alien individual,
a foreign trust or estate, a foreign corporation or a foreign partnership (a
"foreign shareholder") will be subject to United States withholding tax at a
rate of 30% unless a reduced rate of withholding or a withholding exemption is
provided under applicable treaty law. Foreign shareholders are urged to consult
their own tax advisors concerning the applicability of the United States
withholding tax and any foreign taxes.
OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences, described above,
applicable to an investment in the Fund, there may be state or local tax
considerations and estate tax considerations applicable to the circumstances of
a particular investor. The foregoing discussion is based upon the Code, judicial
decisions and administrative regulations, rulings and practices, all of which
are subject to change and which, if changed, may be applied retroactively to the
Fund, its shareholders and/or its assets. No rulings have been sought from the
Internal Revenue Service with respect to any of the tax matters discussed above.
The information included in the Prospectus with respect to taxes, in
conjunction with the foregoing, is a general and abbreviated summary of
applicable provisions of the Code and Treasury regulations now in effect as
currently interpreted by the courts and the Internal Revenue Service. The Code
and these Regulations, as well as the current interpretations thereof, may be
changed at any time by legislative, judicial, or administrative action.
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THE DISTRIBUTOR
Equity Planning, a registered broker-dealer which is an indirect less than
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company, serves as
Distributor of the Trust's shares. Philip R. McLoughlin, a Trustee and President
of the Trust, is a director and officer of Equity Planning. Michael E. Haylon,
an officer of the Trust, is a director of Equity Planning; and G. Jeffrey Bohne,
Robert A. Driessen and William R. Moyer, officers of the Trust, are officers of
Equity Planning.
The Trust and Equity Planning have entered into distribution agreements under
which Equity Planning has agreed to use its best efforts to find purchasers for
Trust shares and the Trust has granted to Equity Planning the exclusive right to
purchase from the Trust and resell, as principal, shares needed to fill
unconditional orders for Trust shares. Equity Planning may sell Trust shares
through its registered representatives or through securities dealers with whom
it has sales agreements. Equity Planning may also sell Trust shares pursuant to
sales agreements entered into with bank-affiliated securities brokers who,
acting as agent for their customers, place orders for Trust shares with Equity
Planning. It is not anticipated that termination of sales agreements with banks
and bank affiliated securities brokers would result in a loss to their customers
or a change in the net asset value per share of a Fund of the Trust.
For its services under the distribution agreements, Equity Planning receives
sales charges on transactions in Trust shares and retains such charges less the
portion thereof allowed to its registered representatives and to securities
dealers and securities brokers with whom it has sales agreements. In addition,
Equity Planning may receive payments from the Trust pursuant to the Distribution
Plans described below. For the fiscal years ended November 30, 1997, 1998 and
1999, purchasers of shares of the Funds paid aggregate sales charges of
$2,114,382, $4,260,271 and $1,269,310, respectively, of which the Distributor
received net commission of $494,335, $545,050 and $500,085, respectively, for
its services, the balance being paid to dealers. For the fiscal year ended
November 30, 1999, the distributor received net commission of $97,677 for Class
A Shares and deferred sales charges of $402,408 for Class B and Class C Shares.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as described below.
<TABLE>
<CAPTION>
AMOUNT OF
TRANSACTION SALES CHARGE AS A PERCENTAGE SALES CHARGE AS A PERCENTAGE DEALER DISCOUNT
AT OFFERING PRICE OF OFFERING PRICE OF AMOUNT INVESTED PERCENTAGE OF OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 5.75% 6.10% 5.25%
$50,000 but under $100,000 4.75 4.99 4.25
$100,000 but under $250,000 3.75 3.90 3.25
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases of Class A Shares, the
Distributor intends to pay investment dealers a sales commission of 4% of the
sale price of Class B Shares and a sales commission of 1% of the sale price of
Class C Shares sold by such dealers. This sales commission will not be paid to
dealers for sales of Class B or Class C Shares purchased by 401(k) participants
of the Merrill Lynch Daily K Plan (the "Plan") due to waiver of the CDSC for
these Plan participants' purchases. Your broker, dealer or investment adviser
may also charge you additional commissions or fees for their services in selling
shares to you provided they notify the Distributor of their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Trust and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Trust
through distribution fees, service fees or transfer agent fees or in some cases,
the Distributor may pay certain fees from its own profits and resources. From
its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time, pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6
23
<PAGE>
million. If part or all of such investment, including investments by qualified
employee benefit plans, is subsequently redeemed within one year of the
investment date, the broker/dealer will refund to the Distributor such amounts
paid with respect to the investment. In addition, the Distributor may pay the
entire applicable sales charge on purchases of Class A Shares to selected
dealers and agents. From its own resources, the Distributor intends to pay the
following additional compensation to Merrill Lynch, Pierce, Fenner & Smith,
Incorporated: 0.25% on sales of Class A and B Shares, 0.10% on sales of Class C
Shares, 0.10% on sales of Class A shares sold at net asset value, and 0.10%
annually on the average daily net asset value of fund shares on which Merrill
Lynch is broker of record and which such shares exceed the amount of assets on
which Merrill Lynch is broker of record as of July 1, 1999. Any dealer who
receives more than 90% of a sales charge may be deemed to be an "underwriter"
under the Securities Act of 1933. Equity Planning reserves the right to
discontinue or alter such fee payment plans at any time.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Trust and as such
performs administrative, bookkeeping and pricing functions for the Funds. For
its services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC, Inc.,
as subagent, plus (2) the documented costs to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC, Inc. is based upon the average of the
aggregate daily net asset values of the Funds, at the following incremental
annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Funds, PFPC, Inc. also charges minimum fees and additional fees to each
additional class of fund shares. Equity Planning retains PFPC, Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC, Inc. agreed to a modified fee structure and waived certain charges.
Because PFPC, Inc.'s arrangement would have favored smaller funds over larger
funds, Equity Planning reallocates PFPC, Inc.'s overall asset-based charges
among all funds for which it serves as administrative agent on the basis of the
relative net assets of each fund. As a result, the PFPC, Inc. charges to the
Fund are expected to be slightly less than the amount that would be found
through direct application of the table illustrated above. For services to the
Trust during the fiscal years ended November 30, 1997, 1998 and 1999, the
Financial Agent received fees of $541,814, $654,165 and $726,919, respectively.
DISTRIBUTION PLANS
The Trust has adopted a distribution plan for each class of shares (i.e., a
plan for the Class A Shares, a plan for the Class B Shares, and a plan for the
Class C Shares, collectively, the "Plans") in accordance with Rule 12b-1 under
the Act, to compensate the Distributor for the services it provides and for the
expenses it bears under the Underwriting Agreement. Each class of shares pays a
service fee at a rate of 0.25% per annum of the average daily net assets of such
class of the Fund and a distribution fee based on average daily net assets at
the rate of 0.75% per annum for Class B Shares and 0.75% per annum for Class C
Shares.
From the Service Fee the Distributor expects to pay a quarterly fee to
qualifying broker/dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Trust shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor.
Each Plan requires that at least quarterly the Trustees of the Trust review a
written report with respect to the amounts expended under the Plans and the
purposes for which such expenditures were made. While the Plans are in effect,
the Trust will be required to commit the selection and nomination of candidates
for Trustees who are not interested persons of the Trust to the discretion of
other Trustees who are not interested persons. Each Plan continues in effect
from year to year only provided such continuance is
24
<PAGE>
approved annually in advance by votes of the majority of both (a) the Board of
Trustees of the Trust and (b) the Rule 12b-1 Trustees, cast in person at a
meeting called for the purpose of voting on the Plan and any agreements related
to the Plan.
For the fiscal year ended November 30, 1999 the Trust paid Rule 12b-1 Fees in
the amount of $2,607,375, of which the Distributor received $1,060,487,
unaffiliated broker-dealers received $1,310,508 and W.S. Griffith & Co., Inc.,
an affiliate, received $236,380. The Rule 12b-1 payments were used for (1)
compensating dealers, $2,815,291, (2) compensating sales personnel, $2,221,997,
(3) advertising, $1,317,627, (4) printing and mailing of prospectuses to other
than current shareholders, $32,904, (5) service costs, $216,769 and (6) other,
$446,543.
No interested person of the Trust and no Trustee who is not an interested
person of the Trust, as that term is defined in the Investment Company Act of
1940, had any direct or indirect financial interest in the operation of the
Plans.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend the Plans.
MANAGEMENT OF THE TRUST
The Trust is an open-end management investment company known as a mutual
fund. The Trustees of the Trust ("Trustees") are responsible for the overall
supervision of the Trust and perform the various duties imposed on Trustees by
the Investment Company Act of 1940 and Delaware business trust law.
TRUSTEES AND OFFICERS
The Trustees and Officers of the Trust and their business affiliations for
the past five years are set forth below and, unless otherwise noted, the address
of each Trustee and executive officer is 56 Prospect Street, Hartford,
Connecticut, 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (1999-present).
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present). Chairman, Accuhealth (1994-present), Trism, Inc.
(1994-present), Realty Foundation of New York (1972-present), and
New York Housing Partnership Development Corp. (1985-present),
Vice Chairman, The Academy of Political Science (1985-present).
Director/Trustee, Phoenix Funds (1993-present). Trustee,
Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc., Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present) and Phoenix-Seneca Funds
(2000-present). Chairman/Member, Audit Committee of the City of
New York (1981-1996). Advisory Director, Blackrock Fannie Mae
Mortgage Securities Fund (1989-1996) and Fund Directions
(1993-1998).
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Harry Dalzell-Payne (71) Trustee Director/Trustee, Phoenix Funds (1993-present). Trustee,
The Flat Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Elmore Court Mutual Funds (1996-present) and Phoenix-Seneca Funds
Elmore, GLO5, 9623NT (2000-present). Director, Duff & Phelps Utilities Tax-Free Income
U.K. Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Trustee, Phoenix-Seneca Funds (1999-present).
Formerly a Major General of the British Army.
*Francis E. Jeffries (70) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series Inc., Phoenix Duff & Phelps Institutional
#902 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Naples, FL 34108 (2000-present). Director, Duff & Phelps Utilities Income Inc.
(1987-present), Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1993-present). Director, The Empire District Electric
Company (1984-present). Director (1989-1997), Chairman of the
Board (1993-1997), President (1989-1993), and Chief Executive
Officer (1989-1995), Phoenix Investment Partners, Ltd.
Leroy Keith, Jr. (61) Trustee Chairman (1995-present) and Chief Executive Officer (1995-1999),
Chairman Carson Products Company. Director/Trustee, Phoenix Funds
Carson Product Company (1980-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
64 Ross Road Duff & Phelps Institutional Mutual Funds (1996-present) and
Savannah, GA 30750 Phoenix-Seneca Funds (2000-present). Director, Equifax Corp.
(1991-present) and Evergreen International Fund, Inc.
(1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust.
*Philip R. McLoughlin (54) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
President (1995-1997) and Chief Executive Officer (1995-present), Phoenix
Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-1999), Phoenix Equity Planning
Corporation. Chairman and Chief Executive Officer, Phoenix/Zweig
Advisers LLC (1999-present). Director, PXRE Corporation (Delaware)
(1985-present), and World Trust Fund (1991-present). Director and
Executive Vice President, Phoenix Life and Annuity Company
(1996-present). Director and Executive Vice President, PHL
Variable Insurance Company (1995-present). Director, Phoenix
Charter Oak Trust Company (1996-present). Director and Vice
President, PM Holdings, Inc. (1985-present). Director, PHL
Associates, Inc. (1995-present). Director (1992-present) and
President (1992-1994), W.S. Griffith & Co., Inc.
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present). Director/
164 Laird Road Trustee, Phoenix Funds (1995-present). Trustee, Phoenix-Aberdeen
Colts Neck, NJ 07722 Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993-present).
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Boston, MA 02109 Funds (2000-present). Director, AIB Govett Funds (1991-present).
Director, Investors Financial Service Corporation (1995-present),
Investors Bank & Trust Corporation (1995-present), Plymouth
Rubber Co. (1995-present), Stifel Financial (1996-present),
Command Systems, Inc. (1998-present), Connecticut River Bancorp
(1998-present) and Endowment for Health, Inc. (1999-present).
Member, Chief Executives Organization (1996-present). Vice
Chairman, Massachusetts Housing-Partnership (1998-2000).
Director, Blue Cross and Blue Shield of New Hampshire (1994-1999).
Herbert Roth, Jr. (72) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
P.O. Box 909 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Sherborn, MA 01770 (2000-present). Director, Boston Edison Company (1978-present),
Landauer, Inc. (medical services) (1970-present), Tech Ops./
Sevcon, Inc. (electronic controllers) (1987-present), and Mark IV
Industries (diversified manufacturer) (1985-present). Member,
Directors Advisory Council, Phoenix Home Life Mutual Insurance
Company (1998-present). Director, Phoenix Home Life Mutual
Insurance Company (1972-1998).
Richard E. Segerson (54) Trustee Managing Director, Northway Management Company (1998-present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (69) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, UST Inc. (1995-present), HPSC Inc.
(1995-present), Duty Free International, Inc. (1997-present) and
Compuware (1996-present) and Burroughs Wellcome Fund
(1996-present). Visiting Professor, University of Virginia
(1997-present). Chairman, Dresing, Lierman, Weicker (1995-1996).
Governor of the State of Connecticut (1991-1995).
Michael E. Haylon (42) Executive Director and Executive Vice President, Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director (1994-present),
President President (1995-present), Executive Vice President (1994-1995),
Vice President (1991-1994), Phoenix Investment Counsel, Inc.
Director, Phoenix Equity Planning Corporation (1995-present).
Executive Vice President, Phoenix Funds (1993-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix-Seneca
Funds. Executive Vice President (1997-present), Vice President
(1996-1997), Phoenix Duff & Phelps Institutional Mutual Funds.
Senior Vice President, Securities Investments, Phoenix Home Life
Mutual Insurance Company (1993-1995).
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
John F. Sharry (48) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-present), Phoenix Investment
President Partners, Ltd. Managing Director, Retail Distribution, Phoenix
Equity Planning Corporation (1995-1997). Executive Vice President,
Phoenix Funds (1998-present), Phoenix-Aberdeen Series Fund
(1998-present) and Phoenix-Seneca Funds (2000-present). Managing
Director, Director and National Sales Manager, Putnam Mutual Funds
(1993-1995).
Gail P. Seneca (47) Senior Vice President and Chief Executive and Investment Officer, Seneca
President Capital Management LLC (1996-present). Managing Director,
Equities, Phoenix Investment Counsel, Inc. (1998-present). Senior
Vice President, Phoenix Duff & Phelps Institutional Mutual Funds
(1999-present), The Phoenix Edge Series Fund (1998-present),
Phoenix Multi-Portfolio Fund (1998-present) and Phoenix Strategic
Equity Series Fund (1998-present). Managing General Partner and
Chief Executive and Investment Officer, GMG/Seneca Capital
Management LP (1989-present). President and Trustee,
Phoenix-Seneca Funds (1996-present). General Partner, Genesis
Merchant Group. LP (1990-1996). President, GenCap, Inc.
(1994-present).
James D. Wehr (43) Senior Vice Senior Vice President (1998-present), Managing Director (1996-1998),
President Fixed Income, Vice President (1991-1996), Phoenix Investment Counsel,
Inc. Senior Vice President and Chief Investment Officer, Duff & Phelps
Utilities Tax Free Income, Inc. (1997-present). Senior Vice President
(1997-present), Vice President (1988-1997), Phoenix Multi-Portfolio
Fund; Senior Vice President (1997-present), Vice President (1990-1997),
Phoenix Series Fund; Senior Vice President (1997-present), Vice
President (1993-1997) Phoenix-Goodwin California Tax Exempt Bond Fund
and Senior Vice President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds. Senior Vice
President (1997-present), Phoenix-Goodwin Multi-Sector Fixed Income
Fund, Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Oakhurst Income & Growth Fund and Phoenix-Oakhurst Strategic
Allocation Fund. Managing Director, Public Fixed Income, Phoenix Home
Life Insurance Company (1991-1995).
David L. Albrycht (39) Vice Managing Director, Fixed Income (1996-present) and Vice President
President (1995-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Multi-Portfolio Fund (1993-present), Phoenix-Goodwin
Multi-Sector Short Term Bond Fund (1993-present), Phoenix-Goodwin
Multi-Sector Fixed Income Fund (1994-present), and Phoenix Series
Fund (1997-present). Fund Manager, Phoenix Home Life Mutual Insurance
Company (1994-1995).
Robert A. Driessen (53) Vice President and Vice President, Compliance, Phoenix Investment Partners, Ltd.
Assistant Secretary (1999-present). Vice President, Phoenix Funds, Phoenix-Aberdeen
Series Fund, Phoenix-Duff & Phelps Institutional Mutual Funds and
Phoenix Seneca Funds (1999-present). Vice President, Risk
Management Liaison, Bank of America (1996-1999). Vice President,
Securities Compliance, The Prudential Insurance Company of America
(1993-1996). Branch Chief/Financial Analyst, Securities and
Exchange Commission, Division of Investment Management (1972-1993).
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Timothy M. Heaney (35) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Investment Analyst (1995-1996),
Phoenix Investment Counsel, Inc. Vice President, Phoenix
Multi-Portfolio Fund (1996-present), Phoenix-Goodwin California
Tax Exempt Bond Fund (1996-present) and Duff & Phelps Utilities
Tax Free Income, Inc. (1997-present).
Ron K. Jacks (35) Vice Equity Portfolio Manager, Seneca Capital Management LLC
President (1996-present). General Partner and Equity Portfolio Manager,
GMG/Seneca Capital Management LP (1995-present). Managing
Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present). Vice President, The Phoenix Edge Series Fund
(1998-present), Phoenix Strategic Equity Series Fund
(1998-present) and Phoenix Multi-Portfolio Fund (1998-present).
Secretary (1996-1998) and Trustee (1996-1997), Phoenix-Seneca
Funds.
Peter S. Lannigan (39) Vice Managing Director, Fixed Income (1997-present), Director, Fixed
President Income Research (1996-1997), Vice President (1995-1996), Phoenix
Investment Counsel, Inc. Vice President, Phoenix Multi-Portfolio
Fund (1995-present). Director, Public Fixed Income, Phoenix Home
Life Mutual Insurance Company (1993-1995). Various positions with
Standard & Poor's Corporation (1989-1993).
William R. Moyer (56) Vice Executive Vice President and Chief Financial Officer
President (1999-present), Senior Vice President and Chief Financial Officer
(1995-1999), Phoenix Duff & Phelps Corporation. Senior Vice
President, (1990-present), Director (1998-present), Treasurer
(1998-present and 1994-1996), and Chief Financial Officer Finance
(1996-present), Phoenix Equity Planning Corporation. Senior Vice
President (1990-present), Director (1998-present), Chief Financial
Officer (1996-present) and Treasurer (1994-present), Phoenix
Investment Counsel, Inc. Senior Vice President and Chief Financial
Officer (1996-present), Treasurer (1999-present), Duff & Phelps
Investment Management Co. Vice President, Phoenix Funds
(1990-present), Phoenix-Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Aberdeen Series Fund (1996-present).
Executive Vice President, Phoenix-Seneca Funds (2000-present).
Senior Vice President and Chief Financial Officer, W. S. Griffith
& Co., Inc. (1992-1995) and Townsend Financial Advisers, Inc.
(1993-1995). Vice President, Investment Products Finance, Phoenix
Home Life Mutual Insurance Company (1990-1995).
Richard D. Little (52) Vice Partner, Seneca Capital Management LP (1989-present). Managing
President Director, Equities, Phoenix Investment Counsel, Inc.
(1998-present). Phoenix Strategic Equity Series Fund
(1998-present), Phoenix Multi-Portfolio Fund (1998-present) and
Phoenix Duff & Phelps Institutional Mutual Funds (1999-present).
Michael Schatt (53) Vice Managing Director, Phoenix Investment Partners, Ltd.
Phoenix Investment President (1994-present). Senior Vice President, Duff & Phelps Investment
Partners, Ltd. Management Co. (1996-present). Vice President, Duff & Phelps
55 East Monroe St. Utilities Income, Inc. (1997-present), and Phoenix Multi-Portfolio
Suite 3600 Fund (1997-present). Director, Real Estate Advisory Practice,
Chicago, IL 60603 Coopers & Lybrand (1990-1994).
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE TRUST DURING THE PAST 5 YEARS
--------------------- -------------- -----------------------
<S> <C> <C>
Nancy G. Curtiss (48) Treasurer Vice President, Fund Accounting (1994-present) and Treasurer
(1996-present), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix Duff & Phelps Institutional
Mutual Funds (1995-present), Phoenix-Aberdeen Series Fund
(1996-present) and Phoenix-Seneca Funds (2000-present). Second
Vice President and Treasurer, Fund Accounting, Phoenix Home
Life Mutual Insurance Company (1994-1995).
G. Jeffrey Bohne (53) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Senior Vice President
(1999-present) Greenfield, MA 01301 and Vice President (1996-1999),
Mutual Fund Customer Service; Vice President, Transfer Agent
Operations (1993-1996), Phoenix Equity Planning Corporation.
Secretary/Clerk, Phoenix Funds (1993-present), Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present), Phoenix-Aberdeen Series
Fund (1996-present) and Phoenix-Seneca Funds (2000-present).
</TABLE>
------------------------
*Trustees identified with an asterisk are considered to be interested persons
of the Trust (within the meaning of the Investment Company Act of 1940, as
amended) because of their affiliation with Phoenix Investment Counsel, Inc.,
or Phoenix Equity Planning Corporation or Phoenix Investment Partners, Ltd.
For services rendered to the Trust for the fiscal year ended November 30,
1999, the Trustees received an aggregate of $91,462. For services on the Boards
of Directors/Trustees of the Phoenix Funds, each Trustee who is not a full-time
employee of the Adviser or any of its affiliates currently receives a retainer
at the annual rate of $40,000 and a fee of $2,500 per joint meeting of the
Boards. Each Trustee who serves on the Audit Committee receives a retainer at
the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee meeting
attended. Each Trustee who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of Trustees.
Trustee fee costs are allocated equally to each of the Funds and the Funds
within the Phoenix Funds complex. The foregoing fees do not include
reimbursement of expenses incurred in connection with meeting attendance.
Officers and employees of the Adviser who are not interested persons are
compensated for their services by the Adviser and receive no compensation from
the Trust.
30
<PAGE>
For the Trust's last fiscal year, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
PENSION OR FROM TRUST AND
AGGREGATE RETIREMENT BENEFITS ESTIMATED FUND COMPLEX
COMPENSATION ACCRUED AS PART ANNUAL BENEFITS (31 FUNDS)
NAME FROM TRUST OF TRUST EXPENSES UPON RETIREMENT PAID TO TRUSTEES
---- ---------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C>
Robert Chesek $ 8,662 $63,750
E. Virgil Conway+ $11,250 $83,250
Harry Dalzell-Payne+ $10,162 $95,000
Francis E. Jeffries $ 8,250* $61,000
Leroy Keith, Jr. $ 8,662 None None $63,750
Philip R. McLoughlin+ $ 0 for any for any $ 0
Everett L. Morris+ $ 7,500* Trustee Trustee $57,750
James M. Oates+ $ 9,750 $72,250
Herbert Roth, Jr.+ $ 8,100 $59,250
Richard E. Segerson $ 9,750* $72,000
Lowell P. Weicker $ 9,375 $68,750
</TABLE>
---------------------
*This compensation (and the earnings thereon) will be deferred pursuant to the
Deferred Compensation Plan. At September 30, 1999, the total amount of
deferred compensation (including interest and other accumulation earned on
the original amounts deferred) accrued for Messrs. Jeffries, Morris, Roth and
Segerson was $547,732.52, $210,732.52, $178,770.56 and $129,978.47,
respectively. At present, by agreement among the Fund, the Distributor and
the electing director, director fees that are deferred are paid by the Fund
to the Distributor. The liability for the deferred compensation obligation
appears only as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are members
of the Executive Committee.
At November 7, 2000, the Trustees and officers as a group owned less than 1%
of the then outstanding shares of any class of the Funds.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of November 7, 2000 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially own 5% or more of any class of the Fund's equity
securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF THE CLASS NUMBER OF SHARES
------------------- -------------- ----------------------- ----------------
<S> <C> <C> <C>
MLPF&S for the Sole Tax Sensitive Growth Fund 33.12% 46,523.590
Benefit of its Customers Class B
Attn: Fund Administration Tax Sensitive Growth Fund 10.18% 23,070.274
4800 Deer Lake Dr. E. 3rd Fl. Class C
Jacksonville, FL 32246-6484
Phoenix Home Life Tax Sensitive Growth Fund 46.34% 270,000.000
Attn: Pamela Levesque Class A
One American Row Tax Sensitive Growth Fund 7.12% 10,000.000
Hartford, CT 06115-2521 Class B
Tax Sensitive Growth Fund 7.02% 10,000.000
Class X
Stanley Kessler Tax Sensitive Growth Fund 5.40% 31,447.693
P.O. Box 516 Class A
Metairie, LA 70004-0516
NSFC FEBO Tax Sensitive Growth Fund 7.04% 9,891.127
The John Petonito Family Trust Class B
CM Petonito - K A Hobin TTEE
10 Fellsmere Farm Road
Branford, CT 06405
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF THE CLASS NUMBER OF SHARES
------------------- -------------- ----------------------- ----------------
<S> <C> <C> <C>
Sales Marketing Services, LLC Tax Sensitive Growth Fund 8.34% 48,588.307
P.O. Box 516 Class A
Metairie, LA 70004-0516
PaineWebber for the Benefit of Tax Sensitive Growth Fund 6.70% 15,197.568
Allan M. Harris and Class C
Andrea F. Harris TTEES FBO
26997 Hemmingway Ct.
Hayward, CA 94542-2349
Painewebber for the Benefit of Tax Sensitive Growth Fund 8.88% 20,140.987
Melinda J. Larkin TTEE Class C
FBO Larkin Rev Family Trust
2116 Caroline Ct.
Rocklin, CA 95765-5337
DB Alex Brown LLC Tax Sensitive Growth Fund 19.27% 27,463.079
FBO 761-01199-14 Class X
P.O. Box 1346
Baltimore, MD 21203-1346
DB Alex Brown LLC Tax Sensitive Growth Fund 8.70% 12,402.812
FBO 761-01033-14 Class X
P.O. Box 1346
Baltimore, MD 21203-1346
DB Alex Brown LLC Tax Sensitive Growth Fund 10.83% 15,428.945
FBO 761-03162-13 Class X
P.O. Box 1346
Baltimore, MD 21203-1346
DB Alex Brown LLC Tax Sensitive Growth Fund 10.77% 15,342.594
FBO 761-01033-14 Class X
P.O. Box 1346
Baltimore, MD 21203-1346
Pasadena National Trust Co TTEE Tax Sensitive Growth Fund 5.13% 7,313.273
Jonathan M. O. Blumburg Trust Class X
600 North Rosemead Blvd.
Pasadena, CA 91107-2138
</TABLE>
ADDITIONAL INFORMATION
The Trust's Prospectus and this Statement of Additional Information omit
certain information contained in the registration statement filed with the
Securities and Exchange Commission which may be obtained from the Commission's
principal office at 450 Fifth Street, N.W., Washington, DC 20549, upon payment
of the fee prescribed by the rules and regulations promulgated by the
Commission.
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Funds and different classes of those Funds. Holders of shares of a Fund have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Fund. Shareholders of all Funds vote on the
election of Trustees. On matters affecting an individual Fund (such as approval
of an investment advisory agreement or a change in fundamental investment
policies) and on matters affecting an individual class (such as approval of
matters relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Fund or Class is required. The Trust does not hold regular
meetings of shareholders. The Trustees will call a meeting when at least 10% of
the outstanding shares so request in writing. If the Trustees fail to call a
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
32
<PAGE>
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. The Declaration of Trust provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability, which
is considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
FINANCIAL STATEMENTS
The Financial Statements for the Trust's fiscal year ended November 30, 1999
and for the period ended May 31, 2000, appearing in the Fund's 1999 Annual
Report and May 2000 Semiannual Report to Shareholders, are incorporated herein
by reference.
REPORTS TO SHAREHOLDERS
The fiscal year of the Trust ends on November 30. The Trust will send
financial statements to its shareholders at least semiannually. An annual report
containing financial statements audited by the Trust's independent accountants,
will be sent to shareholders each year.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Trust. PricewaterhouseCoopers LLP
audits the Trust's annual financial statements and expresses an opinion thereon.
CUSTODIANS AND TRANSFER AGENT
The custodian of the assets of the Bond Fund, Real Estate Fund, Emerging
Markets Fund and Tax Sensitive Growth Fund is State Street Bank and Trust
Company, P.O. Box 351, Boston, Massachusetts, 02101. The custodian of the assets
of the International Fund is Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109. The Trust has authorized the custodians to appoint
one or more subcustodians for the assets of the Trust held outside the United
States. The securities and other assets of each Fund of the Trust are held by
each Custodian or any subcustodian separate from the securities and assets of
each other Fund.
Pursuant to a Transfer Agent and Service Agreement with the Phoenix Funds,
Equity Planning acts as transfer agent for the Trust (the "Transfer Agent") for
which it is paid $22.25 for each designated daily dividend shareholder account
and $17.95 for each designated non-daily dividend shareholder account plus
out-of-pocket expenses. The Transfer Agent is authorized to engage subagents to
perform certain shareholder servicing functions from time to time for which such
agents shall be paid a fee by the Transfer Agent.
