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: August 31, 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.
[LOGO OMITTED]
PHOENIX
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SEMIANNUAL REPORT
Phoenix Focused Value Fund
Phoenix Foreign Opportunities Fund
WOULDN'T YOU RATHER HAVE THIS
DOCUMENT E-MAILED TO YOU?
ELIGIBLE SHAREHOLDERS CAN
TRUST NAME: | | SIGN UP FOR E-DELIVERY AT
PHOENIX ADVISER TRUST | August 31, 2007 | PHOENIXFUNDS.COM
.................................................................................
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
TABLE OF CONTENTS
Message from the President ....................................... 1
Glossary ......................................................... 2
Disclosure of Fund Expenses ...................................... 3
Phoenix Focused Value Fund ....................................... 4
Phoenix Foreign Opportunities Fund ............................... 9
Notes to Financial Statements .................................... 16
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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, 2007, 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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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.
MESSAGE FROM THE PRESIDENT
DEAR PHOENIXFUNDS SHAREHOLDER:
We are pleased to provide this report for the six months ended August 31,
2007. It includes valuable information about your Phoenix mutual fund(s)--such
as performance- and fee-related data and information about each fund's portfolio
holdings and transactions for the reporting period.
At Phoenix, we are committed to helping investors succeed over the long
term and we strive to provide investors with choice. The Phoenix family of funds
offers a wide array of investment options to help make diversification easy. Our
multi-manager, multi-style approach gives you access to a complete suite of
investment products, including numerous equity, fixed income and money market
funds.
We are proud to offer this diversified portfolio of funds managed by more
than a dozen accomplished independent investment managers--many of whom were
previously only available to large institutional investors. Their investment
expertise allows us to offer a variety of styles, including growth, value and
core products, along with asset allocation funds and alternative investments.
Phoenix is also committed to providing you best-in-class service. Whether
you need to check your account value or transfer funds, our customer service
team stands ready to provide superior, dependable assistance to help you make
informed decisions.
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. A regular "checkup"
can be an excellent way to help ensure that your investments are aligned with
your financial goals.
As president of Phoenix Investment Partners, Ltd., I would like to thank
you for entrusting your assets with us. It's our privilege to serve you.
Sincerely,
/s/ George R. Aylward
- ------------------------------------
George R. Aylward
President, PhoenixFunds
SEPTEMBER 2007
1
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.
FHLB (FEDERAL HOME LOAN BANK)
FHLMC (FEDERAL HOME LOAN MORTGAGE CORPORATION)
FNMA OR "FANNIE MAE" (FEDERAL NATIONAL MORTGAGE ASSOCIATION)
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.
VIRT-X EXCHANGE
Pan-European Blue Chip Stock Exchange.
2
PHOENIX ADVISER TRUST
ABOUT YOUR FUND'S EXPENSES (UNAUDITED)
(FOR THE SIX-MONTH PERIOD OF MARCH 1, 2007 TO AUGUST 31, 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 in a
Phoenix Adviser Trust 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 one of the funds 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 section of the accompanying tables provides information about
actual account values and actual expenses. You may use the information in this
section, 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 section 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 section 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 section 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.
EXPENSE TABLE
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Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
March 1, 2007 August 31, 2007 Ratio Period*
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FOCUSED VALUE FUND
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ACTUAL
Class A .......... $1,000.00 $1,008.30 1.26% $ 6.36
Class C .......... 1,000.00 1,004.90 2.01 10.13
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
Class A .......... 1,000.00 1,018.72 1.26 6.41
Class C .......... 1,000.00 1,014.90 2.01 10.23
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FOREIGN OPPORTUNITIES FUND
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ACTUAL
Class I .......... $1,000.00 $1,059.60 1.12% $ 5.80
Class A .......... 1,000.00 1,058.50 1.36 7.04
Class C .......... 1,000.00 1,054.90 2.12 10.95
HYPOTHETICAL (5% RETURN BEFORE EXPENSES)
Class I .......... 1,000.00 1,019.44 1.12 5.70
Class A .......... 1,000.00 1,018.21 1.36 6.92
Class C .......... 1,000.00 1,014.34 2.12 10.79
* Expenses are equal to the Fund's annualized expense ratio, 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
(184) expenses were accrued in the most recent fiscal half-year, then
divided by 366 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.
3
PHOENIX FOCUSED VALUE FUND
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SECTOR WEIGHTINGS (UNAUDITED) 8/31/07
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As a percentage of total investments
[CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS]
Consumer Staples 44%
Financials 24
Consumer Discretionary 9
Health Care 8
Industrials 2
Other (includes short-term investments) 13
SCHEDULE OF INVESTMENTS
AUGUST 31, 2007
(UNAUDITED)
SHARES VALUE
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DOMESTIC COMMON STOCKS--74.8%
AIR FREIGHT & LOGISTICS--2.4%
United Parcel Service, Inc. Class B ............ 15,220 $ 1,154,589
APPAREL RETAIL--2.0%
TJX Cos., Inc. (The) ........................... 31,390 957,081
BROADCASTING & CABLE TV--2.6%
Entercom Communications Corp. Class A .......... 35,905 764,776
Saga Communications, Inc. Class A(b) ........... 68,925 496,260
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1,261,036
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DIVERSIFIED BANKS--4.9%
Wachovia Corp. ................................. 24,702 1,209,904
Wells Fargo & Co. .............................. 32,235 1,177,867
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2,387,771
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DRUG RETAIL--2.0%
Walgreen Co. ................................... 21,900 987,033
HOMEFURNISHING RETAIL--1.5%
Bed Bath & Beyond, Inc.(b) ..................... 21,130 731,943
HOUSEHOLD PRODUCTS--8.8%
Colgate-Palmolive Co. .......................... 25,505 1,691,492
