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 811-07643
---------
Phoenix Partner Select Funds
------------------------------------------------------------------
(Exact name of registrant as specified in charter)
56 Prospect Street
P.O. Box 150480
Hartford, CT 06115-0480
------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
PFPC Inc.
301 Bellevue Parkway
Wilmington, DE 19809
------------------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 302-791-3197
------------
Date of fiscal year end: July 31, 2004
-------------
Date of reporting period: July 31, 2004
-------------
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.
The Report to Shareholders is attached herewith.
Annual Report
[GRAPHIC OMITTED] JULY 31, 2004
PHOENIX
PARTNER [GRAPHIC OMITTED] SELECT
Phoenix Partner Select Wealth Builder Fund
Phoenix Partner Select Wealth Guardian Fund
[GRAPHIC OMITTED]
Do you want to stop receiving fund documents by mail?
Go to PhoenixInvestments.com, log in and sign up for E-Delivery
[GRAPHIC OMITTED] PHOENIX
INVESTMENT PARTNERS, LTD.
COMMITTED TO INVESTOR SUCCESS(SM)
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
This report is not authorized for distribution to prospective investors in
the Phoenix Partner Select Funds unless preceded or accompanied by an effective
Prospectus which includes information concerning the sales charge, each Fund's
record and other pertinent information.
MESSAGE FROM THE CHAIRMAN
[GRAPHIC OMITTED]
DEAR SHAREHOLDER:
I encourage you to review the performance overview and outlook provided in
this annual report for the Phoenix Partner Select Funds for the fiscal year
ended July 31, 2004.
The U.S. economy appears to have hit a soft patch in recent months with
consumer spending and job growth easing. The markets are concerned about the
inflationary impact of rising energy prices, as well as the likely drag on
economic growth in the second half of the year. In an effort to subdue
inflation, the Federal Reserve Bank has increased short-term interest rates
twice since June and is committed to raising rates at a measured pace in the
future.
As always, short-term performance changes should not distract you from
your long-term financial plan. Now may be an opportune time for you to review
your portfolio with your financial advisor to make sure that your asset
allocation remains on target for you. Keep in mind that finding the best balance
of performance and protection requires discipline and diversification. 1 Your
Partner Select Fund investment may help in this effort.
At this time, the mutual fund industry continues to undergo far-reaching
regulatory reforms. The Phoenix Funds' Board of Trustees takes these matters
seriously and is implementing initiatives to ensure compliance with the letter
and the spirit of all requirements. We are confident that the fund industry will
emerge stronger and more focused on the interests of shareholders as a result.
To learn more about investing and the Phoenix Partner Select Funds,
including monthly portfolio updates, please visit PhoenixInvestments.com.
Sincerely,
/s/ Philip R. McLoughlin
Philip R. McLoughlin
Chairman, Phoenix Funds
AUGUST 31, 2004
1 DIVERSIFICATION DOES NOT GUARANTEE AGAINST A LOSS, AND THERE IS NO GUARANTEE
THAT A DIVERSIFIED PORTFOLIO WILL OUTPERFORM A NON-DIVERSIFIED PORTFOLIO.
The preceding information is the opinion of the Phoenix Funds' Board of
Trustees. There is no guarantee that market forecasts discussed will be
realized.
1
TABLE OF CONTENTS
Phoenix Partner Select Wealth Builder Fund ............................... 3
Phoenix Partner Select Wealth Guardian Fund .............................. 12
Notes to Financial Statements ............................................ 21
2
PHOENIX PARTNER SELECT WEALTH BUILDER FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO OVERLAY MANAGEMENT TEAM
Q: WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A: The Phoenix Partner Select Wealth Builder Fund is an asset allocation fund of
funds that has an investment objective of long-term capital appreciation. There
is no guarantee that the Fund will achieve its objective.
Q: HOW DOES THE FUND SEEK TO ACHIEVE ITS OBJECTIVE?
A: The Fund seeks to achieve its objective by investing in a diversified mix of
mutual funds representing a number of asset classes and investment styles,
including alternative investments. The Fund utilizes independent investment
managers, capitalizing on their expertise in areas of the equity and fixed
income markets. The emphasis on diversification is intended to moderate
volatility by limiting the effect of one investment style. Under normal
conditions, the Fund seeks to achieve a target asset allocation of approximately
80% in equity mutual funds and 20% in bond mutual funds. The Fund's advisor
determines the underlying mutual funds that it believes best represents the
selected asset allocation, monitors the Fund's allocations, and rebalances
assets to maintain the targeted equity and bond allocations. Management of each
underlying mutual fund is responsible for deciding which securities to purchase
and sell for its respective fund.
Q: HOW DID THE FUND PERFORM DURING THE 12 MONTHS ENDED JULY 31, 2004?
A: For the fiscal year ended July 31, 2004, the Fund's Class A shares returned
9.89% and Class C shares returned 9.03%, the S&P 500(R) Index 1 returned 14.33%,
the Lehman Brothers Aggregate Bond Index 2 returned 4.89%, and the Fund's
Composite Index 3 returned 12.47%. 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 earlier.
Q: WHAT FACTORS AFFECTED THE EQUITY MARKETS OVER THE 12 MONTHS ENDED JULY 31,
2004?
A: For the twelve months ending July 31, 2004, the stock market posted solid
returns. A strengthening economy and low interest rates helped generate a
sustained increase in corporate profits. Investors' appetite for risk also
returned following the losses suffered during the 2000-2002 period. Large-cap
stocks, as represented by the S&P 500(R) Index, had a total return of 14.33%.
However, most of the stock market returns for the fiscal year occurred during
the second half of 2003.
During 2004, the equity markets have experienced small negative returns.
Sharply higher oil prices, uncertainty regarding the 2004 presidential election
and continued concern about terrorism weigh on the minds of market participants.
Attention is focused on the continued actions of the Federal Reserve in raising
short-term interest rates. Market participants are fearful that rapidly rising
rates could threaten corporate profits, but too slow an increase could lead to
higher inflation. On the positive side, employment growth has increased over the
last several months and the dollar has rallied against other currencies.
During the fiscal year, small- and mid-capitalization stocks and REIT
stocks posted the strongest returns among U.S. equities. 4
3
Phoenix Partner Select Wealth Builder Fund (continued)
Q: WHAT FACTORS AFFECTED THE BOND MARKET OVER THE 12 MONTHS ENDED JULY 31, 2004?
A: During the fiscal year, interest rate levels were volatile as investors
assessed the strength and duration of the recovery in the U.S. economy. Weak
employment growth and an accommodative Federal Reserve Board helped cause
interest rates to decline from the fall of 2003 through the first quarter of
2004. However, with signs of stronger job gains in April and May, market yields
rose by over 1%. Recently the price of oil and a slowdown in economic growth
have caused interest rates to decline. Whether this decline signals the end of
higher rates, or is simply a pause on the path to even higher yields, continues
to challenge market participants. At the same time, the Federal Reserve Board
has begun to raise short-term interest rates, increasing the federal funds rate
from 1% to 1.5% during 2004.
Given the strength in the economy and increased corporate profits, credit
sensitive sectors of the bond market outperformed U.S. Treasuries during the
fiscal year. Investment grade corporate bonds benefited from improving profits
and strengthened balance sheets. High yield bonds, which were severely punished
in 2001 and 2002, rebounded sharply during the fiscal year and posted among the
highest returns in the bond market. Many corporations took advantage of lower
rates to refinance higher coupon debt and improve their profitability. Given
their higher yields, longer maturity bonds outperformed their shorter maturity
counterparts.
Q: HOW DID THE FUND PERFORM IN THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The Fund's performance has reflected the positive returns for domestic equity
and bond markets during the past 12 months, increasing in line with our
expectation given the market environment in which lower quality, higher risk
stocks dominated equity benchmark returns in the second half of 2003. The Fund
particularly benefited from its allocation to a real estate securities fund,
which invests principally in REITs, as REIT returns exceeded the returns of
other domestic equity indices. The exposure to alternative investments such as
REITs is an important strategy of the Fund to provide diversification and
potentially reduce overall portfolio volatility.
Q: WHAT CHANGES, IF ANY, HAVE BEEN MADE TO THE FUND'S ASSET ALLOCATION OVER THE
PAST 12 MONTHS AND WHY?
