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 811-07705
---------
Phoenix-Kayne Funds
--------------------------------------------------
(Exact name of registrant as specified in charter)
1800 Avenue of the Stars, 2nd Floor
Los Angeles, California 90067
--------------------------------------------------
(Address of principal executive offices) (Zip code)
Kevin J. Carr, Esq. John R. Flores, Esq.
Vice President, Chief Legal Officer, Vice President
Counsel and Secretary for Registrant Litigation/Employment Counsel
Phoenix Life Insurance Company Phoenix Life Insurance Company
One American Row One American Row
Hartford, CT 06102 Hartford, CT 06102
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-243-4361
------------
Date of fiscal year end: December 31
-----------
Date of reporting period: June 30, 2005
-------------
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.
JUNE 30, 2005
SEMIANNUAL REPORT
[GRAPHIC OMITTED] PHOENIX CA INTERMEDIATE TAX-FREE BOND FUND
[GRAPHIC OMITTED] PHOENIX INTERMEDIATE BOND FUND
[GRAPHIC OMITTED] PHOENIX OVERSEAS FUND
[GRAPHIC OMITTED] PHOENIX RISING DIVIDENDS FUND
[GRAPHIC OMITTED] PHOENIX SMALL-MID CAP FUND
[GRAPHIC OMITTED]
Get Fund documents by e-mail instead.
Eligible shareholders may sign up for E-Delivery at PhoenixFunds.com.
TRUST NAME; PHOENIX-KAYNE FUNDS
[GRAPHIC OMITTED] PHOENIXFUNDS(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 invwstment risks,
including possible loss of the principal invested.
- --------------------------------------------------------------------------------
This report is not authorized for distribution to prospective investors in the
Phoenix-Kayne 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
DEAR SHAREHOLDER:
I encourage you to review this semiannual report for Phoenix CA
Intermediate Tax-Free Bond Fund, Phoenix Intermediate Bond Fund, Phoenix
Overseas Fund, Phoenix Rising Dividends Fund, and Phoenix Small-Mid Cap Fund,
for the six months ended June 30, 2005. 1
At mid-year, the United States economy is growing at a more moderate pace
than we experienced in 2004. Inflation concerns seem to be subsiding after
peaking this spring, despite continued high energy prices. The equity markets
remained sluggish through the first half of 2005, giving back some of the gains
from last fall's post-presidential election rally. The Federal Reserve (the
"Fed") has continued to tighten interest rates and instituted its ninth
consecutive 25 basis point rate hike on June 30. As a result of the Fed's
efforts, the Treasury yield curve has flattened considerably over the past year,
with short rates rising while rates for longer dated maturities declining. The
combination of moderate economic growth and low inflation should provide a
favorable environment for both the equity and fixed income markets in the second
half of the year.
No matter what the market brings, 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. Keep in mind that finding the best
balance of performance and protection requires discipline and diversification. 2
Your Phoenix Fund allocation may help in this effort.
As an alternative to paper mail, if you would like to view your fund
communications electronically, including account statements, prospectuses and
annual and semiannual reports, sign up for our E-Delivery service. To register,
go online to PhoenixFunds.com, select the Individual Investors option, and
follow the E-Delivery instructions, or call Mutual Fund Services at
1-800-243-1574 and a customer service representative will be happy to assist
you.
Sincerely,
/s/ Philip R. McLoughlin
- ------------------------
Philip R. McLoughlin
Chairman, Phoenix Funds
JULY 2005
1 EFFECTIVE JULY 1, 2005, THE FUND NAMES WERE CHANGED FROM PHOENIX-KAYNE
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND, PHOENIX-KAYNE INTERMEDIATE TOTAL
RETURN BOND FUND, PHOENIX-KAYNE INTERNATIONAL FUND, PHOENIX-KAYNE RISING
DIVIDENDS FUND, AND PHOENIX-KAYNE SMALL-MID CAP FUND, RESPECTIVELY.
2 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 Chairman of the Phoenix Funds
Board of Trustees. There is no guarantee that market forecasts discussed will be
realized.
1
TABLE OF CONTENTS
Glossary ........................................................... 3
Phoenix CA Intermediate Tax-Free Bond Fund ......................... 5
Phoenix Intermediate Bond Fund ..................................... 13
Phoenix Overseas Fund .............................................. 19
Phoenix Rising Dividends Fund ...................................... 27
Phoenix Small-Mid Cap Fund ......................................... 34
Notes to Financial Statements ...................................... 41
Results of Shareholder Meeting ..................................... 46
Fund Management Tables ............................................. 47
2
GLOSSARY
ADR (AMERICAN DEPOSITARY RECEIPT)
Represents shares of foreign companies traded in U.S. dollars on U.S. exchanges
that are held by a bank or a trust. Foreign companies use ADRs in order to make
it easier for Americans to buy their shares.
BASIS POINT (BP)
One-hundredth of a percentage point (0.01%). Basis points are often used to
measure changes in or differences between yields on fixed income securities,
since these often change by very small amounts.
CAL-MORTGAGE
Cal-Mortgage administers the California Health Facility Construction Loan
Insurance Program, which provides credit enhancement for eligible health care
facilities when they borrow money for capital needs. Cal-Mortgage insured loans
are guaranteed by the "full faith and credit" of the State of California and
permits borrowers to obtain lower interest rates.
FEDERAL RESERVE (THE "FED")
The central bank of the United States, responsible for controlling the money
supply, interest rates and credit with the goal of keeping the U.S. economy and
currency stable. Governed by a seven-member board, the system includes 12
regional Federal Reserve Banks, 25 branches and all national and state banks
that are part of the system.
FGIC (FINANCIAL GUARANTY INSURANCE COMPANY)
A leading financial guaranty insurance company providing triple-A credit
enhancement on public finance, structured finance and asset-backed securities.
FNMA OR "FANNIE MAE" (FEDERAL NATIONAL MORTGAGE ASSOCIATION)
Congressionally chartered corporation which buys mortgages on the secondary
market, pools them and sells them as mortgage-backed securities to investors on
the open market. Monthly principal and interest payments are guaranteed by FNMA
but not the U.S. government.
FSA (FINANCIAL SECURITY ASSURANCE, INC.)
A leading provider of Aaa/AAA/AAA financial guaranty insurance for asset-backed
securities, municipal bonds and other structured obligations in the global
markets.
GNMA OR "GINNIE MAE" (GOVERNMENT NATIONAL MORTGAGE ASSOCIATION)
Wholly-owned U.S. government corporation within the Department of Housing and
Urban Development, which guarantees the timely payment of principal and interest
on securities that are issued by private institutions and are backed by pools of
federally-issued or guaranteed mortgage loans.
3
GLOSSARY (CONTINUED)
MBIA (MUNICIPAL BOND INSURANCE ASSOCIATION)
One of the largest insurers of financial obligations for municipalities,
not-for-profit organizations, banks, insurance and finance companies, and other
private-sector entities in the primary and secondary markets. Provides
triple-A-rating guarantee as an unconditional and irrevocable guarantee of full
principal and interest payment.
SPONSORED ADR
An ADR which is issued with the cooperation of the company whose stock will
underlie the ADR. These shares carry all the rights of the common share such as
voting rights. ADRs must be sponsored to be able to trade on the NYSE.
XLCA (XL CAPITAL ASSURANCE)
A monoline financial guarantee insurance company that provides triple-A rated
financial guaranty insurance for the asset-backed structured finance, structured
investment products, future flow, global infrastructure project finance, power &
utilities, public finance, and bank deposit insurance markets worldwide.
YIELD CURVE
A line chart that shows interest rates at a specific point in time for
securities of equivalent quality but with different maturities. A "normal or
positive" yield curve indicates that short-term securities have a lower interest
rate than long-term securities; an "inverted or negative" yield curve indicates
short-term rates are exceeding long-term rates; and a "flat yield curve" means
short- and long-term rates are about the same.
4
PHOENIX CA INTERMEDIATE TAX-FREE BOND FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of costs on
your investment. All mutual funds have operating expenses. As a shareholder of
the CA Intermediate Tax-Free Bond Fund, you incur ongoing costs, including
investment advisory fees and other expenses. Class X shares are sold without a
sales charge and do not incur distribution and service fees. This example is
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. This example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire six- month period.
ACTUAL EXPENSES
The first line of the accompanying table 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 table 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 the other funds.
Please note that the expenses shown in the accompanying table is meant to
highlight your ongoing costs only and do not reflect any transactional costs.
Therefore, the second line of the accompanying table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. If you have incurred transactional costs, your costs
could have been higher. The calculations assume no shares were bought or sold
during the period. Your actual costs may have been higher or lower, depending on
the amount of your investment and the timing of any purchases or redemptions.
CA INTERMEDIATE BEGINNING ENDING EXPENSES PAID
TAX-FREE BOND FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS X DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------------ ----------------- ------------- -------------
Actual $1,000.00 $1,011.80 $3.74
Hypothetical (5% return
before expenses) 1,000.00 1,021.03 3.77
* EXPENSES ARE EQUAL TO THE FUND'S CLASS X ANNUALIZED EXPENSE RATIO OF 0.75%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL
STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING
EXPENSES AND OTHER SHAREHOLDER COSTS, REFER TO THE PROSPECTUS.
5
Phoenix CA Intermediate Tax-Free Bond Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 6/30/05
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
General Obligation 18%
Water & Sewer Revenue 16
Pre-Refunded 11
Transportation Revenue 9
Power Revenue 9
General Revenue 9
Municipal Utility District Revenue 8
Other 20
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
(UNAUDITED)
PAR
VALUE
(000) VALUE
------ ------------
MUNICIPAL TAX-EXEMPT BONDS(d)--98.4%
DEVELOPMENT REVENUE--4.4%
Los Angeles County Public Works
Financing Authority Series A 5.50%,
10/1/18 (FSA Insured) .......................... $ 450 $ 505,845
Menlo Park Community Development
Agency Las Pulgas Community
Development Project 5.375%, 6/1/16
(AMBAC Insured) ................................ 250 260,637
Ontario Redevelopment Financing
Authority Ontario Redevelopment Project
No. 1 6.90%, 8/1/10 (MBIA Insured) ............. 70 82,496
Ontario Redevelopment Financing Authority
Project No. 1 Center City & Cimarron
5.25%, 8/1/13 (MBIA Insured) ................... 500 557,320
Riverside County Redevelopment Agency
Jurupa Valley Project Area 5.25%, 10/1/17
(AMBAC Insured) ................................ 250 277,888
------------
1,684,186
------------
FACILITIES REVENUE--2.3%
California State Public Works Board
Series C 5.25%, 11/1/20 ........................ 500 539,190
Los Angeles State Building Authority
Department of General Services Series A
5.375%, 5/1/06 ................................. 200 203,694
PAR
VALUE
(000) VALUE
------ ------------
FACILITIES REVENUE--CONTINUED
Oakland State Building Authority Series A
5%, 4/1/17 (AMBAC Insured) ..................... $ 150 $ 158,267
------------
901,151
------------
GENERAL OBLIGATION--17.7%
Brea Olinda Unified School District
Series A 6%, 8/1/15 (FGIC Insured) ............. 150 181,164
California State 6.25%, 4/1/08 ................. 825 895,331
California State 5.50%, 4/1/10
(MBIA Insured) ................................. 200 221,726
California State 5.25%, 6/1/16 ................. 80 82,652
California State Unrefunded Balance-2001
5.375%, 3/1/06 ................................. 45 45,600
City of San Diego Public Safety
Communication Project 6.50%, 7/15/07 ........... 800 855,256
Grossmont Cuyamaca Community College
Series A 5%, 8/1/19 (MBIA Insured) ............. 250 271,035
Long Beach Unified School District
Series C 5.375%, 8/1/16 (MBIA Insured) ......... 300 326,742
Los Angeles Unified School District
Election of 1997 Series F 5%, 7/1/14
(FSA Insured) .................................. 500 554,060
Metropolitan Water District Southern
California Series A 5.25%, 3/1/11 .............. 180 192,625
See Notes to Financial Statements
6
Phoenix CA Intermediate Tax-Free Bond Fund
PAR
VALUE
(000) VALUE
------ ------------
GENERAL OBLIGATION--CONTINUED
Oakland Unified School District Alameda
County School Improvements 5%,
8/1/16 (FSA Insured) ........................... $ 400 $ 427,420
Puerto Rico Public Finance Corp.
