<PAGE>
Phoenix Investment Partners
ANNUAL REPORT
OCTOBER 31, 1999
GOODWIN
Phoenix-Godwin
Multi-Sector Fixed
Income Fund, Inc.
[LOGO]
PHOENIX
INVESTMENT PARTNERS
<PAGE>
MESSAGE FROM THE PRESIDENT
DEAR SHAREHOLDER:
[PHOTO]
We are pleased to provide this annual report for the Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc. for the 12 months ended October 31, 1999.
On the following pages, your Fund's portfolio manager reviews market events over
the last year and discusses his investment strategy. We hope you find his
comments informative.
As the year comes to a close, this may be a good time to keep in mind a few
"basics of investing" to help you take a long-term market perspective.
REMAIN FOCUSED ON YOUR LONG-TERM INVESTMENT STRATEGY. Redeeming an investment
when the market drops or a fund's share price falls can work against you over
time. You could miss out on opportunities for your investment to grow when the
market or the fund's share price begins to move up. And over time, that could
make a big difference in how successful you are in achieving your financial
goals.
DIVERSIFY YOUR PORTFOLIO. Spreading your investments among different asset
classes and investment styles helps reduce risk. If one type of investment
doesn't perform well over a certain time period, it may be offset by the good
results of another investment.
TAKE ADVANTAGE OF DOLLAR-COST AVERAGING. You can make market fluctuations work
to your advantage by investing a set amount of money at regular intervals. This
is called dollar-cost averaging, and it means that when prices are low you will
be buying more units and when prices are high, you'll buy less. Of course,
periodic investment plans do not assure a profit or protect against a loss in
declining markets. This type of plan involves continuous investments in
securities regardless of fluctuating price levels. Investors should consider
their financial ability to continue purchases through periods of low price
levels.
If you have any questions, please contact your financial advisor or call us at
1-800-243-1574 between 8:00 a.m. and 6:00 p.m. Eastern Time, Monday through
Friday.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
NOVEMBER 19, 1999
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to
investment risks, including possible loss of the
principal invested.
1
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, DAVID L. ALBRYCHT, CFA
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: Phoenix-Goodwin Multi-Sector Fixed Income Fund is appropriate for investors
with a moderate risk tolerance who are seeking to maximize current income
consistent with preservation of capital by investing in a broadly diversified
bond fund. Investors should note that the Fund may hold foreign bonds, and
foreign investments pose additional risk, such as currency fluctuation, less
public disclosure, and political and economic uncertainty. The Fund may also
invest in high-yielding fixed-income securities that are generally subject to
greater market fluctuations and risk of loss of income and principal than are
investments in lower-yielding fixed-income securities.
Q: HOW HAS THE FUND PERFORMED OVER THE LAST 12 MONTHS?
A: For the fiscal year ended October 31, 1999, Class A shares returned 5.97%,
Class B shares returned 5.15%, and Class C shares returned 5.23% compared with a
return of 0.53% for the Lehman Brothers Aggregate Bond Index(1) and an average
return of 3.54% for a peer universe of 104 multi-sector income funds, according
to Lipper, Inc. All performance figures assume reinvestment of distributions and
exclude the effect of sales charges.
Q: CAN YOU PROVIDE A BRIEF OVERVIEW OF THE MARKET OVER THE LAST 12 MONTHS?
A: The bond market is definitely not a repeat of last year. Last year we saw
Russia default, hedge funds unwind around the world, a global liquidity crisis
erupt, and a Fed response of lowering interest rates. Now we are experiencing a
record supply of issues in non-Treasury sectors, Y2K fears, a reduced role for
Wall Street as a market liquidity provider, and a Fed bias toward higher rates.
These were the concerns in the third quarter, but investors have come to realize
that these fears were overblown, and now we are seeing a reversal in yield
spreads. On October 5 of last year, the two-year Treasury yielded 4.02%. On
November 8 of this year, it yielded 5.72%. The difference for the 30-year
Treasury is even more dramatic. Last October 5, it yielded 4.71% compared with
6.06% on November 8, 1999. The "flight to quality" environment has reversed
itself, and for most of this reporting period, higher-yielding sectors were the
best performing.
The Fund performed very well during this period, with higher-yielding
sectors being among the best performers in the market. We have maintained our
strategy of investing in sectors with best relative values, and while this hurt
performance last year, it has benefited results this year. Some of the best
contributors to performance were our holdings in the cable and
telecommunications industries.
Q: HOW IS THE FUND CURRENTLY POSITIONED?
A: We are continuing to follow our investment strategy of investing in the
sectors that offer the best relative value. This approach often leads us to
emphasize evolving sectors of the bond market where inefficiencies exist that we
believe can lead to significant upside potential. For example, our current
sector strategy in emerging-markets bonds emphasizes attractive opportunities in
countries
(1) THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS AN UNMANAGED, COMMONLY USED
MEASURE OF BROAD BOND MARKET TOTAL RETURN PERFORMANCE. THE INDEX IS NOT
AVAILABLE FOR DIRECT INVESTMENT.
2
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC. (CONTINUED)
like Brazil, Poland and Mexico. The portfolio is well diversified by country. We
are purchasing sovereign debt, with good liquidity, and emphasizing
dollar-denominated securities.
Our current strategy in the corporate high-yield sector is to keep the
portfolio evenly split between BB-rated and B-rated issues. We believe there are
attractive opportunities in the European market, particularly in the cable,
telecommunications, and noncyclical sectors, and are focusing our attention
there now.