A: Early in the fourth quarter of 2003, we added an allocation to a short-term
multi-sector bond fund and reduced the allocations to other bond funds in the
portfolio to help diversify some of the Fund's exposure to interest rate
increases. Other than that addition, there were no other changes to the Fund's
allocations in the past 12 months.
As part of our investment philosophy, we do not believe in trying to time
the market. Our goal is to remain approximately 80% invested in equity mutual
funds and 20% in bond mutual funds. The Fund's allocations are reviewed
regularly and systematic rebalancing is completed as needed to maintain our
goal.
4
Phoenix Partner Select Wealth Builder Fund (continued)
Q: WHAT IS YOUR CURRENT OUTLOOK FOR THE PORTFOLIO?
A: Given our adherence to disciplined asset allocation and systematic
rebalancing, we do not attempt to project an outlook for the portfolio. However,
we do believe that over meaningful periods of time, the Fund will provide
returns with considerably less volatility than the major equity benchmarks. A
diversified portfolio held for the long term is a sensible strategy, and
eliminates focusing on short-term market fears or suspected market
opportunities.
AUGUST 31, 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 A MARKET CAPITALIZATION-WEIGHTED INDEX OF 500 OF THE
LARGEST U.S. COMPANIES. THE INDEX IS CALCULATED ON A TOTAL-RETURN BASIS WITH
DIVIDENDS REINVESTED.
2 THE LEHMAN BROTHERS AGGREGATE BOND INDEX MEASURES THE U.S. INVESTMENT GRADE
FIXED RATE BOND MARKET. THE INDEX IS CALCULATED ON A TOTAL-RETURN BASIS.
3 THE FUND'S COMPOSITE INDEX CONSISTS OF 80% S&P 500(R) INDEX AND 20% LEHMAN
BROTHERS AGGREGATE BOND INDEX.
4 BASED ON A PERFORMANCE COMPARISON OF BROAD-BASED AND STYLE-SPECIFIC DOW JONES
WILSHIRE, NASDAQ, RUSSELL AND S&P SMALL-CAP, MID-CAP, LARGE-CAP AND REAL
ESTATE DOMESTIC EQUTY INDEXES FOR THE ONE-YEAR PERIOD ENDING 7/31/04.
THESE INDEXES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE
THEIR PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE ACTIVE
MANAGEMENT OF AN ACTUAL PORTFOLIO.
5
Phoenix Partner Select Wealth Builder Fund
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS 1 PERIODS ENDING 7/31/04
- --------------------------------------------------------------------------------
INCEPTION INCEPTION
TO 7/31/04 DATE
---------- ---------
Class A Shares at NAV 2 9.89% 8/1/03
Class A Shares at POP 3 3.57 8/1/03
Class C Shares at NAV 2 9.03 8/1/03
Class C Shares with CDSC 4 9.03 8/1/03
S&P 500(R) Index 6 14.33 8/1/03
Lehman Brothers Aggregate Bond Index 7 4.89 8/1/03
Composite Index 8 12.47 8/1/03
- --------------------------------------------------------------------------------
GROWTH OF $10,000 PERIODS ENDING 7/31
- --------------------------------------------------------------------------------
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
8/1/03 (inception of the Fund) in Class A and Class C shares. The total return
for Class A shares reflects the maximum sales charge of 5.75% on the initial
investment. The total return for Class C shares reflects the CDSC charges which
are 1% in the first year and 0% thereafter. Performance assumes dividends and
capital gains are reinvested.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
PHOENIX PHOENIX LEHMAN
PARTNER SELECT PARTNER SELECT BROTHERS
WEALTH BUILDER WEALTH BUILDER AGGGREGATE
FUND FUND S&P 500(R) BOND COMPOSITE
CLASS A 5 CLASS C 5 INDEX 6 INDEX 7 INDEX 8
8/1/03 $ 9,425 $10,000 $10,000 $10,000 $10,000
7/30/04 10,357 10,903 11,247 11,433 10,489
- --------------------------------------------------------------------------------
FUND INVESTMENT ALLOCATION 7/31/04
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Equity Funds 80%
Fixed Income Funds 20
1 Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
2 "NAV" (Net Asset Value) total returns do not include the effect of any sales
charge.
3 "POP" (Public Offering Price) total returns include the effect of the maximum
front-end 5.75% sales charge.
4 CDSC (contingent deferred sales charge) is applied to redemptions of certain
classes of shares that do not have a sales charge applied at the time of
purchase. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
5 This chart includes application of initial sales charges on Class A shares
and applicable CDSC charges for Class C shares since inception.
6 The S&P 500(R) Index is a market capitalization-weighted index of 500 of the
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested and is provided for general comparative purposes. The
index's performance does not reflect sales charges.
7 The Lehman Brothers Aggregate Bond Index measures the U.S. investment grade
fixed rate bond market. The index is calculated on a total-return basis and
is provided for general comparative purposes. The index's performance does
not reflect sales charges.
8 The Composite Index is made up of 80% of the S&P 500(R) Index return and 20%
of the Lehman Brothers Aggregate Bond Index return. The index's performance
does not reflect sales charges.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE
SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PLEASE VISIT PHOENIXINVESTMENTS.COM FOR
PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END.
6
Phoenix Partner Select Wealth Builder Fund
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
As a shareholder of the Wealth Builder Fund, you incur two types of costs:
(1) transaction costs, including sales charges on purchases of Class A shares
and contingent deferred sales charges on Class C shares; and (2) ongoing costs,
including investment advisory fees; distribution and service fees; and other
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. These examples are based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period.
ACTUAL EXPENSES
The first line of the accompanying tables provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the accompanying tables provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not your Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your Fund and other funds. To do so, compare these
5% hypothetical examples with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the accompanying tables are meant to
highlight your ongoing costs only and do not reflect any transactional costs,
such as sales charges or contingent deferred sales charges. Therefore, the
second line of the accompanying tables is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Phoenix Partner Select Beginning Ending Expenses Paid
Wealth Builder Fund Account Value Account Value During
Class A February 1, 2004 July 31, 2004 Period*
- ---------------------- ---------------- ------------- ------------
Actual $1,000.00 $ 991.80 $1.98
Hypothetical (5% return
before expenses) 1,000.00 1,022.85 2.01
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.40%, WHICH
INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT
FISCAL HALF-YEAR, THEN DIVIDED BY 366 TO REFLECT THE ONE-HALF YEAR PERIOD. THE
EXPENSE RATIO SHOWN ABOVE DOES NOT INCLUDE THE FUND'S PRORATED SHARE OF EXPENSES
OF THE UNDERLYING FUNDS.
Phoenix Partner Select Beginning Ending Expenses Paid
Wealth Builder Fund Account Value Account Value During
Class C February 1, 2004 July 31, 2004 Period*
- ---------------------- ---------------- ------------- ------------
Actual $1,000.00 $ 987.30 $5.68
Hypothetical (5% return
before expenses) 1,000.00 1,019.07 5.79
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.15%, WHICH
INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT
FISCAL HALF-YEAR, THEN DIVIDED BY 366 TO REFLECT THE ONE-HALF YEAR PERIOD. THE
EXPENSE RATIO SHOWN ABOVE DOES NOT INCLUDE THE FUND'S PRORATED SHARE OF EXPENSES
OF THE UNDERLYING FUNDS.
7
Phoenix Partner Select Wealth Builder Fund
SCHEDULE OF INVESTMENTS AT JULY 31, 2004
SHARES VALUE
--------- -----------
MUTUAL FUNDS--99.9%
EQUITY FUNDS--80.1%
Phoenix-Duff & Phelps Real Estate Securities
Fund Class A ................................. 415,978 $ 9,030,891
Phoenix-Kayne Rising Dividends Fund
Class A ...................................... 1,129,025 17,432,142
Phoenix-Kayne Small-Mid Cap Fund
Class A(b) ................................... 1,230,900 21,860,790
Phoenix Market Neutral Fund Class A(b) ....... 380,621 4,369,530
Phoenix-Oakhurst Growth & Income Fund
Class A ...................................... 1,334,293 17,479,240
-----------
70,172,593
-----------
FIXED-INCOME FUNDS--19.8%
Phoenix Institutional Bond Fund Class Y ...... 207,862 6,483,207
Phoenix-Goodwin Multi-Sector Short Term
Bond Fund Class A ............................ 913,007 4,336,781
Phoenix-Seneca Bond Fund Class A ............. 617,316 6,475,640
-----------
17,295,628
-----------
- ----------------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(IDENTIFIED COST $86,266,520) 87,468,221
- ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--99.9%
(IDENTIFIED COST $86,266,520) 87,468,221
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--99.9%
(IDENTIFIED COST $86,266,520) 87,468,221(a)
Other assets and liabilities, net--0.1% 109,554
-----------
NET ASSETS--100.0% $87,577,775
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $2,184,582 and gross
depreciation of $982,881. At July 31, 2004, the aggregate cost of securities
for federal income tax purposes was $86,266,520.
