[Front cover]
[Phoenix double-diamond logo] Phoenix Home Life
The Big Edge Choice(SM)
Annual Reports for:
PHL Variable
Accumulation Account
The Phoenix Edge Series Fund
Wanger Advisors Trust
December 31, 1995
<PAGE>
TABLE OF CONTENTS
PHL VARIABLE ACCUMULATION ACCOUNT
Money Market Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Growth Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Bond Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Total Return Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
International Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Balanced Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Real Estate Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Wanger International Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Wanger U.S. Small Cap Sub-Account
Statement of Assets and Liabilities 2
Statement of Operations 3
Statement of Changes in Net Assets 4
Financial Highlights 5
Notes to Financial Statements 6
THE PHOENIX EDGE SERIES FUND
Money Market Series
Schedule of Investments 2-2
Statement of Assets and Liabilities 2-4
Statement of Operations 2-4
Statement of Changes in Net Assets 2-5
Financial Highlights 2-5
Growth Series
Schedule of Investments 2-7
Statement of Assets and Liabilities 2-9
Statement of Operations 2-9
Statement of Changes in Net Assets 2-10
Financial Highlights 2-10
Bond Series
Schedule of Investments 2-12
Statement of Assets and Liabilities 2-14
Statement of Operations 2-14
Statement of Changes in Net Assets 2-15
Financial Highlights 2-15
Total Return Series
Schedule of Investments 2-17
Statement of Assets and Liabilities 2-19
Statement of Operations 2-19
Statement of Changes in Net Assets 2-20
Financial Highlights 2-20
International Series
Schedule of Investments 2-22
Statement of Assets and Liabilities 2-24
Statement of Operations 2-24
Statement of Changes in Net Assets 2-25
Financial Highlights 2-25
Balanced Series
Schedule of Investments 2-27
Statement of Assets and Liabilities 2-30
Statement of Operations 2-30
Statement of Changes in Net Assets 2-31
Financial Highlights 2-31
Real Estate Series
Schedule of Investments 2-33
Statement of Assets and Liabilities 2-34
Statement of Operations 2-34
Statement of Changes in Net Assets 2-35
Financial Highlights 2-35
Notes to Financial Statements 2-36
WANGER ADVISORS TRUST
Wanger International Small Cap Advisor
Schedule of Investments 3-3
Statement of Assets and Liabilities 3-7
Statement of Operations 3-8
Statement of Changes in Net Assets 3-8
Financial Highlights 3-9
Notes to Financial Statements 3-10
Wanger U.S. Small Cap Advisor
Schedule of Investments 4-3
Statement of Assets and Liabilities 4-7
Statement of Operations 4-8
Statement of Changes in Net Assets 4-8
Financial Highlights 4-9
Notes to Financial Statements 4-10
<PAGE>
This annual report for the PHL
Variable Accumulation Account
from inception July 31, 1995 to December 31,
1995, contains the financial statements for the
Account's various annuity contracts. This report
also contains a list of portfolio holdings,
management's discussion of performance and
investment strategy and financial statements
for each of the mutual funds that comprise the
Phoenix Edge Series Fund, and the
Wanger Advisors Trust.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Assets
Investments at cost $5,983,319 $3,540,155 $ 336,469
=========== ========== ===========
Investment in The Phoenix
Edge Series Fund, at market $5,983,319 $3,291,580 $ 335,905
----------- ---------- -----------
Total assets 5,983,319 3,291,580 335,905
Liabilities
Accrued expenses to related
party 2,181 3,005 207
----------- ---------- -----------
Net assets $5,981,138 $3,288,575 $ 335,698
=========== ========== ===========
Accumulation units outstanding 5,893,015 3,036,889 319,171
=========== ========== ===========
Unit value $ 1.014954 $ 1.082876 $1.051781
=========== ========== ===========
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Assets
Investments at cost $3,169,652 $ 132,940 $ 755,114
=========== ========== ===========
Investment in The Phoenix
Edge Series Fund, at market $3,044,400 $ 134,374 $ 753,665
----------- ---------- -----------
Total assets 3,044,400 134,374 753,665
Liabilities
Accrued expenses to related
party 2,936 110 679
----------- ---------- -----------
Net assets $3,041,464 $ 134,264 $ 752,986
=========== ========== ===========
Accumulation units outstanding 2,918,821 132,979 718,774
=========== ========== ===========
Unit value $ 1.042018 $1.009660 $1.047597
=========== ========== ===========
Wanger
International Wanger U.S.
