AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 2000
REGISTRATION NO. 33-45758
FILE NO. 811-6566
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 14 |X|
AND/OR
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 15 |X|
(CHECK APPROPRIATE BOX OR BOXES)
------------
PHOENIX MULTI-SERIES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
------------
101 Munson Street, Greenfield, Massachusetts 01301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
C/O PHOENIX EQUITY PLANNING CORPORATION--SHAREHOLDER SERVICES
(800) 243-1574
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
------------
Pamela S. Sinofsky
Assistant Vice President and Assistant Counsel
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, Connecticut 06115
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective (check
appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
|X| on October 31, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Phoenix Multi-Series Trust, a Delaware business trust (the "Registrant") is
the successor issuer to Phoenix-Multi-Sector Short Term Bond Fund, a
Massachusetts business trust (the "Predecessor"). This Post-Effective Amendment
has been filed for the purpose of adopting, under the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the
Registration Statement on Form N-1A (nos. 33-45758 and 811-6566) of the
Predecessor pursuant to the provisions of Rule 414 under the Securities Act of
1933. In accordance with the provisions of paragraph (d) of Rule 414, this
Registration Statement also revises and sets forth additional information
arising in connection with Registrant's change of domicile.
================================================================================
<PAGE>
PHOENIX MULTI-SERIES TRUST
CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)
<TABLE>
PART A
INFORMATION REQUIRED IN PROSPECTUS
<CAPTION>
ITEM NUMBER FORM N-1A, PART A PROSPECTUS CAPTION
----------------------------- ------------------
<S> <C> <C>
1. Front and Back Cover Pages............................... Cover Page, Back Cover Page
2. Risk/Return Summary: Investments, Risk Performance....... Investment Risk and Return Summary
3. Risk/Return Summary: Fee Table........................... Fund Expenses
4. Investment Objectives, Principal Investment Strategies
and Related Risks........................................ Investment Risk and Return Summary
5. Management's Discussion of Fund Performance.............. Performance Tables
6. Management, Organization, and Capital Structure.......... Management of the Fund
7. Shareholder Information.................................. Pricing of Fund Shares; Sales Charges; Your
Account; How to Buy Shares; How to Sell Shares;
Things to Know When Selling Shares; Account
Policies; Investor Services; Tax Status
8. Distribution Arrangements................................ Sales Charges
9. Financial Highlights Information......................... Financial Highlights
PART B
INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
ITEM NUMBER FORM N-1A, PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
----------------------------- -------------------------------------------
10. Cover Page and Table of Contents......................... Cover Page, Table of Contents
11. Fund History............................................. The Fund
12. Description of the Fund and Its Investment Risks......... Investment Techniques and Risks; Investment
Restrictions
13. Management of the Fund................................... Management of the Fund
14. Control Persons and Principal Holders of Securities...... Management of the Fund
15. Investment Advisory and Other Services................... Services of the Adviser; The Distributor;
Distribution Plans; Other Information
16. Brokerage Allocation and Other Practices................. Portfolio Transactions and Brokerage
17. Capital Stock and Other Securities...................... Other Information
18. Purchase, Redemption, and Pricing of Shares.............. Net Asset Value; How to Buy Shares; Investor
Account Services; Redemption of Shares; Tax
Sheltered Retirement Plans
19. Taxation of the Fund..................................... Dividends, Distributions and Taxes
20. Underwriters............................................. The Distributor
21. Calculation of Performance Data.......................... Performance Information
22. Financial Statements..................................... Financial Statements
PART C
INFORMATION REQUIRED TO BE INCLUDED IN PART C IS SET FORTH UNDER
THE APPROPRIATE ITEM, SO NUMBERED, IN PART C OF THIS
REGISTRATION STATEMENT.
</TABLE>
<PAGE>
Phoenix Investment Partners
Prospectus
October 31, 2000
-------- Goodwin
Phoenix-Goodwin
Multi-Sector Fixed Income Fund
Phoenix-Goodwin
Multi-Sector Short Term
Bond Fund
Neither the Securities and Exchange
Commission nor any state securities
commission has approved or disapproved
of these securities or determined if this
prospectus is truthful or complete. Any
representation to the contrary is a
criminal offense.
This prospectus contains important
information that you should know
before investing in the Phoenix-Goodwin
Multi-Sector Fixed Income Fund and
the Phoenix-Goodwin Multi-Sector
Short Term Bond Fund. Please read it
carefully and retain it for future
reference.
[logo] PHOENIX
INVESTMENT PARTNERS
<PAGE>
TABLE OF CONTENTS
--------------------------------------------------------------------
Phoenix-Goodwin Multi-sector Fixed Income Fund
Investment Risk and Return Summary.......................... 1
Fund Expenses............................................... 6
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
Investment Risk and Return Summary.......................... 8
Fund Expenses............................................... 12
Additional Investment Techniques............................... 14
Management of the Funds........................................ 15
Pricing of Fund Shares......................................... 17
Sales Charges.................................................. 18
Your Account................................................... 21
How to Buy Shares.............................................. 22
How to Sell Shares............................................. 22
Things You Should Know When Selling Shares..................... 23
Account Policies............................................... 25
Investor Services.............................................. 26
Tax Status of Distributions.................................... 27
Financial Highlights........................................... 28
Additional Information......................................... 34
[TRIANGLE] Phoenix
Multi-
Series
Trust
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Goodwin Multi-Sector Fixed Income Fund has a primary objective to
maximize current income while preserving capital. There is no guarantee that the
fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, the fund invests at least 65% of its total
assets in the following sectors of fixed income securities:
o Securities issued or guaranteed as to principal and interest by the
U.S. Government, its agencies, authorities or instrumentalities,
including CMOs, REMICs and other pass-through securities;
o Debt securities issued by foreign issuers, including foreign
governments and their political subdivisions and issuers located in
emerging market countries;
o Investment grade securities, which are securities with credit
ratings within the four highest rating categories, or if unrated,
securities that the adviser believes are of comparable quality,
including short-term securities; and
o High yield-high risk fixed income securities of U.S. issuers (so
called "junk bonds").
> The fund may invest in any of these sectors or may not invest in a
sector at all.
> Securities are selected using a sector rotation approach. The adviser
seeks to adjust the proportion of fund investments in the sectors
described above and the selections within sectors to obtain higher
relative returns. Sectors are analyzed by the adviser for attractive
values. Securities within sectors are selected based on general
economic and financial conditions, and the issuer's business,
management, cash, assets, earnings and stability. Securities selected
for investment are those that the adviser believes offer the best
potential for total return based on risk-to-reward tradeoff.
> Interest rate risk is managed by a duration neutral strategy. Duration
measures the interest rate sensitivity of a fixed income security by
assessing and weighting the present value of the security's payment
pattern. Generally, the longer the maturity the greater the duration
and therefore the greater effect interest rate changes have on the
price of the security. By maintaining the duration of the fund at a
level similar to that of its benchmark, the Lehman Brothers Aggregate
Bond Index, the adviser believes that the fund's exposure to interest
rate risk is more consistent with its benchmark's risk profile than
that of a fund that attempts to predict future interest rate changes.
On
Phoenix-Goodwin Multi-Sector Fixed Income Fund 1
<PAGE>
September 30, 2000 the modified adjusted duration of the Lehman
Brothers Aggregate Bond Index was 4.83 years.
> Fixed income securities selected for portfolio investment may be of any
maturity. However, the adviser attempts to maintain a maturity
composition similar to that of its benchmark in an effort to maintain
an interest rate risk profile consistent with the benchmark. Maturity
composition refers to the percentage of securities within specific
maturity ranges as well as the aggregate weighted average portfolio
maturity. On September 30, 2000 the maturity of the Lehman Brothers
Aggregate Bond Index was 8.69 years.
> The adviser's investment strategies may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Temporary Defensive Strategy: During periods of rising interest rates, unstable
pricing and currency exchange, or in response to extreme market fluctuations,
the adviser, at its discretion, may invest part or all of the fund's assets in
cash or cash equivalents. When this happens, the fund may not achieve its
investment objective.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating the greater
chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
CMOS, REMICS AND OTHER PASS-THROUGH SECURITIES
The values of pass-through securities may fluctuate to a greater degree than
other debt securities in response to changes in interest rates. Early payoffs on
the underlying loans in mortgage-backed and asset-backed pass-through securities
and CMOs may result in the fund
2 Phoenix-Goodwin Multi-Sector Fixed Income Fund
<PAGE>
receiving less income than originally anticipated. The variability in
prepayments will tend to limit price gains when interest rates drop and
exaggerate price declines when interest rates rise. In the event of high
prepayments, the fund may be required to invest the proceeds at lower interest
rates, causing the fund to earn less than if prepayments had not occurred.
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval may be required in some
developing countries for the release of investment income, capital and sale
proceeds to foreign investors, and some developing countries may limit the
extent of foreign investment in domestic companies.
FOREIGN INVESTING
Foreign markets and currencies may not perform as well as U.S. markets.
Political and economic uncertainty in foreign countries, as well as less public
information about foreign investments, may negatively impact the fund's
portfolio. Dividends and other income payable on foreign securities may be
subject to foreign taxes. Some investments may be made in currencies other than
U.S. dollars that will fluctuate in value as a result of changes in currency
exchange rates.
HIGH YIELD-HIGH RISK FIXED INCOME SECURITIES
High yield-high risk securities entail greater price volatility and credit and
interest rate risk than investment grade securities. Analysis of the
creditworthiness of high yield-high risk issuers is more complex than for
higher-grade securities, making it more difficult for the adviser to accurately
predict risk. There is a greater risk with high yield-high risk securities that
an issuer will not be able to make principal and interest payments when due. If
the fund pursues missed payments, there is a risk that fund expenses could
increase. In addition, lower-rated securities may not trade as often and may be
less liquid than higher-rated securities.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
Phoenix-Goodwin Multi-Sector Fixed Income Fund 3
<PAGE>
LONG-TERM MATURITIES
Securities with longer maturities may be subject to greater price fluctuations
due to interest rate, tax law and general market changes.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee principal and interest will be
timely paid to holders of the securities. The entities do not guarantee that the
value of fund shares will increase. In addition, not all U.S. Government
securities are backed by the full faith and credit of the United States.
4 Phoenix-Goodwin Multi-Sector Fixed Income Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Multi-Sector Fixed Income Fund. The bar chart shows
changes in the fund's Class A Shares performance from year to year over a
10-year period.(1) The table below shows how the fund's average annual returns
compare to those of a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1990 5.29
1991 28.25
1992 12.06
1993 15.56
1994 -6.71
1995 19.18
1996 13.55
1997 8.99
1998 -6.87
1999 8.22
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the 10-year period shown in the
chart above, the highest return for a quarter was 9.95% (quarter ending June 30,
1995) and the lowest return for a quarter was -11.70% (quarter ending September
30, 1998). Year-to-date performance (through September 30, 2000) was 1.45%
<TABLE>
<CAPTION>
Life of the Fund(2)
Average Annual Total Returns ---------------------
(for the periods ending 12/31/99)(1) One Year Five Years Ten Years Class B Class C
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 3.08% 7.32% 8.79% -- --
------------------------------------------------------------------------------------------------------------------
Class B Shares 3.43% 7.56% N/A 6.80% --
------------------------------------------------------------------------------------------------------------------
Class C Shares 7.37% N/A N/A -- -1.43%
------------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate -0.83% 7.73% 7.70% 6.54%(4) 4.22%(5)
Bond Index(3)
------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and C Shares.
(2) Class B Shares since January 3, 1992, and Class C Shares since October 14,
1997.
(3) The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of bond market total return performance. The Index's performance does
not include sales charges.
(4) Index performance since December 31, 1991.
(5) Index performance since October 31, 1997.
Phoenix-Goodwin Multi-Sector Fixed Income Fund 5
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 5%(a) 1%(b)
Maximum Sales Charge (load) Imposed on Reinvested None None
Dividends None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.55% 0.55% 0.55%
Distribution and Service (12b-1) Fees(c) 0.25% 1.00% 1.00%
Other Expenses 0.34% 0.34% 0.34%
---- ---- ----
TOTAL ANNUAL FUND OPERATING EXPENSES 1.14% 1.89% 1.89%
==== ==== ====
</TABLE>
---------------
(a) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 1% annually to 2% during the
fourth and fifth years and to 0% after the fifth year.
(b) The deferred sales charge is imposed on Class C Shares redeemed during the
first year only.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after eight years. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
6 Phoenix-Goodwin Multi-Sector Fixed Income Fund
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $586 $820 $1,073 $1,795
-----------------------------------------------------------------------------------------------------------------
Class B $592 $794 $1,021 $2,016
-----------------------------------------------------------------------------------------------------------------
Class C $292 $594 $1,021 $2,212
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $192 $594 $1,021 $2,016
-----------------------------------------------------------------------------------------------------------------
Class C $192 $594 $1,021 $2,212
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund 7
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
INVESTMENT RISK AND RETURN SUMMARY
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
Phoenix-Goodwin Multi-Sector Short Term Bond Fund has a primary objective to
provide high current income while attempting to limit changes in the fund's net
asset value per share caused by interest rate changes. There is no guarantee
that the fund will achieve its objective.
PRINCIPAL INVESTMENT STRATEGIES
> Under normal circumstances, the fund invests at least 65% of its assets
in investment grade securities which are rated at the time of
investment BBB or above by Standard and Poor's Corporation ("S&P") or
Duff & Phelps Credit Rating Company ("D&P") or Baa or above by Moody's
Investor's Services, Inc. (Moody's) or unrated securities determined by
the adviser to be of the same comparable, limited quality. The fund may
continue to hold securities whose credit quality falls below investment
grade.
> The fund seeks to achieve its objective by investing in a diversified
portfolio of primarily short term fixed income securities having an
expected weighted average maturity of three years or less and that are
in one of the following market sectors:
o Securities issued or guaranteed as to principal and interest by the
U.S. Government, its agencies, authorities or instrumentalities,
including CMOs, REMICs and other pass-through securities;
o Debt securities issued by foreign issuers, including foreign
governments and their political subdivisions;
o Investment grade securities; and
o High yield-high risk securities.
> The fund may invest in any of these sectors or may not invest in a
sector at all.
> Securities are selected using a sector rotation approach. The adviser
seeks to adjust the proportion of fund investment in the sectors
described above and the selections within sectors to obtain higher
relative returns. Sectors are analyzed by the adviser for attractive
values. Securities within sectors are selected based on general
economic and financial conditions, and the issuer's business,
management, cash, assets, earnings and stability. Securities selected
for investment are those that the adviser believes offer the best
potential for total return based on risk-to-reward tradeoff.
> Interest rate risk is managed by a duration neutral strategy. Duration
measures the interest rate sensitivity of a fixed income security by
assessing and weighting the present value of the security's payment
pattern. Generally, the longer the maturity the greater
8 Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<PAGE>
the duration and therefore the greater effect interest rate changes
have on the price of the security. By maintaining the duration of the
fund at a level similar to that of its benchmark, the Merrill Lynch
Medium Quality Corporate Short-Term Bond Index, the adviser believes
that the fund's exposure to interest rate risk is more consistent with
its benchmark's risk profile than that of a fund that attempts to
predict future interest rate changes. On September 30, 2000 the
modified adjusted duration of the Merrill Lynch Medium Quality
Corporate Short-Term Bond Index was 0.74 years.
> The adviser's investment strategies may result in a higher portfolio
turnover rate for the fund. High portfolio turnover rates may increase
costs to the fund, may negatively affect fund performance, and may
increase capital gains distributions, resulting in greater tax
liability to you.
Please refer to "Additional Investment Techniques" for other investment
techniques of the fund.
PRINCIPAL RISKS
If you invest in this fund, you risk that you may lose your investment.
GENERAL
The value of your shares and the level of income you receive are subject to
risks associated with the types of securities selected for fund investment.
Neither the fund nor the adviser can assure you that a particular level of
income will consistently be achieved or that the value of the fund's investments
that supports your share value will increase. If the value of fund investments
decreases, your share value will decrease.
CREDIT RISK
Credit risk pertains to the issuer's ability to make scheduled interest or
principal payments. Generally, the lower a security's credit rating the greater
chance that the issuer will be unable to make such payments when due. Credit
risk is determined at the date of investment. If after the date of purchase the
rating declines, the fund is not obligated to sell the security.
CMOS, REMICS AND OTHER PASS-THROUGH SECURITIES
The values of pass-through securities may fluctuate to a greater degree than
other debt securities in response to changes in interest rates. Early payoffs on
the underlying loans in mortgage-backed and asset-backed pass-through securities
and CMOs may result in the fund receiving less income than originally
anticipated. The variability in prepayments will tend to limit price gains when
interest rates drop and exaggerate price declines when interest rates rise. In
the event of high prepayments, the fund may be required to invest the proceeds
at lower interest rates, causing the fund to earn less than if the prepayments
had not occurred.
Phoenix-Goodwin Multi-Sector Short Term Bond Fund 9
<PAGE>
EMERGING MARKET INVESTING
Investments in less-developed countries whose markets are still emerging
generally present risks in greater degree than those presented by investment in
foreign issuers based in countries with developed securities markets and more
advanced regulatory systems. Prior governmental approval may be required in some
developing countries for the release of investment income, capital and sale
proceeds to foreign investors, and some developing countries may limit the
extent of foreign investment in domestic companies.
FOREIGN INVESTING
Foreign markets and currencies may not perform as well as U.S. markets.
Political and economic uncertainty in foreign countries, as well as less public
information about foreign investments, may negatively impact the fund's
portfolio. Dividends and other income payable on foreign securities may be
subject to foreign taxes. Some investments may be made in currencies other than
U.S. dollars that will fluctuate in value as a result of changes in the currency
exchange rate.
HIGH YIELD-HIGH RISK FIXED INCOME SECURITIES
High yield-high risk securities entail greater price volatility and credit and
interest rate risk than investment grade securities. Analysis of the credit
worthiness of high yield-high risk issuers is more complex than for higher-grade
securities, making it more difficult for the adviser to accurately predict risk.
There is a greater risk with high yield-high risk securities that an issuer will
not be able to make principal and interest payments when due. If the fund
pursues missed payments, there is a risk that fund expenses could increase. In
addition, lower-rated securities may not trade as often and may be less liquid
than higher-rated securities.
INTEREST RATE RISK
Interest rate trends can have an affect on the value of your shares. If interest
rates rise, the value of debt securities generally will fall. Because the fund
may hold securities with longer maturities, the net asset value of the fund may
experience greater price fluctuations in response to changes in interest rates
than funds that hold only securities with short-term maturities. Prices of
longer-term securities are affected more by interest rate changes than prices of
shorter-term securities.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, its agencies,
authorities and instrumentalities only guarantee principal and interest will be
timely paid to holders of the securities. The entities do not guarantee that the
value of fund shares will increase. In addition, not all U.S. Government
securities are backed by the full faith and credit of the United States.
10 Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<PAGE>
PERFORMANCE TABLES
The bar chart and table below provide some indication of the risks of investing
in the Phoenix-Goodwin Multi-Sector Short Term Bond Fund. The bar chart shows
changes in the fund's Class A Shares performance from year to year over the life
of the fund.(1) The table below shows how the fund's average annual returns
compare to those of a broad-based securities market index. The fund's past
performance is not necessarily an indication of how the fund will perform in the
future.
[GRAPHIC OMITTED]
CALENDAR YEAR ANNUAL RETURN (%)
1993 8.95
1994 -1.86
1995 13.64
1996 11.30
1997 9.49
1998 1.30
1999 4.49
(1) The fund's average annual returns in the chart above do not reflect the
deduction of any sales charges. The returns would have been less than those
shown if sales charges were deducted. During the period shown in the chart
above, the highest return for a quarter was 5.38% (quarter ending June 30, 1995)
and the lowest return for a quarter was -5.50% (quarter ending September 30,
1998). Year-to-date performance (through September 30, 2000) was 4.71%.
<TABLE>
------------------------------------------------------------------------------------------------------------------
<CAPTION>
Life of the Fund(2)
Average Annual Total Returns ------------------------------------
(for the periods ending 12/31/99)(1) One Year Five Years Class A Class B Class C
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares 2.14% 7.46% 6.03% -- --
------------------------------------------------------------------------------------------------------------------
Class B Shares 2.52% 7.36% -- 5.78% --
------------------------------------------------------------------------------------------------------------------
Class C Shares 4.23% N/A -- -- 2.56%
------------------------------------------------------------------------------------------------------------------
Merrill Lynch Medium Quality 4.01% 7.12% 6.33%(4) 6.33%(4) 5.64%
Corporate Short-Term Bond Index(3)
------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The fund's average annual returns in the table above reflect the deduction
of the maximum sales charge for an investment in the fund's Class A Shares and a
full redemption in the fund's Class B and C Shares.
(2) Class A and Class B Shares since July 6, 1992 and Class C Shares since
October 1, 1997.
(3) The Merrill Lynch Medium Quality Corporate Short-Term Bond Index is an
unmanaged, commonly used index that tracks the returns of corporate issues rated
between BBB and A by Standard & Poor's, with maturities from 1 to 3 years. The
Index's performance does not reflect sales charges.
(4) Index performance since June 30, 1992.
Phoenix-Goodwin Multi-Sector Short Term Bond Fund 11
<PAGE>
FUND EXPENSES
--------------------------------------------------------------------------------
This table illustrates all fees and expenses that you may pay if you buy and
hold shares of the fund.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) Imposed on Purchases (as a
percentage of offering price) 2.25% None None
Maximum Deferred Sales Charge (load) (as a percentage of
the lesser of the value redeemed or the amount invested) None 2%(b) None
Maximum Sales Charge (load) Imposed on Reinvested None None
Dividends None
Redemption Fee None None None
Exchange Fee None None None
-------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)
Management Fees 0.55% 0.55% 0.55%
Distribution and Service (12b-1) Fees(c) 0.25% 0.75% 0.50%
Other Expenses 0.68% 0.68% 0.68%
----- ----- -----
TOTAL ANNUAL FUND OPERATING EXPENSES(a) 1.48% 1.98% 1.73%
===== ===== =====
</TABLE>
---------------
(a) The fund's investment adviser has agreed to reimburse through February 28,
2001 the Phoenix-Goodwin Multi-Sector Short Term Bond Fund's operating expenses,
other than Management Fees and Distribution and Service Fees, to the extent that
such expenses exceed 0.20% for each class of shares. Total Annual Operating
Expenses for the fund, after expense reimbursement, are: 1.00% for Class A
Shares, 1.50% for Class B Shares, and 1.25% for Class C Shares.
(b) The maximum deferred sales charge is imposed on Class B Shares redeemed
during the first year; thereafter, it decreases 0.50% annually to 1% during the
third year and to 0% after the third year.
(c) Distribution and Service Fees represent an asset-based sales charge that,
for a long-term shareholder, may be higher than the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
("NASD").
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. In the case of Class B Shares, it is
assumed that your shares are converted to Class A after six years. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
12 Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A $372 $681 $1,013 $1,950
-----------------------------------------------------------------------------------------------------------------
Class B $351 $622 $1,069 $2,053
-----------------------------------------------------------------------------------------------------------------
Class C $176 $544 $ 937 $2,038
-----------------------------------------------------------------------------------------------------------------
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B $201 $622 $1,069 $2,053
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Your actual expenses may be lower than those shown in the tables above
since the expense levels used to calculate the figures shown do not include the
reimbursement of expenses over certain levels by the fund's investment adviser.
Refer to the section "Management of the Fund" for information about expense
reimbursement.
Phoenix-Goodwin Multi-Sector Short Term Bond Fund 13
<PAGE>
ADDITIONAL INVESTMENT TECHNIQUES
--------------------------------------------------------------------------------
In addition to the Principal Investment Strategies and Principal Risks, each of
the funds may engage in the following investment techniques as indicated below:
BORROWING
Each of the funds may obtain fixed interest rate loans in amounts up to
one-third the value of its net assets and invest the loan proceeds in other
assets. If the securities purchased with such borrowed money decrease in value
or do not increase enough to cover interest and other borrowing costs, the funds
will suffer greater losses than if no borrowing took place.
DERIVATIVES
The funds may buy and write call and put options on securities, securities
indices, and foreign currencies, and may enter into futures contracts and
related options. The funds may also enter into swap agreements relating to
interest rates, foreign currencies, and securities indices and forward foreign
currency contracts. The funds may use these techniques to hedge against changes
in interest rates, foreign currency exchange rates, changes in securities prices
or other factors affecting the value of their investments, or as part of their
overall investment technique. If the adviser fails to correctly predict these
changes, the funds can lose money. Derivatives transactions may be less liquid
than other securities and the counterparty to such transactions may not perform
as expected. In addition, futures and options involve market risk in excess of
their value.
ILLIQUID SECURITIES
The funds may invest in illiquid securities. Illiquid securities may include
repurchase agreements with maturities of greater than seven days. Illiquid and
restricted securities may be difficult to sell or may be sold only pursuant to
certain legal restrictions. Difficulty in selling securities may result in a
loss to the funds or entail expenses not normally associated with the sale of a
security.
INVESTMENT GRADE SECURITIES
The funds may invest in all types of long-term or short-term investment grade
debt obligations of U.S. issuers. In addition to the securities mentioned in the
Principal Investment Strategies section, the funds may also invest in bonds,
debentures, notes, municipal bonds, equipment lease certificates, equipment
trust certificates, conditional sales contracts and commercial paper.
MUNICIPAL SECURITIES
The funds may invest in taxable municipal securities. Principal and interest
payments on municipal securities may not be guaranteed by the issuing body and
may be payable only from monies (revenue) derived from a particular source. If
the source does not perform as expected,
14 Phoenix Multi-Series Trust
<PAGE>
principal and income payments may not be made on time or at all. In addition,
the market for municipal securities is often thin and can be temporarily
affected by large purchases and sales, including those by the funds. General
conditions in the financial markets and the size of a particular offering may
also negatively affect municipal securities' returns.
REPURCHASE AGREEMENTS
The funds may invest in repurchase agreements. Default or insolvency of the
other party presents a risk to the funds.
UNRATED FIXED INCOME SECURITIES
The funds may invest in unrated securities. Unrated securities may not be lower
in quality than rated securities but due to their perceived risk they may not
have as broad a market as rated securities. Analysis of unrated securities is
more complex than for rated securities, making it more difficult for the adviser
to accurately predict risk.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
The funds may purchase securities on a when-issued or delayed-delivery basis.
The value of the security on settlement date may be more or less than the price
paid as a result of changes in interest rates and market conditions. If the
value on settlement date is less, the value of your shares may decline.
ZERO COUPON, STEP COUPON AND PIK BONDS
The Multi-Sector Fixed Income Fund may invest in any combination of zero coupon
and step coupon bonds and bonds on which interest is payable in kind. The market
prices of such bonds generally are more volatile than the market prices of
securities that pay interest on a regular basis and may require the fund to make
distributions from other sources because the fund does not receive cash payments
earned on these securities on a current basis. This may result in higher
portfolio turnover rates and the sale of securities at a time that is less
favorable.
The funds may buy other types of securities or employ other portfolio management
techniques. Please refer to the Statement of Additional Information for more
detailed information about these and other investment techniques of the funds.
MANAGEMENT OF THE FUNDS
--------------------------------------------------------------------------------
THE ADVISER
Phoenix Investment Counsel, Inc. ("Phoenix") is the investment adviser to the
funds and is located at 56 Prospect Street, Hartford, CT 06115. Phoenix acts as
the investment adviser for 14 fund companies totaling 37 mutual funds, as
subadviser to two fund companies totaling
Phoenix Multi-Series Trust 15
<PAGE>
three mutual funds and as adviser to institutional clients. As of December 31,
1999, Phoenix had $25.7 billion in assets under management. Phoenix has acted as
an investment adviser for over sixty years.
Subject to the direction of the funds' Board of Trustees, Phoenix is responsible
for managing the funds' investment programs and the day-to-day management of
each fund's portfolio. Phoenix manages each fund's assets to conform with the
investment policies as described in this prospectus. Each fund pays Phoenix a
monthly investment management fee that is accrued daily against the value of the
funds' net assets at the following rates.
<TABLE>
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
$1+ billion
$1st billion through $2 billion $2+ billion
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Multi-Sector Fixed 0.55% 0.50% 0.45%
Income Fund
-----------------------------------------------------------------------------------------------------------------
Multi-Sector Short 0.55% 0.50% 0.45%
Term Bond Fund
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Phoenix has voluntarily agreed to assume operating expenses of the Multi-Sector
Short Term Bond Fund (excluding management fees, distribution and service fees,
interest, taxes, brokerage fees, commissions and extraordinary expenses) until
February 28, 2001, to the extent that such expenses exceed 0.20% of the average
annual net asset values for the fund.
During the last fiscal year, the Multi-Sector Fixed Income Fund paid total
management fees of $1,437,307; the Multi-Sector Short Term Bond Fund paid total
management fees of $283,982. The ratio of management fees to average net assets
for the fiscal year ended October 31, 1999 was 0.55% for the Multi-Sector Fixed
Income Fund and 0.55% for the Multi-Sector Short Term Bond Fund.
PORTFOLIO MANAGEMENT
David L. Albrycht is portfolio manager of the funds, and as such, is primarily
responsible for the day-to-day management of the funds' portfolios. Mr. Albrycht
co-managed the Multi-Sector Fixed Income Fund since March 1994, and assumed full
management of that fund in April 1995. He has been portfolio manager of the
Multi-Sector Short Term Bond Fund since August 1993. Mr. Albrycht is a Managing
Director, Fixed Income, of Phoenix. He held various investment management
positions with Phoenix Home Life Mutual Insurance Company, an affiliate of
Phoenix, from 1989 through 1995.
16 Phoenix Multi-Series Trust
<PAGE>
PRICING OF FUND SHARES
--------------------------------------------------------------------------------
HOW IS THE SHARE PRICE DETERMINED?
Each fund calculates a share price for each class of its shares. The share price
is based on the net assets of the fund and the number of outstanding shares. In
general, each fund calculates net asset value by:
o adding the values of all securities and other assets of the fund,
o subtracting liabilities, and
o dividing the result by the total number of outstanding shares of the
fund.
Asset Value: Each fund's investments are valued at market value. If market
quotations are not available, a fund determines a "fair value" for an investment
according to rules and procedures approved by the Trustees. Foreign and domestic
debt securities (other than short-term investments) are valued on the basis of
broker quotations or valuations provided by a pricing service approved by the
Trustees when such prices are believed to reflect the fair value of such
securities. Foreign and domestic equity securities are valued at the last sale
price or, if there has been no sale that day, at the last bid price, generally.
Short-term investments having a remaining maturity of sixty days or less are
valued at amortized cost, which the Trustees have determined approximates market
value.
Liabilities: Class specific expenses, distribution fees, service fees and other
liabilities are deducted from the assets of each class. Expenses and liabilities
that are not class specific (such as management fees) are allocated to each
class in proportion to each class' net assets, except where an alternative
allocation can be more fairly made.
Net Asset Value: The liability allocated to a class plus any other expenses are
deducted from the proportionate interest of such class in the assets of a fund.
The resulting amount for each class is then divided by the number of shares
outstanding of that class to produce each class' net asset value per share.
The net asset value per share of each class of each fund is determined on days
when the New York Stock Exchange (the "NYSE") is open for trading as of the
close of trading (normally 4:00 PM eastern time). A fund will not calculate its
net asset values per share on days when the NYSE is closed for trading. If the
funds hold securities that are traded on foreign exchanges that trade on
weekends or other holidays when the funds do not price their shares, the net
asset value of the fund's shares may change on days when shareholders will not
be able to purchase or redeem the funds' shares.
AT WHAT PRICE ARE SHARES PURCHASED?
All investments received by the funds' authorized agents prior to the close of
regular trading on the NYSE (normally 4:00 PM eastern time) will be executed
based on that day's net asset
Phoenix Multi-Series Trust 17
<PAGE>
value. Shares credited to your account from the reinvestment of fund
distributions will be in full and fractional shares that are purchased at the
closing net asset value on the next business day on which the funds' net asset
value is calculated following the dividend record date.
SALES CHARGES
--------------------------------------------------------------------------------
WHAT ARE THE CLASSES AND HOW DO THEY DIFFER?
Each fund presently offers three classes of shares that have different sales and
distribution charges (see "Fund Expenses" previously in this prospectus). Each
fund has adopted distribution and service plans allowed under Rule 12b-1 of the
Investment Company Act of 1940 that authorize the funds to pay distribution and
service fees for the sale of their shares and for services provided to
shareholders.
WHAT ARRANGEMENT IS BEST FOR YOU?
The different classes permit you to choose the method of purchasing shares that
is most beneficial to you. In choosing a class, consider the amount of your
investment, the length of time you expect to hold the shares, whether you decide
to receive distributions in cash or to reinvest them in additional shares, and
any other personal circumstances. Depending upon these considerations, the
accumulated distribution and service fees and contingent deferred sales charges
of one class may be more or less than the initial sales charge and accumulated
distribution and service fees of another class of shares bought at the same
time. Because distribution and service fees are paid out of the funds' assets on
an ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
CLASS A SHARES. If you purchase Class A Shares of the Multi-Sector Fixed Income
Fund, you will pay a sales charge at the time of purchase equal to 4.75% of the
offering price (4.99% of the amount invested). If you purchase Class A Shares of
the Multi-Sector Short Term Bond Fund, you will pay a sales charge at the time
of purchase equal to 2.25% of the offering price (2.30% of the amount invested).
The sales charge may be reduced or waived under certain conditions. Class A
Shares are not subject to any charges by the fund when redeemed. Class A Shares
have lower distribution and service fees (0.25%) and pay higher dividends than
any other class.
CLASS B SHARES. If you purchase Class B Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class B Shares of the Multi-Sector
Fixed Income Fund within the first five years after they are purchased, you will
pay a sales charge of up to 5% of your shares' value. If you sell your Class B
Shares of the Multi-Sector Short Term Bond Fund within the first three years
after they are purchased, you will pay a sales charge of up to 2% of your
shares' value. See "Deferred Sales Charge Alternative--Class B and Class C
Shares" below. These
18 Phoenix Multi-Series Trust
<PAGE>
charges decline to 0% over a period of five years for the Multi-Sector Fixed
Income Fund and a period of three years for the Multi-Sector Short Term Bond
Fund. The sales charge may be waived under certain conditions. Class B Shares
have higher distribution and service fees (1.00% for the Multi-Sector Fixed
Income Fund and 0.75% for the Multi-Sector Short Term Bond Fund) and pay lower
dividends than Class A Shares. Class B Shares automatically convert to Class A
Shares eight years after purchase for the Multi-Sector Fixed Income Fund and six
years after purchase for the Multi-Sector Short Term Bond Fund. Purchases of
Class B Shares may be inappropriate for any investor who may qualify for reduced
sales charges of Class A Shares and anyone who is over 85 years of age. The
underwriter may decline purchases in such situations.
CLASS C SHARES. If you purchase Class C Shares, you will not pay a sales charge
at the time of purchase. If you sell your Class C Shares of the Multi-Sector
Fixed Income Fund within the first year after they are purchased, you will pay a
sales charge of 1%. You will not pay any sales charges on Class C Shares of the
Multi-Sector Short Term Bond Fund when you sell them. See "Deferred Sales Charge
Alternative--Class B and Class C Shares" below. Class C Shares of the
Multi-Sector Fixed Income Fund have the same distribution and service fees
(1.00%) and pay comparable dividends as Class B Shares. Class C Shares of the
Multi-Sector Short Term Bond Fund have lower distribution and service fees
(0.50%) and pay higher dividends than Class B Shares. Class C Shares do not
convert to any other class of shares of the fund.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES
The public offering price of Class A Shares is the net asset value plus a sales
charge that varies depending on the size of your purchase (see "Class A
Shares--Reduced Initial Sales Charges: Combination Purchase Privilege" in the
Statement of Additional Information). Shares purchased based on the automatic
reinvestment of income dividends or capital gain distributions are not subject
to any sales charges. The sales charge is divided between your investment dealer
and the funds' underwriter (Phoenix Equity Planning Corporation or "PEPCO").
SALES CHARGE YOU MAY PAY TO PURCHASE CLASS A SHARES
MULTI-SECTOR FIXED INCOME FUND SALES CHARGE AS
A PERCENTAGE OF
------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
--------------------------------------------------------------------------------
Under $50,000 4.75% 4.99%
$50,000 but under $100,000 4.50 4.71
$100,000 but under $250,000 3.50 3.63
$250,000 but under $500,000 2.75 2.83
$500,000 but under $1,000,000 2.00 2.04
$1,000,000 or more None None
Phoenix Multi-Series Trust 19
<PAGE>
SALES CHARGE AS
MULTI-SECTOR SHORT TERM BOND FUND A PERCENTAGE OF
------------------------------
AMOUNT OF NET
TRANSACTION OFFERING AMOUNT
AT OFFERING PRICE PRICE INVESTED
--------------------------------------------------------------------------------
Under $50,000 2.25% 2.30%
$50,000 but under $100,000 1.25 1.27
$100,000 but under $500,000 1.00 1.01
$500,000 but under $1,000,000 0.75 0.76
$1,000,000 or more None None
DEFERRED SALES CHARGE ALTERNATIVE--
CLASS B AND CLASS C SHARES
Class B and Class C Shares of the Multi-Sector Fixed Income Fund and Class B
Shares of the Multi-Sector Short Term Bond Fund are purchased without an initial
sales charge; however, shares sold within a specified time period are subject to
a declining contingent deferred sales charge ("CDSC") at the rates listed below.
Class C Shares of the Multi-Sector Short Term Bond Fund are purchased without an
initial sales charge and are not subject to a deferred sales charge. The sales
charge will be multiplied by the then current market value or the initial cost
of the shares being redeemed, whichever is less. No sales charge will be imposed
on increases in net asset value or on shares purchased through the reinvestment
of income dividends or capital gain distributions. To minimize the sales charge,
shares not subject to any charge will be redeemed first, followed by shares held
the longest time. To calculate the amount of shares owned and time period held,
all Class B Shares purchased in any month are considered purchased on the last
day of the preceding month, and all Class C Shares are considered purchased on
the trade date.
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS B SHARES
MULTI-SECTOR FIXED INCOME FUND
YEAR 1 2 3 4 5 6+
--------------------------------------------------------------------------------
CDSC 5% 4% 3% 2% 2% 0%
MULTI-SECTOR SHORT TERM BOND FUND
YEAR 1 2 3 4+
--------------------------------------------------------------------------------
CDSC 2% 1.5% 1% 0%
DEFERRED SALES CHARGE YOU MAY PAY TO SELL CLASS C SHARES
MULTI-SECTOR FIXED INCOME FUND
YEAR 1 2+
--------------------------------------------------------------------------------
CDSC 1% 0%
20 Phoenix Multi-Series Trust
<PAGE>
You will not pay any deferred sales charge to sell Class C Shares of the
Multi-Sector Short Term Bond Fund.
YOUR ACCOUNT
--------------------------------------------------------------------------------
OPENING AN ACCOUNT
Your financial advisor can assist you with your initial purchase as well as all
phases of your investment program. If you are opening an account by yourself,
please follow the instructions outlined below.
STEP 1.
Your first choice will be the initial amount you intend to invest.
Minimum INITIAL investments:
o $25 for individual retirement accounts, or accounts that use the
systematic exchange privilege, or accounts that use the
Investo-Matic program (see below for more information on the
Investo-Matic program).
o There is no initial dollar requirement for defined contribution
plans, profit-sharing plans, or employee benefit plans. There is
also no minimum for reinvesting dividends and capital gains into
another account.
o $500 for all other accounts.
Minimum ADDITIONAL investments:
o $25 for any account.
o There is no minimum for defined contribution plans, profit-sharing
plans, or employee benefit plans. There is also no minimum for
reinvesting dividends and capital gains into an existing account.
The funds reserve the right to refuse any purchase order for any reason.
STEP 2.
Your second choice will be what class of shares to buy. Each fund offers three
classes of shares for individual investors. Each has different sales and
distribution charges. Because all future investments in your account will be
made in the share class you choose when you open your account, you should make
your decision carefully. Your financial advisor can help you pick the share
class that makes the most sense for your situation.
Phoenix Multi-Series Trust 21
<PAGE>
STEP 3.
Your next choice will be how you want to receive any dividends and capital gain
distributions. Your options are:
o Receive both dividends and capital gain distributions in additional
shares;
o Receive dividends in additional shares and capital gain distributions
in cash;
o Receive dividends in cash and capital gain distributions in
additional shares; or
o Receive both dividends and capital gain distributions in cash.
No interest will be paid on uncashed distribution checks.
HOW TO BUY SHARES
--------------------------------------------------------------------------------
<TABLE>
----------------------------------- ----------------------------------------------------------------------------
<CAPTION>
TO OPEN AN ACCOUNT
----------------------------------- ----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set different
minimum investments or limitations on buying shares.
----------------------------------- ----------------------------------------------------------------------------
Through the mail Complete a New Account Application and send it with a check payable to the
fund. Mail them to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301.
