PHOENIX ASSET RESERVE
MARKET AND PORTFOLIO REVIEW
Fund Description: Phoenix Asset Reserve Fund invests in a wide variety of
short-term fixed-income securities. These securities may include U.S.
treasury, agency, corporate and yankee bonds, as well as mortgage-backed and
asset-backed securities. The Fund emphasizes the most undervalued sectors of
the market and de-emphasizes the most overvalued sectors.
Investment Environment: Over the twelve-month reporting period ended October
31, 1995, the fixed-income investment environment has improved dramatically.
A favorable combination of slowing economic growth and moderate inflation has
translated into a strong bond market rally. This rally could be extended if
Congress passes significant deficit reduction legislation. Also, the recent
strength of the U.S. dollar is a positive factor for continued moderate
inflation.
- ------------------------------ [LINE GRAPH] ----------------------------------
12/15/89
10/31/90
10/31/91 [PLOT POINTS UNAVAILABLE--REQUEST FROM CLIENT?]
10/31/92
10/31/93
10/31/94
10/31/95
- --------------------------------------------------------------------------------
This chart assumes an initial gross investment of $10,000 made on July 6,
1992 (inception of the Fund).
Total returns for Class A shares reflect the maximum sales charge of 2.25% on
the initial investment and assume reinvestment of dividends and capital
gains. Class B shares reflect the 2% contingent deferred sales charge (CDSC),
which is applicable on all shares redeemed during the 1st year after purchase
and 1.5% for all shares redeemed during the 2nd year after purchase (scaled
down to 1%-3rd year and 0% thereafter). The investment return and principal
value of the investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less at redemption than at purchase price.
Returns indicate past performance, which is not predictive of future
performance.
*The Merrill Lynch Corporate Medium Quality Bond Index is an unmanaged but
commonly used index that tracks the returns of 410 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.
**Foreign investing involves special risks, such as currency fluctuation, less
public disclosure as well as economic and political risks.
Portfolio Review: The Fund turned in strong results over this reporting
period. For the twelve-month period ended October 31, 1995, the Fund's Class
A shares produced a total return of 10.27% and Class B shares returned 9.71%.
As measured by the Merrill Lynch Corporate Medium Quality Bond Index, the
market returned 9.49% for the same period. Our outperformance can be
explained by the overweighting in investment-grade corporates, high-yield
corporates and commercial mortgage-backed securities.
Outlook: Our outlook for the bond market remains positive. In the months
ahead, we expect to de-emphasize U.S. treasury securities in favor of more
attractive market sectors. Currently, we have increased exposure to
commercial mortgage-backed securities as positive market technicals have
resulted in attractive valuations. We also continue to overweight the yankee
bond sector. Our focus is on Argentinean and Brazilian corporate bonds, given
the improving political and economic momentum in these countries. Lastly, we
have decreased our exposure to non-dollar securities since we believe that
U.S. dollar-denominated securities represent better relative value.
