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 811-08343
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Phoenix Investment Trust 97
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(Exact name of registrant as specified in charter)
101 Munson Street
Greenfield, MA 01301-9668
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(Address of principal executive offices) (Zip code)
Kevin J. Carr, Esq.
Vice President, Chief Legal Officer, John H. Beers, Esq.
Counsel and Secretary for Registrant Vice President and Counsel
Phoenix Life Insurance Company Phoenix Life Insurance Company
One American Row One American Row
Hartford, CT 06103-2899 Hartford, CT 06103-2899
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(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 243-1574
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Date of fiscal year end: August 31
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Date of reporting period: February 28, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. 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.
[GRAPHIC OMITTED]
PHOENIX
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SEMIANNUAL REPORT
Phoenix Quality Small-Cap Fund
Phoenix Small-Cap Sustainable Growth Fund
Phoenix Small-Cap Value Fund
Phoenix Value Equity Fund
| | WOULDN'T YOU RATHER HAVE THIS
| | DOCUMENT E-MAILED TO YOU?
| | ELIGIBLE SHAREHOLDERS CAN
TRUST NAME: PHOENIX | | SIGN UP FOR E-DELIVERY AT
INVESTMENT TRUST 97 | February 28, 2007 | PHOENIXFUNDS.COM
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Mutual funds are not insured by the FDIC; are not deposits or other obligations
of a bank and are not guaranteed by a bank; and are subject to investment risks,
including possible loss of the principal invested.
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This report is not authorized for distribution to prospective investors in the
Phoenix Investment Trust 97 unless preceded or accompanied by an effective
prospectus which includes information concerning the sales charge, each Fund's
record and other pertinent information.
A MESSAGE FROM THE PRESIDENT
DEAR PHOENIXFUNDS SHAREHOLDER:
We are pleased to provide this report for the six months ended February
28, 2007. It includes valuable information about your Phoenix mutual
fund(s)--such as performance- and fee-related data and information about each
fund's portfolio holdings and transactions for the reporting period.
At Phoenix, we strive to provide investors with CHOICE. Our multi-manager
approach provides individual investors with access to a variety of investment
managers, including some they might otherwise not have access to--managers who
are usually available only to larger institutional investors. I am pleased that
our fund family, PhoenixFunds, can offer you the ability to invest in funds
managed by more than a dozen different management teams, including both Phoenix
affiliates and outside sub-advisers.
We also make diversification easy, with a wide array of investment
options--including numerous equity, fixed income and money market funds. For
those looking to simplify the investment selection process, we offer Phoenix
PHOLIOsSM (Phoenix Lifecycle Investment Options). Each PHOLIO is a broadly
diversified portfolio of mutual funds that enables investors to gain exposure to
a variety of investment options (such as equity, international/global, balanced,
alternative and fixed income). Phoenix PHOLIOs were designed to help investors
stay on track over time, with a targeted asset allocation mix that is rebalanced
regularly.
Because we offer such an extensive selection of investment options, it's
important that you consult an experienced financial professional for help
reviewing or rebalancing your portfolio on a regular basis. This can be an
effective way to help ensure that your investments are aligned with your
financial objectives.
For more information on the mutual funds and PHOLIOs that we currently
offer, I invite you to visit our Web site, at PHOENIXFUNDS.COM.
As the new president and chief operating officer of Phoenix Investment
Partners, Ltd., I would like to thank you for incorporating PhoenixFunds into
your financial strategy. It's our privilege to serve you.
Sincerely yours,
/s/ George R. Aylward
George R. Aylward
President, PhoenixFunds
MARCH 2007
1
TABLE OF CONTENTS
Glossary ......................................................................... 3
Phoenix Quality Small-Cap Fund ................................................... 4
Phoenix Small-Cap Sustainable Growth Fund ........................................ 11
Phoenix Small-Cap Value Fund ..................................................... 18
Phoenix Value Equity Fund ........................................................ 29
Notes to Financial Statements .................................................... 37
Board of Trustees' Consideration of Investment Advisory and Subadvisory Agreements 42
Results of Shareholder Meeting ................................................... 46
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PROXY VOTING INFORMATION (FORM N-PX)
The Adviser and subadvisers vote 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, 2006, 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.
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.
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2
GLOSSARY
REIT (REAL ESTATE INVESTMENT TRUST)
A publicly traded company that owns, develops and operates income-producing real
estate such as apartments, office buildings, hotels, shopping centers and other
commercial properties.
3
PHOENIX QUALITY SMALL-CAP FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
(FOR THE SIX-MONTH PERIOD OF AUGUST 31, 2006 TO FEBRUARY 28, 2007)
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
Quality Small-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 C shares, if applicable; and (2) ongoing costs, including
investment advisory fees; distribution and service fees; and other expenses.
Class I 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 would 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
Quality Small-Cap Fund Account Value Account Value During
Class I August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,158.40 $6.26
Hypothetical (5% return
before expenses) 1,000.00 1,018.92 5.87
*EXPENSES ARE EQUAL TO THE FUND'S CLASS I ANNUALIZED EXPENSE RATIO OF 1.17%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Quality Small-Cap Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,157.10 $7.54
Hypothetical (5% return
before expenses) 1,000.00 1,017.72 7.08
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.41%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Quality Small-Cap Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,153.20 $11.59
Hypothetical (5% return
before expenses) 1,000.00 1,013.90 10.89
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.17%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED 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.
4
Phoenix Quality Small-Cap Fund
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Sector Weightings (Unaudited) 2/28/07
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As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Financials 25%
Industrials 22
Consumer Discretionary 12
Information Technology 11
Energy 9
Health Care 5
Consumer Staples 3
Other 13
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
SHARES VALUE
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DOMESTIC COMMON STOCKS--92.0%
APPAREL, ACCESSORIES & LUXURY GOODS--4.0%
Cherokee, Inc. .............................. 4,830 $ 211,554
ASSET MANAGEMENT & CUSTODY BANKS--7.0%
Ares Capital Corp. .......................... 5,900 119,298
MCG Capital Corp. ........................... 13,505 255,920
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375,218
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COMMUNICATIONS EQUIPMENT--4.4%
Inter-Tel, Inc. ............................. 10,082 233,297
DATA PROCESSING & OUTSOURCED SERVICES--4.6%
Syntel, Inc. ................................ 6,820 244,702
DIVERSIFIED COMMERCIAL & PROFESSIONAL SERVICES--4.4%
McGrath RentCorp ............................ 7,975 237,416
ENVIRONMENTAL & FACILITIES SERVICES--4.8%
ABM Industries, Inc. ........................ 9,670 254,418
HEALTH CARE EQUIPMENT--1.5%
Young Innovations, Inc. ..................... 3,140 80,196
HEALTH CARE SERVICES--3.4%
Landauer, Inc. .............................. 3,585 182,368
HOME FURNISHINGS--4.6%
Tempur-Pedic International, Inc. ............ 9,915 246,784
SHARES VALUE
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INDUSTRIAL MACHINERY--9.2%
CLARCOR, Inc. ............................... 7,885 $ 244,356
Lincoln Electric Holdings, Inc. ............. 3,965 247,416
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491,772
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INSURANCE BROKERS--4.5%
National Financial Partners Corp. ........... 5,225 241,186
INTERNET SOFTWARE & SERVICES--2.1%
Computer Services, Inc. ..................... 3,875 113,537
OIL & GAS REFINING & MARKETING--4.5%
World Fuel Services Corp. ................... 5,390 243,089
OIL & GAS STORAGE & TRANSPORTATION--4.5%
Crosstex Energy, Inc. ....................... 7,335 238,021
PERSONAL PRODUCTS--3.1%
Chattem, Inc.(b) ............................ 3,150 168,116
REGIONAL BANKS--4.7%
Cathay General Bancorp ...................... 7,345 249,216
SPECIALIZED CONSUMER SERVICES--4.4%
Matthews International Corp. Class A ........ 5,925 237,059
SPECIALIZED FINANCE--1.8%
Financial Federal Corp. ..................... 3,590 97,253
SPECIALIZED REITS--3.9%
Entertainment Properties Trust .............. 3,205 209,928
See Notes to Financial Statements
5
Phoenix Quality Small-Cap Fund
SHARES VALUE
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SPECIALTY CHEMICALS--2.1%
Balchem Corp. ............................... 7,415 $ 109,816
THRIFTS & MORTGAGE FINANCE--4.1%
Corus Bankshares, Inc. ...................... 11,690 216,966
TRUCKING--4.4%
Landstar System, Inc. ....................... 5,270 235,516
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $4,655,539) 4,917,428
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TOTAL LONG TERM INVESTMENTS--92.0%
(IDENTIFIED COST $4,655,539) 4,917,428
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PAR VALUE
(000)
---------
SHORT-TERM INVESTMENTS--12.2%
REPURCHASE AGREEMENTS--12.2%
State Street Bank and Trust Co. repurchase
agreement 1.50% dated 2/28/07,
due 3/1/07 repurchase price $652,023,
collateralized by U.S. Treasury Bond 11.75%,
11/15/14 market value $668,250 .............. $652 652,000
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TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $652,000) 652,000
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TOTAL INVESTMENTS--104.2%
(IDENTIFIED COST $5,307,539) 5,569,428(a)
Other assets and liabilities, net--(4.2)% (225,662)
----------
NET ASSETS--100.0% $5,343,766
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $347,665 and gross
depreciation of $85,855 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$5,307,618.
(b) Non-income producing.
See Notes to Financial Statements
6
Phoenix Quality Small-Cap Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $4,655,539) $4,917,428
Investments in repurchase agreements at value,
(Identified cost $652,000) 652,000
Cash 320
Receivables
Fund shares sold 172,001
Dividends and interest 4,319
Receivable from adviser 1,039
Prepaid expenses 27,555
Other assets 55
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Total assets 5,774,717
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LIABILITIES
Payables
Investment securities purchased 408,981
Distribution and service fees 322
Transfer agent fee 225
Administration fee 134
Trustee deferred compensation plan 55
Trustees' fee 6
Other accrued expenses 21,228
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Total liabilities 430,951
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NET ASSETS $5,343,766
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $5,051,556
Undistributed net investment income 873
Accumulated net realized gain 29,448
Net unrealized appreciation 261,889
----------
NET ASSETS $5,343,766
==========
CLASS I
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $4,611,251) 398,679
Net asset value and offering price per share $11.57
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $304,590) 26,342
Net asset value per share $11.56
Offering price per share $11.56/(1-5.75%) $12.27
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $427,925) 37,059
Net asset value and offering price per share $11.55
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 27,296
Interest 1,708
--------
Total investment income 29,004
--------
EXPENSES
Investment advisory fee 12,582
Service fees, Class A 253
Distribution and service fees, Class C 964
Administration fee 787
Transfer agent 742
Registration 26,346
Professional 13,656
Custodian 943
Printing 938
Trustees 198
Miscellaneous 45
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Total expenses 57,454
Less expenses reimbursed by investment adviser (39,862)
Custodian fees paid indirectly (72)
--------
Net expenses 17,520
--------
NET INVESTMENT INCOME (LOSS) 11,484
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 36,095
Net change in unrealized appreciation (depreciation)
on investments 252,205
--------
NET GAIN (LOSS) ON INVESTMENTS 288,300
--------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $299,784
========
See Notes to Financial Statements
7
Phoenix Quality Small-Cap Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended From Inception
February 28, 2007 June 28, 2006 to
(Unaudited) August 31, 2006
----------------- ----------------
FROM OPERATIONS
Net investment income (loss) $ 11,484 $ 4,248
Net realized gain (loss) 36,095 (1,016)
Net change in unrealized appreciation (depreciation) 252,205 9,684
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INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 299,784 12,916
---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class I (13,706) --
Net investment income, Class A (1,052) --
Net investment income, Class C (101) --
Net realized short-term gains, Class I (4,797) --
Net realized short-term gains, Class A (480) --
Net realized short-term gains, Class C (354) --
---------- ----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (20,490) --
---------- ----------
FROM SHARE TRANSACTIONS
CLASS I
Proceeds from sales of shares (297,401 and 106,382 shares, respectively) 3,356,367 1,057,881
Net asset value of shares issued from reinvestment of distributions
(1,447 and 0 shares, respectively) 16,217 --
Cost of shares repurchased (6,551 and 0 shares, respectively) (75,100) --
---------- ----------
Total 3,297,484 1,057,881
---------- ----------
CLASS A
Proceeds from sales of shares (16,242 and 10,000 shares, respectively) 183,523 100,000
Net asset value of shares issued from reinvestment of distributions
(100 and 0 shares, respectively) 1,116 --
Cost of shares repurchased (0 and 0 shares, respectively) -- --
---------- ----------
Total 184,639 100,000
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CLASS C
Proceeds from sales of shares (23,243 and 13,780 shares, respectively) 273,150 138,000
Net asset value of shares issued from reinvestment of distributions
(36 and 0 shares, respectively) 402 --
Cost of shares repurchased (0 and 0 shares, respectively) -- --
---------- ----------
Total 273,552 138,000
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INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 3,755,675 1,295,881
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS 4,034,969 1,308,797
NET ASSETS
Beginning of period 1,308,797 --
---------- ----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$873 AND $4,248, RESPECTIVELY) $5,343,766 $1,308,797
========== ==========
See Notes to Financial Statements
8
Phoenix Quality Small-Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS I
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $10.06 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.05 0.07
Net realized and unrealized gain (loss) 1.54 (0.01)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.59 0.06
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.06) --
Distributions from net realized gains (0.02) --
------ ------
TOTAL DISTRIBUTIONS (0.08)
------ ------
Change in net asset value 1.51 0.06
------ ------
NET ASSET VALUE, END OF PERIOD $11.57 $10.06
====== ======
Total return 15.84%(4) 0.60%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $4,611 $1,070
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.17%(3) 1.15%(3)
Gross operating expenses 4.01%(3) 21.32%(3)
Net investment income (loss) 0.90%(3) 3.85%(3)
Portfolio turnover 13%(4) 7%(4)
CLASS A
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $10.05 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.04 0.03
Net realized and unrealized gain (loss) 1.54 0.02
------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.58 0.05
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.05) --
Distributions from net realized gains (0.02) --
------ ------
TOTAL DISTRIBUTIONS (0.07)
------ ------
Change in net asset value 1.51 0.05
------ ------
NET ASSET VALUE, END OF PERIOD $11.56 $10.05
====== ======
Total return(2) 15.71%(4) 0.50%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 305 $ 101
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.41%(3) 1.40%(3)
Gross operating expenses 4.23%(3) 26.39%(3)
Net investment income (loss) 0.77%(3) 1.82%(3)
Portfolio turnover 13%(4) 7%(4)
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
See Notes to Financial Statements
9
Phoenix Quality Small-Cap Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $10.04 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) --(3) 0.02
Net realized and unrealized gain (loss) 1.54 0.02
------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.54 0.04
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.01) --
Distributions from net realized gains (0.02) --
------ ------
TOTAL DISTRIBUTIONS (0.03)
------ ------
Change in net asset value 1.51 0.04
------ ------
NET ASSET VALUE, END OF PERIOD $11.55 $10.04
====== ======
Total return(2) 15.32 %(5) 0.40%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 428 $ 138
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.17 %(4) 2.15%(4)
Gross operating expenses 5.10 %(4) 25.96%(4)
Net investment income (loss) (0.07)%(4) 1.38%(4)
Portfolio turnover 13 %(5) 7%(5)
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Amount is less than $0.01.