Q: WHAT IS YOUR OUTLOOK?
A: We believe the current environment is very favorable for fixed-income
investing. The U. S. economy remains surprisingly strong, and although inflation
has picked up momentum, it is still very low. Real yields remain attractive by
historical standards, and all spread sectors now offer exceptional value. For
example, as of October 6, the yield spread for domestic high-yield issues, as
measured by the CS First Boston High Yield Index(2), was 632 basis points over
Treasuries compared with the historical average of 520 basis points.
NOVEMBER 15, 1999
(2) THE CS FIRST BOSTON HIGH YIELD INDEX IS AN UNMANAGED, COMMONLY USED MEASURE
OF TOTAL RETURN PERFORMANCE FOR HIGH-YIELD BONDS. THE INDEX IS NOT AVAILABLE
FOR DIRECT INVESTMENT.
3
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 10/31/99
<TABLE>
<CAPTION>
INCEPTION
TO INCEPTION
1 YEAR 5 Years 10/31/99 DATE
------ ------- ----------- -----------
<S> <C> <C> <C> <C>
Class A Shares at NAV(2) 5.97% 6.89% 8.89% 12/18/89
Class A Shares at POP(3) 0.94 5.86 8.36 12/18/89
Class B Shares at NAV(2) 5.15 6.09 6.34 1/3/92
Class B Shares with CDSC(4) 1.27 6.09 6.34 1/3/92
Class C Shares at NAV(2) 5.23 - (3.68) 10/14/97
Class C Shares with CDSC(4) 5.23 - (3.68) 10/14/97
Lehman Brothers Aggregate Bond
Index(7) 0.53 7.94 Note 5 Note 5
</TABLE>
(1) Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
(2) "NAV" (Net Asset Value) total returns do not include the effect of any
sales charge.
(3) "POP" (Public Offering Price) total returns include the effect of the
maximum front-end 4.75% sales charge.
(4) CDSC (contingent deferred sales charge) is applied to redemptions of
certain classes of shares that do not have a sales charge applied at the
time of purchase. CDSC charges for B shares decline from 5% to 0% over a
five year period. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
(5) Index performance is 7.88% for Class A (since 12/31/89), 6.76% for Class B
(since 12/31/91) and 4.85% for Class C (since 10/31/97), respectively.
(6) This chart illustrates POP returns on Class A shares since inception.
Returns on Class B and Class C shares will vary due to differing sales
charges.
(7) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total return performance.
The index's performance does not reflect sales charges.
All returns represent past performance which may not be indicative of
future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
GROWTH OF $10,000 PERIODS ENDING 10/31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC. CLASS A(6) LEHMAN BROTHERS AGGREGATE BOND INDEX
<S> <C> <C> <C>
12/15/89 $9,525 12/31/89 $10,000
10/31/90 $9,701 10/31/90 $10,503
10/31/91 $12,375 10/31/91 $12,164
10/30/92 $14,121 10/30/92 $13,359
10/29/93 $16,600 10/29/93 $14,946
10/31/94 $15,840 10/31/94 $14,397
10/31/95 $18,030 10/31/95 $16,650
10/31/96 $20,508 10/31/96 $17,624
10/31/97 $22,398 10/31/97 $19,191
10/30/98 $20,862 10/30/98 $20,983
10/29/99 $22,108 10/29/99 $21,094
</TABLE>
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
12/18/89 in Class A shares and reflects the maximum sales charge of 4.75% on the
initial investment. Performance assumes dividends and capital gains are
reinvested. The performance of other share classes will be greater or less than
that shown based on differences in inception dates, fees and sales charges.
SECTOR WEIGHTINGS 10/31/99
As a percentage of bond holdings
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Non-Agency
Mortgage 28%
Corporate 26%
Foreign
Government 21%
Forein
Corporate 8%
Municipal 7%
Asset-Backed 5%
Other 3%
Agency-Mortgage
Backed 2%
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
TEN LARGEST FIXED INCOME HOLDINGS AT OCTOBER 31, 1999 (AS A PERCENTAGE OF TOTAL
NET ASSETS)
<TABLE>
<C> <S> <C>
1. ContiMortgage Home Equity Loan Trust 3.4%
ASSET-BACKED SECURITY
2. Middletown Trust 3.0%
CORPORATE BOND
3. Republic of Brazil 2.5%
FOREIGN GOVERNMENT SECURITY
4. Structured Asset Securities Corp. 95-C1, D 2.2%
NON-AGENCY MORTGAGE-BACKED SECURITY
5. Structured Asset Securities Corp. 95-C4, E 2.2%
NON-AGENCY MORTGAGE-BACKED SECURITY
6. Criimi Mae Trust I 2.2%
NON-AGENCY MORTGAGE-BACKED SECURITY
7. CS First Boston Mortgage Securities Corp. 97-1R, 1M4 2.1%
NON-AGENCY MORTGAGE-BACKED SECURITY
8. Fannie Mae 6.25%, 5/15/29 2.0%
AGENCY MORTGAGE-BACKED SECURITY
9. Republic of Bulgaria IAB 2.0%
FOREIGN GOVERNMENT SECURITY
10. Collins & Aikman Corp. 2.0%
CORPORATE BOND
</TABLE>
INVESTMENTS AT OCTOBER 31, 1999
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--0.5%
U.S. TREASURY NOTES--0.5%
U.S. Treasury Notes 6%, 8/15/09......... AAA $ 1,000 $ 999,160
- -----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $987,031) 999,160
- -----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--2.0%
