<PAGE>
April 30, 1998
P H O E N I X
F U N D S
SEMIANNUAL REPORT
PHOENIX MULTI-SECTOR
SHORT TERM BOND FUND
[LOGO] PHOENIX
INVESTMENT PARTNERS
<PAGE>
-----------------------------------------------------
Mutual funds are not insured by the FDIC; are not
deposits or other obligations of a bank and are not
guaranteed by a bank; and are subject to investment
risks, including possible loss of the principal
invested.
-----------------------------------------------------
<PAGE>
CHAIRMAN'S
MESSAGE
Dear Phoenix Funds Shareholder:
I'm pleased to make you aware that we recently changed
our corporate name to Phoenix Investment Partners, Ltd. We
feel this new name better fits the growing investment
management firm we have been building and reflects our
commitment to partnership and excellence in serving the
financial needs of investors like you.
Over the past year, we have added several of the
industry's most experienced and talented money managers to
our team to provide you with a wider variety of quality
investment products. Phoenix Investment Partners offers you
access to the distinct investment styles of independent
money managers across the U.S. and around the world:
Aberdeen Fund Managers, Inc.
Duff & Phelps Investment Management Co.
Phoenix Investment Counsel, Inc.
Roger Engemann & Associates, Inc.
Seneca Capital Management LLC
Classic Value group, led by Chris Bertelsen
Quantitative Value group, led by Steve Colton and Dong
Hao Zhang
As always, we are committed to providing you with sound
investments and outstanding service--now with even more
choices, including value-style mutual funds. To learn more
about our new partners and their distinctive investment
styles, contact your financial advisor or call a marketing
specialist at 1-800-243-4361.
Sincerely,
[SIGNATURE]
Philip R. McLoughlin
PRESIDENT, PHOENIX FUNDS
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- -------------------------------------------------------------------
INVESTOR PROFILE
Phoenix Multi-Sector Short-Term Bond Fund is designed for moderately
risk-averse investors seeking to maximize current income consistent with
preservation of capital.
INVESTMENT ADVISER'S REPORT
Phoenix Multi-Sector Short-Term Bond Fund continued to provide investors with
above-average returns. For the six months ended April 30, 1998, Class A shares
returned 4.83%, Class B shares returned 4.56%, and Class C shares returned 4.69%
compared with 3.02% for the Merrill Lynch Medium Quality Corporate Short-Term
Bond Index.* All performance figures assume reinvestment of dividends and
exclude the effect of sales charges.
The Fund's defensive stance in "BB"-rated high yield names with a focus on oil
and gas and telecommunications issues benefited performance. Our focus on
diversified sovereign debt issues in emerging markets, especially corporate
issues in Mexico and Argentina, also helped performance. Foreign investing
involves special risks, such as currency fluctuation, less public disclosure as
well as economic and political risks.
OUTLOOK
Given our outlook for moderate growth and benign inflation in the United
States, we will continue to emphasize domestic high-yield issues. The emphasis
will be on telecommunications and oil and gas exploration and production
companies based on the improving fundamentals in this sector.
We also believe that emerging markets offer attractive opportunities for
long-term appreciation. Our focus is on identifying emerging countries that are
experiencing the types of improvements in their infrastructure associated with a
better standard of living. The portfolio will continue to maintain a duration
that is neutral to the benchmark. As of April 30, 1998 the Fund's duration was
2.4 years.
* The Merrill Lynch Medium Quality Corporate Short-Term Bond Index is an
unmanaged, commonly used index that tracks the returns of corporate issues
rated "BBB" and "A" by Standard & Poor's, with maturities from one to three
years. The Index is not available for direct investment.