(4) Annualized.
(5) Not annualized.
See Notes to Financial Statements
10
PHOENIX SMALL-CAP SUSTAINABLE GROWTH FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
(FOR THE SIX-MONTH PERIOD OF AUGUST 31, 2006 TO FEBRUARY 28, 2007)
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-Cap Sustainable Growth Fund, you incur two types of costs: (1) transaction
costs, including sales charges on purchases of Class A shares and contingent
deferred sales charges on Class C shares, if applicable; and (2) ongoing costs,
including investment advisory fees; distribution and service fees; and other
expenses. Class I shares are sold without a sales charge and do not incur
distributions 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 would 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.
Small-Cap Beginning Ending Expenses Paid
Sustainable Growth Fund Account Value Account Value During
Class I August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,055.20 $5.96
Hypothetical (5% return
before expenses) 1,000.00 1,018.92 5.87
*EXPENSES ARE EQUAL TO THE FUND'S CLASS I ANNUALIZED EXPENSE RATIO OF 1.17%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Small-Cap Beginning Ending Expenses Paid
Sustainable Growth Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,053.10 $7.23
Hypothetical (5% return
before expenses) 1,000.00 1,017.67 7.13
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.42%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Small-Cap Beginning Ending Expenses Paid
Sustainable Growth Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,049.10 $10.97
Hypothetical (5% return
before expenses) 1,000.00 1,013.95 10.84
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.16%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED 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.
11
Phoenix Small-Cap Sustainable Growth Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 2/28/07
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Information Technology 28%
Consumer Discretionary 18
Health Care 12
Industrials 12
Financials 11
Energy 8
Other 11
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
SHARES VALUE
------- ----------
DOMESTIC COMMON STOCKS--96.4%
AEROSPACE & DEFENSE--0.7%
HEICO Corp. Class A ......................... 700 $ 22,379
AIR FREIGHT & LOGISTICS--4.6%
Pacer International, Inc. ................... 5,445 147,178
APPLICATION SOFTWARE--4.8%
FactSet Research Systems, Inc. .............. 2,530 153,976
CASINOS & GAMING--4.6%
Shuffle Master, Inc.(b) ..................... 6,940 147,614
CONSUMER FINANCE--4.1%
World Acceptance Corp.(b) ................... 3,200 131,200
EDUCATION SERVICES--5.8%
Bright Horizons Family Solutions, Inc.(b) ... 3,740 149,899
Strayer Education, Inc. ..................... 300 35,367
----------
185,266
----------
ELECTRICAL COMPONENTS & EQUIPMENT--3.8%
Franklin Electric Co., Inc. ................. 2,540 123,088
ELECTRONIC EQUIPMENT MANUFACTURERS--8.0%
Daktronics, Inc. ............................ 5,120 136,550
Measurement Specialties, Inc.(b) ............ 5,265 121,411
----------
257,961
----------
HEALTH CARE EQUIPMENT--4.8%
ABAXIS, Inc.(b) ............................. 6,810 155,336
SHARES VALUE
------- ----------
HEALTH CARE FACILITIES--4.0%
Odyssey HealthCare, Inc.(b) ................. 9,425 $ 127,992
HOMEFURNISHING RETAIL--4.6%
Aaron Rents, Inc. ........................... 5,395 147,607
IT CONSULTING & OTHER SERVICES--4.2%
SI International, Inc.(b) ................... 4,765 133,515
LIFE SCIENCES TOOLS & SERVICES--3.1%
Techne Corp.(b) ............................. 1,780 100,250
OIL & GAS EQUIPMENT & SERVICES--8.9%
CARBO Ceramics, Inc. ........................ 3,505 151,136
Tesco Corp.(b) .............................. 6,395 134,167
----------
285,303
----------
PHARMACEUTICALS--4.1%
KV Pharmaceutical Co. Class A(b) ............ 5,345 131,754
REGIONAL BANKS--4.2%
Wintrust Financial Corp. .................... 2,970 136,145
RESTAURANTS--4.6%
Cheesecake Factory, Inc. (The)(b) ........... 5,475 149,413
SEMICONDUCTOR EQUIPMENT--4.8%
Cabot Microelectronics Corp.(b) ............. 4,665 152,685
SEMICONDUCTORS--4.5%
Power Integrations, Inc.(b) ................. 5,590 144,502
TECHNOLOGY DISTRIBUTORS--4.1%
ScanSource, Inc.(b) ......................... 4,710 130,279
See Notes to Financial Statements
12
Phoenix Small-Cap Sustainable Growth Fund
SHARES VALUE
------- ----------
TRADING COMPANIES & DISTRIBUTORS--4.1%
NuCo2, Inc.(b) .............................. 5,355 $ 131,412
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $2,992,556) 3,094,855
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--96.4%
(IDENTIFIED COST $2,992,556) 3,094,855
- ----------------------------------------------------------------------------
PAR VALUE
(000)
---------
SHORT-TERM INVESTMENTS--10.7%
REPURCHASE AGREEMENTS--10.7%
State Street Bank and Trust Co. repurchase
agreement 1.50% dated 2/28/07,
due 3/1/07 repurchase price $342,014,
collateralized by U.S. Treasury Note 4%,
2/15/14 market value $349,200 ............... $342 342,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $342,000) 342,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--107.1%
(IDENTIFIED COST $3,334,556) 3,436,855(a)
Other assets and liabilities, net--(7.1)% (227,114)
----------
NET ASSETS--100.0% $3,209,741
==========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $181,322 and gross
depreciation of $79,023 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$3,334,556.
(b) Non-income producing.
See Notes to Financial Statements
13
Phoenix Small-Cap Sustainable Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
(UNAUDITED)
ASSETS
Investment securities at value,
(Identified cost $2,992,556) $3,094,855
Investments in repurchase agreements at value,
(Identified cost $342,000) 342,000
Cash 881
Receivables
Fund shares sold 180,000
Receivable from adviser 1,904
Dividends and interest 231
Prepaid expenses 27,549
Other assets 55
----------
Total assets 3,647,475
----------
LIABILITIES
Payables
Investment securities purchased 416,229
Administration fee 207
Transfer agent fee 170
Distribution and service fees 156
Trustee deferred compensation plan 55
Trustees' fee 4
Other accrued expenses 20,913
----------
Total liabilities 437,734
----------
NET ASSETS $3,209,741
==========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $3,104,246
Accumulated net investment loss (9,623)
Accumulated net realized gain 12,819
Net unrealized appreciation 102,299
----------
NET ASSETS $3,209,741
==========
CLASS I
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $2,846,596) 275,586
Net asset value and offering price per share $10.33
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $207,806) 20,146
Net asset value per share $10.32
Offering price per share $10.32/(1-5.75%) $10.95
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $155,339) 15,135
Net asset value and offering price per share $10.26
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 2,907
Interest 814
--------
Total investment income 3,721
--------
EXPENSES
Investment advisory fee 9,713
Service fees, Class A 187
Distribution and service fees, Class C 553
Administration fee 776
Transfer agent 629
Registration 26,346
Professional 13,653
Custodian 722
Printing 688
Trustees 182
Miscellaneous 38
--------
Total expenses 53,487
Less expenses reimbursed by investment adviser (39,782)
Custodian fees paid indirectly (361)
--------
Net expenses 13,344
--------
NET INVESTMENT INCOME (LOSS) (9,623)
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 15,339
Net change in unrealized appreciation (depreciation)
on investments 91,958
--------
NET GAIN (LOSS) ON INVESTMENTS 107,297
--------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 97,674
========
See Notes to Financial Statements
14
Phoenix Small-Cap Sustainable Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended From Inception
February 28, 2007 June 28, 2006 to
(Unaudited) August 31, 2006
----------------- ----------------
FROM OPERATIONS
Net investment income (loss) $ (9,623) $ (934)
Net realized gain (loss) 15,339 (2,520)
Net change in unrealized appreciation (depreciation) 91,958 10,341
---------- ----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 97,674 6,887
---------- ----------
FROM SHARE TRANSACTIONS
CLASS I
Proceeds from sales of shares (184,570 and 91,748 shares, respectively) 1,869,821 886,900
Cost of shares repurchased (730 and 2 shares, respectively) (7,640) (19)
---------- ----------
Total 1,862,181 886,881
---------- ----------
CLASS A
Proceeds from sales of shares (10,109 and 10,227 shares, respectively) 103,469 102,135
Cost of shares repurchased (190 and 0 shares, respectively) (1,975) --
---------- ----------
Total 101,494 102,135
---------- ----------
CLASS C
Proceeds from sales of shares (5,135 and 10,000 shares, respectively) 52,489 100,000
Cost of shares repurchased (0 and 0 shares, respectively) -- --
---------- ----------
Total 52,489 100,000
---------- ----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 2,016,164 1,089,016
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS 2,113,838 1,095,903
NET ASSETS
Beginning of period 1,095,903 --
---------- ----------
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS AND UNDISTRIBUTED
NET INVESTMENT INCOME OF ($9,623) AND $0, RESPECTIVELY) $3,209,741 $1,095,903
========== ==========
See Notes to Financial Statements
15
Phoenix Small-Cap Sustainable Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS I
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $ 9.79 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.04) (0.01)
Net realized and unrealized gain (loss) 0.58 (0.20)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.54 (0.21)
------ ------
Change in net asset value 0.54 (0.21)
------ ------
NET ASSET VALUE, END OF PERIOD $10.33 $ 9.79
====== ======
Total return 5.52 %(4) (2.10)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $2,847 $ 898
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.17 %(3) 1.15 %(3)
Gross operating expenses 4.85 %(3) 23.99 %(3)
Net investment income (loss) (0.82)%(3) (0.61)%(3)
Portfolio turnover 10 %(4) 4 %(4)
CLASS A
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $ 9.79 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.05) (0.01)
Net realized and unrealized gain (loss) 0.58 (0.20)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.53 (0.21)
------ ------
Change in net asset value 0.53 (0.21)
------ ------
NET ASSET VALUE, END OF PERIOD $10.32 $ 9.79
====== ======
Total return(2) 5.31 %(4) (2.10)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 208 $ 100
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.42 %(3) 1.40 %(3)
Gross operating expenses 5.11 %(3) 28.32 %(3)
Net investment income (loss) (1.07)%(3) (0.87)%(3)
Portfolio turnover 10 %(4) 4 %(4)
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
See Notes to Financial Statements
16
Phoenix Small-Cap Sustainable Growth Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
--------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
FEBRUARY 28, 2007 JUNE 28, 2006
(UNAUDITED) TO AUGUST 31, 2006
----------------- ------------------
Net asset value, beginning of period $ 9.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.09) (0.03)
Net realized and unrealized gain (loss) 0.58 (0.20)
------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.49 (0.23)
------ ------
Change in net asset value 0.49 (0.23)
------ ------
NET ASSET VALUE, END OF PERIOD $10.26 $ 9.77
====== ======
Total return(2) 4.91 %(4) (2.20)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $ 155 $ 98
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.16 %(3) 2.15 %(3)
Gross operating expenses 5.96 %(3) 29.09 %(3)
Net investment income (loss) (1.82)%(3) (1.61)%(3)
Portfolio turnover 10 %(4) 4 %(4)
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Annualized.
(4) Not annualized.
See Notes to Financial Statements
17
PHOENIX SMALL-CAP VALUE FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
(FOR THE SIX-MONTH PERIOD OF AUGUST 31, 2006 TO FEBRUARY 28, 2007)
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-Cap Value 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, if applicable; and (2) ongoing
costs, including investment advisory fees; distribution and service fees; and
other expenses. These examples are intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. These examples are based on an
investment of $1,000 invested at the beginning of the period and held for the
entire 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 would 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-Cap Value Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,080.40 $7.48
Hypothetical (5% return
before expenses) 1,000.00 1,017.51 7.28
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.45%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Small-Cap Value Fund Account Value Account Value During
Class B August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,076.60 $11.28
Hypothetical (5% return
before expenses) 1,000.00 1,013.80 10.99
*EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.19%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Small-Cap Value Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ---------------------- --------------- ----------------- -------------
Actual $1,000.00 $1,076.60 $11.33
Hypothetical (5% return
before expenses) 1,000.00 1,013.75 11.04
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.20%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED 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.