Procter & Gamble Co. (The) ..................... 39,345 2,569,622
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4,261,114
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HYPERMARKETS & SUPER CENTERS--2.4%
Wal-Mart Stores, Inc. .......................... 26,990 1,177,574
MANAGED HEALTH CARE--3.8%
UnitedHealth Group, Inc. ....................... 36,755 1,838,118
SHARES VALUE
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MULTI-LINE INSURANCE--6.3%
American International Group, Inc. ............. 46,105 $3,042,930
OTHER DIVERSIFIED FINANCIAL SERVICES--1.5%
Bank of America Corp. .......................... 14,160 717,629
PACKAGED FOODS & MEATS--6.2%
General Mills, Inc. ............................ 23,386 1,306,810
Kellogg Co. .................................... 30,915 1,698,161
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3,004,971
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PHARMACEUTICALS--4.0%
Johnson & Johnson .............................. 30,965 1,913,327
PROPERTY & CASUALTY INSURANCE--4.0%
AMBAC Financial Group, Inc. .................... 15,616 980,997
Berkshire Hathaway, Inc. Class A(b) ............ 8 947,120
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1,928,117
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PUBLISHING--1.0%
Gannett Co., Inc. .............................. 9,900 465,300
REGIONAL BANKS--1.9%
Fifth Third Bancorp ............................ 24,975 891,358
SOFT DRINKS--7.4%
Coca-Cola Co. (The) ............................ 26,425 1,421,136
PepsiCo, Inc. .................................. 31,695 2,156,211
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3,577,347
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SPECIALIZED CONSUMER SERVICES--1.6%
Block (H&R), Inc. .............................. 38,215 758,186
See Notes to Financial Statements
4
Phoenix Focused Value Fund
SHARES VALUE
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THRIFTS & MORTGAGE FINANCE--5.5%
Fannie Mae ..................................... 14,044 $ 921,427
Freddie Mac .................................... 27,968 1,723,108
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2,644,535
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TOBACCO--5.0%
Altria Group, Inc. ............................. 34,794 2,415,051
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TOTAL DOMESTIC COMMON STOCKS
(IDENTIFIED COST $33,775,501) .................. 36,115,010
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FOREIGN COMMON STOCKS(c)--13.5%
DISTILLERS & VINTNERS--3.2%
Diageo plc Sponsored ADR (United Kingdom) ...... 18,395 1,571,301
PACKAGED FOODS & MEATS--4.8%
Nestle S.A. Sponsored ADR (Switzerland) ........ 21,230 2,308,276
SPECIALTY STORES--1.0%
Signet Group plc Sponsored ADR
(United Kingdom) ............................... 24,645 473,677
TOBACCO--4.5%
British American Tobacco plc
Sponsored ADR (United Kingdom) ................. 33,080 2,199,820
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TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $4,719,574) ................... 6,553,074
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TOTAL LONG-TERM INVESTMENTS--88.3%
(IDENTIFIED COST $38,495,075) .................. 42,668,084
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PAR VALUE
(000) VALUE
---------- -----------
SHORT-TERM INVESTMENTS--13.3%
FEDERAL AGENCY SECURITIES(d)--13.3%
FHLB 4.20%, 9/4/07 ............................. $2,155 $ 2,154,246
FHLB 4.95%, 9/14/07 ............................ 2,260 2,255,960
FHLMC 4.60%, 9/7/07 ............................ 2,000 1,998,467
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TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $6,408,673) ................... 6,408,673
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TOTAL INVESTMENTS--101.6%
(IDENTIFIED COST $44,903,748) .................. 49,076,757(a)
Other assets and liabilities, net--(1.6)% ...... (781,216)
-----------
NET ASSETS--100.0% ............................. $48,295,541
===========
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $5,146,432 and gross
depreciation of $1,404,177 for federal income tax purposes. At August 31,
2007, the aggregate cost of securities for federal income tax purposes was
$45,334,502.
(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
5
Phoenix Focused Value Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2007
(UNAUDITED)
ASSETS
Investment securities at value
(Identified cost $44,903,748) $49,076,757
Cash 1,688
Receivables
Dividends 88,541
Fund shares sold 6,583
Prepaid expenses 11,945
Other assets 10,567
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Total assets 49,196,081
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LIABILITIES
Payables
Investment securities purchased 742,350
Fund shares repurchased 80,212
Transfer agent fee 16,462
Distribution and service fees 12,126
Trustee deferred compensation plan 10,567
Administration fee 3,936
Investment advisory fee 577
Trustees' fee 60
Other accrued expenses 34,250
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Total liabilities 900,540
-----------
NET ASSETS $48,295,541
===========
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $41,613,662
Undistributed net investment income 393,730
Accumulated net realized gain 2,115,140
Net unrealized appreciation 4,173,009
-----------
NET ASSETS $48,295,541
===========
CLASS A
Net asset value per share (net assets/shares outstanding) $19.46
Offering price per share $19.46/(1-5.75%) $20.65
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization 2,318,349
Net Assets $45,109,313
CLASS C
Net asset value (net assets/shares outstanding) and
offering price per share $18.75
Shares of beneficial interest outstanding, $0.001 par value,
unlimited authorization 169,948
Net Assets $ 3,186,228
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 618,762
Interest 146,662
Foreign taxes withheld (7,983)
----------
Total investment income 757,441
----------
EXPENSES
Investment advisory fee 207,541
Service fees, Class A 64,868
Distribution and service fees, Class C 17,251
Administration fee 23,601
Transfer agent 63,141
Professional 17,237
Printing 15,887
Registration 15,176
Custodian 7,197
Trustees 2,457
Miscellaneous 4,595
----------
Total expenses 438,951
Less expenses reimbursed by investment adviser (76,844)
Custodian fees paid indirectly (431)
----------
Net expenses 361,676
----------
NET INVESTMENT INCOME (LOSS) 395,765
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 2,267,932
Net change in unrealized appreciation (depreciation)
on investments (2,216,571)
----------
NET GAIN (LOSS) ON INVESTMENTS 51,361
----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 447,126
==========
See Notes to Financial Statements
6
Phoenix Focused Value Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
August 31, 2007 Year Ended
(Unaudited) February 28, 2007
----------- -----------------
FROM OPERATIONS
Net investment income (loss) $ 395,765 $ 652,748
