UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04642
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The Phoenix Edge Series Fund
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(Exact name of registrant as specified in charter)
One American Row
Hartford, CT 06102
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(Address of principal executive offices) (Zip code)
PFPC Inc.
301 Bellevue Parkway
Wilmington, DE 19809
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(Name and address of agent for service)
Registrant's telephone number, including area code: (302) 791-3197
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Date of fiscal year end: December 31, 2003
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Date of reporting period: December 31, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED] PHOENIX
WEALTH MANAGEMENT (R)
THE PHOENIX
EDGE
SERIES FUND
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VARIABLE PRODUCTS FUND -- ANNUAL REPORT
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DECEMBER 31, 2003
THIS PAGE INTENTIONALLY BLANK.
MESSAGE FROM THE CHAIRMAN
Dear Shareholder:
[GRAPHIC OMITTED]
When we think about 2003, we'll remember a year in which financial services
underwent significant change. National news reflected regulatory attention to
the business conduct of a few mutual fund companies. As a result, certain
industry-wide practices came under increased scrutiny.
Your Fund's Board of Trustees recognizes the seriousness of these issues.
As a result, it has expanded its review of policies and procedures to insure
compliance with applicable rules and regulations. Additionally, the Board had
taken a review of its own structure and governance protocols to insure that our
practices are not only compliant with regulatory standards, but, whenever
practical, also conform to best practices that value your interests and help you
invest wisely.
I hope that you'll take time to review the activities and performance
information included in this annual report. We've witnessed new life in the
equity markets, and I am encouraged that our overall economy has begun a more
rewarding period. Now is an opportune time for you to review your investments
with your financial advisor to be sure your portfolio is best positioned to
achieve long-term success.
Keep in mind that finding the best balance of performance and protection
requires discipline and diversification1. Your investment in The Phoenix-Edge
Series Fund may help you in this effort.
To learn more about your investments and investing, visit
Phoenixwm.PHL.com.
Sincerely,
/s/ PHILIP R. MCLOUGHLIN
Philip R. McLoughlin
Chairman, The Phoenix Edge Series Fund
JANUARY 1, 2004
1 Diversification does not guarantee against a loss, and there is no guarantee
that a diversified portfolio will outperform a non-diversified portfolio.
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Mutual funds are not insured by the FDIC; are not deposits or other
obligations of a bank and are not guaranteed by a bank; and are subject to
investment risks, including possible loss of the principal invested.
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1
THIS PAGE INTENTIONALLY BLANK.
TABLE OF CONTENTS
PAGE
----
Phoenix-Aberdeen International Series ..................................... 4
Phoenix-AIM Mid-Cap Equity Series ......................................... 11
Phoenix-Alliance/Bernstein Enhanced Index Series .......................... 17
Phoenix-Alliance/Bernstein Growth + Value Series .......................... 25
Phoenix-Duff & Phelps Real Estate Securities Series ....................... 31
Phoenix-Engemann Capital Growth Series .................................... 36
Phoenix-Engemann Small & Mid-Cap Growth Series ............................ 42
Phoenix-Goodwin Money Market Series ....................................... 48
Phoenix-Goodwin Multi-Sector Fixed Income Series .......................... 53
Phoenix-Goodwin Multi-Sector Short Term Bond Series ....................... 61
Phoenix-Janus Flexible Income Series ...................................... 68
Phoenix-Kayne Rising Dividends Series ..................................... 77
Phoenix-Kayne Small-Cap Quality Value Series .............................. 82
Phoenix-Lazard International Equity Select Series ......................... 87
Phoenix-Lazard Small-Cap Value Series ..................................... 93
Phoenix-Lazard U.S. Multi-Cap Series ...................................... 100
Phoenix-Lord Abbett Bond-Debenture Series ................................. 106
Phoenix-Lord Abbett Large-Cap Value Series ................................ 115
Phoenix-Lord Abbett Mid-Cap Value Series .................................. 121
Phoenix-MFS Investors Growth Stock Series ................................. 127
Phoenix-MFS Investors Trust Series ........................................ 134
Phoenix-MFS Value Series .................................................. 141
Phoenix-Northern Dow 30 Series ............................................ 147
Phoenix-Northern Nasdaq-100 Index(R) Series ............................... 152
Phoenix-Oakhurst Growth and Income Series ................................. 158
Phoenix-Oakhurst Strategic Allocation Series .............................. 166
Phoenix-Oakhurst Value Equity Series ...................................... 175
Phoenix-Sanford Bernstein Global Value Series ............................. 181
Phoenix-Sanford Bernstein Mid-Cap Value Series ............................ 189
Phoenix-Sanford Bernstein Small-Cap Value Series .......................... 195
Phoenix-Seneca Mid-Cap Growth Series ...................................... 201
Phoenix-Seneca Strategic Theme Series ..................................... 206
Phoenix-State Street Research Small-Cap Growth Series ..................... 211
Notes to Financial Statements ............................................. 217
This report is not authorized for distribution to prospective investors in The
Phoenix Edge Series Fund unless preceded or accompanied by any effective
Prospectus which includes information concerning charges, Fund's record and
other pertinent information.
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Not FDIC Insured No Bank Guarantee May Lose Value
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3
PHOENIX-ABERDEEN INTERNATIONAL SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is high total return consistent with
reasonable risk. The series invests primarily in an internationally diversified
portfolio of equity securities. The series essentially focuses on quality
companies with strong management, solid growth prospects, and attractive
relative valuations. Investors should note that foreign investments pose added
risks such as currency fluctuation, less public disclosure, as well as economic
and political risks.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: In what proved to be a very volatile year for both international equity
markets and currencies, the series returned 31.86%. For the same period, the
MSCI EAFE(R) Index 1 returned 39.17% and the S&P 500(R) Index 2 returned 28.71%.
All performance figures assume reinvestment of distributions. Past performance
is not indicative of future results and current performance may be higher or
lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: International markets posted gains during the 12-month period under review,
with most markets delivering returns of over 10% in local currency. However,
with the sharp depreciation of the U.S. dollar against most major currencies
(except the Asian currencies), the overall total return in U.S. dollar terms was
boosted dramatically. With interest rates at historically low levels and
economic indicators improving, cyclical stocks (with their leveraged balance
sheets) performed particularly well. Moreover, technology stocks soared after a
period of three years in the doldrums, with investors paying scant regard for
the prices they were paying for them.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Performance relative to the benchmark has been disappointing during the year
under review. It is our stated aim to invest in the best quality companies at
the most attractive relative valuations. Unfortunately, we have been in a period
during which poorer quality stocks (companies characterized in part with having
poor management and highly leveraged balance sheets) have performed dramatically
better than the quality companies that have demonstrated over the years that
they can run their businesses effectively for shareholders. This divergence in
performance has been particularly evident in Japan and Continental Europe and
has been the main source of underperformance over the period.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We believe, clearly, international markets will be impacted by events in the
U.S. and potentially China. The U.S. economy has continued to show positive
signs of recovery, benefiting from an improvement in consumer confidence, helped
by the U.S. Federal Reserve Board that has kept monetary policy very easy. Lower
interest rates have helped homeowners refinance their mortgages, putting extra
dollars in their pockets. In addition, the government has aided the recovery by
providing one time child-care tax credit rebate checks for U.S. families.
We recognize that these factors have led to a significant improvement in
sentiment. But, we remain guarded from becoming euphoric and accepting that we
are entering a new sustainable bull market for equities.
Certainly the "twin deficits" situation (current account and fiscal) will
not be resolved overnight and the U.S. consumer must address the imbalance
between consuming and saving. With the fall in the U.S. dollar expected to
continue (albeit at slower rate of decline), despite strong growth in the U.S.,
it will become harder for the rest of the world to finance these deficits as the
return achieved from U.S. dollar assets diminishes in local currency terms.
Overall we are cautiously optimistic for the prospects of the global
economy in 2004, but do not expect to see the same levels of returns from
equities as we have for the past 12 months. Valuations remain favorable for
equities versus bonds, but we believe that current valuations on stock prices at
large generally reflect an improving economy going into 2004. Given that there
are still serious imbalances in the global economy we retain a more defensive
portfolio, seeking new and retaining existing investments in some of the more
peripheral markets in the world to seek out opportunities at the stock level.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The MSCI (Morgan Stanley Capital International) EAFE(R) Index measures foreign
stock market performance, which includes net dividends reinvested. Total
return figures are net of foreign withholding taxes. The EAFE(R) Index is an
aggregate of 21 individual country indexes in Europe, Australia, New Zealand,
and the Far East.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
4
PHOENIX-ABERDEEN INTERNATIONAL SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
1 YEAR 5 YEARS 10 YEARS
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International Series 31.86% (1.43)% 5.66%
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MSCI EAFE(R) Index 1 39.17% 0.26% 4.78%
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S&P 500(R) Index 2 28.71% (0.57)% 11.10%
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This chart assumes an initial investment of $10,000 made on 12/31/93. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period. Returns indicate past performance,
which is not indicative of future performance. Investment return and net asset
value will fluctuate so that your shares, when redeemed, may be worth more or
less than the original cost. Please visit PhoenixWM.com for performance data
current to the most recent month-end. Foreign investing involves special risks
such as currency fluctuation and less public disclosure, as well as economic and
political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
International Series MSCI EAFE(R) Index 1 S&P 500(R) Index 2
12/31/93 $10,000 $10,000 $10,000
12/30/94 $10,003 $10,806 $10,132
12/29/95 $10,962 $12,054 $13,933
12/31/96 $13,006 $12,821 $17,172
12/31/97 $14,573 $13,084 $22,903
12/31/98 $18,642 $15,745 $29,489
12/31/99 $24,140 $20,043 $35,721
12/29/00 $20,323 $17,245 $32,440
12/31/01 $15,437 $13,588 $28,587
12/31/02 $13,152 $11,461 $22,270
12/31/03 $17,342 $15,950 $28,664
1 The MSCI (Morgan Stanley Capital International) EAFE(R) Index measures foreign
stock fund performance, which includes net dividends reinvested. Total return
figures are net of foreign withholding taxes. The EAFE(R) Index is an
aggregate of 21 individual country indexes in Europe, Australia, New Zealand,
and the Far East.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
5
PHOENIX-ABERDEEN INTERNATIONAL SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
--------- ------------
FOREIGN COMMON STOCKS--96.7%
AUSTRALIA--2.4%
Leighton Holdings Ltd. (Construction & Engineering). 55,916 $ 497,554
QBE Insurance Group Ltd. (Property & Casualty
Insurance) ....................................... 321,000 2,563,685
Rio Tinto Ltd. (Diversified Metals & Mining) ...... 13,340 373,897
------------
3,435,136
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BELGIUM--2.3%
Interbrew (Brewers) (b) ............................ 127,700 3,408,340
------------
BRAZIL--5.1%
Companhia Paranaense de Energia-Copel ADR
(Electric Utilities) (b) ......................... 80,000 381,600
Petroleo Brasileiro SA ADR (Integrated Oil & Gas) (b) 150,000 3,999,000
Unibanco-Uniao de Bancos Brasileiros SA GDR
(Diversified Banks) .............................. 122,000 3,043,900
------------
7,424,500
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CHINA--1.0%
PetroChina Co. Ltd. (Integrated Oil & Gas) ......... 1,750,000 1,003,078
Zhejiang Expressway Co. Ltd. (Highways &
Railtracks) ...................................... 700,000 491,396
------------
1,494,474
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FINLAND--2.1%
Stora Enso Oyj Class R (Paper Products) ............ 230,000 3,098,386
------------
FRANCE--8.5%
Aventis SA (Pharmaceuticals) ....................... 54,000 3,569,122
Schneider Electric SA (Industrial Machinery) ....... 31,500 2,062,122
Total SA (Integrated Oil & Gas) .................... 13,710 2,549,009
Valeo SA (Auto Parts & Equipment) .................. 106,200 4,253,090
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12,433,343
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GERMANY--2.2%
Metro AG (Department Stores) ....................... 71,000 3,134,460
------------
HONG KONG--7.3%
Asia Satellite Telecommunications Holdings Ltd.
(Integrated Telecommunication Services) .......... 165,000 313,482
China Mobile (Hong Kong) Ltd. (Wireless
Telecommunication Services) ...................... 933,500 2,867,739
Dah Sing Financial Group (Diversified Banks) ....... 67,000 498,383
Giordano International Ltd. (Apparel Retail) ....... 6,190,000 2,870,318
Swire Pacific Ltd. Class B (Multi-Sector Holdings) . 3,235,000 3,416,843
Wing Hang Bank Ltd. (Diversified Banks) ............ 106,000 630,790
------------
10,597,555
------------
INDIA--0.9%
Gail India Ltd. GDR (Gas Utilities) ................ 40,000 1,332,000
------------
ITALY--2.8%
ENI SpA (Integrated Oil & Gas) ..................... 218,296 4,119,208
------------
JAPAN--18.2%
Canon, Inc. (Office Electronics) ................... 48,000 2,234,954
Fuji Photo Film Co. Ltd. (Photographic Products) ... 92,000 2,970,234
Honda Motor Co. Ltd. (Automobile Manufacturers) .... 46,800 2,078,641
Kao Corp. (Household Products) ..................... 138,000 2,807,129
Nippon Television Network Corp. (Broadcasting &
Cable TV) ........................................ 18,100 2,690,427
NTT DoCoMo, Inc. (Wireless Telecommunication
Services) ........................................ 1,530 3,469,161
Orix Corp. (Consumer Finance) ...................... 25,100 2,075,077
Shin-Etsu Chemical Co. Ltd. (Diversified Chemicals) 54,000 2,206,961
Takeda Chemical Industries Ltd. (Pharmaceuticals) .. 72,500 2,875,105
Unicharm Corp. (Household Products) ................ 30,000 1,475,226
SHARES VALUE
--------- ------------
JAPAN--CONTINUED
Yamanouchi Pharmaceutical Co. Ltd. (Health Care
Supplies) ........................................ 52,000 $ 1,615,751
------------
26,498,666
------------
LUXEMBOURG--1.5%
Arcelor (Steel) .................................... 127,333 2,219,654
------------
MALAYSIA--0.5%
Malaysian Oxygen Berhad (Oil & Gas Equipment &
Services) ........................................ 150,000 457,895
Sime UEP Properties Berhad (Homebuilding) .......... 250,000 294,737
------------
752,632
------------
MEXICO--1.9%
Telefonos de Mexico SA de C.V. ADR Series L
(Integrated Telecommunication Services) .......... 85,000 2,807,550
------------
NETHERLANDS--6.4%
IHC Caland NV (Oil & Gas Equipment & Services) ..... 55,000 2,983,098
ING Groep NV (Other Diversified Financial Services) 130,000 3,031,912
TPG NV (Air Freight & Couriers) .................... 140,000 3,279,263
------------
9,294,273
------------
SINGAPORE--3.6%
City Developments Ltd. (Real Estate Management &
Development) ..................................... 100,000 356,239
Oversea-Chinese Banking Corp. Ltd.
(Diversified Banks) .............................. 526,000 3,747,630
Robinson & Co. Ltd. (Department Stores) ............ 125,000 548,342
United Overseas Bank Ltd. (Diversified Banks) ...... 78,400 609,362
------------
5,261,573
------------
SOUTH KOREA--3.9%
Kookmin Bank (Diversified Banks) ................... 15,000 562,107
Kookmin Bank ADR (Diversified Banks) ............... 80,000 3,027,200
KT Corp. (Integrated Telecommunication Services) ... 36,000 1,347,545
Shinsegae Co. Ltd. (Department Stores) ............. 3,120 701,771
------------
5,638,623
------------
SPAIN--2.1%
Altadis SA (Tobacco) ............................... 106,000 3,008,325
------------
SWEDEN--3.4%
Nordea AB (Diversified Banks) ...................... 243,000 1,823,690
Svenska Handelsbanken AB Class A (Diversified
Banks) ........................................... 74,000 1,511,820
Volvo AB Class B (Construction, Farm Machinery &
Heavy Trucks) .................................... 50,000 1,528,776
------------
4,864,286
------------
SWITZERLAND--4.8%
Novartis AG Registered Shares (Pharmaceuticals) .... 71,000 3,223,489
Swiss Re Registered Shares (Property & Casualty
Insurance) ....................................... 41,000 2,768,142
Zurich Financial Services AG (Property & Casualty
Insurance) (b) ................................... 6,400 921,124
------------
6,912,755
------------
TAIWAN--0.7%
Fubon Financial Holding Co. Ltd. (Multi-Sector
Holdings) (b) .................................... 284,000 271,871
SinoPac Holdings (Diversified Banks) (b) ........... 1,038,237 525,999
Taiwan Cellular Corp. (Wireless Telecommunication
Services) (b) .................................... 309,400 268,845
------------
1,066,715
------------
See Notes to Financial Statements
6
PHOENIX-ABERDEEN INTERNATIONAL SERIES
SHARES VALUE
--------- ------------
THAILAND--0.9%
Hana Microelectronics Public Co. Ltd. (Electronic
Equipment Manufacturers) ......................... 200,800 $ 633,479
PTT Exploration and Production Public Co. Ltd.
(Oil & Gas Exploration & Production) ............. 100,000 676,383
------------
1,309,862
------------
UNITED KINGDOM--14.2%
AstraZeneca plc (Pharmaceuticals) .................. 31,200 1,496,858
Aviva plc (Property & Casualty Insurance) .......... 168,000 1,474,410
BP plc (Integrated Oil & Gas) ...................... 189,400 1,535,923
British American Tobacco plc (Tobacco) ............. 123,000 1,695,458
Cadbury Schweppes plc (Packaged Foods & Meats) ..... 334,000 2,452,937
HSBC Holdings plc (Diversified Banks) .............. 102,500 1,611,052
Prudential plc (Life & Health Insurance) ........... 201,100 1,700,103
Sainsbury (J) plc (Food Retail) .................... 793,000 4,439,784
Schroders plc (Asset Management & Custody Banks) ... 129,000 1,459,480
Weir Group plc (The) (Industrial Machinery) ........ 319,000 1,463,342
Wood Group (John) plc (Oil & Gas Equipment &
Services) ........................................ 560,000 1,350,853
------------
20,680,200
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $119,446,970) ............................... 140,792,516
------------
FOREIGN PREFERRED STOCKS--3.4%
SOUTH KOREA--3.4%
Hyundai Motor Co. Ltd. Pfd. (Automobile
Manufacturers) ................................... 28,000 538,145
Samsung Electronics Co. Ltd. Pfd. (Semiconductors) . 21,000 4,326,899
------------
TOTAL FOREIGN PREFERRED STOCKS
(Identified cost $1,852,755) ................................. 4,865,044
------------
TOTAL INVESTMENTS--100.1%
(Identified cost $121,299,725) ............................... 145,657,560(a)
Other assets and liabilities, net--(0.1)% .................... (77,157)
------------
NET ASSETS--100.0% ............................................. $145,580,403
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $30,334,713 and gross
depreciation of $6,219,735 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$121,542,582.
(b) Non-income producing.
See Notes to Financial Statements
7
PHOENIX-ABERDEEN INTERNATIONAL SERIES
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
Air Freight & Couriers ............................................... 2.3%
Apparel Retail ....................................................... 2.0
Asset Management & Custody Banks ..................................... 1.0
Auto Parts & Equipment ............................................... 2.9
Automobile Manufacturers ............................................. 1.8
Brewers .............................................................. 2.3
Broadcasting & Cable TV .............................................. 1.9
Construction & Engineering ........................................... 0.3
Construction, Farm Machinery & Heavy Trucks .......................... 1.1
Consumer Finance ..................................................... 1.4
Department Stores .................................................... 3.0
Diversified Banks .................................................... 12.1
Diversified Chemicals ................................................ 1.5
Diversified Metals & Mining .......................................... 0.3
Electric Utilities ................................................... 0.3
Electronic Equipment Manufacturers ................................... 0.4
Food Retail .......................................................... 3.1
Gas Utilities ........................................................ 0.9
Health Care Supplies ................................................. 1.1
Highways & Railtracks ................................................ 0.3
Homebuilding ......................................................... 0.2
Household Products ................................................... 2.9
Industrial Machinery ................................................. 2.4
Integrated Oil & Gas ................................................. 9.1
Integrated Telecommunication Services ................................ 3.1
Life & Health Insurance .............................................. 1.2
Multi-Sector Holdings ................................................ 2.5
Office Electronics ................................................... 1.5
Oil & Gas Equipment & Services ....................................... 3.3
Oil & Gas Exploration & Production ................................... 0.5
Other Diversified Financial Services ................................. 2.1
Packaged Foods & Meats ............................................... 1.7
Paper Products ....................................................... 2.1
Pharmaceuticals ...................................................... 7.7
Photographic Products ................................................ 2.0
Property & Casualty Insurance ........................................ 5.3
Real Estate Management & Development ................................. 0.2
Semiconductors ....................................................... 3.0
Steel ................................................................ 1.5
Tobacco .............................................................. 3.2
Wireless Telecommunication Services .................................. 4.5
------
100.0%
=====
See Notes to Financial Statements
8
PHOENIX-ABERDEEN INTERNATIONAL SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $121,299,725) ........................................... $145,657,560
Receivables
Investment securities sold ............................................................................ 3,210,167
Dividends ............................................................................................. 389,788
Tax reclaims .......................................................................................... 95,710
Fund shares sold ...................................................................................... 84,102
Prepaid expenses ........................................................................................ 1,950
------------
Total assets ........................................................................................ 149,439,277
------------
LIABILITIES
Cash overdraft .......................................................................................... 3,246,818
Payables
Fund shares repurchased ............................................................................... 376,121
Investment advisory fee ............................................................................... 90,197
Financial agent fee ................................................................................... 10,274
Administration fee .................................................................................... 9,205
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 123,899
------------
Total liabilities ................................................................................... 3,858,874
------------
NET ASSETS .............................................................................................. $145,580,403
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $190,717,939
Undistributed net investment income ................................................................... 473,991
Accumulated net realized loss ......................................................................... (69,979,984)
Net unrealized appreciation ........................................................................... 24,368,457
------------
NET ASSETS .............................................................................................. $145,580,403
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 13,657,977
============
Net asset value and offering price per share ............................................................ $10.66
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 4,292,209
Interest ...................................................................................................... 15,269
Foreign taxes withheld ........................................................................................ (457,754)
-----------
Total investment income ..................................................................................... 3,849,724
-----------
EXPENSES
Investment advisory fee ....................................................................................... 944,142
Financial agent fee ........................................................................................... 114,814
Administration fee ............................................................................................ 96,932
Custodian ..................................................................................................... 113,935
Printing ...................................................................................................... 41,072
Professional .................................................................................................. 15,846
Trustees ...................................................................................................... 7,209
Miscellaneous ................................................................................................. 15,782
-----------
Total expenses .............................................................................................. 1,349,732
-----------
NET INVESTMENT INCOME ........................................................................................... 2,499,992
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ............................................................................... (12,108,165)
Net realized gain on foreign currency transactions ............................................................ 16,449
Net change in unrealized appreciation (depreciation) on investments ........................................... 47,183,988
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... (32,385)
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 35,059,887
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $37,559,879
===========
See Notes to Financial Statements
9
PHOENIX-ABERDEEN INTERNATIONAL SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ -------------
FROM OPERATIONS
Net investment income (loss) ............................................................ $ 2,499,992 $ 1,637,101
Net realized gain (loss) ................................................................ (12,091,716) (22,556,806)
Net change in unrealized appreciation (depreciation) .................................... 47,151,603 293,843
------------ -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............................. 37,559,879 (20,625,862)
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................................................................... (2,420,960) (1,431,749)
------------ -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ............................... (2,420,960) (1,431,749)
------------ -------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (6,460,085 and 13,798,860 shares, respectively) .......... 54,888,465 124,706,817
Net asset value of shares issued in conjunction with Plan of Reorganization (1,885,115
and 0 shares, respectively) (see note 11) ............................................. 14,391,123 --
Net asset value of shares issued from reinvestment of distributions (271,861 and
165,406 shares, respectively) ......................................................... 2,420,960 1,431,749
Cost of shares repurchased (8,696,850 and 16,605,493 shares, respectively) .............. (74,433,150) (151,130,946)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ............................... (2,732,602) (24,992,380)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS ................................................... 32,406,317 (47,049,991)
NET ASSETS
Beginning of period ..................................................................... 113,174,086 160,224,077
------------ -------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $473,991 AND $343,433,
RESPECTIVELY) ......................................................................... $145,580,403 $ 113,174,086
============ =============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ..................................... $ 8.24 $ 9.78 $13.25 $17.19 $15.46
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ........................................... 0.18 0.12 0.06 0.08 0.23
Net realized and unrealized gain (loss) ................................ 2.41 (1.56) (3.23) (2.77) 4.13
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ..................................... 2.59 (1.44) (3.17) (2.69) 4.36
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................................... (0.17) (0.10) -- (0.06) (0.39)
Distributions from net realized gains .................................. -- -- (0.30) (1.19) (2.24)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .................................................. (0.17) (0.10) (0.30) (1.25) (2.63)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ................................................ 2.42 (1.54) (3.47) (3.94) 1.73
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ........................................... $10.66 $ 8.24 $ 9.78 $13.25 $17.19
====== ====== ====== ====== ======
Total return ............................................................. 31.86% (14.81)% (24.04)% (15.81)% 29.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .................................. $145,580 $113,174 $160,224 $233,609 $298,973
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses ..................................................... 1.07% 1.05% 1.02% 1.02% 1.01%
Net investment income .................................................. 1.99% 1.18% 0.72% 0.54% 0.81%
Portfolio turnover ....................................................... 39% 34% 74% 94% 79%
See Notes to Financial Statements
10
PHOENIX-AIM MID-CAP EQUITY SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The fund seeks long-term growth of capital by investing in medium-sized U.S.
companies. The portfolio utilizes AIM's Growth at a reasonable price discipline
that attempts to participate in the upside and provide protection on the
downside.
Q: HOW DID THE SERIES' PERFORM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003?
A: For the fiscal year ended December 31, 2003, the series returned 28.19%,
underperforming the Russell MidCap(R) Index 1, which returned 40.06% and
performing roughly in line with the S&P 500(R) Index 2 which returned 28.71%.
All performance figures assume reinvestment of distributions. Past performance
is not indicative of future results and current performance may be higher or
lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: In the first half of 2003, as the country focused on conflict in Iraq, the
domestic equity markets posted gains, and the U.S. economy grew at a sluggish
pace. By the second half of the year, however, major combat operations ended,
economic growth gathered momentum, and the equity markets experienced a broad
based rally. Gross domestic product (GDP) growth in the first quarter was a
paltry 2.0%, but growth accelerated significantly to 8.2% by the third quarter.
Fourth quarter growth is estimated between 4-5% and GDP growth for the year
should come in near 4.5%.
The tax cut package enacted by Congress in May is at least partially
responsible for higher economic growth as it provided added stimulus to
jump-start the economy. The package, which took full effect in the second half,
included immediate wage rate cuts, larger child tax credits, and reduced
dividend tax rates. Consumers did their part to sustain economic growth by
spending their tax credits, and purchasing homes and automobiles in record
numbers, due to record low interest rates.
Employment growth was sluggish, as companies were reluctant to hire until
the economy showed further signs of stabilization. The unemployment rate reached
6.4% in the summer, and stabilized slightly by the end of the year at 5.7%. The
ISM Manufacturing Index 3, a measure of manufacturing activity, was subdued in
the first half, dipping below 50, but it then managed to hit a new 20-year high
in November.
The Federal Reserve continued in an accommodative mode, lowering the Fed
Funds rate at its June meeting to 1.00%, the lowest rate in 45 years. While the
Fed took no action in the second half, much speculation regarding an increase in
rates arose, and it appears likely that tightening will take place in 2004.
The financial markets experienced volatility in the first half of 2003 as
geopolitical tensions escalated and combat began in Iraq; however, by the second
half, the major market indices began a steep ascent, and managed to finish the
year with significant gains. For the first time in three years, the major equity
indices posted gains: the Dow Jones Industrial Average(SM) 4 was up 28.04%, the
NASDAQ was up 50.01%, and the S&P 500(R) Index was up 28.71%. Small cap stocks
outperformed large caps, and small cap growth outperformed small cap value.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Portfolio managers held overweight positions in the industrials, information
technology, and energy sectors, and underweight positions in the consumer
discretionary, financials and health care sectors, relative to the Russell
MidCap(R) Index. Throughout the year, portfolio managers took steps to increase
exposure to the energy sector, and to reduce exposure to the consumer staples
sector.
Stock selection and an underweight position in the financials sector was
the largest detractor from performance, relative to the Russell MidCap(R) Index.
A relative underweight in the consumer discretionary sector and the series' cash
position also detracted from performance.
Stock selection and an overweight position in the industrials sector was
the largest positive contributor to the series' relative performance. Within the
sector, machinery stocks performed especially well. An overweight position in
the information technology sector also benefited the series, particularly
electronic equipment stocks.
Since the financial markets have risen so dramatically this year, portfolio
managers are becoming more guarded about equity valuations. Managers continue to
look for new opportunities that are attractively priced, and they will
re-evaluate positions that have moved significantly in the past few months, as
these stocks may be nearing their price targets.
11
PHOENIX-AIM MID-CAP EQUITY SERIES
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: By the end of 2003, the economy had improved markedly, and as we look to
2004, it remains to be seen whether headlines of new corporate scandals,
heightened terror alerts, and renewed fears of SARS and mad cow disease will
impact last year's gains. We believe, however, that both the equity markets and
the economy are in a better position now compared to a year ago, which should
bode well for growth in 2004.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
10/29/01 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Mid-Cap Equity Series 28.19% 9.47%
- --------------------------------------------------------------------------------
Russell MidCap(R) Index 1 40.06% 13.05%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 3.19%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 10/29/01 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Mid-Cap Equity Series Russell MidCap(R) Index 1 S&P 500(R) Index 2
10/29/01 $10,000 $10,000 $10,000
12/31/01 $10,655 $11,120 $10,677
12/31/02 $ 9,495 $ 9,320 $ 8,317
12/31/03 $12,172 $13,053 $10,705
1 The Russell MidCap(R) Index is a market capitalization-weighted index of
medium-capitalization stocks of U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
3 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
4 The Dow Jones Industrial Average(SM) is a commonly used measure of large-cap
stock performance.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
12
PHOENIX-AIM MID-CAP EQUITY SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--79.0%
AEROSPACE & DEFENSE--1.4%
L-3 Communications Holdings, Inc. (b) .............. 3,600 $ 184,896
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--1.3%
V. F. Corp. ........................................ 4,000 172,960
-----------
APPLICATION SOFTWARE--0.5%
Cadence Design Systems, Inc. (b) ................... 4,100 73,718
-----------
COMMERCIAL PRINTING--1.2%
Valassis Communications, Inc. (b) .................. 5,800 170,230
-----------
COMPUTER HARDWARE--0.9%
Diebold, Inc. ...................................... 2,300 123,901
-----------
CONSTRUCTION MATERIALS--0.6%
Martin Marietta Materials, Inc. .................... 1,800 84,546
-----------
DATA PROCESSING & OUTSOURCED SERVICES--4.4%
Affiliated Computer Services, Inc. Class A (b) ..... 2,600 141,596
Ceridian Corp. (b) ................................. 13,700 286,878
Certegy, Inc. ...................................... 5,000 164,000
-----------
592,474
-----------
DISTRIBUTORS--1.1%
Genuine Parts Co. .................................. 4,600 152,720
-----------
DIVERSIFIED CHEMICALS--0.8%
Engelhard Corp. .................................... 3,600 107,820
-----------
DIVERSIFIED COMMERCIAL SERVICES--0.9%
Viad Corp. ......................................... 4,700 117,500
-----------
ELECTRIC UTILITIES--3.3%
FPL Group, Inc. .................................... 1,300 85,046
TECO Energy, Inc. .................................. 8,300 119,603
Wisconsin Energy Corp. ............................. 7,100 237,495
-----------
442,144
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--2.2%
Rockwell Automation, Inc. .......................... 3,800 135,280
Roper Industries, Inc. ............................. 3,300 162,558
-----------
297,838
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--5.8%
Agilent Technologies, Inc. (b) ..................... 3,800 111,112
Amphenol Corp. Class A (b) ......................... 1,900 121,467
Mettler-Toledo International, Inc. (b) ............. 4,200 177,282
Vishay Intertechnology, Inc. (b) ................... 5,100 116,790
Waters Corp. (b) ................................... 7,900 261,964
-----------
788,615
-----------
ENVIRONMENTAL SERVICES--1.8%
Republic Services, Inc. ............................ 9,300 238,359
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--1.2%
Scotts Co. (The) Class A (b) ....................... 2,800 165,648
-----------
FOOD RETAIL--2.0%
Kroger Co. (The) (b) ............................... 8,600 159,186
Safeway, Inc. (b) .................................. 5,100 111,741
-----------
270,927
-----------
FOOTWEAR--1.2%
NIKE, Inc. Class B ................................. 2,300 157,458
-----------
GENERAL MERCHANDISE STORES--1.1%
Family Dollar Stores, Inc. ......................... 4,200 150,696
-----------
SHARES VALUE
------- -----------
HEALTH CARE DISTRIBUTORS--0.7%
AmerisourceBergen Corp. ............................ 1,600 $ 89,840
-----------
HEALTH CARE EQUIPMENT--2.8%
Apogent Technologies, Inc. (b) ..................... 11,700 269,568
Bard (C.R.), Inc. .................................. 1,300 105,625
-----------
375,193
-----------
HEALTH CARE SERVICES--1.8%
IMS Health, Inc. ................................... 10,100 251,086
-----------
HEALTH CARE SUPPLIES--1.1%
Millipore Corp. (b) ................................ 3,400 146,370
-----------
HOME FURNISHINGS--1.5%
Mohawk Industries, Inc. (b) ........................ 2,900 204,566
-----------
HOUSEWARES & SPECIALTIES--1.3%
Newell Rubbermaid, Inc. ............................ 7,700 175,329
-----------
INDUSTRIAL MACHINERY--6.6%
Dover Corp. ........................................ 7,900 314,025
ITT Industries, Inc. ............................... 1,400 103,894
Molex, Inc. Class A ................................ 3,300 96,888
Pentair, Inc. ...................................... 4,100 187,370
SPX Corp. (b) ...................................... 3,400 199,954
-----------
902,131
-----------
LEISURE PRODUCTS--2.5%
Brunswick Corp. .................................... 10,500 334,215
-----------
METAL & GLASS CONTAINERS--1.4%
Pactiv Corp. (b) ................................... 7,700 184,030
-----------
OFFICE SERVICES & SUPPLIES--1.8%
Miller (Herman), Inc. .............................. 6,000 145,620
Pitney Bowes, Inc. ................................. 2,400 97,488
-----------
243,108
-----------
OIL & GAS DRILLING--1.0%
Noble Corp. (b) .................................... 3,700 132,386
-----------
OIL & GAS EQUIPMENT & SERVICES--3.1%
BJ Services Co. (b) ................................ 3,800 136,420
Cooper Cameron Corp. (b) ........................... 3,000 139,800
Smith International, Inc. (b) ...................... 3,500 145,320
-----------
421,540
-----------
OIL & GAS EXPLORATION & PRODUCTION--2.9%
Devon Energy Corp. ................................. 1,656 94,823
Pioneer Natural Resources Co. (b) .................. 4,400 140,492
XTO Energy, Inc. ................................... 5,500 155,650
-----------
390,965
-----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--1.3%
Valero Energy Corp. ................................ 3,800 176,092
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--1.2%
Principal Financial Group, Inc. .................... 5,000 165,350
-----------
PACKAGED FOODS & MEATS--2.1%
Campbell Soup Co. .................................. 10,600 284,080
-----------
PUBLISHING & PRINTING--1.6%
Lee Enterprises, Inc. .............................. 1,700 74,205
New York Times Co. (The) Class A ................... 2,900 138,591
-----------
212,796
-----------
See Notes to Financial Statements
13
PHOENIX-AIM MID-CAP EQUITY SERIES
SHARES VALUE
------- -----------
REGIONAL BANKS--1.8%
Marshall & Ilsley Corp. ............................ 2,000 $ 76,500
TCF Financial Corp. ................................ 3,300 169,455
-----------
245,955
-----------
RESTAURANTS--0.7%
Outback Steakhouse, Inc. ........................... 2,300 101,683
-----------
SEMICONDUCTOR EQUIPMENT--0.9%
Novellus Systems, Inc. (b) ......................... 2,900 121,945
-----------
SEMICONDUCTORS--2.1%
Microchip Technology, Inc. ......................... 4,600 153,456
Xilinx, Inc. (b) ................................... 3,300 127,842
-----------
281,298
-----------
SPECIALTY CHEMICALS--2.5%
International Flavors & Fragrances, Inc. ........... 9,700 338,724
-----------
SYSTEMS SOFTWARE--2.7%
Computer Associates International, Inc. ............ 13,600 371,824
-----------
THRIFTS & MORTGAGE FINANCE--0.8%
MGIC Investment Corp. .............................. 2,000 113,880
-----------
TRADING COMPANIES & DISTRIBUTORS--1.1%
Grainger (W.W.), Inc. .............................. 3,100 146,908
-----------
TOTAL COMMON STOCKS
(Identified cost $8,711,960) ................................ 10,703,744
-----------
FOREIGN COMMON STOCKS--3.3%
PHARMACEUTICALS--1.0%
Teva Pharmaceutical Industries Ltd. ADR (Israel) ... 2,500 141,775
-----------
PROPERTY & CASUALTY INSURANCE--1.1%
ACE Ltd. (Bermuda) ................................. 3,500 144,970
-----------
SEMICONDUCTOR EQUIPMENT--1.2%
ASML Holding NV NY Registered Shares
(Netherlands) (b) ................................ 8,100 162,405
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $298,656) .................................. 449,150
-----------
TOTAL LONG TERM INVESTMENTS--82.3%
(Identified cost $9,010,616) ................................ 11,152,894
-----------
PAR
VALUE
(000) VALUE
------ -----------
SHORT-TERM OBLIGATIONS--18.8%
REPURCHASE AGREEMENTS--18.8%
State Street Bank & Trust Co. repurchase agreement,
0.85% dated 12/31/03, due 1/2/04, repurchase price
$2,553,121, collateralized by Freddie Mac 2.13%,
12/12/05, market value $2,604,586 ................ $ 2,553 $ 2,553,000
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,553,000) ................................ 2,553,000
-----------
TOTAL INVESTMENTS--101.1%
(Identified cost $11,563,616) ............................... 13,705,894(a)
Other assets and liabilities, net--(1.1)% ................... (155,609)
-----------
NET ASSETS--100.0% ............................................ $13,550,285
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,219,029 and gross
depreciation of $115,035 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$11,601,900.
(b) Non-income producing.
See Notes to Financial Statements
14
PHOENIX-AIM MID-CAP EQUITY SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value exclusive of repurchase agreements (Identified cost $9,010,616) .......... $11,152,894
Repurchase agreements at value (Identified cost $2,553,000).............................................. 2,553,000
Cash .................................................................................................... 615
Receivables
Fund shares sold ...................................................................................... 38,098
Dividends and interest ................................................................................ 8,705
Prepaid expenses ........................................................................................ 148
-----------
Total assets ........................................................................................ 13,753,460
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 141,636
Professional fee ...................................................................................... 28,503
Investment advisory fee ............................................................................... 5,410
Financial agent fee ................................................................................... 3,832
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 853
Accrued expenses ........................................................................................ 20,581
-----------
Total liabilities ................................................................................... 203,175
-----------
NET ASSETS .............................................................................................. $13,550,285
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $11,487,816
Accumulated net realized loss ......................................................................... (79,809)
Net unrealized appreciation ........................................................................... 2,142,278
-----------
NET ASSETS .............................................................................................. $13,550,285
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 1,114,565
===========
Net asset value and offering price per share ............................................................ $12.16
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 84,402
Interest ...................................................................................................... 17,953
Foreign taxes withheld ........................................................................................ (139)
----------
Total investment income ..................................................................................... 102,216
----------
EXPENSES
Investment advisory fee ....................................................................................... 83,450
Financial agent fee ........................................................................................... 42,775
Administration fee ............................................................................................ 7,560
Custodian ..................................................................................................... 27,875
Professional .................................................................................................. 25,089
Printing ...................................................................................................... 21,198
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 9,338
----------
Total expenses .............................................................................................. 223,216
Less expenses borne by investment adviser ................................................................... (115,215)
Custodian fees paid indirectly .............................................................................. (6)
----------
Net expenses ................................................................................................ 107,995
----------
NET INVESTMENT LOSS ............................................................................................. (5,779)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 52,861
Net change in unrealized appreciation (depreciation) on investments ........................................... 2,452,061
----------
NET GAIN ON INVESTMENTS ......................................................................................... 2,504,922
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $2,499,143
==========
See Notes to Financial Statements
15
PHOENIX-AIM MID-CAP EQUITY SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- ----------
FROM OPERATIONS
Net investment income (loss) ................................................................... $ (5,779) $ (4,070)
Net realized gain (loss) ....................................................................... 52,861 (132,670)
Net change in unrealized appreciation (depreciation) ........................................... 2,452,061 (521,094)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 2,499,143 (657,834)
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................................................................... -- (918)
Net realized short-term gains .................................................................. -- (5,492)
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ...................................... -- (6,410)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (480,583 and 569,087 shares, respectively) ....................... 5,129,520 5,702,437
Net asset value of shares issued from reinvestment of distributions
(0 and 617 shares, respectively) ............................................................. -- 6,410
Cost of shares repurchased (197,687 and 90,166 shares, respectively) ........................... (1,965,767) (909,289)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ...................................... 3,163,753 4,799,558
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... 5,662,896 4,135,314
NET ASSETS
Beginning of period ............................................................................ 7,887,389 3,752,075
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ....... $13,550,285 $7,887,389
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED
DECEMBER 31, FROM INCEPTION
------------------ 10/29/01 TO
2003 2002 12/31/01
------- ------ --------------
Net asset value, beginning of period ................................................... $ 9.48 $10.66 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ......................................................... --(4) --(4) --(4)
Net realized and unrealized gain (loss) .............................................. 2.68 (1.17) 0.66
------- ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................................... 2.68 (1.17) 0.66
------- ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................................................. -- --(4) --
Distributions from net realized gains ................................................ -- (0.01) --
------- ------ ------
TOTAL DISTRIBUTIONS ................................................................ -- (0.01) --
------- ------ ------
CHANGE IN NET ASSET VALUE .............................................................. 2.68 (1.18) 0.66
------- ------ ------
NET ASSET VALUE, END OF PERIOD ......................................................... $ 12.16 $ 9.48 $10.66
------- ------ ------
Total return ........................................................................... 28.19% (10.89)% 6.55%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ................................................ $13,550 $7,887 $3,752
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ................................................................ 1.10%(5) 1.09%(5) 1.05%(2)
Net investment income (loss) ......................................................... (0.06)% (0.07)% 0.16%(2)
Portfolio turnover ..................................................................... 42% 47% 12%(3)
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 2.27%, 3.43% and 7.13% for the periods ended December 31, 2003, 2002 and 2001, respectively.
(2) Annualized.
(3) Not annualized.
(4) Amount is less than $0.01.
(5) 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.
</FN>
See Notes to Financial Statements
16
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks high total return.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: The series was up 26.23%, slightly under-performing the S&P 500(R) Index 1,
which was up 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE YEAR?
A: U.S. stocks staged a stunning rally in 2003, ending a three-year losing
streak as mounting signs of an economic recovery bolstered expectations for a
continued expansion of corporate profits into 2004. Glimmers of an upturn became
apparent first in the resilient consumer sector, but quickly spread to include a
solid rebound in manufacturing and continued vigorous activity in the housing
market. The improving environment culminated in a 30% gain for corporate
earnings in the third quarter, the largest year-over-year change in 19 years.
Signs of a rebound in Europe, which flirted with recession earlier in the year,
and Japan, which spent most of last decade stuck in economic doldrums, also
contributed to the positive mood, reinforcing profit expectations for U.S. firms
with broad exposure to global markets. As a result, the S&P 500(R) Index
finished 2003 up a robust 28.71%, with 12.2% of that gain coming from a strong
buying spree in the fourth quarter.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES PERFORMANCE THIS
PAST YEAR?
A: Much of the underperformance for the year stemmed from our low exposure to
the strong performance of small-cap, high-beta and low-quality stocks that
dominated the index results in 2003. The largest detractors from performance
were the consumer cyclicals and medical. We were underweight in TimeWarner and
Yahoo which both performed well. And we were overweight in MedImmune and King
Pharmaceuticals, which were down 15% and 9%, respectively.
The largest contributor to the portfolio's performance this period was
stock selection within the capital equipment sector. Goodrich, Paccar, Lockheed
Martin and Textron were up 98%, 82%, 14% and 63%, respectively. Stock selection
in the energy sector contributed as well, Ashland was up 19% and Marathon Oil
was up 47%.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: Looking ahead, high productivity and low inflation will likely remain the
cornerstones of the economic recovery. For many U.S. corporations, faster
economic growth and ongoing cost containment via rapid productivity improvements
have been helping to boost earnings, and we do not expect that to change
dramatically in 2004. This bright outlook is underpinned by several factors.
First, another $75-$90 billion of fiscal stimulus is on tap in 2004, while
liquidity flows remain ample for promoting continued economy expansion. Second,
an improving labor market, higher wage gains and much-improved household balance
sheets bode quite well for consumer spending this year. Third, with final sales
still growing briskly and new orders, backlogs and profits on the rise, we
expect corporate America to enter a robust inventory-rebuilding cycle in 2004.
Fourth, as long as U.S. interest rates remain low relative to other countries',
we expect the U.S. dollar to remain weak, which should continue to give U.S.
multinationals a strong competitive edge just as leading economic indicators are
suggesting a rapid and broad global upturn is under way.
We believe there is attractive opportunity for the series--and for our
growth holdings in particular--as investors gravitate toward higher-quality
holdings now selling at very compelling prices. Our value holdings also have
room to outperform as they continue to trade at a discount to the market.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct investment;
therefore its performance does not reflect the expenses associated with the
active management of an actual portfolio.
17
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
7/15/97 TO
1 YEAR 5 YEARS 12/31/03
- --------------------------------------------------------------------------------
Enhanced Index Series 26.23% (2.24)% 3.44%
- --------------------------------------------------------------------------------
S&P 500(R) Index 1 28.71% (0.57)% 4.42%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 7/15/97 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Enhanced Index Series S&P 500(R) Index 1
7/15/97 $10,000 $10,000
12/31/97 $10,583 $10,567
12/31/98 $13,935 $13,605
12/31/99 $16,563 $16,481
12/29/00 $14,663 $14,966
12/31/01 $12,918 $13,189
12/31/02 $9,859 $10,274
12/31/03 $12,445 $13,224
1 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct investment;
therefore its performance does not reflect the expenses associated with the
active management of an actual portfolio.
18
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- ------------
COMMON STOCKS--98.5%
ADVERTISING--0.1%
Interpublic Group of Cos., Inc. (The) (b) .......... 9,200 $ 143,520
------------
AEROSPACE & DEFENSE--1.3%
Boeing Co. (The) ................................... 2,100 88,494
Goodrich Corp. ..................................... 8,200 243,458
Honeywell International, Inc. ...................... 9,200 307,556
Northrop Grumman Corp. ............................. 1,500 143,400
United Technologies Corp. .......................... 6,600 625,482
------------
1,408,390
------------
AIR FREIGHT & COURIERS--0.4%
United Parcel Service, Inc. Class B ................ 6,300 469,665
------------
AIRLINES--0.3%
Southwest Airlines Co. ............................. 22,500 363,150
------------
ALUMINUM--0.3%
Alcoa, Inc. ........................................ 8,200 311,600
------------
APPAREL RETAIL--0.4%
Ross Stores, Inc. .................................. 5,600 148,008
TJX Cos., Inc. (The) ............................... 14,000 308,700
------------
456,708
------------
APPAREL, ACCESSORIES & LUXURY GOODS--0.2%
V. F. Corp. ........................................ 4,000 172,960
------------
APPLICATION SOFTWARE--0.2%
Mercury Interactive Corp. (b) ...................... 4,500 218,880
------------
ASSET MANAGEMENT & CUSTODY BANKS--0.1%
Bank of New York Co., Inc. (The) ................... 4,800 158,976
------------
AUTO PARTS & EQUIPMENT--0.3%
Dana Corp. ......................................... 5,300 97,255
Delphi Corp. ....................................... 7,400 75,554
Visteon Corp. ...................................... 11,900 123,879
------------
296,688
------------
AUTOMOBILE MANUFACTURERS--0.8%
Ford Motor Co. ..................................... 20,700 331,200
General Motors Corp. ............................... 10,600 566,040
------------
897,240
------------
BIOTECHNOLOGY--1.9%
Amgen, Inc. (b) .................................... 20,900 1,291,620
Cephalon, Inc. (b) ................................. 5,300 256,573
Gilead Sciences, Inc. (b) .......................... 5,100 296,514
MedImmune, Inc. (b) ................................ 8,000 203,200
------------
2,047,907
------------
BREWERS--0.7%
Anheuser-Busch Cos., Inc. .......................... 15,500 816,540
------------
BROADCASTING & CABLE TV--1.3%
Clear Channel Communications, Inc. ................. 2,400 112,392
Comcast Corp. Class A (b) .......................... 22,400 736,288
Comcast Corp. Special Class A (b) .................. 13,000 406,640
Westwood One, Inc. (b) ............................. 4,800 164,208
------------
1,419,528
------------
BUILDING PRODUCTS--0.6%
American Standard Cos., Inc. (b) ................... 4,100 412,870
Masco Corp. ........................................ 10,800 296,028
------------
708,898
------------
SHARES VALUE
------- ------------
COMMERCIAL PRINTING--0.2%
Donnelley (R.R.) & Sons Co. ........................ 6,500 $ 195,975
------------
COMMUNICATIONS EQUIPMENT--3.6%
ADC Telecommunications, Inc. (b) ................... 30,000 89,100
Cisco Systems, Inc. (b) ............................ 96,700 2,348,843
Corning, Inc. (b) .................................. 22,800 237,804
Lucent Technologies, Inc. (b) ...................... 65,000 184,600
Motorola, Inc. ..................................... 31,100 437,577
QUALCOMM, Inc. ..................................... 12,800 690,304
------------
3,988,228
------------
COMPUTER HARDWARE--3.3%
Dell, Inc. (b) ..................................... 32,600 1,107,096
Hewlett-Packard Co. ................................ 38,500 884,345
International Business Machines Corp. .............. 16,200 1,501,416
Sun Microsystems, Inc. (b) ......................... 24,200 108,658
------------
3,601,515
------------
COMPUTER STORAGE & PERIPHERALS--0.2%
EMC Corp. (b) ...................................... 15,000 193,800
Network Appliance, Inc. (b) ........................ 3,200 65,696
------------
259,496
------------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.7%
Caterpillar, Inc. .................................. 4,500 373,590
Deere & Co. ........................................ 3,900 253,695
PACCAR, Inc. ....................................... 2,000 170,240
------------
797,525
------------
CONSUMER FINANCE--1.4%
American Express Co. ............................... 6,000 289,380
MBNA Corp. ......................................... 33,300 827,505
SLM Corp. .......................................... 11,800 444,624
------------
1,561,509
------------
DATA PROCESSING & OUTSOURCED SERVICES--0.8%
Affiliated Computer Services, Inc. Class A (b) ..... 3,800 206,948
Automatic Data Processing, Inc. .................... 2,500 99,025
Electronic Data Systems Corp. ...................... 5,000 122,700
First Data Corp. ................................... 5,100 209,559
Fiserv, Inc. (b) ................................... 7,300 288,423
------------
926,655
------------
DEPARTMENT STORES--0.7%
Dillard's, Inc. Class A ............................ 7,200 118,512
May Department Stores Co. (The) .................... 6,000 174,420
Nordstrom, Inc. .................................... 4,900 168,070
Sears, Roebuck and Co. ............................. 7,500 341,175
------------
802,177
------------
DISTRIBUTORS--0.1%
Genuine Parts Co. .................................. 1,800 59,760
------------
DIVERSIFIED BANKS--4.4%
Bank of America Corp. .............................. 17,300 1,391,439
Bank One Corp. ..................................... 12,600 574,434
Comerica, Inc. ..................................... 3,900 218,634
FleetBoston Financial Corp. ........................ 15,800 689,670
U.S. Bancorp ....................................... 19,700 586,666
Wachovia Corp. ..................................... 14,700 684,873
Wells Fargo & Co. .................................. 12,200 718,458
------------
4,864,174
------------
DIVERSIFIED CAPITAL MARKETS--0.9%
J.P. Morgan Chase & Co. ............................ 25,700 943,961
------------
See Notes to Financial Statements
19
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
SHARES VALUE
------- ------------
DIVERSIFIED CHEMICALS--1.1%
Dow Chemical Co. (The) ............................. 7,000 $ 290,990
Du Pont (E.I.) de Nemours & Co. .................... 11,000 504,790
Eastman Chemical Co. ............................... 3,500 138,355
PPG Industries, Inc. ............................... 5,100 326,502
------------
1,260,637
------------
DIVERSIFIED COMMERCIAL SERVICES--0.3%
Cendant Corp. (b) .................................. 15,000 334,050
------------
ELECTRIC UTILITIES--2.9%
Ameren Corp. ....................................... 2,300 105,800
American Electric Power Co., Inc. .................. 11,200 341,712
CenterPoint Energy, Inc. ........................... 16,100 156,009
Cinergy Corp. ...................................... 3,600 139,716
Consolidated Edison, Inc. .......................... 3,000 129,030
DTE Energy Co. ..................................... 6,000 236,400
Entergy Corp. ...................................... 5,800 331,354
Exelon Corp. ....................................... 3,500 232,260
FirstEnergy Corp. .................................. 9,500 334,400
FPL Group, Inc. .................................... 2,700 176,634
PG&E Corp. (b) ..................................... 4,600 127,742
Pinnacle West Capital Corp. ........................ 3,000 120,060
PPL Corp. .......................................... 5,800 253,750
Progress Energy, Inc. .............................. 2,900 131,254
TXU Corp. .......................................... 8,500 201,620
Xcel Energy, Inc. .................................. 10,500 178,290
------------
3,196,031
------------
ELECTRICAL COMPONENTS & EQUIPMENT--0.6%
Cooper Industries Ltd. Class A ..................... 4,200 243,306
Emerson Electric Co. ............................... 3,500 226,625
Thomas & Betts Corp. (b) ........................... 6,100 139,629
------------
609,560
------------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.1%
Vishay Intertechnology, Inc. (b) ................... 5,500 125,950
------------
ELECTRONIC MANUFACTURING SERVICES--0.4%
Sanmina-SCI Corp. (b) .............................. 20,000 252,200
Solectron Corp. (b) ................................ 40,100 236,991
------------
489,191
------------
ENVIRONMENTAL SERVICES--0.2%
Waste Management, Inc. ............................. 6,000 177,600
------------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.1%
Monsanto Co. ....................................... 2,800 80,584
------------
FOOD RETAIL--0.6%
Albertson's, Inc. .................................. 7,800 176,670
Kroger Co. (The) (b) ............................... 8,200 151,782
Safeway, Inc. (b) .................................. 4,800 105,168
SUPERVALU, Inc. .................................... 8,300 237,297
------------
670,917
------------
FOREST PRODUCTS--0.2%
Weyerhaeuser Co. ................................... 2,900 185,600
------------
GAS UTILITIES--0.2%
Sempra Energy ...................................... 6,700 201,402
------------
GENERAL MERCHANDISE STORES--0.4%
Family Dollar Stores, Inc. ......................... 7,200 258,336
Target Corp. ....................................... 6,100 234,240
------------
492,576
------------
HEALTH CARE DISTRIBUTORS--0.1%
McKesson Corp. ..................................... 1,800 57,888
------------
SHARES VALUE
------- ------------
HEALTH CARE EQUIPMENT--2.4%
Applied Biosystems Group - Applera Corp. ........... 4,000 $ 82,840
Baxter International, Inc. ......................... 4,200 128,184
Guidant Corp. ...................................... 9,700 583,940
Medtronic, Inc. .................................... 21,600 1,049,976
St. Jude Medical, Inc. (b) ......................... 4,900 300,615
Zimmer Holdings, Inc. (b) .......................... 6,600 464,640
------------
2,610,195
------------
HEALTH CARE FACILITIES--0.6%
HCA, Inc. .......................................... 6,300 270,648
Health Management Associates, Inc. Class A ......... 15,600 374,400
------------
645,048
------------
HEALTH CARE SERVICES--0.3%
Caremark Rx, Inc. (b) .............................. 10,200 258,366
Medco Health Solutions, Inc. (b) ................... 2,508 85,247
------------
343,613
------------
HOME ENTERTAINMENT SOFTWARE--0.3%
Electronic Arts, Inc. (b) .......................... 6,000 286,680
------------
HOME IMPROVEMENT RETAIL--2.0%
Home Depot, Inc. (The) ............................. 32,000 1,135,680
Lowe's Cos., Inc. .................................. 15,600 864,084
Sherwin-Williams Co. (The) ......................... 5,500 191,070
------------
2,190,834
------------
HOTELS, RESORTS & CRUISE LINES--0.5%
Carnival Corp. ..................................... 12,700 504,571
Starwood Hotels & Resorts Worldwide, Inc. .......... 2,600 93,522
------------
598,093
------------
HOUSEHOLD APPLIANCES--0.1%
Whirlpool Corp. .................................... 1,500 108,975
------------
HOUSEHOLD PRODUCTS--2.0%
Colgate-Palmolive Co. .............................. 11,900 595,595
Kimberly-Clark Corp. ............................... 3,700 218,633
Procter & Gamble Co. (The) ......................... 13,900 1,388,332
------------
2,202,560
------------
HYPERMARKETS & SUPER CENTERS--2.6%
Wal-Mart Stores, Inc. .............................. 54,300 2,880,615
------------
INDUSTRIAL CONGLOMERATES--4.4%
3M Co. ............................................. 5,800 493,174
General Electric Co. ............................... 119,600 3,705,208
Textron, Inc. ...................................... 2,800 159,768
Tyco International Ltd. ............................ 19,700 522,050
------------
4,880,200
------------
INDUSTRIAL MACHINERY--0.9%
Danaher Corp. ...................................... 6,200 568,850
Eaton Corp. ........................................ 2,600 280,748
Ingersoll-Rand Co. Class A ......................... 1,200 81,456
Parker Hannifin Corp. .............................. 1,800 107,100
------------
1,038,154
------------
INSURANCE BROKERS--0.1%
Aon Corp. .......................................... 6,500 155,610
------------
INTEGRATED OIL & GAS--4.0%
ChevronTexaco Corp. ................................ 12,200 1,053,958
ConocoPhillips ..................................... 8,800 577,016
Exxon Mobil Corp. .................................. 62,300 2,554,300
Marathon Oil Corp. ................................. 7,400 244,866
------------
4,430,140
------------
See Notes to Financial Statements
20
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
SHARES VALUE
------- ------------
INTEGRATED TELECOMMUNICATION SERVICES--2.9%
ALLTEL Corp. ....................................... 4,100 $ 190,978
AT&T Corp. ......................................... 8,080 164,024
AT&T Wireless Services, Inc. (b) ................... 23,200 185,368
BellSouth Corp. .................................... 19,300 546,190
Qwest Communications International, Inc. (b) ....... 33,000 142,560
SBC Communications, Inc. ........................... 30,100 784,707
Sprint Corp. (FON Group) ........................... 16,000 262,720
Verizon Communications, Inc. ....................... 27,400 961,192
------------
3,237,739
------------
INTERNET RETAIL--0.8%
eBay, Inc. (b) ..................................... 14,000 904,260
------------
INTERNET SOFTWARE & SERVICES--0.5%
Yahoo!, Inc. (b) ................................... 12,500 564,625
------------
INVESTMENT BANKING & BROKERAGE--2.0%
Bear Stearns Cos., Inc. (The) ...................... 800 63,960
Goldman Sachs Group, Inc. (The) .................... 5,500 543,015
Lehman Brothers Holdings, Inc. ..................... 3,400 262,548
Merrill Lynch & Co., Inc. .......................... 8,800 516,120
Morgan Stanley ..................................... 13,600 787,032
------------
2,172,675
------------
LIFE & HEALTH INSURANCE--0.7%
Jefferson-Pilot Corp. .............................. 2,300 116,495
John Hancock Financial Services, Inc. .............. 5,800 217,500
MetLife, Inc. ...................................... 7,800 262,626
Prudential Financial, Inc. ......................... 3,800 158,726
------------
755,347
------------
MANAGED HEALTH CARE--1.5%
CIGNA Corp. ........................................ 5,600 322,000
UnitedHealth Group, Inc. ........................... 15,000 872,700
WellPoint Health Networks, Inc. (b) ................ 4,600 446,154
------------
1,640,854
------------
MOTORCYCLE MANUFACTURERS--0.2%
Harley-Davidson, Inc. .............................. 4,400 209,132
------------
MOVIES & ENTERTAINMENT--1.4%
Time Warner, Inc. (b) .............................. 29,900 537,901
Viacom, Inc. Class B ............................... 13,200 585,816
Walt Disney Co. (The) .............................. 17,200 401,276
------------
1,524,993
------------
MULTI-LINE INSURANCE--2.1%
American International Group, Inc. ................. 32,400 2,147,472
Hartford Financial Services Group, Inc. (The) ...... 3,000 177,090
------------
2,324,562
------------
MULTI-UTILITIES & UNREGULATED POWER--0.2%
El Paso Corp. ...................................... 21,500 176,085
------------
OFFICE ELECTRONICS--0.1%
Xerox Corp. (b) .................................... 7,500 103,500
------------
OFFICE SERVICES & SUPPLIES--0.1%
Pitney Bowes, Inc. ................................. 2,500 101,550
------------
OIL & GAS DRILLING--0.1%
Transocean, Inc. (b) ............................... 2,900 69,629
------------
OIL & GAS EQUIPMENT & SERVICES--0.3%
Halliburton Co. .................................... 6,400 166,400
Schlumberger Ltd. .................................. 2,000 109,440
------------
275,840
------------
SHARES VALUE
------- ------------
OIL & GAS EXPLORATION & PRODUCTION--0.5%
Apache Corp. ....................................... 3,100 $ 251,410
Evergreen Resources, Inc. (b) ...................... 8,600 279,586
------------
530,996
------------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--0.2%
Ashland, Inc. ...................................... 4,200 185,052
------------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.7%
Citigroup, Inc. .................................... 61,200 2,970,648
------------
PACKAGED FOODS & MEATS--1.2%
Campbell Soup Co. .................................. 19,800 530,640
ConAgra Foods, Inc. ................................ 5,100 134,589
Dean Foods Co. (b) ................................. 7,100 233,377
General Mills, Inc. ................................ 9,400 425,820
------------
1,324,426
------------
PAPER PACKAGING--0.2%
Temple-Inland, Inc. ................................ 3,600 225,612
------------
PAPER PRODUCTS--0.7%
Georgia-Pacific Corp. .............................. 8,000 245,360
International Paper Co. ............................ 7,200 310,392
MeadWestvaco Corp. ................................. 5,900 175,525
------------
731,277
------------
PERSONAL PRODUCTS--0.5%
Avon Products, Inc. ................................ 4,500 303,705
Gillette Co. (The) ................................. 6,200 227,726
------------
531,431
------------
PHARMACEUTICALS--7.9%
Abbott Laboratories ................................ 7,600 354,160
Allergan, Inc. ..................................... 1,600 122,896
Barr Pharmaceuticals, Inc. (b) ..................... 4,000 307,800
Bristol-Myers Squibb Co. ........................... 17,400 497,640
Forest Laboratories, Inc. (b) ...................... 6,000 370,800
Johnson & Johnson .................................. 29,000 1,498,140
Lilly (Eli) & Co. .................................. 6,100 429,013
Merck & Co., Inc. .................................. 18,800 868,560
Pfizer, Inc. ....................................... 95,440 3,371,895
Schering-Plough Corp. .............................. 6,600 114,774
Wyeth .............................................. 18,600 789,570
------------
8,725,248
------------
PHOTOGRAPHIC PRODUCTS--0.1%
Eastman Kodak Co. .................................. 6,000 154,020
------------
PROPERTY & CASUALTY INSURANCE--1.7%
Allstate Corp. (The) ............................... 9,100 391,482
Chubb Corp. (The) .................................. 2,600 177,060
MBIA, Inc. ......................................... 4,000 236,920
Progressive Corp. (The) ............................ 7,000 585,130
St. Paul Cos., Inc. (The) .......................... 4,400 174,460
Travelers Property Casualty Corp. Class B .......... 18,000 305,460
------------
1,870,512
------------
PUBLISHING & PRINTING--0.3%
Tribune Co. ........................................ 6,700 345,720
------------
RAILROADS--0.6%
Burlington Northern Santa Fe Corp. ................. 5,600 181,160
CSX Corp. .......................................... 5,000 179,700
Norfolk Southern Corp. ............................. 10,300 243,595
------------
604,455
------------
See Notes to Financial Statements
21
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
SHARES VALUE
------- ------------
REGIONAL BANKS--2.2%
AmSouth Bancorp .................................... 5,600 $ 137,200
BB&T Corp. ......................................... 5,200 200,928
Commerce Bancorp, Inc. ............................. 5,200 273,936
Huntington Bancshares, Inc. ........................ 6,300 141,750
KeyCorp ............................................ 11,600 340,112
National City Corp. ................................ 8,900 302,066
PNC Financial Services Group, Inc. (The) ........... 6,800 372,164
Regions Financial Corp. ............................ 4,800 178,560
SouthTrust Corp. ................................... 3,500 114,555
SunTrust Banks, Inc. ............................... 4,200 300,300
Union Planters Corp. ............................... 3,000 94,470
------------
2,456,041
------------
REITS--0.4%
Equity Office Properties Trust ..................... 11,000 315,150
Equity Residential Properties Trust ................ 5,700 168,207
------------
483,357
------------
RESTAURANTS--0.3%
McDonald's Corp. ................................... 9,600 238,368
Yum! Brands, Inc. (b) .............................. 2,500 86,000
------------
324,368
------------
SEMICONDUCTOR EQUIPMENT--0.5%
Applied Materials, Inc. (b) ........................ 25,300 567,985
------------
SEMICONDUCTORS--3.7%
Advanced Micro Devices, Inc. (b) ................... 8,500 126,650
Altera Corp. (b) ................................... 11,100 251,970
Broadcom Corp. Class A (b) ......................... 8,600 293,174
Intel Corp. ........................................ 72,200 2,324,840
Linear Technology Corp. ............................ 8,000 336,560
Maxim Integrated Products, Inc. .................... 7,600 378,480
Texas Instruments, Inc. ............................ 12,900 379,002
------------
4,090,676
------------
SOFT DRINKS--1.3%
Coca-Cola Co. (The) ................................ 18,000 913,500
Coca-Cola Enterprises, Inc. ........................ 3,800 83,106
PepsiCo, Inc. ...................................... 10,200 475,524
------------
1,472,130
------------
SPECIALTY CHEMICALS--0.3%
Lubrizol Corp. (The) ............................... 5,100 165,852
Rohm and Haas Co. .................................. 4,500 192,195
------------
358,047
------------
SPECIALTY STORES--0.3%
Bed Bath & Beyond, Inc. (b) ........................ 8,700 377,145
------------
SHARES VALUE
------- ------------
STEEL--0.1%
Worthington Industries, Inc. ....................... 5,700 $ 102,771
------------
SYSTEMS SOFTWARE--4.2%
Microsoft Corp. .................................... 118,900 3,274,506
Oracle Corp. (b) ................................... 46,800 617,760
Symantec Corp. (b) ................................. 9,000 311,850
VERITAS Software Corp. (b) ......................... 11,300 419,908
------------
4,624,024
------------
THRIFTS & MORTGAGE FINANCE--1.3%
Fannie Mae ......................................... 15,600 1,170,936
Washington Mutual, Inc. ............................ 7,400 296,888
------------
1,467,824
------------
TOBACCO--1.5%
Altria Group, Inc. ................................. 30,000 1,632,600
------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
Nextel Communications, Inc. Class A (b) ............ 11,200 314,272
------------
TOTAL COMMON STOCKS
(Identified cost $98,669,427) .............................. 108,675,756
------------
FOREIGN COMMON STOCKS--0.6%
PROPERTY & CASUALTY INSURANCE--0.4%
ACE Ltd. (Bermuda) ................................. 7,600 314,792
XL Capital Ltd. Class A (Bermuda) .................. 2,000 155,100
------------
469,892
------------
SEMICONDUCTORS--0.2%
Marvell Technology Group Ltd. (Bermuda) (b) ........ 5,900 223,787
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $582,307) ................................. 693,679
------------
TOTAL LONG TERM INVESTMENTS--99.1%
(Identified cost $99,251,734) .............................. 109,369,435
------------
SHORT-TERM OBLIGATIONS--0.9%
MONEY MARKET MUTUAL FUNDS--0.9%
SSgA Money Market Fund (0.72% seven day
effective yield) ................................. 920,261 920,261
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $920,261) ................................. 920,261
------------
TOTAL INVESTMENTS--100.0%
(Identified cost $100,171,995) ............................. 110,289,696(a)
Other assets and liabilities, net--0.0% 44,733
------------
NET ASSETS--100.0% ........................................... $110,334,429
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $17,009,888 and gross
depreciation of $8,132,212 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$101,412,020.
(b) Non-income producing.
See Notes to Financial Statements
22
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $100,171,995) ........................................... $110,289,696
Receivables
Fund shares sold ...................................................................................... 217,480
Dividends and interest ................................................................................ 152,116
Prepaid expenses ........................................................................................ 1,384
------------
Total assets ........................................................................................ 110,660,676
------------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 207,331
Investment advisory fee ............................................................................... 42,968
Professional fee ...................................................................................... 28,283
Printing fee .......................................................................................... 20,076
Financial agent fee ................................................................................... 8,531
Administration fee .................................................................................... 6,974
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 9,724
------------
Total liabilities ................................................................................... 326,247
------------
NET ASSETS .............................................................................................. $110,334,429
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $130,628,916
Undistributed net investment income ................................................................... 126,805
Accumulated net realized loss ......................................................................... (30,538,993)
Net unrealized appreciation ........................................................................... 10,117,701
------------
NET ASSETS .............................................................................................. $110,334,429
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 10,809,458
============
Net asset value and offering price per share ............................................................ $10.21
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 1,666,421
Interest .............................................................................................. 10,384
-----------
Total investment income ............................................................................. 1,676,805
-----------
EXPENSES
Investment advisory fee ............................................................................... 412,645
Financial agent fee ................................................................................... 94,229
Administration fee .................................................................................... 70,608
Custodian ............................................................................................. 35,723
Printing .............................................................................................. 33,657
Professional .......................................................................................... 18,086
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 11,917
-----------
Total expenses ...................................................................................... 682,796
Less expenses borne by investment adviser ........................................................... (86,752)
-----------
Net expenses ........................................................................................ 596,044
-----------
NET INVESTMENT INCOME ................................................................................... 1,080,761
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (6,247,693)
Net realized loss on futures contracts ................................................................ (213,478)
Net change in unrealized appreciation (depreciation) on investments ................................... 27,261,052
-----------
NET GAIN ON INVESTMENTS ................................................................................. 20,799,881
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $21,880,642
===========
See Notes to Financial Statements
23
PHOENIX-ALLIANCE/BERNSTEIN ENHANCED INDEX SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ..................................................................... $ 1,080,761 $ 860,866
Net realized gain (loss) ......................................................................... (6,461,171) (14,499,980)
Net change in unrealized appreciation (depreciation) ............................................. 27,261,052 (12,371,803)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...................................... 21,880,642 (26,010,917)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................ (1,038,693) (865,183)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ........................................ (1,038,693) (865,183)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (3,876,714 and 3,390,402 shares, respectively) ..................... 34,440,351 31,856,784
Net asset value of shares issued from reinvestment of distributions (111,579 and 97,959 shares,
respectively) .................................................................................. 1,038,693 865,183
Cost of shares repurchased (3,330,657 and 3,092,001 shares, respectively) ........................ (28,964,646) (28,361,225)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ........................................ 6,514,398 4,360,742
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................ 27,356,347 (22,515,358)
NET ASSETS
Beginning of period .............................................................................. 82,978,082 105,493,440
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $126,805 AND $99,343,
RESPECTIVELY) .................................................................................. $110,334,429 $ 82,978,082
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
-------------------------------------------------
2003 2002 2001(3) 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period .................................... $ 8.17 $10.81 $12.44 $14.64 $13.08
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .......................................... 0.10 0.08 0.09 0.11 0.12
Net realized and unrealized gain (loss) ............................... 2.04 (2.63) (1.57) (1.75) 2.33
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................................... 2.14 (2.55) (1.48) (1.64) 2.45
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income .................................. (0.10) (0.09) (0.08) (0.11) (0.12)
Distributions from net realized gains ................................. -- -- (0.07) (0.45) (0.77)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................................. (0.10) (0.09) (0.15) (0.56) (0.89)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ............................................... 2.04 (2.64) (1.63) (2.20) 1.56
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .......................................... $10.21 $ 8.17 $10.81 $12.44 $14.64
====== ====== ====== ====== ======
Total return ............................................................ 26.23% (23.68)% (11.90)% (11.47)% 18.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ................................... $110,334 $82,978 $105,493 $115,625 $131,860
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) ................................................ 0.65% 0.63%(2) 0.55%(2) 0.55% 0.55%
Net investment income ................................................. 1.18% 0.91% 0.80% 0.80% 0.95%
Portfolio turnover ...................................................... 52% 44% 40% 63% 45%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 0.74%, 0.73%, 0.70%, 0.69% and 0.75% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(2) 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) As required, effective January 1, 2001, the Fund adopted the provisions of AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities. There was no effect to net investment income per share and net
realized and unrealized gain (loss) per share and the ratio of net investment income to average net assets. Per share ratios
and supplemental data from prior periods have not been restated to reflect this change.
</FN>
See Notes to Financial Statements
24
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The portfolio seeks long-term capital growth.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the fiscal year ended December 31, 2003, the fund returned 26.06%,
underperforming its benchmark, the Russell 1000(R) Index 1, which gained 29.89%
and the S&P 500(R) Index 2, which gained 28.71%. All performance figures assume
reinvestment of distributions. Past performance is not indicative of future
results and current performance may be higher or lower than the performance
shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: U.S. equities emerged from their worst bear market since the Great
Depression. Driving the continued upturn in the markets is mounting evidence
that the economy and corporate profits are improving. Corporate profits, in
particular, have been bouncing back very significantly. We expect free cash flow
for U.S. corporations to reach a record in 2003. This gives companies the
wherewithal to increase their business investment, hire more employees, and pay
out more dividends. Moreover, the fundamentals are brightened by an
investor-friendly tax cut on dividends and capital gains, and a low inflation
rate that's likely to increase only moderately.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Among the largest detractors from performance were overweights in select
technology stocks. The big growth winners in 2003 were less-proven,
lower-quality companies, many of which, in our analysis, may face problems going
forward. Our discipline led us to the other side of the spectrum, emphasizing
high-quality companies in a range of industries. Not surprisingly, the portfolio
benefited most from its pro-cyclical holdings. Stock selection was strong in
certain areas, most notably in energy. Energy companies ConocoPhillips and
Occidental Petroleum also fared well. Additionally, Nortel Networks, Lowes and
Intel were among the fund's notable contributors for the year.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: The increasingly positive economic environment, coupled with outperformance
by value during 2000-2002, has reduced the value opportunity. The big value
themes that we saw in recent years have largely been realized, and no other
major themes have emerged yet. Our response has been to limit sector risk by
diversifying even more than usual, as the value opportunity has become more
spread out among the sectors.
We believe that the current opportunity for growth investing is compelling,
and we are confident that the growth portion of the portfolio continues to be
well positioned for a potential upswing in equity prices. For example, we have
maintained positions in stable, high-quality growth stocks, focusing on the
factors that have proved relatively trustworthy gauges of a company's ability to
sustain exceptional growth over the long-term, such as an emphasis on research
and development, experienced management and strong balance sheets.
As always, we will continue to use our bottom-up growth and value stock
research to take advantage of the opportunities in the current environment and
build an attractive portfolio with strong growth potential at attractive prices.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 1000(R) Index is a market capitalization-weighted index of the
1,000 largest companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
25
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
10/29/01 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Growth + Value Series 26.06% 0.51%
- --------------------------------------------------------------------------------
Russell 1000(R) Index 1 29.89% 4.00%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 3.19%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 10/29/01 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Growth + Value Series Russell 1000(R) Index 1 S&P 500(R) Index 2
10/29/01 $10,000 $10,000 $10,000
12/31/01 $10,703 $10,701 $10,677
12/31/02 $ 8,020 $ 8,384 $ 8,317
12/31/03 $10,110 $10,890 $10,705
1 The Russell 1000(R) Index is a market capitalization-weighted index of the
1,000 largest companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
26
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- ----------
COMMON STOCKS--92.5%
BIOTECHNOLOGY--2.3%
Amgen, Inc. (b) .................................... 3,500 $ 216,300
----------
BROADCASTING & CABLE TV--3.1%
Comcast Corp. Special Class A (b) .................. 9,215 288,245
----------
COMMUNICATIONS EQUIPMENT--2.5%
Cisco Systems, Inc. (b) ............................ 7,900 191,891
Tellabs, Inc. (b) .................................. 4,800 40,464
----------
232,355
----------
COMPUTER HARDWARE--5.2%
Dell, Inc. (b) ..................................... 8,400 285,264
Hewlett-Packard Co. ................................ 8,800 202,136
----------
487,400
----------
CONSUMER FINANCE--2.5%
MBNA Corp. ......................................... 9,350 232,348
----------
DEPARTMENT STORES--1.5%
Federated Department Stores, Inc. .................. 700 32,991
Kohl's Corp. (b) ................................... 1,000 44,940
Sears, Roebuck and Co. ............................. 1,400 63,686
----------
141,617
----------
DIVERSIFIED BANKS--3.3%
Bank of America Corp. .............................. 2,000 160,860
FleetBoston Financial Corp. ........................ 1,300 56,745
Wachovia Corp. ..................................... 1,900 88,521
----------
306,126
----------
DIVERSIFIED CHEMICALS--0.6%
Du Pont (E.I.) de Nemours & Co. .................... 1,300 59,657
----------
DRUG RETAIL--0.9%
Walgreen Co. ....................................... 2,400 87,312
----------
ELECTRIC UTILITIES--2.5%
American Electric Power Co., Inc. .................. 3,100 94,581
Entergy Corp. ...................................... 1,400 79,982
PPL Corp. .......................................... 1,400 61,250
----------
235,813
----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.7%
Cooper Industries Ltd. Class A ..................... 1,100 63,723
----------
ELECTRONIC MANUFACTURING SERVICES--1.0%
Solectron Corp. (b) ................................ 15,400 91,014
----------
FOOD RETAIL--1.5%
Kroger Co. (The) (b) ............................... 2,500 46,275
Safeway, Inc. (b) .................................. 4,100 89,831
----------
136,106
----------
GAS UTILITIES--0.7%
Sempra Energy ...................................... 2,100 63,126
----------
HEALTH CARE EQUIPMENT--1.6%
Medtronic, Inc. .................................... 3,100 150,691
----------
HOME ENTERTAINMENT SOFTWARE--1.6%
Electronic Arts, Inc. (b) .......................... 3,100 148,118
----------
HOME IMPROVEMENT RETAIL--1.6%
Lowe's Cos., Inc. .................................. 2,700 149,553
----------
SHARES VALUE
------- ----------
HOUSEHOLD APPLIANCES--1.2%
Whirlpool Corp. .................................... 1,500 $ 108,975
----------
HOUSEHOLD PRODUCTS--0.5%
Procter & Gamble Co. (The) ......................... 500 49,940
----------
HYPERMARKETS & SUPER CENTERS--2.4%
Wal-Mart Stores, Inc. .............................. 4,300 228,115
----------
INDUSTRIAL CONGLOMERATES--4.3%
General Electric Co. ............................... 8,850 274,173
Textron, Inc. ...................................... 2,300 131,238
----------
405,411
----------
INDUSTRIAL MACHINERY--0.5%
Eaton Corp. ........................................ 400 43,192
----------
INTEGRATED OIL & GAS--2.9%
ConocoPhillips ..................................... 2,520 165,236
Occidental Petroleum Corp. ......................... 2,400 101,376
----------
266,612
----------
INTEGRATED TELECOMMUNICATION SERVICES--0.6%
Sprint Corp. (FON Group) ........................... 3,400 55,828
----------
INTERNET RETAIL--1.5%
eBay, Inc. (b) ..................................... 2,200 142,098
----------
INTERNET SOFTWARE & SERVICES--0.4%
Yahoo!, Inc. (b) ................................... 900 40,653
----------
INVESTMENT BANKING & BROKERAGE--3.7%
Goldman Sachs Group, Inc. (The) .................... 1,800 177,714
Lehman Brothers Holdings, Inc. ..................... 1,000 77,220
Merrill Lynch & Co., Inc. .......................... 700 41,055
Morgan Stanley ..................................... 800 46,296
----------
342,285
----------
LIFE & HEALTH INSURANCE--1.3%
MetLife, Inc. ...................................... 3,500 117,845
----------
MANAGED HEALTH CARE--1.9%
UnitedHealth Group, Inc. ........................... 3,000 174,540
----------
MOVIES & ENTERTAINMENT--1.9%
Viacom, Inc. Class B ............................... 4,100 181,958
----------
MULTI-LINE INSURANCE--2.0%
American International Group, Inc. ................. 2,800 185,584
----------
MULTI-UTILITIES & UNREGULATED POWER--0.6%
Constellation Energy Group, Inc. ................... 1,500 58,740
----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--0.5%
Valero Energy Corp. ................................ 1,000 46,340
----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.7%
Citigroup, Inc. .................................... 7,200 349,488
----------
PAPER PACKAGING--0.4%
Smurfit-Stone Container Corp. (b) .................. 2,000 37,140
----------
PAPER PRODUCTS--0.8%
MeadWestvaco Corp. ................................. 2,500 74,375
----------
PHARMACEUTICALS--5.4%
Johnson & Johnson .................................. 800 41,328
Pfizer, Inc. ....................................... 11,040 390,043
Wyeth .............................................. 1,700 72,165
----------
503,536
----------
See Notes to Financial Statements
27
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
SHARES VALUE
------- ----------
PROPERTY & CASUALTY INSURANCE--4.1%
Allstate Corp. (The) ............................... 1,700 $ 73,134
Chubb Corp. (The) .................................. 1,800 122,580
Progressive Corp. (The) ............................ 1,200 100,308
Travelers Property Casualty Corp. Class A (b) ...... 5,200 87,256
----------
383,278
----------
RAILROADS--3.5%
Burlington Northern Santa Fe Corp. ................. 3,600 116,460
CSX Corp. .......................................... 2,600 93,444
Norfolk Southern Corp. ............................. 4,800 113,520
----------
323,424
----------
REGIONAL BANKS--1.2%
National City Corp. ................................ 3,400 115,396
----------
SEMICONDUCTORS--3.4%
Intel Corp. ........................................ 7,000 225,400
Maxim Integrated Products, Inc. .................... 1,900 94,620
----------
320,020
----------
SOFT DRINKS--0.6%
PepsiCo, Inc. ...................................... 1,300 60,606
----------
SPECIALTY STORES--0.5%
Bed Bath & Beyond, Inc. (b) ........................ 1,100 47,685
----------
SYSTEMS SOFTWARE--4.1%
Microsoft Corp. .................................... 10,400 286,416
VERITAS Software Corp. (b) ......................... 2,500 92,900
----------
379,316
----------
TECHNOLOGY DISTRIBUTORS--0.1%
Tech Data Corp. (b) ................................ 300 11,907
----------
THRIFTS & MORTGAGE FINANCE--4.5%
Fannie Mae ......................................... 3,500 262,710
Golden West Financial Corp. ........................ 1,000 103,190
Washington Mutual, Inc. ............................ 1,400 56,168
----------
422,068
----------
TOBACCO--0.5%
Altria Group, Inc. ................................. 850 46,257
----------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Sprint Corp. (PCS Group) (b) ....................... 5,900 33,158
----------
TOTAL COMMON STOCKS
(Identified cost $7,562,472) ................................ 8,645,274
----------
SHARES VALUE
------- ----------
FOREIGN COMMON STOCKS--4.1%
AUTO PARTS & EQUIPMENT--1.2%
Magna International, Inc. Class A (Canada) ......... 1,400 $ 112,070
----------
COMMUNICATIONS EQUIPMENT--0.6%
Nortel Networks Corp. (Canada) (b) ................. 13,600 57,528
----------
ELECTRONIC MANUFACTURING SERVICES--0.9%
Flextronics International Ltd. (Singapore) (b) ..... 5,400 80,136
----------
PHARMACEUTICALS--1.4%
GlaxoSmithKline plc ADR (United Kingdom) ........... 2,800 130,536
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $283,450) .................................. 380,270
----------
TOTAL LONG TERM INVESTMENTS--96.6%
(Identified cost $7,845,922) ................................ 9,025,544
----------
SHORT-TERM OBLIGATIONS--3.1%
MONEY MARKET MUTUAL FUNDS--3.1%
SSgA Money Market Fund (0.72% seven day
effective yield) ................................. 291,860 291,860
----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $291,860) .................................. 291,860
----------
TOTAL INVESTMENTS--99.7%
(Identified cost $8,137,782) ................................ 9,317,404(a)
Other assets and liabilities, net--0.3% ..................... 28,498
----------
NET ASSETS--100.0% ............................................ $9,345,902
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,351,457 and gross
depreciation of $176,475 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$8,142,422.
(b) Non-income producing.
See Notes to Financial Statements
28
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $8,137,782) ............................................. $9,317,404
Receivables
Fund shares sold ...................................................................................... 63,059
Dividends and interest ................................................................................ 12,009
Receivable from adviser ............................................................................... 6,373
Prepaid expenses ........................................................................................ 98
----------
Total assets ........................................................................................ 9,398,943
----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 1,172
Professional fee ...................................................................................... 29,787
Printing fee .......................................................................................... 11,819
Financial agent fee ................................................................................... 3,639
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 583
Accrued expenses ........................................................................................ 3,681
----------
Total liabilities ................................................................................... 53,041
----------
NET ASSETS .............................................................................................. $9,345,902
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $8,943,353
Accumulated net realized loss ......................................................................... (777,073)
Net unrealized appreciation ........................................................................... 1,179,622
----------
NET ASSETS .............................................................................................. $9,345,902
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 933,312
==========
Net asset value and offering price per share ............................................................ $10.01
==========
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 106,804
Interest .............................................................................................. 2,034
Foreign taxes withheld ................................................................................ (462)
----------
Total investment income ............................................................................. 108,376
----------
EXPENSES
Investment advisory fee ............................................................................... 57,247
Financial agent fee ................................................................................... 40,835
Administration fee .................................................................................... 5,186
Professional .......................................................................................... 27,189
Printing .............................................................................................. 19,769
Custodian ............................................................................................. 13,139
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 9,214
----------
Total expenses ...................................................................................... 178,510
Less expenses borne by investment adviser ........................................................... (104,425)
----------
Net expenses ........................................................................................ 74,085
----------
NET INVESTMENT INCOME ................................................................................... 34,291
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (232,521)
Net change in unrealized appreciation (depreciation) on investments ................................... 1,794,570
----------
NET GAIN ON INVESTMENTS ................................................................................. 1,562,049
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $1,596,340
==========
See Notes to Financial Statements
29
PHOENIX-ALLIANCE/BERNSTEIN GROWTH + VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) ................................................................. $ 34,291 $ 24,044
Net realized gain (loss) ..................................................................... (232,521) (543,609)
Net change in unrealized appreciation (depreciation) ......................................... 1,794,570 (797,607)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................. 1,596,340 (1,317,172)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................ (34,113) (24,032)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .................................... (34,113) (24,032)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (502,028 and 400,415 shares, respectively) ..................... 4,523,307 3,666,149
Net asset value of shares issued from reinvestment of distributions (3,419 and 3,028 shares,
respectively) .............................................................................. 34,113 24,032
Cost of shares repurchased (208,821 and 113,479 shares, respectively) ........................ (1,850,189) (979,382)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .................................... 2,707,231 2,710,799
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................ 4,269,458 1,369,595
NET ASSETS
Beginning of period .......................................................................... 5,076,444 3,706,849
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $12, RESPECTIVELY) .... $ 9,345,902 $ 5,076,444
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED
DECEMBER 31, FROM INCEPTION
----------------- 10/29/01 TO
2003 2002 12/31/01
------ ------ --------------
Net asset value, beginning of period ..................................................... $ 7.97 $10.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ........................................................... 0.04 0.04 0.01
Net realized and unrealized gain (loss) ................................................ 2.04 (2.72) 0.69
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ..................................................... 2.08 (2.68) 0.70
------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................................................... (0.04) (0.04) (0.01)
------ ------ ------
TOTAL DISTRIBUTIONS .................................................................. (0.04) (0.04) (0.01)
------ ------ ------
CHANGE IN NET ASSET VALUE ................................................................ 2.04 (2.72) 0.69
------ ------ ------
NET ASSET VALUE, END OF PERIOD ........................................................... $10.01 $ 7.97 $10.69
====== ====== ======
Total return ............................................................................. 26.06% (25.06)% 7.03%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .................................................. $9,346 $5,076 $3,707
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) .................................................................. 1.10% 1.08% 1.05%(2)
Net investment income .................................................................. 0.51% 0.53% 0.80%(2)
Portfolio turnover ....................................................................... 28% 25% 1%(3)
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 2.65%, 3.76% and 7.93% for the periods ended December 31, 2003, 2002 and 2001, respectively.
(2) Annualized.
(3) Not annualized.
</FN>
See Notes to Financial Statements
30
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
A DISCUSSION WITH THE SERIES' SENIOR PORTFOLIO MANAGER, MICHAEL SCHATT AND
PORTFOLIO MANAGER, GEOFFREY P. DYBAS, CFA
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is capital appreciation and income with
approximately equal emphasis. The series may be appropriate for investors
seeking investment in a diversified portfolio of real estate investment trusts
and real estate operating companies. Investors should note that real estate
investing involves certain risks, including refinancing, economic impact on the
industry, changes in the values of properties owned, dependency on management
skills, and liquidity risks similar to those associated with small-company
investing.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series did well against its
benchmark. The series returned 38.27%. For the same period, the series'
benchmark index, the NAREIT Total Return Equity Index 1 returned 37.14%. These
comparisons are based on a net of expenses series performance versus a gross
number for the benchmark. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown above.
- --------------------------------------------------------------------------------------------------------------------------------
PHOENIX-
DUFF & PHELPS
PHOENIX- REAL ESTATE
DUFF & PHELPS NAREIT LIPPER PEER SECURITIES SERIES
REAL ESTATE TOTAL RETURN EQUITY GROUP** LIPPER PEER GROUP**
SECURITIES SERIES INDEX AVERAGE PERCENTILE
- --------------------------------------------------------------------------------------------------------------------------------
One Year Performance* 38.27% 37.14% 34.30% 6.00%
- --------------------------------------------------------------------------------------------------------------------------------
Three Year Annualized Performance* 18.22% 17.50% 12.72% 1.00%
- --------------------------------------------------------------------------------------------------------------------------------
Five Year Annualized Performance* 17.75% 14.35% 11.62% 1.00%
- --------------------------------------------------------------------------------------------------------------------------------
The series ended the period with favorable one-year, three-year, and
five-year track records as noted in the table.
* Periods ended December 31, 2003.
** Lipper Real Estate Funds. All performance figures assume reinvestment of
distributions and exclude the effect of sales charges. Percentile reflects
the percentage ranking of Phoenix Duff & Phelps Real Estate Securities Series
as compared to the Lipper Peer Group of Variable Real Estate Funds.
Q: WHAT FACTORS CONTRIBUTED TO THE SERIES' PERFORMANCE DURING THIS 12-MONTH
PERIOD?
A: Diversification and longer lease duration continued to help us outperform our
benchmark. Among the larger property sectors, we were overweight in regional
malls and shopping centers and underweight in office and apartments. Both of the
retail sectors noted offer longer lease duration, rely on the strength of the
consumer as opposed to the corporate customer, and have an opportunity to
capitalize on more interest expense savings. All of these themes were sound and
were rewarded this past year.
We believe that consistency is the key to long-term superior performance.
The same team has been managing the fund for over six years and has maintained
the same philosophy, style, process and discipline throughout this time.
Q: WHAT IS YOUR CURRENT OUTLOOK FOR THE REIT MARKET?
A: Over the long-term, approximately two thirds of the performance in the NAREIT
Total Return Equity Index has been derived from income. We expect that to
continue in the future. The NAREIT Total Return Equity Index dividend yield at
December 31, 2003 was 5.52%. We anticipate this yield combined with mid-single
digit earnings growth in 2004 will lead us to mid-upper single digit
performance.
As always the additional benefit of REITs in a diversified investment
portfolio is risk reduction, as measured by a low correlation with other
investment classes and a lower standard deviation. Investors continue to
recognize this core attribute as they add income to their portfolios.
31
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
The NAREIT Total Return Equity Index 1 has performed well versus the S&P
500(R) Index 2, Russell 2000(R) Index 3 and NASDAQ Total Return Equity Index 4
for 1, 3-, 5-, and 10-year periods while maintaining a lower 10-year standard
deviation as illustrated in the table below.
- -----------------------------------------------------------------------------------------------------------------------------
10-YEAR STANDARD
ONE YEAR* THREE YEAR* FIVE YEAR* TEN YEAR* DEVIATION
- -----------------------------------------------------------------------------------------------------------------------------
NAREIT Total Return Equity Index
Benchmark 1 37.14% 17.50% 14.35% 12.05% 11.84%
- -----------------------------------------------------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (4.04%) (0.57%) 11.10% 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
Russell 2000(R) Index 3 47.25% 6.27% 7.13% 9.47% 19.66%
- -----------------------------------------------------------------------------------------------------------------------------
NASDAQ Composite Index 4 50.01% (6.76%) (1.80%) 9.93% 28.69%
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
*Periods ended December 31, 2003.
</FN>
From an inception date of May 1, 1995 through December 31, 2003, the series
returned 15.21% versus a benchmark return of 13.62% for the same period.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
5/1/95 TO
1 YEAR 5 YEAR 12/31/03
- --------------------------------------------------------------------------------
Real Estate Securities Series 38.27% 17.75% 15.21%
- --------------------------------------------------------------------------------
NAREIT Total Return Equity Index 1 37.14% 14.35% 13.62%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 11.18%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 5/1/95 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Real Estate NAREIT Total Return
Securities Series Equity Index 1 S&P 500(R) Index 2
5/1/95 $10,000 $10,000 $10,000
12/29/95 $11,779 $11,548 $12,184
12/31/96 $15,677 $15,618 $15,017
12/31/97 $19,134 $18,787 $20,029
12/31/98 $15,079 $15,499 $25,789
12/31/99 $15,799 $14,783 $31,239
12/29/00 $20,661 $18,680 $28,369
12/31/01 $22,028 $21,283 $25,000
12/31/02 $24,690 $22,094 $19,475
12/31/03 $34,137 $30,300 $25,067
1 The NAREIT (National Association of Real Estate Investment Trusts) Total
Return Equity Index measures the total return performance of real estate
investment trusts.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
3 The Russell 2000(R) Index is a market capitalization-weighted index of the
2,000 smallest companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested and is provided for general comparative purposes.
