[cover]
APRIL 30, 1996
Phoenix Multi-Sector
Fixed Income Fund, Inc.
Semiannual Report
PHOENIX
SEMIANNUAL REPORT
[logo]
PHOENIX
DUFF&PHELPS
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[THIS PAGE INTENTIONALLY LEFT BLANK]
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PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
MARKET AND PORTFOLIO REVIEW
Fund Description:
Phoenix Multi-Sector Fixed Income Fund invests in a wide variety of
fixed-income securities. These securities may include U.S. treasury, agency,
corporate and yankee bonds, as well as mortgage-backed and asset-backed
securities. The Fund emphasizes the most undervalued sectors of the market
and de-emphasizes the most overvalued sectors.
Investment Environment:
Over the last six months, the outlook for the U.S. economy has shifted
dramatically. At year-end 1995, the consensus opinion on Wall Street was for
continued slow economic growth and benign inflation. During the first quarter
of 1996, however, a number of reports were released which suggested
construction markets were firming, job growth was up and the nation's
factories were busier. Bond investors reacted negatively to these new signs
of economic growth, pushing interest rates higher and bond prices lower.
Although some of these fears have moderated as of late, these
brighter-than-expected economic reports may have dampened hopes that the
Federal Reserve will cut short-term rates again anytime soon.
Portfolio Review:
Despite a difficult bond market environment, the Fund posted excellent
results over this latest reporting cycle. For the six-month period ended
April 30, 1996, the Fund's Class A shares provided a total return of 4.76%
and Class B shares returned 4.30%. This compares with the market's return of
0.53% as measured by the Lehman Brothers Aggregate Bond Index. All of these
returns assume reinvestment of any distributions but exclude the effect of
sales charges. The Fund's strong performance was due primarily to its
overweighting in emerging markets debt, high-yield corporate bonds,
commercial mortgage-backed securities and tax-free municipals.
Outlook:
Our outlook for the bond market remains cautiously optimistic. In the
fixed-income marketplace, we believe traditional bond sectors still appear
overvalued, while less traditional sectors offer significant opportunity. We
expect to maintain our focus on emerging markets and are finding attractive
valuations in countries such as Brazil, Argentina, Indonesia and Mexico.
Taxable municipal bonds also appear to be attractive as yield spreads remain
considerably above comparably rated corporate debt. In the mortgage-backed
sector, we are focusing on commercial and non-agency residential
mortgage-backed securities. Lastly, we continue to de-emphasize agency
mortgage-backed securities and investment-grade corporates, as yield spreads
remain historically tight.
With the potential for future increases in interest rates and slowing
corporate profits, we believe 1996 will be a challenging year for financial
markets. Although some level of caution is clearly warranted, we are still
finding attractive opportunities and will use the market's recent volatility
to our advantage. Moving ahead, we will continue our strategy of focusing on
undervalued fixed-income market sectors that we believe offer the best total
return potential.
INVESTMENTS AT APRIL 30, 1996
(Unaudited)
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -------------
U.S. GOVERNMENT SECURITIES--11.4%
U.S. Treasury Notes--6.3%
U.S. Treasury Notes
5%, '99 AAA $ 1,500 $ 1,455,467
U.S. Treasury Notes
6.25%, '01 AAA 6,000 5,966,250
U.S. Treasury Notes
5.625%, '06 AAA 8,500 7,881,081
U.S. Treasury Notes
6%, '26 AAA 4,500 4,002,188
-----------
19,304,986
-----------
Agency Mortgage-Backed Securities--5.1%
FHLMC 9%, '04 NR 111 112,145
FHLMC 7.50%, '18 NR 581 585,371
FHLMC 8.75%, '20 AAA $ 549 $ 560,115
FNMA 8.70%, '16 AAA 968 995,036
FNMA 6.65%, '17 AAA 1,000 974,599
FNMA 6.50%, '18 AAA 1,000 968,519
FNMA 7%, '07-'21 AAA 834 794,038
GNMA 9%, '21-'25 AAA 10,161 10,690,881
-----------
15,680,704
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $35,148,535) 34,985,690
-----------
NON-CONVERTIBLE BONDS--46.3%
Chemical--Specialty--0.8%
Borden Chemical & Plastics
9.50%, '05 BB+ 2,500 2,518,750
-----------
See Notes to Financial Statements
1
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -------------
Hospital Management & Services--1.2%
Tenet Healthcare Corp.