2
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS AT APRIL 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--5.4%
U.S. TREASURY NOTES--5.4%
U.S. Treasury Notes 5.375%,
2/15/01........................ Aaa $2,750 $ 2,733,967
------------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $2,735,416)................................. 2,733,967
------------
AGENCY NON-MORTGAGE-BACKED SECURITIES--0.5%
Overseas Private Investment
6.58%, 12/15/01................ NR 250 252,266
------------
TOTAL AGENCY NON-MORTGAGE-BACKED SECURITIES
(Identified cost $250,000)................................... 252,266
------------
MUNICIPAL BONDS--6.8%
Chicago O'Hare Taxable Revenue
6.47%, 1/1/00.................. Aaa 150 151,125
Chicago Tax Increment 6.25%,
6/1/02......................... Aaa 750 752,813
Massachusetts State Port
Authority Revenue 6.05%,
7/1/02......................... Aa 400 398,000
Mississippi State Taxable Series
T 7.50%, 11/1/00............... Aa 855 883,856
New York State Dormitory
Authority Revenue, Taxable
6.45%, 10/1/99................. Baa 400 402,500
Orange County Pension Taxable
Series A 6.16%, 9/1/98......... Aaa 500 500,725
San Diego County Pension Taxable
Series A 6.24%, 8/15/02........ Aaa 400 400,000
------------
TOTAL MUNICIPAL BONDS
(Identified cost $3,478,349)................................. 3,489,019
------------
ASSET-BACKED SECURITIES--11.1%
AESOP Funding II LLC 144A 97-1,
A2 6.40%,
10/20/03 (b)................... Aaa 500 506,094
Banc One Auto Trust 95-A, CTFS
7.25%, 10/15/01................ A 500 501,081
Capita Equipment Receivables
Trust 97-1B, 6.45%, 8/15/02.... Aa 250 252,969
Case Equipment Loan Trust 6.45%,
9/15/02........................ A 500 503,672
Chase Credit Card Master Trust
97-2A 6.30%, 4/15/03........... Aaa 156 157,473
Continental Airlines 7.522%,
6/30/01........................ Ba 400 403,375
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
<S> <C> <C> <C>
ASSET-BACKED SECURITIES--CONTINUED
Countrywide Funding Corp. 93-12,
B3 6.625%, 2/25/24............. Baa $ 39 $ 38,523
Fleetwood Credit Corp. 96-A, B
6.95%, 10/17/11................ A 276 278,334
Ford Credit Auto Owner Trust
96-B, 6.55%, 2/15/02........... A 250 252,187
Green Tree Financial Corp. 96-1,
A2 5.85%, 3/15/27.............. Aaa 500 498,203
Imperial CMB Trust 6.95%,
11/25/29....................... AAA(c) 494 492,382
NationsBank Auto Owner Trust
96-A, B2 6.875%, 5/15/03....... A 500 508,649
Newcourt Receivables Asset Trust
97-1 A3 6.11%, 5/21/01......... Aaa 500 501,094
Premier Auto Trust 97-3, B 6.52%,
1/6/03......................... A 250 253,707
Team Fleet Financing Corp. 96-1,
B 144A 7.10%, 12/15/02 (b)..... BBB(c) 500 504,531
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $5,603,975)................................. 5,652,274
------------
CORPORATE BONDS--19.9%
AEROSPACE/DEFENSE--1.0%
Raytheon Co. 5.95%, 3/15/01...... Baa 500 498,125
------------
AUTOMOBILES--1.0%
Titan Tire Loan Participation 7%,
2/11/00........................ NR 500 490,000
------------
BANKS (MAJOR REGIONAL)--2.9%
Banponce Financial Corp. 5.48%,
10/26/98....................... A 375 374,137
First Union Institutional Capital
I 8.04%, 12/1/26............... A 250 267,187
NationsBank Capital Trust III
6.206%, 1/15/27 (d)............ Aa 300 291,877
Wachovia Capital Trust II 6.156%,