4 The NASDAQ Composite Index is a broad-based capitalization weighted index of
all NASDAQ National Markets and Small Cap stocks and is provided for general
comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
32
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--95.8%
REAL ESTATE INVESTMENT TRUSTS--95.8%
DIVERSIFIED--7.2%
iStar Financial, Inc. .............................. 66,239 $ 2,576,697
Vornado Realty Trust ............................... 67,289 3,684,073
-----------
6,260,770
-----------
HEALTH CARE--3.2%
Health Care Property Investors, Inc. ............... 19,257 978,255
Health Care REIT, Inc. ............................. 11,366 409,176
Healthcare Realty Trust, Inc. ...................... 39,537 1,413,448
-----------
2,800,879
-----------
INDUSTRIAL/OFFICE--27.1%
INDUSTRIAL--9.3%
CenterPoint Properties Trust ....................... 57,841 4,332,291
Keystone Property Trust ............................ 16,168 357,151
ProLogis ........................................... 107,354 3,444,990
-----------
8,134,432
-----------
MIXED--0.9%
Duke Realty Corp. .................................. 26,470 820,570
OFFICE--16.9%
Alexandria Real Estate Equities, Inc. .............. 40,966 2,371,931
Arden Realty, Inc. ................................. 27,163 824,125
Boston Properties, Inc. ............................ 67,880 3,271,137
Corporate Office Properties Trust .................. 131,072 2,752,512
Equity Office Properties Trust ..................... 24,624 705,478
Mack-Cali Realty Corp. ............................. 5,254 218,672
Maguire Properties, Inc. ........................... 55,019 1,336,962
SL Green Realty Corp. .............................. 78,902 3,238,927
-----------
14,719,744
-----------
TOTAL INDUSTRIAL/OFFICE ....................................... 23,674,746
-----------
LODGING/RESORTS--3.0%
Hospitality Properties Trust ....................... 21,967 906,798
Host Marriott Corp. (b) ............................ 138,926 1,711,568
-----------
2,618,366
-----------
RESIDENTIAL--12.1%
APARTMENTS--12.1%
Archstone-Smith Trust .............................. 68,436 1,914,839
Camden Property Trust .............................. 32,134 1,423,536
Equity Residential ................................. 63,519 1,874,446
Essex Property Trust, Inc. ......................... 21,371 1,372,446
Home Properties, Inc. .............................. 30,729 1,241,144
Town & Country Trust ............................... 29,870 757,204
United Dominion Realty Trust, Inc. ................. 103,639 1,989,869
-----------
TOTAL RESIDENTIAL ............................................. 10,573,484
-----------
SHARES VALUE
------- -----------
RETAIL--41.3%
FREE STANDING--0.8%
Realty Income Corp. ................................ 17,690 $ 707,600
REGIONAL MALLS--20.2%
CBL & Associates Properties, Inc. .................. 75,721 4,278,236
General Growth Properties, Inc. .................... 196,275 5,446,631
Macerich Co. (The) ................................. 83,675 3,723,538
Simon Property Group, Inc. ......................... 90,021 4,171,573
-----------
17,619,978
-----------
SHOPPING CENTERS--20.3%
Chelsea Property Group, Inc. ....................... 104,265 5,714,765
Developers Diversified Realty Corp. ................ 126,335 4,241,066
Pan Pacific Retail Properties, Inc. ................ 73,454 3,500,083
Tanger Factory Outlet Centers, Inc. ................ 41,165 1,675,415
Weingarten Realty Investors ........................ 59,782 2,651,332
-----------
17,782,661
-----------
TOTAL RETAIL .................................................. 36,110,239
-----------
SELF STORAGE--1.9%
Public Storage, Inc. ............................... 15,918 690,682
Shurgard Storage Centers, Inc. Class A ............. 26,358 992,379
-----------
1,683,061
-----------
TOTAL LONG TERM INVESTMENTS--95.8%
(Identified cost $60,093,356) ............................... 83,721,545
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
----------- ------
SHORT-TERM OBLIGATIONS--4.0%
FEDERAL AGENCY SECURITIES--2.0%
FHLB Discount Note 0.75%, 1/2/04 ................... $1,790 1,789,963
COMMERCIAL PAPER--2.0%
ABSC Capital Corp. 1.12%, 1/12/04 ...... A-1 1,710 1,709,415
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $3,499,378) ................................ 3,499,378
-----------
TOTAL INVESTMENTS--99.8%
(Identified cost $63,592,734) ............................... 87,220,923(a)
Other assets and liabilities, net--0.2% ..................... 154,603
-----------
NET ASSETS--100.0% ............................................ $87,375,526
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $23,641,618 and gross
depreciation of $81,233 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$63,660,538.
(b) Non-income producing.
See Notes to Financial Statements
33
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $63,592,734) ............................................ $87,220,923
Cash .................................................................................................... 1,662
Receivables
Dividends and interest ................................................................................ 369,415
Fund shares sold ...................................................................................... 174,414
Prepaid expenses ........................................................................................ 1,061
-----------
Total assets ........................................................................................ 87,767,475
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 268,226
Investment advisory fee ............................................................................... 54,563
Professional fee ...................................................................................... 28,183
Printing fee .......................................................................................... 21,489
Financial agent fee ................................................................................... 7,444
Administration fee .................................................................................... 5,602
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 4,082
-----------
Total liabilities ................................................................................... 391,949
-----------
NET ASSETS .............................................................................................. $87,375,526
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $63,012,024
Undistributed net investment income ................................................................... 116,555
Accumulated net realized gain ......................................................................... 618,758
Net unrealized appreciation ........................................................................... 23,628,189
-----------
NET ASSETS .............................................................................................. $87,375,526
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 3,998,877
===========
Net asset value and offering price per share ............................................................ $21.85
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 3,016,697
Interest .............................................................................................. 35,562
-----------
Total investment income ............................................................................. 3,052,259
-----------
EXPENSES
Investment advisory fee ............................................................................... 524,642
Financial agent fee ................................................................................... 80,929
Administration fee .................................................................................... 53,863
Printing .............................................................................................. 35,273
Professional .......................................................................................... 17,819
Custodian ............................................................................................. 16,507
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 11,047
-----------
Total expenses ...................................................................................... 746,011
Custodian fees paid indirectly ...................................................................... (2)
-----------
Net expenses ........................................................................................ 746,009
-----------
NET INVESTMENT INCOME ................................................................................... 2,306,250
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 2,782,166
Net change in unrealized appreciation (depreciation) on investments ................................... 17,984,154
-----------
NET GAIN ON INVESTMENTS ................................................................................. 20,766,320
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $23,072,570
===========
See Notes to Financial Statements
34
PHOENIX-DUFF & PHELPS REAL ESTATE SECURITIES SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ..................................................................... $ 2,306,250 $ 2,052,975
Net realized gain (loss) ......................................................................... 2,782,166 1,545,677
Net change in unrealized appreciation (depreciation) ............................................. 17,984,154 1,444,444
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...................................... 23,072,570 5,043,096
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................ (2,399,499) (2,051,903)
Net realized long-term gains ..................................................................... (2,496,381) (349,550)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ........................................ (4,895,880) (2,401,453)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,554,242 and 2,653,627 shares, respectively) ................... 46,884,341 44,246,123
Net asset value of shares issued from reinvestment of distributions (240,731 and
141,035 shares, respectively) .................................................................. 4,895,880 2,401,453
Cost of shares repurchased (2,562,054 and 1,672,433 shares, respectively) ........................ (46,033,776) (27,342,947)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ........................................ 5,746,445 19,304,629
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................ 23,923,135 21,946,272
NET ASSETS
Beginning of period .............................................................................. 63,452,391 41,506,119
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $116,555 AND $193,564,
RESPECTIVELY) .................................................................................. $ 87,375,526 $ 63,452,391
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ........................... $16.85 $15.70 $15.33 $12.21 $12.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................................. 0.64 0.63(3) 0.62 0.63 0.65
Net realized and unrealized gain (loss) ...................... 5.67 1.26 0.37 3.07 (0.09)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........................... 6.31 1.89 0.99 3.70 0.56
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ......................... (0.66) (0.65) (0.62) (0.58) (0.63)
Distributions from net realized gains ........................ (0.65) (0.09) -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................................ (1.31) (0.74) (0.62) (0.58) (0.63)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ...................................... 5.00 1.15 0.37 3.12 (0.07)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ................................. $21.85 $16.85 $15.70 $15.33 $12.21
====== ====== ====== ====== ======
Total return ................................................... 38.27% 12.08% 6.62% 30.78% 4.78%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .......................... $87,376 $63,452 $41,506 $34,815 $27,350
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses ........................................... 1.07%(2) 1.09%(1)(2) 1.00%(1)(2) 1.00%(1) 1.00%(1)
Net investment income ........................................ 4.72% 3.96% 4.21% 4.63% 5.06%
Portfolio turnover ............................................. 27% 27% 37% 26% 28%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 1.12%, 1.16%, 1.32% and 1.31% for the periods ended December 31, 2002, 2001, 2000 and 1999,
respectively.
(2) 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) Per share income from investment operations may vary from anticipated results depending on the timing of share purchases
and redemptions.
</FN>
See Notes to Financial Statements
35
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is intermediate and long-term capital
appreciation, with income as a secondary consideration.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 26.49%. For
the same period, the S&P 500(R)/Barra Growth Index 1 returned 25.68% and the S&P
500(R) Index 2 returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower that the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: Although all the indices were up nicely in 2003, it was an unusual year in
that the lower quality stocks and small cap stocks far outperformed traditional
quality large cap stocks. For example, in the S&P 500(R) Index the smallest 20%
of companies in the Index returned, on average, approximately 47%. This compares
to an average return of 22% for the largest 20% of companies in the Index.
Further, the 20% of companies in the S&P 500(R) Index with a beta above 1.35,
had an average return of over 50%. This pattern of less risk aversion by the
market is typical of the early stages of a recovery, as improving economic
conditions lessen the risk of company failures.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Last year, positive performance came primarily from industries most exposed
to improving economic conditions. For the series, that meant some of our best
performing stocks came from industries such as retail and semiconductors.
Specifically, retailers Lowes, Staples and Best Buy were positive performers. In
semiconductors, Applied Materials, Intel and Texas Instruments contributed
positive returns. Additionally, two biotechnology companies added superior
performance, Amgen and Genentech.
One sector that did not contribute positively was the financial sector. Our
worst performer was Freddie Mac after the company announced major accounting and
management changes. Additionally, our two bank holdings, Wells Fargo and
Comerica, underperformed their peer group.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: Recent data show that a broad economic recovery is underway. The U.S.
reported 8.2% GDP growth in the calendar third quarter of 2003. With the
recovery taking hold, so too is a return to growth in corporate profits. In
fact, the latest consensus estimate for corporate profit growth in the fourth
quarter of 2003 is in excess of 22%. Further, we think current estimates for
2004 profit growth are still too low. As we would expect, the best performing
stocks this past year are those most sensitive to improving economic conditions.
This list would include small cap stocks, lower quality stocks and even stocks
with no current earnings. We expect that next year the market will broaden out
and large cap, higher quality stocks, those most typical to the series, should
begin to outperform.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The S&P 500(R)/Barra Growth Index is a measure of total return performance of
companies with lower book-to-price ratios.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
36
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Capital Growth Series 26.49% (7.88)% 4.56%
- --------------------------------------------------------------------------------
S&P 500(R)/Barra Growth Index 1 25.68% (3.48)% 11.12%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 11.10%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/93. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period. Returns indicate past performance,
which is not indicative of future performance. Investment return and net asset
value will fluctuate so that your shares, when redeemed, may be worth more or
less than the original cost. Please visit PhoenixWM.com for performance data
current to the most recent month-end. Foreign investing involves special risks
such as currency fluctuation and less public disclosure, as well as economic and
political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
S&P 500(R)/Barra
Capital Growth Series Growth Index 1 S&P 500(R) Index 2
12/31/93 $10,000 $10,000 $10,000
12/30/94 $10,148 $10,314 $10,132
12/29/95 $13,278 $14,246 $13,933
12/31/96 $14,948 $17,661 $17,172
12/31/97 $18,099 $24,113 $22,903
12/31/98 $23,530 $34,278 $29,489
12/31/99 $30,512 $43,962 $35,721
12/29/00 $25,089 $34,255 $32,440
12/31/01 $16,415 $29,894 $28,587
12/31/02 $12,343 $22,843 $22,270
12/31/03 $15,612 $28,708 $28,664
1 The S&P 500(R)/Barra Growth Index is a measure of total return performance of
companies with lower book-to-price ratios.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
37
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
-------- -----------
COMMON STOCKS--96.9%
AIR FREIGHT & COURIERS--2.7%
United Parcel Service, Inc. Class B ............... 226,100 $ 16,855,755
------------
ASSET MANAGEMENT & CUSTODY BANKS--3.1%
State Street Corp. ................................ 371,000 19,321,680
------------
BIOTECHNOLOGY--5.4%
Amgen, Inc. (b) ................................... 453,600 28,032,480
Genentech, Inc. (b) ............................... 67,290 6,296,325
------------
34,328,805
------------
BROADCASTING & CABLE TV--2.8%
EchoStar Communications Corp. Class A (b) ......... 344,000 11,696,000
Univision Communications, Inc. Class A (b) ........ 157,450 6,249,190
------------
17,945,190
------------
COMMUNICATIONS EQUIPMENT--7.2%
Cisco Systems, Inc. (b) ........................... 1,306,520 31,735,371
Motorola, Inc. .................................... 446,000 6,275,220
QUALCOMM, Inc. .................................... 133,000 7,172,690
------------
45,183,281
------------
COMPUTER HARDWARE--5.9%
Dell, Inc. (b) .................................... 373,000 12,667,080
Hewlett-Packard Co. ............................... 1,085,000 24,922,450
------------
37,589,530
------------
CONSUMER FINANCE--8.4%
American Express Co. .............................. 389,310 18,776,421
MBNA Corp. ........................................ 601,500 14,947,275
SLM Corp. ......................................... 512,400 19,307,232
------------
53,030,928
------------
DIVERSIFIED BANKS--5.0%
Comerica, Inc. .................................... 240,000 13,454,400
Wells Fargo & Co. ................................. 313,000 18,432,570
------------
31,886,970
------------
DIVERSIFIED COMMERCIAL SERVICES--1.0%
Apollo Group, Inc. Class A (b) .................... 91,000 6,188,000
------------
FOOD DISTRIBUTORS--3.8%
Sysco Corp. ....................................... 642,000 23,901,660
------------
HEALTH CARE EQUIPMENT--3.9%
Medtronic, Inc. ................................... 510,920 24,835,821
------------
HOME IMPROVEMENT RETAIL--2.2%
Lowe's Cos., Inc. ................................. 250,900 13,897,351
------------
HOTELS, RESORTS & CRUISE LINES--2.0%
Carnival Corp. .................................... 318,000 12,634,140
------------
HOUSEHOLD PRODUCTS--2.3%
Colgate-Palmolive Co. ............................. 285,900 14,309,295
------------
HYPERMARKETS & SUPER CENTERS--2.6%
Wal-Mart Stores, Inc. ............................. 313,250 16,617,913
------------
INSURANCE BROKERS--2.1%
Marsh & McLennan Cos., Inc. ....................... 276,000 13,217,640
------------
MOTORCYCLE MANUFACTURERS--0.9%
Harley-Davidson, Inc. ............................. 119,000 5,656,070
------------
SHARES VALUE
-------- -----------
MOVIES & ENTERTAINMENT--3.4%
Fox Entertainment Group, Inc. Class A (b) ......... 485,300 $ 14,146,495
Viacom, Inc. Class B .............................. 161,079 7,148,686
------------
21,295,181
------------
PHARMACEUTICALS--10.3%
Forest Laboratories, Inc. (b) ..................... 262,000 16,191,600
Johnson & Johnson ................................. 233,520 12,063,643
Pfizer, Inc. ...................................... 741,807 26,208,042
Wyeth ............................................. 257,000 10,909,650
------------
65,372,935
------------
PUBLISHING & PRINTING--1.0%
Tribune Co. ....................................... 128,000 6,604,800
------------
RESTAURANTS--1.1%
Starbucks Corp. (b) ............................... 205,000 6,777,300
------------
SEMICONDUCTOR EQUIPMENT--0.7%
Applied Materials, Inc. (b) ....................... 199,000 4,467,550
------------
SEMICONDUCTORS--3.8%
Intel Corp. ....................................... 555,030 17,871,966
Texas Instruments, Inc. ........................... 206,620 6,070,496
------------
23,942,462
------------
SOFT DRINKS--3.3%
PepsiCo, Inc. ..................................... 447,000 20,839,140
------------
SPECIALTY STORES--2.7%
Staples, Inc. (b) ................................. 619,000 16,898,700
------------
SYSTEMS SOFTWARE--7.2%
Microsoft Corp. ................................... 871,000 23,987,340
Oracle Corp. (b) .................................. 1,647,270 21,743,964
------------
45,731,304
------------
THRIFTS & MORTGAGE FINANCE--2.1%
Fannie Mae ........................................ 176,000 13,210,560
------------
TOTAL COMMON STOCKS
(Identified cost $496,950,146) .............................. 612,539,961
------------
FOREIGN COMMON STOCKS--1.1%
PHARMACEUTICALS--1.1%
Teva Pharmaceutical Industries Ltd. ADR (Israel) .. 120,000 6,805,200
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $5,418,710) ................................ 6,805,200
------------
See Notes to Financial Statements
38
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
AGENCY NON MORTGAGE-BACKED SECURITIES--0.8%
Fannie Mae 1.03%, 7/26/04 ............. AAA $2,500 $ 2,497,510
Fannie Mae 1.54%, 12/24/04 ............ AAA 2,500 2,500,723
------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(Identified cost $5,000,000) ................................ 4,998,233
------------
TOTAL LONG TERM INVESTMENTS--98.8%
(Identified cost $507,368,856) .............................. 624,343,394
------------
SHORT-TERM OBLIGATIONS--1.3%
FEDERAL AGENCY SECURITIES--0.8%
FHLB Discount Note 0.75%, 1/2/04 .................. 4,845 4,844,899
------------
COMMERCIAL PAPER--0.5%
ASBC Capital Corp. 1.12%, 1/12/04 ..... A-1 3,365 3,363,848
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $8,208,747) ................................ 8,208,747
------------
TOTAL INVESTMENTS--100.1%
(Identified cost $515,577,603) .............................. 632,552,141(a)
Other assets and liabilities, net--(0.1)% ................... (527,581)
------------
NET ASSETS--100.0% ............................................ $632,024,560
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $122,848,504 and gross
depreciation of $6,080,618 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$515,784,255.
(b) Non-income producing.
See Notes to Financial Statements
39
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $515,577,603) ........................................... $ 632,552,141
Cash .................................................................................................... 3,692
Receivables
Dividends and interest ................................................................................ 767,296
Fund shares sold ...................................................................................... 149,413
Prepaid expenses ........................................................................................ 8,996
-------------
Total assets ........................................................................................ 633,481,538
-------------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 909,967
Investment advisory fee ............................................................................... 347,572
Printing fee .......................................................................................... 74,460
Administration fee .................................................................................... 40,518
Financial agent fee ................................................................................... 35,178
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 46,923
-------------
Total liabilities ................................................................................... 1,456,978
-------------
NET ASSETS .............................................................................................. $ 632,024,560
=============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $ 899,108,542
Undistributed net investment income ................................................................... 416,400
Accumulated net realized loss ......................................................................... (384,474,920)
Net unrealized appreciation ........................................................................... 116,974,538
-------------
NET ASSETS .............................................................................................. $ 632,024,560
=============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 46,164,954
=============
Net asset value and offering price per share ............................................................ $13.69
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 5,169,619
Interest .............................................................................................. 264,315
Foreign taxes withheld ................................................................................ (5,074)
------------
Total investment income ............................................................................. 5,428,860
------------
EXPENSES
Investment advisory fee ............................................................................... 3,919,356
Financial agent fee ................................................................................... 408,864
Administration fee .................................................................................... 454,859
Printing .............................................................................................. 95,504
Custodian ............................................................................................. 71,408
Professional .......................................................................................... 24,942
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 23,333
------------
Total expenses ...................................................................................... 5,004,197
Custodian fees paid indirectly ...................................................................... (212)
------------
Net expenses ........................................................................................ 5,003,985
------------
NET INVESTMENT INCOME ................................................................................... 424,875
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (6,155,044)
Net change in unrealized appreciation (depreciation) on investments ................................... 144,496,915
------------
NET GAIN ON INVESTMENTS ................................................................................. 138,341,871
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $138,766,746
============
See Notes to Financial Statements
40
PHOENIX-ENGEMANN CAPITAL GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ -------------
FROM OPERATIONS
Net investment income (loss) .............................................................. $ 424,875 $ 576,571
Net realized gain (loss) .................................................................. (6,155,044) (72,968,748)
Net change in unrealized appreciation (depreciation) ...................................... 144,496,915 (149,660,502)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............................... 138,766,746 (222,052,679)
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ..................................................................... (585,046) --
------------ -------------
DECREASE IN NET ASSETS FROM DISTRIBUTION TO SHAREHOLDERS .................................. (585,046) --
------------ -------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (4,857,720 and 6,094,031 shares, respectively) .............. 58,591,021 74,997,170
Net asset value of shares issued in conjunction with Plan of Reorganization
(0 and 2,949,789 shares, respectively) (See Note 11) .................................... -- 39,773,479
Net asset value of shares issued from reinvestment of distributions (53,745 and
0 shares, respectively) ................................................................. 585,046 --
Cost of shares repurchased (11,452,453 and 21,400,063 shares, respectively) ............... (136,409,251) (259,210,763)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ................................. (77,233,184) (144,440,114)
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS ..................................................... 60,948,516 (366,492,793)
NET ASSETS
Beginning of period ....................................................................... 571,076,044 937,568,837
------------ -------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $416,400 AND
$576,571, RESPECTIVELY) ................................................................. $632,024,560 $ 571,076,044
============ =============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2003 2002 2001(2) 2000 1999
------ ------ ------- ------ ------
Net asset value, beginning of period ............................... $10.84 $14.41 $22.49 $28.57 $23.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ..................................... 0.01 0.01 --(1) --(1) 0.03
Net realized and unrealized gain (loss) .......................... 2.85 (3.58) (7.72) (4.91) 6.97
------ ------ ------ ------ ------
Total from investment operations ............................... 2.86 (3.57) (7.72) (4.91) 7.00
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ............................. (0.01) -- (0.01) --(1) (0.06)
Distributions from net realized gains ............................ -- -- (0.35) (1.17) (2.31)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................ (0.01) -- (0.36) (1.17) (2.37)
------ ------ ------ ------ ------
Capital contribution from Adviser ................................ -- -- -- -- 0.01
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE .......................................... 2.85 (3.57) (8.08) (6.08) 4.64
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ..................................... $13.69 $10.84 $14.41 $22.49 $28.57
====== ====== ====== ====== ======
Total return ....................................................... 26.49% (24.81)% (34.57)% (17.77)% 29.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .............................. $632,025 $571,076 $937,569 $1,680,036 $2,269,090
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses ............................................... 0.85%(3) 0.75%(3) 0.72%(3) 0.68% 0.68%
Net investment income ............................................ 0.07% 0.08% 0.01% 0.03% 0.11%
Portfolio turnover ................................................. 41% 115% 58% 82% 106%
<FN>
(1) Amount is less than $0.01.
(2) As required, effective January 1, 2001, the Fund adopted the provisions of AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities. There was no effect to net investment income per share and net
realized and unrealized gain (loss) per share and the ratio of net investment income to average net assets. Per share ratios and
supplemental data from prior periods have not been restated to reflect this change.
(3) 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.
</FN>
See Notes to Financial Statements
41
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is long-term growth of capital. Investors
should note that the series may invest in small-company stocks, which involves
added risks, such as greater price volatility, less liquidity and increased
competitive threat. Investors should note that the risks of investing in
small-company and mid-company stocks may include relatively low trading volumes,
a greater degree of change in earnings, and greater short-term volatility.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 46.42%. For
the same period, the Russell 2000(R) Growth Index 1 returned 48.54% and the S&P
500(R) Index, 2 returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: 2003 was a great year for the stock market in general and for small cap
stocks in particular. The Russell 2000(R) Growth Index increased nearly 50%, an
excellent return by nearly any measure. After a bear market that lasted nearly
three years, the overall economy is categorically showing signs of accelerating.
After much fiscal stimulus, historical low interest rates and tax cuts, the
economy is responding. The economy is estimated to have increased over 8% in the
third quarter, clearly the fastest growth rate since 1983. Despite a
strengthening economy, inflation remains constrained at 2.1%. As the economy
continues to gain momentum, small-cap companies are frequently able to produce
better earnings growth than larger companies.
Small growth companies typically build infrastructures to support larger
sales bases. When the economy starts to grow again these companies are in a
better position to leverage their fixed cost base and produce rapid earnings
growth. All other things being equal, better relative earnings growth is a
powerful motivator for investors to favor small cap stocks.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Generally, the small-cap product benefited from the rebound in the economy.
During the year we invested in cyclical names, such as semiconductor companies,
that we believed would experience earnings growth and rising return on equity.
And, on the whole, that thesis played out well.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We continue to believe small-cap stocks are poised to continue to perform
well. The economy is beginning to pick up steam, inflation appears subdued, and
we believe valuation on small caps are reasonable compared to large caps,
especially when you consider the growth advantage small companies currently
have. Moreover, structural changes caused by the Internet bubble bursting have
created a more productive environment for investors, as more management teams
are focused on the metrics that create true shareholder value over time.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 2000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the smallest 2,000 companies in the Russell
Universe, which comprises the 3,000 largest U.S. companies.The index is
calculated on a total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
42
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/15/00 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Small & Mid-Cap Growth Series 46.42% (12.05)%
- --------------------------------------------------------------------------------
Russell 2000(R) Growth Index 1 48.54% (7.08)%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (6.77)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/15/00 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation more or less the
original cost. Foreign investing involves special risks such as currency
fluctuation and less public disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Small & Mid-Cap Growth Russell 2000(R) Growth
Series Index 1 S&P 500(R) Index 2
8/15/00 $10,000 $10,000 $10,000
12/29/00 $8,482 $8,299 $8,930
12/31/01 $6,216 $7,534 $7,870
12/31/02 $4,426 $5,254 $6,131
12/31/03 $6,480 $7,804 $7,891
1 The Russell 2000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the smallest 2,000 companies in the Russell
Universe, which comprises the 3,000 largest U.S. companies.The index is
calculated on a total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
43
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--93.3%
AIR FREIGHT & COURIERS--0.7%
Expeditors International of Washington, Inc. ....... 600 $ 22,596
Pacer International, Inc. (b) ...................... 6,400 129,408
-----------
152,004
-----------
APPAREL RETAIL--2.1%
Mothers Work, Inc. (b) ............................. 8,000 195,200
Urban Outfitters, Inc. (b) ......................... 6,800 251,940
-----------
447,140
-----------
APPLICATION SOFTWARE--0.7%
BEA Systems, Inc. (b) .............................. 10,100 124,230
Open Solutions, Inc. (b) ........................... 1,400 24,598
-----------
148,828
-----------
ASSET MANAGEMENT & CUSTODY BANKS--5.7%
Gabelli Asset Management, Inc. Class A ............. 19,875 791,025
Janus Capital Group, Inc. .......................... 25,370 416,322
-----------
1,207,347
-----------
BIOTECHNOLOGY--4.1%
Abgenix, Inc. (b) .................................. 10,900 135,814
ICOS Corp. (b) ..................................... 4,900 202,272
Myogen, Inc. (b) ................................... 4,300 61,490
Nabi Biopharmaceuticals (b) ........................ 4,500 57,195
NPS Pharmaceuticals, Inc. (b) ...................... 10,400 319,696
Telik, Inc. (b) .................................... 4,100 94,341
-----------
870,808
-----------
CASINOS & GAMING--2.3%
Scientific Games Corp. Class A (b) ................. 29,500 501,795
-----------
COMMUNICATIONS EQUIPMENT--3.1%
Advanced Fibre Communications, Inc. (b) ............ 6,500 130,975
SafeNet, Inc. (b) .................................. 17,400 535,398
-----------
666,373
-----------
DATA PROCESSING & OUTSOURCED SERVICES--0.5%
Intrado, Inc. (b) .................................. 4,800 105,360
-----------
DIVERSIFIED COMMERCIAL SERVICES--10.3%
Corporate Executive Board Co. (The) (b) ............ 14,610 681,849
Corrections Corporation of America (b) ............. 16,500 475,695
Tetra Tech, Inc. (b) ............................... 30,300 753,258
Universal Technical Institute, Inc. (b) ............ 2,600 78,000
Viad Corp. ......................................... 8,300 207,500
-----------
2,196,302
-----------
GENERAL MERCHANDISE STORES--0.4%
99 Cents Only Stores (b) ........................... 2,900 78,967
-----------
HEALTH CARE DISTRIBUTORS--3.4%
Omnicare, Inc. ..................................... 17,925 723,991
-----------
HEALTH CARE EQUIPMENT--6.3%
Cyberonics, Inc. (b) ............................... 4,400 140,844
INAMED Corp. (b) ................................... 13,300 639,198
Nektar Therapeutics (b) ............................ 41,200 560,732
-----------
1,340,774
-----------
HEALTH CARE SERVICES--2.3%
Advisory Board Co. (The) (b) ....................... 13,900 485,249
-----------
SHARES VALUE
------- -----------
INTERNET SOFTWARE & SERVICES--9.5%
Autobytel, Inc. (b) ................................ 21,300 $ 193,404
Digital Insight Corp. (b) .......................... 26,000 647,400
Digitas, Inc. (b) .................................. 17,300 161,236
Ipass, Inc. (b) .................................... 4,400 70,532
j2 Global Communications, Inc. (b) ................. 13,600 336,872
United Online, Inc. (b) ............................ 29,350 492,786
Websense, Inc. (b) ................................. 4,100 119,884
-----------
2,022,114
-----------
IT CONSULTING & OTHER SERVICES--1.0%
ManTech International Corp. Class A (b) ............ 8,700 217,065
-----------
LEISURE PRODUCTS--4.2%
MarineMax, Inc. (b) ................................ 9,400 182,642
Marvel Enterprises, Inc. (b) ....................... 14,300 416,273
Polaris Industries, Inc. ........................... 3,400 301,172
-----------
900,087
-----------
OIL & GAS EXPLORATION & PRODUCTION--4.4%
Evergreen Resources, Inc. (b) ...................... 17,800 578,678
Ultra Petroleum Corp. (b) .......................... 14,300 352,066
-----------
930,744
-----------
PHARMACEUTICALS--7.7%
Bradley Pharmaceuticals, Inc. (b) .................. 3,900 99,177
Medicines Co. (The) (b) ............................ 19,510 574,764
Pain Therapeutics, Inc. (b) ........................ 16,900 117,455
Sepracor, Inc. (b) ................................. 36,100 863,873
-----------
1,655,269
-----------
RESTAURANTS--2.9%
Cheesecake Factory, Inc. (The) (b) ................. 14,287 629,057
-----------
SEMICONDUCTOR EQUIPMENT--1.9%
Cymer, Inc. (b) .................................... 8,700 401,853
-----------
SEMICONDUCTORS--12.3%
Artisan Components, Inc. (b) ....................... 29,000 594,500
Integrated Circuit Systems, Inc. (b) ............... 16,600 472,934
International Rectifier Corp. (b) .................. 7,000 345,870
Intersil Corp. Class A ............................. 20,700 514,395
Micrel, Inc. (b) ................................... 19,955 310,899
ON Semiconductor Corp. (b) ......................... 28,400 183,180
Semtech Corp. (b) .................................. 8,600 195,478
-----------
2,617,256
-----------
SPECIALTY STORES--3.9%
Advance Auto Parts, Inc. (b) ....................... 3,470 282,458
Cost Plus, Inc. (b) ................................ 13,700 561,700
-----------
844,158
-----------
TECHNOLOGY DISTRIBUTORS--0.7%
SYNNEX Corp. (b) ................................... 11,500 158,240
-----------
THRIFTS & MORTGAGE FINANCE--2.4%
Federal Agricultural Mortgage Corp. Class C (b) .... 16,235 518,871
-----------
TRUCKING--0.5%
Quality Distribution, Inc. (b) ..................... 5,650 110,457
-----------
TOTAL COMMON STOCKS
(Identified cost $14,700,588) ............................... 19,930,109
-----------
See Notes to Financial Statements
45
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
SHARES VALUE
------- -----------
FOREIGN COMMON STOCKS--5.0%
ASSET MANAGEMENT & CUSTODY BANKS--2.4%
Stewart (W.P.) & Co. Ltd. (Bermuda) ................ 23,500 $ 505,955
-----------
INTERNET SOFTWARE & SERVICES--0.7%
ebookers plc ADR (United Kingdom) (b) .............. 10,300 150,895
-----------
SEMICONDUCTORS--1.9%
O2Micro International Ltd. (United States) (b) ..... 18,400 412,160
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $874,356) .................................. 1,069,010
-----------
TOTAL LONG TERM INVESTMENTS--98.3%
(Identified cost $15,574,944) ............................... 20,999,119
-----------
PAR
VALUE
(000) VALUE
----- -----------
SHORT-TERM OBLIGATIONS--1.8%
FEDERAL AGENCY SECURITIES--1.8%
FHLB Discount Note 0.75%, 1/7/04 ................... $370 $ 369,954
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $369,954) .................................. 369,954
-----------
TOTAL INVESTMENTS--100.1%
(Identified cost $15,944,898) ............................... 21,369,073(a)
Other assets and liabilities, net--(0.1)% ................... (14,687)
-----------
NET ASSETS--100.0% ............................................ $21,354,386
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $6,038,047 and gross
depreciation of $717,685 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$16,048,711.
(b) Non-income producing.
See Notes to Financial Statements
45
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $15,944,898) ............................................ $21,369,073
Cash .................................................................................................... 159,794
Receivables
Investment securities sold ............................................................................ 342,959
Fund shares sold ...................................................................................... 16,940
Dividends ............................................................................................. 774
Prepaid expenses ........................................................................................ 229
-----------
Total assets ........................................................................................ 21,889,769
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 360,219
Fund shares repurchased ............................................................................... 111,447
Professional fee ...................................................................................... 29,187
Investment advisory fee ............................................................................... 8,126
Financial agent fee ................................................................................... 4,367
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 1,454
Accrued expenses ........................................................................................ 18,223
-----------
Total liabilities ................................................................................... 535,383
-----------
NET ASSETS .............................................................................................. $21,354,386
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $23,349,741
Accumulated net realized loss ......................................................................... (7,419,530)
Net unrealized appreciation ........................................................................... 5,424,175
-----------
NET ASSETS .............................................................................................. $21,354,386
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 3,296,862
===========
Net asset value and offering price per share ............................................................ $6.48
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 33,232
Interest .............................................................................................. 10,547
----------
Total investment income ............................................................................. 43,779
----------
EXPENSES
Investment advisory fee ............................................................................... 142,434
Financial agent fee ................................................................................... 46,630
Administration fee .................................................................................... 12,186
Printing .............................................................................................. 24,404
Professional .......................................................................................... 21,263
Custodian ............................................................................................. 11,385
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 9,405
----------
Total expenses ...................................................................................... 273,638
Less expenses borne by investment adviser ........................................................... (75,811)
Less custodian fees paid indirectly ................................................................. (2)
----------
Net expenses ........................................................................................ 197,825
----------
NET INVESTMENT LOSS ..................................................................................... (154,046)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (718,619)
Net change in unrealized appreciation (depreciation) on investments ................................... 6,765,522
----------
NET GAIN ON INVESTMENTS ................................................................................. 6,046,903
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $5,892,857
==========
See Notes to Financial Statements
46
PHOENIX-ENGEMANN SMALL & MID-CAP GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ (154,046) $ (111,548)
Net realized gain (loss) ...................................................................... (718,619) (4,130,418)
Net change in unrealized appreciation (depreciation) .......................................... 6,765,522 62,238
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................... 5,892,857 (4,179,728)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,504,734 and 1,423,821 shares, respectively) .................. 13,904,839 7,265,575
Cost of shares repurchased (1,685,221 and 1,113,474 shares, respectively) ..................... (9,402,353) (5,591,337)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... 4,502,486 1,674,238
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 10,395,343 (2,505,490)
NET ASSETS
Beginning of period ........................................................................... 10,959,043 13,464,533
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ...... $21,354,386 $10,959,043
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
--------------------------------- 8/15/00 TO
2003 2002 2001 12/31/00
------ ------ ------ ------
Net asset value, beginning of period ........................................ $ 4.42 $ 6.21 $ 8.48 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .............................................. (0.05)(6) (0.05)(6) (0.04)(6) 0.01
Net realized and unrealized gain (loss) ................................... 2.11 (1.74) (2.23) (1.53)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........................................ 2.06 (1.79) (2.27) (1.52)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ...................................... -- -- --(4) --
------ ------ ------ ------
TOTAL DISTRIBUTIONS ..................................................... -- -- -- --
------ ------ ------ ------
CHANGE IN NET ASSET VALUE ................................................... 2.06 (1.79) (2.27) (1.52)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .............................................. $ 6.48 $ 4.42 $ 6.21 $ 8.48
====== ====== ====== ======
Total return ................................................................ 46.42% (28.80)% (26.72)% (15.18)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ....................................... $21,354 $10,959 $13,465 $7,270
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (3) .................................................... 1.25%(5) 1.23%(5) 1.15%(5) 1.15%(1)
Net investment income (loss) .............................................. (0.97)% (0.99)% (0.55)% 0.21%(1)
Portfolio turnover .......................................................... 49% 65% 31% 21%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.73%, 2.22%, 2.13% and 3.93% for the periods ended December 31, 2003, 2002, 2001 and 2000, respectively.
(4) Amount is less than $0.01.
(5) 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) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
47
PHOENIX-GOODWIN MONEY MARKET SERIES
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MONTHLY YIELD COMPARISON
Money Market Series 1 IBC Report First Tier 2
1/03 0.93% 0.68%
2/03 0.84% 0.63%
3/03 0.82% 0.59%
4/03 0.77% 0.56%
5/03 0.77% 0.54%
6/03 0.66% 0.49%
7/03 0.55% 0.41%
8/03 0.53% 0.38%
9/03 0.58% 0.38%
10/03 0.56% 0.39%
11/03 0.55% 0.39%
12/03 0.63% 0.40%
1 The chart illustrates the period from January 1, 2003 to December 31, 2003.
The results are not indicative of the rate of return which may be realized
from an investment made in the Money Market Series today. The Money Market
Series is neither insured nor guaranteed by the U.S. Government, and there can
be no assurance that the series will be able to maintain a stable Net Asset
Value at $10.00 per share.
2 Average monthly yield of First Tier Money Market Funds as reported by IBC's
Money Market Insight.
48
PHOENIX-GOODWIN MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
FACE
VALUE INTEREST MATURITY
(000) DESCRIPTION RATE DATE VALUE
- ------ ----------- -------- -------- ------------
FEDERAL AGENCY SECURITIES--24.0%
$1,500 Fannie Mae (c) (d) ......................................................... 1.03% 1/2/04 $ 1,500,000
5,000 Fannie Mae (c) (d) ......................................................... 1.18 1/2/04 4,999,874
2,500 Fannie Mae (c) (d) ......................................................... 1.55 1/27/04 2,500,000
5,000 Fannie Mae (c) (d) ......................................................... 1.25 2/4/04 5,000,000
2,500 Fannie Mae (c) (d) ......................................................... 1.55 2/12/04 2,500,000
3,500 FHLB (c) ................................................................... 3.75 2/13/04 3,510,599
1,500 FHLB (c) ................................................................... 5.25 2/13/04 1,507,130
2,500 FHLB (c) (d) ............................................................... 1.25 3/11/04 2,500,000
2,500 FHLB (c) (d) ............................................................... 1.05 3/24/04 2,500,000
2,500 Fannie Mae (c) (d) ......................................................... 1.35 4/9/04 2,500,000
3,865 FHLB (c) ................................................................... 4.88 4/16/04 3,906,470
2,500 FHLB (c) ................................................................... 3.38 5/14/04 2,519,364
2,500 FHLB (c) (d) ............................................................... 1.60 6/8/04 2,500,000
2,500 Fannie Mae (c) ............................................................. 6.50 8/15/04 2,580,645
2,500 FHLB (c) ................................................................... 3.63 10/15/04 2,544,958
2,500 FHLB Discount Note ......................................................... 1.31 11/10/04 2,471,435
2,500 FHLB (c) ................................................................... 1.51 12/8/04 2,500,000
------------
TOTAL FEDERAL AGENCY SECURITIES ................................................................................ 48,040,475
------------
RESET
DATE
--------
FEDERAL AGENCY SECURITIES--VARIABLE(b)--3.0%
103 SBA (Final Maturity 1/25/21) ............................................... 1.50 1/1/04 103,339
607 SBA (Final Maturity 10/25/22) .............................................. 1.50 1/1/04 606,678
1,300 SBA (Final Maturity 11/25/21) .............................................. 1.63 1/1/04 1,299,183
331 SBA (Final Maturity 2/25/23) ............................................... 1.50 1/1/04 330,807
430 SBA (Final Maturity 2/25/23) ............................................... 1.50 1/1/04 430,199
853 SBA (Final Maturity 3/25/24) ............................................... 1.38 1/1/04 853,309
147 SBA (Final Maturity 5/25/21) ............................................... 1.50 1/1/04 146,506
1,319 SBA (Final Maturity 9/25/23) ............................................... 1.38 1/1/04 1,319,080
------------
TOTAL FEDERAL AGENCY SECURITIES--VARIABLE ...................................................................... 5,089,101
------------
STANDARD
& POOR'S
RATING MATURITY
(UNAUDITED) DATE
----------- --------
COMMERCIAL PAPER--62.0%
1,350 Emerson Electric Co. ......................................... A-1 0.95 1/2/04 1,349,964
500 Preferred Receivables Funding Corp. .......................... A-1 1.12 1/5/04 499,938
3,500 ABSC Capital Corp. ........................................... A-1 1.12 1/6/04 3,499,456
3,145 Pitney Bowes, Inc. ........................................... A-1+ 1.03 1/6/04 3,144,550
800 Preferred Receivables Funding Corp. .......................... A-1 1.10 1/6/04 799,878
2,000 Corporate Asset Funding Co. .................................. A-1+ 1.08 1/7/04 1,999,640
3,000 ABSC Capital Corp. ........................................... A-1 1.12 1/9/04 2,999,253
1,900 Oil Insurance Ltd. ........................................... A-1 1.10 1/12/04 1,899,361
1,685 Preferred Receivables Funding Corp. .......................... A-1 1.08 1/12/04 1,684,444
3,500 SPARC, LLC ................................................... A-1 1.11 1/13/04 3,498,705
1,820 Corporate Asset Funding Co. .................................. A-1+ 1.08 1/14/04 1,819,290
3,945 Receivables Capital Corp. .................................... A-1+ 1.08 1/14/04 3,943,462
402 Receivables Capital Corp. .................................... A-1+ 1.08 1/15/04 401,831
3,500 ABSC Capital Corp. ........................................... A-1 1.13 1/20/04 3,497,913
2,500 Govco, Inc. .................................................. A-1+ 1.10 1/20/04 2,498,549
1,400 Deluxe Corp. ................................................. A-1 1.10 1/21/04 1,399,144
1,115 CIT Group, Inc. .............................................. A-1 1.12 1/22/04 1,114,272
2,195 Preferred Receivables Funding Corp. .......................... A-1 1.08 1/22/04 2,193,617
2,585 Corporate Asset Funding Co. .................................. A-1+ 1.08 1/23/04 2,583,294
1,425 Deluxe Corp. ................................................. A-1 1.06 1/23/04 1,424,077
2,500 Harley Davidson, Inc. ........................................ A-1 1.00 1/23/04 2,498,472
1,795 Asset Securitization Corp. ................................... A-1 1.08 1/26/04 1,793,654
1,500 Govco, Inc. .................................................. A-1+ 1.06 1/26/04 1,498,896
3,500 Govco, Inc. .................................................. A-1+ 1.10 1/26/04 3,497,326
See Notes to Financial Statements
49
PHOENIX-GOODWIN MONEY MARKET SERIES
STANDARD
FACE & POOR'S
VALUE RATING INTEREST MATURITY
(000) DESCRIPTION (UNAUDITED) RATE DATE VALUE
- ------ ----------- ----------- ------- -------- ------------
COMMERCIAL PAPER--CONTINUED
$2,620 CIT Group, Inc. .............................................. A-1 1.10% 1/29/04 $ 2,617,758
3,500 Merrill Lynch & Co., Inc. .................................... A-1 1.04 1/30/04 3,497,068
1,275 ABN AMRO North American Finance, Inc. ........................ A-1+ 1.08 2/3/04 1,273,738
3,150 Corporate Asset Funding Co. .................................. A-1+ 1.09 2/4/04 3,146,757
4,520 SPARC, LLC ................................................... A-1 1.10 2/4/04 4,515,304
2,500 Household Finance Corp. ...................................... A-1 1.09 2/5/04 2,497,351
2,000 SPARC, LLC ................................................... A-1 1.10 2/5/04 1,997,861
2,620 Govco, Inc. .................................................. A-1+ 1.05 2/9/04 2,617,020
2,500 Pfizer, Inc. ................................................. A-1+ 1.05 2/9/04 2,497,156
3,690 Deluxe Corp. ................................................. A-1 1.07 2/10/04 3,685,613
785 Oil Insurance Ltd. ........................................... A-1 1.07 2/11/04 784,043
3,370 Oil Insurance Ltd. ........................................... A-1 1.10 2/11/04 3,365,778
3,185 Oil Insurance Ltd. ........................................... A-1 1.11 2/13/04 3,180,777
3,000 Du Pont (E.I.) de Nemours & Co. .............................. A-1+ 1.07 2/17/04 2,995,809
3,500 Deluxe Corp. ................................................. A-1 1.10 2/18/04 3,494,867
1,295 CIT Group, Inc. .............................................. A-1 1.09 2/20/04 1,293,040
3,000 CIT Group, Inc. .............................................. A-1 1.13 2/20/04 2,995,292
3,000 General Electric Capital Corp. ............................... A-1+ 1.07 2/24/04 2,995,185
1,400 General Electric Capital Corp. ............................... A-1+ 1.09 2/24/04 1,397,711
6,630 Cargill, Inc. ................................................ A-1 1.07 3/5/04 6,617,388
1,000 General Electric Capital Corp. ............................... A-1+ 1.05 3/15/04 997,842
3,000 Archer Daniels Midland Co. ................................... A-1 1.10 3/16/04 2,993,125
3,600 Private Export Funding Corp. ................................. A-1+ 1.07 3/30/04 3,590,477
3,635 Archer Daniels Midland Co. ................................... A-1 1.11 4/13/04 3,623,456
3,585 Archer Daniels Midland Co. ................................... A-1 1.17 4/13/04 3,572,999
2,000 CIT Group, Inc. .............................................. A-1 1.11 4/15/04 1,993,525
------------
TOTAL COMMERCIAL PAPER ......................................................................................... 125,775,926
------------
MEDIUM TERM NOTES(c)--11.0%
2,850 Private Export Funding Corp. ................................. AAA 5.73 1/15/04 2,854,691
1,500 Associates Corporation of North America ...................... AA- 6.20 1/26/04 1,504,808
2,500 Merrill Lynch & Co., Inc. (b) ................................ A+ 1.39 2/9/04 2,501,097
1,905 Associates Corporation of North America ...................... AA- 5.50 2/15/04 1,914,910
1,706 Citicorp ..................................................... A+ 7.13 3/15/04 1,725,835
500 Du Pont (E.I.) de Nemours & Co. .............................. AA- 8.13 3/15/04 506,770
4,060 Heller Financial, Inc. ....................................... AAA 6.00 3/19/04 4,101,648
400 Associates Corporation of North America ...................... AA- 5.80 4/20/04 405,367
535 General Electric Capital Corp. ............................... AAA 5.38 4/23/04 541,907
1,045 Citigroup Global Markets (b) ................................. AA- 1.50 5/4/04 1,047,336
1,000 Associates Corporation of North America ...................... AA- 7.64 5/26/04 1,025,353
4,516 Bank of America Corp ......................................... A 7.75 8/15/04 4,693,033
------------
TOTAL MEDIUM TERM NOTES ........................................................................................ 22,822,755
------------
TOTAL INVESTMENTS--100.0%
(Identified cost $201,728,257) ............................................................................... 201,728,257(a)
Other assets and liabilities, net--0.0% ........................................................................ 915,836
------------
NET ASSETS--100.0% ............................................................................................. $202,644,093
============
<FN>
(a) Federal Income Tax Information: At December 31, 2003, the aggregate cost of securities was the same for book and tax purposes.
(b) Variable or step coupon security; interest rate shown reflects the rate currently in effect.
(c) The interest rate shown is the coupon rate.
(d) Callable. The maturity date shown is the call date.
</FN>
See Notes to Financial Statements
50
PHOENIX-GOODWIN MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $201,728,257) ........................................... $201,728,257
Receivables
Fund shares sold ...................................................................................... 1,866,895
Interest .............................................................................................. 724,588
Investment securities sold ............................................................................ 49,172
Prepaid expenses ........................................................................................ 3,943
------------
Total assets ........................................................................................ 204,372,855
------------
LIABILITIES
Cash overdraft .......................................................................................... 93,836
Payables
Fund shares repurchased ............................................................................... 1,465,414
Investment advisory fee ............................................................................... 68,824
Financial agent fee ................................................................................... 13,904
Administration fee .................................................................................... 13,249
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 71,175
------------
Total liabilities ................................................................................... 1,728,762
------------
NET ASSETS .............................................................................................. $202,644,093
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $202,644,093
------------
NET ASSETS .............................................................................................. $202,644,093
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 20,264,467
============
Net asset value and offering price per share ............................................................ $10.00
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Interest .............................................................................................. $2,882,768
----------
Total investment income ............................................................................. 2,882,768
----------
EXPENSES
Investment advisory fee ............................................................................... 905,657
Financial agent fee ................................................................................... 180,109
Administration fee .................................................................................... 174,344
Custodian ............................................................................................. 45,802
Professional .......................................................................................... 13,231
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 3,799
----------
Total expenses ...................................................................................... 1,328,873
Custodian fees paid indirectly ...................................................................... (1,062)
----------
Net expenses ........................................................................................ 1,327,811
----------
NET INVESTMENT INCOME ................................................................................... $1,554,957
==========
See Notes to Financial Statements
51
PHOENIX-GOODWIN MONEY MARKET SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------- -------------
FROM OPERATIONS
Net investment income (loss) ................................................................ $ 1,554,957 $ 3,513,897
------------- -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................. 1,554,957 3,513,897
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ....................................................................... (1,554,957) (3,513,897)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ................................... (1,554,957) (3,513,897)
------------- -------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (44,435,831 and 68,436,483 shares, respectively) .............. 444,358,309 684,364,835
Net asset value of shares issued from reinvestment of distributions
(155,502 and 351,390 shares, respectively) ................................................ 1,554,957 3,513,897
Cost of shares repurchased (49,902,770 and 69,274,867 shares, respectively) ................. (499,027,882) (692,748,766)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ................................... (53,114,616) (4,870,034)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS ....................................................... (53,114,616) (4,870,034)
NET ASSETS
Beginning of period ......................................................................... 255,758,709 260,628,743
------------- -------------
END OF PERIOD ............................................................................... $ 202,644,093 $ 255,758,709
============= =============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ............................... $10.00 $10.00 $10.00 $10.00 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income ............................................ 0.07 0.14 0.38 0.59 0.47
Net realized gain ................................................ -- -- --(3) -- --
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ............................... 0.07 0.14 0.38 0.59 0.47
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ............................. (0.07) (0.14) (0.38) (0.59) (0.47)
Distributions from net realized gains ............................ -- -- --(3) -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................ (0.07) (0.14) (0.38) (0.59) (0.47)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ..................................... $10.00 $10.00 $10.00 $10.00 $10.00
====== ====== ====== ====== ======
Total return ....................................................... 0.68% 1.42% 3.82% 6.03% 4.82%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .............................. $202,644 $255,759 $260,629 $179,968 $235,584
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) ........................................... 0.59%(2) 0.56%(2) 0.55%(2) 0.55% 0.55%
Net investment income ............................................ 0.69% 1.41% 3.63% 5.83% 4.73%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 0.60%, 0.58% and 0.57% for the periods ended December 31, 2001, 2000 and 1999, respectively.
(2) 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) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
52
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is long-term total return. Investors should
note that the series may hold foreign bonds, and foreign investments pose
additional risk, such as currency fluctuation, less public disclosure, and
political and economic uncertainty. The series may also invest in high-yielding
fixed income securities that are generally subject to greater market
fluctuations and risk of loss of income and principal than are investments in
lower-yielding fixed-income securities.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Significantly outperforming its benchmark over its fiscal year ended December
31, 2003, the series returned 14.58%. For the same period, the Lehman Brother
Aggregate Bond Index 1 returned 4.10%. All performance figures assume
reinvestment of distributions. Past performance is not indicative of future
results and current performance may be higher or lower than the performance
shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: During 2003, the U.S. bond market was effected by prolonged periods of
near-record interest rate lows. The second half of the year brought substantial
volatility as investors assessed the direction of the U.S. economy and debated
what action, if any, the Federal Reserve Board would take. The volatility was
somewhat hidden by the slight change of -0.15% registered by the Lehman
Aggregate Bond Index for the third quarter of 2003. Rates increased slightly,
while the yield curve remained steep, reinforcing expectations in the bond
market that the economy would improve.
Many economic statistics improved over this time period, but a job market
recovery remained elusive. The ISM Manufacturing Index 2 rose to 54.7 in the
month of August, showing improvement for the fourth straight month and remaining
above 50 for the second month in a row. Any reading above 50 normally signifies
expansion in the manufacturing sector. Despite positive overall economic data,
debate continued through year-end over whether persistent high unemployment
would derail the economic recovery or if hiring would begin to gain momentum.
Q: HOW DID THE SERIES PERFORM IN THIS ENVIRONMENT?
A: The series performed well, aided by its investment in spread sectors. The
series' use of non-treasury sectors provided an attractive source of income to
the series. Sectors that continued to help the portfolio into the final four
months of the fiscal year included corporate investment grade, corporate high
yield, non-dollar, and emerging markets. Representing relatively small
percentages of the portfolio, non-agency mortgage backed securities, U.S.
Treasury securities, and taxable municipals hurt the series' performance. In
addition, our more conservative sector allocations (that included less below
investment-grade holdings that the average portfolios in our peer group,
according to Lipper, Inc.) resulted in a detraction from overall series
performance.
Q: WHAT IS YOUR OUTLOOK FOR THE COMING YEAR?
A: We continue to be opportunistic and have taken some more credit risk in the
series due to improved credit fundamentals in the corporate and credit high
yield market. We feel that the greatest risk in the fixed income market is
interest rate risk, not credit risk, and opportunities continue in many
credit-intensive sectors.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total-return performance.
2 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
53
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Multi-Sector Fixed Income Series 14.58% 8.47% 7.69%
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 1 4.10% 6.62% 6.95%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/93. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period. Returns indicate past performance,
which is not indicative of future performance. Investment return and net asset
value will fluctuate so that your shares, when redeemed, may be worth more or
less than the original cost. Please visit PhoenixWM.com for performance data
current to the most recent month-end. Foreign investing involves special risks
such as currency fluctuation and less public disclosure, as well as economic and
political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Multi-Sector Fixed Income Series Lehman Brothers Aggregate Bond Index 1
12/31/93 $10,000 $10,000
12/30/94 $ 9,453 $ 9,708
12/29/95 $11,678 $11,502
12/31/96 $13,128 $11,920
12/31/97 $14,563 $13,071
12/31/98 $13,978 $14,206
12/31/99 $14,740 $14,089
12/29/00 $15,694 $15,727
12/31/01 $16,650 $17,055
12/31/02 $18,315 $18,805
12/31/03 $20,984 $19,576
1 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total-return performance.
2 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
54
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
AGENCY MORTGAGE-BACKED SECURITIES--3.1%
GNMA 8%, 9/15/06 ........................ Aaa $ 1 $ 620
GNMA 8%, 10/15/06 ....................... Aaa 28 29,661
GNMA 6.50%, '23-'32 ..................... Aaa 5,737 6,050,696
------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $5,781,670) ............................... 6,080,977
------------
MUNICIPAL BONDS--4.2%
CALIFORNIA--1.4%
Alameda Corridor Transportation Authority
Revenue Taxable Series C 6.50%,
10/1/19 ............................... Aaa 750 827,385
Alameda Corridor Transportation Authority
Revenue Taxable Series C 6.60%,
10/1/29 ............................... Aaa 1,750 1,928,255
------------
2,755,640
------------
CONNECTICUT--1.2%
Mashantucket Western Pequot Tribe
Revenue Taxable Series A 144A 6.57%,
9/1/13 (b) ............................ Aaa 2,140 2,320,166
------------
FLORIDA--0.7%
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20 (d) .... Aaa 1,310 1,432,210
------------
ILLINOIS--0.8%
Illinois Educational Facilities
Authority - Loyola University Taxable
Series C 7.12%, 7/1/11 ................ Aaa 1,330 1,542,973
------------
SOUTH DAKOTA--0.1%
Educational Enhancement Funding Corp.
Taxable Series A 6.72%, 6/1/25 ........ Baa 335 318,971
------------
TOTAL MUNICIPAL BONDS
(Identified cost $7,615,057) ............................... 8,369,960
------------
ASSET-BACKED SECURITIES--1.9%
Amortizing Residential Collateral Net
Interest Margin Trust 02-9A, A 7.75%,
12/27/32 .............................. Baa 326 323,280
Green Tree Financial Corp 96-10 M1 7.24%,
11/15/28 .............................. AA(c) 1,000 920,625
Green Tree Financial Corp. 97-4, M1 7.22%,
2/15/29 ............................... A 1,500 1,016,250
Litigation Settlement Monetized Fee Trust
02-5A, 144A 6%, 10/25/32 (b) .......... Baa 745 684,176
Morgan Stanley ABS Capital 03-NC8N
7.60%, 9/25/33 ........................ A(c) 793 793,984
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $3,778,739) ............................... 3,738,315
------------
CORPORATE BONDS--42.8%
AEROSPACE & DEFENSE--0.3%
L-3 Communications Corp. 144A 6.125%,
1/15/14 (b) ........................... Ba 550 554,125
------------
ASSET MANAGEMENT & CUSTODY BANKS--0.6%
Janus Capital Group, Inc. 7.75%, 6/15/09 Baa 1,000 1,113,460
------------
AUTO PARTS & EQUIPMENT--0.1%
ArvinMeritor, Inc. 8.75%, 3/1/12 ........ Baa 235 270,250
------------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
AUTOMOBILE MANUFACTURERS--1.1%
DaimlerChrysler NA Holding Corp. 6.50%,
11/15/13 .............................. A $ 425 $ 447,699
General Motors Corp. 7.125%, 7/15/13 .... Baa 1,500 1,645,005
------------
2,092,704
------------
BROADCASTING & CABLE TV--2.8%
Comcast Cable Communications, Inc.
6.75%, 1/30/11 ........................ Baa 1,000 1,112,932
DIRECTV Holdings LLC 8.375%, 3/15/13 .... B 1,250 1,456,250
EchoStar DBS Corp. 144A 5.75%,
10/1/08 (b) ........................... Ba 1,500 1,524,375
Echostar DBS Corp. 144A 6.375%,
10/1/11 (b) ........................... Ba 1,000 1,030,000
Insight Midwest 144A 10.50%, 11/1/10 (b). B 500 546,250
------------
5,669,807
------------
CASINOS & GAMING--1.8%
GTECH Holdings Corp. 144A 4.75%,
10/15/10 (b) .......................... Baa 1,000 1,010,834
MGM Mirage, Inc. 8.50%, 9/15/10 ......... Ba 800 922,000
Mohegan Tribal Gaming Authority 8.125%,
1/1/06 ................................ Ba 1,560 1,688,700
------------
3,621,534
------------
CATALOG RETAIL--0.4%
InterActiveCorp 7%, 1/15/13 ............. Baa 750 826,933
------------
COMMODITY CHEMICALS--0.4%
Lyondell Chemical Co. 10.875%, 5/1/09 ... B 750 772,500
------------
CONSUMER FINANCE--3.1%
Capital One Bank 6.50%, 6/13/13 ......... Baa 1,000 1,048,413
Ford Motor Credit Co. 7.25%, 10/25/11 ... A 1,500 1,626,846
General Electric Capital Corp. Series
MTNA 6%, 6/15/12 ...................... Aaa 1,750 1,897,793
General Motors Acceptance Corp. 6.875%,
9/15/11 ............................... A 500 538,563
Household Finance Corp. 6.375%, 11/27/12 A 1,000 1,097,054
------------
6,208,669
------------
DIVERSIFIED CHEMICALS--0.4%
Cabot Corp. 144A 5.25%, 9/1/13 (b) ...... Baa 750 743,621
------------
DIVERSIFIED COMMERCIAL SERVICES--1.4%
Mobile Mini, Inc. 144A 9.50%, 7/1/13 (b) B 1,500 1,657,500
United Rentals North America, Inc. 144A
7.75%, 11/15/13 (b) ................... B 1,150 1,180,188
------------
2,837,688
------------
DIVERSIFIED METALS & MINING--0.3%
Freeport-McMoRan Copper & Gold, Inc.
(Indonesia) 10.125%, 2/1/10 ........... B 500 578,750
------------
DRUG RETAIL--0.5%
Neighborcare, Inc. 144A 6.875%,
11/15/13 (b) .......................... Ba 1,000 1,022,500
------------
ELECTRIC UTILITIES--3.2%
Centerpoint Energy 144A 6.85%, 6/1/15 (b) Ba 1,000 1,027,795
Centerpoint Energy Houston Electric LLC
144A 5.75%, 1/15/14 (b) ............... Baa 1,100 1,148,545
Commonwealth Edison Series 102 4.74%,
8/15/10 ............................... A 1,200 1,226,802
See Notes to Financial Statements
55
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
ELECTRIC UTILITIES--CONTINUED
Entergy Gulf States, Inc. 144A 3.60%,
6/1/08 (b) ............................ Baa $1,000 $ 963,918
MSW Energy Holdings 144A 8.50%,
9/1/10 (b) ............................ Ba 1,000 1,095,000
TECO Energy, Inc. 7.20%, 5/1/11 ......... Ba 750 783,750
------------
6,245,810
------------
ELECTRONIC MANUFACTURING SERVICES--0.8%
Jabil Circuit, Inc. 5.875%, 7/15/10 ..... Baa 1,500 1,564,607
------------
ENVIRONMENTAL SERVICES--0.3%
Allied Waste North America Series B
7.875%, 1/1/09 ........................ Ba 500 523,750
------------
GAS UTILITIES--0.8%
AmeriGas Partners/Eagle Finance Corp.
Series B 8.875%, 5/20/11 .............. B 1,000 1,105,000
Suburban Propane Partners LP/Suburban
Energy Finance Corp. 144A 6.875%,
12/15/13 (b) .......................... B 500 507,500
------------
1,612,500
------------
HEALTH CARE DISTRIBUTORS--1.1%
AmerisourceBergen Corp. 8.125%, 9/1/08 .. Ba 1,000 1,132,500
Omnicare, Inc. 6.125%, 6/1/13 ........... Ba 1,000 1,007,500
------------
2,140,000
------------
HEALTH CARE FACILITIES--1.5%
HCA, Inc. 6.30%, 10/1/12 ................ Ba 900 927,914
IASIS Healthcare Corp. 13%, 10/15/09 .... B 100 113,000
Service Corporation International 6%,
12/15/05 .............................. B 400 410,000
Service Corporation International 7.20%,
6/1/06 ................................ B 600 627,000
Tenet Healthcare Corp. 5.375%, 11/15/06 . Ba 500 495,000
Tenet Healthcare Corp. 6.375%, 12/1/11 .. Ba 375 361,875
------------
2,934,789
------------
HEALTH CARE SERVICES--0.9%
Laboratory Corporation of America
Holdings 5.50%, 2/1/13 ................ Baa 750 774,286
Team Health, Inc. Series B 12%, 3/15/09 . B 1,000 1,085,000
------------
1,859,286
------------
HOMEBUILDING--0.3%
WCI Communities, Inc. 9.125%, 5/1/12 .... Ba 550 607,750
------------
HOTELS, RESORTS & CRUISE LINES--0.6%
Royal Caribbean Cruises 6.875%, 12/1/13 . Ba 1,250 1,265,625
------------
INTEGRATED TELECOMMUNICATION SERVICES--2.5%
Citizens Communications 9.25%, 5/15/11 .. Baa 750 886,682
Sprint Capital Corp. 7.625%, 1/30/11 .... Baa 1,000 1,120,937
Sprint Capital Corp. 8.375%, 3/15/12 .... Baa 1,000 1,167,800
Verizon Global Funding Corp. 7.25%,
12/1/10 ............................... A 1,000 1,151,387
Verizon Global Funding Corp. 6.875%,
6/15/12 ............................... A 500 560,863
------------
4,887,669
------------
INVESTMENT BANKING & BROKERAGE--0.6%
Goldman Sachs Group, Inc. 4.75%,
7/15/13 ............................... Aa 1,200 1,169,485
------------
LEISURE FACILITIES--0.4%
Six Flags, Inc. 144A 9.625%, 6/1/14 (b) . B 750 787,500
------------
MANAGED HEALTH CARE--0.6%
Coventry Health Care, Inc. 8.125%,
2/15/12 ............................... Ba 1,000 1,115,000
------------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
METAL & GLASS CONTAINERS--0.8%
Ball Corp. 6.875%, 12/15/12 ............. Ba $ 625 $ 656,250
Owens-Brockway Glass Container, Inc.
8.75%, 11/15/12 ....................... B 750 839,063
------------
1,495,313
------------
MULTI-UTILITIES & UNREGULATED POWER--1.3%
Calpine Corp 144A 8.75%, 7/15/13 (b) .... B(c) 750 727,500
Reliant Resources, Inc. 144A 9.25%,
7/15/10 (b) ........................... B 750 798,750
Williams Cos., Inc. (The) 8.625%, 6/1/10. B 1,000 1,127,500
------------
2,653,750
------------
OIL & GAS EXPLORATION & PRODUCTION--3.7%
Chesapeake Energy Corp. 144A 6.875%,
1/15/16 (b) ........................... Ba 1,500 1,552,500
Denbury Resources, Inc. 7.50%, 4/1/13 ... B 1,000 1,050,000
Magnum Hunter Resources, Inc. 9.60%,
3/15/12 ............................... B 1,045 1,191,300
Pemex Project Funding Master Trust
9.125%, 10/13/10 ...................... Baa 1,000 1,187,500
Pemex Project Funding Master Trust
7.375%, 12/15/14 ...................... Baa 1,000 1,067,500
Pioneer Natural Resource Co. 7.50%,
4/15/12 ............................... Ba 1,200 1,381,378
------------
7,430,178
------------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--1.6%
GulfTerra Energy Partners 144A 6.25%,
6/1/10 (b) ............................ Ba 1,000 1,045,000
Premcor Refining Group, Inc. (The) 9.25%,
2/1/10 ................................ Ba 750 843,750
Tesoro Petroleum Corp. 8%, 4/15/08 ...... Ba 500 533,750
Valero Energy Corp. 6.875%, 4/15/12 ..... Baa 750 829,949
------------
3,252,449
------------
PACKAGED FOODS & MEATS--1.1%
Del Monte Corp. 144A 8.625%, 12/15/12 (b) B 550 605,000
PPC Escrow Corp. 144A 9.25%, 11/15/13 (b) B 1,500 1,560,000
------------
2,165,000
------------
PAPER PACKAGING--0.3%
Smurfit - Stone Container Corp. 8.25%,
10/1/12 ............................... B 500 545,000
------------
PHOTOGRAPHIC PRODUCTS--0.5%
Eastman Kodak Co. 7.25%, 11/15/13 ....... Baa 1,000 1,049,237
------------
PUBLISHING & PRINTING--0.4%
Dex Media, Inc. 144A 0%, 11/15/13 (b) (d) Caa 1,200 852,000
------------
RAILROADS--0.5%
CSX Corp. 5.30%, 2/15/14 ................ Baa 1,000 1,005,459
------------
REITS--0.7%
Health Care REIT, Inc. 6%, 11/15/13 ..... Baa 775 783,227
HRPT Properties Trust 5.75%, 2/15/14 .... Baa 500 501,356
------------
1,284,583
------------
SPECIALTY STORES--2.7%
AutoNation, Inc. 9%, 8/1/08 ............. Ba 1,000 1,152,500
Hollywood Entertainment Corp. 9.625%,
3/15/11 ............................... B 1,025 1,107,000
Office Depot, Inc. 6.25%, 8/15/13 ....... Baa 1,925 2,021,238
Toys "R" Us, Inc. 7.875%, 4/15/13 ....... Baa 1,000 1,075,750
------------
5,356,488
------------
See Notes to Financial Statements
56
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
WIRELESS TELECOMMUNICATION SERVICES--2.4%
ACC Escrow Corp. 144A 10%, 8/1/11 (b) ... B $1,000 $ 1,110,000
American Towers, Inc. 144A 7.25%,
12/1/11 (b) ........................... B 1,000 1,022,500
Dobson Communications Corp. 144A
8.875%, 10/1/13 (b) ................... B 850 864,875
Nextel Communications, Inc. 6.875%,
10/31/13 .............................. B 750 796,875
Triton PCS, Inc. 9.375%, 2/1/11 ......... B 1,000 1,025,000
------------
4,819,250
------------
TOTAL CORPORATE BONDS
(Identified cost $80,565,725) .............................. 84,935,019
------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--7.2%
Commercial Resecuritization Trust 01-ABC2,
A1 7.17%, 2/21/13 ..................... Aaa 885 953,034
CS First Boston Mortgage Securities Corp.
97-1R, 1M4 7.262%, 2/28/22 (d) ........ Baa 133 132,246
DLJ Commercial Mortgage Corp. 98-CF2,
A1B 6.24%, 11/12/31 ................... Aaa 1,000 1,105,015
First Union Residential Securitization
Trust 98-A, SA4 7%, 4/25/25 ........... AAA(c) 64 64,351
GMAC Commercial Mortgage Securities, Inc.
97-C2, A3 6.566%, 11/15/07 ............ Aaa 1,000 1,095,942
Lehman Brothers Commercial Conduit
Mortgage Trust 99-C2, A2 7.325%,
9/15/09 ............................... Aaa 2,100 2,426,662
Master Alternative Loan Trust 02-3, M2
5.727%, 12/25/32 ...................... A 1,500 1,469,883
Morgan Stanley Capital I 98-WF2, C 6.77%,
7/15/30 ............................... AA(c) 1,700 1,916,748
Paine Webber Mortgage Acceptance Corp.
00-1, M 7.75%, 9/25/30 ................ AA(c) 407 406,737
Residential Funding Mortgage Securities I
94-S7, M3 6.50%, 3/25/24 .............. Baa 786 796,628
Sasco Net Interest Margin Trust
03-25XS, A 7.25%, 8/28/33 ............. A 782 778,829
Sasco Net Interest Margin Trust
03-28XS, A 7.50%, 9/28/33 ............. A 816 813,616
Sasco Net Interest Margin Trust
03-36XS, A 7.50%, 11/25/33 ............ A 993 991,927
Summit Mortgage Trust 00-1, B3 6.079%,
12/28/12 (d) .......................... A(c) 297 296,915
Vanderbilt Mortgage Finance 02-C, A4
6.57%, 8/7/24 ......................... Aaa 1,000 1,021,091
------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $13,589,063) .............................. 14,269,624
------------
FOREIGN GOVERNMENT SECURITIES--21.9%
AUSTRALIA--0.3%
Commonwealth of Australia Series 705
7.50%, 7/15/05 ........................ Aaa 700(j) 544,155
------------
AUSTRIA--1.0%
Republic of Austria 5.50%, 10/20/07 ..... Aaa 1,500(g) 2,037,715
------------
BRAZIL--3.5%
Federative Republic of Brazil 9.25%,
10/22/10 .............................. B 500 540,000
Federative Republic of Brazil 10%,
8/7/11 ................................ B 750 832,500
Federative Republic of Brazil 8%,
4/15/14 ............................... B 5,110 5,033,696
Federative Republic of Brazil 11%,
8/17/40 ............................... B 500 552,500
------------
6,958,696
------------
BULGARIA--0.4%
Republic of Bulgaria 144A 8.25%,
1/15/15 (b) ........................... Ba 496 584,040
Republic of Bulgaria RegS 8.25%,
1/15/15 ............................... Ba 254 299,085
------------
883,125
------------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
CHILE--0.5%
Republic of Chile 5.50%, 1/15/13 ........ Baa $1,000 $ 1,028,500
------------
COLOMBIA--1.2%
Republic of Colombia 10%, 1/23/12 ....... Ba 500 550,000
Republic of Colombia 11.75%, 2/25/20 .... Ba 1,500 1,815,000
------------
2,365,000
------------
LITHUANIA--0.2%
Republic of Lithuania 4.50%, 3/5/13 ..... Baa 350(g) 433,968
------------
MEXICO--2.6%
United Mexican States 7.50%, 1/14/12 .... Baa 4,500 5,076,000
------------
NEW ZEALAND--1.8%
Government of New Zealand Series 205
6.50%, 2/15/05 ........................ Aaa 3,750(h) 2,488,535
Government of New Zealand Series 404
8%, 4/15/04 ........................... Aaa 1,750(h) 1,157,513
------------
3,646,048
------------
PANAMA--0.9%
Republic of Panama 8.25%, 4/22/08 ....... Ba 1,000 1,105,000
Republic of Panama 9.625%, 2/8/11 ....... Ba 500 580,000
------------
1,685,000
------------
PERU--0.5%
Republic of Peru 8.75%, 11/21/33 ........ Ba 1,000 1,005,000
------------
RUSSIA--1.5%
Russian Federation RegS 5%, 3/31/30 (d) . Baa 3,000 2,891,250
------------
SOUTH AFRICA--1.0%
Republic of South Africa 5.25%, 5/16/13 . Baa 1,000(g) 1,207,745
Republic of South Africa Series R 150
12%, 2/28/05 .......................... A 5,000(f) 780,629
------------
1,988,374
------------
TURKEY--1.9%
Republic of Turkey 10.50%, 1/13/08 ...... B 1,000 1,180,000
Republic of Turkey 11.75%, 6/15/10 ...... B 1,500 1,905,000
Republic of Turkey 11%, 1/14/13 ......... B 500 628,750
------------
3,713,750
------------
UKRAINE--1.8%
Government of Ukraine RegS 11%,
3/15/07 ............................... B 2,777 3,089,073
Government of Ukraine RegS 7.65%,
6/11/13 ............................... B 500 522,500
------------
3,611,573
------------
VENEZUELA--2.8%
Republic of Venezuela 9.25%, 9/15/27 .... Caa 4,750 4,346,250
Republic of Venezuela 144A 10.75%,
9/19/13 (b) ........................... Caa 1,125 1,206,563
------------
5,552,813
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $39,379,643) .............................. 43,420,967
------------
FOREIGN CORPORATE BONDS--13.0%
AUSTRALIA--0.5%
European Investment Bank Series MTN
6%, 7/15/05 ........................... Aaa 1,250(j) 948,452
------------
BRAZIL--3.2%
Cia Brasileira de Bebidas 144A 8.75%,
9/15/13 (b) ........................... Baa 1,750 1,855,000
CSN Islands VIII Corp. 144A 9.75%,
12/16/13 (b) .......................... B 1,000 1,030,000
See Notes to Financial Statements
57
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
BRAZIL--CONTINUED
Petrobras International Finance Co.
9.125%, 7/2/13 ........................ Ba $2,250 $ 2,475,000
Vale Overseas Ltd. 144A 9%, 8/15/13 (b) . Ba 1,000 1,095,000
------------
6,455,000
------------
CANADA--1.0%
Cascades, Inc. 7.25%, 2/15/13 ........... Ba 750 795,000
Rogers Cable, Inc. 7.875%, 5/1/12 ....... Ba 1,000 1,115,000
------------
1,910,000
------------
CHILE--0.5%
Enersis SA 144A 7.375%, 1/15/14 (b) ..... Ba 1,000 1,031,748
------------
FRANCE--1.1%
Crown European Holdings SA 144A 10.25%,
3/1/11 (b) ............................ B(c) 1,500(g) 2,133,262
------------
GERMANY--0.6%
Deutsche Telekom International Finance BV
8.50%, 6/15/10 (d) .................... Baa 1,000 1,209,116
------------
HONG KONG--0.4%
Hutchison Whampoa International Ltd. 144A
6.25%, 1/24/14 (b) .................... A 750 761,536
------------
INDONESIA--0.4%
MEI Euro Finance Ltd. 144A 8.75%,
5/22/10 (b) ........................... B 750 757,500
------------
IRELAND--0.5%
Clondalkin Industries plc 10.625%,
1/15/10 ............................... B 750(g) 1,042,981
------------
NETHERLANDS--1.2%
Kazkommerts International BV 144A 8.50%,
4/16/13 (b) ........................... Baa 1,000 1,051,250
Kazkommerts International BV RegS
10.125%, 5/8/07 ....................... Baa 250 282,500
Turanalem Finance BV 144A 7.875%,
6/2/10 (b) ............................ Baa 1,000 1,027,500
------------
2,361,250
------------
NORWAY--0.6%
Norske Skogindustrier ASA 144A 6.125%,
10/15/15 (b) .......................... Baa 1,250 1,265,763
------------
SOUTH KOREA--0.7%
Korea Development Bank 5.75%, 9/10/13 ... A 1,250 1,312,329
------------
UKRAINE--0.7%
Kyivstar GSM RegS 12.75%, 11/21/05 ...... B 1,280 1,417,600
------------
UNITED KINGDOM--0.8%
British Sky Broadcasting Group plc 6.875%,
2/23/09 ............................... Ba 1,500 1,685,946
------------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
UNITED STATES--0.8%
Tyco International Group SA 6.375%,
10/15/11 .............................. Ba $1,000 $ 1,068,750
Xerox Capital Europe plc 5.875%, 5/15/04 B 500 507,500
------------
1,576,250
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $23,791,092) .............................. 25,868,733
------------
DEBT INDEX SECURITIES--2.6%
J.P. Morgan TRAC-X NA HY S2 T4 144A
10.125%, 3/25/09 (b) .................. NR 5,000 5,275,000
------------
TOTAL DEBT INDEX SECURITIES
(Identified cost $5,000,000) ............................... 5,275,000
------------
SHARES
------
COMMON STOCKS--0.0%
INTEGRATED TELECOMMUNICATION SERVICES--0.0%
AT&T Latin America Corp. Class A (e) ............... 64,050 1,281
------------
TOTAL COMMON STOCKS
(Identified cost $281,820) ................................. 1,281
------------
WARRANTS--0.0%
COMMUNICATIONS EQUIPMENT--0.0%
Loral Space & Communications, Inc.
Warrants (e) (i) ................................. 1,000 0
------------
TOTAL WARRANTS
(Identified cost $0) ....................................... 0
------------
TOTAL LONG TERM INVESTMENTS--96.7%
(Identified cost $179,782,809) ............................. 191,959,876
------------
PAR
VALUE
(000)
------
SHORT-TERM OBLIGATIONS--0.7%
FEDERAL AGENCY SECURITIES--0.7%
FHLB Discount Note 0.75%, 1/7/04 ................... $1,335 1,334,833
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,334,833) ............................... 1,334,833
------------
TOTAL INVESTMENTS--97.4%
(Identified cost $181,117,642) ............................. 193,294,709(a)
Other assets and liabilities, net--2.6% .................... 5,207,730
------------
NET ASSETS--100.0% ........................................... $198,502,439
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $12,697,753 and gross
depreciation of $962,945 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$181,559,901
(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 December 31,
2003, these securities amounted to a value of $46,332,104 or 23.3% of net
assets.
(c) As rated by Standard & Poors or Fitch.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Non-income producing.
(f) Par value represents South African Rand.
(g) Par value represents Euro.
(h) Par value represents New Zealand Dollar.
(i) Illiquid. Security valued at fair value as determined in good faith by or
under the direction of the Trustees. At December 31, 2003, this security
amounted to $0 or 0.0% of net assets.
(j) Par value represents Australian Dollar.
See Notes to Financial Statements
58
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $181,117,642) ........................................... $193,294,709
Cash .................................................................................................... 1,471,847
Receivables
Interest .............................................................................................. 3,310,536
Fund shares sold ...................................................................................... 850,822
Investment securities sold ............................................................................ 3,679
Prepaid expenses ........................................................................................ 3,026
------------
Total assets ........................................................................................ 198,934,619
------------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 249,434
Investment advisory fee ............................................................................... 83,017
Professional fee ...................................................................................... 30,338
Financial agent fee ................................................................................... 13,175
Administration fee .................................................................................... 12,774
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 41,082
------------
Total liabilities ................................................................................... 432,180
------------
NET ASSETS .............................................................................................. $198,502,439
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $210,829,561
Undistributed net investment income ................................................................... 755,101
Accumulated net realized loss ......................................................................... (25,279,504)
Net unrealized appreciation ........................................................................... 12,197,281
------------
NET ASSETS .............................................................................................. $198,502,439
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 21,143,393
============
Net asset value and offering price per share ............................................................ $9.39
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Interest ...................................................................................................... $13,624,003
-----------
Total investment income ..................................................................................... 13,624,003
-----------
EXPENSES
Investment advisory fee ....................................................................................... 953,288
Financial agent fee ........................................................................................... 156,973
Administration fee ............................................................................................ 146,806
Custodian ..................................................................................................... 59,288
Printing ...................................................................................................... 49,947
Professional .................................................................................................. 7,601
Trustees ...................................................................................................... 5,932
Miscellaneous ................................................................................................. 28,063
-----------
Total expenses .............................................................................................. 1,407,898
Custodian fees paid indirectly .............................................................................. (6,210)
-----------
Net expenses ................................................................................................ 1,401,688
-----------
NET INVESTMENT INCOME ........................................................................................... 12,222,315
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 10,262,253
Net realized loss on foreign currency transactions ............................................................ (172,638)
Net change in unrealized appreciation (depreciation) on investments ........................................... 3,551,773
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... (6,230)
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 13,635,158
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $25,857,473
===========
See Notes to Financial Statements
59
PHOENIX-GOODWIN MULTI-SECTOR FIXED INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ............................................................. $ 12,222,315 $ 12,342,596
Net realized gain (loss) ................................................................. 10,089,615 (6,443,483)
Net change in unrealized appreciation (depreciation) ..................................... 3,545,543 10,809,599
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .............................. 25,857,473 16,708,712
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .................................................................... (12,723,194) (12,522,750)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ................................ (12,723,194) (12,522,750)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (5,555,330 and 5,747,814 shares, respectively) ............. 50,501,423 49,403,636
Net asset value of shares issued from reinvestment of distributions
(1,398,175 and 1,471,035 shares, respectively) ........................................... 12,723,194 12,522,750
Cost of shares repurchased (6,251,666 and 6,328,421 shares, respectively) ................ (56,846,744) (54,351,251)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ................................ 6,377,873 7,575,135
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .................................................... 19,512,152 11,761,097
NET ASSETS
Beginning of period ...................................................................... 178,990,287 167,229,190
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $755,101 AND $1,160,486,
RESPECTIVELY) .......................................................................... $198,502,439 $178,990,287
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
2003 2002 2001(4) 2000 1999
------ ------ ------- ------ ------
Net asset value, beginning of period ................................. $ 8.76 $ 8.55 $ 8.75 $ 8.92 $ 9.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ....................................... 0.59 0.61 0.72(3) 0.75 0.73
Net realized and unrealized gain (loss) ............................ 0.65 0.22 (0.21) (0.19) (0.24)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................. 1.24 0.83 0.51 0.56 0.49
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ............................... (0.61) (0.62) (0.71) (0.73) (0.75)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .............................................. (0.61) (0.62) (0.71) (0.73) (0.75)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ............................................ 0.63 0.21 (0.20) (0.17) (0.26)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ....................................... $ 9.39 $ 8.76 $ 8.55 $ 8.75 $ 8.92
====== ====== ====== ====== ======
Total return ......................................................... 14.58% 10.00% 6.09% 6.47% 5.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ................................ $198,502 $178,990 $167,229 $160,101 $172,836
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) ............................................. 0.74%(2) 0.69%(2) 0.65%(2) 0.65% 0.65%
Net investment income .............................................. 6.41% 7.05% 8.14% 8.45% 7.79%
Portfolio turnover ................................................... 156% 168% 188% 148% 125%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 0.71%, 0.69% and 0.71% for the periods ended December 31, 2001, 2000 and 1999, respectively.
(2) 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) Computed using average shares outstanding.
(4) As required, effective January 1, 2001, the Fund has adopted the provisions of AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities and including paydown gains and losses in interest income. The
effect of this change for the year ended December 31, 2001, was to increase the ratio of net investment income to average net
assets from 8.13% to 8.14%. There was no effect to net investment income per share and net realized and unrealized gain (loss)
per share. Per share ratios and supplemental data for prior periods have not been restated to reflect this change.
</FN>
See Notes to Financial Statements
60
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment primary objective is high current income while
attempting to limit changes in the series' net asset value per share caused by
interest rate changes.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Since its inception on June 2, 2003 through December 31, 2003, the series
returned 2.96%. For the same period, the Lehman Brothers Aggregate Bond Index 2
returned 0.18%. For the period from June 30, 2003 through December 31, 2003, the
Merrill Lynch Medium Quality Corporate Short-Term Bond Index 1 returned 1.44%.
All performance figures assume reinvestment of distributions. Past performance
is not indicative of future results and current performance may be higher or
lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: During a period where we saw near-record and, at times, record interest rate
lows, the second half of the fund's fiscal year brought substantial volatility,
as investors assessed the direction of the U.S. economy and debated what action,
if any, the Federal Reserve Board would take. The volatility was somewhat hidden
by the slight change of -0.15% registered by the Lehman Aggregate Bond Index for
the third quarter of 2003. Rates increased slightly, while the yield curve
remained steep, reinforcing expectations in the bond market that the economy
would improve.
Many economic statistics improved over this time period, but a job market
recovery remained elusive. The ISM Manufacturing Index 3 rose to 54.7 in August,
showing improvement for the fourth straight month and remaining above 50 for the
second month in a row. Any reading above 50 normally signifies expansion in the
manufacturing sector.
Despite positive overall economic data, debate continued over whether
persistent high unemployment would derail the economic recovery or if hiring
would begin to gain momentum.
Within the fixed income market, emerging markets and high yield began 2003
as top performing bond sectors. Through the fund's fiscal year end, both
emerging markets and high yield showed continued strength joining non-dollar as
top performing sectors. Excluding high yield and emerging markets, returns were
relatively flat for third quarter 2003. U.S. Treasuries were one of the worst
performing sectors, giving back some of their gains for the first two quarters
of the year.
Q: HOW DID THE SERIES PERFORM IN THIS ENVIRONMENT?
A: The series performed well, aided by two factors -- its short duration and its
investment in spread sectors. The series' shorter duration in the prevailing
interest rate environment helped to limit its volatility. The series' use of
non-treasury sectors provided an attractive source of income to the series.
Sectors that continued to help the portfolio into the final months of the fiscal
year included corporate investment grade, corporate high yield, non-dollar, and
emerging markets. However, the series' performance versus the benchmark was
negatively impacted by its investments in non-agency mortgage-backed securities.
Q: WHAT IS YOUR OUTLOOK FOR THE COMING YEAR?
A: We continue to be opportunistic and have taken some more credit risk in the
series due to improved credit fundamentals in the corporate and credit high
yield market. The series continues to be well diversified with 105 positions and
eleven different fixed income sectors. Once again, we feel that the greatest
risk in the fixed income market is interest rate risk, not credit risk, and
opportunities continue in many credit-intensive sectors.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Merrill Lynch Medium Quality Corporate Short-Term Bond Index measures
broad bond market total-return performance.
2 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total-return performance.
3 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
61
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
6/2/03 TO
12/31/03
- --------------------------------------------------------------------------------
Multi-Sector Short Term Bond Series 2.96%
- --------------------------------------------------------------------------------
Merrill Lynch Medium Quality Corporate Short-Term Bond Index 1 Note 4
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 2 0.18%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 6/2/03 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Multi-Sector Short Term Merrill Lynch Medium Quality Corporate Lehman Brothers Aggregate
Bond Series Short-Term Bond Index 1 Bond Index 2
6/2/03 $10,000 $10,000 $10,000
12/31/03 $10,296 $10,144 $10,018
1 The Merrill Lynch Medium Quality Corporate Short-Term Bond Index measures
broad bond market total-return performance.
2 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total-return performance.
3 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
4 Index performance is 1.44% for the period June 30, 2003 to December 31, 2003.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
62
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
AGENCY MORTGAGE-BACKED SECURITIES--4.2%
Fannie Mae 5%, 2/1/18 ................... Aaa $241 $ 246,287
Fannie Mae 4.50%, 5/1/18 ................ Aaa 178 178,507
Fannie Mae 5.50%, 7/1/33 ................ Aaa 461 467,282
-----------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $909,077) ................................. 892,076
-----------
AGENCY NON MORTGAGE-BACKED SECURITIES--1.2%
Fannie Mae 5.25%, 1/15/09 ............... Aaa 250 269,061
-----------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(Identified cost $269,342) ................................. 269,061
-----------
MUNICIPAL BONDS--2.5%
CALIFORNIA--2.5%
Sonoma County Pension Obligation Revenue
Taxable Series A 2.43%, 12/1/06 ....... Aaa 250 248,815
Ventura County Pension Obligation Taxable
6.58%, 11/1/06 ........................ Aaa 250 277,158
-----------
TOTAL MUNICIPAL BONDS
(Identified cost $528,777) ................................. 525,973
-----------
ASSET-BACKED SECURITIES--6.1%
ABN AMRO Mortgage Corp. 02-9, A3 5.75%,
12/25/32 .............................. Aaa 340 347,727
AmeriCredit Automobile Receivables Trust
01-D, A4 4.41%, 11/12/08 .............. Aaa 200 206,126
Ford Credit Auto Owner Trust 02-B, A4
4.75%, 8/15/06 ........................ Aaa 150 155,736
Morgan Stanley ABS Capital 03-NC8N
7.60%, 9/25/33 ........................ A(c) 198 198,496
Residential Asset Mortgage Products, Inc.
03-RS6, AI3 3.08%, 12/25/28 ........... Aaa 250 248,356
World Omni Auto Receivables Trust 02-A,
A4 4.05%, 7/15/09 ..................... Aaa 150 154,831
-----------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $1,323,342) ............................... 1,311,272
-----------
CORPORATE BONDS--41.5%
AUTO PARTS & EQUIPMENT--1.2%
Delphi Corp. 6.50%, 8/15/13 ............. Baa 250 262,540
-----------
AUTOMOBILE MANUFACTURERS--1.6%
DaimlerChrysler NA Holdings Corp. 4.05%,
6/4/08 ................................ A 350 347,617
-----------
CASINOS & GAMING--1.0%
Harrah's Operating Co., Inc. 7.875%,
12/15/05 .............................. Ba 200 218,000
-----------
CONSUMER FINANCE--3.4%
Capital One Bank 4.25%, 12/1/08 ......... Baa 250 248,916
Ford Motor Credit Co. 7.25%, 10/25/11 ... A 250 271,141
MBNA Corp. 4.625%, 9/15/08 .............. Baa 200 205,265
-----------
725,322
-----------
DISTILLERS & VINTNERS--1.0%
Constellation Brands, Inc. Series B 8%,
2/15/08 ............................... Ba 200 223,000
-----------
DIVERSIFIED CHEMICALS--1.2%
ISP Holdings, Inc. Series B 10.625%,
12/15/09 .............................. B 225 248,625
-----------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
DIVERSIFIED COMMERCIAL SERVICES--1.7%
International Lease Finance Corp. 4.50%,
5/1/08 ................................ A $350 $ 361,439
-----------
ELECTRIC UTILITIES--4.3%
Commonwealth Edison Series 102 4.74%,
8/15/10 ............................... A 100 102,233
Consumers Energy Co. 144A 4.80%,
2/17/09 (b) ........................... Baa 200 203,528
Entergy Gulf States, Inc. 144A 3.60%,
6/1/08 (b) ............................ Baa 200 192,784
Public Service Co. of Colorado 4.375%,
10/1/08 ............................... Baa 200 205,207
TXU Corp. Series J 6.375%, 6/15/06 ...... Ba 200 211,500
-----------
915,252
-----------
ENVIRONMENTAL SERVICES--1.0%
Allied Waste North America Series B 8.50%,
12/1/08 ............................... Ba 200 223,500
-----------
FOOD RETAIL--1.7%
Delhaize America, Inc. 7.375%, 4/15/06 .. Ba 100 108,000
Safeway, Inc. 4.125%, 11/1/08 ........... Baa 250 248,905
-----------
356,905
-----------
HEALTH CARE FACILITIES--4.1%
Service Corporation International 7.20%,
6/1/06 ................................ B 300 313,500
Tenet Healthcare Corp. 5.375%, 11/15/06 . Baa 350 346,500
Triad Hospitals, Inc. Series B 8.75%,
5/1/09 ................................ B 200 217,750
-----------
877,750
-----------
HOTELS, RESORTS & CRUISE LINES--1.3%
Hilton Hotels Corp. 7.625%, 5/15/08 ..... Ba 250 278,125
-----------
INDUSTRIAL CONGLOMERATES--1.2%
Tyco International Group SA 6.375%,
2/15/06 ............................... Ba 250 266,250
-----------
INTEGRATED TELECOMMUNICATION SERVICES--3.7%
AT&T Wireless Services, Inc. 7.875%,
3/1/11 ................................ Baa 100 115,715
Sprint Capital Corp. 6.375%, 5/1/09 ..... Baa 250 267,183
Verizon Communications Corp. 7.51%,
4/1/09 ................................ A 350 402,584
-----------
785,482
-----------
INVESTMENT BANKING & BROKERAGE--4.3%
Credit Suisse First Boston USA, Inc.
