[COVER PAGE]
April 30, 1997
PHOENIX
SEMIANNUAL REPORT
Phoenix Multi-Sector
Short Term Bond Fund
[LOGO] PHOENIX
DUFF & PHELPS
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
INVESTOR PROFILE
Phoenix Multi-Sector Short Term Bond Fund is designed for moderately
risk-averse investors seeking current income consistent with preservation of
capital.
INVESTMENT ADVISER'S REPORT
For the six months ended April 30, 1997, Phoenix Multi-Sector Short Term
Bond Fund outperformed its benchmark, the Merrill Lynch Medium Quality
Corporate Short-term Bond Index.* Class A shares provided a total return of
4.66% and Class B shares returned 4.41% compared to 2.71% for the benchmark
over the same period. All performance figures assume reinvestment of dividends
and exclude the effect of sales charges.
Interest rate volatility has become more pronounced over the last few
months, with the trend clearly being upward. Long-term rates have risen in
response to the stronger-than-expected economic growth in recent months.
Bond market returns have varied significantly by sector. Currently,
traditional bond sectors appear overvalued, while less traditional sectors
offer the best value. Fund performance benefited from our focus on identifying
sectors we consider inefficiently priced at recent levels.
As spreads tightened, we replaced our corporate high-yield holdings with
emerging-market debt instruments. Very attractive valuation levels exist in
Argentina, Brazil and Russia. The Fund's second largest weighting is in
commercial mortgages. Positive real estate market fundamentals and a growing
institutional investor base have created good values in this sector relative to
other areas of the market. As of April 30, the portfolio had an expected
duration of 2.44 years and an average credit quality of "BBB."
OUTLOOK
Looking to the next six months, the wide dispersion among sector returns
that was evident in 1996 and early 1997 is likely to continue. Sector selection
remains critical, in our opinion. We expect to maintain the portfolio's
overweighted positions in the emerging markets and commercial mortgage sectors
because of their above-average return potential.
Our emphasis in the emerging-markets area is on countries that are
reforming their political systems towards democracy from socialism and moving
their economies toward capitalism from central planning. Argentina, Brazil and
Russia continue to have very attractive valuation levels.
High current yields on commercial mortgage-backed securities coupled with
limited supply, the prospect for upgrades of selected deals and a growing
investor base support their continued attractiveness. We will continue to focus
on investment-grade issues with multiple-property collateral to take advantage
of near-term opportunities.
*The Merrill Lynch Medium Quality Corporate Short-term Index is an unmanaged
but commonly used index that tracks the returns of 376 (as of April 30, 1997)
corporate issues rated "BBB" and "A" by Standard & Poor's, with maturities from
one to three years. The Index's performance does not reflect sales charges.
1
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
INVESTMENTS AT APRIL 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------- ----------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES--5.8%
U.S. Treasury Notes--5.0%
U.S. Treasury Inflation Index
Notes 3.375%, '07 (d) ............ Aaa $ 500 $ 495,121
U.S. Treasury Notes WI
6.375%, '00 (h) .................. Aaa 1,000 997,920
------------
1,493,041
------------
Agency Non Mortgage-Backed Securities--0.8%
Overseas Private Investment
6.58 %, '01 ..................... NR 250 246,275
------------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Identified cost $1,741,608) ........................... 1,739,316
------------
NON-CONVERTIBLE BONDS--51.5%
Airlines--0.5%
AMR Corp. Notes 7.75%, '97 ......... Baa 155 156,431
------------
Asset-Backed Securities--10.4%
Airplanes Pass Through
Trust 1D 10.875%, '19 ............ Ba 250 276,390
Banc One Auto Trust 95-A,
CTFS 7.25%, '01 .................. A 500 506,370
Case Equipment Loan Trust
6.45%, '02 ...................... A 500 492,422
Countrywide Funding Corp.
93-12, B3 6.625%, '24 ............ Baa 122 120,120
First Sierra Receivables
96-2, A 6.29%, '04 ............... Aaa 250 247,861
Fleetwood Credit Corp.