1/15/27 (d).................... Aa 550 535,037
------------
1,468,238
------------
BROADCASTING (TELEVISION, RADIO & CABLE)--2.0%
Century Communications 8.75%,
10/1/07........................ Ba 500 518,750
Tele-Communications, Inc. 7.375%,
2/15/00........................ Baa 500 508,750
------------
1,027,500
------------
</TABLE>
See Notes to Financial Statements 3
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
CONSUMER FINANCE--1.0%
<S> <C> <C> <C>
Ford Motor Credit 6%, 1/14/03.... A $500 $ 496,250
------------
DIVERSIFIED MISCELLANEOUS--0.2%
IBJ Preferred Capital Co. LLC
144A 8.79%, 12/29/49 (b)....... A 125 118,496
------------
DRUGS--MAJOR PHARMACEUTICALS--1.0%
Schein Pharmaceutical, Inc. 144A
8.727%, 12/15/04 (b) (d)....... B 510 506,634
------------
HEALTH CARE (HOSPITAL MANAGEMENT)--0.8%
Tenet Healthcare Corp. Sr. Note
9.625%, 9/1/02................. Ba 375 422,344
------------
INVESTMENT BANKING/BROKERAGE--1.0%
Merrill Lynch & Co. 6%, 2/12/03
(e)............................ Aa 500 496,250
------------
LEASING/RENTAL--0.5%
Williams Scotsman, Inc. 9.875%,
6/1/07......................... B 225 237,938
------------
MANUFACTURING (DIVERSIFIED)--0.5%
Polymer Group, Inc. 9%, 7/1/07... B 250 258,125
------------
METALS MINING--2.2%
AK Steel Corp. 10.75%, 4/1/04.... Ba 600 642,000
NSM Steel, Inc. 144A 12%, 2/1/06
(b)............................ B 250 237,500
USX Corp. Sr. Notes 6.375%,
7/15/98........................ Baa 250 250,015
------------
1,129,515
------------
OIL & GAS (DRILLING & EQUIPMENT)--0.5%
Noble Drilling Corp. 9.125%,
7/1/06......................... Baa 250 276,875
------------
OIL & GAS (EXPLORATION & PRODUCTION)--1.7%
Benton Oil & Gas Co. 144A 9.375%,
11/1/07 (b).................... B 500 500,000
Lomak Petroleum, Inc. 8.75%,
1/15/07........................ B 375 382,500
------------
882,500
------------
PUBLISHING--1.0%
News America, Inc. 144A 6.625%,
1/9/08 (b)..................... Baa 500 493,125
------------
RETAIL (FOOD CHAINS)--1.0%
Fred Meyer 7.45%, 3/1/08......... Ba 500 500,000
------------
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--0.6%
RCN Corp. 144A 9.80%, 2/15/08
(b)............................ B $500 $ 313,125
------------
TRUCKERS--1.0%
Viking Star Shipping 9.625%,
7/15/03........................ Ba 500 523,125
------------
TOTAL CORPORATE BONDS
(Identified cost $10,017,963)................................ 10,138,165
------------
NON-AGENCY MORTGAGE BACKED SECURITIES--20.3%
BTC Mortgage Investors Trust 144A
97-S1, D 6.95%, 12/31/09 (b)... BBB(c) 750 751,172
Bear Stearns Mortgage Securities,
Inc. 95-1, 1B3 144A 6.48%,
5/25/10 (b).................... NR 598 564,084
Bear Stearns Mortgage Securities,
Inc. 95-1, 2B3 144A 7.40%,
7/25/10 (b).................... NR 483 473,726
ContiMortgage Home Equity Loan
Trust 98-1B, 7.86%, 4/15/29.... Baa 952 961,074
Criimi Mae Trust I 96-C1, A2 144A
7.56%, 6/30/33 (b)............. BBB(c) 400 405,750
EQCC Home Equity Loan Trust 96-4,
A4 6.47%, 8/15/10.............. Aaa 530 534,175
EQCC Home Equity Loan Trust 98-1,
A4F 6.46%, 3/15/21 (f)......... Aaa 800 799,000
G.E. Capital Mortgage Services,
Inc. 94-26, B2 7.03%,
7/25/09........................ Baa 251 252,418
IMC Home Equity Loan Trust 98-1,
M2 7.38%, 6/20/29.............. A 348 351,915
Merrill Lynch Mortgage, Inc.