Series A 5.25%, 8/1/30 (AMBAC Insured)(c) ...... 500 555,905
San Diego County Certificates of
Participation 5.25%, 11/1/15
(AMBAC Insured) ................................ 960 1,064,218
San Francisco City and County Educational
Facilities Unified School District Series B
5.50%, 6/15/12 ................................. 500 535,400
Wiseburn School District Series A 5%,
8/1/17 (MBIA Insured) .......................... 580 643,922
------------
6,853,056
------------
GENERAL REVENUE--8.9%
California State Public Works Board 5%,
11/1/17 (XLCA Insured) ......................... 460 503,442
San Jose Financing Authority Convention
Center Project Series F 5%, 9/1/15
(MBIA Insured) ................................. 1,000 1,083,490
Santa Clara County Financing Authority
Leasing Revenue 7.75%, 11/15/11
(AMBAC Insured) ................................ 400 500,016
South Coast Air Quality Management
District 6%, 8/1/11 (AMBAC Insured) ............ 1,000 1,144,430
Truckee Public Financing Authority Leasing
Revenue Series A 5.875%, 11/1/20
(AMBAC Insured) ................................ 200 221,114
------------
3,452,492
------------
HIGHER EDUCATION REVENUE--2.9%
California Educational Facilities Authority
Chapman University 5.375%, 10/1/16 ............. 250 262,683
California State Public Works Board
Community Colleges Series A
5.25%, 12/1/13 ................................. 290 310,839
University of California Series A 5%,
5/15/10 (AMBAC Insured) ........................ 500 544,405
------------
1,117,927
------------
PAR
VALUE
(000) VALUE
------ ------------
MEDICAL REVENUE--4.9%
California Health Facilities Financing
Authority Series A 6.25%, 10/1/13
(MBIA Insured) ................................. $1,000 $ 1,005,150
California Health Facilities Financing
Authority Series A 5%, 11/15/14 ................ 250 269,258
California Statewide Communities
Development Authority Los Angeles
Jewish Home 4.75%, 11/15/10
(CA ST MTG Insured) ............................ 500 529,775
San Joaquin County General Hospital
Project Certificates of Participation
5.25%, 9/1/12 (MBIA Insured) ................... 100 108,622
------------
1,912,805
------------
MUNICIPAL UTILITY DISTRICT REVENUE--7.5%
City of San Diego Public Facilities
Financial Authority Series A 5%,
5/15/13 (AMBAC Insured) ........................ 300 301,110
Los Angeles Wastewater System
Revenue 5%, 6/1/08 (FSA Insured) ............... 375 398,051
Sacramento Municipal Utility District
Electricity Revenue Series L 5.10%,
7/1/13 (AMBAC Insured) ......................... 500 530,425
Sacramento Municipal Utility District
Electricity Revenue Series O 5.25%,
8/15/10 (MBIA Insured) ......................... 500 553,650
Sacramento Municipal Utility District
Electricity Revenue Series O 5.25%,
8/15/15 (MBIA Insured) ......................... 310 342,643
Sacramento Municipal Utility District
Electricity Revenue Series O 5.25%,
8/15/17 (MBIA Insured) ......................... 200 219,900
Sacramento Municipal Utility District
Electricity Revenue Series P 5.25%,
8/15/17 (FSA Insured) .......................... 500 549,750
------------
2,895,529
------------
POWER REVENUE--9.0%
California State Department of Water
Resource Power Supply Series A
5.25%, 5/1/09 (MBIA Insured) ................... 1,000 1,082,460
City of Pasadena 5%, 6/1/17
(MBIA Insured) ................................. 300 322,989
See Notes to Financial Statements
7
Phoenix CA Intermediate Tax-Free Bond Fund
PAR
VALUE
(000) VALUE
------ ------------
POWER REVENUE--CONTINUED
Los Angeles Department of Water &
Power Series A-A-3 5.25%, 7/1/18 ............... $ 300 $ 308,637
Northern California Power Agency Public
Power Revenue Hydroelectric Project
No. 1 Series A 5%, 7/1/15
(MBIA Insured) ................................. 1,000 1,064,980
Southern California Public Power
Authority Series B 5%, 7/1/12
(FSA Insured) .................................. 635 704,367
------------
3,483,433
------------
PRE-REFUNDED--10.3%
California State 5.25%, 6/1/16
Prerefunded 6/1/06 @ 101 ....................... 170 175,760
Contra Costa County Home Mortgage
Revenue 7.50%, 5/1/14
(GNMA Collateralized)(b) ....................... 500 658,175
Cypress Residential Mortgage Revenue
Series B 7.25%, 1/1/12 (b) ..................... 200 247,500
Duarte Redevelopment Agency Single
Family Mortgage Revenue Series A
6.875%, 11/1/11 (FNMA Collateralized)(b) ....... 300 363,564
Fremont Union High School District/Santa
Clara County Series B 5.25%, 9/1/15
Prerefunded 9/1/10 @ 100 ....................... 200 221,934
Los Angeles Convention & Exhibit Center
Authority Certificates of Participation
9%, 12/1/20 Prerefunded 12/1/05 @ 100 .......... 150 153,845
Los Angeles County Public Works
Financing Authority Revenue Regional
Park and Open Space Series A 5%,
10/1/13 Prerefunded 10/1/07 @ 101 .............. 325 344,893
Metropolitan Water District of Southern
California Series A 5%, 7/1/13
Prerefunded 1/1/08 @ 101 ....................... 200 213,058
Modesto Wastewater Treatment Facilities
Revenue 6%, 11/1/12 (MBIA Insured)(b) .......... 735 867,785
Santa Clara Valley Transportation Authority
Series A 5%, 6/1/17 Prerefunded
6/1/11 @ 100 (MBIA Insured) .................... 500 536,085
PAR
VALUE
(000) VALUE
------ ------------
PRE-REFUNDED--CONTINUED
Stockton Housing Facilities Revenue
O'Connor Woods Project A 5.60%,
3/20/28 Prerefunded 9/20/17 @ 100
(GNMA Collateralized) .......................... $ 200 $ 201,230
------------
3,983,829
------------
School District Revenue--2.8%
Irvine Unified School District Community
Facilities District No. 86-1 5.50%,
11/1/13 (AMBAC Insured) ........................ 1,000 1,077,050
Transportation Revenue--9.2%
Alameda Corridor Transportation Authority
Series A 5.125%, 10/1/16
(MBIA Insured) ................................. 150 163,844
Alameda Corridor Transportation Authority
Series A 5.125%, 10/1/17
(MBIA Insured) ................................. 125 136,171
Port of Oakland California Series I 5.60%,
11/1/19 (MBIA Insured) ......................... 1,000 1,080,460
San Francisco Bay Area Rapid Transit
District Sales Tax Revenue 5.50%,
7/1/15 (FGIC Insured) .......................... 190 192,565
San Francisco Bay Area Rapid Transit
District Sales Tax Revenue 5.25%, 7/1/17 ....... 500 538,265
San Francisco City & County Airports
Commission Second Series - Issue 10B
5.375%, 5/1/17 (MBIA Insured) .................. 1,000 1,040,470
San Mateo County Transit District Series A
5%, 6/1/14 (MBIA Insured) ...................... 400 425,856
------------
3,577,631
------------
VETERAN REVENUE--2.5%
State of California Veterans Bonds
Series 5.15%, 12/1/14 .......................... 895 949,022
WATER & Sewer Revenue--16.0%
California State Department of Water
Resources Series T 5.125%, 12/1/12 ............. 250 269,400
California State Department of Water
Resources Series U 5.125%, 12/1/15 ............. 90 97,167
California State Department of Water
Resources Series W 5.50%, 12/1/13
(FSA-CR Insured) ............................... 1,000 1,156,290
See Notes to Financial Statements
8
Phoenix CA Intermediate Tax-Free Bond Fund
PAR
VALUE
(000) VALUE
------ ------------
El Dorado Irrigation District Certificates
of Participation Series A 5.25%,
3/1/16 (FGIC Insured) .......................... $ 365 $ 407,281
Los Angeles Waste Water System
Revenue Series B 5%, 6/1/14
(FGIC Insured) ................................. 700 745,248
Metropolitan Water District of Southern
California Series B 5%, 7/1/13 ................. 500 555,535
Modesto Waste Water Series A 5%,
11/1/19 (FSA Insured) .......................... 245 270,333
Mountain View Shoreline Regional Park
Community Series A 5.50%, 8/1/21
(MBIA Insured) ................................. 1,000 1,047,430
Redlands Financing Authority Series A
5%, 9/1/17 (FSA Insured) ....................... 1,000 1,075,590
Westlands Water District Revenue
Certificates of Participation 5.25%,
9/1/14 (MBIA Insured) .......................... 500 559,160
------------
6,183,434
------------
- ----------------------------------------------------------------------------
TOTAL MUNICIPAL TAX-EXEMPT BONDS
(IDENTIFIED COST $37,117,340) 38,071,545
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--98.4%
(Identified Cost $37,117,340) 38,071,545(a)
Other assets and liabilities, net--1.6% 636,922
------------
NET ASSETS--100.0% $ 38,708,467
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $1,059,778 and gross
depreciation of $105,573 for federal income tax purposes. At June 30, 2005,
the aggregate cost of securities for federal income tax purposes was
$37,117,340.
(b) Escrowed to maturity.
(c) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
(d) At June 30, 2005, 78% of the securities in the portfolio are backed by
insurance of financial institutions and financial guaranty assurance
agencies. Insurers with a concentration greater than 10% of net assets are
as follows: MBIA 36%, AMBAC 17%, and FSA 15%.
See Notes to Financial Statements
9
Phoenix CA Intermediate Tax-Free Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
(UNAUDITED)
ASSETS
Investment securities at value
(identified cost $37,117,340) $38,071,545
Cash 223,652
Receivables
Interest 499,190
Prepaid expenses 8,438
-----------
Total assets 38,802,825
-----------
LIABILITIES
Payables
Fund shares repurchased 506
Dividend distributions 54,175
Professional fee 14,891
Financial agent fee 4,449
Investment advisory fee 4,392
Transfer agent fee 2,176
Trustees' fee 491
Accrued expenses 13,278
-----------
Total liabilities 94,358
-----------
NET ASSETS $38,708,467
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $37,698,101
Undistributed net investment income 6,644
Accumulated net realized gain 49,517
Net unrealized appreciation 954,205
-----------
NET ASSETS $38,708,467
===========
Shares of beneficial interest outstanding,
no par value, unlimited authorization 3,612,491
Net asset value and offering price per share $10.72
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
INVESTMENT INCOME
Interest $ 769,924
---------
Total investment income 769,924
---------
EXPENSES
Investment advisory fee 94,650
Financial agent fee 25,141
Trustees 17,798
Professional 15,803
Transfer agent 8,150
Printing 7,023
Registration 6,547
Custodian 1,624
Miscellaneous 22,646
---------
Total expenses 199,382
Less expenses reimbursed by investment adviser (57,220)
Custodian fees paid indirectly (187)
---------
Net expenses 141,975
---------
NET INVESTMENT INCOME 627,949
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 49,517
Net change in unrealized appreciation (depreciation) on
investments (250,144)
---------
NET LOSS ON INVESTMENTS (200,627)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 427,322
=========
See Notes to Financial Statements
10
Phoenix CA Intermediate Tax-Free Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 627,949 $ 1,276,147
Net realized gain (loss) 49,517 387,638
Net change in unrealized appreciation (depreciation) (250,144) (463,295)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 427,322 1,200,490
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (625,821) (1,276,807)
Net realized short-term gains -- (31,815)
Net realized long-term gains -- (482,971)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (625,821) (1,791,593)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (255,632 and 500,653 shares, respectively) 2,730,297 5,418,380
Net asset value of shares issued from reinvestment of distributions
(26,209 and 72,718 shares, respectively) 280,487 786,372
Cost of shares repurchased (223,183 and 612,472 shares, respectively) (2,388,831) (6,696,885)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 621,953 (492,133)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 423,454 (1,083,236)
NET ASSETS
Beginning of period 38,285,013 39,368,249
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $6,644 AND $4,516, RESPECTIVELY) $38,708,467 $38,285,013
=========== ===========
See Notes to Financial Statements
11
Phoenix CA Intermediate Tax-Free Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS X
-----------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 -------------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.77 $10.96 $10.93 $10.74 $10.83 $10.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.18 0.37 0.41 0.46 0.47 0.49
Net realized and unrealized gain (loss) (0.05) (0.04) 0.04 0.24 (0.02) 0.54
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.13 0.33 0.45 0.70 0.45 1.03
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.18) (0.37) (0.41) (0.46) (0.47) (0.49)
Distributions from net realized gains -- (0.15) (0.01) (0.05) (0.07) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.18) (0.52) (0.42) (0.51) (0.54) (0.49)
------ ------ ------ ------ ------ ------
Change in net asset value (0.05) (0.19) 0.03 0.19 (0.09) 0.54
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.72 $10.77 $10.96 $10.93 $10.74 $10.83
====== ====== ====== ====== ====== ======
Total return 1.18%(2) 3.04% 4.25% 6.60% 4.26% 10.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $38,708 $38,285 $39,368 $33,307 $34,422 $31,353
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Net operating expenses 0.75%(3) 0.75% 0.75% 0.75% 0.75% 0.75%(1)
Gross operating expenses 1.05%(3) 0.98% 1.03% 0.98% 0.85% 0.96%
Net investment income 3.32%(3) 3.39% 3.72% 4.18% 4.38% 4.63%
Portfolio turnover 23%(2) 62% 33% 21% 61% 33%
<FN>
(1) For the period ended December 31, 2000, the ratio of net operating expenses excludes the effect of expense offsets for
custodian fees; if expense offsets were included, the ratio would have been 0.01% lower than ratio shown in the table.
(2) Not annualized.
(3) Annualized.
</FN>
See Notes to Financial Statements
12
PHOENIX INTERMEDIATE BOND FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of costs on
your investment. All mutual funds have operating expenses. As a shareholder of
the Intermediate Bond Fund, you incur ongoing costs, including investment
advisory fees and other expenses. Class X shares are sold without a sales charge
and do not incur distribution and service fees. This example is 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.
This example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire six-month period.
ACTUAL EXPENSES
The first line of the accompanying table 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 table 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 the 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.
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. If you have incurred transactional costs, your costs
could have been higher. The calculations assume no shares were bought or sold
during the period. Your actual costs may have been higher or lower, depending on
the amount of your investment and the timing of any purchases or redemptions.
INTERMEDIATE BEGINNING ENDING EXPENSES PAID
BOND FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS X DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------ ----------------- ------------- -------------
Actual $1,000.00 $1,013,20 $4.65
Hypothetical (5% return
before expenses) 1,000.00 1,020.11 4.68
* EXPENSES ARE EQUAL TO THE FUND'S CLASS X ANNUALIZED EXPENSE RATIO OF 0.93%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL
STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING
EXPENSES AND OTHER SHAREHOLDER COSTS, REFER TO THE PROSPECTUS.
13
Phoenix Intermediate Bond Fund
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS (UNAUDITED) 6/30/05
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Domestic Corporate Bonds 43%
U.S. Government Securities 25
Agency Non-Mortgage-Backed Securities 23
Agency Mortgage-Backed Securities 6
Other 3
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
(UNAUDITED)
PAR
VALUE
(000) VALUE
------ ------------
U.S. GOVERNMENT SECURITIES--25.1%
U.S. TREASURY NOTES--25.1%
U.S. Treasury Note 5.625%, 5/15/08 ............. $1,152 $ 1,213,110
U.S. Treasury Note 3.25%, 1/15/09 .............. 1,360 1,341,035
U.S. Treasury Note 6%, 8/15/09 ................. 1,700 1,847,621
U.S. Treasury Note 6.50%, 2/15/10 .............. 6,000 6,697,740
U.S. Treasury Note 4.75%, 5/15/14 .............. 2,100 2,228,955
- ----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES
(IDENTIFIED COST $13,369,488) 13,328,461
- ----------------------------------------------------------------------------
AGENCY MORTGAGE-BACKED SECURITIES--6.3%
FHLMC 7.50%, 4/1/14 ............................ 74 79,136
FHLMC 7%, 4/1/16 ............................... 72 76,498
FNMA 7.50%, 7/1/09 ............................. 33 35,069
FNMA 7%, 5/1/14 ................................ 62 65,957
FNMA 8%, 1/1/15 ................................ 17 18,011
FNMA 8.50%, 7/1/27 ............................. 373 407,712
GNMA 7%, 7/20/13 ............................... 82 85,900
GNMA 8%, '21-'27 ............................... 243 263,143
GNMA 8.50%, 12/15/22 ........................... 2 2,193
GNMA 8.50%, 8/15/24 ............................ 72 79,491
GNMA 8.50%, 8/15/25 ............................ 14 15,604
GNMA 8.50%, 6/15/26 ............................ 3 2,765
GNMA 7%, 6/15/31 ............................... 797 844,960
GNMA 6%, 8/15/31 ............................... 470 485,181
GNMA 6.50%, 10/15/31 ........................... 838 876,002
- ----------------------------------------------------------------------------
TOTAL AGENCY MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $3,298,336) 3,337,622
- ----------------------------------------------------------------------------
PAR
VALUE
(000) VALUE
------ ------------
AGENCY NON-MORTGAGE-BACKED
SECURITIES--22.7%
FFCB 7.125%, 11/16/15 .......................... $ 500 $ 564,657
FHLB 5.925%, 4/9/08 ............................ 1,000 1,054,105
FHLB 5.80%, 9/2/08 ............................. 350 369,918
FHLB 5.15%, 1/28/13 ............................ 345 345,059
FHLB 6.30%, 5/13/13 ............................ 220 233,200
FHLB 7.23%, 9/8/15 ............................. 1,500 1,731,201
FHLB 6%, 4/27/22 ............................... 1,020 1,045,933
FHLMC 7.09%, 11/22/16 .......................... 850 890,985
FNMA 6.625%, 10/15/07 .......................... 1,500 1,591,325
FNMA 6.625%, 11/15/10 .......................... 1,000 1,124,612
FNMA 6.375%, 6/15/09 ........................... 1,000 1,088,996
FNMA 6%, 5/16/11 ............................... 875 894,957
FNMA 6.96%, 9/5/12 ............................. 1,063 1,125,771
- ----------------------------------------------------------------------------
TOTAL AGENCY NON-MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $11,926,680) 12,060,719
- ----------------------------------------------------------------------------
DOMESTIC CORPORATE BONDS--43.0%
Aerospace & Defense--5.3%
Boeing Capital Corp. 5.65%, 5/15/06 ............ 425 431,760
Boeing Capital Corp. 5.75%, 2/15/07 ............ 815 837,190
Honeywell, Inc. 7%, 3/15/07 .................... 1,500 1,570,486
------------
2,839,436
------------
CONSUMER FINANCE--3.7%
General Electric Capital Corp.
Series A 4.625%, 9/15/09 ....................... 800 814,460
See Notes to Financial Statements
14
Phoenix Intermediate Bond Fund
PAR
VALUE
(000) VALUE
------ ------------
CONSUMER FINANCE--CONTINUED
National Rural Utilities Cooperative
Finance Corp. 7.25%, 3/1/12 .................... $1,000 $ 1,160,940
------------
1,975,400
------------
DIVERSIFIED BANKS--2.9%
Bank of America Corp. 7.125%, 5/1/06 ........... 540 552,830
Deutsche Bank AG NY 9.18%, 2/28/17(b) .......... 1,000 976,250
------------
1,529,080
------------
DIVERSIFIED COMMERCIAL SERVICES--1.2%
International Lease Finance Corp.