Net realized gain (loss) 2,267,932 3,349,314
Net change in unrealized appreciation
(depreciation) (2,216,571) 1,993,882
----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 447,126 5,995,944
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class A -- (632,518)
Net investment income, Class C -- (22,265)
Net realized short-term gains, Class A (439,189) (441,358)
Net realized short-term gains, Class C (29,066) (29,478)
Net realized long-term gains, Class A (262,987) (2,905,893)
Net realized long-term gains, Class C (17,405) (195,932)
----------- -----------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS
TO SHAREHOLDERS (748,647) (4,227,444)
----------- -----------
FROM SHARE TRANSACTIONS
CLASS A
Proceeds from shares sold (365,347 and
214,969 shares, respectively) 7,199,289 4,223,855
Net asset value of shares issued from
reinvestment of distributions (31,476
and 200,821 shares, respectively) 623,231 3,900,905
Cost of shares repurchased (660,796
and 801,256 shares, respectively) (12,939,527) (15,615,689)
----------- -----------
Total (5,117,007) (7,490,929)
----------- -----------
CLASS C
Proceeds from shares sold (4,873 and 11,112
shares, respectively) 94,032 211,825
Net asset value of shares issued
from reinvestment of distributions
(2,430 and 13,138 shares, respectively) 46,442 247,675
Cost of shares repurchased (19,748 and 41,668
shares, respectively) (379,756) (772,829)
----------- -----------
Total (239,282) (313,329)
----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
SHARE TRANSACTIONS (5,356,289) (7,804,258)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (5,657,810) (6,035,758)
NET ASSETS
Beginning of period 53,953,351 59,989,109
----------- -----------
END OF PERIOD (INCLUDING UNDISTRIBUTED
NET INVESTMENT INCOME AND DISTRIBUTIONS IN
EXCESS OF NET INVESTMENT INCOME OF
$393,730 AND $(2,035), RESPECTIVELY) $48,295,541 $53,953,351
=========== ===========
See Notes to Financial Statements
7
Phoenix Focused Value Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD
ENDED YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 YEAR ENDED
AUGUST 31, 2007 ----------------------------- TO FEBRUARY 29, DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004 2003
Net asset value, beginning of period $19.56 $18.97 $20.74 $22.69 $21.82 $18.64
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.15(5) 0.24(5) 0.12(5) 0.03 --(2) 0.03
Net realized and unrealized gain (loss) 0.02 1.90 0.19 0.48 0.87 4.47
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.17 2.14 0.31 0.51 0.87 4.50
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.25) (0.15) -- -- --
Distributions from net realized gains (0.27) (1.30) (1.93) (2.46) -- (1.32)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.27) (1.55) (2.08) (2.46) -- (1.32)
------ ------ ------ ------ ------ ------
Payment by affiliate(6) -- -- -- --(2) -- --
------ ------ ------ ------ ------ ------
Change in net asset value (0.10) 0.59 (1.77) (1.95) 0.87 3.18
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $19.46 $19.56 $18.97 $20.74 $22.69 $21.82
====== ====== ====== ====== ====== ======
Total return(1) 0.83%(4) 11.44% 1.65% 2.45% 3.99 %(4) 24.54 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $45,109 $50,502 $56,307 $5,120 $3,746 $3,752
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.26%(3) 1.26% 1.15% 1.15% 1.15 %(3) 2.11 %
Gross operating expenses 1.54%(3) 1.48% 1.50% 1.85% 1.96 %(3) 2.11 %
Net investment income (loss) 1.48%(3) 1.21% 0.61% 0.18% (0.33)%(3) (0.88)%
Portfolio turnover 45%(4) 35% 34% 40% 55 %(3) 21 %
CLASS C
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD
ENDED YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 YEAR ENDED
AUGUST 31, 2007 ----------------------------- TO FEBRUARY 29, DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004 2003
Net asset value, beginning of period $18.92 $18.43 $20.23 $22.35 $21.52 $18.60
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.07(5) 0.08(5) (0.01)(5) (0.04) --(2) (0.07)
Net realized and unrealized gain (loss) 0.03 1.84 0.16 0.38 0.83 4.31
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 0.10 1.92 0.15 0.34 0.83 4.24
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income -- (0.13) (0.02) -- -- --
Distributions from net realized gains (0.27) (1.30) (1.93) (2.46) -- (1.32)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.27) (1.43) (1.95) (2.46) -- (1.32)
------ ------ ------ ------ ------ ------
Payment by affiliate(6) -- -- -- --(2) -- --
------ ------ ------ ------ ------ ------
Change in net asset value (0.17) 0.49 (1.80) (2.12) 0.83 2.92
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $18.75 $18.92 $18.43 $20.23 $22.35 $21.52
====== ====== ====== ====== ====== ======
Total return(1) 0.49%(4) 10.56% 0.86% 1.68 % 3.86 %(4) 23.18 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $3,186 $3,451 $3,682 $3,516 $1,827 $1,344
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.01%(3) 2.02% 1.90 % 1.90 % 1.90 %(3) 3.16 %
Gross operating expenses 2.29%(3) 2.23% 2.34 % 2.59 % 2.72 %(3) 3.16 %
Net investment income (loss) 0.75%(3) 0.45% (0.07)% (0.57)% (1.05)%(3) (1.81)%
Portfolio turnover 45%(4) 35% 34 % 40 % 55 %(3) 21 %
(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
8
PHOENIX FOREIGN OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
COUNTRY WEIGHTINGS (UNAUDITED) 8/31/07
- --------------------------------------------------------------------------------
As a percentage of total investments
[CHART OMITTED - EDGAR REPRESENTATION OF DATA FOLLOWS]
Switzerland 14%
United Kingdom 14
India 8
Australia 6
Japan 5
Hong Kong 4
Spain 4
Other (includes short-term investments) 45
SCHEDULE OF INVESTMENTS
AUGUST 31, 2007
(UNAUDITED)
SHARES VALUE
---------- --------------
FOREIGN COMMON STOCKS(c)--93.6%
AUSTRALIA--7.5%
Aristocrat Leisure Ltd. (Casinos & Gaming)(g) .. 1,700,483 $ 19,484,672
Australia and New Zealand Banking Group
Ltd. (Diversified Banks)(g) .................... 509,340 12,085,059
BHP Billiton Ltd. (Diversified
Metals & Mining)(g) ............................ 364,300 11,455,375
Rio Tinto Ltd. (Diversified
Metals & Mining)(g) ............................ 164,500 12,591,085
Woolworths Ltd. (Food Retail)(g) ............... 807,363 19,770,715
WorleyParsons Ltd. (Oil & Gas
Equipment & Services) .......................... 218,421 6,900,403
--------------
82,287,309
--------------
BELGIUM--3.9%
Colruyt SA (Food Retail)(g) .................... 58,780 12,538,633
InBev N.V. (Brewers)(g) ........................ 363,645 29,821,585
--------------
42,360,218
--------------
BRAZIL--3.6%
Banco Itau Holding Financieira SA
Sponsored ADR (Diversified Banks)(g) ........... 349,350 15,207,206
Cia Vale do Rio Doce ADR
(Diversified Metals & Mining) .................. 388,700 19,174,571
Petroleo Brasileiro SA Sponsored
ADR (Integrated Oil & Gas) ..................... 90,861 5,618,844
--------------
40,000,621
--------------
SHARES VALUE
---------- --------------
CANADA--1.5%
Canadian Natural Resources Ltd.