(b) Non-income producing.
See Notes to Financial Statements
8
Phoenix Partner Select Wealth Builder Fund
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2004
ASSETS
Investment securities at value
(Identified cost $86,266,520) $87,468,221
Receivables
Fund shares sold 698,454
Dividends from underlying funds 15,931
Fund share loss receivable from adviser 178
Prepaid expenses 18,340
-----------
Total assets 88,201,124
-----------
LIABILITIES
Cash overdraft 37,875
Payables
Investment securities purchased 404,855
Fund shares repurchased 64,294
Distribution and service fees 36,102
Transfer agent fee 14,780
Investment advisory fee 13,183
Financial agent fee 9,545
Trustees' fee 4,916
Accrued expenses 37,799
-----------
Total liabilities 623,349
-----------
NET ASSETS $87,577,775
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest$ $86,332,236
Undistributed net investment income 21,653
Accumulated net realized gain 22,185
Net unrealized appreciation 1,201,701
-----------
NET ASSETS $87,577,775
===========
CLASS A
Shares of beneficial interest outstanding, no par value
unlimited authorization (Net Assets $29,565,648) 2,715,862
Net asset value per share $10.89
Offering price per share $10.89/(1-5.75%) $11.55
CLASS C
Shares of beneficial interest outstanding, no par value
unlimited authorization (Net Assets $58,012,127) 5,341,097
Net asset value and offering price per share $10.86
STATEMENT OF OPERATIONS
FROM INCEPTION AUGUST 1, 2003
TO JULY 31, 2004
INVESTMENT INCOME
Income distributions received from underlying funds $ 699,202
Interest 3,472
----------
Total investment income 702,674
----------
EXPENSES
Investment advisory fee 46,915
Distribution and service fees, Class C 237,741
Financial agent fee 75,754
Transfer agent 72,039
Registration 50,428
Trustees 34,311
Professional 24,562
Custodian 18,886
Printing 13,197
Miscellaneous 9,556
----------
Total expenses 583,389
Less expenses borne by investment adviser (157,970)
Custodian fees paid indirectly (19)
----------
Net expenses 425,400
----------
NET INVESTMENT INCOME 277,274
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gain distributions received from underlying funds 43,962
Net change in unrealized appreciation (depreciation) on
investments 1,201,701
----------
NET GAIN ON INVESTMENTS 1,245,663
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,522,937
==========
See Notes to Financial Statements
9
Phoenix Partner Select Wealth Builder Fund
STATEMENT OF CHANGES IN NET ASSETS
From
Inception
8/1/03 to
7/31/04
-----------
FROM OPERATIONS
Net investment income (loss) $ 277,274
Net realized gain (loss) 43,962
Net change in unrealized appreciation (depreciation) 1,201,701
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,522,937
-----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (170,807)
Net investment income, Class C (106,591)
-----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (277,398)
-----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (2,952,698 shares) 31,761,461
Net asset value of shares issued from reinvestment of distributions (8,770 shares) 96,271
Cost of shares repurchased (245,606 shares) (2,684,948)
-----------
Total 29,172,784
-----------
CLASS C
Proceeds from sales of shares (5,572,339 shares) 59,681,667
Net asset value of shares issued from reinvestment of distributions (2,134 shares) 22,942
Cost of shares repurchased (233,376 shares) (2,545,157)
-----------
Total 57,159,452
-----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 86,332,236
-----------
NET INCREASE (DECREASE) IN NET ASSETS 87,577,775
NET ASSETS
Beginning of period --
-----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $21,653] $87,577,775
===========
See Notes to Financial Statements
10
Phoenix Partner Select Wealth Builder Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
-----------------
FROM INCEPTION
8/1/03 TO 7/31/04
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (6) 0.12
Capital gain distributions received from underlying funds 0.01
Net realized and unrealized gain (loss) 0.86
------
TOTAL FROM INVESTMENT OPERATIONS 0.99
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.10)
------
TOTAL DISTRIBUTIONS (0.10)
------
Change in net asset value 0.89
------
NET ASSET VALUE, END OF PERIOD $10.89
======
Total return(1) 9.89%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $29,566
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2)(3) 0.40%(5)
Net investment income 1.11%
Portfolio turnover 0%
CLASS C
-----------------
FROM INCEPTION
8/1/03 TO 7/31/04
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (6) 0.04
Capital gain distributions received from underlying funds 0.01
Net realized and unrealized gain (loss) 0.85
------
TOTAL FROM INVESTMENT OPERATIONS 0.90
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.04)
------
TOTAL DISTRIBUTIONS (0.04)
------
Change in net asset value 0.86
------
NET ASSET VALUE, END OF PERIOD $10.86
======
Total return(1) 9.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $58,012
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2)(4) 1.15%(5)
Net investment income 0.34%
Portfolio turnover 0%
(1) Maximum sales charges are not reflected in the total return calculation.
(2) The Fund also will indirectly bear its prorated share of expenses of the
underlying funds. Such expenses are not included in the calculation of this
ratio.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 0.77% for
the period ending July 31, 2004.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.47% for
the period ending July 31, 2004.
(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.
See Notes to Financial Statements
11
PHOENIX PARTNER SELECT WEALTH GUARDIAN FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO OVERLAY MANAGEMENT TEAM
Q: What is the Fund's investment objective?
A: The Phoenix Partner Select Wealth Guardian Fund is an asset allocation fund
of funds that has an investment objective of long-term capital appreciation and
current income. There is no guarantee that the Fund will achieve its objective.
Q: HOW DOES THE FUND SEEK TO ACHIEVE ITS OBJECTIVE?
A: The Fund seeks to achieve its objective by investing in a diversified mix of
mutual funds representing a number of asset classes and investment styles,
including alternative investments. The Fund utilizes independent investment
managers, capitalizing on their expertise in areas of the equity and fixed
income markets. The emphasis on diversification is intended to moderate
volatility by limiting the effect of one investment style. Under normal
conditions, the Fund seeks to achieve a target asset allocation of approximately
60% in equity mutual funds and 40% in bond mutual funds. The Fund's advisor
determines the underlying mutual funds that it believes best represents the
selected asset allocation, monitors the Fund's allocations, and rebalances
assets to maintain the targeted equity and bond allocations. Management of each
underlying mutual fund is responsible for deciding which securities to purchase
and sell for its respective fund.
Q: HOW DID THE FUND PERFORM DURING THE 12 MONTHS ENDED JULY 31, 2004?
A: For the fiscal year ended July 31, 2004, the Fund's Class A shares returned
9.15% and Class C shares returned 8.29%, the S&P 500(R) Index 1 returned 14.33%,
the Lehman Brothers Aggregate Bond Index 2 returned 4.89% and the Fund's
Composite Index 3 returned 10.60%. 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 above.
Q: WHAT FACTORS AFFECTED THE EQUITY MARKETS OVER THE
12 MONTHS ENDED JULY 31, 2004?
A: For the twelve months ending July 31, 2004, the stock market posted solid
returns. A strengthening economy and low interest rates helped generate a
sustained increase in corporate profits. Investors' appetite for risk also
returned following the losses suffered during the 2000-2002 period. Large-cap
stocks, as represented by the S&P 500(R) Index, had a total return of 14.33%.
However, most of the stock market returns for the fiscal year occurred during
the second half of 2003.
During 2004, the equity markets have experienced small negative returns.
Sharply higher oil prices, uncertainty regarding the 2004 presidential election
and continued concerns about terrorism weigh on the minds of market
participants. Attention is focused on the continued actions of the Federal
Reserve in raising short-term interest rates. Market participants are fearful
that rapidly rising rates could threaten corporate profits, but too slow an
increase could lead to higher inflation. On the positive side, employment growth
has increased over the last several months and the dollar has rallied against
other currencies.
During the fiscal year, small- and mid-capitalization stocks and REIT
stocks posted the strongest returns among U.S. equities. 4
12
Phoenix Partner Select Wealth Guardian Fund (continued)
Q: WHAT FACTORS AFFECTED THE BOND MARKET OVER THE 12 MONTHS ENDED JULY 31, 2004?