9.625%, '02 BB $3,500 $ 3,753,750
-----------
Insurance--0.6%
Middletown Trust Notes Series C
0%, '10 A+ 1,600 1,909,387
-----------
Non-Agency Mortgage-Backed Securities--35.2%
Airplanes Pass Through Trust 1D
10.875%, '19 BB 3,780 3,940,650
Bear Stearns Mortgage Sec., Inc.
93-6, M 7.10%, '24 AA 3,471 3,256,399
Bear Stearns Mortgage Sec., Inc.
95-1, 1B3 144A 6.4812%, '10 (c) BB(d) 683 557,876
Citicorp Mortgage Securities
91-9, B 9%, '21 AAA 1,600 1,611,000
DLJ Mortgage Acceptance 94-M11,
B1 8.10%, '04 Baa(d) 5,000 4,968,750
FDIC REMIC 94-C1, 2D 8.70%, '25 A(d) 7,000 7,183,750
Fund America Structured Trust
144A 96-1, A 0%, '26 (c) Baa(d) 3,000 2,067,187
Green Tree Financial Corp. 93-2,
B 8%, '18 Baa(d) 5,000 4,920,312
Green Tree Financial Corp. 93-3,
A3 5.20%, '18 Aa(d) 2,865 2,813,072
Green Tree Financial Corp. 94-1,
B2 7.85%, '19 Baa(d) 2,000 1,987,813
Green Tree Financial Corp. 96-3,
B1 7.70%, '27 BBB+ 2,600 2,573,188
Kidder Peabody Acceptance Corp.
93-6, B4 144A 7.7841%, '23 (c) BBB 4,211 3,919,055
Kidder Peabody Acceptance Corp.
93-M3, D 6.50%, '25 Baa(d) 2,147 1,965,847
Kidder Peabody Acceptance Corp.
94-C1, B 6.85%, '06 AA 2,000 1,949,375
Merrill Lynch Mortgage, Inc.
95-C2, C 7.79%, '21 A(d) 970 969,618
National Car Rental 96-1, A-2
6.80%, '99 Aa(d) 2,000 1,995,625
Prudential Home Mortgage 93-H,
4B 144A 6.759%, '08 (c) Baa(d) 5,084 4,626,714
Prudential Home Mortgage 93-L,
3B2 144A 6.641%, '23 (c) Baa(d) 3,270 3,040,078
Prudential Home Mortgage 93H, B2
144A 6.759%, '08 (c) Aa(d) 3,082 2,933,434
Prudential Home Mortgage 94-32,
M 8.25%, '24 Aa(d) $2,931 $ 2,923,769
Prudential Home Mortgage 144A
95-F, B1 6.625%, '24 (c) Ba(d) 1,289 966,998
Residential Funding Corp.
93-S29, M3 7%, '08 BBB(d) 597 565,501
Resolution Trust Corp. 92-C3, B
9.05%, '23 AA 3,607 3,684,757
Resolution Trust Corp. 92-C7,
A1C 7.90%, '23 Aa(d) 763 760,815
Resolution Trust Corp. 92-C8, D
8.835%, '23 BBB- 4,516 4,552,664
Resolution Trust Corp. 93-C3, A4
6.55%, '24 Aaa(d) 1,406 1,399,763
Resolution Trust Corp. 94-C1, D
8%, '26 BBB 5,615 5,543,478
Resolution Trust Corp. 94-C2, C
8%, '25 A 3,400 3,409,562
Resolution Trust Corp. 94-C2, D
8%, '25 BBB 5,311 5,249,774
Resolution Trust Corp. 95-1, C2
7.50%, '28 BBB 3,814 3,736,610
Resolution Trust Corp. 95-C2, C
7%, '27 A(d) 2,941 2,804,636
Ryland Mortgage Security Corp.
