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 811-21371
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Phoenix Adviser Trust
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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: February 28
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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
ANNUAL REPORT
Phoenix Focused Value Fund
Phoenix Foreign Opportunities Fund
| | Wouldn't you rather have this
| | document e-mailed to you?
TRUST NAME: | | ELIGIBLE SHAREHOLDERS CAN SIGN UP FOR
PHOENIX ADVISER TRUST | FEBRUARY 28, 2007| E-DELIVERY AT 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 Adviser Trust 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:
[PHOTO OMITTED]
We are pleased to provide this report for the fiscal year 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. The report
also provides commentary from your fund's management team with respect to the
fund's performance, its investment strategies, and how the fund performed
against the broader market.
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
PHOLIOs(SM) (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,
/s/ George R. Aylward
George R. Aylward
President, PhoenixFunds
MARCH 2007
1
TABLE OF CONTENTS
Glossary ......................................................... 3
Phoenix Focused Value Fund ....................................... 4
Phoenix Foreign Opportunities Fund ............................... 13
Notes to Financial Statements .................................... 24
Report of Independent Registered Public Accounting Firm .......... 30
Board of Trustees' Consideration of Investment Advisory Agreements 31
Results of Shareholder Meeting ................................... 35
Fund Management Tables ........................................... 38
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PROXY VOTING INFORMATION (FORM N-PX)
The Adviser and subadviser 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
ADR (AMERICAN DEPOSITARY RECEIPT)
Represents shares of foreign companies traded in U.S. dollars on U.S. exchanges
that are held by a bank or a trust. Foreign companies use ADRs in order to make
it easier for Americans to buy their shares.
EPS (EARNINGS PER SHARE)
Past 5 Years measures the trailing five-year earnings-per-share growth of a
portfolio's holdings.
FFCB
Federal Farm Credit Bank.
FEDERAL RESERVE (THE "FED")
The central bank of the United States, responsible for controlling the money
supply, interest rates and credit with the goal of keeping the U.S. economy and
currency stable. Governed by a seven-member board, the system includes 12
regional Federal Reserve Banks, 25 branches and all national and state banks
that are part of the system.
MSCI EAFE(R) INDEX (NET)
The MSCI EAFE(R) Index (Net) is a free float-adjusted market capitalization
index that measures developed foreign market equity performance, excluding the
U.S. and Canada. The index is calculated on a total return basis with net
dividends reinvested.
S&P 500(R) INDEX
The S&P 500(R) Index is a free-float market capitalization-weighted index of 500
of the largest U.S. companies. The index is calculated on a total return basis
with dividends reinvested.
SPONSORED ADR
An ADR which is issued with the cooperation of the company whose stock will
underlie the ADR. These shares carry all the rights of the common share such as
voting rights. ADRs must be sponsored to be able to trade on the NYSE.
INDEXES ARE UNMANAGED AND NOT AVAILABLE FOR DIRECT INVESTMENT; THEREFORE, THEIR
PERFORMANCE DOES NOT REFLECT THE EXPENSES ASSOCIATED WITH THE ACTIVE MANAGEMENT
OF AN ACTUAL PORTFOLIO.
3
PHOENIX FOCUSED VALUE FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, ED WALCZAK
Q: HOW DID THE PHOENIX FOCUSED VALUE FUND PERFORM FOR ITS FISCAL YEAR ENDED
FEBRUARY 28, 2007?
A: For the fiscal year ended February 28, 2007, the Fund's Class A shares
returned 11.44% and Class C shares returned 10.56%. For the same period, the S&P
500(R) Index, which is a broad-based equity index, returned 11.97%. All
performance figures assume reinvestment of distributions and exclude the effect
of sales charges. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT
PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE.
Q: HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR?
A: On Wall Street, stocks gradually inched higher during most of the last month
of the fiscal year ended February 28, 2007--before a sharp sell-off in Chinese
stocks at the end of February weighed on global and U.S. stocks. The S&P 500(R)
Index was dragged down by materials, financial and consumer discretionary
stocks, and all gains made during the previous trading days of the month were
wiped out. Those hoping that the U.S. housing market had hit bottom were given
little to cheer about when the National Association of Realtors released a mixed
set of January home sales figures, showing a larger-than-expected fall in home
prices, in what marked the sixth consecutive month of declining home prices.
These less-than-favorable events, however, came at the end of a relatively
good fiscal year, during which time investors in U.S. stocks enjoyed their best
equity market performance since 2003. All 10 sectors had positive returns during
the period, with telecommunications being the top sector, followed by energy.
Health care and information technology lagged slightly behind the top two.
Earnings reports also illustrated the relative strength of the largest
companies, such as General Electric, IBM, Johnson & Johnson, and Procter &
Gamble. The largest stocks in the S&P 500 reported fewer negative surprises and
2007 EPS (Earnings Per Share) revisions were less negative for large-cap stocks
than their smaller-cap counterparts.
Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR?
A: It is important to note that our defensive style has served us well when the
last 10 years are taken into consideration. For example, $10,000 invested in
1997 has grown to $20,896 in 2007, with consistently positive gains since 2003.
Although our recent returns have looked stingy in the robust bull market
of the last several years, the long-term objective of the Fund is to achieve
superior returns over the market, with far less risk (because we typically
confine ourselves to higher-quality companies, unless we make an analytical
error). With the addition to the portfolio this year of such names as Altria and
Procter & Gamble and the reduction of Fannie Mae (as that stock rallied in
recognition of substantial progress on its accounting issues and a significant
reduction in political risk), we believe that our portfolio offers substantially
less business risk today than does the market.
With the current bull market seeming to be getting a bit long in the
tooth, and growing expectations that volatility could increase, we believe that
defensive-related sectors could be the beneficiaries. Consequently, we recently
increased our overweight allocation to the consumer staples sector. Other new
additions to the portfolio include Kellogg and Pepsi. We continue to believe
that the combination of the impact of a sharp slowdown in housing, combined with
the cumulative effect of the Federal Reserve
4
Phoenix Focused Value Fund (continued)
rate hikes, could lead to a more severe economic slowdown than the market is now
expecting. Should this prediction be accurate, it could provide support to the
market's defensive sectors in 2007.
MARCH 2007
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND THERE IS NO GUARANTEE THAT
MARKET FORECASTS WILL BE REALIZED.
FOR DEFINITIONS OF INDEXES CITED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3.
5
Phoenix Focused Value Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 2/28/07
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 2/28/07 DATE
------ ------- -------- ---------- ---------
Class A Shares at NAV (2) 11.44% 7.15% 10.00% -- --
Class A Shares at POP (3,4) 5.04 5.89 9.36 -- --
Class C Shares at NAV (2) 10.56 -- -- 10.37% 10/9/02
Class C Shares with CDSC (4) 10.56 -- -- 10.37 10/9/02
S&P 500(R) Index 11.97 6.82 7.65 Note 5 Note 5
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS.
CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE
INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT
A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF SHARES.
PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END.
1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
2 "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE THE EFFECT OF ANY SALES
CHARGE.
3 "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE MAXIMUM
FRONT-END 5.75% SALES CHARGE.
4 CDSC (CONTINGENT DEFERRED SALES CHARGE) IS APPLIED TO REDEMPTIONS OF CERTAIN
CLASSES OF SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF
PURCHASE. CDSC CHARGES FOR CERTAIN REDEMPTIONS OF CLASS A SHARES AND ALL
REDEMPTIONS OF CLASS C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER.
5 INDEX PERFORMANCE IS 16.59% FOR CLASS C (SINCE 10/9/02).
GROWTH OF $10,000 PERIODS ENDING 2/28
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
2/28/97 in Class A shares. The total return for Class A shares reflects the
maximum sales charge of 5.75% on the initial investment. The performance of the
other share class will be greater or less than that shown based on difference in
inception dates, fees and sales charges. Performance assumes dividends and
capital gain distributions are reinvested.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Phoenix Focused Value Fund Class A S&P 500 Index
2/28/97 $ 9,425 $10,000
2/27/98 12,694 13,503
2/26/99 12,790 16,186
2/29/00 9,974 18,106
2/28/01 15,530 16,608
2/28/02 17,316 15,025
2/28/03 15,251 11,617
2/27/04 21,074 16,096
2/28/05 21,589 17,216
2/28/06 21,945 18,662
2/28/07 24,456 20,896
For information regarding the index, see the glossary on page 3.
6
Phoenix Focused 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
Focused 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 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
Focused Value Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,065.40 $6.62
Hypothetical (5% return
before expenses) 1,000.00 1,018.30 6.49
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.30%,
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
Focused Value Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,060.90 $10.46
Hypothetical (5% return
before expenses) 1,000.00 1,014.52 10.28
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.05%,
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.
7
Phoenix Focused Value Fund
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SECTOR WEIGHTINGS 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 37%
Consumer Staples 29
Consumer Discretionary 15
Health Care 4
Other 15
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
SHARES VALUE
-------- ------------
DOMESTIC COMMON STOCKS--69.4%
APPAREL RETAIL--1.9%
TJX Cos., Inc. (The) ........................ 37,600 $ 1,034,000
APPAREL, ACCESSORIES & LUXURY GOODS--1.7%
Liz Claiborne, Inc. ......................... 20,800 936,000
BROADCASTING & CABLE TV--2.9%
Entercom Communications Corp. ............... 25,300 723,327
Saga Communications, Inc. Class A(b) ........ 86,795 844,515
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1,567,842
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DIVERSIFIED BANKS--5.9%
Wachovia Corp. .............................. 23,364 1,293,665
Wells Fargo & Co. ........................... 54,000 1,873,800
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3,167,465
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HOME FURNISHINGS--1.0%
Mohawk Industries, Inc.(b) .................. 6,130 536,497
HOMEFURNISHING RETAIL--1.0%
Bed Bath & Beyond, Inc.(b) .................. 13,600 542,504
HOUSEHOLD PRODUCTS--2.6%
Procter & Gamble Co. (The) .................. 22,045 1,399,637
HYPERMARKETS & SUPER CENTERS--3.9%
Wal-Mart Stores, Inc. ....................... 43,300 2,091,390
MULTI-LINE INSURANCE--6.7%
American International Group, Inc. .......... 54,200 3,636,820
SHARES VALUE
-------- ------------
OTHER DIVERSIFIED FINANCIAL SERVICES--1.7%
Bank of America Corp. ....................... 17,700 $ 900,399
PACKAGED FOODS & MEATS--3.3%
General Mills, Inc. ......................... 21,800 1,228,648
Kellogg Co. ................................. 11,100 554,112
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1,782,760
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PHARMACEUTICALS--3.4%
Johnson & Johnson ........................... 29,300 1,847,365
PROPERTY & CASUALTY INSURANCE--10.2%
AMBAC Financial Group, Inc. ................. 8,000 701,120
Berkshire Hathaway, Inc. Class A(b) ......... 40 4,247,600
Cincinnati Financial Corp. .................. 12,992 561,514
------------
5,510,234
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PUBLISHING--1.9%
Gannett Co., Inc. ........................... 16,700 1,023,042
REGIONAL BANKS--3.0%
Fifth Third Bancorp ......................... 40,000 1,611,200
SOFT DRINKS--3.3%
Coca-Cola Co. (The) ......................... 26,200 1,223,016
PepsiCo, Inc. ............................... 8,600 543,090
------------
1,766,106
------------
SPECIALIZED CONSUMER SERVICES--1.8%
Block (H&R), Inc. ........................... 44,300 964,854
SPECIALTY STORES--1.0%
Tiffany & Co. ............................... 12,060 525,093
See Notes to Financial Statements
8
Phoenix Focused Value Fund
SHARES VALUE
-------- ------------
THRIFTS & MORTGAGE FINANCE--9.4%
Fannie Mae .................................. 23,174 $ 1,314,661
Freddie Mac ................................. 58,600 3,760,948
------------
5,075,609
------------
TOBACCO--2.8%
Altria Group, Inc. .......................... 17,800 1,500,184
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TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $32,580,314) 37,419,001
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FOREIGN COMMON STOCKS(c)--14.7%
DISTILLERS & VINTNERS--2.3%
Diageo plc Sponsored ADR
(United Kingdom) ............................ 15,900 1,262,301
PACKAGED FOODS & MEATS--7.9%
Cadbury Schweppes plc Sponsored ADR
(United Kingdom) ............................ 47,100 2,026,713
Nestle S.A. Sponsored ADR
(Switzerland) ............................... 24,115 2,241,282
------------
4,267,995
------------
SPECIALTY STORES--1.6%
Signet Group plc Sponsored ADR
(United Kingdom) ............................ 36,900 857,187
TOBACCO--2.9%
British American Tobacco plc Sponsored ADR
(United Kingdom) ............................ 25,200 1,537,452
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TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $6,374,042) 7,924,935
- -------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--84.1%
(IDENTIFIED COST $38,954,356) 45,343,936
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PAR VALUE
(000) VALUE
--------- ------------
SHORT-TERM INVESTMENTS--15.2%
FEDERAL AGENCY SECURITIES(d)--2.4%
FFCB 5.18%, 3/2/07 .......................... $ 1,305 $ 1,304,812
COMMERCIAL PAPER(d)--12.8%
Ciesco LLC 5.25%, 3/1/07 .................... 1,000 1,000,000
Lockhart Funding LLC 5.27%, 3/1/07 .......... 805 805,000
Ranger Funding Co. LLC 5.26%, 3/5/07 ........ 1,015 1,014,407
Chariot Funding LLC 5.26%, 3/7/07 ........... 1,070 1,069,062
Danske Corp. 5.25%, 3/8/07 .................. 1,385 1,383,586
George Street Finance LLC
5.27%, 3/13/07 .............................. 1,230 1,227,839
CIT Group, Inc. 5.25%, 3/21/07 .............. 410 408,804
------------
6,908,698
------------
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TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $8,213,510) 8,213,510
- -------------------------------------------------------------------------
TOTAL INVESTMENTS--99.3%
(IDENTIFIED COST $47,167,866) 53,557,446(a)
Other assets and liabilities, net--0.7% 395,905
------------
NET ASSETS--100.0% $ 53,953,351
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $6,973,077 and gross
depreciation of $733,106 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$47,317,475.