4.625%, 1/15/08 ....................... Aa 350 364,351
Goldman Sachs Group, Inc. Series MTNB
4.125%, 1/15/08 ....................... Aa 150 153,795
Lehman Brothers Holdings, Inc. 4.375%,
11/30/10 .............................. A 250 249,903
Merrill Lynch & Co., Inc. Series MTNB
3.375%, 9/14/07 ....................... Aa 150 151,938
-----------
919,987
-----------
MOVIES & ENTERTAINMENT--1.3%
Time Warner, Inc. 6.125%, 4/15/06 ....... Baa 250 269,132
-----------
MULTI-LINE INSURANCE--0.9%
ASIF Global Financing XXIII 144A 3.90%,
10/22/08 (b) .......................... Aaa 200 201,856
-----------
See Notes to Financial Statements
63
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
OIL & GAS EXPLORATION & PRODUCTION--1.0%
Chesapeake Energy Corp. 144A 6.875%,
1/15/16 (b) ........................... Ba $200 $ 207,000
-----------
PACKAGED FOODS & MEATS--0.5%
PPC Escrow Corp. 144A 9.25%, 11/15/13 (b) B 100 104,000
-----------
PAPER PACKAGING--1.2%
Packaging Corporation of America 144A
4.375%, 8/1/08 (b) .................... B 250 250,249
-----------
PUBLISHING & PRINTING--0.5%
Dex Media West LLC/Dex Media Finance Co.
144A 8.50%, 8/15/10 (b) ............... B 100 111,380
-----------
REGIONAL BANKS--1.2%
Popular North America, Inc. 3.875%,
10/1/08 ............................... A 250 249,532
-----------
SPECIALIZED FINANCE--1.2%
CIT Group, Inc. 4.75%, 12/15/10 ......... A 250 251,565
-----------
SPECIALTY STORES--0.3%
Toys "R" Us, Inc. 6.875%, 8/1/06 ........ Baa 50 53,248
-----------
TOBACCO--0.7%
Altria Group, Inc. 5.625%, 11/4/08 ...... Baa 150 153,876
-----------
TOTAL CORPORATE BONDS
(Identified cost $8,759,093) ............................... 8,861,632
-----------
NON-AGENCY MORTGAGE-BACKED SECURITIES--15.5%
Bear Stearns Structured Products Inc.
03-2, A P.O. 0%, 6/25/29 .............. Baa 128 118,319
CS First Boston Mortgage Securities Corp.
97-C2, A3 6.55%, 1/17/35 .............. Aaa 250 276,519
CS First Boston Mortgage Securities Corp.
01-CK1, A2 6.25%, 12/16/35 ............ Aaa 250 274,456
CS First Boston Mortgage Securities
Corp. 03-8, 3A24 5.50%, 4/25/33 ....... Aaa 290 287,728
DLJ Mortgage Acceptance Corp. 97-CF2, A2
6.84%, 10/15/30 ....................... Aa 250 274,712
GMAC Commercial Mortgage Securities, Inc.
99-C1, B 6.295%, 5/15/33 .............. AA(c) 250 277,066
GMAC Mortgage Corporation Loan Trust
03-GM2, A2 3.69%, 7/25/20 ............. Aaa 250 251,289
J.P. Morgan Chase Commercial Mortgage
Securities Corp. 01-CIBC, A3 6.26%,
3/15/33 ............................... AAA(c) 250 275,725
Merrill Lynch Mortgage Investors, Inc.
96-C1, C 7.42%, 4/25/28 ............... AA(c) 100 108,619
Norwest Asset Securities Corp. 98-22, B5
6.25%, 9/25/28 ........................ BBB(c) 212 211,946
Sasco Net Interest Margin Trust
03-18XS, A 7.50%, 5/28/33 ............. A 141 140,895
Sasco Net Interest Margin Trust
03-25XS, A 7.25%, 8/28/33 ............. A 196 194,707
Sasco Net Interest Margin Trust
03-28XS, A 7.50%, 9/28/33 ............. A 94 93,706
Sasco Net Interest Margin Trust
03-36XS, A 7.50%, 11/25/33 ............ A 191 190,810
Starwood Commercial Mortgage Trust
99-C1A, A1 6.60%, 2/3/14 .............. Aaa 302 328,282
-----------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $3,361,671) ............................... 3,304,779
-----------
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
FOREIGN GOVERNMENT SECURITIES--14.2%
BRAZIL--3.6%
Federative Republic of Brazil 10%,
1/16/07 ............................... B $100 $ 112,500
Federative Republic of Brazil 11.50%,
3/12/08 ............................... B 50 58,250
Federative Republic of Brazil 8%, 4/15/14 B 616 606,469
-----------
777,219
-----------
BULGARIA--0.9%
Republic of Bulgaria Series IAB PDI
1.938%, 7/28/11 (d) ................... Ba 190 187,150
-----------
CHILE--0.5%
Republic of Chile 5.50%, 1/15/13 ........ Baa 100 102,850
-----------
COLOMBIA--1.2%
Republic of Colombia 8.625%, 4/1/08 ..... Ba 100 108,500
Republic of Colombia Series EMTN 11.375%,
1/31/08 ............................... Ba 100 (e) 144,425
-----------
252,925
-----------
LITHUANIA--1.0%
Republic of Lithuania 6.625%, 2/20/08 ... Baa 150 (e) 210,346
-----------
MEXICO--0.9%
United Mexican States 4.625%, 10/8/08 ... Baa 200 202,500
-----------
NEW ZEALAND--1.2%
Government of New Zealand Series 205
6.50%, 2/15/05 ........................ Aaa 400 (f) 265,444
-----------
PHILIPPINES--0.5%
Republic of the Philippines 8.375%,
3/12/09 ............................... Ba 100 105,875
-----------
RUSSIA--0.4%
Ministry Finance of Russia Series V 3%,
5/14/08 ............................... B 100 90,125
-----------
SLOVAKIA--1.1%
Slovak Republic 7.375%, 4/14/10 ......... A 150 (e) 224,300
-----------
TURKEY--1.1%
Republic of Turkey 10.50%, 1/13/08 ...... B 200 236,000
-----------
UKRAINE--1.0%
Government of Ukraine RegS 11%, 3/15/07 . B 196 218,052
-----------
VENEZUELA--0.8%
Republic of Venezuela 5.375%, 8/7/10 .... Caa 200 164,868
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $2,898,927) ............................... 3,037,654
-----------
FOREIGN CORPORATE BONDS--11.2%
AUSTRALIA--1.3%
European Investment Bank Series MTN 6%,
7/15/05 ............................... Aaa 350 (g) 265,567
-----------
BERMUDA--0.9%
Oil Insurance Ltd. 144A 5.15%,
8/15/33 (b) ........................... A 200 201,376
-----------
BRAZIL--0.5%
Petrobras International Finance Co.
9.125%, 7/2/13 ........................ Ba 100 110,000
-----------
CANADA--1.5%
Abitibi-Consolidated, Inc. 6.95%,
12/15/06 .............................. Ba 200 209,563
Thomson Corp. (The) 4.25%, 8/15/09 ...... A 100 100,961
-----------
310,524
-----------
FRANCE--1.9%
France Telecom 9%, 3/1/11 ............... Baa 250 300,270
Vivendi Universal SA 144A 6.25%,
7/15/08 (b) ........................... B 100 105,500
-----------
405,770
-----------
See Notes to Financial Statements
64
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
MOODY'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
HONG KONG--1.2%
Hutchison Whampoa International Ltd. 144A
5.45%, 11/24/10 (b) ................... A $250 $ 253,577
-----------
ITALY--1.2%
Telecom Italia Capital SA 144A 4%,
11/15/08 (b) .......................... Baa 250 251,582
-----------
NETHERLANDS--1.3%
Kazkommerts International BV 144A
10.125%, 5/8/07 (b) ................... Baa 250 282,500
-----------
UNITED KINGDOM--1.4%
British Telecom plc 8.375%, 12/15/10 .... Baa 250 304,219
-----------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $2,329,057) ............................... 2,385,115
-----------
TOTAL INVESTMENTS--96.4%
(Identified cost $20,379,286) .............................. 20,587,562(a)
Other assets and liabilities, net--3.6% .................... 760,474
-----------
NET ASSETS--100.0% ........................................... $21,348,036
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $343,621 and gross
depreciation of $136,840 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$20,380,781.
(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 December 31,
2003, these securities amounted to a value of $2,365,332 or 11.1% of net
assets.
(c) As rated by Standard & Poors or Fitch.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Par value represents Euro.
(f) Par value represents New Zealand Dollar.
(g) Par value represents Australian Dollar.
See Notes to Financial Statements
65
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $20,379,286) ............................................ $20,587,562
Cash .................................................................................................... 467,532
Receivables
Interest .............................................................................................. 257,607
Fund shares sold ...................................................................................... 45,131
Investment securities sold ............................................................................ 36,563
Prepaid expenses ........................................................................................ 164
-----------
Total assets ........................................................................................ 21,394,559
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 875
Professional fee ...................................................................................... 17,518
Investment advisory fee ............................................................................... 9,931
Printing fee .......................................................................................... 5,453
Financial agent fee ................................................................................... 4,208
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 1,353
Accrued expenses ........................................................................................ 4,825
-----------
Total liabilities ................................................................................... 46,523
-----------
NET ASSETS .............................................................................................. $21,348,036
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $21,170,945
Distributions in excess of net investment income ...................................................... (3,392)
Accumulated net realized loss ......................................................................... (31,095)
Net unrealized appreciation ........................................................................... 211,578
-----------
NET ASSETS .............................................................................................. $21,348,036
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 2,123,909
===========
Net asset value and offering price per share ............................................................ $10.05
======
STATEMENT OF OPERATIONS
FROM INCEPTION JUNE 2, 2003 TO DECEMBER 31, 2003
INVESTMENT INCOME
Interest ...................................................................................................... $ 448,094
---------
Total investment income ..................................................................................... 448,094
---------
EXPENSES
Investment advisory fee ....................................................................................... 43,925
Financial agent fee ........................................................................................... 27,661
Administration fee ............................................................................................ 6,764
Professional .................................................................................................. 19,052
Printing ...................................................................................................... 18,157
Custodian ..................................................................................................... 6,373
Trustees ...................................................................................................... 3,754
Miscellaneous ................................................................................................. 9,759
---------
Total expenses .............................................................................................. 135,445
Less expenses borne by investment adviser ................................................................... (117,579)
Custodian fees paid indirectly .............................................................................. (296)
---------
Net expenses ................................................................................................ 17,570
---------
NET INVESTMENT INCOME ........................................................................................... 430,524
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ............................................................................... (23,456)
Net realized loss on foreign currency transactions ............................................................ (11,980)
Net change in unrealized appreciation (depreciation) on investments ........................................... 208,276
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 3,302
---------
NET GAIN ON INVESTMENTS ......................................................................................... 176,142
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $ 606,666
=========
See Notes to Financial Statements
66
PHOENIX-GOODWIN MULTI-SECTOR SHORT TERM BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
6/2/03 TO
12/31/03
--------------
FROM OPERATIONS
Net investment income (loss) .......................................................................... $ 430,524
Net realized gain (loss) .............................................................................. (35,436)
Net change in unrealized appreciation (depreciation) .................................................. 211,578
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................................... 606,666
-----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................................................................................. (434,567)
-----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ............................................. (434,567)
-----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,295,193 shares) ...................................................... 22,896,056
Net asset value of shares issued from reinvestment of distributions (43,418 shares) ................... 434,567
Cost of shares repurchased (214,702 shares) ........................................................... (2,154,686)
-----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ............................................. 21,175,937
-----------
NET INCREASE (DECREASE) IN NET ASSETS ................................................................. 21,348,036
NET ASSETS
Beginning of period ................................................................................... --
-----------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF ($3,392)) ................ $21,348,036
===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
6/2/03 TO
12/31/03
--------------
Net asset value, beginning of period ........................ $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .............................. 0.24
Net realized and unrealized gain (loss) ................... 0.05
------
TOTAL FROM INVESTMENT OPERATIONS ........................ 0.29
------
LESS DISTRIBUTIONS
Dividends from net investment income ...................... (0.24)
------
TOTAL DISTRIBUTIONS ..................................... (0.24)
------
CHANGE IN NET ASSET VALUE ................................... 0.05
------
NET ASSET VALUE, END OF PERIOD .............................. $10.05
======
Total return ................................................ 2.96% (4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ....................... $21,348
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) .................................... 0.20% (2)(3)
Net investment income ..................................... 4.90% (3)
Portfolio turnover .......................................... 50% (4)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.54% for
the period ended December 31, 2003.
(2) 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) Annualized.
(4) Not annualized.
See Notes to Financial Statements
67
PHOENIX-JANUS FLEXIBLE INCOME SERIES
A DISCUSSION WITH THE SERIES PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks maximum total return consistent with preservation of
capital.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the 12 months ended December 31, 2003, the series advanced 6.39%.
Meanwhile, the Lehman Brothers Government/Credit Bond Index 1 returned 4.66% and
the Lehman Brothers Aggregate Bond Index 2 gained 4.10%. All performance figures
assume reinvestment of distributions and exclude the effect of sales charges.
Past performance is not indicative of future results and current performance may
be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE LAST 12 MONTHS?
A: After outpacing stocks for three consecutive years, U.S. Treasury securities
reversed course in 2003. However, the road was a bumpy one as Treasury yields
fluctuated with the headline news and fortunes of the stock market. Time and
again, investors fled Treasuries when better-than-expected economic reports
lifted equities and pressured Treasury prices only to return when disappointing
economic data and, early in the period, fears of a protracted military campaign
in Iraq, caused them to abandon stocks and seek refuge in the Treasury market.
As the conflict cooled in the spring, investors turned their full attention to
the economy, where evidence of a rebound was mounting. Meanwhile, in a bid to
support the nascent economic recovery, the Federal Reserve cut short-term
interest rates twice during the fiscal year, the last time to a 45-year low of
1%. Central bankers also indicated they had the flexibility necessary to keep
rates low for the foreseeable future, which further buoyed bond market
sentiment. Many corporations took advantage of the low-interest-rate environment
to refinance their debt, streamline their balance sheets and reduce their
borrowing costs. This, together with Treasury yields that in June hit all-time
lows, helped corporate bonds rally as investors sought better returns and
greater upside beyond the Treasury market. Likewise, high-yield bonds showed
renewed vigor, bolstered by a brighter economic outlook, improving corporate
profits and a rejuvenated stock market. As the fiscal year came to a close, an
economy on the mend and investors' increased appetite for risk favored corporate
and high-yield bonds, while Treasury yields trended higher against the backdrop
of an ailing U.S. dollar and expanding federal deficit.
Q: HOW DID YOU MANAGE THE PORTFOLIO IN THIS ENVIRONMENT?
A: In anticipation of a strengthening economy and higher interest rates, we
maintained a shorter overall duration than our benchmark, the Lehman Brothers
Government/Credit Bond Index. This relatively conservative stance proved to be
the right choice as Treasury yields rose at all but the shortest maturities
along the yield curve in response to a steady improvement in economic
fundamentals. Our exposure to corporate bonds also worked to our advantage as
the strengthening economy put corporate borrowers in a better position to repay
their debt. That allowed corporate spreads to tighten and also aided
performance.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: Among our top contributors was British Sky Broadcasting. The company is the
largest satellite TV provider in the U.K. and Ireland and has been rapidly
growing its subscriber base. Elsewhere, cable television provider Comcast was
also a top performer. The integration of AT&T Broadband's systems has progressed
seamlessly. Meanwhile, Comcast has continued to successfully grow its existing
business while divesting non-core assets to pay down debt. Finally,
Minneapolis-based utility Xcel Energy also performed well. The company had
suffered from its involvement with merchant power producer NRG. Our Xcel
mortgage bonds rose sharply as Xcel put its problems behind it, and we were
confident enough in the company to purchase unsecured Xcel debt as the recovery
progressed.
Major detractors from performance included our exposure to Treasuries and
agency debt issued by the Federal Home Loan Mortgage Corporation, or Freddie
Mac. These securities were substantial contributors early in the year but
declined sharply between June and December as interest rates rose. Meanwhile, we
also suffered a setback in Coastal Corp., an oil and gas pipeline company and
refiner. Finally, several individual corporate bonds within the portfolio were
held during the period when rates rose most sharply, causing them to appear as
big detractors from performance despite the fact that very little happened on
the credit front to cause them to decline. Examples include Pitney-Bowes, a
maker of office equipment and document management systems. We bought these bonds
at the end of April and sold them in early August, a period that saw yields on
the 10-year treasury note rise by more than 35 basis points.
68
PHOENIX-JANUS FLEXIBLE INCOME SERIES
Q: HOW WILL YOU MANAGE THE PORTFOLIO IN THE MONTHS AHEAD?
A: The recovery in corporate bond spreads that has taken place over the last
year is nothing short of incredible. While that may mean the easy money has
already been made, investors able to make tough valuation decisions can
potentially still prosper in such an environment. We believe seeing through
uncertainty to uncover a security's true value is what we do best, and we will
always strive to populate the portfolio with what we view as the best total
return ideas we can find. Toward that end, we will continue to use our flexible
mandate to its full advantage and expect our current preference for corporate
bonds over lower-yielding alternatives such as Treasuries to continue in 2004.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
12/15/99 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Flexible Income Series 6.39% 7.57%
- --------------------------------------------------------------------------------
Lehman Brothers Government/Credit Bond Index 1 4.66% 8.71%
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 2 4.10% 8.34%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/15/99 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Flexible Lehman Brothers Lehman Brothers
Income Series Government/Credit Bond Index 1 Aggregate Bond Index 2
12/15/99 $10,000 $10,000 $10,000
12/31/99 $10,002 $ 9,942 $ 9,953
12/29/00 $10,645 $11,120 $11,110
12/31/01 $11,416 $12,065 $12,048
12/31/02 $12,628 $13,397 $13,284
12/31/03 $13,434 $14,021 $13,829
1 The Lehman Brothers Government/Credit Bond Index measures government and
corporate broad bond market total return performance.
2 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total return performance and is provided for
general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
69
PHOENIX-JANUS FLEXIBLE INCOME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
U.S. GOVERNMENT SECURITIES--20.0%
U.S. TREASURY BONDS--3.6%
U.S. Treasury Bond 7.25%, 5/15/16 ......... AAA $ 425 $ 530,171
U.S. Treasury Bond 7.25%, 8/15/22 ......... AAA 180 227,173
U.S. Treasury Bond 5.375%, 2/15/31 ........ AAA 990 1,032,423
-----------
1,789,767
-----------
U.S. TREASURY NOTES--16.4%
U.S. Treasury Note 1.625%, 9/30/05 ........ AAA 290 289,887
U.S. Treasury Note 5.75%, 11/15/05 ........ AAA 382 410,143
U.S. Treasury Note 2.625%, 11/15/06 ....... AAA 2,065 2,083,230
U.S. Treasury Note 4.375%, 5/15/07 ........ AAA 474 501,940
U.S. Treasury Note 3.375%, 11/15/08 ....... AAA 1,087 1,095,620
U.S. Treasury Note 6%, 8/15/09 ............ AAA 264 299,031
U.S. Treasury Note 5.75%, 8/15/10 ......... AAA 620 695,175
U.S. Treasury Note 5%, 2/15/11 ............ AAA 230 247,007
U.S. Treasury Inflationary Note 3%,
7/15/12 (i) ............................. AAA 1,170 1,312,421
U.S. Treasury Note 4.25%, 11/15/13 ........ AAA 1,220 1,218,665
-----------
8,153,119
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(Identified cost $9,807,122) ................................ 9,942,886
-----------
AGENCY NON MORTGAGE-BACKED SECURITIES--8.6%
Fannie Mae 2.875%, 10/15/05 ............... AAA 1,880 1,914,774
Fannie Mae 3.25%, 11/15/07 ................ AAA 515 518,261
Fannie Mae 5.25%, 1/15/09 ................. AAA 538 579,018
Fannie Mae 6.25%, 2/1/11 .................. AA- 800 884,363
Fannie Mae 4.375%, 9/15/12 ................ AAA 220 217,659
Fannie Mae 4.625%, 5/1/13 ................. AA- 175 170,313
-----------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(Identified cost $4,231,312) ................................ 4,284,388
-----------
CORPORATE BONDS--60.1%
AEROSPACE & DEFENSE--0.7%
Precision Castparts Corp. 144A 5.60%,
12/15/13 (b) ............................ BBB- 150 150,900
Raytheon Co. 6.50%, 7/15/05 ............... BBB- 200 213,135
-----------
364,035
-----------
AGRICULTURAL PRODUCTS--0.1%
Bunge Ltd. Finance Corp. 144A 4.375%,
12/15/08 (b) ............................ BBB 50 50,295
-----------
AIRLINES--0.2%
Continental Airlines, Inc. Series 974C
6.80%, 7/2/07 ........................... BB- 55 54,064
Continental Airlines, Inc. Series A 7.875%,
7/2/18 .................................. BBB 25 25,147
-----------
79,211
-----------
APPAREL RETAIL--0.1%
Gap, Inc. (The) 6.90%, 9/15/07 ............ BB+ 50 55,437
-----------
ASSET MANAGEMENT & CUSTODY BANKS--0.9%
Bank of New York Co., Inc. (The) Series
MTNE 2.20%, 5/12/06 ..................... A+ 180 180,482
Franklin Resources, Inc. 3.70%, 4/15/08 ... A 125 124,322
Mellon Funding Corp. 5%, 12/1/14 .......... A 150 150,378
-----------
455,182
-----------
AUTO PARTS & EQUIPMENT--0.3%
TRW Automotive, Inc. 10.125%, 2/15/13 ..... B+ 100(g) 144,425
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
AUTOMOBILE MANUFACTURERS--0.2%
General Motors Corp. 7.125%, 7/15/13 ...... BBB $ 75 $ 82,250
-----------
BREWERS--0.9%
Anheuser-Busch Cos., Inc. 5.95%, 1/15/33 .. A+ 100 102,662
Coors Brewing Co. 6.375%, 5/15/12 ......... BBB+ 235 256,000
Miller Brewing Co. 144A 5.50%, 8/15/13 (b) BBB+ 100 102,164
-----------
460,826
-----------
BROADCASTING & CABLE TV--4.1%
Clear Channel Communications, Inc. 6%,
11/1/06 ................................. BBB- 21 22,701
Comcast Corp. 6.375%, 1/30/06 ............. BBB 300 322,964
Comcast Corp. 5.85%, 1/15/10 .............. BBB 150 160,157
Comcast Corp. 5.50%, 3/15/11 .............. BBB 225 233,870
Cox Communications, Inc. 6.875%, 6/15/05 .. BBB 300 320,835
Cox Communications, Inc. 7.125%, 10/1/12 .. BBB 20 23,068
Echostar DBS Corp. 9.125%, 1/15/09 ........ BB- 133 149,459
EchoStar DBS Corp. 144A 5.75%, 10/1/08 (b) BB- 125 127,031
Tele-Communications, Inc. 7.875%, 8/1/13 .. BBB 225 266,332
Univision Communications, Inc. 3.50%,
10/15/07 ................................ BBB- 75 75,384
Univision Communications, Inc. 3.875%,
10/15/08 ................................ BBB- 175 173,150
Xm Satellite Radio, Inc. 12%, 6/15/10 ..... CCC+ 125 141,875
-----------
2,016,826
-----------
CATALOG RETAIL--0.4%
InterActiveCorp 7%, 1/15/13 ............... BBB- 200 220,516
-----------
COMPUTER HARDWARE--1.4%
Apple Computer, Inc. 6.50%, 2/15/04 ....... BB 288 289,440
International Business Machines Corp. .....
4.25%, 9/15/09 .......................... A+ 50 51,293
International Business Machines Corp. .....
5.875%, 11/29/32 ........................ A+ 150 150,927
International Business Machines Corp. .....
Series MTN 2.375%, 11/1/06 .............. A+ 225 224,547
-----------
716,207
-----------
CONSUMER FINANCE--6.2%
Capital One Bank 5.75%, 9/15/10 ........... BBB- 125 132,229
Caterpillar Financial Services Corp. Series
MTNF 2.35%, 9/15/06 ..................... A 200 198,951
Ford Motor Credit Co. 5.75%, 2/23/04 ...... BBB- 400 402,397
Ford Motor Credit Co. 5.625%, 10/1/08 ..... BBB- 50 51,330
Ford Motor Credit Co. 7%, 10/1/13 ......... BBB- 75 79,101
General Electric Capital Corp. Series MTNA
2.85%, 1/30/06 .......................... AAA 500 507,151
General Electric Capital Corp. Series MTNA
6%, 6/15/12 ............................. AAA 120 130,134
General Motors Acceptance Corp. 4.50%,
7/15/06 ................................. BBB 500 514,381
General Motors Acceptance Corp. 5.85%,
1/14/09 ................................. BBB 125 132,373
General Motors Acceptance Corp. 6.875%,
9/15/11 ................................. BBB 75 80,785
Household Finance Corp. 4.625%, 1/15/08 ... A 150 155,929
Household Finance Corp. Series MTN
3.375%, 2/21/06 ......................... A 125 127,850
PHH Corp. 6%, 3/1/08 ...................... BBB+ 175 188,294
SLM Corp. 3.95%, 8/15/08 .................. A 250 252,472
SLM Corp. Series MTN 5.05%, 11/14/14 ...... A 125 123,503
-----------
3,076,880
-----------
See Notes to Financial Statements
70
PHOENIX-JANUS FLEXIBLE INCOME SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
DATA PROCESSING & OUTSOURCED SERVICES--0.1%
Fiserv, Inc. 4%, 4/15/08 .................. BBB+ $ 75 $ 74,647
-----------
DEPARTMENT STORES--0.4%
Penney (J.C.) Co., Inc. 6%, 5/1/06 ........ BB+ 145 147,175
Saks, Inc. 8.25%, 11/15/08 ................ BB 50 55,750
-----------
202,925
-----------
DISTILLERS & VINTNERS--0.3%
Brown-Forman Corp. 2.125%, 3/15/06 ........ A 150 149,582
-----------
DIVERSIFIED BANKS--0.4%
US Bancorp Series MTN 2.75%, 3/30/06 ...... A+ 175 177,155
-----------
DIVERSIFIED CHEMICALS--0.1%
Nalco Co. 144A 7.75%, 11/15/11 (b) ........ B 50 53,750
-----------
DIVERSIFIED COMMERCIAL SERVICES--1.1%
ARAMARK Services, Inc. 7%, 5/1/07 ......... BBB- 145 159,430
ARAMARK Services, Inc. 6.375%, 2/15/08 .... BBB- 110 117,354
Cendant Corp. 6.25%, 3/15/10 .............. BBB 175 190,302
Cintas Corp. No. 2 6%, 6/1/12 ............. A 75 81,268
-----------
548,354
-----------
DIVERSIFIED METALS & MINING--0.4%
Freeport-McMoRan Copper & Gold, Inc.
(Indonesia) 10.125%, 2/1/10 ............. B- 175 202,562
-----------
DRUG RETAIL--0.1%
Rite Aid Corp. 7.625%, 4/15/05 ............ B- 25 25,500
Rite Aid Corp. 7.125%, 1/15/07 ............ B- 25 25,625
-----------
51,125
-----------
ELECTRIC UTILITIES--6.1%
AmerenEnergy Generating Co. Series F
7.95%, 6/1/32 ........................... A- 40 48,186
Centerpoint Energy, Inc. 144A 5.875%,
6/1/08 (b) .............................. BBB- 125 130,219
Cinergy Corp. 6.25%, 9/1/04 ............... BBB 180 184,644
CMS Energy Corp. 7.625%, 11/15/04 ......... B+ 100 103,500
CMS Energy Corp. 7.50%, 1/15/09 ........... B+ 125 129,375
CMS Energy Corp. 144A 7.75%, 8/1/10 (b) ... B+ 100 105,625
Dominion Resources, Inc. 5%, 3/15/13 ...... BBB+ 175 174,185
Dominion Resources, Inc. Series D 5.125%,
12/15/09 ................................ BBB+ 100 104,379
MidAmerican Energy Holdings 3.50%,
5/15/08 ................................. BBB- 200 196,625
Northern States Power Co. 2.875%, 8/1/06 .. BBB+ 75 75,284
PSE&G Power LLC 5.50%, 12/1/15 ............ BBB 100 100,141
Public Service Co. of Colorado 7.875%,
10/1/12 ................................. BBB+ 200 242,740
Public Service Co. of Colorado Series 12
4.875%, 3/1/13 .......................... BBB+ 50 49,978
Public Service Co. of Colorado Series A
6.875%, 7/15/09 ......................... BBB- 25 28,115
Southern California Edison Co. 7.625%,
1/15/10 ................................. BBB- 100 115,500
Southwestern Public Service Co. Series B
5.125%, 11/1/06 (f) ..................... BBB 425 450,375
TXU Corp. Series C 6.375%, 1/1/08 ......... BBB- 250 263,125
TXU Corp. Series J 6.375%, 6/15/06 ........ BBB- 275 290,812
TXU Energy Co 7%, 3/15/13 ................. BBB 125 138,250
Xcel Energy, Inc. 3.40%, 7/1/08 ........... BBB- 100 97,658
-----------
3,028,716
-----------
ELECTRONIC MANUFACTURING SERVICES--0.1%
Jabil Circuit, Inc. 5.875%, 7/15/10 ....... BB+ 50 52,154
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
ENVIRONMENTAL SERVICES--2.1%
Allied Waste North America Series B 10%,
8/1/09 .................................. B+ $ 60 $ 65,100
Waste Management, Inc. 7%, 10/1/04 ........ BBB 500 517,438
Waste Management, Inc. 7.375%, 8/1/10 ..... BBB 380 439,101
-----------
1,021,639
-----------
FOOD RETAIL--0.3%
Safeway, Inc. 6.15%, 3/1/06 ............... BBB 105 112,349
Stater Brothers Holdings, Inc. 10.75%,
8/15/06 ................................. B- 50 52,937
-----------
165,286
-----------
GAS UTILITIES--0.6%
Centerpoint Energy Resources Corp. 6.50%,
2/1/08 .................................. BBB 50 53,564
Panhandle Eastern Pipe Line Co. 144A
4.80%, 8/15/08 (b) ...................... BBB 100 103,035
Southwest Gas Corp. 7.625%, 5/15/12 ....... BBB- 140 159,162
-----------
315,761
-----------
HEALTH CARE EQUIPMENT--0.2%
Mallinckrodt, Inc. 6.75%, 9/15/05 ......... BBB- 75 79,313
-----------
HEALTH CARE FACILITIES--2.8%
HCA, Inc. 6.91%, 6/15/05 .................. BBB- 355 373,946
HCA, Inc. 5.25%, 11/6/08 .................. BBB- 25 25,478
HCA, Inc. 6.95%, 5/1/12 ................... BBB- 135 144,749
HCA, Inc. 6.25%, 2/15/13 .................. BBB- 375 383,853
Manor Care, Inc. 6.25%, 5/1/13 ............ BBB 300 316,125
Service Corporation International 6%,
12/15/05 ................................ BB- 75 76,875
Vicar Operating, Inc. 9.875%, 12/1/09 ..... B- 60 66,900
-----------
1,387,926
-----------
HEALTH CARE SERVICES--1.1%
Fresenius Medical Capital Trust IV 7.875%,
6/15/11 ................................. BB- 25 27,125
Medco Health Solutions, Inc. 7.25%,
8/15/13 ................................. BBB 175 190,916
Quest Diagnostics, Inc. 6.75%, 7/12/06 .... BBB 250 273,210
Quest Diagnostics, Inc. 7.50%, 7/12/11 .... BBB 35 40,707
-----------
531,958
-----------
HOMEBUILDING--0.3%
K. Hovnanian Enterprises, Inc. 6.50%,
1/15/14 ................................. BB 75 75,094
Toll Brothers, Inc. 6.875%, 11/15/12 ...... BBB- 75 82,701
-----------
157,795
-----------
HOTELS, RESORTS & CRUISE LINES--0.9%
Hard Rock Hotel, Inc. 144A 8.875%,
6/1/13 (b) .............................. B 125 133,750
Starwood Hotels and Resorts 6.75%,
11/15/05 ................................ BB+ 300 316,500
-----------
450,250
-----------
HOUSEHOLD PRODUCTS--1.7%
Dial Corp. (The) 7%, 8/15/06 .............. BBB- 280 309,865
Dial Corp. (The) 6.50%, 9/15/08 ........... BBB- 300 335,581
Procter & Gamble Co. (The) 4.75%, 6/15/07 . AA- 195 206,426
-----------
851,872
-----------
HOUSEWARES & SPECIALTIES--0.1%
Newell Rubbermaid, Inc. 4%, 5/1/10 ........ BBB+ 50 48,378
-----------
HYPERMARKETS & SUPER CENTERS--0.9%
Wal-Mart Stores, Inc. 6.875%, 8/10/09 ..... AA 250 288,012
Wal-Mart Stores, Inc. 4.55%, 5/1/13 ....... AA 150 148,160
-----------
436,172
-----------
See Notes to Financial Statements
71
PHOENIX-JANUS FLEXIBLE INCOME SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
INDUSTRIAL MACHINERY--0.5%
Kennametal, Inc. 7.20%, 6/15/12 ........... BBB $ 225 $ 238,648
-----------
INTEGRATED OIL & GAS--1.7%
ChevronTexaco Capital Co. 3.50%, 9/17/07 .. AA 260 264,804
Conoco Funding Co. 5.45%, 10/15/06 ........ A- 340 364,785
Occidental Petroleum Corp. 5.875%, 1/15/07 BBB+ 130 141,034
Occidental Petroleum Corp. Series MTN
4.25%, 3/15/10 .......................... BBB+ 80 80,501
-----------
851,124
-----------
LIFE & HEALTH INSURANCE--2.0%
Americo Life, Inc. 144A 7.875%, 5/1/13 (b) BBB- 250 249,375
Nationwide Financial Services, Inc. 5.625%,
2/13/15 ................................. A- 125 128,834
Nationwide Mutual Insurance Co. 7.50%,
2/15/24 ................................. A- 100 102,692
New York Life Insurance Co. 144A 5.875%,
5/15/33 (b) ............................. AA- 100 99,388
Provident Cos., Inc. 6.375%, 7/15/05 ...... BBB- 75 78,344
StanCorp Financial Group, Inc. 6.875%,
10/1/12 ................................. BBB+ 300 326,859
-----------
985,492
-----------
MANAGED HEALTH CARE--2.0%
UnitedHealth Group, Inc. 7.50%, 11/15/05 .. A 70 76,847
UnitedHealth Group, Inc. 5.20%, 1/17/07 ... A 130 139,111
UnitedHealth Group, Inc. 3.30%, 1/30/08 ... A 150 149,310
UnitedHealth Group, Inc. 4.875%, 4/1/13 ... A 125 125,870
WellPoint Health Networks, Inc. 6.375%,
6/15/06 ................................. A- 455 496,096
-----------
987,234
-----------
MARINE--0.2%
Ship Finance International Ltd. 144A 8.50%,
12/15/13 (b) ............................ B 125 124,375
-----------
METAL & GLASS CONTAINERS--1.1%
Ball Corp. 6.875%, 12/15/12 ............... BB 125 131,250
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09 ......................... BB 140 154,175
Owens-Brockway Glass Container, Inc.
7.75%, 5/15/11 .......................... BB 50 53,938
Owens-Brockway Glass Container, Inc.
8.75%, 11/15/12 ......................... BB 100 111,875
Owens-Illinois, Inc. 7.15%, 5/15/05 ....... B+ 75 77,906
-----------
529,144
-----------
MOTORCYCLE MANUFACTURERS--0.2%
Harley Davidson, Inc. 144A 3.625%,
12/15/08 (b) ............................ AA- 100 99,748
-----------
MOVIES & ENTERTAINMENT--1.6%
AMC Entertainment, Inc. 9.875%, 2/1/12 .... CCC+ 65 72,638
Time Warner, Inc. 5.625%, 5/1/05 .......... BBB+ 250 261,698
Time Warner, Inc. 6.875%, 5/1/12 .......... BBB+ 275 309,459
Viacom, Inc. 6.40%, 1/30/06 ............... A- 125 134,980
-----------
778,775
-----------
MULTI-LINE INSURANCE--1.0%
Farmers Insurance Exchange 144A 8.50%,
8/1/04 (b) .............................. BBB+ 50 51,053
Farmers Insurance Exchange 144A 8.625%,
5/1/24 (b) .............................. BBB+ 75 78,375
Liberty Mutual Insurance Co. 144A 8.50%,
5/15/25 (b) ............................. BBB+ 200 213,914
Liberty Mutual Insurance Co. 144A 7.875%,
10/15/26 (b) ............................ BBB+ 145 146,541
-----------
489,883
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
OIL & GAS EQUIPMENT & SERVICES--0.2%
Halliburton Co. 144A 5.50%, 10/15/10 (b) .. BBB $ 75 $ 78,436
-----------
OIL & GAS EXPLORATION & PRODUCTION--0.8%
Magnum Hunter Resources, Inc. 9.60%,
3/15/12 ................................. B+ 60 68,400
Pemex Project Funding Master Trust 6.125%,
8/15/08 ................................. BBB- 200 210,000
Pemex Project Funding Master Trust
8.625%, 2/1/22 .......................... BBB- 125 138,438
Westport Resources Corp. 144A 8.25%,
11/1/11 (b) ............................. B+ 25 27,625
-----------
444,463
-----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--0.9%
Devon Energy Corp. 2.75%, 8/1/06 .......... BBB 175 175,081
GulfTerra Energy Partners LP Series B
8.50%, 6/1/10 ........................... BB- 42 47,880
Kaneb Pipe Line Operating Partnership
5.875%, 6/1/13 .......................... BBB+ 125 128,186
Kern River Funding Corp. 144A 4.893%,
4/30/18 (b) ............................. A- 97 96,682
Plains All American Pipeline LP/PAA Finance
Corp. 144A 5.625%, 12/15/13 (b) ......... BBB- 25 25,344
-----------
473,173
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.8%
Citigroup, Inc. 4.875%, 5/7/15 ............ A+ 175 170,963
OneAmerica Financial Partners, Inc. 144A
7%, 10/15/33 (b) ........................ A- 175 173,239
-----------
344,202
-----------
PACKAGED FOODS & MEATS--3.2%
Dean Foods Co. 6.625%, 5/15/09 ............ BB- 400 422,000
Dean Foods Co. 6.90%, 10/15/17 ............ BB- 50 52,000
Del Monte Corp. 144A 8.625%, 12/15/12 (b) . B 55 60,500
Del Monte Corp. Series B 9.25%, 5/15/11 ... B 30 33,300
General Mills, Inc. 5.125%, 2/15/07 ....... BBB+ 125 132,782
General Mills, Inc. 3.875%, 11/30/07 ...... BBB+ 175 177,212
General Mills, Inc. 6%, 2/15/12 ........... BBB+ 75 80,203
Kellogg Co. 2.875%, 6/1/08 ................ BBB 150 144,834
Kellogg Co. Series B 6%, 4/1/06 ........... BBB 225 241,096
Kellogg Co. Series B 6.60%, 4/1/11 ........ BBB 200 224,138
-----------
1,568,065
-----------
PAPER PACKAGING--0.7%
Sealed Air Corp. 144A 5.375%, 4/15/08 (b) . BBB 250 263,972
Sealed Air Corp. 144A 6.875%, 7/15/33 (b) . BBB 75 79,387
-----------
343,359
-----------
PAPER PRODUCTS--0.0%
Boise Cascade Corp. 6.50%, 11/1/10 ........ BB 25 26,115
-----------
PERSONAL PRODUCTS--0.3%
Gillette Co. (The) 4.125%, 8/30/07 ........ AA- 125 129,549
-----------
PROPERTY & CASUALTY INSURANCE--2.1%
21St Century Insurance Group 5.90%,
12/15/13 ................................ BBB+ 25 25,151
Berkley (W.R.) Corp. 5.875%, 2/15/13 ...... BBB+ 150 153,196
Berkshire Hathaway, Inc. 144A 4.625%,
10/15/13 (b) ............................ AAA 100 98,320
Fund American Cos., Inc. 5.875%, 5/15/13 .. BBB- 250 253,031
Markel Corp. 6.80%, 2/15/13 ............... BBB- 250 263,624
Progressive Corp. (The) 6.25%, 12/1/32 .... A+ 75 78,294
Travelers Property Casualty Corp. 5%,
3/15/13 ................................. A- 175 175,115
-----------
1,046,731
-----------
See Notes to Financial Statements
72
PHOENIX-JANUS FLEXIBLE INCOME SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
PUBLISHING & PRINTING--1.7%
Belo Corp. 7.125%, 6/1/07 ................. BBB- $ 165 $ 184,528
Belo Corp. 8%, 11/1/08 .................... BBB- 75 87,525
Dex Media East LLC/Dex Media East Finance
Co. 9.875%, 11/15/09 .................... B 25 28,750
Dex Media East LLC/Dex Media East Finance
Co. 144A 8%, 11/15/13 (b) ............... B 50 52,750
Dex Media West LLC/Dex Media Finance Co.
12.125%, 11/15/12 ....................... B 90 111,150
Dex Media West LLC/Dex Media Finance Co.
144A 9.875%, 8/15/13 (b) ................ B 75 86,910
News America, Inc. 6.625%, 1/9/08 ......... BBB- 250 278,061
-----------
829,674
-----------
RAILROADS--0.2%
CSX Corp. 4.875%, 11/1/09 ................. BBB 95 98,214
-----------
REGIONAL BANKS--0.6%
Citizens Banking Corp. 5.75%, 2/1/13 ...... BBB- 50 50,141
Zions Bancorporation 2.70%, 5/1/06 ........ BBB 125 125,611
Zions Bancorporation 6%, 9/15/15 .......... BBB- 125 131,063
-----------
306,815
-----------
RESTAURANTS--0.1%
Domino's, Inc. 144A 8.25%, 7/1/11 (b) ..... B- 40 43,050
Yum! Brands, Inc. 7.70%, 7/1/12 ........... BB+ 25 28,906
-----------
71,956
-----------
SEMICONDUCTOR EQUIPMENT--0.1%
Amkor Technology, Inc. 10.50%, 5/1/09 ..... CCC+ 35 37,538
-----------
SOFT DRINKS--0.8%
Coca Cola Enterprises, Inc. 4.375%,
9/15/09 ................................. A 250 256,762
Coca Cola Enterprises, Inc. 7.125%, 8/1/17 A 133 156,981
-----------
413,743
-----------
THRIFTS & MORTGAGE FINANCE--0.9%
Chevy Chase Bank FSB 6.875%, 12/1/13 ...... BB- 75 77,250
Sovereign Bank 5.125%, 3/15/13 ............ BBB- 150 148,926
Sovereign Capital Trust 9%, 4/1/27 ........ BB- 35 38,652
Webster Bank 5.875%, 1/15/13 .............. BBB- 125 129,078
Webster Capital Trust II Series B 10%,
4/1/27 .................................. BB 50 60,456
-----------
454,362
-----------
WIRELESS TELECOMMUNICATION SERVICES--0.5%
American Tower Corp. 9.375%, 2/1/09 ....... CCC 75 80,250
Nextel Communications, Inc. 9.375%,
11/15/09 ................................ B+ 125 136,875
Nextel Communications, Inc. 7.375%, 8/1/15 B+ 50 54,000
-----------
271,125
-----------
TOTAL CORPORATE BONDS
(Identified cost $28,270,631) ............................... 29,731,353
-----------
FOREIGN GOVERNMENT SECURITIES--1.6%
GERMANY--0.6%
Deutsche Bundesrepublik Series 02 5%,
7/4/12 .................................. AAA 225(g) 300,495
-----------
MEXICO--0.1%
United Mexican States 4.625%, 10/8/08 ..... BBB- 50 50,625
-----------
SPAIN--0.9%
Kingdom of Spain 5%, 7/30/12 .............. AA+ 325(g) 433,191
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $708,128) .................................. 784,311
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
---------- ------ -----------
FOREIGN CORPORATE BONDS--5.9%
AUSTRALIA--0.2%
Hanson Australia Funding 5.25%, 3/15/13 ... BBB+ $ 125 $ 124,423
-----------
BELGIUM--0.3%
Telenet Group Holdings NV 144A 9%,
12/15/13 (b) ............................ B- 75(g) 98,385
Telenet Group Holdings NV 144A 0%,
6/15/14 (b) (h) ......................... CCC+ 75 47,625
-----------
146,010
-----------
CANADA--0.4%
Corus Entertainment, Inc. 8.75%, 3/1/12 ... B+ 90 99,450
Rogers Cable, Inc. 6.25%, 6/15/13 ......... BBB- 100 100,750
-----------
200,200
-----------
GERMANY--0.1%
Fresenius Finance BV 144A 7.75%,
4/30/09 (b) ............................. BB+ 50(g) 68,428
-----------
HONG KONG--0.3%
Hutchison Whampoa International Ltd. 144A
5.45%, 11/24/10 (b) ..................... A- 150 152,146
-----------
IRELAND--0.5%
Valentia Telecommunications Ltd. 144A
7.25%, 8/15/13 (b) ...................... BB+ 175(g) 238,120
-----------
NETHERLANDS--0.2%
Deutsche Telekom International Finance BV
3.875%, 7/22/08 ......................... BBB+ 75 75,247
-----------
UNITED KINGDOM--2.0%
British Sky Broadcasting Group plc 7.30%,
10/15/06 ................................ BBB- 250 278,579
British Sky Broadcasting Group plc 6.875%,
2/23/09 ................................. BBB- 550 618,180
SABMiller plc 144A 6.625%, 8/15/33 (b) .... BBB+ 75 79,292
-----------
976,051
-----------
UNITED STATES--2.2%
TXU Australia Holdings Partnership LP 144A
6.15%, 11/15/13 (b) ..................... BBB 200 203,847
Tyco International Group SA 6.375%,
2/15/06 ................................. BBB- 125 133,125
Tyco International Group SA 5.80%, 8/1/06 . BBB- 375 396,562
Tyco International Group SA 6.375%,
10/15/11 ................................ BBB- 125 133,594
Tyco International Group SA 144A 6%,
11/15/13 (b) ............................ BBB- 225 231,750
-----------
1,098,878
-----------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $2,888,919) ................................ 3,079,503
-----------
CONVERTIBLE BONDS--0.1%
AUTOMOBILE MANUFACTURERS--0.0%
Fleetwood Enterprises Cv. 144A 5%,
12/15/23 (b) ............................ NR 10 11,613
-----------
COMPUTER STORAGE & PERIPHERALS--0.0%
Candescent Technologies Corp. Cv. 144A
8%, 5/1/03 (b) (c) (d) (e) .............. NR 50 0
-----------
OIL & GAS EXPLORATION & PRODUCTION--0.1%
Magnum Hunter Re Cv. 144A 1.17%,
12/15/23 (b) (h) ........................ NR 15 16,331
-----------
TOTAL CONVERTIBLE BONDS
(Identified cost $67,439) ................................... 27,944
-----------
See Notes to Financial Statements
73
PHOENIX-JANUS FLEXIBLE INCOME SERIES
SHARES VALUE
------ -----------
PREFERRED STOCKS--0.4%
REITS--0.0%
Saul Centers, Inc. Pfd. 8% ......................... 1,100 $ 29,150
-----------
THRIFTS & MORTGAGE FINANCE--0.4%
Chevy Chase Bank Pfd. 8% ........................... 3,925 112,647
Chevy Chase Preferred Capital Corp. Series A Pfd.
10.375% .......................................... 1,225 73,500
-----------
186,147
-----------
TOTAL PREFERRED STOCKS
(Identified cost $195,830) .................................. 215,297
-----------
CONVERTIBLE PREFERRED STOCKS--0.1%
AUTOMOBILE MANUFACTURERS--0.1%
General Motors Corp. Series C Cv. Pfd. 6.25% ....... 650 20,995
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $21,027) ................................... 20,995
-----------
TOTAL LONG TERM INVESTMENTS--96.8%
(Identified cost $46,190,408) ............................... 48,086,677
-----------
PAR
VALUE
(000) VALUE
------ -----------
SHORT-TERM OBLIGATIONS--2.2%
FEDERAL AGENCY SECURITIES--2.2%
Federal Home Loan Discount Note 0.75%,
1/2/04 ........................................... $1,100 $ 1,099,977
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,099,977) ................................ 1,099,977
-----------
TOTAL INVESTMENTS--99.0%
(Identified cost $47,290,385) ............................... 49,186,654(a)
Other assets and liabilities, net--1.0% ..................... 475,068
-----------
NET ASSETS--100.0% ............................................ $49,661,722
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,013,480 and gross
depreciation of $179,217 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$47,352,391.
(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 December 31,
2003, these securities amounted to a value of $4,253,290 or 8.6% of net
assets.
(c) Security in default.
(d) Illiquid. Security valued at fair value as determined in good faith by or
under the direction of the Trustees. At December 31, 2003, this security
amounted to a value of $0 or 0% of net assets. For acquisition information,
see Notes to Financial Statements.
(e) Non-income producing.
(f) All or a portion segregated as collateral for forward currency contracts and
long settlements.
(g) Par value represents Euro.
(h) Variable or step coupon security; interest rate reflects the rate currently
in effect.
(i) Principal amount is adjusted daily pursuant to the change in the Consumer
Price Index.
See Notes to Financial Statements
74
PHOENIX-JANUS FLEXIBLE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $47,290,385) ............................................ $49,186,654
Cash .................................................................................................... 3,618
Receivables
Interest .............................................................................................. 665,169
Investment securities sold ............................................................................ 149,941
Fund shares sold ...................................................................................... 112,174
Prepaid expenses ........................................................................................ 784
-----------
Total assets ........................................................................................ 50,118,340
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 174,066
Investment securities purchased ....................................................................... 96,558
Net unrealized depreciation on forward currency contracts ............................................. 97,563
Professional fee ...................................................................................... 31,440
Investment advisory fee ............................................................................... 23,255
Printing fee .......................................................................................... 16,805
Financial agent fee ................................................................................... 5,764
Administration fee .................................................................................... 3,232
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 5,575
-----------
Total liabilities ................................................................................... 456,618
-----------
NET ASSETS .............................................................................................. $49,661,722
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $47,583,012
Undistributed net investment income ................................................................... 177,989
Accumulated net realized gain ......................................................................... 99,843
Net unrealized appreciation ........................................................................... 1,800,878
NET ASSETS .............................................................................................. $49,661,722
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 4,567,090
===========
Net asset value and offering price per share ............................................................ $10.87
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Interest ...................................................................................................... $2,436,366
Dividends ..................................................................................................... 3,893
----------
Total investment income ..................................................................................... 2,440,259
----------
EXPENSES
Investment advisory fee ....................................................................................... 390,016
Financial agent fee ........................................................................................... 67,501
Administration fee ............................................................................................ 37,447
Custodian ..................................................................................................... 32,858
Printing ...................................................................................................... 29,400
Professional .................................................................................................. 25,188
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 17,814
----------
Total expenses .............................................................................................. 606,155
Less expenses borne by investment adviser ................................................................... (94,125)
Custodian fees paid indirectly .............................................................................. (44)
----------
Net expenses ................................................................................................ 511,986
----------
NET INVESTMENT INCOME ........................................................................................... 1,928,273
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 1,223,781
Net realized loss on foreign currency transactions ............................................................ (142,193)
Net change in unrealized appreciation (depreciation) on investments ........................................... (31,145)
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... (41,574)
----------
NET GAIN ON INVESTMENTS ......................................................................................... 1,008,869
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $2,937,142
==========
See Notes to Financial Statements
75
PHOENIX-JANUS FLEXIBLE INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ -------------
FROM OPERATIONS
Net investment income (loss) ........................................................................ $ 1,928,273 $ 1,574,413
Net realized gain (loss) ............................................................................ 1,081,588 183,552
Net change in unrealized appreciation (depreciation) ................................................ (72,719) 1,768,935
------------ -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ......................................... 2,937,142 3,526,900
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................... (1,726,126) (1,583,110)
Net realized short-term gains ....................................................................... (577,558) (81,351)
Net realized long-term gains ........................................................................ (414,509) (58,966)
------------ -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ........................................... (2,718,193) (1,723,427)
------------ -------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,580,659 and 2,773,686 shares, respectively) ...................... 28,495,675 29,137,626
Net asset value of shares issued from reinvestment of distributions (247,648 and 163,467 shares,
respectively) ..................................................................................... 2,718,193 1,723,427
Cost of shares repurchased (2,274,588 and 1,538,829 shares, respectively) ........................... (25,126,731) (16,097,335)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ........................................... 6,087,137 14,763,718
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................... 6,306,086 16,567,191
NET ASSETS
Beginning of period ................................................................................. 43,355,636 26,788,445
------------ -------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $177,989 AND $11,503,
RESPECTIVELY) ..................................................................................... $ 49,661,722 $ 43,355,636
============ =============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
------------------------------------------ 12/15/99 TO
2003 2002 2001(7) 2000 12/31/99
------ ------ ------- ------ --------------
Net asset value, beginning of period ................................ $10.80 $10.24 $10.09 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ...................................... 0.43 0.47 0.55(6) 0.53 0.02
Net realized and unrealized gain (loss) ........................... 0.25 0.60 0.17 0.10 (0.02)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................ 0.68 1.07 0.72 0.63 --
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income .............................. (0.39) (0.47) (0.49) (0.52) (0.02)
Distributions from net realized gains ............................. (0.22) (0.04) (0.08) -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................. (0.61) (0.51) (0.57) (0.52) (0.02)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ........................................... 0.07 0.56 0.15 0.11 (0.02)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................................... $10.87 $10.80 $10.24 $10.09 $ 9.98
====== ====== ====== ====== ======
Total return ........................................................ 6.39% 10.62% 7.24% 6.43% 0.02%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ............................... $49,662 $43,356 $26,788 $12,547 $5,232
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) ............................................. 1.05%(5) 1.04%(5) 0.95%(5) 1.00%(4) 0.95%(1)
Net investment income ............................................. 3.96% 4.66% 5.31% 6.63% 4.81%(1)
Portfolio turnover .................................................. 159% 254% 305% 227% 0%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.24%, 1.34%, 1.51%, 2.47% and 8.18% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(4) For the year ended December 31, 2000, 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 have been 0.95%.
(5) 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) Computed using average shares outstanding.
(7) As required, effective January 1, 2001, the Fund adopted the provisions of AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities. The effect of this change for the year ended December 31, 2001, was
to decrease net investment income per share by $0.01, increase net realized and unrealized gains and losses per share by $0.01
and decrease the ratio of net investment income to average net assets from 5.41% to 5.31%. Per share ratios and supplemental
data for prior periods have not been restated to reflect this change.
</FN>
See Notes to Financial Statements
76
PHOENIX-KAYNE RISING DIVIDENDS SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The portfolio seeks long-term capital appreciation with dividend income as a
secondary consideration.
Q: HOW DID THE SERIES PERFORM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003?
A: The series produced strong returns for the year of 19.10%, but underperformed
the benchmark S&P 500(R) Index 1, which returned 28.71%. Although stock
selection in the triple-A-rated companies somewhat affected relative return, the
majority of the underperformance versus the S&P 500(R) Index was attributable to
the series' exclusive focus on high-quality companies. In addition, the
portfolio's investment policy of not investing in smaller cap companies also was
a factor in the underperformance of the portfolio. All performance figures
assume reinvestment of distributions. Past performance is not indicative of
future results and current performance may be higher or lower than the
performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE LAST 12 MONTHS?
A: For the full year, the domestic equity markets provided exceptional returns.
Thematically, lower quality and smaller stocks performed much stronger than did
higher quality and larger stocks. In the S&P 500(R) Index, stocks that pay
dividends rose, on average, about half as much as non-dividend-paying stocks.
S&P quality rankings show that A-ranked companies were up about half as much as
B-ranked companies, which were up about half as much as C-ranked companies.
Approximately 29% of the weight of the S&P 500(R) Index is represented by
companies that have a triple-B-plus or lower credit rating or no rating. In
contrast, the series is 100% invested in companies with an A-minus or better
credit-quality profile.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE PORTFOLIO'S PERFORMANCE
THIS YEAR?
A: For the full year, the three positions that contributed the most to the
portfolio return were Linear Technology, Home Depot, and General Electric. The
three positions that contributed the least were SBC Communications, Merck, and
Johnson & Johnson.
Linear Technology produced a strong recovery in sales and earnings. For
Home Depot, its investment in its stores started to payoff as illustrated by
greater than expected comparable store sales. Investors expected that General
Electric's portfolio repositioning should lead to a faster rate of growth. Intel
reported a strong cyclical rebound in microprocessor business.
SBC Communications lost access lines to competition. Merck along with other
pharmaceutical stocks were weak as industry sales trends slowed and political
pressures mounted. Johnson & Johnson fell as competition to the Cypher
drug-eluting stent is likely to come sooner than expected.
Over time in the universe of high-quality companies, we have observed that
last year's loser (Home Depot in 2002) often becomes this year's winner.
High-quality companies have strong staying power and usually find a way to solve
their problems.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: Kayne Anderson Rudnick invests solely in high-quality companies, but
low-quality stocks were favored by the equity markets in 2003. We believe there
are certain factors that indicate that the high-quality, more consistent
earnings-growth companies could assume market leadership in 2004. To a
significant extent, low real interest rates and abundant liquidity in the
financial system provided an environment that allowed lower quality stocks to
rebound from their cyclical lows. With the economic recovery strongly underway,
we believe that interest rates have probably seen their lows. In addition, we
believe earnings comparisons for more operationally and financially levered
companies will be much more difficult in the second half of 2004.
High-quality companies have differentiated businesses that produce high
returns on investor capital, substantial free cash flows, and low-debt balance
sheets. Such strong financial characteristics allow the companies to reinvest
for continued growth and deliver cash to the shareholders through share
repurchases and cash dividends.
77
PHOENIX-KAYNE RISING DIVIDENDS SERIES
We believe in the power of cash dividends compounding over time. Various
studies have shown that approximately two-thirds of long-term stock returns are
derived from dividends. The series provides a dividend yield that is
approximately twice the level of Treasury-bill yields. In addition, the
companies in the portfolio have increased their dividends by 10 to 15% per year
over time, which may provide a basis for an increasing income stream in the
future and related capital appreciation.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Rising Dividends Series 19.10% 10.60%
- --------------------------------------------------------------------------------
S&P 500(R) Index 1 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Rising Dividends Series S&P 500(R) Index 1
8/12/02 $10,000 $10,000
12/31/02 $ 9,655 $ 9,806
12/31/03 $11,498 $12,622
1 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct investment;
therefore its performance does not reflect the expenses associated with the
active management of an actual portfolio.
78
PHOENIX-KAYNE RISING DIVIDENDS SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--97.3%
ASSET MANAGEMENT & CUSTODY BANKS--1.9%
State Street Corp. ................................. 4,990 $ 259,879
-----------
COMPUTER HARDWARE--1.9%
International Business Machines Corp. .............. 2,780 257,650
-----------
CONSUMER FINANCE--2.6%
American Express Co. ............................... 7,415 357,625
-----------
DATA PROCESSING & OUTSOURCED SERVICES--3.6%
Automatic Data Processing, Inc. .................... 12,420 491,956
-----------
DIVERSIFIED BANKS--4.2%
Wells Fargo & Co. .................................. 9,755 574,472
-----------
DIVERSIFIED CHEMICALS--2.4%
Du Pont (E.I.) de Nemours & Co. .................... 7,325 336,144
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--3.2%
Emerson Electric Co. ............................... 6,900 446,775
-----------
HOME FURNISHINGS--2.2%
Leggett & Platt, Inc. .............................. 14,200 307,146
-----------
HOME IMPROVEMENT RETAIL--3.8%
Home Depot, Inc. (The) ............................. 14,610 518,509
-----------
HOUSEHOLD PRODUCTS--4.0%
Procter & Gamble Co. (The) ......................... 5,480 547,342
-----------
HYPERMARKETS & SUPER CENTERS--3.6%
Wal-Mart Stores, Inc. .............................. 9,390 498,139
-----------
INDUSTRIAL CONGLOMERATES--4.9%
General Electric Co. ............................... 21,895 678,307
-----------
INDUSTRIAL GASES--2.2%
Air Products and Chemicals, Inc. ................... 5,685 300,339
-----------
INDUSTRIAL MACHINERY--2.4%
Illinois Tool Works, Inc. .......................... 4,035 338,577
-----------
INSURANCE BROKERS--2.4%
Marsh & McLennan Cos., Inc. ........................ 6,875 329,244
-----------
INTEGRATED OIL & GAS--8.3%
ConocoPhillips ..................................... 7,000 458,990
Exxon Mobil Corp. .................................. 16,575 679,575
-----------
1,138,565
-----------
MOTORCYCLE MANUFACTURERS--2.8%
Harley-Davidson, Inc. .............................. 8,100 384,993
-----------
MULTI-LINE INSURANCE--3.0%
American International Group, Inc. ................. 6,255 414,581
-----------
OFFICE SERVICES & SUPPLIES--2.1%
Avery Dennison Corp. ............................... 5,100 285,702
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.8%
Citigroup, Inc. .................................... 10,865 527,387
-----------
PACKAGED FOODS & MEATS--1.5%
Wrigley (Wm.) Jr. Co. .............................. 3,655 205,448
-----------
SHARES VALUE
------- -----------
PHARMACEUTICALS--13.8%
Johnson & Johnson .................................. 9,160 $ 473,206
Lilly (Eli) & Co. .................................. 4,800 337,584
Merck & Co., Inc. .................................. 9,700 448,140
Pfizer, Inc. ....................................... 18,115 640,003
-----------
1,898,933
-----------
REGIONAL BANKS--3.2%
Fifth Third Bancorp ................................ 7,475 441,773
-----------
SEMICONDUCTORS--4.5%
Linear Technology Corp. ............................ 14,851 624,782
-----------
SOFT DRINKS--5.3%
Coca-Cola Co. (The) ................................ 9,325 473,244
PepsiCo, Inc. ...................................... 5,680 264,801
-----------
738,045
-----------
SYSTEMS SOFTWARE--3.7%
Microsoft Corp. .................................... 18,368 505,855
-----------
TOTAL COMMON STOCKS
(Identified cost $12,141,465) ............................... 13,408,168
-----------
TOTAL INVESTMENTS--97.3%
(Identified cost $12,141,465) ............................... 13,408,168(a)
Other assets and liabilities, net--2.7% ..................... 374,775
-----------
NET ASSETS--100.0% ............................................ $13,782,943
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,403,312 and gross
depreciation of $150,040 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$12,154,896.
See Notes to Financial Statements
79
PHOENIX-KAYNE RISING DIVIDENDS SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $12,141,465) .......................................... $13,408,168
Cash .................................................................................................. 381,247
Receivables
Dividends and interest .............................................................................. 21,514
Fund shares sold .................................................................................... 19,721
Receivable from adviser ............................................................................. 7,027
Prepaid expenses ...................................................................................... 104
-----------
Total assets ...................................................................................... 13,837,781
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................. 1,732
Professional fee .................................................................................... 29,787
Printing fee ........................................................................................ 12,065
Financial agent fee ................................................................................. 3,842
Trustees' fee ....................................................................................... 2,360
Administration fee .................................................................................. 867
Accrued expenses ...................................................................................... 4,185
-----------
Total liabilities ................................................................................. 54,838
-----------
NET ASSETS ............................................................................................ $13,782,943
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .................................................... $12,529,671
Accumulated net realized loss ....................................................................... (13,431)
Net unrealized appreciation ......................................................................... 1,266,703
-----------
NET ASSETS ............................................................................................ $13,782,943
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ...................... 1,214,688
===========
Net asset value and offering price per share .......................................................... $11.35
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends .................................................................................................. $ 128,938
Interest ................................................................................................... 1,965
----------
Total investment income .................................................................................. 130,903
----------
EXPENSES
Investment advisory fee .................................................................................... 50,250
Financial agent fee ........................................................................................ 41,092
Administration fee ......................................................................................... 5,527
Professional ............................................................................................... 30,119
Printing ................................................................................................... 21,530
Trustees ................................................................................................... 5,931
Custodian .................................................................................................. 5,306
Miscellaneous .............................................................................................. 10,393
----------
Total expenses ........................................................................................... 170,148
Less expenses borne by investment adviser ................................................................ (109,127)
Custodian fees paid indirectly ........................................................................... (4)
----------
Net expenses ............................................................................................. 61,017
----------
NET INVESTMENT INCOME ........................................................................................ 69,886
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................ 87,174
Net change in unrealized appreciation (depreciation) on investments ........................................ 1,297,287
----------
NET GAIN ON INVESTMENTS ...................................................................................... 1,384,461
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................................................... $1,454,347
==========
See Notes to Financial Statements
80
PHOENIX-KAYNE RISING DIVIDENDS SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) ................................................................... $ 69,886 $ 3,149
Net realized gain (loss) ....................................................................... 87,174 (15,153)
Net change in unrealized appreciation (depreciation) ........................................... 1,297,287 (30,584)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 1,454,347 (42,588)
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................................................................... (69,267) (3,194)
Net realized short-term gains .................................................................. (80,708) --
Net realized long-term gains ................................................................... (4,744) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ...................................... (154,719) (3,194)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,189,552 and 181,833 shares, respectively) ..................... 12,382,492 1,798,494
Net asset value of shares issued from reinvestment of distributions (13,681 and 332 shares,
respectively) ................................................................................ 154,719 3,194
Cost of shares repurchased (159,198 and 11,512 shares, respectively) ........................... (1,698,454) (111,348)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ...................................... 10,838,757 1,690,340
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... 12,138,385 1,644,558
NET ASSETS
Beginning of period ............................................................................ 1,644,558 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ....... $13,782,943 $1,644,558
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ........... $ 9.64 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................. 0.06 0.02
Net realized and unrealized gain (loss) ...... 1.78 (0.36)
------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 1.84 (0.34)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ......... (0.06) (0.02)
Distributions from net realized gains ........ (0.07) --
------ ------
TOTAL DISTRIBUTIONS ........................ (0.13) (0.02)
------ ------
CHANGE IN NET ASSET VALUE ...................... 1.71 (0.36)
------ ------
NET ASSET VALUE, END OF PERIOD ................. $11.35 $ 9.64
====== ======
Total return ................................... 19.10% (3.45)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........ $13,783 $1,645
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................ 0.85%(4) 0.85%(2)(4)
Net investment income ........................ 0.97% 0.76%(2)
Portfolio turnover ............................. 18% 16%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.37% and
14.32% for the periods ended December 31, 2003 and 2002.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
81
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The portfolio seeks long-term capital appreciation, with dividend income as a
secondary consideration.
Q: HOW DID THE SERIES PERFORM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003?
A: Although the series produced strong positive returns of 20.28% for the year,
it underperformed its benchmark, the Russell 2000(R) Value Index 1, which
returned 46.03% and the S&P 500(R) Index 2, which returned 28.71%. In a climate
of cyclical and speculative rotation, we expect the portfolio to lag the market.
All performance figures assume reinvestment of distributions. Past performance
is not indicative of future results and current performance may be higher or
lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE LAST 12 MONTHS?
A: After a three-year bear market, investors concluded that the market had
bottomed in the first quarter of 2003 and that the 2001-2002 recession had
finally ended. Unlike the period from the end of first quarter of 2000 until the
fall of 2002, when investors sought refuge in high-quality companies with strong
balance sheets, in 2003, investors went on a buying frenzy, seeking out the most
beaten-down companies--low-quality speculative companies with low profitability
and high debt. During the year, lower quality, high-beta stocks led the market.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: With strengthening economic news, investors rotated into low-quality
companies that would most benefit by a firming economy. For the year 2003,
quality companies lagged--the worse the quality, the higher the
performance--across all major indexes. Because of our focus on high-quality
businesses, the portfolio lagged the index for the year despite generating
attractive absolute returns.
Rather than trying to time economic cycles and then shift out of
high-quality companies into much lower quality or unprofitable companies, our
investment strategy is to build a portfolio of companies that have strong,
consistent growth with low business and financial risk in good economies and
bad. We hold these companies over the long term, convinced that the investment
returns of the portfolio will ultimately mirror the financial results of these
companies.
In a climate of anticipated strong economic recovery, when investors seek
those companies whose financial results will benefit the most from that
recovery, the series can lag the market. Because the financial results of our
companies have not been hurt as much as the broader market during the economic
slowdown, they also do not rebound as strongly during a sharp economic recovery.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We believe the companies in the series will continue to produce strong,
consistent earnings growth from underleveraged balance sheets with the stocks
selling at discount valuations. Lower quality companies can outperform the index
in an accelerating economy emerging from a recession, as occurred in 2003.
However, we expect the fusion of quality, growth, and value to lead the market
when the growth rate of the economic recovery subsides. Economists believe that
the peak growth occurred in the fourth quarter.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 2000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
82
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Small-Cap Quality Value Series 20.28% 15.07%
- --------------------------------------------------------------------------------
Russell 2000(R) Value Index 1 46.03% 29.20%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Small-Cap Russell 2000(R)
Quality Value Series Value Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $10,101 $ 9,768 $ 9,806
12/31/03 $12,149 $14,264 $12,622
1 The Russell 2000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
83
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ ----------
COMMON STOCKS--75.3%
APPLICATION SOFTWARE--3.6%
Reynolds & Reynolds Co. (The) Class A .............. 5,875 $ 170,669
----------
ASSET MANAGEMENT & CUSTODY BANKS--6.9%
American Capital Strategies, Ltd. .................. 5,350 159,055
MCG Capital Corp. .................................. 9,115 177,742
----------
336,797
----------
COMMUNICATIONS EQUIPMENT--8.2%
Black Box Corp. .................................... 3,875 178,521
Inter-Tel, Inc. .................................... 8,420 210,332
----------
388,853
----------
DISTRIBUTORS--1.4%
Advanced Marketing Services, Inc. .................. 6,030 68,742
----------
DIVERSIFIED COMMERCIAL SERVICES--6.8%
ABM Industries, Inc. ............................... 9,785 170,357
Equifax, Inc. ...................................... 6,245 153,003
----------
323,360
----------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.8%
Landauer, Inc. ..................................... 970 39,557
----------
HEALTH CARE EQUIPMENT--11.3%
Diagnostic Products Corp. .......................... 4,535 208,202
Matthews International Corp. Class A ............... 6,350 187,897
Young Innovations, Inc. ............................ 4,200 151,200
----------
547,299
----------
INDUSTRIAL CONGLOMERATES--3.8%
Teleflex, Inc. ..................................... 3,720 179,788
----------
INDUSTRIAL MACHINERY--6.5%
CLARCOR, Inc. ...................................... 3,220 142,002
Lincoln Electric Holdings, Inc. .................... 6,695 165,634
----------
307,636
----------
OIL & GAS EQUIPMENT & SERVICES--2.9%
CARBO Ceramics, Inc. ............................... 2,745 140,681
----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--4.1%
World Fuel Services Corp. .......................... 5,935 201,493
----------
REGIONAL BANKS--11.1%
Cathay Bancorp ..................................... 3,450 192,096
National Commerce Financial Corp. .................. 6,385 174,183
Park National Corp. ................................ 1,500 169,725
----------
536,004
----------
SPECIALTY CHEMICALS--1.9%
Balchem Corp. ...................................... 3,920 89,376
----------
THRIFTS & MORTGAGE FINANCE--2.9%
Washington Federal, Inc. ........................... 4,889 138,848
----------
TRUCKING--3.1%
Landstar System, Inc. (b) .......................... 3,830 145,693
----------
TOTAL COMMON STOCKS
(Identified cost $3,091,286) ................................ 3,614,796
----------
SHARES VALUE
------ ----------
FOREIGN COMMON STOCKS--8.4%
ASSET MANAGEMENT & CUSTODY BANKS--4.0%
Stewart (W.P.) & Co. Ltd. (Bermuda) ................ 8,850 $ 190,540
----------
WATER UTILITIES--4.4%
Consolidated Water Co., Ltd. (Cayman Islands) ...... 10,770 215,938
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $343,596) .................................. 406,478
----------
TOTAL INVESTMENTS--83.7%
(Identified cost $3,434,882) ................................ 4,021,274(a)
Other assets and liabilities, net--16.3% .................... 779,734
----------
NET ASSETS--100.0% ............................................ $4,801,008
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $598,321 and gross
depreciation of $19,228 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$3,442,181.
(b) Non-income producing.
See Notes to Financial Statements
84
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $3,434,882) ........................................... $4,021,274
Cash .................................................................................................. 835,309
Receivables
Receivable from adviser ............................................................................. 12,508
Dividends and interest .............................................................................. 11,472
Prepaid expenses ...................................................................................... 32
----------
Total assets ...................................................................................... 4,880,595
----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................. 28,047
Professional fee .................................................................................... 29,787
Printing fee ........................................................................................ 11,529
Financial agent fee ................................................................................. 3,417
Trustees' fee ....................................................................................... 2,360
Administration fee .................................................................................. 294
Accrued expenses ...................................................................................... 4,153
----------
Total liabilities ................................................................................. 79,587
----------
NET ASSETS ............................................................................................ $4,801,008
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .................................................... $4,210,322
Undistributed net investment income ................................................................. 1,890
Accumulated net realized gain ....................................................................... 2,404
Net unrealized appreciation ......................................................................... 586,392
----------
NET ASSETS ............................................................................................ $4,801,008
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ...................... 402,849
==========
Net asset value and offering price per share .......................................................... $11.92
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ........................................................................................... $ 56,525
Interest ............................................................................................ 566
---------
Total investment income ........................................................................... 57,091
---------
EXPENSES
Investment advisory fee ............................................................................. 21,196
Financial agent fee ................................................................................. 38,076
Administration fee .................................................................................. 1,814
Professional ........................................................................................ 30,119
Printing ............................................................................................ 20,434
Custodian ........................................................................................... 7,150
Trustees ............................................................................................ 5,950
Miscellaneous ....................................................................................... 10,218
---------
Total expenses .................................................................................... 134,957
Less expenses borne by investment adviser ......................................................... (110,212)
Custodian fees paid indirectly .................................................................... (16)
---------
Net expenses ...................................................................................... 24,729
---------
NET INVESTMENT INCOME ................................................................................. 32,362
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ..................................................................... 2,481
Net change in unrealized appreciation (depreciation) on investments ................................. 582,240
---------
NET GAIN ON INVESTMENTS ............................................................................... 584,721
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................. $ 617,083
=========
See Notes to Financial Statements
85
PHOENIX-KAYNE SMALL-CAP QUALITY VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
FROM OPERATIONS
Net investment income (loss) ...................................................................... $ 32,362 $ 5,920
Net realized gain (loss) .......................................................................... 2,481 5,843
Net change in unrealized appreciation (depreciation) .............................................. 582,240 4,152
---------- --------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....................................... 617,083 15,915
---------- --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................. (30,472) (5,920)
Net realized short-term gains ..................................................................... (2,543) (3,377)
---------- --------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ......................................... (33,015) (9,297)
---------- --------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (362,566 and 86,692 shares, respectively) ........................... 3,841,506 859,237
Net asset value of shares issued from reinvestment of distributions (2,787 and 940 shares,
respectively) ................................................................................... 33,015 9,297
Cost of shares repurchased (49,498 and 638 shares, respectively) .................................. (526,419) (6,314)
---------- --------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ......................................... 3,348,102 862,220
---------- --------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................. 3,932,170 868,838
NET ASSETS
Beginning of period ............................................................................... 868,838 --
---------- --------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $1,890 AND $0, RESPECTIVELY) ...... $4,801,008 $868,838
========== ========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ........... $ 9.99 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................. 0.09 0.07
Net realized and unrealized gain (loss) ...... 1.94 0.03
------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 2.03 0.10
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ......... (0.09) (0.07)
Distributions from net realized gains ........ (0.01) (0.04)
------ ------
TOTAL DISTRIBUTIONS ........................ (0.10) (0.11)
------ ------
CHANGE IN NET ASSET VALUE ...................... 1.93 (0.01)
------ ------
NET ASSET VALUE, END OF PERIOD ................. $11.92 $ 9.99
====== ======
Total return ................................... 20.28% 1.01%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........ $4,801 $869
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................ 1.05%(4) 1.05%(2)(4)
Net investment income ........................ 1.37% 2.33%(2)
Portfolio turnover ............................. 42% 4%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 5.73% and
22.60% for the periods ended December 31, 2003 and 2002, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
86
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital appreciation. Investing internationally
involves risks not associated with investing solely in the U.S., such as
currency fluctuation, political risk, differences in accounting and the limited
availability of information.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 29.82%,
underperforming the MSCI EAFE(R) Index 1, the series' benchmark, which returned
39.17%. During this period, U.S. large cap stocks, as measured by the S&P 500(R)
Index 2, returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The first two-and-a-half months of 2003, which saw a continuation of the
previous year's bear market, proved an anomaly in an otherwise bull market year.
In mid-March, just before the start of the war in Iraq, sentiment swung abruptly
from very negative to very positive. Investors rotated into stocks that stood to
gain the most from an improving economy; the stocks that benefited from this
change in sentiment included highly leveraged and economically sensitive
companies. In fact, many of the greatest beneficiaries were those same
lower-quality companies whose business models had been most questioned during
the bear market. Overall, 2003 proved to be a reversal of 2002, in that all
sectors in the MSCI EAFE(R) Index 1 rose in 2003, in comparison to the
across-the-board falls of 2002. In addition, the technology sector, which led
2002's decline, proved to be 2003's strongest performer. However, late in the
year there were signs that the rebound in lower-quality stocks had begun to fade
as investors began to focus once again on individual companies' fundamentals.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: The portfolio generated strong gains in the financial sector, as capital
markets-oriented companies benefited from rising markets and the fading of the
research scandals of 2002. The series' energy holdings also performed well, as
oil prices have remained at historically high levels. In addition, the weakness
in the U.S. Dollar versus most major currencies bolstered returns for the
Dollar-based investor, in contrast to recent years when currency movements
depressed the returns of investments outside the U.S. The series' sole
industrial holding rose strongly, but the relatively low weight in this
economically sensitive group detracted from returns versus the index. In
addition, the series' substantial allocation to the consumer staples sector
(which had added significant value throughout the bear market) hurt returns in
2003, as investors sought out more economically sensitive companies amid
expectations for a robust recovery.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: In the past, market recoveries have frequently seen a period during which
lower-quality, more cyclical stocks have outperformed. During these initial
stages of upswing, investors tend to seek out those companies that stand to gain
the most from an improvement in the economic landscape. Frequently, these
companies are the most volatile, debt-ridden, and cyclical stocks available. As
we may already be seeing, however, investors tend to turn their attention back
to the fundamentals underpinning stocks, including a company's ability to
generate strong returns on its capital. We remain confident in the series'
holdings, as they feature this sort of history of strong financial productivity,
which over the long term is a key determinant of a stock's performance.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The MSCI (Morgan Stanley Capital International) EAFE(R) Index is a measure of
foreign stock market performance, which includes net dividends, reinvested.
Total return figures are net of foreign withholding taxes. The EAFE(R) Index
is an aggregate of 21 individual country indexes in Europe, Australia, New
Zealand, and the Far East.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
87
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
International Equity Select Series 29.82% 17.01%
- --------------------------------------------------------------------------------
MSCI EAFE(R) Index 1 39.17% 23.31%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Foreign investing
involves special risks such as currency fluctuation and less public disclosure,
as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
International Equity
Select Series MSCI EAFE(R) Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $ 9,578 $ 9,607 $ 9,806
12/31/03 $12,433 $13,370 $12,622
1 The MSCI (Morgan Stanley Capital International) EAFE(R) Index measures foreign
stock market performance, which includes net dividends reinvested. Total
return figures are net of foreign withholding taxes. The EAFE(R) Index is an
aggregate of 21 individual country indexes in Europe, Australia,New Zealand,
and the Far East.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
88
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
FOREIGN COMMON STOCKS--94.3%
DENMARK--1.9%
Danske Bank A/S ADR (Diversified Banks) ............ 24,500 $ 574,819
-----------
FINLAND--3.7%
Nokia Oyj ADR (Communications Equipment) ........... 66,000 1,122,000
-----------
FRANCE--10.9%
Aventis SA ADR (Pharmaceuticals) ................... 9,000 596,340
Axa ADR (Multi-line Insurance) ..................... 27,200 583,984
Societe Generale ADR (Diversified Banks) ........... 50,400 890,009
Total SA ADR (Integrated Oil & Gas) ................ 12,900 1,193,379
-----------
3,263,712
-----------
GERMANY--2.0%
Siemens AG ADR (Industrial Conglomerates) .......... 7,400 591,556
-----------
IRELAND--2.9%
Allied Irish Banks plc ADR (Diversified Banks) ..... 27,200 863,600
-----------
ITALY--4.8%
Eni SpA ADR (Integrated Oil & Gas) ................. 9,100 864,318
Sanpaolo IMI SpA ADR (Diversified Banks) ........... 22,400 580,832
-----------
1,445,150
-----------
JAPAN--5.9%
CANON, Inc. ADR (Office Electronics) ............... 18,600 886,104
Kao Corp. ADR (Household Products) ................. 4,300 874,685
-----------
1,760,789
-----------
NETHERLANDS--8.8%
ABN AMRO Holding NV ADR (Diversified Banks) ........ 24,300 570,564
Heinekin NV ADR (Brewers) .......................... 30,200 1,150,022
Royal Dutch Petroleum Co. NY Registered Shares
(Integrated Oil & Gas) ........................... 17,200 901,108
-----------
2,621,694
-----------
SPAIN--3.1%
Endesa SA ADR (Electric Utilities) ................. 48,000 916,800
-----------
SWITZERLAND--17.7%
Compagnie Financiere Richemont AG ADR
(Housewares & Specialties) ....................... 24,600 590,759
Credit Suisse Group ADR (Diversified Capital Markets) 16,300 592,179
Nestle SA ADR (Packaged Foods & Meats) ............. 14,300 893,208
Novartis AG ADR (Pharmaceuticals) .................. 19,600 899,444
Roche Holding AG ADR (Pharmaceuticals) ............. 5,800 585,041
Swiss Re ADR (Reinsurance) ......................... 8,800 594,138
UBS AG (Diversified Capital Markets) ............... 17,000 1,155,830
-----------
5,310,599
-----------
SHARES VALUE
------ -----------
UNITED KINGDOM--32.6%
Barclays plc ADR (Diversified Banks) ............... 32,400 $ 1,177,740
BP plc ADR (Integrated Oil & Gas) .................. 18,300 903,105
Cadbury Schweppes plc ADR (Packaged Foods &
Meats) ........................................... 40,200 1,201,578
Diageo plc ADR (Distillers & Vintners) ............. 22,200 1,173,492
GlaxoSmithKline plc ADR (Pharmaceuticals) .......... 25,500 1,188,810
HSBC Holdings plc ADR (Diversified Banks) .......... 14,700 1,158,654
Tesco plc ADR (Food Retail) ........................ 43,000 595,223
Unilever plc ADR (Packaged Foods & Meats) .......... 31,800 1,195,680
Vodafone Group plc ADR (Wireless Telecommunication
Services) ........................................ 46,700 1,169,368
-----------
9,763,650
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $23,598,936) ............................... 28,234,369
-----------
TOTAL LONG TERM INVESTMENTS--94.3%
(Identified cost $23,598,936) ............................... 28,234,369
-----------
PAR
VALUE
(000)
------
SHORT-TERM OBLIGATIONS--5.5%
U.S. TREASURY BILLS--5.5%
U.S. Treasury Bill 0.78%, 2/5/04 ................... $ 75 74,943
U.S. Treasury Bill 0.80%, 2/5/04 ................... 1,255 1,254,024
U.S. Treasury Bill 0.81%, 2/5/04 ................... 140 139,890
U.S. Treasury Bill 0.825%, 2/5/04 .................. 155 154,876
U.S. Treasury Bill 0.835%, 2/5/04 .................. 40 39,967
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,663,700) ................................ 1,663,700
-----------
TOTAL INVESTMENTS--99.8%
(Identified cost $25,262,636) ............................... 29,898,069(a)
Other assets and liabilities, net--0.2% ..................... 45,685
-----------
NET ASSETS--100.0% ............................................ $29,943,754
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,679,650 and gross
depreciation of $133,739 for federal income tax purposes. At December 31,
2003, cost of securities for federal income tax purposes was $25,352,158.
See Notes to Financial Statements
89
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
Brewers ............................................................... 4.1%
Communications Equipment .............................................. 4.0
Distillers & Vintners ................................................. 4.2
Diversified Banks ..................................................... 20.6
Diversified Capital Markets ........................................... 6.2
Electric Utilities .................................................... 3.2
Food Retail ........................................................... 2.1
Household Products .................................................... 3.1
Housewares & Specialties .............................................. 2.1
Industrial Conglomerates .............................................. 2.1
Integrated Oil & Gas .................................................. 13.7
Multi-line Insurance .................................................. 2.1
Office Electronics .................................................... 3.1
Packaged Foods & Meats ................................................ 11.6
Pharmaceuticals ....................................................... 11.6
Reinsurance ........................................................... 2.1
Wireless Telecommunication Services ................................... 4.1
------
100.0%
======
See Notes to Financial Statements
90
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $25,262,636) ............................................ $29,898,069
Cash .................................................................................................... 142,174
Receivables
Fund shares sold ...................................................................................... 160,372
Dividends ............................................................................................. 36,740
Tax reclaims .......................................................................................... 2,602
Prepaid expenses ........................................................................................ 166
-----------
Total assets ........................................................................................ 30,240,123
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 139,887
Fund shares repurchased ............................................................................... 96,430
Professional fee ...................................................................................... 26,739
Investment advisory fee ............................................................................... 5,750
Financial agent fee ................................................................................... 4,414
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 1,804
Accrued expenses ........................................................................................ 18,985
-----------
Total liabilities ................................................................................... 296,369
-----------
NET ASSETS .............................................................................................. $29,943,754
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $25,397,843
Accumulated net realized loss ......................................................................... (89,522)
Net unrealized appreciation ........................................................................... 4,635,433
-----------
NET ASSETS .............................................................................................. $29,943,754
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 2,424,576
===========
Net asset value and offering price per share ............................................................ $12.35
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 301,884
Interest .............................................................................................. 9,486
Foreign taxes withheld ................................................................................ (34,472)
----------
Total investment income ............................................................................. 276,898
----------
EXPENSES
Investment advisory fee ............................................................................... 114,061
Financial agent fee ................................................................................... 44,408
Administration fee .................................................................................... 9,758
Professional .......................................................................................... 27,994
Printing .............................................................................................. 23,041
Custodian ............................................................................................. 21,359
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 10,517
----------
Total expenses ...................................................................................... 257,069
Less expenses borne by investment adviser ........................................................... (123,998)
----------
Net expenses ........................................................................................ 133,071
----------
NET INVESTMENT INCOME ................................................................................... 143,827
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 23,965
Net change in unrealized appreciation (depreciation) on investments ................................... 4,603,017
----------
NET GAIN ON INVESTMENTS ................................................................................. 4,626,982
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $4,770,809
==========
See Notes to Financial Statements
91
PHOENIX-LAZARD INTERNATIONAL EQUITY SELECT SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) ................................................................. $ 143,827 $ 1,628
Net realized gain (loss) ..................................................................... 23,965 (87,977)
Net change in unrealized appreciation (depreciation) ......................................... 4,603,017 32,416
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................. 4,770,809 (53,933)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................ (153,304) --
Net realized short-term gains ................................................................ (25,313) --
Net realized long-term gains ................................................................. (197) --
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .................................... (178,814) --
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,311,569 and 425,410 shares, respectively) ................... 24,541,980 4,118,471
Net asset value of shares issued from reinvestment of distributions (14,781 and
0 shares, respectively) .................................................................... 178,814 --
Cost of shares repurchased (203,213 and 123,971 shares, respectively) ........................ (2,256,026) (1,177,547)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .................................... 22,464,768 2,940,924
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................ 27,056,763 2,886,991
NET ASSETS
Beginning of period .......................................................................... 2,886,991 --
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND
$1,628, RESPECTIVELY) ...................................................................... $29,943,754 $ 2,886,991
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period .............. $ 9.58 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) .................... 0.12(4) 0.01
Net realized and unrealized gain (loss) ......... 2.73 (0.43)
------ ------
TOTAL FROM INVESTMENT OPERATIONS .............. 2.85 (0.42)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ............ (0.07) --
Distributions from net realized gains ........... (0.01) --
------ ------
TOTAL DISTRIBUTIONS ........................... (0.08) --
------ ------
CHANGE IN NET ASSET VALUE ......................... 2.77 (0.42)
------ ------
NET ASSET VALUE, END OF PERIOD .................... $12.35 $ 9.58
====== ======
Total return ...................................... 29.82% (4.22)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........... $29,944 $2,887
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................... 1.05% 1.05%(2)
Net investment income ........................... 1.13% 0.26%(2)
Portfolio turnover ................................ 9% 70%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.03% and
10.26% for the periods ended December 31, 2003 and 2002.
(2) Annualized.
(3) Not annualized.
(4) Computed using average shares outstanding.
See Notes to Financial Statements
92
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital appreciation.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 38.94%,
underperforming the Russell 2000(R) Index 1, the series' benchmark, which
returned 47.25%. During this period, U.S. large cap stocks, as measured by the
S&P 500(R) Index 2, returned 28.71%. All performance figures assume reinvestment
of distributions. Past performance is not indicative of future results and
current performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The first two-and-a-half months of 2003, which saw a continuation of the
previous year's bear market, proved an anomaly in an otherwise bull market year.
In mid-March, just before the start of the war in Iraq, sentiment swung abruptly
from very negative to very positive. Investors rotated into stocks that stood to
gain the most from an improving economy; the stocks that benefited from this
change in sentiment included highly leveraged and economically sensitive
companies. In fact, many of the greatest beneficiaries were those same
lower-quality companies whose business models had been most questioned during
the bear market. This trend benefited smaller companies (as they tend to be more
sensitive to swings in the economy than larger companies), and small cap stocks
significantly outperformed during the year. Overall, 2003 proved to be a
reversal of 2002, in that the S&P 500(R) Index rose in the last 12 months by
roughly the same amount that it had fallen in 2002. In addition, the technology
sector, which led 2002's decline, proved to be 2003's strongest performer.
However, late in the year there were signs that the rebound in lower-quality
stocks had begun to fade as investors began to focus once again on individual
companies' fundamentals.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: During the year, the series was helped by stock selection in technology. For
example, Microsemi performed well. The company is in transition from being a
legacy military/aerospace integrated circuit provider to pursuing leading-edge
opportunities in the consumer, communications and auto markets. Microsemi has
assembled a portfolio of key technologies that will enable it to leverage its
existing competency into new, higher-growth markets.
The series also benefited from stock selection in health care, where
aaiPharma continues to benefit from its transition to a specialty pharmaceutical
company. Its R&D platform has provided value added product formulation and drug
life cycle management programs to many of the major pharmaceutical companies for
the past 20 years, and R&D is still the engine that is driving product
extensions through new formulations, dosing, etc.
Conversely, the series was hurt by stock selection in commercial services.
