<PAGE>
April 30, 1998
P H O E N I X
F U N D S
SEMIANNUAL REPORT
PHOENIX MULTI-SECTOR
FIXED INCOME FUND, INC.
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
-----------------------------------------------------
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to investment
risks, including possible loss of the principal
invested.
-----------------------------------------------------
<PAGE>
CHAIRMAN'S
MESSAGE
Dear Phoenix Funds Shareholder:
I'm pleased to make you aware that we recently changed
our corporate name to Phoenix Investment Partners, Ltd. We
feel this new name better fits the growing investment
management firm we have been building and reflects our
commitment to partnership and excellence in serving the
financial needs of investors like you.
Over the past year, we have added several of the
industry's most experienced and talented money managers to
our team to provide you with a wider variety of quality
investment products. Phoenix Investment Partners offers you
access to the distinct investment styles of independent
money managers across the U.S. and around the world:
Aberdeen Fund Managers, Inc.
Duff & Phelps Investment Management Co.
Phoenix Investment Counsel, Inc.
Roger Engemann & Associates, Inc.
Seneca Capital Management LLC
Classic Value group, led by Chris Bertelsen
Quantitative Value group, led by Steve Colton and Dong
Hao Zhang
As always, we are committed to providing you with sound
investments and outstanding service--now with even more
choices, including value-style mutual funds. To learn more
about our new partners and their distinctive investment
styles, contact your financial advisor or call a marketing
specialist at 1-800-243-4361.
Sincerely,
[SIGNATURE]
Philip R. McLoughlin
PRESIDENT, PHOENIX FUNDS
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- -------------------------------------------------------------------
INVESTOR PROFILE
Phoenix Multi-Sector Fixed Income Fund is designed for moderately risk-averse
investors seeking to maximize current income consistent with preservation of
capital.
INVESTMENT ADVISER'S REPORT
Phoenix Multi-Sector Fixed Income Fund continued to provide investors with
above-average returns. For the six months ended April 30, 1998, Class A shares
returned 6.98%, Class B shares returned 6.60%, Class C shares returned 6.66%,
and Class M shares returned 6.85% compared with 3.59% for the Lehman Brothers
Aggregate Bond Index.* All performance figures assume reinvestment of dividends
and exclude the effect of sales charges.
The Fund's overweighting in such non-conventional sectors as commercial
mortgages, nonagency mortgages, and taxable municipal issues contributed
positively to performance. Our focus on sovereign debt issues of Latin America
and Eastern Europe, especially Brazil and Bulgaria, also helped performance. As
spreads narrowed, we took profits in some of the portfolio's more
credit-sensitive residential mortgage holdings. Foreign investing involves
special risks, such as currency fluctuation, less public disclosure as well as
economic and political risks.
OUTLOOK
Given our outlook for moderate growth and benign inflation in the United
States, we will continue to emphasize domestic high-yield issues. The emphasis
will be on telecommunications carriers and oil and gas exploration and
production companies based on the improving fundamentals in this sector.
We also believe that emerging markets offer attractive opportunities for
long-term appreciation. Our focus is on identifying emerging countries that are
experiencing the types of improvements in their infrastructure associated with a
better standard of living.
The portfolio will continue to maintain a duration that is neutral to the
benchmark. As of April 30, 1998 the Fund's duration was 4.8 years.
* The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond performance. The Index is not available for direct investment.
2
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--0.4%
U.S. TREASURY BONDS--0.4%
U.S Treasury Notes 5.50%, 2/15/08........ AAA $ 1,500 $ 1,480,890
---------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $1,486,204)........................................ 1,480,890
---------------
AGENCY SECURITIES--0.0%
AGENCY MORTGAGE-BACKED SECURITIES--0.0%
FHLMC 8.75%, 3/15/20..................... AAA 100 100,536
---------------
TOTAL AGENCY SECURITIES
(Identified cost $103,557).......................................... 100,536
---------------
MUNICIPAL BONDS--4.7%
CALIFORNIA--0.1%
Fresno California Pension Obligation
7.80%, 6/1/14 (f)...................... AAA 500 556,875
---------------
COLORADO--0.8%
Denver City and County School District 01
Taxable 6.76%, 12/15/07 (f)............ AAA 3,000 3,105,000
---------------
FLORIDA--1.4%
Palm Beach Waste Revenue Project B
Taxable 10.50%, 1/1/11 (l)............. NR 3,750 2,925,000
University of Miami Exchangeable Revenue
Series A Taxable 7.65%, 4/1/20......... AAA 1,965 2,058,338
---------------
4,983,338
---------------
ILLINOIS--0.9%
Illinois Educational Facilities Authority
Revenue - Loyola University Series A
Convertible 5.70%, 7/1/24 (f).......... AAA 1,200 1,234,500
Illinois Educational Facilities Authority