III 92-A, 1A 8.33%, '30 A- 400 397,703
SASC 93-C1, B 6.60%, '24 A+ 5,000 4,537,783
SASC 95-C1, B 7.375%, '24 AA 5,344 5,203,720
White Hall Partners 95-C1, B
7.43%, '25 AA(d) 5,000 4,972,656
-----------
107,989,932
-----------
Oil--0.4%
Petropower Funding 144A 7.36%,
'14 (c) BBB 1,450 1,356,142
-----------
Paper & Forest Products--1.6%
Buckeye Cellulose Corp. 8.50%,
'05 BB- 5,000 4,837,500
-----------
Publishing, Broadcasting, Printing & Cable--1.9%
Continental Cablevision 144A
8.30%, '06 (c) BB+ 4,000 4,120,000
Lenfest Communications 8.375%,
'05 BB+ 1,000 940,000
Rogers Communications, Inc.
9.125%, '06 BB- 800 765,000
-----------
5,825,000
-----------
See Notes to Financial Statements
2
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Phoenix Multi-Sector Fixed Income Fund, Inc.
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -------------
Retail--Food--0.6%
ARA Services, Inc. 10.625%, '00 BBB- $ 54 $ 59,737
Rini Rego Supermarkets, Inc.
9.75%, '01 (b) NR 2,000 1,880,000
-----------
1,939,737
-----------
Telecommunications Equipment--1.4%
Paging Network 10.125%, '07 B 2,000 2,065,000
Panamsat L.P. 9.75%, '00 BB- 2,000 2,097,500
-----------
4,162,500
-----------
Textile & Apparel--1.0%
Westpoint Stevens 9.375%, '05 B+ 3,000 2,947,500
-----------
Utility--Electric--1.6%
California Energy Co. 0%, '04
(f) BB- 5,000 4,787,500
Rural Electric Cooperative
9.73%, '17 AAA 140 152,597
-----------
4,940,097
-----------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $143,428,780) 142,180,295
-----------
FOREIGN NON-CONVERTIBLE BONDS--8.3%
Chile--1.6%
CSAV 144A 7.375%, '03 (c) BBB 5,000 4,825,000
-----------
Colombia--1.6%
Centragas Yankee 144A 10.65%,
'10 (c) BBB- 4,826 5,043,527
-----------
Indonesia--1.9%
Asia Pulp & Paper Co. Yankee
11.75%, '05 BB 6,000 5,850,000
-----------
Mexico--2.5%
Grupa IRSA Guaranteed Med Term
Euro 8.375%, '98 NR 5,000 4,850,000
MCTTR Toll Revenue 144A 11%, '02
(c) NR 4,651 2,813,614
-----------
7,663,614
-----------
Peru--0.7%
Peru Citibank Non- performing
Loans 0%, '49 NR 2,500 2,040,625
-----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $27,192,974) 25,422,766
-----------
FOREIGN GOVERNMENT SECURITIES--20.4%
Argentina--7.1%
Argentina Bocon Pre1 Euro
3.4716%, '01 (f) NR $ 3,000 $ 3,045,000
Argentina Bocon Pre4 Euro
5.44531%, '02 (f) NR 3,400 3,089,750
Republic of Argentina Bearer FRB
6.3125%,
'05 (f) BB- 20,295 15,500,306
-----------
21,635,056
-----------
Brazil--5.2%
Republic of Brazil, interest
capitalization, Series C Euro
8%, '14 (f) B+ 21,107 12,709,322
Republic of Brazil Discount
Series Z-L Euro 6.50%, '24 (f) B+ 5,000 3,384,375
-----------
16,093,697
-----------
Colombia--0.6%
Republic of Colombia Yankee
7.25%, '04 BBB- 2,000 1,865,000
-----------
Ecuador--0.9%
Ecuador Bearer PDI, 6.06%, '15
(f) NR 2,083 922,592
Ecuador Reg'd PDI, 6.06%, '15
(f) NR 4,165 1,845,184
-----------
2,767,776
-----------
Mexico--4.1%
United Mexican Discount B Euro
6.76563%, '19 (e)(f) BB 4,800 3,849,000
United Mexican States Discount A
6.39844%,
'19 (e)(f) BB 6,550 5,252,281
United Mexican States Series A
Euro 6.25%, '19 (e) BB 5,270 3,478,200