Tier Technologies saw its shares fall after the company reduced profit and
revenue forecasts at the beginning of 2003. However, given the company's high
long-term growth, which is increasingly taking the form of recurring
payment-processing revenue, we believe there is an opportunity both for margin
expansion and for earnings upside. Our overweight position in the energy sector
also detracted from returns, as did stock selection in the group: Lone Star
Technologies shares declined, as the company was hurt by weaker-than-expected
sales and higher steel costs.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: In the past, market recoveries have frequently seen a period during which
lower-quality, more cyclical stocks have outperformed. During these initial
stages of upswing, investors tend to seek out those companies that stand to gain
the most from an improvement in the economic landscape. Frequently, these
companies are the most volatile, debt-ridden, and cyclical stocks available. As
we may already be seeing, however, investors tend to turn their attention back
to the fundamentals
93
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
underpinning stocks, including a company's ability to generate strong returns on
its capital. We remain confident in our portfolio's holdings, as they feature
this sort of history of strong profitability, which over the long term is a key
determinant of a stock's performance.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Small-Cap Value Series 38.94% 24.83%
- --------------------------------------------------------------------------------
Russell 2000(R) Index 1 47.25% 31.46%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Small-Cap Value Series Russell 2000(R) Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $ 9,788 $ 9,922 $ 9,806
12/31/03 $13,600 $14,611 $12,622
1 The Russell 2000(R) Index is a market capitalization-weighted index of the
smallest 2,000 companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
94
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--96.2%
ADVERTISING--1.3%
ADVO, Inc. ......................................... 1,875 $ 59,550
Donnelley (R.H.) Corp. (b) ......................... 1,800 71,712
-----------
131,262
-----------
AEROSPACE & DEFENSE--1.6%
DRS Technologies, Inc. (b) ......................... 5,950 165,291
-----------
AGRICULTURAL PRODUCTS--0.9%
Delta & Pine Land Co. .............................. 3,600 91,440
-----------
AIR FREIGHT & COURIERS--1.3%
EGL, Inc. (b) ...................................... 4,000 70,240
Forward Air Corp. (b) .............................. 2,200 60,500
-----------
130,740
-----------
APPAREL RETAIL--0.7%
Gymboree Corp. (The) (b) ........................... 3,950 68,058
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--1.0%
Warnaco Group, Inc. (The) (b) ...................... 6,300 100,485
-----------
APPLICATION SOFTWARE--1.8%
Mentor Graphics Corp. (b) .......................... 5,750 83,605
Verity, Inc. (b) ................................... 5,900 98,471
-----------
182,076
-----------
AUTOMOBILE MANUFACTURERS--0.6%
Monaco Coach Corp. (b) ............................. 2,700 64,260
-----------
BIOTECHNOLOGY--1.0%
Celgene Corp. (b) .................................. 2,150 96,793
-----------
BROADCASTING & CABLE TV--1.0%
Liberty Corp. (The) ................................ 2,300 103,937
-----------
COMMODITY CHEMICALS--1.0%
Spartech Corp. ..................................... 4,200 103,488
-----------
COMMUNICATIONS EQUIPMENT--2.6%
C-COR.net Corp. (b) ................................ 9,100 101,283
CommScope, Inc. (b) ................................ 400 6,532
Extreme Networks, Inc. (b) ......................... 9,100 65,611
Powerwave Technologies, Inc. (b) ................... 12,000 91,800
-----------
265,226
-----------
COMPUTER STORAGE & PERIPHERALS--1.4%
Advanced Digital Information Corp. (b) ............. 4,150 58,100
Maxtor Corp. (b) ................................... 7,100 78,810
-----------
136,910
-----------
CONSTRUCTION & ENGINEERING--1.5%
Chicago Bridge & Iron Co. NV ....................... 3,050 88,145
Shaw Group, Inc. (The) (b) ......................... 4,900 66,738
-----------
154,883
-----------
CONSTRUCTION MATERIALS--0.4%
Florida Rock Industries, Inc. ...................... 800 43,880
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--1.8%
Federal Signal Corp. ............................... 5,400 94,608
Toro Co. (The) ..................................... 1,800 83,520
-----------
178,128
-----------
DISTILLERS & VINTNERS--0.6%
Mondavi (Robert) Corp. (The) Class A (b) ........... 1,550 60,202
-----------
SHARES VALUE
------- -----------
DIVERSIFIED CHEMICALS--0.6%
Olin Corp. ......................................... 2,850 $ 57,171
-----------
DIVERSIFIED COMMERCIAL SERVICES--3.6%
FTI Consulting, Inc. (b) ........................... 3,400 79,458
Kroll, Inc. (b) .................................... 4,000 104,000
Learning Tree International, Inc. (b) .............. 5,400 93,906
Watson Wyatt & Co. Holdings (b) .................... 3,400 82,110
-----------
359,474
-----------
DRUG RETAIL--0.6%
NeighborCare, Inc. (b) ............................. 3,200 63,200
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.7%
Roper Industries, Inc. ............................. 1,350 66,501
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--3.8%
Coherent, Inc. (b) ................................. 4,000 95,200
Electro Scientific Industries, Inc. (b) ............ 5,300 126,140
FLIR Systems, Inc. (b) ............................. 2,700 98,550
Varian, Inc. (b) ................................... 1,600 66,768
-----------
386,658
-----------
ELECTRONIC MANUFACTURING SERVICES--0.9%
Plexus Corp. (b) ................................... 4,800 82,416
Zygo Corp. (b) ..................................... 800 13,192
-----------
95,608
-----------
ENVIRONMENTAL SERVICES--1.1%
Waste Connections, Inc. (b) ........................ 2,900 109,533
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.8%
Scotts Co. (The) Class A (b) ....................... 1,300 76,908
-----------
FOOTWEAR--0.9%
Timberland Co. (The) Class A (b) ................... 1,700 88,519
-----------
GAS UTILITIES--1.6%
AGL Resources, Inc. ................................ 1,850 53,835
Kinder Morgan Management LLC (b) ................... 2,479 106,498
-----------
160,333
-----------
HEALTH CARE DISTRIBUTORS--1.2%
Andrx Corp. (b) .................................... 5,200 125,008
-----------
HEALTH CARE EQUIPMENT--0.5%
INAMED Corp. (b) ................................... 975 46,858
-----------
HEALTH CARE FACILITIES--2.3%
Kindred Healthcare, Inc. (b) ....................... 1,200 62,376
LifePoint Hospitals, Inc. (b) ...................... 3,900 114,855
Manor Care, Inc. ................................... 1,500 51,855
-----------
229,086
-----------
HEALTH CARE SERVICES--2.3%
Covance, Inc. (b) .................................. 3,000 80,400
Inveresk Research Group, Inc. (b) .................. 3,000 74,190
MIM Corp. (b) ...................................... 10,900 76,627
-----------
231,217
-----------
HEALTH CARE SUPPLIES--1.2%
Fisher Scientific International, Inc. (b) .......... 3,050 126,178
-----------
HOME ENTERTAINMENT SOFTWARE--0.9%
Activision, Inc. (b) ............................... 4,900 89,180
-----------
HOTELS, RESORTS & CRUISE LINES--0.6%
Intrawest Corp. .................................... 3,150 58,243
-----------
See Notes to Financial Statements
95
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
SHARES VALUE
------- -----------
HOUSEWARES & SPECIALTIES--1.4%
Tempur-Pedic International, Inc. (b) ............... 5,800 $ 89,900
Yankee Candle Co., Inc. (The) (b) .................. 1,900 51,927
-----------
141,827
-----------
INDUSTRIAL MACHINERY--0.9%
Nordson Corp. ...................................... 2,550 88,051
-----------
INTEGRATED TELECOMMUNICATION SERVICES--0.9%
TALK America Holdings, Inc. (b) .................... 7,900 91,008
-----------
INTERNET SOFTWARE & SERVICES--0.3%
PEC Solutions, Inc. (b) ............................ 1,900 32,205
-----------
IT CONSULTING & OTHER SERVICES--1.8%
BearingPoint, Inc. (b) ............................. 10,900 109,981
Titan Corp. (The) (b) .............................. 3,100 67,611
-----------
177,592
-----------
LEISURE PRODUCTS--0.8%
Brunswick Corp. .................................... 2,500 79,575
-----------
LIFE & HEALTH INSURANCE--0.5%
StanCorp Financial Group, Inc. ..................... 800 50,304
-----------
MOVIES & ENTERTAINMENT--1.0%
AMC Entertainment, Inc. (b) ........................ 6,600 100,386
-----------
MULTI-LINE INSURANCE--1.0%
HCC Insurance Holdings, Inc. ....................... 3,100 98,580
-----------
MULTI-UTILITIES & UNREGULATED POWER--0.9%
Energen Corp. ...................................... 850 34,875
MDU Resources Group, Inc. .......................... 2,400 57,144
-----------
92,019
-----------
OFFICE SERVICES & SUPPLIES--1.0%
Miller (Herman), Inc. .............................. 4,200 101,934
-----------
OIL & GAS DRILLING--1.1%
Helmerich & Payne, Inc. ............................ 3,900 108,927
-----------
OIL & GAS EQUIPMENT & SERVICES--1.9%
Cal Dive International, Inc. (b) ................... 4,150 100,056
Key Energy Services, Inc. (b) ...................... 8,550 88,151
-----------
188,207
-----------
OIL & GAS EXPLORATION & PRODUCTION--1.1%
Newfield Exploration Co. (b) ....................... 2,600 115,804
-----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--0.4%
Western Gas Resources, Inc. ........................ 950 44,888
-----------
PACKAGED FOODS & MEATS--1.2%
American Italian Pasta Co. Class A (b) ............. 2,800 117,320
-----------
PAPER PACKAGING--0.7%
Packaging Corporation of America ................... 3,150 68,859
-----------
PERSONAL PRODUCTS--0.7%
Arden (Elizabeth), Inc. (b) ........................ 3,500 69,720
-----------
PHARMACEUTICALS--2.2%
aaiPharma, Inc. (b) ................................ 5,800 145,696
Able Laboratories, Inc. (b) ........................ 4,500 81,315
-----------
227,011
-----------
PROPERTY & CASUALTY INSURANCE--0.6%
RLI Corp. .......................................... 1,550 58,063
-----------
SHARES VALUE
------- -----------
PUBLISHING & PRINTING--3.3%
Journal Register Co. (b) ........................... 4,600 $ 95,220
ProQuest Co. (b) ................................... 2,550 75,098
Pulitzer, Inc. ..................................... 1,000 54,000
Scholastic Corp. (b) ............................... 3,250 110,630
-----------
334,948
-----------
REGIONAL BANKS--7.1%
Chittenden Corp. ................................... 1,350 45,414
Community First Bankshares, Inc. ................... 3,200 92,608
East West Bancorp, Inc. ............................ 600 32,208
First Community Bancorp ............................ 1,600 57,824
First Midwest Bancorp, Inc. ........................ 3,300 106,953
Hudson United Bancorp .............................. 2,200 81,290
South Financial Group, Inc. (The) .................. 1,500 41,790
Sterling Bancshares, Inc. .......................... 8,000 106,640
United Bankshares, Inc. ............................ 3,250 101,400
Westamerica Bancorp ................................ 1,000 49,700
-----------
715,827
-----------
REINSURANCE--1.2%
Max Re Capital Ltd. ................................ 3,250 72,930
Reinsurance Group of America, Inc. ................. 1,200 46,380
-----------
119,310
-----------
REITS--5.2%
Alexandria Real Estate Equities, Inc. .............. 700 40,530
Camden Property Trust .............................. 1,750 77,525
CarrAmerica Realty Corp. ........................... 1,950 58,071
Catellus Development Corp. ......................... 3,787 91,338
Healthcare Realty Trust, Inc. ...................... 2,200 78,650
Maguire Properties, Inc. ........................... 3,500 85,050
Mills Corp. (The) .................................. 2,250 99,000
-----------
530,164
-----------
RESTAURANTS--1.7%
Jack in the Box, Inc. (b) .......................... 4,100 87,576
Sonic Corp. (b) .................................... 2,750 84,205
-----------
171,781
-----------
SEMICONDUCTORS--5.0%
Actel Corp. (b) .................................... 3,050 73,505
AMIS Holdings, Inc. (b) ............................ 5,400 98,712
Exar Corp. (b) ..................................... 5,900 100,772
Lattice Semiconductor Corp. (b) .................... 8,000 77,440
Microsemi Corp. (b) ................................ 3,300 81,114
Zoran Corp. (b) .................................... 4,050 70,430
-----------
501,973
-----------
SPECIALIZED FINANCE--0.9%
Financial Federal Corp. (b) ........................ 3,000 91,650
-----------
SPECIALTY CHEMICALS--1.6%
Ferro Corp. ........................................ 3,250 88,433
PolyOne Corp. (b) .................................. 12,100 77,319
-----------
165,752
-----------
SPECIALTY STORES--0.7%
Guitar Center, Inc. (b) ............................ 2,100 68,418
-----------
STEEL--0.6%
GrafTech International Ltd. (b) .................... 4,400 59,400
-----------
SYSTEMS SOFTWARE--0.8%
Borland Software Corp. (b) ......................... 8,850 86,111
-----------
TECHNOLOGY DISTRIBUTORS--0.7%
ScanSource, Inc. (b) ............................... 1,550 70,711
-----------
See Notes to Financial Statements
96
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
SHARES VALUE
------- -----------
THRIFTS & MORTGAGE FINANCE--1.6%
IndyMac Bancorp, Inc. .............................. 3,450 $ 102,775
W Holding Co., Inc. ................................ 3,443 64,065
-----------
166,840
-----------
TRUCKING--1.3%
Swift Transportation Co., Inc. (b) ................. 4,050 85,131
USF Corp. .......................................... 1,350 46,157
-----------
131,288
-----------
TOTAL COMMON STOCKS
(Identified cost $8,031,746) ................................ 9,713,187
-----------
FOREIGN COMMON STOCKS--1.4%
ASSET MANAGEMENT & CUSTODY BANKS--0.5%
Stewart (W.P.) & Co. Ltd. (Bermuda) ................ 2,350 50,596
-----------
OFFICE SERVICES & SUPPLIES--0.9%
Moore Wallace, Inc. (Canada) (b) ................... 5,100 95,523
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $107,203) .................................. 146,119
-----------
TOTAL LONG TERM INVESTMENTS--97.6%
(Identified cost $8,138,949) ................................ 9,859,306
-----------
PAR
VALUE
(000) VALUE
----- -----------
SHORT-TERM OBLIGATIONS--2.7%
U.S. TREASURY BILLS--2.7%
U.S. Treasury Bill 0.80%, 2/5/04 ................... $135 $ 134,895
U.S. Treasury Bill 0.813%, 2/5/04 .................. 100 99,921
U.S. Treasury Bill 0.84%, 2/5/04 ................... 35 34,971
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $269,787) .................................. 269,787
-----------
TOTAL INVESTMENTS--100.3%
(Identified cost $8,408,736) ................................ 10,129,093(a)
Other assets and liabilities, net--(0.3)% ................... (31,055)
-----------
NET ASSETS--100.0% ............................................ $10,098,038
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,820,959 and gross
depreciation of $109,140 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$8,417,274.
(b) Non-income producing.
See Notes to Financial Statements
97
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $8,408,736) ............................................. $10,129,093
Cash .................................................................................................... 3,880
Receivables
Fund shares sold ...................................................................................... 19,226
Receivable from adviser ............................................................................... 9,641
Dividends ............................................................................................. 9,392
Tax reclaims .......................................................................................... 19
Prepaid expenses ........................................................................................ 74
-----------
Total assets ........................................................................................ 10,171,325
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 18,865
Professional fee ...................................................................................... 30,405
Printing fee .......................................................................................... 11,605
Financial agent fee ................................................................................... 3,670
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 636
Accrued expenses ........................................................................................ 5,746
-----------
Total liabilities ................................................................................... 73,287
-----------
NET ASSETS .............................................................................................. $10,098,038
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $ 8,330,021
Accumulated net realized gain ......................................................................... 47,660
Net unrealized appreciation ........................................................................... 1,720,357
-----------
NET ASSETS .............................................................................................. $10,098,038
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 750,452
===========
Net asset value and offering price per share ............................................................ $13.46
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 67,587
Interest .............................................................................................. 2,780
Foreign taxes withheld ................................................................................ (163)
----------
Total investment income ............................................................................. 70,204
----------
EXPENSES
Investment advisory fee ............................................................................... 48,993
Financial agent fee ................................................................................... 39,994
Administration fee .................................................................................... 4,192
Professional .......................................................................................... 30,733
Custodian ............................................................................................. 20,566
Printing .............................................................................................. 20,531
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 10,278
----------
Total expenses ...................................................................................... 181,218
Less expenses borne by investment adviser ........................................................... (124,058)
Custodian fees paid indirectly ...................................................................... (2)
----------
Net expenses ........................................................................................ 57,158
----------
NET INVESTMENT INCOME ................................................................................... 13,046
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 179,902
Net change in unrealized appreciation (depreciation) on investments ................................... 1,748,461
----------
NET GAIN ON INVESTMENTS ................................................................................. 1,928,363
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $1,941,409
==========
See Notes to Financial Statements
98
PHOENIX-LAZARD SMALL-CAP VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ 13,046 $ 3,201
Net realized gain (loss) ...................................................................... 179,902 (41,950)
Net change in unrealized appreciation (depreciation) .......................................... 1,748,461 (28,104)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................... 1,941,409 (66,853)
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ......................................................................... (6,124) (2,911)
Net realized short-term gains ................................................................. (54,144) --
Net realized long-term gains .................................................................. (38,427) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ..................................... (98,695) (2,911)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (464,398 and 344,996 shares, respectively) ...................... 5,550,981 3,443,850
Net asset value of shares issued from reinvestment of distributions (7,282 and 300 shares,
respectively) ............................................................................... 98,695 2,911
Cost of shares repurchased (64,584 and 1,940 shares, respectively) ............................ (752,269) (19,080)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... 4,897,407 3,427,681
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 6,740,121 3,357,917
NET ASSETS
Beginning of period ........................................................................... 3,357,917 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ...... $10,098,038 $3,357,917
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ............. $ 9.78 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................... 0.01 0.01
Net realized and unrealized gain (loss) ........ 3.80 (0.22)
------ ------
TOTAL FROM INVESTMENT OPERATIONS ............. 3.81 (0.21)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ........... (0.01) (0.01)
Distributions from net realized gains .......... (0.12) --
------ ------
TOTAL DISTRIBUTIONS .......................... (0.13) (0.01)
------ ------
CHANGE IN NET ASSET VALUE ........................ 3.68 (0.22)
------ ------
NET ASSET VALUE, END OF PERIOD ................... $13.46 $ 9.78
====== ======
Total return ..................................... 38.94% (2.12)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .......... $10,098 $3,358
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) .......................... 1.05%(2) 1.05%(3)
Net investment income .......................... 0.24% 0.26%(3)
Portfolio turnover ............................... 65% 33%(4)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.33% and
6.16% for the periods ended December 31, 2003 and 2002.
(2) 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) Annualized.
(4) Not annualized.
See Notes to Financial Statements
99
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital appreciation.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 28.78%,
underperforming the Russell 3000(R) Index 1, the series' benchmark, which
returned 31.06%. During this period, U.S. large cap stocks, as measured by the
S&P 500(R) Index 2, returned 28.71%. All performance figures assume reinvestment
of distributions. Past performance is not indicative of future results and
current performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The first two-and-a-half months of 2003, which saw a continuation of the
previous year's bear market, proved an anomaly in an otherwise bull market year.
In mid-March, just before the start of the war in Iraq, sentiment swung abruptly
from very negative to very positive. Investors rotated into stocks that stood to
gain the most from an improving economy; the stocks that benefited from this
change in sentiment included highly leveraged and economically sensitive
companies. In fact, many of the greatest beneficiaries were those same
lower-quality companies whose business models had been most questioned during
the bear market. This trend benefited smaller companies (as they tend to be more
sensitive to swings in the economy than larger companies), and as a result,
small and mid cap stocks outperformed during the year. Overall, 2003 proved to
be a reversal of 2002, in that the S&P 500(R) Index rose in the last 12 months
by roughly the same amount that it had fallen in 2002. In addition, the
technology sector, which led 2002's decline, proved to be 2003's strongest
performer. However, late in the year there were signs that the rebound in
lower-quality stocks had begun to fade as investors began to focus once again on
individual companies' fundamentals.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: During the year, the series benefited from stock selection in the consumer
discretionary sector, where Nike benefited from the overall better retailing
environment, coupled with continuing successful rollout of supply chain
initiatives. We expect both factors to continue to drive incremental gross
margin improvement. Stock selection in health care was helped by Barr
Pharmaceuticals, which continues to be one of the most well-managed and
well-positioned companies in the generics space as it invests substantially in
R&D to grow both its generic and branded businesses. Conversely, the series'
returns suffered somewhat due to stock selection in technology and commercial
services. In these sectors, Lazard has focused on companies that were able to
maintain profitability even in the adverse environment of recent years, while
the positive market sentiment of 2003 led to rotation into more volatile and
cyclical companies, such as semiconductor equipment makers and media.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: In the past, market recoveries have frequently seen a period during which
lower-quality, more cyclical stocks have outperformed. During these initial
stages of upswing, investors tend to seek out those companies that stand to gain
the most from an improvement in the economic landscape. Frequently, these
companies are the most volatile, debt-ridden, and cyclical stocks available. As
we may already be seeing, however, investors tend to turn their attention back
to the fundamentals underpinning stocks, including a company's ability to
generate strong returns on its capital. We remain confident in our portfolio's
holdings, as they feature this sort of history of strong financial productivity,
which over the long term is a key determinant of a stock's performance.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 3000(R) Index is a market capitalization-weighted index of the
3,000 largest U.S. companies. The index is calculated on a total-return basis
with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
100
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
U.S. Multi-Cap Series 28.78% 20.45%
- --------------------------------------------------------------------------------
Russell 3000(R) Index 1 31.06% 19.75%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
U.S. Multi-Cap Series Russell 3000(R) Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $10,050 $ 9,796 $ 9,806
12/31/03 $12,942 $12,839 $12,622
1 The Russell 3000(R) Index is a market capitalization-weighted index of the
3,000 largest U.S. companies. The index is calculated on a total-return basis
with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
101
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ ----------
COMMON STOCKS--95.2%
ADVERTISING--1.4%
Donnelley (R.H.) Corp. (b) ......................... 1,500 $ 59,760
----------
AEROSPACE & DEFENSE--1.4%
United Technologies Corp. .......................... 600 56,862
----------
APPAREL RETAIL--2.4%
Abercrombie & Fitch Co. Class A (b) ................ 1,600 39,536
TJX Cos., Inc. (The) ............................... 2,700 59,535
----------
99,071
----------
APPAREL, ACCESSORIES & LUXURY GOODS--1.7%
Polo Ralph Lauren Corp. ............................ 2,550 73,440
----------
AUTO PARTS & EQUIPMENT--1.5%
Lear Corp. ......................................... 1,050 64,396
----------
BROADCASTING & CABLE TV--1.0%
Comcast Corp. Special Class A (b) .................. 1,300 40,664
----------
CASINOS & GAMING--2.3%
Mandalay Resort Group .............................. 2,200 98,384
----------
COMPUTER HARDWARE--3.2%
Apple Computer, Inc. (b) ........................... 1,600 34,192
International Business Machines Corp. .............. 1,104 102,319
----------
136,511
----------
CONSUMER FINANCE--2.2%
American Express Co. ............................... 1,250 60,287
Student Loan Corp. (The) ........................... 225 32,850
----------
93,137
----------
DATA PROCESSING & OUTSOURCED SERVICES--2.5%
First Data Corp. ................................... 1,000 41,090
Iron Mountain, Inc. (b) ............................ 1,650 65,241
----------
106,331
----------
DIVERSIFIED BANKS--7.0%
Bank of America Corp. .............................. 1,550 124,666
Bank One Corp. ..................................... 2,050 93,460
Wells Fargo & Co. .................................. 1,300 76,557
----------
294,683
----------
DIVERSIFIED COMMERCIAL SERVICES--2.2%
ARAMARK Corp. Class B .............................. 3,150 86,373
Arbitron, Inc. (b) ................................. 100 4,172
----------
90,545
----------
ELECTRIC UTILITIES--1.0%
Entergy Corp. ...................................... 750 42,847
----------
ELECTRICAL COMPONENTS & EQUIPMENT--1.6%
Emerson Electric Co. ............................... 1,050 67,987
----------
ENVIRONMENTAL SERVICES--2.3%
Republic Services, Inc. ............................ 3,850 98,675
----------
FOOD RETAIL--1.7%
Kroger Co. (The) (b) ............................... 3,950 73,114
----------
FOOTWEAR--2.0%
NIKE, Inc. Class B ................................. 1,250 85,575
----------
GENERAL MERCHANDISE STORES--1.2%
Target Corp. ....................................... 1,300 49,920
----------
SHARES VALUE
------ ----------
HEALTH CARE DISTRIBUTORS--1.4%
AmerisourceBergen Corp. ............................ 1,050 $ 58,958
----------
HEALTH CARE SERVICES--3.9%
DaVita, Inc. (b) ................................... 1,200 46,800
Laboratory Corporation of America Holdings (b) ..... 2,550 94,223
WebMD Corp. (b) .................................... 2,800 25,172
----------
166,195
----------
HEALTH CARE SUPPLIES--0.7%
Edwards Lifesciences Corp. (b) ..................... 1,000 30,080
----------
HOME FURNISHINGS--0.8%
Mohawk Industries, Inc. (b) ........................ 500 35,270
----------
HOME IMPROVEMENT RETAIL--2.3%
Home Depot, Inc. (The) ............................. 2,750 97,598
----------
INDUSTRIAL CONGLOMERATES--1.5%
General Electric Co. (c) ........................... 2,050 63,509
----------
INDUSTRIAL MACHINERY--1.6%
ITT Industries, Inc. ............................... 900 66,789
----------
INSURANCE BROKERS--1.0%
Marsh & McLennan Cos., Inc. ........................ 900 43,101
----------
INTEGRATED OIL & GAS--4.2%
ChevronTexaco Corp. ................................ 700 60,473
Exxon Mobil Corp. .................................. 2,800 114,800
----------
175,273
----------
INTEGRATED TELECOMMUNICATION SERVICES--1.0%
MCI, Inc. (b) ...................................... 1,800 42,390
----------
INVESTMENT BANKING & BROKERAGE--1.0%
Lehman Brothers Holdings, Inc. ..................... 550 42,471
----------
LEISURE PRODUCTS--2.2%
Mattel, Inc. ....................................... 4,900 94,423
----------
LIFE & HEALTH INSURANCE--1.0%
MetLife, Inc. ...................................... 1,250 42,088
----------
MULTI-LINE INSURANCE--2.6%
American International Group, Inc. ................. 1,000 66,280
Hartford Financial Services Group, Inc. (The) ...... 700 41,321
----------
107,601
----------
OFFICE SERVICES & SUPPLIES--1.7%
Avery Dennison Corp. ............................... 1,250 70,025
----------
OIL & GAS DRILLING--1.5%
GlobalSantaFe Corp. ................................ 2,600 64,558
----------
OIL & GAS EQUIPMENT & SERVICES--1.2%
Baker Hughes, Inc. ................................. 1,550 49,848
----------
OTHER DIVERSIFIED FINANCIAL SERVICES--1.9%
Citigroup, Inc. .................................... 1,600 77,664
----------
PERSONAL PRODUCTS--1.1%
NBTY, Inc. (b) ..................................... 1,700 45,662
----------
PHARMACEUTICALS--6.8%
Barr Pharmaceuticals, Inc. (b) ..................... 500 38,475
Johnson & Johnson .................................. 1,200 61,992
Pfizer, Inc. ....................................... 3,450 121,888
Schering-Plough Corp. .............................. 3,650 63,474
----------
285,829
----------
See Notes to Financial Statements
102
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
SHARES VALUE
------ ----------
REGIONAL BANKS--3.5%
Charter One Financial, Inc. ........................ 1,350 $ 46,643
City National Corp. ................................ 950 59,014
SouthTrust Corp. ................................... 1,300 42,549
----------
148,206
----------
RESTAURANTS--1.4%
Yum! Brands, Inc. (b) .............................. 1,700 58,480
----------
SOFT DRINKS--4.1%
Pepsi Bottling Group, Inc. (The) ................... 4,300 103,974
PepsiCo, Inc. ...................................... 1,450 67,599
----------
171,573
----------
SPECIALTY CHEMICALS--1.4%
Rohm and Haas Co. .................................. 1,400 59,794
----------
SPECIALTY STORES--1.7%
Toys "R" Us, Inc. (b) .............................. 5,800 73,312
----------
SYSTEMS SOFTWARE--5.1%
Microsoft Corp. .................................... 4,800 132,192
Oracle Corp. (b) ................................... 6,300 83,160
----------
215,352
----------
TOTAL COMMON STOCKS
(Identified cost $3,375,221) ................................ 4,017,951
----------
FOREIGN COMMON STOCKS--3.4%
IT CONSULTING & OTHER SERVICES--2.4%
Accenture Ltd. Class A (Bermuda) (b) ............... 3,850 101,332
----------
PROPERTY & CASUALTY INSURANCE--1.0%
XL Capital Ltd. Class A (Bermuda) .................. 550 42,653
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $113,433) .................................. 143,985
----------
TOTAL LONG TERM INVESTMENTS--98.6%
(Identified cost $3,488,654) ................................ 4,161,936
----------
PAR
VALUE
(000) VALUE
----- ----------
SHORT-TERM OBLIGATIONS--3.0%
U.S. TREASURY BILLS--3.0%
U.S. Treasury Bill 0.80%, 2/5/04 ................... $125 $ 124,903
----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $124,903) .................................. 124,903
----------
TOTAL INVESTMENTS--101.6%
(Identified cost $3,613,557) ................................ 4,286,839(a)
Other assets and liabilities, net--(1.6)% ................... (68,292)
----------
NET ASSETS--100.0% ............................................ $4,218,547
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $679,522 and gross
depreciation of $9,190 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$3,616,507.
(b) Non-income producing.
(c) All or a portion segregated as collateral for long settlements.
See Notes to Financial Statements
103
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $3,613,557) ............................................. $4,286,839
Cash .................................................................................................... 52,488
Receivables
Investment securities sold ............................................................................ 45,075
Receivable from adviser ............................................................................... 13,933
Dividends ............................................................................................. 3,312
Fund shares sold ...................................................................................... 356
Prepaid expenses ........................................................................................ 46
----------
Total assets ........................................................................................ 4,402,049
----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 130,543
Fund shares repurchased ............................................................................... 920
Professional fee ...................................................................................... 30,042
Printing fee .......................................................................................... 11,357
Financial agent fee ................................................................................... 3,399
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 264
Accrued expenses ........................................................................................ 4,617
----------
Total liabilities ................................................................................... 183,502
----------
NET ASSETS .............................................................................................. $4,218,547
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $3,513,251
Accumulated net realized gain ......................................................................... 32,014
Net unrealized appreciation ........................................................................... 673,282
----------
NET ASSETS .............................................................................................. $4,218,547
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 334,365
==========
Net asset value and offering price per share ............................................................ $12.62
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 43,104
Interest .............................................................................................. 945
Foreign taxes withheld ................................................................................ (148)
--------
Total investment income ............................................................................. 43,901
--------
EXPENSES
Investment advisory fee ............................................................................... 23,856
Financial agent fee ................................................................................... 38,470
Administration fee .................................................................................... 2,296
Professional .......................................................................................... 31,674
Printing .............................................................................................. 20,056
Custodian ............................................................................................. 8,093
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 10,340
--------
Total expenses ...................................................................................... 140,716
Less expenses borne by investment adviser ........................................................... (112,374)
Custodian fees paid indirectly ...................................................................... (14)
--------
Net expenses ........................................................................................ 28,328
--------
NET INVESTMENT INCOME ................................................................................... 15,573
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 152,596
Net change in unrealized appreciation (depreciation) on investments ................................... 628,096
--------
NET GAIN ON INVESTMENTS ................................................................................. 780,692
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $796,265
========
See Notes to Financial Statements
104
PHOENIX-LAZARD U.S. MULTI-CAP SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
FROM OPERATIONS
Net investment income (loss) ................................................................... $ 15,573 $ 5,101
Net realized gain (loss) ....................................................................... 152,596 (40,143)
Net change in unrealized appreciation (depreciation) ........................................... 628,096 45,186
---------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 796,265 10,144
---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................................................................... (15,573) (5,063)
Net realized short-term gains .................................................................. (36,216) --
Net realized long-term gains ................................................................... (44,223) --
---------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ...................................... (96,012) (5,063)
---------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (135,201 and 212,212 shares, respectively) ....................... 1,531,220 2,122,097
Net asset value of shares issued from reinvestment of distributions (7,616 and 508 shares,
respectively) ................................................................................ 96,012 5,063
Cost of shares repurchased (18,973 and 2,199 shares, respectively) ............................. (219,646) (21,533)
---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ...................................... 1,407,586 2,105,627
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... 2,107,839 2,110,708
NET ASSETS
Beginning of period ............................................................................ 2,110,708 --
---------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $37, RESPECTIVELY) ...... $4,218,547 $2,110,708
========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ............. $10.03 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................... 0.05 0.02
Net realized and unrealized gain (loss) ........ 2.84 0.03
------ ------
TOTAL FROM INVESTMENT OPERATIONS ............. 2.89 0.05
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ........... (0.05) (0.02)
Distributions from net realized gains .......... (0.25) --
------ ------
TOTAL DISTRIBUTIONS .......................... (0.30) (0.02)
------ ------
CHANGE IN NET ASSET VALUE ........................ 2.59 0.03
------ ------
NET ASSET VALUE, END OF PERIOD ................... $12.62 $10.03
====== ======
Total return ..................................... 28.78% 0.50%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .......... $4,219 $2,111
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) .......................... 0.95%(4) 0.95%(2)
Net investment income .......................... 0.52% 0.65%(2)
Portfolio turnover rate .......................... 73% 29%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 4.72% and
8.14% for the periods ended December 31, 2003 and 2002.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
105
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is high current income and long-term capital
appreciation to produce a high total return.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 17.76%, lagging
the Merrill Lynch High Yield Master II Index 1, which returned 28.15%, while the
Lehman Brothers Aggregate Bond Index 2 returned 4.10% during the period. All
performance figures assume reinvestment of distributions. Past performance is
not indicative of future results and current performance may be higher or lower
than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The year 2003 was quite favorable for the high yield market in a number of
aspects. Because of low interest rates, refinancing activity was robust, leading
to consistently high levels of new issuance throughout the year. Spreads
tightened significantly from their recent peak, reached in September 2002,
leading lower rated securities to outperform higher quality bonds in terms of
total return. In addition, default rates declined steadily throughout the year,
reflecting the widespread improvement in credit quality among high yield issues.
The high yield market was boosted by a combination of economic factors as
well. The U.S. economy grew in terms of reported gross domestic product (GDP)
throughout the first three quarters (the latest data available). Businesses
began to make capital investments once again. And the equities markets turned
positive. These and other factors created an overall atmosphere that was
beneficial, in our opinion, for the high yield, convertible securities and high
grade corporate markets.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: The high yield fixed income market was positive throughout most of 2003. This
had a positive effect on the performance of the series. Low interest rates led
to refinancing. And spreads also came down dramatically throughout the year as
credit quality improved.
Convertibles also had a favorable year. The convertible securities market
has historically been highly correlated to the equities markets, which rallied
through most of 2003.
The high grade bond market, the third piece of the strategy, also had a
good year, although lower-rated securities outpaced lower yielding securities.
The yield on the bellwether 10-year Treasury Note rose throughout the year as
the yield curve tightened. Although the series had a low exposure to treasury
securities during the year, the bond market has historically been responsive to
their movements.
One factor that hindered the series' performance in the year was its
limited exposure to the lowest-rated securities in the corporate markets.
According to its strategy, the series' holdings in the high yield market include
a minimal portion of securities rated CCC and below because that sector of the
credit market (with its relatively frequent defaults) has historically presented
a poor balance between risk and potential reward. Since this portion of the high
yield market made the strongest gains in the year, the series' performance
lagged the high yield market as a whole. Similarly, the lowest rated
convertibles outperformed their higher rated counterparts during the year. As
with high yield bonds, the outperformance by higher-risk convertibles also led
to some underperformance, relative to the convertible market as a whole, since
the series also maintains an investment grade bias in its convertible holdings.
106
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We believe the low level of inflation has been driving much of the action in
the bond market lately. Advances in technology keep ratcheting productivity
higher and effective cost cutting at every corporate level is allowing prices to
remain low. In our opinion, low inflation should continue through 2004.
We believe that the Federal Reserve (the "Fed") may tighten interest rates
as early as the second quarter of the year. But, in our opinion, given the low
level of inflation, the Fed would most likely take a gradual approach to raising
rates. Modest rate increases have historically been less likely to hinder an
ongoing economic recovery.
In our opinion, performance in 2004 will likely hinge on individual credit
risk. We believe bottom-up strategies will prove their mettle as issue selection
and portfolio construction take on even more prominence in driving performance.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Bond-Debenture Series 17.76% 17.63%
- --------------------------------------------------------------------------------
Merrill Lynch High Yield Master II Index 1 28.15% 25.12%
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 2 4.10% 5.88%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Merrill Lynch Lehman Brothers
Bond-Debenture Series High Yield Master II Index 1 Aggregate Bond Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $10,636 $10,530 $10,398
12/31/03 $12,525 $13,493 $10,824
1 The Merrill Lynch High Yield Master II Index measures total return performance
for high-yield bonds.
2 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total return performance and is provided for
general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
107
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
AGENCY MORTGAGE-BACKED SECURITIES--1.9%
Fannie Mae 6%, 5/1/32 ...................... AAA $ 36 $ 37,468
Fannie Mae 5.50%, 7/1/33 ................... AAA 224 227,178
-----------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $267,395) ................................... 264,646
-----------
AGENCY NON MORTGAGE-BACKED SECURITIES--0.6%
Freddie Mac 5.50%, 7/15/06 ................. Aaa(b) 75 80,809
-----------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(Identified cost $81,032) .................................... 80,809
-----------
CORPORATE BONDS--64.3%
AEROSPACE & DEFENSE--1.7%
Armor Holdings, Inc. 144A 8.25%,
8/15/13 (c) .............................. B+ 10 10,750
DRS Technologies, Inc. 144A 6.875%,
11/1/13 (c) .............................. B 55 56,788
Esterline Technologies Corp. 144A 7.75%,
6/15/13 (c) .............................. B+ 60 64,800
Raytheon Co. 4.85%, 1/15/11 ................ BBB- 100 100,132
-----------
232,470
-----------
AGRICULTURAL PRODUCTS--0.2%
Corn Products International, Inc. 8.45%,
8/15/09 .................................. BBB- 25 27,937
-----------
AIRLINES--0.3%
American Airlines, Inc. 8.608%, 4/1/11 ..... BBB 30 27,319
Delta Airlines, Inc. Series 01-1 7.711%,
9/18/11 .................................. BBB 15 13,291
-----------
40,610
-----------
ALUMINUM--0.2%
Century Aluminum Co. 11.75%, 4/15/08 ....... BB- 25 28,000
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--0.1%
Tommy Hilfiger USA, Inc. 6.85%, 6/1/08 ..... BBB- 15 15,037
-----------
APPLICATION SOFTWARE--0.3%
Activant Solutions, Inc. 10.50%, 6/15/11 ... B+ 45 48,656
-----------
ASSET MANAGEMENT & CUSTODY BANKS--0.4%
Franklin Resources, Inc. 3.70%, 4/15/08 .... A 50 49,729
-----------
AUTO PARTS & EQUIPMENT--1.8%
Collins & Aikman Products 10.75%,
12/31/11 ................................. B- 50 49,375
Dana Corp. 10.125%, 3/15/10 ................ BB 25 29,250
Delco Remy International, Inc. 11%, 5/1/09 . CCC+ 80 83,200
Eagle Picher Industries, Inc. 144A 9.75%,
9/1/13 (c) ............................... B- 40 43,400
Tenneco Automotive, Inc. Series B 10.25%,
7/15/13 .................................. CCC+ 20 22,850
TRW Automotive, Inc. 9.375%, 2/15/13 ....... B+ 25 28,687
-----------
256,762
-----------
AUTOMOBILE MANUFACTURERS--0.4%
General Motors Corp. 7.125%, 7/15/13 ....... BBB 50 54,833
-----------
BROADCASTING & CABLE TV--6.1%
Allbritton Communications Co. 7.75%,
12/15/12 ................................. B- 85 88,612
Charter Communications Holdings
LLC/Charter Communication Holdings
Capital Corp. 10%, 4/1/09 ................ CCC- 150 134,250
Clear Channel Communications, Inc. 4.625%,
1/15/08 .................................. BBB- 50 51,573
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
BROADCASTING & CABLE TV--CONTINUED
Comcast Corp. 5.85%, 1/15/10 ............... BBB $ 25 $ 26,693
CSC Holdings, Inc. Series B 8.125%, 8/15/09 BB- 100 108,000
DIRECTV Holdings LLC 8.375%, 3/15/13 ....... BB- 75 87,375
Echostar DBS Corp. 9.125%, 1/15/09 ......... BB- 33 37,084
Echostar DBS Corp. 144A 6.375%, 10/1/11 (c) BB- 15 15,450
Insight Communications Co., Inc. 0%,
2/15/11 (d) .............................. B- 100 86,000
Mediacom LLC/Mediacom Capital Corp.
Series B 8.50%, 4/15/08 .................. B+ 100 102,500
Paxson Communications Corp. 10.75%,
7/15/08 .................................. CCC+ 50 54,812
Sinclair Broadcast Group, Inc. 8.75%,
12/15/11 ................................. B 50 55,750
-----------
848,099
-----------
BUILDING PRODUCTS--0.6%
American Standard, Inc. 7.625%, 2/15/10 .... BB+ 25 28,500
Jacuzzi Brands, Inc. 144A 9.625%, 7/1/10 (c) B 55 60,775
-----------
89,275
-----------
CASINOS & GAMING--3.1%
Boyd Gaming Corp. 8.75%, 4/15/12 ........... B+ 75 82,687
Isle of Capri Casinos, Inc. 9%, 3/15/12 .... B 50 55,875
Mohegan Tribal Gaming Authority 6.375%,
7/15/09 .................................. BB- 75 77,813
Park Place Entertainment Corp. 7.50%,
9/1/09 ................................... BB+ 25 27,500
Penn National Gaming, Inc. 144A 6.875%,
12/1/11 (c) .............................. B 45 44,775
River Rock Entertainment Authority 144A
9.75%, 11/1/11 (c) ....................... B+ 75 81,000
Turning Stone Casino Resort Enterprise 144A
9.125%, 12/15/10 (c) ..................... B+ 30 32,775
Venetian Casino Resort LLC 11%, 6/15/10 .... B- 25 29,125
-----------
431,550
-----------
COMMERCIAL PRINTING--0.1%
Von Hoffmann Corp. 144A 10.25%,
3/15/09 (c) .............................. B2 10 10,700
-----------
COMMODITY CHEMICALS--0.1%
Koppers, Inc. 144A 9.875%, 10/15/13 (c) .... B 15 16,612
-----------
COMMUNICATIONS EQUIPMENT--0.2%
Corning, Inc. 7%, 3/15/07 .................. BB+ 35 35,175
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.5%
Case New Holland, Inc. 144A 9.25%,
8/1/11 (c) ............................... BB- 15 16,875
Cummins, Inc. 144A 9.50%, 12/1/10 (c) ...... BB+ 50 57,750
-----------
74,625
-----------
CONSUMER FINANCE--0.4%
Ford Motor Credit Co. 7.25%, 10/25/11 ...... BBB 50 54,228
-----------
DATA PROCESSING & OUTSOURCED SERVICES--0.9%
Iron Mountain, Inc. 7.75%, 1/15/15 ......... B 115 121,037
-----------
DEPARTMENT STORES--0.9%
Dillard's, Inc. 6.30%, 2/15/08 ............. BB 25 25,375
Penney (J.C.) Co., Inc. Series MTNA 6.875%,
10/15/15 ................................. BB+ 40 42,050
Saks, Inc. 9.875%, 10/1/11 ................. BB 50 59,750
-----------
127,175
-----------
See Notes to Financial Statements
108
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
DIVERSIFIED CHEMICALS--0.4%
Nalco Co. 144A 8.875%, 11/15/13 (c) ........ B $ 50 $ 53,250
-----------
DIVERSIFIED COMMERCIAL SERVICES--0.3%
Great Lakes Dredge & Dock Corp 144A
7.75%, 12/15/13 (c) ...................... B- 45 46,519
-----------
DRUG RETAIL--0.6%
Rite Aid Corp. 8.125%, 5/1/10 .............. B+ 75 81,000
-----------
ELECTRIC UTILITIES--1.7%
Teco Energy, Inc. 7.50%, 6/15/10 ........... BB+ 100 107,500
TXU Corp. Series J 6.375%, 6/15/06 ......... BBB- 25 26,437
Virginia Electric and Power Co. 4.50%,
12/15/10 ................................. BBB+ 100 100,829
-----------
234,766
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.4%
PerkinElmer, Inc. 8.875%, 1/15/13 .......... BB- 50 57,500
-----------
ELECTRONIC MANUFACTURING SERVICES--0.4%
Sanmina SCI Corp. 10.375%, 1/15/10 ......... BB- 50 58,750
-----------
ENVIRONMENTAL SERVICES--1.0%
Allied Waste North America 7.875%, 4/15/13 . BB- 75 81,562
Allied Waste North America Series B 10%,
8/1/09 ................................... B+ 50 54,250
-----------
135,812
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.9%
IMC Global, Inc. Series B 11.25%, 6/1/11 ... B+ 50 55,250
Terra Capital, Inc. 11.50%, 6/1/10 ......... B- 35 36,750
United Industries Corp. Series B 9.875%,
4/1/09 ................................... B- 35 36,837
-----------
128,837
-----------
FOOD DISTRIBUTORS--0.3%
Le-Natures, Inc. 144A 9.50%, 6/15/13 (c) ... B- 40 42,400
-----------
FOOD RETAIL--0.7%
Ingles Markets, Inc. 8.875%, 12/1/11 ....... B+ 40 40,400
Pinnacle Foods Holding Corp. 144A 8.25%,
12/1/13 (c) .............................. B 50 52,000
-----------
92,400
-----------
FOREST PRODUCTS--0.4%
Weyerhaeuser Co. 6.125%, 3/15/07 ........... BBB 50 54,191
-----------
GAS UTILITIES--1.5%
Northwest Pipeline Corp. 8.125%, 3/1/10 .... B+ 15 16,725
SEMCO Energy, Inc. 7.125%, 5/15/08 ......... BB- 100 104,625
Sonat, Inc. 6.875%, 6/1/05 ................. B 35 34,650
Sonat, Inc. 7.625%, 7/15/11 ................ B 25 23,281
Suburban Propane Partners LP/Suburban
Energy Finance Corp. 144A 6.875%,
12/15/13 (c) ............................. B 35 35,525
-----------
214,806
-----------
HEALTH CARE DISTRIBUTORS--0.6%
AmeriPath, Inc. 10.50%, 4/1/13 ............. B- 75 80,250
-----------
HEALTH CARE EQUIPMENT--0.5%
Medex, Inc. 144A 8.875%, 5/15/13 (c) ....... B- 70 75,600
-----------
HEALTH CARE FACILITIES--1.7%
Hanger Orthopedic Group, Inc. 10.375%,
2/15/09 .................................. B 25 28,500
IASIS Healthcare Corp. 8.50%, 10/15/09 ..... B- 50 52,375
Mariner Health Care, Inc. 144A 8.25%,
12/15/13 (c) ............................. B- 25 25,375
National Nephrology Associates, Inc. 144A
9%, 11/1/11 (c) .......................... B- 25 26,312
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
HEALTH CARE FACILITIES--CONTINUED
Tenet Healthcare Corp. 7.375%, 2/1/13 ...... BB- $ 50 $ 50,500
Triad Hospitals, Inc. Series B 8.75%, 5/1/09 B+ 50 54,438
-----------
237,500
-----------
HEALTH CARE SERVICES--0.2%
Prime Medical Services, Inc. 8.75%, 4/1/08 . B 25 24,250
-----------
HEALTH CARE SUPPLIES--0.1%
Fisher Scientific International, Inc. 8%,
9/1/13 ................................... B+ 10 10,775
-----------
HOMEBUILDING--0.9%
Beazer Homes USA, Inc. 8.375%, 4/15/12 ..... BB 25 27,687
Beazer Homes USA, Inc. 144A 6.50%,
11/15/13 (c) ............................. BB 30 30,112
Horton (D.R.), Inc. 6.875%, 5/1/13 ......... BB 25 26,750
William Lyons Homes, Inc. 10.75%, 4/1/13 ... B- 35 39,988
-----------
124,537
-----------
HOTELS, RESORTS & CRUISE LINES--2.2%
Gaylord Entertainment Co. 144A 8%,
11/15/13 (c) ............................. B- 85 90,100
Hard Rock Hotel, Inc. 144A 8.875%, 6/1/13 (c) B 100 107,000
Hilton Hotels Corp. 8.25%, 2/15/11 ......... BBB- 25 28,812
Host Marriott Corp. Series B 7.875%, 8/1/08 B+ 75 78,375
-----------
304,287
-----------
HOUSEHOLD APPLIANCES--0.6%
Blount, Inc. 13%, 8/1/09 ................... CCC 45 48,712
Fedders North America, Inc. 9.375%,
8/15/07 .................................. B- 30 30,300
-----------
79,012
-----------
HOUSEHOLD PRODUCTS--1.0%
JohnsonDiversey, Inc. Series B 9.625%,
5/15/12 .................................. B 25 28,000
Rayovac Corp. 8.50%, 10/1/13 ............... B- 100 106,500
-----------
134,500
-----------
INDUSTRIAL GASES--0.3%
Airgas, Inc. 9.125%, 10/1/11 ............... B+ 25 28,188
Airgas, Inc. Series MTN 7.75%, 9/15/06 ..... BB 20 21,100
-----------
49,288
-----------
INDUSTRIAL MACHINERY--1.4%
Manitowoc Co., Inc. (The) 7.125%, 11/1/13 .. B+ 100 103,875
Sensus Metering Systems, Inc. 144A
8.625%, 12/15/13 (c) ..................... B- 55 56,719
Wabtec Corp. 144A 6.875%, 7/31/13 (c) ...... BB 15 15,619
-----------
176,213
-----------
INTEGRATED TELECOMMUNICATION SERVICES--1.7%
Block Communications, Inc. 9.25%, 4/15/09 .. B- 25 27,000
Cincinnati Bell, Inc. 144A 8.375%,
1/15/14 (c) .............................. B- 75 81,000
Qwest Services Corp. 144A 13.50%,
12/15/10 (c) ............................. CCC+ 55 67,100
WorldCom, Inc. 6.50%, 4/15/10 (e) .......... NR 80 64,800
-----------
239,900
-----------
IT CONSULTING & OTHER SERVICES--0.6%
Titan Corp. 144A 8%, 5/15/11 (c) ........... B 75 85,500
-----------
LEISURE FACILITIES--0.2%
Six Flags, Inc. 9.50%, 2/1/09 .............. B 25 26,313
-----------
MANAGED HEALTH CARE--0.9%
PacifiCare Health Systems, Inc. 10.75%,
6/1/09 ................................... BB 16 18,960
UnitedHealth Group, Inc. 4.875%, 4/1/13 .... A 100 100,696
-----------
119,656
-----------
See Notes to Financial Statements
109
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
METAL & GLASS CONTAINERS--2.7%
Anchor Glass Container Corp. 11%, 2/15/13 .. B+ $ 50 $ 58,250
BWAY Finance Corp./BWAY Corp. 10%,
10/15/10 ................................. B- 50 54,750
Crown Cork & Seal Co., Inc. 7.375%,
12/15/26 ................................. B 100 90,875
Graham Packaging Co., Inc. Series B
10.75%, 1/15/09 .......................... CCC+ 15 15,562
Kraton Polymers LLC/Capital Corp. 144A
8.125%, 1/15/14 (c) ...................... B 10 10,450
Owens-Brockway Glass Container, Inc.
8.875%, 2/15/09 .......................... BB 60 66,075
Owens-Brockway Glass Container, Inc.
7.75%, 5/15/11 ........................... BB 50 53,938
Plastipak Holdings, Inc. 10.75%, 9/1/11 .... B+ 25 27,938
-----------
377,838
-----------
MOVIES & ENTERTAINMENT--0.4%
Cinemark USA, Inc. 9%, 2/1/13 .............. B- 50 56,500
-----------
MULTI-UTILITIES & UNREGULATED POWER--3.0%
AES Corp. (The) 144A 8.75%, 5/15/13 (c) .... B+ 75 84,187
Calpine Corp. 144A 8.50%, 7/15/10 (c) ...... BB- 125 121,250
Dynegy Holdings, Inc. 144A 9.875%,
7/15/10 (c) .............................. B- 45 50,850
El Paso Production Holding Co. 144A
7.75%, 6/1/13 (c) ........................ B+ 100 99,000
NRG Energy, Inc. 144A 8%, 12/15/13 (c) ..... B+ 30 31,688
Williams Cos., Inc. (The) 8.625%, 6/1/10 ... B+ 25 28,188
-----------
415,163
-----------
OIL & GAS DRILLING--0.1%
Parker Drilling Co. 144A 9.625%, 10/1/13 (c) B- 10 10,450
-----------
OIL & GAS EQUIPMENT & SERVICES--1.2%
Hanover Compress Co. 8.625%, 12/15/10 ...... B 40 41,800
Key Energy Services, Inc. 6.375%, 5/1/13 ... BB 50 51,000
Offshore Logistic, Inc. 6.125%, 6/15/13 .... BB+ 75 73,875
-----------
166,675
-----------
OIL & GAS EXPLORATION & PRODUCTION--1.4%
Chesapeake Energy Corp. 8.375%, 11/1/08 .... BB- 25 27,625
Houston Exploration Co. 144A 7%,
6/15/13 (c) .............................. B+ 75 77,813
Magnum Hunter Resources, Inc. 9.60%,
3/15/12 .................................. B+ 25 28,500
Pogo Producing Co. Series B 10.375%,
2/15/09 .................................. BB 15 15,975
Range Resources Corp. 7.375%, 7/15/13 ...... B- 50 50,250
-----------
200,163
-----------
PACKAGED FOODS & MEATS--3.0%
B&G Foods, Inc. Series D 9.625%, 8/1/07 .... B- 100 103,625
Dean Foods Co. 6.625%, 5/15/09 ............. BB- 100 105,500
Del Monte Corp. 144A 8.625%, 12/15/12 (c) .. B 35 38,500
Dole Foods Co., Inc. 8.875%, 3/15/11 ....... B+ 30 33,075
Land O Lakes, Inc. 8.75%, 11/15/11 ......... B- 40 35,200
Land O Lakes, Inc. 144A 9%, 12/15/10 (c) ... B 25 25,313
Michael Foods, Inc. 144A 8%, 11/15/13 (c) .. B- 80 83,800
-----------
425,013
-----------
PAPER PACKAGING--0.8%
Longview Fibre Co. 10%, 1/15/09 ............ B+ 25 27,563
Smurfit - Stone Container Corp. 8.25%,
10/1/12 .................................. B 25 27,250
Tekni-Plex, Inc. 144A 8.75%, 11/15/13
8.75%, 11/15/13 (c) ...................... B- 50 52,375
-----------
107,188
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
PAPER PRODUCTS--1.4%
Boise Cascade Corp. 6.50%, 11/1/10 ......... BB $ 50 $ 52,230
Buckeye Technologies, Inc. 8%, 10/15/10 .... B 75 73,875
Georgia-Pacific Corp. 8.25%, 3/1/23 ........ BB+ 75 76,500
-----------
202,605
-----------
PHARMACEUTICALS--0.7%
Alpharma, Inc. 144A 8.625%, 5/1/11 (c) ..... B 100 101,750
-----------
PUBLISHING & PRINTING--2.8%
American Color Graphics, Inc. 144A 10%,
6/15/10 (c) .............................. B 35 36,050
Dex Media East LLC/Dex Media East Finance
Co. 144A 8%, 11/15/13 (c) B .............. 100 105,500
Dex Media West LLC/Dex Media Finance
Co. 144A 9.875%, 8/15/13 (c) ............. B 50 57,940
Houghton Mifflin Co. 8.25%, 2/1/11 ......... B 75 80,625
PRIMEDIA, Inc. 8.875%, 5/15/11 ............. B 100 106,000
-----------
386,115
-----------
REITS--0.9%
Felcor Lodging LP 10%, 9/15/08 ............. B+ 25 27,125
Host Marriott LP Series G 9.25%, 10/1/07 ... B+ 50 56,125
Senior Housing Properties Trust 7.875%,
4/15/15 .................................. BB+ 35 36,925
-----------
120,175
-----------
RESTAURANTS--0.5%
Domino's, Inc. 144A 8.25%, 7/1/11 (c) ...... B- 40 43,050
O'Charley's, Inc. 144A 9%, 11/1/13 (c) ..... B 25 25,250
-----------
68,300
-----------
SPECIALTY STORES--0.5%
Cole National Group 8.875%, 5/15/12 ........ B 45 48,375
Couche-Tard U.S./Couche-Tard Finance
Corp. 144A 7.50%, 12/15/13 (c) ........... B 15 15,788
-----------
64,163
-----------
TIRES & RUBBER--0.5%
Goodyear Tire & Rubber Co. (The) 7.857%,
8/15/11 .................................. B+ 75 65,813
-----------
WATER UTILITIES--0.1%
National Waterworks, Inc. Series B 10.50%,
12/1/12 .................................. B 20 22,450
-----------
WIRELESS TELECOMMUNICATION SERVICES--4.5%
ACC Escrow Corp. 144A 10%, 8/1/11 (c) ...... B- 15 16,650
Alamosa Delaware, Inc. 11%, 7/31/10 ........ Caa(b) 100 109,000
Centennial Celluar Operating Co./Centennial
Communications Corp. 10.125%,
6/15/13 .................................. CCC 100 110,250
Dobson Communications Corp. 144A
8.875%, 10/1/13 (c) ...................... CCC+ 75 76,312
Nextel Communications, Inc. 9.50%, 2/1/11 .. B+ 35 39,725
Nextel Communications, Inc. 7.375%,
8/1/15 ................................... B+ 40 43,200
Nextel Partners, Inc. 8.125%, 7/1/11 ....... CCC+ 75 80,250
Rural Cellular Corp. 9.875%, 2/1/10 ........ CCC 50 53,500
TeleCorp PCS, Inc. 10.625%, 7/15/10 ........ BBB 58 67,798
Western Wireless Corp. 9.25%, 7/15/13 ...... CCC 25 26,500
-----------
623,185
-----------
TOTAL CORPORATE BONDS
(Identified cost $8,395,256) ................................. 8,943,868
-----------
See Notes to Financial Statements
110
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
FOREIGN CORPORATE BONDS--3.6%
CANADA--1.6%
Biovail Corp. 7.875%, 4/1/10 ............... BB- $ 75 $ 76,875
Bombardier Recreational Products, Inc. 144A
8.375%, 12/15/13 (c) ..................... B- 10 10,450
Millar Western Forest Products, Ltd. 144A
7.75%, 11/15/13 (c) ...................... B+ 50 52,125
Rogers Wireless Communications, Inc.
9.625%, 5/1/11 ........................... BB+ 25 30,000
Tembec Industries, Inc. 7.75%, 3/15/12 ..... BB+ 50 50,000
-----------
219,450
-----------
FRANCE--0.8%
Rhodia SA 144A 8.875%, 6/1/11 (c) .......... CCC+ 75 69,375
Vivendi Universal SA 144A 9.25%, 4/15/10 (c) BB 35 41,650
-----------
111,025
-----------
IRELAND--0.3%
Eirom Funding 8.25%, 8/15/13 ............... BB+ 20 22,250
JSG Funding plc 9.625%, 10/1/12 ............ B 25 28,125
-----------
50,375
-----------
SWEDEN--0.4%
Stena AB 144A 7.50%, 11/1/13 (c) ........... BB- 50 51,750
-----------
UNITED KINGDOM--0.2%
NTL, Inc. 11.20%, 11/15/07 (d) ............. C 35 35,525
-----------
UNITED STATES--0.3%
Tyco International Group SA 144A 6%,
11/15/13 (c) ............................. BBB- 40 41,200
-----------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $472,516) ................................... 509,325
-----------
CONVERTIBLE BONDS--16.2%
ADVERTISING--0.4%
Lamar Advertising Co. Cv. 2.875%,
12/31/10 ................................. B 50 51,250
-----------
AEROSPACE & DEFENSE--0.4%
L-3 Communications Holdings, Inc. Cv. 4%,
9/15/11 (d) .............................. BB- 50 54,937
-----------
APPLICATION SOFTWARE--1.6%
Documentum, Inc. Cv. 4.50%, 4/1/07 ......... BBB 100 119,125
Mentor Graphics Corp. Cv. 6.875%, 6/15/07 .. NR 100 106,375
-----------
225,500
-----------
BIOTECHNOLOGY--0.5%
Amgen, Inc. Cv. 0%, 3/1/32 ................. A+ 100 75,375
-----------
BROADCASTING & CABLE TV--0.9%
Liberty Media Corp. Cv. 3.25%, 3/15/31 ..... BBB- 100 104,000
Sinclair Broadcast Group, Inc. Cv. 4.875%,
7/15/18 .................................. B 15 16,556
-----------
120,556
-----------
COMMUNICATIONS EQUIPMENT--0.9%
Corning, Inc. Cv. 3.50%, 11/1/08 ........... BB+ 100 124,375
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--1.0%
AGCO Corp. Cv. 144A 1.75%, 12/31/33 (c) .... BB- 125 139,844
-----------
DATA PROCESSING & OUTSOURCED SERVICES--0.8%
First Data Corp. Cv. 2%, 3/1/08 ............ A+ 100 108,250
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.3%
Artesyn Technologies, Inc. Cv. 5.50%,
8/15/10 .................................. NA 30 40,725
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- -----------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.4%
Flir Systems, Inc. Cv. 144A 3%, 6/1/23 (c) . NR $ 50 $ 55,000
-----------
HEALTH CARE EQUIPMENT--0.4%
Medtronic, Inc. Cv. 1.25%, 9/15/21 ......... A- 50 51,187
-----------
HEALTH CARE FACILITIES--1.5%
Beverly Enterprises, Inc. Cv. 2.75%, 11/1/33 B 40 56,600
Lifepoint Hospital Holdings, Inc. Cv. 4.50%,
6/1/09 ................................... B 75 75,656
Universal Health Services, Inc. Cv. 0.426%,
6/23/20 .................................. BBB 125 82,344
-----------
214,600
-----------
HEALTH CARE SUPPLIES--0.8%
Fisher Scientific International, Inc. Cv.
144A 2.50%, 10/1/23 (c) .................. BB- 100 113,875
-----------
INDUSTRIAL CONGLOMERATES--0.7%
Tyco International Group SA Cv. 2.75%,
1/15/18 .................................. BBB- 75 95,719
-----------
MOVIES & ENTERTAINMENT--0.8%
Walt Disney Co. (The) Cv. 2.125%, 4/15/23 .. BBB+ 100 105,875
-----------
OFFICE ELECTRONICS--0.4%
Maxtor Corp. Cv. 6.80%, 4/30/10 ............ Ba (b) 40 57,350
-----------
OIL & GAS EXPLORATION & PRODUCTION--0.4%
Kerr-McGee Corp. Cv. 5.25%, 2/15/10 ........ BBB- 50 52,688
-----------
PACKAGED FOODS & MEATS--1.0%
General Mills, Inc. Cv. 0%, 10/28/22 ....... BBB+ 75 52,500
Nestle Holding, Inc. Series WW Cv. 3%,
5/9/05 ................................... AAA 80 91,952
-----------
144,452
-----------
PHOTOGRAPHIC PRODUCTS--0.2%
Eastman Kodak Co. 144A Cv. 3.375%,
10/15/33 (c) ............................. BBB- 20 22,200
-----------
SEMICONDUCTOR EQUIPMENT--0.4%
Teradyne, Inc. Cv. 3.75%, 10/15/06 ......... B+ 50 57,750
-----------
SEMICONDUCTORS--2.0%
LSI Logic Corp. Cv. 4%, 5/15/10 ............ B 100 111,125
Micron Technology, Inc. Cv. 2.50%, 2/1/10 .. B- 75 99,563
RF Micro Devices, Inc. Cv. 1.50%, 7/1/10 ... B- 50 75,625
-----------
286,313
-----------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Nextel Communications, Inc. Cv. 5.25%,
1/15/10 .................................. B+ 50 51,000
-----------
TOTAL CONVERTIBLE BONDS
(Identified cost $2,075,435) ................................. 2,248,821
-----------
FOREIGN CONVERTIBLE BONDS--1.3%
CANADA--0.8%
Fairmont Hotels and Resorts, Inc. Cv. 144A
3.75%, 12/1/23 (c) ....................... NR 15 15,731
Placer Dome, Inc. Cv. 144A 2.75%,
10/15/23 (c) ............................. BBB+ 75 89,719
-----------
105,450
-----------
ISRAEL--0.5%
Teva Pharmaceutical Finance NV Cv. 0.375%,
11/15/22 ................................. BBB 55 76,313
-----------
TOTAL FOREIGN CONVERTIBLE BONDS
(Identified cost $153,684) ................................... 181,763
-----------
See Notes to Financial Statements
111
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
SHARES VALUE
------ -----------
CONVERTIBLE PREFERRED STOCKS--4.5%
ADVERTISING--0.2%
Interpublic Group of Cos., Inc. Series A Cv. Pfd
5.375% ........................................... 325 $ 18,639
-----------
BROADCASTING & CABLE TV--0.5%
Sinclair Broadcasting Group, Inc. Cv. Pfd 6% ....... 1,500 74,025
-----------
COMMUNICATIONS EQUIPMENT--0.3%
Motorola, Inc. Cv. Pfd. 7% ......................... 1,000 43,430
-----------
ELECTRIC UTILITIES--1.4%
Dominion Resources, Inc. Cv. Pfd. 9.50% ............ 1,400 80,150
FPL Group, Inc. Cv. Pfd. 8% ........................ 2,000 112,980
-----------
193,130
-----------
MANAGED HEALTH CARE--0.3%
Anthem, Inc. Cv. Pfd 6% ............................ 500 44,115
-----------
MULTI-SECTOR HOLDINGS--0.5%
Prudential Financial, Inc. Cv. Pfd. 6.75% .......... 1,000 65,100
-----------
OIL & GAS EXPLORATION & PRODUCTION--0.9%
Chesapeake Energy Corp Cv. Pfd 6% .................. 1,000 75,500
Kerr-McGee Corp. Cv. Pfd 5.5% ...................... 1,000 49,900
-----------
125,400
-----------
PAPER PACKAGING--0.3%
Temple-Inland, Inc. Cv. Pfd. 7.50% ................. 700 40,684
-----------
THRIFTS & MORTGAGE FINANCE--0.1%
Doral Financial Corp. Cv. Pfd 4.75% ................ 70 18,134
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Identified cost $564,838) .................................. 622,657
-----------
TOTAL LONG TERM INVESTMENTS--92.4%
(Identified cost $12,010,156) ............................... 12,851,889
-----------
PAR
VALUE
(000) VALUE
----- -----------
SHORT-TERM OBLIGATIONS--6.1%
FEDERAL AGENCY SECURITIES--6.1%
FHLB Discount Note 0.75%, 1/2/04 ................... $848 $ 847,982
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $847,982) .................................. 847,982
-----------
TOTAL INVESTMENTS--98.5%
(Identified cost $12,858,138) ............................... 13,699,871(a)
Other assets and liabilities, net--1.5% ..................... 209,923
-----------
NET ASSETS--100.0% ............................................ $13,909,794
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $868,960 and gross
depreciation of $28,582 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$12,859,493.
(b) As rated by Moody's or Fitch.
(c) 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 December 31,
2003, these securities amounted to a value of $3,269,466 or 23.5% of net
assets.
(d) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(e) Security in default.
See Notes to Financial Statements
112
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $12,858,138) ............................................ $13,699,871
Cash .................................................................................................... 6,502
Receivables
Interest and dividends ................................................................................ 182,461
Fund shares sold ...................................................................................... 101,629
Receivable from adviser ............................................................................... 12,259
Prepaid expenses ........................................................................................ 121
-----------
Total assets ........................................................................................ 14,002,843
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 35,277
Professional fee ...................................................................................... 30,702
Printing fee .......................................................................................... 11,954
Financial agent fee ................................................................................... 3,829
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 870
Accrued expenses ........................................................................................ 8,057
-----------
Total liabilities ................................................................................... 93,049
-----------
NET ASSETS .............................................................................................. $13,909,794
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $13,071,854
Accumulated net realized loss ......................................................................... (3,793)
Net unrealized appreciation ........................................................................... 841,733
-----------
NET ASSETS .............................................................................................. $13,909,794
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 1,202,621
===========
Net asset value and offering price per share ............................................................ $11.57
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Interest .............................................................................................. $ 524,014
Dividends ............................................................................................. 24,495
----------
Total investment income ............................................................................. 548,509
----------
EXPENSES
Investment advisory fee ............................................................................... 60,712
Financial agent fee ................................................................................... 41,653
Administration fee .................................................................................... 6,233
Professional .......................................................................................... 30,663
Printing .............................................................................................. 21,241
Custodian ............................................................................................. 19,463
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 17,997
----------
Total expenses ...................................................................................... 203,893
Less expenses borne by investment adviser ........................................................... (130,988)
Custodian fees paid indirectly ...................................................................... (50)
----------
Net expenses ........................................................................................ 72,855
----------
NET INVESTMENT INCOME ................................................................................... 475,654
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 107,352
Net change in unrealized appreciation (depreciation) on investments ................................... 748,815
----------
NET GAIN ON INVESTMENTS ................................................................................. 856,167
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $1,331,821
==========
See Notes to Financial Statements
113
PHOENIX-LORD ABBETT BOND-DEBENTURE SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) ................................................................... $ 475,654 $ 57,450
Net realized gain (loss) ....................................................................... 107,352 13,144
Net change in unrealized appreciation (depreciation) ........................................... 748,815 92,918
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 1,331,821 163,512
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................................................................... (481,158) (57,069)
Net realized short-term gains .................................................................. (97,704) (5,171)
Net realized long-term gains ................................................................... (17,646) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ...................................... (596,508) (62,240)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,030,333 and 343,906 shares, respectively) ..................... 11,503,462 3,485,300
Net asset value of shares issued from reinvestment of distributions (52,712 and 5,971 shares,
respectively) ................................................................................ 596,508 62,240
Cost of shares repurchased (211,011 and 19,290 shares, respectively) ........................... (2,376,400) (197,901)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ...................................... 9,723,570 3,349,639
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... 10,458,883 3,450,911
NET ASSETS
Beginning of period ............................................................................ 3,450,911 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $381, RESPECTIVELY) ..... $13,909,794 $3,450,911
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ........... $10.44 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................. 0.59 0.18
Net realized and unrealized gain (loss) ...... 1.23 0.46
------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 1.82 0.64
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ......... (0.59) (0.18)
Distributions from net realized gains ........ (0.10) (0.02)
------ ------
TOTAL DISTRIBUTIONS ........................ (0.69) (0.20)
------ ------
CHANGE IN NET ASSET VALUE ...................... 1.13 0.44
------ ------
NET ASSET VALUE, END OF PERIOD ................. $11.57 $10.44
====== ======
Total return ................................... 17.76% 6.36%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........ $13,910 $3,451
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................ 0.90%(4) 0.90%(2)(4)
Net investment income ........................ 5.88% 5.87%(2)
Portfolio turnover rate ........................ 54% 24%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 2.52% and
7.03% for the periods ended December 31, 2003 and 2002, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
114
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series investment objective is capital appreciation with income as a
secondary consideration.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 30.24%, lagging
its benchmark, the S&P 500(R)/Barra Value Index 1, which returned 31.80%, but
ahead of the S&P 500(R) Index 2, which returned 28.71%. All performance figures
assume reinvestment of distributions. Past performance is not indicative of
future results and current performance may be higher or lower than the
performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: War and general geopolitical concerns had a negative effect on the psyche of
businesses and consumers during the first half of 2003. Corporations entered the
first quarter of 2003 cautiously and remained wary, selling existing inventories
and implementing layoffs, as the economy continued to decelerate. The
unemployment rate rose during the period, reaching 6.4% by June 2003. But, as
the coalition's war effort made clear progress in the early spring, the fog of
global uncertainty lifted, and broad equity indices experienced meaningful
advances.
In June, the Federal Reserve Board (the "Fed") cut interest rates by 25
basis points to 1%, in a continued attempt to spark the economy. With interest
rates at levels not seen for over 40 years, the Fed attempted a variety of
measures to promote and sustain economic growth. Over the past year, the U.S.
dollar weakened versus the euro. A weaker dollar can translate into more
competitive pricing for U.S. goods overseas. During the second quarter of 2003,
President Bush signed into law a tax reform/economic stimulus package with
accelerated tax cuts and dividend exclusions.
The U.S. economy continued to show signs of improvement during the third
quarter of 2003, as domestic growth prospects and reported corporate profits
improved. Further evidence of an economic recovery sparked the equity markets,
adding to the market gains experienced in the second quarter. Throughout 2003,
major indices advanced, but concerns over future growth grew as the summer
ended.
As the economy entered the final months of 2003, gross domestic product
(GDP) numbers showed that the U.S. economy expanded by an 8.2% rate in the third
quarter, well ahead of expectations and up from the 3.3% growth rate reported
for the second quarter. In addition, productivity data, an important gauge for
inflation, remained strong throughout the quarter and can be an important signal
that interest rates may remain low in the near term. As the period came to a
close, October's employment report showed an increase of 126,000 jobs, and while
the unemployment rate dropped to 5.7% in December, further employment data have
shown lower-than-expected job creation in December, disappointing some.
Historically, it is common for employment to lag economic recoveries, and Lord
Abbett believes 2004 will offer a clearer picture in the job market.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: Stock selection within the financial sector aided performance relative to the
S&P 500(R)/Barra Value Index 2. Several of the portfolio's financial services
holdings benefited from strong second quarterly earnings announcements.
Industrials sector holdings also contributed positively to performance for the
year; specifically, certain companies within this sector benefited from news of
stronger-than-expected third quarter earnings. In addition, the portfolio's
underweight in the telecomm services sector, relative to the S&P 500(R)/Barra
Value Index, further added to performance.
Stock selection in the health care sector detracted from relative
performance during the twelve months ended December 31, 2003. Certain
pharmaceutical company holdings, in particular, have been hurt by falling
expectations and increased competition for drugs. Stock selection within the
consumer discretionary sector hurt relative performance for the period.
Specifically, a consumer product manufacturer has been hurt by
weaker-than-anticipated sales in recent months. Additionally, the series'
overweight of the consumer staples sector, compared to the S&P 500(R)/Barra
Value Index, detracted from performance.
115
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: During the twelve months ended December 31, 2003, we added selectively to the
consumer discretionary sector. We also added selectively to some undervalued
consumer staples sector stocks. We continue to maintain a cyclical bias in the
portfolio, focusing on consumer cyclical, basic material and technology stocks,
which we believe will benefit from continued strengthening in the U.S. economy.
Going forward, we will continue to implement the disciplined investment process
and philosophy that has guided our firm for over seventy years.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Large-Cap Value Series 30.24% 20.33%
- --------------------------------------------------------------------------------
S&P 500(R)/Barra Value Index 1 31.80% 21.24%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Large-Cap Value Series S&P 500(R)/Barra Value Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $ 9,924 $ 9,910 $ 9,806
12/31/03 $12,925 $13,061 $12,622
1 The S&P 500(R)/Barra Value Index measures the total return performance of
companies with higher book-to-price ratios.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
116
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--90.2%
AGRICULTURAL PRODUCTS--0.5%
Archer Daniels Midland Co. ......................... 12,517 $ 190,509
-----------
AIRLINES--0.9%
AMR Corp. (b) ...................................... 9,054 117,249
Delta Air Lines, Inc. (b) .......................... 16,486 194,700
-----------
311,949
-----------
ALUMINUM--2.0%
Alcoa, Inc. ........................................ 18,830 715,540
-----------
APPAREL RETAIL--2.5%
Gap, Inc. (The) .................................... 24,438 567,206
Limited Brands ..................................... 18,117 326,649
-----------
893,855
-----------
ASSET MANAGEMENT & CUSTODY BANKS--2.5%
Bank of New York Co., Inc. (The) ................... 9,582 317,356
Mellon Financial Corp. ............................. 17,794 571,365
-----------
888,721
-----------
BROADCASTING & CABLE TV--3.4%
Clear Channel Communications, Inc. ................. 9,061 424,327
Comcast Corp. Special Class A (b) .................. 21,262 665,075
Cox Communications, Inc. Class A (b) ............... 4,100 141,245
-----------
1,230,647
-----------
COMMUNICATIONS EQUIPMENT--2.5%
Corning, Inc. (b) .................................. 16,043 167,329
Motorola, Inc. ..................................... 53,820 757,247
-----------
924,576
-----------
COMPUTER HARDWARE--2.3%
Apple Computer, Inc. (b) ........................... 39,282 839,456
-----------
COMPUTER STORAGE & PERIPHERALS--2.0%
EMC Corp. (b) ...................................... 55,715 719,838
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--3.4%
Caterpillar, Inc. .................................. 3,533 293,310
Deere & Co. ........................................ 14,271 928,328
-----------
1,221,638
-----------
DIVERSIFIED BANKS--7.0%
Bank One Corp. ..................................... 17,121 780,546
FleetBoston Financial Corp. ........................ 9,338 407,604
U.S. Bancorp ....................................... 11,644 346,758
Wachovia Corp. ..................................... 11,909 554,840
Wells Fargo & Co. .................................. 7,840 461,698
-----------
2,551,446
-----------
DIVERSIFIED CAPITAL MARKETS--0.6%
J.P. Morgan Chase & Co. ............................ 6,085 223,502
-----------
DIVERSIFIED CHEMICALS--1.0%
Du Pont (E.I.) de Nemours & Co. .................... 7,791 357,529
-----------
ELECTRIC UTILITIES--1.5%
FPL Group, Inc. .................................... 3,000 196,260
Progress Energy, Inc. .............................. 7,814 353,662
-----------
549,922
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.5%
Emerson Electric Co. ............................... 3,001 194,315
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.6%
Agilent Technologies, Inc. (b) ..................... 7,720 225,733
-----------
SHARES VALUE
------- -----------
ELECTRONIC MANUFACTURING SERVICES--0.3%
Solectron Corp. (b) ................................ 16,464 $ 97,302
-----------
ENVIRONMENTAL SERVICES--0.9%
Waste Management, Inc. ............................. 11,139 329,714
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.5%
Monsanto Co. ....................................... 6,434 185,171
-----------
FOOTWEAR--1.2%
NIKE, Inc. Class B ................................. 6,408 438,692
-----------
FOREST PRODUCTS--0.4%
Weyerhaeuser Co. ................................... 2,456 157,184
-----------
GENERAL MERCHANDISE STORES--1.3%
Target Corp. ....................................... 11,930 458,112
-----------
GOLD--1.5%
Newmont Mining Corp. ............................... 11,011 535,245
-----------
HEALTH CARE DISTRIBUTORS--0.9%
Cardinal Health, Inc. .............................. 5,200 318,032
-----------
HEALTH CARE EQUIPMENT--0.4%
Baxter International, Inc. ......................... 5,117 156,171
-----------
HEALTH CARE FACILITIES--0.1%
Tenet Healthcare Corp. (b) ......................... 3,300 52,965
-----------
HOUSEHOLD PRODUCTS--0.3%
Kimberly-Clark Corp. ............................... 1,700 100,453
-----------
HOUSEWARES & SPECIALTIES--0.4%
Newell Rubbermaid, Inc. ............................ 6,947 158,183
-----------
INDUSTRIAL CONGLOMERATES--1.5%
Tyco International Ltd. ............................ 20,601 545,926
-----------
INDUSTRIAL GASES--1.0%
Praxair, Inc. ...................................... 9,946 379,937
-----------
INDUSTRIAL MACHINERY--2.9%
Eaton Corp. ........................................ 4,737 511,501
Illinois Tool Works, Inc. .......................... 5,329 447,156
Parker Hannifin Corp. .............................. 1,257 74,792
-----------
1,033,449
-----------
INTEGRATED OIL & GAS--5.1%
Exxon Mobil Corp. .................................. 45,071 1,847,911
-----------
INTEGRATED TELECOMMUNICATION SERVICES--3.9%
BellSouth Corp. .................................... 5,109 144,585
Qwest Communications International, Inc. (b) ....... 34,000 146,880
SBC Communications, Inc. ........................... 14,600 380,622
Verizon Communications, Inc. ....................... 20,837 730,962
-----------
1,403,049
-----------
INVESTMENT BANKING & BROKERAGE--1.3%
Goldman Sachs Group, Inc. (The) .................... 800 78,984
Merrill Lynch & Co., Inc. .......................... 6,918 405,741
-----------
484,725
-----------
MANAGED HEALTH CARE--0.5%
CIGNA Corp. ........................................ 2,900 166,750
-----------
MOVIES & ENTERTAINMENT--4.0%
Viacom, Inc. Class B ............................... 15,889 705,154
Walt Disney Co. (The) .............................. 31,811 742,150
-----------
1,447,304
-----------
See Notes to Financial Statements
117
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
SHARES VALUE
------- -----------
MULTI-LINE INSURANCE--2.5%
American International Group, Inc. ................. 11,204 $ 742,601
Hartford Financial Services Group, Inc. (The) ...... 2,800 165,284
-----------
907,885
-----------
MULTI-UTILITIES & UNREGULATED POWER--0.5%
Constellation Energy Group, Inc. ................... 1,500 58,740
Public Service Enterprise Group, Inc. .............. 3,214 140,773
-----------
199,513
-----------
OFFICE ELECTRONICS--1.7%
Xerox Corp. (b) .................................... 43,847 605,089
-----------
OIL & GAS DRILLING--0.4%
GlobalSantaFe Corp. ................................ 5,900 146,497
-----------
OIL & GAS EQUIPMENT & SERVICES--3.2%
Baker Hughes, Inc. ................................. 18,730 602,357
Schlumberger Ltd. .................................. 10,094 552,343
-----------
1,154,700
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.2%
Citigroup, Inc. .................................... 16,675 809,404
-----------
PACKAGED FOODS & MEATS--3.7%
General Mills, Inc. ................................ 8,000 362,400
Heinz (H.J.) Co. ................................... 3,900 142,077
Kellogg Co. ........................................ 7,722 294,054
Kraft Foods, Inc. Class A .......................... 16,700 538,074
-----------
1,336,605
-----------
PAPER PRODUCTS--2.1%
International Paper Co. ............................ 17,484 753,735
-----------
PERSONAL PRODUCTS--0.7%
Gillette Co. (The) ................................. 6,997 257,000
-----------
PHARMACEUTICALS--4.6%
Abbott Laboratories ................................ 4,463 207,976
Merck & Co., Inc. .................................. 7,087 327,419
Schering-Plough Corp. .............................. 26,202 455,653
Wyeth .............................................. 16,088 682,936
-----------
1,673,984
-----------
PROPERTY & CASUALTY INSURANCE--0.3%
Allstate Corp. (The) ............................... 2,100 90,342
Travelers Property Casualty Corp. Class B .......... 1,300 22,061
-----------
112,403
-----------
PUBLISHING & PRINTING--2.1%
Gannett Co., Inc. .................................. 1,550 138,198
Tribune Co. ........................................ 12,060 622,296
-----------
760,494
-----------
RAILROADS--0.8%
CSX Corp. .......................................... 6,451 231,849
Union Pacific Corp. ................................ 1,047 72,746
-----------
304,595
-----------
SEMICONDUCTOR EQUIPMENT--0.4%
Teradyne, Inc. (b) ................................. 5,124 130,406
-----------
SEMICONDUCTORS--0.5%
Texas Instruments, Inc. ............................ 5,601 164,557
-----------
SOFT DRINKS--1.7%
PepsiCo, Inc. ...................................... 13,419 625,594
-----------
SHARES VALUE
------- -----------
SPECIALTY CHEMICALS--0.8%
Rohm and Haas Co. .................................. 6,503 $ 277,743
-----------
SPECIALTY STORES--0.4%
Staples, Inc. (b) .................................. 5,451 148,812
-----------
TOTAL COMMON STOCKS
(Identified cost $27,864,969) ............................... 32,704,467
-----------
FOREIGN COMMON STOCKS--3.5%
DISTILLERS & VINTNERS--0.4%
Diageo plc ADR (United Kingdom) .................... 2,800 148,008
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.5%
Potash Corporation of Saskatchewan, Inc.
(United States) .................................. 2,068 178,841
-----------
GOLD--0.4%
Barrick Gold Corp. (Canada) ........................ 6,100 138,531
-----------
INTEGRATED OIL & GAS--0.8%
BP plc ADR (United Kingdom) ........................ 6,200 305,970
-----------
LIFE & HEALTH INSURANCE--0.0%
China Life Insurance Co. Ltd. ADR (China) (b) ...... 400 13,188
-----------
PHARMACEUTICALS--1.2%
Novartis AG ADR (Switzerland) ...................... 9,500 435,955
-----------
RAILROADS--0.2%
Canadian National Railway Co. (Canada) ............. 907 57,395
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,089,724) ................................ 1,277,888
-----------
TOTAL LONG TERM INVESTMENTS--93.7%
(Identified cost $28,954,693) ............................... 33,982,355
-----------
PAR
VALUE
000)
------
SHORT-TERM OBLIGATIONS--7.3%
FEDERAL AGENCY SECURITIES--7.3%
FHLB Discount Note 0.75%, 1/2/04 ................... $2,631 2,630,945
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,630,945) ................................ 2,630,945
-----------
TOTAL INVESTMENTS--101.0%
(Identified cost $31,585,638) ............................... 36,613,300(a)
Other assets and liabilities, net--(1.0)% ................... (362,942)
-----------
NET ASSETS--100.0% ............................................ $36,250,358
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $5,240,935 and gross
depreciation of $250,505 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$31,622,870.
(b) Non-income producing.
See Notes to Financial Statements
118
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $31,585,638) ............................................ $36,613,300
Cash .................................................................................................... 814
Receivables
Fund shares sold ...................................................................................... 121,457
Investment securities sold ............................................................................ 81,691
Dividends ............................................................................................. 41,833
Receivable from adviser ............................................................................... 1,485
Prepaid expenses ........................................................................................ 213
-----------
Total assets ........................................................................................ 36,860,793
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 462,246
Fund shares repurchased ............................................................................... 85,130
Professional fee ...................................................................................... 30,037
Printing fee .......................................................................................... 13,750
Financial agent fee ................................................................................... 4,754
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 2,255
Accrued expenses ........................................................................................ 9,903
-----------
Total liabilities ................................................................................... 610,435
-----------
NET ASSETS .............................................................................................. $36,250,358
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $31,160,741
Accumulated net realized gain ......................................................................... 61,955
Net unrealized appreciation ........................................................................... 5,027,662
-----------
NET ASSETS .............................................................................................. $36,250,358
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 2,826,547
===========
Net asset value and offering price per share ............................................................ $12.82
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 275,743
Interest .............................................................................................. 12,992
Foreign taxes withheld ................................................................................ (458)
----------
Total investment income ............................................................................. 288,277
----------
EXPENSES
Investment advisory fee ............................................................................... 122,180
Financial agent fee ................................................................................... 46,655
Administration fee .................................................................................... 12,544
Custodian ............................................................................................. 48,384
Professional .......................................................................................... 30,441
Printing .............................................................................................. 24,606
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 10,517
----------
Total expenses ...................................................................................... 301,258
Less expenses borne by investment adviser ........................................................... (154,632)
Custodian fees paid indirectly ...................................................................... (10)
----------
Net expenses ........................................................................................ 146,616
----------
NET INVESTMENT INCOME ................................................................................... 141,661
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 137,337
Net change in unrealized appreciation (depreciation) on investments ................................... 5,031,710
----------
NET GAIN ON INVESTMENTS ................................................................................. 5,169,047
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $5,310,708
==========
See Notes to Financial Statements
119
PHOENIX-LORD ABBETT LARGE-CAP VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) ....................................................................... $ 141,661 $ 6,989
Net realized gain (loss) ........................................................................... 137,337 (6,477)
Net change in unrealized appreciation (depreciation) ............................................... 5,031,710 (4,048)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................................ 5,310,708 (3,536)
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................................................................. (141,661) (6,998)
Net realized short-term gains ...................................................................... (68,905) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .......................................... (210,566) (6,998)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,754,266 and 373,908 shares, respectively) ......................... 30,956,323 3,714,460
Net asset value of shares issued from reinvestment of distributions (16,471 and 708 shares,
respectively) .................................................................................... 210,566 6,998
Cost of shares repurchased (314,183 and 4,623 shares, respectively) ................................ (3,681,346) (46,251)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .......................................... 27,485,543 3,675,207
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .............................................................. 32,585,685 3,664,673
NET ASSETS
Beginning of period ................................................................................ 3,664,673 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ........... $36,250,358 $3,664,673
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period .......... $ 9.90 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................ 0.05 0.02
Net realized and unrealized gain (loss) ..... 2.94 (0.10)
------ ------
TOTAL FROM INVESTMENT OPERATIONS .......... 2.99 (0.08)
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ........ (0.05) (0.02)
Distributions from net realized gains ....... (0.02) --
------ ------
TOTAL DISTRIBUTIONS ....................... (0.07) (0.02)
------ ------
CHANGE IN NET ASSET VALUE ..................... 2.92 (0.10)
------ ------
NET ASSET VALUE, END OF PERIOD ................ $12.82 $ 9.90
====== ======
Total return .................................. 30.24% (0.76)% (3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ....... $36,250 $3,665
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ....................... 0.90% (4) 0.90% (2)(4)
Net investment income ....................... 0.87% 0.95% (2)
Portfolio turnover ............................ 25% 11% (3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.85% and
9.26% for the periods ended December 31, 2003 and 2002.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
120
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES INVESTMENT OBJECTIVE?
A: The series' investment objective is capital appreciation.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the year ending December 31, 2003, the series returned 24.47%, compared
to the S&P MidCap 400(R)/Barra Value Index 1, which returned 40.22% and the the
S&P 500(R) Index 2, which returned 28.71%. All performance figures assume
reinvestment of distributions. Past performance is not indicative of future
results and current performance may be higher or lower than the performance
shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: War and general geopolitical concerns had a negative effect on the psyche of
businesses and consumers during the first half of 2003. Corporations entered the
first quarter of 2003 cautiously and remained wary, selling existing inventories
and implementing layoffs, as the economy continued to decelerate. The
unemployment rate rose during the period, reaching 6.4% by June 2003. But, as
the coalition's war effort made clear progress in the early spring, the fog of
global uncertainty lifted, and broad equity indices experienced meaningful
advances.
In June, the Federal Reserve Board (the "Fed") cut interest rates by 25
basis points to 1%, in a continued attempt to spark the economy. With interest
rates at levels not seen for over 40 years, the Fed attempted a variety of
measures to promote and sustain economic growth. Over the past year, the U.S.
dollar weakened versus the euro. A weaker dollar can translate into more
competitive pricing for U.S. goods overseas. During the second quarter of 2003,
President Bush signed into law a tax reform/economic stimulus package with
accelerated tax cuts and dividend exclusions.
The U.S. economy continued to show signs of improvement during the third
quarter of 2003, as domestic growth prospects and reported corporate profits
improved. Further evidence of an economic recovery sparked the equity markets,
adding to the market gains experienced in the second quarter. Throughout 2003,
major indices advanced, but concerns over future growth grew as the summer
ended.
As the economy entered the final months of 2003, gross domestic product
(GDP) numbers showed that the U.S. economy expanded by an 8.2% rate in the third
quarter, well ahead of expectations and up from the 3.3% growth rate reported
for the second quarter. In addition, productivity data, an important gauge for
inflation, remained strong throughout the quarter and can be an important signal
that interest rates may remain low in the near term. As the period came to a
close, October's employment report showed an increase of 126,000 jobs, and while
the unemployment rate dropped to 5.7% in December, further employment data have
shown lower-than-expected job creation in December, disappointing some.
Historically, it is common for employment to lag economic recoveries, and Lord
Abbett believes 2004 will offer a clearer picture in the job market.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES PERFORMANCE THIS
YEAR?
A: Stock selection in the consumer discretionary sector detracted from relative
performance versus the S&P MidCap 400(R)/Barra Value Index for the twelve-month
period ended December 31, 2003. The returns of certain portfolio holdings in the
personal and household products industry suffered, as a result of disappointing
sales and excess production volume. Additionally, the series' lack of exposure
to the information technology sector hurt relative returns. The S&P MidCap
400(R)/Barra Value Index's sector holdings performed well, and as such, having
limited exposure proved detrimental. We continue to search for the combination
of catalysts and attractive valuations we believe necessary for us to
meaningfully add to the sector. An overweight position in the materials sector
also hurt relative performance for the time period. Although the sector posted
solid returns, on a relative basis it did not keep pace with other better
performing sectors.
The series' relative overweight position in the strong performing health
care sector aided returns, as the sector was among the top performers for the
time period. In addition, stock selection in the energy sector benefited
relative performance. Certain portfolio holdings in the oil well services and
equipment industry performed well, stemming from resolution of litigation and
increased demand for various services. The series' underweight position in the
telecomm services sector also aided relative returns.
121
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We remain focused on bottom-up selection of attractively valued stocks whose
issuing companies are likely to experience a set of catalysts that we believe
can enhance profitability. We believe the roots of a recovery are in place and
expect the economy to expand over the next twelve to eighteen months.
Recent feedback from meetings with management of a number of companies we
are invested in suggests they are beginning to see their businesses improve. We
believe pricing will continue to improve--albeit unevenly across the economic
sectors--and will aid profitability going forward. In our opinion, the next step
will be for manufacturing volumes to increase, further leveraging the growth in
earnings.
As a result of governmental actions to pump liquidity into the world's
financial system, it is our opinion that 2003 has been marked more by
speculation and valuation expansion than by the solid metrics that we have
relied on to implement our investment process. We do not expect this to continue
indefinitely, and look forward to the return to solid investment principles in
the not too distant future that have been the foundation of our success.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Mid-Cap Value Series 24.47% 17.14%
- --------------------------------------------------------------------------------
S&P MidCap 400(R)/Barra Value Index 1 40.22% 25.64%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Mid-Cap Value Series S&P MidCap 400(R)/Barra Value Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $10,004 $ 9,787 $ 9,806
12/31/03 $12,451 $13,723 $12,622
1 The S&P MidCap 400(R)/Barra Value Index measures the total return performance
of mid-size companies with higher book-to-price ratios.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
122
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--87.5%
ADVERTISING--1.2%
Interpublic Group of Cos., Inc. (The) (b) .......... 8,700 $ 135,720
-----------
AGRICULTURAL PRODUCTS--1.9%
Archer Daniels Midland Co. ......................... 14,700 223,734
-----------
APPAREL RETAIL--2.8%
Foot Locker, Inc. .................................. 9,900 232,155
Payless ShoeSource, Inc. (b) ....................... 7,700 103,180
-----------
335,335
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--1.7%
Hilfiger (Tommy) Corp. (b) ......................... 13,500 199,935
-----------
APPLICATION SOFTWARE--1.1%
Cadence Design Systems, Inc. (b) ................... 7,000 125,860
-----------
AUTO PARTS & EQUIPMENT--2.3%
Dana Corp. ......................................... 14,800 271,580
-----------
CASINOS & GAMING--1.4%
Park Place Entertainment Corp. (b) ................. 15,400 166,782
-----------
COMMUNICATIONS EQUIPMENT--0.3%
Avaya, Inc. (b) .................................... 2,900 37,526
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--1.3%
Cummins, Inc. ...................................... 3,200 156,608
-----------
DEPARTMENT STORES--2.8%
Federated Department Stores, Inc. .................. 1,100 51,843
May Department Stores Co. (The) .................... 1,800 52,326
Penney (J.C.) & Co., Inc. .......................... 8,700 228,636
-----------
332,805
-----------
DISTRIBUTORS--2.2%
Genuine Parts Co. .................................. 7,800 258,960
-----------
DIVERSIFIED CHEMICALS--2.7%
Eastman Chemical Co. ............................... 8,000 316,240
-----------
ELECTRIC UTILITIES--5.2%
Ameren Corp. ....................................... 5,500 253,000
CMS Energy Corp. (b) ............................... 15,300 130,356
Northeast Utilities ................................ 9,000 181,530
Puget Energy, Inc. ................................. 2,200 52,294
-----------
617,180
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--2.1%
Hubbell, Inc. Class B .............................. 5,600 246,960
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--4.1%
IMC Global, Inc. ................................... 17,500 173,775
Monsanto Co. ....................................... 10,700 307,946
-----------
481,721
-----------
FOOD RETAIL--0.5%
Safeway, Inc. (b) .................................. 2,600 56,966
-----------
GAS UTILITIES--2.0%
NiSource, Inc. ..................................... 5,900 129,446
Southwest Gas Corp. ................................ 4,700 105,515
-----------
234,961
-----------
GENERAL MERCHANDISE STORES--1.4%
Big Lots, Inc. (b) ................................. 11,200 159,152
-----------
HEALTH CARE SERVICES--1.9%
Caremark Rx, Inc. (b) .............................. 9,000 227,970
-----------
SHARES VALUE
------- -----------
HEALTH CARE SUPPLIES--2.3%
Bausch & Lomb, Inc. ................................ 5,200 $ 269,880
-----------
HOME FURNISHINGS--1.2%
Leggett & Platt, Inc. .............................. 6,800 147,084
-----------
HOUSEHOLD APPLIANCES--2.1%
Snap-on, Inc. ...................................... 7,800 251,472
-----------
HOUSEWARES & SPECIALTIES--1.9%
American Greetings Corp. Class A (b) ............... 2,500 54,675
Newell Rubbermaid, Inc. ............................ 7,200 163,944
-----------
218,619
-----------
INDUSTRIAL MACHINERY--1.7%
Timken Co. (The) ................................... 9,800 196,588
-----------
INSURANCE BROKERS--1.0%
Gallagher (Arthur J.) & Co. ........................ 3,600 116,964
-----------
MANAGED HEALTH CARE--3.8%
Aetna, Inc. ........................................ 3,600 243,288
Health Net, Inc. (b) ............................... 6,200 202,740
-----------
446,028
-----------
METAL & GLASS CONTAINERS--4.1%
Ball Corp. ......................................... 3,600 214,452
Pactiv Corp. (b) ................................... 11,300 270,070
-----------
484,522
-----------
OIL & GAS DRILLING--2.8%
GlobalSantaFe Corp. ................................ 5,200 129,116
Pride International, Inc. (b) ...................... 10,800 201,312
-----------
330,428
-----------
OIL & GAS EQUIPMENT & SERVICES--2.3%
Halliburton Co. .................................... 10,600 275,600
-----------
OIL & GAS EXPLORATION & PRODUCTION--2.0%
EOG Resources, Inc. ................................ 5,000 230,850
-----------
PACKAGED FOODS & MEATS--1.2%
Dean Foods Co. (b) ................................. 2,500 82,175
Smithfield Foods, Inc. (b) ......................... 2,700 55,890
-----------
138,065
-----------
PAPER PRODUCTS--4.4%
Georgia-Pacific Corp. .............................. 10,095 309,614
MeadWestvaco Corp. ................................. 7,200 214,200
-----------
523,814
-----------
PHARMACEUTICALS--1.8%
King Pharmaceuticals, Inc. (b) ..................... 4,900 74,774
Mylan Laboratories, Inc. ........................... 5,275 133,246
-----------
208,020
-----------
PROPERTY & CASUALTY INSURANCE--2.4%
SAFECO Corp. ....................................... 7,200 280,296
-----------
REINSURANCE--2.6%
Everest Re Group Ltd. .............................. 3,400 287,640
Transatlantic Holdings, Inc. ....................... 300 24,240
-----------
311,880
-----------
REITS--3.4%
Health Care Property Investors, Inc. ............... 900 45,720
Healthcare Realty Trust, Inc. ...................... 4,600 164,450
Host Marriott Corp. (b) ............................ 15,900 195,888
-----------
406,058
-----------
See Notes to Financial Statements
123
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
SHARES VALUE
------- -----------
RESTAURANTS--0.5%
Yum! Brands, Inc. (b) .............................. 1,600 $ 55,040
-----------
SPECIALTY CHEMICALS--1.1%
Crompton Corp. ..................................... 17,600 126,192
-----------
SPECIALTY STORES--2.0%
Office Depot, Inc. (b) ............................. 14,100 235,611
-----------
SYSTEMS SOFTWARE--1.6%
Sybase, Inc. (b) ................................... 9,300 191,394
-----------
THRIFTS & MORTGAGE FINANCE--0.9%
PMI Group, Inc. (The) .............................. 2,900 107,967
-----------
TRADING COMPANIES & DISTRIBUTORS--1.5%
Grainger (W.W.), Inc. .............................. 3,700 175,343
-----------
TOTAL COMMON STOCKS
(Identified cost $8,634,370) ................................ 10,313,710
-----------
FOREIGN COMMON STOCKS--6.8%
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.6%
CNH Global NV (Italy) .............................. 4,720 78,352
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--1.7%
Potash Corporation of Saskatchewan, Inc.