----------------------------------- ----------------------------------------------------------------------------
Through express delivery Complete a New Account Application and send it with a check payable to the
fund. Send them to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184.
----------------------------------- ----------------------------------------------------------------------------
By Federal Funds wire Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
By Investo-Matic Complete the appropriate section on the application and send it with your
initial investment payable to the fund. Mail them to: State Street Bank,
P.O. Box 8301, Boston, MA 02266-8301.
----------------------------------- ----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
----------------------------------- ----------------------------------------------------------------------------
</TABLE>
HOW TO SELL SHARES
--------------------------------------------------------------------------------
You have the right to have the funds buy back shares at the net asset value next
determined after receipt of a redemption order by the funds' Transfer Agent or
an authorized agent. In the case of a Class B or Class C Share redemption, you
will be subject to the applicable deferred
22 Phoenix Multi-Series Trust
<PAGE>
sales charge, if any, for such shares. Subject to certain restrictions, shares
may be redeemed by telephone or in writing. In addition, shares may be sold
through securities dealers, brokers or agents who may charge customary
commissions or fees for their services. The funds do not charge any redemption
fees. Payment for shares redeemed is made within seven days; however, redemption
proceeds will not be disbursed until each check used for purchases of shares has
been cleared for payment by your bank, which may take up to 15 days after
receipt of the check.
<TABLE>
------------------------------------ -----------------------------------------------------------------------------
<CAPTION>
TO SELL SHARES
------------------------------------ -----------------------------------------------------------------------------
<S> <C>
Through a financial advisor Contact your advisor. Some advisors may charge a fee and may set
different minimums on redemptions of accounts.
------------------------------------ -----------------------------------------------------------------------------
Through the mail Send a letter of instruction and any share certificates (if you hold
certificate shares) to: State Street Bank, P.O. Box 8301, Boston, MA
02266-8301. Be sure to include the registered owner's name, fund and
account number, and number of shares or dollar value you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
Through express delivery Send a letter of instruction and any share certificates (if you hold
certificate shares) to: Boston Financial Data Services, Attn: Phoenix Funds,
66 Brooks Drive, Braintree, MA 02184. Be sure to include the registered
owner's name, fund and account number, and number of shares or dollar value
you wish to sell.
------------------------------------ -----------------------------------------------------------------------------
By telephone For sales up to $50,000, requests can be made by calling (800) 243-1574.
------------------------------------ -----------------------------------------------------------------------------
By telephone exchange Call us at (800) 243-1574 (press 1, then 0).
------------------------------------ -----------------------------------------------------------------------------
By check If you selected the checkwriting feature, you may write checks for amounts
of $500 or more. Checks may not be used to close an account.
------------------------------------ -----------------------------------------------------------------------------
</TABLE>
THINGS YOU SHOULD KNOW WHEN SELLING SHARES
--------------------------------------------------------------------------------
You may realize a taxable gain or loss (for federal income tax purposes) if you
redeem shares of the funds. Each fund reserves the right to pay large
redemptions "in-kind" (in securities owned by the fund rather than in cash).
Large redemptions are those over $250,000 or 1% of the fund's net assets.
Additional documentation will be required for redemptions by organizations,
fiduciaries, or retirement plans, or if redemption is requested by anyone but
the shareholder(s) of record. Transfers between broker-dealer "street" accounts
are governed by the accepting broker-dealer. Questions regarding this type of
transfer should be directed to your financial advisor. Redemption requests will
not be honored until all required documents in proper form have been received.
To avoid delay in redemption or transfer, shareholders having questions about
specific requirements should contact the funds' Transfer Agent at (800)
243-1574.
Phoenix Multi-Series Trust 23
<PAGE>
REDEMPTIONS BY MAIL
> If you are selling shares held individually, jointly, or as custodian
under the Uniform Gifts to Minors Act or Uniform Transfers to Minors
Act.
Send a clear letter of instructions if all of these apply:
o The proceeds do not exceed $50,000.
o The proceeds are payable to the registered owner at the address
on record.
Send a clear letter of instructions with a signature guarantee when any
of these apply:
o You are selling more than $50,000 worth of shares.
o The name or address on the account has changed within the last
60 days.
o You want the proceeds to go to a different name or address than
on the account.
> If you are selling shares held in a corporate or fiduciary account,
please contact the fund's Transfer Agent at (800) 243-1574.
If required, the signature guarantee on your request must be made by an eligible
guarantor institution as defined by the funds' Transfer Agent in accordance with
its signature guarantee procedures. Currently, such procedures generally permit
guarantees by banks, broker-dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations.
SELLING SHARES BY TELEPHONE
The Transfer Agent will use reasonable procedures to confirm that telephone
instructions are genuine. Address and bank account information are verified,
redemption instructions are taped, and all redemptions are confirmed in writing.
The individual investor bears the risk from instructions given by an
unauthorized third party that the Transfer Agent reasonably believed to be
genuine.
The Transfer Agent may modify or terminate the telephone redemption privilege at
any time with 60 days notice to shareholders.
During times of drastic economic or market changes, telephone redemptions may be
difficult to make or temporarily suspended.
24 Phoenix Multi-Series Trust
<PAGE>
ACCOUNT POLICIES
--------------------------------------------------------------------------------
ACCOUNT REINSTATEMENT PRIVILEGE
For 180 days after you sell your Class A, Class B, or Class C Shares, you can
purchase Class A Shares of any fund at net asset value, with no sales charge, by
reinvesting all or part of your proceeds, but not more. Send your written
request to State Street Bank, P.O. Box 8301, Boston, MA 02266-8301. You can call
us at (800) 243-1574 for more information.
Please remember, a redemption and reinvestment are considered to be a sale and
purchase for tax-reporting purposes. Class B and Class C shareholders who have
had the contingent deferred sales charge waived because they are in the
Systematic Withdrawal Program are not eligible for this reinstatement privilege.
REDEMPTION OF SMALL ACCOUNTS
Due to the high cost of maintaining small accounts, if your account balance is
less than $200, you may receive a notice requesting you to bring the balance up
to $200 within 60 days. If you do not, the shares in the account will be sold at
net asset value, and a check will be mailed to the address of record.
EXCHANGE PRIVILEGES
You should read the prospectus of the fund into which you want to exchange
before deciding to make an exchange. You can obtain a prospectus from your
financial advisor or by calling us at (800) 243-4361 or accessing our Web site
at www.phoenixinvestments.com.
o You may exchange shares for another fund in the same class of shares;
e.g., Class A for Class A. Exchange privileges may not be available
for all Phoenix Funds, and may be rejected or suspended.
o Exchanges may be made by telephone ((800) 243-1574) or by mail (State
Street Bank, P.O. Box 8301, Boston, MA 02266-8301).
o The amount of the exchange must be equal to or greater than the
minimum initial investment required.
o The exchange of shares is treated as a sale and purchase for federal
income tax purposes.
Phoenix Multi-Series Trust 25
<PAGE>
o Because excessive trading can hurt fund performance and harm other
shareholders, the funds reserve the right to temporarily or
permanently end exchange privileges or reject an order from anyone
who appears to be attempting to time the market, including investors
who request more than one exchange in any 30-day period. The funds'
underwriter has entered into agreements with certain market timing
firms permitting them to exchange by telephone. These privileges are
limited, and the funds' distributor has the right to reject or
suspend them.
RETIREMENT PLANS
Shares of the fund may be used as investments under the following qualified
prototype retirement plans: traditional IRA, rollover IRA, SIMPLE IRA, Roth IRA,
401(k) plans, profit-sharing, money purchase plans, and 403(b) plans. For more
information, call (800) 243-4361.
INVESTOR SERVICES
--------------------------------------------------------------------------------
INVESTO-MATIC is a systematic investment plan that allows you to have a
specified amount automatically deducted from your checking or savings account
and then deposited into your mutual fund account. Just complete the
Investo-Matic Section on the application and include a voided check.
SYSTEMATIC EXCHANGE allows you to automatically move money from one Phoenix Fund
to another on a monthly, quarterly, semiannual or annual basis. Shares of one
Phoenix Fund will be exchanged for shares of the same class of another fund at
the interval you select. To sign up, just complete the Systematic Exchange
Section on the application. Exchange privileges may not be available for all
Phoenix Funds, and may be rejected or suspended.
TELEPHONE EXCHANGE lets you exchange shares of one fund for the same class of
shares in another fund, using our customer service telephone service. See the
Telephone Exchange Section on the application. Exchange privileges may not be
available for all Phoenix Funds, and may be rejected or suspended.
SYSTEMATIC WITHDRAWAL PROGRAM allows you to periodically redeem a portion of
your account on a predetermined monthly, quarterly, semiannual, or annual basis.
Sufficient shares will be redeemed on the 15th of the month at the closing net
asset value so that the payment is made about the 20th of the month. The program
also provides for redemptions on or about the 10th, 15th, or 25th with proceeds
directed through Automated Clearing House (ACH) to your bank. The minimum
withdrawal is $25, and minimum account balance requirements continue.
Shareholders in the program must own fund shares worth at least $5,000.
26 Phoenix Multi-Series Trust
<PAGE>
TAX STATUS OF DISTRIBUTIONS
--------------------------------------------------------------------------------
Distributions from net investment income will be declared daily and paid
monthly. The funds will distribute net realized capital gains, if any, at least
annually. Distributions of short-term capital gains and net investment income
are taxable to shareholders as ordinary income. Long-term capital gains, if any,
distributed to shareholders and which are designated by a fund as capital gain
distributions, are taxable to shareholders as long-term capital gain
distributions regardless of the length of time you have owned your shares.
Unless you elect to receive distributions in cash, dividends and capital gain
distributions are paid in additional shares. All distributions, cash or
additional shares, are subject to federal income tax and may be subject to
state, local and other taxes.
Phoenix Multi-Series Trust 27
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
This table is intended to help you understand the funds' financial performance
for the past five years. Certain information reflects financial results for a
single fund share. The total returns in the table represent the rate that an
investor would have earned or lost on an investment in the funds (assuming
reinvestment of all dividends and distributions). This information has been
audited by PricewaterhouseCoopers LLP, independent accountants, except as
indicated. Their report, together with the fund's financial statements, are
included in the funds' most recent Annual Report, which is available upon
request.
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/00 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.85 $11.20 $13.50 $13.27 $12.56 $11.94
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.50 0.96 1.07 1.03 0.94 0.96
Net realized and unrealized gain
(loss) (0.01) (0.30) (1.88) 0.18 0.72 0.61
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.49 0.66 (0.81) 1.21 1.66 1.57
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.45) (1.00) (1.07) (0.98) (0.95) (0.95)
Dividends from net realized gains -- -- (0.36) -- -- --
In excess of net investment income -- (0.01) -- -- -- --
In excess of net realized gains -- -- (0.06) -- -- --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.45) (1.01) (1.49) (0.98) (0.95) (0.95)
----- ----- ----- ----- ----- -----
Change in net asset value 0.04 (0.35) (2.30) 0.23 0.71 0.62
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.89 $10.85 $11.20 $13.50 $13.27 $12.56
====== ====== ====== ====== ====== ======
Total return(1) 4.40%(5) 5.97% (6.86)% 9.22% 13.75% 13.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $114,472 $125,931 $156,317 $191,486 $169,664 $168,875
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.11%(4) 1.14%(3) 1.08% 1.04%(2) 1.07% 1.10%
Net investment income 8.90%(4) 8.59% 8.17% 7.28% 7.56% 8.10%
Portfolio turnover 61%(5) 133% 157% 295% 255% 201%
</TABLE>
---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would be 1.13%.
(4) Annualized.
(5) Not annualized.
28 Phoenix Multi-Series Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND
<TABLE>
<CAPTION>
CLASS B
-------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/00 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.84 $11.18 $13.48 $13.25 $12.54 $11.93
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.46 0.87 0.96 0.92 0.85 0.86
Net realized and unrealized gain
(loss) (0.01) (0.29) (1.87) 0.18 0.71 0.61
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.45 0.58 (0.91) 1.10 1.56 1.47
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.42) (0.91) (0.97) (0.87) (0.85) (0.86)
Dividends from net realized gains -- -- (0.36) -- -- --
In excess of net investment income -- (0.01) -- -- -- --
In excess of net realized gains -- -- (0.06) -- -- --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.42) (0.92) (1.39) (0.87) (0.85) (0.86)
----- ----- ----- ----- ----- -----
Change in net asset value 0.03 (0.34) (2.30) 0.23 0.71 0.61
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.87 $10.84 $11.18 $13.48 $13.25 $12.54
====== ====== ====== ====== ====== ======
Total return(1) 4.05%(3) 5.15% (7.51)% 8.42% 12.84% 12.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $79,562 $92,725 $124,075 $154,989 $142,869 $144,020
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.86%(4) 1.89%(5) 1.84% 1.79%(2) 1.82% 1.85%
Net investment income 8.15%(4) 7.83% 7.36% 6.52% 6.80% 7.30%
Portfolio turnover 61%(3) 133% 157% 295% 255% 201%
</TABLE>
---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(3) Not annualized.
(4) Annualized.
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would be 1.88%.
Phoenix Multi-Series Trust 29
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/00 YEAR ENDED OCTOBER 31, 10/14/97 TO
(UNAUDITED) 1999 1998 10/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.87 $11.21 $13.48 $14.22
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.48 0.88 0.97 0.04
Net realized and unrealized gain (loss) (0.01) (0.30) (1.85) (0.74)
----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.45 0.58 (0.88) (0.70)
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.42) (0.91) (0.97) (0.04)
Dividends from net realized gains -- -- 0.36 --
In excess of net investment income -- (0.01) -- --
In excess of net realized gains -- -- (0.06) --
----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.42) (0.92) (1.39) (0.04)
----- ----- ----- -----
Change in net asset value 0.03 (0.34) (2.27) (0.74)
----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.90 10.87 $11.21 $13.48
====== ===== ====== ======
Total return(1) 4.03%(3) 5.23% (7.36)% (5.00)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,501 $7,145 $5,937 $284
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.86%(4) 1.89%(5) 1.88% 1.62%(2)(4)
Net investment income 8.14%(4) 7.83% 7.46% 4.75%(4)
Portfolio turnover 61%(3) 133% 157% 295%(3)
</TABLE>
---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(3) Not annualized.
(4) Annualized.
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would be 1.88%.
30 Phoenix Multi-Series Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/00 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.57 $4.66 $5.06 $4.91 $4.74 $4.61
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.17 0.33 -- 0.34 0.34 0.33
Net realized and unrealized gain
(loss) (0.06) (0.08) (0.29) 0.14 0.17 0.13
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.11 0.25 0.05 0.48 0.50 0.46
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.16) (0.34) (0.34) (0.33) (0.33) (0.33)
Dividends from net realized gains -- -- (0.11) -- -- --
In excess of net investment income -- 0.00(4) -- -- -- --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.16) (0.34) (0.45) (0.33) (0.33) (0.33)
----- ----- ----- ----- ----- -----
Change in net asset value (0.05) (0.09) (0.40) (0.15) (0.17) (0.13)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $4.52 $4.57 $4.66 $5.06 $4.91 $4.74
===== ===== ===== ===== ===== =====
Total return(1) 2.48%(6) 5.57% 0.85% 10.08% 10.91% 10.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $24,210 $26,071 $33,212 $28,557 $13,702 $9,303
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2) 1.00%(5) 1.00%(3) 1.00% 1.00% 1.00% 1.00%
Net investment income 7.64%(5) 7.21% 6.90% 6.54% 6.88% 7.07%
Portfolio turnover 47%(6) 122% 126% 246% 232% 344%
</TABLE>
---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.37%, 1.48%,
1.55%, 1.86%, 2.19% and 2.78% for the periods ended April 30, 2000, October 31,
1999, 1998, 1997, 1996 and 1995, respectively.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(4) Amount is less than $0.01.
(5) Annualized.
(6) Not annualized.
Phoenix Multi-Series Trust 31
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/00 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.56 $4.65 $5.06 $4.91 $4.74 $4.61
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.16 0.31 0.31 0.31 0.31 0.30
Net realized and unrealized gain
(loss) (0.06) (0.08) (0.29) 0.15 0.17 0.13
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.10 0.23 0.02 0.46 0.48 0.43
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.15) (0.32) (0.32) (0.31) (0.31) (0.30)
Dividends from net realized gains -- -- (0.11) -- -- --
In excess of net investment income -- 0.00(6) -- -- -- --
----- ----- ----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.15) (0.32) (0.43) (0.31) (0.31) (0.30)
----- ----- ----- ----- ----- -----
Change in net asset value (0.05) (0.09) (0.41) (0.15) (0.17) (0.13)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $4.51 $4.56 $4.65 $5.06 $4.91 $4.74
===== ===== ===== ===== ===== =====
Total return(1) 2.25%(4) 5.04% 0.12% 9.51% 10.36% 9.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $9,637 $10,957 $12,225 $10,318 $5,943 $4,659
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2) 1.50%(3) 1.50%(5) 1.50% 1.50% 1.50% 1.50%
Net investment income 7.13%(3) 6.70% 6.44% 6.05% 6.38% 6.59%
Portfolio turnover 47%(4) 122% 126% 246% 232% 344%
</TABLE>
----------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.87%, 1.98%,
2.05%, 2.36%, 2.69% and 3.22% for the periods ended April 30, 2000, October 31,
1999, 1998, 1997, 1996 and 1995, respectively.
(3) Annualized.
(4) Not annualized.
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(6) Amount is less than $0.01.
32 Phoenix Multi-Series Trust
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
--------------------------------------------------------------------------------
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------
SIX MONTHS FROM
ENDED INCEPTION
4/30/00 YEAR ENDED OCTOBER 31, 10/1/97 TO
(UNAUDITED) 1999 1998 10/31/97
----------- ---- ---- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $4.56 $4.66 $5.06 $5.15
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.17 0.33 0.34 0.03
Net realized and unrealized gain (loss) (0.05) (0.10) (0.30) (0.09)
----- ----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.12 0.23 0.04 (0.06)
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.16) (0.33) (0.33) (0.03)
Dividends from net realized gains -- -- (0.11) --
In excess of net investment income -- 0.00(6) -- --
----- ----- ----- -----
TOTAL DISTRIBUTIONS (0.16) (0.33) (0.44) (0.03)
----- ----- ----- -----
Change in net asset value (0.04) (0.10) (0.40) (0.09)
----- ----- ----- -----
Net asset value, end of period $4.52 $4.56 $4.66 $5.06
===== ===== ===== =====
Total return(1) 2.59%(4) 5.07% 0.59% (1.30)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $7,393 $9,025 $10,665 $575
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2) 1.25%(3) 1.25%(5) 1.25% 1.25%(3)
Net investment income 7.38%(3) 6.95% 6.70% 5.51%(3)
Portfolio turnover 47%(4) 122% 126% 246%(4)
</TABLE>
---------------
(1) Maximum sales charges are not reflected in the total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.62% 1.73%,
1.80% and 2.11%% for the periods ended April 30, 2000, October 31, 1999, 1998
and 1997, respectively.
(3) Annualized.
(4) Not annualized.
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian fees; if
expense offsets were included, the ratio would not significantly differ.
(6) Amount is less than $0.01.
Phoenix Multi-Series Trust 33
<PAGE>
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The funds have filed a Statement of Additional Information about the funds,
dated October 31, 2000, with the Securities and Exchange Commission. The
Statement contains more detailed information about each fund. It is incorporated
into this prospectus by reference and is legally part of the prospectus. You may
obtain a free copy of the Statement:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
o by calling (800) 243-4361.
You may also obtain information about the funds from the Securities and Exchange
Commission:
o through its internet site (http://www.sec.gov),
o by visiting its Public Reference Room in Washington, DC,
o by writing to its Public Reference Section, Washington, DC
20549-0102 (a fee may be charged, or
o by electronic request at [email protected] (a fee may be charged).
Information about the operation of the Public Reference Room may be obtained by
calling 1-202-942-8090.
SHAREHOLDER REPORTS
The funds semiannually mail to shareholders detailed reports containing
information about each fund's investments. The funds' Annual Report contains a
detailed discussion of the market conditions and investment strategies that
significantly affected the funds' performance from November 1 through October
31. You may request a free copy of the funds' Annual and Semiannual Reports:
o by writing to Phoenix Equity Planning Corporation, 100 Bright Meadow
Blvd., P.O. Box 2200, Enfield, Connecticut 06083-2200 or
o by calling (800) 243-4361.
CUSTOMER SERVICE: (800) 243-1574
MARKETING: (800) 243-4361
TELEPHONE ORDERS: (800) 367-5877
TELECOMMUNICATION DEVICE (TTY): (800) 243-1926
<TABLE>
<S> <C>
SEC File Nos. 33-45758 and 811-6566 [RECYCLE LOGO] Printed on recycled paper using soybean ink
</TABLE>
34 Phoenix Multi-Series Trust
<PAGE>
PHOENIX EQUITY PLANNING CORPORATION
PO Box 2200
Enfield CT 06083-2200
[LOGO] PHOENIX
INVESTMENT PARTNERS
For more information about
Phoenix mutual funds, please call
your financial representative or
contact us at 1-800-243-4361 or
www.phoenixinvestments.com.
PXP 694 (10/00)
<PAGE>
PHOENIX MULTI-SERIES TRUST
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
101 Munson Street
Greenfield, Massachusetts 01301
STATEMENT OF ADDITIONAL INFORMATION
October 31, 2000
This Statement of Additional Information is not the Prospectus, but expands
upon and supplements the information contained in the current Prospectus of the
Phoenix Multi-Series Trust (the "Trust") dated October 31, 2000 and should be
read in conjunction with it. The Trust's Prospectus may be obtained by calling
Phoenix Equity Planning Corporation ("Equity Planning") at (800) 243-4361 or by
writing to Phoenix Funds, c/o State Street Bank and Trust Company, P.O. Box
8301, Boston, MA 02266-8301.
TABLE OF CONTENTS
PAGE
The Trust................................................................ 1
Investment Restrictions ................................................. 1
Investment Techniques and Risks.......................................... 2
Performance Information.................................................. 10
Portfolio Transactions and Brokerage..................................... 11
Services of the Adviser ................................................. 12
Net Asset Value ......................................................... 14
How to Buy Shares ....................................................... 14
Alternative Purchase Arrangements ....................................... 14
Investor Account Services ............................................... 17
Tax Sheltered Retirement Plans .......................................... 19
How to Redeem Shares .................................................... 19
Dividends, Distributions and Taxes ...................................... 21
The Distributor ......................................................... 23
Distribution Plans....................................................... 25
Management of the Funds.................................................. 26
Other Information ....................................................... 32
Appendix ................................................................ 34
Customer Service: (800) 243-1574
Marketing: (800) 243-4361
Telephone Orders: (800) 367-5877
Telecommunication Device (TTY): (800) 243-1926
PXP 694B (10/00)
<PAGE>
THE TRUST
Phoenix Multi-Series Trust (the "Trust") is a diversified open-end management
investment company, consisting currently of two series, the Phoenix-Goodwin
Multi-Sector Fixed Income Fund and the Phoenix-Goodwin Multi-Sector Short Term
Bond Fund (each a "Fund," and together the "Funds"), each with three class of
shares. The Trust is organized as a business trust under Delaware law.
Previously, the Phoenix-Goodwin Multi-Sector Fixed Income Fund was organized
as a Maryland corporation, and most recently was named "Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc. Prior to August 1999, it was named Phoenix
Multi-Sector Fixed Income Fund, Inc. Previously, the Phoenix-Goodwin
Multi-Sector Short Term Bond Fund was organized as a Massachusetts business
trust. It was known as Phoenix Multi-Sector Short Term Bond Fund from February
1996 to August 1999. From January 1994 to February 1996, the Fund's name was
"Phoenix Asset Reserve." In October 2000, both Funds were reorganized as
separate series of the Trust.
The Trust's prospectus describes the investment objectives of each of the
Funds and the principal strategies that each of the Funds will employ in seeking
to achieve its investment objective. Each Fund's investment objectives is a
fundamental policy of that Fund and may not be changed without the vote of a
majority of the outstanding voting securities of that Fund. The following
discussion describes the Funds' investment policies and techniques and
supplements the description of the Funds' principal strategies in the
Prospectus.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust with
respect to each of the Funds. Except as otherwise stated, these investment
restrictions are "fundamental" policies. A "fundamental" policy is defined in
the 1940 Act to mean that the restriction cannot be changed without the vote of
a "majority of the outstanding voting securities" of the Fund. A majority of the
outstanding voting securities is defined in the 1940 Act as the lesser of (a)
67% or more of the voting securities present at a meeting if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy, or (b) more than 50% of the outstanding voting securities.
The Fund may not:
(1) With respect to 75% of its total assets, purchase securities of an issuer
(other than the U.S. Government, its agencies, instrumentalities or authorities
or repurchase agreements collateralized by U.S. Government securities and other
investment companies), if: (a) such purchase would, at the time, cause more than
5% of the Fund's total assets taken at market value to be invested in the
securities of such issuer; or (b) such purchase would, at the time, result in
more than 10% of the outstanding voting securities of such issuer being held by
the Fund.
(2) Purchase securities if, after giving effect to the purchase, more than
25% of its total assets would be invested in the securities of one or more
issuers conducting their principal business activities in the same industry
(excluding the U.S. Government, its agencies or instrumentalities).
(3) Borrow money, except (i) in amounts not to exceed one third of the value
of the Fund's total assets (including the amount borrowed) from banks, and (ii)
up to an additional 5% of its total assets from banks or other lenders for
temporary purposes. For purposes of this restriction, (a) investment techniques
such as margin purchases, short sales, forward commitments, and roll
transactions, (b) investments in instruments such as futures contracts, swaps,
and options and (c) short-term credits extended in connection with trade
clearance and settlement, shall not constitute borrowing.
(4) Issue "senior securities" in contravention of the 1940 Act. Activities
permitted by SEC exemptive orders or staff interpretations shall not be deemed
to be prohibited by this restriction.
(5) Underwrite the securities issued by other persons, except to the extent
that, in connection with the disposition of portfolio securities, the Fund may
be deemed to be an underwriter under applicable law.
(6) Purchase or sell real estate, except that the Fund may (i) acquire or
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in mortgage-related
securities and other securities that are secured by real estate or interests
therein, (iv) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(7) Purchase or sell commodities or commodity contracts, except the Fund may
purchase and sell derivatives (including, but not limited to, options, futures
contracts and options on futures contracts) whose value is tied to the value of
a financial index or a financial instrument or other asset (including, but not
limited to, securities indexes, interest rates, securities, currencies and
physical commodities).
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(8) Make loans, except that the Fund may (i) lend portfolio securities, (ii)
enter into repurchase agreements, (iii) purchase all or a portion of an issue of
debt securities, bank loan participation interests, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities and (iv)
participate in an interfund lending program with other registered investment
companies.
If any percentage restriction described above for the Fund is adhered to at
the time of investment, a subsequent increase or decrease in the percentage
resulting from a change in the value of the Fund's assets will not constitute a
violation of the restriction.
INVESTMENT TECHNIQUES AND RISKS
The Funds may utilize the following practices or techniques in pursuing their
investment objectives.
BORROWING AND REVERSE REPURCHASE AGREEMENTS
The Funds may borrow money and invest the loan proceeds in other assets. This
borrowing may be unsecured. The Investment Company Act of 1940, as amended (the
"1940 Act") requires the Funds to maintain continuous asset coverage (that is,
total assets including borrowings, less liabilities exclusive of borrowings) of
300% of the amount borrowed. If the 300% asset coverage should decline as a
result of market fluctuations or other reasons, the Funds may be required to
sell some of its portfolio holdings within three days to reduce the debt and
restore the 300% asset coverage, even though it may be disadvantageous from an
investment standpoint to sell securities at that time. Borrowing may exaggerate
the effect on net asset value of any increase or decrease in the market value of
the portfolio. Money borrowed will be subject to interest costs which may or may
not be recovered by appreciation of the securities purchased. The Fund also may
be required to maintain minimum average balances in connection with such
borrowing or to pay a commitment or other fee to maintain a line of credit;
either of these requirements would increase the cost of borrowing over the
stated interest rate.
Among the forms of investments in which the Funds may engage, and which may
be deemed to constitute borrowings, is the entry into reverse repurchase
agreements. A reverse repurchase agreement involves the sale of a
portfolio-eligible security by a Fund, coupled with its agreement to repurchase
the instrument at a specified time and price. Each Fund will maintain a pledged
account with its Custodian consisting of any asset, including equity securities
and non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily, equal to its obligations under reverse repurchase
agreements with broker-dealers and banks. However, reverse repurchase agreements
involve the risk that the market value of securities retained by the Fund may
decline below the repurchase price of the securities sold by the Fund which it
is obligated to repurchase.
Each Fund also may enter into "mortgage dollar rolls," which are similar to
reverse repurchase agreements in certain respects. In a "dollar roll"
transaction, the Fund sells a mortgage-related security (such as a GNMA
security) to a dealer and simultaneously agrees to purchase a similar security
(but not the same security) in the future at a pre-determined price. A "dollar
roll" can be viewed, like a reverse repurchase agreement, as a collateralized
borrowing in which the Fund pledges a mortgage-related security to a dealer to
obtain cash. Unlike in the case of reverse repurchase agreements, the dealer
with which the Fund enters into a dollar roll transaction is not obligated to
return the same securities as those originally sold by the Fund, but only
securities which are "substantially identical." To be considered "substantially
identical," the securities returned to the Fund generally must: (1) be
collateralized by the same types of underlying mortgages; (2) be issued by the
same agency and be part of the same program; (3) have a similar original stated
maturity; (4) have identical net coupon rates; (5) have similar market yields
(and therefore price); and (6) satisfy "good delivery" requirements, meaning
that the aggregate principal amount of the securities received back must be
within 2.5% of the initial amount delivered.
The Fund's obligations under a dollar roll agreement must be covered by cash
or high quality debt securities equal in value to the securities subject to
repurchase by the Fund, maintained in a pledged account. Dollar roll
transactions are treated as borrowings by the Fund, and therefore the Fund's
entry into dollar roll transactions is subject to the Fund's overall limitations
on borrowing. Furthermore, because dollar roll transactions may be for terms
ranging between one and six months, dollar roll transactions may be deemed
"illiquid" and subject to the Fund's overall limitations on investment in
illiquid securities.
FOREIGN CURRENCY EXCHANGE TRANSACTIONS
Each Fund may engage in foreign currency exchange transactions as a hedge
against changes in exchange rates. Hedging is a means of transferring risk that
an investor does not desire to assume in an uncertain interest or exchange rate
environment. The Adviser believes it is possible to reduce the effect of
exchange rate fluctuations on the value of the Fund's portfolio, or sectors
thereof, through the use of such strategy. The costs of and possible losses
incurred from hedging activities may reduce the Fund's current income and
involve a loss of principal. Any incremental return earned by the Fund resulting
from these transactions would be expected to offset anticipated losses or a
portion thereof.
The Fund may conduct its currency exchange transactions on a "spot" (i.e.,
cash) basis at the rate then prevailing in the currency exchange market, or on a
forward basis, by entering into futures (as discussed below) or forward
contracts to purchase
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or sell currency. The Fund's dealings in foreign currency exchange contracts is
limited to hedging involving either specific transactions or portfolio
positions.
Transaction hedging is the purchase or sale of foreign currency with respect
to specific receivables or payables of the Fund generally arising in connection
with the purchase or sale of its portfolio securities and accruals of interest
receivable and the Fund's expenses. The Fund may engage in transaction hedging
to protect against a change in the foreign currency exchange rate between the
date on which the Fund contracts to purchase or sell the security and the
settlement date, or to "lock in" the U.S. dollar equivalent of a divided or
interest payment in a foreign currency. In such circumstances, the Fund will
purchase or sell a foreign currency on a spot basis at the prevailing spot rate.
Position hedging is the purchase or sale of currency with respect to
portfolio security positions denominated or quoted in that currency. The Fund
may engage in position hedging to protect against a decline in the value of the
currencies in which its portfolio securities are denominated or quoted. To
engage in position hedging, the Fund will enter into foreign currency futures
and related options (as described below), forward foreign currency contracts,
and options on foreign currencies. The Fund also will purchase or sell foreign
currency on a spot basis.
The Fund will not position hedge with respect to a particular currency for an
amount greater than the aggregate market value, determined at the time of sale
of foreign currency, of the securities held (or to be held) in its portfolio
denominated or quoted in or currently convertible into that currency. If the
Fund enters into a position hedging transaction, it will place in a pledged
account with its custodian any asset, including equity securities and
non-investment grade debt so long as the asset is liquid, unencumbered and
marked to market daily, equal to the value of the total assets the Fund
committed to the consummation of the forward contract. If the value of the
securities placed in the pledged account declines, additional cash or securities
will be placed in the account so that the value of the account would equal the
amount of assets the Fund committed to the currency contract.
A forward foreign currency contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract as agreed upon by the parties, at a price set at
the date of the contract. The holder of a forward contract containing a
cancellation provision has the unilateral right to cancel the contract at
maturity by paying a specified fee. Forward contracts are entered into in the
interbank market conducted directly between currency dealers, which usually are
large commercial banks and brokerage houses, and their customers. Forward
currency contracts are conducted on a principal basis and therefore generally
involve no margin, commissions or other fees. Instead, bid and ask prices are
quoted by dealers who profit from the difference in the spread between those
prices.
Although the use of forward currency contracts does not eliminate
fluctuations in the underlying price of securities, it will establish a rate of
exchange that can be achieved in the future. Forward contracts limit the risk of
loss due to a decline in the value of the hedged currency but also limit any
potential gain that might result in the event the value of the currency
increases.
Unlike a foreign currency futures contract, which has a predetermined
maturity date in any month, a forward currency contract matures any fixed number
of days from the date of the contract agreed upon by the parties. At the
maturity of a forward contract, the Fund may either take or make delivery of the
currency specified in the contract, or, at or prior to maturity, it may enter
into a closing transaction involving the purchase or sale of an offsetting
contract. Because these contracts will be entered into on a principal basis
rather than on an exchange, closing transactions for forward contracts will be
effected with the currency dealer who was a party to the original forward
contract.
FOREIGN CURRENCY OPTIONS
Each Fund may buy or sell put and call options on foreign currencies either
on exchanges or in the over-the-counter market. A put option on a foreign
currency gives the purchaser of the option the right to sell a foreign currency
at the exercise price until the option expires. Currency options traded on U.S.
or other exchanges may be subject to position limits which may limit the ability
of a Fund to reduce foreign currency risk using such options. Over-the-counter
options differ from traded options in that they are two-party contracts with
price and other terms negotiated between buyer and seller, and generally do not
have as much market liquidity as exchange-traded options.
FOREIGN EXCHANGE-TRADED OPTIONS, FUTURES AND FORWARD CURRENCY EXCHANGE
CONTRACTS--ADDITIONAL RISKS
Options on securities, futures contracts, options on futures contracts,
currencies and options on currencies may be traded on foreign exchanges. Such
transactions may not be regulated as effectively as similar transactions in the
United States; may not involve a clearing mechanism and related guarantees; and
are subject to the risk of governmental actions affecting trading in, or the
prices of, foreign securities. The value of such positions also could be
adversely affected by (i) other complex foreign political, legal and economic
factors, (ii) lesser availability than in the United States of data on which to
make trading decisions, (iii) delays in the Fund's ability to act upon economic
events occurring in foreign markets during non-business hours in the United
States, (iv) the imposition of different exercise and settlement terms and
procedures and margin requirements than in the United States, and (v) lesser
trading volume.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
Each Fund may use interest rate, foreign currency or index futures contracts.
An interest rate, foreign currency or index futures contract provides for the
future sale by one party and purchase by another party of a specified quantity
of a financial instrument, foreign currency or the cash value of an index at a
specified price and time. A futures contract on an index is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day of the contract and the price at which the index contract was
originally written. Although the value of an index might be a function of the
value of certain specified securities, no physical delivery of these securities
is made. A public market exists in futures contracts covering several indexes as
well as a number of financial instruments and foreign currencies, including: the
S&P 500; the S&P 100; the NYSE composite; U.S. Treasury bonds; U.S. Treasury
notes; GNMA Certificates; three month U.S. Treasury bills; 90-day commercial
paper; bank certificates of deposit; Eurodollar certificates of deposit; the
Australian dollar; the Canadian dollar; the British pound; the German mark; the
Japanese yen; the French franc; the Swiss franc; the Mexican peso; and certain
multinational currencies, such as the European Currency Unit ("ECU"). It is
expected that other futures contracts will be developed and traded in the
future. Interest rate futures contracts currently are traded in the United
States primarily on the floors of the Chicago Board of Trade ("CBT") and the
International Monetary Market of the Chicago Mercantile Exchange ("CME").
Interest rate futures also are traded on foreign exchanges such as the London
International Financial Futures Exchange ("LIFFE") and the Singapore
International Monetary Exchange ("SIMEX").
The Fund may purchase and write call and put options on futures. Futures
options possess many of the same characteristics as options on securities and
indexes (discussed above). A futures option gives the holder the right, in
return for the premium paid, to assume a long position (call) or short position
(put) in a futures contract at a specified exercise price at any time during the
period of option. Upon exercise of a call option, the holder acquires a long
position in the futures contract and the writer is assigned the opposite short
position. In the case of a put option, the opposite is true.
As long as required by regulatory authorities, the Fund will limit its use of
futures contracts and futures options to hedging transactions. Hedging is a
means of transferring risk that an investor does not desire to assume in an
uncertain interest or exchange rate environment. The Adviser believes it is
possible to reduce the effect of interest or exchange rate fluctuations on the
value of the Fund's portfolio, or sectors thereof, through the use of such
strategies. For example, the Fund might use futures contracts to hedge against
anticipated changes in interest rates that might adversely affect either the
value of the Fund's securities or the price of the securities which the Fund
intends to purchase. The Fund's hedging activities may include sales of futures
contracts as an offset against the effect of expected increases in interest
rates, and purchases of futures contracts as an offset against the effect of
expected declines in interest rates. Although other techniques could be used to
reduce the Fund's exposure to interest rate fluctuations, the Fund may be able
to hedge its exposure more effectively and perhaps at a lower cost by using
futures contracts and futures options. The costs of and possible losses incurred
from futures contracts and options thereon may reduce the Fund's current income
and involve a loss of principal. Any incremental return earned by the Fund
resulting from these transactions would be expected to offset anticipated losses
or a portion thereof.
The Fund will only enter into futures contracts and futures options which are
standardized and traded on a U.S. or foreign exchange, board of trade, or
similar entity, or quoted on an automated quotation system.
When a purchase or sale of a futures contract is made by the Fund, the Fund
is required to deposit with its custodian (or broker, if legally permitted) a
specified amount of cash or U.S. Government securities ("initial margin"). The
margin required for a futures contract is set by the exchange on which the
contract is traded and may be modified during the term of the contract. The
initial margin is in the nature of a performance bond or good faith deposit on
the futures contract which is returned to the Fund upon termination of the
contract, assuming all contractual obligations have been satisfied. The Fund
expects to earn interest income on its initial margin deposits. A futures
contract held by the Fund is valued daily at the official settlement price of
the exchange on which it is traded. Each day the Fund pays or receives cash,
called "variation margin," equal to the daily change in value of the futures
contract. This process is known as "marking to market." Variation margin does
not represent a borrowing or loan by the Fund but is instead a settlement
between the Fund and the broker of the amount one would owe the other if the
futures contract expired. In computing daily net asset value, the Fund will mark
to market its open futures positions.
The Fund is also required to deposit and maintain margin with respect to put
and call options on futures contracts written by it. Such margin deposits will
vary depending on the nature of the underlying futures contract (and the related
initial margin requirements), the current market value of the option, and other
futures positions held by the Fund.
Although some futures contracts call for making or taking delivery of the
underlying securities, generally these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts (same
exchange, underlying security or index, and delivery month). If an offsetting
purchase price is less than the original sale price, the Fund realizes a capital
gain, or if it is more, the Fund realizes a capital loss. Conversely, if an
offsetting sales price is more than the original purchase price, the
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Fund realizes a capital gain, or if it is less, the Fund realizes a capital
loss. The transaction costs must also be included in these calculations.
LIMITATIONS ON USE OF FUTURES AND FUTURES OPTIONS. When entering into a
futures contract, the Fund will maintain with its custodian (and mark-to-market
on a daily basis) cash, U.S. Government securities, or other highly liquid debt
securities that, when added to the amount deposited with a futures commission
merchant as margin, are equal to the market value of the futures contract.
Alternatively, the Fund may "cover" its position by purchasing a put option on
the same futures contract with a strike price as high or higher than the price
of the contract held by the Fund.