(Oil & Gas Exploration & Production) ........... 122,920 $ 8,403,025
Power Corp. of Canada
(Life & Health Insurance) ...................... 212,627 8,154,729
--------------
16,557,754
--------------
FRANCE--2.6%
Air Liquide (Industrial Gases)(g) .............. 83,600 10,653,853
Total SA (Integrated Oil & Gas)(g) ............. 224,580 16,902,851
Total SA Sponsored ADR
(Integrated Oil & Gas)(f) ...................... 14,914 1,119,892
--------------
28,676,596
--------------
GERMANY--2.7%
Deutsche Boerse AG (Specialized Finance) ....... 140,300 15,481,010
Siemens AG (Industrial Conglomerates)(g) ....... 112,800 14,166,075
--------------
29,647,085
--------------
HONG KONG--4.9%
China Mobile Ltd. (Wireless
Telecommunication Services) .................... 872,500 11,860,625
China Mobile Ltd. Sponsored ADR
(Wireless Telecommunication Services)(g) ....... 128,000 8,677,100
CNOOC Ltd. (Oil & Gas Exploration &
Production) .................................... 13,792,800 16,857,051
Jardine Matheson Holdings Ltd.
(Multi-Sector Holdings) ........................ 634,165 16,488,290
--------------
53,883,066
--------------
See Notes to Financial Statements
9
Phoenix Foreign Opportunities Fund
SHARES VALUE
---------- --------------
INDIA--4.5%
HDFC Bank Ltd. (Diversified Banks) ............. 120,800 $ 3,462,786
HDFC Bank Ltd. ADR (Diversified Banks)(g) ...... 383,290 33,978,658
Housing Development Finance Corp.
(Consumer Finance) ............................. 244,600 11,833,554
--------------
49,274,998
--------------
IRELAND--1.6%
Anglo Irish Bank Corp. plc (Diversified Banks) . 925,456 17,271,615
JAPAN--6.0%
Millea Holdings, Inc. (Property &
Casualty Insurance)(g) ......................... 791,500 30,623,715
Park24 Co. Ltd. (Environmental &
Facilities Services)(g) ........................ 1,250,000 12,036,877
Toyota Motor Corp. (Automobile
Manufacturers)(g) .............................. 396,600 23,154,124
--------------
65,814,716
--------------
MEXICO--4.3%
America Movil S.A. de C.V. ADR Series L
(Wireless Telecommunication Services) .......... 383,753 23,201,706
America Movil S.A. de C.V. Series L
(Wireless Telecommunication Services) .......... 1,321,300 3,987,972
Grupo Modelo S.A. de C.V.
Series C (Brewers)(g) .......................... 4,046,890 19,678,750
--------------
46,868,428
--------------
NETHERLANDS--3.3%
Schlumberger Ltd. ADR (Oil &
Gas Equipment & Services) ...................... 195,300 18,846,450
Schlumberger Ltd. (Oil & Gas
Equipment & Services) .......................... 20,000 1,953,466
TNT N.V. (Air Freight & Logistics)(g) .......... 366,210 15,464,949
--------------
36,264,865
--------------
NORWAY--2.6%
Orkla ASA (Industrial Conglomerates) ........... 1,772,975 28,707,960
SOUTH AFRICA--1.3%
Remgro Ltd. (Industrial Conglomerates) ......... 542,278 13,976,359
SPAIN--4.8%
Banco Santander Central Hispano S.A.
(Diversified Banks) ............................ 462,505 8,442,632
Bolsas y Mercados Espanoles (Investment
Banking & Brokerage) ........................... 196,329 10,852,563
SHARES VALUE
---------- --------------
SPAIN--CONTINUED
Enagas S.A. (Gas Utilities)(g) ................. 941,101 $ 21,409,637
Red Electrica de Espana
(Electric Utilities)(g) ........................ 259,433 11,669,679
--------------
52,374,511
--------------
SWEDEN--4.1%
Atlas Copco AB - Class B Shares
(Industrial Machinery) ......................... 1,087,000 17,176,552
Indutrade AB (Industrial Machinery) ............ 2,200 53,581
Investor AB - Class B Shares
(Multi-Sector Holdings) ........................ 488,400 12,001,218
Sandvik AB (Industrial Machinery) .............. 782,800 15,915,990
--------------
45,147,341
--------------
SWITZERLAND--16.9%
ABB Ltd. Registered Shares
(Heavy Electrical Equipment) ................... 848,900 20,855,596
Compagnie Financiere Richemont AG
Class A (Apparel, Accessories &
Luxury Goods) .................................. 241,800 14,961,237
EFG International (Asset Management &
Custody Banks) ................................. 219,417 9,710,323
Geberit AG (Building Products) ................. 68,100 10,027,132
Kuehne & Nagel International AG (Marine) ....... 277,986 26,030,288
Lindt & Spruengli AG (Packaged
Foods & Meats) ................................. 2,912 8,821,031
Nestle S.A. Registered Shares
(Packaged Foods & Meats)(i) .................... 83,798 36,426,378
Nestle S.A. Registered Shares
(Packaged Foods & Meats)(j) .................... 6,600 2,868,972
Paris RE Holdings Ltd. (Multi-line
Insurance)(b) .................................. 218,710 5,327,106
Roche Holding AG Registered Shares
(Pharmaceuticals) .............................. 232,052 40,310,133
UBS AG Registered Shares
(Diversified Capital Markets) .................. 200,500 10,448,755
--------------
185,786,951
--------------
TAIWAN--1.0%
Taiwan Semiconductor Manufacturing Co. Ltd.