5.75%, 10/15/06 ................................ 600 611,798
HOUSEHOLD PRODUCTS--4.3%
Colgate-Palmolive Co. 5.98%, 4/25/12 ........... 620 680,175
Kimberly-Clark Corp. 5%, 8/15/13 ............... 1,500 1,579,046
------------
2,259,221
------------
HYPERMARKETS & SUPER CENTERS--3.2%
Wal-Mart Stores, Inc. 4.55%, 5/1/13 ............ 1,700 1,718,808
INTEGRATED OIL & GAS--2.1%
Conoco Funding Co. 6.35%, 10/15/11 ............. 1,000 1,108,744
INTEGRATED TELECOMMUNICATION SERVICES--2.4%
SBC Communications, Inc.
5.875%, 2/1/12 ................................. 1,200 1,284,522
INVESTMENT BANKING & BROKERAGE--2.5%
Bear Stearns Co., Inc. 7.80%, 8/15/07 .......... 825 884,102
Goldman Sachs Group, Inc. 5.25%, 4/1/13 ........ 425 440,118
------------
1,324,220
------------
LIFE & Health Insurance--2.0%
Metlife, Inc. 6.125%, 12/1/11 .................. 1,000 1,087,468
PAR
VALUE
(000) VALUE
------ ------------
OTHER DIVERSIFIED FINANCIAL SERVICES--2.1%
Heller Financial, Inc. 7.375%, 11/1/09 ......... $1,000 $ 1,122,663
PHARMACEUTICALS--8.2%
Abbott Laboratories 5.625%, 7/1/06 ............. 1,400 1,423,757
Johnson & Johnson 6.625%, 9/1/09 ............... 1,300 1,428,510
Pfizer, Inc. 4.50%, 2/15/14 .................... 1,500 1,513,267
------------
4,365,534
------------
RESTAURANTS--3.1%
McDonald's Corp. 6%, 4/15/11 ................... 1,500 1,629,355
- ----------------------------------------------------------------------------
TOTAL DOMESTIC CORPORATE BONDS
(IDENTIFIED COST $22,432,622) 22,856,249
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--97.1%
(IDENTIFIED COST $51,027,126) 51,583,051
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--3.8%
COMMERCIAL PAPER--3.8%
UBS Finance Delaware LLC 3.35%, 7/1/05 ......... 2,035 2,035,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $2,035,000) 2,035,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.9%
(IDENTIFIED COST $53,062,126) 53,618,051(a)
Other assets and liabilities, net--(0.9)% (484,249)
------------
NET ASSETS--100.0% $ 53,133,802
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $777,984 and gross
depreciation of $222,852 for federal income tax purposes. At June 30, 2005,
the aggregate cost of securities for federal income tax purposes was
$53,062,919.
(b) Variable or step coupon security; interest rate shown reflects the rate
currently in effect.
See Notes to Financial Statements
15
Phoenix Intermediate Bond Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
(UNAUDITED)
ASSETS
Investment securities at value
(identified cost $53,062,126) $53,618,051
Cash 3,907
Receivables
Interest 751,515
Fund shares sold 12,844
Prepaid expenses 11,253
-----------
Total assets 54,397,570
-----------
LIABILITIES
Payables
Investment securities repurchased 1,153,767
Fund shares repurchased 49,920
Investment advisory fee 21,744
Financial agent fee 5,098
Transfer agent fee 2,938
Trustees' fee 491
Accrued expenses 29,810
-----------
Total Liabilities 1,263,768
-----------
NET ASSETS $53,133,802
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $52,857,150
Distributions in excess of net investment income (3,513)
Accumulated net realized loss (275,760)
Net unrealized appreciation 555,925
-----------
NET ASSETS $53,133,802
===========
Shares of beneficial interest outstanding,
no par value, unlimited authorization 4,942,189
Net asset value and offering price per share $10.75
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
INVESTMENT INCOME
Interest $1,109,662
----------
Total investment income 1,109,662
----------
EXPENSES
Investment advisory fee 128,795
Financial agent fee 28,767
Professional 15,038
Trustees 17,798
Transfer agent 9,659
Printing 7,880
Registration 7,276
Custodian 3,326
Miscellaneous 21,950
----------
Total expenses 240,489
Custodian fees paid indirectly (315)
----------
Net expenses 240,174
----------
NET INVESTMENT INCOME 869,488
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (236,023)
Net change in unrealized appreciation (depreciation) on
investments 38,445
----------
NET LOSS ON INVESTMENTS (197,578)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 671,910
==========
See Notes to Financial Statements
16
Phoenix Intermediate Bond Fund
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
-------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 869,488 $ 1,862,328
Net realized gain (loss) (236,023) 372,116
Net change in unrealized appreciation (depreciation) 38,445 (1,179,904)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 671,910 1,054,540
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income (873,001) (1,895,342)
Net realized long-term gains -- (495,005)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (873,001) (2,390,347)
----------- -----------
FROM SHARE TRANSACTIONS
Proceeds from sales of shares (604,900 and 1,399,246 shares, respectively) 6,474,747 15,381,326
Net asset value of shares issued from reinvestment of distributions
(62,845 and 159,446 shares, respectively) 672,669 1,741,504
Cost of shares repurchased (424,765 and 899,478 shares, respectively) (4,549,366) (9,847,416)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 2,598,050 7,275,414
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS 2,396,959 5,939,607
NET ASSETS
Beginning of period 50,736,843 44,797,236
----------- -----------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME AND UNDISTRIBUTED NET INVESTMENT INCOME OF ($3,513)
AND $0, RESPECTIVELY) $53,133,802 $50,736,843
=========== ===========
See Notes to Financial Statements
17
Phoenix Intermediate Bond Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS X
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 -------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
Net asset value, beginning of period $10.80 $11.09 $11.31 $10.91 $10.82 $10.44
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.18 0.41 0.48 0.55 0.57 0.56
Net realized and unrealized gain (loss) (0.05) (0.17) (0.17) 0.45 0.28 0.39
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.13 0.24 0.31 1.00 0.85 0.95
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.18) (0.42) (0.48) (0.55) (0.57) (0.57)
Dividends from net realized gains -- (0.11) (0.05) (0.05) (0.19) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.18) (0.53) (0.53) (0.60) (0.76) (0.57)
------ ------ ------ ------ ------ ------
Change in net asset value (0.05) (0.29) (0.22) 0.40 0.09 0.38
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.75 $10.80 $11.09 $11.31 $10.91 $10.82
====== ====== ====== ====== ====== ======
Total return 1.32%(1) 2.13% 2.74% 9.45% 7.98% 9.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $53,134 $50,737 $44,797 $42,902 $40,375 $47,097
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Operating expenses 0.93%(2) 0.90% 0.94% 0.88% 0.96% 0.94%
Net investment income 3.38%(2) 3.71% 4.28% 4.96% 5.13% 5.34%
Portfolio turnover 17%(1) 54% 35% 27% 50% 10%
<FN>
(1) Not annualized.
(2) Annualized.
</FN>
See Notes to Financial Statements
18
PHOENIX OVERSEAS FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of costs on
your investment. All mutual funds have operating expenses. As a shareholder of
the Overseas 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 B and Class C shares; and (2) ongoing costs, including
investment advisory fees; distribution and service fees and other expenses.
Class X shares are sold without a sales charge and do not incur distribution and
service fees. 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 six-month 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 the 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 could have been higher. The calculations assume no shares were bought or
sold during the period. Your actual costs may have been higher or lower,
depending on the amount of your investment and the timing of any purchases or
redemptions.
BEGINNING ENDING EXPENSES PAID
OVERSEAS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS X DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------- ----------------- ------------- -------------
Actual $1,000.00 $ 969.50 $6.84
Hypothetical (5% return
before expenses) 1,000.00 1,017.76 7.03
* EXPENSES ARE EQUAL TO THE FUND'S CLASS X ANNUALIZED EXPENSE RATIO OF 1.40%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
OVERSEAS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS A DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------- ----------------- ------------- -------------
Actual $1,000.00 $ 967.80 $8.06
Hypothetical (5% return
before expenses) 1,000.00 1,016.51 8.29
* EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.65%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
OVERSEAS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS B DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------- ----------------- ------------- -------------
Actual $1,000.00 $ 964.30 $11.69
Hypothetical (5% return
before expenses) 1,000.00 1,012.74 12.05
* EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.40%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
OVERSEAS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS C DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------- ----------------- ------------- -------------
Actual $1,000.00 $ 964.30 $11.70
Hypothetical (5% return
before expenses) 1,000.00 1,012.74 12.06
* EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.40%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL
STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING
EXPENSES AND OTHER SHAREHOLDER COSTS, REFER TO THE PROSPECTUS.
19
Phoenix Overseas Fund
- --------------------------------------------------------------------------------
Country Weightings (Unaudited) 6/30/05
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
France 21%
United Kingdom 20
Japan 17
Switzerland 11
Germany 7
Spain 5
Netherlands 4
Other 15
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
(UNAUDITED)
SHARES VALUE
------- ------------
FOREIGN COMMON STOCKS(b)--99.7%
AUSTRALIA--1.4%
Rio Tinto Ltd. (Diversified Metals & Mining) .... 23,000 $ 780,301
BELGIUM--2.2%
Dexia (Diversified Banks) ....................... 26,600 584,858
Fortis (Multi-Sector Holdings) .................. 22,700 628,262
------------
1,213,120
------------
FRANCE--21.3%
Air Liquide SA (Industrial Gases) ............... 7,285 1,238,891
AXA Sponsored ADR (Multi-line Insurance) ........ 44,984 1,120,551
BNP Paribas SA (Diversified Banks) .............. 17,000 1,161,099
Carrefour SA (Food Retail) ...................... 10,800 522,316
Groupe Danone Sponsored ADR
(Packaged Foods & Meats) ........................ 32,380 566,650
L'Oreal SA (Personal Products) .................. 11,100 794,783
Lafarge SA (Construction Materials) ............. 6,100 554,457
LVMH Moet Hennessy Louis Vuitton SA
(Apparel, Accessories & Luxury Goods) ........... 8,200 631,289
PSA Peugeot Citroen SA (Automobile Manufacturers) 8,680 511,876
Sanofi-aventis (Pharmaceuticals) ................ 15,000 1,228,472
Schneider Electric SA (Electrical
Components & Equipment) ......................... 7,600 571,508
Societe Generale (Diversified Banks) ............ 6,600 669,264
Total SA Sponsored ADR (Integrated Oil & Gas) ... 17,496 2,044,408
------------
11,615,564
------------
SHARES VALUE
------- ------------
GERMANY--6.8%
Altana AG (Pharmaceuticals) ..................... 10,500 $ 599,765
BASF AG (Diversified Chemicals) ................. 10,800 714,829
Henkel KGaA (Personal Products) ................. 7,500 628,771
SAP AG (Application Software) ................... 5,340 923,827
Siemens AG (Industrial Conglomerates) ........... 12,000 871,910
------------
3,739,102
------------
IRELAND--2.7%
Allied Irish Banks plc (Diversified Banks) ...... 28,875 621,042
Bank of Ireland (Diversified Banks) ............. 54,000 876,359
------------
1,497,401
------------
JAPAN--17.7%
Canon, Inc. (Electronic Equipment Manufacturers) 22,000 1,153,120
Denso Corp. (Auto Parts & Equipment) ............ 22,600 513,173
Fanuc Ltd. (Industrial Machinery) ............... 9,300 588,302
Kao Corp. (Personal Products) ................... 38,000 892,839
Millea Holdings, Inc. (Property &
Casualty Insurance) ............................. 64 858,314
Mitsubishi Tokyo Financial Group, Inc.
(Diversified Banks) ............................. 125 1,053,702
Ricoh Co. Ltd. (Electronic Equipment Manufacturers) 33,000 513,766
Secom Co. Ltd. (Hotels, Resorts & Cruise Lines) . 15,000 643,568
Shin-Etsu Chemical Co. Ltd. (Diversified Chemicals) 29,200 1,104,816
SMC Corp. (Electrical Components & Equipment) ... 9,100 986,561
Takeda Pharmaceutical Co. Ltd. (Pharmaceuticals) 12,500 618,098
Toyota Motor Corp. (Automobile Manufacturers) ... 20,100 717,284
------------
9,643,543
------------
See Notes to Financial Statements
20
Phoenix Overseas Fund
SHARES VALUE
------- ------------
NETHERLANDS--4.5%
ABN AMRO Holding N.V. (Diversified Banks) ....... 28,700 $ 705,097
Koninklijke Philips Electronics N.V.
(Industrial Conglomerates) ...................... 44,500 1,120,879
Wolters Kluwer N.V. (Publishing & Printing) ..... 33,000 629,883
------------
2,455,859
------------
NORWAY--2.8%
Statoil ASA (Integrated Oil & Gas) .............. 75,500 1,537,220
SINGAPORE--3.0%
DBS Group Holdings Ltd. (Diversified Banks) ..... 120,000 1,015,275
Singapore Technologies Engineering Ltd.
(Aerospace & Defense) ........................... 444,000 636,372
------------
1,651,647
------------
SPAIN--4.6%
Banco Bilbao Vizcaya Argentaria SA
(Diversified Banks) ............................. 55,000 845,067
Banco Popular Espanol SA (Regional Banks) ....... 50,000 603,357
Telefonica SA (Integrated
Telecommunication Services) ..................... 64,532 1,052,756
------------
2,501,180
------------
SWEDEN--1.2%
Hennes & Mauritz AB Class B (Apparel Retail) .... 18,400 645,423
SWITZERLAND--11.6%
Credit Suisse Group (Diversified Banks) ......... 27,800 1,089,694
Nestle S.A. (Packaged Foods & Meats) ............ 2,800 715,296
Nestle S.A. Sponsored ADR (Packaged
Foods & Meats) .................................. 13,243 847,651
Novartis AG ADR (Pharmaceuticals) ............... 22,976 1,089,982
Roche Holding AG (Pharmaceuticals) .............. 5,700 719,209
Swiss Reinsurance (Property & Casualty Insurance) 11,400 699,037
Swisscom AG (Integrated
Telecommunication Services) ..................... 1,430 466,021
UBS AG (Diversified Capital Markets) ............ 9,090 708,612
------------
6,335,502
------------
SHARES VALUE
------- ------------
UNITED KINGDOM--19.9%
AstraZeneca plc (Pharmaceuticals) ............... 14,155 $ 583,577
BP plc (Integrated Oil & Gas) ................... 174,750 1,817,347
Compass Group plc (Restaurants) ................. 132,835 556,248
Diageo plc (Distillers & Vintners) .............. 46,800 688,474
GlaxoSmithKline plc (Pharmaceuticals) ........... 47,773 1,154,363
HBOS plc (Diversified Banks) .................... 43,000 661,108
Kingfisher plc (Home Improvement Retail) ........ 108,000 473,814
Pearson plc (Publishing & Printing) ............. 47,924 562,935
Prudential plc (Life & Health Insurance) ........ 68,500 606,997
Reed Elsevier plc (Publishing & Printing) ....... 99,100 946,519
Royal Bank of Scotland Group plc (Diversified Banks) 37,200 1,120,049
Tesco plc (Food Retail) ......................... 98,700 562,296
Vodafone Group plc Sponsored ADR (Wireless
Telecommunication Services) ..................... 46,980 1,142,554
------------
10,876,281
------------
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $45,462,759) 54,492,143
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.7%
(IDENTIFIED COST $45,462,759) 54,492,143
- ----------------------------------------------------------------------------
PAR VALUE
(000)
---------
SHORT-TERM INVESTMENTS--1.1%
Commercial Paper--1.1%
UBS Finance Delaware LLC 3.35%, 7/1/05 $ 615 615,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $615,000) 615,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.8%
(IDENTIFIED COST $46,077,759) 55,107,143(a)
Other assets and liabilities, net--(0.8)% (454,599)
------------
NET ASSETS--100.0% $ 54,652,544
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $9,758,877 and gross
depreciation of $729,493 for federal income tax purposes. At June 30, 2005,
the aggregate cost of securities for federal income tax purposes was
$46,077,759.
(b) Foreign common stocks are determined based on the country in which the
security is issued. The country of risk is determined based on criteria
described in Note 2G "Foreign security country determination" in the Notes
to Financial Statements.