When selling a futures contract, the Fund will maintain with its custodian
(and mark-to-market on a daily basis) liquid assets that, when added to the
amount deposited with a futures commission merchant as margin, are equal to the
market value of the instruments underlying the contract. Alternatively, the Fund
may "cover" its position by owning the instruments underlying the contract (or,
in the case of an index futures contract, a portfolio with a volatility
substantially similar to that of the index on which the futures contract is
based), or by holding a call option permitting the Fund to purchase the same
futures contract at a price no higher than the price of the contract written by
the Fund (or at a higher price if the difference is maintained in liquid assets
with the Fund's custodian).
When selling a call option on a futures contract, the Fund will maintain with
its custodian any asset, including equity securities and non-investment grade
debt so long as the asset is liquid, unencumbered and marked to market daily
that, when added to the amounts deposited with a futures commission merchant as
margin, equal the total market value of the futures contract underlying the call
option. Alternatively, the Fund may cover its position by entering into a long
position in the same futures contract at a price no higher than the strike price
of the call option, by owning the instruments underlying the futures contract,
or by holding a separate call option permitting the Fund to purchase the same
futures contract at a price not higher than the strike price of the call option
sold by the Fund.
When selling a put option on a futures contract, the Fund will maintain with
its custodian any asset, including equity securities and non-investment grade
debt so long as the asset is liquid, unencumbered and marked to market daily
that equal the purchase price of the futures contract, less any margin on
deposit. Alternatively, the Fund may cover the position either by entering into
a short position in the same futures contract, or by owning a separate put
option permitting it to sell the same futures contract so long as the strike
price of the put option is the same or higher than the strike price of the put
option sold by the Fund.
In order to comply with applicable regulations of the Commodity Futures
Trading Commission ("CFTC") pursuant to which the Fund avoids being deemed a
"commodity pool," the Fund is limited in its futures trading activities to
positions which constitute "bona fide hedging" positions within the meaning and
intent of applicable CFTC rules, or to positions which qualify under an
alternative test. Under this alternative test, the "underlying commodity value"
of each long position in a commodity contract in which the Fund invests may not
at any time exceed the sum of: (1) the value of short-term U.S. debt obligations
or other U.S. dollar-denominated high quality short-term money market
instruments and cash set aside in an identifiable manner, plus any Funds
deposited as margin on the contract; (2) unrealized appreciation on the contract
held by the broker; and (3) cash proceeds from existing investments due in not
more than 30 days. "Underlying commodity value" means the size of the contract
multiplied by the daily settlement price of the contract.
The requirements for qualification as a regulated investment company also may
limit the extent to which the Fund may enter into futures, futures options or
forward contracts.
RISKS ASSOCIATED WITH FUTURES AND FUTURES OPTIONS. Using futures contracts
and related options involves certain risks, including (1) the risk of imperfect
correlation between fluctuations in the value of a futures contract and the
portfolio security that is being hedged; (2) the risk that in its use of futures
and related options the Fund may not outperform a fund that does not make use of
those instruments; (3) the fact that no assurance can be given that active
markets will be available to offset positions; (4) the fact that futures
contracts and options on futures may be closed out, by entering into an
offsetting position, only on the exchange on which the contracts were entered
into or through a linked exchange; (5) the risk that the value of the assets
underlying the futures contract on the date of delivery will vary significantly
from the amount which the Fund has agreed to pay or the price at which the Fund
has agreed to sell under such contract, thereby subjecting the Fund to losses;
and (6) the fact that successful use of futures contracts and related options
for hedging purposes will depend upon the ability of the Adviser to predict
correctly movements in the direction of the overall interest rate and foreign
currency markets.
The costs of and possible losses incurred from futures contracts and options
thereon may reduce the Fund's current income and involve a loss of principal.
Any incremental return earned by the Fund resulting from these transactions
would be expected to offset anticipated losses or a portion thereof.
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ILLIQUID SECURITIES
The Funds may invest in illiquid securities. Illiquid securities are those
that the Fund would not likely be able to sell in any given seven day period.
Securities such as private placements and other restricted securities, loan
participations, securities with legal or contractual restrictions on resale,
repurchase agreements that mature in more than seven days and OTC options tend
to be illiquid. The Board of Directors of the Fund has adopted procedures for
evaluating the liquidity of securities. The procedures take into account the
frequency of trades and quotes for the security, the number of dealers willing
to purchase and sell the security and the number of other, qualified purchasers,
dealer undertakings to make a market in the security, and the nature of the
marketplace for effecting trades (i.e. the time needed to dispose of the
security, the method of soliciting offers, and the mechanics of transfer).
Liquidity issues arise most frequently in two cases. "Rule 144A" securities
and OTC options.
"Rule 144A" securities are restricted securities (those not originally issued
in a public offering) that generally may not be traded. Pursuant to Rule 144A
under the Securities Act of 1933, however, these securities can be readily
bought and sold by and among certain types of institutional investors, including
mutual funds. The liquidity procedures adopted by the Fund's Board of Directors
recognize the significance of Rule 144A and the institutional marketplace it has
produced for restricted securities.
The staff of the Securities and Exchange Commission (the "Commission") has
taken the position that purchased OTC options and the assets that "cover" for
written OTC options are illiquid securities unless certain procedures are
followed. The Fund intends to follow those procedures. Thus, the Fund will sell
OTC options only to qualified dealers who agree that the Fund may repurchase any
OTC options it writes for a maximum price to be calculated by a predetermined
formula. In such cases, the OTC option would be considered illiquid only to the
extent that the maximum repurchase price under the formula exceeds the intrinsic
value of the option. The Fund may also follow certain procedures from time to
time which have been adopted by the Fund's Board of Directors for the purpose of
making determinations regarding the liquidity of securities issued pursuant to
Rule 144A under the Securities Act of 1933.
In determining whether a Rule 144A security is liquid, the Board of Directors
may take into account the frequency of trades and quotes for the security, the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers, dealer undertakings to make a market in the
security, and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
transfer).
INTEREST RATE TRANSACTIONS
The Fund may enter into various hedging transactions, such as interest rate
swaps, and the purchase and sale of interest rate collars, caps and floors.
Hedging is a means of transferring risk that an investor does not desire to
assume in an uncertain interest or exchange rate environment. The Adviser
believes it is possible to reduce the effect of interest rate fluctuations on
the value of the Fund's portfolio, or sectors thereof, through the use of such
strategies.
Interest rate swaps involve the exchange with another party of commitments to
pay or receive interest, e.g., an exchange of floating rate payments for fixed
rate payments. The purchase of an interest rate cap entitles the purchaser, to
the extent that a specified index exceeds a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling such interest rate cap. The purchase of an interest rate floor entitles
the purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a notional principal amount
from the party selling such interest rate floor. An interest rate collar
combines the elements of purchasing a cap and selling a floor. The collar
protects against an interest rate rise above the maximum amount but gives up the
benefit of an interest rate decline below the minimum amount. The net amount of
the excess, if any, of the Fund's obligations over its entitlements with respect
to each interest rate swap will be accrued on a daily basis and any asset,
including equity securities and non-investment grade debt so long as the asset
is liquid, unencumbered and marked to market daily having an aggregate net asset
value at least equal to the accrued excess will be maintained in a pledged
account by the Fund's custodian. If there is a default by the other party to
such a transaction, the Fund will have contractual remedies pursuant to the
agreements related to the transaction.
LENDING PORTFOLIO SECURITIES
The Fund may make secured loans of its portfolio securities to broker-dealers
and other financial institutions. The 1940 Act requires that (a) the borrower
pledge and maintain collateral consisting of cash, a letter of credit issued by
a domestic U.S. bank, or securities issued or guaranteed by the U.S. government
having a value at all times not less than 100% of the value of the securities
loaned; (b) the borrower add to such collateral whenever the price of the
securities borrowed rises (i.e., the value of the loan is "marked to the market"
on a daily basis); (c) the loan be made subject to termination by the Fund at
any time; and (d) the Fund receives reasonable interest on the loan (which may
include the investing of any cash collateral in high quality interest-bearing
liquid investments), any distributions on the loaned securities, and any
increase in their market value. In addition, voting rights may pass with the
loaned securities, but if a material event were to occur, the loan must be
called and the securities voted by the Fund.
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LOAN PARTICIPATIONS
A loan participation agreement involves the purchase of a share of a loan
made by a bank to a company in return for a corresponding share of the
borrower's principal and interest payments. Loan participations of the type in
which the Fund may invest include interests in both secured and unsecured
corporate loans. When the Fund purchases loan assignments from lenders, it will
acquire direct rights against the borrower, but these rights and the Fund's
obligations may differ from, and be more limited than, those held by the
assignment lender. The principal credit risk associated with acquiring loan
participation and assignment interests is the credit risk associated with the
underlying corporate borrower. There is also a risk that there may not be a
readily available market for participation loan interests and, in some cases,
this could result in the Fund disposing of such securities at a substantial
discount from face value or holding such securities until maturity.
In the event that a corporate borrower failed to pay its scheduled interest
or principal payments on participations held by the Fund, the market value of
the affected participation would decline, resulting in a loss of value of such
investment to the Fund. Accordingly, such participations are speculative and may
result in the income level and net assets of the Fund being reduced. Moreover,
loan participation agreements generally limit the right of a participant to
resell its interest in the loan to a third party and, as a result, loan
participations will be deemed by the Fund to be illiquid investments. The Fund
will invest only in participations with respect to borrowers whose
creditworthiness is, or is determined by the Adviser to be, substantially
equivalent to that of issuers whose senior unsubordinated debt securities are
rated B or higher by Moody's Investor's Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P").
MORTGAGE-RELATED SECURITIES
GNMA CERTIFICATES. The Government National Mortgage Association ("GNMA") is a
wholly owned corporate instrumentality of the United States within the
Department of Housing and Urban Development. The National Housing Act of 1934,
as amended (the "Housing Act"), authorizes GNMA to guarantee the timely payment
of the principal of and interest on certificates that are based on and backed by
a pool of mortgage loans insured by the Federal Housing Administration under the
Housing Act, or Title V of the Housing Act of 1949 ("FHA Loans"), or guaranteed
by the Department of Veterans Affairs under the Servicemen's Readjustment Act of
1944, as amended ("VA Loans"), or by pools of other eligible mortgage loans. The
Housing Act provides that the full faith and credit of the United States
government is pledged to the payment of all amounts that may be required to be
paid under any guaranty. In order to meet its obligations under such guaranty,
GNMA is authorized to borrow from the U.S. Treasury with no limitations as to
amount.
The GNMA Certificates in which the Funds will invest will represent a pro
rata interest in one or more pools of the following types of mortgage loans: (i)
fixed rate level payment mortgage loans; (ii) fixed rate graduated payment
mortgage loans; (iii) fixed rate growing equity mortgage loans; (iv) fixed rate
mortgage loans secured by manufactured (mobile) homes; (v) mortgage loans on
multifamily residential properties under construction; (vi) mortgage loans on
completed multifamily projects; (vii) fixed rate mortgage loans as to which
escrowed funds are used to reduce the borrower's monthly payments during the
early years of the mortgage loans ("buydown" mortgage loans); (viii) mortgage
loans that provide for adjustments in payments based on periodic changes in
interest rates or in other payment terms of the mortgage loans; and (ix)
mortgage-backed serial notes. All of these mortgage loans will be FHA Loans or
VA Loans and, except as otherwise specified above, will be fully-amortizing
loans secured by first liens on one- to four-family housing units.
FNMA CERTIFICATES. The Federal National Mortgage Association ("FNMA") is a
federally chartered and privately owned corporation organized and existing under
the Federal National Mortgage Association Charter Act of 1938. The obligations
of FNMA are not backed by the full faith and credit of the U.S. government.
Each FNMA Certificate will represent a pro rata interest in one or more pools
of FHA Loans, VA Loans or conventional mortgage loans (i.e., mortgage loans that
are not insured or guaranteed by any governmental agency) of the following
types: (i) fixed rate level payment mortgage loans; (ii) fixed rate growing
equity mortgage loans; (iii) fixed rate graduated payment mortgage loans; (iv)
variable rate California mortgage loans; (v) other adjustable rate mortgage
loans; and (vi) fixed rate and adjustable mortgage loans secured by multifamily
projects.
FHLMC CERTIFICATES. The Federal Home Loan Mortgage Corporation ("FHLMC") is a
corporate instrumentality of the United States created pursuant to the Emergency
Home Finance Act of 1970, as amended (the "FHLMC Act"). The obligations of FHLMC
are obligations solely of FHLMC and are not backed by the full faith and credit
of the U.S. Government.
FHLMC Certificates represent a pro rata interest in a group of mortgage loans
(a "FHLMC Certificate group") purchased by FHLMC. The mortgage loans underlying
the FHLMC Certificates will consist of fixed rate or adjustable rate mortgage
loans with original terms to maturity of between 10 and 30 years, substantially
all of which are secured by first liens on one-to-four family residential
properties or multifamily projects. Each mortgage loan must meet the applicable
standards set forth in the FHLMC Act. A FHLMC Certificate group may include
whole loans, participation interests in whole loans and undivided interests in
whole loans and participations comprising another FHLMC Certificate group.
7
<PAGE>
ADJUSTABLE RATE MORTGAGES--INTEREST RATE INDICES. The One Year Treasury Index
is the figure derived from the average weekly quoted yield on U.S. Treasury
Securities adjusted to a constant maturity of one year. The Cost of Funds Index
reflects the monthly weighted average cost of funds of savings and loan
associations and savings banks whose home offices are located in Arizona,
California and Nevada (the "FHLB Eleventh District") that are member
institutions of the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco"), as computed from statistics tabulated and published by the FHLB of
San Francisco. The FHLB of San Francisco normally announces the Cost of Funds
Index on the last working day of the month following the month in which the cost
of funds was incurred.
A number of factors affect the performance of the Cost of Funds Index and may
cause the Cost of Funds Index to move in a manner different from indices based
upon specific interest rates, such as the One Year Treasury Index. Because of
the various origination dates and maturities of the liabilities of member
institutions of the FHLB Eleventh District upon which the Cost of Funds Index is
based, among other things, at any time the Cost of Funds Index may not reflect
the average prevailing market interest rates on new liabilities of similar
maturities. There can be no assurance that the Cost of Funds Index will
necessarily move in the same direction or at the same rate as prevailing
interest rates since as longer term deposits or borrowings mature and are
renewed at market interest rates, the Cost of Funds Index will rise or fall
depending upon the differential between the prior and the new rates on such
deposits and borrowings. In addition, dislocations in the thrift industry in
recent years have caused and may continue to cause the cost of funds of thrift
institutions to change for reasons unrelated to changes in general interest rate
levels. Furthermore, any movement in the Cost of Funds Index as compared to
other indices based upon specific interest rates may be affected by changes
instituted by the FHLB of San Francisco in the method used to calculate the Cost
of Funds Index. To the extent that the Cost of Funds Index may reflect interest
changes more slowly than other indices, mortgage loans which adjust in
accordance with the Cost of Funds Index may produce a higher yield later than
would be produced by such other indices, and in a period of declining interest
rates, the Cost of Funds Index may remain higher than other market interest
rates which may result in a higher level of principal prepayments on mortgage
loans which adjust in accordance with the Cost of Funds Index than mortgage
loans which adjust in accordance with other indices.
LIBOR, the London Interbank Offered Rate, is the interest rate that the most
creditworthy international banks dealing in U.S. dollar-denominated deposits and
loans charge each other for large dollar-denominated loans. LIBOR is also
usually the base rate for large dollar-denominated loans in the international
market. LIBOR is generally quoted for loans having rate adjustments at one,
three, six or twelve month intervals.
OPTIONS ON SECURITIES AND INDEXES
The Fund may purchase and sell both put and call options on debt or other
securities or indexes in standardized contracts traded on foreign or national
securities exchanges, boards of trade, or similar entities, or quoted on NASDAQ
or on a regulated foreign over-the-counter market, and agreements, sometimes
called cash puts, which may accompany the purchase of a new issue of bonds from
a dealer.
An option on a security (or index) is a contract that gives the holder of the
option, in return for a premium, the right to buy from (in the case of a call)
or sell to (in the case of a put) the writer of the option, the security
underlying the option (or the cash value of the index) at a specified exercise
price at any time during the term of the option. The writer of an option on a
security has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price or to pay the exercise
price upon delivery of the underlying security. Upon exercise, the writer of an
option on an index is obligated to pay the difference between the cash value of
the index and the exercise price multiplied by the specified multiplier for the
index option. (An index is designed to reflect specified facets of a particular
financial or securities market, a specified group of financial instruments or
securities, or certain economic indicators.)
The Fund will write call options and put options only if they are "covered."
In the case of a call option on a security, the option is "covered" if the Fund
owns the security underlying the call or has an absolute and immediate right to
acquire that security without additional cash consideration (or, if additional
cash consideration is required, cash or cash equivalents in such amount are
placed in a segregated account by its custodian) upon conversion or exchange of
other securities held by the Fund. For a call option on an index, the option is
covered if the Fund maintains with its custodian cash or cash equivalents equal
to the contract value. A call option is also covered if the Fund holds a call on
the same security or index as the call written where the exercise price of the
call held is (i) equal to or less than the exercise price of the call written,
or (ii) greater than the exercise price of the call written, provided the
difference is maintained by the Fund in cash or cash equivalents in a segregated
account with its custodian. A put option on a security or an index is "covered"
if the Fund maintains cash or cash equivalents equal to the exercise price in a
segregated account with its custodian. A put option is also covered if the Fund
holds a put on the same security or index as the put written where the exercise
price of the put held is (i) equal to or greater than the exercise price of the
put written, or (ii) less than the exercise price of the put written, provided
the difference is maintained by the Fund in cash or cash equivalents in a
segregated account with its custodian.
8
<PAGE>
The Fund may write and purchase options, including over the counter options,
for hedging purposes. Hedging is a means of transferring risk that an investor
does not desire to assume in an uncertain interest or exchange rate environment.
The Adviser believes it is possible to reduce the effect of interest or exchange
rate fluctuations on the value of the Fund's portfolio, or sectors thereof,
through the use of such strategies.
If an option written by the Fund expires, the Fund realizes a capital gain
equal to the premium received at the time the option was written. If an option
purchased by the Fund expires unexercised, the Fund realizes a capital loss
equal to the premium paid.
Prior to the earlier of exercise or expiration, an option may be closed out
by an offsetting purchase or sale of an option of the same series (type,
exchange, underlying security or index, exercise price, and expiration). There
can be no assurance, however, that a closing purchase or sale transaction can be
effected when the Fund desires.
The Fund will realize a capital gain from a closing purchase transaction if
the cost of the closing option is less than the premium received from writing
the option, or, if it is more, the Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain or, if it is less,
the Fund will realize a capital loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates, the
current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or
index, and the time remaining until the expiration date.
The premium paid for a put or call option purchased by the Fund is an asset
of the Fund. The premium received for an option written by the Fund is recorded
as a deferred credit. The value of an option purchased or written is marked to
market daily and is valued at the closing price on the exchange on which it is
traded or, if not traded on an exchange or no closing price is available, at the
last bid prices.
RISKS ASSOCIATED WITH OPTIONS ON SECURITIES AND INDEXES. There are several
risks associated with transactions in options on securities and on indexes. For
example, there are significant differences between the securities and options
markets that could result in an imperfect correlation between these markets,
causing a given transaction not to achieve its objectives. A decision as to
whether, when and how to use options involves the exercise of skill and
judgment, and even a well-conceived transaction may be unsuccessful to some
degree because of market behavior or unexpected events.
There can be no assurance that a liquid market will exist when the Fund seeks
to close out an option position. If the Fund were unable to close out an option
that it had purchased on a security, it would have to exercise the option in
order to realize any profit or the option may expire worthless. If the Fund were
unable to close out a covered call option that it had written on a security, it
would not be able to sell the underlying security unless the option expired
without exercise. As the writer of a covered call option, the Fund forgoes,
during the option's life, the opportunity to profit from increases in the market
value of the security covering the call option above the sum of the premium and
the exercise price of the call.
If trading were suspended in an option purchased by the Fund, the Fund would
not be able to close out the option. If restrictions on exercise were imposed,
the Fund might be unable to exercise an option it has purchased. Except to the
extent that a call option on an index written by the Fund is covered by an
option on the same index purchased by the Fund, movements in the index may
result in a loss to the Fund; however, such losses may be mitigated by changes
in the value of the Fund's securities during the period the option was
outstanding.
The costs of and possible losses incurred from options may reduce the Fund's
current income and involve a loss of principal. Any incremental return earned by
the Fund resulting from options transactions would be expected to offset
anticipated losses or a portion thereof.
PARTICIPATION ON CREDITORS' COMMITTEES
The Fund may from time to time participate on committees formed by creditors
to negotiate with the management of financially troubled issuers of securities
held by the Fund. Such participation may subject the Fund to expenses such as
legal fees and may make the fund an "insider" of the issuer for purposes of the
federal securities laws, and therefore may restrict the fund's ability to
purchase or sell a particular security when it might otherwise desire to do so.
Participation by the Fund on such committees also may expose the Fund to
potential liabilities under the federal bankruptcy laws or other laws governing
the rights of creditors and debtors. The Fund will participate on such
committees only when the Adviser believes that such participation is necessary
or desirable to enforce the Fund's rights as a creditor or to protect the value
of securities held by the Fund.
STRIPPED MORTGAGE-RELATED SECURITIES
The cash flows and yields on interest-only ("IO") and principal-only ("PO")
classes are extremely sensitive to the rate of principal payments (including
prepayments) on the related underlying mortgage assets. For example, a rapid or
slow rate of principal payments may have a material adverse effect on the yield
to maturity of IOs or POs, respectively. If the underlying mortgage assets
experience greater than anticipated prepayments of principal, an investor may
fail to recoup fully its initial investment in an IO class of a stripped
mortgage-backed security, even if the IO class is rated AAA or Aaa. Conversely,
if the
9
<PAGE>
underlying Mortgage Assets experience slower than anticipated prepayments of
principal, the yield on the PO class will be affected more severely than would
be the case with a traditional Mortgage-Backed Security.
ZERO COUPON, STEP COUPON AND PIK BONDS
The Funds may invest zero coupon bonds, step coupon bonds and bonds on which
interest is payable in kind ("PIK bonds"). A zero coupon bond is a bond that
does not pay interest currently for its entire life. Step coupon bonds
frequently do not entitle the holder to any periodic payments of interest for
some initial period after the issuance of the obligation; thereafter, step
coupon bonds pay interest for fixed periods of time at particular interest rates
(a "step coupon bond"). In the case of a zero coupon bond, the nonpayment of
interest on a current basis may result from the bond's having no stated interest
rate, in which case the bond pays only principal at maturity and is initially
issued at a discount from face value. Alternatively, a zero coupon obligation
may provide for a stated rate of interest, but provide that such interest is not
payable until maturity, in which case the bond may initially be issued at par.
The value to the investor of a zero coupon or step coupon bond is represented by
the economic accretion either of the difference between the purchase price and
the nominal principal amount (if no interest is state to accrue) or of accrued,
unpaid interest during the bond's life or payment deferral period. PIK bonds are
obligations which provide that the issuer thereof may, at its option, pay
interest on such bonds in cash or in the form of additional debt securities.
Such securities benefit the issuer by mitigating its need for cash to meet debt
service, but also require a higher rate of return to attract investors who are
willing to defer receipt of such cash. The Funds will accrue income on such
investments for tax and accounting purposes, which is distributable to
shareholders from available cash or liquidated assets.
Zero coupon and step coupon bonds are issued and traded at a discount from
their face amounts. The amount of the discount varies depending on such factors
as the time remaining until maturity of the bonds, prevailing interest rates,
the liquidity of the security and the perceived credit quality of the issuer.
The market prices of zero coupon, step coupon and PIK bonds generally are more
volatile than the market prices of securities that pay interest periodically and
are likely to respond to changes in interest rates to a greater degree than do
bonds on which regular cash payments of interest are being made that have
similar maturities and credit quality. In order to satisfy a requirement for
qualification as a "regulated investment company" under the Code, the Fund must
distribute its investment company taxable income, including the original issue
discount accrued on zero coupon or step coupon bonds or interest paid in
additional debt obligations on PIK bonds. Because the Fund will not receive on a
current basis cash payments in respect of accrued original issue discount on
zero coupon bonds, step coupon bonds during the period before interest payments
commence or interest paid in additional debt obligations on PIK bonds, the Fund
may have to distribute cash obtained form other sources in order to satisfy the
distribution requirement under the Code.
PERFORMANCE INFORMATION
The Funds may, from time to time, quote its "yield" and/or its "total return"
in advertisements, sales literature or reports to shareholders or prospective
investors. Average annual return and yield are computed separately for Class A,
Class B and Class C Shares in accordance with the formulas specified by the
Commission. The yield will be computed by dividing the Fund's net investment
income over a 30-day period by an average value (using the average number of
shares entitled to receive dividends and the maximum offering price per share at
the end of the period), all in accordance with applicable regulatory
requirements. Such amount will be compounded for six months and then annualized
for a 12-month period to derive the Fund's yield. Calculated pursuant to this
formula, for the Multi-Sector Short Term Bond Fund, for the 30-day period ending
October 31, 1999, the Class A Shares yield was 7.01%, the Class B Shares yield
was 6.67% and the Class C shares yield was 6.94%. For the Multi-Sector Fixed
Income Fund, for the 30-day period ending October 31, 1999, the Class A yield
was 8.32%, the Class B yield was 7.97% and the Class C yield was 7.95%.
Average annual total return quotations will be computed by finding the
average annual compounded rates of return over the 1-, 5- and 10-year periods
that would equate the initial amount invested to the ending redeemable value,
according to the following formula:
P(1 + T)(n) = ERV
Where P = hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1-, 5-, or
10-year periods at the end of the 1-, 5-, or 10-year
periods (or fractional portion thereof).
Performance quoted for Class C Shares covering periods prior to the inception
of Class C Shares will reflect historical performance of Class A Shares
adjusted for the higher operating expenses applicable to Class C Shares.
10
<PAGE>
Advertisements, sales literature and other communications may contain
information about the Funds and Adviser's current investment strategies and
management style. Current strategies and style may change to allow the Funds to
respond quickly to changing market and economic conditions. From time to time
the Funds may include specific portfolio holdings or industries, in such
communications. To illustrate components of overall performance, the Funds may
separate its cumulative and average annual returns into income and capital gains
components; or cite separately as a return figure the equity or bond portion of
a Fund's portfolio; or compare a Fund's equity or bond figures to well-known
indices of market performance, including, but not limited to: the S&P 500 Index,
Dow Jones Industrial Average, Lehman Brothers Aggregate Bond Index, CS First
Boston High Yield Index, Merrill Lynch Medium Quality Corporate Short-Term Bond
Index, and Salomon Brothers Corporate Bond and Government Bond Indices.
The average annual total return for each class of shares of each of the Funds
for the indicated periods ended October 31, 1999 were as follows:
<TABLE>
-------------------------------------------- ------------ ------------- ------------ -------------
<CAPTION>
SINCE INCEPTION
ONE YEAR FIVE YEARS INCEPTION DATE
-------------------------------------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Multi-Sector Fixed Income Fund
-------------------------------------------- ------------ ------------- ------------ -------------
Class A 0.94% 5.86% 8.36% 12/18/89
-------------------------------------------- ------------ ------------- ------------ -------------
Class B 1.27% 6.09% 6.34% 1/3/92
-------------------------------------------- ------------ ------------- ------------ -------------
Class C 5.23% N/A -3.68% 10/14/97
-------------------------------------------- ------------ ------------- ------------ -------------
Multi-Sector Short Term Bond Fund
-------------------------------------------- ------------ ------------- ------------ -------------
Class A 3.19% 6.98% 6.00% 7/6/92
-------------------------------------------- ------------ ------------- ------------ -------------
Class B 3.57% 6.88% 5.76% 7/6/92
-------------------------------------------- ------------ ------------- ------------ -------------
Class C 5.07% N/A 2.05% 10/1/97
-------------------------------------------- ------------ ------------- ------------ -------------
</TABLE>
Each Fund may also compute aggregate total return for specified periods based
on a hypothetical Class A, Class B or Class C account with an assumed initial
investment of $10,000. The aggregate total return is determined by dividing the
net asset value of this account at the end of the specified period by the value
of the initial investment and is expressed as a percentage. Calculation of
aggregate total return reflects payment of the Class A Share's maximum sales
charge of 4.75% for the Multi-Sector Fixed Income Fund and 2.25% for the
Multi-Sector Short Term Bond Fund, and assumes reinvestment of all income
dividends and capital gain distributions during the period.
Each Fund also may quote annual, average annual and annualized total return
and aggregate total return performance data, for each class of shares of the
Fund, both as a percentage and as a dollar amount based on a hypothetical
$10,000 investment for various periods other than those noted above. Such data
will be computed as described above, except that (1) the rates of return
calculated will not be average annual rates, but rather, actual annual,
annualized or aggregate rates of return and (2) the maximum applicable sales
charge will not be included with respect to annual, annualized or aggregate rate
of return calculations.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser places orders for the purchase and sale of securities, supervises
their execution and negotiates brokerage commissions on behalf of the Funds. It
is the practice of the Adviser to seek the best prices and execution of orders
and to negotiate brokerage commissions which in its opinion are reasonable in
relation to the value of the brokerage services provided by the executing
broker. Brokers who have executed orders for the Funds are asked to quote a fair
commission for their services. If the execution is satisfactory and if the
requested rate approximates rates currently being quoted by the other brokers
selected by the Adviser, the rate is deemed by the Adviser to be reasonable.
Brokers may ask for higher rates of commission if all or a portion of the
securities involved in the transaction are positioned by the broker, if the
broker believes it has brought the Fund an unusually favorable trading
opportunity, or if the broker regards its research services as being of
exceptional value. Payment of such commissions is authorized by the Adviser
after the transaction has been consummated. If the Adviser more than
occasionally differs with the broker's appraisal of opportunity or value, the
broker would not be selected to execute trades in the future.
The Adviser believes that the Funds benefits with a securities industry
comprised of many diverse firms and that the long-term interest of shareholders
of the Funds is best served by brokerage policies which include paying a fair
commission rather than seeking to exploit its leverage to force the lowest
possible commission rate. The primary factors considered in determining the
firms to which brokerage orders are given are the Adviser's appraisal of: the
firm's ability to execute the order in the desired manner, the value of research
services provided by the firm, and the firm's attitude toward and interest in
mutual funds in general, including those managed and sponsored by the Adviser.
The Adviser does not offer or promise to any broker an amount or percentage of
brokerage commissions as an inducement or reward for the sale of shares of the
Funds. Over-the-counter purchases and sales are transacted directly with
principal market-makers except in those circumstances where, in the opinion of
the Adviser, better prices and execution are available elsewhere. In the
over-the-counter market, securities are usually traded on a "net" basis with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security
11
<PAGE>
usually contains a profit to the dealer. The Funds also expect that securities
will be purchased at times in underwritten offerings where the price includes a
fixed amount of compensation, usually referred to as the underwriter's
concession or discount. The foregoing discussion does not relate to transactions
effected on foreign securities exchanges which do not permit the negotiation of
brokerage commissions and where the Adviser would, under the circumstances, seek
to obtain best price and execution on orders for the Funds.
The Funds have adopted a policy and procedures governing the execution of
aggregated advisory client orders ("bunching procedures") in an attempt to lower
commission costs on a per-share and per-dollar basis. According to the bunching
procedures, the Adviser shall aggregate transactions unless it believes in its
sole discretion that such aggregation is inconsistent with its duty to seek best
execution (which shall include the duty to seek best price) for the Funds. No
advisory account of the Adviser is to be favored over any other account and each
account that participates in an aggregated order is expected to participate at
the average share price for all transactions of the Adviser in that security on
a given business day, with all transaction costs shared pro rata based on the
Funds' participation in the transaction. If the aggregated order is filled in
its entirety, it shall be allocated among the Adviser's accounts in accordance
with the allocation order, and if the order is partially filled, it shall be
allocated pro rata based on the allocation order. Notwithstanding the foregoing,
the order may be allocated on a basis different from that specified in the
allocation order if all accounts of the Adviser whose orders are allocated
receive fair and equitable treatment and the reason for such different
allocation is explained in writing and is approved in writing by the Adviser's
compliance officer as soon as practicable after the opening of the markets on
the trading day following the day on which the order is executed. If an
aggregated order is partially filled and allocated on a basis different from
that specified in the allocation order, no account that is benefited by such
different allocation may intentionally and knowingly effect any purchase or sale
for a reasonable period following the execution of the aggregated order that
would result in it receiving or selling more shares than the amount of shares it
would have received or sold had the aggregated order been completely filled. The
Trustees will annually review these procedures or as frequently as shall appear
appropriate.
In general terms, the nature of research services provided by brokers
encompasses statistical and background information, forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments. Many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Adviser's staff since the brokers, as a group, tend
to monitor a broader universe of securities and other matters than the Adviser's
staff can follow. In addition, it provides the Adviser with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Adviser and is available
for the benefit of other accounts advised by the Adviser and its affiliates and
not all of this information will be used in connection with the Funds. While
this information may be useful in varying degrees and may tend to reduce the
Adviser's expenses, it is not possible to estimate its value and in the opinion
of the Adviser it does not reduce the Adviser's expenses in a determinable
amount. The extent to which the Adviser makes use of statistical, research and
other services furnished by brokers is considered by the Adviser in the
allocation of brokerage business, but there is no formula by which such business
is allocated. The Adviser does so in accordance with its judgment of the best
interest of the Funds and shareholders.
The Adviser may use its broker/dealer affiliates, or other firms that sell
shares of the Fund, to buy and sell securities for the Fund, provided they have
the execution capability and that their commission rates are comparable to those
of other unaffiliated broker/dealers. Directors of PXP Securities Corp. or its
affiliates receive indirect benefits from the Fund as a result of its usual and
customary brokerage commissions that PXP Securities Corp. may receive for acting
as broker to the Fund in the purchase and sale of portfolio securities. The
investment advisory agreement does not provide for a reduction of the advisory
fee by any portion of the brokerage fees generated by portfolio transactions of
the Fund that PXP Securities Corp. may receive.
The Funds paid no brokerage commissions for the fiscal years ended October
31, 1997, 1998, and 1999.
SERVICES OF THE ADVISER
Phoenix Investment Counsel, Inc. ("PIC" or "Adviser") serves as investment
adviser to the Funds. PIC is located at 56 Prospect Street, Hartford,
Connecticut 06115. PIC acts as the investment adviser for 14 fund companies
totaling 37 mutual funds, as subadviser to two fund companies totaling three
mutual funds, and as adviser to institutional clients. PIC has acted as an
investment adviser for over sixty years. PIC was originally organized in 1932 as
John P. Chase, Inc. As of December 31, 1999, PIC had approximately $25.7 billion
in assets under management. Philip R. McLoughlin, a Trustee and officer of the
Fund, is a director of PIC. All other executive officers of the Fund are
officers of PIC.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("Equity Planning" or "Distributor"), a subsidiary of Phoenix
Investment Partners, Ltd. ("PXP"). Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") of Hartford, Connecticut is a majority shareholder of PXP.
Phoenix Home Life is in the business of writing ordinary and
12
<PAGE>
group life and health insurance and annuities. Its principal offices are located
at One American Row, Hartford, Connecticut, 06115-2520. Equity Planning, a
mutual fund distributor, acts as the national distributor of the Fund's shares
and as Financial Agent of the Fund. The principal office of Equity Planning is
located at 100 Bright Meadow Boulevard, Enfield, Connecticut, 06082.
PXP is a publicly-traded independent registered investment advisory firm and
has served investors for over 70 years. As of September 30, 2000, PXP had over
$61.9 billion in assets under management through its investment partners:
Aberdeen Fund Managers, Inc. (Aberdeen) in Aberdeen, London, Singapore and Fort
Lauderdale; Duff & Phelps Investment Management Co. (Duff & Phelps) in Chicago
and Cleveland; Roger Engemann & Associates, Inc. (Engemann) in Pasadena; Seneca
Capital Management LLC (Seneca) in San Francisco; Phoenix/Zweig Advisers LLC
(Zweig) in New York; and Phoenix Investment Counsel, Inc. (Goodwin, Hollister,
and Oakhurst divisions) in Hartford, Sarasota and Scotts Valley, CA,
respectively.
The Adviser provides certain services and facilities required to carry on the
day-to-day operations of the Fund (for which it receives a management fee) other
than the costs of printing and mailing proxy materials, reports and notices to
shareholders; outside legal and auditing services; regulatory filing fees and
expenses of printing the Fund's registration statements (but the Distributor
purchases such copies of the Fund's prospectuses and reports and communications
to shareholders as it may require for sales purposes); insurance expense;
association membership dues; brokerage fees; and taxes.
The Management Agreement will continue in effect from year to year if
specifically approved annually by a majority of the Trustees who are not
interested persons of the parties thereto, as defined in the 1940 Act, and by
either (a) the Board of Trustees or (b) the vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act). The
Agreement may be terminated without penalty at any time by the Trustees or by a
vote of a majority of the outstanding voting securities of the Fund or by the
Adviser upon 60 days' written notice and will automatically terminate in the
event of its "assignment" as defined in Section 2(a)(4) of the 1940 Act.
The Management Agreement provides that the Adviser is not liable for any act
or omission in the course of or in connection with rendering services under the
Agreement in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties under the Agreement. The Agreement
permits the Adviser to render services to others and to engage in other
activities.
As compensation for its services the Adviser receives a fee which is accrued
daily against the value of each Fund's net assets and is paid by the Fund
monthly. The fee is computed at the annual rate of 0.55% of each Fund's average
daily net assets up to $1 billion; 0.50% of the Fund's average daily net assets
from $1 billion to $2 billion; and 0.45% of the Fund's average daily net assets
in excess of $2 billion. Total management fees for the Short Term Bond Fund for
the fiscal years ended October 31, 1997, 1998 and 1999 amounted to $159,118,
$270,259 and $283,982, respectively, a portion of which amounts were waived by
the Adviser. Total management fees for the Fixed Income Fund for the fiscal
years ended October 31, 1997, 1998 and 1999 amounted to $1,860,360, $1,875,258
and $1,437,307, respectively.
The Adviser makes its personnel available to serve as officers and
"interested" Trustees of the Fund. The Fund has not directly compensated any of
its officers or Trustees for services in such capacities except to pay fees to
the Trustees who are not otherwise affiliated with the Fund. The Trustees of the
Fund are not prohibited from authorizing the payment of salaries to the officers
pursuant to the Management Agreement, including out-of-pocket expenses, at some
future time.
In addition to the management fee, expenses paid by the Fund include: fees of
Trustees who are not "interested persons," interest charges, taxes, fees and
commissions of every kind, including brokerage fees, expenses of issuance,
repurchase or redemption of shares, expenses of registering or qualifying shares
for sale (including the printing and filing of the Fund's registration
statements, reports, and prospectuses excluding those copies used for sales
purposes which the Distributor purchases), accounting services fees, insurance
expenses, litigation expenses, association membership dues, all charges of
custodians, transfer agents, registrars, auditors and legal counsel, expenses of
preparing, printing and distributing all proxy material, reports and notices to
shareholders, and all costs incident to the Fund's existence as a Delaware
business trust.
For the Short Term Bond Fund, the Adviser has agreed to reimburse the Fund's
operating expenses, other than Management Fees and Rule 12b-1 Fees, related to
each class of shares for the amount, if any, by which such operating expenses
for the fiscal year ended February 28, 2001, exceed 0.20% of the average net
assets. The Total Fund Operating Expenses for Class A, Class B and Class C
Shares were 1.48%, 1.98% and 1.73%, respectively, absent such waiver or
reimbursement for the fiscal year ended October 31, 1999. The Adviser has not
undertaken to extend the reimbursement beyond February 28, 2001.
The Trust, its Adviser and Distributor have each adopted a Code of Ethics
pursuant to Rule 17-j1 under the Investment Company Act of 1940. Personnel
subject to the Codes of Ethics may purchase and sell securities for their
personal accounts, including securities that may be purchased, sold or held by
the Funds, subject to certain restrictions and conditions. Generally, personal
securities transactions are subject to preclearance procedures, reporting
requirements and holding period rules. The
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Codes also restrict personal securities transactions in private placements,
initial public offerings and securities in which a Fund has a pending order.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the close of
trading of the New York Stock Exchange (the "Exchange") on days when the
Exchange is open for trading. The Exchange will be closed on the following
observed national holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Since the Fund does not price securities on
weekends or United States national holidays, the net asset value of the Fund's
foreign assets may be significantly affected on days when the investor has no
access to the Fund. The net asset value per share of the Fund is determined by
adding the values of all securities and other assets of the Fund, subtracting
liabilities, and dividing by the total number of outstanding shares of the Fund.
Assets and liabilities are determined in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission. The total liability allocated to a class, plus that class's
distribution fee and any other expenses allocated solely to that class, are
deducted from the proportionate interest of such class in the assets of the
Fund, and the resulting amount of each is divided by the number of shares of
that class outstanding to produce the net asset value per share.