Sponsored ADR (Semiconductors) ................. 1,142,769 11,336,268
UNITED KINGDOM--16.5%
British American Tobacco plc (Tobacco) ......... 1,503,426 49,864,802
Diageo plc (Distillers & Vintners) ............. 1,164,114 24,856,276
HBOS plc (Diversified Banks) ................... 73 1,327
Imperial Tobacco Group plc (Tobacco) ........... 628,072 28,378,921
See Notes to Financial Statements
10
Phoenix Foreign Opportunities Fund
SHARES VALUE
---------- --------------
UNITED KINGDOM--CONTINUED
Reckitt Benckiser plc (Household Products) ..... 413,791 $ 22,517,958
Royal Bank of Scotland Group plc
(Diversified Banks) ............................ 18,597 205,653
SABMiller plc (Brewers) ........................ 632,745 17,350,509
Tesco plc (Food Retail) ........................ 4,451,913 38,148,742
--------------
181,324,188
--------------
- -----------------------------------------------------------------------------
TOTAL FOREIGN COMMON STOCKS
(IDENTIFIED COST $898,144,622) ................. 1,027,560,849
- -----------------------------------------------------------------------------
EQUITY LINKED CERTIFICATES--5.2%
INDIA--5.2%
CLSA Financial Products Ltd. -
Bharti-Tele Ventures Strike price
..000001 Indian Rupee expiration
5/31/10 (Broadcasting & Cable TV)(b) ........... 1,820,211 39,116,334
CLSA Financial Products Ltd. -
HDFC Bank Ltd. Class A Strike price
..000001 Indian Rupee expiration
6/28/10 (Diversified Banks)(b) ................. 295,685 8,461,322
JPMorgan Chase International -
HDFC Strike price .0001 Indian Rupee,
expiration date 5/25/09
(Regional Banks)(b) ............................ 196,490 9,482,608
- -----------------------------------------------------------------------------
TOTAL EQUITY LINKED CERTIFICATES
(IDENTIFIED COST $43,284,220) .................. 57,060,264
- -----------------------------------------------------------------------------
FOREIGN OPTIONS--0.1%
SWITZERLAND--0.1%
Roche Holdings AG - Registered
Shares Call Option exercise
price 160 CHF, expiration date
12/18/09 (Pharmaceuticals)(e) .................. 295 1,406,063
- -----------------------------------------------------------------------------
TOTAL FOREIGN OPTIONS
(IDENTIFIED COST $1,610,651) ................... 1,406,063
- -----------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS--98.9%
(IDENTIFIED COST $943,039,493) ................. 1,086,027,176
- -----------------------------------------------------------------------------
SHARES VALUE
---------- --------------
SHORT-TERM INVESTMENTS--19.9%
MONEY MARKET MUTUAL FUNDS--18.4%
State Street Navigator Prime Plus
(5.37% seven-day effective yield)(h) ........... 202,165,000 $ 202,165,000
PAR VALUE
(000) VALUE
---------- --------------
FEDERAL AGENCY SECURITIES(d)--1.5%
FHLB 4.20%, 9/4/07 ............................. $9,880 9,876,542
FNMA 4.26%, 9/4/07 ............................. 5,840 5,837,927
--------------
15,714,469
--------------
- -----------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $217,879,469) 217,879,469
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS--118.8%
(IDENTIFIED COST $1,160,918,962) ............... 1,303,906,645(a)
Other assets and liabilities, net--(18.8)% ..... (206,034,115)
--------------
NET ASSETS--100.0% ............................. $1,097,872,530
==============
At August 31, 2007, the Fund had entered into forward currency contracts as
follows:
In Net Unrealized
Contracts Exchange Settlement Appreciation
to Sell for Date Value (Depreciation)
- --------------- --------------- ------------- ------------ ---------------
AUD 36,560,000 USD 29,551,448 2/29/08 $29,704,759 $(153,311)
AUD Australian Dollar USD United States Dollar
(a) Federal Income Tax Information: Net unrealized appreciation of investment
securities is comprised of gross appreciation of $151,370,190 and gross
depreciation of $13,615,635 for federal income tax purposes. At August 31,
2007, the aggregate cost of securities for federal income tax purposes was
$1,166,152,090.
(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 security.
(f) All or a portion segregated as collateral for forward currency contracts.
(g) All or a portion of security is on loan.
(h) Represents security purchased with cash collateral received for securities
on loan.
(i) Security traded on Virt-x exchange.
(j) Security traded on Swiss exchange.
See Notes to Financial Statements
11
Phoenix Foreign Opportunities Fund
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2007
(UNAUDITED)
ASSETS
Investment securities at value, including
$196,653,596 of securities on loan
(Identified cost $1,160,918,962) $1,303,906,645
Foreign currency at value (Identified cost $25,966) 25,440
Receivables
Investment securities sold 12,908,131
Fund shares sold 5,201,166
Dividends and interest 1,924,634
Tax reclaims 209,116
Prepaid expenses 50,657
Other assets 39,296
--------------
Total assets 1,324,265,085
--------------
LIABILITIES
Cash overdraft 6
Payables
Investment securities purchased 21,280,214
Fund shares repurchased 1,139,168
Upon return of securities loaned 202,165,000
Investment advisory fee 620,575
Foreign capital gain taxes 365,920
Distribution and service fees 204,656
Transfer agent fee 106,734
Administration fee 76,949
Trustee deferred compensation plan 39,296
Trustees' fee 3,157
Other accrued expenses 237,569
Unrealized depreciation on forward currency contracts 153,311
--------------
Total liabilities 226,392,555
--------------
NET ASSETS $1,097,872,530
==============
NET ASSETS CONSIST OF:
Capital paid in on shares of beneficial interest $ 961,069,170
Undistributed net investment income 3,447,781
Accumulated net realized loss (9,211,421)
Net unrealized appreciation 142,567,000
--------------
NET ASSETS $1,097,872,530
==============
CLASS I
Net asset value (net assets/shares outstanding)
offering and redemption price per share $26.39
Shares of beneficial interest outstanding,
$0.001 par value, unlimited authorization 14,910,048
Net Assets $ 393,482,802
CLASS A
Net asset value per share (net assets/shares outstanding) $26.37
Offering price per share $26.37/(1-5.75%) $27.98
Shares of beneficial interest outstanding, $0.001 par
value, unlimited authorization 23,070,658
Net Assets $ 608,310,132
CLASS C
Net asset value (net assets/shares outstanding) and
offering price per share $26.14
Shares of beneficial interest outstanding, $0.001
par value, unlimited authorization 3,676,262
Net Assets $ 96,079,596
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 2007
(UNAUDITED)
INVESTMENT INCOME
Dividends $ 12,994,343
Interest 1,060,217
Security lending 216,006
Foreign taxes withheld (812,754)
-------------
Total investment income 13,457,812
-------------
EXPENSES