A: During the fiscal year, interest rate levels were volatile as investors
assessed the strength and duration of the recovery in the U.S. economy. Weak
employment growth and an accommodative Federal Reserve Board helped cause
interest rates to decline from the fall of 2003 through the first quarter of
2004. However, with signs of stronger job gains in April and May, market yields
rose by over 1%. Recently the price of oil and a slowdown in economic growth
have caused interest rates to decline. Whether this decline signals the end of
higher rates, or is simply a pause on the path to even higher yields, continues
to challenge market participants. At the same time, the Federal Reserve Board
has begun to raise short-term interest rates, increasing the federal funds rate
from 1% to 1.5% during 2004.
Given the strength in the economy and increased corporate profits, credit
sensitive sectors of the bond market outperformed U.S. Treasuries during the
fiscal year. Investment grade corporate bonds benefited from improving profits
and strengthened balance sheets. High yield bonds, which were severely punished
in 2001 and 2002, rebounded sharply during the fiscal year and posted among the
highest returns in the bond market. Many corporations took advantage of lower
rates to refinance higher coupon debt and improve their profitability. Given
their higher yields, longer maturity bonds outperformed their shorter maturity
counterparts.
Q: HOW DID THE FUND PERFORM IN THE MARKET ENVIRONMENT OVER THE PAST 12 MONTHS?
A: The Fund's performance has reflected the positive returns for domestic equity
and bond markets during the past 12 months, increasing in line with our
expectation given the market environment in which lower quality, higher risk
stocks dominated equity benchmark returns in the second half of 2003. The Fund
particularly benefited from its allocation to a real estate investment
securities fund, which invests principally in REITs, as REIT returns exceeded
the returns of other domestic equity indices. The exposure to alternative
investments such as REITs is an important strategy of the Fund to provide
diversification and potentially reduce overall portfolio volatility.
Q: WHAT CHANGES, IF ANY, HAVE BEEN MADE TO THE FUND'S ASSET ALLOCATION OVER THE
PAST 12 MONTHS AND WHY?
A: Early in the fourth quarter of 2003, we added an allocation to a short-term
multi-sector bond fund and reduced the allocations to other bond funds in the
portfolio to help diversify some of the Fund's exposure to interest rate
increases. Other than that addition, there were no other changes to the Fund's
allocations in the past 12 months.
As part of our investment philosophy, we do not believe in trying to time
the market. Our goal is to remain approximately 60% invested in equity mutual
funds and 40% in bond mutual funds. The Fund's allocations are reviewed
regularly and systematic rebalancing is completed as needed to maintain our
goal.
13
Phoenix Partner Select Wealth Guardian Fund (continued)
Q: WHAT IS YOUR CURRENT OUTLOOK FOR THE PORTFOLIO?
A: Given our adherence to disciplined asset allocation and systematic
rebalancing, we do not attempt to project an outlook for the portfolio. However,
we do believe that over meaningful periods of time, the Fund will provide
returns with considerably less volatility than the major equity benchmarks. A
diversified portfolio held for the long term is a sensible strategy, and
eliminates focusing on short-term market fears or suspected market
opportunities.
AUGUST 31, 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 A MARKET CAPITALIZATION-WEIGHTED INDEX OF 500 OF THE
LARGEST U.S. COMPANIES. THE INDEX IS CALCULATED ON A TOTAL-RETURN BASIS WITH
DIVIDENDS REINVESTED.
2 THE LEHMAN BROTHERS AGGREGATE BOND INDEX MEASURES THE U.S. INVESTMENT GRADE
FIXED RATE BOND MARKET. THE INDEX IS CALCULATED ON A TOTAL-RETURN BASIS.
3 THE FUND'S COMPOSITE INDEX CONSISTS OF 60% S&P 500(R) INDEX AND 40% LEHMAN
BROTHERS AGGREGATE BOND INDEX.
4 BASED ON A PERFORMANCE COMPARISON OF BROAD-BASED AND STYLE-SPECIFIC DOW JONES
WILSHIRE, NASDAQ, RUSSELL AND S&P SMALL-CAP, MID-CAP, LARGE-CAP AND REAL
ESTATE DOMESTIC EQUTY INDEXES FOR THE ONE-YEAR PERIOD ENDING 7/31/04.
THESE INDEXES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE
THEIR PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE ACTIVE
MANAGEMENT OF AN ACTUAL PORTFOLIO.
14
Phoenix Partner Select Wealth Guardian Fund
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS 1 PERIODS ENDING 7/31/04
- --------------------------------------------------------------------------------
INCEPTION INCEPTION
TO 7/31/04 DATE
---------- ---------
Class A Shares at NAV 2 9.15% 8/1/03
Class A Shares at POP 3 2.87 8/1/03
Class C Shares at NAV 2 8.29 8/1/03
Class C Shares with CDSC 4 8.29 8/1/03
S&P 500(R) Index 6 14.33 8/1/03
Lehman Brothers Aggregate Bond Index 7 4.89 8/1/03
Composite Index 8 10.60 8/1/03
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
- --------------------------------------------------------------------------------
GROWTH OF $10,000 PERIODS ENDING 7/31
- --------------------------------------------------------------------------------
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
8/1/03 (inception of the Fund) in Class A and Class C shares. The total return
for Class A shares reflects the maximum sales charge of 5.75% on the initial
investment. The total return for Class C shares reflects the CDSC charges which
are 1% in the first year and 0% thereafter. Performance assumes dividends and
capital gains are reinvested.
PHOENIX PHOENIX LEHMAN
PARTNER SELECT PARTNER SELECT BROTHERS
WEALTH GUARDIAN WEALTH GUARDIAN AGGGREGATE
FUND FUND S&P 500(R) BOND COMPOSITE
CLASS A 5 CLASS C 5 INDEX 6 INDEX 7 INDEX 8
8/1/03 $ 9,425 $10,000 $10,000 $10,000 $10,000
7/30/04 10,287 10,829 11,060 11,433 10,489
- --------------------------------------------------------------------------------
FUND INVESTMENT ALLOCATION 7/31/04
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Equity Funds 60%
Fixed Income Funds 40
1 Total returns are historical and include changes in share price and the
reinvestment of both dividends and capital gains distributions.
2 "NAV" (Net Asset Value) total returns do not include the effect of any sales
charge.
3 "POP" (Public Offering Price) total returns include the effect of the maximum
front-end 5.75% sales charge.
4 CDSC (contingent deferred sales charge) is applied to redemptions of certain
classes of shares that do not have a sales charge applied at the time of
purchase. CDSC charges for C shares are 1% in the first year and 0%
thereafter.
5 This chart includes application of initial sales charges on Class A shares and
applicable CDSC charges for Class C shares since inception.
6 The S&P 500(R) Index is a market capitalization-weighted index of 500 of the
largest U.S. companies. The index is calculated on a total-return basis with
dividends reinvested and is provided for general comparative purposes. The
index's performance does not reflect sales charges.
7 The Lehman Brothers Aggregate Bond Index measures the U.S. investment grade
fixed rate bond market. The index is calculated on a total-return basis and is
provided for general comparative purposes. The index's performance does not
reflect sales charges.
8 The Composite Index is made up of 60% of the S&P 500(R) Index return and 40%
of the Lehman Brothers Aggregate Bond Index return. The index's performance
does not reflect sales charges.
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN PERFORMANCE
SHOWN. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PLEASE VISIT PHOENIXINVESTMENTS.COM FOR
PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH-END.
15
Phoenix Partner Select Wealth Guardian Fund
ABOUT YOUR FUND'SEXPENSES (UNAUDITED)
As a shareholder of the Wealth Guardian Fund, you incur two types of costs:
(1) transaction costs, including sales charges on purchases of Class A shares
and contingent deferred sales charges on Class C shares; and (2) ongoing costs,
including investment advisory fees; distribution and service fees; and other
expenses. These examples are intended to help you understand your ongoing costs
(in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. These examples are based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period.
