PHOENIX MULTI SECTOR FIXED INCOME FUND INC, 485APOS, 1998-12-30

PHOENIX MULTI SECTOR FIXED INCOME FUND INC
485APOS, 1998-12-30

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As filed with the Securities and Exchange Commission on December 30, 1998
Registration No. 33-31243
File No. 811-5909

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM N-1A
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 14 [X]

and/or

REGISTRATION STATEMENT
Under the
INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 16 [X]

(Check appropriate box or boxes)

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Phoenix Multi-Sector Fixed Income Fund, Inc.
(Exact Name of Registrant as Specified in Charter)

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101 Munson Street, Greenfield, Massachusetts 01301
(Address of Principal Executive Offices) (Zip Code)

c/o Phoenix Equity Planning Corporation--Customer Service
(800) 243-1574
(Registrant's Telephone Number)

-------------

Thomas N. Steenburg
Vice President, Counsel and Secretary
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
(Name and Address of Agent for Service)

-------------

It is proposed that this filing will become effective (check
appropriate box):

[ ] immediately upon filing pursuant to paragraph (b)

[X] 60 days after filing pursuant to paragraph (a)(1)

[ ] on pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

================================================================================

<PAGE>

PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.

Cross Reference Sheet Pursuant to Rule 404

PART A

<TABLE>
<CAPTION>
Item Number Form N-1A, Part A Prospectus Caption
- ------------------------------------------------------------------- -----------------------------------------------------
<S> <C> <C>
1. Front and Back Cover Pages ............................... Cover Page, Back Cover Page
2. Risk/Return Summary; Investments, Risks, Performance Investment Risk and Return Summary
3. Risk Return Summary; Fee Table ........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies, Investment Risk and Return Summary; Investment
and Related Risks ........................................ Strategies; Risks Related to Investment Strategies
5. Management's Discussion of Fund Performance .............. Performance Tables
6. Management, Organization, and Capital Structure .......... Management of the Fund
7. Shareholder Information .................................. Pricing of Fund Shares; Sales Charges; Your Account;
How to Buy Shares; How to Sell Shares; Things to
Know When Selling Shares; Account Policies; Investor
Services; Tax Status
8. Distribution Arrangements ................................ Sales Charges
9. Financial Highlights Information ......................... Financial Highlights
</TABLE>

PART B

<TABLE>
<CAPTION>
Item Number Form N-1A, Part B Statement of Additional Information Caption
- ------------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C>
10. Cover Page and Table of Contents .......................... Cover Page, Table of Contents
11. Fund History .............................................. The Fund
12. Description of the Fund and Its Investment Risks .......... Investment Objectives and Policies; Investment
Restrictions
13. Management of the Fund .................................... Management of the Fund
14. Control Persons and Principal Holders of Securities ....... Management of the Fund
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. Calculations of Performance Data .......................... Performance Information
22. Financial Statements ...................................... Financial Statements
</TABLE>

<PAGE>

[FRONT COVER]

Phoenix Multi-Sector Fixed Income Fund, Inc.

Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Table of Contents
- ----------------------------------------

<TABLE>
<S> <C>
Phoenix Multi-Sector Fixed Income Fund, Inc.
Investment Risk and Return Summary ............. page 1
Fund Expenses .................................. page 4
Investment Strategies .......................... page 5
Risks Related to Investment Strategies ......... page 7
Phoenix Multi-Sector Short Term Bond Fund
Investment Risk and Return Summary ............. page 11
Fund Expenses .................................. page 14
Investment Strategies .......................... page 15
Risks Related to Investment Strategies ......... page 17
Management of the Funds ......................... page 21
Pricing of Fund Shares .......................... page 22
Sales Charges ................................... page 23
Your Account .................................... page 26
How to Buy Shares ............................... page 28
How to Sell Shares .............................. page 28
Things You Should Know When
Selling Shares ................................. page 29
Account Policies ............................... page 30
Investor Services .............................. page 32
Tax Status of Distributions .................... page 32
Financial Highlights ........................... page 33
Additional Information ......................... page 39
</TABLE>

<PAGE>

Phoenix Multi-Sector Fixed Income Fund, Inc.
Investment Risk and Return Summary

- -------------------------------------------------------

Investment Objective

Phoenix Multi-Sector Fixed Income Fund has a primary objective
to maximize current income while preserving capital. There is no
guarantee that the fund will achieve its objective.

Principal Investment Strategies

[arrow] The fund uses a "sector rotation" approach to select
investments.

[arrow] The fund will invest at least 65% of its total assets
in the following sectors of fixed income securities:

o Securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies,
authorities or instrumentalities including CMOs,
REMICs and other pass-through securities;

o Debt securities issued by foreign issuers,
including foreign governments and their political
subdivisions;

o Investment grade securities with long or short term
maturities; and

o High yield, high risk fixed income securities of
U.S. issuers (so called "junk bonds").

[arrow] The fund may invest up to 50% of its assets in "junk
bonds".

[arrow] The fund may invest any amount of its assets in any
other sector.

[arrow] The fund may invest up to 25% of its net assets in
securities purchased on a when-issued or delayed
delivery basis.

[arrow] The fund may invest up to 15% of its assets in a
combination of zero coupon, step coupon and payable in
kind ("PIK") bonds.

Principal Risks

If you invest in this fund you risk that you may lose your
investment.

The adviser intends to select investments within the sectors
that it believes will provide high returns while preserving
capital. If the adviser misjudges the return potential, or the
ability of issuers to make scheduled principal and interest
payments, the fund's returns may be lower than prevailing
returns and the fund's income available for distribution maybe
less than other funds. Neither the fund nor the adviser can
assure you that a particular level of income will consistently
be achieved.

The fund may invest up to 50% of its assets in high risk, high
yield securities (so called "junk bonds"). High risk high yield
securities present a greater risk that the issuer will not be
able to

Phoenix Multi-Sector Fixed Income Fund, Inc. 1

<PAGE>

make interest or principal payments on time. If this happens,
the fund would lose income and could expect a decline in the
market value of the securities.

Obligations issued or guaranteed by the U.S. government,
agencies, authorities and instrumentalities only guarantee
principal and interest will be timely paid to holders of the
securities. The entities do not guarantee that the value of fund
shares will increase.

The value of CMOs, REMICs and other pass-through securities may
fluctuate to a greater degree than other debt securities in
response to changes in interest rates. The market for these
securities can be less liquid. These mortgage backed type
securities may also be subject to prepayment risk.

Unrated securities may not have as broad a market as rated
securities and it can be more difficult to assess their risk as
compared to rated securities.

The fund may invest in issuers in foreign countries including
"emerging market" countries (countries with markets that are not
fully developed). Political and economic uncertainty as well as
less public information about investments may negatively impact
the fund's portfolio. Some investments may be made in currencies
other than U.S. dollars that will fluctuate in value as a result
of changes in the currency exchange rate. Foreign markets and
currencies may not perform as well as U.S. markets. Emerging
market countries and companies doing business in emerging
markets may not have the same range of opportunities as
countries and their companies in developed nations. They may
also have more obstacles to financial success.

Although the fund intends to invest in all four market sectors,
it may invest all of its assets in only one market sector.
Conditions which negatively affect this one sector will have a
greater impact on the fund as compared to when the fund invests
in more than one sector.

The fund may invest in securities with long-term maturities.
Long-term maturities present a greater risk that economic and
market conditions may negatively impact expected returns of the
security and typically, securities with long-term maturities are
more sensitive to interest rate movements than shorter term
securities.

To manage the funds dollar weighted average, the adviser may
sell certain holdings and reinvestment the proceeds in
securities of different maturities. This may cause the fund's
portfolio turnover rate to be higher than if the fund had held
its holdings until maturity. Frequent and active trading may
increase transaction costs for the fund and may increase capital
gain distributions, resulting in greater tax liability to you.

Securities purchased on a when-issued or delayed delivery basis
risk that the value of the security on settlement date may be
more or less than the price paid. If it is less, the value of
your shares may decline.

2 Phoenix Multi-Sector Fixed Income Fund, Inc.

<PAGE>

The fund may invest in zero coupon, step coupon and PIK bonds.
The market prices of these securities generally are more
volatile than the market prices of securities that pay interest
at regular intervals. The fund may still have to distribute, on
a current basis, interest earned on these securities but not yet
paid to the fund. The fund may have to distribute cash obtained
from other sources in order to satisfy its distribution
requirements.

Performance Tables

The bar chart below provides an indication of the risks of
investing in the Phoenix Multi-Sector Fixed Income Fund, Inc. by
showing changes in the fund's Class A Shares performance from
year to year over the life of the fund.(1). The table below
shows how the fund's average annual returns for one and five
years and life of the fund 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.

Multi-Sector Fixed Income Fund

[REPRESENTATION OF BAR CHART]

<TABLE>
<CAPTION>
Calendar Year
----------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Return (%) 5.29 28.25 12.06 15.56 -6.71 19.81 13.55 8.99
</TABLE>

(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 9.95% (quarter ending June 30,
1995) and the lowest return for a quarter was (11.70)% (quarter ending September
30, 1998). Year to date performance (through January 31, 1999) was __%.

<TABLE>
<CAPTION>
Average Annual Total Returns Life of
(for the periods ending 12/31/98)(1) One Year Five Years the fund(2)
- ------------------------------------------- --------- ----------- ------------
<S> <C> <C> <C>
Class A Shares % % %
Class B Shares % N/A %
Class C Shares(3) % N/A %
Lehman Brothers Aggregate Bond Index(3) % % N/A
</TABLE>

(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and C Shares.

(2) Class A Shares since December 15, 1989, Class B Shares since January 3,
1992, and Class C Shares since October 14, 1997.

(3) The Lehman Brothers Aggregate Bond Index is an unmanaged but commonly used
measure of bond performance. It is a combination of several Lehman Brothers
Fixed Income indexes. The index's performance does not include sales charges.

Phoenix Multi-Sector Fixed Income Fund, Inc. 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) 4.75% None None

Maximum Deferred Sales Charge (load) (as a percentage of the lesser None 5%(a) 1% during the
of the value redeemed or the amount invested) first year

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
------- -------- --------
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses that are
deducted from fund assets)
Management Fees 0.55% 0.55% 0.55%
Distribution and Service (12b-1) Fees(b) 0.25% 1.00% 1.00%
Other Expenses 0.28% 0.28% 0.28%
------- -------- --------
Total Annual Fund Operating Expenses 1.08% 1.83% 1.83%
======= ======== ========
</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>
Class 1 year 3 years 5 years 10 years
- ----------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A $580 $802 $1,042 $1,730
Class B $586 $776 $ 990 $1,951
Class C $286 $576 $ 990 $2,148
</TABLE>

4 Phoenix Multi-Sector Fixed Income Fund, Inc.
<PAGE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
- ----------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A $580 $802 $1,042 $1,730
Class B $186 $576 $ 990 $1,951
Class C $186 $576 $ 990 $2,148
</TABLE>

Investment Strategies
- --------------------------------------

Investment Objective

The fund has an investment objective to maximize current income
while preserving capital. There is no guarantee that the fund
will achieve its objective.

Principal Investment Strategies

The fund uses a "sector rotation" approach to selecting
investments. The adviser will diversify investments among
several categories or "sectors" of fixed income securities.
While the adviser cannot control either the general interest
rate environment or levels of return of securities on an
absolute basis, the adviser will seek to adjust the proportions
of the fund's investment in the various sectors and the
selection of investments within sectors to obtain higher returns
on a relative basis.

At least 65% of the fund's total assets will be invested in one
or more of the following four sectors of fixed income
securities:

o U.S. Government Securities. Securities issued or guaranteed
as to principal and interest by the U.S. Government, its
agencies, authorities or instrumentalities. Securities in
this sector include U.S. Treasury obligations, securities
issued by the Government National Mortgage Association
(GNMA), the Federal Home Loan Mortgage Corporation (FHLMC),
the Federal National Mortgage Corporation (FNMA) and
Student Loan Marketing Association (SLMA), as well as CMOs,
REMICs and other securities collateralized by portfolios of
mortgage pass-through securities guaranteed by GNMA, FHLMC
or FNMA.

o Foreign Securities. Debt securities issued by foreign
issuers, including foreign governments and their political
subdivisions and issuers and non-government issuers
considered creditworthy by the adviser. Issuers may be in
developed countries as well as emerging market countries.
Investments in non-U.S. dollar securities and currency will
be evaluated on the basis of fundamental economic criteria,
inflation level and trends, growth rate forecasts and
technical and political data.

Phoenix Multi-Sector Fixed Income Fund, Inc. 5

<PAGE>

o Investment Grade Securities. Securities of U.S. issuers of
all types of long or short term debt obligations including
bonds, debentures, municipal bonds, equipment lease and
trust certificates, asset-backed securities, pass through
securities, REMICs and CMOs, sales contracts and commercial
paper.

o High Yield-High Risk Securities ("Junk Bonds"). Securities
of U.S. issuers of preferred and preference stock and debt
obligations including convertible securities which are in
the lower rating categories, or if unrated of comparable,
limited quality. The adviser uses its own investment and
credit analysis and the ratings assigned by a Nationally
Recognized Statistical Rating Organization (NRSRO) to
determine whether to buy securities of this type. The high
yields on these securities often reflect the greater risks
associated with investing in these type of securities. The
fund may invest up to 50% of its assets in junk bonds.

The fund generally will be invested in each of the four market
sectors. However, the fund may invest any amount of its assets
in any one sector except the fund will not invest more than 50%
of its assets in high yield, high risk securities. The fund may
not choose to invest in a sector in order to achieve its
objective. The adviser believes that the fund's net asset value
is likely to be more stable following this investment strategy
than that of a fund which invests in only one of these sectors.
Greater stability would occur because, in general, broad
diversification over several market sectors tends to reduce
volatility.

The dollar weighted average maturity of securities in the
sectors may vary significantly from time to time based on such
factors as the adviser's expectations as to future changes in
interest or exchange rates, the maturity schedules and possible
prepayment of bonds held by the fund, and characteristics and
maturities of securities available for purchase by the fund at
certain times in the future. The adviser may seek to adjust the
fund's dollar weighted average through the sale of portfolio
holdings and reinvestment of sale proceeds in securities of
different maturities.

The fund may invest up to 25% of its net assets in securities
purchased on a when issued or delayed delivery basis. The price
of these securities is fixed at the time of commitment but
settlement occurs after the customary settlement period for the
particular security.

The fund may invest in any combination of zero coupon bonds,
step coupon bonds and PIK bonds, provided that the total of all
securities of these types held by the fund is not more than 15%
of fund assets.

Temporary Defensive Strategy. During periods of rising interest
rates, unstable pricing and currency exchange or in response to
extreme market fluctuations, the adviser, at its discretion, may
invest part or all of the fund's assets in cash or cash
equivalents. When this happens, the fund may not achieve its
investment objective.

Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.

6 Phoenix Multi-Sector Fixed Income Fund, Inc.
<PAGE>

Risks Related to Investment Strategies
- -------------------------------------------------------

General

The fund's focus is to maximize current income. The adviser
intends to adjust the proportion of fund assets invested in the
various sectors and to select investments that provide returns
that are higher than prevailing returns on most fixed income
securities while preserving capital. If the adviser misjudges
the return potential of one sector relative to another the
fund's returns may be lower than prevailing returns, and the
fund's income available for distribution to shareholders may be
less, on a relative basis, than other fixed income
opportunities. Similarly, if the adviser misjudges the ability
of the issuer of a portfolio security to make scheduled interest
or other income payments to the fund, the fund's income
available for distribution to shareholders may decrease. Neither
the fund nor the adviser can assure you that a particular level
of income will consistently be achieved.

The value of your shares is based on the market value of the
fund's investments. In the case of fixed income securities and
other securities that have relatively fixed levels of return,
the value of the security will be directly affected by trends in
interest rates and the overall condition of credit markets. For
example, in times of rising interest rates, the value of these
types of securities tends to decrease. When interest rates fall,
the value of these securities tends to rise.

In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.

High Yield-High Risk Securities

The fund may invest a relatively high proportion of fund assets,
up to 50%, in securities that will ordinarily be in the lower
rating categories of NSROs or be of comparable, limited quality.
Although these securities provide greater income and opportunity
for capital appreciation than investments in higher grade
securities, they also typically entail greater price volatility
and principal and interest risk. There is a greater risk that an
issuer will not be able to make principal and interest payments
on time.

Unrated Securities

The fund may invest in unrated securities. Unrated securities
may not be lower in quality then 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
adviser to accurately predict risk.

U.S. Government Securities

Phoenix Multi-Sector Fixed Income Fund, Inc. 7

<PAGE>

Pass-through Securities

It is difficult to predict cash flows from pass-through
securities. Payments of principal and interest on the underlying
mortgages may be allocated among classes in a variety of ways
and the inability to determine specific amounts and timing of
prepayments of the underlying loans make it difficult to
accurately predict cash flow. In the event of high prepayments,
the fund may be required to invest these proceeds at a lower
interest rate, causing the fund to earn less than if the
prepayments had not occurred.

Foreign Investing

The fund may invest in non-U.S. issuers. Investing in the
securities of non-U.S. issuers involves special risks and
considerations not typically associated with investing in U.S.
issuers. These include:

o differences in accounting, auditing and financial reporting
standards,

o generally higher commission rates on foreign portfolio
transactions,

o differences and inefficiencies in transaction settlement
systems,

o the possibility of expropriation or confiscatory taxation,

o adverse changes in investment or exchange control
regulations,

o political instability, and

o potential restrictions on the flow of international
capital.

Political and economic uncertainty as well as less public
information about investments may negatively impact the fund's
portfolio.

Foreign securities often trade with less frequency and volume
than domestic securities and therefore may exhibit greater price
volatility. Additionally, dividends and interest payable on
foreign securities may be subject to foreign taxes withheld
prior to receipt by the fund. Many of the foreign securities
held by the fund will not be registered with, nor will the
issuers of those securities be subject to the reporting
requirements of, the U.S. Securities and Exchange Commission.
Accordingly, there may be less publicly available information
about the securities and about the foreign company or government
issuing them than is available about a domestic company or
government entity. Moreover, individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation,
capital reinvestment, resource self-sufficiency and balance of
payment positions.

Foreign Currency

8 Phoenix Multi-Sector Fixed Income Fund, Inc.
<PAGE>

economic, political, financial, governmental and other factors.
Exchange rate fluctuations can affect the fund's net asset value
(share price) and dividends either positively or negatively
depending upon whether foreign currencies are appreciating or
depreciating in value relative to the U.S. dollar. Exchange
rates fluctuate over both the long and short terms.

Effective January 1, 1999, eleven European countries will begin
converting from their sovereign currency to the European Union
common currency called the "Euro." This conversion may expose
the fund to certain risks, including the reliability and timely
reporting of pricing information of the fund's portfolio
holdings. In addition, one or more of the following may
adversely affect specific securities in the fund's portfolio:

o Known trends or uncertainties related to the Euro
conversion that an issuer reasonably expects will have a
material impact on revenues, expenses or income from its
operations;

o Competitive implications of increased price transparency of
European Union markets (including labor markets) resulting
from adoption of a common currency and issuers' plans for
pricing their own products and services in the Euro;

o Issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);

o Currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and

o Potential tax consequences.

Emerging Market Investing

The fund may invest in companies located in emerging market
countries and regions. Investments in less-developed countries
whose markets are still emerging generally present risks in
greater degree than those presented by investment in foreign
issuers based in countries with developed securities markets and
more advanced regulatory systems. Prior governmental approval of
foreign investments may be required under certain circumstances
in some developing countries, and the extent of foreign
investment in domestic companies may be subject to limitations
in other developing countries. The charters of individual
companies in developing countries may impose limitations on
foreign ownership to prevent, among other concerns, violation of
foreign investment limitations.

Single Sector Investing

Although the fund intends to invest in all four market sectors,
it may invest all of its assets in only one market sector.
Securities of companies in other sectors may provide greater
investment return in certain market conditions as compared to
securities in this sector. Conditions which negatively affect
this one sector will have a greater impact on the fund as
compared to when the fund invests in more than one sector or as
compared to other funds.

Phoenix Multi-Sector Fixed Income Fund, Inc. 9

<PAGE>

Long-Term Maturities

Long-term maturities present a greater risk that economic and
market conditions may negatively impact expected returns of a
security. Typically, securities with long-term maturities are
more sensitive to interest rate movements than shorter term
securities. Small increases or decreases in interest rates will
have a greater effect on securities with longer maturities than
on shorter term maturities because the change will effect the
security for a longer period of time.

When-Issued and Delayed-Delivery Securities

Securities purchased on a when-issued or delayed-delivery basis
are subject to the risk that the value of the security on
settlement date may be more or less than the price paid as a
result of changes in the level of interest rates or other market
changes. If the value on settlement day is less, the value of
your shares may decline.