(United States) .................................. 2,300 198,904
-----------
PROPERTY & CASUALTY INSURANCE--2.4%
XL Capital Ltd. Class A (Bermuda) .................. 3,600 279,180
-----------
REINSURANCE--2.1%
PartnerRe Ltd. (Bermuda) ........................... 4,200 243,810
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $710,527) .................................. 800,246
-----------
TOTAL LONG TERM INVESTMENTS--94.3%
(Identified cost $9,344,897) ................................ 11,113,956
-----------
PAR
VALUE
(000) VALUE
----- -----------
SHORT-TERM OBLIGATIONS--7.5%
FEDERAL AGENCY SECURITIES--7.5%
FHLB Discount Note 0.75%, 1/2/04 ................... $886 $ 885,982
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $885,982) .................................. 885,982
-----------
TOTAL INVESTMENTS--101.8%
(Identified cost $10,230,879) ............................... 11,999,938(a)
Other assets and liabilities, net--(1.8)% ................... (211,581)
-----------
NET ASSETS--100.0% ............................................ $11,788,357
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,869,104 and gross
depreciation of $132,846 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$10,263,680.
(b) Non-income producing.
See Notes to Financial Statements
124
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $10,230,879) ............................................ $11,999,938
Cash .................................................................................................... 35,084
Receivables
Investment securities sold ............................................................................ 38,322
Fund shares sold ...................................................................................... 16,993
Dividends ............................................................................................. 11,195
Receivable from adviser ............................................................................... 6,957
Prepaid expenses ........................................................................................ 82
-----------
Total assets ........................................................................................ 12,108,571
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 255,879
Fund shares repurchased ............................................................................... 11,655
Professional fee ...................................................................................... 28,487
Financial agent fee ................................................................................... 3,623
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 724
Accrued expenses ........................................................................................ 17,486
-----------
Total liabilities ................................................................................... 320,214
-----------
NET ASSETS .............................................................................................. $11,788,357
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $10,095,174
Accumulated net realized loss ......................................................................... (75,876)
Net unrealized appreciation ........................................................................... 1,769,059
-----------
NET ASSETS .............................................................................................. $11,788,357
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 958,433
===========
Net asset value and offering price per share ............................................................ $12.30
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 104,420
Interest .............................................................................................. 4,632
Foreign taxes withheld ................................................................................ (303)
----------
Total investment income ............................................................................. 108,749
----------
EXPENSES
Investment advisory fee ............................................................................... 50,305
Financial agent fee ................................................................................... 40,204
Administration fee .................................................................................... 4,557
Professional .......................................................................................... 30,627
Printing .............................................................................................. 27,358
Custodian ............................................................................................. 18,316
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 10,374
----------
Total expenses ...................................................................................... 187,672
Less expenses borne by investment adviser ........................................................... (128,481)
Custodian fees paid indirectly ...................................................................... (9)
----------
Net expenses ........................................................................................ 59,182
----------
NET INVESTMENT INCOME ................................................................................... 49,567
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (4,430)
Net change in unrealized appreciation (depreciation) on investments ................................... 1,738,459
----------
NET GAIN ON INVESTMENTS ................................................................................. 1,734,029
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $1,783,596
==========
See Notes to Financial Statements
125
PHOENIX-LORD ABBETT MID-CAP VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ 49,567 $ 6,322
Net realized gain (loss) ...................................................................... (4,430) (12,917)
Net change in unrealized appreciation (depreciation) .......................................... 1,738,459 30,600
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................... 1,783,596 24,005
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ......................................................................... (48,688) (6,214)
Net realized short-term gains ................................................................. (57,339) --
Net realized long-term gains .................................................................. (2,585) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ..................................... (108,612) (6,214)
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (847,100 and 222,698 shares, respectively) ...................... 9,028,985 2,203,588
Net asset value of shares issued from reinvestment of distributions (8,853 and 629 shares,
respectively) ............................................................................... 108,612 6,214
Cost of shares repurchased (119,804 and 1,043 shares, respectively) ........................... (1,241,627) (10,190)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... 7,895,970 2,199,612
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 9,570,954 2,217,403
NET ASSETS
Beginning of period ........................................................................... 2,217,403 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND
$108, RESPECTIVELY) ......................................................................... $11,788,357 $2,217,403
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ........... $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................. 0.05 0.03
Net realized and unrealized gain (loss) ...... 2.38 (0.02)
------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 2.43 0.01
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ......... (0.05) (0.03)
Distributions from net realized gains ........ (0.06) --
------ ------
TOTAL DISTRIBUTIONS ........................ (0.11) (0.03)
------ ------
CHANGE IN NET ASSET VALUE ...................... 2.32 (0.02)
------ ------
NET ASSET VALUE, END OF PERIOD ................. $12.30 $ 9.98
====== ======
Total return ................................... 24.47% 0.04%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........ $11,788 $2,217
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................ 1.00%(4) 1.00%(2)(4)
Net investment income (loss) ................. 0.84% 1.11%(2)
Portfolio turnover ............................. 18% 6%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.17% and
10.05% for the periods ended December 31, 2003 and 2002, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
See Notes to Financial Statements
126
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long term growth of capital and future income rather than
current income.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the 12 months ended December 31, 2003, the series provided a total return
of 20.82%. This return compares with a return of 29.75% over the same period for
the series' benchmark, the Russell 1000(R) Growth Index 1 and the S&P 500(R)
Index 2 which returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: After three years of consecutive declines, growth stocks (as measured by the
Russell 1000(R) Growth Index) finished the 12 months ended December 31, 2003 in
positive territory. Each of the 13 sectors we track registered gains, with some
of the strongest advances coming from heretofore beleaguered utilities and
communications stocks as well as basic materials industries. However, the
biggest contributor to returns for our benchmark, the Russell 1000(R) Growth
Index, was technology. Stabilization in corporate demand for networking and
storage gear, together with robust consumer demand for electronics products such
as notebook PCs, flat panel displays, and wireless handsets, led to
overwhelmingly positive earnings revisions--and consequently, stock price
performance--across the technology sector.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: The series' performance lagged that of its benchmark during the period.
Positioning among technology, industrial goods and services, and business
services concerns comprised the chief areas of disappointment.
Maintaining an underweighted position and stock selection among technology
stocks in general, and semiconductor concerns in particular, hurt relative
results. Strong gains from portfolio holdings such as chip maker Analog Devices
and storage software provider VERITAS Software failed to fully offset the
performance drag of being underweighted in semiconductor giants Intel and Texas
Instruments. Stocks of electronic component makers and equipment suppliers
rallied strongly over the period as investors anticipated a cyclical rebound in
demand. By the end of the period, evidence of strength in specific product
markets led us to selectively increase our exposure to those areas.
Stock selection in the industrial goods and services area also hurt
performance. Our holding in aerospace and defense firm Northrop Grumman
disappointed as a number of one-time charges masked otherwise good operating
performance. We sold the stock during the period. Being underweighted in General
Electric also detracted from relative results as the stock delivered strong
performance for the year.
In business services, our position in Automatic Data Processing held back
performance. Early in 2003, the company had managed amid a weak
environment--soft demand for its payroll and financial services trade processing
services--by cutting costs. In March, ADP management signaled that they would
increase spending on their operations, a move that we felt would dampen future
earnings growth. The stock fell on the news of the change in strategy, and we
sold our position.
Retailer Kohl's was also a significant performance detractor. Weakness in
the moderate price apparel area led the company to report disappointing sales
and earnings. As of the end of the period, we felt this setback was temporary in
nature and viewed Kohl's as offering attractive longer-term growth.
The series' cash position also detracted from relative performance. This
series holds some cash to buy new holdings and to cover investor exchanges or
redemptions. In a period when equity markets rose sharply, holding cash hurt
performance against our benchmark, the Russell 1000(R) Growth Index, which has
no cash position.
Stockpicking in the health care sector boosted portfolio results. We
avoided or underweighted a number of large-cap pharmaceutical stocks because we
felt their medium-term growth prospects would be limited by patent expirations
on key products as well as a dearth of new drugs in the development pipeline.
Instead, we trained our sights on select biotechnology concerns we believed
would offer stronger sustainable growth. For example, we favored Genentech and
Amgen over Johnson & Johnson, in which we were relatively underweighted, and
Merck, which we did not own. This positioning proved beneficial during the
period.
127
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
Positioning among consumer staples concerns also contributed to
performance. Our holding in Avon Products benefited from strong cosmetics sales
in Latin America and Europe. Colgate Palmolive stock also contributed to
relative results. Conversely, Coca Cola, which we largely avoided over the
course of the year and did not own at period-end, suffered as volume growth
failed to live up to investor expectations.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
12/15/99 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Investors Growth Stock Series 20.82% (11.26)%
- --------------------------------------------------------------------------------
Russell 1000(R) Growth Index 1 29.75% (11.80)%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (4.37)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/15/99 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Investors Growth Stock Series Russell 1000(R) Growth Index 1 S&P 500(R) Index 2
12/15/99 $10,000 $10,000 $10,000
12/31/99 $10,600 $10,415 $10,400
12/29/00 $9,416 $8,079 $9,445
12/31/01 $7,171 $6,429 $8,323
12/31/02 $5,103 $4,637 $6,484
12/31/03 $6,166 $6,016 $8,345
1 The Russell 1000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
128
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--95.9%
AEROSPACE & DEFENSE--0.1%
Northrop Grumman Corp. ............................. 580 $ 55,448
-----------
AIR FREIGHT & COURIERS--0.5%
FedEx Corp. ........................................ 6,070 409,725
-----------
AIRLINES--0.8%
JetBlue Airways Corp. (b) .......................... 4,200 111,384
Southwest Airlines Co. ............................. 32,500 524,550
-----------
635,934
-----------
APPAREL RETAIL--0.3%
TJX Cos., Inc. (The) ............................... 12,800 282,240
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--0.4%
Coach, Inc. (b) .................................... 8,100 305,775
-----------
APPLICATION SOFTWARE--1.2%
Amdocs Ltd. (b) .................................... 8,500 191,080
Cadence Design Systems, Inc. (b) ................... 16,300 293,074
Intuit, Inc. (b) ................................... 5,600 296,296
Mercury Interactive Corp. (b) ...................... 4,500 218,880
-----------
999,330
-----------
ASSET MANAGEMENT & CUSTODY BANKS--0.5%
Bank of New York Co., Inc. (The) ................... 13,000 430,560
-----------
BIOTECHNOLOGY--4.0%
Amgen, Inc. (b) .................................... 30,085 1,859,253
Genentech, Inc. (b) ................................ 915 85,617
Genzyme Corp. (b) .................................. 9,900 488,466
Gilead Sciences, Inc. (b) .......................... 11,700 680,238
Invitrogen Corp. (b) ............................... 2,000 140,000
-----------
3,253,574
-----------
BREWERS--2.7%
Anheuser-Busch Cos., Inc. .......................... 41,835 2,203,868
-----------
BROADCASTING & CABLE TV--6.7%
Clear Channel Communications, Inc. ................. 16,655 779,954
Comcast Corp. Class A (b) .......................... 20,843 685,109
EchoStar Communications Corp. Class A (b) .......... 22,400 761,600
Liberty Media Corp. Class A (b) .................... 277,546 3,300,022
-----------
5,526,685
-----------
CASINOS & GAMING--0.2%
International Game Technology ...................... 5,600 199,920
-----------
COMMUNICATIONS EQUIPMENT--6.0%
Cisco Systems, Inc. (b) ............................ 184,745 4,487,456
Corning, Inc. (b) .................................. 21,700 226,331
QUALCOMM, Inc. ..................................... 4,400 237,292
-----------
4,951,079
-----------
COMPUTER & ELECTRONICS RETAIL--0.3%
Best Buy Co., Inc. ................................. 5,400 282,096
-----------
COMPUTER HARDWARE--3.7%
Apple Computer, Inc. (b) ........................... 7,100 151,727
Dell, Inc. (b) ..................................... 69,815 2,370,917
International Business Machines Corp. .............. 6,060 561,641
-----------
3,084,285
-----------
COMPUTER STORAGE & PERIPHERALS--0.2%
EMC Corp. (b) ...................................... 10,700 138,244
-----------
SHARES VALUE
------ -----------
CONSUMER FINANCE--2.6%
American Express Co. ............................... 21,825 $ 1,052,620
MBNA Corp. ......................................... 22,700 564,095
SLM Corp. .......................................... 14,740 555,403
-----------
2,172,118
-----------
DATA PROCESSING & OUTSOURCED SERVICES--1.2%
Affiliated Computer Services, Inc. Class A (b) ..... 6,400 348,544
First Data Corp. ................................... 5,590 229,693
Fiserv, Inc. (b) ................................... 10,500 414,855
Paychex, Inc. ...................................... 900 33,480
-----------
1,026,572
-----------
DEPARTMENT STORES--1.0%
Kohl's Corp. (b) ................................... 17,990 808,471
-----------
DIVERSIFIED COMMERCIAL SERVICES--0.6%
Apollo Group, Inc. Class A (b) ..................... 4,000 272,000
Career Education Corp. (b) ......................... 6,200 248,434
-----------
520,434
-----------
DRUG RETAIL--0.5%
Walgreen Co. ....................................... 10,900 396,542
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
Rockwell Automation, Inc. .......................... 4,000 142,400
-----------
FOOD DISTRIBUTORS--0.1%
Sysco Corp. ........................................ 1,500 55,845
-----------
FOOTWEAR--0.8%
NIKE, Inc. Class B ................................. 10,000 684,600
-----------
GENERAL MERCHANDISE STORES--1.2%
Target Corp. ....................................... 25,120 964,608
-----------
HEALTH CARE DISTRIBUTORS--0.8%
AmerisourceBergen Corp. ............................ 1,100 61,765
Cardinal Health, Inc. .............................. 9,700 593,252
-----------
655,017
-----------
HEALTH CARE EQUIPMENT--3.3%
Bard (C.R.), Inc. .................................. 4,100 333,125
Baxter International, Inc. ......................... 9,000 274,680
Biomet, Inc. ....................................... 11,000 400,510
Guidant Corp. ...................................... 10,000 602,000
Medtronic, Inc. .................................... 14,080 684,429
Zimmer Holdings, Inc. (b) .......................... 5,900 415,360
-----------
2,710,104
-----------
HEALTH CARE FACILITIES--0.3%
HCA, Inc. .......................................... 5,200 223,392
-----------
HEALTH CARE SERVICES--0.5%
Caremark Rx, Inc. (b) .............................. 16,200 410,346
-----------
HOME IMPROVEMENT RETAIL--0.9%
Home Depot, Inc. (The) ............................. 10,200 361,998
Lowe's Cos., Inc. .................................. 6,250 346,187
-----------
708,185
-----------
HOTELS, RESORTS & CRUISE LINES--0.8%
Carnival Corp. ..................................... 15,370 610,650
Hilton Hotels Corp. ................................ 3,200 54,816
-----------
665,466
-----------
See Notes to Financial Statements
129
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
SHARES VALUE
------ -----------
HOUSEHOLD PRODUCTS--2.2%
Clorox Co. (The) ................................... 4,600 $ 223,376
Colgate-Palmolive Co. .............................. 9,300 465,465
Procter & Gamble Co. (The) ......................... 11,130 1,111,664
-----------
1,800,505
-----------
HYPERMARKETS & SUPER CENTERS--0.9%
Wal-Mart Stores, Inc. .............................. 13,220 701,321
-----------
INDUSTRIAL CONGLOMERATES--7.0%
3M Co. ............................................. 12,320 1,047,569
General Electric Co. ............................... 103,270 3,199,305
Tyco International Ltd. ............................ 56,760 1,504,140
-----------
5,751,014
-----------
INDUSTRIAL GASES--0.3%
Air Products and Chemicals, Inc. ................... 4,900 258,867
-----------
INDUSTRIAL MACHINERY--1.0%
Danaher Corp. ...................................... 4,500 412,875
Eaton Corp. ........................................ 1,300 140,374
Illinois Tool Works, Inc. .......................... 3,300 276,903
-----------
830,152
-----------
INTEGRATED TELECOMMUNICATION SERVICES--0.5%
AT&T Wireless Services, Inc. (b) ................... 27,000 215,730
NTL, Inc. (b) ...................................... 3,300 230,175
-----------
445,905
-----------
INTERNET RETAIL--1.8%
eBay, Inc. (b) ..................................... 10,860 701,447
InterActiveCorp (b) ................................ 22,700 770,211
-----------
1,471,658
-----------
INTERNET SOFTWARE & SERVICES--0.2%
Yahoo!, Inc. (b) ................................... 4,500 203,265
-----------
INVESTMENT BANKING & BROKERAGE--1.3%
Goldman Sachs Group, Inc. (The) .................... 875 86,389
Merrill Lynch & Co., Inc. .......................... 2,360 138,414
Morgan Stanley ..................................... 11,300 653,931
Schwab (Charles) Corp. (The) ....................... 14,200 168,128
-----------
1,046,862
-----------
MOTORCYCLE MANUFACTURERS--1.0%
Harley-Davidson, Inc. .............................. 18,140 862,194
-----------
MOVIES & ENTERTAINMENT--5.6%
Time Warner, Inc. (b) .............................. 54,575 981,804
Viacom, Inc. Class B ............................... 80,390 3,567,708
Walt Disney Co. (The) .............................. 3,020 70,457
-----------
4,619,969
-----------
MULTI-LINE INSURANCE--1.4%
American International Group, Inc. ................. 17,500 1,159,900
-----------
OFFICE ELECTRONICS--0.0%
Zebra Technologies Corp. Class A (b) ............... 400 26,548
-----------
OIL & GAS EQUIPMENT & SERVICES--0.4%
BJ Services Co. (b) ................................ 4,900 175,910
Smith International, Inc. (b) ...................... 4,600 190,992
-----------
366,902
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.0%
Citigroup, Inc. .................................... 33,142 1,608,713
-----------
PERSONAL PRODUCTS--0.7%
Avon Products, Inc. ................................ 8,180 552,068
-----------
SHARES VALUE
------ -----------
PHARMACEUTICALS--10.9%
Abbott Laboratories ................................ 11,480 $ 534,968
Allergan, Inc. ..................................... 2,500 192,025
Forest Laboratories, Inc. (b) ...................... 4,900 302,820
Johnson & Johnson .................................. 55,435 2,863,772
Lilly (Eli) & Co. .................................. 5,775 406,156
Pfizer, Inc. ....................................... 116,208 4,105,628
Watson Pharmaceuticals, Inc. (b) ................... 2,900 133,400
Wyeth .............................................. 10,000 424,500
-----------
8,963,269
-----------
RESTAURANTS--0.3%
McDonald's Corp. ................................... 3,200 79,456
Outback Steakhouse, Inc. ........................... 3,200 141,472
-----------
220,928
-----------
SEMICONDUCTOR EQUIPMENT--2.7%
Applied Materials, Inc. (b) ........................ 91,140 2,046,093
Novellus Systems, Inc. (b) ......................... 4,660 195,953
-----------
2,242,046
-----------
SEMICONDUCTORS--4.0%
Analog Devices, Inc. (b) ........................... 15,670 715,336
Intel Corp. ........................................ 45,815 1,475,243
Microchip Technology, Inc. ......................... 8,400 280,224
Texas Instruments, Inc. ............................ 19,200 564,096
Xilinx, Inc. (b) ................................... 7,300 282,802
-----------
3,317,701
-----------
SOFT DRINKS--0.6%
PepsiCo, Inc. ...................................... 11,025 513,986
-----------
SPECIALTY STORES--0.7%
Bed Bath & Beyond, Inc. (b) ........................ 3,875 167,981
CarMax, Inc. (b) ................................... 3,300 102,069
Staples, Inc. (b) .................................. 10,000 273,000
-----------
543,050
-----------
SYSTEMS SOFTWARE--6.2%
Microsoft Corp. .................................... 80,920 2,228,537
Oracle Corp. (b) ................................... 130,210 1,718,772
Symantec Corp. (b) ................................. 21,400 741,510
VERITAS Software Corp. (b) ......................... 11,730 435,887
-----------
5,124,706
-----------
THRIFTS & MORTGAGE FINANCE--0.8%
Fannie Mae ......................................... 8,855 664,656
-----------
TOBACCO--0.3%
Altria Group, Inc. ................................. 5,100 277,542
-----------
TRADING COMPANIES & DISTRIBUTORS--0.2%
Grainger (W.W.), Inc. .............................. 2,800 132,692
-----------
WIRELESS TELECOMMUNICATION SERVICES--0.5%
Nextel Communications, Inc. Class A (b) ............ 14,300 401,258
-----------
TOTAL COMMON STOCKS
(Identified cost $71,898,934) ............................... 79,010,540
-----------
FOREIGN COMMON STOCKS--2.6%
AUTOMOBILE MANUFACTURERS--0.2%
Bayerische Motoren Werke AG (Germany) .............. 3,100 144,481
-----------
DIVERSIFIED METALS & MINING--0.2%
BHP Billiton Ltd. (Australia) ...................... 9,700 177,122
-----------
HEALTH CARE SUPPLIES--0.3%
Alcon, Inc. (United States) ........................ 3,700 223,998
-----------
See Notes to Financial Statements
130
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
SHARES VALUE
------ -----------
IT CONSULTING & OTHER SERVICES--0.3%
Accenture Ltd. Class A (Bermuda) (b) ............... 10,700 $ 281,624
-----------
MOVIES & ENTERTAINMENT--0.4%
News Corp. Ltd. (The) ADR (United States) .......... 10,000 361,000
-----------
PHARMACEUTICALS--0.2%
Roche Holding AG (Switzerland) ..................... 1,600 161,391
-----------
SEMICONDUCTORS--0.6%
Marvell Technology Group Ltd. (Bermuda) (b) ........ 5,700 216,201
Taiwan Semiconductor Manufacturing Co. Ltd. ADR
(Taiwan) (b) ..................................... 27,784 284,508
-----------
500,709
-----------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Vodafone Group plc (United Kingdom) ................ 117,600 291,574
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,057,993) ................................ 2,141,899
-----------
TOTAL LONG TERM INVESTMENTS--98.5%
(Identified cost $73,956,927) ............................... 81,152,439
-----------
PAR
VALUE
(000) VALUE
----- -----------
SHORT-TERM OBLIGATIONS--0.9%
FEDERAL AGENCY SECURITIES--0.9%
FHLB Discount Note 0.75%, 1/2/04 ................... $770 $ 769,984
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $769,984) .................................. 769,984
-----------
TOTAL INVESTMENTS--99.4%
(Identified cost $74,726,911) ............................... 81,922,423(a)
Other assets and liabilities, net--0.6% ..................... 536,380
-----------
NET ASSETS--100.0% ............................................ $82,458,803
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $8,244,137 and gross
depreciation of $5,051,233 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$78,729,519.
(b) Non-income producing.
See Notes to Financial Statements
131
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $74,726,911) ............................................ $ 81,922,423
Cash .................................................................................................... 444
Receivables
Investment securities sold ............................................................................ 1,919,212
Fund shares sold ...................................................................................... 137,890
Dividends and interest ................................................................................ 53,120
Tax reclaims .......................................................................................... 1,832
Prepaid expenses ........................................................................................ 1,138
------------
Total assets ........................................................................................ 84,036,059
------------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 1,230,100
Fund shares repurchased ............................................................................... 257,553
Financial agent fee ................................................................................... 7,298
Administration fee .................................................................................... 5,277
Investment advisory fee ............................................................................... 4,457
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 70,211
------------
Total liabilities ................................................................................... 1,577,256
------------
NET ASSETS .............................................................................................. $ 82,458,803
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $134,012,666
Accumulated net investment loss ....................................................................... (1,091)
Accumulated net realized loss ......................................................................... (58,748,572)
Net unrealized appreciation ........................................................................... 7,195,800
------------
NET ASSETS .............................................................................................. $ 82,458,803
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 13,378,457
============
Net asset value and offering price per share ............................................................ $6.16
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 644,769
Interest ...................................................................................................... 18,390
Foreign taxes withheld ........................................................................................ (3,562)
------------
Total investment income ..................................................................................... 659,597
------------
EXPENSES
Investment advisory fee ....................................................................................... 545,306
Financial agent fee ........................................................................................... 80,035
Administration fee ............................................................................................ 55,300
Custodian fee ................................................................................................. 110,241
Printing ...................................................................................................... 26,873
Trustees ...................................................................................................... 8,444
Professional .................................................................................................. 4,505
Miscellaneous ................................................................................................. 16,646
------------
Total expenses .............................................................................................. 847,350
Less expenses borne by investment adviser ................................................................... (122,434)
Custodian fees paid indirectly .............................................................................. (64)
------------
Net expenses ................................................................................................ 724,852
------------
NET INVESTMENT LOSS ............................................................................................. (65,255)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ............................................................................... (11,515,808)
Net realized loss on foreign currency transactions ............................................................ (651)
Net change in unrealized appreciation (depreciation) on investments ........................................... 26,233,058
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 218
------------
NET GAIN ON INVESTMENTS ......................................................................................... 14,716,817
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $ 14,651,562
============
See Notes to Financial Statements
132
PHOENIX-MFS INVESTORS GROWTH STOCK SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ (65,255) $ (112,607)
Net realized gain (loss) ...................................................................... (11,516,459) (15,442,290)
Net change in unrealized appreciation (depreciation) .......................................... 26,233,276 (8,944,408)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................... 14,651,562 (24,499,305)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (3,902,874 and 3,634,199 shares, respectively) .................. 21,896,967 20,650,808
Net asset value of shares issued in conjunction with Plan of Reorganization (2,496,714 and
3,141,426 shares, respectively) (See Note 11) ............................................... 11,987,441 22,032,065
Cost of shares repurchased (4,026,328 and 5,367,448 shares, respectively) ..................... (22,173,211) (30,830,569)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... 11,711,197 11,852,304
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 26,362,759 (12,647,001)
NET ASSETS
Beginning of period ........................................................................... 56,096,044 68,743,045
------------ ------------
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS OF ($1,091) AND $0, RESPECTIVELY) .... $ 82,458,803 $ 56,096,044
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
------------------------------------------------ 12/15/99 TO
2003 2002 2001 2000 12/31/99
------ ------ ------ ------ --------------
Net asset value, beginning of period .................. $ 5.10 $ 7.16 $ 9.41 $10.60 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ........................ (0.01)(5) (0.01)(5) (0.02)(5) 0.01 0.01
Net realized and unrealized gain (loss) ............. 1.07 (2.05) (2.23) (1.19) 0.59
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................. 1.06 (2.06) (2.25) (1.18) 0.60
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................ -- -- -- (0.01) --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................... -- -- -- (0.01) --
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ............................. 1.06 (2.06) (2.25) (1.19) 0.60
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ........................ $ 6.16 $ 5.10 $ 7.16 $ 9.41 $10.60
====== ====== ====== ====== ======
Total return .......................................... 20.82% (28.84)% (23.84)% (11.17)% 6.00%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ................. $82,459 $56,096 $68,743 $69,508 $3,275
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses .................................. 1.01%(3)(4) 1.08% 1.00%(3)(4) 1.00%(3) 1.00%(1)(3)
Net investment income (loss) ........................ (0.09)% (0.17)% (0.26)% 0.15% 1.61%(1)
Portfolio turnover .................................... 228% 62% 35% 16% 0%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 1.18%, 1.19%, 1.24% and 17.29% for the periods ended December 31, 2003, 2001, 2000 and 1999,
respectively.
(4) The ratio of operating expenses to average net assets excludes the effect of expense offsets for custodian; if
expense offsets were included, the ratio would not significantly differ.
(5) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
133
PHOENIX-MFS INVESTORS TRUST SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long term growth of capital; secondarily to provide
reasonable current income.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the 12 months ended December 31, 2003, the series provided a total return
of 22.56%. This return compares with a return of 28.71% over the same period for
the series' benchmark, the S&P 500(R) Index 1. All performance figures assume
reinvestment of distributions. Past performance is not indicative of future
results and current performance may be higher or lower than the performance
shown.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: Although the series' performance for the 12-month period ending December 31,
2003 was much stronger than it was at mid-year, it trailed that of the S&P
500(R) Index. The primary detractors to relative performance was stock selection
in the technology and financial sectors, and an overweighting in leisure stocks.
Although we believed the economy would continue to improve in 2003, we
thought that technology stock prices were too high at the beginning of the year.
It seemed to us that those prices were the result of investors' expectations for
significant improvements in earnings and balance sheets. We believe those
improvements have yet to occur, regardless investors pushed technology stocks to
the forefront of a market rally than began in March and lasted through the end
of the period.
Although the series generated strong absolute returns from stocks such as
Analog Devices, Cisco, and VERITAS, it could not overcome the impact from being
underweighted in technology. Intel was the largest detractor to performance
because we did not participate fully in the stock's steep, upward climb in 2003.
Intel benefited from better-than-expected personal computer sales and a positive
semiconductor environment. In addition, we had avoided eBay and Yahoo and missed
the powerful performance of the Internet industry.
During 2003, banks and credit companies outperformed the S&P 500(R) Index;
however, the series was underweighted in this group and that hurt performance.
The biggest detractor among financial holdings was Fannie Mae. The company
struggled with a slowdown in the mortgage market. In addition, investors were
concerned about potential regulatory and political changes partially stemming
from the accounting woes of Federal Home Loan Mortgage Association.
Although we underweighted insurance stocks in the financial sector, we did
not escape the weak performance from the insurance group that detracted from
series' returns. Hartford Financial Services Group, Travelers Insurance, XL
Capital, MetLife, and UnumProvident all had to increase their reserves and that
negatively impacted their stock prices.
We had overweighted leisure stocks, especially in print and publishing
because we believed they would be positively affected by an improving economy
and a corresponding upturn in advertising revenues. However, ad revenues,
particularly from local markets, did not pick up as much as we and other
investors expected. As a result, a number of companies lowered their earnings
expectations, including the New York Times, Tribune, Reed Elsevier, and Gannett.
Media firm Viacom was also negatively affected by lower-than-expected local
advertising revenues.
The series' cash position also detracted from relative performance. As with
nearly all investment accounts, this series holds some cash to buy new holdings
and to cover shareholder redemptions. In a period when equity markets rose
sharply, cash hurt performance relative to the S&P 500(R) Index which has no
cash position.
An underweighting in the food and beverage industry in the consumer staples
sector and solid performance from Altria (formerly Phillip Morris) helped
results for the reporting period. Many consumer staples stocks had performed
well in 2002 when the securities markets were so unsettled. However, by the end
of 2002, we saw better opportunities in other groups that had greater exposure
to an improving economy. Altria's stock price continued to rebound from earlier
concerns about litigation and competitive pressures.
Health care holdings Genentech and Guidant were strong contributors to
series' returns. Genentech's stock price rose on unexpectedly positive testing
data for its colorectal cancer drug, Avastin, and approval of several new drugs.
Guidant's stock price was depressed at the start of 2003 because investors, in
our view, failed to appreciate the strength of the company's cardiac rhythm
management business, and they had discounted the company's drug-coated stent
program. Later in the year, the company exceeded investors' income expectations
and its stock price appreciated substantially.
134
PHOENIX-MFS INVESTORS TRUST SERIES
Solid results from Analog Devices, Cisco, and VERITAS enhanced series'
performance. Analog Devices, a high-quality semiconductor company in our view,
reported better-than-expected fundamental results and rallied strongly with the
rest of the semiconductor industry. Computer networking and communications
company Cisco Systems began the 2003 at a reasonable price level. The company's
prospects for a pick-up in its telecommunications service business, continued
market share gains in its business enterprise unit, and significant gains in net
income pushed Cisco's stock price higher. Signs of improving balance sheet
strength led to strong performance for data storage software company VERITAS.
Home Depot also contributed to series' returns. The company exceeded
investors' low earnings expectations in part because of its appliance sales and
its exclusive sales arrangement with John Deere for lawn care equipment. As a
result, investors pushed the company's stock price higher as they became more
optimistic about its ability to maintain and gain market share.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
10/29/01 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Investors Trust Series 22.56% 0.55%
- --------------------------------------------------------------------------------
S&P 500(R) Index 1 28.71% 3.19%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 10/29/01 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Investors Trust Series S&P 500(R) Index 1
10/29/01 $10,000 $10,000
12/31/01 $10,425 $10,677
12/31/02 $ 8,257 $ 8,317
12/31/03 $10,120 $10,705
1 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance. The index is not available for direct investment;
therefore its performance does not reflect the expenses associated with the
active management of an actual portfolio.
135
PHOENIX-MFS INVESTORS TRUST SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ ----------
COMMON STOCKS--88.6%
AEROSPACE & DEFENSE--0.8%
Lockheed Martin Corp. .............................. 930 $ 47,802
United Technologies Corp. .......................... 100 9,477
----------
57,279
----------
AGRICULTURAL PRODUCTS--0.2%
Archer Daniels Midland Co. ......................... 1,080 16,438
----------
AIR FREIGHT & COURIERS--1.2%
FedEx Corp. ........................................ 750 50,625
United Parcel Service, Inc. Class B ................ 557 41,524
----------
92,149
----------
AIRLINES--0.2%
Southwest Airlines Co. ............................. 900 14,526
----------
APPAREL RETAIL--0.8%
TJX Cos., Inc. (The) ............................... 2,570 56,668
----------
APPLICATION SOFTWARE--0.2%
Amdocs Ltd. (b) .................................... 520 11,690
----------
ASSET MANAGEMENT & CUSTODY BANKS--0.9%
Bank of New York Co., Inc. (The) ................... 550 18,216
Mellon Financial Corp. ............................. 770 24,725
State Street Corp. ................................. 500 26,040
----------
68,981
----------
BIOTECHNOLOGY--0.9%
Genzyme Corp. (b) .................................. 700 34,538
Gilead Sciences, Inc. (b) .......................... 600 34,884
----------
69,422
----------
BREWERS--0.5%
Anheuser-Busch Cos., Inc. .......................... 716 37,719
----------
BROADCASTING & CABLE TV--2.6%
Clear Channel Communications, Inc. ................. 1,944 91,037
Comcast Corp. Class A (b) .......................... 2,471 81,222
EchoStar Communications Corp. Class A (b) .......... 620 21,080
----------
193,339
----------
BUILDING PRODUCTS--0.3%
American Standard Cos., Inc. (b) ................... 190 19,133
----------
COMMUNICATIONS EQUIPMENT--2.5%
Cisco Systems, Inc. (b) ............................ 7,805 189,583
----------
COMPUTER HARDWARE--3.3%
Dell, Inc. (b) ..................................... 500 16,980
Hewlett-Packard Co. ................................ 3,114 71,529
International Business Machines Corp. .............. 1,730 160,336
----------
248,845
----------
CONSUMER FINANCE--1.2%
American Express Co. ............................... 1,375 66,316
MBNA Corp. ......................................... 1,040 25,844
----------
92,160
----------
DEPARTMENT STORES--1.1%
Kohl's Corp. (b) ................................... 890 39,997
May Department Stores Co. (The) .................... 1,375 39,971
----------
79,968
----------
SHARES VALUE
------ ----------
DIVERSIFIED BANKS--5.5%
Bank of America Corp. .............................. 1,469 $ 118,152
Bank One Corp. ..................................... 1,185 54,024
U.S. Bancorp ....................................... 2,020 60,156
Wells Fargo & Co. .................................. 3,095 182,264
----------
414,596
----------
DIVERSIFIED CHEMICALS--1.2%
Dow Chemical Co. (The) ............................. 1,040 43,233
PPG Industries, Inc. ............................... 750 48,015
----------
91,248
----------
DIVERSIFIED COMMERCIAL SERVICES--0.3%
ARAMARK Corp. Class B .............................. 935 25,638
----------
DRUG RETAIL--0.5%
CVS Corp. .......................................... 1,125 40,635
----------
ELECTRIC UTILITIES--2.4%
Dominion Resources, Inc. ........................... 981 62,617
Entergy Corp. ...................................... 200 11,426
Exelon Corp. ....................................... 990 65,697
FirstEnergy Corp. .................................. 540 19,008
PPL Corp. .......................................... 400 17,500
----------
176,248
----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.7%
Emerson Electric Co. ............................... 580 37,555
Rockwell Automation, Inc. .......................... 505 17,978
----------
55,533
----------
FOOD RETAIL--0.2%
Safeway, Inc. (b) .................................. 700 15,337
----------
GENERAL MERCHANDISE STORES--1.0%
Target Corp. ....................................... 2,042 78,413
----------
HEALTH CARE DISTRIBUTORS--1.3%
AmerisourceBergen Corp. ............................ 1,355 76,083
Cardinal Health, Inc. .............................. 400 24,464
----------
100,547
----------
HEALTH CARE EQUIPMENT--2.1%
Applied Biosystems Group - Applera Corp. ........... 200 4,142
Bard (C.R.), Inc. .................................. 210 17,063
Baxter International, Inc. ......................... 1,770 54,020
Guidant Corp. ...................................... 1,360 81,872
----------
157,097
----------
HEALTH CARE FACILITIES--1.1%
HCA, Inc. .......................................... 300 12,888
Tenet Healthcare Corp. (b) ......................... 4,150 66,607
----------
79,495
----------
HOME IMPROVEMENT RETAIL--1.3%
Home Depot, Inc. (The) ............................. 2,675 94,936
----------
HOTELS, RESORTS & CRUISE LINES--0.2%
Starwood Hotels & Resorts Worldwide, Inc. .......... 380 13,669
----------
HOUSEHOLD PRODUCTS--2.5%
Colgate-Palmolive Co. .............................. 500 25,025
Kimberly-Clark Corp. ............................... 647 38,231
Procter & Gamble Co. (The) ......................... 1,245 124,351
----------
187,607
----------
See Notes to Financial Statements
136
PHOENIX-MFS INVESTORS TRUST SERIES
SHARES VALUE
------ ----------
HOUSEWARES & SPECIALTIES--0.6%
Newell Rubbermaid, Inc. ............................ 2,100 $ 47,817
----------
HYPERMARKETS & SUPER CENTERS--1.3%
Wal-Mart Stores, Inc. .............................. 1,820 96,551
----------
INDUSTRIAL CONGLOMERATES--4.0%
General Electric Co. ............................... 7,005 217,015
Tyco International Ltd. ............................ 3,215 85,197
----------
302,212
----------
INDUSTRIAL GASES--1.4%
Air Products and Chemicals, Inc. ................... 597 31,539
Praxair, Inc. ...................................... 1,950 74,490
----------
106,029
----------
INDUSTRIAL MACHINERY--1.1%
Danaher Corp. ...................................... 200 18,350
Eaton Corp. ........................................ 325 35,094
Illinois Tool Works, Inc. .......................... 328 27,522
----------
80,966
----------
INSURANCE BROKERS--0.4%
Marsh & McLennan Cos., Inc. ........................ 545 26,100
----------
INTEGRATED OIL & GAS--2.7%
Exxon Mobil Corp. .................................. 4,960 203,360
----------
INTEGRATED TELECOMMUNICATION SERVICES--2.0%
AT&T Wireless Services, Inc. (b) ................... 4,120 32,919
SBC Communications, Inc. ........................... 1,700 44,319
Verizon Communications, Inc. ....................... 2,140 75,071
----------
152,309
----------
INTERNET RETAIL--0.1%
InterActiveCorp (b) ................................ 320 10,858
----------
INVESTMENT BANKING & BROKERAGE--2.3%
Goldman Sachs Group, Inc. (The) .................... 278 27,447
Lehman Brothers Holdings, Inc. ..................... 370 28,571
Merrill Lynch & Co., Inc. .......................... 1,929 113,136
----------
169,154
----------
LIFE & HEALTH INSURANCE--0.4%
MetLife, Inc. ...................................... 845 28,451
----------
MOTORCYCLE MANUFACTURERS--0.2%
Harley-Davidson, Inc. .............................. 300 14,259
----------
MOVIES & ENTERTAINMENT--3.4%
Time Warner, Inc. (b) .............................. 5,130 92,289
Viacom, Inc. Class B ............................... 3,105 137,800
Walt Disney Co. (The) .............................. 900 20,997
----------
251,086
----------
MULTI-LINE INSURANCE--1.5%
American International Group, Inc. ................. 1,315 87,158
Hartford Financial Services Group, Inc. (The) ...... 450 26,564
----------
113,722
----------
OFFICE ELECTRONICS--0.4%
Xerox Corp. (b) .................................... 2,200 30,360
----------
OIL & GAS DRILLING--0.6%
Noble Corp. (b) .................................... 550 19,679
Transocean, Inc. (b) ............................... 960 23,050
----------
42,729
----------
SHARES VALUE
------ ----------
OIL & GAS EQUIPMENT & SERVICES--1.3%
Halliburton Co. .................................... 1,810 $ 47,060
Schlumberger Ltd. .................................. 928 50,780
----------
97,840
----------
OIL & GAS EXPLORATION & PRODUCTION--0.8%
Unocal Corp. ....................................... 1,680 61,874
----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.4%
Citigroup, Inc. .................................... 5,270 255,806
----------
PHARMACEUTICALS--6.8%
Abbott Laboratories ................................ 1,306 60,860
Johnson & Johnson .................................. 3,510 181,327
Pfizer, Inc. ....................................... 2,564 90,586
Schering-Plough Corp. .............................. 3,795 65,995
Wyeth .............................................. 2,565 108,884
----------
507,652
----------
PROPERTY & CASUALTY INSURANCE--0.5%
Chubb Corp. (The) .................................. 600 40,860
----------
PUBLISHING & PRINTING--1.7%
Gannett Co., Inc. .................................. 355 31,652
New York Times Co. (The) Class A ................... 1,940 92,712
----------
124,364
----------
RAILROADS--0.9%
Union Pacific Corp. ................................ 942 65,450
----------
REGIONAL BANKS--0.5%
SunTrust Banks, Inc. ............................... 510 36,465
----------
RESTAURANTS--0.4%
McDonald's Corp. ................................... 1,045 25,947
----------
SEMICONDUCTORS--2.4%
Analog Devices, Inc. (b) ........................... 1,275 58,204
Intel Corp. ........................................ 3,190 102,718
Texas Instruments, Inc. ............................ 709 20,830
----------
181,752
----------
SOFT DRINKS--1.4%
PepsiCo, Inc. ...................................... 2,195 102,331
----------
SYSTEMS SOFTWARE--4.0%
Microsoft Corp. .................................... 10,295 283,524
VERITAS Software Corp. (b) ......................... 522 19,398
----------
302,922
----------
THRIFTS & MORTGAGE FINANCE--2.7%
Fannie Mae ......................................... 2,125 159,502
Golden West Financial Corp. ........................ 410 42,308
----------
201,810
----------
TOBACCO--1.9%
Altria Group, Inc. ................................. 2,635 143,397
----------
TRADING COMPANIES & DISTRIBUTORS--0.4%
Grainger (W.W.), Inc. .............................. 600 28,434
----------
WIRELESS TELECOMMUNICATION SERVICES--0.1%
Sprint Corp. (PCS Group) (b) ....................... 1,840 10,341
----------
TOTAL COMMON STOCKS
(Identified cost $5,788,232) ................................ 6,642,107
----------
See Notes to Financial Statements
137
PHOENIX-MFS INVESTORS TRUST SERIES
SHARES VALUE
------ ----------
FOREIGN COMMON STOCKS--8.0%
AUTO PARTS & EQUIPMENT--0.3%
Magna International, Inc. Class A (Canada) ......... 250 $ 20,013
----------
AUTOMOBILE MANUFACTURERS--0.7%
Bayerische Motoren Werke AG (Germany) .............. 1,075 50,102
----------
COMMUNICATIONS EQUIPMENT--0.2%
Nokia Oyj ADR (Finland) ............................ 840 14,280
----------
DIVERSIFIED METALS & MINING--0.2%
BHP Billiton plc (United Kingdom) .................. 2,200 19,219
----------
HOUSEHOLD PRODUCTS--0.7%
Reckitt Benckiser plc (United Kingdom) ............. 2,330 52,722
----------
INTEGRATED OIL & GAS--0.7%
BP plc ADR (United Kingdom) ........................ 296 14,607
Total SA ADR (France) .............................. 380 35,154
----------
49,761
----------
INTEGRATED TELECOMMUNICATION SERVICES--0.2%
Koninklijke (Royal) KPN NV (Netherlands) (b) ....... 1,800 13,895
----------
IT CONSULTING & OTHER SERVICES--0.4%
Accenture Ltd. Class A (Bermuda) (b) ............... 1,290 33,953
----------
OIL & GAS EXPLORATION & PRODUCTION--0.6%
EnCana Corp. (Canada) .............................. 325 12,818
EnCana Corp. (Canada) (c) .......................... 760 29,994
----------
42,812
----------
PHARMACEUTICALS--2.7%
AstraZeneca plc (United Kingdom) ................... 985 47,256
Novartis AG Registered Shares (Switzerland) ........ 2,130 96,705
Roche Holding AG (Switzerland) ..................... 560 56,487
----------
200,448
----------
PROPERTY & CASUALTY INSURANCE--0.5%
XL Capital Ltd. Class A (Bermuda) .................. 445 34,510
----------
RAILROADS--0.6%
Canadian National Railway Co. (Canada) ............. 779 49,295
----------
SEMICONDUCTORS--0.2%
STMicroelectronics NV (United States) .............. 691 18,664
----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $504,768) .................................. 599,674
----------
FOREIGN PREFERRED STOCKS--0.4%
AUTOMOBILE MANUFACTURERS--0.4%
Porsche AG Pfd. (Germany) .......................... 47 27,894
----------
TOTAL FOREIGN PREFERRED STOCKS
(Identified cost $20,864) ................................... 27,894
----------
TOTAL LONG TERM INVESTMENTS--97.0%
(Identified cost $6,313,864) ................................ 7,269,675
----------
PAR
VALUE
(000) VALUE
----- ----------
SHORT-TERM OBLIGATIONS--4.6%
FEDERAL AGENCY SECURITIES--4.6%
FHLB Discount Note 0.75%, 1/2/04 ................... $350 $ 349,993
----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $349,993) .................................. 349,993
----------
TOTAL INVESTMENTS--101.6%
(Identified cost $6,663,857) ................................ 7,619,668(a)
Other assets and liabilities, net--(1.6)% ................... (121,149)
----------
NET ASSETS--100.0% ............................................ $7,498,519
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,003,243 and gross
depreciation of $191,965 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$6,808,390.
(b) Non-income producing.
(c) Shares traded on Toronto exchange.
See Notes to Financial Statements
138
PHOENIX-MFS INVESTORS TRUST SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $6,663,857) .................................. $7,619,668
Cash ....................................................................................... 461
Foreign currency at value (Identified cost $3,604) ......................................... 3,628
Receivables
Investment securities sold ................................................................. 12,711
Receivable from adviser .................................................................... 11,434
Dividends .................................................................................. 10,047
Fund shares sold ........................................................................... 4,193
Tax reclaims ............................................................................... 461
Prepaid expenses ............................................................................. 86
----------
Total assets ............................................................................. 7,662,689
----------
LIABILITIES
Payables
Investment securities purchased ............................................................ 85,354
Fund shares repurchased .................................................................... 17,291
Professional fee ........................................................................... 30,037
Printing fee ............................................................................... 11,606
Custodian fee .............................................................................. 10,291
Financial agent fee ........................................................................ 3,560
Trustees' fee .............................................................................. 2,360
Administration fee ......................................................................... 475
Accrued expenses ............................................................................. 3,196
----------
Total liabilities ........................................................................ 164,170
----------
NET ASSETS ................................................................................... $7,498,519
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ........................................... $7,028,797
Undistributed net investment income ........................................................ 4,428
Accumulated net realized loss .............................................................. (490,567)
Net unrealized appreciation ................................................................ 955,861
----------
NET ASSETS ................................................................................... $7,498,519
==========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ............. 749,672
==========
Net asset value and offering price per share ................................................. $10.00
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 92,010
Interest ...................................................................................................... 2,692
Foreign taxes withheld ........................................................................................ (790)
----------
Total investment income ..................................................................................... 93,912
----------
EXPENSES
Investment advisory fee ....................................................................................... 42,356
Financial agent fee ........................................................................................... 40,158
Administration fee ............................................................................................ 4,349
Custodian ..................................................................................................... 79,788
Professional .................................................................................................. 27,489
Printing ...................................................................................................... 11,769
Trustees ...................................................................................................... 6,394
Miscellaneous ................................................................................................. 9,133
----------
Total expenses .............................................................................................. 221,436
Less expenses borne by investment adviser ................................................................... (164,959)
Custodian fees paid indirectly .............................................................................. (2)
----------
Net expenses ................................................................................................ 56,475
----------
NET INVESTMENT INCOME ........................................................................................... 37,437
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 12,970
Net realized loss on foreign currency transactions ............................................................ (203)
Net change in unrealized appreciation (depreciation) on investments ........................................... 1,169,474
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 21
----------
NET GAIN ON INVESTMENTS ......................................................................................... 1,182,262
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $1,219,699
==========
See Notes to Financial Statements
139
PHOENIX-MFS INVESTORS TRUST SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
---------- ----------
FROM OPERATIONS
Net investment income (loss) ................................................................. $ 37,437 $ 19,847
Net realized gain (loss) ..................................................................... 12,767 (503,378)
Net change in unrealized appreciation (depreciation) ......................................... 1,169,495 (336,548)
---------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................. 1,219,699 (820,079)
---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................ (36,924) (19,894)
Net realized short-term gains ................................................................ -- (5,103)
---------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .................................... (36,924) (24,997)
---------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (317,487 and 214,975 shares, respectively) ..................... 2,803,979 1,898,360
Net asset value of shares issued from reinvestment of distributions
(3,764 and 2,946 shares, respectively) ..................................................... 36,924 24,997
Cost of shares repurchased (83,612 and 32,117 shares, respectively) .......................... (725,744) (278,591)
---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .................................... 2,115,159 1,644,766
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................ 3,297,934 799,690
NET ASSETS
Beginning of period .......................................................................... 4,200,585 3,400,895
---------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $4,428 AND $4,118,
RESPECTIVELY) .............................................................................. $7,498,519 $4,200,585
========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED
DECEMBER 31, FROM INCEPTION
----------------- 10/29/01 TO
2003 2002 12/31/01
------ ------ --------------
Net asset value, beginning of period ..................................................... $ 8.20 $10.42 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ........................................................... 0.05 0.04 0.01
Net realized and unrealized gain (loss) ................................................ 1.80 (2.21) 0.41
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ..................................................... 1.85 (2.17) 0.42
------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................................................... (0.05) (0.04) --
Distributions from net realized gains .................................................. -- (0.01) --
------ ------ ------
TOTAL DISTRIBUTIONS .................................................................. (0.05) (0.05) --
------ ------ ------
CHANGE IN NET ASSET VALUE ................................................................ 1.80 (2.22) 0.42
------ ------ ------
NET ASSET VALUE, END OF PERIOD ........................................................... $10.00 $ 8.20 $10.42
====== ====== ======
Total return ............................................................................. 22.56% (20.79)% 4.25%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .................................................. $7,499 $4,201 $3,401
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) .................................................................. 1.00%(4) 0.98%(4) 0.95%(2)(4)
Net investment income .................................................................. 0.66% 0.55% 0.65%(2)
Portfolio turnover ....................................................................... 89% 85% 4%(3)
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 3.92%, 5.48% and 7.34% for the periods ended December 31, 2003, 2002 and 2001, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
</FN>
See Notes to Financial Statements
140
PHOENIX-MFS VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks capital appreciation and reasonable income.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the period ended December 31, 2003, the series returned 24.85%. This
return compares with a 30.03% return over the same period for the series'
benchmark, the Russell 1000(R) Value Index 1 and the S&P 500(R) Index 2
returning 28.71%. All performance figures assume reinvestment of distributions.
Past performance is not indicative of future results and current performance may
be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: After two years of falling markets for value investors, absolute returns for
value stocks improved during the 12-month period ended December 31, 2003.
However, we recognize that the series' return for the reporting period lagged
that of the Russell 1000(R) Value Index. The series' underperformance largely
occurred in the first six months of 2003, which was a challenging market
environment for our conservative, quality-focused style. For the first half of
the year, technology stocks and lower-quality stocks with weaker balance sheets
led stock market returns. Lower interest rates spurred that sharp rebound, in
our view.
With the release of second-quarter corporate earnings in July 2003, market
leadership began to expand to include a broader-based group of economically
sensitive stocks such as basic materials, industrials, energy, and
transportation (railroad) issues. As a result, the series' returns compared to
the benchmark improved.
Our sector positioning did not change significantly during the fiscal year
that ended December 31, 2003. However, we found opportunities to shift into more
reasonably valued names within sectors where company fundamentals had improved
but stock prices had lagged returns from that sector's leaders.
As has been the case for most of this year, the largest negative impact to
relative performance came from our conservative positioning. Throughout the
period, our underweighting in autos and housing, technology, and financial
stocks detracted from performance. Our cautious positioning within the utility
and leisure sectors also hurt returns. Given our high-quality approach, in
general we chose to own regulated utility companies and avoided the balance
sheet impaired companies. Similarly, in leisure we focused on the higher quality
newspaper and media companies.
Q: WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A: Although the financial sector was the series' third-best sector in
contributing to absolute returns, our underweighted position and stock selection
in the group caused relative returns to lag the benchmark. For example,
FleetBoston, which was the object of a $47 billion takeover by Bank of America,
made the strongest relative contribution to the series return. Goldman Sachs
provided strong returns as the securities markets recovered and merger and
acquisition activity increased. The results from those two companies were
somewhat offset by weaker, yet still positive, returns from Travelers Property
and Casualty and Fannie Mae.
In the leisure sector, cable and publishing holdings such as Viacom and
Tribune experienced weaker-than-expected advertising revenues. Although the
price of both stocks rose, they lagged the sector. Reed Elsevier, which
publishes textbooks and professional journals, trailed other leisure stocks.
Investors were concerned about tight school budgets and weakness in advertising
revenues from its business-to-business publications.
The series was underweighted in auto stocks due to concerns about U.S.
market share losses to overseas manufacturers, weak pricing, earnings quality
and pension and health care liabilities. However, investors appeared to focus
their attention on improving industry sales.
The portfolio's cash position also detracted from relative performance. As
with nearly all investment accounts, this portfolio holds some cash to buy new
holdings and to cover investor exchanges or redemptions. In a period when equity
markets rose sharply, cash hurt performance against our benchmark, the Russell
1000(R) Value Index, which has no cash position.
141
PHOENIX-MFS VALUE SERIES
Returns from Caterpillar, Deere, and Emerson Electric led performance in
the industrial goods and services sector. Rising commodity prices combined with
increased farm subsidies improved the outlook for spending on agricultural
equipment, benefiting Deere & Co. Also, restructuring initiatives continue to
drive improvements in margins and free cash flow. Strong quarterly earnings
reports and continued expectations for improved economic activity helped move
both Caterpillar and Emerson higher. The series sold Caterpillar when it reached
our target price.
Although technology continues to be a relatively small sector in the
portfolio, our holdings in this group have provided the strongest absolute
returns for the 12-month reporting period ended December 31, 2003. Contributors
within this group included Texas Instruments, Nortel Networks, Intel, and
Motorola. Improvements in telecommunications-related equipment sales also helped
to boost Texas Instruments' stock price. Nortel's stock rose sharply in the
third quarter when the company announced a number of new contracts with large
wireless companies such as Verizon and AT&T. Intel's stock price soared
throughout the period when the company experienced better-than-expected personal
computer sales, positive earnings, and a generally positive semiconductor
environment. Motorola's stock price rose as a result of an improved outlook for
its handset sales and a more focused corporate strategy. Texas Instruments,
Nortel Networks, and Intel stock were sold when they achieved our performance
objectives.
Altria, formerly Philip Morris, led the series' consumer staples holdings.
The company continued to rebound from earlier concerns about litigation and
competitive pressures.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
10/29/01 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Value Series 24.85% 6.10%
- --------------------------------------------------------------------------------
Russell 1000(R) Value Index 1 30.03% 7.53%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 3.19%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 10/29/01 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Value Series Russell 1000(R) Value Index 1 S&P 500(R) Index 2
10/29/01 $10,000 $10,000 $10,000
12/31/01 $10,573 $10,658 $10,677
12/31/02 $ 9,109 $ 9,004 $ 8,317
12/31/03 $11,373 $11,708 $10,705
1 The Russell 1000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
142
PHOENIX-MFS VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--88.2%
AEROSPACE & DEFENSE--2.4%
Honeywell International, Inc. ...................... 1,700 $ 56,831
Lockheed Martin Corp. .............................. 3,340 171,676
Northrop Grumman Corp. ............................. 5,230 499,988
-----------
728,495
-----------
AGRICULTURAL PRODUCTS--1.5%
Archer Daniels Midland Co. ......................... 28,710 436,966
-----------
ASSET MANAGEMENT & CUSTODY BANKS--1.9%
Janus Capital Group, Inc. .......................... 980 16,082
Mellon Financial Corp. ............................. 17,540 563,209
-----------
579,291
-----------
BROADCASTING & CABLE TV--2.2%
Comcast Corp. Special Class A (b) .................. 10,510 328,753
Cox Communications, Inc. Class A (b) ............... 9,970 343,466
-----------
672,219
-----------
COMMUNICATIONS EQUIPMENT--0.9%
Motorola, Inc. ..................................... 19,480 274,084
-----------
COMPUTER HARDWARE--1.5%
Hewlett-Packard Co. ................................ 4,130 94,866
International Business Machines Corp. .............. 3,960 367,013
-----------
461,879
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.7%
Deere & Co. ........................................ 3,440 223,772
-----------
CONSUMER FINANCE--1.1%
American Express Co. ............................... 6,910 333,269
-----------
DEPARTMENT STORES--0.6%
Sears, Roebuck and Co. ............................. 3,860 175,591
-----------
DIVERSIFIED BANKS--7.0%
Bank of America Corp. .............................. 9,510 764,889
Bank One Corp. ..................................... 6,420 292,688
FleetBoston Financial Corp. ........................ 19,540 852,921
Wells Fargo & Co. .................................. 3,240 190,804
-----------
2,101,302
-----------
DIVERSIFIED CHEMICALS--2.6%
Dow Chemical Co. (The) ............................. 7,680 319,257
PPG Industries, Inc. ............................... 7,330 469,267
-----------
788,524
-----------
ELECTRIC UTILITIES--3.7%
Cinergy Corp. ...................................... 5,500 213,455
Dominion Resources, Inc. ........................... 2,100 134,043
Entergy Corp. ...................................... 1,380 78,839
FirstEnergy Corp. .................................. 2,120 74,624
FPL Group, Inc. .................................... 1,730 113,177
NSTAR .............................................. 2,950 143,075
PPL Corp. .......................................... 3,190 139,563
TXU Corp. .......................................... 9,110 216,089
-----------
1,112,865
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--1.4%
Emerson Electric Co. ............................... 6,300 407,925
-----------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.1%
Monsanto Co. ....................................... 500 14,390
-----------
FOOD RETAIL--0.2%
Safeway, Inc. (b) .................................. 2,220 48,640
-----------
SHARES VALUE
------ -----------
GAS UTILITIES--0.4%
KeySpan Corp. ...................................... 3,060 $ 112,608
-----------
HEALTH CARE EQUIPMENT--0.2%
Guidant Corp. ...................................... 1,010 60,802
-----------
HOUSEHOLD PRODUCTS--2.1%
Kimberly-Clark Corp. ............................... 10,920 645,263
-----------
HOUSEWARES & SPECIALTIES--0.5%
Newell Rubbermaid, Inc. ............................ 7,250 165,082
-----------
INDUSTRIAL GASES--1.5%
Air Products and Chemicals, Inc. ................... 6,960 367,697
Praxair, Inc. ...................................... 2,490 95,118
-----------
462,815
-----------
INSURANCE BROKERS--0.3%
Marsh & McLennan Cos., Inc. ........................ 1,670 79,976
-----------
INTEGRATED OIL & GAS--5.8%
ChevronTexaco Corp. ................................ 3,220 278,176
ConocoPhillips ..................................... 8,860 580,950
Exxon Mobil Corp. .................................. 21,670 888,470
-----------
1,747,596
-----------
INTEGRATED TELECOMMUNICATION SERVICES--5.0%
AT&T Wireless Services, Inc. (b) ................... 19,840 158,522
BellSouth Corp. .................................... 5,250 148,575
SBC Communications, Inc. ........................... 25,430 662,960
Verizon Communications, Inc. ....................... 15,500 543,740
-----------
1,513,797
-----------
INVESTMENT BANKING & BROKERAGE--3.7%
Goldman Sachs Group, Inc. (The) .................... 6,600 651,618
Merrill Lynch & Co., Inc. .......................... 7,960 466,854
-----------
1,118,472
-----------
LEISURE PRODUCTS--0.2%
Hasbro, Inc. ....................................... 3,080 65,542
-----------
LIFE & HEALTH INSURANCE--1.7%
MetLife, Inc. ...................................... 15,480 521,212
-----------
MOVIES & ENTERTAINMENT--2.9%
Time Warner, Inc. (b) .............................. 17,900 322,021
Viacom, Inc. Class B ............................... 12,290 545,430
-----------
867,451
-----------
MULTI-LINE INSURANCE--0.8%
Hartford Financial Services Group, Inc. (The) ...... 4,290 253,239
-----------
MULTI-UTILITIES & UNREGULATED POWER--0.8%
Energy East Corp. .................................. 7,160 160,384
National Fuel Gas Co. .............................. 3,590 87,740
-----------
248,124
-----------
OIL & GAS DRILLING--0.8%
Noble Corp. (b) .................................... 7,040 251,891
-----------
OIL & GAS EQUIPMENT & SERVICES--1.2%
Baker Hughes, Inc. ................................. 2,400 77,184
Schlumberger Ltd. .................................. 4,930 269,770
-----------
346,954
-----------
OIL & GAS EXPLORATION & PRODUCTION--1.7%
Devon Energy Corp. ................................. 2,040 116,810
Unocal Corp. ....................................... 11,120 409,550
-----------
526,360
-----------
See Notes to Financial Statements
143
PHOENIX-MFS VALUE SERIES
SHARES VALUE
------ -----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.2%
Citigroup, Inc. .................................... 20,150 $ 978,081
-----------
PACKAGED FOODS & MEATS--3.3%
Heinz (H.J.) Co. ................................... 8,250 300,547
Kellogg Co. ........................................ 17,170 653,834
Tyson Foods, Inc. Class A .......................... 3,780 50,047
-----------
1,004,428
-----------
PAPER PACKAGING--0.5%
Smurfit-Stone Container Corp. (b) .................. 7,810 145,032
-----------
PAPER PRODUCTS--1.3%
Bowater, Inc. ...................................... 2,940 136,152
International Paper Co. ............................ 5,940 256,073
-----------
392,225
-----------
PHARMACEUTICALS--6.1%
Johnson & Johnson .................................. 13,780 711,875
Pfizer, Inc. ....................................... 18,700 660,671
Schering-Plough Corp. .............................. 26,290 457,183
-----------
1,829,729
-----------
PROPERTY & CASUALTY INSURANCE--3.4%
Allstate Corp. (The) ............................... 8,640 371,693
Chubb Corp. (The) .................................. 3,640 247,884
Travelers Property Casualty Corp. Class A (b) ...... 23,695 397,602
-----------
1,017,179
-----------
PUBLISHING & PRINTING--1.5%
Tribune Co. ........................................ 8,540 440,664
-----------
RAILROADS--1.7%
Union Pacific Corp. ................................ 7,280 505,814
-----------
REGIONAL BANKS--3.6%
PNC Financial Services Group, Inc. (The) ........... 4,420 241,906
SouthTrust Corp. ................................... 4,430 144,994
SunTrust Banks, Inc. ............................... 9,670 691,405
-----------
1,078,305
-----------
RESTAURANTS--0.3%
McDonald's Corp. ................................... 3,850 95,596
-----------
SOFT DRINKS--0.4%
PepsiCo, Inc. ...................................... 2,300 107,226
-----------
SYSTEMS SOFTWARE--0.8%
Microsoft Corp. .................................... 8,850 243,729
-----------
THRIFTS & MORTGAGE FINANCE--2.0%
Fannie Mae ......................................... 8,180 613,991
-----------
TOBACCO--2.7%
Altria Group, Inc. ................................. 14,860 808,681
-----------
TOTAL COMMON STOCKS
(Identified cost $22,257,701) ............................... 26,607,076
-----------
FOREIGN COMMON STOCKS--9.8%
DISTILLERS & VINTNERS--0.7%
Diageo plc (United Kingdom) ........................ 16,720 219,996
-----------
DIVERSIFIED METALS & MINING--1.1%
BHP Billiton plc (United Kingdom) .................. 23,650 206,606
Rio Tinto plc (United Kingdom) ..................... 4,620 127,614
-----------
334,220
-----------
SHARES VALUE
------ -----------
FERTILIZERS & AGRICULTURAL CHEMICALS--1.1%
Syngenta AG (Switzerland) .......................... 4,800 $ 323,299
-----------
INTEGRATED OIL & GAS--3.2%
BP plc ADR (United Kingdom) ........................ 13,830 682,510
Total SA ADR (France) .............................. 2,950 272,905
-----------
955,415
-----------
PHARMACEUTICALS--2.3%
Novartis AG Registered Shares (Switzerland) ........ 8,140 369,566
Roche Holding AG (Switzerland) ..................... 3,390 341,947
-----------
711,513
-----------
PUBLISHING & PRINTING--1.3%
Reed Elsevier plc (United Kingdom) ................. 45,560 381,087
-----------
TRADING COMPANIES & DISTRIBUTORS--0.1%
Finning International, Inc. (Canada) ............... 1,380 32,144
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,448,863) ................................ 2,957,674
-----------
TOTAL LONG TERM INVESTMENTS--98.0%
(Identified cost $24,706,564) ............................... 29,564,750
-----------
PAR
VALUE
(000)
-----
SHORT-TERM OBLIGATIONS--2.1%
FEDERAL AGENCY SECURITIES--2.1%
FHLB Discount Note 0.75%, 1/2/04 ................... $641 640,987
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $640,987) .................................. 640,987
-----------
TOTAL INVESTMENTS--100.1%
(Identified cost $25,347,551) ............................... 30,205,737(a)
Other assets and liabilities, net--(0.1)% ................... (24,818)
-----------
NET ASSETS--100.0% ............................................ $30,180,919
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $4,887,276 and gross
depreciation of $332,758 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$25,651,219.
(b) Non-income producing.
See Notes to Financial Statements
144
PHOENIX-MFS VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $25,347,551) ............................................ $30,205,737
Cash .................................................................................................... 2,514
Receivables
Dividends and interest ................................................................................ 52,399
Investment securities sold ............................................................................ 35,097
Fund shares sold ...................................................................................... 30,759
Prepaid expenses ........................................................................................ 397
-----------
Total assets ........................................................................................ 30,326,903
-----------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 64,618
Investment securities purchased ....................................................................... 5,699
Professional fee ...................................................................................... 29,787
Printing fee .......................................................................................... 14,000
Investment advisory fee ............................................................................... 8,991
Financial agent fee ................................................................................... 4,781
Trustees' fee ......................................................................................... 2,360
Administration fee .................................................................................... 2,048
Accrued expenses ........................................................................................ 13,700
-----------
Total liabilities ................................................................................... 145,984
-----------
NET ASSETS .............................................................................................. $30,180,919
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $25,785,022
Accumulated net realized loss ......................................................................... (462,978)
Net unrealized appreciation ........................................................................... 4,858,875
-----------
NET ASSETS .............................................................................................. $30,180,919
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 2,719,586
===========
Net asset value and offering price per share ............................................................ $11.10
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 620,217
Interest ...................................................................................................... 10,851
Foreign taxes withheld ........................................................................................ (6,630)
----------
Total investment income ..................................................................................... 624,438
----------
EXPENSES
Investment advisory fee ....................................................................................... 191,624
Financial agent fee ........................................................................................... 52,744
Administration fee ............................................................................................ 19,673
Custodian ..................................................................................................... 86,383
Professional .................................................................................................. 27,189
Printing ...................................................................................................... 23,663
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 9,669
----------
Total expenses .............................................................................................. 416,876
Less expenses borne by investment adviser ................................................................... (161,371)
Custodian fees paid indirectly .............................................................................. (7)
----------
Net expenses ................................................................................................ 255,498
----------
NET INVESTMENT INCOME ........................................................................................... 368,940
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 347,665
Net realized gain on foreign currency transactions ............................................................ 478
Net change in unrealized appreciation (depreciation) on investments ........................................... 5,677,657
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 637
----------
NET GAIN ON INVESTMENTS ......................................................................................... 6,026,437
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $6,395,377
==========
See Notes to Financial Statements
145
PHOENIX-MFS VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) ..................................................................... $ 368,940 $ 154,000
Net realized gain (loss) ......................................................................... 348,143 (811,215)
Net change in unrealized appreciation (depreciation) ............................................. 5,678,294 (1,002,303)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...................................... 6,395,377 (1,659,518)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................ (378,435) (143,119)
Net realized short-term gains .................................................................... -- (10,444)
Net realized long-term gains ..................................................................... -- (144)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ........................................ (378,435) (153,707)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,793,906 and 1,709,473 shares, respectively) ..................... 17,007,465 16,616,339
Net asset value of shares issued from reinvestment of distributions (34,908 and 16,893 shares,
respectively) .................................................................................. 378,435 153,707
Cost of shares repurchased (1,013,940 and 266,319 shares, respectively) .......................... (10,373,375) (2,498,274)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ........................................ 7,012,525 14,271,772
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................ 13,029,467 12,458,547
NET ASSETS
Beginning of period .............................................................................. 17,151,452 4,692,905
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $10,334,
RESPECTIVELY) .................................................................................. $30,180,919 $17,151,452
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED
DECEMBER 31, FROM INCEPTION
----------------- 10/29/01 TO
2003 2002 12/31/01
------ ------ ---------------
Net asset value, beginning of period ................................................... $ 9.00 $10.55 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ......................................................... 0.14 0.09 0.02
Net realized and unrealized gain (loss) .............................................. 2.10 (1.55) 0.55
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................................... 2.24 (1.46) 0.57
------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ................................................. (0.14) (0.08) (0.02)
Distributions from net realized gains ................................................ -- (0.01) --(5)
------ ------ ------
TOTAL DISTRIBUTIONS ................................................................ (0.14) (0.09) (0.02)
------ ------ ------
CHANGE IN NET ASSET VALUE .............................................................. 2.10 (1.55) 0.55
------ ------ ------
NET ASSET VALUE, END OF PERIOD ......................................................... $11.10 $ 9.00 $10.55
====== ====== ======
Total return ........................................................................... 24.85% (13.84)% 5.73%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ................................................ $30,181 $17,151 $4,693
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ................................................................ 1.00%(4) 0.99%(4) 0.95%(2)(4)
Net investment income ................................................................ 1.44% 1.47% 1.33%(2)
Portfolio turnover ..................................................................... 73% 48% 9%(3)
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 1.63%, 2.59% and 6.43% for the periods ended December 31, 2003, 2002 and 2001, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
(5) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
146
PHOENIX-NORTHERN DOW 30 SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q. WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A. The investment objective of the series is to track the total return of the
Dow Jones Industrial Average(SM) before series expenses.
Q. HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A. The series was up 27.40% for the year compared to up 28.04% for the Dow Jones
Industrial Average(SM) 1 and up 28.71% for the S&P 500(R) Index 2. All
performance figures assume reinvestment of distributions. Past performance is
not indicative of future results and current performance may be higher or lower
than the performance shown.
Q. HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A. During the first quarter, the market declined, as fears surrounding the
likely war with Iraq heightened and economic activity slowed. During the second
quarter, the market experienced its largest single quarterly gain in 4-1/2
years. A significant number of corporate earnings announcements met or exceeded
expectations. The equity markets were additionally strengthened by a low
interest rate environment, declining bond investment yields, a $350 billion U.S.
tax cut, an accommodative Federal Reserve Board, and a declining dollar that
benefited U.S. companies doing business overseas. Finally, while the journey to
democracy in Iraq was by no means at an end, the conclusion of active military
operations provided the equity markets with a degree of geopolitical stability.
The market continued its advance during the second half of 2003. The U.S.
economy exhibited signs of improvement, as evidenced by the continual upward
revisions to the all-important Gross Domestic Product growth rate. Investment by
corporate America also picked up in earnest. Business spending increased
sharply, with significant increases in technology spending. The U.S. equity
markets were further supported by robust corporate earnings.
Q. WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A. As index managers, we merely seek to match the performance and
characteristics of the benchmark. The performance of the fund is primarily the
result of the performance of the Dow Jones Industrial Average(SM).
Q. WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A. As managers of an index portfolio, which seeks to replicate as closely as
possible (before deduction of expenses) the broad diversification and returns of
the benchmark, we neither evaluate short-term fluctuations in the series'
performance nor manage according to a given outlook for the equity markets or
the economy in general. Still, we will continue monitoring economic conditions
and how they affect the financial markets, as we seek to closely track the
performance of the stock market.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Dow Jones industrial Average(SM) is a commonly used measure of large-cap
stock performance.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
147
PHOENIX-NORTHERN DOW 30 SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
12/15/99 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Dow 30 Series 27.40% (0.50)%
- --------------------------------------------------------------------------------
Dow Jones Industrial Average(SM) 1 28.04% 0.25%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (4.37)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/15/99 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Dow 30 Series Dow Jones Industrial Average(SM) 1 S&P 500(R) Index 2
12/15/99 $10,000 $10,000 $10,000
12/31/99 $10,252 $10,250 $10,400
12/29/00 $9,682 $9,773 $9,445
12/31/01 $9,103 $9,244 $8,323
12/31/02 $7,692 $7,888 $6,484
12/31/03 $9,800 $10,100 $8,345
1 The Dow Jones Industrial Average(SM) is a commonly used measure of large-cap
stock performance.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
148
PHOENIX-NORTHERN DOW 30 SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--95.0%
AEROSPACE & DEFENSE--11.5%
Boeing Co. (The) ................................... 19,745 $ 832,054
Honeywell International, Inc. ...................... 19,745 660,075
United Technologies Corp. .......................... 19,745 1,871,234
-----------
3,363,363
-----------
ALUMINUM--2.5%
Alcoa, Inc. ........................................ 19,745 750,310
-----------
AUTOMOBILE MANUFACTURERS--3.6%
General Motors Corp. ............................... 19,745 1,054,383
-----------
COMPUTER HARDWARE--7.8%
Hewlett-Packard Co. ................................ 19,745 453,543
International Business Machines Corp. (b) .......... 19,745 1,829,966
-----------
2,283,509
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--5.6%
Caterpillar, Inc. .................................. 19,745 1,639,230
-----------
CONSUMER FINANCE--3.2%
American Express Co. ............................... 19,745 952,301
-----------
DIVERSIFIED CAPITAL MARKETS--2.5%
J.P. Morgan Chase & Co. ............................ 19,745 725,234
-----------
DIVERSIFIED CHEMICALS--3.1%
Du Pont (E.I.) de Nemours & Co. .................... 19,745 906,098
-----------
HOME IMPROVEMENT RETAIL--2.4%
Home Depot, Inc. (The) ............................. 19,745 700,750
-----------
HOUSEHOLD PRODUCTS--6.7%
Procter & Gamble Co. (The) ......................... 19,745 1,972,131
-----------
HYPERMARKETS & SUPER CENTERS--3.6%
Wal-Mart Stores, Inc. .............................. 19,745 1,047,472
-----------
INDUSTRIAL CONGLOMERATES--7.8%
3M Co. ............................................. 19,745 1,678,918
General Electric Co. ............................... 19,745 611,700
-----------
2,290,618
-----------
INTEGRATED OIL & GAS--2.7%
Exxon Mobil Corp. .................................. 19,745 809,545
-----------
INTEGRATED TELECOMMUNICATION SERVICES--3.1%
AT&T Corp. ......................................... 19,745 400,824
SBC Communications, Inc. ........................... 19,745 514,752
-----------
915,576
-----------
MOVIES & ENTERTAINMENT--1.6%
Walt Disney Co. (The) .............................. 19,745 460,651
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.3%
Citigroup, Inc. .................................... 19,745 958,422
-----------
PAPER PRODUCTS--2.9%
International Paper Co. ............................ 19,745 851,207
-----------
PHARMACEUTICALS--6.6%
Johnson & Johnson .................................. 19,745 1,020,027
Merck & Co., Inc. .................................. 19,745 912,219
-----------
1,932,246
-----------
SHARES VALUE
------- -----------
PHOTOGRAPHIC PRODUCTS--1.7%
Eastman Kodak Co. .................................. 19,745 $ 506,854
-----------
RESTAURANTS--1.7%
McDonald's Corp. ................................... 19,745 490,268
-----------
SEMICONDUCTORS--2.2%
Intel Corp. ........................................ 19,745 635,789
-----------
SOFT DRINKS--3.4%
Coca-Cola Co. (The) ................................ 19,745 1,002,059
-----------
SYSTEMS SOFTWARE--1.8%
Microsoft Corp. .................................... 19,745 543,777
-----------
TOBACCO--3.7%
Altria Group, Inc. ................................. 19,745 1,074,523
-----------
TOTAL COMMON STOCKS
(Identified cost $26,815,267) ............................... 27,866,316
-----------
EXCHANGE TRADED FUNDS--2.3%
DIAMONDS Trust, Series I ........................... 6,528 682,633
-----------
TOTAL EXCHANGE TRADED FUNDS
(Identified cost $661,491) .................................. 682,633
-----------
TOTAL LONG TERM INVESTMENTS--97.3%
(Identified cost $27,476,758) ............................... 28,548,949
-----------
PAR
VALUE
(000)
-----
SHORT-TERM OBLIGATIONS--2.9%
U.S. TREASURY BILLS--0.1%
U.S. Treasury Bill 0.90%, 1/22/04 (b) .............. $ 35 34,984
-----------
REPURCHASE AGREEMENTS--2.8%
State Street Bank & Trust Co. repurchase
agreement 0.05% dated 12/31/03, due
1/2/04 repurchase price $827,002 collaterized
by U.S. Treasury Bond 13.25%, 5/15/14
market value $840,438 ............................ 827 827,000
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $861,982) .................................. 861,984
-----------
TOTAL INVESTMENTS--100.2%
(Identified cost $28,338,740) ............................... 29,410,933(a)
Other assets and liabilities, net--(0.2)% ................... (63,694)
-----------
NET ASSETS--100.0% ............................................ $29,347,239
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,827,004 and gross
depreciation of $3,366,585 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$28,950,514.
(b) All or a portion segregated as collateral for futures contracts.
See Notes to Financial Statements
149
PHOENIX-NORTHERN DOW 30 SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $28,338,740) ............................................ $29,410,933
Cash .................................................................................................... 406
Receivables
Dividends and interest ................................................................................ 39,829
Investment securities sold ............................................................................ 11,933
Fund shares sold ...................................................................................... 9,575
Variation margin for future contracts ................................................................. 1,200
Prepaid expenses ........................................................................................ 359
-----------
Total assets ........................................................................................ 29,474,235
-----------
LIABILITIES
Payables
Investment securities purchased ....................................................................... 40,311
Fund shares repurchased ............................................................................... 26,645
Professional fee ...................................................................................... 30,037
Printing fee .......................................................................................... 13,888
Financial agent fee ................................................................................... 4,621
Trustees' fee ......................................................................................... 2,360
Investment advisory fee ............................................................................... 2,327
Administration fee .................................................................................... 1,841
Accrued expenses ........................................................................................ 4,966
-----------
Total liabilities ................................................................................... 126,996
-----------
NET ASSETS .............................................................................................. $29,347,239
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $29,379,073
Undistributed net investment income ................................................................... 45,147
Accumulated net realized loss ......................................................................... (1,176,474)
Net unrealized appreciation ........................................................................... 1,099,493
-----------
NET ASSETS .............................................................................................. $29,347,239
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 3,245,843
===========
Net asset value and offering price per share ............................................................ $9.04
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 539,795
Interest .............................................................................................. 535
----------
Total investment income ............................................................................. 540,330
----------
EXPENSES
Investment advisory fee ............................................................................... 82,708
Financial agent fee ................................................................................... 51,505
Administration fee .................................................................................... 18,196
Printing .............................................................................................. 24,381
Professional .......................................................................................... 21,237
Custodian ............................................................................................. 19,206
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 15,132
----------
Total expenses ...................................................................................... 238,296
Less expenses borne by investment adviser ........................................................... (96,499)
Custodian fees paid indirectly ...................................................................... (11)
----------
Net expenses ........................................................................................ 141,786
----------
NET INVESTMENT INCOME ................................................................................... 398,544
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ....................................................................... 45,774
Net realized gain on futures contracts ................................................................ 63,324
Net change in unrealized appreciation (depreciation) on investments ................................... 5,505,232
Net change in unrealized appreciation (depreciation) on futures ....................................... 33,460
----------
NET GAIN ON INVESTMENTS ................................................................................. 5,647,790
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $6,046,334
==========
See Notes to Financial Statements
150
PHOENIX-NORTHERN DOW 30 SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) ....................................................................... $ 398,544 $ 316,530
Net realized gain (loss) ........................................................................... 109,098 (1,198,055)
Net change in unrealized appreciation (depreciation) ............................................... 5,538,692 (2,824,725)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................................ 6,046,334 (3,706,250)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................................................................. (399,792) (277,525)
Net realized short-term gains ...................................................................... -- (20,714)
Net realized long-term gains ....................................................................... -- (21,852)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .......................................... (399,792) (320,091)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,429,677 and 1,385,447 shares, respectively) ....................... 11,258,450 11,099,442
Net asset value of shares issued from reinvestment of distributions (49,214 and 42,786 shares,
respectively) .................................................................................... 399,792 320,091
Cost of shares repurchased (1,016,474 and 1,377,314 shares, respectively) .......................... (8,027,406) (11,007,664)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .......................................... 3,630,836 411,869
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS .............................................................. 9,277,378 (3,614,472)
NET ASSETS
Beginning of period ................................................................................ 20,069,861 23,684,333
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $45,147 AND $46,395,
RESPECTIVELY) .................................................................................... $29,347,239 $20,069,861
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
------------------------------------------- 12/15/99 TO
2003 2002 2001 2000 12/31/99
------ ------ ------ ------ --------------
Net asset value, beginning of period ................................ $ 7.21 $ 8.67 $ 9.46 $10.24 $10.00
INCOME FROM INVESTMENT OPERATIONS (4)
Net investment income (loss) ...................................... 0.13 0.11 0.11(6) 0.08 0.01
Net realized and unrealized gain (loss) ........................... 1.83 (1.45) (0.66) (0.65) 0.24
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................ 1.96 (1.34) (0.55) (0.57) 0.25
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income .............................. (0.13) (0.10) (0.10) (0.08) (0.01)
Distributions from net realized gains ............................. -- (0.02) (0.14) (0.13) --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................. (0.13) (0.12) (0.24) (0.21) (0.01)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ........................................... 1.83 (1.46) (0.79) (0.78) 0.24
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................................... $ 9.04 $ 7.21 $ 8.67 $ 9.46 $10.24
====== ====== ====== ====== ======
Total return ........................................................ 27.40% (15.50)% (5.98)% (5.56)% 2.52%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ............................... $29,347 $20,070 $23,684 $15,503 $5,143
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (3) ............................................ 0.60%(5) 0.58%(5) 0.50%(5) 0.50% 0.50%(1)
Net investment income ............................................. 1.69% 1.44% 1.29% 1.08% 2.75%(1)
Portfolio turnover .................................................. 30% 40% 38% 93% 1%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.01%, 1.11%, 1.12%, 1.60% and 7.81% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(4) Per share income from investment operations may vary from anticipated results depending on the timing of share purchases and
redemptions.
(5) 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) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
151
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q. WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A. The investment objective of the series is to track the total return of the
NASDAQ-100 Index(R) 1 before series expenses.
Q. HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A. The series was up 48.85% for the year compared to up 49.12% for the
NASDAQ-100 Index(R) and up 28.71% for the S&P 500(R) Index 2. All performance
figures assume reinvestment of distributions. Past performance is not indicative
of future results and current performance may be higher or lower than the
performance shown.
Q. HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A. During the first quarter, the market declined, as fears surrounding the
likely war with Iraq heightened and economic activity slowed. During the second
quarter, the market experienced its largest single quarterly gain in 4-1/2
years. A significant number of corporate earnings announcements met or exceeded
expectations. The equity markets were additionally strengthened by a low
interest rate environment, declining bond investment yields, a $350 billion U.S.
tax cut, an accommodative Federal Reserve Board, and a declining dollar that
benefited U.S. companies doing business overseas. Finally, while the journey to
democracy in Iraq was by no means at an end, the conclusion of active military
operations provided the equity markets with a degree of geopolitical stability.
The market continued its advance during the second half of 2003. The U.S.
economy exhibited signs of improvement, as evidenced by the continual upward
revisions to the all-important Gross Domestic Product growth rate. Investment by
corporate America also picked up in earnest. Business spending increased
sharply, with significant increases in technology spending. The U.S. equity
markets were further supported by robust corporate earnings.
Q. WOULD YOU PLEASE COMMENT ON WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE
THIS YEAR?
A. As index managers, we merely seek to match the performance and
characteristics of the benchmark. The performance of the fund is primarily the
result of the performance of the NASDAQ-100 Index(R).
Q. WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A. As managers of an index portfolio, which seeks to replicate as closely as
possible (before deduction of expenses) the broad diversification and returns of
the benchmark. We neither evaluate short-term fluctuations in the series'
performance nor manage according to a given outlook for the equity markets or
the economy in general. Still, we will continue monitoring economic conditions
and how they affect the financial markets, as we seek to closely track the
performance of the stock market.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The NASDAQ-100 Index(R) measures technology-oriented stock total return
performance.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active management
of an actual portfolio.
152
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/15/00 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
NASDAQ-100 Index(R) Series 48.85% (24.14)%
- --------------------------------------------------------------------------------
NASDAQ-100 Index(R) 1 49.12% (24.08)%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (6.77)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/15/00 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
NASDAQ-100 Index(R)
Series NASDAQ-100 Index(R) 1 S&P 500(R) Index 2
8/15/00 $10,000 $10,000 $10,000
12/29/00 $6,322 $6,290 $8,930
12/31/01 $4,233 $4,236 $7,870
12/31/02 $2,642 $2,644 $6,131
12/31/03 $3,933 $3,943 $7,891
1 The NASDAQ-100 Index(R) measures technology-oriented stock total return
performance.
2 The S&P 500(R) Index is an unmanaged commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
153
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--91.1%
ADVERTISING--0.2%
Lamar Advertising Co. (b) .......................... 1,565 $ 58,406
-----------
AIR FREIGHT & COURIERS--0.6%
Expeditors International of Washington, Inc. ....... 1,936 72,910
Robinson (C.H.) Worldwide, Inc. .................... 1,568 59,443
-----------
132,353
-----------
ALTERNATIVE CARRIERS--0.3%
Level 3 Communications, Inc. (b) ................... 12,562 71,603
-----------
APPAREL RETAIL--0.3%
Ross Stores, Inc. .................................. 2,801 74,030
-----------
APPLICATION SOFTWARE--4.3%
BEA Systems, Inc. (b) .............................. 7,027 86,432
Citrix Systems, Inc. (b) ........................... 3,663 77,692
Compuware Corp. (b) ................................ 4,451 26,884
Intuit, Inc. (b) ................................... 4,697 248,518
Mercury Interactive Corp. (b) ...................... 1,801 87,601
PeopleSoft, Inc. (b) ............................... 9,953 226,928
Siebel Systems, Inc. (b) ........................... 10,912 151,350
Synopsys, Inc. (b) ................................. 2,699 91,118
-----------
996,523
-----------
AUTO PARTS & EQUIPMENT--0.3%
Gentex Corp. (b) ................................... 1,500 66,240
-----------
BIOTECHNOLOGY--8.8%
Amgen, Inc. (b) .................................... 11,295 698,031
Biogen Idec, Inc. (b) .............................. 7,115 261,684
Cephalon, Inc. (b) ................................. 957 46,328
Chiron Corp. (b) ................................... 4,932 281,075
Genzyme Corp. (b) .................................. 5,279 260,466
Gilead Sciences, Inc. (b) .......................... 3,747 217,851
Invitrogen Corp. (b) ............................... 902 63,140
MedImmune, Inc. (b) ................................ 4,976 126,390
Millennium Pharmaceuticals, Inc. (b) ............... 6,207 115,885
-----------
2,070,850
-----------
BROADCASTING & CABLE TV--3.5%
Comcast Corp. Class A (b) .......................... 17,847 586,631
EchoStar Communications Corp. Class A (b) .......... 4,773 162,282
PanAmSat Corp. (b) ................................. 3,801 81,949
-----------
830,862
-----------
COMMUNICATIONS EQUIPMENT--10.7%
Cisco Systems, Inc. (b) ............................ 46,333 1,125,429
Comverse Technology, Inc. (b) ...................... 3,752 65,998
JDS Uniphase Corp. (b) ............................. 30,516 111,383
Juniper Networks, Inc. (b) ......................... 4,806 89,776
QLogic Corp. (b) ................................... 1,809 93,344
QUALCOMM, Inc. ..................................... 18,128 977,643
Tellabs, Inc. (b) .................................. 4,467 37,657
-----------
2,501,230
-----------
COMPUTER HARDWARE--4.0%
Apple Computer, Inc. (b) ........................... 9,609 205,344
Dell, Inc. (b) ..................................... 17,718 601,703
Sun Microsystems, Inc. (b) ......................... 26,697 119,870
-----------
926,917
-----------
COMPUTER STORAGE & PERIPHERALS--1.0%
Network Appliance, Inc. (b) ........................ 6,779 139,173
SanDisk Corp. (b) .................................. 1,371 83,823
-----------
222,996
-----------
SHARES VALUE
------ -----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.9%
PACCAR, Inc. ....................................... 2,457 $ 209,140
-----------
DATA PROCESSING & OUTSOURCED SERVICES--1.8%
Fiserv, Inc. (b) ................................... 4,555 179,968
Paychex, Inc. ...................................... 6,720 249,984
-----------
429,952
-----------
DIVERSIFIED COMMERCIAL SERVICES--2.1%
Apollo Group, Inc. Class A (b) ..................... 3,351 227,868
Career Education Corp. (b) ......................... 1,914 76,694
Cintas Corp. ....................................... 3,849 192,950
-----------
497,512
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--0.4%
American Power Conversion Corp. .................... 3,749 91,663
-----------
ELECTRONIC MANUFACTURING SERVICES--0.8%
Molex, Inc. ........................................ 1,853 64,651
Sanmina-SCI Corp. (b) .............................. 10,374 130,816
-----------
195,467
-----------
FOOD RETAIL--0.3%
Whole Foods Market, Inc. (b) ....................... 1,107 74,313
-----------
GENERAL MERCHANDISE STORES--0.3%
Dollar Tree Stores, Inc. (b) ....................... 2,080 62,525
-----------
HEALTH CARE DISTRIBUTORS--0.6%
Patterson Dental Co. (b) ........................... 1,229 78,853
Schein (Henry), Inc. (b) ........................... 763 51,563
-----------
130,416
-----------
HEALTH CARE EQUIPMENT--1.3%
Biomet, Inc. ....................................... 6,467 235,463
DENTSPLY International, Inc. ....................... 1,427 64,458
-----------
299,921
-----------
HEALTH CARE SERVICES--0.6%
Express Scripts, Inc. (b) .......................... 1,317 87,488
Lincare Holdings, Inc. (b) ......................... 1,782 53,514
-----------
141,002
-----------
HOME ENTERTAINMENT SOFTWARE--1.1%
Electronic Arts, Inc. (b) .......................... 5,643 269,623
-----------
HYPERMARKETS & SUPER CENTERS--0.7%
Costco Wholesale Corp. (b) ......................... 4,530 168,425
-----------
INTERNET RETAIL--5.6%
Amazon.com, Inc. (b) ............................... 5,003 263,358
eBay, Inc. (b) ..................................... 9,051 584,604
InterActiveCorp (b) ................................ 13,877 470,847
-----------
1,318,809
-----------
INTERNET SOFTWARE & SERVICES--1.4%
VeriSign, Inc. (b) ................................. 4,278 69,732
Yahoo!, Inc. (b) ................................... 5,943 268,445
-----------
338,177
-----------
MANAGED HEALTH CARE--0.2%
First Health Group Corp. (b) ....................... 1,841 35,826
-----------
MOVIES & ENTERTAINMENT--0.3%
Pixar, Inc. (b) .................................... 1,045 72,408
-----------
OIL & GAS DRILLING--0.2%
Patterson-UTI Energy, Inc. (b) ..................... 1,569 51,652
-----------
See Notes to Financial Statements
154
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
SHARES VALUE
------ -----------
PAPER PACKAGING--0.4%
Smurfit-Stone Container Corp. (b) .................. 4,557 $ 84,624
-----------
RESTAURANTS--1.5%
Starbucks Corp. (b) ................................ 10,283 339,956
-----------
SEMICONDUCTOR EQUIPMENT--3.5%
Applied Materials, Inc. (b) ........................ 16,158 362,747
KLA-Tencor Corp. (b) ............................... 4,433 260,084
Lam Research Corp. (b) ............................. 2,531 81,751
Novellus Systems, Inc. (b) ......................... 2,917 122,660
-----------
827,242
-----------
SEMICONDUCTORS--13.2%
Altera Corp. (b) ................................... 10,008 227,182
Broadcom Corp. Class A (b) ......................... 4,031 137,417
Intel Corp. ........................................ 42,970 1,383,634
Intersil Corp. Class A ............................. 2,635 65,480
Linear Technology Corp. ............................ 7,844 329,997
Maxim Integrated Products, Inc. .................... 8,650 430,770
Microchip Technology, Inc. ......................... 3,240 108,086
NVIDIA Corp. (b) ................................... 3,293 76,562
Xilinx, Inc. (b) ................................... 8,532 330,530
-----------
3,089,658
-----------
SPECIALTY CHEMICALS--0.3%
Sigma-Aldrich Corp. ................................ 1,251 71,532
-----------
SPECIALTY STORES--2.4%
Bed Bath & Beyond, Inc. (b) ........................ 7,481 324,301
PETsMART, Inc. ..................................... 2,658 63,261
Staples, Inc. (b) .................................. 6,248 170,570
-----------
558,132
-----------
SYSTEMS SOFTWARE--13.4%
Adobe Systems, Inc. ................................ 4,309 169,344
Microsoft Corp. (c) ................................ 69,909 1,925,294
Oracle Corp. (b) ................................... 40,942 540,434
Symantec Corp. (b) ................................. 6,052 209,702
VERITAS Software Corp. (b) ......................... 8,210 305,083
-----------
3,149,857
-----------
TECHNOLOGY DISTRIBUTORS--0.4%
CDW Corp. .......................................... 1,626 93,918
-----------
TRADING COMPANIES & DISTRIBUTORS--0.3%
Fastenal Co. ....................................... 1,363 68,068
-----------
WIRELESS TELECOMMUNICATION SERVICES--3.1%
Nextel Communications, Inc. Class A (b) ............ 25,740 722,264
-----------
TOTAL COMMON STOCKS
(Identified cost $19,015,605) ............................... 21,344,092
-----------
SHARES VALUE
------ -----------
FOREIGN COMMON STOCKS--3.7%
AIRLINES--0.3%
Ryanair Holdings plc ADR (United Kingdom) (b) ...... 1,141 $ 57,780
-----------
COMMUNICATIONS EQUIPMENT--0.4%
Research In Motion Ltd. (United States) (b) ........ 1,483 99,109
-----------
CONSUMER ELECTRONICS--0.4%
Garmin Ltd. (United States) ........................ 1,883 102,586
-----------
ELECTRONIC MANUFACTURING SERVICES--0.7%
Flextronics International Ltd. (Singapore) (b) ..... 10,751 159,545
-----------
PHARMACEUTICALS--0.9%
Teva Pharmaceutical Industries Ltd. ADR (Israel) ... 3,615 205,006
-----------
SEMICONDUCTORS--0.7%
ATI Technologies, Inc. (Canada) (b) ................ 4,509 68,176
Marvell Technology Group Ltd. (Bermuda) (b) ........ 2,273 86,215
-----------
154,391
-----------
SYSTEMS SOFTWARE--0.3%
Check Point Software Technologies Ltd. (Israel) (b) 4,563 76,750
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $849,497) .................................. 855,167
-----------
EXCHANGE TRADED FUNDS--2.3%
Nasdaq-100 Shares (b) .............................. 14,957 545,333
-----------
TOTAL EXCHANGE TRADED FUNDS
(Identified cost $521,036) .................................. 545,333
-----------
TOTAL LONG TERM INVESTMENTS--97.1%
(Identified cost $20,386,138) ............................... 22,744,592
-----------
PAR
VALUE
(000)
-----
SHORT-TERM OBLIGATIONS--3.0%
U.S. TREASURY BILLS--0.4%
U.S. Treasury Bill 0.893%, 1/22/04 (c) ............. $ 60 59,969
U.S. Treasury Bill 0.91%, 1/22/04 (c) .............. 20 19,990
-----------
79,959
-----------
REPURCHASE AGREEMENTS--2.6%
State Street Bank & Trust Co. repurchase
agreement 0.05% dated 12/31/03
due 1/2/04, repurchase price $615,002,
collaterized by U.S. Treasury Bond
13.25%, 5/15/14, market value $631,575. .......... 615 615,000
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $694,959) .................................. 694,959
-----------
TOTAL INVESTMENTS--100.1%
(Identified cost $21,081,097) ............................... 23,439,551(a)
Other assets and liabilities, net--(0.1)% ................... (18,656)
-----------
NET ASSETS--100.0% ............................................ $23,420,895
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $3,957,912 and gross
depreciation of $5,083,349 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$24,564,988.