18
Phoenix Small-Cap Value Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 2/28/07
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Financials 21%
Consumer Discretionary 14
Information Technology 12
Industrials 11
Materials 6
Energy 5
Health Care 4
Other 27
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
SHARES VALUE
------- ------------
DOMESTIC COMMON STOCKS--97.8%
AEROSPACE & DEFENSE--1.6%
Armor Holdings, Inc.(b)(e) .................. 23,000 $ 1,464,870
Ducommun, Inc.(b) ........................... 7,300 186,734
K&F Industries Holdings, Inc.(b)(e) ......... 14,300 351,637
Teledyne Technologies, Inc.(b)(e) ........... 38,200 1,453,510
------------
3,456,751
------------
AIRLINES--1.7%
ExpressJet Holdings, Inc.(b)(e) ............. 184,000 1,330,320
Republic Airways Holdings, Inc.(b) .......... 79,000 1,565,780
SkyWest, Inc.(e) ............................ 35,200 899,360
------------
3,795,460
------------
ALTERNATIVE CARRIERS--0.5%
Premiere Global Services, Inc.(b) ........... 102,000 1,062,840
APPAREL RETAIL--1.0%
Men's Wearhouse, Inc. (The)(e) .............. 50,000 2,214,000
APPAREL, ACCESSORIES & LUXURY GOODS--2.0%
Hartmarx Corp.(b)(e) ........................ 27,500 181,775
Kellwood Co.(e) ............................. 15,200 479,256
Perry Ellis International, Inc.(b) .......... 40,050 1,223,527
Phillips-Van Heusen Corp. ................... 28,900 1,584,876
Warnaco Group, Inc. (The)(b) ................ 29,900 780,988
------------
4,250,422
------------
SHARES VALUE
------- ------------
APPLICATION SOFTWARE--2.0%
Hyperion Solutions Corp.(b)(e) .............. 34,200 $ 1,465,128
NetScout Systems, Inc.(b) ................... 3,700 31,931
Parametric Technology Corp.(b)(e) ........... 73,000 1,392,110
TIBCO Software, Inc.(b)(e) .................. 150,200 1,359,310
------------
4,248,479
------------
ASSET MANAGEMENT & CUSTODY BANKS--1.4%
ACA Capital Holdings, Inc.(b) ............... 11,800 177,118
Apollo Investment Corp.(e) .................. 62,300 1,412,964
MCG Capital Corp.(e) ........................ 73,800 1,398,510
Patriot Capital Funding, Inc. ............... 7,700 109,494
------------
3,098,086
------------
AUTO PARTS & EQUIPMENT--1.8%
Lear Corp. .................................. 37,800 1,395,576
Modine Manufacturing Co.(e) ................. 54,700 1,349,449
Standard Motor Products, Inc. ............... 59,000 907,420
Stoneridge, Inc.(b) ......................... 14,200 161,738
------------
3,814,183
------------
AUTOMOTIVE RETAIL--1.4%
Asbury Automotive Group, Inc. ............... 53,700 1,434,327
CSK Auto Corp.(b)(e) ........................ 89,600 1,549,184
------------
2,983,511
------------
BROADCASTING & CABLE TV--0.9%
Citadel Broadcasting Corp. .................. 58,600 596,548
Salem Communications Corp. Class A(e) ....... 2,800 33,516
See Notes to Financial Statements
19
Phoenix Small-Cap Value Fund
SHARES VALUE
------- ------------
BROADCASTING & CABLE TV--CONTINUED
Westwood One, Inc.(e) ....................... 209,100 $1,428,153
------------
2,058,217
------------
BUILDING PRODUCTS--0.9%
Builders FirstSource, Inc.(b) ............... 25,700 463,114
NCI Building Systems, Inc.(b)(e) ............ 25,200 1,407,168
------------
1,870,282
------------
CASINOS & GAMING--0.3%
Ameristar Casinos, Inc.(e) .................. 23,000 745,660
CATALOG RETAIL--0.6%
Systemax, Inc.(b)(e) ........................ 53,000 1,407,150
COAL & CONSUMABLE FUELS--0.9%
USEC, Inc.(b)(e) ............................ 143,500 2,034,830
COMMERCIAL PRINTING--2.0%
Consolidated Graphics, Inc.(b)(e) ........... 25,300 1,802,878
Ennis, Inc.(e) .............................. 65,100 1,679,580
M & F Worldwide Corp.(b)(e) ................. 21,000 813,750
------------
4,296,208
------------
COMMUNICATIONS EQUIPMENT--4.0%
Anaren, Inc.(b)(e) .......................... 2,800 46,676
Avocent Corp.(b) ............................ 4,500 143,235
Comtech Telecommunications Corp.(b)(e) ...... 38,600 1,325,910
Dycom Industries, Inc.(b)(e) ................ 61,300 1,532,500
Harris Corp.(e) ............................. 51,900 2,547,252
Inter-Tel, Inc. ............................. 8,000 185,120
Polycom, Inc.(b)(e) ......................... 42,600 1,358,940
UTStarcom, Inc.(b)(e) ....................... 172,600 1,594,824
------------
8,734,457
------------
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS--0.2%
Commercial Vehicle Group, Inc.(b)(e) ........ 22,800 442,092
CONSTRUCTION MATERIALS--0.7%
Headwaters, Inc.(b) ......................... 58,400 1,376,488
U.S. Concrete, Inc.(b) ...................... 27,700 242,098
------------
1,618,586
------------
CONSUMER ELECTRONICS--0.0%
Universal Electronics, Inc.(b) .............. 3,700 96,644
DISTRIBUTORS--0.6%
Building Materials Holding Corp. ............ 57,500 1,195,425
DIVERSIFIED BANKS--0.1%
Intervest Bancshares Corp.(b) ............... 6,900 193,821
SHARES VALUE
------- ------------
DIVERSIFIED COMMERCIAL & PROFESSIONAL SERVICES--0.4%
CRA International, Inc.(b) .................. 15,200 $ 787,208
DIVERSIFIED REITS--0.7%
Investors Real Estate Trust ................. 40,900 411,045
Spirit Finance Corp.(e) ..................... 91,100 1,177,012
------------
1,588,057
------------
DRUG RETAIL--0.7%
Longs Drug Stores Corp.(e) .................. 34,000 1,566,040
ELECTRIC UTILITIES--1.7%
ALLETE, Inc. ................................ 21,400 1,002,162
Cleco Corp. ................................. 47,800 1,252,360
Unisource Energy Corp. ...................... 40,100 1,520,191
------------
3,774,713
------------
ELECTRICAL COMPONENTS & EQUIPMENT--0.8%
Regal-Beloit Corp.(e) ....................... 8,300 375,492
Smith (A.O.) Corp.(e) ....................... 23,000 889,410
Superior Essex, Inc.(b)(e) .................. 11,700 372,177
------------
1,637,079
------------
ELECTRONIC EQUIPMENT MANUFACTURERS--1.4%
Newport Corp.(b) ............................ 49,900 891,214
Paxar Corp.(b) .............................. 33,300 766,899
Technitrol, Inc.(e) ......................... 65,700 1,444,743
------------
3,102,856
------------
ELECTRONIC MANUFACTURING SERVICES--1.5%
CTS Corp.(e) ................................ 22,000 298,100
Merix Corp.(b)(e) ........................... 70,000 627,900
TTM Technologies, Inc.(b)(e) ................ 118,000 1,338,120
Zygo Corp.(b)(e) ............................ 57,100 913,029
------------
3,177,149
------------
ENVIRONMENTAL & FACILITIES SERVICES--0.0%
Waste Industries USA, Inc. .................. 2,500 63,413
FOOD DISTRIBUTORS--0.9%
Performance Food Group Co.(b)(e) ............ 33,800 996,086
Spartan Stores, Inc. ........................ 38,000 896,420
------------
1,892,506
------------
FOOTWEAR--0.2%
Stride Rite Corp. (The)(e) .................. 32,900 531,335
GENERAL MERCHANDISE STORES--0.4%
Fred's, Inc.(e) ............................. 57,200 782,496
See Notes to Financial Statements
20
Phoenix Small-Cap Value Fund
SHARES VALUE
------- ------------
HEALTH CARE EQUIPMENT--1.4%
CONMED Corp.(b)(e) .......................... 25,000 $ 684,000
Greatbatch, Inc.(b)(e) ...................... 50,100 1,300,596
STERIS Corp.(e) ............................. 39,800 1,030,820
------------
3,015,416
------------
HEALTH CARE FACILITIES--0.7%
AmSurg Corp.(b) ............................. 28,000 645,400
Hanger Orthopedic Group, Inc.(b) ............ 30,000 350,100
LifePoint Hospitals, Inc.(b)(e) ............. 4,400 161,040
Medcath Corp.(b)(e) ......................... 12,900 374,358
------------
1,530,898
------------
HEALTH CARE SERVICES--0.6%
Gentiva Health Services, Inc.(b) ............ 13,100 258,594
Res-Care, Inc.(b) ........................... 53,100 946,242
------------
1,204,836
------------
HOME FURNISHINGS--0.7%
Hooker Furniture Corp.(e) ................... 3,900 73,515
Kimball International, Inc. Class B ......... 31,100 654,033
Sealy Corp. ................................. 47,400 817,650
------------
1,545,198
------------
HOMEBUILDING--0.3%
Avatar Holdings, Inc.(b)(e) ................. 8,900 641,334
HOMEFURNISHING RETAIL--0.7%
Rent-A-Center, Inc.(b)(e) ................... 54,300 1,537,776
HOTELS, RESORTS & CRUISE LINES--0.9%
Bluegreen Corp.(b)(e) ....................... 38,700 471,366
Interstate Hotels & Resorts, Inc.(b) ........ 164,500 1,118,600
Sunterra Corp.(b) ........................... 32,400 396,576
------------
1,986,542
------------
HOUSEWARES & SPECIALTIES--1.0%
American Greetings Corp. Class A(e) ......... 61,200 1,433,304
CSS Industries, Inc.(e) ..................... 19,600 673,848
------------
2,107,152
------------
HUMAN RESOURCES & EMPLOYMENT SERVICES--0.7%
Kelly Services, Inc. Class A(e) ............. 20,300 624,631
Kforce, Inc.(b)(e) .......................... 43,700 594,320
Spherion Corp.(b) ........................... 34,200 303,354
------------
1,522,305
------------
INDUSTRIAL MACHINERY--2.3%
Barnes Group, Inc.(e) ....................... 44,400 991,452
SHARES VALUE
------- ------------
INDUSTRIAL MACHINERY--CONTINUED
EnPro Industries, Inc.(b)(e) ................ 42,400 $ 1,610,776
Gardner Denver, Inc.(b)(e) .................. 50,000 1,693,500
Kadant, Inc.(b) ............................. 4,600 107,824
Lydall, Inc.(b)(e) .......................... 22,400 320,544
Tennant Co. ................................. 10,900 335,502
------------
5,059,598
------------
INTEGRATED TELECOMMUNICATION SERVICES--1.3%
Cincinnati Bell, Inc.(b)(e) ................. 292,000 1,334,440
CT Communications, Inc.(e) .................. 52,400 1,235,068
SureWest Communications ..................... 10,400 248,352
------------
2,817,860
------------
INTERNET RETAIL--0.7%
FTD Group, Inc.(b)(e) ....................... 77,400 1,498,464
INTERNET SOFTWARE & SERVICES--1.6%
Greenfield Online, Inc(b) ................... 22,200 331,002
InfoSpace, Inc.(b) .......................... 53,900 1,228,920
United Online, Inc.(e) ...................... 106,600 1,401,790
Vignette Corp.(b) ........................... 29,600 528,064
------------
3,489,776
------------
INVESTMENT BANKING & BROKERAGE--1.0%
Cowen Group, Inc.(b)(e) ..................... 39,600 785,664
Knight Capital Group, Inc. Class A(b)(e) .... 84,300 1,332,783
------------
2,118,447
------------
IT CONSULTING & OTHER SERVICES--1.4%
CIBER, Inc.(b)(e) ........................... 23,100 162,393
MPS Group, Inc.(b)(e) ....................... 108,300 1,550,856
Perot Systems Corp. Class A(b)(e) ........... 25,300 425,546
SYKES Enterprises, Inc.(b)(e) ............... 60,600 972,024
------------
3,110,819
------------
LEISURE PRODUCTS--0.5%
JAKKS Pacific, Inc.(b)(e) ................... 47,800 1,171,578
LIFE & HEALTH INSURANCE--0.3%
FBL Financial Group Inc., Class A(e) ........ 19,200 747,456
LIFE SCIENCES TOOLS & SERVICES--0.9%
PharmaNet Development Group, Inc.(b)(e) ..... 24,300 493,776
Varian, Inc.(b) ............................. 25,300 1,377,079
------------
1,870,855
------------
MANAGED HEALTH CARE--1.5%
AMERIGROUP Corp.(b) ......................... 47,000 1,554,760
HealthSpring, Inc.(b) ....................... 77,300 1,633,349
See Notes to Financial Statements
21
Phoenix Small-Cap Value Fund
SHARES VALUE
------- ------------
MANAGED HEALTH CARE--CONTINUED
Molina Healthcare, Inc.(b)(e) ............... 3,100 $ 96,596
------------
3,284,705
------------
MARINE--0.4%
Alexander & Baldwin, Inc.(e) ................ 16,900 835,198
METAL & GLASS CONTAINERS--1.3%
Greif, Inc. Class A ......................... 17,300 2,031,539
Silgan Holdings, Inc. ....................... 14,800 728,308
------------
2,759,847
------------