Average Annual Total Returns for Periods Ending 10/31/95
From Inception
7/6/92 to
1 Year 10/31/95
- -----------------------------------------------------------------------
Class A with 2.25% sales charge 7.71% 5.10%
- -----------------------------------------------------------------------
Class A at net asset value 10.27% 5.80%
- -----------------------------------------------------------------------
Class B with CDSC 7.71% 5.26%
- -----------------------------------------------------------------------
Class B at net asset value 9.71% 5.26%
- -----------------------------------------------------------------------
Merrill Lynch Corporate Medium
Quality Bond Index* 9.49% 5.90%
- -----------------------------------------------------------------------
<PAGE>
Phoenix Asset Reserve
INVESTMENTS AT OCTOBER 31, 1995
MOODY'S
BOND PAR
RATING VALUE
(Unaudited) (000) VALUE
--------- ----- --------------
U.S. GOVERNMENT SECURITIES--10.6%
U.S. Treasury Notes--3.6%
U.S. Treasury Notes 6%, '97 Aaa $500 $ 503,220
-------------
Agency Mortgage-Backed Securities--7.0%
GNMA 9%, '25 Aaa 927 974,687
-------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $1,475,268) 1,477,907
-------------
NON-CONVERTIBLE BONDS--58.9%
Airlines--1.1%
AMR Corp. 7.75%, '97 Baa 155 158,215
-------------
Auto & Trucks--2.0%
Cummins Engine, Inc. 10.39%, '96 Baa 275 284,281
-------------
Banks--2.6%
Banponce Financial Corp. 5.48%,
'98 Baa 375 366,183
-------------
Chemical-Specialty--2.2%
Borden Chemical & Plastics 9.50%,
'05 Ba 300 309,000
-------------
Entertainment, Leisure & Gaming--1.2%
Time Warner, Inc. 6.835%, '00 (d) Ba 162 162,810
-------------
Hospital Management & Services--2.9%
Tenet Healthcare Corp. 9.625%,
'02 Ba 375 405,000
-------------
Metals & Mining--1.8%
USX Corp. 6.375%, '98 Baa 250 246,410
-------------
Natural Gas--1.9%
Arkla, Inc. 9.875%, '97 Ba 250 261,585
-------------
Non-Agency Mortgage Backed--33.7%
Bear Stearns Mortgage 95-1, 2B3
144A 7.40%, '10 (b) NR 327 282,446
Countrywide Funding Corp. 93-12,
B3 6.625%, '24 Baa 233 229,452
G.E. Capital Corp. 94-26, B2
7.03%, '09 Ba 287 276,068
Kidder PeabodyAcceptance Corp.
94-C2, D 7.18%, '05 BBB((c)) 350 342,125
Merrill Lynch Mortgage, Inc.
95-C2, C 7.79%, '21 A 250 254,649
Nomura Asset Securities Corp.
94-MD2, A6 7.14%, '03 (d) A((c)) 205 204,009
Non-Agency Mortgage Backed--continued
Prudential Home Mortgage 93-L,
3B2 144A 6.641%, '23 (b) NR $250 $ 236,250
Resolution Trust Corp. 93-N3, 3
144A 7.80%, '03 (b) Ba 208 208,333
Resolution Trust Corp. 91-M5, A
9%, '17 Aa 424 444,081
Resolution Trust Corp. 92-C3, B
9.05%, '23 AA((c)) 205 210,944
Resolution Trust Corp. 93-C1, B
8.75%, '24 Aa 500 517,656
Resolution Trust Corp. 93-C3, A4
6.55%, '24 Aaa 122 121,733
Resolution Trust Corp. 93-C2, B
7.75%, '25 AA((c)) 250 256,957
Resolution Trust Corp. 95-C1, A5
6.0205%, '27 Aaa 258 256,569
Resolution Trust Corp. 95-1, C2
7.50%, '28 Baa 368 364,700
Salomon Brothers Mortgage Trust
VII93-C1, A1 6.47%, '23 Aa 241 240,435
White Hall Partners 95-C1, B
7.43%, '25 A((c)) 250 252,969
-------------
4,699,376
-------------
Oil--2.6%
Tosco Corp. 9%, '97 Ba 350 362,240
-------------
Telecommunications Equipment--2.3%
Panamsat L.P. 9.75%, '00 Ba 300 317,250
-------------
Utility-Electric--1.8%
Coso Funding Corp. 144A 7.99%,
'97 (b) Baa 250 253,125
-------------
Utility-Gas--2.8%
Crown Central Petroleum 10.875%,
'05 Ba 375 394,688
-------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $8,110,403) 8,220,163
-------------
FOREIGN NON-CONVERTIBLE BONDS--8.9%
Argentina--1.7%
Compania Nav Perez Co. 144A
8.375%, '98 (b) NR 250 238,750
-------------
Columbia--1.9%
Financiera Energ Nacional 144A
9%, '99 (b) BBB((c)) 250 257,500
-------------
Mexico--3.5%
Fomento Economico Mexicano Euro
9.50%, '97 NR 250 243,750