A security that is listed or traded on more than one exchange is valued at
the quotation on the exchange determined to be the primary exchange for such
security by the Trustees or their delegates. Because of the need to obtain
prices as of the close of trading on various exchanges throughout the world, the
calculation of net asset value may not take place for the Fund if it invests in
foreign securities contemporaneously with the determination of the prices of the
majority of the portfolio securities of the Fund. All assets and liabilities
initially expressed in foreign currency values will be converted into United
States dollar values at the mean between the bid and ask quotations of such
currencies against United States dollars as last quoted by any recognized
dealer. If an event were to occur after the value of an investment was so
established but before the net asset value per share was determined, which was
likely to materially change the net asset value, then the instrument would be
valued using fair value considerations by the Trustees or their delegates. If at
any time the Fund has investments where market quotations are not readily
available, such investments are valued at the fair value thereof as determined
in good faith by the Trustees although the actual calculations may be made by
persons acting pursuant to the direction of the Trustees.
HOW TO BUY SHARES
The minimum initial investment is $500 and the minimum subsequent investment
is $25. However, both the minimum initial and subsequent investment amounts are
$25 for investments pursuant to the "Investo-Matic" plan, a bank draft investing
program administered by Distributor, or pursuant to the Systematic Exchange
privilege or for an individual retirement account (IRA). In addition, there are
no subsequent investment minimum amounts in connection with the reinvestment of
dividend or capital gain distributions. Completed applications for the purchase
of shares should be mailed to: Phoenix Funds, c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301.
The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Fund's net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased from investment dealers at a price equal to their net
asset value per share, plus a sales charge which, at the election of the
purchaser, may be imposed either (i) at the time of the purchase (the "initial
sales charge alternative") or (ii) on a contingent deferred basis (the "deferred
sales charge alternative"). Orders received by dealers prior to the close of
trading on the New York Stock Exchange are confirmed at the offering price
effective at that time, provided the order is received by the Authorized Agent
prior to its close of business.
The alternative purchase arrangements permit an investor to choose the method
of purchasing shares that is more beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, whether the investor
wishes to receive distributions in cash or to reinvest them in additional shares
of the Funds, and other circumstances. Investors should consider whether, during
the anticipated life of their investment in the Fund, the accumulated continuing
distribution and services fees and contingent deferred sales charges on Class B
or Class C Shares would be less than the initial sales charge and accumulated
distribution services fee on Class A Shares purchased at the same time.
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Dividends paid by the Fund, if any, with respect to each class of shares will
be calculated in the same manner at the same time on the same day, except that
fees such as higher distribution and services fees and any incremental transfer
agency costs relating to each class of shares will be borne exclusively by that
class. See "Dividends, Distributions and Taxes."
CLASS A SHARES
Class A Shares incur a sales charge when they are purchased and enjoy the
benefit of not being subject to any sales charge when they are redeemed. Class A
Shares are subject to an ongoing distribution and services fee at an annual rate
of up to 0.25% of the Fund's aggregate average daily net assets attributable to
the Class A Shares. In addition, certain purchases of Class A Shares qualify for
reduced initial sales charges.
CLASS B SHARES
Class B Shares do not incur a sales charge when they are purchased, but they
are subject to a sales charge if they are redeemed within three years of
purchase. The deferred sales charge may be waived in connection with certain
qualifying redemptions. See Class B and Class C Shares--Waiver of Sales Charges.
Class B Shares are subject to an ongoing distribution and services fee at an
annual rate of 1.00% of Multi-Sector Fixed Income Fund's aggregate daily net
assets attributable to Class B Shares and .75% of the Multi-Sector Short Term
Bond Fund's aggregate average daily net assets attributable to the Class B
Shares. Class B Shares enjoy the benefit of permitting all of the investor's
dollars to work from the time the investment is made. The higher ongoing
distribution and services fee paid by Class B Shares will cause such shares to
have a higher expense ratio and to pay lower dividends, to the extent any
dividends are paid, than those related to Class A Shares. Class B Shares of the
Multi-Sector Fixed Income Fund will automatically convert to Class A Shares
eight years after the end of the calendar month in which the shareholder's order
to purchase was accepted. Class B Shares of the Multi-Sector Short Term Bond
Fund convert to Class A Shares six years after the end of the calendar month in
which the shareholder's order to purchase was accepted. The purpose of the
conversion feature is to relieve the holders of the Class B Shares that have
been outstanding for a period of time sufficient for the Adviser and the
Distributor to have been compensated for distribution expenses related to the
Class B Shares from most of the burden of such distribution related expenses.
Class B Shares of the Multi-Sector Fixed Income Fund include all shares
purchased pursuant to the deferred sales charge alternative which have been
outstanding for less than the period ending eight years after the end of the
month in which the shares were issued. Class B Shares of the Multi-Sector Short
Term Bond Fund include all shares purchased pursuant to the deferred sales
charge alternative which have been outstanding for less than the period ending
six years after the end of the month in which the shares were issued. At the end
of this period, Class B Shares of each Fund will automatically convert to Class
A Shares of the same Fund and will no longer be subject to the higher
distribution and services fee. Such conversion will be on the basis of the
relative net asset value of the two classes without the imposition of any sales
load, fee or other charge.
For purposes of conversion to Class A Shares, shares purchased through the
reinvestment of dividends and distributions paid in respect of Class B Shares in
a shareholder's Fund account will be considered to be held in a separate
subaccount. Each time any Class B Shares in the shareholder's Fund account
(other than those in the subaccount) convert to Class A Shares, an equal pro
rata portion of the Class B Shares in the subaccount will also convert to Class
A Shares.
CLASS C SHARES
Class C Shares are purchased without an initial sales charge and are not
subject to any sales charge when shares are redeemed. All purchases, including
reinvestments of dividend and capital gain distributions, and redemptions are
made at the net asset value per share of the Fund. Class C Shares are subject to
an ongoing distribution and services fee at an annual rate of 1.00% of the
Multi-Sector Fixed Income Fund's aggregate average daily net assets attributable
to Class C Shares and 0.50% of the Multi-Sector Short Term Bond Fund's aggregate
average daily net assets attributable to the Class C Shares. Class C Shares do
not convert to another class of shares and long term investors may therefore pay
more through accumulated distribution fees than the economic equivalent of any
applicable sales charge and accumulated distribution fees in the other classes.
The distribution expenses incurred by the Distributor in connection with the
sale of the shares will be paid, in the case of Class A Shares, from the
proceeds of the initial sales charge and the ongoing distribution and services
fee. In the case of Class B Shares, distribution expenses incurred by the
Distributor in connection with the sale of the shares will be paid from the
proceeds of the ongoing distribution and services fee and the contingent
deferred sales charge incurred upon redemption within three years of purchase.
For Class C Shares, the ongoing distribution and services fee will be used to
pay for the distribution expenses incurred by the Distributor. Sales personnel
of broker-dealers distributing the Fund's shares may receive differing
compensation for selling Class A, Class B or Class C shares. Investors should
understand that the purpose and function of the contingent deferred sales charge
and ongoing distribution and services fee with respect to the Class B and Class
C Shares are the same as those of the initial sales charge and ongoing
distribution and services fees with respect to the Class A Shares.
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CLASS A SHARES--REDUCED INITIAL SALES CHARGES
Investors choosing Class A Shares may be entitled to reduced sales charges.
The circumstances under which sales charges may be avoided or reduced are
described below.
QUALIFIED PURCHASERS. If you fall within any one of the following categories,
you will not have to pay a sales charge on your purchase of Class A Shares: (1)
trustee, director or officer of the Phoenix Funds, the Phoenix-Engemann Funds,
Phoenix-Seneca Funds or any other mutual funds advised, subadvised or
distributed by the Adviser, Distributor or any of their corporate affiliates (an
"Affiliated Phoenix Fund"); (2) any director or officer, or any full-time
employee or sales representative (for at least 90 days), of the Adviser or
Distributor; (3) registered representatives and employees of securities dealers
with whom Distributor has sales agreements; (4) any qualified retirement plan
exclusively for persons described above; (5) any officer, director or employee
of a corporate affiliate of the Adviser or Distributor; (6) any spouse, child,
parent, grandparent, brother or sister of any person named in (1), (2), (3) or
(5) above; (7) employee benefit plans for employees of the Adviser, Distributor
and/or their corporate affiliates; (8) any employee or agent who retires from
Phoenix Home Life, Distributor and/or their corporate affiliates; (9) any
account held in the name of a qualified employee benefit plan, endowment fund or
foundation if, on the date of the initial investment, the plan, fund or
foundation has assets of $10,000,000 or more or at least 100 eligible employees;
(10) any person with a direct rollover transfer of shares from an established
Phoenix Fund or any other Affiliated Phoenix Fund qualified plan; (11) any
Phoenix Home Life separate account which funds group annuity contracts offered
to qualified employee benefit plans; (12) any state, county, city, department,
authority or similar agency prohibited by law from paying a sales charge; (13)
any fully matriculated student in any U.S. service academy; (14) any unallocated
account held by a third party administrator, registered investment adviser,
trust company, or bank trust department which exercises discretionary authority
and holds the account in a fiduciary, agency, custodial or similar capacity, if
in the aggregate such accounts held by such entity equal or exceed $1,000,000;
(15) any person who is investing redemption proceeds from investment companies
other than the Phoenix Funds or any other Affiliated Phoenix Fund if, in
connection with the purchases or redemption of the redeemed shares, the investor
paid a prior sales charge provided such investor supplies verification that the
redemption occurred within 90 days of the Phoenix Fund purchase and that a sales
charge was paid; (16) any deferred compensation plan established for the benefit
of any Phoenix Fund or any other Affiliated Phoenix Fund trustee or director;
provided that sales to persons listed in (1) through (15) above are made upon
the written assurance of the purchaser that the purchase is made for investment
purposes and that the shares so acquired will not be resold except to the Fund;
(17) purchasers of Class A Shares bought through investment advisors and
financial planners who charge an advisory, consulting or other fee for their
services and buy shares for their own accounts or the accounts of their clients;
(18) retirement plans and deferred compensation plans and trusts used to fund
those plans (including, for example, plans qualified or created under sections
401(a), 403(b) or 457 of the Internal Revenue Code), and "rabbi trusts" that buy
shares for their own accounts, in each case if those purchases are made through
a broker or agent or other financial intermediary that has made special
arrangements with the Distributor for such purchases; or (19) 401(k)
participants in the Merrill Lynch Daily K Plan (the "Plan") if the Plan has at
least $3 million in assets or 500 or more eligible employees; (20) clients of
investment advisors or financial planners who buy shares for their own accounts
but only if their accounts are linked to a master account of their investment
advisor or financial planner on the books and records of the broker, agent or
financial intermediary with which the Distributor has made such special
arrangements (each of the investors described in (17) through (20) may be
charged a fee by the broker, agent or financial intermediary for purchasing
shares).
COMBINATION PURCHASE PRIVILEGE. Your purchase of any class of shares of the
Funds or any other Affiliated Phoenix Fund (other than Phoenix-Goodwin Money
Market Fund and Phoenix-Zweig Government Cash Fund Class A Shares), if made at
the same time by the same "person," will be added together to determine whether
the combined sum entitles you to an immediate reduction in sales charges. A
"person" is defined in this and the following sections as (a) any individual,
their spouse and minor children purchasing shares for his or their own account
(including an IRA account) including his or their own trust; (b) a trustee or
other fiduciary purchasing for a single trust, estate or single fiduciary
account (even though more than one beneficiary may exist); (c) multiple employer
trusts or Section 403(b) plans for the same employer; (d) multiple accounts (up
to 200) under a qualified employee benefit plan or administered by a third party
administrator; or (e) trust companies, bank trust departments, registered
investment advisers, and similar entities placing orders or providing
administrative services with respect to funds over which they exercise
discretionary investment authority and which are held in a fiduciary, agency,
custodial or similar capacity, provided all shares are held of record in the
name, or nominee name, of the entity placing the order.
LETTER OF INTENT. If you sign a Letter of Intent, your purchase of any class
of shares of the Funds or any other Affiliated Phoenix Fund (other than
Phoenix-Goodwin Money Market Fund and Phoenix-Zweig Government Cash Fund Class A
Shares), if made by the same person within a thirteen month period, will be
added together to determine whether you are entitled to an immediate reduction
in sales charges. Sales charges are reduced based on the overall amount you
indicate that you will buy under the Letter of Intent. The Letter of Intent is a
mutually non-binding arrangement between you and the Distributor. Since the
Distributor doesn't know whether you will ultimately fulfill the Letter of
Intent, shares worth 5% of the amount of each purchase will be set aside until
you fulfill the Letter of Intent. When you buy enough shares to fulfill the
Letter of Intent, these shares will no longer be restricted. If, on the other
hand, you do not satisfy the Letter of Intent, or otherwise
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wish to sell any restricted shares, you will be given the choice of either
buying enough shares to fulfill the Letter of Intent or paying the difference
between any sales charge you previously paid and the otherwise applicable sales
charge based on the intended aggregate purchases described in the Letter of
Intent. You will be given 20 days to make this decision. If you do not exercise
either election, the Distributor will automatically redeem the number of your
restricted shares needed to make up the deficiency in sales charges received.
The Distributor will redeem restricted Class A Shares before Class C Shares or
Class B Shares, respectively. Oldest shares will be redeemed before selling
newer shares. Any remaining shares will then be deposited to your account.
RIGHT OF ACCUMULATION. Your purchase of any class of shares of the Funds or
any other Affiliated Phoenix Fund, if made over time by the same person may be
added together to determine whether the combined sum entitles you to a
prospective reduction in sales charges. You must provide certain account
information to the Distributor to exercise this right.
ASSOCIATIONS. Certain groups or associations may be treated as a "person" and
qualify for reduced Class A Share sales charges. The group or association must:
(1) have been in existence for at least six months; (2) have a legitimate
purpose other than to purchase mutual fund shares at a reduced sales charge; (3)
work through an investment dealer; or (4) not be a group whose sole reason for
existing is to consist of members who are credit card holders of a particular
company, policyholders of an insurance company, customers of a bank or a
broker-dealer or clients of an investment adviser.
CLASS B AND CLASS C SHARES--WAIVER OF SALES CHARGES
The CDSC is waived on the redemption (sale) of Class B and Class C Shares if
the redemption is made (a) within one year of death (i) of the sole shareholder
on an individual account, (ii) of a joint tenant where the surviving joint
tenant is the deceased's spouse, or (iii) of the beneficiary of a Uniform Gifts
to Minors Act (UGMA), Uniform Transfers to Minors Act (UTMA) or other custodial
account; (b) within one year of disability, as defined in Code Section 72(m)(7);
(c) as a mandatory distribution upon reaching age 701/2 under any retirement
plan qualified under Code Sections 401, 408 or 403(b) or resulting from the
tax-free return of an excess contribution to an IRA; (d) by 401(k) plans using
an approved participant tracking system for participant hardships, death,
disability or normal retirement, and loans which are subsequently repaid; (e)
from the Merrill Lynch Daily K Plan ("Plan") invested in Class B Shares, on
which such shares the Distributor has not paid the dealer the Class B sales
commission; (f) based on the exercise of exchange privileges among Class B
Shares of the Funds or any other Affiliated Phoenix Fund; (g) based on any
direct rollover transfer of shares from an established Affiliated Phoenix Fund
qualified plan into an Affiliated Phoenix Fund IRA by participants terminating
from the qualified plan; and (h) based on the systematic withdrawal program. If,
as described in condition (a) above, an account is transferred to an account
registered in the name of a deceased's estate, the CDSC will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B Shares are not redeemed within one year of the death, they will
remain subject to the applicable CDSC when redeemed. Class C Shares of the
Multi-Sector Short Term Bond Fund are not subject to any sales charge when
redeemed.
CONVERSION FEATURE--CLASS B SHARES
For Multi-Sector Fixed Income Fund, Class B Shares will automatically convert
to Class A Shares of the same Fund eight years after they are purchased. For
Multi-Sector Short Term Bond Fund, Class B Shares will automatically convert to
Class A Shares of the same Fund six years after they are purchased. Conversion
will be on the basis of the then prevailing net asset value of Class A and Class
B Shares. There is no sales load, fee or other charge for this feature. Class B
Shares acquired through dividend or distribution reinvestments will be converted
into Class A Shares at the same time that other Class B Shares are converted
based on the proportion that the reinvested shares bear to purchased Class B
Shares. The conversion feature is subject to the continuing availability of an
opinion of counsel or a ruling of the Internal Revenue Service that the
assessment of the higher distribution fees and associated costs with respect to
Class B Shares does not result in any dividends or distributions constituting
"preferential dividends" under the Code, and that the conversion of shares does
not constitute a taxable event under federal income tax law. If the conversion
feature is suspended, Class B Shares would continue to be subject to the higher
distribution fee for an indefinite period. Even if the Fund was unable to obtain
such assurances, it might continue to make distributions if doing so would
assist in complying with its general practice of distributing sufficient income
to reduce or eliminate federal taxes otherwise payable by the Fund.
INVESTOR ACCOUNT SERVICES
The Fund offers accumulation plans, withdrawal plans and reinvestment and
exchange privileges. Certain privileges may not be available in connection with
all classes. In most cases, changes to account services may be accomplished over
the phone. Inquiries regarding policies and procedures relating to shareholder
account services should be directed to Shareholder Services at (800) 243-1574.
Broker/dealers may impose their own restrictions and limits on accounts held
through the broker/dealer. Please consult your broker/dealer for account
restriction and limit information.
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EXCHANGES
Class A Shares of the Multi-Sector Short Term Bond Fund held under six months
are not eligible for the exchange privilege. Under certain circumstances, shares
of any Phoenix Fund may be exchanged for shares of the same class of any other
Affiliated Phoenix Fund on the basis of the relative net asset values per share
at the time of the exchange. Exchanges are subject to minimum initial investment
requirements of the designated fund, except if made in connection with the
Systematic Exchange privilege. Shareholders may exchange shares held in
book-entry form for an equivalent number (value) of the same class of shares of
any other Affiliated Phoenix Fund, if currently offered. Exchanges will be based
upon each Fund's net asset value per share next computed following receipt of a
properly executed exchange request, without sales charge. On exchanges with
share classes that carry a contingent deferred sales charge, the CDSC schedule
of the original shares purchased continues to apply. The exchange of shares is
treated as a sale and purchase for federal income tax purposes (see also
"Dividends, Distributions and Taxes"). Exchange privileges may not be available
for all Phoenix Funds, and may be rejected or suspended.
SYSTEMATIC EXCHANGES. If the conditions above have been met, you or your
broker may, by telephone or written notice, elect to have shares exchanged for
the same class of shares of another Affiliated Phoenix Fund automatically on a
monthly, quarterly, semi-annual or annual basis or may cancel this privilege at
any time. If you maintain an account balance of at least $5,000, or $2,000 for
tax qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that shares be
automatically exchanged at predetermined intervals for shares of the same class
of another Affiliated Phoenix Fund. This requirement does not apply to Phoenix
"Self Security" program participants. Systematic exchanges will be executed upon
the close of business on the 10th day of each month or the next succeeding
business day. Systematic exchange forms are available from the Distributor.
Exchanges will be based upon each Fund's net asset value per share next computed
after the close of business on the 10th day of each month (or succeeding
business day), without sales charge.
DIVIDEND REINVESTMENT ACROSS ACCOUNTS
If you maintain an account balance of at least $5,000, or $2,000 for tax
qualified retirement benefit plans (calculated on the basis of the net asset
value of the shares held in a single account), you may direct that any dividends
and distributions paid with respect to shares in that account be automatically
reinvested in a single account of one of the other Phoenix Funds or any other
Affiliated Phoenix Fund at net asset value. You should obtain a current
prospectus and consider the objectives and policies of each Fund carefully
before directing dividends and distributions to another Fund. Reinvestment
election forms and prospectuses are available from Equity Planning.
Distributions may also be mailed to a second payee and/or address. Requests for
directing distributions to an alternate payee must be made in writing with a
signature guarantee of the registered owner(s). To be effective with respect to
a particular dividend or distribution, notification of the new distribution
option must be received by the Transfer Agent at least three days prior to the
record date of such dividend or distribution. If all shares in your account are
repurchased or redeemed or transferred between the record date and the payment
date of a dividend or distribution, you will receive cash for the dividend or
distribution regardless of the distribution option selected.
INVEST-BY-PHONE
This expedited investment service allows you to make an investment in an
account by requesting a transfer of funds from the balance of your bank account.
Once a request is phoned in, Equity Planning will initiate the transaction by
wiring a request for monies to your commercial bank, savings bank or credit
union via Automated Clearing House (ACH). Your bank, which must be an ACH
member, will in turn forward the monies to Equity Planning for credit to your
account. ACH is a computer based clearing and settlement operation established
for the exchange of electronic transactions among participating depository
institutions. This service may also be used to sell shares of the Fund and
direct proceeds of sale through ACH to your bank account.
To establish this service, please complete the Invest-by-Phone Application
and attach a voided check. Upon Equity Planning's acceptance of the
authorization form (usually within two weeks) you may call toll free (800)
367-5877 prior to 3:00 p.m. (Eastern Time) to place your purchase request.
Instructions as to the account number and amount to be invested must be
communicated to Equity Planning. Equity Planning will then contact your bank via
ACH with appropriate instructions. The purchase is normally credited to your
account the day following receipt of the verbal instructions. The Fund may delay
the mailing of a check for redemption proceeds of Fund shares purchased with a
check or via Invest-by-Phone service until the Fund has assured itself that good
payment has been collected for the purchase of the shares, which may take up to
15 days.
The Fund and Equity Planning reserve the right to modify or terminate the
Invest-by-Phone service for any reason or to institute charges for maintaining
an Invest-by-Phone account.
SYSTEMATIC WITHDRAWAL PROGRAM
The Systematic Withdrawal Program allows you to periodically redeem a portion
of your account on a predetermined monthly, quarterly, semiannual or annual
basis. A sufficient number of full and fractional shares will be redeemed so
that the
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designated payment is made on or about the 20th day of the month. Shares are
tendered for redemption by the Transfer Agent, as agent for the shareowner, on
or about the 15th of the month at the closing net asset value on the date of
redemption. The Systematic Withdrawal Program also provides for redemptions to
be tendered on or about the 10th, 15th or 25th of the month with proceeds to be
directed through Automated Clearing House (ACH) to your bank account. In
addition to the limitations stated below, withdrawals may not be less than $25
and minimum account balance requirements shall continue to apply.
Shareholders participating in the Systematic Withdrawal Program must own
shares of a Fund worth $5,000 or more, as determined by the then current net
asset value per share, and elect to have all dividends reinvested. The purchase
of shares while participating in the withdrawal program will ordinarily be
disadvantageous to the Class A Shares investor since a sales charge will be paid
by the investor on the purchase of Class A Shares at the same time as other
shares are being redeemed. For this reason, investors in Class A Shares may not
participate in an automatic investment program while participating in the
Systematic Withdrawal Program.
Through the Program, Class B and Class C shareholders may withdraw up to 1%
of their aggregate net investments (purchases, at initial value, to date net of
non-Program redemptions) each month or up to 3% of their aggregate net
investments each quarter without incurring otherwise applicable contingent
deferred sales charges. Class B and Class C Shareholders redeeming more shares
than the percentage permitted by the withdrawal program will be subject to any
applicable contingent deferred sales charge on all shares redeemed. Accordingly,
the purchase of Class B or Class C Shares will generally not be suitable for an
investor who anticipates withdrawing sums in excess of the above limits shortly
after the purchase.
TAX SHELTERED RETIREMENT PLANS
Shares of the Fund are offered in connection with the following qualified
prototype retirement plans: IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Roth IRA,
401(k), Profit-Sharing, Money Purchase Pension Plans and 403(b) Retirement
Plans. Write or call Equity Planning (800) 243-4361 for further information.
MERRILL LYNCH DAILY K PLAN
Class A Shares of a Fund are made available to Merrill Lynch Daily K Plan
(the "Plan") participants at NAV without an initial sales charge if:
(i) the Plan is recordkept on a daily valuation basis by Merrill Lynch
and, on the date the Plan Sponsor signs the Merrill Lynch
Recordkeeping Service Agreement, the Plan has $3 million or more in
assets invested in broker/dealer funds not advised or managed by
Merrill Lynch Asset Management L.P. ("MLAM") that are made available
pursuant to a Service Agreement between Merrill Lynch and the fund's
principal underwriter or distributor and in funds advised or managed
by MLAM (collectively, the "Applicable Investments");
(ii) the Plan is recordkept on a daily valuation basis by an independent
recordkeeper whose services are provided through a contract or
alliance arrangement with Merrill Lynch, and, on the date the Plan
Sponsor signs the Merrill Lynch Recordkeeping Service Agreement, the
Plan has $3 million or more in assets, excluding money market funds,
invested in Applicable Investments; or
(iii) the Plan has 500 or more eligible employees, as determined by a
Merrill Lynch plan conversion manager, on the date the Plan Sponsor
signs the Merrill Lynch Recordkeeping Service Agreement.
Alternatively, Class B Shares of a Fund are made available to Plan
participants at NAV without a CDSC if the Plan conforms with the requirements
for eligibility set for in (i) through (iii) above but either does not meet the
$3 million asset threshold or does not have 500 or more eligible employees.
Plans recordkept on a daily basis by Merrill Lynch or an independent
recordkeeper under a contract with Merrill Lynch that are currently investing in
Class B Shares of a Fund convert to Class A Shares once the Plan has reached $5
million invested in Applicable Investments, or after the normal holding period
of five years from the initial date of purchase.
HOW TO REDEEM SHARES
Under the 1940 Act, payment for shares redeemed must ordinarily be made
within seven days after tender. The right to redeem shares may be suspended and
payment therefor postponed during periods when the New York Stock Exchange is
closed, other than customary weekend and holiday closings, or if permitted by
rules of the Securities and Exchange Commission, during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Trust to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Securities
and Exchange Commission for the protection of investors. Furthermore, the
Transfer Agent will not mail redemption proceeds until checks received for
shares purchased have cleared, which may take up to 15 days or more after
receipt of the check. See the Fund's current Prospectus for further information.
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The Trust has authorized one or more brokers to accept on its behalf purchase
and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Trust's behalf.
The Trust will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Customer orders will be priced at the Fund's net asset values next
computed after they are accepted by an authorized broker or the broker's
authorized designee.
Redemptions by Class B and Class C shareholders will be subject to the
applicable deferred sales charge, if any.
A shareholder should contact his/her broker/dealer if he/she wishes to
transfer shares from an existing broker/dealer street name account into a street
name account with another broker/dealer. The Funds have no specific procedures
governing such account transfers.
REDEMPTION OF SMALL ACCOUNTS
Each shareholder account in the Funds which has been in existence for at
least one year and has a value of less than $200 may be redeemed upon the giving
of not less than 30 days written notice to the shareholder mailed to the address
of record. During the 60 day period the shareholder has the right to add to the
account to bring its value to $200 or more. See the Fund's current Prospectus
for more information.
BY MAIL
Shareholders may redeem shares by making written request, executed in full
name of the account, directly to Phoenix Funds c/o State Street Bank and Trust
Company, P.O. Box 8301, Boston, MA 02266-8301. However, when certificates for
shares are in the possession of the shareholder, they must be mailed or
presented, duly endorsed in the full name of the account, with a written request
to Equity Planning that the Trust redeem the shares. See the Fund's current
Prospectus for more information.
BY CHECK
You may elect to redeem shares held in your account by check. Checks will be
sent to you upon receipt by Equity Planning of a completed application and
signature card (attached to the application). If the signature card accompanies
your initial account application, the signature guarantee section of the form
may be disregarded. However, the Fund reserves the right to require that all
signatures be guaranteed prior to the establishment of a check writing service
account. When an authorization form is submitted after receipt of the initial
account application, all signatures must be guaranteed regardless of account
value.
Checks may be drawn payable to any person in an amount of not less than $500,
provided that immediately after the payment of the redemption proceeds the
balance in your account is $500 or more.
When a check is presented to Equity Planning for payment, a sufficient number
of full and fractional shares in your account will be redeemed to cover the
amount of the check. The number of shares to be redeemed will be determined on
the date the check is received by the Transfer Agent. Presently there is no
charge to you for the check writing service, but this may be changed or modified
in the future upon two weeks written notice to shareholders. Checks drawn from
Class B accounts are subject to the applicable deferred sales charge, if any.
The checkwriting procedure for redemption enables you to receive income
accruing on the shares to be redeemed until such time as the check is presented
to Equity Planning for payment. Inasmuch as canceled checks are returned to
shareholders monthly, no confirmation statement is issued at the time of
redemption.
Shareholders utilizing withdrawal checks will be subject to Equity Planning's
rules governing checking accounts. You should make sure that there are
sufficient shares in your account to cover the amount of any check drawn. If
insufficient shares are in the account and the check is presented to Equity
Planning on a banking day on which the Fund does not redeem shares (for example,
a day on which the New York Stock Exchange is closed), or if the check is
presented against redemption proceeds of an investment made by check which has
not been in the account for at least fifteen calendar days, the check may be
returned marked "Non-sufficient Funds" and no shares will be redeemed. You may
not close your account by a withdrawal check because the exact value of the
account will not be known until after the check is received by Equity Planning.
TELEPHONE REDEMPTIONS
Shareholders who do not have certificated shares may redeem up to $50,000
worth of their shares by telephone. See the Funds' current Prospectus for
additional information.
REDEMPTION IN KIND
To the extent consistent with state and federal law, the Fund may make
payment of the redemption price either in cash or in kind. However, the Fund has
elected to pay in cash all requests for redemption by any shareholder of record,
limited in respect to each shareholder during any 90-day period to the lesser of
$250,000 or 1% of the net asset value of the Fund at the beginning of such
period. This election has been made pursuant to Rule 18f-1 under the Investment
Company Act of 1940 and is irrevocable
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<PAGE>
while the Rule is in effect unless the Securities and Exchange Commission, by
order, permits the withdrawal thereof. In case of a redemption in kind,
securities delivered in payment for shares would be readily marketable and
valued at the same value assigned to them in computing the net asset value per
share of the Fund. A shareholder receiving such securities would incur brokerage
costs when he sold the securities.
ACCOUNT REINSTATEMENT PRIVILEGE
Shareholders who may have overlooked features of their investment at the time
they redeemed have a privilege of reinvestment of their investment at net asset
value. See the Funds' current Prospectus for more information and conditions
attached to this privilege.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Fund is treated as a separate entity for federal income tax purposes.
Each Fund intends to continue to qualify as a regulated investment company
("RIC") under certain provisions of the Internal Revenue Code of 1986, as
amended (the "Code"). If a Fund so qualifies, it will not be subject to federal
income tax on the investment company taxable income (which includes dividends,
interest and the excess of net short-term capital gains over net long-term
capital losses) that it distributes to shareholders. To qualify for treatment as
a regulated investment company, a Fund generally must, among other things, (a)
derive in each taxable year at least 90% of its gross income from dividends,
interest, payments with respect to security loans and gains from the sale or
disposition of stock or securities or foreign currencies and other income
(including but not limited to gains from options, futures and forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies; and (b) meet certain diversification requirements imposed under the
Code at the end of each quarter of the taxable year. If in any taxable year the
Fund does not qualify as a regulated investment company, all of its taxable
income will be taxed at corporate rates.
Dividends paid by a Fund will be taxable to shareholders as ordinary income,
except for (a) such portion as may exceed a shareholder's ratable share of the
Fund's earnings and profits, which excess will be applied against and reduce the
shareholder's cost or other tax basis for his shares and (b) amounts
representing a distribution of net capital gains, if any, which are designated
by the Fund as capital gain dividends. If the amount described in (a) above
exceeds the shareholder's tax basis for his shares, the excess over basis will
be treated as gain from the sale or exchange of such shares. The excess of any
net long-term capital gains over net short-term capital losses recognized and
distributed by a Fund and designated by the Fund as a capital gain dividend, is
taxable to shareholders as long-term capital gain regardless of the length of
time a particular shareholder may have held his shares in the Fund. Dividends
and distributions are taxable as described, whether received in cash or
reinvested in additional shares of the Funds.
The Code imposes a 4% nondeductible excise tax on regulated investment
companies, such as the Funds, if a Fund does not distribute to its shareholders
(or is deemed not to have distributed) during the calendar year an amount equal
to 98% of the Fund's ordinary income, with certain adjustments, for such
calendar year, plus 98% of the Fund's capital gains net income (adjusted for
certain losses, as prescribed in the Code) for the 12-month period ending on
October 31 of such calendar year. In addition, an amount equal to any
undistributed investment company taxable income or capital gain net income from
the previous calendar year must also be distributed to avoid the excise tax. The
excise tax is imposed on the amount by which each regulated investment company
does not meet the foregoing distribution requirements.
The Code provides that any dividends declared by a Fund in October, November
or December of any calendar year to shareholders of record on a date in such
month will be deemed to have been received by a shareholder on December 31 of
that calendar year, provided that the dividend is actually paid by the Fund
during January of the following year.
Based on the foregoing, the Funds' policy will be to distribute to its
shareholders at least 90% of investment company taxable income and any net
realized capital gains for each year, so that the Funds generally will pay no
taxes on net investment income and net realized capital gains paid to
shareholders.
The Funds intend to declare dividends daily and to pay dividends monthly.
Dividends may be paid from net investment income. Distribution of net realized
short-term and long-term capital gains will be distributed at least annually.
Income dividends will be paid on the last business day of the month and
reinvested in additional shares at net asset value, unless the shareholder
elects to receive dividends in cash. Whether received in shares or cash,
dividends paid by a Fund from net investment income and distributions from any
net short-term capital gains are taxable to shareholders as ordinary income.
Distributions of net long-term capital gains, if any, realized on sales of
investments for the fiscal year normally will be distributed following the end
of the Funds' fiscal year. Distributions of net long-term capital gains are
taxable to shareholders as such, whether paid in cash or additional shares of a
Fund and regardless of the length of time the shares have been owned by the
shareholder. Net short-term capital gains are net realized short-term capital
gains, generally including net premiums from expired options, net gains from
closing purchase transactions, and net short-term gains from securities sold
upon the exercise of options or otherwise, less any net realized long-term
capital losses. Distributions paid by a Fund generally are subject to taxation
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as of the date of payment, whether received by shareholders in cash or in shares
of the Fund, and whether representing an ordinary distribution or a long-term
capital gains distribution. No dividends or distributions will be made to a
shareholder on shares for which no payment has been received.
It is not anticipated that any of the dividends paid by the Funds will
qualify for the 70% dividends received deduction available to corporate
shareholders of the Funds.
The Funds' investments in any regulated futures contracts, non-equity
options, or foreign currency contracts, as those terms are defined in the Code,
are considered section 1256 contracts. The principles of marking-to-market
generally apply to such contracts such that the contracts are treated as having
been sold for their fair market value on the last business day of a Fund's
taxable year. Generally, 60% of any net gain or loss recognized on the deemed
sale, as well as 60% of the gain or loss with respect to any actual termination
(including expiration), will be treated as long-term capital gain or loss and
the remaining 40% will be treated as short-term capital gain or loss.
Under the Code, gains or losses attributable to fluctuations in exchange
rates which occur between the time a Fund accrues interest or other receivables
or accrues expenses or other liabilities denominated in a foreign currency and
the time it actually collects such receivables or pays such liabilities
generally are treated as ordinary gain or loss. Similarly, on disposition of
debt securities denominated in a foreign currency and on disposition of certain
futures contracts, forward contracts and options, gains or losses attributable
to fluctuations in the value of the foreign currency between the date of
acquisition of the security or contract and the date of disposition also are
treated as ordinary gain or loss. These gains and losses, referred to under the
Code as section 988 gains or losses, may increase or decrease the amount of each
Fund's investment company taxable income to be distributed to its shareholders
as ordinary income.
Premiums from expired call options written by a Fund and net gain or loss
from closing purchase transactions, which are not section 1256 contracts, are
generally treated as short-term capital gain or loss for federal income tax
purposes and are taxable to shareholders as ordinary income. If a written call
option is exercised, the premium is added to the proceeds of sale of the
underlying security, and the gain or loss from such sale will be short- or
long-term, depending upon the period such security was held.
Certain offsetting positions held by the Funds (including certain positions
involving financial futures and options transactions) may be considered, for tax
purposes, to constitute "straddles." Depending on whether certain elections are
available and made by the Funds losses realized by the Funds on one or more
position in such a straddle may be deferred to the extent of unrealized gain in
the offsetting position. Moreover, short-term capital losses on straddle
positions may be re-characterized as long-term capital losses, and long-term
capital gains may be treated as short-term capital gains.
The tax consequences of certain investments and other activities that the
Funds may make or undertake (such as, but not limited to, dollar roll
agreements) are not entirely clear. While the Funds will endeavor to treat the
tax items arising from these transactions in a manner which it believes to be
appropriate, assurance cannot be given that the Internal Revenue Service or a
court will agree with the Funds' treatment and that adverse tax consequences
will not ensue.
The Funds may be subject to a tax on dividend or interest income received
from securities of non-U.S. issuers withheld by a foreign country at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Funds to a reduced rate of tax or exemption from tax on such
income. It is impossible to determine the effective rate of foreign tax in
advance since the amount of each Fund's assets to be invested within various
countries is not known. The Funds intend to operate so as to qualify for treaty
tax benefits where applicable.
It is expected that the Funds will not be eligible to elect to pass-through
to its shareholders the amount of foreign income and similar taxes paid by it,
so that shareholders will not be eligible to claim a foreign tax credit or to
deduct their pro rata share of such foreign taxes. Such foreign taxes generally
will reduce the net income of the Funds distributable to shareholders. If the
Funds were eligible to make the pass-through election, and so elected,
shareholders would be notified regarding the relevant items to be taken into
account by the shareholders.
Under the Code, a shareholder who does not fall within one of certain exempt
categories may be subject to backup withholding at the rate of 31% with respect
to dividends and capital gains distributions paid to shareholders or reinvested
by the Funds and other amounts distributed including proceeds of redemptions,
unless such shareholder provides a certified social security or taxpayer
identification number, certifies as to exemption from backup withholding, and
otherwise complies with applicable requirements of the Code. Backup withholding
is not an additional tax. Any amount withheld may be credited against the
shareholder's U.S. federal tax liability.
Sales and redemptions of shares of the Funds may result in gains or losses
for tax purposes to the extent of the difference between the proceeds from the
shares relinquished and the shareholder's adjusted tax basis for such shares. If
any shares have been held as a capital asset for more than one year, the gain or
loss realized will be long-term capital gain or loss. However, if a
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shareholder holds shares of a Fund for six months or less, any loss on the sale
of the shares will be treated as a long-term capital loss to the extent of the
long-term capital gains distributions received by such shareholder.
Under certain circumstances, the sales charge incurred in acquiring shares of
the Funds may not be taken into account in determining the gain or loss on the
disposition of those shares. This rule applies if shares of a Fund are exchanged
within 90 days after the date they were purchased and new shares of a regulated
investment company are acquired without a sales charge or at a reduced sales
charge. In that case, the gain or loss recognized on the exchange will be
determined by excluding from the tax basis of the shares exchanged all or a
portion of the amount of the sales charge incurred in acquiring those shares.
This exclusion applies to the extent that the otherwise applicable sales charge
with respect to the newly acquired shares is reduced as a result of having
incurred the sales charge initially. The portion of the sales charge affected by
this rule will be treated as an amount paid for the new shares.
Dividends, distributions and redemption proceeds also may be subject to
state, local and foreign taxes depending upon each shareholder's particular
situation. In addition, foreign shareholders may be subject to federal income
tax rules that differ from those described above. Shareholders are advised to
consult with their tax advisers or attorneys.
THE DISTRIBUTOR
Phoenix Equity Planning Corporation ("Equity Planning") acts as the
Distributor for the Funds and as such will conduct a continuous offering
pursuant to a "best efforts" arrangement requiring it to take and pay for only
such securities as may be sold to the public. Equity Planning is an indirect
less than wholly-owned subsidiary of Phoenix Home Life and an affiliate of the
Adviser. Shares of the Funds may be purchased through investment dealers who
have sales agreements with the Distributor. During the fiscal years ended
October 31, 1997, 1998 and 1999, purchasers of shares of the Multi-Sector Fixed
Income Fund paid aggregate sales charges of $1,111,355, $747,037 and $392,137,
respectively, of which the Distributor received net commissions of $481,975,
$281,876 and $248,168, respectively, for its services, the balance being paid to
dealers. For the fiscal year ended October 31, 1999, the Distributor received
net commissions of $18,370 for Class A Shares and deferred sales charges of
$229,798 for Class B and Class C Shares. During the fiscal years ended October
31, 1997, 1998, and 1999, purchasers of shares of the Multi-Sector Short Term
Bond Fund paid aggregate sales charges of $127,340, $95,205, and $62,529,
respectively, of which the principal underwriter received net commissions of
$19,763, $21,888, and $36,908, respectively, for its services, the balance being
paid to dealers. For the fiscal year ended October 31, 1999, the Distributor
received net commissions of $3,113 for Class A Shares and deferred sales charges
of $33,795 for Class B and Class C Shares.