Fannie Mae 6.25%, 5/15/29............... AAA 5,000 4,600,000
- -----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $4,425,711) 4,600,000
- -----------------------------------------------------------------------------
AGENCY NON MORTGAGE-BACKED
SECURITIES--0.2%
Fannie Mae 6.625%, 9/15/09.............. Aaa(c) 500 497,500
- -----------------------------------------------------------------------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $499,371) 497,500
- -----------------------------------------------------------------------------
MUNICIPAL BONDS--6.9%
CALIFORNIA--2.5%
Fresno Pension Obligation Taxable 7.80%,
6/1/14.................................. AAA 500 515,625
Oakland Pension Obligation Taxable
Series A 6.95%, 12/15/08................ AAA 3,200 3,176,000
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Pasadena Pension Funding Taxable
Series A 7.10%, 5/15/10................. AAA $ 1,900 $ 1,881,000
------------
5,572,625
------------
CONNECTICUT--1.1%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 6.91%,
9/1/12.................................. AAA 1,400 1,363,250
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.57%,
9/1/13(b)............................... AAA 1,075 1,009,156
------------
2,372,406
------------
FLORIDA--1.2%
Palm Beach County Solid Waste Industrial
Development Project B Revenue Taxable
10.50%, 1/1/11(i)(j)(k)................. NR 2,250 675,000
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20.......... AAA 2,000 2,012,500
------------
2,687,500
------------
ILLINOIS--0.9%
Illinois Educational Facilities
Authority-Loyola University Revenue
Taxable Series A 7.84%, 7/1/24.......... AAA 2,000 2,032,500
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
PENNSYLVANIA--1.2%
Pittsburgh Pension General Obligation
Taxable Series B 6.35%, 3/1/13.......... AAA $ 3,000 $ 2,778,750
- -----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $17,143,383) 15,443,781
- -----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--5.1%
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. BBB- 8,495 7,770,270
Green Tree Financial Corp. 94-1, B2
7.85%, 4/15/19.......................... Baa(c) 2,000 1,766,370
Pennant CBO Ltd. 1A, D 13.43%,
3/14/11................................. Ba(c) 2,000 1,945,000
- -----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $12,569,269) 11,481,640
- -----------------------------------------------------------------------------
CORPORATE BONDS--24.8%
AEROSPACE/DEFENSE--0.5%
BE Aerospace, Inc. 9.50%, 11/1/08....... B 1,250 1,203,125
AUTO PARTS & EQUIPMENT--2.0%
Collins & Aikman Corp. 11.50%, 4/15/06.. B 4,750 4,512,500
AUTOMOBILES--0.9%
Titan Tire Corp. 7%, 2/11/00............ NR 2,000 1,985,000
BROADCASTING (TELEVISION, RADIO & CABLE)--1.6%
Century Communications Corp. 8.75%,
10/1/07................................. BB- 500 480,000
Fox/Liberty Networks LLC 8.875%,
8/15/07................................. BBB- 3,000 3,052,500
------------
3,532,500
------------
COMMUNICATIONS EQUIPMENT--3.1%
Metromedia Fiber Network, Inc. Series B
10%, 11/15/08........................... B+ 3,930 3,890,700
Williams Communications Group, Inc.
10.875%, 10/1/09........................ BB- 3,000 3,082,500
------------
6,973,200
------------
ENTERTAINMENT--0.6%
SFX Entertainment, Inc. 9.125%,
12/1/08................................. B- 1,500 1,387,500
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.1%
Horseshoe Gaming LLC Series B 9.375%,
6/15/07................................. B+ $ 1,500 $ 1,492,500
Mohegan Tribal Gaming 8.125%, 1/1/06.... BB 500 483,750
Mohegan Tribal Gaming 8.75%, 1/1/09..... BB- 500 488,750
------------
2,465,000
------------
HOMEBUILDING--0.7%
Horton (D.R.), Inc., 8%, 2/1/09......... BB 1,750 1,505,000
INSURANCE (MULTI-LINE)--3.8%
Middletown Trust Series C 11.75%,
7/15/10(k).............................. A+ 6,485 6,809,314
Willis Corroon Corp. 9%, 2/1/09......... B+ 2,100 1,858,500
------------
8,667,814
------------
LEISURE TIME (PRODUCTS)--0.5%
Bally Total Fitness Holding Corp.
Series D 9.875%, 10/15/07............... B- 1,250 1,184,375
PUBLISHING--0.8%
American Lawyer Media, Inc. Series B
9.75%, 12/15/07......................... B 2,000 1,895,000
RETAIL (SPECIALTY)--0.8%
Musicland Group, Inc. 9%, 6/15/03....... B- 2,000 1,835,000
SERVICES (COMMERCIAL & CONSUMER)--0.7%
ARA Services, Inc. 10.625%, 8/1/00...... BBB- 28 29,295
IT Group, Inc. (The) 11.25%, 4/1/09..... B+ 1,665 1,565,100
------------
1,594,395
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.5%
Nextel Commmunications, Inc. 0%,
10/31/07(d)............................. B- 1,500 1,076,250
TELECOMMUNICATIONS (LONG DISTANCE)--4.5%
Interamericas Communications Corp. 14%,
10/27/07................................ NR 3,930 3,144,000
Metromedia International Group, Inc.