Real Estate Small Cap Small Cap
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Assets
Investments at cost $ 236,962 $ 272,420 $1,269,914
=========== ========== ===========
Investment in The Phoenix
Edge Series Fund, at market $ 237,701 $ -- $ --
Investment in The Wanger
Advisors Trust, at market -- 280,194 1,250,499
----------- ---------- -----------
Total assets 237,701 280,194 1,250,499
Liabilities
Accrued expenses to related
party 46 141 1,138
----------- ---------- -----------
Net assets $ 237,655 $ 280,053 $1,249,361
=========== ========== ===========
Accumulation units outstanding 226,316 257,362 1,312,796
=========== ========== ===========
Unit value $1.050105 $1.088168 $ 0.951679
=========== ========== ===========
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS
From inception July 31, 1995 through December 31, 1995
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Investment income
Distributions $20,806 $ 6,347 $6,976
Expenses
Mortality and expense risk
charges 4,988 7,160 332
----------- ---------- -----------
Net investment income (loss) 15,818 (813) 6,644
----------- ---------- -----------
Net realized gain (loss) from
share transactions -- (397) 9
Net realized gain distribution
from Fund -- 346,480 --
Net unrealized depreciation on
investment -- (248,575) (564)
----------- ---------- -----------
Net gain (loss) on investments -- 97,508 (555)
----------- ---------- -----------
Net increase in net assets
resulting from operations $15,818 $ 96,695 $6,089
=========== ========== ===========
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Investment income
Distributions $ 33,388 $ 33 $ 6,165
Expenses
Mortality and expense risk
charges 7,680 243 1,168
----------- ---------- -----------
Net investment income (loss) 25,708 (210) 4,997
----------- ---------- -----------
Net realized gain (loss) from
share transactions 380 (305) (40)
Net realized gain distribution
from Fund 178,778 191 13,825
Net unrealized appreciation
(depreciation) on investment (125,252) 1,434 (1,449)
----------- ---------- -----------
Net gain on investments 53,906 1,320 12,336
----------- ---------- -----------
Net increase in net assets
resulting from operations $ 79,614 $1,110 $17,333
=========== ========== ===========
Wanger Wanger
International U.S.
Real Estate Small Cap Small Cap
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
Investment income
Distributions $2,705 $ -- $ --
Expenses
Mortality and expense risk
charges 86 260 3,079
----------- ---------- -----------
Net investment income (loss) 2,619 (260) (3,079)
----------- ---------- -----------
Net realized gain (loss) from
share transactions 242 (6) 29
Net realized gain distribution
from Fund 556 -- --
Net unrealized appreciation
(depreciation) on investment 739 7,774 (19,415)
----------- ---------- -----------
Net gain (loss) on investments 1,537 7,768 (19,386)
----------- ---------- -----------
Net increase (decrease) in net
assets resulting from
operations $4,156 $7,508 $(22,465)
=========== ========== ===========
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
From inception July 31, 1995 through December 31, 1995
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
From operations
Net investment income (loss) $ 15,818 $ (813) $ 6,644
Net realized gain -- 346,083 9
Net unrealized depreciation -- (248,575) (564)
----------- ---------- -----------
Net increase in net assets
resulting from operations 15,818 96,695 6,089
----------- ---------- -----------
From accumulation unit
transactions
Participant deposits 7,285,767 2,481,750 226,998
Participant transfers (1,318,515) 713,637 102,628
Participant withdrawals (1,932) (3,507) (17)