95-C2, C 7.79%, 6/15/21........ A 263 269,395
Oregon Commercial Mortgage, Inc.
95-1, B 144A 7.35%, 6/25/23
(b)............................ AA 500 503,047
PNC Mortgage Securities Corp.
97-6, 1A 6.49%, 10/25/26 (e)... Aaa 387 387,828
Prudential Home Mortgage
Securities 93L, 3B2 144A
6.641%, 12/25/23 (b)........... NR 250 247,031
Prudential Home Mortgage
Securities 96-A, B1 144A 7.96%,
5/28/26 (b).................... NR 500 468,437
Residential Asset Securitization
Trust 96-A8, A1 8%, 12/25/26... AAA(c) 241 242,133
</TABLE>
4 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
NON-AGENCY MORTGAGE BACKED SECURITIES--CONTINUED
<S> <C> <C> <C>
Residential Funding Mortgage
Securities, Inc. I 93-S29, M3
7%, 8/25/08.................... BBB(c) $528 $ 530,821
Residential Funding Mortgage
Securities, Inc. I 96-S8, A4
6.75%, 3/25/11................. AAA(c) 91 92,547
Resolution Trust Corp. 92-C3, B
9.05%, 8/25/23................. AA(c) 124 125,169
Resolution Trust Corp. 93-C2, B
7.75%, 3/25/25................. AA(c) 500 499,383
Resolution Trust Corp. 94-C1, C
8%, 6/25/26.................... A(c) 500 511,719
Structured Asset Securities Corp.
95-C1, D 7.375%, 9/25/24....... BBB(c) 500 504,062
Structured Asset Securities Corp.
96-C3, C 144A 7.375%, 6/25/30
(b)............................ BBB(c) 350 354,047
Triangle Funding Ltd. 97-3A, 1B
144A 5.846%, 10/15/05 (b)...... Aa 500 499,063
------------
TOTAL NON-AGENCY MORTGAGE BACKED SECURITIES
(Identified cost $10,212,272)................................ 10,327,996
------------
FOREIGN GOVERNMENT SECURITIES--22.3%
ARGENTINA--2.9%
Republic of Argentina 8.75%,
7/10/02........................ Ba 250 233,750
Republic of Argentina Bearer FRB
6.625%, 3/31/05 (d)............ Ba 1,378 1,265,578
------------
1,499,328
------------
BRAZIL--3.3%
Republic of Brazil 6.875%,
4/15/06 (d).................... B 752 670,937
Republic of Brazil DCB-L Euro
6.938%, 4/15/12 (d)............ B 1,275 1,015,219
------------
1,686,156
------------
BULGARIA--1.3%
Republic of Bulgaria FLIRB-A
Bearer Euro 2.25%, 7/28/12
(d)............................ B 250 168,125
Republic of Bulgaria IAB PDI Euro
6.563%, 7/28/11 (d)............ B 600 474,000
------------
642,125
------------
CROATIA--1.4%
Croatia Series B 6.50%, 7/31/06
(d)............................ Baa 462 424,379
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
<S> <C> <C> <C>
CROATIA--CONTINUED
Croatia Series A 6.50%, 7/31/10
(d)............................ Baa $ 300 $ 266,438
------------
690,817
------------
ECUADOR--1.0%
Ecuador Bearer PDI Euro, PIK
interest capitalization,
6.625%, 2/27/15 (d)............ B 835 533,821
------------
KOREA--1.2%
Republic of Korea 0%, 4/26/99.... NR 455,000(g) 288,967
Republic of Korea 8.75%,
4/15/03........................ Ba 300 301,500
------------
590,467
------------
PANAMA--1.4%
Panama PDI Euro 6.563%, 7/17/16
(d)............................ Ba 260 216,706
Republic of Panama 8.875%,
9/30/27........................ Ba 500 489,750
------------
706,456
------------
PERU--0.3%
Peru PDI 144A 3.25%, 3/7/17 (b)
(d)............................ BB(c) 250 170,781
------------
POLAND--4.5%
Poland Discount Euro 6.688%,
10/27/24 (d)................... Baa 1,500 1,479,375
Poland Treasury Bill 0%,
1/13/99........................ NR 2,150(h) 547,945
Poland Treasury Bill 0%,
2/17/99........................ NR 1,040(h) 258,209
------------
2,285,529
------------
RUSSIA--2.4%
Ministry of Finance Russia Regs
9.25%, 11/27/01................ Ba 1,250 1,228,125
Russia IAN Series US 144A 6.719%,
12/15/15 (b) (d)............... NR 4 3,111
------------
1,231,236