Zero Coupon, Step Coupon and PIK Bonds

The market prices of zero coupon, step coupon, and PIK bonds
generally are more volatile than the market prices of securities
that pay interest on a regular basis. Because the fund will not
receive cash payments earned on these securities on a current
basis, the fund may have to distribute cash obtained from other
sources in order to satisfy distribution requirements. This may
require that certain securities be sold to supply cash for
distributions at a time that is less favorable then if the fund
were not required to sell such securities, and such sales may
adversely affect the dollar weighted average of the fund and the
fund's turnover rate.

Turnover Rate

Each time a security is bought or sold, the fund incurs certain
costs associated with the transaction. The more transactions,
the higher the overall cost to the fund. Likewise, frequent
sales that result in gains to the fund could increase the amount
of capital gains distributions to you, the shareholder.
Increased capital gains distributions could result in greater
tax liability to you.

Impact of the Year 2000 Issue on Fund Investments

The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of a
company's computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900 rather than the
year 2000. If a company whose securities are held by the fund
does not "fix" its Year 2000 issue, it is possible that its
operations and financial results would be hurt. Also, the cost
of modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of companies
whose securities are held by the fund.

10 Phoenix Multi-Sector Fixed Income Fund, Inc.

<PAGE>

Phoenix Multi-Sector Short Term Bond Fund
Investment Risk and Return Summary
- -------------------------------------------------------

Investment Objective

Phoenix Multi-Sector Short Term Bond Fund has a primary
objective to provide high current income while attempting to
limit changes in the fund's net asset value per share caused by
interest rate changes. There is no guarantee that the fund will
achieve its objective.

Principal Investment Strategies

[arrow] The fund uses a "sector rotation" approach to
selecting investments. The adviser focuses on
identifying undervalued sectors to take advantage of
market inefficiencies.

[arrow] The fund seeks to achieve its objective by investing
in a diversified portfolio of primarily short term
fixed income securities that are in one of the
following three market sectors:

o Securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies,
authorities or instrumentalities including CMOs,
REMICs and other pass-through securities;

o Debt securities issued by foreign issuers,
including foreign governments and their political
subdivisions ; and

o High yield and investment grade securities.

[arrow] Under normal circumstances, the fund will invest at
least 65% of its assets in investment grade securities
which are rated BBB or above by Standard and Poor's
Corporation (S&P) or Duff & Phelps Credit Rating
Company (D&P) or Baa or above by Moody's Investor's
Services, Inc. (Moody's) or unrated securities
determined by the adviser to be of the same
comparable, limited quality.

[arrow] The fund may invest up to 35% of its assets in foreign
debt securities of issuers in both developed and
emerging market countries.

[arrow] The fund may invest any amount of its assets in any
other sector.

[arrow] The fund may invest up to 35% of its assets in high
yield-high risk securities (so called "junk bonds") of
domestic issuers, including preferred and preference
stock and debt obligations.

[arrow] The fund may invest up to 35% of its assets in
non-short term securities of differing maturities.

[arrow] The fund may invest up to 35% of its assets in
preferred stocks.

[arrow] The fund may invest up to 25% of its net assets in
securities purchased on a when-issued or delayed
delivery basis.

Phoenix Multi-Sector Short Term Bond Fund 11

<PAGE>

[arrow] The fund's portfolio turnover rate will not be a
limiting factor when the adviser deems it desirable to
sell or purchase securities.

Principal Risks

If you invest in this fund you risk that you may lose your
investment.

The fund may invest up to 35% of its assets in high risk, high
yield securities (so called "junk bonds"). High risk, high yield
securities present a greater risk that the issuer will not be
able to make interest or principal payments on time. If this
happens, the fund would lose income and could expect a decline
in the market value of the securities.

Although the fund intends to invest in all three market sectors,
it may invest all of its assets in only one market sector.
Conditions which negatively affect this one sector will have a
greater impact on the fund's net asset value per share as
compared to when the fund invests in more than one sector.

12 Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

The fund may invest in unrated securities. Unrated securities
may not have as broad a market as rated securities and it can be
more difficult to assess their risk as compared to rated
securities.

The fund may experience a high portfolio turnover rate. Frequent
and active trading may increase transaction costs for the fund
and may increase capital gain distributions, which may result in
greater tax liability to you.

Performance Tables

The bar chart below provides an indication of the risks of
investing in the Phoenix Multi-Sector Short Term Bond Fund by
showing changes in the fund's Class A Shares performance from
year to year over the life of the fund(1). The table below shows
how the fund's average annual returns for one and five years and
life of the fund 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.

Multi-Sector Short Term Bond Fund

[REPRESENTATION OF BAR CHART]

<TABLE>
<CAPTION>
Calendar Year
-------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Annual Return (%) 1993 1994 1995 1996 1997 1998
8.95 -1.86 13.64 11.30 9.49
</TABLE>

(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 5.38% (quarter ending June 30, 1995) and
the lowest return for a quarter was (5.50)% (quarter ending
September 30, 1998). Year to date performance (through January
31, 1999) was __ %.

<TABLE>
<CAPTION>
Average Annual Total Returns Life of
(for the periods ending 12/31/98)(1) One Year Five Years the fund(2)
- ------------------------------------------- --------- ----------- ------------
<S> <C> <C> <C>
Class A Shares % % %
Class B Shares % N/A %
Class C Shares % N/A %
Merrill Lynch Medium Quality Corporate
% % N/A
Short-Term Bond Index(3)
</TABLE>

(2) Class A Shares since July 6, 1992, Class B Shares since July 15, 1994, and
Class C Shares since October 1, 1997.

(3) The Merrill Lynch Medium Quality Corporate Short-Term Bond Index is an
unmanaged but commonly used index that tracks the returns of corporate issues
rated between BBB and A by Standard & Poor's, with maturities from 1 to 3 years.
The index's performance does not reflect sales charges.

Phoenix Multi-Sector Short Term Bond Fund 13

<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) 2.25% None None
Maximum Deferred Sales Charge (load) (as a percentage of None 2%(b) None
the lesser of the value redeemed or the amount invested)
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
------- -------- --------
<CAPTION>
<S> <C> <C> <C>
Annual Fund Operating Expenses (expenses that are
deducted from fund assets)
Management Fees 0.55% 0.55% 0.55%
Distribution and Service (12b-1) Fees(c) 0.25% 0.75% 0.50%
Other Expenses 0.75% 0.75% 0.75%
------- -------- --------
Total Annual Fund Operating Expenses(a) 1.55% 2.05% 1.80%
======= ======== ========
</TABLE>

- ----------------

(a) The fund's investment adviser has agreed to reimburse through December 31,
1999 the Phoenix Multi-Sector Short Term Bond Fund's operating expenses other
than Management Fees and Distribution and Service Fees to the extent that such
expenses exceed 0.20% for each class of shares.

<TABLE>
<S> <C> <C> <C>
Actual Total Annual Fund Operating Expenses
after expense reimbursement are: 1.00% 1.50% 1.25%
</TABLE>

(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 0.50% annually to 1% during the
third year and to 0% after the third 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.

14 Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
- ----------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A $379 $704 $1,051 $2,029
Class B $358 $643 $1,103 $2,135
Class C $183 $566 $ 975 $2,116
</TABLE>

You would pay the following expenses if you did not redeem your
shares:

<TABLE>
<CAPTION>
Class 1 year 3 years 5 years 10 years
- ----------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A $379 $704 $1,051 $2,029
Class B $208 $643 $1,103 $2,135
Class C $183 $566 $ 975 $2,116
</TABLE>

Note: Your actual expenses would be lower than those shown in
the tables above since the expense levels used to calculate the
figures shown do not include the reimbursement of expenses over
certain levels by the fund's investment adviser. Refer to the
section "Management of the Fund" for information about expense
reimbursement.

Investment Strategies
- --------------------------------------

Investment Objective

The fund has a primary objective to provide high current income
while attempting to limit changes in the fund's net asset value
per share caused by interest rate changes. There is no guarantee
that the fund will achieve its objective.

Principal Investment Strategies

The fund will primarily invest in short term fixed income
securities in the following three categories:

Phoenix Multi-Sector Short Term Bond Fund 15

<PAGE>

Association (GNMA), the Federal Home Loan Mortgage
Corporation (FHLMC), the Federal National Mortgage
Corporation (FNMA) and Student Loan Marketing Association
(SLMA), CMOs, REMICs and other securities collateralized by
portfolios of mortgage pass-through securities guaranteed
by GNMA, FHLMC, or FNMA.

o High Yield and Investment Grade Securities. Securities of
U.S. issuers of all types of long or short term debt
obligations including bonds, debentures, municipal bonds,
equipment lease and trust certificates, asset-backed
securities, pass-through securities, REMICs and CMOs, sales
contracts and commercial paper.

At least 65% of the fund's assets will be invested in investment
grade securities which are rated BBB or above by S&P or D&P; or
Baa or above by Moody's or unrated securities determined by the
adviser to be of the same comparable, limited quality. The fund
is not obligated to dispose of debt securities whose credit
quality falls below investment grade.

The fund generally will be invested in each of the three market
sectors. However, the fund may invest any amount of its assets
in any one sector except the fund will not invest more than 35%
of its assets in foreign debt securities in both developed and
emerging market countries. The fund may not choose to invest in
a sector in order to achieve its objective. The adviser believes
that the fund's net asset value is likely to be more stable
following this investment strategy than that of a fund which
invests in only one of these sectors. Greater stability would
occur because, in general, broad diversification over several
market sectors tends to reduce volatility.

The fund may invest up to 35% of its assets in high yield-high
risk securities (so called "junk bonds") of domestic issuers,
including preferred and preference stock and debt obligations.
High risk, high yield securities generally pay higher current
income but may present a greater risk that the issuer will not
be able to make principal and interest payments on time.

The fund may invest up to 35% of its assets in each of the
following categories:

o foreign debt securities of issuers in both developed and
emerging market countries;

o securities with long term maturities; and

o preferred stocks.

Preferred stocks are paid dividends before common stock
dividends are paid and they have a set dividend payment rate.

16 Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

The fund's portfolio turnover rate will not be a limiting factor
when the adviser deems it desirable to sell or purchase
securities.

Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques
of the fund.

Risks Related to Investment Strategies
- -------------------------------------------------------

General

The fund's focus is to provide high current income. The adviser
intends to adjust the proportion of the fund's assets invested
in the various sectors and to select investments that provide
returns that are higher than prevailing returns on most fixed
income securities while preserving capital. If the adviser
misjudges the return potential of one sector relative to another
the fund's returns may be lower than prevailing returns, and the
fund's income available for distribution to shareholders may be
less, on a relative basis, than other fixed income
opportunities. Similarly, if the adviser misjudges the ability
of the issuer of a portfolio security to make scheduled interest
or other income payments to the fund, the fund's income
available for distribution to shareholders may decrease. Neither
the fund nor the adviser can assure you that a particular level
of income will consistently be achieved.

In addition to these general risks of investing in the fund,
there are several specific risks of investing in the fund that
you should note.

High Yield-High Risk Securities

The fund may invest in securities that will ordinarily be in the
lower rating categories of NSROs or be non-rated securities that
the adviser believes to be of comparable, limited quality.
Although these securities provide greater income and opportunity
for capital appreciation than investments in higher grade
securities, they also typically entail greater price volatility
and principal and interest risk. There is a greater risk that an
issuer will not be able to make principal and interest payments
on time.

Phoenix Multi-Sector Short Term Bond Fund 17

<PAGE>

Unrated Securities

U.S. Government Securities

Pass-through Securities

It is difficult to predict cash flows from mortgage backed and
asset backed securities. Payments of principal and interest on
the underlying assets may be allocated among classes in a
variety of ways and the inability to determine specific amounts
and timing of prepayments of the underlying loans make it
difficult to accurately predict cash flow accurately. In the
event of high prepayments, the fund may be required to invest
these proceeds at a lower interest rate, causing the fund to
earn less than if the prepayments had not occurred.

Foreign Investing

[arrow] differences in accounting, auditing and financial
reporting standards,

[arrow] generally higher commission rates on foreign portfolio
transactions,

[arrow] differences and inefficiencies in transaction
settlement systems,

[arrow] the possibility of expropriation or confiscatory
taxation,

[arrow] adverse changes in investment or exchange control
regulations,

[arrow] political instability, and

[arrow] potential restrictions on the flow of international
capital.

Political and economic uncertainty as well as less public
information about investments may negatively impact the fund's
portfolio.

18 Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

Many of the foreign securities held by the fund will not be
registered with, nor will the issuers of those securities be
subject to the reporting requirements of, the U.S. Securities
and Exchange Commission. Accordingly, there may be less publicly
available information about the securities and about the foreign
company or government issuing them than is available about a
domestic company or government entity. Moreover, individual
foreign economies may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

Foreign Currency

Portions of the fund's assets may be invested in securities
denominated in foreign currencies. Changes in foreign exchange
rates will affect the value of those securities denominated or
quoted in currencies other than the U.S. dollar. The forces of
supply and demand in the foreign exchange markets determine
exchange rates and these forces are in turn affected by a range
of economic, political, financial, governmental and other
factors. Exchange rate fluctuations can affect the fund's net
asset value (share price) and dividends either positively or
negatively depending upon whether foreign currencies are
appreciating or depreciating in value relative to the U.S.
dollar. Exchange rates fluctuate over both the long and short
terms.

Effective January 1, 1999, eleven European countries will begin
converting from their sovereign currency to the European Union
common currency called the "Euro". This conversion may expose
the fund to certain risks including the reliability and timely
reporting of pricing information of the fund's portfolio
holdings. In addition, one or more of the following may
adversely affect specific securities in the fund's portfolio:

o Known trends or uncertainties related to the Euro
conversion that an issuer reasonably expects will have a
material impact on revenues, expenses or income from its
operations;

o Issuers' ability to make required information technology
updates on a timely basis, and costs associated with the
conversion (including costs of dual currency operations
through January 1, 2002);

o Currency exchange rate risk and derivatives exposure
(including the disappearance of price sources, such as
certain interest rate indices); and

o Potential tax consequences.

Emerging Market Investing

Phoenix Multi-Sector Short Term Bond Fund 19

<PAGE>

approval of foreign investments may be required under certain
circumstances in some developing countries, and the extent of
foreign investment in domestic companies may be subject to
limitation in other developing countries. The charters of
individual companies in developing countries may impose
limitations on foreign ownership to prevent, among other
concerns, violation of foreign investment limitations.

Single Sector Investing

Long-Term Maturities

When-Issued and Delayed-Delivery Securities

Securities purchased on a when-issued or delayed-delivery basis
risk that the value of the security on settlement date may be
more or less than the price paid as a result of changes in the
level of interest rates or other market changes. If the value on
settlement day is less, the value of your shares may decline.

Turnover Rate

Impact of the Year 2000 Issue on Fund Investments

The Year 2000 issue is the result of computer programs being
written using two rather than four digits to define the
applicable year. There is the possibility that some or all of a
company's computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900 rather than the
year 2000. If a company whose securities are held by the fund
does not "fix" its Year 2000 issue it is possible that its
operations and financial results would be hurt. Also the cost of
modifying computer programs to become Year 2000 compliant may
hurt the financial performance and market price of companies
whose securities are held by the fund.

20 Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Management of the Funds
- -------------------------------------------

The Adviser

Phoenix Investment Counsel, Inc. ("Phoenix") is the investment
adviser to the fund and is located at 56 Prospect Street,
Hartford, CT 06115. Phoenix also acts as the investment adviser
for 14 other mutual funds, as subadviser to three additional
mutual funds and as adviser to institutional clients. As of
December 31, 1998, Phoenix had $ 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 each fund's portfolio.
Phoenix manages each fund's assets to conform with the
investment policies as described in this prospectus. Each 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>
Multi-Sector Fixed Income Fund 0.55% 0.50% 0.45%
Multi-Sector Short Term Bond Fund 0.55% 0.50% 0.45%
</TABLE>

Phoenix has voluntarily agreed to assume fund operating expenses of the
Multi-Sector Short Term Bond Fund excluding interest, taxes, brokerage fees,
commissions and extraordinary expenses, until December 31, 1999, to the extent
that such expenses exceed the following percentages of the average annual net
asset values for the fund:

<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares
- ------------------------------------- ------------------ ------------------ ------------------
<S> <C> <C> <C>
Multi-Sector Short Term Bond Fund 1.00% 1.50% 1.25%
</TABLE>

During the last fiscal year, the Multi-Sector Fixed Income Fund
paid total management fees of $1,875,258; the Multi-Sector Short
Term Bond Fund paid total management fees of $270,259. The ratio
of management fees to average net assets for the fiscal year
ended October 31, 1998 was 0.55% for the Multi-Sector Fixed
Income Fund and 0.55% for the Multi-Sector Short Term Bond Fund.
On June 1, 1998, National Securities & Research Corporation
("National") assigned its investment management agreement for
each of the funds to Phoenix Investment Counsel, Inc. Phoenix
and National are subsidiaries of Phoenix Investment Partners,
Ltd. (formerly Phoenix Duff & Phelps Corporation). Of the total
management fees paid by the funds during the last fiscal year,
National was paid $ and Phoenix was paid $ by
the Multi-Sector Fixed Income Fund; National was paid $
and Phoenix was paid $ by the Multi-Sector Short Term
Bond Fund.

Phoenix Multi-Sector Fixed Income Fund, Inc. 21
Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

Portfolio Management

David L. Albrycht is portfolio manager of the funds, and as
such, is primarily responsible for the day-to-day management of
the funds' portfolios. Mr. Albrycht co-managed the Multi-Sector
Fixed Income Fund since March 1994, and assumed full management
of that fund in April 1995. He has been portfolio manager of the
Multi-Sector Short Term Bond Fund since August 1993.

Mr. Albrycht has also been the portfolio manager of the Phoenix
Strategic Income Fund of the Phoenix Multi-Portfolio Fund since
August 1993. Mr. Albrycht is a Managing Director, Fixed Income,
of Phoenix. He held various investment management positions with
Phoenix Home Life Mutual Insurance Company, an affiliate of
Phoenix, from 1989 through 1995.

Impact of the Year 2000 Issue on Fund Operations

The Trustees have directed management to ensure that the systems
used by service providers (Phoenix and its affiliates) in
support of the fund's operations be assessed and brought into
Year 2000 compliance. Based upon preliminary assessments,
Phoenix has determined that it will be required to modify or
replace portions of its software so that its computer systems
will properly utilize dates beyond December 31, 1999. Phoenix
management believes that the majority of these systems are
already Year 2000 compliant. Phoenix believes that with
modifications to existing software and conversions to new
software, the Year 2000 issue will be mitigated. It is
anticipated that such modifications and conversions will be
completed on a timely basis. It is not known at this time if
there could be a material impact on the operations of Phoenix or
its affiliates or the fund if such modifications and conversions
are not completed timely.

Phoenix will utilize both internal and external resources to
reprogram, or replace, and test the software for Year 2000
modifications. Certain systems are already in the process of
being converted due to previous initiatives and it is expected
that all core systems will be remediated by December 31, 1998
and tested by June 1999. The total cost to become Year 2000
compliant is not an expense of the fund and is not expected to
have a material impact on the operating results of Phoenix.

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 by the total number of outstanding shares of the
fund.

22 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Asset Value: The fund's investments are valued at market value.
If market quotations are not available, the fund determines a
"fair value" for an investment according to rules and procedures
approved by the Trustees. Foreign and domestic debt securities
(other than short-term investments) are valued on the basis of
broker quotations or valuations provided by a pricing service
approved by the Trustees when such prices are believed to
reflect the fair value of such securities. Foreign and domestic
equity securities are valued at the last sale price or, if there
has been no sale that day, at the last bid price, generally.
Short-term investments having a remaining maturity of sixty days
or less are valued at amortized cost, which the Trustees have
determined approximates market value.

Liabilities: Class specific expenses, distribution fees, service
fees and other liabilities are deducted from the assets of each
class. Expenses and liabilities that are not class specific
(such as management fees) are allocated to each class in
proportion to each class's net assets, except where an
alternative allocation can be more fairly made.

Net Asset Value: The liability allocated to a class plus any
other expenses are deducted from the proportionate interest of
such class in the assets of the fund. The resulting amount for
each class is then divided by the number of shares outstanding
of that class to produce each class's net asset value per share.

The net asset value per share of each class of the fund is
determined on days when the New York Stock Exchange (the "NYSE")
is open for trading as of the close of trading (normally 4:00 PM
eastern time). The fund will not calculate its net asset values
per share on days when the NYSE is closed for trading. Trading
of securities held by the fund in foreign markets may negatively
or positively impact the value of such securities on days when
the fund neither trades securities nor calculates its net asset
values (i.e., weekends and certain holidays).

At what price are shares purchased?