MORTGAGE REITS--4.2%
American Home Mortgage Investment Corp.(e) .. 44,600 1,219,810
Anworth Mortgage Asset Corp. ................ 128,300 1,140,587
Arbor Realty Trust, Inc. .................... 36,000 1,108,440
Capital Trust, Inc. Class A(e) .............. 33,600 1,545,600
Gramercy Capital Corp. ...................... 21,300 685,008
Impac Mortgage Holdings, Inc.(e) ............ 166,700 1,096,886
Newcastle Investment Corp. .................. 50,200 1,480,900
NorthStar Realty Finance Corp.(e) ........... 51,000 773,670
------------
9,050,901
------------
MULTI-LINE INSURANCE--0.6%
Horace Mann Educators Corp. ................. 66,700 1,350,008
MULTI-SECTOR HOLDINGS--0.1%
Compass Diversified Trust ................... 7,400 127,058
MULTI-UTILITIES--1.3%
Avista Corp. ................................ 57,200 1,338,480
PNM Resources, Inc. ......................... 46,000 1,405,760
------------
2,744,240
------------
OFFICE SERVICES & SUPPLIES--0.9%
Steelcase, Inc. Class A(e) .................. 58,600 1,138,012
United Stationers, Inc.(b)(e) ............... 14,900 819,500
------------
1,957,512
------------
OIL & GAS DRILLING--0.4%
Bronco Drilling Co, Inc.(b)(e) .............. 58,200 874,164
Union Drilling, Inc.(b)(e) .................. 5,200 63,128
------------
937,292
------------
OIL & GAS EQUIPMENT & SERVICES--2.2%
Basic Energy Service, Inc.(b) ............... 58,000 1,320,660
Oil States International, Inc.(b)(e) ........ 51,100 1,499,785
SEACOR Holdings, Inc.(b)(e) ................. 19,900 1,926,320
------------
4,746,765
------------
SHARES VALUE
------- ------------
OIL & GAS EXPLORATION & PRODUCTION--1.4%
Chesapeake Energy Corp.(e) .................. 71,900 $ 2,192,231
Swift Energy Co.(b) ......................... 22,000 854,480
------------
3,046,711
------------
OIL & GAS REFINING & MARKETING--1.1%
Tesoro Corp.(e) ............................. 26,000 2,369,640
OIL & GAS STORAGE & TRANSPORTATION--0.7%
OMI Corp.(e) ................................ 63,400 1,411,918
PACKAGED FOODS & MEATS--0.7%
Cal-Maine Foods, Inc. ....................... 16,900 217,672
Chiquita Brands International, Inc.(e) ...... 89,800 1,302,100
Diamond Foods, Inc .......................... 4,700 78,490
------------
1,598,262
------------
PAPER PACKAGING--1.0%
Rock-Tenn Co. Class A ....................... 70,000 2,272,900
PAPER PRODUCTS--0.3%
Buckeye Technologies, Inc.(b) ............... 42,000 534,240
Mercer International, Inc.(b)(e) ............ 12,500 156,750
------------
690,990
------------
PERSONAL PRODUCTS--0.6%
Arden (Elizabeth), Inc.(b)(e) ............... 55,200 1,202,256
PHARMACEUTICALS--1.3%
Bradley Pharmaceuticals, Inc.(b)(e) ......... 68,100 1,319,778
Sciele Pharma, Inc.(b)(e) ................... 66,100 1,520,300
------------
2,840,078
------------
PROPERTY & CASUALTY INSURANCE--4.1%
Amerisafe, Inc.(b) .......................... 11,700 216,216
Bristol West Holdings, Inc.(e) .............. 19,200 312,000
CNA Surety Corp.(b)(e) ...................... 13,600 268,464
Commerce Group, Inc. (The)(e) ............... 48,600 1,393,362
EMC Insurance Group, Inc.(e) ................ 22,900 624,254
First Mercury Financial Corp.(b)(e) ......... 20,400 460,836
Harleysville Group, Inc.(e) ................. 33,300 1,082,583
James River Group, Inc.(b)(e) ............... 4,700 132,822
Meadowbrook Insurance Group, Inc.(b)(e) ..... 102,300 1,077,219
Navigators Group, Inc. (The)(b) ............. 24,600 1,222,620
ProCentury Corp. ............................ 9,600 193,440
Safety Insurance Group, Inc.(e) ............. 2,800 118,916
SeaBright Insurance Holdings, Inc.(b)(e) .... 53,100 997,749
Selective Insurance Group, Inc. ............. 32,400 791,856
------------
8,892,337
------------
See Notes to Financial Statements
22
Phoenix Small-Cap Value Fund
SHARES VALUE
------- ------------
PUBLISHING--1.6%
Belo Corp. Class A(e) ....................... 61,500 $ 1,146,360
Journal Communications, Inc. Class A(e) ..... 40,800 543,456
Lee Enterprises, Inc.(e) .................... 47,000 1,497,420
ProQuest Co.(b)(e) .......................... 36,200 395,666
------------
3,582,902
------------
REGIONAL BANKS--4.9%
1st Source Corp.(e) ......................... 11,900 313,089
Bank of Granite Corp.(e) .................... 11,500 206,655
Columbia Bancorp ............................ 1,400 33,642
First BanCorp ............................... 144,400 1,724,136
First Community Bancshares, Inc. ............ 2,600 98,566
Great Southern Bancorp, Inc. ................ 2,400 70,008
Hanmi Financial Corp.(e) .................... 4,600 89,838
Heartland Financial USA, Inc.(e) ............ 2,800 72,548
Horizon Financial Corp. ..................... 1,400 30,702
Macatawa Bank Corp.(e) ...................... 2,900 54,404
Mercantile Bank Corp. ....................... 1,300 44,141
NBT Bancorp, Inc.(e) ........................ 15,500 347,665
Pacific Capital Bancorp(e) .................. 43,900 1,382,850
R-G Financial Corp. Class B ................. 101,000 550,450
Republic Bancorp, Inc. Class A(e) ........... 3,500 76,545
Santander BanCorp ........................... 1,800 34,488
Sterling Financial Corp. .................... 23,900 517,674
Taylor Capital Group, Inc. .................. 8,200 299,874
TCF Financial Corp.(e) ...................... 56,500 1,493,860
UCBH Holdings, Inc.(e) ...................... 79,100 1,507,646
United Community Banks, Inc.(e) ............. 7,200 235,224
Vineyard National Bancorp(e) ................ 15,700 383,865
W Holding Co., Inc. ......................... 177,600 948,384
Washington Trust Bancorp, Inc.(e) ........... 7,700 214,291
------------
10,730,545
------------
REINSURANCE--0.3%
IPC Holdings Ltd. ........................... 22,700 659,662
RESTAURANTS--0.5%
Jack in the Box, Inc.(b) .................... 13,600 929,424
O' Charley's, Inc.(b) ....................... 5,300 111,141
------------
1,040,565
------------
RETAIL REITS--0.2%
Kite Realty Group Trust(e) .................. 20,600 417,356
SEMICONDUCTOR EQUIPMENT--0.7%
MKS Instruments, Inc.(b) .................... 67,200 1,620,864
SEMICONDUCTORS--0.4%
AMIS Holdings, Inc.(b)(e) ................... 52,000 589,160
Pericom Semiconductor Corp.(b)(e) ........... 6,800 68,816
SHARES VALUE
------- ------------
SEMICONDUCTORS--CONTINUED
Standard Microsystems Corp.(b)(e) ........... 9,500 $ 271,415
------------
929,391
------------
SPECIALIZED CONSUMER SERVICES--0.9%
Regis Corp.(e) .............................. 34,200 1,439,136
Stewart Enterprises, Inc. Class A(e) ........ 52,200 412,902
------------
1,852,038
------------
SPECIALIZED FINANCE--0.6%
Asta Funding, Inc.(e) ....................... 11,300 373,804
Financial Federal Corp.(e) .................. 36,300 983,367
------------
1,357,171
------------
SPECIALIZED REITS--2.0%
Ashford Hospitality Trust, Inc. ............. 120,700 1,496,680
Highland Hospitality Corp.(e) ............... 103,100 1,691,871
Winston Hotels, Inc. ........................ 78,000 1,095,120
------------
4,283,671
------------
SPECIALTY CHEMICALS--1.1%
Fuller (H.B.) Co. ........................... 96,200 2,402,114
SPECIALTY STORES--0.4%
Books-A-Million, Inc.(e) .................... 56,400 900,144
STEEL--2.3%
Metal Management, Inc. ...................... 41,700 1,669,668
NN, Inc. .................................... 5,200 61,516
Quanex Corp.(e) ............................. 40,300 1,575,327
Steel Dynamics, Inc.(e) ..................... 44,400 1,675,656
------------
4,982,167
------------
SYSTEMS SOFTWARE--0.8%
Sybase, Inc.(b)(e) .......................... 70,000 1,749,300
TECHNOLOGY DISTRIBUTORS--1.2%
Agilysys, Inc. .............................. 24,000 504,000
Anixter International, Inc.(b)(e) ........... 24,800 1,537,600
Insight Enterprises, Inc.(b) ................ 15,900 307,188
PC Connection, Inc.(b)(e) ................... 18,600 306,528
------------
2,655,316
------------
THRIFTS & MORTGAGE FINANCE--3.9%
BankUnited Financial Corp. Class A(e) ....... 55,900 1,365,078
Corus Bankshares, Inc.(e) ................... 70,300 1,304,768
Delta Financial Corp.(e) .................... 66,100 625,306
Downey Financial Corp.(e) ................... 22,700 1,487,758
First Financial Holdings, Inc.(e) ........... 4,400 152,460
FirstFed Financial Corp.(b)(e) .............. 29,700 1,698,840
See Notes to Financial Statements
23
Phoenix Small-Cap Value Fund
SHARES VALUE
------- ------------
THRIFTS & MORTGAGE FINANCE--CONTINUED
Franklin Bank Corp.(b) ...................... 8,900 $ 164,205
ITLA Capital Corp. .......................... 10,300 531,686
Ocwen Financial Corp.(b)(e) ................. 24,200 281,446
TierOne Corp. ............................... 31,200 867,048
------------
8,478,595
------------
TOBACCO--0.2%
Alliance One International, Inc. Class I(b) . 52,000 437,320
TRADING COMPANIES & DISTRIBUTORS--0.5%
Kaman Corp. ................................. 5,700 130,017
Rush Enterprises, Inc. Class A(b) ........... 51,300 952,641
------------
1,082,658
------------
TRUCKING--0.8%
Avis Budget Group, Inc.(e) .................. 30,000 797,700
U.S. Xpress Enterprises, Inc. Class A(b)(e) . 46,500 896,985
------------
1,694,685
------------
WIRELESS TELECOMMUNICATION SERVICES--0.1%
USA Mobility, Inc.(e) ....................... 11,100 215,118
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $188,721,337) 212,686,466
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--1.0%
PROPERTY & CASUALTY INSURANCE--0.3%
United America Indemnity Ltd. Class A
(United States)(b) .......................... 28,500 673,170
REINSURANCE--0.7%
Arch Capital Group Ltd. (United States)(b) .. 23,000 1,483,270
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $1,518,991) 2,156,440
- ----------------------------------------------------------------------------
SHARES VALUE
------- ------------
DOMESTIC WARRANTS--0.0%
OTHER DIVERSIFIED FINANCIAL SERVICES--0.0%
Imperial Credit Industries, Inc. Strike
Price $2.15, Exp. 1/31/08(b)(d) ............. 2,429 $ 0
- ----------------------------------------------------------------------------
TOTAL DOMESTIC WARRANTS
(IDENTIFIED COST $0) 0
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--98.8%
(IDENTIFIED COST $190,240,328) 214,842,906
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--24.6%
MONEY MARKET MUTUAL FUNDS--23.6%
State Street Navigator Prime Plus
(4.80% seven day effective yield)(f) ........ 51,188,721 51,188,721
PAR VALUE
(000)
---------
COMMERCIAL PAPER(g)--1.0%
Clipper Receivables Co. LLC 5.33%, 3/1/07 ... $2,185 2,185,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $53,373,721) 53,373,721
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--123.4%
(IDENTIFIED COST $243,614,049) 268,216,627(a)
Other assets and liabilities, net--(23.4)% (50,814,448)
------------
NET ASSETS--100.0% $217,402,179
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $29,897,535 and gross
depreciation of $6,091,746 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$244,410,838.
(b) Non-income producing.
(c) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically, is determined
based on criteria described in Note 2G "Foreign security country
determination" in the Notes to Financial Statements.
(d) Illiquid. Security valued at fair value as determined in good faith by or
under the direction of the Trustees. At February 28, 2007, this security
amounted to a value of $0 or 0% of net assets.
(e) All or a portion of security is on loan.
(f) Represents security purchased with cash collateral received for securities
on loan.
(g) The rate shown is the discount rate.