------------
SOUTH AFRICA--0.5%
Republic of South Africa 8.50%,
6/23/17........................ Baa 250 250,937
------------
VENEZUELA--2.1%
Republic of Venezuela DCB Euro
6.50%, 12/18/07 (d)............ Ba 1,190 1,068,451
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $10,616,928)................................ 11,356,104
------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S PAR
BOND VALUE
RATING (000) VALUE
------- ------------- ------------
FOREIGN CORPORATE BONDS--9.9%
<S> <C> <C> <C>
ARGENTINA--2.5%
Cia Transporte Energia 144A
8.625%, 4/1/03 (b)............. BBB-(c) $500 $ 501,250
Telefonica De Argentina 144A
9.125%, 5/7/08 (b)............. Ba 250 251,250
Transportadora de Gas del Sur
10.25%, 4/25/01................ Ba 500 525,000
------------
1,277,500
------------
BRAZIL--0.5%
Arisco Prod Alimenticios 144A
10.75%, 5/22/05 (b)............ NR 250 243,125
------------
CHINA--0.4%
AES China Generating Co. Yankee
10.125%, 12/15/06.............. Ba 250 236,250
------------
COLOMBIA--1.5%
Financiera Energ Nacional EMTN
Euro 144A 9%, 11/8/99 (b)...... BBB-(c) 750 773,437
------------
MEXICO--4.0%
Altos Hornos de Mexico A 11.375%,
4/30/02........................ B 600 621,000
Banco Nacional de Mexico 144A
7.57%, 12/31/00 (b)............ NR 500 502,813
Empresas ICA Sociedad 144A
11.875%, 5/30/01 (b)........... B 250 271,562
Grupo Elektra SA de C.V. 12.75%,
5/15/01........................ B(c) 250 276,875
Vicap SA 10.25%, 5/15/02......... Ba 350 364,875
------------
2,037,125
------------
TURKEY--1.0%
Kazkommertsbank International
144A 11.25%, 5/8/01 (b)........ B 500 500,000
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $5,571,931)................................. 5,067,437
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------ ------------
<S> <C> <C>
PREFERRED STOCKS--1.4%
REITS--1.4%
Home Ownership Funding 2, Step-down Pfd. 144A 13.338%
(b)................................................ 750 $ 725,767
------------
TOTAL PREFERRED STOCKS
(Identified cost $701,807)........................................ 725,767
------------
TOTAL LONG-TERM INVESTMENTS--97.6%
(Identified cost $49,188,641)..................................... 49,742,995
------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD
& PAR
POOR'S VALUE
RATING (000)
------- ------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--4.5%
COMMERCIAL PAPER--3.5%
Marsh & McClennan Cos., Inc. 5.52%, 5/1/98... A-1+ $1,805 1,805,000
------------
REPURCHASE AGREEMENT--1.0%
State Street Repurchase Agreement 4% dated 4/30/98 due
5/1/98, repurchase price $503,056, collateralized by
U.S. Treasury Note 9.875%, 11/15/15, market value
$515,904............................................ 503 503,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,308,000)...................................... 2,308,000
------------
TOTAL INVESTMENTS--102.1%
(Identified cost $51,496,641)..................................... 52,050,995(a)
Cash and receivables, less liabilities--(2.1%).................... (1,082,803)
------------
NET ASSETS--100.0%.................................................. $50,968,192
------------
------------
</TABLE>
(a) Federal Income tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $584,970 and gross
depreciation of $128,739 for income tax purposes. At April 30,1998, the
aggregate cost of securities for federal income tax purposes was
$51,594,764.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,1998,
these securities amounted to a value of $11,388,958 or 22.3% 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) All or a portion segregated as collateral.