All investments received by the fund's authorized agents prior
to the close of regular trading on the NYSE (normally 4:00 PM
eastern time) will be executed based on that day's net asset
value. Shares credited to your account from the reinvestment of
fund distributions will be in full and fractional shares that
are purchased at the closing net asset value on the next
business day on which the fund's net asset value is calculated
following the dividend record date.

Sales Charges
- ------------------------------

What are the classes and how do they differ?

Each fund presently offers three classes of shares that have
different sales and distribution charges (see "Fund Expenses"
previously in this prospectus). Each 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

Phoenix Multi-Sector Fixed Income Fund, Inc. 23
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

for services provided to shareholders. The 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").

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 of the
Multi-Sector Fixed Income Fund, you will pay a sales charge at
the time of purchase equal to 4.75% of the offering price (4.99%
of the amount invested). If you purchase Class A Shares of the
Multi-Sector Short Term Bond Fund, you will pay a sales charge
at the time of purchase equal to 2.25% of the offering price
(2.30% 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 of the Multi-Sector Fixed Income Fund within the first 5
years after they are purchased, you will pay a sales charge of
up to 5% of your shares' value. If you sell your Class B Shares
of the Multi-Sector Short Term Bond Fund within the first 3
years after they are purchased, you will pay a sales charge of
up to 2% of your shares' value. See "Deferred Sales Charge
Alternative--Class B and C Shares" below. These charges decline
to 0% over a period of 5 years for the Multi-Sector Fixed Income
Fund and a period of 3 years for the Multi-Sector Short Term
Bond Fund. The sales charge may be waived under certain
conditions. Class B shares have higher distribution and service
fees (1.00% for the Multi-Sector Fixed Income Fund and 0.75% for
the Multi-Sector Short Term Bond Fund) and pay lower dividends
than Class A Shares. Class B Shares automatically convert to
Class A Shares 8 years after purchase for the Multi-Sector Fixed
Income Fund and 6 years after purchase for the Multi-Sector
Short Term Bond Fund. Purchases 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. 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 of the Multi-Sector Fixed Income Fund within the first
year after they are purchased, you will pay a sales charge of
1%. You will not pay any sales charges on Class C Shares of the
Multi-Sector Short Term Bond Fund when you sell them. See
"Deferred

24 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Sales Charge Alternative--Class B and C Shares" below. Class C
Shares have the same distribution and service fees (1.00% for
the Multi-Sector Fixed Income Fund and 0.50% for the
Multi-Sector Short Term Bond Fund) and pay comparable dividends
as Class B Shares. Class C Shares do not convert to any other
class of shares of the fund.

Initial Sales Charge Alternative--Class A Shares

The public offering price of Class A Shares is the net asset
value plus a sales charge that varies depending on the size of
your purchase (see "Class A Shares--Reduced Sales Charges:
Combination Purchase Privilege" in the Statement of Additional
Information). Shares purchased based on the automatic
reinvestment of income dividends or capital gains distributions
are not subject to any sales charges. The sales charge is
divided between your investment dealer and the fund's
underwriter (Phoenix Equity Planning Corporation or "PEPCO").

Sales Charge you may pay to purchase Class A Shares

<TABLE>
<CAPTION>
Sales Charge as
Multi-Sector Fixed Income Fund a percentage of
- ------------------------------------ -----------------------
Amount of Net
Transaction Offering Amount
at Offering Price Price Invested
- ------------------------------------ -------- --------
<S> <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 3.00 3.09
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
</TABLE>

<TABLE>
<CAPTION>
Sales Charge as
Multi-Sector Short Term Bond Fund a percentage of
- --------------------------------------- -----------------------
Transaction Offering Amount
at Offering Price Price Invested
- --------------------------------------- -------- --------
<S> <C> <C>
Under $50,000 2.25% 2.30%
$50,000 but under $100,000 1.25 1.27
$100,000 but under $500,000 1.00 1.01
$500,000 but under $1,000,000 0.75 0.76
$1,000,000 or more None None
</TABLE>

Deferred Sales Charge Alternative--Class B and C Shares

Class B and C Shares are purchased without an initial sales charge; however,
shares sold within a specified time period are subject to a declining
contingent deferred sales charge ("CDSC") at the rates listed below. Class C
Shares of the Multi-Sector Short Term Bond Fund are purchased without an
initial sales charge and are not subject to a deferred sales charge. The
sales charge will be multiplied by the then current market value or the
initial cost of the shares being redeemed, whichever is less. No sales charge
will be imposed on increases in net asset value or on shares purchased
through the reinvestment of income dividends or capital gains distributions.
To minimize

Phoenix Multi-Sector Fixed Income Fund, Inc. 25
Phoenix Multi-Sector Short Term Bond Fund
<PAGE>

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

Multi-Sector Fixed Income Fund

Year 1 2 3 4 5 6+
----------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%

Multi-Sector Short Term Bond Fund

Year 1 2 3 4+
----------------------------------------------------------------
CDSC 2% 1.5% 1% 0%

Deferred Sales Charge you may pay to sell Class C Shares

Multi-Sector Fixed Income Fund

Year 1 2+
----------------------------------------------------------------
CDSC 1% 0%

You will not pay any deferred sales charge to sell Class C
Shares of the Multi-Sector Short Term Bond Fund.

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).

26 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

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.

Step 2.

Your second choice will be what class of shares to buy. The
funds offer 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 cash and capital gain distributions in
additional shares

o Receive both dividends and capital gain distributions in
cash

No interest will be paid on uncashed distribution checks.

Phoenix Multi-Sector Fixed Income Fund, Inc. 27
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

How To Buy Shares
- ------------------------------------

<TABLE>
<CAPTION>
To Open An Account
- ------------------------------- ----------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.

Through the mail Complete a New Account Application and send it with a check
payable to the fund. Mail them to: State Street Bank, P.O. Box
8301, Boston, MA 02266-8301.

By Federal Funds wire Call us at 1-800-243-1574 (press 1, then 0).

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 1-800-243-1574 (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 fund's Transfer Agent or an authorized agent. In the case
of a Class B or C Share redemption, you will be subject to the
applicable deferred sales charge, if any, for such shares.
Subject to certain restrictions, shares may be redeemed by
telephone or in writing. In addition, shares may be sold through
securities dealers, brokers or agents who may charge customary
commissions or fees for their services. The funds do 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.

28 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

<TABLE>
<CAPTION>
To Sell Shares
- ------------------------------- ----------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee.

Through the mail Send a letter of instruction and any share certificates (if you
hold certificate shares) to: State Street Bank, P.O. Box 8301,
Boston, MA 02266-8301. Be sure to include the registered
owner's name, fund and account number, number of shares
or dollar value you wish to sell.

By telephone For sales up to $50,000, requests can be made by calling
1-800-243-1574.

By telephone exchange Call us at 1-800-243-1574 (press 1, then 0).

By check If you selected the checkwriting feature, you may write
checks for amounts 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 funds. The funds reserve
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

[arrow] Send a clear letter of instructions if all of these
apply:

o Your shares are registered individually, jointly,
or as custodian under the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act.

o The proceeds do not exceed $50,000.

o The proceeds are payable to the registered owner at
the address on record.

[arrow] Send a clear letter of instructions with a signature
guarantee when any of these apply:

Phoenix Multi-Sector Fixed Income Fund, Inc. 29
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

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
1-800-243-1574.

The signature on your request must be guaranteed 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, B, or C Shares, you
can purchase Class A Shares of any fund at net asset value, with
no sales charge, by reinvesting all or part of your proceeds,
but not more. Send your written request to State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301. You can call us at
1-800-243-1574 for more information.

30 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Please remember, a redemption and reinvestment are considered to
be a sale and purchase for tax-reporting purposes. Class B
shareholders who have had the contingent deferred sales charge
waived because they are in the Systematic Withdrawal Program are
not eligible for this reinstatement privilege.

Redemption of Small Accounts

Due to the high cost of maintaining small accounts, if your
account balance is less than $200, you may receive a notice
requesting you to bring the balance up to $200 within 60 days.
If you do not, the shares in the account will be sold at net
asset value, and a check will be mailed to the address of
record.

Exchange Privileges

You should read the prospectus carefully before deciding to make
an exchange. You can obtain a prospectus from your financial
advisor or by calling us at 1-800-243-4361 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.

o Exchanges may be made by phone (1-800-243-1574) 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 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 market 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 1-800-243-4361.

Phoenix Multi-Sector Fixed Income Fund, Inc. 31
Phoenix Multi-Sector Short Term Bond 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, semi-annual
or annual basis. Shares of one Phoenix Fund will be exchanged
for shares of the same class of another fund at the interval you
select. To sign up, just complete the Systematic Exchange
Section on the application.

Telephone Exchange lets you exchange shares of one fund for the
same class of shares in another fund, using our customer service
telephone service. See the Telephone Exchange Section on the
application.

Systematic Withdrawal Program allows you to periodically redeem
a portion of your account on a predetermined monthly, quarterly,
semiannual, or annual basis. Sufficient shares will be redeemed
on the 15th of the month at the closing net asset value so that
the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or
25th with proceeds directed through Automated Clearing House
(ACH) to your bank. The minimum withdrawal is $25, and minimum
account balance requirements continue. Shareholders in the
program must own fund shares worth at least $5,000.

Tax Status of Distributions
- -------------------------------------------

Distributions from net investment income will be declared daily
and paid monthly. The fund will 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.

32 Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

Financial Highlights
- ------------------------------------

This table is intended to help you understand the fund's
financial performance for the past five years. 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 on an investment in the fund
(assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP,
independent accountants. Their report, together with the fund's
financial statements, are included in the fund's most recent
Annual Report, which is available upon request.

Phoenix Multi-Sector Fixed Income Fund, Inc.

<TABLE>
Class A
-----------------------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ $ 13.27 $ 12.56 $ 11.94 $ 14.13
Income from investment operations:
Net investment income 1.03 0.94 0.96 0.76
Net realized and unrealized gain (loss) 0.18 0.72 0.61 (1.35)
-------- -------- -------- -------
Total from investment operations 1.21 1.66 1.57 (0.59)
-------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.98) (0.95) (0.95) (0.77)
Dividends from net realized gains -- -- -- (0.63)
In excess of net investment income -- -- -- (0.05)
Tax return of capital -- -- -- (0.15)
-------- -------- -------- -------
Total distributions (0.98) (0.95) (0.95) (1.60)
-------- -------- -------- -------
Change in net asset value 0.23 0.71 0.62 (2.19)
-------- -------- -------- -------
Net asset value, end of period $ $ 13.50 $ 13.27 $ 12.56 $ 11.94
==== ======== ======== ======== =======
Total return(1) 9.22% 13.75% 13.83% (4.57)%
Ratios/supplemental data:
Net assets, end of period (thousands) $191,486 $169,664 $168,875 $172,966
Ratio to average net assets of:
Operating expenses 1.04%(2) 1.07% 1.10% 1.13%
Net investment income 7.28% 7.56% 8.10% 7.05%
Portfolio turnover 295% 255% 201% 123%
</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) Not annualized.
(4) Annualized.

<PAGE>

Financial Highlights (continued)
- ---------------------------------------------

Phoenix Multi-Sector Fixed Income Fund, Inc.

<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------------------
Year Ended October 31,
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ $ 13.25 $ 12.54 $ 11.93 $ 14.10
Income from investment operations:
Net investment income 0.92 0.85 0.86 0.68
Net realized and unrealized gain (loss) 0.18 0.71 0.61 (1.36)
---- -------- -------- -------- --------
Total from investment operations 1.10 1.56 1.47 (0.68)
---- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.87) (0.85) (0.86) (0.67)
Dividends from net realized gains -- -- -- (0.63)
In excess of net investment income -- -- -- (0.05)
Tax return of capital -- -- -- (0.14)
---- -------- -------- -------- --------
Total distributions (0.87) (0.85) (0.86) (1.49)
---- -------- -------- -------- --------
Change in net asset value 0.23 0.71 0.61 (2.17)
---- -------- -------- -------- --------
Net asset value, end of period $ $ 13.48 $ 13.25 $ 12.54 $ 11.93
---- -------- -------- -------- --------
Total return(1) 8.42% 12.84% 12.96% (5.21)%
==== ======== ======== ======= ========
Ratios/supplemental data:
Net assets, end of period (thousands) $154,989 $142,869 $144,020 $156,629
Ratio to average net assets of:
Operating expenses 1.79%(2) 1.82% 1.85% 1.78%
Net investment income 6.52% 6.80% 7.30% 6.46%
Portfolio turnover 295% 255% 201% 123%
</TABLE>

----------------

34
<PAGE>

Financial Highlights (continued)
- ---------------------------------------------

Phoenix Multi-Sector Fixed Income Fund, Inc.

<TABLE>
<CAPTION>
Class C
-----------------------------------------
Year Ended From Inception
October 31, 10/14/97 to
1998 10/31/97
---------- --------
<S> <C> <C>
Net asset value, beginning of period $ $ 14.22
Income from investment operations:
Net investment income 0.04
Net realized and unrealized gain (loss) (0.74)
--------
Total from investment operations (0.70)
--------
Less distributions:
Dividends from net investment income (0.04)
Dividends from net realized gains --
In excess of net investment income --
Tax return of capital --
--------
Total distributions (0.04)
--------
Change in net asset value (0.74)
--------
Net asset value, end of period $ $ 13.48
========== ========
Total return(1) (5.00)%(3)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 284
Ratio to average net assets of:
Operating expenses 1.62%(4)
Net investment income 4.75%(4)
Portfolio turnover 295%
</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) Not annualized.
(4) Annualized.

<PAGE>

Financial Highlights (continued)
- ---------------------------------------------

Phoenix Multi-Sector Short Term Bond Fund

<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------------------------------------------------
1998 1997 1996 1995 1994
------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91
Income from investment operations:
Net investment income 0.34(2) 0.34(2) 0.33(2) 0.33(2) 0.29(2)
Net realized and unrealized gain (loss) (0.29) 0.14 0.17 0.13 (0.26)
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.05 0.48 0.50 0.46 0.03
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.34) (0.33) (0.33) (0.33) (0.29)
Dividends from net realized gains (0.11) -- -- -- (0.03)
Tax return of capital -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Total distributions (0.45) (0.33) (0.33) (0.33) (0.33)
---------- ---------- ---------- ---------- ----------
Change in net asset value (0.40) 0.15 0.17 0.13 (0.30)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 4.66 $ 5.06 $ 4.91 $ 4.74 $ 4.61
========== ========== ========== ========== ==========
Total return(1) 0.85% 10.08% 10.91% 10.27% 0.40%
Ratios/supplemental data:
Net assets, end of period (thousands) 33,212 $28,557 $13,702 $ 9,303 $ 9,371
Ratio to average net assets of:
Operating expenses 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 6.90% 6.54% 6.88% 7.07% 5.99%
Portfolio turnover 126% 246% 232% 344% 121%
</TABLE>

----------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.04, $0.06, $0.08 and $0.08, respectively.

36
<PAGE>

Financial Highlights (continued)
- ---------------------------------------------

Phoenix Multi-Sector Short Term Bond Fund

<TABLE>
Class B
------------------------------------------------------------------------------
Year Ended October 31,
------------------------------------------------------------------------------
1998 1997 1996 1995 1994
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91
------------ ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income 0.31(2) 0.31(2) 0.31(2) 0.30(2) 0.27(2)
Net realized and unrealized gain (loss) (0.29) 0.15 0.17 0.13 (0.26)
------------ ---------- ---------- ---------- ----------
Total from investment operations 0.02 0.46 0.48 0.43 0.01
------------ ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income (0.32) (0.31) (0.31) (0.30) (0.27)
Dividends from net realized gains (0.11) -- -- -- (0.03)
Tax return of capital -- -- -- -- (0.01)
------------ ---------- ---------- ---------- ----------
Total distributions (0.43) (0.31) (0.31) (0.30) (0.31)
------------ ---------- ---------- ---------- ----------
Change in net asset value (0.41) 0.15 0.17 0.13 (0.30)
------------ ---------- ---------- ---------- ----------
Net asset value, end of period $ 4.65 $ 5.06 $ 4.91 $ 4.74 $ 4.61
============ ========== ========== ========== ==========
Total return(1) 0.12% 9.51% 10.36% 9.71% (0.03)%
Ratios/supplemental data:
Net assets, end of period (thousands) 12,225 $10,318 $ 5,943 $ 4,659 $ 6,418
Ratio to average net assets of:
Operating expenses 1.50% 1.50% 1.50% 1.50% 1.45%
Net investment income 6.44% 6.05% 6.38% 6.59% 5.74%
Portfolio turnover 126% 246% 232% 344% 121%
</TABLE>

<PAGE>

Financial Highlights (continued)
- ---------------------------------------------

Phoenix Multi-Sector Short Term Bond Fund

<TABLE>
Class C
-----------------------------------
Year Ended From Inception
October 31, 10/1/97 to
1998 10/31/97
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ 5.06 $5.15
-------- --------
Income from investment operations:
Net investment income 0.34(2) 0.03(2)
Net realized and unrealized gain (loss) (0.30) (0.09)
---------- --------
Total from investment operations 0.04 (0.06)
---------- --------
Less distributions:
Dividends from net investment income (0.33) (0.03)
Dividends from net realized gains (0.11) --
Tax return of capital -- --
Total distributions (0.44) (0.03)
---------- --------
Change in net asset value (0.40) (0.09)
---------- --------
Net asset value, end of period $ 4.66 $5.06
========== ========
Total return(1) 0.59% (1.30)%(4)
Ratios/supplemental data:
Net assets, end of period (thousands) 10,665 $ 575
Ratio to average net assets of:
Operating expenses 1.25% 1.25%(3)
Net investment income 6.70% 5.51%(3)
Portfolio turnover 126% 246%
</TABLE>

----------------

(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02 and $0.04, respectively.
(3) Annualized.
(4) Not annualized.

38
<PAGE>

Additional Information
- ---------------------------------------

Statement of Additional Information

Each fund has filed a Statement of Additional Information about the fund,
dated February , 1999 with the Securities and Exchange Commission. The
Statement contains more detailed information about the fund. Each is
incorporated into this prospectus by reference and is legally part of the
prospectus. You may obtain a free copy of the Statements:

o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or

o by calling (800) 243-4361.

You may also obtain information about the funds from the Securities and
Exchange Commission:

o through its internet site (http://www.sec.gov),

o by visiting its Public Reference Room in Washington, DC or

o by writing to its Public Reference Section, Washington, DC 20549-6009
(a fee may be charged).

Information about the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330.

Shareholder Reports

Each fund semiannually mails to its shareholders detailed reports
containing information about the fund's investments. Each fund's Annual
Report contains a detailed discussion of the market conditions and
investment strategies that significantly affected the fund's performance
from November 1 through October 31. You may request a free copy of the
fund's Annual and Semiannual Reports:

o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or

o 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

Multi-Sector Fixed Income Fund SEC File Nos. 33-31243 & 811-5909
Multi-Sector Short Term Bond Fund SEC File Nos. 33-45758 & 811-6566

[recycle logo] Printed on recycled paper using soybean ink

<PAGE>

[BACK COVER]

Phoenix Multi-Sector Fixed Income Fund, Inc.

Phoenix Multi-Sector Short Term Bond Fund

<PAGE>

PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.

101 Munson Street
Greenfield, Massachusetts 01301

Statement of Additional Information

February __, 1999

This Statement of Additional Information is not the Prospectus but expands
upon and supplements the information contained in the current Prospectus of
Phoenix Multi-Sector Fixed Income Fund, Inc. (the "Fund"), dated February ,
1999 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 100 Bright Meadow Blvd.,
P.O. Box 2200, Enfield, CT 06083-2200.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
THE FUND ............................................................ 1
INVESTMENT OBJECTIVE AND POLICIES ................................... 1
INVESTMENT RESTRICTIONS ............................................. 1
INVESTMENT TECHNIQUES ............................................... 2
PERFORMANCE INFORMATION ............................................. 7
PORTFOLIO TRANSACTIONS AND BROKERAGE ................................ 7
SERVICES OF THE ADVISER ............................................. 9
NET ASSET VALUE ..................................................... 10
HOW TO BUY SHARES ................................................... 10
INVESTOR ACCOUNT SERVICES ........................................... 13
TAX SHELTERED RETIREMENT PLANS ...................................... 14
HOW TO REDEEM SHARES ................................................ 14
DIVIDENDS, DISTRIBUTIONS AND TAXES .................................. 15
THE DISTRIBUTOR ..................................................... 17
PLANS OF DISTRIBUTION ............................................... 19
MANAGEMENT OF THE FUND .............................................. 20
OTHER INFORMATION ................................................... 27
APPENDIX ............................................................
</TABLE>

Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
TTY: (800) 243-1926

PDP 695B (2/99)

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THE FUND

Phoenix Multi-Sector Fixed Income Fund, Inc. is a diversified open-end,
management investment company which was organized as a corporation under
Maryland law on September 20, 1989. On November 18, 1998 the Directors voted to
change the name of the Fund to Phoenix-Goodwin Multi-Sector Fixed Income Fund,
Inc., and to submit the proposed name change to a vote of shareholders as soon
as practicable.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to maximize current income consistent with
the preservation of capital. The Fund will seek to achieve its objective by
investing in U.S. Government Securities, Foreign Securities, Investment Grade
Securities and High Yield-High Risk Securities (as such terms are defined in
the Prospectus). There is no assurance that the Fund will achieve its
investment objective.