----------- ---------- -----------
Net increase in net assets
resulting from participant
transactions 5,965,320 3,191,880 329,609
----------- ---------- -----------
Net increase in net assets 5,981,138 3,288,575 335,698
Net assets
Beginning of period 0 0 0
----------- ---------- -----------
End of period $ 5,981,138 $3,288,575 $335,698
=========== ========== ===========
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
From operations
Net investment income (loss) $ 25,708 $ (210) $ 4,997
Net realized gain (loss) 179,158 (114) 13,785
Net unrealized appreciation
(depreciation) (125,252) 1,434 (1,449)
----------- ---------- -----------
Net increase in net assets
resulting from operations 79,614 1,110 17,333
----------- ---------- -----------
From accumulation unit
transactions
Participant deposits 2,580,979 93,558 656,615
Participant transfers 381,238 39,596 82,588
Participant withdrawals (367) -- (3,550)
----------- ---------- -----------
Net increase in net assets
resulting from participant
transactions 2,961,850 133,154 735,653
----------- ---------- -----------
Net increase in net assets 3,041,464 134,264 752,986
Net assets
Beginning of period 0 0 0
----------- ---------- -----------
End of period $3,041,464 $134,264 $752,986
=========== ========== ===========
Wanger Wanger
International U.S.
Real Estate Small Cap Small Cap
Sub-Account Sub-Account Sub-Account
------------ ----------- ------------
From operations
Net investment income (loss) $ 2,619 $ (260) $ (3,079)
Net realized gain (loss) 798 (6) 29
Net unrealized appreciation
(depreciation) 739 7,774 (19,415)
----------- ---------- -----------
Net increase (decrease) in
net assets resulting from
operations 4,156 7,508 (22,465)
----------- ---------- -----------
From accumulation unit
transactions
Participant deposits 227,039 214,634 940,831
Participant transfers 6,466 58,021 331,307
Participant withdrawals (6) (110) (312)
----------- ---------- -----------
Net increase in net assets
resulting from participant
transactions 233,499 272,545 1,271,826
----------- ---------- -----------
Net increase in net assets 237,655 280,053 1,249,361
Net assets
Beginning of period 0 0 0
----------- ---------- -----------
End of period $237,655 $280,053 $1,249,361
=========== ========== ===========
See Notes to Financial Statements
4
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
---------------- ---------------- -----------------
Unit value,
beginning of
period $1.000000 $1.000000 $1.000000
Income from
investment
operations
Net investment
income (loss) 0.014954 (0.000697) 0.056501
Net realized and
unrealized gain
(loss) -- 0.083573 (0.004720)
-------------- -------------- ---------------
Total from
investment
operations 0.014954 0.082876 0.051781
-------------- -------------- ---------------
Unit value, end
of period $1.014954 $ 1.082876 $ 1.051781
============== ============== ===============
Total return 1.50%((1)) 8.29%((1)) 5.18%((1))
Net assets, end
of period (000) $ 5,981 $ 3,289 $ 336
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
---------------- ---------------- -----------------
Unit value,
beginning of
period $1.000000 $1.000000 $1.000000
Income from
investment
operations
Net investment
income (loss) 0.013568 (0.001828) 0.013722
Net realized and
unrealized gain 0.028450 0.011488 0.033875
-------------- -------------- ---------------
Total from
investment
operations 0.042018 0.009660 0.047597
-------------- -------------- ---------------
Unit value, end
of period $1.042018 $ 1.009660 $1.047597
============== ============== ===============
Total return 4.20%((1)) 0.97%((1)) 4.76%((1))
Net assets, end
of period (000) $ 3,041 $ 134 $ 753
Wanger
International Wanger U.S.