(b) Non-income producing.
(c) All or a portion segregated as collateral for futures contracts.
See Notes to Financial Statements
155
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $21,081,097) ........................................... $23,439,551
Cash ................................................................................................... 337
Receivables
Fund shares sold ..................................................................................... 66,011
Receivable from adviser .............................................................................. 12,892
Dividends ............................................................................................ 3,374
Prepaid expenses ....................................................................................... 6,405
-----------
Total assets ....................................................................................... 23,528,570
-----------
LIABILITIES
Payables
Fund shares repurchased .............................................................................. 29,393
Investment securities purchased ...................................................................... 17,891
Professional fee ..................................................................................... 30,037
Printing fee ......................................................................................... 13,015
Financial agent fee .................................................................................. 4,285
Trustees' fee ........................................................................................ 2,360
Variation margin for future contracts ................................................................ 1,610
Administration fee ................................................................................... 1,456
Accrued expenses ....................................................................................... 7,628
-----------
Total liabilities .................................................................................. 107,675
-----------
NET ASSETS ............................................................................................. $23,420,895
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ..................................................... $27,338,563
Accumulated net realized loss ........................................................................ (6,296,638)
Net unrealized appreciation .......................................................................... 2,378,970
-----------
NET ASSETS ............................................................................................. $23,420,895
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ....................... 5,954,795
===========
Net asset value and offering price per share ........................................................... $3.93
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................ $ 34,868
Interest ............................................................................................. 634
Foreign taxes withheld ............................................................................... (150)
----------
Total investment income ............................................................................ 35,352
----------
EXPENSES
Investment advisory fee .............................................................................. 50,330
Financial agent fee .................................................................................. 45,604
Administration fee ................................................................................... 11,073
Custodian ............................................................................................ 45,433
Professional ......................................................................................... 24,113
Printing ............................................................................................. 21,711
Trustees ............................................................................................. 5,931
Miscellaneous ........................................................................................ 3,760
----------
Total expenses ..................................................................................... 207,955
Less expenses borne by investment adviser .......................................................... (121,672)
Custodian fees paid indirectly ..................................................................... (1)
----------
Net expenses ....................................................................................... 86,282
----------
NET INVESTMENT LOSS .................................................................................... (50,930)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ...................................................................... (739,792)
Net realized gain on futures contracts ............................................................... 66,426
Net change in unrealized appreciation (depreciation) on investments .................................. 6,195,973
Net change in unrealized appreciation (depreciation) on futures ...................................... 29,794
----------
NET GAIN ON INVESTMENTS ................................................................................ 5,552,401
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................................... $5,501,471
==========
See Notes to Financial Statements
156
PHOENIX-NORTHERN NASDAQ-100 INDEX(R) SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ (50,930) $ (38,564)
Net realized gain (loss) ...................................................................... (673,366) (2,954,491)
Net change in unrealized appreciation (depreciation) .......................................... 6,225,767 (1,001,163)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............................... 5,501,471 (3,994,218)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (4,912,949 and 2,042,949 shares, respectively) .................. 16,637,089 6,451,751
Cost of shares repurchased (2,019,677 and 1,180,124 shares, respectively) ..................... (6,807,425) (3,674,943)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... 9,829,664 2,776,808
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 15,331,135 (1,217,410)
NET ASSETS
Beginning of period ........................................................................... 8,089,760 9,307,170
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND
$0, RESPECTIVELY) ........................................................................... $23,420,895 $ 8,089,760
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
-------------------------------- 8/15/00 TO
2003 2002 2001 12/31/00
------ ------ ------ --------------
Net asset value, beginning of period ........................................... $ 2.64 $ 4.23 $ 6.32 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................................................. (0.01)(5) (0.01)(5) (0.02)(5) (0.01)
Net realized and unrealized gain (loss) ...................................... 1.30 (1.58) (2.07) (3.67)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........................................... 1.29 (1.59) (2.09) (3.68)
------ ------ ------ ------
CHANGE IN NET ASSET VALUE ...................................................... 1.29 (1.59) (2.09) (3.68)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ................................................. $ 3.93 $ 2.64 $ 4.23 $ 6.32
====== ====== ====== ======
Total return ................................................................... 48.85% (37.58)% (33.04)% (36.78)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) .......................................... $23,421 $8,090 $9,307 $5,515
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (3) ....................................................... 0.60%(4) 0.58%(4) 0.50%(4) 0.50%(1)
Net investment income (loss) ................................................. (0.35)% (0.48)% (0.40)% (0.30)%(1)
Portfolio turnover ............................................................. 18% 42% 91% 50%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment advisor had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.45%, 2.72%, 2.35% and 3.93% for the periods ended December 31, 2003, 2002, 2001 and 2000, respectively.
(4) 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.
(5) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
157
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is dividend growth, current income and
capital appreciation.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 27.46%. For
the same period, the series' benchmark, the S&P 500(R) Index, 1 returned 28.71%.
All performance figures assume reinvestment of distributions. Past performance
is not indicative of future results and current performance may be higher or
lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: 2003 was a real roller coaster. Worries surrounding a war with Iraq, and
pessimism and uncertainty regarding the economy and earnings sent the S&P 500(R)
Index down almost 9% by mid-March. Then, it was "off to the races," as economic
data surpassed even the most optimistic expectations and corporate earnings
estimates for 2003 were revised higher throughout the year. With this, investors
once again gained confidence with the stock market and returned to mutual funds,
variable annuities and other equity investment vehicles. From the March 11th
low, the S&P 500(R) Index rose a dramatic 40.86%. For the full year, the Dow
Jones Industrial Average(SM) 2 had a total return of 28.04% and the NASDAQ-100
Index(R) 3 was up a shocking 49.12% due to its heavy exposure to red-hot
technology issues.
There were an abundance of issues and events throughout the year. There was
the war with Iraq, followed by victory and subsequent capture of Saddam Hussein.
The Federal Reserve Board held its target short-term interest rate at a 45-year
low because of tame inflation and excess capacity in domestic factories. Gold
prices rose to 14-year highs and the dollar fell to record lows against the Euro
as investors' concerns heightened about the large U.S. budget and trade
deficits. Health care officials in Asia and other countries had to battle Sudden
Acute Respiratory Syndrome (SARS). Stock market scandals continued to unfold
including Imclone, Freddie Mac, Tyco, HealthSouth and Parmalat. Richard Grasso,
chairman and CEO of the New York Stock exchange, resigned over controversy
regarding his huge pay package. And finally, New York Attorney General Eliot
Spitzer began an investigation into the $7 trillion mutual-fund industry. Fraud
was revealed at some of the Nation's top mutual fund companies regarding illegal
after-hours trading and market-timing arrangements that hurt long-term
investors.
Characteristics of the best performing stocks this year seemed to defy
logic. The rubble from the late-90s investment bubble came back from the dead
and produced eye-popping returns. Stocks investors typically avoid had the best
returns. These companies had the following characteristics: low price, high
risk, no dividend, junk credit ratings and unattractive valuations. High
quality, dividend-paying stocks performed poorly relative to broad stock market
indices. This was a surprise given that passage of the President's Tax Bill
lowered the tax rate on corporate dividends to 15% from as high as 38.6% for the
highest income individuals.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Although we are very pleased with the portfolio's high absolute total return
of 27.46% for the year, it did lag the benchmark S&P 500(R) Index by 125 basis
points (1.25 percentage points). Most of the under-performance was related to
the quality issue discussed above. The series' exposures to lower volatility,
higher quality, dividend-paying stocks were not beneficial in 2003. Also, an
overweight in Telephone stocks had an adverse impact on the fund's performance.
The Telephone industry was the only broad group in the stock market with a
negative return last year. The companies continue to be plagued by excess
capacity, price competition and declining phone lines in service. As an example,
our position in Verizon Communications had a total return of minus 5.6% for the
year.
The portfolio did have several noteworthy success stories. The smaller
capitalization stocks in the portfolio performed well. Small cap stocks have
high leverage to a rebounding economy and usually generate outsized earnings
gains. The Russell 2000(R) Index 4 had a total return of 47.25% last year. The
portfolio's large weighting in bank stocks and medical services companies had a
positive impact on performance. Bank stocks benefited from low interest rates
and improvement in their capital markets divisions. Medical service stocks had
strong returns as their earnings beat expectations on rising premiums and
positive enrollment trends.
Individual stocks in the portfolio that performed well included Intel,
Ingersoll-Rand, PMC-Sierra, Occidental Petroleum and Mylan Labs. Intel rose
106.62% for the year as computer manufacturers bought more chips on strong sales
of personal computers. Ingersoll-Rand, a diversified equipment manufacturer, had
a total return of 60.03% as strong economic growth propelled sales of
refrigeration and construction equipment. PMC-Sierra shares rose 261.51% in 2003
on strong sales of
158
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
communications chips. Occidental Petroleum stock had a total return of 53.05%
last year as crude oil prices remained high due to Mid-East tensions and
production discipline by OPEC members. Mylan Labs shares produced a total return
of 63.53% on approvals of several generic drugs, including products for treating
hypertension, pain and depression.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: The S&P 500(R) Index finished the year with a price-to-earnings multiple of
20.4. Valuation is expensive by historical standards. The long-term, average p/e
multiple of the index is about 16 times earnings. Earnings growth is looking
attractive. According to Bloomberg, S&P 500(R) Index earnings are expected to
grow 11% in 2004. Another positive factor for stocks is the low rate of return
on money market and fixed income investments. According to the Wall Street
Journal, the average yield on taxable money market funds is only 0.52%. The
10-year Treasury Note yield is 4.25%. So, investors seeking better opportunities
will look to the stock market. Morgan Stanley has a 4.7% forecast for U.S.
economic growth in 2004. Also, economic growth projections have been trending
upward and we are seeing signs of increasing job growth, manufacturing activity
and business capital spending. All signs point to a healthy and growing economy,
which in turn should help stock prices to continue on their upward path.
One word of warning at this time is if a sudden rise in interest rates
causes earnings momentum to stall, the probability of a stock market correction
would increase.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
3/2/98 TO
1 YEAR 5 YEARS 12/31/03
- --------------------------------------------------------------------------------
Growth and Income Series 27.46% (0.18)% 3.08%
- --------------------------------------------------------------------------------
S&P 500(R) Index 1 28.71% (0.57)% 2.52%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Growth and Income Series S&P 500(R) Index 1
3/2/98 $10,000 $10,000
12/31/98 $12,045 $11,895
12/31/99 $14,093 $14,409
12/29/00 $13,162 $13,086
12/31/01 $12,087 $11,532
12/31/02 $ 9,366 $ 8,983
12/31/03 $11,938 $11,562
1 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance.
2 The Dow Jones Industrial Average(SM) is a commonly used measure of large-cap
stock performance and is provided for general comparative purposes.
3 The NASDAQ 100 Index(R) measures technology-oriented stock total return
performance and is provided for general comparative purposes.
4 The Russell 2000(R) Index is a market capitalization-weighted index of the
2,000 smallest companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
159
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ ------------
COMMON STOCKS--97.0%
AEROSPACE & DEFENSE--1.7%
Lockheed Martin Corp. ............................. 14,100 $ 724,740
United Technologies Corp. ......................... 11,200 1,061,424
------------
1,786,164
------------
AGRICULTURAL PRODUCTS--0.2%
Corn Products International, Inc. ................. 2,900 99,905
Fresh Del Monte Produce, Inc. ..................... 5,400 128,682
------------
228,587
------------
AIRLINES--0.3%
ExpressJet Holdings, Inc. (b) ..................... 19,400 291,000
------------
APPAREL RETAIL--0.6%
Gap, Inc. (The) ................................... 29,500 684,695
------------
APPAREL, ACCESSORIES & LUXURY GOODS--0.7%
Liz Claiborne, Inc. ............................... 9,800 347,508
V. F. Corp. ....................................... 9,300 402,132
------------
749,640
------------
APPLICATION SOFTWARE--0.1%
Citrix Systems, Inc. (b) .......................... 3,900 82,719
Intuit, Inc. (b) .................................. 1,500 79,365
------------
162,084
------------
AUTO PARTS & EQUIPMENT--0.3%
Lear Corp. ........................................ 4,800 294,384
------------
AUTOMOBILE MANUFACTURERS--0.7%
Ford Motor Co. .................................... 37,900 606,400
General Motors Corp. .............................. 2,700 144,180
------------
750,580
------------
BIOTECHNOLOGY--0.4%
Amgen, Inc. (b) ................................... 5,500 339,900
Invitrogen Corp. (b) .............................. 900 63,000
------------
402,900
------------
BROADCASTING & CABLE TV--0.1%
PanAmSat Corp. (b) ................................ 7,000 150,920
------------
BUILDING PRODUCTS--0.1%
Lennox International, Inc. ........................ 4,300 71,810
------------
CASINOS & GAMING--0.2%
GTECH Holdings Corp. .............................. 5,000 247,450
------------
COMMUNICATIONS EQUIPMENT--3.6%
Cisco Systems, Inc. (b) ........................... 106,400 2,584,456
Harris Corp. ...................................... 1,800 68,310
Motorola, Inc. .................................... 27,600 388,332
QUALCOMM, Inc. .................................... 11,700 630,981
Scientific-Atlanta, Inc. .......................... 3,100 84,630
Tekelec (b) ....................................... 4,600 71,530
------------
3,828,239
------------
COMPUTER & ELECTRONICS RETAIL--0.3%
RadioShack Corp. .................................. 11,100 340,548
------------
COMPUTER HARDWARE--3.8%
Dell, Inc. (b) .................................... 31,000 1,052,760
Hewlett-Packard Co. ............................... 53,700 1,233,489
International Business Machines Corp. ............. 19,400 1,797,992
------------
4,084,241
------------
SHARES VALUE
------ ------------
COMPUTER STORAGE & PERIPHERALS--0.7%
EMC Corp. (b) ..................................... 29,200 $ 377,264
Lexmark International, Inc. (b) ................... 2,400 188,736
Storage Technology Corp. (b) ...................... 6,500 167,375
------------
733,375
------------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--0.8%
Caterpillar, Inc. ................................. 2,900 240,758
Deere & Co. ....................................... 5,200 338,260
PACCAR, Inc. ...................................... 2,800 238,336
------------
817,354
------------
CONSUMER FINANCE--1.9%
American Express Co. .............................. 22,500 1,085,175
Capital One Financial Corp. ....................... 900 55,161
MBNA Corp. ........................................ 38,000 944,300
------------
2,084,636
------------
DATA PROCESSING & OUTSOURCED SERVICES--0.4%
Alliance Data Systems Corp. (b) ................... 3,700 102,416
Computer Sciences Corp. (b) ....................... 2,700 119,421
First Data Corp. .................................. 5,400 221,886
------------
443,723
------------
DEPARTMENT STORES--1.6%
Federated Department Stores, Inc. ................. 14,100 664,533
May Department Stores Co. (The) ................... 24,500 712,215
Nordstrom, Inc. ................................... 9,100 312,130
------------
1,688,878
------------
DIVERSIFIED BANKS--7.6%
Bank of America Corp. ............................. 31,900 2,565,717
Bank One Corp. .................................... 15,400 702,086
FleetBoston Financial Corp. ....................... 23,200 1,012,680
U.S. Bancorp ...................................... 70,700 2,105,446
Wachovia Corp. .................................... 38,700 1,803,033
------------
8,188,962
------------
DIVERSIFIED CAPITAL MARKETS--2.0%
J.P. Morgan Chase & Co. ........................... 57,900 2,126,667
------------
DIVERSIFIED CHEMICALS--0.1%
Dow Chemical Co. (The) ............................ 3,100 128,867
------------
DIVERSIFIED COMMERCIAL SERVICES--0.6%
Block (H&R), Inc. ................................. 2,400 132,888
Cendant Corp. (b) ................................. 11,000 244,970
Viad Corp. ........................................ 9,300 232,500
------------
610,358
------------
ELECTRIC UTILITIES--2.2%
American Electric Power Co., Inc. ................. 3,800 115,938
Entergy Corp. ..................................... 8,200 468,466
Exelon Corp. ...................................... 17,000 1,128,120
Great Plains Energy, Inc. ......................... 20,400 649,128
PPL Corp. ......................................... 200 8,750
------------
2,370,402
------------
ELECTRICAL COMPONENTS & EQUIPMENT--0.2%
Hubbell, Inc. Class B ............................. 2,600 114,660
Rockwell Automation, Inc. ......................... 4,100 145,960
------------
260,620
------------
See Notes to Financial Statements
160
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
SHARES VALUE
------ ------------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.8%
Agilent Technologies, Inc. (b) .................... 9,100 $ 266,084
PerkinElmer, Inc. ................................. 12,000 204,840
Thermo Electron Corp. (b) ......................... 12,300 309,960
Waters Corp. (b) .................................. 3,200 106,112
------------
886,996
------------
FERTILIZERS & AGRICULTURAL CHEMICALS--0.3%
Monsanto Co. ...................................... 12,500 359,750
------------
FOOTWEAR--0.3%
Reebok International Ltd. ......................... 3,100 121,892
Wolverine World Wide, Inc. ........................ 8,100 165,078
------------
286,970
------------
FOREST PRODUCTS--0.3%
Weyerhaeuser Co. .................................. 4,500 288,000
------------
GAS UTILITIES--0.7%
AGL Resources, Inc. ............................... 4,500 130,950
NiSource, Inc. .................................... 30,200 662,588
------------
793,538
------------
GOLD--0.1%
Newmont Mining Corp. .............................. 2,500 121,525
------------
HEALTH CARE DISTRIBUTORS--0.4%
McKesson Corp. .................................... 12,800 411,648
------------
HEALTH CARE EQUIPMENT--1.1%
Bard (C.R.), Inc. ................................. 3,900 316,875
Beckman Coulter, Inc. ............................. 800 40,664
Becton, Dickinson & Co. ........................... 8,000 329,120
Guidant Corp. ..................................... 7,400 445,480
Varian Medical Systems, Inc. (b) .................. 500 34,550
------------
1,166,689
------------
HEALTH CARE SERVICES--0.1%
IMS Health, Inc. .................................. 2,500 62,150
------------
HEALTH CARE SUPPLIES--0.3%
Bausch & Lomb, Inc. ............................... 6,600 342,540
------------
HOME IMPROVEMENT RETAIL--1.1%
Home Depot, Inc. (The) ............................ 19,600 695,604
Sherwin-Williams Co. (The) ........................ 14,500 503,730
------------
1,199,334
------------
HOUSEHOLD APPLIANCES--0.4%
Black & Decker Corp. (The) ........................ 8,100 399,492
------------
HOUSEHOLD PRODUCTS--1.3%
Clorox Co. (The) .................................. 9,300 451,608
Procter & Gamble Co. (The) ........................ 10,000 998,800
------------
1,450,408
------------
HOUSEWARES & SPECIALTIES--0.6%
Fortune Brands, Inc. .............................. 8,300 593,367
------------
HYPERMARKETS & SUPER CENTERS--0.4%
Wal-Mart Stores, Inc. ............................. 8,200 435,010
------------
INDUSTRIAL CONGLOMERATES--1.1%
3M Co. ............................................ 8,400 714,252
Textron, Inc. ..................................... 3,300 188,298
Tyco International Ltd. ........................... 11,500 304,750
------------
1,207,300
------------
SHARES VALUE
------ ------------
INDUSTRIAL MACHINERY--2.5%
Briggs & Stratton Corp. ........................... 11,700 $ 788,580
Eaton Corp. ....................................... 5,700 615,486
Illinois Tool Works, Inc. ......................... 1,000 83,910
Ingersoll-Rand Co. Class A ........................ 17,500 1,187,900
------------
2,675,876
------------
INTEGRATED OIL & GAS--7.4%
Amerada Hess Corp. ................................ 1,000 53,170
ChevronTexaco Corp. ............................... 24,500 2,116,555
ConocoPhillips .................................... 5,000 327,850
Exxon Mobil Corp. ................................. 91,000 3,731,000
Occidental Petroleum Corp. ........................ 40,500 1,710,720
------------
7,939,295
------------
INTEGRATED TELECOMMUNICATION SERVICES--5.0%
ALLTEL Corp. ...................................... 6,600 307,428
AT&T Corp. ........................................ 8,900 180,670
AT&T Wireless Services, Inc. (b) .................. 21,000 167,790
BellSouth Corp. ................................... 43,100 1,219,730
CenturyTel, Inc. .................................. 6,300 205,506
SBC Communications, Inc. .......................... 33,300 868,131
Sprint Corp. (FON Group) .......................... 52,600 863,692
Verizon Communications, Inc. ...................... 44,400 1,557,552
------------
5,370,499
------------
INTERNET SOFTWARE & SERVICES--0.4%
United Online, Inc. (b) ........................... 6,150 103,258
VeriSign, Inc. (b) ................................ 17,900 291,770
------------
395,028
------------
INVESTMENT BANKING & BROKERAGE--3.0%
Bear Stearns Cos., Inc. (The) ..................... 2,700 215,865
Goldman Sachs Group, Inc. (The) ................... 1,400 138,222
Lehman Brothers Holdings, Inc. .................... 6,300 486,486
Merrill Lynch & Co., Inc. ......................... 21,800 1,278,570
Morgan Stanley .................................... 19,900 1,151,613
------------
3,270,756
------------
LEISURE PRODUCTS--0.5%
Brunswick Corp. ................................... 1,400 44,562
Hasbro, Inc. ...................................... 6,100 129,808
Mattel, Inc. ...................................... 20,800 400,816
------------
575,186
------------
LIFE & HEALTH INSURANCE--1.7%
AFLAC, Inc. ....................................... 3,900 141,102
Lincoln National Corp. ............................ 11,700 472,329
MetLife, Inc. ..................................... 34,600 1,164,982
Prudential Financial, Inc. ........................ 1,800 75,186
------------
1,853,599
------------
MANAGED HEALTH CARE--2.3%
Aetna, Inc. ....................................... 6,200 418,996
Anthem, Inc. (b) .................................. 800 60,000
CIGNA Corp. ....................................... 1,900 109,250
UnitedHealth Group, Inc. .......................... 21,400 1,245,052
WellPoint Health Networks, Inc. (b) ............... 7,200 698,328
------------
2,531,626
------------
MARINE--0.1%
Alexander & Baldwin, Inc. ......................... 4,400 148,236
------------
MOVIES & ENTERTAINMENT--1.6%
Fox Entertainment Group, Inc. Class A (b) ......... 4,100 119,515
Time Warner, Inc. (b) ............................. 64,000 1,151,360
Walt Disney Co. (The) ............................. 21,300 496,929
------------
1,767,804
------------
See Notes to Financial Statements
161
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
SHARES VALUE
------ ------------
OFFICE SERVICES & SUPPLIES--0.3%
HON Industries, Inc. .............................. 6,700 $ 290,244
------------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.2%
Citigroup, Inc. ................................... 64,300 3,121,122
Principal Financial Group, Inc. ................... 9,000 297,630
------------
3,418,752
------------
PACKAGED FOODS & MEATS--1.5%
ConAgra Foods, Inc. ............................... 14,800 390,572
Flowers Foods, Inc. ............................... 4,000 103,200
Kellogg Co. ....................................... 25,200 959,616
Smucker (J.M.) Co. (The) .......................... 3,600 163,044
------------
1,616,432
------------
PERSONAL PRODUCTS--1.2%
Gillette Co. (The) ................................ 36,100 1,325,953
------------
PHARMACEUTICALS--9.1%
Abbott Laboratories ............................... 16,400 764,240
Bristol-Myers Squibb Co. .......................... 80,100 2,290,860
Endo Pharmaceuticals Holdings, Inc. (b) ........... 3,000 57,780
Johnson & Johnson ................................. 30,100 1,554,966
Merck & Co., Inc. ................................. 27,500 1,270,500
Mylan Laboratories, Inc. .......................... 20,000 505,200
Pfizer, Inc. ...................................... 64,620 2,283,025
Wyeth ............................................. 26,000 1,103,700
------------
9,830,271
------------
PHOTOGRAPHIC PRODUCTS--0.6%
Eastman Kodak Co. ................................. 27,200 698,224
------------
PROPERTY & CASUALTY INSURANCE--2.4%
Allstate Corp. (The) .............................. 37,600 1,617,552
Ambac Financial Group, Inc. ....................... 7,700 534,303
Old Republic International Corp. .................. 16,500 418,440
------------
2,570,295
------------
PUBLISHING & PRINTING--0.4%
McGraw-Hill Cos., Inc. (The) ...................... 6,100 426,512
------------
REGIONAL BANKS--0.9%
Hibernia Corp. Class A ............................ 12,500 293,875
PNC Financial Services Group, Inc. (The) .......... 1,800 98,514
UnionBanCal Corp. ................................. 9,900 569,646
------------
962,035
------------
REITS--0.3%
Capital Automotive REIT ........................... 1,700 54,400
iStar Financial, Inc. ............................. 7,300 283,970
------------
338,370
------------
RESTAURANTS--0.6%
McDonald's Corp. .................................. 25,500 633,165
------------
SEMICONDUCTOR EQUIPMENT--0.3%
Applied Materials, Inc. (b) ....................... 13,600 305,320
------------
SEMICONDUCTORS--4.5%
Altera Corp. (b) .................................. 5,300 120,310
Conexant Systems, Inc. (b) ........................ 6,000 29,820
GlobespanVirata, Inc. (b) ......................... 24,100 141,708
Intel Corp. ....................................... 105,700 3,403,540
Linear Technology Corp. ........................... 7,500 315,525
LSI Logic Corp. (b) ............................... 10,800 95,796
Texas Instruments, Inc. ........................... 26,800 787,384
------------
4,894,083
------------
SHARES VALUE
------ ------------
SOFT DRINKS--0.4%
PepsiCo, Inc. ..................................... 8,600 $ 400,932
------------
SPECIALTY CHEMICALS--0.1%
Lubrizol Corp. (The) .............................. 2,700 87,804
------------
SPECIALTY STORES--0.6%
Barnes & Noble, Inc. (b) .......................... 1,800 59,130
Blockbuster, Inc. Class A ......................... 17,600 315,920
Claire's Stores, Inc. ............................. 12,400 233,616
------------
608,666
------------
SYSTEMS SOFTWARE--4.8%
Adobe Systems, Inc. ............................... 3,700 145,410
BMC Software, Inc. (b) ............................ 6,600 123,090
Microsoft Corp. ................................... 133,800 3,684,852
Oracle Corp. (b) .................................. 55,800 736,560
VERITAS Software Corp. (b) ........................ 12,100 449,636
------------
5,139,548
------------
TECHNOLOGY DISTRIBUTORS--0.0%
Avnet, Inc. (b) ................................... 800 17,328
------------
THRIFTS & MORTGAGE FINANCE--0.4%
Fannie Mae ........................................ 3,100 232,686
Freddie Mac ....................................... 2,800 163,296
------------
395,982
------------
TOBACCO--0.3%
Altria Group, Inc. ................................ 2,500 136,050
R.J. Reynolds Tobacco Holdings, Inc. .............. 2,700 157,005
------------
293,055
------------
WIRELESS TELECOMMUNICATION SERVICES--0.1%
Nextel Communications, Inc. Class A (b) ........... 5,700 159,942
------------
TOTAL COMMON STOCKS
(Identified cost $93,962,190) ............................... 104,472,619
------------
FOREIGN COMMON STOCKS--1.8%
AUTO PARTS & EQUIPMENT--0.2%
Autoliv, Inc. (Sweden) ............................ 6,500 244,725
------------
INTEGRATED OIL & GAS--0.7%
Royal Dutch Petroleum Co. NY Registered Shares
(Netherlands) ................................... 14,600 764,894
------------
IT CONSULTING & OTHER SERVICES--0.4%
Accenture Ltd. Class A (Bermuda) (b) .............. 15,300 402,696
------------
PACKAGED FOODS & MEATS--0.3%
Unilever NV NY Registered Shares (Netherlands) .... 4,500 292,050
------------
REINSURANCE--0.2%
RenaissanceRe Holdings Ltd. (Bermuda) ............. 3,500 171,675
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $1,634,129) ................................ 1,876,040
------------
TOTAL LONG TERM INVESTMENTS--98.8%
(Identified cost $95,596,319) ............................... 106,348,659
------------
See Notes to Financial Statements
162
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ----- ------------
SHORT-TERM OBLIGATIONS--1.4%
COMMERCIAL PAPER--1.4%
Emerson Electric Co. 0.95%, 1/2/04 ....... A-1 $1,550 $ 1,549,959
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,549,959) ................................ 1,549,959
------------
TOTAL INVESTMENTS--100.2%
(Identified cost $97,146,278) ............................... 107,898,618(a)
Other assets and liabilities, net--(0.2)% ................... (180,807)
------------
NET ASSETS--100.0% ............................................ $107,717,811
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $17,447,655 and gross
depreciation of $7,202,329 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$97,653,292.
(b) Non-income producing.
See Notes to Financial Statements
163
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $97,146,278) ............................................ $107,898,618
Cash .................................................................................................... 2,791
Receivables
Dividends ............................................................................................. 131,137
Fund shares sold ...................................................................................... 80,547
Prepaid expenses ........................................................................................ 1,348
------------
Total assets ........................................................................................ 108,114,441
------------
LIABILITIES
Payables
Fund shares repurchased ............................................................................... 257,729
Investment advisory fee ............................................................................... 61,076
Professional fee ...................................................................................... 28,133
Printing fee .......................................................................................... 24,719
Financial agent fee ................................................................................... 8,370
Administration fee .................................................................................... 6,804
Trustees' fee ......................................................................................... 2,360
Accrued expenses ........................................................................................ 7,439
------------
Total liabilities ................................................................................... 396,630
------------
NET ASSETS .............................................................................................. $107,717,811
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest ...................................................... $117,781,311
Undistributed net investment income ................................................................... 199,110
Accumulated net realized loss ......................................................................... (21,014,950)
Net unrealized appreciation ........................................................................... 10,752,340
------------
NET ASSETS .............................................................................................. $107,717,811
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ........................ 9,742,784
============
Net asset value and offering price per share ............................................................ $11.06
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ............................................................................................. $ 1,876,377
Interest .............................................................................................. 14,351
Foreign taxes withheld ................................................................................ (5,166)
-----------
Total investment income ............................................................................. 1,885,562
-----------
EXPENSES
Investment advisory fee ............................................................................... 619,735
Financial agent fee ................................................................................... 92,167
Administration fee .................................................................................... 68,171
Printing .............................................................................................. 37,889
Custodian ............................................................................................. 37,501
Professional .......................................................................................... 17,769
Trustees .............................................................................................. 5,931
Miscellaneous ......................................................................................... 11,982
-----------
Total expenses ...................................................................................... 891,145
Less expenses borne by investment adviser ........................................................... (50,061)
Custodian fees paid indirectly ...................................................................... (15)
-----------
Net expenses ........................................................................................ 841,069
-----------
NET INVESTMENT INCOME ................................................................................... 1,044,493
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ....................................................................... (1,127,003)
Net change in unrealized appreciation (depreciation) on investments ................................... 22,233,757
-----------
NET GAIN ON INVESTMENTS ................................................................................. 21,106,754
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... $22,151,247
===========
See Notes to Financial Statements
164
PHOENIX-OAKHURST GROWTH AND INCOME SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) .................................................................... $ 1,044,493 $ 785,960
Net realized gain (loss) ........................................................................ (1,127,003) (15,723,963)
Net change in unrealized appreciation (depreciation) ............................................ 22,233,757 (11,725,112)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..................................... 22,151,247 (26,663,115)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................... (1,026,887) (765,941)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ....................................... (1,026,887) (765,941)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,628,925 and 2,476,739 shares, respectively) .................... 25,492,892 25,355,966
Net asset value of shares issued from reinvestment of distributions (104,116 and 83,448 shares,
respectively) ................................................................................. 1,026,887 765,941
Cost of shares repurchased (2,204,696 and 3,481,424 shares, respectively) ....................... (20,750,616) (33,608,982)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ....................................... 5,769,163 (7,487,075)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................... 26,893,523 (34,916,131)
NET ASSETS
Beginning of period ............................................................................. 80,824,288 115,740,419
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $199,110 AND $192,455,
RESPECTIVELY) ................................................................................. $107,717,811 $ 80,824,288
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ................................ $ 8.77 $11.42 $12.52 $13.53 $11.99
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ...................................... 0.11 0.08 0.08 0.07 0.07
Net realized and unrealized gain (loss) ........................... 2.29 (2.65) (1.09) (0.96) 1.97
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................ 2.40 (2.57) (1.01) (0.89) 2.04
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income .............................. (0.11) (0.08) (0.06) (0.07) (0.07)
Distributions from net realized gains ............................. -- -- (0.03) (0.05) (0.16)
Tax return of capital ............................................. -- -- -- -- (0.27)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................. (0.11) (0.08) (0.09) (0.12) (0.50)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ........................................... 2.29 (2.65) (1.10) (1.01) 1.54
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................................... $11.06 $ 8.77 $11.42 $12.52 $13.53
====== ====== ====== ====== ======
Total return ........................................................ 27.46% (22.51)% (8.17)% (6.61)% 17.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ............................... $107,718 $80,824 $115,740 $112,489 $101,834
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) ............................................ 0.95%(2) 0.93%(2) 0.85%(2) 0.85% 0.85%
Net investment income ............................................. 1.18% 0.79% 0.65% 0.54% 0.71%
Portfolio turnover .................................................. 55% 60% 29% 53% 52%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.01%, 0.95%, 0.93%, 0.94% and 1.01% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(2) 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.
</FN>
See Notes to Financial Statements
165
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGERS DONG HAO ZHANG, PH.D. AND DAVID
L. ALBRYCHT, CFA
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is high total return over an extended period
of time consistent with prudent investment risk. The series may be appropriate
for investors seeking long-term capital appreciation, current income, and
conservation of capital from a balanced portfolio of stocks, bonds, and cash
equivalents.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 19.87%. For
the same period, the Balanced Benchmark 1 returned 18.49%. All performance
figures assume reinvestment of distributions. Past performance is not indicative
of future results and current performance may be higher or lower than the
performance show above.
Q: HOW WOULD YOU CHARACTERIZE THE EQUITY MARKETS DURING THE SERIES' RECENT
FISCAL YEAR?
A: For the 12 months ended December 31, 2003, the stock market made a strong
rally after three years of losses. Large-cap stocks represented by the S&P
500(R) Index 2 had a total return of 28.71%. The bear market that started in
March 2000 at the S&P 500(R) Index's high of 1,527 finally bottomed out in
October of 2002 when the S&P 500(R) Index closed at 777. Even though 2003
started with significant weakness in the market, attractive valuation finally
propelled investors to put their excess cash to work. For the past nine months,
the stock market has been on a sustained rally driven by encouraging economic
data ranging from high productivity gains, strong manufacturing recovery and
increasing consumer confidence.
During times of economic recovery, stock markets are often led by cyclical
issues that benefit from stronger business activities. This past 12 months was
no exception. Technology, basic materials and industrials sectors were the best
performers. Smaller market-cap companies also outperformed large-cap ones. 3
Q: HOW WOULD YOU CHARACTERIZE THE BOND MARKET DURING THE SERIES' RECENT FISCAL
YEAR?
A: During the year, the U.S. bond market was effected by near-record interest
rate lows. This was followed by a period that brought substantial volatility as
investors assessed the direction of the U.S. economy and debated what action, if
any, the Federal Reserve Board would take. The volatility was somewhat hidden by
the slight change of -0.15% registered by the Lehman Brothers Aggregate Bond
Index 4 in the third quarter of 2003. Rates increased slightly, while the yield
curve remained steep, reinforcing expectations in the bond market that the
economy would improve.
Many economic statistics improved over this time period, but a solid job
market recovery remained elusive. The ISM Manufacturing Index 5 rose to 54.7 in
August, showing improvement for the fourth straight month and remaining above 50
for the second month in a row. Any reading above 50 normally signifies expansion
in the manufacturing sector. Despite positive overall economic data, debate
continued through year-end over whether persistent high unemployment would
derail the economic recovery or if hiring would begin to gain momentum.
Q: HAVE ANY CHANGES TO THE SERIES' ASSET ALLOCATION BEEN MADE?
A: No. As part of our investment philosophy, we do not believe in trying to time
the market. We intend to remain approximately 60% invested in equities and 40%
in bonds.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: On December 31, 2003, the S&P 500(R) Index closed at 1,112. It was trading at
18.5 times Wall Street consensus earnings estimate of $60 for calendar year
2004. 6 We believe this is a fair valuation given the low inflation environment
we are in. Therefore, our base scenario assumes that 2004 will likely bring us a
single digit return consistent with historical averages. However, given a strong
economy and continued gains in productivity, corporate profits may surprise on
the upside. Recent comments from officials of Federal Reserve Board suggest that
they see little inflationary pressure and hence are likely to keep rates low for
a considerable period of time. Under that scenario, we believe stocks may return
significantly higher than historical averages. On the other hand, current
expectation for profit growth is very high. If companies fail to deliver to that
expectation, stocks would likely see downward pressure.
166
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
We continue to be opportunistic and have taken some more credit risk in the
portfolio due to improved credit fundamentals in the corporate and credit high
yield market. We feel that the greatest risk in the fixed income market is
interest rate risk, not credit risk, and opportunities continue in many
credit-intensive sectors.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
Strategic Allocation Series 19.87% 3.86% 8.39%
- --------------------------------------------------------------------------------
Balanced Benchmark 1 18.49% 2.68% 9.78%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 11.10%
- --------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index 4 4.10% 6.62% 6.95%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 12/31/93. Returns
shown include the reinvestment of all distributions at net asset value, and the
change in share price for the stated period. Returns indicate past performance,
which is not predictive of future performance. Investment return and net asset
value will fluctuate so that your shares, when redeemed, may be worth more or
less than the original cost. Please visit PhoenixWM.com for performance data
current to the most recent month-end. Foreign investing involves special risks
such as currency fluctuation and less public disclosure, as well as economic and
political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Lehman Brothers
Strategic Allocation Series Balanced Benchmark 1 S&P 500(R) Index 2 Aggregate Bond Index 4
12/31/93 $10,000 $10,000 $10,000 $10,000
12/30/94 $ 9,855 $ 9,968 $10,132 $ 9,708
12/29/95 $11,651 $12,920 $13,933 $11,502
12/31/96 $12,705 $14,876 $17,172 $11,920
12/31/97 $15,339 $18,390 $22,903 $13,071
12/31/98 $18,528 $22,267 $29,489 $14,206
12/31/99 $20,615 $24,950 $35,721 $14,089
12/29/00 $20,734 $24,696 $32,440 $15,727
12/31/01 $21,122 $23,781 $28,587 $17,055
12/31/02 $18,677 $21,446 $22,270 $18,805
12/31/03 $22,388 $25,413 $28,664 $19,576
1 The Balanced Benchmark is a composite index made up of 60% of the S&P 500(R)
Index, which measures stock market total return performance, and 40% of the
Lehman Brothers Aggregate Bond Index, which measures bond market total return
performance.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance.
3 Stocks of small or smaller companies may have less liquidity than those of
larger, established companies and may be subject to greater price volatility
and risk than the overall stock market.
4 The Lehman Brothers Aggregate Bond Index is an unmanaged, commonly used
measure of broad bond market total return performance.
5 The ISM Manufacturing Index measures manufacturing activity in the United
States as tabulated by the Institute for Supply Management.
6 As reported by FIRST CALL published by Thomson Financial, New York, NY and
ZACKS ADVISOR published by Zacks Investment Research, Chicago, IL.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
167
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
AGENCY MORTGAGE-BACKED SECURITIES--1.8%
Fannie Mae 6.50%, 10/1/31 ................. AAA $ 126 $ 131,624
Fannie Mae 6%, 9/1/32 ..................... AAA 587 607,259
Fannie Mae 6%, 12/1/32 .................... AAA 3,263 3,374,468
GNMA 6.50%, '23-'32 ....................... AAA 4,229 4,464,436
------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $8,305,690) ............................... 8,577,787
------------
AGENCY NON MORTGAGE-BACKED SECURITIES--1.1%
Freddie Mac 4.50%, 7/15/13 ................ AAA 5,000 4,939,745
------------
TOTAL AGENCY NON MORTGAGE-BACKED SECURITIES
(Identified cost $4,841,819) ............................... 4,939,745
------------
MUNICIPAL BONDS--3.3%
CALIFORNIA--0.8%
Alameda Corridor Transportation Authority
Revenue Taxable Series C 6.60%,
10/1/29 ................................. AAA 1,000 1,101,860
Fresno County Pension Obligation Revenue
Taxable 6.21%, 8/15/06 .................. AAA 255 278,333
Kern County Pension Obligation Revenue
Taxable 7.26%, 8/15/14 .................. AAA 420 494,684
Long Beach Pension Obligation Taxable
Unrefunded Balance Revenue 6.87%,
9/1/06 .................................. AAA 57 63,368
Sonoma County Pension Obligation Revenue
Taxable 6.625%, 6/1/13 .................. AAA 1,420 1,607,284
------------
3,545,529
------------
FLORIDA--1.1%
Miami Beach Special Obligation Taxable
Pension Funding Project Revenue 8.60%,
9/1/21 .................................. AAA 4,085 4,512,495
University of Miami Exchangeable Revenue
Taxable Series A 7.65%, 4/1/20 .......... AAA 810 885,565
------------
5,398,060
------------
OREGON--0.0%
Multnomah County Pension Obligation
General Obligation Taxable 7.20%,
6/1/10 .................................. Aaa(c) 100 116,319
------------
PENNSYLVANIA--0.6%
Philadelphia Authority For Industrial
Development Pension Funding Retirement
Systems Revenue Taxable Series A
5.79%, 4/15/09 .......................... AAA 1,400 1,533,350
Pittsburgh Pension Obligation Taxable
Series C 6.50%, 3/1/17 .................. AAA 1,250 1,375,687
------------
2,909,037
------------
TEXAS--0.8%
Dallas-Fort Worth International Airport
Revenue Taxable 6.40%, 11/1/07 .......... AAA 1,000 1,112,230
Texas Water Resources Finance Authority
Revenue 6.62%, 8/15/10 .................. AAA 2,265 2,569,937
------------
3,682,167
------------
TOTAL MUNICIPAL BONDS
(Identified cost $14,164,818) .............................. 15,651,112
------------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
ASSET-BACKED SECURITIES--3.0%
ANRC Auto Owner Trust 01-A, A4 4.32%,
6/16/08 ................................. AAA $3,200 $ 3,265,087
Capital Auto Receivables Asset Trust 02-3,
A3 3.58%, 10/16/06 ...................... AAA 1,400 1,436,750
Capital One Master Trust 01-5, A 5.30%,
6/15/09 ................................. AAA 2,500 2,659,374
Green Tree Financial Corp 96-10, M1 7.24%,
11/15/28 ................................ AA- 1,000 920,625
Irwin Home Equity 01-2, 2A4 5.68%,
2/25/16 ................................. AAA 897 895,948
Residential Asset Mortgage Products, Inc.
03-RS6, AI3 3.08%, 12/25/28 ............. AAA 2,000 1,986,846
WFS Financial Owner Trust 03-1, A4 2.74%,
9/20/10 ................................. AAA 1,000 998,872
Whole Auto Loan Trust 02-1, B 2.91%,
2/15/07 ................................. A 790 797,798
World Omni Auto Receivables Trust 02-A,
A4 4.05%, 7/15/09 ....................... AAA 1,250 1,290,257
------------
TOTAL ASSET-BACKED SECURITIES
(Identified cost $14,109,930) .............................. 14,251,557
------------
CORPORATE BONDS--12.4%
AEROSPACE & DEFENSE--0.2%
Rockwell Collins 4.75%, 12/1/13 ........... A 1,000 995,245
------------
AGRICULTURAL PRODUCTS--0.2%
Corn Products International, Inc. 8.25%,
7/15/07 ................................. BBB- 1,000 1,095,000
------------
ASSET MANAGEMENT & CUSTODY BANKS--0.2%
Janus Capital Group, Inc. 7.75%, 6/15/09 .. BBB+ 1,000 1,113,460
------------
AUTOMOBILE MANUFACTURERS--0.2%
DaimlerChrysler NA Holding Corp. 4.75%,
1/15/08 ................................. BBB 1,000 1,023,137
------------
BROADCASTING & CABLE TV--0.2%
Comcast Corp. 5.30%, 1/15/14 .............. BBB 1,000 996,679
------------
CASINOS & GAMING--0.5%
Harrah's Operating Co., Inc. 7.50%,
1/15/09 ................................. BBB- 250 284,748
Mandalay Resort Group 144A 6.375%,
12/15/11 (d) ............................ BB+ 750 774,375
MGM Mirage, Inc. 9.75%, 6/1/07 ............ BB- 500 572,500
Park Place Entertainment Corp. 9.375%,
2/15/07 ................................. BB- 500 567,500
------------
2,199,123
------------
CONSUMER FINANCE--2.1%
Capital One Bank 6.50%, 6/13/13 ........... BB+ 1,000 1,048,413
Ford Motor Credit Co. 7.25%, 10/25/11 ..... BBB 3,000 3,253,692
General Electric Capital Corp. Series MTN
2.75%, 9/25/06 .......................... AAA 1,250 1,254,594
General Electric Capital Corp. Series MTNA
6%, 6/15/12 ............................. AAA 2,000 2,168,906
General Motors Acceptance Corp. 6.875%,
8/28/12 ................................. BBB 1,500 1,613,739
Household Finance Corp. 6.75%, 5/15/11 .... A 500 562,871
------------
9,902,215
------------
See Notes to Financial Statements
168
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
DIVERSIFIED BANKS--0.8%
Bank of America Corp. 5.25%, 12/1/15 ...... A $1,500 $ 1,496,226
Rabobank Capital Funding II 144A 5.26%,
12/29/49 (d) ............................ AA 1,100 1,101,522
U.S. Bank NA 6.30%, 7/15/08 ............... A+ 500 557,840
Wachovia Corp. 5.625%, 12/15/08 ........... A- 500 540,726
------------
3,696,314
------------
DIVERSIFIED CHEMICALS--0.2%
Cabot Corp. 144A 5.25%, 9/1/13 (d) ........ BBB+ 750 743,621
------------
DIVERSIFIED COMMERCIAL SERVICES--0.5%
International Lease Finance Corp. 4.375%,
11/1/09 ................................. AA- 1,250 1,259,264
United Rentals North America, Inc. Series B
10.75%, 4/15/08 ......................... BB- 1,000 1,130,000
------------
2,389,264
------------
DIVERSIFIED METALS & MINING--0.1%
Freeport-McMoRan Copper & Gold, Inc.
(Indonesia) 10.125%, 2/1/10 (d) ......... B- 500 578,750
------------
ELECTRIC UTILITIES--0.1%
Entergy Gulf States, Inc. 144A 5.25%,
8/1/15 (d) .............................. BBB- 500 479,100
------------
ELECTRONIC EQUIPMENT MANUFACTURERS--0.2%
Mettler Toledo International, Inc. 144A
4.85%, 11/15/10 (d) ..................... BBB 1,000 1,010,108
------------
ENVIRONMENTAL SERVICES--0.2%
Allied Waste Industries, Inc. 7.875%,
3/15/05 ................................. BB- 1,000 1,050,000
------------
GAS UTILITIES--0.3%
AmeriGas Partners/Eagle Finance Corp.
Series B 8.875%, 5/20/11 ................ BB- 1,250 1,381,250
------------
HEALTH CARE DISTRIBUTORS--0.3%
AmerisourceBergen Corp. 8.125%, 9/1/08 .... BB 1,060 1,200,450
------------
HEALTH CARE FACILITIES--0.7%
HCA, Inc. 5.25%, 11/6/08 .................. BBB- 1,000 1,019,138
Manor Care, Inc. 7.50%, 6/15/06 ........... BBB 1,500 1,627,500
Tenet Healthcare Corp. 7.375%, 2/1/13 ..... BB- 750 757,500
------------
3,404,138
------------
HOMEBUILDING--0.2%
Lennar Corp. 7.625%, 3/1/09 ............... BBB- 1,000 1,153,631
------------
HOUSEHOLD PRODUCTS--0.2%
Kimberly-Clark Corp. 5%, 8/15/13 .......... AA- 1,000 1,022,149
------------
INDUSTRIAL MACHINERY--0.5%
ITW Cupids Financial Trust I 144A 6.55%,
12/31/11 (d) (i) ........................ AA- 2,000 2,166,004
------------
INSURANCE BROKERS--0.2%
Willis Corroon Corp. 9%, 2/1/09 ........... BB+ 675 712,125
------------
INTEGRATED OIL & GAS--0.1%
Conoco Funding Co. 5.45%, 10/15/06 ........ A- 250 268,224
------------
INTEGRATED TELECOMMUNICATION SERVICES--0.4%
AT&T Wireless Services, Inc. 7.875%,
3/1/11 .................................. BBB 125 144,643
CenturyTel, Inc. Series F 6.30%, 1/15/08 .. BBB+ 500 547,022
Verizon Communications Corp. 7.51%,
4/1/09 .................................. A+ 1,000 1,150,241
------------
1,841,906
------------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
INVESTMENT BANKING & BROKERAGE--0.3%
Merrill Lynch & Co., Inc. Series MTNB
3.375%, 9/14/07 ......................... A+ $1,500 $ 1,519,377
------------
LIFE & HEALTH INSURANCE--0.2%
Metlife, Inc. 5%, 11/24/13 ................ A 1,000 992,945
------------
MULTI-LINE INSURANCE--0.2%
Metropolitan Life Global Funding I 144A
5.20%, 9/18/13 (d) ...................... AA 1,000 1,005,864
------------
OIL & GAS EXPLORATION & PRODUCTION--0.7%
Chesapeake Energy Corp. 144A 6.875%,
1/15/16 (d) ............................. BB- 450 465,750
Pemex Project Funding Master Trust
7.875%, 2/1/09 .......................... BBB- 500 565,625
Pemex Project Funding Master Trust
9.125%, 10/13/10 ........................ BBB- 500 593,750
Pemex Project Funding Master Trust 8%,
11/15/11 ................................ BBB- 750 838,125
Pemex Project Funding Master Trust
7.375%, 12/15/14 (d) .................... BBB- 750 800,625
------------
3,263,875
------------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--0.1%
Teekay Shipping Corp. 8.32%, 2/1/08 ....... BB+ 230 242,650
------------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.8%
Principal Life Global Funding I 4.40%,
10/1/10 ................................. AA 1,500 1,510,064
TIAA Global Markets 144A 3.875%,
1/22/08 (d) ............................. AAA 2,000 2,032,954
------------
3,543,018
------------
PACKAGED FOODS & MEATS--0.2%
Campbell Soup Co. 5%, 12/3/12 ............. A 1,000 1,020,858
------------
PAPER PRODUCTS--0.1%
International Paper Co. 5.50%, 1/15/14 .... BBB 350 351,300
------------
RAILROADS--0.1%
Union Pacific Corp. 6.50%, 4/15/12 ........ BBB 500 555,300
------------
REGIONAL BANKS--0.2%
BB&T Corp. 5.20%, 12/23/15 ................ A- 1,000 991,315
------------
REITS--0.2%
HRPT Properties Trust 5.75%, 2/15/14 ...... BBB 1,000 1,002,712
------------
SPECIALIZED FINANCE--0.2%
CIT Group, Inc. 4.75%, 12/15/10 ........... A 850 855,320
------------
SPECIALTY STORES--0.3%
Autozone, Inc. 5.50%, 11/14/15 ............ BBB+ 1,250 1,241,285
------------
THRIFTS & MORTGAGE FINANCE--0.2%
Sovereign Bank 5.125%, 3/15/13 ............ BBB- 1,000 992,840
------------
TOTAL CORPORATE BONDS
(Identified cost $55,556,443) .............................. 58,000,552
------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--5.4%
Advanta Mortgage Loan Trust 00-2, A3
7.76%, 5/25/18 .......................... AAA 30 29,684
American Business Financial Services 02-2,
A3 4.76%, 6/15/21 ....................... AAA 1,000 1,004,339
CS First Boston Mortgage Securities Corp.
97-C2, A3 6.55%, 11/17/07 ............... AAA 4,200 4,645,523
CS First Boston Mortgage Securities Corp.
97-C2, B 6.72%, 11/17/07 ................ Aa(c) 2,000 2,225,136
DLJ Commercial Mortgage Corp. 98-CF2,
A1B 6.24%, 11/12/31 ..................... Aaa(c) 8,150 9,005,876
GMAC Commercial Mortgage Securities, Inc.
97-C2, A3 6.566%, 11/15/07 .............. Aaa(c) 1,250 1,369,927
See Notes to Financial Statements
169
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
NON-AGENCY MORTGAGE-BACKED SECURITIES--CONTINUED
J.P. Morgan Chase Commercial Mortgage
Securities Corp. 01-CIBC, A3 6.26%,
3/15/33 ................................. AAA $4,060 $ 4,477,765
Lehman Brothers Commercial Conduit
Mortgage Trust 99-C2, A2 7.325%,
9/15/09 ................................. Aaa(c) 1,840 2,126,218
Residential Funding Mortgage Securities I
96-S8, A4 6.75%, 3/25/11 ................ AAA 190 190,117
------------
TOTAL NON-AGENCY MORTGAGE-BACKED SECURITIES
(Identified cost $22,705,433) .............................. 25,074,585
------------
FOREIGN GOVERNMENT SECURITIES--7.5%
AUSTRALIA--0.1%
Commonwealth of Australia Series 705
7.50%, 7/15/05 .......................... AAA 700(g) 544,155
------------
AUSTRIA--1.1%
Republic of Austria 5.50%, 10/20/07 ....... AAA 3,000(f) 4,075,429
Republic of Austria Series 97 5.75%,
4/11/07 ................................. AAA 800(f) 1,086,524
------------
5,161,953
------------
BRAZIL--1.5%
Federative Republic of Brazil 10%, 1/16/07 B+ 2,750 3,093,750
Federative Republic of Brazil 9.25%,
10/22/10 ................................ B+ 1,000 1,080,000
Federative Republic of Brazil 8%, 4/15/14 . B+ 2,032 2,001,349
Federative Republic of Brazil 11%, 8/17/40 B+ 1,000 1,105,000
------------
7,280,099
------------
BULGARIA--0.5%
Republic of Bulgaria 144A 8.25%,
1/15/15 (d) ............................. BB+ 580 682,950
Republic of Bulgaria RegS 8.25%, 1/15/15 .. BB+ 670 788,925
Republic of Bulgaria Series IAB PDI
1.938%, 7/28/11 (e) ..................... BB+ 760 748,600
------------
2,220,475
------------
CHILE--0.4%
Republic of Chile 7.125%, 1/11/12 ......... A- 850 970,360
Republic of Chile 5.50%, 1/15/13 .......... A- 1,000 1,028,500
------------
1,998,860
------------
COLOMBIA--0.5%
Republic of Colombia 10%, 1/23/12 ......... BB 1,250 1,375,000
Republic of Colombia 11.75%, 2/25/20 ...... BB 750 907,500
------------
2,282,500
------------
COSTA RICA--0.4%
Republic of Costa Rica 144A 9.335%,
5/15/09 (d) ............................. BB 1,755 2,075,287
------------
LITHUANIA--0.2%
Republic of Lithuania 4.50%, 3/5/13 ....... BBB+ 725(f) 898,934
------------
MEXICO--0.6%
United Mexican States 5.875%, 1/15/14 ..... BBB- 1,500 1,481,250
United Mexican States 8.125%, 12/30/19 .... BBB- 1,000 1,117,500
------------
2,598,750
------------
NEW ZEALAND--0.1%
Government of New Zealand Series 205
6.50%, 2/15/05 .......................... AAA 750(h) 497,707
------------
PANAMA--0.5%
Republic of Panama 8.25%, 4/22/08 ......... BB 1,000 1,105,000
Republic of Panama 9.375%, 4/1/29 ......... BB 1,000 1,130,000
------------
2,235,000
------------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
PERU--0.2%
Republic of Peru 8.75%, 11/21/33 .......... BB- $ 750 $ 753,750
------------
PHILIPPINES--0.2%
Republic of the Philippines 8.875%, 4/15/08 BB 1,000 1,082,500
------------
RUSSIA--0.7%
Russian Federation RegS 5%, 3/31/30 (e) ... BB 3,500 3,373,125
------------
SOUTH AFRICA--0.5%
Republic of South Africa 7.375%, 4/25/12 .. BBB 1,000 1,122,500
Republic of South Africa 5.25%, 5/16/13 ... BBB 1,000(f) 1,207,745
------------
2,330,245
------------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Identified cost $32,498,091) .............................. 35,333,340
------------
FOREIGN CORPORATE BONDS--3.5%
AUSTRALIA--0.3%
St. George Bank Ltd. 144A 5.30%,
10/15/15 (d) ............................ A- 1,000 1,000,785
United Energy Distribution 144A 5.45%,
4/15/16 (d) ............................. AAA 500 511,514
------------
1,512,299
------------
BRAZIL--0.3%
Petrobras International Finance Co.
9.125%, 7/2/13 .......................... Ba (c) 500 550,000
Petrobras International Finance Co.
8.375%, 12/10/18 ........................ Ba (c) 850 877,625
------------
1,427,625
------------
CANADA--0.2%
Thomson Corp. (The) 5.25%, 8/15/13 ........ A- 1,000 1,023,972
------------
GERMANY--0.4%
Deutsche Telekom International Finance BV
8.50%, 6/15/10 .......................... BBB+ 1,500 1,813,674
------------
GREECE--0.2%
Coca-Cola HBC Finance BV 144A 5.125%,
9/17/13 (d) ............................. A 750 751,932
------------
HONG KONG--0.5%
Hutchison Whampoa International Ltd. 144A
6.25%, 1/24/14 (d) ...................... A- 2,000 2,030,764
------------
ITALY--0.2%
Telecom Italia Capital 144A 5.25%,
11/15/13 (d) ............................ BBB+ 1,000 1,001,991
------------
SOUTH KOREA--0.6%
Korea Development Bank 5.50%, 11/13/12 .... A- 2,500 2,603,640
------------
SWEDEN--0.2%
Nordea Bank Sweden AB 144A 5.25%,
11/30/12 (d) ............................ A 1,000 1,019,250
------------
UNITED KINGDOM--0.2%
HBOS plc 144A 5.375%, 11/29/49 (d)(e) ..... A 1,000 996,938
------------
UNITED STATES--0.1%
Petropower I Funding Trust 144A 7.36%,
2/15/14 (d) ............................. BBB 641 613,538
------------
VENEZUELA--0.3%
Corp Andina de Fomento CAF 5.20%,
5/21/13 ................................. A 1,500 1,492,983
------------
TOTAL FOREIGN CORPORATE BONDS
(Identified cost $15,880,769) .............................. 16,288,606
------------
See Notes to Financial Statements
170
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
SHARES VALUE
------- ------------
COMMON STOCKS--57.4%
ADVERTISING--0.6%
Harte-Hanks, Inc. ................................. 131,800 $ 2,866,650
------------
AEROSPACE & DEFENSE--1.0%
United Technologies Corp. ......................... 50,500 4,785,885
------------
AIR FREIGHT & COURIERS--1.4%
FedEx Corp. ....................................... 31,200 2,106,000
Ryder System, Inc. ................................ 133,800 4,569,270
------------
6,675,270
------------
ASSET MANAGEMENT & CUSTODY BANKS--1.3%
Franklin Resources, Inc. .......................... 82,000 4,268,920
Mellon Financial Corp. ............................ 48,900 1,570,179
------------
5,839,099
------------
CASINOS & GAMING--1.1%
Alliance Gaming Corp. (b) ......................... 35,200 867,680
Mandalay Resort Group ............................. 91,600 4,096,352
------------
4,964,032
------------
COMMUNICATIONS EQUIPMENT--2.1%
Cisco Systems, Inc. (b) ........................... 271,100 6,585,019
Emulex Corp. (b) .................................. 118,000 3,148,240
------------
9,733,259
------------
COMPUTER HARDWARE--1.1%
International Business Machines Corp. ............. 57,700 5,347,636
------------
COMPUTER STORAGE & PERIPHERALS--0.4%
EMC Corp. (b) ..................................... 158,600 2,049,112
------------
DATA PROCESSING & OUTSOURCED SERVICES--0.9%
Computer Sciences Corp. (b) ....................... 98,700 4,365,501
------------
DIVERSIFIED BANKS--4.6%
Bank of America Corp. ............................. 127,100 10,222,653
FleetBoston Financial Corp. ....................... 35,600 1,553,940
U.S. Bancorp ...................................... 99,300 2,957,154
Wells Fargo & Co. ................................. 117,000 6,890,130
------------
21,623,877
------------
DIVERSIFIED CAPITAL MARKETS--1.3%
J.P. Morgan Chase & Co. ........................... 164,400 6,038,412
------------
DIVERSIFIED CHEMICALS--0.2%
Engelhard Corp. ................................... 37,800 1,132,110
------------
DIVERSIFIED COMMERCIAL SERVICES--0.6%
ARAMARK Corp. Class B ............................. 71,400 1,957,788
Cendant Corp. (b) ................................. 46,300 1,031,101
------------
2,988,889
------------
ELECTRONIC EQUIPMENT MANUFACTURERS--2.2%
AVX Corp. ......................................... 136,500 2,268,630
Mettler-Toledo International, Inc. (b) ............ 21,200 894,852
Vishay Intertechnology, Inc. (b) .................. 135,900 3,112,110
Waters Corp. (b) .................................. 117,100 3,883,036
------------
10,158,628
------------
FOOTWEAR--0.7%
Reebok International Ltd. ......................... 76,700 3,015,844
------------
HEALTH CARE DISTRIBUTORS--1.8%
Omnicare, Inc. .................................... 144,400 5,832,316
Schein (Henry), Inc. (b) .......................... 37,500 2,534,250
------------
8,366,566
------------
HEALTH CARE EQUIPMENT--1.0%
Boston Scientific Corp. (b) ....................... 128,100 4,708,956
------------
SHARES VALUE
------- ------------
HEALTH CARE SERVICES--0.4%
Caremark Rx, Inc. (b) ............................. 75,056 $ 1,901,169
------------
HEALTH CARE SUPPLIES--1.2%
Fisher Scientific International, Inc. (b) ......... 134,000 5,543,580
------------
HOUSEHOLD PRODUCTS--1.6%
Dial Corp. (The) .................................. 123,200 3,507,504
Procter & Gamble Co. (The) ........................ 40,900 4,085,092
------------
7,592,596
------------
HOUSEWARES & SPECIALTIES--0.6%
Fortune Brands, Inc. .............................. 37,600 2,688,024
------------
INDUSTRIAL CONGLOMERATES--2.0%
General Electric Co. .............................. 304,500 9,433,410
------------
INDUSTRIAL MACHINERY--0.4%
Pall Corp. ........................................ 70,500 1,891,515
------------
INTEGRATED OIL & GAS--1.3%
Exxon Mobil Corp. ................................. 150,600 6,174,600
------------
INTEGRATED TELECOMMUNICATION SERVICES--1.1%
SBC Communications, Inc. .......................... 92,000 2,398,440
Verizon Communications, Inc. ...................... 78,600 2,757,288
------------
5,155,728
------------
INVESTMENT BANKING & BROKERAGE--3.0%
E*TRADE Financial Corp. (b) ....................... 200,800 2,540,120
Merrill Lynch & Co., Inc. ......................... 60,800 3,565,920
Morgan Stanley .................................... 133,100 7,702,497
------------
13,808,537
------------
LEISURE PRODUCTS--0.7%
Marvel Enterprises, Inc. (b) ...................... 112,300 3,269,053
------------
LIFE & HEALTH INSURANCE--0.8%
MetLife, Inc. ..................................... 112,800 3,797,976
------------
METAL & GLASS CONTAINERS--0.6%
Ball Corp. ........................................ 48,800 2,907,016
------------
MOVIES & ENTERTAINMENT--1.5%
Time Warner, Inc. (b) ............................. 262,100 4,715,179
Viacom, Inc. Class B .............................. 52,400 2,325,512
------------
7,040,691
------------
MULTI-LINE INSURANCE--1.0%
American International Group, Inc. ................ 73,100 4,845,068
------------
OIL & GAS DRILLING--0.5%
Patterson-UTI Energy, Inc. (b) .................... 48,000 1,580,160
Transocean, Inc. (b) .............................. 24,300 583,443
------------
2,163,603
------------
OIL & GAS EQUIPMENT & SERVICES--1.1%
Baker Hughes, Inc. ................................ 33,900 1,090,224
BJ Services Co. (b) ............................... 38,000 1,364,200
Schlumberger Ltd. ................................. 44,900 2,456,928
------------
4,911,352
------------
OIL & GAS EXPLORATION & PRODUCTION--1.0%
Anadarko Petroleum Corp. .......................... 87,900 4,483,779
------------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.1%
Citigroup, Inc. ................................... 199,400 9,678,876
------------
PACKAGED FOODS & MEATS--1.1%
Dean Foods Co. (b) ................................ 73,400 2,412,658
Kellogg Co. ....................................... 74,900 2,852,192
------------
5,264,850
------------
See Notes to Financial Statements
171
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
SHARES VALUE
------- ------------
PHARMACEUTICALS--3.9%
Bristol-Myers Squibb Co. .......................... 208,200 $ 5,954,520
Johnson & Johnson ................................. 83,700 4,323,942
Pfizer, Inc. ...................................... 225,200 7,956,316
------------
18,234,778
------------
PUBLISHING & PRINTING--1.7%
Belo Corp. Class A ................................ 78,100 2,213,354
Knight-Ridder, Inc. ............................... 37,200 2,878,164
Tribune Co. ....................................... 56,200 2,899,920
------------
7,991,438
------------
SEMICONDUCTOR EQUIPMENT--1.0%
Applied Materials, Inc. (b) ....................... 144,100 3,235,045
Teradyne, Inc. (b) ................................ 50,100 1,275,045
------------
4,510,090
------------
SEMICONDUCTORS--0.9%
Intel Corp. ....................................... 136,200 4,385,640
------------
SOFT DRINKS--1.1%
PepsiCo, Inc. ..................................... 114,200 5,324,004
------------
SPECIALIZED FINANCE--0.9%
CIT Group, Inc. ................................... 116,400 4,184,580
------------
SYSTEMS SOFTWARE--3.0%
Microsoft Corp. ................................... 355,700 9,795,978
Oracle Corp. (b) .................................. 335,900 4,433,880
------------
14,229,858
------------
TECHNOLOGY DISTRIBUTORS--0.3%
Avnet, Inc. (b) ................................... 73,100 1,583,346
------------
TRUCKING--0.3%
Swift Transportation Co., Inc. (b) ................ 69,100 1,452,482
------------
TOTAL COMMON STOCKS
(Identified cost $212,651,247) .............................. 269,107,365
------------
FOREIGN COMMON STOCKS--1.5%
PHARMACEUTICALS--0.8%
Teva Pharmaceutical Industries Ltd. ADR (Israel) .. 64,900 3,680,479
------------
PROPERTY & CASUALTY INSURANCE--0.7%
ACE Ltd. (Bermuda) ................................ 82,200 3,404,724
------------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $6,636,093) ................................ 7,085,203
------------
EXCHANGE TRADED FUNDS--1.1%
SPDR Trust Series I ............................... 45,300 5,040,984
------------
TOTAL EXCHANGE TRADED FUNDS
(Identified cost $5,949,232) ................................ 5,040,984
------------
TOTAL LONG TERM INVESTMENTS--98.0%
(Identified cost $393,299,565) .............................. 459,350,836
------------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000) VALUE
----------- ------ ------------
SHORT-TERM OBLIGATIONS--1.6%
FEDERAL AGENCY SECURITIES--1.5%
FHLB Discount Note 0.75%, 1/7/04 .................. $4,605 $ 4,604,424
FHLMC Discount Note 1.01%, 1/15/04 ................ 2,500 2,499,018
------------
7,103,442
------------
COMMERCIAL PAPER--0.1%
CIT Group Holdings, Inc. 1.103%, 1/9/04 ... A-1 500 499,885
------------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $7,603,320) ................................ 7,603,327
------------
TOTAL INVESTMENTS--99.6%
(Identified cost $400,902,885) .............................. 466,954,163(a)
Other assets and liabilities, net--0.4% ..................... 1,675,466
------------
NET ASSETS--100.0% ............................................ $468,629,629
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $71,913,548 and gross
depreciation of $6,187,008 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$401,227,623.
(b) Non-income producing.
(c) As rated by Moody's or Fitch.
(d) 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 December 31,
2003, these securities amounted to a value of $21,843,621 or 4.7% of net
assets.
(e) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(f) Par value represents Euro.
(g) Par value represents Australian Dollar.
(h) Par value represents New Zealand Dollar.
(i) Illiquid. At December 31, 2003, this security amounted to a value of
$2,166,004 or 0.5% of net assets. For acquisition information, see Notes to
Financial Statements.
See Notes to Financial Statements
172
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $400,902,885) ................................................... $466,954,163
Cash ............................................................................................................ 3,854
Receivables
Interest and dividends ........................................................................................ 2,490,648
Fund shares sold .............................................................................................. 232,897
Prepaid expenses ................................................................................................ 6,844
------------
Total assets ................................................................................................ 469,688,406
------------
LIABILITIES
Payables
Fund shares repurchased ....................................................................................... 684,319
Investment advisory fee ....................................................................................... 225,929
Administration fee ............................................................................................ 30,145
Financial agent fee ........................................................................................... 26,787
Trustees' fee ................................................................................................. 2,360
Accrued expenses ................................................................................................ 89,237
------------
Total liabilities ........................................................................................... 1,058,777
------------
NET ASSETS ...................................................................................................... $468,629,629
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $421,226,008
Undistributed net investment income ........................................................................... 477,557
Accumulated net realized loss ................................................................................. (19,135,386)
Net unrealized appreciation ................................................................................... 66,061,450
------------
NET ASSETS ...................................................................................................... $468,629,629
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 33,573,598
============
Net asset value and offering price per share .................................................................... $13.96
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Interest ...................................................................................................... $10,614,060
Dividends ..................................................................................................... 4,042,562
Foreign taxes withheld ........................................................................................ (1,918)
-----------
Total investment income ..................................................................................... 14,654,704
-----------
EXPENSES
Investment advisory fee ....................................................................................... 2,563,135
Financial agent fee ........................................................................................... 315,996
Administration fee ............................................................................................ 341,325
Custodian ..................................................................................................... 69,531
Printing ...................................................................................................... 39,960
Professional .................................................................................................. 30,896
Trustees ...................................................................................................... 5,932
Miscellaneous ................................................................................................. 36,144
-----------
Total expenses .............................................................................................. 3,402,919
Custodian fees paid indirectly .............................................................................. (1,909)
-----------
Net expenses ................................................................................................ 3,401,010
-----------
NET INVESTMENT INCOME ........................................................................................... 11,253,694
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 12,022,067
Net realized loss on foreign currency transactions ............................................................ (28,792)
Net change in unrealized appreciation (depreciation) on investments ........................................... 57,223,283
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 10,172
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 69,226,730
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $80,480,424
===========
See Notes to Financial Statements
173
PHOENIX-OAKHURST STRATEGIC ALLOCATION SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ -------------
FROM OPERATIONS
Net investment income (loss) ............................................................. $ 11,253,694 $ 12,468,362
Net realized gain (loss) ................................................................. 11,993,275 (18,705,563)
Net change in unrealized appreciation (depreciation) ..................................... 57,233,455 (58,573,674)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONs .............................. 80,480,424 (64,810,875)
------------ -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .................................................................... (11,693,204) (12,665,168)
------------ -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ................................ (11,693,204) (12,665,168)
------------ -------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (3,077,121 and 3,667,976 shares, respectively) ............. 39,228,747 46,665,392
Net asset value of shares issued in conjunction with Plan of Reorganization
(0 and 17,438,879 shares, respectively) (See Note 11) ............................... -- 236,890,944
Net asset value of shares issued from reinvestment of distributions
(911,069 and 1,024,148 shares, respectively) ........................................... 11,693,204 12,665,168
Cost of shares repurchased (7,558,773 and 11,922,692 shares, respectively) ............... (95,096,144) (149,545,694)
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ................................ (44,174,193) 146,675,810
------------ -------------
NET INCREASE (DECREASE) IN NET ASSETS .................................................... 24,613,027 69,199,767
NET ASSETS
Beginning of period ...................................................................... 444,016,602 374,816,835
------------ -------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $477,557 AND $873,669,
RESPECTIVELY) .......................................................................... $468,629,629 $ 444,016,602
============ =============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2003 2002 2001(3) 2000 1999
------ ------ ------- ------ ------
Net asset value, beginning of period ................................ $11.95 $13.92 $14.25 $16.18 $15.65
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ...................................... 0.33 0.35 0.36(1) 0.44 0.36
Net realized and unrealized gain (loss) ........................... 2.02 (1.96) (0.11) (0.33) 1.36
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ................................ 2.35 (1.61) 0.25 0.11 1.72
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income .............................. (0.34) (0.36) (0.35) (0.43) (0.36)
Distributions from net realized gains ............................. -- -- (0.23) (1.61) (0.83)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............................................. (0.34) (0.36) (0.58) (2.04) (1.19)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ........................................... 2.01 (1.97) (0.33) (1.93) 0.53
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................................... $13.96 $11.95 $13.92 $14.25 $16.18
====== ====== ====== ====== ======
Total return ........................................................ 19.87% (11.58)% 1.87% 0.58% 11.26%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ............................... $468,630 $444,017 $374,817 $414,013 $476,709
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses ................................................ 0.77%(2) 0.70%(2) 0.71%(2) 0.70% 0.70%
Net investment income ............................................. 2.54% 2.73% 2.56% 2.65% 2.21%
Portfolio turnover .................................................. 87% 78% 44% 60% 65%
<FN>
(1) Computed using average shares outstanding.
(2) 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) As required, effective January 1, 2001, the Fund adopted the provisions of AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on debt securities and including paydown gains and losses in interest income. The
effect of this change for the year ended December 31, 2001 to decrease the ratio of net investment income to average net
assets from 2.60% to 2.56%. There was no effect to net investment income per share and net realized and unrealized gain (loss)
per share. Per share ratios and supplemental data for prior periods have not been restated to reflect this change.
</FN>
See Notes to Financial Statements
174
PHOENIX-OAKHURST VALUE EQUITY SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is long-term capital appreciation with
current income as a secondary consideration.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 23.87%. For
the same period, the Russell 1000(R) Value Index 1 returned 30.03% and the S&P
500(R) Index 2 returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: For the 12 months ended December 31, 2003, the stock market made a strong
rally after three years of losses. Large-cap value stocks represented by the
Russell 1000(R) Value Index had a total return of 30.03%. The year 2003 started
with significant weakness in the market, extending past losses. However,
attractive valuation finally propelled investors to put their excess cash to
work. For the past nine months, the stock market has been on a sustained rally
driven by encouraging economic data ranging from high productivity gains, strong
manufacturing recovery and increasing consumer confidence.
During time of economic recovery, stock markets are often led by cyclical
issues that benefit from stronger business activities. This past twelve months
was no exception. Technology, basic materials and industrials sectors were the
best performers. Smaller market-cap companies also outperformed large-cap ones.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: The series rose significantly in 2003 along with the market. The management
team had placed a significant emphasis on technology stocks, which led the stock
market rally in 2003. However, the series under-performed its benchmark, Russell
1000(R) Value Index, due to poor stock picking and a bet on healthcare stocks
which did not keep up with the market. Series holdings such as HCA, Sony Corp
and Unumprovident all did poorly in 2003.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: After the strong rally of 2003, the current level of stock price supports
significant earnings growth for 2004. We believe that high expectation will
largely be met and possibly be exceeded. Furthermore, we believe the current
equity market valuation is reasonable in a low inflation and low interest
environment. Our base scenario assumes that 2004 will likely bring us a single
digit return consistent with historical averages. This assumes double digit
profit growth and small multiple contraction for the stock markets. However,
given a strong economy and continued gains in productivity, earnings may
surprise on the upside. Recent comments from officials of Federal Reserve Board
suggest they see little inflationary pressure and hence are likely to keep rates
low for a considerable period of time. Under that scenario, stock may return
significantly higher than historical averages. On the other hand, current
expectations for profit growth are very high. If companies fail to deliver to
that expectation, stocks would likely see downward pressure.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 1000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
175
PHOENIX-OAKHURST VALUE EQUITY SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
3/2/98 TO
1 YEAR 5 YEARS 12/31/03
- --------------------------------------------------------------------------------
Value Equity Series 23.87% 5.45% 6.50%
- --------------------------------------------------------------------------------
Russell 1000(R) Value Index 1 30.03% 3.56% 4.69%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 2.52%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Value Equity Series Russell 1000(R) Value Index 1 S&P 500(R) Index 2
3/2/98 $10,000 $10,000 $10,000
12/31/98 $11,079 $10,965 $11,895
12/31/99 $13,775 $11,771 $14,409
12/29/00 $18,205 $12,597 $13,086
12/31/01 $14,935 $11,893 $11,532
12/31/02 $11,660 $10,047 $8,983
12/31/03 $14,443 $13,064 $11,562
1 The Russell 1000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
176
PHOENIX-OAKHURST VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------- -----------
COMMON STOCKS--94.0%
ADVERTISING--0.9%
Harte-Hanks, Inc. .................................. 37,900 $ 824,325
-----------
AEROSPACE & DEFENSE--3.0%
United Defense Industries, Inc. (b) ................ 42,400 1,351,712
United Technologies Corp. .......................... 15,100 1,431,027
-----------
2,782,739
-----------
AIR FREIGHT & COURIERS--2.2%
FedEx Corp. ........................................ 9,100 614,250
Ryder System, Inc. ................................. 40,900 1,396,735
-----------
2,010,985
-----------
ASSET MANAGEMENT & CUSTODY BANKS--2.8%
Franklin Resources, Inc. ........................... 35,800 1,863,748
Mellon Financial Corp. ............................. 22,700 728,897
-----------
2,592,645
-----------
CASINOS & GAMING--3.1%
Alliance Gaming Corp. (b) .......................... 68,200 1,681,130
Mandalay Resort Group .............................. 25,800 1,153,776
-----------
2,834,906
-----------
COMMUNICATIONS EQUIPMENT--1.6%
Cisco Systems, Inc. (b) ............................ 24,200 587,818
Emulex Corp. (b) ................................... 34,800 928,464
-----------
1,516,282
-----------
COMPUTER HARDWARE--0.5%
Dell, Inc. (b) ..................................... 12,900 438,084
-----------
COMPUTER STORAGE & PERIPHERALS--0.4%
EMC Corp. (b) ...................................... 27,300 352,716
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--1.0%
Toro Co. (The) ..................................... 19,500 904,800
-----------
DATA PROCESSING & OUTSOURCED SERVICES--1.5%
Computer Sciences Corp. (b) ........................ 31,500 1,393,245
-----------
DEPARTMENT STORES--2.4%
Neiman Marcus Group, Inc. (The) Class A (b) ........ 41,200 2,211,204
-----------
DIVERSIFIED BANKS--10.4%
Bank of America Corp. .............................. 42,400 3,410,232
Bank One Corp. ..................................... 30,400 1,385,936
FleetBoston Financial Corp. ........................ 16,600 724,590
U.S. Bancorp ....................................... 39,400 1,173,332
Wells Fargo & Co. .................................. 49,800 2,932,722
-----------
9,626,812
-----------
DIVERSIFIED CAPITAL MARKETS--2.4%
J.P. Morgan Chase & Co. ............................ 60,600 2,225,838
-----------
DIVERSIFIED COMMERCIAL SERVICES--1.5%
ARAMARK Corp. Class B .............................. 39,400 1,080,348
Cendant Corp. (b) .................................. 14,800 329,596
-----------
1,409,944
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--3.9%
AVX Corp. .......................................... 51,300 852,606
Mettler-Toledo International, Inc. (b) ............. 6,800 287,028
Vishay Intertechnology, Inc. (b) ................... 42,400 970,960
Waters Corp. (b) ................................... 45,500 1,508,780
-----------
3,619,374
-----------
SHARES VALUE
------- -----------
FOOTWEAR--1.6%
Reebok International Ltd. .......................... 37,900 $ 1,490,228
-----------
HEALTH CARE DISTRIBUTORS--2.7%
Omnicare, Inc. ..................................... 40,900 1,651,951
Schein (Henry), Inc. (b) ........................... 12,100 817,718
-----------
2,469,669
-----------
HEALTH CARE EQUIPMENT--1.1%
Boston Scientific Corp. (b) ........................ 28,000 1,029,280
-----------
HEALTH CARE SUPPLIES--1.9%
Fisher Scientific International, Inc. (b) .......... 42,900 1,774,773
-----------
HOUSEHOLD PRODUCTS--3.3%
Dial Corp. (The) ................................... 48,500 1,380,795
Procter & Gamble Co. (The) ......................... 16,600 1,658,008
-----------
3,038,803
-----------
HOUSEWARES & SPECIALTIES--1.2%
Fortune Brands, Inc. ............................... 15,100 1,079,499
-----------
INDUSTRIAL CONGLOMERATES--0.5%
General Electric Co. ............................... 13,600 421,328
-----------
INDUSTRIAL GASES--0.3%
Airgas, Inc. ....................................... 14,700 315,756
-----------
INDUSTRIAL MACHINERY--1.6%
Pall Corp. ......................................... 54,600 1,464,918
-----------
INTEGRATED OIL & GAS--4.3%
ChevronTexaco Corp. ................................ 9,100 786,149
Exxon Mobil Corp. .................................. 78,800 3,230,800
-----------
4,016,949
-----------
INTEGRATED TELECOMMUNICATION SERVICES--2.7%
SBC Communications, Inc. ........................... 39,400 1,027,158
Verizon Communications, Inc. ....................... 40,900 1,434,772
-----------
2,461,930
-----------
INTERNET RETAIL--0.4%
Provide Commerce, Inc. (b) ......................... 27,500 417,175
-----------
INVESTMENT BANKING & BROKERAGE--6.1%
E*TRADE Financial Corp. (b) ........................ 64,100 810,865
Goldman Sachs Group, Inc. (The) .................... 7,500 740,475
Merrill Lynch & Co., Inc. .......................... 39,100 2,293,215
Morgan Stanley ..................................... 30,800 1,782,396
-----------
5,626,951
-----------
LEISURE PRODUCTS--1.2%
Marvel Enterprises, Inc. (b) ....................... 39,400 1,146,934
-----------
LIFE & HEALTH INSURANCE--2.3%
MetLife, Inc. ...................................... 34,800 1,171,716
Prudential Financial, Inc. ......................... 22,700 948,179
-----------
2,119,895
-----------
METAL & GLASS CONTAINERS--1.6%
Ball Corp. ......................................... 24,200 1,441,594
-----------
MOVIES & ENTERTAINMENT--1.5%
Time Warner, Inc. (b) .............................. 78,800 1,417,612
-----------
MULTI-LINE INSURANCE--0.7%
American International Group, Inc. ................. 10,500 695,940
-----------
OIL & GAS DRILLING--0.5%
Patterson-UTI Energy, Inc. (b) ..................... 15,100 497,092
-----------
See Notes to Financial Statements
177
PHOENIX-OAKHURST VALUE EQUITY SERIES
SHARES VALUE
------- -----------
OIL & GAS EQUIPMENT & SERVICES--1.5%
Baker Hughes, Inc. ................................. 10,500 $ 337,680
BJ Services Co. (b) ................................ 12,100 434,390
Schlumberger Ltd. .................................. 12,100 662,112
-----------
1,434,182
-----------
OIL & GAS EXPLORATION & PRODUCTION--1.3%
Anadarko Petroleum Corp. ........................... 24,200 1,234,442
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--4.1%
Citigroup, Inc. .................................... 78,800 3,824,952
-----------
PACKAGED FOODS & MEATS--0.9%
Kellogg Co. ........................................ 21,200 807,296
-----------
PHARMACEUTICALS--1.4%
Bristol-Myers Squibb Co. ........................... 45,500 1,301,300
-----------
PROPERTY & CASUALTY INSURANCE--0.8%
Travelers Property Casualty Corp. Class A (b) ...... 47,100 790,338
-----------
PUBLISHING & PRINTING--3.9%
Belo Corp. Class A ................................. 31,200 884,208
Knight-Ridder, Inc. ................................ 11,900 920,703
McClatchy Co. (The) ................................ 13,200 908,160
Tribune Co. ........................................ 18,000 928,800
-----------
3,641,871
-----------
SEMICONDUCTOR EQUIPMENT--0.5%
Applied Materials, Inc. (b) ........................ 21,200 475,940
-----------
SEMICONDUCTORS--0.4%
Agere Systems, Inc. Class A (b) .................... 128,800 392,840
-----------
SOFT DRINKS--1.7%
PepsiCo, Inc. ...................................... 33,400 1,557,108
-----------
SPECIALIZED FINANCE--2.1%
CIT Group, Inc. .................................... 53,000 1,905,350
-----------
SYSTEMS SOFTWARE--1.0%
Oracle Corp. (b) ................................... 69,100 912,120
-----------
TRUCKING--1.3%
Swift Transportation Co., Inc. (b) ................. 59,100 1,242,282
-----------
TOTAL COMMON STOCKS
(Identified cost $80,828,477) ............................... 87,190,246
-----------
FOREIGN COMMON STOCKS--3.0%
LIFE & HEALTH INSURANCE--0.4%
China Life Insurance Co. Ltd. ADR (China) (b) ...... 11,200 369,264
-----------
PHARMACEUTICALS--1.0%
Teva Pharmaceutical Industries Ltd. ADR (Israel) ... 15,300 867,663
-----------
PROPERTY & CASUALTY INSURANCE--1.6%
ACE Ltd. (Bermuda) ................................. 36,300 1,503,546
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,328,406) ................................ 2,740,473
-----------
EXCHANGE TRADED FUNDS--1.0%
iShares Russell 1000 Value Index Fund .............. 16,500 963,105
-----------
TOTAL EXCHANGE TRADED FUNDS
(Identified cost $901,791) .................................. 963,105
-----------
TOTAL LONG TERM INVESTMENTS--98.0%
(Identified cost $84,058,674) ............................... 90,893,824
-----------
PAR
VALUE
(000) VALUE
------ -----------
SHORT-TERM OBLIGATIONS--2.1%
FEDERAL AGENCY SECURITIES--2.1%
FHLB Discount Note 0.75%, 1/2/04 ................... $1,975 $ 1,974,959
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $1,974,959) ................................ 1,974,959
-----------
TOTAL INVESTMENTS--100.1%
(Identified cost $86,033,633) ............................... 92,868,783(a)
Other assets and liabilities, net--(0.1)% ................... (63,529)
-----------
NET ASSETS--100.0% ............................................ $92,805,254
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $7,288,466 and gross
depreciation of $616,520 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$86,196,837.
(b) Non-income producing.
See Notes to Financial Statements
178
PHOENIX-OAKHURST VALUE EQUITY SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $86,033,633) .................................................... $ 92,868,783
Cash ............................................................................................................ 47
Receivables
Fund shares sold .............................................................................................. 86,024
Dividends and interest ........................................................................................ 62,442
Prepaid expenses ................................................................................................ 1,199
------------
Total assets ................................................................................................ 93,018,495
------------
LIABILITIES
Payables
Fund shares repurchased ....................................................................................... 79,572
Investment advisory fee ....................................................................................... 59,739
Professional fee .............................................................................................. 28,283
Printing fee .................................................................................................. 22,567
Financial agent fee ........................................................................................... 7,675
Administration fee ............................................................................................ 5,875
Trustees' fee ................................................................................................. 2,360
Accrued expenses ................................................................................................ 7,170
------------
Total liabilities ........................................................................................... 213,241
------------
NET ASSETS ...................................................................................................... $ 92,805,254
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $103,108,117
Undistributed net investment income ........................................................................... 82,341
Accumulated net realized loss ................................................................................. (17,220,354)
Net unrealized appreciation ................................................................................... 6,835,150
------------
NET ASSETS ...................................................................................................... $ 92,805,254
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 7,882,010
============
Net asset value and offering price per share .................................................................... $11.77
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 1,394,962
Interest ...................................................................................................... 22,260
Foreign taxes withheld ........................................................................................ (6,299)
-----------
Total investment income ..................................................................................... 1,410,923
-----------
EXPENSES
Investment advisory fee ....................................................................................... 539,766
Financial agent fee ........................................................................................... 85,127
Administration fee ............................................................................................ 59,374
Printing ...................................................................................................... 35,784
Custodian ..................................................................................................... 31,541
Professional .................................................................................................. 17,920
Trustees ...................................................................................................... 5,479
Miscellaneous ................................................................................................. 11,593
-----------
Total expenses .............................................................................................. 786,584
Less expense borne by investment adviser .................................................................... (54,028)
Custodian fees paid indirectly .............................................................................. (16)
-----------
Net expenses ................................................................................................ 732,540
-----------
NET INVESTMENT INCOME ........................................................................................... 678,383
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 9,178,276
Net change in unrealized appreciation (depreciation) on investments ........................................... 7,192,582
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 16,370,858
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $17,049,241
===========
See Notes to Financial Statements
179
PHOENIX-OAKHURST VALUE EQUITY SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) .................................................................... $ 678,383 $ 775,323
Net realized gain (loss) ........................................................................ 9,178,276 (20,068,721)
Net change in unrealized appreciation (depreciation) ............................................ 7,192,582 (1,155,654)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..................................... 17,049,241 (20,449,052)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................... (723,391) (743,518)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ....................................... (723,391) (743,518)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,256,146 and 3,089,891 shares, respectively) .................... 23,492,387 35,035,084
Net asset value of shares issued from reinvestment of distributions (70,034 and 72,891 shares,
respectively) ................................................................................. 723,391 743,518
Cost of shares repurchased (1,915,343 and 2,472,636 shares, respectively) ....................... (19,420,315) (27,061,219)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ....................................... 4,795,463 8,717,383
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................... 21,121,313 (12,475,187)
NET ASSETS
Beginning of period ............................................................................. 71,683,941 84,159,128
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $82,341 AND $160,575,
RESPECTIVELY) ................................................................................. $ 92,805,254 $ 71,683,941
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
----------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ....................................... $ 9.59 $12.41 $15.34 $12.91 $11.03
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................................. 0.09 0.10 0.11 0.07 0.04
Net realized and unrealized gain (loss) .................................. 2.19 (2.82) (2.86) 3.98 2.63
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ....................................... 2.28 (2.72) (2.75) 4.05 2.67
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ..................................... (0.10) (0.10) (0.09) (0.08) (0.04)
Distributions from net realized gains .................................... -- -- (0.09) (1.54) (0.75)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .................................................... (0.10) (0.10) (0.18) (1.62) (0.79)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE .................................................. 2.18 (2.82) (2.93) 2.43 1.88
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................. $11.77 $ 9.59 $12.41 $15.34 $12.91
====== ====== ====== ====== ======
Total return ............................................................... 23.87% (21.93)% (17.96)% 32.16% 24.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ...................................... $92,805 $71,684 $84,159 $45,461 $17,470
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses (1) ................................................... 0.95%(2) 0.93%(2) 0.85%(2) 0.85% 0.85%
Net investment income .................................................... 0.88% 0.96% 1.11% 0.79% 0.41%
Portfolio turnover ......................................................... 393% 210% 245% 166% 168%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.02%, 1.01%, 1.00%, 1.33% and 2.03% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(2) 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.