INVESTMENT RESTRICTIONS

Fundamental Policies

The following investment restrictions are fundamental policies that cannot
be changed without the approval of the holders of a majority of the Fund's
outstanding voting securities (i.e., the lesser of (a) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (b) more than 50% of the outstanding shares.)

The Fund may not:

1. Underwrite the sale of securities of other issuers.

2. Deal in real estate, but it may purchase marketable securities of companies
which deal in real estate investment trusts.

3. Deal in commodities or commodity contracts, except that the Fund may,
subject to the limitations and conditions set forth herein, enter into
interest rate futures contracts and foreign currency futures contracts on
domestic and foreign exchanges, purchase and write put and call options on
interest rate futures contracts and foreign currency and write covered call
options.

4. Make loans to other persons but may, however, lend portfolio securities (up
to 33% of net assets at the time the loan is made) to brokers or dealers or
other financial institutions not affiliated with the Fund or the Adviser
subject to conditions established by the Adviser (See "Lending Portfolio
Securities").

5. Enter into repurchase agreements and purchase or hold participations in
loans in excess of 5% of net assets, respectively.

6. Borrow money, issue senior securities as defined in the Investment Company
Act of 1940, or pledge, mortgage or hypothecate its assets, except that it
may (i) borrow from banks, enter into reverse repurchase agreements or
employ similar investment techniques, and pledge its assets in connection
therewith, but only if immediately after such borrowing there is asset
coverage of 300%; and (ii) enter into transactions in options, futures, and
options on futures as described in the Fund's Prospectus and Statement of
Additional Information (the deposit of assets in escrow in connection with
the writing of covered put and call options and the purchase of securities
on a when-issued or delayed delivery basis and collateral arrangements with
respect to initial or variation margin deposits for futures contracts will
not be deemed to be pledges of the Fund's assets).

7. Purchase on margin, except that for purposes of this restriction, the
deposit or payment of initial or variation margin in connection with futures
contracts will not be deemed to be a purchase of securities on margin.

8. Sell short, except that the Fund may enter into short sales against the box.

9. The Fund will not invest more than 25% of its assets in any one industry or
group of industries.

10. As a diversified investment company, at least 75% of the Fund's total
assets must be represented by cash or cash items, government securities,
securities of other investment companies and other securities limited in
respect of any one issuer to an amount not greater than 5% of the value of
the total assets of the Fund.

11. The Fund cannot make an investment for the purpose of exercising control or
management, nor may it invest in real estate limited partnerships, or invest
in oil, gas or other mineral leases.

12. The Fund will invest no more than 50% of its assets, determined at the time
of purchase, in High Yield-High Risk Securities.

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Non-Fundamental Policies

The following restrictions of the Fund are not fundamental policies and
may be changed by the Board of Directors of the Fund without shareholder
approval:

1. The Fund will not invest more than 15% of its net assets in illiquid
securities. See "Other Policies--Illiquid Securities."

2. The Fund may invest no more than 15% of its assets in any combination of
zero coupon bonds, step coupon bonds and payment-in-kind ("PIK") bonds.

3. The Fund does not intend to borrow any amount in excess of 10% of its
assets, and would do so only for temporary emergency or administrative
purposes. In addition, to avoid the potential leveraging of its assets, the
Fund will not make additional investments when its borrowings are in excess
of 5% of its total assets.

INVESTMENT TECHNIQUES

The Fund may utilize the following practices or techniques in pursuing its
investment objectives.

Options and Other Hedging Activities

The Fund may write and purchase options, including over-the-counter
options, for hedging purposes. The Fund may also engage in the writing of
covered call option contracts on securities owned at such times and from time
to time as the Adviser shall determine to be appropriate and consistent with
the investment objectives of the Fund. Such options must be listed on an
organized national securities exchange. The aggregate value of the securities
underlying the calls will be limited to not more than 25% of the net assets of
the Fund.

A call option gives the purchaser of the option the right to buy the
underlying security from the writer at the exercise price at any time prior to
the expiration of the contract, regardless of the market price of the security
during the option period. The premium paid to the writer is the consideration
for undertaking the obligations under the option contract. The writer forgoes
the opportunity to profit from an increase in the market price of the
underlying security above the exercise price except insofar as the premium
represents such a profit. The Fund will write only call option contracts and
will receive a premium from the writing of such contracts, and it is believed
that total return to the Fund can be increased through such premiums consistent
with the Fund's investment objective.

The Fund may also write covered call options on securities indexes.
Through the writing of call index options the Fund can achieve many of the same
objectives as through the use of call options on individual securities. Call
options on securities indexes are similar to call options on a security except
that, rather than the right to take delivery of a security at a specified
price, a call option on a securities index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the closing level of
the securities index upon which the call option is based is greater than the
exercise price of the option. The writing of such index call options would be
subject to the present limitation of covered call option writing.

The Fund may purchase options to close out a position, i.e., a "closing
purchase transaction"--the purchase of a call option on the same security with
the same exercise price and expiration date as the call option which it has
previously written on a particular security. When a security is sold from the
Fund's portfolio, the Fund will effect a closing purchase transaction so as to
close out any existing call option on that security, realizing a profit or loss
depending on whether the amount paid to purchase a call option is less or more
than the amount received from the sale thereof. In addition, the Fund may wish
to purchase a call option to hedge its portfolio against an anticipated
increase in the price of securities it intends to purchase or to purchase a put
option to hedge its portfolio against an anticipated decline in securities
prices. No more than 5% of the assets of the Fund may be invested in the
purchase of put and call options, including index options.

The Fund may also engage in foreign currency exchange transactions and in
transactions involving interest rate futures contracts and options thereon as a
hedge against changes in exchange and interest rates. Hedging is a means of
transferring risk that an investor does not desire to assume in an uncertain
interest or exchange rate environment. The Adviser believes it is possible to
reduce the effects of interest and exchange rate fluctuations on the value of
the Fund's portfolio, or sectors thereof, through the use of such strategies.

The costs of, and possible losses incurred from, the foregoing activities
may reduce the Fund's current income and involve a loss of principal. Any
incremental return earned by the Fund resulting from options transactions and
from its hedging activities would be expected to offset anticipated losses or a
portion thereof, and will be treated as long term or short term capital gains.
See "Dividends, Distributions and Taxes."

The Fund will not engage in the foregoing activities for speculative
purposes but only as a hedge against changes resulting from market conditions
in the values of securities in its portfolio, or sectors thereof, or that it
intends to acquire.

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<PAGE>

Futures Contracts, Options on Futures Contracts and Forward Contracts

The Fund may enter into futures contracts to purchase and sell the
security or foreign currency underlying the contracts and is permitted to
purchase put and call options on the contracts. The Fund will engage in these
transactions solely for the purpose of hedging against the effects of changes
in the value of its portfolio securities or those it intends to purchase due to
anticipated changes in interest rates and currency values, and not for purposes
of speculation. In order for the Fund to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the "Code"), it
must, among other things, derive less than 30% of its gross income each taxable
year as gains (without deduction for losses) from the sale or other disposition
of securities held for less than three months. Accordingly, the Fund may have
to limit its ability to trade in futures contracts and related options in order
to comply with this test.

The Fund may enter into both interest rate futures contracts and foreign
currency futures contracts on domestic and foreign exchanges. Entering into a
futures contract to sell a debt security or foreign currency, which may be
referred to as entering into a "short" futures position, creates an obligation
by the seller to deliver a specified amount of the underlying security or
foreign currency at a specified future time and at an agreed upon price.
Entering into a futures contract to purchase a debt security or foreign
currency, which may be referred to as entering into a "long" futures position,
creates an obligation by the purchaser to take delivery of a specified amount
of the underlying security or foreign currency at a specified future time and
at a stated price. The specified instruments delivered or taken at the delivery
date are determined in accordance with the rules of the exchange on which the
futures contract is effected. Although the terms of futures contracts specify
actual delivery or receipt of the underlying commodity, futures contracts
generally are closed out before the delivery date without making delivery or
receiving the underlying instruments. Instead, the futures position is
terminated by entering into an opposite position in the same commodity on the
same (or a linked) exchange.

Upon entering into a futures contract, the Fund will be required to
deposit with a broker an amount of cash or cash equivalent equal to
approximately 1% to 5% of the contract price, which amount is subject to change
by the exchange on which the contract is traded or by the brokers. This amount,
which is known as "initial margin," does not involve the borrowing of funds to
finance the transactions; rather, it is in the nature of a performance bond or
good faith deposit on the contract that will be returned to the Fund upon
termination of the futures contract, assuming all contractual obligations have
been satisfied. Subsequent payments, known as "variation margin," to and from
the broker, will be made daily as the price of the instrument underlying the
futures contract fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking-to-market." Upon
the liquidation of a futures position, final determinations of variation margin
are then made, any additional cash is paid by the Fund or released to it and a
loss or gain is realized.

An interest rate futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a specified
debt security at a stated date, time, place and price. Among the debt
securities on which interest rate futures contracts currently are based are
futures contracts for the purchase or sale of U.S. Government Securities,
including long-term Treasury Bonds, Treasury Notes, three-month Treasury Bills
and Government National Mortgage Association modified pass-through
mortgage-backed securities ("GNMA pass-through securities") and 90-day
commercial paper. Interest rate futures contracts currently are traded in the
United States primarily on the floors of the Chicago Board of Trade ("CBT") and
the International Monetary Market of the Chicago Mercantile Exchange ("CME").
Interest rate futures also are traded on foreign exchanges such as the London
International Financial Futures Exchange ("LIFFE") and the Singapore
International Monetary Exchange ("SIMEX").

The Fund may enter into interest rate futures contracts to protect against
fluctuations in interest rates affecting the value of debt securities that the
Fund either holds or intends to acquire. If interest rates are expected to
increase, the Fund may enter into short interest rate futures contracts on debt
securities that correlate historically with the value of the portfolio
securities of the Fund to hedge against a decline in the value of these
securities. In the event that interest rates increase as anticipated, the value
of the interest rate futures contracts would increase at a similar rate thus
mitigating any decline in the value of the Fund's portfolio securities and
resulting in a higher net asset value than would have occurred without the sale
of the futures contracts. Although the Fund could accomplish a similar result
by selling certain of its debt securities, the liquidity of the futures market
permits it to maintain a defensive position without selling its portfolio
securities.

When the Fund anticipates that interest rates may decline, it may purchase
interest rate futures contracts to hedge against a rise in the price of debt
securities it intends to purchase. The value of certain futures contracts may
fluctuate at approximately the same rate as the value of the debt securities
the Fund intends to purchase, thus permitting the Fund to benefit from the
appreciating cost of the debt securities without actually buying them until the
market has stabilized. The Fund may liquidate the futures contract by offset
and buy the securities in the cash market. When the Fund enters into futures
contracts to hedge against the increasing cost of debt securities it might
purchase in the future, it will maintain any asset, including equity securities
and non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily, in a pledged asset account with its custodian
sufficient to cover the obligations of the Fund with respect to the futures
contracts.

A foreign currency futures contract provides for the future sale and
purchase by the respective parties of a certain amount of a specified foreign
currency at a stated date, time, place and price. At present, foreign currency
futures contracts are based on

3
<PAGE>

British pounds, German deutsche marks, Canadian dollars, Japanese yen, French
francs, Swiss francs, and European Currency Units (ECUs). Foreign currency
futures contracts currently are traded on CME, MidAmerica Commodity Exchange,
the Philadelphia Board of Trade, LIFFE and SIMEX.

The Fund may enter into foreign currency futures contracts to attempt to
establish the rate at which it would be entitled to make a future exchange of
U.S. dollars for another currency. If the Fund anticipates that the value of a
foreign currency may decline against the U.S. dollar, it may enter into futures
contracts to sell that foreign currency in order to attempt to hedge against a
decline in the U.S. dollar value of those of its securities payable in those
currencies.

The Fund may also attempt to establish the price in U.S. dollars of
securities it intends to acquire at a future date by entering into futures
contracts to purchase foreign currencies in which those securities are
denominated to hedge against an increase in price, in U.S. dollars, of those
securities.

The Fund may purchase and write put and call options on interest rate
futures contracts as a hedge against changes in interest rates and on foreign
currency futures contracts as a hedge against fluctuating currency values, in
lieu of purchasing and writing options directly on the underlying security or
currency or purchasing and selling the underlying futures contracts. The Fund
may enter into closing transactions with respect to these options to terminate
existing positions.

When an option is exercised, the writer of the option will deliver to the
holder of the option the futures position together with the accumulated balance
in the option writer's futures margin account. The futures margin account
balance represents the amount by which the market price of the futures contract
exceeds (in the case of a call option) or is less than (in the case of a put
option) the exercise price of the option on the futures contract. The potential
loss related to the purchase of an option on a futures contract is limited to
the premium paid for the option plus related transaction costs.

The purchase of an option on an interest rate futures contract will give
the Fund the right to enter into a futures contract to purchase (in the case of
a call option) or sell (in the case of a put option) a particular debt security
at a specified exercise price at any time prior to the expiration date of the
option. Options on interest rate futures contracts currently are available with
respect to Treasury Bonds, Treasury Notes, and Eurodollars.

The Fund may purchase a put option on an interest rate futures contract to
hedge against a decline in the value of its portfolio securities as a result of
rising interest rates. Purchasing put options on futures contracts is similar
to purchasing put options on the portfolio securities themselves. As interest
rates rise, the value of debt securities generally declines, thus making put
options on interest rate futures more valuable. The Fund may purchase a call
option on an interest rate futures contract to hedge against the risk of an
increase in the price of securities it intends to purchase resulting from
declining interest rates. The purchase of call options in those situations
generally would have the same effect as purchasing call options on the debt
securities. The Fund may write put and call options on interest rates futures
contracts as part of closing sale transactions to terminate its option
positions.

The purchase of options on foreign currency futures contracts gives the
Fund the right to enter into a futures contract to purchase (in the case of a
call option) or sell (in the case of a put option) a particular currency at a
specified price at any time during the period before the option expires.
Options on foreign currency futures contracts are available with respect to
British pounds, German deutsche marks and Swiss francs. The Fund may purchase
options on foreign currency futures as a hedge against fluctuating currency
values.

The Fund is permitted to engage in foreign currency exchange transactions
in order to protect against uncertainty in the level of future exchange rates.
The Fund may conduct its currency exchange transactions on a "spot" (i.e.,
cash) basis at the rate then prevailing in the currency exchange market, or on
a forward basis, by entering into futures (as previously discussed) or forward
contracts to purchase or sell currency. The Fund's dealings in foreign currency
exchange contracts is limited to hedging involving either specific transactions
or portfolio positions.

Transaction hedging is the purchase or sale of foreign currency with
respect to specific receivables or payables of the Fund generally arising in
connection with the purchase or sale of its portfolio securities and accruals
of interest receivable and the Fund's expenses. The Fund may engage in
transaction hedging to protect against a change in the foreign currency
exchange rate between the date on which the Fund contracts to purchase or sell
the security and the settlement date, or to "lock in" the U.S. dollar
equivalent of a dividend or interest payment in a foreign currency. In such
circumstances, the Fund will purchase or sell a foreign currency on a spot
basis at the prevailing spot rate.

Position hedging is the purchase or sale of currency with respect to
portfolio security positions denominated or quoted in that currency. The Fund
may engage in position hedging to protect against a decline in the value of the
currencies in which its portfolio securities are denominated or quoted. To
engage in position hedging, the Fund will enter into foreign currency futures
and related options (as described above), forward foreign currency contracts,
and options on foreign currencies. The Fund also will purchase or sell foreign
currency on a spot basis.

The Fund will not position hedge with respect to a particular currency for
an amount greater than the aggregate market value, determined at the time of
sale of foreign currency, of the securities held (or to be held) in its
portfolio denominated or quoted

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<PAGE>

in or currently convertible into that currency. If the Fund enters into a
position hedging transaction, it will place in a pledged account with its
custodian 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 the total assets the Fund committed to the consummation of the
forward contract. If the value of the securities placed in the pledged account
declines, additional cash or securities will be placed in the account so that
the value of the account would equal the amount of assets the Fund committed to
the currency contract.

A forward foreign currency contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract as agreed upon by the parties, at a price
set at the date of the contract. The holder of a forward contract containing a
cancellation provision has the unilateral right to cancel the contract at
maturity by paying a specified fee. Forward contracts are entered into in the
interbank market conducted directly between currency dealers, which usually are
large commercial banks and brokerage houses, and their customers. Forward
currency contracts are conducted on a principal basis and therefore generally
involve no margin, commissions or other fees. Instead, bid and ask prices are
quoted by dealers who profit from the difference in the spread between those
prices.

Although the use of forward currency contracts does not eliminate
fluctuations in the underlying price of securities, it will establish a rate of
exchange that can be achieved in the future. Forward contracts limit the risk
of loss due to a decline in the value of the hedged currency but also limit any
potential gain that might result in the event the value of the currency
increases.

Unlike a foreign currency futures contract, which has a predetermined
maturity date in any month, a forward currency contract matures any fixed
number of days from the date of the contract agreed upon by the parties. At the
maturity of a forward contract, the Fund may either take or make delivery of
the currency specified in the contract, or, at or prior to maturity, it may
enter into a closing transaction involving the purchase or sale of an
offsetting contract. Because these contracts will be entered into on a
principal basis rather than on an exchange, closing transactions for forward
contracts will be effected with the currency dealer who was a party to the
original forward contract.

The Fund may also purchase or write put and call options on exchanges for
the purpose of hedging against changes in future currency exchange rates. An
option on a foreign currency gives the purchaser, in return for a premium paid
plus related transaction costs, the right to sell (in the case of a put option)
and buy (in the case of a call option), the underlying currency at a specified
price until the option expires. Currency options traded on United States or
other exchanges may be subject to position limits, which may affect the ability
of the Fund to hedge its positions. Foreign currency options currently are
traded on the Philadelphia Stock Exchange, the International Options Clearing
Corp. and LIFFE. The Fund will purchase and sell options on foreign exchanges
to the extent permitted by the Commodity Futures Trading Commission ("CFTC").

The Fund may purchase or write options on currency only when the Adviser
believes that a liquid secondary market exists for these options; however, no
assurance can be given that a liquid secondary market will exist for a
particular option at any specific time.

The value of an option on foreign currency depends upon the value of the
foreign currency when compared to the value of the U.S. dollar. Transactions in
foreign currency options generally involve smaller amounts than those on the
interbank market and therefore option investors may have to deal at prices for
the underlying foreign currencies that are less favorable than those for larger
transactions. In addition, the foreign currency market has neither a systematic
reporting of last sale information nor a regulatory requirement that available
quotations be firm or revised on a timely basis. Available quotation
information usually represents large transactions in the interbank market and
may not reflect transactions valued at less than $1 million. Because the
interbank market in foreign currencies is a global, around-the-clock market,
significant price and rate movements may take place during periods when the
U.S. options markets are closed and therefore may not be reflected in the U.S.
options markets.

The Fund will not use leverage when it enters into long futures contracts
or related options. For each long position the Fund enters into, it will
deposit any asset, including equity securities and non-investment grade debt so
long as the asset is liquid, unencumbered and marked to market daily, having a
value equal to the market value of the contract as collateral in a pledged
account with the custodian of the Fund. The Fund will not enter into futures
contracts and related options if as a result the aggregate of the initial
margin deposits on the Fund's existing futures and premiums paid for unexpired
options exceeds 5% of the fair market value of the Fund's assets.

Using futures contracts and related options involves certain risks,
including (1) the risk of imperfect correlation between fluctuations in the
value of a futures contract and the portfolio security that is being hedged;
(2) the risk that in its use of futures and related options the Fund may not
outperform a fund that does not make use of those instruments; (3) the fact
that no assurance can be given that active markets will be available to offset
positions; (4) the fact that futures contracts and options on futures may be
closed out, by entering into an offsetting position, only on the exchange on
which the contracts were entered into or through a linked exchange; (5) the
risk that the value of the assets underlying the futures contract on the date
of delivery will vary significantly from the amount which the Fund has agreed
to pay or the price at which the Fund has agreed to sell under such contract,
thereby subjecting the Fund to losses; and (6) the fact that successful use of
futures contracts and related options for hedging purposes will depend upon the
ability of the Adviser to predict correctly movements in the direction of the
overall interest rate and foreign currency markets.