96-A, B 6.95%, '11 ............ A 228 227,342
Ford Credit Auto Owner
Trust 96-B, 6.55%, '02 ......... A 250 248,320
Green Tree Financial Corp.
96-1, A2 5.85%, '27 ............ Aaa 250 241,758
Standard Credit Card Master
Trust 93-1, B 5.50%, '98 A 265 265,278
Team Fleet Financing Corp.
96-1, B 144A 7.10%, '02
(b) (g) ........................ BBB(c) 500 491,250
------------
3,117,111
------------
Auto & Truck Parts--1.7%
Titan Wheel International,
Inc. 8.75%, '07 (g) ............ B 500 501,250
------------
Banks--3.9%
Banponce Finance Corp.
5.48%, '98 ...................... A 375 369,041
NationsBank Capital Trust
III 6.366%, '27 (d) ............ A 300 292,377
Wachovia Capital Trust II
6.316%, '27 (d) .................. Aa 500 488,750
------------
1,150,168
------------
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
-------- ------- ------------
Building & Materials--0.9%
Neenah Corp. 144A
11.125%, '07 (b) ............... BB-(c) $ 250 $ 258,750
------------
Entertainment, Leisure & Gaming--0.5%
Time Warner, Inc. 6.46%,
'00 (d) ........................ BBB-(c) 162 162,405
------------
Hospital Management & Services--1.3%
Tenet Healthcare Corp. Sr.
Note 9.625%, '02 ............... Ba 375 398,437
------------
Metals & Mining--0.8%
USX Corp. Sr. Note 6.375%,
'98 .............................. Baa 250 249,812
------------
Non-Agency Mortgage-Backed Securities--25.3%
Bear Stearns Mortgage
Securities, Inc. 95-1, 2B3
144A 7.40%, '10 (b) ............ NR 299 267,049
Criimi Mae Trust I 96-C1,
A2 144A 7.56%, '33 (b) ......... BBB(c) 400 392,375
G.E. Capital Mortgage Service
94-26, B2 7.03%, '09 ............ Baa 266 257,340
Kidder Peabody Acceptance
Corp. 94-C2, D 7.18%, '05 ........ BBB(c) 350 345,734
Lehman Structured
Securities Corp. 96-1, E1
7.995%, '26 ..................... BBB(c) 291 294,843
Merrill Lynch Mortgage, Inc.
95-C2, C 7.79%, '21 ............ A 322 324,810
Oregon Commercial Mortgage,
Inc. 95-1, B 144A 7.35%,
'23 (b) ........................ AA(c) 500 499,766
Prudential Home Mortgage
Securities, 93-L, 3B2
144A 6.641%, '23 (b) ............ NR 250 242,266
Residential Asset
Securitization Trust
96-A8, A1 8%, '26 ............... AAA(c) 434 437,538
Residential Funding
Mortgage Securities I
93-S29, M3 7%, '08 ............... BBB(c) 561 544,531
Resolution Trust Corp.
92-CHF, B 7.15%, '20 ............ AA(c) 403 403,477
Resolution Trust Corp.
92-C3, B 9.05%, '23 ............ AA(c) 156 158,904
Resolution Trust Corp.
93-C3, A4 6.55%, '24 ............ Aaa 27 27,248
Resolution Trust Corp.
93-C1, B 8.75%, '24 ............ Aa 500 499,219
Resolution Trust Corp.
93-C2, B 7.75%, '25 ............ AA(c) 250 252,113
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------- ----------
<S> <C> <C> <C>
Non-Agency Mortgage-Backed Securities--continued
Resolution Trust Corp.