(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
9
Phoenix Focused Value Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
ASSETS
Investment securities at value
(Identified cost $47,167,866) $53,557,446
Receivables
Investment securities sold 607,510
Fund shares sold 104,587
Dividends 66,284
Prepaid expenses 16,828
Other assets 9,987
-----------
Total assets 54,362,642
-----------
LIABILITIES
Cash overdraft 221
Payables
Investment securities purchased 288,309
Fund shares repurchased 17,027
Professional fee 30,428
Investment advisory fee 27,696
Distribution and service fees 12,649
Transfer agent fee 10,798
Trustee deferred compensation plan 9,987
Administration fee 7,571
Trustees' fee 54
Other accrued expenses 4,551
-----------
Total liabilities 409,291
-----------
NET ASSETS $53,953,351
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $46,969,951
Distributions in excess of net investment income (2,035)
Accumulated net realized gain 595,855
Net unrealized appreciation 6,389,580
-----------
NET ASSETS $53,953,351
===========
CLASS A
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization (Net Assets $50,501,816) 2,582,322
Net asset value per share $19.56
Offering price per share $19.56/(1-5.75%) $20.75
CLASS C
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization (Net Assets $3,451,535) 182,393
Net asset value and offering price per share $18.92
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 2007
INVESTMENT INCOME
Dividends $ 954,446
Interest 438,766
Foreign taxes withheld (7,783)
-----------
Total investment income 1,385,429
-----------
EXPENSES
Investment advisory fee 420,211
Service fees, Class A 131,666
Distribution and service fees, Class C 33,619
Financial agent fee 19,306
Administration fee 30,032
Transfer agent 90,105
Professional 35,605
Registration 31,261
Printing 27,739
Trustees 13,977
Custodian 9,868
Miscellaneous 10,060
-----------
Total expenses 853,449
Less expenses reimbursed by investment adviser (120,511)
Custodian fees paid indirectly (257)
-----------
Net expenses 732,681
-----------
NET INVESTMENT INCOME (LOSS) 652,748
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 3,349,314
Net change in unrealized appreciation (depreciation)
on investments 1,993,882
-----------
NET GAIN (LOSS) ON INVESTMENTS 5,343,196
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 5,995,944
===========
See Notes to Financial Statements
10
Phoenix Focused Value Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
February 28, 2007 February 28, 2006
----------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 652,748 $ 410,168
Net realized gain (loss) 3,349,314 3,642,690
Net change in unrealized appreciation (depreciation) 1,993,882 (3,474,699)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 5,995,944 578,159
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (632,518) (344,668)
Net investment income, Class C (22,265) (3,861)
Net investment income, Investor Class -- (117,053)
Net investment income, Class I -- (6,240)
Net realized short-term gains, Class A (441,358) (299,802)
Net realized short-term gains, Class C (29,478) (20,711)
Net realized short-term gains, Investor Class -- --
Net realized short-term gains, Class I -- --
Net realized long-term gains, Class A (2,905,893) (2,611,498)
Net realized long-term gains, Class C (195,932) (338,851)
Net realized long-term gains, Investor Class -- (3,003,384)
Net realized long-term gains, Class I -- (181,221)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (4,227,444) (6,927,289)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (214,969 and 153,804 shares, respectively) 4,223,855 2,953,908
Net asset value of shares issued from reinvestment of distributions
(200,821 and 167,817 shares, respectively) 3,900,905 3,161,352
Proceeds from shares issued in connection with reclassification from Investor
Class Shares (0 and 2,994,554 shares, respectively) (See Note 12) -- 59,058,124
Proceeds from shares issued in connection with reclassification from Class I
Shares (0 and 180,929 shares, respectively) (See Note 12) -- 3,568,308
Cost of shares repurchased (801,256 and 776,140 shares, respectively) (15,615,689) (15,023,305)
----------- -----------
Total (7,490,929) 53,718,387
----------- -----------
CLASS C
Proceeds from sales of shares (11,112 and 32,657 shares, respectively) 211,825 624,826
Net asset value of shares issued from reinvestment of distributions
(13,138 and 19,183 shares, respectively) 247,675 357,909
Cost of shares repurchased (41,668 and 25,821 shares, respectively) (772,829) (486,444)
----------- -----------
Total (313,329) 496,291
----------- -----------
INVESTOR CLASS
Proceeds from sales of shares (0 and 104,213 shares, respectively) -- 2,119,477
Net asset value of shares issued from reinvestment of distributions
(0 and 156,298 shares, respectively) -- 3,050,945
Cost of shares repurchased (0 and 680,869 shares, respectively) -- (13,656,695)
Value of shares liquidated in connection with reclassification
to Class A Shares (0 and 3,005,502 shares, respectively) (See Note 12) -- (59,058,124)
----------- -----------
Total -- (67,544,397)
----------- -----------
CLASS I
Proceeds from sales of shares (0 and 1,207 shares, respectively) -- 24,188
Net asset value of shares issued from reinvestment of distributions
(0 and 9,048 shares, respectively) -- 176,169
Cost of shares repurchased (0 and 19,186 shares, respectively) -- (382,874)
Value of shares liquidated in connection with reclassification to
Class A Shares (0 and 182,057 shares, respectively) (See Note 12) -- (3,568,308)
----------- -----------
Total -- (3,750,825)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (7,804,258) (17,080,544)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (6,035,758) (23,429,674)
NET ASSETS
Beginning of period 59,989,109 83,418,783
----------- -----------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME AND
UNDISTRIBUTED NET INVESTMENT INCOME OF $(2,035) AND $0, RESPECTIVELY) $53,953,351 $59,989,109
=========== ===========
See Notes to Financial Statements
11
Phoenix Focused Value Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
----------------------------------------------------------------------------
FOR THE PERIOD
YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 TO YEAR ENDED DECEMBER 31,
------------------------------ FEBRUARY 29, --------------------------
2007 2006 2005 2004 2003 2002
Net asset value, beginning of period $18.97 $20.74 $22.69 $21.82 $18.64 $19.86
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.24(5) 0.12(5) 0.03 --(2) 0.03 (0.09)
Net realized and unrealized gain (loss) 1.90 0.19 0.48 0.87 4.47 (0.33)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.14 0.31 0.51 0.87 4.50 (0.42)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.25) (0.15) -- -- -- --
Distributions from net realized gains (1.30) (1.93) (2.46) -- (1.32) (0.80)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.55) (2.08) (2.46) -- (1.32) (0.80)
------ ------ ------ ------ ------ ------
Payment by affiliate(6) -- -- --(2) -- -- --
------ ------ ------ ------ ------ ------
Change in net asset value 0.59 (1.77) (1.95) 0.87 3.18 (1.22)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.56 $18.97 $20.74 $22.69 $21.82 $18.64
====== ====== ====== ====== ====== ======
Total return(1) 11.44% 1.65% 2.45% 3.99 %(4) 24.54 % (2.20)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $50,502 $56,307 $5,120 $3,746 $3,752 $112,302
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.26% 1.15% 1.15% 1.15 %(3) 2.11 % 1.72 %
Gross operating expenses 1.48% 1.50% 1.85% 1.96 %(3) 2.11 % 1.74 %
Net investment income (loss) 1.21% 0.61% 0.18% (0.33)%(3) (0.88)% (0.63)%
Portfolio turnover 35% 34% 40% 55 %(3) 21 % 76 %
CLASS C
-----------------------------------------------------------------------------
FOR THE PERIOD YEAR ENDED FROM INCEPTION
YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 TO DECEMBER 31, OCTOBER 9 TO
------------------------------ FEBRUARY 29, ------------ DECEMBER 31,
2007 2006 2005 2004 2003 2002
Net asset value, beginning of period $18.43 $20.23 $22.35 $21.52 $18.60 $17.49
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.08(5) (0.01)(5) (0.04) --(2) (0.07) (0.06)
Net realized and unrealized gain (loss) 1.84 0.16 0.38 0.83 4.31 1.97
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.92 0.15 0.34 0.83 4.24 1.91
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.13) (0.02) -- -- -- --
Distributions from net realized gains (1.30) (1.93) (2.46) -- (1.32) (0.80)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.43) (1.95) (2.46) -- (1.32) (0.80)
------ ------ ------ ------ ------ ------
Payment by affiliate(6) -- -- --(2) -- -- --
------ ------ ------ ------ ------ ------
Change in net asset value 0.49 (1.80) (2.12) 0.83 2.92 1.11
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $18.92 $18.43 $20.23 $22.35 $21.52 $18.60
====== ====== ====== ====== ====== ======
Total return(1) 10.56% 0.86 % 1.68 % 3.86 %(4) 23.18 % 10.82 %(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,451 $3,682 $3,516 $1,827 $1,344 $355
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.02% 1.90 % 1.90 % 1.90 %(3) 3.16 % 2.72 %(3)
Gross operating expenses 2.23% 2.34 % 2.59 % 2.72 3.16 %(3) 2.74 %(3)
Net investment income (loss) 0.45% (0.07)% (0.57)% (1.05)%(3) (1.81)% (1.63)%(3)
Portfolio turnover 35% 34 % 40 % 55 %(3) 21 % 76 %(3)
(1) Sales charges are not reflected in total return calculation.
(2) Amount is less than $0.01.
(3) Annualized.
(4) Not Annualized.
(5) Computed using average shares outstanding.
(6) Payment by affiliate. See Note 3 in the Notes to Financial Statements.
See Notes to Financial Statements
12
PHOENIX FOREIGN OPPORTUNITIES FUND
A DISCUSSION WITH THE FUND'S PORTFOLIO MANAGER, RAJIV JAIN
Q: HOW DID THE PHOENIX FOREIGN OPPORTUNITIES FUND PERFORM FOR ITS FISCAL YEAR
ENDED FEBRUARY 28, 2007?