5
<PAGE>

Certain exchanges on which futures are traded may establish daily limits
in the amount that the price of a futures or related option contract may
fluctuate from the previous day's settlement price. When a daily limit has been
reached in a particular contract, no trades may be made that day at a price
beyond that limit. If a daily limit were reached, the Fund could be prevented
from liquidating unfavorable positions and thus could be subject to losses. In
certain situations, the Fund would be unable to close a position and also would
have to make daily cash payments of variation margin. Although an increase in
the price of securities could partially or completely offset those losses, no
assurance can be given that the price of the underlying securities will
correlate with the price of the futures contracts and thus offset any losses on
the contracts.

Foreign currency futures contracts and related options, forward foreign
currency contracts and options on foreign currency may be traded on foreign
exchanges. The regulation of transactions on those exchanges may be less
extensive than the regulation of U.S. exchanges. The Fund only would trade
those options approved by the CFTC. Transactions on foreign exchanges also may
not involve a clearing mechanism and related guarantees and may be subject to
the risk of governmental actions affecting trading in, or the prices of,
foreign securities. The value of such positions also could be affected
adversely by (1) other foreign political, legal and economic factors; (2) less
information being available on which to make trading decisions than is
available in the U.S.; (3) a delay in the ability to act on significant events
occurring in the foreign markets during non-business hours in the United
States; (4) different exercise and settlement terms and margin requirements
from those imposed domestically; and (5) less trading volume than on U.S.
exchanges.

An additional risk of foreign exchange transactions is that foreign
exchanges offer less protection against defaults in the forward trading of
currencies than is available on a United States exchange. Because a forward
foreign currency contract is not guaranteed by an exchange or clearinghouse, a
default on the contract would deprive the Fund of unrealized profits or would
force the Fund to cover its commitments for purchase or resale, if any, at the
current market price.

Lending Portfolio Securities

The Fund may lend portfolio securities to broker-dealers or other
institutional borrowers, but only when the borrower pledges cash, U.S.
government securities, or other liquid high-grade debt securities as collateral
to the Fund and agrees to maintain such collateral so that it amounts at all
times to at least 100% of the value of the securities loaned. While securities
are on loan, the borrower will pay the Fund any income earned thereon and the
Fund may invest any cash collateral in portfolio securities, thereby earning
additional income, or receive an agreed-upon amount of income from a borrower
who has delivered equivalent collateral. Furthermore, the Fund may terminate
such loans at any time, and must receive reasonable interest on the collateral
as well as dividends, interest, or other distributions paid on the security
during the loan period. Upon expiration of the loan the borrower of the
securities will be obligated to return to the Fund the same number and kind of
securities as those loaned together with duly executed stock powers. The Fund
must be permitted to vote the proxies if a material event affecting the value
of the security is to occur. The Fund may pay reasonable fees in connection
with the loan, including reasonable fees to the Fund's Custodian for its
services. In the event that the borrower defaults on its obligation to return
borrowed securities because of insolvency or otherwise, the Fund could
experience delays and costs in gaining access to the collateral and could
suffer a loss to the extent that the value of the collateral falls below the
market value of the borrowed securities.

Loan Participations

The Fund may invest up to 5% of its net assets, determined at the time of
investment, in loan participations. A loan participation agreement involves the
purchase of a share of a loan made by a bank to a company in return for a
corresponding share of the borrower's principal and interest payments. Loan
participations of the type in which the Fund may invest include interests in
both secured and unsecured corporate loans.

In the event that a corporate borrower failed to pay its scheduled
interest or principal payments on participations held by the Fund, the market
value of the affected participation would decline, resulting in a loss of value
of such investment to the Fund. Accordingly, such participations are
speculative and may result in the income level and net assets of the Fund being
reduced. Moreover, loan participation agreements generally limit the right of a
participant to resell its interest in the loan to a third party and, as a
result, loan participations will be deemed by the Fund to be illiquid
investments. The Fund will invest only in participations with respect to
borrowers whose creditworthiness is, or is determined by the Adviser to be,
substantially equivalent to that of issuers whose senior unsubordinated debt
securities are rated B or higher by Moody's Investor's Service, Inc.
("Moody's") or Standard & Poor's Corporation ("S&P").

Illiquid Securities

The fund will not invest more than 15% of its net assets in illiquid
securities. Illiquid securities are those that the Fund would not likely be
able to sell in any given seven day period. Securities such as private
placements and other restricted securities, loan participations, securities
with legal or contractual restrictions on resale, repurchase agreements that
mature in more than seven days and OTC options tend to be illiquid. The Board
of Directors of the Fund has adopted procedures for evaluating the liquidity of
securities. The procedures take into account the frequency of trades and quotes
for the security, the number of dealers willing to purchase and sell the
security and the number of other, qualified purchasers, dealer undertakings to
make a market in the security, and the nature of the marketplace for effecting
trades (i.e. the time needed to dispose of the security, the method of
soliciting offers, and the mechanics of transfer).

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<PAGE>

Liquidity issues arise most frequently in two cases. "Rule 144A"
securities and OTC options.

"Rule 144A" securities are restricted securities (those not originally
issued in a public offering) that generally may not be traded. Pursuant to Rule
144A under the Securities Act of 1933, however, these securities can be readily
bought and sold by and among certain types of institutional investors,
including mutual funds. The liquidity procedures adopted by the Fund's Board of
Directors recognize the significance of Rule 144A and the institutional
marketplace it has produced for restricted securities.

The staff of the Securities and Exchange Commission (the "Commission") has
taken the position that purchased OTC options and the assets that "cover" for
written OTC options are illiquid securities unless certain procedures are
followed. The Fund intends to follow those procedures. Thus, the Fund will sell
OTC options only to qualified dealers who agree that the Fund may repurchase
any OTC options it writes for a maximum price to be calculated by a
predetermined formula. In such cases, the OTC option would be considered
illiquid only to the extent that the maximum repurchase price under the formula
exceeds the intrinsic value of the option. The Fund may also follow certain
procedures from time to time which have been adopted by the Fund's Board of
Directors for the purpose of making determinations regarding the liquidity of
securities issued pursuant to Rule 144A under the Securities Act of 1933.

In determining whether a Rule 144A security is liquid, the Board of
Directors may take into account the frequency of trades and quotes for the
security, the number of dealers willing to purchase or sell the security and
the number of other potential purchasers, dealer undertakings to make a market
in the security, and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).

PERFORMANCE INFORMATION

The Fund may, from time to time, quote its "yield" and/or its "total
return" in advertisements, sales literature or reports to shareholders or
prospective investors. Average annual return and yield are computed separately
for each Class of Shares in accordance with the formulas specified by the
Commission. The yield will be computed by dividing the Fund's net investment
income over a 30-day period by an average value (using the average number of
shares entitled to receive dividends and the maximum offering price per share
at the end of the period) all in accordance with applicable regulatory
requirements. Such amount will be compounded for six months and then annualized
for a 12-month period to derive the Fund's yield. Calculated pursuant to this
formula, for the 30-day period ending October 31, 1998, the Class A Shares
yield was 10.55%, the Class B Shares yield was 10.41%, and the Class C Shares
yield was 10.48%.

Average annual total return quotations will be computed by finding the
average annual compounded rates of return over the 1, 5 and 10 year periods
that would equate the initial amount invested to the ending redeemable value,
according to the following formula:

P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years;
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5, or 10 year periods at the end of the 1, 5, or
10 year periods (or fractional portion thereof).

Performance data quoted for a Class of Shares covering periods prior to
the inception of such Class of Shares will reflect historical performance of
Class A shares adjusted for the higher operating expenses applicable to such
Class of Shares.

Advertisements, sales literature and other communications may contain
information about the Fund and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Fund to
respond quickly to changing market and economic conditions. From time to time
the Fund may include specific portfolio holdings or industries, in such
communications. To illustrate components of overall performance, the Fund may
separate its cumulative and average annual returns into income and capital
gains components; or cite separately as a return figure the equity or bond
portion of the Fund's portfolio; or compare the Fund's equity or bond figures
to well-known indices of market performance, including, but not limited to: the
S&P 500 Index, Dow Jones Industrial Average, Lehman Brothers Aggregate Bond
Index, CS First Boston High Yield Index and Salomon Brothers Corporate Bond and
Government Bond Indices.

For the 1 and 5 year periods ended October 31, 1998, the average annual
total return of the Class A was (11.26)% and 3.67, and from inception, December
18, 1989, through October 31, 1998, was 8.64%. For the 1 and 5 year periods
ended October 31, 1998 and since inception, January 3, 1992, for Class B
Shares, the average annual total return was (10.70)%, 3.91%, and 6.52%,
respectively. For Class C Shares for the one year period ended October 31, 1998
and since inception, October 14, 1997, through October 31, 1998 the average
annual total return was (7.36)% and (11.99)%, respectively.

The Fund may also compute aggregate total return for specified periods
based on a hypothetical Class A, Class B or Class C account with an assumed
initial investment of $10,000. The aggregate return is determined by dividing
the net asset value of this

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<PAGE>

account at the end of the specified period by the value of the initial
investment and is expressed as a percentage. Calculation of aggregate total
return reflects payment of the Class A maximum sales charge of 4.75% and
assumes reinvestment of all income dividends and capital gain distributions
during the period.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Adviser places orders for the purchase and sale of securities,
supervises their execution and negotiates brokerage commissions on behalf of
the Fund. It is the practice of the Adviser to seek the best prices and
execution of orders and to negotiate brokerage commissions which in its opinion
are reasonable in relation to the value of the brokerage services provided by
the executing broker. Brokers who have executed orders for the Fund are asked
to quote a fair commission for their services. If the execution is satisfactory
and if the requested rate approximates rates currently being quoted by the
other brokers selected by the Adviser, the rate is deemed by the Adviser to be
reasonable. Brokers may ask for higher rates of commission if all or a portion
of the securities involved in the transaction are positioned by the broker, if
the broker believes it has brought the Fund an unusually favorable trading
opportunity, or if the broker regards its research services as being of
exceptional value. Payment of such commissions is authorized by the Adviser
after the transaction has been consummated. If the Adviser more than
occasionally differs with the broker's appraisal of opportunity or value, the
broker would not be selected to execute trades in the future.

The Adviser believes that the Fund benefits with a securities industry
comprised of many and diverse firms and that the long-term interests of
shareholders of the Fund are best served by its brokerage policies which will
include paying a fair commission rather than seeking to exploit its leverage to
force the lowest possible commission rate. The primary factors considered in
determining the firms to which brokerage orders are given are the Adviser's
appraisal of: the firm's ability to execute the order in the desired manner,
the value of research services provided by the firm, and the firm's attitudes
toward and interest in mutual funds in general including those managed and
sponsored by the Adviser. The Adviser does not offer or promise to any broker
an amount or percentage of brokerage commissions as an inducement or reward for
the sale of shares of the Fund. Over-the-counter purchases and sales are
transacted directly with principal market makers except in those circumstances
where, in the opinion of the Adviser, better prices and executions are
available elsewhere. In the over-the-counter market, securities are usually
traded on a "net" basis with dealers acting as principal for their own accounts
without a stated commission, although the price of the security usually
contains a profit to the dealer. The Fund also expects that securities will be
purchased at times in underwritten offerings where the price includes a fixed
amount of compensation, usually referred to as the underwriter's concession or
discount. The foregoing discussion does not relate to transactions effected on
foreign securities exchanges which do not permit the negotiation of brokerage
commissions and where the Adviser would, under the circumstances, seek to
obtain best price and execution on orders for the Fund.

The Fund 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 Fund. 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
shared pro rata based on the Fund'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 Directors will annually review these procedures or
as frequently as shall appear appropriate.

In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor
federal, state, local and foreign political developments. Many of the brokers
also provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers, as a group, tend
to monitor a broader universe of securities and other matters than the
Adviser's staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of this information will be used in connection with the Fund. While
this information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate

8
<PAGE>

its value and in the opinion of the Adviser it does not reduce the Adviser's
expenses in a determinable amount. The extent to which the Adviser makes use of
statistical, research and other services furnished by brokers is considered by
the Adviser in the allocation of brokerage business but there is no formula by
which such business is allocated. The Adviser does so in accordance with its
judgment of the best interest of the Fund and its shareholders.

During the fiscal years ended October 31, 1996, 1997 and 1998, the Fund
paid no brokerage commissions.

SERVICES OF THE ADVISER

Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") serves as investment
adviser to the Fund. Effective June 1, 1998, National Securities & Research
Corporation ("National") assigned is investment advisory contract to PIC.
National and PIC are both subsidiaries of Phoenix Investment Partners, Ltd.
(formerly Phoenix Duff & Phelps Corporation). PIC, which is located at 56
Prospect Street, Hartford, Connecticut 06115, has served as an investment
adviser for over sixty years. As of December 31, 1998, PIC managed over $
billion in assets (including mutual funds and institutional accounts).

The Adviser is a subsidiary of Phoenix Investment Partners, Ltd. whose
majority shareholder is Phoenix Home Life Mutual Insurance Company ("Phoenix
Home Life"). Phoenix Home Life's principal place of business is located at One
American Row, Hartford, Connecticut.

Phoenix Investment Partners, Ltd. is the 10th largest publicly traded
investment company in the nation, and has served investors for over 70 years.
It manages approximately $50 billion in assets through its investment partners:
Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen, London, Singapore and Fort
Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in Chicago
and Cleveland; Roger Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca
Capital Management LLC (Seneca) in San Francisco; and Phoenix Investment
Counsel, Inc. (Goodwin, Hollister, and Oakhurst divisions) in Hartford,
Sarasota, and Scotts Valley, CA, respectively.

The Adviser provides certain services and facilities required to carry on
the day-to-day operations of the Fund (for which it receives a management fee)
other than the costs of printing and mailing proxy materials, reports and
notices to shareholders; outside legal and auditing services; regulatory filing
fees and expenses of printing the Fund's registration statements (but the
Distributor purchases such copies of the Fund's prospectuses and reports and
communications to shareholders as it may require for sales purposes); insurance
expense; association membership dues; brokerage fees; and taxes.

The current Management Agreement was approved by the Directors of the Fund
on March 16, 1993 and by the shareholders of the Fund on May 7, 1993. The
Management Agreement became effective on May 14, 1993, and it will continue in
effect until lapsed or terminated. The Management Agreement will continue in
effect from year to year if specifically approved annually by a majority of the
Directors who are not interested persons of the parties thereto, as defined in
the Investment Company Act of 1940, as amended ("1940 Act"), and by either (a)
the Directors of the Fund or (b) the vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act). The Agreement may
be terminated without penalty at any time by the Directors or by a vote of a
majority of the outstanding voting securities of the Fund or by the Adviser
upon 60 days' written notice and will automatically terminate in the event of
its "assignment" as defined in Section 2(a)(4) of the 1940 Act.

The Management Agreement provides that the Adviser is not liable for any
act or omission in the course of, or in connection with, rendering services
under the Agreement in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties under the Agreement.
The Agreement permits the Adviser to render services to others and to engage in
other activities.

As compensation for its services, the Adviser receives a fee, which is
accrued daily against the value of the Fund's average daily net assets and is
paid by the Fund monthly. The fee is computed at the annual rate of .55% of the
Fund's average daily net assets of up to $1 billion, .50% of the Fund's average
daily net assets from $1 billion to $2 billion, and .45% of the Fund's average
daily net assets in excess of $2 billion. Total management fees for the fiscal
years ended October 31, 1996, 1997 and 1998 amounted to $1,696,487, $1,860,360
and $1,875,258, respectively.

The Adviser makes its personnel available to serve as officers and
"interested" Directors of the Fund. The Fund has not directly compensated any
of its officers or Directors for services in such capacities except to pay fees
to the Directors who are not otherwise affiliated with the Fund. The Directors
of the Fund are not prohibited from authorizing the payment of salaries to the
officers pursuant to the Management Agreement, including out-of-pocket
expenses, at some future time.

In addition to the management fee, expenses paid by the Fund include: fees
of Directors who are not "interested persons," interest charges, taxes, fees
and commissions of every kind, including brokerage fees, expenses of issuance,
repurchase or redemption of shares, expenses of registering or qualifying
shares for sale (including the printing and filing of the Fund's registration
statements, reports and prospectuses excluding those copies used for sales
purposes which the Distributor purchases), accounting services fees, insurance
expenses, litigation expenses, association membership dues, all charges of
custodians, transfer agents, registrars, auditors and legal counsel, expenses
of preparing, printing and distributing all proxy material, reports and notices
to shareholders, and all costs incident to the Fund's existence as a Maryland
corporation.

9
<PAGE>

The Adviser has agreed, under the terms of the Management Agreement, to
reimburse the Fund to the extent that, in any fiscal year, aggregate annual
expenses of the Fund, exclusive of payments made pursuant to a Rule 12b-1
distribution plan, taxes, brokerage fees, interest, and extraordinary charges
such as litigation costs, exceed the most restrictive expense limitations
imposed by any state in which the Fund's shares are qualified for sale.
Currently, the most restrictive expense limitations applicable to the Fund,
which provides that aggregate annual expenses of an investment company (which
excludes interest, taxes, certain annual distribution plan expenses, litigation
costs, and capital items such as brokerage costs) shall not exceed 2.5% of the
first $30,000,000 of the Fund's average net assets, 2% of the next $70,000,000
of the Fund's average net assets, and 1.5% of the remaining average net assets
of the Fund for any fiscal year. To the extent that the Fund's expenses exceed
this limitation, the Adviser would be required to reduce or rebate its
management fee. The Adviser would not be required to absorb any other Fund
expenses in excess of its fees. In the event legislation were to be adopted in
each state so as to eliminate this restriction, the Fund would take such action
necessary to eliminate this expense limitation. See the "Fund Expenses" table
in the Fund's current Prospectus for further information.

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,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of the Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Fund. The net asset value per share of the 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 Directors 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 if it
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 Directors 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 Directors although the actual calculations may
be made by persons acting pursuant to the direction of the Directors.

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 Fund 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 Fund's behalf.
The Fund 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 Fund's net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.

Alternative Purchase Arrangements

Shares may be purchased from investment dealers at a price equal to their
net asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the
"deferred sales charge alternative"). Orders received by dealers prior to the
close of trading on the New York Stock Exchange are confirmed at the offering
price effective at that time, provided the order is received by the Distributor
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

10
<PAGE>

distributions in cash or to reinvest them in additional shares of the Fund, and
other circumstances. Investors should consider whether, during the anticipated
life of their investment in the Fund, the accumulated continuing distribution
and services fee and contingent deferred sales charges on Class B or C Shares
would be less than the initial sales charge and accumulated distribution and
services fee on Class A Shares purchased at the same time.

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 fee 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 an ongoing distribution and services fee at an annual
rate of up to 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 an ongoing distribution and services fee at
an 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 fee 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 Fund's 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 fee. 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 Trust account will be considered to be held in a separate
sub-account. Each time any Class B Shares in the shareholder's Fund account
(other than those in the sub-account) convert to Class A, an equal pro rata
portion of the Class B Share dividends in the sub-account will also convert to
Class A Shares.

Class C Shares

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 an ongoing distribution and
services fee of up to 1.00% of the Fund's aggregate average daily net assets
attributable to Class C Shares.

Class A Shares--Reduced Sales Charges

Investors choosing Class A Shares may be entitled to reduced sales
charges. The circumstances under 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 funds 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

11
<PAGE>

transfer of shares from an established Phoenix Fund or any other Affiliated
Phoenix 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 or any other Affiliated Phoenix 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 or any other Affiliated Phoenix 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 advisors 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; or (19) 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 (19) 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
the Funds or any other Affiliated Phoenix Fund (other than Phoenix Money Market
Fund Series Class A Shares), if made at the same time by the same "person,"
will be added together to determine whether the combined sum entitles you to an
immediate reduction in sales charges. A "person" is defined in this and the
following sections as (a) any individual, their spouse and minor children
purchasing shares for his or their own account (including an IRA account)
including his or their own trust; (b) a trustee or other fiduciary purchasing
for a single trust, estate or single fiduciary account (even though more than
one beneficiary may exist); (c) multiple employer trusts or Section 403(b)
plans for the same employer; (d) multiple accounts (up to 200) under a
qualified employee benefit plan or administered by a third party administrator;
or (e) trust companies, bank trust departments, registered investment advisers,
and similar entities placing orders or providing administrative 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.