33
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
INVESTMENTS AT MAY 31, 2000
(UNAUDITED)
SHARES VALUE
------- ------------
COMMON STOCKS--0.5%
UNITED STATES--0.5%
MIH Ltd. (Broadcasting (Television,
Radio & Cable))(b) ................................. 8,500 $ 279,172
Viatel, Inc. (Telecommunications (Long Distance))(b) 23,997 598,425
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $1,523,478) 877,597
- -----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--95.6%
ARGENTINA--0.1%
PC Holdings SA ADR (Financial (Diversified)) ....... 9,000 141,750
AUSTRALIA--1.3%
Australian Gas Light Co., Ltd. (Natural Gas) ....... 200,000 1,041,726
QBE Insurance Group Ltd. (Insurance
(Property-Casualty)) ............................... 298,000 1,132,252
------------
2,173,978
------------
BELGIUM--0.4%
Dexia Strips (Banks (Major Regional))(b) ........... 5,031 233
Dexia (Banks (Major Regional)) ..................... 4,838 651,928
------------
652,161
------------
BRAZIL--0.6%
Aracruz Celulose SA ADR (Paper & Forest Products) .. 15,000 251,250
Companhia Cervejaria Brahma ADR
(Beverages (Alcoholic)) ............................ 7,600 110,200
Tele Centro Sul Participacoes SA ADR
(Telecommunications (Long Distance)) ............... 4,500 270,000
Tele Norte Leste Participacoes SA ADR
(Telecommunications (Long Distance)) ............... 16,756 328,837
------------
960,287
------------
CANADA--4.1%
Nortel Networks, Corp
(Communications Equipment) ......................... 130,000 7,060,625
CHILE--0.1%
Companhia de Telecomunicaciones de Chile SA ADR
(Telecommunications (Long Distance)) ............... 8,500 167,875
DENMARK--0.4%
Danisco A/S (Foods) ................................ 18,965 680,812
SHARES VALUE
------- ------------
FINLAND--3.5%
Helsingin Puhelin Oyj (Telephone) .................. 9,443 $ 665,567
Nokia Oyj (Communications Equipment) ............... 86,560 4,479,401
Sonera Oyj (Telephone) ............................. 9,400 473,365
Stora Enso Oyj (Paper & Forest Products) ........... 42,000 393,404
------------
6,011,737
------------
FRANCE--11.4%
Air Liquide SA (Chemicals (Specialty)) ............. 6,483 904,859
Alcatel SA (Communications Equipment) .............. 23,535 1,294,307
Axa (Insurance (Multi-Line)) ....................... 10,807 1,583,546
Cap Gemini SA (Services (Data Processing)) ......... 5,543 1,032,745
Carrefour SA (Retail (Food Chains)) ................ 13,010 915,169
Castorama Dubois Investissement SA
(Retail (Building Supplies)) ....................... 5,925 1,489,108
Euler SA (Financial (Diversified))(b) .............. 6,400 311,607
Groupe Danone (Foods) .............................. 3,400 791,761
Lafarge SA (Construction (Cement & Aggregates)) .... 17,051 1,312,491
Renault SA (Automobiles) ........................... 19,429 909,935
Rhone-Poulenc Class A (Chemicals (Diversified)) .... 25,300 1,635,392
STMicroelectronics NV (Electronics (Semiconductors)) 16,983 1,006,430
Schneider Electric SA (Electrical Equipment) ....... 15,872 1,050,989
Suez Lyonnaise des Eaux SA (Engineering &
Construction) ...................................... 3,775 630,170
Total Fina Elf (Oil & Gas (Refining & Marketing)) .. 14,998 2,349,262
Usinor SA (Iron & Steel) ........................... 30,000 358,905
Valeo SA (Auto Parts & Equipment) .................. 10,948 551,319
Vivendi (Manufacturing (Diversified)) .............. 11,693 1,247,074
------------
19,375,069
------------
GERMANY--4.7%
Allianz AG Vinkulierte Registered Shares
(Insurance (Multi-Line)) ........................... 3,168 1,137,011
Bayerische Hypo- und Vereinsbank AG
(Banks (Major Regional)) ........................... 16,658 1,076,773
Bayerische Motoren Werke AG (Automobiles) .......... 27,600 826,761
Deutsche Bank AG Registered Shares
(Banks (Major Regional)) ........................... 21,474 1,648,966
Deutsche Telekom AG Registered Shares
(Telephone) ........................................ 7,498 465,896
Muenchener Rueckversicherungs-Gesellschaft AG
Vinkulierte Registered Shares (Insurance
(Multi-Line)) ...................................... 5,363 1,566,703
RWE AG (Manufacturing (Diversified)) ............... 17,420 636,521
Viag AG (Manufacturing (Diversified)) .............. 29,914 608,944
------------
7,967,575
------------
See Notes to Financial Statements
3
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
SHARES VALUE
------- ------------
GREECE--0.3%
Hellenic Telecommunications Organization SA
(Telephone) ........................................ 22,760 $ 557,613
HONG KONG--2.2%
Cheung Kong (Holdings) Ltd. (Financial (Diversified)) 40,000 365,760
Swire Pacific Ltd. Class B (Manufacturing
(Diversified)) ..................................... 4,150,000 3,328,735
------------
3,694,495
------------
HUNGARY--0.2%
Magyar Tavkozlesi Rt ADR (Telecommunications
(Long Distance)) ................................... 11,640 397,215
INDIA--1.2%
BSES Ltd. GDR (Electric Companies)(b) .............. 30,000 565,500
Gas Authority of India Ltd. GDR (Oil & Gas (Refining
& Marketing)) ...................................... 40,000 223,000
Mahanagar Telephone Nigam Ltd. GDR (Telephone) ..... 115,000 1,175,875
------------
1,964,375
------------
INDONESIA--0.3%
PT Indonesian Satellite Corp. Tbk ADR
(Telecommunications (Long Distance)) ............... 41,000 438,188
PT Indonesian Satellite Corp. Tbk. (Telephone) ..... 110,000 119,732
------------
557,920
------------
ISRAEL--0.2%
Bank Hapoalim Ltd. (Banks (Major Regional)) ........ 121,000 347,633
ITALY--2.2%
Banca Intesa SPA (Banks (Major Regional)) .......... 386,852 800,052
San Paolo - IMI SPA (Banks (Major Regional)) ....... 49,958 727,400
Telecom Italia Mobile SPA (Telephone) .............. 84,104 871,241
Telecom Italia SPA (Telephone) ..................... 100,459 1,378,856
------------
3,777,549
------------
JAPAN--17.4%
Canon, Inc. (Office Equipment & Supplies) .......... 48,000 2,211,097
Circle K Japan Co., Ltd. (Retail (Food Chains)) .... 34,000 1,326,213
Dai Nippon Printing Co., Ltd. (Specialty Printing) . 125,000 2,132,574
Fuji Photo Film Co., Ltd. (Photography/Imaging) .... 45,000 1,571,395
Hitachi Credit Corp. (Consumer Finance) ............ 63,000 1,550,498
Ito-Yokado Co., Ltd. (Retail (Food Chains)) ........ 19,000 1,127,559
Kao Corp. (Household Products (Non-Durable)) ....... 63,000 1,913,257
Mabuchi Motor Co., Ltd. (Electrical Equipment) ..... 12,000 1,249,314
NTT DoCoMo, Inc. (Telecommunications
(Cellular/Wireless)) ............................... 400 1,032,737
Nikko Securities Co., Ltd. (The) (Investment
Banking/Brokerage) ................................. 160,000 1,482,981
Nippon Telegraph & Telephone Corp. (Telephone) ..... 850 1,010,448
SHARES VALUE
------- ------------
JAPAN--CONTINUED
Rinnai Corp. (Household Furnishings & Appliances) .. 100,000 $ 2,163,918
Rohm Co., Ltd. (Electronics (Semiconductors)) ...... 5,300 1,653,865
Sankyo Co., Ltd. (Health Care (Drugs-Major
Pharmaceuticals)) .................................. 95,000 2,192,476
Sanwa Bank Ltd. (The) (Banks (Major Regional)) ..... 175,000 1,459,484
Secom Co., Ltd. (Services (Commercial &
Consumer)) ......................................... 14,000 949,152
Sharp Corp. (Household Furnishings & Appliances) ... 85,000 1,531,460
Shin-Etsu Chemical Co., Ltd. (Chemicals
(Specialty)) ....................................... 35,000 1,716,275
Suzuki Motor Corp. (Automobiles) ................... 120,000 1,476,665
------------
29,751,368
------------
MALAYSIA--0.8%
Carlsberg Brewery Malaysia Berhad (Beverages
(Alcoholic)) ....................................... 150,000 513,154
Malaysian Oxygen Berhad (Chemicals (Specialty)) .... 175,000 543,417
Sime UEP Properties Berhad (Financial (Diversified)) 282,000 374,760
------------
1,431,331
------------
MEXICO--0.8%
Cemex SA de CV ADR (Construction (Cement
& Aggregates)) ..................................... 15,000 317,813
Fomento Economico Mexicano SA de CV ADR
(Beverages (Alcoholic)) ............................ 7,000 266,438
Grupo Televisa SA GDR (Broadcasting (Television,
Radio & Cable))(b) ................................. 3,000 167,063
Telefonos de Mexico SA ADR Series L
(Telecommunications (Long Distance)) ............... 11,000 535,563
------------
1,286,877
------------
NETHERLANDS--8.5%
ASM Lithography Holding NV (Equipment
(Semiconductors)) .................................. 24,384 892,340
Elsevier NV (Publishing) ........................... 43,359 404,525
Equant NV (Services (Data Processing)) ............. 12,230 531,493
Fortis (NL) NV (Financial (Diversified)) ........... 24,874 650,524
Gucci Group (Textiles (Apparel)) ................... 9,600 823,979
Heineken NV (Beverages (Alcoholic)) ................ 26,103 1,332,650
IHC Caland NV (Oil & Gas (Drilling & Equipment)) ... 25,867 1,159,874
ING Groep NV (Financial (Diversified)) ............. 19,165 1,139,470
KPN NV (Telephone)(b) .............................. 11,154 1,001,324
Koninklijke (Royal) Philips Electronics NV
(Electronics (Component Distributors)) ............. 26,236 1,164,498
Koninklijke Ahold NV (Retail (Food Chains)) ........ 25,400 713,748
Royal Dutch Petroleum Co. (Oil (Domestic
Integrated)) ....................................... 21,426 1,312,051
United Pan-Europe Communications NV (Broadcasting
(Television, Radio & Cable)) ....................... 47,273 1,217,468
See Notes to Financial Statements
4
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
SHARES VALUE
------- ------------
NETHERLANDS--CONTINUED
VNU NV (Publishing) ................................ 22,904 $ 1,161,896
Versatel Telecom International NV (Telecommunications
(Long Distance))(b) ................................ 21,900 786,002
Wolters Kluwer NV (Publishing) ..................... 11,400 277,102
------------
14,568,944
------------
PHILIPPINES--0.3%
Ayala Land, Inc. (Financial (Diversified)) ......... 4,212,000 483,911
POLAND--0.2%
Elektrim Spolka Akcyjna SA (Distributors (Food &
Health)) ........................................... 28,800 377,017
SINGAPORE--0.8%
Singapore Airlines Ltd. (Airlines) ................. 80,000 697,009
United Overseas Bank Ltd. (Banks (Major
Regional)) ......................................... 116,504 631,888
------------
1,328,897
------------
SOUTH AFRICA--0.3%
BoE Ltd. (Financial (Diversified)) ................. 339,520 207,173
De Beers (Metals Mining) ........................... 16,324 353,432
RMB Holdings Ltd. (Financial (Diversified)) ........ 23,375 34,064
------------
594,669
------------
SOUTH KOREA--0.8%
Kookmin Bank (Banks (Major Regional)) .............. 33,013 353,658
Pohang Iron & Steel Co., Ltd. (Iron & Steel) ....... 12,700 987,590
------------
1,341,248
------------
SPAIN--3.6%
Altadis SA (Tobacco) ............................... 82,900 1,208,580
Amadeus Global Travel Distribution SA (Services
(Employment))(b) ................................... 40,025 370,079
Banco Popular Espanol SA (Banks (Major Regional)) .. 28,608 910,018
Banco Santander Central Hispano SA
(Banks (Major Regional)) ........................... 45,925 447,631
Endesa SA (Electric Companies) ..................... 20,700 426,563
Groupo Dragados SA (Engineering & Construction) .... 60,155 441,840
Repsol YPF SA (Oil & Gas (Refining & Marketing)) ... 44,919 952,719
Telefonica SA (Telephone) .......................... 66,405 1,354,852
------------
6,112,282
------------
SWEDEN--5.3%
ABB Ltd. (Electrical Equipment) .................... 6,135 748,748
Assa Abloy AB Class B (Machinery (Diversified)) .... 29,000 556,637
Electrolux AB Class B (Household Furnishings &
Appliances) ........................................ 42,771 721,309
Skandia Forsakrings AB (Insurance (Life/Health)) ... 43,442 1,108,577
SHARES VALUE
---------- ------------
SWEDEN--CONTINUED
Skandinaviska Enskilda Banken Class A (Banks
(Major Regional)) .................................. 69,967 $ 760,760
Svenska Handlesbanken AB Class A (Banks (Major
Regional)) ......................................... 96,100 1,354,114
Tele1 Europe Holding AB (Telephone)(b) ............. 29,440 354,402
Telefonaktiebolaget LM Ericsson (Communications
Equipment) ......................................... 165,808 3,357,350
------------
8,961,897
------------
SWITZERLAND--4.6%
Credit Suisse Group Registered Shares (Banks
(Major Regional)) .................................. 4,427 822,722
Nestle SA Registered Shares (Foods) ................ 765 1,453,283
Novartis AG Registered Shares (Health Care
(Drugs-Major Pharmaceuticals)) ..................... 1,017 1,494,009
Roche Holding AG (Health Care (Drugs-Major
Pharmaceuticals)) .................................. 166 1,743,255
UBS AG Registered Shares (Banks (Major
Regional)) ......................................... 12,786 1,718,011
Zurich Allied AG (Financial (Diversified)) ......... 1,204 589,573
------------
7,820,853
------------
TAIWAN--0.1%
Standard Foods Taiwan Ltd. GDR (Foods) ............. 62,154 194,231
THAILAND--0.3%
BEC World Public Co., Ltd. (Entertainment) ......... 70,000 428,516
TURKEY--0.1%
Yapi ve Kredi Bankasi AS (Banks (Major Regional)) .. 17,052,728 210,196
UNITED KINGDOM--18.5%
3i Group PLC (Investment Banking/Brokerage) ........ 67,085 1,269,444
AstraZeneca Group PLC (Health Care (Drugs-Major
Pharmaceuticals)) .................................. 34,239 1,442,170
BAE Systems PLC (Aerospace/Defense) ................ 83,869 525,881
BG Group PLC (Natural Gas) ......................... 72,268 433,156
BOC Group PLC (Chemicals (Specialty)) .............. 21,297 299,227
BP Amoco PLC (Oil (Domestic Integrated)) ........... 289,644 2,634,387
Bank of Scotland (Banks (Major Regional)) .......... 73,882 695,719
Barclays PLC (Banks (Major Regional)) .............. 22,390 581,980
Bass PLC (Beverages (Alcoholic)) ................... 40,758 445,333
Berkeley Group PLC (The) (Homebuilding) ............ 40,339 337,048
British American Tobacco PLC (Tobacco) ............. 56,845 332,218
British Telecommunications PLC (Telephone) ......... 112,208 1,625,182
CGNU PLC (Insurance (Life/Health)) ................. 34,920 530,301
COLT Telecom Group PLC (Telephone)(b) .............. 10,700 377,282
Cable & Wireless PLC (Telephone) ................... 50,805 846,712
Capital Radio PLC (Broadcasting (Television, Radio
& Cable)) .......................................... 14,140 268,415
Carlton Communications PLC (Entertainment) ......... 50,000 593,396
See Notes to Financial Statements
5
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
SHARES VALUE
---------- ------------
UNITED KINGDOM--CONTINUED
CMG PLC (Services (Data Processing)) ............... 30,400 $ 410,773
Compass Group PLC (Services (Commercial &
Consumer)) ......................................... 24,852 278,226
Daily Mail and General Trust (Publishing
(Newspapers)) ...................................... 16,800 258,643
Dixons Group PLC (Retail (Computers &
Electronics)) ...................................... 50,761 240,137
FirstGroup PLC (Services (Commercial &
Consumer)) ......................................... 99,803 340,866
Glaxo Wellcome PLC (Health Care (Drugs-Major
Pharmaceuticals)) .................................. 63,369 1,790,165
Granada Group PLC (Restaurants) .................... 44,347 393,073
HSBC Holdings PLC (Financial (Diversified)) ........ 107,300 1,183,615
Hilton Group PLC (Gaming, Lottery & Pari-mutuel
Companies) ......................................... 117,902 435,284
Invensys PLC (Machinery (Diversified)) ............. 111,147 382,103
Legal & General Group PLC (Insurance
(Multi-Line)) ...................................... 257,622 646,914
Lloyds TSB Group PLC (Financial (Diversified)) ..... 84,525 914,699
Logica PLC (Services (Data Processing)) ............ 46,943 1,255,265
Marconi PLC (Manufacturing (Diversified)) .......... 26,000 312,841
RMC Group PLC (Construction (Cement &
Aggregates)) ....................................... 23,804 298,159
Reuters Group PLC (Publishing) ..................... 29,128 433,635
Rio Tinto PLC (Metals Mining) ...................... 37,937 559,673
Royal & Sun Alliance Insurance Group PLC
(Insurance (Multi-Line)) ........................... 78,961 469,732
Sage Group PLC (The) (Computers (Software &
Services)) ......................................... 28,980 280,907
Schroders PLC (Investment Banking/Brokerage) ....... 21,241 340,666
Schroders PLC Jersey Shares (Investment
Banking/Brokerage) ................................. 21,241 95,247
Serco Group PLC (Services (Commercial &
Consumer)) ......................................... 81,318 549,996
Shell Transport & Trading Co. PLC (Oil (Domestic
Integrated)) ....................................... 133,370 1,102,895
SmithKline Beecham PLC (Health Care (Drugs-Major
Pharmaceuticals)) .................................. 82,270 1,050,156
Smiths Industries PLC (Aerospace/Defense) .......... 20,452 233,093
Vodafone AirTouch PLC (Telecommunications
(Cellular/Wireless)) ............................... 801,619 3,654,452
WPP Group PLC (Services (Advertising/Marketing)) ... 18,732 227,630
Woolwich PLC (Consumer Finance) .................... 55,069 253,520
------------
31,630,216
------------
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $141,594,726) 163,011,122
- -----------------------------------------------------------------------------
SHARES VALUE
---------- ------------
RIGHTS--0.0%
SWEDEN--0.0%
Assa Abloy-Rights (Machinery (Diversified))(b) ..... 29,000 $ 6,178
- -----------------------------------------------------------------------------
TOTAL RIGHTS
(IDENTIFIED COST $0) 6,178
- -----------------------------------------------------------------------------
WARRANTS--0.0%
GERMANY--0.0%
Muenchener Rueckversicherungs-Gesellschaft AG
Warrants (Insurance (Multi-Line))(b) ............... 176 13,139
- -----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 13,139
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.1%
(IDENTIFIED COST $143,118,204) 163,908,036
- -----------------------------------------------------------------------------
STANDARD PAR
& POOR'S VALUE
RATING (000)
---------- ------
SHORT-TERM OBLIGATIONS--3.1%
COMMERCIAL PAPER--3.1%
Koch Industries, Inc. 6.77%, 6/1/00 ...... A-1+ $5,245 5,245,000
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $5,245,000) 5,245,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.2%
(IDENTIFIED COST $148,363,204) 169,153,036(a)
Cash and receivables, less liabilities--0.8% 1,471,604
------------
NET ASSETS--100.0% $170,624,640
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $33,025,621 and gross
depreciation of $13,062,636 for federal income tax purposes. At May 31,
2000, the aggregate cost of securities for federal income tax purposes was
$149,190,051.
(b) Non-income producing.
See Notes to Financial Statements
6
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
<TABLE>
<CAPTION>
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VAUE OF TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<S> <C> <S> <C>
Aerospace/Defense ......................... 0.6% Investment Banking/Brokerage .............. 1.2%
Airlines .................................. 0.4 Iron & Steel .............................. 0.8
Auto Parts & Equipment .................... 0.3 Machinery (Diversified) ................... 0.6
Automobiles ............................... 2.0 Manufacturing (Diversified) ............... 3.5
Banks (Major Regional) .................... 9.3 Metals Mining ............................. 0.6
Beverages (Alcoholic) ..................... 1.6 Miscellaneous ............................. 0.8
Broadcasting (Television, Radio & Cable) .. 1.2 Natural Gas ............................... 0.9
Chemicals (Diversified) ................... 1.0 Office Equipment & Supplies ............... 1.4
Chemicals (Specialty) ..................... 2.1 Oil & Gas (Drilling & Equipment) .......... 0.7
Communications Equipment .................. 9.9 Oil & Gas (Refining & Marketing) .......... 2.1
Computers (Software & Services) ........... 0.2 Oil (Domestic Integrated) ................. 3.1
Construction (Cement & Aggregates) ........ 1.2 Paper & Forest Products ................... 0.4
Consumer Finance .......................... 1.1 Photography/Imaging ....................... 1.0
Distributors (Food & Health) .............. 0.2 Publishing ................................ 1.4
Electric Companies ........................ 0.6 Publishing (Newspapers) ................... 0.2
Electrical Equipment ...................... 1.9 Restaurants ............................... 0.2
Electronics (Component Distributors) ...... 0.7 Retail (Building Supplies) ................ 0.9
Electronics (Semiconductors) .............. 1.6 Retail (Computers & Electronics) .......... 0.1
Engineering & Construction ................ 0.6 Retail (Food Chains) ...................... 2.5
Entertainment ............................. 0.6 Services (Advertising/Marketing) .......... 0.1
Equipment (Semiconductors) ................ 0.5 Services (Commercial & Consumer) .......... 1.3
Financial (Diversified) ................... 3.7 Services (Data Processing) ................ 2.0
Foods ..................................... 1.9 Services (Employment) ..................... 0.2
Gaming, Lottery & Pari-Mutuel Companies ... 0.3 Specialty Printing ........................ 1.3
Health Care (Drugs-Major Pharmaceuticals) . 5.9 Telecommunications (Cellular/Wireless) .... 2.9
Homebuilding .............................. 0.4 Telecommunications (Long Distance) ........ 1.7
Household Furnishings & Appliances ........ 2.7 Telephone ................................. 8.0
Household Products (Non-Durable) .......... 1.2 Textiles (Apparel) ........................ 0.5
Insurance (Life/Health) ................... 1.0 Tobacco ................................... 0.9
Insurance (Multi-Line) .................... 3.3 -----
Insurance (Property-Casualty) ............. 0.7 100.0%
=====
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $148,363,204) $169,153,036
Cash 3,280
Foreign currency at value
(Identified cost $0) 47
Receivables
Fund shares sold 1,476,482
Investment securities sold 832,317
Dividends 494,535
Tax reclaim 159,633
Prepaid expenses 2,245
------------
Total assets 172,121,575
------------
LIABILITIES
Payables
Fund shares repurchased 775,467
Investment securities purchased 361,066
Investment advisory fee 107,728
Transfer agent fee 79,501
Distribution fee 51,897
Financial agent fee 17,777
Trustees' fee 12,535
Accrued expenses 90,964
------------
Total liabilities 1,496,935
------------
NET ASSETS $170,624,640
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $143,081,079
Undistributed net investment loss (1,849,877)
Accumulated net realized gain 8,629,214
Net unrealized appreciation 20,764,224
------------
NET ASSETS $170,624,640
============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $144,818,124) 11,068,065
Net asset value per share $13.08
Offering price per share $ 13.08/(1-5.75%) $13.88
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $23,454,474) 1,885,890
Net asset value and offering price per share $12.44
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,352,042) 189,946
Net asset value and offering price per share $12.38
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 1,661,964
Interest 95,678
Foreign taxes withheld (160,529)
-----------
Total investment income 1,597,113
-----------
EXPENSES
Investment advisory fee 693,559
Distribution fee, Class A 197,653
Distribution fee, Class B 124,984
Distribution fee, Class C 9,149
Financial agent fee 97,838
Transfer agent 203,195
Custodian 156,026
Printing 58,822
Registration 24,265
Professional 23,215
Trustees 12,251
Miscellaneous 13,885
-----------
Total expenses 1,614,842
-----------
NET INVESTMENT LOSS (17,729)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on securities 9,397,637
Net realized gain on foreign currency transactions (45,863)
Net change in unrealized appreciation (depreciation)
on investments (5,201,234)
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (10,151)
-----------
NET GAIN ON INVESTMENTS 4,140,389
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,122,660
===========
See Notes to Financial Statements
8
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
5/31/00 YEAR ENDED
(UNAUDITED) 11/30/99
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (17,729) $ 337,148
Net realized gain (loss) 9,351,774 27,709,290
Net change in unrealized appreciation (depreciation) (5,211,385) 7,604,690
------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,122,660 35,651,128
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (2,221,793) (965,436)
Net investment income, Class B (186,459) (53,315)
Net investment income, Class C (18,780) (618)
Net realized gains, Class A (23,690,500) (34,216,232)
Net realized gains, Class B (3,891,968) (3,256,281)
Net realized gains, Class C (243,620) --
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (30,253,120) (38,491,882)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (9,398,201 and 43,335,908 shares, respectively) 130,582,717 603,284,388
Net asset value of shares issued from reinvestment of distributions
(1,745,573 and 2,295,281 shares, respectively) 24,106,392 30,104,837
Cost of shares repurchased (9,926,391 and 46,511,696 shares, respectively) (138,733,964) (650,782,676)
------------- -------------
Total 15,955,145 (17,393,451)
------------- -------------
CLASS B
Proceeds from sales of shares (1,072,115 and 2,376,201 shares, respectively) 14,197,843 31,785,116
Net asset value of shares issued from reinvestment of distributions
(261,427 and 225,595 shares, respectively) 3,442,997 2,838,109
Cost of shares repurchased (1,066,504 and 2,104,335 shares, respectively) (14,216,667) (28,370,576)
------------- -------------
Total 3,424,173 6,252,649
------------- -------------
CLASS C
Proceeds from sales of shares (156,858 and 89,026 shares, respectively) 2,120,797 1,216,206
Net asset value of shares issued from reinvestment of distributions
(16,848 and 29 shares, respectively) 220,882 396
Cost of shares repurchased (61,400 and 11,415 shares, respectively) (812,425) (166,015)
------------- -------------
Total 1,529,254 1,050,587
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 20,908,572 (10,090,215)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS (5,221,888) (12,930,969)
NET ASSETS
Beginning of period 175,846,528 188,777,497
------------- -------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF ($1,849,877) AND $594,884, RESPECTIVELY] $ 170,624,640 $ 175,846,528
============= =============
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30
5/31/00 --------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.33 $ 15.98 $ 13.89 $ 14.48 $ 12.20 $ 12.63
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.01 0.04(1) 0.06(1) 0.03(1) 0.04(1) 0.03(1)
Net realized and unrealized gain 0.30 2.49 3.27 1.01 2.28 0.42
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.31 2.53 3.33 1.04 2.32 0.45
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.22) (0.07) -- (0.29) -- --
Dividends from net realized gains (2.34) (3.11) (1.24) (1.34) (0.04) (0.88)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (2.56) (3.18) (1.24) (1.63) (0.04) (0.88)
------- ------- ------- ------- ------- -------
Change in net asset value (2.25) (0.65) 2.09 (0.59) 2.28 (0.43)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 13.08 $ 15.33 $ 15.98 $ 13.89 $ 14.48 $ 12.20
======= ======= ======= ======= ======= =======
Total return(2) 1.10%(4) 19.22% 26.17% 8.21% 19.03% 4.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $144,818 $151,016 $171,463 $131,338 $135,524 $129,352
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.64%(3) 1.53% 1.37% 1.56% 1.57% 1.70%
Net investment income 0.09%(3) 0.27% 0.40% 0.22% 0.33% 0.23%
Portfolio turnover 28%(4) 77% 104% 167% 151% 236%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30
5/31/00 -------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.64 $ 15.44 $ 13.56 $ 14.22 $12.07 $12.60
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.01 (0.07)(1) (0.05)(1) (0.08)(1) (0.05)(1) (0.07)(1)
Net realized and unrealized gain 0.25 2.40 3.17 1.00 2.24 0.42
------- ------- ------- ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.26 2.33 3.12 0.92 2.19 0.35
------- ------- ------- ------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.12) (0.02) -- (0.24) -- --
Dividends from net realized gains (2.34) (3.11) (1.24) (1.34) (0.04) (0.88)
------- ------- ------- ------- ------ ------
TOTAL DISTRIBUTIONS (2.46) (3.13) (1.24) (1.58) (0.04) (0.88)
------- ------- ------- ------- ------ ------
Change in net asset value (2.20) (0.80) 1.88 (0.66) 2.15 (0.53)
------- ------- ------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 12.44 $ 14.64 $ 15.44 $ 13.56 $14.22 $12.07
======= ======= ======= ======= ====== ======
Total return(2) 0.78%(4) 18.45% 25.17% 7.37% 18.16% 3.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $23,454 $23,694 $17,315 $10,159 $6,955 $3,261
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.39%(3) 2.29% 2.11% 2.31% 2.31% 2.50%
Net investment income (loss) (0.65)%(3) (0.51)% (0.34)% (0.55)% (0.39)% (0.61)%
Portfolio turnover 28%(4) 77% 104% 167% 151% 236%
<FN>
(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.