Investment advisory fee 3,908,217
Service fees, Class A 647,616
Distribution and service fees, Class C 374,724
Administration fee 415,024
Transfer agent 452,590
Custodian 244,674
Printing 133,735
Professional 58,272
Registration 44,799
Trustees 37,492
Miscellaneous 45,019
-------------
Total expenses 6,362,162
Less expenses reimbursed by investment adviser (229,525)
Custodian fees paid indirectly (3,038)
-------------
Net expenses 6,129,599
-------------
NET INVESTMENT INCOME (LOSS) 7,328,213
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments 4,449,925
Net realized gain (loss) on foreign currency transactions (7,051,889)
Net change in unrealized appreciation (depreciation)
on investments 21,928,527
Net change in unrealized appreciation (depreciation) on foreign
currency translation 1,306,050
-------------
NET GAIN (LOSS) ON INVESTMENTS 20,632,613
-------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 27,960,826
=============
See Notes to Financial Statements
12
Phoenix Foreign Opportunities Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended
August 31, 2007 Year Ended
(Unaudited) February 28, 2007
-------------- -------------------
FROM OPERATIONS
Net investment income (loss) $ 7,328,213 $ 2,051,330
Net realized gain (loss) (2,601,964) 21,656,467
Net change in unrealized appreciation (depreciation) 23,234,577 21,288,542
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 27,960,826 44,996,339
-------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, Class I (1,016,176) (499,259)
Net investment income, Class A (1,281,185) (1,512,542)
Net investment income, Class C (120,389) (45,520)
Net realized short-term gains, Class I (151,668) (249,367)
Net realized short-term gains, Class A (217,170) (800,360)
Net realized short-term gains, Class C (30,858) (56,216)
Net realized long-term gains, Class I (394,337) (1,109,596)
Net realized long-term gains, Class A (564,641) (4,376,890)
Net realized long-term gains, Class C (80,231) (388,207)
-------------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (3,856,655) (9,037,957)
-------------- ------------
FROM SHARE TRANSACTIONS
CLASS I
Proceeds from shares sold (1,840,899 and 1,408,560 shares,
respectively) 48,855,299 34,448,164
Net asset value of shares issued from reinvestment of
distributions (40,959 and 46,128 shares, respectively) 1,104,681 1,064,555
Proceeds from shares issued in conjunction with Plan of
Reorganization (11,023,788 and 2,113,337 shares,
respectively) (See Note 10) 290,635,894 46,590,175
Cost of shares repurchased (1,353,682 and 209,941 shares,
respectively) (36,007,552) (4,936,648)
-------------- ------------
Total 304,588,322 77,166,246
-------------- ------------
CLASS A
Proceeds from shares sold (10,821,128 and 9,887,380 shares,
respectively) 287,538,008 239,920,974
Net asset value of shares issued from reinvestment of
distributions (66,599 and 270,015 shares, respectively) 1,795,542 6,284,602
Proceeds from shares issued in conjunction with Plan of
Reorganization (145,171 and 574,941 shares, respectively)
(See Note 10) 3,821,481 12,673,037
Cost of shares repurchased (2,396,005 and 2,306,245 shares,
respectively) (62,794,682) (54,482,190)
-------------- ------------
Total 230,360,349 204,396,423
-------------- ------------
CLASS C
Proceeds from shares sold (2,002,092 and 1,512,251 shares,
respectively) 52,613,190 36,932,314
Net asset value of shares issued from reinvestment of
distributions (5,223 and 15,001 shares, respectively) 139,785 344,090
Proceeds from shares issued in conjunction with Plan of
Reorganization (7,555 and 66,354 shares, respectively)
(See Note 10) 197,797 1,457,044
Cost of shares repurchased (155,455 and 57,864 shares,
respectively) (4,045,630) (1,350,669)
-------------- ------------
Total 48,905,142 37,382,779
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 583,853,813 318,945,448
-------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS 607,957,984 354,903,830
NET ASSETS
Beginning of period 489,914,546 135,010,716
-------------- ------------
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
AND DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
OF $3,447,781 AND $(1,462,682), RESPECTIVELY) $1,097,872,530 $489,914,546
============== ============
See Notes to Financial Statements
13
Phoenix Foreign Opportunities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS I
----------------------------------------
SIX MONTHS
ENDED FROM INCEPTION
AUGUST 31, 2007 MAY 15, 2006 TO
(UNAUDITED) FEBRUARY 28, 2007
Net asset value, beginning of period $25.00 $22.54
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)(6) 0.24 0.13
Net realized and unrealized gain (loss) 1.26 3.14
------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.50 3.27
------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.07) (0.22)
Distributions from net realized gains (0.04) (0.59)
------ ------
TOTAL DISTRIBUTIONS (0.11) (0.81)
------ ------
Change in net asset value 1.39 2.46
------ ------
NET ASSET VALUE, END OF PERIOD $26.39 $25.00
====== ======
Total return 5.96%(5) 14.84%(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (thousands) $393,483 $83,938
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.12%(4) 1.13%(4)
Gross operating expenses 1.16%(4) 1.17%(4)
Net investment income (loss) 1.75%(4) 0.71%(4)
Portfolio turnover 40%(5) 57%(5)
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD
ENDED YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 YEAR ENDED
AUGUST 31, 2007 ----------------------------- TO FEBRUARY 29, DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004 2003
Net asset value, beginning of period $25.00 $21.47 $19.02 $15.47 $14.84 $11.86
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.22(6) 0.21(6) 0.17(6) 0.16 (0.03) 0.12
Net realized and unrealized gain (loss) 1.25 4.08 3.85 3.81 0.66 3.39
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.47 4.29 4.02 3.97 0.63 3.51
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.06) (0.17) (0.22) (0.16) -- (0.06)
Distributions from net realized gains (0.04) (0.59) (1.35) (0.26) -- (0.43)
Tax return of capital -- -- -- -- -- (0.06)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.10) (0.76) (1.57) (0.42) -- (0.55)
------ ------ ------ ------ ------ ------
Payment by affiliate(3) -- -- -- --(2) -- 0.02
------ ------ ------ ------ ------ ------
Change in net asset value 1.37 3.53 2.45 3.55 0.63 2.98
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $26.37 $25.00 $21.47 $19.02 $15.47 $14.84
====== ====== ====== ====== ====== ======
Total return(1) 5.85%(5) 20.39% 21.82% 26.15%(3) 4.25%(5) 30.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $608,310 $360,822 $128,991 $2,714 $1,482 $1,473