94-C1, C 8%, '26 ............... A(c) $ 500 $ 506,641
Resolution Trust Corp. 95-1,
C2 7.50%, '28 .................. A 264 263,163
Resolution Trust Corp. 95-2,
B2 7.009%, '29 ............... Baa 252 246,812
Resolution Trust Corp. 95-2,
M1 7.15%, '29 ............... Aa 355 351,792
Resolution Trust Corp. 95-2,
C1 7.45%, '29 .................. Baa 384 381,809
Salomon Brothers Mortgage
Securities VII 93-C1, A1
6.47%, '23 ................... Aa 23 23,118
Structured Asset Securities
Corp. 95-C1, D 7.375%,
'24 ........................... BBB(c) 500 493,281
Structured Asset Securities
Corp. 96-C3, C 144A
7.375%, '30 (b) ............... BBB(c) 350 346,719
------------
7,560,548
------------
Oil--1.2 %
Lomak Petroleum, Inc.
8.75%, '07 ................... B 375 358,125
------------
Oil Service & Equipment--0.9%
Noble Drilling Corp.
9.125%, '06 (g) ............... Ba 250 265,938
------------
Paper & Forest Products--2.0%
Buckeye Cellulose Corp.
8.50%, '05 ................... Ba 225 220,500
Stone Container Corp.
9.875%, '01 .................. B 400 379,000
------------
599,500
------------
Publishing, Broadcasting, Printing & Cable--1.7%
Tele-Communications, Inc.
7.375%, '00 (g) ............... BBB(c) 500 500,470
------------
Utility-Electric--0.4 %
Coso Funding Corp. 144A
7.99%, '97 (b) ................ Baa 129 129,883
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified cost $15,410,136) ........................ 15,408,828
------------
FOREIGN GOVERNMENT SECURITIES--23.1%
Argentina--5.9%
Republic of Argentina Bearer
FRB 6.75%, '05 (d) ............ BB(c) 1,358 1,247,662
Republic of Argentina Bocon
Pro1, M1, PIK interest
capitalization, 3.238%,
'07 (d) ..................... BBB-(c) 693 518,055
------------
1,765,717
------------
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- -------- -------------
Brazil--4.1%
Republic of Brazil DCB-L
Euro 6.938%, '12 (d) ......... BB-(c) $1,525 $ 1,216,188
------------
Colombia--1.7%
Republic of Colombia Euro
9%, '97 ........................ Baa 500 500,105
------------
Croatia--1.6%
Croatia Series B 6.50%,
'06 (d) ........................ Baa 482 472,257
------------
Ecuador--0.5%
Ecuador Bearer PDI Euro,
PIK interest capitalization,
6.438%, '15 (d) ............... NR 269 162,420
------------
Mexico--2.7%
United Mexican States 144A
7.625%, '01 (b) (d) ......... Baa 350 354,550
United Mexican States
Discount A 6.867%, '19
(d) (e) ........................ Ba 500 443,125
------------
797,675
------------
Morocco--0.7%
Morocco R&C Agreement
Series A 6.375%, '09 (d) ....... NR 250 220,000
------------
Peru--0.5%
Peru PDI 144A 4%, '17
(b) (d) ........................ NR 250 150,000
------------
Poland--2.5%
Poland Discount Euro
6.938%, '24 (d) ............... Baa 775 753,687
------------
Venezuela--2.9%
Republic of Venezuela DCB
Euro 6.50%, '07 (d) ......... Ba 750 662,344
Venezuela-FLIRB A 6.75%,
'07 (d) ........................ Ba 238 213,839
------------
876,183
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $6,896,702) .......................... 6,914,232
------------
FOREIGN NON-CONVERTIBLE BONDS--7.0%
Colombia--0.9%
Financiera Energ Nacional
9%, '99 ........................ BBB-(c) 250 259,688
------------
Indonesia--0.8%
Asia Pulp & Paper Co.