Letter of Intent. If you sign a Letter of Intent, your purchase of any
class of shares of the Funds or any other Affiliated Phoenix Fund (other than
Phoenix Money Market Fund Series Class A Shares), if made by the same person
within a thirteen month period, will be added together to determine whether you
are entitled to an immediate reduction in sales charges. Sales charges are
reduced based on the overall amount you indicate that you will buy under the
Letter of Intent. The Letter of Intent is a mutually non-binding arrangement
between you and the Distributor. Since the Distributor doesn't know whether you
will ultimately fulfill the Letter of Intent, shares worth 5% of the amount of
each purchase will be set aside until you fulfill the Letter of Intent. When
you buy enough shares to fulfill the Letter of Intent, these shares will no
longer be restricted. If, on the other hand, you do not satisfy the Letter of
Intent, or otherwise wish to sell any restricted shares, you will be given the
choice of either buying enough shares to fulfill the Letter of Intent or paying
the difference between any sales charge you previously paid and the otherwise
applicable sales charge based on the intended aggregate purchases described in
the Letter of Intent. You will be given 20 days to make this decision. If you
do not exercise either election, the Distributor will automatically redeem the
number of your restricted shares needed to make up the deficiency in sales
charges received. The Distributor will redeem restricted Class A Shares before
Class C or B Shares, respectively. Oldest shares will be redeemed before
selling newer shares. Any remaining shares will then be deposited to your
account.

Right of Accumulation. Your purchase of any class of shares of the Funds
or any other Affiliated Phoenix Fund, if made over time by the same person may
be added together to determine whether the combined sum entitles you to a
prospective reduction in sales charges. You must provide certain account
information to the Distributor to exercise this right.

Associations. Certain groups or associations may be treated as a "person"
and qualify for reduced Class A Share sales charges. The group or association
must: (1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge;
(3) work through an investment dealer; or (4) not be a group whose sole reason
for existing is to consist of members who are credit card holders of a
particular company, policyholders of an insurance company, customers of a bank
or a broker-dealer or clients of an investment adviser.

Class B and C Shares--Waiver of Sales Charges

The CDSC is waived on the redemption (sale) of Class B and C Shares if the
redemption is made (a) within one year of death (i) of the sole shareholder on
an individual account, (ii) of a joint tenant where the surviving joint tenant
is the deceased's spouse,

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<PAGE>

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) based on the
exercise of exchange privileges among Class B and C Shares of the Funds or any
other Affiliated Phoenix Fund; (f) 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 (g) based on the systematic withdrawal program (Class B Shares only).
If, as described in condition (a) above, an account is transferred to an
account registered in the name of a deceased's estate, the CDSC will be waived
on any redemption from the estate account occurring within one year of the
death. If the Class B or C Shares are not redeemed within one year of the
death, they will remain subject to the applicable CDSC when redeemed.

Automatic Conversion of Class B Shares

Class B Shares will automatically convert to Class A Shares of the same
Fund eight years after they are purchased. Conversion will be on the basis of
the then prevailing net asset value of Class A and B Shares. There is no sales
load, fee or other charge for this feature. Class B Shares acquired through
dividend or distribution reinvestments will be converted into Class A Shares at
the same time that other Class B Shares are converted based on the proportion
that the reinvested shares bear to purchased Class B Shares. The conversion
feature is subject to the continuing availability of an opinion of counsel or a
ruling of the Internal Revenue Service that the assessment of the higher
distribution fees and associated costs with respect to Class B Shares does not
result in any dividends or distributions constituting "preferential dividends"
under the Code, and that the conversion of shares does not constitute a taxable
event under federal income tax law. If the conversion feature is suspended,
Class B Shares would continue to be subject to the higher distribution fee for
an indefinite period. Even if the Fund was 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 Fund.

INVESTOR ACCOUNT SERVICES

The Fund offers accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished
over the phone. Inquiries regarding policies and procedures relating to
shareholder account services should be directed to Shareholder Services at
(800) 243-1574.

Exchanges. Under certain circumstances, shares of any Phoenix Fund may be
exchanged for shares of the same Class of another Phoenix Fund or any other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to the minimum initial
investment requirement of the designated Fund, Series, or Portfolio, except if
made in connection with the Systematic Exchange privilege. Shareholders may
exchange shares held in book-entry form for an equivalent number (value) of the
same class of shares of any other Affiliated Phoenix Fund, if currently
offered. On exchanges with share classes that carry a contingent deferred sales
charge, the CDSC schedule of the original shares purchased continues to apply.
The exchange of shares is treated as a sale and purchase for federal income tax
purposes (see also "Dividends, Distributions and Taxes").

Systematic Exchanges. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Affiliated Phoenix Fund automatically on a
monthly, quarterly, semi-annual or annual basis or may cancel this privilege at
any time. If you maintain an account balance of at least $5,000, or $2,000 for
tax qualified retirement benefit plans (calculated on the basis of the net
asset value of the shares held in a single account), you may direct that shares
be automatically exchanged at predetermined intervals for shares of the same
class of another Affiliated Phoenix Fund. This requirement does not apply to
Phoenix "Self Security" program participants. Systematic exchanges will be
executed upon the close of business on the 10th day of each month or the next
succeeding business day. Systematic exchange forms are available from the
Distributor. Exchanges will be based upon each Fund's net asset value per share
next computed after the close of business on the 10th day of each month (or
next succeeding business day), without sales charge. On Class B and C Share
exchanges, the CDSC schedule of the original shares purchased continues to
apply.

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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<PAGE>

Invest-by-Phone. This expedited investment service allows you to make an
investment in an account by requesting a transfer of funds from the balance of
your bank account. Once a request is phoned in, the Transfer Agent will
initiate the transaction by wiring a request for monies to your commercial
bank, savings bank or credit union via Automated Clearing House (ACH). Your
bank, which must be an ACH member, will in turn forward the monies to the
Transfer Agent for credit to your account. ACH is a computer based clearing and
settlement operation established for the exchange of electronic transactions
among participating depository institutions. This service may also be used to
sell shares of the Fund and direct proceeds of sale through ACH to your bank
account.

To establish this service, please complete the Invest-by-Phone Application
and attach a voided check. Upon the Transfer Agent's acceptance of the
authorization form (usually within two weeks) you may call toll free (800)
367-5877 prior to 3:00 p.m. (Eastern Time) to place your purchase request.
Instructions as to the account number and amount to be invested must be
communicated to the Transfer Agent. The Transfer Agent will then contact your
bank via ACH with appropriate instructions. The purchase is normally credited
to your account the day following receipt of the verbal instructions. The Fund
may delay the mailing of a check for redemption proceeds of Fund shares
purchased with a check or via Invest-by-Phone service until the Fund has
assured itself that good payment has been collected for the purchase of the
shares, which may take up to 15 days. The Fund and the Transfer Agent reserve
the right to modify or terminate the Invest-by-Phone service for any reason or
to institute charges for maintaining an Invest-by-Phone account.

Systematic Withdrawal Program. The Systematic Withdrawal Program allows
you to periodically redeem a portion of your account on a predetermined
monthly, quarterly, semiannual or annual basis. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is made on or
about the 20th day of the month. Shares are tendered for redemption by the
Transfer Agent, as agent for the shareowner, on or about the 15th of the month
at the closing net asset value on the date of redemption. The Systematic
Withdrawal Program also provides for redemptions to be tendered on or about the
10th, 15th or 25th of the month with proceeds to be directed through Automated
Clearing House (ACH) to your bank account. In addition to the limitations
stated below, withdrawals may not be less than $25 and minimum account balance
requirements shall continue to apply.

Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. Participants
in the Program redeeming Class C Shares will be subject to any applicable
contingent deferred sales charge. The purchase of shares while participating in
the withdrawal program will ordinarily be disadvantageous to the Class A or M
Shares investor since a sales charge will be paid by the investor on the
purchase of Class A or M Shares at the same time as other shares are being
redeemed. For this reason, investors in Class A or M Shares may not participate
in an automatic investment program while participating in the Systematic
Withdrawal Program.

Through the Program, Class B shareholders may withdraw up to 1% of their
aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B shareholders redeeming more shares than the
percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed.
Accordingly, the purchase of Class B Shares will generally not be suitable for
an investor who anticipates withdrawing sums in excess of the above limits
shortly after the purchase.

TAX SHELTERED RETIREMENT PLANS

Shares of the Fund and other Affiliated Phoenix Funds may be offered in
connection with employer-sponsored 401(k) plans. Phoenix Home Life and its
affiliates may provide administrative services to these plans and to their
participants, in addition to the services that the Adviser and its affiliates
provide to the Phoenix Funds, and may receive compensation therefor. For
information on the terms and conditions applicable to employee participation in
such plans, including information on applicable plan administrative charges and
expenses, you should consult the plan documentation and employee enrollment
information which is available from participating employers.

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 therefore 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 New York Stock Exchange is restricted or during any emergency which makes
it impracticable for the Fund to dispose of its securities or to fairly value
its net assets during any other period permitted by order of the Securities and
Exchange Commission. Furthermore, the Transfer Agent will not mail redemption
proceeds until checks received for shares purchased have cleared, which may
take up to 15 days after receipt of the check. Redemptions by Class B and Class
C shareholders will be subject to the applicable deferred sales charge, if any.

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<PAGE>

By Mail

You 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 your possession, they must be mailed or presented, duly endorsed
in the full name of the account, with a written request to Equity Planning that
the Fund redeem the shares. See the Fund's current Prospectus for more
information.

By Telephone

Unless you elect in writing not to participate in the Telephone Redemption
Privilege, shares for which certificates have not been issued may be redeemed
by calling (800) 243-1574 and telephone redemptions will also be accepted on
your behalf from your registered representative as described in the Prospectus.
Address and bank account information will be verified, telephone redemption
instructions will be recorded on tape, and all redemptions will be confirmed in
writing. If there has been an address change within the past 60 days, a
telephone redemption will not be authorized. The Fund and the Transfer Agent
will employ reasonable procedures to confirm that telephone instructions are
genuine. To the extent that procedures reasonably designed to prevent
unauthorized telephone redemptions are not followed, the Fund and/or the
Transfer Agent may be liable for following telephone instructions for
redemption transactions that prove to be fraudulent. Broker-dealers other than
Equity Planning may have agreed to bear the risk of any loss resulting from any
unauthorized telephone redemption instruction from the firm or its registered
representatives. However, you would bear the risk of loss resulting from
instructions entered by an unauthorized third party that the Fund and/or the
Transfer Agent reasonably believe to be genuine.

Telephone redemption orders received and accepted by the Transfer Agent on
any day when the Transfer Agent is open for business will be entered at the
next determined net asset value. However, telephone redemption orders received
and accepted by the Transfer Agent after the close of trading hours on the
Exchange will be executed on the following business day. If the amount of the
redemption is $500 or more, the proceeds may be wired to the designated
commercial bank account in the United States. If the amount of the redemption
is less than $500, the proceeds will be sent by mail to the address of record
on your account. With respect to the telephone redemption of shares purchased
by check, such redemption requests will be effected only after the Fund has
assured itself that good payment has been collected for the purchase of shares,
which may take up to 15 days after receipt of the check. This expedited
redemption privilege is not available to HR-10, IRA and 403(b)(7) Plans. In
addition to the Telephone Redemption Privilege, you may also redeem by
telephone through the "Invest-by-Phone" service.

By Check

You may elect to redeem shares held in your account by check. Checks will
be sent to you upon receipt by Equity Planning of a completed application and
signature card (attached to the application). If the signature card accompanies
your initial account application, the signature guarantee section of the form
may be disregarded. However, the Fund reserves the right to require that all
signatures be guaranteed prior to the establishment of a check writing service
account. When an authorization form is submitted after receipt of the initial
account application, all signatures must be guaranteed regardless of account
value.

Checks may be drawn payable to any person in an amount of not less than
$500, provided that immediately after the payment of the redemption proceeds
the balance in your account is $500 or more.

When a check is presented to Equity Planning for payment, a sufficient
number of full and fractional shares in your 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 you 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 you 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. You should make sure that there
are sufficient shares in your 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 Fund 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. You
may not close your 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.

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<PAGE>

Redemption in Kind

To the extent consistent with state and federal law, the Funds may make
payment of the redemption price either in cash or in kind. However, the Funds
have 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 ofthe Fund at the beginning of
such period. This election has been made pursuant to Rule 18f-1 under the
Investment 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 caseof 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 the Fund. A shareholder
receiving such securities would incur brokerage costs when selling the
securities.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Fund intends to continue to qualify as a regulated investment company
("RIC") under certain provisions of the Internal Revenue Code (as amended the
"Code"). If the Fund so qualifies, it will not be subject to federal income tax
on its investment company taxable income (which includes dividends, interest
and the excess of net short-term capital gains over net long-term capital
losses) that it distributes to shareholders. To qualify for treatment as a
regulated investment company, the Fund generally must, among other things, (a)
derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to security loans and gains from the sale or
disposition of stock or securities or foreign currencies and other income
(including but not limited to gains from options, futures and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies; and (b) diversify its holdings so that, at the end of
each quarter of the taxable year (i) at least 50% of the market value of the
Fund's assets are represented by cash, U.S. Government securities, securities
of other regulated investment companies and other securities, with such other
securities of any one issuer limited for the purposes of this calculation to an
amount not greater than 5% of the Fund's total assets and 10% of the
outstanding voting securities of any one issuer; and (ii) not more than 25% of
the value of its total assets is invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other regulated
investment companies). If in any taxable year the Fund does not qualify as a
regulated investment company, all of its taxable income will be taxed to the
Fund at corporate rates.

Under certain state tax laws, the Fund must also comply with the
"short-short" test to qualify for treatment as a RIC for state tax purposes.
Under the "short-short" test the Fund must derive less than 30% of its gross
income each taxable year as gains (without deduction for losses) from the sale
or other disposition of securities for less than three months. 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.

Dividends paid by the Fund will be taxable to shareholders as ordinary
income, except for (a) such portion as may exceed a shareholder's ratable share
of the Fund's earnings and profits, which excess will be applied against and
reduce the shareholder's cost or other tax basis for his shares and (b) amounts
representing a distribution of net capital gains, if any, which are designated
by the Fund as capital gain dividends. If the amount described in (a) above
exceeds the shareholder's tax basis for his shares, the excess over basis will
be treated as gain from the sale or exchange of such shares. The excess of any
net long-term capital gains over net short-term capital losses recognized and
distributed by the Fund and designated by the Fund as a capital gain dividend,
is taxable to shareholders as long-term capital gain regardless of the length
of time a particular shareholder may have held his shares in the Fund.
Dividends and distributions are taxable as described, whether received in cash
or reinvested in additional shares of the Fund.

The Code imposes a 4% nondeductible excise tax on a regulated investment
company, such as the Fund, if it does not distribute to its shareholders (or is
deemed not to have distributed) during the calendar year an amount equal to 98%
of the Fund's ordinary income, with certain adjustments, for such calendar
year, plus 98% of the Fund's capital gains net income (adjusted for certain
losses, as prescribed in the Code) for the 12-month period ending on October 31
of such calendar year. In addition, an amount equal to any undistributed
investment company taxable income or capital gain net income from the previous
calendar year must also be distributed to avoid the excise tax. The excise tax
is imposed on the amount by which the regulated investment company does not
meet the foregoing distribution requirements.

The Code provides that any dividend declared by the Fund in October,
November or December of any calendar year to shareholders of record on a date
in such month will be deemed to have been received by the shareholder on
December 31 of that calendar year, provided that the dividend is actually paid
by the Fund during January of the following year.

Based on the aforementioned, the Fund's policy will be to distribute to
its shareholders at least 90% of net investment company taxable income as
defined above and in the Code and any net realized capital gains for each year
and consistent therewith to meet the distribution requirement of Part I of
subchapter M, including the requirements with respect to diversification of
assets and sources of income, so that the Fund will pay no taxes on net
investment income and net realized capital gains paid to shareholders.

The Fund intends to declare dividends daily. Dividends may be paid from
net investment income. Distribution of net realized short-term and long-term
capital gains will be distributed at least annually. Income dividends will be
paid on the last business

16
<PAGE>

day of the month and reinvested in additional shares at net asset value, unless
the shareholder elects to receive dividends in cash. Whether received in shares
or cash, dividends paid by the Fund from net investment income and
distributions from any net short-term capital gains are taxable to
shareholders as ordinary income. Distributions of net long-term capital gains,
if any, realized on sales of investments for the fiscal year normally will be
distributed following the end of the Fund's fiscal year. Distributions of net
long-term capital gains are taxable to shareholders as such, whether paid in
cash or additional shares of the Fund and regardless of the length of time Fund
shares have been owned by the shareholder. Net short-term capital gains are net
realized short-term capital gains, including net premiums from expired options,
net gains from closing purchase transactions, and net short-term gains from
securities sold upon the exercise of options or otherwise, less any net
realized long-term capital losses. Distributions paid by the Fund are subject
to taxation as of the date of payment, whether received by shareholders in cash
or in shares of the Fund, and whether representing an ordinary distribution or
a long-term capital gains distribution. No dividends or distributions will be
made to a shareholder on shares for which no payment has been received. It is
not anticipated that any of the dividends paid by the Fund will qualify for the
70% dividends received deduction available to corporate shareholders of the
Fund.

The Fund's investments in any regulated futures contracts, non-equity
options, or foreign currency contracts, as those terms are defined in the Code,
are considered section 1256 contracts. The principles of marking-to-market
apply to such contracts such that the contracts are treated as having been sold
for their fair market value on the last business day of the Fund's taxable
year. Generally, 60% of any net gain or loss recognized on the deemed sale, as
well as 60% of the gain or loss with respect to any actual termination
(including expiration), will be treated as long-term capital gain or loss and
the remaining 40% will be treated as short-term capital gain or loss. However,
the gain or loss on certain foreign currency contracts may be treated as
ordinary income under section 988 of the Code.

Premiums from expired call options written by the Fund and net gain or
loss from closing purchase transactions, which are not section 1256 contracts,
are generally treated as short-term capital gain or loss for federal income tax
purposes and are taxable to shareholders as ordinary income. If a written call
option is exercised, the premium is added to the proceeds of sale of the
underlying security, and the gain or loss from such sale will be short or
long-term, depending upon the period such security was held.

Payments which are classified as long-term capital gains distributions
will be taxed to shareholders as long-term capital gains regardless of how long
shareholders have held shares of the Fund. However, if a shareholder holds
shares of the Fund for six months or less, any loss on the sale of the shares
will be treated as a long-term capital loss to the extent of the long-term
capital gains distributions received by such shareholder.

Offsetting positions held by the Fund involving financial futures and
options transactions may be considered, for tax purposes, to constitute
"straddles." Depending on whether certain elections are available and made by
the Fund, losses realized by the Fund on one or more positions in such a
straddle will be deferred to the extent of unrealized gain in the offsetting
position. Moreover, short-term capital losses on straddle positions may be
re-characterized as long-term capital losses, and long-term capital gains may
be treated as short-term capital gains.

The Fund may have to limit its use of futures contracts and related
options in order to comply with the 30% test previously described above.

Under the Code, a shareholder who does not fall within one of certain
exempt categories may be subject to backup withholding at the rate of 31% with
respect to dividends and capital gains distributions paid to shareholders or
reinvested by the Fund and other amounts distributed by it including proceeds
of redemptions, unless such shareholder provides a social security or taxpayer
identification number, certifies as to exemption from backup withholding, and
otherwise complies with applicable requirements of the Code.

Sales and redemptions of shares of the Fund may result in gains or losses
for tax purposes to the extent of the difference between the proceeds from the
shares relinquished and the shareholder's adjusted tax basis for such shares.
If any shares have been held as a capital asset for more than one year, the
gain or loss realized will be long-term capital gain or loss.

The Fund may be subject to a tax on dividend or interest income received
from securities of non-U.S. issuers withheld by a foreign country at the
source. The United States has entered into tax treaties with many foreign
countries which entitle the Fund to a reduced rate of tax or exemption from tax
on such income. It is impossible to determine the effective rate of foreign tax
in advance since the amount of the Fund's assets to be invested within various
countries is not known. The Fund intends to operate so as to qualify for treaty
tax benefits where applicable. To the extent that the Fund is liable for
foreign income taxes withheld at the source, the Fund may operate so as to meet
the requirements of the Code to "pass through" to the Fund's shareholders tax
benefits attributable to foreign income taxes paid by the Fund. If more than
50% of the value of the Fund's total assets at the close of its taxable year is
comprised of securities issued by foreign corporations, the Fund may file an
election with the Internal Revenue Service to "pass through" to the Fund's
shareholders the amount of foreign income taxes paid by the Fund. Pursuant to
this election, shareholders will be required to (i) include in gross income,
even though not actually received, their respective pro rata share of foreign
taxes paid by the Fund; (ii) treat their pro rata share of foreign taxes as
paid by them; and (iii) either

17
<PAGE>

deduct their pro rata share of foreign taxes in computing their taxable income,
or use such share as a foreign tax credit against U.S. income taxes (but not
both). No deduction for foreign taxes may be claimed by a non-corporate
shareholder who does not itemize deductions. The Fund may meet the requirements
to "pass through" to its shareholders foreign income taxes paid, but there can
be no assurance that the Fund will be able to do so. Each shareholder will be
notified within 60 days after the close of each taxable year of the Fund if the
foreign taxes paid by the Fund will "pass through" for that year, and, if so,
the amount of each shareholder's pro rata share (by country) of (i) the foreign
taxes paid and (ii) the Fund's gross income from foreign sources. Shareholders
who are not liable for federal income taxes will not be affected by any such
"pass through" of foreign tax credits.