Revenue - Loyola University Series A
Taxable 7.84%, 7/1/24.................. AAA 1,800 1,937,250
---------------
3,171,750
---------------
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
PENNSYLVANIA--1.5%
Pennsylvania Economic Development 9.50%,
1/1/12................................. NR $ 3,500 $ 2,380,000
Pittsburgh PA Taxable Pension 6.35%,
3/1/13 (f)............................. AAA 3,000 2,996,250
---------------
5,376,250
---------------
TOTAL MUNICIPAL BONDS
(Identified cost $18,261,456)....................................... 17,193,213
---------------
ASSET-BACKED SECURITIES--3.3%
ContiMortgage Home Equity Loan Trust
98-1B 7.86%, 4/15/29................... BBB- 8,495 8,575,968
Green Tree Financial Corp. 94-1, B2
7.85%, 4/15/19......................... Baa(c) 2,000 1,993,438
IMC Home Equity Loan Trust 7.38%
06/20/29............................... A 1,654 1,672,607
---------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $12,293,472)....................................... 12,242,013
---------------
CORPORATE BONDS--21.3%
AUTO PARTS & EQUIPMENT--0.5%
Titan Tires 144A 7%, 2/11/00 (b)......... NR 2,000 1,960,000
---------------
BANKS (MAJOR-REGIONAL)--0.6%
First Union Institutional Cap I 8.04%,
12/1/26................................ BBB+ 2,125 2,276,406
---------------
BANKS (MONEY CENTER)--0.9%
Citicorp Capital 1 7.933%, 2/15/27....... A- 3,000 3,213,750
---------------
BROADCASTING (TELEVISION RADIO CABLE)--2.7%
Fox/Liberty Networks LLC 144A 0%, 8/15/07
(b).................................... B 2,500 1,712,500
Fox/Liberty Networks LLC 144A 8.875%,
8/15/07 (b)............................ B 3,000 3,075,000
Fox Kids Worldwide 144A 10.25%, 11/1/07
(b).................................... B 7,975 5,094,031
---------------
9,881,531
---------------
COMPUTER SOFTWARE & SERVICES--0.4%
PSINET Inc. 10%, 2/15/05................. B- 1,500 1,545,000
---------------
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
DIVERSIFIED MISCELLANEOUS--0.5%
<S> <C> <C> <C>
IBJ Preferred Cap Co. 144A 8.79%,
12/29/49 (b)........................... BBB- $ 1,985 $ 1,885,407
---------------
GAMING, LOTTERY, PARIMUTUEL COS.--1.8%
Mashantucket Pequot 144A 6.91%, 9/01/12
(b).................................... AAA 1,400 1,452,500
Trump Atlantic 11.25%, 5/1/06............ B 5,000 5,000,000
---------------
6,452,500
---------------
INSURANCE (MULTI-LINE)--1.9%
Middletown Trust Notes Series C, PIK
Interest Capitalization 0%, 7/15/10
(d).................................... A+ 1,600 7,040,000
---------------
MANUFACTURING (DIVERSIFIED)--0.6%
Polymer Group 144A 8.75%, 3/1/08 (b)..... B 2,000 2,035,000
---------------
METALS MINING--0.7%
NSM Steel Ltd. 144A 12.00%, 2/1/06 (b)... B- 2,800 2,660,000
---------------
MISCELLANEOUS--0.1%
Indesco International Inc., 144A 9.75%,
4/15/08 (b)............................ B- 500 501,250
---------------
PERSONAL CARE--1.0%
Revlon Worldwide Corp. 144A 0%, 3/15/01
(b).................................... B- 4,825 3,715,250
---------------
PUBLISHING--0.5%
Century Communications 144A 0%, 1/15/08
(b).................................... BB- 4,200 1,848,000
---------------
SERVICES (COMMERCIAL & CONSUMER)--0.0%
ARA Services, Inc. 10.625%, 8/1/00....... BBB- 54 58,320
---------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.6%
Comcast Cellular 144A 9.50%, 5/1/07
(b).................................... BB+ 1,900 1,985,500
---------------
TELECOMMUNICATIONS (LONG DISTANCE)--2.9%
Hermes Europe Railtel B.V. 144A 11.50%,
8/15/07 (b)............................ B 500 568,750
RCN Corp 144A 9.80%, 2/15/08 (b)......... B(c) 9,000 5,647,500
RSL Communications PLC 10.125%, 3/1/08... B- 6,975 4,324,500
---------------
10,540,750
---------------
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
TELEPHONE--4.3%
Bell Technology Group 144A 13%, 5/1/05
(b).................................... NR $ 1,600 $ 1,616,000
Interamericas Communication Corp. Unit
144A 14%, 10/27/07 (b)(j).............. NR 3,930 4,126,500
Intermedia Communication 144A 0%, 7/15/07
(b).................................... B 4,500 3,301,875
RNC Corp. 9.80%, 2/15/08 (d)............. B(c) 2,000 1,330,000
Teligent, Inc. 11.50%, 12/1/07........... CCC 3,330 3,471,525
Teligent, Inc. 11.50%, 3/1/08............ NR 3,500 1,999,375
---------------
15,845,275
---------------
TRUCKERS & MARINE--1.3%
Hvide Marine, Inc. 8.375%, 2/15/08....... BB 2,500 2,443,750
Sea Containers 7.875%, 2/15/08........... BB- 2,500 2,471,875
---------------
4,915,625
---------------
TOTAL CORPORATE BONDS
(Identified cost $77,549,756)....................................... 78,359,564
---------------
NON-AGENCY MORTGAGE BACKED SECURITIES--22.2%
BTC Mortgage Investors Trust 144A 97-S1,
D 6.95%, 12/31/09 (b).................. BBB 3,000 3,004,687
CS First Boston Corp. 97-SPCE, D 144A
7.332%, 3/15/09 (b).................... Bbb(c) 4,928 4,961,880
CS First Boston Mortgage Securities 144A
97-1R, 1M4 7.364%, 2/28/22 (b)......... Baa(c) 6,087 6,100,509
Criimi Mae Trust I 96-C1, A2 144A 7.56%,
6/30/33 (b)............................ BBB 5,125 5,198,672
DLJ Mortgage Acceptance Corp. 97-CF2, B1
144A 7.14%, 11/15/08 (b)............... BBB- 3,900 3,908,531
First Boston Mortgage Securities Corp.