</FN>
</TABLE>
See Notes to Financial Statements
10
<PAGE>
PHOENIX-ABERDEEN INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
------------------------
SIX MONTHS FROM
ENDED INCEPTION
5/31/00 3/30/99 TO
(UNAUDITED) 11/30/99
Net asset value, beginning of period $14.65 $12.82
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) 0.04 (0.08)(1)
Net realized and unrealized gain 0.21 1.93
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.25 1.85
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.18) (0.02)
Dividends from net realized gains (2.34) --
------ ------
TOTAL DISTRIBUTIONS (2.52) (0.02)
------ ------
Change in net asset value (2.27) 1.83
------ ------
NET ASSET VALUE, END OF PERIOD $12.38 $14.65
====== ======
Total return(2) 0.72%(4) 14.41%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,352 $1,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.40%(3) 2.30%(3)
Net investment income (0.45)%(3) (0.85)%(3)
Portfolio turnover 28%(4) 77%
(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
11
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
INVESTMENTS AT MAY 31, 2000
(UNAUDITED)
SHARES VALUE
-------- ------------
COMMON STOCKS--97.6%
REAL ESTATE INVESTMENT TRUSTS--96.8%
DIVERSIFIED--6.9%
Colonial Properties Trust .......................... 5,000 $ 130,312
Vornado Realty Trust ............................... 56,500 1,973,969
-----------
2,104,281
-----------
INDUSTRIAL/OFFICE--42.6%
INDUSTRIAL--10.3%
CenterPoint Properties Corp. ....................... 31,500 1,155,656
First Industrial Realty Trust, Inc. ................ 44,000 1,278,750
ProLogis Trust ..................................... 33,000 682,687
-----------
3,117,093
-----------
MIXED--10.6%
Duke-Weeks Realty Corp. ............................ 64,474 1,390,221
Reckson Associates Realty Corp. .................... 82,700 1,814,231
-----------
3,204,452
-----------
OFFICE--21.7%
Alexandria Real Estate Equities, Inc. .............. 30,000 1,014,375
Boston Properties, Inc. ............................ 65,600 2,291,900
Equity Office Properties Trust ..................... 25,000 664,062
SL Green Realty Corp. .............................. 15,000 363,750
Spieker Properties, Inc. ........................... 49,000 2,275,438
-----------
6,609,525
-----------
- ------------------------------------------------------------------------------
TOTAL INDUSTRIAL/OFFICE 12,931,070
- ------------------------------------------------------------------------------
RESIDENTIAL--26.2%
APARTMENTS--24.5%
Apartment Investment & Management Co. .............. 48,000 1,923,000
Avalonbay Communities, Inc. ........................ 40,700 1,617,825
Equity Residential Properties Trust ................ 30,000 1,338,750
Essex Property Trust, Inc. ......................... 47,400 1,887,113
Smith (Charles E.) Residential Realty, Inc. ........ 18,000 680,625
-----------
7,447,313
-----------
SHARES VALUE
-------- -----------
MANUFACTURED HOMES--1.7%
Manufactured Home Communities, Inc. ................ 8,000 $ 193,000
Sun Communities, Inc. .............................. 10,000 323,750
-----------
516,750
-----------
- -----------------------------------------------------------------------------
TOTAL RESIDENTIAL 7,964,063
- -----------------------------------------------------------------------------
RETAIL--21.1%
REGIONAL MALLS--12.1%
CBL & Associates Properties, Inc. .................. 44,000 1,067,000
General Growth Properties, Inc. .................... 23,000 727,375
Macerich Co. (The) ................................. 43,800 955,388
Urban Shopping Centers, Inc. ....................... 28,000 938,000
-----------
3,687,763
-----------
STRIP CENTERS--9.0%
Chelsea GCA Realty, Inc. ........................... 30,000 1,014,375
Developers Diversified Realty Corp. ................ 49,200 710,325
Kimco Realty Corp. ................................. 25,000 1,012,500
-----------
2,737,200
-----------
- -----------------------------------------------------------------------------
TOTAL RETAIL 6,424,963
- -----------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS
(IDENTIFIED COST $27,645,178) 29,424,377
- -----------------------------------------------------------------------------
REAL ESTATE OPERATING COMPANIES--0.8%
DIVERSIFIED--0.8%
Frontline Capital Group(b) ......................... 15,000 218,438
Vornado Operating, Inc.(b) ......................... 4,075 32,345
-----------
250,783
-----------
- -----------------------------------------------------------------------------
TOTAL REAL ESTATE OPERATING COMPANIES
(IDENTIFIED COST $48,050) 250,783
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $27,693,228) 29,675,160
- -----------------------------------------------------------------------------
See Notes to Financial Statements
12
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
---------- ------- -----------
SHORT-TERM OBLIGATIONS--2.5%
COMMERCIAL PAPER--2.5%
Koch Industries, Inc. 6.77%, 6/1/00 ..... A-1+ $755 $ 755,000
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $755,000) 755,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.1%
(IDENTIFIED COST $28,448,228) 30,430,160(a)
Cash and receivables, less liabilities--(0.1%) (45,520)
-----------
NET ASSETS--100.0% $30,384,640
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,975,597 and gross
depreciation of $993,665 for federal income tax purposes. At May 31, 2000,
the aggregate cost of securities for federal income tax purposes was
$28,448,228.
(b) Non-income producing.
See Notes to Financial Statements
13
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $28,448,228) $30,430,160
Cash 2,305
Receivables
Dividends and interest 38,858
Fund shares sold 36,096
Prepaid expense 565
-----------
Total assets 30,507,984
-----------
LIABILITIES
Payables
Fund shares repurchased 31,390
Transfer agent fee 22,806
Investment advisory fee 22,745
Distribution fee 14,479
Trustees' fee 12,535
Financial agent fee 7,673
Accrued expenses 11,716
-----------
Total liabilities 123,344
-----------
NET ASSETS $30,384,640
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $30,787,208
Undistributed net investment income 121,458
Accumulated net realized loss (2,505,958)
Net unrealized appreciation 1,981,932
-----------
NET ASSETS $30,384,640
===========
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,066,259) 1,437,715
Net asset value per share $12.57
Offering price per share $12.57/(1-5.75%) $13.34
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $12,318,381) 987,634
Net asset value and offering price per share $12.47
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME
Dividends $1,025,750
Interest 10,162
----------
Total investment income 1,035,912
----------
EXPENSES
Investment advisory fee 111,236
Distribution fee, Class A 21,935
Distribution fee, Class B 60,573
Financial agent fee 32,623
Transfer agent 44,955
Trustees 12,250
Printing 9,307
Registration 8,017
Professional 6,512
Custodian 3,218
Miscellaneous 1,447
----------
Total expenses 312,073
Less expenses borne by investment adviser (73,939)
----------
Net expenses 238,134
----------
NET INVESTMENT INCOME 797,778
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (546,181)
Net change in unrealized appreciation (depreciation)
on investments 4,282,639
----------
NET GAIN ON INVESTMENTS 3,736,458
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,534,236
==========
See Notes to Financial Statements
14
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
5/31/00 YEAR ENDED
(UNAUDITED) 11/30/99
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 797,778 $ 1,436,909
Net realized gain (loss) (546,181) (1,888,259)
Net change in unrealized appreciation (depreciation) 4,282,639 (1,322,055)
----------- ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,534,236 (1,773,405)
----------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (565,766) (1,076,704)
Net investment income, Class B (350,305) (688,451)
----------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (916,071) (1,765,155)
----------- ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (115,072 and 149,096 shares, respectively) 1,345,491 1,804,294
Net asset value of shares issued from reinvestment of distributions
(46,257 and 85,480 shares, respectively) 519,541 990,008
Cost of shares repurchased (254,705 and 718,769 shares, respectively) (2,957,023) (8,384,839)
----------- ------------
Total (1,091,991) (5,590,537)
----------- ------------
CLASS B
Proceeds from sales of shares (60,751 and 167,405 shares, respectively) 713,637 2,005,746
Net asset value of shares issued from reinvestment of distributions
(24,969 and 47,858 shares, respectively) 278,724 551,622
Cost of shares repurchased (206,740 and 602,692 shares, respectively) (2,389,406) (7,096,425)
----------- ------------
Total (1,397,045) (4,539,057)
----------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (2,489,036) (10,129,594)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS 1,129,129 (13,668,154)
NET ASSETS
Beginning of period 29,255,511 42,923,665
----------- ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) OF
$121,458 AND $239,751, RESPECTIVELY) $30,384,640 $ 29,255,511
=========== ============
</TABLE>
See Notes to Financial Statements
15
<PAGE>
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED NOVEMBER 30 INCEPTION
5/31/00 ----------------------------------------------- 3/1/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.11 $12.25 $16.39 $13.14 $10.72 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.34 0.51(4) 0.55(4) 0.49(4) 0.53 0.43(4)
Net realized and unrealized gain (loss) 1.50 (1.07) (3.18) 3.52 2.50 0.55
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.84 (0.56) (2.63) 4.01 3.03 0.98
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.38) (0.58) (0.44) (0.51) (0.59) (0.26)
Dividends from net realized gains -- -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.38) (0.58) (1.51) (0.76) (0.61) (0.26)
------ ------ ------ ------ ------ ------
Change in net asset value 1.46 (1.14) (4.14) 3.25 2.42 0.72
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.57 $11.11 $12.25 $16.39 $13.14 $10.72
====== ====== ====== ====== ====== ======
Total return(1) 16.85%(3) (4.69)% (17.42)% 31.44% 29.20% 9.87%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $18,066 $17,014 $24,686 $36,336 $22,872 $13,842
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(5) 1.30%(2) 1.30% 1.31% 1.30% 1.30% 1.30%(2)
Net investment income 5.68%(2) 4.30% 3.79% 3.34% 4.55% 5.79%(2)
Portfolio turnover 5%(3) 22% 11% 54% 24% 9%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED NOVEMBER 30 INCEPTION
5/31/00 ------------------------------------------------ 3/1/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.04 $12.19 $16.32 $13.10 $10.68 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.28 0.42(4) 0.43(4) 0.38(4) 0.46 0.36(4)
Net realized and unrealized gain (loss) 1.48 (1.06) (3.15) 3.50 2.47 0.56
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.76 (0.64) (2.72) 3.88 2.93 0.92
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.33) (0.51) (0.34) (0.41) (0.49) (0.24)
Dividends from net realized gains -- -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.33) (0.51) (1.41) (0.66) (0.51) (0.24)
------ ------ ------ ------ ------ ------
Change in net asset value 1.43 (1.15) (4.13) 3.22 2.42 0.68
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.47 $11.04 $12.19 $16.32 $13.10 $10.68
====== ====== ====== ====== ====== ======
Total return(1) 16.42%(3) (5.38)% (18.01)% 30.44% 28.25% 9.21%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $12,318 $12,241 $18,237 $23,091 $8,259 $2,239
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(6) 2.05%(2) 2.05% 2.06% 2.05% 2.05% 2.05%(2)
Net investment income 4.94%(2) 3.54% 3.07% 2.55% 3.95% 5.03%(2)
Portfolio turnover 5%(3) 22% 11% 54% 24% 9%(3)
<FN>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.80%,
1.75%, 1.52%, 1.54%, 1.88% and 2.95% for the periods ended May 31, 2000, and
November 30, 1999, 1998, 1997, 1996 and 1995, respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.55%,
2.50%, 2.27%, 2.29%, 2.63% and 3.70% for the periods ended May 31, 2000, and
November 30, 1999, 1998, 1997, 1996 and 1995, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
16
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
INVESTMENTS AT MAY 31, 2000
(UNAUDITED)
PAR
MOODY'S VALUE
RATING (000) VALUE
------- ------ ------------
CORPORATE BONDS--0.4%
TELECOMMUNICATIONS (LONG DISTANCE)--0.4%
Metromedia International Group, Inc. ...
10.50%, 9/30/07 ........................ NR $ 795 $ 373,755
- -----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $813,493) 373,755
- -----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--97.7%
ALGERIA--4.1%
Republic of Algeria 7.1875%, 9/4/09 .... NR 2,000 1,635,000
Republic of Algeria 7.1875%, 3/4/10 .... NR 3,000 2,302,500
------------
3,937,500
------------
ARGENTINA--13.9%
Province of Buenos Aires 144A
13.25%, 3/29/10(c) ..................... B 3,000 2,730,000
Republic of Argentina Bocon Pro1 M1, PIK
interest capitalization, 2.95%, 4/1/07(b)(e) BBB-(d) 7,397 5,021,556
Republic of Argentina RegS
11.75%, 2/12/07(e) ..................... B 3,550 2,893,453
Republic of Argentina RegS
8.75%, 7/10/02(e) ...................... B 3,000 2,612,433
------------
13,257,442
------------
BRAZIL--18.7%
Brazil MYDFA Trust Certificates RegS
7.1875%, 9/15/07(b)(h) ................. NR 10,016 8,213,226
Republic of Brazil 12.75%, 1/15/20 ..... B 650 598,812
Republic of Brazil 6%, 9/15/13 ......... B 8,100 5,062,492
Republic of Brazil FLRB-L Bearer
7.375%, 4/15/09(b)(h) .................. B 5,200 3,874,000
------------
17,748,530
------------
BULGARIA--2.4%
Republic of Bulgaria FLIRB Bearer Series A
2.75%, 7/28/12(b) ...................... B 1,607 1,088,693
PAR
MOODY'S VALUE
RATING (000) VALUE
------- ------ ------------
BULGARIA--2.4%--CONTINUED
Republic of Bulgaria FLIRB RegA
2.75%, 7/28/12(b) ...................... B $ 1,250 $ 846,875
Republic of Bulgaria FLIRB Series B
3.25%, 7/28/12(b) ...................... B 508 344,219
------------
2,279,787
------------
COLOMBIA--1.0%
Republic of Colombia Global Bond
8.375%, 2/15/27 ........................ Ba 1,500 922,500
ECUADOR--3.6%
Ecuador Bearer PDI, PIK interest
capitalization, 7.1875%, 2/27/15(b) .... B 4,728 992,813
Ecuador Registered PDI Euro, PIK interest
capitalization, 7.1875%, 2/27/15 ....... B(d) 4,728 992,813
Republic of Ecuador 0%, 2/28/25(b) ..... Caa 2,000 656,250
Republic of Ecuador Series Discount
0%, 2/28/25 ............................ Caa 2,000 761,250
------------
3,403,126
------------
MEXICO--10.0%
Nacional Financiera SNC
22%, 5/20/02(g)(h) ..................... NR 20,000 2,236,122
United Mexican States Global Bond
11.375%, 9/15/16 ....................... Baa 2,000 2,159,000
United Mexican States Global Bond
11.50%, 5/15/26 ........................ Ba 3,500 3,930,500
United Mexican States NMB
7.33%, 3/25/05(b) ...................... Ba 1,250 1,184,375
------------
9,509,997
------------
NIGERIA--0.6%
Nigeria Promissory Notes Series RC
5.092%, 1/5/10 ......................... NR 1,224 559,903
PANAMA--1.2%
Republic of Panama 8.875%, 9/30/27 ..... Ba 1,500 1,164,375
PERU--2.1%
Peru FLIRB 3.75%, 3/7/17(b) ............ Ba 2,400 1,371,000
Republic of Peru PDI 4.50%, 3/7/17 ..... Ba 1,000 630,000
------------
2,001,000
------------
See Notes to Financial Statements
17
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
PAR
MOODY'S VALUE
RATING (000) VALUE
------- ------ ------------
PHILIPPINES--1.3%
Republic of Philippines 9.875%, 1/15/19 Ba $ 1,500 $ 1,203,750
RUSSIA--28.1%
City of St. Petersburg 9.5%, 6/18/02 ... C 1,000 800,000
Oblast Nizhniy Novgorod RegS
8.75%, 4/3/05 .......................... Caa 14,190 7,378,694
Russia Federation 144A 12.75%, 6/24/28 . B 4,500 3,476,250
Russia Principal Loans PIK interest
capitalization, 0%, 12/15/20 ........... NR 17,500 4,725,000
Russia Treasury Bill OFZ 14%, 9/12/01(f) NR 42,635 1,257,056
Russian Federal Loan Bond OFZ
Series 25030 0%, 12/15/01(f) ........... NR 4,679 58,187
Russian Federal Loan Bond OFZ
Series 27001 25%, 2/6/02(b)(f) ......... NR 1,365 38,932
Russian Federal Loan Bond OFZ
Series 27002 25%, 5/22/02(b)(f) ........ NR 1,365 37,555
Russian Federal Loan Bond OFZ
Series 27003 25%, 6/5/02(b)(f) ......... NR 1,365 37,386
Russian Federal Loan Bond OFZ
Series 27005 25%, 10/9/02(b)(f) ........ NR 16,737 424,756
Russian Federal Loan Bond OFZ
Series 27006 25%, 1/22/03(b)(f) ........ NR 1,365 33,450
Russian Federal Loan Bond OFZ
Series 27007 25%, 2/5/03(b)(f) ......... NR 1,365 33,512
Russian Federal Loan Bond OFZ
Series 27008 25%, 5/21/03(b)(f) ........ NR 1,365 32,411
Russian Federal Loan Bond OFZ
Series 27009 25%, 6/4/03(b)(f) ......... NR 1,365 32,348
Russian Federal Loan Bond OFZ
Series 7004 25%, 9/18/02(b)(f) ......... NR 67,131 1,776,148
Russian Federation 2.25%, 03/31/30 ..... NR 20,000 6,550,000
------------
26,691,685
------------
UKRAINE--5.8%
Ukraine Government 11%, 3/15/07 ........ Caa 9,000 5,512,500
VENEZUELA--4.9%
Republic of Venezuela DCB Series DL
7%, 12/18/07(b) ........................ B 1,143 906,425
Republic of Venezuela FLIRB Series B
7.438%, 3/31/07(b) ..................... B 1,667 1,296,862
PAR
MOODY'S VALUE
RATING (000) VALUE
------- ------ ------------
VENEZUELA--CONTINUED
Republic of Venezuela FLRIB Series A
7.438%, 3/31/07(b) ..................... $ 667 $ 518,745
Republic of Venezuela NMB-A
7.125%, 12/18/05(b) .................... B 2,471 1,964,167
------------
4,686,199
------------
- -----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $97,951,334) 92,878,294
- -----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--6.3%
ARGENTINA--1.0%
Alto Palermo 144A 14.875%, 4/7/05 ...... NR 1,000 965,068
COLUMBIA--0.3%
Termuemcali Funding Corp. ..............
10.125%, 12/15/14 ...................... CCC(d) 499 264,364
MEXICO--4.2%
Vicap SA 11.375%, 5/15/07 .............. Ba 3,100 2,728,000
Bepensa S.A. RegS 9.75%, 9/30/04 ....... BB-(d) 1,500 1,327,500
------------
4,055,500
------------
RUSSIA--0.8%
Rossiyskiy Kredit Bank Reg S
10.25%, 9/29/00 ........................ NR 5,000 725,000
- -----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $7,851,703) 6,009,932
- -----------------------------------------------------------------------------
SHARES
-------
COMMON STOCKS--0.1%
UNITED STATES--0.1%
Telscape International, Inc.
(Communications Equipment) ............. 12,500 96,875
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $212,674) 96,875
- -----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--2.6%
RUSSIA--2.4%
Unified Energy Systems ADR
(Electric Companies) ................... 80,000 1,105,000
Lukoil Holding ADR
(Oil (Domestic Integrated)) ............ 25,000 1,381,250
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $2,336,250) 2,486,250
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--107.1%
(IDENTIFIED COST $109,165,454) 101,845,106
- -----------------------------------------------------------------------------
See Notes to Financial Statements
18
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
NUMBER
OF
CONTRACTS VALUE
--------- ------------
OPTIONS--0.0%
United Mexican States Global Bond
Call Option 6/12/00 $125(b)
(Par subject to call $8,500,000) .......... 8.5 $ 8,500
- ------------------------------------------------------------------------------
TOTAL OPTIONS
(IDENTIFIED COST $407,150) 8,500
- ------------------------------------------------------------------------------
STANDARD PAR
& POOR'S VALUE
RATING (000)
-------- -------
SHORT-TERM OBLIGATIONS--1.6%
COMMERCIAL PAPER--1.6%
Koch Industries, Inc. 6.77%, 6/1/00 ......... A-1+ $ 1,490 1,490,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $1,490,000) 1,490,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS--108.7%
(IDENTIFIED COST $111,062,604) 103,343,606(a)
Cash and receivables, less liabilities--(8.7%) (8,235,608)
------------
NET ASSETS--100.0% $ 95,107,998
============
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $3,141,743 and gross
depreciation of $10,961,570 for federal income tax purposes. At May 31,
2000, the aggregate cost of securities for federal income tax purposes was
$111,163,433.
(b) Variable or step coupon security; interest rate shown 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 May 31, 2000,
these securities amounted to a value of $7,171,318 or 7.5% of net assets.
(d) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(e) Par value represents Argentine Pesos.
(f) Par value represents Russian Rubles.
(g) Par value represents Mexican Pesos.
(h) All or a portion segregated as collateral.
See Notes to Financial Statements
19
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $111,062,604) $103,343,606
Cash 1,040,782
Foreign currency at value
(Identified cost $519) 519
Receivables
Investment securities sold 18,460,938
Interest and dividends 2,132,137
Fund shares sold 413,869
Prepaid expense 1,090
------------
Total assets 125,392,941
------------
LIABILITIES
Payables
Investment securities purchased 29,961,299
Fund share repurchased 137,659
Investment advisory fee 61,711
Distribution fee 58,558
Transfer agent fee 34,510
Financial agent fee 12,845
Trustees' fee 12,535
Accrued expenses 5,826
------------
Total liabilities 30,284,943
------------
NET ASSETS $ 95,107,998
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $138,317,753
Undistributed net investment income 3,473,586
Accumulated net realized loss (38,965,453)
Net unrealized depreciation (7,717,888)
------------
NET ASSETS $ 95,107,998
============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $35,992,217) 4,743,211
Net asset value per share $7.59
Offering price per share $7.59/(1-4.75%) $7.97
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $56,842,965) 7,601,724
Net asset value and offering price per share $7.48
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $2,272,816) 302,458
Net asset value and offering price per share $7.51
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME
Interest $10,477,770
Dividends 27,852
Foreign taxes withheld (2,081)
-----------
Total investment income 10,503,541
-----------
EXPENSES
Investment advisory fee 431,646
Distribution fee, Class A 62,716
Distribution fee, Class B 311,945
Distribution fee, Class C 12,720
Financial agent fee 68,727
Transfer agent 86,584
Custodian 33,031
Printing 19,023
Registration 15,045
Professional 13,572
Trustees 12,250
Miscellaneous 5,648
-----------
Total expenses 1,072,907
-----------
NET INVESTMENT INCOME 9,430,634
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 9,600,224
Net realized loss on foreign currency
transactions (1,524,649)
Net change in unrealized appreciation (depreciation) on
investments (9,434,673)
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (52,252)
-----------
NET LOSS ON INVESTMENTS (1,411,350)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,019,284
============
See Notes to Financial Statements
20
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
5/31/00 YEAR ENDED
(UNAUDITED) 11/30/99
-------------- ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 9,430,634 $ 16,331,294
Net realized gain (loss) 8,075,575 1,213,234
Net change in unrealized appreciation (depreciation) (9,486,925) 4,772,822
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 8,019,284 22,317,350
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (3,123,552) (7,416,057)
Net investment income, Class B (3,771,672) (7,042,619)
Net investment income, Class C (150,133) (347,153)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (7,045,357) (14,805,829)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (830,968 and 3,556,835 shares, respectively) 6,939,556 25,142,286
Net asset value of shares issued from reinvestment of distributions
(135,730 and 351,670 shares, respectively) 1,107,319 2,480,258
Cost of shares repurchased (3,353,085 and 2,574,617 shares, respectively) (28,452,260) (18,206,934)
------------ ------------
Total (20,405,385) 9,415,610
------------ ------------
CLASS B
Proceeds from sales of shares (1,065,876 and 3,425,208 shares, respectively) 8,570,577 24,265,446
Net asset value of shares issued from reinvestment of distributions
(175,536 and 446,690 shares, respectively) 1,412,489 3,123,762
Cost of shares repurchased (1,333,776 and 1,401,581 shares, respectively) (11,021,221) (9,790,280)
------------ ------------
Total (1,038,155) 17,598,928
------------ ------------
CLASS C
Proceeds from sales of shares (110,720 and 462,019 shares, respectively) 915,010 3,316,816
Net asset value of shares issued from reinvestment of distributions
(5,298 and 17,681 shares, respectively) 42,811 126,396
Cost of shares repurchased (208,014 and 253,300 shares, respectively) (1,692,435) (1,856,218)
------------ ------------
Total (734,614) 1,586,994
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (22,178,154) 28,601,532
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (21,204,227) 36,113,053
NET ASSETS
Beginning of period 116,312,225 80,199,172
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) OF
$3,473,586 AND $1,088,309, RESPECTIVELY) $ 95,107,998 $116,312,225
============ ============
</TABLE>
See Notes to Financial Statements
21
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED NOVEMBER 30 INCEPTION
5/31/00 ----------------------------------------------- 9/5/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.69 $ 7.20 $ 12.84 $ 14.80 $ 10.18 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.67(4) 1.23 1.32 1.38(4) 1.26 0.25(4)
Net realized and unrealized gain (loss) (0.26) 0.40 (4.22) 0.17 4.56 0.18
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.41 1.63 (2.90) 1.55 5.82 0.43
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from net investment income (0.51) (1.14) (1.00) (1.28) (1.20) --
Dividends from net realized gains -- -- (0.23) (2.23) -- (0.25)
Dividends in excess of net investment income -- -- (1.16) -- -- --
Return of capital -- -- (0.35) -- -- --
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.51) (1.14) (2.74) (3.51) (1.20) (0.25)
------- ------- ------- ------- ------- -------
Change in net asset value (0.10) 0.49 (5.64) (1.96) 4.62 0.18
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 7.59 $ 7.69 $ 7.20 $ 12.84 $ 14.80 $ 10.18
======= ======= ======= ======= ======= =======
Total return(1) 4.91%(3) 25.63% (27.20)% 11.91% 60.18% 4.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $35,992 $54,849 $41,725 $67,875 $29,661 $12,149
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.44%(2) 1.56% 1.43% 1.40% 1.50%(5) 1.50%(2)(5)
Net investment income 16.40%(2) 17.96% 13.74% 9.90% 10.41% 10.48%(2)
Portfolio turnover 177%(3) 326% 405% 614% 378% 38%(3)
</TABLE>
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED NOVEMBER 30 INCEPTION
5/31/00 ---------------------------------------------- 9/5/95 TO
(UNAUDITED) 1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.60 $ 7.13 $ 12.77 $ 14.78 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.66(4) 1.17 1.23 1.26(4) 1.19 0.22(4)
Net realized and unrealized gain (loss) (0.29) 0.40 (4.18) 0.18 4.53 0.20
------- ------- ------- ------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.37 1.57 (2.95) 1.44 5.72 0.42
------- ------- ------- ------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.49) (1.10) (0.97) (1.22) (1.12) 0.24)
Dividends from net realized gains -- -- (0.23) (2.23) -- --
Dividends in excess of net investment income -- -- (1.16) -- -- --
Return of capital -- -- (0.33) -- -- --
------- ------- ------- ------- ------ ------
TOTAL DISTRIBUTIONS (0.49) (1.10) (2.69) (3.45) (1.12) 0.24)
------- ------- ------- ------- ------ ------
Change in net asset value (0.12) 0.47 (5.64) (2.01) 4.60 0.18
------- ------- ------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.48 $ 7.60 $ 7.13 $ 12.77 $14.78 $10.18
======= ======= ======= ======= ====== ======
Total return(1) 4.58%(3) 24.52% (27.86)% 11.07% 58.94% 4.22%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $56,843 $58,453 $37,270 $38,673 $9,713 $ 596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.19%(2) 2.31% 2.20% 2.15% 2.25%(6) 2.25%(2)(6)
Net investment income 16.38%(2) 17.04% 12.98% 9.14% 9.79% 10.29%(2)
Portfolio turnover 177%(3) 326% 405% 614% 378% 38%(3)
<FN>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.02% and
2.89% for the periods ended November 30, 1996 and 1995, respectively.