Distributions and the transactions referred to in the preceding paragraphs
may be subject to state and local income taxes, and the treatment thereof may
differ from the federal income tax consequences discussed herein. Shareholders
are advised to consult with their tax advisers or attorneys.

The Fund is organized as a Maryland corporation. Under current law, as
long as it qualifies for the federal income tax treatment described above, the
Fund itself is not liable for any income or franchise tax in the State of
Maryland.

THE DISTRIBUTOR

Phoenix Equity Planning Corporation ("Equity Planning") acts as the
Distributor for the Fund and as such will conduct a continuous offering
pursuant to a "best efforts" arrangement requiring it to take and pay for only
such securities as may be sold to the public. Equity Planning is an indirect
less than wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company
and an affiliate of the Adviser. Shares of the Fund may be purchased through
investment dealers who have sales agreements with the Distributor. During the
fiscal years ended October 31, 1996, 1997 and 1998, purchasers of shares of the
Fund paid aggregate sales charges of $841,871, $1,111,355, and $747,037,
respectively, of which the Distributor received net commissions of $482,443,
$481,975, and $281,876, respectively, for its services, the balance being paid
to dealers.

The Underwriting Agreement may be terminated at any time on not more than
60 days written notice, without payment of a penalty, by the Distributor, by
vote of a majority of the outstanding voting securities of the Fund, or by vote
of a majority of the Fund's Directors who are not "interested persons" of the
Fund and who have no direct or indirect financial interest in the operation of
the Distribution Plan or in any related agreements. The Underwriting Agreement
will terminate automatically in the event of its assignment.

Dealers with whom the Distributor has entered into sales agreements
received a discount or commission as set forth below:

Multi-Sector Fixed Income Fund

<TABLE>
<CAPTION>
Sales Charge as
a percentage of
-------------------------------------------
Amount of Net Dealer Discount
Transaction Offering Amount Percentage of
at Offering Price Price Invested Offering Price
- ------------------------------- -------------------- -------------------- ----------------
<S> <C> <C> <C>
Under $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50 4.71 4.00
$100,000 but under $250,000 3.50 3.63 3.00
$250,000 but under $500,000 3.00 3.09 2.75
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>

Dealer Concessions

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. 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 Funds and/or for providing other shareholder services. Depending on the
nature of the services, these fees may be paid either from the Funds 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

18
<PAGE>

the investment. In addition, the Distributor may pay the entire applicable
sales charge on purchases of Class A Shares to selected dealers and agents. Any
dealer who receives more than 90% of a sales charge may be deemed to be an
"underwriter" under the Securities Act of 1933.

Administrative Services

Equity Planning also acts as administrative agent of the Fund and as such
performs administrative, bookkeeping and pricing functions for the Fund. 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 Fund, at the following incremental
annual rates.

<TABLE>
<S> <C>
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%
</TABLE>

Percentage rates are applied to the aggregate daily net asset values of
the Fund. 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 its services
during the Fund's fiscal year ended October 31, 1998, Equity Planning received
$211,515.

PLANS OF DISTRIBUTION

The Fund has adopted separate amended and restated distribution plans
under Rule 12b-1 of the 1940 Act for each class of shares of the Fund (the
"Class A Plan," the "Class B Plan" and the "Class C Plan," and collectively the
"Plans"). The Plans permit the Fund to reimburse the Distributor for expenses
incurred in connection with activities intended to promote the sale of shares
of each class of shares of the Fund.

Pursuant to the Plans, the Funds may reimburse the Distributor for actual
expenses of the Distributor up to 0.75% of the average daily net assets of the
Fund's Class B and of Class C Shares. Expenditures under the Plans shall
consist of: (i) commissions to sales personnel for selling shares of the Fund
(including underwriting commissions and financing expenses incurred in
connection with the payment of commissions); (ii) compensation, sales
incentives and payments to sales, marketing and service personnel; (iii)
payments to broker-dealers and other financial institutions which have entered
into agreements with the Distributor in the form of the Dealer Agreement for
Phoenix Funds for services rendered in connection with the sale and
distribution of shares of the Fund; (iv) payment of expenses incurred in sales
and promotional activities, including advertising expenditures related to the
Fund; (v) the costs of preparing and distributing promotional materials; (vi)
the cost of printing the Fund's Prospectus and Statement of Additional
Information for distribution to potential investors; and (vii) such other
similar services that the Board of Directors of the Fund determines are
reasonably calculated to result in the sale of shares of the Fund. In addition,
the Fund will pay 0.25% annually of the average daily net assets of the Fund's
shares for providing services to shareholders, including assistance in
connection with inquiries related to shareholder accounts (the "Service Fee").

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 Fund 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. The Distributor also pays to dealers, as additional compensation
with respect to sales of Class C Shares, 0.75% of the average annual net asset
value of that class.

In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor,
such as services to the Fund's shareholders; or services providing the Fund
with more efficient methods of offering shares to coherent groups of clients,
members or prospects of a participant; or services permitting bulking of
purchases or sales, or transmission of such purchases or sales by computerized
tape or other electronic equipment; or other processing. If the Plans are
terminated in accordance with their terms, the obligations of the Fund to make
payments to the Distributor pursuant to the Plans will cease and the Fund will
not be required to make any payments past the date on which either Plan
terminates.

19
<PAGE>

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.

The Directors have concluded that there is a reasonable likelihood that
the Plans will benefit the Fund and its shareholders. For the fiscal year ended
October 31, 1998, the Fund paid 12b-1 fees in the amount of $2,005,515
($474,342 under the Distribution Plan for Class A shares; $1,492,003 under the
Distribution Plan for Class B shares; and $39,170 under the Distribution Plan
for Class C Shares), of which the Distributor of the Fund received $1,272,993.
The 12b-1 payments were used for: (1) compensating dealers, $_______, (2)
compensating sales personnel, $_______, (3) advertising, $_______, (4) printing
and mailing prospectuses to other than current shareholders, $_______, (5)
service cost, $_______ and (6) other, $_______.

On a quarterly basis, the Fund's Directors review a report on expenditures
under the Plans and the purposes for which expenditures were made. The
Directors conduct an additional, more extensive review annually in determining
whether the Plans will be continued. By their terms, continuation of the Plans
from year to year is contingent on annual approval by a majority of the Fund's
Directors and by a majority of the Directors who are not "interested persons"
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of the Plans or any related agreements (the "Plan
Directors"). The Plans provide that they may not be amended to increase
materially the costs which the Fund may bear pursuant to the Plans without
approval of the shareholders of that class of the Fund and that other material
amendments to the Plans must be approved by a majority of the Plan Directors by
vote cast in person at a meeting called for the purpose of considering such
amendments. The Plans further provide that while they are in effect, the
selection and nomination of Directors who are not "interested persons" shall be
committed to the discretion of the Directors who are not "interested persons."
The Plans may be terminated at any time by vote of a majority of the Plan
Directors or a majority of the outstanding shares of the relevant class of the
Fund.

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 Directors to
suspend distribution fees or amend the Plans.

MANAGEMENT OF THE FUND

The Directors are responsible for the overall supervision of the
operations of the Fund and perform the duties imposed on Directors by the 1940
Act and Maryland General Corporation Law.

Directors and Officers

The following table sets forth information concerning the Directors and
executive officers of the Fund, including their principal occupations during
the past five years. Unless otherwise noted, the address of each executive
officer and Director is 56 Prospect Street, Hartford, Connecticut, 06115-0480.
The Directors and executive officers are listed below:

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ------------------------ ---------------- ---------------------------------------------------------
<S> <C> <C>
Robert Chesek (64) Director Trustee/Director (1981-present) and Chairman (1989-1994)
49 Old Post Road Phoenix Funds. Trustee, Phoenix-Aberdeen Series Fund
Wethersfield, CT 06109 and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Vice President, Common Stock, Phoenix
Home Life Mutual Insurance Company (1980-1994).
Director/Trustee, the National Affiliated Investment
Companies (until 1993).
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------------- --------------- ----------------------------------------------------------------
<S> <C> <C>
E. Virgil Conway (69) Director Chairman, Metropolitan Transportation Authority (1992-
9 Rittenhouse Road present). Trustee/Director, Consolidated Edison Company
Bronxville, NY 10708 of New York, Inc. (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), Accuhealth
(1994-present), Trism, Inc. (1994-present), Realty
Foundation of New York (1972-present), New York Housing
Partnership Development Corp. (Chairman) (1981-present)
and Fund Directions (Advisory Director) (1993-present).
Director/Trustee, Phoenix Funds (1993-present). Trustee,
Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present).
Member, Audit Committee of the City of New York (1981-
1996). Advisory Director, Blackrock Fannie Mae Mortgage
Securities Fund (1989-1996). Member (1990-1995),
Chairman (1992-1995), Financial Accounting Standards
Advisory Council. Director/Trustee, the National Affiliated
Investment Companies (until 1993).

Harry Dalzell-Payne (69) Director Director/Trustee, Phoenix Funds (1983-present). Trustee,
330 East 39th Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Apartment 29G Institutional Mutual Funds (1996-present). Director, Duff &
New York, NY 10016 Phelps Utilities Tax-Free Income Inc. and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present). Director,
Farragut Mortgage Co., Inc. (1991-1994). Director/Trustee,
the National Affiliated Investment Companies (1983-1993).
Formerly a Major General of the British Army.

*Francis E. Jeffries (68) Director Director/Trustee, Phoenix Funds (1995-present). Trustee,
6585 Nicholas Blvd. Phoenix-Aberdeen Series Inc. and Phoenix Duff & Phelps
Apt. 1601 Institutional Mutual Funds (1996-present). Director,
Naples, FL 33963 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.
</TABLE>

21
<PAGE>

*Philip R. McLoughlin (52) Director and Chairman (1997-present), Director (1995-present), Vice
President Chairman (1995-1997) and Chief Executive Officer, (1995-
present), Phoenix Investment Partners, Ltd. Director (1994-
present) and Executive Vice President, Investments (1988-
present), Phoenix Home Life Mutual Insurance Company.
Director/Trustee and President, Phoenix Funds (1989-
present). Trustee and President, Phoenix-Aberdeen Series
Fund and Phoenix Duff & Phelps Institutional Mutual
Funds (1996-present). Director, Duff & Phelps Utilities
Tax-Free Income Inc. (1995-present) and Duff & Phelps
Utility and Corporate Bond Trust Inc. (1995-present).
Director (1983-present) and Chairman (1995-present),
Phoenix Investment Counsel, Inc. Director (1984-present)
and President (1990-present), Phoenix Equity Planning
Corporation. Director (1993-present), Chairman (1993-
present) and Chief Executive Officer (1993-1995), National
Securities & Research Corporation. Director, Phoenix
Realty Group, Inc. (1994-present), Phoenix Realty
Advisors, Inc. (1987-present), Phoenix Realty Investors,
Inc. (1994- present), Phoenix Realty Securities, Inc. (1994-
present), PXRE Corporation (Delaware) (1985-present), and
World Trust Fund (1991-present). Director and Executive
Vice President, Phoenix Life and Annuity Company (1996-
present). Director and Executive Vice President, PHL
Variable Insurance Company (1995-present). Director,
Phoenix Charter Oak Trust Company (1996-present).
Director and Vice President, PM Holdings, Inc. (1985-
present). Director and President, Phoenix Securities Group,
Inc. (1993-1995). Director (1992-present) and President
(1992-1994), W.S. Griffith & Co., Inc. Director, PHL
Associates, Inc. (1995-present). Director/Trustee, the
National Affiliated Investment Companies (until 1993).

Everett L. Morris (70) Director Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee,
Colts Neck, NJ 07722 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Director, Duff &
Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1993- present). Director, Public Service Enterprise Group,
Incorporated (1986-1993). President and Chief Operating
Officer, Enterprise Diversified Holdings, Incorporated
(1989-1993).
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- -------------------------- --------------- -------------------------------------------------------------
<S> <C> <C>
*James M. Oates (52) Director Chairman, IBEX Capital Markets LLC (1997-present).
Managing Director Managing Director, Wydown Group (1994-present).
The Wydown Group Director, Phoenix Investment Partners, Ltd. (1995-present).
IBEX Capital Markets LLC Director/Trustee, Phoenix Funds (1987-present). Trustee,
60 State Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present). Director, AIB
Boston, MA 02109 Govett Funds (1991-present), Blue Cross and Blue Shield
of New Hampshire (1994-present), Investors Financial
Service Corporation (1995-present), Investors Bank & Trust
Corporation (1995-present), Plymouth Rubber Co. (1995-
present), Stifel Financial (1996-present) and Command
Systems Inc. (1998-present). Vice Chairman, Massachusetts
Housing Partnership (1992-present). Member, Chief
Executives Organization (1996-present). Director (1984-
1994), President (1984-1994) and Chief Executive Officer
(1986-1994), Neworld Bank. Director/Trustee, the National
Affiliated Investment Companies (until 1993).

*Calvin J. Pedersen (56) Director Director (1986-present), President (1993-present) and
Phoenix Duff & Phelps Executive Vice President (1992-1993), Phoenix Investment
Corporation Partners, Ltd. Director/Trustee, Phoenix Funds (1995-
55 East Monroe Street present). Trustee, Phoenix-Aberdeen Series Fund and
Suite 3600 Phoenix Duff & Phelps Institutional Mutual Funds (1996-
Chicago, IL 60603 present). President and Chief Executive Officer, Duff &
Phelps Utilities Tax-Free Income Inc. (1995-present),
Duff & Phelps Utilities Income Inc. (1994-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present).

Herbert Roth, Jr. (70) Director Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
P.O. Box 909 Institutional Mutual Funds (1996-present). Director, Boston
Sherborn, MA 01770 Edison Company (1978-present), Landauer, Inc. (medical
services) (1970-present), Tech Ops./Sevcon, Inc. (electronic
controllers) (1987-present), and Mark IV Industries
(diversified manufacturer) (1985-present). Member,
Directors Advisory Council, Phoenix Home Life Mutual
Insurance Company (1998-present). Director, Key Energy
Group (oil rig service) (1988-1994) and Phoenix Home Life
Mutual and Insurance Company (1972-1998). Director/
Trustee, the National Affiliated Investment Companies
(until 1993).

Richard E. Segerson (52) Director Managing Director, Mullin Associates (1993-present),
102 Valley Road Director/Trustee, Phoenix Funds (1993-present), Trustee,
Nw Canaan, CT 06840 Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Institutional Mutual Funds (1996-present). Vice President
and General Manager, Coats & Clark, Inc. (previously
Tootal American, Inc.) (1991-1993). Director/Trustee, the
National Affiliated Investment Companies (1984-1993).
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ----------------------------- --------------- ------------------------------------------------------------
<S> <C> <C>
Lowell P. Weicker, Jr. (67) Director Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund and Phoenix Duff & Phelps
Greenwich, CT 06830 Institutional Mutual Funds (1996-present). Director, UST
Inc. (1995-present), HPSC Inc. (1995-present), Compuware
(1996-present) and Burroughs Wellcome Fund (1996-
present). Visiting Professor, University of Virginia (1997-
present). Director, Duty Free International, Inc. (1997).
Chairman, Dresing, Lierman, Weicker (1995-1996).
Governor of the State of Connecticut (1991-1995).

Michael E. Haylon (40) Executive Director and Executive Vice President-Investments,
Vice Phoenix Investment Partners, Ltd. (1995-present). Director
President (1994-present), President (1996-present), and Executive
Vice President (1994-1996), National Securities &
Research Corporation. Executive Vice President, Phoenix
Funds (1995-present), Phoenix-Aberdeen Series Fund
(1996-present). Executive Vice President (1997-present),
Vice President (1996-1997), Phoenix Duff & Phelps
Institutional Mutual Funds. Director (1994-present),
President (1995-present), and Executive Vice President
(1994-1995), Phoenix Investment Counsel, Inc. Director,
Phoenix Equity Planning Corporation (1995-present).
Senior Vice President, Securities Investments, Phoenix
Home Life Mutual Insurance Company (1993-1995).
Various other positions with Phoenix Home Life Mutual
Insurance Company (1990-1993).

James D. Wehr (41) Senior Vice Managing Director, Fixed Income, (1996-present), Vice
President President (1991-1996), Phoenix Investment Counsel, Inc.
Managing Director, Fixed Income, (1996-present), Vice
President (1993-1996), National Securities & Research
Corporation. Senior Vice President (1997-present), Vice
President (1988-1997), Phoenix Multi-Portfolio Fund; Senior
Vice President (1997-present), Vice President (1990-1997),
Phoenix Series Fund; Senior Vice President (1997-present),
Vice President (1991-1997), The Phoenix Edge Series Fund;
Senior Vice President (1997-present), Vice President (1993-
1997), Phoenix California Tax Exempt Bonds, Inc.; Senior
Vice President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds; and
Senior Vice President, Phoenix Multi-Sector Fixed Income
Fund, Inc,. Phoenix Multi-Sector Short Term Bond Fund,
Phoenix Income and Growth Fund and Phoenix Strategic
Allocation Fund, Inc. (1997-present). Senior Vice President
and Chief Investment Officer, Duff & Phelps Utilities Tax
Free Income Inc. (1997-present). Managing Director, Public
Fixed Income, Phoenix Home Life Insurance Company
(1991-1995). Various positions with Phoenix Home Life
Insurance Company.
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- --------------------------- --------------- --------------------------------------------------------------
<S> <C> <C>
David L. Albrycht (37) Vice Managing Director, Fixed Income (1996-present) and Vice
President President (1995-1996), Phoenix Investment Counsel, Inc.
Managing Director, Fixed Income (1996-present) and
Investment Officer (1994-1996), National Securities &
Research Corporation. Vice President, Phoenix Multi-
Portfolio Fund (1993-present), Phoenix Multi-Sector Short
Term Bond Fund (1993-present), Multi-Sector Fixed
Income Fund (1994-present). Portfolio Manager, Phoenix
Home Life Mutual Insurance Company (1990-1995).

William E. Keen, III (35) Vice Assistant Vice President, Phoenix Equity Planning Corporation
100 Bright Meadow Blvd. President (1996-present). Vice President, Phoenix Funds, Phoenix-
P.O. Box 2200 Aberdeen Series Fund, and Phoenix Duff & Phelps Institutional
Enfield, CT 06083-2200 Mutual Funds (1996-present). Assistant Vice President,
USAffinity Investments LP, (1994-1995). Treasurer and
Secretary, USAffinity Funds (1994-1995). Manager, Fund
Administration, SEI Corporation (1991-1994).

William R. Moyer (54) Vice Senior Vice President and Chief Financial Officer, Phoenix
100 Bright Meadow Blvd. President Investment Partners, Ltd. (1995-present). Director (1998-
P.O. Box 2200 present), Senior Vice President (1990-present), Chief
Enfield, CT 06083-2200 Financial Officer (1996-present), Finance (until 1996) and
Treasurer (1994-1996 and 1998-present), Phoenix Equity
Planning Corporation. Director (1998-present), Senior Vice
President (1990-present), Chief Financial Officer (1996-
present), Finance (until 1996) and Treasurer (1994-present),
Phoenix Investment Counsel, Inc. Director (1998-present),
Senior Vice President (1994-present), Chief Financial Officer
(1996-present), Finance (until 1996), and Treasurer (1994-
present), National Securities & Research Corporation. Vice
President, Phoenix Funds (1990-present), Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Aberdeen Series Fund (1996-present). Senior Vice
President and Chief Financial Officer, Phoenix Duff & Phelps
Investment Management Co. (1996-present). Vice President,
Investment Products Finance, Phoenix Home Life Mutual
Insurance Company (1990-1995). Senior Vice President,
Finance, Phoenix Securities Group, Inc. (1993-1995). Senior
Vice President and Chief Financial Officer (1993-1995) and
Treasurer (1994-1995), W.S. Griffith & Co., Inc. and
Townsend Financial Advisers, Inc. Vice President, the
National Affiliated Companies (until 1993).