A: For the fiscal year ended February 28, 2007, the Fund's Class A shares
returned 20.39%, Class C shares returned 19.46% and Class I shares (formerly
Class X shares) returned 14.84% (for the period of May 15, 2006, inception of
the Class, through February 28, 2007). For the period of March 1, 2006, to
February 28, 2007, the S&P 500(R) Index, a broad-based equity index, returned
11.97% and the MSCI EAFE(R) Index (Net), which is the Fund's style-specific
index appropriate for comparison returned 21.07%. All performance figures assume
reinvestment of distributions and exclude the effect of sales charges. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND CURRENT PERFORMANCE MAY BE
HIGHER OR LOWER THAN THE PERFORMANCE SHOWN ABOVE.
Q: HOW DID THE EQUITY MARKETS PERFORM DURING THE FUND'S FISCAL YEAR?
A: The stumble in many emerging markets and the pause in developed markets,
which started off 2007, brought to the forefront many of the risks regarding the
availability of the tremendous liquidity that has been supporting stocks and
bonds. During the fiscal year ended February 28, 2007, fears of overvaluation
emerged amid a series of record highs for several Asian equity markets,
including China and South Korea, and six-year peaks for Europe's benchmarks.
However, during the last month of the fiscal year, global equity markets
(ex-U.S.), as measured by the MSCI-EAFE Index, recovered slightly from their
fall. However, despite these small setbacks, global equity markets performed
well for most of the 12-month period ended February 28, 2007.
Toward the end of the fiscal year, global equity markets experienced their
best period since 2003, as continued strong profit growth, a healthy appetite
for risk and strong liquidity propelled European, Asian, and Latin American
markets to double-digit gains for the year. The Fund also participated in these
double-digit advances, although it moderately lagged the benchmark.
Q: WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR?
A: Strong stock selection, a commitment to overweighting favored companies, and
good performance in emerging markets drove the Fund's performance for the year.
The Fund remains committed to taking long positions in select, high-quality
companies. Historically, this has allowed us to have lower turnover and lower
volatility than the benchmark--and this is expected to increase the resiliency
of our portfolio during down markets.
The Fund is positioned to take advantage of a shift away from commodities
and export-driven companies. We continue to favor consumer staples and maintain
an overweight allocation to European and emerging markets--as strong
fundamentals, attractive valuations, and solid growth prospects have the
potential to support continued investor interest for the long term.
MARCH 2007
THE PRECEDING INFORMATION IS THE OPINION OF PORTFOLIO MANAGEMENT. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND THERE IS NO GUARANTEE THAT
MARKET FORECASTS WILL BE REALIZED.
FOR DEFINITIONS OF INDEXES CITED IN THIS REPORT, SEE THE GLOSSARY ON PAGE 3.
13
Phoenix Foreign Opportunities Fund
AVERAGE ANNUAL TOTAL RETURNS(1) PERIODS ENDING 2/28/07
INCEPTION INCEPTION
1 YEAR 5 YEARS 10 YEARS TO 2/28/07 DATE
------ ------- -------- ---------- ---------
Class A Shares at NAV (2) 20.39% 19.77% 9.32% -- --
Class A Shares at POP (3,4) 13.47 18.36 8.67 -- --
Class C Shares at NAV (2) 19.46 -- -- 24.19% 10/10/03
Class C Shares with CDSC (4) 19.46 -- -- 24.19 10/10/03
Class I (f/k/a Class X) Shares at NAV -- -- -- 14.84 5/15/06
S&P 500(R) Index 11.97 6.82 7.65 Note 5 Note 5
MSCI EAFE(R) Index (Net) 21.07 16.42 8.07 Note 6 Note 6
ALL RETURNS REPRESENT PAST PERFORMANCE WHICH IS NO GUARANTEE OF FUTURE RESULTS.
CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE SHOWN. THE
INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. THE ABOVE TABLE AND GRAPH BELOW DO NOT REFLECT THE DEDUCTION OF TAXES THAT
A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF SHARES.
PLEASE VISIT PHOENIXFUNDS.COM FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT
MONTH-END.
1 TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE AND THE
REINVESTMENT OF BOTH DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS.
2 "NAV" (NET ASSET VALUE) TOTAL RETURNS DO NOT INCLUDE THE EFFECT OF ANY SALES
CHARGE.
3 "POP" (PUBLIC OFFERING PRICE) TOTAL RETURNS INCLUDE THE EFFECT OF THE MAXIMUM
FRONT-END 5.75% SALES CHARGE.
4 CDSC (CONTINGENT DEFERRED SALES CHARGE) IS APPLIED TO REDEMPTIONS OF CERTAIN
CLASSES OF SHARES THAT DO NOT HAVE A SALES CHARGE APPLIED AT THE TIME OF
PURCHASE. CDSC CHARGES FOR CERTAIN REDEMPTIONS OF CLASS A SHARES AND ALL
REDEMPTIONS OF CLASS C SHARES ARE 1% IN THE FIRST YEAR AND 0% THEREAFTER.
5 INDEX PERFORMANCE IS 12.13% FOR CLASS C SHARES (SINCE 10/10/03) AND 10.36% FOR
CLASS I SHARES (SINCE 5/15/06).
6 INDEX PERFORMANCE IS 21.34% FOR CLASS C SHARES (SINCE 10/10/03) AND 11.53% FOR
CLASS I SHARES (SINCE 5/15/06).
GROWTH OF $10,000 PERIODS ENDING 2/28
This Growth of $10,000 chart assumes an initial investment of $10,000 made on
2/28/97 in Class A shares. The total return for Class A shares reflects the
maximum sales charge of 5.75% on the initial investment. The performance of the
other share classes will be greater or less than that shown based on difference
in inception dates, fees and sales charges. Performance assumes dividends and
capital gain distributions are reinvested.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
Phoenix Foreign Opportunities Fund Class A MSCI EAFE INDEX (Net) S&P 500 Index
2/28/97 $9,425 $10,000 $10,000
2/27/98 11,098 11,548 13,503
2/26/99 11,491 12,120 16,186
2/29/00 17,072 15,204 18,106
2/28/01 12,494 12,546 16,608
2/28/02 9,323 10,165 15,025
2/28/03 8,544 8,390 11,617
2/27/04 12,420 12,885 16,096
2/28/05 15,665 15,293 17,216
2/28/06 19,083 17,956 18,662
2/28/07 22,974 21,739 20,896
For information regarding the indexes, see the glossary on page 3.
14
Phoenix Foreign Opportunities 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
Foreign Opportunities 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 or
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
Foreign Opportunities Fund Account Value Account Value During
Class A August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,107.10 $7.21
Hypothetical (5% return
before expenses) 1,000.00 1,017.87 6.93
*EXPENSES ARE EQUAL TO THE FUND'S CLASS A ANNUALIZED EXPENSE RATIO OF 1.38%,
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
Foreign Opportunities Fund Account Value Account Value During
Class C August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,102.50 $11.21
Hypothetical (5% return
before expenses) 1,000.00 1,014.00 10.79
*EXPENSES ARE EQUAL TO THE FUND'S CLASS C ANNUALIZED EXPENSE RATIO OF 2.15%,
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
Foreign Opportunities Fund Account Value Account Value During
Class I (f/k/a Class X) August 31, 2006 February 28, 2007 Period*
- ------------------ --------------- ----------------- -------------
Actual $1,000.00 $1,108.20 $5.96
Hypothetical (5% return
before expenses) 1,000.00 1,019.07 5.72
*EXPENSES ARE EQUAL TO THE FUND'S CLASS I ANNUALIZED EXPENSE RATIO OF 1.14%,
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 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.
15
Phoenix Foreign Opportunities Fund
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS 2/28/07
- --------------------------------------------------------------------------------
As a percentage of total investments
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC AS FOLLOWS:
United Kingdom 24%
Switzerland 13
Australia 7
Spain 7
India 7
Japan 7
Ireland 6
Other 29
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2007
SHARES VALUE
-------- ------------
FOREIGN COMMON STOCKS(c)--91.1%
AUSTRALIA--7.2%
Aristocrat Leisure Ltd. (Casinos & Gaming) .. 572,075 $ 7,572,376
Australia and New Zealand Banking Group Ltd.
(Diversified Banks) ......................... 390,075 9,005,041
Westfield Group (Real Estate Management &
Development) ................................ 504,779 8,650,297
Woolworths Ltd. (Food Retail) ............... 482,037 10,330,449
------------
35,558,163
------------
BELGIUM--3.5%
Colruyt SA (Food Retail) .................... 31,100 6,782,521
InBev N.V. (Brewers) ........................ 156,250 10,361,390
------------
17,143,911
------------
BRAZIL--2.4%
Banco Itau Holding Financieira SA Sponsored ADR
(Diversified Banks) ......................... 183,550 6,279,245
Souza Cruz SA (Tobacco) ..................... 297,100 5,394,176
------------
11,673,421
------------
FRANCE--2.5%
M6-Metropole Television SA (Broadcasting &
Cable TV) ................................... 144,475 5,129,641
SHARES VALUE
-------- ------------
FRANCE--CONTINUED
Total SA (Integrated Oil & Gas) ............. 88,975 $ 6,007,337
Total SA Sponsored ADR (Integrated Oil & Gas) 14,114 950,154
------------
12,087,132
------------
INDIA--4.0%
HDFC Bank Ltd. (Diversified Banks) .......... 52,600 1,110,807
HDFC Bank Ltd. ADR (Diversified Banks) ...... 172,775 11,467,077
Housing Development Finance Corp. ...........
(Consumer Finance) .......................... 208,400 7,094,543
------------
19,672,427
------------
IRELAND--6.3%
Allied Irish Banks plc (Diversified Banks) .. 167,975(f) 4,937,041
Allied Irish Banks plc (Diversified Banks) .. 27,825(g) 819,292
Anglo Irish Bank Corp. plc (Diversified Banks) 1,176,810 25,072,971
------------
30,829,304
------------
JAPAN--6.7%
Daito Trust Construction Co. Ltd.(Homebuilding) 117,500 5,695,887
Millea Holdings, Inc. (Property & Casualty
Insurance) .................................. 359,100 13,434,786
Toyota Motor Corp. (Automobile Manufacturers) 199,300 13,498,742
------------
32,629,415
------------
See Notes to Financial Statements
16
Phoenix Foreign Opportunities Fund
SHARES VALUE
-------- ------------
MEXICO--4.8%
America Movil S.A. de C.V (Wireless
Telecommunication Services) ................. 593,592 $ 1,297,329
America Movil S.A. de C.V. ADR Series L
(Wireless Telecommunication Services) ....... 272,150 11,920,170
Grupo Modelo S.A. de C.V. Series C (Brewers) 2,010,400 10,201,283
------------
23,418,782
------------
NETHERLANDS--1.8%
TNT N.V. (Air Freight & Logistics) .......... 209,050 8,993,748
NORWAY--2.3%
Orkla ASA (Industrial Conglomerates) ........ 174,950 11,382,341
SOUTH AFRICA--1.7%
Remgro Ltd. (Industrial Conglomerates) ...... 352,148 8,375,083
SOUTH KOREA--2.9%
Kangwon Land, Inc. (Casinos & Gaming)(b) .... 248,870 4,743,779
KT&G Corp. (Tobacco) ........................ 76,280 4,609,039
S1 Corp. (Diversified Commercial &
Professional Services) ...................... 117,230 4,680,735
------------
14,033,553
------------
SPAIN--7.1%
Banco Bilbao Vizcaya Argentaria SA
(Diversified Banks) ......................... 1,018,085 24,830,356
Enagas S.A. (Gas Utilities) ................. 206,913 4,717,877
Red Electrica de Espana (Electric Utilities) 119,925 5,459,360
------------
35,007,593
------------
SWITZERLAND--12.4%
Kuehne & Nagel International AG (Marine) .... 163,571 12,481,214
Lindt & Spruengli AG (Packaged Foods & Meats) 1,042 2,501,552
Nestle S.A. Registered Shares
(Packaged Foods & Meats) .................... 33,800 12,590,417
Novartis AG ADR (Pharmaceuticals) ........... 262,851 14,569,831
Roche Holding AG Registered Shares
(Pharmaceuticals) ........................... 104,150 18,577,461
------------
60,720,475
------------
SHARES VALUE
-------- ------------
TAIWAN--1.3%
Taiwan Semiconductor Manufacturing Co. Ltd. .