10.50%, 9/30/07......................... NR 756 377,778
NTL, Inc. Series B 10%, 2/15/07......... B- 3,000 3,060,000
RCN Corp. Series B 0%, 2/15/08(d)....... B- 5,775 3,681,563
------------
10,263,341
------------
TELEPHONE--1.4%
Teligent, Inc. 11.50%, 12/1/07.......... CCC 3,330 3,063,600
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
TRUCKERS--1.3%
American Commercial Lines LLC Series B
10.25%, 6/30/08......................... B $ 3,150 $ 2,898,000
- -----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $60,449,584) 56,041,600
- -----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--27.0%
CS First Boston Mortgage Securities
Corp. 97-SPCE C 144A 7.077%,
2/20/07(b).............................. A(c) 4,000 3,861,250
CS First Boston Mortgage Securities
Corp. 98-C1, A1B 6.48%, 5/17/08......... AAA 3,000 2,832,188
CS First Boston Mortgage Securities
Corp. 98-C2, E 7.13%, 1/15/12........... Baa(c) 4,000 3,402,500
CS First Boston Mortgage Securities
Corp. 97-1R, 1M4 144A 7.362%,
2/28/22(b).............................. Baa(c) 4,866 4,724,931
Criimi Mae Trust I 96-C1, A2 144A 7.56%,
6/30/33(b).............................. BBB 5,125 4,865,547
DLJ Mortgage Acceptance Corp. 97-CF2, B2
144A 7.14%, 11/15/08(b)................. BBB- 4,000 3,507,500
First Boston Mortgage Securities Corp.
93-5, B2 7.30%, 7/25/23................. A+(c) 2,839 2,769,001
First Chicago/Lennar Trust 97-CHL1, D
144A 8.075%, 5/29/08(b)................. BB(c) 4,000 3,280,625
First Union - Lehman Brothers - Bank of
America 98-C2, A2 6.56%, 11/18/08....... AAA 500 477,428
Mortgage Capital Funding, Inc. 98-MC2, B
6.549%, 5/18/08......................... Aa(c) 2,500 2,346,875
Norwest Asset Securities Corp. 96-3, B1
7.25%, 9/25/26.......................... A(c) 3,393 3,250,197
Norwest Asset Securities Corp. 96-3, B2
7.25%, 9/25/26.......................... BBB(c) 2,263 2,101,244
Norwest Asset Securities Corp. 97-18, B2
6.75%, 12/25/27......................... BBB(c) 1,030 920,074
Norwest Asset Securities Corp. 98-2, B1
6.50%, 2/25/28.......................... A(c) 2,953 2,691,649
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
Norwest Asset Securities Corp. 98-22, B3
6.25% 9/25/28........................... BBB(c) $ 618 $ 534,185
Norwest Asset Securities Corp. 99-12, B3
6.25%, 5/25/29.......................... BBB(c) 497 415,420
Norwest Asset Securities Corp. 99-17, B3
6.25%, 6/25/29.......................... BBB(c) 560 473,765
Norwest Asset Securities Corp. 99-3, B3
6%, 1/25/29............................. BBB(c) 744 625,774
Norwest Asset Securities Corp. 99-6, B3
6%, 3/25/29............................. BBB(c) 436 357,740
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23................................. AA 906 902,571
Ryland Mortgage Securities Corp. III
92-A, 1A 8.259%, 3/29/30................ A- 217 216,170
SASCO Floating Rate Commercial Mortgage
98-C3A, H 144A 5.959%, 4/25/03(b)(d).... Ba(c) 4,000 3,549,284
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24....................... BBB 5,110 5,074,869
Structured Asset Securites Corp. 95-C4,
E 144A 8.71%, 6/25/26(b)................ BB 5,085 4,886,732
Wilshire Funding Corp. 97-WFC1, M3
7.25%, 8/25/27.......................... Baa(c) 3,319 2,914,296
- -----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $63,181,560) 60,981,815
- -----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--20.6%
ARGENTINA--1.2%
Republic of Argentina Bearer FRB 6.813%,
3/31/05(d).............................. BB 880 781,603
Republic of Argentina RegS 11.75%,
2/12/07(g).............................. BBB- 2,350 2,042,563
------------
2,824,166
------------
BRAZIL--3.9%
Republic of Brazil 14.50%, 10/15/09..... B+ 5,500 5,678,750
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
BRAZIL--CONTINUED
Republic of Brazil C Bond, PIK interest
capitalization, 8%, 4/15/14............. B+ $ 4,762 $ 3,190,438
------------
8,869,188
------------
BULGARIA--2.7%
Repulic of Bulgaria IAB Series PDI
6.50%, 07/28/11(d)...................... B(c) 5,900 4,513,500
Republic of Bulgaria FLIRB Series A
Bearer 2.75%, 7/28/12................... B(c) 2,250 1,518,750
------------
6,032,250
------------
COLOMBIA--1.8%
Republic of Colombia 10.875%, 3/9/04.... BB+ 4,050 4,080,375
CROATIA--1.7%
Croatia Series A 6.456%, 7/31/10(d)..... BBB- 700 567,000
Croatia Series B 6.456%, 7/31/06(d)..... BBB- 3,808 3,270,068
------------
3,837,068
------------
IVORY COAST--0.2%
Ivory Coast PDI Series FRF 1.9%,
3/29/18(d)(h)........................... NR 15,500 571,225
MEXICO--3.5%
United Mexican States Global Bond
11.375%, 9/15/16........................ BB 3,750 4,017,187
United Mexican States Global Bond
11.50%, 5/15/26......................... BB 3,025 3,943,950
------------
7,961,137
------------