See Notes to Financial Statements
21
Phoenix Overseas Fund
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
Aerospace & Defense .......................................... 1.2%
Apparel Retail ............................................... 1.2
Apparel, Accessories & Luxury Goods .......................... 1.2
Application Software ......................................... 1.7
Auto Parts & Equipment ....................................... 0.9
Automobile Manufacturers ..................................... 2.2
Construction Materials ....................................... 1.0
Distillers & Vintners ........................................ 1.3
Diversified Banks ............................................ 19.1
Diversified Capital Markets .................................. 1.3
Diversified Chemicals ........................................ 3.3
Diversified Metals & Mining .................................. 1.4
Electrical Components & Equipment ............................ 2.9
Electronic Equipment Manufacturers ........................... 3.1
Food Retail .................................................. 2.0
Home Improvement Retail ...................................... 0.9
Hotels, Resorts & Cruise Lines ............................... 1.2
Industrial Conglomerates ..................................... 3.7
Industrial Gases ............................................. 2.3
Industrial Machinery ......................................... 1.1
Integrated Oil & Gas ......................................... 9.9
Integrated Telecommunication Services ........................ 2.8
Life & Health Insurance ...................................... 1.1
Multi-Sector Holdings ........................................ 1.1
Multi-line Insurance ......................................... 2.0
Packaged Foods & Meats ....................................... 3.9
Personal Products ............................................ 4.2
Pharmaceuticals .............................................. 11.0
Property & Casualty Insurance ................................ 2.9
Publishing & Printing ........................................ 3.9
Regional Banks ............................................... 1.1
Restaurants .................................................. 1.0
Wireless Telecommunication Services .......................... 2.1
-----
100.0%
=====
See Notes to Financial Statements
22
Phoenix Overseas Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $46,077,759) $ 55,107,143
Cash 2,745
Receivables
Dividends 118,323
Tax reclaims 53,396
Fund shares sold 43,116
Prepaid expenses 22,754
------------
Total assets 55,347,477
------------
LIABILITIES
Payables
Fund shares repurchased 605,873
Investment advisory fee 27,846
Transfer agent fee 11,616
Financial agent fee 5,276
Distribution and service fees 3,581
Trustees' fees 491
Accrued expenses 40,250
------------
Total liabilities 694,933
------------
NET ASSETS $ 54,652,544
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 67,811,377
Undistributed net investment income 611,985
Accumulated net realized loss (22,795,142)
Net unrealized appreciation 9,024,324
------------
NET ASSETS $ 54,652,544
============
CLASS X
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $41,842,062) 3,393,529
Net asset value and offering price per share $12.33
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $11,368,736) 927,196
Net asset value per share $12.26
Offering price per share $12.26/(1-5.75%) $13.01
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $380,707) 31,323
Net asset value and offering price per share $12.15
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $1,061,039) 87,306
Net asset value and offering price per share $12.15
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 1,186,923
Interest 3,479
Foreign taxes withheld (144,533)
-----------
Total investment income 1,045,869
-----------
EXPENSES
Investment advisory fee 273,207
Service fees, Class A 14,119
Distribution and service fees, Class B 1,961
Distribution and service fees, Class C 5,557
Financial agent fee 30,932
Transfer agent 37,679
Custodian 29,097
Registration 18,578
Trustees 17,798
Professional 15,474
Printing 8,832
Miscellaneous 25,124
-----------
Total expenses 478,358
Less expenses reimbursed by investment adviser (53,929)
-----------
Net expenses 424,429
-----------
NET INVESTMENT INCOME 621,440
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 1,478,126
Net realized loss on foreign currency transactions (63,594)
Net change in unrealized appreciation (depreciation) on
investments (3,870,353)
Net change in unrealized appreciation (depreciation) on
foreign currency transactions and translation (9,753)
-----------
NET LOSS ON INVESTMENTS (2,465,574)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,844,134)
===========
See Notes to Financial Statements
23
Phoenix Overseas Fund
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 621,440 $ 562,786
Net realized gain (loss) 1,414,532 779,992
Net change in unrealized appreciation (depreciation) (3,880,106) 5,802,995
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1,844,134) 7,145,773
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (41,281) (408,160)
Net investment income, Class A (11,118) (69,738)
Net investment income, Class B -- (74)
Net investment income, Class C -- (209)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (52,399) (478,181)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (271,006 and 838,947 shares, respectively) 3,418,255 9,607,428
Net asset value of shares issued from reinvestment of
distributions (1,969 and 20,594 shares, respectively) 24,575 247,250
Cost of shares repurchased (551,141 and 814,640 shares, respectively) (6,904,457) (9,405,866)
------------ ------------
Total (3,461,627) 448,812
------------ ------------
CLASS A
Proceeds from sales of shares (111,421 and 215,708 shares, respectively) 1,401,299 2,477,322
Net asset value of shares issued from reinvestment of
distributions (885 and 5,756 shares, respectively) 10,988 69,334
Cost of shares repurchased (82,571 and 174,457 shares, respectively) (1,029,021) (1,989,541)
------------ ------------
Total 383,266 557,115
------------ ------------
CLASS B
Proceeds from sales of shares (4,890 and 20,499 shares, respectively) 60,680 234,135
Net asset value of shares issued from reinvestment of
distributions (0 and 7 shares, respectively) -- 74
Cost of shares repurchased (4,467 and 3,352 shares, respectively) (55,207) (37,604)
------------ ------------
Total 5,473 196,605
------------ ------------
CLASS C
Proceeds from sales of shares (16,842 and 47,786 shares, respectively) 214,136 549,915
Net asset value of shares issued from reinvestment of
distributions (0 and 17 shares, respectively) -- 198
Cost of shares repurchased (13,841 and 20,048 shares, respectively) (169,013) (226,867)
------------ ------------
Total 45,123 323,246
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (3,027,765) 1,525,778
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (4,924,298) 8,193,370
NET ASSETS
Beginning of period 59,576,842 51,383,472
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $611,985 AND $42,944, RESPECTIVELY) $ 54,652,544 $ 59,576,842
============ ============
See Notes to Financial Statements
24
Phoenix Overseas Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS X
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ----------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
Net asset value, beginning of period $12.73 $11.31 $ 9.01 $11.32 $16.15 $18.47
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.14(2) 0.13(2) 0.09(2) 0.03 0.04 0.03
Net realized and unrealized gain (loss) (0.53) 1.40 2.26 (2.29) (4.83) (1.82)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.39) 1.53 2.35 (2.26) (4.79) (1.79)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.11) (0.05) (0.03) (0.04) (0.03)
Distributions from net realized gain -- -- -- -- -- (0.50)
Return of capital -- -- -- (0.02) -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.01) (0.11) (0.05) (0.05) (0.04) (0.53)
------ ------ ------ ------ ------ ------
Change in net asset value (0.40) 1.42 2.30 (2.31) (4.83) (2.32)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.33 $12.73 $11.31 $ 9.01 $11.32 $16.15
====== ====== ====== ====== ====== ======
Total return (3.05)%(3) 13.56% 26.15% (20.04)% (29.72)% (9.65)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $41,842 $46,748 $41,013 $50,656 $56,513 $51,828
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.40 %(4) 1.40% 1.40% 1.41 % 1.38 % 1.38 %
Gross operating expenses 1.59 %(4) 1.60% 1.77% 1.41 % 1.38 % 1.38 %
Net investment income (loss) 2.22 %(4) 1.08% 0.93% 0.49 % 0.09 % 0.24 %
Portfolio turnover 18 %(3) 33% 49% 65 % 88 % 35 %
CLASS A
------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ----------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $12.68 $11.27 $ 9.01 $ 9.45
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.13(2) 0.10(2) (0.03)(2) (0.03)
Net realized and unrealized gain (loss) (0.54) 1.39 2.32 (0.41)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.41) 1.49 2.29 (0.44)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.08) (0.03) --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.01) (0.08) (0.03) --
------ ------ ------ ------
Change in net asset value (0.42) 1.41 2.26 (0.44)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.26 $12.68 $11.27 $ 9.01
====== ====== ====== ======
Total return (1) (3.22)%(3) 13.24% 25.56 % (4.76)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $11,369 $11,377 $9,582 $153
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.65 %(4) 1.65% 1.65 % 1.66 %(4)
Gross operating expenses 1.84 %(4) 1.85% 1.98 % 1.66 %(4)
Net investment income (loss) 2.04 %(4) 0.81% (0.31)% 0.24 %(4)
Portfolio turnover 18 %(3) 33% 49 % 65 %(3)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Computed using average shares outstanding.
(3) Not annualized.
(4) Annualized.
</FN>
See Notes to Financial Statements
25
Phoenix Overseas Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS B
---------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ----------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $12.60 $11.21 $ 8.98 $ 9.45
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.09(4) --(4)(5) (0.03)(4) (0.06)
Net realized and unrealized gain (loss) (0.54) 1.39 2.26 (0.41)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.45) 1.39 2.23 (0.47)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- --(5) -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- -- -- --
------ ------ ------ ------
Change in net asset value (0.45) 1.39 2.23 (0.47)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.15 $12.60 $11.21 $ 8.98
====== ====== ====== ======
Total return (1) (3.57)%(2) 12.43 % 24.83 % (4.97)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $381 $389 $154 $98
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.40 %(3) 2.40 % 2.40 % 2.41 %(3)
Gross operating expenses 2.59 %(3) 2.60 % 2.73 % 2.41 %(3)
Net investment income (loss) 1.39 %(3) (0.01)% (0.27)% (0.51)%(3)
Portfolio turnover 18 %(2) 33 % 49 % 65 %(2)
CLASS C
---------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ----------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $12.60 $11.21 $ 8.98 $ 9.45
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.09(4) --(4)(5) (0.06)(4) (0.06)
Net realized and unrealized gain (loss) (0.54) 1.39 2.29 (0.41)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.45) 1.39 2.23 (0.47)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- --(5) -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS -- -- -- --
------ ------ ------ ------
Change in net asset value (0.45) 1.39 2.23 (0.47)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.15 $12.60 $11.21 $ 8.98
====== ====== ====== ======
Total return (1) (3.57)%(2) 12.43% 24.83 % (4.97)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $1,061 $1,062 $634 $99
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.40 %(3) 2.40%(5) 2.40 % 2.41 %(3)
Gross operating expenses 2.59 %(3) 2.60% 2.73 % 2.41 %(3)
Net investment income (loss) 1.42 %(3) 0.02% (0.70)% (0.51)%(3)
Portfolio turnover 18 %(2) 33% 49 % 65 %(2)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Not annualized.
(3) Annualized.
(4) Computed using average shares outstanding.
(5) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
26
PHOENIX RISING DIVIDENDS FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Rising Dividends 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 B and Class C shares; and (2) ongoing costs, including
investment advisory fees; distribution and service fees; and other expenses.
Class X shares are sold without a sales charge and do not incur distribution and
service fees. 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 six-month 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 the 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 could have been higher. The calculations assume no shares were bought or
sold during the period. Your actual costs may have been higher or lower,
depending on the amount of your investment and the timing of any purchases or
redemptions.
BEGINNING ENDING EXPENSES PAID
RISING DIVIDENDS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS X DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- --------------------- ------------------ ------------- -------------
Actual $1,000.00 $ 966.10 $5.06
Hypothetical (5% return
before expenses) 1,000.00 1,019.58 5.22
* EXPENSES ARE EQUAL TO THE FUND'S CLASS X ANNUALIZED EXPENSE RATIO OF 1.04%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
RISING DIVIDENDS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS A DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- --------------------- ------------------ ------------- -------------
Actual $1,000.00 $ 964.90 $6.31
Hypothetical (5% return
before expenses) 1,000.00 1,018.29 6.51
* EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.30%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
RISING DIVIDENDS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS B DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- --------------------- ------------------ ------------- -------------
Actual $1,000.00 $ 961.20 $ 9.99
Hypothetical (5% return
before expenses) 1,000.00 1,014.48 10.31
* EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.05%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
RISING DIVIDENDS FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS C DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- --------------------- ------------------ ------------- -------------
Actual $1,000.00 $ 961.20 $ 9.98
Hypothetical (5% return
before expenses) 1,000.00 1,014.49 10.31
* EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.05%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL
STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING
EXPENSES AND OTHER SHAREHOLDER COSTS, REFER TO THE PROSPECTUS.
27
Phoenix Rising Dividends Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 6/30/05
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Financials 23%
Consumer Staples 16
Information Technology 16
Health Care 13
Consumer Discretionary 11
Industrials 11
Energy 4
Other 6
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
(UNAUDITED)
SHARES VALUE
------- ------------
DOMESTIC COMMON STOCKS--99.2%
ASSET MANAGEMENT & CUSTODY BANKS--2.0%
State Street Corp. .............................. 63,800 $ 3,078,350
BREWERS--1.5%
Anheuser-Busch Cos., Inc. ....................... 49,000 2,241,750
COMPUTER HARDWARE--1.5%
International Business Machines Corp. ........... 30,810 2,286,102
CONSUMER FINANCE--1.5%
American Express Co. ............................ 42,300 2,251,629
DATA PROCESSING & OUTSOURCED SERVICES--4.3%
Automatic Data Processing, Inc. ................. 96,430 4,047,167
Paychex, Inc. ................................... 80,700 2,625,978
------------
6,673,145
------------
DIVERSIFIED BANKS--8.2%
Bank of America Corp. ........................... 84,900 3,872,289
U.S. Bancorp .................................... 81,000 2,365,200
Wells Fargo & Co. ............................... 103,380 6,366,140
------------
12,603,629
------------
DIVERSIFIED CHEMICALS--2.5%
Du Pont (E.I.) de Nemours & Co. ................. 90,700 3,901,007
DIVERSIFIED COMMERCIAL SERVICES--1.9%
Cintas Corp. .................................... 75,200 2,902,720
ELECTRICAL COMPONENTS & EQUIPMENT--3.0%
Emerson Electric Co. ............................ 73,000 4,571,990
SHARES VALUE
------- ------------
FOOD DISTRIBUTORS--2.3%
Sysco Corp. ..................................... 96,500 $ 3,492,335
HEALTH CARE EQUIPMENT--2.2%
Medtronic, Inc. ................................. 65,100 3,371,529
HOME FURNISHINGS--2.2%
Leggett & Platt, Inc. ........................... 127,100 3,378,318
HOME IMPROVEMENT RETAIL--3.4%
Home Depot, Inc. (The) .......................... 135,850 5,284,565
HOUSEHOLD PRODUCTS--2.9%
Procter & Gamble Co. (The) ...................... 86,200 4,547,050
HYPERMARKETS & SUPER CENTERS--3.1%
Wal-Mart Stores, Inc. ........................... 98,400 4,742,880
INDUSTRIAL CONGLOMERATES--4.4%
General Electric Co. ............................ 197,160 6,831,594
INDUSTRIAL MACHINERY--1.4%
Illinois Tool Works, Inc. ....................... 27,220 2,168,890
INTEGRATED OIL & GAS--4.1%
Exxon Mobil Corp. ............................... 110,840 6,369,975
INTEGRATED TELECOMMUNICATION SERVICES--2.5%
SBC Communications, Inc. ........................ 163,200 3,876,000
INVESTMENT BANKING & BROKERAGE--1.5%
Morgan Stanley .................................. 44,000 2,308,680
LIFE & HEALTH INSURANCE--1.8%
AFLAC, Inc. ..................................... 62,700 2,713,656
See Notes to Financial Statements
28
Phoenix Rising Dividends Fund
SHARES VALUE
------- ------------
MOTORCYCLE MANUFACTURERS--2.1%
Harley-Davidson, Inc. ........................... 64,100 $ 3,179,360
MULTI-LINE INSURANCE--2.7%
American International Group, Inc. .............. 71,000 4,125,100
OTHER DIVERSIFIED FINANCIAL SERVICES--3.7%
Citigroup, Inc. ................................. 122,700 5,672,421
PACKAGED FOODS & MEATS--1.2%
Wrigley (Wm.) Jr. Co. ........................... 25,820 1,777,449
PHARMACEUTICALS--10.9%
Johnson & Johnson ............................... 107,770 7,005,050
Lilly (Eli) & Co. ............................... 51,700 2,880,207
Pfizer, Inc. .................................... 251,400 6,933,612
------------
16,818,869
------------
PUBLISHING & PRINTING--1.8%
Gannett Co., Inc. ............................... 39,200 2,788,296
REGIONAL BANKS--1.6%
Synovus Financial Corp. ......................... 88,500 2,537,295
SEMICONDUCTORS--6.7%
Intel Corp. ..................................... 234,500 6,111,070
Linear Technology Corp. ......................... 113,600 4,167,984
------------
10,279,054
------------
SOFT DRINKS--5.2%
Coca-Cola Co. (The) ............................. 116,560 4,866,380
PepsiCo, Inc. ................................... 59,700 3,219,621
------------
8,086,001
------------
SPECIALTY STORES--1.7%
Tiffany & Co. ................................... 77,900 2,552,004
SYSTEMS SOFTWARE--3.4%
Microsoft Corp. ................................. 213,480 5,302,843
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $144,499,617) 152,714,486
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.2%
(IDENTIFIED COST $144,499,617) 152,714,486
- ----------------------------------------------------------------------------
PAR
VALUE
(000) VALUE
----- ------------
SHORT-TERM INVESTMENTS--1.0%
COMMERCIAL PAPER--1.0%
UBS Finance Delaware LLC 3.35%, 7/1/05 $ 1,487 $ 1,487,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $1,487,000) 1,487,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $145,986,617) 154,201,486(a)
Other assets and liabilities, net--(0.2)% (264,931)
------------
NET ASSETS--100.0% $153,936,555
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $14,582,847 and gross
depreciation of $6,367,978 for federal income tax purposes. At June 30,
2005, the aggregate cost of securities for federal income tax purposes was
$145,986,617.