Yankee 144A 12%, '04
(b) (d) ........................ B 250 235,000
------------
Mexico--2.6%
Banco Nacional de Mexico
144A 7.57%, '00 (b) ............ NR 500 491,953
</TABLE>
See Notes to Financial Statements
3
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
--------- ------- ------------
Mexico--continued
Grupo Elektra SA DE CV
12.75%, '01 ......... B(c) $ 250 $ 272,187
-----------
764,140
-----------
Russia--2.7%
Vnescheconombank Loans
Yankee (f) ......... NR 1,000 812,500
-----------
TOTAL FOREIGN NON-CONVERTIBLE BONDS
(Identified cost $2,072,371) ............... 2,071,328
-----------
MUNICIPAL BONDS--4.1%
Chicago O'Hare Taxable
Revenue 6.47%, '00 (g). Aaa 150 149,300
New York State Dormitory
Authority Revenue
Taxable 6.45%, '99 (g). Baa 400 398,476
Orange County Pension
Taxable A 6.16%, '98 Aaa 500 498,755
University of Miami
Exchange Revenue A
Taxable 5.95%, '98 (g) Aaa 185 184,073
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $1,231,676) ............... 1,230,604
-----------
SHARES VALUE
-------- -------------
PREFERRED STOCKS--4.1%
REITS--4.1%
Marquette Real Estate Fund Step-down
Pfd. 144A 13.701% (b) ............... 500 $ 491,880
Home Ownership Funding 2 Step-down
Pfd. 144A 13.338% (b) ............... 750 734,982
------------
TOTAL PREFERRED STOCKS
(Identified cost $1,243,510) ........................ 1,226,862
------------
TOTAL LONG-TERM INVESTMENTS--95.6%
(Identified cost $28,596,003) ..................... 28,591,170
------------
STANDARD PAR
& POOR'S VALUE
RATING (000)
----------- -----
SHORT-TERM OBLIGATIONS--5.6%
Commercial Paper--5.6%
AT&T Corp. 5.52%, 5-1-97 ..... A-1+ 1,200 1,200,000
Corporate Asset Funding
Corp. 5.60%, 5-1-97 ...... A-1+ 475 475,000
------------
1,675,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,675,000) ........................ 1,675,000
------------
TOTAL INVESTMENTS--101.2%
(Identified cost $30,271,003) ..................... 30,266,170(a)
Cash and receivables, less liabilities--(1.2%) ..... (373,544)
------------
NET ASSETS--100.0% ................................. $29,892,626
============
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $228,496 and gross
depreciation of $240,977 for income tax purposes. At April 30, 1997, the
aggregate cost of securities for federal income tax purposes was
$30,278,651.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1997, these securities amounted to a value of $5,086,423 or 17.0% of net
assets.
(c) As rated by Standard & Poor's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Rights incorporated as a unit.
(f) Non-income producing.
(g) Segregated as collateral.
(h) When issued.
See Notes to Financial Statements
4
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Assets
Investment securities at value
(Identified cost $30,271,003) $30,266,170
Receivables
Interest and dividends 315,549
Investment securities sold 1,736,007
Receivable from adviser 2,544
Fund shares sold 96,021
Deferred organization expense 3,341
-----------
Total assets 32,419,632
-----------
Liabilities
Payables
Investment securities purchased 2,365,471
Fund shares repurchased 60,088
Income distribution payable 31,000
Distribution fee 9,270
Financial agent fee 6,740
Transfer agent fee 6,736
Trustees' fee 4,074
Accrued expenses 43,627
-----------
Total liabilities 2,527,006
-----------
Net Assets $29,892,626
===========
Net Assets Consist of:
Capital paid in on shares of beneficial interest $29,531,156
Undistributed net investment loss (24,357)
Accumulated net realized gain 390,660
Net unrealized depreciation (4,833)
-----------
Net Assets $29,892,626
===========
Class A
Shares of beneficial interest outstanding,
$0.01 par value, unlimited authorization
(Net Assets $21,605,516) 4,351,385
Net asset value per share $4.97
Offering price per share
$4.97/(1-2.25%) $5.08
Class B
Shares of beneficial interest outstanding,
$0.01 par value, unlimited authorization
(Net Assets $8,287,110) 1,668,674