ACTUAL EXPENSES
The first line of the accompanying tables below provides information about
actual account values and actual expenses. You may use the information in this
line, together with the amount you invested, to estimate the expenses that you
paid over the period. Simply divide your account value by $1,000 (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number in the first line under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the accompanying tables below provides information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed rate of return of 5% per year before expenses,
which is not your Fund's actual return. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your Fund and other funds. To do so, compare these
5% hypothetical examples with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the accompanying tables are meant to
highlight your ongoing costs only and do not reflect any transactional costs,
such as sales charges or contingent deferred sales charges. Therefore, the
second line of the accompanying tables is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
Phoenix Partner Select Beginning Ending Expenses Paid
Wealth Guardian Fund Account Value Account Value During
Class A February 1, 2004 July 31, 2004 Period*
- ---------------------- ---------------- -------------- -------------
Actual $1,000.00 $ 997.30 $2.58
Hypothetical (5% return
before expenses) 1,000.00 1,022.25 2.62
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 0.52%, WHICH
INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT
FISCAL HALF-YEAR, THEN DIVIDED BY 366 TO REFLECT THE ONE-HALF YEAR PERIOD. THE
EXPENSE RATIO SHOWN ABOVE DOES NOT INCLUDE THE FUND'S PRORATED SHARE OF EXPENSES
OF THE UNDERLYING FUNDS.
Phoenix Partner Select Beginning Ending Expenses Paid
Wealth Guardian Fund Account Value Account Value During
Class C February 1, 2004 July 31, 2004 Period*
- ---------------------- ---------------- -------------- -------------
Actual $1,000.00 $ 992.90 $6.29
Hypothetical (5% return
before expenses) 1,000.00 1,018.47 6.39
*EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.27%, WHICH
INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, MULTIPLIED BY THE AVERAGE ACCOUNT
VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT
FISCAL HALF-YEAR, THEN DIVIDED BY 366 TO REFLECT THE ONE-HALF YEAR PERIOD. THE
EXPENSE RATIO SHOWN ABOVE DOES NOT INCLUDE THE FUND'S PRORATED SHARE OF EXPENSES
OF THE UNDERLYING FUNDS.
16
Phoenix Partner Select Wealth Guardian Fund
SCHEDULE OF INVESTMENTS AT JULY 31, 2004
SHARES VALUE
--------- -----------
MUTUAL FUNDS--100.0%
EQUITY FUNDS--60.3%
Phoenix-Duff & Phelps Real Estate Securities
Fund Class A ................................. 183,753 $ 3,989,275
Phoenix-Kayne Rising Dividends
Fund Class A ................................. 438,182 6,765,527
Phoenix-Kayne Small-Mid Cap Fund
Class A(b) ................................... 214,854 3,815,800
Phoenix Market Neutral Fund Class A(b) ....... 166,532 1,911,786
Phoenix-Oakhurst Growth & Income Fund
Class A ...................................... 515,455 6,752,465
-----------
23,234,853
-----------
FIXED-INCOME FUNDS--39.7%
Phoenix Institutional Bond Fund Class Y ...... 183,758 5,731,414
Phoenix-Goodwin Multi-Sector Short Term Bond
Fund Class A ................................. 817,717 3,884,154
Phoenix-Seneca Bond Fund Class A ............. 544,917 5,716,178
-----------
15,331,746
-----------
- ----------------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(IDENTIFIED COST $37,994,804) 38,566,599
- ----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--100.0%
(IDENTIFIED COST $37,994,804) 38,566,599
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(IDENTIFIED COST $37,994,804) 38,566,599(a)
Other assets and liabilities, net--0.0% (29,747)
-----------
NET ASSETS--100.0% $38,536,852
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $941,920 and gross
depreciation of $384,193. At July 31, 2004, the aggregate cost of securities
for federal income tax purposes was $38,008,872.
(b) Non-income producing.
See Notes to Financial Statements
17
Phoenix Partner Select Wealth Guardian Fund
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2004
ASSETS
Investment securities at value
(Identified cost $37,994,804) $38,566,599
Receivables
Fund shares sold 309,450
Dividends from underlying funds 14,500
Prepaid expenses 14,361
-----------
Total assets 38,904,910
-----------
LIABILITIES
Cash overdraft 20,934
Payables
Investment securities purchased 252,895
Fund shares repurchased 2,537
Professional fees 20,173
Investment advisory fee 19,910
Distribution and service fees 17,776
Transfer agent fee 9,808
Financial agent fee 9,545
Trustees' fee 4,916
Accrued expenses 9,564
-----------
Total liabilities 368,058
-----------
NET ASSETS $38,536,852
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $37,949,038
Undistributed net investment income 17,981
Accumulated net realized loss (1,962)
Net unrealized appreciation 571,795
-----------
NET ASSETS $38,536,852
===========
CLASS A
Shares of beneficial interest outstanding, no par value
unlimited authorization (Net Assets $10,182,171) 948,181
Net asset value per share $10.74
Offering price per share $10.74/(1-5.75%) $11.40
CLASS C
Shares of beneficial interest outstanding, no par value
unlimited authorization (Net Assets $28,354,681) 2,644,937
Net asset value and offering price per share $10.72
STATEMENT OF OPERATIONS
FROM INCEPTION AUGUST 1, 2003
TO JULY 31, 2004
INVESTMENT INCOME
Income distributions received from underlying funds $ 557,591
Interest 669
---------
Total investment income 558,260
---------
EXPENSES
Investment advisory fee 22,734
Distribution and service fees, Class C 128,849
Financial agent fee 75,754
Transfer agent 53,012
Registration 44,739
Trustees 34,311
Professional 24,562
Custodian 15,578
Printing 6,956
Miscellaneous 9,407
---------
Total expenses 415,902
Less expenses borne by investment adviser (168,829)
---------
Net expenses 247,073
---------
NET INVESTMENT INCOME 311,187
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (14,076)
Capital gain distributions received from underlying funds 30,336
Net change in unrealized appreciation (depreciation) on
investments 571,795
---------
NET GAIN ON INVESTMENTS 588,055
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 899,242
=========
See Notes to Financial Statements
18
Phoenix Partner Select Wealth Guardian Fund
STATEMENT OF CHANGES IN NET ASSETS
From
Inception
8/1/03 to
7/31/04
-----------
FROM OPERATIONS
Net investment income (loss) $ 311,187
Net realized gain (loss) 16,260
Net change in unrealized appreciation (depreciation) 571,795
-----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 899,242
-----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (111,767)
Net investment income, Class C (199,661)
-----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (311,428)
-----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (1,090,593 shares) 11,572,733
Net asset value of shares issued from reinvestment of distributions (5,491 shares) 59,161
Cost of shares repurchased (147,903 shares) (1,571,853)
-----------
Total 10,060,041
-----------
CLASS C
Proceeds from sales of shares (2,772,956 shares) 29,262,035
Net asset value of shares issued from reinvestment of distributions (4,063 shares) 43,475
Cost of shares repurchased (132,082 shares) (1,416,513)
-----------
Total 27,888,997
-----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 37,949,038
-----------
NET INCREASE (DECREASE) IN NET ASSETS 38,536,852
NET ASSETS
Beginning of period --
-----------
END OF PERIOD [INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $17,981] $38,536,852
===========
See Notes to Financial Statements
19
Phoenix Partner Select Wealth Guardian Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
-----------------
FROM INCEPTION
8/1/03 TO 7/31/04
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.17
Capital gain distributions received from underlying funds --(5)
Net realized and unrealized gain (loss) 0.74
------
TOTAL FROM INVESTMENT OPERATIONS 0.91
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.17)
------
Total distributions (0.17)
------
Change in net asset value 0.74
------
NET ASSET VALUE, END OF PERIOD $10.74
======
Total return(1) 9.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $10,182
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2)(3) 0.52%
Net investment income 1.92%
Portfolio turnover 1%
CLASS C
-----------------
FROM INCEPTION
8/1/03 TO 7/31/04
Net asset value, beginning of period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.12
Capital gain distributions received from underlying funds 0.01
Net realized and unrealized gain (loss) 0.70
------
TOTAL FROM INVESTMENT OPERATIONS 0.83
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11)
------
TOTAL DISTRIBUTIONS (0.11)
------
Change in net asset value 0.72
------
NET ASSET VALUE, END OF PERIOD $10.72
======
Total return(1) 8.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $28,355
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses(2)(4) 1.27%
Net investment income 1.19%
Portfolio turnover 1%
(1) Maximum sales charges are not reflected in the total return calculation.
(2) The Fund also will indirectly bear its prorated share of expenses of the
underlying funds. Such expenses are not included in the calculation of this
ratio.
(3) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.35% for
the period ending July 31, 2004.