Sponsored ADR (Semiconductors) .............. 571,994 $ 6,349,131
UNITED KINGDOM--24.2%
Barrat Developments plc (Homebuilding) ...... 187,125 4,329,606
British American Tobacco plc (Tobacco) ...... 852,779 25,945,332
Diageo plc (Distillers & Vintners) .......... 693,975 13,691,943
Imperial Tobacco Group plc (Tobacco) ........ 377,465 15,717,514
Northern Rock plc (Thrifts & Mortgage Finance) 521,575 11,617,191
Reckitt Benckiser plc (Household Products) .. 199,202 10,031,896
Royal Bank of Scotland Group plc
(Diversified Banks) ......................... 286,764 11,315,555
Tesco plc (Food Retail) ..................... 3,065,516 26,011,096
------------
118,660,133
------------
- -------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $380,966,352) 446,534,612
- -------------------------------------------------------------------------
FOREIGN PARTICIPATION NOTES(c)--3.0%
INDIA--3.0%
CLSA Financial Product Ltd. - Bharti Tele-Ventures
Ltd. Strike price .000001 Indian Rupee, expiration
date 5/31/10 (Broadcasting & Cable TV)(b) ... 851,275 13,823,003
CLSA Financial Product Ltd. - HDFC Bank Ltd.
Class A Strike Price .000001 Indian Rupee,
expiration date 6/28/10 (Diversified Banks)(b) 50,520 1,066,932
- -------------------------------------------------------------------------
TOTAL FOREIGN PARTICIPATION NOTES
(IDENTIFIED COST $12,812,577) 14,889,935
- -------------------------------------------------------------------------
FOREIGN OPTIONS(c)--0.3%
Novartis AG-Registered Shares Call Option
exercise price 50 CHF, expiration date 12/18/09
(Pharmaceuticals)(e) ........................ 312 512,491
Roche Holdings AG-Registered Shares Call Option
exercise price 160 CHF, expiration date 12/18/09
(Pharmaceuticals)(e) ........................ 157 847,218
- -------------------------------------------------------------------------
TOTAL FOREIGN OPTIONS
(IDENTIFIED COST $1,418,622) 1,359,709
- -------------------------------------------------------------------------
TOTAL LONG TERM INVESTMENTS--94.4%
(IDENTIFIED COST $395,197,551) 462,784,256
- -------------------------------------------------------------------------
See Notes to Financial Statements
17
Phoenix Foreign Opportunities Fund
PAR
VALUE
(000) VALUE
-------- ------------
SHORT-TERM INVESTMENTS--5.8%
COMMERCIAL PAPER(d)--5.8%
Bank of America Corp. 5.25%, 3/1/07 ......... $ 4,570 $ 4,570,000
Clipper Receivables Co. LLC 5.33%, 3/1/07 ... 3,800 3,800,000
Lockhart Funding LLC 5.33%, 3/1/07 .......... 10,000 10,000,000
Sysco Corp. 5.26%, 3/1/07 ................... 4,215 4,215,000
Procter & Gamble Co. 5.24%, 3/5/07 .......... 5,672 5,668,698
- -------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER 28,253,698
- -------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $28,253,698) 28,253,698
- -------------------------------------------------------------------------
TOTAL INVESTMENTS--100.2%
(IDENTIFIED COST $423,451,249) 491,037,954(a)
Other assets and liabilities, net--(0.2)% (1,123,408)
------------
NET ASSETS--100.0% $489,914,546
============
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $64,959,790 and gross
depreciation of $1,020,335 for federal income tax purposes. At February 28,
2007, the aggregate cost of securities for federal income tax purposes was
$427,098,499.
(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 in the header, 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.
(e) Illiquid.
(f) Shares traded on London Exchange.
(g) Shares traded on Dublin Exchange.
See Notes to Financial Statements
18
Phoenix Foreign Opportunities Fund
INDUSTRY DIVERSIFICATION
AS A PERCENTAGE OF TOTAL VALUE OF
TOTAL LONG-TERM INVESTMENTS
(UNAUDITED)
Air Freight & Logistics 1.9%
Automobile Manufacturers 2.9
Brewers 4.4
Broadcasting & Cable TV 4.1
Casinos & Gaming 2.7
Consumer Finance 1.5
Distillers & Vintners 3.0
Diversified Banks 20.7
Diversified Commercial & Professional Services 1.0
Electric Utilities 1.2
Food Retail 9.3
Gas Utilities 1.0
Homebuilding 2.2
Household Products 2.2
Industrial Conglomerates 4.3
Integrated Oil & Gas 1.5
Marine 2.7
Packaged Foods & Meats 3.3
Pharmaceuticals 7.5
Property & Casualty Insurance 2.9
Real Estate Management & Development 1.8
Semiconductors 1.4
Thrifts & Mortgage Finance 2.5
Tobacco 11.2
Wireless Telecommunication Services 2.8
-----
100.0%
=====
See Notes to Financial Statements
19
Phoenix Foreign Opportunities Fund
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2007
ASSETS
Investment securities at value
(Identified cost $423,451,249) $491,037,954
Foreign currency at value
(Identified cost $72) 72
Cash 2,302
Receivables
Fund shares sold 11,797,617
Dividends 330,821
Investment securities sold 163,877
Tax reclaims 6,982
Unrealized appreciation on forward currency contracts 256,215
Prepaid expenses 43,851
Other assets 37,139
------------
Total assets 503,676,830
------------
LIABILITIES
Payables
Investment securities purchased 7,946,605
Fund shares repurchased 3,222,599
Investment advisory fee 332,960
Distribution and service fees 100,896
Transfer agent fee 44,042
Trustee deferred compensation plan 37,139
Administration fee 27,907
Foreign capital gain taxes 17,841
Trustees' fee 528
Dividend distributions 72
Other accrued expenses 81,623
Unrealized depreciation on forward currency contracts 1,950,072
------------
Total liabilities 13,762,284
------------
NET ASSETS $489,914,546
============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $430,715,507
Distributions in excess of net investment income (1,462,682)
Accumulated net realized gain (loss) (5,170,552)
Net unrealized appreciation 65,832,273
------------
NET ASSETS $489,914,546
============
CLASS A
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization (Net Assets $360,822,199) 14,433,765
Net asset value per share $25.00
Offering price per share $25.00 /(1-5.75%) $26.53
CLASS C
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization (Net Assets $45,154,297) 1,816,847
Net asset value and offering price per share $24.85
CLASS I (F/K/A CLASS X)
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization (Net Assets $83,938,050) 3,358,084
Net asset value and offering price per share $25.00
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 2007
INVESTMENT INCOME
Dividends $ 5,227,735
Interest 823,853
Foreign taxes withheld (431,188)
-----------
Total investment income 5,620,400
-----------
EXPENSES
Investment advisory fee 2,210,068
Service fees, Class A 497,461
Distribution and service fees, Class C 162,756
Administration fee 148,400
Financial agent fee 36,379
Transfer agent 270,427
Custodian 143,904
Printing 100,012
Registration 57,976
Professional 37,797
Trustees 34,124
Miscellaneous 18,479
-----------
Total expenses 3,717,783
Less expenses reimbursed by investment adviser (145,109)
Custodian fees paid indirectly (3,604)
-----------
Net expenses 3,569,070
-----------
NET INVESTMENT INCOME (LOSS) 2,051,330
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 23,320,180
Net realized gain (loss) on foreign currency transactions (1,663,713)
Net change in unrealized appreciation (depreciation)
on investments 23,189,748
Net change in unrealized appreciation (depreciation)
on foreign currency translation (1,901,206)
-----------
NET GAIN (LOSS) ON INVESTMENTS 42,945,009
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $44,996,339
===========
See Notes to Financial Statements
20
Phoenix Foreign Opportunities Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
February 28, 2007 February 28, 2006
----------------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 2,051,330 $ 1,294,045
Net realized gain (loss) 21,656,467 10,027,567
Net change in unrealized appreciation (depreciation) 21,288,542 9,995,840
------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 44,996,339 21,317,452
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A (1,512,542) (871,892)
Net investment income, Class C (45,520) (25,564)
Net investment income, Class I (f/k/a Class X) (499,259) --
Net investment income, Investor Class -- (399,218)
Net investment income, Class I -- (7,243)
Net realized short-term gains, Class A (800,360) (207,392)
Net realized short-term gains, Class C (56,216) (4,051)
Net realized short-term gains, Class I (f/k/a Class X) (249,367) --
Net realized short-term gains, Investor Class -- --
Net realized short-term gains, Class I -- --
Net realized long-term gains, Class A (4,376,890) (6,508,637)
Net realized long-term gains, Class C (388,207) (188,273)
Net realized long-term gains, Class I (f/k/a Class X) (1,109,596) --
Net realized long-term gains, Investor Class -- (442,517)
Net realized long-term gains, Class I -- (8,447)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (9,037,957) (8,663,234)
------------ ------------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from sales of shares (9,887,380 and 2,318,218 shares, respectively) 239,920,974 46,486,488
Net asset value of shares issued from reinvestment of distributions
(270,015 and 360,787 shares, respectively) 6,284,602 7,217,681
Proceeds from shares issued in conjunction with Plan of Reorganization (574,941 and
0 shares, respectively) (See Note 12) 12,673,037 --
Proceeds from shares issued in connection with reclassification from Investor Class
Shares (0 and 4,306,343 shares, respectively) (See Note 12) -- 80,965,935
Proceeds from shares issued in connection with reclassification from Class I
Shares (0 and 91,955 shares, respectively) (See Note 12) -- 1,721,837
Cost of shares repurchased (2,306,245 and 1,211,883 shares, respectively) (54,482,190) (24,121,399)
------------ ------------
Total 204,396,423 112,270,542
------------ ------------
CLASS C
Proceeds from sales of shares (1,512,251 and 285,073 shares, respectively) 36,932,314 5,795,380
Net asset value of shares issued from reinvestment of distributions
(15,001 and 4,622 shares, respectively) 344,090 92,407
Proceeds from shares issued in conjunction with Plan of Reorganization (66,354 and 0
shares, respectively) (See Note 12) 1,457,044 --
Cost of shares repurchased (57,864 and 10,635 shares, respectively) (1,350,669) (215,081)
------------ ------------
Total 37,382,779 5,672,706
------------ ------------
CLASS I (F/K/A CLASS X)
Proceeds from sales of shares (1,408,560 and 0 shares, respectively) 34,448,164 --
Net asset value of shares issued from reinvestment of distributions
(46,128 and 0 shares, respectively) 1,064,555 --
Proceeds from shares issued in conjunction with Plan of Reorganization (2,113,337 and 0
shares, respectively) (See Note 12) 46,590,175 --
Cost of shares repurchased (209,941 and 0 shares, respectively) (4,936,648) --
------------ ------------
Total 77,166,246 --
------------ ------------
INVESTOR CLASS
Proceeds from sales of shares (0 and 799,723 shares, respectively) -- 15,039,510
Net asset value of shares issued from reinvestment of distributions
(0 and 45,107 shares, respectively) -- 826,824
Cost of shares repurchased (0 and 1,493,484 shares, respectively) -- (27,521,385)
Value of shares liquidated in connection with reclassification to Class A Shares (0
and 4,313,582 shares, respectively) (See Note 12) -- (80,965,935)
------------ ------------
Total -- (92,620,986)
------------ ------------
CLASS I
Proceeds from sales of shares (0 and 4,363 shares, respectively) -- 82,848
Net asset value of shares issued from reinvestment of distributions
(0 and 558 shares, respectively) -- 10,228
Cost of shares repurchased (0 and 970 shares, respectively) -- (17,920)
Value of shares liquidated in connection with reclassification to Class A Shares (0
and 91,733 shares, respectively) (See Note 12) -- (1,721,837)
------------ ------------
Total -- (1,646,681)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 318,945,448 23,675,581
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 354,903,830 36,329,799
NET ASSETS
Beginning of period 135,010,716 98,680,917
------------ ------------
END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
OF $(1,462,682) AND $(323,099), RESPECTIVELY) $489,914,546 $135,010,716
============ ============
See Notes to Financial Statements
21
Phoenix Foreign Opportunities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
----------------------------------------------------------------------------
FOR THE PERIOD
YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 TO YEAR ENDED DECEMBER 31,
------------------------------ FEBRUARY 29, --------------------------
2007 2006 2005 2004 2003 2002
Net asset value, beginning of period $21.47 $19.02 $15.47 $14.84 $11.86 $12.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.21(6) 0.17(6) 0.16 (0.03) 0.12 0.03
Net realized and unrealized gain (loss) 4.08 3.85 3.81 0.66 3.39 (1.05)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 4.29 4.02 3.97 0.63 3.51 (1.02)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.17) (0.22) (0.16) -- (0.06) --