See Notes to Financial Statements
29
Phoenix Rising Dividends Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $145,986,617) $154,201,486
Cash 2,053
Receivables
Dividends 212,332
Fund shares sold 121,674
Prepaid expenses 26,483
------------
Total assets 154,564,028
------------
LIABILITIES
Payables
Fund shares repurchased 445,682
Investment advisory fee 96,796
Transfer agent fee 19,478
Distribution and service fees 16,614
Financial agent fee 9,698
Trustees' fees 491
Accrued expenses 38,714
------------
Total liabilities 627,473
------------
NET ASSETS $153,936,555
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $162,969,747
Undistributed net investment income 305,717
Accumulated net realized loss (17,553,778)
Net unrealized appreciation 8,214,869
------------
NET ASSETS $153,936,555
============
CLASS X
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $91,985,664) 6,013,533
Net asset value and offering price per share $15.30
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $56,128,080) 3,680,126
Net asset value per share $15.25
Offering price per share $15.25/(1-5.75%) $16.18
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $2,855,805) 188,683
Net asset value and offering price per share $15.14
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $2,967,006) 195,919
Net asset value and offering price per share $15.14
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 1,583,646
Interest 37,966
-----------
Total investment income 1,621,612
-----------
EXPENSES
Investment advisory fee 577,069
Service fees, Class A 68,025
Distribution and service fees, Class B 14,468
Distribution and service fees, Class C 14,933
Financial agent fee 57,582
Transfer agent 59,007
Trustees 23,496
Registration 23,044
Printing 18,444
Professional 13,194
Custodian 6,132
Miscellaneous 23,641
-----------
Total expenses 899,035
-----------
NET INVESTMENT INCOME 722,577
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 896,691
Net change in unrealized appreciation (depreciation) on
investments (7,122,405)
-----------
NET LOSS ON INVESTMENTS (6,225,714)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(5,503,137)
===========
See Notes to Financial Statements
30
Phoenix Rising Dividends Fund
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 722,577 $ 1,662,336
Net realized gain (loss) 896,691 404,869
Net change in unrealized appreciation (depreciation) (7,122,405) 4,306,551
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (5,503,137) 6,373,756
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class X (666,940) (1,111,168)
Net investment income, Class A (340,517) (419,864)
Net investment income, Class B (1,502) (3,205)
Net investment income, Class C (1,574) (2,729)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (1,010,533) (1,536,966)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (277,534 and 1,380,241 shares, respectively) 4,333,729 21,627,667
Net asset value of shares issued from reinvestment of distributions
(24,257 and 39,607 shares, respectively) 378,420 631,250
Cost of shares repurchased (341,895 and 716,034 shares, respectively) (5,323,000) (11,235,744)
------------ ------------
Total (610,851) 11,023,173
------------ ------------
CLASS A
Proceeds from sales of shares (479,496 and 1,681,448 shares, respectively) 7,469,783 26,244,605
Net asset value of shares issued from reinvestment of distributions
(21,611 and 26,018 shares, respectively) 336,274 413,479
Cost of shares repurchased (176,048 and 241,473 shares, respectively) (2,736,962) (3,777,804)
------------ ------------
Total 5,069,095 22,880,280
------------ ------------
CLASS B
Proceeds from sales of shares (17,158 and 110,300 shares, respectively) 265,536 1,713,590
Net asset value of shares issued from reinvestment of distributions
(89 and 126 shares, respectively) 1,376 1,990
Cost of shares repurchased (18,045 and 33,910 shares, respectively) (279,354) (522,985)
------------ ------------
Total (12,442) 1,192,595
------------ ------------
CLASS C
Proceeds from sales of shares (26,292 and 95,231 shares, respectively) 406,711 1,478,747
Net asset value of shares issued from reinvestment of distributions
(94 and 142 shares, respectively) 1,450 2,234
Cost of shares repurchased (29,370 and 24,835 shares, respectively) (454,420) (380,847)
------------ ------------
Total (46,259) 1,100,134
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 4,399,543 36,196,182
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (2,114,127) 41,032,972
NET ASSETS
Beginning of period 156,050,682 115,017,710
------------ ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$305,717 AND $593,673, RESPECTIVELY) $153,936,555 $156,050,682
============ ============
See Notes to Financial Statements
31
Phoenix Rising Dividends Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS X
--------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ----------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
Net asset value, beginning of period $15.95 $15.40 $13.03 $15.81 $17.97 $18.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.08 0.20(2) 0.07(2) 0.06 0.05 0.06
Net realized and unrealized gain (loss) (0.62) 0.53 2.33 (2.78) (2.03) (0.44)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.54) 0.73 2.40 (2.72) (1.98) (0.38)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.11) (0.18) (0.03) (0.06) (0.05) (0.03)
Distributions from net realized gain -- -- -- -- (0.13) (0.29)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.11) (0.18) (0.03) (0.06) (0.18) (0.32)
------ ------ ------ ------ ------ ------
Change in net asset value (0.65) 0.55 2.37 (2.78) (2.16) (0.70)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.30 $15.95 $15.40 $13.03 $15.81 $17.97
====== ====== ====== ====== ====== ======
Total return (3.39)%(3) 4.76% 18.45% (17.25)% (11.03)% (2.00)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $91,986 $96,558 $82,361 $77,263 $104,770 $131,252
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.04 %(4) 1.04% 1.19% 1.04 % 0.95 % 0.90 %
Net investment income (loss) 1.06 %(4) 1.25% 0.53% 0.42 % 0.30 % 0.30 %
Portfolio turnover 13 %(3) 22% 26% 26 % 32 % 42 %
CLASS A
-----------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $15.91 $15.35 $13.02 $13.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.06 0.17(2) 0.05(2) --(5)
Net realized and unrealized gain (loss) (0.63) 0.53 2.31 (0.51)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.57) 0.70 2.36 (0.51)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.09) (0.14) (0.03) --
Distributions from net realized gain -- -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.09) (0.14) (0.03) --
------ ------ ------ ------
Change in net asset value (0.66) 0.56 2.33
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.25 $15.91 $15.35 $13.02
====== ====== ====== ======
Total return (1) (3.51)%(3) 4.61% 18.06% (3.77)%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $56,128 $53,369 $28,988 $4,012
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.30 %(4) 1.28% 1.44% 1.29 %(4)
Net investment income (loss) 0.82 %(4) 1.09% 0.36% 0.17 %(4)
Portfolio turnover 13 %(3) 22% 26% 26 %(3)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Computed using average shares outstanding.
(3) Not annualized.
(4) Annualized.
(5) Amount is less than $0.01.
</FN>
See Notes to Financial Statements
32
Phoenix Rising Dividends Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS B
----------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 30, 2002
Net asset value, beginning of period $15.76 $15.20 $12.98 $13.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.01 0.06(4) (0.06)(4) (0.01)
Net realized and unrealized gain (0.62) 0.52 2.30 (0.54)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.61) 0.58 2.24 (0.55)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.02) (0.02) --
Distributions from net realized gain -- -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.01) (0.02) (0.02) --
------ ------ ------ ------
Change in net asset value (0.62) 0.56 2.22 (0.55)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.14 $15.76 $15.20 $12.98
====== ====== ====== ======
Total return (1) (3.88)%(2) 3.80% 17.29 % (4.07)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,856 $2,987 $1,717 $336
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.05 %(3) 2.04% 2.19 % 2.04 %(3)
Net investment income (loss) 0.08 %(3) 0.36% (0.47)% (0.58)%(3)
Portfolio turnover 13 %(2) 22% 26 % 26 %(2)
CLASS C
----------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $15.77 $15.20 $12.98 $13.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.01 0.05(4) (0.06)(4) (0.01)
Net realized and unrealized gain (0.63) 0.54 2.30 (0.54)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.62) 0.59 2.24 (0.55)
------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) (0.02) (0.02) --
Distributions from net realized gain -- -- -- --
------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.01) (0.02) (0.02) --
------ ------ ------ ------
Change in net asset value (0.63) 0.57 2.22 (0.55)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.14 $15.77 $15.20 $12.98
====== ====== ====== ======
Total return (1) (3.88)%(2) 3.85% 17.24 % (4.07)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,967 $3,137 $1,952 $575
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.05 %(3) 2.04% 2.19 % 2.04 %(3)
Net investment income (loss) 0.08 %(3) 0.32% (0.47)% (0.58)%(3)
Portfolio turnover 13 %(2) 22% 26 % 26 %(2)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Not annualized.
(3) Annualized.
(4) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
33
PHOENIX SMALL-MID CAP FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Small-Mid Cap 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 B and Class C shares; and (2) ongoing costs, including
investment advisory fees; distribution and service fees; and other expenses.
Class X shares are sold without a sales charge and do not incur distribution and
service fees. 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 six-month 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 the 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 could have been higher. The calculations assume no shares were bought or
sold during the period. Your actual costs may have been higher or lower,
depending on the amount of your investment and the timing of any purchases or
redemptions.
BEGINNING ENDING EXPENSES PAID
SMALL MID-CAP FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS X DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------------ ------------------ -------------- -------------
Actual $1,000.00 $ 955.60 $5.61
Hypothetical (5% return
before expenses) 1,000.00 1,018.99 5.81
* EXPENSES ARE EQUAL TO THE FUND'S CLASS X ANNUALIZED EXPENSE RATIO OF 1.16%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
SMALL MID-CAP FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS A DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------------ ------------------ -------------- -------------
Actual $1,000.00 $ 954.30 $6.89
Hypothetical (5% return
before expenses) 1,000.00 1,017.66 7.14
* EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.42%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
SMALL MID-CAP FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS B DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------------ ------------------ -------------- -------------
Actual $1,000.00 $ 950.20 $10.59
Hypothetical (5% return
before expenses) 1,000.00 1,013.80 11.00
* EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.19%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
BEGINNING ENDING EXPENSES PAID
SMALL MID-CAP FUND ACCOUNT VALUE ACCOUNT VALUE DURING
CLASS C DECEMBER 31, 2004 JUNE 30, 2005 PERIOD*
- ------------------ ------------------ -------------- -------------
Actual $1,000.00 $ 950.20 $10.56
Hypothetical (5% return
before expenses) 1,000.00 1,013.83 10.96
* EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.18%,
WHICH INCLUDES WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, 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 365 TO REFLECT THE
ONE-HALF YEAR PERIOD.
YOU CAN FIND MORE INFORMATION ABOUT THE FUND'S EXPENSES IN THE FINANCIAL
STATEMENTS SECTION THAT FOLLOWS. FOR ADDITIONAL INFORMATION ON OPERATING
EXPENSES AND OTHER SHAREHOLDER COSTS, REFER TO THE PROSPECTUS.
34
Phoenix Small-Mid Cap Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 6/30/05
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Information Technology 22%
Industrials 21
Financial 17
Consuemr Discretionary 16
Health Care 9
Energy 7
Materials 5
Other 3
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
(UNAUDITED)
SHARES VALUE
------- ------------
DOMESTIC COMMON STOCKS--99.1%
ADVERTISING--4.1%
Arbitron, Inc. .................................. 63,700 $ 2,732,730
Catalina Marketing Corp. ........................ 175,910 4,469,873
------------
7,202,603
------------
AEROSPACE & DEFENSE--2.2%
HEICO Corp. Class A ............................. 213,764 3,852,027
AIR FREIGHT & COURIERS--2.2%
Robinson (C.H.) Worldwide, Inc. ................. 65,900 3,835,380
APPLICATION SOFTWARE--8.2%
FactSet Research Systems, Inc. .................. 137,775 4,937,856
Fair Isaac Corp. ................................ 128,085 4,675,102
Jack Henry & Associates, Inc. ................... 180,815 3,310,723
Reynolds & Reynolds Co. (The) Class A ........... 57,762 1,561,307
------------
14,484,988
------------
ASSET MANAGEMENT & CUSTODY BANKS--2.2%
Eaton Vance Corp. ............................... 160,008 3,825,791
COMMUNICATIONS EQUIPMENT--2.9%
Black Box Corp. ................................. 30,995 1,097,223
Inter-Tel, Inc. ................................. 217,600 4,049,536
------------
5,146,759
------------
CONSTRUCTION & ENGINEERING--0.9%
Insituform Technolgies, Inc. Class A(b) ......... 95,480 1,530,544
CONSUMER FINANCE--3.0%
World Acceptance Corp.(b) ....................... 176,000 5,288,800
SHARES VALUE
------- ------------
DATA PROCESSING & OUTSOURCED SERVICES--2.8%
Certegy, Inc. ................................... 82,867 $ 3,167,177
TALX Corp. ...................................... 60,250 1,741,827
------------
4,909,004
------------
DIVERSIFIED COMMERCIAL SERVICES--5.7%
Cintas Corp. .................................... 68,565 2,646,609
Copart, Inc.(b) ................................. 211,000 5,021,800
Equifax, Inc. ................................... 67,885 2,424,173
------------
10,092,582
------------
ELECTRONIC EQUIPMENT MANUFACTURERS--2.0%
Mettler-Toledo International, Inc.(b) ........... 75,000 3,493,500
ENVIRONMENTAL & FACILITIES SERVICES--3.8%
ABM Industries, Inc. ............................ 204,530 3,988,335
Stericycle, Inc.(b) ............................. 55,400 2,787,728
------------
6,776,063
------------
GENERAL MERCHANDISE STORES--2.5%
99 Cents Only Stores(b) ......................... 343,000 4,359,530
HEALTH CARE EQUIPMENT--3.4%
Diagnostic Products Corp. ....................... 126,700 5,996,711
HEALTH CARE SERVICES--2.8%
IMS Health, Inc. ................................ 197,965 4,903,593
HOMEFURNISHING RETAIL--3.1%
Rent-A-Center, Inc.(b) .......................... 236,250 5,502,263
INDUSTRIAL CONGLOMERATES--2.9%
Teleflex, Inc. .................................. 87,410 5,189,532
See Notes to Financial Statements
35
Phoenix Small-Mid Cap Fund
SHARES VALUE
------- ------------
INDUSTRIAL MACHINERY--3.5%
Donaldson Co., Inc. ............................. 110,200 $ 3,342,366
Lincoln Electric Holdings, Inc. ................. 89,000 2,950,350
------------
6,292,716
------------
INSURANCE BROKERS--1.9%
Brown & Brown, Inc. ............................. 74,000 3,325,560
LEISURE PRODUCTS--1.7%
Polaris Industries, Inc. ........................ 57,000 3,078,000
LIFE & HEALTH INSURANCE--1.9%
StanCorp Financial Group, Inc. .................. 44,500 3,407,810
OFFICE ELECTRONICS--2.0%
Zebra Technologies Corp. Class A(b) ............. 79,300 3,472,547
OIL & GAS EQUIPMENT & SERVICES--2.0%
Universal Compression Holdings, Inc.(b) ......... 98,000 3,551,520
OIL & GAS EXPLORATION & PRODUCTION--1.9%
Noble Energy, Inc. .............................. 45,333 3,429,442
OIL & GAS REFINING, MARKETING & TRANSPORTATION--2.4%
World Fuel Services Corp. ....................... 185,200 4,335,532
PACKAGED FOODS & MEATS--1.0%
Lancaster Colony Corp. .......................... 43,300 1,858,436
PAPER PACKAGING--2.8%
Bemis Co., Inc. ................................. 172,944 4,589,934
Packaging Dynamics Corp. ........................ 34,100 477,332
------------
5,067,266
------------
PHARMACEUTICALS--3.1%
Axcan Pharma, Inc.(b) ........................... 175,000 2,674,000
Medicis Pharmaceutical Corp. Class A ............ 90,600 2,874,738
------------
5,548,738
------------
PROPERTY & CASUALTY INSURANCE--4.0%
Cincinnati Financial Corp. ...................... 90,674 3,587,063
Direct General Corp. ............................ 184,800 3,439,128
------------
7,026,191
------------
REINSURANCE--3.7%
Reinsurance Group of America, Inc. .............. 143,100 6,655,581
SHARES VALUE
------- ------------
SEMICONDUCTOR EQUIPMENT--1.9%
Cabot Microelectronics Corp.(b) ................. 119,650 $ 3,468,654
SEMICONDUCTORS--2.6%
Microchip Technology, Inc. ...................... 159,000 4,709,580
SPECIALIZED CONSUMER SERVICES--3.8%
Regis Corp. ..................................... 172,000 6,721,760
SPECIALTY CHEMICALS--2.1%
Balchem Corp. ................................... 35,850 1,077,292
Valspar Corp. (The) ............................. 54,520 2,632,771
------------
3,710,063
------------
SPECIALTY STORES--1.2%
Tiffany & Co. ................................... 63,200 2,070,432
TOBACCO--0.9%
UST, Inc. ....................................... 35,000 1,598,100
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $142,909,931) 175,717,598
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--0.7%
WATER UTILITIES--0.7%
Consolidated Water Co. Ltd. (Cayman Islands) .... 32,200 1,248,716
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $527,209) 1,248,716
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.8%
(IDENTIFIED COST $143,437,140) 176,966,314
- ----------------------------------------------------------------------------
PAR VALUE
(000)
---------
SHORT-TERM INVESTMENTS--0.7%
COMMERCIAL PAPER--0.7%
American Express Co. 3.20%, 7/1/05 $ 1,250 1,250,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $1,250,000) 1,250,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.5%
(IDENTIFIED COST $144,687,140) 178,216,314(a)
Other assets and liabilities, net--(0.5)% (848,002)
------------
NET ASSETS--100.0% $177,368,312
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $41,633,119 and gross
depreciation of $8,103,945 for federal income tax purposes. At June 30,
2005, the aggregate cost of securities for federal income tax purposes was
$144,687,140.