(4) If the investment adviser had not waived fees and reimbursed expenses, the
ratio of operating expenses to average net assets would have been 1.98% for
the period ending July 31, 2004.
(5) Amount is less than $0.01.
See Notes to Financial Statements
20
PHOENIX PARTNER SELECT FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004
1. ORGANIZATION
Phoenix Partner Select Funds (the "Trust") is organized as a Delaware
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
Currently two Funds are offered for sale (each a "Fund"). The Partner Select
Wealth Builder Fund ("Wealth Builder Fund") is diversified and is a fund of
funds that has an investment objective of seeking capital appreciation. The
Partner Select Wealth Guardian Fund ("Wealth Guardian Fund") is diversified and
is a fund of funds that has an investment objective of long-term capital
appreciation and current income.
Financial information for the underlying funds may be obtained at
www.PhoenixInvestments.com.
Each Fund offers Class A and Class C shares. Class A shares are sold with a
front-end sales charge of up to 5.75%. Class C shares are sold with a 1%
contingent deferred sales charge if redeemed within one year of purchase.
Each class of shares has identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. Income and expenses and realized and unrealized gains and
losses of each Fund are borne pro rata by the holders of each class of shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Trust 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:
Investments in the underlying funds are valued at each Fund's net asset value
determined as of the close of business of the New York Stock Exchange (generally
4:00 pm eastern time). As required, some investments are valued at fair value as
determined in good faith by or under the direction of the Trustees. Short-term
investments having a remaining maturity of 60 days or less are valued at
amortized cost which approximates market.
B. SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are recorded on the trade date. Income and capital gain
distributions from the underlying funds, if any, are recorded on the ex-dividend
date. Realized gains and losses are determined on the identified cost basis.
Interest income is recorded on the accrual basis. Each Fund amortizes premiums
and accretes discounts using the effective interest method.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund to comply with the requirements of the Internal Revenue Code (the "Code")
applicable to regulated investment companies, and to distribute substantially
all of its taxable income to its shareholders. In addition, each Fund intends to
distribute an amount sufficient to avoid imposition of any excise tax under
Section 4982 of the Code. Therefore, no provision for federal income taxes or
excise taxes has been made.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund 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, losses deferred due to wash
sales. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
E. EXPENSES:
Expenses incurred by the Trust with respect to the Funds are
allocated in proportion to the net assets of each Fund, except where allocation
of direct expense to each Fund or an alternative allocation method can be more
fairly made.
3. INVESTMENT ADVISORY FEE AND RELATED
PARTY TRANSACTIONS
As compensation for its services to the Trust, the Adviser, Phoenix
Investment Counsel, Inc., an indirect, wholly-owned subsidiary of The Phoenix
Companies, Inc. ("PNX"), is entitled to a fee at an annual rate of 0.10% of the
average daily net assets of each Fund.
The Adviser has contractually agreed to reimburse through November 30, 2004,
other operating expenses of each Fund (as compared to each underlying mutual
fund) to the extent that such expenses (excluding management fees and 12b-1
distribution and service fees) exceed 0.30% of each class of shares of the
Wealth Builder Fund and 0.42% for each class of shares of the Wealth Guardian
Fund. The Adviser will not seek to recapture any reimbursed operating expenses.
21
PHOENIX PARTNER SELECT FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004 (CONTINUED)
As Distributor of the Fund's shares, Phoenix Equity Planning Corporation
("PEPCO"), an indirect, wholly-owned subsidiary of PNX, has advised the Fund
that it retained net selling commissions and deferred sales charges for the
period ended July 31, 2004, as follows:
Class A Class C
Net Selling Deferred
Commissions Sales Charges
----------- -------------
Wealth Builder Fund ................... $74,859 $20,422
Wealth Guardian Fund .................. 30,513 11,496
In addition to these amounts, for the period August 1, 2003 to May 31, 2004,
the following was paid to W.S. Griffith Securities, Inc., formerly an indirect
subsidiary of PNX, for Class A net selling commissions:
Wealth Builder Fund ....................................... $18,274
Wealth Guardian Fund ...................................... 10,173
On May 31, 2004, W.S. Griffith Securities, Inc. was sold to Linsco/Private
Ledger, an independent broker/dealer, and is no longer a subsidiary of PNX.
In addition, each Fund pays PEPCO distribution and/or service fees at an
annual rate of 0.75% for Class C shares applied to the average daily net assets
of Class C. Shareholders in each Fund will indirectly bear the Fund's pro rata
share of the fees and expenses of the underlying funds in which each Fund
invests, including service fees of 0.25% incurred as a result of the Fund's
investment in Class A shares or Class Y shares of the underlying funds.
PEPCO has advised the Trust of the following information for the period ended
July 31, 2004:
Distribution Distribution Distribution
and/or and/or and/or Service
Service Fees Service Fees Fees Paid to
Retained by Paid to Unaffiliated W.S. Griffith
Distributor Participants Securities, Inc. (1)
----------- -------------------- --------------------
Wealth Builder Fund .. $214,792 $20,904 $2,045
Wealth Guardian Fund . 120,996 7,681 172
(1) For the period ended May 31, 2004.
Under certain circumstances, shares of certain Phoenix Funds may be exchanged
for shares of the same class of certain other Phoenix Funds on the basis of the
relative net asset values per share at the time of the exchange. On exchanges
with share classes that carry a contingent deferred sales charge, the CDSC
schedule of the original shares purchased continues to apply.
As Financial Agent of the Trust, PEPCO receives a financial agent fee equal
to the sum of (1) the documented cost to PEPCO to provide tax services and
oversight of the performance of PFPC Inc. (subagent to PEPCO) plus (2) the
documented cost of fund accounting and related services provided by PFPC Inc.
The fee schedule of PFPC Inc. is $40,000 per year per fund. No minimum fees
apply. For the period ended July 31, 2004, the Trust paid PEPCO financial agent
fees totaling $151,508.
PEPCO serves as the Trust's Transfer Agent with State Street Bank and Trust
Company serving as sub-transfer agent. For the period ended July 31, 2004,
transfer agent fees were $125,051 as reported in the Statements of Operations,
of which PEPCO retained the following:
Transfer Agent
Fee Retained
--------------
Wealth Builder Fund .................................. $ --
Wealth Guardian Fund ................................. --
4. PURCHASES AND SALES OF UNDERLYING FUNDS
Purchases and sales of underlying funds for the period ended July 31, 2004,
aggregated the following:
Purchases Sales
--------- --------
Wealth Builder Fund ....................... $86,266,520 $ --
Wealth Guardian Fund ...................... 38,287,517 278,666
5. OTHER
At July 31, 2004, each Fund had two omnibus shareholder accounts, comprised
of a group of individual shareholders, which individually amounted to more than
10% of the total shares outstanding. The omnibus shareholder is not affiliated
with PNX.
% of Shares
Outstanding
-----------
Wealth Builder Fund ................................... 60.3%
Wealth Guardian Fund .................................. 65.9%
The Funds do not invest in the underlying funds for the purpose of exercising
management or control; however, investments made by each Fund within each of its
principal investment strategies may represent a significant portion of an
underlying fund's net assets. At July 31, 2004, Wealth Builder Fund was the
owner of record of approximately 12% of the total outstanding shares of
Phoenix-Kayne Rising Dividends Fund, and of approximately 13% of the total
outstanding shares of Phoenix-Kayne Small-Mid Cap Fund.
22
PHOENIX PARTNER SELECT FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2004 (CONTINUED)
6. FEDERAL INCOME TAX INFORMATION
The components of distributable earnings on a tax basis (excluding unrealized
appreciation (depreciation) which are disclosed in the Schedule of Investments)
consist of undistributed ordinary income of $21,653 for the Wealth Builder Fund
and $17,982 for the Wealth Guardian Fund and undistributed long-term capital
gains of $22,185 and $12,106 for the Wealth Builder and Wealth Guardian Funds,
respectively.
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.
7. 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, on deductible current year net operating losses, expiring capital
loss carryovers and investments in passive foreign companies. The
reclassifications have no impact on the net assets or net asset value of the
Funds.