-----------
12,579,481
-----------
Morocco--0.7%
Morocco R&C Agreement Series A
6.59375%,
'09 (f) NR 3,000 2,161,875
-----------
Panama--0.8%
Panama PDI WI, '49 (g) NR 4,250 2,326,875
-----------
Poland--1.0%
Poland PDI B 3.75%, '14 (f) BBB- 4,000 3,080,000
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $58,893,848) 62,509,760
-----------
See Notes to Financial Statements
3
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
-------- ------ -------------
MUNICIPAL BONDS--10.0%
Alabama--0.2%
Alabama Agriculture/
Mechanical Univ. 5.50%, '20 AAA $ 810 $ 766,292
-----------
California--1.6%
Fresno Pension Obligation 7.80%,
'14 AAA 1,500 1,540,995
Long Beach Pension 7.09%, '09 AAA 3,500 3,362,800
-----------
4,903,795
-----------
Florida--2.7%
Palm Beach Waste Revenue Project
B 10.50%, '11 NR 3,750 3,828,112
University Miami Exchange
Revenue A 7.65%, '20 (h) AAA 4,500 4,374,720
-----------
8,202,832
-----------
New York--1.4%
Beth Israel Medical Center,
Taxable 7.58%, '15 AAA 4,750 4,550,120
-----------
Pennsylvania--3.4%
Pennsylvania Economic
Development 9.50%, '12 NR 6,200 6,281,220
Pennsylvania Financial
Development 6.75%, '07 NR 4,050 4,073,936
-----------
10,355,156
-----------
Virginia--0.7%
Pittsylvania County Series B
7.65%, '10 NR 1,900 2,057,852
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $30,382,469) 30,836,047
-----------
CONVERTIBLE BONDS--1.8%
Entertainment, Leisure & Gaming--1.0%
Comcast Corp. Cv. 1.125%, '07 BB- $6,000 $ 2,925,000
-----------
Healthcare--Diversified--0.8%
Sandoz Capital BVI Ltd. Cv. 144A
2%, '02 (c) NR 2,400 2,574,000
-----------
TOTAL CONVERTIBLE BONDS
(Identified cost $5,614,846) 5,499,000
-----------
TOTAL LONG-TERM INVESTMENTS--98.2%
(Identified cost $300,661,452) 301,433,558
-----------
SHORT-TERM OBLIGATIONS--0.7%
Commercial Paper--0.7%
Anheuser-Busch Cos., Inc. 5.32%,
5-1-96 A-1+ 570 570,000
Anheuser-Busch Cos., Inc. 5.27%,
5-20-96 A-1+ 1,470 1,465,911
-----------
2,035,911
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,035,911) 2,035,911
-----------
TOTAL INVESTMENTS--98.9%
(Identified cost $302,697,363) 303,469,469(a)
Cash and receivables, less liabilities--1.1% 3,313,902
-----------
NET ASSETS--100.0% $306,783,371
===========
(a)Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $8,910,682 and gross
depreciation of $9,168,830 for income tax purposes. At April 30, 1996, the
aggregate cost of securities for federal income tax purposes was
$303,727,617. At October 31, 1995, the Fund had capital loss carryforwards
aggregating $19,795,685 available to offset future gains and expiring as
follows: $2,412,682 in 2002 and $17,383,003 in 2003.
(b)Private Placement--see Note 4.
(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 April 30,
1996, these securities amounted to a value of $38,843,625 or 12.7% of net
assets.
(d)As rated by Moody's, Fitch, or Duff & Phelp's.
(e)Mexico Value Recovery Euro Rights (16,961,000 shares) incorporated as a
unit.
(f)Variable or step coupon bond; interest rate shown reflects the rate
currently in effect.
(g)When issued.
(h)Segregated as collateral for the when issued obligation.