The Underwriting Agreement may be terminated at any time on not more than 60
days written notice, without payment of a penalty, by the Distributor, by vote
of a majority of the outstanding voting securities of the Fund, or by vote of a
majority of the Fund's Trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of the
Distribution Plan or in any related agreements. The Underwriting Agreement will
terminate automatically in the event of its assignment.
DEALER CONCESSIONS
Dealers with whom the Distributor has entered into sales agreements receive a
discount or commission as described below:
FIXED INCOME FUND
<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF
---------------------------------------
AMOUNT OF NET DEALER DISCOUNT
TRANSACTION OFFERING AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 4.75% 4.99% 4.25%
$50,000 but under $100,000 4.50 4.71 4.00
$100,000 but under $250,000 3.50 3.63 3.00
$250,000 but under $500,000 2.75 2.83 2.25
$500,000 but under $1,000,000 2.00 2.04 1.75
$1,000,000 or more None None None
</TABLE>
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SHORT TERM BOND FUND
<TABLE>
<CAPTION>
SALES CHARGE AS
A PERCENTAGE OF
---------------------------------------
AMOUNT OF NET DEALER DISCOUNT
TRANSACTION OFFERING AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $50,000 2.25% 2.30% 2.00%
$50,000 but under $100,000 1.25 1.27 1.00
$100,000 but under $500,000 1.00 1.01 1.00
$500,000 but under $1,000,000 0.75 0.76 0.75
$1,000,000 or more None None None
</TABLE>
In addition to the dealer discount on purchases for Multi-Sector Fixed Income
Fund of Class A Shares, the Distributor intends to pay investment dealers a
sales commission of 4% of the sale price of Class B Shares and a sales
commission of 1% of the sale price of Class C Shares sold by such dealers. In
addition to the dealer discount on purchases for Short Term Bond Fund of Class A
Shares, the Distributor intends to pay investment dealers a sales commission of
2% of the sale price of Class B Shares sold by such dealers. This sales
commission will not be paid to dealers for sales of Class B or Class C Shares
purchased by 401(k) participants of the Merrill Lynch Daily K Plan due to a
waiver of the CDSC for these Plan participants' purchases. Your broker, dealer
or investment adviser may also charge you additional commissions or fees for
their services in selling shares to you provided they notify the Distributor of
their intention to do so.
Dealers and other entities who enter into special arrangements with the
Distributor may receive compensation for the sale and promotion of shares of the
Funds and/or for providing other shareholder services. Such fees are in addition
to the sales commissions referenced above and may be based upon the amount of
sales of fund shares by a dealer; the provision of assistance in marketing of
fund shares; access to sales personnel and information dissemination services;
provision of recordkeeping and administrative services to qualified employee
benefit plans; and other criteria as established by the Distributor. Depending
on the nature of the services, these fees may be paid either from the Funds
through distribution fees, service fees or transfer agent fees or, in some
cases, the Distributor may pay certain fees from its own profits and resources.
From its own profits and resources, the Distributor does intend to: (a) sponsor
training and educational meetings and provide additional compensation to
qualifying dealers in the form of trips, merchandise or expense reimbursements;
(b) from time to time pay special incentive and retention fees to qualified
wholesalers, registered financial institutions and third party marketers; (c)
pay broker/dealers an amount equal to 1% of the first $3 million of Class A
Share purchases by an account held in the name of a qualified employee benefit
plan with at least 100 eligible employees, 0.50% on the next $3 million, plus
0.25% on the amount in excess of $6 million; and (d) excluding purchases as
described in (c) above, pay broker/dealers an amount equal to 1% of the amount
of Class A Shares sold above $1 million but under $3 million, 0.50% on the next
$3 million, plus 0.25% on the amount in excess of $6 million; (e) subject to
certain exclusions, pay broker/dealers an amount equal to 0.50% of the amount of
Class C Shares sold above $250,000 but under $3 million plus 0.25% on the amount
in excess of $3 million. If part or all of such investment, including
investments by qualified employee benefit plans, is subsequently redeemed within
one year of the investment date, the broker-dealer will refund to the
Distributor such amounts paid with respect to the investment. In addition, the
Distributor may pay the entire applicable sales charge on purchases of Class A
Shares to selected dealers and agents. From its own resources, the Distributor
intends to pay the following additional compensation to Merrill Lynch, Pierce,
Fenner & Smith, Incorporated: 0.25% on sales of Class A and Class B Shares,
0.10% on sales of Class C Shares, 0.10% on sales of Class A shares sold at net
asset value, and 0.10% annually on the average daily net asset value of fund
shares on which Merrill Lynch is broker of record and which such shares exceed
the amounts of assets on which Merrill Lynch is broker of record as of July 1,
1999." Any dealer who receives more than 90% of a sales charge may be deemed to
be an "underwriter" under the Securities Act of 1933. Equity Planning reserves
the right to discontinue or alter such fee payment plans at any time.
From its own resources or pursuant to the Plan, and subject to the dealers'
prior approval, the Distributor may provide additional compensation to
registered representatives of dealers in the form of travel expenses, meals, and
lodging associated with training and educational meetings sponsored by the
Distributor. The Distributor may also provide gifts amounting in value to less
than $100, and occasional meals or entertainment, to registered representatives
of dealers. Any such travel expenses, meals, lodging, gifts or entertainment
paid will not be preconditioned upon the registered representatives' or dealers'
achievement of a sales target. The Distributor may, from time to time, reallow
the entire portion of the sales charge on Class A shares which it normally
retains to individual selling dealers. However, such additional reallowance
generally will be made only when the selling dealer commits to substantial
marketing support such as internal wholesaling through dedicated personnel,
internal communications and mass mailings.
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<PAGE>
ADMINISTRATIVE SERVICES
Equity Planning also acts as administrative agent of the Fund and as such
performs administrative, bookkeeping and pricing functions for the Fund. For its
services, Equity Planning will be paid a fee equal to the sum of (1) the
documented cost of fund accounting and related services provided by PFPC Inc.,
as subagent, plus (2) the documented cost to Equity Planning to provide
financial reporting and tax services and to oversee the subagent's performance.
The current fee schedule of PFPC Inc. is based upon the average of the aggregate
daily net asset values of the Fund, at the following incremental annual rates.
First $200 million .085%
$200 million to $400 million .05%
$400 million to $600 million .03%
$600 million to $800 million .02%
$800 million to $1 billion .015%
Greater than $1 billion .0125%
Percentage rates are applied to the aggregate daily net asset values of the
Fund. PFPC Inc. also charges minimum fees and additional fees for each
additional class of fund shares. Equity Planning retains PFPC Inc. as subagent
for each of the funds for which Equity Planning serves as administrative agent.
PFPC Inc. agreed to a modified fee structure and waived certain charges. Because
PFPC Inc.'s arrangement would have favored smaller funds over larger funds,
Equity Planning reallocates PFPC Inc.'s overall asset-based charges among all
funds for which it serves as administrative agent on the basis of the relative
net assets of each fund. As a result, the PFPC Inc. charges to the Fund are
expected to be slightly less than the amount that would be found through direct
application of the table illustrated above. For its services during the fiscal
year ended October 31, 1999, Equity Planning received $214,077 from the
Multi-Sector Fixed Income Fund and $76,005 from the Short Term Bond Fund.
DISTRIBUTION PLANS
The Trust has adopted a distribution plan for each class of shares (i.e., a
plan for the Class A Shares and a plan for the Class B Shares, collectively, the
"Plans") in accordance with Rule 12b-1 under the Act, to compensate the
Distributor for the services it provides and for the expenses it bears under the
Underwriting Agreement. Each class of shares pays a service fee at a rate of
0.25% per annum of the average daily net assets of such class of the Fund and a
distribution fee based on average daily net assets at the following rates: for
Class B Shares of the Multi-Sector Fixed Income Fund at a rate of 0.75% per
annum and 0.50% of the Multi-Sector Short Term Bond Fund; and for Class C Shares
at a rate of 0.75% of the Multi-Sector Fixed Income Fund and 0.25% of the
Multi-Sector Short Term Bond Fund.
From the Service Fee, the Distributor expects to pay a quarterly fee to
qualifying broker-dealer firms, as compensation for providing personal services
and/or the maintenance of shareholder accounts, with respect to shares sold by
such firms. This fee will not exceed on an annual basis 0.25% of the average
annual net asset value of such shares, and will be in addition to sales charges
on Fund shares which are reallowed to such firms. To the extent that the entire
amount of the Service Fee is not paid to such firms, the balance will serve as
compensation for personal and account maintenance services furnished by the
Distributor. The Distributor also pays to dealers, as additional compensation
with respect to Class C Shares, 0.75% for Fixed Income Fund and 0.25% for Short
Term Bond Fund, of the average annual net asset value of each class,
respectively.
In order to receive payments under the Plans, participants must meet such
qualifications to be established in the sole discretion of the Distributor, such
as services to the Fund's shareholders; or services providing the Fund with more
efficient methods of offering shares to coherent groups of clients, members or
prospects of a participant; or services permitting bulking of purchases or
sales, or transmission of such purchases or sales by computerized tape or other
electronic equipment; or other processing.
For the fiscal year ended October 31, 1999, the fund paid 12b-1 fees in the
amount of $1,526,052 ($355,679 under the Distribution Plan for Class A shares:
$1,099,295 under the Distribution Plan for Class B shares; and $71,078 under the
Distribution Plan for Class C shares), of which the Distributor of the Fund
received $949,721, W.S. Griffith & Co., Inc., an affiliate, received $47,437 and
unaffiliated broker-dealers received $528,894. The 12b-payments were used for:
(1) compensating dealers, $780,647. (2) compensating sales personnel, $373,701,
(3) advertising, $210,778, (4) printing and mailing prospectuses to other than
current shareholders, $14,511, (5) service cost, $62,797 and (6) other, $83,618.
For the Multi-Sector Short Term Bond Fund, for the fiscal year ended October
31, 1999, the Fund paid 12b-1 fees in the amount of $213,117 ($74,420 under the
Class A Plan; $88,111 under the Class B Plan and $50,586 under the Class C
Plan), of which the Distributor received $84,933, W.S. Griffith & Co., Inc., an
affiliate, received $18,127 and unaffiliated broker-dealers received $110,057.
The 12b-1 payments were used for (1) compensating dealers, $161,901, (2)
compensating sales personnel, $243,863, (3) advertising, $214,682, (4) printing
and mailing of prospectuses to other than current shareholders, $13,173, (5)
service costs, $42,797 and (6) other, $71,746.
25
<PAGE>
On a quarterly basis, the Fund's Trustees review a report on expenditures
under the Plans and the purposes for which expenditures were made. The Trustees
conduct an additional, more extensive review annually in determining whether the
Plans will be continued. By its terms, continuation of the Plans from year to
year is contingent on annual approval by a majority of the Fund's Trustees and
by a majority of the Trustees who are not "interested persons" (as defined in
the 1940 Act) and who have no direct or indirect financial interest in the
operation of the Plans or any related agreements (the "Plan Trustees"). The
Plans provides that they may not be amended to increase materially the costs
which the Fund may bear pursuant to the Plans without approval of the
shareholders of that class of the Fund and that other material amendments to the
Plans must be approved by a majority of the Plan Trustees by vote cast in person
at a meeting called for the purpose of considering such amendments. The Plans
further provide that while they are in effect, the selection and nomination of
Trustees who are not "interested persons" shall be committed to the discretion
of the Trustees who are not "interested persons." The Plans may be terminated at
any time by vote of the Plan Trustees or a majority of the outstanding shares of
the relevant class of the Fund.
The National Association of Securities Dealers, Inc. (the "NASD") regards
certain distribution fees as asset-based sales charges subject to NASD sales
load limits. The NASD's maximum sales charge rule may require the Trustees to
suspend distribution fees or amend the Plans.
MANAGEMENT OF THE FUNDS
The Funds are open-end management investment companies known as mutual funds.
The Trustees are responsible for the overall supervision of the operations of
the Trust and perform the duties imposed on Trustees by the 1940 Act and
Delaware business trust law.
TRUSTEES AND OFFICERS
The following table sets forth information concerning the Trustees and
executive officers of the Fund, including their principal occupations during the
past five years. Unless otherwise noted, the address of each executive officer
and Trustee is 56 Prospect Street, Hartford, Connecticut, 06115-0480.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Robert Chesek (66) Trustee Trustee/Director (1981-present) and Chairman (1989-1994), Phoenix
49 Old Post Road Funds. Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff &
Wethersfield, CT 06109 Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present).
E. Virgil Conway (71) Trustee Chairman, Metropolitan Transportation Authority (1992-present).
9 Rittenhouse Road Trustee/Director, Consolidated Edison Company of New York, Inc.
Bronxville, NY 10708 (1970-present), Pace University (1978-present), Atlantic Mutual
Insurance Company (1974-present), HRE Properties (1989-present),
Greater New York Councils, Boy Scouts of America (1985-present),
Union Pacific Corp. (1978-present), Blackrock Freddie Mac Mortgage
Securities Fund (Advisory Director) (1990-present), Centennial
Insurance Company (1974-present), Josiah Macy, Jr., Foundation
(1975-present), The Harlem Youth Development Foundation
(1987-present; Chairman, 1998-present), Accuhealth (1994-present),
Trism, Inc. (1994-present), Realty Foundation of New York
(1972-present), and New York Housing Partnership Development Corp.
(Chairman) (1981-present). Vice Chairman, The Academy of Political
Science (1985-present). Director/Trustee, Phoenix Funds
(1993-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present). Director, Duff & Phelps
Utilities Tax-Free Income Inc. and Duff & Phelps Utility and
Corporate Bond Trust Inc. (1995-present). Chairman/Member, Audit
Committee of the City of New York (1981-1996). Advisory Director,
Blackrock Fannie Mae Mortgage Securities Fund (1989-1996) and Fund
Directions (1993-1998).
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Harry Dalzell-Payne (71) Trustee Director/Trustee, Phoenix Funds (1983-present). Trustee,
The Flat Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Elmore Court Mutual Funds (1996-present) and Phoenix-Seneca Funds
Elmore, G105, 962 3NT (1999-present). Director, Duff & Phelps Utilities Tax-Free Income
UK Inc. and Duff & Phelps Utility and Corporate Bond Trust Inc.
(1995-present). Formerly a Major General of the British Army.
*Francis E. Jeffries (69) Trustee Director/Trustee, Phoenix Funds (1995-present). Trustee,
8477 Bay Colony Dr. Phoenix-Aberdeen Series Inc., Phoenix Duff & Phelps Institutional
#902 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Naples, FL 34108 (2000-present). Director, Duff & Phelps Utilities Income Inc.
(1987-present), Duff & Phelps Utilities Tax-Free Income Inc.
(1991-present) and Duff & Phelps Utility and Corporate Bond Trust
Inc. (1993-present). (1984-present). Director (1989-1997),
Chairman of the Board (1993-1997), President (1989-1993), and
Chief Executive Officer (1989-1995), Phoenix Investment Partners,
Ltd.
Leroy Keith, Jr. (61) Trustee Chairman (1995-present) and Chief Executive Officer (1995-1999),
Chairman Carson Products Company. Director/Trustee, Phoenix Funds
Carson Products Company (1980-present). Trustee, Phoenix-Aberdeen Series Fund, Phoenix
64 Ross Road Duff & Phelps Institutional Mutual Funds (1996-present) and
Savannah, GA 30750 Phoenix-Seneca Funds (2000-present). Director, Equifax Corp.
(1991-present) and Evergreen International Fund, Inc.
(1989-present). Trustee, Evergreen Liquid Trust, Evergreen Tax
Exempt Trust, Evergreen Tax Free Fund, Master Reserves Tax Free
Trust, and Master Reserves Trust.
*Philip R. McLoughlin (53) Trustee and Chairman (1997-present), Director (1995-present), Vice Chairman
56 Prospect Street President (1995-1997) and Chief Executive Officer (1995-1997), Phoenix
Hartford, CT 06115 Investment Partners, Ltd. Director (1994-present) and Executive
Vice President, Investments (1988-present), Phoenix Home Life
Mutual Insurance Company. Director/Trustee and President, Phoenix
Funds (1989-present). Trustee and President, Phoenix-Aberdeen
Series Fund and Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present). Director, Duff & Phelps Utilities Tax-Free Income
Inc. (1995-present) and Duff & Phelps Utility and Corporate Bond
Trust Inc. (1995-present). Trustee, Phoenix-Seneca Funds
(1999-present). Director (1983-present) and Chairman
(1995-present), Phoenix Investment Counsel, Inc. Director
(1984-present) and President (1990-present), Phoenix Equity
Planning Corporation. Chairman and Chief Executive Officer,
Phoenix/Zweig Advisers LLC (1999-present). Director, PXRE
Corporation (Delaware) (1985-present), and World Trust Fund
(1991-present). Director and Executive Vice President, Phoenix
Life and Annuity Company (1996-present). Director and Executive
Vice President, PHL Variable Insurance Company (1995-present).
Director, Phoenix Charter Oak Trust Company (1996-present).
Director and Vice President, PM Holdings, Inc. (1985-present).
Director and President Phoenix Securities Group, Inc. (1993-1995).
Director, (1992-present) and President (1992-1994), W.S. Griffith
& Co., Inc. Director, PHL Associates, Inc. (1995-present).
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Everett L. Morris (72) Trustee Vice President, W.H. Reaves and Company (1993-present).
164 Laird Road Director/Trustee, Phoenix Funds (1995-present). Trustee, Duff &
Colts Neck, NJ 07722 Phelps Mutual Funds (1994-present). Trustee, Phoenix-Aberdeen
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1996-present) and Phoenix-Seneca Funds (2000-present). Director,
Duff & Phelps Utilities Tax-Free Income Inc. (1991-present) and
Duff & Phelps Utility and Corporate Bond Trust Inc. (1993-present).
*James M. Oates (54) Trustee Chairman, IBEX Capital Markets, Inc. (formerly IBEX Capital
Managing Director Markets LLC) (1997-present). Managing Director, Wydown Group
The Wydown Group (1994-present). Director, Phoenix Investment Partners, Ltd.
IBEX Capital Markets, Inc. (1995-present). Director/Trustee, Phoenix Funds (1987-present).
60 State Street Trustee, Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps
Suite 950 Institutional Mutual Funds (1996-present) and Phoenix-Seneca
Boston, MA 02109 Funds (2000 present). Director, AIB Govett Funds (1991-present),
Investors Financial Service Corporation (1995-present), Investors
Bank & Trust Corporation (1995-present), Plymouth Rubber Co.
(1995-present), Stifel Financial (1996-present), Command Systems,
Inc. (1998-present), Connecticut River Bancorp (1998-present) and
Endowment for Health (1999-present). Member, Chief Executives
Organization (1996-present). Vice Chairman, Massachusetts Housing
Partnership (1992-2000). Director, Blue Cross and Blue Shield of
New Hampshire (1994-1999).
Herbert Roth, Jr. (71) Trustee Director/Trustee, Phoenix Funds (1980-present). Trustee,
134 Lake Street Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
P.O. Box 909 Mutual Funds (1996-present) and Phoenix-Seneca Funds
Sherborn, MA 01770 (2000-present). Director, Boston Edison Company (1978-present),
Landauer, Inc. (medical services) (1970-present), Tech
Ops./Sevcon, Inc. (electronic controllers) (1987-present), and
Mark IV Industries (diversified manufacturer) (1985-present).
Member, Directors Advisory Counsel, Phoenix Home Life Mutual
Insurance Company (1998-present). Director, Phoenix Home Life
Mutual Insurance Company (1972-1998).
Richard E. Segerson (54) Trustee Managing Director, Northway Management Company (1998- present).
102 Valley Road Director/Trustee, Phoenix Funds (1993-present). Trustee,
New Canaan, CT 07840 Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Managing Director, Mullin Associates (1993-1998).
Lowell P. Weicker, Jr. (69) Trustee Trustee/Director, Phoenix Funds (1995-present). Trustee,
731 Lake Avenue Phoenix-Aberdeen Series Fund, Phoenix Duff & Phelps Institutional
Greenwich, CT 06830 Mutual Funds (1996-present) and Phoenix-Seneca Funds
(2000-present). Director, UST Inc. (1995-present), HPSC Inc.
(1995-present), Compuware (1996-present) and Burroughs Wellcome
Fund (1996-present). Visiting Professor, University of Virginia
(1997-present). Director, Duty Free International, Inc. (1997).
Chairman, Dresing, Lierman, Weicker (1995-1996). Governor of the
State of Connecticut (1991-1995).
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Michael E. Haylon (42) Executive Director and Executive Vice President-Investments, Phoenix
Vice Investment Partners, Ltd. (1995-present). Director (1994-present),
President President (1995-present), and Executive Vice President
(1994-1995), Phoenix Investment Counsel, Inc. Director, Phoenix
Equity Planning Corporation (1995-present). Executive Vice
President, Phoenix Funds (1995-present), Phoenix-Aberdeen Series
Fund (1996-present) and Phoenix-Seneca Funds (2000-present).
Executive Vice President (1997-present), Vice President
(1996-1997), Phoenix Duff & Phelps Institutional Mutual Funds.
Senior Vice President, Securities Investments, Phoenix Home Life
Mutual Insurance Company (1993-1995).
John F. Sharry (47) Executive President, Retail Division (1999-present), Executive Vice
Vice President, Retail Division (1997-1999), Phoenix Investment
President Investment Partners, Ltd. Managing Director, Retail Distribution,
Phoenix Equity Planning Corporation (1995-present). Executive Vice
President, Phoenix Funds, Phoenix-Aberdeen Series Funds (1998-
present) and Phoenix-Seneca Funds (2000-present). Managing
Director, Director and National Sales Manager, Putnam Mutual Funds
(until 1995).
James D. Wehr (42) Senior Vice Senior Vice President, Fixed Income (1998-present), Managing
President Director, Fixed Income, (1996-1998), Vice President (1991-1996),
Phoenix Investment Counsel, Inc. Senior Vice President
(1997-present), Vice President (1988-1997), Phoenix Multi-Portfolio
Fund; Senior Vice President (1997-present), Vice President
(1990-1997), Phoenix Series Fund; Senior Vice President
(1997-present), Vice President (1991-1997), The Phoenix Edge Series
Fund; Senior Vice President (1997-present), Vice President
(1993-1997), Phoenix-Goodwin California Tax Exempt Bonds, Inc.;
Senior Vice President (1997-present), Vice President (1996-1997),
Phoenix Duff & Phelps Institutional Mutual Funds; and Senior Vice
President, Phoenix-Goodwin Multi-Sector Short Term Bond Fund,
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Phoenix-Oakhurst
Income & Growth Fund and Phoenix-Oakhurst Strategic Allocation Fund
(1997-present). Senior Vice President and Chief Investment Officer,
Duff & Phelps Utilities Tax Free Income Inc. (1997-present).
Managing Director, Public Fixed Income, Phoenix Home Life Insurance
Company (1991-1995).
David L. Albrycht (38) Vice Managing Director, Fixed Income (1996-present), Vice President
President (1995-1996), Phoenix Investment Counsel, Inc. Vice President,
Phoenix Multi-Portfolio Fund (1993-present), Phoenix-Goodwin
Multi-Sector Short Term Bond Fund (1993-present), Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc. (1994-present). Portfolio
Manager, Phoenix Home Life Mutual Insurance Company (1989-1995).
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE WITH THE FUND DURING THE PAST 5 YEARS
--------------------- ------------- -----------------------
<S> <C> <C>
Robert S. Driessen (53) Vice President Vice President and Compliance Officer, Phoenix Investment
and Assistant Partners, Ltd. (1999-present) and Phoenix Investment Counsel, Inc.
Secretary (1999-present). Vice President, Phoenix Funds, Phoenix-Aberdeen
Series Fund, Phoenix Duff & Phelps Institutional Mutual Funds
(1999-present) and Phoenix-Seneca Funds (2000-present). Compliance
Officer (2000-present) and Associate Compliance Officer (1999),
PXP Securities Corporation. Vice President, Risk Management
Liaison, Bank of America (1996-1999). Vice President, Securities
Compliance, The Prudential Insurance Company of America
(1993-1996). Branch Chief/Financial Analyst, Securities and
Exchange Commission, Division of Investment Management (1972-1993).
William R. Moyer (55) Vice Executive Vice President and Chief Financial Officer
100 Bright Meadow Blvd. President (1999-present), Senior Vice President and Chief Financial Officer
P.O. Box 2200 (1995-1999), Phoenix Investment Partners, Ltd. Director
Enfield, CT 06083-2200 (1998-present), Senior Vice President (1990-present), Chief
Financial Officer (1996-present), Finance (until 1996) and
Treasurer (1994-1996 and 1998-present), Phoenix Equity Planning
Corporation. Director (1998-present), Senior Vice President
(1990-present), Chief Financial Officer (1996-present), Finance
(until 1996) and Treasurer (1994-present), Phoenix Investment
Counsel, Inc. Vice President, Phoenix Funds (1990-present),
Phoenix Duff & Phelps Institutional Mutual Funds (1996-present)
and Phoenix-Aberdeen Series Fund (1996-present). Executive Vice
President, Phoenix-Seneca Funds (2000-present). Senior Vice
President and Chief Financial Officer, Phoenix Duff & Phelps
Investment Management Co. (1996-present). Vice President,
Investment Products Finance, Phoenix Home Life Mutual Insurance
Company (1990-1995). Senior Vice President and Chief Financial
Officer (1993-1995) and Treasurer (1994-1995), W.S. Griffith &
Co., Inc. and Townsend Financial Advisors, Inc. Senior Vice
President, Finance Phoenix Securities Group, Inc. (1993-1995).
Senior Vice President and Chief Financial Officer and W.S.
Griffith & Co., Inc. (1992-1995) and Townsend Financial Advisers,
Inc. (1993-1995).
Nancy G. Curtiss (47) Treasurer Treasurer (1996-present), Vice President, Fund Accounting
(1994-1996), Phoenix Equity Planning Corporation. Treasurer,
Phoenix Funds (1994-present), Phoenix-Aberdeen Series Fund
(1996-present), Phoenix Duff & Phelps Institutional Mutual Funds
(1995-present) and Phoenix-Seneca Funds (2000-present). Second
Vice President and Treasurer, Fund Accounting, Phoenix Home Life
Mutual Insurance Company (1994-1995). Various positions with
Phoenix Home Life Insurance Company (1987-1994).
G. Jeffrey Bohne (52) Secretary Vice President and General Manager, Phoenix Home Life Mutual
101 Munson Street Insurance Co. (1993-present). Senior Vice President
Greenfield, MA 01301 (1999-present), Vice President, Mutual Fund Customer Service
(1996-1999), Vice President, Transfer Agency Operations
(1993-1996), Phoenix Equity Planning Corporation. Secretary/Clerk,
Phoenix Funds (1993-present), Phoenix-Aberdeen Series Fund, Phoenix
Duff & Phelps Institutional Mutual Funds (1996-present) and
Phoenix-Seneca Funds (2000-present).
</TABLE>
----------------
*Messrs. Jeffries, McLoughlin, Oates and Pedersen are "interested persons" of
the Fund within the meaning of the definition set forth in Section 2(a)(19) of
the 1940 Act.
30
<PAGE>
For services rendered to the Fund for the fiscal year ended October 31, 1999,
the Trustees received aggregate remuneration of $12,865. For services on the
Boards of Directors/Trustees of the Phoenix Funds, each Trustee who is not a
full-time employee of the Adviser or any of its affiliates currently receives a
retainer at the annual rate of $40,000 and a fee of $2,500 per joint meeting of
the Boards. Each Trustee who serves on the Audit Committee receives a retainer
at the annual rate of $2,000 and a fee of $2,000 per joint Audit Committee
meeting attended. Each Trustee who serves on the Nominating Committee receives a
retainer at the annual rate of $1,000 and a fee of $1,000 per joint Nominating
Committee meeting attended. Each Trustee who serves on the Executive Committee
and who is not an interested person of the Fund receives a retainer at the
annual rate of $2,000 and $2,000 per joint Executive Committee meeting attended.
The function of the Executive Committee is to serve as a contract review,
compliance review and performance review delegate of the full Board of Trustees.
The foregoing fees do not include the reimbursement of expenses incurred in
connection with meeting attendance. Trustees costs are allocated equally to each
of the Series and Funds within the Fund complex. Officers and employees of the
Adviser who are interested persons are compensated by the Adviser and receive no
compensation from the Fund.
For the Funds' last fiscal year ending October 31, 1999, the Trustees
received the following compensation:
<TABLE>
<CAPTION>
AGGREGATE TOTAL
AGGREGATE COMPENSATION PENSION OR COMPENSATION
COMPENSATION FROM RETIREMENT FROM FUND AND
FROM MULTI- MULTI-SECTOR BENEFITS ESTIMATED FUND COMPLEX
SECTOR FIXED SHORT TERM ACCRUED AS PART ANNUAL BENEFITS (31 FUNDS)
NAME INCOME FUND BOND FUND OF FUND EXPENSES UPON RETIREMENT PAID TO DIRECTORS
---- ----------- --------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C> <C>
Robert Chesek $1,160 $1,160 $64,000
E. Virgil Conway+ $1,500 $1,500 $83,250
Harry Dalzell-Payne+ $1,360 $1,360 $95,250
Francis E. Jeffries $1,100* $1,100* $61,000
Leroy Keith, Jr. $1,160 $1,160 None None $64,000
Philip R. McLoughlin+ $ 0 $ 0 for any for any $ 0
Everett L. Morris+ $1,300 $1,300 Trustee Trustee $73,000
James M. Oates+ $1,300 $1,300 $72,250
Herbert Roth, Jr.+ $1,435* $1,435* $78,500
Richard E. Segerson $1,300* $1,300* $72,000
Lowell P. Weicker, Jr. $1,250 $1,250 $68,500
</TABLE>
---------------
*This compensation (and the earnings thereon) was deferred pursuant to the
Trustees' Deferred Compensation Plan. At September 30, 2000 the total amount of
deferred compensation (including interest and other accumulation earned on the
original amounts deferred) accrued for Messrs. Jeffries, Morris, Roth and
Segerson was $547,732.52, $210,498.92, $178,770.56 and $129,978.47,
respectively. At present, by agreement among the Fund, the Distributor and the
electing trustee, trustee fees that are deferred are paid by the Fund to the
Distributor. The liability for the deferred compensation obligation appears only
as a liability of the Distributor.
+Messrs. Conway, Dalzell-Payne, McLoughlin, Morris, Oates and Roth are
members of the Executive Committee.
On October 17, 2000, the Trustees and officers of the Fund beneficially owned
less than 1% of the outstanding shares of the Fund.
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of October 18, 2000 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially own 5% or more of any class of a Fund's equity
securities.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF CLASS NUMBER OF SHARES
------------------- -------------- -------------------- ----------------
<S> <C> <C> <C>
Trustees of Phoenix SIP Short Term Bond Fund 5.13% 260,523.560
C/O Suzette Louro - HR Class A
100 Bright Meadow Blvd.
Enfield, CT 06083
Phoenix Charter Oak Trust Co. Short Term Bond Fund 11.43% 581,052.581
38 Prospect Street Class A
Hartford, CT 06103-2814
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER FUND AND CLASS PERCENTAGE OF CLASS NUMBER OF SHARES
------------------- -------------- -------------------- ----------------
<S> <C> <C> <C>
MLPF&S Short Term Bond Fund 11.12% 219,897.419
For the Sole Benefit of its Customers Class B
Attn: Fund Administration
4800 Deer Lake Drive East, 3rd Fl.
Jacksonville, FL 32246-6484
Harris Baking Company Money Short Term Bond Fund 5.22% 83,270.366
Purchase Pension Plan Class C
Bill Suggs, Tom Galyen &
Doug Garard TTEES
P.O. Box 129
Rogers, AR 72757-0129
MLPF&S Fixed Income Fund 17.66% 1,089,958.660
For the Sole Benefit of its Customers Class B 14.73% 87,628.148
Attn: Fund Administration Fixed Income Fund
4800 Deer Lake Drive East, 3rd Fl. Class C
Jacksonville, FL 32246-6484
</TABLE>
OTHER INFORMATION
CAPITAL STOCK
The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest. The Trust currently offers shares in different
Funds and different classes of those Funds. Holders of shares of a Fund have
equal rights with regard to voting, redemptions, dividends, distributions, and
liquidations with respect to that Fund. Shareholders of all Funds vote on the
election of Trustees. On matters affecting an individual Fund (such as approval
of an investment advisory agreement or a change in fundamental investment
policies) and on matters affecting an individual class (such as approval of
matters relating to a Plan of Distribution for a particular class of shares), a
separate vote of that Fund or Class is required. The Trust does not hold regular
meetings of shareholders. The Trustees will call a meeting when at least 10% of
the outstanding shares so request in writing. If the Trustees fail to call a
meeting after being so notified, the Shareholders may call the meeting. The
Trustees will assist the Shareholders by identifying other shareholders or
mailing communications, as required under Section 16(c) of the 1940 Act.
Shares are fully paid, nonassessable, redeemable and fully transferable when
they are issued. Shares do not have cumulative voting rights, preemptive rights
or subscription rights. The assets received by the Trust for the issue or sale
of shares of each Fund, and any class thereof and all income, earnings, profits
and proceeds thereof, are allocated to such Fund, and class, respectively,
subject only to the rights of creditors, and constitute the underlying assets of
such Fund or class. The underlying assets of each Fund are required to be
segregated on the books of account, and are to be charged with the expenses in
respect to such Fund and with a share of the general expenses of the Trust. Any
general expenses of the Trust not readily identifiable as belonging to a
particular Fund or class will be allocated by or under the direction of the
Trustees as they determine fair and equitable.
Unlike the stockholders of a corporation, there is a possibility that the
shareholders of a business trust such as the Trust may be personally liable for
debts or claims against the Trust. The Declaration of Trust provides that
shareholders shall not be subject to any personal liability for the acts or
obligations of the Trust. The Declaration of Trust provides for indemnification
out of the Trust property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability, which
is considered remote, is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110, has been
selected as independent accountants for the Fund. PricewaterhouseCoopers LLP
audits the Fund's annual financial statements and expresses an opinion thereon.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company, P.O. Box 8301, Boston, MA 02266-8301,
serves as the Fund's custodian.
Phoenix Equity Planning Corporation, 100 Bright Meadow Boulevard, P.O. Box
2200, Enfield, CT 06083-2200, serves as the Fund's transfer agent. As
compensation, Equity Planning receives a fee equivalent to $22.25 for each
designated shareholder
32
<PAGE>
account plus out-of-pocket expenses. Transfer Agent fees are also utilized to
offset costs and fees paid to subtransfer agents employed by Equity Planning.
State Street Bank and Trust Company serves as a subtransfer agent pursuant to a
Subtransfer Agency Agreement.
REPORTS TO SHAREHOLDERS
The fiscal year of the Funds ends on October 31. The Fund will send financial
statements to the shareholders at least semiannually. An annual report,
containing financial statements audited by the Fund's independent accountants,
will be sent to shareholders each year.
FINANCIAL STATEMENTS
The financial statements for the Fund's fiscal year ended October 31, 1999
appearing in the Fund's Annual Report to Shareholders, and financial statement
for the six months ended April 30, 2000 appearing in the Fund's Semiannual
Report to Shareholders, are incorporated herein by reference.
33
<PAGE>
APPENDIX
DESCRIPTION OF CERTAIN BOND RATINGS
MOODY'S INVESTOR'S SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations;
i.e., they are neither highly protective nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Note: Those bonds in the Aa, A and Baa groups which Moody's believes possess
the strongest investment attributes are designated by the symbols Aa1, A1 and
Baa1.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safe guarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal and
interest.
STANDARD & POOR'S CORPORATION
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
BB, B, CCC: Bonds rated BB, B, CCC are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with terms of the obligation. BB indicates the lowest degree of
speculation and CCC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties of major risk exposure to adverse conditions.
DUFF & PHELPS CREDIT RATING CO.
Duff & Phelps Credit Rating Co. ("D&P") is an unaffiliated Nationally
Recognized Statistical Rating Organization by the SEC as well as State
Commissions and insurance regulatory bodies. Ratings qualify for SEC Rule 2a-7
provisions and broker/dealer capital computation guidelines on commercial paper
inventory. D&P ratings also qualify for NAIC rating designations and for ERISA
guidelines governing asset-backed securities as stated by the Department of
Labor.
34
<PAGE>
RATING SCALE:
D&P offers ratings for short-term and long-term debt, preferred stock,
structured financings, and insurer's claims paying ability. D&P ratings are
specific to credit quality, i.e., the likelihood of timely payment for
principal, interest, and in the case of a preferred stock rating, preferred
stock dividends. The insurance company claims paying ability ratings reflect an
insurer's ability to meet its claims obligations.
LONG-TERM RATINGS
----------------------------------------------------------------------
AAA Highest Quality
AA+, AA, AA High Quality
A+, A, A Good Quality
BBB+, BBB, BBB Satisfactory Quality (investment grade)
BB+, BB, BB Non-Investment Grade
B+, B, B- Non-Investment Grade
CCC Speculative
SHORT-TERM RATINGS
----------------------------------------------------------------------
Duff 1+
Duff 1 X A-1/P-1
Duff 1-
Duff 2 A-2/P-2
Duff 3 A-3/P-3
Duff 4 Non-Investment Grade
Duff 5 Defaulted
FITCH INVESTOR SERVICES, INC.
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA". Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated "F-1+."
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of
a project or the occurrence
of a specific event.
SUSPENDED: A rating is suspended when Fitch deems the amount of information
available from the issuer to
be inadequate for rating purposes.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or
refinanced and, at Fitch's discretion, when an issuer fails to furnish proper
and timely information.
FITCHALERT: Ratings are placed on FitchAlert to notify investors of an
occurrence that is likely to result in a rating change and the likely direction
of such change. These are designated as "Positive", indicating a potential
upgrade; "Negative"; for potential downgrade, or "Evolving", where ratings may
be raised or lowered. FitchAlert is relatively short-term, and would be resolved
within 12 months.
35
<PAGE>
CREDIT TREND: Credit Trend indicators show whether credit fundamentals are
improving, stable, declining or
uncertain, as follows:
Improving
Stable
Declining
Uncertain
Credit Trend indicators are not predictions that any rating change will
occur, and have a longer-term time frame than issues placed on FitchAlert.
Fitch speculative grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
("BB" to "C") represent Fitch's assessment of the likelihood of timely payment
of principal and interest in accordance with the terms of obligation for bond
issuers not in default. For defaulted bonds, the rating ("DDD" to "D") is an
assessment of the potential recovery value through reorganization or
liquidation.
The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor as
well as the economic and political environment, that might affect the issuer's
futures financial strength.
Bonds that have the same rating are of similar but not necessarily identical
credit quality since rating categories cannot fully reflect the differences in
degrees of credit risk.
BB: Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
CCC: Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery on these bonds, and "D" represents
the lowest potential for recovery.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs however, are not used in the "DDD", "DD", or "D" categories.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
Fitch's short-term ratings are as follows:
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-l+."
F-2: Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned "F-1+" and "F-1" ratings.
F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate, however,
near-term adverse changes could cause these securities to be rated below
investment grade.
36
<PAGE>
F-5: Weak Credit Quality. Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are vulnerable
to near-term adverse changes in financial and economic conditions.
D: Default. Issues assigned this rating are in actual or imminent payment
default.
LOC: The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.
37
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
INVESTMENTS AT APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--0.1%
U.S. TREASURY BONDS--0.1%
U.S. Treasury Bonds 6.25%, 5/15/30...... AAA $ 250 $ 260,072
- ---------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $271,948) 260,072
- ---------------------------------------------------------------------------
MUNICIPAL BONDS--7.2%
CALIFORNIA--2.7%
Fresno Pension Obligation Taxable 7.80%,
6/1/14.................................. AAA 500 510,000
Oakland Pension Obligation Taxable
Series A 6.95%, 12/15/08................ AAA 3,200 3,084,000
Pasadena Pension Funding Revenue Taxable
Series A 7.10%, 5/15/10................. AAA 1,900 1,843,000
------------
5,437,000
------------
CONNECTICUT--1.2%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.57%,
9/1/13(b)............................... AAA 1,075 991,688
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 6.91%, 9/1/12.. AAA 1,400 1,338,750
------------
2,330,438
------------
FLORIDA--1.0%
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20.......... AAA 2,000 1,937,500
ILLINOIS--1.0%
Illinois Educational Facilities
Authority-Loyola University Revenue
Taxable Series A 7.84%, 7/1/24.......... AAA 2,000 1,972,500
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
PENNSYLVANIA--1.3%
Pittsburgh Pension General Obligation
Taxable Series B 6.35%, 3/1/13.......... AAA $ 3,000 $ 2,703,750
- ---------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $15,203,761) 14,381,188
- ---------------------------------------------------------------------------
ASSET-BACKED SECURITIES--5.4%
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. BBB- 8,495 7,018,994
Green Tree Financial Corp. 94-1, B2
7.85%, 4/15/19.......................... Baa(c) 2,000 1,930,830
Pennant CBO Ltd. 1A, D 13.43%,
3/14/11................................. Ba(c) 2,000 1,963,437
- ---------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $12,568,410) 10,913,261
- ---------------------------------------------------------------------------
CORPORATE BONDS--21.4%
AEROSPACE/DEFENSE--0.5%
BE Aerospace, Inc. 9.50%, 11/1/08....... B 1,250 1,087,500
BROADCASTING (TELEVISION, RADIO & CABLE)--0.2%
Century Communications Corp. 8.75%,
10/1/07................................. BB- 500 460,000
COMMUNICATIONS EQUIPMENT--3.8%
Earthweb 7%, 1/25/05.................... NR 1,500 900,000
Metromedia Fiber Network, Inc. Series B
10%, 11/15/08........................... B+ 2,000 1,910,000
Metromedia Fiber Network, Inc. 10%
12/15/09 (h)............................ B+ 2,000 1,772,387
Williams Communications Group, Inc.