The Funds recorded the following reclassifications to increase (decrease) the
accounts listed below for the fiscal year ended July 31, 2004:
Undistributed Accumulated
Net Investment Net Realized
Income (Loss) Gain (Loss)
-------------- ------------
Wealth Builder Fund ................. $21,777 $(21,777)
Wealth Guardian Fund ................ 18,222 (18,222)
8. PROXY VOTING PROCEDURES (UNAUDITED)
The Adviser votes proxies relating to portfolio securities in
accordance with procedures that have been approved by the Fund's Board of
Trustees. You may obtain a description of these procedures, along with
information regarding how the Funds voted proxies during the most recent
twelve-month period ended June 30, free of charge, by calling toll-free
800-243-1574. This information is also available through the Securities and
Exchange Commission's website at http://www.sec.gov.
9. FORM N-Q INFORMATION (UNAUDITED)
The Funds will be filing complete schedules of portfolio holdings with the
Securities and Exchange Commission (the "SEC") for the first and third quarters
of each fiscal year on Form N-Q. Each Fund's Form N-Q will be available on the
SEC's website at http://www.sec.gov. Furthermore, each Fund's Form N-Q may be
reviewed and copied at the SEC's Public Reference Room. Information on the
operation of the SEC's Public Reference Room can be obtained at
http://www.sec.gov/info/edgar/prrules.htm. This is a new filing requirement by
the SEC. The initial Form N-Q filing for these Funds will be as of October 31,
2004 and will be available on the SEC's website on or about December 30, 2004.
- --------------------------------------------------------------------------------
TAX INFORMATION NOTICE (UNAUDITED)
Long-term capital gain dividends have been designated as follows:
Wealth Builder Fund ............................ $22,185
Wealth Guardian Fund ........................... 12,106
For the fiscal year ended July 31, 2004, for federal income tax purposes,
40.0% of the ordinary income dividends paid by the Wealth Builder Fund, and
15.5% of the ordinary income dividends paid by the Wealth Guardian Fund qualify
for the dividends received deduction for corporate shareholders.
For the fiscal year ended July 31, 2004, the Weath Builder Fund hereby
designates 40.0%, and the Wealth Guardian Fund hereby designates 15.5%, or the
maximum allowable of each of its ordinary income dividends to qualify for the
lower tax rate. The actual percentage for the calendar year will be designated
in the year-end tax statements.
- --------------------------------------------------------------------------------
23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
[GRAPHIC OMITTED]
PRICEWATERHOUSECOOPERS
To the Board of Trustees and Shareholders of
Phoenix Partner Select Funds
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 Phoenix Partner Select Wealth
Builder Fund and Phoenix Partner Select Wealth Guardian Fund, (constituting
Phoenix Partner Select Funds, hereafter referred to as the "Trust") at July 31,
2004, and the results of each of their operations, the changes in each of their
net assets and the financial highlights for the year then ended, 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 Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), 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
audit, which included confirmation of securities at July 31, 2004 by
correspondence with the transfer agent of the investee Funds, provide a
reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
September 16, 2004
24
FUND MANAGEMENT (UNAUDITED)
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) 243-4361.
The address of each individual, unless otherwise noted, is 56 Prospect
Street, Hartford, CT 06115-0480. There is no stated term of office for Trustees
of the Trust.
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX PRINCIPAL OCCUPATION(S)
NAME, ADDRESS LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND
AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
E. Virgil Conway Served since 35 Chairman, Rittenhouse Advisors, LLC (consulting firm) since
Rittenhouse Advisors, LLC 1996. 2001. Trustee/Director, Realty Foundation of New York
101 Park Avenue (1972-present), Pace University (1978-present), New York
New York, NY 10178 Housing Partnership Development Corp. (Chairman)
DOB: 8/2/29 (1981-present), Greater New York Councils, Boy Scouts of
America (1985-present), The Academy of Political Science
(Vice Chairman) (1985-present), Urstadt Biddle Property
Corp. (1989-present), The Harlem Youth Development
Foundation (1998-2002). Chairman, Metropolitan
Transportation Authority (1992-2001). Director, Trism, Inc.
(1994-2001), Consolidated Edison Company of New York, Inc.
(1970-2002), Atlantic Mutual Insurance Company (1974-2002),
Centennial Insurance Company (1974-2002), Josiah Macy, Jr.,
Foundation (1975-present), Union Pacific Corp. (1978-2002),
BlackRock Freddie Mac Mortgage Securities Fund (Advisory
Director) (1990-2000), Accuhealth (1994-2002).
- ------------------------------------------------------------------------------------------------------------------------------------
Harry Dalzell-Payne Served since 35 Currently retired.
The Flat, Elmore Court 1996.
Elmore, GL05, GL2 3NT
U.K.
DOB: 8/9/29
- ------------------------------------------------------------------------------------------------------------------------------------
S. Leland Dill Served since 24 Currently retired. Trustee, Scudder Investments (33
7721 Blue Heron Way 2004. portfolios) (1986-present). Director, Coutts & Co. Trust
West Palm Beach, FL 33412 Holdings Limited (1991-1999), Coutts & Co. Group (1944-1999)
DOB: 3/28/30 and Coutts & Co. International (USA) (private banking)
(1992-2000).
- ------------------------------------------------------------------------------------------------------------------------------------
Francis E. Jeffries Served since 28 Director, The Empire District Electric Company
8477 Bay Colony Dr. #902 1996. (1984-present).
Naples, FL 34108
DOB: 9/23/30
- ------------------------------------------------------------------------------------------------------------------------------------
Leroy Keith, Jr. Served since 25 Partner, Stonington Partners, Inc. (private equity fund)
Stonington Partners, Inc. 1996. since 2001. Chairman (1995 to 2000) and Chief Executive
736 Market Street, Ste. 1430 Officer (1995-1998), Carson Products Company (cosmetics).
Chattanooga, TN 37402 Director/Trustee, Evergreen Funds (six portfolios).
DOB: 2/14/39
- ------------------------------------------------------------------------------------------------------------------------------------
25
FUND MANAGEMENT (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX PRINCIPAL OCCUPATION(S)
NAME, ADDRESS LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND
AND DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Geraldine M. McNamara Served since 35 Managing Director, U.S. Trust Company of New York (private
U.S. Trust Company of 2001. bank) (1982-present).
New York
11 West 54th Street
New York, NY 10019
DOB: 4/17/51
- ------------------------------------------------------------------------------------------------------------------------------------
Everett L. Morris Served since 35 Currently retired. Vice President, W.H. Reaves and Company
164 Laird Road 1996. (investment management) (1993-2003).
Colts Neck, NJ 07722
DOB: 5/26/28
- ------------------------------------------------------------------------------------------------------------------------------------
Donald B. Romans Served since 24 President, Romans & Company (private investors and financial
39 S. Sheridan Road 2004. consultants) (1987-present). Trustee, Burnham Investors
Lake Forest, IL 60045 Trust (5 portfolios) (1967-present).
DOB: 4/22/31
- ------------------------------------------------------------------------------------------------------------------------------------
Richard E. Segerson Served since 25 Managing Director, Northway Management Company
Northway Management Company 1996. (1998-present).
164 Mason Street
Greenwich, CT 06830
DOB: 2/16/46
- ------------------------------------------------------------------------------------------------------------------------------------
Lowell P. Weicker, Jr. Served since 25 Director, UST, Inc. (1995-present), HPSC Inc.
200 Duke Street 1996. (1995-present), Compuware (1996-present) and WWF, Inc.
Alexandria, VA 22314 (2000-present). President, The Trust for America's Health
DOB: 5/16/31 (non-profit) (2001-present).
- ------------------------------------------------------------------------------------------------------------------------------------
26
FUND MANAGEMENT (UNAUDITED) (CONTINUED)
INTERESTED TRUSTEES
Each of the individuals listed below is an "interested person" of the
Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
NAME, ADDRESS, PORTFOLIOS IN
DATE OF BIRTH FUND COMPLEX PRINCIPAL OCCUPATION(S)
AND POSITION(S) WITH LENGTH OF OVERSEEN BY DURING PAST 5 YEARS AND
TRUST TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
*Marilyn E. LaMarche Served since 30 Limited Managing Director, Lazard Freres & Co. LLC
Lazard Freres & Co. LLC 2002. (1983-present). Director, The Phoenix Companies, Inc.
30 Rockefeller Plaza, (2001-present) and Phoenix Life Insurance Company
59th Floor (1989-present).
New York, NY 10020
DOB: 5/11/34
- ------------------------------------------------------------------------------------------------------------------------------------
**Philip R. McLoughlin Served since 71 Consultant, Phoenix Investment Partners, Ltd.
DOB: 10/23/46 1996. (2002-present). Director, PXRE Corporation (Delaware)
(1985-present), World Trust Fund (1991-present). Chairman
Chairman and President (1997-2002), Director (1995-2002), Vice Chairman (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 (1999-2002). 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.