Distributions from net realized gains (0.59) (1.35) (0.26) -- (0.43) --
Tax return of capital -- -- -- -- (0.06) --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.76) (1.57) (0.42) -- (0.55) --
------ ------ ------ ------ ------ ------
Payment by affiliate(3) -- -- --(2) -- 0.02 --
------ ------ ------ ------ ------ ------
Change in net asset value 3.53 2.45 3.55 0.63 2.98 (1.02)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $25.00 $21.47 $19.02 $15.47 $14.84 $11.86
====== ====== ====== ====== ====== ======
Total return(1) 20.39% 21.82% 26.15%(3) 4.25%(5) 30.07% (7.92)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $360,822 $128,991 $2,714 $1,482 $1,473 $29,026
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.37% 1.25% 1.25% 1.25%(4) 2.87% 2.44 %
Gross operating expenses 1.43% 1.62% 2.10% 2.63%(4) 3.21% 2.44 %
Net investment income (loss) 0.88% 0.85% 1.50% 0.18%(4) 0.11% 0.18 %
Portfolio turnover 57% 52% 32% 41%(4) 65% 98 %
CLASS C
-----------------------------------------------------------------
FOR THE PERIOD FROM INCEPTION
YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 TO OCTOBER 10, 2003
------------------------------ FEBRUARY 29, TO DECEMBER 31,
2007 2006 2005 2004 2003
Net asset value, beginning of period $21.41 $19.11 $15.55 $14.95 $13.91
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.01)(6) (0.06)(6) 0.01 (0.06) 0.11
Net realized and unrealized gain (loss) 4.11 3.92 3.84 0.66 1.34
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 4.10 3.86 3.85 0.60 1.45
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.07) (0.21) (0.03) -- --
Distributions from net realized gains (0.59) (1.35) (0.26) -- (0.43)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.66) (1.56) (0.29) -- (0.43)
------ ------ ------ ------ ------
Payment by affiliate(3) -- -- --(2) -- 0.02
------ ------ ------ ------ ------
Change in net asset value 3.44 2.30 3.56 0.60 1.04
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $24.85 $21.41 $19.11 $15.55 $14.95
====== ====== ====== ====== ======
Total return(1) 19.46 % 20.96 % 25.21%(3) 4.01 %(5) 10.71 %(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $45,154 $6,019 $39 $12 $11
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.13 % 2.00 % 2.00% 2.00 %(4) 1.92 %(4)
Gross operating expenses 2.17 % 2.35 % 2.86%(4) 3.38 %(4) 5.85 %(4)
Net investment income (loss) (0.06)% (0.29)% 0.76% (1.05)%(4) (0.14)%(4)
Portfolio turnover 57 % 52 % 32% 41 %(4) 65 %(4)
(1) Sales charges are not reflected in total return calculation.
(2) Amount is less than $0.01.
(3) Payment by affiliate. See Note 3 in the Notes to Financial Statements.
(4) Annualized.
(5) Not annualized.
(6) Computed using average shares outstanding.
See Notes to Financial Statements
22
Phoenix Foreign Opportunities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS I
(f/k/a Class X)
--------------------
FROM INCEPTION
MAY 15, 2006 TO
FEBRUARY 28, 2007
Net asset value, beginning of period $22.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(1) 0.13
Net realized and unrealized gain (loss) 3.14
------
TOTAL FROM INVESTMENT OPERATIONS 3.27
------
LESS DISTRIBUTIONS
Dividends from net investment income (0.22)
Distributions from net realized gains (0.59)
------
TOTAL DISTRIBUTIONS (0.81)
------
Change in net asset value 2.46
------
NET ASSET VALUE, END OF PERIOD $25.00
======
Total return 14.84%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $83,938
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.13%(2)
Gross operating expenses 1.17%(2)
Net investment income (loss) 0.71%(2)
Portfolio turnover 57%(3)
(1) Computed using average shares outstanding.
(2) Annualized.
(3) Not annualized.
See Notes to Financial Statements
23
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007
1. ORGANIZATION
Phoenix Adviser Trust (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, two Funds are offered for sale (each a "Fund"). The Phoenix
Focused Value Fund ("Focused Value Fund") is non-diversified and seeks long-term
capital appreciation. The Phoenix Foreign Opportunities Fund ("Foreign
Opportunities Fund") is diversified and seeks long-term capital appreciation.
The Funds offer the following classes of shares for sale:
Class A Class C Class I
------- ------- -------
Focused Value Fund X X --
Foreign Opportunities 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 C shares are sold with a 1% contingent deferred sales charge if
redeemed within one year of purchase. Class I shares (prior to January 5, 2007
formerly known as Class X 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 Funds' 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.
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 they invest.
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 ("FIN 48"), "Accounting for Uncertainty
24
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (CONTINUED)
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 beginning 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. FORWARD CURRENCY CONTRACTS:
Each Fund may enter into forward currency contracts in conjunction with the
planned purchase or sale of foreign denominated securities in order to hedge the
U.S. dollar cost or proceeds. Forward currency contracts involve, to varying
degrees, elements of market risk in excess of the amount recognized in the
Statement of Assets and Liabilities. Risks arise from the possible movements in
foreign exchange rates or if the counterparty does not perform under the
contract.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any number of days from the
date of the contract agreed upon by the parties, at a price set at the time of
the contract. These contracts are traded directly between currency traders and
their customers. The contract is marked-to-market daily and the change in market
value is recorded by each Fund as an unrealized gain or loss. When the contract
is closed or offset with the same counterparty, the Fund records a realized gain
or loss equal to the change in the value of the contract when it was opened and
the value at the time it was closed or offset. At February 28, 2007, the Foreign
Opportunities Fund had entered into forward currency contracts as follows:
Net
Unrealized
Contract In Exchange Settlement Appreciation
to Sell for Date Value (Depreciation)
- ------------------ ----------------- --------- ----------- --------------
AUD 14,560,000 USD 11,338,309 6/21/07 $11,435,117 $ (96,808)
AUD 7,800,000 USD 6,058,885 6/21/07 6,125,956 (67,071)
CHF 24,000,000 USD 19,689,400 7/09/07 19,914,059 (224,659)
CHF 14,800,000 USD 12,047,213 7/09/07 12,280,337 (233,124)
EUR 19,600,000 USD 25,660,321 7/09/07 26,072,435 (412,114)
EUR 12,583,000 USD 16,388,100 7/09/07 16,738,237 (350,137)
GBP 16,900,000 USD 32,606,018 7/09/07 33,170,601 (564,583)
ZAR 9,135,000 USD 1,240,410 3/05/08 1,211,930 28,480
ZAR 9,135,000 USD 1,238,929 3/05/08 1,211,930 26,999
ZAR 16,117,320 USD 2,407,726 5/29/07 2,206,990 200,736
ZAR 165,000 USD 21,018 5/29/07 22,594 (1,576)
-----------
$(1,693,857)
===========
AUD Australian Dollar GBP Pound Sterling
CHF Swiss Francs USD United States Dollar
EUR Euro ZAR South African Rand
25
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (CONTINUED)
I. OPTIONS:
Certain Funds may write covered options or purchase options contracts for the
purpose of hedging against changes in the market value of the underlying
securities or foreign currencies. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. Gains and losses on written
options are reported separately in the Statement of Operations. When a written
option is exercised, the proceeds on sales or amounts paid are adjusted by the
amount of premium received. Options written are reported as a liability in the
Statement of Assets and Liabilities and subsequently marked-to-market to reflect
the current value of the option. The risk associated with written options is
that the change in value of options contracts may not correspond to the change
in value of the hedged instruments. In addition, losses may arise from changes
in the value of the underlying instruments, or if a liquid secondary market does
not exist for the contracts.
Certain Funds may purchase options which are included in the Trust's
Schedules of Investments and subsequently marked-to-market to reflect the
current value of the option. When a purchased option is exercised, the cost of
the security is adjusted by the amount of premium paid. The risk associated with
purchased options is limited to the premium paid.
J. PARTICIPATION NOTES:
Each Fund may invest in participation notes. The Fund purchases the notes
from a broker, who in turn purchases shares in the local market and issues a
call note hedged on the underlying holding. If the Fund exercises its call and
closes its position, the shares are sold and the note redeemed with the
proceeds. Each note represents one share of the underlying stocks, therefore the
price, performance and liquidity of the note are all directly linked to the
underlying stock. The notes can be redeemed for 100% of the value of the
underlying stock, less transaction costs. In addition to the market risk of the
underlying holding, the Fund bears additional counterparty risk to the issuing
broker.
3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
As compensation for its services to the Trust, 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:
Focused Value Fund ................................. 0.75%
Foreign Opportunities Fund ......................... 0.85%
Vontobel Asset Management, Inc. ("Vontobel") is the subadviser to the Funds.
For the period March 1, 2006 through March 31, 2006, PIC had contractually
agreed to limit each Fund's operating expenses to the extent that such expenses
exceeded the following percentages of average annual net assets:
Class A Class C
-------- --------
Focused Value Fund .................... 1.15% 1.90%
Foreign Opportunities Fund ............ 1.25% 2.00%
Effective April 1, 2006, the Adviser has contractually agreed to limit total
fund operating expenses, (excluding interest, taxes, and extraordinary
expenses), through June 30, 2008, so that such expenses do not exceed the
following percentages of the average annual net asset values of each Fund:
Class A Class C Class I
------- ------- -------
Focused Value Fund .............. 1.25% 2.00% --
Foreign Opportunities Fund ...... 1.35% 2.10% 1.10%
The Adviser will not seek to recapture any reimbursed expenses under these
agreements, unless authorized by the Funds' Board of Trustees.
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 fiscal
year (the "period") ended February 28, 2007, as follows:
Class A Class C
Net Selling Deferred
Commissions Sales Charges
----------- -------------
Focused Value Fund ............... $ 1,505 $ 266
Foreign Opportunities Fund ....... 122,183 8,230
In addition, each Fund pays PEPCO distribution and/or service fees at an
annual rate of 0.25% for Class A 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.
Effective July 1, 2006, 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.
Until June 30, 2006, PEPCO served as Financial Agent to the Trust. PEPCO
received a financial agent fee equal to the sum of (1) the documented cost to
PEPCO to provide oversight of the performance of PFPC Inc. (subagent to PEPCO),
plus (2) the documented cost of
26
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (CONTINUED)
fund accounting, tax services and related services provided by PFPC Inc. For the
period ended February 28, 2007, the Trust incurred administration and/or
financial agent fees totaling $234,117.
PEPCO serves as the Trust's transfer agent with Boston Financial Data
Services, Inc. serving as sub transfer agent. For the year ended February 28,
2007, transfer agent fees were $360,532 as reported in the Statements of
Operations, of which PEPCO retained the following:
Transfer
Agent
Retained
------------
Focused Value Fund ........................... $ 34,882
Foreign Opportunities Fund ................... 111,669
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
------ ------------
Foreign Opportunities Fund
Class A ......................... 475,678 $11,891,950
Class C ......................... 645 16,028
During the fiscal year ended February 28, 2005, Janus Services reimbursed the
Focused Value Fund - Investor Shares $585 and International Equity Fund -
Investor Shares $1,210, as a result of dilutions caused by incorrectly processed
shareholder activity. The effect of this activity would have reduced total
return by less than 0.01% for the Foreign Opportunities Fund and had no impact
on the Focused Value Fund.