(f) When issued.
(g) Par value represents Korean Won.
(h) Par value represents Polish Zloty.
6 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- ------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $51,496,641) $ 52,050,995
Cash 866
Receivables
Fund shares sold 869,860
Interest 656,533
Investment securities sold 201,570
-------------
Total Assets 53,779,824
-------------
LIABILITIES
Payables
Investment securities purchased 2,252,459
Fund shares repurchased 418,564
Income distribution payable 63,602
Distribution fee 16,546
Financial agent fee 7,726
Trustees' fee 8,681
Transfer agent fee 6,547
Investment advisory fee 2,027
Accrued expenses 35,480
-------------
Total Liabilities 2,811,632
-------------
NET ASSETS $ 50,968,192
-------------
-------------
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial
interest $ 50,504,885
Distributions in excess of net investment
income (1,128)
Accumulated net realized loss (89,919)
Net unrealized appreciation 554,354
-------------
NET ASSETS $ 50,968,192
-------------
-------------
Shares of Class A common stock outstanding,
$0.01 par value, unlimited authorization
(Net Assets $30,555,895) 6,099,206
Net asset value per share $5.01
Offering price per share $5.01/(1-2.25%) $5.13
Shares of Class B common stock outstanding,
$0.01 par value, unlimited authorization
(Net Assets $12,273,735) 2,451,387
Net asset value and offering price per share $5.01
Shares of Class C common stock outstanding,
$0.01 par value, unlimited authorization
(Net Assets $8,138,562) 1,624,400
Net asset value and offering price per share $5.01
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 1,664,246
Dividends 27,622
-----------
Total investment income 1,691,868
-----------
EXPENSES
Investment advisory fee 119,628
Distribution fee--Class A 35,980
Distribution fee--Class B 41,054
Distribution fee--Class C 9,422
Financial agent fee 46,614
Transfer agent 33,561
Registration 21,920
Professional 19,799
Printing 15,252
Trustees 10,674
Custodian 9,790
Miscellaneous 4,626
-----------
Total expenses 368,320
Less expenses borne by investment adviser (119,227)
-----------
Net expenses 249,093
-----------
NET INVESTMENT INCOME 1,442,775
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on securities 32,044
Net change in unrealized appreciation on
investments 553,933
-----------
NET GAIN ON INVESTMENTS 585,977
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,028,752
-----------
-----------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- ------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1998 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1997
-------------- -----------------
<S> <C> <C>
FROM OPERATIONS
Net investment income $ 1,442,775 $ 1,851,093
Net realized gain 32,044 863,600
Net change in unrealized appreciation (depreciation) 553,933 (213,559)
-------------- -----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,028,752 2,501,134
-------------- -----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income--Class A (988,399) (1,358,917)
Net investment income--Class B (347,271) (500,332)
Net investment income--Class C (120,649) (2,174)
Net realized gains--Class A (649,646) --
Net realized gains--Class B (241,238) --
Net realized gains--Class C (42,286) --
-------------- -----------------
DECREASE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (2,389,489) (1,861,423)
-------------- -----------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,050,398 and 5,033,530 shares, respectively) 10,252,443 25,379,012
Net asset value of shares issued from reinvestment of distributions
(285,024 and 229,749 shares, respectively) 1,417,886 1,158,643
Cost of shares repurchased (1,882,594 and 2,409,066 shares, respectively) (9,416,781) (12,117,223)
-------------- -----------------
Total 2,253,548 14,420,432
-------------- -----------------
CLASS B
Proceeds from sales of shares (510,212 and 1,104,864 shares, respectively) 2,557,140 5,561,801
Net asset value of shares issued from reinvestment of distributions