10.875%, 10/1/09........................ BB- 3,000 3,030,000
------------
7,612,387
------------
COMPUTERS (NETWORKING)--0.7%
Psinet Inc. 11%, 8/1/09................. B- 1,500 1,327,500
</TABLE>
2 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.0%
Horseshoe Gaming LLC Series B 9.375%,
6/15/07................................. B+ $ 1,500 $ 1,466,250
Mohegan Tribal Gaming 8.125%, 1/1/06.... BB 500 472,500
------------
1,938,750
------------
INSURANCE (MULTI-LINE)--3.4%
Middletown Trust Series C 11.75%,
7/15/10(j).............................. A+ 6,485 6,809,314
LEISURE TIME (PRODUCTS)--0.6%
Bally Total Fitness Holding Corp. Series
D 9.875%, 10/15/07...................... B- 1,250 1,150,000
RETAIL (SPECIALTY)--0.9%
Musicland Group, Inc. 9%, 6/15/03....... B 2,000 1,800,000
SERVICES (COMMERCIAL & CONSUMER)--1.4%
ARA Services, Inc. 10.625%, 8/1/00...... BBB- 28 28,105
IT Group, Inc. (The) 11.25%, 4/1/09..... B+ 1,665 1,506,825
Service Corp. International 7.20%,
6/1/06.................................. BB+ 2,200 1,309,000
------------
2,843,930
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.0%
VoiceStream Wireless Holdings 144A
10.375%, 11/15/09(b).................... B- 2,000 2,040,000
TELECOMMUNICATIONS (LONG DISTANCE)--6.4%
Interamericas Communications Corp. 14%,
10/27/07................................ NR 4,420 4,663,100
Level 3 Communications, Inc. 144A
10.75%, 3/15/08(b)(h)................... B 2,000 1,754,162
Metromedia International Group, Inc.
10.50%, 10/1/07......................... NR 756 355,111
NTL Communications Corp. Series B 9.25%,
11/15/06................................ B- 3,000 2,658,581
RCN Corp. Series B 0%, 2/15/08(d)....... B- 5,775 3,450,563
------------
12,881,517
------------
TELEPHONE--0.6%
Teligent, Inc. 11.50%, 12/1/07.......... CCC 1,500 1,297,500
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
TEXTILES (APPAREL)--0.9%
Collins & Aikman Products Co. 11.50%,
4/15/06................................. B $ 1,750 $ 1,723,750
- ---------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $47,563,044) 42,972,148
- ---------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--25.7%
Commercial Mortgage Asset Trust 99-C1 D
7.35%, 10/17/13......................... BBB 3,500 3,187,188
Criimi Mae Trust I 96-C1, A2 7.56%,
6/30/33................................. BBB 5,125 4,783,867
CS First Boston Mortgage Securities
Corp. 97-SPCE C 7.077%, 2/20/07......... A+(c) 4,000 3,826,250
CS First Boston Mortgage Securities
Corp. 98-C2, E 7.13%, 1/15/12........... Baa(c) 4,000 3,376,875
CS First Boston Mortgage Securities
Corp. 97-1R, 1M4 7.583%, 2/28/22........ Baa(c) 4,668 4,313,252
DLJ Mortgage Acceptance Corp. 97-CF2, B2
7.14%, 11/15/08......................... BBB- 4,000 3,563,750
First Boston Mortgage Securities Corp.
93-5, B2 7.30%, 7/25/23................. A+(c) 2,749 2,655,220
First Chicago/Lennar Trust 97-CHL1, D
8.055%, 5/29/08......................... BB(c) 4,000 3,281,875
Mortgage Capital Funding, Inc. 98-MC2, B
6.549%, 5/18/08......................... Aa(c) 2,500 2,316,406
Norwest Asset Securities Corp. 96-3, B1
7.25%, 9/25/26.......................... AA+(c) 3,372 3,173,625
Norwest Asset Securities Corp. 96-3, B2
7.25%, 9/25/26.......................... A(c) 2,249 2,098,384
Norwest Asset Securities Corp. 97-18, B2
6.75%, 12/25/27......................... BBB(c) 1,024 926,425
Norwest Asset Securities Corp. 98-2, B1
6.50%, 2/25/28.......................... A(c) 2,935 2,621,290
Norwest Asset Securities Corp. 98-22, B3
6.25% 9/25/28........................... BBB(c) 615 534,702
</TABLE>
See Notes to Financial Statements 3
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
Norwest Asset Securities Corp. 99-3, B3
6%, 1/25/29............................. BBB(c) $ 740 $ 629,742
Norwest Asset Securities Corp. 99-6, B3
6%, 3/25/29............................. BBB(c) 433 368,768
Norwest Asset Securities Corp. 99-12, B3
6.25%, 5/25/29.......................... BBB(c) 494 427,996
Norwest Asset Securities Corp. 99-17, B3
6.25%, 6/25/29.......................... BBB(c) 557 481,940
Ryland Mortgage Securities Corp. III
92-A, 1A 8.259%, 3/29/30................ A- 180 178,991
SASCO Floating Rate Commercial Mortgage
98-C3A, H 6.675%, 4/25/03(d)............ Ba(c) 4,000 3,752,500
Structured Asset Securites Corp. 95-C4,
E 8.799%, 6/25/26....................... BBB 5,085 5,044,163
- ---------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $53,298,629) 51,543,209
- ---------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--16.4%
ARGENTINA--1.1%
Republic of Argentina RegS 11.75%,
2/12/07(g).............................. BBB- 2,350 2,101,784
BRAZIL--3.4%
Republic of Brazil 14.50%, 10/15/09..... B+ 2,500 2,640,625
Republic of Brazil C Bond, 8%, 4/15/14.. B+ 5,849 4,198,630
------------
6,839,255
------------
BULGARIA--2.0%
Republic of Bulgaria FLIRB Bearer Series
A 2.75%, 7/28/12........................ B(c) 1,250 871,875
Republic of Bulgaria IAB Series PDI
7.063%, 7/28/11(d)...................... B(c) 4,000 3,030,000
------------
3,901,875
------------
COLOMBIA--0.4%
Republic of Colombia 10.875%, 3/9/04.... BB+ 875 822,500
CROATIA--2.0%
Croatia Series A 7.0625%, 7/31/10(d).... BBB- 668 596,352
Croatia Series B 7.0625%, 7/31/06(d).... BBB- 3,721 3,432,988
------------
4,029,340
------------
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
MEXICO--4.3%
United Mexican States 10.375%,
2/17/09................................. BB+ $ 500 $ 526,875
United Mexican States 11.375%,
9/15/16................................. BB+ 4,250 4,815,781
United Mexican States 11.50%, 5/15/26... BB+ 2,750 3,255,312
------------
8,597,968
------------
MOROCCO--0.4%
Kingdom of Morocco, Series A 6.844%,
1/1/09(d)............................... BB 895 803,026
PANAMA--0.3%
Republic of Panama 8.875%, 9/30/27...... BB+ 750 635,625
PERU--0.2%
Republic of Peru PDI 4.50%, 3/7/17(d)... BB 500 335,937
POLAND--0.2%
Poland Bearer PDI 6%, 10/27/14(d)....... BBB 500 450,313
RUSSIA--0.7%
Russia Treasury Bill OFZ 14%,
9/12/01(f).............................. NR 41,898 1,151,457
Russian Federal Loan Bond OFZ Series
7004 25%, 9/18/02(d)(f)................. NR 10,641 271,567
------------
1,423,024
------------
TURKEY--0.5%
Republic of Turkey 11.875%, 11/5/04..... B+ 1,000 1,050,000
VENEZUELA--0.9%
Republic of Venezuela DCB Series DL 7%,
12/18/07(d)............................. B 2,286 1,791,417
- ---------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $36,499,672) 32,782,064
- ---------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--14.7%
BERMUDA--0.5%
Flag Telecom Holdings Ltd. 144A 11.625%,
3/30/10(b)(h)........................... B 1,250 1,059,332
BRAZIL--0.6%
Globo Communicacoes e Participacoes SA
144A 10.50%, 12/20/06(b)................ B+ 1,500 1,260,000
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
CANADA--2.2%
Clearnet Communications, Inc. 0%,
5/1/09(d)............................... B(c) $ 3,800 $ 2,223,000
GT Group Telecom 144A 0%,
2/1/10(b)(d)(k)......................... CCC+ 4,000 2,140,000
------------
4,363,000
------------
CHILE--0.6%
Petropower I Funding Trust 144A 7.36%,
2/15/14(b).............................. BBB 1,354 1,171,181
MEXICO--7.1%
Alestra SA de Rl de CV 12.625%,
5/15/09................................. BB- 2,700 2,605,500
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)............................. A-(c) 1,728 1,721,224
Grupo Industrial Durango 12.625%,
8/1/03.................................. BB- 1,000 1,007,500
Grupo Iusacell SA 144A 14.25%,
12/1/06(b).............................. B+ 3,250 3,404,375
Maxcom Telecomunicaciones 144A 13.75%,
4/1/07(b)(k)............................ NR 2,250 2,199,375
Nacional Financiera SNC RegS 22%,
5/20/02(e).............................. Baa(c) 20,000 2,299,957
Vicap SA 11.375%, 5/15/07............... B+ 1,000 937,500
------------
14,175,431
------------
NETHERLANDS--0.9%
United Pan-Europe Communications 144A
11.25%, 11/1/09(b)(h)................... B 2,000 1,731,381
UNITED KINGDOM--2.8%
Atlantic Telecom Group PLC 144A 13%,
1/15/10(b)(h)........................... B- 1,875 1,691,513
Clondalkin Industries 144A 10.625%,
1/15/10(b)(h)........................... B- 1,500 1,421,555
Colt Telecom Group 144A 7.625%,
12/15/09(b)(h).......................... B+ 2,000 1,717,712
<CAPTION>
STANDARD PAR
& POOR'S VALUE
RATING (000) VALUE
--------- -------- ------------
<S> <C> <C> <C>
UNITED KINGDOM--CONTINUED
Jazztel PLC 144A 13.125%,
12/15/09(b)(h).......................... CCC+ $ 1,000 $ 911,253
------------
5,742,033
------------
- ---------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $30,966,342) 29,502,358
- ---------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--1.2%
RUSSIA--1.2%
Lukinter Finance Lukoil Cv. RegS 3.50%,
5/6/02.................................. CCC- 2,375 2,481,875
- ---------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $2,807,491) 2,481,875
- ---------------------------------------------------------------------------
<CAPTION>
SHARES
--------
PREFERRED STOCKS--3.4%
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--3.4%
Global Crossing Holdings Ltd. PIK
10.50%.................................. 50,000 4,900,000
Nextel Communications PIK 11.125%....... 20,000 1,930,000
- ---------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $6,906,875) 6,830,000
- ---------------------------------------------------------------------------
COMMON STOCKS--1.5%
PAPER & FOREST PRODUCTS--0.1%
Northampton Pulp LLC(i)(j).............. 3,650 50,187
TELECOMMUNICATIONS (LONG DISTANCE)--1.4%
FirstCom Corp.(i)....................... 137,550 2,854,163
- ---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $953,940) 2,904,350
- ---------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
SHARES VALUE
-------- ------------
<S> <C> <C> <C>
WARRANTS--0.1%
TELEPHONE--0.1%
Atlantic Telecom Group Warrants(i)...... 1,875 $ 85,430
- ---------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 85,430
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS--97.1%
(IDENTIFIED COST $207,040,112) 194,655,955(a)
Cash and receivables, less liabilities--2.9% 5,879,567
------------
NET ASSETS--100.0% $200,535,522
============
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $3,653,177 and gross
depreciation of $16,216,324 for federal income tax purposes. At April 30,
2000, the aggregate cost of securities for federal income tax purposes was
$207,219,102.
(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,
2000, these securities amounted to a value of $25,214,751 or 12.6% of net
assets.
(c) As rated by Moody's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Par value represents Mexican Pesos.
(f) Par value represents Russian Rubles.
(g) Par value represents Argentine Pesos.
(h) Par value represents Euro.
(i) Non-income producing.
(j) Security valued at fair value as determined in good faith by or under the
direction of the Directors.
(k) Warrants incorporated as a unit.
6 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments securities at value
(Identified cost $207,040,112) $194,655,955
Receivables
Interest 4,640,599
Investment securities sold 1,559,675
Fund shares sold 139,431
Other receivables 507
Net unrealized appreciation on swap
agreements 1,461,120
Prepaid expenses 3,504
------------
Total assets 202,460,791
------------
LIABILITIES
Payables
Custodian 378,384
Investment securities purchased 638,066
Fund shares repurchased 345,519
Income distribution payable 266,500
Distribution fee 96,127
Investment advisory fee 92,352
Financial agent fee 15,838
Transfer agent fee 15,268
Directors' fee 13,692
Accrued expenses 63,523
------------
Total liabilities 1,925,269
------------
NET ASSETS $200,535,522
============
NET ASSETS CONSIST OF:
Capital paid in on shares of common
stock $263,603,688
Undistributed net investment income 563,929
Accumulated net realized loss (52,694,112)
Net unrealized depreciation (10,937,983)
------------
NET ASSETS $200,535,522
============
CLASS A
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $114,472,150) 10,516,233
Net asset value per share $10.89
Offering price per share
$10.89/(1-4.75%) $11.43
CLASS B
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $79,561,985) 7,320,361
Net asset value and offering price
per share $10.87
CLASS C
Shares of common stock outstanding,
$0.10 par value,
166,666,666 shares authorized (Net
Assets $6,501,387) 596,491
Net asset value and offering price
per share $10.90
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 10,577,721
Dividends 262,500
--------------
Total investment income 10,840,221
--------------
EXPENSES
Investment advisory fee 593,887
Distribution fee, Class A 150,805
Distribution fee, Class B 442,197
Distribution fee, Class C 34,377
Financial agent fee 96,531
Transfer agent 121,991
Custodian 32,030
Printing 26,599
Professional 18,443
Registration 18,194
Directors 10,994
Miscellaneous 13,230
--------------
Total expenses 1,559,278
--------------
NET INVESTMENT INCOME 9,280,943
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on securities (1,631,552)
Net realized loss on foreign currency (356,433)
Net change in unrealized appreciation (depreciation)
on investments 959,872
Net change in unrealized appreciation (depreciation)
on swap agreements 1,461,120
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (171)
--------------
NET GAIN ON INVESTMENTS 432,836
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,713,779
==============
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/00 Year Ended
(Unaudited) 10/31/99
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 9,280,943 $ 21,380,726
Net realized gain (loss) (1,987,985) (39,790,682)
Net change in unrealized appreciation (depreciation) 2,420,821 33,459,211
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 9,713,779 15,049,255
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (4,889,757) (12,709,813)
Net investment income, Class B (3,280,902) (8,978,439)
Net investment income, Class C (254,085) (572,784)
In excess of net investment income, Class A -- (143,541)
In excess of net investment income, Class B -- (101,400)
In excess of net investment income, Class C -- (6,469)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (8,424,744) (22,512,446)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,318,406 and 2,210,416
shares, respectively) 14,693,014 24,800,587
Net asset value of shares issued from reinvestment of
distributions
(262,149 and 705,561 shares, respectively) 2,918,649 7,902,801
Cost of shares repurchased (2,671,157 and 5,266,656
shares, respectively) (29,751,296) (58,965,528)
------------ ------------
Total (12,139,633) (26,262,140)
------------ ------------
CLASS B
Proceeds from sales of shares (286,995 and 551,304 shares,
respectively) 3,189,522 6,181,202
Net asset value of shares issued from reinvestment of
distributions
(132,450 and 372,459 shares, respectively) 1,472,678 4,168,689
Cost of shares repurchased (1,655,370 and 3,460,848
shares, respectively) (18,399,920) (38,603,400)
------------ ------------
Total (13,737,720) (28,253,509)
------------ ------------
CLASS C
Proceeds from sales of shares (102,936 and 297,288 shares,
respectively) 1,150,631 3,326,561
Net asset value of shares issued from reinvestment of
distributions
(12,041 and 32,606 shares, respectively) 134,215 365,221
Cost of shares repurchased (176,013 and 201,989 shares,
respectively) (1,961,924) (2,240,507)
------------ ------------
Total (677,078) 1,451,275
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARES TRANSACTIONS (26,554,431) (53,064,374)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (25,265,396) (60,527,565)
NET ASSETS
Beginning of period 225,800,918 286,328,483
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF
$563,929 AND DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME OF $292,270, RESPECTIVELY] $200,535,522 $225,800,918
============ ============
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/00 -----------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.85 $11.20 $13.50 $13.27 $12.56 $11.94
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.50 0.96 1.07 1.03 0.94 0.96
Net realized and unrealized gain (loss) (0.01) (0.30) (1.88) 0.18 0.72 0.61
------ --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.49 0.66 (0.81) 1.21 1.66 1.57
------ --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.45) (1.00) (1.07) (0.98) (0.95) (0.95)
Dividends from net realized gains -- -- (0.36) -- -- --
In excess of net investment income -- (0.01) -- -- -- --
In excess of net realized gains -- -- (0.06) -- -- --
------ --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.45) (1.01) (1.49) (0.98) (0.95) (0.95)
------ --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE 0.04 (0.35) (2.30) 0.23 0.71 0.62
------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $10.89 $10.85 $11.20 $13.50 $13.27 $12.56
====== ========= ========= ========= ========= =========
Total return(1) 4.40%(5) 5.97% (6.86)% 9.22% 13.75% 13.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $114,472 $125,931 $156,317 $191,486 $169,664 $168,875
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.11%(4) 1.14%(3) 1.08 % 1.04%(2) 1.07% 1.10%
Net investment income 8.90%(4) 8.59% 8.17 % 7.28% 7.56% 8.10%
Portfolio turnover 61%(5) 133% 157 % 295% 255% 201%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would be 1.13%.
(4) Annualized
(5) Not annualized
See Notes to Financial Statements 9
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/00 -----------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.84 $11.18 $13.48 $13.25 $12.54 $11.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.46 0.87 0.96 0.92 0.85 0.86
Net realized and unrealized gain (loss) (0.01) (0.29) (1.87) 0.18 0.71 0.61
------ --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.45 0.58 (0.91) 1.10 1.56 1.47
------ --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.42) (0.91) (0.97) (0.87) (0.85) (0.86)
Dividends from net realized gains -- -- (0.36) -- -- --
In excess of net investment income -- (0.01) -- -- -- --
In excess of net realized gains -- -- (0.06) -- -- --
------ --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.42) (0.92) (1.39) (0.87) (0.85) (0.86)
------ --------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE 0.03 (0.34) (2.30) 0.23 0.71 0.61
------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $10.87 $10.84 $11.18 $13.48 $13.25 $12.54
====== ========= ========= ========= ========= =========
Total return(1) 4.05%(3) 5.15% (7.51)% 8.42% 12.84% 12.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $79,562 $92,725 $124,075 $154,989 $142,869 $144,020
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.86%(4) 1.89%(5) 1.84 % 1.79%(2) 1.82% 1.85%
Net investment income 8.15%(4) 7.83% 7.36 % 6.52% 6.80% 7.30%
Portfolio turnover 61%(3) 133% 157 % 295% 255% 201%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------
SIX MONTHS FROM
ENDED YEAR ENDED OCTOBER 31 INCEPTION
4/30/00 ----------------------- 10/14/97 TO
(UNAUDITED) 1999 1998 10/31/97
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.87 $ 11.21 $ 13.48 $14.22
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.46 0.88 0.97 0.04
Net realized and unrealized gain (loss) (0.01) (0.30) (1.85) (0.74)
------ --------- --------- ------
TOTAL FROM INVESTMENT OPERATIONS 0.45 0.58 (0.88) (0.70)
------ --------- --------- ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.42) (0.91) (0.97) (0.04)
Dividends from net realized gains -- -- (0.36) --
In excess of net investment income -- (0.01) -- --
In excess of net realized gains -- -- (0.06) --
------ --------- --------- ------
TOTAL DISTRIBUTIONS (0.42) (0.92) (1.39) (0.04)
------ --------- --------- ------
CHANGE IN NET ASSET VALUE 0.03 (0.34) (2.27) (0.74)
------ --------- --------- ------
NET ASSET VALUE, END OF PERIOD $10.90 $ 10.87 $ 11.21 $13.48
====== ========= ========= ======
Total return(1) 4.03%(3) 5.23% (7.36)% (5.00)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $6,501 $ 7,145 $ 5,937 $ 284
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.86%(4) 1.89%(5) 1.88 % 1.62 %(2)(4)
Net investment income 8.14%(4) 7.83% 7.46 % 4.75 %(4)
Portfolio turnover 61%(3) 133% 157 % 295 %(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(3) Not annualized
(4) Annualized
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would be 1.88%.
10 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. (the "Fund") is organized
as a Maryland corporation and is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
Fund's investment objective is to maximize current income consistent with the
preservation of capital by investing in fixed income securities. The Fund offers
Class A, Class B and Class C shares. Class M shares have been closed. Class A
shares are sold with a front-end sales charge of up to 4.75%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a 1% contingent deferred sales charge if redeemed within one year of
purchase. All classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. Income and expenses of the Fund are borne pro rata by the
holders of all classes of shares, except that each class bears distribution
expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Actual results could differ from those estimates.
A. SECURITY VALUATION:
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service which utilizes information with respect to recent
sales, market transactions in comparable securities, quotations from dealers,
and various relationships between securities in determining value. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. Equity securities are valued at the
last sale price, or if there has been no sale that day, at the last bid price.
All other securities and assets are valued at their fair value as determined in
good faith by or under the direction of the Directors.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on ex-dividend date
or, in case of certain foreign securities, as soon as the Fund is notified.
Discounts and premiums are amortized to income using the effective interest
method. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code"), applicable to regulated investment companies, and to
distribute substantially all of its taxable income to its shareholders. In
addition, the Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are declared and recorded daily. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of expiring capital loss carryforwards,
foreign currency gain/loss, and losses deferred due to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
G. OPTIONS:
The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are
11
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
adjusted by the amount of premium received. Options written are reported as a
liability in the Statement of Assets and Liabilities and subsequently
marked-to-market to reflect the current value of the option. The risk associated
with written options is that the change in value of options contracts may not
correspond to the change in value of the hedged instruments. In addition, losses
may arise from changes in the value of the underlying instruments, or if a
liquid secondary market does not exist for the contracts.
The Fund may purchase options which are included in the Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
H. SWAP AGREEMENTS:
The Fund may invest in swap agreements for the purpose of hedging against
changes in interest rates or foreign currencies. Swap agreements involve the
exchange by the Fund with another party of their respective commitments to pay
or receive interest (e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional amount of principal). Swaps are marked to
market daily based upon quotations from market makers and the change, if any, is
recorded as unrealized gain or loss in the Statement of Operations. Net payments
of interest are recorded as interest income. Entering into these agreements
involves, to varying degrees, elements of credit and market risk in excess of
the amounts recognized on the Statement of Assets and Liabilities. Such risks
involve the possibility that there will be no liquid market for these
agreements, that the counterparty to the agreement may default on its obligation
to perform and that there may be unfavorable changes in the fluctuation of
interest rates and/or exchange rates. At April 30, 2000, the Fund had the
following swaps outstanding:
<TABLE>
<CAPTION>
UNREALIZED
NOTIONAL APPRECIATION
AMOUNT (DEPRECIATION)
- --------------------- --------------
<C> <S> <C>
$2,063,200 Agreement with Chase Manhattan
Bank terminating on December
15, 2004 to receive interest
at 12.09% in exchange for
payment of 10.00% on EUR
2,000,000.................... $ 286,953
2,100,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on November 1,
2004 to receive interest at
13.26% in exchange for
payment of 11.25% on EUR
2,000,000.................... 336,667
3,089,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on November 15,
2006 to receive interest at
11.07% in exchange for
payment of 9.25% on EUR
3,000,000.................... 375,000
1,956,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on March 15,
2008 to receive interest at
12.82% in exchange for
payment of 10.75% on EUR
2,000,000.................... 160,000
1,203,125 Agreement with Morgan Stanley
Capital Services Inc.
terminating on March 30,
2005 to receive interest at
13.95% in exchange for
payment of 11.625% on EUR
1,250,000.................... 68,750
2,035,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on December 1,
2009 to receive interest at
9.64% in exchange for payment
of 7.625% on EUR 2,000,000... 233,750
----------
$1,461,120
==========
</TABLE>
12
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee at an annual rate of
0.55% for the first $1 billion of the average daily net assets of the Fund.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect majority-owned subsidiary of PHL, has advised the Fund that it
retained net selling commissions of $4,934 for Class A shares, and deferred
sales charges of $95,397 for Class B and $1,639 for Class C shares for the six
months ended April 30, 2000. In addition, the Fund pays PEPCO a distribution fee
at an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and
1.00% for Class C shares of the average daily net assets of the Fund. The
Distribution Plan for Class A shares provides for fees to be paid up to a
maximum on an annual basis of 0.30%; the Distribution 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, 2000, $378,928 was retained
by the Distributor, $227,667 was paid to unaffiliated participants, and $20,784
was paid to W.S. Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC, Inc. (subagent to PEPCO), plus (2) the documented cost of
PEPCO to provide financial reporting, tax services and oversight of subagent's
performance. The current fee schedule of PFPC, Inc. ranges from 0.085% to
0.0125% of the average daily net asset values of the Fund. Certain minimum fees
and fee waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the six months ended April 30, 2000, transfer
agent fees were $121,991 of which PEPCO retained $87,253 which is net of the
fees paid to State Street.
At April 30, 2000, PHL and affiliates held 81,150 Class A shares with a value
of $883,724.
3. PURCHASE AND SALE OF SECURITIES
During the six months ended April 30, 2000, purchases and sales of
investments, excluding short-term securities and U.S. Government and agency,
securities, amounted to $108,639,261 and $129,052,338, respectively. Purchases
and sales of long-term U.S. Government and agency securities amounted to
$20,781,063 and $26,552,543, respectively.
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as the Fund's ability to
repatriate such amounts.
5. LOAN AGREEMENTS
The Fund may invest in direct debt instruments, which are interests in amounts
owed by a corporate, governmental, or other borrower to lenders or lending
syndicates. The Fund's investments in loans may be in the form of participations
in loans or assignments of all or a portion of loans from third parties. A loan
is often administered by a bank or other financial institution (the lender) that
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. When investing in a loan participation, the
Fund has the right to receive payments of principal, interest and any fees to
which it is entitled only from the lender selling the loan agreement and only
upon receipt by the lender of payments from the borrower. The Fund generally has
no right to enforce compliance with the terms of the loan agreement with the
borrower. As a result, the Fund may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. For loans which the
Fund is a participant, the Fund may not sell its participation in the loan
without the lender's prior consent. When the Fund purchases assignments from
lenders it acquires direct rights against the borrower on the loan. Direct
indebtedness of emerging countries involves a risk that the government entities
responsible for the repayment of the debt may be unable, or unwilling to pay the
principal and interest when due.
6. CAPITAL LOSS CARRYOVERS
The Fund has capital loss carryover of $50,275,557 comprised of $8,655,748 and
$41,619,809 expiring in 2006 and 2007, respectively, which may be used to offset
future capital gains.
This report is not authorized for distribution to prospective investors in the
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. unless preceded or
accompanied by an effective Prospectus which includes information concerning the
sales charge, Fund's record and other pertinent information.
13
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
INVESTMENTS AT APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--5.9%
U.S. TREASURY NOTES--5.9%
U.S. Treasury Notes 6.25%, 2/15/03...... Aaa $ 750 $ 742,565
U.S. Treasury Notes 5.875%, 11/15/04.... Aaa 1,750 1,703,102
- -----------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $2,471,802) 2,445,667
- -----------------------------------------------------------------------
MUNICIPAL BONDS--14.9%
CALIFORNIA--0.9%
San Diego County Pension Obligation
Revenue Taxable Series A 6.24%,
8/15/02................................. Aaa 400 390,000
FLORIDA--1.2%
Tampa Solid Waste System Revenue Taxable
Series A 6.18%, 10/1/04................. Aaa 500 475,625
ILLINOIS--1.8%
Chicago Tax Increment Taxable 6.25%,
6/1/02.................................. Aaa 750 733,125
MASSACHUSETTS--0.9%
Massachusetts State Port Authority
Revenue Taxable Series C 6.05%,
7/1/02.................................. Aa 400 388,500
MISSISSIPPI--2.1%
Mississippi State Taxable Series T
7.50%, 11/1/00.......................... Aa 855 856,479
NEW JERSEY--1.8%
New Jersey State Taxable Series G
6.375%, 8/1/03.......................... Aa 750 724,688
OKLAHOMA--2.2%
Oklahoma City Airport Trust Taxable 10%,
7/1/12.................................. Aaa 900 904,158
PENNSYLVANIA--1.7%
Delaware River Port Authority PA & NJ
Revenue Taxable Series A 5.91%,
1/1/02.................................. Aaa 700 683,375
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
TEXAS--2.3%
Texas Water Resources Finance Authority
Revenue Taxable 6%, 8/15/02............. Aaa $1,000 $ 970,000
- -----------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $6,330,695) 6,125,950
- -----------------------------------------------------------------------
ASSET-BACKED SECURITIES--10.6%
Advanta Equipment Receivables 98-1, A4
5.98%, 12/15/06......................... Aaa 500 487,968
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ Aa 375 369,668
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. Baa 952 786,590
Countrywide Funding Corp. 99-3, AF5
7.73%, 9/25/27.......................... Aaa 600 592,125
Fleetwood Credit Corp. Grantor Trust
96-A, B 6.95%, 10/17/11................. A 133 132,829
MBNA Master Credit Card Trust 98-C, C
6.35%, 11/15/05......................... BBB(c) 525 501,375
Premier Auto Trust 97-3, B 6.52%,
1/6/03.................................. A 250 247,700
Team Fleet Financing Corp. 98-3A, C 144A
6.63%, 10/25/04(b)...................... BBB(c) 500 471,094
Triangle Funding Ltd. 98-2A, 8.13%,
10/15/04(d)............................. BBB(c) 800 795,250
- -----------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $4,610,056) 4,384,599
- -----------------------------------------------------------------------
CORPORATE BONDS--18.2%
AIRLINES--0.5%
Continental Airlines, Inc. Series 97-2D
7.522%, 6/30/01......................... Ba 215 212,753
</TABLE>
2 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
BANKS (MONEY CENTER)--0.6%
First Union Institutional Capital I
8.04%, 12/1/26.......................... A $ 250 $ 233,437
BROADCASTING (TELEVISION, RADIO & CABLE)--2.4%
Century Communications Corp.
9.75%, 2/15/02.......................... B 1,000 1,003,750
BUILDING MATERIALS--1.7%
Nortek, Inc. 9.875%, 3/1/04............. B 750 712,500
COMMUNICATIONS EQUIPMENT--1.2%
Williams Communications Group, Inc.
10.875%, 10/1/09........................ B 500 505,000
ELECTRIC COMPANIES--1.2%
CalEnergy Co., Inc. 7.52%, 9/15/08...... Baa 500 475,000
FOODS--1.9%
SUPERVALU, Inc. 9.75%, 6/15/04.......... Baa 750 787,500
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.2%
Horseshoe Gaming LLC Series B 9.375%,
6/15/07................................. B 500 488,750
OIL & GAS (DRILLING & EQUIPMENT)--1.1%
R & B Falcon Corp. Series B 6.50%,
4/15/03................................. Ba 500 460,000
RETAIL (SPECIALTY)--1.3%
Musicland Group, Inc. 9%, 6/15/03....... B 600 540,000
SERVICES (COMMERCIAL & CONSUMER)--1.1%
Anthony Crane Rentals LP Series B
10.375%, 8/1/08......................... B 350 250,250
Service Corp. International 7.20%,
6/1/06.................................. Ba 300 178,500
-----------
428,750
-----------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--1.2%
VoiceStream Wireless Holdings 144A
10.375%, 11/15/09(b).................... B 500 510,000
TELECOMMUNICATIONS (LONG DISTANCE)--2.3%
Global Crossing Holdings Ltd.
9.625%, 5/15/08......................... Ba 500 492,500
Level 3 Communications, Inc. 144A
10.75%, 3/15/08(b)...................... B 500 438,541
-----------
931,041
-----------
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
TEXTILES (APPAREL)--0.5%
Collins & Aikman Products Co. 11.50%,
4/15/06................................. B $ 200 $ 197,000
- -----------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $7,901,830) 7,485,481
- -----------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--22.3%
BTC Mortgage Investors Trust 97-S1, D
6.95%, 12/31/09......................... AA(c) 525 523,976
Bear Stearns Mortgage Securities, Inc.
95-1, 1B3 6.458%, 5/25/10(d)............ NR 508 463,245
Bear Stearns Mortgage Securities, Inc.
95-1, 2B3 7.40%, 7/25/10................ NR 398 375,053
CS First Boston Mortgage Securities
Corp. 97-SPCE C 7.077%, 2/20/07......... A(c) 750 717,422
CS First Boston Mortgage Securities
Corp. 98-C2, E 7.13%, 1/15/12........... Baa 250 211,055
Criimi Mae Trust I 96-C1, A2 7.56%,
6/30/33................................. BBB(c) 400 373,375
G.E. Capital Mortgage Services, Inc.
94-26, B2 6.90%, 7/25/09(d)............. Baa 210 197,936
G.E. Capital Mortgage Services, Inc.
96-8, 1M 7.25%, 5/25/26................. AAA(c) 286 277,045
IMPAC CMB Trust 98-2, M3 7.25%,
4/25/28................................. A(c) 503 482,895
Imperial CMB Trust 98-1, M2 7.25%,
11/25/29................................ A 854 821,727
Merrill Lynch Mortgage Investors, Inc.
95-C3, A2 7.78%, 12/26/25(d)............ AAA(c) 1,400 1,373,312
PNC Mortgage Securities Corp. 97-6, A1
6.49%, 10/25/26......................... Aaa 132 132,203
Prudential Securities Secured
Financing Corp. 98-C1, A1A1 6.105%,
11/15/02................................ Aaa 640 629,725
</TABLE>
See Notes to Financial Statements 3
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
Residential Funding Mortgage Securities
I 93-S23, M3 6.50%, 6/25/08............. BBB+(c) $ 590 $ 561,539
Residential Funding Mortgage Securities
I 93-S29, M3 7%, 8/25/08................ AA+(c) 443 421,908
Residential Funding Mortgage Securities
I 96-S8, A4 6.75%, 3/25/11.............. AAA(c) 81 77,071
Resolution Trust Corp. 94-C1, C 8%,
6/25/26................................. A(c) 272 272,187
SASCO Floating Rate Commercial Mortgage
98-C3A, 144A H 6.675%, 4/25/03(b)(d).... Ba 500 469,062
Structured Asset Securites Corp. 95-C4,
E 8.744%, 6/25/26(d).................... BBB(c) 250 247,969
Summit Mortgage Trust 00-1, B3 6.138%,
12/28/12................................ A-(c) 589 552,835
- -----------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $9,387,403) 9,181,540
- -----------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--13.0%
ARGENTINA--2.2%
Republic of Argentina Series B 0%,
4/15/01................................. BBB(c) 1,000 910,000
BRAZIL--1.2%
Republic of Brazil 11.625%, 4/15/04..... B 500 496,250
BULGARIA--0.8%
Republic of Bulgaria FLIRB Bearer Series
A 2.75%, 7/28/12(d)..................... B 500 348,750
COLOMBIA--0.3%
Republic of Colombia 10.875%, 3/9/04.... Ba 125 117,500
CROATIA--1.8%
Croatia Series A 7.0625%, 7/31/10(d).... Baa 286 255,581
Croatia Series B 7.0625%, 7/31/06(d).... Baa 507 468,134
-----------
723,715
-----------
MEXICO--2.0%
United Mexican States 10.375%,
2/17/09................................. Baa 250 263,437
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
MEXICO--CONTINUED
United Mexican States 11.375%,
9/15/16................................. Baa $ 500 $ 566,562
-----------
829,999
-----------
PANAMA--1.2%
Republic of Panama RegS 7.875%,
2/13/02................................. Ba 500 492,188
POLAND--1.6%
Poland Bearer PDI 6%, 10/27/14(d)....... Baa 750 675,469
TURKEY--1.9%
Republic of Turkey 11.875%, 11/5/04..... B+ 750 787,500
- -----------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $5,359,802) 5,381,371
- -----------------------------------------------------------------------
FOREIGN CORPORATE BONDS--12.1%
CHILE--0.5%
Banco Santiago SA 7%, 7/18/07........... Baa 250 220,065
MEXICO--7.9%
Alestra SA de Rl de CV 12.625%,
5/15/09................................. B 250 241,250
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)............................. A-(c) 196 195,597
Grupo Elektra SA de C.V. 12.75%,
5/15/01................................. B+(c) 500 524,375
Grupo Industrial Durango 12.625%,
8/1/03.................................. B 350 352,625
Grupo Iusacell SA 144A 14.25%,
12/1/06(b).............................. B 500 523,750
Maxcom Telecomunicaciones 144A 13.75%,
4/1/07(b)............................... NR 500 488,750
Nacional Financiera SNC RegS 22%,
5/20/02(e).............................. Baa 5,000 574,989
Vicap SA 10.25%, 5/15/02................ Ba 350 334,250
-----------
3,235,586
-----------
</TABLE>
4 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
<TABLE>
<CAPTION>
PAR
MOODY'S VALUE
RATING (000) VALUE
-------- ------ -----------
<S> <C> <C> <C>
SOUTH KOREA--1.8%
Korea Development Bank 7.375%,
9/17/04................................. Baa $ 750 $ 722,813
TURKEY--0.8%
Garanti Grantor Trust 97-A 144A 8.28%,
4/15/02(b)(d)........................... BBB-(c) 360 346,050
VENEZUELA--1.1%
PDVSA Finance Ltd. Series 98-1 6.45%,
2/15/04................................. Baa 500 460,500
- -----------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $4,973,353) 4,985,014
- -----------------------------------------------------------------------
<CAPTION>
SHARES
------
PREFERRED STOCKS--0.6%
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--0.6%
Global Crossing Holdings Ltd. PIK
10.50%.................................. 2,500 245,000
- -----------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $248,125) 245,000
- -----------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--97.6%
(IDENTIFIED COST $41,283,066) 40,234,622
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STANDARD & PAR
POOR'S VALUE
RATING (000) VALUE
--------------- ------ -----------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--1.6%
COMMERCIAL PAPER--1.6%
American Home Products Corp, 6.07%,
5/1/00.................................. A-1 $ 680 $ 680,000
- ------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $680,000) 680,000
- ------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS --99.2%
(IDENTIFIED COST $41,963,066) 40,914,622(a)
Cash and receivables, less liabilities--0.8% 325,246
-----------
NET ASSETS--100.0% $41,239,868
===========
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $203,539 and gross
depreciation of $1,251,983 for federal income tax purposes. At April 30,
2000, the aggregate cost of securities for federal income tax purposes was
$41,963,066.
(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,
2000, these securities amounted to a value of $3,442,844 or 8.3% 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) Par value represents Mexican Pesos.