</FN>
See Notes to Financial Statements
180
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital growth through investment in equity
securities of foreign and U.S. companies. Investing internationally involves
risks not associated with investing solely in the U.S., such as currency
fluctuation, political risk, differences in accounting and the limited
availability of information.
Q: HOW DID THE SERIES PERFORM OVER THE YEAR OF 2003?
A: For the 12-month period ended December 31, 2003, the portfolio returned
32.79%, while its benchmark the Morgan Stanley Capital International (MSCI)
World Index 1 returned 33.76%. The S&P 500(R) index 2 returned 28.71% for the
year. All performance figures assume reinvestment of distributions. Past
performance is not indicative of future results and current performance may be
higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST YEAR?
A: The year began badly with investors concerned about deflation, poor corporate
earnings prospects, geopolitical risk and corporate governance and accounting
problems. During the period from January 1 to March 12, 2003--the day the index
market reached its low point this year--the MSCI World Index lost -10.0% of its
value. Losses in the industrial commodities, telecommunication and finance
sectors led the market down. Since then, geopolitical risk factors have receded
as the conflict in Iraq unfolded without extreme military or oil price outcomes.
Investors have begun to realize that the interest rate cuts that began in 2002,
combined with massive fiscal stimulus in the U.S. and a recovery of domestic
demand growth in Asia, are fueling a broad-based economic recovery and a sharp
earnings rebound. Markets have rallied, and since its bottom in mid-March, the
MSCI World Index has gained 47.9% to December 31, 2003. The markets have been
led up by cyclically oriented sectors: technology, industrial commodities and
capital equipment.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Security and sector selection were both mild negatives for the series'
premium, while currency was a positive.
The year's single biggest detractor was the series' holding in Parmalat.
This Italian-based dairy company stunned the market in December when it ran into
cash flow problems and subsequently declared itself bankrupt, even though its
audited financial statements had indicated that it had several billion euros in
liquid assets. Parmalat seemingly went to great pains to conceal what now quite
obviously appears to be a precarious financial position, not only in its
financial statements, but also in direct research meetings that we--and other
investors--held with management. Parmalat obscured the facts through all
investment inquiries, including our own intensive research.
While any loss is serious, Parmalat represented a relatively small holding,
even before the controversy broke. Once the story began to surface, we moved to
reduce the series' holdings. Even so, we did not escape the abrupt decline in
the value of Parmalat's shares. However, this position, because of its small
size, only had a limited impact on relative return for the fourth quarter, and
the series still outperformed its benchmark for the year.
Many of the portfolio's other stock holdings contributed significantly to
our premium. For example, Pulte, the U.S. home-builder, benefited from the
torrid rate of construction as Americans took advantage of low interest rates to
buy houses. Avaya, the telecom equipment manufacturer, rose with the rest of the
industry as signs emerged that the capital spending slump in telecom might be
ending. And the Japanese banks, UFJ Holdings and Sumitomo Mitsui Financial, both
rose because of stronger-than-expected economic growth in Japan and continued
progress in dealing with non-performing loans.
The series was also helped by the continued fall of the U.S. dollar. All
else being equal, a falling dollar (i.e., rising foreign currencies) increases
returns from investing internationally. The dollar fell to record lows versus
the euro in the fourth quarter and to multi-year lows against other major
currencies.
181
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We believe we are in the midst of a vigorous global economic recovery.
Operating profits are strong in the U.S.--we believe they are poised to exceed
even the record levels of 2000--and there are significant signs of economic
growth in Japan and Europe as well. Moreover, after years of conservative
spending and of cutting costs, companies now enjoy a high degree of operating
leverage so that even a modest increase in revenues could translate into a much
larger increase in profitability. We believe higher profits, especially strong
cash flow, may likely lead to an increase in capital spending and further profit
growth in the future.
We believe the dollar will keep falling: the U.S. current account deficit
remains at about 5% of gross domestic product (GDP), and because of low interest
rates in the U.S., financial assets are less attractive enough to foreigners.
This will continue to put great downward pressure on the dollar's value.
The value opportunity, as we measure it, is lower now than it was a few
years ago, and, consequently, many of our most provocative sector bets have been
reduced. We think the key to outperformance will be to uncover opportunities on
a stock-by-stock basis through strong, fundamental research, something we
believe is our strength. The portfolio is made up of a diversified set of strong
companies at compelling valuations, we believe this will leave us in a good
position to deliver our normal premium over the coming months.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
11/20/00 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Global Value Series 32.79% 3.23%
- --------------------------------------------------------------------------------
MSCI World Index 1 33.76% (2.90)%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (4.38)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 11/20/00 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Global Value Series MSCI World Index 1 S&P 500(R) Index 2
11/20/00 $10,000 $10,000 $10,000
12/29/00 $10,435 $10,163 $9,844
12/31/01 $9,721 $8,484 $8,675
12/31/02 $8,315 $6,826 $6,758
12/31/03 $11,041 $9,131 $8,699
1 The MSCI (Morgan Stanley Capital International) World Index is a commonly used
measure of global value oriented stock total return performance.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
182
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--51.1%
UNITED STATES--51.1%
Abbott Laboratories (Pharmaceuticals) .............. 900 $ 41,940
Alcoa, Inc. (Aluminum) ............................. 2,000 76,000
Allied Waste Industries, Inc. (Environmental
Services) ........................................ 4,500 62,460
Altria Group, Inc. (Tobacco) ....................... 4,225 229,924
Amerada Hess Corp. (Integrated Oil & Gas) .......... 300 15,951
American Electric Power Co., Inc. (Electric
Utilities) ....................................... 3,400 103,734
Archer Daniels Midland Co. (Agricultural Products) . 1,785 27,168
Ashland, Inc. (Oil & Gas Refining, Marketing &
Transportation) .................................. 550 24,233
AT&T Corp. (Integrated Telecommunication Services) . 380 7,714
Avnet, Inc. (Technology Distributors) (b) .......... 2,000 43,320
Bank of America Corp. (Diversified Banks) .......... 3,200 257,376
BellSouth Corp. (Integrated Telecommunication
Services) ........................................ 1,375 38,912
Bristol-Myers Squibb Co. (Pharmaceuticals) ......... 2,480 70,928
Cabot Corp. (Diversified Chemicals) ................ 650 20,696
Cendant Corp. (Diversified Commercial Services) (b) 2,800 62,356
ChevronTexaco Corp. (Integrated Oil & Gas) ......... 640 55,290
Chubb Corp. (The) (Property & Casualty Insurance) .. 2,400 163,440
Cisco Systems, Inc. (Communications Equipment) (b) . 8,100 196,749
Citigroup, Inc. (Other Diversified Financial
Services) ........................................ 6,330 307,258
Coca-Cola Co. (The) (Soft Drinks) .................. 1,300 65,975
Comcast Corp. Class A (Broadcasting & Cable TV) (b) 2,714 89,209
Comcast Corp. Special Class A (Broadcasting &
Cable TV) (b) .................................... 5,300 165,784
ConocoPhillips (Integrated Oil & Gas) .............. 3,700 242,609
Cooper Industries Ltd. Class A (Electrical
Components & Equipment) .......................... 700 40,551
Dell, Inc. (Computer Hardware) (b) ................. 1,400 47,544
Delphi Corp. (Auto Parts & Equipment) .............. 1,400 14,294
Deluxe Corp. (Diversified Commercial Services) ..... 1,100 45,463
Donnelley (R.R.) & Sons Co. (Commercial Printing) .. 2,600 78,390
Dow Chemical Co. (The) (Diversified Chemicals) ..... 1,744 72,498
Du Pont (E.I.) de Nemours & Co. (Diversified
Chemicals) ....................................... 1,500 68,835
Eastman Chemical Co. (Diversified Chemicals) ....... 300 11,859
Eaton Corp. (Industrial Machinery) ................. 500 53,990
Electronic Data Systems Corp. (Data Processing &
Outsourced Services) ............................. 600 14,724
Energizer Holdings, Inc. (Household Products) (b) .. 1,000 37,560
Entergy Corp. (Electric Utilities) ................. 2,700 154,251
Exxon Mobil Corp. (Integrated Oil & Gas) ........... 2,500 102,500
Fannie Mae (Thrifts & Mortgage Finance) ............ 2,275 170,761
Federated Department Stores, Inc. (Department
Stores) .......................................... 500 23,565
FleetBoston Financial Corp. (Diversified Banks) .... 2,081 90,836
Freddie Mac (Thrifts & Mortgage Finance) ........... 1,900 110,808
General Electric Co. (Industrial Conglomerates) .... 8,600 266,428
Georgia-Pacific Corp. (Paper Products) ............. 2,850 87,409
Goodrich Corp. (Aerospace & Defense) ............... 825 24,494
Guidant Corp. (Health Care Equipment) .............. 900 54,180
Hewlett-Packard Co. (Computer Hardware) ............ 11,750 269,897
Home Depot, Inc. (The) (Home Improvement Retail) ... 1,700 60,333
IMS Health, Inc. (Health Care Services) ............ 3,500 87,010
Intel Corp. (Semiconductors) ....................... 4,600 148,120
International Business Machines Corp. (Computer
Hardware) ........................................ 1,400 129,752
International Paper Co. (Paper Products) ........... 300 12,933
Johnson & Johnson (Pharmaceuticals) ............... 2,350 121,401
Jones Apparel Group, Inc. (Apparel, Accessories &
Luxury Goods) .................................... 700 24,661
KeyCorp (Regional Banks) ........................... 3,550 104,086
SHARES VALUE
------ -----------
UNITED STATES--CONTINUED
Kroger Co. (The) (Food Retail) (b) ................. 2,500 $ 46,275
Lear Corp. (Auto Parts & Equipment) ................ 1,250 76,662
Leggett & Platt, Inc. (Home Furnishings) ........... 2,700 58,401
Lehman Brothers Holdings, Inc. (Investment Banking
& Brokerage) ..................................... 1,000 77,220
Lilly (Eli) & Co. (Pharmaceuticals) ................ 805 56,616
Lyondell Chemical Co. (Commodity Chemicals) ........ 3,000 50,850
Martin Marietta Materials, Inc. (Construction
Materials) ....................................... 2,200 103,334
May Department Stores Co. (The) (Department
Stores) .......................................... 1,500 43,605
McDonald's Corp. (Restaurants) ..................... 900 22,347
MeadWestvaco Corp. (Paper Products) ................ 1,330 39,568
Merck & Co., Inc. (Pharmaceuticals) ................ 3,700 170,940
MetLife, Inc. (Life & Health Insurance) ............ 5,195 174,916
MGIC Investment Corp. (Thrifts & Mortgage Finance) . 400 22,776
Microsoft Corp. (Systems Software) ................. 6,600 181,764
Morgan Stanley (Investment Banking & Brokerage) .... 700 40,509
National City Corp. (Regional Banks) ............... 1,000 33,940
Norfolk Southern Corp. (Railroads) ................. 5,600 132,440
Office Depot, Inc. (Specialty Stores) (b) .......... 2,100 35,091
Oracle Corp. (Systems Software) (b) ................ 4,000 52,800
Oxford Health Plans, Inc. (Managed Health Care) (b) 700 30,450
Parker Hannifin Corp. (Industrial Machinery) ....... 800 47,600
PepsiCo, Inc. (Soft Drinks) ........................ 1,200 55,944
Pfizer, Inc. (Pharmaceuticals) ..................... 9,290 328,217
PPG Industries, Inc. (Diversified Chemicals) ....... 500 32,010
Procter & Gamble Co. (The) (Household Products) .... 700 69,916
Qwest Communications International, Inc. (Integrated
Telecommunication Services) (b) .................. 22,500 97,200
Safeway, Inc. (Food Retail) (b) .................... 4,400 96,404
Sara Lee Corp. (Packaged Foods & Meats) ............ 1,300 28,223
SBC Communications, Inc. (Integrated
Telecommunication Services) ...................... 3,200 83,424
Sears, Roebuck and Co. (Department Stores) ......... 700 31,843
Sempra Energy (Gas Utilities) ...................... 4,000 120,240
Smurfit-Stone Container Corp. (Paper Packaging) (b) 1,200 22,284
Solectron Corp. (Electronic Manufacturing
Services) (b) .................................... 13,700 80,967
Sonoco Products Co. (Paper Packaging) .............. 900 22,158
Sprint Corp. (FON Group) (Integrated
Telecommunication Services) ...................... 3,000 49,260
Sprint Corp. (PCS Group) (Wireless Telecommunication
Services) (b) .................................... 8,000 44,960
Stanley Works (The) (Household Appliances) ......... 2,500 94,675
SUPERVALU, Inc. (Food Retail) ...................... 500 14,295
Tech Data Corp. (Technology Distributors) (b) ...... 500 19,845
Tellabs, Inc. (Communications Equipment) (b) ....... 2,800 23,604
Time Warner, Inc. (Movies & Entertainment) (b) ..... 3,850 69,262
Torchmark Corp. (Life & Health Insurance) .......... 500 22,770
Travelers Property Casualty Corp. Class A (Property
& Casualty Insurance) (b) ........................ 8,983 150,735
Travelers Property Casualty Corp. Class B (Property
& Casualty Insurance) ............................ 171 2,902
Tyco International Ltd. (Industrial Conglomerates) . 1,500 39,750
Tyson Foods, Inc. Class A (Packaged Foods & Meats) . 2,100 27,804
UST, Inc. (Tobacco) ................................ 1,000 35,690
V. F. Corp. (Apparel, Accessories & Luxury Goods) .. 800 34,592
Valero Energy Corp. (Oil & Gas Refining, Marketing &
Transportation) .................................. 950 44,023
Verizon Communications, Inc. (Integrated
Telecommunication Services) ...................... 1,300 45,604
Wachovia Corp. (Diversified Banks) ................. 1,000 46,590
Wal-Mart Stores, Inc. (Hypermarkets & Super
Centers) ......................................... 1,300 68,965
See Notes to Financial Statements
183
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
SHARES VALUE
------ -----------
UNITED STATES--CONTINUED
Washington Mutual, Inc. (Thrifts & Mortgage
Finance) ......................................... 5,325 $ 213,639
Whirlpool Corp. (Household Appliances) ............. 600 43,590
Wyeth (Pharmaceuticals) ............................ 1,200 50,940
-----------
TOTAL COMMON STOCKS
(Identified cost $8,025,181) ................................ 8,608,588
-----------
FOREIGN COMMON STOCKS--46.2%
AUSTRALIA--1.5%
Australia and New Zealand Banking Group Ltd.
(Diversified Banks) .............................. 7,600 101,239
BlueScope Steel Ltd. (Steel) ....................... 20,000 84,386
Qantas Airways Ltd. (Airlines) ..................... 28,100 69,656
-----------
255,281
-----------
AUSTRIA--0.2%
OMV AG (Oil & Gas Refining, Marketing &
Transportation) .................................. 250 37,235
-----------
BELGIUM--0.5%
Agfa Gevaert NV (Office Electronics) ............... 1,400 39,909
KBC Bankverzekeringsholding (Diversified Banks) .... 1,000 46,696
-----------
86,605
-----------
BERMUDA--1.0%
PartnerRe Ltd. (Reinsurance) ....................... 2,000 116,100
XL Capital Ltd. Class A (Property & Casualty
Insurance) ....................................... 600 46,530
-----------
162,630
-----------
CANADA--4.9%
Bank of Montreal (Diversified Banks) ............... 1 19
Bank of Nova Scotia (Diversified Banks) (e) ........ 5,451 277,559
BCE, Inc. (Integrated Telecommunication Services) .. 716 16,013
Magna International, Inc. (Auto Parts & Equipment) . 1,726 138,962
Petro-Canada (Integrated Oil & Gas) ................ 3,500 173,097
Royal Bank of Canada (Diversified Banks) ........... 3,200 153,035
Talisman Energy, Inc. (Oil & Gas Exploration &
Production) ...................................... 1,250 71,116
-----------
829,801
-----------
DENMARK--0.3%
Danske Bank A/S (Diversified Banks) ................ 2,200 51,617
-----------
FINLAND--0.5%
Fortum Oyj (Oil & Gas Refining, Marketing &
Transportation) .................................. 4,000 41,272
Nokia Oyj (Communications Equipment) ............... 2,000 34,586
-----------
75,858
-----------
FRANCE--4.4%
Assurances Generales de France (Property & Casualty
Insurance) ....................................... 2,600 141,216
Aventis SA (Pharmaceuticals) ....................... 3,050 201,589
BNP Paribas SA (Diversified Banks) ................. 1,400 88,154
Credit Agricole SA (Diversified Banks) ............. 2,181 52,077
France Telecom SA (Integrated Telecommunication
Services) ........................................ 2,904 83,003
PSA Peugeot Citroen (Automobile Manufacturers) ..... 1,760 89,687
Societe Generale Class A (Diversified Banks) ....... 1,050 92,709
-----------
748,435
-----------
GERMANY--5.2%
AMB Generali Holding AG (Property & Casualty
Insurance) ....................................... 470 34,977
Celanese AG (Oil & Gas Equipment & Services) ....... 1,350 55,308
Continental AG (Auto Parts & Equipment) ............ 4,500 171,304
E.ON AG (Electric Utilities) ....................... 500 32,751
SHARES VALUE
------ -----------
GERMANY--CONTINUED
Hannover Rueckversicherung AG Registered Shares
(Property & Casualty Insurance) .................. 2,300 $ 80,158
HeidelbergCement (Construction Materials) (b) ...... 3,354 143,840
Man AG (Aerospace & Defense) ....................... 400 12,134
Siemens AG (Aerospace & Defense) ................... 1,325 106,628
Volkswagen AG (Automobile Manufacturers) ........... 4,400 246,140
-----------
883,240
-----------
IRELAND--0.5%
Depfa Bank plc (Multi-Sector Holdings) ............. 700 88,030
-----------
ITALY--1.4%
ENI SpA (Integrated Oil & Gas) ..................... 12,150 229,268
-----------
JAPAN--8.2%
Canon, Inc. (Office Electronics) ................... 5,000 232,808
Hitachi Ltd. (Aerospace & Defense) ................. 6,000 36,167
Honda Motor Co. Ltd. (Automobile Manufacturers) .... 3,900 173,220
Jfe Holdings, Inc. (Steel) ......................... 3,900 106,443
Nippon Meat Packers, Inc. (Packaged Foods & Meats) . 7,000 68,452
Nissan Motor Co. Ltd. (Automobile Manufacturers) ... 21,000 239,843
Promise Co. Ltd. (Consumer Finance) ................ 3,000 130,727
Sumitomo Mitsui Financial Group, Inc. (Diversified
Banks) ........................................... 25 135,331
Takeda Chemical Industries Ltd. (Pharmaceuticals) .. 1,300 51,554
Tohoku Electric Power Co., Inc. (Electric Utilities) 1,900 31,504
Tokyo Electric Power Co., Inc. (The) (Electric
Utilities) ....................................... 1,100 24,120
UFJ Holdings, Inc. (Diversified Banks) (b) ......... 30 144,163
-----------
1,374,332
-----------
LUXEMBOURG--1.2%
Arcelor (Steel) (c) ................................ 10,900 190,007
Arcelor (Steel) (d) ................................ 1,066 18,381
-----------
208,388
-----------
NETHERLANDS--1.8%
DSM NV (Oil & Gas Equipment & Services) ............ 3,500 172,307
Koninklijke (Royal) Philips Electronics NV
(Aerospace & Defense) ............................ 1,300 37,960
Royal Dutch Petroleum Co. (Integrated Oil & Gas) ... 1,650 86,996
-----------
297,263
-----------
SINGAPORE--0.9%
Flextronics International Ltd. (Electronic
Manufacturing Services) (b) ...................... 5,000 74,200
Singapore Airlines Ltd. (Airlines) ................. 10,600 69,905
-----------
144,105
-----------
SPAIN--1.4%
Acs Actividades de Contruccion y Servicios SA
(Construction & Engineering) ..................... 1,136 55,453
Altadis SA (Tobacco) ............................... 1,800 51,085
Banco Santander Central Hispano SA (Diversified
Banks) ........................................... 6,200 73,433
Telefonica SA (Integrated Telecommunication
Services) ........................................ 3,395 49,846
-----------
229,817
-----------
SWEDEN--0.9%
Svenska Cellulosa AB Series B (Household Products) . 3,900 159,354
-----------
SWITZERLAND--2.3%
Credit Suisse Group (Diversified Banks) ............ 5,100 186,598
Novartis AG Registered Shares (Pharmaceuticals) .... 2,700 122,583
Roche Holding AG (Pharmaceuticals) ................. 700 70,609
-----------
379,790
-----------
See Notes to Financial Statements
184
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
SHARES VALUE
------ -----------
UNITED KINGDOM--9.1%
AstraZeneca plc (Pharmaceuticals) .................. 1,200 $ 57,571
Aviva plc (Property & Casualty Insurance) .......... 17,800 156,217
BP plc (Integrated Oil & Gas) ...................... 13,300 107,855
British American Tobacco plc (Tobacco) ............. 6,600 90,976
BT Group plc (Integrated Telecommunication
Services) ........................................ 5,100 17,187
GlaxoSmithKline plc (Pharmaceuticals) .............. 9,646 221,029
InterContinental Hotels Group plc (Hotels, Resorts &
Cruise Lines) .................................... 9,067 85,864
Lloyds TSB Group plc (Multi-Sector Holdings) ....... 3,700 29,674
Persimmon plc (Homebuilding) ....................... 2,200 21,149
Royal & Sun Alliance Insurance Group plc (Property
& Casualty Insurance) ............................ 28,600 45,183
Safeway plc (Food Retail) .......................... 25,857 131,458
Trinity Mirror plc (Publishing & Printing) ......... 4,100 41,432
Unilever plc (Packaged Foods & Meats) .............. 4,500 41,950
Vodafone Group plc (Wireless Telecommunication
Services) ........................................ 138,700 343,888
Whitbread plc (Restaurants) ........................ 11,400 146,732
-----------
1,538,165
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $6,211,574) ................................ 7,779,214
-----------
PAR
VALUE
(000)
-----
SHORT-TERM OBLIGATIONS--2.5%
TIME DEPOSITS--2.5%
Brown Brothers Harriman & Co. Grand Cayman
Branch 0.10%, 1/2/04 (Identified cost $419,106) .. $419 419,106
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $419,106) .................................. 419,106
-----------
TOTAL INVESTMENTS--99.8%
(Identified cost $14,655,861) ............................... 16,806,908(a)
Other assets and liabilities, net--0.2% ..................... 30,780
-----------
NET ASSETS--100.0% ............................................ $16,837,688
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,955,467 and gross
depreciation of $850,339 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$14,701,780.
(b) Non-income producing.
(c) Shares traded on Paris exchange.
(d) Shares traded on Madrid exchange.
(e) All or a portion segregated as collateral for futures contracts.
See Notes to Financial Statements
185
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
Aerospace & Defense ....................................... 1.3%
Agricultural Products ..................................... 0.2
Airlines .................................................. 0.8
Aluminum .................................................. 0.5
Apparel, Accessories & Luxury Goods ....................... 0.4
Auto Parts & Equipment .................................... 2.4
Automobile Manufacturers .................................. 4.6
Broadcasting & Cable TV ................................... 1.6
Commercial Printing ....................................... 0.5
Commodity Chemicals ....................................... 0.3
Communications Equipment .................................. 1.6
Computer Hardware ......................................... 2.7
Construction & Engineering ................................ 0.3
Construction Materials .................................... 1.5
Consumer Finance .......................................... 0.8
Data Processing & Outsourced Services ..................... 0.1
Department Stores ......................................... 0.6
Diversified Banks ......................................... 11.0
Diversified Chemicals ..................................... 1.3
Diversified Commercial Services ........................... 0.7
Electric Utilities ........................................ 2.1
Electrical Components & Equipment ......................... 0.2
Electronic Manufacturing Services ......................... 0.9
Environmental Services .................................... 0.4
Food Retail ............................................... 1.8
Gas Utilities ............................................. 0.7
Health Care Equipment ..................................... 0.3
Health Care Services ...................................... 0.5
Home Furnishings .......................................... 0.4
Home Improvement Retail ................................... 0.4
Homebuilding .............................................. 0.1
Hotels, Resorts & Cruise Lines ............................ 0.5
Household Appliances ...................................... 0.8
Household Products ........................................ 1.6
Hypermarkets & Super Centers .............................. 0.4
Industrial Conglomerates .................................. 1.9%
Industrial Machinery ...................................... 0.6
Integrated Oil & Gas ...................................... 6.2
Integrated Telecommunication Services ..................... 3.0
Investment Banking & Brokerage ............................ 0.7
Life & Health Insurance ................................... 1.2
Managed Health Care ....................................... 0.2
Movies & Entertainment .................................... 0.4
Multi-Sector Holdings ..................................... 0.7
Office Electronics ........................................ 1.7
Oil & Gas Equipment & Services ............................ 1.4
Oil & Gas Exploration & Production ........................ 0.4
Oil & Gas Refining, Marketing & Transportation ............ 0.9
Other Diversified Financial Services ...................... 1.9
Packaged Foods & Meats .................................... 1.0
Paper Packaging ........................................... 0.3
Paper Products ............................................ 0.9
Pharmaceuticals ........................................... 9.6
Property & Casualty Insurance ............................. 5.0
Publishing & Printing ..................................... 0.3
Railroads ................................................. 0.8
Regional Banks ............................................ 0.8
Reinsurance ............................................... 0.7
Restaurants ............................................... 1.0
Semiconductors ............................................ 0.9
Soft Drinks ............................................... 0.7
Specialty Stores .......................................... 0.2
Steel ..................................................... 2.4
Systems Software .......................................... 1.4
Technology Distributors ................................... 0.4
Thrifts & Mortgage Finance ................................ 3.2
Tobacco ................................................... 2.5
Wireless Telecommunication Services ....................... 2.4
-----
100.0%
=====
See Notes to Financial Statements
186
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $14,655,861) .................................................... $16,806,908
Deposits with broker for variation margin requirements on futures contracts ..................................... 3,875
Foreign currency at value (Identified cost $44,696) ............................................................. 47,113
Foreign currency deposits at value with broker for variation margin requirements on futures contracts
(Identified cost $7,471) ...................................................................................... 7,747
Receivables
Dividends ..................................................................................................... 22,379
Fund shares sold .............................................................................................. 13,031
Variations margin for futures contracts ....................................................................... 12,192
Tax reclaims .................................................................................................. 11,263
Prepaid expenses ................................................................................................ 195
-----------
Total assets ................................................................................................ 16,924,703
-----------
LIABILITIES
Payables
Investment securities purchased ............................................................................... 12,134
Fund shares repurchased ....................................................................................... 14,628
Professional fee .............................................................................................. 30,939
Printing fee .................................................................................................. 12,559
Financial agent fee ........................................................................................... 3,997
Investment advisory fee ....................................................................................... 3,460
Trustees' fee ................................................................................................. 2,360
Custodian ..................................................................................................... 2,350
Administration fee ............................................................................................ 1,056
Accrued expenses ................................................................................................ 3,532
-----------
Total liabilities ........................................................................................... 87,015
-----------
NET ASSETS ...................................................................................................... $16,837,688
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $15,393,461
Distributions in excess of net investment income .............................................................. (27,747)
Accumulated net realized loss ................................................................................. (689,737)
Net unrealized appreciation ................................................................................... 2,161,711
-----------
NET ASSETS ...................................................................................................... $16,837,688
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 1,587,060
===========
Net asset value and offering price per share .................................................................... $10.61
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 331,833
Interest ...................................................................................................... 472
Foreign taxes withheld ........................................................................................ (19,557)
----------
Total investment income ..................................................................................... 312,748
----------
EXPENSES
Investment advisory fee ....................................................................................... 114,551
Financial agent fee ........................................................................................... 44,599
Administration fee ............................................................................................ 9,800
Professional .................................................................................................. 26,631
Custodian ..................................................................................................... 23,138
Printing ...................................................................................................... 20,859
Trustees ...................................................................................................... 6,394
Miscellaneous ................................................................................................. 9,371
----------
Total expenses .............................................................................................. 255,343
Less expenses borne by investment adviser ................................................................... (108,972)
----------
Net expenses ................................................................................................ 146,371
----------
NET INVESTMENT INCOME ........................................................................................... 166,377
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on securities ............................................................................... (149,475)
Net realized gains on futures contracts ....................................................................... 6,911
Net realized gain on foreign currency transactions ............................................................ 11,159
Net change in unrealized appreciation (depreciation) on investments ........................................... 3,740,254
Net change in unrealized appreciation (depreciation) on futures ............................................... 4,376
Net change in unrealized appreciation (depreciation) on foreign currency and foreign currency transactions .... 3,277
----------
NET GAIN ON INVESTMENTS ......................................................................................... 3,616,502
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $3,782,879
==========
See Notes to Financial Statements
187
PHOENIX-SANFORD BERNSTEIN GLOBAL VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
----------- -----------
FROM OPERATIONS
Net investment income (loss) .................................................................... $ 166,377 $ 107,727
Net realized gain (loss) ........................................................................ (131,405) (539,572)
Net change in unrealized appreciation (depreciation) ............................................ 3,747,907 (1,195,023)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ..................................... 3,782,879 (1,626,868)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ........................................................................... (209,749) (103,277)
Net realized short-term gains ................................................................... -- (27)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ....................................... (209,749) (103,304)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (532,527 and 536,540 shares, respectively) ........................ 4,828,543 4,804,967
Net asset value of shares issued from reinvestment of distributions (20,146 and 12,737 shares,
respectively) ................................................................................. 209,749 103,304
Cost of shares repurchased (218,402 and 216,966 shares, respectively) ........................... (1,913,217) (1,838,932)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ....................................... 3,125,075 3,069,339
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ........................................................... 6,698,205 1,339,167
NET ASSETS
Beginning of period ............................................................................. 10,139,483 8,800,316
----------- -----------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME AND UNDISTRIBUTED
NET INVESTMENT INCOME OF ($27,747) AND $2,148, RESPECTIVELY) .................................. $16,837,688 $10,139,483
=========== ===========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
---------------------------- 11/20/00 TO
2003 2002 2001 12/31/00
------ ------ ------ --------------
Net asset value, beginning of period ......................................... $ 8.09 $ 9.56 $10.42 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................................... 0.12 0.09 0.09 0.02
Net realized and unrealized gain (loss) .................................... 2.54 (1.48) (0.80) 0.41
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ......................................... 2.66 (1.39) (0.71) 0.43
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ....................................... (0.14) (0.08) (0.09) (0.01)
Distributions from net realized gains ...................................... -- --(4) (0.06) --
------ ------ ------ ------
TOTAL DISTRIBUTIONS ...................................................... (0.14) (0.08) (0.15) (0.01)
------ ------ ------ ------
CHANGE IN NET ASSET VALUE .................................................... 2.52 (1.47) (0.86) 0.42
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................... $10.61 $ 8.09 $ 9.56 $10.42
====== ====== ====== ======
Total return ................................................................. 32.79% (14.47)% (6.84)% 4.35%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........................................ $16,838 $10,139 $8,800 $7,687
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) ...................................................... 1.15% 1.13% 1.05% 1.05%(1)
Net investment income ...................................................... 1.31% 1.10% 1.02% 1.12%(1)
Portfolio turnover ........................................................... 20% 38% 24% 0%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 2.01%, 2.57%, 2.80% and 5.41% for the periods ended December 31, 2003, 2002, 2001 and 2000,
respectively.
(4) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
188
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital appreciation with current income as a
secondary consideration.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: Over the annual reporting period ended December 31, 2003, the series returned
40.97%, underperforming its benchmark, the Russell 2500(R) Value Index 1, which
returned 44.93% for the year, but outperforming the S&P 500(R) Index 2, which
gained 28.71%. All performance figures assume reinvestment of distributions.
Past performance is not indicative of future results and current performance may
be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: U.S. stocks staged a robust comeback in 2003 and, as has been the case since
1999, returns of small-capitalization stocks outstripped those of large-caps.
The reasons behind this small-cap leadership have changed considerably over the
asset class' four-year period of outperformance. Early in their run, small-cap
stocks were remarkably cheap, having been largely left out of the investment
bubble of the late 1990s. It was bargain hunters who subsequently propelled
prices higher. More recently, small-cap returns have been lifted by optimism
about the U.S. economy and corporate profit growth. Small businesses tend to be
more cyclical than large-cap firms. Business spending also appears to be
reviving. Given extremely thin inventories, we are beginning to see increased
demand trickling down to the materials companies, providing a boost to volumes
and pricing power.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: The portfolio's positive absolute performance was attributable to both sector
and stock selection, with strong returns from holdings in the materials &
processing and producer durables sectors. Among the top performers for the year
were Terex, Nortel Networks, Pulte, Hughes Supply and American Axle &
Manufacturing.
On the negative side, the portfolio's underperformance versus its benchmark
over the year was due to its holdings within the integrated oil, utilities and
energy sectors, including Kerr McGee, Amerada Hess, SEACOR SMIT and Qwest
Communications.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We remain optimistic about the outlook for small and mid-cap stocks. Our
enthusiasm does not stem from our belief that these stocks are especially cheap
in and of themselves. After examining this group's valuations relative to
long-term averages for price-to-book or price-to-earnings ratios, we think they
actually look a bit expensive. On the other hand, small and mid-cap stocks look
attractively valued when compared to other assets.
In our view, the fuel needed to propel further stock appreciation in this
asset class should come from strong and growing corporate profits. We believe a
powerful profit recovery is already under way. As important, so far in this
recovery, the pace of profit growth has been most rapid among small- and mid-cap
companies, a pattern that may well continue into 2004 given the pro-cyclical
nature of smaller businesses in general.
To capture the benefits of the economic and profit trends we expect to
unfold this year, the series remains overweight in cyclical companies, with an
emphasis in the producer durable and materials & processing sectors. We believe
that these types of companies represent the best balance of risk and return in
the market today.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 2500(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,500 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
189
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
3/2/98 TO
1 YEAR 5 YEARS 12/31/03
- --------------------------------------------------------------------------------
Mid-Cap Value Series 40.97% 10.70% 6.87%
- --------------------------------------------------------------------------------
Russell 2500(R) Value Index 1 44.93% 9.40% 7.05%
- --------------------------------------------------------------------------------
Russell 2500(R) Index 2 45.51% 11.93% 8.93%
- --------------------------------------------------------------------------------
S&P 500(R) Index 3 28.71% (0.57)% 2.52%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Mid-Cap Value Series Russell 2500(R) Value Index 1,4 Russell 2500(R) Index 2 S&P 500(R) Index 3
3/2/98 $10,000 $10,000 $10,000 $10,000
12/31/98 $8,863 $9,494 $9,375 $11,895
12/31/99 $7,951 $11,787 $9,515 $14,409
12/29/00 $9,295 $12,290 $11,493 $13,086
12/31/01 $11,431 $12,440 $12,613 $11,532
12/31/02 $10,454 $10,226 $11,367 $8,983
12/31/03 $14,737 $14,880 $16,475 $11,562
1 The Russell 2500(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,500 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The Russell 2500(R) Index is a market capitalization-weighted index of the
2,500 smallest companies in the Russell Universe, which comprises the 3,000
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested.
3 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
4 The Russell 2500(R) Value Index replaced the series former index to better
reflect the series mix of portfolio investments.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
190
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--95.0%
AGRICULTURAL PRODUCTS--1.5%
Corn Products International, Inc. .................. 37,000 $ 1,274,650
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--2.8%
Jones Apparel Group, Inc. .......................... 35,500 1,250,665
V. F. Corp. ........................................ 26,200 1,132,888
-----------
2,383,553
-----------
AUTO PARTS & EQUIPMENT--6.6%
American Axle & Manufacturing Holdings, Inc. (b) ... 37,000 1,495,540
ArvinMeritor, Inc. ................................. 51,000 1,230,120
BorgWarner, Inc. ................................... 15,500 1,318,585
Dana Corp. ......................................... 29,600 543,160
Modine Manufacturing Co. ........................... 41,000 1,106,180
-----------
5,693,585
-----------
CASINOS & GAMING--1.3%
Park Place Entertainment Corp. (b) ................. 106,000 1,147,980
-----------
COMMUNICATIONS EQUIPMENT--4.2%
Adaptec, Inc. (b) .................................. 147,300 1,300,659
ADC Telecommunications, Inc. (b) ................... 33,300 98,901
Andrew Corp. (b) ................................... 90,000 1,035,900
Tellabs, Inc. (b) .................................. 142,500 1,201,275
-----------
3,636,735
-----------
COMPUTER STORAGE & PERIPHERALS--1.2%
Western Digital Corp. (b) .......................... 86,500 1,019,835
-----------
CONSTRUCTION MATERIALS--1.5%
Texas Industries, Inc. ............................. 34,600 1,280,200
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--4.3%
PACCAR, Inc. ....................................... 15,400 1,310,848
Terex Corp. (b) .................................... 85,000 2,420,800
-----------
3,731,648
-----------
DEPARTMENT STORES--1.5%
Federated Department Stores, Inc. .................. 27,500 1,296,075
-----------
DISTRIBUTORS--2.3%
Genuine Parts Co. .................................. 7,500 249,000
Hughes Supply, Inc. ................................ 34,000 1,687,080
-----------
1,936,080
-----------
DIVERSIFIED CHEMICALS--1.6%
FMC Corp. (b) ...................................... 41,300 1,409,569
-----------
DIVERSIFIED COMMERCIAL SERVICES--0.8%
Deluxe Corp. ....................................... 16,000 661,280
-----------
DIVERSIFIED METALS & MINING--1.4%
Peabody Energy Corp. ............................... 29,700 1,238,787
-----------
ELECTRIC UTILITIES--7.3%
Northeast Utilities ................................ 66,700 1,345,339
OGE Energy Corp. ................................... 45,500 1,100,645
PNM Resources, Inc. ................................ 54,500 1,531,450
Puget Energy, Inc. ................................. 54,200 1,288,334
WPS Resources Corp. ................................ 21,000 970,830
-----------
6,236,598
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--2.0%
Cooper Industries Ltd. Class A ..................... 30,000 1,737,900
-----------
SHARES VALUE
------ -----------
ELECTRONIC EQUIPMENT MANUFACTURERS--1.9%
Vishay Intertechnology, Inc. (b) ................... 71,378 $ 1,634,556
-----------
ELECTRONIC MANUFACTURING SERVICES--1.5%
KEMET Corp. (b) .................................... 27,500 376,475
Solectron Corp. (b) ................................ 154,400 912,504
-----------
1,288,979
-----------
FOOD RETAIL--0.6%
SUPERVALU, Inc. .................................... 19,500 557,505
-----------
HEALTH CARE EQUIPMENT--0.2%
Apogent Technologies, Inc. (b) ..................... 6,200 142,848
-----------
HOMEBUILDING--2.0%
Pulte Homes, Inc. .................................. 18,000 1,685,160
-----------
INDUSTRIAL CONGLOMERATES--1.7%
Textron, Inc. ...................................... 26,000 1,483,560
-----------
INDUSTRIAL MACHINERY--7.0%
Flowserve Corp. (b) ................................ 6,800 141,984
Harsco Corp. ....................................... 30,000 1,314,600
Kennametal, Inc. ................................... 15,400 612,150
Lincoln Electric Holdings, Inc. .................... 39,000 964,860
Mueller Industries, Inc. (b) ....................... 12,500 429,500
Parker Hannifin Corp. .............................. 24,000 1,428,000
Reliance Steel & Aluminum Co. ...................... 35,000 1,162,350
-----------
6,053,444
-----------
INTEGRATED OIL & GAS--0.9%
Amerada Hess Corp. ................................. 14,800 786,916
-----------
LEISURE PRODUCTS--1.6%
Brunswick Corp. .................................... 43,000 1,368,690
-----------
MANAGED HEALTH CARE--2.4%
Health Net, Inc. (b) ............................... 20,300 663,810
PacifiCare Health Systems, Inc. (b) ................ 20,200 1,365,520
-----------
2,029,330
-----------
METAL & GLASS CONTAINERS--1.5%
Ball Corp. ......................................... 21,000 1,250,970
-----------
MULTI-UTILITIES & UNREGULATED POWER--1.4%
Constellation Energy Group, Inc. ................... 30,000 1,174,800
-----------
OIL & GAS EQUIPMENT & SERVICES--1.4%
SEACOR SMIT, Inc. (b) .............................. 27,800 1,168,434
-----------
OIL & GAS EXPLORATION & PRODUCTION--1.0%
Kerr-McGee Corp. ................................... 18,000 836,820
-----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--1.6%
Valero Energy Corp. ................................ 29,300 1,357,762
-----------
PAPER PACKAGING--0.4%
Temple-Inland, Inc. ................................ 5,500 344,685
-----------
PAPER PRODUCTS--1.2%
MeadWestvaco Corp. ................................. 34,600 1,029,350
-----------
PERSONAL PRODUCTS--0.6%
Nu Skin Enterprises, Inc. Class A .................. 28,300 483,647
-----------
PROPERTY & CASUALTY INSURANCE--0.8%
Fidelity National Financial, Inc. .................. 18,500 717,430
-----------
PUBLISHING & PRINTING--1.1%
Reader's Digest Association, Inc. (The) ............ 63,000 923,580
-----------
See Notes to Financial Statements
191
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
SHARES VALUE
------ -----------
REGIONAL BANKS--5.6%
Banknorth Group, Inc. .............................. 38,800 $ 1,262,164
Hibernia Corp. Class A ............................. 27,000 634,770
Popular, Inc. ...................................... 15,000 674,100
UnionBanCal Corp. .................................. 23,500 1,352,190
Whitney Holding Corp. .............................. 21,000 860,790
-----------
4,784,014
-----------
REITS--3.1%
Avalonbay Communities, Inc. ........................ 8,300 396,740
FelCor Lodging Trust, Inc. (b) ..................... 57,500 637,100
Mack-Cali Realty Corp. ............................. 14,300 595,166
Post Properties, Inc. .............................. 37,000 1,033,040
-----------
2,662,046
-----------
SPECIALTY CHEMICALS--2.4%
Crompton Corp. ..................................... 93,000 666,810
Cytec Industries, Inc. (b) ......................... 36,000 1,382,040
-----------
2,048,850
-----------
SPECIALTY STORES--5.8%
AutoNation, Inc. (b) ............................... 65,800 1,208,746
Group 1 Automotive, Inc. (b) ....................... 37,500 1,357,125
Office Depot, Inc. (b) ............................. 80,000 1,336,800
Zale Corp. (b) ..................................... 21,000 1,117,200
-----------
5,019,871
-----------
TECHNOLOGY DISTRIBUTORS--1.9%
Arrow Electronics, Inc. (b) ........................ 18,900 437,346
Avnet, Inc. (b) .................................... 22,800 493,848
Tech Data Corp. (b) ................................ 18,000 714,420
-----------
1,645,614
-----------
THRIFTS & MORTGAGE FINANCE--3.4%
Astoria Financial Corp. ............................ 34,500 1,283,400
Commercial Federal Corp. ........................... 28,000 747,880
Washington Federal, Inc. ........................... 32,899 934,332
-----------
2,965,612
-----------
TOBACCO--1.7%
Universal Corp. .................................... 32,800 1,448,776
-----------
TOTAL COMMON STOCKS
(Identified cost $69,706,756) ............................... 81,577,724
-----------
SHARES VALUE
------ -----------
FOREIGN COMMON STOCKS--1.9%
COMMUNICATIONS EQUIPMENT--1.3%
Nortel Networks Corp. (Canada) (b) ................. 261,020 $ 1,104,115
-----------
REINSURANCE--0.6%
PartnerRe Ltd. (Bermuda) ........................... 9,700 563,085
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $777,392) .................................. 1,667,200
-----------
TOTAL LONG TERM INVESTMENTS--96.9%
(Identified cost $70,484,148) ............................... 83,244,924
-----------
SHORT-TERM OBLIGATIONS--3.0%
MONEY MARKET MUTUAL FUNDS--3.0%
SSgA Money Market Fund (0.72% seven day
effective yield) .................................2,549,859 2,549,859
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $2,549,859) ................................ 2,549,859
-----------
TOTAL INVESTMENTS--99.9%
(Identified cost $73,034,007) ............................... 85,794,783(a)
Other assets and liabilities, net--0.1% ..................... 73,255
-----------
NET ASSETS--100.0% ............................................ $85,868,038
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $16,127,374 and gross
depreciation of $3,419,041 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$73,086,450.
(b) Non-income producing.
See Notes to Financial Statements
192
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $73,034,007) .................................................... $85,794,783
Receivables
Fund shares sold .............................................................................................. 173,316
Dividends and interest ........................................................................................ 124,919
Investment securities sold .................................................................................... 48,212
Prepaid expenses ................................................................................................ 1,015
-----------
Total assets ................................................................................................ 86,142,245
-----------
LIABILITIES
Payables
Fund shares repurchased ....................................................................................... 127,638
Investment advisory fee ....................................................................................... 76,653
Professional fee .............................................................................................. 30,038
Printing fee .................................................................................................. 20,541
Financial agent fee ........................................................................................... 7,303
Administration fee ............................................................................................ 5,429
Trustees' fee ................................................................................................. 2,360
Accrued expenses ................................................................................................ 4,245
-----------
Total liabilities ........................................................................................... 274,207
-----------
NET ASSETS ...................................................................................................... $85,868,038
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $72,077,204
Undistributed net investment income ........................................................................... 82,438
Accumulated net realized gain ................................................................................. 947,620
Net unrealized appreciation ................................................................................... 12,760,776
-----------
NET ASSETS ...................................................................................................... $85,868,038
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 6,847,551
===========
Net asset value and offering price per share .................................................................... $12.54
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 1,172,357
Interest ...................................................................................................... 16,404
Foreign tax withheld .......................................................................................... (1,410)
-----------
Total investment income ..................................................................................... 1,187,351
-----------
EXPENSES
Investment advisory fee ....................................................................................... 707,813
Financial agent fee ........................................................................................... 79,071
Administration fee ............................................................................................ 51,906
Printing ...................................................................................................... 33,758
Professional .................................................................................................. 21,069
Custodian ..................................................................................................... 15,631
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 11,272
-----------
Total expenses .............................................................................................. 926,451
Less expenses borne by investment adviser ................................................................... (50,113)
-----------
Net expenses ................................................................................................ 876,338
-----------
NET INVESTMENT INCOME ........................................................................................... 311,013
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 3,177,717
Net change in unrealized appreciation (depreciation) on investments ........................................... 20,633,901
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 23,811,618
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $24,122,631
===========
See Notes to Financial Statements
193
PHOENIX-SANFORD BERNSTEIN MID-CAP VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ....................................................................... $ 311,013 $ 695,282
Net realized gain (loss) ........................................................................... 3,177,717 4,502,849
Net change in unrealized appreciation (depreciation) ............................................... 20,633,901 (13,626,673)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........................................ 24,122,631 (8,428,542)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .............................................................................. (132,810) (535,391)
Net realized short-term gains ...................................................................... (332,025) (1,933,833)
Net realized long-term gains ....................................................................... (2,280,005) (2,770,524)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS .......................................... (2,744,840) (5,239,748)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (2,104,572 and 4,565,225 shares, respectively) ..................... 21,723,293 51,050,931
Net asset value of shares issued from reinvestment of distributions (222,358 and 561,799 shares,
respectively) .................................................................................... 2,744,840 5,239,748
Cost of shares repurchased (2,144,663 and 2,886,177 shares, respectively) .......................... (21,266,705) (29,889,804)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS .......................................... 3,201,428 26,400,875
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .............................................................. 24,579,219 12,732,585
NET ASSETS
Beginning of period ................................................................................ 61,288,819 48,556,234
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $82,438 AND
$0, RESPECTIVELY) ................................................................................ $ 85,868,038 $ 61,288,819
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
--------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ...................................... $ 9.20 $10.97 $ 9.07 $ 7.82 $ 8.84
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................................ 0.03 0.10 0.13 0.06 0.11
Net realized and unrealized gain (loss) ................................. 3.72 (1.02) 1.95 1.25 (1.02)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ...................................... 3.75 (0.92) 2.08 1.31 (0.91)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ...................................... (0.02) (0.10) (0.13) (0.06) (0.11)
Distributions from net realized gains ..................................... (0.39) (0.75) (0.05) -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................................... (0.41) (0.85) (0.18) (0.06) (0.11)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ................................................. 3.34 (1.77) 1.90 1.25 (1.02)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................ $12.54 $ 9.20 $10.97 $ 9.07 $ 7.82
====== ====== ====== ====== ======
Total return .............................................................. 40.97% (8.55)% 22.98% 16.89% (10.28)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ..................................... $85,868 $61,289 $48,556 $14,758 $8,635
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ................................................... 1.30% 1.28% 1.20%(2) 1.20%(2) 1.20%
Net investment income . ................................................. 0.46% 1.12% 1.72% 0.95% 1.40%
Portfolio turnover ........................................................ 29% 44% 28% 128% 29%
<FN>
(1) 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%, 1.40%, 1.54%, 2.39% and 2.58% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(2) 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.
</FN>
See Notes to Financial Statements
194
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital appreciation by investing primarily in
small-capitalization stocks that appear to be undervalued with current income as
a secondary consideration.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: Over the annual reporting period ended December 31, 2003, the series returned
43.86%, underperforming its benchmark, the Russell 2000(R) Value Index 1, which
returned 46.03%, outperforming the S&P 500(R) Index 2, which gained 28.71% for
the year. All performance figures assume reinvestment of distribution. Past
performance is not indicative of future results and current performance may be
higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: U.S. stocks staged a robust comeback in 2003 and, as has been the case since
1999, returns of small-capitalization stocks outstripped those of large-caps.
The reasons behind this small-cap leadership have changed considerably over the
asset class' four-year period of outperformance. Early in their run, small-cap
stocks were remarkably cheap, having been largely left out of the investment
bubble of the late 1990s. It was bargain hunters who subsequently propelled
prices higher. More recently, small-cap returns have been lifted by optimism
about the U.S. economy and corporate profit growth. Small businesses tend to be
more cyclical than large-cap firms. Business spending also appears to be
reviving. Given extremely thin inventories, we are beginning to see increased
demand trickling down to the materials companies, providing a boost to volumes
and pricing power.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: The series' relative underperformance was generally attributable to sector
selection, specifically the underweighting of the health care and technology
sectors. Stock selection was positive, with strong returns from holdings in the
materials & processing, transportation and producer durables. Among the top
performers for the year were Terex, Foot Locker, GrafTech International, and
American Axle & Manufacturing.
On the negative side, some of the detractors from the series' performance
over the year came from holdings within the consumer discretionary, energy and
health care sectors, including Readers Digest and CONMED and SEACOR SMIT.
Q: WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
A: We remain optimistic about the outlook for small and mid-cap stocks. Our
enthusiasm does not stem from our belief that these stocks are especially cheap
in and of themselves. After examining this group's valuations relative to
long-term averages for price-to-book or price-to-earnings ratios, we think they
actually look a bit expensive. On the other hand, small and mid-cap stocks look
attractively valued when compared to other assets.
In our view, the fuel needed to propel further stock appreciation in this
asset class should come from strong and growing corporate profits. We believe a
powerful profit recovery is already under way. As important, so far in this
recovery, the pace of profit growth has been most rapid among small- and mid-cap
companies, a pattern that may well continue into 2004 given the pro-cyclical
nature of smaller businesses in general.
To capture the benefits of the economic and profit trends we expect to
unfold this year, the series remains overweight in cyclical companies, with an
emphasis in the producer durable and materials & processing sectors. We believe
that these types of companies represent the best balance of risk and return in
the market today.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 2000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
195
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
11/20/00 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Small-Cap Value Series 43.86% 16.79%
- --------------------------------------------------------------------------------
Russell 2000(R) Value Index 1 46.03% 16.63%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (4.38)%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 11/20/00 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Small-Cap Russell 2000(R)
Value Series Value Index 1 S&P 500(R) Index 2
11/20/00 $10,000 $10,000 $10,000
12/29/00 $10,644 $10,945 $9,844
12/31/01 $12,321 $12,479 $8,675
12/31/02 $11,269 $11,054 $6,758
12/31/03 $16,212 $16,141 $8,699
1 The Russell 2000(R) Value Index is a market capitalization-weighted index of
value-oriented stocks of the smallest 2,000 companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
196
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
-------- -----------
COMMON STOCKS--92.0%
AEROSPACE & DEFENSE--5.1%
Curtiss-Wright Corp. ............................... 17,200 $ 774,172
Esterline Technologies Corp. (b) ................... 20,000 533,400
Hexcel Corp. (b) ................................... 9,200 68,172
Moog, Inc. Class A (b) ............................. 9,700 479,180
Orbital Sciences Corp. (b) ......................... 52,800 634,656
-----------
2,489,580
-----------
AGRICULTURAL PRODUCTS--0.9%
Corn Products International, Inc. .................. 13,000 447,850
-----------
APPAREL RETAIL--1.7%
Foot Locker, Inc. .................................. 34,400 806,680
-----------
APPAREL, ACCESSORIES & LUXURY GOODS--2.4%
Kellwood Co. ....................................... 16,000 656,000
Phillips-Van Heusen Corp. .......................... 27,900 494,946
-----------
1,150,946
-----------
AUTO PARTS & EQUIPMENT--5.4%
American Axle & Manufacturing Holdings, Inc. (b) ... 18,400 743,728
ArvinMeritor, Inc. ................................. 29,600 713,952
BorgWarner, Inc. ................................... 6,900 586,983
Dana Corp. ......................................... 6,000 110,100
Modine Manufacturing Co. ........................... 17,700 477,546
-----------
2,632,309
-----------
CASINOS & GAMING--2.4%
Aztar Corp. (b) .................................... 28,000 630,000
Park Place Entertainment Corp. (b) ................. 49,800 539,334
-----------
1,169,334
-----------
COMMERCIAL PRINTING--1.2%
Bowne & Co., Inc. .................................. 41,400 561,384
-----------
COMMUNICATIONS EQUIPMENT--3.1%
Adaptec, Inc. (b) .................................. 40,000 353,200
ADC Telecommunications, Inc. (b) ................... 156,700 465,399
Andrew Corp. (b) ................................... 42,100 484,571
Black Box Corp. .................................... 4,400 202,708
-----------
1,505,878
-----------
COMPUTER STORAGE & PERIPHERALS--1.7%
SBS Technologies, Inc. (b) ......................... 25,500 375,105
Western Digital Corp. (b) .......................... 40,500 477,495
-----------
852,600
-----------
CONSTRUCTION & ENGINEERING--0.8%
URS Corp. (b) ...................................... 15,800 395,158
-----------
CONSTRUCTION MATERIALS--1.5%
Texas Industries, Inc. ............................. 20,000 740,000
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--2.6%
Terex Corp. (b) .................................... 45,100 1,284,448
-----------
CONSUMER FINANCE--0.5%
PFF Bancorp, Inc. .................................. 7,295 264,663
-----------
DISTRIBUTORS--1.6%
Hughes Supply, Inc. ................................ 16,200 803,844
-----------
DIVERSIFIED CHEMICALS--1.5%
FMC Corp. (b) ...................................... 21,600 737,208
-----------
SHARES VALUE
-------- -----------
DIVERSIFIED COMMERCIAL SERVICES--1.3%
ABM Industries, Inc. ............................... 17,000 $ 295,970
Deluxe Corp. ....................................... 8,705 359,778
-----------
655,748
-----------
DIVERSIFIED METALS & MINING--3.3%
Peabody Energy Corp. ............................... 13,600 567,256
RTI International Metals, Inc. (b) ................. 61,000 1,029,070
-----------
1,596,326
-----------
DRUG RETAIL--0.1%
Duane Reade, Inc. (b) .............................. 3,900 65,988
-----------
ELECTRIC UTILITIES--4.8%
Northeast Utilities ................................ 29,050 585,938
PNM Resources, Inc. ................................ 26,500 744,650
Unisource Energy Corp. ............................. 28,400 700,344
WPS Resources Corp. ................................ 7,000 323,610
-----------
2,354,542
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--2.9%
C&D Technologies, Inc. ............................. 15,200 291,384
Genlyte Group, Inc. (The) (b) ...................... 4,800 280,224
Penn Engineering & Manufacturing Corp. ............. 21,000 399,630
Regal-Beloit Corp. ................................. 19,600 431,200
-----------
1,402,438
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--1.7%
Vishay Intertechnology, Inc. (b) ................... 35,345 809,400
-----------
ELECTRONIC MANUFACTURING SERVICES--1.2%
CTS Corp. .......................................... 33,200 381,800
KEMET Corp. (b) .................................... 14,800 202,612
-----------
584,412
-----------
HEALTH CARE EQUIPMENT--1.0%
CONMED Corp. (b) ................................... 20,000 476,000
-----------
HEALTH CARE FACILITIES--1.2%
Universal Health Services, Inc. Class B ............ 10,900 585,548
-----------
HOMEBUILDING--1.1%
Pulte Homes, Inc. .................................. 5,900 552,358
-----------
HOTELS, RESORTS & CRUISE LINES--1.2%
Prime Hospitality Corp. (b) ........................ 56,050 571,710
-----------
HOUSEWARES & SPECIALTIES--0.2%
Russ Berrie & Co., Inc. ............................ 2,800 94,920
-----------
INDUSTRIAL MACHINERY--6.7%
Flowserve Corp. (b) ................................ 19,200 400,897
Gardner Denver, Inc. (b) ........................... 24,000 572,880
Harsco Corp. ....................................... 13,300 582,806
JLG Industries, Inc. ............................... 32,600 496,498
Lincoln Electric Holdings, Inc. .................... 18,250 451,505
Reliance Steel & Aluminum Co. ...................... 17,000 564,570
Wolverine Tube, Inc. (b) ........................... 28,800 181,440
-----------
3,250,596
-----------
LEISURE PRODUCTS--0.7%
Brunswick Corp. .................................... 10,500 334,215
-----------
MANAGED HEALTH CARE--1.6%
PacifiCare Health Systems, Inc. (b) ................ 11,200 757,120
-----------
MARINE--0.4%
Alexander & Baldwin, Inc. .......................... 5,500 185,295
-----------
See Notes to Financial Statements
197
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
SHARES VALUE
-------- -----------
MULTI-LINE INSURANCE--0.5%
American National Insurance Co. .................... 2,700 $ 227,799
-----------
OIL & GAS EQUIPMENT & SERVICES--0.9%
SEACOR SMIT, Inc. (b) .............................. 10,200 428,706
-----------
OIL & GAS REFINING, MARKETING & TRANSPORTATION--3.4%
Frontier Oil Corp. ................................. 23,500 404,670
Tesoro Petroleum Corp. (b) ......................... 45,500 662,935
Valero Energy Corp. ................................ 13,100 607,054
-----------
1,674,659
-----------
PAPER PACKAGING--1.2%
Rock-Tenn Co. Class A .............................. 33,000 569,580
-----------
PAPER PRODUCTS--1.0%
Schweitzer-Mauduit International, Inc. ............. 16,125 480,202
-----------
PERSONAL PRODUCTS--0.6%
Nu Skin Enterprises, Inc. Class A .................. 17,200 293,948
-----------
PROPERTY & CASUALTY INSURANCE--0.6%
Harleysville Group, Inc. ........................... 15,400 306,306
-----------
PUBLISHING & PRINTING--1.1%
Reader's Digest Association, Inc. (The) ............ 36,300 532,158
-----------
REGIONAL BANKS--0.4%
Community Bank System, Inc. ........................ 4,400 215,600
-----------
REITS--3.8%
FelCor Lodging Trust, Inc. (b) ..................... 19,500 216,060
Koger Equity, Inc. ................................. 32,300 676,039
Post Properties, Inc. .............................. 16,200 452,304
Summit Properties, Inc. ............................ 20,500 492,410
-----------
1,836,813
-----------
SPECIALTY CHEMICALS--0.6%
Crompton Corp. ..................................... 42,700 306,159
-----------
SPECIALTY STORES--3.7%
Group 1 Automotive, Inc. (b) ....................... 18,800 680,372
Sonic Automotive, Inc. ............................. 22,550 516,846
Zale Corp. (b) ..................................... 11,500 611,800
-----------
1,809,018
-----------
STEEL--4.1%
Commercial Metals Co. .............................. 37,800 1,149,120
GrafTech International Ltd. (b) .................... 46,000 621,000
Quanex Corp. ....................................... 5,000 230,500
-----------
2,000,620
-----------
SHARES VALUE
-------- -----------
TECHNOLOGY DISTRIBUTORS--0.3%
Avnet, Inc. (b) .................................... 7,800 $ 168,948
-----------
THRIFTS & MORTGAGE FINANCE--4.6%
Astoria Financial Corp. ............................ 16,100 598,920
Commercial Federal Corp. ........................... 12,000 320,520
New Century Financial Corp. ........................ 19,600 777,532
Washington Federal, Inc. ........................... 18,632 529,149
-----------
2,226,121
-----------
TOBACCO--1.3%
Universal Corp. .................................... 14,300 631,631
-----------
TRUCKING--2.1%
Arkansas Best Corp. ................................ 18,600 583,854
Dollar Thrifty Automotive Group, Inc. (b) .......... 16,600 430,604
-----------
1,014,458
-----------
TOTAL COMMON STOCKS
(Identified cost $37,155,130) ............................... 44,841,224
-----------
FOREIGN COMMON STOCKS--0.8%
PROPERTY & CASUALTY INSURANCE--0.1%
Aspen Insurance Holdings, Ltd. (Bermuda) (b) ....... 2,700 66,987
-----------
REINSURANCE--0.7%
PartnerRe Ltd. (Bermuda) ........................... 5,900 342,495
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $355,599) .................................. 409,482
-----------
TOTAL LONG TERM INVESTMENTS--92.8%
(Identified cost $37,510,729) ............................... 45,250,706
-----------
SHORT-TERM OBLIGATIONS--7.2%
MONEY MARKET MUTUAL FUNDS--5.0%
SSgA Money Market Fund (0.72% seven day
effective yield) .................................2,422,285 2,422,285
-----------
PAR
VALUE
(000)
-----
REPURCHASE AGREEMENTS--2.2%
State Street Bank & Trust Co. repurchase agreement
0.40% dated 12/31/03 due 1/2/04, repurchase price
$1,069,024 collateralized by U.S. Treasury Bond
13.25%, 5/15/14 market value $1,097,738 .......... $1,069 1,069,000
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $3,491,285) ................................ 3,491,285
-----------
TOTAL INVESTMENTS--100.0%
(Identified cost $41,002,014) ............................... 48,741,991(a)
Other assets and liabilities, net--0.0% ..................... 14,327
-----------
NET ASSETS--100.0% ............................................ $48,756,318
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $9,487,447 and gross
depreciation of $1,708,215 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$40,962,759.
(b) Non-income producing.
See Notes to Financial Statements
198
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $41,002,014) .................................................... $48,741,991
Cash ............................................................................................................ 881
Receivables
Investment securities sold .................................................................................... 145,090
Dividends and interest ........................................................................................ 40,659
Fund shares sold .............................................................................................. 28,228
Prepaid expenses ................................................................................................ 534
-----------
Total assets ................................................................................................ 48,957,383
-----------
LIABILITIES
Payables
Fund shares repurchased ....................................................................................... 63,429
Investment securities purchased ............................................................................... 38,233
Investment advisory fee ....................................................................................... 36,724
Professional fee .............................................................................................. 30,037
Printing fee .................................................................................................. 17,636
Financial agent fee ........................................................................................... 5,457
Trustees' fee ................................................................................................. 3,080
Administration fee ............................................................................................ 2,360
Accrued expenses ................................................................................................ 4,109
-----------
Total liabilities ........................................................................................... 201,065
-----------
NET ASSETS ...................................................................................................... $48,756,318
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $40,742,167
Undistributed net investment income ........................................................................... 6,918
Accumulated net realized gain ................................................................................. 267,256
Net unrealized appreciation ................................................................................... 7,739,977
-----------
NET ASSETS ...................................................................................................... $48,756,318
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 3,285,560
===========
Net asset value and offering price per share .................................................................... $14.84
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 513,301
Interest ...................................................................................................... 14,594
-----------
Total investment income ..................................................................................... 527,895
-----------
EXPENSES
Investment advisory fee ....................................................................................... 384,335
Financial agent fee ........................................................................................... 59,576
Administration fee ............................................................................................ 28,184
Printing ...................................................................................................... 29,855
Professional .................................................................................................. 24,114
Custodian ..................................................................................................... 15,020
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 10,171
-----------
Total expenses .............................................................................................. 557,186
Less expenses borne by investment adviser ................................................................... (81,340)
Custodian fees paid indirectly .............................................................................. (2)
-----------
Net expenses ................................................................................................ 475,844
-----------
NET INVESTMENT INCOME ........................................................................................... 52,051
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 766,686
Net change in unrealized appreciation (depreciation) on investments ........................................... 13,073,600
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 13,840,286
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $13,892,337
===========
See Notes to Financial Statements
199
PHOENIX-SANFORD BERNSTEIN SMALL-CAP VALUE SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ...................................................................... $ 52,051 $ 255,755
Net realized gain (loss) .......................................................................... 766,686 1,673,151
Net change in unrealized appreciation (depreciation) .............................................. 13,073,600 (6,554,536)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....................................... 13,892,337 (4,625,630)
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ............................................................................. -- (164,196)
Net realized short-term gains ..................................................................... (687,128) (904,499)
Net realized long-term gains ...................................................................... (98,214) (572,484)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ......................................... (785,342) (1,641,179)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,359,822 and 3,185,902 shares, respectively) ...................... 16,087,799 39,931,615
Net asset value of shares issued from reinvestment of distributions (57,317 and 156,602 shares,
respectively) ................................................................................... 785,342 1,641,179
Cost of shares repurchased (1,270,197 and 1,629,813 shares, respectively) ......................... (14,191,683) (19,569,748)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ......................................... 2,681,458 22,003,046
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................. 15,788,453 15,736,237
NET ASSETS
Beginning of period ............................................................................... 32,967,865 17,231,628
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $6,918 AND $5,639) ................ $ 48,756,318 $ 32,967,865
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31, FROM INCEPTION
-------------------------------- 11/20/00 TO
2003 2002 2001 12/31/00
------ ------ ------ --------------
Net asset value, beginning of period ......................................... $10.50 $12.08 $10.62 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................................... 0.02 (5) 0.06 0.07 0.03
Net realized and unrealized gain ........................................... 4.57 (1.09) 1.59 0.62
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ......................................... 4.59 (1.03) 1.66 0.65
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income ....................................... -- (0.06) (0.07) (0.03)
Distributions from net realized gains ...................................... (0.25) (0.49) (0.13) --
------ ------ ------ ------
TOTAL DISTRIBUTIONS ...................................................... (0.25) (0.55) (0.20) (0.03)
------ ------ ------ ------
CHANGE IN NET ASSET VALUE .................................................... 4.34 (1.58) 1.46 0.62
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................... $14.84 $10.50 $12.08 $10.62
====== ====== ====== ======
Total return ................................................................. 43.86% (8.54)% 15.76% 6.44%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........................................ $48,756 $32,968 $17,232 $2,692
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(3) ...................................................... 1.30% (4) 1.29%(4) 1.20%(4) 1.20%(1)
Net investment income ...................................................... 0.14% 0.86% 1.12% 2.71%(1)
Portfolio turnover ........................................................... 36% 40% 18% 1%(2)
<FN>
(1) Annualized.
(2) Not annualized.
(3) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net
assets would have been 1.52%, 1.64%, 2.33% and 13.52% for the periods ended December 31, 2003, 2002, 2001 and 2000,
respectively.
(4) 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.
(5) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
200
PHOENIX-SENECA MID-CAP GROWTH SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is capital appreciation. Investors should
note that the risks of investing in mid-size company stocks may include
relatively low trading volumes, a greater degree of change in earnings, and
greater short-term volatility.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 28.83%. For
the same period, the Russell MidCap(R) Growth Index 1 returned 42.71% and the
S&P 500(R) Index 2 returned 28.71%. All performance figures assume reinvestment
of distributions. Past performance is not indicative of future results and
current performance may be higher or lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: The equity market rally of 2003 was led by companies with no current earnings
and the worst quality balance sheets. The most speculative stocks far outpaced
more solid companies. Low interest rates allowed marginal companies to obtain
financing and prolong their life-support. Together, these aberrations severed
the strongest, most reliable correlation in finance: stock prices to corporate
earnings. The historic correlation between individual company earnings and stock
prices has averaged approximately 90% for the forty or so years prior to 2000,
broke down over the last three years, and actually turned negative in 2003.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Our portfolio was up handsomely in 2003, but lagged its benchmark index,
largely because we did not invest in the most speculative, low quality companies
which led the performance pack, particularly in the mid-cap universe.
In 2003, stock selection in the health care sector contributed the most to
performance relative to the Russell MidCap(R) Growth index. The portfolio was
slightly underweight in the sector, but our stocks outperformed those within the
index. Two of our top ten contributing stocks for the year were Gilead Sciences
and Biovail Corp. Both of these companies benefited from accelerating revenues
due to their introductions of newly approved drugs.
Our overweight in the information technology sector benefited the
portfolio's performance in 2003, as it was a top-performing sector of the
benchmark index. While the portfolio's technology stocks were up significantly
for the year, they lagged those of the index. Seven of the portfolio's top-ten
contributing stocks in 2003 were information technology companies, including
Network Appliances, Yahoo, Altera, Jabil Circuit, KLA-Tencor, Sanmina-SCI and
Broadcom. Four of the worst performers in the portfolio were also part of this
sector, but detracted only a fraction of what the top performers contributed.
Consumer discretionary stocks were the biggest detractors from performance
for the year. While our stock selection for the portfolio produced double-digit
positive returns, the index's stocks outperformed those of our portfolio. Best
Buy and Amazon.com were both contributors, but were sold early in the year on
valuation concerns. In the latter part of the year, particularly in the fourth
quarter, our lack of exposure to broadcasting & cable and casino & gaming, which
were the biggest contributors to the index's return, hurt us. The competitive
pricing environment and slower subscriber growth influenced our underweight
stance in the cable industry. Casino & gaming companies typically have volatile
earnings and are currently facing a questionable equipment capital-spending
environment.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We see no rationale for abandoning quality companies with current earnings
and good prospects. We believe the long-term correlation between earnings and
stock prices will inevitably reassert itself. In 2004, in fact, in our opinion,
earnings should take center stage. Without the support of declining interest
rates, we believe stock prices should be especially sensitive to actual earnings
in the year ahead. We will stay the course and maintain the investment
discipline that has produced better than market returns for more than a decade
at Seneca Capital.
Just three months ago deflation fears gripped investors' imaginations. Now
global economic recovery seems almost certain. Business spending is increasing.
Employment has picked up and the stimulus from tax cuts should continue to buoy
consumer spending. Corporate earnings could again surprise on the upside next
year.
201
PHOENIX-SENECA MID-CAP GROWTH SERIES
Valuations in the stock market are not troublesome, given what is likely an
understated earnings picture for 2004 and a benign inflation setting. In
addition, stocks now provide compelling competition for cash alternatives: the
stock dividend yield is above short-term rates for the first time in forty
years. The reduction of tax rates on dividends and capital gains further adds to
the appeal of stocks.
Finally, corporate earnings are not only robust but are also high quality.
The gap between "operating" and "reported" earnings has narrowed, suggesting
that accounting shenanigans are largely yesterday's news. Harsh treatment of
miscreant executives and tough new regulations enable investors to regard
reported profits with renewed confidence. This confidence seems to be overcoming
investor concerns over the transgressions in the mutual fund industry. Despite
widespread allegations of wrongdoing by fund companies, investors continue to
invest in stocks.
For all of these reasons, we expect another good year for equity investors
in 2004.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
3/2/98 TO
1 YEAR 5 YEARS 12/31/03
- --------------------------------------------------------------------------------
Mid-Cap Growth Series 28.83% 1.48% 4.74%
- --------------------------------------------------------------------------------
Russell MidCap(R) Growth Index 1 42.71% 2.01% 3.37%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 2.52%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/2/98 (inception of
the series). Returns shown include the reinvestment of all distributions at net
asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Mid-Cap Russell MidCap(R)
Growth Series Growth Index 1 S&P 500(R) Index 2
3/2/98 $10,000 $10,000 $10,000
12/31/98 $12,175 $10,988 $11,895
12/31/99 $17,729 $16,624 $14,409
12/29/00 $20,166 $14,671 $13,086
12/31/01 $15,068 $11,714 $11,532
12/31/02 $10,171 $ 8,504 $ 8,983
12/31/03 $13,104 $12,136 $11,562
1 The Russell MidCap(R) Growth Index is a market capitalization-weighted index
of medium-capitalization, growth-oriented stocks of U.S. companies. The index
is calculated on a total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
202
PHOENIX-SENECA MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--96.7%
APPAREL RETAIL--4.0%
Chico's FAS, Inc. (b) .............................. 24,400 $ 901,580
TJX Cos., Inc. (The) ............................... 70,800 1,561,140
-----------
2,462,720
-----------
BIOTECHNOLOGY--2.9%
Gilead Sciences, Inc. (b) .......................... 30,350 1,764,549
-----------
BREWERS--1.9%
Coors (Adolph) Co. Class B ......................... 20,870 1,170,807
-----------
COMMUNICATIONS EQUIPMENT--4.7%
Comverse Technology, Inc. (b) ...................... 48,370 850,828
Corning, Inc. (b) .................................. 38,650 403,120
Foundry Networks, Inc. (b) ......................... 58,720 1,606,579
-----------
2,860,527
-----------
COMPUTER STORAGE & PERIPHERALS--2.5%
Network Appliance, Inc. (b) ........................ 74,690 1,533,386
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--3.3%
PACCAR, Inc. ....................................... 23,600 2,008,832
-----------
CONSUMER FINANCE--2.5%
Providian Financial Corp. (b) ...................... 132,040 1,536,945
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--2.6%
Symbol Technologies, Inc. .......................... 95,320 1,609,955
-----------
ELECTRONIC MANUFACTURING SERVICES--5.2%
Jabil Circuit, Inc. (b) ............................ 54,640 1,546,312
Sanmina-SCI Corp. (b) .............................. 129,480 1,632,743
-----------
3,179,055
-----------
EMPLOYMENT SERVICES--2.5%
Manpower, Inc. ..................................... 33,050 1,555,994
-----------
HEALTH CARE EQUIPMENT--2.5%
Zimmer Holdings, Inc. (b) .......................... 21,510 1,514,304
-----------
HEALTH CARE FACILITIES--2.5%
Manor Care, Inc. ................................... 44,870 1,551,156
-----------
HOME FURNISHINGS--2.4%
Mohawk Industries, Inc. (b) ........................ 20,870 1,472,170
-----------
INDUSTRIAL MACHINERY--5.8%
Ingersoll-Rand Co. Class A ......................... 30,250 2,053,370
SPX Corp. (b) ...................................... 25,970 1,527,296
-----------
3,580,666
-----------
INTERNET SOFTWARE & SERVICES--2.5%
VeriSign, Inc. (b) ................................. 93,630 1,526,169
-----------
PHARMACEUTICALS--7.4%
Barr Pharmaceuticals, Inc. (b) ..................... 22,170 1,705,981
Pharmaceutical Resources, Inc. (b) ................. 20,510 1,336,227
Watson Pharmaceuticals, Inc. (b) ................... 32,690 1,503,740
-----------
4,545,948
-----------
PUBLISHING & PRINTING--2.5%
Belo Corp. Class A ................................. 54,770 1,552,182
-----------
SHARES VALUE
------ -----------
RESTAURANTS--4.3%
Starbucks Corp. (b) ................................ 39,610 $ 1,309,506
Yum! Brands, Inc. (b) .............................. 38,790 1,334,376
-----------
2,643,882
-----------
SEMICONDUCTOR EQUIPMENT--4.6%
KLA-Tencor Corp. (b) ............................... 26,960 1,581,743
Teradyne, Inc. (b) ................................. 48,500 1,234,325
-----------
2,816,068
-----------
SEMICONDUCTORS--10.3%
Cypress Semiconductor Corp. (b) .................... 90,200 1,926,672
Fairchild Semiconductor International, Inc. (b) .... 76,640 1,913,701
PMC-Sierra, Inc. (b) ............................... 67,790 1,365,968
RF Micro Devices, Inc. (b) ......................... 106,750 1,072,838
-----------
6,279,179
-----------
SOFT DRINKS--2.7%
Coca-Cola Enterprises, Inc. ........................ 74,700 1,633,689
-----------
SPECIALTY CHEMICALS--2.7%
Rohm and Haas Co. .................................. 38,430 1,641,345
-----------
SPECIALTY STORES--4.7%
Staples, Inc. (b) .................................. 47,840 1,306,032
Williams-Sonoma, Inc. (b) .......................... 45,150 1,569,865
-----------
2,875,897
-----------
SYSTEMS SOFTWARE--4.8%
Adobe Systems, Inc. ................................ 35,200 1,383,360
Symantec Corp. (b) ................................. 45,420 1,573,803
-----------
2,957,163
-----------
TECHNOLOGY DISTRIBUTORS--2.4%
CDW Corp. .......................................... 24,910 1,438,802
-----------
THRIFTS & MORTGAGE FINANCE--2.5%
New York Community Bancorp, Inc. ................... 40,413 1,537,715
-----------
TOTAL COMMON STOCKS
(Identified cost $52,814,328) ............................... 59,249,105
-----------
TOTAL LONG TERM INVESTMENTS--96.7%
(Identified cost $52,814,328) ............................... 59,249,105
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
---------- ------
SHORT-TERM OBLIGATIONS--5.3%
FEDERAL AGENCY SECURITIES--1.9%
FHLB Discount Note 0.75%, 1/2/04 ................... $1,165 1,164,975
-----------
COMMERCIAL PAPER--3.4%
Merrill Lynch & Co. 1.02%, 1/6/04 ...... A-1+ 2,105 2,104,702
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $3,269,677) ................................ 3,269,677
-----------
TOTAL INVESTMENTS--102.0%
(Identified cost $56,084,005) ............................... 62,518,782(a)
Other assets and liabilities, net--(2.0)% ................... (1,224,688)
-----------
NET ASSETS--100.0% ............................................ $61,294,094
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $6,907,105 and gross
depreciation of $472,328 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$56,084,005.
(b) Non-income producing.
See Notes to Financial Statements
203
PHOENIX-SENECA MID-CAP GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $56,084,005) .................................................... $ 62,518,782
Cash ............................................................................................................ 4,117
Receivables
Dividends and interest ........................................................................................ 28,320
Fund shares sold .............................................................................................. 26,866
Prepaid expenses ................................................................................................ 844
------------
Total assets ................................................................................................ 62,578,929
------------
LIABILITIES
Payables
Investment securities purchased ............................................................................... 904,171
Fund shares repurchased ....................................................................................... 261,800
Investment advisory fee ....................................................................................... 50,459
Financial agent fee ........................................................................................... 6,370
Administration fee ............................................................................................ 3,965
Trustees' fee ................................................................................................. 2,360
Accrued expenses .............................................................................................. 55,710
------------
Total liabilities ........................................................................................... 1,284,835
------------
NET ASSETS ...................................................................................................... $ 61,294,094
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $ 91,262,366
Accumulated net realized loss ................................................................................. (36,403,049)
Net unrealized appreciation ................................................................................... 6,434,777
------------
NET ASSETS ...................................................................................................... $ 61,294,094
============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 5,270,953
============
Net asset value and offering price per share .................................................................... $11.63
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 229,626
Interest ...................................................................................................... 33,437
-----------
Total investment income ..................................................................................... 263,063
-----------
EXPENSES
Investment advisory fee ....................................................................................... 435,081
Financial agent fee ........................................................................................... 70,894
Administration fee ............................................................................................ 41,877
Printing ...................................................................................................... 37,508
Custodian ..................................................................................................... 14,985
Professional .................................................................................................. 14,483
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 10,843
-----------
Total expenses .............................................................................................. 631,602
Less expenses borne by investment adviser ................................................................... (6,172)
-----------
Net expenses ................................................................................................ 625,430
-----------
NET INVESTMENT LOSS ............................................................................................. (362,367)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 2,988,734
Net change in unrealized appreciation (depreciation) on investments ........................................... 10,921,098
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 13,909,832
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $13,547,465
===========
See Notes to Financial Statements
204
PHOENIX-SENECA MID-CAP GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) ................................................................... $ (362,367) $ (379,733)
Net realized gain (loss) ....................................................................... 2,988,734 (16,914,317)
Net change in unrealized appreciation (depreciation) ........................................... 10,921,098 (6,963,041)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................... 13,547,465 (24,257,091)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,274,710 and 2,059,083 shares, respectively) ................... 13,252,422 24,036,170
Cost of shares repurchased (1,338,149 and 1,876,924 shares, respectively) ...................... (13,655,142) (20,524,588)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ...................................... (402,720) 3,511,582
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS .......................................................... 13,144,745 (20,745,509)
NET ASSETS
Beginning of period ............................................................................ 48,149,349 68,894,858
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ....... $ 61,294,094 $ 48,149,349
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
---------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ...................................... $ 9.03 $13.37 $17.90 $17.28 $12.16
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(2) ......................................... (0.07) (0.07) (0.08) (0.06) --
Net realized and unrealized gain (loss) ................................. 2.67 (4.27) (4.45) 2.51 5.54
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ...................................... 2.60 (4.34) (4.53) 2.45 5.54
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains ................................... -- -- -- (1.83) (0.42)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................................... -- -- -- (1.83) (0.42)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ................................................. 2.60 (4.34) (4.53) 0.62 5.12
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................ $11.63 $ 9.03 $13.37 $17.90 $17.28
====== ====== ====== ====== ======
Total return .............................................................. 28.83% (32.50)% (25.28)% 13.75% 45.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ..................................... $61,294 $48,149 $68,895 $71,015 $21,857
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ................................................... 1.15% 1.11%(3) 1.05%(3) 1.05% 1.05%
Net investment income (loss) ............................................ (0.67)% (0.62)% (0.52)% (0.28)% (0.33)%
Portfolio turnover ........................................................ 174% 128% 137% 97% 169%
<FN>
(1) If the investment adviser had not waived fees and reimbursed expenses, the ratio of operating expenses to average net assets
would have been 1.16%, 1.14%, 1.10%, 1.19% and 2.04% for the periods ended December 31, 2003, 2002, 2001, 2000 and 1999,
respectively.
(2) Computed using average shares outstanding.
(3) 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.
</FN>
See Notes to Financial Statements
205
PHOENIX-SENECA STRATEGIC THEME SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series' investment objective is long-term capital appreciation.
Q: HOW DID THE SERIES PERFORM DURING THE PAST 12 MONTHS ENDED DECEMBER 31, 2003?
A: Over the fiscal year ended December 31, 2003, the series returned 37.26%. For
the same period, the Russell 1000(R) Growth Index 1 returned 29.75% and the S&P
500(R) Index 2 returned 28.71%. All performance figures assume reinvestment of
distributions. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown above.
Q: HOW WOULD YOU CHARACTERIZE THE MARKET ENVIRONMENT DURING THE RECENT FISCAL
YEAR?
A: The equity market rally of 2003 was led by companies with no current earnings
and the worst quality balance sheets. The most speculative stocks far outpaced
more solid companies. Low interest rates allowed marginal companies to obtain
financing and prolong their life-support. Together, these aberrations severed
the strongest, most reliable correlation in finance: stock prices to corporate
earnings. The historic correlation between individual company earnings and stock
prices has averaged approximately 90% for the forty or so years prior to 2000,
broke down over the last three years, and actually turned negative in 2003.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Our portfolio was up handsomely in 2003 and outperformed its Russell 1000(R)
Growth Index benchmark. Stock selection in the health care and Information
technology sectors contributed substantially to our performance for the year.
While underweight the health care sector, our stocks outperformed those within
the benchmark by a significant margin. Gilead Sciences led the way as the
biggest contributor from health care. The company benefited from good earnings
and anticipated approval of new drugs in the first half of the year. The
portfolio was overweight in information technology, the top-performing sector
within the benchmark. Intel Corp. made the portfolio's single largest
contribution to performance for the year. An emphasis on semiconductors,
equipment and hardware stocks and avoidance of services and data processors
particularly in the second half of the year helped our performance.
The biggest detractor to performance came from the Consumer Discretionary
sector, in which we were underweight in 2003. Comcast and Autozone were the two
largest detractors from this area. Comcast was sold on our concern that weak
high speed data pricing and lower than expected subscriber growth could limit
its near term price appreciation. Additionally, the company gave free cash flow
guidance for 2004 that was below our estimates. Autozone was sold on concern its
sales might come in at the low-end of expectations, putting earnings forecasts
at risk. Ebay (one of our top performing stocks for the year) was sold on
valuation concerns, yet continued to run up in price after its sale from the
portfolio.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: Just three months ago deflation fears gripped investors' imaginations. Now
global economic recovery seems almost certain. Business spending is increasing.
Employment has picked up and the stimulus from tax cuts should continue to buoy
consumer spending. Corporate earnings could again surprise on the upside next
year.
Valuations in the stock market are not troublesome, given what is likely an
understated earnings picture for 2004 and a benign inflation setting. In
addition, stocks now provide compelling competition for cash alternatives: the
stock dividend yield is above short-term rates for the first time in forty
years. The reduction of tax rates on dividends and capital gains further adds to
the appeal of stocks.
206
PHOENIX-SENECA STRATEGIC THEME SERIES
Finally, corporate earnings are not only robust but are also high quality.
The gap between "operating" and "reported" earnings has narrowed, suggesting
that accounting shenanigans are largely yesterday's news. Harsh treatment of
miscreant executives and tough new regulations enable investors to regard
reported profits with renewed confidence. This confidence seems to be overcoming
investor concerns over the transgressions in the mutual fund industry. Despite
widespread allegations of wrongdoing by fund companies, investors continue to
invest in stocks.
For all of these reasons, we expect another good year for equity investors
in 2004.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
1/29/96 TO
1 YEAR 5 YEAR 12/31/03
- --------------------------------------------------------------------------------
Strategic Theme Series 37.26% (2.31)% 6.64%
- --------------------------------------------------------------------------------
Russell 1000(R) Growth Index 1 29.75% (5.11)% 6.86%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% (0.57)% 9.32%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 1/29/96 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Strategic Theme Russell 1000(R)
Series Growth Index 1 S&P 500(R) Index 2
1/29/96 $10,000 $10,000 $10,000
12/31/96 $11,033 $12,150 $12,144
12/31/97 $12,927 $15,855 $16,197
12/31/98 $18,704 $21,991 $20,855
12/31/99 $28,987 $29,284 $25,263
12/29/00 $25,665 $22,717 $22,942
12/31/01 $18,644 $18,078 $20,218
12/31/02 $12,123 $13,037 $15,750
12/31/03 $16,640 $16,915 $20,272
1 The Russell 1000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the 1,000 largest companies in the Russell Universe,
which comprises the 3,000 largest U.S. companies. The index is calculated on a
total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
207
PHOENIX-SENECA STRATEGIC THEME SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--93.2%
AIR FREIGHT & COURIERS--4.1%
United Parcel Service, Inc. Class B ................ 49,330 $ 3,677,551
-----------
ALUMINUM--3.7%
Alcoa, Inc. ........................................ 85,600 3,252,800
-----------
BIOTECHNOLOGY--5.5%
Amgen, Inc. (b) .................................... 43,030 2,659,254
Gilead Sciences, Inc. (b) .......................... 37,600 2,186,064
-----------
4,845,318
-----------
COMMUNICATIONS EQUIPMENT--5.1%
Cisco Systems, Inc. (b) ............................ 144,230 3,503,347
Corning, Inc. (b) .................................. 98,970 1,032,257
-----------
4,535,604
-----------
COMPUTER HARDWARE--5.9%
Dell, Inc. (b) ..................................... 64,620 2,194,495
International Business Machines Corp. .............. 32,500 3,012,100
-----------
5,206,595
-----------
COMPUTER STORAGE & PERIPHERALS--3.9%
EMC Corp. (b) ...................................... 265,120 3,425,350
-----------
CONSTRUCTION, FARM MACHINERY & HEAVY TRUCKS--6.5%
Caterpillar, Inc. .................................. 31,700 2,631,734
Deere & Co. ........................................ 48,620 3,162,731
-----------
5,794,465
-----------
CONSUMER FINANCE--3.5%
American Express Co. ............................... 63,500 3,062,605
-----------
DATA PROCESSING & OUTSOURCED SERVICES--3.0%
Automatic Data Processing, Inc. .................... 67,800 2,685,558
-----------
DIVERSIFIED CHEMICALS--3.2%
Dow Chemical Co. (The) ............................. 68,880 2,863,342
-----------
HEALTH CARE EQUIPMENT--6.4%
Boston Scientific Corp. (b) ........................ 73,800 2,712,888
Medtronic, Inc. .................................... 61,720 3,000,209
-----------
5,713,097
-----------
HOUSEHOLD PRODUCTS--3.5%
Procter & Gamble Co. (The) ......................... 31,000 3,096,280
-----------
INDUSTRIAL CONGLOMERATES--3.6%
3M Co. ............................................. 37,100 3,154,613
-----------
INVESTMENT BANKING & BROKERAGE--3.5%
Goldman Sachs Group, Inc. (The) .................... 31,100 3,070,503
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--3.5%
Citigroup, Inc. .................................... 63,940 3,103,648
-----------
SHARES VALUE
------ -----------
PHARMACEUTICALS--7.2%
Forest Laboratories, Inc. (b) ...................... 47,610 $ 2,942,298
Pfizer, Inc. ....................................... 98,400 3,476,472
-----------
6,418,770
-----------
SEMICONDUCTOR EQUIPMENT--3.3%
Applied Materials, Inc. (b) ........................ 128,870 2,893,132
-----------
SEMICONDUCTORS--7.1%
Intel Corp. ........................................ 112,470 3,621,534
Linear Technology Corp. ............................ 64,170 2,699,632
-----------
6,321,166
-----------
SOFT DRINKS--3.0%
Coca-Cola Co. (The) ................................ 52,400 2,659,300
-----------
SYSTEMS SOFTWARE--7.7%
Microsoft Corp. .................................... 135,030 3,718,726
VERITAS Software Corp. (b) ......................... 84,400 3,136,304
-----------
6,855,030
-----------
TOTAL COMMON STOCKS
(Identified cost $69,180,493) ............................... 82,634,727
-----------
FOREIGN COMMON STOCKS--3.4%
COMMUNICATIONS EQUIPMENT--3.4%
Nokia Oyj ADR (Finland) ............................ 179,800 3,056,600
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $2,969,535) ................................ 3,056,600
-----------
TOTAL LONG TERM INVESTMENTS--96.6%
(Identified cost $72,150,028) ............................... 85,691,327
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
----------- -----
SHORT-TERM OBLIGATIONS--7.7%
FEDERAL AGENCY SECURITIES--3.1%
Freddie Mac 1.01%, 1/15/04 ........................ $2,740 2,738,923
-----------
COMMERCIAL PAPER--4.6%
Emerson Electric Co. 0.95%, 1/2/04 ...... A-1 2,565 2,564,932
Deluxe Corp. 1.07%, 1/7/04 .............. A-1 1,545 1,544,725
-----------
4,109,657
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $6,848,580) ................................ 6,848,580
-----------
TOTAL INVESTMENTS--104.3%
(Identified cost $78,998,608) ............................... 92,539,907(a)
Other assets and liabilities, net--(4.3)% ................... (3,828,053)
-----------
NET ASSETS--100.0% ............................................ $88,711,854
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $13,594,439 and gross
depreciation of $53,140 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$78,998,608.
(b) Non-income producing.
See Notes to Financial Statements
208
PHOENIX-SENECA STRATEGIC THEME SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $78,998,608) .................................................... $ 92,539,907
Receivables
Dividends and interest ........................................................................................ 56,928
Fund shares sold .............................................................................................. 20,783
Prepaid expenses ................................................................................................ 1,195
-------------
Total assets ................................................................................................ 92,618,813
-------------
LIABILITIES
Cash overdraft .................................................................................................. 293
Payables
Investment securities purchased ............................................................................... 3,511,529
Fund shares repurchased ....................................................................................... 261,959
Investment advisory fee ....................................................................................... 55,814
Financial agent fee ........................................................................................... 7,712
Administration fee ............................................................................................ 5,730
Trustees' fee ................................................................................................. 2,360
Accrued expenses ................................................................................................ 61,562
-------------
Total liabilities ........................................................................................... 3,906,959
-------------
NET ASSETS ...................................................................................................... $ 88,711,854
=============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $ 175,970,945
Accumulated net realized loss ................................................................................. (100,800,390)
Net unrealized appreciation ................................................................................... 13,541,299
-------------
NET ASSETS ...................................................................................................... $ 88,711,854
=============
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 9,058,658
=============
Net asset value and offering price per share .................................................................... $9.79
=====
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 565,866
Interest ...................................................................................................... 40,921
Foreign taxes withheld ........................................................................................ (6,752)
-----------
Total investment income ..................................................................................... 600,035
-----------
EXPENSES
Investment advisory fee ....................................................................................... 588,818
Financial agent fee ........................................................................................... 85,944
Administration fee ............................................................................................ 60,452
Printing ...................................................................................................... 42,290
Professional .................................................................................................. 18,086
Custodian ..................................................................................................... 14,290
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 11,663
-----------
Total expenses .............................................................................................. 827,474
Custodian fees paid indirectly .............................................................................. (115)
-----------
Net expenses ................................................................................................ 827,359
-----------
NET INVESTMENT LOSS ............................................................................................. (227,324)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 2,771,391
Net change in unrealized appreciation (depreciation) on investments ........................................... 22,097,657
-----------
NET GAIN ON INVESTMENTS ......................................................................................... 24,869,048
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $24,641,724
===========
See Notes to Financial Statements
209
PHOENIX-SENECA STRATEGIC THEME SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
12/31/03 12/31/02
------------ ------------
FROM OPERATIONS
Net investment income (loss) .................................................................. $ (227,324) $ (413,872)
Net realized gain (loss) ...................................................................... 2,771,391 (27,096,470)
Net change in unrealized appreciation (depreciation) .......................................... 22,097,657 (17,453,053)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ................................... 24,641,724 (44,963,395)
------------ ------------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,510,838 and 1,647,667 shares, respectively) .................. 12,676,869 14,762,286
Cost of shares repurchased (2,468,624 and 4,398,624 shares, respectively) ..................... (20,070,992) (38,430,859)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ..................................... (7,394,123) (23,668,573)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ......................................................... 17,247,601 (68,631,968)
NET ASSETS
Beginning of period ........................................................................... 71,464,253 140,096,221
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND
$0, RESPECTIVELY) ........................................................................... $ 88,711,854 $ 71,464,253
============ ============
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
YEAR ENDED DECEMBER 31,
---------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
Net asset value, beginning of period ...................................... $ 7.13 $10.97 $15.52 $20.21 $15.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ............................................ (0.02)(2) (0.04)(2) (0.04)(2) (0.07)(2) --
Net realized and unrealized gain (loss) ................................. 2.68 (3.80) (4.15) (2.20) 8.19
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ...................................... 2.66 (3.84) (4.19) (2.27) 8.19
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains ................................... -- -- (0.36) (2.42) (2.91)
Tax return of capital ................................................... -- -- -- -- (0.47)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................................... -- -- (0.36) (2.42) (3.38)
------ ------ ------ ------ ------
CHANGE IN NET ASSET VALUE ................................................. 2.66 (3.84) (4.55) (4.69) 4.81
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............................................ $ 9.79 $ 7.13 $10.97 $15.52 $20.21
====== ====== ====== ====== ======
Total return .............................................................. 37.26% (34.98)% (27.36)% (11.46)% 54.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ..................................... $88,712 $71,464 $140,096 $203,517 $177,351
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses ...................................................... 1.05%(1) 1.00%(1) 0.96%(1) 0.92% 0.97%
Net investment income (loss) ............................................ (0.29)% (0.41)% (0.30)% (0.32)% (0.18)%
Portfolio turnover ........................................................ 101% 128% 162% 118% 150%
<FN>
(1) The ratio of operating expenses to average net assets excludes the effect of expense offsets from custodian fees; if expense
offsets were included, the ratio would not significantly differ.