- ------------------------------------------------------------------------------------------------------------------------------------
***James M. Oates Served since 30 Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital
Hudson Castle Group, Inc. 1996. Markets Inc.) (financial services) (1997-present). Managing
c/o Northeast Investment Director, Wydown Group (consulting firm) (1994-present).
Management, Inc. Director, Investors Financial Service Corporation
150 Federal Street (1995-present), Investors Bank & Trust Corporation
Suite 1000 (1995-present), Plymouth Rubber Co. (1995-present), Stifel
Boston, MA 02109 Financial (1996-present), Connecticut River Bancorp
DOB: 5/31/46 (1998-present), Connecticut River Bank (1998-present),
1Mind, Inc. (1999-present) and 1Mind.com (2000-present).
Director and Treasurer, Endowment for Health, Inc.
(2000-present). Chairman, Emerson Investment Management,
Inc. (2000-present). Member, Chief Executives Organization
(1996-present). Vice Chairman, Massachusetts Housing
Partnership (1998-1999). Director, Blue Cross and Blue
Shield of New Hampshire (1994-1999), AIB Govett Funds
(1991-2000) and Command Systems, Inc. (1998-2000). Director,
Phoenix Investment Partners, Ltd. (1995-2001).
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* Ms. LaMarche is an "interested person," as defined in the Investment Company Act of 1940, by reason of her position as Director
of The Phoenix Companies, Inc. and Phoenix Life Insurance Company.
** Mr. McLoughlin is an "interested person," as defined in the Investment Company Act of 1940, by reason of his relationship with
Phoenix Investment Partners, Ltd. and its affiliates.
*** Mr. Oates is being treated as an Interested Trustee due to certain business and financial relationships and investments existing
among Mr. Oates, Hudson Castle Group, Inc. and The Phoenix Companies, Inc. and certain of its affiliates.
</FN>
27
FUND MANAGEMENT (UNAUDITED) (CONTINUED)
OFFICERS OF THE TRUST WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) HELD WITH
NAME, ADDRESS AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH TIME SERVED DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
John F. Sharry Executive Vice President Executive Vice President, Phoenix Investment Partners, Ltd.
DOB: 3/28/52 since 1998. (1998-present), President, Phoenix Equity Planning Corporation
(2000-present). Executive Vice President, certain funds within the
Phoenix Fund Complex (1998-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Francis G. Waltman Senior Vice President Vice President, Chief Administrative Officer (2004-present), Senior
DOB: 7/27/62 since May 2004. Vice President, Chief Administrative Officer, Private Client Group
(1999-2004), Phoenix Investment Partners, Ltd. Senior Vice President,
certain funds within the Phoenix Fund Complex (May 2004-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Nancy G. Curtiss Treasurer since 1966. Vice President, Fund Accounting (1994-2000), Treasurer (1996-2000),
DOB: 11/24/52 Assistant Treasurer (2001-2003), Vice President, Operations
(2003-present), Phoenix Equity Planning Corporation. Treasurer, certain
funds within the Phoenix Fund Complex (1994-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Richard J. Wirth Secretary since 2002; Vice President and Insurance and Investment Products Counsel
One American Row Chief Legal Officer (2002-present), Counsel (1993-2002), Phoenix Life Insurance Company.
Hartford, CT 06102 since 2003. Secretary (2002-present), Chief Legal Officer (2003-present), certain
DOB: 11/14/58 funds within the Phoenix Fund Complex.
- ------------------------------------------------------------------------------------------------------------------------------------
28
PHOENIX PARTNER SELECT FUNDS
101 Munson Street
Greenfield, Massachusetts 01301
TRUSTEES
E. Virgil Conway
Harry Dalzell-Payne
S. Leland Dill
Francis E. Jeffries
Leroy Keith, Jr.
Marilyn E. LaMarche
Philip R. McLoughlin
Geraldine M. McNamara
Everett L. Morris
James M. Oates
Donald B. Romans
Richard E. Segerson
Lowell P. Weicker, Jr.
OFFICERS
Philip R. McLoughlin, Chairman and President
John F. Sharry, Executive Vice President
Francis G. Waltman, Senior Vice President
Nancy G. Curtiss, Treasurer
Richard J. Wirth, Secretary and Chief Legal Officer
INVESTMENT ADVISER
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, Connecticut 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
TRANSFER AGENT
Phoenix Equity Planning Corporation
56 Prospect Street
Hartford, Connecticut 06115-0480
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 5501
Boston, Massachusetts 02206-5501
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, Massachusetts 02110
HOW TO CONTACT US
Mutual Fund Services 1-800-243-1574
Advisor Consulting Group 1-800-243-4361
Text Telephone 1-800-243-1926
Web site PHOENIXINVESTMENTS.COM
- --------------------------------------------------------------------------------
IMPORTANT NOTICE TO SHAREHOLDERS
The Securities and Exchange Commission has modified mailing regulations for
semiannual and annual shareholder fund reports to allow mutual fund companies to
send a single copy of these reports to shareholders who share the same mailing
address. If you would like additional copies, please call Mutual Fund Services
at 1-800-243-1574.
- --------------------------------------------------------------------------------
(This page has been left blank intentionally.)
(This page has been left blank intentionally.)
(This page has been left blank intentionally.)
[GRAPHIC OMITTED] PS
---------------
PRESORTED
STANDARD
U.S. POSTAGE
PAID
Louisville, KY
Permit No. 1051
---------------
PHOENIX EQUITY PLANNING CORPORATION
P.O. Box 150480
Hartford, CT 06115-0480
[GRAPHIC OMITTED] PHOENIX
INVESTMENT PARTNERS, LTD.
A MEMBER OF THE PHOENIX COMPANIES, INC.
For more information about Phoenix mutual funds, please call your financial
representative or contact us at 1-800-243-4361 or PHOENIXINVESTMENTS.COM.
Not insured by FDIC/NCUA or any federal government agency. No bank guarantee.
Not a deposit. May lose value.
PXP 1802 (9/04)
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.
(c) 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.
(d) The registrant has not granted any waivers, 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 registrant's board of
directors has determined that E. Virgil Conway and Everett L. Morris are
qualified to serve as audit committee financial experts serving on its audit
committee and that they are "independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
- ----------
(a) The aggregate fees billed for the last fiscal year 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 that fiscal year is $33,040 for 2004. There
were no fees for the prior fiscal year, since the fund incepted on
8/1/03.
Audit-Related Fees
- ------------------
(b) The aggregate fees billed for the last fiscal year 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 2004. There were no fees for the prior fiscal year,
since the fund incepted on 8/1/03.
Tax Fees
- --------
(c) The aggregate fees billed for the last fiscal year for professional
services rendered by the principal accountant for tax compliance, tax
advice, and tax planning are $9,400 for 2004. There were no fees for
the prior fiscal year, since the fund incepted on 8/1/03. "Tax Fees"
are those primarily associated with review of the Trust's tax provision
and qualification as a regulated investment company (RIC) in connection
with audits of the Trust's financial statement, review of year-end
distributions by the Fund to avoid excise tax for the Trust, periodic
discussion with management on tax issues affecting the Trust, and
reviewing and signing the Fund's federal income and excise tax returns.
All Other Fees
- --------------
(d) The aggregate fees billed for the last fiscal year 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 2004.
There were no fees for the prior fiscal year, since the fund incepted
on 8/1/03.
(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 Partner Select Funds (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. E. Virgil Conway, 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.
Conway 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) N/A
(c) 100%
(d) N/A
(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 the last fiscal years of the registrant was
$410,478 for 2004. There were no fees for the prior fiscal year, since
the fund incepted on 8/1/03.
(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. SCHEDULE OF INVESTMENTS
Not yet applicable.
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
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 Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
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) Phoenix Partner Select Funds
-------------------------------------------------------------------
By (Signature and Title)* /s/ Philip R. McLoughlin
-------------------------------------------------------
Philip R. McLoughlin, Chairman
(principal executive officer)
Date October 7, 2004
----------------------------------------------------------------------------
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
-------------------------------------------------------
Philip R. McLoughlin, Chairman
(principal executive officer)
Date October 7, 2004
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Nancy G. Curtiss
-------------------------------------------------------
Nancy G. Curtiss, Treasurer
(principal financial officer)
Date October 7, 2004
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.