MOROCCO--0.8%
Kingdom of Morocco Series A 5.906%,
1/1/09(d)............................... NR 2,000 1,742,500
PERU--1.1%
Republic of Peru PDI 4.50%, 3/7/17...... BB 4,000 2,500,000
POLAND--1.3%
Poland Bearer PDI 6%, 10/27/14(d)....... BBB 3,195 2,835,563
RUSSIA--0.3%
Russia Treasury Bill OFZ Linked Notes
14%, 9/12/01(f)......................... NR 41,898 676,018
SOUTH KOREA--0.7%
Republic of Korea 8.875%, 4/15/08....... BBB- 1,500 1,560,563
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
TURKEY--0.4%
Republic of Turkey 11.875%, 11/5/04..... B $ 1,000 $ 1,013,750
VENEZUELA--0.9%
Republic of Venezuela DCB Series DL
6.313%, 12/18/07(d)..................... B+ 2,429 1,958,027
- -----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $49,600,245) 46,461,830
- -----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--8.1%
BRAZIL--0.5%
Globo Communicacoes e Participacoes SA
144A 10.50%, 12/20/06(b)................ B+ 1,500 1,166,700
CANADA--1.2%
MetroNet Communications Corp. 0%,
6/15/08(d).............................. BBB 3,300 2,574,000
CHILE--0.5%
Petropower I Funding Trust 144A 7.36%,
2/15/14(b).............................. BBB 1,387 1,193,033
CHINA--0.4%
Greater Beijing First Expressways Ltd.
9.50%, 6/15/07.......................... BB 1,700 850,000
GREECE--0.4%
Fage Dairy Industries SA 9%, 2/1/07..... BB 1,000 913,750
IRELAND--0.6%
Esat Telecom Group PLC 11.875%,
11/1/09(h).............................. B+ 1,300 1,409,063
MEXICO--2.2%
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)............................. BBB+(c) 2,827 2,825,530
Nacional Financiera SNC RegS 22%,
5/20/02(e).............................. NR 20,000 2,068,514
------------
4,894,044
------------
NETHERLANDS--0.9%
United Pan-Europe Communications NV 144A
11.25%, 11/1/09(b)(h)................... B- 2,000 2,112,609
POLAND--0.5%
TPSA Finance BV 144A 7.75%,
12/10/08(b)............................. BBB 1,175 1,108,906
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
UNITED KINGDOM--0.9%
Orange PLC 144A 8.75%, 6/1/06(b)........ BB- $ 2,000 $ 2,060,000
- -----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $19,142,711) 18,282,105
- -----------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--0.7%
RUSSIA--0.7%
Lukinter Finance Lukoil Cv. RegS 3.50%,
5/6/02.................................. CCC- 2,375 1,745,625
- -----------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $2,729,608) 1,745,625
- -----------------------------------------------------------------------------
<CAPTION>
SHARES
-------
PREFERRED STOCKS--2.3%
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--2.3%
Global Crossing Holdings Ltd. PIK
10.50%.................................. 50,000 5,275,000
- -----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $4,956,875) 5,275,000
- -----------------------------------------------------------------------------
COMMON STOCKS--0.0%
PAPER & FOREST PRODUCTS--0.0%
Northampton Pulp LLC.(j)(k)............. 3,650 50,187
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $348,720) 50,187
- -----------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
WARRANTS--0.4%
FOREIGN GOVERNMENT--0.0%
Republic of Argentina Warrants(j)....... 1,440 $ 3,708
Republic of Argentina Warrants(j)....... 3,500 788
------------
4,496
------------
TELECOMMUNICATIONS (LONG DISTANCE)--0.4%
FirstCom Corp. 144A Warrants(b)(j)...... 137,550 825,300
- -----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 829,796
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.6%
(IDENTIFIED COST $236,034,068) 222,690,039
- -----------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
SHORT-TERM OBLIGATIONS--0.3%
<S> <C> <C> <C>
COMMERCIAL PAPER--0.3%
Koch Industries, Inc. 5.34%, 11/1/99.... A-1+ $ 715 715,000
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $715,000) 715,000
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $236,749,068) 223,405,039(a)
Cash and receivables, less liabilities--1.1% 2,395,879
---------------------
NET ASSETS--100.0% $ 225,800,918
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $3,298,286 and gross
depreciation of $16,775,886 for federal income tax purposes. At October 31,
1999, the aggregate cost of securities for federal income tax purposes was
$236,882,639.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1999, these securities amounted to a value of $40,977,103 or 18.1% of net
assets.
(c) As rated by Moody's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Par value represents Mexican Pesos.
(f) Par value represents Russian Rubles.
(g) Par value represents Argentine Pesos.
(h) Par value represents Euro.
(i) Security in default.
(j) Non-income producing.
(k) Security valued at fair value as determined in good faith by or under the
direction of the Directors.