See Notes to Financial Statements
<PAGE>
Mexico--(continued)
Fomento Economico Mexicano 144A
Euro 9.50%, '97 (b) NR $250 $ 243,750
-------------
487,500
-------------
Singapore--1.8%
Asia Pulp & Paper Co. Yankee
11.75%, '05 Ba 250 255,625
-------------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $1,240,480) 1,239,375
-------------
FOREIGN GOVERNMENT SECURITIES--9.3%
Argentina--2.1%
Republic of Argentina Bearer FRB
6.8125%,
'05 (d) B 500 297,813
-------------
Brazil--3.2%
Republic of Brazil Discount
Series ZL 6.8125%,
'24 (d) NR 750 447,187
-------------
Philippines--1.3%
Central Bank of Philippines NMB
Euro 6.8125%,
'05 (d) BB((c)) 200 180,125
-------------
Poland--2.7%
Poland Discount Euro 6.875%, '24
(d) NR 500 383,125
-------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $1,275,088) 1,308,250
-------------
MUNICIPAL BONDS--3.6%
New York--3.6%
Beth Israel Medical Center
Taxable 6.52%, '97 Aaa $500 $ 501,425
-------------
TOTAL MUNICIPAL BONDS
(Identified cost $500,850) 501,425
-------------
TOTAL LONG-TERM INVESTMENTS--91.3%
(Identified cost $12,602,089) 12,747,120
-------------
SHORT-TERM OBLIGATIONS--7.2%
Commercial Paper--6.0%
AT&T Corp. 5.70%, 11-1-95 P-1 290 290,000
BellSouth Telecommunications,
Inc. 5.75%, 11-9-95 P-1 300 299,617
GTE North, Inc. 5.79%, 11-10-95 P-1 250 249,638
-------------
839,255
-------------
Federal Agency Securities--1.2%
Federal Home Loan Mortgage 5.85%, 11-1-95 160 160,000
-------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $999,255) 999,255
-------------
TOTAL INVESTMENTS--98.5%
(Identified cost $13,601,344) 13,746,375(a)
=============
Cash & receivables, less liabilities--1.5% 216,222
-------------
NET ASSETS--100.0% ........................................$13,962,597
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $194,707 and gross
depreciation of $75,154 for income tax purposes. At October 31, 1995, the
aggregate cost of securities for federal income tax purposes was
$13,626,822. At October 31, 1995, the Fund had capital loss carryforwards
aggregating $500,786 available to offset future gains and expiring as
follows: $192,085 in 2002 and $308,701 in 2003.
(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,
1995, these securities amounted to a value of $1,720,154 or 12.3% of net
assets.
(c) As rated by Standard & Poor's, Fitch and/or Duff & Phelp's.
(d) Variable rate; interest rate shown reflects the rate currently in effect.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
Assets
Investment securities at value
(Identified cost $13,601,344) $13,746,375
Cash 5,600
Receivables
Interest 167,441
Receivable from adviser 62,358
Fund shares sold 46,098
Deferred organization expense 28,292
-----------
Total assets 14,056,164
-----------
Liabilities
Payables
Fund shares repurchased 14,425
Income distribution payable 15,205
Distribution fee 4,937
Financial agent fee 352
Trustees' fee 6,758
Transfer agent fee 4,234
Accrued expenses 47,656
-----------
Total liabilities 93,567
-----------
Net Assets $13,962,597
===========
Net Assets Consist of:
Capital paid in on shares of beneficial
interest $14,359,168
Distributions in excess of net investment
income (15,205)
Accumulated net realized losses (526,397)
Net unrealized appreciation 145,031
-----------
Net Assets $13,962,597
===========
Class A
Shares of beneficial interest outstanding,
$0.01 par value, unlimited authorization
(Net Assets $9,303,367) 1,961,242
Net asset value per share $4.74
Offering price per share
$4.74/(1-2.25%) $4.85
Class B
Shares of beneficial interest outstanding,
$0.01 par value, unlimited authorization
(Net Assets $4,659,230) 982,080
Net asset value and offering price per share $4.74
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1995
Investment Income
Interest $1,159,337
----------