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 elect 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, short-term securities options, and forward currency contracts)
during the period ended February 28, 2007, were as follows:
Purchases Sales
--------- -----
Focused Value Fund ................... $ 16,710,105 $ 24,030,869
Foreign Opportunities Fund ........... 368,366,873 141,280,431
There were no purchases or sales of long-term U.S. Government and agency
securities.
5. CREDIT RISK AND ASSET CONCENTRATIONS
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.
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.
At February 28, 2007, the Focused Value Fund held securities issued by
various companies in the financial and consumer staples sectors comprising 37%
and 29%, respectively, of the 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. 10% SHAREHOLDERS
As of February 28, 2007, the Funds had individual shareholder accounts and/or
omnibus shareholder accounts (which are comprised of a group of individual
shareholders), which individually amounted to more than 10% of the total shares
outstanding of the fund as detailed below:
% of Shares Number of
Outstanding Accounts
----------- --------
Focused Value Fund* .................. 39.8% 2
Foreign Opportunities Fund ........... 18.2 1
The shareholders are not affiliated with PNX.
* 1 account representing 15.13% of the shares outstanding are held by Bank
Vontobel Holding AG, an affiliate of Vontobel Holding AG, which wholly owns
Vontobel Asset Management, Inc., the Subadviser to the Trust.
27
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (CONTINUED)
8. 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.
9. 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.
10. FEDERAL INCOME TAX INFORMATION
The Funds have capital loss carryovers, which may be used to offset future
capital gains:
Expiration Year
---------------------------------------
2009 2010 Total
--------- -------- -----------
Foreign Opportunities Fund(1) .... ... $2,598,305 $5,127,117 $7,725,422
(1)Utilization of this capital loss carryover is subject to annual
limitations.
The Fund may not realize the benefit of these losses to the extent the Fund
does not realize gains on investments prior to the expiration of the capital
loss carryovers.
For the period ended February 28, 2007, the Funds utilized losses deferred in
prior years against current year capital gains as follows:
Focused Value Fund ................... $ --
Foreign Opportunities Fund ........... 15,298,506
Under current tax law, foreign currency and capital losses realized after
October 31 may be deferred and treated as occurring on the first day of the
following fiscal year. For the period ended February 28, 2007, the Funds
deferred and recognized post-October losses as follows:
Currency
Deferred
-----------
Foreign Opportunities Fund ........... $409,286
The components of distributable earnings on a tax basis (excluding unrealized
appreciation (depreciation) which is disclosed in the Schedules of Investments)
consist of undistributed ordinary income and undistributed long-term capital
gains as follows:
Undistributed Undistributed
Ordinary Long-Term
Income Capital Gains
------------- -------------
Focused Value Fund ......................... $ 467,942 $277,522
Foreign Opportunities Fund ................. 2,464,487 992,528
The differences between the book and tax basis components of distributable
earnings relate principally to the timing of recognition of income and gains for
federal income tax purposes. Short-term gain distributions reported in the
Statements of Changes in Net Assets, if any, are reported as ordinary income for
federal tax purposes.
11. RECLASSIFICATION OF CAPITAL ACCOUNTS
For financial reporting purposes, book basis capital accounts are adjusted to
reflect the tax character of permanent book/tax differences. Permanent
reclassifications can arise from differing treatment of certain income and gain
transactions, nondeductible current year net operating losses, expiring capital
loss carryovers and investments in passive foreign investment companies. The
reclassifications have no impact on the net assets or net asset value of the
Funds. As of February 28, 2007, the following Funds recorded reclassifications
to increase (decrease) the accounts as listed below:
Capital Paid
in on
Shares of Accumulated Undistributed
Beneficial Net Realized Net Investment
Interest Gain (Loss) Income (Loss)
------------ ------------ --------------
Focused Value Fund $ -- $ -- $ --
Foreign Opportunities Fund 17,927,222 (16,793,630) (1,133,592)
28
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2007 (CONTINUED)
12. MERGER AND FUND INTEGRATION
On May 22, 2006, the Foreign Opportunities Fund acquired all of the net
assets of the Phoenix Overseas Fund ("Overseas Fund") of the Phoenix Asset Trust
pursuant to an Agreement and Plan of Reorganization approved by the Overseas
Fund's Board of Trustees on February 16, 2006. The acquisition was accomplished
by a tax-free exchange of 2,113,337 Class I (f/k/a Class X) shares, 574,941
Class A shares, and 66,354 Class C shares of the Foreign Opportunities Fund
outstanding on May 19, 2006 (valued at $46,590,175, $12,673,037 and $1,457,044,
respectively) for 3,026,931 Class I (f/k/a Class X) shares, 788,867 Class A
shares, 38,630 Class B shares and 95,679 Class C shares of the Overseas Fund
outstanding on May 19, 2006. The Overseas Fund had net assets on that date of
$60,720,256 including $17,640,290 of net appreciation, which were combined with
those of the Foreign Opportunities Fund. The aggregate net assets of Foreign
Opportunities Fund immediately after the merger were $208,971,708. The
shareholders of each Class of the Overseas Fund received for each share owned
approximately 0.70, 0.69 and 0.69 shares, respectively, for Class I (f/k/a Class
X), Class A, and Class C shares of the same class of the Foreign Opportunities
Fund. At the time of the merger all Class B shares of the Overseas Fund were
converted to Class A shares. As a result each Class B shareholder of Overseas
Fund received 0.69 of Class A shares of the Foreign Opportunities Fund.
At a meeting held on March 24, 2005, the Board of Trustees (the "Janus
Board") of the Focused Value Fund and the International Equity Fund (each a
"Janus Fund" and collectively, the "Janus Funds"), each a series of Janus
Adviser Trust (the "Janus Trust") voted to approve a transaction (the
"Transaction") whereby the Janus Trust and Janus Funds would be integrated into
the Phoenix Investment Partners, Ltd., family of mutual funds (the "Phoenix
Funds").
In connection with the Transaction, at a special meeting held on May 17,
2005, shareholders of the Janus Funds approved a new investment advisory
agreement with PIC and the continuation of Vontobel as subadviser, pursuant to a
new investment subadvisory agreement between PIC and Vontobel. Also, in
connection with the Transaction, shareholders approved the reconstitution of the
Janus Board with a new slate of trustees comprised of fourteen trustees of the
Phoenix Funds.
The Transaction was completed on June 20, 2005 and the names of Focused Value
Fund and International Equity Fund changed to Phoenix Focused Value Fund and
Phoenix Foreign Opportunities Fund, respectively. Additionally, the Janus Trust
was renamed the Phoenix Adviser Trust.
Pursuant to the Transaction, on June 20, 2005, Janus Fund shareholders who
held Class A and Class C shares remained in the same class of shares of either
the Phoenix Focused Value Fund or the Phoenix Foreign Opportunities Fund, as
applicable. Janus Fund shareholders who held Investor shares or Class I shares
had those shares converted to Class A shares of either the Phoenix Focused Value
Fund or the Phoenix Foreign Opportunities Fund, as applicable. Janus Fund
shareholders who held Investor shares or Class I shares that were converted to
Class A shares may continue, as long as such shares are held, to purchase Class
A shares without any sales charges.
13. OTHER
Effective January 5, 2007, Class X shares offered by the Phoenix Foreign
Opportunities Fund, a series of Phoenix Adviser Trust were renamed to Class I
shares. The fee structure for Class I shares is identical to that of the former
Class X shares.
14. SUBSEQUENT EVENT
The Board of Trustees of the Phoenix Insight Funds Trust (the "Board") has
unanimously approved an Agreement and Plan of Reorganization ("Agreement")
relating to the proposed combination of the Phoenix Insight International Fund,
a series of Phoenix Insight Funds Trust with and into the Phoenix Foreign
Opportunities Fund, a series of Phoenix Adviser Trust. The Phoenix Insight
International Fund will transfer all or substantially all of its assets to the
Phoenix Foreign Opportunities Fund in exchange for shares of the Phoenix Insight
International Fund and the assumption by the Phoenix Foreign Opportunities Fund
of all liabilities of the Phoenix Insight International Fund. Following the
exchange, the Phoenix Insight International Fund will distribute the shares of
the Phoenix Foreign Opportunities Fund to its shareholders pro rata, in
liquidation of the Phoenix Insight International Fund. The merger took place on
April 13, 2007.
- --------------------------------------------------------------------------------
TAX INFORMATION NOTICE (UNAUDITED)
For the fiscal year ended February 28, 2007, for federal income tax
purposes, 57.4% of the ordinary income dividends earned by the Focused Value
Fund qualify for the dividends received deduction for corporate shareholders.
For the fiscal year ended February 28, 2007, the Focused Value Fund and
Foreign Opportunities Fund hereby designate 70.3% and 100%, respectively, or
the maximum amount allowable, of its ordinary income dividends to qualify for
the lower tax rates applicable to individual shareholders. The actual
percentage for the calendar year will be designated in the year-end tax
statements.
For the fiscal year ended February 28, 2007, the Funds designated long-term
capital gains dividends as follows:
Focused Value Fund ..................... $2,702,489
Foreign Opportunities Fund ............. 5,468,195
- --------------------------------------------------------------------------------
29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
[GRAPHIC OMITTED]
PRICEWATERHOUSECOOPERS
To the Board of Trustees of
Phoenix Adviser Trust and Shareholders of
Phoenix Focused Value Fund and
Phoenix Foreign Opportunities Fund
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Phoenix Focused Value Fund and
Phoenix Foreign Opportunities Fund (constituting Phoenix Adviser Trust,
hereafter referred to as the "Trust") at February 28, 2007, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for the periods ended December 31, 2003, February 29, 2004, February
28, 2005, February 28, 2006, and February 28, 2007 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at February 28, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The financial highlights for each Fund for the period ended
December 31, 2002 were audited by other independent accountants whose report
dated February 14, 2003, expressed an unqualified opinion on those statements.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
April 23, 2007
30
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AGREEMENT
FOR PHOENIX FOCUSED 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 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 Vontobel Asset Management, Inc. (the "Subadvisor"). Pursuant to the Advisory
Agreement, PIC provides advisory services to the Fund. Pursuant to the
Subadvisory Agreement, effective June 20, 2005, 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 Fund's 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, 5 and 10 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 outperformed its benchmark for
the 1, 5 and 10 year periods, but had underperformed its benchmark for the year
to date and the 3 year periods. While the Fund had been underperforming
recently, Management noted this was not unexpected because the Fund was a
contrarian fund and had a concentrated portfolio. The Board was satisfied with
this explanation and the portfolio manager's approach to investing, noting the
Fund had the same portfolio manager as when it was launched. The Board concluded
that it was reasonable to approve the Advisory Agreement in view of Management's
explanation of 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
31
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AGREEMENT
FOR PHOENIX FOCUSED VALUE FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
producing different results. In this regard, the Board noted that the allocation
appeared reasonable. The Board also noted the fee waiver 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 due to expense
caps, and that the management fee was lower than 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.
ECONOMIES OF SCALE. The Board noted that expense caps were in place for the
Fund. The Board also noted that it was likely that PIC and the Fund would
achieve certain economies of scale as the assets grew. 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 manager in managing other
accounts. In this regard, the Board noted that the portfolio manager had over 18
years of experience in the investment management business. The Board also
considered the Subadvisor's experience in managing over $4 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, 3, 5 and 10
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 outperformed its
benchmark for the 1, 5 and 10 year periods, but had underperformed its benchmark
for the year to date and the 3 year periods. Despite the swings in the Fund's
performance, the Board determined the overall performance was acceptable.
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.