(2) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
210
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
A DISCUSSION WITH THE SERIES' PORTFOLIO MANAGEMENT TEAM
Q: WHAT IS THE SERIES' INVESTMENT OBJECTIVE?
A: The series seeks long-term capital growth.
Q: HOW DID THE SERIES PERFORM OVER THE LAST FISCAL YEAR?
A: For the fiscal year ended December 31, 2003, the series outperformed both its
style specific benchmark, the Russell 2000(R) Growth Index 1, returning 53.38%
versus 48.54% for the Russell 2000(R) Growth Index 1 and the broad based S&P
500(R) Index 2, returning 28.71%. All performance figures assume reinvestment of
distribution. Past performance is not indicative of future results and current
performance may be higher or lower than the performance shown.
Q: HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: Following three years of negative returns, equity markets enjoyed their first
positive year since 1999. Economic recovery took hold, fueled by low interest
rates, low inflation and rising corporate profits, increasing investor
confidence in equity markets. During the year, investors remained steadfast,
shaking off first-quarter weakness brought on by fears over military action in
Iraq and various scandals, including the Freddie Mac accounting probe, New York
State Attorney General Eliot Spitzer's inquiry into market timing at several
prominent mutual fund companies, and the NYSE pay scandal. In this environment,
higher-beta stocks, which are more volatile than the market and smaller-cap
issues, posted particularly strong gains. Broad market gains continued
throughout the fourth quarter as all major sectors posted positive overall
returns, small-cap stocks outperformed large-cap stocks, driving market returns
higher. Historically, small-caps have outperformed large-cap stocks in the
initial phases of economic recovery.
Q: WHAT FACTORS AFFECTED THE SERIES' PERFORMANCE?
A: Over the course of 2003, returns benefited from strong stock selection in the
consumer discretionary, financial services and technology sectors. Our
overweight in consumer discretionary, along with our underweight in technology,
which fell out of our bottom-up portfolio construction process, created a modest
drag on returns. Within consumer discretionary, our education services and
gaming holdings drove the sector returns higher, aiding relative return
comparisons. Semiconductor exposure in both technology and producer durables
also contributed to gains. The industry has benefited from increased demand for
consumer electronics devices resulting in a recovery in semiconductor industry.
Earnings at these companies have accelerated rapidly, given their leverage to
semiconductor demand.
Q: WHAT IS YOUR CURRENT OUTLOOK?
A: We believe that small-cap stocks will benefit, albeit to a lesser extent than
what occurred in 2003, as economic recovery continues to unfold. Since we build
our portfolio from the bottom-up, on a stock-by-stock basis, macro economic
forecasts are not essential to our success. Given the appreciation in small-cap
growth stocks over the last year, we feel that it is essential that we remain
disciplined within our portfolio construction process in order to provide strong
returns for our clients. We continue to find attractive investment candidates in
the semiconductor and semiconductor-related areas as the supply/demand dynamics
and enormous operating leverage are contributing to the fundamental strength of
many companies. As a result, we are heavily invested in these segments.
Additionally we feel our exposure in education services and gaming will be the
primary drivers in the consumer discretionary sector. While sector weightings
are a fall-out of our bottom-up stock selection process, we enter the new year
overweight in consumer discretionary (albeit less so than at the end of the
third quarter) and in the combined producer durables/technology sectors. In
contrast, we are underweight in the health care and materials sectors. Stocks of
small or small emerging companies may have less liquidity than those of larger,
established companies and may be subject to greater price volatility and risk
than the overall stock market.
JANUARY 1, 2004
The preceding information is the opinion of portfolio management. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
1 The Russell 2000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the smallest 2,000 companies in the Russell
Universe, which comprises the 3,000 largest U.S. companies. The index is
calculated on a total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
211
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/03
FROM
INCEPTION
8/12/02 TO
1 YEAR 12/31/03
- --------------------------------------------------------------------------------
Research Small-Cap Growth Series 53.38% 36.98%
- --------------------------------------------------------------------------------
Russell 2000(R) Growth Index 1 48.54% 33.91%
- --------------------------------------------------------------------------------
S&P 500(R) Index 2 28.71% 18.29%
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 8/12/02 (inception
of the series). Returns shown include the reinvestment of all distributions at
net asset value, and the change in share price for the stated period. Returns
indicate past performance, which is not indicative of future performance.
Investment return and net asset value will fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Please visit
PhoenixWM.com for performance data current to the most recent month-end. Foreign
investing involves special risks such as currency fluctuation and less public
disclosure, as well as economic and political risks.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GROWTH OF $10,000 PERIODS ENDING 12/31
Research Small-Cap Russell 2000(R)
Growth Series Growth Index 1 S&P 500(R) Index 2
8/12/02 $10,000 $10,000 $10,000
12/31/02 $10,085 $10,092 $9,806
12/31/03 $15,468 $14,990 $12,622
1 The Russell 2000(R) Growth Index is a market capitalization-weighted index of
growth-oriented stocks of the smallest 2,000 companies in the Russell
Universe, which comprises the 3,000 largest U.S. companies. The index is
calculated on a total-return basis with dividends reinvested.
2 The S&P 500(R) Index is an unmanaged, commonly used measure of stock market
total return performance and is provided for general comparative purposes.
The indexes are not available for direct investment; therefore their
performance does not reflect the expenses associated with the active
management of an actual portfolio.
212
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
SHARES VALUE
------ -----------
COMMON STOCKS--94.5%
APPLICATION SOFTWARE--3.6%
Autodesk, Inc. ..................................... 3,564 $ 87,603
Epicor Software Corp. (b) .......................... 6,200 79,112
Kronos, Inc. (b) ................................... 5,090 201,615
Quest Software, Inc. (b) ........................... 7,235 102,737
-----------
471,067
-----------
ASSET MANAGEMENT & CUSTODY BANKS--1.2%
Affiliated Managers Group, Inc. (b) ................ 2,149 149,549
-----------
BIOTECHNOLOGY--2.8%
Alexion Pharmaceuticals, Inc. (b) .................. 3,048 51,877
Alkermes, Inc. (b) ................................. 7,668 103,518
Martek Bioscience Corp. (b) ........................ 1,334 86,670
Neurocrine Biosciences, Inc. (b) ................... 900 49,086
Telik, Inc. (b) .................................... 3,300 75,933
-----------
367,084
-----------
BROADCASTING & CABLE TV--0.9%
Entravision Communications Corp. Class A (b) ....... 10,887 120,846
-----------
CASINOS & GAMING--8.1%
Alliance Gaming Corp. (b) .......................... 15,943 392,995
Boyd Gaming Corp. .................................. 14,049 226,751
International Game Technology ...................... 2,702 96,461
Mandalay Resort Group .............................. 2,669 119,358
Shuffle Master, Inc. (b) ........................... 3,041 105,280
Station Casinos, Inc. .............................. 3,907 119,671
-----------
1,060,516
-----------
COMMUNICATIONS EQUIPMENT--5.8%
Anaren, Inc. (b) ................................... 6,625 93,545
Avocent Corp. (b) .................................. 6,616 241,616
Polycom, Inc. (b) .................................. 14,542 283,860
SpectraLink Corp. .................................. 7,131 136,701
-----------
755,722
-----------
COMPUTER STORAGE & PERIPHERALS--1.6%
Mobility Electronics, Inc. (b) ..................... 14,400 128,751
SanDisk Corp. (b) .................................. 1,331 81,377
-----------
210,128
-----------
CONSUMER ELECTRONICS--2.4%
Harman International Industries, Inc. .............. 4,256 314,859
-----------
CONSUMER FINANCE--0.6%
Nelnet, Inc. Class A (b) ........................... 3,200 71,680
-----------
DIVERSIFIED COMMERCIAL SERVICES--5.8%
Career Education Corp. (b) ......................... 5,338 213,894
Corinthian Colleges, Inc. (b) ...................... 1,700 94,452
CoStar Group, Inc. (b) ............................. 1,000 41,680
Kroll, Inc. (b) .................................... 7,703 200,278
Sylvan Learning Systems, Inc. (b) .................. 6,907 198,852
-----------
749,156
-----------
ELECTRONIC EQUIPMENT MANUFACTURERS--1.2%
Aeroflex, Inc. (b) ................................. 13,676 159,872
-----------
ELECTRONIC MANUFACTURING SERVICES--0.9%
KEMET Corp. (b) .................................... 8,183 112,025
-----------
GENERAL MERCHANDISE STORES--0.9%
99 Cents Only Stores (b) ........................... 4,300 117,089
-----------
SHARES VALUE
------ -----------
HEALTH CARE EQUIPMENT--2.4%
Respironics, Inc. (b) .............................. 4,979 $ 224,503
Zoll Medical Corp. (b) ............................. 2,373 84,194
-----------
308,697
-----------
HEALTH CARE FACILITIES--0.9%
United Surgical Partners International, Inc. (b) ... 3,580 119,858
-----------
HEALTH CARE SERVICES--4.9%
Advisory Board Co. (The) (b) ....................... 3,541 123,616
Amedisys, Inc. (b) (c) (d) (e) ..................... 6,100 80,454
Caremark Rx, Inc. (b) .............................. 6,880 174,271
Cerner Corp. (b) ................................... 4,700 177,895
Psychiatric Solutions, Inc. (b) .................... 4,000 83,600
-----------
639,836
-----------
HEALTH CARE SUPPLIES--0.7%
Fisher Scientific International, Inc. (b) .......... 2,200 91,014
-----------
HOME IMPROVEMENT RETAIL--0.2%
Kirkland's, Inc. (b) ............................... 1,715 30,287
-----------
INDUSTRIAL MACHINERY--2.7%
Esco Technologies, Inc. (b) ........................ 8,045 351,164
-----------
INTERNET RETAIL--0.4%
RedEnvelope, Inc. (b) .............................. 3,100 51,770
-----------
INTERNET SOFTWARE & SERVICES--3.4%
Ask Jeeves, Inc. (b) ............................... 5,419 98,192
Autobytel, Inc. (b) ................................ 2,960 26,877
Autobytel, Inc. (b) ................................ 7,657 69,526
eCollege.Com (b) ................................... 7,729 142,677
Opsware, Inc. (b) .................................. 13,520 100,048
-----------
437,320
-----------
INVESTMENT BANKING & BROKERAGE--2.0%
Jefferies Group, Inc. .............................. 5,470 180,620
Knight Trading Group, Inc. (b) ..................... 5,613 82,174
-----------
262,794
-----------
MANAGED HEALTH CARE--3.3%
Amerigroup Corp. (b) ............................... 2,729 116,392
Coventry Health Care, Inc. (b) ..................... 3,929 253,381
Molina Healthcare, Inc. (b) ........................ 2,382 60,098
-----------
429,871
-----------
OIL & GAS DRILLING--1.2%
Patterson-UTI Energy, Inc. (b) ..................... 4,628 152,354
-----------
OIL & GAS EQUIPMENT & SERVICES--2.8%
Grant Prideco, Inc. (b) ............................ 7,599 98,939
Maverick Tube Corp. (b) ............................ 4,700 90,475
Tidewater, Inc. .................................... 3,351 100,128
W-H Energy Services, Inc. (b) ...................... 4,800 77,760
-----------
367,302
-----------
OIL & GAS EXPLORATION & PRODUCTION--0.7%
Newfield Exploration Co. (b) ....................... 1,991 88,679
-----------
OTHER DIVERSIFIED FINANCIAL SERVICES--0.8%
CapitalSource, Inc. (b) ............................ 4,982 108,010
-----------
PHARMACEUTICALS--2.8%
Medicines Co. (The) (b) ............................ 7,959 234,472
MGI Pharma, Inc. (b) ............................... 1,800 74,070
Pharmion Corp. (b) ................................. 3,400 51,850
-----------
360,392
-----------
See Notes to Financial Statements
213
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
SHARES VALUE
------ -----------
REGIONAL BANKS--3.8%
East West Bancorp, Inc. ............................ 2,111 $ 113,319
Greater Bay Bancorp ................................ 3,334 94,952
South Financial Group, Inc. (The) .................. 3,844 107,094
Southwest Bancorp of Texas, Inc. ................... 2,107 81,857
Texas Capital Banshares, Inc. (b) .................. 6,966 100,742
-----------
497,964
-----------
RESTAURANTS--1.3%
Chang's (P.F.) China Bistro, Inc. (b) .............. 1,700 86,496
Krispy Kreme Doughnuts, Inc. (b) ................... 2,180 79,788
-----------
166,284
-----------
SEMICONDUCTOR EQUIPMENT--11.9%
Asyst Technologies, Inc. (b) ....................... 9,500 164,825
ATMI, Inc. (b) ..................................... 4,871 112,715
August Technology Corp. (b) ........................ 4,651 86,276
Axcelis Technologies, Inc. (b) ..................... 19,916 203,542
Brooks Automation, Inc. (b) ........................ 8,016 193,747
Helix Technology Corp. ............................. 6,750 138,915
Kulicke and Soffa Industries, Inc. (b) ............. 11,059 159,028
Lam Research Corp. (b) ............................. 6,589 212,825
NPTest Holding Corp. (b) ........................... 6,000 66,240
Teradyne, Inc. (b) ................................. 4,500 114,525
Varian Semiconductor Equipment Associates, Inc. (b) 2,350 102,671
-----------
1,555,309
-----------
SEMICONDUCTORS--7.2%
Artisan Components, Inc. (b) ....................... 3,648 74,784
Cypress Semiconductor Corp. (b) .................... 9,336 199,417
Integrated Silicon Solution, Inc. (b) .............. 11,852 185,721
International Rectifier Corp. (b) .................. 5,010 247,544
ON Semiconductor Corp. (b) ......................... 11,900 76,755
Silicon Storage Technology, Inc. (b) ............... 14,252 156,772
-----------
940,993
-----------
SPECIALTY STORES--1.4%
Linens 'n Things, Inc. (b) ......................... 2,500 75,200
Pier 1 Imports, Inc. ............................... 4,905 107,223
-----------
182,423
-----------
SYSTEMS SOFTWARE--0.5%
Embarcadero Technologies, Inc. (b) ................. 3,907 62,317
-----------
THRIFTS & MORTGAGE FINANCE--1.3%
New York Community Bancorp, Inc. ................... 4,463 169,817
-----------
TRUCKING--1.2%
Quality Distribution, Inc. (b) ..................... 3,500 68,425
Sirva, Inc. (b) .................................... 4,800 93,792
-----------
162,217
-----------
WIRELESS TELECOMMUNICATION SERVICES--0.9%
American Tower Corp. Class A (b) ................... 10,639 115,114
-----------
TOTAL COMMON STOCKS
(Identified cost $10,407,372) ............................... 12,311,379
-----------
SHARES VALUE
------ -----------
FOREIGN COMMON STOCKS--1.9%
SEMICONDUCTORS--1.9%
O2Micro International Ltd. (United States) (b) ..... 10,907 $ 244,316
-----------
TOTAL FOREIGN COMMON STOCKS
(Identified cost $179,015) .................................. 244,316
-----------
TOTAL LONG TERM INVESTMENTS--96.4%
(Identified cost $10,586,387) ............................... 12,555,695
-----------
STANDARD
& POOR'S PAR
RATING VALUE
(UNAUDITED) (000)
----------- -----
SHORT-TERM OBLIGATIONS--5.8%
COMMERCIAL PAPER--5.8%
General Electric Capital Corp. 1.03%,
1/6/04 ................................ A-1+ $269 268,962
Merrill Lynch & Co. 1.04%, 1/6/04 ....... A-1 488 487,929
-----------
TOTAL SHORT-TERM OBLIGATIONS
(Identified cost $756,891) .................................. 756,891
-----------
TOTAL INVESTMENTS--102.2%
(Identified cost $11,343,278) ............................... 13,312,586(a)
Other assets and liabilities, net--(2.2)% ................... (286,606)
-----------
NET ASSETS--100.0% ............................................ $13,025,980
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,118,687 and gross
depreciation of $204,492 for federal income tax purposes. At December 31,
2003, the aggregate cost of securities for federal income tax purposes was
$11,398,391.
(b) Non-income producing.
(c) Security valued at fair value as determined in good faith by or under the
direction of the Trustees. At December 31, 2003, this security amounted to a
value of $80,454 or 0.6% of net assets.
(d) Illiquid. At December 31, 2003, this security amounted to a value of $80,454
or 0.6% of net assets.
See Notes to Financial Statements
214
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
ASSETS
Investment securities at value (Identified cost $11,343,278) .................................................... $13,312,586
Cash ............................................................................................................ 191,445
Receivables
Fund shares sold .............................................................................................. 202,111
Investment securities sold .................................................................................... 40,249
Dividends ..................................................................................................... 557
Prepaid expenses ................................................................................................ 94
-----------
Total assets ................................................................................................ 13,747,042
-----------
LIABILITIES
Payables
Investment securities purchased ............................................................................... 594,997
Fund shares repurchased ....................................................................................... 63,743
Professional fee .............................................................................................. 30,042
Printing fee .................................................................................................. 12,690
Investment advisory fee ....................................................................................... 4,021
Financial agent fee ........................................................................................... 3,791
Trustees' fee ................................................................................................. 2,360
Administration fee ............................................................................................ 797
Accrued expenses ................................................................................................ 8,621
-----------
Total liabilities ........................................................................................... 721,062
-----------
NET ASSETS ...................................................................................................... $13,025,980
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest .............................................................. $10,826,292
Accumulated net realized gain ................................................................................. 230,380
Net unrealized appreciation ................................................................................... 1,969,308
-----------
NET ASSETS ...................................................................................................... $13,025,980
===========
Shares of beneficial interest outstanding, $1 par value, unlimited authorization ................................ 890,017
===========
Net asset value and offering price per share .................................................................... $14.64
======
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
INVESTMENT INCOME
Dividends ..................................................................................................... $ 14,621
Interest ...................................................................................................... 3,005
----------
Total investment income ..................................................................................... 17,626
----------
EXPENSES
Investment advisory fee ....................................................................................... 58,790
Financial agent fee ........................................................................................... 40,921
Administration ................................................................................................ 5,326
Custodian ..................................................................................................... 66,162
Professional .................................................................................................. 30,371
Printing ...................................................................................................... 22,473
Trustees ...................................................................................................... 5,931
Miscellaneous ................................................................................................. 11,336
----------
Total expenses .............................................................................................. 241,310
Less expenses borne by investment adviser ................................................................... (172,139)
Custodian fees paid indirectly .............................................................................. (6)
----------
Net expenses ................................................................................................ 69,165
----------
NET INVESTMENT LOSS ............................................................................................. (51,539)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on securities ............................................................................... 958,626
Net change in unrealized appreciation (depreciation) on investments ........................................... 1,973,661
----------
NET GAIN ON INVESTMENTS ......................................................................................... 2,932,287
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................................................ $2,880,748
==========
See Notes to Financial Statements
215
PHOENIX-STATE STREET RESEARCH SMALL-CAP GROWTH SERIES
STATEMENT OF CHANGES IN NET ASSETS
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
----------- --------------
FROM OPERATIONS
Net investment income (loss) ........................................................................ $ (51,539) $ (4,084)
Net realized gain (loss) ............................................................................ 958,626 4,179
Net change in unrealized appreciation (depreciation) ................................................ 1,973,661 (4,353)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ......................................... 2,880,748 (4,258)
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized short-term gains ....................................................................... (633,538) --
Net realized long-term capital gains ................................................................ (43,264) --
----------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS ........................................... (676,802) --
----------- ----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (1,023,094 and 196,771 shares, respectively) .......................... 13,421,024 1,988,937
Net asset value of shares issued from reinvestment of distributions (46,102 and 0 shares,
respectively) ..................................................................................... 676,802 --
Cost of shares repurchased (374,691 and 1,259 shares, respectively) ................................. (5,247,488) (12,983)
----------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS ........................................... 8,850,338 1,975,954
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ............................................................... 11,054,284 1,971,696
----------- ----------
NET ASSETS
Beginning of period ................................................................................. 1,971,696 --
----------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $0 AND $0, RESPECTIVELY) ............ $13,025,980 $1,971,696
=========== ==========
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FROM INCEPTION
YEAR ENDED 8/12/02 TO
12/31/03 12/31/02
---------- --------------
Net asset value, beginning of period ........... $10.08 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ................. (0.10)(5) (0.02)(5)
Net realized and unrealized gain (loss) ...... 5.49 0.10
------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 5.39 0.08
------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains ........ (0.83) --
------ ------
TOTAL DISTRIBUTIONS ........................ (0.83) --
------ ------
CHANGE IN NET ASSET VALUE ...................... 4.56 0.08
------ ------
NET ASSET VALUE, END OF PERIOD ................. $14.64 $10.08
====== ======
Total return ................................... 53.38% 0.85%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) ........ $13,026 $1,972
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(1) ........................ 1.00%(4) 1.00%(2)(4)
Net investment income (loss) ................. (0.75)% (0.62)%(2)
Portfolio turnover ............................. 180% 62%(3)
(1) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 3.49% and
9.33% for the periods ended December 31, 2003 and 2002, respectively.
(2) Annualized.
(3) Not annualized.
(4) 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.
(5) Computed using average shares outstanding.
See Notes to Financial Statements
216
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE 1--ORGANIZATION
The Phoenix Edge Series Fund (the "Fund") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940,
as amended, as an open-end management investment company. The Fund is
organized with series which are available only to the subaccounts of the
Phoenix Life Variable Accumulation Account, Phoenix Life Variable Universal
Life Account, PHL Variable Accumulation Account, PHLVIC Variable Universal
Life Account, Phoenix Life and Annuity Variable Universal Life Account, and
Phoenix Life Separate Accounts B, C and D.
The Fund is comprised of 33 series (each a "series") each having a distinct
investment objective as outlined below:
FUND NAME INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Aberdeen International Series ("Aberdeen International") High total return consistent with reasonable risk.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-AIM Mid-Cap Equity Series ("AIM Mid-Cap Equity") Long-term growth of capital.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Alliance/Bernstein Enhanced Index Series High total return.
("Alliance/Bernstein Enhanced Index") (formerly Phoenix-J.P. Morgan
Research Enhanced Index Series)
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Alliance/Bernstein Growth + Value Series Long-term capital growth.
("Alliance/Bernstein Growth + Value")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Duff & Phelps Real Estate Securities Series Capital appreciation and income with approximately
("Duff & Phelps Real Estate Securities") equal emphasis.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Capital Growth Series ("Engemann Intermediate and long-term capital appreciation with
Capital Growth") income as a secondary consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Engemann Small & Mid-Cap Growth Series Long-term growth of capital.
("Engemann Small & Mid-Cap Growth")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Money Market Series As high a level of current income as is consistent with
("Goodwin Money Market") the preservation of capital and maintenance of
liquidity.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Fixed Income Series Long-term total return.
("Goodwin Multi-Sector Fixed Income")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Goodwin Multi-Sector Short Term Bond Series To provide high current income while attempting to
("Goodwin Multi-Sector Short Term Bond") limit changes in the series' net asset value per share
caused by interest rate changes.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Janus Flexible Income Series Maximum total return consistent with preservation of
("Janus Flexible Income") capital.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Kayne Rising Dividends Series ("Kayne Rising Dividends") Long-term capital appreciation with dividend income as
(formerly Phoenix-Kayne Large-Cap Core Series) a secondary consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Kayne Small-Cap Quality Value Series ("Kayne Long-term capital appreciation with dividend income as
Small-Cap Quality Value") a secondary consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lazard International Equity Select Series Long-term capital appreciation.
("Lazard International Equity Select")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lazard Small-Cap Value Series ("Lazard Small-Cap Value") Long-term capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lazard U.S. Multi-Cap Series ("Lazard U.S. Multi-Cap") Long-term capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lord Abbett Bond-Debenture Series High current income and long-term capital appreciation
("Lord Abbett Bond-Debenture") to produce a high total return.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lord Abbett Large-Cap Value Series Capital appreciation with income as a secondary
("Lord Abbett Large-Cap Value") consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Lord Abbett Mid-Cap Value Series ("Lord Abbett Mid-Cap Value") Capital appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-MFS Investors Growth Stock Series Long-term growth of capital and future income rather
("MFS Investors Growth Stock") (formerly Phoenix-Janus Growth than current income.
Stock Series)
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-MFS Investors Trust Series ("MFS Investors Trust") Long-term growth of capital; secondarily to provide
reasonable current income.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-MFS Value Series ("MFS Value") Capital appreciation and reasonable income.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Northern Dow 30 Series ("Northern Dow 30") Track the total return of the Dow Jones Industrial
(formerly Phoenix-Deutsche Dow 30 Series) Average(SM) before series expenses.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Northern Nasdaq-100 Index(R) Series Track the total return of the NASDAQ-100 Index(R)
("Northern Nasdaq-100 Index(R)") before series expenses.
(formerly Phoenix-Deutsche Nasdaq-100 Index(R) Series)
- ------------------------------------------------------------------------------------------------------------------------------------
217
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
FUND NAME INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Growth and Income Series Dividend growth, current income and capital
("Oakhurst Growth and Income") appreciation.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Strategic Allocation Series High total return over an extended period of time
("Oakhurst Strategic Allocation") consistent with prudent investment risk.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Oakhurst Value Equity Series ("Oakhurst Value Equity") Long-term capital appreciation with current income as a
(formerly Phoenix-Hollister Value Equity Series) secondary consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Sanford Bernstein Global Value Series Long-term capital growth through investment in equity
("Sanford Bernstein Global Value") securities of foreign and U.S. companies.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Sanford Bernstein Mid-Cap Value Series Long-term capital appreciation with current income as a
("Sanford Bernstein Mid-Cap Value") secondary consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Sanford Bernstein Small-Cap Value Series Long-term capital appreciation by investing primarily
("Sanford Bernstein Small-Cap Value") in small-capitalization stocks that appear to be
undervalued with current income as a secondary
consideration.
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Mid-Cap Growth Series Capital appreciation.
("Seneca Mid-Cap Growth")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-Seneca Strategic Theme Series Long-term capital appreciation.
("Seneca Strategic Theme")
- ------------------------------------------------------------------------------------------------------------------------------------
Phoenix-State Street Research Small-Cap Growth Series Long-term capital growth.
("State Street Research Small-Cap Growth")
- ------------------------------------------------------------------------------------------------------------------------------------
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
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 of America requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, disclosure of contingent assets and liabilities, revenues and
expenses. Actual results could differ from those estimates.
A. SECURITY VALUATION
Equity securities are valued at the official closing price (typically last
sale) on the exchange on which the securities are primarily traded, or if no
closing price is available, at the last bid price. Debt securities are
valued on the basis of broker quotations or valuations provided by a pricing
service, which in determining value utilizes information with respect to
recent sales, market transactions in comparable securities, quotations from
dealers, and various relationships between securities. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost, which approximates market. As required, some investments are
valued at fair value as determined in good faith by or under the direction
of the Trustees.
Goodwin Money Market uses the amortized cost method of security valuation
absent extraordinary or unusual market conditions. In the opinion of the
Trustees, this represents the fair value of the securities. The Trustees
monitor the deviations between the net asset value per share as determined
by using available market quotations and its net asset value per share using
amortized cost. If the deviation exceeds 1/2 of 1%, the Board of Trustees
will consider what action, if any, should be initiated to provide fair
valuation. Using this method, the series attempts to maintain a constant net
asset value of $10 per share.
Certain securities held by the Fund were valued on the basis of a price
provided by a principal market maker. The prices provided by the principal
market makers may differ from the value that would be realized if the
securities were sold. At December 31, 2003, the total value of these
securities represented approximately the following percentage of net assets:
SERIES PERCENTAGE OF NET ASSETS
------ ------------------------
Goodwin Multi-Sector Fixed Income .............. 1.9%
Goodwin Multi-Sector Short Term Bond ........... 3.1
B. SECURITY TRANSACTIONS AND RELATED INCOME
Security transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date, or in the case of certain foreign
securities, as soon as the series is notified. Interest income is recorded
on the accrual basis. Each series amortizes premiums and accretes discounts
using the effective interest method. Realized gains and losses are
determined on the identified cost basis.
C. REIT INVESTMENTS
With respect to Duff & Phelps Real Estate Securities, dividend income is
recorded based on the income included in distributions received from the
REIT investments using published REIT reclassifications including some
management estimates when actuals are not available. Distributions received
in excess of this estimated amount are recorded as a reduction of the cost
of investments or reclassified to capital gains. The actual amounts of
income, return of capital, and capital gains are only determined by each
REIT after its fiscal year-end, and may differ from the estimated amounts.
218
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
D. INCOME TAXES
Each series is treated as a separate taxable entity. It is the policy of
each series 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,
each series 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.
E. DISTRIBUTIONS TO SHAREHOLDERS
Distributions are recorded by each series on the ex-dividend date. Income
and capital gain distributions are determined in accordance with income tax
regulations, which may differ from accounting principles generally accepted
in the United States of America. These differences may include the treatment
of non-taxable dividends, market premium and discount, non-deductible
expenses, expiring capital loss carryovers, foreign currency gain or loss,
gain or loss on futures contracts, partnerships, operating losses and losses
deferred due to wash sales. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to
capital paid in on shares of beneficial interest.
F. 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 series do not separate that portion of the results of
operations arising from changes in exchange rates and that portion arising
from changes in the market prices of securities.
G. FORWARD CURRENCY CONTRACTS
Certain series may enter into forward currency contracts in conjunction with
the planned purchase or sale of foreign denominated securities in order to
hedge the U.S. dollar cost or proceeds. Forward currency contracts involve,
to varying degrees, elements of market risk in excess of the amount
recognized in the Statement of Assets and Liabilities. Risks arise from the
possible movements in foreign exchange rates or if the counterparty does not
perform under the contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are traded directly between currency
traders and their customers. The contract is marked-to-market daily and the
change in market value is recorded by each series as unrealized gain (or
loss). When the contract is closed or offset with the same counterparty, the
series records a realized gain (or loss) equal to the change in the value of
the contract when it was opened and the value at the time it was closed or
offset.
H. FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on future date. Certain series may enter into
financial futures contracts as a hedge against anticipated changes in the
market value of the portfolio securities. Upon entering into a futures
contract, the series is required to pledge to the broker an amount of cash
and/or securities equal to the "initial margin" requirements of the futures
exchange on which the contract is traded. Pursuant to the contract, the
series agrees to receive from or pay to the broker an amount of cash equal
to the daily fluctuation in value of the contract. Such receipts or payments
are known as variation margin and are recorded by the series as unrealized
gains or losses. When the contract is closed, the series records a realized
gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed. The
potential risk to the series is that the change in value of the futures
contract may not correspond to the change in value of the hedged
instruments.
I. EXPENSES
Expenses incurred by the Fund with respect to any two or more series are
allocated in proportion to the net assets of each series, except where
allocation of direct expense to each series or an alternative allocation
method can be more fairly made.
J. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
Certain series may engage in when-issued or delayed delivery transactions.
The series 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.
K. LOAN AGREEMENTS
Certain series may invest in direct debt instruments, which are interests in
amounts owed by a corporate, governmental, or other borrower to lenders or
lending syndicates. A series' investments in loans may be in the form of
participation 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 series 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 series generally has no right to
enforce compliance with the terms of the loan agreement with the borrower.
As a result, the series may be subject to the credit risk of both the
borrower and the lender that is selling the loan agreement. When the series
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.
219
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
L. REPURCHASE AGREEMENTS
A repurchase agreement is a transaction where a series acquires a security
for cash and obtains a simultaneous commitment from the seller to repurchase
the security at an agreed upon price and date. Each series, through its
custodian, takes possession of securities collateralizing the repurchase
agreement. The collateral is marked-to-market daily to ensure that the
market value of the underlying assets remains sufficient to protect the
series in the event of default by the seller. If the seller defaults and the
value of the collateral declines, or if the seller enters insolvency
proceedings, realization of collateral may be delayed or limited.
M. DEBT INDEX SECURITIES, TARGETED RETURN INDEX SECURITIES AND TRADED CUSTODY
RECEIPTS
Certain series invest in securities that represent an interest in a
diversified portfolio (the "basket") of debt instruments (the underlying
securities). Under the term of the baskets, the series has direct ownership
in each underlying security equal to its pro rata interest in the basket. In
the event of default of any underlying security, the notional amount on
which interest is earned is reduced by the par amount of the defaulted
security, and the pro rata interest of such security is distributed to the
series.
Debt index securities are comprised of a basket of credit default swaps
referencing a diversified pool of high yield or emerging market debt
instruments. Certain baskets may be purchased on a funded or unfunded basis
such that the series receives interest payments based upon the notional
amount or par amount of the basket. In connection with these investments
collateral are set aside by the series' custodian. In the event of default
of any of the underlying notional securities within the unfunded basket, the
series will be required to pay the counterparty an amount equal to its pro
rata share of the notional amount of the defaulted security and similarly
the series will then receive its pro rata interest of the defaulted security
or equivalent cash amount. In a funded transaction, in the event of default
of any par securities in the funded basket, the series would be required to
receive its pro rata interest of the defaulted security or equivalent cash
amount.
Targeted return index securities are trusts in which each certificate holder
owns a pro rata share of the corporate bonds that comprise the Lehman
Brothers U.S. Credit Index, which is a component of the Lehman Brothers U.S.
Aggregate Index.
Traded custody receipts are custody receipts, which represent an ownership
interest in an equal par-weighted portfolio of benchmark U.S. corporate
bonds.
N. FOREIGN SECURITY COUNTRY DETERMINATION
A combination of the following criteria is used to assign the countries at
risk listed in the Schedule of Investments: country of incorporation, actual
building address, primary exchange on which the security is traded and
country in which the greatest percentage of company revenue is generated.
NOTE 3--INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
The advisors to the Fund are Phoenix Investment Counsel, Inc. ("PIC"),
Phoenix Variable Advisors, Inc. ("PVA"), and Duff & Phelps Investment
Management Co. ("DPIM"). As compensation for their services to the Fund, the
advisors are entitled to a fee based upon the following annual rates as a
percentage of the average daily net assets of each separate series listed
below:
RATE FOR FIRST RATE FOR NEXT RATE FOR OVER
SERIES ADVISOR $250 MILLION $250 MILLION $500 MILLION
------ ------- -------------- ------------- -------------
Aberdeen International ......................................... PIC 0.75% 0.70% 0.65%
AIM Mid-Cap Equity ............................................. PVA 0.85 0.85 0.85
Alliance/Bernstein Enhanced Index .............................. PVA 0.45 0.45 0.45
Alliance/Bernstein Growth + Value .............................. PVA 0.85 0.85 0.85
Engemann Capital Growth ........................................ PIC 0.70 0.65 0.60
Engemann Small & Mid-Cap Growth ................................ PIC 0.90 0.90 0.90
Goodwin Money Market ........................................... PIC 0.40 0.35 0.30
Goodwin Multi-Sector Fixed Income .............................. PIC 0.50 0.45 0.40
Goodwin Multi-Sector Short Term Bond ........................... PIC 0.50(2) 0.45(2) 0.40(2)
Janus Flexible Income .......................................... PVA 0.80 0.80 0.80
Kayne Rising Dividends ......................................... PIC 0.70 0.70 0.70
Kayne Small-Cap Quality Value .................................. PIC 0.90 0.90 0.90
Lazard International Equity Select ............................. PVA 0.90 0.90 0.90
Lazard Small-Cap Value ......................................... PVA 0.90 0.90 0.90
Lazard U.S. Multi-Cap .......................................... PVA 0.80 0.80 0.80
Lord Abbett Bond-Debenture ..................................... PVA 0.75 0.75 0.75
Lord Abbett Large-Cap Value .................................... PVA 0.75 0.75 0.75
Lord Abbett Mid-Cap Value ...................................... PVA 0.85 0.85 0.85
MFS Investors Growth Stock ..................................... PVA 0.75(1) 0.75(1) 0.75(1)
MFS Investors Trust ............................................ PVA 0.75 0.75 0.75
MFS Value ...................................................... PVA 0.75 0.75 0.75
Northern Dow 30 ................................................ PVA 0.35 0.35 0.35
Northern Nasdaq-100 Index(R) ................................... PVA 0.35 0.35 0.35
Oakhurst Growth and Income ..................................... PIC 0.70 0.65 0.60
Oakhurst Strategic Allocation .................................. PIC 0.60 0.55 0.50
Oakhurst Value Equity .......................................... PIC 0.70 0.65 0.60
220
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
RATE FOR FIRST RATE FOR NEXT RATE FOR OVER
SERIES (CONTINUED) ADVISOR $250 MILLION $250 MILLION $500 MILLION
------ ------- -------------- ------------- -------------
Sanford Bernstein Global Value ................................. PVA 0.90 0.90 0.90
Sanford Bernstein Mid-Cap Value ................................ PVA 1.05 1.05 1.05
Sanford Bernstein Small-Cap Value .............................. PVA 1.05 1.05 1.05
Seneca Mid-Cap Growth .......................................... PIC 0.80 0.80 0.80
Seneca Strategic Theme ......................................... PIC 0.75 0.70 0.65
State Street Research Small-Cap Growth ......................... PVA 0.85 0.85 0.85
RATE FOR FIRST RATE FOR NEXT RATE FOR OVER
$1 BILLION $1 BILLION $2 BILLION
-------------- ------------- -------------
Duff & Phelps Real Estate Securities ........................... DPIM 0.75 0.70 0.65
<FN>
(1) Prior to February 14, 2003, the rate was 0.85.
(2) Effective June 2, 2003, the advisor voluntarily agreed to waive its entire management fee of 0.50% for the Multi-Sector
Short Term Bond Fund through May 31, 2004.
</FN>
Pursuant to a subadvisory agreement with the Fund, certain advisors delegate
certain investment decisions and research functions with respect to the
following series to the subadvisor indicated, for which each is paid a fee
by the respective advisor.
SERIES SUBADVISOR
------ ----------
Aberdeen International Aberdeen Fund Managers, Inc. ("Aberdeen")
AIM Mid-Cap Equity AIM Capital Management, Inc. ("AIM")
Alliance/Bernstein Enhanced Index Alliance Capital Management L.P. ("Alliance")
Alliance/Bernstein Growth + Value Alliance Capital Management L.P. ("Alliance")
Engemann Capital Growth Engemann Asset Management ("Engemann")
Engemann Small & Mid-Cap Growth Engemann Asset Management ("Engemann")
Janus Flexible Income Janus Capital Management LLC ("Janus")
Kayne Rising Dividends Kayne Anderson Rudnick Investment Management, LLC ("Kayne")
Kayne Small-Cap Quality Value Kayne Anderson Rudnick Investment Management, LLC ("Kayne")
Lazard International Equity Select Lazard Asset Management LLC ("Lazard")
Lazard Small-Cap Value Lazard Asset Management LLC ("Lazard")
Lazard U.S. Multi-Cap Lazard Asset Management LLC ("Lazard")
Lord Abbett Bond-Debenture Lord, Abbett & Co. LLC ("Lord Abbett")
Lord Abbett Large-Cap Value Lord, Abbett & Co. LLC ("Lord Abbett")
Lord Abbett Mid-Cap Value Lord, Abbett & Co. LLC ("Lord Abbett")
MFS Investors Growth Stock Massachusetts Financial Services Company, Inc. ("MFS")
MFS Investors Trust Massachusetts Financial Services Company, Inc. ("MFS")
MFS Value Massachusetts Financial Services Company, Inc. ("MFS")
Northern Dow 30 Northern Trust Investments, N.A. ("Northern")
Northern Nasdaq-100 Index(R) Northern Trust Investments, N.A. ("Northern")
Sanford Bernstein Global Value Alliance Capital Management L.P. ("Alliance")
Sanford Bernstein Mid-Cap Value Alliance Capital Management L.P. ("Alliance")
Sanford Bernstein Small Cap Value Alliance Capital Management L.P. ("Alliance")
Seneca Mid-Cap Growth Seneca Capital Management LLC ("Seneca")
Seneca Strategic Theme Seneca Capital Management LLC ("Seneca")
State Street Research Small-Cap Growth State Street Research & Management Company ("State Street")
PIC and PVA employ subadvisors to furnish portfolio management services to
the series, subject to Investment Subadvisory Agreements, the terms of which
are described below.
PIC is an indirect wholly owned subsidiary of Phoenix Investment Partners,
Ltd. DPIM is a subsidiary of Phoenix Investment Partners, Ltd. Engemann
Asset Management is a wholly owned subsidiary of Pasadena Capital
Corporation, which in turn is a wholly owned subsidiary of Phoenix
Investment Partners, Ltd. A majority of the equity interest of Kayne
Anderson Rudnick Investment Management, LLC and Seneca Capital Management
LLC are owned by Phoenix Investment Partners, Ltd. Phoenix Investment
Partners, Ltd. in turn is an indirect wholly owned subsidiary of The Phoenix
Companies, Inc. ("PNX").
PIC has engaged Aberdeen as a subadvisor to the Aberdeen International.
Aberdeen provides the day-to-day portfolio management for this series. For
implementing certain portfolio transactions and providing other services to
this series, PIC pays a monthly fee to Aberdeen based on an annual
percentage of the average daily net assets of this series of 0.375% on the
first $250 million, 0.35% of such value between $250 million to $500 million
and 0.325% of such value in excess of $500 million. Aberdeen is a wholly
owned subsidiary of Aberdeen Asset Management PLC, of which PNX owns
approximately 15%.
Pursuant to a subadvisory agreement between PVA and AIM, AIM is the
subadvisor and furnishes portfolio management services to AIM Mid-Cap
Equity. For the services provided, PVA pays a monthly fee to AIM based on an
annual percentage of 0.50% of the average daily net assets of this series.
Pursuant to a subadvisory agreement between PVA and Alliance, Alliance is
the subadvisor and furnishes portfolio management services to
Alliance/Bernstein Enhanced Index and Alliance/Bernstein Growth + Value.
Alliance will manage the portion of these series' assets invested in value
stocks through its Bernstein Investment Research and Management unit (the
"Bernstein Unit"). PVA pays a monthly fee to Alliance based on an annual
percentage of the average daily net assets of these series as follows:
221
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
RATE FOR FIRST RATE FOR NEXT RATE FOR OVER
SERIES $50 MILLION $150 MILLION $200 MILLION
------ -------------- ------------- -------------
Alliance/Bernstein Enhanced Index .............. 0.225% 0.180% 0.135%
RATE FOR FIRST RATE FOR NEXT RATE FOR NEXT RATE FOR NEXT RATE FOR OVER
$20 MILLION $20 MILLION $20 MILLION $40 MILLION $100 MILLION
-------------- ------------- ------------- ------------- -------------
Alliance/Bernstein Growth + Value .............. 0.90% 0.75% 0.60% 0.40% 0.30%
On February 1, 2003, Alliance Capital Management L.P. ("Alliance") replaced
J.P. Morgan Investment Management, Inc. as subadvisor for the Phoenix-J.P.
Morgan Research Enhanced Index Series. The series was subsequently renamed
Phoenix-Alliance/Bernstein Enhanced Index Series.
Pursuant to subadvisory agreements between PVA and Alliance, Alliance,
through its Bernstein Unit, is the subadvisor and furnishes portfolio
management services, including effecting the purchase and sales of
securities and providing related advisory services, to the Sanford Bernstein
Global Value, Sanford Bernstein Mid-Cap Value and Sanford Bernstein
Small-Cap Value Series. For the services provided, PVA pays a monthly fee to
Alliance based on an annual percentage of the average daily net assets of
these Series as follows:
RATE FOR FIRST RATE FOR NEXT RATE FOR NEXT RATE FOR NEXT RATE FOR OVER
SERIES $25 MILLION $25 MILLION $25 MILLION $100 MILLION $175 MILLION
-------- -------------- ------------- ------------- ------------- -------------
Sanford Bernstein Global Value (1) ............. 0.65% 0.50% 0.45% 0.40% 0.30%
Sanford Bernstein Mid-Cap Value (1) ............ 0.80 0.60 0.60 0.60 0.60
RATE FOR FIRST RATE FOR NEXT RATE FOR OVER
$10 MILLION $10 MILLION $20 MILLION
-------------- ------------- -------------
Sanford Bernstein Small-Cap Value (1) .......... 1.00% 0.875% 0.75%
<FN>
(1) The series are subadvised by the Bernstein Unit and receives a 10% reduction in fees for all or a portion of these series'
assets when certain assets of the series exceed $10 million. A 10% reduction in fees is based upon the aggregate fees for
Sanford Bernstein Global Value and Sanford Bernstein Small-Cap Value. As of December 31, 2003, the reduction is for Sanford
Bernstein Global Value and Sanford Bernstein Small-Cap Value.
</FN>
Pursuant to subadvisory agreements between PIC and Engemann with respect to
Engemann Capital Growth and Engemann Small & Mid-Cap Growth, Engemann is the
subadvisor and furnishes portfolio management services, including effecting
the purchase and sales of securities and providing related advisory
services, to these series. For the services provided, PIC pays a monthly fee
to Engemann for Engemann Capital Growth based on an annual percentage of the
average daily net assets of 0.10% up to $3 billion and 0.30% of such value
in excess of $3 billion; and for Small & Mid-Cap Growth based on an annual
percentage of the average daily net assets of 0.45%.
Pursuant to a subadvisory agreement between PVA and Janus, Janus is the
subadvisor and furnishes portfolio management services, including effecting
the purchase and sales of securities and providing related advisory
services, to Janus Flexible Income. For the services provided, PVA pays a
monthly fee to Janus based on an annual percentage of the average daily net
assets of this series of 0.55% up to $100 million, 0.50% of such value
between $100 million and $500 million and 0.45% on such value in excess of
$500 million.
Pursuant to a subadvisory agreement between PIC and Kayne, Kayne is the
subadvisor and furnishes portfolio management services to Kayne Rising
Dividends and Kayne Small-Cap Quality Value. For the services provided, PIC
pays a monthly fee to Kayne for the Kayne Rising Dividends based on an
annual percentage of the average daily net assets of 0.30% up to $800
million and 0.25% of such value in excess of $800 million; and for the Kayne
Small-Cap Quality based on an annual percentage of the average daily net
assets of 0.50% up to $200 million and 0.45% of such value in excess of $200
million.
Pursuant to a subadvisory agreement between PVA and Lazard, Lazard is the
subadvisor and furnishes portfolio management services to Lazard
International Equity Select, Lazard Small-Cap Value and Lazard U.S.
Multi-Cap. For the services provided, PVA pays a monthly fee to Lazard for
the Lazard International Equity Select based on an annual percentage of the
average daily net assets of 0.45% up to $500 million and 0.40% of such value
in excess of $500 million; for the Lazard Small-Cap Value based on an annual
percentage of the average daily net assets of 0.55% up to $250 million,
0.50% of such value between $250 million and $500 million and 0.45% of such
value in excess of $500 million; and for the Lazard U.S. Multi-Cap based on
an annual percentage of the average daily net assets of 0.38% up to $250
million and 0.35% of such value in excess of $250 million.
Pursuant to a subadvisory agreement between PVA and Lord Abbett, Lord Abbett
is the subadvisor and furnishes portfolio management services to Lord Abbett
Bond-Debenture, Lord Abbett Large-Cap Value and Lord Abbett Mid-Cap Value.
For the services provided, PVA pays a monthly fee to Lord Abbett for Lord
Abbett Bond-Debenture based on an annual percentage of average daily net
assets of 0.35% up to $250 million, 0.30% of such value between $250 million
and $1 billion and 0.25% of such value in excess of $1 billion; for the Lord
Abbett Large-Cap Value based on an annual percentage of the average daily
net assets of 0.35% up to $600 million, 0.30% of such value between $600
million and $1.2 billion and 0.25% of such value in excess of $1.2 billion;
and for the Lord Abbett Mid-Cap Value based on an annual percentage of the
average daily net assets of 0.45% up to $200 million, 0.40% of such value
between $200 million and $500 million and 0.375% of such value in excess of
$500 million. Lord Abbett has voluntarily agreed to waive 0.05% of the
subadvisory fee for Lord Abbett Mid-Cap Value received from PVA on the first
$200 million until February 9, 2004.
222
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
Pursuant to a subadvisory agreement between PVA and MFS, MFS is the
subadvisor and furnishes portfolio management services to the MFS Investors
Growth Stock, MFS Investors Trust, and MFS Value. For the services provided,
PVA pays a monthly fee to MFS based on an annual percentage of the combined
average daily net assets of all three of these Series of 0.375% up to $500
million, 0.35% on such value between $500 million and $900 million, 0.325%
on such value between $900 million and $1.5 billion and 0.25% on such value
in excess of $1.5 billion. As of August 1, 2003, these rates became 0.40%,
0.375%, 0.35% and 0.25%, respectively.
On February 1, 2003, Northern replaced Deutsche Asset Management, Inc.
("DAMI"), as subadvisor for Phoenix-Deutsche Dow 30 Series and
Phoenix-Deutsche Nasdaq-100 Index(R) Series. The series were subsequently
renamed Phoenix-Northern Dow 30 Series and Phoenix-Northern Nasdaq-100
Index(R) Series, respectively.
Pursuant to a subadvisory agreement between PVA and Northern, Northern is
the subadvisor and provides portfolio management services, including
effecting the purchase and sales of securities and providing related
advisory services, to the Northern Trust Dow 30 and Northern Nasdaq-100
Index(R). For the services provided, PVA pays a monthly fee to Northern
based on an annual percentage of 0.10% of the average daily net assets of
each of these series, with a minimum annual fee for each series of $100,000.
Pursuant to a subadvisory agreement between the Fund, PIC and Seneca with
respect to Seneca Mid-Cap Growth, and pursuant to a subadvisory agreement
between PIC and Seneca with respect to Seneca Strategic Theme, Seneca is the
subadvisor and furnishes portfolio management services, including effecting
the purchase and sales of securities and providing related advisory
services, to the Seneca Mid-Cap Growth and Seneca Strategic Theme. For the
services provided, PIC pays a monthly fee to Seneca for the Seneca Mid-Cap
Growth based on an annual percentage of the average daily net assets of
0.40%; and for the Seneca Strategic Theme based on an annual percentage of
the average daily net assets of 0.10% up to $201 million, 0.375% of such
value between $201 million and $1 billion, 0.35% of such value between $1
billion and $2 billion and 0.325% on such value in excess of $2 billion.
Pursuant to a subadvisory agreement between PVA and State Street, State
Street is the subadvisor and furnishes portfolio management services to
State Street Research Small-Cap Growth. For the services provided, PVA pays
a monthly fee to State Street based on an annual percentage of 0.45% the
average daily net assets of this series.
The advisors have agreed to reimburse the Fund for certain operating
expenses (excluding management fees, interest, taxes, brokerage fees and
commissions) for all series. For the period ended December 31, 2003, the
portion of these expenses to be paid by each series is listed in the
following table. All expense reimbursement arrangements may be discontinued
at any time.
MAXIMUM OPERATING
SERIES EXPENSE
-------- -----------------
Aberdeen International ................................. 0.40%
AIM Mid-Cap Equity ..................................... 0.25
Alliance/Bernstein Enhanced Index ...................... 0.20
Alliance/Bernstein Growth + Value ...................... 0.25
Duff & Phelps Real Estate Securities ................... 0.35
Engemann Capital Growth ................................ 0.25
Engemann Small & Mid-Cap Growth ........................ 0.35
Goodwin Money Market ................................... 0.25
Goodwin Multi-Sector Fixed Income ...................... 0.25
Goodwin Multi-Sector Short Term Bond ................... 0.20
Janus Flexible Income .................................. 0.25
Kayne Rising Dividends ................................. 0.15
Kayne Small-Cap Quality Value .......................... 0.15
Lazard International Equity Select ..................... 0.15
Lazard Small-Cap Value ................................. 0.15
Lazard U.S. Multi-Cap .................................. 0.15
Lord Abbett Bond-Debenture ............................. 0.15
Lord Abbett Large-Cap Value ............................ 0.15
Lord Abbett Mid-Cap Value .............................. 0.15
MFS Investors Growth Stock ............................. 0.25
MFS Investors Trust .................................... 0.25
MFS Value .............................................. 0.25
Northern Dow 30 ........................................ 0.25
Northern Nasdaq-100 Index(R) ........................... 0.25
Oakhurst Growth & Income ............................... 0.25
Oakhurst Strategic Allocation .......................... 0.25
Oakhurst Value Equity .................................. 0.25
Sanford Bernstein Global Value ......................... 0.25
Sanford Bernstein Mid-Cap Value ........................ 0.25
Sanford Bernstein Small-Cap Value ...................... 0.25
Seneca Mid-Cap Growth .................................. 0.35
Seneca Strategic Theme ................................. 0.35
State Street Research Small-Cap Growth ................. 0.15
223
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
As Financial Agent to the Fund and to each series, Phoenix Equity Planning
Corporation ("PEPCO"), an indirect majority-owned subsidiary of PNX,
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 tax services and
oversight of subagent's performance. For the period ended December 31, 2003,
the Fund paid PEPCO $2,736,214. Effective January 1, 2003, the fee schedule
of PFPC Inc. ranges from 0.065% to 0.03% of the average daily net asset
values of all the Phoenix-affiliated Funds serviced by PFPC Inc. Prior to
that date, the fee schedule ranged from 0.085% to 0.0125%. Certain minimum
fees may apply.
Pursuant to an Administration Agreement, Phoenix Life Insurance Company
("PLIC"), an indirect wholly-owned subsidiary of PNX, receives a service fee
at the annual rate of 0.077% of the average daily net assets of each series
for providing certain stock transfer and accounting services for each
series. For the period ended December 31, 2003, the Fund paid PLIC
$1,736,270. Effective January 1, 2004, the service fee is 0.08% of the
average daily net assets of each series.
For the period ended December 31, 2003, the Fund paid PXP Securities Corp.,
a wholly owned subsidiary of PNX, brokerage commissions in connection with
portfolio transactions effected on behalf of it as follows:
COMMISSIONS PAID TO
PXP SECURITIES CORP.
--------------------
Oakhurst Growth and Income ......................... $ 1,916
Oakhurst Strategic Allocation ...................... 110,848
Oakhurst Value Equity .............................. 81,476
Seneca Strategic Theme ............................. 37,822
At December 31, 2003, Phoenix and affiliates held shares in The Phoenix Edge
Series Fund which had the following aggregate value:
AIM Mid-Cap Equity ............................................ $ 3,553,065
Alliance/Bernstein Growth + Value ............................. 2,459,420
Goodwin Multi-Sector Short Term Bond .......................... 10,242,190
Kayne Rising Dividends ........................................ 564,992
Kayne Small-Cap Quality Value ................................. 596,953
Lazard International Equity Select ............................ 1,221,852
Lazard Small-Cap Value ........................................ 4,009,560
Lazard U.S. Multi-Cap ......................................... 2,543,758
Lord Abbett Bond-Debenture .................................... 2,461,718
Lord Abbett Mid-Cap Value ..................................... 1,223,633
MFS Investors Growth Stock .................................... 6,001,523
MFS Investors Trust ........................................... 2,954,166
Northern Nasdaq-100 Index(R) .................................. 1,883,540
Sanford Bernstein Global Value ................................ 7,432,754
State Street Research Small-Cap Growth ........................ 2,280,179
NOTE 4--PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities during the period ended December 31, 2003,
(excluding U.S. Government securities, short-term securities, futures
contracts, swaps and forward currency contracts) aggregated to the
following:
PURCHASES SALES
------------ ------------
Aberdeen International ........................ $ 47,736,947 $ 58,397,464
AIM Mid-Cap Equity ............................ 5,530,849 3,476,825
Alliance/Bernstein Enhanced Index ............. 53,450,668 47,197,557
Alliance/Bernstein Growth + Value ............. 4,303,230 1,817,435
Duff & Phelps Real Estate Securities .......... 21,401,694 18,112,125
Engemann Capital Growth ....................... 229,557,902 293,476,865
Engemann Small & Mid-Cap Growth ............... 11,451,572 7,270,823
Goodwin Multi-Sector Fixed Income ............. 285,297,663 263,116,546
Goodwin Multi-Sector Short Term Bond .......... 25,974,635 6,823,998
Janus Flexible Income ......................... 37,308,601 31,089,136
Kayne Rising Dividends ........................ 11,667,133 1,240,217
Kayne Small-Cap Quality Value ................. 3,542,206 941,609
Lazard International Equity Select ............ 22,041,052 1,024,755
Lazard Small-Cap Value ........................ 8,108,472 3,427,699
Lazard U.S. Multi-Cap ......................... 3,466,372 2,134,330
Lord Abbett Bond-Debenture .................... 12,497,583 3,878,297
Lord Abbett Large-Cap Value ................... 29,095,762 3,861,178
Lord Abbett Mid-Cap Value ..................... 8,261,183 991,759
MFS Investors Growth Stock .................... 148,554,913 148,647,653
MFS Investors Trust ........................... 6,856,792 4,818,543
MFS Value ..................................... 24,991,719 17,671,987
224
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
SECURITIES (CONTINUED) PURCHASES SALES
--------- ------------ ------------
Northern Dow 30 ............................... $ 9,950,929 $ 6,892,198
Northern Nasdaq-100 Index(R) .................. 11,880,740 2,523,920
Oakhurst Growth and Income .................... 53,831,179 47,463,587
Oakhurst Strategic Allocation ................. 358,220,503 368,620,093
Oakhurst Value Equity ......................... 299,186,117 294,854,324
Sanford Bernstein Global Value ................ 5,206,228 2,431,714
Sanford Bernstein Mid-Cap Value ............... 19,625,150 18,923,788
Sanford Bernstein Small-Cap Value ............. 12,630,877 12,634,720
Seneca Mid-Cap Growth ......................... 89,921,273 91,750,863
Seneca Strategic Theme ........................ 75,736,665 84,956,925
State Street Research Small-Cap Growth ........ 19,622,856 11,955,792
There were no purchases or sales of such securities in Goodwin Money Market.
Purchases and sales of long-term U.S. Government securities during the
period ended December 31, 2003, aggregated the following:
PURCHASES SALES
----------- -----------
Goodwin Multi-Sector Fixed Income ............. $13,021,694 $26,873,932
Goodwin Multi-Sector Short Term Bond .......... 1,734,067 430,188
Janus Flexible Income ......................... 43,171,079 43,342,609
Lord Abbett Bond-Debenture .................... 359,405 183,864
MFS Investors Growth Stock .................... -- 66,695
Oakhurst Strategic Allocation ................. 15,507,248 21,815,664
NOTE 5--FORWARD CURRENCY CONTRACTS
As of December 31, 2003, Janus Flexible Income has entered into the
following forward currency contracts which contractually obligate the series
to receive currency at the specified date:
NET UNREALIZED
CONTRACT TO RECEIVE IN EXCHANGE FOR SETTLEMENT DATE VALUE APPRECIATION (DEPRECIATION)
--------------------------------------------------------------------------------------------------------------
USD $1,049,695 EUR 915,000 3/26/04 $(1,147,258) $(97,563)
USD United States Dollar
EUR Euro
NOTE 6--FUTURES CONTRACTS
At December 31, 2003, the following series had entered into futures
contracts as follows:
VALUE OF NET
NUMBER CONTRACTS MARKET UNREALIZED
EXPIRATION OF WHEN VALUE OF APPRECIATION
DATE CONTRACTS OPENED CONTRACTS (DEPRECIATION)
---------- --------- --------- --------- --------------
Northern Dow 30
Dow Jones Industrial Average Index ...................... March '04 8 $805,900 $833,200 $27,300
Northern Nasdaq-100 Index(R)
Nasdaq-100 Index ........................................ March '04 23 656,144 676,660 20,516
Sanford Bernstein Global Value
FTSE 100 Index .......................................... March '04 1 75,616 77,848 2,232
DJ Eur STOXX 50 Index ................................... March '04 2 65,452 67,596 2,144
NOTE 7--CREDIT RISK AND CONCENTRATIONS
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 a
series' ability to repatriate such amounts.
Certain series may invest a high percentage of their assets in specific
sectors of the market in their pursuit of a greater investment return.
Fluctuations in these sectors of concentration may have a greater impact on
a series, positive or negative, than if a series did not concentrate its
investments in such sectors.
High yield/high risk securities typically entail greater price volatility
and/or principal and interest rate risk. There is a greater chance that an
issuer will not be able to make principal and interest payments on time.
Analysis of the creditworthiness of issuers of high yield securities may be
complex, and as a result, it may be more difficult for the adviser and/or
subadviser to accurately predict risk.
225
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
NOTE 8--RESTRICTED SECURITIES
At December 31, 2003, the Fund held the following restricted securities:
ACQUISITION DATE ACQUISITION COST
---------------- ----------------
Janus Flexible Income
---------------------
Candescent Technologies Corp. Cv. 144A 8%, 5/1/03 ............ 3/6/00 $ 40,000
Oakhurst Strategic Allocation
-----------------------------
ITW Cupids Financial Trust I 144A 6.55%, 12/31/11 ............ 4/18/02 1,996,980
State Street Research Small-Cap Growth
--------------------------------------
Amedisys, Inc. ............................................... 11/20/03 73,200
Each series will bear any costs, including those involved in registration
under the Securities Act of 1933, in connection with the disposition of such
securities.
NOTE 9--FEDERAL INCOME TAX INFORMATION
The following series have capital loss carryovers which may be used to
offset future capital gains.
EXPIRATION YEAR
-----------------------------------------------------------
2005 2006 2007 2008 2009
---------- -------- ---------- ---------- ------------
Aberdeen International .............. $1,280,431 $ -- $ -- $ 295,786 $ 26,725,829
AIM Mid-Cap Equity .................. -- -- -- -- --
Alliance/Bernstein Enhanced Index ... -- -- -- -- 5,915,199
Alliance/Bernstein Growth + Value ... -- -- -- -- --
Engemann Capital Growth ............. 30,157 590,466 5,141,805 11,718,126 287,550,532
Engemann Small & Mid-Cap Growth ..... -- -- -- 302,334 1,838,456
Goodwin Multi-Sector Fixed Income ... -- -- 5,353,161 6,659,630 4,980,791
Goodwin Multi-Sector Short Term Bond -- -- -- -- --
MFS Investors Growth Stock .......... -- -- 574,679 6,196,948 18,423,160
MFS Investors Trust ................. -- -- -- -- --
MFS Value ........................... -- -- -- -- --
Northern Dow 30 ..................... -- -- -- -- --
Northern Nasdaq-100 Index(R) ........ -- -- -- 35,822 775,525
Oakhurst Growth and Income .......... -- -- -- -- 3,195,522
Oakhurst Strategic Allocation ....... -- -- -- -- 5,639,688
Oakhurst Value Equity ............... -- -- -- -- --
Sanford Bernstein Global Value ...... -- -- -- -- --
Seneca Mid-Cap Growth ............... -- -- -- -- 20,367,702
Seneca Strategic Theme .............. -- -- -- -- 73,480,758
EXPIRATION YEAR
--------------------------------------
2010 2011 TOTAL
----------- ------------ ------------
Aberdeen International .............. $21,729,527 $19,740,631 $ 69,772,204
AIM Mid-Cap Equity .................. 41,525 -- 41,525
Alliance/Bernstein Enhanced Index ... 15,534,573 7,723,071 29,172,843
Alliance/Bernstein Growth + Value ... 462,448 303,453 765,901
Engemann Capital Growth ............. 73,263,809 5,973,373 384,268,268
Engemann Small & Mid-Cap Growth ..... 4,227,881 744,060 7,112,731
Goodwin Multi-Sector Fixed Income ... 7,850,329 -- 24,843,911
Goodwin Multi-Sector Short Term Bond -- 18,992 18,992
MFS Investors Growth Stock .......... 18,330,727 11,077,954 54,603,468
MFS Investors Trust ................. 326,812 6,486 333,298
MFS Value ........................... 159,310 -- 159,310
Northern Dow 30 ..................... 537,400 -- 537,400
Northern Nasdaq-100 Index(R) ........ 542,317 931,918 2,285,582
Oakhurst Growth and Income .......... 11,717,280 5,419,237 20,332,039
Oakhurst Strategic Allocation ....... 13,194,113 -- 18,833,801
Oakhurst Value Equity ............... 16,820,901 -- 16,820,901
Sanford Bernstein Global Value ...... 441,697 174,094 615,791
Seneca Mid-Cap Growth ............... 16,035,347 -- 36,403,049
Seneca Strategic Theme .............. 27,319,632 -- 100,800,390
Included in the Aberdeen International amounts are $2,547,074, which were
acquired in connection with the merger of the Aberdeen New Asia Series on
February 7, 2003.
Included in the Engemann Capital Growth's amounts are $23,491,846, which
were acquired in connection with the merger of the Engemann Nifty Fifty
Series on April 5, 2002.
Included in the MFS Investors Growth Stock's amounts (formerly Janus Growth
Series) are $4,002,162; $3,586,175; and $974,489, respectively, which were
acquired in connection with the mergers of the Janus Core Equity Series on
March 22, 2002; Van Kampen Focus Equity Series on February 14, 2003; and MFS
Investors Growth Stock Series on February 14, 2003.
A series may not realize the benefit of these losses to the extent it does
not realize gains on investments prior to the expiration of the capital loss
carryovers.
The following series utilized losses deferred in prior years against current
year capital gains as follows:
AIM Mid-Cap Equity ........................................... $ 73,907
Goodwin Multi-Sector Fixed Income ............................ 10,470,349
Kayne Rising Dividends ....................................... 1,272
Lazard International Equity Select ........................... 6,382
Lazard Small-Cap Value ....................................... 34,138
Lazard U.S. Multi-Cap ........................................ 29,286
Lord Abbett Large-Cap Value .................................. 1,853
Lord Abbett Mid-Cap Value .................................... 2,674
MFS Value .................................................... 329,628
Northern Dow 30 .............................................. 299,421
Oakhurst Strategic Allocation ................................ 6,056,008
Oakhurst Value Equity ........................................ 6,696,639
Seneca Mid-Cap Growth ........................................ 1,071,201
Seneca Strategic Theme ....................................... 544,422
226
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
Under current tax law, foreign currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following tax year. For the period ended December 31, 2003, the following
series deferred and/or recognized post-October losses as follows:
DEFERRED RECOGNIZED
-------- ----------
Aberdeen International ............................ $ 1,072 $7,050,819
AIM Mid-Cap Equity ................................ -- 11,759
Alliance/Bernstein Enhanced Index ................. 125,036 975,620
Alliance/Bernstein Growth + Value ................. 6,532 82,093
Duff & Phelps Real Estate Securities .............. -- 20,836
Engemann Small & Mid-Cap Growth ................... 202,986 277,556
Goodwin Multi-Sector Short Term Bond .............. 14,000 --
Janus Flexible Income ............................. 38,279 66,201
Kayne Rising Dividends ............................ -- 9,406
Kayne Small-Cap Quality Value ..................... 4,558 --
Lazard U.S. Multi-Cap ............................. -- 8,434
Lord Abbett Bond-Debenture ........................ 6,140 --
Lord Abbett Large-Cap Value ....................... -- 2,380
Lord Abbett Mid-Cap Value ......................... 42,552 10,110
MFS Investors Growth Stock ........................ 142,496 1,290,411
MFS Investors Trust ............................... 12,736 54,961
MFS Value ......................................... -- 147,026
Northern Dow 30 ................................... -- 109,524
Northern Nasdaq-100 Index(R) ...................... 506,649 1,111,085
Oakhurst Growth and Income ........................ 178,131 4,643,917
Oakhurst Strategic Allocation ..................... 102,568 5,839,939
Oakhurst Value Equity ............................. 236,249 1,409,807
Sanford Bernstein Global Value .................... 55,774 87,304
Seneca Mid-Cap Growth ............................. -- 1,917,533
Seneca Strategic Theme ............................ -- 2,226,969
As of December 31, 2003, the components of distributable earnings on a tax
basis (excluding unrealized appreciation (depreciation) which is disclosed
in the respective schedules of investments) were as follows:
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY LONG-TERM
INCOME CAPITAL GAINS
------------- -------------
Aberdeen International ....................... $475,063 $ --
AIM Mid-Cap Equity ........................... -- --
Alliance/Bernstein Enhanced Index ............ 126,805 --
Alliance/Bernstein Growth + Value ............ -- --
Duff & Phelps Real Estate Securities ......... 229,711 573,404
Engemann Capital Growth ...................... 416,400 --
Engemann Small & Mid-Cap Growth .............. -- --
Goodwin Money Market ......................... -- --
Goodwin Multi-Sector Fixed Income ............ 755,101 --
Goodwin Multi-Sector Short Term Bond ......... -- --
Janus Flexible Income ........................ 181,704 91,888
Kayne Rising Dividends ....................... -- --
Kayne Small-Cap Quality Value ................ 16,151 --
Lazard International Equity Select ........... -- --
Lazard Small-Cap Value ....................... 35,340 14,224
Lazard U.S. Multi-Cap ........................ 7,623 27,342
Lord Abbett Bond-Debenture ................... 2,347 --
Lord Abbett Large-Cap Value .................. 79,676 19,511
Lord Abbett Mid-Cap Value .................... -- --
MFS Investors Growth Stock ................... -- --
MFS Investors Trust .......................... 4,428 --
MFS Value .................................... -- --
Northern Dow 30 .............................. 45,147 --
Northern Nasdaq-100 Index(R) ................. -- --
Oakhurst Growth and Income ................... 199,110 --
Oakhurst Strategic Allocation ................ 374,989 --
Oakhurst Value Equity ........................ 82,342 --
Sanford Bernstein Global Value ............... -- --
Sanford Bernstein Mid-Cap Value .............. 238,261 791,797
Sanford Bernstein Small-Cap Value ............ 284,700 --
Seneca Mid-Cap Growth ........................ -- --
Seneca Strategic Theme ....................... -- --
State Street Research Small-Cap Growth ....... 254,538 30,955
227
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
The differences between the book and tax basis components of distributable
earnings relate principally to the timing of recognition of income and gains
for federal income tax purposes. Short-term gains distributions reported in
the Statements of Changes in Net Assets, if any, are reported as ordinary
income for federal tax purposes.
NOTE 10--RECLASSIFICATION OF CAPITAL ACCOUNTS
For financial reporting purposes, book basis capital accounts are adjusted
to reflect the tax character of permanent book/tax differences. Permanent
reclassifications can arise from differing treatment of certain income and
gain transactions, nondeductible current year net operating losses, expiring
capital loss carryovers and investments in passive foreign investment
companies. The reclassifications have no impact on the net assets or net
asset values of the series. As of December 31, 2003, the following series
recorded reclassifications to increase (decrease) the accounts listed below:
UNDISTRIBUTED ACCUMULATED CAPITAL PAID IN
NET INVESTMENT NET REALIZED ON SHARES OF
INCOME (LOSS) GAIN (LOSS) BENEFICIAL INTEREST
-------------- ------------ -------------------
Aberdeen International ................................... $ 51,526 $(2,671,451) $2,619,925
AIM Mid-Cap Equity ....................................... 5,779 -- (5,779)
Alliance/Bernstein Enhanced Index ........................ (14,606) 13,517 1,089
Alliance/Bernstein Growth + Value ........................ (190) -- 190
Duff & Phelps Real Estate Securities ..................... 16,240 (16,240) --
Engemann Small & Mid-Cap Growth .......................... 154,046 -- (154,046)
Goodwin Multi-Sector Fixed Income ........................ 95,493 (30,875) (64,618)
Goodwin Multi-Sector Short Term Bond ..................... 651 4,341 (4,992)
Janus Flexible Income .................................... (35,661) 36,496 (835)
Kayne Rising Dividends ................................... (619) -- 619
Lazard International Equity Select ....................... 7,849 -- (7,849)
Lazard Small-Cap Value ................................... (6,922) 2,190 4,732
Lazard U.S. Multi-Cap .................................... (37) -- 37
Lord Abbett Bond-Debenture ............................... 5,123 (3,768) (1,355)
Lord Abbett Mid-Cap Value ................................ (987) 1,395 (408)
MFS Investors Growth Stock ............................... 64,164 (6,179,876) 6,115,712
MFS Investors Trust ...................................... (203) 203 --
MFS Value ................................................ (839) 463 376
Northern Nasdaq-100 Index(R) ............................. 50,930 1 (50,931)
Oakhurst Growth and Income ............................... (10,951) 8,716 2,235
Oakhurst Strategic Allocation ............................ 43,398 (43,398) --
Oakhurst Value Equity .................................... (33,226) 37,567 (4,341)
Sanford Bernstein Global Value ........................... 13,477 (11,159) (2,318)
Sanford Bernstein Mid-Cap Value .......................... (95,765) 131,344 (35,579)
Sanford Bernstein Small-Cap Value ........................ (50,772) 57,364 (6,592)
Seneca Mid-Cap Growth .................................... 362,367 -- (362,367)
Seneca Strategic Theme ................................... 227,324 -- (227,324)
State Street Research Small-Cap Growth ................... 51,539 (51,539) --
NOTE 11--MERGERS
On February 7, 2003, Aberdeen International acquired all of the net assets
of Aberdeen New Asia pursuant to an Agreement and Plan of Reorganization
approved by Aberdeen New Asia shareholders on January 7, 2003. The
acquisition was accomplished by a tax-free exchange of 1,885,115 shares of
Aberdeen International valued at $14,391,123 for 1,913,078 shares of
Aberdeen New Asia outstanding on February 7, 2003. Aberdeen New Asia's net
assets on that date of $14,391,123, including $618,515 of net unrealized
depreciation were combined with those of Aberdeen International. The
aggregate net assets of Aberdeen International immediately after the merger
were $116,991,498.
On February 14, 2003, Janus Growth acquired all of the net assets of MFS
Investors Growth Stock ("Growth Stock") and Van Kampen Focus Equity ("Focus
Equity") pursuant to an Agreement and Plan of reorganization approved by
Growth Stock and Focus Equity shareholders on February 14, 2003. The
acquisition was accomplished by a tax-free exchange of 2,496,714 shares of
Janus Growth outstanding on February 14, 2003 for 782,923 shares of Growth
Stock valued at $5,807,615 and 1,169,922 shares of Focus Equity valued at
$6,179,826. Growth Stock's net assets of $5,807,615, including $135,964 of
net unrealized depreciation and Focus Equity's net assets of $6,179,826,
including $380,781 of net unrealized depreciation were combined with those
of Janus Growth. The aggregate net assets of Janus Growth immediately after
the merger were $63,057,943. Immediately following the merger, Janus Growth
was renamed MFS Investors Growth Stock. Immediately prior to the Special
Meeting of Shareholders, Phoenix Variable Advisors, Inc. ("PVA"), as
authorized pursuant to an exemptive order from the Securities and Exchange
Commission, replaced Janus Capital Management LLC with MFS Investment
Management ("MFS") as subadvisor to the series. PVA and MFS have also agreed
that they would serve as advisor and subadvisor, respectively, to the series
for the same management fees as currently charged to the former Phoenix-MFS
Investors Growth Stock Series. Accordingly, the annual expenses and expense
cap reimbursements for the series are the same as those of the former
Phoenix-MFS Investors Growth Stock Series. MFS is going to manage the series
in a manner comparable with the former Phoenix-MFS Investors Growth Stock
Series. As part of the reorganizations, the series has been renamed
Phoenix-MFS Investors Growth Stock Series.
228
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
On March 22, 2002, Janus Growth ("Growth") acquired all of the net assets of
Janus Core Equity ("Core Equity") pursuant to an Agreement and Plan of
Reorganization approved by Core Equity shareholders on March 18, 2002. The
acquisition was accomplished by a tax-free exchange of 3,141,426 shares of
Growth valued at $22,032,065 for 2,467,046 shares of Core Equity outstanding
on March 22, 2002. Core Equity's net assets on that date of $22,032,065,
including $1,473,521 of net unrealized appreciation were combined with those
of Growth. The aggregate net assets of Growth immediately after the merger
were $90,807,708.
On April 5, 2002, Engemann Capital Growth ("Capital Growth") acquired all of
the net assets of Engemann Nifty Fifty ("Nifty Fifty") pursuant to an
Agreement and Plan of Reorganization approved by Nifty Fifty shareholders on
March 18, 2002. The acquisition was accomplished by a tax-free exchange of
2,949,789 shares of Capital Growth valued at $39,773,479 for 4,885,261
shares of Nifty Fifty outstanding on April 5, 2002. Nifty Fifty's net assets
on that date of $39,773,479, including $7,975,458 of net unrealized
depreciation were combined with those of Capital Growth. The aggregate net
assets of Capital Growth immediately after the merger were $862,917,192.
On April 5, 2002, Oakhurst Strategic Allocation ("Strategic Allocation")
acquired all of the net assets of Oakhurst Balanced ("Balanced") pursuant to
an Agreement and Plan of Reorganization approved by Balanced shareholders on
March 18, 2002. The acquisition was accomplished by a tax-free exchange of
17,438,879 shares of Strategic Allocation valued at $236,890,944 for
19,697,824 shares of Balanced outstanding on April 5, 2002. Balanced's net
assets on that date of $236,890,944, including $25,034,492 of net unrealized
appreciation were combined with those of Strategic Allocation. The aggregate
net assets of Strategic Allocation immediately after the merger were
$582,665,031.
NOTE 12--MANAGER OF MANAGERS
The Fund and PVA have received an exemptive order from the Securities and
Exchange Commission ("SEC") granting exemptions from certain provisions of
the Investment Company Act of 1940, as amended, pursuant to which PVA will,
subject to supervision and approval of the Fund's Board of Trustees, be
permitted to enter into and materially amend subadvisory agreements without
such agreements being approved by the shareholders of the applicable series
of the Fund. The Fund and PVA will therefore have the right to hire,
terminate, or replace subadvisors without shareholder approval, including,
without limitation, the replacement or reinstatement of any subadvisor with
respect to which a subadvisory agreement has automatically terminated as a
result of an assignment. PVA will continue to have the ultimate
responsibility to oversee the subadvisors and recommend their hiring,
termination and replacement.
NOTE 13--MIXED AND SHARED FUNDING
Shares of the Fund are not directly offered to the public. Shares of the
Fund are currently offered through separate accounts to fund variable
accumulation annuity contracts and variable universal life insurance
policies issued by Phoenix Life Insurance Company ("Phoenix"), PHL Variable
Insurance Company ("PHL Variable"), and Phoenix Life and Annuity Company
("PLAC"). Shares of the Fund may be offered to separate accounts of other
insurance companies in the future.
The interests of variable annuity contract owners and variable life policy
owners could diverge based on differences in federal and state regulatory
requirements, tax laws, investment management or other unanticipated
developments. The Fund's Trustees currently do not foresee any such
differences or disadvantages at this time. However, the Fund's Trustees
intend to monitor for any material conflicts and will determine what action,
if any, should be taken in response to such conflicts. If such a conflict
should occur, one or more separate accounts may be required to withdraw its
investment in the Fund or shares of another fund may be substituted.
NOTE 14--PROPOSED REORGANIZATION
On November 11, 2003, The Board of Trustees of The Fund approved a Plan of
Reorganization to merge Janus Flexible Income into Goodwin Multi-Sector
Fixed Income.
If the shareholders approve the Plan of Reorganization Janus Flexible Income
will transfer all or substantially all of its assets and its liabilities to
Goodwin Multi-Sector Fixed Income. In exchange, shareholders of Janus
Flexible Income will receive a proportional number of shares in Goodwin
Multi-Sector Fixed Income. The shareholders of Janus Flexible Income must
approve the Plan of Reorganization before any transaction can take place.
The next meeting of the shareholders of Janus Flexible Income will be held
on March 17, 2004, at which time, this matter will be submitted for a
shareholder vote.
NOTE 15--OTHER
Effective July 31, 2003, the name of the subadvisor of Northern Dow 30 and
Northern Nasdaq-100 Index(R) changed to Northern Trust Investments N.A. from
Northern Trust Investments, Inc.
On October 23, 2003, the Executive Committee of the Board of Trustees of the
Fund approved replacement of the "Hollister" division of PIC with the
"Oakhurst" division of PIC with respect to investment management of Oakhurst
Value Equity. The Executive Committee also approved a name change for the
Phoenix-Hollister Value Equity Series to the Phoenix-Oakhurst Value Equity
Series. The Board of Trustees ratified the Executive Committee's decision at
the Board of Trustees meeting on November 11, 2003. This series' investment
objectives, principal investment strategies and principal risks will remain
the same. The fees and expenses associated with the series will not be
affected as a result of this change.
The Board of Trustees of the Fund has approved a name change for the
Phoenix-Kayne Large-Cap Core Series to the Phoenix-Kayne Rising Dividends
Series. This series' investment objectives, principal investment strategies
and principal risks will remain the same. The fees and expenses associated
with the series will not be affected as a result of this change. This change
was completed on November 3, 2003.
229
THE PHOENIX EDGE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2003
Effective December 31, 2003, the name of the subadvisor of Engemann Capital
Growth and Engemann Small & Mid-Cap Growth changed to Engemann Asset
Management from Roger Engemann & Associates, Inc.
NOTE 16--PROXY VOTING PROCEDURES
The advisers and subadvisers to each of the Phoenix-affiliated Funds vote
proxies relating to portfolio securities in accordance with procedures that
have been approved by the Boards of Trustees of the Fund. You may obtain a
description of these procedures, free of charge, by calling toll-free
800-541-0171. This information is also available through the Securities and
Exchange Commission's website at http://www.sec.gov.
- --------------------------------------------------------------------------------
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended December 31, 2003, the following series designated
long-term capital gain dividends as follows:
Duff & Phelps Real Estate Securities ....................... $2,709,205
Janus Flexible Income ...................................... 506,397
Kayne Rising Dividends ..................................... 4,744
Lazard International Equity Select ......................... 197
Lazard Small-Cap Value ..................................... 52,651
Lazard U.S. Multi-Cap ...................................... 71,565
Lord Abbett Bond-Debenture ................................. 17,646
Lord Abbett Large-Cap Value ................................ 19,511
Lord Abbett Mid-Cap Value .................................. 2,585
Sanford Bernstein Mid-Cap Value ............................ 2,821,361
State Street Research Small-Cap Growth ..................... 74,219
- --------------------------------------------------------------------------------
230
REPORT OF INDEPENDENT AUDITORS
(LOGO)
PRICEWATERHOUSECOOPERS
[GRAPHIC OMITTED]
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
THE PHOENIX EDGE SERIES FUND
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, 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 each of the series constituting The
Phoenix Edge Series Fund (hereafter referred to as the "Fund") at December 31,
2003, the results of each of their operations, the changes in each of their net
assets, and the financial highlights for the periods indicated, in conformity
with accounting principles generally accepted in the United States of America.
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 auditing standards generally accepted in the United States of America,
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 December 31, 2003, by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
February 13, 2004
231
FUND MANAGEMENT
Information pertaining to the Trustees and officers of the Trust is set forth
below. The statement of additional information (SAI) includes additional
information about the Trustees and is available without charge, upon request, by
calling (800) 541-0171.
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER TRUSTEESHIPS/
NAME, (DOB), ADDRESS AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
POSITION(S) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Frank M. Ellmer, CPA Served since Retired; previously Partner, 33 None
704 SW Lake Charles Circle 1999 Ernst & Young LLP (1962-1999).
Port St. Lucie, FL 34986
4/11/40
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John A. Fabian Served since Retired 33 None
497 Hensler Lane 1999
Oradell, NJ 07649
2/5/34
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Roger A. Gelfenbien Served since Retired; previously Consultant, Accenture 33 Director, Webster Bank
37 Stonegate Drive 2000 (1978-1999). (4/2003-present). Chairman
Wethersfield, CT 06109 Board of Trustees at The
5/14/43 University of Connecticut
Trustee (1997-2003). Director,
USAllianz Variable
Insurance Product Trust,
23 funds (1999-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Eunice S. Groark Served since Self-employed; previously Visiting Professor 33 Director, Peoples' Bank
38 Saddle Ridge Drive 1999 in Government, Wesleyan University (1995-present).
Bloomfield, CT 06002 (1997-1999); Columnist, Journal-Inquirer
2/1/38 (1995-2000).
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Frank E. Grzelecki Served since Retired; previously Managing Director, 33 Director, Barnes Group,
38 Gerrish Lane 2000 Saugatuck Associates, Inc. (1999-2000); Inc. (1997-present).
New Canaan, CT 06840 Vice Chairman, (1997-1998).
6/19/37
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John R. Mallin Served since Principal/Attorney McCarter & English, LLP 33 None
McCarter & English, LLP 1999 (2003-present); Principal/Attorney, Cummings
City Place 1 & Lockwood, LLC (1996-2003).
185 Asylum St.
Hartford, CT 06103
7/28/50
Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
232
FUND MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER TRUSTEESHIPS/
NAME, (DOB), ADDRESS AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
POSITION(S) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Philip R. McLoughlin Served since Consultant, Phoenix Investment Partners Ltd. 78 N/A
56 Prospect Street 2003. (2002-present). Director, PXRE Corporation
Hartford, CT 06115-0480 (Delaware) (1985-present), World Trust Fund
10/23/46 (1991-present). Chairman (1997-2002),
Director (1995-2002), Vice Chairman
Trustee/Chairman/President (1995-1997) and Chief Executive Officer
(1995-2002), Phoenix Investment Partners,
Ltd. Director and Executive Vice President,
The Phoenix Companies, Inc. (2000-2002).
Director (1994-2002) and Executive Vice
President, Investments (1987-2002), Phoenix
Life Insurance Company. Director (1983-2002)
and Chairman (1995-2002), Phoenix Investment
Counsel, Inc. Director (1982-2002) and
President (1990-2000), Phoenix Equity
Planning Corporation. Chairman and
President, Phoenix/Zweig Advisers LLC
(2001-2002). Director (2001-2002) and
President (April 2002-September 2002),
Phoenix Investment Management Company.
Director and Executive Vice President,
Phoenix Life and Annuity Company
(1996-2002). Director (1995-2000) and
Executive Vice President (1994-2002), PHL
Variable Insurance Company. Director,
Phoenix National Trust Holding Company
(2001-2002). Director (1985-2002) and Vice
President (1986-2002), PM Holdings, Inc.
Director, W.S. Griffith Associates, Inc.
(1995-2002). Director (1992-2002) and
President (1993-1994), W.S. Griffith
Securities, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Michael J. Gilotti Executive Various positions including Executive Vice 33 None
One American Row Vice President, Phoenix Life Insurance Company
Hartford, CT 06102 President - (1999-present). Director, Bank and
5/25/47 Served since Broker/Dealer Operations, Aetna (1994-1999).
Trustee/Executive Vice 1999; Director, Phoenix Variable Advisors, Inc.
President Trustee - (2000-present). Director, Senior Vice
Served since President, Phoenix Life and Annuity Company
2002 (2002-present). Director, Senior Vice
President, PHL Variable Insurance Company
(2002-present). Director, Main Street
Management Company (2000-present).
- ------------------------------------------------------------------------------------------------------------------------------------
233
FUND MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX OTHER TRUSTEESHIPS/
NAME, (DOB), ADDRESS AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
POSITION(S) WITH TRUST TIME SERVED DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICER(S) WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Nancy G. Curtiss Served since Treasurer, The Phoenix Edge Series Fund N/A N/A
56 Prospect Street 1994 (1994-present), Phoenix Funds
Hartford, CT 06115 (1994-present), Phoenix Duff & Phelps
11/24/52 Institutional Mutual Funds (1996-present),
Vice President, Treasurer and Phoenix-Aberdeen Series Fund (1996-present)
Principal Accounting Officer and Phoenix-Seneca Funds (2000-present).
Vice President and Treasurer (1994-present),
Phoenix Equity Planning Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Doreen A. Bonner Served since Vice President and Compliance Officer, The N/A N/A
One American Row 1999 Phoenix Edge Series Fund (1999-present).
Hartford, CT 06102 Director (manager type), Individual Market
2/21/56 Development, Phoenix Life Insurance Company
Vice President and (1997-present). Vice President and
Compliance Officer Compliance Officer, Phoenix Variable
Advisors, Inc. (1999-present). Vice
President and Compliance Officer, Phoenix
Investment Counsel, Inc. (1/2003-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Richard J. Wirth Served since Vice President, Secretary and Chief Legal N/A N/A
One American Row 2001 Officer, The Phoenix Edge Series Fund
Hartford, CT 06102 (2001-present). Various positions including
11/14/58 Vice President and Insurance and Investment
Vice President, Secretary Products Counsel, Phoenix Life Insurance
and Chief Legal Officer Company (1993-present).
- ------------------------------------------------------------------------------------------------------------------------------------
234
THE PHOENIX EDGE SERIES FUND
101 Munson Street
Greenfield, Massachusetts 01301
BOARD OF TRUSTEES
Frank M. Ellmer, CPA
John A. Fabian
Roger A. Gelfenbien
Michael J. Gilotti
Eunice S. Groark
Frank E. Grzelecki
John R. Mallin
Philip R. McLoughlin
EXECUTIVE OFFICERS
Philip R. McLoughlin, Chairman and President
Michael J. Gilotti, Executive Vice President
Nancy G. Curtiss, Vice President, Treasurer, and
Principal Accounting Officer
Doreen A. Bonner, Vice President and
Compliance Officer
Richard J. Wirth, Vice President,
Counsel and Secretary
INVESTMENT ADVISORS
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
Duff & Phelps Investment Management Co.
55 East Monroe Street, Suite 3600
Chicago, Illinois 60603
Phoenix Variable Advisors, Inc.
One American Row
Hartford, Connecticut 06102-5056
CUSTODIANS
JP Morgan Chase Bank
270 Park Avenue
New York, New York 10017-2070
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
125 High Street
Boston, Massachusetts 02110
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PHOENIX LIFE INSURANCE COMPANY PRSRT STD
P.O. Box 22012 U.S. Postage
Albany, NY 12201-2012 P A I D
Andrew
Associates
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Phoenix Life Insurance Company
A member of The Phoenix Companies, Inc.
PhoenixWealthManagement.com
[GRAPHIC OMITTED] PHOENIX WEALTH MANAGEMENT(R)
G0144AR (C)2004 The Phoenix Companies, Inc.
[GRAPHIC OMITTED] PRINTED ON RECYCLED PAPER. 2-04
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(b) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(c) The registrant has not granted any waivers during the period covered by
this report, including an implicit waiver, from a provision of the code
of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third
party, that relates to one or more of the items set forth in paragraph
(b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the Board of Trustees of the
Fund has determined that Frank M. Ellmer possesses the technical attributes
identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit
committee financial expert". Mr. Ellmer is an "independent" trustee pursuant to
paragraph (a) (2) of Item 3 to form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
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(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$643,820 for 2002 and $774,060 for 2003.
Audit-related Fees
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(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the
registrant's financial statements and are not reported under paragraph
(a) of this Item are $0 for 2002 and $0 for 2003.
Tax Fees
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(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $135,200 for 2002 and
$136,750 for 2003.
"Tax Fees" are those primarily associated with review of the Fund's tax
provision and qualification as a regulated investment company (RIC) in
connection with audits of the Fund's financial statement, review of
year-end distributions by the Fund to avoid excise tax for the Fund,
periodic discussion with management on tax issues affecting the Fund,
and reviewing and signing the Fund's federal income and excise tax
returns.
All Other Fees
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(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2002 and $0 for 2003.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
The Phoenix Edge Series Fund (the "Fund") Board has adopted policies and
procedures with regard to the pre-approval of services provided by PwC. Audit,
audit-related and tax compliance services provided to the Fund on an annual
basis require specific pre-approval by the Board. As noted above, the Board must
also approve other non-audit services provided to the Fund and those non-audit
services provided to the Fund's Affiliated Service Providers that relate
directly to the operations and financial reporting of the Fund. Certain of these
non-audit services that the Board believes are a) consistent with the SEC's
auditor independence rules and b) routine and recurring services that will not
impair the independence of the independent auditors may be approved by the Board
without consideration on a specific case-by-case basis ("general pre-approval").
The Audit Committee has determined that Mr. Frank M. Ellmer, Chair of the Audit
Committee, may provide pre-approval for such services that meet the above
requirements in the event such approval is sought between regularly scheduled
meetings. In the event that Mr. Ellmer determines that the full board should
review the request, he has the opportunity to convene a meeting of the Funds
Board. In any event, the Board is informed of each service approved subject to
general pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X
are as follows:
(b) Not applicable.
(c) 100%
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the
most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent
employees was less than fifty percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $248,000 for 2002 and $112,750 for 2003.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940,
as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective,
as of a date within 90 days of the filing date of the report that
includes the disclosure required by this paragraph, based on their
evaluation of these controls and procedures required by Rule
30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934,
as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Phoenix Edge Series Fund
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By (Signature and Title)* /s/ Philip R. McLoughlin
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Philip R. McLoughlin, Chairman
(principal executive officer)
Date March 8, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Philip R. McLoughlin
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Philip R. McLoughlin, Chairman
(principal executive officer)
Date March 8, 2004
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By (Signature and Title)* /s/ Nancy G. Curtiss
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Nancy G. Curtiss, Treasurer
(principal financial officer)
Date March 8, 2004
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* Print the name and title of each signing officer under his or her signature.