Sullivan & Worcester LLP T 202 775 1200
1666 K Street NW F 202 293 2275
Washington, DC 20006 www.sandw.com
February 14, 2008
VIA EDGAR
EDGAR Operations Branch
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Phoenix Equity Trust
(Phoenix Value Opportunities Fund)
N-14 Prospectus/Information Statement
CIK 0000034273
File Nos. 333-148674 and 811-00945
Ladies and Gentlemen:
This letter sets forth responses to oral comments received from Brion
Thompson of the staff of the Securities and Exchange Commission (the "SEC") on
February 11, 2008 pertaining to the registration statement on Form N-14 that was
filed by Phoenix Equity Trust (the "Registrant") on January 15, 2008 relating to
the reorganization of Phoenix Focused Value Fund, a series of Phoenix Adviser
Trust, into Phoenix Value Opportunities Fund, a series of the Registrant. Where
noted, changes, as applicable, have been made to the prospectus/information
statement and pro forma combining financial statements. Revised pages of the
foregoing documents are attached.
1. Comment: On page 2 of the prospectus/information statement,
the first full paragraph, which discusses the
difference in investment strategies of the funds,
states that while "Focused Value does not emphasize
companies of any particular size, Value Opportunities
invests principally in larger capitalization stocks
with market capitalizations over $2 billion . . .".
$2 billion is generally smaller than the
capitalization of companies that are considered
large cap companies.
Response: The description of the differences in investment
strategies of the funds, along with the description
of Value Opportunities' investment strategies on page
7 of the prospectus/information statement, has been
restated to say that Value Opportunities emphasizes
stocks of companies with market capitalizations over
$5 billion. Rather than offer a definition for larger
market capitalization as used by this Fund, the $5
billion threshold reflects the Subadviser's
historical focus for investments by this Fund.
2. Comment: Please confirm that in the expense tables beginning
on page 9, the Pro Forma fees and expenses do not
include any waivers.
Response: We confirm that the expense tables include only gross
fees and do not reflect any expense limitations.
3. Comment: In the expense examples on page 10 and 11 of
the prospectus/information statement, please explain
why the expenses for Value Opportunities Pro Forma
are higher than those for Focused Value, while the
expense tables show that the pro forma expenses are
lower than those for Focused Value.
Response: Expenses have been restated to reflect gross expenses
for the funds, with Value Opportunities Pro Forma
expenses lower than those of Focused Value.
4. Comment: In the Expense Example on page 10 of the
prospectus/information statement, the staff
calculates the expenses for Class A shares of Value
Opportunities Pro Forma as $710 for one year and $996
for three years, and Class A shares of Focused Value
as $717 for one year and $1,016 for three years.
Response: The Expense Examples have been restated to reflect
gross expenses consistent with those calculated by
the staff.
5. Comment: If any securities in the Pro Forma Schedule
of Investments are on loan, please add a footnote
indicating those securities.
Response: We confirm no securities are on loan.
6. Comment: Include Tandy-like language in your response letter.
Response: The requested language is set forth below.
* * *
In connection with this filing, the Registrant acknowledges that: (1)
it is responsible for the adequacy and accuracy of the disclosure in its filing
of the above-referenced registration statement; (2) staff comments or changes to
disclosure in response to staff comments in the filings reviewed by the staff do
not foreclose the SEC from taking any action with respect to the filing; and (3)
the Registrant may not assert staff comments as a defense in any proceeding
initiated by the SEC or any person under the federal securities laws of the
United States.
Any questions or comments with respect to this filing may be directed
to the undersigned at (202) 775-1227.
Sincerely,
/s/ Arie Heijkoop, Jr.
Arie Heijkoop, Jr.
Attachments
cc: Kevin J. Carr, Esq.
Robert N. Hickey, Esq.
Opportunities will assume all of the liabilities of Focused Value,
except expenses reimbursed by the Adviser prior to the reorganization (the
"Reorganization"). Class A and Class C shares of Value Opportunities will be
distributed to each shareholder in liquidation of Focused Value, and Focused
Value will be terminated as a series of Adviser Trust. You will then hold that
number of full and fractional shares of Value Opportunities which have an
aggregate net asset value equal to the aggregate net asset value of your shares
of Focused Value.
Focused Value is a separate non-diversified series of Adviser Trust, a
Delaware statutory trust, which is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). Value Opportunities is a separate diversified series of Equity
Trust, a Delaware statutory trust, which is also an open-end management
investment company registered under the 1940 Act. The investment objective of
Focused Value is identical to that of Value Opportunities, as follows:
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Fund Investment Objective
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Focused Value Long-term capital appreciation.