Real Estate Small Cap Small Cap
Sub-Account Sub-Account Sub-Account
---------------- ---------------- -----------------
Unit value,
beginning of
period $1.000000 $1.000000 $1.000000
Income from
investment
operations
Net investment
income (loss) 0.031575 (0.003053) (0.006623)
Net realized and
unrealized gain
(loss) 0.018530 0.091221 (0.041698)
-------------- -------------- ---------------
Total from
investment
operations 0.050105 0.088168 (0.048321)
-------------- -------------- ---------------
Unit value, end
of period $1.050105 $ 1.088168 $ 0.951679
============== ============== ===============
Total return 5.01%((1)) 8.82%((1)) (4.83%)((1))
Net assets, end
of period (000) $ 238 $ 280 $ 1,249
((1)) Unannualized
See Notes to Financial Statements
5
<PAGE>
PHL VARIABLE ACCUMULATION ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note 1--Organization
PHL Variable Accumulation Account (the Account) is a separate investment
account of PHL Variable Insurance Company (PHL Variable). The Account is
organized as a unit investment trust and currently consists of seven
Sub-accounts, which invest solely in a designated portfolio of The Phoenix
Edge Series Fund and two Sub-accounts which invest in the Wanger Advisors
Trust (the "Funds"). The Account is offered as The Big Edge Choice to
individuals (VA4). Contract holders may also direct the allocation of their
investments between the Account and the Guaranteed Interest Account of the
general account of PHL Variable through participant transfers.
Each Series has distinct investment objectives. The Money Market Series is a
pooled short-term investment fund, the Growth Series is a growth common stock
fund, the Bond Series is a long-term debt fund, the Total Return Series
invests in equity securities and long and short-term debt, the International
Series invests primarily in an internationally diversified portfolio of
equity securities, the Balanced Series is a balanced fund which invests in
growth stocks and at least 25% of its assets in fixed income senior
securities, the Real Estate Series invests in marketable securities of
publicly traded real estate investment trusts ("REITs") and companies that
operate, manage, develop or invest in real estate, the Wanger U.S. Small Cap
Series invests in growth common stock of U.S. companies with stock market
capitalization of less than $1 billion and the Wanger International Small Cap
Series invests in securities of non-U.S. companies with a stock market
capitalization of less than $1 billion.
Note 2--Significant Accounting Policies
A. Valuation of Investments: Investments are made exclusively in the Funds
and are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Funds as well as gains and losses
on sales of shares in the funds determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from PHL Variable and
under current federal income tax law, income in the Account is not taxed
since reserves are established equivalent to such income. Therefore, no
provision for related federal or state income taxes is required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of The Funds
Purchases and sales of shares of the Funds for the period ended December 31,
1995 aggregated the following:
Sub-Account Purchases Sales
------------------------- ---------------- ----------------
Phoenix Edge Series Fund:
Money Market $9,961,762 $3,978,443
Growth 3,614,692 74,140
Bond 337,332 872
Total Return 3,260,332 91,060
International 144,019 10,774
Balanced 818,485 63,331
Real Estate 236,988 26
Wanger Advisors Trust:
International Small Cap. 277,416 4,990
U.S. Small Cap. 1,302,018 32,133
6
<PAGE>
Note 4--Participant Accumulation Unit Transactions (in units)
<TABLE>
<CAPTION>
Sub-Account
-------------------------------------------------------------------
Money Total
Market Growth Bond Return International Balanced
---------- -------- ------- -------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
VA4
Units
outstanding,
beginning of
period 0 0 0 0 0 0
Participant
deposits 7,198,116 2,364,199 220,375 2,545,096 93,055 642,806
Participant
transfers (1,303,172) 675,945 98,812 374,097 39,924 79,427
Participant
withdrawals (1,929) (3,255) (16) (372) 0 (3,459)
--------- ------- ----- ------- ---------- ------
Units
outstanding,
end of period 5,893,015 3,036,889 319,171 2,918,821 132,979 718,774
========= ======= ===== ======= ========== ======
</TABLE>
Wanger
International Wanger U.S.