See Notes to Financial Statements
24
Phoenix Small-Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
(UNAUDITED)
ASSETS
Investment securities at value,
including $49,948,119 of securities on loan
(Identified cost $243,614,049) $268,216,627
Cash 1,516
Receivables
Investment securities sold 11,028,706
Dividends 125,934
Fund shares sold 91,764
Prepaid expenses 33,163
Other assets 44,051
------------
Total assets 279,541,761
------------
LIABILITIES
Payables
Investment securities purchased 10,038,508
Fund shares repurchased 478,347
Upon return of securities loaned 51,188,721
Investment advisory fee 125,727
Distribution and service fees 94,168
Transfer agent fee 71,391
Trustee deferred compensation plan 44,051
Administration fee 31,081
Trustees' fee 210
Other accrued expenses 67,378
------------
Total liabilities 62,139,582
------------
NET ASSETS $217,402,179
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $168,683,223
Accumulated net investment loss (371,849)
Accumulated net realized gain 24,488,227
Net unrealized appreciation 24,602,578
------------
NET ASSETS $217,402,179
============
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $132,219,520) 7,860,720
Net asset value per share $16.82
Offering price per share $16.82/(1-5.75%) $17.85
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $26,614,864) 1,742,988
Net asset value and offering price per share $15.27
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $58,567,795) 3,835,744
Net asset value and offering price per share $15.27
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 1,431,747
Security lending 106,596
Interest 63,134
Foreign taxes withheld (2,597)
------------
Total investment income 1,598,880
------------
EXPENSES
Investment advisory fee 1,017,092
Service fees, Class A 169,974
Distribution and service fees, Class B 145,419
Distribution and service fees, Class C 304,788
Administration fee 86,129
Transfer agent 203,074
Printing 84,588
Custodian 23,881
Registration 22,646
Professional 19,383
Trustees 10,793
Miscellaneous 14,933
------------
Total expenses 2,102,700
Less expenses reimbursed by investment adviser (130,971)
Custodian fees paid indirectly (1,000)
------------
Net expenses 1,970,729
------------
NET INVESTMENT INCOME (LOSS) (371,849)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 28,970,990
Net change in unrealized appreciation (depreciation)
on investments (11,044,628)
------------
NET GAIN (LOSS) ON INVESTMENTS 17,926,362
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 17,554,513
============
See Notes to Financial Statements
25
Phoenix Small-Cap Value Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
February 28, 2007 Year Ended
(Unaudited) August 31, 2006
----------------- ----------------
FROM OPERATIONS
Net investment income (loss) $ (371,849) $ (1,489,163)
Net realized gain (loss) 28,970,990 41,254,936
Net change in unrealized appreciation (depreciation) (11,044,628) (27,051,697)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,554,513 12,714,076
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net realized short-term gains, Class A (3,132,486) (359,993)
Net realized short-term gains, Class B (713,268) (104,808)
Net realized short-term gains, Class C (1,512,245) (179,271)
Net realized long-term gains, Class A (18,655,557) (13,870,660)
Net realized long-term gains, Class B (4,247,838) (4,044,831)
Net realized long-term gains, Class C (9,006,258) (6,913,765)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (37,267,652) (25,473,328)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (229,354 and 729,714 shares, respectively) 4,149,572 13,949,274
Net asset value of shares issued from reinvestment of
distributions (1,174,491 and 729,358 shares, respectively) 19,860,670 12,953,387
Cost of shares repurchased (883,102 and 1,685,103 shares, respectively) (16,116,998) (31,925,844)
------------ ------------
Total 7,893,244 (5,023,183)
------------ ------------
CLASS B
Proceeds from sales of shares (53,844 and 102,263 shares, respectively) 867,869 1,787,328
Net asset value of shares issued from reinvestment of
distributions (266,215 and 201,216 shares, respectively) 4,094,368 3,323,848
Cost of shares repurchased (367,284 and 817,203 shares, respectively) (6,222,102) (14,486,211)
------------ ------------
Total (1,259,865) (9,375,035)
------------ ------------
CLASS C
Proceeds from sales of shares (90,312 and 125,986 shares, respectively) 1,416,708 2,183,523
Net asset value of shares issued from reinvestment of
distributions (572,898 and 357,395 shares, respectively) 8,811,167 5,904,168
Cost of shares repurchased (451,582 and 689,686 shares, respectively) (7,627,004) (12,219,361)
------------ ------------
Total 2,600,871 (4,131,670)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 9,234,250 (18,529,888)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (10,478,889) (31,289,140)
NET ASSETS
Beginning of period 227,881,068 259,170,208
------------ ------------
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS AND UNDISTRIBUTED
NET INVESTMENT INCOME OF $(371,849) AND $0, RESPECTIVELY) $217,402,179 $227,881,068
============ ============
See Notes to Financial Statements
26
Phoenix Small-Cap Value Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 -------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $18.45 $19.45 $15.08 $13.42 $11.30 $12.72
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) --(3) (0.05) (0.03) (0.06) --(3) (0.01)
Net realized and unrealized gain (loss) 1.50 1.01 4.40 1.72 2.12 (1.39)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.50 0.96 4.37 1.66 2.12 (1.40)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
Change in net asset value (1.63) (1.00) 4.37 1.66 2.12 (1.42)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $16.82 $18.45 $19.45 $15.08 $13.42 $11.30
====== ====== ====== ====== ====== ======
Total return(2) 8.04 %(4) 5.32 % 28.98 % 12.37 % 18.76% (11.02)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $132,220 $135,436 $147,132 $124,165 $76,783 $83,005
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.45 %(5) 1.40 % 1.40 % 1.40 % 1.40% 1.40 %
Gross operating expenses 1.56 %(5) 1.50 % 1.56 % 1.57 % 1.71% 1.64 %
Net investment income (loss) (0.03)%(5) (0.28)% (0.17)% (0.38)% 0.04% (0.11)%
Portfolio turnover 82 %(4) 121 % 102 % 150 % 241% 123 %
CLASS B
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 -------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $17.07 $18.26 $14.27 $12.79 $10.85 $12.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.06) (0.18) (0.15) (0.16) (0.08) (0.10)
Net realized and unrealized gain (loss) 1.39 0.95 4.14 1.64 2.02 (1.34)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.33 0.77 3.99 1.48 1.94 (1.44)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
Change in net asset value (1.80) (1.19) 3.99 1.48 1.94 (1.46)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.27 $17.07 $18.26 $14.27 $12.79 $10.85
====== ====== ====== ====== ====== ======
Total return(2) 7.66 %(4) 4.57 % 27.96 % 11.57 % 17.88 % (11.72)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $26,615 $30,567 $42,081 $43,801 $40,696 $40,382
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.19 %(5) 2.15 % 2.15 % 2.15 % 2.15 % 2.15 %
Gross operating expenses 2.31 %(5) 2.25 % 2.31 % 2.33 % 2.46 % 2.39 %
Net investment income (loss) (0.78)%(5) (1.04)% (0.91)% (1.15)% (0.71)% (0.86)%
Portfolio turnover 82 %(4) 121 % 102 % 150 % 241 % 123 %
<FN>
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Amount is less than $0.01.
(4) Not annualized.
(5) Annualized.
</FN>
See Notes to Financial Statements
27
Phoenix Small-Cap Value Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 -------------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $17.07 $18.26 $14.27 $12.79 $10.85 $12.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.07) (0.18) (0.15) (0.16) (0.08) (0.10)
Net realized and unrealized gain (loss) 1.40 0.95 4.14 1.64 2.02 (1.34)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.33 0.77 3.99 1.48 1.94 (1.44)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Distributions from net realized gains (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (3.13) (1.96) -- -- -- (0.02)
------ ------ ------ ------ ------ ------
Change in net asset value (1.80) (1.19) 3.99 1.48 1.94 (1.46)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.27 $17.07 $18.26 $14.27 $12.79 $10.85
====== ====== ====== ====== ====== ======
Total return(2) 7.66 %(3) 4.57 % 27.96 % 11.57 % 17.88 % (11.72)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $58,568 $61,878 $69,957 $71,296 $51,559 $49,201
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.20 %(4) 2.15 % 2.15 % 2.15 % 2.15 % 2.15 %
Gross operating expenses 2.31 %(4) 2.25 % 2.31 % 2.32 % 2.46 % 2.39 %
Net investment income (loss) (0.78)%(4) (1.03)% (0.91)% (1.14)% (0.72)% (0.86)%
Portfolio turnover 82 %(3) 121 % 102 % 150 % 241 % 123 %
<FN>
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Not annualized.
(4) Annualized.
</FN>
See Notes to Financial Statements
28
PHOENIX VALUE EQUITY FUND
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
(FOR THE SIX-MONTH PERIOD OF AUGUST 31, 2006 TO FEBRUARY 28, 2007)
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
Value Equity 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, if applicable; and (2) ongoing
costs, including investment advisory fees; distribution and service fees; and
other expenses. These examples are intended to help you understand your ongoing
costs (in dollars) of investing in the Fund and to compare these costs with the
ongoing costs of investing in other mutual funds. These examples are based on an
investment of $1,000 invested at the beginning of the period and held for the
entire 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 would 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
Value Equity Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,083.60 $7.18
Hypothetical (5% return
before expenses) 1,000.00 1,017.82 6.98
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.39%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Value Equity Fund Account Value Account Value During
Class B August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,079.80 $11.04
Hypothetical (5% return
before expenses) 1,000.00 1,014.05 10.74
*EXPENSES ARE EQUAL TO THE FUND'S CLASS B ANNUALIZED EXPENSE RATIO OF 2.14%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED
BY 365 TO REFLECT THE ONE-HALF YEAR PERIOD.
Beginning Ending Expenses Paid
Value Equity Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,079.80 $11.04
Hypothetical (5% return
before expenses) 1,000.00 1,014.05 10.74
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.14%,
WHICH IS NET OF WAIVED FEES AND REIMBURSED EXPENSES, IF APPLICABLE, MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS
(181) EXPENSES WERE ACCRUED 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.
29
Phoenix Value Equity Fund
- --------------------------------------------------------------------------------
Sector Weightings (Unaudited) 2/28/07
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Financials 37%
Energy 16
Health Care 11
Materials 8
Telecommunications Services 6
Information Technology 5
Consumer Discretionary 5
Other 12
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
(UNAUDITED)
SHARES VALUE
-------- -----------
DOMESTIC COMMON STOCKS--97.1%
AEROSPACE & DEFENSE--0.6%
Northrop Grumman Corp. ...................... 3,900 $ 280,215
AIRLINES--1.1%
Continental Airlines, Inc. Class B(b) ....... 12,200 483,120
BROADCASTING & CABLE TV--3.3%
DIRECTV Group, Inc. (The)(b) ................ 67,200 1,516,032
BUILDING PRODUCTS--0.2%
PW Eagle, Inc. .............................. 2,300 76,406
COMMODITY CHEMICALS--3.2%
Lyondell Chemical Co. ....................... 45,200 1,440,072
COMPUTER HARDWARE--3.5%
Hewlett-Packard Co. ......................... 15,000 590,700
International Business Machines Corp. ....... 10,800 1,004,508
-----------
1,595,208
-----------
COMPUTER STORAGE & PERIPHERALS--1.2%
Lexmark International, Inc. Class A(b) ...... 8,700 526,873
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS--2.5%
Cummins, Inc. ............................... 7,400 996,632
FreightCar America, Inc. .................... 2,900 143,666
-----------
1,140,298
-----------
DEPARTMENT STORES--0.1%
Dillard's, Inc. Class A ..................... 1,900 63,460
SHARES VALUE
-------- -----------
DIVERSIFIED CHEMICALS--0.9%
Ashland, Inc. ............................... 5,900 $ 386,922
ELECTRIC UTILITIES--3.8%
FirstEnergy Corp. ........................... 27,500 1,720,675
GENERAL MERCHANDISE STORES--0.4%
Big Lots, Inc.(b) ........................... 6,600 165,198
HEALTH CARE DISTRIBUTORS--3.8%
AmerisourceBergen Corp. ..................... 32,700 1,722,309
INTEGRATED OIL & GAS--13.4%
ConocoPhillips .............................. 32,800 2,145,776
Exxon Mobil Corp. ........................... 53,000 3,799,040
Marathon Oil Corp. .......................... 1,700 154,258
-----------
6,099,074
-----------
INTEGRATED TELECOMMUNICATION SERVICES--5.7%
Embarq Corp. ................................ 18,400 1,018,440
Qwest Communications International, Inc.(b) . 177,600 1,577,088
-----------
2,595,528
-----------
INVESTMENT BANKING & BROKERAGE--6.4%
Goldman Sachs Group, Inc. (The) ............. 2,300 463,680
Lehman Brothers Holdings, Inc. .............. 5,800 425,140
Morgan Stanley .............................. 27,000 2,022,840
-----------
2,911,660
-----------
LEISURE PRODUCTS--0.7%
Marvel Entertainment, Inc.(b) ............... 10,900 302,911
See Notes to Financial Statements
30
Phoenix Value Equity Fund
SHARES VALUE
-------- -----------
LIFE & HEALTH INSURANCE--3.8%
MetLife, Inc. ............................... 24,200 $1,528,230
Nationwide Financial Services, Inc. Class A . 4,100 219,760
-----------
1,747,990
-----------
MANAGED HEALTH CARE--0.1%
CIGNA Corp. ................................. 400 57,000
MULTI-LINE INSURANCE--8.4%
Assurant, Inc. .............................. 10,800 577,260
Genworth Financial, Inc. Class A ............ 41,800 1,478,466
Hartford Financial Services Group, Inc. (The) 18,400 1,739,904
-----------
3,795,630
-----------
OIL & GAS EQUIPMENT & SERVICES--1.0%
Tidewater, Inc. ............................. 8,900 462,533
OIL & GAS EXPLORATION & PRODUCTION--0.7%
Devon Energy Corp. .......................... 4,900 321,979
OIL & GAS REFINING & MARKETING--1.2%
Tesoro Corp. ................................ 6,200 565,068
OTHER DIVERSIFIED FINANCIAL SERVICES--2.7%
JPMorgan Chase & Co. ........................ 24,700 1,220,180
PACKAGED FOODS & MEATS--0.2%
Chiquita Brands International, Inc. ......... 3,300 47,850
Imperial Sugar Co. .......................... 1,700 52,479
-----------
100,329
-----------
PHARMACEUTICALS--7.2%
Abbott Laboratories ......................... 400 21,848
King Pharmaceuticals, Inc.(b) ............... 64,828 1,209,042
Pfizer, Inc. ................................ 82,200 2,051,712
-----------
3,282,602
-----------
PROPERTY & CASUALTY INSURANCE--9.1%
Axis Capital Holdings Ltd. .................. 4,110 138,959
Berkley (W.R.) Corp. ........................ 8,400 273,840
Chubb Corp. (The) ........................... 33,600 1,715,280
CNA Financial Corp.(b) ...................... 3,500 143,710
Travelers Cos., Inc. (The) .................. 36,892 1,872,638
-----------
4,144,427
-----------
REGIONAL BANKS--4.3%
KeyCorp ..................................... 8,300 313,242
SunTrust Banks, Inc. ........................ 19,200 1,618,752
-----------
1,931,994
-----------
SHARES VALUE
-------- -----------
RESTAURANTS--0.2%
McDonald's Corp. ............................ 1,600 $ 69,952
SEMICONDUCTORS--0.1%
Atmel Corp.(b) .............................. 10,300 57,062
SOFT DRINKS--2.3%
PepsiCo, Inc. ............................... 16,300 1,029,345
STEEL--3.5%
Chaparral Steel Co. ......................... 2,900 144,507
Nucor Corp. ................................. 24,100 1,466,967
-----------
1,611,474
-----------
TOBACCO--1.5%
Loews Corp. - Carolina Group ................ 9,200 662,676
- ----------------------------------------------------------------------------
TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $39,092,142) 44,086,202
- ----------------------------------------------------------------------------
FOREIGN COMMON STOCKS(c)--2.1%
PROPERTY & CASUALTY INSURANCE--1.2%
ACE Ltd. (United States) .................... 8,135 456,862
United America Indemnity Ltd. Class A
(United States)(b) .......................... 3,400 80,308
-----------
537,170
-----------
REINSURANCE--0.9%
Arch Capital Group Ltd. (United States)(b) .. 4,664 300,781
PartnerRe Ltd. (United States) .............. 1,825 126,801
-----------
427,582
-----------
- ----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $960,624) 964,752
- ----------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--99.2%
(IDENTIFIED COST $40,052,766) 45,050,954
- ----------------------------------------------------------------------------
See Notes to Financial Statements
31
Phoenix Value Equity Fund
PAR VALUE
(000) VALUE
--------- -----------
SHORT-TERM INVESTMENTS--0.8%
COMMERCIAL PAPER(d)--0.8%
UBS Finance Delaware LLC 5.30%, 3/1/07 $355 $ 355,000
- ----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $355,000) 355,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(IDENTIFIED COST $40,407,766) 45,405,954(a)
OTHER ASSETS AND LIABILITIES, NET--0.0% 20,161
-----------
NET ASSETS--100.0% $45,426,115
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $5,440,534 and gross
depreciation of $485,271 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$40,450,691.