See Notes to Financial Statements
9
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments securities at value
(Identified cost $236,749,068) $223,405,039
Foreign currency at value
(Identified cost $2,323,845) 2,309,070
Cash 139,942
Receivables
Interest 3,878,309
Investment securities sold 4,457,503
Fund shares sold 41,774
Other receivables 20,503
Prepaid expenses 5,144
------------
Total assets 234,257,284
------------
LIABILITIES
Payables
Investment securities purchased 7,165,129
Fund shares repurchased 466,942
Income distribution payable 327,120
Transfer agent fee 154,843
Distribution fee 112,394
Investment advisory fee 106,098
Financial agent fee 10,770
Directors' fee 3,933
Accrued expenses 109,137
------------
Total liabilities 8,456,366
------------
NET ASSETS $225,800,918
============
NET ASSETS CONSIST OF:
Capital paid in on shares of common
stock $290,158,119
Undistributed net investment loss (292,270)
Accumulated net realized loss (50,706,127)
Net unrealized depreciation (13,358,804)
------------
NET ASSETS $225,800,918
============
CLASS A
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $125,931,081) 11,606,835
Net asset value per share $10.85
Offering price per share
$10.85/(1-4.75%) $11.39
CLASS B
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $92,725,224) 8,556,286
Net asset value and offering price
per share $10.84
CLASS C
Shares of common stock outstanding,
$0.10 par value,
166,666,666 shares authorized (Net
Assets $7,144,613) 657,527
Net asset value and offering price
per share $10.87
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 24,937,373
Dividends 261,042
Foreign taxes withheld (1,036)
--------------
Total investment income 25,197,379
--------------
EXPENSES
Investment advisory fee 1,437,307
Distribution fee, Class A 355,679
Distribution fee, Class B 1,099,295
Distribution fee, Class C 71,078
Financial agent fee 214,077
Transfer agent 484,545
Printing 64,476
Custodian 29,329
Professional 27,311
Registration 22,309
Directors 15,300
Miscellaneous 9,527
--------------
Total expenses 3,830,233
Custodian fees paid indirectly (13,580)
--------------
Net expenses 3,816,653
--------------
NET INVESTMENT INCOME 21,380,726
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on securities (39,212,910)
Net realized loss on foreign currency (577,772)
Net change in unrealized appreciation (depreciation)
on investments 33,202,090
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions 257,121
--------------
NET LOSS ON INVESTMENTS (6,331,471)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,049,255
==============
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/99 10/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 21,380,726 $ 26,783,292
Net realized gain (loss) (39,790,682) (8,960,343)
Net change in unrealized appreciation (depreciation) 33,459,211 (41,335,563)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 15,049,255 (23,512,614)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (12,709,813) (15,872,614)
Net investment income, Class B (8,978,439) (11,337,234)
Net investment income, Class C (572,784) (293,230)
Net investment income, Class M -- (18,101)
Net realized gains, Class A -- (5,130,635)
Net realized gains, Class B -- (4,099,438)
Net realized gains, Class C -- (23,783)
Net realized gains, Class M -- (3,353)
In excess of net investment income, Class A (143,541) --
In excess of net investment income, Class B (101,400) --
In excess of net investment income, Class C (6,469) --
In excess of net realized gains, Class A -- (902,131)
In excess of net realized gains, Class B -- (720,813)
In excess of net realized gains, Class C -- (4,182)
In excess of net realized gains, Class M -- (589)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (22,512,446) (38,406,103)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,210,416 and 3,001,172
shares, respectively) 24,800,587 38,782,884
Net asset value of shares issued from reinvestment of
distributions
(705,561 and 1,178,336 shares, respectively) 7,902,801 15,112,655
Cost of shares repurchased (5,266,656 and 4,402,648
shares, respectively) (58,965,528) (54,806,672)
------------ ------------
Total (26,262,140) (911,133)
------------ ------------
CLASS B
Proceeds from sales of shares (551,304 and 1,791,306
shares, respectively) 6,181,202 23,227,300
Net asset value of shares issued from reinvestment of
distributions
(372,459 and 616,801 shares, respectively) 4,168,689 7,896,496
Cost of shares repurchased (3,460,848 and 2,809,056
shares, respectively) (38,603,400) (35,444,257)
------------ ------------
Total (28,253,509) (4,320,461)
------------ ------------
CLASS C
Proceeds from sales of shares (297,288 and 595,059 shares,
respectively) 3,326,561 7,751,415
Net asset value of shares issued from reinvestment of
distributions
(32,606 and 18,346 shares, respectively) 365,221 227,373
Cost of shares repurchased (201,989 and 104,857 shares,
respectively) (2,240,507) (1,306,530)
------------ ------------
Total 1,451,275 6,672,258
------------ ------------
CLASS M
Proceeds from sales of shares (0 and 13,228 shares,
respectively) -- 176,977
Net asset value of shares issued from reinvestment of
distributions
(0 and 1,085 shares, respectively) -- 13,901
Cost of shares repurchased (0 and 23,542 shares,
respectively) -- (268,015)
------------ ------------
Total -- (77,137)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARES TRANSACTIONS (53,064,374) 1,363,527
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (60,527,565) (60,555,190)
NET ASSETS
Beginning of period 286,328,483 346,883,673
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF
($292,270) AND $880,311, RESPECTIVELY] $225,800,918 $286,328,483
============ ============
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
YEAR ENDED OCTOBER 31
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.20 $ 13.50 $ 13.27 $ 12.56 $ 11.94
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.96 1.07 1.03 0.94 0.96
Net realized and unrealized gain
(loss) (0.30) (1.88) 0.18 0.72 0.61
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.66 (0.81) 1.21 1.66 1.57
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income (1.00) (1.07) (0.98) (0.95) (0.95)
Dividends from net realized gains -- (0.36) -- -- --
In excess of net investment income (0.01) -- -- -- --
In excess of net realized gains -- (0.06) -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.01) (1.49) (0.98) (0.95) (0.95)
-------- -------- -------- -------- --------
CHANGE IN NET ASSET VALUE (0.35) (2.30) 0.23 0.71 0.62
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.85 $ 11.20 $ 13.50 $ 13.27 $ 12.56
======== ======== ======== ======== ========
Total return(1) 5.97% (6.86)% 9.22% 13.75% 13.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $125,931 $156,317 $191,486 $169,664 $168,875
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.14%(3) 1.08 % 1.04%(2) 1.07% 1.10%
Net investment income 8.59% 8.17 % 7.28% 7.56% 8.10%
Portfolio turnover 133% 157 % 295% 255% 201%
</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) For the year ended October 31, 1999, 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 be 1.13%.