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Value Opportunities Long-term capital appreciation.
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The investment strategies for Focused Value are similar to those for
Value Opportunities. However, there are some differences. While Focused Value
does not emphasize companies of any particular size, Value Opportunities invests
principally in larger capitalization stocks of companies with market
capitalizations over $5 billion at the time of initial purchase. Also, while
both Funds seek primarily domestic companies, under normal circumstances,
Focused Value invests at least 65% of its assets in the securities of U.S.
companies, while Value Opportunities has no numerical guidelines. As a
non-diversified fund, Focused Value may also invest a greater proportion of its
assets in a smaller number of issuers than a diversified fund like Value
Opportunities
This Prospectus/Information Statement explains concisely the
information about Value Opportunities that you should know. Please read it
carefully and keep it for future reference. Additional information concerning
each Fund and the Reorganization is contained in the documents described below,
all of which have been filed with the Securities and Exchange Commission
("SEC"):
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Information about Focused Value: How to Obtain this Information:
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Prospectus of Adviser Trust relating to Focused Value, dated June Copies are available upon request and without
30, 2007, as amended charge if you:
Statement of Additional Information of Adviser Trust relating to o Visit www.PhoenixFunds.com on the
Focused Value, dated June 30, 2007, as amended internet; or
Annual Report of Adviser Trust relating to Focused o Write to Phoenix Equity Planning
year ended February 28, 2007 Corporation, One American Row,
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Investment Long-term capital appreciation.
Objective
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Principal Invests principally in the equity securities of domestic
Investment companies that the Subadviser believes to have appreciation potential.
Strategies
Invests principally in larger capitalization stocks;
however, the Fund may invest in issuers of any
capitalization. Subadviser emphasizes stocks of companies
with market capitalizations over $5 billion at the time of
initial purchase.
Employs a value approach, utilizing quantitative screening
to identify attractively valued securities. All stocks in
the equity universe are evaluated across multiple
quantitative factors, such as valuation, earnings and
quality.
Focuses on identifying the factors most closely associated
with outperforming stocks. Factors must have statistical
significance, but also must meet the "common sense" test of
having a logical connection to the attributes of a
successful company.
A portfolio optimization program is used to balance the
expected return of the stocks with such considerations as
the Fund's benchmark, desired level of risk and transaction
cost estimates.
Investment strategies may lead to a high portfolio turnover
rate.
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The principal risks of investing in Value Opportunities are
substantially similar to those of investing in Focused Value. They include:
o Equity securities risk - generally, prices of equity securities are more
volatile than those of fixed income securities. The prices of equity
securities will rise and fall in response to a number of different factors.
In particular, equity securities will respond to events that affect entire
financial markets or industries (such as changes in inflation or consumer
demand) and to events that affect particular issuers (such as news about
the success or failure of a new product).
o Large market capitalization risk - companies with large market
capitalizations go in and out of favor based on market and economic
conditions. Larger companies tend to be less volatile than companies with
smaller market capitalizations. In exchange for this potentially lower
risk, the Fund's value may not rise as much as the value of funds that
emphasize companies with smaller market capitalizations.
The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in the Funds and Value
Opportunities Pro Forma, assuming the Reorganization takes place. The examples
assume a 5% average annual return, that you redeem all of your shares at the end
of each time period and that you reinvest all of your dividends. The following
tables also assume that total annual operating expenses remain the same. The
examples are for illustration only, and your actual costs may be higher or
lower.
Examples of Fund Expenses*
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Focused Value
One Year Three Years Five Years Ten Years
Class A $717 $1,016 $1,336 $2,242
Class C $326 $697 $1,195 $2,565
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Value Opportunities
One Year Three Years Five Years Ten Years
Class A $728 $1,051 $1,396 $2,366
Class C $361 $802 $1,370 $2,915
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Value Opportunities Pro Forma
One Year Three Years Five Years Ten Years
Class A $710 $996 $1,302 $2,169
Class C $313 $670 $1,154 $2,489
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You would pay the following expenses if you did not redeem your shares:
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Focused Value
One Year Three Years Five Years Ten Years
Class C $226 $697 $1,195 $2,565
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Value Opportunities
One Year Three Years Five Years Ten Years
Class C $261 $802 $1,370 $2,915
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Value Opportunities Pro Forma
One Year Three Years Five Years Ten Years
Class C $213 $670 $1,154 $2,489
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* Expenses have been restated to reflect current fee structures.
How do the Funds' performance records compare?