Total investment income 1,159,337
----------
Expenses
Investment advisory fee 78,929
Distribution fee--Class A 23,443
Distribution fee--Class B 37,302
Financial agent fee 4,305
Registration 58,728
Transfer agent 53,741
Printing 43,801
Professional 37,524
Trustees 27,709
Custodian 18,482
Amortization of deferred organization
expense 16,716
Miscellaneous 14,955
----------
Total expenses 415,635
Less fees reimbursed by Adviser (247,284)
----------
Net expenses 168,351
----------
Net investment income 990,986
----------
Net Realized and Unrealized
Gain (Loss) on Investments
Net realized loss on securities (340,004)
Net unrealized appreciation on investments 716,254
----------
Net gain on investments 376,250
----------
Net increase in net assets resulting from
operations $1,367,236
==========
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Year Year
Ended Ended
October 31, October 31,
1995 1994
-------------- ---------------
From Operations
Net investment income $ 990,986 $ 795,158
Net realized loss (340,004) (197,642)
Net unrealized appreciation
(depreciation) 716,254 (553,898)
------------- --------------
Increase in net assets resulting
from operations 1,367,236 43,618
------------- --------------
From Distributions to Shareholders
Net investment income--Class A (661,287) (491,625)
Net investment income--Class B (326,755) (279,100)
Net realized gains--Class A -- (42,320)
Net realized gains--Class B -- (23,734)
Tax return of capital--Class A -- (21,252)
Tax return of capital--Class B -- (12,065)
------------- --------------
Decrease in net assets resulting
from distributions to shareholders (988,042) (870,096)
------------- --------------
From Share Transactions
Class A
Proceeds from sales of shares
(1,676,012 and 1,907,229 shares,
respectively) 7,796,116 9,055,762
Net asset value of shares issued
from reinvestment of distributions
(103,434 and 75,198 shares,
respectively) 479,080 387,214
Cost of shares repurchased
(1,851,728 and 1,339,067 shares,
respectively) (8,606,909) (6,389,169)
------------- --------------
Total (331,713) 3,053,807
------------- --------------
Class B
Proceeds from sales of shares
(259,029 and 944,497 shares,
respectively) 1,195,146 4,434,897
Net asset value of shares issued
from reinvestment of distributions
(47,980 and 42,799 shares,
respectively) 221,981 222,357
Cost of shares repurchased
(717,637 and 402,570 shares,
respectively) (3,290,924) (1,892,740)
------------- --------------
Total (1,873,797) 2,764,514
------------- --------------
(Decrease) increase in net assets
from share transactions (2,205,510) 5,818,321
------------- --------------
Net (decrease) increase in net
assets (1,826,316) 4,991,843
Net Assets
Beginning of period 15,788,913 10,797,070
------------- --------------
End of period (including
distributions in excess of net
investment income of ($15,205) and
($14,488), respectively) $13,962,597 $15,788,913
============= ==============
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
Class A
-------------------------------------------------------
From
Year Ended Inception
October 31, 7/6/92 to
----------------------------------------
1995 1994 1993 10/31/92
------------ ------------ ------------ -------------
Net asset value,
beginning of
period $ 4.61 $ 4.91 $ 4.83 $ 4.89
Income from
investment
operations
Net investment
income 0.33((2)) 0.29((2)) 0.32((2)) 0.08((2))
Net realized and
unrealized gain
(loss) 0.13 (0.26) 0.08 (0.06)
---------- ---------- ---------- -----------
Total from
investment
operations 0.46 0.03 0.40 0.02
---------- ---------- ---------- -----------
Less
distributions
Dividends from
net investment
income (0.33) (0.29) (0.32) (0.08)
Dividends from
net realized
gains -- (0.03) -- --
Tax return of
capital -- (0.01) -- --
---------- ---------- ---------- -----------