93-5, B2, 7.30%, 7/25/23............... A+(c) 3,330 3,311,726
First Chicago/Lennar Trust 97-CHL1, D
144A 8.11%, 5/29/08 (b)................ BB 4,000 4,018,750
General Growth Properties 97-C1 D2 144A
6.992%, 11/10/07 (b)................... NR 5,000 4,987,500
Imperial CMB Trust 6.95%, 11/25/29....... Aaa(c) 4,542 4,529,913
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
NON-AGENCY MORTGAGE BACKED SECURITIES--CONTINUED
<S> <C> <C> <C>
Norwest Asset Securities Corp. 96-3, B1
7.25%, 9/25/26......................... Bbb(c) $ 3,453 $ 3,493,820
Norwest Asset Securities Corp. 96-3, B2
7.25%, 9/25/26......................... Bbb(c) 2,155 2,155,804
Prudential Home Mortgage Securities 93L,
3B2 144A 6.641%, 12/25/23 (b).......... NR 4,770 4,713,356
Prudential Home Mortgage Securities 144A
96-A B1 7.958%, 5/28/26 (b)............ NR 3,125 2,927,734
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23................................ AA 2,372 2,400,973
Resolution Trust Corp. 95-C2, C 7%,
5/25/27................................ AA 11 10,622
Ryland Mortgage Securities Corp. III
92-A, 1A 8.33%, 3/29/30................ A- 338 343,565
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24...................... BBB 5,110 5,151,519
Structured Asset Securities Corp. 93-C1,
B 6.60%, 10/25/24...................... A+ 5,250 5,170,015
Structured Asset Securities Corp. 95-C4,
D 7%, 6/25/26.......................... BBB 5,450 5,439,781
Structured Asset Securities Corp. 96-C3,
C 144A 7.375%, 6/25/30 (b)............. BBB 3,500 3,540,469
Team Fleet Financing Corp. 144A 7.10%,
12/15/02 (b)........................... BBB 3,000 3,027,187
Wilshire Funding Corp. 97-WFC1, M3 7.25%,
8/25/27................................ Baa(c) 3,476 3,447,669
---------------
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(Identified cost $79,813,080)....................................... 81,844,682
---------------
FOREIGN GOVERNMENT SECURITIES--31.6%
ALGERIA--0.5%
Algeria Tranch Unaffected Loans 6.625%,
4/9/06 (d)............................. NR 909 857,955
Algeria Tranch A Loans 7.313%, 4/9/09
(d).................................... NR 1,364 1,073,864
---------------
1,931,819
---------------
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
ARGENTINA--3.9%
Argentina Govt National 8.75%, 7/10/02... BBB- $ 3,200(k) $ 2,992,359
Republic of Argentina 11.75%, 2/12/07.... BBB- 1,750(k) 1,785,214
Republic of Argentina 144A 11.75%,
2/12/07 (b)............................ BBB- 3,000(k) 3,060,367
Republic of Argentina Bocon Pro1 M1, PIK
Interest Capitalization, Flt 3.058%,
4/01/07 (d)............................ BBB- 9,029(k) 6,685,065
---------------
14,523,005
---------------
BRAZIL--4.5%
Republic of Brazil C Bond, PIK Interest
Capitalization, 8%, 4/15/14 (d)........ BB- 19,840 16,442,061
---------------
BULGARIA--1.6%
Bulgaria FLIRB Series A Bearer Euro
2.25%, 7/28/12 (d)..................... B(c) 2,000 1,345,000
Republic of Bulgaria IAB PDI Euro 6.563%,
7/28/11 (d)............................ B(c) 5,850 4,621,500
---------------
5,966,500
---------------
COLOMBIA--1.1%
Republic of Colombia 7.625%, 2/15/07..... BBB- 3,400 3,187,500
Republic of Colombia Global Bond 8.375%,
2/15/27................................ Baa(c) 750 690,937
---------------
3,878,437
---------------
CROATIA--0.9%
Croatia Series B 6.625%, 7/31/06......... BBB- 1,849 1,697,518
Croatia Series A 6.625%, 7/31/10......... BBB- 1,700 1,509,812
---------------
3,207,330
---------------
ECUADOR--1.1%
Ecuador Bearer PDI Euro, PIK Interest
Capitalization 6.625%, 2/27/15 (d)..... B(c) 5,563 3,558,805
Ecuador Registered PDI Euro, PIK Interest
Capitalization, 6.625%, 2/27/15 (d).... B(c) 556 355,881
---------------
3,914,686
---------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
IVORY COAST--0.5%
<S> <C> <C> <C>
Ivory Coast FLIRB 2.00%, 3/29/18 (d)..... NR $ 3,256 $ 1,204,720
Ivory Coast PDI Government Bonds 2.60%,
3/29/18 (d)............................ NR 1,546 649,320
---------------
1,854,040
---------------
KOREA--1.3%
Republic of Korea 8.750%, 4/15/03........ BB+ 850 854,250
Republic of Korea 8.875%, 4/15/08........ BB+ 1,665 1,641,690
South Korean Won 0%, 4/29/99............. NR 3,445 2,187,890
---------------
4,683,830
---------------