(6) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.77% and
3.64% for the periods ended November 30, 1996 and 1995, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
22
<PAGE>
PHOENIX-GOODWIN EMERGING MARKETS BOND FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C
----------------------------------------
SIX MONTHS FROM
ENDED YEAR INCEPTION
5/31/00 ENDED 3/26/98 TO
(UNAUDITED) 11/30/99 11/30/98
<S> <C> <C> <C>
Net asset value, beginning of period $ 7.63 $ 7.17 $12.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.64(4) 1.17 0.85(4)
Net realized and unrealized gain (loss) (0.27) 0.39 (5.10)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.37 1.56 (4.25)
------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.49) (1.10) (0.66)
Dividends from net realized gains -- -- --
Dividends in excess of net investment income -- -- --
Return of capital -- -- (0.17)
------ ------ ------
TOTAL DISTRIBUTIONS (0.49) (1.10) (0.83)
------ ------ ------
Change in net asset value (0.12) 0.46 (5.08)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.51 $ 7.63 $ 7.17
====== ====== ======
Total return(1) 4.69%(3) 24.40% (35.33)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,273 $3,010 $1,205
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.19%(2) 2.31% 2.29%(2)
Net investment income 16.24%(2) 16.47% 15.59%(2)
Portfolio turnover 177%(3) 326% 405%(3)
<FN>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
</FN>
</TABLE>
See Notes to Financial Statements
23
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
INVESTMENTS AT MAY 31, 2000
(UNAUDITED)
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
MUNICIPAL BONDS--96.1%
ALABAMA--2.0%
Jefferson County Alabama Sewer Revenue
Bonds Series A 5%, 2/1/33 .............. AAA $2,000 $ 1,667,500
ALASKA--1.4%
Valdez Marine Terminal Revenue
7%, 12/1/25(c) ......................... AA+ 1,125 1,174,219
ARIZONA--1.2%
Pima County Sewer Revenue 6.75%, 7/1/15
(FGIC Insured) ......................... AAA 540 554,440
Pima County Sewer Revenue 6.75%, 7/1/15,
Prerefunded 7/1/01 @$101 (FGIC Insured) AAA 460 474,347
-----------
1,028,787
-----------
ARKANSAS--1.2%
Drew County Public Facilities Board
Series A-2 7.90%, 8/1/11
(FNMA Collateralized) .................. Aaa(b) 196 202,931
Jacksonville Residential Housing Facilities
Board Series A-2 7.90%, 1/1/11
(FNMA Collateralized) .................. Aaa(b) 323 332,076
Lonoke County Residential Housing Facilities
Board Series A-2 7.90%, 4/1/11
(FNMA Collateralized) .................. Aaa(b) 315 331,763
Stuttgart Public Facilities Board Series A-2
7.90%, 9/1/11 (FNMA Collateralized) .... Aaa(b) 141 143,805
-----------
1,010,575
-----------
CALIFORNIA--8.4%
Pittsburg Redevelopment Agency Series A
4.625%, 8/1/21 (AMBAC Insured) ......... AAA 1,650 1,363,312
Riverside County Series B 8.625%, 5/1/16
(GNMA Collateralized) .................. AAA 4,300 5,638,375
-----------
7,001,687
-----------
CONNECTICUT--4.4%
Mashantucket Western Pequot Tribe Special
Revenue Series A 144A 6.50%, 9/1/05(d) . AAA 845 899,925
Mashantucket Western Pequot Tribe Special
Revenue Series A 144A 6.50%, 9/1/06(d) . AAA 495 530,888
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
CONNECTICUT--CONTINUED
Mashantucket Western Pequot Tribe Special
Revenue Series B 144A 5.60%, 9/1/09(d) . Baa(b) $1,000 $ 965,000
Mashantucket Western Pequot Tribe Special
Revenue Series A 144A 5.50%, 9/1/28(d) . Baa(b) 1,500 1,239,375
-----------
3,635,188
-----------
GEORGIA--9.8%
Atlanta Water and Wastewater Revenue
Series A 5%, 11/1/29 (FGIC Insured) .... AAA 2,000 1,702,500
Atlanta Water and Wastewater Revenue
Series A 5%, 11/1/38 (FGIC Insured) .... AAA 1,000 828,750
Cartersville Development Authority Revenue
5.625%, 5/1/09 ......................... A+ 2,000 1,997,500
Georgia Municipal Electric Authority Power
Revenue Series Z 5.50%, 1/1/20
(FGIC Insured) ......................... AAA 2,000 1,912,500
Georgia State General Obligation Series A
7.45%, 1/1/09 .......................... AAA 1,500 1,717,500
-----------
8,158,750
-----------
ILLINOIS--5.1%
Chicago Board of Education Series A
6%, 1/1/20 (MBIA Insured) .............. AAA 500 506,250
Chicago O'Hare International Airport Special
Facility Revenue 8.85%, 5/1/18 ......... BB+ 815 845,880
Cook County Series A 5%, 11/15/28
(FGIC Insured) ......................... AAA 2,000 1,660,000
Illinois Health Facilities Authority Revenue
Series C 7%, 4/1/08 (FSA Insured) ...... AAA 1,100 1,199,000
Metropolitan Pier & Exposition Authority
Revenue Unrefunded 6.50%, 6/15/07
(FGIC Insured) ......................... AAA 30 31,650
-----------
4,242,780
-----------
INDIANA--4.3%
Indianapolis Public Local Improvement
Revenue Series C 0%, 1/1/03 ............ A(b) 2,500 2,178,125
Indianapolis Public Local Improvement
Revenue Series A 0%, 2/1/05 ............ Aa(b) 1,765 1,370,081
-----------
3,548,206
-----------
See Notes to Financial Statements
24
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
KENTUCKY--3.5%
Kentucky State Turnpike Authority Economic
Development Revenue 0%, 1/1/10
(FGIC Insured) ......................... AAA $3,300 $ 1,926,375
Perry County Solid Waste Disposal Revenue
7%, 6/1/24 ............................. NR 1,000 1,021,250
-----------
2,947,625
-----------
LOUISIANA--1.7%
Louisiana Environmental Facilities Community
Development Authority Revenue
5.25%, 12/1/18 (AMBAC Insured) ......... AAA 1,500 1,378,125
St. Tammany Public Transportation Financing
Authority Revenue Series A 7%, 6/1/02
(FNMA Collateralized) .................. Aaa(b) 30 30,565
-----------
1,408,690
-----------
MARYLAND--0.7%
Baltimore General Obligation 7%, 10/15/09
(MBIA Insured) ......................... AAA 500 561,250
MASSACHUSETTS--2.2%
Massachusetts Bay Transportation Authority
Revenue Series B 6.20%, 3/1/16 ......... AA- 1,000 1,047,500
Massachusetts State Industrial Financing
Agency Revenue 0%, 8/1/05 .............. A+ 1,100 829,125
-----------
1,876,625
-----------
MICHIGAN--3.0%
St. Johns Public Schools 5.10%, 5/1/25
(FGIC Insured) ......................... AAA 1,000 878,750
Williamston Community School General
Obligation 5.50%, 5/1/25 (MBIA Insured) AAA 1,725 1,630,125
-----------
2,508,875
-----------
MISSISSIPPI--1.8%
Lowndes County Solid Waste Disposal &
Pollution Control Revenue Project A
6.80%, 4/1/22 .......................... A 1,450 1,509,813
NEVADA--2.0%
Clark County School District General Obligation
Series B 0%, 6/1/03 (MBIA Insured) ..... AAA 2,000 1,707,500
NEW JERSEY--1.9%
Camden County Municipal Utilities Authority
Sewer Revenue Series B 0%, 9/1/11
(FGIC Insured) ......................... AAA 3,000 1,597,500
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
NEW YORK--5.3%
New York State Dormitory Authority Revenue
Series U 6.375%, 7/1/08, Prerefunded
7/1/02 @$102 ........................... BBB+ $ 575 $ 600,875
Niagara Falls Bridge Commission Toll
Revenue Series B 5.25%, 10/1/15
(FGIC Insured) ......................... AAA 4,000 3,840,000
-----------
4,440,875
-----------
NORTH CAROLINA--1.7%
North Carolina Municipal Power Agency
Revenue 6%, 1/1/09 (AMBAC Insured) ..... AAA 1,385 1,423,088
PENNSYLVANIA--8.4%
Delaware Valley Regional Finance Authority
Revenue Series B 5.70%, 7/1/27
(AMBAC Insured) ........................ AAA 2,000 1,902,500
New Castle Area Hospital Authority Revenue
Series A 6.50%, 11/15/09 ............... Baa(b) 1,000 901,250
Pennsylvania State Finance Authority Revenue
6.60%, 11/1/09 ......................... A 4,000 4,210,000
-----------
7,013,750
-----------
SOUTH CAROLINA--2.6%
Spartanburg Sanitation Sewer Revenue
Series B 5%, 3/1/24 .................... AAA 2,520 2,145,150
TENNESSEE--1.9%
Metropolitan Government Nashville &
Davidson County Health & Educational
Facilities Board Revenue 6%, 12/1/16
(AMBAC Insured) ........................ AAA 1,500 1,545,000
TEXAS--6.2%
Colorado River Municipal District Water
Revenue 8.25%, 1/1/15, Prerefunded
1/1/01 @$100 ........................... NR 540 550,514
Houston Water and Sewer System Revenue
Series A 5%, 12/1/28 ................... AAA 2,000 1,677,500
Hurst Euless Bedford Independent School
District General Obligation 4.75%, 8/15/28 AAA 2,000 1,595,000
San Antonio Electric & Gas Revenue
5%, 2/1/12 ............................. AA 15 14,325
San Antonio Electric & Gas Revenue
5%, 2/1/12 ............................. AA 20 18,800
Texas State Public Finance Authority Building
Revenue 6.25%, 8/1/09 (MBIA Insured) ... AAA 1,250 1,318,750
-----------
5,174,889
-----------
See Notes to Financial Statements
25
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
VIRGINIA--6.9%
Pittsylvania County Industrial Development
Authority Revenue Series A 7.30%, 1/1/04 NR $ 805 $ 819,088
Pittsylvania County Industrial Development
Authority Revenue Series A 7.45%, 1/1/09 NR 3,000 3,090,000
Upper Occoquan Regional Sewer Authority
Revenue Series A 5.15%, 7/1/20
(MBIA Insured) ......................... AAA 2,000 1,822,500
-----------
5,731,588
-----------
WEST VIRGINIA--3.6%
Upshur County Solid Waste Disposal Revenue
7%, 7/15/25 ............................ NR 2,000 2,042,500
West Virginia State Housing Development
Fund Revenue 6.625%, 7/1/20
(FHA Insured) .......................... AA 1,000 999,930
-----------
3,042,430
-----------
WISCONSIN--3.0%
Wisconsin State Clean Water Revenue
Series 1 6.875%, 6/1/11 ................ AA+ 750 838,125
Wisconsin State Health and Education
Facilities Authority Revenue 5%, 8/15/18 A- 2,000 1,707,500
-----------
2,545,625
-----------
OTHER TERRITORIES--1.9%
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue
Series V 6.625%, 7/1/12 ................ A 1,500 1,561,875
- ----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $79,567,943) 80,209,840
- ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.1%
(IDENTIFIED COST $79,567,943) 80,209,840
- ----------------------------------------------------------------------------
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -----------
SHORT-TERM OBLIGATIONS--2.8%
COMMERCIAL PAPER--2.8%
Koch Industries, Inc. 6.77%, 6/1/00 .... A-1+ $2,355 $ 2,355,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $2,355,000) 2,355,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $81,922,943) 82,564,840(a)
Cash and receivables, less liabilities--1.1% 907,499
-----------
NET ASSETS--100.0% $83,472,339
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,836,281 and gross
depreciation of $2,102,290 for federal income tax purposes. At May 31, 2000,
the aggregate cost of securities for federal income tax purposes was
$81,830,849. .
(b) As rated by Moody's, Fitch or Duff & Phelps.
(c) Variable or step coupon security; interest rate reflects the rate currently
in effect.
(d) 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 buyers. At May 31, 2000, these
securities amounted to a value of $3,635,188 or 4.4% of net assets.
At May 31, 2000, 39.2% of the securities in the fund 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, 18.5%.
See Notes to Financial Statements
26
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $81,922,943) $82,564,840
Cash 756
Receivables
Interest 1,180,695
Fund shares sold 2,254
Prepaid expense 1,528
-----------
Total assets 83,750,073
-----------
LIABILITIES
Payables
Dividend distributions 73,302
Fund shares repurchased 64,274
Investment advisory fee 31,734
Transfer agent fee 22,080
Distribution fee 20,671
Trustees' fee 12,535
Financial agent fee 8,866
Accrued expenses 44,272
-----------
Total liabilities 277,734
-----------
NET ASSETS $83,472,339
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $85,954,634
Undistributed net investment income 60,348
Accumulated net realized loss (3,184,540)
Net unrealized appreciation 641,897
-----------
NET ASSETS $83,472,339
===========
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $78,618,704) 7,796,565
Net asset value per share $10.08
Offering price per share $10.08/(1-4.75%) $10.58
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $4,853,635) 479,034
Net asset value and offering price per share $10.13
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME
Interest $ 2,689,424
-----------
Total investment income 2,689,424
-----------
EXPENSES
Investment advisory fee 198,686
Distribution fee, Class A 103,818
Distribution fee, Class B 26,253
Financial agent fee 57,512
Transfer agent 55,193
Printing 37,231
Registration 12,327
Professional 12,256
Trustees 12,250
Custodian 6,126
Miscellaneous 16,216
-----------
Total expenses 537,868
-----------
NET INVESTMENT INCOME 2,151,556
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 170,456
Net change in unrealized appreciation (depreciation)
on investments (2,128,985)
-----------
NET LOSS ON INVESTMENTS (1,958,529)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 193,027
===========
See Notes to Financial Statements
27
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
5/31/00 YEAR ENDED
(UNAUDITED) 11/30/99
------------ -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 2,151,556 $ 4,420,473
Net realized gain (loss) 170,456 (2,973,183)
Net change in unrealized appreciation (depreciation) (2,128,985) (5,382,317)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 193,027 (3,935,027)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (1,918,464) (4,019,480)
Net investment income, Class B (101,800) (222,784)
In excess of net investment income, Class A -- (713,626)
In excess of net investment income, Class B -- (39,554)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (2,020,264) (4,995,444)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (886,444 and 1,486,070 shares, respectively) 8,989,400 15,836,073
Net asset value of shares issued from reinvestment of distributions
(103,685 and 241,813 shares, respectively) 1,052,270 2,604,501
Cost of shares repurchased (1,817,481 and 2,685,504 shares, respectively) (18,476,363) (28,673,824)
------------ ------------
Total (8,434,693) (10,233,250)
------------ ------------
CLASS B
Proceeds from sales of shares (74,922 and 131,152 shares, respectively) 769,596 1,434,341
Net asset value of shares issued from reinvestment of distributions
(3,940 and 9,781 shares, respectively) 40,182 105,939
Cost of shares repurchased (146,095 and 216,909 shares, respectively) (1,495,866) (2,327,791)
------------ ------------
Total (686,088) (787,511)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (9,120,781) (11,020,761)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (10,948,018) (19,951,232)
NET ASSETS
Beginning of period 94,420,357 114,371,589
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
AND DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF $60,348 AND
($70,944), RESPECTIVELY] $ 83,472,339 $ 94,420,357
============ ============
</TABLE>
See Notes to Financial Statements
28
<PAGE>
PHOENIX-GOODWIN TAX-EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30
5/31/00 -------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.29 $11.21 $11.17 $11.28 $11.40 $10.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.25 0.52 0.57 0.59 0.60 0.61
Net realized and unrealized gain (loss) (0.23) (0.92) 0.20 0.05 (0.12) 1.34
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.02 (0.40) 0.77 0.64 0.48 1.95
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.23) (0.44) (0.53) (0.59) (0.60) (0.61)
Dividends in excess of net investment income -- (0.08) (0.11) -- -- --
Dividends from net realized gains -- -- (0.09) (0.16) -- (0.03)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.23) (0.52) (0.73) (0.75) (0.60) (0.64)
------ ------ ------ ------ ------ ------
Change in net asset value (0.21) (0.92) 0.04 (0.11) (0.12) 1.31
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.08 $10.29 $11.21 $11.17 $11.28 $11.40
====== ====== ====== ====== ====== ======
Total return(1) 0.24%(3) (3.66)% 5.75% 6.04% 4.30% 19.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $78,619 $88,770 $107,371 $122,763 $136,558 $147,821
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.17%(2) 1.01% 0.97% 0.96% 0.94% 0.97%
Net investment income (loss) 4.92%(2) 4.25% 4.77% 5.36% 5.42% 5.65%
Portfolio turnover 7%(3) 18% 14% 15% 27% 25%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30
5/31/00 -------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.34 $11.25 $11.22 $11.32 $11.44 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.21 0.45 0.48 0.50 0.52 0.53
Net realized and unrealized gain (loss) (0.22) (0.93) 0.19 0.06 (0.12) 1.35
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.01) (0.48) 0.67 0.56 0.40 1.88
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.20) (0.37) (0.45) (0.50) (0.52) (0.53)
Dividends in excess of net investment income -- (0.06) (0.10) -- -- --
Dividends from net realized gains -- -- (0.09) (0.16) -- (0.03)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.20) (0.43) (0.64) (0.66) (0.52) (0.56)
------ ------ ------ ------ ------ ------
Change in net asset value (0.21) (0.91) 0.03 (0.10) (0.12) 1.32
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.13 $10.34 $11.25 $11.22 $11.32 $11.44
====== ====== ====== ====== ====== ======
Total return(1) (0.12)%(3) (4.35)% 4.97% 5.13% 3.60% 19.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,854 $5,651 $7,001 $5,797 $4,762 $3,142
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.93%(2) 1.76% 1.69% 1.71% 1.69% 1.72%
Net investment income (loss) 4.15%(2) 3.51% 3.98% 4.60% 4.68% 4.90%
Portfolio turnover 7%(3) 18% 14% 15% 27% 25%
<FN>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
</FN>
</TABLE>
See Notes to Financial Statements
29
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
INVESTMENTS AT MAY 31, 2000
(UNAUDITED)
SHARES VALUE
------ ----------
COMMON STOCKS--87.4%
ALUMINUM--2.9%
Alcoa, Inc. ........................................ 2,770 $ 161,872
BEVERAGES (ALCOHOLIC)--2.9%
Anheuser-Busch Cos., Inc. .......................... 2,110 163,525
BROADCASTING (TELEVISION, RADIO & CABLE)--3.0%
AMFM, Inc.(b) ...................................... 2,440 165,310
COMMUNICATIONS EQUIPMENT--3.8%
General Motors Corp. Class H(b) .................... 2,170 213,610
COMPUTERS (HARDWARE)--6.3%
International Business Machines Corp. .............. 1,330 142,726
Sun Microsystems, Inc.(b) .......................... 2,780 213,018
----------
355,744
----------
COMPUTERS (NETWORKING)--4.0%
Cisco Systems, Inc.(b) ............................. 3,950 225,150
ELECTRICAL EQUIPMENT--3.9%
General Electric Co. ............................... 4,200 221,025
ELECTRONICS (SEMICONDUCTORS)--8.0%
Intel Corp. ........................................ 1,890 235,541
Texas Instruments, Inc. ............................ 2,920 210,970
----------
446,511
----------
ENTERTAINMENT--2.6%
Walt Disney Co. (The) .............................. 3,510 148,078
EQUIPMENT (SEMICONDUCTORS)--3.3%
Applied Materials, Inc.(b) ......................... 2,240 187,040
FINANCIAL (DIVERSIFIED)--4.1%
Citigroup, Inc. .................................... 3,730 231,960
HEALTH CARE (DIVERSIFIED)--3.0%
Johnson & Johnson .................................. 1,880 168,260
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)--4.9%
Lilly (Eli) & Co. .................................. 2,090 159,101
Pfizer, Inc. ....................................... 2,640 117,645
----------
276,746
----------
SHARES VALUE
------ ----------
HEALTH CARE (HOSPITAL MANAGEMENT)--2.3%
Hca-The Healthcare Company ......................... 4,820 $ 130,140
HOUSEHOLD PRODUCTS (NON-DURABLE)--2.6%
Colgate-Palmolive Co. .............................. 2,720 143,140
INSURANCE (MULTI-LINE)--3.5%
American International Group, Inc. ................. 1,750 196,984
INVESTMENT BANKING/BROKERAGE--3.4%
Schwab (Charles) Corp. (The) ....................... 6,705 192,769
OIL & GAS (DRILLING & EQUIPMENT)--4.1%
Halliburton Co. .................................... 4,460 227,460
OIL (INTERNATIONAL INTEGRATED)--3.3%
Exxon Mobil Corp. .................................. 2,190 182,454
PAPER & FOREST PRODUCTS--2.0%
Champion International Corp. ....................... 1,500 109,500
RETAIL (BUILDING SUPPLIES)--2.9%
Lowe's Cos., Inc. .................................. 3,430 159,709
RETAIL (GENERAL MERCHANDISE)--4.3%
Wal-Mart Stores, Inc. .............................. 4,210 242,601
SERVICES (DATA PROCESSING)--2.9%
Automatic Data Processing, Inc. .................... 2,990 164,263
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--3.4%
Nextel Communications, Inc. Class A(b) ............. 2,070 191,734
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $4,805,540) 4,905,585
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--4.3%
COMMUNICATIONS EQUIPMENT--4.3%
Nokia Oyj Sponsored ADR (Finland) .................. 4,660 242,320
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $239,977) 242,320
- ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--91.7%
(IDENTIFIED COST $5,045,517) 5,147,905
- ----------------------------------------------------------------------------
See Notes to Financial Statements
30
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
------- ----- ----------
SHORT-TERM OBLIGATIONS--24.9%
COMMERCIAL PAPER--24.9%
Koch Industries, Inc. .............................
6.77%, 6/1/00 ..................................... A-1+ $ 280 $ 280,000
Lexington Parker Capital Co. LLC
6.80%, 6/1/00 ..................................... A-1+ 280 280,000
Dupont (E.I.) de Nemours & Co. ....................
6.48%, 6/6/00 ..................................... A-1+ 270 269,757
Procter & Gamble Co. 6.48%, 6/14/00 ............... A-1+ 250 249,415
Potomac Electric Power Co. ........................
6.48%, 6/15/00 .................................... A-1+ 155 154,609
Honeywell International, Inc. .....................
6.48%, 6/16/00 .................................... A-1+ 163 162,560
----------
1,396,341
----------
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $1,396,341) 1,396,341
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--116.6%
(IDENTIFIED COST $6,441,858) 6,544,246(a)
Cash and receivables, less liabilities--(16.6%) (932,101)
----------
NET ASSETS--100.0% $5,612,145
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $324,791 and gross
depreciation of $220,755 for federal income tax purposes. At May 31, 2000,
the aggregate cost of securities for federal income tax purposes was
$6,440,210.
(b) Non-income producing.
See Notes to Financial Statements
31
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $6,441,858) $6,544,246
Cash 53,039
Receivables
Fund shares sold 48,386
Receivable from advisor 16,336
Dividends 2,772
----------
Total assets 6,664,779
----------
LIABILITIES
Payables
Investment securities purchased 1,011,658
Transfer agent fee 11,747
Financial agent fee 5,813
Trustees' fee 5,622
Distribution fee 2,102
Accrued expenses 15,692
----------
Total liabilities 1,052,634
----------
NET ASSETS 5,612,145
----------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest 5,676,016
Undistributed net investment income 5,214
Accumulated net realized loss (171,473)
Net unrealized appreciation 102,388
----------
NET ASSETS $5,612,145
==========
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,518,449) 354,263
Net asset value per share $ 9.93
Offering price per share $9.93/(1-5.75%) $10.54
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $538,499) 54,313
Net asset value and offering price per share $ 9.91
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,383,282) 139,543
Net asset value and offering price per share $ 9.91
CLASS X
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $171,915) 17,303
Net asset value and offering price per share $ 9.94
STATEMENT OF OPERATIONS
FROM INCEPTION MARCH 1, 2000
TO MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME
Interest $ 15,000
Dividends 5,799
Foreign taxes withheld (70)
--------
Total investment income 20,729
--------
EXPENSES
Investment advisory fee 7,750
Distribution fee, Class A 1,946
Distribution fee, Class B 712
Distribution fee, Class C 1,521
Financial agent fee 12,061
Transfer agent 20,765
Registration 8,866
Trustees 5,622
Professional 4,813
Printing 2,654
Custodian 2,201
Miscellaneous 1,858
--------
Total expenses 70,769
Less expenses borne by investment advisor (55,254)
--------
Net expenses 15,515
--------
NET INVESTMENT INCOME 5,214
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (171,473)
Net change in unrealized appreciation
on investments 102,388
--------
NET LOSS ON INVESTMENTS (69,085)
--------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(63,871)
========
See Notes to Financial Statements
32
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FROM INCEPTION
3/1/00 TO 5/31/00
(UNAUDITED)
-----------------
<S> <C>
FROM OPERATIONS
Net investment income (loss) $ 5,214
Net realized gain (loss) (171,473)
Net change in unrealized appreciation (depreciation) 102,388
----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (63,871)
----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of 359,338 shares 3,611,478
Cost of 5,075 shares repurchased (54,960)
----------
Total 3,556,518
----------
CLASS B
Proceeds from sale of 54,313 shares 550,280
----------
Total 550,280
----------
CLASS C
Proceeds from sale of 140,256 shares 1,404,636
Cost of 713 shares repurchased (7,223)
----------
Total 1,397,413
----------
CLASS X
Proceeds from sale of 17,303 shares 171,805
----------
Total 171,805
----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 5,676,016
----------
NET INCREASE (DECREASE) IN NET ASSETS 5,612,145
NET ASSETS
Beginning of period --
----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) OF $5,214) $5,612,145
==========
</TABLE>
See Notes to Financial Statements
33
<PAGE>
PHOENIX-SENECA TAX SENSITIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS X
--------------------------------------------------------------
FROM FROM FROM FROM
INCEPTION INCEPTION INCEPTION INCEPTION
3/1/00 TO 3/1/00 TO 3/1/00 TO 3/1/00 TO
5/31/00 5/31/00 5/31/00 5/31/00
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 -- -- 0.02
Net realized and unrealized loss (0.08) (0.09) (0.09) (0.08)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.07) (0.09) (0.09) (0.06)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- --
Dividends from net realized gains -- -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- -- -- --
------ ------ ------ ------
Change in net asset value (0.07) (0.09) (0.09) (0.06)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 9.93 $ 9.91 $ 9.91 $ 9.94
====== ====== ====== ======
Total return(1) (0.70)%(3) (0.90)%(3) (0.90)%(3) (0.60)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,518 $ 538 $1,383 $ 172
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(4) 1.35 %(2) 2.10 %(2) 2.10 %(2) 1.10 %(2)
Net investment income (loss) 0.66 %(2) (0.13)%(2) (0.10)%(2) 0.88 %(2)
Portfolio turnover 10 %(3) 10 %(3) 10 %(3) 10 %(3)
<FN>
(1) Maximum sales charges are not reflected in total return calculation.
(2) Annualized.
(3) Not annualized.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 6.77% for
Class A, 7.27% for Class B, 7.12% for Class C and 6.62% for Class X, for the
period ended May 31, 2000.
</FN>
</TABLE>
See Notes to Financial Statements
34
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
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, five Funds are offered for sale: International Fund, Real Estate
Securities Fund, Emerging Markets Bond Fund, Tax-Exempt Bond Fund and Tax
Sensitive Growth Fund. Each Fund has distinct investment objectives. The
International Fund seeks a high total return consistent with reasonable risk
through investment in an internationally diversified portfolio of equity
securities. The Real Estate Securities Fund seeks capital appreciation and
income with approximately equal emphasis. The Emerging Markets Bond Fund seeks
to achieve high current income with a secondary objective of long-term capital
appreciation. The Tax-Exempt Bond Fund seeks as high a level of current income
exempt from federal income taxation as is consistent with preservation of
capital. The Tax Sensitive Growth Fund seeks as its investment objective
appreciation of capital consistent with maximizing after-tax returns.
The Trust offers both Class A and Class B shares on each Fund. Additionally,
the Trust offers two additional classes of shares, Class C on International
Fund, Emerging Markets Bond Fund and Tax Sensitive Growth Fund and Class X on
Tax Sensitive Growth Fund. Class X shares are sold without a sales charge.
Effective April 3, 2000 Class A shares of International, Real Estate Securities
and Tax Sensitive Growth Fund are sold with a front-end sales charge of up to
5.75%. Prior to that date, the maximum sales charge for those funds was 4.75%.
Class A shares of the Emerging Markets Bond and Tax-Exempt Bond Fund 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. 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 Fund 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 accounting principles
generally accepted in the United States 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 Fund 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 Fund which amortizes both premiums and discounts over the life
of the respective securities using the effective interest method.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund 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 Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund 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
35
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED) (CONTINUED)
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 International Fund, Emerging Markets Bond Fund and Tax Sensitive Growth
Fund may enter 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 Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Fund 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 Fund (other than Real Estate
Securities Fund) 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 Funds 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 Funds 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 Fund as
unrealized gains or losses. When the contract is closed, the Fund 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 Fund 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 Fund (other than Real Estate Securities Fund), may write covered options
or purchase options contracts for the purpose of hedging against changes in the
market value of the underlying securities or foreign currencies.
Each Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked to market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Funds may purchase options which are included in the Fund's Schedule of
Investments and subsequently marked to market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
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 Fund) loans
securities to qualified brokers through an agreement with State Street Bank &
Trust (the Custodian) and Brown Brothers Harriman, custodian for the
International Fund. 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
36
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED) (CONTINUED)
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 May 31, 2000, the Trust had no securities on loan.
K. EXPENSES:
Expenses incurred by the Trust with respect to any two or more Funds are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund 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 Co.