Total
distributions (0.33) (0.33) (0.32) (0.08)
---------- ---------- ---------- -----------
Change in net
asset value 0.13 (0.30) 0.08 (0.06)
---------- ---------- ---------- -----------
Net asset value,
end of period $ 4.74 $ 4.61 $ 4.91 $ 4.83
========== ========== ========== ===========
Total
return((1)) 10.27% 0.40% 8.49% 0.40%((5))
Ratios/supplemental
data:
Net assets, end
of period
(thousands) $9,303 $9,371 $6,829 $6,531
Ratio to average
net assets of:
Operating
expenses 1.00% 1.00% 1.00% 1.00%((4))
Net investment
income 7.07% 5.99% 6.39% 5.79%((4))
Portfolio
turnover 344% 121% 128% 6%((4))
Class B
----------------------------------------
From
Year Ended Inception
October 31, 7/6/92 to
1995 1994 1993 10/31/92
------- ------- ------- ----------
Net asset value,
beginning of
period $ 4.61 $ 4.91 $ 4.83 $ 4.89
Income from
investment
operations
Net investment
income 0.30((3)) 0.27((3)) 0.30((3)) 0.07((3))
Net realized and
unrealized gain
(loss) 0.13 (0.26) 0.08 (0.06)
------ ------ ------ ---------
Total from
investment
operations 0.43 0.01 0.38 0.01
------ ------ ------ ---------
Less
distributions
Dividends from
net investment
income (0.30) (0.27) (0.30) (0.07)
Dividends from
net realized
gains -- (0.03) -- --
Tax return of
capital -- (0.01) -- --
------ ------ ------ ---------
Total
distributions (0.30) (0.31) (0.30) (0.07)
------ ------ ------ ---------
Change in net
asset value 0.13 (0.30) 0.08 (0.06)
------ ------ ------ ---------
Net asset value,
end of period $ 4.74 $ 4.61 $ 4.91 $ 4.83
====== ====== ====== =========
Total return((1)) 9.71% -0.03% 8.02% 0.20%((5))
Ratios/supplemental
data:
Net assets, end
of period
(thousands) $4,659 $6,418 $3,968 $1,357
Ratio to average
net assets of:
Operating
expenses 1.50% 1.45% 1.45% 1.45%((4))
Net investment
income 6.59% 5.74% 5.79% 5.30%((4))
Portfolio
turnover 344% 121% 128% 6%((4))
((1)) Maximum sales charges are not included in total return calculation.
((2)) Includes reimbursement of operating expenses by investment adviser of
$0.08, $0.08, $0.09 and $0.14, respectively.
((3)) Includes reimbursement of operating expenses by investment adviser of
$0.08, $0.08, $0.09 and $0.21, respectively.
((4)) Annualized.
((5)) Not annualized.
See Notes to Financial Statements
<PAGE>
PHOENIX ASSET RESERVE
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Asset Reserve (the "Fund") is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as a diversified open-end management investment company. The Fund offers both
Class A and Class B shares. Class A shares are sold with a front-end sales
charge of up to 2.25%. Class B shares are sold with a contingent deferred
sales charge which declines from 2% to zero depending on the period of time
the shares are held. Both classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
each class bears different distribution expenses and has exclusive voting
rights with respect to its distribution plan. Income and expenses of the Fund
are borne pro rata by the holders of both classes of shares, except that each
class bears distribution expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. Security valuation:
Securities listed or traded on a national securities exchange are valued at
the last sale price, or if there had been no sale of the security on that
day, at the mean between the last bid and asked prices. Securities traded in
the over-the-counter market are valued at the mean between the last bid and
asked prices; and if no active market exists, at the bid price. Short-term
investments having a remaining maturity of less than sixty days are valued at
amortized cost which approximates market. All other securities and assets are
valued at their fair value as determined in good faith by or under the
direction of the Trustees.