See Notes to Financial Statements 5
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $41,963,066) $ 40,914,622
Cash 6,890
Receivables
Interest and dividends 793,962
Fund shares sold 163,802
Prepaid expenses 708
--------------
Total assets 41,879,984
--------------
LIABILITIES
Payables
Investment securities purchased 453,833
Fund shares repurchased 39,494
Income distribution payable 49,908
Distribution fee 13,998
Transfer agent fee 13,924
Trustees' fee 13,098
Financial agent fee 5,983
Investment advisory fee 3,688
Accrued expenses 46,190
--------------
Total liabilities 640,116
--------------
NET ASSETS $ 41,239,868
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 46,254,887
Undistributed net investment income 92,285
Accumulated net realized loss (4,056,466)
Net unrealized depreciation (1,050,838)
--------------
NET ASSETS $ 41,239,868
==============
CLASS A
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $24,209,757) 5,357,002
Net asset value per share $4.52
Offering price per share $4.52/(1-2.25%) $4.62
CLASS B
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $9,637,088) 2,137,846
Net asset value and offering price per share $4.51
CLASS C
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $7,393,023) 1,636,584
Net asset value and offering price per share $4.52
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 1,801,137
Dividends 13,126
--------------
Total investment income 1,814,263
--------------
EXPENSES
Investment advisory fee 115,579
Distribution fee, Class A 29,797
Distribution fee, Class B 38,333
Distribution fee, Class C 19,924
Financial agent fee 35,644
Transfer agent 33,300
Professional 13,331
Registration 11,466
Printing 9,898
Trustees 9,692
Custodian 6,642
Miscellaneous (449)
--------------
Total expenses 323,157
Less expenses borne by investment adviser (77,465)
--------------
Net expenses 245,692
--------------
NET INVESTMENT INCOME 1,568,571
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (450,403)
Net realized gain on foreign currency transactions 10,485
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (1,381)
Net change in unrealized appreciation (depreciation) on
investments (76,358)
--------------
NET LOSS ON INVESTMENTS (517,657)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,050,914
==============
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
4/30/00 Year Ended
(Unaudited) 10/31/99
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 1,568,571 $ 3,640,701
Net realized gain (loss) (439,918) (1,255,455)
Net change in unrealized appreciation
(depreciation) (77,739) 404,251
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,050,914 2,789,497
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (854,037) (2,209,345)
Net investment income, Class B (342,866) (807,843)
Net investment income, Class C (274,988) (720,412)
In excess of net investment income,
Class A -- (9,014)
In excess of net investment income,
Class B -- (3,296)
In excess of net investment income,
Class C -- (2,939)
----------- -----------
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS (1,471,891) (3,752,849)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(1,607,514 and 3,582,772 shares,
respectively) 7,339,674 16,755,923
Net asset value of shares issued from
reinvestment of distributions
(146,993 and 377,128 shares,
respectively) 670,075 1,757,357
Cost of shares repurchased (2,108,251
and 5,376,778 shares, respectively) (9,625,026) (25,115,199)
----------- -----------
Total (1,615,277) (6,601,919)
----------- -----------
CLASS B
Proceeds from sales of shares (205,076
and 757,791 shares, respectively) 932,224 3,535,661
Net asset value of shares issued from
reinvestment of distributions
(55,230 and 126,951 shares,
respectively) 251,224 589,906
Cost of shares repurchased (527,805
and 1,109,023 shares, respectively) (2,402,333) (5,162,766)
----------- -----------
Total (1,218,885) (1,037,199)
----------- -----------
CLASS C
Proceeds from sales of shares (429,831
and 1,484,770 shares, respectively) 1,960,886 6,906,958
Net asset value of shares issued from
reinvestment of distributions
(45,395 and 124,900 shares,
respectively) 206,963 581,636
Cost of shares repurchased (816,190
and 1,922,094 shares, respectively) (3,725,366) (8,935,139)
----------- -----------
Total (1,557,517) (1,446,545)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (4,391,679) (9,085,663)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (4,812,656) (10,049,015)
NET ASSETS
Beginning of period 46,052,524 56,101,539
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) AND
DISTRIBUTIONS
IN EXCESS OF NET INVESTMENT INCOME
OF $92,285 AND ($4,395),
RESPECTIVELY] $41,239,868 $46,052,524
=========== ===========
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Goodwin 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 YEAR ENDED OCTOBER 31
4/30/00 ----------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 4.57 $ 4.66 $ 5.06 $ 4.91 $ 4.74 $ 4.61
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.17 0.33 0.34 0.34 0.33 0.33
Net realized and unrealized
gain (loss) (0.06) (0.08) (0.29) 0.14 0.17 0.13
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT
OPERATIONS 0.11 0.25 0.05 0.48 0.50 0.46
------- ------- ------- ------- ------- ------
LESS DISTRIBUTIONS
Dividends from net
investment income (0.16) (0.34) (0.34) (0.33) (0.33) (0.33)
Dividends from net realized
gains -- -- (0.11) -- -- --
In excess of net investment
income -- 0.00(4) -- -- -- --
------- ------- ------- ------- ------- ------
TOTAL DISTRIBUTIONS (0.16) (0.34) (0.45) (0.33) (0.33) (0.33)
------- ------- ------- ------- ------- ------
Change in net asset value (0.05) (0.09) (0.40) 0.15 0.17 0.13
------- ------- ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 4.52 $ 4.57 $ 4.66 $ 5.06 $ 4.91 $ 4.74
======= ======= ======= ======= ======= ======
Total return(1) 2.48%(6) 5.57% 0.85% 10.08% 10.91% 10.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $24,210 $26,071 $33,212 $28,557 $13,702 $9,303
RATIO TO AVERAGE NET ASSETS
OF:
Operating expenses(2) 1.00%(5) 1.00%(3) 1.00% 1.00% 1.00% 1.00%
Net investment income 7.64%(5) 7.21% 6.90% 6.54% 6.88% 7.07%
Portfolio turnover 47%(6) 122% 126% 246% 232% 344%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.37%,
1.48%, 1.55%, 1.86%, 2.19% and 2.78% for the periods ended April 30, 2000,
October 31, 1999, 1998, 1997, 1996 and 1995, respectively.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(4) Amount is less than $0.01.
(5) Annualized.
(6) Not annualized.
8 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED OCTOBER 31
4/30/00 ---------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 4.56 $ 4.65 $ 5.06 $ 4.91 $ 4.74 $ 4.61
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.16 0.31 0.31 0.31 0.31 0.30
Net realized and unrealized
gain (loss) (0.06) (0.08) (0.29) 0.15 0.17 0.13
------ ------- ------- ------- ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 0.10 0.23 0.02 0.46 0.48 0.43
------ ------- ------- ------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.15) (0.32) (0.32) (0.31) (0.31) (0.30)
Dividends from net realized
gains -- -- (0.11) -- -- --
In excess of net investment
income -- 0.00(7) -- -- -- --
------ ------- ------- ------- ------ ------
TOTAL DISTRIBUTIONS (0.15) (0.32) (0.43) (0.31) (0.31) (0.30)
------ ------- ------- ------- ------ ------
Change in net asset value (0.05) (0.09) (0.41) 0.15 0.17 0.13
------ ------- ------- ------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 4.51 $ 4.56 $ 4.65 $ 5.06 $ 4.91 $ 4.74
====== ======= ======= ======= ====== ======
Total return(1) 2.25%(5) 5.04% 0.12% 9.51% 10.36% 9.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $9,637 $10,957 $12,225 $10,318 $5,943 $4,659
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2) 1.50%(4) 1.50%(6) 1.50% 1.50% 1.50% 1.50%
Net investment income 7.13%(4) 6.70% 6.44% 6.05% 6.38% 6.59%
Portfolio turnover 47%(5) 122% 126% 246% 232% 344%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------
SIX MONTHS YEAR ENDED FROM
ENDED OCTOBER 31 INCEPTION
4/30/00 ---------------------- 10/1/97 TO
(UNAUDITED) 1999 1998 10/31/97
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 4.56 $ 4.66 $ 5.06 $ 5.15
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) 0.17 0.33 0.34 0.03
Net realized and unrealized
gain (loss) (0.05) (0.10) (0.30) (0.09)
------ ------ ------- ------
TOTAL FROM INVESTMENT
OPERATIONS 0.12 0.23 0.04 (0.06)
------ ------ ------- ------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.16) (0.33) (0.33) (0.03)
Dividends from net realized
gains -- -- (0.11) --
In excess of net investment
income -- 0.00(7) -- --
------ ------ ------- ------
TOTAL DISTRIBUTIONS (0.16) (0.33) (0.44) (0.03)
------ ------ ------- ------
Change in net asset value (0.04) (0.10) (0.40) (0.09)
------ ------ ------- ------
NET ASSET VALUE, END OF PERIOD $ 4.52 $ 4.56 $ 4.66 $ 5.06
====== ====== ======= ======
Total return(1) 2.59%(5) 5.07% 0.59% (1.30)%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $7,393 $9,025 $10,665 $575
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) 1.25%(4) 1.25%(6) 1.25% 1.25%(4)
Net investment income 7.38%(4) 6.95% 6.70% 5.51%(4)
Portfolio turnover 47%(5) 122% 126% 246%(5)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.87%,
1.98%, 2.05%, 2.36%, 2.69% and 3.22% for the periods ended April 30, 2000,
October 31, 1999, 1998, 1997, 1996 and 1995, respectively.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.62%,
1.73%, 1.80% and 2.11% for the periods ended April 30, 2000, October 31,
1999, 1998 and 1997, respectively.
(4) Annualized.
(5) Not annualized.
(6) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(7) Amount is less than $0.01.
See Notes to Financial Statements 9
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Goodwin 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 accounting principles
generally accepted in the United States 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. Equity securities are valued at the
last sale price, or if there had been no sale that day, at the last bid price.
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. 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 adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee at an annual rate of
0.55% 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, 2000, the Adviser has
reimbursed the Fund $77,465 for such expenses.
10
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
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 $906 for Class A shares and deferred sales
charges of $8,608 for Class B shares for the six months ended April 30, 2000. 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, 2000, $37,190 was retained by the Distributor, $43,468 was paid to
unaffiliated participants, and $7,396 was paid to W.S. Griffith, an indirect
subsidiary of PHL. As Financial Agent of the Fund, PEPCO receives a financial
agent fee equal to the sum of (1) the documented cost of fund accounting and
related services provided by PFPC Inc. (subagent to PEPCO), plus (2) the
documented cost to PEPCO to provide financial reporting, tax services and
oversight of subagent's performance. The current fee schedule of PFPC Inc.
ranges from 0.085% to 0.0125% of the average daily net asset values of the Fund.
Certain minimum fees and fee waivers may apply. PEPCO serves as the Fund's
Transfer Agent with State Street Bank and Trust as sub-transfer agent. For the
six months ended April 30, 2000, transfer agent fees were $33,300 of which PEPCO
retained $3,864 which is net of the fees paid to State Street. At April 30,
2000, PHL and affiliates held 34,255 Class A shares with a value of $154,833.
3. PURCHASE AND SALE OF SECURITIES
During the six months ended April 30, 2000, purchases and sales of
investments, excluding short-term securities and U.S. Government and agency
securities, amounted to $14,024,475 and $18,474,459, respectively. Purchases and
sales of long-term U.S. Government and agency securities amounted to $5,554,245
and $3,754,354, respectively.
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.
5. CAPITAL LOSS CARRYOVERS
The Fund has capital loss carryover of $3,616,548 comprised of $2,039,934 and
$1,576,614 expiring in 2006 and 2007, respectively, which may be used to offset
future capital gains.
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.
11
<PAGE>
INVESTMENTS AT OCTOBER 31, 1999
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES--0.5%
U.S. TREASURY NOTES--0.5%
U.S. Treasury Notes 6%, 8/15/09......... AAA $ 1,000 $ 999,160
- -----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $987,031) 999,160
- -----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--2.0%
Fannie Mae 6.25%, 5/15/29............... AAA 5,000 4,600,000
- -----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $4,425,711) 4,600,000
- -----------------------------------------------------------------------------
AGENCY NON MORTGAGE-BACKED
SECURITIES--0.2%
Fannie Mae 6.625%, 9/15/09.............. Aaa(c) 500 497,500
- -----------------------------------------------------------------------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $499,371) 497,500
- -----------------------------------------------------------------------------
MUNICIPAL BONDS--6.9%
CALIFORNIA--2.5%
Fresno Pension Obligation Taxable 7.80%,
6/1/14.................................. AAA 500 515,625
Oakland Pension Obligation Taxable
Series A 6.95%, 12/15/08................ AAA 3,200 3,176,000
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
CALIFORNIA--CONTINUED
Pasadena Pension Funding Taxable
Series A 7.10%, 5/15/10................. AAA $ 1,900 $ 1,881,000
------------
5,572,625
------------
CONNECTICUT--1.1%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 6.91%,
9/1/12.................................. AAA 1,400 1,363,250
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.57%,
9/1/13(b)............................... AAA 1,075 1,009,156
------------
2,372,406
------------
FLORIDA--1.2%
Palm Beach County Solid Waste Industrial
Development Project B Revenue Taxable
10.50%, 1/1/11(i)(j)(k)................. NR 2,250 675,000
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20.......... AAA 2,000 2,012,500
------------
2,687,500
------------
ILLINOIS--0.9%
Illinois Educational Facilities
Authority-Loyola University Revenue
Taxable Series A 7.84%, 7/1/24.......... AAA 2,000 2,032,500
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
PENNSYLVANIA--1.2%
Pittsburgh Pension General Obligation
Taxable Series B 6.35%, 3/1/13.......... AAA $ 3,000 $ 2,778,750
- -----------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $17,143,383) 15,443,781
- -----------------------------------------------------------------------------
ASSET-BACKED SECURITIES--5.1%
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. BBB- 8,495 7,770,270
Green Tree Financial Corp. 94-1, B2
7.85%, 4/15/19.......................... Baa(c) 2,000 1,766,370
Pennant CBO Ltd. 1A, D 13.43%,
3/14/11................................. Ba(c) 2,000 1,945,000
- -----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $12,569,269) 11,481,640
- -----------------------------------------------------------------------------
CORPORATE BONDS--24.8%
AEROSPACE/DEFENSE--0.5%
BE Aerospace, Inc. 9.50%, 11/1/08....... B 1,250 1,203,125
AUTO PARTS & EQUIPMENT--2.0%
Collins & Aikman Corp. 11.50%, 4/15/06.. B 4,750 4,512,500
AUTOMOBILES--0.9%
Titan Tire Corp. 7%, 2/11/00............ NR 2,000 1,985,000
BROADCASTING (TELEVISION, RADIO & CABLE)--1.6%
Century Communications Corp. 8.75%,
10/1/07................................. BB- 500 480,000
Fox/Liberty Networks LLC 8.875%,
8/15/07................................. BBB- 3,000 3,052,500
------------
3,532,500
------------
COMMUNICATIONS EQUIPMENT--3.1%
Metromedia Fiber Network, Inc. Series B
10%, 11/15/08........................... B+ 3,930 3,890,700
Williams Communications Group, Inc.
10.875%, 10/1/09........................ BB- 3,000 3,082,500
------------
6,973,200
------------
ENTERTAINMENT--0.6%
SFX Entertainment, Inc. 9.125%,
12/1/08................................. B- 1,500 1,387,500
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.1%
Horseshoe Gaming LLC Series B 9.375%,
6/15/07................................. B+ $ 1,500 $ 1,492,500
Mohegan Tribal Gaming 8.125%, 1/1/06.... BB 500 483,750
Mohegan Tribal Gaming 8.75%, 1/1/09..... BB- 500 488,750
------------
2,465,000
------------
HOMEBUILDING--0.7%
Horton (D.R.), Inc., 8%, 2/1/09......... BB 1,750 1,505,000
INSURANCE (MULTI-LINE)--3.8%
Middletown Trust Series C 11.75%,
7/15/10(k).............................. A+ 6,485 6,809,314
Willis Corroon Corp. 9%, 2/1/09......... B+ 2,100 1,858,500
------------
8,667,814
------------
LEISURE TIME (PRODUCTS)--0.5%
Bally Total Fitness Holding Corp.
Series D 9.875%, 10/15/07............... B- 1,250 1,184,375
PUBLISHING--0.8%
American Lawyer Media, Inc. Series B
9.75%, 12/15/07......................... B 2,000 1,895,000
RETAIL (SPECIALTY)--0.8%
Musicland Group, Inc. 9%, 6/15/03....... B- 2,000 1,835,000
SERVICES (COMMERCIAL & CONSUMER)--0.7%
ARA Services, Inc. 10.625%, 8/1/00...... BBB- 28 29,295
IT Group, Inc. (The) 11.25%, 4/1/09..... B+ 1,665 1,565,100
------------
1,594,395
------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)--0.5%
Nextel Commmunications, Inc. 0%,
10/31/07(d)............................. B- 1,500 1,076,250
TELECOMMUNICATIONS (LONG DISTANCE)--4.5%
Interamericas Communications Corp. 14%,
10/27/07................................ NR 3,930 3,144,000
Metromedia International Group, Inc.
10.50%, 9/30/07......................... NR 756 377,778
NTL, Inc. Series B 10%, 2/15/07......... B- 3,000 3,060,000
RCN Corp. Series B 0%, 2/15/08(d)....... B- 5,775 3,681,563
------------
10,263,341
------------
TELEPHONE--1.4%
Teligent, Inc. 11.50%, 12/1/07.......... CCC 3,330 3,063,600
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
TRUCKERS--1.3%
American Commercial Lines LLC Series B
10.25%, 6/30/08......................... B $ 3,150 $ 2,898,000
- -----------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $60,449,584) 56,041,600
- -----------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--27.0%
CS First Boston Mortgage Securities
Corp. 97-SPCE C 144A 7.077%,
2/20/07(b).............................. A(c) 4,000 3,861,250
CS First Boston Mortgage Securities
Corp. 98-C1, A1B 6.48%, 5/17/08......... AAA 3,000 2,832,188
CS First Boston Mortgage Securities
Corp. 98-C2, E 7.13%, 1/15/12........... Baa(c) 4,000 3,402,500
CS First Boston Mortgage Securities
Corp. 97-1R, 1M4 144A 7.362%,
2/28/22(b).............................. Baa(c) 4,866 4,724,931
Criimi Mae Trust I 96-C1, A2 144A 7.56%,
6/30/33(b).............................. BBB 5,125 4,865,547
DLJ Mortgage Acceptance Corp. 97-CF2, B2
144A 7.14%, 11/15/08(b)................. BBB- 4,000 3,507,500
First Boston Mortgage Securities Corp.
93-5, B2 7.30%, 7/25/23................. A+(c) 2,839 2,769,001
First Chicago/Lennar Trust 97-CHL1, D
144A 8.075%, 5/29/08(b)................. BB(c) 4,000 3,280,625
First Union - Lehman Brothers - Bank of
America 98-C2, A2 6.56%, 11/18/08....... AAA 500 477,428
Mortgage Capital Funding, Inc. 98-MC2, B
6.549%, 5/18/08......................... Aa(c) 2,500 2,346,875
Norwest Asset Securities Corp. 96-3, B1
7.25%, 9/25/26.......................... A(c) 3,393 3,250,197
Norwest Asset Securities Corp. 96-3, B2
7.25%, 9/25/26.......................... BBB(c) 2,263 2,101,244
Norwest Asset Securities Corp. 97-18, B2
6.75%, 12/25/27......................... BBB(c) 1,030 920,074
Norwest Asset Securities Corp. 98-2, B1
6.50%, 2/25/28.......................... A(c) 2,953 2,691,649
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
Norwest Asset Securities Corp. 98-22, B3
6.25% 9/25/28........................... BBB(c) $ 618 $ 534,185
Norwest Asset Securities Corp. 99-12, B3
6.25%, 5/25/29.......................... BBB(c) 497 415,420
Norwest Asset Securities Corp. 99-17, B3
6.25%, 6/25/29.......................... BBB(c) 560 473,765
Norwest Asset Securities Corp. 99-3, B3
6%, 1/25/29............................. BBB(c) 744 625,774
Norwest Asset Securities Corp. 99-6, B3
6%, 3/25/29............................. BBB(c) 436 357,740
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23................................. AA 906 902,571
Ryland Mortgage Securities Corp. III
92-A, 1A 8.259%, 3/29/30................ A- 217 216,170
SASCO Floating Rate Commercial Mortgage
98-C3A, H 144A 5.959%, 4/25/03(b)(d).... Ba(c) 4,000 3,549,284
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24....................... BBB 5,110 5,074,869
Structured Asset Securites Corp. 95-C4,
E 144A 8.71%, 6/25/26(b)................ BB 5,085 4,886,732
Wilshire Funding Corp. 97-WFC1, M3
7.25%, 8/25/27.......................... Baa(c) 3,319 2,914,296
- -----------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $63,181,560) 60,981,815
- -----------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--20.6%
ARGENTINA--1.2%
Republic of Argentina Bearer FRB 6.813%,
3/31/05(d).............................. BB 880 781,603
Republic of Argentina RegS 11.75%,
2/12/07(g).............................. BBB- 2,350 2,042,563
------------
2,824,166
------------
BRAZIL--3.9%
Republic of Brazil 14.50%, 10/15/09..... B+ 5,500 5,678,750
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
BRAZIL--CONTINUED
Republic of Brazil C Bond, PIK interest
capitalization, 8%, 4/15/14............. B+ $ 4,762 $ 3,190,438
------------
8,869,188
------------
BULGARIA--2.7%
Repulic of Bulgaria IAB Series PDI
6.50%, 07/28/11(d)...................... B(c) 5,900 4,513,500
Republic of Bulgaria FLIRB Series A
Bearer 2.75%, 7/28/12................... B(c) 2,250 1,518,750
------------
6,032,250
------------
COLOMBIA--1.8%
Republic of Colombia 10.875%, 3/9/04.... BB+ 4,050 4,080,375
CROATIA--1.7%
Croatia Series A 6.456%, 7/31/10(d)..... BBB- 700 567,000
Croatia Series B 6.456%, 7/31/06(d)..... BBB- 3,808 3,270,068
------------
3,837,068
------------
IVORY COAST--0.2%
Ivory Coast PDI Series FRF 1.9%,
3/29/18(d)(h)........................... NR 15,500 571,225
MEXICO--3.5%
United Mexican States Global Bond
11.375%, 9/15/16........................ BB 3,750 4,017,187
United Mexican States Global Bond
11.50%, 5/15/26......................... BB 3,025 3,943,950
------------
7,961,137
------------
MOROCCO--0.8%
Kingdom of Morocco Series A 5.906%,
1/1/09(d)............................... NR 2,000 1,742,500
PERU--1.1%
Republic of Peru PDI 4.50%, 3/7/17...... BB 4,000 2,500,000
POLAND--1.3%
Poland Bearer PDI 6%, 10/27/14(d)....... BBB 3,195 2,835,563
RUSSIA--0.3%
Russia Treasury Bill OFZ Linked Notes
14%, 9/12/01(f)......................... NR 41,898 676,018
SOUTH KOREA--0.7%
Republic of Korea 8.875%, 4/15/08....... BBB- 1,500 1,560,563
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
TURKEY--0.4%
Republic of Turkey 11.875%, 11/5/04..... B $ 1,000 $ 1,013,750
VENEZUELA--0.9%
Republic of Venezuela DCB Series DL
6.313%, 12/18/07(d)..................... B+ 2,429 1,958,027
- -----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $49,600,245) 46,461,830
- -----------------------------------------------------------------------------
FOREIGN CORPORATE BONDS--8.1%
BRAZIL--0.5%
Globo Communicacoes e Participacoes SA
144A 10.50%, 12/20/06(b)................ B+ 1,500 1,166,700
CANADA--1.2%
MetroNet Communications Corp. 0%,
6/15/08(d).............................. BBB 3,300 2,574,000
CHILE--0.5%
Petropower I Funding Trust 144A 7.36%,
2/15/14(b).............................. BBB 1,387 1,193,033
CHINA--0.4%
Greater Beijing First Expressways Ltd.
9.50%, 6/15/07.......................... BB 1,700 850,000
GREECE--0.4%
Fage Dairy Industries SA 9%, 2/1/07..... BB 1,000 913,750
IRELAND--0.6%
Esat Telecom Group PLC 11.875%,
11/1/09(h).............................. B+ 1,300 1,409,063
MEXICO--2.2%
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)............................. BBB+(c) 2,827 2,825,530
Nacional Financiera SNC RegS 22%,
5/20/02(e).............................. NR 20,000 2,068,514
------------
4,894,044
------------
NETHERLANDS--0.9%
United Pan-Europe Communications NV 144A
11.25%, 11/1/09(b)(h)................... B- 2,000 2,112,609
POLAND--0.5%
TPSA Finance BV 144A 7.75%,
12/10/08(b)............................. BBB 1,175 1,108,906
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
<TABLE>
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------- ------------
<S> <C> <C> <C>
UNITED KINGDOM--0.9%
Orange PLC 144A 8.75%, 6/1/06(b)........ BB- $ 2,000 $ 2,060,000
- -----------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $19,142,711) 18,282,105
- -----------------------------------------------------------------------------
FOREIGN CONVERTIBLE BONDS--0.7%
RUSSIA--0.7%
Lukinter Finance Lukoil Cv. RegS 3.50%,
5/6/02.................................. CCC- 2,375 1,745,625
- -----------------------------------------------------------------------------
TOTAL FOREIGN CONVERTIBLE BONDS
(IDENTIFIED COST $2,729,608) 1,745,625
- -----------------------------------------------------------------------------
<CAPTION>
SHARES
-------
PREFERRED STOCKS--2.3%
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--2.3%
Global Crossing Holdings Ltd. PIK
10.50%.................................. 50,000 5,275,000
- -----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $4,956,875) 5,275,000
- -----------------------------------------------------------------------------
COMMON STOCKS--0.0%
PAPER & FOREST PRODUCTS--0.0%
Northampton Pulp LLC.(j)(k)............. 3,650 50,187
- -----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $348,720) 50,187
- -----------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
------- ------------
<S> <C> <C> <C>
WARRANTS--0.4%
FOREIGN GOVERNMENT--0.0%
Republic of Argentina Warrants(j)....... 1,440 $ 3,708
Republic of Argentina Warrants(j)....... 3,500 788
------------
4,496
------------
TELECOMMUNICATIONS (LONG DISTANCE)--0.4%
FirstCom Corp. 144A Warrants(b)(j)...... 137,550 825,300
- -----------------------------------------------------------------------------
TOTAL WARRANTS
(IDENTIFIED COST $0) 829,796
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.6%
(IDENTIFIED COST $236,034,068) 222,690,039
- -----------------------------------------------------------------------------
<CAPTION>
STANDARD
& POOR'S PAR
RATING VALUE
(Unaudited) (000)
------------ -------
SHORT-TERM OBLIGATIONS--0.3%
<S> <C> <C> <C>
COMMERCIAL PAPER--0.3%
Koch Industries, Inc. 5.34%, 11/1/99.... A-1+ $ 715 715,000
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(IDENTIFIED COST $715,000) 715,000
- -----------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.9%
(IDENTIFIED COST $236,749,068) 223,405,039(a)
Cash and receivables, less liabilities--1.1% 2,395,879
---------------------
NET ASSETS--100.0% $ 225,800,918
=====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $3,298,286 and gross
depreciation of $16,775,886 for federal income tax purposes. At October 31,
1999, the aggregate cost of securities for federal income tax purposes was
$236,882,639.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1999, these securities amounted to a value of $40,977,103 or 18.1% of net
assets.
(c) As rated by Moody's, Fitch or Duff & Phelps.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Par value represents Mexican Pesos.
(f) Par value represents Russian Rubles.
(g) Par value represents Argentine Pesos.
(h) Par value represents Euro.
(i) Security in default.
(j) Non-income producing.
(k) Security valued at fair value as determined in good faith by or under the
direction of the Directors.
See Notes to Financial Statements
9
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments securities at value
(Identified cost $236,749,068) $223,405,039
Foreign currency at value
(Identified cost $2,323,845) 2,309,070
Cash 139,942
Receivables
Interest 3,878,309
Investment securities sold 4,457,503
Fund shares sold 41,774
Other receivables 20,503
Prepaid expenses 5,144
------------
Total assets 234,257,284
------------
LIABILITIES
Payables
Investment securities purchased 7,165,129
Fund shares repurchased 466,942
Income distribution payable 327,120
Transfer agent fee 154,843
Distribution fee 112,394
Investment advisory fee 106,098
Financial agent fee 10,770
Directors' fee 3,933
Accrued expenses 109,137
------------
Total liabilities 8,456,366
------------
NET ASSETS $225,800,918
============
NET ASSETS CONSIST OF:
Capital paid in on shares of common
stock $290,158,119
Undistributed net investment loss (292,270)
Accumulated net realized loss (50,706,127)
Net unrealized depreciation (13,358,804)
------------
NET ASSETS $225,800,918
============
CLASS A
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $125,931,081) 11,606,835
Net asset value per share $10.85
Offering price per share
$10.85/(1-4.75%) $11.39
CLASS B
Shares of common stock outstanding,
$0.10 par value,
166,666,667 shares authorized (Net
Assets $92,725,224) 8,556,286
Net asset value and offering price
per share $10.84
CLASS C
Shares of common stock outstanding,
$0.10 par value,
166,666,666 shares authorized (Net
Assets $7,144,613) 657,527
Net asset value and offering price
per share $10.87
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 24,937,373
Dividends 261,042
Foreign taxes withheld (1,036)
--------------
Total investment income 25,197,379
--------------
EXPENSES
Investment advisory fee 1,437,307
Distribution fee, Class A 355,679
Distribution fee, Class B 1,099,295
Distribution fee, Class C 71,078
Financial agent fee 214,077
Transfer agent 484,545
Printing 64,476
Custodian 29,329
Professional 27,311
Registration 22,309
Directors 15,300
Miscellaneous 9,527
--------------
Total expenses 3,830,233
Custodian fees paid indirectly (13,580)
--------------
Net expenses 3,816,653
--------------
NET INVESTMENT INCOME 21,380,726
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on securities (39,212,910)
Net realized loss on foreign currency (577,772)
Net change in unrealized appreciation (depreciation)
on investments 33,202,090
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions 257,121
--------------
NET LOSS ON INVESTMENTS (6,331,471)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,049,255
==============
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/99 10/31/98
------------ ------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 21,380,726 $ 26,783,292
Net realized gain (loss) (39,790,682) (8,960,343)
Net change in unrealized appreciation (depreciation) 33,459,211 (41,335,563)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS 15,049,255 (23,512,614)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (12,709,813) (15,872,614)
Net investment income, Class B (8,978,439) (11,337,234)
Net investment income, Class C (572,784) (293,230)
Net investment income, Class M -- (18,101)
Net realized gains, Class A -- (5,130,635)
Net realized gains, Class B -- (4,099,438)
Net realized gains, Class C -- (23,783)
Net realized gains, Class M -- (3,353)
In excess of net investment income, Class A (143,541) --
In excess of net investment income, Class B (101,400) --
In excess of net investment income, Class C (6,469) --
In excess of net realized gains, Class A -- (902,131)
In excess of net realized gains, Class B -- (720,813)
In excess of net realized gains, Class C -- (4,182)
In excess of net realized gains, Class M -- (589)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (22,512,446) (38,406,103)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,210,416 and 3,001,172
shares, respectively) 24,800,587 38,782,884
Net asset value of shares issued from reinvestment of
distributions
(705,561 and 1,178,336 shares, respectively) 7,902,801 15,112,655
Cost of shares repurchased (5,266,656 and 4,402,648
shares, respectively) (58,965,528) (54,806,672)
------------ ------------
Total (26,262,140) (911,133)
------------ ------------
CLASS B
Proceeds from sales of shares (551,304 and 1,791,306
shares, respectively) 6,181,202 23,227,300
Net asset value of shares issued from reinvestment of
distributions
(372,459 and 616,801 shares, respectively) 4,168,689 7,896,496
Cost of shares repurchased (3,460,848 and 2,809,056
shares, respectively) (38,603,400) (35,444,257)
------------ ------------
Total (28,253,509) (4,320,461)
------------ ------------
CLASS C
Proceeds from sales of shares (297,288 and 595,059 shares,
respectively) 3,326,561 7,751,415
Net asset value of shares issued from reinvestment of
distributions
(32,606 and 18,346 shares, respectively) 365,221 227,373
Cost of shares repurchased (201,989 and 104,857 shares,
respectively) (2,240,507) (1,306,530)
------------ ------------
Total 1,451,275 6,672,258
------------ ------------
CLASS M
Proceeds from sales of shares (0 and 13,228 shares,
respectively) -- 176,977
Net asset value of shares issued from reinvestment of
distributions
(0 and 1,085 shares, respectively) -- 13,901
Cost of shares repurchased (0 and 23,542 shares,
respectively) -- (268,015)
------------ ------------
Total -- (77,137)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARES TRANSACTIONS (53,064,374) 1,363,527
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (60,527,565) (60,555,190)
NET ASSETS
Beginning of period 286,328,483 346,883,673
------------ ------------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS) OF
($292,270) AND $880,311, RESPECTIVELY] $225,800,918 $286,328,483
============ ============
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
YEAR ENDED OCTOBER 31
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.20 $ 13.50 $ 13.27 $ 12.56 $ 11.94
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.96 1.07 1.03 0.94 0.96
Net realized and unrealized gain
(loss) (0.30) (1.88) 0.18 0.72 0.61
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.66 (0.81) 1.21 1.66 1.57
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment income (1.00) (1.07) (0.98) (0.95) (0.95)
Dividends from net realized gains -- (0.36) -- -- --
In excess of net investment income (0.01) -- -- -- --
In excess of net realized gains -- (0.06) -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.01) (1.49) (0.98) (0.95) (0.95)
-------- -------- -------- -------- --------
CHANGE IN NET ASSET VALUE (0.35) (2.30) 0.23 0.71 0.62
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.85 $ 11.20 $ 13.50 $ 13.27 $ 12.56
======== ======== ======== ======== ========
Total return(1) 5.97% (6.86)% 9.22% 13.75% 13.83%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $125,931 $156,317 $191,486 $169,664 $168,875
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.14%(3) 1.08 % 1.04%(2) 1.07% 1.10%
Net investment income 8.59% 8.17 % 7.28% 7.56% 8.10%
Portfolio turnover 133% 157 % 295% 255% 201%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would be 1.13%.
12
See Notes to Financial Statements
<PAGE>
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------
YEAR ENDED OCTOBER 31
--------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.18 $ 13.48 $ 13.25 $ 12.54 $ 11.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.87 0.96 0.92 0.85 0.86
Net realized and unrealized gain
(loss) (0.29) (1.87) 0.18 0.71 0.61
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.58 (0.91) 1.10 1.56 1.47
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.91) (0.97) (0.87) (0.85) (0.86)
Dividends from net realized gains -- (0.36) -- -- --
In excess of net investment income (0.01) -- -- -- --
In excess of net realized gains -- (0.06) -- -- --
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.92) (1.39) (0.87) (0.85) (0.86)
-------- -------- -------- -------- --------
CHANGE IN NET ASSET VALUE (0.34) (2.30) 0.23 0.71 0.61
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.84 $ 11.18 $ 13.48 $ 13.25 $ 12.54
======== ======== ======== ======== ========
Total return(1) 5.15% (7.51)% 8.42% 12.84% 12.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $92,725 $124,075 $154,989 $142,869 $144,020
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(5) 1.84 % 1.79%(2) 1.82% 1.85%
Net investment income 7.83% 7.36 % 6.52% 6.80% 7.30%
Portfolio turnover 133% 157 % 295% 255% 201%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
-----------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
--------------------- 10/14/97 TO
1999 1998 10/31/97
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.21 $ 13.48 $ 14.22
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.88 0.97 0.04
Net realized and unrealized gain
(loss) (0.30) (1.85) (0.74)
-------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.58 (0.88) (0.70)
-------- -------- --------
LESS DISTRIBUTIONS
Dividends from net investment
income (0.91) (0.97) (0.04)
Dividends from net realized gains -- (0.36) --
In excess of net investment income (0.01) -- --
In excess of net realized gains -- (0.06) --
-------- -------- --------
TOTAL DISTRIBUTIONS (0.92) (1.39) (0.04)
-------- -------- --------
CHANGE IN NET ASSET VALUE (0.34) (2.27) (0.74)
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 10.87 $ 11.21 $ 13.48
======== ======== ========
Total return(1) 5.23% (7.36)% (5.00)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $ 7,145 $ 5,937 $ 284
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.89%(5) 1.88 % 1.62 %(2)(4)
Net investment income 7.83% 7.46 % 4.75 %(4)
Portfolio turnover 133% 157 % 295 %(3)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) For the year ended October 31, 1997, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(3) Not annualized
(4) Annualized
(5) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would be 1.88%.
See Notes to Financial Statements
13
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. (the "Fund") is organized
as a Maryland corporation and is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
Fund's investment objective is to maximize current income consistent with the
preservation of capital by investing in fixed income securities. The Fund offers
Class A, Class B and Class C shares. Class M shares have been closed. Class A
shares are sold with a front-end sales charge of up to 4.75%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a 1% contingent deferred sales charge if redeemed within one year of
purchase. All classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that each class bears
different distribution expenses and has exclusive voting rights with respect to
its distribution plan. Income and expenses of the Fund are borne pro rata by the
holders of all classes of shares, except that each class bears distribution
expenses unique to that class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
A. SECURITY VALUATION:
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service which utilizes information with respect to recent
sales, market transactions in comparable securities, quotations from dealers,
and various relationships between securities in determining value. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market. All other securities and assets are
valued at their fair value as determined in good faith by or under the direction
of the Directors.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on ex-dividend date
or, in case of certain foreign securities, as soon as the Fund is notified.
Discounts and premiums are amortized to income using the effective interest
method. Realized gains and losses are determined on the identified cost basis.
C. INCOME TAXES:
It is the policy of the Fund to comply with the requirements of the Internal
Revenue Code (the "Code"), applicable to regulated investment companies, and to
distribute substantially all of its taxable income to its shareholders. In
addition, the Fund intends to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Code. Therefore, no
provision for federal income taxes or excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders are declared and recorded daily. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of expiring capital loss carryforwards,
foreign currency gain/loss, and losses deferred due to wash sales and excise tax
regulations. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement dates of a portfolio transaction is treated as
a gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid is
treated as a gain or loss on foreign currency. The Fund does not separate that
portion of the results of operations arising from changes in exchange rates and
that portion arising from changes in the market prices of securities.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
G. OPTIONS:
The Fund may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies.
The Fund will realize a gain or loss upon the expiration or closing of the
option transaction. Gains and losses on written options are reported separately
in the Statement of Operations. When a written option is exercised, the proceeds
on sales or amounts paid are adjusted by the amount of premium received. Options
written are
14
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 (CONTINUED)
reported as a liability in the Statement of Assets and Liabilities and
subsequently marked-to-market to reflect the current value of the option. The
risk associated with written options is that the change in value of options
contracts may not correspond to the change in value of the hedged instruments.
In addition, losses may arise from changes in the value of the underlying
instruments, or if a liquid secondary market does not exist for the contracts.
The Fund may purchase options which are included in the Schedule of
Investments and subsequently marked-to-market to reflect the current value of
the option. When a purchased option is exercised, the cost of the security is
adjusted by the amount of premium paid. The risk associated with purchased
options is limited to the premium paid.
H. SWAP AGREEMENTS:
The Fund may invest in interest rate swap agreements for the purpose of
hedging against changes in interest rates or foreign currencies. Interest rate
swap agreements involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal). Interest rate swaps are marked to market daily based upon quotations
from market makers and the change, if any, is recorded as unrealized gain or
loss in the Statement of Operations. Net payments of interest are recorded as
interest income. Entering into these agreements involves, to varying degrees,
elements of credit and market risk in excess of the amounts recognized on the
Statement of Assets and Liabilities. Such risks involve the possibility that
there will be no liquid market for these agreements, that the counterparty to
the agreement may default on its obligation to perform and that there may be
unfavorable changes in the fluctuation of interest rates and/or exchange rates.
At October 31, 1999, the Fund had the following swaps outstanding:
<TABLE>
<CAPTION>
UNREALIZED
NOTIONAL APPRECIATION
AMOUNT (DEPRECIATION)
-------- --------------
<C> <S> <C>
$1,387,100 Agreement with Chase Manhattan
Bank terminating on November
1, 2001 to receive interest
at 14.23% in exchange for
payment of 11.875% on EUR
1,300,000.................... $14,787
2,100,000 Agreement with Morgan Stanley
Capital Services Inc.
terminating on November 1,
2004 to receive interest at
13.26% in exchange for
payment of 11.25% on
EUR 2,000,000................ 0
-------
$14,787
=======
</TABLE>
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee at an annual rate of
0.55% for the first $1 billion of the average daily net assets of the Fund.
As Distributor of the Fund's shares, Phoenix Equity Planning Corp. ("PEPCO"),
an indirect majority-owned subsidiary of PHL, has advised the Fund that it
retained net selling commissions of $18,370 for Class A shares, and deferred
sales charges of $225,596 for Class B and $4,202 for Class C shares for the year
ended October 31, 1999. In addition, the Fund pays PEPCO a distribution fee at
an annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00%
for Class C shares of the average daily net assets of the Fund. The Distribution
Plan for Class A shares provides for fees to be paid up to a maximum on an
annual basis of 0.30%; the Distributor has voluntarily agreed to limit the fee
to 0.25%. The Distributor has advised the Fund that of the total amount expensed
for the year ended October 31, 1999, $949,721 was retained by the Distributor,
$528,894 was paid to unaffiliated participants, and $47,437 was paid to W.S.
Griffith, an indirect subsidiary of PHL.