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 1.36%(4) 1.37% 1.25% 1.25% 1.25%(4) 2.87%
Gross operating expenses 1.41%(4) 1.43% 1.62% 2.10% 2.63%(4) 3.21%
Net investment income (loss) 1.62%(4) 0.88% 0.85% 1.50% 0.18%(4) 0.11%
Portfolio turnover 40%(5) 57% 52% 32% 41%(4) 65%
(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
14
Phoenix Foreign Opportunities Fund
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
CLASS C
---------------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD FROM INCEPTION
ENDED YEAR ENDED FEBRUARY 28, JANUARY 1, 2004 OCTOBER 10, 2003
AUGUST 31, 2007 ----------------------------- TO FEBRUARY 29, TO DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004 2003
Net asset value, beginning of period $24.85 $21.41 $19.11 $15.55 $14.95 $13.91
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.11(6) (0.01)(6) (0.06)(6) 0.01 (0.06) 0.11
Net realized and unrealized gain (loss) 1.26 4.11 3.92 3.84 0.66 1.34
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.37 4.10 3.86 3.85 0.60 1.45
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends from net investment income (0.04) (0.07) (0.21) (0.03) -- --
Distributions from net realized gains (0.04) (0.59) (1.35) (0.26) -- (0.43)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.08) (0.66) (1.56) (0.29) -- (0.43)
------ ------ ------ ------ ------ ------
Payment by affiliate(3) -- -- -- --(2) -- 0.02
------ ------ ------ ------ ------ ------
Change in net asset value 1.29 3.44 2.30 3.56 0.60 1.04
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $26.14 $24.85 $21.41 $19.11 $15.55 $14.95
====== ====== ====== ====== ====== ======
Total return(1) 5.49%(5) 19.46 % 20.96 % 25.21%(3) 4.01 %(5) 10.71 %(5)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $96,080 $45,154 $6,019 $39 $12 $11
RATIO TO AVERAGE NET ASSETS OF:
Net operating expenses 2.12%(4) 2.13 % 2.00 % 2.00% 2.00 %(4) 1.92 %(4)
Gross operating expenses 2.17%(4) 2.17 % 2.35 % 2.86%(4) 3.38 %(4)
Net investment income (loss) 0.82%(4) (0.06)% (0.29)% 0.76% (1.05)%(4) (0.14)%(4)
Portfolio turnover 40% (5) 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.
15
See Notes to Financial Statements
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2007 (UNAUDITED)
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 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.
16
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2007 (UNAUDITED) (CONTINUED)
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This
standard defines the threshold for recognizing the benefits of tax-return
positions in the financial statements as "more-likely-than-not" to be sustained
by the taxing authority and requires measurement of a tax position meeting the
more-likely-than-not criterion, based on the largest benefit that is more than
50 percent likely to be realized. Management has analyzed the Funds' tax
positions taken on federal income tax returns for all open tax years (tax years
ended December 31, 2003 - 2006) for purposes of implementing FIN48, and has
concluded that no provision for income tax is required in the Funds' financial
statements.
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.
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.
17
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2007 (UNAUDITED) (CONTINUED)
J. EQUITY LINKED CERTIFICATES:
Each Fund may invest in Equity Linked Certificates. The Fund purchases the
certificates ("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.
K. SECURITIES LENDING:
The Funds may loan securities to qualified brokers through an agreement
with State Street Bank and Trust Company (the "Custodian"). Under the terms of
agreement, the Fund is required to maintain collateral with a market value not
less than 100% of the market value of loaned securities. Collateral is adjusted
daily in connection with changes in the market value of securities on loan.
Collateral may consist of cash, securities issued or guaranteed by the U.S.
Government or its agencies, sovereign debt of foreign countries and/or
irrevocable letters of credit issued by banks. Cash collateral is invested in a
short-term money market fund. Dividends earned on the collateral and premiums
paid by the broker are recorded as income by the Fund net of fees and rebates
charged by the Custodian for its services in connection with this securities
lending program. Lending portfolio securities involves a risk of delay in the
recovery of the loaned securities or in the foreclosure on collateral.
As of August 31, 2007, the Foreign Opportunities Fund had securities on
loan with a market value of $196,653,596 and held non-cash collateral of
$907,390 and cash collateral of $202,165,000.
3. INVESTMENT ADVISORY FEE AND RELATED PARTY TRANSACTIONS
Phoenix Investment Counsel, Inc. ("PIC") (the "Adviser") is the Adviser to
each Fund of the Trust. As compensation for its services to the Trust, PIC, 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.
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%
Effective August 23, 2007, the adviser may recapture operating expenses
waived or reimbursed under this arrangement, within three years following the
end of the fiscal year in which such waiver or reimbursement occurred. Each Fund
must pay its ordinary expenses before the Adviser is entitled to any
reimbursement and must remain in compliance with applicable expense limitations.
As distributor of each Fund's shares, Phoenix Equity Planning Corporation
("PEPCO"), an indirect wholly-owned subsidiary of PNX, has advised the Funds
that it retained net selling commissions and deferred sales charges for the six
months (the "period") ended August 31, 2007, as follows:
Class A Class A Class C
Net Selling Deferred Deferred
Commissions Sales Charges Sales Charges
------------- ------------- -------------
Focused Value Fund ............. $ 1,513 $ -- $ 11
Foreign Opportunities Fund ..... 119,527 89 18,510
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.
PEPCO serves as the Administrator to the Trust. For its
services, which includes financial agent services, PEPCO receives an
administration fee at an annual rate of 0.09% of the first $5 billion, 0.08% on
the next $10 billion and 0.07% over $15 billion of the average net assets across
all non-money market funds in The Phoenix Funds and the Phoenix Edge Series
Fund. For the period ended August 31, 2007, the Trust incurred administration
fees totaling $438,625.
PEPCO serves as the Trust's transfer agent with Boston Financial Data
Services, Inc. serving as sub-transfer agent. For the year ended August 31,
2007, transfer agent fees were $515,731 as reported in the Statements of
Operations.