("DPIM"), an indirect wholly-owned subsidiary of PHL, the Adviser for the Real
Estate Securities Fund, are entitled to a fee, based upon the following annual
rates as a percentage of the average daily net assets of each Fund:
1st $1-2 $2 +
$1 Billion Billion Billion
---------- ------- -------
International Fund .............. 0.75% 0.70% 0.65%
Real Estate Securities Fund ..... 0.75% 0.70% 0.65%
Emerging Markets Bond Fund ...... 0.75% 0.70% 0.65%
Tax-Exempt Bond Fund ............ 0.45% 0.40% 0.35%
Tax Sensitive Growth Fund ....... 0.75% 0.70% 0.65%
DPIM has agreed to voluntarily reimburse the Real Estate Securities Fund
through March 31, 2001, to the extent that total expenses (excluding interest,
taxes, brokerage fees and commissions, and extraordinary expenses) exceed 1.30%
of the average daily net assets for Class A shares, and 2.05% of the average
daily net assets for Class B shares.
PIC has agreed to voluntarily reimburse the Tax Sensitive Growth Fund through
March 31, 2001, to the extent that total expenses (excluding interest, taxes,
brokerage fees and commissions, and extraordinary expenses) exceed 1.10% of the
average daily net assets for Class X Shares, 1.35% of the average daily net
assets for Class A shares, 2.10% of the average daily net assets for Class B
shares and 2.10% of the average daily net assets for Class C shares.
Aberdeen Fund Managers, Inc. ("Aberdeen") is subadvisor to the International
Fund, 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 Fund up to $1 billion, 0.35%
between $1 billion and $2 billion, and 0.325% in excess of $2 billion.
Seneca Capital Management LLC ("Seneca") is subadvisor to the Tax Sensitive
Growth Fund, 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
equal to 0.375% of the average daily net assets of the Phoenix Tax Sensitive
Growth Fund 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 $25,152
for Class A shares and deferred sales charges of $241,522 for Class B shares and
$11,966 for Class C shares for the six months ended May 31, 2000. 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 six months ended May 31, 2000, $508,978 was
retained by the Distributor and $366,374 was paid out to unaffiliated
Participant and $60,573 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Trust, 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 six months ended May 31, 2000, transfer
agent fees were $410,692 of which PEPCO retained $227,636 which is net of fees
paid to State Street.
At May 31, 2000 PHL and its affiliates held Phoenix Multi-Portfolio Fund
shares which aggregated the following:
37
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED) (CONTINUED)
Aggregate
Net Asset
Shares Value
--------- ----------
International Fund
--Class C .................. 9,308 $ 115,233
Real Estate Securities Fund
--Class A .................. 556,076 6,989,875
--Class B .................. 13,179 164,342
Emerging Markets Bond Fund
--Class A .................. 461,556 3,503,210
--Class B .................. 17,508 130,960
Tax-Exempt Bond Fund
--Class A .................. 286 2,883
Tax-Sensitive Growth Fund
--Class A .................. 270,000 2,681,100
--Class B .................. 10,000 99,100
--Class C .................. 10,000 99,100
--Class X .................. 10,000 99,400
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the six months ended May 31, 2000
(excluding U.S. Government and agency securities, short-term securities, futures
contracts and forward currency contracts) aggregated the following:
Purchases Sales
------------ ------------
International Fund ................. $ 50,075,317 $ 59,632,475
Real Estate Securities Fund ........ 1,400,244 4,635,260
Emerging Markets Bond Fund ......... 204,330,750 216,853,273
Tax-Exempt Bond Fund ............... 5,790,640 15,819,348
Tax Sensitive Growth Fund .......... 5,607,700 390,710
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 Funds have capital loss carryovers which may be used to offset
future capital gains.
Real Estate Emerging Tax-Exempt
Securities Markets Bond
Expiration Date Fund Fund Fund
- ---------------- ----------- ----------- ----------
2006 ................. $ 70,513 $42,839,795 $ 381,648
2007 ................. 1,889,262 3,990,182 2,973,348
---------- ----------- ----------
Total ............. $1,959,775 $46,829,977 $3,354,996
========== =========== ==========
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.
38
<PAGE>
INVESTMENTS AT NOVEMBER 30, 1999
SHARES VALUE
---------- -----------
FOREIGN COMMON STOCKS--96.6%
ARGENTINA--0.1%
Perez Companc SA Sponsored ADR (Oil & Gas
(Exploration & Production)) .......................... 13,500 $ 143,119
AUSTRALIA--1.3%
Australian Gas Light Co., Ltd. (Natural Gas) ......... 200,000 1,113,463
QBE Insurance Group Ltd. (Insurance
(Property-Casualty)) ................................. 298,000 1,185,855
-----------
2,299,318
-----------
BRAZIL--0.6%
Tele Centro Sul Participacoes SA ADR
(Telecommunications (Long Distance)) ................. 4,500 307,125
Tele Norte Leste Participacoes SA ADR
(Telecommunications (Long Distance)) ................. 15,000 267,187
Tele Sudeste Celular Participacoes SA ADR
(Telecommunications (Cellular/Wireless)) ............. 13,000 267,312
Telesp Participacoes SA ADR (Telecommunications
(Long Distance)) ..................................... 15,500 279,000
-----------
1,120,624
-----------
CANADA--5.1%
Nortel Networks Corp. (Communications Equipment) ..... 67,000 4,958,000
Seagram Co., Ltd (The) (Entertainment). .............. 43,000 1,873,187
Toronto-Dominion Bank (The) (Banks (Money Center)) ... 88,000 2,123,000
-----------
8,954,187
-----------
DENMARK--1.0%
Danisco A/S (Foods)................................... 15,992 653,722
Tele Danmark A/S (Telephone).......................... 17,567 1,131,847
-----------
1,785,569
-----------
FINLAND--3.1%
Helsingin Puhelin Oyj (Telephone) .................... 17,157 1,140,161
Nokia Oyj Class A (Communications Equipment) ......... 21,891 3,099,072
SHARES VALUE
---------- -----------
FINLAND--CONTINUED
Stora Enso Oyj (Paper & Forest Products) ............. 46,044 $ 654,155
UPM-Kymmene Oyj (Paper & Forest Products) ............ 16,744 559,729
-----------
5,453,117
-----------
FRANCE--11.2%
Air Liquide (Chemicals (Specialty)).... .............. 4,063 596,465
Alcatel (Communications Equipment)..... .............. 7,826 1,516,880
Alstom (Engineering & Construction).... .............. 21,830 619,846
Axa (Insurance (Multi-Line))........... .............. 10,742 1,448,260
Canal Plus (Broadcasting (Television, Radio &
Cable)) .............................................. 7,041 582,047
Carrefour SA (Retail (Food Chains)).... .............. 6,994 1,218,295
Castorama Dubois (Retail (Building Supplies)) ........ 4,795 1,245,630
Christian Dior SA (Beverages (Alcoholic)) ............ 4,669 839,157
Coflexip SA (Metal Fabricators) ...................... 13,150 1,085,726
Compagnie de Saint Gobain (Manufacturing
(Diversified)) ....................................... 2,156 366,873
Dexia France (Banks (Major Regional)) ................ 4,909 808,644
Lafarge SA (Construction (Cement & Aggregates)) ...... 13,712 1,292,973*
Pechiney SA Class A (Containers & Packaging (Paper)) . 16,965 983,060
Renault SA (Automobiles) ............................. 14,102 619,508
Sanofi-Synthelabo SA (Health Care (Diversified))(b) .. 15,931 656,065
Schneider SA (Electrical Equipment) .................. 10,560 712,393
Societe Generale Class A (Banks (Major Regional)) .... 3,805 819,878
Suez Lyonnaise des Eaux (Engineering &
Construction) ........................................ 2,859 421,152
Total Fina SA Class B (Oil & Gas (Refining &
Marketing)) .......................................... 16,147 2,147,709
Valeo SA (Auto Parts & Equipment) .................... 11,762 787,560
Vivendi (Manufacturing (Diversified)) ................ 11,951 956,648
-----------
19,724,769
-----------
See Notes to Financial Statements
6
<PAGE>
Phoenix-Aberdeen International Fund
SHARES VALUE
---------- -----------
GERMANY--7.2%
Allianz AG Vinkulierte Registered Shares
(Insurance (Multi-Line)) ............................ 3,412 $ 998,871
BASF AG (Chemicals (Diversified)) ................... 24,251 1,122,008
Bayer AG (Chemicals (Diversified)) .................. 15,779 667,282
Bayerische Vereinsbank AG (Banks
(Major Regional)) ................................... 15,636 969,811
Bewag AG (Electric Companies) ....................... 25,268 287,495
DaimlerChrysler AG (Automoblies) .................... 15,969 1,086,939
Deutsche Bank AG (Banks (Major Regional)) ........... 12,935 852,426
Deutsche Lufthansa AG (Airlines) .................... 61,306 1,349,379
Deutsche Telekom AG (Telephone) ..................... 8,080 466,173
Mannesmann AG (Manufacturing (Diversified)) ......... 7,961 1,654,467
Metro AG (Retail (Speciality)) ...................... 18,105 969,820
Muenchener Rueckversicherungs-Gesellschaft AG
(Insurance (Multi-Line)) ............................ 5,769 1,202,407
RWE AG (Manufacturing (Diversified)) ................ 18,730 714,756
Volkswagen AG (Automobiles) ......................... 5,719 268,341
-----------
12,610,175
-----------
GREECE--0.2%
Hellenic Telecommunications Organization SA
(Telephone) ......................................... 18,700 400,432
HONG KONG--2.0%
Swire Pacific Ltd. Class B (Manufacturing
Diversified)) ....................................... 4,150,000 3,526,717
HUNGARY--0.3%
Magyar Tavkozlesi Rt Sponsored ADR
(Telecommunications (Long Distance)) ................ 17,300 522,244
INDIA--0.8%
BSES Ltd. GDR (Electric Companies)(b) ............... 30,000 393,000
Mahanagar Telephone Nigam Ltd. Sponsored GDR
(Telecommunications (Long Distance)) ................ 115,000 1,020,625
-----------
1,413,625
-----------
INDONESIA--0.4%
PT Indosat (Telecommunications (Long Distance)) ..... 110,000 153,864
PT Indosat ADR (Telecommunications
(Long Distance)) .................................... 41,000 568,875
-----------
722,739
-----------
ISRAEL--0.2%
Bank Hapoalim Ltd. (Banks (Major Regional)) ......... 121,000 319,311
ITALY--2.4%
Assicurazioni Generali (Insurance (Life/Health)) .... 21,854 629,329
Banca Intesa SPA (Banks (Major Regional)) ........... 402,214 747,196
Beni Stabili SPA (Financial (Diversified))(b) ....... 59,900 21,049
Eni SPA (Oil (Domestic Integrated)) ................. 135,739 743,506
San Paolo-IMI SPA (Banks (Major Regional)) .......... 53,778 671,440
SHARES VALUE
---------- -----------
ITALY--CONTINUED
Telecom Italia Mobile SPA (Telephone).. ............. 56,119 $ 440,743
Telecom Italia SPA (Telephone)......... ............. 80,173 883,133
-----------
4,136,396
-----------
JAPAN--17.6%
Asahi Bank Ltd. (The) (Banks (Major Regional)) ...... 190,000 1,329,451
Canon, Inc. (Office Equipment & Supplies) ........... 48,000 1,409,208
Circle K Japan Co., Ltd. (Retail (Food Chains)) ..... 34,000 1,497,284
Dai Nippon Printing Co., Ltd. (Specialty Printing) .. 85,000 1,476,488
Fuji Photo Film Co. (Photography/Imaging) ........... 39,000 1,583,891
Fujitsu Ltd. (Computers (Hardware)).... ............. 26,000 921,074
Hitachi Credit Corp. (Consumer Finance) ............. 63,000 1,436,512
Ito-Yokado Co., Ltd. (Retail (Food Chains)) ......... 16,000 1,722,366
Kao Corp. (Household Products (Non-Durable)) ........ 49,000 1,452,953
Mabuchi Motor Co., Ltd. (Electrical Equipment) ...... 9,000 1,127,367
NTT Mobile Communications Network, Inc.
(Telecommunications (Cellular/Wireless)) ............ 70 2,452,414
Nikko Securities Co., Ltd. (The) (Investment
Banking/Brokerage) .................................. 130,000 1,615,697
Rinnai Corp. (Household Furnishings & Appliances)) .. 55,400 1,138,523
Rohm Co., Ltd. (Electronics (Semiconductors)) ....... 7,000 1,896,168
Sankyo Co., Ltd. (Health Care (Drugs-Major
Pharmaceuticals)) ................................... 60,000 1,473,797
Sanwa Bank Ltd. (The) (Banks (Major Regional)) ...... 110,000 1,334,833
Secom Co., Ltd. (Services (Commercial &
Consumer)) .......................................... 10,000 1,125,409
Sharp Corp. (Household Furnishings & Appliances) .... 94,000 1,917,991
Shin-Etsu Chemical Co., Ltd. (Chemicals (Speciality)) 35,000 1,380,339
Suzuki Motor Corp. (Automobiles)....... ............. 96,000 1,408,269
Yamato Transport Co. Ltd. (Air Freight) ............. 37,000 1,231,100
-----------
30,931,134
-----------
MALAYSIA--0.3%
Carlsberg Brewery Malaysia Berhad
(Beverages (Alcoholic)) ............................. 125,000 358,550
Malaysian Oxygen Berhad (Chemicals (Speciality)) .... 85,000 174,472
-----------
533,022
-----------
MEXICO--0.8%
Cemex SA de C.V. Sponsored ADR (Construction
(Cement & Aggregates))(b) ........................... 15,000 368,437
Coca-Cola Femsa SA Sponsored ADR (Beverages
(Non-Alcoholic)) .................................... 29,000 445,875
Grupo Televisa SA Sponsored GDR (Broadcasting
(Television, Radio & Cable))(b) ..................... 6,300 307,519
Telefonos de Mexico SA Sponsored ADR Class L
(Telecommunications (Long Distance)) ................ 4,000 370,250
-----------
1,492,081
-----------
NETHERLANDS--6.3%
ASM Lithography Holding NV (Equipment
(Semiconductor))(b) ................................. 8,747 849,899
Elsevier NV (Publishing)............... ............. 46,625 459,133
See Notes to Financial Statements
7
<PAGE>
Phoenix-Aberdeen International Fund
SHARES VALUE
---------- -----------
NETHERLANDS--CONTINUED
Equant NV (Services (Data Processing))(b) ........... 7,603 $ 734,915
Fortis (NL) NV (Financial (Diversified)) ............ 26,795 918,114
Heineken NV (Beverages (Alcoholic)).... ............. 14,275 689,919
IHC Caland NV (Oil & Gas (Drilling & Equipment)) .... 9,228 356,796
ING Groep NV (Financial (Diversified)). ............. 20,613 1,159,165
KPN NV (Telephone)..................... ............. 12,012 668,838
Koninklijke (Royal) Philips Electronics NV (Electronics
(Component Distributors)) ........................... 10,970 1,334,855
Royal Dutch Petroleum Co. (Oil (Domestic
Integrated)) ........................................ 16,281 957,851
STMicroelectronics Desighns NV (Electronics
(Semiconductors)) ................................... 9,395 1,277,060
Unilever NV - CVA (Foods) ........................... 16,534 910,639
United Pan-Europe Communications NV (Broadcasting
(Television, Radio & Cable))(b) ..................... 4,040 396,613
Wolters Klumer NV (Publishing) ...................... 10,098 304,518
-----------
11,018,315
-----------
NEW ZEALAND--0.2%
Telecom Corporation of New Zealand Ltd.
(Telephone) ......................................... 100,000 427,126
PHILIPPINES--0.5%
Ayala Land, Inc. (Financial (Diversified)) .......... 3,510,000 830,413
POLAND--0.2%
Elektrim Spolka Akcyjna SA (Distributors
(Food & Health))(b) ................................. 37,800 282,331
PORTUGAL--0.2%
Portugal Telecom SA (Telephone) ..................... 45,345 436,027
SINGAPORE--1.6%
Singapore Airlines (Airlines) ....................... 160,000 1,619,067
United Overseas Bank Ltd. (Banks (Major Regional)) .. 141,504 1,263,444
-----------
2,882,511
-----------
SOUTH AFRICA--0.6%
BOE Ltd. (Financial (Diversified)) .................. 222,320 176,416
De Beers (Metals Mining) ............................ 16,324 441,476
Metro Cash and Carry Ltd. (Retail (Specialty)) ...... 443,000 417,533
-----------
1,035,425
-----------
SOUTH KOREA--1.3%
Kookmin Bank (Banks (Major Regional)) ............... 33,013 549,623
Pohang Iron & Steel Co., Ltd. (Iron & Steel) ........ 12,700 1,740,551
-----------
2,290,174
-----------
SPAIN--2.8%
Argentaria, Caja Postal y Banco Hipotecario de
Espana SA (Banks (Major Regional)) .................. 27,292 623,795
Banco Popular Espanol SA (Banks (Major Regional)) ... 15,423 996,976
Banco Santander Central Hispano SA (Banks
(Major Regional)) ................................... 49,342 542,029
SHARES VALUE
---------- -----------
SPAIN--CONTINUED
Groupo Dragados SA (Engineering & Construction) ..... 31,611 $ 289,641
Iberdrola SA (Electric Companies)...... ............. 39,163 545,749
Repsol SA (Oil & Gas (Refining & Marketing)) ........ 33,903 740,762
Telefonica SA (Telephone)(b)........... ............. 54,753 1,140,090
Telefonica SA New Shares (Telephone)(b) ............. 1,095 18,247
-----------
4,897,289
-----------
SWEDEN--4.2%
ABB Ltd. (Electrical Equipment)(b)..... ............. 6,618 650,820
AstraZeneca Group PLC (Health Care (Drugs-Major
Pharmaceuticals)) ................................... 8,304 371,192
Electrolux AB (Household Furnishings & Appliances) .. 42,860 836,928
SKF AB (Metal Fabricators)............. ............. 16,160 360,229
SSAB Svenskt Stal AB Series A (Iron & Steel) ........ 58,408 748,905
Sandvik AB Class B (Machinery (Diversified)) ........ 15,068 428,056
Skandia Forsakrings AB (Insurance (Life/Health) ..... 53,330 1,276,627
Skandinaviska Enskilda Banken Class A (Banks
(Major Regional)) ................................... 75,303 717,505
Telefonaktiebolaget LM Ericsson Class B
(Communications Equipment) .......................... 40,624 1,971,218
-----------
7,361,480
-----------
SWITZERLAND--5.1%
Credit Suisse Group (Banks (Major Regional)) ........ 5,571 1,041,796
Nestle SA Registered (Foods)........... ............. 661 1,189,142
Novartis AG Registered Shares (Health Care
(Drugs-Major Pharmaceuticals)) ...................... 1,095 1,706,291
Roche Holding AG (Health Care (Drugs-Major
Pharmaceuticals)) ................................... 155 1,870,663
Swisscom AG (Telephone)................ ............. 1,095 371,681
Synthes-Stratec, Inc. (Health Care (Medical Products
& Supplies))(b) ..................................... 1,020 397,516
UBS AG (Banks (Major Regional))........ ............. 5,807 1,587,829
Zurich Allied AG (Financial (Diversified)) .......... 1,294 740,995
-----------
8,905,913
-----------
TAIWAN--0.2%
Standard Foods Taiwan Ltd. GDR (Foods)(b) ........... 54,837 301,603
THAILAND--0.2%
Bec World Public Co. Ltd. (Entertainment) ........... 55,000 338,505
TURKEY--0.3%
Haci Omer Sabanci Holding (Investment
Management) ......................................... 5,544,000 179,239
Yapi ve Kredi Bankasi AS (Banks (Major Regional)) ...17,600,000 322,724
-----------
501,963
-----------
UNITED KINGDOM--18.3%
3i Group PLC (Investment Banking/Brokerage) ......... 67,085 1,086,635
AstraZeneca Group PLC (Health Care (Drugs-Major
Pharmaceuticals)) ................................... 34,239 1,525,829
BG PLC (Natural Gas)................... ............. 81,302 426,672
BOC Group PLC (Chemicals (Specialty)).. ............. 21,297 438,585
See Notes to Financial Statements
8
<PAGE>
Phoenix-Aberdeen International Fund
SHARES VALUE
---------- -----------
UNITED KINGDOM--CONTINUED
BP Amoco PLC (Oil (Domestic Integrated)) ............ 289,644 $ 2,943,218
Bank of Scotland (Banks (Major Regional)) ........... 73,882 873,132
Barclays PLC (Banks (Major Regional)).. ............. 32,390 933,742
Bass PLC (Beverages (Alcoholic))....... ............. 40,758 458,954
Berkeley Group PLC (The) (Homebuilding) ............. 40,339 424,361
British Aerospace PLC (Aerospace/Defense) ........... 83,869 479,215
British American Tobacco PLC (Tobacco). ............. 56,845 357,171
British Telecommunications PLC (Telephone)..... ..... 112,208 2,249,128
Cable & Wireless PLC (Telephone) .................... 50,805 651,388
Colt Telecom Group PLC (Telephone)(b) ............... 10,700 403,385
Compass Group PLC (Services (Commercial &
Consumer)) .......................................... 24,852 300,824
Diageo PLC (Beverages (Alcoholic)) .................. 36,921 334,010
FirstGroup PLC (Services (Commercial &
Consumer)) .......................................... 99,803 432,364
Glaxo Wellcome PLC (Health Care (Drugs-Major
Pharmaceuticals) .................................... 63,369 1,895,438
Granada Group PLC (Restaurants) ..................... 44,347 363,755
HSBC Holdings PLC (Financial (Diversified)).... ..... 72,000 928,296
Hilton Group PLC (Gaming, Lottery & Pari-mutuel
Companies) .......................................... 117,902 378,385
Invensys Siebe PLC (Machinery (Diversified))... ..... 111,147 516,913
Kingfisher PLC (Retail (Speciality)) ................ 62,498 576,344
Legal & General Group PLC (Insurance (Multi-Line)) .. 257,622 707,798
Lloyds TSB Group PLC (Financial (Diversified)). ..... 104,525 1,335,988
Logica PLC (Services (Data Processing))........ ..... 46,943 1,132,715
National Westminster Bank PLC (Banks (Major
Regional)) .......................................... 47,573 1,091,847
Norwich Union PLC (Insurance (Life/Health)).... ..... 72,751 514,179
Orange PLC (Telecommunications
(Cellular/Wireless))(b) ............................. 7,131 215,568
PowerGen PLC (Electric Companies).................... 46,317 397,987
RMC Group PLC (Construction (Cement &
Aggregates)) ........................................ 35,643 439,392
Reuters Holdings Group PLC (Publishing)........ ..... 29,128 325,443
Rio Tinto PLC (Metals Mining) .. ........... 33,737 660,920
Royal & Sun Alliance Insurance Group PLC
(Insurance (Multi-Line)) ............................ 78,961 484,813
Schroders PLC (Investment Banking/Brokerage)... ..... 21,241 398,188
Serco Group PLC (Services (Commercial &
Consumer)) .......................................... 13,553 416,071
Shell Transport & Trading Co. PLC (Oil (Domestic
Integrated)) ........................................ 133,370 1,023,864
SmithKline Beecham PLC (Health Care (Drugs-Major
Pharmaceuticals)) ................................... 82,270 1,098,051
SHARES VALUE
---------- -----------
UNITED KINGDOM--CONTINUED
Smiths Industries PLC (Aerospace/Defense)...... ..... 20,452 $ 270,365
Thames Water PLC (Water Utilities) .. ........... 21,104 292,934
Vodafone Group PLC (Telecommunications
(Cellular/Wireless)) ................................ 459,019 2,158,528
Woolwich PLC (Consumer Finance) ..................... 55,069 317,507
-----------
32,259,902
-----------
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCK
(IDENTIFIED COST $143,872,870) 169,857,556
- -----------------------------------------------------------------------------
WARRANTS--0.0%
GERMANY--0.0%
Muenchener Rueckversicherungs-Gesellschaft AG
Warrants (Insurance (Multi-Line))(b) ................ 176 6,380
- -----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 6,380
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.6%
(IDENTIFIED COST $143,872,870) 169,863,936
- -----------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ ---------
SHORT TERM OBLIGATIONS--3.4%
COMMERCIAL PAPER--1.4%
Corporate Asset Funding Co., Inc. 5.70%,
12/2/99 ................................. A-1+ $2,500 $ 2,499,604
FEDERAL AGENCY SECURITIES--2.0%
Federal Home Loan Mortgage Corp.
Discount Note 5.61%, 12/1/99 ............ 3,430 3,430,000
- -----------------------------------------------------------------------------
TOTAL SHORT TERM OBLIGATIONS
(IDENTIFIED COST $5,929,604) 5,929,604
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(IDENTIFIED COST $149,802,474) 175,793,540(a)
Cash and receivables, less liabilities--0.0% 52,988
------------
NET ASSETS--100.0% $175,846,528
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $33,309,849 and gross
depreciation of $8,196,343 for federal income tax purposes. At November 30,
1999, the aggregate cost of securities for federal income tax purposes was
$150,680,034.
(b) Non-income producing.