Real Estate Small Cap Small Cap
----------- ----------------- -----------
Units
outstanding,
beginning of
period 0 0 0
Participant
deposits 219,733 201,477 965,791
Participant
transfers 6,589 55,992 347,311
Participant
withdrawals (6) (107) (306)
---------- ---------------- ----------
Units
outstanding,
end of period 226,316 257,362 1,312,796
========== ================ ==========
Note 5--Investment Advisory Fees and Related Party Transactions
PHL Variable and its affiliate, Phoenix Equity Planning Corporation, a
registered broker/dealer in securities, provide all services to the Account.
PHL Variable assumes the risk that annuitants as a class may live longer than
expected and that its expenses may be higher than its deductions for such
expenses. In return for the assumption of these mortality and expense risks,
PHL Variable charges the Sub-accounts the daily equivalent of 0.40%, 0.85%
and 0.125% on an annual basis for mortality, expense risks and daily
administrative fees, respectively.
As compensation for administrative services provided to the Account, PHL
Variable additionally receives $35 per year from each contract, which is
deducted from the Sub-account holding the assets of the participant, or on a
pro rata basis from two or more Sub-accounts in relation to their values
under the contract. The $35 charge is waived on account values of more than
$50,000. There were no fees for administrative services collected for the
period ended December 31, 1995 that are funded by and included in participant
withdrawals.
Phoenix Equity Planning Corporation is the principal underwriter and
distributor for the Account. PHL Variable reimburses Phoenix Equity Planning
Corporation for expenses incurred as underwriter. On surrender of a contract,
contingent deferred sales charges, which vary from 0-7% depending upon the
duration of each contract deposit, are deducted from the proceeds and are
paid to PHL Variable as reimbursement for services provided. Contingent
deferred sales charges deducted and paid to PHL Variable aggregated $432 for
the period ended December 31, 1995.
Note 6--Distribution of Net Income
The Account does not expect to declare dividends to participants from
accumulated net income. The accumulated net income is distributed to
participants as part of withdrawals of amounts in the form of surrenders,
death benefits, transfers or annuity payments in excess of net purchase
payments.
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable annuity contract, other than a contract issued in
connection with certain types of employee benefit plans, will not be treated
as an annuity contract for federal tax purposes for any period for which the
investments of the segregated asset account on which the contract is based
are not adequately diversified. The Code provides that the "adequately
diversified" requirement may be met if the underlying investments satisfy
either a statutory safe harbor test or diversification requirements set forth
in regulations issued by the Secretary of the Treasury.
The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. PHL Variable believes that the Account satisfies the current
requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[Price Waterhouse LLP logo] [Price Waterhouse circle logo]
To the Participants of
PHL Variable Accumulation Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub-Account, Bond Sub-Account, Total Return Sub-Account,
International Sub-Account, Balanced Sub-Account, Real Estate Sub-Account,
Wanger International Small Cap Sub-Account and Wanger U.S. Small Cap
Sub-Account (constituting the PHL Variable Accumulation Account, hereafter
referred to as the "Account") at December 31, 1995, the results of each of
their operations for the period then ended and the changes in each of their
net assets for the period indicated, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Account'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 provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Hartford, CT 06103
February 13, 1996
8
<PAGE>
PHL VARIABLE ACCUMULATION ACCOUNT
PHL Variable Insurance Company
One American Row
Hartford, Connecticut 06115
Underwriter
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
Custodian
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
International Series Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Real Estate Series Custodian
State Street Bank and Trust
P.O. Box 351
Boston, Massachusetts 02101
Independent Acountants
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
9
<PAGE>
[Back Cover]
[Phoenix double-diamond logo] Phoenix Home Life
PHL Variable Insurance Company
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 942
Greenfield, MA 01302-0942
OL 2232 A (2/96) (C) 1996 Phoenix Home Life Mutual Insurance Company
700.04
["Recycle" symbol] Printed on Recycled Paper.
PHL Variable Insurance Company
Statutory Home Office: Hartford, Connecticut
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