MEXICO--2.3%
United Mexican States Global Bond
11.375%, 9/15/16....................... BB 2,750 3,229,187
United Mexican States Global Bond 11.5%,
5/15/26................................ BB 4,500 5,428,125
---------------
8,657,312
---------------
PANAMA--1.1%
Republic of Panama 8.875%, 9/30/27....... BB+ 4,000 3,918,000
---------------
PERU--1.5%
Peru FLIRB 3.25%, 3/7/17 (d)............. BB 1,750 1,071,875
Peru FLIRB 144A 3.25%, 3/7/17 (b)(d)..... BB 1,500 918,750
Peru PDI 4%, 3/7/17 (d).................. BB 4,250 2,903,281
Peru PDI 144A 4%, 3/7/17 (b)(d).......... BB 980 669,463
---------------
5,563,369
---------------
POLAND--3.6%
Poland PDI Bearer 4%, 10/27/14 (d)....... BBB- 4,500 4,117,500
Poland Treasury Bill 0%, 10/7/98......... NR 5,590(g) 1,494,384
Poland Treasury Bill 0%, 10/21/98........ NR 12,570(g) 3,347,776
Poland Treasury Bill 0%, 1/13/99......... NR 9,690(g) 2,469,577
Poland Treasury Bill 0%, 2/17/99......... NR 7,620(g) 1,891,874
---------------
13,321,111
---------------
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
RUSSIA--4.2%
Russia Principal Loans 144A 6.719%,
12/15/15 (b)........................... NR $ 1,390 $ 1,001,669
Russia Principal Loans 144A 6.719%,
12/15/20 (b)(d)........................ NR 16,050 10,161,656
Russia Treasury Bill 0%, 9/12/01......... NR 19,857(h) 2,044,178
Russian Federation OFZ Linked Notes
18.29%, 9/3/99 (d)..................... NR 14,346(h) 2,311,232
---------------
15,518,735
---------------
SOUTH AFRICA--0.9%
Republic of South Africa 8.50%,
6/23/17................................ BB+ 3,500(i) 3,513,125
---------------
TURKEY--0.6%
Turkey Treasury Bill 0%, 6/4/98.......... NR 600,000,000(e) 2,182,103
---------------
VENEZUELA--2.0%
Republic of Venezuela 9.25%, 9/15/27..... B+ 8,250 7,288,875
---------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $114,276,173)...................................... 116,364,338
---------------
FOREIGN CORPORATE BONDS--8.0%
ARGENTINA--0.3%
Imagen Imasac S.A. 11%, 5/2/05........... B+ 1,000 1,002,500
---------------
BERMUDA--0.2%
AES China Generating Co. Yankee 10.125%,
12/15/06............................... BB- 870 822,150
---------------
BRAZIL--0.3%
Globo Communications Co. 144A 10.625%,
12/5/08 (b)............................ BB- 950 965,438
---------------
CANADA--0.2%
International Utility, Sr. Sub. Notes
144A 10.75%, 2/1/08 (b)................ B- 750 780,000
---------------
CHILE--1.7%
Compania Sud Amer Vapore 144A 7.375%,
12/8/03 (b)............................ BBB 5,000 4,925,000
Petropower I Funding Trust 144A 7.36%,
2/15/14 (b)............................ BBB 1,450 1,438,472
---------------
6,363,472
---------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
CHINA--0.8%
<S> <C> <C> <C>
Greater Beijing 9.25%, 6/15/04........... BB $ 2,000 $ 1,650,000
Greater Beijing 144A 9.50%, 6/15/07
(b).................................... BB 1,700 1,351,500
---------------
3,001,500
---------------
GERMANY--0.6%
Kabelmedia Holding 0%, 8/1/06 (d)........ B- 3,000 2,340,000
---------------
INDONESIA--1.2%
APP Finance VII Marritius 3.5%,
4/30/03................................ NR 2,150 2,163,437
Asia Pulp & Paper, 144A 12%, 12/29/49
(b).................................... B+ 2,370 2,061,900
---------------
4,225,337
---------------
MEXICO--1.2%
Banco Nacional de Mexico 144A 7.57%,
12/31/00 (b)........................... NR 4,400 4,424,750
---------------
NETHERLANDS--0.9%
Kazkommertsbank International 11.25%,
5/8/01................................. B+ 900 898,110
Netia Holdings 144A 0%, 11/1/07 (b)(d)... B 3,250 2,315,625
---------------
3,213,735
---------------
NIGERIA--0.4%
Nigeria Promissory Notes 5.092%,
1/5/10................................. NR 2,112 1,509,108
---------------
VENEZUELA--0.2%
Petrozuata Finance, Inc. 144A 8.22%,
4/1/17 (b)............................. BBB- 650 673,400
---------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $29,214,139)....................................... 29,321,390
---------------
FOREIGN CONVERTIBLE BONDS--1.6%
CANADA--0.2%
Petersburg Long Cv. 144A 9%, 6/1/06
(b).................................... NR 600 798,000
---------------
MEXICO--0.2%
Consorcio Groupo Dina Cv. 8%, 8/8/04..... CCC(c) 1,000 875,000
---------------
RUSSIA--1.2%