(91,516 and 69,536 shares, respectively) 455,088 350,687
Cost of shares repurchased (188,657 and 346,945 shares, respectively) (947,977) (1,753,224)
-------------- -----------------
Total 2,064,251 4,159,264
-------------- -----------------
CLASS C
Proceeds from sales of shares (1,758,459 and 113,197 shares, respectively) 8,802,219 583,290
Net asset value of shares issued from reinvestment of distributions
(30,348 and 334 shares, respectively) 151,270 1,698
Cost of shares repurchased (277,936 and 2 shares, respectively) (1,391,862) (10)
-------------- -----------------
Total 7,561,627 584,978
-------------- -----------------
INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 11,879,426 19,164,674
-------------- -----------------
NET INCREASE IN NET ASSETS 11,518,689 19,804,385
NET ASSETS
Beginning of period 39,449,503 19,645,118
-------------- -----------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME AND
UNDISTRIBUTED NET INVESTMENT INCOME OF ($1,128) AND $12,416, RESPECTIVELY) $ 50,968,192 $ 39,449,503
-------------- -----------------
-------------- -----------------
</TABLE>
8 See Notes to Financial Statements
<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
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91 $ 4.83
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.17(2) 0.34(2) 0.33(2) 0.33(2) 0.29(2) 0.32(2)
Net realized and unrealized gain
(loss) 0.07 0.14 0.17 0.13 (0.26) 0.08
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.24 0.48 0.50 0.46 0.03 0.40
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.17) (0.33) (0.33) (0.33) (0.29) (0.32)
Dividends from net realized gains (0.12) -- -- -- (0.03) --
Tax return of capital -- -- -- -- (0.01) --
-------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.29) (0.33) (0.33) (0.33) (0.33) (0.32)
-------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.05) 0.15 0.17 0.13 (0.30) 0.08
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $5.01 $ 5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91
-------- --------- --------- --------- --------- ---------
-------- --------- --------- --------- --------- ---------
Total return(1) 4.83%(5) 10.08% 10.91% 10.27% 0.40% 8.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $30,556 $28,557 $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% 1.00%
Net investment income 6.77%(4) 6.54% 6.88% 7.07% 5.99% 6.39%
Portfolio turnover 58%(5) 246% 232% 344% 121% 128%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
SIX
MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91 $ 4.83
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.16(3) 0.31(3) 0.31(3) 0.30(3) 0.27(3) 0.30(3)
Net realized and unrealized gain
(loss) 0.07 0.15 0.17 0.13 (0.26) 0.08
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.23 0.46 0.48 0.43 0.01 0.38
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.16) (0.31) (0.31) (0.30) (0.27) (0.30)
Dividends from net realized gains (0.12) -- -- -- (0.03) --
Tax return of capital -- -- -- -- (0.01) --
-------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.28) (0.31) (0.31) (0.30) (0.31) (0.30)
-------- --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.05) 0.15 0.17 0.13 (0.30) 0.08
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $5.01 $ 5.06 $ 4.91 $ 4.74 $ 4.61 $ 4.91
-------- --------- --------- --------- --------- ---------
-------- --------- --------- --------- --------- ---------
Total return(1) 4.56%(5) 9.51% 10.36% 9.71% (0.03)% 8.02%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $12,274 $10,318 $5,943 $4,659 $6,418 $3,968
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.50%(4) 1.50% 1.50% 1.50% 1.45% 1.45%
Net investment income 6.36%(4) 6.05% 6.38% 6.59% 5.74% 5.79%
Portfolio turnover 58%(5) 246% 232% 344% 121% 128%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of $0.01,
$0.04, $0.06, $0.08, $0.08 and $0.09, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of $0.01,
$0.04, $0.06, $0.08, $0.08 and $0.09, respectively.