See Notes to Financial Statements
4
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996
(Unaudited)
Assets
Investment securities at value
(Identified cost $302,697,363) $303,469,469
Cash 2,162
Receivables
Investment securities sold 2,959,884
Fund shares sold 202,726
Interest 7,675,660
-----------
Total assets 314,309,901
-----------
Liabilities
Payables
Investment securities purchased 6,052,647
Fund shares repurchased 647,533
Income distribution payable 367,404
Distribution fee 150,123
Investment advisory fee 139,839
Transfer agent fee 74,353
Financial agent fee 7,646
Directors' fee 5,024
Accrued expenses 81,961
-----------
Total liabilities 7,526,530
-----------
Net Assets $306,783,371
===========
Net Assets Consist of:
Capital paid in on shares of capital stock $323,119,525
Undistributed net investment income 16,986
Accumulated net realized loss (17,125,246)
Net unrealized appreciation 772,106
-----------
Net Assets $306,783,371
===========
Class A
Shares of capital stock outstanding,
$0.10 par value, 250,000,000 shares
authorized (Net Assets $166,617,367) 13,143,645
Net asset value per share $12.68
Offering price per share
$12.68/(1-4.75%) $13.31
Class B
Shares of capital stock outstanding, $0.10
par value, 250,000,000 shares authorized
(Net Assets $140,166,004) 11,070,698
Net asset value and offering price per share $12.66
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996
(Unaudited)
Investment Income
Interest $13,540,549
----------
Total investment income 13,540,549
----------
Expenses
Investment advisory fee 857,103
Distribution fee--Class A 210,924
Distribution fee--Class B 714,673
Financial agent fee 46,751
Transfer agent 248,764
Custodian 44,448
Professional 27,131
Printing 23,716
Registration 22,726
Directors 9,055
Miscellaneous 6,360
----------
Total expenses 2,211,651
----------
Net investment income 11,328,898
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 2,801,986
Net change in unrealized appreciation
(depreciation) on investments (50,520)
----------
Net gain on investments 2,751,466
----------
Net increase in net assets resulting from
operations $14,080,364
==========
See Notes to Financial Statements
5
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
April 30, Ended
1996 October 31,
(Unaudited) 1995
------------ ---------------
<S> <C> <C>
From Operations
Net investment income $ 11,328,898 $ 23,759,674
Net realized gain (loss) 2,801,986 (17,445,818)
Net change in unrealized appreciation (depreciation) (50,520) 31,680,763
---------- -------------
Increase in net assets resulting from operations 14,080,364 37,994,619
---------- -------------
From Distributions to Shareholders
Net investment income--Class A (6,305,952) (12,901,571)
Net investment income--Class B (4,819,545) (10,373,226)
---------- -------------
Decrease in net assets resulting from distributions to shareholders (11,125,497) (23,274,797)
---------- -------------
From Share Transactions
Class A
Proceeds from sales of shares (3,616,556 and 2,352,653 shares,
respectively) 46,332,444 28,484,405
Net asset value of shares issued from reinvestment of distributions
(301,968 and 654,268 shares, respectively) 3,856,607 7,837,803
Cost of shares repurchased (4,225,088 and 4,039,172 shares, respectively) (54,008,791) (48,234,621)
---------- -------------
Total (3,819,740) (11,912,413)
---------- -------------
Class B
Proceeds from sales of shares (534,549 and 887,773 shares, respectively) 6,832,672 10,692,887
Net asset value of shares issued from reinvestment of distributions
(138,730 and 308,741 shares, respectively) 1,769,958 3,693,059
Cost of shares repurchased (1,086,166 and 2,844,501 shares, respectively) (13,849,197) (33,893,205)
---------- -------------
Total (5,246,567) (19,507,259)
---------- -------------
Decrease in net assets from share transactions (9,066,307) (31,419,672)
---------- -------------