Net asset value and offering price per share $4.97
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Investment Income
Interest $ 951,864
Dividends 9,829
----------
Total investment income 961,693
----------
Expenses
Investment advisory fee 68,834
Distribution fee--Class A 22,154
Distribution fee--Class B 27,404
Financial agent fee 28,082
Transfer agent 27,028
Professional 23,058
Registration 17,998
Printing 10,748
Custodian 10,350
Amortization of deferred organization expense 8,556
Trustees 5,354
Miscellaneous 6,166
----------
Total expenses 255,732
Less expense borne by investment adviser (112,310)
----------
Net expenses 143,422
----------
Net investment income 818,271
----------
Net Realized and Unrealized Gain (Loss) on Investments
Net realized gain on securities 432,129
Net change in unrealized appreciation (depreciation) on
investments (218,813)
----------
Net gain on investments 213,316
----------
Net increase in net assets resulting from
operations $1,031,587
==========
</TABLE>
See Notes to Financial Statements
5
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
April 30, 1997 Year Ended
(Unaudited) October 31, 1996
---------------- -----------------
<S> <C> <C>
From Operations
Net investment income $ 818,271 $ 1,057,251
Net realized gain 432,129 475,148
Net change in unrealized appreciation (depreciation) (218,813) 68,949
----------- -----------
Increase in net assets resulting from operations 1,031,587 1,601,348
----------- -----------
From Distributions to Shareholders
Net investment income--Class A (597,252) (737,150)
Net investment income--Class B (229,219) (311,273)
----------- -----------
Decrease in net assets resulting from distributions to shareholders (826,471) (1,048,423)
----------- -----------
From Share Transactions
Class A
Proceeds from sales of shares (2,508,036 and 1,883,600 shares, respectively) 12,482,097 9,085,891
Net asset value of shares issued from reinvestment of distributions
(103,097 and 119,182 shares, respectively) 513,387 573,651
Cost of shares repurchased (1,051,913 and 1,171,859 shares, respectively) (5,225,382) (5,645,597)
----------- -----------
Total 7,770,102 4,013,945
----------- -----------
Class B
Proceeds from sales of shares (562,066 and 439,768 shares, respectively) 2,791,646 2,129,724
Net asset value of shares issued from reinvestment of distributions
(32,335 and 42,139 shares, respectively) 161,032 202,745
Cost of shares repurchased (136,588 and 253,126 shares, respectively) (680,388) (1,216,818)
----------- -----------
Total 2,272,290 1,115,651
----------- -----------
Increase in net assets from share transactions 10,042,392 5,129,596
----------- -----------
Net increase in net assets 10,247,508 5,682,521
Net Assets
Beginning of period 19,645,118 13,962,597
----------- -----------
End of period (including undistributed net investment loss and
distributions in excess of net investment income of ($24,357) and
($16,157), respectively) $29,892,626 $19,645,118
=========== ===========
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Phoenix Multi-Sector Short Term Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(Selected data for a share outstanding throughout the indicated period)
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------
Six Months
Ended
4/30/97 Year Ended October 31,
(Unaudited) 1996 1995 1994 1993
---------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.91 $ 4.74 $ 4.61 $ 4.91 $ 4.83
Income from investment operations
Net investment income 0.17(2) 0.33(2) 0.33(2) 0.29(2) 0.32(2)
Net realized and unrealized gain (loss) 0.06 0.17 0.13 (0.26) 0.08
--------- --------- --------- --------- ---------
Total from investment operations 0.23 0.50 0.46 0.03 0.40
--------- --------- --------- --------- ---------
Less distributions
Dividends from net investment income (0.17) (0.33) (0.33) (0.29) (0.32)
Dividends from net realized gains -- -- -- (0.03) --
Tax return of capital -- -- -- (0.01) --