32
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AGREEMENT
FOR PHOENIX FOREIGN OPPORTUNITIES 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 Vontobel Asset Management, Inc. (the "Subadvisor"). Pursuant to the Advisory
Agreement, PIC provides advisory services to the Fund. Pursuant to the
Subadvisory Agreement, effective June 20, 2005, 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 Fund's 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, 5 and 10 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 outperformed its relevant market
index for all periods, while also ranking high among its peer group for all
periods, and the Board concluded that the Fund's performance was reasonable.
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 fee waiver
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
33
BOARD OF TRUSTEES' CONSIDERATION OF INVESTMENT ADVISORY AGREEMENT
FOR PHOENIX FOREIGN OPPORTUNITIES FUND (THE "FUND")
FEBRUARY 28, 2007 (UNAUDITED) (CONTINUED)
noted that the total expenses of the Fund were less than the average total
expenses for comparable funds, and that the management fee was lower than 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.
ECONOMIES OF SCALE. The Board noted that it was likely that PIC and the Fund
would achieve certain economies of scale as the assets grew. 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 manager in managing other
accounts. In this regard, the Board noted that the portfolio manager had over 12
years of experience in the investment management business with the Subadvisor.
The Board also considered the Subadvisor's experience in managing over $4
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 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, 5 and 10 year
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 benchmark and the Lipper peer group average for its
investment style for the 1, 3, 5, 10 and year to date 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.
34
RESULTS OF SHAREHOLDER MEETING
PHOENIX ADVISER TRUST
OCTOBER 31, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Adviser Trust (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 ............................... 184,988,673 3,323,612
Harry Dalzell-Payne ............................ 184,968,150 3,344,135
Daniel T. Geraci ............................... 185,039,505 3,272,780
Francis E. Jeffries ............................ 184,982,536 3,329,750
Leroy Keith, Jr. ............................... 185,064,437 3,247,848
Marilyn E. LaMarche ............................ 185,056,244 3,256,041
Philip R. McLoughlin ........................... 185,064,162 3,248,123
Geraldine M. McNamara .......................... 185,124,965 3,187,321
James M. Oates ................................. 185,055,972 3,256,314
Richard E. Segerson ............................ 185,063,881 3,248,404
Ferdinand L.J. Verdonck ........................ 185,042,223 3,270,062
FOR AGAINST ABSTAIN
---- --------- ---------
2. To ratify the appointment of
PricewaterhouseCoopers LLC as the independent
registered public accounting firm .............. 184,039,926 1,331,549 2,940,811
35
RESULTS OF SHAREHOLDER MEETING
PHOENIX FOCUSED VALUE FUND
NOVEMBER 21, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Focused Value Fund (the
"Fund"), a series of Phoenix Adviser Trust (the "Trust") held on November 21,
2006, shareholders voted on the following proposals:
1. To approve a proposal to amend the fundamental investment restrictions
of the funds of the Phoenix Adviser Trust to conform to the standard
fundamental investment restrictions of the Phoenix Funds. (Proposal 5)
5.a. Investment of more than 25% of assets in companies engaged in one
industry
5.b. Limits on borrowing
5.c. Issuance of senior securities
5.d. Underwriting activities
5.e. Purchase and sale of real estate
5.f. Limits on lending
NUMBER OF ELIGIBLE UNITS VOTED:
FOR AGAINST ABSTAIN BROKER NON-VOTES
--- ------- ------- ----------------
1. To amend the fundamental investment
restrictions of the funds of the Phoenix
Adviser Trust to conform to the standard
fundamental investment restrictions of the
Phoenix Funds.
a. Investment of more than 25% of assets in
companies engaged in one industry ........... 1,621,857 71,768 95,674 330,531
b. Limits on borrowing ......................... 1,619,744 62,387 107,168 330,531
c. Issuance of senior securities ............... 1,628,015 57,395 103,889 330,531
d. Underwriting activities ..................... 1,610,300 69,860 109,139 330,531
e. Purchase and sale of real estate ............ 1,617,565 71,214 100,520 330,531
f. Limits on lending ........................... 1,567,195 107,234 114,871 330,531
36
RESULTS OF SHAREHOLDER MEETING
PHOENIX FOREIGN OPPORTUNITIES FUND
NOVEMBER 21, 2006
(UNAUDITED)
At a special meeting of shareholders of Phoenix Foreign Opportunities Fund
(the "Fund"), a series of Phoenix Adviser Trust (the "Trust") held on November
21, 2006, shareholders voted on the following proposals:
1. To approve a proposal to amend the fundamental investment restrictions
of the funds of the Phoenix Adviser Trust to conform to the standard
fundamental investment restrictions of the Phoenix Funds. (Proposal 5)
5.a. Investment of more than 25% of assets in companies engaged in one
industry
5.b. Limits on borrowing
5.c. Issuance of senior securities
5.d. Underwriting activities
5.e. Purchase and sale of real estate
5.f. Limits on lending
NUMBER OF ELIGIBLE UNITS VOTED:
FOR AGAINST ABSTAIN BROKER NON-VOTES
--- ------- ------- ----------------
1. To amend the fundamental investment
restrictions of the funds of the Phoenix
Adviser Trust to conform to the standard
fundamental investment restrictions of the
Phoenix Funds. (Proposal 5)
a. Investment of more than 25% of assets in
companies engaged in one industry ........... 5,788,484 124,514 93,584 1,058,787
b. Limits on borrowing ......................... 5,855,820 69,461 81,302 1,058,787
c. Issuance of senior securities ............... 5,808,658 83,555 114,370 1,058,787
d. Underwriting activities ..................... 5,826,009 74,933 105,641 1,058,787
e. Purchase and sale of real estate ............ 5,435,828 475,226 95,528 1,058,787
f. Limits on lending ........................... 5,836,697 82,653 87,232 1,058,787
37
FUND MANAGEMENT TABLES (UNAUDITED)
Information pertaining to the Trustees and officers of the Trust as of
February 28, 2007, is set forth below. The statement of additional information
(SAI) includes additional information about the Trustees and is available
without charge, upon request, by calling (800) 243-4361.
The address of each individual, unless otherwise noted, is 56 Prospect
Street, Hartford, CT 06115-0480. There is no stated term of office for Trustees
of the Trust.
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
E. Virgil Conway Served since 62 Chairman, Rittenhouse Advisors, LLC (consulting firm) (2001-present).
Rittenhouse Advisors, LLC 2005. Trustee/Director, Phoenix Funds Complex (1983-present).
101 Park Avenue Trustee/Director, Realty Foundation of New York (1972-present),
New York, NY 10178 Josiah Macy, Jr. Foundation (Honorary) (2004-present), Pace
DOB: 8/2/29 University (Director/Trustee Emeritus) (2003-present), Greater New
York Councils, Boy Scouts of America (1985-present), The Academy of
Political Science (Vice Chairman) (1985-present), Urstadt Biddle
Property Corp. (1989-present), Colgate University (Trustee Emeritus)
(2004-present). Director/Trustee, The Harlem Youth Development
Foundation, (Chairman) (1998-2002), Consolidated Edison Company of
New York, Inc. (1970-2002), Atlantic Mutual Insurance Company
(1974-2002), Centennial Insurance Company (1974-2002), Union Pacific
Corp. (1978-2002), Accuhealth (1994-2002), Pace University
(1978-2003), New York Housing Partnership Development Corp.
(Chairman) (1981-2003), Josiah Macy, Jr. Foundation (1975-2004).
- ------------------------------------------------------------------------------------------------------------------------------------
Harry Dalzell-Payne Served since 62 Retired. Trustee/Director, Phoenix Funds Complex (1983-present).
The Flat, Elmore Court 2005.
Elmore, GL0S, GL2 3NT
U.K.
DOB: 9/8/29
- ------------------------------------------------------------------------------------------------------------------------------------
Francis E. Jeffries Served since 63 Director, The Empire District Electric Company (1984-2004).
8477 Bay Colony Dr. #902 2005. Trustee/Director, Phoenix Funds Complex (1987-present).
Naples, FL 34108
DOB: 9/23/30
- ------------------------------------------------------------------------------------------------------------------------------------
Leroy Keith, Jr. Served since 60 Partner, Stonington Partners, Inc. (private equity fund)
Stonington Partners, Inc. 2005. (2001-present). Director/Trustee, Evergreen Funds (88 portfolios)
736 Market Street, (1989-present). Trustee, Phoenix Funds Family (1980-present).
Suite 1430 Director, Diversapak (2002-present), Obaji Medical Products Company
Chattanooga, TN 37402 (2002-present). Director, Lincoln Educational Services (2002-2004).
DOB: 2/14/39
- ------------------------------------------------------------------------------------------------------------------------------------
Geraldine M. McNamara Served since 62 Retired. Trustee/Director, Phoenix Funds Complex (2001-present).
40 East 88th Street 2005. Managing Director, U.S. Trust Company of New York (private bank)
New York, NY 10128 (1982-2006).
DOB: 4/17/51
- ------------------------------------------------------------------------------------------------------------------------------------
38
FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
James M. Oates Served since 60 Trustee/Director, Phoenix Funds Family (1987-present). Managing
c/o Northeast Partners 2005. Director, Wydown Group (consulting firm) (1994-present). Director,
150 Federal Street, Investors Financial Service Corporation (1995-present), Investors
Suite 1000 Bank & Trust Corporation (1995-present), Stifel Financial
Boston, MA 02110 (1996-present), Connecticut River Bancorp (1998-present), Connecticut
DOB: 5/31/46 River Bank (1999-present), Trust Company of New Hampshire
(2002-present). Chairman, Emerson Investment Management, Inc.
(2000-present). Independent Chairman, John Hancock Trust (93
Portfolios) (since 2005), Trustee, John Hancock Funds II (74
Portfolios) (since 2005), Trustee, John Hancock Trust (2004-2005).
Director/Trustee, 1Mind, Inc. (formerly 1Mind.com) (2000-2002),
Plymouth Rubber Co. (1995-2003). Director and Treasurer, Endowment
for Health, Inc. (2000-2004). Chairman, Hudson Castle Group, Inc.
(Formerly IBEX Capital Markets, Inc.) (financial services)
(1997-2006). John Hancock Funds III (8 Portfolios) (2005-2006).
- ------------------------------------------------------------------------------------------------------------------------------------
Richard E. Segerson Served since 60 Managing Director, Northway Management Company (1998-present).
73 Briggs Way 2005. Trustee/Director, Phoenix Funds Family (1983-present).
Chatham, MA 02633
DOB: 2/16/46
- ------------------------------------------------------------------------------------------------------------------------------------
Ferdinand L.J. Verdonck Served since 60 Director, Banco Urquijo (Chairman) (1998-present). Trustee, Phoenix
Nederpolder, 7 2005. Funds Family (2002-present). Director EASDAQ (Chairman)
B-9000 Gent, Belgium (2001-present), The JP Morgan Fleming Continental European Investment
DOB: 7/30/42 Trust (1998-present), Groupe SNEF (1998-present), Santens N.V.
(1999-present). Managing Director, Almanij N.V. (1992-2003).
Director, KBC Bank and Insurance Holding Company (Euronext)
(1992-2003), KBC Bank (1992-2003), KBC Insurance (1992-2003),
Kredietbank, S.A. Luxembourgeoise (1992-2003), Investco N.V.
(1992-2003), Gevaert N.V. (1992-2003), Fidea N.V. (1992-2003),
Almafin N.V. (1992-2003), Centea N.V. (1992-2003), Director, Degussa
Antwerpen N.V. (1998-2004).
- ------------------------------------------------------------------------------------------------------------------------------------
39
FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
INTERESTED TRUSTEES
Each of the individuals listed below is an "interested person" of the
Trust, as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
George R. Aylward Served since 60 Senior Executive Vice President and President, Asset Management, The
DOB: 8/17/64(1) November Phoenix Companies, Inc. (since 2007). Director (2006-present),
2006. President (2006-present) and Chief Operating Officer (2004-present),
Phoenix Investment Partners, Ltd. Director (2006-present) and
President (since 2007), DPCM Holding, Inc. Director and Executive
Vice President, Duff & Phelps Investment Management Co.