As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC, Inc. (subagent to PEPCO), plus (2) the documented cost of
PEPCO to provide financial reporting, tax services and oversight of subagent's
performance. The current fee schedule of PFPC, Inc ranges from 0.085% to 0.0125%
of the average daily net asset values of the Fund. Certain minimum fees and fee
waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust
Company as sub-transfer agent. For the year ended October 31, 1999, transfer
agent fees were $484,545 of which PEPCO retained $192,321 which is net of the
fees paid to State Street.
At October 31, 1999, PHL and affiliates held 77,931 Class A shares, and 15
Class B shares of the Fund with a combined value of $845,714.
3. PURCHASE AND SALE OF SECURITIES
During the year ended October 31, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency, securities,
amounted to $277,276,807 and $329,242,897, respectively. Purchases and sales of
long-term U.S. Government and agency securities amounted to $60,832,451, and
$60,850,928, respectively.
15
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 (CONTINUED)
4. CREDIT RISK
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as the Fund's ability to
repatriate such amounts.
5. LOAN AGREEMENTS
The Fund may invest in direct debt instruments, which are interests in amounts
owed by a corporate, governmental, or other borrower to lenders or lending
syndicates. The Fund's investments in loans may be in the form of participations
in loans or assignments of all or a portion of loans from third parties. A loan
is often administered by a bank or other financial institution (the lender) that
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. When investing in a loan participation, the
Fund has the right to receive payments of principal, interest and any fees to
which it is entitled only from the lender selling the loan agreement and only
upon receipt by the lender of payments from the borrower. The Fund generally has
no right to enforce compliance with the terms of the loan agreement with the
borrower. As a result, the Fund may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. For loans which the
Fund is a participant, the Fund may not sell its participation in the loan
without the lender's prior consent. When the Fund purchases assignments from
lenders it acquires direct rights against the borrower on the loan. Direct
indebtedness of emerging countries involves a risk that the government entities
responsible for the repayment of the debt may be unable, or unwilling to pay the
principal and interest when due.
6. CAPITAL LOSS CARRYOVERS
The Fund has capital loss carryover of $50,275,557 comprised of $8,655,748 and
$41,619,809 expiring in 2006 and 2007, respectively, which may be used to offset
future capital gains.
7. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded
reclassifications in the capital acocunts. These reclassifications have no
impact on the net asset value of the Fund and are designed generally to present
undistributed income and realized gains on a tax basis which is considered to be
more informative to the shareholder. As of October 31, 1999, the Fund decreased
undistributed net investment income by $40,861, increased accumulated net
realized loss by $143,865 and increased capital paid in on shares of common
stock by $184,726.
This report is not authorized for distribution to prospective investors in the
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. unless preceded or
accompanied by an effective Prospectus which includes information concerning the
sales charge, Fund's record and other pertinent information.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Directors and Shareholders of
Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Goodwin Multi-Sector Fixed Income Fund, Inc. (formerly known as
Phoenix Multi-Sector Fixed Income Fund, Inc.) (the "Fund") at October 31, 1999
and the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1999
17
<PAGE>
INVESTMENTS AT OCTOBER 31, 1999
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
AGENCY MORTGAGE-BACKED SECURITIES--1.5%
GNMA 6.50%, 6/15/28..................... Aaa $ 735 $ 702,481
- ---------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $731,361) 702,481
- ---------------------------------------------------------------------------
MUNICIPAL BONDS--13.8%
CALIFORNIA--0.9%
San Diego County Pension Obligation
Revenue Taxable Series A 6.24%,
8/15/02................................. Aaa 400 396,000
FLORIDA--1.1%
Tampa Solid Waste System Revenue Taxable
Series A 6.18%, 10/1/04................. Aaa 500 486,875
ILLINOIS--1.9%
Chicago O'Hare International Airport
Revenue Taxable 6.47%, 1/1/00........... Aaa 150 150,022
Chicago Tax Increment Taxable 6.25%,
6/1/02.................................. Aaa 750 743,438
-----------
893,460
-----------
MASSACHUSETTS--0.8%
Massachusetts State Port Authority
Revenue Taxable Series C 6.05%,
7/1/02.................................. Aa 400 394,000
MISSISSIPPI--1.9%
Mississippi State Taxable Series T
7.50%, 11/1/00.......................... Aa 855 864,901
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
NEW JERSEY--1.6%
New Jersey State Taxable Series G
6.375%, 8/1/03.......................... Aa $ 750 $ 742,500
OKLAHOMA--2.0%
Oklahoma City Airport Trust Taxable 10%,
7/1/12.................................. Aaa 900 918,738
PENNSYLVANIA--1.5%
Delaware River Port Authority PA & NJ
Revenue Taxable Series A 5.91%,
1/1/02.................................. Aaa 700 689,500
TEXAS--2.1%
Texas Water Resources Finance Authority
Revenue Taxable 6%, 8/15/02............. Aaa 1,000 983,750
- ---------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $6,489,522) 6,369,724
- ---------------------------------------------------------------------------
ASSET-BACKED SECURITIES--12.3%
Advanta Equipment Receivables 98-1, A4
5.98%, 12/15/06......................... Aaa 500 491,953
Capita Equipment Receivables Trust 97-1,
B 6.45%, 8/15/02........................ Aa 375 371,824
ContiMortgage Home Equity Loan Trust
98-1, B 7.86%, 4/15/29.................. Baa 952 870,782
Continental Airlines, Inc. Series 97-2D
7.522%, 6/30/01......................... Ba 215 213,634
</TABLE>
See Notes to Financial Statements 5
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
EQCC Home Equity Loan Trust 96-4, A4
6.47%, 8/15/10.......................... Aaa $ 103 $ 101,399
Fleetwood Credit Corp. Grantor Trust
96-A, B 6.95%, 10/17/11................. A 155 155,366
Ford Credit Auto Owner Trust 96-B, CTFS
6.55%, 2/15/02.......................... A 250 250,234
Garanti Grantor Trust 97-A 144A 7.31%
4/15/02(b).............................. BBB-(c) 416 390,852
Green Tree Home Improvement Loan Trust
99-E, A3 7.18%, 6/15/15................. AAA(c) 750 748,238
MBNA Master Credit Card Trust 98-C, C
144A 6.35%, 11/15/05(b)................. BBB(c) 525 507,937
Premier Auto Trust 97-3, B 6.52%,
1/6/03.................................. A 250 250,038
Premier Auto Trust 97-2, B 6.53%,
12/6/03................................. A 500 499,995
Triangle Funding Ltd. 98-2A, 3 144A
8.03%, 10/15/04(b)(d)................... BBB(c) 800 795,000
- ---------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $5,763,915) 5,647,252
- ---------------------------------------------------------------------------
CORPORATE BONDS--22.2%
AUTO PARTS & EQUIPMENT--1.0%
Collins & Aikman Corp. 11.50%, 4/15/06.. B 500 475,000
AUTOMOBILES--1.1%
Titan Tire Corp. 7%, 2/11/00............ NR 500 496,250
BANKS (MONEY CENTER)--0.5%
First Union Institutional Capital I
8.04%, 12/1/26.......................... A 250 237,188
BROADCASTING (TELEVISION, RADIO & CABLE)--2.2%
Century Communications Corp. 9.75%,
2/15/02................................. B 1,000 1,016,250
BUILDING MATERIALS--1.6%
Nortek, Inc. 9.875%, 3/1/04............. B 750 736,875
COMMUNICATIONS EQUIPMENT--1.1%
Williams Communications Group, Inc.
10.875%, 10/1/09........................ B 500 513,750
ELECTRIC COMPANIES--1.1%
CalEnergy Co., Inc. 7.52%, 9/15/08...... Baa 500 499,375
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
ENTERTAINMENT--0.3%
SFX Entertainment, Inc. 9.125%,
12/1/08................................. B $ 140 $ 129,500
FOODS--1.7%
SUPERVALU, Inc. 9.75%, 6/15/04.......... B 750 796,875
GAMING, LOTTERY & PARI-MUTUEL COMPANIES--1.7%
Horseshoe Gaming LLC Series B 9.375%,
6/15/07................................. B 500 497,500
International Game Technology 7.875%,
5/15/04................................. Ba 300 288,000
-----------
785,500
-----------
INSURANCE (MULTI-LINE)--1.1%
Willis Corroon Corp. 9%, 2/1/09......... Ba 600 531,000
MANUFACTURING (SPECIALIZED)--0.7%
Fisher Scientific International, Inc.
9%, 2/1/08.............................. B 325 307,125
OIL & GAS (EXPLORATION & PRODUCTION)--0.7%
Benton Oil & Gas Co. 9.375%, 11/1/07.... B 500 314,375
PAPER & FOREST PRODUCTS--1.2%
S.D. Warren Co. Series B 12%,
12/15/04................................ B 500 550,000
PUBLISHING--1.0%
News America, Inc. 6.625%, 1/9/08....... Baa 500 467,500
RETAIL (FOOD CHAINS)--2.2%
Safeway, Inc. 7%, 9/15/02............... Baa 1,000 999,120
RETAIL (SPECIALTY)--1.2%
Musicland Group, Inc. 9%, 6/15/03....... B 600 550,500
SERVICES (COMMERCIAL & CONSUMER)--0.7%
Anthony Crane Rentals LP Series B
10.375%, 8/1/08......................... B 350 304,500
TELECOMMUNICATIONS (LONG DISTANCE)--1.1%
Global Crossing Holdings Ltd. 9.625%,
5/15/08................................. Ba 500 506,250
- ---------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $10,660,221) 10,216,933
- ---------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES--24.7%
BTC Mortgage Investors Trust 97-S1, D
144A 6.95%, 12/31/09(b)................. BBB(c) 750 744,375
</TABLE>
6 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
Bear Stearns Mortgage Securities, Inc.
95-1, 1B3 144A 6.441%, 5/25/10(b)....... NR $ 533 $ 493,268
Bear Stearns Mortgage Securities, Inc.
95-1, 2B3 144A 7.40%, 7/25/10(b)........ NR 421 403,759
CS First Boston Mortgage Securities
Corp. 97-SPCE C 144A 7.077%,
2/20/07(b).............................. NR 750 723,984
CS First Boston Mortgage Securities
Corp. 98-C2, E 7.13%, 1/15/12........... Baa 250 212,656
Countrywide Funding Corp. 99-3, AF5
7.73%, 9/25/27.......................... Aaa 600 603,194
Criimi Mae Trust I 96-C1, A2 144A 7.56%,
6/30/33(b).............................. BBB(c) 400 379,750
G.E. Capital Mortgage Services, Inc.
94-26, B2 6.91%, 7/25/09(d)............. Baa 221 212,473
G.E. Capital Mortgage Services, Inc.
96-8, 1M 7.25%, 5/25/26................. AA(c) 289 280,192
IMPAC CMB Trust 98-2, M3 7.25%,
4/25/28................................. A(c) 572 568,544
Merrill Lynch Mortgage Investors, Inc.
95-C3, A2 6.805%, 12/26/25(d)........... AAA(c) 1,400 1,388,625
Norwest Asset Securities Corp. 99-10, B1
6.25%, 4/25/14.......................... AA(c) 513 473,547
PNC Mortgage Securities Corp. 97-6, A1
6.49%, 10/25/26......................... Aaa 144 144,461
PNC Mortgage Securities Corp. 96-3, B2
8%, 12/25/26............................ A 972 968,845
Prudential Securities Secured Financing
Corp. 98-C1, A1A1 6.105%, 11/15/02...... Aaa 834 825,520
Residential Funding Mortgage Securities
I 93-S23, M3 6.50%, 6/25/08............. BBB+(c) 620 597,301
Residential Funding Mortgage Securities
I 93-S29, M3 7%, 8/25/08................ AA+(c) 465 451,749
Residential Funding Mortgage Securities
I 96-S8, A4 6.75%, 3/25/11.............. AAA(c) 84 82,217
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
Resolution Trust Corp. 92-C3, B 9.05%,
8/25/23................................. AA(c) $ 101 $ 100,171
Resolution Trust Corp. 94-C1, C 8%,
6/25/26................................. A(c) 500 501,250
Structured Asset Securities Corp. 95-C1,
D 7.375%, 9/25/24....................... BBB(c) 1,000 993,125
Structured Asset Securites Corp. 95-C4,
E 144A 8.71%, 6/25/26(b)................ BB(c) 250 240,230
- ---------------------------------------------------------------------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $11,566,088) 11,389,236
- ---------------------------------------------------------------------------
FOREIGN GOVERNMENT SECURITIES--10.3%
ALGERIA--0.5%
Algeria Unaffected Loan, 6.75%,
3/4/00.................................. NR 250 246,875
ARGENTINA--1.9%
Republic of Argentina Series B 0%,
4/15/01................................. BBB(c) 1,000 888,500
BULGARIA--0.7%
Republic of Bulgaria FLIRB Series A
Bearer 2.75%, 7/28/12(d)................ B 500 337,500
COLOMBIA--1.7%
Republic of Colombia 10.875%, 3/9/04.... Ba 750 755,625
COSTA RICA--1.4%
Republic of Costa Rica 144A 9.335%,
5/15/09(b).............................. Ba 650 658,125
CROATIA--1.5%
Croatia Series B 6.456%, 7/31/06(d)..... Baa 519 445,918
Croatia Series A 6.456%, 7/31/10(d)..... Baa 300 243,000
-----------
688,918
-----------
PANAMA--1.6%
Republic of Panama RegS 7.875%,
2/13/02................................. Ba 750 727,500
POLAND--1.0%
Poland Bearer PDI 6%, 10/27/14(d)....... Baa 500 443,750
- ---------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(IDENTIFIED COST $4,713,901) 4,746,793
- ---------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements 7
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
<TABLE>
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
FOREIGN CORPORATE BONDS--13.2%
CHILE--0.5%
Banco Santiago SA 7%, 7/18/07........... Baa $ 250 $ 221,250
COLOMBIA--1.6%
Financiera Energetica Nacional SA EMTN
9%, 11/8/99............................. BB+(c) 750 751,875
MEXICO--5.3%
Banco Nacional de Mexico SA US$
Remittance Master Trust 144A 7.57%,
12/31/00(b)............................. BBB+(c) 321 321,083
Empresas ICA Sociedad Series 2 Tranche A
RegS 144A 11.875%, 5/30/01(b)........... B 250 240,000
Gruma SA de C.V. 7.625%, 10/15/07....... Ba 250 221,250
Grupo Elektra SA de C.V. 12.75%,
5/15/01................................. B(c) 500 482,500
Grupo Industrial Durango 12.625%,
8/1/03.................................. B 350 341,687
Nacional Financiera SNC RegS 22%,
5/20/02................................. Ba 5,000 517,128
Vicap SA 10.25%, 5/15/02................ Ba 350 325,063
-----------
2,448,711
-----------
POLAND--1.1%
TPSA Finance BV 144A 7.125%,
12/10/03(b)............................. Baa 500 490,000
SOUTH KOREA--2.6%
Korea Development Bank 7.125%, 4/22/04.. Baa 500 488,750
<CAPTION>
MOODY'S PAR
RATING VALUE
(Unaudited) (000) VALUE
------------ ------ -----------
<S> <C> <C> <C>
SOUTH KOREA--CONTINUED
Korea Development Bank 7.375%, 9/17/04.. Baa $ 750 $ 731,250
-----------
1,220,000
-----------
UNITED KINGDOM--1.1%
Bridas Corp. 12.50%, 11/15/99........... B 500 502,500
VENEZUELA--1.0%
PDVSA Finance Ltd. Series 98-1 6.45%,
2/15/04................................. A 500 451,305
- ---------------------------------------------------------------------------
TOTAL FOREIGN CORPORATE BONDS
(IDENTIFIED COST $6,220,763) 6,085,641
- ---------------------------------------------------------------------------
<CAPTION>
SHARES
------
PREFERRED STOCKS--0.6%
<S> <C> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)--0.6%
Global Crossing Holdings Ltd. PIK
10.50%.................................. 2,500 263,750
- ---------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(IDENTIFIED COST $248,125) 263,750
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS--98.6%
(IDENTIFIED COST $46,393,896) 45,421,810(a)
Cash and receivables, less liabilities--1.4% 630,714
--------------------
NET ASSETS--100.0% $ 46,052,524
====================
</TABLE>
(a) Federal Income Tax Information: Net unrealized depreciation of investment
securities is comprised of gross appreciation of $259,195 and gross
depreciation of $1,231,281 for federal income tax purposes. At October 31,
1999, the aggregate cost of securities for federal income tax purposes was
$46,393,896.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1999, these securities amounted to a value of $6,388,363 or 13.9% 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.
8 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Investment securities at value
(Identified cost $46,393,896) $ 45,421,810
Receivables
Investment securities sold 369,449
Interest and dividends 830,793
Fund shares sold 89,836
Receivable from adviser 67,122
Prepaid expenses 1,011
--------------
Total assets 46,780,021
--------------
LIABILITIES
Payables
Custodian 74,206
Investment securities purchased 352,980
Fund shares repurchased 67,121
Income distribution payable 53,676
Distribution fee 16,285
Transfer agent fee 13,911
Financial agent fee 8,699
Trustees' fee 5,641
Accrued expenses 134,978
--------------
Total liabilities 727,497
--------------
NET ASSETS $ 46,052,524
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 50,646,566
Undistributed net investment loss (4,395)
Accumulated net realized loss (3,616,548)
Net unrealized depreciation (973,099)
--------------
NET ASSETS $ 46,052,524
==============
CLASS A
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $26,071,039) 5,710,746
Net asset value per share $4.57
Offering price per share $4.57/(1-2.25%) $4.68
CLASS B
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $10,956,673) 2,405,345
Net asset value and offering price per share $4.56
CLASS C
Shares of beneficial interest outstanding, $0.01 par value,
unlimited authorization (Net Assets $9,024,812) 1,977,548
Net asset value and offering price per share $4.56
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $ 4,228,359
Dividends 13,050
--------------
Total investment income 4,241,409
--------------
EXPENSES
Investment advisory fee 283,982
Distribution fee, Class A 74,420
Distribution fee, Class B 88,111
Distribution fee, Class C 50,586
Financial agent fee 76,005
Transfer agent 85,732
Registration 39,466
Professional 36,089
Custodian 24,454
Printing 24,425
Trustees 17,008
Miscellaneous 47,003
--------------
Total expenses 847,281
Less expenses borne by investment adviser (245,212)
Custodian fees paid indirectly (1,361)
--------------
Net expenses 600,708
--------------
NET INVESTMENT INCOME 3,640,701
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities (1,221,900)
Net realized loss on foreign currency transactions (33,555)
Net change in unrealized appreciation (depreciation) on
foreign currency and foreign currency transactions (1,013)
Net change in unrealized appreciation (depreciation) on
investments 405,264
--------------
NET LOSS ON INVESTMENTS (851,204)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 2,789,497
==============
</TABLE>
See Notes to Financial Statements 9
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/99 10/31/98
----------- -----------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 3,640,701 $ 3,323,904
Net realized gain (loss) (1,255,455) (2,207,274)
Net change in unrealized appreciation
(depreciation) 404,251 (1,377,771)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,789,497 (261,141)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (2,209,345) (2,076,744)
Net investment income, Class B (807,843) (750,987)
Net investment income, Class C (720,412) (439,980)
In excess of net investment income,
Class A (9,014) --
In excess of net investment income,
Class B (3,296) --
In excess of net investment income,
Class C (2,939) --
Net realized gains, Class A -- (623,397)
Net realized gains, Class B -- (231,491)
Net realized gains, Class C -- (40,577)
----------- -----------
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS (3,752,849) (4,163,176)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares
(3,582,772 and 6,014,412 shares,
respectively) 16,755,923 29,551,389
Net asset value of shares issued from
reinvestment of distributions
(377,128 and 481,339 shares,
respectively) 1,757,357 2,357,562
Cost of shares repurchased (5,376,778
and 5,014,505 shares, respectively) (25,115,199) (24,593,058)
----------- -----------
Total (6,601,919) 7,315,893
----------- -----------
CLASS B
Proceeds from sales of shares (757,791
and 1,098,057 shares, respectively) 3,535,661 5,370,293
Net asset value of shares issued from
reinvestment of distributions
(126,951 and 150,247 shares,
respectively) 589,906 735,674
Cost of shares repurchased (1,109,023
and 656,994 shares, respectively) (5,162,766) (3,148,967)
----------- -----------
Total (1,037,199) 2,957,000
----------- -----------
CLASS C
Proceeds from sales of shares
(1,484,770 and 3,178,002 shares,
respectively) 6,906,958 15,654,043
Net asset value of shares issued from
reinvestment of distributions
(124,900 and 90,036 shares,
respectively) 581,636 436,654
Cost of shares repurchased (1,922,094
and 1,091,595 shares, respectively) (8,935,139) (5,287,237)
----------- -----------
Total (1,446,545) 10,803,460
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (9,085,663) 21,076,353
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (10,049,015) 16,652,036
NET ASSETS
Beginning of period 56,101,539 39,449,503
----------- -----------
END OF PERIOD [INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME (LOSS) OF
($4,395) AND $96,898, RESPECTIVELY] $46,052,524 $56,101,539
=========== ===========
</TABLE>
10 See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
YEAR ENDED OCTOBER 31
---------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.66 $ 5.06 $ 4.91 $ 4.74 $ 4.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.33(2) 0.34(2) 0.34(2) 0.33(2) 0.33(2)
Net realized and unrealized gain
(loss) (0.08) (0.29) 0.14 0.17 0.13
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.25 0.05 0.48 0.50 0.46
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.34) (0.34) (0.33) (0.33) (0.33)
Dividends from net realized gains -- (0.11) -- -- --
In excess of net investment income 0.00(4) -- -- -- --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.34) (0.45) (0.33) (0.33) (0.33)
--------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.09) (0.40) 0.15 0.17 0.13
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 4.57 $ 4.66 $ 5.06 $ 4.91 $ 4.74
========= ========= ========= ========= =========
Total return(1) 5.57% 0.85% 10.08% 10.91% 10.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $26,071 $33,212 $28,557 $13,702 $9,303
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.00%(3) 1.00% 1.00% 1.00% 1.00%
Net investment income 7.21% 6.90% 6.54% 6.88% 7.07%
Portfolio turnover 122% 126% 246% 232% 344%
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.03, $0.04, $0.06 and $0.08, respectively.
(3) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(4) Amount is less than $0.01.
See Notes to Financial Statements
11
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------------------------
YEAR ENDED OCTOBER 31
---------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 4.65 $ 5.06 $ 4.91 $ 4.74 $ 4.61
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.31(2) 0.31(2) 0.31(2) 0.31(2) 0.30(2)
Net realized and unrealized gain
(loss) (0.08) (0.29) 0.15 0.17 0.13
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.23 0.02 0.46 0.48 0.43
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
Dividends from net investment income (0.32) (0.32) (0.31) (0.31) (0.30)
Dividends from net realized gains -- (0.11) -- -- --
In excess of net investment income 0.00(7) -- -- -- --
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (0.32) (0.43) (0.31) (0.31) (0.30)
--------- --------- --------- --------- ---------
CHANGE IN NET ASSET VALUE (0.09) (0.41) 0.15 0.17 0.13
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 4.56 $ 4.65 $ 5.06 $ 4.91 $ 4.74
========= ========= ========= ========= =========
Total return(1) 5.04% 0.12% 9.51% 10.36% 9.71%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $10,957 $12,225 $10,318 $5,943 $4,659
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.50%(6) 1.50% 1.50% 1.50% 1.50%
Net investment income 6.70% 6.44% 6.05% 6.38% 6.59%
Portfolio turnover 122% 126% 246% 232% 344%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
----------------------------------------
FROM
YEAR ENDED OCTOBER 31 INCEPTION
------------------------ 10/1/97 TO
1999 1998 10/31/97
<S> <C> <C> <C>
Net asset value, beginning of period $ 4.66 $ 5.06 $ 5.15
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.33(3) 0.34(3) 0.03(3)
Net realized and unrealized gain
(loss) (0.10) (0.30) (0.09)
--------- --------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.23 0.04 (0.06)
--------- --------- --------
LESS DISTRIBUTIONS
Dividends from net investment income (0.33) (0.33) (0.03)
Dividends from net realized gains -- (0.11) --
In excess of net investment income 0.00(7) -- --
--------- --------- --------
TOTAL DISTRIBUTIONS (0.33) (0.44) (0.03)
--------- --------- --------
CHANGE IN NET ASSET VALUE (0.10) (0.40) (0.09)
--------- --------- --------
NET ASSET VALUE, END OF PERIOD $ 4.56 $ 4.66 $ 5.06
========= ========= ========
Total return(1) 5.07% 0.59% (1.30)%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $9,025 $10,665 $575
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.25%(6) 1.25% 1.25 %(4)
Net investment income 6.95% 6.70% 5.51 %(4)
Portfolio turnover 122% 126% 246 %(5)
</TABLE>
(1) Maximum sales charges are not reflected in the total return calculation.
(2) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.03, $0.04, $0.06 and $0.08, respectively.
(3) Includes reimbursement of operating expenses by investment adviser of
$0.02, $0.03 and $0.04, respectively.
(4) Annualized
(5) Not annualized
(6) For the year ended October 31, 1999, the ratio of operating expenses to
average net assets excludes the effect of expense offsets for custodian
fees; if expense offsets were included, the ratio would not significantly
differ.
(7) Amount is less than $0.01.
12
See Notes to Financial Statements
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
Phoenix-Goodwin 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.
F. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains collateral for
the securities purchased. Securities purchased on a when-issued or delayed
delivery basis begin earning interest on the settlement date.
13
<PAGE>
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999 (CONTINUED)
2. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Fund, the adviser, Phoenix Investment
Counsel, Inc. ("PIC"), an indirect majority-owned subsidiary of Phoenix Home
Life Mutual Insurance Company ("PHL"), is entitled to a fee at an annual rate of
0.55% 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 year ended October 31, 1999, the Adviser has reimbursed
the Fund $245,212 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 $3,113 for Class A shares and deferred sales
charges of $33,795 for Class B shares for the year ended October 31, 1999. In
addition, the Fund pays PEPCO a distribution fee at an annual rate of 0.25% for
Class A shares, 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 year ended
October 31, 1999, $84,933 was retained by the Distributor, $110,057 was paid to
unaffiliated participants, and $18,127 was paid to W.S. Griffith, an indirect
subsidiary of PHL.
As Financial Agent of the Fund, PEPCO receives a financial agent fee equal to
the sum of (1) the documented cost of fund accounting and related services
provided by PFPC Inc. (subagent to PEPCO), plus (2) the documented cost to PEPCO
to provide financial reporting, tax services and oversight of subagent's
performance. The current fee schedule of PFPC Inc. ranges from 0.085% to 0.0125%
of the average daily net asset values of the Fund. Certain minimum fees and fee
waivers may apply.
PEPCO serves as the Fund's Transfer Agent with State Street Bank and Trust as
sub-transfer agent. For the year ended October 31, 1999, transfer agent fees
were $85,732 of which PEPCO retained $6,504 which is net of the fees paid to
State Street.
At October 31, 1999, PHL and affiliates held 33,059 Class A shares with a
value of $151,080.
3. PURCHASE AND SALE OF SECURITIES
During the year ended October 31, 1999, purchases and sales of investments,
excluding short-term securities and U.S. Government and agency securities,
amounted to $51,127,928 and $57,240,898, respectively. Purchases and sales of
long-term U.S. Government and agency securities amounted to $10,400,545 and
$11,439,480, respectively.
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.
5. CAPITAL LOSS CARRYOVERS
The Fund has capital loss carryover of $3,616,548 comprised of $2,039,934 and
$1,576,614 expiring in 2006 and 2007, respectively, which may be used to offset
future capital gains.
6. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Fund has recorded
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, 1999, the Fund increased
undistributed net investment income by $10,855, and increased accumulated net
realized loss by $10,855.
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.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO]
To the Trustees and Shareholders of
Phoenix-Goodwin Multi-Sector Short Term Bond Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for bond ratings), and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
the Phoenix-Goodwin Multi-Sector Short Term Bond Fund (formerly known as Phoenix
Multi-Sector Short Term Bond Fund) (the "Fund") at October 31, 1999, and the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1999
15
<PAGE>
PHOENIX MULTI-SERIES TRUST
PART C--OTHER INFORMATION
ITEM 23. EXHIBITS
a.* Agreement and Declaration of Trust of the Registrant, dated
August 17, 2000, filed via Edgar herewith.
b.* Bylaws of the Registrant filed via Edgar herewith.
c. Reference is made to Registrant's Agreement and Declaration of
Trust. See Exhibit a.
d.1. Management Agreement between Phoenix-Goodwin Multi-Sector
Short Term Bond Fund and National Securities & Research
Corporation dated May 14, 1993, assigned to Phoenix Investment
Counsel, Inc. effective June 1, 1998, filed via EDGAR as
Exhibit 5 with Post-Effective Amendment No. 6 on February 25,
1997 and incorporated herein by reference.
d.2. Amendment to Management Agreement between Phoenix-Goodwin
Multi-Sector Short Term Bond Fund and National Securities &
Research Corporation dated January 1, 1994, assigned to
Phoenix Investment Counsel, Inc. effective June 1, 1998, filed
via EDGAR as Exhibit 5.1 with Post-Effective Amendment No. 6
on February 25, 1997, and incorporated herein by reference.
d.3. Management Agreement between Multi-Sector Fixed Income Fund
and National Securities & Research Corporation dated May 14,
1993, assigned to Phoenix Investment Counsel, Inc. effective
June 1, 1998, filed via EDGAR as Exhibit 5 with Post-Effective
Amendment No. 10 of the Phoenix-Goodwin Multi-Sector Fixed
Income Fund, Inc. on February 24, 1997 and incorporated herein
by reference.
d.4. Amendment to Management Agreement between Multi-Sector Fixed
Income Fund and National Securities & Research Corporation
dated January 1, 1994, assigned to Phoenix Investment Counsel,
Inc. effective June 1, 1998, filed via EDGAR as Exhibit 5.1
with Post-Effective Amendment No. 10 of the Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc. on February 24, 1997 and
incorporated herein by reference.
e.1. Underwriting Agreement between Registrant and Phoenix Equity
Planning Corporation ("Equity Planning") dated November 19,
1997, filed via EDGAR as Exhibit 6.1 with Post-Effective
Amendment No. 9 on February 25, 1998 and incorporated herein
by reference.
e.2. Form of Sales Agreement between Phoenix Equity Planning
Corporation and dealers, filed via EDGAR as Exhibit 6.2 with
Post Effective Amendment No. 9 on February 25, 1998 and
incorporated herein by reference.
e.3. Form of Supplement to Phoenix Family of Funds Sales Agreement
filed via EDGAR as Exhibit 6.3 with Post Effective Amendment
No. 9 on February 25, 1998 and incorporated herein by
reference.
e.4. Form of Financial Institution Sales Contract for the Phoenix
Family of Funds filed via EDGAR as Exhibit 6.4 with Post
Effective Amendment No. 9 on February 25, 1998 and
incorporated herein by reference.
f. None.
g.1 Custodian Contract between Registrant and State Street Bank
and Trust Company dated May 1, 1997, filed via EDGAR as
Exhibit 8.1 with Post Effective Amendment No. 9 on February
25, 1998 and incorporated herein by reference.
h.1. Transfer Agency and Service Agreement between Registrant and
Phoenix Equity Planning Corporation dated June 1, 1994, filed
via EDGAR as Exhibit 9.1 with Post-Effective Amendment No. 6
on February 25, 1997, and incorporated by reference.
C-1
<PAGE>
h.2. Sub-Transfer Agent Agreement between Phoenix Equity Planning
Corporation and State Street Bank and Trust Company, filed via
EDGAR as Exhibit 9.2 with Post Effective Amendment No. 9 on
February 25, 1998 and incorporated herein by reference.
h.3. Amended and Restated Financial Agent Agreement between
Registrant and Phoenix Equity Planning Corporation dated
November 19, 1997, filed via EDGAR as Exhibit 9.3 with Post
Effective Amendment No. 9 on February 25, 1998 and
incorporated herein by reference.
h.4. First Amendment to the Amended and Restated Financial Agent
Agreement between Registrant and Phoenix Equity Planning
Corporation effective as of February 27, 1998, filed via EDGAR
with Post-Effective Amendment No. 11 on March 1, 1999 and
incorporated herein by reference.
h.5. Second Amendment to Amended and Restated Financial Agent
Agreement between Registrant and Phoenix Equity Planning
Corporation dated July 31, 1998, filed via EDGAR with
Post-Effective Amendment No. 11 on March 1, 1999 and
incorporated herein by reference.
i.* Opinion as to legality of the shares filed via EDGAR herewith.
j.* Consent of Independent Accountants filed via EDGAR herewith.
k. Not applicable.
l. None.
m.1. Amended and Restated Distribution Plan for Class A Shares of
the Multi-Sector Short Term Bond Fund, filed via EDGAR as
Exhibit 15.1 with Post-Effective Amendment No. 9 on February
25, 1998, and incorporated herein by reference.
m.2. Amended and Restated Distribution Plan for Class A Shares of
the Multi-Sector Fixed Income Fund, filed via EDGAR as Exhibit
15.1 with Post-Effective Amendment No. 13 of Phoenix-Goodwin
Multi-Sector Fixed Income Fund, Inc. on February 25, 1998 and
incorporated herein by reference.
m.3. Distribution Plans for Class B Shares, filed via EDGAR with
Post-Effective Amendment No. 13 on August 15, 2000 and
incorporated herein by reference.
m.4. Distribution Plans for Class C Shares, filed via EDGAR with
Post-Effective Amendment No. 13 on August 15, 2000 and
incorporated herein by reference.
n. Financial Data Schedules.
o.1. Amended and Restated Rule 18f-3 Multi-Class Distribution Plan,
effective November 1, 1999, filed via EDGAR with
Post-Effective Amendment No. 13 on August 15, 2000 and
incorporated herein by reference.
o.2. First Amendment to Amended and Restated Plan, pursuant to Rule
18f-3 dated February 24, 2000, filed via EDGAR with
Post-Effective Amendment No. 13 on August 15, 2000 and
incorporated herein by reference.
p.1. Power of attorney for Mr. Roth, filed via EDGAR with
Post-Effective Amendment No. 10 on December 30, 1998 and
incorporated herein by reference.
p.2. Powers of Attorney for all other Trustees filed via EDGAR with
Post-Effective Amendment No. 13 on August 15, 2000 and
incorporated herein by reference.
q. Codes of Ethics of the Trust, the Adviser and the Distributor
filed via EDGAR with Post-Effective Amendment No. 13 on August
15, 2000 and incorporated herein by reference.
----------
*Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
No person is controlled by, or under common control with, the Fund.
C-2
<PAGE>
ITEM 25. INDEMNIFICATION
The Agreement and Declaration of Trust dated August 17, 2000 and the
By-Laws of the Registrant provide that no trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties. The Management Agreement, Underwriting
Agreement, Custody Agreement and Transfer Agency Agreement each provides that
the Trust will indemnify the other party (or parties, as the case may be) to the
agreement for certain losses.
Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "Act"), may be available to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Management of the Funds" in the Prospectus and "Services of the
Adviser" and "Management of the Fund" in the Statement of Additional
Information, each of which is included in this Post-Effective Amendment to the
Registration Statement.
For information as to the business, profession, vocation or employment of a
substantial nature of directors and officers of Phoenix Investment Counsel, Inc.
the Adviser, reference is made to the Adviser's current Form ADV (SEC File No.
801-5995) filed under the Investment Advisers Act of 1940 and incorporated
herein by reference.
ITEM 27. PRINCIPAL UNDERWRITER
(a) Equity Planning serves as the principal underwriter for the following
registrants:
Phoenix-Aberdeen Series Fund, Phoenix-Aberdeen Worldwide Opportunities Fund,
Phoenix Duff & Phelps Institutional Mutual Funds, Phoenix-Engemann Funds,
Phoenix Equity Series Fund, Phoenix-Euclid Funds, Phoenix-Goodwin California Tax
Exempt Bond Fund, Phoenix Investment Trust 97, Phoenix Multi-Portfolio Fund,
Phoenix Multi-Series Trust, Phoenix-Oakhurst Income & Growth Fund,
Phoenix-Oakhurst Strategic Allocation Fund, Phoenix Series Fund, Phoenix
Strategic Equity Series Fund, Phoenix-Zweig Trust, Phoenix Home Life Variable
Universal Life Account, Phoenix Home Life Variable Accumulation Account, PHL
Variable Accumulation Account, Phoenix Life and Annuity Variable Universal Life
Account and PHL Variable Separate Account MVA1.
(b) Directors and Executive Officers of Phoenix Equity Planning Corporation
are as follows:
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
PRINCIPAL ADDRESS WITH DISTRIBUTOR REGISTRANT
----------------- --------------------- --------------------------
<S> <C> <C>
Michael E. Haylon Director Executive Vice President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
Philip R. McLoughlin Director and Chairman Trustee and President
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITIONS AND OFFICES POSITIONS AND OFFICES WITH
PRINCIPAL ADDRESS WITH DISTRIBUTOR REGISTRANT
----------------- --------------------- --------------------------
<S> <C> <C>
William R. Moyer Director, Executive Vice Vice President
56 Prospect Street President, Chief Financial
P.O. Box 150480 Officer and Treasurer
Hartford, CT 06115-0480
John F. Sharry President, Executive Vice President
56 Prospect Street Retail Division
P.O. Box 150480
Hartford, CT 06115-0480
Barry Mandinach Executive Vice President and None
900 Third Avenue Chief Marketing Officer,
New York, NY 10022 Retail Division
Robert Tousingnant Executive Vice President and None
56 Prospect Street Chief Sales Officer
P.O. Box 150480
Hartford, CT 06115-0480
G. Jeffrey Bohne Vice President, Secretary
101 Munson Street Mutual Fund
P.O. Box 810 Customer Service
Greenfield, MA 01301-0810
Robert S. Driessen Vice President, Compliance Vice President and
56 Prospect Street Assistant Secretary
P.O. Box 150480
Hartford, CT 06115-0480
Jacqueline M. Porter Assistant Vice President, Assistant Treasurer
56 Prospect Street Financial Reporting
P.O. Box 150480
Hartford, CT 06115-0480
</TABLE>
(c) To the best of the Registrant's knowledge, no commissions or other
compensation was received by any principal underwriter who is not an affiliated
person of the Registrant or an affiliated person of such affiliated person,
directly or indirectly, from the Registrant during the Registrant's last fiscal
year.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder include Registrant's investment
adviser, Phoenix Investment Counsel, Inc.; Registrant's financial agent,
transfer agent and principal underwriter, Phoenix Equity Planning Corporation;
Registrant's dividend disbursing agent, State Street Bank and Trust Company; and
Registrant's custodian, State Street Bank and Trust Company. The address of the
Secretary of the Trust is 101 Munson Street, Greenfield, Massachusetts 01301;
the address of Phoenix Investment Counsel, Inc. is 56 Prospect Street, Hartford,
Connecticut 06115; the address of Phoenix Equity Planning Corporation is 100
Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200; the
address of the dividend disbursing agent is P.O. Box 8301, Boston, Massachusetts
02266-8301, Attention: Phoenix Funds, and the address for the custodian is P.O.
Box 8301, Boston, Massachusetts 02266-8301.
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Fund certifies that it meets all of the
requirements for effectiveness of this registration statement under rule 485(b)
under the Securities Act and has duly caused this amendment to its registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Hartford, and State of Connecticut on the 30th day of October, 2000.
PHOENIX MULTI-SERIES TRUST
ATTEST: /s/ Pamela S. Sinofsky By: /s/ Philip R. McLoughlin
---------------------- ----------------------
Pamela S. Sinofsky Philip R. McLoughlin
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons in
the capacities indicated, on the 30th day of October, 2000.
SIGNATURE TITLE
--------- -----
Trustee
---------------------------------------------------
Robert Chesek*
Trustee
---------------------------------------------------
E. Virgil Conway*
/s/Nancy G. Curtiss Treasurer
--------------------------------------------------- (Principal Financial and
Nancy G. Curtiss Accounting Officer)
Trustee
---------------------------------------------------
Harry Dalzell-Payne*
Trustee
---------------------------------------------------
Francis E. Jeffries*
Trustee
---------------------------------------------------
Leroy Keith, Jr.*
/s/ Philip R. McLoughlin President and Trustee
--------------------------------------------------- (Principal Executive
Philip R. McLoughlin Officer)
Trustee
---------------------------------------------------
Everett L. Morris*
Trustee
---------------------------------------------------
James M. Oates*
Trustee
---------------------------------------------------
Herbert Roth, Jr.*
Trustee
---------------------------------------------------
Richard E. Segerson*
Trustee
---------------------------------------------------
Lowell P. Weicker, Jr.*
*By /s/ Philip R. McLoughlin
--------------------------------------------
Philip R. McLoughlin
*Philip R. McLoughlin Attorney-in-fact pursuant to powers of attorney.
S-1