Lukinter Finance BV Reg. S 3.50%,
5/06/02................................ BB- 3,625 4,386,250
---------------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $6,651,142)........................................ 6,059,250
---------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C>
PREFERRED STOCKS--4.5%
BROADCASTING (TELEVISION RADIO CABLE)--1.3%
American Radio Systems Pfd. PIK........................... 39,480 $ 4,668,561
------------
REITS--3.2%
Home Ownership Funding 2, Step-down Pfd. 144A 13.338%
(b)..................................................... 12,250 11,854,190
------------
TOTAL PREFERRED STOCKS
(Identified cost $15,475,577).......................................... 16,522,751
------------
<CAPTION>
NUMBER
OF
CONTRACTS
-------
<S> <C> <C>
OPTIONS--0.4%
Argentina FLIRB Call Option 6/8/98 $91.45 (Par Subject to
Call $4,750,000)........................................ 5 66,320
Brazil Bond Call Options 6/5/98 $83.75 (Par Subject to
Call $11,370,058)....................................... 9.8 107,580
Brazil EI Call Option 5/13/98 $86.88 (Par Subject to Call
$9,700,000)............................................. 10 250,000
Bulgaria FLIRB A Call Option 6/5/98 $66.875 (Par Subject
to Call $4,750,000)..................................... 4.75 46,075
Bulgaria IAB Call Option 7/20/98 $79.63 (Par Subject to
Call $3,000,000)........................................ 3 47,550
Bulgaria IAB Call Option 7/20/98 $79.75 (Par Subject to
Call 3,000,000)......................................... 3 50,232
Ecuador Bear PDI Call Option 6/22/98 $63.88 (Par Subject
to Call $3,338,010)..................................... 3 75,357
Ecuador PDI Call Option 5/20/98 $63.375 (Par Subject to
Call $3,338,010)........................................ 3 51,978
Mexican Global Call Option 5/8/98 $120.75 (Par Subject to
Call $5,000,000)........................................ 5 12,805
Mexican Global Call Options 5/14/98 $122.65 (Par Subject
to Call $10,000,000).................................... 10 35,000
Peru PDI Call Option 6/9/98 $65.375 (Par Subject to Call
$5,000,000)............................................. 5 131,075
Polish Bear PDI Call Option 6/8/98 $90.375 (Par Subject to
Call $5,000,000)........................................ 5 84,675
Russian Principal Call Option 7/27/98 $62.38 (Par Subject
to Call $4,000,000)..................................... 4 132,000
Russian Principal Call Option 6/1/98 $59.94 (Par Subject
to Call $5,000,000)..................................... 5 180,000
Venezuela DCB Call Option 7/23/98 $89.10 (Par Subject to
Call $4,761,905)........................................ 5 74,820
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
CONTRACTS VALUE
------- ------------
OPTIONS--CONTINUED
<S> <C> <C>
Venezuela DCB Call Option 6/8/98 $90.13 (Par Subject to
Call $4,761,905)........................................ 5 $ 41,675
------------
TOTAL OPTIONS
(Identified cost $1,844,297)........................................... 1,387,142
------------
TOTAL LONG-TERM INVESTMENTS--98.0%
(Identified cost $356,968,853)......................................... 360,875,769
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
&
POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----- ---------- ---------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--0.2%
COMMERCIAL PAPER--0.2%
Deutsche Bank Financial 5.55%, 5/1/98.... A-1+ $ 685 $ 685,000
---------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $685,000).......................................... 685,000
---------------
TOTAL INVESTMENTS--98.2%
(Identified cost $357,653,853)...................................... 361,560,769(a)
---------------
Cash and receivables, less liabilities--1.8%........................ 6,570,194
---------------
NET ASSETS--100.0%.................................................... $368,130,963
---------------
---------------
</TABLE>
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $8,733,456 and gross
depreciation of $5,629,621 for income tax purposes. At April 30, 1998, the
aggregate cost of securities for federal income tax purposes was
$358,456,934.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1998, these securities amounted to a value of $136,974,518 or 37.2% of net
assets.