--------- --------- --------- --------- ---------
Total distributions (0.17) (0.33) (0.33) (0.33) (0.32)
--------- --------- --------- --------- ---------
Change in net asset value 0.06 0.17 0.13 (0.30) 0.08
--------- --------- --------- --------- ---------
Net asset value, end of period $ 4.97 $ 4.91 $ 4.74 $ 4.61 $ 4.91
========= ========= ========= ========= =========
Total return(1) 4.66%(5) 10.91% 10.27% 0.40% 8.49%
Ratios/supplemental data:
Net assets, end of period (thousands) $ 21,606 $ 13,702 $ 9,303 $ 9,371 $ 6,829
Ratio to average net assets of:
Operating expenses 1.00%(4) 1.00% 1.00% 1.00% 1.00%
Net investment income 6.67%(4) 6.88% 7.07% 5.99% 6.39%
Portfolio turnover 120%(5) 232% 344% 121% 128%
<CAPTION>
From
Inception
7/6/92 to
10/31/92
--------------
<S> <C>
Net asset value, beginning of period $ 4.89
Income from investment operations
Net investment income 0.08(2)
Net realized and unrealized gain (loss) (0.06)
---------
Total from investment operations 0.02
---------
Less distributions
Dividends from net investment income (0.08)
Dividends from net realized gains --
Tax return of capital --
---------
Total distributions (0.08)
---------
Change in net asset value (0.06)
---------
Net asset value, end of period $ 4.83
=========
Total return(1) 0.40%(5)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 6,531
Ratio to average net assets of:
Operating expenses 1.00%(4)
Net investment income 5.79%(4)
Portfolio turnover 6%(4)
</TABLE>
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------------------------
Six Months
Ended
4/30/97 Year Ended October 31,
(Unaudited) 1996 1995 1994 1993
---------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.91 $ 4.74 $ 4.61 $ 4.91 $ 4.83
Income from investment operations
Net investment income 0.15(3) 0.31(3) 0.30(3) 0.27(3) 0.30(3)
Net realized and unrealized gain (loss) 0.06 0.17 0.13 (0.26) 0.08
--------- --------- --------- --------- ---------
Total from investment operations 0.21 0.48 0.43 0.01 0.38
--------- --------- --------- --------- ---------
Less distributions
Dividends from net investment income (0.15) (0.31) (0.30) (0.27) (0.30)
Dividends from net realized gains -- -- -- (0.03) --
Tax return of capital -- -- -- (0.01) --
--------- --------- --------- --------- ---------
Total distributions (0.15) (0.31) (0.30) (0.31) (0.30)
--------- --------- --------- --------- ---------
Change in net asset value 0.06 0.17 0.13 (0.30) 0.08
--------- --------- --------- --------- ---------
Net asset value, end of period $ 4.97 $ 4.91 $ 4.74 $ 4.61 $ 4.91
========= ========= ========= ========= =========
Total return(1) 4.41%(5) 10.36% 9.71% (0.03)% 8.02%
Ratios/supplemental data:
Net assets, end of period (thousands) $ 8,287 $ 5,943 $ 4,659 $ 6,418 $ 3,968
Ratio to average net assets of:
Operating expenses 1.50%(4) 1.50% 1.50% 1.45% 1.45%
Net investment income 6.22%(4) 6.38% 6.59% 5.74% 5.79%
Portfolio turnover 120%(5) 232% 344% 121% 128%
<CAPTION>
From
Inception
7/6/92 to
10/31/92
--------------
<S> <C>
Net asset value, beginning of period $ 4.89
Income from investment operations
Net investment income 0.07(3)
Net realized and unrealized gain (loss) (0.06)
---------
Total from investment operations 0.01
---------
Less distributions
Dividends from net investment income (0.07)
Dividends from net realized gains --
Tax return of capital --
---------
Total distributions (0.07)
---------
Change in net asset value (0.06)
---------
Net asset value, end of period $ 4.83
=========
Total return(1) 0.20%(5)
Ratios/supplemental data:
Net assets, end of period (thousands) $ 1,357
Ratio to average net assets of:
Operating expenses 1.45%(4)
Net investment income 5.30%(4)
Portfolio turnover 6%(4)
</TABLE>
(1) Maximum sales charges are not included in total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.06, $0.08, $0.08, $0.09 and $0.14, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.06, $0.08, $0.08, $0.09 and $0.21, respectively.