(2006-present). Director (2006-present) and Executive Vice President
(2005-present), Engemann Asset Management. President, Euclid
Advisers, LLC (2006-present). Director (2006-present) and Executive
Vice President (2005-present), Goodwin Capital Advisers, Inc.
Executive Vice President, Kayne Anderson Rudnick Investment
Management, LLC (since 2007). Director and President, Pasadena
Capital Corporation (2006-present). Director and Executive Vice
President, Phoenix Equity Planning Corporation (2005-present).
Director and President, Phoenix Investment Counsel, Inc.
(2006-present). President, Phoenix/Zweig Advisers, LLC
(2006-present). Executive Vice President, PXP Securities Corp.
(2005-present). Director and President, Rutherford Financial
Corporation (2006-present). Executive Vice President, Rutherford,
Brown & Catherwood, LLC (2006-present). Executive Vice President, SCM
Advisers LLC (2006-present). President, the Phoenix Funds Family
(2006-present). Previously, Vice President, Phoenix Life Insurance
Company (2002-2004). Vice President, The Phoenix Companies, Inc.
(2003-2004). Vice President, Finance, Phoenix Investment Partners,
Ltd. (2001-2002). Executive Vice President, the Phoenix Funds Family
(2004-2006). Executive Vice President, Phoenix Investment Partners,
Ltd. (2004-2006), Phoenix Investment Counsel, Inc. (2005-2006),
Euclid Advisers, LLC (2005-2006), Rutherford Financial Corporation
(2005-2006), Phoenix/Zweig Advisers, LLC (2005-2006) and DPCM
Holding, Inc. (2005-2007). Senior Vice President and Chief Operating
Officer, Asset Management, The Phoenix Companies, Inc. (2004-2007).
- ------------------------------------------------------------------------------------------------------------------------------------
Marilyn E. LaMarche(2) Served since 60 Limited Managing Director, Lazard Freres & Co. LLC (1997-present).
Lazard Freres & Co. LLC 2005. Trustee/Director, Phoenix Funds Family (2002-present). Director, The
30 Rockefeller Plaza, Phoenix Companies, Inc. (2001-2005) and Phoenix Life Insurance
59th Floor Company (1989-2005).
New York, NY 10020
DOB: 5/11/34
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Mr. Aylward is an "interested person" as defined in the Investment Company
Act of 1940, by reason of his position with Phoenix Investment Partners,
Ltd. and its affiliates.
(2) Ms. LaMarche is an "interested person," as defined in the Investment Company
Act of 1940, by reason of her former position as Director of The Phoenix
Companies, Inc. and Phoenix Life Insurance Company.
40
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND
DATE OF BIRTH TIME SERVED TRUSTEE OTHER DIRECTORSHIPS HELD BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
Philip R. McLoughlin(3) Served since 80 Partner, Cross Pond Partners, LLC (2006-present), Director, PXRE
200 Bridge Street 2005. Corporation (Reinsurance) (1985-present), World Trust Fund
Chatham, MA 02633 (1991-present). Director/Trustee, Phoenix Funds Complex
DOB: 10/23/46 Chairman (1989-present). Management Consultant (2002-2004), Chairman
(1997-2002), Chief Executive Officer (1995-2002), Director
(1995-2002), Phoenix Investment Partners, Ltd., Director and
Executive Vice President, The Phoenix Companies, Inc. (2000-2002).
Director (1994-2002) and Executive Vice President, Investments
(1987-2002), Phoenix Life Insurance Company. Director (1983-2002) and
Chairman (1995-2002), Phoenix Investment Counsel, Inc. Director
(1982-2002), Chairman (2000-2002) and President (1990-2000), Phoenix
Equity Planning Corporation. Chairman and President, Phoenix/Zweig
Advisers LLC (2001-2002). Director (2001-2002) and President (April
2002-September 2002), Phoenix Investment Management Company. Director
and Executive Vice President, Phoenix Life and Annuity Company
(1996-2002). Executive Vice President (1994-2002) and Chief
Investment Counsel (1994-2002), PHL Variable Insurance Company.
Director, Phoenix National Trust Holding Company (2001-2002).
Director (1985-2002), Vice President (1986-2002) and Executive Vice
President (April 2002-September 2002), PM Holdings, Inc. Director,
WS Griffith Associates, Inc. (1995-2002). Director, WS Griffith
Securities, Inc. (1992-2002).
- ------------------------------------------------------------------------------------------------------------------------------------
(3) Mr. McLoughlin is an "interested person," as defined in the Investment
Company Act of 1940, by reason of his former relationship with Phoenix
Investment Partners, Ltd. and its affiliates.
41
FUND MANAGEMENT TABLES (UNAUDITED) (CONTINUED)
OFFICERS OF THE TRUST WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) HELD WITH
NAME, ADDRESS AND TRUST AND LENGTH OF PRINCIPAL OCCUPATION(S)
DATE OF BIRTH TIME SERVED DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Nancy G. Curtiss Senior Vice President Assistant Treasurer (2001-present), Vice President, Fund Accounting
DOB: 11/24/52 since 2006. (1994-2000), Phoenix Equity Planning Corporation. Vice President,
Phoenix Investment Partners, Ltd. (2003-present). Senior Vice
President, the Phoenix Funds Family (since 2006). Vice President, The
Phoenix Edge Series Fund (1994-present), Treasurer, The Zweig Fund
Inc. and The Zweig Total Return Fund Inc. (2003- present). Chief
Financial Officer (2005-2006) and Treasurer (1994-2006), or Assistant
Treasurer (2005-2006), certain funds within the Phoenix Fund Complex.
- ------------------------------------------------------------------------------------------------------------------------------------
Francis G. Waltman Senior Vice President Senior Vice President, Asset Management Product Development, The
DOB: 7/27/62 since 2005. Phoenix Companies, Inc. (since 2006). Senior Vice President, Asset
Management Product Development, Phoenix Investment Partners, Ltd.
(2005-present). Director and President, Phoenix Equity Planning
Corporation (since 2006). Senior Vice President, Phoenix Investment
Counsel, Inc. (since 2006). Director, DPCM Holdings, Inc., Duff &
Phelps Investment Management Company and Pasadena Capital Corporation
(since 2006). President, PXP Securities Corp. (2004-present). Senior
Vice President, the Phoenix Funds Family (2004-present). Senior Vice
President and Chief Administrative Officer, Phoenix Investment
Partners, Ltd., (2003-2004). Senior Vice President and Chief
Administrative Officer, Phoenix Equity Planning Corporation
(1999-2003).
- ------------------------------------------------------------------------------------------------------------------------------------
Marc Baltuch Vice President and Chief Compliance Officer, Zweig-DiMenna Associates LLC
c/o Zweig-Dimenna Chief Compliance Officer (1989-present). Vice President and Chief Compliance Officer, certain
Associates, LLC since 2005. Funds within the Phoenix Fund Complex (2004-present). Vice President,
900 Third Avenue The Zweig Total Return Fund, Inc. (2004-present). Vice President, The
New York, NY 10022 Zweig Fund, Inc. (2004-present). President and Director of Watermark
DOB: 9/23/45 Securities, Inc. (1991-present). Assistant Secretary of Gotham
Advisors Inc. (1990-present). Secretary, Phoenix-Zweig Trust
(1989-2003). Secretary, Phoenix-Euclid Market Neutral Fund
(1999-2002).
- ------------------------------------------------------------------------------------------------------------------------------------
W. Patrick Bradley Chief Financial Officer and Second Vice President, Fund Administration, Phoenix Investment
DOB: 3/2/72 Treasurer since 2006. Partners, Ltd. (2004-present). Chief Financial Officer and Treasurer
(2006-present) or Chief Financial Officer and Treasurer
(2005-present), certain funds within the Phoenix Fund Family. Vice
President, Chief Financial Officer, Treasurer and Principal
Accounting Officer, The Phoenix Edge Series Fund (since 2006).
Assistant Treasurer, certain funds within the Phoenix Fund Complex
(2004-2006). Senior Manager (2002-2004), Manager (2000-2002), Audit,
Deloitte & Touche, LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Kevin J. Carr Vice President, Vice President and Counsel, Phoenix Life Insurance Company (2005-
One American Row Chief Legal Officer, present). Vice President, Counsel, Chief Legal Officer and Secretary
Hartford, CT 06102 Counsel and of certain funds within the Phoenix Fund Family (2005-present).
DOB: 8/30/54 Secretary since 2005. Compliance Officer of Investments and Counsel, Travelers Life &
Annuity Company (January 2005-May 2005). Assistant General Counsel,
The Hartford Financial Services Group (1999-2005).
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42
PHOENIX ADVISER TRUST
101 Munson Street
Greenfield, MA 01301-9688
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
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110-1707
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
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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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PRESORTED
STANDARD
U.S. POSTAGE
PAID
Louisville, KY
Permit No. 1051
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[LOGO] 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.
PXP4297 4-07
BPD31322
The Report to Shareholders is attached herewith.
[NOTE TO FINANCIAL PRINTER: Insert a copy of the report transmitted to
stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1) HERE.]
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics described in Item 2(b) of the instructions for
completion of Form N-CSR.
(d) The registrant has not granted any waivers, during the period covered
by this report, including an implicit waiver, from a provision of the
code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third
party, that relates to one or more of the items set forth in paragraph
(b) of the instructions for completion of this Item.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The Registrant's Board of Trustees has determined that the Registrant
has an "audit committee financial expert" serving on its Audit
Committee.
(a)(2) E. Virgil Conway has been determined by the Registrant to possess the
technical attributes identified in Instruction 2(b) of Item 3 to Form
N-CSR to qualify as an "audit committee financial expert." Mr. Conway
is an "independent" trustee pursuant to paragraph (a)(2) of Item 3 to
Form N-CSR.
(a)(3) Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
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(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$51,000 for 2007 and $34,200 for 2006.
Audit-Related Fees
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(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $2,000 for 2007 and $2,000 for 2006. Services related to these
fees are for the review of the semi annual report.
Tax Fees
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(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $9,050 for 2007 and $8,700
for 2006.
"Tax Fees" are those primarily associated with review of the Trust's
tax provision and qualification as a regulated investment company (RIC)
in connection with audits of the Trust's financial statement, review of
year-end distributions by the Fund to avoid excise tax for the Trust,
periodic discussion with management on tax issues affecting the Trust,
and reviewing and signing the Fund's federal income and excise tax
returns.
All Other Fees
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(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2007 and $0 for 2006.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
The Phoenix Adviser Trust (the "Fund") Board has adopted policies and
procedures with regard to the pre-approval of services provided by PwC.
Audit, audit-related and tax compliance services provided to the Fund
on an annual basis require specific pre-approval by the Board. As noted
above, the Board must also approve other non-audit services provided to
the Fund and those non-audit services provided to the Fund's Affiliated
Service Providers that relate directly to the operations and financial
reporting of the Fund. Certain of these non-audit services that the
Board believes are a) consistent with the SEC's auditor independence
rules and b) routine and recurring services that will not impair the
independence of the independent auditors may be approved by the Board
without consideration on a specific case-by-case basis ("general
pre-approval").
The Audit Committee has determined that Mr. E. Virgil Conway, Chair of
the Audit Committee, may provide pre-approval for such services that
meet the above requirements in the event such approval is sought
between regularly scheduled meetings. In any event, the Board is
informed of each service approved subject to general pre-approval at
the next regularly scheduled in-person board meeting.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) 100% for 2007; 100% for 2006
(c) 100% for 2007; 100% for 2006
(d) Not applicable for 2007; not applicable for 2006
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than fifty percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $991,980 for 2007 and $798,509 for 2006.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section
302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(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 Adviser Trust
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By (Signature and Title)* /s/ George R. Aylward
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George R. Aylward, President
(principal executive officer)
Date May 4, 2007
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ George R. Aylward
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George R. Aylward, President
(principal executive officer)
Date May 4, 2007
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By (Signature and Title)* /s/ W. Patrick Bradley
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W. Patrick Bradley, Chief Financial Officer
and Treasurer
(principal financial officer)
Date May 4, 2007
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* Print the name and title of each signing officer under his or her signature.