(c) As rated by Moody's, Fitch, or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Par value represents Turkey Lira.
(f) All or a portion segregated as collateral.
(g) Par value represents Polish Zloty.
(h) Par value represents Russian Rubles.
(i) Par value represents South African Rand.
(j) Rights/Warrants incorporated as a unit.
(k) Par value represents Argentine Pesos.
(l) Non-income producing.
8 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $357,653,853) $ 361,560,769
Cash 2,909
Receivables
Investment securities sold 12,351,833
Fund shares sold 1,620,172
Dividend and interest 6,234,365
--------------
Total assets 381,770,048
--------------
LIABILITIES
Payables
Investment securities purchased 11,821,830
Income distributions payable 486,947
Fund shares repurchased 853,324
Option written, at value
(premium received $29,400) --
Distribution fee 164,938
Investment advisory fee 155,573
Transfer agent fee 36,194
Financial agent fee 15,339
Directors' fee 1,760
Accrued expenses 103,180
--------------
Total liabilities 13,639,085
--------------
NET ASSETS $ 368,130,963
--------------
--------------
NET ASSETS CONSIST OF:
Capital paid in on shares of common stock $ 364,098,742
Undistributed net investment income 747,315
Accumulated net realized loss (651,410)
Net unrealized appreciation 3,936,316
--------------
TOTAL NET ASSETS $ 368,130,963
--------------
--------------
CLASS A
Shares of Class A common stock outstanding, $0.10 par value,
125,000,000 shares authorized
(Net assets $203,836,629) 15,142,256
Net asset value per share $13.46
Offering price per share $13.46/(1-4.75%) $14.13
CLASS B
Shares of Class B common stock outstanding, $0.10 par value,
125,000,000 shares authorized
(Net assets $159,323,143) 11,853,971
Net asset value and offering price per share $13.44
CLASS C
Shares of Class C common stock outstanding, $0.10 par value,
125,000,000 shares authorized
(Net assets $4,660,905) 346,581
Net asset value and offering price per share $13.45
CLASS M
Shares of Class M common stock outstanding, $0.10 par value,
125,000,000 shares authorized
(Net assets $310,286) 23,085
Net asset value price per share $13.44
Offering price per share $13.44/(1-3.50%) $13.93
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 15,054,263
Dividends 704,636
-------------
Total investment income 15,758,899
-------------
EXPENSES
Investment advisory fee 964,773
Distribution fee--Class A 242,847
Distribution fee--Class B 771,971
Distribution fee--Class C 9,844
Distribution fee--Class M 465
Financial agent fee 90,919
Transfer agent 216,180
Custodian 42,303
Registration 37,635
Printing 26,840
Professional 25,558
Directors 10,674
Miscellaneous 5,782
-------------
Total expenses 2,445,791
-------------
NET INVESTMENT INCOME 13,313,108
-------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain on securities 853,601
Net realized loss on foreign currency
transactions (9,975)
Net change in unrealized appreciation on
investments 9,389,368
Net change in unrealized appreciation on
written options 29,400
-------------
NET GAIN ON INVESTMENTS 10,262,394
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 23,575,502
-------------
-------------
</TABLE>
See Notes to Financial Statements. 9
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 13,313,108 $ 23,459,692
Net realized gain 843,626 18,266,122
Net change in unrealized appreciation/(depreciation) 9,418,768 (13,926,558)
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 23,575,502 27,799,256
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (7,817,618) (13,142,727)
Net investment income--Class B (5,642,240) (9,715,503)
Net investment income--Class C (70,047) (518)
Net investment income--Class M (7,175) (361)
Net realized gain--Class A (5,956,245) --
Net realized gain--Class B (4,765,595) --
Net realized gain--Class C (26,550) --
Net realized gain--Class M (3,854) --
-------------- -----------------
DECREASE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO
SHAREHOLDERS (24,289,324) (22,859,109)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Net proceeds from the sale of shares (1,747,187 and
4,562,676 shares, respectively) 23,403,933 62,841,128
Net asset value of shares issued from reinvestment of
distributions
(742,490 and 619,297 shares, respectively) 9,819,900 8,494,539
Cost of shares repurchased (1,528,075 and 3,789,497
shares, respectively) (20,485,655) (52,071,617)
-------------- -----------------
Total 12,738,178 19,264,050