(b) Non-income producing.
(c) A security is considered to be foreign if the security is issued in a
foreign country. The country of risk, noted parenthetically, is determined
based on criteria described in Note 2G "Foreign security country
determination" in the Notes to Financial Statements.
(d) The rate shown is the discount rate.
See Notes to Financial Statements
32
Phoenix Value Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $40,407,766) $45,405,954
Cash 725
Receivables
Investment securities sold 672,139
Dividends 119,383
Fund shares sold 10,766
Prepaid expenses 21,154
Other assets 8,314
-----------
Total assets 46,238,435
-----------
LIABILITIES
Payables
Investment securities purchased 556,233
Fund shares repurchased 143,354
Investment advisory fee 28,845
Transfer agent fee 19,595
Distribution and service fees 19,522
Trustee deferred compensation plan 8,314
Administration fee 6,358
Trustees' fee 41
Other accrued expenses 30,058
-----------
Total liabilities 812,320
-----------
NET ASSETS $45,426,115
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 43,592,204
Undistributed net investment income 78,499
Accumulated net realized loss (3,242,776)
Net unrealized appreciation 4,998,188
-----------
NET ASSETS $45,426,115
===========
CLASS A
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $27,650,080) 1,683,055
Net asset value per share $16.43
Offering price per share $16.43/(1-5.75%) $17.43
CLASS B
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $8,677,760) 551,099
Net asset value and offering price per share $15.75
CLASS C
Shares of beneficial interest outstanding, no par value,
unlimited authorization (Net Assets $9,098,275) 577,389
Net asset value and offering price per share $15.76
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 465,252
Interest 8,083
----------
Total investment income 473,335
----------
EXPENSES
Investment advisory fee 171,824
Service fees, Class A 34,839
Distribution and service fees, Class B 44,113
Distribution and service fees, Class C 45,631
Administration fee 17,725
Transfer agent 53,667
Professional 16,909
Registration 15,594
Printing 8,878
Custodian 7,341
Trustees 3,156
Miscellaneous 2,900
----------
Total expenses 422,577
Less expenses reimbursed by investment adviser (36,128)
Custodian fees paid indirectly (10)
----------
Net expenses 386,439
----------
NET INVESTMENT INCOME (LOSS) 86,896
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 2,030,364
Net change in unrealized appreciation (depreciation)
on investments 1,537,577
----------
NET GAIN (LOSS) ON INVESTMENTS 3,567,941
----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $3,654,837
==========
See Notes to Financial Statements
33
Phoenix Value Equity Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
February 28, 2007 Year Ended
(Unaudited) August 31, 2006
----------------- ----------------
FROM OPERATIONS
Net investment income (loss) $ 86,896 $ 398,312
Net realized gain (loss) 2,030,364 9,248,277
Net change in unrealized appreciation (depreciation) 1,537,577 (3,719,010)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,654,837 5,927,579
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (305,149) (239,885)
Net investment income, Class B (46,415) (21,604)
Net investment income, Class C (47,803) (19,055)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (399,367) (280,544)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (126,932 and 425,199 shares, respectively) 2,055,379 6,198,379
Net asset value of shares issued from reinvestment of distributions
(17,767 and 16,173 shares, respectively) 293,685 224,475
Cost of shares repurchased (342,282 and 650,431 shares, respectively) (5,482,534) (9,344,863)
----------- -----------
Total (3,133,470) (2,922,009)
----------- -----------
CLASS B
Proceeds from sales of shares (41,584 and 65,334 shares, respectively) 642,738 904,211
Net asset value of shares issued from reinvestment of distributions
(2,750 and 1,292 shares, respectively) 43,638 17,247
Cost of shares repurchased (94,818 and 396,306 shares, respectively) (1,466,033) (5,432,355)
----------- -----------
Total (779,657) (4,510,897)
----------- -----------
CLASS C
Proceeds from sales of shares (10,359 and 40,114 shares, respectively) 161,571 570,512
Net asset value of shares issued from reinvestment of distributions
(2,656 and 1,150 shares, respectively) 42,180 15,351
Cost of shares repurchased (51,443 and 157,960 shares, respectively) (793,754) (2,189,002)
----------- -----------
Total (590,003) (1,603,139)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (4,503,130) (9,036,045)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (1,247,660) (3,389,010)
NET ASSETS
Beginning of period 46,673,775 50,062,785
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$78,499 AND $390,970, RESPECTIVELY) $45,426,115 $46,673,775
=========== ===========
See Notes to Financial Statements
34
Phoenix Value Equity Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 ----------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $15.33 $13.59 $12.05 $11.33 $10.64 $12.76
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.05 0.16 0.11 0.04 0.11 0.08
Net realized and unrealized gain (loss) 1.23 1.70 1.43 0.72 0.66 (1.97)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.28 1.86 1.54 0.76 0.77 (1.89)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.18) (0.12) -- (0.04) (0.08) (0.08)
Distributions from net realized gains -- -- -- -- -- (0.15)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.18) (0.12) -- (0.04) (0.08) (0.23)
------ ------ ------ ------ ------ ------
Change in net asset value (0.18) 1.74 1.54 0.72 0.69 (2.12)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $16.43 $15.33 $13.59 $12.05 $11.33 $10.64
====== ====== ====== ====== ====== ======
Total return(2) 8.36%(4) 13.79% 12.78% 6.71% 7.31% (14.97)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $27,650 $28,823 $28,407 $32,859 $37,310 $43,993
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.39%(5) 1.32%(3) 1.25% 1.25% 1.25% 1.25 %
Gross operating expenses 1.55%(5) 1.64% 1.71% 1.59% 1.63% 1.49 %
Net investment income (loss) 0.67%(5) 1.13% 0.84% 0.35% 1.06% 0.64 %
Portfolio turnover 60%(4) 214% 69% 200% 349% 166 %
CLASS B
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 ----------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $14.66 $13.01 $11.62 $10.99 $10.35 $12.42
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.01) 0.06 0.01 (0.05) 0.04 (0.01)
Net realized and unrealized gain (loss) 1.18 1.62 1.38 0.70 0.63 (1.91)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.17 1.68 1.39 0.65 0.67 (1.92)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.08) (0.03) -- (0.02) (0.03) --
Distributions from net realized gains -- -- -- -- -- (0.15)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.08) (0.03) -- (0.02) (0.03) (0.15)
------ ------ ------ ------ ------ ------
Change in net asset value 1.09 1.65 1.39 0.63 0.64 (2.07)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.75 $14.66 $13.01 $11.62 $10.99 $10.35
====== ====== ====== ====== ====== ======
Total return(2) 7.98 %(4) 12.91% 11.96% 5.95 % 6.44% (15.57)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $8,678 $8,818 $12,118 $13,247 $16,363 $28,873
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.14 %(5) 2.06%(3) 2.00% 2.00 % 2.00% 2.00 %
Gross operating expenses 2.30 %(5) 2.39% 2.46% 2.34 % 2.38% 2.24 %
Net investment income (loss) (0.08)%(5) 0.42% 0.09% (0.40)% 0.37% (0.11)%
Portfolio turnover 60 %(4) 214% 69% 200 % 349% 166 %
<FN>
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Represents a blended net operating expense ratio.
(4) Not annualized.
(5) Annualized.
</FN>
See Notes to Financial Statements
35
Phoenix Value Equity Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
-------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 2007 ----------------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
Net asset value, beginning of period $14.67 $13.02 $11.63 $11.00 $10.35 $12.43
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) (0.01) 0.05 0.01 (0.05) 0.03 (0.01)
Net realized and unrealized gain (loss) 1.18 1.63 1.38 0.70 0.65 (1.92)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.17 1.68 1.39 0.65 0.68 (1.93)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.08) (0.03) -- (0.02) (0.03) --
Distributions from net realized gains -- -- -- -- -- (0.15)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.08) (0.03) -- (0.02) (0.03) (0.15)
------ ------ ------ ------ ------ ------
Change in net asset value 1.09 1.65 1.39 0.63 0.65 (2.08)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.76 $14.67 $13.02 $11.63 $11.00 $10.35
====== ====== ====== ====== ====== ======
Total return(2) 7.98 %(4) 12.90% 11.95% 5.94 % 6.47% (15.56)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $9,098 $9,033 $9,538 $13,266 $15,408 $19,231
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.14 %(5) 2.07%(3) 2.00% 2.00 % 2.00% 2.00 %
Gross operating expenses 2.30 %(5) 2.39% 2.46% 2.34 % 2.38% 2.24 %
Net investment income (loss) (0.08)%(5) 0.39% 0.09% (0.40)% 0.31% (0.11)%
Portfolio turnover 60 %(4) 214% 69% 200 % 349% 166 %
<FN>
(1) Computed using average shares outstanding.
(2) Sales charges are not reflected in total return calculation.
(3) Represents a blended net operating expense ratio.
(4) Not annualized.
(5) Annualized.
</FN>
See Notes to Financial Statements
36
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED)
1. ORGANIZATION
Phoenix Investment Trust 97 (the "Trust") is organized as a Delaware
statutory trust and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company.
Currently, four Funds are offered for sale (each a "Fund"). The Phoenix
Quality Small-Cap Fund ("Quality Small-Cap Fund") is diversified and seeks long
term capital appreciation. The Phoenix Small-Cap Sustainable Growth Fund
("Small-Cap Sustainable Growth Fund") is diversified and seeks long-term capital
appreciation. The Phoenix Small-Cap Value Fund ("Small-Cap Value Fund") is
diversified and seeks long-term capital appreciation. The Phoenix Value Equity
Fund ("Value Equity Fund") is diversified and its primary investment objective
is to seek long-term capital appreciation and its secondary objective is to seek
current income.
The Funds offer the following classes of shares for sale:
Class I Class A Class B Class C
------- ------- ------- -------
Quality Small-Cap Fund .............. X X -- X
Small-Cap Sustainable Growth Fund ... X X -- X
Small-Cap Value Fund ................ -- X X X
Value Equity Fund ................... -- X X X
Class A shares are sold with a front-end sales charge of up to 5.75%.
Generally, Class A shares are not subject to any charges by the funds when
redeemed; however, a 1% contingent deferred sales charge may be imposed on
certain redemptions within one year on purchases on which a finder's fee has
been paid. 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. Class I shares are sold without a sales
charge.
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. Income and other expenses and realized and
unrealized gains and losses of each Fund are borne pro rata by the holders of
each class of shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount 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.
Short-term investments having a remaining maturity of 60 days or less are
valued at amortized cost, which approximates market.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("SFAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. Management is currently evaluating the impact the adoption of SFAS
157 will have on the Fund's financial statement disclosures.
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.
37
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
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
and to distribute substantially all of its taxable income to its shareholders.
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 it invests.
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This
standard defines the threshold for recognizing the benefits of tax-return
positions in the financial statements as "more-likely-than-not" to be sustained
by the taxing authority and requires measurement of a tax position meeting the
more-likely-than-not criterion, based on the largest benefit that is more than
50 percent likely to be realized. FIN 48 is effective as of the beginning of the
first fiscal year after December 15, 2006, with early application permitted if
no interim financial statements have been issued. At adoption, companies must
adjust their financial statements to reflect only those tax positions that are
more likely-than-not to be sustained as of the adoption date. The evaluation of
the impact that may result from adopting FIN 48 is in progress.
D. DISTRIBUTIONS TO SHAREHOLDERS:
Distributions are recorded by each Fund on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States of America. These differences may include the treatment of
non-taxable dividends, market premium and discount, non-deductible expenses,
expiring capital loss carryovers, foreign currency gain or loss, gain or loss on
futures contracts, partnerships, operating losses 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 either changes in exchange
rates or 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. SECURITIES LENDING:
Certain Funds may loan securities to qualified brokers through an agreement
with State Street Bank and Trust Company (the "Custodian"). Under the terms of
the agreement, the Funds receive collateral with a market value not less than
102% for domestic securities and 105% for foreign securities of the market value
of loaned securities. Collateral is adjusted daily in connection with changes in
the market value of securities on loan. Collateral may consist of cash,
securities issued or guaranteed by the U.S. Government or its agencies and the
sovereign debt of foreign countries. Cash collateral is invested in a short-term
money market fund. Dividends earned on the collateral and premiums paid by the
borrower are recorded as income by the Fund net of fees charged by the Custodian
for its services in connection with this securities lending program. Lending
portfolio securities involves a risk of delay in the recovery of the loaned
securities or in the foreclosure on collateral.
I. REIT INVESTMENTS:
Dividend income is recorded using management's estimate of the income
included in distributions received from the REIT investments. Distributions
received in excess of this estimated amount are recorded as a reduction of the
cost of investments or reclassified to capital gains. The actual amounts of
income, return of capital, and capital gains are only determined by each REIT
after its fiscal year-end, and may differ from the estimated amounts.
38
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
J. REPURCHASE AGREEMENTS:
A repurchase agreement is a transaction where a Fund acquires a security for
cash and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. Each Fund, through its custodian,
takes possession of securities collateralizing the repurchase agreement. The
collateral is marked-to-market daily to ensure that the market value of the
underlying assets remains sufficient to protect the Fund in the event of default
by the seller. If the seller defaults and the value of the collateral declines,
or if the seller enters insolvency proceedings, realization of collateral may be
delayed or limited.