Net decrease in net assets (6,111,440) (16,699,850)
Net Assets
Beginning of period 312,894,811 329,594,661
---------- -------------
End of period (including undistributed net investment income of $16,986
and distributions in excess of net investment income of ($186,415),
respectively) $306,783,371 $312,894,811
========== ============
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
Six
Months
Ended
4/30/96 Year Ended October 31,
(Unaudited) 1995 1994 1993 1992 1991
-------- --------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.56 $11.94 $14.13 $13.29 $12.81 $11.11
Income from investment operations
Net investment income 0.48 0.96 0.76 1.14 1.24 1.22(2)
Net realized and unrealized gain (loss) 0.11 0.61 (1.35) 1.08 0.50 1.71
------ ------- ----- ----- ----- ------
Total from investment operations 0.59 1.57 (0.59) 2.22 1.74 2.93
------ ------- ----- ----- ----- ------
Less distributions
Dividends from net investment income (0.47) (0.95) (0.77) (1.19) (1.21) (1.23)
Dividends in excess of net investment
income -- -- (0.05) (0.02) -- --
Dividends from net realized gains -- -- (0.63) (0.17) (0.05) --
Tax return of capital -- -- (0.15) -- -- --
------ ------- ----- ----- ----- ------
Total distributions (0.47) (0.95) (1.60) (1.38) (1.26) (1.23)
------ ------- ----- ----- ----- ------
Change in net asset value 0.12 0.62 (2.19) 0.84 0.48 1.70
------ ------- ----- ----- ----- ------
Net asset value, end of period $12.68 $12.56 $11.94 $14.13 $13.29 $12.81
====== ======= ===== ===== ===== ======
Total return (1) 4.76%(4) 13.83% -4.57% 17.55% 14.11% 27.56%
Ratios/supplemental data:
Net assets, end of period (thousands) $166,617 $168,875 $172,966 $176,859 $141,627 $68,139
Ratio to average net assets of:
Operating expenses 1.07%(3) 1.10% 1.13% 1.29% 1.48% 1.50%
Net investment income 7.57%(3) 8.10% 7.05% 8.27% 9.42% 10.13%
Portfolio turnover 105%(4) 201% 123% 207% 116% 180%
</TABLE>
<TABLE>
<CAPTION>
Class B
------------------------------------------------------
Six
Months From
Ended Inception
4/30/96 Year Ended October 31, 1/3/92 to
(Unaudited) 1995 1994 1993 10/31/92
-------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.54 $11.93 $14.10 $13.25 $13.02
Income from investment operations
Net investment income 0.43 0.86 0.68 1.04 0.94
Net realized and unrealized gain (loss) 0.12 0.61 (1.36) 1.08 0.21
------ ----- ----- ----- -------
Total from investment operations 0.55 1.47 (0.68) 2.12 1.15
------ ----- ----- ----- -------
Less distributions
Dividends from net investment income (0.43) (0.86) (0.67) (1.08) (0.92)
Dividends in excess of net investment
income -- -- (0.05) (0.02) --
Dividends from net realized gains -- -- (0.63) (0.17) --
Tax return of capital -- -- (0.14) -- --
------ ----- ----- ----- -------
Total distributions (0.43) (0.86) (1.49) (1.27) (0.92)
------ ----- ----- ----- -------
Change in net asset value 0.12 0.61 (2.17) 0.85 0.23
------ ----- ----- ----- -------
Net asset value, end of period $12.66 $12.54 $11.93 $14.10 $13.25
====== ===== ===== ===== =======
Total return (1) 4.30%(4) 12.96% -5.21% 16.78% 8.81%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) $140,166 $144,020 $156,629 $193,064 $82,522
Ratio to average net assets of:
Operating expenses 1.81%(3) 1.85% 1.78% 1.99% 2.18%(3)
Net investment income 6.83%(3) 7.30% 6.46% 7.36% 8.47%(3)
Portfolio turnover 105%(4) 201% 123% 207% 116%
</TABLE>
(1)Maximum sales charges are not reflected in the total return calculation.
(2)Includes reimbursement of operating expenses by investment adviser of
$0.04.
(3)Annualized
(4)Not annualized
See Notes to Financial Statements
7
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Multi-Sector Fixed Income Fund, Inc. (the "Fund") is organized as a
Maryland corporation and is registered under the Investment Company Act of
1940, as amended, as a diversified open-end management investment company.