See Notes to Financial Statements
9
<PAGE>
Phoenix-Aberdeen International Fund
<TABLE>
<CAPTION>
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
<S> <C> <C>
Aerospace/Defense........................ 0.4% Household Products (Non-Durable) .... 0.9%
Air Freight.............................. 0.7 Insurance (Life/Health) ............. 1.4
Airlines................................. 1.7 Insurance (Multi-Line) .............. 2.9
Auto Parts & Equipment................... 0.5 Insurance (Property-Casualty) ....... 0.7
Automobiles.............................. 2.0 Investment Banking/Brokerage ........ 1.8
Banks (Major Regional)...................10.8 Investment Management ............... 0.1
Banks (Money Center)..................... 1.2 Iron & Steel ........................ 1.5
Beverages (Alcoholic).................... 1.6 Machinery (Diversified) ............. 0.6
Beverages (Non-Alcoholic)................ 0.3 Manufacturing (Diversified) ......... 3.3
Broadcasting (Television, Radio & Cable). 0.8 Metal Fabricators ................... 0.9
Chemicals (Diversified).................. 1.1 Metals Mining ....................... 0.6
Chemicals (Specialty).................... 1.5 Natural Gas ......................... 0.9
Communications Equipment................. 6.8 Office Equipment & Supplies ......... 0.8
Computers (Hardware) .................... 0.5 Oil & Gas (Drilling & Equipment) .... 0.2
Construction (Cement & Aggregates)....... 1.2 Oil & Gas (Exploration & Production) 0.1
Consumer Finance ........................ 1.0 Oil & Gas (Refining & Marketing) .... 1.7
Containers & Packaging (Paper) .......... 0.6 Oil (Domestic Integrated) ........... 3.3
Distributors (Food & Health) ............ 0.2 Paper & Forest Products ............. 0.7
Electric Companies ...................... 1.0 Photography/Imaging ................. 0.9
Electrical Equipment .................... 1.5 Publishing .......................... 0.6
Electronics (Component Distributors) .... 0.8 Restaurants ......................... 0.2
Electronics (Semiconductors) ............ 1.9 Retail (Building Supplies) .......... 0.7
Engineering & Construction .............. 0.8 Retail (Food Chains) ................ 2.6
Entertainment ........................... 1.3 Retail (Specialty) .................. 1.2
Equipment (Semiconductor) ............... 0.5 Services (Commercial & Consumer) .... 1.3
Financial (Diversified) ................. 3.6 Services (Data Processing) .......... 1.1
Foods ................................... 1.8 Specialty Printing .................. 0.9
Gaming, Lottery & Pari-mutuel Companies . 0.2 Telecommunications (Long Distance) .. 2.1
Health Care (Diversified) ............... 0.4 Telecommunications (Cellular/Wireless)3.0
Health Care (Drugs-Major Pharmaceuticals) 5.9 Telephone ........................... 7.3
Health Care (Medical Products & Supplies) 0.2 Tobacco ............................. 0.2
Homebuilding ............................ 0.2 Water Utilities ..................... 0.2
Household Furnishings & Appliances....... 2.3 ------
100.0%
======
</TABLE>
10
<PAGE>
Phoenix-Aberdeen International Fund
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
ASSETS
Investment securities at value
(Identified cost $149,802,474) $175,793,540
Cash 3,071
Foreign currency at value
(Identified cost $217,870) 217,915
Receivables
Investment securities sold 1,122,813
Fund shares sold 282,675
Tax reclaim 192,720
Dividends and interest 157,501
Prepaid expenses 3,295
------------
Total assets 177,773,530
------------
LIABILITIES
Payables
Fund shares repurchased 1,271,447
Investment securities purchased 217,870
Investment advisory fee 109,167
Distribution fee 51,520
Transfer agent fee 48,325
Financial agent fee 13,805
Trustees' fee 4,258
Accrued expenses 210,610
------------
Total liabilities 1,927,002
------------
NET ASSETS $175,846,528
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $122,172,507
Undistributed net investment income 594,884
Accumulated net realized gain 27,103,528
Net unrealized appreciation 25,975,609
------------
NET ASSETS $175,846,528
============
CLASS A
Shares of beneficial interest outstanding, $1 par value
unlimited authorization (Net Assets $151,015,828) 9,850,682
Net asset value per share $15.33
Offering price per share $ 15.33/(1-4.75%) $16.09
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $23,693,556) 1,618,852
Net asset value and offering price per share $14.64
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $1,137,144) 77,640
Net asset value and offering price per share $14.65
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999
INVESTMENT INCOME
Dividends $ 3,316,330
Interest 309,301
Foreign taxes withheld (255,652)
------------
Total investment income 3,369,979
------------
EXPENSES
Investment advisory fee 1,408,005
Distribution fee, Class A 417,142
Distribution fee, Class B 204,980
Distribution fee, Class C 3,791
Financial agent fee 193,466
Transfer agent 379,777
Custodian 239,565
Printing 97,709
Professional 37,482
Registration 19,843
Trustees 17,000
Miscellaneous 14,071
------------
Total expenses 3,032,831
------------
NET INVESTMENT INCOME 337,148
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on securities 27,528,737
Net realized gain on foreign currency transactions 180,553
Net change in unrealized appreciation (depreciation) on
investments 7,642,088
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (37,398)
------------
NET GAIN ON INVESTMENTS 35,313,980
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $35,651,128
============
See Notes to Financial Statements
11
<PAGE>
Phoenix-Aberdeen International Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/99 11/30/98
---------- ----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 337,148 $ 612,150
Net realized gain (loss) 27,709,290 39,589,902
Net change in unrealized appreciation (depreciation) 7,604,690 (634,648)
----------- -----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 35,651,128 39,567,404
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (965,436) --
Net investment income, Class B (53,315) --
Net investment income, Class C (618) --
Net realized capital gains, Class A (34,216,232) (12,005,464)
Net realized capital gains, Class B (3,256,281) (942,871)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (38,491,882) (12,948,335)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (43,335,908 and 14,403,040 shares, respectively) 603,284,388 222,721,708
Net asset value of shares issued from reinvestment of distributions
(2,295,281 and 829,298 shares, respectively) 30,104,837 10,631,599
Cost of shares repurchased (46,511,696 and 13,954,794 shares, respectively) (650,782,676) (218,052,596)
------------ ------------
Total (17,393,451) 15,300,711
------------ ------------
CLASS B
Proceeds from sales of shares (2,376,201 and 1,090,651 shares, respectively) 31,785,116 16,507,911
Net asset value of shares issued from reinvestment of distributions
(225,595 and 68,327 shares, respectively)2,838,109 852,722
Cost of shares repurchased (2,104,335 and 786,659 shares, respectively) (28,370,576) (12,000,603)
------------ ------------
Total 6,252,649 5,360,030
------------ ------------
CLASS C
Proceeds from sales of shares (89,026 and 0 shares, respectively) 1,216,206 --
Net asset value of shares issued from reinvestment of distributions
(29 and 0 shares, respectively) 396 --
Cost of shares repurchased (11,415 and 0 shares, respectively) (166,015) --
------------ ------------
Total 1,050,587 --
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (10,090,215) 20,660,741
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (12,930,969) 47,279,810
NET ASSETS
Beginning of period 188,777,497 141,497,687
------------ -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $594,884 AND $805,667, RESPECTIVELY] $175,846,528 $188,777,497
============ ============
</TABLE>
See Notes to Financial Statements
12
<PAGE>
Phoenix-Aberdeen International Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------
YEAR ENDED NOVEMBER 30
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Net asset value, beginning of period $15.98 $13.89 $14.48 $12.20 $12.63
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income 0.04(1) 0.06(1) 0.03(1) 0.04(1) 0.03(1)
Net realized and unrealized gain 2.49 3.27 1.01 2.28 0.42
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.53 3.33 1.04 2.32 0.45
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.07) -- (0.29) -- --
Dividends from net realized gains (3.11) (1.24) (1.34) (0.04) (0.88)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.18) (1.24) (1.63) (0.04) (0.88)
------ ------ ------ ------ ------
Change in net asset value (0.65) 2.09 (0.59) 2.28 (0.43)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.33 $15.98 $13.89 $14.48 $12.20
====== ====== ====== ====== ======
Total return(2) 19.22% 26.17% 8.21% 19.03% 4.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $151,016 $171,463 $131,338 $135,524 $129,352
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.53% 1.37% 1.56% 1.57% 1.70%
Net investment income 0.27% 0.40% 0.22% 0.33% 0.23%
Portfolio turnover 77% 104% 167% 151% 236%
</TABLE>
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------------- ---------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
------------------------------------------------------- 3/30/99 to
1999 1998 1997 1996 1995 11/30/99
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.44 $13.56 $14.22 $12.07 $12.60 $12.82
INCOME FROM INVESTMENT OPERATIONS(5)
Net investment income (loss) (0.07)(1) (0.05)(1) (0.08)(1) (0.05)(1) (0.07)(1) (0.08)(1)
Net realized and unrealized gain 2.40 3.17 1.00 2.24 0.42 1.93
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.33 3.12 0.92 2.19 0.35 1.85
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.02) -- (0.24) -- -- (0.02)
Dividends from net realized gains (3.11) (1.24) (1.34) (0.04) (0.88) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.13) (1.24) (1.58) (0.04) (0.88) (0.02)
------ ------ ------ ------ ------ ------
Change in net asset value (0.80) 1.88 (0.66) 2.15 (0.53) 1.83
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.64 $15.44 $13.56 $14.22 $12.07 $14.65
====== ====== ====== ====== ====== ======
Total return(2) 18.45% 25.17 % 7.37 % 18.16 % 3.28 % 14.41 %(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $23,694 $17,315 $10,159 $6,955 $3,261 $1,137
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.29 % 2.11 % 2.31 % 2.31 % 2.50 % 2.30 %(3)
Net investment income (0.51)% (0.34)% (0.55)% (0.39)% (0.61)% (0.85)%(3)
Portfolio turnover 77 % 104 % 167 % 151 % 236 % 77 %
<FN>
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in total return calculation. (3)
(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.
</FN>
</TABLE>
See Notes to Financial Statements
13
<PAGE>
INVESTMENTS AT NOVEMBER 30, 1999
SHARES VALUE
------------ ----------
COMMON STOCK--99.7%
REAL ESTATE INVESTMENT TRUST--97.1%
DIVERSIFIED--8.2%
Colonial Properties Trust ........................... 25,000 $ 615,625
Vornado Realty Trust ................................ 56,500 1,783,281
----------
2,398,906
----------
INDUSTRIAL/OFFICE--40.6%
INDUSTRIAL--7.6%
CenterPoint Properties Corp. ........................ 31,500 1,094,625
First Industrial Realty Trust, Inc. ................. 44,000 1,122,000
----------
2,216,625
----------
MIXED--9.2%
Duke-Weeks Realty Corp. ............................. 54,474 1,007,769
Reckson Associates Realty Corp. ..................... 82,700 1,669,506
----------
2,677,275
----------
OFFICE--23.8%
Alexandria Real Estate Equities, Inc. ............... 30,000 879,375
Boston Properties, Inc. ............................. 72,200 2,044,163
Equity Office Properties Trust ...................... 25,000 548,438
Highwoods Properties, Inc. .......................... 10,000 220,000
Mack-Cali Realty Corp. .............................. 47,900 1,182,531
Spieker Properties, Inc. ............................ 60,000 2,100,000
----------
6,974,507
----------
- -----------------------------------------------------------------------------
TOTAL INDUSTRIAL/OFFICE 11,868,407
- -----------------------------------------------------------------------------
SHARES VALUE
------------ ----------
RESIDENTIAL--26.5%
APARTMENTS--22.8%
Apartment Investment & Management Co ................ 48,000 $1,785,000
Avalonbay Communities, Inc. ......................... 40,700 1,317,662
Equity Residential Properties Trust ................. 35,800 1,438,712
Essex Property Trust, Inc. .......................... 47,400 1,537,537
Smith, Charles E. Residential Realty, Inc ........... 18,000 585,000
----------
6,663,911
----------
MANUFACTURED HOMES--3.7%
Manufactured Home Communities, Inc .................. 21,500 509,281
Sun Communities, Inc. ............................... 19,200 583,200
----------
1,092,481
----------
- -----------------------------------------------------------------------------
TOTAL RESIDENTIAL 7,756,392
- -----------------------------------------------------------------------------
RETAIL--20.3%
OUTLET CENTERS--2.6%
Chelsea GCA Realty, Inc. ............................ 25,000 773,438
REGIONAL MALLS--11.1%
CBL & Associates Properties, Inc .................... 44,000 959,750
General Growth Properties, Inc. ..................... 23,000 688,563
Macerich Co. (The) .................................. 43,800 870,525
Urban Shopping Centers, Inc. ........................ 28,000 722,750
----------
3,241,588
----------
STRIP CENTERS--6.6%
Developers Diversified Realty Corp. ................. 49,200 685,725
JDN Realty Corp. .................................... 25,000 410,938
Kimco Realty Corp. .................................. 25,000 831,250
----------
1,927,913
----------
- -----------------------------------------------------------------------------
TOTAL RETAIL 5,942,939
- -----------------------------------------------------------------------------
See Notes to Financial Statements
18
<PAGE>
Phoenix-Duff & Phelps Real Estate Securities Fund
SHARES VALUE
------------ ----------
SELF STORAGE--1.5%
Storage USA, Inc. ................................... 16,700 $ 450,900
- -----------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUST
(IDENTIFIED COST $31,402,094) 28,417,544
- -----------------------------------------------------------------------------
REAL ESTATE OPERATING COMPANY--2.6%
DIVERSIFIED--0.1%
Vornado Operating Inc.(b) ........................... 4,075 23,686
INDUSTRIAL OFFICE--2.5%
Reckson Services Industries, Inc.(b) ................ 26,636 732,490
- -----------------------------------------------------------------------------
TOTAL REAL ESTATE OPERATING COMPANIES 756,176
- -----------------------------------------------------------------------------
TOTAL COMMON STOCK
(IDENTIFIED COST $31,435,010) 29,173,720
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.7%
(IDENTIFIED COST $31,474,427) 29,173,720
- -----------------------------------------------------------------------------
PAR
(000) VALUE
------------ ----------
SHORT-TERM OBLIGATIONS--0.7%
FEDERAL AGENCY SECURITIES--0.7%
Federal Home Loan Mortgage Corp.
Discount Note 5.61%, 12/1/99 ....................... $210 $ 210,000
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $210,000) 210,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.4%
(IDENTIFIED COST $31,684,427) 29,383,720(a)
Cash and receivables, less liabilities--(0.4%) (128,209)
----------
NET ASSETS--100.0% .................................. $29,255,511
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,406,902 and gross
depreciation of $3,707,609 for federal income tax purposes. At November 30,
1999, the aggregate cost of securities for federal income tax purposes was
$31,684,427.
(b) Non-income producing.
See Notes to Financial Statements
19
<PAGE>
Phoenix-Duff & Phelps Real Estate Securities Fund
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
ASSETS
Investment securities at value
(Identified cost $31,684,427) $ 29,383,720
Receivables
Dividends and interest 38,018
Fund shares sold 6,710
Receivable from advisor 5,376
Prepaid expense 788
-------------
Total assets 29,434,612
-------------
LIABILITIES
Custodian 301
Payables
Fund shares repurchased 75,349
Transfer agent fee 15,880
Distribution fee 14,109
Financial agent fee 5,099
Trustees' fee 4,258
Accrued expenses 64,105
-------------
Total liabilities 179,101
-------------
NET ASSETS $29,255,511
=============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $33,276,244
Undistributed net investment income 239,751
Accumulated net realized loss (1,959,777)
Net unrealized depreciation (2,300,707)
-------------
NET ASSETS $29,255,511
=============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $17,014,442) 1,531,091
Net asset value per share $11.11
Offering price per share $11.11/(1-4.75%) $11.66
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $12,241,069) 1,108,654
Net asset value and offering price per share $11.04
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999
INVESTMENT INCOME
Dividends $ 1,982,990
Interest 36,561
--------------
Total investment income 2,019,551
--------------
EXPENSES
Investment advisory fee 270,694
Distribution fee, Class A 52,327
Distribution fee, Class B 151,623
Financial agent fee 64,365
Transfer agent 93,814
Printing 31,091
Professional 23,191
Registration 22,666
Trustees 16,998
Custodian 11,062
Miscellaneous 7,795
--------------
Total expenses 745,626
Less expenses borne by investment adviser (162,984)
--------------
Net expenses 582,642
--------------
NET INVESTMENT INCOME 1,436,909
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (1,888,259)
Net change in unrealized appreciation (depreciation) on
investments (1,322,055)
--------------
NET LOSS ON INVESTMENTS (3,210,314)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,773,405)
==============
See Notes to Financial Statements
20
<PAGE>
Phoenix-Duff & Phelps Real Estate Securities Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/99 11/30/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 1,436,909 $ 1,854,142
Net realized gain (loss) (1,888,259) (70,514)
Net change in unrealized appreciation (depreciation) (1,322,055) (12,098,214)
----------- ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1,773,405) (10,314,586)
----------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (1,076,704) (967,687)
Net investment income, Class B (688,451) (535,003)
Net realized gains, Class A -- (2,254,756)
Net realized gains, Class B -- (1,514,857)
----------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,765,155) (5,272,303)
----------- ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (149,096 and 445,657 shares, respectively) 1,804,294 6,419,885
Net asset value of shares issued from reinvestment of distributions
(85,480 and 207,094 shares, respectively) 990,008 3,035,928
Cost of shares repurchased (718,769 and 855,051 shares, respectively) (8,384,839) (11,951,570)
----------- ------------
Total (5,590,537) (2,495,757)
----------- ------------
CLASS B
Proceeds from sales of shares (167,405 and 362,036 shares, respectively) 2,005,746 5,231,142
Net asset value of shares issued from reinvestment of distributions
(47,858 and 120,031 shares, respectively) 551,622 1,757,836
Cost of shares repurchased (602,692 and 400,698 shares, respectively) (7,096,425) (5,408,854)
----------- ------------
Total (4,539,057) 1,580,124
----------- ------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (10,129,594) (915,633)
----------- ------------
NET DECREASE IN NET ASSETS (13,668,154) (16,502,522)
NET ASSETS
Beginning of period 42,923,665 59,426,187
----------- ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$239,751 AND $563,936, RESPECTIVELY) $29,255,511 $ 42,923,665
=========== ============
</TABLE>
See Notes to Financial Statements
21
<PAGE>
Phoenix-Duff & Phelps Real Estate Securities Fund
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
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 11/30/95
----------
Net asset value, beginning of period $12.25 $16.39 $13.14 $10.72 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.51(4)(5) 0.55(4)(5) 0.49(4)(5) 0.53(5) 0.43(4)(5)
Net realized and unrealized gain (loss) (1.07) (3.18) 3.52 2.50 0.55
------ ------ ------ ------ -----
TOTAL FROM INVESTMENT OPERATIONS (0.56) (2.63) 4.01 3.03 0.98
------ ------ ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.58) (0.44) (0.51) (0.59) (0.26)
Dividends from net realized gains -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ -----
TOTAL DISTRIBUTIONS (0.58) (1.51) (0.76) (0.61) (0.26)
------ ------ ------ ------ -----
Change in net asset value (1.14) (4.14) 3.25 2.42 0.72
------ ------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD $11.11 $12.25 $16.39 $13.14 $10.72
====== ====== ====== ====== =====
Total return(1) (4.69)% (17.42)% 31.44% 29.20% 9.87%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $17,014 $24,686 $36,336 $22,872 $13,842
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.30% 1.31% 1.30% 1.30% 1.30%(2)
Net investment income 4.30% 3.79% 3.34% 4.55% 5.79%(2)
Portfolio turnover 22% 11% 54% 24% 9%(3)
CLASS B
---------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
-------------------------------------------- 3/1/95 TO
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 11/30/95
---------
Net asset value, beginning of period $12.19 $16.32 $13.10 $10.68 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.42(4)(6) 0.43(4)(6) 0.38(4)(6) 0.46(6) 0.36(4)(6)
Net realized and unrealized gain (loss) (1.06) (3.15) 3.50 2.47 0.56
------ ------ ------ ------ -----
TOTAL FROM INVESTMENT OPERATIONS (0.64) (2.72) 3.88 2.93 0.92
------ ------ ------ ------ -----
LESS DISTRIBUTIONS
Dividends from net investment income (0.51) (0.34) (0.41) (0.49) (0.24)
Dividends from net realized gains -- (1.07) (0.25) (0.02) --
------ ------ ------ ------ -----
TOTAL DISTRIBUTIONS (0.51) (1.41) (0.66) (0.51) (0.24)
------ ------ ------ ------ -----
Change in net asset value (1.15) (4.13) 3.22 2.42 0.68
------ ------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD $11.04 $12.19 $16.32 $13.10 $10.68
====== ====== ====== ====== =====
Total return(1) (5.38)% (18.01)% 30.44% 28.25% 9.21%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $12,241 $18,237 $23,091 $8,259 $2,239
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.05% 2.06% 2.05% 2.05% 2.05%(2)
Net investment income 3.54% 3.07% 2.55% 3.95% 5.03%(2)
Portfolio turnover 22% 11% 54% 24% 9%(3)
<FN>
(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
$0.05, $0.02, $0.04, $0.07 and $0.12, respectively.
(6) Includes reimbursement of operating expenses by investment adviser of
$0.05, $0.02, $0.04, $0.07 and $0.12, respectively.
</FN>
</TABLE>
See Notes to Financial Statements
22
<PAGE>
INVESTMENTS AT NOVEMBER 30, 1999
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
CORPORATE BONDS--0.3%
TELECOMMUNICATIONS (LONG DISTANCE)--0.3%
Metromedia International Group, Inc.
10.50%, 9/30/07 .......................... NR $ 756 $ 377,778
- -----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $794,850) 377,778
- -----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--75.0%
ALGERIA--2.6%
Algeria Tranche 3 1.125%, 3/4/10(h) ...... NR 300,000 1,541,322
Algeria Tranche 3 6%, 3/4/10 ............. NR 2,000 1,430,000
-----------
2,971,322
-----------
ARGENTINA--15.6%
Republic of Argentina 11.75%, 4/7/09 ..... B 4,000 3,897,500
Republic of Argentina Bearer FRB
6.813%, 3/31/05(b) ....................... B 5,280 4,612,080
Republic of Argentina Bocon Pro1 M1, PIK
interest capitalization, 2.786%, 4/1/07(b)(d)(e) BBB- 3,585 2,435,981
Republic of Argentina 9.75%, 9/19/27 ..... B 3,000 2,505,000
Republic of Argentina RegS
11.75%, 2/12/07(e) ....................... B 5,300 4,684,484
-----------
18,135,045
-----------
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- --------- -----------
BRAZIL--22.5%
Brazil MYDFA Trust Certificates RegS
6.8125%, 9/15/07(b) ...................... NR $ 8,241 $ 6,202,056
Republic of Brazil Global Bearer
14.5%, 10/15/09 .......................... B 1,000 1,042,500
Republic of Brazil 6%, 9/15/13 ........... B 3,733 2,501,324
Republic of Brazil FLRB Bearer
5%, 4/15/09(b) ........................... B 6,200 4,231,500
Republic of Brazil C Bond, PIK interest
capitalization, 8%, 4/15/14(b) ........... B 1,820 1,236,906
Republic of Brazil DCB-L Euro
7%, 4/15/12(b) ........................... B 2,500 1,676,562
Republic of Brazil NMB-L 7%, 4/15/09(b) .. B 1,500 1,129,687
Republic of Brazil NMB-L Reg
7%, 4/15/09(b) ........................... B 10,800 8,133,750
-----------
26,154,285
-----------
BULGARIA--2.0%
Republic of Bulgaria FLIRB Bearer Series A
2.75%, 7/28/12(b) ........................ B 1,606 1,128,866
Republic of Bulgaria FLIRB Reg A
2.75%, 7/28/12(b) ........................ B 1,250 878,125
Republic of Bulgaria FLIRB Series B
3.25%, 7/28/12(b) ........................ B 508 356,921
-----------
2,363,912
-----------
See Notes to Financial Statements
25
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
COLOMBIA--1.1%
Republic of Colombia 9.75%, 4/23/09 ...... Ba $ 1,500 $ 1,317,188
-----------
ECUADOR--1.3%
Republic of Ecuador 4%, 2/28/25(b)(f) .... Caa 2,000 702,500
Republic of Ecuador Series Disc
0%, 2/28/25(f) ........................... Caa 2,000 773,750
-----------
1,476,250
-----------
IVORY COAST--0.5%
Ivory Coast PDI Series F 1.90%, 3/29/18(i) NR 606 23,968
Ivory Coast FLIRB Series FRF
2%, 3/29/18(i) ........................... NR 15,950 514,145
-----------
538,113
-----------
MEXICO--9.7%
United Mexican States 6.63%, 12/31/19(l)(n) Ba 8,250 1,049,501
United Mexican States Global Bond
11.375%, 9/15/16 ......................... Ba 6,500 7,166,250
United Mexican States Global Bond
11.50%, 5/15/26 .......................... Ba 1,500 1,737,375
United Mexican States NMB
6.76%, 3/25/05(b) ........................ Ba 1,375 1,292,500
-----------
11,245,626
-----------
NIGERIA--0.7%
Nigeria Promissory Notes Series RC
5.092%, 1/5/10 ........................... NR 1,271 824,646
PERU--1.2%
Republic of Peru FLIRB 3.75%, 3/17/17(b) . Ba 2,400 1,399,500
RUSSIA--10.4%
City of St Petersburg RegS 9.5%, 6/18/02 . Caa 2,000 1,290,000
Russia Principal Loans PIK interest
capitalization 0%, 6/24/08(f) ............ NR 25,000 3,406,250
Russia Treasury Bill OFZ Linked Notes
14%, 9/12/01(g) .......................... NR 52,885 891,320
Russian Federal Loan Bond OFZ Series 25022
15%, 2/23/00(g) .......................... NR 25,556 899,724
Russian Federal Loan Bond OFZ Series 25030
0%, 12/15/01(g) .......................... NR 4,679 48,280
Russian Federal Loan Bond OFZ Series 27001
25%, 2/6/02(b)(g) ........................ NR 1,365 25,050
Russian Federal Loan Bond OFZ Series 27002
25%, 5/22/02(b)(g) ....................... NR 1,365 23,521
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
RUSSIA--CONTINUED
Russian Federal Loan Bond OFZ Series 27003
25%, 6/5/02(b)(g) ........................ NR $ 1,365 $ 23,358
Russian Federal Loan Bond OFZ
Series 27004 25%, 9/18/02(b)(g) ......... NR 1,365 22,070
Russian Federal Loan Bond OFZ
Series 27005 25%, 10/9/02(b)(g) .......... NR 1,365 21,313
Russian Federal Loan Bond OFZ
Series 27006 25%, 1/22/03(b)(g) .......... NR 1,365 20,337
Russian Federal Loan Bond OFZ
Series 27007 25%, 2/5/03(b)(g) ........... NR 1,365 20,199
Russian Federal Loan Bond OFZ
Series 27008 25%, 5/21/03(b)(g) ......... NR 1,365 19,826
Russian Federal Loan Bond OFZ
Series 27009 25%, 6/4/03(b)(g) ........... NR 1,365 19,749
Russian Federal Loan Bond OFZ
Series 27010 25%, 9/17/03(b)(g) .......... NR 1,365 19,059
Russian Federal Loan Bond OFZ
Series 27011 25%, 10/8/03(b)(g) .......... NR 1,365 18,604
Russian Federal Loan Bond OFZ
Series 28001 25%, 1/21/04(b)(g) .......... NR 1,365 18,426
Russian Federation 144A 12.75%,
6/24/28(c) ............................... B 5,000 3,087,500
Russian Federation RegS 9.25%, 11/27/01 .. B 1,000 737,500
Russian Federation RegS 12.75%, 6/24/28 .. B 2,500 1,543,750
-----------
12,155,836
-----------
TURKEY--0.9%
Republic of Turkey 11.875%, 11/5/04 ...... B 1,000 1,023,750
VENEZUELA--6.5%
Republic of Venezuela 13.625%, 8/15/18 ... B 5,000 4,475,000
Republic of Venezuela FLIRB Series A
6.875%, 3/31/07(b) ....................... B 714 548,210
Republic of Venezuela FLIRB Series B
6.875%, 3/31/07(b) ....................... B 1,786 1,370,525
Republic of Venezuela NMB-A
6.438%, 12/18/05(b) ...................... B 1,529 1,208,258
-----------
7,601,993
-----------
- ------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $87,305,172) 87,207,466
- ------------------------------------------------------------------------------
See Notes to Financial Statements
26
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
FOREIGN CORPORATE BONDS--10.3% 1
ARGENTINA--0.8%
Imasac SA RegS 11%,5/2/05
(Iron & Steel) ........................... B $ 1,500 $ 892,500
BRAZIL--0.9%
Localiza Rent a Car 10.25%, 10/1/05 (Services
(Commercial & Consumer)) ................. B 1,500 1,072,500
COLOMBIA--0.3%
Transtel Pass-Thru Trust 12.50%, 11/1/07
(Communications Equipment) ............... B 500 280,000
MEXICO--5.7%
Azteca Holdings SA 11%, 6/15/02
(Broadcasting (Television, Radio & Cable)) B 1,000 867,500
International de Ceramica S.A.
9.75%, 8/1/02 (Household Furniture &
Appliances) .............................. NR 2,000 1,540,000
Nacional Finaniciera SNC 22%, 5/20/02
(Financial (Diversified))(k) ............. NR 20,000 2,198,794
Transporte Maritma Yankee Senior Notes
10%, 11/15/06 (Truckers) ................. Ba 1,300 1,020,500
Vicap SA 11.375%, 5/15/07
(Housewares) ............................. Ba 1,100 1,014,750
-----------
6,641,544
-----------
NETHERLANDS--2.6%
Astra O/S Fin BV Asiiij Float 6.50%, 6/30/05
(Automobiles) ............................ NR 2,061 1,319,194
Mosenergo Finance 8.375%, 10/9/02
(Financial (Diversified))(d) ............. CCC 2,500 1,725,000
-----------
3,044,194
-----------
- -----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $11,467,595) 11,930,738
- -----------------------------------------------------------------------------
SHARES VALUE
---------- ----------
FOREIGN COMMON STOCKS--7.7%
ARGENTINA--1.1%
Banco de Galicia y Buenos Aires SA de CV
Sponsored ADR (Banks (Money Center)) ................ 60,112 $ 1,228,539
HUNGARY--0.7%
Magyar Tavkozlesi Rt. Sponsored ADR
(Telecommunications (Long Distance) ................. 25,700 775,819
INDONESIA--0.3%
PT Telekomunikasi Indonesia Sponsored
ADR (Telecommunications (Long
Distance) ........................................... 42,500 358,594
MEXICO--1.3%
Cemex S.A. de C.V.Sponsored ADR
(Construction (Cement & Aggregates) ................. 20,000 491,250
Telefonos de Mexico S.A. Sponsored ADR
(Telecommunications (Long Distance)) ................ 11,700 1,082,981
-----------
1,574,231
-----------
RUSSIA--2.5%
Lukoil Holding Sponsored ADR (Oil (Domestic
Integrated)) ........................................ 50,000 1,712,500
Surgutneftegaz Sponsored ADR (Oil
(International Integrated)) ......................... 1 30,000 1,235,000
-----------
2,947,500
-----------
SINGAPORE--0.2%
Asia Pulp & Paper Co., Ltd. Sponsored ADR
(Paper & Forest Products)(m) ........................ 23,200 197,200
TAIWAN--0.6%
Taiwan Semiconductor Manufacturing Co.,
Ltd. Sponsored ADR (Electronics
(Semiconductors)) ................................... 20,000 716,250
TURKEY--0.7%
Haci Omer Sabanchi Holding AS ADR
(Conglomerates) ..................................... 1 00,000 805,000
VENEZUELA--0.3%
Compania Anonima Nacional Telefonos de
Venezuela - ADR (Telecommunications
(Long Distance)) .................................... 15,000 359,063
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $8,418,956) 8,962,196
- -----------------------------------------------------------------------------
See Notes to Financial Statements
27
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
SHARES VALUE
---------- ----------
MUTUAL FUNDS--1.7%
HONG KONG--0.3%
Tracker Fund of Hong Kong (Financial
(Diversified))(m) ................................... 150,000 $ 294,537
UNITED STATES--1.4%
Morgan Stanley Dean Witter India Investment
Fund (Financial (Diversified))(m) ................... 39,300 530,550
Webs - Japan Index Series (Financial
(Diversified)) ...................................... 33,000 503,250
Webs - Malaysia Index Series (Financial
(Diversified)) ...................................... 45,000 241,875
Webs - Singapore Index Series (Financial
(Diversified)) ...................................... 43,000 360,125
-----------
1,635,800
-----------
- -----------------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(IDENTIFIED COST $1,910,451) 1,930,337
- -----------------------------------------------------------------------------
WARRANTS--1.0%
First Com Corp. 144A Warrants(c) .................... 70,000 1,207,500
- -----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 1,207,500
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--96.0%
(IDENTIFIED COST $109,897,024) 111,616,015
- -----------------------------------------------------------------------------
PAR
VALUE
(000) VALUE
---------- ----------
SHORT TERM OBLIGATIONS--1.2%
FEDERAL AGENCY SECURITIES--1.2%
Federal Home Loan Mortgage Corp.
Discount Note 5.61%, 12/1/99 ........................ $ 1,445 $ 1,445,000
- -----------------------------------------------------------------------------
TOTAL SHORT TERM OBLIGATIONS
(IDENTIFIED COST $1,445,000) 1,445,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--97.2%
(IDENTIFIED COST $111,342,024) 113,061,015(a)
Cash and receivables, less liabilities--2.8% 3,251,210
------------
NET ASSETS--100.0% $116,312,225
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $9,649,022 and gross
depreciation of $8,030,860 for federal income tax purposes. At November 30,
1999, the aggregate cost of securities for federal income tax purposes was
$111,442,853
(b) Variable or step coupon security; interest rate shown 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,
1999, these securities amounted to a value of $4,295,000 or 3.7% of net
assets.