(b) Non-income producing.
(c) Foreign common stocks are determined based on the country in which the
security is issued. The country of risk is determined based on criteria
described in Note 2G "Foreign security country determination" in the Notes
to Financial Statements.
See Notes to Financial Statements
36
Phoenix Small-Mid Cap Fund
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $144,687,140) $178,216,314
Cash 5,053
Receivables
Fund shares sold 208,386
Dividends 115,239
Prepaid expenses 28,977
------------
Total assets 178,573,969
------------
LIABILITIES
Payables
Fund shares repurchased 496,157
Investment securities repurchased 465,465
Investment advisory fee 123,986
Transfer agent fee 33,377
Distribution and service fees 31,706
Financial agent fee 10,535
Trustees' fees 491
Accrued expenses 43,940
------------
Total liabilities 1,205,657
------------
NET ASSETS $177,368,312
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $151,766,798
Accumulated net investment loss (304,777)
Accumulated net realized loss (7,622,883)
Net unrealized appreciation 33,529,174
------------
NET ASSETS $177,368,312
============
CLASS X
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $81,184,727) 4,104,882
Net asset value and offering price per share $19.78
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $76,729,300) 3,905,922
Net asset value per share $19.64
Offering price per share $19.64/(1-5.75%) $20.84
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $4,034,799) 209,533
Net asset value and offering price per share $19.26
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $15,419,486) 799,646
Net asset value and offering price per share $19.28
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 899,753
Interest 16,163
-----------
Total investment income 915,916
-----------
EXPENSES
Investment advisory fee 751,356
Service fees, Class A 90,848
Distribution and service fees, Class B 19,696
Distribution and service fees, Class C 79,587
Financial agent fee 64,212
Transfer agent 99,491
Printing 26,053
Trustees 23,496
Registration 20,201
Professional 13,443
Custodian 7,034
Miscellaneous 25,276
-----------
Total expenses 1,220,693
-----------
NET INVESTMENT LOSS (304,777)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 7,730,680
Net change in unrealized appreciation (depreciation) on
investments (16,110,301)
-----------
NET LOSS ON INVESTMENTS (8,379,621)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(8,684,398)
===========
See Notes to Financial Statements
37
Phoenix Small-Mid Cap Fund
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
-------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ (304,777) $ (847,956)
Net realized gain (loss) 7,730,680 (2,427,226)
Net change in unrealized appreciation (depreciation) (16,110,301) 26,148,760
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,684,398) 22,873,578
------------ ------------
FROM SHARE TRANSACTIONS
CLASS X
Proceeds from sales of shares (269,767 and 674,594 shares, respectively) 5,268,817 12,509,815
Cost of shares repurchased (649,351 and 1,872,057 shares, respectively) (12,703,824) (34,757,079)
------------ ------------
Total (7,435,007) (22,247,264)
------------ ------------
CLASS A
Proceeds from sales of shares (637,273 and 1,898,490 shares, respectively) 12,380,273 34,894,504
Cost of shares repurchased (316,316 and 502,551 shares, respectively) (6,142,322) (9,306,773)
------------ ------------
Total 6,237,951 25,587,731
------------ ------------
CLASS B
Proceeds from sales of shares (55,386 and 96,144 shares, respectively) 1,068,446 1,759,784
Cost of shares repurchased (63,051 and 29,932 shares, respectively) (1,209,431) (536,789)
------------ ------------
Total (140,985) 1,222,995
------------ ------------
CLASS C
Proceeds from sales of shares (87,589 and 382,735 shares, respectively) 1,679,895 6,972,739
Cost of shares repurchased (166,904 and 203,578 shares, respectively) (3,201,242) (3,696,766)
------------ ------------
Total (1,521,347) 3,275,973
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (2,859,388) 7,839,435
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (11,543,786) 30,713,013
NET ASSETS
Beginning of period 188,912,098 158,199,085
------------ ------------
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS AND UNDISTRIBUTED
NET INVESTMENT INCOME OF ($304,777) AND $0, RESPECTIVELY) $177,368,312 $188,912,098
============ ============
See Notes to Financial Statements
38
Phoenix Small-Mid Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS X
------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 --------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
Net asset value, beginning of period $20.70 $18.17 $14.34 $17.70 $17.19 $14.82
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.01)(4) (0.06) (4) (0.05) (4) (0.06) (0.01) 0.04
Net realized and unrealized gain (loss) (0.91) 2.59 3.88 (3.30) 1.15 3.54
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.92) 2.53 3.83 (3.36) 1.14 3.58
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- -- -- -- (0.01) (0.04)
Distributions from net realized gain -- -- -- -- (0.62) (1.17)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS -- -- -- -- (0.63) (1.21)
------ ------ ------ ------ ------ ------
Change in net asset value (0.92) 2.53 3.83 (3.36) 0.51 2.37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.78 $20.70 $18.17 $14.34 $17.70 $17.19
====== ====== ====== ====== ====== ======
Total return (4.44)%(2) 13.92 % 26.71 % (18.98)% 6.40 % 24.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $81,185 $92,838 $103,269 $98,112 $95,138 $42,560
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.16 %(3) 1.15 % 1.26 % 1.22 % 1.17 % 1.29%
Net investment income (loss) (0.13)%(3) (0.32)% (0.35)% (0.38)% (0.14)% 0.26%
Portfolio turnover 11 %(2) 16 % 17 % 16 % 17 % 50%
CLASS A
---------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ---------------------- AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $20.59 $18.12 $14.34 $15.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.04)(4) (0.10)(4) (0.09)(4) (0.02)
Net realized and unrealized gain (loss) (0.91) 2.57 3.87 (0.93)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.95) 2.47 3.78 (0.95)
------ ------ ------ ------
Change in net asset value (0.95) 2.47 3.78 (0.95)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.64 $20.59 $18.12 $14.34
====== ====== ====== ======
Total return (1) (4.57)%(2) 13.63 % 26.36 % (6.21)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $76,729 $73,825 $39,656 $2,086
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 1.42 %(3) 1.41 % 1.51 % 1.47 %(3)
Net investment income (loss) (0.38)%(3) (0.55)% (0.60)% 0.62 %(3)
Portfolio turnover 11 %(2) 16 % 17 % 16 %(2)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Not annualized.
(3) Annualized.
(4) Computed using average shares outstanding.
</FN>
See Note6s to Financial Statements
39
Phoenix Small-Mid Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS B
---------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ------------------------ AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $20.27 $17.94 $14.30 $15.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.11)(4) (0.24)(4) (0.20)(4) (0.02)
Net realized and unrealized gain (loss) (0.90) 2.57 3.84 (0.97)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (1.01) 2.33 3.64 (0.99)
------ ------ ------ ------
Change in net asset value (1.01) 2.33 3.64 (0.99)
------ ------ ------ ------
Net asset value, end of period $19.26 $20.27 $17.94 $14.30
====== ====== ====== ======
Total return (1) (4.98)%(2) 12.99 % 25.45 % (6.47)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,035 $4,404 $2,709 $626
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.19 %(3) 2.16 % 2.26 % 2.22 %(3)
Net investment income (loss) (1.13)%(3) (1.31)% (1.35)% (1.37)%(3)
Portfolio turnover 11 %(2) 16 % 17 % 16 %(2)
CLASS C
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31, FROM INCEPTION
JUNE 30, 2005 ------------------------ AUGUST 30, 2002 TO
(UNAUDITED) 2004 2003 DECEMBER 31, 2002
Net asset value, beginning of period $20.30 $17.96 $14.31 $15.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.11)(4) (0.24)(4) (0.20)(4) (0.03)
Net realized and unrealized gain (loss) (0.91) 2.58 3.85 (0.95)
------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (1.02) 2.34 3.65 (0.98)
------ ------ ------ ------
Change in net asset value (1.02) 2.34 3.65 (0.98)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.28 $20.30 $17.96 $14.31
====== ====== ====== ======
Total return (1) (4.98)%(2) 13.03 % 25.59 % (6.47)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $15,419 $17,845 $12,565 $572
RATIO TO AVERAGE NET ASSETS OF:
Operating expenses 2.18 %(3) 2.16 % 2.26 % 2.22 %(3)
Net investment income (loss) (1.13)%(3) (1.31)% (1.35)% (1.37)%(3)
Portfolio turnover 11 %(2) 16 % 17 % 16 %(2)
<FN>
(1) Sales charges are not reflected in the total return calculation.
(2) Not annualized.
(3) Annualized.
(4) Computed using average shares outstanding.
</FN>
See Notes to Financial Statements
40
PHOENIX-KAYNE FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED)
1. ORGANIZATION
Phoenix-Kayne 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 five Funds are offered for sale (each a "Fund"). The CA
Intermediate Tax-Free Bond Fund is a non-diversified fund and seeks current
income exempt from federal and California state personal income tax. The
Intermediate Bond Fund is a diversified fund and seeks to maximize total return,
primarily through current income, with capital appreciation as a secondary
factor. The Overseas Fund is a diversified fund and seeks long-term capital
appreciation, with dividend income as a secondary consideration. The Rising
Dividends Fund is a diversified fund and seeks long-term capital appreciation,
with dividend income as a secondary consideration. The Small-Mid Cap Fund is a
diversified fund and seeks long-term capital appreciation, with dividend income
as a secondary consideration. The funds offer the following classes of shares
for sale:
Class X Class A Class B Class C
------- ------- ------- -------
CA Intermediate
Tax-Free Bond Fund ........... X -- -- --
Intermediate Bond Fund . ....... X -- -- --
Overseas Fund .................. X X X X
Rising Dividends Fund .......... X X X X
Small-Mid Cap Fund............ X X X X
Class X shares are sold without a sales charge. Class A shares are sold with
a front-end sales charge of up to 5.75%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a 1% contingent
deferred sales charge if redeemed within one year of purchase.
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 and/or service expenses and has exclusive voting rights with
respect to its distribution plan. Class X bears no distribution and/or service
expenses. 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 amount of assets and
liabilities, contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
A. SECURITY VALUATION:
Equity securities are valued at the official closing price (typically last
sale) on the exchange on which the securities are primarily traded, or if no
closing price is available, at the last bid price.
Debt securities are valued on the basis of broker quotations or valuations
provided by a pricing service, which utilizes information with respect to recent
sales, market transactions in comparable securities, quotations from dealers,
and various relationships between securities in determining value.
As required, some securities and assets may be valued at fair value as
determined in good faith by or under the direction of the Trustees.
Certain foreign common stocks may be fair valued in cases where closing
prices are not readily available or are deemed not reflective of readily
available market prices. For example, significant events (such as movement in
the U.S. securities market, or other regional and local developments) may occur
between the time that foreign markets close (where the security is principally
traded) and the time that the Fund calculates its net asset value (generally,
the close of the NYSE) that may impact the value of securities traded in these
foreign markets. In these cases, information from an external vendor may be
utilized to adjust closing market prices of certain foreign common stocks to
reflect their fair value. Because the frequency of significant events is not
predictable, fair valuation of certain foreign common stocks may occur on a
frequent basis.
On June 30, 2005, the Overseas Fund utilized fair value pricing for its
foreign common stocks.
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. Dividend income is
recorded on the ex-dividend date, or in the case of certain foreign securities,
as soon as the Fund is notified. Interest income is recorded on the accrual
basis. Each Fund amortizes premiums and accretes discounts using the effective
interest method. Realized gains and losses are determined on the identified cost
basis.
C. INCOME TAXES:
Each Fund is treated as a separate taxable entity. It is the policy of each
Fund in the Trust to comply with the requirements of the Internal Revenue Code
(the "Code") and to distribute substantially all of its taxable income to its
sharehol ders. Therefore, no provision for federal income taxes or excise taxes
has been made.
The Trust may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. Each Fund will
accrue such taxes and recoveries as applicable based upon current
interpretations of the tax rules and regulations that exist in the markets in
which they invest.
41
PHOENIX-KAYNE FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are declared and recorded by each Fund on the ex-dividend date.
For the CA Intermediate Tax-Free Bond Fund, income distributions are declared
and recorded daily. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from accounting
principles generally accepted in the United States of America. These differences
may include the treatment of non-taxable dividends, market premium and discount,
non-deductible expenses, expiring capital loss carryovers, foreign currency gain
or loss, gain or loss on futures contracts, partnerships, operating losses and
losses deferred due to wash sales. Permanent book and tax basis differences
relating to shareholder distributions will result in reclassifications to
capital paid in on shares of beneficial interest.
E. EXPENSES:
Expenses incurred by the Trust with respect to more than one Fund 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
appropriately made.
F. FOREIGN CURRENCY TRANSLATION:
Foreign securities and other assets and liabilities are valued using the
foreign currency exchange rate effective at the end of the reporting period.
Cost of investments is translated at the currency exchange rate effective at the
trade date. The gain or loss resulting from a change in currency exchange rates
between the trade and settlement date of a portfolio transaction is treated as a
gain or loss on foreign currency. Likewise, the gain or loss resulting from a
change in currency exchange rates between the date income is accrued and paid,
is treated as a gain or loss on foreign currency. The Trust does not isolate
that portion of the results of operations arising from changes in exchange rates
and that portion arising from changes in the market prices of securities.
G. FOREIGN SECURITY COUNTRY DETERMINATION:
A combination of the following criteria is used to assign the countries of
risk listed in the schedules of investments: country of incorporation, actual
building address, primary exchange on which the security is traded and country
in which the greatest percentage of company revenue is generated.
H. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS:
Certain Funds may engage in when-issued or delayed delivery transactions.
Certain Funds record when-issued and delayed delivery securities on the trade
date. Certain Funds maintain collateral for the securities purchased. Securities
purchased on a when-issued or delayed delivery basis begin earning interest on
the settlement date.
I. INDEMINIFICATIONS:
Under the Funds' organizational documents, its trustees and officers are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, the Funds enter into contracts that contain a
variety of indemnifications. The Funds' maximum exposure under these
arrangements is unknown. However, the Funds have not had prior claims or losses
pursuant to these contracts and expect the risk of loss to be remote.
3. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
The Adviser, Kayne Anderson Rudnick Investment Management, LLC provides each
Fund with investment management services under an Investment Advisory Agreement
(the "Agreement"). The majority interest of the Adviser is owned by Phoenix
Investment Partners, Ltd. ("PXP"). PXP is the wholly-owned investment management
subsidiary of The Phoenix Companies, Inc. ("PNX"). As compensation for its
services, the Adviser is entitled to a fee based upon the following annual rates
as a percentage of the average daily net assets of each Fund:
CA Intermediate Tax-Free Bond Fund ..................... 0.50%
Intermediate Bond Fund ................................. 0.50%
Overseas Fund .......................................... 0.95%
Rising Dividends Fund .................................. 0.75%
Small-Mid Cap Fund ..................................... 0.85%
The Adviser has voluntarily agreed to reimburse each Fund's total annual
operating expenses (excluding interest, taxes, and extraordinary expenses)
through April 30, 2006, to the extent that such expenses exceed the following
percentages of average annual net assets:
Class X Class A Class B Class C
------- ------- ------- --------
CA Intermediate
Tax-Free Bond Fund ........... 0.75% -- -- --
Intermediate Bond Fund........ 0.95% -- -- --
Overseas Fund................. 1.40% 1.65% 2.40% 2.40%
Rising Dividends Fund......... 1.20% 1.45% 2.20% 2.20%
Small-Mid Cap Fund............ 1.30% 1.55% 2.30% 2.30%
Any fee reimbursed and/or any Fund expense absorbed by the Adviser pursuant
to an agreed upon expense cap shall be reimbursed by the Fund to the Adviser, if
so requested by the Adviser, provided the aggregate amount of the Fund's current
operating expense for such fiscal year does not exceed the applicable limitation
on Fund expenses. For the six-month period ended June 30, 2005, the Adviser
reimbursed fees and paid expenses of $57,220 and $53,929 for the CA Intermediate
Tax-Free Bond Fund and Overseas Fund, respectively.
The Management Agreement permits the Adviser to seek reimbursement of any
reductions made to its management fee within the three-year period following
such reduction, subject to a Fund's ability to effect such reimbursement and
remain in compliance with applicable expense limitations.
42
PHOENIX-KAYNE FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
At June 30, 2005, the amount available for reimbursement that has been paid
and/or waived by the Adviser on behalf of each Fund listed below is as follows:
CA Intermediate Tax-Free Bond Fund .................... $321,176
Overseas Fund ......................................... 325,333
For the period ended June 30, 2005, the amounts recouped by the adviser from
each Fund listed below is as follows:
CA Intermediate Tax-Free Bond Fund .................... $ --
Overseas Fund ......................................... --
At June 30, 2005, the Adviser may recapture a portion of the below amounts no
later than the dates as stated below:
December 31,
-----------------------------------------------------
Fund 2005 2006 2007 2008
- ----- ---------- ---------- ---------- ------------
CA Intermediate
Tax-Free Bond Fund ..... $75,806 $100,802 $ 87,348 $57,220
Overseas Fund............. -- 162,514 108,890 53,929
Each Fund must pay its current ordinary operating expenses before the Adviser
is entitled to any recapture of the reimbursement. Any such reimbursement is
also contingent upon the Board of Trustees review and approval prior to the time
the reimbursement is initiated.
As distributor of each Fund's shares, Phoenix Equity Planning Corporation,
("PEPCO") an indirect, wholly-owned subsidiary of PNX, has advised the Trust
that it retained net selling commissions and deferred sales charges for the
six-month period ("the period") ended June 30, 2005, as follows:
Class A Class B Class C
Net Selling Deferred Deferred
Commissions Sales Charges Sales Charges
----------- ------------- -------------
Overseas Fund................... $ 396 $ 219 $ 36
Rising Dividends Fund........... 1,720 1,960 126
Small-Mid Cap Fund.............. 3,754 45,643 709
In addition, the Overseas, Rising Dividends and Small-Mid Cap Funds pay PEPCO
a distribution and/or service fee at an annual rate of 0.25% for Class A shares
and 1.00% for Class B shares and Class C shares applied to the daily average net
assets of each respective class.
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. ranges from 0.06% to 0.03% of the average daily
net assets of each Fund. Certain minimum fees may apply. For the period ended
June 30, 2005, the Trust incurred PEPCO financial agent fees totaling $206,634.
PEPCO serves as the Trust's transfer agent with State Street Bank and Trust
Company serving as sub-transfer agent. For the period ended June 30, 2005,
transfer agent fees were $213,986 as reported in the Statements of Operations,
of which PEPCO retained the following:
Transfer Agent Fee
Retained
------------------
CA Intermediate Tax-Free Bond Fund......... --
Intermediate Total Return Bond Fund........ --
Overseas Fund.............................. --
Rising Dividends Fund...................... --
Small-Mid Cap Fund......................... $15,499
PNX and its affiliates, the retirement plans of PNX and its affiliates, and
Phoenix affiliated Funds held shares which aggregated the following:
Aggregate
Net Asset
Shares Value
------ -----------
Overseas Fund
- --Class B.................................. 10,585 $ 128,608
- --Class C.................................. 10,585 128,608
Rising Dividends Fund
- --Class A.................................. 2,284,715 34,841,904
- --Class B.................................. 7,415 112,263
- --Class C.................................. 7,410 112,187
Small-Mid Cap Fund
- --Class A.................................. 1,946,044 38,220,304
- --Class B.................................. 6,540 125,960
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding U.S. Government securities and
agency securities and short-term securities) for the period ended June 30, 2005,
were as follows:
Fund Purchases Sales
- ------ ----------- -----------
CA Intermediate Tax-Free Bond Fund......... $ 9,209,807 $ 8,582,674
Intermediate Bond Fund..................... 6,761,390 5,006,043
Overseas Fund.............................. 10,201,554 12,733,291
Rising Dividends Fund...................... 27,012,790 19,950,003
Small-Mid Cap Fund......................... 20,351,291 22,473,162
Purchases and sales of long-term U.S Government and agency securities for the
period ended June 30, 2005, were as follows:
Fund Purchases Sales
- ------ ----------- -----------
Intermediate Bond Fund..................... $7,829,021 $3,656,475
43
PHOENIX-KAYNE FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
5. CREDIT RISK AND ASSET CONCENTRATIONS
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
Certain Funds may invest a high percentage of their assets in specific
sectors of the market in their pursuit of a greater investment return.
Fluctuations in these sectors of concentration may have a greater impact on a
Fund, positive or negative, than if the Fund did not concentrate its investments
in such sectors.
The CA Intermediate Tax-Free Bond Fund invests primarily in California
municipal securities and is more susceptible to economic, political and other
developments that may adversely affect issuers of such securities, than a more
geographically diversified fund. Such developments could result in certain
adverse consequences including impairing the market value and marketability of
the securities, as well as impairing the ability of certain issuers of
California municipal securities to pay principal and interest on their
obligations.
At June 30, 2005, the CA Intermediate Tax-Free Bond Fund invests 97% in
California municipal securities.
At June 30, 2005, the Intermediate Bond Fund held $28,726,802 in investments
issued by the U.S. Government, comprising 54% of the total net assets of the
Fund.
6. OTHER
As of June 30, 2005, the Trust had individual shareholders and omnibus
shareholder accounts (which are comprised of several individual shareholders)
which individually amounted to more than 10% of total shares outstanding as
detailed below.
CA Intermediate Tax-Free Bond Fund ..................... 67.9%
Intermediate Bond Fund ................................. 26.4%
Overseas Fund .......................................... 36.3%
Rising Dividends Fund .................................. 16.0%
7. REGULATORY EXAMS
Federal and state regulatory authorities from time to time make inquiries and
conduct examinations regarding compliance by The Phoenix Companies, Inc. and its
subsidiaries (collectively "the Company") with securities and other laws and
regulations affecting their registered products. The Boston District Office of
the SEC recently completed a compliance examination of certain of the Company's
affiliates that are registered under the Investment Company Act of 1940 or the
Investment Advisers Act of 1940. Following the examination, the staff of the
Boston District Office issued a deficiency letter primarily focused on perceived
weaknesses in procedures for monitoring trading to prevent market timing
activity. The staff requested the Company to conduct an analysis as to whether
shareholders, policyholders and contract holders who invested in the funds that
may have been affected by undetected market timing activity had suffered harm
and to advise the staff whether the Company believes reimbursement is necessary
or appropriate under the circumstances. Market timing is an investment technique
involving frequent short-term trading of mutual fund shares that is designed to
exploit market movements or inefficiencies in the way mutual fund companies
price their shares. A third party was retained to assist the Company in
preparing the analysis. The Company has responded to the SEC with respect to
each comment in the letter. We do not believe that the outcome of this matter
will be material to these financial statements.
8. FEDERAL INCOME TAX INFORMATION
The Funds have capital loss carryovers which may be used to offset future
capital gains, as follows:
Expiration Date
-------------------------------------------------------
2006 2009 2010 2011
---------- ----------- ----------- ----------
Overseas Fund...... -- $2,033,938 $14,384,915 $7,167,821
Rising Dividends
Fund............. -- 2,967,880 10,373,748 4,873,757
Small-Mid Cap Fund.. $5,032,416* 1,242,993 826,352 5,824,576
Expiration Date
-------------------------
2012 Total
---------- -----------
Overseas Fund... -- $23,586,674
Rising Dividends
Fund.......... -- 17,945,385
Small-Mid Cap Fund $1,326,184 14,252,521
* UTILIZATION OF THIS CAPITAL LOSS CARRYFORWARD WHICH AROSE IN CONNECTION WITH
THE TAX-FREE REORGANIZATION WITH SEFTON SMALL COMPANY VALUE FUND IS LIMITED BY
FEDERAL INCOME TAX REGULATIONS TO $5,032,416.
The Trust may not realize the benefit of these losses to the extent each
Fund does not realize gains on investments prior to the expiration of the
capital loss carryovers.
9. PROXY VOTING PROCEDURES AND VOTING RECORD (Form N-PX)
The Adviser votes proxies relating to portfolio securities in accordance
with procedures that have been approved by the Trust'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 12-month period ended June
30, 2004 (the Trust will be filing an updated Form N-PX on August 30, 2005 as of
June 30, 2005), free of charge, by calling toll-free 1-800-243-1574. This
information is also available through the Securities and Exchange Commission's
website at http://www.sec.gov.
44
PHOENIX-KAYNE FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005 (UNAUDITED) (CONTINUED)
10. FORM N-Q INFORMATION
The Trust files a complete schedule 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. Form N-Q is available on the SEC's website at
http://www.sec.gov. 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 by calling toll-free 1-800-SEC-0330.
45
RESULTS OF SHAREHOLDER MEETING
FEBRUARY 15, 2005
A Special Meeting of Shareholders of The Phoenix-Kayne Funds was held on
February 15, 2005, to approve the following matters:
1. Reconstitute the Board of Trustees and to elect fourteen Trustees to
such Board.
2. Ratify selection of PricewaterhouseCoopers LLP, Independent Registered
Public Accounting Firm, as auditors for the fiscal year ending December
31, 2005.
On the record date of January 3, 2005, for The Phoenix-Kayne Funds, there
were 488,472,115 eligible units representing 31,880,423 shares issued and
outstanding. 89.74% of the eligible units and entitled to vote were present by
proxy.
NUMBER OF VOTES:
1. Election of Trustees
For Withheld
----------- ----------
E. Virgil Conway 385,430,412 52,921,000
Harry Dalzell-Payne 385,430,412 52,921,000
S. Leland Dill 385,430,412 52,921,000
Francis E. Jeffries 385,456,548 52,894,865
Leroy Keith, Jr. 385,430,412 52,921,000
Marilyn E. LaMarche 385,456,548 52,894,865
Philip R. McLoughlin 385,430,412 52,921,000
Geraldine M. McNamara 385,469,906 52,881,506
Everett L. Morris 385,469,906 52,881,506
James M. Oates 385,430,412 52,921,000
Donald B. Romans 385,456,548 52,894,865
Richard E. Segerson 385,456,548 52,894,865
Ferdinand L. J. Verdonck 385,430,412 52,921,000
Lowell P. Weicker, Jr 384,840,119 53,511,294
2. PricewaterhouseCoopers LLP
For Against Abstain
----------- ---------- ----------
385,404,031 10,352,298 42,595,083
46
FUND MANAGEMENT TABLES (UNAUDITED)
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
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
E. Virgil Conway Served since 52 Chairman, Rittenhouse Advisors, LLC (consulting firm) since
Rittenhouse Advisors, LLC November 2001. Trustee/Director, Realty Foundation of New York
101 Park Avenue 2002. (1972-present), Josiah Macy, Jr. Foundation (Honorary)
New York, NY 10178 (2004-present), Pace University (Director/Trustee Emeritus)
DOB: 8/2/29 (2003-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),
Colgate University (Trustee Emeritus) (since 2004).
Director/Trustee, The Harlem Youth Development Foundation,
(Chairman) (1998-2002), Metropolitan Transportation Authority
(Chairman) (1992-2001), Trism, Inc. (1994-2001), Consolidated
Edison Company of New York, Inc. (1970-2002), Atlantic Mutual
Insurance Company (1974-2002), Centennial Insurance Company
(1974-2002), Union Pacific Corp. (1978-2002), BlackRock Freddie
Mac Mortgage Securities Fund (Advisory Director) (1990-2000),
Accuhealth (1994-2002), Pace University (1978-2003), New York
Housing Partnership Development Corp. (Chairman) (1981-2003),
Josiah Macy, Jr. Foundation (1975-2004). Trust/Director, Phoenix
Funds Complex (1983-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Harry Dalzell-Payne Served since 52 Retired. Trustee/Director, Phoenix Funds Complex (1983-present).
The Flat, Elmore Court November
Elmore, GL05, GL2 3NT 2002.
U.K.
DOB: 8/9/29
- ------------------------------------------------------------------------------------------------------------------------------------
S. Leland Dill Served since 50 Retired. Trustee, Phoenix Funds Family (1989-present). Trustee,
7721 Blue Heron Way 2005 Scudder Investments (55 portfolios) (1986-present). Director,
West Palm Beach, FL 33412 Coutts & Co. Trust Holdings Limited (1991-2000), Coutts & Co.
DOB: 3/28/30 Group (1991-2000) and Coutts & Co. International (USA) (private
banking) (1991-2000)Director, Vintors International Company,
Inc.(1989-1992).
- ------------------------------------------------------------------------------------------------------------------------------------
Francis E. Jeffries Served since 52 Director, The Empire District Electric Company (1984-2004).
8477 Bay Colony Dr. #902 2005 Trustee/Director, Phoenix Funds Complex (1987-present).
Naples, FL 34108
DOB: 9/23/30
- ------------------------------------------------------------------------------------------------------------------------------------
Leroy Keith, Jr. Served since 50 Partner, Stonington Partners, Inc. (private equity fund) since
Stonington Partners, Inc. 2005 2001. Director/Trustee, Evergreen Funds (six portfolios).
736 Market Street, Ste. 1430 Trustee, Phoenix Funds Family (1980-present). Director,
Chattanooga, TN 37402 Diversapak (2002-present), Obaji Medical Products Company
DOB: 2/14/39 (2002-present). Director, Lincoln Educational Services
(2002-2004). Chairman (1998 to 2000) and Chief Executive Officer
(1995-1998), Carson Products Company (cosmetics).