(4) Annualized
(5) Not annualized
See Notes to Financial Statements
7
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix Multi-Sector Short Term Bond Fund (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's investment objective is to provide high current income relative to
short-term alternatives, while attempting to limit fluctuations in the net asset
value of Fund shares resulting from movements in interest rates. 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. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount 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 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. 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, 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. 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.
G. 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.
H. Credit risk:
In countries with limited or developing markets, investments may present
greater risk 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
8
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (Unaudited) (Continued)
the income they generate, as well as a fund's ability to repatriate such
amounts.
I. Loan agreements:
The Fund may invest in direct debt instruments which are interests in
amounts owned 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. When the Fund purchases assignments from lenders it acquires direct
rights against the borrower of 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.
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the Investment Adviser,
National Securities and Research Corporation, an indirect majority-owned
subsidiary of Phoenix Home Life Mutual Insurance Company ("PHL"), is entitled
to a fee at an annual rate of 0.55% of the average daily net assets of the
Fund. The Adviser has agreed to assume expenses of the Fund in excess of 1.00%
and 1.50% of the average aggregate daily net asset value of Class A and Class B
shares, respectively. For the six months ended April 30, 1997, the Adviser has
reimbursed the Fund $112,310 for such expenses.
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 $2,237 for Class A shares and
deferred sales charges of $5,658 for Class B shares for the six months ended
April 30, 1997. 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 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 six months ended April 30,
1997, $29,602 was earned by the Distributor and $19,956 was earned by
unaffiliated participants.
As Financial Agent of the Fund, PEPCO received a fee for bookkeeping,
administration, and pricing services at an annual rate of 0.03% of the average
daily net assets of the Fund through December 31, 1996, and starting on January
1, 1997, at an annual rate of 0.05% of average daily net assets up to $100
million, 0.04% of average daily net assets of $100 million to $300 million,
0.03% of average daily net assets of $300 million through $500 million, and
0.015% of average daily net assets greater than $500 million; a minimum fee may
apply. PEPCO serves as the Fund's Transfer Agent with State Street Bank and
Trust as sub-transfer agent. For the six months ended April 30, 1997, transfer
agent fees were $27,028 of which PEPCO retained $494 which is net of the fees
paid to State Street.
At April 30, 1997, PHL and affiliates held 27,150 Class A shares of the
Fund with a value of $134,938.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for
the six months ended April 30, 1997, aggregated $38,751,298 and $29,012,383,
including $10,205,392 and $8,437,148, respectively, of U.S. Government and
agency securities.
4. CAPITAL LOSS CARRYFORWARDS
At October 31, 1996, the Fund had capital loss carryforwards aggregating
$36,672 available to offset future gains and expiring in 2003.
This report is not authorized for distribution to prospective investors in the
Phoenix Multi-Sector Short Term Bond Fund unless preceded or accompanied by an
effective prospectus which includes information concerning the sales charge,
Fund's record and other pertinent information.
9
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
101 Munson Street
Greenfield, Massachusetts 01301
Trustees
C. Duane Blinn
Robert Chesek
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Philip R. McLoughlin
Everett L. Morris
James M. Oates
Calvin J. Pedersen
Philip R. Reynolds
Herbert Roth, Jr.
Richard E. Segerson
Lowell P. Weicker, Jr.
Officers
Philip R. McLoughlin, President
Michael E. Haylon, Executive Vice President
David R. Pepin, Executive Vice President
David L. Albrycht, Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy G. Curtiss, Treasurer
G. Jeffrey Bohne, Secretary
Investment Adviser
National Securities & Research Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
Principal Underwriter
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Transfer Agent
Phoenix Equity Planning Corporation
100 Bright Meadow Boulevard
P.O. Box 2200
Enfield, Connecticut 06083-2200
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
<PAGE>
[BACK COVER]
Phoenix Multi-Sector Short Term Bond Fund
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
DUFF & PHELPS
PDP 745 (6/97)
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