Leonard J. Saltiel (44) Vice Managing Director (1996-present), Senior Vice President
President (1994-1996), Phoenix Equity Planning Corporation.
Vice President, Phoenix Funds (1994-present), Phoenix-
Aberdeen Series Fund (1996-present) and Phoenix Duff &
Phelps Institutional Mutual Funds (1996-present). Vice
President, Investment Operations, Phoenix Home Life
Mutual Insurance Company (1994-1995). Various positions
with Home Life Insurance Company and Phoenix Home
Life Mutual Insurance Company (1987-1994).
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
Positions Held Principal Occupations
Name, Address and Age With the Fund During the Past 5 Years
- ----------------------- --------------- ----------------------------------------------------------
<S> <C> <C>
Nancy G. Curtiss (46) Treasurer Vice President, Fund Accounting (1994-present) and
Treasurer (1996-present), Phoenix Equity Planning
Corporation. Treasurer, Phoenix Funds (1994-present),
Phoenix-Aberdeen Series Fund (1996-present) and Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present).
Second Vice President and Treasurer, Fund Accounting,
Phoenix Home Life Mutual Insurance Company (1994-
1995). Various positions with Phoenix Home Life Mutual
Insurance Company (1987-1994).

G. Jeffrey Bohne (51) Secretary Vice President and General Manager, Phoenix Home Life
101 Munson Street Mutual Insurance Co. (1993-present). Vice President,
Greenfield, MA 01301 Mutual Fund Customer Service (1996-present), Vice
President, Transfer Agent Operations (1993-1996), Phoenix
Equity Planning Corporation. Secretary/ Clerk, Phoenix
Funds (1993-present), Phoenix-Aberdeen Series Fund
(1996-present) and Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present). Vice President, Home Life of
New York Insurance Company (1984-1992).
</TABLE>

- -----------

*Messrs. Jeffries, McLoughlin, Oates and Pedersen are "interested persons" of
the Fund within the meaning of the definition set forth in Section 2(a)(19) of
the 1940 Act.

For services rendered to the Fund for the fiscal year ended October 31,
1998, the Trustees received aggregate remuneration of $17,385. 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
Directors. Trustees costs are allocated equally to each of the Series and Funds
within the Fund complex. The foregoing fees do not include the reimbursement of
expenses incurred in connection with meeting attendance. Officers and employees
of the Adviser who are interested persons are compensated by the Adviser and
receive no compensation from the Fund.

For the Fund's last fiscal year ending October 31, 1998, the Trustees
received the following compensation:

<TABLE>
<CAPTION>
Total
Compensation
Pension or From Fund and
Aggregate Retirement Benefits Estimated Fund Complex
Compensation Accrued as Part Annual Benefits (14 Funds)
Name From Fund of Fund Expenses Upon Retirement Paid to Trustees
- ------------------------ -------------- --------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Robert Chesek $1,440 $59,750
E. Virgil Conway+ $1,887 $78,000
Harry Dalzell-Payne+ $1,678 $69,500
Francis E. Jeffries $1,441 $60,000
Leroy Keith, Jr. $1,498 None None $62,250
Philip R. McLoughlin+ $ 0 for any for any $ 0
Everett L. Morris+ $1,621 Trustee Trustee $68,000
James M. Oates+ $1,621 $67,250
Calvin J. Pedersen $ 0 $ 0
Herbert Roth, Jr.+ $1,945 $79,500
Richard E. Segerson $1,707 $70,750
Lowell P. Weicker, Jr. $1,707 $70,000
</TABLE>

- -----------

*This compensation (and the earnings thereon) was deferred pursuant to the
Trustees' Deferred Compensation Plan. At October 31, 1998, the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts

26
<PAGE>

deferred) accrued for Messrs. Jeffries, Morris and Roth was $ , $
and $ , respectively. At present, by agreement among the Fund, the
Distributor and the electing trustee, trustee 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.

On February , 1999, the Directors and officers of the Fund beneficially
owned less than 1% of the outstanding shares of the Fund.

Principal Shareholders
The following table sets forth information as of February , 1999 with
respect to each person who owns of record or is known by the Fund to own of
record or beneficially own 5% or more of any class of the Fund's equity
securities.

<TABLE>
<CAPTION>
Name of Shareholder Class Number of Shares Percent of Class
- -------------------------------------------------- ------- ------------------ -----------------
<S> <C> <C> <C>
Phoenix Home Life
56 Prospect Street
Hartford, CT 06103

MLPF&S for the sole benefit of its customers
ATTN: Fund Administration
4800 Deer Lake Dr. E 3rd Fl.
Jacksonville, FL 32246-6484

Donaldson Lufkin Jenrette Securities Corporation
P.O. Box 2052
Jersey City, NJ 07303-2052

Lincoln Trust Company
FBO Robert L. Churchwell
P.O. Box 5831
Denver, CO 80217-5831
</TABLE>

27
<PAGE>

OTHER INFORMATION

Capital Stock

The Articles of Incorporation, as amended, provide for the issuance of up
to 500,000,000 Shares. The Fund's Shares are divided equally among three
classes, consisting of 166,666,667 Class A Shares, 166,666,667 Class B Shares
and 166,666,666 Class C Shares. The shares of the Fund, when issued, will be
fully paid and non-assessable, have no preference, preemptive, exchange or
similar rights, and will be freely transferable. There is no requirement or
intention to hold annual meetings of sharehholders. Accordingly, there will
normally be no meetings of shareholders for the purpose of elecitng Directors
unless and until such time as less than a majority of the Directors holding
office have been elected by shareholders, at which time the Directors then in
office will call a meeting for the election of Directors. Shareholders may, in
accordance with the Articles of Incorporation, cause a meeting of shareholders
to be held for the purpose of voitng on the removal of a Director or Directors.
Meetings of the shareholders will be called upon written request of
shareholders holding in the aggregate at least 10% of the fund's outstanding
shares. The Directors will provide appropriate assistance to shareholders, in
compliance with the provisions of the 1940 Act, if such a request for a meeting
is received. Except as set forth above, the Directors will continue to hold
office and appoint successor Directors. Shares do not have cumulative voting
rights and the holders of more than 50% of the shares of the Fund voting for
the election of Directors can elect all of the Directors of the Fund if they
choose to do so and in such event the holders of the remaining shares would not
be able to elect any Directors. Shareholders are entitled to redeem their
shares as set forth under "How to Sell Shares."

Independent Accountants

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected independent accountants for the Fund. PricewaterhouseCoopers LLP
audits the Fund's annual financial statements and expresses an opinion thereon.

Custodian and Transfer Agent

State Street Bank and Trust Company, P. O. Box 8301, Boston, MA
02266-8301, serves as the Fund's Custodian. Phoenix Equity Planning
Corporation, 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, CT
06083-2200, serves as the Fund's transfer agent. As compensation, Equity
Planning receives a fee equivalent to $17.95 for each designated shareholder
account plus out-of-pocket expenses. Transfer Agent fees are also utilized to
offset costs and fees paid to subtransfer agents employed by Equity Planning.
State Street Bank and Trust Company serves as a subtransfer agent pursuant to a
Subtransfer Agency Agreement.

Reports to Shareholders

The fiscal year of the Fund ends on October 31. The Fund will send
financial statements to its shareholders at least semi-annually. An annual
report, containing financial statements audited by the Fund's independent
accountants, will be sent to shareholders each year.

Financial Statements

The Financial Statements for the Fund's fiscal year ended October 31,
1998, appearing in the Funds Annual Report to Shareholders, are incorporated
herein by reference.

28
<PAGE>

APPENDIX
Description of Certain Bond Ratings

Moody's Investor's Service, Inc.

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 a 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 are 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.

Standard & Poor's Corporation

BB, B, CCC--Bonds rated BB, B and CCC are regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with terms of the obligation. BB indicates the lowest
degree of speculation and CCC the highest degree of speculation. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties of major risk exposures to adverse
conditions. Ability to pay interest and repay principal may be affected over
time by adverse economic changes. However, business and financial alternatives
can be identified which could assist the obligor in satisfying its debt service
requirement.

B--Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic acitivity
throughout the life of the issue.

CCC--Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C--Bonds are in imminent default in payment of interest or principal.

29
<PAGE>

PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.

PART C--OTHER INFORMATION

Item 23. Exhibits

<TABLE>
<S> <C>
a.1. Articles of Incorporation of the Registrant and amendments thereto, previously filed, filed via EDGAR as
Exhibit 1 with Post-Effective Amendment No. 10 on February 24, 1997 and herein incorporated by
reference.

a.2. Articles of Amendment changing name of Corporation to Phoenix Multi-Sector Fixed Income Fund,
Inc., and Articles Supplementary reclassifying shares filed with Post-Effective Amendment No. 8 on
February 27, 1995, filed via EDGAR as Exhibit 1.1 with Post-Effective Amendment No. 10 on
February 24, 1997 and incorporated herein by reference.

a.3. Articles Supplementary reallocating authorized unissued shares among all classes filed via EDGAR as
Exhibit 1.2 with Post-Effective Amendment No. 13 on February 25, 1998.

a.4. Articles Supplementary reallocating authorized unissued shares among all classes. [To be filed by
amendment.]

b. By-laws of the Registrant, previously filed, filed via EDGAR as Exhibit 2 with Post-Effective Amendment
No. 10 on February 24, 1997 and herein incorporated by reference.

c. Reference is made to Exhibit 1.2, Articles Supplementary to the Articles of Incorporation reclassifying shares.

d.1. Management Agreement between Registrant and National Securities & Research Corporation dated May
14, 1993 filed with Post-Effective Amendment No. 6 on December 30, 1993, filed via EDGAR as Exhibit
5 with Post-Effective Amendment No. 10 on February 24, 1997 and incorporated herein by reference.

d.2. Amendment to Management Agreement dated January 1, 1994, filed with Post-Effective Amendment No. 8
on February 27, 1995, filed via EDGAR as Exhibit 5.1 with Post-Effective Amendment No. 10 on
February 24, 1997 and incorporated herein by reference.

e.1. Underwriting Agreement between Registrant and Phoenix Equity Planning Corporation ("Equity Planning")
dated November 19, 1997, filed via EDGAR as Exhibit 6.1 with Post-Effective Amendment No. 13 on
February 25, 1998 and incorporated herein by reference.

e.2. Form of Sales Agreement between Phoenix Equity Planning Corporation and dealers, filed herewith via
EDGAR as Exhibit 6.2 with Post-Effective Amendment No. 13 on February 25, 1998 and incorporated
herein by reference.

e.3. Form of Supplement to Phoenix Family of Funds Sales Agreement field herewith via EDGAR as Exhibit
6.3 with Post-Effective Amendment No. 13 on February 25, 1998 and incorporated herein by reference.

e.4. Form of Financial Institution Sales Contract for the Phoenix Family of Funds filed herewith via EDGAR as
Exhibit 6.4 with Post-Effective Amendment No. 13 on February 25, 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 with Post-Effective Amendment No. 12 on October 14, 1997 and incorporated herein by
reference.

h.1. Transfer Agency and Service Agreement between Registrant and Phoenix Equity Planning Corporation
dated June 1, 1994, filed with Post-Effective Amendment No. 8 on February 27, 1995, filed via EDGAR as
Exhibit 9 with Post-Effective Amendment No. 10 on February 24, 1997 and incorporated herein by
reference.

h.2. Sub-Transfer Agent Agreement between Phoenix Equity Planning Corporation and State Street Bank and
Trust Company filed via EDGAR as Exhibit 9.1 with Post-Effective Amendment No. 13 on February 25,
1998 and incorporated herein by reference.

h.3. Amended and Restated Financial Agent Agreement between Registrant and Phoenix Equity Planning
Corporation dated November 19, 1997, filed via EDGAR as Exhibit 9.2 with Post-Effective Amendment
No. 13 on February 25, 1998 and incorporated herein by reference.

h.4. First Amendment to the Amended and Restated Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation effective as of February 27, 1998. [To be filed by amendment.]

h.5. Second Amendment to Amended and Restated Financial Agent Agreement between Registrant and
Phoenix Equity Planning Corporation dated July 31, 1998. [To be filed by amendment.]
</TABLE>

C-1
<PAGE>

<TABLE>
<S> <C>
i. Opinion of counsel as to legality of the shares dated February 24, 1995 filed with Post-Effective
Amendment No. 8 on February 27, 1995, filed via EDGAR as Exhibit 10 with Post-Effective Amendment
No. 10 on February 24, 1997 and incorporated herein by reference.

j. Consent of Independent Accountants. [To be filed by amendment.]

k. Not Applicable

l. None.

m.1. Amended and Restated Distribution Plan for Class A Shares, filed via EDGAR as Exhibit 15.1 with
Post-Effective Amendment No. 13 on February 25, 1998 and incorporated herein by reference.

m.2. Amended and Restated Distribution Plan for Class B Shares, filed via EDGAR as Exhibit 15.2 with
Post-Effective Amendment No. 13 on February 25, 1998 and incorporated herein by reference.

m.3. Amended and Restated Distribution Plan for Class C Shares, filed via EDGAR as Exhibit 15.3 with
Post-Effective Amendment No. 13 on February 25, 1998 and incorporated herein by reference.

n. Financial Data Schedules. [To be filed by amendment.]

o.1. Amended and Restated Rule 18f-3 Multi-Class Distribution Plan effective November 1, 1997, filed via
EDGAR with Post-Effective Amendment No. 13 on February 25, 1998.

o.2. First Amendment to Amended and Restated Plan pursuant to Rule 18f-3 effective August 26, 1998. [To
be filed by amendment.]

p.1.* Powers of Attorney for Ms. Curtiss and Messrs. Chesek, Conroy, Dalzell-Payne, Jeffries, Keith, Morris,
Oates, Pedersen, Roth, Segerson and Weicker, filed via EDGAR with Post-Effective Amendment No. 14 on
December 30, 1998.
</TABLE>

- -----------
*Filed herewith

Item 24. Persons Controlled by or Under Common Control With the Fund

No person is controlled by, or under common control with, the Fund.

Item 25. Indemnification

Under Section 2-418 of the Maryland General Corporation Law, with respect
to any proceeding against a present or former director, officer, agent, or
employee of the Registrant (a "corporation representative"), except a
proceeding brought by or on behalf of the Registrant, the Registrant may
indemnify the corporation representative against expenses, including attorney's
fees and judgments, fines, and amounts paid in settlement actually and
reasonably incurred by the corporate representative in connection with the
proceeding, if: (i) he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Registrant; and
(ii) with respect to any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful.

The Registrant is also authorized under Section 2-418 of the Maryland
General Corporation Law to indemnify a corporate representative under certain
circumstances against expenses incurred in connection with the defense of a
suit or action by or in the right of the Registrant. Reference is made to
Article VI of Registrant's Articles of Incorporation, Article VI of
Registrant's By-laws and Section 2-418 of the Maryland General Corporation Law.

Item 26. Business and Other Connections of Investment Adviser

See "Management of the Funds" in the Prospectus and "Services of the
Adviser" and "Management of the Fund" in the Statement of Additional
Information, each of which is included in this Post-Effective Amendment to the
Registration Statement.

For information as to the business, profession, vocation or employment of
a substantial nature of directors and officers of Phoenix Investment Counsel,
Inc., reference is made to the Adviser's current Form ADV (SEC File No.
801-5995) filed under the Investment Advisers Act of 1940 and incorporated
herein by reference.

Item 27. Principal Underwriters

(a) Equity Planning also serves as the principal underwriter for the following
other registrants:

Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities
Fund, Phoenix California Tax Exempt Bonds, Inc., Phoenix Duff & Phelps
Institutional Mutual Funds, Phoenix-Engemann Funds, Phoenix Equity Series
Fund, Phoenix Income and Growth Fund, Phoenix Investment Trust 97, Phoenix
Multi-Portfolio Fund, Phoenix Multi-Sector Short Term Bond Fund, Phoenix
Series Fund, Phoenix Strategic Allocation Fund, Inc., Phoenix Strategic
Equity Series Fund, Phoenix Home Life Variable Universal Life Account,
Phoenix Home Life Variable Accumulation Account, PHL Variable Accumulation
Account, Phoenix Life and Annuity Variable Universal Life Account and PHL
Variable Separate Account MVA1.

C-2
<PAGE>

(b) Directors and executive officers of Phoenix Equity Planning are as follows:

<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name and Principal Address with Distributor with Registrant
- ---------------------------- ------------------------------- -------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480

Philip R. McLoughlin Director and President Director and President
56 Prospect St.
P.O. Box 150480
Hartford, CT 06115-0480

William R. Moyer Director, Senior Vice Vice President
100 Bright Meadow Blvd. President and Chief Financial
P.O. Box 1900 Officer
Enfield, CT 06083-1900

John F. Sharry Executive Vice President, Executive Vice President
56 Prospect St. Retail Distribution
P.O. Box 150480
Hartford, CT 06115-0480

Leonard J. Saltiel Managing Director, Vice President
56 Prospect St. Operations and Service
P.O. Box 150480
Hartford, CT 06115-0480

G. Jeffrey Bohne Vice President, Mutual Fund Secretary
101 Munson Street Customer Service
P.O. Box 810
Greenfield, MA 01302-0810

Nancy G. Curtiss Vice President and Treasurer, Treasurer
56 Prospect St. Fund Accounting
P.O. Box 150480
Hartford, CT 06115-0480

Thomas N. Steenburg Vice President, Counsel and Assistant Secretary
56 Prospect St. Secretary
P.O. Box 150480
Hartford, CT 06115-0480

William E. Keen, III Assistant Vice President, Vice President
100 Bright Meadow Blvd. Mutual Fund Regulation
P.O. Box 1900
Enfield, CT 06083-1900

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

The account books and other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of the Fund, 100 Bright
Meadow Boulevard, Enfield, Connecticut 06083-1900, at the offices of
Registrant's investment adviser, National Securities & Research Corporation, 56
Prospect Street, Hartford, Connecticut 06115, at the offices of the Fund's
Custodian, State Street Bank and Trust Company, P.O. Box 8301, Boston,
Massachusetts 02266-8301, and at the offices of the Transfer Agent, Financial
Agent and Principal Underwriter, Phoenix Equity Planning Corporation, 100
Bright Meadow Boulevard, Enfield, Connecticut 06082-1900.

C-3
<PAGE>

Item 29. Management Services

Not applicable.

Item 30. Undertakings
Not applicable.

C-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant 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 December, 1998.

PHOENIX MULTI-SECTOR FIXED INCOME FUND, INC.

ATTEST: /s/ Thomas N. Steenburg By: /s/ Philip R. McLoughlin
----------------------------- ------------------------------------
Thomas N. Steenburg 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 the 30th day of December, 1998.

<TABLE>
<CAPTION>
Signature Title
- ------------------------------------ ---------------------------------------------
<S> <C>

- ---------------------------------- Director
Robert Chesek*

- ---------------------------------- Director
E. Virgil Conway*

/s/ Nancy G. Curtiss
- ---------------------------------- Treasurer
Nancy G. Curtiss (Principal Financial and Accounting Officer)

- ---------------------------------- Director
Harry Dalzell-Payne*

- ---------------------------------- Director
Francis E. Jeffries*

- ---------------------------------- Director
Leroy Keith, Jr.*

/s/ Philip R. McLoughlin
- ---------------------------------- President and Director
Philip R. McLoughlin (Principal Executive Officer)

- ---------------------------------- Director
Everett L. Morris*

- ---------------------------------- Director
James M. Oates*

- ---------------------------------- Director
Calvin J. Pedersen*

- ---------------------------------- Director
Herbert Roth, Jr.*

- ---------------------------------- Director
Richard E. Segerson*

- ---------------------------------- Director
Lowell P. Weicker, Jr.*

By: /s/ Philip R. McLoughlin
- ----------------------------------
</TABLE>

* Philip R. McLoughlin,

attorney-in-fact pursuant to powers of attorney filed herewith.

S-1

POWER OF ATTORNEY

I, the undersigned officer of the below-named mutual funds, hereby
constitute and appoint Philip R. McLoughlin and Thomas N. Steenburg, or either
of them as my true and lawful attorneys and agents with full power to sign for
me in the capacity indicated below, any or all Registration Statements or
amendments thereto filed with the Securities and Exchange Commission under the
Securities Act of 1933 and/or the Investment Company Act of 1940 relating to
each of said mutual funds, and hereby ratify and confirm my signature as it may
be signed by said attorneys and agents.

Phoenix-Aberdeen Series Fund
Phoenix California Tax Exempt Bonds, Inc.
Phoenix Duff & Phelps Institutional Mutual Funds
The Phoenix Edge Series Fund
Phoenix Equity Series Fund
Phoenix Income and Growth Fund
Phoenix Investment Trust 97
Phoenix Multi-Portfolio Fund
Phoenix Multi-Sector Fixed Income Fund, Inc.
Phoenix Multi-Sector Short Term Bond Fund
Phoenix Series Fund
Phoenix Strategic Allocation Fund, Inc.
Phoenix Strategic Equity Series Fund
Phoenix Worldwide Opportunities Fund

I hereby declare that a photostatic, xerographic or other similar copy of
this original instrument shall be as effective as the original.

I hereby further revoke any and all powers of attorney previously given by
me with respect to the above-named mutual funds, provided that this revocation
shall not affect the exercise of such powers prior to the date hereof.