12
See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------
YEAR ENDED OCTOBER 31
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.18 $ 13.48 $ 13.25 $ 12.54 $ 11.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.87 0.96 0.92 0.85 0.86
Net realized and unrealized gain
(loss) (0.29) (1.87) 0.18 0.71 0.61
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.58 (0.91) 1.10 1.56 1.47
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.91) (0.97) (0.87) (0.85) (0.86)
Dividends from net realized gains -- (0.36) -- -- --
In excess of net investment income (0.01) -- -- -- --
In excess of net realized gains -- (0.06) -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.92) (1.39) (0.87) (0.85) (0.86)
-------- -------- -------- -------- --------
CHANGE IN NET ASSET VALUE (0.34) (2.30) 0.23 0.71 0.61
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.84 $ 11.18 $ 13.48 $ 13.25 $ 12.54
======== ======== ======== ======== ========
Total return(1) 5.15% (7.51)% 8.42% 12.84% 12.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $92,725 $124,075 $154,989 $142,869 $144,020
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(5) 1.84 % 1.79%(2) 1.82% 1.85%
Net investment income 7.83% 7.36 % 6.52% 6.80% 7.30%
Portfolio turnover 133% 157 % 295% 255% 201%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-----------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
--------------------- 10/14/97 TO
1999 1998 10/31/97
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.21 $ 13.48 $ 14.22
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.88 0.97 0.04
Net realized and unrealized gain
(loss) (0.30) (1.85) (0.74)
-------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.58 (0.88) (0.70)
-------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.91) (0.97) (0.04)
Dividends from net realized gains -- (0.36) --
In excess of net investment income (0.01) -- --
In excess of net realized gains -- (0.06) --
-------- -------- --------
TOTAL DISTRIBUTIONS (0.92) (1.39) (0.04)
-------- -------- --------
CHANGE IN NET ASSET VALUE (0.34) (2.27) (0.74)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.87 $ 11.21 $ 13.48
======== ======== ========
Total return(1) 5.23% (7.36)% (5.00)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $ 7,145 $ 5,937 $ 284
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(5) 1.88 % 1.62 %(2)(4)
Net investment income 7.83% 7.46 % 4.75 %(4)
Portfolio turnover 133% 157 % 295 %(3)
</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
(5) For the year ended October 31, 1999, 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 be 1.88%.
See Notes to Financial Statements
13
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. (the "Fund") is organized
as a Maryland corporation and is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
Fund's investment objective is to maximize current income consistent with the
preservation of capital by investing in fixed income securities. The Fund offers
Class A, Class B and Class C shares. Class M shares have been closed. Class A
shares are sold with a front-end sales charge of up to 4.75%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a 1% contingent deferred sales charge if redeemed within one year of
purchase. All classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. Income and expenses of the Fund are borne pro rata by the
holders of all classes of shares, except that each class bears distribution
expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service which utilizes information with respect to recent
sales, market transactions in comparable securities, quotations from dealers,
and various relationships between securities in determining value. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. All other securities and assets are
valued at their fair value as determined in good faith by or under the direction
of the Directors.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on ex-dividend date
or, in case of certain foreign securities, as soon as the Fund is notified.
Discounts and premiums are amortized to income using the effective interest
method. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code"), applicable to regulated investment companies, and to
distribute substantially all of its taxable income to its shareholders. In
addition, the Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are declared and recorded daily. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of expiring capital loss carryforwards,
foreign currency gain/loss, and losses deferred due to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
G. OPTIONS:
The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are
14
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 (CONTINUED)
reported as a liability in the Statement of Assets and Liabilities and
subsequently marked-to-market to reflect the current value of the option. The
risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Fund may purchase options which are included in the Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
H. SWAP AGREEMENTS:
The Fund may invest in interest rate swap agreements for the purpose of
hedging against changes in interest rates or foreign currencies. Interest rate
swap agreements involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal). Interest rate swaps are marked to market daily based upon quotations
from market makers and the change, if any, is recorded as unrealized gain or
loss in the Statement of Operations. Net payments of interest are recorded as
interest income. Entering into these agreements involves, to varying degrees,
elements of credit and market risk in excess of the amounts recognized on the
Statement of Assets and Liabilities. Such risks involve the possibility that
there will be no liquid market for these agreements, that the counterparty to
the agreement may default on its obligation to perform and that there may be
unfavorable changes in the fluctuation of interest rates and/or exchange rates.