3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Trust, the Adviser, Phoenix
Investment Counsel, Inc. ("PIC") (the "Adviser"), an indirect wholly-owned
subsidiary of The Phoenix Companies, Inc. ("PNX") is entitled to a fee based
upon the following annual rates as a percentage of the average daily net assets
of each Fund:
First $400 Million - $1 +
$400 Million $1 Billion Billion
------------ -------------- -------
Quality Small-Cap Fund ............. 0.90% 0.85% 0.80%
Small-Cap Sustainable Growth Fund .. 0.90% 0.85% 0.80%
First $1-2 $2 +
$1 Billion Billion Billion
---------- ------- -------
Small-Cap Value Fund ............... 0.90% 0.85% 0.80%
Value Equity Fund .................. 0.75% 0.70% 0.65%
The Adviser has contractually agreed to limit total fund operating expenses,
(excluding interest, taxes and extraordinary expenses), through December 31,
2007, so that such expenses do not exceed the following percentages of the
average annual net asset values for the Funds:
Class A Class C Class I
------- ------- -------
Quality Small-Cap Fund ............. 1.40% 2.15% 1.15%
Small-Cap Sustainable Growth Fund .. 1.40% 2.15% 1.15%
Class A Class B Class C
------- ------- -------
Small-Cap Value Fund ............... 1.40% 2.15% 2.15%
Value Equity Fund .................. 1.35% 2.10% 2.10%
The Adviser will not seek to recapture any reimbursed expenses under these
agreements, unless authorized by the Funds Board of Trustees.
Kayne Anderson Rudnick Investment Management, LLC ("Kayne") an indirect
wholly-owned subsidiary of PNX, is the subadviser to the Quality Small-Cap and
Small-Cap Sustainable Growth Funds.
Euclid Advisors LLC ("Euclid"), an indirect wholly-owned subsidiary of PNX,
is the subadviser to the Small-Cap Value Fund.
Acadian Asset Management, Inc. ("Acadian") is the subadviser to the Value
Equity Fund.
As distributor of each Fund's shares, Phoenix Equity Planning Corporation
("PEPCO") an indirect wholly-owned subsidiary of PNX, has advised the Funds that
it retained net selling commissions and deferred sales charges for the six-month
period (the "period") ended February 28, 2007, as follows:
Class A Class B Class C
Net Selling Deferred Deferred
Commissions Sales Charges Sales Charges
----------- ------------- -------------
Quality Small-Cap Fund .......... $ 669 $ -- $ --
Small-Cap Sustainable Growth Fund 338 -- --
Small-Cap Value Fund ............ 2,487 12,812 375
Value Equity Fund ............... 1,697 2,562 20
In addition, each Fund pays PEPCO distribution and/or service fees at an
annual rate of 0.25% for Class A shares, 1.00% for Class B shares and 1.00% for
Class C shares applied to the average daily net assets of each respective Class.
Class I shares do not pay distribution and/or service fees.
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.
PEPCO serves as the Administrator to the Trust. For its services, PEPCO
receives an administration fee at an annual rate of 0.09% of the first $5
billion, 0.08% on the next $10 billion and 0.07% over $15 billion of the average
net assets across all non-money market funds in the Phoenix Funds and The
Phoenix Edge Series Fund.
For the period ended February 28, 2007, the Trust incurred administration
fees totaling $105,417.
PEPCO serves as the Trust's transfer agent with Boston Financial Data
Services, Inc. serving as sub transfer agent. For the period ended February 28,
2007, transfer agent fees were $258,112 as reported in the Statements of
Operations, of which PEPCO retained the following:
Transfer
Agent
Retained
--------
Quality Small-Cap Fund ....................... $ 340
Small-Cap Sustainable Growth Fund ............ 253
Small-Cap Value Fund ......................... 66,791
Value Equity Fund ............................ 21,119
39
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
At February 28, 2007, 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
------ ----------
Quality Small-Cap Fund
- --Class I ............................... 10,072 $ 116,533
- --Class A ............................... 10,060 116,294
- --Class C ............................... 10,024 115,777
Small-Cap Sustainable Growth Fund
- --Class I ............................... 10,000 103,200
- --Class A ............................... 10,000 102,600
- --Class C ............................... 10,000 103,300
Small-Cap Value Fund
- --Class A ............................... 445,198 7,488,230
Until March 1, 2007, the Trust provided a deferred compensation plan to its
trustees who were not officers of PNX. Under the deferred compensation plan,
trustees were able to defer all or a portion of their compensation. Amounts
deferred were retained by the Fund, and to the extent permitted by the 1940 Act,
as amended, could have been invested in the shares of those funds selected by
the trustees. Investments in such funds are included in "Other assets" on the
Statement of Assets and Liabilities at February 28, 2007.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding U.S. Government and agency
securities and short-term securities) during the period ended February 28, 2007,
were as follows:
Purchases Sales
------------ ------------
Quality Small-Cap Fund .................. $ 3,826,751 $ 343,212
Small-Cap Sustainable Growth Fund ....... 2,161,629 201,847
Small-Cap Value Fund .................... 185,101,302 212,141,890
Value Equity Fund ....................... 27,287,220 31,989,739
There were no purchases or sales of long-term U.S. Government and agency
securities.
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.
The 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 a Fund did not concentrate its investments in such sectors.
At February 28, 2007, the Quality Small-Cap Fund and the Value Equity Fund
held investments issued by various companies in the Financial sector comprising
26% and 37%, respectively, of the total net assets of the Funds. The Small-Cap
Sustainable Growth Fund held investments issued by various companies in the
Information Technology sector, comprising 30% of the total net assets of the
Fund.
6. ILLIQUID SECURITIES
Investments shall be considered illiquid if they cannot be disposed of within
seven days in the ordinary course of business at the approximate amount at which
such securities have been valued by the Fund. Additionally, the following
information is also considered in determining liquidity: the frequency of trades
and quotes for the investment, whether the investment is listed for trading on a
recognized domestic exchange and/or whether two or more brokers are willing to
purchase or sell the security at a comparable price, the extent of market making
activity in the investment and the nature of the market for investment. Illiquid
securities are noted as such at the end of each Fund's Schedule of Investments
where applicable.
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. During 2004 and 2005, the
Boston District Office of the Securities and Exchange Commission ("SEC")
conducted an examination of the Company's investment company and investment
adviser affiliates. Following the examination, the staff of the Boston District
Office issued a deficiency letter noting perceived weaknesses in procedures for
monitoring trading to prevent market timing activity prior to 2004. 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. In 2005, based on the third party analysis the Company notified the
staff at the SEC Boston District Office that reimbursements were not appropriate
under the circumstances. The Company does not believe that the outcome of this
matter will be material to these financial statements.
40
PHOENIX INVESTMENT TRUST 97
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
8. INDEMNIFICATIONS
Under the Funds' organizational documents, their 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.
9. FEDERAL INCOME TAX INFORMATION
The Funds have capital loss carryovers, which may be used to offset future
capital gains, as follows:
Expiration Year
--------------------------------------
2011 2014 Total
---------- ------ ----------
Quality Small-Cap Fund ............... $ -- $ 937 $ 937
Small-Cap Sustainable Growth Fund ..... -- 2,520 2,520
Small-Cap Value Fund .................. -- -- --
Value Equity Fund ..................... 5,227,567 -- 5,227,567
The Funds 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.
41
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS FOR PHOENIX SMALL-CAP VALUE FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED)
The Board of Trustees is responsible for determining whether to approve the
Fund's investment advisory and subadvisory agreements. The Board, including a
majority of the independent Trustees, at a meeting held on November 16, 2006,
renewed the investment advisory agreement (the "Advisory Agreement") between
Phoenix Investment Counsel, Inc. ("PIC") and the Fund, and the investment
subadvisory agreement (the "Subadvisory Agreement") between PIC and Euclid
Advisors LLC ("Subadvisor") that took effect on September 1, 2006. Prior to
September 1, 2006, Phoenix/Zweig Advisers LLC had acted as investment subadvisor
to the Fund. Effective September 1, 2006, Euclid became Subadvisor as a result
of a realignment in investment advisers wholly owned and controlled by Phoenix
Investment Partners, Inc. The Fund relied on opinion of special counsel to
determine these actions were not an assignment of the advisory contract that is
subject to shareholder approval. Pursuant to the Advisory Agreement, PIC
provides advisory services to the Fund. Pursuant to the Subadvisory Agreement,
the Subadvisor provides the day to day investment management for the Fund.
During the review process, the Board received assistance and advice from, and
met separately with, independent legal counsel. In approving each agreement, the
Board, including a majority of the independent Trustees, determined that the fee
structure was fair and reasonable and that approval of each agreement was in the
best interests of the Fund and its shareholders. While attention was given to
all information furnished, the following discusses the primary factors relevant
to the Board's decision.
ADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services provided by PIC and its affiliates
are reasonable. The Board's conclusion was based, in part, upon services
provided to the Fund such as quarterly reports provided by PIC: 1) comparing the
performance of the Fund with a peer group and benchmark, 2) showing that the
investment policies and restrictions for the Fund were followed, and 3) covering
matters such as the compliance of investment personnel and other access persons
with PIC's and the Fund's code of ethics, the adherence to fair value pricing
procedures established by the Board, the monitoring of portfolio compliance,
information on illiquid securities and derivatives, brokerage commissions and
presentations regarding the economic environment. The Board noted that PIC was
responsible for the general oversight of the investment programs of the Fund and
the monitoring of the Subadvisor's investment performance and its compliance
with applicable laws, regulations, policies and procedures. In this regard, the
Board considered the detailed performance review process of PIC's Investment
Oversight Committee. With respect to compliance monitoring, the Board noted that
PIC requires quarterly compliance certifications from the Subadvisor and
conducts compliance due diligence visits at the Subadvisor. The Board also
considered the experience of PIC having acted as an investment adviser to mutual
funds for over 70 years and its current experience in acting as an investment
adviser to over 60 mutual funds and several institutional clients. The Board
also noted the extent of benefits that are provided to Fund shareholders from
being part of the Phoenix family of funds, including the right to exchange
investments between the same class of funds without a sales charge, the ability
to reinvest Fund dividends into other funds and the right to combine holdings in
other funds to obtain a reduced sales charge. The Board also considered the
transfer agent and shareholder services that are provided to Fund shareholders
by an affiliate of PIC, noting continuing improvements by management in the
scope and quality of services and favorable reports on such service conducted by
third parties.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the
investment performance of the Fund in view of its importance to shareholders.
While consideration was given to performance reports and discussions at Board
meetings throughout the year, particular attention in assessing the performance
was given in a report for the Fund prepared by Lipper Financial Services
("Lipper") for the contract renewal process. The Lipper report showed the
investment performance of the Fund's Class A shares for the 1, 3 and 5 year
periods ended September 30, 2006 and the year-to-date period ended September 30,
2006. The Board reviewed the investment performance of the Fund, along with
comparative performance information of a peer group of funds and a relevant
market index. The Board noted that the Fund had trailed its benchmark for all
periods, but it also noted the Fund's performance relative to its Lipper peer
group was improving during the more recent periods. The Board then also noted
the change in the Subadvisor to manage the Fund as of September 1, 2006 was
intended to improve the Fund's performance.
PROFITABILITY. The Board also considered the level of profits realized by PIC
and its affiliates in connection with the operation of the Fund. In this regard,
the Board reviewed the Fund profitability analysis addressing the overall
profitability of PIC for its management of the Phoenix retail fund family, as
well as its profits and that of its affiliates for providing administrative
support for the Fund. Attention was given to the methodology followed in
allocating costs to the Fund, it being recognized that allocation methodologies
are inherently subjective and various allocation methodologies may each be
reasonable while producing different results. In this regard, the Board noted
that the allocation appeared reasonable. The Board also noted the contractual
reimbursements provided to the Fund. The Board concluded that the profitability
to PIC from the Fund was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed significant emphasis
on the review of Fund expenses. Consideration was given to a comparative
analysis of the management fee and total expense ratio of the Fund compared with
those of a group of funds selected by Lipper as the Fundappropriate Lipper
expense peer
42
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS FOR PHOENIX SMALL-CAP VALUE FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
group. The Board noted that the total expenses and the management fee of the
Fund were slightly less than those for the peer group. The Board further noted
that the management fee remained the same after the change in Subadvisor for the
Fund. The Board was satisfied with the management fee and total expenses of the
Fund in comparison to its Lipper expense peer group and concluded that such fee
and expenses were reasonable.
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board also noted
that it was likely that PIC and the Fund would achieve certain economies of
scale as the assets grew covering certain fixed costs. The Board concluded that
shareholders would have an opportunity to benefit from these economies of scale.
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that are provided by the Subadvisor
are reasonable. The Board's opinion was based, in part, upon the extensive
experience of the Subadvisor and the portfolio managers in managing other
accounts, and further noted that the portfolio managers for the Fund remained in
place after the change in subadvisor for the Fund that became effective
September 1, 2006. In this regard, the Board noted that each member of the
portfolio management team had over 12 years of experience in the investment
management business. The Board also considered the Subadvisor's experience in
managing approximately $346 million in assets. Turning to compensation, the
Board noted that a primary factor in the Subadvisor's determination of the
amount of bonus compensation to portfolio managers was the relative investment
performance of the funds that they managed which would align their interests
with those of the Fund's shareholders. The Board also considered and was
satisfied with the adequacy of the Subadvisor's compliance program.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the
investment performance of the Fund in view of its importance to shareholders.
While consideration was given to performance reports and discussions at Board
meetings throughout the year, particular attention in assessing the performance
was given in a report for the Fund prepared by Lipper. The Lipper report showed
the investment performance of the Fund's Class A shares for the 1, 3 and 5 year
periods ended September 30, 2006 and the year-to-date period ended September 30,
2006. The Board reviewed the investment performance of the Fund, along with
comparative performance information of a peer group of funds and a relevant
market index. The Board noted that the Fund had trailed its benchmark for all
periods, but it also noted the Fund's performance relative to its Lipper peer
group was improving during the more recent periods.