-------------- -----------------
CLASS B
Net proceeds from the sale of shares (1,076,946 and
2,633,503 shares, respectively) 14,393,001 36,085,338
Net asset value of shares issued from reinvestment of
distributions
(398,361 and 284,957 shares, respectively) 5,253,820 3,902,825
Cost of shares repurchased (1,115,656 and 2,207,175
shares, respectively) (14,964,835) (30,270,502)
-------------- -----------------
Total 4,681,986 9,717,661
-------------- -----------------
CLASS C
Net proceeds from the sale of shares (359,357 and 21,052
shares, respectively) 4,814,179 297,100
Net asset value of shares issued from reinvestment of
distributions (5,590 and 22 shares, respectively) 74,272 303
Cost of shares repurchased (39,440 and 0 shares,
respectively) (532,767) --
-------------- -----------------
Total 4,355,684 297,403
-------------- -----------------
CLASS M
Net proceeds from the sale of shares (13,229 and 9,212
shares, respectively) 176,976 130,970
Net asset value of shares issued from reinvestment of
distributions (5,663 and 17 shares, respectively) 8,777 240
Cost of shares repurchased (36 and 0 shares, respectively) (489) --
-------------- -----------------
Total 185,264 131,210
-------------- -----------------
INCREASE IN NET ASSETS FROM SHARES TRANSACTIONS 21,961,112 29,410,324
-------------- -----------------
TOTAL INCREASE IN NET ASSETS 21,247,290 34,350,471
NET ASSETS
Beginning of period 346,883,673 312,533,202
-------------- -----------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $747,315 AND $971,287, RESPECTIVELY) $368,130,963 $ 346,883,673
-------------- -----------------
-------------- -----------------
</TABLE>
10 See Notes to Financial Statements
<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
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.50 $ 13.27 $ 12.56 $ 11.94 $ 14.13 $ 13.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.51 1.03 0.94 0.96 0.76 1.14
Net realized and unrealized gain (loss) 0.39 0.18 0.72 0.61 (1.35) 1.08
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.90 1.21 1.66 1.57 (0.59) 2.22
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.52) (0.98) (0.95) (0.95) (0.77) (1.19)
Dividends from net realized gains (0.42) -- -- -- (0.63) (0.17)
In excess of net investment income -- -- -- -- (0.05) (0.02)
Tax return of capital -- -- -- -- (0.15) --
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.94) (0.98) (0.95) (0.95) (1.60) (1.38)
--------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.04) 0.23 0.71 0.62 (2.19) 0.84
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 13.46 $ 13.50 $ 13.27 $ 12.56 $ 11.94 $ 14.13
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 6.98% 9.22% 13.75% 13.83% (4.57)% 17.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $203,837 $191,486 $169,664 $168,875 $172,966 $176,859
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.06%(3) 1.04%(2) 1.07% 1.10% 1.13% 1.29%
Net investment income 7.92%(3) 7.28% 7.56% 8.10% 7.05% 8.27%
Portfolio turnover 183% 295% 255% 201% 123% 207%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.48 $ 13.25 $ 12.54 $ 11.93 $ 14.10 $ 13.25
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.46 0.92 0.85 0.86 0.68 1.04
Net realized and unrealized gain (loss) 0.39 0.18 0.71 0.61 (1.36) 1.08
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.85 1.10 1.56 1.47 (0.68) 2.12
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.47) (0.87) (0.85) (0.86) (0.67) (1.08)
Dividends from net realized gains (0.42) -- -- -- (0.63) (0.17)
In excess of net investment income -- -- -- -- (0.05) (0.02)
Tax return of capital -- -- -- -- (0.14) --
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.89) (0.87) (0.85) (0.86) (1.49) (1.27)
--------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.04) 0.23 0.71 0.61 (2.17) 0.85
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 13.44 $ 13.48 $ 13.25 $ 12.54 $ 11.93 $ 14.10
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total return(1) 6.60% 8.42% 12.84% 12.96% (5.21)% 16.78%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $159,323 $154,989 $142,869 $144,020 $156,629 $193,064
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.81%(3) 1.79%(2) 1.82% 1.85% 1.78% 1.99%
Net investment income 7.17%(3) 6.52% 6.80% 7.30% 6.46% 7.36%
Portfolio turnover 183% 295% 255% 201% 123% 207%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees;
if expense offsets were included, the ratio would not significantly differ.
(3) Annualized.