- ------------------------------------------------------------------------------------------------------------------------------------
47
FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Geraldine M. McNamara Served since 52 Managing Director, U.S. Trust Company of New York (private bank)
U.S. Trust Company of November 2002. (1982-present). Trustee/Director, Phoenix Funds Complex
New York (2001-present).
11 West 54th Street
New York, NY 10019
DOB: 4/17/51
- ------------------------------------------------------------------------------------------------------------------------------------
Everett L. Morris Served since 52 Retired. Trustee/Director, Phoenix Funds Complex (1991-present).
164 Laird Road 1995. Director, W.H. Reaves and Company (2004-present). Vice
Colts Neck, NJ 07722 President, W.H. Reaves and Company (investment management)
DOB: 5/26/28 (1993-2003).
- ------------------------------------------------------------------------------------------------------------------------------------
James M. Oates Served since 50 Chairman, Hudson Castle Group, Inc. (Formerly IBEX Capital
c/o Northeast Partners 2005 Markets, Inc.) (financial services) (1997-present). Managing
150 Federal Street, Director Wydown Group (consulting firm) (1994-present).
Suite 1000 Director, Investors Financial Service Corporation
Boston, MA 02110 (1995-present), Investors Bank & Trust Corporation
DOB: 5/31/46 (1995-present), Stifel Financial (1996-present), Connecticut
River Bancorp (1998-present), Connecticut River Bank
(1999-present), Trust Company of New Hampshire (2002-present).
Chairman, Emerson Investment Management, Inc. (2000-present).
Director/Trustee, John Hancock Trust (2004-present), AIB Govett
Funds (1991-2000) and Command Systems, Inc. (1998-2000), Phoenix
Investment Partners, Ltd. (1995-2001), 1Mind, Inc. (2000-2002),
1Mind.com, Plymouth Rubber Co. (1995-2003). Director and
Treasurer, Endowment for Health, Inc. (2000-2004). Trustee /
Director Phoenix Funds Family (1987 - present)
- ------------------------------------------------------------------------------------------------------------------------------------
Donald B. Romans Served since 50 Retired. President, Romans & Company (private investors and
39 S. Sheridan Road 2005 financial consultants) (1987-2005). Trustee/Director, Phoenix
Lake Forest, IL 60045 Funds Family (1996-present). Trustee, Burnham Investors Trust (5
DOB: 4/22/31 portfolios) (1967-2003).
- ------------------------------------------------------------------------------------------------------------------------------------
Richard E. Segerson Served since 50 Managing Director, Northway Management Company (1998-present).
Northway Management Company 2005 Trustee/Director, Phoenix Funds Family (1983-present).
164 Mason Street
Greenwich, CT 06830
DOB: 2/16/46
- ------------------------------------------------------------------------------------------------------------------------------------
Ferdinand L. J. Verdonck Served since 50 Director, Banco Urquijo (Chairman)(1998-present). Trustee,
Nederpolder, 7 2005 Phoenix Funds Family (2002-present). Director EASDAQ
B-9000 Gent, Belgium (Chairman)(2001-present), The J.P. Morgan Fleming Continental
DOB: 7/30/42 European Investment Trust (1998-present), Groupe SNEF(1998-
present), Degussa Antwerpen N.V.(1998-present), Santens N.V.
(1999-present) Managing Director, Almanij N.V. (1992-2003);
Director, KBC Bank and Insurance Holding Company (Euronext)
(1992-2003), KBC Bank (1992-2003), KBC Insurance (1992-2003),
Kredietbank, S.A. Luxembourgeoise (1992-2003), Investco N.V.
(1992-2003), Gevaert N.V. (1992-2003), Fidea N.V. (1992-2003),
Almafin N.V. (1992-2003), Centea N.V. (1992-2003), Dutch Chamber
of Commerce for Belgium and Luxemburg, Phoenix Investment
Partners, Ltd. (1995-2001).
- ------------------------------------------------------------------------------------------------------------------------------------
48
FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Lowell P. Weicker, Jr. Served since 50 Director, Medallion Financial New York (2003-present), Compuware
7 Little Point Street 1995. (1996-present), WWF, Inc. (2000-present). President, The Trust
Essex, CT 06426 for America's Health (non-profit) (2001-present).
DOB: 5/16/31 Trustee/Director, Phoenix Funds Family (1995-present).
Director, UST, Inc. (1995-2004), HPSC Inc. (1995-2004).
- ------------------------------------------------------------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------------------------------------------------------------
LENGTH OF NUMBER OF
TIME SERVED PORTFOLIOS IN
AND POSITION FUND COMPLEX
NAME, ADDRESS AND WITH THE OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TRUST TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
*Marilyn E. LaMarche Served since 50 Limited Managing Director, Lazard Freres & Co. LLC (1997-2005).
Lazard Freres & Co. LLC 2002. Trustee/Director, Phoenix Funds Family (2002-2005). Director,
30 Rockefeller Plaza, The Phoenix Companies, Inc. (2001-2005) and Phoenix Life
59th Floor Insurance Company (1989-2005).
New York, NY 10020
DOB: 5/11/34
- ------------------------------------------------------------------------------------------------------------------------------------
**Philip R. McLoughlin Served since 72 Director, PXRE Corporation (Delaware) (1985-present), World
DOB: 10/23/46 November 2002. Trust Fund (1991-present). Management Consultant (2002-2004),
Chairman (1997-2002), Chief Executive Officer (1995-2002),
Chairman Director (1995-2002) and Vice Chairman (1995-1997), Phoenix
Investment Partners, Ltd. Director and Executive Vice President,
The Phoenix Companies, Inc. (2000-2002). Director (1994-2002)
and Executive Vice President, Investments (1987-2002), Phoenix
Life Insurance Company. Director (1983-2002) and Chairman
(1995-2002), Phoenix Investment Counsel, Inc. Director
(1982-2002) and President (1990-2000), Phoenix Equity Planning
Corporation. Chairman and President, Phoenix/Zweig Advisers LLC
(2001-2002). Director (2001-2002) and President (April
2002-September 2002), Phoenix Investment Management Company.
Director and Executive Vice President, Phoenix Life and Annuity
Company (1996-2002). Director (1995-2000) and Executive Vice
President (1994-2002) and Chief Investment Counsel (1994-2002),
PHL Variable Insurance Company. Director, Phoenix National Trust
Holding Company (2001-2002). Director (1985-2002) and Vice
President (1986-2002) and Executive Vice President (2002-2002),
PM Holdings, Inc. Director, W.S. Griffith Associates, Inc.
(1995-2002). Director (1992-2002) and President (1993-1994),
W.S. Griffith Securities, Inc. Director/Trustee, Phoenix Funds
Complex (1989-present)
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* Ms. LaMarche is an "interested person," as defined in the Investment Company Act of 1940, by reason of her former 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 former relationship
with Phoenix Investment Partners, Ltd. and its affiliates.
</FN>
49
FUND MANAGEMENT TABLES (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
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel T. Geraci President since 2004. Executive Vice President, Asset Management, The Phoenix Companies, Inc.
DOB: 6/12/57 (wealth management) (since 2003). President and Chief Executive Officer,
Phoenix Investment Partners, Ltd. (since 2003). President, certain funds
within the Phoenix Fund Complex (2004-present). President and Chief
Executive Officer of North American investment operations, Pioneer
Investment Management USA, Inc. (2001-2003). President of Private Wealth
Management Group (2000-2001), Executive Vice President of Distribution and
Marketing for U.S. institutional services business (1998-2000) Fidelity
Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
George R. Aylward Executive Vice President Senior Vice President and Chief Operating Officer, Asset Management, The
DOB: 8/17/64 since 2004. Phoenix Companies, Inc. (2004-present). Executive Vice President and Chief
Operating Officer, Phoenix Investment Partners, Ltd. (2004-present). Vice
President, Phoenix Life Insurance Company (2002-2004). Vice President, The
Phoenix Companies, Inc. (2001-2004). Vice President, Finance, Phoenix
Investment Partners, Ltd. (2001-2002). Assistant Controller, Phoenix
Investment Partners, Ltd. (1996-2002). Executive Vice President, certain
funds within the Phoenix Fund Complex (2004-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Francis G. Waltman Senior Vice President Vice President and Chief Administrative Officer, Phoenix Investment
DOB: 7/27/62 since 2004. Partners Ltd. (2003-present), Senior Vice President and Chief
Administrative Officer, Phoenix Equity Planning Corporation (1999-present),
Senior Vice President, certain funds within the Phoenix Fund Family
(2004-present).
- ------------------------------------------------------------------------------------------------------------------------------------
Marc Baltuch Vice President and Chief Compliance Officer, Zweig-DiMenna Associates LLC (1989-present); Vice
900 Third Avenue Chief Compliance Officer President and Compliance Officer, certain of the Funds in the Phoenix Fund
New York, NY 10022 since 2004. Complex; Vice President, The Zweig Total Return Fund, Inc. (2004-present);
DOB: 9/23/45 Vice President, The Zweig Fund, Inc. (2004-present); President and Director
of Watermark Securities, Inc. (1991-present); Assistant Secretary of Gotham
Advisors Inc. (1990-present); Secretary, Phoenix-Zweig Trust (1989-2003);
Secretary, Phoenix-Euclid Market Neutral Fund (1999-2002).
- ------------------------------------------------------------------------------------------------------------------------------------
W. Patrick Bradley Chief Financial Officer Second Vice President, Fund Control and Tax, Phoenix Equity Planning
DOB: 3/2/72 and Treasurer since 2005. Corporation (2004-present). Chief Financial Officer and Treasurer or
Assistant Treasurer of certain funds within the Phoenix Fund Family
(2004-present). Senior Manager (2002-2004), Manager (2000-2002), Audit,
Deloitte & Touche, LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Kevin J. Carr Vice President, Counsel, Vice President and Counsel, Phoenix Life Insurance Company (May
One American Row Secretary and 2005-present). Vice President, Counsel, Chief Legal Officer and Secretary
Hartford, CT 06102 Chief Legal Officer of certain funds within the Phoenix Fund Complex (May 2005-present).
DOB: 8/3/54 since 2005. Compliance Officer of Investments and Counsel, Travelers Life & Annuity
Company (January 2005-May 2005). Assistant General Counsel, The Hartford
Financial Services Group (1999-2005).
- ------------------------------------------------------------------------------------------------------------------------------------
50
PHOENIX-KAYNE FUNDS
1800 Avenue of the Stars, 2nd Floor
Los Angeles, CA 90067
TRUSTEES
E. Virgil Conway
Harry Dalzell-Payne
S. Leland Dill
Francis E. Jeffries
Leroy Keith, Jr.
Marilyn E. LaMarche
Philip R. McLoughlin, Chairman
Geraldine M. McNamara
Everett L. Morris
James M. Oates
Donald B. Romans
Richard E. Segerson
Ferdinand L. J. Verdonck
Lowell P. Weicker, Jr.
OFFICERS
Daniel T. Geraci, President
George R. Aylward, Executive Vice President
Francis G. Waltman, Senior Vice President
Marc Baltuch, Vice President and Chief Compliance Officer
W. Patrick Bradley, Chief Financial Officer
and Treasurer
Kevin J. Carr, Vice President, Counsel, Secretary and Chief Legal Officer
INVESTMENT ADVISER
Kayne Anderson Rudnick Investment
Management, LLC
1800 Avenue of the Stars, 2nd Floor
Los Angeles, CA 90067
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
One American Row
Hartford, CT 06102
TRANSFER AGENT
Phoenix Equity Planning Corporation
One American Row
Hartford, CT 06102
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 5501
Boston, MA 02206-5501
HOW TO CONTACT US
Mutual Fund Services 1-800-243-1574
Advisor Consulting Group 1-800-243-4361
Telephone Orders 1-800-367-5877
Text Telephone 1-800-243-1926
Web site PHOENIXFUNDS.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.)
---------------
PRESORED
STANDARD
U.S. POSTAGE
PAID
Louisville, KY
Permit No. 1051
---------------
[GRAPHIC OMITTED] PHOENIXFUNDS(SM)
PHOENIX EQUITY PLANNING CORPORATION
P.O. box 150480
Hartford, CT 06115-0480
For more information about POhoenix mutual funds, please call your financial
representative, contact us at 1-800-243-1574 or visit PHOENIXFUNDS.COM.
NOT INSURED BY FDIC/NCUSIF OR ANY FEDERAL GOVERNMENT AGENCY.
NO BANK GUARANTEE. NOT A DEPOSIT. MAY LOSE VALUE.
PXP1739 8-05
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At a Board of Trustees meeting held May 16, 2005, the Trustees approved a Policy
for the Consideration of Trustee Nominees as follows:
PHOENIX FUNDS
POLICY FOR THE CONSIDERATION OF TRUSTEE NOMINEES
------------------------------------------------
The following Policy for the Consideration of Trustee Nominees (the
"Policy") shall be followed by the Governance and Nominating Committee (the
"Committee") of the Phoenix Funds (the "Trust") in filling vacancies on the
Board of Trustees or when Trustees are to be nominated for election by
shareholders.
MINIMUM NOMINEE QUALIFICATIONS
- ------------------------------
1. With respect to nominations for Trustees who are not interested persons
of the Trust as defined by Section 2(a)(19) of the Investment Company
Act of 1940 (the "1940 Act") ("Disinterested Trustees"), nominees shall
be independent of the Trust's investment advisers and other principal
service providers. The Committee shall also consider the effect of any
relationship beyond those delineated in the 1940 Act that might impair
independence, such as business, financial or family relationships with
the investment adviser or its affiliates.
2. Disinterested Trustee nominees must qualify for service on the Trust's
Audit Committees.
3. With respect to all Trustees, nominees must qualify under all
applicable laws and regulations.
4. The proposed nominee may not be within five years of the Trust's
retirement age for Trustees.
5. The Committees may also consider such other factors as they may
determine to be relevant.
OTHER QUALIFICATIONS
- --------------------
1. With respect to all proposed nominees, the Committee shall consider
whether the proposed nominee serves on boards of or is otherwise
affiliated with competing financial service organizations or their
related fund complexes or companies in which the Trust may invest.
2. The Committee shall consider whether the proposed nominee is able to
and intends to commit the time necessary for the performance of Trustee
duties.
3. The Committee shall consider the integrity and character of the
proposed nominee, and the proposed nominee's compatibility with the
current Trustees.
4. The Committee may require an interview with the proposed nominee.
NOMINEES RECOMMENDED BY SHAREHOLDERS
- ------------------------------------
1. The Committee shall consider nominations for openings on the Board of
Trustees from shareholders who have individually held for at least one
full year five percent of the shares of a series of the Trust.
2. The Committee shall give candidates recommended by shareholders the
same consideration as any other candidate.
3. Shareholder recommendations should be sent to the attention of the
Committee in care of the Trust's Secretary and should include
biographical information, including business experience for the past
ten years and a description of the qualifications of the proposed
nominee, along with a statement from the proposed nominee that he or
she is willing to serve and meets the requirements to be a
Disinterested Trustee, if applicable.
PROCESS FOR IDENTIFYING AND EVALUATING TRUSTEE NOMINEES
- -------------------------------------------------------
1. When identifying and evaluating prospective nominees for openings on
the Board of Trustees, the Committee shall review all recommendations
in the same manner, including those received from shareholders.
2. The Committee shall first determine if the prospective nominee meets
the minimum qualifications set forth above. Those proposed nominees
meeting the minimum qualifications will then be considered by the
Committee with respect to the other qualifications listed above, and
any other qualifications deemed to be important by the Committee.
3. Those nominees selected by the Committee shall be recommended to the
Board of Trustees.
ITEM 11. 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-2(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-2(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 second fiscal quarter of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(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(b) 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-Kayne Funds
-------------------------------------------------------------------
By (Signature and Title)* /s/ George R. Aylward
-------------------------------------------------------
George R. Aylward
Executive Vice President
(principal executive officer)
Date September 2, 2005
----------------------------------------------------------------------------
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/ George R. Aylward
-------------------------------------------------------
George R. Aylward
Executive Vice President
(principal executive officer)
Date September 2, 2005
----------------------------------------------------------------------------
By (Signature and Title)* /s/ W. Patrick Bradley
-------------------------------------------------------
W. Patrick Bradley
Chief Financial Officer and Treasurer
(principal financial officer)
Date September 2, 2005
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.