18
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2007 (UNAUDITED) (CONTINUED)
At August 31, 2007, PNX and its affiliates and Phoenix affiliated Funds
held shares, which aggregated the following:
Aggregate
Net Asset
Shares Value
------------ ------------
Foreign Opportunities Fund
Class A ........................... 455,377 $12,008,291
Class C ........................... 4,888 127,772
During the fiscal year ended February 28, 2005, Janus Services, former
adviser to the funds, 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 August 31, 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 August 31, 2007, were as follows:
Purchases Sales
------------ ------------
Focused Value Fund ................... $ 21,915,478 $ 24,642,684
Foreign Opportunities Fund ........... 649,919,478 346,660,645
There were no purchases or sales of long-term U.S. Government and agency
securities.
5. CREDIT RISK AND ASSET CONCENTRATIONS
In countries with limited or developing markets, investments may present
greater risks than in more developed markets and the prices of such investments
may be volatile. The consequences of political, social or economic changes in
these markets may have disruptive effects on the market prices of these
investments and the income they generate, as well as a Fund's ability to
repatriate such amounts.
Certain Funds may invest a high percentage of their assets in specific
sectors of the market in their pursuit of a greater investment return.
Fluctuations in these sectors of concentration may have a greater impact on a
Fund, positive or negative, than if a Fund did not concentrate its investments
in such sectors.
At August 31, 2007, the Focused Value Fund held securities issued by
various companies in the Consumer Staples sector comprising 45% 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 August 31, 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* .................. 38% 2
The shareholders are not affiliated with PNX.
* 1 account representing 14.01% 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.
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 SEC 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
19
PHOENIX ADVISER TRUST
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2007 (UNAUDITED) (CONTINUED)
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.
In February 2005, the NASD notified PNX that it was asserting violations of
trade reporting rules by a subsidiary. PNX responded to the NASD allegations in
May 2005. Thereafter, in January 2007, the NASD notified PNX that the matter is
being referred for potential violations and possible action. On May 3, 2007, the
NASD accepted a letter of acceptance, waiver and consent submitted by the PXP
subsidiary to resolve this matter. Without admitting or denying the NASD's
findings, in accordance with the terms of the letter the PXP subsidiary agreed
to a censure, to pay a fine of $8,000 and to revise its supervisory procedures.
The Company does not believe that the outcome of these matters 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 arrangements.
10. PLANS OF REORGANIZATION
On April 13, 2007, the Foreign Opportunities Fund acquired all of the net
assets of the Phoenix Insight International Fund ("International Fund") of the
Phoenix Insight Funds Trust pursuant to an Agreement and Plan of Reorganization
approved by the International Fund's Board of Trustees on March 30, 2007. The
acquisition was accomplished by a tax-free exchange of 11,023,788 Class I
shares, 145,171 Class A shares, and 7,555 Class C shares of the Foreign
Opportunities Fund outstanding on April 13, 2007 (valued at $290,635,894,
$3,821,481 and $197,797, respectively) for 15,422,914 Class I shares, 211,994
Class A shares, and 11,002 Class C shares of the International Fund outstanding
on April 13, 2007. The International Fund had net assets on that date of
$294,655,171 including $53,472,451 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 $885,262,824. The
shareholders of each Class of the International Fund received for each share
owned approximately 0.71, 0.68 and 0.69 share, respectively, for Class I, Class
A, and Class C shares of the same class of the Foreign Opportunities Fund.
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 share, 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.
11. 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.
12. SUBSEQUENT EVENT
Effective September 24, 2007, the Phoenix Foreign Opportunities Fund, a
Fund of Phoenix Adviser Trust (a "Predecessor Fund"), will be reorganized into
the Phoenix Foreign Opportunities Fund, a Fund of the Phoenix Opportunities
Trust (a "Successor Fund"). The Successor Fund's principal investment
strategies, risks, fees and expenses, and portfolio management team will be the
same as those of the Predecessor Fund.
20
PHOENIX ADVISER TRUST INVESTMENT ADVISER
101 Munson Street Phoenix Investment Counsel, Inc.
Greenfield, MA 01301-9668 56 Prospect Street
Hartford, CT 06115-0480
TRUSTEES PRINCIPAL UNDERWRITER
George R. Aylward Phoenix Equity Planning Corporation
E. Virgil Conway One American Row
Harry Dalzell-Payne Hartford, CT 06103-2899
Francis E. Jeffries
Leroy Keith, Jr. TRANSFER AGENT
Marilyn E. LaMarche Phoenix Equity Planning Corporation
Philip R. McLoughlin, Chairman One American Row
Geraldine M. McNamara Hartford, CT 06103-2899
James M. Oates
Richard E. Segerson CUSTODIAN
Ferdinand L.J. Verdonck State Street Bank and Trust Company
P.O. Box 5501
OFFICERS Boston, MA 02206-5501
George R. Aylward, President
Nancy G. Curtiss, Senior Vice President
Francis G. Waltman, Senior Vice President HOW TO CONTACT US
Marc Baltuch, Vice President and Chief Mutual Fund Services 1-800-243-1574
Compliance Officer Advisor Consulting Group 1-800-243-4361
W. Patrick Bradley, Chief Financial Officer Telephone Orders 1-800-367-5877
and Treasurer Text Telephone 1-800-243-1926
Kevin J. Carr, Vice President, Counsel, Website PHOENIXFUNDS.COM
Secretary and Chief Legal Officer
- --------------------------------------------------------------------------------
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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[LOGO OMITTED] -----------------
PHOENIX PRESORTED
STANDARD
Phoenix Equity Planning Corporation U.S. POSTAGE
P.O. Box 150480 PAID
Hartford, CT 06115-0480 Lancaster, PA
Permit No. 1793
-----------------
For more information about Phoenix mutual funds, please call
your financial representative, contact us at 1-800-243-1574
or visit PHOENIXFUNDS.COM.
PXP4298 10-07
BPD32930
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Phoenix Adviser Trust
--------------------------------------------------------------------
By (Signature and Title)* /s/ George R. Aylward
-------------------------------------------------------
George R. Aylward, President
(principal executive officer)
Date November 8, 2007
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ George R. Aylward
-------------------------------------------------------
George R. Aylward, President
(principal executive officer)
Date November 8, 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 November 8, 2007
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* Print the name and title of each signing officer under his or her signature.