See Notes to Financial Statements 11
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C CLASS M
----------------------- -----------------------
SIX FROM SIX FROM
MONTHS INCEPTION MONTHS INCEPTION
ENDED 10/14/97 ENDED 10/14/97
4/30/98 TO 4/30/98 TO
(UNAUDITED) 10/31/97 (UNAUDITED) 10/31/97
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.48 $ 14.22 $ 13.48 $ 14.22
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.47 0.04 0.50 0.04
Net realized and unrealized gain (loss) 0.39 (0.74) 0.38 (0.73)
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.86 (0.70) 0.88 (0.69)
--------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.47) (0.04) (0.50) (0.05)
Dividends from net realized gains (0.42) -- (0.42) --
--------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.89) (0.04) (0.92) (0.05)
--------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (.03) (0.74) (.04) (0.74)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 13.45 $ 13.48 $ 13.44 $ 13.48
--------- --------- --------- ---------
--------- --------- --------- ---------
Total return(1) 6.66% (5.00)%(2) 6.85% (4.97)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,661 $284 $310 $124
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.81%(3) 1.62%(3) 1.31%(3) 1.27%(3)
Net investment income 7.17%(3) 4.75%(3) 7.67%(3) 6.19%(3)
Portfolio turnover 183% 295% 183% 295%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Not annualized
(3) Annualized
12 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (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
Class A, Class B, Class C and Class M shares. Class M shares have been closed to
new investors. Class A shares are sold with a front-end sales charge of up to
4.75%. Class B shares are sold with a contingent deferred sales charge which
declines from 5% to zero depending on the period of time the shares are held.
Class C shares are sold with a 1% contingent deferred sales charge if redeemed
within one year of purchase. Class M shares are sold with a front-end sales
charge of up to 3.50%. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that each
class bears different distribution expenses and has exclusive voting rights with
respect to its distribution plan. Income and expenses of the Fund are borne pro
rata by the holders of all classes of shares, except that each class bears
distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
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 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, and losses deferred due to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction, is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
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 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 $37,788 for Class A shares and $806 for
Class M shares, and deferred sales charges of $104,082 for Class B and $214 for
Class C shares during the six months ended April 30, 1998. In addition, the Fund
pays PEPCO a distribution fee at an annual
13
<PAGE>
PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) (CONTINUED)
rate of 0.25% for Class A shares, 1.00% for Class B shares, 1.00% for Class C
shares and 0.50% for Class M shares of the average daily net assets of the Fund.
The Distribution Plan for Class A shares provides for fees to be paid up to a
maximum on an annual basis of 0.30%; the Distributor has voluntarily agreed to
limit the fee to 0.25%. The Distributor has advised the Fund that of the total
amount expensed during the six months ended April 30, 1998, $686,089 was earned
by the Distributor, $308,710 was paid to unaffiliated participants, and $30,328
was paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.05% of average daily
net assets up to $100 million, 0.04% of average daily net assets of $100 million
to $300 million, 0.03% of average daily net assets of $300 million through $500
million, and 0.015% of average daily net assets greater than $500 million: a
minimum fee may apply. PEPCO serves as the Fund's Transfer Agent with State
Street Bank and Trust Company as sub-transfer agent. For the year ended April
30, 1998, transfer agent fees were $216,180 of which PEPCO retained $100,222
which is net of the fees paid to State Street.
At April 30, 1998, PHL and affiliates held 153,993 Class A shares, 13 Class B
shares, 7,490 Class C shares and 7,368 Class M shares of the Fund with a
combined value of $2,272,684.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities and
options, during the six months ended April 30, 1998, aggregated $643,941,764 and
$651,109,930, including $24,959,163, and $44,045,867 of U.S. Government and
agency securities, respectively.
At April 30, 1998, the Phoenix Multi-Sector Fixed Income Fund had outstanding
written options as follows:
<TABLE>
<CAPTION>
PAR
SUBJECT TO EXPIRATION EXERCISE MARKET
CALL OPTION CALL DATE PRICE VALUE
- -------------------- -------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Republic of Brazil
EI-L Euro 6.875%,
4/15/06 $9,700,000 5/98 $ 91.875 $ --
</TABLE>
Written option activity for the six months ended April 30, 1998 aggregated the
following:
<TABLE>
<CAPTION>
NUMBER OF AMOUNT OF
OPTIONS PREMIUM
----------- -----------
<S> <C> <C>
Options outstanding at October 31,
1997 -- $ --
Options written 10 29,400
Options canceled in closing purchase
transactions -- --
Options expired -- --
Options exercised -- --
----------- -----------
Options outstanding at April 30,
1998 10 $ 29,400
----------- -----------
----------- -----------
</TABLE>
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a fund's ability to
repatriate such amounts.
5. LOAN AGREEMENTS
The Fund 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 Fund'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
Fund 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 Fund generally has
no right to enforce compliance with the terms of the loan agreement with the
borrower. As a result, the Fund may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. For loans which the
Fund is a participant, the Fund may not sell its participation in the loan
without the lender's prior consent. When the Fund 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.
This report is not authorized for distribution to prospective investors in the
Phoenix Multi-Sector Fixed Income Fund, Inc. unless preceded or accompanied by
an effective Prospectus which includes information concerning the sales charge,
Fund's record and other pertinent information.
14
<PAGE>
PHOENIX MULTI-SECTOR FIXED
INCOME FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
DIRECTORS
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
INVESTMENT ADVISER
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
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PHOENIX FUNDS BULK RATE MAIL
P.O. Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
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[LOGO] PHOENIX
INVESTMENT PARTNERS