(d) As rated by Standard & Poors, Fitch or Duff & Phelps.
(e) Par value represents Argentine Pesos.
(f) Securities in default.
(g) Par value represents Russian Rubles.
(h) Par value represents Japanese Yens.
(i) Par value represents Euro.
(j) Par value represents Turkish Liras rounded in millions.
(k) Par value represents Mexican Pesos.
(l) Rights incorporated as a unit.
(m) Non-income producing.
(n) Par value represents French Francs.
See Notes to Financial Statements
28
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
ASSETS
Investment securities at value
(Identified cost $111,342,024) $113,061,015
Foreign currency at value
(Identified cost $540,200) 536,883
Net unrealized appreciation on forward
foreign currency contracts 59,950
Receivables
Investment securities sold 17,313,149
Dividends and interest 2,539,208
Fund shares sold 139,415
Prepaid expense 1,522
------------
Total assets 133,651,142
------------
LIABILITIES
Custodian 39,013
Payables
Investment securities purchased 16,792,003
Fund shares repurchased 233,570
Investment advisory fee 71,822
Distribution fee 61,887
Transfer agent fee 27,242
Financial agent fee 10,340
Trustees' fee 4,258
Accrued expenses 98,782
------------
Total liabilities 17,338,917
------------
NET ASSETS $116,312,225
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $160,495,907
Undistributed net investment income 1,088,309
Accumulated net realized loss (47,041,028)
Net unrealized appreciation 1,769,037
------------
NET ASSETS $116,312,225
============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $54,848,923) 7,129,598
Net asset value per share $7.69
Offering price per share $7.69/(1-4.75%) $8.07
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $58,453,075) 7,694,088
Net asset value and offering price per share $7.60
CLASS C
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $3,010,227) 394,454
Net asset value and offering price per share $7.63
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999
INVESTMENT INCOME
Interest $ 18,113,849
Dividends 27,744
Foreign taxes withheld (752)
-------------
Total investment income 18,140,841
-------------
EXPENSES
Investment advisory fee 700,590
Distribution fee, Class A 115,593
Distribution fee, Class B 449,257
Distribution fee, Class C 22,491
Financial agent fee 110,201
Transfer agent 196,275
Custodian 60,748
Printing 46,778
Professional 29,628
Trustees 15,167
Registration 31,232
Miscellaneous 33,107
-------------
Total expenses 1,811,067
Custodian fees paid indirectly (1,520)
-------------
Net expenses 1,809,547
-------------
NET INVESTMENT INCOME 16,331,294
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 1,174,456
Net realized gain on foreign currency transactions 38,778
Net change in unrealized appreciation (depreciation) on
investments 4,685,310
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions 87,512
-------------
NET GAIN ON INVESTMENTS 5,986,056
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $22,317,350
=============
See Notes to Financial Statements
29
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/99 11/30/98
------------- -------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $16,331,294 $13,088,232
Net realized gain (loss) 1,213,234 (43,148,647)
Net change in unrealized appreciation (depreciation) 4,772,822 1,569,334
------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 22,317,350 (28,491,081)
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (7,416,057) (5,581,936)
Net investment income, Class B (7,042,619) (3,942,930)
Net investment income, Class C (347,153) (54,521)
Net realized gains, Class A -- (1,201,906)
Net realized gains, Class B -- (697,910)
Net realized gains, Class C -- --
In excess of net investment income, Class A -- (6,002,330)
In excess of net investment income, Class B -- (3,485,367)
In excess of net investment income, 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 (14,805,829) (24,309,159)
------------- -------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (3,556,835 and 2,907,456 shares, respectively) 25,142,286 27,208,118
Net asset value of shares issued from reinvestment of distributions
(351,670 and 1,029,832 shares, respectively) 2,480,258 10,935,153
Cost of shares repurchased (2,574,617 and 3,428,413 shares, respectively) (18,206,934) (34,342,515)
------------- -------------
Total 9,415,610 3,800,756
------------- -------------
CLASS B
Proceeds from sales of shares (3,425,208 and 3,220,244 shares, respectively) 24,265,446 30,065,148
Net asset value of shares issued from reinvestment of distributions
(446,690 and 492,109 shares, respectively) 3,123,762 4,864,295
Cost of shares repurchased (1,401,581 and 1,516,158 shares, respectively) (9,790,280) (13,762,067)
------------- -------------
Total 17,598,928 21,167,376
------------- -------------
CLASS C
Proceeds from sales of shares (462,019 and 170,364 shares, respectively) 3,316,816 1,509,747
Net asset value of shares issued from reinvestment of distributions
(17,681 and 2,515 shares, respectively) 126,396 19,878
Cost of shares repurchased (253,300 and 4,825 shares, respectively) (1,856,218) (46,423)
------------- -------------
Total 1,586,994 1,483,202
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 28,601,532 26,451,334
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 36,113,053 (26,348,906)
NET ASSETS
Beginning of period 80,199,172 106,548,078
------------- -------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME AND DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME OF $1,088,309 AND ($50,697), RESPECTIVELY) $116,312,225 $ 80,199,172
============ =============
</TABLE>
See Notes to Financial Statements
30
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
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
1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.20 $12.84 $14.80 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.23 1.32 1.38(4) 1.26(5) 0.25(4)(5)
Net realized and unrealized gain (loss) 0.40 (4.22) 0.17 4.56 0.18
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.63 (2.90) 1.55 5.82 0.43
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (1.14) (1.00) (1.28) (1.20) (0.25)
Dividends from net realized gains -- (0.23) (2.23) -- --
Dividends in excess of net investment income -- (1.16) -- -- --
Return of capital -- (0.35) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.14) (2.74) (3.51) (1.20) (0.25)
------ ------ ------ ------ ------
Change in net asset value 0.49 (5.64) (1.96) 4.62 0.18
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.69 $ 7.20 $12.84 $14.80 $10.18
====== ====== ====== ====== ======
Total return(1) 25.63% (27.20)% 11.91% 60.18% 4.40%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $54,849 $41,725 $67,875 $29,661 $12,149
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.56%(7) 1.43% 1.40%(7) 1.50% 1.50%(2)
Net investment income 17.96% 13.74% 9.90% 10.41% 10.48%(2)
Portfolio turnover 326% 405% 614% 378% 38%(3)
CLASS B
------------------------------------------------------
FROM
YEAR ENDED NOVEMBER 30 INCEPTION
------------------------------------------ 9/5/95 TO
1999 1998 1997 1996 11/30/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.13 $12.77 $14.78 $10.18 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.17 1.23 1.26(4) 1.19(6) 0.22(4)(6)
Net realized and unrealized gain (loss) 0.40 (4.18) 0.18 4.53 0.20
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.57 (2.95) 1.44 5.72 0.42
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (1.10) (0.97) (1.22) (1.12) (0.24)
Dividends from net realized gains -- (0.23) (2.23) -- --
Dividends in excess of net investment income -- (1.16) -- -- --
Return of capital -- (0.33) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.10) (2.69) (3.45) (1.12) (0.24)
------ ------ ------ ------ ------
Change in net asset value 0.47 (5.64) (2.01) 4.60 0.18
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 7.60 $ 7.13 $12.77 $14.78 $10.18
====== ====== ====== ====== ======
Total return (1) 24.52% (27.86)% 11.07% 58.94% 4.22%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $58,453 $37,270 $38,673 $9,713 $596
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.31%(7) 2.20% 2.15%(7) 2.25% 2.25%(2)
Net investment income 17.04% 12.98% 9.14% 9.79% 10.29%(2)
Portfolio turnover 326% 405% 614% 378% 38%(3)
<FN>
(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) The ratio of expenses to average net assets excludes the effect of expense
offsets for custodian fees; if expense offsets were included, the ratio
would not significantly differ.
</FN>
</TABLE>
See Notes to Financial Statements
31
<PAGE>
Phoenix-Goodwin Emerging Markets Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
------------------
FROM
YEAR INCEPTION
ENDED 3/26/98 TO
11/30/99 11/30/98
Net asset value, beginning of period $ 7.17 $12.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 1.17 0.85(4)
Net realized and unrealized gain (loss) 0.39 (5.10)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.56 (4.25)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (1.10) (0.66)
Dividends from net realized gains -- --
Dividends in excess of net investment income -- --
Return of capital -- (0.17)
------ ------
TOTAL DISTRIBUTIONS (1.10) (0.83)
------ ------
Change in net asset value 0.46 (5.08)
------ ------
NET ASSET VALUE, END OF PERIOD $ 7.63 $ 7.17
====== ======
Total return(1) 24.40% (35.33)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $3,010 $1,205
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.31%(5) 2.29%(2)
Net investment income 16.47% 15.59%(2)
Portfolio turnover 326% 405%(3)
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
(5) The ratio of expenses to average net assets excludes the effect of expense
offsets for custodian fees; if expense offsets were included, the ratio
would not significantly differ.
See Notes to Financial Statements
32
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
INVESTMENTS AT NOVEMBER 30, 1999
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
MUNICIPAL BONDS--97.4%
ALASKA--1.3%
Valdez Marine Terminal Revenue
7%, 12/1/25(c) .......................... AA+ $1,125 $1,192,500
ARIZONA--1.1%
Pima County Sewer Revenue Pre-refunded
6.75%, 7/1/15 (FGIC Insured) ............ AAA 460 481,850
Pima County Sewer Revenue Unrefunded
6.75%, 7/1/15 (FGIC Insured) ............ AAA 540 560,925
----------
1,042,775
----------
ARKANSAS--1.2%
Drew County Public Facilities Board Series A-2
7.90%, 8/1/11 (FNMA Collateralized) ..... Aaa(b) 211 222,473
Jacksonville Residential Housing Facilities
Board Series A-2 7.90%, 1/1/11 (FNMA
Collateralized) ......................... Aaa(b) 364 380,941
Lonoke County Residential Housing Facilities
Board Series A-2 7.90%, 4/1/11 (FNMA
Collateralized) ......................... Aaa(b) 345 369,598
Stuttgart Public Facilities Board Series A-2
7.90%, 9/1/11 (FNMA Collateralized) ..... Aaa(b) 171 177,824
----------
1,150,836
----------
CALIFORNIA--7.5%
Pittsburg Redevelopment Agency Series A
4.625%, 8/1/21 (AMBAC Insured) .......... AAA 1,650 1,383,937
Riverside County Series B
8.625%, 5/1/16 (GNMA Collateralized) .... AAA 4,300 5,719,000
----------
7,102,937
----------
COLORADO--3.0%
Arapahoe County Capital Improvement
Series E Pre-refunded 6.90%, 8/31/15 .... Aaa(b) 2,500 2,828,125
CONNECTICUT--4.0%
Mashantucket Western Pequot Tribe
Special Revenue Series A Pre-refunded 144A
6.50%, 9/1/05(d) ........................ AAA 845 922,106
Mashantucket Western Pequot Tribe
Special Revenue Series A Pre-refunded 144A
6.50%, 9/1/06(d) ........................ AAA 495 543,881
Mashantucket Western Pequot Tribe Special
Revenue Series A 144A 5.50%, 9/1/28(d) .. Baa(b) 1,500 1,312,500
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
CONNECTICUT--CONTINUED
Mashantucket Western Pequot Tribe Special
Revenue Series B 144A 5.60%, 9/1/09(d) .. Baa(b) $1,000 983,750
----------
3,762,237
----------
GEORGIA--8.8%
Atlanta Water and Wastewater Revenue
Series A 5%, 11/1/29 (FGIC Insured) ..... AAA 2,000 1,715,000
Atlanta Water and Wastewater Revenue
Series A 5%, 11/1/38 (FGIC Insured) ..... AAA 1,000 837,500
Cartersville Development Authority Revenue
5.625%, 5/1/09 .......................... A+ 2,000 2,035,000
Georgia Municipal Electric Authority Power
Revenue Series Z 5.50%, 1/1/20
(FGIC Insured) .......................... AAA 2,000 1,940,000
Georgia State General Obligation Series A
7.45%, 1/1/09 ........................... AAA 1,500 1,762,500
----------
8,290,000
----------
ILLINOIS--8.0%
Chicago Board of Education Series A
6%, 1/1/20 (MBIA Insured) ............... AAA 500 509,375
Chicago Gas Supply Revenue Series B
7.50%, 3/1/15 ........................... AA- 1,000 1,027,060
Chicago O'Hare International Airport Special
Facility Revenue 8.85%, 5/1/18 .......... BB+ 835 885,543
Cook County Series A 5%, 11/15/28
(FGIC Insured) .......................... AAA 2,000 1,692,500
Illinois Development Finance Authority
Pollution Control Revenue Series B
7.60%, 9/1/13 ........................... A+ 2,000 2,054,180
Illinois Health Facilities Authority Revenue
Series C 7%, 4/1/08 (FSA Insured) ....... AAA 1,100 1,236,125
Illinois Housing Development Authority
Residential Mortgage Revenue Series A
7%, 8/1/17 .............................. AA 70 70,214
Metropolitan Pier & Exposition Authority
Revenue Unrefunded 6.50%, 6/15/07
(FGIC Insured) .......................... AAA 30 32,250
----------
7,507,247
----------
See Notes to Financial Statements
36
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
INDIANA--3.7%
Indianapolis Public Local Improvement
Revenue Series C 0%, 1/1/03 ............. A(b) $2,500 $2,162,500
Indianapolis Public Local Improvement
Revenue Series A 0%, 2/1/05 ............. Aa(b) 1,765 1,370,081
----------
3,532,581
----------
KENTUCKY--3.2%
Kentucky State Turnpike Authority Economic
Development Revenue 0%, 1/1/10
(FGIC Insured) .......................... AAA 3,300 1,947,000
Perry County Solid Waste Disposal Revenue
7%, 6/1/24 .............................. NR 1,000 1,035,000
----------
2,982,000
----------
LOUISIANA--1.5%
Louisiana Environmental Facilities Community
Development Revenue 5.25%, 12/1/18
(AMBAC Insured) ......................... AAA 1,500 1,406,250
St. Tammany Public Transportation Financing
Authority Revenue Series A 7%, 6/1/02
(FNMA Collateralized) ................... Aaa(b) 47 48,174
----------
1,454,424
----------
MARYLAND--0.6%
Baltimore General Obligation 7%, 10/15/09
(MBIA Insured) .......................... AAA 500 573,750
MASSACHUSETTS--3.8%
Massachusetts Bay Transportation Authority
Revenue Series B 6.20%, 3/1/16 .......... AA- 1,000 1,050,000
Massachusetts State Industrial Financing
Agency Revenue 0%, 8/1/05 ............... A+ 1,100 827,750
Massachusetts State Turnpike Authority
Highway Revenue 5%, 1/1/39
(AMBAC Insured) ......................... AAA 2,000 1,667,500
----------
3,545,250
----------
MICHIGAN--2.7%
St. Johns Public Schools 5.10%, 5/1/25
(FGIC Insured) .......................... AAA 1,000 898,750
Williamston Michigan Community School
General Obligation 5.50%, 5/1/25
(MBIA Insured) .......................... AAA 1,725 1,640,906
----------
2,539,656
----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
MISSISSIPPI--1.7%
Lowndes County Solid Waste Disposal &
Pollution Control Revenue Project A
6.80%, 4/1/22 ........................... A $1,450 $1,578,687
NEVADA--1.8%
Clark County School District General Obligation
Series B 0%, 6/1/03 (MBIA Insured) ...... AAA 2,000 1,697,500
NEW JERSEY--1.7%
Camden County Municipal Utilities Authority
Sewer Revenue Bond Series B 0%, 9/1/11
(FGIC Insured) .......................... AAA 3,000 1,582,500
NEW YORK--9.0%
New York State Dormitory Authority Revenue
Series U Pre-refunded 6.375%, 7/1/08 .... BBB+ 575 613,094
Niagara Falls Bridge Commission Toll Revenue
Series B 5.25%, 10/1/15 (FGIC Insured) .. AAA 4,000 3,870,000
Port Authority of New York & New Jersey
Special Obligation Revenue 6.75%, 10/1/11 NR 3,000 3,161,250
Suffolk County Industrial Development
Agency Revenue 5.50%, 1/1/23 ............ NR 1,000 878,750
----------
8,523,094
----------
NORTH CAROLINA--1.6%
North Carolina Municipal Power Agency
Revenue Bond 6%, 1/1/09 (AMBAC
Insured) ................................ AAA 1,385 1,469,831
PENNSYLVANIA--9.3%
Delaware Valley Regional Finance Authority
Revenue Series B 5.70%, 7/1/27 (AMBAC
Insured) ................................ AAA 2,000 1,945,000
New Castle Area Hospital Authority Revenue
Series A 6.50%, 11/15/09 ................ Baa(b) 1,000 1,013,750
Pennsylvania Economic Development Financing
Authority Resource Recovery Revenue
Series A 6.40%, 1/1/09 .................. BBB- 1,500 1,520,625
Pennsylvania State Finance Authority Revenue
6.60%, 11/1/09 .......................... A 4,000 4,280,000
----------
8,759,375
----------
SOUTH CAROLINA--2.4%
Spartanburg Sanitation Sewer Revenue
Series B 5%, 3/1/24 ..................... AAA 2,520 2,220,750
TENNESSEE--1.6%
Metropolitan Government Nashville & Davidson
County Health & Educational Facilities Board
Revenue 6%, 12/1/16 (AMBAC Isured) ...... AAA 1,500 1,556,250
See Notes to Financial Statements
37
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
TEXAS--5.0%
Alliance Airport Authority Special Facilities
Revenue 7%, 12/1/11 ..................... BBB- $1,100 $1,192,125
Colorado River Municipal District Water
Revenue Pre-refunded 8.25%, 1/1/15 ...... NR 540 562,432
Hurst Euless Bedford Independent School
District General Obligation 4.75%, 8/15/28 AAA 2,000 1,625,000
San Antonio Electric & Gas Revenue
5%, 2/1/12 .............................. AA 20 19,300
San Antonio Electric & Gas Revenue
Pre-refunded 5%, 2/1/12 ................. AA 15 14,588
Texas State Public Finance Authority Building
Revenue 6.25%, 8/1/09 (MBIA Insured) .... AAA 1,250 1,350,000
----------
4,763,445
----------
VIRGINIA--6.3%
Pittsylvania County Industrial Development
Authority Revenue Series A 7.30%, 1/1/04 NR 935 961,881
Pittsylvania County Industrial Development
Authority Revenue Series A 7.45%, 1/1/09 NR 3,000 3,142,500
Upper Occoquan Regional Sewer Authority
Revenue Series A 5.15%, 7/1/20
(MBIA Insured) .......................... AAA 2,000 1,867,500
----------
5,971,881
----------
WEST VIRGINIA--3.2%
Upshur County Solid Waste Disposal Revenue
7%, 7/15/25 ............................. NR 2,000 2,070,000
West Virginia State Housing Development
Fund Revenue 6.625%, 7/1/20
(FHA Insured) ........................... AA 1,000 1,001,620
----------
3,071,620
----------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ---------- -----------
WISCONSIN--1.7%
Wisconsin State Clean Water Revenue
Series 1 6.875%, 6/1/11 ................. AA+ $ 750 $ 852,188
Wisconsin State Health & Education Facilities
Authority Revenue 5.125%, 8/15/28 ....... A- 1,000 805,000
----------
1,657,188
----------
OTHER TERRITORIES--1.7%
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Series V
6.625%, 7/1/12 .......................... A 1,500 1,584,375
- -----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $89,169,932) 91,940,814
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.4%
(IDENTIFIED COST $89,169,932) 91,940,814
- -----------------------------------------------------------------------------
SHORT TERM OBLIGATIONS--1.5%
FEDERAL AGENCY SECURITIES--1.5%
Federal Home Loan Mortgage Corp.
Discount Note 5.61%, 12/1/99 ............ 1,420 1,420,000
- -----------------------------------------------------------------------------
TOTAL SHORT TERM OBLIGATIONS
(IDENTIFIED COST $1,420,000) 1,420,000
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $90,589,932) 93,360,814(a)
Cash and receivables, less liabilities--1.1% 1,059,543
----------
NET ASSETS--100.0% ...................... $94,420,357
==========
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $4,467,906 and gross
depreciation of $1,604,930 for federal income tax purposes. At November 30,
1999, the aggregate cost of securities for federal income tax purposes was
$90,497,838.
(b) As rated by Moodys, Fitch or Duff & Phelps.
(c) Variable or step coupon security; interest rate reflects the rate currently
in effect.
(d) 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 buyers. At November 30, 1999, these
securities amounted to a value of $3,762,237 or 4.0% of net assets.
At November 30, 1999, 44.2% of the net assets in the fund 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, 16.5%.
See Notes to Financial Statements
38
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
ASSETS
Investment securities at value
(Identified cost $90,589,932) $ 93,360,814
Cash 651
Receivables
Interest 1,381,576
Fund shares sold 12,250
Prepaid expense 2,127
-------------
Total assets 94,757,418
-------------
LIABILITIES
Payables
Dividend distributions 70,945
Fund shares repurchased 120,587
Investment advisory fee 35,153
Distribution fee 23,038
Transfer agent fee 19,485
Financial agent fee 10,208
Trustees' fee 4,258
Accrued expenses 53,387
-------------
Total liabilities 337,061
-------------
NET ASSETS $94,420,357
=============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $95,075,415
Distributions in excess of net investment income (70,944)
Accumulated net realized loss (3,354,996)
Net unrealized appreciation 2,770,882
-------------
NET ASSETS $94,420,357
=============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $88,769,711) 8,623,917
Net asset value per share $10.29
Offering price per share $10.29/(1-4.75%) $10.80
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $5,650,646) 546,267
Net asset value and offering price per share $10.34
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999
INVESTMENT INCOME
Interest $ 5,533,088
-----------
Total investment income 5,533,088
-----------
EXPENSES
Investment advisory fee 473,237
Distribution fee, Class A 246,387
Distribution fee, Class B 66,090
Financial agent fee 116,414
Transfer agent 101,381
Professional 28,160
Registration 23,574
Printing 23,347
Custodian 17,025
Trustees 17,000
-----------
Total expenses 1,112,615
-----------
NET INVESTMENT INCOME 4,420,473
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (2,933,039)
Net realized loss on future contracts (40,144)
Net change in unrealized appreciation (depreciation)
on investments (5,382,317)
-----------
NET LOSS ON INVESTMENTS (8,355,500)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,935,027)
===========
See Notes to Financial Statements
39
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/99 11/30/98
------------- ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 4,420,473 $ 5,725,389
Net realized gain (loss) (2,973,183) (409,566)
Net change in unrealized appreciation (depreciation) (5,382,317) 1,555,273
------------- ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (3,935,027) 6,871,096
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (4,019,480) (5,342,324)
Net investment income, Class B (222,784) (259,422)
Net realized gains, Class A -- (96,887)
Net realized gains, Class B -- (4,637)
In excess of net investment income, Class A (713,626) (566,555)
In excess of net investment income, Class B (39,554) (27,512)
------------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (4,995,444) (6,297,337)
------------- ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,486,070 and 3,799,813 shares, respectively) 15,836,073 42,705,753
Net asset value of shares issued from reinvestment of distributions
(241,813 and 286,921 shares,respectively) 2,604,501 3,230,781
Cost of shares repurchased (2,685,504 and 5,491,445 shares, respectively) (28,673,824) (61,903,573)
------------- ------------
Total (10,233,250) (15,967,039)
------------- ------------
CLASS B
Proceeds from sales of shares (131,152 and 259,511 shares, respectively) 1,434,341 2,940,057
Net asset value of shares issued from reinvestment of distributions
(9,781 and 12,310 shares, respectively) 105,939 139,134
Cost of shares repurchased (216,909 and 166,434 shares, respectively) (2,327,791) (1,874,018)
------------- ------------
Total (787,511) 1,205,173
------------- ------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (11,020,761) (14,761,866)
------------- ------------
NET DECREASE IN NET ASSETS (19,951,232) (14,188,107)
NET ASSETS
Beginning of period 114,371,589 128,559,696
------------- ------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF
($70,944) AND ($114,135), RESPECTIVELY) $ 94,420,357 $114,371,589
============= ============
</TABLE>
See Notes to Financial Statements
40
<PAGE>
Phoenix-Goodwin Tax-Exempt Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
YEAR ENDED NOVEMBER 30
-----------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.21 $11.17 $11.28 $11.40 $10.09
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.52 0.57 0.59 0.60 0.61
Net realized and unrealized gain (loss) (0.92) 0.20 0.05 (0.12) 1.34
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.40) 0.77 0.64 0.48 1.95
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.44) (0.53) (0.59) (0.60) (0.61)
Dividends in excess of net investment income (0.08) (0.11) -- -- --
Dividends from net realized gains -- (0.09) (0.16) -- (0.03)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.52) (0.73) (0.75) (0.60) (0.64)
------ ------ ------ ------ ------
Change in net asset value (0.92) 0.04 (0.11) (0.12) 1.31
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.29 $11.21 $11.17 $11.28 $11.40
====== ====== ====== ====== ======
Total return(1) (3.66)% 5.75% 6.04% 4.30% 19.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $88,770 $107,371 $122,763 $136,558 $147,821
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.01% 0.97% 0.96% 0.94% 0.97%
Net investment income (loss) 4.25% 4.77% 5.36% 5.42% 5.65%
Portfolio turnover 18% 14% 15% 27% 25%
CLASS B
----------------------------------------------------
YEAR ENDED NOVEMBER 30
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Net asset value, beginning of period $11.25 $11.22 $11.32 $11.44 $10.12
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.45 0.48 0.50 0.52 0.53
Net realized and unrealized gain (loss) (0.93) 0.19 0.06 (0.12) 1.35
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.48) 0.67 0.56 0.40 1.88
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.37) (0.45) (0.50) (0.52) (0.53)
Dividends in excess of net investment income (0.06) (0.10) -- -- --
Dividends from net realized gains -- (0.09) (0.16) -- (0.03)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.43) (0.64) (0.66) (0.52) (0.56)
------ ------ ------ ------ ------
Change in net asset value (0.91) 0.03 (0.10) (0.12) 1.32
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.34 $11.25 $11.22 $11.32 $11.44
====== ====== ====== ====== ======
Total return(1) (4.35)% 4.97% 5.13% 3.60% 19.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $5,651 $7,001 $5,797 $4,762 $3,142
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.76% 1.69% 1.71% 1.69% 1.72%
Net investment income (loss) 3.51% 3.98% 4.60% 4.68% 4.90%
Portfolio turnover 18% 14% 15% 27% 25%
<FN>
(1) Maximum sales charges are not reflected in the total return calculation.
</FN>
</TABLE>
See Notes to Financial Statements
41
<PAGE>
INVESTMENTS AT NOVEMBER 30, 1999
SHARES VALUE
---------- -----------
COMMON STOCK--97.0%
BANKS (REGIONAL)--3.3%
UnionBanCal Corp .................................... 254,730 $11,224,041
BIOTECHNOLOGY--4.6%
MedImmune, Inc.(b) .................................. 129,120 15,518,610
BROADCASTING (TELEVISION, RADIO & CABLE)--8.3%
AMFM, Inc.(b) ....................................... 199,800 14,123,362
EchoStar Communications Corp.(b) .................... 211,500 13,972,219
-----------
28,095,581
-----------
COMMUNICATIONS EQUIPMENT--9.6%
American Tower Corp., Class A(b) .................... 359,560 9,393,505
Comverse Technology, Inc.(b) ........................ 120,000 14,505,000
General Motors Corp. Class H(b) ..................... 87,500 7,492,187
TeleCorp PCS, Inc.(b) ............................... 33,550 1,209,897
-----------
32,600,589
-----------
COMPUTERS (HARDWARE)--3.8%
Copper Mountain Networks, Inc.(b) ................... 43,870 3,660,403
Extreme Networks, Inc.(b) ........................... 140,080 9,297,810
-----------
12,958,213
-----------
COMPUTERS (SOFTWARE & SERVICES)--11.6%
Ariba, Inc.(b) ...................................... 35,000 6,319,687
Exodus Communications, Inc.(b) ...................... 84,540 9,114,469
Redback Networks Inc.(b) ............................ 52,500 7,346,719
VERITAS Software Corp.(b) ........................... 181,440 16,613,100
-----------
39,393,975
-----------
SHARES VALUE
---------- -----------
ELECTRONICS (SEMICONDUCTORS)--20.6%
LSI Logic Corp.(b) .................................. 244,540 $14,779,386
PMC-Sierra, Inc.(b) ................................. 114,990 11,851,157
RF Micro Devices, Inc.(b) ........................... 203,800 13,845,663
SDL, Inc.(b) ........................................ 89,190_ 14,515,673
Xilinx, Inc.(b) ..................................... 168,170 15,051,215
-----------
70,043,094
-----------
EQUIPMENT (SEMICONDUCTOR)--10.4%
KLA-Tencor Corp.(b) ................................. 173,620 14,681,741
Lam Research Corp.(b) ............................... 125,000 9,703,125
Teradyne, Inc.(b) ................................... 250,000 10,890,625
-----------
35,275,491
-----------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)--2.6%
VISX, Inc.(b) ....................................... 115,000 8,919,688
OIL & GAS (DRILLING & EQUIPMENT)--5.7%
Nabors Industries, Inc.(b) .......................... 355,690 9,448,015
Weatherford International, Inc.(b) .................. 287,000 10,027,063
-----------
19,475,078
-----------
PAPER & FOREST PRODUCTS--1.3%
Smurfit-Stone Container Corp.(b) .................... 222,700 4,273,056
RETAIL (COMPUTERS & ELECTRONICS)--3.2%
Tandy Corp .......................................... 140,970 10,801,826
RETAIL (SPECIALTY-APPAREL)--2.4%
TJX Companies, Inc. (The) ........................... 305,600 8,002,900
See Notes to Financial Statements
45
<PAGE>
Phoenix-Seneca Mid Cap Fund
SHARES VALUE
---------- -----------
SERVICES (ADVERTISING/MARKETING)--4.1%
Outdoor Systems, Inc.(b) ............................ 316,450 $14,082,025
SERVICES (COMMERICAL & CONSUMER)--5.5%
Crown Castle International Corp.(b) ................. 223,200 4,701,150
Gemstar International Group, Ltd.(b) ................ 125,000 14,093,750
-----------
18,794,900
-----------
- -----------------------------------------------------------------------------
TOTAL COMMON STOCK
(IDENTIFIED COST $231,422,771) 329,459,067
- -----------------------------------------------------------------------------
FOREIGN COMMON STOCKS--0.4%
PAPER & FOREST PRODUCTS--0.4%
Grupo Industrial Durango S.A. (Mexico)(b) ........... 128,600 1,374,413
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $1,231,077) 1,374,413
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.4%
(IDENTIFIED COST $232,653,848) 330,833,480
- -----------------------------------------------------------------------------
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
----------- ----- -----------
SHORT-TERM OBLIGATIONS--3.8%
FEDERAL AGENCY SECURITIES--2.4%
Federal Home Loan Bank Discount Note
5.57% 12/1/99 ........................... $1,860 $ 1,860,000
Federal Home Loan Mortgage Corp.