At October 31, 1999, the Fund had the following swaps outstanding:
<TABLE>
<CAPTION>
UNREALIZED
NOTIONAL APPRECIATION
AMOUNT (DEPRECIATION)
-------- --------------
<C> <S> <C>
$1,387,100 Agreement with Chase Manhattan
Bank terminating on November
1, 2001 to receive interest
at 14.23% in exchange for
payment of 11.875% on EUR
1,300,000.................... $14,787
2,100,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on November 1,
2004 to receive interest at
13.26% in exchange for
payment of 11.25% on
EUR 2,000,000................ 0
-------
$14,787
=======
</TABLE>
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee at an annual rate of
0.55% for the first $1 billion of the average daily net assets of the Fund.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect majority-owned subsidiary of PHL, has advised the Fund that it
retained net selling commissions of $18,370 for Class A shares, and deferred
sales charges of $225,596 for Class B and $4,202 for Class C shares for the year
ended October 31, 1999. In addition, the Fund pays PEPCO a distribution fee at
an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00%
for Class C shares of the average daily net assets of the Fund. The Distribution
Plan for Class A shares provides for fees to be paid up to a maximum on an
annual basis of 0.30%; the Distributor has voluntarily agreed to limit the fee
to 0.25%. The Distributor has advised the Fund that of the total amount expensed
for the year ended October 31, 1999, $949,721 was retained by the Distributor,
$528,894 was paid to unaffiliated participants, and $47,437 was paid to W.S.
Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC, Inc. (subagent to PEPCO), plus (2) the documented cost of
PEPCO to provide financial reporting, tax services and oversight of subagent's
performance. The current fee schedule of PFPC, Inc ranges from 0.085% to 0.0125%
of the average daily net asset values of the Fund. Certain minimum fees and fee
waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended October 31, 1999, transfer
agent fees were $484,545 of which PEPCO retained $192,321 which is net of the
fees paid to State Street.
At October 31, 1999, PHL and affiliates held 77,931 Class A shares, and 15
Class B shares of the Fund with a combined value of $845,714.
3. PURCHASE AND SALE OF SECURITIES
During the year ended October 31, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency, securities,
amounted to $277,276,807 and $329,242,897, respectively. Purchases and sales of
long-term U.S. Government and agency securities amounted to $60,832,451, and
$60,850,928, respectively.
15
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 (CONTINUED)
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as the Fund's ability to
repatriate such amounts.
5. LOAN AGREEMENTS
The Fund may invest in direct debt instruments, which are interests in amounts
owed by a corporate, governmental, or other borrower to lenders or lending
syndicates. The Fund's investments in loans may be in the form of participations
in loans or assignments of all or a portion of loans from third parties. A loan
is often administered by a bank or other financial institution (the lender) that
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. When investing in a loan participation, the
Fund has the right to receive payments of principal, interest and any fees to
which it is entitled only from the lender selling the loan agreement and only
upon receipt by the lender of payments from the borrower. The Fund generally has
no right to enforce compliance with the terms of the loan agreement with the
borrower. As a result, the Fund may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. For loans which the
Fund is a participant, the Fund may not sell its participation in the loan
without the lender's prior consent. When the Fund purchases assignments from
lenders it acquires direct rights against the borrower on the loan. Direct
indebtedness of emerging countries involves a risk that the government entities
responsible for the repayment of the debt may be unable, or unwilling to pay the
principal and interest when due.
6. CAPITAL LOSS CARRYOVERS
The Fund has capital loss carryover of $50,275,557 comprised of $8,655,748 and
$41,619,809 expiring in 2006 and 2007, respectively, which may be used to offset
future capital gains.
7. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded
reclassifications in the capital acocunts. These reclassifications have no
impact on the net asset value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is considered to be
more informative to the shareholder. As of October 31, 1999, the Fund decreased
undistributed net investment income by $40,861, increased accumulated net
realized loss by $143,865 and increased capital paid in on shares of common
stock by $184,726.
This report is not authorized for distribution to prospective investors in the
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. unless preceded or
accompanied by an effective Prospectus which includes information concerning the
sales charge, Fund's record and other pertinent information.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Directors and Shareholders of
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. (formerly known as
Phoenix Multi-Sector Fixed Income Fund, Inc.) (the "Fund") at October 31, 1999
and the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1999
17
<PAGE>
RESULTS OF SHAREHOLDER MEETING (UNAUDITED)
A special meeting of Shareholders of the Phoenix-Goodiwn Multi-Sector Fixed
Income Fund, Inc. was held on August 11, 1999 to approve the following matter:
1. Approval of a change in the name of the Fund to Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc.
On the record date for this meeting there were 22,708,552 shares outstanding and
61.65% of the shares outstanding and entitled to vote were present by proxy.
NUMBER OF VOTES
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- --------- ---------
<S> <C> <C> <C>
1. Approval of name change 13,465,811 126,622 406,735
</TABLE>
18
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED
INCOME FUND, INC.
101 Munson Street
Greenfield, Massachusetts 01301
DIRECTORS
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
William R. Moyer, Executive Vice President
John F. Sharry, Executive Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
Michael Kearney, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
TRANSFER AGENT
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO CONTACT US
The Fund Connection 1-800-243-1574
Customer Service 1-800-243-1574 (option 0)
Investment Strategy Hotline 1-800-243-4361 (option 2)
Marketing Department 1-800-243-4361 (option 3)
Text Telephone 1-800-243-1926
World Wide Web address:
WWW.PHOENIXINVESTMENTS.COM
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO]
PHOENIX
INVESTMENT PARTNERS
PRSRT STD
U.S. Postage
PAID
Andrews
Associates
PXP 660 (12/99)