(4) Annualized
(5) Not Annualized
See Notes to Financial Statements 9
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS C
----------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/98 10/1/97 TO
(UNAUDITED) 10/31/97
------------- -------------
<S> <C> <C>
Net asset value, beginning of period $ 5.06 $ 5.15
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.16(2) 0.03(2)
Net realized and unrealized gain (loss) 0.07 (0.09)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.23 (0.06)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.16) (0.03)
Dividends from net realized gains (0.12) --
Tax return of capital -- --
------ ------
TOTAL DISTRIBUTIONS (0.28) (0.03)
------ ------
CHANGE IN NET ASSET VALUE (0.05) (0.09)
------ ------
NET ASSET VALUE, END OF PERIOD $ 5.01 $ 5.06
------ ------
------ ------
Total return(1) 4.69%(4) (1.30)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $8,139 $575
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.25%(3) 1.25%(3)
Net investment income 6.43%(3) 5.51%(3)
Portfolio turnover 58%(4) 246%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of $0.01,
$0.04, respectively.
(3) Annualized
(4) Not annualized
10 See Notes to Financial Statements
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (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
Class A, Class B and Class C 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. Class C shares are sold with no sales charge. 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 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.
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.
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%, 1.50% and 1.25% of
the average aggregate daily net asset value of Class A, Class B and Class C
shares, respectively. For the six months ended April 30, 1998, the Adviser has
reimbursed the Fund $119,227 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 $2,972 for Class A shares and deferred sales
charges of $7,779
11
<PAGE>
PHOENIX MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998 (UNAUDITED) (CONTINUED)
for Class B shares for the six months ended April 30, 1998. In addition, the
Fund pays PEPCO a distribution fee at an annual rate of 0.25% for Class A
shares, 0.75% for Class B shares and 0.50% 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 six months ended April 30,
1998, $42,349 was earned by the Distributor. $36,558 was paid to unaffiliated
participants, and $7,549 was paid to W.S. Griffith, an indirect subsidiary of
PHL.
As Financial Agent of the Fund, PEPCO received a fee for book-keeping,
administration, and pricing services at an annual rate of 0.05% of average daily
net assets up to $100 million, 0.04% of average daily net assets of $100 million
to $300 million, 0.03% of average daily net assets of $300 million through $500
million, and 0.015% of average daily net assets greater than $500 million; a
minimum fee may apply. PEPCO serves as the Fund's Transfer Agent with State
Street Bank and Trust as sub-transfer agent. For the six months ended April 30,
1998, transfer agent fees were $33,561 of which PEPCO retained $524 which is net
of the fees paid to State Street.
At April 30, 1998, PHL and affiliates held 29,693 Class A shares of the Fund
with a value of $148,762.
3. PURCHASE AND SALE OF SECURITIES
Purchases and sales of securities, excluding short-term securities, for the
six months ended April 30, 1998, aggregated $37,300,561 and $24,686,344,
including $6,698,422 and $9,622,486, respectively, of U.S. Government and agency
securities.
4. 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 the income they generate, as well as a fund's ability to
repatriate such amounts.
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.
12
<PAGE>
SHORT TERM BOND FUND
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
Robert Chesek
E. Virgil Conway
Harry Daizell-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
John F. Sharry, Executive Vice President
James D. Wehr, Senior Vice President
David L. Albrycht, Vice President
William E. Keen, III, Vice President
William R. Moyer, Vice President
Leonard J. Saltiel, Vice President
Nancy C. 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>
---------------
PHOENIX FUNDS BULK RATE MAIL
P.O. Box 2200 U.S. POSTAGE
Enfield CT 06083-2200 PAID
SPRINGFIELD, MA
PERMIT NO. 444
---------------
[LOGO] PHOENIX
INVESTMENT PARTNERS