B. Security transactions and related income:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Discounts and premiums are amortized to income
using the effective interest method. Dividend income is recorded on the
ex-dividend date or, in the case of certain foreign securities, as soon as
the Fund is notified. Realized gains and losses are determined on the
identified cost basis.
C. Income taxes:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code") applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders. In
addition, the Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. Distributions to shareholders:
Distributions to shareholders are declared and recorded daily. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of expiring capital loss
carryforwards, foreign currency gain/loss, partnerships, and losses deferred
due to wash sales and excise tax regulations. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid in capital.
E. Foreign currency translation:
Foreign securities, other assets and liabilities are valued using the foreign
currency exchange rate effective at the end of the reporting period. Cost of
investments is translated at the currency exchange rate effective at the date
of settlement. 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. Organization Expense
In 1992 the Fund incurred organizational expenses in the amount of $82,967.
The Fund has deferred these expenses and is amortizing such expenses on a
straight line basis over five years from the date of commencement of
operations.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect wholly-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.55% of the average daily net assets of the
Fund. The Adviser has agreed to assume expenses of the Fund in excess of
1.00% of Class A and 1.50% of the average aggregate daily net asset value of
Class B shares. For the year ended October 31, 1995 the Adviser has
reimbursed the Fund $247,284 for such expenses.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect wholly-owned subsidiary of PHL, has advised the Fund that it
received selling commissions of $2,985 for Class A shares and deferred sales
charges of $31,688 for Class B shares for the year ended October 31, 1995. In
addition, the Fund pays PEPCO a distribution fee at an annual rate of 0.25%
for Class A shares and 0.75% for Class B shares of
<PAGE>
PHOENIX ASSET RESERVE
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (Continued)
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, 1995, $40,665 was earned by the Distributor and
$20,080 was earned by unaffiliated participants.
As Financial Agent of the Fund, PEPCO receives a fee at an annual rate of
0.03% of the average daily net assets of the Fund for bookkeeping,
administration and pricing services. PEPCO serves as the Fund's Transfer
Agent with State Street Bank and Trust as sub-transfer agent. For the year
ended October 31, 1995, transfer agent fees were $53,741 of which PEPCO
retained $396 which is net of the fees paid to State Street.
At October 31, 1995, PHL and affiliates held 24,525 Class A shares of the
Fund with a value of $116,251.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for the
year ended October 31, 1995, aggregated $45,382,948 and $47,159,919,
including $31,041,294 and $29,880,833, respectively, of U.S. Government
securities.
4. RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded several
reclassifications in the capital accounts. 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, 1995,
the Fund has decreased undistributed net investment income by $3,661,
increased accumulated net realized gains by $11,375 and decreased capital
paid in on shares of beneficial interest by $7,714.
This report is authorized for use by other than shareholders only when
accompanied or preceded by the delivery of a current prospectus showing the
sales charge and other material information.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Logo: Price Waterhouse LLP] [Circle Logo: PW]
To the Trustees and Shareholders of
Phoenix Asset Reserve
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 Phoenix Asset Reserve (the "Fund") at October 31, 1995, and the
results of its operations, the changes in its net assets 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, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
December 18, 1995
<PAGE>
PHOENIX ASSET RESERVE
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Leroy Keith, Jr.
Philip R. McLoughlin
James M. Oates
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Martin J. Gavin, Executive Vice President
Michael E. Haylon, Executive Vice President
David L. Albrycht, Vice President
James M. Dolan, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
National Securities & Research Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Legal Counsel
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005-1208
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[Back cover]
Phoenix Asset Reserve
P.O. Box 2200
Enfield, CT 06083-2200
[double-diamond logo] Phoenix Duff & Phelps
PDP 681 (12/95)
Bulk Rate Mail
U.S. Postage
PAID
Springfield, MA
Permit No. 444
<PAGE>
[Front cover]
Phoenix Funds
Phoenix Asset Reserve
Annual Report
October 31, 1995
[graphic photo: antique dollar bills]
[double-diamond logo] Phoenix Duff & Phelps
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