PROFITABILITY. The Board did not separately review profitability information
for the Subadvisor, noting that the subadvisory fee is paid by PIC and not by
the Fund so that Fund shareholders would not be directly impacted.
SUBADVISORY FEE. The Board reviewed the subadvisory fees along with fees
charged by the Subadvisor to comparative funds that it managed, but also noted
that the subadvisory fees are paid by PIC and not by the Fund so that Fund
shareholders would not be directly impacted.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Fund's
shareholders, but noted that any economies would be generated with respect to
PIC because the Fund does not pay the subadvisory fee.
43
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS FOR PHOENIX VALUE EQUITY FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED)
The Board of Trustees is responsible for determining whether to approve the
Fund's investment advisory and subadvisory agreements. The Board, including a
majority of the independent Trustees, at a meeting held on November 15-16, 2006,
approved the continuation of the investment advisory agreement (the "Advisory
Agreement") between Phoenix Investment Counsel, Inc. ("PIC") and the Fund, and
the investment subadvisory agreement (the "Subadvisory Agreement") between PIC
and Acadian Asset Management, Inc. (the "Subadvisor"). Pursuant to the Advisory
Agreement, PIC provides advisory services to the Fund. Pursuant to the
Subadvisory Agreement, the Subadvisor provides the day to day investment
management for the Fund.
During the review process, the Board received assistance and advice from, and
met separately with, independent legal counsel. In approving each agreement, the
Board, including a majority of the independent Trustees, determined that the fee
structure was fair and reasonable and that approval of each agreement was in the
best interests of the Fund and its shareholders. While attention was given to
all information furnished, the following discusses the primary factors relevant
to the Board's decision.
ADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services provided by PIC and its affiliates
are reasonable. The Board's conclusion was based, in part, upon services
provided to the Fund such as quarterly reports provided by PIC: 1) comparing the
performance of the Fund with a peer group and benchmark, 2) showing that the
investment policies and restrictions for the Fund were followed, and 3) covering
matters such as the compliance of investment personnel and other access persons
with PIC's and the Fund's code of ethics, the adherence to fair value pricing
procedures established by the Board, the monitoring of portfolio compliance,
information on illiquid securities and derivatives, brokerage commissions and
presentations regarding the economic environment. The Board noted that PIC was
responsible for the general oversight of the investment programs of the Fund and
the monitoring of the Subadvisor's investment performance and its compliance
with applicable laws, regulations, policies and procedures. In this regard, the
Board considered the detailed performance review process of PIC's Investment
Oversight Committee. With respect to compliance monitoring, the Board noted that
PIC requires quarterly compliance certifications from the Subadvisor and
conducted compliance due diligence visits or telephone calls with the
Subadvisor. The Board also considered the experience of PIC having acted as an
investment adviser to mutual funds for over 70 years and its current experience
in acting as an investment adviser to over 60 mutual funds and several
institutional clients. The Board also noted the extent of benefits that are
provided to Fund shareholders from being part of the Phoenix family of funds,
including the right to exchange investments between the same class of funds
without a sales charge, the ability to reinvest Fund dividends into other funds
and the right to combine holdings in other funds to obtain a reduced sales
charge. The Board also considered the transfer agent and shareholder services
that are provided to Fund shareholders by an affiliate of PIC, noting continuing
improvements by management in the scope and quality of services and favorable
reports on such service conducted by third parties.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the
investment performance of the Fund in view of its importance to shareholders.
While consideration was given to performance reports and discussions at Board
meetings throughout the year, particular attention in assessing the performance
was given in a report for the Fund prepared by Lipper Financial Services
("Lipper") for the contract renewal process. The Lipper report showed the
investment performance of the Fund's Class A shares for the 1, 3 and 5 year
periods ended September 30, 2006 and the year-to-date period ended September 30,
2006. The Board reviewed the investment performance of the Fund, along with
comparative performance information of a peer group of funds and a relevant
market index. While the Board noted that the Fund had trailed its benchmark for
all periods, it also noted the Fund's performance was ranked near the top of its
Lipper peer group for the year-to-date and 1 year periods. The Board also noted
the Fund's performance had improved after the change in investment managers,
pursuant to the Subadvisory Agreements that became effective October 3, 2005.
PROFITABILITY. The Board also considered the level of profits realized by PIC
and its affiliates in connection with the operation of the Fund. In this regard,
the Board reviewed the Fund profitability analysis addressing the overall
profitability of PIC for its management of the Phoenix retail fund family, as
well as its profits and that of its affiliates, for providing administrative
support for the Fund. Attention was given to the methodology followed in
allocating costs to the Fund, it being recognized that allocation methodologies
are inherently subjective and various allocation methodologies may each be
reasonable while producing different results. In this regard, the Board noted
that the allocation appeared reasonable. The Board also noted the contractual
reimbursements provided to the Fund. The Board concluded that the profitability
to PIC from the Fund was reasonable.
MANAGEMENT FEE AND TOTAL EXPENSES. The Board also placed significant emphasis
on the review of Fund expenses. Consideration was given to a comparative
analysis of the management fees and total expense ratios of the Fund compared
with those of a group of funds selected by Lipper as the Fund's appropriate
Lipper expense peer group. The Board noted that the total expenses of the Fund
were less than the average total expenses for comparable funds and that the
management fee was at the median for the peer group. The Board was satisfied
with the management fee and total expenses of the Fund in comparison to its
Lipper expense peer group and concluded that such fee and expenses were
reasonable.
44
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AND SUBADVISORY
AGREEMENTS FOR PHOENIX VALUE EQUITY FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
ECONOMIES OF SCALE. The Board noted that the management fee included
breakpoints based on the amount of assets under management. The Board also noted
that it was likely that PIC and the Fund would achieve certain economies of
scale as the assets grew covering certain fixed costs. The Board concluded that
shareholders would have an opportunity to benefit from these economies of scale.
SUBADVISORY AGREEMENT CONSIDERATIONS
NATURE, EXTENT AND QUALITY OF SERVICES. The Board concluded that the nature,
extent and quality of the overall services that are provided by the Subadvisor
are reasonable. The Board's opinion was based, in part, upon the extensive
experience of the Subadvisor and the portfolio managers in managing other
accounts. In this regard, the Board noted that the Subadvisor had been in the
investment management business for almost 30 years. The Board also considered
the Subadvisor's experience in managing over $44 billion in assets. Turning to
compensation, the Board noted that a primary factor in the Subadvisor's
determination of the amount of bonus compensation to portfolio managers was the
relative investment performance of the funds that they managed which would align
their interests with those of the Fund's shareholders. The Board also considered
and was satisfied with the adequacy of the Subadvisor's compliance program.
INVESTMENT PERFORMANCE. The Board placed significant emphasis on the
investment performance of the Fund in view of its importance to shareholders.
While consideration was given to performance reports and discussions at Board
meetings throughout the year, particular attention in assessing the performance
was given in a report for the Fund prepared by Lipper. The Lipper report showed
the investment performance of the Fund's Class A shares for the 1 year and the
year-to-date periods ended September 30, 2006. The Board reviewed the investment
performance of the Fund, along with comparative performance information of a
peer group of funds and a relevant market index. The Board noted and was
satisfied that the Fund had exceeded the Lipper peer group average for its
investment style for the 1 year and the year-to-date periods, while performance
relative to its market index was also improving over those periods, and
concluded that the Fund's performance was reasonable.
PROFITABILITY. The Board did not separately review profitability information
for the Subadvisor, noting that the subadvisory fee is paid by PIC and not by
the Fund so that Fund shareholders would not be directly impacted.
SUBADVISORY FEE. The Board reviewed the subadvisory fees along with fees
charged by the Subadvisor to comparative funds that it managed, but also noted
that the subadvisory fees are paid by PIC and not by the Fund so that Fund
shareholders would not be directly impacted.
ECONOMIES OF SCALE. The Board also considered the existence of any economies
of scale and whether those economies would be passed along to the Fund's
shareholders but noted that any economies would be generated with respect to PIC
because the Fund does not pay the subadvisory fee.
45
RESULTS OF SHAREHOLDER MEETING
PHOENIX INVESTMENT TRUST 97
OCTOBER 31, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Investment Trust 97 (the
"Trust") held on October 31, 2006, shareholders voted on the following
proposals:
1. To elect eleven Trustees to serve on the Board of Trustees until the next
meeting of shareholders at which Trustees are elected (Proposal 1).
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm for the Trusts (Proposal
7).
NUMBER OF ELIGIBLE UNITS VOTED:
FOR AGAINST
---- -------
1. Election of Trustees
E. Virgil Conway ........................ 172,583,791 8,694,155
Harry Dalzell-Payne ..................... 172,575,889 8,702,058
Daniel T. Geraci ........................ 172,709,231 8,568,716
Francis E. Jeffries ..................... 172,592,721 8,685,225
Leroy Keith, Jr ......................... 172,723,532 8,554,415
Marilyn E. LaMarche ..................... 172,599,345 8,678,602
Philip R. McLoughlin .................... 172,616,477 8,661,470
Geraldine M. McNamara ................... 172,639,490 8,638,457
James M. Oates .......................... 172,713,070 8,564,877
Richard E. Segerson ..................... 172,715,206 8,562,741
Ferdinand L. J. Verdonck ................ 172,621,867 8,656,080
FOR AGAINST ABSTAIN
---- ------- -------
2. To ratify the appointment of
PricewaterhouseCoopers LLC as the
independent registered public
accounting firm ......................... 171,390,182 2,921,368 6,966,396
46
RESULTS OF SHAREHOLDER MEETING
PHOENIX SMALL-CAP VALUE FUND
NOVEMBER 21, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Small-Cap Value Fund (the
"Fund"), a series of Phoenix Investment Trust 97 (the "Trust") held on November
21, 2006, shareholders voted on the following proposals:
1. To approve a proposal to permit Phoenix Investment Counsel, Inc.
("PIC") to hire and replace subadvisers or to modify subadvisory
agreements without shareholder approval (Proposal 2).
2. To approve the amendment of fundamental restrictions of the Fund with
respect to loans (Proposal 3).
3. To approve a proposal to reclassify the investment objective of the
Investment Objective Funds from fundamental to non-fundamental
(Proposal 6).
NUMBER OF ELIGIBLE UNITS VOTED:
FOR AGAINST ABSTAIN BROKER NON-VOTES
---- ------- ------- ----------------
1. To permit PIC to hire and replace
subadvisersor to modify subadvisory
agreements withoutshareholder approval ...... 6,266,586 370,500 204,914 2,008,075
2. Amendment of fundamental restrictions
of the Fund with respect to loans ........... 6,218,902 368,260 254,837 2,008,075
3. To reclassify the investment objective
of the Investment Objective Funds from
fundamental to non-fundamental .............. 6,108,581 483,999 249,419 2,008,075
47
RESULTS OF SHAREHOLDER MEETING
PHOENIX VALUE EQUITY FUND
NOVEMBER 21, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Value Equity Fund (the
"Fund"), a series of Phoenix Investment Trust 97 (the "Trust") held on November
21, 2006, shareholders voted on the following proposals:
1. To approve a proposal to permit Phoenix Investment Counsel, Inc.
("PIC") to hire and replace subadvisers or to modify subadvisory
agreements without shareholder approval (Proposal 2).
2. To approve the amendment of fundamental restrictions of the Fund with
respect to loans (Proposal 3).
3. To approve a proposal to reclassify the investment objective of the
Investment Objective Funds from fundamental to non-fundamental
(Proposal 6).
NUMBER OF ELIGIBLE UNITS VOTED:
FOR AGAINST ABSTAIN BROKER NON-VOTES
---- ------- ------- ----------------
1. To permit PIC to hire and replace
subadvisersor to modify subadvisory
agreements without shareholder approval ..... 1,412,033 84,466 131,894 395,274
2. Amendment of fundamental restrictions
of the Fund with respect to loans ........... 1,415,067 67,924 145,403 395,274
3. To reclassify the investment objective
of the Investment Objective Funds from
fundamental to non-fundamental .............. 1,414,475 64,788 149,131 395,274
48
PHOENIX INVESTMENT TRUST 97
101 Munson Street
Greenfield, MA 01301-9668
TRUSTEES
George R. Aylward
E. Virgil Conway
Harry Dalzell-Payne
Francis E. Jeffries
Leroy Keith, Jr.
Marilyn E. LaMarche
Philip R. McLoughlin, Chairman
Geraldine M. McNamara
James M. Oates
Richard E. Segerson
Ferdinand L.J. Verdonck
OFFICERS
George R. Aylward, President
Nancy G. Curtiss, Senior 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
Phoenix Investment Counsel, Inc.
56 Prospect Street
Hartford, CT 06115-0480
PRINCIPAL UNDERWRITER
Phoenix Equity Planning Corporation
One American Row
Hartford, CT 06103-2899
TRANSFER AGENT
Phoenix Equity Planning Corporation
One American Row
Hartford, CT 06103-2899
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.
- --------------------------------------------------------------------------------
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(This page has been left blank intentionally.)
(This page has been left blank intentionally.)
---------------
PRESORTED
STANDARD
U.S. POSTAGE
PAID
Louisville, KY
Permit No. 1051
---------------
[GRAPHIC OMITTED]
PHOENIX
Phoenix Equity Planning Corporation
P.O. Box 150480
Hartford, CT 06115-0480
For more information about Phoenix 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.
PXP214
BPD31321 4-07
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
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-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's 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 Investment Trust 97
--------------------------------------------------------------------
By (Signature and Title)* /s/ George R. Aylward
-------------------------------------------------------
George R. Aylward, President
(principal executive officer)
Date May 4, 2007
----------------------------------------------------------------------------
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, President
(principal executive officer)
Date May 4, 2007
----------------------------------------------------------------------------
By (Signature and Title)* /s/ W. Patrick Bradley
-------------------------------------------------------
W. Patrick Bradley, Chief Financial Officer and
Treasurer
(principal financial officer)
Date May 4, 2007
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.