The Fund's investment objective is to maximize current income consistent with
the preservation of capital by investing in fixed income securities. The Fund
offers both Class A and Class B shares. Class A shares are sold with a
front-end sales charge of up to 4.75%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on
the period of time the shares are held. Both classes of shares have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that each class bears different distribution expenses and
has exclusive voting rights with respect to its distribution plan. Income and
expenses of the Fund are borne pro rata by the holders of both classes of
shares, except that each class bears distribution expenses unique to that
class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. 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:
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service, approved by the Directors, which utilizes
information with respect to market transactions in comparable securities,
quotations from dealers, and various relationships between securities in
determining value. Short-term investments having a remaining maturity of less
than 61 days are valued at amortized cost which approximates market. All
other securities and assets are valued at their fair value as determined in
good faith by or under the direction of the Directors.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Discounts and premiums are amortized to income
using the effective interest method. Realized gains and losses are determined
on the identified cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the
Internal Revenue Code (the "Code") applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. In addition, the 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 to shareholders are declared and recorded daily. 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 expiring capital loss
carryforwards, foreign currency gain/loss, partnerships, and losses deferred
due to wash sales and excise tax regulations. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid in capital.
E. Foreign currency translation:
Foreign securities, other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at
the trade date. The gain or loss resulting from a change in currency exchange
rates between the trade and settlement dates of a portfolio transaction, is
treated as a gain or loss on foreign currency. Likewise, the gain or loss
resulting from a change in currency exchange rates, between the date income
is accrued and paid, is treated as a gain or loss on foreign currency. The
Fund does not separate that portion of the results of operations arising from
changes in exchange rates and that portion arising from changes in the market
prices of securities.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect majority-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.55% for the first $1 billion of the average
daily net assets of the Fund.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp.
("PEPCO"), an indirect majority-owned subsidiary of PHL, has advised the Fund
that it retained net selling commissions of $41,262 for Class A shares and
deferred sales charges of $236,343 for Class B shares for the six months
ended April 30, 1996. In addition, the Fund pays PEPCO a distribution fee at
an annual rate of 0.25% for Class A shares and 1.00% for Class B shares of
the average daily net assets of the Fund. The Distribution Plan for Class A
shares provides for fees to be paid up to
8
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (Unaudited) (Continued)
a maximum on an annual basis of 0.30%; the Distributor has voluntarily agreed
to limit the fee to 0.25%. The Distributor has advised the Fund that of the
total amount expensed for the six months ended April 30, 1996, $576,763 was
earned by the Distributor and $348,834 was earned by unaffiliated
participants.
As Financial Agent of the Fund, PEPCO receives a fee at an annual rate of
0.03% of the average daily net assets of the Fund for bookkeeping,
administration and pricing services. PEPCO serves as the Fund's Transfer
Agent with State Street Bank and Trust Company as sub-transfer agent. For the
six months ended April 30, 1996, transfer agent fees were $248,764 of which
PEPCO retained $95,248 which is net of the fees paid to State Street.
At April 30, 1996, PHL and affiliates held 10,364 Class A shares and 11
Class B shares of the Fund with a combined value of $131,558.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for the
six months ended April 30, 1996, aggregated $319,649,419 and $316,205,095,
including $140,942,652 and $158,870,171, of U.S. Government securities,
respectively.
4. PRIVATE PLACEMENTS
At April 30, 1996, the Fund held the following securities which were private
placements and represented 0.6% (at market value) of the net assets of the
Fund:
Acquisition
Security Date Cost
- ------------------------------ --------- ---------
Rini Rego Supermarkets, Inc.
9.75%, '01 11/11/91 $824,213
Rini Rego Supermarkets, Inc.
9.75%, '01 1/16/92 888,029
The Fund will bear any costs, including those involved in registration under
the Securities Act of 1933, in connection with the disposition of such
securities.
This report is authorized for use by other than shareholders only when
accompanied or preceded by the delivery of a current prospectus showing the
sales charge and other material information.
9
<PAGE>
PHOENIX MULTI-SECTOR FIXED
INCOME FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
Directors
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael E. Haylon, Executive Vice President
David L. Albrycht, Vice President
James M. Dolan, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
National Securities & Research Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005-1208
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Phoenix Multi-Sector Fixed Income Fund, Inc.
P.O. Box 2200
Enfield, CT 06083-2200
[indicia]
Bulk Rate Mail
U.S. Postage
PAID
Springfield, MA
Permit No. 444
[logo]
PHOENIX
DUFF&PHELPS
PDP 741 (6/96)
[logo]
DALBAR
HONORS COMMITMENT TO
INVESTORS
1995
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