Discount Note 5.61%, 12/1/99 ............ 6,155 6,155,000
------------
8,015,000
------------
COMMERCIAL PAPER--1.5%
Exxon Imperial, Inc. 5.50%,12/2/99 ...... A-1+ 5,000 4,999,236
- -----------------------------------------------------------------------------
TOTAL SHORT TERM OBLIGATIONS
(IDENTIFIED COST $13,014,236) ........... 13,014,236
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--101.3%
(IDENTIFIED COST $245,668,084) .......... 343,847,716(a)
Cash and receivables, less liabilities--(1.3%) (4,410,326)
------------
NET ASSETS--100.0% ...................... $339,437,390
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $101,207,738 and gross
depreciation of $3,028,106 for federal income tax purposes. At November 30,
1999, the aggregate cost of securities for federal income tax purposes was
$245,668,084.
(b) Non-income producing.
See Notes to Financial Statements
46
<PAGE>
Phoenix-Seneca Mid Cap Fund
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
ASSETS
Investment securities at value
(Identified cost $245,668,084) $ 343,847,716
Short-Term investments held as collateral for
loaned securities 11,807,420
Cash 5,659
Receivables
Fund shares sold 151,986
Interest and dividends 16,785
Prepaid expense 5,644
--------------
Total assets 355,835,210
--------------
LIABILITIES
Payables
Collateral on securities loaned 11,807,420
Investment securities purchased 2,437,331
Fund shares repurchased 1,525,248
Investment advisory fee 208,912
Transfer agent fee 118,699
Distribution fee 81,202
Financial agent fee 19,994
Trustees' fee 4,258
Accrued expenses 194,756
--------------
Total liabilities 16,397,820
--------------
NET ASSETS 339,437,390
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest 214,654,997
Accumulated net realized gain 26,602,761
Net unrealized appreciation 98,179,632
--------------
NET ASSETS $339,437,390
==============
CLASS A
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $320,459,977) 14,166,276
Net asset value per share $22.62
Offering price per share $22.62/(1-4.75%) $23.75
CLASS B
Shares of beneficial interest outstanding, $1 par value,
unlimited authorization (Net Assets $18,977,413) 885,335
Net asset value and offering price per share $21.44
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1999
INVESTMENT INCOME
Dividends $ 960,571
Interest 681,309
Security lending income 41,168
------------
Total investment income 1,683,048
------------
EXPENSES
Investment advisory fee 2,261,328
Distribution fee, Class A 712,470
Distribution fee, Class B 165,224
Financial agent fee 242,473
Transfer agent 679,651
Printing 194,303
Professional 47,023
Custodian 31,071
Registration 26,919
Trustees 17,000
Miscellaneous 17,352
------------
Total expenses 4,394,814
Custodian fees paid indirectly (8,980)
------------
Net expenses 4,385,834
------------
NET INVESTMENT LOSS (2,702,786)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities 29,467,611
Net change in unrealized appreciation (depreciation) on
investments 81,075,738
------------
NET GAIN ON INVESTMENTS 110,543,349
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $107,840,563
============
See Notes to Financial Statements
47
<PAGE>
Phoenix-Seneca Mid Cap Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
11/30/99 11/30/98
---------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment loss $ (2,702,786) $ (467,524)
Net realized gain 29,467,611 61,746,081
Net change in unrealized appreciation (depreciation) 81,075,738 (38,514,321)
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 107,840,563 22,764,236
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains, Class A (57,917,557) (33,084,355)
Net realized gains, Class B (3,411,419) (1,776,186)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (61,328,976) (34,860,541)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (3,941,723 and 2,824,332 shares, respectively) 75,023,915 55,807,991
Net asset value of shares issued from reinvestment of distributions
(3,259,092 and 1,780,474 shares, respectively) 55,010,407 32,263,501
Cost of shares repurchased (7,070,190 and 8,014,004 shares, respectively) (133,053,542) (157,423,669)
------------ ------------
Total (3,019,220) (69,352,177)
------------ ------------
CLASS B
Proceeds from sales of shares (118,234 and 92,246 shares, respectively) 2,053,280 1,729,101
Net asset value of shares issued from reinvestment of distributions
(195,577 and 96,993 shares, respectively) 3,150,463 1,705,266
Cost of shares repurchased (246,309 and 295,559 shares, respectively) (4,272,459) (5,608,396)
------------ ------------
Total 931,284 (2,174,029)
------------ ------------
DECREASE IN NET ASSETS FROM SHARE TRANSACTIONS (2,087,936) (71,526,206)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 44,423,651 (83,622,511)
NET ASSETS
Beginning of period 295,013,739 378,636,250
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $0 AND $0, RESPECTIVELY.) $339,437,390 $295,013,739
============ ============
</TABLE>
See Notes to Financial Statements
48
<PAGE>
Phoenix-Seneca Mid Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------
YEAR ENDED NOVEMBER 30
------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.90 $20.64 $21.65 $22.03 $18.03
INCOME FROM INVESTMENT OPERATIONS(4)
Net investment income (loss) (0.16)(1) 0.01 (0.02)(1) (0.03)(1) 0.05(1)
Net realized and unrealized gain (loss) 7.10 1.18 1.52 2.53 4.74
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 6.94 1.19 1.50 2.50 4.79
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.06)
Dividends from net realized gains (4.22) (1.93) (2.51) (2.88) (0.73)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (4.22) (1.93) (2.51) (2.88) (0.79)
------ ------ ------ ------ ------
Change in net asset value 2.72 (0.74) (1.01) (0.38) 4.00
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $22.62 $19.90 $20.64 $21.65 $22.03
====== ====== ====== ====== ======
Total return(2) 42.14% 6.64% 8.12% 13.52% 27.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $320,460 $279,326 $360,053 $451,474 $487,674
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.41%(3) 1.30% 1.33% 1.35% 1.42%
Net investment income (loss) (0.86)% (0.10)% (0.08)% (0.17)% 0.28%
Portfolio turnover 177% 379% 161% 242% 218%
CLASS B
------------------------------------------------------
YEAR ENDED NOVEMBER 30
------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.18 $20.11 $21.30 $21.85 $17.97
INCOME FROM INVESTMENT OPERATIONS(4)
Net investment income (loss) (0.28)(1) (0.18) (0.16)(1) (0.18)(1) (0.12)(1)
Net realized and unrealized gain (loss) 6.76 1.18 1.47 2.51 4.75
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 6.48 1.00 1.31 2.33 4.63
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.02)
Dividends from net realized gains (4.22) (1.93) (2.50) (2.88) (0.73)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (4.22) (1.93) (2.50) (2.88) (0.75)
------ ------ ------ ------ ------
Change in net asset value 2.26 (0.93) (1.19) (0.55) 3.88
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $21.44 $19.18 $20.11 $21.30 $21.85
====== ====== ====== ====== ======
Total return(2) 41.06% 5.80% 7.27% 12.75% 26.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $18,977 $15,688 $18,583 $17,599 $10,908
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.16%(3) 2.04% 2.08% 2.11% 2.18%
Net investment income (loss) (1.61)% (0.85)% (0.85)% (0.92)% (0.58)%
Portfolio turnover 177% 379% 161% 242% 218%
<FN>
(1) Computed using average shares outstanding.
(2) Maximum sales charges are not reflected in total return calculation.
(3) The ratio of expenses to average net assets excludes the effect of expense
offsets for custodian fees; if expense offsets were included, the ratio
would not significantly differ.
(4) 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.
</FN>
</TABLE>
See Notes to Financial Statements
49
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
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, five Funds are offered for sale: International Fund, Real Estate
Securities Fund, Emerging Markets Bond Fund, Tax-Exempt Bond Fund and Mid Cap
Fund. Each Fund has distinct investment objectives. The International Fund seeks
a high total return consistent with reasonable risk through investment in an
internationally diversified portfolio of equity securities. The Real Estate
Securities Fund seeks capital appreciation and income with approximately equal
emphasis. The Emerging Markets Bond Fund seeks to achieve high current income
with a secondary objective of long-term capital appreciation. The Tax-Exempt
Bond Fund seeks as high a level of current income exempt from federal income
taxation as is consistent with preservation of capital. The Mid Cap Fund seeks
as its investment objective long-term appreciation of capital.
The Trust offers both Class A and Class B shares on each Fund and one
additional class of shares, Class C on International Fund and Emerging Markets
Bond Fund. 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. 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 Fund 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 Fund 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 Fund which amortizes both premiums and discounts over the life
of the respective securities using the effective interest method.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund 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 Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund 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.
50
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999 (CONTINUED)
F. FORWARD CURRENCY CONTRACTS:
The International Fund, Emerging Markets Bond Fund and Mid Cap Fund may
enter 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 Fund as an unrealized gain (or loss). When the
contract is closed or offset with the same counterparty, the Fund 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 Fund (other than Real Estate
Securities Fund) 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 Funds 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 Funds 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 Fund as
unrealized gains or losses. When the contract is closed, the Fund 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 Fund 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 Fund (other than Real Estate Securities Fund), may write covered
options or purchase options contracts for the purpose of hedging against changes
in the market value of the underlying securities or foreign currencies.
Each Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are reported as a liability in the Statement of Assets and Liabilities
and subsequently marked to market to reflect the current value of the option.
The risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Funds may purchase options which are included in the Fund's Schedule of
Investments and subsequently marked to market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
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 Fund) loans
securities to qualified brokers through an agreement with State Street Bank &
Trust (the Custodian) and Brown Brothers, Harriman, custodian for the
International Fund. 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
51
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999 (CONTINUED)
securities or in the foreclosure on collateral. At November 30, 1999, the Trust
had the following market value of security loans and collateral:
Value of
Securities Value of
on Loan Collateral
------------ -------------
Mid Cap Fund ............................. $11,498,566 $11,807,420
K. EXPENSES:
Expenses incurred by the Trust with respect to any two or more Funds are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund 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 Fund, are entitled to a fee, based upon the following annual rates as
a percentage of the average daily net assets of each Fund:
1st $1-2 $2+
$1 Billion Billion Billion
---------- ------- -------
International Fund................ 0.75% 0.70% 0.65%
Real Estate Securities Fund....... 0.75% 0.70% 0.65%
Emerging Markets Bond Fund........ 0.75% 0.70% 0.65%
Tax-Exempt Bond Fund.............. 0.45% 0.40% 0.35%
Mid Cap Fund...................... 0.75% 0.70% 0.65%
The respective Advisers have agreed to reimburse the Real Estate Securities
Fund to the extent that total expenses (excluding interest, taxes, brokerage
fees and commissions, and extraordinary expenses) exceed 1.30% of the average
daily net assets for Class A shares, and 2.05% of the average daily net assets
for Class B shares.
Aberdeen Fund Managers, Inc. ("Aberdeen") is subadvisor to the
International Fund, 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 Fund up to $1 billion,
0.35% between $1 billion and $2 billion, and 0.325% in excess of $2 billion.
Seneca Capital Management LLC ("Seneca") is subadvisor to the Mid Cap Fund,
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 0.325% of the average daily net assets of the Mid Cap Fund.
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 $97,677
for Class A shares and deferred sales charges of $391,750 for Class B shares and
$10,658 for Class C shares for the year ended November 30, 1999. 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, 1999, $1,060,487
was retained by the Distributor and $1,310,508 was paid out to unaffiliated
Participant and $236,380 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Trust, 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, 1999, transfer
agent fees were $1,462,961 of which PEPCO retained $539,147 which is net of fees
paid to State Street.
At November 30, 1999 PHL and its affiliates held Phoenix Multi-Portfolio
Fund shares which aggregated the following:
Aggregate
Net Asset
Shares Value
--------- -----------
International Fund
--Class C ........................... 7,809 $ 114,402
Real Estate Securities Fund
--Class A ........................... 540,778 6,088,044
--Class B ........................... 12,840 141,754
Emerging Markets Bond Fund
--Class A ........................... 2,083,489 16,042,865
--Class B ........................... 17,508 113,061
Tax-Exempt Bond Fund
--Class A ........................... 280 2,881
52
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999 (CONTINUED)
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities during the year ended November 30, 1999
(excluding U.S. Government and agency securities, short-term securities, futures
contracts and forward currency contracts) aggregated the following:
Purchases Sales
------------ -------------
International Fund ........................ $138,573,761 $188,343,642
Real Estate Securities Fund ............... 7,915,943 17,436,749
Emerging Markets Bond Fund ................ 312,790,341 290,272,126
Tax-Exempt Bond Fund ...................... 18,896,871 31,875,971
Mid Cap Fund .............................. 510,742,458 579,956,383
4. FORWARD CURRENCY CONTRACTS
As of November 30, 1999, the Emerging Market Bond Fund had entered into the
following forward currency contracts which contractually obligate the Fund to
deliver/buy currencies at specified dates:
Net
In Unrealized
Contracts Exchange Settlement Appreciation
To Deliver/Buy For Date Value (Depreciation)
- ------------------ ------------- ------- ---------- --------------
JPY 1,300,000 US 11,194 3/6/00 $ 9,409 $ (1,785)
JPY 164,750,000 US 1,396,444 3/14/00 1,648,870 252,426
JPY (164,920,000) US (1,458,179) 3/14/00 (1,648,870) (190,691)
---------
$ 59,950
=========
JPY = Japanese Yen
US = U.S. Dollar
5. 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.
6. CAPITAL LOSS CARRYOVERS
The following Funds have capital loss carryovers which may be used to
offset future capital gains.
Real Estate Emerging Tax-Exempt
Securities Markets Bond
Expiration Date Fund Fund Fund
--------------- ----------- -------- ----------
2006 ................................ $ 70,513 $42,839,795 $ 381,648
2007 ................................ 1,889,262 3,990,182 2,973,348
----------- ----------- ----------
Total ............................. $1,959,775 $46,829,977 $3,354,996
=========== =========== ==========
7. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, each Fund has recorded
several reclassifications in the capital accounts. These reclassifications have
no impact on the net asset value of the Funds and are designed generally to
present undistributed income and realized gains on a tax basis which is
considered to be more informative to the shareholder. As of November 30, 1999,
the Funds recorded the following reclassifications to increase (decrease) the
accounts listed below:
Capital paid
Undistributed Accumulated in on shares
net investment net realized of beneficial
income gain (loss) interest
-------------- ------------- --------------
International Fund $ 471,438 $ (669,276) $ 197,838
Real Estate Securities Fund 4,061 0 (4,061)
Emerging Markets Bond Fund (386,459) 460,452 (73,993)
Tax-Exempt Bond Fund 618,162 (29,724) (588,438)
Mid Cap Fund 2,702,786 (2,703,765) 979
TAX NOTICE (UNAUDITED)
For the fiscal year ended November 30, 1999, the Tax-Exempt Bond Fund
distributed $4,161,165 of exempt-interest dividends. For the fiscal year ended
November 30, 1999, the following Funds distributed long-term capital gains
dividends as follows:
International Fund............................. $19,429,556
Mid Cap Fund................................... 34,894,348
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.
53
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[GRAPHIC OMITTED]
PRICEWATERHOUSECOOPERS
To the Trustees and Shareholders of
Phoenix Multi-Portfolio Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedules of investments (except for bond ratings), and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Aberdeen International Fund, the Phoenix-Duff & Phelps Real Estate
Securities Fund, the Phoenix-Goodwin Emerging Markets Bond Fund, the
Phoenix-Goodwin Tax-Exempt Bond Fund and the Phoenix-Seneca Mid Cap Fund
(formerly known as Phoenix International Portfolio, Phoenix Real Estate
Securities Portfolio, Phoenix Emerging Markets Bond Portfolio, Phoenix
Tax-Exempt Bond Portfolio and Phoenix Mid Cap Portfolio) (constituting the
Phoenix Multi-Portfolio Fund, hereafter referred to as the "Fund") at November
30, 1999, and the results of each of their operations for the year then ended,
the changes in each of their net assets for each of the two years in the period
then ended and the financial highlights for each of the fiscal 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, 1999 by correspondence with the custodians and brokers, provide a
reasonable basis for the opinion expressed above.
/S/PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
January 14, 2000
54
<PAGE>
PHOENIX MULTI-PORTFOLIO FUND
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a.* Agreement and Declaration of Trust of the Registrant, dated
August 17, 2000, filed via Edgar herewith.
b.* Bylaws of the Registrant filed via Edgar herewith.
c. Reference is made to Registrant's Agreement and Declaration of
Trust. See Exhibit a.
d.1 Form of Investment Advisory Agreement between the Registrant
and Phoenix Investment Counsel, Inc. covering the Phoenix
Goodwin Tax-Exempt Bond Fund and Phoenix-Aberdeen International
Fund, filed via EDGAR as Exhibit 5.1 with Post-Effective
Amendment No. 20, on March 28, 1997, and incorporated
herein by reference.
d.2 Investment Advisory Agreement between Registrant and Phoenix
Realty Securities, Inc. dated February 28, 1995, and assigned
March 2, 1998 to Duff & Phelps Investment Management Co., filed
via EDGAR as Exhibit 5.2 with Post-Effective Amendment No. 23
on March 27, 1998, and incorporated herein by reference.
d.3 Subadvisory Agreement dated November 19, 1997 among the
Registrant, Phoenix Realty Securities, Inc. and Duff & Phelps
Investment Management Co., covering the Phoenix-Duff & Phelps
Real Estate Securities Fund, filed via EDGAR as Exhibit 5.4
with Post-Effective Amendment No. 23 on March 27, 1998, and
incorporated herein by reference.
d.4 Subadvisory Agreement dated October 27, 1998 between Registrant
and Aberdeen Fund Managers Inc., covering Phoenix-Aberdeen
International Fund, filed via EDGAR as Exhibit d.5 with Post-
Effective Amendment No. 24 on January 27, 1999, and
incorporated herein by reference.
d.5 Form of Investment Advisory Agreement between Registrant and
Phoenix Investment Counsel, Inc. covering Phoenix-Seneca Tax
Sensitive Growth Fund, filed via EDGAR as Exhibit d.6 with
Post-Effective Amendment No. 29 on February 28, 2000 and
incorporated herein by reference.
d.6 Form of Subadvisory Agreement between Phoenix Investment
Counsel, Inc. and Seneca Capital Management, LLC covering
Phoenix-Seneca Tax Sensitive Growth Fund, filed via EDGAR as
Exhibit d.7 with Post-Effective Amendment No. 29 on February
28, 2000 and incorporated herein by reference.
e.1 Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation dated November 19, 1997, filed via EDGAR
as Exhibit 6.1 with Post-Effective Amendment No. 22 on January
26, 1998, and incorporated herein by reference.
e.2 Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, filed via EDGAR as Exhibit 6.2 with
Post-Effective Amendment No. 23 on March 27, 1998, and
incorporated herein by reference.
e.3 Form of Supplement to Phoenix Family of Funds Sales Agreement,
filed via EDGAR as Exhibit 6.3 with Post-Effective Amendment
No. 22 on January 26, 1998, and incorporated herein by
reference.
e.4 Form of Financial Institution Sales Contract for the Phoenix
Family of Funds, filed via EDGAR as Exhibit 6.4 with Post-
Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
f. None.
g.1 Custodian Contract between Registrant and State Street Bank and
Trust Company dated May 1, 1997, filed via EDGAR as Exhibit 8.1
with Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
g.2 Custodian Agreement between Registrant and Brown Brothers
Harriman & Co. covering the Phoenix International Portfolio,
filed via EDGAR as Exhibit 8.2 with Post-Effective Amendment
No. 20, on March 28, 1997, and incorporated herein by
reference.
h.1 Amended and Restated Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation dated
November 19, 1997 and filed via EDGAR as Exhibit 9.1 with
Post-Effective Amendment No. 23 on March 27, 1998 and
incorporated herein by reference.
h.2 Transfer Agency and Service Agreement between Registrant and
Phoenix Equity Planning Corporation, filed via EDGAR as Exhibit
9.2 with Post-Effective Amendment No. 20 and incorporated
herein by reference.
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<PAGE>
h.3 Sub-Transfer Agency Agreement between Phoenix Equity Planning
Corporation and State Street Bank and
Trust Company, filed via EDGAR as Exhibit 9.3 with Post-
Effective Amendment No. 20, and incorporated herein by
reference.
h.4 First Amendment to Financial Agent Agreement between Registrant
and Phoenix Equity Planning Corporation dated March 23, 1998,
filed via EDGAR with Post-Effective Amendment No. 26 on
September 20, 1999, and incorporated herein by reference.
h.5 Second Amendment to Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation dated July
31, 1998, filed via EDGAR with Post-Effective Amendment No. 26
on September 20, 1999, and incorporated herein by reference.
i.* Opinion and Consent of Counsel filed via EDGAR herewith.
j.* Consent of Independent Accountants filed via EDGAR herewith.
k. Not applicable.
l. Initial Capital Agreement, filed via EDGAR as Exhibit 13 with
Post-Effective Amendment No. 22 on January 26, 1998, and
incorporated herein by reference.
m.1 Class A Shares Amended and Restated Distribution Plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940, filed
via EDGAR as Exhibit 15.1 with Post-Effective Amendment No. 22
on January 26, 1998, and incorporated herein by reference.
m.2 Class B Shares Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940, filed via EDGAR with Post
Effective Amendment No. 30 on September 11, 2000 and
incorporated herein by reference.
m.3 Class C Shares Distribution Plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940, filed via EDGAR with Post
Effective Amendment No. 30 on September 11, 2000 and
incorporated herein by reference.
n.27 Financial Data Schedules.
o.1 Amended and Restated Rule 18f-3 Multi-Class Distribution Plan,
effective December 1, 1998, filed via EDGAR with Post-Effective
Amendment No. 29 on February 28, 2000 and incorporated herein
by reference.
o.2 First Amendment to the Amended and Restated Rule 18f-3 Plan,
dated February 24, 2000, filed via EDGAR with Post-Effective
Amendment No. 29 on February 28, 2000 and incorporated herein
by reference.
p.1 Codes of Ethics of the Trust, Advisers, Subadvisors, and
Distributors filed via EDGAR with Post Effective Amendment No.
30 on September 11, 2000 and incorporated herein by reference.
q.1 Power of Attorney for Mr. Roth, filed via EDGAR with Post-
Effective Amendment No. 24 on January 27, 1999 and incorporated
herein by reference.
q.2 Powers of Attorney for all other Trustees filed via EDGAR with
Post Effective Amendment No. 30 on September 11, 2000 and
incorporated herein by reference.
--------------
* Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None.
ITEM 25. INDEMNIFICATION
The Agreement and Declaration of Trust dated August 17, 2000 and the By-Laws
of the Registrant provide that no trustee or officer will be indemnified against
any liability to which the Registrant would otherwise be subject by reason of or
for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties. The Management Agreement, Underwriting Agreement, Custody
Agreement and Transfer Agency Agreement each provides that the Trust will
indemnify the other party (or parties, as the case may be) to the agreement for
certain losses.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a
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<PAGE>
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISERS
See "Management of the Fund" in the Prospectus and "The Investment Advisers"
and "Trustees and Officers" in the Statement of Additional Information for
information regarding the business of the Advisers. For information as to the
business, profession, vocation or employment of a substantial nature of
directors and officers of the Advisers, reference is made to the Advisers'
current Form ADV (SEC File Nos. 801-5995 (PIC) and 801-14813 (DPIM)) filed under
the Investment Advisers Act of 1940, incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITER
(a) Equity Planning also serves as the principal underwriter for the
following other registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities Fund,
Phoenix-Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix Equity Series Fund, Phoenix-Euclid Funds, Phoenix-Goodwin California Tax
Exempt Bond Fund, Phoenix Investment Trust 97, Phoenix Multi-Series Trust,
Phoenix-Oakhurst Income & Growth Fund, Phoenix-Oakhurst Strategic Allocation
Fund, Phoenix-Seneca Funds, Phoenix Series Fund, Phoenix Strategic Equity Series
Fund, Phoenix-Zweig Trust, Phoenix Home Life Variable Universal Life Account,
Phoenix Home Life Variable Accumulation Account, PHL Variable Accumulation
Account, Phoenix Life and Annuity Variable Universal Life Account and PHL
Variable Separate Account MVA1.
(b) Directors and executive officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Trustee and President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480
William R. Moyer Director, Executive Vice Vice President
56 Prospect St. President, Chief Financial
P.O. Box 150480 Officer and Treasurer
Hartford, CT 06115-0480
John F. Sharry President, Executive
56 Prospect St. Retail Distribution Vice President
P.O. Box 150480
Hartford, CT 06115-0480
Barry Mandinach Executive Vice President, None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President, None
56 Prospect Street Chief Sales Officer
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Senior Vice President, Secretary
101 Munson Street Mutual Fund
P.O. Box 810 Customer Service
Greenfield, MA 01302-0810
Robert S. Driessen Vice President, Compliance Vice President and
56 Prospect Street Assistant Secretary
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include Registrant's investment
advisers, Phoenix Investment Counsel, Inc. and Duff & Phelps Investment
Management Co.; Registrant's financial agent, transfer agent and principal
underwriter, Phoenix Equity Planning Corporation; Registrant's dividend
disbursing agent, State Street Bank and Trust Company; and Registrant's
custodians, State Street Bank and Trust Company and Brown Brothers Harriman &
Co. (custodian for the Phoenix-Aberdeen International Fund). The address of the
Secretary of the Trust is 101 Munson Street, Greenfield, Massachusetts 01301;
the address of Phoenix Investment Counsel, Inc. is 56 Prospect Street, Hartford,
Connecticut 06115; and Duff & Phelps Investment Management Co. is 55 East Monroe
Street, Suite 3600, Chicago, Illinois 60603; the address of Phoenix Equity
Planning Corporation is 56 Prospect Street, P.O. Box 150480, Hartford CT
06115-0480; the address of the dividend disbursing agent is P.O. Box 8301,
Boston, Massachusetts 02266-8301, Attention: Phoenix Funds; the address of
custodian State Street Bank and Trust Company is P.O. Box 351, Boston,
Massachusetts 02101; and the address for the custodian of the Phoenix-Aberdeen
International Fund is Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts 02109.
ITEM 29. MANAGEMENT SERVICES
None.
ITEM 30. UNDERTAKINGS
None.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund certifies that it meets all of the
requirements for effectiveness of this registration statement under rule 485(b)
under the Securities Act and has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Hartford, and State of Connecticut on the 30th day of November, 2000.
PHOENIX MULTI-PORTFOLIO FUND
ATTEST: /s/ Pamela S. Sinofsky By: /s/ Philip R. McLoughlin
-------------------------- --------------------------
Pamela S. Sinofsky Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities indicated, on this 30th day of November, 2000.
SIGNATURE TITLE
--------- -----
Trustee
---------------------------------------
Robert Chesek*
Trustee
---------------------------------------
E. Virgil Conway*
/s/ Nancy G. Curtiss Treasurer (principal
--------------------------------------- financial and
Nancy G. Curtiss accounting officer)
Trustee
---------------------------------------
Harry Dalzell-Payne*
Trustee
---------------------------------------
Francis E. Jeffries*
Trustee
---------------------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin Trustee and
--------------------------------------- President
Philip R. McLoughlin
Trustee
---------------------------------------
Everett L. Morris*
Trustee
---------------------------------------
James M. Oates*
Trustee
---------------------------------------
Herbert Roth, Jr.*
Trustee
---------------------------------------
Richard E. Segerson*
Trustee
---------------------------------------
Lowell P. Weicker, Jr.*
*By /s/ Philip R. McLoughlin
----------------------------------------
* Philip R. McLoughlin, Attorney-in-fact pursuant to powers of attorney.
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